Document:

SECURITIES
PURCHASE AND SALE AGREEMENT

     

    

     

    

     

    Between

     

    CENTRAL
ENERGY, LLC

     

    As
Buyer,

     

    RIO
VISTA ENERGY PARTNERS, L.P.

     

    The
Company

     

    and

     

    PENN
OCTANE CORPORATION,

     

    As
Seller

     

    

     

    

     

    DATED
MAY 25, 2010

     

     

     

     

    
      
         

      

      
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    TABLE OF
CONTENTS

     

    
      	
              1.

            	
              PURCHASE
      AND SALE OF THE INTERESTS

            	
              4

            
	 	 	 
	
              2.

            	
              REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY

            	
              5

            
	 	 	 
	
              3.

            	
              REPRESENTATIONS
      AND WARRANTIES OF SELLER

            	
              11

            
	 	 	 
	
              4.

            	
              REPRESENTATIONS
      AND WARRANTIES OF BUYER

            	
              16

            
	 	 	 
	
              5.

            	
              CONDITIONS
      PRECEDENT

            	
              17

            
	 	 	 
	
              6.

            	
              COVENANTS

            	
              20

            
	 	 	 
	
              7.

            	
              SURVIVAL
      OF REPRESENTATIONS AND WARRANTIES

            	
              21

            
	 	 	 
	
              8.

            	
              DOCUMENTS
      AT CLOSING AND THE CLOSING

            	
              21

            
	 	 	 
	
              9.

            	
              Post-Closing

            	
              23

            
	 	 	 
	
              10.

            	
              MISCELLANEOUS

            	
              23

            
	 	 	 
	
              Schedule
      2(b) Organization and Good Standing

            	 
      
	
              Schedule
      2(e) Company Approvals

            	 
      
	
              Schedule
      2(f)-1 Company Financial Statements

            	 
      
	
              Schedule
      2(f)-2 Corrections to Company Financial Statements

            	 
      
	
              Schedule
      2(g) Material Adverse Changes Schedule

            
	
              Schedule
      2(h) Company Taxes

            	 
      
	
              Schedule
      2(l) Company Actions and Proceedings

            	 
      
	
              Schedule
      2(m) Company Material Agreements

            	 
      
	
              Schedule
      2(o) Company Real Estate

            	 
      
	
              Schedule
      2(q) Company Tangible Assets

            	 
      
	
              Schedule
      2(r) Company Liabilities

            	 
      
	
              Schedule
      2(t) Capitalization

            	 
      
	
              Schedule
      2(v) Warrants and Options

            	 
      
	
              Schedule
      2(w) Permits and Authorizations

            	 
      
	
              Schedule
      3(d) GP Approvals

            	 
      
	
              Schedule
      3(e)-1 GP Financial Statements

            	 
      
	
              Schedule
      3(e)-1 Corrections to GP Financial Statements

            	 
      
	
              Schedule
      3(f) Material Adverse Changes Schedule

            	 
      
	
              Schedule
      3(g) GP Taxes

            	 
      
	
              Schedule
      3(k) GP Actions and Proceedings

            	 
      
	
              Schedule
      3(l) GP Material Agreements

            	 
      

    

     

    
      
         

      

      
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              Schedule
      3(n) GP Real Estate

            	 
      
	
              Schedule
      3(p) GP Tangible Assets

            	 
      
	
              Schedule
      3(q) GP Liabilities

            	 
      
	
              Schedule
      3(s) GP Capitalization

            	 
      
	
              Schedule
      5(a)(ix) Settlement of Claims

            	 
      

    

     

    
      
         

      

      
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    SECURITIES
PURCHASE AND SALE AGREEMENT

     

    This
Securities Purchase and Sale Agreement (the “Agreement”)
dated as of May 25, 2010, is by and among Central Energy, LLC, a Delaware
limited liability company (“Buyer”),
Rio Vista Energy Partners, L.P., a Delaware limited partnership (the “Company”),
and Penn Octane Corporation, a Delaware corporation (“Seller”).

     

    RECITALS:

     

    A.           Buyer
desires to purchase and the Company desires to issue and sell to Buyer on the
Closing Date (as hereinafter defined) an amount of limited partnership interests
(“Common
Units”) in the Company which, following their issuance will constitute
80% of the “Fully Diluted Common Units” of the Company.  “Fully Diluted
Common Units” of the Company means the sum of (i) all of the issued and
outstanding Common Units of the Company on the Closing Date, including the
Common Units to be issued to Buyer on the Closing Date (the “Newly Issued
Common Units”) and (ii) all Common Units reserved for issuance by the
Company on the Closing Date pursuant to any options, warrants, debentures,
conversion rights or other plans or agreements under which the Company is
required as of the Closing Date to issue Common Units to any person or entity in
the future.

     

    B.           Buyer
desires to purchase and Seller desires to sell, or cause to be sold, 100% of the
limited liability company interests of Rio Vista GP, LLC (the “GP
Interests”), the general partner of the Company (the “GP”) (such
GP Interests and the Newly Issued Common Units being hereinafter occasionally
collectively referred to as the “Interests”).

     

    C.           It
is the intention of the parties hereto that Buyer shall acquire the Interests on
the terms and for the consideration set forth below.

     

    NOW, THEREFORE, in
consideration of the mutual covenants, agreements, representations and
warranties contained in this Agreement, the parties hereto agree as
follows:

     

    1.           PURCHASE
AND SALE OF THE INTERESTS

     

    a)           Sale of Newly Issued Common
Units.  Subject
to the terms and conditions of this Agreement, the parties agree that on the
Closing Date (i) the Company will issue and sell to Buyer 12,724,019 Newly
Issued Common Units which, when issued, will represent not less than Eighty
Percent (80%) of the Fully Diluted Common Units of the Company and (ii) Buyer
will purchase the Newly Issued Common Units for the Common Unit Purchase Price
(as defined below).

     

    b)           Sale of GP
Interests.  Subject
to the terms and conditions of this Agreement, Seller hereby agrees that on the
Closing Date it will sell, assign and deliver, or cause to be sold, assigned and
delivered, the GP Interests to Buyer and Buyer agrees to Purchase the GP
Interests for the GP Interest Purchase Price (as defined below).  The
GP Interests to be sold, assigned and delivered will represent 100% of the
issued and outstanding membership interests of the GP.

     

    c)           Purchase
Price.  The
purchase price for the Newly Issued Common Units shall be Three Million Eight
Hundred Fifty Two Thousand Two Hundred Ninety One Dollars and No/100
($3,852,291) (the “Common Unit
Purchase Price”). The Common Unit Purchase Price to be paid by Buyer to
the Company and any additional amounts contributed to the Company at Closing
shall be held and utilized by the Company, to the extent necessary, to satisfy
Buyer’s conditions to closing set out in Section 5(a)(ii) through (xii) hereof.
The purchase price for the GP Interests shall be One Hundred Forty Seven
Thousand Seven Hundred and Nine Dollars and No/100 ($147,709) (the “GP Interest
Purchase Price”) which such amount shall be contributed by Seller to the
GP and then by the GP to the Company simultaneously with the Closing (the Common
Unit Purchase Price and the GP Interest Purchase Price, collectively, the “Purchase
Price”).

     

    
      
         

      

      
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    d)           Additional
Consideration.  As
additional consideration for the purchase of the Interests, and conditioned on
the closings of the transactions contemplated by this Agreement on the Closing
Date, Buyer agrees to contribute sufficient additional capital to the Company
from time to time following the Closing Date, as required in Buyer’s sole
judgment, to enable the Company to (i) regain compliance with United States
Securities and Exchange Commission (“SEC”)
reporting standards applicable to issuers of securities registered under Section
12 of the Securities Exchange Act of 1934, (ii) regain compliance with the
Company’s tax requirements, and (iii) provide adequate working capital for
anticipated operating expenses and ongoing compliance.

     

    e)           Intercompany
Note.  At the Closing, the Company agrees to satisfy out of the
Purchase Price that certain Promissory Note between the Seller and the Company
as well as all other intercompany advances between the Seller and the Company,
the Subsidiaries and/or Rio Vista (collectively, the “Intercompany
Note”) for a minimum amount of $1,400,000, subject to adjustment as
follows (the “Intercompany Note
Settlement Amount”).  Schedule 5(a)(ix)
will be updated as of the Closing Date with respect to Settled Claims (as
defined below), by mutual agreement of the parties.  If as of the
Closing Date, such updated Schedule 5(a)(ix)
reflects a Settled Surplus (as such term is defined in Section 5(a)(ix)),
then the Intercompany Note Settlement Amount shall be increased by the amount of
such Settled Surplus, up to a maximum of $200,000 (resulting in a maximum
Intercompany Note Settlement Amount of $1,600,000).

     

    2.           REPRESENTATIONS
AND WARRANTIES OF THE COMPANY

     

    The
Company hereby represents and warrants as follows:

     

    a)           Subsidiaries.  The
Company owns 100% of the limited liability company interests in Rio Vista
Operating GP LLC (“RVOGP
LLC”), which is the general partner of Rio Vista Operating Partnership LP
(“RVOP”) in
which the Company owns 99.9% of the limited partnership interests and RVOGP LLC
owns the remaining 0.1% limited partnership interest.  The Company
also owns 100% of the issued and outstanding stock of Regional Enterprises, Inc.
(“Regional”).  The
Company owns 100% of the membership interests in each of Penn Octane
International LLC (“POI”) and
Rio Vista Northport LLC, both of which are dormant subsidiaries without any
assets or liabilities (except that POI is a named party in certain of the
proceedings set forth on Schedule 2(l)(Actions and
Proceedings)).  RVOGP LLC, RVOP and Regional are occasionally
hereinafter collectively referred to as the “Subsidiaries.”

     

    
      
         

      

      
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    b)           Organization and Good
Standing.  Except
as set forth on Schedule 2(b), each
of the Company and its Subsidiaries is duly organized, validly existing and in
good standing under the laws of the state of its formation.  Except as
set forth on Schedule
2(b), each of the Company and its Subsidiaries has the power and
authority to carry on its business as presently conducted, and is duly qualified
to do business in any jurisdiction where so required except where the failure to
so qualify would have no material adverse effect on its business.

     

    c)           Partnership
Authority.  The
Company has the power to operate as a limited partnership.  The
execution and delivery of this Agreement by the Company, and the consummation by
the Company of the transactions contemplated hereby, are not in violation of any
restrictions under its governing documents.  Subject to the
satisfaction of the condition precedent set out in Section 5(a)(vi)
hereof, the execution of this Agreement and the consummation by the Company of
the transactions contemplated hereby on the Closing Date will not constitute a
breach of any agreement, indenture, mortgage, license or other instrument or
document to which the Company or any of its Subsidiaries is a party and will not
violate any judgment, decree, order, writ, rule, statute, or regulation
applicable to the Company, its Subsidiaries or any of their respective
properties.  The execution and performance of this Agreement by the
Company will not violate or conflict with any provision of the certificate of
formation or the organizational documents of the Company or any of its
Subsidiaries.

