January 13, 2004

FirstName LastName
Company
Company1
Address1
Address2
City , State Zip

RE: AMENDMENT - PROMISSORY NOTE ("NOTE") OF PENN OCTANE CORPORATION (THE
"COMPANY") CURRENTLY HELD BY YOU WITH A DUE DATE OF DECEMBER 15, 2003
AND RELATED AGREEMENTS AND INSTRUMENTS

Dear Holder Of The Promissory Notes:

Reference is made to the promissory note(s) which is currently held by you in connection with one or more of the following transactions with the Company:

i.) The promissory note(s) originally issued by the Company in connection with the private placement on or around December 17, 1999 (the "Original Notes"), as amended (the "Restructured Notes"), and/or

ii.) The promissory note(s) originally issued by the Company contemporaneously with the restructuring of the Original Notes (the "New Notes").

iii.) The promissory note originally issued in June 2002 for $200,000 and December 2002 for $300,000 (the "Additional Notes").

The Restructured Notes, the New Notes and the Additional Notes are collectively referred to as the "Promissory Notes" and all of the underlying agreements pertaining to the Promissory Notes, including the purchase agreement, the note agreement, the common stock purchase warrant agreement, the registration rights agreement, and all related amendments, if any, are collectively referred to as the "Original Documents".

The Promissory Notes, including unpaid interest were due and payable on December 15, 2003. The Company desires to extend the payment due date on the Promissory Notes until December 15, 2005 under the following conditions: (i) The principal amount of the Promissory Notes will be due in one balloon payment on December 15, 2005, except that the Promissory Notes may be repaid at any time without penalty in whole or in part at the sole option of the Company, (ii) the Company will continue to pay interest on the Promissory Notes at a rate of 16.50% per annum, payable quarterly, (iii) The Company will also extend the expiration date of the warrants currently held by you in connection with the original issuance of the Promissory Notes to December 15, 2008. In connection with the New Notes and Additional Notes, whereby the holders of those notes did not receive any warrants in connection with their investment, the Company will issue warrants under the

Amendment To Promissory Notes
January 13, 2004

same terms and conditions of the warrants described herein, (iv) the Company agrees to continue to pay you a fee equal to 1.5% of the principal amount of the Promissory Notes which remain outstanding, if any, at the close of business on December 15, 2003, March 15, 2004, June 15, 2004, September 15, 2004, December 15, 2004, March 15, 2005, June 15, 2005, September 15, 2005 and December 15, 2005. In the case of the Additional Notes, the fee will continue to be 2.0%, (v) the Company will issue additional warrants to the holders of the Promissory Notes to purchase units in Rio Vista Energy Partners L.P., provided that the Company successfully completes the Spin-off. The warrants will granted based on 2,500 warrants for each $100,000 of Promissory Notes extended at the time this Amendment is executed and 2,500 warrants for each $100,000 of Promissory Notes outstanding on December 16, 2004, if any. The warrants will expire on December 15, 2008 and the exercise price will be based on a formula as described below, and (vi) the Company will provide the holders of the Promissory Notes with a letter confirmation from RZB regarding RZB's agreement to refrain from taking any action against certain assets of the Company until all the Promissory Notes have been fully repaid and the Company on a good faith basis will provide a perfected security interest in the US portion of its owned pipelines after the indebtedness of Cowboy and Tanner have been fully repaid.

The holders of the Promissory Notes are currently aware of the Company's efforts to complete the Spin-off as more fully described in the Company's Form 10-K for the year ended July 31, 2003, filed on November 3, 2003 and the Company's 10-Q for the quarter ended October 31, 2003, filed on December 17, 2003. In connection with the Spin-off, the Company will be required to obtain consents from the holders of the Promissory Notes to complete the Spin-off. This amendment will provide for the consent by the holders of the Promissory Notes for the Company to complete the Spin-off under the terms described below

The Company also desires to remove Investec as the collateral agent in connection with the Promissory Notes. This amendment will provide for consent by the holders of the Promissory Notes for the Company to replace Investec as collateral agent replacing them with The Law Offices of Kevin Finck, counsel to the Company.

This amendment will also provide for consent by the holders of the Promissory Notes for the collateral agent to immediately release 1,000,000 shares of common stock of the Company owned by Mr. Jerome Richter (the "Shares") and pledged as security in connection with the Promissory Notes upon the Company's perfection of security interest in certain assets as described below. The parties agree to establish a mutually agreeable escrow agent to hold the Shares.

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and you hereby agree that your Original Documents shall be, and hereby are, amended, effective from and after December 15, 2003, to the fullest extent necessary to effectuate the following:

Amendment To Promissory Notes
January 13, 2004

(a) Extend the payment due date from "December 15, 2003" to "December 15, 2005".
(b) Principal payments shall be due on December 15, 2005.
(c) The Promissory Notes may be repaid by the Company in whole or part at any time prior to December 15, 2005 without penalty.
(d) Payment of interest on the Promissory Notes outstanding at the rate of 16.50% per annum payable as follows: The December 15, 2003 payment which has yet to be made will be paid on the execution date of this Amendment and remaining quarterly interest will be paid on March 15, 2004, June 15, 2004, September 15, 2004, December 15, 2004, March 15, 2005, June 15, 2005, September 15, 2005 and December 15, 2005.

In connection with the above, the Company will issue to the holder of the New Notes and Additional Notes new warrants under the same terms and conditions of the warrants issued to the holders of the Restructured Notes.

a. Holder of the Promissory Notes shall be entitled to receive 2,500 warrants to purchase units of Rio Vista for every $100,000 of principal of Promissory Notes extended,

b. Holder of the Promissory Notes shall be entitled to receive an

Amendment To Promissory Notes
January 13, 2004

additional 2,500 warrants to purchase units of Rio Vista for every $100,000 of principal of Promissory Notes outstanding at December 16, 2004,
c. Exercise price of all warrants will be based on the 1st qtly distribution paid by Rio Vista, annualized, to provide a 20% yield (example: Dividend $.25. Annualized $1.00, Exercise price $5.00),
d. The expiration date of warrants will be December 15, 2006,
e. The warrants will be callable by Rio Vista in the event that the annualized current dividend provides a 10% yield based on the average common unit trading price for 30 consecutive days,
f. Issuance of the warrants herein are only required if Rio Vista is successfully Spun-off. No additional obligation from the Company to the holder of the Promissory Notes if the Company does not complete the Spin-off of Rio Vista,

Amendment To Promissory Notes
January 13, 2004

as described in the Company's Form 10-K for the year ended July 31, 2003, and Form 10-Q for the quarter ended October 31, 2003 provided that the Spin-off provides for the following:

a. The Company or Rio Vista Energy Partners L.P. ("Rio Vista") will be prohibited from entering into any further agreement to pledge any of its pipeline or terminal assets until the Promissory Notes have been paid in full
b. Rio Vista will guaranty performance under the Promissory Notes
c. Rio Vista will be prohibited from making any distributions ("Distributions") to unitholders to the extent that any payments required as of the date of the Distribution have not been made.
d. The form of providing for the above conditions will be documented by the Company on a good faith basis

In addition to the above, to the extent that any amounts are required to be repaid in connection with Declining Noteholders, you hereby agree to allow the Company to obtain additional financing (the "Replacement Notes") equal to the amount of Promissory Notes repaid to the Declining Noteholders under the same

Amendment To Promissory Notes
January 13, 2004

terms and conditions outlined in this Amendment, except that the holders of the Replacement Notes shall not be entitled to receive any warrants in the Company which were issued in connection with the Restructured Notes. In addition, you agree that the holders of the Replacement Notes shall participate pari-pasu with any collateral granted to the holders of the Promissory Notes.

If you are in agreement with the terms of this amendment letter, please indicate so by signing below and faxing an executed copy to Ian Bothwell at
(760) 772-8588 no later than the close of business on January 16, 2004.

Very truly yours,

Penn Octane Corporation

By: __________________________________
Its: Vice President and Chief Financial Officer

The undersigned holder of the Promissory Note and other Original Documents referred to in this amendment letter hereby acknowledges his/her/its agreement to all of the provisions of this amendment letter and intention to be so bound. The undersigned also agrees to keep the contents of this amendment letter and any documents or discussions regarding the same strictly confidential and not to use the same for any purpose pending public disclosure thereof by the Company; provided, however, that the undersigned may consult with his, her or its agents and advisors with respect to the transactions contemplated hereby and, in connection therewith, disclose the terms and contents of this amendment letter and any other documents relating to the subject matter thereof or hereof.

FirstName LastName
Company
Company1

By: __________________________________

Its: _________________________________

Date:_________________________________

Name and Telephone Number of Holder:

Amendment To Promissory Notes
January 13, 2004

EXHIBIT A - DRAFT

This letter will confirm that RZB Finance LLC ("RZB") agrees to subordinate its liens and security interests in all of Penn Octane Corporation's (the "Company") assets, personal property, fixtures, intangibles and property constituting Collateral (as defined in the General Security Agreement between the Company and RZB), except for (i) cash held in the Company's accounts at RZB, (ii) inventory of every type and description, whether raw, in process or finished and all documents, documents of title and receipts covering any inventory and all products and proceeds thereof; (iii) accounts, accounts receivable, contract rights, general intangibles, payment intangibles, tax refund claims, instruments, promissory notes, chattel paper, supporting obligations, letters of credit and letter-of-credit rights and other rights to payment of money and all products and proceeds thereof; (iv) the Seadrift lease dated October 2003, as amended, modified or supplemented from time to time; (v) the Company's LPG supply agreements and all rights and remedies relating thereto and (vi) the PMI agreements, as to all of the foregoing items in clauses (i) through and including (vi), whether now owned or hereafter acquired and wherever located (all such property, except the property described in clauses (i) through and including (vi), the "Subordinated Collateral").

Accordingly, RZB consents that the Subordinated Collateral can be pledged by the Company to the Company's existing creditors (which shall be deemed to include those creditors which may substitute as note holders in connection with existing indebtedness, and the holders of any indebtedness incurred to refinance existing indebtedness) and RZB agrees that it shall not take any action which would prevent such creditors (the "Senior Creditors") from foreclosing and enforcing liens superior to RZB in such Subordinated Collateral in the event the Company is in default under the related indebtedness.

Except as expressly set forth herein, nothing contained herein shall limit or affect any of RZB's rights or remedies against the Company.

This agreement shall be governed by the laws of the State of New York without regard to principles of conflicts of law. Unless the context otherwise requires, all terms used herein which are defined in the Uniform Commercial Code of the State of New York as in effect from time to time shall have the meanings therein stated. The subordination contained herein is conditioned upon the parties submitting and consenting to the exclusive jurisdiction of the Courts of the State of New York located in New York County and of the United States District Court for the Southern District of New York in connection with any action or proceeding under, arising from or relating to this Agreement. The subordination contained herein is conditioned upon the parties waiving, to the fullest extent they may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. Each of the parties agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. The Senior Creditors and RZB hereby IRREVOCABLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING UNDER OR RELATING TO THIS AGREEMENT.

The subordination contained herein is conditioned upon the Senior Creditors not challenging or disputing (a) the validity, perfection or priority of RZB's security interest in any Collateral (other than Subordinated Collateral), or (b) any relief requested by RZB to protect or realize on its Collateral (other than Subordinated Collateral) in any bankruptcy case with respect to the Company including, without limitation, any cash collateral order or debtor-in-possession financing.

This agreement is solely for the benefit of RZB and the Senior Creditors and their successors and assigns and no other person shall have any right or benefit under or because of the existence of this Agreement.

The Senior Creditors shall permit use of any collateral subject to their senior security interest for storage, processing, transportation or delivery of RZB's collateral for a period of 60 days after notice from the Senior Creditors or their representative to RZB of the beginning of such 60-day period, all without charge, cost or expense to RZB.

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

This Contribution, Conveyance and Assumption Agreement (this "Agreement") is entered into as of September 16, 2004, by and among Penn Octane Corporation, a Delaware corporation ("POCC"), Rio Vista GP LLC, a Delaware limited liability company (the "GP"), Rio Vista Energy Partners L.P., a Delaware limited partnership (the "MLP"), Rio Vista Operating GP LLC, a Delaware limited liability company (the "Operating GP"), and Rio Vista Operating Partnership L.P., a Delaware limited partnership (the "Operating Partnership").

RECITALS

WHEREAS, prior to the date hereof, POCC formed the GP, as a wholly-owned direct subsidiary, and purchased for $1,000.00 all of the limited liability company interests in the GP;

WHEREAS, the GP and POCC formed the MLP, with the GP purchasing a 2% general partner interest for $20 and POCC purchasing common units representing a 98% limited partner interest for $980.00;

WHEREAS, the MLP formed the Operating GP and purchased all of the limited liability company interests in the Operating GP for $1,000.00;

WHEREAS, POCC and the Operating GP formed the Operating Partnership, with the Operating GP purchasing a 0.10% general partner interest for $1.00 and POCC purchasing a 99.9% limited partner interest for $999.00;

WHEREAS, each of the following transactions shall occur as of 4:58 P.M. Eastern Time on September 30, 2004 (the "Contribution Effective Time"):

2. POCC will contribute to the Operating Partnership the assets set forth in the Conveyance Agreement described in Section 1.2 below (the "LPG Assets") as an additional capital contribution; and

3. The GP will convey $1,000 to the MLP in exchange for the issuance of incentive distribution rights to the GP;

WHEREAS, each of the following transactions shall occur as of 4:59 P.M. Eastern Time on September 30, 2004 (the "Closing Day Effective Time"):

1. POCC will contribute all of its limited partner interest in the Operating Partnership to the MLP as an additional capital contribution.

NOW, THEREFORE, in consideration of their mutual undertakings and agreements hereunder, the parties to this Agreement undertake and agree as follows:

ARTICLE I

CONVERSIONS, CONTRIBUTIONS AND DISTRIBUTIONS OF VARIOUS ASSETS

SECTION 1.1 CONTRIBUTION OF THE SUBSIDIARY INTERESTS BY POCC TO THE OPERATING PARTNERSHIP. At the Contribution Effective Time, POCC hereby grants, contributes, transfers, assigns and conveys to the Operating Partnership, its successors and assigns, all right, title and interest in and to the Subsidiary Interests as a capital contribution and the Operating Partnership hereby accepts the Subsidiary Interests.

SECTION 1.3 CONTRIBUTION OF OPERATING PARTNERSHIP INTEREST BY POCC TO THE MLP. At the Closing Day Effective Time, POCC hereby grants, contributes, transfers, assigns and conveys to the MLP, its successors and assigns, all right, title and interest of POCC in and to the 99.9% limited partner interest in the Operating Partnership as an additional capital contribution to the MLP and the MLP hereby accepts such limited partner interest as an additional capital contribution to the MLP.

SECTION 1.4 CONVEYANCE BY THE GP TO THE MLP. At the Contribution Effective Time, the GP hereby conveys to the MLP $1,000.00 in exchange for all of the incentive distribution rights under the First Amended and Restated Agreement of Limited Partnership of the MLP.

ARTICLE II

RECORDATION OF EVIDENCE OF OWNERSHIP OF ASSETS

SECTION 2.1. In connection with the conveyances that are referred to in Article I to this Agreement, the parties to this Agreement acknowledge that certain jurisdictions in which the assets of the applicable parties to such conveyances are located may require that documents be recorded by such parties resulting from such conveyances in order to evidence title to the assets owned by such parties. All such documents shall evidence such new ownership and are not intended to modify, and shall not modify, any of the terms, covenants and conditions herein set forth.

ARTICLE III

ASSUMPTION OF CERTAIN LIABILITIES

SECTION 3.1 ASSUMPTION OF LIABILITIES AND OBLIGATIONS BY THE OPERATING PARTNERSHIP AND THE MLP. In connection with the contributions of the LPG Assets and the Subsidiary Interests to the Operating Partnership, the Operating Partnership hereby assumes and agrees to duly and timely pay, perform and discharge all obligations and liabilities associated with the Contributed Assets, that arise from and after the Closing Day Effective Time, to the full extent that either of the Subsidiaries or POCC would have been obligated to pay, perform and discharge such obligations and liabilities in the future, were it not for the execution and delivery of this Agreement; provided, however, that said assumption and agreement to duly and timely pay, perform and discharge such obligations and liabilities shall not increase the obligation of the Operating Partnership with respect to such obligations and liabilities beyond that of POCC as to the LPG Assets, or the Subsidiaries as to the assets acquired by the Operating Partnership in such interest conveyed by any of POCC or the Subsidiaries. For purposes of this Agreement, the term "Contributed Assets" shall mean, collectively, the LPG Assets and the Subsidiary Interests.

ARTICLE IV

TITLE MATTERS

SECTION 4.1 DISCLAIMER OF WARRANTIES; SUBROGATION.

(a) (i) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, THE MLP AND THE OPERATING PARTNERSHIP ACKNOWLEDGE AND AGREE THAT POCC AND THE SUBSIDIARIES HAVE NOT MADE, DO NOT MAKE, AND SPECIFICALLY NEGATE AND DISCLAIM, ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR WRITTEN, PAST OR PRESENT (ALL OF WHICH ARE EXPRESSLY DISCLAIMED BY POCC AND THE SUBSIDIARIES) REGARDING (1) THE TITLE, VALUE, NATURE, QUALITY OR CONDITION OF THE CONTRIBUTED ASSETS, (2) THE INCOME TO BE DERIVED FROM THE CONTRIBUTED ASSETS, (3) THE SUITABILITY OF THE CONTRIBUTED ASSETS FOR ANY AND ALL ACTIVITIES AND USES WHICH THE MLP MAY CONDUCT THEREON,
(4) THE COMPLIANCE OF OR BY THE CONTRIBUTED ASSETS, OR THEIR OPERATIONS WITH ANY LAWS (INCLUDING WITHOUT LIMITATION ANY ZONING, ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS), OR (5) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE CONTRIBUTED ASSETS.

(ii) THE MLP AND THE OPERATING PARTNERSHIP ACKNOWLEDGE AND AGREE THAT THEY HAVE HAD THE OPPORTUNITY TO INSPECT THE CONTRIBUTED ASSETS, AND THAT THEY ARE RELYING SOLELY ON THEIR OWN INVESTIGATION OF THE CONTRIBUTED ASSETS, AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY POCC AND THE SUBSIDIARIES, AND POCC AND THE SUBSIDIARIES ARE NOT LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE CONTRIBUTED ASSETS, FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY.

(iii) THE MLP AND THE OPERATING PARTNERSHIP ACKNOWLEDGE THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE CONTRIBUTION OF THE CONTRIBUTED ASSETS, AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS", "WHERE IS" BASIS WITH ALL FAULTS AND THE CONTRIBUTED ASSETS, ARE CONTRIBUTED OR DISTRIBUTED AND CONVEYED BY POCC AND THE SUBSIDIARIES SUBJECT TO THE FOREGOING. THIS PARAGRAPH SHALL SURVIVE SUCH CONTRIBUTION OR DISTRIBUTION AND CONVEYANCE OR THE TERMINATION OF THIS AGREEMENT.

(iv) THE PROVISIONS OF THIS SECTION 4.1 HAVE BEEN NEGOTIATED BY POCC, THE SUBSIDIARIES, THE MLP AND THE OPERATING PARTNERSHIP AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES OF POCC AND THE SUBSIDIARIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE CONTRIBUTED ASSETS, THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE.

(b) The contributions of the Contributed Assets, made under this Agreement are made with full rights of substitution and subrogation of the Operating Partnership, and all persons claiming by, through and under the Operating Partnership, to the extent assignable, in and to all covenants and warranties by the predecessors-in-title of POCC and the Subsidiaries, and with full subrogation of all rights accruing under applicable statutes of limitation and all rights of action of warranty

against all former owners of the Contributed Assets.

(c) POCC, the Subsidiaries, the MLP, the GP, the Operating Partnership and Operating GP agree that the disclaimers contained in this Section 4.1 are "conspicuous" disclaimers. Any covenants implied by statute or law by the use of the words "grant," "convey," "bargain," "sell," "assign," "transfer," "deliver," or "set over" or any of them or any other words used in this Agreement or any exhibits hereto are hereby expressly disclaimed, waived or negated.

ARTICLE V

FURTHER ASSURANCES

SECTION 5.1 FURTHER ASSURANCES. From time to time after the date hereof, and without any further consideration, POCC, the Subsidiaries, the GP, the MLP, the Operating GP and the Operating Partnership shall execute, acknowledge and deliver all such additional deeds, assignments, conveyances, instruments, notices, releases, acquittances and other documents, and will do all such other acts and things, all in accordance with applicable law, as may be necessary or appropriate more fully and effectively to vest in the Operating Partnership and the MLP and their successors and assigns beneficial and record title to the Contributed Assets hereby contributed and assigned to the Operating Partnership or intended so to be and to more fully and effectively carry out the purposes and intent of this Agreement.

SECTION 5.2 OTHER ASSURANCES. From time to time after the date hereof, and without any further consideration, each of the parties to this Agreement shall execute, acknowledge and deliver all such additional instruments, notices and other documents, and will do all such other acts and things, all in accordance with applicable law, as may be necessary or appropriate to more fully and effectively carry out the purposes and intent of this Agreement.

ARTICLE VI

MISCELLANEOUS

SECTION 6.1 HEADINGS; REFERENCES; INTERPRETATION. All article and section headings in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words "hereof," "herein" and "hereunder" and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole, including without limitation, all exhibits attached hereto, and not to any particular provision of this Agreement. All references herein to articles, sections, and exhibits shall, unless the context requires a different construction, be deemed to be references to the articles, sections and exhibits of this Agreement, respectively, and all such Exhibits attached hereto are hereby incorporated herein and made a part hereof for all purposes. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders, and the singular shall include the plural and vice versa. The use herein of the word "including" following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as "without limitation," "but not limited to," or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter.

SECTION 6.2 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the parties signatory hereto and their respective successors and assigns.

SECTION 6.3 NO THIRD PARTY RIGHTS. The provisions of this Agreement are intended to bind the parties signatory hereto as to each other and are not intended to and do not create rights in any other person or confer upon any other person any benefits, rights or remedies and no person is or is intended to be a third party beneficiary of any of the provisions of this Agreement.

SECTION 6.4 COUNTERPARTS. This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement binding on the parties hereto.

SECTION 6.5 GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas applicable to contracts made and to be performed wholly within such state without giving effect to conflict of law principles thereof, except to the extent that it is mandatory that the law of some other jurisdiction, shall apply.

SECTION 6.6 SEVERABILITY. If any of the provisions of this Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate the entire Agreement. Instead, this Agreement shall be construed as if it did not contain the particular provision or provisions held to be invalid, and an equitable adjustment shall be made and necessary provision added so as to give effect to the intention of the parties as expressed in this Agreement at the time of execution of this Agreement.

SECTION 6.7 AMENDMENT OR MODIFICATION. This Agreement may be amended or modified from time to time only by the written agreement of all the parties hereto.

SECTION 6.8 INTEGRATION. This Agreement, together with that certain Omnibus Agreement dated of even date herewith, to be entered into by and among POCC, certain of POCC's subsidiaries, the MLP, the GP, the Operating Partnership and the Operating GP (the "Omnibus Agreement"), supersedes all previous understandings or agreements between the parties, whether oral or written, with respect to its subject matter. This document is an integrated agreement which contains the entire understanding of the parties. No understanding, representation, promise or agreement, whether oral or written, other than those contained in the Omnibus Agreement, is intended to be or shall be included in or form part of this Agreement unless it is contained in a written amendment hereto executed by the parties hereto after the date of this Agreement.

(Signatures on following page)

IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date first above written.

PENN OCTANE CORPORATION

By:/s/ Richard Shore, Jr.
   ----------------------------------
     Richard  Shore,  Jr.,
     President

RIO VISTA GP LLC

By:/s/  Richard  Shore,  Jr.
   ----------------------------------
     Richard  Shore,  Jr.,
     President

RIO VISTA ENERGY PARTNERS L.P.

By: RIO VISTA GP LLC,
its General Partner

By:/s/  Richard  Shore,  Jr.
   ----------------------------------
     Richard  Shore,  Jr.,
     President

RIO VISTA OPERATING GP LLC

By:/s/  Richard  Shore,  Jr.
   ----------------------------------
     Richard  Shore,  Jr.,
     President

RIO VISTA OPERATING PARTNERSHIP L.P.

By: Rio Vista Operating GP LLC,
its General Partner

By: Rio Vista Energy Partners L.P.,
its sole member

By: Rio Vista GP LLC,
its General Partner

By:/s/ Richard Shore, Jr.
   -----------------------
     Richard  Shore,  Jr.,
     President

LIST OF SUBSIDIARIES

Penn-Octane de Mexico, S. de R.L. de C.V.

Termatsal, S. de R.L. de C.V.

Penn Octane International LLC

EXHIBIT B

CONVEYANCE AGREEMENT

Recording Requested by and When Recorded Return to: Fulbright & Jaworski L.L.P., 300 Convent St., Suite 2200, San Antonio, Texas, Attn: Christian G. Herff.

CONVEYANCE AGREEMENT

This Conveyance Agreement (this "Conveyance"), effective as of 4:58 P.M. Eastern Time on September 30, 2004 (the "Effective Date"), is from PENN OCTANE CORPORATION, a Delaware corporation (herein called "Grantor"), and in favor of RIO VISTA OPERATING PARTNERSHIP L.P., whose mailing address is 820 Gessner Road, Suite 1285, Houston, TX 77024 (herein called "Grantee").

ARTICLE I

GRANTING CLAUSE

1.1 GRANTING CLAUSES. Grantor hereby contributes, conveys, assigns, transfers, delivers, and sets over unto Grantee, its successors and assigns, all right, title, interests and estate of Grantor in and to the following described property, to-wit:

ALL OF THE ASSETS SET FORTH ON SCHEDULE A ATTACHED HERETO

The property described in this Section 1.1 shall be referred to herein collectively as the "Subject Property".

TO HAVE AND TO HOLD the Subject Property, subject to the terms and conditions hereof, unto Grantee, its successors and assigns, forever.

ARTICLE II

ENCUMBRANCES AND WARRANTY DISCLAIMERS

2.1 PERMITTED ENCUMBRANCES. This Conveyance is made and accepted expressly subject to (a) all liens, charges, encumbrances, contracts, agreements, instruments, obligations, defects, restrictions, security interests, options or preferential rights to purchase, adverse claims, reservations, exceptions, easements, rights-of-way, conditions, leases, other matters affecting the Subject Property or to which it is subject; and (b) to all matters that a current on the ground survey or visual inspection would reflect.

2.2 CONTRIBUTION AGREEMENT. This Conveyance is expressly made subject to the terms and conditions of that certain Contribution, Conveyance and Assumption Agreement dated as of September 16, 2004, among Grantor, Grantee and the other parties thereto (the "Contribution Agreement"). All capitalized terms used herein shall have the meanings given to such terms in the Contribution Agreement, unless otherwise defined herein. Nothing contained in this Conveyance shall in any way affect the provisions set forth in the Contribution Agreement nor shall this Conveyance expand or contract any rights or remedies under the Contribution Agreement. This Conveyance is intended only to effect the transfer of the Subject Property to Grantee as provided for in the Contribution Agreement and shall be governed entirely in accordance with the terms and conditions of the Contribution Agreement. In the event of a conflict between the terms of this Conveyance and the terms of the Contribution Agreement, the terms of the Contribution Agreement shall prevail.

2.3 DISCLAIMER OF WARRANTIES; SUBROGATION. Except as expressly provided herein or in the Contribution Agreement, this Conveyance is made, and is accepted by Grantee, without warranty of title, express, implied or statutory, and without recourse, but with full substitution and subrogation of Grantee, and all persons claiming by, through, and under Grantee, to the extent assignable, in and to all covenants and warranties by the predecessors in title of Grantor and with full subrogation of all rights accruing under applicable statutes of limitation or prescription and all rights of action of warranty against all former owners of the Subject Property. Except as expressly provided herein or in the Contribution Agreement, any covenants implied by statute or by the

use of the words "convey", "sell", "assign", "transfer", "deliver", or "set over" or any of them or any other words used in this Conveyance, are hereby expressly disclaimed, waived and negated.

ARTICLE III

MISCELLANEOUS

3.1 FURTHER ASSURANCES. Grantor and Grantee agree to take all such further actions and to execute, acknowledge and deliver all such further documents that are necessary or useful in carrying out the purposes of this Conveyance. So long as authorized by applicable law so to do, Grantor agrees to execute, acknowledge and deliver to Grantee all such other additional instruments, notices, affidavits, deeds, conveyances, assignments and other documents and to do all such other and further acts and things as may be necessary or useful to more fully and effectively grant, assign, convey, transfer and deliver to Grantee the Subject Property conveyed hereby or intended so to be conveyed.

3.2 SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARY. This Conveyance shall be binding upon, and shall inure to the benefit of, Grantor and Grantee and their successors and assigns. The provisions of this Conveyance are not intended to and do not create rights in any other person or entity or confer upon any other person or entity any benefits, rights or remedies and no person or entity is or is intended to be a third party beneficiary of any of the provisions of this Conveyance.

3.3 GOVERNING LAW. This Conveyance and the legal relations between the parties shall be governed by, and construed in accordance with, the laws of the State of Texas, excluding any conflict of law rule which would refer any issue to the laws of another jurisdiction, except when it is mandatory that the law of the jurisdiction wherein the Subject Property is located shall apply.

3.4 HEADINGS; REFERENCES; DEFINED TERMS. All Section headings in this Conveyance are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words "hereof", "herein" and "hereunder" and words of similar import, when used in this Conveyance, shall refer to this Conveyance as a whole, including, without limitation, all Schedules and Exhibits attached hereto, and not to any particular provision of this Conveyance.

3.5 COUNTERPARTS. This Conveyance may be executed in any number of counterparts, all of which together shall constitute one agreement binding on the parties hereto.

3.6 SEVERABILITY. If any of the provisions of this Conveyance are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate the entire agreement. Instead, this Conveyance shall be construed as if it did not contain the particular provision or provisions held to be invalid and an equitable adjustment shall be made and necessary provision added so as to give effect to the intention of the parties as expressed in this Conveyance at the time of execution of this Conveyance.

IN WITNESS WHEREOF, this Conveyance has been duly executed by the parties hereto on the dates of the acknowledgments set forth below, to be effective, however, as of the Effective Date.

GRANTOR:

PENN OCTANE CORPORATION

GRANTEE:

RIO VISTA OPERATING PARTNERSHIP L.P.

By: Rio Vista Operating GP LLC,
its General Partner

By: Rio Vista Energy Partners L.P.,
its sole member

By: Rio Vista GP LLC,
its General Partner

THE STATE OF TEXAS )

)

COUNTY OF ___________ )

This instrument was acknowledged before me on the ____ day of ___________, 2004, by ______________, ______________ of ________________________, on behalf of and in [HIS/HER] capacity as __________ of ________________________.

My Commission Expires:___________________

SCHEDULE A

CONVEYANCE AGREEMENT

Recording Requested by and When Recorded Return to: Fulbright & Jaworski L.L.P., 300 Convent St., Suite 2200, San Antonio, Texas, Attn: Christian G. Herff.

CONVEYANCE AGREEMENT

This Conveyance Agreement (this "Conveyance"), effective as of 4:58 P.M. Eastern Time on September 30, 2004 (the "Effective Date"), is from PENN OCTANE CORPORATION, a Delaware corporation (herein called "Grantor"), and in favor of RIO VISTA OPERATING PARTNERSHIP L.P., whose mailing address is 820 Gessner Road, Suite 1285, Houston, TX 77024 (herein called "Grantee").

ARTICLE I

GRANTING CLAUSE

1.1 GRANTING CLAUSES. Grantor hereby contributes, conveys, assigns, transfers, delivers, and sets over unto Grantee, its successors and assigns, all right, title, interests and estate of Grantor in and to the following described property, to-wit:

ALL OF THE ASSETS SET FORTH ON SCHEDULE A ATTACHED HERETO

The property described in this Section 1.1 shall be referred to herein collectively as the "Subject Property".

TO HAVE AND TO HOLD the Subject Property, subject to the terms and conditions hereof, unto Grantee, its successors and assigns, forever.

ARTICLE II

ENCUMBRANCES AND WARRANTY DISCLAIMERS

2.1 PERMITTED ENCUMBRANCES. This Conveyance is made and accepted expressly subject to (a) all liens, charges, encumbrances, contracts, agreements, instruments, obligations, defects, restrictions, security interests, options or preferential rights to purchase, adverse claims, reservations, exceptions, easements, rights-of-way, conditions, leases, other matters affecting the Subject Property or to which it is subject; and (b) to all matters that a current on the ground survey or visual inspection would reflect.

2.2 CONTRIBUTION AGREEMENT. This Conveyance is expressly made subject to the terms and conditions of that certain Contribution, Conveyance and Assumption Agreement dated as of September 16, 2004, among Grantor, Grantee and the other parties thereto (the "Contribution Agreement"). All capitalized terms used herein shall have the meanings given to such terms in the Contribution Agreement, unless otherwise defined herein. Nothing contained in this Conveyance shall in any way affect the provisions set forth in the Contribution Agreement nor shall this Conveyance expand or contract any rights or remedies under the Contribution Agreement. This Conveyance is intended only to effect the transfer of the Subject Property to Grantee as provided for in the Contribution Agreement and shall be governed entirely in accordance with the terms and conditions of the Contribution Agreement. In the event of a conflict between the terms of this Conveyance and the terms of the Contribution Agreement, the terms of the Contribution Agreement shall prevail.

2.3 DISCLAIMER OF WARRANTIES; SUBROGATION. Except as expressly provided herein or in the Contribution Agreement, this Conveyance is made, and is accepted by Grantee, without warranty of title, express, implied or statutory, and without recourse, but with full substitution and subrogation of Grantee, and all persons claiming by, through, and under Grantee, to the extent assignable, in and to all covenants and warranties by the predecessors in title of Grantor and with full subrogation of all rights accruing under applicable statutes of limitation or prescription and all rights of action of warranty against all former owners of the Subject Property. Except as expressly provided herein or in the Contribution Agreement, any covenants implied by statute or by the

use of the words "convey", "sell", "assign", "transfer", "deliver", or "set over" or any of them or any other words used in this Conveyance, are hereby expressly disclaimed, waived and negated.

ARTICLE III

MISCELLANEOUS

3.1 FURTHER ASSURANCES. Grantor and Grantee agree to take all such further actions and to execute, acknowledge and deliver all such further documents that are necessary or useful in carrying out the purposes of this Conveyance. So long as authorized by applicable law so to do, Grantor agrees to execute, acknowledge and deliver to Grantee all such other additional instruments, notices, affidavits, deeds, conveyances, assignments and other documents and to do all such other and further acts and things as may be necessary or useful to more fully and effectively grant, assign, convey, transfer and deliver to Grantee the Subject Property conveyed hereby or intended so to be conveyed.

3.2 SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARY. This Conveyance shall be binding upon, and shall inure to the benefit of, Grantor and Grantee and their successors and assigns. The provisions of this Conveyance are not intended to and do not create rights in any other person or entity or confer upon any other person or entity any benefits, rights or remedies and no person or entity is or is intended to be a third party beneficiary of any of the provisions of this Conveyance.

3.3 GOVERNING LAW. This Conveyance and the legal relations between the parties shall be governed by, and construed in accordance with, the laws of the State of Texas, excluding any conflict of law rule which would refer any issue to the laws of another jurisdiction, except when it is mandatory that the law of the jurisdiction wherein the Subject Property is located shall apply.

3.4 HEADINGS; REFERENCES; DEFINED TERMS. All Section headings in this Conveyance are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words "hereof", "herein" and "hereunder" and words of similar import, when used in this Conveyance, shall refer to this Conveyance as a whole, including, without limitation, all Schedules and Exhibits attached hereto, and not to any particular provision of this Conveyance.

3.5 COUNTERPARTS. This Conveyance may be executed in any number of counterparts, all of which together shall constitute one agreement binding on the parties hereto.

3.6 SEVERABILITY. If any of the provisions of this Conveyance are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate the entire agreement. Instead, this Conveyance shall be construed as if it did not contain the particular provision or provisions held to be invalid and an equitable adjustment shall be made and necessary provision added so as to give effect to the intention of the parties as expressed in this Conveyance at the time of execution of this Conveyance.

IN WITNESS WHEREOF, this Conveyance has been duly executed by the parties hereto on the dates of the acknowledgments set forth below, to be effective, however, as of the Effective Date.

GRANTOR:

PENN OCTANE CORPORATION

By:/s/ Richard Shore, Jr.
   -----------------------------------
    Richard Shore, Jr.,
    President

GRANTEE:

RIO VISTA OPERATING PARTNERSHIP L.P.

By: Rio Vista Operating GP LLC,
its General Partner

By: Rio Vista Energy Partners L.P.,
its sole member

By: Rio Vista GP LLC,
its General Partner

By:/s/ Richard Shore, Jr.
   -------------------------
      Richard Shore, Jr.,
      President

THE STATE OF CALIFORNIA )

)

COUNTY OF SAN FRANCISCO )

This instrument was acknowledged before me on the 15th day of September, 2004, by Richard Shore, Jr., President of Penn Octane Corporation, on behalf of and in his capacity as President of Penn Octane Corporation.

/s/  Barbara  Booth
-------------------------------------
NOTARY  PUBLIC

THE STATE OF CALIFORNIA )

)

COUNTY OF SAN FRANCISCO )

This instrument was acknowledged before me on the 15th day of September, 2004, by Richard Shore, Jr., President of Rio Vista GP LLC, on behalf of and in his capacity as President of Rio Vista GP LLC.

/s/ Barbara Booth
-------------------------------------
NOTARY  PUBLIC

SCHEDULE A

DISTRIBUTION AGREEMENT

BY AND BETWEEN

PENN OCTANE CORPORATION

AND

RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES

SEPTEMBER 16, 2004

DISTRIBUTION AGREEMENT

THIS DISTRIBUTION AGREEMENT (this "Agreement") is dated September 16, 2004, by and among PENN OCTANE CORPORATION., a Delaware corporation ("POC"), RIO VISTA ENERGY PARTNERS L.P., a Delaware limited partnership ("RVP"), and the Tax Subsidiaries (as defined in Article 1) of RVP.

WITNESSETH:

WHEREAS, POC is the sole limited partner of RVP and owner of common units representing a 98% limited partner interest in RVP (the "RVP Common Units"); and

WHEREAS, POC desires to distribute to its stockholders all of the RVP Common Units;

NOW, THEREFORE, in consideration of the premises and the mutual terms, covenants and conditions herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

ARTICLE 1

CERTAIN DEFINITIONS

As used in this Agreement, the following terms have the following respective meanings:

1.1 "Affiliate" shall mean, with respect to POC or RVP, any Person, that directly or indirectly, is in control of, is controlled by, controls or is under common control of POC or RVP, as the case may be. For purposes of this definition, control shall include the ownership of 50% or more of the legal or beneficial interest in any Person or the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. A Person who is an Affiliate shall only be considered an Affiliate for so long as that Person meets the definition of an Affiliate. An officer, director, general partner, managing member or trustee of a Person or Affiliate of such Person shall not be considered to be an Affiliate unless such Person is under the direct or indirect control or common control of POC or RVP, as the case may be. For purposes of clarity, POC and RVP shall not be considered to be an Affiliate of the other, nor shall any other company in which a director or officer of POC or RVP is also a director, officer or stockholder be considered an Affiliate of POC or RVP unless POC or RVP, as the case may be, itself controls such company.

1.2 "Agreement" shall have the meaning specified in the preamble.

1.3 "Business Day" shall mean any day other than Saturday, Sunday or a day on which commercial banks located in Houston, Texas are required or authorized by law to close.

1.4 "Code" shall mean the Internal Revenue Code of 1986, as amended.

1.5 "Common Unit" shall mean the common units of RVP as defined in the RVP First Amended and Restated Agreement of Limited Partnership.

1.6 "Distribution" shall mean the distribution by POC to its stockholders of the RVP Common Units.

1.7 "Distribution Agent" shall mean Computershare Investor Services.

1.8 "Distribution Date" shall mean the time and date as of which the Distribution is effective.

1.9 "Liability" shall mean any and all claims, demands, liabilities, responsibilities, disputes, causes of action, losses, damages, assessments, costs and expenses (including interest, awards, judgments, penalties, settlements, fines, costs of remediation, diminutions in value, costs and expenses incurred in connection with investigating and defending any claims or causes of action (including, without limitation, attorneys' fees and expenses and all fees and expenses of consultants and other professionals)) and obligations of every nature whatsoever, liquidated or unliquidated, known or unknown, matured or unmatured, or fixed or contingent.

1.10 "Nasdaq" shall mean The Nasdaq Stock Market, Inc.

1.11 "POC" shall mean Penn Octane Corporation, a Delaware corporation.

1.12 "POC Common Stock" shall mean POC's common stock, $.01 par value.

1.13 "Person" shall mean an individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature.

1.14 "RVP" for purposes of the assumption and indemnification provisions of this Agreement, shall include Rio Vista Energy Partners L.P. and any and all predecessors or successors thereto, whether by merger, purchase or other acquisition of substantially all of the assets or otherwise, and any and all predecessors or successors to such entities.

1.15 "RVP Assets" shall mean, collectively, all the property, assets and rights, tangible and intangible, owned or operated by the RVP Companies on, before or after the Distribution Date.

1.16 "RVP Common Units" shall have the meaning specified in the introduction to this Agreement.

1.17 "RVP Company" shall mean any Subsidiary of RVP.

1.18 "RVP First Amended and Restated Agreement of Limited Partnership" shall mean that certain limited partnership agreement of RVP dated September 16, 2004.

1.19 "RVP Properties" shall mean the properties currently or previously owned or operated by any RVP Company.

1.20 "Record Date" shall have the meaning specified in Section 2.1 hereof.

1.21 "SEC" shall mean the United States Securities and Exchange Commission.

1.22 "Subsidiary" shall mean, with respect to any Person, (i) a corporation a majority of whose Voting Stock is at the time, directly or indirectly, owned by such Person, by one or more wholly owned subsidiaries of such Person or by such Person and one or more wholly owned subsidiaries of such Person, (ii) a partnership in which such Person or a wholly owned subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if such Person or its wholly owned subsidiary is entitled to receive more than fifty percent of the assets of such partnership upon its dissolution or (iii) any other Person (other than a corporation or partnership) in which such Person, a wholly owned subsidiary of such Person or such Person and one or more wholly owned subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has (x) at least a majority ownership interest or
(y) the power to elect or direct the election of a majority of the directors or other governing body of such Person.

1.23 "Tax Subsidiary" shall mean, with respect to POC or RVP as the context may require, (i) any corporation or association taxable as a corporation that is connected in an unbroken chain of stock ownership satisfying the requirements of
Section 1504(a) of the Code beginning with POC or RVP as the case may be (provided that, for this purpose, after the Distribution Date, RVP shall be regarded as a corporation that is the common parent of the RVP Group); (ii) any entity not a corporation that is a "disregarded" entity for federal income tax purposes pursuant to Treasury Regulations Sections 301.7701-3 and that is owned by POC, RVP or any Tax Subsidiary of either (determined after application of clause (i) above) and (iii) any "disregarded" entity owned by POC, RVP or any Tax Subsidiary of either (determined after application of clauses (i) and (ii) above).

1.24 "Transfer Agent" shall mean Computershare Investor Services.

1.25 "Voting Stock" shall mean, with respect to any Person, securities of any class or classes of capital stock in such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock has voting power by reason of any contingency) to vote in the election of the members of the board of directors or other governing body of such Person.

ARTICLE 2

MECHANICS OF DISTRIBUTION

ARTICLE 3

CONDITIONS TO OBLIGATIONS OF POC

The obligations of POC to consummate the Distribution hereunder shall be subject to the fulfillment of each of the following conditions:

(a) The Board of Directors of POC and the Independent Committee of the Board of Directors of POC shall be satisfied that, after giving effect to the Distribution and the transactions contemplated under the Contribution, Conveyance and Assumption Agreement dated September 16, 2004 (the "Contribution Agreement") by and among POC, RVP, the GP (as defined therein), the Operating GP (as defined therein) and the Operating Partnership (as defined therein), (i) POC will not be insolvent and will not have unreasonably small capital with which to engage in its businesses and (ii) the POC surplus (as such term is defined by Delaware General Corporation Law) will be sufficient to permit, without violation of Delaware law, the Distribution.

(b) POC and RVP (or its Subsidiary) shall have executed the Purchase Contract for the sale of liquified petroleum gas by POC to RVP (or its Subsidiary).

(c) POC and RVP shall have executed the Omnibus Agreement, which is to govern the business relationship between POC and RVP following the Distribution.

(d) The transactions contemplated under the Contribution Agreement shall have been effected.

(e) The Common Units shall have been approved for trading on the National Market System of the Nasdaq Stock Market or on such other public market acceptable to the Board of Directors of POC, and the Nasdaq Stock Market or such other public market shall not have (i) withdrawn its certification filed with the SEC that the Common Units have been approved for listing, (ii) suspended trading in either the Common Units or the POC Common Stock or (iii) filed with the SEC a Form 25 to strike either the Common Units or the POC Common Stock from listing and registration thereof.

(f) RVP's Registration Statement on Form 10 shall have become effective pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, and the SEC shall not have commenced any action to prohibit or restrict the Distribution in any way.

(g) All material governmental and third party approvals and consents necessary to consummate the transactions contemplated under this Agreement and the Contribution Agreement shall have been obtained.

(h) No order, injunction or decree issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the Distribution or any of the other transactions contemplated by this Agreement and the other agreements relating to the Distribution may be in effect.

(i) The Board of Directors of POC and the Independent Committee of the Board of Directors of POC shall have received a copy of an independent appraisal of the assets to be transferred pursuant to the Contribution Agreement, and each of the Board of Directors of POC and the Independent Committee of the Board of Directors of POC have determined in their sole discretion that, based on such independent appraisal, the estimated tax liabilities to be incurred by POC as a result of the Distribution are acceptable.

(j) The Board of Directors of POC and the Independent Committee of the Board of Directors of POC shall not have determined, in their sole discretion, to abandon, defer or modify the Distribution or the terms thereof.

ARTICLE 4

MISCELLANEOUS

out below (or at such other address as it may have provided notification for the purposes hereof to the other party hereto in accordance with this Section).

If to RVP or to any of the  Rio Vista GP LLC
Tax Subsidiaries of RVP:    820 Gessner Road, Suite 1285
                            Houston, Texas  77024
                            Fax number:  (713) _________
                            Attention:   President

                            With a copy to:

                            Fulbright & Jaworski L.L.P.
                            300 Convent St., Suite 2200
                            San Antonio, Texas 78205
                            Fax number:  (210) 270-7205
                            Attention:  Phillip M. Renfro

If to POC:                  Penn Octane Corporation
                            77-530 Enfield Lane, Building D
                            Palm Desert, CA 92211
                            Fax number:  (760) 772-8588
                            Attention:   President

                            With a copy to:

                            Fulbright & Jaworski L.L.P.
                            300 Convent St., Suite 2200
                            San Antonio, Texas 78205
                            Fax number:  (210) 270-7205
                            Attention:  Phillip M. Renfro

obligations hereunder will be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other party of the same or any other obligations of such other party hereunder. Failure on the part of a party to complain of any act or failure to act of the other party or to declare the other party in default, irrespective of how long such failure continues, will not constitute a waiver by such party of its rights hereunder. The giving of consent by a party in any one instance will not limit or waive the necessity to obtain such party's consent in any future instance.

(a) This Agreement will be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. None of the parties to this Agreement may assign its rights under this Agreement without the prior written consent of all of the other parties; provided, however, POC may assign any of its rights and obligations under this Agreement to any Subsidiary of POC, without the consent of any other party to this Agreement.

(b) Nothing in this Agreement, express or implied, is intended to or shall confer upon any person other than RVP, POC, the RVP Indemnified Parties and the Tax Subsidiaries of RVP any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.

[SIGNATURES ON FOLLOWING PAGE]

IN WITNESS WHEREOF, the parties hereto have executed this Distribution Agreement as of the date first set forth in the introduction to this Agreement.

