Exhibit 10.5



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                           PURCHASE AND SALE AGREEMENT

                           dated as of August 15, 2005

                                     between

                            PENN OCTANE CORPORATION,

                                       And

                      TRANSMONTAIGNE PRODUCT SERVICES INC.

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<PAGE>
<TABLE>
<CAPTION>
                                TABLE OF CONTENTS


                                                                                   Page
<S>                     <C>                                                        <C>
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
     SECTION 1.1.       Certain Definitions . . . . . . . . . . . . . . . . . . . . 2

ARTICLE II THE CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
     SECTION 2.1.       Purchase and Sale of the Assets . . . . . . . . . . . . . . 10
     SECTION 2.2.       Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 10
     SECTION 2.3.       Deliveries to Buyer . . . . . . . . . . . . . . . . . . . . 11
     SECTION 2.4.       Deliveries to Seller. . . . . . . . . . . . . . . . . . . . 11
     SECTION 2.5.       Proceedings at Closing. . . . . . . . . . . . . . . . . . . 11

ARTICLE III PURCHASE PRICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
     SECTION 3.1.       Purchase Price. . . . . . . . . . . . . . . . . . . . . . . 12
     SECTION 3.2.       Payment of Consideration and Transfer of Assets at Closing. 12
     SECTION 3.3.       Allocation. . . . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . 12
     SECTION 4.1.       Organization; Power and Authority . . . . . . . . . . . . . 13
     SECTION 4.2.       Authorizations; Execution and Validity. . . . . . . . . . . 13
     SECTION 4.3.       No Conflicts; Consents. . . . . . . . . . . . . . . . . . . 13
     SECTION 4.4.       Litigation; Orders. . . . . . . . . . . . . . . . . . . . . 14
     SECTION 4.5.       Environmental Matters . . . . . . . . . . . . . . . . . . . 14
     SECTION 4.6.       Employee and Benefit Matters. . . . . . . . . . . . . . . . 15
     SECTION 4.7.       Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
     SECTION 4.8.       Title to Assets . . . . . . . . . . . . . . . . . . . . . . 17
     SECTION 4.9.       Assigned Contracts. . . . . . . . . . . . . . . . . . . . . 17
     SECTION 4.10.      Sufficiency of Assets . . . . . . . . . . . . . . . . . . . 18
     SECTION 4.11.      Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 18
     SECTION 4.12.      Permits; Compliance with Applicable Law . . . . . . . . . . 18
     SECTION 4.13.      Absence of Certain Changes. . . . . . . . . . . . . . . . . 18
     SECTION 4.14.      Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
     SECTION 4.15.      Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . . 19

ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . 20
     SECTION 5.1.       Organization; Power and Authority . . . . . . . . . . . . . 20
     SECTION 5.2.       Authorizations; Execution and Validity. . . . . . . . . . . 20
     SECTION 5.3.       No Conflicts; Consents. . . . . . . . . . . . . . . . . . . 20
     SECTION 5.4.       Litigation. . . . . . . . . . . . . . . . . . . . . . . . . 21
     SECTION 5.5.       Investment Intent; Sophisticated Buyer. . . . . . . . . . . 21
     SECTION 5.6.       Financial Ability . . . . . . . . . . . . . . . . . . . . . 21
     SECTION 5.7.       Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
     SECTION 5.8.       Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . . 21


                                        i
<PAGE>
ARTICLE VI COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
     SECTION 6.1.       Covenants of Seller . . . . . . . . . . . . . . . . . . . . 21
     SECTION 6.2.       Covenants of Buyer. . . . . . . . . . . . . . . . . . . . . 25
     SECTION 6.3.       Other Covenants . . . . . . . . . . . . . . . . . . . . . . 26

ARTICLE VII TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
     SECTION 7.1.       Preparation and Filing of Tax Returns . . . . . . . . . . . 30
     SECTION 7.2.       Seller's Tax Indemnification. . . . . . . . . . . . . . . . 30
     SECTION 7.3.       Buyer's Tax Indemnification . . . . . . . . . . . . . . . . 30
     SECTION 7.4.       Tax Indemnification Procedures. . . . . . . . . . . . . . . 30

ARTICLE VIII CONDITIONS PRECEDENT TO BUYER'S OBLIGATION . . . . . . . . . . . . . . 31
     SECTION 8.1.       Accuracy of Representations and Warranties. . . . . . . . . 31
     SECTION 8.2.       Performance of Covenants. . . . . . . . . . . . . . . . . . 32
     SECTION 8.3.       Officers' Certificates. . . . . . . . . . . . . . . . . . . 32
     SECTION 8.4.       No Order. . . . . . . . . . . . . . . . . . . . . . . . . . 32
     SECTION 8.5.       Certified Resolutions . . . . . . . . . . . . . . . . . . . 32
     SECTION 8.6.       Secretary's Certificate . . . . . . . . . . . . . . . . . . 32
     SECTION 8.7.       Liens and Secured Debt. . . . . . . . . . . . . . . . . . . 32
     SECTION 8.8.       Consents. . . . . . . . . . . . . . . . . . . . . . . . . . 32
     SECTION 8.9.       Due Diligence . . . . . . . . . . . . . . . . . . . . . . . 30
     SECTION 8.10.      Authorization to Assign . . . . . . . . . . . . . . . . . . 33
     SECTION 8.11.      Seadrift Pipeline Lease . . . . . . . . . . . . . . . . . . 33
     SECTION 8.12.      Exxon Contract. . . . . . . . . . . . . . . . . . . . . . . 33
     SECTION 8.13.      Concurrent Closing with Rio . . . . . . . . . . . . . . . . 31
     SECTION 8.14.      No Change in Law. . . . . . . . . . . . . . . . . . . . . . 31
     SECTION 8.15.      Stockholder Approval. . . . . . . . . . . . . . . . . . . . 31

ARTICLE IX CONDITIONS PRECEDENT TO SELLER'S OBLIGATION. . . . . . . . . . . . . . . 34
     SECTION 9.1.       Accuracy of Representations and Warranties. . . . . . . . . 34
     SECTION 9.2.       Performance of Covenants. . . . . . . . . . . . . . . . . . 34
     SECTION 9.3.       Officer's Certificate . . . . . . . . . . . . . . . . . . . 34
     SECTION 9.4.       No Order. . . . . . . . . . . . . . . . . . . . . . . . . . 34
     SECTION 9.5.       Certified Resolutions . . . . . . . . . . . . . . . . . . . 34
     SECTION 9.6.       Secretary's Certificate . . . . . . . . . . . . . . . . . . 34
     SECTION 9.7.       No Change in Law. . . . . . . . . . . . . . . . . . . . . . 34
     SECTION 9.8.       Stockholder Approval. . . . . . . . . . . . . . . . . . . . 34

ARTICLE X TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
     SECTION 10.1.      Termination of Agreement. . . . . . . . . . . . . . . . . . 35
     SECTION 10.2.      Effect of Termination . . . . . . . . . . . . . . . . . . . 35


                                       ii
<PAGE>
ARTICLE XI INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
     SECTION 11.1.      Seller Indemnification. . . . . . . . . . . . . . . . . . . 36
     SECTION 11.2.      Buyer Indemnification . . . . . . . . . . . . . . . . . . . 36
     SECTION 11.3.      Indemnification Procedures. . . . . . . . . . . . . . . . . 37
     SECTION 11.4.      Limits on Indemnification . . . . . . . . . . . . . . . . . 37
     SECTION 11.5.      Certain Damages . . . . . . . . . . . . . . . . . . . . . . 38
     SECTION 11.6       Exclusive Remedy. . . . . . . . . . . . . . . . . . . . . . 38

ARTICLE XII GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
     SECTION 12.1.      Amendments. . . . . . . . . . . . . . . . . . . . . . . . . 39
     SECTION 12.2.      Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . 39
     SECTION 12.3.      Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 39
     SECTION 12.4.      Successors and Assigns; Parties in Interest . . . . . . . . 40
     SECTION 12.5.      Severability. . . . . . . . . . . . . . . . . . . . . . . . 40
     SECTION 12.6.      Entire Agreement. . . . . . . . . . . . . . . . . . . . . . 40
     SECTION 12.7.      Governing Law, Consent to Jurisdiction. . . . . . . . . . . 41
     SECTION 12.8.      Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 42
     SECTION 12.9.      Release of Information; Confidentiality . . . . . . . . . . 42
     SECTION 12.10.     Sole Obligation . . . . . . . . . . . . . . . . . . . . . . 42
     SECTION 12.11.     Certain Construction Rules. . . . . . . . . . . . . . . . . 42
     SECTION 12.12.     Survival. . . . . . . . . . . . . . . . . . . . . . . . . . 42
     SECTION 12.13.     Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 43
</TABLE>

Exhibits
--------

A     - Seller's Approvals and Consents
B     - General Assignment, Conveyance and Bill of Sale
          Annex 1 - Intentionally Omitted
          Annex 2 - Leases
          Annex 3 - Improvements
          Annex 4 - Easements
          Annex 5 - Personal Property
          Annex 6 - Assigned Contracts
          Annex 7 - Permits
C     - Assumption Agreement


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Schedules
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1.1        - Seller's Individuals with Knowledge
4.3        - Seller's Conflicts/Consents
4.4        - Litigation; Orders
4.5        - Environmental Matters
4.6(a)     - Business Employees
4.6(c)     - Seller Plans
4.7        - Taxes
4.9        - Assigned Contracts
4.11       - Insurance
4.12       - Permits; Compliance with Applicable Law
4.13       - Certain Changes
4.14       - Fees
5.3        - Buyer's Conflicts/Consents
6.3(e)(i)  - Minimum Requirement


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<PAGE>
                           PURCHASE AND SALE AGREEMENT

     This  PURCHASE  AND  SALE  AGREEMENT,  dated  as  of  August 15, 2005 (this
"Agreement"), is entered into by and between PENN OCTANE CORPORATION, a Delaware
corporation  ("Penn"),  ("Seller"),  and  TRANSMONTAIGNE  PRODUCT  SERVICES INC.
("Buyer").  Buyer and Seller may be referred to herein individually as a "Party"
or  collectively  as  the  "Parties."

                                    RECITALS

     Seller  is  the  owner  of various leases, contracts, a pumping station and
other  assets used by Seller in the purchase, transportation, marketing and sale
of  LPG,  all  of such leases, contracts, pumping station and other assets being
more  particularly  described  in the following provisions of this Agreement and
collectively  defined  as  the  "Assets".

     Seller  is  also  an  affiliate  of  Rio  Vista  Operating Partnership L.P.
("Rio"), which, in turn, has concurrently executed a Purchase and Sale Agreement
with Buyer for the acquisition by Buyer of various leases, pipelines, terminals,
contracts  and  other assets used in the purchase, transportation, marketing and
sale  of  LPG  by  Rio as well as the Equity Interests (defined below) which Rio
has  in  Penn  Octane de M xico, S. de R.L. de C.V., a limited liability company
(sociedad de responsabilidad limitada de capital variable) duly incorporated and
existing  under the laws of Mexico  ("POM"), and Termatsal S. de R.L. de C.V., a
limited  liability  company  (sociedad  de  responsabilidad  limitada de capital
variable) duly incorporated and existing under the laws of Mexico ("Termatsal").
Likewise,  Rio has in place certain corporate and contractual arrangements based
on  which  it has certain rights for indirect control of Tergas, S.A. de C.V., a
limited  liability  company  (sociedad  de  responsibilidad limitada  de capital
variable)  duly  incorporated  and existing under the laws of Mexico ("Tergas"),
which  is  owned  by certain individuals of Mexican nationality (the "Individual
Tergas Owners") (all of such Equity Interests in POM, Termatsal and Tergas being
herein  collectively referred to as the "Shares"). POM, Termatsal and Tergas are
herein  collectively  referred  to  as  the  "Companies."

     It  is the intent of the Parties hereto that the Closing of the transaction
contemplated  by  this  Agreement is specifically contingent upon the concurrent
Closing  of  the  transaction  contemplated  in  the Purchase and Sale Agreement
between  Rio  and  Buyer.

     Buyer  desires  to  purchase  from Seller, and Seller is willing to sell to
Buyer  the  Assets,  as  further  described  in  this  Agreement.

     NOW,  THEREFORE, in consideration of the premises, the terms and provisions
set  forth  herein,  the mutual benefits to be gained by the performance thereof
and  other good and valuable consideration, the receipt and sufficiency of which
are  hereby  acknowledged,  the  Parties  agree  as  follows:


                                        1
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                                    ARTICLE I
                                   DEFINITIONS

     SECTION 1.1  Certain Definitions.
                  -------------------

               As used in this  Agreement,  the terms set forth below shall have
the following respective meanings:

     "Actively  Employed"  means that the individual is an employee of Seller on
the  day  immediately  prior  to the Closing Date and on the Closing Date either
such  individual  is  performing  his  or  her regular occupation for his or her
employer (either at such employer's usual places of business or at some location
to  which  such  employer's business requires the employee to travel) or is on a
previously  scheduled and approved time-off, or such other leave of absence that
would  not  have  prevented  such  employee  (if  he  or  she  had become a U.S.
Continuing Employee as of the Closing Date) from receiving immediate coverage as
of  the  Closing  Date  under  the welfare benefit plans maintained by the Buyer
Employer  that  will  be provided to U.S. Continuing Employees as of the Closing
Date.

     "Adverse  Claim"  means,  with  respect  to any security or other financial
instrument,  an "adverse claim" as defined in Section 8-102(a)(1) of the Uniform
Commercial  Code  as  in  effect  in  the  State  of  Texas.

     "Affiliate"  means,  with respect to any Person, (a) any Subsidiary of such
Person  or  (b)  any  other  Person  that,  directly or indirectly, controls, is
controlled  by,  or is under common control with, such Person.  For the purposes
of  this  definition,  "control"  means the possession of the power to direct or
cause  the  direction of management and policies of such Person, whether through
the  ownership  of  voting  securities,  by  contract,  or  otherwise.

     "Agreement" has the meaning given in the Preamble.

