--------------------------------------------------------------------------------

Exhibit 10.10
 
Form of
“LPG TRANSPORTATION AGREEMENT”
 
This LPG Transportation Agreement (“Agreement”), is made and entered into this
___ day of _________ 2006 (the “Effective Date”), by and between Rio Vista
Operating Partnership, L.P., a Delaware limited partnership (“Rio”) and Penn
Octane International, LLC, a Delaware limited liability company
(“International”) (collectively “Carrier”), and TransMontaigne Product Services
Inc., a Delaware corporation (“Shipper”). Carrier and Shipper are sometimes
hereinafter referred to individually as a “Party” and collectively as the
“Parties”.
 
RECITALS:
 
A.    Carrier owns the Carrier System as defined below. Carrier and Shipper
entered into a Purchase and Sale Agreement, dated August 15, 2005, as amended
and restated on August 15, 2006 (“Purchase Agreement”), pursuant to which
Shipper purchased certain Brownsville Terminal Assets (as defined in the
Purchase Agreement).
 
B.     Shipper requires Carrier to ship LPG from the Brownsville Terminal Site
to the Mexican Terminal Site using the Carrier System and have Carrier cause its
wholly owned subsidiaries, Termatsal S. de R.L. de C.V. (“Termatsal”), and Penn
Octane de Mexico, S. de R.L. de C.V. (“POM”) and its affiliate, Tergas, S. de
R.L. de C.V. (“Tergas”), of which each Termatsal, POM and Tergas are limited
liability companies duly incorporated and existing under the laws of Mexico all
of which Carrier controls, to transport on the Mexican portion of the Carrier
System and deliver the LPG to designated customers of Shipper or PMI at the
Mexican Terminal Site.
 
C.     This Agreement, being a condition to the closing pursuant to the Purchase
Agreement, requires that Carrier will provide LPG transportation and delivery
services to Shipper pursuant to the terms and conditions of this Agreement.
 
NOW, THEREFORE, in consideration of the undertakings of each Party to the other
Party contained in this Agreement, the Parties agree as follows:
 
ARTICLE 1
 
DEFINITIONS AND INTERPRETATION

1.1   Definitions.  In this Agreement, including the schedules attached hereto,
the following terms shall have the meanings assigned to them below:
 
 
“Additional Rate” has the meaning given in Section 3.1.
 
“Affiliate” means, in reference to a Person, any other Person which directly or
indirectly controls or is controlled by the first Person or is directly or
indirectly controlled by a Person which also directly or indirectly controls the
first Person, excepting from the foregoing TransMontaigne Partners L.P. or any
of its affiliates. For the purposes of this definition, a Person shall be deemed
to control another Person if the first Person controls the other Person in fact,
whether by ownership of shares of a corporation, by contract, by being the sole
general partner of a limited partnership or otherwise.

--------------------------------------------------------------------------------

 
“Applicable Laws” means all laws and statutes (including regulations enacted
thereunder), judgments and orders of courts of competent jurisdiction,
regulations and orders issued by Governmental Authorities applicable to (i) the
ownership, operation, maintenance, improvement, and use of the Carrier System
and (ii) the Parties’ performance of their respective obligations hereunder.
 
“Arbitration Notice” has the meaning indicated in Section 9.5.
 
"ASTM" shall mean the American Society for Testing and Materials.
 
“Brownsville Terminal Site” means the plot of land, and associated equipment and
improvements, which is leased by Shipper from the Brownsville Navigation
District, where LPG is stored and is located on Brownsville Navigation District
Lease No. 2823, dated October 5, 1993, as amended.
 
“Carrier” is defined in the preamble of this Agreement.
 
“Carrier System” means Carrier’s Owned Pipelines and the Mexican Terminal Site,
as such pipelines and terminal facilities exist on the Service Commencement
Date.
 
“Contract Year” means a twelve (12) Month period commencing on and including the
Service Commencement Date and each consecutive twelve (12) Month period
thereafter, for the Term of this Agreement.
 
“Compliance Procedures” has the meaning given in Section 4.3.1.
 
“Day” means the twenty-four (24) hour period (as adjusted for daylight savings
time) commencing at 12:00 a.m., local time, on one calendar day, and ending at
12:00 a.m., local time, on the next calendar day.
 
“Delivery Point” means the outlet flange of the loading racks located in the
Mexican Terminal Site at which Carrier will cause Tergas to make redeliveries of
LPG, for the account of Shipper, to the customer designees of PMI or other
designees of Shipper.
 
“Dispute” has the meaning indicated in Section 9.1.

“Dispute Notice” has the meaning indicated in Section 9.2.
 
“Environmental Laws” means any Applicable Law or Order relating to protection of
the environment, including, persons or the public welfare from actual or
potential exposure (or the effects of exposure) to any actual or potential
Release or regarding the manufacture, processing, production, gathering,
transportation, generation, use, treatment, or storage of any Hazardous
Materials.

--------------------------------------------------------------------------------

“Effective Date” is defined in the preamble of this Agreement.
 
“FERC” means the Federal Energy Regulatory Commission.
 
“Force Majeure Event” is defined in Section 6.11.

"Gallon(s)" shall mean one (1) U.S. standard gallon of two hundred and thirty
one (231) cubic inches at sixty degrees Fahrenheit (60F).

“Good Industry Practice” means the practices and methods, normally employed by a
prudent operator of a petroleum products pipeline in the U.S. as well as in
accordance with (i) applicable American Petroleum Institute (API) standards;
(ii) applicable U.S. Department of Transportation (“DOT”) rules and regulations,
including DOT Part 195; and ASME Code B.31.4. Consistent with the foregoing,
Good Industry Practice shall include compliance with Applicable Laws and the
easements and other property rights related to the Carrier System, as well as
practices recommended by Governmental Authorities having jurisdiction over the
Carrier System or by relevant industry advisory bodies or organizations.

“Governmental Authority” means any court, tribunal, arbitrator, authority,
agency, commission, official, or other instrumentality of the United States,
Mexico, or any state or political subdivision thereof, and including any
governmental, quasi-governmental, or non-governmental body administering,
regulating, or having jurisdiction over the transportation of LPG and other
petrochemical products, including, without limitation, the FERC.

"GPA" shall mean the Gas Processors Association.

“Hazardous Materials” means any substance, whether solid, liquid, gaseous, or
any combination of the foregoing or any other substance not expressly mentioned
herein: (a) that is listed, defined, or regulated as a “hazardous material,”
“hazardous waste,” “solid waste,” “hazardous substance,” “toxic substance,”
“contaminant,” or “pollutant” or otherwise classified as hazardous or toxic, in
or pursuant to any Environmental Laws or otherwise prohibited, limited or
regulated under any Environmental Laws; (b) that is or contains asbestos,
polychlorinated biphenyls, radon, urea formaldehyde foam insulation, or
explosive or radioactive materials, and (c) that is or contains petroleum
hydrocarbons, petroleum products, natural gas, crude oil, or any components,
fractions, or derivatives thereof.
 
