Exhibit 10.36

CONSENT TO TRANSFER OF UNITS,
ACKNOWLEDGMENT OF REPRESENTATION,
AND WAIVER OF CONFLICTS

February 6, 2007

The undersigned parties acknowledge that Penn Octane Corporation, a Delaware
corporation (the “Buyer”), proposes to acquire an option (the “Option”) to
purchase 25,000 units of membership interest (the “Units”) of Rio Vista GP LLC,
a Delaware limited liability company (“RVGP”) held by Shore Trading LLC, a
Nevada limited liability company (the “Seller”). Pursuant to Section 9.1.1 of
the Amended and Restated Limited Liability Company Agreement (the “Operating
Agreement”) of RVGP, the undersigned board of managers of RVGP hereby consents
to the grant of the Option by the Seller and to the transfer of the Units to the
Buyer in the event the Buyer exercises the Option. Pursuant to Section 10.1 of
the Operating Agreement, the board of managers of RVGP hereby further consents
to the admission of the Buyer as a Member of RVGP with respect to the Units in
the event the Buyer exercises the Option.

If the Buyer does not exercise the Option before the expiration of the Option,
the undersigned board of managers of RVGP hereby consents to the transfer of all
of the Units, subject to compliance Section 9.1.4 of the Operating Agreement, to
any one person (the “Alternate Buyer”) designated by the Seller. The board of
managers of RVGP hereby further consents to the admission of the Alternate Buyer
as a Member of RVGP, subject to compliance with Section 10.1 (excluding
Section 10.1(e)) of the Operating Agreement, with respect to the Units in the
event the Alternate Buyer purchases all of the Units from the Seller.
Notwithstanding the foregoing, the Alternate Buyer may not be a person whose
receipt of confidential information of RVGP or any of its affiliates is likely
to cause material harm to RVGP or any of its affiliates, as reasonably
determined by the board of managers of RVGP.

Each of the parties acknowledges that the Law Offices of Kevin W. Finck (“Kevin
Finck”) has been asked to represent, and has represented, the Buyer and RVGP in
connection with the Option. The parties also acknowledge that Kevin Finck
currently represents or has previously represented each of them (including the
Seller) with respect to other matters. Each of the parties hereby consents to
the preparation of an agreement regarding the Option by Kevin Finck and to the
representation of the Buyer and RVGP by Kevin Finck in connection with the
Option. Each of the parties acknowledges and agrees that Kevin Finck will rely
on the consent of the parties to such representation and that each of the
parties hereby waives any potential conflicts that might arise in connection
with such representation. The Seller further acknowledges that Kevin Finck has
advised the Seller to obtain separate representation concerning its rights and
obligations in connection with the sale of the Option to the Buyer and the
execution of this instrument. The Seller further acknowledges that Kevin Finck
is not representing the Seller in this transaction and that Kevin Finck may
continue to represent the Buyer and RVGP in future matters involving the Option
and this instrument. The Buyer and RVGP each acknowledge and agree that Kevin
Finck may continue to represent the Seller in future matters not directly
involving the Option or this instrument. 1

 

 

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This instrument may be executed in one or more counterparts, each of which shall
be deemed an original and all of which together shall constitute a single
instrument binding on the parties. Facsimile signatures shall have the same
legal effect as original signatures.

The foregoing Consent to Transfer of Units, Acknowledgment of Representation and
Waiver of Conflicts is executed by the undersigned as of the date first set
forth above.

BUYER

Penn Octane Corporation,
a Delaware corporation

By:                                                
Ian T. Bothwell,
Acting Chief Executive Officer

SELLER

Shore Trading LLC,
a Nevada limited liability company

By:                                                
Richard Shore, Jr., Managing Member

RIO VISTA GP LLC,
a Delaware limited liability company

By:                                                
Richard R. Canney, Manager

By:                                                
Murray J. Feiwell, Manager

By:                                                
Douglas G. Manner, Manager

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