     "Assets"  means  the  following  assets  of  Penn,  other than the Retained
Assets:

          (a)     the  lessee's  or  tenant's entire interest under the Seadrift
Pipeline  Lease including all rights thereunder to use the Seadrift Pipeline and
the  easements,  rights  of  way,  property  use  agreements,  line rights, real
property  licenses  and  other similar interests in real property or contractual
rights  permitting  such  pipeline  to  be  located  in  its  present  location;

          (b)     all  leases  of real property (excluding the Seadrift Pipeline
Lease  and  the  four  executive  offices located in Houston, Texas, Seal Beach,
California,  El  Segundo,  California,  and  Palm  Desert,  California  and  all
furniture,  fixtures  and  equipment located therein) used in the conduct of the
Business  in  the  United  States  including  those  described on Annex 2 to the
General  Assignment  (collectively,  the  "Leases");

          (c)     the  Exxon  Contract;

          (d)     all  structures,  fixtures, facilities, pumping facilities and
appurtenances located on or under the real property described in clauses (a) and
(b)  above  including  those  described  on  Annex  3  to the General Assignment
(collectively,  the  "Improvements");


                                        2
<PAGE>
          (e)     all  easements,  rights  of way, property use agreements, line
rights and real property licenses (including right-of-way Permits from railroads
and  road  crossing Permits or other Permits from Governmental Authorities) held
by  Penn  in  connection  with  the conduct of the Business in the United States
including,  without  limitation,  those  described  on  Annex  4  to the General
Assignment  (the  "Easements");

          (f)     to the extent the same do not constitute Improvements, any and
all  fittings,  cathodic  protection  ground beds, rectifiers, local supervisory
control  software  (SCADA), machinery, equipment, pumps, engines, pipes, valves,
connections,  gates,  computer hardware and all other tangible personal property
used  in  the  Business  including  those  described  on  Annex 5 to the General
Assignment  (the  "Personal  Property");

          (g)     the contracts and agreements specifically related to the sale,
purchase,  marketing,  transportation  and storage of LPG in connection with the
Business  (including  the Exxon Contract) and any leases of personal property to
which  Penn  is  a  party  and  that  are  described  on  Annex 6 to the General
Assignment  (the  "Assigned  Contracts");

          (h)     all  permits,  licenses,  certificates,  authorizations,
registrations,  orders,  waivers,  variances  and  approvals  granted  by  any
Governmental  Authorities  or  third  Persons  to  Penn  or  its predecessors in
interest  for  the  ownership  or  conduct  of the Business, in each case to the
extent  the  same  are assignable by Seller including those listed on Annex 7 to
the  General  Assignment  (the  "Permits");

          (i)     all  LPG  and  any  other  hydrocarbons  (in whatever physical
state)  owned by Penn in connection with the Business (including any of the same
classified  as  inventory) and whether located in storage facilities, pipelines,
or  other  facilities  or  structures  owned or leased by Penn or other Persons;

          (j)     all  books, records and documents relating to the ownership or
operation of the Assets and Business (other than medical records of employees or
medical  records of independent contractors of Penn for which written consent of
the applicable employee or independent contractor to the release of such records
is  not  obtained)  including all contract, tax, financial, technical, insurance
(past  and  present),  pipeline,  right  of  way,  system  mapping, engineering,
environmental,  safety and permitting records, information and files (the "Books
and  Records");  excluding, however the records which will be retained by Seller
(the "Retained Records"), which shall consist of (i) corporate records of Seller
not  directly  related  to  the operation of the Assets or Business (ii) records
necessary  for  Seller's  continued  operations  following the Closing and (iii)
copies of any records required in connection with preparation of any Tax Returns
required  to  be  filed  by  Seller  or  Seller's  Affiliates;

          (k)     all  deposits and all service charges, utility bills and other
goods or services prepaid by Penn in connection with the Business;

          (l)     all  claims, causes of action, rights and remedies arising out
of the conduct of the Business or the ownership of the Assets; and


                                        3
<PAGE>
          (m)     all  patents  and  patent applications, and other intellectual
property rights, United States or foreign, owned or licensed by Penn used in the
conduct  of  the  Business (provided, however, that the Assets shall not include
trademarks  and  service  marks,  trademark  and  service mark registrations and
applications,  trade  names,  logos,  copyrights and copyright registrations and
applications  technology,  know-how, and processes utilized or owned by Seller).

     "Assigned  Contracts"  has  the  meaning given in the subsection (g) of the
definition  of  Assets.

     "Assumed  Liabilities"  means  the liabilities, obligations, or Losses that
occur  and require payment, performance or resolution, as a result of and in the
course of operation of the Business and the Assets during the period on or after
the  Closing  Date.

     "Assumption Agreement" has the meaning given in Section 2.4(b).

     "Basket Amount" has the meaning given in Section 11.4(a).

     "Benefit  Plan"  means:  (a)  each "employee benefit plan," as such term is
defined  in  Section  3(3)  of  ERISA,  (b)  each plan that would be an employee
benefit  plan  if  it  was subject to ERISA, such as foreign plans and plans for
directors,  (c) each stock bonus, stock ownership, stock option, stock purchase,
stock appreciation rights, phantom stock, or other stock plan (whether qualified
or  nonqualified),  and  (d)  each  bonus,  deferred  compensation,  incentive
compensation,  vacation  or  supplemental  income  plan,  policy or arrangement.

     "Books  and  Records"  has  the  meaning  given  in  subsection  (j) of the
definition  of  Assets.

     "Business" shall mean the business currently conducted by Penn with respect
to  and including the Seadrift Pipeline, the Exxon Contract, the pumping station
and  the  purchase,  transportation,  storage  and  marketing  of  LPG.

     "Business  Day" means any day other than a Saturday, Sunday or day on which
commercial  banks  in  Texas are authorized or required by Law to remain closed.

     "Buyer" has the meaning given in the Preamble.

     "Buyer  Confidentiality  Agreement"  means  that  certain letter agreement,
dated  as  of  June  6,  2005,  by  and  between  Rio  and  Buyer.

     "Buyer Employer" has the meaning given in Section 6.3(g)(i).

     "Closing" has the meaning given in Section 2.2.

     "Closing Date" has the meaning given in Section 2.2.

     "Closing  Effective  Time"  means  7:00 a.m., central daylight time, on the
Closing  Date.

     "Code" means the Internal Revenue Code of 1986, as amended.


                                        4
<PAGE>
     "Company"  means  any  of  POM,  Termatsal or Tergas, and "Companies" shall
mean  all  of  them.

     "Contract"  means  any  written contract, agreement, indenture, note, bond,
loan, instrument, lease, conditional sale contract, mortgage or insurance policy
including any partnership, joint venture or operating agreement, any contract or
agreement  that grants a right of first refusal or right of first negotiation or
other  preferential right to a third party, any contract or agreement containing
covenants  limiting  the freedom to engage in any line of business or to compete
with  any  Person, any collective bargaining agreement, any employment, personal
services, consulting, severance or similar agreement for any employees of Seller
including,  without  limitation,  the Assigned Contracts, the Exxon Contract and
the  Seadrift  Pipeline  Lease.

     "Deficiency  Amount"  means  the difference between the Minimum Requirement
and  actual LPG inventory comprising the Assets at the Closing Effective Time as
determined  pursuant  to Schedule 6.3(e)(i) in conjunction with the Purchase and
Sale  Agreement  between  Buyer  and  Rio.

     "Easements"  has  the meaning given in the subsection (e) of the definition
of  Assets.

     "Encumbrances"  means  any  security  interest,  pledge,  mortgage,  lien
(statutory  or  otherwise),  charge,  encumbrance,  trust,  Adverse  Claim,
preferential  arrangement  or restriction of any kind, including any restriction
on  the  use,  transfer,  or  other  exercise  of  any  attributes of ownership.

     "Environmental Audit" has the meaning given in Section 6.3(f)(i).

     "Environmental Condition" means:

     (a)     the presence (or any Release) of a Hazardous Material from, in, on,
under  or  onto  any  properties  or the environment in alleged violation of any
Environmental  Laws;

     (b)     the presence (or any Release) of a Hazardous Material from, in, on,
under  or  onto  any  property  or  the  environment that results in any Losses;

     (c)     any  proceedings  or  investigatory, enforcement, cleanup, removal,
containment,  remedial, or other private or governmental or regulatory action at
any  time  threatened in writing, instituted, or completed against or in respect
to  any  properties  or  any  use  or activity on any properties pursuant to any
applicable  Environmental  Laws  relating  to  Hazardous  Materials  or  alleged
violation  of  Environmental  Laws;

     (d)     the presence (or any Release) of a Hazardous Material from, in, on,
under or onto any  properties or the environment resulting in a Material Adverse
Effect;  or

     (e)     any  alleged violation of Environmental Laws that occurred prior to
the  Closing  Date.


                                        5
<PAGE>
     "Environmental  Laws"  means any 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.

     "Equity  Interests"  shall  mean,  with  respect to any Person, any and all
shares,  interests,  participations  or  other equivalents, including membership
interests  (however  designated,  whether voting or nonvoting or certificated or
non-certificated),  of  equity  of  such  Person, including, if such Person is a
partnership,  partnership  interests  (whether general or limited) and any other
interest  or participation that confers on a Person the right to receive a share
of  the  profits and losses of, or distributions of property of, or the right to
vote in the decisions of such partnership, excluding debt securities convertible
or  exchangeable  into  such  equity.

     "ERISA"  means  the  Employee  Retirement  Income  Security Act of 1974, as
amended.

     "ERISA  Affiliate" means, with respect to any Person, any other Person that
is  a member of a group described in Section 414(b), (c), (m) or (o) of the Code
or  Section  4001(b)(1)  of  ERISA  that includes the first Person, or that is a
member  of  the  same "controlled group" as the first Person pursuant to Section
4001(a)(14)  of  ERISA.

     "Escrow  Agent"  means Stewart Title Company of Cameron County, Texas , 955
Paredes  Line  Road,  Brownsville,  Texas  78521.

     "Exxon  Contract" means the Agreement, dated October 1, 1999, as amended on
January  20,  2000, February 29, 2000 and the third amendment effective April 1,
2005,  by and between Penn and Exxon U.S.A., a division of Exxon Corporation for
the  purchase  of  LPG  for  the period of October 1, 1999 through September 30,
2009.

     "General Conveyance" has the meaning given in Section 2.3(a).

     "Governmental Authority" means any U.S. federal, state, provincial or local
government  or  governmental  regulatory  body  and  any  of  their  respective
subdivisions,  agencies,  instrumentalities,  authorities  or  tribunals.

     "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.

     "Hire Date" has the meaning given in Section 6.3(g)(i).

     "Improvements"  has  the  meaning  given  in  the  subsection  (d)  of  the
definition  of  Assets.


                                        6
<PAGE>
     "Indemnified Party" has the meaning given in Section 11.3.

     "Indemnifying Party" has the meaning given in Section 11.3.

     "Knowledge"  means  with  respect to Seller, the actual knowledge after due
inquiry  of  any  of  the  individuals  specified  on  Schedule  1.1.

     "Law"  means  any  U.S.  federal,  state, provincial or local law, statute,
rule,  ordinance,  code  or  regulation.

     "Leases"  has  the meaning given in the subsection (b) of the definition of
Assets.

     "Legal  Proceeding"  means any judicial, administrative or arbitral action,
suit,  investigation  or  proceeding  (public  or private) by or before any U.S.
court  or  other  Governmental  Authority.

     "Lien"  means any lien, pledge, mortgage, deed of trust, security interest,
attachment,  levy  or  other  similar  encumbrance.

     "Losses"  means  claims,  judgments,  causes  of  action,  liabilities,
obligations,  damages,  losses,  deficiencies,  costs  and  expenses.

     "LPG" means liquefied petroleum gas.

     "Material  Adverse  Effect"  means  any  condition,  circumstance, event or
effect  that  would  be  material  and  adverse  to  the  operation or condition
(financial or otherwise) of the Business, the Assets, or the financial condition
of  Seller  including  any casualty loss to, or taking through an eminent domain
procedure  of  any  of  the  Assets,  in  an  amount  of  $50,000  or  more.

     "Materiality Requirement" has the meaning given in Section 11.4(d).

     "Minimum Requirement" has the meaning given in Section 6.3(e)(i).

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

     "Owned  Pumping  Station" means the midline pumping station owned by Seller
and  located  in  Raymondville, Texas and associated equipment and improvements.

     "Party" or "Parties" has the meaning given in the Preamble.

     "Penn" has the meaning given in the Preamble.

     "Permits"  has the meaning given in the subsection (h) of the definition of
Assets.

     "Permitted  Encumbrances"  shall  mean,  with respect to or upon any of the
Assets,  any  Liens,  caveats,  claims, rights (including rights of Governmental
Authorities),  reservations,  exceptions,  easements, rights of way, conditions,
restrictions  (including  restrictive  covenants  and  zoning  and  land  use
restrictions  imposed  by  applicable laws, regulations and ordinances), leases,


                                        7
<PAGE>
licenses  and  other  similar  title exceptions or other imperfections of title,
restrictions or encumbrances affecting such Assets that were not incurred in the
borrowing  of  money and, individually and in the aggregate, are not expected to
have  a  Material  Adverse  Effect  or  materially interfere with the use of the
Assets  in  the  ordinary  conduct  of  the  Business.

     "Person"  means  any  natural  person,  corporation,  partnership,  limited
liability  company,  trust,  unincorporated  organization  or  economic  unit,
Governmental  Authority, government instrumentality or other entity of any kind.

     "Purchase Price" has the meaning given in Section 3.1(a).

     "Real  Property"  means  the real property covered by the Seadrift Pipeline
Lease,  the  Leases,  the  Improvements  and  the  Easements.

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

     "Retained  Assets"  means  all  assets of Penn which are not intended to be
transferred  by  Seller  to  Buyer  including  but  not  limited  to:

     (a)     the  four  executive offices located in Houston, Texas, Seal Beach,
California,  El  Segundo,  California,  and  Palm  Desert,  California  and  all
furniture,  fixtures  and  equipment  (including  computers)  located  therein;

     (b)     trademarks  and  service  marks,  trademark  and  service  mark
registrations  and  applications,  trade  names, logos, copyrights and copyright
registrations  and  applications technology, know-how, and processes utilized or
owned  by  Seller;

     (c)     the  Retained  Records;  and

     (d)     all  cash,  accounts  receivable,  securities, notes receivable and
other  assets  owned  by  Seller.

     "Retained  Liabilities"  means  all  liabilities, obligations and Losses of
Penn  relating  to  periods  before  the  Closing  Date  other  than the Assumed
Liabilities  including  but  not  limited  to:

     (a)     all liabilities, obligations or Losses arising out of violations by
Seller  of  Laws,  including  Environmental  Laws;

     (b)     all  liabilities,  obligations  or  Losses  for criminal sanctions,
fines,  penalties  or  assessments imposed at any time by any competent court or
Governmental  Authority with respect to the conduct of the Business or operation
of  the  Assets;

     (c)     all  liabilities,  obligations  or  Losses  arising  from  the
transportation  and  disposal, or arrangement thereof, of Hazardous Materials by
Seller or its agents off the Real Property or otherwise from Hazardous Materials
that  resulted  from the Business that are Released or threatened to be Released
from  any  non-Real  Property;


                                        8
<PAGE>
     (d)     all liabilities, obligations or Losses arising out of the easements
and  rights-of-way  for  the  conduct of the Business or operation of the Assets
prior  to  the  Closing  Date;  and

     (e)     all  obligations, liabilities or Losses (including accounts payable
and  notes  payable) that occur , and require payment, performance or resolution
as  a result of and in the course of operation of the Business and the Assets by
Seller  during  the  period  before  the  Closing  Date.