“Inspector” means an independent inspector that will be appointed by the mutual
agreement between Shipper, PMI and Carrier.
 
“LPG” means the liquefied petroleum gas product conforming to the
Specifications.

--------------------------------------------------------------------------------

 
“LPG Variance” has the meaning provided in Section 6.5.
 
“Mediation Notice” has the meaning indicated in Section 9.4.
 
“Mexican Terminal Site” means the plot of land and associated equipment, LPG
tankage and improvements owned by Tergas, where the LPG or other petroleum
products are stored, which is located at Carretera Sendero Nacional Km. 9,
desviacion Carretera La Risita-Lucio Blanco Km. 3.4 desviacion brecha 22 s/n (a
500 metros), Ejido La Gloria, C.P. 87560, Matamoros, Tamaulipas, Mexico.
 
“Month” means the period beginning with 12:00 a.m., local time, on the first Day
of each calendar month and ending at 12:00 a.m., local time, on the first
calendar Day of the next month.

“Order” means any order, judgment, injunction, ruling, or decree of any U.S.
court or other Governmental Authority.

“Owned Pipelines” means the approximately 23-mile 6-inch and 8-inch pipelines
and associated equipment and improvements connecting the Brownsville Terminal
Site to the Mexican Terminal Site
 
“Parties” and “Party” are defined in the preamble of this Agreement.
 
“Person” means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or other business entity, or a government or any political
subdivision or agency thereof.

"PGPB" shall mean Pemex-Gas y Petroquimica Basica.
 
“PMI” means P.M.I. Trading Limited, a corporation organized under the Laws of
Ireland, having the administration of its business and place of address in
Mexico City, Mexico.
 
“PMI Contract” means the Matamoros LPG Mix Purchase and Sales Agreement, dated
April 28, 2006, by and between Rio and PMI, for the purchase of LPG for the
period through March 31, 2007.
 
“Purchase Agreement” has the meaning given in the Recitals.
 
“Receipt Point” means the point at which LPG will be received by Carrier from or
for the account of Shipper hereunder, which point shall be defined as the outlet
flange which connects Shipper’s Brownsville Terminal Site with the Carrier’s
System.

“Release” means any releasing, depositing, spilling, leaking, pumping, pouring,
placing, emitting, discarding, abandoning, emptying, discharging, migrating,
injecting, escaping, leaching, dumping or disposing.

--------------------------------------------------------------------------------

“Service Commencement Date” is defined in Section 2.2.
 
“Specifications” means the specifications for LPG set out in Section 5.1 of this
Agreement.

“Tergas” has the meaning given in the Recitals.
 
“Termatsal” has the meaning given in the Recitals.
 
“Term” has the meaning given in Section 2.1.
 
“Transportation Rate” means: (i) the rate set forth in Section 3.1, (ii) a rate
mandated by Applicable Law with respect to transportation within the United
States, or (iii) any other rates agreed to in writing by the Parties.
 
1.2   Severability.  If any Article, Section, subsection or other provision of
this Agreement is deemed to be or becomes void, illegal, invalid or
unenforceable, then, to the extent of such voidability, illegality, invalidity
or unenforceability, such provision or part thereof shall be considered
ineffective and separate and severable from the balance of this Agreement and
such provision shall not invalidate, affect or impair the remaining provisions
of this Agreement and any such void, illegal, invalid, or unenforceable
provision or part thereof shall be replaced with a mutually agreed new provision
which will allow the Parties to restore the economic equilibrium of the Parties
as agreed in the prior arrangement in a legally valid and effective manner;
provided, however, that a Party may terminate this Agreement if that Party
suffers material detriment as a result of such voidance, illegality, invalidity
or unenforceability and the Parties have not been able to mutually agree on
alternate or substitute contractual provisions to address said material
detriment and restore economic equilibrium by not later than ninety (90) days
after the effective date of such event.
 
1.3   Interpretation of this Agreement.  In interpreting this Agreement, the
following rules of construction shall be followed:
 
1.3.1  the headings of Articles and Sections are for convenience only and shall
not be taken into account in the interpretation of this Agreement;
 
1.3.2  unless otherwise specified, a reference to an Article, Section,
Subsection or Paragraph is a reference to an article, section, subsection or
paragraph of this Agreement;
 
1.3.3  words importing the singular include the plural and vice versa; words
importing the masculine gender include the feminine and vice versa;
 
1.3.4  “herein,” “hereto,” “hereof,” and similar expressions refer to this
Agreement; and
 
1.3.5  “include,” “including,” “included,” and similar expressions shall be
interpreted as if such expressions were followed with the phrase “without
limitation.”
 

--------------------------------------------------------------------------------

 
ARTICLE 2
 
TERM AND TERMINATION

2.1   Term.  The term of this Agreement shall, unless terminated under the
provisions of Section 1.2., commence on the Effective Date and remain in full
force and effect for the term of the PMI Contract, as extended from time to time
thereafter.

2.2   Service Commencement Date.  Carrier shall be required to commence
performance under this Agreement with respect to the receipt, transportation and
terminal delivery of Shipper’s LPG as soon as commercially practicable after the
Effective Date.
 
ARTICLE 3

TRANSPORTATION RATE AND REGULATION

3.1   Transportation Rate. 

3.1.1    Shipper shall pay Carrier the rate described in Exhibit “A” for
movements of Shipper’s LPG from the Receipt Point through the Delivery Point,
which rate shall be inclusive of all fees for transportation, truck weighing,
mercaptan injection, testing and inventory control (the “Transportation Rate”).

3.1.2    To the extent that Carrier (i) is requested to carry LPG volumes in
excess of the King Ranch Plant production (ii) has to construct any additional
facilities or (iii) is requested to perform services which are in addition to
the services being performed and compensated for under the Transportation Rate,
then the Parties will mutually agree upon a rate per Gallon to be charged by
Carrier (the “Additional Rate”). If the Parties cannot reach an agreement with
respect to the Additional Rate, then the matter shall be resolved pursuant to
the procedures set out in Article 9 herein.

3.2   Delivery Expense Reimbursement. 
 
3.2.1    Shipper acknowledges that Carrier and its Affiliates will incur certain
expenses in providing services to PMI or PGPB, which expenses include telephone,
telefax, cleaning and secretarial services. The Parties agree that such expenses
are not intended to be borne by Carrier or its Affiliates, as their expense,
under the Transportation Rate. Therefore, Shipper agrees to pay Carrier the
additional amount of $2,500.00 per month during the Term of this Agreement to
cover such services and expenses, as reimbursed to Shipper by PMI. Any
extraordinary services and expenses will be mutually agreed upon by the Parties
beforehand.
 
