Exhibit 10.11


    
      

    

    Exhibit
      10.11



    September
      30, 2005

    


    


    «FirstName» «LastName»

    «Company»

    «Company1»

    «Address1»

    «Address2»

    «City»,
      «State» «Zip»

    


    
      	 	
              Re:

            	
              Amendment
                of Promissory Note(s) of Penn Octane Corporation Due December 15,
                2005 and
                Related Agreements 

            


    

    


    Dear
      Holder of Promissory Note(s):

    


    Reference
      is made to the promissory note(s), as subsequently amended (in the form attached
      as Exhibit A),
      which
      you currently hold in connection with one or more of the following transactions
      with Penn Octane Corporation (“Penn Octane”):

     

    
      
        	 	
                i.)

              	
                The
                  promissory note(s) originally issued by Penn Octane in connection
                  with the
                  private placement on or around December 17, 1999 (the “Original Notes”),
                  as amended (the “Restructured Notes”),
                  and/or

              


      

       

      
        	 	
                ii.)

              	
                The
                  new promissory note(s) originally issued by Penn Octane contemporaneously
                  with the restructuring of the Original Notes, as amended (the “New
                  Notes”), and/or

              


      

       

      
        	 	
                iii.)

              	
                The
                  promissory note originally issued in June 2002 for $200,000 and
                  December
                  2002 for $300,000, as amended (the “Additional Notes”),
                  and/or

              


      

       

      
        	 	
                iv.)

              	
                The
                  promissory notes originally issued January 16, 2004 to various
                  holders
                  (the “$280,000 Notes”).

              


      

    

     

    The
      Restructured Notes, the New Notes, the Additional Notes and the $280,000 Notes
      are collectively referred to as the “Promissory Notes,” and all of the
      underlying agreements pertaining to the Promissory Notes, including the purchase
      agreement, the note agreement, the common stock purchase warrant agreement,
      the
      registration rights agreement, and all related amendments, if any, are
      collectively referred to as the “Related Agreements”.

    


    The
      Promissory Notes are currently due and payable on December 15, 2005. The holders
      of the Promissory Notes (the “Noteholders”) are also entitled to receive
      interest, payable quarterly on June 15, 2005, September 15, 2005 and December
      15, 2005 (the “Interest Payments”). In addition, the Noteholders are entitled to
      receive an additional fee based on any principal amount of the Promissory Notes
      outstanding on those payment dates (the “Additional Fees”).


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Amendment
      To Promissory Note(s)

    September
      30, 2005

    Page
      2
of
      4

    


    


    For
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, you and Penn Octane hereby agree that your Promissory Note(s)
      and
      the Related Agreements hereby are amended, effective as of June 15, 2005, to
      the
      fullest extent necessary to effectuate the following: 

    


    
      	 	
              (a)

            	
              The
                Noteholders hereby agree to extend the payment due date for the Interest
                Payments and Additional Fees otherwise due June 15, 2005 and
                September 15, 2005 until December 15, 2005 or any earlier
                maturity date of the Promissory Notes (the “Maturity Date”). The
                Noteholders hereby acknowledge and agree that there are no defaults
                existing under the Promissory Notes as of the date
                hereof.

            


    

     

    
      	 	
              (b)

            	
              Any
                amounts deferred pursuant to Paragraph (a) above shall accrue interest
                at
                a rate of 16.5% per year from the date the payments were otherwise
                due
                until the date that the deferred amounts are
                paid.

            


    

     

    
      	 	
              (c)

            	
              All
                accrued interest and principal shall be due and payable on
                December 15, 2005; provided, however, that if Penn Octane and/or Rio
                Vista Energy Partners L.P. (“Rio Vista”) completes a sale of any assets
                resulting in cash proceeds of more than $2 million to Penn Octane
                and/or Rio Vista before December 15, 2005, then the cash proceeds
                in
                excess of $2 million (but only such excess) shall be first applied to
                satisfaction of Penn Octane’s obligations under the Promissory Notes
                before other uses of such excess
                proceeds.

            


    

     

    
      	 	
              (d)

            	
              The
                Noteholders shall be entitled to receive an additional fee equal
                to 5% of
                the principal amount outstanding on the date hereof, payable on December
                15, 2005 or the Maturity Date, whichever first occurs.
                