     

    d)           Newly Issued Common
Units.  The
Company represents and warrants that the Newly Issued Common Units to be
delivered to Buyer on the Closing Date shall be issued and delivered to Buyer
free and clear of all rights, claims, liens and encumbrances, except that Buyer
acknowledges that the Newly Issued Common Units will be restricted securities
under applicable United States securities laws.  The Newly Issued
Common Units to be issued to Buyer on the Closing Date will have been duly
authorized and validly issued and will be fully paid and will constitute 80% of
the Fully Diluted Common Units of the Company.

     

    e)           Approvals.  No
approval, authorization, consent, order or other action of, or filing with, any
person, firm or corporation or any court, administrative agency or other
governmental authority is required in connection with the execution and delivery
of this Agreement by the Company or the consummation of the transactions
described herein, other than as set forth on Schedule
2(e).

     

    f)           Financial Statements, Books
and Records.  Attached
as Schedule
2(f)-1 are the unaudited internal financial statements of the Company and
its Subsidiaries for the year ended December 31, 2009 and the audited financial
statements of the Company and its Subsidiaries for the year ended December 31,
2008 (the “Company Financial
Statements”).  Except as set forth on Schedule 2(f)-2, the
Company Financial Statements, books of account and other financial records of
the Company and its Subsidiaries are complete and correct in all material
respects and are maintained in accordance with good business and accounting
practices.

     

    g)           No Material Adverse
Changes.  Except as set forth on Schedule 2(g), since
December 31, 2009 there has not been:

     

    i.           any
material adverse change in the financial position of the Company or its
Subsidiaries except changes arising in the ordinary course of business, which
changes are not reasonably likely to adversely affect the financial position of
the Company or any of its Subsidiaries in any material respect;

     

    
      
         

      

      
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    ii.           any
damage, destruction or loss materially affecting the assets, prospective
business, operations or condition (financial or otherwise) of the Company or any
of its Subsidiaries whether or not covered by insurance;

     

    iii.           any
declaration, setting aside or payment of any dividend or distribution with
respect to the Common Units or any other equity interests in the
Company;

     

    iv.           any
sale of an asset (other than in the ordinary course of business) or any mortgage
or pledge by the Company or any of its Subsidiaries of any properties or
assets;

     

    v.           adoption
of any pension, profit sharing, retirement, stock bonus, stock option or similar
plan or arrangement; or

     

    vi.           payments
or asset purchases not in the ordinary course of business.

     

    h)           Taxes.  Except
as set forth on Schedule 2(h), the
Company and its Subsidiaries have filed all material tax, governmental and/or
related forms and reports (or extensions thereof) due or required to be filed
and has paid or made adequate provisions for all taxes or assessments which have
become due as of the Closing Date as shown to be due on such reports and
returns, and there are no deficiency notices outstanding.  No
extensions of time for the assessment of deficiencies for any year are in
effect.  No deficiency notice is proposed or, to the knowledge of the
Company, threatened against the Company or any of its
Subsidiaries.  In the past 5 years, the tax returns of the Company and
its Subsidiaries have not been audited.

     

    i)           Compliance with
Laws.  Except
as set forth on Schedule 2(i), the
Company and its Subsidiaries are in compliance with all federal, state, county
and local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to them and their respective
businesses which, if not complied with, would adversely affect the business of
the Company or any of its Subsidiaries in any material respect.

     

    j)           No Breach.  Except
as set forth on Schedule 2(j), the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby will not:

     

    i.           violate
any provision of the certificate of formation or the governing documents of the
Company or any of its Subsidiaries;

     

    ii.           violate,
conflict with or result in the breach of any of the terms of, result in a
material modification of, otherwise give any other contracting party the right
to terminate, or constitute (or with notice or lapse of time, or both
constitute) a default under any contract or other agreement to which the Company
or any of its Subsidiaries is a party or by or to which the Company or any of
its Subsidiaries’ assets or properties may be bound or subject;

     

    
      
         

      

      
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    iii.           violate
any order, judgment, injunction, award or decree of any court, arbitrator or
governmental or regulatory body against, or binding upon, the Company or any of
its Subsidiaries or upon the properties or business of the Company or any of its
Subsidiaries; or

     

    iv.           violate
any statute, law or regulation of any jurisdiction applicable to the
transactions contemplated herein which could have a material, adverse effect on
the business or operations of the Company or any of its
Subsidiaries.

     

    k)           Offering
Valid.  The offer, sale and issuance of the Newly Issued Common
Units and the offer and sale of the GP Interests will be exempt from the
registration requirements of the Securities Act of 1933, as amended (the “Securities
Act”), and will have been registered or qualified (or are exempt from
registration and qualification) under the registration or qualification
requirements of all applicable state securities laws.  Neither the
Company, the GP nor any agent on their behalf has solicited or will solicit any
offers to sell or has offered to sell or will offer to sell all or any part of
the Newly Issued Common Units and the GP Interests to any person or persons so
as to bring the sale of such Newly Issued Common Units and GP Interests by the
Company within the registration provisions of the Securities Act or any state
securities laws.

     

    l)           Actions and
Proceedings.  Except
as set forth on Schedule 2(l) (the
“Scheduled
Litigation”), neither the Company nor any of its Subsidiaries is a party
to, or affected by, any material pending litigation.  Neither the
Company nor any of its Subsidiaries is a party to any governmental investigation
or proceeding not reflected in the Company Financial Statements and, to the
Company’s knowledge, no material litigation, claims, assessments or
non-governmental proceedings are threatened against the Company or any of its
Subsidiaries except as set forth on Schedule 2(l)
attached hereto and made a part hereof.

     

    m)           Agreements.  Schedule 2(m) sets
forth all material contracts or arrangements to which the Company or any of its
Subsidiaries is a party or by or to which the Company or any of its Subsidiaries
or their assets, properties or businesses are bound or subject, whether written
or oral.

     

    n)           Brokers or
Finders.  No
broker’s or finder’s fee will be payable by the Company or any of the
Subsidiaries in connection with the transactions contemplated by this Agreement,
nor will any such fee be incurred as a result of any actions by the Company or
any of its Subsidiaries hereunder.

     

    o)           Real
Estate.  Schedule 2(o) sets
forth all real property owned by the Company and its Subsidiaries and all
leasehold agreements with a term in excess of 90 days for real property,
equipment or services to which the Company or any of its Subsidiaries is a
party.  All uses of any real property and leases of real property by
the Company or its Subsidiaries have conformed in all material respects to all
applicable building and zoning ordinances, laws and regulations.

     

    p)           OSHA and Environmental
Compliance.  The
Company and its Subsidiaries have duly complied in all material respects with,
and their respective offices, real property, business, assets, leaseholds and
equipment have been in compliance in all material respects with, the provisions
of the Federal Occupational Safety and Health Act, the Environmental Protection
Act, and all other environmental laws.  No citations, notices or
orders of non-compliance have been issued to the Company or its Subsidiaries or
relating to their respective businesses, assets, property or equipment under
such laws, rules or regulations, except for the outstanding OSHA citations
relating to the July 25, 2005 Nitric incident and the November 27, 2005 death of
David Widner (driver).  There are no releases, spills, discharges,
leaks or disposal (collectively, referred to as “Company
Releases”) of hazardous substances at, upon, under or within the real
property owned or leased by the Company or any of its Subsidiaries that require
remediation or Company action under applicable law.  No real property
owned or leased by the Company or any of its Subsidiaries has been used as a
treatment, storage or disposal facility of hazardous waste.  No
hazardous substances are present on the real property or any premises leased by
the Company or any of its Subsidiaries excepting such quantities as are handled
in accordance with all applicable manufacturer’s instructions and governmental
regulations and in the proper storage containers and as are necessary for the
operation of the commercial business of the Company and its
Subsidiaries.

     

    
      
         

      

      
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    q)           Tangible
Assets.  All
machinery, equipment, furniture, leasehold improvements, fixtures, projects, or
other tangible assets owned or leased by the Company or any of its Subsidiaries
which are material to their respective businesses are described in Schedule 2(q)
hereto (the “Company Tangible
Assets”).  Other than as set forth in Schedule 2(q), the
Company and its Subsidiaries hold all rights, title and interest in all the
Company Tangible Assets owned by them as reflected by the Company Financial
Statements and Schedule 2(q) and
acquired by them after the date of the Company Financial Statements free and
clear of all liens, pledges, mortgages, security interests, conditional sales
contracts or any other encumbrances except those which are set out in Schedule
2(q).  All of the Company Tangible Assets are in good operating
condition and repair, subject to reasonable wear and tear due to the elements
and lapse of time and are usable in the ordinary course of business of the
Company and its Subsidiaries and conform to all applicable laws, ordinances and
government orders, rules and regulations relating to their construction and
operation, except as set forth on Schedule 2(q)
hereto.  Neither the Company nor any of its Subsidiaries owns any
intellectual properties, including trademarks and the like.

     

    r)           Liabilities.  Except
as set forth on Schedule 2(r) neither
the Company nor any of its Subsidiaries has any material direct or indirect
indebtedness, liability, claim, loss, damage, deficiency, obligation or
responsibility, known or unknown, fixed or unfixed, liquidated or unliquidated,
secured or unsecured, accrued or absolute, contingent or otherwise, including,
without limitation, any liability on account of taxes, any governmental charge
or lawsuit (all of the foregoing collectively defined to as “Company
Liabilities”), which are not fully, fairly and adequately reflected on
the Company Financial Statements (annual and interim), except for a specific
list of Company Liabilities set forth on Schedule 2(r)
attached hereto and made a part hereof.  As of the Closing Date,
neither the Company nor any of its Subsidiaries will have any Company
Liabilities, other than Company Liabilities fully and adequately reflected on
the Company Financial Statements or herein or other than Company Liabilities
incurred in the ordinary course of business (which, in the case of the Company,
shall not exceed $25,000 in the aggregate) on the date of Closing.  To
the Company’s knowledge, there is no circumstance, condition, event or
arrangement which may hereafter give rise to any Company Liabilities not in the
ordinary course of business other than as set forth on Schedule
2(r).