     "Retained  Records"  has  the  meaning  given  in  subsection  (j)  of  the
definition  of  assets.

     "Rio" has the meaning given in the Recitals.

     "Seadrift  Pipeline  Lease"  means  the  Ella-Brownsville  Pipeline  Lease
Agreement,  dated  as  of  September  1,  1993, by and between Seadrift Pipeline
Corporation,  a  Delaware  corporation  and  Penn,  as  amended  by  the  letter
agreements  dated  May  27,  1999  and  October  26,  1999.

     "Seadrift  Pipeline"  means  the  pipeline covered by the Seadrift Pipeline
Lease.

     "Secured  Debt Facility" means the Amended and Restated Line Letter entered
into between Seller, and RZB Finance LLC, dated as of September 15, 2004, as the
same  may  be  amended,  modified or supplemented and all mortgages, guarantees,
reimbursement  agreements, security agreements and other instruments, agreements
or  documents  entered into or delivered by Seller or any Affiliate of Seller in
connection  therewith.

     "Secured  Debt Lender" means RZB Finance LLC in its capacity as agent under
the  Secured  Debt  Facility.

     "Seller"  has  the  meaning  given  in  the  Preamble.

     "Seller  Group"  means the affiliated group of corporations of which Seller
is  the common parent, which join in the filing of a consolidated federal income
tax  return  (and  any  similar  group  under  state  law).

     "Seller  Plans"  means  all Benefit Plans that are sponsored, maintained or
contributed  to  by  Seller  or  an  Affiliate  of  a  Seller  on  behalf of the
U.S. Business  Employees.

     "Shares" has the meaning given in the Recitals.

     "Subsidiary"  means,  with  respect  to  any  Person,  any  corporation,
partnership,  limited  liability  company,  sociedad  anonima,  sociedad  de
responsabilidad limitada, whether incorporated in the U.S., Mexico or otherwise,
or  other  entity  of  which  a majority of the Equity Interests having ordinary
voting power to elect a majority of the board of directors, board of managers or
other  similar managing body of such corporation, partnership, limited liability
company,  or  other  entity  of  any  kind  are  owned  by  such  Person.

     "Tax"  or  "Taxes"  means  any  U.S.  federal, state or local income, gross
receipts,  value  added, ad valorem, sales and use, employment, social security,
disability,  occupation,  property,


                                        9
<PAGE>
severance,  transfer,  capital  stock,  excise  or  other taxes imposed by or on
behalf  of  any  Taxing  Authority,  including any interest, penalty or addition
thereto.

     "Tax Indemnified Party" has the meaning given in Section 7.4(a).

     "Tax Indemnifying Party" has the meaning given in Section 7.4(a).

     "Tax Items" has the meaning given in Section 7.1.

     "Taxing  Authority"  means,  with respect to any Tax, the U.S. Governmental
Authority  that  imposes  such  Tax,  and  the  agency (if any) charged with the
collection  of  such  Tax  for  such  Governmental  Authority.

     "Tax  Return" means any U.S. return, declaration, report, claim for refund,
or  information return or statement relating to Taxes, including any schedule or
attachment  thereto.

     "Tergas" has the meaning given in the Recitals.

     "Termatsal" has the meaning given in the Recitals.

     "U.S.  Business Employee" means any individual who is an employee of Seller
and  who  is  principally  employed  in the United States in connection with the
Business,  but excluding any employees of Seller who occupy management positions
or  administrative  positions  and who work in any of the Sellers four executive
offices  located  in  Houston,  Texas,  Seal  Beach,  California,  El  Segundo,
California,  or  Palm  Desert,  California

     "U.S.  Continuing  Employee"  has  the  meaning given in Section 6.3(g)(i).

                                   ARTICLE II
                                   THE CLOSING

     SECTION 2.1 Purchase and Sale of the Assets.
                 -------------------------------

               At the Closing, upon the terms and subject to the satisfaction of
the conditions precedent set forth in this Agreement, Seller shall sell, assign,
transfer  and  convey  to  Buyer  and  Buyer shall purchase and acquire from the
Seller,  all  right,  title and interest of Seller in and to the Assets free and
clear  of  any  Liens or Encumbrances (other than Permitted Encumbrances). Buyer
shall  have  the  right  to  designate  one or more of its Affiliates (including
TransMontaigne Partners L.P.) to be the transferee of the Assets.

     SECTION 2.2  Closing.
                  -------
               The  closing  of  the  transaction  contemplated  hereby  (the
"Closing") shall take place at the offices of Buyer in Denver, Colorado at 10:00
a.m.  local  time, on the fifth Business Day after the satisfaction or waiver of
the  conditions set forth in Articles VIII and IX or at such other time and date
as  the  Parties  may  mutually  agree  (the  "Closing  Date").


                                       10
<PAGE>
     SECTION 2.3  Deliveries to Buyer.
                  -------------------
               At  the  Closing,  Seller  shall  deliver,  or  shall cause to be
delivered,  to  Buyer  the  following:

          (a)     the  executed  General Assignment, Conveyance and Bill of Sale
in  the  form  attached  as  Exhibit  B  (the  "General  Conveyance");

          (b)     the  certificates  referred  to  in Sections 8.3, 8.5, 8.6 and
8.10;

          (c)     copies of the consents or approvals referenced in Section 8.8,
8.11,  8.12,  8.14  and  6.3(c)  that  are  required,  in  addition to any other
approvals  obtained  under  Exhibit  A;

          (d)     copies  of the release and termination documents referenced in
Section  8.7;  and

          (e)     the  agreement  required  under  Section  8.13.

     SECTION 2.4  Deliveries to Seller.
                  --------------------
               At the Closing, Buyer shall deliver to Seller the following:

          (a)     a  wire  transfer  of  immediately  available  funds  (to such
accounts  as  Penn  shall have specified to Buyer no later than one Business Day
prior  to  the  Closing)  in an amount equal to the Purchase Price in accordance
with  Section  3.1(a);

          (b)     the  executed  Assumption  Agreement  in the form of Exhibit C
(the  "Assumption  Agreement");

          (c)     the  certificates  referred  to  in  Section 9.3, 9.5 and 9.6;

     SECTION 2.5  Proceedings at Closing.  All  proceedings to be  taken and all
                  ----------------------
documents  to  be  executed and delivered by the Parties at the Closing shall be
deemed  to have been taken and executed simultaneously, and no proceedings shall
be  deemed  taken  nor  any  documents executed or delivered until all have been
taken,  executed  and  delivered.


                                       11
<PAGE>
                                   ARTICLE III
                                 PURCHASE PRICE

     SECTION 3.1  Purchase Price.
                  --------------
     (a)     The  purchase  price, for the Assets, to be paid by Buyer to Seller
at  the  Closing  will  be  $10,100,000  U.S.  (as  adjusted by Section 6.3 (the
"Purchase  Price")).  Seller  may  instruct  Buyer to pay a part of the Purchase
Price  directly  to  the  Secured  Debt  Lender and/or other lenders in order to
obtain  a  release  of  the  Liens  held by the Secured Debt Lender and/or other
lenders,  respectively,  on  the  Assets.

     (b)     In  addition  to the payment of the Purchase Price, at the Closing,
Buyer  (or  its  designated  Affiliate)  shall  assume  the  Assumed Liabilities
pursuant  to the Assumption Agreement. Other than the Assumed Liabilities, Buyer
shall  not  assume  any  Liabilities  or  obligations  of  Seller.

     (c)     Seller  will bear the cost of any documentary, stamp, sales, excise
or  other  Taxes  (if  any)  payable  in respect of the sale and transfer of the
Assets.

     SECTION 3.2  Payment of Consideration and Transfer of Assets at Closing.
                  ----------------------------------------------------------
               At  the Closing, Buyer shall pay the Purchase Price to Seller and
execute and deliver to Seller the Assumption Agreement, and Seller shall execute
and  deliver  to  Buyer  the  General  Conveyance pursuant to which title to the
Assets  is  transferred and conveyed to Buyer or one or more Affiliates of Buyer
designated  by  Buyer.

     SECTION 3.3. Allocation.
                  ----------
               Seller and Buyer are each separately responsible for:

               (a)     preparing  Form  8594  (the  "Form")  Asset  Acquisition
Statement,  under  Section  1060  of  the  Code  and the regulations promulgated
thereunder,  or  any  successor  form;  and

               (b)     allocating the amount of the Purchase Price for the
Assets on the Form.  Seller and Buyer will attempt to reach agreement as to
allocation of the Purchase Price to the Assets.  However, if they are unable to
agree as to the allocation to any asset, each Party will prepare its Form
allocating the portion of the Purchase Price to each such asset upon which they
disagree in the manner as each may determine in its sole discretion without
regard to the manner in which the other Party allocates an amount of the
Purchase Price to such asset on its Form.  Buyer or Buyer's Affiliates, may make
as necessary under applicable Tax Laws, any income tax withholdings deriving
from the sale of the Assets.  Buyer and Seller hereby agree that they will
report the federal, state and other Tax consequences of the transaction
contemplated by this Agreement in a manner consistent with the allocation on
each Party's Form.

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES
                                    OF SELLER

               Seller  represents  and  warrants  to  Buyer as follows as of the
Closing  Date:


                                       12
<PAGE>
     SECTION 4.1 Organization; Power and Authority.
                 ---------------------------------
               (a)     Penn is a corporation duly incorporated, validly existing
and  in  good  standing  under  the  Laws  of  the State of Delaware and is also
qualified  to  transact  business in each jurisdiction in which qualification is
required.

               (b)     Penn  has  all requisite corporate power and authority to
own  and  operate  its  assets  and  properties  and  conduct its businesses and
operations  as  presently  being  conducted.

     SECTION 4.2  Authorizations; Execution  and Validity.  (a)     Except  with
                  ---------------------------------------
respect  to  the transfer to Buyer or an Affiliate of Buyer of the Assets, as of
the date of execution of this Agreement, Seller has all requisite corporate, and
other  power and authority to execute and deliver and to perform its obligations
under this Agreement and to consummate the transaction contemplated hereby.

               (b)     As  of  the  Closing  Date,  and subject to obtaining the
approval  of  the  holders of a majority of the Equity Interests in Penn, Seller
will  have  all requisite corporate, and other power and authority to consummate
the transfer to Buyer or to an Affiliate of Buyer of the Assets.

               (c)     Except  with  respect  to  the  transfer  to  Buyer or an
Affiliate of Buyer of the Assets, as of the date of execution of this Agreement,
the  execution  and  delivery  of  this  Agreement by Seller, the performance by
Seller  of  its  obligations  hereunder,  and  the consummation by Seller of the
transaction  contemplated  hereby  have  been  duly  authorized by all necessary
corporate,  and  other  action  on  the  part  of  Seller.

               (d)     As  of  the  Closing  Date,  and subject to obtaining the
approval  of  the  holders  of  a  majority of the Equity Interests in Penn, the
performance  by  Seller of its obligation to consummate the transfer to Buyer or
to  an  Affiliate  of  Buyer  of  the Assets and the Shares shall have been duly
authorized  by all necessary corporate, partnership and other action on the part
of  Seller.

               (e)     Except  with  respect  to  the  transfer  to  Buyer or an
Affiliate of Buyer of the Assets, as of the date of execution of this Agreement,
this  Agreement  has  been duly and validly executed and delivered by Seller and
constitutes a valid and binding obligation of Seller, enforceable against Seller
in  accordance  with  its terms, except to the extent that enforceability may be
limited  by  bankruptcy,  insolvency, reorganization, moratorium or similar Laws
now  or  hereafter  in  effect  affecting creditors' rights generally or general
principles  of  equity.

               (f)     As  of  the  Closing  Date,  and subject to obtaining the
approval  of  the  holders  of  a majority of the Equity Interests in Penn, this
Agreement  will constitute a valid and binding obligation of Seller with respect
to  the  performance  by  Seller of its obligation to consummate the transfer to
Buyer  or  to  an Affiliate of Buyer of the Assets, and such obligation shall be
enforceable  against  Seller  in  accordance  with  the terms of this Agreement,
except  to  the  extent  that  enforceability  may  be  limited  by  bankruptcy,
insolvency,  reorganization,  moratorium


                                       13
<PAGE>
or similar Laws now or hereafter in effect affecting creditors' rights generally
or  general  principles  of  equity.

     SECTION 4.3  No Conflicts; Consents.
                  ----------------------
               Except  as  set forth on Schedule 4.3 or (in the case of (a), (c)
or  (d)  below)  as  could not be reasonably expected to have a Material Adverse
Effect,  none  of  the  execution  and delivery by Seller of this Agreement, the
performance  by  Seller  of  its  obligations  under  this  Agreement  or  the
consummation  by  Seller  of  the  transaction  contemplated  hereby  will:

               (a)     violate  any  Law  or  Order;

               (b)     violate  the  certificate  of  incorporation or bylaws of
Penn;

               (c)     violate  any  Contract  to  which Seller is a party or by
which  Seller,  or  its  properties  are  bound;  or

               (d)     require  any consent from or filing with any Governmental
Authority  or  any  consent  from  any  other  Person.

     SECTION 4.4  Litigation; Orders.
                  ------------------
               Schedule  4.4 lists all Legal Proceedings pending or, to Seller's
Knowledge,  threatened  against  Seller  and  arising  out of or relating to the
Business  and the Assets.  There are no Legal Proceedings pending against Seller
or,  to Seller's Knowledge, threatened against Seller that question the validity
of  this  Agreement  or  any action taken or to be taken by Seller in connection
with,  or  which  seek  to enjoin or obtain monetary damages in respect of, this
Agreement  or the consummation by Seller of the transaction contemplated hereby.