PENN OCTANE CORPORATION

By: /s/ Richard Shore, Jr.
   -----------------------------------
        Richard  Shore,  Jr.,
        President

RIO VISTA ENERGY PARTNERS L.P.

By: RIO VISTA GP LLC,
its General Partner

By:/s/ Richard Shore, Jr.
   -------------------------------
       Richard Shore, Jr.,
       President

OMNIBUS AGREEMENT

BETWEEN

PENN OCTANE CORPORATION,

RIO VISTA GP LLC,

RIO VISTA ENERGY PARTNERS L.P.

AND

RIO VISTA OPERATING PARTNERSHIP L.P.

OMNIBUS AGREEMENT

THIS OMNIBUS AGREEMENT is entered into as of September 16, 2004 by and among Penn Octane Corporation, a Delaware corporation ("POCC"), Rio Vista GP LLC, a Delaware limited liability company (the "General Partner"), Rio Vista Energy Partners L.P., a Delaware limited partnership (the "Partnership"), and Rio Vista Operating Partnership L.P. (the "Operating Partnership"). The above-named entities are sometimes referred to in this Agreement each as a "Party" and collectively as the "Parties."

RECITALS:

WHEREAS, POCC and its Affiliates (as defined herein) formed the Partnership, the General Partner and the Operating Partnership for the purpose of conducting of the Business (as defined below);

WHEREAS, certain assets and services used by POCC or its Affiliates in the conduct of the Business prior to the formation of the Partnership were not transferred to the Partnership;

WHEREAS, the Parties desire to ensure the continued effective operation of the Business, and the Parties recognize that the continued effective operation of the Business requires that POCC provide certain management and employee services to the Business as set forth in this Agreement; and

WHEREAS, the Parties desire to evidence other agreements and relationships, as more fully set out in this Agreement, with respect to the transfer of the Business to the Partnership and the Operating Partnership as well as the operation of the Business by the Partnership and the Operating Partnership.

NOW THEREFORE, in consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

DEFINITIONS. (a) As used in this Agreement, the following terms shall have the respective meanings set forth below:

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

"Agreement" means this Omnibus Agreement, as it may be amended, modified, or supplemented from time to time in accordance with Section 4.7 hereof.

"Assets" means the "Contributed Assets" as such term is defined in the Contribution Agreement.

"Business" means (i) providing transportation, terminalling and distribution services for hydrocarbon products and by-products, and (ii) marketing and selling hydrocarbon products and by-products.

"Closing Date" means the date of the Distribution.

"Conflicts Committee" is defined in the Partnership Agreement.

"control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

"Contribution Agreement" means the Contribution, Conveyance and Assumption Agreement, dated September 16, 2004, by and among various POCC Entities, the Partnership, the Operating Partnership, the General Partner and Rio Vista Operating GP LLC, a Delaware limited liability company.

"Covered Environmental Losses" is defined in Section 2.1(a).

"Distribution" means the distribution by POCC of all the outstanding common units of the Partnership representing limited partner interests to the stockholders of POCC.

"Environmental Laws" means all federal, state, and local laws, statutes, rules, regulations, orders, and ordinances, now or hereafter in effect, relating to protection of human health and the environment including, without limitation, the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, and other environmental conservation and protection laws, each as amended from time to time.

"General Partner" is defined in the introduction to this Agreement.

"Hazardous Substance" means any substance that is designated, defined, or classified as a hazardous waste, hazardous material, pollutant, contaminant, or toxic or hazardous substance, or that is otherwise regulated under any Environmental Law, including, without limitation, any hazardous substance as defined under the Comprehensive Environmental Response, Compensation, and Liability Act.

"Indemnified Party" means the Partnership Entities or the POCC Entities, as the case may be, in their capacity as the parties entitled to indemnification in accordance with Article II.

"Indemnifying Party" means either the Partnership Entities or the POCC Entities, as the case may be, in its capacity as the parties from whom indemnification may be sought in accordance with Article II.

"Losses" means any losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs, and expenses (including, without limitation, court costs and reasonable attorney's and expert's fees) of any and every kind or character.

"POCC" is defined in the introduction to this Agreement.

"POCC Entities" means POCC and each of its Subsidiaries (other than the General Partner, the Partnership and any Subsidiary of the Partnership).

"Partnership" is defined in the introduction to this Agreement.

"Partnership Agreement" means the First Amended and Restated Agreement of Limited Partnership of Rio Vista Energy Partners L.P. No amendment or modification to the Partnership Agreement subsequent to the Closing Date shall be given effect for the purposes of this Agreement unless consented to by each of the Parties to this Agreement.

"Partnership Entities" means the Partnership, the General Partner and each Subsidiary of the Partnership.

"Party" and "Parties" is defined in the introduction to this Agreement.

"Pass-Through Environmental Losses" is defined in Section 2.1(b).

"Person" means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.

"Retained Assets" means, collectively, any assets and investments owned by any of the POCC Group that were not conveyed, contributed or otherwise transferred to any of the Partnership Entities prior to or on the Closing Date.

"Services" is defined in Section 3.1.

"Subsidiary" means, with respect to any Person, (a) a corporation of which more than 50% of the voting power is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the

partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has
(i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person.

ARTICLE II

INDEMNIFICATION

2.1 ENVIRONMENTAL INDEMNIFICATION.

(a) Subject to the limitations contained in this Section 2.1(a), POCC shall indemnify, defend and hold harmless each of the Partnership Entities from and against environmental and toxic tort Losses suffered, incurred or paid by any of the Partnership Entities by reason of or arising out of:

(i) any violation or correction of violation of Environmental Laws associated with the Assets or the Retained Assets, or

(ii) any event or condition associated with the ownership or operation of the Assets or the Retained Assets (including, without limitation, the presence of Hazardous Substances on, under, about or migrating to or from the Assets or the Retained Assets or the disposal or release of Hazardous Substances generated by operation of the Assets or the Retained Assets at non-Asset locations) including, without limitation, (A) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action required or necessary under Environmental Laws, (B) the cost or expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws, and (C) the cost and expense for any environmental or toxic tort pre-trial, trial, or appellate legal or litigation support work,

but only to the extent that such violation complained of under Section 2.1(a)(i) or such events or conditions included under Section 2.1(a)(ii) occurred before the Closing Date (collectively, "Covered Environmental Losses").

(b) POCC shall indemnify, defend and hold harmless any of the Partnership Entities from and against any Losses suffered or incurred by any of the Partnership Entities to the extent that POCC is entitled to and receives indemnification, is defended or held harmless against any such Losses from any third-party pursuant to any agreement between any third-party and POCC (collectively, "Pass-Through Environmental Losses"). In furtherance of such agreement, POCC agrees to use its best commercially reasonable efforts to pursue, for the benefit of the Partnership Entities, any such indemnification with respect to which it might be entitled if

requested by the Partnership; provided that, the Partnership shall reimburse POCC for all costs and expenses incurred in connection with pursuing such indemnity on behalf of the Partnership.

(c) The Partnership shall indemnify, defend and hold harmless POCC from and against Losses suffered or incurred by any of the POCC Entities by reason of or arising out of:

(i) any violation or correction of violation of Environmental Laws associated with the Assets, or

(ii) any event or condition associated with ownership or operation of the Assets (including, but not limited to, the presence of Hazardous Substances on, under, about or migrating to or from the Assets or the disposal or release of Hazardous Substances generated by operation of the Assets at non-Asset locations) including, without limitation, (A) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action required or necessary under Environmental Laws, (B) the cost or expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws, and (C) the cost and expense for any environmental or toxic tort pre-trial, trial, or appellate legal or litigation support work,

but only to the extent such violation complained of under Section 2.1(c)(i) or such events or conditions included under Section 2.1(c)(ii) occurred after the Closing Date.

2.2 ADDITIONAL INDEMNIFICATION

(a) In addition to and not in limitation of the indemnification provided under Sections 2.1(a) and 2.1(b), POCC shall indemnify, defend, and hold harmless the Partnership Entities from and against any Losses suffered or incurred by the Partnership Entities by reason of or arising out of

(i) any events and conditions associated with the ownership or operation of the Retained Assets, whether occurring before or after the Closing Date,

(ii) the failure of the Partnership Entities to be the owner of such valid leasehold interests or fee ownership interests in and to the Assets as are necessary to enable the Partnership Entities to continue to own and operate the Assets and the Business in the same manner that the Assets and the Business were owned and operated by the POCC Entities during the one-year period immediately prior to the Closing Date to the extent that POCC is notified of any of the foregoing within three years after the Closing Date,

(iii) the failure of the Partnership Entities to have any consent or permit necessary to allow the Partnership Entities to own or operate the Assets and the Business in the same manner that the Assets and the Business were owned and operated by the POCC Entities

during the one-year period immediately prior to the Closing Date to the extent that POCC is notified of any of the foregoing within three years after the Closing Date,

(iv) all legal actions against POCC, including without limitation, those set forth on Schedule 2.2 hereto, and

(v) all federal, state and local income tax liabilities attributable to the operation of the Assets prior to the Closing Date.

(b) In addition to and not in limitation of the indemnification provided under Sections 2.1(c), or under the Partnership Agreement, the Partnership shall indemnify, defend, and hold harmless the POCC Entities from and against any Losses suffered or incurred by any of the POCC Entities by reason of or arising out of events and conditions associated with:

(i) the operation of the Assets and the Business,

(ii) the performance of the Services by POCC and/or its employees pursuant to this Agreement (provided that POCC is not in breach of this Agreement), in each case occurring on or after the Closing Date (other than Covered Environmental Losses which are provided for under Section 2.1), unless in any such case such indemnification would not be permitted under Section 7.7 of the Partnership Agreement, and

(c) In addition to and not in limitation of the indemnification provided under Sections 2.1(c) and 2.2(b), or under the Partnership Agreement, the Partnership shall indemnify, for a period of three years from the fiscal year end that includes the Closing Date, the POCC Entities for federal income tax liabilities, including penalties and interest, resulting from the Distribution and restructuring transactions connected with it to the extent such federal income tax liabilities exceed $2.5 million in the aggregate.

2.3 INDEMNIFICATION PROCEDURES.

(a) The Indemnified Party agrees that within a reasonable period of time after it becomes aware of facts giving rise to a claim for indemnification under this Article II, it will provide notice thereof in writing to the Indemnifying Party, specifying the nature of and specific basis for such claim.

(b) The Indemnifying Party shall have the right to control all aspects of the defense of (and any counterclaims with respect to) any claims brought against the Indemnified Party that are covered by the indemnification under this Article II, including, without limitation, the selection of counsel, determination of whether to appeal any decision of any court and the settling of any such matter or any issues relating thereto; provided however, that no such settlement shall be entered into without the consent of the Indemnified Party unless it includes a full release of the Indemnified Party from such matter or issues, as the case may be.

(c) The Indemnified Party agrees to cooperate fully with the Indemnifying Party, with respect to all aspects of the defense of any claims covered by the indemnification under this Article II, including, without limitation, the prompt furnishing to the Indemnifying Party of any correspondence or other notice relating thereto that the Indemnified Party may receive, permitting the name of the Indemnified Party to be utilized in connection with such defense, the making available to the Indemnifying Party of any files, records or other information of the Indemnified Party that the Indemnifying Party considers relevant to such defense and the making available to the Indemnifying Party of any employees of the Indemnified Party; provided however, that in connection therewith the Indemnifying Party agrees to use reasonable efforts to minimize the impact thereof on the operations of the Indemnified Party. In no event shall the obligation of the Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately preceding sentence be construed as imposing upon the Indemnified Party an obligation to hire and pay for counsel in connection with the defense of any claims covered by the indemnification set forth in this Article II; provided however, that the Indemnified Party may, at its own option, cost and expense, hire and pay for counsel in connection with any such defense. The Indemnifying Party agrees to keep any such counsel hired by the Indemnified Party reasonably informed as to the status of any such defense, but the Indemnifying Party shall have the right to retain sole control over such defense.

(d) In determining the amount of any Losses for which the Indemnified Party is entitled to indemnification under this Agreement, the gross amount of the indemnification will be reduced by (i) any insurance proceeds realized or to be realized by the Indemnified Party, and such correlative insurance benefit shall be net of any incremental insurance premium that becomes due and payable by the Indemnified Party as a result of such claim and (ii) all amounts recovered or recoverable by the Indemnified Party under contractual indemnities from third parties.

ARTICLE III

SERVICES AND RELATED PARTY TRANSACTIONS

3.1 SERVICES. During the term of this Agreement, POCC agrees to provide (either directly or through its Subsidiaries) on behalf of the General Partner in accordance with Article VII of the Partnership Agreement, the employees or independent contractors, corporate staff, support services and administrative services necessary to operate the Business (the "Services"). POCC shall perform the Services in a manner that is substantially identical in nature and quality to the services performed by POCC for the Business during the one-year period immediately prior to the Closing Date. The General Partner and the Partnership agree that POCC shall be reimbursed for all costs and expenses incurred in connection with the performance of the Services as if it were the General Partner in accordance with Section 7.4(b) and 7.6(c) of the Partnership Agreement.

3.2 DESIGNATION OF AGENTS. In connection with the provision of the Services by the employees of POCC, the General Partner, on behalf of the Partnership, hereby appoints and empowers POCC and each current and future employee of POCC who is fulfilling a job

function for the Partnership in connection with the conduct by the Partnership of its business in the ordinary course, as agent of the Partnership with full power and authority to execute and deliver on behalf of the Partnership, any documents, contracts, governmental filings or other instruments commensurate with, but limited to, such job function. The power and authority granted pursuant to this Section 3.2 to a person described in the preceding sentence will be valid only for so long as such person is employed by POCC.

3.3 RIGHT TO OPERATE. POCC shall have the right, but not the obligation, to act as operator of the Partnership's facilities to the same extent it acted as operator of such facilities prior to the effective date of this Agreement for so long as POCC has responsibilities associated with such facilities.

3.4 RELATED PARTY TRANSACTIONS. Each of POCC, the General Partner, the Partnership and the Operating Partnership agree that the execution or material amendment of any "significant agreement" (as such term is defined below) must be approved by the Conflicts Committee. The term "significant agreement" means any agreement between the General Partner, the Partnership or the Operating Partnership, on the one hand, and any POCC Entity, on the other hand, that requires aggregate annual payments to or from any POCC Entity or POCC Entities in excess of $100,000.

3.5 BREACH BY PENN OCTANE. In the event POCC fails to perform the Services as provided in Section 3.1 and does not cure such failure within ten (10) days of receiving written notice of same from the General Partner, the Partnership, in addition to any other remedies at law or in equity, may terminate this Agreement and engage a third party for the provision of the Services. POCC shall cooperate in good faith with the Partnership and the General Partner in transitioning the Services to any such third party.

ARTICLE IV

MISCELLANEOUS

4.1 INSURANCE MATTERS. POCC hereby agrees to cause each of the Partnership Entities to be named as additional insureds in POCC's current insurance program, which is described on Schedule 4.1 attached hereto. Each of the Partnership Entities shall pay for its allocated cost of that insurance coverage in an amount equal to POCC's cost of insuring the assets and operations of Partnership Entity and generally in accordance with the allocations and methodology described in Schedule 4.1.

4.2 CHOICE OF LAW; SUBMISSION TO JURISDICTION. This Agreement shall be subject to and governed by the laws of the State of Texas, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Each Party hereby submits to the jurisdiction of the state and federal courts in Harris County, Texas.

4.3 NOTICE. All notices or requests or consents provided for by, or permitted to be given pursuant to, this Agreement must be in writing and must be given by depositing same in the United States mail, addressed to the Person to be notified, postpaid, and registered or certified with return receipt requested or by delivering such notice in person or by telecopier or telegram to such Person. Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by telegram or telecopier shall be effective upon actual receipt if received during the recipient's normal business hours, or at the beginning of the recipient's next business day after receipt if not received during the recipient's normal business hours. All notices to be sent to a Party pursuant to this Agreement shall be sent to or made at the address set forth below such Party's signature to this Agreement, or at such other address as such Party may stipulate to the other parties in the manner provided in this Section 4.3.

4.4 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the Parties relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written, relating to the matters contained herein.

4.5 TERMINATION. Unless earlier terminated as provided in this Section 4.5, the term of this Agreement shall be five (5) years from the date hereof and shall be automatically renewed for subsequent five (5) year terms, unless and until either party provides written notice to the other party at least sixty
(60) days prior to the expiration of the initial five (5) year term or any renewal term that such party does not wish to renew this Agreement on the expiration of the then current term. This Agreement, other than the provisions of Article II, shall terminate on the earlier to occur of (i) ninety (90) days after either party notifies the other party in writing that the Partnership is no longer an Affiliate of POCC and (ii) this Agreement is terminated by the Partnership under Section 3.5. Termination of this Agreement shall not terminate any Indemnifying Party's continuing obligation of indemnification pursuant to Article II of this Agreement which obligations shall survive as provided in Article II.

4.6 EFFECT OF WAIVER OR CONSENT. No waiver or consent, express or implied, by any Party to or of any breach or default by any Person in the performance by such Person of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such Person of the same or any other obligations of such Person hereunder. Failure on the part of a Party to complain of any act of any Person or to declare any Person in default, irrespective of how long such failure continues, shall not constitute a waiver by such Party of its rights hereunder until the applicable statute of limitations period has run.

4.7 AMENDMENT OR MODIFICATION. This Agreement may be amended or modified from time to time only by the written agreement of all the Parties hereto; provided however, that the Partnership may not, without the prior approval of the Conflicts Committee, agree to any amendment or modification of this Agreement. Each such instrument shall be reduced to writing and shall be designated on its face an "Amendment" or an "Addendum" to this Agreement.

4.8 ASSIGNMENT. No Party shall have the right to assign its rights or obligations under this Agreement without the consent of the other Parties hereto.

4.9 COUNTERPARTS. This Agreement may be executed in any number of counterparts with the same effect as if all signatory parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument.

4.10 SEVERABILITY. If any provision of this Agreement or the application thereof to any Person or circumstance shall be held invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

4.11 FURTHER ASSURANCES. In connection with this Agreement and all transactions contemplated by this Agreement, each signatory party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.

4.12 LAWS AND REGULATIONS. Notwithstanding any provision of this Agreement to the contrary, no Party to this Agreement shall be required to take any act, or fail to take any act, under this Agreement if the effect thereof would be to cause such Party to be in violation of any applicable law, statute, rule or regulation.

4.13 NEGOTIATION OF RIGHTS OF LIMITED PARTNERS, ASSIGNEES, AND THIRD PARTIES. The provisions of this Agreement are enforceable solely by the Parties to this Agreement, and no limited partner, member, assignee or other Person of the Partnership or General Partner shall have the right, separate and apart from the Partnership or the General Partner, to enforce any provision of this Agreement or to compel any Party to this Agreement to comply with the terms of this Agreement.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

IN WITNESS WHEREOF, the Parties hereto have executed this Omnibus Agreement on, and effective as of, the date first written above.

RIO VISTA ENERGY PARTNERS, L.P.

By: RIO VISTA GP LLC,
On behalf of itself and on behalf of
Partnership as its General Partner

By:/s/ Richard Shore, Jr.
   -------------------------
Name: Richard Shore, Jr.
Title: President

RIO VISTA OPERATING PARTNERSHIP L.P.

By: RIO VISTA OPERATING GP LLC

By: RIO VISTA ENERGY PARTNERS
L.P., its sole member

By: RIO VISTA GP LLC

By:/s/ Richard Shore, Jr.
   -------------------------
       Richard Shore, Jr.,
       President

PENN OCTANE CORPORATION

By: /s/ Jerome B. Richter
    ------------------------
Name: Jerome B. Richter
Title: Chief Executive Officer

PENDING LEGAL ACTIONS AGAINST PENN OCTANE CORPORATION

NONE

INSURANCE

AMENDMENT NO. 1

TO

OMNIBUS AGREEMENT

BETWEEN

PENN OCTANE CORPORATION,

RIO VISTA GP LLC,

RIO VISTA ENERGY PARTNERS L.P.

AND

RIO VISTA OPERATING PARTNERSHIP L.P.

AMENDMENT NO. 1
TO OMNIBUS AGREEMENT

RECITALS:

WHEREAS, it was and is the intent of the Parties that the definition of "Business" in the Original Agreement means the business conducted through the use of the Assets;

WHEREAS, the Parties desire to amend the Original Agreement to reflect their intent with respect to such indemnity and definition of Business; and

NOW THEREFORE, in consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

1. Capitalized terms used in this Agreement shall have the same meanings as set forth in the Original Agreement unless otherwise defined herein.

"(i) the operation of the Assets,"

4. Any and all of the terms and conditions of the Original Agreement are hereby amended and modified wherever necessary, even though not specifically addressed herein, so as to conform to the amendments and modifications contained in this Agreement.

5. Except as modified hereby, all of the provisions of the Original Agreement are hereby ratified and confirmed and shall continue in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 to Omnibus Agreement in multiple counterparts, each of which shall be deemed an original, as of the date and year first above written.

RIO VISTA ENERGY PARTNERS, L.P.

By: RIO VISTA GP LLC,
On behalf of itself and on behalf of
Partnership as its General Partner

Title: President

RIO VISTA OPERATING PARTNERSHIP L.P.

By: RIO VISTA OPERATING GP LLC

By: RIO VISTA ENERGY PARTNERS
L.P., its sole member

By: RIO VISTA GP LLC

PENN OCTANE CORPORATION

PURCHASE CONTRACT

BETWEEN

PENN OCTANE CORPORATION

"SELLER"

AND

RIO VISTA OPERATING PARTNERSHIP L.P.

ARTICLE I   QUANTITY OF LPG . . . . . . . . . . . . . . . . . . . . . . .  4

ARTICLE II. TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  4

    Section 2.1  Term . . . . . . . . . . . . . . . . . . . . . . . . . .  4

    Section 2.2  Termination. . . . . . . . . . . . . . . . . . . . . . .  4

ARTICLE III PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5

ARTICLE IV. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5

ARTICLE V POINT OF DELIVERY, FACILITIES AND OWNERSHIP AND
          CONTROL OF LPG. . . . . . . . . . . . . . . . . . . . . . . . .  5

    Section 5.1 Point of Delivery; Facilities . . . . . . . . . . . . . .  5

    Section 5.2 Ownership and Control of LPG. . . . . . . . . . . . . . .  5

ARTICLE VI.  DELIVERY PRESSURE. . . . . . . . . . . . . . . . . . . . . .  6

ARTICLE VII. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . .  6

    Section 7.  Notices . . . . . . . . . . . . . . . . . . . . . . . . .  6

    Section 7.2 Change of Address . . . . . . . . . . . . . . . . . . . .  6

ARTICLE VIII. ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . . . . .  6

ARTICLE IX.   GENERAL TERMS AND CONDITIONS. . . . . . . . . . . . . . . .  7

EXHIBITS

Exhibit A - General Terms and Conditions

PURCHASE CONTRACT

THIS PURCHASE CONTRACT (this "Contract") is made and entered into effective as of the 1st day of October, 2004, by and between PENN OCTANE CORPORATION, a Delaware corporation (hereinafter called "Seller"), and RIO VISTA OPERATING PARTNERSHIP L.P., a Delaware limited partnership (hereinafter called "Buyer"):

W I T N E S S E T H:

WHEREAS, Seller desires to sell and deliver to Buyer and Buyer desires to purchase and receive from Seller liquefied petroleum gas ("LPG"), in the quantities and upon the terms and conditions hereinafter set forth;

WHEREAS, the Conflicts Committee of Rio Vista GP LLC has approved of the terms and conditions of this Contract;

NOW, THEREFORE, in consideration of the premises, and of the mutual covenants and agreements contained herein, and the general terms and provisions hereof, Buyer and Seller agree as follows:

Seller agrees to sell and deliver to Buyer and Buyer agrees to purchase and receive from Seller a monthly volume of LPG equal to the total amount of LPG per month that Buyer sells or otherwise distributes using, in whole or in part, any of the Contributed Assets to the extent Seller is able to supply quantities of LPG sufficient for Buyer's needs. Notwithstanding anything herein to the contrary, Buyer shall have no obligation to purchase LPG from Seller in the event the distribution of such LPG by Buyer to its customers would not require the use, in whole or in part, of any of the Contributed Assets. In addition, to the extent Seller does not or cannot supply quantities of LPG sufficient for Buyer's needs, Buyer may purchase LPG from other suppliers during the period that Seller does not or cannot supply quantities of LPG sufficient for Buyer's needs without any obligation to Seller hereunder.

Section 2.1 Term. This Contract shall be effective as of the 1st day of October, 2004, and, subject to the provisions of this Contract, shall continue and remain in full force and effect for so long as the earlier to occur of (i) Seller ceases to have the right to access the Seadrift Pipeline and (ii) Buyer ceases to use, in whole or in part, any of the Contributed Assets for the sale of LPG.

Section 2.2 Termination. In the event Buyer takes no LPG under this Contract for thirty (30) consecutive Days for any reason whatsoever other than force majeure, Seller shall have the right, at its option, exercisable at any time within fifteen (15) Days following such thirty (30) consecutive Day period, to terminate this Contract by delivering to Buyer written notice of termination. In the event Seller so elects to terminate this Contract, such termination shall be

effective as of 7:00 o'clock a.m. Central Time on the first Day of the Month next following the date of delivery of such notice to Buyer, whereupon the parties hereto shall be relieved of all liabilities and obligations hereunder except for liabilities and obligations of the parties that shall have accrued as of such date of termination. In the event Seller does not or cannot supply quantities of LPG sufficient for Buyer's needs for thirty (30) consecutive Days for any reason whatsoever other than force majeure, Buyer shall have the right, at its option, exercisable at any time within fifteen (15) Days following such thirty (30) consecutive Day period, to terminate this Contract by delivering to Seller written notice of termination. In the event Buyer so elects to terminate this Contract, such termination shall be effective as of 7:00 o'clock a.m. Central Time on the first Day of the Month next following the date of delivery of such notice to Seller, whereupon the parties hereto shall be relieved of all liabilities and obligations hereunder except for liabilities and obligations of the parties that shall have accrued as of such date of termination.

Subject to the provisions of this Contract, the amount payable by Buyer to Seller for each Gallon of LPG purchased hereunder each Month shall equal the Purchase Price.

Seller shall pay or cause to be paid all taxes and assessments imposed on Seller with respect to the LPG delivered hereunder prior to its delivery to Buyer, and Buyer shall pay or cause to be paid all taxes and assessments imposed upon Buyer with respect to LPG delivered hereunder after its receipt by Buyer. Neither party shall be responsible or liable for any taxes or other statutory charges levied or assessed against any of the facilities of the other party used for the purpose of carrying out the provisions of this Contract.

Section 5.1 Point of Delivery; Facilities. Seller shall deliver the LPG to Buyer hereunder at the point at which the LPG exits the Seadrift Pipeline and is delivered into Buyer's facilities at its Brownsville, Texas terminal or any other point which employs the use of the Contributed Assets. Buyer shall be responsible for arranging for Buyer or its designee, to receive delivery of LPG sold hereunder to Buyer at the Delivery Point into Buyer's or its designee's gathering system.

Section 5.2 Ownership and Control of LPG. Title to the LPG sold and delivered hereunder shall pass to Buyer at the Delivery Point. As between the parties hereto, Seller shall be in control and possession of the LPG and responsible for any damage or injury caused thereby until same shall have been delivered to Buyer, after which delivery Buyer shall be deemed to be in exclusive control and possession thereof and responsible for any injury or damage caused thereby.

The LPG delivered or caused to be delivered hereunder by Seller to Buyer or its designee(s) at the Delivery Point shall be delivered at a pressure sufficient to enter the facilities at such point of Buyer or its designee(s).

Section 7.1 Notices. Every notice, consent, approval, communication, request or reply which is required or which may be given by either party to the other under the terms of this Contract must be in writing, and may be effected by actual delivery to the party to be notified, by depositing such notice in the United States mail, postage prepaid, registered or certified mail, and addressed to the party to be notified with return receipt requested, or by facsimile transmission. Every notice deposited in the United States mail as hereinabove authorized shall, in the absence of a strike, lock-out, boycott or other labor dispute affecting the delivery of United States mail, be effective three (3) days following the date on which it is so deposited. Notice given by facsimile transmission shall be effective on completion and confirmation of the facsimile transmission. Notice given in any other manner shall be effective only if and when received by the party to be notified. For purposes of notice, the addresses of the parties, until changed as hereinafter provided, shall be as follows:

Seller       Penn Octane Corporation
             77-530 Enfield Lane, Building D
             Palm Desert, CA 92211
             Attn:  Jerome B. Richter, President
             Facsimile:  (760) 772-8588

Buyer        Rio Vista Operating Partnership L.P.
             820 Gessner Road, Suite 1285
             Houston, Texas 77024
             Attn:  General Partner
             Facsimile:  (713) _____________

Section  7.2     Change  of  Address.  Each  of  the parties shall have the

right, from time to time, to change its address, and each shall have the right to specify as its address any other address within the United States of America by delivering to the other party not less than ten (10) days' prior notice in writing of such new address.

All the terms, conditions and provisions of this Contract shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, no assignment of this Contract by either party shall be effective or binding until a copy of such assignment has been furnished to the other party.

Annexed hereto as a part hereof are General Terms and Conditions of this Contract which General Terms and Conditions constitute a part of this Contract and the terms and provisions hereof to the same extent as if written in full in the body hereof.

(Signatures on following page)

IN WITNESS WHEREOF, the parties hereto have executed this Contract in multiple counterparts, each of which shall be deemed an original but all of which constitute one and the same instrument as of the date first above mentioned.

"SELLER"

PENN OCTANE CORPORATION

By: /s/ Jerome B. Richter
   ---------------------------------
   Jerome B. Richter, Chief
   Executive Officer

"BUYER"

RIO VISTA OPERATING PARTNERSHIP L.P.

By: RIO VISTA OPERATING GP LLC,
Its General Partner

By:/s/ Richard Shore, Jr.
   ---------------------------
       Richard Shore, Jr.,
       President

EXHIBIT A

ARTICLE I.

1.1 For the purpose of this Contract, the following terms shall have the meanings ascribed thereto unless their use in context is specifically to the contrary:

(a) Day - That period of time consisting of twenty-four (24) consecutive hours beginning at 7:00 a.m. Central Time.

(b) COGS - is the average cost to Seller per Gallon of LPG on a monthly basis of all LPG supplies obtained by Seller, including the base cost per Gallon of LPG, costs to mix the product, premiums/discounts paid to suppliers for LPGs, mercaptain, testing and inspection costs.

(c) Contributed Assets - shall have the meaning set forth in that certain Contribution, Conveyance and Assumption Agreement dated September 16, 2004 between Seller and Buyer.

(d) ECCPL - the twelve inch pipeline to which the Seller has access and which connects ExxonMobil Corporation's Viola valve station in Nueces County, Texas to the inlet of the King Ranch Gas Plant.

(e) Gallon - 231 cubic inches or 0.133681 cubic feet of liquid at sixty
(60) degrees Fahrenheit and at the equilibrium vapor pressure of the liquid.

(f) Margin Allocation Amount - is the product of (i) the quotient of (a) the difference of Revenues minus COGS divided by (b) the Total LPG Gallons, multiplied by (ii) the quotient of (c) Penn Costs divided by (d) Total Costs.

(g) Month - A chart accounting month commencing at 7:00 a.m. on the first day of the chart accounting month and ending at 7:00 a.m. on the first day of the following chart accounting month.

(h) OPIS - the Oil Price Information Service.

(i) Penn Costs - All costs of Seller on a per Gallon of LPG basis associated with the ownership or lease and operation of assets related to bringing LPG from suppliers to the Delivery Point. These costs principally relate to all variable charges for use of the ECCPL (including minimum thruput charges), the Seadrift Pipeline (including minimum fixed rental charges), minimum Markham storage reservation fees, utilities, trucking costs, insurance costs and

depreciation. Penn Costs shall also include all indirect selling, general and administrative costs (excluding amounts paid by Buyer). In determining Penn Costs, only cost items paid in cash or to be paid in cash plus depreciation and amortization excluding interest and income taxes, gains/losses on disposal of assets shall be included.

(j) Point of Delivery and Delivery Point - the point of delivery as described in Section 5.1 of the Contract.

(k) Purchase Price - is the sum of the Margin Allocation Amount and the Product Price Allocation.

(l) Product Price Allocation - the average monthly per Gallon price of LPG in accordance with Buyer specifications (generally 90% propane and 10% butane) based on the price quoted for the month average of Mont Belvieu non-tet propane per OPIS and the month average price for Mont Belvieu non-tet normal butane per OPIS.

(m) Revenues - Total proceeds per Gallon of LPG to Buyer from the sale of LPG supplied by Seller.

(n) Rio Vista Costs - All costs to Buyer on a per Gallon of LPG basis associated with ownership or lease and operation of assets employed by Buyer to bring LPG supplied by Seller from the Delivery Point to Buyer's customers. These costs principally relate to the costs of operating the Brownsville terminal facility, the US-Mexico pipelines and the Matamoros terminal facility and any other asset brought on-line in the future which is put into operation for the purpose of enhancing or providing sales of LPG to customers from LPG supplies provided by Seller. Rio Vista Costs include payroll costs, rent, insurance, utilities, repairs and maintenance and depreciation. Rio Vista Costs shall also include all indirect selling, general and administrative costs (including costs allocated from Seller, including costs incurred as a result of the creation of Rio Vista Energy Partners L.P. as a publicly traded limited partnership). In determining Rio Vista Costs, only costs items paid in cash or to be paid in cash plus depreciation and amortization excluding interest and income taxes, gains/losses on disposal of assets shall be included.

(o) Seadrift Pipeline - an approximately 132 mile pipeline which is leased by Seller from the Seadrift Corporation and connects ExxonMobil Corporation's King Ranch Gas Plant in Kleberg County, Texas and Duke Energy's La Gloria Gas Plant in Jim Wells County, Texas to Buyer's Brownsville, Texas terminal facility.

(p) Total Costs - The sum of the Penn Costs and the Rio Vista Costs calculated on a monthly basis.

(q) Total LPG Gallons - is the total number of Gallons of LPG sold by Buyer from supplies of LPG provided by Seller in any one month calculation period.

ARTICLE II.

Seller agrees that the LPG delivered hereunder shall be of merchantable quality meeting the pressure and quality specifications of customers of Buyer. Buyer shall not be obligated to purchase any LPG which fails to meet the foregoing contract quality specifications. If LPG does not meet such specifications and Buyer desires not to purchase LPG, Seller will be given a 15 day written notice of such intent. Except as hereinafter expressly provided, Buyer shall be obligated to purchase all LPG tendered by Seller hereunder, whether or not such LPG meets the quality specifications of any particular third party purchaser or transporter, so long as such LPG meets the foregoing contract quality specifications. Notwithstanding the foregoing, in the event (a) LPG delivered by Seller to Buyer hereunder is unmarketable and, such LPG, when blended together with LPG from any other sources available to Buyer that exceeds the quality of Seller's LPG, for purposes of improving the overall quality of Seller's LPG, is still unmarketable, and (b) Buyer reasonably demonstrates to Seller's satisfaction that Buyer has made reasonable efforts to market the LPG but has been unable to market the LPG due specifically to the quality of Seller's LPG, then Buyer shall be relieved from its obligation to purchase and take the portion of Seller's LPG which is unmarketable but only for the period of time such LPG remains unmarketable. In the event that such LPG remains unmarketable for a period of ninety (90) days, Seller's obligation to sell and deliver to Buyer and Buyer's obligation to purchase and receive hereunder the portion of Seller's LPG that is unmarketable shall cease and Seller shall be entitled to dispose of such LPG to any third party or parties free and clear of any claim by Buyer hereunder.

ARTICLE III.

3.1 The unit of volume for purposes of measurement of LPG delivered hereunder shall be one (1) Gallon. All fundamental constants, observations, records and procedures involved in the determining and/or verifying of the quality and other characteristics of LPG delivered hereunder shall, unless otherwise specified herein, be in accordance with the standards and methods prescribed in Gas Measurement Committee Report No. 3, dated April, 1955, of the American Gas Association as now and from time to time amended.

3.2 The temperature of the LPG flowing through the meter or meters shall be assumed to be sixty (60) degrees Fahrenheit, but may be determined by continuous use of a recording thermometer installed by Seller (if deemed necessary by Buyer and at Buyer's expense) so that it will properly record the temperature of the LPG flowing through the meter or meters. The arithmetical average of the temperatures recorded while LPG is passing through the meter or meters in each chart period shall be used in computing measurements for that chart period.

3.3 The specific gravity of the LPG flowing through the meter or meters shall be assumed to be .600; however, at Buyer's option and expense, the specific gravity may be determined by use of a sampling device, connected so as to collect a representative sample of the

LPG delivered hereunder. The specific gravity of the LPG sample will be determined by calculation from a fractional analysis obtained with a chromatograph. The specific gravity will be calculated from the fractional analysis using data in the most up-to-date table, "Physical Constants of Paraffin Hydrocarbons," published by the Natural LPG Processors Association. The specific gravity so determined will be used in calculating LPG deliveries for the Month during which the sample is collected.

3.4 The reading, calibrating and adjustment of such equipment and instruments on which quantities of LPG delivered hereunder are determined and the changing of charts shall be done by employees, agents or representatives of Buyerr. Upon request of Seller, Buyer shall submit to Seller records and charts from such equipment, subject to return by Seller within twenty (20) days after receipt thereof. The charts and records shall be kept on file for a period of three (3) years for the mutual use of the parties hereto.

3.5 At least once each year Buyer, or its affiliates, shall test and calibrate the meter and instruments or cause the same to be tested and calibrated consistent with prior practices. Buyer shall give Seller notice of the time of all tests sufficiently in advance of holding same so that Seller may conveniently have Seller's representative present; however, if Seller's representative is not present, Buyer or a third party acting for Buyer may proceed with the test.

3.6 If the metering equipment in the aggregate is found to be inaccurate by two percent (2%) or more, registrations thereof and any payments based upon such registrations shall be corrected at the rate of such inaccuracy for any period which is definitely known or agreed upon, then for a period extending back one-half (1/2) of the time elapsed since the last test not exceeding, however, fifteen (15) days. Following any test, any metering equipment found to be inaccurate to any degree shall be adjusted immediately to record accurately.

3.7 If for any reason any meter, scale or other system of measurement is out of service or out of repair so that the quantity of LPG received and/or sold by Buyercannot be ascertained or computed from the reading thereof, the quantity of LPG so received and/or sold during the period the system of measurement is out of repair shall be estimated and agreed upon by the parties hereto upon the basis of the best available data, using the first of the following methods which is feasible:

(a) by using the registration of any check measuring equipment of Buyer if installed and accurately registering;

(b) by correcting the error if the percentage or amount of error is ascertainable by calibration, test or mathematical calculation;

(c) by estimating the quantity of purchases during preceding periods under similar conditions when the meter was registering accurately.

3.8 For the purpose of measurement and meter calibration, the atmospheric pressure shall be assumed to be constant at fourteen and seven-tenths (14.7) psia.

3.9 The measurement hereunder shall be corrected for deviation from Boyle's law at the pressure and temperature under which LPG is delivered hereunder.

3.10 It is agreed that the value of the EXPANSION FACTOR, REYNOLDS NUMBER FACTOR, SUPERCOMPRESSABILITY FACTOR and MANOMETER FACTOR (where Mercury type orifice meters are used) shall be actual values.

ARTICLE IV.

Buyer shall render to Seller on or before the tenth day of each month a statement of the quantity of LPG (in terms of Gallons) purchased by Buyer from Seller during the preceding Month or for which payment is due, and the amount payable. Buyer shall make payment to Seller for LPG received and/or sold during the preceding Month upon Seller's receipt of the proceeds from the sales of such LPG. Such payments shall be made by wire transfer of immediately available funds to the bank account of Seller specified by Seller to Buyer from time to time pursuant to Article VII of the Contract. Accounting shall be by Buyer, and billings for payment shall be accompanied by a statement showing such calculations and adjustments, if any, as were used to arrive at the amount set out.

ARTICLE V.

Seller warrants title to all LPG delivered hereunder by Seller, that Seller has the right to sell the same and that such LPG is free from liens (other than liens in favor of RZB Finance LLC) and adverse claims of every kind. Seller will pay all royalties, taxes and other sums due on production of the LPG delivered hereunder. Seller further warrants that the LPG delivered hereunder is free and clear of any prior contract or dedication to any third party that limits or restricts the right of Seller to sell LPG to Buyer hereunder, or that gives such third party a claim to either the proceeds paid or a claim that a like quantity of LPG be tendered to such third party at a later date. Seller will indemnify and save Buyer harmless against all loss, damage and expense of every character on account of adverse claims to the LPG delivered by Seller or of royalties, taxes, payments or other charges thereon applicable before or upon delivery to Buyer. If Seller's title is questioned or involved in any legal action, Buyer may withhold payment of sums due hereunder up to the amount of the claim until title is freed from such question or such action is finally determined, or until Seller furnishes either bond with surety or an escrow arrangement satisfactory to Buyer and conditioned to save Buyer harmless.

ARTICLE VI.

This Contract shall be subject to all valid and applicable laws, rules and regulations of any duly constituted governmental body having jurisdiction herein. Buyer does not require any governmental authority or approval to enter into this Contract or to accept the delivery of LPG from Seller hereunder. If at any time there is a new law, rule or regulation, or changed interpretation of any existing law, rule or regulation that requires Buyer to obtain any governmental approval or authorization, Buyer will notify Seller of the requirement and will furnish Seller with any application filed, the evidence to support the application and of the order or authorization entered.

ARTICLE VII.

In the event either party hereto is rendered unable, wholly or in part, by force majeure, to carry out its obligations under this Contract, other than to make payments due hereunder, then on such party's giving notice and reasonable full particulars of such force majeure in writing or by telecopy to the other party as soon as possible after the occurrence of the cause relied upon, the obligations of the party giving notice, so far as they are affected by such force majeure, shall be suspended during, but only during, the continuance of any inability so caused. The term "force majeure," as used herein, shall mean acts of God, strikes, lockouts, acts of the public enemy, wars, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, hurricanes or the threat thereof, fires, storms, floods, washouts, arrest and restraints of rulers of people, civil disturbances, the freezing of wells or lines of pipe, requisitions, directives, diversions, embargoes, priorities, expropriations of government or governmental authorities, legal or de facto, whether purporting to act under some constitution, decree, law or otherwise, failure of pipelines, facilities or lines of pipe provided such failure of pipelines, facilities or lines of pipe is not reasonably within the control of the party claiming suspension, the partial or entire failure of LPG wells, and the inability to acquire, or the delays in acquiring at reasonable cost and after the exercise of reasonable diligence, such servitudes, right of way grants, permits, licenses, approvals and authorizations by regulatory bodies, and/or such supplies and materials (or permission from regulatory bodies to use supplies and materials on hand), as may be necessary in order that obligations assumed hereunder may be lawfully performed in the manner herein contemplated. Upon the occurrence of an event constituting force majeure, the same shall, so far as possible, be remedied with all reasonable dispatch. The settlement of strikes or other labor difficulties shall be entirely within the discretion of the party having the difficulty, and the above requirement that any force majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes or other labor difficulties by acceding to the demands of any opposing party therein when such course is inadvisable in the discretion of the party having the difficulty.

ARTICLE VIII.

Buyer shall indemnify, defend and hold Seller harmless from and against all loss, cost and expense, including court costs and attorney's fees, for any claims, suits, judgments, demands, actions or liability growing out of the operations conducted hereunder by Buyer or arising while the LPG is in Buyer's exclusive control and possession. Likewise, Seller shall indemnify, defend and hold Buyer harmless from and against any loss, cost and expense, including court costs and attorney's fees, for any claims, suits, judgments, demands, actions or liability growing out of Seller's operations of its wells, leases, equipment, pipelines and other facilities and appurtenances thereto or arising while the LPG is in Seller's exclusive control and possession.

ARTICLE IX.

9.1 Entirety - This Contract contains the entire agreement between the parties and there are no oral promises, agreements or warranties affecting it.

9.2 Titles - The numbering and titling of particular provisions of this Contract are for the purpose of facilitating administration and shall not be construed as having any substantive effect on the terms of this Contract.

9.3 Waiver - Waiver of any breach or failure to enforce any of the terms and conditions of this Contract at any time shall not in any way affect, limit or waive either party's right thereafter to enforce and compel compliance with every term and condition hereof.

9.4 Time of Essence - Time is of the essence in this Contract in all respects.

9.5 Preparer - This Contract was prepared jointly by the parties hereto and not by either party to the exclusion of the other.

9.6 Severability - In the event that any clause or provision in this Contract shall, for any reason, be deemed illegal, invalid or unenforceable, the remaining provisions and clauses shall not be affected, impaired or invalidated and shall remain in full force and effect. In lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Contract a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

9.7 Governing Law - As to all matters of construction and interpretation, this Contract shall be interpreted, construed and governed by the laws of the State of Texas, excluding conflicts of law principles that might require the application of the laws of another jurisdiction.

9.8 Damages - Neither party shall be liable to the other for any indirect, incidental, consequential or punitive damages which may occur, in whole or in part, as a result of a party's performance or non-performance of any of the terms and conditions of this Contract.

End of General Terms and Conditions

THIS OPTION AND THE LIMITED LIABILITY COMPANY INTERESTS PURCHASABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS. IT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

UNIT PURCHASE OPTION

Void after July 10, 2006

Option No. 1 July 10, 2003

As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

(a) The term "Company" includes any corporation that shall succeed to or assume the obligations of the Company.

(b) The term "Exercise Price" shall have the meaning ascribed to such term in the first paragraph hereof.

(c) The term "Limited Liability Company Agreement" shall mean the Amended and Restated Limited Liability Company Agreement of the Company dated September 8, 2004.

(c) The term "Purchase Price" shall mean the amount equal to the product of the Exercise Price and the number of Units to be purchased upon the full exercise of this Option.

(d) The term "Units" shall have the meaning ascribed to such term in the Limited Liability Company Agreement.

with the form of subscription, addendum agreement to the limited liability company agreement of the Company and the Voting Agreement attached hereto duly executed by such Holder, to the Company and Penn Octane at their respective principal offices, accompanied by payment of the Purchase Price. The Purchase Price shall be paid by cash or check payable to the order of Penn Octane Corporation.

entitled to the benefits of this Option requiring specific performance of any and all provisions hereof or enjoining the Penn Octane from continuing to commit any such breach of the terms hereof.

(a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any Texas state court or federal court o the United States of America sitting in Houston, Texas, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby or for recognition or enforcement of any judgment relating thereto, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect

of any such action or proceeding may be heard and determined in such Texas state court or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(b) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Option or the transactions contemplated hereby in any Texas state or federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(c) Each party to this Option irrevocably consents to service of process in the manner provided for notices in Section 8. Nothing in this Option will affect the right of any party to this Option to serve process in any other manner permitted by law.

12. Waiver of Jury Trial.

(a) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS OPTION IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS OPTION OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

(b) EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (iii) IT MAKES SUCH WAIVER VOLUNTARILY, AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS OPTION BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 12.

PENN OCTANE CORPORATION

ACKNOWLEDGED AND AGREED TO
WITH RESPECT TO ITS RIGHTS AND
OBLIGATIONS HEREUNDER:

SHORE CAPITAL LLC

By: /s/ Richard Shore, Jr.
    -------------------------------------------
    Richard Shore, Jr., President

ATTACHMENT A TO OPTION

FORM OF SUBSCRIPTION

(TO BE SIGNED ONLY ON EXERCISE OF OPTION)

To: PENN OCTANE CORPORATION

The undersigned, the holder of the within Option, hereby irrevocably elects to exercise the purchase rights represented by such Option for, and to purchase thereunder, 25% of the outstanding Units of RIO VISTA GP LLC and herewith makes payment of $___________ therefor,

and requests that the certificates for such units be issued in the name of, and delivered to the undersigned, whose address is________________________ ____________________________________.