            


    

     

    
      
        	 	
                (e)

              	
                Jerome
                  B. Richter (“Richter”) agrees to deliver to the Law Offices of Kevin Finck
                  (“Finck”), within thirty (30) days following the date hereof, 250,000
                  common units of Rio Vista (the “Pledged Units”) in connection with
                  Richter’s previous pledge of 2,000,000 shares of Penn Octane common stock
                  (the “Pledged Shares”) to guaranty the obligations evidenced by the
                  Promissory Notes. In addition, the Noteholders confirm that, subject
                  to
                  the Escrow Agreement (defined below), Finck is authorized to act
                  as
                  collateral agent on behalf of the Noteholders with respect to the
                  Pledged
                  Shares, currently held by Investec (US) Incorporated (“Investec”), as
                  successor to PMG Capital Corp., and the Pledged Units. The Noteholders
                  agree to cause Investec to deliver the Pledged Shares to Finck
                  within
                  thirty (30) days following the date hereof. Penn Octane shall instruct
                  Finck to provide to Amir Ecker, as representative of the Noteholders,
                  with
                  confirmation of receipt of the Pledged Securities within fifteen
                  (15) days
                  following receipt of the Pledged Securities. The Noteholders hereby
                  agree
                  and consent to the Escrow Agreement dated September 30, 2005, by and
                  among Richter, Penn Octane, the Noteholders, and Finck, in the
                  form
                  attached as Exhibit
                  B
                  (the “Escrow Agreement”), and shall execute and deliver the Escrow
                  Agreement together with this amendment letter. The Noteholders
                  agree to
                  execute and deliver any further documents reasonably requested
                  by Finck in
                  connection with the Escrow
                  Agreement.

              


      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      



    Amendment
      To Promissory Note(s)

    September
      30, 2005

    Page
      3 of
      4

    


     

    
      	 	
              (f)

            	
              Penn
                Octane agrees that it will not incur any additional severance payment
                obligation to Richter until the Promissory Notes have been fully
                paid.

            


    

     

    
      	 	
              (g)

            	
              The
                Noteholders agree that Rio Vista and its subsidiaries shall be allowed
                to
                pledge and deliver certain assets (the “Assets”) of Rio Vista and its
                subsidiaries in connection with a loan of $1.3 million to Rio Vista
                and
                its subsidiaries as provided in Section 3.1 of the Purchase and Sale
                Agreement dated August 15, 2005, between Rio Vista Operating Parternship
                L.P. and TransMontaigne Product Services Inc. (“TPSI”). The Noteholders
                further agree that any and all security interests of the Noteholders
                in
                the Assets (i) are hereby subordinated to any and all security interests
                of TPSI in the Assets, and (ii) shall be released if the Assets are
                delivered to TPSI.

            


    

     

    
      	 	
              (h)

            	
              Penn
                Octane agrees that it will be responsible for any legal fees reasonably
                incurred by the Noteholders in connection with the enforcement of
                any
                terms of the Promissory Notes. 

            


    

     

    If
      you
      are in agreement with the terms of this amendment letter, please so indicate
      by
      signing below and faxing an executed copy to Ian Bothwell at (760) 772-8588
      no
      later than the close of business on October 7, 2005.

    


    


    
      	
              Very
                truly yours,

            	 
	 	 	 
	
              Penn
                Octane Corporation

            	 
	 	 	 
	 	 	 
	
              By:

            	/s/
              Ian T. Bothwell	 
	
              Its:

            	
              Vice
                President and Chief Financial Officer

            	 
	 	 	 
	 	 	 
	
              For
                purposes of the first sentence of paragraph (e) above, Jerome B.
                Richter
                has executed this amendment letter as of the date first set forth
                above.

            
	 	 	 
	 	 	 
	/s/
              Jerome B. Richter	 
	
              Jerome
                B. Richter

            	 


    

    


    


    Attachments

    


    Exhibit
      A: 
Promissory
      Note

    Exhibit
      B: 
Escrow
      Agreement


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Amendment
      To Promissory Note(s)

    September
      30, 2005

    Page
      4 of
      4

    


    The
      undersigned holder of the Promissory Note(s) and the Related Agreements referred
      to in this amendment letter hereby acknowledges his/her/its agreement to all
      of
      the provisions of this amendment letter and his/her/its intention to be so
      bound. The undersigned also agrees to keep the contents of this amendment letter
      and any documents or discussions regarding the same strictly confidential and
      not to use the same for any purpose until the earlier of public disclosure
      thereof by Penn Octane Corporation or November 23, 2005; provided, however,
      that the undersigned may consult with his/her/its attorneys and financial
      advisors with respect to the transactions contemplated hereby and, in connection
      therewith, may disclose the terms and contents of this amendment letter and
      any
      other documents relating to the subject matter thereof or hereof, subject to
      the
      agreement and obligation of such attorneys and/or financial advisors to maintain
      the confidentiality of such information.

    


    
      	
              «FirstName» «LastName»

            	 
	
              «Company»

            	 
	
              «Company1»

            	 
	 	 
	 	 
	
              By:

            	  
	 
	 	 
	
              Its:
                

            	  
	 
	 	 
	
              Date:

            	  
	 
	 	 
	
              Promissory
                Note Amount:

            	
              $

            	
              «NoteAmt»

            	 
	 	 
	 	 
	 	 
	
              Name
                and Telephone Number of Noteholder: