**Exhibit
        2.1**
   **PURCHASE
        AND SALE AGREEMENT**




**dated
      as of August 15, 2005**




**AMENDED
      AND RESTATED as of August 15, 2006**




**between**




**PENN
      OCTANE CORPORATION,**




**and**




**TRANSMONTAIGNE
      PRODUCT SERVICES INC.**














**TABLE
      OF CONTENTS**





Page**ARTICLE
                I DEFINITIONS**
            **2**SECTION
                1.1.
            Certain
                Definitions
            2**ARTICLE
                II THE CLOSING**
            10SECTION
                2.1.
            Purchase
                and Sale of the Assets.
            10SECTION
                2.2.
            Closing
            10SECTION
                2.3.
            Deliveries
                to Buyer
            10SECTION
                2.4.
            Deliveries
                to Seller
            11SECTION
                2.5.
            Proceedings
                at Closing
            11**ARTICLE
                III PURCHASE PRICE**
            **11**SECTION
                3.1.
            Purchase
                Price
            11SECTION
                3.2.
            Payment
                of Consideration and Transfer of Assets at Closing
            12SECTION
                3.3.
            Allocation
            12**ARTICLE
                IV REPRESENTATIONS AND WARRANTIES OF SELLER**
            **12**SECTION
                4.1.
            Organization;
                Power and Authority
            12SECTION
                4.2.
            Authorizations;
                Execution and Validity
            13SECTION
                4.3.
            No
                Conflicts; Consents
            13SECTION
                4.4.
            Litigation;
                Orders
            14SECTION
                4.5.
            Environmental
                Matters
            14SECTION
                4.6.
            Employee
                and Benefit Matters.
            14SECTION
                4.7.
            Taxes
            16SECTION
                4.8.
            Title
                to Assets
            16SECTION
                4.9.
            Assigned
                Contracts
            17SECTION
                4.10.
            Sufficiency
                of Assets
            17SECTION
                4.11.
            Insurance
            17SECTION
                4.12.
            Permits;
                Compliance with Applicable Law
            17SECTION
                4.13.
            Absence
                of Certain Changes
            18SECTION
                4.14.
            Fees
            19SECTION
                4.15.
            Disclaimer
            19


**ARTICLE
                  V REPRESENTATIONS AND WARRANTIES OF BUYER**
              **19**SECTION
                  5.1.
              Organization;
                  Power and Authority
              19SECTION
                  5.2.
              Authorizations;
                  Execution and Validity
              19SECTION
                  5.3.
              No
                  Conflicts; Consents
              20SECTION
                  5.4.
              Litigation
              20SECTION
                  5.5.
              Investment
                  Intent; Sophisticated Buyer
              20SECTION
                  5.6.
              Financial
                  Ability
              21SECTION
                  5.7.
              Fees
              21SECTION
                  5.8.
              Disclaimer
              21


i




**ARTICLE
                VI COVENANTS**
            **21**SECTION
                6.1.
            Covenants
                of Seller
            21SECTION
                6.2.
            Covenants
                of Buyer
            22SECTION
                6.3.
            Other
                Covenants
            23**ARTICLE
                VII TAX MATTERS**
            **27**SECTION
                7.1.
            Preparation
                and Filing of Tax Returns
            27SECTION
                7.2.
            Seller's
                Tax Indemnification
            27SECTION
                7.3.
            Buyer's
                Tax Indemnification
            28SECTION
                7.4.
            Tax
                Indemnification Procedures
            28**ARTICLE
                VIII CONDITIONS PRECEDENT TO BUYER’S OBLIGATION**
            **29**SECTION
                8.1.
            Accuracy
                of Representations and Warranties
            29SECTION
                8.2.
            Performance
                of Covenants
            29SECTION
                8.3.
            Officers’
                Certificates
            29SECTION
                8.4.
            No
                Order
            29SECTION
                8.5.
            Certified
                Resolutions
            29SECTION
                8.6.
            Secretary’s
                Certificate
            29SECTION
                8.7.
            Liens
                and Secured Debt
            30SECTION
                8.8.
            Consents
            30SECTION
                8.9.
            Seadrift
                Pipeline Lease
            30SECTION
                8.10.
            Authorization
                to Assign
            30SECTION
                8.11.
            Due
                Diligence
            30SECTION
                8.12.
            Exxon
                Contract
            30SECTION
                8.13
            Concurrent
                Closing with Rio
            30SECTION
                8.14.
            No
                Change in Law
            30SECTION
                8.15
            Stockholder
                Approval
            31SECTION
                8.16
            U.S.
                Employees
            31SECTION
                8.17
            Pipeline
                Tariff
            31SECTION
                8.18
            Dow
                Tariff Letter
            31SECTION
                8.19
            Injunction
            31**ARTICLE
                IX CONDITIONS PRECEDENT TO SELLER’S OBLIGATION**
            **31**SECTION
                9.1.
            Accuracy
                of Representations and Warranties
            31SECTION
                9.2.
            Performance
                of Covenants
            32SECTION
                9.3.
            Officer’s
                Certificate
            32SECTION
                9.4.
            No
                Order
            32SECTION
                9.5.
            Certified
                Resolutions
            32SECTION
                9.6.
            Secretary’s
                Certificate
            32SECTION
                9.7
            No
                Change in Law
            32SECTION
                9.8
            Stockholder
                Approval
            33**ARTICLE
                X TERMINATION**
            **33**SECTION
                10.1.
            Termination
                of Agreement
            33SECTION
                10.2.
            Effect
                of Termination
            33