     

    
      
         

      

      
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    s)           Operations of the Company
and its Subsidiaries.  From
the date of this Agreement through the Closing Date or earlier termination of
this Agreement, neither the Company nor any of its Subsidiaries have or, without
the prior written consent of Buyer, not to be unreasonably withheld,
will:

     

    i.           incur
any indebtedness or borrowed money (provided, however, the Company may
restructure or repay its outstanding debt with RZB);

     

    ii.           declare
or pay any dividend or declare or made any distribution of any kind to any
holder of Common Units, or made any direct or indirect redemption, retirement,
purchase or other acquisition of any interests in its capital
structure;

     

    iii.           make
any loan or advance to any shareholder, officer, director, employee, consultant,
agent or other representative or make any other loan or advance;

     

    iv.           dispose
of any assets of the Company other than in the ordinary course of
business;

     

    v.           increase
the level of compensation of any executive employee of the Company or any of its
Subsidiaries;

     

    vi.           increase,
terminate, amend or otherwise modify any plan for the benefit of employees of
the Company or any of its Subsidiaries;

     

    vii.           issue
any equity securities or rights to acquire such equity securities;
or

     

    viii.           enter
into or modify any contract, agreement or transaction material to the business
of the Company or any of its Subsidiaries.

     

    t)           Capitalization.  Schedule 2(t) hereto
sets out (i) the number of Common Units of the Company currently issued and
outstanding, (ii) each agreement granting any person the option to acquire
Common Units in the future and the maximum number of Common Units that can be
acquired under such option, and (iii) each debenture, warrant, convertible
security or other obligation or agreement under which any person has the right
to acquire, by way of purchase, conversion or otherwise, Common Units of the
Company in the future and the maximum number of Common Units that may be
acquired under each such debenture, warrant or other obligation or agreement to
which the Company is a party.  Except as set forth on Schedule 2(t), the
Company is current with respect to all dividend obligations with respect to its
Common Units.  Except as set forth on Schedule 2(t), the
Company has no issued and outstanding equity interests other than the Common
Units.  The Company has no subsidiaries which currently own assets or
have any liabilities other than the Subsidiaries and POI.

     

    u)           Full
Disclosure.  The
Company has provided Buyer with all information requested by Buyer in connection
with its decision to purchase the GP Interests and the Newly Issued Common
Units.  To the Company’s knowledge, there are no facts which
(individually or in the aggregate) materially adversely affect the business,
assets, liabilities, financial condition, prospects or operations of the Company
that have not been set forth in this Agreement or in any document or schedule to
be delivered by it pursuant hereto.  No representation or warranty by
the Company in this Agreement or in any document or schedule to be delivered by
it pursuant hereto, and no written statement, certificate or instrument
furnished or to be furnished by the Company pursuant hereto or in connection
with the negotiation, execution or performance of this Agreement contains or
will contain any untrue statement of a material fact or omits or, to the
Company’s knowledge, will omit to state any fact necessary to make any statement
herein or therein not materially misleading or necessary to a complete and
correct presentation of all material aspects of the business of the Company and
its Subsidiaries, and/or the status of the GP Interests and the Newly Issued
Common Units.

     

    
      
         

      

      
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    v)           Option, Warrants, Conversion
Rights.  Except as set forth in Schedule 2(v), there
are no outstanding subscriptions, options, convertible securities, warrants or
calls to purchase or otherwise acquire any securities of the
Company.

     

    w)           Permits,
Authorizations.  Excepts as set forth in Schedule 2(w), the
Company and its Subsidiaries possess all necessary licenses, permits,
authorizations and other qualifications as are necessary to continue to conduct
their respective businesses as presently conducted.

     

    3.           REPRESENTATIONS
AND WARRANTIES OF SELLER

     

    Seller
hereby represents and warrants as follows:

     

    a)           Organization and Good
Standing.  The
GP is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware except as set forth in Schedule
3(a).  The GP has the company power and authority to carry on
its business as presently conducted, except as set forth in Schedule 3(a), and is
duly qualified to do business in any jurisdiction where so required except where
the failure to so qualify would not adversely affect its business in any
material respect.

     

    b)           Authority.  The
GP has the power to operate as a limited liability company.  The
execution and delivery of this Agreement by Seller, and the consummation of the
transactions contemplated hereby, are not in violation of any limited liability
company restrictions governing member transactions.  Subject to the
satisfaction of the condition precedent set out in Section 5(a)(vi)
hereof, the execution of this Agreement and the consummation of the transactions
contemplated hereby on the Closing Date will not constitute a breach of any
agreement, indenture, mortgage, license or other instrument or document to which
the GP or Seller is a party and will not violate any judgment, decree, order,
writ, rule, statute, or regulation applicable to Seller or the GP or its
properties.  The execution and performance of this Agreement will not
violate or conflict with any provision of the Certificate of Formation or the
Limited Liability Company Agreement of the GP.

     

    c)           Ownership of
Interests.  Seller
is the owner of record and beneficially of Seventy Five Percent (75%) of the
membership interests of the GP and has the contract right to cause the other
Twenty Five (25%) of the GP Interest to be transferred to Buyer at
Closing.  Seller represents and warrants that the GP Interests shall
be delivered and assigned to Buyer on the Closing Date free and clear of all
rights, claims, liens and encumbrances.  There are no outstanding
subscriptions, options, convertible securities, warrants or calls to purchase or
otherwise acquire any securities of GP.

     

    
      
         

      

      
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    d)           Approvals.  To
Seller’s knowledge, no approval, authorization, consent, order or other action
of, or filing with, any person, firm or corporation or any court, administrative
agency or other governmental authority is required in connection with the
execution and delivery of this Agreement by Seller or the consummation of the
transactions described herein, other than as set forth on Schedule
3(d).

     

    e)           Financial Statements, Books
and Records.  Attached
as Schedule
3(e)-1 are the internal unaudited financial statements of GP for the
years ended December 31, 2009 and December 31, 2008 and (the “GP Financial
Statements”).  Except as set forth on Schedule 3(e)-2, to
Seller’s knowledge, the GP Financial Statements, books of account and other
financial records of GP are complete and correct in all material respects and
are maintained in accordance with good business and accounting
practices.

     

    f)           No Material Adverse
Changes.  Except
as set forth on Schedule 3(f), since
December 31, 2009, to Seller’s knowledge there has not been:

     

    i.           any
material adverse change in the financial position of GP except changes arising
in the ordinary course of business, which changes are not reasonably likely to
materially and adversely affect the financial position of GP in any material
respect;

     

    ii.           any
damage, destruction or loss materially affecting the assets, prospective
business, operations or condition (financial or otherwise) of GP whether or not
covered by insurance;

     

    iii.           any
declaration, setting aside or payment of any dividend or distribution with
respect to any redemption or repurchase of GP limited liability company
interests;

     

    iv.           any
sale of an asset (other than in the ordinary course of business) or any mortgage
or pledge by GP of any properties or assets;

     

    v.           adoption
of any pension, profit sharing, retirement, stock bonus, stock option or similar
plan or arrangement; or

     

    vi.           payments
or asset purchases not in the ordinary course of business.

     

    g)           Taxes.  To
Seller’s knowledge, except as set forth on Schedule 3(g), GP has
filed all material tax, governmental and/or related forms and reports (or
extensions thereof) due or required to be filed and has paid or made adequate
provisions for all taxes or assessments which have become due as of the Closing
Date as shown to be due on such reports and returns, and there are no deficiency
notices outstanding.  To Seller’s knowledge, no extensions of time for
the assessment of deficiencies for any year is in effect.  To Seller’s
knowledge, no deficiency notice is proposed or, to the knowledge of Seller,
threatened against GP.  During the past five years, the tax returns of
GP have not been audited.

     

    h)           Compliance with
Laws.  Except
as set forth on Schedule 3(h), to
Seller’s knowledge, GP has complied with all federal, state, county and local
laws, ordinances, regulations, inspections, orders, judgments, injunctions,
awards or decrees applicable to it or its business which, if not complied with,
would adversely affect the business of GP in any material respect.

     

    
      
         

      

      
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    i)           No Breach.  The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby will not:

     

    i.           violate
any provision of the Certificate of Formation or the Limited Liability Company
Agreement of GP;

     

    ii.           violate,
conflict with or result in the breach of any of the terms of, result in a
material modification of, otherwise give any other contracting party the right
to terminate, or constitute (or with notice or lapse of time, or both
constitute) a default under any contract or other agreement to which GP is a
party or by or to which it or any of its assets or properties may be bound or
subject;

     

    iii.           violate
any order, judgment, injunction, award or decree of any court, arbitrator or
governmental or regulatory body against, or binding upon, GP or upon the
properties or business of GP; or

     

    iv.           To
Seller’s knowledge, violate any statute, law or regulation of any jurisdiction
applicable to the transactions contemplated herein which could have a material,
adverse effect on the business or operations of GP.

     

    j)           Offering
Valid.  The offer, sale and issuance of the Newly Issued Common
Units and the offer and sale of the GP Interests will be exempt from the
registration requirements of the Securities Act, and will have been registered
or qualified (or are exempt from registration and qualification) under the
registration or qualification requirements of all applicable state securities
laws.  Neither the Company, the GP nor any agent on their behalf has
solicited or will solicit any offers to sell or has offered to sell or will
offer to sell all or any part of the Newly Issued Common Units and the GP
Interests to any person or persons so as to bring the sale of such Newly Issued
Common Units and GP Interests by the Company within the registration provisions
of the Securities Act or any state securities laws.

     

    k)           Actions and
Proceedings.  To
Seller’s knowledge, except as set forth in Schedule 3(k), GP is
not a party to, or affected by, any material pending litigation.  To
Seller’s knowledge, GP is not a party to any governmental investigation or
proceeding not reflected in the GP Financial Statements and, to its knowledge,
no material litigation, claims, assessments or non-governmental proceedings are
threatened against GP except as set forth on Schedule 3(k)
attached hereto and made a part hereof.

     

    l)           Agreements.  Schedule 3(l) sets
forth all material contracts or arrangements to which GP is a party or by or to
which it or its assets, properties or business are bound or subject, whether
written or oral.

     

    m)           Brokers or
Finders.  No
broker’s or finder’s fee will be payable by GP or Seller in connection with the
transactions contemplated by this Agreement, nor will any such fee be incurred
as a result of any actions by GP or Seller hereunder.

     

    
      
         

      

      
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    n)           Real
Estate.  Schedule 3(n) sets
forth all real property owned by the GP and all leasehold agreements with a term
in excess of 90 days for real property, equipment or services to which the GP is
a party.  To Seller’s knowledge, all uses of any real property or
leases of real property by GP have conformed in all material respects to all
applicable building and zoning ordinances, laws and regulations.

     

    o)           OSHA and Environmental
Compliance.  To
Seller’s knowledge, the GP has duly complied with, and its offices, real
property, business, assets, leaseholds and equipment have been in compliance in
all material respects with, the provisions of the Federal Occupational Safety
and Health Act, the Environmental Protection Act, and all other environmental
laws.  To Seller’s knowledge, no citations, notices or orders of
non-compliance have been issued to GP or relating to its business, assets,
property or equipment under such laws, rules or regulations.  There
are no releases, spills, discharges, leaks or disposal (collectively, referred
to as “GP
Releases”) of hazardous substances at, upon, under or within the real
property owned or leased by GP.  To Seller’s knowledge, no real
property owned or leased by the GP has been used as a treatment, storage or
disposal facility of hazardous waste.  To Seller’s knowledge, no
hazardous substances are present on the real property or any premises leased by
GP excepting such quantities as are handled in accordance with all applicable
manufacturer’s instructions and governmental regulations and in the proper
storage containers and as are necessary for the operation of the commercial
business of GP.

