ASSIGNMENT OF LEASE
                              -------------------

                                                 BROWNSVILLE NAVIGATION DISTRICT
THE STATE OF TEXAS     )
                                                 CONTRACT NO.3154"B"
                                                             -------------------
COUNTY OF CAMERON      )

     THIS AGREEMENT is made between PENN OCTANE CORPORATION, a Texas corporation
with  offices  at  the Port of Brownsville, Cameron County, Texas, herein called
"Assignor,"  and  RIO  VISTA  OPERATING  PARTNERSHIP  LP,  a  Delaware  limited
partnership,  of  820  Gessner,  Suite  1285,  Houston,  TX 77024, herein called
"Assignee."

     WHEREAS,  the BROWNSVILLE NAVIGATION DISTRICT OF CAMERON COUNTY, TEXAS, the
"DISTRICT,"  as  Lessor,  and  PENN  OCTANE CORPORATION, as Lessee, entered into
Lease  Contract No. 3154 September 22, 1999, covering that certain Tract of Land
described  in EXHIBIT A attached hereto and made a part hereof for all purposes;
and

     WHEREAS, Assignor now desires to assign said Lease to the Assignee, and the
Assignee  desires to accept the assignment thereof under the following terms and
conditions:

     NOW,  THEREFORE,  in  consideration  of  the  sum of TEN AND NO/100 DOLLARS
($10.00)  and  other good and valuable consideration, receipt of which is hereby
acknowledged,  Assignor  hereby  assigns  to  the  Assignee,  its  successors in
interest  and  assigns,  all  of  its right, title, and interest in and to Lease
Contract  No.  3154 covering the leased premises described in EXHIBIT A attached
hereto,  together  with  all  improvements,  equipment,  furniture  and fixtures
situated  on the subject Leasehold. Assignee accepts the assignment of the Lease
Contract  and  hereby  assumes  and agrees to perform and fulfill all the terms,
covenants,  conditions,  and  obligations  which  arise  after  the  date hereof
required of the Assignor under the afore described Lease, specifically including
the  timely  making  of  all  payments  due  to DISTRICT. Additionally, Assignee
expressly  assumes  responsibility  for  the  payment  of any sales tax, if any,
attributable to this transaction. In no event shall Assignee ever be responsible
for  the  performance  of  any  terms.


                                                                          Page 1
<PAGE>
covenants, conditions and/or obligations which arose under the Lease Contract on
or  before  the  date  hereof.

     Assignor  hereby  represents,  warrants  and  covenants  to  Assignee  that
Assignor has fully and timely performed each and every term, covenant, condition
and obligation of Assignor under the Lease Contract which have accrued or arisen
on  or  before  the date hereof and Assignor does hereby indemnify, defend, save
and  hold harmless Assignee from and against any and all damages, costs, claims,
causes  of  action  or fees suffered or incurred by Assignee (including, without
limitation,  reasonable  attorney's  fees and court costs) which arise out of or
relate  to  a  failure  by  Assignor  to  perform  any  of the terms, covenants,
conditions  or  obligations  under  the  Leases which were to be performed on or
before  the  date  hereof.

     This  Agreement shall be binding on and inure to the benefit of the parties
to this Agreement, their successors in interest and assigns.

     EXECUTED this 15th day of September , 2004
                   ----

                                   ASSIGNOR:

                                   PENN OCTANE CORPORATION

                                   BY: /s/ Charles Handly
                                       -----------------------------
                                       Charles Handly
                                       Its: Executive Vice President

                                   ASSIGNEE:

                                   RIO VISTA OPERATING PARTNERSHIP, L.P.
                                   by Its General Partner
                                   Rio Vista Operating GP, LLC

                                   By: /s/ Charles Handly
                                       -----------------------------
                                       Charles Handly
                                       Its: Secretary


                                                                          Page 2
<PAGE>
                                ACKNOWLEDGMENTS
                                ---------------

THE STATE OF TEXAS     )

COUNTY OF CAMERON      )

     This  instrument  was  acknowledged before me on the 16th day of September,
2004  by  Charles Handly, Executive Vice President of PENN OCTANE CORPORATION, a
Texas  corporation,  on  behalf  of  said  corporation.

                                   /s/ Beatrice G Rosenbaum
                                   -----------------------------
                                   Notary Public, State of Texas

My Commissioner Expires
   [GRAPHIC OMITED]

THE STATE OF TEXAS     )

COUNTY OF CAMERON      )

     This  instrument  was acknowledged before me on 16th day of September, 2004
by Charles Handly, Secretary of RIO VISTA OPERATING PARTNERSHIP GP, LLC, General
Partner  of RIO VISTA OPERATING LP, a Delaware limited partnership, on behalf of
said  partnership.