3.2.2    For the Term of this Agreement and subject to his continued employment
by Carrier, Shipper shall pay Carrier the additional amount of $7,500 per month
for the services provided by Vicente Soriano for the mutual benefit of both
Parties.

--------------------------------------------------------------------------------

3.3   Regulation.  The Parties recognize that the interstate or foreign
transportation of LPG on the portion of Carrier’s System located in the United
States is subject to the Interstate Commerce Act and common carrier regulation
by the FERC or any successor regulatory agency having jurisdiction. Carrier
shall comply with all Applicable Laws respecting the provision of service by
Carrier hereunder. The Parties agree to exercise their commercially reasonable
efforts with all due diligence to support the justness and reasonableness, and
continuance, without alteration, of the Transportation Rate specified herein and
all other service terms and provisions of this Agreement, in any and all
proceedings before any Governmental Authority in which any such provisions are
subject to regulatory review.
 
ARTICLE 4

TRANSPORTATION QUANTITY; DELIVERY; RECEIPT

4.1   Transportation Quantity.  Subject to the terms of this Agreement, (a)
Carrier shall accept at the Receipt Point, transport, store and redeliver at the
Delivery Point LPG owned or controlled by Shipper and (b) the LPG tendered shall
be accepted and redelivered by Carrier at the times and in quantities as
directed from time to time by Shipper or Shipper’s designee in accordance with
this Agreement. Shipper acknowledges the Carrier System is a flowing system with
limited storage capacity of not more than 48 hours.
 
4.2   Product Dedication.  Shipper commits to exclusively transport on the
Carrier System, pursuant to the terms of this Agreement, all quantities of LPG
which it owns or controls and which Shipper or its Affiliates (including
TransMontaigne Partners L.P.) is required to deliver to the Delivery Point
pursuant to the PMI Contract or to north eastern Mexico including, without
limitation, the geographic region served by the Pipeline Assets or the Matamoros
Terminal Site; provided, however, that neither Party shall be obligated by the
foregoing to either build or pay for any additional facilities that are required
to connect LPG sources or markets to Carrier’s System not connected thereto as
of the Service Commencement Date nor increase the throughput capacity of the
Carrier System. Should Shipper obtain a payment, penalty payment, or “take or
pay” payment from PMI related to the PMI’s failure purchase the contractually
required amount of LPG from Shipper, then any such payment recovered by Shipper
shall be divided between Shipper and Carrier as both Parties shall mutually
agree in good faith. If the Parties cannot agree upon a mutually acceptable
division of such payment, then the matter shall be resolved pursuant to the
procedures set out in Article 9 herein.
 
4.3   Product Quantity Inspection.  The Inspector shall determine the quantity
of LPG to be delivered at the Delivery Point as provided in this Section and his
findings shall be binding in the absence of fraud, bad faith or gross error.

4.3.1.  Each empty tank truck shall be weighed on the platform scale at the
Delivery Point, or an alternative independent platform scale mutually acceptable
to the Parties. Once LPG is completely loaded onto the tank trucks, such tank
truck will be weighed at the same platform scale upon its departure. The weight
obtained by the differential between these two measurements shall be converted
into volume in Gallons and corrected at 60oF in accordance with the latest
version of the ASTM procedures (“Compliance Procedures”), through the
determination of the specific gravity through a gas chromatograph provided by
Shipper or by the Inspector. The Inspector shall take samples at the Delivery
Point (at the Micromotion measurement device installed at the Delivery Point)
for every 50,000 Gallons received at the Delivery Point. The gas chromatograph
utilized shall be calibrated in accordance with the latest ASTM and GPA
procedures.

--------------------------------------------------------------------------------

4.3.2.  The terminal platform scale at the Delivery Point will be tested and
adjusted for accuracy at least once every sixty (60) Days. Carrier will be
required to comply with the calibration and certification procedures adopted by
Mexican authorities in accordance with Official Standards (NOM-010-SCFI-1994
(1999)). PMI’s representatives and the Inspector may witness the calibration and
certification procedures. Shipper or Carrier shall provide PMI via fax a copy of
the above-mentioned certificates. If the terminal platform scale at the Delivery
Point is used or any claim is received by Shipper from PGPB, Shipper and PMI
reserves the right to execute evaluation procedures on a random basis sending
tank trucks to an independent scale to test the accuracy of such scale and
recover damages from Carrier for any discrepancy found.

4.3.3.  If the terminal platform scale at the Delivery Point is not suitable for
the service due to non-compliance with the above-mentioned Official Standards
and an independent platform scale is used, the Parties will share equally the
cost of weighing the tank trucks before and after loading,

4.3.4.  If at any time the platform scales at the Delivery Point are replaced,
such new scales shall be used to weigh all tank trucks receiving LPG at the
Delivery Point, and shall be operated and maintained in accordance with the
above provisions.

4.3.5.  Until such time as the measuring facilities at the Receipt Point and the
Delivery Point are installed and calibrated pursuant to Section 6.3 and 6.4, for
customs and inventory-management purposes, LPG pumped through Carrier’s System
from the Receipt Point to the Delivery Point shall be measured on a daily basis
at the Micromotion measurement device installed at the Delivery Point. Readings
by such device shall be registered by the Inspector, Mexican authorities, PGPB's
customs broker, PMI's representative and Shipper's or Carrier’s representatives.
A reading of the quantity of LPG pumped will be calculated on the basis of the
differential between the readings taken at 00:00 hrs. and the reading taken the
previous Day at 00:00 hrs., converted to volume in Gallons and corrected at
60oF, through the determination of the specific gravity by samples taken at the
Delivery Point (at the Micromotion measurement device installed at the Delivery
Point) for every 50,000 Gallons received at the Delivery Point through the gas
chromatograph.

4.3.6.  Additionally, for verification and customs purposes, LPG pumped through
Carrier’s System from the Receipt Point to the Delivery Point shall be measured
on a weekly basis every Monday at the Micromotion measurement device installed
at the Delivery Point. Readings by such device shall be witnessed by the
Inspector, Mexican authorities, PGPB's customs broker, PMI's representative and
Shipper's or Carrier’s representatives. A reading of the quantity of LPG pumped
will be calculated on the basis of the differential between the current reading
and the reading taken the previous Monday at the same time converted to volume
in Gallons and corrected at 60oF, through the determination of the specific
gravity by samples taken at the Delivery Point (at the Micromotion measurement
device installed at the Delivery Point) for every 50,000 Gallons received at the
Delivery Point during the immediate preceding five (5) Days through the gas
chromatograph. The Inspector shall take line samples and shall test the batch
pumped at the time of the readings.