     SECTION 4.5  Environmental Matters.
                  ---------------------
               Except as set forth in Schedule 4.5 or as could not be reasonably
expected  to  have  a  Material  Adverse  Effect:

               (a)     the operations and activities of Seller in respect of the
Business  and  the  Assets  are  in compliance with all applicable Environmental
Laws;

               (b)     Seller (in respect of the Business and the Assets) is not
subject  to  any  existing,  pending or, to Seller's Knowledge, threatened Legal
Proceedings  under  any  Environmental  Law;

               (c)     all  Permits, if any, required to be obtained or filed by
Seller  under  any  Environmental  Law  in connection with the Business or their
respective  properties  and the Assets have been obtained or filed and are valid
and  currently  in  full  force  and  effect;

               (d)     there  has been no Release created or caused by Seller of
any  Hazardous  Material  into the environment by Seller or, to the Knowledge of
Seller,  in  connection  with  the  Business  and  the  Assets;

               (e)     no  Environmental  Condition  created or caused by Seller
exists  at  any  of  the  Real  Property;  and


                                       14
<PAGE>
               (f)     Seller  is  not  subject  to  liability  under applicable
Environmental  Laws  arising  in connection with the transportation and off-site
disposal  or  arrangement  thereof  of  any Hazardous Materials by Seller or any
agent  of  Seller  from Hazardous Materials that resulted from the Business that
are  Released  or  threatened  to  be  Released  from  any  non-Real  Property.

     SECTION 4.6  Employee and Benefit Matters.
                  ----------------------------

               (a)     Schedule  4.6(a)  sets forth a true, correct and complete
list,  as  of the date set forth therein, of all U.S. Business Employees and the
name  of  each  U.S.  Business  Employee's  employer.  The list described in the
preceding  sentence  shows each such employee's name, job title, hire date, work
location,  employer's name, accrued and unused vacation, and current base salary
or  base wages.  No changes in such base salary or base wages for such employees
have  been  made,  promised or authorized since December 31, 2004.  There are no
loans  or  other  obligations  payable  or owing by Seller to any such employee,
except  salaries,  wages,  bonuses  and  salary  advances  and  reimbursement of
expenses  incurred  and  accrued in the ordinary course of business, nor are any
loans or debts payable or owing by any such individuals to Seller nor has Seller
guaranteed  any  of  such  individual's  respective  loans  or  obligations.

               (b)     With respect to the U.S. Business Employees:

                    (i)  none  are  represented  by  a union or other collective
                         bargaining  entity;

                    (ii) there  has not occurred, nor, to Seller's Knowledge has
                         there  been  threatened,  a  labor  strike, request for
                         representation,  work  stoppage  or lockout in the past
                         five  years;

                   (iii) Seller  has  not received written notice of any charges
                         before  any  Governmental Authority responsible for the
                         prevention of unlawful employment practices and, to the
                         Knowledge  of  Seller,  no such charges are threatened;

                    (iv) Seller  has  not  received  written notice of any claim
                         relating  to  employment  or loss of employment and, to
                         the Knowledge of Seller, no such claims are threatened;

                    (v)  Seller  has  not  received  written  notice  of  any
                         investigation  by  a Governmental Authority responsible
                         for  the enforcement of labor or employment regulations
                         and,  to  Seller's  Knowledge, no such investigation is
                         threatened;  and

                    (vi) no  consent  of  any  union,  works  council  or  other
                         employee  group  is  required  for,  and  no  agreement
                         restricts  the  execution  of  this  Agreement,  the
                         consummation  of  any  of  the transaction contemplated
                         hereby,  or  the closing or relocation of any facility.


                                       15
<PAGE>
               (c)     Seller  does not sponsor, maintain, contribute or have an
obligation  to  contribute  to  any  Benefit Plan.  Schedule 4.6(c) sets forth a
true, correct and complete list, as of the date hereof, of all Seller Plans.  On
or  before  the date hereof, Seller has delivered to Buyer copies of each of the
Seller  Plans  and,  to  the  extent  applicable,  the  most recent summary plan
description  relating  to  such  plans.

               (d)     With  respect  to  any  employee benefit plan (within the
meaning  of  Section 3(3) of ERISA, that is sponsored, maintained or contributed
to,  or  has been sponsored, maintained or contributed to within six years prior
to  the  date  of  this  Agreement, by Seller or any ERISA Affiliate of Seller):

                    (i)  no  withdrawal liability, within the meaning of Section
                         4201  of  ERISA,  has  been  incurred, which withdrawal
                         liability  has  not  been  satisfied;

                    (ii) no  liability  to  the  Pension  Benefit  Guaranty
                         Corporation has been incurred by any such entity, which
                         liability  has  not  been  satisfied;

                   (iii) no  accumulated  funding  deficiency,  whether  or  not
                         waived,  within  the meaning of Section 302 of ERISA or
                         Section  412  of  the  Code  has  been  incurred;

                    (iv) all contributions (including installments) to such plan
                         required by Section 302 of ERISA and Section 412 of the
                         Code  have  been  timely  made;  and

                    (v)  no  condition  exists  or  event  or  transaction  has
                         occurred  with  respect  to  any  such plan which would
                         reasonably be expected to result in Buyer incurring any
                         liability,  fine  or  penalty.

     SECTION 4.7  Taxes.
                  -----
               Except as set forth on Schedule 4.7 or as could not reasonably be
expected  to  have  a  Material  Adverse  Effect:

               (a)     all  Tax  Returns  that  are  required  to be filed on or
before the Closing Date by Seller have been duly and timely filed;

               (b)     all  Taxes  that  are shown to be due on such Tax Returns
have been timely paid in full or fully accrued;

               (c)     all  withholding Tax requirements imposed on Seller  have
been  satisfied  in  full  in  all  respects,  except for amounts that are being
contested in good faith (which contested amounts are disclosed on Schedule 4.7);

               (d)     Seller  does  not have in force any waiver of any statute
of  limitations  in  respect of Taxes or any extension of time with respect to a
Tax  assessment  or


                                       16
<PAGE>
deficiency;

               (e)     there  are  no  pending  proposed  deficiencies  or other
written  claims  for  unpaid  Taxes  of  Seller;  and.

               (f)     that  the tangible personal property being transferred to
Buyer  pursuant  to  this Agreement constitutes the entire operating assets of a
separate  branch, division, or identifiable segment of a business as such phrase
is  used  in Sec. 151.304(b)(2) of the Texas Tax Code and Sec. 3.316(d) of Title
34  of  the  Texas  Administrative Code.  Therefore, Buyer's acquisition of such
property  (excluding motor vehicles) is exempt from Texas sales and use taxes as
an  occasional  sale  pursuant  to  Sec.  151.304  of  the  Texas  Tax  Code and
Sec.3.316(d) of Title 34 of the Texas Administrative Code.

     SECTION 4.8  Title to Assets.
                  ---------------
               The  delivery  by  Seller  to Buyer at the Closing of the General
Conveyance  in accordance with the terms of this Agreement will vest in Buyer on
the Closing Date good and indefeasible title to the Assets free and clear of all
Encumbrances  other  than  Permitted  Encumbrances.

     SECTION 4.9  Assigned Contracts.
                  ------------------
               Each  Assigned  Contract to which Seller is a party in connection
with  the  conduct  of  the  Business or by which any of the Assets are bound or
encumbered  by  or  subject  to (excluding the secured debt documents), and each
Assigned  Contract  to which Seller is a party or by which any asset or property
of Seller is bound or encumbered by or subject to, is described on Schedule 4.9.
Seller  has  provided or made available to Buyer true and correct copies of each
Assigned  Contract identified on Schedule 4.9 and each amendment thereto. Except
as  described  on  Schedule  4.9,  Seller  is  not  in  breach or default in the
performance of its duties and obligations under any Assigned Contract that could
reasonably be expected to have a Material Adverse Effect. To Seller's Knowledge,
none  of the other parties to any Assigned Contract described on Schedule 4.9 is
in breach or default in the performance of its duties and obligations under such
Assigned  Contract  that could reasonably be expected to have a Material Adverse
Effect and none of such Assigned Contracts has been terminated or revoked by any
such  other  party.


                                       17
<PAGE>
     SECTION 4.10  Sufficiency of Assets.
                   ---------------------
               The Assets to be conveyed and transferred to Buyer at the Closing
shall  constitute all of the tangible and intangible property, rights, benefits,
privileges, assets and entitlements that are necessary for Buyer to continue the
Business  after  the Closing on substantially the same basis as the Business has
been  conducted  over  the 12 month period preceding the Closing Date; assuming,
however,  that  Buyer  provides  the  necessary  managerial,  administrative and
accounting  personnel and systems to oversee and administer the operation of the
Business.

     SECTION 4.11  Insurance.
                   ---------
               Schedule  4.11  lists  all  current  insurance  policies that are
maintained  by Seller for the benefit of the Business and the Assets.  Except as
listed  on  listed on Schedule 4.11, all of the policies listed on Schedule 4.11
are  in  full  force  and  effect,  all premiums due thereon have been paid, and
Seller  has  complied  in  all  material  respects  with  the provisions of such
policies.

     SECTION 4.12  Permits; Compliance with Applicable Law.
                   ---------------------------------------

               Except as set forth in Schedule 4.12:

               (a)     Seller holds all Permits necessary for the lawful conduct
of  the  Business  and  operation  of the Assets under and pursuant to, and have
complied  with  and  are not in default under or in violation of, any applicable
Law, including, without limitation, regulations of the Texas Railroad Commission
and  the  Federal  Energy  Regulatory  Commission  except in each case where the
failure  to  hold  such  Permit  or  such  non-compliance  or  default could not
reasonably  be  expected  to  cause  a  Material  Adverse  Effect.  To  Seller's
Knowledge,  the  Business and operation of the Assets are not being conducted in
violation  of  any  applicable  Law,  Permit  or  any Order, except for any such
violation  which  could  not  reasonably  be expected to have a Material Adverse
Effect.

               (b)     Seller has not received any notice or other communication
from  any  Governmental Authority asserting (i) any violation of Law arising out
of  the  conduct of the Business and operation of the Assets, (ii) any violation
of  or  failure  to comply with the term or requirement of any Permits, or (iii)
any  revocation,  withdrawal,  suspension,  cancellation,  termination  or
modification  of  any  Permit,  except  for  violations,  failures  to  comply,
revocations,  withdrawals,  suspensions,  cancellations,  terminations  or
modifications  which could not reasonably be expected to have a Material Adverse
Effect.

     SECTION 4.13  Absence of Certain Changes.
                   --------------------------
               Except  as  set  forth on Schedule 4.13, since December 31, 2004,
there  has  not  been  any:

               (a)     damage to or destruction or loss of any material asset or
property  of  Seller,  including,  without  limitation,  the  Assets;


                                       18
<PAGE>
               (b)     sale,  lease  or  disposition  of  any  material asset or
property  of  the  Seller, including, without limitation, the Assets, other than
the  sale  of  LPG  in  the  ordinary  course  of  the  Business;

               (c)     cancellation  or  waiver  of  any  claims  or rights with
respect  to  the  Business  or  Assets  in  excess  of  $20,000;

               (d)     material  change in the accounting methods used by Seller
except  as  required by Law, Order or generally accepted accounting practices in
the  United  States;

               (e)     single capital expenditure by Seller in excess of $20,000
for  additions  to  property  or  equipment,  including, without limitation, the
Assets,  or  aggregate  capital  expenditures  in  excess  of  $40,000;

               (f)     termination  or cancellation of a Contract that, prior to
such  termination  or cancellation, involved the payment to or receipt by Seller
or  any  Affiliate  of  Seller  of  amounts  in  excess  of  $100,000;

               (g)     other  event  or  occurrence  (whether  or not covered by
insurance)  that  has resulted in a change that has a Material Adverse Effect or
could  reasonably  be expected to result in a change that has a Material Adverse
Effect;  or

               (h)     legal  commitment  by  Seller  to  any  of the foregoing.

     SECTION 4.14  Fees.
                   ----

               Except as set out in Schedule 4.14, Seller has not paid or become
obligated to pay any fee or commission to any broker, finder or intermediary  in
connection  with  the  transaction  contemplated  hereby.

     SECTION 4.15  Disclaimer.
                   ----------
               Except  to  the  extent  expressly  set  forth in this Agreement,
Seller  makes  no  representations  or  warranties  whatsoever (whether express,
implied,  by  statute,  common law or otherwise) and disclaims all liability and
responsibility  for any other representation, warranty, statement or information
made  or  communicated  (orally  or  in writing) to Buyer.  Without limiting the
generality  of the foregoing, SELLER EXPRESSLY DISCLAIMS AND NEGATES ANY IMPLIED
OR  EXPRESS  WARRANTY  OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE
WITH  RESPECT  TO  THE  ASSETS.


                                       19
<PAGE>
                                    ARTICLE V
                         REPRESENTATIONS AND WARRANTIES
                                    OF BUYER

     Buyer  represents and warrants to Seller as follows as of the Closing Date:

     SECTION 5.1  Organization; Power and Authority.
                  ---------------------------------
               Buyer  is  a  corporation duly organized, validly existing and in
good  standing under the Laws of the State of Delaware.  Buyer has all requisite
corporate  power  and authority to own and operate its assets and properties and
conduct  its  business  and  operations  as  presently  being  conducted.

     SECTION 5.2  Authorizations; Execution and Validity.
                  --------------------------------------

               (a)     As  of  the  date  of  execution  of  this Agreement, the
execution  and  delivery of this Agreement by Buyer, the performance by Buyer of
its  obligations  under  this  Agreement  and  the  consummation by Buyer of the
transaction  contemplated  hereby  have  been  duly  authorized by all necessary
corporate  action  on  the  part  of  the  Buyer.

               (b)     This  Agreement  upon  being  executed  and  delivered by
Buyer,  constitutes  a  valid and binding obligation of Buyer and is enforceable
against  Buyer  in  accordance  with  its  terms,  except  to  the  extent  that
enforceability  may  be  limited  by  bankruptcy,  insolvency,  reorganization,
moratorium  or  similar  Laws  now  or  hereafter in effect affecting creditors'
rights  generally  or  general  principles  of  equity.

     SECTION 5.3  No Conflicts; Consents.
                  ----------------------
               Except  as  set  forth in Schedule 5.3, none of the execution and
delivery by Buyer of this Agreement, the performance by Buyer of its obligations
under  this  Agreement  or  the  consummation  by  Buyer  of  the  transaction
contemplated  hereby  will:

               (a)     violate  any Law or Order, except as would not materially
adversely  affect  the  ability  of  Buyer  to perform its obligations under and
consummate  the  transaction  contemplated  by  this  Agreement;

               (b)     violate  the  certificate  of  incorporation,  by-laws or
other  corporate  governance  instruments  of  Buyer;

               (c)     require  any consent from or filing with any Governmental
Authority, or any consent from any other Person , except as would not materially
adversely  affect  the  ability  of  Buyer  to perform its obligations under and
consummate  the  transaction  contemplated  by  this  Agreement;  or

               (d)     violate  or breach any material contract of Buyer, except
as  would  not  material  adversely  affect  the ability of Buyer to perform its
obligations under and consummate the transaction contemplated by this Agreement.