Dated: ________________________

ATTACHMENT B TO OPTION

ADDENDUM AGREEMENT TO THE LIMITED LIABILITY COMPANY
AGREEMENT OF RIO VISTA GP LLC

ATTACHMENT C TO OPTION

VOTING AGREEMENT

THIS OPTION AND THE LIMITED LIABILITY COMPANY INTERESTS PURCHASABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS. IT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

UNIT PURCHASE OPTION

Void after July 10, 2006

Option No. 2 July 10, 2003

FOR VALUE RECEIVED, the undersigned, PENN OCTANE CORPORATION, a Delaware corporation ("Penn Octane"), hereby certifies that Jerome B. Richter (the "Holder"), or assigns, is entitled, subject to the terms set forth below, to purchase from Penn Octane after the date (the "Distribution Date") Penn Octane completes the distribution (the "Distribution") to its stockholders of all of the outstanding common units of Rio Vista Energy Partners L.P., a Delaware limited partnership ("Rio Vista"), and before 5:00 P.M. New York time, on July 10, 2006 (the "Expiration Date") 25% of the outstanding Units (as defined below) of Rio Vista GP LLC, a Delaware limited liability company (the "Company"), for a purchase price per Unit (the "Exercise Price") equal to the number of Units to be purchased divided by the pro rata portion of the tax basis capital of Rio Vista immediately following the Distribution.

As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

(a) The term "Company" includes any corporation that shall succeed to or assume the obligations of the Company.

(b) The term "Exercise Price" shall have the meaning ascribed to such term in the first paragraph hereof.

(c) The term "Limited Liability Company Agreement" shall mean the Amended and Restated Limited Liability Company Agreement of the Company dated September 8, 2004.

(c) The term "Purchase Price" shall mean the amount equal to the product of the Exercise Price and the number of Units to be purchased upon the full exercise of this Option.

(d) The term "Units" shall have the meaning ascribed to such term in the Limited Liability Company Agreement.

Purchase Price. The Purchase Price shall be paid by cash or check payable to the order of Penn Octane Corporation.

(a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any Texas state court or federal court o the United States of America sitting in Houston, Texas, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby or for recognition or enforcement of any judgment relating thereto, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Texas state court or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(b) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Option or the transactions contemplated hereby in any Texas state or federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(c) Each party to this Option irrevocably consents to service of process in the manner provided for notices in Section 8. Nothing in this Option will affect the right of any party to this Option to serve process in any other manner permitted by law.

12. Waiver of Jury Trial.

(a) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS OPTION IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS OPTION OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

(b) EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (iii) IT MAKES SUCH WAIVER VOLUNTARILY, AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS OPTION BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 12.

PENN OCTANE CORPORATION

By: /s/ Richard Shore, Jr.
    ----------------------------------
    Richard Shore, Jr., President

ACKNOWLEDGED AND AGREED TO
WITH RESPECT TO ITS RIGHTS AND
OBLIGATIONS HEREUNDER:

/s/Jerome  B.  Richter
--------------------------------------
Jerome  B.  Richter

ATTACHMENT A TO OPTION

FORM OF SUBSCRIPTION

(TO BE SIGNED ONLY ON EXERCISE OF OPTION)

To: PENN OCTANE CORPORATION

The undersigned, the holder of the within Option, hereby irrevocably elects to exercise the purchase rights represented by such Option for, and to purchase thereunder, 25% of the outstanding Units of RIO VISTA GP LLC and herewith makes payment of $___________ therefor,

and requests that the certificates for such units be issued in the name of, and delivered to the undersigned, whose address is ______________________ ________________________________________________.

Dated: ________________________

ATTACHMENT B TO OPTION

ADDENDUM AGREEMENT TO THE LIMITED LIABILITY COMPANY
AGREEMENT OF RIO VISTA GP LLC

ATTACHMENT C TO OPTION

VOTING AGREEMENT

RIO VISTA ENERGY PARTNERS L.P.
UNIT OPTION AGREEMENT

Void after July 10, 2006

1. DEFINITIONS.

2. ADMINISTRATION.

(a) ADMINISTRATION BY GENERAL PARTNER. The General Partner shall administer this Agreement. Any interpretation of this Agreement by the General Partner and any decision by the General Partner under this Agreement shall be final and binding on all persons.

(b) POWERS OF GENERAL PARTNER. The General Partner shall have the power, subject to, and within the limitations of, the express provisions of this Agreement:

(i) to construe and interpret this Agreement, and to establish, amend and revoke rules and regulations for its administration; the General Partner, in the exercise of this power, may correct any defect, omission or inconsistency in this Agreement, in a manner and to the extent it shall deem necessary or expedient to make this Agreement fully effective; and

(ii) generally, to exercise such powers and to perform such acts as the General Partner deems necessary or expedient to promote the best interests of the Partnership which are not in conflict with the provisions of this Agreement.

3. NUMBER OF COMMON UNITS, EXERCISE PRICE AND CAPITALIZATION ADJUSTMENTS. The number of Common Units subject to this Option and the exercise price per Common Unit may be adjusted from time to time for capitalization adjustments described in this Section. If any change is made in the Common Units subject to this Agreement, without the receipt of consideration by the Partnership (through conversion, merger, consolidation, reorganization, recapitalization, unit distribution, distribution in property other than cash, Common Units split, liquidating distribution, combination of Common Units, exchange of Common Units, change in structure or other transaction not involving the receipt of consideration by the Partnership), the Common Units subject to this Agreement will be appropriately adjusted in the class(es) and number of securities and price per Common Unit. The General Partner, the determination of which shall be final, binding and conclusive, shall make such adjustments. (The conversion of any convertible securities of the Partnership shall not be treated as a transaction "without receipt of consideration" by the Partnership.)

4. METHOD OF PAYMENT. Payment of the Purchase Price is due in full upon exercise of all or any part of this Option. The Optionholder may elect to make payment of the Purchase Price in cash or by check.

5. WHOLE COMMON UNITS. This Option may only be exercised for whole Common Units.

6. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, this Option may not be exercised unless the Common Units issuable upon exercise of this Option are then registered under the Securities Act or, if such Common Units are not then so registered, the Partnership has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The Partnership shall use its commercially reasonable efforts to register such Common Units under the Securities Act.

7. TERM. The term of this Option commences on the date Penn Octane completes the distribution to its stockholders of all the outstanding Common Units of the Partnership and expires on the Expiration Date.

8. EXERCISE.

(b) By exercising this Option, the Optionholder agrees that, as a condition to any exercise of this Option, the Partnership or the General Partner may require the Optionholder to enter an arrangement providing for the payment by the Optionholder to the Partnership of any tax withholding obligation of the Partnership, as reasonably determined by the Partnership, arising by reason of
(1) the exercise of this Option, or (2) the disposition of Common Units acquired upon such exercise.

(c) Notwithstanding anything herein to the contrary, during the term of this Option, this Option may only be exercised during the first ten (10) days of the first month of each fiscal quarter of the Partnership and during such other periods as the General Partner may designate in its sole discretion for purposes of minimizing the accounting costs to the Partnership resulting from such exercise.

9. TRANSFERABILITY. This Option is not transferable, except to any Affiliate of the Optionholder, and is exercisable only by the Optionholder or such Affiliate. The transferability of the Common Units issued upon exercise of this Option shall be subject to the conditions, restrictions and limitations set forth in this Agreement, the Partnership Agreement and any other agreements the Optionholder may have with the Partnership.

10. WITHHOLDING OBLIGATIONS

(a) At the time this Option is exercised, in whole or in part, or at any time thereafter as requested by the Partnership, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Partnership or an Affiliate, if any, which arise in connection with this Option.

(b) This Option is not exercisable unless the tax withholding obligations of the Partnership and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise this Option when desired even though this Option is vested, and the Partnership shall have no obligation to issue a certificate for such Common Units or release such Common Units from any escrow provided for herein.

11. TAX CONSEQUENCES AND CAPITAL ACCOUNT UPON EXERCISE OF OPTION. It is intended that neither the Optionholder, the Partnership nor any of the partners (owners) of the Partnership shall have any federal income tax consequences upon grant of this Option, or, except as described herein, upon exercise of this Option. Additionally, it is intended that the Optionholder shall not be treated as a partner with respect to the Common Units subject to this Agreement until such time as this Option is exercised. It is intended that, upon exercise of this Option, the Optionholder shall include in income ("Exercise Income") in the tax year of exercise an amount equal to the excess, if any, of the fair market value of Common Units on the date of exercise over the sum of the amount the Optionholder has paid or will pay to the Partnership ("Option Consideration") upon the grant and exercise of the Option. It is intended that the Partnership shall be entitled to a deduction equal to the amount of Exercise Income, which, if the Partnership continues to be a partnership for federal income tax purposes, shall be allocated solely to the partners of the Partnership other than the Optionholder to whom the Exercise Income is attributable. Upon exercise of this Option, Optionholder shall receive a positive capital account in the Partnership (assuming the Partnership continues to be classified as a partnership for federal income purposes) equal to the sum of the Exercise Income to the Optionholder and the amount of Option Consideration paid by the Optionholder. Should the federal income tax consequences differ from that described in this section, the General Partner shall have the authority to change the capital account or allocations of income and deduction to the Optionholder as described herein in manner which in its discretion most closely achieves the same economic effect of the consequences described in this Section. Notwithstanding anything herein to the contrary, the General Partner shall have the authority to change the tax reporting described above with respect to the issuance or exercise of this Option or alter the capital accounts or allocations of Partnership items as necessary to preserve or achieve the uniformity of Common Units.

12. NOTICES. Any notices provided for in this Option or this Agreement shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Partnership to the Optionholder, five
(5) days after deposit in the United States mail, postage prepaid, addressed to the Optionholder at the last address provided to the Partnership.

13. THIS AGREEMENT; PARTNERSHIP AGREEMENT. This Option is subject to all the provisions of this Agreement, the provisions of which are hereby made a part of this Option, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to this Agreement, and the Common Units to be delivered are subject to the terms of the Partnership Agreement. In the event of any conflict among Optionholder's rights under the Common Units, this Agreement and the Partnership Agreement, the terms of the Partnership Agreement shall control.

14. MISCELLANEOUS.

(a) AVAILABILITY OF COMMON UNITS. During the term of this Option, the Partnership shall keep available at all times the number of Common Units required to satisfy the Option.

(b) PARTNER RIGHTS. No Optionholder shall be deemed to be partner of the Partnership, or to have any of the rights of a partner or rights of an assignee from a partner with respect to, any Common Units subject to the Option unless and until such Optionholder has satisfied all requirements for exercise of the Option pursuant to its terms.

(c) INVESTMENT ASSURANCES. Unless the Common Units issuable upon exercise of this Option are then registered under the Securities Act, the General Partner may require an Optionholder, as a condition of exercising or acquiring Common Units under the Option, to give written assurances that he is an "accredited investor," as defined in the rules and regulations under the Securities Act. The General Partner may, upon advice of counsel to the General Partner, place legends on Common Units certificates issued under the Option as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Units.

(d) PARTNERSHIP AGREEMENT. Before receiving Common Units, the Optionholder shall take such action and execute such documents as the General Partner may require to become a partner of the Partnership.

IN WITNESS WHEREOF, this Option Agreement has been duly executed by the parties hereto as of the Date of Grant.

RIO VISTA ENERGY PARTNERS L.P.

By: RIO VISTA GP LLC, general partner

By: /s/ Ian T. Bothwell
    -----------------------------------
        Ian T. Bothwell, Treasurer

ACCEPTED AND AGREED:

SHORE CAPITAL LLC

By: /s/ Richard Shore, Jr.
   ----------------------------------
        Richard Shore, Jr., President

NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF

1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY
STATE. NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF REGISTRATION OR QUALIFICATION OR AN EXEMPTION THEREFROM UNDER APPLICABLE LAW.

COMMON STOCK PURCHASE WARRANT
Void after July 10, 2006

Warrant to Purchase 763,737 Shares
of Common Stock, $0.01 par value
of Penn Octane Corporation
Dated October 1, 2004

PENN OCTANE CORPORATION (POCC)

This is to Certify That, FOR VALUE RECEIVED,

Shore Capital, LLC, a California limited liability company,

or registered assign(s) (herein referred to as the "Holder") is entitled to purchase, subject to the provisions hereof, from PENN OCTANE CORPORATION, a Delaware corporation (the "Company"), but not later than 5:00 p.m., California time, on July 10, 2006 (or, if such date is not a Business Day in Palm Desert, California, then on the next succeeding day which shall be a Business Day), 763,737 shares of Common Stock, $0.01 par value, of the Company (the "Common Stock") at an exercise price of $1.14 per share, subject to adjustment as to number of shares and purchase price as set forth in Section 6 below. The exercise price of a share of Common Stock in effect at any time and as adjusted from time to time is hereinafter sometimes referred to as the "Exercise Price". For purposes of this Warrant, a "Business Day" shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York, or in Palm Desert, California, are authorized by law or regulation to close.

The shares of Common Stock issuable upon exercise of the Warrants are sometimes herein called the "Warrant Stock."

Common Stock Purchase Warrant

For purposes of this Warrant, the market price on any day shall be the last sale price on such day on the NASDAQ Stock Market, or, if the Common Stock is not then listed or admitted to trading on the NASDAQ Stock Market, on such other principal stock exchange on which such stock is then listed or admitted to trading, or, if no sale takes place on such day on any such

Common Stock Purchase Warrant

exchange, the average of the closing bid and asked prices on such day as officially quoted on any such exchange, or, if the Common Stock is not then listed or admitted to trading on any stock exchange, the average of the reported closing bid and asked prices on such day in the over-the-counter market as quoted on the National Association of Securities Dealers Automated Quotation System or, if not so quoted, then as furnished by any member of the National Association of Securities Dealers, Inc. selected by the Company. If there shall be no meaningful over-the-counter market, then Fair Market Value shall be such amount, not less than book value, as may be determined by the Board of Directors of the Company.

1. pays a dividend or makes a distribution on its Common Stock in shares of its Common Stock;

2. subdivides its outstanding shares of Common Stock into a greater number of shares;

3. combines its outstanding shares of Common Stock into a smaller number of shares;

4. makes a distribution on its Common Stock in shares of its capital stock other than Common Stock; or

5. issues by reclassification of its Common Stock any shares of its capital stock;

then the Exercise Price in effect immediately prior to such action shall be adjusted so that the Holder may receive, upon exercise or exchange of this Warrant and payment of the same aggregate consideration, the number of shares of capital stock of the Company which the Holder would have owned immediately following such action if the Holder had exercised or exchanged the Warrant immediately prior to such action.

Common Stock Purchase Warrant

The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification.

where:  E'     =  the adjusted Exercise Price.

        E      =  the Exercise Price immediately prior to the adjustment.

        M      =  the current market price (as defined in Section 4 above) per share of Common
                  Stock on the record date of the distribution.

        F      =  the aggregate fair market value (as conclusively determined by the Board of
                  Directors of the Company) on the record date of the assets or debt securities to be
                  distributed divided by the number of outstanding shares of Common Stock.

The adjustment shall be made successively whenever any such distribution is made and shall become effective immediately after the record date for the determination of shareholders entitled to receive the distribution. In the event that such distribution is not actually made, the Exercise Price shall again be adjusted to the Exercise Price as determined without giving effect to the calculation provided hereby. In no event shall the Exercise Price be adjusted to an amount less than zero.

In addition to the foregoing, the number of shares of capital stock of the Company which the holder is entitled to receive upon exercise of their Warrant shall be appropriately and equitably adjusted as determined by the Company's Board of Directors to make appropriate provision for any adjustments in the Exercise price made on account of the foregoing

This subsection does not apply to cash dividends or cash distributions paid out of consolidated current or retained earnings as shown on the books of the Company and paid in the ordinary course of business.

Common Stock Purchase Warrant

If the Company so defers making any such adjustment and if this Warrant is exercised after such record date but before the occurrence of such event, the shares of Common Stock and other capital stock of the Company, if any, issuable upon such exercise, had such adjustment been made as of the record date, over and above the shares of Common Stock or other capital stock of the Company, if any, issuable upon such exercise on the basis of the Exercise Price as unadjusted, shall be issued promptly following the occurrence of such event and the Company shall pay to the Holder by check any amount in lieu of the issuance of fractional shares pursuant to Section 4.

Common Stock Purchase Warrant

Common Stock Purchase Warrant

PENN OCTANE CORPORATION

By:/s/  Ian  T.  Bothwell
   ---------------------------------------
Name: Ian T. Bothwell
Title: Vice President, Chief  Financial
Officer

Common Stock Purchase Warrant

Dated __________ , ____

The undersigned hereby irrevocably elects to exercise the within Warrant to purchase ___________ shares of Common Stock and hereby makes payment of in payment of the exercise price thereof.

Signature______________________________

FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP

OF

RIO VISTA ENERGY PARTNERS L.P.

                                    TABLE OF CONTENTS

                                                                                        Page
ARTICLE I     DEFINITIONS                                                                  1
     SECTION 1.1    Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1
     SECTION 1.2    Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . .   20
ARTICLE II    ORGANIZATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   20
     SECTION 2.1    Formation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   20
     SECTION 2.2    Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   20
     SECTION 2.3    Registered Office; Registered Agent; Principal Office; Other
                    Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   20
     SECTION 2.4    Purpose and Business  . . . . . . . . . . . . . . . . . . . . . . .   20
     SECTION 2.5    Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   21
     SECTION 2.6    Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . .   21
     SECTION 2.7    Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   23
     SECTION 2.8    Title to Partnership Assets . . . . . . . . . . . . . . . . . . . .   23
ARTICLE III   RIGHTS OF LIMITED PARTNERS  . . . . . . . . . . . . . . . . . . . . . . .   24
     SECTION 3.1    Limitation of Liability . . . . . . . . . . . . . . . . . . . . . .   24
     SECTION 3.2    Management of Business. . . . . . . . . . . . . . . . . . . . . . .   24
     SECTION 3.3    Outside Activities of the Limited Partners  . . . . . . . . . . . .   24
     SECTION 3.4    Rights of Limited Partners. . . . . . . . . . . . . . . . . . . . .   24
ARTICLE IV    CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;
              REDEMPTION OF PARTNERSHIP INTERESTS . . . . . . . . . . . . . . . . . . .   25
     SECTION 4.1    Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . .   25
     SECTION 4.2    Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . .   25
     SECTION 4.3    Record Holders. . . . . . . . . . . . . . . . . . . . . . . . . . .   26
     SECTION 4.4    Transfer Generally  . . . . . . . . . . . . . . . . . . . . . . . .   27
     SECTION 4.5    Registration and Transfer of Limited Partner Interests. . . . . . .   27
     SECTION 4.6    Transfer of the General Partner's General Partner Interest. . . . .   28
     SECTION 4.7    Transfer of Incentive Distribution Rights . . . . . . . . . . . . .   29
     SECTION 4.8    Restrictions on Transfers . . . . . . . . . . . . . . . . . . . . .   29
     SECTION 4.9    Citizenship Certificates; Non-citizen Assignees . . . . . . . . . .   30
     SECTION 4.10   Redemption of Partnership Interests of Non-citizen Assignees. . . .   31


                                      -i-

                                    TABLE OF CONTENTS
                                       (continued)
                                                                                        Page

ARTICLE V     CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP
              INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   32
     SECTION 5.1    Organizational Contributions. . . . . . . . . . . . . . . . . . . .   32
     SECTION 5.2    Contributions by the General Partner and its Affiliates . . . . . .   32
     SECTION 5.3    Contributions by Initial Limited Partners and Distributions to the
                    General Partner . . . . . . . . . . . . . . . . . . . . . . . . . .   32
     SECTION 5.4    Interest and Withdrawal . . . . . . . . . . . . . . . . . . . . . .   33
     SECTION 5.5    Capital Accounts. . . . . . . . . . . . . . . . . . . . . . . . . .   33
     SECTION 5.6    Issuances of Additional Partnership Securities. . . . . . . . . . .   36
     SECTION 5.7    Limitations on Issuance of Additional Partnership Securities. . . .   36
     SECTION 5.8    [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   37
     SECTION 5.9    Limited Preemptive Right. . . . . . . . . . . . . . . . . . . . . .   37
     SECTION 5.10   Splits and Combinations . . . . . . . . . . . . . . . . . . . . . .   37
     SECTION 5.11   Fully Paid and Non-Assessable Nature of Limited Partner
                    Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   38
ARTICLE VI    ALLOCATIONS AND DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . .   38
     SECTION 6.1    Allocations for Capital Account Purposes. . . . . . . . . . . . . .   38
     SECTION 6.2    Allocations for Tax Purposes. . . . . . . . . . . . . . . . . . . .   45
     SECTION 6.3    Requirement and Characterization of Distributions; Distributions to
                    Record Holders. . . . . . . . . . . . . . . . . . . . . . . . . . .   47
     SECTION 6.4    Distributions of Available Cash from Operating Surplus. . . . . . .   48
     SECTION 6.5    Distributions of Available Cash from Capital Surplus. . . . . . . .   49
     SECTION 6.6    Adjustment of Minimum Quarterly Distribution and Target Distribution
                    Levels. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   49
     SECTION 6.7    [Reserved]  . . . . . . . . . . . . . . . . . . . . . . . . . . . .   49
     SECTION 6.8    Special Provisions Relating to the Holders of Incentive Distribution
                    Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   49
     SECTION 6.9    Entity-Level Taxation . . . . . . . . . . . . . . . . . . . . . . .   50
ARTICLE VII   MANAGEMENT AND OPERATION OF BUSINESS  . . . . . . . . . . . . . . . . . .   50
     SECTION 7.1    Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   50
     SECTION 7.2    Certificate of Limited Partnership. . . . . . . . . . . . . . . . .   52
     SECTION 7.3    Restrictions on the General Partner's Authority . . . . . . . . . .   53


                                      -ii-

                                    TABLE OF CONTENTS
                                       (continued)
                                                                                        Page

     SECTION 7.4    Reimbursement of the General Partner  . . . . . . . . . . . . . . .   53
     SECTION 7.5    Outside Activities. . . . . . . . . . . . . . . . . . . . . . . . .   54
     SECTION 7.6    Loans from the General Partner; Loans or Contributions from the
                    Partnership; Contracts with Affiliates; Certain Restrictions on the
                    General Partner . . . . . . . . . . . . . . . . . . . . . . . . . .   55
     SECTION 7.7    Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . .   57
     SECTION 7.8    Liability of Indemnitees. . . . . . . . . . . . . . . . . . . . . .   59
     SECTION 7.9    Resolution of Conflicts of Interest . . . . . . . . . . . . . . . .   59
     SECTION 7.10   Other Matters Concerning the General Partner. . . . . . . . . . . .   61
     SECTION 7.11   Purchase or Sale of Partnership Securities. . . . . . . . . . . . .   62
     SECTION 7.12   Registration Rights of the General Partner and its Affiliates . . .   62
     SECTION 7.13   Reliance by Third Parties . . . . . . . . . . . . . . . . . . . . .   64
ARTICLE VIII  BOOKS, RECORDS, ACCOUNTING AND REPORTS. . . . . . . . . . . . . . . . . .   65
     SECTION 8.1    Records and Accounting. . . . . . . . . . . . . . . . . . . . . . .   65
     SECTION 8.2    Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . .   65
     SECTION 8.3    Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   65
ARTICLE IX    TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   65
     SECTION 9.1    Tax Returns and Information . . . . . . . . . . . . . . . . . . . .   65
     SECTION 9.2    Tax Elections . . . . . . . . . . . . . . . . . . . . . . . . . . .   66
     SECTION 9.3    Tax Controversies . . . . . . . . . . . . . . . . . . . . . . . . .   66
     SECTION 9.4    Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . .   66
ARTICLE X     ADMISSION OF PARTNERS . . . . . . . . . . . . . . . . . . . . . . . . . .   67
     SECTION 10.1   Admission of Initial Limited Partners . . . . . . . . . . . . . . .   67
     SECTION 10.2   Admission of Substituted Limited Partner. . . . . . . . . . . . . .   67
     SECTION 10.3   Admission of Successor General Partner. . . . . . . . . . . . . . .   67
     SECTION 10.4   Admission of Additional Limited Partners. . . . . . . . . . . . . .   68
     SECTION 10.5   Amendment of Agreement and Certificate of Limited Partnership . . .   68
ARTICLE XI    WITHDRAWAL OR REMOVAL OF PARTNERS . . . . . . . . . . . . . . . . . . . .   68
     SECTION 11.1   Withdrawal of the General Partner . . . . . . . . . . . . . . . . .   68
     SECTION 11.2   Removal of the General Partner. . . . . . . . . . . . . . . . . . .   70


                                      -iii-

                                    TABLE OF CONTENTS
                                       (continued)
                                                                                        Page

     SECTION 11.3   Interest of Departing Partner and Successor General Partner . . . .   71
     SECTION 11.4   Withdrawal of Limited Partners. . . . . . . . . . . . . . . . . . .   72
ARTICLE XII   DISSOLUTION AND LIQUIDATION . . . . . . . . . . . . . . . . . . . . . . .   72
     SECTION 12.1   Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . .   72
     SECTION 12.2   Continuation of the Business of the Partnership After
                    Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . .   73
     SECTION 12.3   Liquidator. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   73
     SECTION 12.4   Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . .   74
     SECTION 12.5   Cancellation of Certificate of Limited Partnership  . . . . . . . .   75
     SECTION 12.6   Return of Contributions . . . . . . . . . . . . . . . . . . . . . .   75
     SECTION 12.7   Waiver of Partition . . . . . . . . . . . . . . . . . . . . . . . .   75
     SECTION 12.8   Capital Account Restoration . . . . . . . . . . . . . . . . . . . .   75
ARTICLE XIII  AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS;
              RECORD DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   75
     SECTION 13.1   Amendment to be Adopted Solely by the General Partner . . . . . . .   75
     SECTION 13.2   Amendment Procedures. . . . . . . . . . . . . . . . . . . . . . . .   77
     SECTION 13.3   Amendment Requirements  . . . . . . . . . . . . . . . . . . . . . .   78
     SECTION 13.4   Special Meetings. . . . . . . . . . . . . . . . . . . . . . . . . .   78
     SECTION 13.5   Notice of a Meeting . . . . . . . . . . . . . . . . . . . . . . . .   79
     SECTION 13.6   Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . .   79
     SECTION 13.7   Adjournment . . . . . . . . . . . . . . . . . . . . . . . . . . . .   79
     SECTION 13.8   Waiver of Notice; Approval of Meeting; Approval of Minutes  . . . .   79
     SECTION 13.9   Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   80
     SECTION 13.10  Conduct of a Meeting. . . . . . . . . . . . . . . . . . . . . . . .   80
     SECTION 13.11  Action Without a Meeting. . . . . . . . . . . . . . . . . . . . . .   80
     SECTION 13.12  Voting and Other Rights . . . . . . . . . . . . . . . . . . . . . .   81
ARTICLE XIV   MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   82
     SECTION 14.1   Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   82
     SECTION 14.2   Procedure for Merger or Consolidation . . . . . . . . . . . . . . .   82
     SECTION 14.3   Approval by Limited Partners of Merger or Consolidation. . . . . . .  83
     SECTION 14.4   Certificate of Merger . . . . . . . . . . . . . . . . . . . . . . .   84


                                      -iv-

                                    TABLE OF CONTENTS
                                       (continued)
                                                                                        Page

     SECTION 14.5   Effect of Merger. . . . . . . . . . . . . . . . . . . . . . . . . .   84
ARTICLE XV    GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . .   84
     SECTION 15.1   Addresses and Notices . . . . . . . . . . . . . . . . . . . . . . .   84
     SECTION 15.2   Further Action. . . . . . . . . . . . . . . . . . . . . . . . . . .   85
     SECTION 15.3   Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . .   85
     SECTION 15.4   Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . .   85
     SECTION 15.5   Creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   85
     SECTION 15.6   Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   85
     SECTION 15.7   Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . .   85
     SECTION 15.8   Applicable Law  . . . . . . . . . . . . . . . . . . . . . . . . . .   86
     SECTION 15.9   Invalidity of Provisions. . . . . . . . . . . . . . . . . . . . . .   86
     SECTION 15.10  Consent of Partners . . . . . . . . . . . . . . . . . . . . . . . .   86

FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
RIO VISTA ENERGY PARTNERS L.P.

THIS FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF RIO VISTA ENERGY PARTNERS L.P., dated as of September 16, 2004, is entered into by and among Rio Vista GP LLC, a Delaware limited liability company, as the General Partner, and Penn Octane Corporation, a Delaware corporation, as the Organizational Limited Partner, together with any other Persons who become Partners in the Partnership or parties hereto as provided herein. In consideration of the covenants, conditions and agreements contained herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

"Acquisition" means any transaction in which any Group Member acquires (through an asset acquisition, merger, stock acquisition or other form of investment) control over all or a portion of the assets, properties or business of another Person for the purpose of increasing the operating capacity or revenues of the Partnership Group from the operating capacity or revenues of the Partnership Group existing immediately prior to such transaction.

"Additional Book Basis" means the portion of any remaining Carrying Value of an Adjusted Property that is attributable to positive adjustments made to such Carrying Value as a result of Book-Up Events. For purposes of determining the extent that Carrying Value constitutes Additional Book Basis:

(a) Any negative adjustment made to the Carrying Value of an Adjusted Property as a result of either a Book-Down Event or a Book-Up Event shall first be deemed to offset or decrease that portion of the Carrying Value of such Adjusted Property that is attributable to any prior positive adjustments made thereto pursuant to a Book-Up Event or Book-Down Event.

(b) If Carrying Value that constitutes Additional Book Basis is reduced as a result of a Book-Down Event and the Carrying Value of other property is increased as a result of such Book-Down Event, an allocable portion of any such increase in Carrying Value shall be treated as Additional Book Basis; provided that the amount treated as Additional Book Basis pursuant hereto as a result of such Book-Down Event shall not exceed the amount by which the Aggregate Remaining Net Positive Adjustments after such Book-Down Event exceeds the remaining Additional Book Basis attributable to all of the Partnership's Adjusted Property after such Book-Down Event (determined without regard to the application of this clause (b) to such Book-Down Event).

"Additional Book Basis Derivative Items" means any Book Basis Derivative Items that are computed with reference to Additional Book Basis. To the extent that the Additional Book Basis attributable to all of the Partnership's Adjusted Property as of the beginning of any taxable period exceeds the Aggregate Remaining Net Positive Adjustments as of the beginning of such period (the "Excess Additional Book Basis"), the Additional Book Basis Derivative Items for such period shall be reduced by the amount that bears the same ratio to the amount of Additional Book Basis Derivative Items determined without regard to this sentence as the Excess Additional Book Basis bears to the Additional Book Basis as of the beginning of such period.

"Additional Limited Partner" means a Person admitted to the Partnership as a Limited Partner pursuant to Section 10.4 and who is shown as such on the books and records of the Partnership.

"Adjusted Capital Account" means the Capital Account maintained for each Partner as of the end of each fiscal year of the Partnership, (a) increased by any amounts that such Partner is obligated to restore under the standards set by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b) decreased by (i) the amount of all losses and deductions that, as of the end of such fiscal year, are reasonably expected to be allocated to such Partner in subsequent years under Sections 704(e)(2) and 706(d) of the Code and Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions that, as of the end of such fiscal year, are reasonably expected to be made to such Partner in subsequent years in accordance with the terms of this Agreement or otherwise to the extent they exceed offsetting increases to such Partner's Capital Account that are reasonably expected to occur during (or prior to) the year in which such distributions are reasonably expected to be made (other than increases as a result of a minimum gain chargeback pursuant to Section 6.1(d)(i) or 6.1(d)(ii)). The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. The "Adjusted Capital Account" of a Partner in respect of a General Partner Interest, a Common Unit or an Incentive Distribution Right or any other specified interest in the Partnership shall be the amount which such Adjusted Capital Account would be if such General Partner Interest, Common Unit, Incentive Distribution Right or other interest in the Partnership were the only interest in the Partnership held by such Partner from and after the date on which such General Partner Interest, Common Unit, Incentive Distribution Right or other interest was first issued.

"Adjusted Operating Surplus" means, with respect to any period, Operating Surplus generated during such period (a) less (i) any net increase in Working Capital Borrowings with respect to such period and (ii) any net reduction in cash reserves for Operating Expenditures with respect to such period not relating to an Operating Expenditure made during such period, and (b) plus (i) any net decrease in Working Capital Borrowings with respect to such period, and
(ii) any net increase in cash reserves for Operating Expenditures with respect to such period required by any debt instrument for the repayment of principal, interest or premium. Adjusted Operating Surplus does not include that portion of Operating Surplus included in clause (a)(i) of the definition of Operating Surplus.

"Adjusted Property" means any property the Carrying Value of which has been adjusted pursuant to Section 5.5(d)(i) or 5.5(d)(ii).

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

"Aggregate Remaining Net Positive Adjustments" means, as of the end of any taxable period, the sum of the Remaining Net Positive Adjustments of all the Partners.

"Agreed Allocation" means any allocation, other than a Required Allocation, of an item of income, gain, loss or deduction pursuant to the provisions of
Section 6.1, including, without limitation, a Curative Allocation (if appropriate to the context in which the term "Agreed Allocation" is used).

"Agreed Value" of any Contributed Property means the fair market value of such property or other consideration at the time of contribution as determined by the General Partner using such reasonable method of valuation as it may adopt. The General Partner shall, in its discretion, use such method as it deems reasonable and appropriate to allocate the aggregate Agreed Value of Contributed Properties contributed to the Partnership in a single or integrated transaction among each separate property on a basis proportional to the fair market value of each Contributed Property. With respect to the Contributed Property deemed contributed to the Partnership by an Initial Limited Partner (as described in the definition of Contributed Property), the Agreed Value shall be the value assigned for federal income tax purposes by the General Partner (in its reasonable discretion) to such Contributed Property.

"Agreement" means this First Amended and Restated Agreement of Limited Partnership of Rio Vista Energy Partners L.P., as it may be amended, supplemented or restated from time to time.

"Assignee" means a Non-citizen Assignee or a Person to whom one or more Limited Partner Interests have been transferred in a manner permitted under this Agreement and who has executed and delivered a Transfer Application as required by this Agreement, but who has not been admitted as a Substituted Limited Partner.

"Associate" means, when used to indicate a relationship with any Person,
(a) any corporation or organization of which such Person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of voting stock or other voting interest; (b) any trust or other estate in which such Person has at least a 20% beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of such Person, or any relative of such spouse, who has the same principal residence as such Person.

"Available Cash" means, with respect to any Quarter ending prior to the Liquidation Date:

(a) the sum of (i) all cash and cash equivalents of the Partnership Group on hand at the end of such Quarter, and (ii) all additional cash and cash equivalents of the Partnership Group on hand on the date of determination of Available Cash with respect to such Quarter resulting from Working Capital Borrowings made subsequent to the end of such Quarter, less

(b) the amount of any cash reserves that are necessary or appropriate in the reasonable discretion of the General Partner to (i) provide for the proper conduct of the business of the Partnership Group (including reserves for future capital expenditures and for anticipated future credit needs of the Partnership Group) subsequent to such Quarter,
(ii) comply with applicable law or any loan agreement, security agreement, mortgage, debt instrument or other agreement or obligation to which any Group Member is a party or by which it is bound or its assets are subject or (iii) provide funds for distributions under
Section 6.4 or 6.5 in respect of any one or more of the next four Quarters; provided, however, that the General Partner may not establish cash reserves pursuant to (iii) above if the effect of such reserves would be that the Partnership is unable to distribute the Minimum Quarterly Distribution on all Common Units, plus any Cumulative Common Unit Arrearage on all Common Units, with respect to such Quarter; and, provided further, that disbursements made by a Group Member or cash reserves established, increased or reduced after the end of such Quarter but on or before the date of determination of Available Cash with respect to such Quarter shall be deemed to have been made, established, increased or reduced, for purposes of determining Available Cash, within such Quarter if the General Partner so determines.

Notwithstanding the foregoing, "Available Cash" with respect to the Quarter in which the Liquidation Date occurs and any subsequent Quarter shall equal zero.

"Book Basis Derivative Items" means any item of income, deduction, gain or loss included in the determination of Net Income or Net Loss that is computed with reference to the Carrying Value of an Adjusted Property (e.g., depreciation, depletion, or gain or loss with respect to an Adjusted Property).

"Book-Down Event" means an event which triggers a negative adjustment to the Capital Accounts of the Partners pursuant to Section 5.5(d).

"Book-Tax Disparity" means with respect to any item of Contributed Property or Adjusted Property, as of the date of any determination, the difference between the Carrying Value of such Contributed Property or Adjusted Property and the adjusted basis thereof for federal income tax purposes as of such date. A Partner's share of the Partnership's Book-Tax Disparities in all of its Contributed Property and Adjusted Property will be reflected by the difference between such Partner's Capital Account balance as maintained pursuant to Section 5.5 and the hypothetical balance of such Partner's Capital Account computed as if it had been maintained strictly in accordance with federal income tax accounting principles.

"Book-Up Event" means an event which triggers a positive adjustment to the Capital Accounts of the Partners pursuant to Section 5.5(d).

"Business" has the meaning assigned to such term in the Omnibus Agreement.

"Business Day" means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the United States of America or the State of Texas shall not be regarded as a Business Day.

"Capital Account" means the capital account maintained for a Partner pursuant to Section 5.5. The "Capital Account" of a Partner in respect of a General Partner Interest, a Common Unit, an Incentive Distribution Right or any other Partnership Interest shall be the amount which such Capital Account would be if such General Partner Interest, Common Unit, Distribution Right or other Partnership Interest were the only interest in the Partnership held by such Partner from and after the date on which such General Partner Interest, Common Unit, Incentive Distribution Right or other Partnership Interest was first issued.

"Capital Contribution" means any cash, cash equivalents or the Net Agreed Value of Contributed Property that a Partner contributes to the Partnership pursuant to this Agreement or the Contribution Agreement.

"Capital Improvement" means any (a) addition or improvement to the capital assets owned by any Group Member or (b) acquisition of existing, or the construction of new, capital assets (including, without limitation, LPG transportation, storage facilities and logistics assets, and related assets), in each case if such addition, improvement, acquisition or construction is made to increase the operating capacity or revenues of the Partnership Group from the operating capacity or revenues of the Partnership Group existing immediately prior to such addition, improvement, acquisition or construction.

"Capital Surplus" has the meaning assigned to such term in Section 6.3(a).

"Carrying Value" means (a) with respect to a Contributed Property, the Agreed Value of such property reduced (but not below zero) by all depreciation, amortization and cost recovery deductions charged to the Partners' and Assignees' Capital Accounts in respect of such Contributed Property, and (b) with respect to any other Partnership property, the adjusted basis of such property for federal income tax purposes, all as of the time of determination. The Carrying Value of any property shall be adjusted from time to time in accordance with Sections 5.5(d)(i) and 5.5(d)(ii) and to reflect changes, additions or other adjustments to the Carrying Value for dispositions and acquisitions of Partnership properties, as deemed appropriate by the General Partner.

"Cause" means a court of competent jurisdiction has entered a final, non-appealable judgment finding the General Partner liable for actual fraud, gross negligence or willful or wanton misconduct in its capacity as a general partner of the Partnership.

"Certificate" means a certificate (i) substantially in the form of Exhibit A to this Agreement, (ii) issued in global form in accordance with the rules and regulations of the

Depositary or (iii) in such other form as may be adopted by the General Partner in its discretion, issued by the Partnership evidencing ownership of one or more Common Units or a certificate, in such form as may be adopted by the General Partner in its discretion, issued by the Partnership evidencing ownership of one or more other Partnership Securities.

"Certificate of Limited Partnership" means the Certificate of Limited Partnership of the Partnership filed with the Secretary of State of the State of Delaware as such Certificate of Limited Partnership may be amended, supplemented or restated from time to time.

"Citizenship Certification" means a properly completed certificate in such form as may be specified by the General Partner by which a Limited Partner or an Assignee certifies that he (and if he is a nominee holding for the account of another Person, that to the best of his knowledge such other Person) is an Eligible Citizen.

"Claim" has the meaning assigned to such term in Section 7.12(c).

"Closing Date" means the date of the Distribution.

"Closing Price" means the last sale price on such day, regular way, or in case no such sale takes place on such day, the average of the closing bid and asked prices on such day, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted for trading on the principal National Securities Exchange (other than the Nasdaq Stock Market) on which such Limited Partner Interests of such class are listed or admitted to trading or, if such Limited Partner Interests of such class are not listed or admitted to trading on any National Securities Exchange (other than the Nasdaq Stock Market), the last quoted price on such day or, if not so quoted, the average of the high bid and low asked prices on such day in the over-the-counter market, as reported by the Nasdaq Stock Market or such other system then in use, or, if on any such day such Limited Partner Interests of such class are not quoted by any such organization, the average of the closing bid and asked prices on such day as furnished by a professional market maker making a market in such Limited Partner Interests of such class selected by the General Partner, or if on any such day no market maker is making a market in such Limited Partner Interests of such class, the fair value of such Limited Partner Interests on such day as determined reasonably and in good faith by the General Partner.

"Code" means the Internal Revenue Code of 1986, as amended and in effect from time to time. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law.

"Combined Interest" has the meaning assigned to such term in Section 11.3(a).

"Commission" means the United States Securities and Exchange Commission.

"Common Unit" means a Partnership Security representing a fractional part of the Partnership Interests of all Limited Partners and Assignees and of the General Partner, and having the rights and obligations specified with respect to Common Units in this Agreement.

"Common Unit Arrearage" means, with respect to any Common Unit, whenever issued, the excess, if any, of (a) the Minimum Quarterly Distribution with respect to a Common Unit in respect of such Quarter over (b) the sum of all Available Cash distributed with respect to a Common Unit in respect of such Quarter pursuant to Section 6.4(a)(i).

"Conflicts Committee" means a committee of the Board of Managers of the General Partner composed entirely of three or more managers who are not (a) security holders, officers or employees of the General Partner, (b) officers, directors or employees of any Affiliate of the General Partner or (c) holders of any ownership interest in the Partnership Group other than Common Units and who also meet the independence standards required to serve on an audit committee of a board of directors by the National Securities Exchange on which the Common Units are listed for trading.

"Contributed Property" means each property or other asset, in such form as may be permitted by the Delaware Act, but excluding cash, contributed to the Partnership. Once the Carrying Value of a Contributed Property is adjusted pursuant to Section 5.5(d), such property shall no longer constitute a Contributed Property, but shall be deemed an Adjusted Property. For purposes of this definition, each Limited Partner who receives Initial Common Units in the Distribution shall be treated as having received a distribution of an undivided interest in the assets contributed pursuant to the Contribution Agreement by Penn Octane Corporation to the Partnership, subject to applicable liabilities described in the Contribution Agreement, followed immediately thereafter by a contribution of the Partner's undivided interest in such assets subject to applicable liabilities, to the Partnership in exchange for the Partner's Initial Common Units received in the Distribution. For this purpose, each Limited Partner's undivided interest in the assets expressed as a percentage shall be the same percentage as the Limited Partner's Percentage Interest determined immediately following the Distribution.

"Contribution Agreement" means that certain Contribution, Conveyance and Assumption Agreement, dated as of September 16, 2004, among the General Partner, the Partnership, the Operating Partnership, Penn Octane Corporation and certain other Affiliates of Penn Octane Corporation, together with the additional conveyance documents and instruments contemplated or referenced thereunder.

"Controlled Person" means any corporation or partnership of which the Partnership or any Subsidiary owns or controls an interest in excess of 25%.

"Cumulative Common Unit Arrearage" means, with respect to any Common Unit, whenever issued, and as of the end of any Quarter, the excess, if any, of (a) the sum resulting from adding together the Common Unit Arrearage as to an Initial Common Unit for each Quarter ending on or before the last day of such Quarter over (b) the sum of any distributions theretofore made pursuant to
Section 6.4(a)(ii) and the second sentence of Section 6.5 with respect to an Initial Common Unit (including any distributions to be made in respect of the last of such Quarters).

"Curative Allocation" means any allocation of an item of income, gain, deduction, loss or credit pursuant to the provisions of Section 6.1(d)(x).

"Current Market Price" as of any date of any class of Limited Partner Interests means the average of the daily Closing Prices per Limited Partner Interest of such class for the 20 consecutive Trading Days immediately prior to such date.

"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. Section 17-101, et seq., as amended, supplemented or restated from time to time, and any successor to such statute.

"Departing Partner" means a former General Partner from and after the effective date of any withdrawal or removal of such former General Partner pursuant to Section 11.1 or 11.2.

"Depositary" means, with respect to any Units issued in global form, The Depository Trust Company and its successors and permitted assigns.

"Distribution" means the pro rata distribution by Penn Octane Corporation of its 98% Limited Partner Interest representing 98% of the Common Units to the stockholders of Penn Octane Corporation, as described in the Registration Statement.

"Economic Risk of Loss" has the meaning set forth in Treasury Regulation
Section 1.752-2(a).

"Eligible Citizen" means a Person who is (i) qualified to own interests in real property in jurisdictions in which any Group Member does business or proposes to do business from time to time, and whose status as a Limited Partner or Assignee does not or would not subject such Group Member to a significant risk of cancellation or forfeiture of any of its properties or any interest therein and (ii) is not a Non-citizen.

"Event of Withdrawal" has the meaning assigned to such term in Section 11.1(a).

"First Liquidation Target Amount" has the meaning assigned to such term in
Section 6.1(c)(i)(C).

"First Target Distribution" means $0.292 per Unit per Quarter (or, with respect to the period commencing on the Closing Date and ending on the last day of the calendar quarter that includes the Closing Date, it means the product of $0.292 multiplied by a fraction of which the numerator is the number of days in such period, and of which the denominator is 91), subject to adjustment in accordance with Sections 6.6 and 6.9.

"Fully Diluted Basis" means, when calculating the number of Outstanding Units for any period, a basis that includes, in addition to the Outstanding Units, all Partnership Securities and options, rights, warrants and appreciation rights relating to an equity interest in the Partnership (a) that are convertible into or exercisable or exchangeable for Units that are senior to or pari passu with the Common Units, (b) whose conversion, exercise or exchange price is less than the Current Market Price on the date of such calculation, (c) that may be converted into or exercised or exchanged for such Units prior to or during the Quarter following the end of the last Quarter contained in the period for which the calculation is being made without the satisfaction of any contingency beyond the control of the holder other than the payment of consideration and the

compliance with administrative mechanics applicable to such conversion, exercise or exchange, and (d) were not converted into or exercised or exchanged for such Units prior to the end of the last quarter referred to in clause (c) above.

"General Partner" means Rio Vista GP LLC and its successors and permitted assigns as general partner of the Partnership.

"General Partner Interest" means the ownership interest of the General Partner in the Partnership (in its capacity as a general partner without reference to any Limited Partner Interest held by it) which may be evidenced by Partnership Securities or a combination thereof or interest therein, and includes any and all benefits to which the General Partner is entitled as provided in this Agreement, together with all obligations of the General Partner to comply with the terms and provisions of this Agreement.

"Group" means a Person that with or through any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent given to such Person in response to a proxy or consent solicitation made to 10 or more Persons) or disposing of any Partnership Securities with any other Person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or indirectly, Partnership Securities.

"Group Member" means a member of the Partnership Group.

"Holder" as used in Section 7.12, has the meaning assigned to such term in
Section 7.12(a).

"Incentive Distribution Right" means a non-voting Limited Partner Interest issued to the General Partner in exchange for the conveyance by the General Partner of $1,000 to the Partnership pursuant to Section 5.2, which Partnership Interest will confer upon the holder thereof only the rights and obligations specifically provided in this Agreement with respect to Incentive Distribution Rights (and no other rights otherwise available to or other obligations of a holder of a Partnership Interest). Notwithstanding anything in this Agreement to the contrary, the holder of an Incentive Distribution Right shall not be entitled to vote such Incentive Distribution Right on any Partnership matter except as may otherwise be required by law.

"Incentive Distributions" means any amount of cash distributed to the holders of the Incentive Distribution Rights pursuant to Sections 6.4(a)(iv),
(v), and (vi).

"Indemnified Persons" has the meaning assigned to such term in Section 7.12(c).