--------------------------------------------------------------------------------

4.3.7.  Carrier and Shipper shall not and will not be required to verify or
monitor the (i) qualifications or competence of any drivers of any tank trucks
receiving LPG at the Delivery Point or (ii) the qualification or condition of
any tank trucks receiving LPG at the Delivery Point. Both Parties acknowledge
that it is the responsibility of PMI to verify that all its designees who accept
delivery of LPG at the Delivery Point shall be fully in conformance with all
Mexican laws and regulations and that Carrier shall not be required to provide
this service.
 
ARTICLE 5
 
QUALITY SPECIFICATIONS

5.1   Receipt Point Specifications.  All LPG delivered by Shipper at the Receipt
Point and all LPG delivered by Carrier at the Delivery Point must meet the
quality specifications required for delivery of LPG to PMI under the terms of
the PMI Contract (“Specifications”).

5.2   Enforcement of Specifications.  No LPG will be delivered by Shipper at the
Receipt Point for transportation hereunder unless its kind and quality meets the
applicable Specifications. Shipper shall be required, at Carrier’s reasonable
request, to furnish Carrier with certified laboratory results that show that the
composition of the LPG to be transported in Carrier’s System meets the
Specifications. Carrier reserves the right to sample or test any such shipment
prior to acceptance or during receipt and, in the event of a variance between
Shipper’s certificate and the results of Carrier’s test, the latter shall
prevail. All costs associated with Carrier’s testing shall be for the account of
Carrier.

5.3   Product Quality Inspection.  All LPG shall be monitored to ensure
compliance with the Specifications. Determination of quality shall follow the
procedures set forth in the Compliance Procedures. A sample of LPG will be drawn
in accordance with the Compliance Procedures prior to delivery. A gas
chromatography analysis shall be performed by Carrier on the sample in
accordance with the ASTM D-2163 method to assess the sample’s compliance with
the Specifications. The gas chromatograph utilized shall be calibrated in
accordance with the latest ASTM and GPA procedures.
 

--------------------------------------------------------------------------------

ARTICLE 6
 
OPERATIONAL MATTERS
 
6.1   Deliveries.  Shipper shall furnish a written nomination to Carrier at
least ten (10) days prior to the Month in which Shipper desires transportation
and terminal services hereunder, which date can be amended at any time by
Shipper or its designee. Such written nomination shall specify the quantity of
the LPG.
 
6.2   Minimum Injection Rate at Receipt Point.  Shipper shall deliver the LPG
for transportation at an injection rate necessary to maintain Carrier’s normal
operating pressures of no less than 300 psi.
 
6.3   Receipt Measurement Facilities.  Shipper shall install, at its sole cost
and expense, a custody control flow meter at the Receipt Point, and, at its
option, at the inlet flange at the Mexican Terminal Site, which meters, absent
fraud or manifest error, will measure the volume of LPG that is injected into
Carrier’s System or delivered to the inlet flange at the Mexican Terminal Site.
 
6.4   Measurement.
 
6.4.1    General
 
A.   Unit of Measurement:  The unit of measurement of the LPG stream shall be a
Gallon.
 
B.    Delivery Pressure:  The measurement station located at the Receipt Point
shall be capable of measuring the volume of LPG delivered hereunder at pressures
up to 500 psi or at such other pressure(s) as the Parties may mutually agree.
 
C.    Flow Metering:  Each measurement station shall be operated, tested, and
maintained and the mass of hydrocarbon streams calculated in accordance with
standard industry practices.
 
D.   Receipt Point:  Receipt of LPG shall be at Shipper’s meter station at the
Receipt Point.
 
E.    Flow Meter Calibration:  All calibrations, adjustments, and calculations
shall be adjusted to Standard Conditions. Standard Conditions shall mean 60
degrees Fahrenheit and 14.696 psia. All flow measurement will be made utilizing
temperature and pressure at flowing line conditions.
 
F.    Check Meters:  Carrier, or its representative, may at its option and
expense, install and maintain check measurement equipment which shall not
interfere with the use of Shipper’s measurement equipment at the Receipt Point.
 
G.    Access to Equipment:  Carrier, or its representative, shall have access at
all reasonable times to the equipment of Shipper’s measurement station, but the
calibrating and adjusting thereof shall be done solely by the employees, agents,
representatives or designees of Shipper. Similarly, Shipper shall have access at
all reasonable times to the equipment of Carrier’s check meter measurement
stations, but the calibrating and adjusting thereof shall be done solely by the
employees, agents or representatives or designees of Carrier.
 

--------------------------------------------------------------------------------

H.   Meter Ticket:  A meter ticket will be generated for the Receipt Point each
Day and a copy will be promptly provided to Carrier. The billing period is from
00:00 hours on the first Day of each Month to 00:00 hours on the first day of
the following Month.
 
I.    Review of Measurement Data:  Shipper’s and Carrier’s personnel shall
exchange measurement data on a timely basis in order to detect measurement
discrepancies as they arise. In the event that Shipper’s and Carrier’s
measurement differ more than one (1.0%) percent for two (2) or more Days in
succession, both metering facilities will be examined and calibrated to
determine whether or not either or both metering facilities are conforming to
good measurement practice and/or operation.
 
J.     Flow Meter Calibration Frequency:  On a scheduled Day of each Month, or
at other mutually agreeable intervals, Shipper or Shipper’s designee shall test
and verify the accuracy of its measurement equipment in accordance with the
appropriate industry standards. Shipper or its designee shall give Carrier
notice of the date and time of each test sufficiently in advance (but no less
than 48 hours in advance) to permit Carrier to have a representative present to
witness such test result. The calibration records of Shipper’s or Carrier’s
measurement equipment shall be made available for review by either Party.
 
K    Certification of Test Equipment:  The certification and calibration records
of either Party’s applicable test equipment shall be maintained and made
available for review by the other Party.
 
L.    Special Tests:  Either Party may request a special test of any measurement
equipment of the other Party at its sole cost and expense. In such event, the
Parties shall cooperate to secure prompt verification of accuracy of said
equipment.
 
6.4.2    Meter Calibration
 
A.   Meter Calibrations:  The meter instrumentation and chart recorders (if
applicable) shall be calibrated and inspected at the beginning of the delivery
of the LPG at a minimum of every ninety (90) days thereafter. Necessary repairs
to or replacement of the metering equipment shall be made when the equipment
does not meet the required standards provided in the latest addition of the
appropriate industry manual.
 
B.    Errors less than 0.25%:  If the meter calibration deviates less than or
equal to + 0.25% from one scheduled calibration to the next, the effective date
of the new factor shall be the date of the calibration and shall remain in
effect until the next calibration.
 

--------------------------------------------------------------------------------

C.    Errors equal to or more than 0.25% and less than 0.50%:  If the meter
calibration deviation is equal to or more than + 0.25%, but less than + 0.50%,
then the effective date of the factor shall be the date on which an event
occurred which is known to have changed the factor, or if such date is not
known, then the effective date is determined as defined in Section 6.4.3.
 