                                       20
<PAGE>
     SECTION 5.4  Litigation.
                  ----------
               There  are no Legal Proceedings pending or, to Buyer's knowledge,
threatened  against  Buyer  that  question the validity of this Agreement or any
action taken or to be taken by Buyer in connection with, or which seek to enjoin
or  obtain monetary damages in respect of, this Agreement or the consummation by
Buyer  of  the  transaction  contemplated  hereby.

     SECTION 5.5  Investment Intent; Sophisticated Buyer.
                  --------------------------------------
               Buyer:

               (a)     is  an  informed  sophisticated  Person  with  sufficient
knowledge and experience in investment and financial matters so as to be capable
of  evaluating  the  risks  and  merits  of  its  purchase  of  the  Assets;

               (b)     acknowledges  that  the  purchase  of  the  Assets  are
consistent  with  its  general  investment  objectives;

               (c)     understands  that  the  purchase of the Assets involves a
high  degree  of  risk;

               (d)     is  financially  able to bear the risks of purchasing the
Assets;

               (e)     has  had  an  opportunity  to  discuss  the  business,
management and financial affairs of the Business and the Assets with Seller and,
in entering into this Agreement, is relying upon the representations, warranties
and other terms and provisions of this Agreement and on its informed conclusions
of  its  own  investigations  of  the  Business  and  the  Assets.

     SECTION 5.6  Financial Ability.
                  -----------------
               Buyer has, and will have as of the Closing Date, sufficient funds
with which to pay the Purchase Price and consummate the transaction contemplated
by  this  Agreement.

     SECTION 5.7  Fees.
                  ----
               Buyer  has  not  paid  or  become  obligated  to  pay  any fee or
commission  to  any  broker,  finder  or  intermediary  in  connection  with the
transaction  contemplated  hereby.

     SECTION 5.8  Disclaimer.
                  ----------
               Except to the extent expressly set forth in this Agreement, Buyer
makes  no representations or warranties whatsoever (whether express, implied, by
statute,  common  law,  or  otherwise)  and  disclaims  all  liability  and
responsibility  for any other representation, warranty, statement or information
made  or  communicated  (orally  or  in  writing)  to  Seller.

                                   ARTICLE VI
                                    COVENANTS

     SECTION  6.1  Covenants  of  Seller.
                   ---------------------


                                       21
<PAGE>
               Seller covenants and agrees that:

               (a)     Conduct  of  Business.  Until  the  Closing  Date, Seller
                       ---------------------
shall  (unless  Buyer  shall  otherwise  consent  in writing or as necessary for
Seller  to  carry  out its obligations under the Assigned Contracts set forth on
Schedule  4.9,  required  by  Law  or  Order,  or  as  otherwise  specifically
contemplated  by  this  Agreement):

                    (i)  use  its commercially reasonable efforts to operate the
                         Assets  and Business in the usual, regular and ordinary
                         manner  consistent  with  past  practice, and use their
                         commercially  reasonable  efforts  to  preserve  their
                         present business operations, organization and goodwill,
                         including,  without  limitation,  those  involving  the
                         Business;

                    (ii) maintain  books,  accounts  and  records  in the usual,
                         regular and ordinary manner, on a basis consistent with
                         prior  years,  and comply in all material respects with
                         all  contractual  and  other  obligations,  including,
                         without  limitation,  those  involving  the  Assigned
                         Contracts;

                   (iii) comply  in  all material  respects  with all applicable
                         Laws  to  which  they  are  subject;

                    (iv) not  create,  incur  or  assume  any  debt,  except  in
                         connection with the Secured Debt Facility, for borrowed
                         money  that  is secured by a Lien on any of the Assets;

                    (v)  not  make  any material election with respect to Taxes;

                    (vi) not amend or modify the organizational documents of the
                         Seller;

                   (vii) not  amend  any of the Contracts referenced on Schedule
                         4.9 or enter into any material Contract relating to the
                         Business;

                  (viii) not  release  or  waive any material rights or benefits
                         relating  to  the  Business  or  the  Assets;  or

                    (ix) not  agree  to take any action or actions prohibited by
                         any  of  the  foregoing  clauses  (i)  through  (viii).

               (b)     Commercially  Reasonable  Efforts.  Between  the  date of
                       ---------------------------------
this Agreement and the Closing Date, Seller will use its commercially reasonable
efforts  to  cause  the  conditions  set  forth  in Article VIII to be satisfied
including obtaining consents to assignment, in a form that is mutually agreed to
by  both  Parties, from the counterparties under each Contract comprising a part
of  the  Assets.

          (c)     No  Solicitation.
                  ----------------

               (i)     From  and  after  the  date  of  this Agreement until the
earlier of the termination of this Agreement in accordance with its terms or the
Closing,  the  Seller  and  its


                                       22
<PAGE>
Affiliates  shall  not,  directly  or indirectly, through any officer, director,
employee,  financial  advisor,  representative  or  agent:

               (A)  solicit,  initiate,  or encourage any inquiries or proposals
that constitute, or could reasonably be expected to lead to, a proposal or offer
for  (w)  a  transaction  pursuant  to  which  any person or entity (or group of
persons  or  entities) (a "Third Party") other than the Buyer or its Affiliates,
may  acquire  the Assets , (x) a transaction pursuant to which a Third Party may
acquire more than 50% of the outstanding Equity Interests of the Seller pursuant
to a tender offer or exchange offer or otherwise, (y) a merger or other business
combination  involving  the Seller pursuant to which any Third Party may acquire
more than 50% of the outstanding Equity Interests of the Seller or of the entity
surviving  such  merger  or  business  combination, or (z) any other transaction
pursuant  to  which  any Third Party may acquire control of assets of the Seller
having  a  fair  market value equal to more than 50% of the fair market value of
all  the  assets of the Seller immediately prior to such transaction, other than
the  transaction  contemplated by this Agreement (any of the foregoing inquiries
or  proposals being referred to in this Agreement as an "Acquisition Proposal"),

               (B)  engage in negotiations or discussions concerning, or provide
any  non-public  information  to  any  Third  Party relating to, any Acquisition
Proposal,  or

               (C)  agree  to  or  recommend any Acquisition Proposal; provided,
                                                                       --------
however,  that  nothing  contained in this Agreement shall, so long as Seller is
-------
not  in material breach of its obligations under this Section 6.3(c) and subject
to  the  provisions of Section 6.1 (c) (iii), prevent the Seller or its Board of
Directors  from:

               (1)  furnishing  information  to, or entering into discussions or
               negotiations  with,  any  Third  Party  in  connection  with  an
               unsolicited  bona  fide  written  Acquisition  Proposal  (an
               "Unsolicited  Acquisition  Proposal")  by  such  Third  Party  or
               recommending  an  Unsolicited Acquisition Proposal to the holders
               of  the Equity Interests of the Seller, if and only to the extent
               that:

                    (I)  the  Board  of Directors of the Seller believes in good
                    faith  (after  consultation  with,  and receiving an opinion
                    from, a financial advisor) that such Unsolicited Acquisition
                    Proposal  is  reasonably  likely  to result in a transaction
                    more favorable to the holders of the Equity Interests of the
                    Seller, from a financial point of view, than the transaction
                    contemplated  by  this  Agreement  (any  such more favorable
                    Unsolicited  Acquisition  Proposal being referred to in this
                    Agreement  as  a  "Superior  Proposal")  and  the  Board  of
                    Directors  determines  in good faith after consultation with
                    outside  legal  counsel  that  such  action  is advisable in
                    accordance  with  the  fiduciary  duties  of  the  Board  of
                    Directors  to  holders  of  the  Equity  Interests  under
                    applicable  law,  and

                    (II)  prior  to  furnishing  non-public  information  to, or
                    entering  into  discussions or negotiations with, such Third
                    Party,  such  Board


                                       23
<PAGE>
                    of  Directors  receives  from  such  Third Party an executed
                    confidentiality  agreement  with  terms no less favorable to
                    the  Seller  than  those  contained  in  the confidentiality
                    agreement  between  the  Buyer  and the Seller dated June 6,
                    2005.

               (2)  complying  with  Rule  14d-9 and 14e-2 promulgated under the
               Securities  Exchange  Act  of  1934  or  other  applicable law or
               regulation  with  regard  to an Unsolicited Acquisition Proposal;
               provided,  however,  that  neither  the  Seller  nor its Board of
               Directors  shall,  except  as  permitted by paragraph (1) of this
               Section 6.1(c)(i), propose to approve or recommend an Unsolicited
               Acquisition  Proposal,  or

               (3)  entering into an agreement to consummate a Superior Proposal
               (provided  that  the  Seller shall have terminated this Agreement
               pursuant  to  Section  10.1(e)).

               (ii)  The  Seller  will  immediately  cease  any and all existing
activities,  discussions or negotiations with any parties conducted prior to the
execution  of  this  Agreement  of the nature described in Section 6.1(c)(i) and
will use reasonable efforts to obtain the return of any confidential information
furnished  to  any  such  parties.

               (iii) The Seller shall notify the Buyer promptly after receipt by
the  Seller of any Unsolicited Acquisition Proposal or any request for nonpublic
information in connection with an Unsolicited Acquisition Proposal or for access
to  the  properties,  books  or  records  of  the Seller by any Third Party that
informs  the  Seller  that it is considering making, or has made, an Unsolicited
Acquisition  Proposal.


                                       24
<PAGE>
     SECTION 6.2  Covenants of Buyer.
                  ------------------
               Buyer  covenants  and  agrees  that:

               (a)     Return  of  Information.  In  the event of termination of
                       -----------------------
this  Agreement,  Buyer  will  return  or  cause  to  be  returned to Seller all
documents  and  other  materials  obtained  from,  or  on  behalf  of, Seller in
connection  with  the transaction contemplated hereby and will keep confidential
any  such  information in accordance with the terms of the Buyer Confidentiality
Agreement;

               (b)   Seller's  Access  to Documents; Preservation  of  Books and
                     -----------------------------------------------------------
Records.
-------

                    If  the  Closing  occurs:

               (i)  For a period of three years from the Closing Date, (A) Buyer
                    shall not dispose of or destroy any of the Books and Records
                    of  Seller  transferred to Buyer pursuant to this Agreement,
                    without  first  offering  to turn over possession thereof to
                    Seller by written notice to Seller at least 90 days prior to
                    the  proposed  date  of such disposition or destruction, and
                    (B)  Buyer  shall  allow Seller and its agents access to all
                    Books  and  Records (provided, however, that any such access
                    or  copying  shall be had or done in such a manner so as not
                    to  unduly  interfere  with  the  normal  conduct of Buyer's
                    businesses);

               (ii) At  least  90  days prior to the completion of the aforesaid
                    period,  Seller  may  advise Buyer in writing whether Seller
                    desires  to  obtain possession of any of the documents which
                    were delivered to Buyer at Closing. To the extent that Buyer
                    has  decided to dispose of or destroy such documents and not
                    continue to retain such documents pursuant to the provisions
                    of  Section  6.2 (b)(i), Seller shall be entitled to receive
                    possession of such documents upon its request as provided in
                    this  subparagraph;

              (iii) The  three  year  period  referred  to  in Section 6.2(b)(i)
                    shall  be extended in the event that Seller advises Buyer in
                    writing  that  any  Legal  Proceeding  or  investigation  is
                    pending  or threatened at the termination of such three year
                    period  and  such  extension  shall  continue until any such
                    Legal  Proceeding  or investigation has been settled through
                    judgment  or  otherwise  and/or  is  no  longer  pending  or
                    threatened.

               (c)     Commercially  Reasonable  Efforts.  Between  the  date of
                       ---------------------------------
this  Agreement and the Closing Date, Buyer will use its commercially reasonable
efforts  to  cause  the  conditions  set  forth  in  Article IX to be satisfied.


                                       25
<PAGE>
     SECTION 6.3  Other Covenants.
                  ---------------
               (a)     Tax Proration.  Ad valorem and real and tangible personal
                       -------------
property  taxes  with  respect  to the Assets for the calendar year in which the
Closing  occurs  shall  be  prorated  between Seller and Buyer as of the Closing
Date.  If  the  amount  of  such Taxes with respect to any of the Assets for the
calendar  year  in  which  the  Closing occurs has not been determined as of the
Closing  Date,  then  the  Taxes  with  respect to such Assets for the preceding
calendar  year  shall  be used to calculate such prorations. Seller's portion of
the  prorated  Taxes  shall be applied as a credit against (thus a reduction of)
the  Purchase  Price  due  from  Buyer  at  the  Closing.

               (b)     Intentionally Deleted.
                       ---------------------

               (c)     Assignments Requiring Consents.  To the extent that any
                       ------------------------------
Contract, Permit, Easement or Lease is not assignable by the terms thereof or
consent to the assignment thereof cannot be obtained by Seller prior to Closing,
then if Buyer elects to proceed with the Closing without obtaining such consent,
such Contract, Permit, Easement or Lease shall be held by Seller in trust for
Buyer and shall be performed by Buyer in the name of the Seller and all benefits
and obligations derived thereunder shall be for the account of Buyer and at no
cost to Buyer; provided, where entitlement of Buyer to such Contract, Permit,
Easement or Lease is not recognized by any third Person, Seller shall at the
request of Buyer and at Buyer's expense and enforce at no cost to Buyer in a
reasonable manner and under the direction and control of Buyer, any and all
rights of Seller against such third Person or otherwise available under the
same.

               (d)     Removal of Seller's Name.  Within 90 days after the
                       ------------------------
Closing Date, Buyer shall remove or cause to be removed the name Penn Octane or
any variations and derivations thereof or logos relating thereto from the Assets
(including all pipeline markers) and Buyer shall not thereafter make any use
whatsoever of such names or logos.

               (e)   Minimum Requirement.
                     -------------------

               (i)  The  Purchase  Price has been determined based on the volume
                    and  quality  of (A) the LPG inventory comprising the Assets
                    to be transferred to Buyer at the Closing and (B) the LPG in
                    the  storage  operated  by the Companies, being no less than
                    the minimum levels and standards for LPG inventory set forth
                    on  Schedule  6.3(e)(i)  (the  "Minimum  Requirement").