ii





**ARTICLE
                XI INDEMNIFICATION**
            **34**SECTION
                11.1.
            Seller
                Indemnification
            34SECTION
                11.2.
            Buyer
                Indemnification
            34SECTION
                11.3.
            Indemnification
                Procedures
            35SECTION
                11.4.
            Limits
                on Indemnification
            35SECTION
                11.5.
            Certain
                Damages
            36SECTION
                11.6
            Exclusive
                Remedy
            36**ARTICLE
                XII GENERAL**
            **37**SECTION
                12.1.
            Amendments
            37SECTION
                12.2.
            Waivers
            37SECTION
                12.3.
            Notices
            37SECTION
                12.4.
            Successors
                and Assigns; Parties in Interest
            38SECTION
                12.5.
            Severability
            38SECTION
                12.6.
            Entire
                Agreement
            39SECTION
                12.7.
            Governing
                Law, Consent to Jurisdiction
            39SECTION
                12.8.
            Expenses
            39SECTION
                12.9.
            Release
                of Information; Confidentiality
            39SECTION
                12.10.
            Sole
                Obligation
            40SECTION
                12.11.
            Certain
                Construction Rules
            40SECTION
                12.12.
            Survival.
            40SECTION
                12.13.
            Counterparts
            40





**Exhibits**





A
            -
                Intentionally OmittedB
            -
                General Assignment, Conveyance and Bill of SaleAnnex
                1 - Intentionally OmittedAnnex
                2 - LeasesAnnex
                3 - ImprovementsAnnex
                4 - EasementsAnnex
                5 - Personal PropertyAnnex
                6 - Assigned ContractsAnnex
                7 - PermitsC
            -
                Assumption AgreementD
            -
                Closing Settlement Statement as of August 22,
                2006




iii


**Schedules**





1.1
            -
                Seller’s Individuals with Knowledge


4.3
            -
                No Conflicts/Consents


4.4
            -
                Legal Proceedings


4.5
            -
                Environmental Matters


4.6(a)
            -
                U.S. Employees


4.6(b)
            -
                Notice of Adverse Claim By Employee


4.6(c)
            -
                Seller’s Plans


4.7
            -
                Taxes


4.9
            -
                Contracts


4.11
            -
                Insurance


4.12
            -
                Permits Compliance


4.13
            -
                Certain Changes


4.14
            -
                Fees


5.3
            -
                Buyer’s Conflicts/Consents


6.3(d)(i)
            -
                Minimum Inventory Requirements - Penn
                Octane




iv


**PURCHASE
      AND SALE AGREEMENT (AMENDED AND RESTATED)**




This
      PURCHASE AND SALE AGREEMENT, dated as of August 15, 2005, as amended and
      restated on August 15, 2006 (this “Agreement”), is entered into by and between
      PENN OCTANE CORPORATION, a Delaware corporation (“Seller” or “Penn”), 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.




Seller
      is
      also an affiliate of Rio Vista Operating Partnership L.P. (“Rio”), which, in
      turn, has concurrently executed a Purchase and Sale Agreement (as amended and
      restated) with Buyer for the acquisition by Buyer of various leases, contracts,
      and other assets used in the purchase, transportation, marketing and sale of
      LPG.





The
      Parties are parties to that certain Purchase and Sale Agreement (the **“Prior
      Agreement”** )
      entered
      into as of August 15, 2005, as amended, under which Buyer desired to purchase
      from Seller, and Seller was willing to sell to Buyer the Assets as such terms
      were further described in the Prior Agreement.





