Document:

ex10_6.htm

Exhibit 10.6

SUBSCRIPTION AGREEMENT FACE PAGE

(Non-U.S. Persons)

 

METHES ENERGIES INTERNATIONAL LTD.

 

	
Purchased Security:
	
 Common Stock, par value US$0.001 per share (each, a “Share”).

	  	  
	
Subscription Price Per Share:
	
US$_____ per Share

	  	  
	
Number of Shares Subscribed for:
	______________________________
	  	  
	
Minimum Investment:
	
________ Shares (US$______), with additional shares in increments of _______ shares (US$_______).

	  	  

NOTE:    THE SUBSCRIBER MUST PROVIDE THE INFORMATION REQUESTED ON THIS SUBSCRIPTION AGREEMENT FACE PAGE, SIGN AND COMPLETE THE ATTACHED SUBSCRIPTION AGREEMENT AND SEND (1) THE COMPLETED FACE PAGE, (2) A FULLY EXECUTED COPY OF THE SUBSCRIPTION
AGREEMENT, AND (3) THE SUBSCRIPTION PRICE PAYABLE TO “METHES ENERGIES INTERNATIONAL LTD.” TO THE CORPORATION AT 45 MAIN STREET, SUITE 309, BROOKLYN, NEW YORK, USA 11201.

 

PARTICULARS OF SUBSCRIBER

 

	
If an Individual:
	  	
If a Corporation:

	  	  	  
	  	  	
 

	
Full Name
	  	
Full Corporate Name

	  	  	  
	 	 	 
	 	  	
 

	
Residential Address
	  	
Head Office Address

	  	  	  
	  	  	
 

	
City                      State    Zip Code
	  	
City                      State    Zip Code

	  	  	  
	  	  	  
	Telephone   	
                                                                      
Fax     
	  	
Attention

	  	  	  
	  	  	  
	
Social Security Number
	  	Telephone     	
                                                                    
Fax     

	  	  	  
	  	  	  
	  	  	
IRS Employer Identification Number

	  	  	  
	
Registration Instructions:
	  	
Deliver To:

	  	  	  
	  	  	  
	
Name
	  	
Address

	  	  	  
	  	  	  
	
Account reference, if applicable
	  	
Account reference, if applicable

	  	  	  
	  	  	  
	
Address
	  	
Contact Name

	  	  	  
	  	  	  
	  	  	
Telephone Number

 

 

 

 

 

THE SECURITIES TO WHICH THIS AGREEMENT RELATES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “1933 ACT”) OR ANY STATE SECURITIES LAWS, OF ANY STATE OF THE UNITED STATES.  SUCH SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED OR ASSIGNED IN THE UNITED STATES OR BY OR ON
BEHALF OF U.S. PERSONS (AS DEFINED HEREIN) WITHOUT REGISTRATION UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS, UNLESS AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE.

 

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT

(Non-U.S. Persons)

 

Personal & Confidential

 

TO:           METHES ENERGIES INTERNATIONAL LTD.

 

 

PURCHASE OF SECURITIES

 

Subscription

 

The undersigned (the “Subscriber”) hereby irrevocably subscribes for and agrees to purchase from METHES ENERGIES INTERNATIONAL LTD., a Nevada corporation (the “Corporation”), subject to the terms and conditions set forth herein, that number of Shares (the “Securities”) set forth on the Subscription Agreement
Face Page (the “Face Page”), at the subscription price of US$____ (the “Subscription Price”) per Share for a total investment as set forth on the Face Page.

 

The Subscriber agrees to pay to the Corporation the Subscription Price for the Securities subscribed for hereunder by delivering to the Corporation, concurrent upon the execution of this private placement subscription agreement (“Agreement”), a wire transfer, a certified cheque, bank draft or money order for the full amount
of the Subscription Price for the Securities subscribed for hereunder.  The Subscriber hereby acknowledges that the acceptance of this subscription is subject to rejection or allotment, in whole or in part, by the Corporation. The Subscriber acknowledges that the Securities subscribed for hereunder form part of a larger private placement (the “Private Placement”) of up to a maximum of US$6,000,000. Unless otherwise indicated, references in this Agreement to “$” or “dollars”
refer to the currency of the United States of America.  No fractional shares of the Corporation will be issued.