D.   Errors equal to or more than 0.50%:  Any deviation equal to or greater than
+0.50% is not acceptable, and immediate steps shall be taken to effect the
required maintenance or repairs.
 
6.4.3    Volume Corrections
 
If, upon calibration tests, the meter does not meet the applicable requirements,
then any previous recording of such equipment shall be corrected for any period
that is known or agreed upon. In case the period is not known or agreed upon,
such correction shall apply to one-half (½) the total mass measured since the
date of the last calibration. However, this correction shall not exceed sixteen
(16) Days.
 
6.4.4    Correction of Errors
 
Measuring equipment found to be registering inaccurately or out of service shall
be adjusted to read accurately and/or placed in service immediately. For any
error not known or agreed upon for the period in which the meter was inaccurate
or out of service, the volume of the stream shall be estimated by use of any of
the following or other methods which shall be mutually agreed upon by the
Parties:
 
(i)     In the event that only one of the metering facilities is found to have
had a significant defect in performance, the other measuring facility will be
the agreed upon billing basis for that billing period, or
 
(ii)    If it is determined that both of the measuring installations experienced
significant defects in performance, billing for the period in question shall be
based upon such data as Shipper and Carrier shall find mutually acceptable.
 
6.5   Overages and Shortages.  At the end of each Month, Carrier will calculate
and Shipper shall confirm the difference, if any, between the volume of LPG
delivered by Shipper at the Receipt Point and the volume of LPG delivered by
Carrier to Shipper’s designated customer together with the amount of inventory
held at the Matamoros Terminal (the “LPG Variance”). If the LPG Variance results
in a shortage of more than one (1.0%) percent, Carrier will reimburse Shipper
for the shortage of volume outside measurement tolerance in accordance with
Section 6.12 quarterly. If the LPG Variance results in an overage of more than
one (1.0%) percent, then such volume shall be the property of Carrier. These
procedures shall be in addition to, and not in lieu of, any other provisions of
this Agreement requiring Carrier to account to Shipper for all volumes delivered
hereunder, but in no event shall the foregoing procedure result in Carrier
accounting to Shipper more than once for the same volume.
 

--------------------------------------------------------------------------------

6.6   LPG Involved in Litigation.  When any LPG delivered by Shipper to Carrier
for transportation is involved in litigation, disputed ownership or encumbrance
by lien or charge of any kind, Shipper shall so advise Carrier in writing.
Carrier may refuse to accept receipt of such LPG unless Shipper provides an
indemnity bond or other form of financial undertaking to reasonably protect
Carrier against any and all loss associated with such disputed title. Shipper
shall indemnify Carrier against any and all loss or damages suffered by Carrier
associated with such disputed ownership.
 
6.7   Delivery at Destination.  The LPG will be delivered, for the account of
Shipper, to the designated customers of PMI, PGPB, or others.
 
6.8   Scheduling and Special Transit Conditions.  For each Month, Carrier will
establish a sequence for transporting LPG and will schedule the approximate time
when LPG tendered for shipment will be received by Carrier at the Receipt Point
and delivered by Carrier at the Delivery Point. Carrier will inform Shipper of
the time within each Month when the LPG will be received from Shipper at the
Receipt Point. Carrier will also then inform Shipper of the approximate time
within each Month when the LPG will be re-delivered to Shipper’s consignee at
the Delivery Point.
 
6.9   Payment of Transportation and Other Charges.  Transportation charges will
be computed and paid by Shipper at the applicable Transportation Rate on the
quantity of delivered LPG as determined pursuant to Section 6.19. Shipper shall
be responsible for all charges applicable to the particular shipment of LPG.
 
6.10     Liability of Parties.  AS A CONDITION TO CARRIER’S ACCEPTANCE OF LPG
UNDER THIS AGREEMENT, EACH PARTY AGREES TO HOLD HARMLESS, INDEMNIFY AND DEFEND
THE OTHER PARTY AGAINST CLAIMS OR ACTIONS FOR INJURY OR DEATH OF ANY AND ALL
PERSONS AND FOR DAMAGE TO PROPERTY OF THE OTHER PARTY OR ANY THIRD PARTY
RESULTING FROM OR ARISING OUT OF (1) ANY BREACH OF OR FAILURE BY THE PARTY OR
ITS AGENTS, EMPLOYEES OR REPRESENTATIVES TO ADHERE TO ANY PROVISION OF THIS
AGREEMENT; OR (2) THE NEGLIGENT ACT(S) OR FAILURE(S) TO ACT OF THE PARTY OR ITS
AGENTS, EMPLOYEES OR REPRESENTATIVES IN CONNECTION WITH ITS HANDLING OF LPG.
NOTWITHSTANDING THE FOREGOING, (I) CARRIER SHALL NOT INDEMNIFY SHIPPER WITH
RESPECT TO LOSSES ARISING FORM SHIPPER’S ACTS OR OMISSIONS AND (II) SHIPPER
SHALL NOT INDEMNIFY CARRIER WITH RESPECT TO LOSSES ARISING FROM CARRIER ’S ACTS
OR OMISSIONS.
 
6.11     Force Majeure Events.  Neither Party shall be liable hereunder for any
failure to perform its obligations (other than the obligation to pay amounts due
hereunder and to indemnify) or for any loss, damage, or delay caused by acts of
God, war, natural disasters (including, but not limited to, epidemics,
landslides, lightning, earthquakes, fires, storms, or floods), act of the public
enemy, terrorism, quarantine, the authority of law, strikes, lockouts of
employees, explosions, breakage or accident to machinery or pipe, riots, civil
disorder, requisition or necessity of any Governmental Authority, default by the
other Party or its agents, employees or representatives, or, whether similar or
dissimilar to the foregoing, from any cause not reasonably within the control of
the affected Party and which such Party was not able to reasonably anticipate
and avoid (each of the foregoing events or occurrences, a “Force Majeure
Event”). If there is a strike or lockout, the affected Party is not required to
resolve the labor dispute by acceding to the demands of employees if this is
inadvisable in the sole discretion of that Party. A Party claiming a Force
Majeure Event shall be obligated to give prompt written notice of such event to
the other Party and to use reasonable commercial efforts to overcome such Force
Majeure Event as soon as possible. The foregoing shall apply (i) in the case of
Shipper, to any deliverer of Shipper’s LPG before and at the Receipt Point, or
to any receiver thereof at and after the Delivery Point and (ii) in the case of
Carrier, to Shipper with respect to its operation of Brownsville Terminal Site
or to any deliverer of Shipper’s LPG before and at the Receipt Point or to any
receiver thereof at and after the Delivery Point.
 

--------------------------------------------------------------------------------

6.12    Carrier Liability for LPG Losses.  As between the Parties, Carrier
accepts custody, control and responsibility for LPG accepted for shipment
hereunder at the Receipt Point; provided, however, that Carrier shall have no
responsibility or liability with respect to the operation of the Brownsville
Terminal Site operated by Shipper. On a quarterly basis, if there is an LPG loss
for which Carrier is liable, as calculated under Section 6.5, Carrier will
compensate Shipper for such loss in United States currency based upon the price
as defined in the PMI Contract.
 