               (ii) To  determine  whether the Minimum Requirement is satisfied,
                    Seller  and  Buyer  shall  cause the procedures described in
                    Schedule  6.3(e)(i)  to  be  implemented  within  or  by the
                    periods  of  time  indicated  in such Schedule 6.3(e)(i). If
                    pursuant  to  Schedule  6.3(e)(i)  it is determined that the
                    Minimum  Requirement  was  not  satisfied  as of the Closing
                    Effective  Time,  then  Seller  shall  pay  to  Buyer  the
                    Deficiency Amount as described in and determined pursuant to
                    such  Schedule  6.3(e)(i), such payment to be made by Seller
                    to Buyer within five Business Days of such determination. If
                    pursuant  to  Schedule  6.3(e)(i)  it is determined that the
                    Minimum


                                       26
<PAGE>
                    Requirement  was  exceeded as of the Closing Effective Time,
                    then  Buyer  shall  pay  to  Seller  the  Excess  Amount  as
                    described  in  and  determined  pursuant  to  such  Schedule
                    6.3(e)(i), such payment to be made by Buyer to Seller within
                    five  Business  Days  of  such  determination.

               (f)  Environmental  Inspection.
                    -------------------------

               (i)  Until  five Business Days prior to Closing, Buyer shall have
                    the right to investigate, inspect, audit, study and test the
                    Real Property, including the soil, groundwater and all other
                    physical  features,  for  the  existence  of  Environmental
                    Conditions  and  violations  of  Environmental  Laws  (the
                    "Environmental  Audit").  The  scope, sequence and timing of
                    the  Environmental  Audit shall be at the sole discretion of
                    Buyer. The cost and expense of the Environmental Audit shall
                    be  born  by  Buyer.

               (ii) Buyer  may  confer  with Governmental Authorities and review
                    and  copy  all  records  of  Governmental  Authorities  with
                    respect  to  the  Real  Property  in  connection  with  the
                    Environmental  Audit.

              (iii) If  the Environmental Audit reveals, or at any time prior to
                    Closing  Buyer  otherwise becomes aware of, the existence of
                    any  Environmental  Condition  or violation of Environmental
                    Law  which  Buyer,  in  its sole discretion, is unwilling to
                    accept,  Buyer  shall  have  the  right  and  option  to:

                    (A)  allow  Seller  additional  time  prior  to  Closing (as
                    determined  by  Buyer)  in  which  to  undertake  actions
                    sufficient,  in  the reasonable judgment of Buyer, to remedy
                    any  such  Environmental  Condition  or  violation  of
                    Environmental  Law,  in  which  case  the  Closing  shall be
                    postponed  by  such  additional  time  period;

                    (B)  attempt  to  negotiate  with  Buyer  a reduction in the
                    Purchase  Price  so  as  to  compensate  Buyer for costs and
                    damages  which may be associated with any such Environmental
                    Condition  or  violation  of  Environmental  Law;  or

                    (C) attempt to negotiate with Buyer any other agreement with
                    respect  to any such Environmental Condition or violation of
                    Environmental  Law.  Buyer's  obligation  to  close  the
                    transaction  contemplated  by  this  Agreement  shall  be
                    conditioned  upon  such  Environmental  Condition(s)  and
                    violation(s)  of  Environmental  Law being fully remedied by
                    the  Closing or Buyer and Seller having reached an agreement
                    that  permits  the Closing to occur without such full remedy
                    having  been  completed  by  the  Closing.


                                       27
<PAGE>
               (iv) If  Seller  is  unable  or  unwilling  to  remedy  any  such
                    Environmental Condition or violation of Environmental Law or
                    if  Seller  and  Buyer  are  unable to reach an agreement as
                    contemplated under subsections (B) or (C) above, then either
                    Buyer  or  Seller  may  terminate this Agreement without any
                    further  obligation  or  liability  of  any  Party.

               (g)  Employee  and  Benefit  Matters.
                    -------------------------------

               (i)  Seller  shall  make  available  to  Buyer  all U.S. Business
                    Employees,  as  set  forth  on  Schedule  4.6(a), to discuss
                    potential  employment  with  Buyer  or an Affiliate of Buyer
                    (such  entity  that makes employment offers being the "Buyer
                    Employer").  Seller shall provide Buyer with an updated list
                    of  the  U.S. Business Employees within five (5) days of the
                    date  upon  which  any  change  therein  has occurred. On or
                    before  the  Closing  Date,  but effective as of the Closing
                    Date  and  conditioned  upon  the occurrence of the Closing,
                    Buyer  shall  cause  the  Buyer  Employer  to make offers of
                    employment  to  the U.S. Business Employees who are employed
                    by Seller or an Affiliate of Seller immediately prior to the
                    Closing  Date  and who are selected by the Buyer Employer in
                    its  sole  discretion upon written notice to Seller at least
                    five  days  prior  to  the  Closing  Date.  The  terms  and
                    conditions  of  each  such  offer  of employment shall be on
                    terms  and  conditions  determined by the Buyer Employer, in
                    its sole discretion, that are consistent with the provisions
                    of  this  Section  6.3(g). All offers of employment shall be
                    subject  to  the  Buyer  Employer's  policies  concerning
                    background  and  security  checks  and  drug/substance abuse
                    testing.  As  used  in  this  Agreement,  the  term  "U.S.
                    Continuing  Employee"  means each U.S. Business Employee who
                    accepts  an  offer  of employment from the Buyer Employer as
                    provided  in  the preceding provisions of this paragraph and
                    reports  to  work  and  commences  active duty for the Buyer
                    Employer.  The  "Hire  Date" for each U.S. Business Employee
                    who  accepts  an  employment  offer  from the Buyer Employer
                    pursuant  to  the  terms  of this paragraph and who actually
                    becomes  employed  by  the Buyer Employer in accordance with
                    such offer shall be the Closing Date, except with respect to
                    those individuals to whom employment offers are made and (A)
                    who  are  not  Actively  Employed as of the Closing Date, in
                    which  case  the Hire Date shall be the date upon which such
                    individual is able to and does commence active duty with the
                    Buyer Employer, or (B) with respect to whom Buyer and Seller
                    have  agreed  will  have  a  later  Hire  Date.

               (ii) For  a  period  of  not  less than one year beginning on the
                    Closing  Date,  Buyer  shall  cause  the  Buyer  Employer to
                    provide  the U.S. Continuing Employees while employed by the
                    Buyer  Employer


                                       28
<PAGE>
                    during  such  period  with  employee  benefits  on  a  basis
                    substantially  similar  to  those  provided  to  similarly
                    situated employees of the Buyer Employer. From and after the
                    applicable  Hire  Date,  for  purposes of (x) eligibility to
                    participate  in,  and  vesting  under,  the employee benefit
                    plans that are intended to be qualified under Section 401 of
                    the  Code  and  that  are  maintained after such date by the
                    Buyer Employer and (y) eligibility and benefit determination
                    under  the  vacation  policies  maintained  by  the  Buyer
                    Employer,  Buyer shall cause the Buyer Employer to recognize
                    each  U.S.  Continuing  Employee's  years  of  service  for
                    corresponding purposes that were credited prior to such U.S.
                    Continuing  Employee's  Hire  Date  under  the corresponding
                    Seller  Plans  in  which  the  U.S.  Continuing  Employee
                    participated immediately prior to the Closing Date. Promptly
                    after  each  U.S.  Continuing  Employee's  Hire Date, Seller
                    shall  provide written notice to Buyer of such prior service
                    credit.

              (iii) On  or  before  each  U.S. Continuing  Employee's Hire Date,
                    Seller  shall (A) take any necessary action to fully vest as
                    of such date the U.S. Continuing Employee's account balances
                    and  other  accrued benefits under all Seller Plans that are
                    intended  to  be qualified under Section 401 of the Code and
                    (B) take such actions, if any, as may be necessary to permit
                    the  continuation  of loan repayments after such date by the
                    U.S.  Continuing  Employee  if  he or she has an outstanding
                    loan  from  any  such Seller Plan as of such date. Such loan
                    repayments  shall  be  made  directly by the U.S. Continuing
                    Employee  to  the  applicable  Seller  Plan,  and  shall  be
                    permitted  so  long  as the U.S. Continuing Employee remains
                    employed  by  the  Buyer  Employer or any of its Affiliates.

               (iv) Buyer  and  its Affiliates shall not have any responsibility
                    or  liability  with respect to the Seller Plans. Any and all
                    liabilities  for  severance  payments and other amounts owed
                    with  respect  to  a  U.S.  Business Employee (a) who is not
                    offered  employment with Buyer, the Buyer Employer or any of
                    their  Affiliates,  or  (b) who is otherwise not employed by
                    Buyer,  the Buyer Employer or any of their Affiliates or (c)
                    whose  employment  with  Seller is terminated for any reason
                    whatsoever  shall,  in  each  such  case,  remain  the
                    responsibility  of  Seller.

               Nothing  in  this  Agreement  shall  require  or  be construed or
interpreted as requiring Buyer, the Buyer Employer or any of their Affiliates to
continue  the  employment  of any of the U.S. Continuing Employees following the
Closing Date, or to prevent Buyer, the Buyer Employer or any of their Affiliates
from changing the terms and conditions of employment (including compensation and
benefits)  of  any  of the U.S. Continuing Employees following the Closing Date.
Without  limiting  the  generality  of  Section  12.4,  this  Section  6.3(g)


                                       29
<PAGE>
is  not  intended  to  confer upon any U.S. Business Employee or U.S. Continuing
Employee  any  rights  or  remedies  hereunder.

               (h)  Schedules.  If  on  the  date  on  which  this  Agreement is
                    ---------
executed  by  all  Parties  hereto,  any schedule to this Agreement has not been
completed,  then  such  schedule  shall be completed as promptly as commercially
practical  and  such  completed  schedule  shall  be  treated  as if it had been
delivered on the date of this Agreement. No representation or warranty contained
in  this Agreement shall be deemed breached as of the date of the making of such
representation  or warranty by reason of the fact that the relevant schedule was
incomplete  as of such date, provided that a complete schedule that renders true
such representation or warranty is delivered pursuant to this Section 6.3 (h) at
least  ten  Business  Days  before  the  Closing.

                                   ARTICLE VII
                                   TAX MATTERS

     SECTION 7.1.  Preparation and Filing of Tax Returns.
                   -------------------------------------
               Seller  shall  cause  to  be included in the consolidated federal
income  Tax  Returns (and the state income Tax Returns of any state that permits
consolidated,  combined  or  unitary  income  Tax Returns, if any) of the Seller
Group for all periods ending on or before the Closing Date, all items of income,
gain,  loss, deduction or credit ("Tax Items") of Seller and associated with the
Assets that are required to be included therein, shall cause such Tax Returns to
be  timely  filed  with  the  appropriate  Taxing  Authorities,  and  shall  be
responsible for the timely payment (and entitled to any refund) of all Taxes due
with  respect  to  the  periods  covered  by  such  Tax  Returns.

     SECTION 7.2.  Seller's Tax Indemnification.
                   ----------------------------
               Seller hereby agrees to protect, defend, indemnify and hold
harmless Buyer from and against, and agrees to pay all Taxes associated with the
Business and the Assets for all periods ending on or before the Closing Date and
Taxes under Section 3.1(c).

     SECTION 7.3.  Buyer's Tax Indemnification.
                   ---------------------------
               Buyer hereby agrees to protect, defend, indemnify and hold
harmless Seller from and against, and agrees to pay, any Taxes associated with
the Business and the Assets attributable to the time period after the Closing
Date.

     SECTION 7.4.  Tax Indemnification Procedures.
                   ------------------------------
               (a)     If a claim ("Tax Indemnified Claim") shall be made by any
Taxing  Authority  that, if successful, would result in the indemnification of a
Party  under this Agreement (referred to herein as the "Tax Indemnified Party"),
the  Tax  Indemnified Party shall promptly notify the party obligated under this
Agreement  to  so indemnify (referred to herein as the "Tax Indemnifying Party")
in  writing  of  such  fact.

               (b)     The  Tax  Indemnifying Party shall have the right, at its
sole  cost, to control the defense, prosecution, settlement or compromise of the
Tax  Indemnified  Claim, and the Tax Indemnified Party shall take such action in
connection with contesting a Tax Indemnified Claim as the Tax Indemnifying Party
shall  reasonably  request in writing from time to time, including the selection
of  counsel  and  experts  and  the  execution  of  powers  of  attorney,


                                       30
<PAGE>
provided  that  the  Tax  Indemnifying Party shall have agreed to pay to the Tax
Indemnified  Party  all costs and expenses that the Tax Indemnified Party incurs
in  connection  with  contesting such claim, including reasonable attorneys' and
accountants'  fees  and disbursements.  The Tax Indemnified Party shall not make
any payment of such claim for at least 30 days (or such shorter period as may be
required  by  applicable Law) after the giving of the notice required by Section
7.4(a),  shall  give  to  the  Tax Indemnifying Party any information reasonably
requested  relating  to  such  claim, and otherwise shall cooperate with the Tax
Indemnifying Party in good faith in order to contest effectively any such claim.

               (c)     Subject  to  the  provisions  of  Section 7.4(b), the Tax
Indemnified  Party  shall  only enter into a settlement of such contest with the
applicable  Taxing  Authority  or prosecute such contest to a determination in a
court  or  other  tribunal of initial or appellate jurisdiction as instructed by
the  Tax  Indemnifying  Party.

               (d)     If,  after actual receipt by the Tax Indemnified Party of
an  amount  advanced by the Tax Indemnifying Party pursuant to this Section 7.4,
the  extent  of  the  liability of the Tax Indemnified Party with respect to the
claim  shall  be established by the final judgment or decree of a court or other
tribunal  or a final and binding settlement with an administrative agency having
jurisdiction  thereof, the Tax Indemnified Party shall promptly repay to the Tax
Indemnifying  Party  the amount advanced to the extent of any refund received by
the  Tax  Indemnified Party with respect to the claim together with any interest
received  thereon from the applicable Taxing Authority and any recovery of legal
fees  from such Taxing Authority, net of any Taxes as are required to be paid by
the  Tax  Indemnified  Party with respect to such refund, interest or legal fees
(calculated  at  the  maximum  applicable  statutory  rate of Tax in the year of
recovery  without  regard  to  any  other  Tax  Items).

                                  ARTICLE VIII
                   CONDITIONS PRECEDENT TO BUYER'S OBLIGATION

               The  obligation  of  Buyer  to  consummate  the  transaction
contemplated  hereby  on the Closing Date is subject to the satisfaction of each
of  the  following  conditions  at  or  prior  to  the  Closing:

     SECTION 8.1.  Accuracy of  Representations  and  Warranties.  Each  of  the
                   ---------------------------------------------
representations  and  warranties  of  Seller  contained  in  Article  IV of this
Agreement  shall be true and correct, in each case at and as of the Closing Date
as  if  made  at  and as of the Closing Date (except for the representations and
warranties  that  address  matters  only  as  of  a particular date or only with
respect to a specific period of time, which need only be true and accurate as of
such  date  or  with  respect  to  such  period).