The
      Parties wish to supercede, amend and restate the Prior Agreement pursuant to
      this Agreement.





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 (as amended and
      restated) 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:







ARTICLE
      I


**DEFINITIONS**





**SECTION
      1.1** ***Certain
      Definitions*** **.**





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





**“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, excepting from the foregoing TransMontaigne
      Partners L.P. or any of its affiliates. 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, including the Seadrift Pipeline Lease (excluding 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, which leases are 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”** );




(e) all
      easements 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”** );




2


(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, the Formosa Contract and the Dow Sales 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;




(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);




(n) the
      Formosa Contract; and




(o) the
      Dow
      Sales Contract.




3


**“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 the Seadrift
      Pipeline, the Exxon Contract, the Formosa Contract, the Dow Sales Contract,
      the
      pumping station and the purchase, transportation, storage and marketing of
      LPG,
      but excluding Penn’s Refined Products resale business.




**“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(f)(i).




**“Closing”** has the
      meaning given in Section 2.2.




**“Closing
      Date”** has the
      meaning given in Section 2.2.




**“Continuing
      Employee”** has the
      meaning given in Section 6.3(f)(i).




**“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,
      the
      Formosa Contract, the Dow Sales Contract, and the Seadrift Pipeline
      Lease.




4


**“Deficiency
      Amount”** means
      the difference between the Minimum Requirement and actual LPG inventory at
      the
      Effective Time as determined pursuant to Schedule 6.3(d)(i) and in conjunction
      with the Purchase and Sale Agreement between Buyer and Rio.




**“Dow
      Sales Contract”** means
      that certain Dow Term Purchase Contract No. 245893, dated May 17, 2006 between
      Penn and Dow Hydrocarbons and Resources Inc.




**“Easements”** has the
      meaning given in the subsection (e) of the definition of Assets.




“ **Effective
      Time”** means
      12:01 a.m., central daylight time, on the Closing Date.




**“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(e)(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.




**“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.




5


**“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.




**“Exxon
      Contract”** means
      the Agreement, dated October 1, 1999, as amended on January 20, 2000, February
      29, 2000, April 1, 2005, and February 2, 2006, 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, 2010, and any continuation, extension
      or renewal thereof.




**“Formosa
      Contract”** means
      the Purchase Sale Agreement for Propane King Ranch Gas Plant, dated May 1,
      2006,
      between Penn and Formosa Plastic Corporation.




**“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(f)(i).




**“Improvements”** has the
      meaning given in the subsection (d) of the definition of Assets.




**“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.




6


**“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 Assets, 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(d)(i).




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




**“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, 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.




7


**“Refined
      Products”** means
      motor fuel, diesel fuel and jet fuel.




**“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;




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




(e)
            all
                assets used in Penn’s Refined Products resale
                business.




**“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;




(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.




8


**“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 August 1, 2006,
      by
      and between Seadrift Pipeline Corporation, a Delaware corporation and
      Penn.




**“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. Employees.




**“Subsidiary”** means,
      with respect to any Person, any corporation, partnership, limited liability
      company, whether incorporated in the U.S., 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, 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 Claim”** has the
      meaning given in Section 7.4(a).




**“Tax
      Indemnified Party”** has the
      meaning given in Section 7.4(a).




**“Tax
      Indemnifying Party”** has the
      meaning given in Section 7.4(a).




9


**“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.




**“U.S.
      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





**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).




**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 first Business Day after the satisfaction or waiver of the conditions
      set
      forth in Articles VIII and IX , but no sooner than August 22, 2006, or at such
      other time and date as the Parties may mutually agree (the **“Closing
      Date”** ).




**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, 8.12, 8.15 and 6.3(b)
      that
      are required;




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




10


(e) the
      agreement required under Section 8.13;




(f) a
      copy of
      the final tariff required under Section 8.17; and




(g) a
      copy of
      the executed letter required under Section 8.18.




**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.




**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 and Section 8.11 (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, including any
      such Taxes payable under the Texas Tax Code or Texas Administration
      Code.




11


**SECTION
      3.2** **** ***Payment
      of Consideration and Transfer of Assets at Closing*** **.**




At
      the
      Closing, Buyer shall pay the Purchase Price, as adjusted, 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.