6.13    Warranty Disclaimer.  Carrier operates solely as a provider of
transportation services and not as an owner, manufacturer or seller of LPG.
EXCEPT AS EXPRESSLY STATED HEREIN, EACH PARTY EXPRESSLY DISCLAIMS ANY LIABILITY
FOR ANY EXPRESSED OR IMPLIED WARRANTY FOR LPG TRANSPORTED HEREUNDER INCLUDING
ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR INTENDED USE.
 
6.14    Limitation of Liability.  NOTWITHSTANDING ANY PROVISIONS OF THIS
AGREEMENT THAT MIGHT OTHERWISE SAY OR SUGGEST THE CONTRARY, NEITHER PARTY SHALL
BE LIABLE TO THE OTHER, OR ITS AGENTS, EMPLOYEES OR REPRESENTATIVES, FOR ANY
SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES
(INCLUDING LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES) BY STATUTE, IN
TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE, OR SIMILAR
DAMAGES, EVEN IF SUCH DAMAGES ARE FORSEEABLE.
 
6.15     Intentionally deleted.
 
6.16    Claims, Time for Filing.  Claims for loss or damage must be made in
writing with Carrier within nine (9) months after delivery of the LPG, or in
case of an alleged failure by Carrier to make delivery, then within one (1) year
after the delivery was scheduled to occur. Where claims for loss or damage are
not timely filed thereon in accordance with this Section 6.16, the claims will
not be paid and Carrier shall have no liability associated directly or
indirectly with the claims. In the event of a dispute, the matter shall be
resolved pursuant to the procedures set out in Article 9 herein.
 
6.17    Transportation Inventory.  Quantities of LPG accepted for transportation
for redelivery to the Delivery Point will constitute Shipper’s transportation
inventory prior to delivery. Line fill will be owned by Carrier. Upon
termination of this Agreement, Carrier will, at its sole cost and expense, push
the LPG line-fill remaining in the Carrier System back up the Carrier System to
Shipper’s facility located behind the Receipt Point, at which point Shipper will
become the owner of such line-fill.
 

--------------------------------------------------------------------------------

6.18     Intentionally Left Blank.
 
6.19     Billing, Accounting, and Reporting.
 
6.19.1.  Accounting Statements.  Carrier shall render to Shipper, on or about
the fifteenth (15th) day and last day of each Month (i) a statement setting
forth, with respect to all LPG received by Carrier during the preceding billing
period at the Receipt Point, the total quantity of said LPG, (ii) a statement
setting forth, with respect to all LPG redelivered to Shipper during the
preceding billing period at the Delivery Point, the total quantity of said LPG,
and (iii) a statement setting forth the transportation charge therefore and any
other charges due Carrier under this Agreement. Carrier may initially bill on
its best reasonably available estimates if all actual information is not
available at the time the statement is to be sent. Shipper agrees to make
payment to Carrier within a ten (10) day period following receipt of Carrier’s
statement/invoice for all LPG delivered by Carrier to Shipper at the Delivery
Point during the preceding billing period and any other charges due Carrier
under this Agreement. The statement/invoice presented by Carrier to Shipper will
include, among other matters, the following information: the period’s beginning
inventory, all receipts of LPG by Carrier during the period, all deliveries of
LPG to Shipper’s designees during the period and the period’s ending inventory.
 
6.19.2.  Late Payment.  In the event Shipper fails to pay any amount due Carrier
when the same is due, the unpaid balance shall bear interest from the due date
until the date when same is paid at a rate equal to the “prime rate” of interest
published by Citibank, N.A. plus one percent (1%).
 
6.19.3.  Errors and Disputes in Statements.  In the event an error is discovered
in the amount billed in any statement rendered by Carrier, such error shall be
adjusted within thirty (30) days of the discovery of the error. In the event a
dispute arises as to the amount payable in any statement rendered, Shipper shall
nevertheless pay the amount not in dispute to Carrier under the statement
rendered pending resolution of the dispute. Such payment shall not be deemed to
be a waiver of the right by either Party to receive correct payment or to recoup
any overpayment, as the case may be, together with interest calculated in
accordance with the resolution reached by the Parties and the matter shall then
be resolved pursuant to the procedures set out in Article 9 herein.
 
6.19.4.  Examination of Books and Records.  Each Party shall have the right at
reasonable hours to examine the books and records of the other Party to the
extent necessary to verify the accuracy of any statement/invoice, calculation or
determination made pursuant to the provisions contained herein. If any such
examination shall reveal, or if either Party shall discover, any error in its
own or the other Party’s statements, calculations or determinations, then proper
adjustment and correction thereof shall be made as promptly as practicable
thereafter.
 

--------------------------------------------------------------------------------

 
6.20    Additional Carrier Responsibilities.  Carrier shall provide in a manner
consistent with “Good Industry Practices” all personnel, materials, goods, and
services necessary to receive at Receipt Point and deliver to Shipper or
Shipper’s designee at the Delivery Point LPG compliant with Specifications and
the applicable requirements of Governmental Authorities. Carrier will provide
loading services at the Delivery Point seven (7) Days per week, twenty-four (24)
hours per Day. If the Parties determine that it is not necessary to have
personnel 24 hours per Day based upon operational experience developed on site,
the hours of service shall be subject to availability of PMI's representatives
to dispatch LPG from the Delivery Point. Carrier will also provide Shipper, in
addition to the Inspector's report, with a daily activity report specifying the
quantity (weight and volume) and quality of LPG delivered to PMI at the Delivery
Point, as well as a daily receipt ticket, documenting the measurement results
obtained under Sections 4.3.5 and 4.3.6.
 
6.21    Spill and Environmental Pollution.  In the event of a release or spill
of LPG from Carrier’s System, Carrier shall immediately notify Shipper and
Carrier shall make a determination if pipeline shipments should be interrupted.

6.21.1.  If any LPG spill or other environmental polluting discharge occurs in
connection with or relating to any LPG after acceptance at Receipt Point but
prior to delivery of such LPG to the Delivery Point, all containment and
clean-up operations (including those required by any Governmental Authority),
shall be at Carrier’s expense.

6.21.2.  If such spill or environmental polluting discharge occurs after
delivery at the Delivery Point, Shipper authorizes Carrier to commence
containment or clean-up operations on behalf of Shipper as deemed appropriate or
necessary as may be required by any Governmental Authority. Carrier will notify
Shipper and PMI immediately of such operations and PMI shall have the right to
direct all containment and clean-up operations.

