In a saucepan, combine the vinegar, wine, peppercorns, shallots, tarragon, and tomato paste. Bring the liquid to a boil and reduce to 1 tablespoon. Remove from the heat and strain through a fine mesh strainer into a clean saucepan.
Add the water and blend well. Return to low heat. Add the egg yolks and whisking constantly, cook over low heat until frothy and thick, 3 to 4 minutes. In a steady stream, slowly add the butter, whisking constantly until the sauce thickens. Season with salt and pepper and serve immediately, or keep warm in a warm water bath until ready to serve, stirring occasionally.
Yield: about 1 cup