**Exhibit 10.12**Amendment to Pledge and Security AgreementThis Amendment to Pledge and Security Agreement (this “Amendment”) is dated as of October 13,2006, and is made by and between Jerome B. Richter (the “Borrower”) and Penn Octane Corporation, aDelaware corporation (the “Corporation”). Capitalized terms used and not otherwise defined hereinshall have the meaning set forth in the Pledge and Security Agreement (the “Pledge Agreement”) byand between Borrower and the Corporation dated as of April 11, 2000, as subsequently amended.Whereas, under the terms of the Pledge Agreement, the Borrower pledged to the Corporation andgranted a continuing security interest in one million (1,000,000) shares of common stock (the“Pledged Stock”) of the Corporation owned by the Borrower and in all dividends, cash rights,instruments and other property, and all proceeds of every kind thereof, received or distributedwith respect to the Pledged Stock (all such collateral being defined in the Pledge Agreement as the“Pledged Stock Collateral”);Whereas, on or about October 1, 2004, the Corporation distributed to the Borrower with respectto the Pledged Stock one hundred twenty-five thousand (125,000) common units (the “Common Units”)of Rio Vista Energy Partners L.P. (“Rio Vista”) in connection with a spin-off of Rio Vista from theCorporation;Whereas, pursuant to Section 2(a) of the Pledge Agreement, the Common Units are part of thePledged Stock Collateral;Whereas, pursuant to Section 3 of the Pledge Agreement, the Borrower is obligated to deliverthe Common Units to the Corporation as security for the Borrower’s indebtedness to the Corporation,but the Borrower has not yet delivered the Common Units to the Corporation; andWhereas, the Borrower wishes to deliver to the Corporation, and the Corporation wishes toaccept, an additional one million (1,000,000) shares of common stock of the Corporation owned bythe Borrower as collateral in full substitution for the Common Units.Now therefore, in consideration of the foregoing and the agreements contained herein, theparties agree as follows:1. Amendment of Pledge Agreement. From and after the date of this Amendment, the term“Pledged Stock,” as defined in section 2(a) of the Pledge Agreement, shall mean two million(2,000,000) shares of common stock of the Corporation owned by the Borrower, but shall not includethe Common Units of Rio Vista previously distributed to the Borrower with respect to the PledgedStock or any cash distribution with respect to the Common Units received by the Borrower from RioVista at any time.2. Delivery of Collateral. The Borrower agrees to deliver, or cause to be delivered, tothe Corporation certificates evidencing a total of two million (2,000,000) shares of Common Stockof the Corporation to be held as the Pledged Stock in accordance with the Pledge Agreement,together with a duly executed and signature guaranteed stock power in the form attached hereto asExhibit A.
 
 

 
3. Effect of Amendment. Except as specifically modified hereby, the Pledge Agreementremains in full force and effect.4. Counterparts. This Amendment may be executed in one or more counterparts, each of whichshall be deemed an original and all of which together shall constitute a single instrument.This Amendment to Pledge and Security Agreement is executed by the undersigned as of the datefirst set forth above.     The Corporation: The Borrower:     PENN OCTANE CORPORATION JEROME B. RICHTER     By: /s/ Ian T. Bothwell /s/ Jerome B. Richter       Ian T. Bothwell Jerome B. Richter  Chief Financial Officer