**SECTION
      3.3** ***Allocation*** **.**





Seller
      and Buyer are each separately responsible for:





(a) preparing
      Form 8594 Asset Acquisition Statement (the “Form”), under Section 1060 of the
      Internal Revenue 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 in which the Parties
      will attempt to reach agreement as to allocation of the Purchase Price. 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 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:




**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.




12


**SECTION
      4.2** ***Authorizations;
      Execution and Validity*** **.**





(a) Except
      with respect to the transfer to 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 of the
      Assets.




(c) Except
      with respect to the transfer to 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) Except
      with respect to the transfer to 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.




(e) 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 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 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.




13


**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.
      Except as set forth in Schedule 4.4, 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




(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. Employees and the name of each U.S. 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
      August 15, 2005. 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.




14


(b) With
      respect to the U.S. Employees and except as set forth in Schedule
      4.6(b):




(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 the transaction contemplated hereby, or the closing
                or
                relocation of any facility.




(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;




15


(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 deficiency;
      and




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




**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.




16


**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.




**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 and the Assets.




**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 set forth 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.




17


(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 August 15, 2005, 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;




(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 Assets in excess of
      $20,000;




(d) material
      change in the accounting methods used by Seller with respect to the Assets,
      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 with respect to the Assets, or aggregate capital expenditures in
      excess of $40,000;




(f) termination
      or cancellation of a Contract with respect to the Assets 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) with respect to the
      Assets 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.




18


**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.




**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.




19


**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 materially
      adversely affect the ability of Buyer to perform its obligations under and
      consummate the transaction contemplated by this Agreement.




**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.




20


**SECTION
      5.6** ***Finan*** ***cial
      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*** **.**




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, or as 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
                Assets;




(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 the Assets
                are
                subject;




21


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




(v)
            not
                sell or dispose of any of the Assets;




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




(vii)
            not
                make any material election with respect to Taxes with respect to
                the
                Assets;




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




(b) Required
      Approvals. Concurrent with the execution of this Agreement, Seller will make all filings
      with Governmental Authorities required to be made by them in order to consummate
      the transaction contemplated by this Agreement for which purpose it shall have
      the full cooperation and assistance of Buyer.




(c) 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.





**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) Required
      Approvals. No later
      than five (5) Business Days prior to the Closing Date, Buyer will make all
      filings with Governmental Authorities required to be made by it in order to
      consummate the transaction contemplated by this Agreement for which purpose
      it
      shall have the full cooperation and assistance of Seller. Between the date
      of
      this Agreement and the Closing, Buyer will cooperate with Seller with respect
      to
      all filings that Seller is required to make with Governmental Authorities in
      connection with the transaction contemplated under this Agreement.




(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.




22


(d) 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 (d)(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(d)(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.




**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.




23


(b) 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, enforce, in
      a reasonable manner and under the direction and control of Buyer, any and all
      rights of Seller, or otherwise available under the same, against such third
      Person.




(c) 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 and Buyer shall not thereafter make any use whatsoever
      of such names or logos.





(d) Minimum
      Requirement .





(i)
            The
                Purchase Price has been determined based on the volume and quality
                of LPG
                inventory at the Assets. Such LPG inventory should be no less than
                the
                minimum levels and standards for LPG inventory as set forth on Schedule
                6.3(d) (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(d)(i) to be
                implemented within or by the periods of time indicated in such Schedule
                6.3(d)(i). If pursuant to Schedule 6.3(d)(i) it is determined that
                the
                Minimum Requirement was not satisfied as of the Effective Time, then
                Seller shall pay to Buyer the Deficiency Amount as described in and
                determined pursuant to such Schedule 6.3(d)(i), such payment to be
                made by
                Seller to Buyer within five (5) Business Days of such determination.
                If
                pursuant to Schedule 6.3(d)(i) it is determined that the Minimum
                Requirement was exceeded as of the Effective Time, then Buyer shall
                pay to
                Seller the Excess Amount as described in and determined pursuant
                to such
                Schedule 6.3(d)(i), such payment to be made by Buyer to Seller within
                five
                (5) Business Days of such
                determination.




(e) Environmental
      Inspection .




(i)
            Buyer
                acknowledges and agrees that it has fully exercised all of its rights,
                pursuant to the Prior Agreement and otherwise, 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 Environmental Audit has been completed. The cost and expense
                of the
                Environmental Audit shall be borne by
                Buyer.




24


(ii)
            Buyer
                has conferred with Governmental Authorities and reviewed and copied
                all
                records of Governmental Authorities with respect to the Real Property
                in
                connection with the Environmental
                Audit.




(iii)
            Buyer
                has no further rights or options pursuant to the Prior Agreement
                or this
                Agreement with respect to the Environmental Audit.