"Indemnitee" means (a) the General Partner, (b) any Departing Partner, (c) any Person who is or was an Affiliate of the General Partner or any Departing Partner, (d) any Person who is or was a member, partner, officer, director, employee, manager, agent or trustee of any Group Member, the General Partner or any Departing Partner or any Affiliate of any Group Member, the General Partner or any Departing Partner, and (e) any Person who is or was serving at the request of the General Partner or any Departing Partner or any Affiliate of the General Partner or any Departing Partner as an officer, director, employee, member, manager, partner, agent,

fiduciary or trustee of another Person; provided, that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services.

"Initial Common Units" means the Common Units distributed in the Distribution.

"Initial Limited Partners" means the General Partner and the stockholders of Penn Octane Corporation that receive Initial Common Units in the Distribution, in each case upon being admitted to the Partnership in accordance with Section 10.1.

"Initial Unit Capital Account" means (a) with respect to each Initial Limited Partner, the value assigned for federal income tax purposes by the General Partner (in its reasonable discretion) to the Contributed Property contributed by an Initial Limited Partner to the Partnership (as described in the definition of Contributed Property) in exchange for the Initial Common Units, reduced by the amount of liabilities to which such property is subject as determined by the General Partner in its reasonable discretion or (b) with respect to any other class or series of Units, the price per Unit at which such class or series of Units is initially sold by the Partnership, as determined by the General Partner, in each case adjusted as the General Partner determines to be appropriate to give effect to any distribution, subdivision or combination of Units.

"Interim Capital Transactions" means the following transactions if they occur prior to the Liquidation Date: (a) borrowings, refinancings or refundings of indebtedness and sales of debt securities (other than Working Capital Borrowings and other than for items purchased on open account in the ordinary course of business) by any Group Member; (b) sales of equity interests by any Group Member; and (c) sales or other voluntary or involuntary dispositions of any assets of any Group Member other than (i) sales or other dispositions of inventory, accounts receivable and other assets in the ordinary course of business, and (ii) sales or other dispositions of assets as part of normal retirements or replacements.

"Issue Price" means the price at which a Unit is purchased from the Partnership, after taking into account any sales commission or underwriting discount charged to the Partnership.

"Limited Partner" means, unless the context otherwise requires, (a) the Organizational Limited Partner prior to the Distribution, each Initial Limited Partner, each Substituted Limited Partner, each Additional Limited Partner and any Departing Partner upon the change of its status from General Partner to Limited Partner pursuant to Section 11.3 or (b) solely for purposes of Articles V, VI, VII and IX, each Assignee; provided, however, that when the term "Limited Partner" is used herein in the context of any vote or other approval, including without limitation Articles XIII and XIV, such term shall not, solely for such purpose, include any holder of an Incentive Distribution Right except as may otherwise be required by law.

"Limited Partner Interest" means the ownership interest of a Limited Partner or Assignee in the Partnership, which may be evidenced by Common Units, Incentive Distribution Rights or other Partnership Securities or a combination thereof or interest therein, and includes any and all benefits to which such Limited Partner or Assignee is entitled as provided in this Agreement, together with all obligations of such Limited Partner or Assignee to comply with the terms and

provisions of this Agreement; provided, however, that when the term "Limited Partner Interest" is used herein in the context of any vote or other approval, including without limitation Articles XIII and XIV, such term shall not, solely for such purpose, include any holder of an Incentive Distribution Right except as may otherwise be required by law.

"Liquidation Date" means (a) in the case of an event giving rise to the dissolution of the Partnership of the type described in clauses (a) and (b) of the first sentence of Section 12.2, the date on which the applicable time period during which the holders of Outstanding Units have the right to elect to reconstitute the Partnership and continue its business has expired without such an election being made, and (b) in the case of any other event giving rise to the dissolution of the Partnership, the date on which such event occurs.

"Liquidator" means one or more Persons selected by the General Partner to perform the functions described in Section 12.3 as liquidating trustee of the Partnership within the meaning of the Delaware Act.

"Minimum Quarterly Distribution" means $0.25 per Unit per Quarter (or with respect to the period commencing on the Closing Date and ending on the last day of the calendar quarter that includes the Closing Date, it means the product of $0.25 multiplied by a fraction of which the numerator is the number of days in such period and of which the denominator is 91), subject to adjustment in accordance with Sections 6.6 and 6.9.

"National Securities Exchange" means an exchange registered with the Commission under Section 6(a) of the Securities Exchange Act of 1934, as amended, supplemented or restated from time to time, and any successor to such statute, or the Nasdaq Stock Market or any successor thereto.

"Net Agreed Value" means, (a) in the case of any Contributed Property, the Agreed Value of such property reduced by any liabilities either assumed by the Partnership upon such contribution or to which such property is subject when contributed, and (b) in the case of any property distributed to a Partner or Assignee by the Partnership, the Partnership's Carrying Value of such property (as adjusted pursuant to Section 5.5(d)(ii)) at the time such property is distributed, reduced by any indebtedness either assumed by such Partner or Assignee upon such distribution or to which such property is subject at the time of distribution, in either case, as determined under Section 752 of the Code.

"Net Income" means, for any taxable year, the excess, if any, of the Partnership's items of income and gain (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable year over the Partnership's items of loss and deduction (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable year. The items included in the calculation of Net Income shall be determined in accordance with Section 5.5(b) and shall not include any items specially allocated under Section 6.1(d); provided that the determination of the items that have been specially allocated under Section 6.1(d) shall be made as if Section 6.1(d)(xi) were not in this Agreement.

"Net Loss" means, for any taxable year, the excess, if any, of the Partnership's items of loss and deduction (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable year over the Partnership's items of income and gain (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable year. The items included in the calculation of Net Loss shall be determined in accordance with Section 5.5(b) and shall not include any items specially allocated under Section 6.1(d); provided that the determination of the items that have been specially allocated under Section 6.1(d) shall be made as if Section 6.1(d)(xi) were not in this Agreement.

"Net Positive Adjustments" means, with respect to any Partner, the excess, if any, of the total positive adjustments over the total negative adjustments made to the Capital Account of such Partner pursuant to Book-Up Events and Book-Down Events.

"Net Termination Gain" means, for any taxable year, the sum, if positive, of all items of income, gain, loss or deduction recognized by the Partnership after the Liquidation Date. The items included in the determination of Net Termination Gain shall be determined in accordance with Section 5.5(b) and shall not include any items of income, gain or loss specially allocated under Section 6.1(d).

"Net Termination Loss" means, for any taxable year, the sum, if negative, of all items of income, gain, loss or deduction recognized by the Partnership after the Liquidation Date. The items included in the determination of Net Termination Loss shall be determined in accordance with Section 5.5(b) and shall not include any items of income, gain or loss specially allocated under Section 6.1(d).

"Non-citizen" means (1) any person (including any individual, a partnership, a corporation or an association) who is not a United States citizen, within the meaning of Section 2 of the Shipping Act, 1916, as amended or as it may hereafter be amended; (2) any foreign government or representative thereof; (3) any corporation, the president, chief executive officer or chairman of the board of directors of which is a Non-citizen, or of which more than a minority or the number of its directors necessary to constitute a quorum are Non-citizens; (4) any corporation organized under the laws of any foreign government; (5) any corporation of which 25% or greater interest is owned beneficially or of record, or may be voted by, a Non-citizen or Non-citizens, or which by any other means whatsoever is controlled by or in which control is permitted to be exercised by a Non-citizen or Non-citizens (the General Partner being authorized to determine reasonably the meaning of "control" for this purpose); (6) any partnership or association which is controlled by a Non-citizen or Non-citizens; or (7) any person (including an individual, partnership, corporation or association) who acts as representative of or fiduciary for any person described in clauses (1) through (6) above.

"Non-citizen Assignee" means a Person whom the General Partner has determined in its discretion does not constitute an Eligible Citizen and as to whose Partnership Interest the General Partner has become the Substituted Limited Partner pursuant to Section 4.9.

"Nonrecourse Built-in Gain" means with respect to any Contributed Properties or Adjusted Properties that are subject to a mortgage or pledge securing a Nonrecourse Liability, the amount of any taxable gain that would be allocated to the Partners pursuant to Sections 6.2(b)(i)(A), 6.2(b)(ii)(A) and 6.2(b)(iii) if such properties were disposed of in a taxable transaction in full satisfaction of such liabilities and for no other consideration.

"Nonrecourse Deductions" means any and all items of loss, deduction or expenditure (including, without limitation, any expenditure described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(b), are attributable to a Nonrecourse Liability.

"Nonrecourse Liability" has the meaning set forth in Treasury Regulation
Section 1.752-1(a)(2).

"Notice of Election to Purchase" has the meaning assigned to such term in
Section 15.1(b).

"Omnibus Agreement" means that Omnibus Agreement, dated as of the Closing Date, among Penn Octane Corporation, the General Partner, the Partnership and the Operating Partnership.

"Operating Expenditures" means all Partnership Group expenditures, including, but not limited to, taxes, reimbursements of the General Partner, repayment of Working Capital Borrowings, debt service payments and capital expenditures, subject to the following:

(a) Payments (including prepayments) of principal of and premium on indebtedness other than Working Capital Borrowings shall not constitute Operating

(b) Operating Expenditures shall not include (i) capital expenditures made for Acquisitions or for Capital Improvements, (ii) payment of transaction expenses relating to Interim Capital Transactions or (iii) distributions to Partners. Where capital expenditures are made in part for Acquisitions or for Capital Improvements and in part for other purposes, the General Partner's good faith allocation between the amounts paid for each shall be conclusive.

"Operating Partnership" means Rio Vista Operating Partnership L.P., a Delaware limited partnership, and any successors thereto.

"Operating Partnership Agreement" means the Partnership Agreement of the Operating Partnership, as it may be amended, supplemented or restated from time to time.

"Operating Surplus" means, with respect to any period ending prior to the Liquidation Date, on a cumulative basis and without duplication,

(a) the sum of (i) all cash and cash equivalents of the Partnership Group on hand as of the close of business on the Closing Date, (ii) all cash receipts of the Partnership Group for the period beginning on the Closing Date and ending with the last day

of such period, other than cash receipts from Interim Capital Transactions (except to the extent specified in Section 6.5) and (iii) all cash receipts of the Partnership Group after the end of such period but on or before the date of determination of Operating Surplus with respect to such period resulting from Working Capital Borrowings, less

(b) the sum of (i) Operating Expenditures for the period beginning on the Closing Date and ending with the last day of such period and (ii) the amount of cash reserves that is necessary or advisable in the reasonable discretion of the General Partner to provide funds for future Operating Expenditures; provided, however, that disbursements made (including contributions to a Group Member or disbursements on behalf of a Group Member) or cash reserves established, increased or reduced after the end of such period but on or before the date of determination of Available Cash with respect to such period shall be deemed to have been made, established, increased or reduced, for purposes of determining Operating Surplus, within such period if the General Partner so determines.

Notwithstanding the foregoing, "Operating Surplus" with respect to the Quarter in which the Liquidation Date occurs and any subsequent Quarter shall equal zero.

"Opinion of Counsel" means a written opinion of counsel (who may be regular counsel to the Partnership or the General Partner or any of its Affiliates) acceptable to the General Partner in its reasonable discretion.

"Organizational Limited Partner" means Penn Octane Corporation in its capacity as the organizational limited partner of the Partnership pursuant to this Agreement.

"Outstanding" means, with respect to Partnership Securities, all Partnership Securities that are issued by the Partnership and reflected as outstanding on the Partnership's books and records as of the date of determination; provided, however, that if at any time any Person or Group (other than the General Partner or its Affiliates) beneficially owns 20% or more of any Outstanding Partnership Securities of any class then Outstanding, all Partnership Securities owned by such Person or Group shall not be voted on any matter and shall not be considered to be Outstanding when sending notices of a meeting of Limited Partners to vote on any matter (unless otherwise required by law), calculating required votes, determining the presence of a quorum or for other similar purposes under this Agreement, except that Common Units so owned shall be considered to be Outstanding for purposes of Section 11.1(b)(iv) (such Common Units shall not, however, be treated as a separate class of Partnership Securities for purposes of this Agreement); provided, further, that the foregoing limitation shall not apply (i) to any Person or Group who acquired 20% or more of any Outstanding Partnership Securities of any class then Outstanding directly from the General Partner or its Affiliates, including any Person or Group who acquired 20% or more of any Outstanding Partnership Securities in the Distribution, (ii) to any Person or Group who acquired 20% or more of any Outstanding Partnership Securities of any class then Outstanding directly or indirectly from a Person or Group described in clause (i) provided that the General Partner shall have notified such Person or Group in writing that such limitation shall not apply, or (iii) to any Person or Group who acquired 20% or more of any

Partnership Securities issued by the Partnership with the prior approval of the Board of Managers of the General Partner; provided further, that the provisions contained herein may be amended by the General Partner as provided in Section 13.1 hereof.

"Partner Nonrecourse Debt" has the meaning set forth in Treasury Regulation
Section 1.704-2(b)(4).

"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in Treasury Regulation Section 1.704-2(i)(2).

"Partner Nonrecourse Deductions" means any and all items of loss, deduction or expenditure (including, without limitation, any expenditure described in
Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(i), are attributable to a Partner Nonrecourse Debt.

"Partners" means the General Partner and the Limited Partners.

"Partnership" means Rio Vista Energy Partners L.P., a Delaware limited partnership, and any successors thereto.

"Partnership Group" means the Partnership, the Operating Partnership and any Subsidiary of any such entity, treated as a single consolidated entity.

"Partnership Interest" means an interest in the Partnership, which shall include the General Partner Interest and Limited Partner Interests.

"Partnership Minimum Gain" means that amount determined in accordance with the principles of Treasury Regulation Section 1.704-2(d).

"Partnership Security" means any class or series of equity interest in the Partnership (but excluding any options, rights, warrants and appreciation rights relating to an equity interest in the Partnership), including without limitation, Common Units and Incentive Distribution Rights.

"Percentage Interest" means as of any date of determination (a) as to the General Partner (in its capacity as General Partner without reference to any Limited Partner Interests held by it), 2.0%, (b) as to any Unitholder or Assignee holding Units, the product obtained by multiplying (i) 98% less the percentage applicable to paragraph (c) by (ii) the quotient obtained by dividing (A) the number of Units held by such Unitholder or Assignee by (B) the total number of all Outstanding Units, and (c) as to the holders of additional Partnership Securities issued by the Partnership in accordance with Section 5.6, the percentage established as a part of such issuance. The Percentage Interest with respect to an Incentive Distribution Right shall at all times be zero.

"Per Unit Capital Amount" means, as of any date of determination, the Capital Account, stated on a per Unit basis, underlying any Unit held by a Person other than the General Partner or any Affiliate of the General Partner who holds Units.

"Person" means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.

"Pro Rata" means (a) when modifying Units or any class thereof, apportioned equally among all designated Units in accordance with their relative Percentage Interests, (b) when modifying Partners and Assignees, apportioned among all Partners and Assignees in accordance with their relative Percentage Interests and (c) when modifying holders of Incentive Distribution Rights, apportioned equally among all holders of Incentive Distribution Rights in accordance with the relative number of Incentive Distribution Rights held by each such holder.

"Purchase Date" means the date determined by the General Partner as the date for purchase of all Outstanding Units of a certain class (other than Units owned by the General Partner and its Affiliates) pursuant to Article XV.

"Quarter" means, unless the context requires otherwise, a fiscal quarter, or, with respect to the first fiscal quarter after the Closing Date, the portion of such fiscal quarter after the Closing Date, of the Partnership.

"Recapture Income" means any gain recognized by the Partnership (computed without regard to any adjustment required by Section 734 or Section 743 of the Code) upon the disposition of any property or asset of the Partnership, which gain is characterized as ordinary income because it represents the recapture of deductions previously taken with respect to such property or asset.

"Record Date" means the date established by the General Partner for determining (a) the identity of the Record Holders entitled to notice of, or to vote at, any meeting of Limited Partners or entitled to vote by ballot or give approval of Partnership action in writing without a meeting or entitled to exercise rights in respect of any lawful action of Limited Partners or (b) the identity of Record Holders entitled to receive any report or distribution or to participate in any offer.

"Record Holder" means the Person in whose name a Common Unit is registered on the books of the Transfer Agent as of the opening of business on a particular Business Day, or with respect to other Partnership Securities, the Person in whose name any such other Partnership Security is registered on the books which the General Partner has caused to be kept as of the opening of business on such Business Day.

"Redeemable Interests" means any Partnership Interests for which a redemption notice has been given, and has not been withdrawn, pursuant to
Section 4.10.

"Registration Statement" means the Registration Statement on Form 10 (File No. 0-50394) as it has been or as it may be amended or supplemented from time to time, filed by the Partnership with the Commission under the Securities Act to register the Common Units distributed in the Distribution.

"Remaining Net Positive Adjustments" means as of the end of any taxable period, (i) with respect to the Unitholders holding Common Units, the excess of
(a) the Net Positive

Adjustments of the Unitholders holding Common Units as of the end of such period over (b) the sum of those Partners' Share of Additional Book Basis Derivative Items for each prior taxable period, (ii) with respect to the General Partner (as holder of the General Partner Interest), the excess of (a) the Net Positive Adjustments of the General Partner as of the end of such period over (b) the sum of the General Partner's Share of Additional Book Basis Derivative Items with respect to the General Partner Interest for each prior taxable period, and (iii) with respect to the holders of Incentive Distribution Rights, the excess of (a) the Net Positive Adjustments of the holders of Incentive Distribution Rights as of the end of such period over (b) the sum of the Share of Additional Book Basis Derivative Items of the holders of the Incentive Distribution Rights for each prior taxable period.

"Required Allocations" means (a) any limitation imposed on any allocation of Net Losses or Net Termination Losses under Section 6.1(b) and (b) any allocation of an item of income, gain, loss or deduction pursuant to Section 6.1(d)(i), 6.1(d)(ii), 6.1(d)(iv), 6.1(d)(vii), 6.1(d)(ix) or 6.1(d)(x).

"Residual Gain" or "Residual Loss" means any item of gain or loss, as the case may be, of the Partnership recognized for federal income tax purposes resulting from a sale, exchange or other disposition of a Contributed Property or Adjusted Property, to the extent such item of gain or loss is not allocated pursuant to Section 6.2(b)(i)(A) or 6.2(b)(ii)(A), respectively, to eliminate Book-Tax Disparities.

"Second Liquidation Target Amount" has the meaning assigned to such term in
Section 6.1(c)(i)(D).

"Second Target Distribution" means $0.362 per Unit per Quarter (or, with respect to the period commencing on the Closing Date and ending on the last day of the calendar quarter that includes the Closing Date, it means the product of $0.362 multiplied by a fraction of which the numerator is equal to the number of days in such period and of which the denominator is 91), subject to adjustment in accordance with Sections 6.6 and 6.9.

"Securities Act" means the Securities Act of 1933, as amended, supplemented or restated from time to time and any successor to such statute.

"Share of Additional Book Basis Derivative Items" means in connection with any allocation of Additional Book Basis Derivative Items for any taxable period,
(i) with respect to the Unitholders holding Common Units, the amount that bears the same ratio to such Additional Book Basis Derivative Items as the Unitholders' Remaining Net Positive Adjustments as of the end of such period bears to the Aggregate Remaining Net Positive Adjustments as of that time, (ii) with respect to the General Partner (as holder of the General Partner Interest), the amount that bears the same ratio to such Additional Book Basis Derivative Items as the General Partner's Remaining Net Positive Adjustments as of the end of such period bears to the Aggregate Remaining Net Positive Adjustment as of that time, and (iii) with respect to the Partners holding Incentive Distribution Rights, the amount that bears the same ratio to such Additional Book Basis Derivative Items as the Remaining Net Positive Adjustments of the Partners holding the

Incentive Distribution Rights as of the end of such period bears to the Aggregate Remaining Net Positive Adjustments as of that time.

"Special Approval" means approval by a majority of the members of the Conflicts Committee.

"Subsidiary" means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person.

"Substituted Limited Partner" means a Person who is admitted as a Limited Partner to the Partnership pursuant to Section 10.2 in place of and with all the rights of a Limited Partner and who is shown as a Limited Partner on the books and records of the Partnership.

"Surviving Business Entity" has the meaning assigned to such term in
Section 14.2(b).

"Third Liquidation Target Amount" has the meaning assigned to such term in
Section 6.1(c)(i)(E).

"Third Target Distribution" means $0.462 per Unit per Quarter (or, with respect to the period commencing on the Closing Date and ending on the last day of the calendar quarter that includes the Closing Date, it means the product of $0.462 multiplied by a fraction of which the numerator is equal to the number of days in such period and of which the denominator is 91), subject to adjustment in accordance with Sections 6.6 and 6.9.

"Trading Day" means a day on which the principal National Securities Exchange on which such Limited Partner Interests of any class are listed or admitted to trading is open for the transaction of business or, if Limited Partner Interests of a class are not listed or admitted to trading on any National Securities Exchange, a day on which banking institutions in New York City generally are open.

"transfer" has the meaning assigned to such term in Section 4.4(a).

"Transfer Agent" means such bank, trust company or other Person (including the General Partner or one of its Affiliates) as shall be appointed from time to time by the Partnership to act as registrar and transfer agent for the Common Units; provided that if no Transfer Agent is

specifically designated for any other Partnership Securities, the General Partner shall act in such capacity.

"Transfer Application" means an application and agreement for transfer of Units in the form set forth on the back of a Certificate or in a form substantially to the same effect in a separate instrument.

"Unit" means a Partnership Security that is designated as a "Unit" and shall include Common Units but shall not include (i) a General Partner Interest or (ii) Incentive Distribution Rights.

"Unit Majority" means at least a majority of the Outstanding Common Units.

"Unitholders" means the holders of Units.

"Unpaid MQD" has the meaning assigned to such term in Section 6.1(c)(i)(B).

"Unrealized Gain" attributable to any item of Partnership property means, as of any date of determination, the excess, if any, of (a) the fair market value of such property as of such date (as determined under Section 5.5(d)) over
(b) the Carrying Value of such property as of such date (prior to any adjustment to be made pursuant to Section 5.5(d) as of such date).

"Unrealized Loss" attributable to any item of Partnership property means, as of any date of determination, the excess, if any, of (a) the Carrying Value of such property as of such date (prior to any adjustment to be made pursuant to
Section 5.5(d) as of such date) over (b) the fair market value of such property as of such date (as determined under Section 5.5(d)).

"Unrecovered Capital" means at any time, with respect to a Unit, the Initial Unit Capital Account less the sum of all distributions constituting Capital Surplus theretofore made in respect of an Initial Common Unit and any distributions of cash (or the Net Agreed Value of any distributions in kind) in connection with the dissolution and liquidation of the Partnership theretofore made in respect of an Initial Common Unit, adjusted as the General Partner determines to be appropriate to give effect to any distribution, subdivision or combination of such Units.

"U.S. GAAP" means United States Generally Accepted Accounting Principles consistently applied.

"Withdrawal Opinion of Counsel" has the meaning assigned to such term in
Section 11.1(b).

"Working Capital Borrowings" means borrowings used solely for working capital purposes or to pay distributions to Partners made pursuant to a credit facility or other arrangement to the extent such borrowings are required to be reduced to a relatively small amount each year (or for the year in which the Initial Offering is consummated, the 12-month period beginning on the Closing Date) for an economically meaningful period of time.

ARTICLE II

ORGANIZATION

partner of the Operating Partnership pursuant to the Operating Partnership Agreement or otherwise, (b) engage directly in, or enter into or form any corporation, partnership, joint venture, limited liability company or other arrangement to engage indirectly in, any business activity that the Operating Partnership is permitted to engage in by the Operating Partnership Agreement or that its subsidiaries are permitted to engage in by their limited liability company or partnership agreements and, in connection therewith, to exercise all of the rights and powers conferred upon the Partnership pursuant to the agreements relating to such business activity, (c) engage directly in, or enter into or form any corporation, partnership, joint venture, limited liability company or other arrangement to engage indirectly in, any business activity that is approved by the General Partner and which lawfully may be conducted by a limited partnership organized pursuant to the Delaware Act and, in connection therewith, to exercise all of the rights and powers conferred upon the Partnership pursuant to the agreements relating to such business activity; provided, however, that the General Partner reasonably determines, as of the date of the acquisition or commencement of such activity, that such activity (i) generates "qualifying income" (as such term is defined pursuant to Section 7704 of the Code) or a Subsidiary or a Partnership activity that generates qualifying income or (ii) enhances the operations of an activity of the Operating Partnership, and (d) do anything necessary or appropriate to the foregoing, including the making of capital contributions or loans to a Group Member. The General Partner has no obligation or duty to the Partnership, the Limited Partners or the Assignees to propose or approve, and in its discretion may decline to propose or approve, the conduct by the Partnership of any business.

(i) execute, swear to, acknowledge, deliver, file and record in the appropriate public offices (A) all certificates, documents and other instruments (including this Agreement and the Certificate of Limited Partnership and all amendments or restatements hereof or thereof) that the General Partner or the Liquidator deems necessary or appropriate to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may conduct business or own property; (B) all certificates, documents and other instruments that the General Partner or the Liquidator deems necessary or appropriate to reflect, in accordance with its terms, any amendment, change, modification or restatement of this Agreement; (C) all certificates, documents and other instruments (including conveyances and a

certificate of cancellation) that the General Partner or the Liquidator deems necessary or appropriate to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement; (D) all certificates, documents and other instruments relating to the admission, withdrawal, removal or substitution of any Partner pursuant to, or other events described in, Article IV, X, XI or XII; (E) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of any class or series of Partnership Securities issued pursuant to Section 5.6; and (F) all certificates, documents and other instruments (including agreements and a certificate of merger) relating to a merger or consolidation of the Partnership pursuant to Article XIV; and

(ii) execute, swear to, acknowledge, deliver, file and record all ballots, consents, approvals, waivers, certificates, documents and other instruments necessary or appropriate, in the discretion of the General Partner or the Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action that is made or given by the Partners hereunder or is consistent with the terms of this Agreement or is necessary or appropriate, in the discretion of the General Partner or the Liquidator, to effectuate the terms or intent of this Agreement; provided, that when required by Section 13.3 or any other provision of this Agreement that establishes a percentage of the Limited Partners or of the Limited Partners of any class or series required to take any action, the General Partner and the Liquidator may exercise the power of attorney made in this Section 2.6(a)(ii) only after the necessary vote, consent or approval of the Limited Partners or of the Limited Partners of such class or series, as applicable. Nothing contained in this Section 2.6(a) shall be construed as authorizing the General Partner to amend this Agreement except in accordance with Article XIII or as may be otherwise expressly provided for in this Agreement. b) The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive and, to the maximum extent permitted by law, not be affected by the subsequent death, incompetency, disability, incapacity, dissolution, bankruptcy or termination of any Limited Partner or Assignee and the transfer of all or any portion of such Limited Partner's or Assignee's Partnership Interest and shall extend to such Limited Partner's or Assignee's heirs, successors, assigns and personal representatives. Each Limited Partner or Assignee hereby agrees to be bound by any representation made by the General Partner or the Liquidator acting in good faith pursuant to such power of attorney; and each Limited Partner or Assignee hereby waives, to the maximum extent permitted by law, any and all defenses that may be available to contest, negate or disaffirm the action of the General Partner or the Liquidator taken in good faith under such power of attorney. Each Limited Partner or Assignee shall execute and deliver to the General Partner or the Liquidator, within 15 days after receipt of the request therefor, such further designation, powers of attorney and other instruments as the General Partner or the Liquidator deems necessary to effectuate this Agreement and the purposes of the Partnership.

ARTICLE III

RIGHTS OF LIMITED PARTNERS

(a) In addition to other rights provided by this Agreement or by applicable law, and except as limited by Section 3.4(b), each Limited Partner shall have the right, for a purpose reasonably related to such Limited Partner's interest as a limited partner in the Partnership, upon reasonable written demand and at such Limited Partner's own expense:

(i) to obtain true and full information regarding the status of the business and financial condition of the Partnership;

(ii) promptly after becoming available, to obtain a copy of the Partnership's federal, state and local income tax returns for each year;

(iii) to have furnished to him a current list of the name and last known business, residence or mailing address of each Partner;

(iv) to have furnished to him a copy of this Agreement and the Certificate of Limited Partnership and all amendments thereto, together with a copy of

the executed copies of all powers of attorney pursuant to which this Agreement, the Certificate of Limited Partnership and all amendments thereto have been executed;

(v) to obtain true and full information regarding the amount of cash and a description and statement of the Net Agreed Value of any other Capital Contribution by each Partner and which each Partner has agreed to contribute in the future, and the date on which each became a Partner; and

(vi) to obtain such other information regarding the affairs of the Partnership as is just and reasonable.

(b) The General Partner may keep confidential from the Limited Partners and Assignees, for such period of time as the General Partner deems reasonable,
(i) any information that the General Partner reasonably believes to be in the nature of trade secrets or (ii) other information the disclosure of which the General Partner in good faith believes (A) is not in the best interests of the Partnership Group, (B) could damage the Partnership Group or (C) that any Group Member is required by law or by agreement with any third party to keep confidential (other than agreements with Affiliates of the Partnership the primary purpose of which is to circumvent the obligations set forth in this
Section 3.4).

ARTICLE IV

CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION OF
PARTNERSHIP INTERESTS

(a) If any mutilated Certificate is surrendered to the Transfer Agent, the appropriate officers of the General Partner on behalf of the Partnership shall execute, and the

Transfer Agent shall countersign and deliver in exchange therefor, a new Certificate evidencing the same number and type of Partnership Securities as the Certificate so surrendered.

(b) The appropriate officers of the General Partner on behalf of the Partnership shall execute and deliver, and the Transfer Agent shall countersign a new Certificate in place of any Certificate previously issued if the Record Holder of the Certificate:

(i) makes proof by affidavit, in form and substance satisfactory to the General Partner, that a previously issued Certificate has been lost, destroyed or stolen;

(ii) requests the issuance of a new Certificate before the General Partner has notice that the Certificate has been acquired by a purchaser for value in good faith and without notice of an adverse claim;

(iii) if requested by the General Partner, delivers to the General Partner a bond, in form and substance satisfactory to the General Partner, with surety or sureties and with fixed or open penalty as the General Partner may reasonably direct, in its sole discretion, to indemnify the Partnership, the Partners, the General Partner and the Transfer Agent against any claim that may be made on account of the alleged loss, destruction or theft of the Certificate; and

(iv) satisfies any other reasonable requirements imposed by the General Partner.

If a Limited Partner or Assignee fails to notify the General Partner within a reasonable time after he has notice of the loss, destruction or theft of a Certificate, and a transfer of the Limited Partner Interests represented by the Certificate is registered before the Partnership, the General Partner or the Transfer Agent receives such notification, the Limited Partner or Assignee shall be precluded from making any claim against the Partnership, the General Partner or the Transfer Agent for such transfer or for a new Certificate.

(c) As a condition to the issuance of any new Certificate under this
Section 4.2, the General Partner may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Transfer Agent) reasonably connected therewith.

trust company or clearing corporation or an agent of any of the foregoing) is acting as nominee, agent or in some other representative capacity for another Person in acquiring and/or holding Partnership Interests, as between the Partnership on the one hand, and such other Persons on the other, such representative Person (a) shall be the Partner or Assignee (as the case may be) of record and beneficially, (b) must execute and deliver a Transfer Application and (c) shall be bound by this Agreement and shall have the rights and obligations of a Partner or Assignee (as the case may be) hereunder and as, and to the extent, provided for herein.

(a) The term "transfer," when used in this Agreement with respect to a Partnership Interest, shall be deemed to refer to a transaction by which the General Partner assigns its General Partner Interest to another Person who becomes the general partner of the Partnership, by which the holder of a Limited Partner Interest assigns such Limited Partner Interest to another Person who is or becomes a Limited Partner or an Assignee, and includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise.

(b) No Partnership Interest shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article IV. Any transfer or purported transfer of a Partnership Interest not made in accordance with this Article IV shall be null and void.

(c) Nothing contained in this Agreement shall be construed to prevent a disposition by any member of the General Partner of any or all of the limited liability company interests of the General Partner. At any time, any member of the General Partner may sell or transfer all or part of such member's limited liability company interests in the General Partner without Unitholder approval.

(a) The Partnership shall keep or cause to be kept on behalf of the Partnership a register in which, subject to such reasonable regulations as it may prescribe and subject to the provisions of Section 4.5(b), the Partnership will provide for the registration and transfer of Limited Partner Interests. The Transfer Agent is hereby appointed registrar and transfer agent for the purpose of registering Common Units and transfers of such Common Units as herein provided. The Partnership shall not recognize transfers of Certificates evidencing Limited Partner Interests unless such transfers are effected in the manner described in this Section 4.5. Upon surrender of a Certificate for registration of transfer of any Limited Partner Interests evidenced by a Certificate, and subject to the provisions of Section 4.5(b), the appropriate officers of the General Partner on behalf of the Partnership shall execute and deliver, and in the case of Common Units, the Transfer Agent shall countersign and deliver, in the name of the holder or the designated transferee or transferees, as required pursuant to the holder's instructions, one or more new Certificates evidencing the same aggregate number and type of Limited Partner Interests as was evidenced by the Certificate so surrendered.

(b) Except as otherwise provided in Section 4.9, the Partnership shall not recognize any transfer of Limited Partner Interests until the Certificates evidencing such Limited Partner Interests are surrendered for registration of transfer and such Certificates are accompanied by a Transfer Application duly executed by the transferee (or the transferee's attorney-in-fact duly authorized in writing). No charge shall be imposed by the Partnership for such transfer; provided, that as a condition to the issuance of any new Certificate under this
Section 4.5, the Partnership may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed with respect thereto.

(c) Limited Partner Interests may be transferred only in the manner described in this Section 4.5. The transfer of any Limited Partner Interests and the admission of any new Limited Partner shall not constitute an amendment to this Agreement.

(d) Until admitted as a Substituted Limited Partner pursuant to Section 10.2, the Record Holder of a Limited Partner Interest shall be an Assignee in respect of such Limited Partner Interest. Limited Partners may include custodians, nominees or any other individual or entity in its own or any representative capacity.

(e) A transferee of a Limited Partner Interest who has completed and delivered a Transfer Application shall be deemed to have (i) requested admission as a Substituted Limited Partner, (ii) agreed to comply with and be bound by and to have executed this Agreement, (iii) represented and warranted that such transferee has the right, power and authority and, if an individual, the capacity to enter into this Agreement, (iv) granted the powers of attorney set forth in this Agreement and (v) given the consents and approvals and made the waivers contained in this Agreement.

(f) The General Partner and its Affiliates shall have the right at any time to transfer their Common Units, if any, to one or more Persons.

(a) Subject to Section 4.6(c) below, prior to October 31, 2008, the General Partner shall not transfer all or any part of its General Partner Interest to a Person unless such transfer (i) has been approved by the prior written consent or vote of the holders of at least a majority of the Outstanding Common Units (excluding Common Units held by the General Partner and its Affiliates) or (ii) is of all, but not less than all, of its General Partner Interest to (A) an Affiliate of the General Partner (other than an individual) or (B) another Person (other than an individual) in connection with the merger or consolidation of the General Partner with or into another Person (other than an individual) or the transfer by the General Partner of all or substantially all of its assets to another Person (other than an individual).

(b) Subject to Section 4.6(c) below, on or after October 31, 2008, the General Partner may transfer all or any of its General Partner Interest without Unitholder approval.

(c) Notwithstanding anything herein to the contrary, no transfer by the General Partner of all or any part of its General Partner Interest to another Person shall be permitted unless (i) the transferee agrees to assume the rights and duties of the General Partner under this

Agreement and to be bound by the provisions of this Agreement, (ii) the Partnership receives an Opinion of Counsel that such transfer would not result in the loss of limited liability of any Limited Partner or of any limited partner of the Operating Partnership or cause the Partnership or the Operating Partnership to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes (to the extent not already so treated or taxed) and (iii) such transferee also agrees to purchase all (or the appropriate portion thereof, if applicable) of the partnership or membership interest of the General Partner as the general partner or managing member, if any, of each other Group Member. In the case of a transfer pursuant to and in compliance with this Section 4.6, the transferee or successor (as the case may be) shall, subject to compliance with the terms of
Section 10.3, be admitted to the Partnership as the General Partner immediately prior to the transfer of the Partnership Interest, and the business of the Partnership shall continue without dissolution.

(a) Except as provided in Section 4.8(d) below, but notwithstanding the other provisions of this Article IV, no transfer of any Partnership Interests shall be made if such transfer would (i) violate the then applicable federal or state securities laws or rules and regulations of the Commission, any state securities commission or any other governmental authority with jurisdiction over such transfer, (ii) terminate the existence or qualification of the Partnership or the Operating Partnership under the laws of the jurisdiction of its formation, or (iii) cause the Partnership or the Operating Partnership to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes (to the extent not already so treated or taxed).

(b) The General Partner may impose restrictions on the transfer of Partnership Interests if a subsequent Opinion of Counsel determines that such restrictions are necessary to avoid a significant risk of the Partnership or the Operating Partnership becoming an association taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes. The restrictions may be imposed by making such amendments to this Agreement as the General Partner may determine to be necessary or appropriate to impose such restrictions; provided,

however, that any amendment that the General Partner believes, in the exercise of its reasonable discretion, could result in the delisting or suspension of trading of any class of Limited Partner Interests on the principal National Securities Exchange on which such class of Limited Partner Interests is then traded must be approved, prior to such amendment being effected, by the holders of at least a majority of the Outstanding Limited Partner Interests of such class.

(c) [RESERVED]

(d) Nothing contained in this Article IV, or elsewhere in this Agreement, shall preclude the settlement of any transactions involving Partnership Interests entered into through the facilities of any National Securities Exchange on which such Partnership Interests are listed for trading.

(a) If any Group Member is or becomes subject to any federal, state or local law or regulation that, in the reasonable determination of the General Partner, creates a substantial risk of cancellation or forfeiture of any property in which the Group Member has an interest based on the nationality, citizenship or other related status of a Limited Partner or Assignee, the General Partner may request any Limited Partner or Assignee to furnish to the General Partner, within 30 days after receipt of such request, an executed Citizenship Certification or such other information concerning his nationality, citizenship or other related status (or, if the Limited Partner or Assignee is a nominee holding for the account of another Person, the nationality, citizenship or other related status of such Person) as the General Partner may request. If a Limited Partner or Assignee fails to furnish to the General Partner within the aforementioned 30-day period such Citizenship Certification or other requested information or if upon receipt of such Citizenship Certification or other requested information the General Partner determines, with the advice of counsel, that a Limited Partner or Assignee is not an Eligible Citizen, the Partnership Interests owned by such Limited Partner or Assignee shall be subject to redemption in accordance with the provisions of Section 4.10. In addition, the General Partner may require that the status of any such Partner or Assignee be changed to that of a Non-citizen Assignee and, thereupon, the General Partner shall be substituted for such Non-citizen Assignee as the Limited Partner in respect of his Limited Partner Interests.

(b) The General Partner shall, in exercising voting rights in respect of Limited Partner Interests held by it on behalf of Non-citizen Assignees, distribute the votes in the same ratios as the votes of Partners (including without limitation the General Partner) in respect of Limited Partner Interests other than those of Non-citizen Assignees are cast, either for, against or abstaining as to the matter.

(c) Upon dissolution of the Partnership, a Non-citizen Assignee shall have no right to receive a distribution in kind pursuant to Section 12.4 but shall be entitled to the cash equivalent thereof, and the Partnership shall provide cash in exchange for an assignment of the Non-citizen Assignee's share of the distribution in kind. Such payment and assignment shall be treated for Partnership purposes as a purchase by the Partnership from the Non-citizen Assignee of his Limited Partner Interest (representing his right to receive his share of such distribution in kind).

(d) At any time after he can and does certify that he has become an Eligible Citizen, a Non-citizen Assignee may, upon application to the General Partner, request admission as a Substituted Limited Partner with respect to any Limited Partner Interests of such Non-citizen Assignee not redeemed pursuant to
Section 4.10, and upon his admission pursuant to Section 10.2, the General Partner shall cease to be deemed to be the Limited Partner in respect of the Non-citizen Assignee's Limited Partner Interests.

(a) If at any time a Limited Partner or Assignee fails to furnish a Citizenship Certification or other information requested within the 30-day period specified in Section 4.9(a), or if upon receipt of such Citizenship Certification or other information the General Partner determines, with the advice of counsel, that a Limited Partner or Assignee is not an Eligible Citizen, the Partnership may, unless the Limited Partner or Assignee establishes to the satisfaction of the General Partner that such Limited Partner or Assignee is an Eligible Citizen or has transferred his Partnership Interests to a Person who is an Eligible Citizen and who furnishes a Citizenship Certification to the General Partner prior to the date fixed for redemption as provided below, redeem the Partnership Interest of such Limited Partner or Assignee as follows:

(i) The General Partner shall, not later than the 30th day before the date fixed for redemption, give notice of redemption to the Limited Partner or Assignee, at his last address designated on the records of the Partnership or the Transfer Agent, by registered or certified mail, postage prepaid. The notice shall be deemed to have been given when so mailed. The notice shall specify the Redeemable Interests, the date fixed for redemption, the place of payment, that payment of the redemption price will be made upon surrender of the Certificate evidencing the Redeemable Interests and that on and after the date fixed for redemption no further allocations or distributions to which the Limited Partner or Assignee would otherwise be entitled in respect of the Redeemable Interests will accrue or be made.

(ii) The aggregate redemption price for Redeemable Interests shall be an amount equal to the Current Market Price (the date of determination of which shall be the date fixed for redemption) of Limited Partner Interests of the class to be so redeemed multiplied by the number of Limited Partner Interests of each such class included among the Redeemable Interests. The redemption price shall be paid, in the discretion of the General Partner, in cash or by delivery of a promissory note of the Partnership in the principal amount of the redemption price, bearing interest at the rate of 10% annually and payable in three equal annual installments of principal together with accrued interest, commencing one year after the redemption date.

(iii) Upon surrender by or on behalf of the Limited Partner or Assignee, at the place specified in the notice of redemption, of the Certificate evidencing the Redeemable Interests, duly endorsed in blank or accompanied by an assignment duly executed in blank, the Limited Partner or Assignee or his duly authorized representative shall be entitled to receive the payment therefor.

(iv) After the redemption date, Redeemable Interests shall no longer constitute issued and Outstanding Limited Partner Interests.

(b) The provisions of this Section 4.10 shall also be applicable to Limited Partner Interests held by a Limited Partner or Assignee as nominee of a Person determined to be other than an Eligible Citizen.

(c) Nothing in this Section 4.10 shall prevent the recipient of a notice of redemption from transferring his Limited Partner Interest before the redemption date if such transfer is otherwise permitted under this Agreement. Upon receipt of notice of such a transfer, the General Partner shall withdraw the notice of redemption, provided the transferee of such Limited Partner Interest certifies to the satisfaction of the General Partner in a Citizenship Certification delivered in connection with the Transfer Application that he is an Eligible Citizen. If the transferee fails to make such certification, such redemption shall be effected from the transferee on the original redemption date.

ARTICLE V

CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS

(a) On or prior to the Closing Date and pursuant to the Contribution Agreement, (i) the General Partner shall convey to the Partnership, $1,000.00 in exchange for the Incentive Distribution Rights, and (ii) the Organizational Limited Partner shall contribute to the Partnership its limited partner interest in the Operating Partnership as a Capital Contribution.

(b) Upon the issuance of any additional Limited Partner Interests by the Partnership, the General Partner shall be required to make additional Capital Contributions equal to 2/98ths of any amount contributed to the Partnership by the Limited Partners in exchange for such additional Limited Partner Interests. Except as set forth in the immediately preceding sentence and Article XII, the General Partner shall not be obligated to make any additional Capital Contributions to the Partnership.

(a) [RESERVED]

(b) [RESERVED]

(c) [RESERVED]

(a) The Partnership shall maintain for each Partner (or a beneficial owner of Partnership Interests held by a nominee in any case in which the nominee has furnished the identity of such owner to the Partnership in accordance with Section 6031(c) of the Code or any other method acceptable to the General Partner in its sole discretion) owning a Partnership Interest a separate Capital Account with respect to such Partnership Interest in accordance with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of all Capital Contributions made to the Partnership with respect to such Partnership Interest pursuant to this Agreement and (ii) all items of Partnership income and gain (including, without limitation, income and gain exempt from tax) computed in accordance with Section 5.5(b) and allocated with respect to such Partnership Interest pursuant to
Section 6.1, and decreased by (x) the amount of cash or Net Agreed Value of all actual and deemed distributions of cash or property made with respect to such Partnership Interest pursuant to this Agreement and (y) all items of Partnership deduction and loss computed in accordance with Section 5.5(b) and allocated with respect to such Partnership Interest pursuant to Section 6.1.

(b) For purposes of computing the amount of any item of income, gain, loss or deduction which is to be allocated pursuant to Article VI and is to be reflected in the Partners' Capital Accounts, the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for federal income tax purposes (including, without limitation, any method of depreciation, cost recovery or amortization used for that purpose), provided, that:

(i) Solely for purposes of this Section 5.5, the Partnership shall be treated as owning directly its proportionate share (as determined by the General Partner based upon the provisions of the Operating Partnership Agreement) of all property owned by the Operating Partnership or any other Subsidiary that is classified as a partnership for federal income tax purposes.

(ii) All fees and other expenses incurred by the Partnership to promote the sale of (or to sell) a Partnership Interest that can neither be deducted nor amortized under

Section 709 of the Code, if any, shall, for purposes of Capital Account maintenance, be treated as an item of deduction at the time such fees and other expenses are incurred and shall be allocated among the Partners pursuant to Section 6.1.

(iii) Except as otherwise provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss and deduction shall be made without regard to any election under
Section 754 of the Code which may be made by the Partnership and, as to those items described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without regard to the fact that such items are not includable in gross income or are neither currently deductible nor capitalized for federal income tax purposes. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment in the Capital Accounts shall be treated as an item of gain or loss.

(iv) Any income, gain or loss attributable to the taxable disposition of any Partnership property shall be determined as if the adjusted basis of such property as of such date of disposition were equal in amount to the Partnership's Carrying Value with respect to such property as of such date.

(v) In accordance with the requirements of Section 704(b) of the Code, any deductions for depreciation, cost recovery or amortization attributable to any Contributed Property shall be determined as if the adjusted basis of such property on the date it was acquired by the Partnership were equal to the Agreed Value of such property. Upon an adjustment pursuant to Section 5.5(d) to the Carrying Value of any Partnership property subject to depreciation, cost recovery or amortization, any further deductions for such depreciation, cost recovery or amortization attributable to such property shall be determined (A) as if the adjusted basis of such property were equal to the Carrying Value of such property immediately following such adjustment and (B) using a rate of depreciation, cost recovery or amortization derived from the same method and useful life (or, if applicable, the remaining useful life) as is applied for federal income tax purposes; provided, however, that, if the asset has a zero adjusted basis for federal income tax purposes, depreciation, cost recovery or amortization deductions shall be determined using any reasonable method that the General Partner may adopt.

(vi) If the Partnership's adjusted basis in a depreciable or cost recovery property is reduced for federal income tax purposes pursuant to
Section 48(q)(1) or 48(q)(3) of the Code, the amount of such reduction shall, solely for purposes hereof, be deemed to be an additional depreciation or cost recovery deduction in the year such property is placed in service and shall be allocated among the Partners pursuant to Section 6.1. Any restoration of such basis pursuant to Section 48(q)(2) of the Code shall, to the extent possible, be allocated in the same manner to the

Partners to whom such deemed deduction was allocated.

(c) (i) A transferee of a Partnership Interest shall succeed to a pro rata portion of the Capital Account of the transferor relating to the Partnership Interest so transferred.