6.21.3.  All costs of containment and clean-up for any spill or environmental
pollution will be borne by the Party responsible for such spill or environmental
pollution, and such Party shall indemnify and hold harmless the other Party from
any and all expenses, claims, liabilities, damages, penalties, fines and other
costs (including, without limitation, attorney’s fees) resulting from or related
to such incident.

6.22   Terminal Regulatory Compliance.  Carrier warrants and covenants that the
Carrier System currently complies with all local, state and federal laws, rules
or regulations applicable to the Carrier System including, without limitation,
all such laws, rules or regulations concerning permits and insurance required
for owning, leasing, using or operating the Carrier System. Furthermore, Carrier
warrants and covenants that it will utilize reasonable efforts to remain in
material compliance with such laws, rules or regulations.
 

--------------------------------------------------------------------------------

 
ARTICLE 7
 
INDEMNIFICATION
 
7.1   The Carrier shall release, indemnify and hold harmless Shipper and its
Affiliates and its and their respective officers, directors, agents and
employees, from and against any and all fines, penalties, assessments, claims,
demands, damages, loss and causes of action, including reasonable attorney's
fees, resulting from, directly or indirectly, the Carrier’s failure to comply
with its obligations and responsibilities included in this Agreement or the
violation or alleged violation of any Applicable Laws of any Governmental
Authorities, including, but not limited to, Environmental Laws, and for injury
to or death of any persons or loss or damage to any property, in any way arising
out of, in connection with, or incident to the negligence willful misconduct or
omissions of Carrier or its Affiliates and its or their respective officers,
directors, employees or agents in connection with this Agreement.
 
7.2    The Shipper shall release, indemnify and hold harmless the Carrier and
its Affiliates and its and their respective officers, directors, agents and
employees, from and against any and all fines, penalties, assessments, claims,
demands, damages, loss and causes of action, including reasonable attorney's
fees, resulting from, directly or indirectly, Shipper’s failure to comply with
its obligations and responsibilities included in this Agreement or the violation
or alleged violation of any Applicable Laws of any Governmental Authorities,
including, but not limited to, Environmental Laws, and for injury to or death of
any persons or loss or damage to any property, in any way arising out of, in
connection with, or incident to the negligence, willful misconduct or omissions
of Shipper or its Affiliates and its or their respective officers, directors,
employees or agents in connection with this Agreement.
 
7.3   It is not the intention of the parties hereto to release from liability
any third party with which either the Carrier or Shipper may contract in
connection with the Carrier System or the services provided under this
Agreement. The provisions of this Section are not made for the benefit of any
person or entity other than the Parties, their Affiliates and their respective
officers, directors, employees, and agents.
 
ARTICLE 8

MISCELLANEOUS

8.1   Notices.  All notices and other communications given pursuant to or in
connection with this Agreement shall be given in writing and shall be personally
delivered, mailed by U.S Mail, or sent by overnight courier service, or
facsimile transmission (with electronic confirmation of receipt) to the intended
recipient at the address specified below for such recipient or, as to either
Party, at such other address as shall be designated by such Party in a notice to
the other Party. If personally delivered to the address herein provided, a
notice shall be deemed to have been received upon delivery or if delivered after
regular business hours, it shall be deemed to have been received on the
following Day. If mailed by U.S. Mail to the address herein provided, a notice
shall be deemed to have been received three (3) Days after the mailing thereof,
provided that a notice shall not be effective if mailed during any period of
mail service disruption. If sent by courier service, or facsimile transmission
to the address herein provided, a notice shall be deemed to have been received
on the first (1st) Day following the Day it was dispatched.
 

--------------------------------------------------------------------------------

Shipper:
TransMontaigne Product Services Inc.

1670 Broadway Street, Suite 3100
Denver, Colorado 80202
Attention: President
Facsimile No. (303) 626-8228

Carrier:
Rio Vista Operating Partnership L.P.

820 Gessner Road, Suite 1285
Houston, Texas 77024
Attention: President
Facsimile No.: (713) 467-8258

With a copy (which shall not constitute effective notice) to:
Ian Bothwell
Penn Octane Corporation
840 Apollo Street Ste 313
El Segundo, CA 90245

A Party shall be entitled to change its address for notice hereunder by
providing the other Party with not less than three (3) Days prior written notice
of such address change.
 
8.2   Assignment.  No Party may assign, sell, exchange, transfer or otherwise
dispose to any Person any of its rights, interests, powers or obligations under
this Agreement, unless the other Party consents in advance and in writing, which
consent shall not be unreasonably withheld; provided, however, no such consent
shall be required in connection with the sale of all or substantially all of a
Party’s LPG business or in the case of any assignment to an Affiliate. The
foregoing does not apply to Shipper’s assignment of this Agreement to
TransMontaigne Partners L.P. If such an assignment occurs, this Agreement shall
extend to and be binding upon the successors and assigns of the Parties. Each
Party shall have the right to pledge its interest under this Agreement to a
financial institution providing such Party with financing.
 
8.3   Modification and Waiver.  No amendment, change in, addition to, or waiver
of the terms, provisions, or conditions of this Agreement shall be effective or
binding upon either Party unless it is in writing and signed by duly authorized
representatives of both Parties. A waiver by a Party of any breach by the other
Party of a provision hereof by a Party shall not be binding upon the first Party
unless such waiver is in writing, and no such waiver or failure by either Party
to insist upon the strict performance of any covenant, agreement, term or
condition of this Agreement or to exercise any right or remedy consequent upon a
breach thereof, shall constitute a waiver of any prior or subsequent breach of
such covenant, agreement, term or condition.
 
8.4   Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS EXCLUDING ANY CONFLICTS OF LAW
RULE OR PRINCIPLE THAT WOULD OTHERWISE REFER CONSTRUCTION OR INTERPRETATION OF
THIS AGREEMENT TO THE SUBSTANTIVE LAW OF ANOTHER JURISDICTION.
 

--------------------------------------------------------------------------------

8.5   Entire Agreement.  This Agreement together with the Purchase Agreement and
their appendices, constitutes the entire Agreement between the Parties
concerning the subject matter hereof and supersedes all prior or contemporaneous
discussions, negotiations, representations, or agreements relating to the
subject matter of the Agreement. There are no representations, warranties,
conditions or collateral agreements, express or implied, relating to the subject
matter of this Agreement, other than as contained in this Agreement.
 
8.6   Survival.  All provisions that may reasonably be interpreted as surviving
the termination or non-renewal of this Agreement shall survive such termination
or non-renewal, including, but not limited to, the provisions relating to
indemnification, limitation of damages, waiver of warranty and of indirect
damages, choice of law, and right to audit.
 
8.7   Relationship of the Parties.  This Agreement is not intended to and does
not (i) create any relationship of partnership, joint venture, agency, or
employment or (ii) permit either Party to obligate the other Party. Each Party
hereto is and shall remain an independent contractor as to the other Party
hereto in all respects and in the performance of all work and activities under
this Agreement. The detailed methods and manner of conducting such work and
activities by such Party shall be under the complete control and direction of
such Party unless modified by another provision of this Agreement. Nothing in
this Agreement shall limit or be interpreted as conflicting with the independent
contractor status of such Party and its subcontractors, but in the event of any
such conflict, the provisions of this Section 8.7 shall govern.
 