     

    p)           Tangible
Assets.  To
Seller’s knowledge, all machinery, equipment, furniture, leasehold improvements,
fixtures, projects, owned or leased by GP, any related capitalized items or
other tangible property which are material to the business of GP are described
in Schedule 3(p)
hereto (the “GP Tangible
Assets”).  To Seller’s knowledge, other than as set forth in
Schedule 3(p),
GP holds all rights, title and interest in all the Tangible Assets owned by it
on the GP Financial Statements and Schedule 3(p) and
acquired by it after the date of the GP Financial Statements free and clear of
all liens, pledges, mortgages, security interests, conditional sales contracts
or any other encumbrances except those which are set out in Schedule 3(p)
hereto.  To Seller’s knowledge, all of the GP Tangible Assets are in
good operating condition and repair, subject to reasonable wear and tear due to
the elements and lapse of time and are usable in the ordinary course of business
of GP and conform to all applicable laws, ordinances and government orders,
rules and regulations relating to their construction and operation, except as
set forth on Schedule
3(p) hereto.  Except as set forth on Schedule 3(p), GP
owns no intellectual properties, including trademarks and the like.

     

    q)           Liabilities.  To
Seller’s knowledge, GP does not have any material direct or indirect
indebtedness, liability, claim, loss, damage, deficiency, obligation or
responsibility, known or unknown, fixed or unfixed, liquidated or unliquidated,
secured or unsecured, accrued or absolute, contingent or otherwise, including,
without limitation, any liability on account of taxes, any governmental charge
or lawsuit (all of the foregoing collectively defined to as “GP
Liabilities”), which are not fully, fairly and adequately reflected on
the GP Financial Statements (annual and interim), except for a specific list of
GP Liabilities set forth on Schedule 3(q)
attached hereto and made a part hereof.  To Seller’s knowledge, as of
the Closing Date, GP will not have any liabilities, other than GP Liabilities
fully and adequately reflected on the GP Financial Statements or herein other
than GP Liabilities incurred in the ordinary course of business which will not
exceed $25,000 on the date of Closing.  To Seller’s knowledge, there
is no circumstance, condition, event or arrangement which may hereafter give
rise to any GP Liabilities not in the ordinary course of business.

     

    
      
         

      

      
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    r)           Operations of
GP.  From
the date of this Agreement through the Closing Date or earlier termination of
this Agreement, GP has not, and, without the prior written consent of Buyer, not
to be unreasonably withheld, will not have:

     

    i.           incurred
any indebtedness or borrowed money;

     

    ii.           declared
or paid any dividend or declared or made any distribution of any kind to any
member, or made any direct or indirect redemption, retirement, purchase or other
acquisition of any interests in its capital structure;

     

    iii.           made
any loan or advance to any member, officer, director, employee, consultant,
agent or other representative or made any other loan or advance;

     

    iv.           disposed
of any assets of GP other than in the ordinary course of business;

     

    v.           increased
the level of compensation of any executive employee of GP;

     

    vi.           increased,
terminated, amended or otherwise modified any plan for the benefit of employees
of GP;

     

    vii.           issued
any equity securities or rights to acquire such equity securities;

     

    viii.           entered
into or modified any contract, agreement or transaction material to the business
of the GP.

     

    s)           Capitalization.  Schedule 3(s) sets
out (i) the number of limited liability company interests in GP currently issued
and outstanding and the record owners thereof, (ii) each agreement granting any
person the option to acquire limited liability interests in the GP in the future
and the maximum number of limited liability company interests that can be
acquired under such agreement and (iii) each other obligation or agreement of
the GP under which any person has the right to acquire, by purchase, conversion
or otherwise, limited liability company interests in the GP in the future and
the maximum number of limited liability company interests that may be acquired
under such obligation or agreement.  Except as set forth in Schedule 3(s), the GP
is current with respect to all distribution obligations.

     

    t)           Full
Disclosure.  Seller
has provided Purchaser with all information requested by Buyer in connection
with its decision to purchase the GP Interests and Common Units.  To
the Seller’s knowledge, there are no facts which (individually or in the
aggregate) materially adversely affect the business, assets, liabilities,
financial condition, prospects or operations of the Company that have not been
set forth in this Agreement or in any document or schedule to be delivered by it
pursuant hereto.  To Seller’s knowledge, no representation or warranty
by Seller in this Agreement or in any document or schedule to be delivered by
them pursuant hereto, and no written statement, certificate or instrument
furnished or to be furnished by Seller pursuant hereto or in connection with the
negotiation, execution or performance of this Agreement contains or, to the
Seller’s knowledge, will contain any untrue statement of a material fact or
omits or will omit to state any fact necessary to make any statement herein or
therein not materially misleading or necessary to a complete and correct
presentation of all material aspects of the business of the GP, and/or the
status of the GP Interests.

     

    
      
         

      

      
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    4.           REPRESENTATIONS
AND WARRANTIES OF BUYER

     

    a)           Organization and Good
Standing.  Buyer
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware.  It has the power to
own its own property and to carry on its business as now being conducted and is
duly qualified to do business in any jurisdiction where so required except where
the failure to so qualify would have no material adverse effect on its
business.

     

    b)           Partnership
Authority.  Buyer
has the power to enter into this Agreement and to perform its obligations
hereunder.  The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby has been, or will be prior
to the Closing Date, duly authorized by Buyer.  The execution and
performance of this Agreement will not constitute a material breach of any
agreement, indenture, mortgage, license or other instrument or document to which
Buyer is a party and will not violate any judgment, decree, order, writ, rule,
statute, or regulation applicable to Buyer or its properties.  The
execution and performance of this Agreement will not violate or conflict with
any provision of the Certificate of Formation or Limited Liability Company
Agreement of Buyer.

     

    c)           Brokers or
Finders.  No
broker’s or finder’s fee will be payable by Buyer in connection with the
transactions contemplated by this Agreement for which the Company or Seller will
have any liability, nor will any such fee be incurred by the Company, the GP or
Seller as a result of any actions of Buyer hereunder.

     

    d)           Investment
Intent.  Buyer
hereby represents that the Interests are being acquired for Buyer’s own account
with no intention of distributing such securities or any interest therein or the
assets or operations of the Company or the GP directly or indirectly to others,
and Buyer has no contract, undertaking, agreement or arrangement with any person
to sell, transfer or otherwise distribute to any person or to have any person
sell, transfer or otherwise distribute, directly or indirectly, the Interests or
any interest therein or the assets or operations of the Company or the GP;
provided, however, that the Buyer may distribute the Interests to members of the
Buyer or the partners in a partnership where the Buyer is a
partner.  Buyer is an “accredited investor” as defined in Regulation D
under the Securities Act.

     

    e)           Full
Disclosure.  No
representation or warranty by Buyer in this Agreement or in any document or
schedule to be delivered pursuant hereto, and no written statement, certificate
or instrument furnished or to be furnished by Buyer pursuant hereto or in
connection with the negotiation, execution or performance of this Agreement
contains or will contain any untrue statement of a material fact or, to Buyer’s
knowledge, omits or will omit to state any fact necessary to make any statement
herein or therein not materially misleading or necessary to complete and correct
presentation of all material aspects of the business of Buyer.

     

    
      
         

      

      
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    5.           CONDITIONS
PRECEDENT

     

    a)           Conditions Precedent to the
Obligation of Buyer.  All
obligations of Buyer under this Agreement are subject to the fulfillment, prior
to or as of the Closing Date, as indicated below, of each of the following
conditions:

     

    i.           Satisfactory
completion of customary and normal due diligence by Buyer relating to the
Company, the GP, the Subsidiaries and their respective assets;

     

    ii.           Settlement
of the Camacho Lawsuit, identified on Schedule 2(l), by the
Company and its Subsidiaries in a manner satisfactory to Buyer;

     

    iii.           Settlement
of all outstanding claims Gary Moores has or may have against the Company in
respect of a promissory note having an original stated principal amount of
$500,000, as subsequently amended, including a full release by Moores of the
Company from any indemnification obligations relating to Energy Spectrum, for a
total amount not to exceed $200,000;

     

    iv.           Settlement
of and/or the provision of adequate reserves or other adequate assurance by the
Company and its Subsidiaries with respect to the Scheduled Litigation in a
manner satisfactory to Buyer;

     

    v.           Sufficient
progress by the Company, to the satisfaction of Buyer, with respect to a final
determination from the United States Internal Revenue Service (the “IRS”)
regarding the amount, and ultimate settlement, of (i) the Company’s and
Regional’s unpaid taxes, and (ii) any penalties for non-filing of taxes owed by
the Company, its Subsidiaries, or Regional (collectively, the “IRS Tax
Liability”);

     

    vi.           The
receipt of an assignment from JBR Capital Resources, Inc. (“JBR”) of
its GP Interests to Buyer, to be held in escrow prior to Closing, subject only
to the payment of $575,000 (the “JBR Settlement
Amount”) due under that certain Confidential Settlement Agreement and
General Release of Claims dated March 30, 2010 between Jerome B. Richter, JBR,
Seller and the Company (the “Settlement
Agreement”); said amount to be paid by the Company at Closing, out of the
Purchase Price;

     

    vii.           An
amendment to that certain Loan Agreement, dated July 26, 2007, as amended,
between the Company, as borrower, and RZB Finance, LLC (“RZB”), as
lender (the “Loan
Agreement”), that is satisfactory to Buyer, related to restructuring of
the current and expected increase to monthly amortization amounts thereunder to
a level consistent with the Company’s financial ability to service and amortize
the loan, along with an amendment to, or waiver by RZB of, any change of control
provision contained in the Loan Agreement which would prohibit the consummation
of the transactions contemplated by this Agreement;

     

    viii.           Settlement
and release of (a) the Intercompany Note and (b) any other outstanding
obligations to executive officers and directors of the Company (the “Insider
Obligations”), evidenced by a form of release reasonably satisfactory to
Buyer, for an amount equal to $1,400,000, subject, however, to possible upward
adjustment with respect to the Intercompany Note as provided in Section
1(e);

     

    
      
         

      