(ii) [RESERVED]

(d) (i) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an issuance of additional Partnership Interests for cash or Contributed Property or the conversion of the General Partner's Combined Interest to Common Units pursuant to
Section 11.3(b), the Capital Account of all Partners and the Carrying Value of each Partnership property immediately prior to such issuance shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property, as if such Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such property immediately prior to such issuance and had been allocated to the Partners at such time pursuant to Section 6.1 in the same manner as any item of gain or loss actually recognized during such period would have been allocated. In determining such Unrealized Gain or Unrealized Loss, the aggregate cash amount and fair market value of all Partnership assets (including, without limitation, cash or cash equivalents) immediately prior to the issuance of additional Partnership Interests shall be determined by the General Partner using such reasonable method of valuation as it may adopt; provided, however, that the General Partner, in arriving at such valuation, must take fully into account the fair market value of the Partnership Interests of all Partners at such time. The General Partner shall allocate such aggregate value among the assets of the Partnership (in such manner as it determines in its discretion to be reasonable) to arrive at a fair market value for individual properties.

(ii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemed distribution to a Partner of any Partnership property (other than a distribution of cash that is not in redemption or retirement of a Partnership Interest), the Capital Accounts of all Partners and the Carrying Value of all Partnership property shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property, as if such Unrealized Gain or Unrealized Loss had been recognized in a sale of such property immediately prior to such distribution for an amount equal to its fair market value, and had been allocated to the Partners, at such time, pursuant to Section 6.1 in the same manner as any item of gain or loss actually recognized during such period would have been allocated. In determining such Unrealized Gain or Unrealized Loss, the aggregate cash amount and fair market value of all Partnership assets (including, without limitation, cash or cash equivalents) immediately prior to a distribution shall (A) in the case of an actual distribution which is not made pursuant to Section 12.4 or in the case of a deemed distribution, be determined and allocated in the same manner as that provided in Section 5.5(d)(i) or (B) in the case of a liquidating distribution pursuant to Section

12.4, be determined and allocated by the Liquidator using such reasonable method of valuation as it may adopt.

(a) Subject to Section 5.7, the Partnership may issue additional Partnership Securities and options, rights, warrants and appreciation rights relating to the Partnership Securities for any Partnership purpose at any time and from time to time to such Persons for such consideration and on such terms and conditions as shall be established by the General Partner in its sole discretion, all without the approval of any Limited Partners.

(b) Each additional Partnership Security authorized to be issued by the Partnership pursuant to Section 5.6(a) may be issued in one or more classes, or one or more series of any such classes, with such designations, preferences, rights, powers and duties (which may be senior to existing classes and series of Partnership Securities), as shall be fixed by the General Partner in the exercise of its sole discretion, including (i) the right to share Partnership profits and losses or items thereof; (ii) the right to share in Partnership distributions; (iii) rights upon dissolution and liquidation of the Partnership;
(iv) whether, and the terms and conditions upon which, the Partnership may redeem the Partnership Security; (v) whether such Partnership Security is issued with the privilege of conversion or exchange and, if so, the terms and conditions of such conversion or exchange; (vi) the terms and conditions upon which each Partnership Security will be issued, evidenced by certificates and assigned or transferred; and (vii) the right, if any, of each such Partnership Security to vote on Partnership matters, including matters relating to the relative rights, preferences and privileges of such Partnership Security.

(c) The General Partner is hereby authorized and directed to take all actions that it deems necessary or appropriate in connection with (i) each issuance of Partnership Securities and options (and the exercise thereof), rights (and the exercise thereof), warrants (and the exercise thereof) and appreciation rights relating to Partnership Securities pursuant to this Section 5.6, (ii) the conversion of the General Partner Interest or any Incentive Distribution Rights into Units pursuant to the terms of this Agreement, (iii) the admission of Additional Limited Partners and (iv) all additional issuances of Partnership Securities. The General Partner is further authorized and directed to specify the relative rights, powers and duties of the holders of the Units or other Partnership Securities being so issued. The General Partner shall do all things necessary to comply with the Delaware Act and is authorized and directed to do all things it deems to be necessary or advisable in connection with any future issuance of Partnership Securities or in connection with the conversion of the General Partner Interest or any Incentive Distribution Rights into Units pursuant to the terms of this Agreement, including compliance with any statute, rule, regulation or guideline of any federal, state or other governmental agency or any National Securities Exchange on which the Units or other Partnership Securities are listed for trading.

(a) No fractional Units shall be issued by the Partnership.

SECTION 5.8 [RESERVED].

(a) Subject to Sections 5.10(d), 6.6 and 6.9 (dealing with adjustments of distribution levels), the Partnership may make a Pro Rata distribution of Partnership Securities to all Record Holders or may effect a subdivision or combination of Partnership Securities so long as, after any such event, each Partner shall have the same Percentage Interest in the Partnership as before such event, and any amounts calculated on a per Unit basis (including any Common Unit Arrearage or Cumulative Common Unit Arrearage) or stated as a number of Units are proportionately adjusted retroactive to the beginning of the Partnership.

(b) Whenever such a distribution, subdivision or combination of Partnership Securities is declared, the General Partner shall select a Record Date as of which the distribution, subdivision or combination shall be effective and shall send notice thereof at least 20 days prior to such Record Date to each Record Holder as of a date not less than 10 days prior to the date of such notice. The General Partner also may cause a firm of independent public accountants selected by it to calculate the number of Partnership Securities to be held by each Record Holder after giving effect to such distribution, subdivision or combination. The General Partner shall be entitled to rely on any certificate provided by such firm as conclusive evidence of the accuracy of such calculation.

(c) Promptly following any such distribution, subdivision or combination, the Partnership may issue Certificates to the Record Holders of Partnership Securities as of the applicable Record Date representing the new number of Partnership Securities held by such Record Holders, or the General Partner may adopt such other procedures as it may deem appropriate to reflect such changes. If any such combination results in a smaller total number of Partnership Securities Outstanding, the Partnership shall require, as a condition to the delivery to a Record Holder of such new Certificate, the surrender of any Certificate held by such Record Holder immediately prior to such Record Date.

(d) The Partnership shall not issue fractional Units upon any distribution, subdivision or combination of Units. If a distribution, subdivision or combination of Units would result in the issuance of fractional Units but for the provisions of Section 5.7(a) and this Section 5.10(d), each fractional Unit shall be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to the next higher Unit).

ARTICLE VI

ALLOCATIONS AND DISTRIBUTIONS

(i) First, 100% to the General Partner, in an amount equal to the aggregate Net Losses allocated to the General Partner pursuant to
Section 6.1(b)(iii) for all previous taxable years until the aggregate Net Income allocated to the General Partner pursuant to this Section 6.1(a)(i) for the current taxable year and all previous taxable years is equal to the aggregate Net Losses allocated to the General Partner pursuant to Section 6.1(b)(iii) for all previous taxable years;

(ii) Second, 2% to the General Partner, in an amount equal to the aggregate Net Losses allocated to the General Partner pursuant to Section 6.1(b)(ii) for all previous taxable years and 98% to the Unitholders, in accordance with their respective Percentage Interests, until the aggregate Net Income allocated to such Partners pursuant to this
Section 6.1(a)(ii) for the current taxable year and all previous taxable years is equal to the aggregate Net Losses allocated to such Partners pursuant to Section 6.1(b)(ii) for all previous taxable years; and

(iii) Third, 2% to the General Partner, and 98% to the Unitholders, Pro Rata.

(i) First, 2% to the General Partner, and 98% to the Unitholders, Pro Rata, until the aggregate Net Losses allocated pursuant to this
Section 6.1(b)(i) for the current taxable year and all previous taxable years is equal to the aggregate Net Income allocated to such Partners pursuant to Section 6.1(a)(iii) for all previous taxable years, provided that the Net Losses shall not be allocated pursuant to this Section 6.1(b)(i) to the extent that such allocation would cause any Unitholder to have a

deficit balance in its Adjusted Capital Account at the end of such taxable year (or increase any existing deficit balance in its Adjusted Capital Account);

(ii) Second, 2% to the General Partner, and 98% to the Unitholders, Pro Rata; provided, that Net Losses shall not be allocated pursuant to this Section 6.1(b)(ii) to the extent that such allocation would cause any Unitholder to have a deficit balance in its Adjusted Capital Account at the end of such taxable year (or increase any existing deficit balance in its Adjusted Capital Account);

(iii) Third, the balance, if any, 100% to the General Partner.

(i) If a Net Termination Gain is recognized (or deemed recognized pursuant to Section 5.5(d)), such Net Termination Gain shall be allocated among the Partners in the following manner (and the Capital Accounts of the Partners shall be increased by the amount so allocated in each of the following subclauses, in the order listed, before an allocation is made pursuant to the next succeeding subclause):

(A) First, to each Partner having a deficit balance in its Capital Account, in the proportion that such deficit balance bears to the total deficit balances in the Capital Accounts of all Partners, until each such Partner has been allocated Net Termination Gain equal to any such deficit balance in its Capital Account;

(B) Second, 98% to all Unitholders holding Common Units, Pro Rata, and 2% to the General Partner, until the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) its Unrecovered Capital plus (2) the Minimum Quarterly Distribution for the Quarter during which the Liquidation Date occurs, reduced by any distribution pursuant to Section 6.4(a)(i) with respect to such Common Unit for such Quarter (the amount determined pursuant to this clause (2) is hereinafter defined as the "Unpaid MQD") plus (3) any then existing Cumulative Common Unit Arrearage;

(C) Third, 98% to all Unitholders, Pro Rata, and 2% to the General Partner, until the Capital Account in respect of each Common Unit then

Outstanding is equal to the sum of (1) its Unrecovered Capital, plus (2) the Unpaid MQD, plus (3) any then existing Cumulative Common Unit Arrearage, plus (4) the excess of (aa) the First Target Distribution less the Minimum Quarterly Distribution for each Quarter of the Partnership's existence over (bb) the cumulative per Unit amount of any distributions of Available Cash that is deemed to be Operating Surplus made pursuant to Section
6.4(a)(iii) (the sum of (1) plus (2) plus (3) plus (4) is hereinafter defined as the "First Liquidation Target Amount");

(D) Fourth, 85% to all Unitholders, Pro Rata, 13% to the holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General Partner, until the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) the First Liquidation Target Amount, plus (2) the excess of (aa) the Second Target Distribution less the First Target Distribution for each Quarter of the Partnership's existence over (bb) the cumulative per Unit amount of any distributions of Available Cash that is deemed to be Operating Surplus made pursuant to Section
6.4(a)(iv) (the sum of (1) plus (2) is hereinafter defined as the "Second Liquidation Target Amount");

(E) Fifth, 75% to all Unitholders, Pro Rata, 23% to the holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General Partner, until the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) the Second Liquidation Target Amount, plus (2) the excess of (aa) the Third Target Distribution less the Second Target Distribution for each Quarter of the Partnership's existence over (bb) the cumulative per Unit amount of any distributions of Available Cash that is deemed to be Operating Surplus made pursuant to Section
6.4(a)(v) (the sum of (1) plus (2) is hereinafter defined as the "Third Liquidation Target Amount"); and

(F) Finally, any remaining amount 50% to all Unitholders, Pro Rata, 48% to the holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General Partner.

(ii) If a Net Termination Loss is recognized (or deemed recognized pursuant to Section 5.5(d)), such Net Termination Loss shall be allocated among the Partners in the following manner:

(A) First, 98% to all Unitholders holding Common Units, Pro Rata, and 2% to the General Partner, until the Capital Account in respect of each Common Unit then Outstanding has been reduced to zero; and

(B) Second, the balance, if any, 100% to the General Partner.

(i) Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Partnership Minimum Gain during any Partnership taxable period, each Partner shall be allocated items of Partnership income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(d), each Partner's Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii)). This Section 6.1(d)(i) is intended to comply with the Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.

(ii) Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Partner Nonrecourse Debt Minimum Gain during any Partnership taxable period, any Partner with a share of Partner Nonrecourse Debt Minimum Gain at the beginning of such taxable period shall be allocated items of Partnership income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), each Partner's Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d), other than
Section 6.1(d)(i) and other than an allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii), with respect to such taxable period. This Section 6.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

(A) If the amount of cash or the Net Agreed Value of any property distributed (except cash or property distributed pursuant to
Section 12.4) to any Unitholder with respect to its Units for a taxable year is greater (on a per

Unit basis) than the amount of cash or the Net Agreed Value of property distributed to the other Unitholders with respect to their Units (on a per Unit basis), then (1) each Unitholder receiving such greater cash or property distribution shall be allocated gross income in an amount equal to the product of (aa) the amount by which the distribution (on a per Unit basis) to such Unitholder exceeds the distribution (on a per Unit basis) to the Unitholders receiving the smallest distribution and (bb) the number of Units owned by the Unitholder receiving the greater distribution; and (2) the General Partner shall be allocated gross income in an aggregate amount equal to 1/98th of the sum of the amounts allocated in clause (1) above.

(B) After the application of Section 6.1(d)(iii)(A), all or any portion of the remaining items of Partnership gross income or gain for the taxable period, if any, shall be allocated 100% to the holders of Incentive Distribution Rights, Pro Rata, until the aggregate amount of such items allocated to the holders of Incentive Distribution Rights pursuant to this paragraph 6.1(d)(iii)(B) for the current taxable year and all previous taxable years is equal to the cumulative amount of all Incentive Distributions made to the holders of Incentive Distribution Rights from the Closing Date to a date 45 days after the end of the current taxable year.

Nonrecourse Deductions must be allocated in a different ratio to satisfy the safe harbor requirements of the Treasury Regulations promulgated under Section 704(b) of the Code, the General Partner is authorized, upon notice to the other Partners, to revise the prescribed ratio to the numerically closest ratio that does satisfy such requirements.

(A) Notwithstanding any other provision of this Section 6.1, other than the Required Allocations, the Required Allocations shall be taken into account in making the Agreed Allocations so that, to the extent possible, the net amount of items of income, gain, loss and deduction allocated to each Partner pursuant to the Required Allocations and the Agreed Allocations, together, shall be equal to the net amount of such items that would have been allocated to each such Partner under the Agreed Allocations had the Required Allocations and the related Curative Allocation not otherwise been provided in this Section 6.1. Notwithstanding the preceding sentence, Required Allocations relating to (1) Nonrecourse Deductions shall not be taken into account except to the extent that there

has been a decrease in Partnership Minimum Gain and (2) Partner Nonrecourse Deductions shall not be taken into account except to the extent that there has been a decrease in Partner Nonrecourse Debt Minimum Gain. Allocations pursuant to this Section 6.1(d)(x)(A) shall only be made with respect to Required Allocations to the extent the General Partner reasonably determines that such allocations will otherwise be inconsistent with the economic agreement among the Partners. Further, allocations pursuant to this Section 6.1(d)(x)(A) shall be deferred with respect to allocations pursuant to clauses (1) and
(2) hereof to the extent the General Partner reasonably determines that such allocations are likely to be offset by subsequent Required Allocations.

(B) The General Partner shall have reasonable discretion, with respect to each taxable period, to (1) apply the provisions of
Section 6.1(d)(x)(A) in whatever order is most likely to minimize the economic distortions that might otherwise result from the Required Allocations, and (2) divide all allocations pursuant to
Section 6.1(d)(x)(A) among the Partners in a manner that is likely to minimize such economic distortions.

(A) In the case of any allocation of Additional Book Basis Derivative Items (other than an allocation of Unrealized Gain or Unrealized Loss under Section 5.5(d) hereof), the General Partner shall allocate additional items of gross income and gain away from the holders of Incentive Distribution Rights to the Unitholders and the General Partner, or additional items of deduction and loss away from the Unitholders and the General Partner to the holders of Incentive Distribution Rights, to the extent that the Additional Book Basis Derivative Items allocated to the Unitholders or the General Partner exceed their Share of Additional Book Basis Derivative Items. For this purpose, the Unitholders and the General Partner shall be treated as being allocated Additional Book Basis Derivative Items to the extent that such Additional Book Basis Derivative Items have reduced the amount of income that would otherwise have been allocated to the Unitholders or the General Partner under the Partnership Agreement (e.g., Additional Book Basis Derivative Items taken into account in computing cost of goods sold would reduce the amount of book income otherwise available for allocation among the Partners). Any allocation made pursuant to this Section 6.1(d)(xi)(A) shall be made after all of the other Agreed Allocations have been made as if this Section 6.1(d)(xi) were not in this Agreement and, to the extent necessary, shall require the reallocation of items that have been allocated pursuant to such other Agreed Allocations.

(B) In the case of any negative adjustments to the Capital Accounts of the Partners resulting from a Book-Down Event or from the recognition of a

Net Termination Loss, such negative adjustment (1) shall first be allocated, to the extent of the Aggregate Remaining Net Positive Adjustments, in such a manner, as reasonably determined by the General Partner, that to the extent possible the aggregate Capital Accounts of the Partners will equal the amount which would have been the Capital Account balance of the Partners if no prior Book-Up Events had occurred, and (2) any negative adjustment in excess of the Aggregate Remaining Net Positive Adjustments shall be allocated pursuant to Section 6.1(c) hereof.

(C) In making the allocations required under this Section 6.1(d)(xi), the General Partner, in its sole discretion, may apply whatever conventions or other methodology it deems reasonable to satisfy the purpose of this Section 6.1(d)(xi).

(a) Except as otherwise provided herein, for federal income tax purposes, each item of income, gain, loss and deduction shall be allocated among the Partners in the same manner as its correlative item of "book" income, gain, loss or deduction is allocated pursuant to Section 6.1.

(b) In an attempt to eliminate Book-Tax Disparities attributable to a Contributed Property or Adjusted Property, items of income, gain, loss, depreciation, amortization and cost recovery deductions shall be allocated for federal income tax purposes among the Partners as follows:

(i) (A) In the case of a Contributed Property, such items attributable thereto shall be allocated among the Partners in the manner provided under Section 704(c) of the Code that takes into account the variation between the Agreed Value of such property and its adjusted basis at the time of contribution; and (B) any item of Residual Gain or Residual Loss attributable to a Contributed Property shall be allocated among the Partners in the same manner as its correlative item of "book" gain or loss is allocated pursuant to Section 6.1.

(ii) (A) In the case of an Adjusted Property, such items shall (1) first, be allocated among the Partners in a manner consistent with the principles of Section 704(c) of the Code to take into account the Unrealized Gain or Unrealized Loss attributable to such property and the allocations thereof pursuant to Section 5.5(d)(i) or 5.5(d)(ii), and (2) second, in the event such property was originally a Contributed Property, be allocated among the Partners in a manner consistent with Section 6.2(b)(i)(A); and (B) any item of Residual Gain or Residual Loss attributable to an Adjusted Property shall be allocated among the Partners in the same manner as its correlative item of "book" gain or loss is allocated pursuant to Section 6.1.

(iii) The General Partner shall apply the principles of Treasury Regulation
Section 1.704-3(d) to eliminate Book-Tax Disparities.

(c) For the proper administration of the Partnership and for the preservation of uniformity of the Limited Partner Interests (or any class or classes thereof), the General Partner shall have sole discretion to (i) adopt such conventions as it deems appropriate in determining the amount of depreciation, amortization and cost recovery deductions; (ii) make special allocations for federal income tax purposes of income (including, without limitation, gross income) or deductions; and (iii) amend the provisions of this Agreement as appropriate (x) to reflect the proposal or promulgation of Treasury Regulations under Section 704(b) or Section 704(c) of the Code (including without limitation Treasury Regulations regarding compensatory and noncompensatory options) or (y) otherwise to preserve or achieve uniformity of the Limited Partner Interests (or any class or classes thereof). The General Partner may adopt such conventions, make such allocations and make such amendments to this Agreement as provided in this Section 6.2(c) only if such conventions, allocations or amendments would not have a material adverse effect on the Partners, the holders of any class or classes of Limited Partner Interests issued and Outstanding or the Partnership, and if such allocations are consistent with the principles of Section 704 of the Code. Additionally, the General partner has the authority to amend the provisions of this Agreement as necessary to conform to proposed or promulgated Treasury Regulations under Subchapter K of the Code regarding compensatory and noncompensatory options to acquire a Partnership Security.

(d) The General Partner in its discretion may determine to depreciate or amortize the portion of an adjustment under Section 743(b) of the Code attributable to unrealized appreciation in any Adjusted Property (to the extent of the unamortized Book-Tax Disparity) using a predetermined rate derived from the depreciation or amortization method and useful life applied to the Partnership's common basis of such property, despite any inconsistency of such approach with Treasury Regulation Section 1.167(c)-l(a)(6) or any successor regulations thereto. If the General Partner determines that such reporting position cannot reasonably be taken, the General Partner may adopt depreciation and amortization conventions under which all purchasers acquiring Limited Partner Interests in the same month would receive depreciation and amortization deductions, based upon the same applicable rate as if they had purchased a direct interest in the Partnership's property. If the General Partner chooses not to utilize such aggregate method, the General Partner may use any other reasonable depreciation and amortization conventions to preserve the uniformity of the intrinsic tax characteristics of any Limited Partner Interests that would not have a material adverse effect on the Limited Partners or the Record Holders of any class or classes of Limited Partner Interests.

(e) Any gain allocated to the Partners upon the sale or other taxable disposition of any Partnership asset shall, to the extent possible, after taking into account other required allocations of gain pursuant to this Section 6.2, be characterized as Recapture Income in the same proportions and to the same extent as such Partners (or their predecessors in interest) have been allocated any deductions directly or indirectly giving rise to the treatment of such gains as Recapture Income.

(f) All items of income, gain, loss, deduction and credit recognized by the Partnership for federal income tax purposes and allocated to the Partners in accordance with the provisions hereof shall be determined without regard to any election under Section 754 of the Code which may be made by the Partnership; provided, however, that such allocations, once

made, shall be adjusted as necessary or appropriate to take into account those adjustments permitted or required by Sections 734 and 743 of the Code.

(g) Each item of Partnership income, gain, loss and deduction shall for federal income tax purposes, be determined on an annual basis and prorated on a monthly basis and shall be allocated to the Partners as of the opening of the Nasdaq National Market on the first Business Day of each month; provided, however, that gain or loss on a sale or other disposition of any assets of the Partnership or any other extraordinary item of income or loss realized and recognized other than in the ordinary course of business, as determined by the General Partner in its sole discretion, shall be allocated to the Partners as of the opening of the Nasdaq National Market on the first Business Day of the month in which such gain or loss is recognized for federal income tax purposes. The General Partner may revise, alter or otherwise modify such methods of allocation as it determines necessary or appropriate in its sole discretion, to the extent permitted or required by Section 706 of the Code and the regulations or rulings promulgated thereunder.

(h) Allocations that would otherwise be made to a Limited Partner under the provisions of this Article VI shall instead be made to the beneficial owner of Limited Partner Interests held by a nominee in any case in which the nominee has furnished the identity of such owner to the Partnership in accordance with
Section 6031(c) of the Code or any other method acceptable to the General Partner in its sole discretion.

(a) Within 45 days following the end of each Quarter, an amount equal to 100% of Available Cash with respect to such Quarter shall, subject to Section 17-607 of the Delaware Act, be distributed in accordance with this Article VI by the Partnership to the Partners as of the Record Date selected by the General Partner in its reasonable discretion. All amounts of Available Cash distributed by the Partnership on any date from any source shall be deemed to be Operating Surplus until the sum of all amounts of Available Cash theretofore distributed by the Partnership to the Partners pursuant to Section 6.4 equals the Operating Surplus from the Closing Date through the close of the immediately preceding Quarter. Any remaining amounts of Available Cash distributed by the Partnership on such date shall, except as otherwise provided in Section 6.5, be deemed to be "Capital Surplus." All distributions required to be made under this Agreement shall be made subject to Section 17-607 of the Delaware Act.

(b) Notwithstanding Section 6.3(a), in the event of the dissolution and liquidation of the Partnership, all receipts received during or after the Quarter in which the Liquidation Date occurs, other than from borrowings described in (a)(ii) of the definition of Available Cash, shall be applied and distributed solely in accordance with, and subject to the terms and conditions of, Section 12.4.

(c) The General Partner shall have the discretion to treat taxes paid by the Partnership on behalf of, or amounts withheld with respect to, all or less than all of the Partners, as a distribution of Available Cash to such Partners.

(d) Each distribution in respect of a Partnership Interest shall be paid by the Partnership, directly or through the Transfer Agent or through any other Person or agent, only to the Record Holder of such Partnership Interest as of the Record Date set for such distribution. Such payment shall constitute full payment and satisfaction of the Partnership's liability in respect of such payment, regardless of any claim of any Person who may have an interest in such payment by reason of an assignment or otherwise.

(a) Available Cash with respect to any Quarter that is deemed to be Operating Surplus pursuant to the provisions of Section 6.3 or 6.5, subject to
Section 17-607 of the Delaware Act, shall be distributed as follows, except as otherwise required by Section 5.6(b) in respect of additional Partnership Securities issued pursuant thereto:

(i) First, 98% to all Unitholders, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Unit then Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;

(ii) Second, 98% to the Unitholders, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Common Unit then Outstanding an amount equal to the Cumulative Common Unit Arrearage existing with respect to such Quarter;

(iii) Third, 98% to all Unitholders, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the First Target Distribution over the Minimum Quarterly Distribution for such Quarter;

(iv) Fourth, 85% to all Unitholders, Pro Rata, 13% to the holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Second Target Distribution over the First Target Distribution for such Quarter;

(v) Fifth, 75% to all Unitholders, Pro Rata, 23% to the holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Third Target Distribution over the Second Target Distribution for such Quarter; and

(vi) Thereafter, 50% to all Unitholders, Pro Rata, 48% to the holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General Partner;

provided, however, if the Minimum Quarterly Distribution, the First Target Distribution, the Second Target Distribution and the Third Target Distribution have been reduced to zero pursuant to the second sentence of Section 6.6(a), the distribution of Available Cash that is deemed to be

Operating Surplus with respect to any Quarter will be made solely in accordance with Section 6.4(a)(vi).

(a) The Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution, Third Target Distribution, Common Unit Arrearages and Cumulative Common Unit Arrearages shall be proportionately adjusted in the event of any distribution, combination or subdivision (whether effected by a distribution payable in Units or otherwise) of Units or other Partnership Securities in accordance with Section 5.10. In the event of a distribution of Available Cash that is deemed to be from Capital Surplus, the then applicable Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution, shall be adjusted proportionately downward to equal the product obtained by multiplying the otherwise applicable Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution, as the case may be, by a fraction of which the numerator is the Unrecovered Capital of the Common Units immediately after giving effect to such distribution and of which the denominator is the Unrecovered Capital of the Common Units immediately prior to giving effect to such distribution.

(b) The Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution, shall also be subject to adjustment pursuant to Section 6.9.

SECTION 6.7 [RESERVED].

6.4(a)(iv) through (vi), and 12.4 or (iii) be allocated items of income, gain, loss or deduction other than as specified in this Article VI.

ARTICLE VII

MANAGEMENT AND OPERATION OF BUSINESS

(a) The General Partner shall conduct, direct and manage all activities of the Partnership. Except as otherwise expressly provided in this Agreement, all management powers over the business and affairs of the Partnership shall be exclusively vested in the General Partner, and no Limited Partner or Assignee shall have any management power over the business and affairs of the Partnership. In addition to the powers now or hereafter granted a general partner of a limited partnership under applicable law or which are granted to the General Partner under any other provision of this Agreement, the General Partner, subject to Section 7.3, shall have full power and authority to do all things and on such terms as it, in its sole discretion, may deem necessary or appropriate to conduct the business of the Partnership, to exercise all powers set forth in Section 2.5 and to effectuate the purposes set forth in Section 2.4, including the following:

(i) the making of any expenditures, the lending or borrowing of money, the assumption or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance of evidences of indebtedness, including indebtedness that is convertible into Partnership Securities, and the incurring of any other obligations;

(ii) the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or assets of the Partnership;

(iii) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any or all of the assets of the Partnership or the merger or other combination of the Partnership with or into another Person (the matters described in this clause (iii) being subject, however, to any prior approval that may be required by
Section 7.3);

(iv) the use of the assets of the Partnership (including cash on hand) for any purpose consistent with the terms of this Agreement, including the financing of the conduct of the operations of the Partnership Group; subject to Section 7.6(a), the lending of funds to other Persons (including other Group Members), the repayment or guarantee of obligations of the Partnership Group and the making of capital contributions to any member of the Partnership Group;

(v) the negotiation, execution and performance of any contracts, conveyances or other instruments (including instruments that limit the liability of the Partnership under contractual arrangements to all or particular assets of the Partnership, with the other party to the contract to have no recourse against the General Partner or its assets other than its interest in the Partnership, even if same results in the terms of the transaction being less favorable to the Partnership than would otherwise be the case);

(vi) the distribution of Partnership cash;

(vii) the selection and dismissal of employees (including employees having titles such as "president," "vice president," "secretary" and "treasurer") and agents, outside attorneys, accountants, consultants and contractors and the determination of their compensation and other terms of employment or hiring;

(viii) the maintenance of such insurance for the benefit of the Partnership Group and the Partners as it deems necessary or appropriate;

(ix) the formation of, or acquisition of an interest in, and the contribution of property and the making of loans to, any other limited or general partnerships, joint ventures, corporations, limited liability companies or other relationships (including the acquisition of interests in, and the contributions of property to, any Group Member from time to time) subject to the restrictions set forth in
Section 2.4;

(x) the control of any matters affecting the rights and obligations of the Partnership, including the bringing and defending of actions at law or in equity and otherwise engaging in the conduct of litigation and the incurring of legal expense and the settlement of claims and litigation;

(xi) the indemnification of any Person against liabilities and contingencies to the extent permitted by law;

(xii) the entering into of listing agreements with any National Securities Exchange and the delisting of some or all of the Limited Partner Interests from, or requesting that trading be suspended on, any such exchange (subject to any prior approval that may be required under
Section 4.8);

(xiii) unless restricted or prohibited by Section 5.7, the purchase, sale or other acquisition or disposition of Partnership Securities, or the issuance of additional options, rights, warrants and appreciation rights relating to Partnership Securities; and

(xiv) the undertaking of any action in connection with the Partnership's participation in the Operating Partnership or any other subsidiary of the Partnership as a member or partner.

(b) Notwithstanding any other provision of this Agreement, the Operating Partnership Agreement, the Delaware Act or any applicable law, rule or regulation, each of the Partners and the Assignees and each other Person who may acquire an interest in Partnership Securities hereby (i) approves, ratifies and confirms the execution, delivery and performance by the parties thereto of the Operating Partnership Agreement, the Omnibus Agreement, the Contribution Agreement, the Distribution Agreement, and the Purchase Contract dated October 1, 2004, between Penn Octane Corporation and the Operating Partnership and the other agreements described in or filed as exhibits to the Registration Statement that are related to the transactions contemplated by the Registration Statement;
(ii) agrees that the General Partner (on its own or through any officer of the Partnership) is authorized to execute, deliver and perform the agreements referred to in clause (i) of this sentence and the other agreements, acts, transactions and matters described in or contemplated by the Registration Statement on behalf of the Partnership without any further act, approval or vote of the Partners or the Assignees or the other Persons who may acquire an interest in Partnership Securities; and (iii) agrees that the execution, delivery or performance by the General Partner, any Group Member or any Affiliate of any of them, of this Agreement or any agreement authorized or permitted under this Agreement (including the exercise by the General Partner or any Affiliate of the General Partner of the rights accorded pursuant to Article
XV), shall not constitute a breach by the General Partner of any duty that the General Partner may owe the Partnership or the Limited Partners or any other Persons under this Agreement (or any other agreements) or of any duty stated or implied by law or equity.

elect to do business or own property. To the extent that such action is determined by the General Partner in its sole discretion to be reasonable and necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate of Limited Partnership and do all things to maintain the Partnership as a limited partnership (or a partnership or other entity in which the limited partners have limited liability) under the laws of the State of Delaware or of any other state in which the Partnership may elect to do business or own property. Subject to the terms of Section 3.4(a), the General Partner shall not be required, before or after filing, to deliver or mail a copy of the Certificate of Limited Partnership, any qualification document or any amendment thereto to any Limited Partner.

(a) The General Partner may not, without written approval of the specific act by holders of all of the Outstanding Limited Partner Interests or by other written instrument executed and delivered by holders of all of the Outstanding Limited Partner Interests subsequent to the date of this Agreement, take any action in contravention of this Agreement, including, except as otherwise provided in this Agreement, (i) committing any act that would make it impossible to carry on the ordinary business of the Partnership; (ii) possessing Partnership property, or assigning any rights in specific Partnership property, for other than a Partnership purpose; (iii) admitting a Person as a Partner;
(iv) amending this Agreement in any manner; or (v) transferring its interest as a general partner of the Partnership.

(b) Except as provided in Articles XII and XIV, the General Partner may not sell, exchange or otherwise dispose of all or substantially all of the Partnership's assets in a single transaction or a series of related transactions (including by way of merger, consolidation or other combination) or approve on behalf of the Partnership the sale, exchange or other disposition of all or substantially all of the assets of the Operating Partnership without the approval of holders of a Unit Majority; provided however that this provision shall not preclude or limit the General Partner's ability to mortgage, pledge, hypothecate or grant a security interest in all or substantially all of the assets of the Partnership or the Operating Partnership and shall not apply to any forced sale of any or all of the assets of the Partnership or the Operating Partnership pursuant to the foreclosure of, or other realization upon, any such encumbrance. Without the approval of holders of a Unit Majority, the General Partner shall not, on behalf of the Partnership, (i) consent to any amendment to the Operating Partnership Agreement or (ii) except as expressly permitted by
Section 7.9(d), take any action permitted to be taken by a partner of the Operating Partnership, in either case, that would adversely affect the Limited Partners (including any particular class of Partnership Interests as compared to any other class of Partnership Interests) in any material respect, except, in either case, as permitted under Sections 4.6, 11.1 and 11.2 with respect to the election of a successor general partner or managing member of any Group Member.

(a) Except as provided in this Section 7.4 and elsewhere in this Agreement, the General Partner shall not be compensated for its services as a general partner or managing member of any Group Member.

(b) The General Partner shall be reimbursed on a monthly basis, or such other reasonable basis as the General Partner may determine in its sole discretion, for (i) all direct and indirect expenses it incurs or payments it makes on behalf of the Partnership (including salary, bonus, incentive compensation and other amounts paid to any Person including Affiliates of the General Partner to perform services for the Partnership or for the General Partner in the discharge of its duties to the Partnership), and (ii) all other necessary or appropriate expenses allocable to the Partnership or otherwise reasonably incurred by the General Partner in connection with operating the Partnership's business (including expenses allocated to the General Partner by its Affiliates). The General Partner shall determine the expenses that are allocable to the Partnership in any reasonable manner determined by the General Partner in its sole discretion. Reimbursements pursuant to this Section 7.4 shall be in addition to any reimbursement to the General Partner as a result of indemnification pursuant to Section 7.7.

(c) Subject to Section 5.7, the General Partner, in its sole discretion and without the approval of the Limited Partners (who shall have no right to vote in respect thereof), may propose and adopt on behalf of the Partnership employee benefit plans, employee programs and employee practices (including plans, programs and practices involving the issuance of Partnership Securities or options to purchase Partnership Securities), or cause the Partnership to issue Partnership Securities in connection with, or pursuant to, any employee benefit plan, employee program or employee practice maintained or sponsored by the General Partner or any of its Affiliates, in each case for the benefit of employees of the General Partner, any Group Member or any Affiliate, or any of them, in respect of services performed, directly or indirectly, for the benefit of the Partnership Group. The Partnership agrees to issue and sell to the General Partner or any of its Affiliates any Partnership Securities that the General Partner or such Affiliates are obligated to provide to any employees pursuant to any such employee benefit plans, employee programs or employee practices. Expenses incurred by the General Partner in connection with any such plans, programs and practices (including the net cost to the General Partner or such Affiliates of Partnership Securities purchased by the General Partner or such Affiliates from the Partnership to fulfill options or awards under such plans, programs and practices) shall be reimbursed in accordance with Section
7.4(b). Any and all obligations of the General Partner under any employee benefit plans, employee programs or employee practices adopted by the General Partner as permitted by this Section 7.4(c) shall constitute obligations of the General Partner hereunder and shall be assumed by any successor General Partner approved pursuant to Section 11.1 or 11.2 or the transferee of or successor to all of the General Partner's General Partner Interest pursuant to Section 4.6.

(a) After the Closing Date, the General Partner, for so long as it is the General Partner of the Partnership agrees that its sole business will be to act as a general partner or managing member, as the case may be, of the Partnership and any other partnership or limited liability company of which the Partnership or the Operating Partnership is, directly or indirectly, a partner or member and to undertake activities that are ancillary or related thereto (including being a limited partner in the Partnership).

(b) Penn Octane Corporation has entered into the Omnibus Agreement with the General Partner, and the Partnership, which agreement sets forth certain aspects of the business relationship between Penn Octane Corporation and its Affiliates and the Partnership.

(c) Each Indemnitee (other than the General Partner) shall have the right to engage in businesses of every type and description and other activities for profit and to engage in and possess an interest in other business ventures of any and every type or description, whether in businesses engaged in or anticipated to be engaged in by any Group Member, independently or with others, including business interests and activities in direct competition with the business and activities of any Group Member, and none of the same shall constitute a breach of this Agreement or any duty express or implied by law to any Group Member or any Partner or Assignee. Neither any Group Member, any Limited Partner nor any other Person shall have any rights by virtue of this Agreement, the Operating Partnership Agreement, the limited liability company or partnership agreement of any other Group Member or the partnership relationship established hereby or thereby in any business ventures of any Indemnitee.

(d) Notwithstanding anything to the contrary in this Agreement, (i) the engaging in competitive activities by any Indemnitees (other than the General Partner) in accordance with the provisions of this Section 7.5 is hereby approved by the Partnership and all Partners, (ii) it shall be deemed not to be a breach of the General Partner's fiduciary duty or any other obligation of any type whatsoever of the General Partner for the Indemnitees (other than the General Partner) to engage in such business interests and activities in preference to or to the exclusion of the Partnership and (iii) Penn Octane Corporation, the General Partner and the Indemnitees shall have no obligation to present business opportunities to the Partnership.

(e) The General Partner and any of its Affiliates may acquire Units or other Partnership Securities in addition to those acquired on the Closing Date and, except as otherwise provided in this Agreement, shall be entitled to exercise all rights of the General Partner or Limited Partner, as applicable, relating to such Units or Partnership Securities.

(f) The term "Affiliates" when used in Section 7.5(a) and Section 7.5(e) with respect to the General Partner shall not include any Group Member or any Subsidiary of the Group Member.

(g) Anything in this Agreement to the contrary notwithstanding, to the extent that provisions of Sections 7.7, 7.8, 7.9, 7.10 or other Sections of this Agreement purport or are interpreted to have the effect of restricting the fiduciary duties that might otherwise, as a result of Delaware or other applicable law, be owed by the General Partner to the Partnership and its Limited Partners, or to constitute a waiver or consent by the Limited Partners to any such restriction, such provisions shall be inapplicable and have no effect in determining whether the General Partner has complied with its fiduciary duties in connection with determinations made by it under this Section 7.5.

(a) The General Partner or any of its Affiliates may lend to any Group Member, and any Group Member may borrow from the General Partner or any of its Affiliates, funds needed or desired by the Group Member for such periods of time and in such amounts as the General Partner may determine; provided, however, that in any such case the lending party may not charge the borrowing party interest at a rate greater than the rate that would be charged the borrowing party or impose terms less favorable to the borrowing party than would be charged or imposed on the borrowing party by unrelated lenders on comparable loans made on an arm's-length basis (without reference to the lending party's financial abilities or guarantees). The borrowing party shall reimburse the lending party for any costs (other than any additional interest costs) incurred by the lending party in connection with the borrowing of such funds. For purposes of this Section 7.6(a) and Section 7.6(b), the term "Group Member" shall include any Affiliate of a Group Member that is controlled by the Group Member. No Group Member may lend funds to the General Partner or any of its Affiliates (other than another Group Member).

(b) The Partnership may lend or contribute to any Group Member, and any Group Member may borrow from the Partnership, funds on terms and conditions established in the sole discretion of the General Partner; provided, however, that the Partnership may not charge the Group Member interest at a rate less than the rate that would be charged to the Group Member (without reference to the General Partner's financial abilities or guarantees) by unrelated lenders on comparable loans. The foregoing authority shall be exercised by the General Partner in its sole discretion and shall not create any right or benefit in favor of any Group Member or any other Person.

(c) The General Partner may itself, or may enter into an agreement with any of its Affiliates to, render services to a Group Member or to the General Partner in the discharge of its duties as General Partner of the Partnership. Any services rendered to a Group Member by the General Partner or any of its Affiliates shall be on terms that are fair and reasonable to the Partnership; provided, however, that the requirements of this Section 7.6(c) shall be deemed satisfied as to (i) any transaction approved by Special Approval, (ii) any transaction, the terms of which are no less favorable to the Partnership Group than those generally being provided to or available from unrelated third parties or (iii) any transaction that, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to the Partnership Group), is equitable to the Partnership Group. The provisions of Section 7.4 shall apply to the rendering of services described in this Section 7.6(c).

(d) The Partnership Group may transfer assets to joint ventures, other partnerships, corporations, limited liability companies or other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions as are consistent with this Agreement and applicable law.

(e) Neither the General Partner nor any of its Affiliates shall sell, transfer or convey any property to, or purchase any property from, the Partnership, directly or indirectly, except pursuant to transactions that are fair and reasonable to the Partnership; provided, however, that the requirements of this Section 7.6(e) shall be deemed to be satisfied as to (i) the transactions effected pursuant to Sections 5.2 and 5.3, the Contribution Agreement and any other transactions

described in or contemplated by the Registration Statement, (ii) any transaction approved by Special Approval, (iii) any transaction, the terms of which are no less favorable to the Partnership than those generally being provided to or available from unrelated third parties, or (iv) any transaction that, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to the Partnership), is equitable to the Partnership. With respect to any contribution of assets to the Partnership in exchange for Partnership Securities, the Conflicts Committee, in determining whether the appropriate number of Partnership Securities are being issued, may take into account, among other things, the fair market value of the assets, the liquidated and contingent liabilities assumed, the tax basis in the assets, the extent to which tax-only allocations to the transferor will protect the existing partners of the Partnership against a low tax basis, and such other factors as the Conflicts Committee deems relevant under the circumstances.

(f) The General Partner and its Affiliates will have no obligation to permit any Group Member to use any facilities or assets of the General Partner and its Affiliates, except as may be provided in contracts entered into from time to time specifically dealing with such use, nor shall there be any obligation on the part of the General Partner or its Affiliates to enter into such contracts.

(g) Without limitation of Sections 7.6(a) through 7.6(f), and notwithstanding anything to the contrary in this Agreement, the existence of the conflicts of interest described in the Registration Statement are hereby approved by all Partners.

(a) To the fullest extent permitted by law but subject to the limitations expressly provided in this Agreement, all Indemnitees shall be indemnified and held harmless by the Partnership from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an Indemnitee; provided, that in each case the Indemnitee acted in good faith and in a manner that such Indemnitee reasonably believed to be in, or (in the case of a Person other than the General Partner) not opposed to, the best interests of the Partnership and, with respect to any criminal proceeding, had no reasonable cause to believe its conduct was unlawful; provided, further, no indemnification pursuant to this Section 7.7 shall be available to the General Partner with respect to its obligations incurred pursuant to the Omnibus Agreement, the Contribution Agreement and the Distribution Agreement (other than obligations incurred by the General Partner on behalf of the Partnership). The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that the Indemnitee acted in a manner contrary to that specified above. Any indemnification pursuant to this
Section 7.7 shall be made only out of the assets of the Partnership, it being agreed that the General Partner shall not be personally liable for such indemnification and shall have no obligation to contribute or loan any monies or property to the Partnership to enable it to effectuate such indemnification.

(b) To the fullest extent permitted by law, expenses (including legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to
Section 7.7(a) in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that the Indemnitee is not entitled to be indemnified as authorized in this Section 7.7.

(c) The indemnification provided by this Section 7.7 shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, pursuant to any vote of the holders of Outstanding Limited Partner Interests, as a matter of law or otherwise, both as to actions in the Indemnitee's capacity as an Indemnitee and as to actions in any other capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.

(d) The Partnership may purchase and maintain (or reimburse the General Partner or its Affiliates for the cost of) insurance, on behalf of the General Partner, its Affiliates and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expense that may be incurred by such Person in connection with the Partnership's activities or such Person's activities on behalf of the Partnership, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.

(e) For purposes of this Section 7.7, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute "fines" within the meaning of Section 7.7(a); and action taken or omitted by it with respect to any employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is in, or not opposed to, the best interests of the Partnership.

(f) In no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.

(g) An Indemnitee shall not be denied indemnification in whole or in part under this Section 7.7 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

(h) The provisions of this Section 7.7 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons.

(i) No amendment, modification or repeal of this Section 7.7 or any provision hereof shall in any manner terminate, reduce or impair the right of any past, present or future Indemnitee to be indemnified by the Partnership, nor the obligations of the Partnership to indemnify any such Indemnitee under and in accordance with the provisions of this Section 7.7 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

(a) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the Partnership, the Limited Partners, the Assignees or any other Persons who have acquired interests in the Partnership Securities, for losses sustained or liabilities incurred as a result of any act or omission if such Indemnitee acted in good faith.

(b) Subject to its obligations and duties as General Partner set forth in Section 7.1(a), the General Partner may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents, and the General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by the General Partner in good faith.

(c) To the extent that, at law or in equity, an Indemnitee has duties (including fiduciary duties) and liabilities relating thereto to the Partnership or to the Partners, the General Partner and any other Indemnitee acting in connection with the Partnership's business or affairs shall not be liable to the Partnership or to any Partner for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict or otherwise modify the duties and liabilities of an Indemnitee otherwise existing at law or in equity, are agreed by the Partners to replace such other duties and liabilities of such Indemnitee.

(d) Any amendment, modification or repeal of this Section 7.8 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the liability to the Partnership, the Limited Partners, the General Partner, and the Partnership's and General Partner's directors, officers and employees under this Section 7.8 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

(a) Unless otherwise expressly provided in this Agreement, the Operating Partnership Agreement or the limited liability company agreement or partnership agreement of any other Group Member, whenever a potential conflict of interest exists or arises between the General Partner or any of its Affiliates, on the one hand, and the Partnership, the Operating Partnership, any other Group Member, any Partner or any Assignee, on the other, any resolution or course of action by the General Partner or its Affiliates in respect of such conflict of interest shall be

permitted and deemed approved by all Partners, and shall not constitute a breach of this Agreement, of the Operating Partnership Agreement, of any agreement contemplated herein or therein, or of any duty stated or implied by law or equity, if the resolution or course of action is, or by operation of this Agreement is deemed to be, fair and reasonable to the Partnership. The General Partner shall be required in connection with its resolution of such conflict of interest to seek Special Approval of such resolution. Any such approval by the Conflicts Committee shall be subject to the presumption that, in making its decision, the Conflicts Committee acted on an informed basis, in good faith, and in the honest belief that the action taken was in the best interests of the Partnership, and in any proceeding brought by any Unitholder or by or on behalf of such Unitholder or any other Unitholders or the Partnership challenging such approval, the Person bringing or prosecuting such proceeding shall have the burden of overcoming such presumption. Any conflict of interest and any resolution of such conflict of interest shall be conclusively deemed fair and reasonable to the Partnership if such conflict of interest or resolution is (i) approved by Special Approval, (ii) on terms no less favorable to the Partnership than those generally being provided to or available from unrelated third parties or (iii) fair to the Partnership, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to the Partnership). The General Partner (including the Conflicts Committee in connection with Special Approval) shall be authorized in connection with its determination of what is "fair and reasonable" to the Partnership and in connection with its resolution of any conflict of interest to consider (A) the relative interests of any party to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interest; (B) any customary or accepted industry practices and any customary or historical dealings with a particular Person; (C) any applicable generally accepted accounting practices or principles; and (D) such additional factors as the General Partner (including the Conflicts Committee) determines in its sole discretion to be relevant, reasonable or appropriate under the circumstances. In any proceeding brought by any Unitholder by or on behalf of such Unitholder or any other Unitholders or the Partnership alleging that such a resolution by the General Partner (and not by the Conflicts Committee, whose resolution shall be conclusive as provided above) is not fair to the Partnership, such Unitholder shall have the burden of proof of overcoming such conclusion. Nothing contained in this Agreement, however, is intended to nor shall it be construed to require the General Partner (including the Conflicts Committee) to consider the interests of any Person other than the Partnership. In the absence of bad faith by the General Partner, the resolution, action or terms so made, taken or provided by the General Partner with respect to such matter shall not constitute a breach of this Agreement or any other agreement contemplated herein or a breach of any standard of care or duty imposed herein or therein or, to the extent permitted by law, under the Delaware Act or any other law, rule or regulation.