(f) Employee
      and Benefit Matters .




(i)
            Seller
                shall make available to Buyer all U.S. Employees, as set forth on
                Schedule
                4.6(a), to discuss potential employment with Buyer (such entity that
                makes
                employment offers being the**“Buyer
                Employer”**).
                Seller shall provide Buyer with an updated list of the U.S. 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.
                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(f). 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
                “**Continuing
                Employee**”
                means each U.S. 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. 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.




(ii)
            For
                a period of not less than one year beginning on the Closing Date,
                Buyer
                shall cause the Buyer Employer to provide the Continuing Employees
                while
                employed by the Buyer Employer 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 Internal Revenue
                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 Continuing Employee’s years of service for corresponding
                purposes that were credited prior to such Continuing Employee’s Hire Date
                under the corresponding Seller Plans in which the Continuing Employee
                participated immediately prior to the Closing Date. Promptly after
                each
                Continuing Employee’s Hire Date, Seller shall provide written notice to
                Buyer of such prior service credit.




25


(iii)
            On
                or before each Continuing Employee’s Hire Date, Seller shall (A) take any
                necessary action to fully vest as of such date the Continuing Employee’s
                account balances and other accrued benefits under all Seller Plans
                that
                are intended to be qualified under Section 401 of the Internal Revenue
                Code and (B) take such actions, if any, as may be necessary to permit
                the
                continuation of loan repayments after such date by the 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 Continuing
                Employee to the applicable Seller Plan, and shall be permitted so
                long as
                the Continuing Employee remains employed by the Buyer
                Employer.




(iv)
            Buyer
                Employer shall not from and after the Closing Date, 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. Employee (a) who is not offered employment with the Buyer
                Employer,
                (b) who is otherwise not employed by the Buyer Employer, or (c) whose
                employment with Seller is terminated for any reason whatsoever shall,
                in
                each such case, remain the responsibility of Seller.




(v)
            Nothing
                in this Agreement shall require or be construed or interpreted as
                requiring the Buyer Employer to continue the employment of any of
                Seller’s
                employees following the Closing Date, or to prevent the Buyer Employer
                from changing the terms and conditions of employment (including
                compensation and benefits) of any of their employees following the
                Closing
                Date. Without limiting the generality of Section 12.4, this Section
                6.3(f) is not intended to confer upon any U.S. Employee or Continuing
                Employee any rights or remedies
                hereunder.




(g) 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 (g) at least five (5) Business Days before the
      Closing.


26


(h) Post
      Closing Transition .
      For a
      period of 90 days subsequent to the Closing Date,





(a)
            Seller
                shall have the rent free use and access to the office facility at
                the
                Buyer’s Brownsville, Texas terminal facility,
                and





(b)
            Seller
                shall pay the salary of Delia Chavez, the Seller’s Controller, to assist
                Buyer in training its personnel to assume the day to day operation
                of the
                Buyer’s Brownsville, Texas terminal
                facility.





(i) Assets .
      All
      revenues and
      expenses ,
      whenever received or paid, which
      are attributable to the Assets for the
      period prior to
      the Effective Time shall belong to Seller and all revenues or expenses
      attributable to the Assets for
      the
      period from
      and
      after the Effective Time shall belong to Buyer. If a Party receives or pays
      any
      monies from or to a third Person ,
      that
      are owed to the
      other Party, the
      receiving Party will
      promptly remit such monies to such other Party.





**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. A total of $ 55,970 ,
      covering unpaid property taxes for the year 2005, plus interest and penalties,
      will be retained from the Purchase Price by Seller’s attorney, Dennis Sanchez of
      the firm of Sanchez, Whittington & Zabarte, Brownsville, Texas, in trust to
      be paid by him after Closing and before additional interest or penalties accrue,
      and Seller will take all necessary steps to remove any liens placed on the
      Assets or the “Acquired Assets”, as the term is defined in the agreement of
      effective date between Buyer and Rio, all of the foregoing obligations will
      survive the Closing.




**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, including, without
      limitation, Taxes under Section 3.1(c).


27


**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, 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).


28





**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).




**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.




29


**SECTION
      8.7** ***Liens
      and Secured Debt*** **.**





All
      Liens
      on the Assets securing any obligations under or with respect to the Secured
      Debt
      Facility 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.