      
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    ix.           Settlement,
release or satisfaction by the Company in a manner reasonably satisfactory to
Buyer of a sufficient amount of (a) claims relating to the Scheduled Litigation
and any and all other litigation, suits and claims made against the Company
and/or its Subsidiaries (“Litigation
Claims”) and (b) creditor claims identified on Schedule 5(a)(ix)
(the “Creditor
Claims” and together with the Litigation Claims, the “Claims”)
by the Company at Closing with proceeds from the Purchase Price (inclusive of
amounts used to settle the Insider Obligations) such that the aggregate dollar
amount of such settled Claims (“Settled
Claims”), plus the aggregate dollar amount of 100% of all unsettled
Claims (“Unsettled
Claims”) in amounts not less than those set forth on Schedule 5(a)(ix),
plus $250,000 reserved for the payment of the IRS Tax Liability, shall be equal
to or less than $4,000,000.  The difference, if any, between
$4,000,000 and the total amount of the Settled Claims, the Unsettled Claims and
the amount reserved for the IRS Tax Liability shall be the “Settled
Surplus”;

     

    x.           The
establishment of a restricted banking account in the name of the Company (the
“Reserve
Account”) into which all portions of the Purchase Price not utilized at
Closing to pay Settled Claims shall be deposited for the purpose of establishing
a reserve sufficient to enable the Company to pay, to the extent required, the
sum of the following amounts:  (a) 100% of the amount of all Unsettled
Claims, and (b) the full estimated amount of IRS Tax Liability and any other
unpaid taxes or penalties of the Company, the GP or the Subsidiaries existing as
of the Closing Date (collectively, “Unpaid
Taxes”).  Following the Closing Date, funds shall be disbursed
from the Reserve Account to satisfy the requirements specified herein under the
joint direction and control of Buyer and the Company;

     

    xi.           A
contribution by the Seller of the GP Unit Purchase Price to the Company,
simultaneously with Closing, on behalf of the GP;

     

    xii.           The
resignation of the current Board of Managers of the Company;

     

    xiii.           The
representations and warranties by the Company and Seller, contained in this
Agreement and in any certificate or document delivered pursuant to the
provisions hereof shall be true in all material respects at and as of the
Closing Date as though such representations and warranties were made at and as
of such time;

     

    xiv.           The
Company and Seller shall have performed and complied with, in all material
respects, all covenants, agreements, and conditions set forth in, and shall have
executed and delivered all documents required by this Agreement to be performed
or complied or executed and delivered by it prior to or at the
Closing;

     

    xv.           That
certain Omnibus Agreement dated September 16, 2004 by and among Seller, the GP,
the Company and RVOP, as amended (the “Omnibus
Agreement”), shall have been terminated in a manner reasonably
satisfactory to Buyer;

     

    
      
         

      

      
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    xvi.           On
the Closing Date, the Company shall have delivered to Buyer the Newly Issued
Common Units and Seller shall have delivered to Buyer certificates representing
the GP Interests along with duly executed powers transferring such certificates
to Buyer, and the Company and Seller shall deliver the other closing items
specified in Section
8(b)(i) and (ii) hereto to
Buyer;

     

    xvii.           Receipt
of an updated Schedule
5(a)(ix) from Seller as of the Closing Date, in form and substance
reasonably acceptable to Buyer;

     

    xviii.                      Receipt
of a fully executed Written Consent of Certain Shareholders of the Seller (the
“Shareholder
Consent”), in a form reasonably acceptable to Buyer, consenting to the
sale by the Seller of the GP Interests; and

     

    xix.           A
waiver or release by Seller of any indebtedness of GP to Seller.

     

    b)           Waiver or Termination by
Buyer.  The
conditions contained in Section 5(a) hereof
are inserted for the exclusive benefit of Buyer and may be waived in whole or in
part by Buyer at any time.  Such waiver must be in a writing signed by
Buyer.  The Company and Seller acknowledge that the waiver by Buyer of
any condition or any part of any condition shall constitute a waiver only of
such condition or such part of such condition, as the case may be, and shall not
constitute a waiver of any covenant, agreement, representation or warranty made
by the Company or Seller herein that corresponds or is related to such condition
or such part of such condition, as the case may be.  If any of the
conditions contained in Section 5(a) hereof
are not fulfilled or complied with as herein provided, Buyer may, at or before
the Closing Date at its option, rescind this Agreement by notice in writing to
the Company and Seller and in such event Buyer shall be released from all
obligations hereunder and the Company and Seller shall also be released from all
obligations hereunder.

     

    c)           Conditions Precedent to the
Obligations of the Company and Seller.  All
obligations of the Company and Seller under this Agreement are subject to the
fulfillment, prior to or as of the Closing Date, of each of the following
conditions:

     

    i.           The
representations and warranties by or on behalf of Buyer contained in this
Agreement or in any certificate or document delivered pursuant to the provisions
hereof shall be true and correct in all material respects at and as of Closing
Date as though such representations and warranties were made at and as of such
time;

     

    ii.           Buyer
shall have performed and complied in all material respects, with all covenants,
agreements, and conditions set forth in, and shall have executed and delivered
all documents required by this Agreement to be performed or complied with or
executed and delivered by Buyer prior to or at the Closing;

     

    iii.           Receipt
by the Company of the Shareholder Consent;

     

    iv.           Agreement
with Buyer on an updated Schedule 5(a)(ix) as
of the Closing Date from Seller; and

     

    
      
         

      

      
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    v.           On
the Closing Date, Buyer shall deliver the Purchase Price and the other closing
items specified in Section 8(b)(iii)
hereof to the Company.

     

    d)           Waiver or Termination by the
Company or Seller.  The
conditions contained in Section 5(c) hereof
are inserted for the exclusive benefit of the Company and Seller and may be
waived in whole or in part by the Company or Seller at any time.  Such
waiver must be in a signed writing.  Buyer acknowledges that the
waiver by the Company or Seller of any condition or any part of any condition
shall constitute a waiver only of such condition or such part of such condition,
as the case may be, and shall not constitute a waiver of any covenant,
agreement, representation or warranty made by Buyer herein that corresponds or
is related to such condition or such part of such condition, as the case may
be.  If any of the conditions contained in Section 5(c) hereof
are not fulfilled or complied with as herein provided, the Company or the Seller
may, at or before the Closing Date at their option, rescind this Agreement by
notice in writing to Buyer and in such event the Company and Seller shall be
released from all obligations hereunder and Buyer shall also be released from
all obligations hereunder.

     

    6.           COVENANTS

     

    a)           Access to
Records.  Prior
to the Closing Date, the corporate financial records, minute books and other
documents and records of the Company and its Subsidiaries shall have been and
will be made available to Buyer and its representatives for inspection, subject
to the confidentiality obligations set forth in Section 6(e) below.

     

    b)           Corporate Examinations and
Investigations.  Prior
to the Closing Date, the parties acknowledge that they have been and will be
entitled, through their employees and representatives, to make such
investigation of the assets, properties, business and operations, books, records
and financial condition of the other as they each may reasonably
require.  No investigations, by a party hereto shall, however,
diminish or waive any of the representations, warranties, covenants or
agreements of the party under this Agreement.

     

    c)           Assignment of JBR GP
Interests.  Prior to the Closing Date, Seller shall cause JBR
to assign its GP Interests to Buyer in accordance with the Settlement Agreement,
to be held in escrow by counsel for Buyer, subject only to the payment of the
JBR Settlement Amount on the Closing Date, either directly from Buyer or from
the Company.

     

    d)           Further
Assurances.  The
parties shall execute such documents and other papers and take such further
actions as may be reasonably required or desirable to carry out the provisions
hereof and the transactions contemplated hereby.  Each such party
shall use commercially reasonable efforts to fulfill or obtain the fulfillment
of the conditions to the Closing, including, without limitation, the execution
and delivery of any documents or other papers, the execution and delivery of
which are necessary or appropriate to the Closing.

     

    e)           Confidentiality.  Prior
to the Closing Date and, in the event the transactions contemplated by this
Agreement are not consummated, the Company, Seller and Buyer agree to keep
strictly confidential any information disclosed to each other in connection
therewith for a period of one (1) year from the date hereof; provided, however,
such obligation shall not apply to information which:

     

    
      
         

      

      
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    i.           at
the time of the disclosure was public knowledge;

     

    ii.           after
the time of disclosure becomes public knowledge (except due to the action of the
receiving party);

     

    iii.           the
receiving party had within its possession at the time of
disclosure;

     

    iv.           is
ordered disclosed by a Court or regulatory agency of proper jurisdiction;
or

     

    v.           is
required, in a party’s reasonable opinion based on written advice of legal
counsel, to be disclosed by applicable securities law.

     

    f)           Preservation of Books and
Records.  For
a period of seven (7) years after the Closing Date, Buyer shall (i) preserve and
retain the corporate, accounting, legal, auditing, tax and other books and
records of the Company and its Subsidiaries, and GP (including, but not limited
to, any documents relating to any governmental or non-governmental actions,
suits, proceedings or investigations arising out of the conduct of the business
and operations of the Company or its Subsidiaries prior to the Closing Date) and
(ii) make such books and records available at the place where such books and
records are normally maintained to Seller and its officers, employees,
representatives, accountants and auditors (collectively, “Seller
Representatives”) upon reasonable notice and at reasonable times, it
being understood that Seller and Seller’s Representatives shall be entitled to
make copies of any such books and records as it shall deem
necessary.  Buyer agrees to permit Seller and Seller’s Representatives
to meet with the employees, accountants and auditors of Buyer, the Company, GP
and the Subsidiaries on a mutually convenient basis in order to enable Seller
and Seller’s Representatives to obtain additional information and explanations
of any materials provided pursuant to this Section
6(f).  Buyer further agrees to exercise its best efforts to
cause the accountants and auditors of the Company, GP and the Subsidiaries to
cooperate with and release information to Seller as may reasonably be required
for Seller to prepare financial statements and tax returns that will require
inclusion of financial or accounting information relating to the Company, GP or
the Subsidiaries.

     

    7.           SURVIVAL
OF REPRESENTATIONS AND WARRANTIES

     

    Notwithstanding
any right of either party to investigate the affairs of the other party, each
party has the right to rely fully upon representations, warranties, covenants
and agreements of the other party contained in this Agreement or in any document
delivered to one by the other or any of their representatives, in connection
with the transactions contemplated by this Agreement.  All such
representations, warranties, covenants and agreements shall survive the
execution and delivery hereof and the closing hereunder for one year following
the Closing.

     

    8.           DOCUMENTS
AT CLOSING AND THE CLOSING

     

    a)           The
Closing.  The
Closing shall take place at the earliest possible date (the “Closing
Date”) after the execution of this Agreement, but in any event not later
than June 4, 2010 (as the same may be extended, the “Outside
Date”) at the offices of counsel for Buyer, Sonnenschein Nath &
Rosenthal, LLP, 2000 McKinney Ave., Suite 1900, Dallas, Texas 75201, provided
however, that, so long as Buyer is not in default of any of its obligations
hereunder, it shall have the option to extend the Outside Date, in its
discretion, to July 1, 2010 upon payment to the Company by wire transfer of
$22,000.  The date on which the Closing actually occurs shall be the
Closing Date.