(b) Whenever this Agreement or any other agreement contemplated hereby provides that the General Partner or any of its Affiliates is permitted or required to make a decision (i) in its "sole discretion" or "discretion," that it deems "necessary or appropriate" or "necessary or advisable" or under a grant of similar authority or latitude, except as otherwise provided herein, the General Partner or such Affiliate shall be entitled to consider only such interests and factors as it desires and shall have no duty or obligation to give any consideration to any interest of, or factors affecting, the Partnership, the Operating Partnership, any Group Member, any Limited Partner or any Assignee,
(ii) it may make such decision in its sole discretion (regardless of

whether there is a reference to "sole discretion" or "discretion") unless another express standard is provided for, or (iii) in "good faith" or under another express standard, the General Partner or such Affiliate shall act under such express standard and shall not be subject to any other or different standards imposed by this Agreement, the Operating Partnership Agreement, the limited liability company agreement or partnership agreement of any Group Member any other agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation. In addition, any actions taken by the General Partner or such Affiliate consistent with the standards of "reasonable discretion" set forth in the definitions of Available Cash or Operating Surplus shall not constitute a breach of any duty of the General Partner to the Partnership or the Limited Partners. The General Partner shall have no duty, express or implied, to sell or otherwise dispose of any asset of the Partnership Group other than in the ordinary course of business. No borrowing by any Group Member or the approval thereof by the General Partner shall be deemed to constitute a breach of any duty of the General Partner to the Partnership or the Limited Partners by reason of the fact that the purpose or effect of such borrowing is directly or indirectly to enable distributions to the General Partner or its Affiliates (including in their capacities as Limited Partners) to exceed 2% of the total amount distributed to all partners.

(c) Whenever a particular transaction, arrangement or resolution of a conflict of interest is required under this Agreement to be "fair and reasonable" to any Person, the fair and reasonable nature of such transaction, arrangement or resolution shall be considered in the context of all similar or related transactions.

(d) The Unitholders hereby authorize the General Partner, on behalf of the Partnership as a partner or member of a Group Member, to approve of actions by the general partner or managing member of such Group Member similar to those actions permitted to be taken by the General Partner pursuant to this Section 7.9.

(a) The General Partner may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.

(b) The General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion (including an Opinion of Counsel) of such Persons as to matters that the General Partner reasonably believes to be within such Person's professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.

(c) The General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers, a duly appointed attorney or attorneys-in-fact or the duly authorized officers of the Partnership.

(d) Any standard of care and duty imposed by this Agreement or under the Delaware Act or any applicable law, rule or regulation shall be modified, waived or limited, to the extent permitted by law, as required to permit the General Partner to act under this Agreement or any other agreement contemplated by this Agreement and to make any decision pursuant to the authority prescribed in this Agreement, so long as such action is reasonably believed by the General Partner to be in, or not inconsistent with, the best interests of the Partnership.

(a) If (i) the General Partner or any Affiliate of the General Partner (including for purposes of this Section 7.12, any Person that is an Affiliate of the General Partner at the date of this Agreement notwithstanding that it may later cease to be an Affiliate of the General Partner) holds Partnership Securities that it desires to sell and (ii) Rule 144 of the Securities Act (or any successor rule or regulation to Rule 144) or another exemption from registration is not available to enable such holder of Partnership Securities (the "Holder") to dispose of the number of Partnership Securities it desires to sell at the time it desires to do so without registration under the Securities Act, then upon the request of any such Holder, the Partnership shall file with the Commission as promptly as practicable after receiving such request, and use all reasonable efforts to cause to become effective and remain effective for a period of not less than six months following its effective date or such shorter period as shall terminate when all Partnership Securities covered by such registration statement have been sold, a registration statement under the Securities Act registering the offering and sale of the number of Partnership Securities specified by the Holder; provided, however, that the Partnership shall not be required to effect more than three registrations pursuant to this
Section 7.12(a); and provided further, however, that if the Conflicts Committee determines in its good faith judgment that a postponement of the requested registration for up to six months would be in the best interests of the Partnership and its Partners due to a pending transaction, investigation or other event, the filing of such registration statement or the effectiveness thereof may be deferred for up to six months, but not thereafter. In connection with any registration pursuant to the immediately preceding sentence, the Partnership shall promptly prepare and file (x) such documents as may be necessary to register or qualify the securities subject to such registration under the securities laws of such states as the Holder shall reasonably request; provided, however, that no such qualification shall be required in any jurisdiction where, as a result thereof, the Partnership would become subject to general service of process or to taxation or qualification to do business as a foreign corporation or partnership doing business in such jurisdiction solely as a result of such registration, and (y) such documents as may be necessary to apply for listing or to list the Partnership Securities subject to such registration on such National Securities Exchange as the Holder shall reasonably request, and do any and all other acts and things that may reasonably be

necessary or advisable to enable the Holder to consummate a public sale of such Partnership Securities in such states. Except as set forth in Section 7.12(c), all costs and expenses of any such registration and offering (other than the underwriting discounts and commissions) shall be paid by the Partnership, without reimbursement by the Holder.

(b) If the Partnership shall at any time propose to file a registration statement under the Securities Act for an offering of equity securities of the Partnership for cash (other than an offering relating solely to an employee benefit plan), the Partnership shall use all reasonable efforts to include such number or amount of securities held by the Holder in such registration statement as the Holder shall request. If the proposed offering pursuant to this Section 7.12(b) shall be an underwritten offering, then, in the event that the managing underwriter or managing underwriters of such offering advise the Partnership and the Holder in writing that in their opinion the inclusion of all or some of the Holder's Partnership Securities would adversely and materially affect the success of the offering, the Partnership shall include in such offering only that number or amount, if any, of securities held by the Holder which, in the opinion of the managing underwriter or managing underwriters, will not so adversely and materially affect the offering. Except as set forth in Section 7.12(c), all costs and expenses of any such registration and offering (other than the underwriting discounts and commissions) shall be paid by the Partnership, without reimbursement by the Holder.

(c) If underwriters are engaged in connection with any registration referred to in this Section 7.12, the Partnership shall provide indemnification, representations, covenants, opinions and other assurance to the underwriters in form and substance reasonably satisfactory to such underwriters. Further, in addition to and not in limitation of the Partnership's obligation under Section 7.7, the Partnership shall, to the fullest extent permitted by law, indemnify and hold harmless the Holder, its officers, directors and each Person who controls the Holder (within the meaning of the Securities Act) and any agent thereof (collectively, "Indemnified Persons") against any losses, claims, demands, actions, causes of action, assessments, damages, liabilities (joint or several), costs and expenses (including interest, penalties and reasonable attorneys' fees and disbursements), resulting to, imposed upon, or incurred by the Indemnified Persons, directly or indirectly, under the Securities Act or otherwise (hereinafter referred to in this Section 7.12(c) as a "claim" and in the plural as "claims") based upon, arising out of or resulting from any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which any Partnership Securities were registered under the Securities Act or any state securities or Blue Sky laws, in any preliminary prospectus (if used prior to the effective date of such registration statement), or in any summary or final prospectus or in any amendment or supplement thereto (if used during the period the Partnership is required to keep the registration statement current), or arising out of, based upon or resulting from the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein not misleading; provided, however, that the Partnership shall not be liable to any Indemnified Person to the extent that any such claim arises out of, is based upon or results from an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, such preliminary, summary or final prospectus or such amendment or supplement, in reliance upon and in conformity with written information furnished to the Partnership by or on behalf of such Indemnified Person specifically for use in the preparation thereof.

(d) The provisions of Section 7.12(a) and 7.12(b) shall continue to be applicable with respect to the General Partner (and any of the General Partner's Affiliates) after it ceases to be a Partner of the Partnership, during a period of two years subsequent to the effective date of such cessation and for so long thereafter as is required for the Holder to sell all of the Partnership Securities with respect to which, during such two-year period, it has requested inclusion in a registration statement pursuant to Section 7.12(b) or requested that a registration statement be filed pursuant to Section 7.12(a); provided, however, that the Partnership shall not be required to file successive registration statements covering the same Partnership Securities for which registration was demanded during such two-year period. The provisions of Section 7.12(c) shall continue in effect thereafter.

(e) Any request to register Partnership Securities pursuant to this
Section 7.12 shall (i) specify the Partnership Securities intended to be offered and sold by the Person making the request, (ii) express such Person's present intent to offer such Partnership Securities for distribution, (iii) describe the nature or method of the proposed offer and sale of Partnership Securities, and
(iv) contain the undertaking of such Person to provide all such information and materials and take all action as may be required in order to permit the Partnership to comply with all applicable requirements in connection with the registration of such Partnership Securities.

ARTICLE VIII

BOOKS, RECORDS, ACCOUNTING AND REPORTS

(a) As soon as practicable, but in no event later than 120 days after the close of each fiscal year of the Partnership, the General Partner shall cause to be mailed or made available to each Record Holder of a Unit as of a date selected by the General Partner in its discretion, an annual report containing financial statements of the Partnership for such fiscal year of the Partnership, presented in accordance with U.S. GAAP, including a balance sheet and statements of operations, Partnership equity and cash flows, such statements to be audited by a firm of independent public accountants selected by the General Partner.

(b) As soon as practicable, but in no event later than 90 days after the close of each Quarter except the last Quarter of each fiscal year, the General Partner shall cause to be mailed or made available to each Record Holder of a Unit, as of a date selected by the General Partner in its discretion, a report containing unaudited financial statements of the Partnership and such other information as may be required by applicable law, regulation or rule of any National Securities Exchange on which the Units are listed for trading, or as the General Partner determines to be necessary or appropriate.

ARTICLE IX

TAX MATTERS

respect to a taxable year shall be furnished to them within 90 days of the close of the calendar year in which the Partnership's taxable year ends. The classification, realization and recognition of income, gain, losses and deductions and other items shall be on the accrual method of accounting for federal income tax purposes.

(a) The Partnership shall make the election under Section 754 of the Code in accordance with applicable regulations thereunder, subject to the reservation of the right to seek to revoke any such election upon the General Partner's determination that such revocation is in the best interests of the Limited Partners. Notwithstanding any other provision herein contained, for the purposes of computing the adjustments under Section 743(b) of the Code, the General Partner shall be authorized (but not required) to adopt a convention whereby the price paid by a transferee of a Limited Partner Interest will be deemed to be the lowest quoted closing price of the Limited Partner Interests on any National Securities Exchange on which such Limited Partner Interests are traded during the calendar month in which such transfer is deemed to occur pursuant to Section 6.2(g) without regard to the actual price paid by such transferee.

(b) The Partnership shall elect to deduct expenses incurred in organizing the Partnership ratably over a sixty-month period as provided in
Section 709 of the Code.

(c) Except as otherwise provided herein, the General Partner shall determine whether the Partnership should make any other elections permitted by the Code.

ARTICLE X

ADMISSION OF PARTNERS

such successor shall, subject to the terms hereof, carry on the business of the members of the Partnership Group without dissolution.

(a) A Person (other than the General Partner, an Initial Limited Partner or a Substituted Limited Partner) who makes a Capital Contribution to the Partnership in accordance with this Agreement shall be admitted to the Partnership as an Additional Limited Partner only upon furnishing to the General Partner

(i) evidence of acceptance in form satisfactory to the General Partner of all of the terms and conditions of this Agreement, including the power of attorney granted in Section 2.6, and

(ii) such other documents or instruments as may be required in the discretion of the General Partner to effect such Person's admission as an Additional Limited Partner.

(b) Notwithstanding anything to the contrary in this Section 10.4, no Person shall be admitted as an Additional Limited Partner without the consent of the General Partner, which consent may be given or withheld in the General Partner's discretion. The admission of any Person as an Additional Limited Partner shall become effective on the date upon which the name of such Person is recorded as such in the books and records of the Partnership, following the consent of the General Partner to such admission.

ARTICLE XI

WITHDRAWAL OR REMOVAL OF PARTNERS

(a) The General Partner shall be deemed to have withdrawn from the Partnership upon the occurrence of any one of the following events (each such event herein referred to as an "Event of Withdrawal");

(i) The General Partner voluntarily withdraws from the Partnership by giving written notice to the other Partners;

(ii) The General Partner transfers all of its rights as General Partner pursuant

to Section 4.6;

(iii) The General Partner is removed pursuant to Section 11.2;

(iv) The General Partner (A) makes a general assignment for the benefit of creditors; (B) files a voluntary bankruptcy petition for relief under Chapter 7 of the United States Bankruptcy Code;
(C) files a petition or answer seeking for itself a liquidation, dissolution or similar relief (but not a reorganization) under any law; (D) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the General Partner in a proceeding of the type described in clauses (A)-(C) of this Section 11.1(a)(iv); or (E) seeks, consents to or acquiesces in the appointment of a trustee (but not a debtor-in-possession), receiver or liquidator of the General Partner or of all or any substantial part of its properties;

(v) A final and non-appealable order of relief under Chapter 7 of the United States Bankruptcy Code is entered by a court with appropriate jurisdiction pursuant to a voluntary or involuntary petition by or against the General Partner; or

(vi) (A) in the event the General Partner is a corporation, a certificate of dissolution or its equivalent is filed for the General Partner, or 90 days expire after the date of notice to the General Partner of revocation of its charter without a reinstatement of its charter, under the laws of its state of incorporation; (B) in the event the General Partner is a partnership or a limited liability company, the dissolution and commencement of winding up of the General Partner; (C) in the event the General Partner is acting in such capacity by virtue of being a trustee of a trust, the termination of the trust; (D) in the event the General Partner is a natural person, his death or adjudication of incompetency; and (E) otherwise in the event of the termination of the General Partner.

If an Event of Withdrawal specified in Section 11.1(a)(iv), (v) or (vi)(A), (B),
(C) or (E) occurs, the withdrawing General Partner shall give notice to the Limited Partners within 30 days after such occurrence. The Partners hereby agree that only the Events of Withdrawal described in this Section 11.1 shall result in the withdrawal of the General Partner from the Partnership.

(b) Withdrawal of the General Partner from the Partnership upon the occurrence of an Event of Withdrawal shall not constitute a breach of this Agreement under the following circumstances: (i) at any time during the period beginning on the Closing Date and ending at 12:00 midnight, Eastern Standard Time, on October 31, 2008, the General Partner voluntarily withdraws by giving at least 90 days' advance notice of its intention to withdraw to the Limited Partners; provided that prior to the effective date of such withdrawal, the withdrawal is approved by Unitholders holding at least a majority of the Outstanding Common Units (excluding Common Units held by the General Partner and its Affiliates) and the General Partner delivers to

the Partnership an Opinion of Counsel ("Withdrawal Opinion of Counsel") that such withdrawal (following the selection of the successor General Partner) would not result in the loss of the limited liability of any Limited Partner or any Group Member or cause any Group Member to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes (to the extent not previously treated as such); (ii) at any time after 12:00 midnight, Eastern Standard Time, on October 31, 2008, the General Partner voluntarily withdraws by giving at least 90 days' advance notice to the Unitholders, such withdrawal to take effect on the date specified in such notice; (iii) at any time that the General Partner ceases to be the General Partner pursuant to Section 11.1(a)(ii) or is removed pursuant to Section 11.2; or (iv) notwithstanding clause (i) of this sentence, at any time that the General Partner voluntarily withdraws by giving at least 90 days' advance notice of its intention to withdraw to the Limited Partners, such withdrawal to take effect on the date specified in the notice, if at the time such notice is given one Person and its Affiliates (other than the General Partner and its Affiliates) own beneficially or of record or control at least 50% of the Outstanding Units. The withdrawal of the General Partner from the Partnership upon the occurrence of an Event of Withdrawal shall also constitute the withdrawal of the General Partner as general partner or managing member, to the extent applicable, of the other Group Members. If the General Partner gives a notice of withdrawal pursuant to Section 11.1(a)(i), the holders of a Unit Majority, may, prior to the effective date of such withdrawal, elect a successor General Partner. The Person so elected as successor General Partner shall automatically become the successor general partner or managing member, to the extent applicable, of the other Group Members of which the General Partner is a general partner or a managing member. If, prior to the effective date of the General Partner's withdrawal, a successor is not selected by the Unitholders as provided herein or the Partnership does not receive a Withdrawal Opinion of Counsel, the Partnership shall be dissolved in accordance with Section 12.1. Any successor General Partner elected in accordance with the terms of this Section 11.1 shall be subject to the provisions of Section 10.3.

Units required to remove the General Partner may be amended by the General Partner as described in Section 13.1 hereof.

(a) In the event of (i) withdrawal of the General Partner under circumstances where such withdrawal does not violate this Agreement or (ii) removal of the General Partner by the holders of Outstanding Units under circumstances where Cause does not exist, if the successor General Partner is elected in accordance with the terms of Section 11.1 or 11.2, the Departing Partner shall have the option, exercisable prior to the effective date of the departure of such Departing Partner, to require its successor to purchase its General Partner Interest and its general partner interest (or equivalent interest, if any) in the other Group Members and all of its Incentive Distribution Rights (collectively, the "Combined Interest") in exchange for an amount in cash equal to the fair market value of such Combined Interest, such amount to be determined and payable as of the effective date of its departure. If the General Partner is removed by the Unitholders under circumstances where Cause exists or if the General Partner withdraws under circumstances where such withdrawal violates this Agreement, and if a successor General Partner is elected in accordance with the terms of Section 11.1 or 11.2, such successor shall have the option, exercisable prior to the effective date of the departure of such Departing Partner, to purchase the Combined Interest for such fair market value of such Combined Interest of the Departing Partner. In either event, the Departing Partner shall be entitled to receive all reimbursements due such Departing Partner pursuant to Section 7.4, including any employee-related liabilities (including severance liabilities), incurred in connection with the termination of any employees employed by the Departing Partner for the benefit of the Partnership or the other Group Members. For purposes of this Section 11.3(a), the fair market value of the Departing Partner's Combined Interest shall be determined by agreement between the Departing Partner and its successor or, failing agreement within 30 days after the effective date of such Departing Partner's departure, by an independent investment banking firm or other independent expert selected by the Departing Partner and its successor, which, in turn, may rely on other experts, and the determination of which shall be conclusive as to such matter. If such parties cannot agree upon one independent investment banking firm or other independent expert within 45 days after the effective date of such departure, then the Departing Partner shall designate an independent investment banking firm or other independent expert, the Departing Partner's successor shall designate an independent investment banking firm or other independent expert, and such firms or experts shall mutually select a third independent investment banking firm or independent expert, which third independent investment banking firm or other independent expert shall determine the fair market value of the Combined Interest of the Departing Partner. In making its determination, such third independent investment banking firm or other independent expert may consider the then current trading price of Units on any National Securities Exchange on which Units are then listed, the value of the Partnership's assets, the rights and obligations of the Departing Partner and other factors it may deem relevant.

(b) If the Combined Interest is not purchased in the manner set forth in Section 11.3(a), the Departing Partner (or its transferee) shall become a Limited Partner and its General Partner Interest shall be converted into Common Units pursuant to a valuation made by an investment banking firm or other independent expert selected pursuant to Section 11.3(a),

without reduction in such Partnership Interest (but subject to proportionate dilution by reason of the admission of its successor) and its Incentive Distribution Rights shall continue in full force and effect. Any successor General Partner shall indemnify the Departing Partner (or its transferee) as to all debts and liabilities of the Partnership arising on or after the date on which the Departing Partner (or its transferee) becomes a Limited Partner. For purposes of this Agreement, conversion of the General Partner Interest of the Departing Partner to Common Units will be characterized as if the Departing Partner (or its transferee) contributed its General Partner Interest to the Partnership in exchange for the newly issued Common Units.

(c) If a successor General Partner is elected in accordance with the terms of Section 11.1 or 11.2 and the option described in Section 11.3(a) is not exercised by the party entitled to do so, the successor General Partner shall, at the effective date of its admission to the Partnership, contribute to the Partnership cash in the amount equal to 2/98ths of the Net Agreed Value of the Partnership's assets on such date. In such event, such successor General Partner shall, subject to the following sentence, be entitled to 2% of all Partnership allocations and distributions to which the Departing Partner was entitled. In addition, the successor General Partner shall cause this Agreement to be amended to reflect that, from and after the date of such successor General Partner's admission, the successor General Partner's interest in all Partnership distributions and allocations shall be 2%.

ARTICLE XII

DISSOLUTION AND LIQUIDATION

(a) an Event of Withdrawal of the General Partner as provided in Section
11.1(a) (other than Section 11.1(a)(ii)), unless a successor is elected and an Opinion of Counsel is received as provided in Section 11.1(b) or 11.2 and such successor is admitted to the Partnership pursuant to Section 10.3;

(b) an election to dissolve the Partnership by the General Partner that is approved by the holders of a Unit Majority;

(c) the entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Delaware Act; or

(d) the sale of all or substantially all of the assets and properties of the Partnership Group.

(i) the reconstituted Partnership shall continue unless earlier dissolved in accordance with this Article XII;

(ii) if the successor General Partner is not the former General Partner, then the interest of the former General Partner shall be treated in the manner provided in Section 11.3; and

(iii) all necessary steps shall be taken to cancel this Agreement and the Certificate of Limited Partnership and to enter into and, as necessary, to file a new partnership agreement and certificate of limited partnership, and the successor General Partner may for this purpose exercise the powers of attorney granted the General Partner pursuant to Section 2.6; provided, that the right of the holders of a Unit Majority to approve a successor General Partner and to reconstitute and to continue the business of the Partnership shall not exist and may not be exercised unless the Partnership has received an Opinion of Counsel that (x) the exercise of the right would not result in the loss of limited liability of any Limited Partner and (y) neither the Partnership, the reconstituted limited partnership nor the Operating Partnership or any other Group Member would be treated as an association taxable as a corporation or otherwise be taxable as an entity for federal income tax purposes upon the exercise of such right to continue.

of the Outstanding Common Units. The Liquidator (if other than the General Partner) shall agree not to resign at any time without 15 days' prior notice and may be removed at any time, with or without cause, by notice of removal approved by holders of at least a majority of the Outstanding Common Units. Upon dissolution, removal or resignation of the Liquidator, a successor and substitute Liquidator (who shall have and succeed to all rights, powers and duties of the original Liquidator) shall within 30 days thereafter be approved by holders of at least a majority of the Outstanding Common Units. The right to approve a successor or substitute Liquidator in the manner provided herein shall be deemed to refer also to any such successor or substitute Liquidator approved in the manner herein provided. Except as expressly provided in this Article XII, the Liquidator approved in the manner provided herein shall have and may exercise, without further authorization or consent of any of the parties hereto, all of the powers conferred upon the General Partner under the terms of this Agreement (but subject to all of the applicable limitations, contractual and otherwise, upon the exercise of such powers, other than the limitation on sale set forth in Section 7.3(b)) to the extent necessary or desirable in the good faith judgment of the Liquidator to carry out the duties and functions of the Liquidator hereunder for and during such period of time as shall be reasonably required in the good faith judgment of the Liquidator to complete the winding up and liquidation of the Partnership as provided for herein.

(a) The assets may be disposed of by public or private sale or by distribution in kind to one or more Partners on such terms as the Liquidator and such Partner or Partners may agree. If any property is distributed in kind, the Partner receiving the property shall be deemed for purposes of Section 12.4(c) to have received cash equal to its fair market value; and contemporaneously therewith, appropriate cash distributions must be made to the other Partners. The Liquidator may, in its absolute discretion, defer liquidation or distribution of the Partnership's assets for a reasonable time if it determines that an immediate sale or distribution of all or some of the Partnership's assets would be impractical or would cause undue loss to the Partners. The Liquidator may, in its absolute discretion, distribute the Partnership's assets, in whole or in part, in kind if it determines that a sale would be impractical or would cause undue loss to the Partners.

(b) Liabilities of the Partnership include amounts owed to the Liquidator as compensation for serving in such capacity (subject to the terms of
Section 12.3) and amounts to Partners otherwise than in respect of their distribution rights under Article VI. With respect to any liability that is contingent, conditional or unmatured or is otherwise not yet due and payable, the Liquidator shall either settle such claim for such amount as it thinks appropriate or establish a reserve of cash or other assets to provide for its payment. When paid, any unused portion of the reserve shall be distributed as additional liquidation proceeds.

(c) All property and all cash in excess of that required to discharge liabilities as provided in Section 12.4(b) shall be distributed to the Partners in accordance with, and to the extent of, the positive balances in their respective Capital Accounts, as determined after taking into account all Capital Account adjustments (other than those made by reason of distributions pursuant to this Section 12.4(c)) for the taxable year of the Partnership during which the liquidation of the Partnership occurs (with such date of occurrence being determined pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of such taxable year (or, if later, within 90 days after said date of such occurrence).

ARTICLE XIII

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE

(a) a change in the name of the Partnership, the location of the principal place of business of the Partnership, the registered agent of the Partnership or the registered office of the Partnership;

(b) admission, substitution, withdrawal or removal of Partners in accordance with this Agreement;

(c) a change that, in the sole discretion of the General Partner, is necessary or advisable to qualify or continue the qualification of the Partnership as a limited partnership or a partnership in which the Limited Partners have limited liability under the laws of any state or to ensure that the Group Members will not be treated as associations taxable as corporations or otherwise taxed as entities for federal income tax purposes;

(d) a change that, in the discretion of the General Partner, (i) does not adversely affect the Limited Partners (including any particular class of Partnership Interests as compared to other classes of Partnership Interests) in any material respect, (ii) is necessary or advisable to (A) satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any federal or state agency or judicial authority or contained in any federal or state statute (including the Delaware Act) or (B) facilitate the trading of the Units (including the division of any class or classes of Outstanding Units into different classes to facilitate uniformity of tax consequences within such classes of Units) or comply with any rule, regulation, guideline or requirement of any National Securities Exchange on which the Units are or will be listed for trading, compliance with any of which the General Partner determines in its discretion to be in the best interests of the Partnership and the Limited Partners, (iii) is necessary or advisable in connection with action taken by the General Partner pursuant to Section 5.10, (iv) is required to effect the intent expressed in the Registration Statement or the intent of the provisions of this Agreement or is otherwise contemplated by this Agreement or (v) is required to conform to proposed or promulgated Treasury Regulations under Subchapter K of the Code regarding compensatory and noncompensatory options to acquire a Partnership Security;

(e) a change in the fiscal year or taxable year of the Partnership and any changes that, in the discretion of the General Partner, are necessary or advisable as a result of a change in the fiscal year or taxable year of the Partnership including, if the General Partner shall so determine, a change in the definition of "Quarter" and the dates on which distributions are to be made by the Partnership;

(f) an amendment that is necessary, in the Opinion of Counsel, to prevent the Partnership, or the General Partner or its directors, officers, trustees or agents from in any manner being subjected to the provisions of the Investment Company Act of 1940, as amended, the Investment Advisers Act of 1940, as amended, or "plan asset" regulations adopted under the Employee Retirement Income Security Act of 1974, as amended, regardless of whether such are substantially similar to plan asset regulations currently applied or proposed by the United States Department of Labor;

(g) subject to the terms of Section 5.7, an amendment that, in the discretion of the General Partner, is necessary or advisable in connection with the authorization of issuance of any class or series of Partnership Securities pursuant to Section 5.6;

(h) any amendment expressly permitted in this Agreement to be made by the General Partner acting alone;'

(i) an amendment effected, necessitated or contemplated by a Merger Agreement approved in accordance with Section 14.3;

(j) an amendment that, in the discretion of the General Partner, is necessary or advisable to reflect, account for and deal with appropriately the formation by the Partnership of, or investment by the Partnership in, any corporation, partnership, joint venture, limited liability company or other entity, in connection with the conduct by the Partnership of activities permitted by the terms of
Section 2.4;

(k) a merger or conveyance pursuant to Section 14.3(d);

(l) an amendment to Section 11.2 that would reduce the percentage of the Outstanding Units required for the Unitholders to remove the General Partner; provided, however, that once such required percentage has been reduced, it may be further reduced by the General Partner but such required percentage may not be increased without a vote of the Unitholders; provided further, however, that no such amendment may provide that any class Units may vote separately as a class to remove the General Partner;

(m) an amendment to the definition of "Outstanding" contained in Section 1.1 hereof to increase from 20% or more the percentage of Outstanding Partnership Securities, that if at any time acquired by any Person or Group, shall not be voted on any matter and shall not be considered to be Outstanding for the other purposes described in such definition; provided, however, that once such percentage has been increased, it may be further increased by the General Partner, but such required percentage may not be reduced without a vote of the Unitholders; or

(n) any other amendments substantially similar to the foregoing.

consider and vote on such proposed amendment. The General Partner shall notify all Record Holders upon final adoption of any such proposed amendments.

(a) Notwithstanding the provisions of Sections 13.1 and 13.2, no provision of this Agreement that establishes a percentage of Outstanding Units (including Units deemed owned by the General Partner) required to take any action shall be amended, altered, changed, repealed or rescinded in any respect that would have the effect of reducing such voting percentage unless such amendment is approved by the written consent or the affirmative vote of holders of Outstanding Units whose aggregate Outstanding Units constitute not less than the voting requirement sought to be reduced.

(b) Notwithstanding the provisions of Sections 13.1 and 13.2, no amendment to this Agreement may (i) enlarge the obligations of any Limited Partner without its consent, unless such shall be deemed to have occurred as a result of an amendment approved pursuant to Section 13.3(c), (ii) enlarge the obligations of, restrict in any way any action by or rights of, or reduce in any way the amounts distributable, reimbursable or otherwise payable to, the General Partner or any of its Affiliates without its consent, which consent may be given or withheld in its sole discretion, (iii) change Section 12.1(b), or (iv) change the term of the Partnership or, except as set forth in Section 12.1(b), give any Person the right to dissolve the Partnership.

(c) Except as provided in Section 14.3, and without limitation of the General Partner's authority to adopt amendments to this Agreement without the approval of any Partners or Assignees as contemplated in Section 13.1, any amendment that would have a material adverse effect on the rights or preferences of any class of Partnership Interests in relation to other classes of Partnership Interests must be approved by the holders of not less than a majority of the Outstanding Partnership Interests of the class affected.

(d) Notwithstanding any other provision of this Agreement, except for amendments pursuant to Section 13.1 and except as otherwise provided by Section 14.3(b), no amendments shall become effective without the approval of the holders of at least 90% of the Outstanding Units voting as a single class unless the Partnership obtains an Opinion of Counsel to the effect that such amendment will not affect the limited liability of any Limited Partner under applicable law.

(e) Except as provided in Section 13.1, this Section 13.3 shall only be amended with the approval of the holders of at least 90% of the Outstanding Units.

called. Within 60 days after receipt of such a call from Limited Partners or within such greater time as may be reasonably necessary for the Partnership to comply with any statutes, rules, regulations, listing agreements or similar requirements governing the holding of a meeting or the solicitation of proxies for use at such a meeting, the General Partner shall send a notice of the meeting to the Limited Partners either directly or indirectly through the Transfer Agent. A meeting shall be held at a time and place determined by the General Partner on a date not less than 10 days nor more than 60 days after the mailing of notice of the meeting. Limited Partners shall not vote on matters that would cause the Limited Partners to be deemed to be taking part in the management and control of the business and affairs of the Partnership so as to jeopardize the Limited Partners' limited liability under the Delaware Act or the law of any other state in which the Partnership is qualified to do business.

meeting is not lawfully called or convened; and except that attendance at a meeting is not a waiver of any right to disapprove the consideration of matters required to be included in the notice of the meeting, but not so included, if the disapproval is expressly made at the meeting.

owned by the General Partner) that would be necessary to authorize or take such action at a meeting at which all the Limited Partners were present and voted (unless such provision conflicts with any rule, regulation, guideline or requirement of any National Securities Exchange on which the Units are listed for trading, in which case the rule, regulation, guideline or requirement of such exchange shall govern). Prompt notice of the taking of action without a meeting shall be given to the Limited Partners who have not approved in writing. The General Partner may specify that any written ballot submitted to Limited Partners for the purpose of taking any action without a meeting shall be returned to the Partnership within the time period, which shall be not less than 20 days, specified by the General Partner. If a ballot returned to the Partnership does not vote all of the Units held by the Limited Partners, the Partnership shall be deemed to have failed to receive a ballot for the Units that were not voted. If approval of the taking of any action by the Limited Partners is solicited by any Person other than by or on behalf of the General Partner, the written approvals shall have no force and effect unless and until
(a) they are deposited with the Partnership in care of the General Partner, (b) approvals sufficient to take the action proposed are dated as of a date not more than 90 days prior to the date sufficient approvals are deposited with the Partnership and (c) an Opinion of Counsel is delivered to the General Partner to the effect that the exercise of such right and the action proposed to be taken with respect to any particular matter (i) will not cause the Limited Partners to be deemed to be taking part in the management and control of the business and affairs of the Partnership so as to jeopardize the Limited Partners' limited liability, and (ii) is otherwise permissible under the state statutes then governing the rights, duties and liabilities of the Partnership and the Partners.

(a) Only those Record Holders of the Units on the Record Date set pursuant to Section 13.6 (and also subject to the limitations contained in the definition of "Outstanding") shall be entitled to notice of, and to vote at, a meeting of Limited Partners or to act with respect to matters as to which the holders of the Outstanding Units have the right to vote or to act. All references in this Agreement to votes of, or other acts that may be taken by, the Outstanding Units shall be deemed to be references to the votes or acts of the Record Holders of such Outstanding Units.

(b) With respect to Units that are held for a Person's account by another Person (such as a broker, dealer, bank, trust company or clearing corporation, or an agent of any of the foregoing), in whose name such Units are registered, such other Person shall, in exercising the voting rights in respect of such Units on any matter, and unless the arrangement between such Persons provides otherwise, vote such Units in favor of, and at the direction of, the Person who is the beneficial owner, and the Partnership shall be entitled to assume it is so acting without further inquiry. The provisions of this Section
13.12(b) (as well as all other provisions of this Agreement) are subject to the provisions of Section 4.3.

ARTICLE XIV

MERGER

(a) the names and jurisdictions of formation or organization of each of the business entities proposing to merge or consolidate;

(b) the name and jurisdiction of formation or organization of the business entity that is to survive the proposed merger or consolidation (the "Surviving Business Entity");

(c) the terms and conditions of the proposed merger or consolidation;

(d) the manner and basis of exchanging or converting the equity securities of each constituent business entity for, or into, cash, property or general or limited partner interests, rights, securities or obligations of the Surviving Business Entity; and (i) if any general or limited partner interests, securities or rights of any constituent business entity are not to be exchanged or converted solely for, or into, cash, property or general or limited partner interests, rights, securities or obligations of the Surviving Business Entity, the cash, property or general or limited partner interests, rights, securities or obligations of any limited partnership, corporation, trust or other entity (other than the Surviving Business Entity) which the holders of such general or limited partner interests, securities or rights are to receive in exchange for, or upon conversion of their general or limited partner interests, securities or rights, and (ii) in the case of securities represented by certificates, upon the surrender of such certificates, which cash, property or general or limited partner interests, rights, securities or obligations of the Surviving Business Entity or any general or limited partnership, corporation, trust or other entity (other than the Surviving Business Entity), or evidences thereof, are to be delivered;

(e) a statement of any changes in the constituent documents or the adoption of new constituent documents (the articles or certificate of incorporation, articles of trust, declaration of trust, certificate or agreement of limited partnership or other similar charter or governing document) of the Surviving Business Entity to be effected by

such merger or consolidation;

(f) the effective time of the merger, which may be the date of the filing of the certificate of merger pursuant to Section 14.4 or a later date specified in or determinable in accordance with the Merger Agreement (provided, that if the effective time of the merger is to be later than the date of the filing of the certificate of merger, the effective time shall be fixed no later than the time of the filing of the certificate of merger and stated therein); and

(g) such other provisions with respect to the proposed merger or consolidation as are deemed necessary or appropriate by the General Partner.

(a) Except as provided in Section 14.3(d), the General Partner, upon its approval of the Merger Agreement, shall direct that the Merger Agreement be submitted to a vote of Limited Partners, whether at a special meeting or by written consent, in either case in accordance with the requirements of Article
XIII. A copy or a summary of the Merger Agreement shall be included in or enclosed with the notice of a special meeting or the written consent.

(b) Except as provided in Section 14.3(d), the Merger Agreement shall be approved upon receiving the affirmative vote or consent of the holders of a Unit Majority unless the Merger Agreement contains any provision that, if contained in an amendment to this Agreement, the provisions of this Agreement or the Delaware Act would require for its approval the vote or consent of a greater percentage of the Outstanding Units or of any class of Limited Partners, in which case such greater percentage vote or consent shall be required for approval of the Merger Agreement.

(c) Except as provided in Section 14.3(d), after such approval by vote or consent of the Limited Partners, and at any time prior to the filing of the certificate of merger pursuant to Section 14.4, the merger or consolidation may be abandoned pursuant to provisions therefor, if any, set forth in the Merger Agreement.

(d) Notwithstanding anything else contained in this Article XIV or in this Agreement, the General Partner is permitted, in its discretion, without Limited Partner approval, to merge the Partnership or any Group Member into, or convey all of the Partnership's assets to, another limited liability entity which shall be newly formed and shall have no assets, liabilities or operations at the time of such Merger other than those it receives from the Partnership or other Group Member if (i) the General Partner has received an Opinion of Counsel that the merger or conveyance, as the case may be, would not result in the loss of the limited liability of any Limited Partner or any Group Member or cause the Partnership or any Group Member to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes (to the extent not previously treated as such), (ii) the sole purpose of such merger or conveyance is to effect a mere change in the legal form of the Partnership into another limited liability entity and (iii) the governing instruments of the new entity provide the Limited Partners and the General Partner with the same rights and obligations as are herein contained.

(a) At the effective time of the certificate of merger:

(i) all of the rights, privileges and powers of each of the business entities that has merged or consolidated, and all property, real, personal and mixed, and all debts due to any of those business entities and all other things and causes of action belonging to each of those business entities, shall be vested in the Surviving Business Entity and after the merger or consolidation shall be the property of the Surviving Business Entity to the extent they were of each constituent business entity;

(ii) the title to any real property vested by deed or otherwise in any of those constituent business entities shall not revert and is not in any way impaired because of the merger or consolidation;

(iii) all rights of creditors and all liens on or security interests in property of any of those constituent business entities shall be preserved unimpaired; and

(iv) all debts, liabilities and duties of those constituent business entities shall attach to the Surviving Business Entity and may be enforced against it to the same extent as if the debts, liabilities and duties had been incurred or contracted by it.

(b) A merger or consolidation effected pursuant to this Article shall not be deemed to result in a transfer or assignment of assets or liabilities from one entity to another.

ARTICLE XV

GENERAL PROVISIONS

of any Person who may have an interest in such Partnership Securities by reason of any assignment or otherwise. An affidavit or certificate of making of any notice, payment or report in accordance with the provisions of this Section 16.1 executed by the General Partner, the Transfer Agent or the mailing organization shall be prima facie evidence of the giving or making of such notice, payment or report. If any notice, payment or report addressed to a Record Holder at the address of such Record Holder appearing on the books and records of the Transfer Agent or the Partnership is returned by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver it, such notice, payment or report and any subsequent notices, payments and reports shall be deemed to have been duly given or made without further mailing (until such time as such Record Holder or another Person notifies the Transfer Agent or the Partnership of a change in his address) if they are available for the Partner or Assignee at the principal office of the Partnership for a period of one year from the date of the giving or making of such notice, payment or report to the other Partners and Assignees. Any notice to the Partnership shall be deemed given if received by the General Partner at the principal office of the Partnership designated pursuant to Section 2.3. The General Partner may rely and shall be protected in relying on any notice or other document from a Partner, Assignee or other Person if believed by it to be genuine.

[Signatures on following page]

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

GENERAL PARTNER:

RIO VISTA GP LLC

By:/s/ Richard Shore, Jr.
   --------------------------------
       Richard Shore, Jr.,
       President

ORGANIZATIONAL LIMITED PARTNER:

PENN OCTANE CORPORATION

By:/s/ Richard Shore, Jr.
   --------------------------------
       Richard Shore, Jr.,
       President

LIMITED PARTNERS:

All Limited Partners now and hereafter
admitted as Limited Partners of the
Partnership, pursuant to powers of
attorney now and hereafter executed in
favor of, and granted and delivered to
the General Partner.

RIO VISTA GP LLC

By:/s/ Richard Shore, Jr.
   --------------------------------
       Richard Shore, Jr.,
       President

EXHIBIT A
TO THE FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
RIO VISTA ENERGY PARTNERS L.P.
CERTIFICATE EVIDENCING COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS IN
RIO VISTA ENERGY PARTNERS L.P.

No. Common Units In accordance with Section 4.1 of the First Amended and Restated Agreement of Limited Partnership of Rio Vista Energy Partners L.P., as amended, supplemented or restated from time to time (the "Partnership Agreement"), Rio Vista Energy Partners L.P., a Delaware limited partnership (the "Partnership"), hereby certifies that _______________ (the "Holder") is the registered owner of Common Units representing limited partner interests in the Partnership (the "Common Units") transferable on the books of the Partnership, in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed and accompanied by a properly executed application for transfer of the Common Units represented by this Certificate. The rights, preferences and limitations of the Common Units are set forth in, and this Certificate and the Common Units represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Partnership Agreement. Copies of the Partnership Agreement are on file at, and will be furnished without charge on delivery of written request to the Partnership at, the principal office of the Partnership located at 820 Gessner Road, Suite 1285, Houston, Texas 77024. Capitalized terms used herein but not defined shall have the meanings given them in the Partnership Agreement.

The Holder, by accepting this Certificate, is deemed to have (i) requested admission as, and agreed to become, a Limited Partner and to have agreed to comply with and be bound by and to have executed the Partnership Agreement, (ii) represented and warranted that the Holder has all right, power and authority and, if an individual, the capacity necessary to enter into the Partnership Agreement, (iii) granted the powers of attorney provided for in the Partnership Agreement and (iv) made the waivers and given the consents and approvals contained in the Partnership Agreement.

This Certificate shall not be valid far any purpose unless it has been countersigned and registered by the Transfer Agent and Registrar.

Dated:____________________               RIO  VISTA  ENERGY  PARTNERS  L.P.

Countersigned and Registered by:         By:  Rio Vista GP LLC,
                                         its General Partner

___________________________________      By:____________________________________
as  Transfer  Agent  and  Registrar      Name:__________________________________

By:________________________________      By:____________________________________
     Authorized Signature                     Secretary

[REVERSE OF CERTIFICATE]

TEN COM --  as tenants in common                      UNIF GIFT/TRANSFERS MIN ACT
TEN ENT --  as tenants by the entireties Custodian
                                                      (Cust)         (Minor)
JT TEN --   as joint tenants with right of            under Uniform Gifts/Transfers to CD
            survivorship and not as tenants in        Minors Act (State)
            Common

Additional abbreviations, though not in the above list, may also be used.

ASSIGNMENT OF COMMON UNITS
IN
RIO VISTA ENERGY PARTNERS L.P.
IMPORTANT NOTICE REGARDING INVESTOR RESPONSIBILITIES
DUE TO TAX SHELTER STATUS OF
RIO VISTA ENERGY PARTNERS L.P.

You have acquired an interest in Rio Vista Energy Partners L.P., 820 Gessner Road, Suite 1285, Houston, Texas 77024, whose taxpayer identification number is 20-0153267. The Internal Revenue Service has issued Rio Vista Energy Partners L.P. the following tax shelter registration number:

YOU MUST REPORT THIS REGISTRATION NUMBER TO THE INTERNAL REVENUE SERVICE IF YOU CLAIM ANY DEDUCTION, LOSS, CREDIT OR OTHER TAX BENEFIT OR REPORT ANY INCOME BY REASON OF YOUR INVESTMENT IN RIO VISTA ENERGY PARTNERS L.P.

You must report the registration number as well as the name and taxpayer identification number of Rio Vista Energy Partners L.P. on Form 8271. FORM 8271 MUST BE ATTACHED TO THE RETURN ON WHICH YOU CLAIM THE DEDUCTION, LOSS, CREDIT OR OTHER TAX BENEFIT OR REPORT ANY INCOME BY REASON OF YOUR INVESTMENT IN RIO VISTA ENERGY PARTNERS L.P.

If you transfer your interest in Rio Vista Energy Partners L.P. to another person, you are required by the Internal Revenue Service to keep a list containing (a) that person's name, address and taxpayer identification number,
(b) the date on which you transferred the interest and (c) the name, address and tax shelter registration number of Rio Vista Energy Partners L.P. If you do not want to keep such a list, you must (1) send the information specified above to the Partnership, which will keep the list for this tax shelter, and (2) give a copy of this notice to the person to whom you transfer your interest. Your failure to comply with any of the above-described responsibilities could result in the imposition of a penalty under Section 6707(b) or

6708(a) of the Internal Revenue Code of 1986, as amended, unless such failure is shown to be due to reasonable cause.

_____________________________________      _____________________________________
(Please print or typewrite name and        (Please insert Social Security or
address  of  Assignee)                     other identifying  number  of
                                           Assignee)

_________ Common Units representing limited partner interests evidenced by this Certificate, subject to the Partnership Agreement, and does hereby irrevocably constitute and appoint ____________________ as its attorney-in-fact with full power of substitution to transfer the same on the books of Rio Vista Energy Partners L.P.

Date:_________________        NOTE:  The  signature  to  any  endorsement hereon
                              must  correspond with the name as written upon the
                              face  of  this  Certificate  in  every particular,
                              without  alteration,  enlargement  or  change.

BY  A  MEMBER  FIRM  OF  THE  NATIONAL     Signature
ASSOCIATION  OF  SECURITIES  DEALERS,
INC.  OR  BY  A  COMMERCIAL  BANK
OR  TRUST  COMPANY  SIGNATURE(S)           _____________________________________
GUARANTEED                                 Signature

No transfer of the Common Units evidenced hereby will be registered on the books of the Partnership, unless the Certificate evidencing the Common Units to be transferred is surrendered for registration or transfer and an Application for Transfer of Common Units has been executed by a transferee either (a) on the form set forth below or (b) on a separate application that the Partnership will furnish on request without charge. A transferor of the Common Units shall have no duty to the transferee with respect to execution of the transfer application in order for such transferee to obtain registration of the transfer of the Common Units.

APPLICATION FOR TRANSFER OF COMMON UNITS

The undersigned ("Assignee") hereby applies for transfer to the name of the Assignee of the Common Units evidenced hereby.

The Assignee (a) requests admission as a Substituted Limited Partner and agrees to comply with and be bound by, and hereby executes, the Amended and Restated Agreement of Limited Partnership of Rio Vista Energy Partners L.P. (the "Partnership"), as amended, supplemented or restated to the date hereof (the "Partnership Agreement"), (b) represents and warrants that the Assignee has all right, power and authority and, if an individual, the capacity necessary to enter into the Partnership Agreement, (c) appoints the General Partner of the Partnership and, if a Liquidator shall be appointed, the Liquidator of the Partnership as the Assignee's attorney-in-fact to execute, swear to, acknowledge and file any document, including, without limitation, the Partnership Agreement and any amendment thereto and the Certificate of Limited Partnership of the Partnership and any amendment thereto, necessary or appropriate for the Assignee's admission as a Substituted Limited Partner and as a party to the Partnership Agreement, (d) gives the powers of attorney provided for in the Partnership Agreement, and (e) makes the waivers and gives the consents and approvals contained in the Partnership Agreement. Capitalized terms not defined herein have the meanings assigned to such terms in the Partnership Agreement.