**SECTION
      8.9** ***Seadrift
      Pipeline Lease*** **.**





Seadrift
      Pipeline Corporation shall have approved of the assignment of the Seadrift
      Pipeline Lease by Seller to Buyer or provided in writing assurance that Seadrift
      Pipeline Corporation will approve such assignment.





**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** ***Due
      Diligence*** **.**





Buyer’s
      satisfaction with the results of the due diligence conducted by Buyer is no
      longer a condition to Buyer’s obligation to consummate the transaction
      contemplated hereby on the Closing Date. Exhibit
      D reflects
      any agreed upon Purchase Price reduction due to Buyer’s due diligence
      findings.





**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
      Closing of the Purchase and Sale Agreement, as amended and restated, between
      Rio
      and Buyer must take place concurrent with the Closing under this
      Agreement.





**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 the Prior
      Agreement and 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 the Prior Agreement and this Agreement, that,
      in
      any such event, would reasonably be expected to result in any Material Adverse
      Effect.




30




**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.




**SECTION
      8.16** ***U.S.
      Employees*** **.**





The
      U.S.
      Employees located in the United States, other than the Continuing Employees
      who
      have accepted the offer of employment made by Buyer, shall be subject to
      termination on the Closing
      Date in
      accordance with Section 6.3(f).





**SECTION
      8.17** ***Pipeline
      Tariff*** **.**





Penn
      shall have filed a tariff with the Federal Energy Regulatory Commission (“FERC”)
      covering transportation of LPG in the Seadrift Pipeline, which tariff shall
      not
      have been rejected by the FERC and any applicable notice or review period
      related to the tariff shall have been concluded.





**SECTION
      8.18** ***Dow
      Tariff Letter*** **.**





Letter
      from Penn to Mr. Tim Wilson, Dow Hydrocarbons (“Dow”) dated July 19, 2006
      regarding “use by Penn Octane of Leased Ella Brownsville Pipeline Facility and
      Ella Seadrift Pipeline” is executed by Mr. Tim Wilson or other representative of
      Dow, and delivered to Buyer.





**SECTION
      8.19** ***Injunction*** **.**





Buyer
      shall have received written evidence that Seller shall have caused the temporary
      injunction issued June 13, 2006 as described in Schedule 4.4 to either be
      rescinded or amended to the satisfaction of Buyer.




**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).


31


**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
      until 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 the Prior
      Agreement and 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 the Prior Agreement and this Agreement, that,
      in
      any such event, would reasonably be expected to result in any Material Adverse
      Effect.


32


**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 1,
      2006
      (which date may be extended in writing by the mutual agreement of Seller and
      Buyer); or




(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.




**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
      and each Party shall pay all costs and 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
      the above, 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.


33


**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 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:




(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 or Buyer’s Affiliates (including TransMontaigne Partners
                L.P.) of the Business or the operation and performance of the Assets
                and
                the Seadrift Pipeline Lease; and




34


(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 4.14, and Item No. 1 in Schedule
      4.12.




(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.




35


(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 (INCLUDING
      TRANSMONTAIGNE PARTNERS L.P.) OR
      REPRESENTATIVES SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY OF ITS AFFILIATES
      (INCLUDING TRANSMONTAIGNE PARTNERS L.P.) 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*** **.**





(a) 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 (including
      TransMontaigne Partners L.P.), 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 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.


36


(b) 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
      (including TransMontaigne Partners L.P.) 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.





(c) 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 courier, express 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):




37


If
      to
      Seller, to:




Penn
      Octane Corporation


Attn:
      Chief Executive Officer


820
      Gessner Road Suite 1285


Houston,
      Texas 77024





With
      a
      copy (which shall not constitute effective notice) to:





Penn
      Octane Corporation


Attn:
      Chief Financial Officer


840
      Apollo Street Suite 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.




38


**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 and replaces all prior and contemporaneous agreements and
      understandings, whether written or oral, between the 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 after the Closing except with respect to the Assets. 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.




**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 as much advance notice and consultation as is practicable under
      the circumstances requiring any announcement, together with copies of the
      proposed text.


39


**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. The provisions of Sections 6.3 and 8.11 shall
      survive the Closing.





**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.




[Signatures
      Contained on Following Page]




40


IN
      WITNESS WHEREOF, this Purchase and Sale Agreement, as herein amended and
      restated, has been duly executed as of the date above written.




**SELLER:****PENN
                OCTANE CORPORATION**By:Name:
                Charles HandlyTitle:  
                President**BUYER:****TRANSMONTAIGNE
                PRODUCT SERVICES INC.**By:Name:
                William S. DickeyTitle:  
                President






41