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    b)           Documents at
Closing.  At
the Closing, the following transactions shall occur, all of such transactions
being deemed to occur simultaneously:

     

    i.           the
Company will deliver, or will cause to be delivered, to Buyer the
following:

     

    
      	
               
      

            	
              1.

            	
              a
      certificate executed by the President or Secretary of the Company to the
      effect that all representations and warranties made by the Company under
      this Agreement are true and correct as of the Closing, the same as though
      originally given to Buyer on said
date;

            

    

     

    
      	
               
      

            	
              2.

            	
              a
      certificate from the State of Delaware dated at or about the Closing to
      the effect that the Company is in good standing under the laws of said
      State;

            

    

     

    
      	
               
      

            	
              3.

            	
              a
      certificate from the Commonwealth of Virginia dated at or about the
      Closing to the effect that Regional is dully qualified and in good
      standing to do business in the Commonwealth of
  Virginia;

            

    

     

    
      	
               
      

            	
              4.

            	
              certificates
      representing the Newly Issued Common Units in the name of
      Buyer;

            

    

     

    
      	
               
      

            	
              5.

            	
              an
      opinion from legal counsel to the Company acceptable to Buyer providing
      favorable written opinions covering, among other things, the due
      authorization and enforceability of this Agreement and the proper
      authorization and issuance of the Newly Issued Common Units to Buyer
      pursuant to an exception from SEC registration;
  and

            

    

     

    
      	
               
      

            	
              6.

            	
              all
      other items, the delivery of which is a condition precedent to the
      obligations of Buyer, as set forth in Section
      5(a).

            

    

     

    ii.           Seller
will deliver, or will cause to be delivered, to Buyer the
following:

     

    
      	
               
      

            	
              1.

            	
              a
      certificate executed by the President or Secretary of the Seller to the
      effect that all representations and warranties made by the Seller under
      this Agreement are true and correct as of the Closing, the same as though
      originally given to Buyer on said
date;

            

    

     

    
      	
               
      

            	
              2.

            	
              a
      certificate from the State of Delaware dated at or about the Closing to
      the effect that the Seller is in good standing under the laws of said
      State;

            

    

     

    
      	
               
      

            	
              3.

            	
              the
      Shareholder Consent, executed by certain shareholders of the Seller,
      consenting to the sale of the GP
Interests;

            

    

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              4.

            	
              Certificates
      representing the GP Interests, along with duly executed powers
      transferring such certificates to
Buyer;

            

    

     

    
      	
               
      

            	
              5.

            	
              an
      opinion from legal counsel to the Seller acceptable to Buyer providing
      favorable written opinions covering, among other things, the due
      authorization and enforceability of this Agreement and the proper
      authorization and authority to transfer the GP Interests to Buyer;
      and

            

    

     

    
      	
               
      

            	
              6.

            	
              all
      other items, the delivery of which is a condition precedent to the
      obligations of Buyer, as set forth in Section
      5(a).

            

    

     

    iii.           Buyer
will deliver or cause to be delivered to the Company the following:

     

    
      	
               
      

            	
              1.

            	
              a
      certificate executed by the Managing Director of Buyer to the effect that
      all representations and warranties of Buyer made under this Agreement are
      true and correct as of the Closing, the same as though originally given to
      the Company on said date;

            

    

     

    
      	
               
      

            	
              2.

            	
              a
      certificate from the State of Delaware at or about Closing to the effect
      that Buyer is in good standing in
Delaware;

            

    

     

    
      	
               
      

            	
              3.

            	
              the
      Purchase Price (to the Company or as otherwise directed by the Company in
      writing prior to the Closing) ; and

            

    

     

    
      	
               
      

            	
              4.

            	
              all
      other items, the delivery of which is a condition precedent to the
      obligations of the Company and Seller, as set forth in Section 5(c)
      plus such other documentation as may be reasonably required in connection
      with the transactions contemplated by this Agreement, including without
      limitation, under the First Amended and Restated Agreement of Limited
      Partnership of the Company).

            

    

     

    9.           POST-CLOSING

     

    a)           Assistance.  Following
Closing, Seller, to the extent it is in existence, shall use commercially
reasonable efforts to assist Buyer in the operation of the Company with respect
to matters which, prior to Closing, Seller had direct involvement
with.

     

    10.           MISCELLANEOUS

     

    a)           Waivers.  The
waiver of a breach of this Agreement or the failure of any party hereto to
exercise any right under this Agreement shall in no way constitute waiver as to
future breach whether similar or dissimilar in nature or as to the exercise of
any further right under this Agreement.

     

    b)           Amendment.  This
Agreement may be amended or modified only by an instrument of equal formality
signed by the parties or the duly authorized representatives of the respective
parties.

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    c)           Assignment.  This
Agreement is not assignable by the Company or Seller with out the prior written
consent of Buyer, which consent may be given or withheld in the sole discretion
of Buyer.  Buyer shall have the right to assign this Agreement to an
affiliate.

     

    d)           Notice.  Until
otherwise specified in writing, the mailing addresses and fax numbers of the
parties of this Agreement shall be as follows:

     

    To:           the
Company:

     

    Rio Vista
Energy Partners, L.P.

    2121
Rosecrans Avenue, Suite 3355

    El
Segundo, California  90245

    Attention:  Ian
Bothwell

    Fax:  310-563-6255

     

    with copy
to:

     

    John F.F.
Watkins

    Reitler
Kailas & Rosenblatt LLC

    885 Third
Avenue, 20th Floor

    New York,
NY 10022

    Phone:
212-209-3031

    Fax:
212-371-5500

     

    To:           Seller:

     

    Penn
Octane Corporation

    2121
Rosecrans Avenue, Suite 3355

    El
Segundo, California  90245

    Attention:  Ian
Bothwell

    Fax:  310-563-6255

     

    with copy
to:

     

    John F.F.
Watkins

    Reitler
Kailas & Rosenblatt LLC

    885 Third
Avenue, 20th Floor

    New York,
NY 10022

    Phone:
212-209-3031

    Fax:
212-371-5500

     

    To:           Buyer:

     

    Central
Energy, LLC

    8150
North Central Express Way

    Suite
1525

    Dallas,
Texas 75206

    Attention:  Carter
R. Montgomery

           Imad
Anbouba

    Fax:
214.378.8822

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    with copy
to:

     

    Barry F.
Cannaday

    Sonnenschein
Nath & Rosenthal, LLP

    2000
McKinney Avenue, Suite 1900

    Dallas,
Texas  75201

    Fax:  214-259-0910

     

    Any
notice or statement given under this Agreement shall be deemed to have been
given if sent by registered mail addressed to the other party at the address
indicated above or at such other address which shall have been furnished in
writing to the addressor.

     

    e)           Governing
Law.  This
Agreement shall be construed, and the legal relations between the parties
determined, in accordance with the laws of the State of Texas, thereby
precluding any choice of law rules which may direct the application of the laws
of any other jurisdiction.

     

    f)           Arbitration. Any
controversy relating to or arising out of this Agreement shall be submitted to
arbitration in Dallas County, Texas in accordance with the Commercial
Arbitration Rules of the American Arbitration Association but will not be
subject to administration by the American Arbitration
Association.  Upon written demand of either party, the parties shall
meet and attempt to appoint a single Arbitrator.  If the parties fail
to name an arbitrator within ten (10) days from such demand, then the arbitrator
shall be selected from the panels of arbitrators of the American Arbitration
Association.  The arbitrator selected to act hereunder shall be
qualified by education and training to pass upon the particular question in
dispute and shall make a decision on the dispute within sixty (60) days after
his appointment, subject to any reasonable delay due to unforeseen
circumstances.  The compensation and expenses of the single arbitrator
shall be borne equally by the parties.  Arbitration may proceed in the
absence of any party if notice of the proceedings has been given to such
party.  The parties agree to abide by all awards rendered in such
proceedings.

     

    h)           Termination.  This
Agreement may be terminated and the transactions contemplated hereby may be
abandoned at any time prior to the Closing Date:

     

    i.           by
the mutual written consent of Buyer and the Company;

     

    ii.           by
either of the Company or Seller:

     

    
      	
               
      

            	
              1.

            	
              if
      any judgment, injunction, order or decree enjoining Seller or the Company
      from consummating the transactions contemplated under this Agreement is
      entered; or

            

    

     

    
      	
               
      

            	
              2.

            	
              if,
      without any breach by the terminating party of its obligations under this
      Agreement, the Closing Date shall not have occurred on or before the
      Outside Date; or

            

    

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              3.

            	
              if,
      in the good faith judgment of the Board of Directors of the Company or the
      Seller, the Company or the Seller, as the case may be, receives and
      approves a Takeover Proposal (as defined below) that it deems superior to
      the transactions contemplated under this Agreement, provided that Buyer
      has not exercised its option to match any such Takeover
      Proposal.

            

    

     

    iii.           by
Buyer:

     

    
      	
               
      

            	
              1.

            	
              if
      any judgment, injunction, order or decree enjoining Seller or the Company
      from consummating the transactions contemplated under this Agreement is
      entered; or

            

    

     

    
      	
               
      

            	
              2.

            	
              if,
      without any breach by the terminating party of its obligations under this
      Agreement, the Closing Date shall not have occurred on or before the
      Outside Date; or

            

    

     

    
      	
               
      

            	
              3.

            	
              if
      it receives a Takeover Proposal Notice (as defined below) from either the
      Company or Seller, and does not exercise its option to match the Takeover
      Proposal.

            

    

     

    i)           Takeover
Proposal.  Notwithstanding anything to the contrary in this
Agreement, in the event that, prior to the Closing Date, (i) the Company
receives an unsolicited written proposal from a third party buyer (“Third Party
Buyer”) for the sale of all or substantially all of the Company’s assets,
or control of the Company, or (ii) the Seller receives an unsolicited written
proposal from a Third Party Buyer for the sale of all or substantially all of
the Seller’s assets, or control of the GP through the purchase of the GP
Interests (such proposals to the Company or the Seller, collectively a “Takeover
Proposal”) that the independent members of the Board of Directors of the
Company or Seller believe in good faith to be bona fide and superior to the
transactions contemplated by this Agreement, following disclosure thereof to the
full Board of Directors, and (iii) after consultation with outside counsel, the
independent members of the Board of Directors of the Company or Seller determine
in good faith that the failure to take such action would be inconsistent with
the fulfillment of their fiduciary duties to the interest holders and
shareholders of the Company or Seller under applicable law, then the Company and
Seller and the independent members of their respective Board of Directors may
(A) participate in discussions or negotiations (including, as a part thereof,
making any counterproposal) with the Third Party Buyer regarding such Takeover
Proposal and (B) furnish information with respect to the Company or Seller and
their subsidiaries to the Third Party Buyer.