                                   /s/ Beatrice G Rosenbaum
                                   -----------------------------
                                   Notary Public, State of Texas

My Commissioner Expires
   [GRAPHIC OMITED]


                                                                          Page 3
<PAGE>
                                CONSENT OF LESSOR
                                -----------------

     The  undersigned,  the  BROWNSVILLE  NAVIGATION DISTRICT OF CAMERON COUNTY,
TEXAS, is the Lessor in the Lease described in the foregoing Assignment, and the
said DISTRICT hereby consents to the assignment of Lease Contract No.3154 to RIO
VISTA  OPERATING  PARTNERSHIP,  L.P.  Consent  to  this Assignment releases PENN
OCTANE  CORPORATION,  the  Lessee/Assignor, from its obligations under the terms
and  conditions  of the subject Lease Contracts, except for any obligations that
may  have  arisen  on  or  prior  to  the  date  of  the  assignment.

     EXECUTED effective September 15, 2004
                        ------------

                                   BROWNSVILLE NAVIGATION DISTRICT
                                   OF CAMERON COUNTY , TEXAS

                                   BY: PETER ZAVALETTA
                                       -----------------------------
                                       Peter Zavaletta, Chairman of the Board of
                                       Navigation and Canal Commissioners of the
                                       Brownsville Navigation District of
                                       Cameron County, Texas

ATTEST:
/s/ Illegible
----------------------------------
Its Secretary

THE STATE OF TEXAS     )

COUNTY OF CAMERON      )

     This instrument was subscribed before me on the day 15th of September, 2004
                                                         ----
by  Peter Zavaletta, Chairman of the Board of Navigation and Canal Commissioners
of  the  Brownsville  Navigation  District of Cameron County, Texas, a municipal
corporation,  who  acknowledged to me that he executed the same for the purposes
and consideration therein expressed, in his official capacity as therein stated,
under  seal  thereof  and  as  the  act  and  deed  of  said  corporation.

                                   /s/ Beatrice G Rosenbaum
                                   -----------------------------
                                   Notary Public, State of Texas

My Commissioner Expires
   [GRAPHIC OMITED]


                                                                          Page 4
<PAGE>
                                                                 October 7, 1999
STATE OF TEXAS

COUNTY OF CAMERON

                                  EXHIBIT "A"
                                  -----------

Owner: Brownsville Navigation District

A Baseline description for a Right-of-Way and Easement extending over, through,
along and across lands owned by the Brownsville Navigation District situated in
the Espiritu Santo Grant, Cameron County, Texas.

All Bearings and Coordinates are based on the Texas Coordinate System, South
Zone NAD 27 horizontal datum.

The Baseline for said Right-of-Way and Easement is described as follows:

BEGINNING at a point in a Westerly property line of the said lands, same being
---------
the Westerly right of way line of the Old Brownsville - Port Isabelle Road, said
Point of Beginning being North 32 54'52'' West, 21.84 feet along said right of
------------------
way fence from a 1/2" iron rod found at a cut back comer and in the Northerly
line of the Union Pacific Rail Road 100 foot right of way, said Point of
                                                                --------
Beginning also having coordinates of x=2,349,197.10,y=l18,438.05;
---------

THENCE South 73 32' 1 8" East, 20.90 feet to an angle point having coordinates
of x=2,349,217.15, y=l18,432.12;

THENCE South 68 17'04" East, parallel with and 15 feet perpendicular distance
Northerly from the North right of way fence line of said U.P.R.R. (.100 foot
wide) a distance of 2906.22 feet to an angle point having coordinates of
x=2,351,917.15, y=117,356.89;

THENCE South 64 23'27" East, parallel with and 15 feet perpendicular distance
Northerly from the North right of way fence line of said U.P.R.R. (100 foot
wide) a distance of 3003.05 feet to an angle point having coordinates of
x=2,354,625.20, y=l16,058.88;

THENCE South 60 42'34" East, 433,92 feet to an angle point having coordinates of
x=2,355,003.63, y=l15,846,59;

THENCE South 45 46'19" East, 291.08 feet to an angle point having coordinates of
x=2,355,212.21,y=115,643.56;

THENCE South 82 14'22" East, 11,761.54 feet to an angle point having coordinates
of x=2,366,860.03,y=l14,055.36;


                                  PAGE 1 OF 2
<PAGE>
THENCE South 04 18'25" East, at 2805.00 feet pass the centerline of U.S. Highway
48. in all a total distance of 3719.24 feet to an angle point having coordinates
of x=2,367,145.34, y=l10,346.62;

THENCE  North 85 53'35" East, at 86.7 feet pass the centerline of Chemical Road,
in  all a total distance of 157.54 feet to the END point in the West line of the
Penn  Octane, Co. 14.51 acre tract of land, said END point being South 04 13'56"
East,  565.37  feet  from a 1/2" iron rod found in the East right of way line of
Chemical  Road  and at the Northwest corner of said Penn Octane 14.51 acre tract
of land, said END point also having coordinates of x=2,367,302.48, y=l10,357.90;




TOTAL RODS: 1351.12


                                  Page 2 of 2
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