Document:

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

<PAGE>
Amendment To Promissory Notes
January 13, 2004
Page 2 of 8

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:

                                        2
<PAGE>
Amendment To Promissory Notes
January 13, 2004
Page 3 of 8

1.   Promissory  Notes.  The  Promissory Notes held by you are hereby amended to
     -----------------
     the full extent necessary to effectuate the following:

               (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.

2.   Additional  Payment. The Company will pay to you a fee equal to 1.5% on the
     --------------------
     principal  amount of your Promissory Notes which are outstanding on each of
     the  following  dates;  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.  The fee will be payable in
     accordance with the interest payment dates described in 1(d) above. The fee
     is  not  due  on any principal balance which is paid down during any of the
     interim  periods.  The  fee  payable  for  the  Additional  Notes  is 2.0%.

3.   Warrants.  The  Company  will  extend the expiration date on those warrants
     ---------
     which  you  received  in  connection  with  the  original  issuance  of the
     Promissory  Notes  and  related  amendments. The current expiration date on
     those  warrants  shall be changed from "December 15, 2006" to "December 15,
     2008".

     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.

4.   Issuance  of  Rio  Vista  Warrants.  In  the  event  that  the  Spin-off is
     -----------------------------------
     successfully  completed  by  the Company (see 9. below), the Company agrees
     that  the  holders  of  the  Promissory  Notes shall be entitled to receive
     warrants  to  purchase  units  of  Rio  Vista under the following terms and
     conditions:

          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

                                        3
<PAGE>
Amendment To Promissory Notes
January 13, 2004
Page 4 of 8

               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,

5.   RZB  Subordination.  You hereby agree that the attached draft subordination
     -------------------
     letter  from  RZB  is satisfactory (see Exhibit A) in connection with RZB's
     agreement  to  refrain from taking any action against certain assets of the
     Company  until  all  the  Promissory  Notes  have  been  fully  repaid

6.   Agreement  Not To Pledge Assets: The Company agrees that it will not pledge
     ---------------------------------
     any of its assets before or after the Spin-off occurs nor will it allow Rio
     Vista  to  pledge any of its assets without the consent of the Borrower and
     the  holders  of  the Replacement Notes. The Company further agrees that it
     will  on a good faith basis provide the holders of the Promissory Notes and
     the  Replacement  Notes  a perfected security interest in the US portion of
     its  owned  pipelines,  except  that  such perfection will not be attempted
     until the Cowboy and Tanner obligations have been fully repaid, expected to
     be  no  later  than  March 31, 2004. The Company is not responsible for any
     consents  which  cannot  be  obtained  in  connection with such perfection.

7.   Collateral  Agent.  Investec  will  no  longer serve as collateral agent in
     ------------------
     connection with the Promissory Notes and be replaced by "The Law Offices of
     Kevin  Finck"

8.   Release  of  Collateral.  Upon  the  perfection  of  the  security interest
     -----------------------
     described  in  6. above, the holders of the Promissory Notes hereby consent
     to the immediate release of 1,000,000 shares of common stock of the Company
     owned  by  Mr.  Jerome  Richter  (the  "Shares")  and pledged as additional
     security  in  connection  obligations  owing  by  the  Company  under  the
     Promissory  Notes.  In  addition, the parties agree to determine a mutually
     agreeable escrow agent to retain custody of the Shares during the time that
     the  Promissory  Notes  are  outstanding.

9.   Consent  to Spin-off. The holders of the Promissory Notes hereby consent to
     ---------------------
     the  Company completing the Spin-off as more fully described in the Form 10
     filed  by  Rio  Vista  Energy  Partners L.P. ("Rio Vista") with the SEC, as
     amended,  and

                                        4
<PAGE>
Amendment To Promissory Notes
January 13, 2004
Page 5 of 8

     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

10.  Philadelphia Brokerage Corporation. In connection with the restructuring of
     -------------------------------------
     the  Promissory Notes, the Company has agreed to pay Philadelphia Brokerage
     Corporation  a  fee  of  1.5%  of  the  total  amount  of  Promissory Notes
     restructured  and the total amount of Replacement Notes issued (see below).
     In  addition,  Philadelphia  Brokerage  Corporation  will  receive  10,000
     warrants  to  purchase  units  in  Rio  Vista at the time this Amendment is
     executed and 10,000 additional warrants on December 16, 2004 (or a pro rata
     portion thereon based on the remaining principal amount of Promissory Notes
     and Replacement Notes outstanding at December 16, 2003 and the total amount
     of  Promissory  Notes  and  Replacements  at  the  time  this  amendment is
     executed.  The  terms  and  conditions  of the warrants will be the same as
     those  issued  to  the  holders  of the Promissory Notes as described in 4.
     above.

11.  Declining  Noteholders.  Notwithstanding anything to the contrary contained
      -----------------------
     in  your  Original Documents, you hereby agree that, to the extent that any
     other holders of the Promissory Notes do not agree to this amendment letter
     by  December  13,  2003  (collectively,  the  "Declining  Promissory
     Noteholders"),  the  Company  shall  be  entitled  to  repay such Declining
     Promissory  Noteholders  all amounts owing by the Company to such Declining
     Promissory  Noteholders  under their respective Original Documents without,
     by  virtue  thereof,  in any way breaching or otherwise being in default of
     any  of  your  Original Documents. Any such amounts paid, shall be excluded
     from the definition of "Financing" provided for in your Original Documents.

     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

                                        5
<PAGE>
Amendment To Promissory Notes
January 13, 2004
Page 6 of 8

     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

                                        6
<PAGE>
     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:_________________________________

Promissory Note Amount: $ Note Amt
                         -----------

Name and Telephone Number of Holder:

____________________________________

____________________________________

____________________________________

<PAGE>
Amendment To Promissory Notes
January 13, 2004
Page 8 of 8

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.

<PAGE>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"):

     1.  POCC  will  contribute all of its ownership interest in the outstanding
capital  stock  of  its  subsidiaries  (the "Subsidiary Interests") set forth on
Exhibit  A (the "Subsidiaries") hereto to the Operating Partnership as a capital
----------
contribution;

     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.

<PAGE>
     SECTION  1.2  CONTRIBUTION  OF  LPG  ASSETS  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 LPG Assets
as  a capital contribution, and the Operating Partnership hereby accepts the LPG
Assets.  In  order  to  give  full  effect to the foregoing grant, contribution,
transfer,  assignment  and  conveyance,  POCC,  as  grantor,  and  the Operating
Partnership,  as  grantee,  shall  execute  a  Conveyance  Agreement in the form
attached  hereto  as  Exhibit B together with such other special warranty deeds,
                      ---------
conveyances  or  other  documents  required  to  transfer  the LPG Assets in the
jurisdictions  in  which  they  are  located.

     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.

                                        2
<PAGE>
                                   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

                                        3
<PAGE>
          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.

                                        4
<PAGE>
     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)

                                        5
<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

                                        6
<PAGE>
                                    EXHIBIT A
                                    ---------

                              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

<PAGE>
                                    EXHIBIT B

<PAGE>
                              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

                                      D-1
<PAGE>
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.

                                      D-2
<PAGE>
     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:
                                         -----------------------------
                                            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:
                                                     ---------------------------
                                                        Richard  Shore,  Jr.,
                                                        President

                                      D-3
<PAGE>
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 ________________________.

                                                    ____________________________
                                                    NOTARY  PUBLIC

My Commission Expires:___________________

                                      D-4
<PAGE>
                                   SCHEDULE A

                                      D-5
<PAGE>

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