Date:_________________________

___________________________________________     ________________________________
Social Security or other identifying number     Signature of Assignee

____________________________________________    ________________________________
Purchase Price including commissions, if any    Name and Address of Assignee

Type of Entity (check one):

[ ] Individual [ ] Partnership [ ] Corporation
[ ] Trust [ ] Other (specify)

Nationality (check one):

[ ] U.S. Citizen, Resident or Domestic Entity
[ ] Foreign Corporation [ ] Non-resident Alien

If the U.S. Citizen, Resident or Domestic Entity box is checked, the following certification must be completed.

Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the "Code"), the Partnership must withhold tax with respect to certain transfers of property if a holder of an interest in the Partnership is a foreign person. To inform the Partnership that no withholding is

required with respect to the undersigned Interestholder's interest in it, the undersigned hereby certifies the following (or, if applicable, certifies the following on behalf of the Interestholder).

Complete Either A or B:

A. Individual Interestholder

1. I am not a non-resident alien for purposes of U.S. income taxation.

2. My U.S. taxpayer identification number (Social Security Number) is ________________________.

3. My home address is ________________________________________________________________.

B. Partnership, Corporation or Other Interestholder

1. ____________________________ is not a foreign corporation, foreign partnership, foreign trust (Name of Interestholder) or foreign estate (as those terms are defined in the Code and Treasury Regulations).

3. The Interestholder's office address and place of incorporation (if applicable) is ________________ .

The Interestholder agrees to notify the Partnership within sixty (60) days of the date the Interestholder becomes a foreign person.

The Interestholder understands that this certificate may be disclosed to the Internal Revenue Service by the Partnership and that any false statement contained herein could be punishable by fine, imprisonment or both.

Under penalties of perjury, I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete and, if applicable, I further declare that I have authority to sign this document on behalf of:

Note: If the Assignee is a broker, dealer, bank, trust company, clearing corporation, other nominee holder or an agent of any of the foregoing, and is holding for the account of any other person, this application should be completed by an officer thereof or, in the case of a broker or dealer, by a registered representative who is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or, in the case of any other nominee holder, a person performing a similar function. If the Assignee is a broker, dealer, bank, trust company, clearing corporation, other nominee owner or an agent of any of the foregoing, the above certification as to any person for whom the Assignee will hold the Common Units shall be made to the best of the Assignee's knowledge.

RIO VISTA GP LLC
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

DATED AS OF SEPTEMBER 16, 2004

RIO VISTA GP LLC

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of Rio Vista

GP LLC is dated as of September 16, 2004.

WHEREAS, the Members wish to enter into this Agreement to provide for, among other things, the management of the business and affairs of the Company, the allocation of profits and losses among the Members, the respective rights and obligations of the Members to each other and to the Company, and certain other matters.

NOW, THEREFORE, the Members agree as follows:

of this Agreement than they would be in the absence of such provision, this Agreement shall, to the extent permitted by the Act, control.

(a) the Board of Managers shall have consented in writing to the admission of such Person as a Member; and

(b) such other instruments, documents, certificates and opinions as the Board of Managers deems necessary or desirable for admission for such Person, including a counterpart of or a joinder to this Agreement, shall have been executed and delivered.

(b) In the event the Company proposes to undertake an issuance of New Securities, the Board of Managers shall give each holder of Units written notice of its intention describing the type of New Securities and their price and the general terms upon which the Company proposes to issue the same. Each such holder of Units shall have 30 days after any such notice is mailed to agree to purchase all or any portion of such Unitholder's pro rata share of such New Securities for the price and upon the terms specified in the notice by giving written notice to the Board of Managers and stating therein the quantity of New Securities to be purchased.

(d) The preemptive right granted under this Agreement shall expire upon, and shall not be applicable to, any sale of Units of the Company to the public effected pursuant to a registration statement filed with, and declared effective by, the Securities and Exchange Commission under the Securities Act.

(a) In the event that the Board of Managers determines in its sole discretion that the Company requires funds, the Board of Managers shall be authorized, at any time and from time to time, to cause the Company to borrow additional funds sufficient for such purposes and upon such terms as the Board of Managers may deem appropriate. Moreover, the Board of Managers shall be authorized to permit one or more Members or their Affiliates to guaranty any such borrowed funds. In addition, the Board of Managers shall be authorized to issue Equity Kickers in connection with borrowing of funds or guarantees.

(b) Any such loans and guarantees may be provided by third parties or by one or more Members or their Affiliates. Any loan or guaranty provided by a Member shall not be considered contributions to the capital of the Company and shall not increase the Capital Account of the lending or guarantying Member.

(c) If the Board of Managers desires to request a loan or a several but not joint guaranty from the Members (or any Member or their Affiliates), it shall give the Members written notice of such request, which notice shall include, with respect to any loan, the amount, interest rate, priority and repayment terms with respect to other indebtedness of the proposed loan and, with respect to a several but not joint guaranty, the terms upon which such guaranty will be given (and in both cases details of any proposed Equity Kicker associated therewith). The Members shall have 30 days from receipt of such notice to elect to make all or a portion of the requested loan or a several but not joint guaranty (and receive a pro rata portion of the associated Equity Kicker) in the amounts mutually agreed upon by the Board of Managers and the participating Members. Unless otherwise agreed by the participating Members, any loan or a several but not joint guaranty made by the participating Members to the Company (and any associated Equity Kicker) will be made pro rata among the participating Members in accordance with their respective ownership of Units then outstanding. Notice of any such election to participate shall be given to the Board of Managers within such 30 day period; failure to timely respond shall be deemed to be a decision by a Member that it does not desire to participate in such guaranty, loan or advance. The interest accruing on any such resulting loan and the expenses of such loan or guaranty, including any origination fee, shall be paid and charged as an expense of the Company. For each loan made by a lending Member to the Company, the Company shall execute a note payable to the lending Member, upon the terms, priority with respect to other indebtedness and in the principal sum determined by the Board of Managers and the lending Member. For each guaranty made by a guarantying Member on behalf of the Company, the Company shall execute a reimbursement agreement in

favor of the guarantying Members on the terms determined by the Board of Managers and the guarantying Members.

part of any Distribution, the obligation shall be that of such Member alone and not of any Manager or any other Member. The amount of any Distribution returned to the Company by a Member or paid by a Member for the account of the Company or to a creditor of the Company shall be added to the account or accounts from which it was subtracted when it was distributed to the Member.

The Board of Managers shall select one Manager to serve as the Chairman of the Board of Managers, and the Board of Managers shall elect one other Manager to be the Vice Chairman. The Chairman shall preside at all meetings of the Members and the Board of Managers. The Vice Chairman shall perform all the duties of the Chairman in the absence or disability of the Chairman. The Chairman and Vice Chairman shall have such other powers and perform such other duties as may be prescribed from time to time by the Board of Managers.

At all meetings of the Board of Managers, a majority of the total number of Managers shall constitute a quorum for the transaction of business; and the act of a majority of the Managers present at any meeting at which there is a quorum shall be the act of the Board of Managers, except as otherwise provided by Law or this Agreement. If at any meeting of the Board of Managers there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum is obtained, and no further notice thereof need be given other than by announcement at such adjourned meeting. Attendance by a Manager at a meeting shall constitute a waiver of notice of such meeting except where a Manager attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting is not lawfully called or convened.

Except as otherwise provided by law or this Agreement, in the case of any increase in the authorized number of Managers or of any vacancy in the Board of Managers, however created, the additional Manager or Managers may be elected or, as the case may be, the vacancy or vacancies may be filled by majority vote of the Managers remaining on the whole Board of Managers although less than a quorum, or by a sole remaining Manager. Any Manager elected or chosen as provided herein shall serve until the first to occur of (i) the expiration of the term to which such Manager is elected or appointed, (ii) the election and qualification of the Manager's successor, or (iii) the Manager's resignation or removal.

A Manager may resign at any time upon written notice of resignation to the Company. Any resignation shall be effective immediately unless a certain effective date is specified therein, in which event it will be effective upon such date and acceptance of any resignation shall not be necessary to make it effective.

Any Manager or the entire Board of Managers may be removed, with or without cause, and another person or persons may be elected to serve for the remainder of his or their term by a Majority Interest. In case any vacancy so created shall not be filled by the

Regular meetings of the Board of Managers may be held without notice at such places and times as shall be determined from time to time by resolution of the Board of Managers. Except as otherwise provided by law or this Agreement, any business may be transacted at any regular meeting of the Board of Managers.

Special meetings of the Board of Managers may be called by the Chief Executive Officer, or shall be called by the Secretary on the written request of any Manager stating the purpose or purposes of such meeting. Notices of special meetings shall be given to each Manager not later than three days before the day the meeting is to be held. No notice of any meeting need be given to any Manager who files a written waiver of notice thereof with the Secretary either before or after the meeting. Neither the business to be transacted at, nor the purpose of, any special meeting need be specified in any notice or written waiver of notice, unless so required by this Agreement. Except as otherwise provided by Law or this Agreement, any and all business may be transacted at a special meeting.

At any meeting of the Board of Managers, business shall be transacted in such order and manner as the Chairman may from time to time determine.

The Board of Managers may hold their meetings at any office or offices of the Company, or at any other place as they may from time to time by resolution determine.

The Managers shall not receive any compensation for their services. Managers shall be reimbursed by the Company for their reasonable traveling, food, lodging and other expenses incurred in attending meetings in accordance with policies approved from time to time by the Board of Managers.

Unless otherwise restricted by Law or this Agreement, any action required or permitted to be taken at any meeting of the Board of Managers may be taken without a meeting if the required number of such Managers consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board of Managers. If any action is taken by written consent to which less than all of the Managers have consented, the consenting Managers shall promptly provide notice of such action to the other Managers.

The Managers may participate in a meeting of the Board of Managers by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting in such manner shall constitute presence in person at such meeting.

officer of the Company duly authorized by resolution of the Board of Managers as to the extent of the interest in the assets of the Company which the Board of Managers is entitled to encumber, sell or otherwise use, and any such lender or purchaser shall be entitled to rely exclusively on the representations of the Board of Managers or any officer of the Company duly authorized by resolution of the Board of Managers as to its individual authority to enter into such financing or sale arrangements and shall be entitled to deal with the Board of Managers or any officer of the Company duly authorized by resolution of the Board of Managers as if they were the sole party in interest therein both legally and beneficially.

(a) effect or cause to be effected any Transfer (including any indirect Transfer by way of a Sale of the Company) of the Incentive Distribution Rights (as defined in the First Amended and Restated Agreement of Limited Partnership of Rio Vista Energy Partners L.P.) owned or subsequently acquired by the Company; and

(a) do any act in contradiction of this Agreement;

(b) do any act which would make it impossible to carry on the ordinary business of the Company (except for a disposition of Company assets);

(c) confess a judgment against the Company; or

(d) possess Company assets, or assign the rights in specific Company assets for other than a Company purpose.

Annual meetings of the Members may be held on such date and at such time as shall be determined by the Board of Managers. Notice of the establishment of such annual meeting, and of any amendments thereto, shall be given to each Member at least 10 Days prior to the next annual meeting. No other notices of such annual meetings need be given.

Special meetings of the Members may be called by any Member. Any such meeting shall be held on such date and at such time as the Member calling such meeting shall specify in the notice of the meeting, which shall be delivered to each other Member at least 10 Days prior to such meeting. Neither the business to be transacted at, nor the purpose of, such special meeting need be specified in the notice (or waiver of notice) of such meeting.

Any meeting of the Members shall be held at the principal place of business of the Company, unless the notice of such meeting specifies a different place.

Attendance of a Member at any meeting shall constitute a waiver of notice of such meeting, except where such Member attends the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

A Member may vote at any meeting by a written proxy executed by that Member and delivered to another Member. A proxy shall be revocable unless it is stated to be irrevocable.

Any action required or permitted to be taken at such meeting may be taken without a meeting, without prior notice, and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by a Majority Interest. The Company shall give prompt written notice to the non-consenting Members of any action of Members taken by less than unanimous written consent of the Members.

The Members may participate in and hold any meeting by means of conference telephone, video conference or similar communications equipment by means of which all Persons participating in the meeting can hear each other.

(a) a current list of the full name and last known address of each Member together with information regarding the amount of cash and a description and the Book Value of any other property or services contributed by each Member and which each Member has agreed to contribute in the future, and the date on which each Member became a Member of the Company;

(b) a copy of the Certificate and this Agreement, including any and all amendments to either thereof, or any amendments that have been executed;

(c) copies of the Company's federal, state, and local income tax or information returns and reports, if any, for each taxable year after the Effective Date, provided that the Company need not retain any such records for more than four fiscal years;

(d) the financial statements of the Company for each Fiscal Year after the Effective Date, provided that the Company need not retain any such records for more than four fiscal years; and

(e) the Company's books and records for each Fiscal Year after the Effective Date, provided that the Company need not retain any such records for more than four fiscal years.

the extent necessary for the enforcement of any right of such Member arising under this Agreement.

7.2.2 The Company shall make all remaining Distributions to the holders of Units in proportion to their Unit ownership.

timing of any distribution of cash or property to any Member provided for in this Agreement. Allocations of Nonrecourse Deductions shall be made ratably among the Members in accordance with the number of Units held by the Members. Allocations of Member Nonrecourse Deductions shall be made in accordance with Regulation Section 1.704-2(i).

9.1.3 Any holder of Units may pledge such Units to any bank or other financial institution to secure any debt of the Company to such bank or financial institution for borrowed money; provided, however, that no such pledge may be made unless such pledge is first approved by the Board of Managers, which approval may be given or refused in the sole and absolute discretion of the Board of Managers.

(a) if requested by the Board of Managers, an opinion of responsible counsel (who may be counsel for the Company), satisfactory in form and substance to the Board of Managers to the effect that:

(i) such Transfer would not violate the Securities Act or any state securities or blue sky laws applicable to the Company or the Units to be transferred;

(ii) such Transfer would not cause the Company to be considered a publicly traded partnership under Section 7704(b) of the Code;

(iii) such Transfer would not cause the Company to lose its status as a partnership for federal income tax purposes;

(iv) such Transfer would not require the Company or the Board of Managers to register as an investment adviser under the Investment Advisers Act of 1940, as amended, or to register as an investment

company under the Investment Company Act of 1940, as amended; and

(v) such Transfer would not cause a termination of the Company for federal income tax purposes; and

9.1.5 Each Member hereby severally agrees that:

(a) it will not transfer all or any part of its Units in the Company except as permitted by this Agreement;

(b) in no event shall all or any part of a Unit be transferred to a minor or an incompetent except in trust or pursuant to the Uniform Gifts to Minors Act; and

(c) it will pay all reasonable expenses, including attorneys' fees, incurred by the Company in connection with such Transfer.

(a) a duly executed and acknowledged written instrument of Transfer is filed with the Company, specifying the Units being transferred and setting forth the intention of the Member effecting the Transfer that the Assignee succeed to a portion or all of such Member's Units as a Member;

(b) the Assignee qualifies as an Accredited Investor;

(e) the Member effecting the Transfer or the Assignee pays to the Company a transfer fee sufficient to cover all reasonable expenses connected with the admission;

(g) the Board of Managers approves such admission, which approval may be given or refused in its reasonable discretion.

owed to one or more of the Members, is insufficient to return the aggregate Capital Contributions of each Member, such Members shall have no recourse against the Company, the Board of Managers or any other Member.

12.6 Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Indemnified Person shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being an Indemnified Person. All persons dealing with the Company shall look solely to the assets of the Company for the payment of the debts, obligations or liabilities of the Company.

Each Member hereby represents and warrants to, and agrees with, the Board of Managers, the other Members and the Company as follows:

13.2.1 It acknowledges and agrees that its Units are being issued and sold in reliance on the exemption from registration contained in Section 4(2) of the Securities Act and exemptions contained in applicable state securities laws, and that its Units cannot and will not be sold or transferred except in a transaction that is exempt under the Securities Act and those state acts or pursuant to an effective registration statement under the Securities Act and those state acts or in a transaction that is otherwise in compliance with the Securities Act and those state acts.

13.2.2 It understands that it has no contractual right for the registration under the Securities Act of its Units for public sale and that, unless its Units are registered or an exemption from registration is available, its Units may be required to be held indefinitely.

(a) all certificates and other instruments (specifically including counterparts of this Agreement), and any amendment thereof, that the Board of Managers deems appropriate to qualify or continue the Company as a limited liability company in any jurisdiction in which the Company may conduct business or in which such qualification or continuation is, in the opinion of the Board of Managers, necessary to protect the limited liability of the Members;

(b) all amendments to this Agreement adopted in accordance with the terms hereof and all instruments that the Board of Managers deems appropriate to reflect a change or modification of the Company in accordance with the terms of this Agreement; and

(c) all conveyances and other instruments that the Board of Managers deems appropriate to reflect the dissolution of the Company.

The appointment by each Member of each member of the Board of Managers and/or any Person designated by the Board of Managers as its attorney-in-fact shall be deemed to be a power coupled with an interest, in recognition of the fact that each of the Members under this Agreement will be relying upon the power of the Board of Managers to act as contemplated by this Agreement in any filing and other action by it on behalf of the Company, and shall survive and shall not be affected by the subsequent disability, incapacity, the bankruptcy, dissolution, death, adjudication of incompetence or insanity of any Member giving such power and the transfer or assignment of all or any part of such Member's Units; provided, however, that in the event of a Transfer by a Member of all of its Units, the power of attorney given by the transferor shall survive such assignment only until such time as the Assignee shall have been admitted to the Company as a substituted Member and all required documents and instruments shall have been duly executed, filed and recorded to effect such substitution.

[Remainder of page intentionally left blank.]

IN WITNESS WHEREOF, the parties have executed this Limited Liability Company Agreement as of the day and year first set forth above.

MEMBERS:

PENN OCTANE CORPORATION

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

                                   SCHEDULE I
                                   ----------


Members:                 Capital Contributions    Units   Per Unit Value
-----------------------  ----------------------  -------  --------------
Penn Octane Corporation  $1,000                  100,000  $.01

Schedule I-1

(i) credit to such Capital Account any amounts which such Member is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to the next to the last sentences of Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5) after taking into account any changes during such year in Company minimum gain and Member minimum gain (as determined under such Regulations); and

(ii) debit to such Capital Account the items described in Section 1.704-1
(b)(2)(1)(d)(4), (5) and (6) of the Regulations.

Exhibit 1-1

exchange or other disposition of any Company asset. Such Book Gain or Book Loss shall be computed by reference to the Book Value of such asset as of the date of such sale, exchange or other disposition, rather than by reference to the tax basis of such asset as of such date, and each and every reference herein to "gain" or "loss" shall be deemed to refer to Book Gain or Book Loss, rather than to tax gain or tax loss, unless otherwise expressly provided herein.

Exhibit 1-2

for tax purposes with respect to such asset for the applicable period bears to the adjusted tax basis of such asset at the beginning of such period, or if such asset has a zero adjusted tax basis, Depreciation shall be an amount determined under any reasonable method selected by the Board of Managers, with the advice of its independent accountants.

Exhibit 1-3

in accordance with Section 703(a) of the Code (taking into account all items of income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a)(1) of the Code), with the following adjustments:

(i) any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Profit or Net Loss pursuant to this provision shall be added to such taxable income or loss;

(ii) any expenditures of the Company described in Section 705(a)(2)(B) of the Code (relating to expenditures which are neither deductible nor properly chargeable to capital) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Section 1.704-1(b)(2)(iv)(i) of the Regulations, and not otherwise taken into account in computing Net Profit or Net Loss pursuant to this provision, shall be subtracted from such taxable income or loss;

(iii) Book Gain or Book Loss from the sale or other disposition of any asset of the Company shall be taken into account in lieu of any tax gain or tax loss recognized by the Company by reason of such sale or other disposition; and

(iv) in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such fiscal year or other period, computed as provided in this Agreement.

Exhibit 1-4

or issuance of Units) that results in the Members immediately prior to such transaction not holding, directly or indirectly, at least 50% of the voting power of the surviving or continuing entity.

Exhibit 1-5

The Members hereby appoint the following individuals as the members of the Board of Managers:

RICHARD SHORE, JR.

JEROME B. RICHTER

MURRAY J. FEIWELL

RICARDO RODRIGUEZ CANNEY

DOUGLAS MANNER

Exhibit 5.1-1

The scope of this Policy is intended to be applied broadly so as to include any and all disputes, controversies and claims that touch upon any incentive plan, partnership agreement or other plan, document or agreement covered by this Policy, whether such disputes, controversies or claims involve a breach of contract, contract interpretation, tort law, common law principles or statutes, rules or regulations.

Exhibit 15.5-1

Exhibit 5.1-2

Exhibit 5.1-3

of the Party offering the affidavit, the affiant is unavailable and the interests of justice require consideration of the evidence submitted by the affiant.

Exhibit 5.1-4

the extent, necessary to cure any defect affecting enforceability of the duty to arbitrate under the Federal Arbitration Act, it being the intent of the Parties to resolve any dispute by arbitration.

Exhibit 5.1-5

RIO VISTA GP LLC

VOTING AGREEMENT

______________, 2004

VOTING AGREEMENT

WHEREAS, immediately prior to the date hereof, Penn Octane was the owner of on hundred percent (100%) of the limited liability company interests of the Company (the "PENN OCTANE INTEREST").

WHEREAS, pursuant to option agreements dated July 10, 2003, Penn Octane granted each Member the right (the "PURCHASE RIGHT") to purchase twenty-five percent (25%) of the Penn Octane Interest at an exercise price equal to the pro rata portion of the tax basis capital the Partnership (as defined in Section 1.4 of this Agreement) after the distribution of the common units of the Partnership to the stockholders of Penn Octane.

WHEREAS, the exercise of the Purchase Right is conditioned upon the execution and delivery of this Agreement by each Member.

NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants, and conditions set forth in this Agreement, the Purchase Right and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

1.1 Voting by Member for Managers. From and after the date hereof and until the provisions of this Section 1 cease to be effective, at each meeting of the members of the Company, or at any meeting of the members of the Company at which members of the Board of Managers of the Company (the "BOARD") are to be elected, or whenever members of the Board are to be elected by the members of the Company by written consent, each Member agrees to vote or act with respect to all of his, her or its limited liability company interests in the Company and shall take all other necessary or desirable actions within such Member's control whether in such capacity as a Member, manager of the Company, officer of the Company, or otherwise (including, without limitation, attendance at meetings, in person or by proxy, for purposes of

obtaining a quorum and execution of written consents), and the Company agrees to take all necessary and desirable actions within its control, so as to:

1.1.1     fix  the number of members of the Board (the "MANAGERS"
          and  each,  individually,  a  "MANAGER") at such number
          designated  by  Penn  Octane;  and

1.1.2     elect each and every Manager designated by Penn Octane.

1.2 Removal and Substitution of Members of the Board. Each Member agrees to vote or act with respect to all of his, her or its limited liability company interests in the Company for the removal of any member of the Board upon the request of Penn Octane and for the election to the Board of a substitute nominated by Penn Octane in accordance with the provisions of Section 1.1. Each Member agrees that no Manager may be removed from office without the approval of Penn Octane. Each Member further agrees to vote or act with respect to all of his, her or its limited liability company interests in the Company in such manner as shall be necessary or appropriate to ensure that any vacancy on the Board occurring for any reason shall be filled only in accordance with the provisions of Section 1.1.

1.3 Voting by Member on All Other Matters. From and after the date hereof and until the provisions of this Section 1 cease to be effective, at each meeting of the members of the Company, or whenever members of the Company are to take action by written consent, each Member agrees to vote or act with respect to all of his, her or its limited liability company interests in the Company as directed by Penn Octane and shall take all other necessary or desirable actions within such Member's control whether in such capacity as a Member, Manager, officer of the Company, or otherwise (including, without limitation, attendance at meetings, in person or by proxy, for purposes of obtaining a quorum and execution of written consents), and the Company agrees to take all necessary and desirable actions within its control, as directed by Penn Octane.

1.4 Exceptions. The provisions of Section 1.3 of this Agreement do not apply with respect to any matter involving (a) the sale, transfer, assignment, pledge, hypothecation or other disposal of all or any portion of (i) any general partner interest (the "GENERAL PARTNER INTEREST") in Rio Vista Energy Partners L.P., a Delaware limited partnership (the "PARTNERSHIP"), or (ii) any Incentive Distribution Rights (as defined in the First Amended and Restated Agreement of Limited Partnership of Rio Vista Energy Partners L.P. (the "PARTNERSHIP AGREEMENT")) or (b) the merger, consolidation or sale of all or substantially all of the assets of the Partnership, its subsidiaries or the Company.

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A VOTING AGREEMENT DATED AS OF ______________, 2004, ENTERED INTO BY AND AMONG THE COMPANY, PENN OCTANE AND CERTAIN OF THE COMPANY'S MEMBERS, AND BY ACCEPTING THESE SECURITIES, THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID VOTING AGREEMENT. A COPY OF SUCH VOTING AGREEMENT WILL BE FURNISHED, WITHOUT CHARGE, BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST."

The Company will imprint such legend on all certificates representing limited liability company interests outstanding prior to the date hereof.

5.1 "PERSON" means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, and a governmental entity or any department, agency, or political subdivision thereof.

5.2 "TRANSFER" means the sale, transfer, assignment, pledge, hypothecation or other disposal.

5.3 "TRANSFEREE" shall mean the recipient of a transfer.

6.1 Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by facsimile or electronic mail or otherwise delivered by hand or by messenger addressed as follows:

(1) if to a Member or Penn Octane, at the Member's or Penn Octane's, as applicable, address, facsimile number or electronic mail address as shown in the Company's records, as may be updated in accordance with the provisions hereof.

(2) if to the Company, one copy should be sent to its address or facsimile number set forth on the signature page of this Agreement and addressed to the attention of the President, or at such other address or facsimile number as the Company shall have furnished to the Members.

Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given when delivered if delivered personally, or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid or, if sent by facsimile, upon confirmation of facsimile transfer.

6.2 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

6.3 Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision, and the parties agree to negotiate, in good faith, a legal and enforceable substitute provision which most nearly effects the parties' intent in entering into this Agreement.

6.4 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of (i) the Company, (ii) each Member and (iii) Penn Octane. Any such amendment, waiver, discharge or termination effected in accordance with this paragraph shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding (including securities into which such securities have been converted or exchanged or for which such securities have been exercised) and each future holder of all such securities.

6.5 Governing Law. This Agreement shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within Delaware.

6.6 Specific Performance. The rights of the parties under this Agreement are unique and, accordingly, the parties shall, in addition to such other remedies as may be available to any of them at law or in equity, have the right to enforce their rights hereunder by actions for specific performance to the extent permitted by law.

6.7 Counterparts. This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, will be deemed an original, and all such counterparts together will constitute one and the same instrument.

6.8 Conflict. In the event of any conflict between the terms of this Agreement and the Company's Limited Liability Company Agreement, the Partnership Agreement or any other agreement to which the Company, Penn Octane or a Member is bound, the terms of this Agreement will control.

6.9 Attorney's Fees. In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from

the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

6.10 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. All references in this Agreement to sections, paragraphs, exhibits and schedules shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits and schedules attached hereto.

6.11 Entire Agreement. This Agreement constitutes the full and entire understanding and agreement among the parties with regard to the subject matter hereof and supercedes and replaces any prior verbal or written understandings, communications, or representations between the Parties in relation to the subject matter of this Agreement.

6.12 Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.

6.13 Delays or Omissions. Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement, shall be cumulative and not alternative.

6.14 Telecopy Execution and Delivery. A facsimile, telecopy or other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

6.15 Jurisdiction; Venue. With respect to any disputes arising out of or related to this Agreement, the parties consent to the exclusive jurisdiction of, and venue in, the state or federal courts in Harris County in the State of Texas.

6.16 Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT.

6.17 Further Assurances; Instruments. Each of the Members, Penn Octane and the Company agree not to vote any of their respective limited liability interests in the Company, or to take any other actions, that would in any manner defeat, impair, be inconsistent with or adversely affect the rights of the parties under Section 1 of this Agreement. From time to time, each party hereto shall execute and deliver such instruments and documents as may be reasonably necessary to carry out the purposes and intent of this Agreement.

(Signatures on following page.)

IN WITNESS WHEREOF, the undersigned or each of their respective duly authorized officers or representatives have set their hands hereunto effective upon the date first above written.

COMPANY:                                     PENN OCTANE:

RIO VISTA GP LLC                             PENN OCTANE CORPORATION
a Delaware limited liability company         a Delaware corporation


By:                                          By:
   ---------------------------------            --------------------------------
     Richard Shore, Jr.                            Jerome B. Richter
     President                                     Chief Executive Officer
820 Gessner Road
Suite 1250
Houston, Texas  77024                        THE MEMBERS:

                                             SHORE CAPITAL LLC

                                             By:
                                                --------------------------------
                                                   Richard Shore, Jr., President


                                             -----------------------------------
                                             Jerome B. Richter

[Signature Page to Voting Agreement]

FIRST AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

RIO VISTA OPERATING PARTNERSHIP L.P.

                                TABLE OF CONTENTS

                                                                            PAGE


ARTICLE I     DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .1
     Section 1.1     Definitions. . . . . . . . . . . . . . . . . . . . . . . .1
     Section 1.2     Construction . . . . . . . . . . . . . . . . . . . . . . .9

ARTICLE II     ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . 10
     Section 2.1     Formation. . . . . . . . . . . . . . . . . . . . . . . . 10
     Section 2.2     Name . . . . . . . . . . . . . . . . . . . . . . . . . . 10
     Section 2.3     Registered Office; Registered Agent; Principal Office;
                     Other Offices. . . . . . . . . . . . . . . . . . . . . . 10
     Section 2.4     Purpose and Business . . . . . . . . . . . . . . . . . . 10
     Section 2.5     Powers . . . . . . . . . . . . . . . . . . . . . . . . . 11
     Section 2.6     Power of Attorney. . . . . . . . . . . . . . . . . . . . 11
     Section 2.7     Term . . . . . . . . . . . . . . . . . . . . . . . . . . 12
     Section 2.8     Title to Partnership Assets. . . . . . . . . . . . . . . 12

ARTICLE III     RIGHTS OF LIMITED PARTNERS. . . . . . . . . . . . . . . . . . 13
     Section 3.1     Limitation of Liability. . . . . . . . . . . . . . . . . 13
     Section 3.2     Management of Business . . . . . . . . . . . . . . . . . 13
     Section 3.3     Outside Activities of the Limited Partners . . . . . . . 13
     Section 3.4     Rights of Limited Partners . . . . . . . . . . . . . . . 13

ARTICLE IV     TRANSFERS OF PARTNERSHIP INTERESTS . . . . . . . . . . . . . . 14
     Section 4.1     Transfer Generally . . . . . . . . . . . . . . . . . . . 14
     Section 4.2     Transfer of General Partner's General Partner
                     Interest . . . . . . . . . . . . . . . . . . . . . . . . 15
     Section 4.3     Transfer of a Limited Partner's Partnership Interest . . 15
     Section 4.4     Restrictions on Transfers. . . . . . . . . . . . . . . . 15

ARTICLE V     CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS . . 16
     Section 5.1     Initial Contributions. . . . . . . . . . . . . . . . . . 16
     Section 5.2     Contributions Pursuant to the Contribution Agreement . . 16
     Section 5.3     Additional Capital Contributions . . . . . . . . . . . . 16
     Section 5.4     Interest and Withdrawal. . . . . . . . . . . . . . . . . 16
     Section 5.5     Capital Accounts . . . . . . . . . . . . . . . . . . . . 17


                                      -i-

                                TABLE OF CONTENTS
                                  (continued)

                                                                            PAGE

     Section 5.6     Loans from Partners. . . . . . . . . . . . . . . . . . . 19
     Section 5.7     Issuances of Additional Partnership Securities . . . . . 19
     Section 5.8     Limited Preemptive Rights. . . . . . . . . . . . . . . . 20
     Section 5.9     Fully Paid and Non-Assessable Nature of Limited
                     Partner Interests. . . . . . . . . . . . . . . . . . . . 20

ARTICLE VI     ALLOCATIONS AND DISTRIBUTIONS. . . . . . . . . . . . . . . . . 21
     Section 6.1     Allocations for Capital Account Purposes . . . . . . . . 21
     Section 6.2     Allocations for Tax Purposes . . . . . . . . . . . . . . 24
     Section 6.3     Distributions. . . . . . . . . . . . . . . . . . . . . . 26

ARTICLE VII     MANAGEMENT AND OPERATION OF BUSINESS. . . . . . . . . . . . . 27
     Section 7.1     Management . . . . . . . . . . . . . . . . . . . . . . . 27
     Section 7.2     Certificate of Limited Partnership . . . . . . . . . . . 29
     Section 7.3     Restrictions on the General Partner's Authority. . . . . 29
     Section 7.4     Reimbursement of the General Partner . . . . . . . . . . 30
     Section 7.5     Outside Activities . . . . . . . . . . . . . . . . . . . 30
     Section 7.6     Loans from the General Partner; Loans or
                     Contributions from the Partnership; Contracts
                     with Affiliates; Certain Restrictions on the General
                     Partner. . . . . . . . . . . . . . . . . . . . . . . . . 31
     Section 7.7     Indemnification. . . . . . . . . . . . . . . . . . . . . 33
     Section 7.8     Liability of Indemnitees . . . . . . . . . . . . . . . . 35
     Section 7.9     Resolution of Conflicts of Interest. . . . . . . . . . . 35
     Section 7.10    Other Matters Concerning the General Partner . . . . . . 37
     Section 7.11    Reliance by Third Parties. . . . . . . . . . . . . . . . 37

ARTICLE VIII     BOOKS, RECORDS AND ACCOUNTING. . . . . . . . . . . . . . . . 38
     Section 8.1     Records and Accounting . . . . . . . . . . . . . . . . . 38
     Section 8.2     Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . 38

ARTICLE IX     TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . 38
     Section 9.1     Tax Returns and Information. . . . . . . . . . . . . . . 38
     Section 9.2     Tax Elections. . . . . . . . . . . . . . . . . . . . . . 39
     Section 9.3     Tax Controversies. . . . . . . . . . . . . . . . . . . . 39
     Section 9.4     Withholding. . . . . . . . . . . . . . . . . . . . . . . 39

ARTICLE X     ADMISSION OF PARTNERS . . . . . . . . . . . . . . . . . . . . . 39


                                      -ii-

                                TABLE OF CONTENTS
                                  (continued)

                                                                            PAGE

     Section 10.1    Admission of Partners. . . . . . . . . . . . . . . . . . 39
     Section 10.2    Admission of Substituted Limited Partner . . . . . . . . 40
     Section 10.3    Admission of Additional Limited Partners . . . . . . . . 40
     Section 10.4    Admission of Successor or Transferee General Partner . . 40
     Section 10.5    Amendment of Agreement and Certificate of Limited
                     Partnership. . . . . . . . . . . . . . . . . . . . . . . 41

ARTICLE XI     WITHDRAWAL OR REMOVAL OF PARTNERS. . . . . . . . . . . . . . . 41
     Section 11.1    Withdrawal of the General Partner. . . . . . . . . . . . 41
     Section 11.2    Removal of the General Partner . . . . . . . . . . . . . 42
     Section 11.3    Interest of Departing Partner. . . . . . . . . . . . . . 43
     Section 11.4    Withdrawal of a Limited Partner. . . . . . . . . . . . . 43

ARTICLE XII     DISSOLUTION AND LIQUIDATION . . . . . . . . . . . . . . . . . 43
     Section 12.1    Dissolution. . . . . . . . . . . . . . . . . . . . . . . 43
     Section 12.2    Continuation of the Business of the Partnership After
                     Dissolution. . . . . . . . . . . . . . . . . . . . . . . 44
     Section 12.3    Liquidator . . . . . . . . . . . . . . . . . . . . . . . 45
     Section 12.4    Liquidation. . . . . . . . . . . . . . . . . . . . . . . 45
     Section 12.5    Cancellation of Certificate of Limited Partnership . . . 46
     Section 12.6    Return of Contributions. . . . . . . . . . . . . . . . . 46
     Section 12.7    Waiver of Partition. . . . . . . . . . . . . . . . . . . 46
     Section 12.8    Capital Account Restoration. . . . . . . . . . . . . . . 46

ARTICLE XIII     AMENDMENT OF PARTNERSHIP AGREEMENT . . . . . . . . . . . . . 47
     Section 13.1    Amendment to be Adopted Solely by the General
                     Partner. . . . . . . . . . . . . . . . . . . . . . . . . 47
     Section 13.2    Amendment Procedures . . . . . . . . . . . . . . . . . . 48

ARTICLE XIV     MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
     Section 14.1    Authority. . . . . . . . . . . . . . . . . . . . . . . . 48
     Section 14.2    Procedure for Merger or Consolidation. . . . . . . . . . 48
     Section 14.3    Approval by Limited Partners of Merger or
                     Consolidation. . . . . . . . . . . . . . . . . . . . . . 49
     Section 14.4    Certificate of Merger. . . . . . . . . . . . . . . . . . 50
     Section 14.5    Effect of Merger . . . . . . . . . . . . . . . . . . . . 50

ARTICLE XV     GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 51
     Section 15.1    Addresses and Notices. . . . . . . . . . . . . . . . . . 51


                                      -iii-

                                TABLE OF CONTENTS
                                  (continued)

                                                                            PAGE

     Section 15.2    Further Action . . . . . . . . . . . . . . . . . . . . . 51
     Section 15.3    Binding Effect . . . . . . . . . . . . . . . . . . . . . 51
     Section 15.4    Integration. . . . . . . . . . . . . . . . . . . . . . . 51
     Section 15.5    Creditors. . . . . . . . . . . . . . . . . . . . . . . . 51
     Section 15.6    Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 51
     Section 15.7    Counterparts . . . . . . . . . . . . . . . . . . . . . . 51
     Section 15.8    Applicable Law . . . . . . . . . . . . . . . . . . . . . 52
     Section 15.9    Invalidity of Provisions . . . . . . . . . . . . . . . . 52
     Section 15.10   Consent of Partners. . . . . . . . . . . . . . . . . . . 52

FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
RIO VISTA OPERATING PARTNERSHIP L.P.

ARTICLE I

DEFINITIONS

from and after the date on which such General Partner Interest or other interest in the Partnership was first issued.

(a) the sum of (i) all cash and cash equivalents of the Partnership on hand at the end of such Quarter, and (ii) all additional cash and cash equivalents of the Partnership on hand on the date of determination of Available Cash with respect to such Quarter resulting from Working Capital Borrowings made subsequent to the end of such Quarter, less

(b) the amount of any cash reserves that is necessary or appropriate in the reasonable discretion of the General Partner to (i) provide for the proper conduct of the business of the Partnership (including reserves for future capital expenditures and for anticipated future credit needs of the Partnership) subsequent to such Quarter, (ii) comply with applicable law or any loan agreement, security agreement, mortgage, debt instrument or other agreement or obligation to which any Group Member is a party or by which it is bound or its assets are subject or (iii) provide funds for distributions under Section 6.4 or 6.5 of the MLP Agreement in respect of any one or more of the next four Quarters; provided, however, that the General Partner may not establish cash reserves pursuant to (iii) above if the effect of such reserves would be that the MLP is unable to distribute the Minimum Quarterly Distribution on all Common Units, plus any Cumulative Common Unit Arrearage on all Common Units, with respect to such Quarter; and, provided further, that disbursements made by a Group Member or cash reserves established, increased or reduced after the end of such Quarter but on or before the date of determination of Available Cash with respect to such Quarter shall be deemed to have been made, established, increased or reduced, for purposes of determining Available Cash, within such Quarter if the General Partner so determines.

Notwithstanding the foregoing, "Available Cash" with respect to the Quarter in which the Liquidation Date occurs and any subsequent Quarter shall equal zero.

of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has
(i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person.

ARTICLE II

ORGANIZATION

income" (as such term is defined pursuant to Section 7704 of the Code) or (ii) enhances the operations of an activity of the Partnership that generates qualifying income, and (d) do anything necessary or appropriate to the foregoing, including the making of capital contributions or loans to a Group Member, the MLP or any Subsidiary of the MLP. The General Partner has no obligation or duty to the Partnership, the Limited Partners or the Assignees to propose or approve, and in its discretion may decline to propose or approve, the conduct by the Partnership of any business.

(ii) execute, swear to, acknowledge, deliver, file and record all ballots, consents, approvals, waivers, certificates, documents and other instruments necessary or appropriate, in the discretion of the General Partner or the Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action that is made or given by

(b) The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive and, to the maximum extent permitted by law, not be affected by the subsequent death, incompetency, disability, incapacity, dissolution, bankruptcy or termination of any Limited Partner or Assignee and the transfer of all or any portion of such Limited Partner's or Assignee's Partnership Interest and shall extend to such Limited Partner's or Assignee's heirs, successors, assigns and personal representatives. Each such Limited Partner or Assignee hereby agrees to be bound by any representation made by the General Partner or the Liquidator acting in good faith pursuant to such power of attorney; and each such Limited Partner or Assignee, to the maximum extent permitted by law, hereby waives any and all defenses that may be available to contest, negate or disaffirm the action of the General Partner or the Liquidator taken in good faith under such power of attorney. Each Limited Partner or Assignee shall execute and deliver to the General Partner or the Liquidator, within 15 days after receipt of the request therefor, such further designation, powers of attorney and other instruments as the General Partner or the Liquidator deems necessary to effectuate this Agreement and the purposes of the Partnership.

conveyancing makes transfer of record title to the Partnership impracticable) to be vested in the Partnership as soon as reasonably practicable; provided, further, that, prior to any withdrawal or removal of the General Partner or as soon thereafter as practicable, the General Partner shall use reasonable efforts to effect the transfer of record title to the Partnership and, prior to any such transfer, will provide for the use of such assets in a manner satisfactory to the General Partner. All Partnership assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which record title to such Partnership assets is held.

ARTICLE III

RIGHTS OF LIMITED PARTNERS

(i) promptly after becoming available, to obtain a copy of the Partnership's federal, state and local income tax returns for each year;

(ii) to have furnished to him a current list of the name and last known business, residence or mailing address of each Partner;

(iii) to have furnished to him a copy of this Agreement and the Certificate of Limited Partnership and all amendments thereto, together with a copy of the executed copies of all powers of attorney pursuant to which this Agreement, the Certificate of Limited Partnership and all amendments thereto have been executed;

(iv) to obtain true and full information regarding the amount of cash and a description and statement of the Net Agreed Value of any other Capital Contribution by each Partner and that each Partner has agreed to contribute in the future, and the date on which each became a Partner; and

(v) to obtain such other information regarding the affairs of the Partnership as is just and reasonable; and

(vi) to obtain true and full information regarding the status of the business and financial condition of the Partnership.

ARTICLE IV

TRANSFERS OF PARTNERSHIP INTERESTS

(a) The term "transfer," when used in this Agreement with respect to a Partnership Interest, shall be deemed to refer to a transaction by which a General Partner assigns its General Partner Interest to another Person who becomes the General Partner or by which the holder of a Limited Partner Interest assigns such Limited Partner Interest to another Person who is or becomes a Limited Partner (or an Assignee), and includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise.

(c) Nothing contained in this Agreement shall be construed to prevent a disposition by any member of the General Partner of any or all of the issued and outstanding member interests of the General Partner.

terminate the existence or qualification of the Partnership or the MLP under the laws of the jurisdiction of its formation or (iii) cause the Partnership or the MLP to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes (to the extent not already so treated or taxed).

(b) The General Partner may impose restrictions on the transfer of Partnership Interests if a subsequent Opinion of Counsel determines that such restrictions are necessary to avoid a significant risk of the Partnership or the MLP becoming taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes. The restrictions may be imposed by making such amendments to this Agreement as the General Partner may determine to be necessary or appropriate to impose such restrictions.

ARTICLE V

CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS

(a) Pursuant to the Contribution Agreement, Penn Octane Corporation shall contribute to the Partnership all of its right, title and interest in the Assets as a Capital Contribution.

(b) Penn Octane Corporation then, pursuant to the Contribution Agreement, shall contribute its 99.9% Limited Partner Interest in the Partnership to the MLP as a capital contribution.

(c) Following the foregoing transactions, the General Partner will continue to own a 0.10% General Partner Interest, the MLP will own a 99.9% Limited Partner Interest and shall be admitted as a Limited Partner and Penn Octane Corporation shall no longer own any Partnership Interest and shall withdraw as a Limited Partner.

(iii) Except as otherwise provided in Treasury Regulation
Section 1.704-1(b)(2)(iv)(m), computation of all items of income, gain, loss and deduction shall be made without regard to any election under Section 754 of the Code that may be made by the Partnership and, as to those items described in
Section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without regard to the fact that such items are not includable in gross income or are neither currently deductible nor capitalized for federal income tax purposes. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to
Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment in the Capital Accounts shall be treated as an item of gain or loss.

(iv) Any income, gain or loss attributable to the taxable disposition of any Partnership property shall be determined as if the adjusted basis of such property as of such date of disposition were equal in amount to the Partnership's Carrying Value with respect to such property as of such date.

(c) A transferee of a Partnership Interest shall succeed to a pro rata portion of the Capital Account of the transferor relating to the Partnership Interest so transferred.

(d) (i) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an issuance of additional Partnership Interests for cash or Contributed Property, the Capital Accounts of all Partners and the Carrying Value of each Partnership property immediately prior to such issuance shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property, as if such

(a) The Partnership may issue additional Partnership Securities and options, rights, warrants and appreciation rights relating to the Partnership Securities for any Partnership purpose at any time and from time to time to such Persons for such consideration and on such terms and conditions as shall be established by the General Partner in its sole discretion. The

issuance by the Partnership of Partnership Securities or rights, warrants or appreciation rights in respect thereof shall be deemed an amendment to this Agreement.

ARTICLE VI

ALLOCATIONS AND DISTRIBUTIONS

(ii) Second, 0.10% to the General Partner and 99.9% to the Limited Partners in accordance with their respective Percentage Interests.

(ii) Second, the balance, if any, 100% to the General Partner.

(A) First, to each Partner having a deficit balance in its Capital Account, in the proportion that such deficit balance bears to the total deficit balances in the Capital Accounts of all Partners, until each such Partner has been allocated Net Termination Gain equal to any such deficit balance in its Capital Account; and

(B) Second, 0.10% to the General Partner and 99.9% to the Limited Partners, in accordance with their respective Percentage Interests.

(A) First, to the General Partner and the Limited Partners in proportion to, and to the extent of, the positive balances in their respective Capital Accounts; and

(B) Second, the balance, if any, 100% to the General Partner.

      ------------                                       ------------------
not  in  this  Agreement.

Nonrecourse Built-in Gain shall be allocated among the Partners in accordance with their respective Percentage Interests.

(b) In an attempt to eliminate Book-Tax Disparities attributable to a Contributed Property or Adjusted Property, items of income, gain, loss, depreciation, amortization and cost recovery deductions shall be allocated for federal income tax purposes among the Partners as follows:

(iii) The General Partner shall apply the principles of Treasury Regulation Section 1.704-3(d) to eliminate Book-Tax Disparities.

(d) The General Partner in its discretion may determine to depreciate or amortize the portion of an adjustment under Section 743(b) of the Code attributable to unrealized appreciation in any Adjusted Property (to the extent of the unamortized Book-Tax Disparity) using a predetermined rate derived from the depreciation or amortization method and useful life applied to the Partnership's common basis of such property, despite any inconsistency of such approach with Treasury Regulation Section 1.167(c)-l(a)(6) or any successor regulations thereto.

If the General Partner determines that such reporting position cannot reasonably be taken, the General Partner may adopt depreciation and amortization conventions under which all purchasers acquiring limited partner interests of the MLP in the same month would receive depreciation and amortization deductions, based upon the same applicable rate as if they had purchased a direct interest in the Partnership's property. If the General Partner chooses not to utilize such aggregate method, the General Partner may use any other reasonable depreciation and amortization conventions to preserve the uniformity of the intrinsic tax characteristics of any limited partner interests of the MLP that would not have a material adverse effect on the Partners or the holders of any class or classes of limited partner interests of the MLP.