     

    j)           Option to Match Takeover
Proposal.  If the Company or the Seller receives a Takeover
Proposal prior to the Closing Date that the Board of Directors of Seller
believes in good faith to be superior to the transactions contemplated by this
Agreement, the Company or Seller shall immediately notify Buyer, and provide
Buyer with the material terms and conditions of such Takeover Proposal, along
with a copy of any agreement or proposed agreement relating to such Takeover
Proposal (the “Takeover Proposal
Notice”).  Upon receipt of the Takeover Proposal Notice, Buyer
shall have the option, within seven (7) days from its receipt of such Takeover
Proposal Notice (the “Option
Period”) to match any such Takeover Proposal made by a Third Party Buyer
and to thereafter complete the transaction with Company and Seller upon the same
terms and conditions as contained in the Takeover Proposal.  If the
expiration of the Option Period should occur on or after the Outside Date, then
the Outside Date shall be extended to a date three (3) days following the
expiration of the Option Period, or such other date as the Parties may mutually
agree.

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    k)           Break
Fee.  If the Company or Seller terminate this Agreement
pursuant to Section 10(h)(ii)(3), or if Buyer terminates this Agreement pursuant
to Section 10(h)(iii)(3), then Buyer shall be entitled to receive from the
Company and Seller, a break-up fee, which shall be an amount equal to $250,000,
plus the expenses, including attorney’s fees, incurred by Buyer from the
effective date of the Letter of Intent (defined below) through the date of the
termination of this Agreement (the “Break
Fee”).  The Break Fee shall be paid to Buyer not later than the
earlier of the first to occur: (x) ten (10) days following the termination of
this Agreement pursuant to either provision identified in this Section, or (y)
upon the Closing of the other transaction with a Third Party Buyer.

     

    l)           Expenses.  Except
as otherwise expressly provided herein, all fees, costs and expenses incurred by
Buyer, the Company or Seller in negotiating this Agreement or in consummating
the transactions contemplated by this Agreement shall be paid by the party
incurring the same, including, without limitation, legal and accounting fees,
costs and expenses.

     

    m)           Publicity.  No
publicity release or announcement concerning this Agreement or the transactions
contemplated hereby shall be issued by either party hereto at any time from the
signing hereof without advance approval in writing of the form and substance by
the other party, provided that the Company shall be permitted to make such
disclosures as are required by applicable securities laws.

     

    n)           Entire
Agreement.  This
Agreement (including Schedules to be attached hereto) and the collateral
agreements executed in connection with the consummation of the transactions
contemplated herein contain the entire agreement among the parties with respect
to the subject matter hereof, and supersede all prior agreements, written or
oral, with respect thereto, except that the parties hereto acknowledge and agree
that the provisions of Paragraph 8 of that certain Letter of Intent and
Agreement of Exclusivity dated March 5, 2010, as amended, between the Company
and Carter Montgomery Investments and Marjam Global Holdings, Inc. (the “Letter of
Intent”) shall remain in full force and effect.

     

    o)           Headings.  The
headings in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.

     

    p)           Severability of
Provisions.  The
invalidity or unenforceability of any term, phrase, clause, paragraph,
restriction, covenant, agreement or provision of this Agreement shall in no way
affect the validity or enforcement of any other provision or any part
thereof.

     

    q)           Counterparts.  This
Agreement may be executed in any number of counterparts, each of which when so
executed, shall constitute an original copy hereof, but all of which together
shall consider but one and the same document.

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    r)           Binding
Effect.  This
Agreement shall be binding upon the parties hereto and inure to the benefit of
the parties, their respective heirs, administrators, executors, successors and
assigns.

     

    s)           Tax
Treatment.  the
Company and Buyer acknowledge that they each have been represented by their own
tax advisors in connection with this transaction; that none of them has made a
representation or warranty to any of the other parties with respect to the tax
treatment accorded this transaction, or the effect individually or corporately
on any party under the applicable tax laws, regulations, or interpretations; and
that no opinion of counsel or private revenue ruling has been obtained with
respect to the effects of this transaction under the Internal Revenue Code of
1986, as amended.

     

    IN WITNESS WHEREOF, the
parties have executed this Agreement on the date first above
written.

     

    [Signatures on following
page]

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

       

      
        
          	 	
                  COMPANY:

                
	 	 
	 	
                  Rio
      Vista Energy Partners, L.P.

                
	 	 
	 	
                  By:

                	
                  Rio
      Vista, GP LLC

                
	 	 
      	
                  its
      General Partner

                
	 	 	 
	 	
                  By:

                	 
      
	 	 
      	
                  Ian
      T. Bothwell,

                
	 	 
      	
                  President
      and Chief Executive Officer

                
	 	 	 
	 	
                  SELLER:

                
	 	 
	 	
                  Penn
      Octane Corporation

                
	 	 
	 	
                  By:

                	 
      
	 	
                  Name:
      Ian T. Bothwell

                
	 	
                  Title   
      Acting Chief Executive Officer and President

                
	 	 
	 	
                  BUYER:

                
	 	 
	 	
                  Central
      Energy, LLC

                
	 	 
	 	
                  By:

                	 
      
	 	
                  Name:
      Carter R. Montgomery

                
	 	
                  Title:  
      Managing Member

                
	 	 
	 	
                  By:

                	 
      
	 	
                  Name:
      Imad Anbouba

                
	 	
                  Title:  
      Managing Member

                

        

      

    

     

    
      
         

      

      
        29[EXECUTION
COPY]

    

    SEVENTH
AMENDMENT

    

    This SEVENTH AMENDMENT dated as of
May 21, 2010 (this “Seventh Amendment”), is between RZB FINANCE LLC (the
“Lender”) and Regional Enterprises, Inc., a Virginia corporation (as successor
by assumption of obligations to Rio Vista Energy Partners L.P., the
“Borrower”).

    

    W I T N E S S E T
H:

    

    WHEREAS, Lender  and the
Borrower are parties to the Loan Agreement dated as of July 26, 2007 (as
amended, supplemented or otherwise modified from time to time prior to the date
hereof, the “Loan Agreement”; capitalized terms used herein having the meanings
given thereto in the Loan Agreement unless otherwise defined
herein);

    

    WHEREAS, the Borrower has requested the
Lender to agree to certain amendments to the Loan Agreement; and

    

    WHEREAS, the Lender is willing to agree
to such amendments, subject to the terms and conditions set forth
herein.

    

    NOW, THEREFORE, in consideration of the
foregoing and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

    

    Section 1.  Amendments.

    

    The Loan Agreement is hereby amended,
effective on the Effective Date referred to in Section 2 hereof, as
follows:

    

    
      	
              (a)  

            	
              Subsection
      1.1 is amended as follows:

            

    

    

    
      	
              (i)  

            	
              The
      definition of “Maturity Date” is amended and restated in its entirety as
      follows:

            

    

    

    
      	
               
      

            	
              ““Maturity
      Date” means May 31, 2014.”

            

    

    

    
      	
              (ii)  

            	
              The
      definitions of “Excess Cash Distribution Date” and “Excess Cash Payment”
      are deleted.

            

    

    

    
      	
              (b)  

            	
              Subsection
      2.4(B) is amended and restated in its entirety as
  follows:

            

    

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

    
 

    “(B)  Repayments.  The
outstanding principal amount of the Loans as of May 21, 2010, which is
$3,770,000, shall be repaid by the Borrower on the last Business Day of each
month in the amounts and on the dates as follows:

    

    
      	
              Last Business Day of
      Each Month 

              During the Following
      Periods

            	
              Monthly Principal
      Amount

            
	
              May
      2010 through and including April 2011

            	
              $50,000

            
	 	 
	
              May
      2011 through and including April 2012

            	
              $70,000

            
	 	 
	
              May
      2012 through and including April 2013

            	
              $90,000

            
	 	 
	
              May
      2013 through and including April 2014

            	
              $100,000

            

    

     

    In
addition, the Borrower shall repay the Loans in a principal amount equal to
$50,000 on the Maturity Date and, without limiting the foregoing, the entire
remaining outstanding principal balance of the Loans shall be paid in full no
later than the Maturity Date.

    

    
      	
              (c)  

            	
              Subsection
      5.1(A) is amended and restated in its entirety as
  follows:

            

    

    

    “(A)    Year-End
Financials.  As soon as available, and in any event not later
than ninety (90) days after the end of each Fiscal Year (but in respect of the
Fiscal Year ended December 31, 2009, no later than September 30, 2010), Borrower
will deliver:  (1) the consolidated and consolidating balance
sheets of the Borrower and its Subsidiaries as at the end of such year and the
related consolidated and consolidating statements of income and cash flows for
such Fiscal Year; and (2) a report with respect to the consolidated
financial statements from a firm of independent certified public accountants
selected by Borrower acceptable to Lender, which report shall be unqualified and
shall state that (a) such consolidated financial statements present fairly the
consolidated financial position of the Borrower and its Subsidiaries as at the
dates indicated and the results of their operations and cash flows for the
periods indicated in conformity with GAAP and (b) the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards.”

    

    
      	
              (d)  

            	
              Subsection
      5.3 is amended and restated in its entirety as
  follows:

            

    

    

    “5.3    Inspection.  Borrower
shall permit Lender and any authorized representatives designated by Lender (at
Borrower’s sole cost and expense) to visit, inspect and make or cause to be made
audits of any of the properties of Borrower or any of its Subsidiaries,
including their financial and accounting records, and in conjunction with such
inspection, to make copies and take extracts therefrom, and to discuss their
affairs, finances and business with their officers and independent public
accountants, during normal business hours, at least once per calendar quarter
and at such other times as often as may be reasonably requested by Lender, provided, that,
unless an Event of Default shall have occurred and be continuing, Lender shall
notify Borrower not later than the Business Day preceding the date of any such
visit, inspection or audit.”

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    
 

    
      	
              (e)  

            	
              New
      Subsection 5.16 is inserted after Subsection 5.15 as
    follows:

            

    

    

    “5.16    Weekly Cash Flow
Projections.  Borrower shall deliver to Lender on the first Business
Day of each week a cash flow projection for such week, substantially in the form
of Exhibit B hereto (and otherwise in form and substance acceptable to the
Lender in its sole discretion), certified as true and correct by the chief
financial officer of the Borrower.”

    

    
      	
              (f)  

            	
              Subsection
      6.5 is amended and restated in its entirety as
  follows:

            

    

    

    “6.5    Restricted Junior
Payments.  Directly or indirectly, declare, order, pay, make or
set apart any sum for any Restricted Junior Payment.”