                                       31
<PAGE>
     SECTION 8.2.  Performance of Covenants.
                   ------------------------
               Seller  shall  have  performed  and  complied,  in  all  material
respects,  with  the  covenants  and  provisions  of  this Agreement, including,
without  limitation  those in Section 6.1 and Section 6.3, required herein to be
performed  or  complied  with  by Seller between the date hereof and the Closing
Date.

     SECTION 8.3.  Officers' Certificates.
                   ----------------------
               Buyer  shall  have received a certificate from Penn to the effect
set  forth  in Sections 8.1 and 8.2 hereof, dated as of the Closing Date, signed
by  a  duly  authorized  officer  of  Penn.

     SECTION 8.4.  No Order.
                   --------
               No Order shall be in effect prohibiting, enjoining or restraining
the  consummation  of  the  transaction  contemplated  in  this  Agreement.

     SECTION 8.5.  Certified Resolutions.
                   ---------------------
               Buyer  shall  have  received a certificate of the Secretary or an
Assistant  Secretary  of  Penn,  dated as of the Closing Date, setting forth the
resolutions  of  the  board  of directors of Penn, authorizing the execution and
delivery  of this Agreement and the consummation of the transaction contemplated
hereby, and certifying that such resolutions were duly adopted and have not been
rescinded  or  amended  as  of  the  Closing  Date.

     SECTION 8.6.  Secretary's Certificate.
                   -----------------------
               Buyer  shall  have  received a certificate of the Secretary or an
Assistant Secretary of Penn attesting as to the incumbency and signature of each
director  or  officer  of  Penn  who  shall  execute  this  Agreement.

     SECTION 8.7.  Liens and Secured Debt.
                   ----------------------
               All  Liens  on the Assets, securing any obligations under or with
respect  to  the  Secured  Debt Facility or any other Liens involving the Assets
shall  have  been  released  and terminated and copy of the documents evidencing
such  release  and  termination  shall  have  been  provided  to  Buyer.

     SECTION 8.8.  Consents.
                   --------
               Each of the consents identified in Schedule 4.3 shall have been
obtained.


                                       32
<PAGE>
     SECTION 8.9.  Due Diligence.
                   -------------

               Buyer  shall  have completed its due diligence inspections within
five  Business  Days before the Closing Date and shall be satisfied, in its sole
discretion,  with  the  results  of  all  due  diligence conducted by Buyer with
respect  to  Seller, the Business and the Assets, including, without limitation,
with  respect  to all matters pertaining to financial assumptions, title to Real
Property,  and environmental, labor, regulatory, accounting, business practices,
transparency  and  corporate  governance  issues.

     SECTION 8.10.  Authorization to Assign.
                    -----------------------
               Seller shall have delivered to Buyer certified copies of the
corporate resolutions adopted by the Board of Directors and approved by the
majority of the  Shareholders' of Seller authorizing the transfer of the Assets.

     SECTION 8.11.  Seadrift Pipeline Lease.
                    -----------------------

               Seadrift  Pipeline  Corporation  shall  have  approved  of  the
assignment  of  the  Seadrift  Pipeline  Lease  by  Seller  to  Buyer.

     SECTION 8.12.Exxon Contract.
                  ---------------

               Exxon shall have approved of the assignment of the Exxon Contract
by Seller to Buyer.

     SECTION 8.13  Concurrent Closing with Rio.
                 -----------------------------

               The concurrent Closing of the Purchase and Sale Agreement between
Rio and Buyer must take place.

     SECTION 8.14  No Change In Law.
                   ----------------

               No  Law, Order or Tax that was not in force as of the date of the
execution  of  this  Agreement  shall  have been adopted or imposed (or shall be
reasonably  imminent  in  being adopted or imposed), and no increase in rates of
taxation  shall  have  occurred  (or  shall be reasonably imminent in occurring)
after  the  date  of execution of this Agreement, that, in any such event, would
reasonably  be  expected  to  result  in  any  Material  Adverse  Effect.

     SECTION 8.15.  Stockholder Approval.
                    --------------------

               Holders  of  a  majority  of the outstanding common stock of Penn
shall  have  approved  the principal terms of this Agreement and the transaction
contemplated  hereby,  as  required  by  applicable  law  and the certificate of
incorporation  of  Penn.


                                       33
<PAGE>
                                   ARTICLE IX
                   CONDITIONS PRECEDENT TO SELLER'S OBLIGATION

     The  obligation of Seller to consummate the transaction contemplated hereby
on  the  Closing  Date  is  subject to the satisfaction of each of the following
conditions  at  or  prior  to  the  Closing:

     SECTION 9.1  Accuracy of Representations and Warranties.
                  ------------------------------------------
               Each  of the representations and warranties of Buyer contained in
Article V of this Agreement shall be true and correct, in each case at and as of
the  Closing  Date  as  if  made  at  and as of the Closing Date (except for the
representations and warranties that address matters only as of a particular date
or  only  with respect to a specific period of time, which need only be true and
accurate  as  of  such  date  or  with  respect  to  such  period).

     SECTION  9.2  Performance  of  Covenants.
                   --------------------------
               Buyer  shall  have  performed  and  complied,  in  all  material
respects,  with  the  covenants  and  provisions  in  this Agreement, including,
without  limitation  those  in  Sections  6.2  and  6.3,  required  herein to be
performed  or  complied  with  by  Buyer between the date hereof and the Closing
Date.

     SECTION 9.3  Officer's Certificate.
                  ---------------------
               Seller shall have received a certificate from Buyer to the effect
set  forth  in Sections 9.1 and 9.2 hereof, dated as of the Closing Date, signed
by  a  duly  authorized  officer  of  Buyer.

     SECTION 9.4  No Order.
                  --------
               No Order shall be in effect prohibiting, enjoining or restraining
the  consummation  of  the  transaction  contemplated  in  this  Agreement.

     SECTION 9.5  Certified Resolutions.
                  ---------------------
               Seller  shall  have  received  a certificate of a duly authorized
officer of Buyer, dated as of the Closing Date, setting forth the resolutions of
the  board  of directors of Buyer authorizing the execution and delivery of this
Agreement  and  the  consummation  of  the  transaction contemplated hereby, and
certifying  that  such resolutions were duly adopted and have not been rescinded
or  amended  as  of  the  Closing  Date.

     SECTION  9.6  Secretary's  Certificate.
                   ------------------------
               Seller  shall  have received a certificate of the Secretary or an
Assistant  Secretary  of  Buyer  attesting as to the incumbency and signature of
each  officer  of  Buyer  who  shall  execute  this  Agreement.

     SECTION  9.7  No  Change  In  Law.
                   -------------------

               No  Law, Order or Tax that was not in force as of the date of the
execution  of  this  Agreement  shall  have been adopted or imposed (or shall be
reasonably  imminent  in  being adopted or imposed), and no increase in rates of
taxation  shall  have  occurred  (or  shall  be


                                       34
<PAGE>
reasonably imminent in occurring) after the date of execution of this Agreement,
that,  in any such event, would reasonably be expected to result in any Material
Adverse  Effect.

     SECTION  9.8.  Stockholder  Approval.
                    ---------------------

               Holders  of  a  majority  of the outstanding common stock of Penn
shall  have  approved  the principal terms of this Agreement and the transaction
contemplated  hereby,  as  required  by  applicable  law  and the certificate of
incorporation  of  Penn.

                                    ARTICLE X
                                   TERMINATION

     SECTION 10.1. Termination of Agreement.
                   ------------------------
               Anything  herein  to the contrary notwithstanding, this Agreement
and the transaction contemplated hereby may be terminated at any time before the
Closing  Date  as  follows:

               (a)     By  mutual  written  consent  of  Seller  and  Buyer;

               (b)     By  Seller  or  Buyer,  if  the  Closing  shall  not have
occurred  prior to or on October 31, 2005 (which date may be extended in writing
by  the  mutual  agreement  of  Seller  and  Buyer);

               (c)     By  Seller  or  Buyer, if consummation of the transaction
contemplated  hereby  would  violate  any  non-appealable  final  Order  of  a
Governmental  Authority  having  competent  jurisdiction;  or

               (d)     By  Buyer  at  any  time  within  five  (5) Business Days
following  completion  of  any  schedule  to  this Agreement pursuant to Section
6.3(h)  if  Buyer  is not satisfied with the contents of any Schedule; provided,
however, that Seller is afforded at least three Business Days before termination
of  this  Agreement  to  (i)  provide  a  Schedule satisfactory to Buyer or (ii)
provide  a  monetary  remedy.

               (e)     by  the  Seller if the Seller has, in accordance with the
terms  of  Section 6.1(c)(i)(3) above, entered into an agreement to consummate a
Superior  Proposal.  If  the  Seller  terminates this Agreement pursuant to this
Section  10.1(e),  the  Seller shall pay the Buyer a termination fee of $400,000
within  60  days  after  such  termination;  provided that in no event shall the
Seller  be  required to pay such fee if, immediately prior to the termination of
this  Agreement,  the Buyer was in material breach of its obligations under this
Agreement.


     SECTION 10.2.  Effect of Termination.
                    ---------------------

               (a)     If this Agreement shall be terminated pursuant to Section
10.1,  all  further  obligations  of the Parties shall terminate without further
liability  of  any  Party  to  another   (except for the obligations outlined in
section  10.1  (e))  and  each  Party  shall  pay  all  costs  and


                                       35
<PAGE>
expenses  incident  to  its negotiation and preparation of this Agreement and to
its  performance  of and compliance with all agreements and conditions contained
herein  on  its  part  to  be  performed  or  complied with, including the fees,
expenses  and  disbursements  of its counsel; provided, the obligations of Buyer
under  the  Buyer  Confidentiality Agreement shall survive any such termination.

               (b)     Notwithstanding  Section  10.2(a),  if  all  conditions
precedent  to the obligations of a Party set forth in Article VIII or Article IX
(as  applicable) have been met (or the non-breaching Party is ready, willing and
able to satisfy such conditions) and the Closing does not occur on or before the
date  specified in Section 10.1(b) because of the other Party being in breach of
any  of  its  representations,  warranties  or  obligations  hereunder, then the
breaching  Party  shall  remain  liable  for the breach of such representations,
warranties  and  obligations.

                                   ARTICLE XI
                                 INDEMNIFICATION

     SECTION 11.1  Seller Indemnification.
                   ----------------------
               (a)  Subject  to the limitations set forth in this Article XI, if
the Closing occurs, then from and after the Closing Date Seller  shall indemnify
and  hold Buyer and Buyer's Affiliates and their respective officers, directors,
partners,  members,  employees  and agents thereof harmless from and against any
and  all  Losses  arising out of, based upon, attributable to or resulting from:

               (i)  any  breach  of  any  representation  or  warranty of Seller
                    contained in Article IV or any inaccuracy in the certificate
                    delivered  to  Buyer  pursuant  to  Section  8.3;

               (ii) any  breach  of  any  agreement  or  covenant on the part of
                    Seller  contained  in  this  Agreement;

              (iii) any  Losses  arising  out  of  any  act,  event  or omission
                    occurring  prior  to  the  Closing  Date  (and not otherwise
                    constituting  an Assumed Liability) in the conduct by Seller
                    of  the Business, including, without limitation, legal, tax,
                    title  and  ownership  issues;  and

               (iv) the  Retained  Liabilities.

               (b)     The  foregoing  shall not apply to any breach of Seller's
representations  and  warranties  set  forth in Section 4.7, or to any breach of
Seller's covenants set forth in Article VII, it being agreed and understood that
Buyer's  sole  and exclusive remedies for any matters relating to Taxes shall be
as  provided  in  Article  VII.

     SECTION 11.2  Buyer Indemnification.
                   ---------------------
               (a)     Subject  to the limitations set forth in this Article XI,
if  the  Closing  occurs,  then  from  and  after  the  Closing Date Buyer shall
indemnify and hold Seller and Seller's Affiliates and their respective officers,
directors,  members,  partners,  employees  and agents thereof harmless from and
against  any  and  all  Losses  arising  out  of, based upon, attributable to or
resulting  from:


                                       36
<PAGE>
               (i)  any  breach  of  any  representation  or  warranty  of Buyer
                    contained  in  this  Agreement  or  any  inaccuracy  in  the
                    certificate  delivered  to  Seller  pursuant to Section 9.3;

               (ii) any breach of any agreement or covenant on the part of Buyer
                    contained  in  this  Agreement;

              (iii) any  Losses  arising  out  of  any  act, event  or  omission
                    occurring  after  the  Closing  Date  (and  not  otherwise
                    constituting  a  Retained Liability) in the conduct by Buyer
                    of  the  Business  or  operation  of  the  Assets;  and

               (iv) the  Assumed  Liabilities.

               (b)     The  foregoing  shall  not apply to any breach of Buyer's
covenants set forth in Article VII, it being agreed and understood that Seller's
sole  and  exclusive remedies for matters relating to Taxes shall be as provided
in  Article  VII.

     SECTION 11.3  Indemnification Procedures.
                   --------------------------
               If  any  third  Person  (i.e., a Person other than a Party or any
Affiliate  of  a  Party) asserts any claim against a Party which, if successful,
would  entitle  the  Party  to  indemnification  under  this  Article  XI  (the
"Indemnified  Party"), it shall give notice of such claim to the Party from whom
it  intends  to  seek  indemnification  (the  "Indemnifying  Party")  and  the
Indemnifying  Party  shall have the right to assume the defense of such claim at
its  expense.  If  the  Indemnifying  Party  does  assume such defense, it shall
indemnify  and  hold the Indemnified Party harmless from and against any and all
Losses  caused by or arising out of any settlement or judgment of such claim. In
addition,  the  Indemnified  Party  shall  have  the right to participate in the
defense  of  such claim at its expense, in which case (a) the Indemnifying Party
shall  cooperate in providing information to and consulting with the Indemnified
Party  about  the claim, and (b) the Indemnifying Party shall not consent to the
entry of judgment or enter into any settlement without the prior written consent
of  the  Indemnified  Party,  which  shall  not be unreasonably withheld. If the
Indemnifying  Party  fails  to  assume  the  defense  of  any  such  claim,  the
Indemnified  Party  may defend against or settle such claim and the Indemnifying
Party  shall  be  liable  for  any  settlement  of  any  such  claim.