(f) All items of income, gain, loss, deduction and credit recognized by the Partnership for federal income tax purposes and allocated to the Partners in accordance with the provisions hereof shall be determined without regard to any election under Section 754 of the Code that may be made by the Partnership; provided, however, that such allocations, once made, shall be adjusted as necessary or appropriate to take into account those adjustments permitted or required by Sections 734 and 743 of the Code.

(g) The General Partner may adopt such methods of allocation of income, gain, loss or deduction between a transferor and a transferee of a Partnership Interest as it determines necessary or appropriate in its sole discretion, to the extent permitted or required by Section 706 of the Code and the regulations or rulings promulgated thereunder.

(c) The General Partner shall have the discretion to treat taxes paid by the Partnership on behalf of, or amounts withheld with respect to, all or less than all of the Partners, as a distribution of Available Cash to such Partners.

ARTICLE VII

MANAGEMENT AND OPERATION OF BUSINESS

(i) the making of any expenditures, the lending or borrowing of money, the assumption or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance of evidences of indebtedness, including indebtedness that is convertible into a Partnership Interest, and the incurring of any other obligations;

(ii) the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or assets of the Partnership;

(v) the negotiation, execution and performance of any contracts, conveyances or other instruments (including instruments that limit the liability of the Partnership under contractual arrangements to all or particular assets of the Partnership, with the other party to the contract to have no recourse against the General Partner or its assets other than its interest in the Partnership, even if same results in the terms of the transaction being less favorable to the Partnership than would otherwise be the case);

(vi) the distribution of Partnership cash;

(vii) the selection and dismissal of employees (including employees having titles such as "president," "vice president," "secretary" and "treasurer") and agents, outside attorneys, accountants, consultants and contractors and the determination of their compensation and other terms of employment or hiring;

(viii) the maintenance of such insurance for the benefit of the Partnership Group and the Partners as it deems necessary or appropriate;

(x) the control of any matters affecting the rights and obligations of the Partnership, including the bringing and defending of actions at law or in equity and otherwise engaging in the conduct of litigation and the incurring of legal expense and the settlement of claims and litigation; and

(xi) the indemnification of any Person against liabilities and contingencies to the extent permitted by law.

by the General Partner of any duty that the General Partner may owe the Partnership or the Limited Partners or any other Persons under this Agreement (or any other agreements) or of any duty stated or implied by law or equity.

(a) The General Partner may not, without written approval of the specific act by the Limited Partners or by other written instrument executed and delivered by the Limited Partners subsequent to the date of this Agreement, take any action in contravention of this Agreement, including, except as otherwise provided in this Agreement, (i) committing any act that would make it impossible to carry on the ordinary business of the Partnership; (ii) possessing Partnership property, or assigning any rights in specific Partnership property, for other than a Partnership purpose; (iii) admitting a Person as a Partner;
(iv) amending this Agreement in any manner; or (v) transferring its General Partner Interest.

(a) After the Closing Date, the General Partner, for so long as it is the General Partner of the Partnership, (i) agrees that its sole business will be to act as the General Partner of the Partnership and a general partner or managing member, as the case may be, of any other partnership or limited liability company of which the Partnership is, directly or indirectly, a partner or member, and to undertake activities that are ancillary or related thereto, and (ii) shall not engage in any business or activity or incur any debts or liabilities except in connection with or incidental to (A) its performance as general partner of the Partnership or one or more Group Members or as described in or contemplated by the Registration Statement or (B) the acquiring, owning or disposing of debt or equity securities in any Group Member.

(d) The General Partner and any of its Affiliates may acquire Units or other MLP Securities in addition to those acquired on the Closing Date and, except as otherwise provided in this Agreement, shall be entitled to exercise all rights relating to such Units or MLP Securities.

(a) The General Partner or any of its Affiliates may lend to the Partnership, the MLP or any Group Member, and the Partnership, the MLP or any Group Member may

(b) The Partnership may lend or contribute to any Group Member, and any Group Member may borrow from the Partnership, funds on terms and conditions established in the sole discretion of the General Partner; provided, however, that the Partnership may not charge the Group Member interest at a rate less than the rate that would be charged to the Group Member (without reference to the General Partner's financial abilities or guarantees) by unrelated lenders on comparable loans. The foregoing authority shall be exercised by the General Partner in its sole discretion and shall not create any right or benefit in favor of any Group Member or any other Person.

(d) The Partnership Group may transfer assets to joint ventures, other partnerships, corporations, limited liability companies or other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions as are consistent with this Agreement and applicable law.

the Partnership than those generally being provided to or available from unrelated third parties, or (iv) any transaction that, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to the Partnership Group), is equitable to the Partnership.

(f) The General Partner and its Affiliates will have no obligation to permit any Group Member to use any facilities or assets of the General Partner and its Affiliates, except as may be provided in contracts entered into from time to time specifically dealing with such use, nor shall there be any obligation on the part of the General Partner or its Affiliates to enter into such contracts.

(d) The Partnership may purchase and maintain (or reimburse the General Partner or its Affiliates for the cost of) insurance, on behalf of the General Partner, its Affiliates and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expense that may be incurred by such Person in connection with the Partnership's activities or such Person's activities on behalf of the Partnership, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.

(f) In no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.

(a) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the Partnership, the Limited Partners, the Assignees or any other Persons who have acquired interests in the Units or other MLP Securities, for losses sustained or liabilities incurred as a result of any act or omission if such Indemnitee acted in good faith.

(c) To the extent that, at law or in equity, an Indemnitee has duties (including fiduciary duties) and liabilities relating thereto to the Partnership or to the Partners, the General Partner and any other Indemnitee acting in connection with the Partnership's business or affairs shall not be liable to the Partnership or to any Partner for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict or otherwise modify the duties and liabilities of an Indemnitee otherwise existing at law or in equity, are agreed by the Partners to replace such other duties and liabilities of such Indemnitee.

(a) Unless otherwise expressly provided in this Agreement or the MLP Agreement, whenever a potential conflict of interest exists or arises between the General Partner or any of its Affiliates, on the one hand, and the Partnership, the MLP, any Partner or any Assignee, on the other, any resolution or course of action by the General Partner or its Affiliates in respect of such conflict of interest shall be permitted and deemed approved by all Partners, and shall not constitute a breach of this Agreement, of the MLP Agreement, of any agreement contemplated herein or therein, or of any duty stated or implied by law or equity, if the resolution or course of action is, or by operation of this Agreement is deemed to be, fair and reasonable to the Partnership. The General Partner shall be authorized but not required in connection with its resolution of such conflict of interest to seek Special Approval of such resolution and the General Partner may also adopt a resolution or course of action that has not received Special Approval. Any Special Approval shall be subject to the presumption that, in making its decision, the Conflicts Committee acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the Partnership and the MLP and, in any proceeding

brought by any Limited Partner or by or on behalf of such Limited Partner or any other Limited Partners or the Partnership challenging such approval, the Person bringing or prosecuting such proceeding shall have the burden of overcoming such presumption. Any conflict of interest and any resolution of such conflict of interest shall be conclusively deemed fair and reasonable to the Partnership if such conflict of interest or resolution is (i) approved by Special Approval,
(ii) on terms no less favorable to the Partnership than those generally being provided to or available from unrelated third parties or (iii) fair to the Partnership, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to the Partnership). The General Partner may also adopt a resolution or course of action that has not received Special Approval. The General Partner shall be authorized in connection with its determination of what is "fair and reasonable" to the Partnership and in connection with its resolution of any conflict of interest to consider (A) the relative interests of any party to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interest; (B) any customary or accepted industry practices and any customary or historical dealings with a particular Person; (C) any applicable generally accepted accounting practices or principles; and (D) such additional factors as the General Partner determines in its sole discretion to be relevant, reasonable or appropriate under the circumstances. In any proceeding brought by any Limited Partner or by or on behalf of such Limited Partner or any other Limited Partners or the Partnership alleging that such a resolution by the General Partner is not fair to the Partnership, such Limited Partner shall have the burden of proof of overcoming such conclusion. Nothing contained in this Agreement, however, is intended to nor shall it be construed to require the General Partner to consider the interests of any Person other than the Partnership. In the absence of bad faith by the General Partner, the resolution, action or terms so made, taken or provided by the General Partner with respect to such matter shall not constitute a breach of this Agreement or any other agreement contemplated herein or a breach of any standard of care or duty imposed herein or therein or, to the extent permitted by law, under the Delaware Act or any other law, rule or regulation.

(b) Whenever this Agreement or any other agreement contemplated hereby provides that the General Partner or any of its Affiliates is permitted or required to make a decision (i) in its "sole discretion" or "discretion," that it deems "necessary or appropriate" or "necessary or advisable" or under a grant of similar authority or latitude, except as otherwise provided herein, the General Partner or such Affiliate shall be entitled to consider only such interests and factors as it desires and shall have no duty or obligation to give any consideration to any interest of, or factors affecting, the Partnership, the MLP, any Limited Partner or any Assignee, (ii) it may make such decision in its sole discretion (regardless of whether there is a reference to "sole discretion" or "discretion") unless another express standard is provided for, or (iii) in "good faith" or under another express standard, the General Partner or such Affiliate shall act under such express standard and shall not be subject to any other or different standards imposed by this Agreement, the MLP Agreement, any other agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation. In addition, any actions taken by the General Partner or such Affiliate consistent with the standards of "reasonable discretion" set forth in the definition of Available Cash shall not constitute a breach of any duty of the General Partner to the Partnership or the Limited Partners. The General Partner shall have no duty, express or implied, to sell or otherwise dispose of any asset of the Partnership Group other than in the ordinary course of business. No borrowing by any Group Member or the approval thereof

by the General Partner shall be deemed to constitute a breach of any duty of the General Partner to the Partnership or the Limited Partners by reason of the fact that the purpose or effect of such borrowing is directly or indirectly to (A) enable distributions to the General Partner or its Affiliates to exceed 0.10% of the total amount distributed to all Partners or (B) hasten the expiration of the Subordination Period or the conversion of any Subordinated Units into Common Units.

(c) Whenever a particular transaction, arrangement or resolution of a conflict of interest is required under this Agreement to be "fair and reasonable" to any Person, the fair and reasonable nature of such transaction, arrangement or resolution shall be considered in the context of all similar or related transactions.

(a) The General Partner may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.

(b) The General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion (including an Opinion of Counsel) of such Persons as to matters that the General Partner reasonably believes to be within such Person's professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.

(c) The General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers, a duly appointed attorney or attorneys-in-fact or the duly authorized officers of the Partnership.

(d) Any standard of care and duty imposed by this Agreement or under the Delaware Act or any applicable law, rule or regulation shall be modified, waived or limited, to the extent permitted by law, as required to permit the General Partner to act under this Agreement or any other agreement contemplated by this Agreement and to make any decision pursuant to the authority prescribed in this Agreement, so long as such action is reasonably believed by the General Partner to be in, or not inconsistent with, the best interests of the Partnership.

otherwise use in any manner any and all assets of the Partnership and to enter into any authorized contracts on behalf of the Partnership, and such Person shall be entitled to deal with the General Partner or any such officer as if it were the Partnership's sole party in interest, both legally and beneficially. Each Limited Partner hereby waives any and all defenses or other remedies that may be available against such Person to contest, negate or disaffirm any action of the General Partner or any such officer in connection with any such dealing. In no event shall any Person dealing with the General Partner or any such officer or its representatives be obligated to ascertain that the terms of the Agreement have been complied with or to inquire into the necessity or expedience of any act or action of the General Partner or any such officer or its representatives. Each and every certificate, document or other instrument executed on behalf of the Partnership by the General Partner or its representatives shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (a) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect, (b) the Person executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership and (c) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership.

ARTICLE VIII

BOOKS, RECORDS AND ACCOUNTING

ARTICLE IX

TAX MATTERS

year in which the Partnership's taxable year ends. The classification, realization and recognition of income, gain, losses and deductions and other items shall be on the accrual method of accounting for federal income tax purposes.

(a) To the extent applicable for federal income tax purposes, the Partnership shall make the election under Section 754 of the Code in accordance with applicable regulations thereunder, subject to the reservation of the right to seek to revoke any such election upon the General Partner's determination that such revocation is in the best interests of the Limited Partners.

(b) To the extent applicable for federal income tax purposes, the Partnership shall elect to deduct expenses incurred in organizing the Partnership ratably over a sixty-month period as provided in Section 709 of the Code.

(c) Except as otherwise provided herein, the General Partner shall determine whether the Partnership should make any other elections permitted by the Code.

ARTICLE X

ADMISSION OF PARTNERS

(a) A Person (other than the General Partner, the MLP or a Substituted Limited Partner) who makes a Capital Contribution to the Partnership in accordance with this Agreement shall be admitted to the Partnership as an Additional Limited Partner only upon furnishing to the General Partner:

(ii) such other documents or instruments as may be required in the discretion of the General Partner to effect such Person's admission as an Additional Limited Partner.

ARTICLE XI

WITHDRAWAL OR REMOVAL OF PARTNERS

(a) The General Partner shall be deemed to have withdrawn from the Partnership upon the occurrence of any one of the following events (each such event herein referred to as an "Event of Withdrawal");

(i) The General Partner voluntarily withdraws from the Partnership by giving written notice to the other Partners;

(v) A final and non-appealable order of relief under Chapter 7 of the United States Bankruptcy Code is entered by a court with appropriate jurisdiction pursuant to a voluntary or involuntary petition by or against the General Partner; or

ARTICLE XII

DISSOLUTION AND LIQUIDATION

(b) an election to dissolve the Partnership by the General Partner that is approved by all of the Limited Partners;

(c) the entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Delaware Act;

(d) the sale of all or substantially all of the assets and properties of the Partnership Group; or

(e) the dissolution of the MLP.

(b) if the successor General Partner is not the former General Partner, then the interest of the former General Partner shall be purchased by the successor General Partner; and

continue the business of the Partnership shall not exist and may not be exercised unless the Partnership has received an Opinion of Counsel that (x) the exercise of the right would not result in the loss of limited liability of the Limited Partners or any limited partner of the MLP and (y) neither the Partnership, the reconstituted limited partnership, the MLP nor any Group Member would be treated as an association taxable as a corporation or otherwise be taxable as an entity for federal income tax purposes upon the exercise of such right to continue.

ARTICLE XIII

AMENDMENT OF PARTNERSHIP AGREEMENT

(a) a change in the name of the Partnership, the location of the principal place of business of the Partnership, the registered agent of the Partnership or the registered office of the Partnership;

(b) admission, substitution, withdrawal or removal of Partners in accordance with this Agreement;

(c) a change that, in the sole discretion of the General Partner, is necessary or advisable to qualify or continue the qualification of the Partnership as a limited partnership or a partnership in which the Limited Partners have limited liability under the laws of any state or to ensure that no Group Member will be treated as an association taxable as a corporation or otherwise taxed as an entity for federal income tax purposes;

(d) a change that, in the discretion of the General Partner, (i) does not adversely affect the Limited Partners (including any particular class of Partnership Interests as compared to other classes of Partnership Interests) in any material respect, (ii) is necessary or advisable to (A) satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any federal or state agency or judicial authority or contained in any federal or state statute (including the Delaware Act) or (B) facilitate the trading of limited partner interests of the MLP (including the division of any class or classes of outstanding limited partner interests of the MLP into different classes to facilitate uniformity of tax consequences within such classes of limited partner interests of the MLP) or comply with any rule, regulation, guideline or requirement of any National Securities Exchange on which such limited partner interests are or will be listed for trading, compliance with any of which the General Partner determines in its discretion to be in the best interests of the MLP and the limited partners of the MLP, (iii) is required to effect the intent expressed in the Registration Statement or the intent of the provisions of this Agreement or is otherwise contemplated by this Agreement or (iv) is required to conform the provisions of this Agreement with the provisions of the MLP Agreement as the provisions of the MLP Agreement may be amended, supplemented or restated from time to time;

(e) a change in the fiscal year or taxable year of the Partnership and any changes that, in the discretion of the General Partner, are necessary or advisable as a result of a change in the fiscal year or taxable year of the Partnership including, if the General Partner shall so determine, a change in the definition of "Quarter" and the dates on which distributions are to be made by the Partnership;

(f) an amendment that is necessary, in the Opinion of Counsel, to prevent the Partnership, or the General Partner or its members, directors, officers, trustees or agents from in any manner being subjected to the provisions of the Investment Company Act of 1940, as amended, the Investment Advisers Act of 1940, as amended, or "plan asset" regulations adopted under the Employee Retirement Income Security Act of 1974, as amended, regardless of whether such are substantially similar to plan asset regulations currently applied or proposed by the United States Department of Labor;

(g) any amendment expressly permitted in this Agreement to be made by the General Partner acting alone;

(k) any other amendments substantially similar to the foregoing.

------                                ------------

  Section  14.2     Procedure  for  Merger  or  Consolidation.  Merger  or
                    -----------------------------------------

(a) the names and jurisdictions of formation or organization of each of the business entities proposing to merge or consolidate;

(c) the terms and conditions of the proposed merger or consolidation;

(d) the manner and basis of exchanging or converting the equity securities of each constituent business entity for, or into, cash, property or general or limited partner interests, rights, securities or obligations of the Surviving Business Entity; and (i) if any general or limited partner interests, securities or rights of any constituent business entity are not to be exchanged or converted solely for, or into, cash, property or general or limited partner interests, rights, securities or obligations of the Surviving Business Entity, the cash, property or general or limited partner interests, rights, securities or obligations of any limited partnership, corporation, trust or other entity (other than the Surviving Business Entity) that the holders of such general or limited partner interests, securities or rights are to receive in exchange for, or upon conversion of their general or limited partner interests, securities or rights, and (ii) in the case of securities represented by certificates, upon the surrender of such certificates, which cash, property or general or limited partner interests, rights, securities or obligations of the Surviving Business Entity or any general or limited partnership, corporation, trust or other entity (other than the Surviving Business Entity), or evidences thereof, are to be delivered;

(e) a statement of any changes in the constituent documents or the adoption of new constituent documents (the articles or certificate of incorporation, articles of trust, declaration of trust, certificate or agreement of limited partnership or other similar charter or governing document) of the Surviving Business Entity to be effected by such merger or consolidation;

(g) such other provisions with respect to the proposed merger or consolidation as are deemed necessary or appropriate by the General Partner.

(a) At the effective time of the certificate of merger:

(i) all of the rights, privileges and powers of each of the business entities that has merged or consolidated, and all property, real, personal and mixed, and all debts due to any of those business entities and all other things and causes of action belonging to each of those business entities, shall be vested in the Surviving Business Entity and after the merger or consolidation shall be the property of the Surviving Business Entity to the extent they were of each constituent business entity;

(ii) the title to any real property vested by deed or otherwise in any of those constituent business entities shall not revert and is not in any way impaired because of the merger or consolidation;

(iii) all rights of creditors and all liens on or security interests in property of any of those constituent business entities shall be preserved unimpaired; and

(iv) all debts, liabilities and duties of those constituent business entities shall attach to the Surviving Business Entity and may be enforced against it to the same extent as if the debts, liabilities and duties had been incurred or contracted by it.

(b) A merger or consolidation effected pursuant to this Article shall not be deemed to result in a transfer or assignment of assets or liabilities from one entity to another.

ARTICLE XV

GENERAL PROVISIONS

[Remainder of Page Intentionally Left Blank]

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

GENERAL PARTNER:

RIO VISTA OPERATING GP LLC

By: Rio Vista Energy Partners, L.P.
its Managing Member

By: Rio Vista GP LLC
Its: General Partner

By:  /s/ Richard Shore, Jr.
     -------------------------
         Richard Shore, Jr.,
         President

LIMITED PARTNERS:

PENN OCTANE CORPORATION

By:  /s/ Richard Shore, Jr.
     -------------------------
         Richard Shore, Jr.,
         President

UPON CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED UNDER SECTION 5.2 OF THIS
AGREEMENT:

RIO VISTA ENERGY PARTNERS L.P.

By: Rio Vista GP LLC
Its General Partner

By:  /s/ Richard Shore, Jr.
     -------------------------
         Richard Shore, Jr.,
         President

September 15, 2004

Penn Octane Corporation
77-530 Enfield Lane
Building D
Palm Desert, CA 92211

Attention: Mr. Jerome Richter

Gentlemen:

RZB FINANCE LLC ("RZB") and Penn Octane Corporation (the "Borrower") are parties to a Line Letter dated October 14, 1997 (as heretofore amended, the "Existing Line Letter"). The Borrower and RZB desire to amend and restate the Existing Line Letter. Accordingly, the parties hereto agree that the Existing Line Letter is hereby amended and restated in its entirety as hereinafter set forth in this Agreement (as amended, modified or supplemented from time to time, "this Agreement" or "this letter agreement"). On or after the date hereof, when counterparts of this Agreement shall have been executed by all parties hereto,
(a) all references to the "Agreement" and words of similar import in the other Loan Documents shall be deemed to refer to the Existing Line Letter as amended and restated hereby, and (b) all outstanding loans and extensions of credit under the Existing Line Letter shall be loans and extensions of credit under and subject to the terms and conditions of this Agreement and the Loan Documents (as hereinafter defined).

We wish to advise you of the terms and conditions upon which RZB may in its sole discretion extend credit to the Borrower.

1. (a) Subject to the provisions hereof, the Borrower may utilize this credit facility (the "Credit Facility") for demand loans ("Loans") and issuance of standby and commercial letters of credit ("L/C's") in the aggregate principal sum and face amount of up to Fifteen Million Dollars ($15,000,000) at any one time outstanding. Notwithstanding the foregoing, and without in any way limiting RZB's sole and absolute discretion to determine whether to make any Loan or issue any L/C, or refrain therefrom (as more fully set forth below), and without in any way limiting RZB's absolute right to demand payment of any Loan at any time or to change any of the Advance Rates (as hereinafter defined), at any time in RZB's sole discretion, the Borrower acknowledges that, with respect to each specific transaction of the Borrower financed by RZB pursuant hereto, the sum of (i) the Loans made by RZB in connection with such transaction, (ii) the aggregate face amount of L/Cs issued in connection therewith, plus (iii) the aggregate unreimbursed amount of all drawings under such L/Cs, shall not exceed the amount obtained by applying the Advance Rates (the "Advance Rates") to the

value of the assets of the Borrower being financed by RZB in such transaction (as such value may be determined by RZB in its sole discretion).

Within the above Credit Facility, there shall be a sublimit not to exceed Three Million Dollars ($3,000,000) at any time outstanding available for the issuance of standby letters of credit from time to time for the financing of the purchase of diesel fuel and gasoline fuel. The terms and beneficiary of each such letter of credit shall be subject to RZB's approval in its sole discretion. Prior to the issuance of any standby letter of credit described in clause (i) above, the Borrower shall deposit cash collateral with RZB in an amount equal to 15% of the maximum face amount of such letter of credit. The Borrower hereby grants to RZB a lien on and security interest in such cash collateral and all deposit accounts in which such cash collateral and all proceeds thereof shall be maintained as security for all present and future obligations of the Borrower to RZB until the letter of credit expires or is terminated and all obligations in connection therewith shall have been satisfied in full in cash to the sole and absolute satisfaction of RZB, provided, however, that no lien on and security interest in cash collateral shall be released nor shall any cash collateral be released if any Event of Default under any security agreement delivered in connection with this Agreement shall have occurred and be continuing (an "Event of Default") or any event that with the giving of notice or lapse of time or both would constitute such an Event of Default (a "Default") shall have occurred and be continuing or any demand for payment of or cash collateral for the obligations of the Borrower under the Credit Facility shall have been made.

Within the above Credit Facility, there shall be a sublimit not to exceed Five Hundred Thousand Dollars ($500,000) at any time outstanding available for the issuance of standby letters of credit from time to time (i) to secure a performance bond with respect to Arizona and Nevada excise taxes and
(ii) in favor of Kinder Morgan to secure monthly lease obligations. The terms and beneficiary of each such letter of credit shall be subject to RZB's approval in its sole discretion. Prior to the issuance of any standby letter of credit described in this paragraph, the Borrower shall deposit cash collateral with RZB in an amount equal to 100% of the maximum face amount of such letter of credit. The Borrower hereby grants to RZB a lien on and security interest in such cash collateral and all deposit accounts in which such cash collateral and all proceeds thereof shall be maintained as security for all present and future obligations of the Borrower to RZB until the letter of credit expires or is terminated and all obligations in connection therewith shall have been satisfied in full in cash to the sole and absolute satisfaction of RZB, provided, however, that no lien on and security interest in cash collateral shall be released nor shall any cash collateral be released if any Default or Event of Default shall have occurred and be continuing or any demand for payment of or cash collateral for the obligations of the Borrower under the Credit Facility shall have been made.

(b) For purposes hereof:

"Advance Rates" shall mean, with respect to each transaction of the Borrower financed by RZB pursuant hereto, the following respective percentages of the Borrower's accounts receivable or inventory which is the subject of such transaction (provided, however, that RZB reserves the right to change any or all of the following percentages or

categories of assets in any way whatsoever, at its sole and absolute discretion, at any time and from time to time, with or without notice to the Borrower):

100% of CIF cost of eligible inventory or 90% of the net face amount of the Borrower's eligible accounts receivable (as such eligibility shall be determined from time to time by RZB in its sole and absolute discretion), whichever is lower.

(c) The Loans shall be evidenced by, and subject to the terms and conditions contained in, a single grid promissory note (the "Note") made by the Borrower in form and substance satisfactory to RZB. Interest on the Loans shall be payable at the rate specified in the Note (the "Interest Rate").

(d) Each Loan hereunder shall be payable on demand, and in no event shall any Loan be outstanding for more than 45 days.

(e) (i) Each L/C shall be in form and substance satisfactory to RZB, and, unless otherwise agreed by RZB, shall have an expiration date not more than 90 days after its date of issuance.

(ii) The Borrower shall pay to RZB a fee with respect to each L/C in an amount equal to the greater of: (1) a flat fee of $500, (2) a fee at a rate per annum equal to 2.5% of the maximum face amount of the L/C
(without regard to whether conditions to drawing may then be satisfied) or (3) such higher amount or percentage as shall be agreed to in writing by the Borrower and RZB with respect to L/Cs issued after the date of such agreement. The fee provided for in clauses (1), (2) and (3) shall be payable upon issuance of each L/C and, in the case of any L/C which as issued, amended or renewed has an expiration date more than 90 days after its original date of issuance, on the same day in each calendar quarter thereafter if such L/C is outstanding on such day. After any such fee is paid it shall be non-refundable.

(f) The Borrower shall reimburse RZB for the amount of each drawing under each L/C on demand, and shall pay interest on the unreimbursed portion of each drawing as provided in the Continuing Agreement for Letters of Credit between the Borrower and RZB.

(g) This credit facility may be terminated at any time at the sole and absolute discretion of RZB.

(h) Without in any way limiting RZB's sole and absolute discretion to make any Loan or issue any L/C, or refrain therefrom (as more fully set forth below), and without in any way limiting RZB's right to change the Advance Rates or demand payment of any Loan at any time in its sole and absolute discretion, the Borrower agrees that it shall, from time to time, pay the Loans and reimbursement obligations in respect of L/Cs and shall deliver cash collateral in respect of outstanding L/Cs, as and when necessary to cause:

the sum of (1) the outstanding balance of all Loans, (2) the aggregate face amount of all outstanding L/Cs, and (3) the aggregate unreimbursed amount of all drawings under L/Cs (as

such sum may be reduced by the amount of cash collateral maintained with RZB or a bank designated by RZB and pledged in respect of outstanding L/Cs) not to exceed, on any date, the amount obtained by applying the Advance Rates as then in effect to the aggregate value as of such date (as such value shall be determined by RZB in its sole discretion) of all of the assets then owned by the Borrower (without double counting) which are the subject of transactions financed by RZB pursuant hereto and are subject to a perfected first priority security interest in favor of RZB.

(i) The Borrower shall pay to RZB a non-refundable administration fee of $50,000 on the date hereof and thereafter on each anniversary of the date hereof.

2. The proceeds of the Loans and the L/C's shall be used to finance the purchase of inventory, including, within the sublimits set forth in Section 1(a) above, diesel fuel and gasoline fuel, from suppliers which is to be sold to purchasers acceptable to RZB in its sole discretion and accounts receivable arising from the sale of inventory and other transactions acceptable to RZB in its sole discretion.

3. Requests for Loans under this Agreement and directions as to the disposition of the proceeds of Loans shall be given in writing (including by telecopy) by the Borrower to RZB, or may be given orally (including by telephone), provided any such oral communication shall be confirmed promptly to RZB in writing. Requests for L/C's under this Agreement shall be given in writing (including telecopy) by the Borrower to RZB by the execution and delivery of an application satisfactory in form and substance to RZB. Any such Loan so made or L/C issued shall be conclusively presumed to have been made to or for the benefit of, or for the account of, the Borrower when made in accordance with any such request or direction. RZB may rely on any such request or direction which it believes to be genuine, including, without limitation, any oral request whether or not confirmed in writing, and RZB shall be fully protected in so doing without any duty to make any further inquiry as to such genuineness or to otherwise act in good faith in the premises.

4. THE BORROWER AGREES AND ACKNOWLEDGES THAT, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED OR IMPLIED IN THIS AGREEMENT, RZB SHALL HAVE NO OBLIGATION TO MAKE ANY LOAN OR ISSUE ANY L/C, AND RZB SHALL HAVE THE SOLE AND ABSOLUTE DISCRETION TO MAKE ANY LOAN OR ISSUE ANY L/C OR REFRAIN FROM MAKING ANY LOAN OR ISSUING ANY L/C. THE BORROWER FURTHER AGREES AND ACKNOWLEDGES THAT, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED OR IMPLIED IN THIS AGREEMENT, ALL OF THE LOANS SHALL BE PAYABLE ON DEMAND, AND RZB MAY DEMAND PAYMENT OF ANY LOAN AND/OR MAY DEMAND CASH COLLATERAL FOR ANY OUTSTANDING L/C AT ANY TIME IN ITS SOLE AND ABSOLUTE DISCRETION.

5. All payments of principal, interest and other sums in connection with the Loans and L/C's shall be payable to RZB at such account as RZB shall designate, or in the absence of such designation, to RZB at its office at 1133 Avenue of the Americas, New York, New York 10036, in lawful money of the United States in immediately available funds and without setoff or deduction. Interest and fees shall be computed on the basis of a 360 day year and the actual number of days elapsed. In the event that such computation would result in a

usurious rate, then the interest or fee shall be recalculated on a 365 or 366 day year, as the case may be.

All payments of principal, interest, and other sums in connection with this letter agreement, the Loans and L/C's or in respect of any participation in the Credit Facility which may be sold in RZB's discretion to any participant acceptable to RZB (a "Participant") shall be made by the Borrower to RZB or by RZB to the Participant, as applicable, free and clear of, and without deduction or withholding for, any and all present and future taxes, levies, duties or withholdings of any kind or, if any deduction or withholding from any amount payable hereunder or under any other Loan Document or in respect of the participation of the Participant or in connection herewith or therewith shall be legally required, such amount shall be increased by the Borrower as may be necessary so that after making all required deductions or withholdings (including deductions or withholdings applicable to additional amounts payable under this paragraph 5) RZB or the Participant shall receive an amount equal to the amount it would have received had no such deductions or withholdings been required. The Borrower shall pay to RZB promptly upon the Participant's request, and RZB shall promptly pay to the Participant, any amount payable to the Participant pursuant to the preceding sentence, but RZB shall have no liability under this paragraph to the Participant for any amount which is not received by RZB from the Borrower.

(a) The Borrower shall have executed and delivered to RZB the Note(s) evidencing the Loans and a Continuing Agreement for Letters of Credit in form and substance satisfactory to RZB;

(b) The Borrower, Rio Vista Energy Partners L.P. ("RVEP") and Rio Vista Operating Partnership L.P. (the "Operating Partnership") (the Borrower, RVEP and the Operating Partnership are collectively referred to as the "Loan Parties") shall have delivered to RZB such documents of title, and other instruments and documents, pertaining to the transaction of the Borrower which is being financed in connection with such Loan or L/C, as RZB shall require, and all of the foregoing shall be in form and substance, and contain such endorsements, as shall be satisfactory to RZB in all respects;

(c) Each Loan Party shall have complied and shall then be in compliance with all of the terms, covenants and conditions of this Agreement and the Loan Documents (as hereinafter defined in Section 11(c));

(d) The representations and warranties of the Loan Parties contained in each of the Loan Documents shall be true and correct on the date of such Loan or L/C;

(e) RZB's continuing review of and continuing satisfaction with the business, operations, prospects, properties, and condition, financial or otherwise, of each of the Loan Parties;

(f) RZB shall have received (i) a copy of all corporate and partnership action, as the case may be, taken by each of the Loan Parties to authorize the execution and delivery of the agreements, instruments and documents pursuant hereto or in connection herewith, and (ii) if requested by RZB, a legal opinion of counsel to the Loan Parties, together with such opinions of special counsel to the Loan Parties as RZB shall request, and each such opinion shall be satisfactory in form and substance to RZB;

(g) RZB shall have received the unlimited personal guarantee by Mr. Jerome Richter of payment of the obligations of the Borrower, in form and substance satisfactory to RZB, and the personal financial statement of Mr. Richter in form and substance satisfactory to RZB;

(h) RZB shall have received the unlimited guarantees by each of RVEP and the Operating Partnership of payment of the obligations of the Borrower, in form and substance satisfactory to RZB;

(i) (A) Each of the Loan Parties shall have executed and delivered to RZB a general security agreement granting RZB a first priority perfected lien on the Collateral (as defined therein) in form and substance satisfactory to RZB; and

(B) RZB shall have obtained from the Loan Parties duly executed Security Agreement Questionnaires and such lien search reports as RZB shall request, all to be in form and substance satisfactory to RZB; and

(C) RZB shall have filed such UCC financing statements with respect to the Loan Parties in such jurisdictions as RZB shall request;

(j) (A) The Borrower and the Operating Partnership shall have executed and delivered to RZB amendments or supplements to the existing Mortgages, Deeds of Trust and Security Agreements previously executed by the Borrower, which shall be in form and substance satisfactory to RZB, granting RZB a first priority mortgage lien and deed of trust on the collateral described therein, including without limitation, the terminal in Brownsville, Texas and all pipelines and evidencing the assumption thereof by the Operating Partnership; and

(B) Such amendments or supplements shall have been duly filed and recorded in all filing offices deemed necessary by RZB;

(k) The Loan Parties shall have executed and/or delivered such agreements, instruments and documents, including, without limitation, consents of third parties and lessor, titles insurance policy endorsements and searches and surveys, as RZB shall request in connection with the Security Agreements and amendments or supplements referred to in the two preceding paragraphs (i) and (j);

(l) The Operating Partnership shall have delivered to RZB copies of notices to its account debtors (including without limitation PMI Trading Limited and its affiliates), duly executed by such account debtors, directing that payment be made directly to RZB;

(m) The Loan Parties shall have delivered such evidence of insurance and loss payable endorsements as RZB may require;

(n) The Loan Parties shall have delivered copies of all of their supply and sales contracts having a term exceeding 30 days, certified as true and complete by a senior officer;

(o) The Loan Parties shall have instituted lockbox arrangements satisfactory to RZB in its sole discretion;

(p) The Borrower shall have delivered to RZB copies, certified as true and complete, of all agreements, instruments and documents, including, without limitation, all registrations and filings with and notices to the SEC and any other governmental authority, relating to the establishment, capitalization, operation, administration and management of the Loan Parties and their affiliates and the transfer by the Borrower of any or all of its assets and business to any Loan Party or affiliate thereof, and all of the foregoing shall be satisfactory in form and substance to RZB;

(q) All legal matters incident to such Loan or L/C shall be reasonably satisfactory to counsel to RZB.

7. As long as any of the Loans or L/C's or any other obligations hereunder shall be outstanding, the Borrower shall comply with the following covenants, provided that until RZB notifies the Borrower in writing, the covenants shall not apply to RVEP or the Operating Partnership:

(a) Furnish to RZB within 120 days after the end of each fiscal year a copy of the audited financial statements of the Borrower and RVEP prepared in conformity with generally accepted accounting principles consistently applied and certified without qualification by the relevant Loan Party's independent public accountants.

(b) Furnish to RZB, each certified as true and complete in all respects by the Borrower's chief financial officer or the person acting in such capacity, (i) on a quarterly basis not later than 60 days after the end of each quarter, a copy of the financial statements of each Loan Party for the preceding quarter; (ii) on a weekly basis or more frequently if required by RZB, each Loan Party's current inventory report, and on a daily basis, each Loan Party's loading rack tickets evidencing delivery of the commodity and resulting accounts receivable which are the subject of any underlying financing; and (iii) on a monthly basis not later than 30 days after the end of each month, a profit and loss statement of each Loan Party.

(c) Furnish, to RZB such other information concerning each Loan Party's business, properties, condition or operations, financial or otherwise, as RZB may from time to time reasonably request and copies of all reports filed with the Securities and Exchange Commission from time to time.

(d) Maintain and preserve, and cause each other Loan Party to maintain and preserve, its corporate existence, and remain in the same lines of business as on the date hereof.

(e) Except as set forth on Schedule 7(e) hereto, the Borrower shall not, and shall cause each other Loan Party not to, create, assume or permit to exist any lien, security interest, mortgage, charge or other encumbrance of any nature whatsoever on any of its properties or assets, whether now owned or hereafter acquired, except in favor of RZB.

(f) The Borrower shall cause Rio Vista on a consolidated basis and the Operating Partnership to maintain an excess of total assets over total liabilities as determined in accordance with generally accepted accounting principles of at least $9,000,000 at all times.

(g) The Borrower shall not, and shall cause each Loan Party not to, declare or make at any time any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any shares of any class of capital stock of the Borrower or such Loan Party, as the case may be, or its partnership interests or other equity, or purchase, redeem or otherwise acquire for value (or permit any of its subsidiaries to do so) any shares of any class of capital stock or the partnership interests or other equity of the Borrower or such other Loan Party, as the case may be, or any warrants, rights or options to acquire such shares, partnership interests or other equity now or hereafter outstanding, without the prior written consent of RZB unless, before and after giving effect to the payment of any such dividends or distributions, such Loan Party shall be in compliance with all obligations and covenants contained in this agreement and the other Loan Documents and no Default or Event of Default shall have occurred and be continuing. The Borrower shall deliver to RZB a certificate from the Borrower's chief financial officer or the person acting in such capacity on the earlier of the date of each delivery of the quarterly financial statements under Section 7(b) hereof and the date such quarterly financial statements are required to be delivered, setting forth the amount of all dividends and distributions paid by each Loan Party during the immediately preceding fiscal quarter, together with a calculation with respect thereto showing compliance with the covenant in this Section 7(g).

8. Notwithstanding anything to the contrary contained herein or in any other Loan Document, including without limitation the General Security Agreement dated October 17, 1997 between the Borrower and RZB and the General Security Agreement between the Operating Partnership and RZB:

(a) Provided that no Event of Default under any Loan Document shall have occurred and be continuing, no event that with the giving of notice or lapse of time or both would constitute such an Event of Default shall have occurred and be continuing and no demand for payment of any obligations of the Borrower shall have been made by RZB, RZB shall, upon

request of the Borrower, execute and deliver an agreement reasonably satisfactory to RZB subordinating RZB's mortgage lien and security interest on the land, buildings and fixtures (but no other assets contained thereon or therein) constituting (x) the Borrower's terminal in Brownsville, Texas and (y) the Borrower's pipeline, to any mortgage lien and security interest of a third party unaffiliated with the Borrower (the "New Lender") which secures financing provided by the New Lender to the Borrower after the date hereof. Such agreement shall contain a covenant by the New Lender to transport at no cost to RZB from such terminal and/or through such pipeline all inventory of the Borrower or the Operating Partnership financed by RZB. The foregoing is not a consent by RZB to any additional financing or indebtedness of the Borrower.

(b) In the event the Borrower intends to obtain additional financing or incur additional indebtedness, the Borrower shall notify RZB and request RZB's consent. RZB agrees to consider such request, but the Borrower expressly acknowledges and agrees that: (x) RZB shall have sole discretion to grant or deny such consent or impose conditions on the grant of such consent and
(y) RZB has not committed or agreed to grant such consent, and such consent shall be effective only if in writing and executed by RZB.

9. The Borrower represents and warrants to RZB and covenants and agrees with RZB that, with respect to each account receivable of the Borrower and any other Loan Party financed by RZB pursuant hereto, there is not nor will there be at any time, any counterclaim, dispute or any other matter or circumstance whatsoever which could give rise to a right of set-off or other adverse claim that could be asserted by the account debtor to reduce its obligation to pay under such account receivable.

10. The Borrower represents and warrants to RZB and covenants and agrees with RZB that the business of RVEP is and shall be solely to be a holding company whose sole assets are and shall be its interests in the Operating Partnership.

11. (a) No delay on the part of RZB in exercising any of its options, powers or rights, or partial or single exercise thereof, irrespective of any course of dealing, shall constitute a waiver thereof. The options, powers and rights of RZB specified in the Loan Documents (as hereinafter defined in Section 11(c)) are in addition to those otherwise created by law or under any other agreement between any Loan Party and RZB. No amendment, modification or waiver of any provision of any Loan Document to which any Loan Party is a party, nor consent to any departure by any Loan Party therefrom, shall be effective, unless the same shall be in writing and signed by RZB. Any such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No consent to or demand on any Loan Party in any case shall, of itself, entitle it to any other or further notice or demand in similar or other circumstances.

(b) This Agreement and the other Loan Documents embody the entire agreement and understanding between RZB and Loan Parties and supersede all prior agreements and understandings relating to the subject matter hereof.
THIS WRITTEN AGREEMENT (AND THE OTHER LOAN DOCUMENTS) REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND THE OTHER LOAN PARTIES WITH RESPECT TO

THE MATTERS COVERED HEREBY AND THEREBY AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

(c) The Borrower agrees to pay all costs and expenses incurred or payable by RZB and the Participant in connection with the preparation, administration, interpretation, enforcement or collection of this Agreement, the Note, any Participation Agreement between RZB and the Participant (as amended from time to time, the "Participation Agreement"), the L/C's and any applications or other agreements pertaining to the issuance thereof, the security agreements with and guarantees from the Loan Parties, the mortgages, and amendments and supplements referred to herein, and all other documents executed and delivered in connection herewith or therewith (such agreements and documents, including all amendments, modifications and supplements of or to all such agreements and documents are herein referred to as the "Loan Documents"), including, without limitation, costs of examination and audit of the Loan Parties' books and records and of the collateral security for the Loans and L/C reimbursement obligations, and court costs and reasonable attorneys' fees and disbursements.

(iii) The provisions of this subsection (d) shall survive the termination of this Agreement.

(e) The Loan Documents to which the Borrower and the Loan Parties are a party shall be binding on the Borrower and the Loan Parties and their respective successors and assigns, and shall inure to the benefit of RZB and its successors and assigns, provided that the Borrower shall not have the right to assign its rights hereunder or thereunder or any interest herein or therein without RZB's prior written consent.

(f) In addition to the rights granted to it by applicable law, RZB has the right to set-off and apply to any of the Borrower's and Loan Parties obligations hereunder and under the Loan Documents any amount received by it for the Borrower or any of the Loan Parties. The Participant shall have a right of set-off and banker's lien to the same extent as if its participation under the Participation Agreement were a direct loan to the Borrower.

(g) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW).

CONTRARY TO THE EXPRESS AGREEMENT OF THE PARTIES IN THIS
SECTION 11(G) HEREOF, IF THE LAWS OF ANY STATE OTHER THAN NEW YORK, INCLUDING THE LAWS OF THE STATE OF TEXAS, SHALL BE DETERMINED TO BE APPLICABLE TO THIS AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS, IT IS THE INTENT OF THE PARTIES HERETO TO COMPLY WITH ALL APPLICABLE USURY LAWS AND TO LIMIT ALL INTEREST CONTRACTED FOR, RESERVED, CHARGED OR RECEIVED UNDER THE LOAN DOCUMENTS TO THE MAXIMUM NONUSURIOUS RATE OF INTEREST PERMITTED BY APPLICABLE LAW. IF THE APPLICABLE COMMON LAW AND PRINCIPLES OF EQUITY AND CONSTITUTIONS, STATUTES, RULES, REGULATIONS AND ORDERS OF GOVERNMENTAL BODIES AND AUTHORITIES, AND ORDERS, WRITS, DECISIONS, INJUNCTIONS AND DECREES OF ALL COURTS, ARBITRATORS AND GOVERNMENTAL INSTRUMENTALITIES (THE "APPLICABLE LAW") IS EVER JUDICIALLY INTERPRETED SO AS TO RENDER USURIOUS ANY AMOUNT CALLED FOR UNDER OR IN CONNECTION WITH THE NOTES, THIS AGREEMENT AND THE LOAN DOCUMENTS, OR CONTRACTED FOR, CHARGED, TAKEN, RESERVED OR RECEIVED WITH RESPECT TO THE TRANSACTIONS REFERRED TO HEREIN OR THEREIN, OR IF DEMAND OF OR ACCELERATION OF THE MATURITY OF THE NOTE OR IF ANY PREPAYMENT BY BORROWER OR ANY OF THE LOAN PARTIES RESULTS IN BORROWER OR LOAN PARTIES OR ANY OTHER PERSON HAVING PAID ANY INTEREST (HOWEVER DENOMINATED) IN EXCESS OF THAT PERMITTED BY LAW FOR THE ACTUAL PERIOD THE NOTE AND THE OBLIGATIONS OF THE BORROWER AND THE LOAN PARTIES ARE OUTSTANDING, THEN IT IS THE BORROWER'S, THE LOAN PARTIES' AND RZB'S INTENT THAT ALL EXCESS AMOUNTS THERETOFORE RECEIVED BY RZB SHALL BE CREDITED ON THE PRINCIPAL BALANCE OF THE NOTE (OR, IF THE NOTE HAS BEEN OR WOULD THEREBY BE PAID IN FULL, REFUNDED TO THE BORROWER OR THE LOAN PARTIES), AND THE PROVISIONS OF THE NOTE AND THIS AGREEMENT IMMEDIATELY SHALL BE DEEMED REFORMED AND THE AMOUNTS THEREAFTER COLLECTIBLE UNDER THE NOTE, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REDUCED, WITHOUT THE NECESSITY OF THE EXECUTION OF ANY NEW DOCUMENTS, SO AS TO COMPLY WITH THE APPLICABLE LAW, BUT SO AS TO PERMIT THE RECOVERY OF THE FULLEST AMOUNT OTHERWISE CALLED FOR UNDER THE NOTE, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS FOR THE ACTUAL PERIOD THE NOTE AND OTHER OBLIGATIONS OF THE BORROWER AND THE LOAN PARTIES ARE OUTSTANDING.

(h) THE BORROWER AND THE LOAN PARTIES HEREBY AGREE THAT ANY LEGAL ACTION OR PROCEEDING AGAINST THE BORROWER OR ANY LOAN PARTY WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK

(i) AFTER REVIEWING THIS PROVISION SPECIFICALLY WITH ITS RESPECTIVE COUNSEL, EACH OF THE BORROWER, THE LOAN PARTIES AND RZB HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE BORROWER, THE LOAN PARTIES OR RZB. THIS PROVISION IS A MATERIAL INDUCEMENT FOR RZB MAKING THE LOANS TO THE BORROWER AND THE LOAN PARTIES.

(j) NO CLAIM MAY BE MADE BY THE BORROWER OR ANY LOAN PARTY OR ANY OTHER PERSON AGAINST RZB OR THE PARTICIPANT OR THE OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS OF RZB OR THE PARTICIPANT FOR ANY SPECIAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, ANY OBLIGATIONS OF THE BORROWER OR ANY LOAN PARTY AND/OR ANY OF THE COLLATERAL, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, AND THE BORROWER AND EACH LOAN PARTY HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES.

(k) Notwithstanding the Participation Agreement, the Borrower shall be permitted, except as otherwise expressly provided herein,