8.8   Third Party Beneficiaries.  This Agreement is for the sole benefit of the
Parties and their respective successors and permitted assigns, and shall not
inure to the benefit of any other Person whomsoever, it being the intention of
the Parties that no third Person shall be deemed a third party beneficiary of
this Agreement.
 
8.9   Confidentiality.  Carrier shall faithfully observe all requirements of
confidentiality imposed on it as a common carrier under Applicable Law. Neither
Shipper nor Carrier shall disclose any commercially sensitive terms or
conditions of this Agreement without the prior written consent of the other
Party, except as required by law or regulation.
 
8.10    Conspicuousness.  THE PARTIES AGREE THAT ANY PROVISION OF THIS AGREEMENT
THAT IS SET FORTH IN THE STYLE OF THIS SECTION 8.10 IS CONSPICUOUS.
 
8.11    Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which shall
be deemed one and the same Agreement.
 

--------------------------------------------------------------------------------

 
ARTICLE 9
 
ALTERNATE DISPUTE RESOLUTION
 
9.1   Covered Disputes.  Any dispute, controversy or claim (whether sounding in
contract, tort or otherwise) arising out of or relating to this Agreement,
including without limitation the meaning of its provisions, or the proper
performance of any of its terms by either Party, its breach, termination or
invalidity (“Dispute”) will be resolved in accordance with the procedures
specified in this paragraph, which will be the sole and exclusive procedure for
the resolution of any such Dispute, except that a Party, without prejudice to
the following procedures, may file a complaint to seek preliminary injunctive or
other provisional judicial relief, if in its sole judgment, that action is
necessary to avoid irreparable damage or to preserve the status quo. Despite
that action the Parties will continue, subject to Section 9.6 hereinbelow, to
participate in good faith in the procedures specified in this Section.

9.2   Initiation of Procedures.  Either Party wishing to initiate the dispute
resolution procedures set forth in this paragraph with respect to a Dispute not
resolved in the ordinary course of business must give written notice of the
Dispute to the other Party (“Dispute Notice”). The Dispute Notice will include
(i) a statement of that Party’s position and a summary of arguments supporting
that position, and (ii) the name and title of the executive who will represent
that Party, and of any other person who will accompany the executive, in the
negotiations under next subsection.

9.3   Negotiation Between Executives.  If a Party has given a Dispute Notice
under the preceding subparagraph, the Parties will attempt in good faith to
resolve the Dispute within 45 calendar days of the notice by negotiation between
executives who have authority to settle the Dispute and who are at a higher
level of management than the persons with direct responsibility for
administration of this Agreement or the matter in Dispute. Within 15 calendar
days after delivery of the Dispute Notice, the receiving Party will submit to
the other a written response. The response will include (i) a statement of that
Party's position and a summary of arguments supporting that position, and (ii)
the name and title of the executive who will represent that Party and of any
other person who will accompany the executive. Within 45 calendar days after
delivery of the Dispute Notice, the executives of both Parties will meet at a
mutually acceptable time and place, and thereafter, as often as they reasonably
deem necessary, to attempt to resolve the Dispute.

9.4   Mediation.  If the Dispute has not been resolved by negotiation under the
preceding subsection within 45 calendar days of the Dispute Notice, and only in
such event, either Party may initiate the mediation procedure of this subsection
by giving written notice to the other Party (“Mediation Notice”). The Parties
will endeavor to settle the Dispute by mediation within 90 calendar days of the
Mediation Notice under the then current Center for Public Resources ("CPR")
Model Mediation Procedure for Business Disputes. If the Parties have not agreed
upon a mediator within seven calendar days after the Mediation Notice, either
Party may request CPR assistance in the selection of a mediator under its
guidelines. The mediator will establish rules for an expedited discovery
procedure and will resolve all disputes with regard to discovery between the
Parties. If the mediator has not already done so during the mediation process,
at least seven calendar days before the end of the ninety day mediation period,
the mediator, if he or she believes that they are qualified to do so, will
provide to each Party a written summary of the mediator's conclusions regarding
the outcome of the Dispute if it is submitted to arbitration under the following
subsection.

--------------------------------------------------------------------------------

9.5   Arbitration.  If the Dispute has not been resolved by mediation under the
preceding subsection within 90 calendar days of the Mediation Notice, and only
in such event, either Party may initiate the arbitration procedure of this
subsection by giving written notice to the other Party (“Arbitration Notice”).
The Dispute will be finally resolved by binding arbitration in accordance with
the then current Commercial Arbitration Rules of the American Arbitration
Association (“AAA”) by a single arbitrator, chosen by mutual agreement of both
Parties. If the Parties cannot select an arbitrator within 30 calendar days of
the Arbitration Notice, the arbitrator will be selected by the AAA. The
arbitration will be governed by the United States Arbitration Act, 9 U.S.C. Sec.
1-16, as amended (“the Act”), and to the extent not inconsistent with the Act,
the Texas arbitration statute. Judgment upon the award rendered by the
arbitrator may be entered by any court of any state having jurisdiction. The
statute of limitations of the State of Texas for the commencement of a lawsuit
will apply to the commencement of an arbitration under this Agreement, except
that no defenses will be available based upon the passage of time during any
negotiation or mediation called for by this Section. Each Party will assume its
own costs of legal representation and expert witnesses and the Parties will
share equally the other costs of the arbitration. The arbitrator will award
pre-judgment interest in accordance with the law of Texas; however, the
arbitrator may not award punitive damages. The arbitration will take place in
Houston, Texas.

9.6   Tolling and Performance.  Except as indicated in the preceding subsection
with regard to the commencement of arbitration, all applicable statutes of
limitation and defenses based upon the passage of time will be tolled while the
procedures specified in this paragraph are pending. The Parties will take any
action required to effectuate that tolling. Each Party is required to continue
to perform its obligations under this Agreement pending final resolution of any
Dispute, unless to do so would be impossible or impracticable under the
circumstances.
 

--------------------------------------------------------------------------------

The Parties have executed this Agreement as of the Effective Date.
 

 
TRANSMONTAIGNE PRODUCT SERVICES INC.
     
By:
   
Name: William S. Dickey
 
Title: President
         
RIO VISTA OPERATING PARTNERSHIP, L.P.
 
By: Rio Vista Operating GP LLC, general partner
     
By:
   
Name: Charles C. Handly
 
Title: President
     
PENN OCTANE INTERNATIONAL, LLC
     
By: 
   
Name: Ian T. Bothwell
 
Title: Manager

 

--------------------------------------------------------------------------------