     SECTION 11.4  Limits on Indemnification.
                   -------------------------
               Notwithstanding  anything  to  the  contrary  contained  in  this
Agreement:

               (a)     Seller  shall  not  have  any  obligation  to  provide
indemnification  for  Losses  pursuant to Section 11.1 except to the extent that
the  aggregate  amount  of all such Losses exceeds $50,000, in which case Seller
shall  be liable to Buyer only for such Losses in excess of $50,000 (the "Basket
Amount").  The  maximum  obligation of Seller to provide indemnification for all
Losses  pursuant  to  Section  11.1  shall  be limited to an amount equal to the
Purchase  Price.  Notwithstanding  the  foregoing,  the  Basket  Amount and such
liability  cap  will  not  apply  with  respect  to  any  breach  of  Seller's
representations  and  warranties  set  forth  in Sections 4.1, 4.2, 4.3, 4.8 and
4.14;


                                       37
<PAGE>
               (b)     Buyer  shall  not  have  any  obligation  to  provide
indemnification  for  Losses  indemnified pursuant to Section 11.2 except to the
extent  that  the aggregate amount of all such Losses exceeds the Basket Amount,
in  which case Buyer shall be liable to Seller only for such Losses in excess of
the  Basket  Amount.  The maximum obligation of Buyer to provide indemnification
for  Losses  pursuant to Section 11.2 shall be limited to an amount equal to the
Purchase  Price.  Notwithstanding  the  foregoing,  the  Basket  Amount and such
liability  cap  will  not  apply  with  respect  to  any  breach  of  Buyer's
representations and warranties set forth in Sections 5.1, 5.2, 5.3, 5.5 and 5.7;

               (c)     Seller  shall  not  have  any  obligation  to  provide
indemnification  hereunder  for  any  Losses  pursuant to Sections 11.1 unless a
written  notice of claim specifying in reasonable detail the specific nature and
basis  of  the  Losses  and  the estimated amount of such Losses is delivered to
Seller  prior to 5:00 p.m., Houston, Texas time, on the third anniversary of the
Closing  Date.  Buyer  shall  not have any obligation to provide indemnification
hereunder  for  any  Losses  unless  a  written  notice  of  claim specifying in
reasonable  detail the specific nature and basis of the Losses and the estimated
amount  of  such Losses is delivered to Buyer prior to 5:00 p.m., Houston, Texas
time,  on  the  third  anniversary  of  the  Closing  Date;

               (d)     For  purposes of determining Losses in order to calculate
the Basket Amount and determine rights to indemnification under this Article XI,
the  representations and warranties set forth in Articles IV and V shall be read
without giving effect to any Materiality Requirement set forth therein.  As used
in  this  Agreement, a "Materiality Requirement" shall mean any requirement in a
representation  or  warranty  that  a  condition,  event  or  state  of  fact be
"material," correct or true in "all material respects," have a "Material Adverse
Effect," or be or not be "reasonably expected to have a Material Adverse Effect"
(or  other  words  or  phrases  of  similar  effect or impact) in order for such
condition,  event  or state of facts to cause such representation or warranty to
be  inaccurate.

     SECTION 11.5  Certain Damages.
                   ---------------
               NEITHER  PARTY  NOR  ANY  OF  THEIR  RESPECTIVE  AFFILIATES  OR
REPRESENTATIVES  SHALL  BE LIABLE TO THE OTHER PARTY OR TO ANY OF ITS AFFILIATES
OR  REPRESENTATIVES  FOR  PUNITIVE,  SPECIAL,  EXEMPLARY,  INCIDENTAL, INDIRECT,
CONSEQUENTIAL,  REMOTE  OR SPECULATIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT
AND  THE TRANSACTION CONTEMPLATED HEREBY, REGARDLESS OF WHETHER SUCH DAMAGES ARE
BASED  ON CONTRACT, TORT, STRICT LIABILITY, VIOLATION OF LAW, OR ANY OTHER LEGAL
OR  EQUITABLE  PRINCIPLE;  PROVIDED,  THE  FOREGOING SHALL NOT APPLY TO ANY SUCH
DAMAGES  FINALLY  DETERMINED TO BE PAYABLE TO A THIRD PERSON PURSUANT TO A CLAIM
COVERED  BY  THE  INDEMNITY  PROVIDED  PURSUANT  TO  ARTICLE  XI.

     SECTION  11.6  Exclusive  Remedy.
                    -----------------

               Except  for the tax indemnification provisions of Article VII, if
the  Closing  occurs, the sole and exclusive remedy of each of Buyer and Buyer's
Affiliates, and Seller and Seller's Affiliates, with respect to the purchase and
sale  of  the Assets shall be pursuant to the express indemnification provisions
of  this  Article  XI  and  any  and  all  (a)  claims  relating  to  the


                                       38
<PAGE>
representations,  warranties,  covenants  and  agreements  contained  in  this
Agreement, (b) other claims pursuant to or in connection with this Agreement, or
(c)  other claims relating to the Assets, shall be subject to the provisions set
forth  in  this  Article  XI.

               Except  for  claims  made pursuant to the express indemnification
provisions  of  this  Article  XI,  Buyer on behalf of each of Buyer and Buyer's
Affiliates shall be deemed to have waived, to the fullest extent permitted under
applicable  law,  any  right  of  contribution against Seller or any of Seller's
Affiliates  and  any  and  all  rights,  claims and causes of action it may have
against  Seller  or  any  of  Seller's Affiliates, arising under or based on any
federal,  state  or  local statute, law, ordinance, rule or regulation or common
law  or  otherwise.

               Except  for  claims  made pursuant to the express indemnification
provisions  of  this Article XI, Seller on behalf of each of Seller and Seller's
Affiliates shall be deemed to have waived, to the fullest extent permitted under
applicable  law,  any  right  of  contribution  against  Buyer or any of Buyer's
Affiliates  and  any  and  all  rights,  claims and causes of action it may have
against  Buyer  or  any  of  Buyer's  Affiliates,  arising under or based on any
federal,  state  or  local statute, law, ordinance, rule or regulation or common
law  or  otherwise.


                                   ARTICLE XII
                                     GENERAL

     SECTION 12.1  Amendments.
                   ----------
               This Agreement may only be amended by written instrument executed
by Buyer and Seller.

     SECTION 12.2  Waivers.
                   -------
               The  observance  of  any  term  of  this  Agreement may be waived
(either  generally  or  in  a  particular  instance  and either retroactively or
prospectively) by the Party entitled to enforce such term, but such waiver shall
be  effective only if it is in a written instrument signed by the Party entitled
to  enforce  such  term and against which such waiver is to be asserted.  Unless
otherwise expressly provided in this Agreement, no delay or omission on the part
of  any  Party  in  exercising any right or privilege under this Agreement shall
operate  as  a  waiver thereof, nor shall any waiver on the part of any Party of
any  right  or  privilege  under this Agreement operate as a waiver of any other
right  or  privilege  under  this  Agreement,  nor  shall  any single or partial
exercise  of  any  right  or  privilege  preclude  any other or further exercise
thereof  or  the  exercise of any other right or privilege under this Agreement.

     SECTION 12.3  Notices.
                   -------
               Any  notices  or  other  communications  required  or  permitted
hereunder  shall  be  in  writing  and shall be sufficiently given (and shall be
deemed  to  have  been  duly  given  upon  receipt)  if  sent by overnight mail,
registered  mail  or certified mail, postage prepaid, or by hand, to the Parties
at  the  following  addresses  (or at such other address for a Party as shall be
specified  by  like  notice):


                                       39
<PAGE>
If to Seller, to:

                   Charles  Handly
                   Penn  Octane  Corporation
                   820  Gessner  Suite  1285
                   Houston,  Texas  77024

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

If to Buyer, to:

                   TransMontaigne  Product  Services  Inc.
                   Attn:  President
                   1670  Broadway,  Suite  3100
                   Denver,  Colorado  80202

     SECTION 12.4  Successors and Assigns; Parties in Interest.
                   -------------------------------------------
               This  Agreement  shall  be binding upon and shall inure solely to
the  benefit  of  the  Parties  and  their  respective  successors and permitted
assigns.  Neither  this Agreement nor any rights or obligations hereunder may be
assigned  without  the  written  consent  of  the other Party, and any purported
assignment  made  without  such  written  consent shall be void; provided, Buyer
shall  have  the  right  to  designate  one or more of its Affiliates (including
TransMontaigne  Partners  L.P.) to be transferee(s) at the Closing of all or any
part of the Assets.  Except as expressly contemplated by Sections 11.1 and 11.2,
nothing  in  this  Agreement, express or implied, is intended to or shall confer
upon  any  Person, other than the Parties and their respective successors, legal
representatives,  and permitted assigns, any rights, benefits or remedies of any
nature  whatsoever  under or by reason of this Agreement, and no Person shall be
deemed  a  third  party  beneficiary  under  or  by  reason  of  this Agreement.

     SECTION 12.5  Severability.  If  any  provision  of  this  Agreement or the
                   ------------
application  of  any  such  provision  to  any  Person  or circumstance shall be
declared  judicially  to be invalid, unenforceable, or void, such decision shall
not  have the effect of invalidating or voiding the remainder of this Agreement,
it  being  the  intent and agreement of the Parties that this Agreement shall be
deemed  amended by modifying such provision to the extent necessary to render it
valid,  legal  and  enforceable  while  preserving  its  intent  or,  if  such
modification is not possible, by substituting therefor another provision that is
valid,  legal,  and  enforceable  and  that  achieves  the  same  objective.

     SECTION 12.6  Entire Agreement.
                   ----------------
               This Agreement (including the Exhibits and Schedules hereto and
the documents and instruments executed and delivered in connection herewith)
constitutes the entire agreement between the Parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous agreements and
understandings, whether written or oral, between the


                                       40
<PAGE>
Parties with respect to the subject matter hereof, and there are no
representations, understandings or agreements relating to the subject matter
hereof that are not fully expressed in this Agreement and the documents and
instruments executed and delivered in connection herewith; provided, the Buyer
Confidentiality Agreement shall remain in full force and effect according to its
terms until the Closing.  All Exhibits and Schedules attached to this Agreement
are expressly made a part of, and incorporated by reference into, this
Agreement.

     SECTION 12.7  Governing Law, Consent to Jurisdiction.
                   --------------------------------------
               THIS  AGREEMENT  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH  THE  LAWS  OF  THE  STATE OF TEXAS.  Each Party irrevocably submits to the
jurisdiction  of  any Texas state court or any federal court sitting in Houston,
Texas  in  any  action  arising out of or relating to this Agreement, and hereby
irrevocably  agrees that all claims in respect of such action shall be heard and
determined  in  such  Houston,  Texas state or federal court.  Each Party hereby
irrevocably  waives, to the fullest extent it may effectively do so, the defense
of  an  inconvenient forum to the maintenance of such action or proceeding.  The
Parties  further  agree,  to  the  extent  permitted  by  Law,  that  final  and
un-appealable  judgment  against  any  of  them  in  any  action  or  proceeding
contemplated  above  shall  be  conclusive  and  may  be  enforced  in any other
jurisdiction  within  or  outside  the  United States by suit on the judgment, a
certified  copy  of which shall be conclusive evidence of the fact and amount of
such judgment.  Each Party waives, to the fullest extent permitted by applicable
Law,  any right it may have to a trial by jury in respect of any action, suit or
proceeding  arising  out of or relating to this Agreement.  Each Party certifies
that  it  has  been induced to enter into this Agreement by, among other things,
the  mutual  waivers  set  forth  in  this  Section  12.7.


                                       41
<PAGE>
     SECTION 12.8  Expenses.
                   --------
               Each  of  the Parties shall bear its own expenses (including fees
and  disbursements of its counsel, accountants and other experts) incurred by it
in  connection  with  the  preparation,  negotiation,  execution,  delivery  and
performance  of  this  Agreement,  each  of  the other documents and instruments
executed  in  connection  with  or  contemplated  by  this  Agreement  and  the
consummation  of  the  transaction  contemplated  hereby.

     SECTION  12.9  Release  of  Information;  Confidentiality.
                    ------------------------------------------
               The  Parties  shall  cooperate  with  each  other  in  releasing
information  concerning  this Agreement and the transaction contemplated hereby.
No  press  releases  or  other  public  announcements concerning the transaction
contemplated  by  this  Agreement  shall  be  made  by  any  Party without prior
consultation  with,  and  agreement  of, the other Party, except for any legally
required communication by any Party and then only with prior consultation and as
much  advance  notice  as  is  practicable under the circumstances requiring any
announcement,  together  with copies of all drafts of the proposed text.  At the
Closing  the  Buyer Confidentiality Agreement shall be deemed terminated without
any  further  action  of  the  Parties.

     SECTION  12.10  Sole  Obligation.
                     ----------------
               The  obligations  of  Seller under and pursuant to this Agreement
shall  be  the  sole  obligations  of  Penn.

     SECTION 12.11  Certain Construction Rules.
                    --------------------------
               The  article  and  section  headings  and  the  table of contents
contained  in  this Agreement are for convenience of reference only and shall in
no  way  define, limit, extend or describe the scope or intent of any provisions
of  this  Agreement.  Whenever the context may require, any pronoun used in this
Agreement  shall  include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns, and verbs shall include the plural and
vice  versa.  In  addition, as used in this Agreement, unless otherwise provided
to  the  contrary,  (a)  all references to days, months or years shall be deemed
references  to  calendar  days,  months  or  years,  and  (b) any reference to a
"Section,"  "Article,"  or  "Schedule"  shall be deemed to refer to a section or
article  of  this Agreement or a schedule attached to this Agreement.  The words
"hereof,"  "herein,"  "hereunder"  and words of similar import referring to this
Agreement refer to this Agreement as a whole and not to any particular provision
of  this Agreement.  Unless otherwise specifically provided for herein, the term
"or"  shall  not  be  deemed  to  be exclusive.  The term "including" shall mean
"including  without  limitation."

     SECTION 12.12  Survival.
                    --------
               The  representations, warranties, covenants and agreements of the
Parties  set  forth herein or in any certificate delivered pursuant to the terms
hereof  shall survive the Closing, and such representations and warranties shall
be  subject  to  the  provisions  of  Article  XI.


                                       42
<PAGE>
     SECTION  12.13  Counterparts.
                     ------------
               This  Agreement may be executed in multiple counterparts, each of
which  shall  be  deemed  an  original  and  all  of  which taken together shall
constitute  one  instrument binding on Parties, notwithstanding that all Parties
are  not  signatories  to  the  original  or  the  same  counterpart.

            [The remainder of this page is intentionally left blank]


                                       43
<PAGE>
     IN WITNESS WHEREOF, this Purchase and Sale Agreement has been duly executed
as  of  the  date  first  above  written.

                                               SELLER:

                                               PENN  OCTANE  CORPORATION


                                               By:     /s/  Charles  Handly
                                                  -------------------------
                                               Name:   Charles  Handly
                                               Title:  President

                                               BUYER:

                                               TRANSMONTAIGNE  PRODUCT  SERVICES
                                               INC.


                                               By:     /s/  William  S.  Dickey
                                                  -----------------------------
                                               Name:   William  S.  Dickey
                                               Title:  President