    

    
      	
              (g)  

            	
              Subsection
      7.1(C) is amended and restated in its entirety as
  follows:

            

    

    

    “(C)           Breach of Certain
Provisions.  Failure of any Loan Party to perform or comply with any
term or condition contained in subsections 5.1, 5.3, 5.4, 5.5, 5.6(A), 5.12,
5.14 or 5.16 or Section 6; or”

    

    
      	
              (h)  

            	
              Subsection
      7.1(F) is amended and restated in its entirety as
  follows:

            

    

    

    (F)    Change in Control; Change in
Management.  (i)  RVEP ceases to own and control
directly 100% of the capital stock of the Borrower, or Rio Vista GP, LLC ceases
to be the sole general partner of RVEP, or POC ceases to own and control
directly or indirectly, at least 50% of the membership interests of Rio Vista
GP, LLC; provided that, RVEP, the Borrower and their Affiliates are free to
explore change in control transactions and Lender shall use reasonable efforts
to cooperate with such efforts of RVEP and the Borrower (at the sole cost and
expense of the Borrower) so long as such transaction contemplates that the Loans
will be repaid in full and all other Obligations will be repaid and satisfied in
full as a condition precedent to the closing of such transaction;
or

    

    (ii)  Any of Daniel Matthews,
LaDonna Webber, Sean Daily, Diane Lenehan, James Cummings, Jr., or Joseph B
Siltz shall cease for any reason whatsoever, including without limitation, death
or disability (as such disability shall be determined in the sole and absolute
judgment of the Lender) to be, and continuously perform the duties of, Vice
President and General Manager, Sales and Marketing Manager, Terminal Manager,
Controller, Safety Manager, or Transportation Manager, respectively, of the
Borrower or, if such cessation shall occur as a result of death or such
disability, no successor satisfactory to the Lender, in its reasonable
discretion, shall have become and shall have commenced to perform the duties of
Vice President and General Manager, Sales and Marketing Manager, Terminal
Manager, Controller, Safety Manager, or Transportation Manager, as applicable,
of the Borrower within thirty (30) days after such cessation, provided, however,
that if any satisfactory successor shall have been so elected and shall have
commenced performance of such duties within such period, the name of such
successor or successors shall be deemed to have been inserted in place of the
applicable person in this clause (ii); or”

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    
 

    
      	
              (i)  

            	
              New
      Exhibit B to the Loan Agreement is inserted after Exhibit A to the Loan
      Agreement, in the form attached hereto as Exhibit
  B.

            

    

    

    Section
2.    Effectiveness.

    

    This Seventh Amendment shall become
effective on the date (the “Effective Date”) on which Lender shall have
received:

    

    (a)           this
Seventh Amendment duly executed by the Borrower and the Lender;

    

    (b)           a
Consent, duly executed by RVEP, substantially in the form of Exhibit A
hereto;

    

    (c)           an
amendment to the Mortgage, Deed of Trust and Security Agreement dated as of July
26, 2007 (as amended, supplemented or otherwise modified from time to time) duly
executed and delivered by Regional, in form and substance acceptable to Lender
in its sole discretion, and recorded in the appropriate recording
office;

    

    (d)           an
endorsement (in form and substance acceptable to the Lender in its sole
discretion) to the title policy issued to the Lender in connection with the
Mortgage;

    

    (e)           (i)           payment
of all of Lender’s out of pocket costs and expenses; and

    

    (ii)           payment
to the Lender of all accrued and unpaid interest and fees owing under the Loan
Agreement immediately prior to giving effect to this Seventh
Amendment;

    

    (f)           the
consolidated and consolidating balance sheets and statements of income and cash
flows of the Borrower and its Subsidiaries as at the end of and for the month
ended March 31, 2010, in reasonable detail and certified by the chief financial
officer (or other officer acceptable to Lender in its sole discretion) of the
Borrower to the effect that such information is true and complete and fairly
presents the results of operations and financial condition (in accordance with
GAAP) of the Borrower and its Subsidiaries as at and for the month ended March
31, 2010;

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    
 

    (g)           a
calculation of Net Worth of the Borrower as of April 28, 2010, with supporting
written detail in form and substance acceptable to Lender in its sole
discretion, showing Net Worth plus Subordinated Debt of the Borrower as of such
date (on a consolidated basis) of not less than $2,600,000, certified as true
and correct by the chief financial officer of the Borrower;

    

    (h)           a
cash flow projection for the period from the date hereof through and including
the date that is five Business Days after the date hereof, substantially in the
form of Exhibit B hereto (and otherwise in form and substance acceptable to the
Lender in its sole discretion), certified as true and correct by the chief
financial officer of the Borrower;

    

    (i)           an
opinion of counsel to the Borrower and RVEP in form and substance acceptable to
the Lender in its sole discretion; and

    

    (j)           such
corporate, partnership or other authorization documents of RVEP and the
Borrower, as required by Lender.

    

    Section
6.    Effect of Amendment;
Ratification; Representations; etc.

    

    (a)           On
and after the date hereof, when counterparts of this Seventh Amendment shall
have been executed by all parties hereto,  this Seventh Amendment shall be
a part of the Loan Agreement,  all references to the Loan Agreement in the
Loan Agreement and the other Loan Documents shall be deemed to refer to the Loan
Agreement as amended by this Seventh Amendment, and the term “this Agreement”,
and the words “hereof”, “herein”, “hereunder” and words of similar import, as
used in the Loan Agreement, shall mean the Loan Agreement as amended
hereby.

    

    (b)           Except
as expressly set forth herein, this Seventh Amendment shall not constitute an
amendment, waiver or consent with respect to any provision of the Loan
Agreement, as amended hereby, and the Loan Agreement, as amended hereby, is
hereby ratified, approved and confirmed in all respects.

    

    (c)           In
order to induce Lender to enter into this Seventh Amendment, the Borrower
represents and warrants to Lender that before and after giving effect to the
execution and delivery of this Seventh Amendment:

    

    
      	
               
      

            	
              (i)

            	
              the
      representations and warranties of the Borrower set forth in the Loan
      Agreement and in the other Loan Documents are true and correct as if made
      on the date hereof; and

            
	 	 	 
	 	      
              (ii)

            	      
              no
      Default or Event of Default has occurred and is
      continuing.

            

    

    

    (d)           The
Borrower hereby represents and warrants to Lender that:

    

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    (i)           as
of the date hereof, the principal amount outstanding of the Loan is
$3,770,000;

    

    (ii)           interest
and fees have accrued thereon as provided in the Loan Agreement;
and

    

    (iii)           the
obligation of the Borrower to repay the Loan and the other Obligations, together
with all interest and fees accrued thereon, is absolute and unconditional, and
there exists no right of set off or recoupment, counterclaim or defense of any
nature whatsoever to the payment of the Obligations.

    

    (e)           The
Borrower hereby agrees and acknowledges that in accordance with Section 1(g) of
the Third Amendment to Loan Agreement dated as of January 27, 2009 between the
Borrower and the Lender, notwithstanding anything to the contrary contained in
the Loan Agreement or any of the other Loan Documents, no Loans shall be LIBOR
Loans and Loans shall not be converted into LIBOR Loans under any
circumstances.

    

    (f)           This
Seventh Amendment is a Loan Document.

    

    Section 7.     Release; Covenant not to
Sue.

    

    (a)EACH OF THE BORROWER AND RVEP (IN
ITS OWN RIGHT AND ON BEHALF OF ITS OFFICERS, EMPLOYEES, INDEPENDENT CONTRACTORS,
ATTORNEYS AND AGENTS) HEREBY REPRESENTS, ACKNOWLEDGES AND AGREES THAT IT DOES
NOT HAVE ANY DEFENSES, COUNTERCLAIMS, OFFSETS, CROSS-COMPLAINTS, CLAIMS OR
DEMANDS OF ANY KIND OR NATURE WHATSOEVER INCLUDING, WITHOUT LIMITATION, ANY SUCH
DEFENSES, COUNTERCLAIMS, OFFSETS, CROSS-COMPLAINTS, CLAIMS OR DEMANDS THAT CAN
BE ASSERTED (I) TO REDUCE OR ELIMINATE ALL OR ANY PART OF THE OBLIGATIONS OR
(II) TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM THE LENDER
OR ANY OF ITS PREDECESSORS, SUCCESSORS AND ASSIGNS, OFFICERS, EMPLOYEES,
INDEPENDENT CONTRACTORS, ATTORNEYS AND AGENTS (COLLECTIVELY WITH THE LENDER, THE
“RELEASED PARTIES”).  EACH OF THE BORROWER AND RVEP HEREBY
UNCONDITIONALLY AND IRREVOCABLY, VOLUNTARILY AND KNOWINGLY WAIVES, REMISES,
ACQUITS,  AND FULLY AND FOREVER RELEASES AND DISCHARGES THE RELEASED
PARTIES FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES,
COSTS, OR EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR
UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT
LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS
SEVENTH AMENDMENT IS EXECUTED, WHICH THE BORROWER OR RVEP MAY NOW OR HEREAFTER
HAVE AGAINST ANY OF THE RELEASED PARTIES (COLLECTIVELY, THE “RELEASED CLAIMS”)
AND IRRESPECTIVE OF WHETHER ANY SUCH RELEASED CLAIMS ARISE OUT OF CONTRACT,
TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, INCLUDING, WITHOUT
LIMITATION, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE LOAN AGREEMENT OR
OTHER LOAN DOCUMENTS, AND NEGOTIATION AND EXECUTION OF THIS SEVENTH
AMENDMENT.

    

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    (b)           EACH
OF THE BORROWER AND RVEP AGREES NEVER TO COMMENCE, VOLUNTARILY AID IN ANY WAY,
FOMENT, PROSECUTE OR CAUSE TO BE COMMENCED OR PROSECUTED AGAINST ANY OF THE
RELEASED PARTIES ANY ACTION OR OTHER PROCEEDING BASED UPON ANY OF THE RELEASED
CLAIMS WHICH MAY HAVE ARISEN AT ANY TIME ON OR PRIOR TO THE DATE OF THIS SEVENTH
AMENDMENT AND WERE IN ANY MANNER RELATED TO ANY OF THE LOAN
DOCUMENTS.

    

    Section 8.    New York
Law.

    

    This Seventh Amendment shall be
construed in accordance with and governed by the laws of the State of New York,
without regard to New York conflicts of laws principles.

    

    Section 9.    Severability.

    

    If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible, and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.

    

    Section 10.    Counterparts.

    

    This Seventh Amendment may be executed
by the parties hereto individually or in any combination, in one or more
counterparts, each of which shall be an original and all of which shall together
constitute one and the same agreement.  Signatures of the parties may
appear on separate counterparts.

     

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

     

    IN WITNESS WHEREOF, the parties hereto
have caused this Seventh Amendment to be duly executed as of the day and year
first above written.

    

    
      	
              REGIONAL
      ENTERPRISES, INC.

               

               

              By:___________________

              Name:
      Ian Bothwell

              Title:

               

            	
              RZB
      FINANCE LLC

               

               

              By:___________________

              Name:

              Title:

               

              By:           ___________________

              Name:

              Title:

            
	 
      	 
      

    

    

    
      
         

      

      
        -8-

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