 

The Subscriber acknowledges that the Securities are being sold by the Corporation in the United States of America (the “US”) and in other jurisdictions where it is legal to do so.  Subject to the terms hereof, the subscription will be effective upon its acceptance by the Corporation.  The Private Placement
is not subject to minimum aggregate subscription level and, upon closing, all subscription proceeds will be retained by the Corporation in accordance with the terms hereof.  Subscription proceeds may be accepted in one or more closings of this Private Placement.  The closing of the Private Placement will be subject to receipt of all applicable regulatory approvals.

 

Description of Securities

 

The sale and delivery of the Securities subscribed for hereby is conditional upon such sale being exempt from the prospectus requirements of any applicable statute relating to the sale of such Securities or upon the issuance of such orders, consents or approvals as may be required to permit such sale without the requirement of preparing,
filing, or delivering a prospectus.

 

The Securities may only be resold in compliance with applicable securities laws and regulations. Subscribers should note that the Securities will be subject to statutory restrictions upon resale, including hold periods, and that the certificates representing such Shares will bear a legend to that effect. Subscribers are advised to consult
with their legal advisors in respect of restrictions on resale and the suitability of an investment in the Securities offered hereby.

 

 

- 2 -

 

 

THE CORPORATION AND THE SUBSCRIBER ARE EXECUTING AND DELIVERING THIS AGREEMENT IN RELIANCE UPON AN EXEMPTION FROM SECURITIES REGISTRATION PURSUANT TO REGULATION S (“REGULATION S”) AND THE OTHER RULES AND REGULATIONS PROMULGATED BY THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND/OR UPON SUCH OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AS MAY BE AVAILABLE WITH RESPECT TO ANY OR ALL OF THE INVESTMENTS IN SECURITIES MADE HEREUNDER.

 

Payment

 

The full amount of the Subscription Price for the Securities subscribed for hereunder must accompany this Agreement and shall be paid by wire transfer, certified cheque, bank draft or money order made payable to “METHES
ENERGIES INTERNATIONAL LTD.” with a notation that the funds are being provided as a subscription for shares of METHES ENERGIES INTERNATIONAL LTD.

 

Wire transfers are to be sent pursuant to the following wire transfer instructions:

 

US Dollar Account

 

	
Institution:
	
RBC Centura Bank

	 	
15086 Jog Road

	
 
	
Delray Beach, FL 33446

	  	  
	
ABA:
	
0 6 7 0 1 2 8 8 2

	  	  
	
SWIFT:
	
C N T A U S 3 3

	  	  
	
Account Name:
	
Methes Energies International Ltd.

	  	  
	
Account Number:
	
7 2 7 0 0 0 2 8 8 4

	  	  
	
Notation:
	
For subscription of shares of METHES ENERGIES INTERNATIONAL LTD.

Subscription Procedures

 

The Subscriber undertakes to complete, sign and return one (1) executed copy of this Agreement to the Corporation.

 

The Subscriber shall complete, sign and return to the Corporation as soon as possible on request by the Corporation any documents, questionnaires, notices and undertakings as may be required by regulatory authorities and applicable law.

 

Closing

 

Delivery of and payment for the Securities (the “Closing”) will be completed at the offices of Methes Energies International Ltd 45 Main Street, Suite 309, Brooklyn, New York, USA 11201, on or before the close of business on _________, 20__ (the “Closing Time”) or such earlier or later date or time as the Corporation
shall determine (the “Closing Date”).

 

The Closing will only take place in accordance with all related applicable regulatory approvals and requirements.

 

Certificates representing the Common Stock will be available for delivery against payment to the Corporation of the full amount of the aggregate Subscription Price for the Securities subscribed for hereunder in freely transferable US funds.

 

 

- 3 -

 

 

Representations, Warranties, Acknowledgements and Covenants of the Subscriber

 

The Subscriber hereby represents, warrants, acknowledges and covenants to the Corporation (which representations, warranties, acknowledgments and covenants shall be true and correct on the date thereof and at the Closing Date, with the same force and effect as if they had been made as at the Closing Date and which shall survive Closing)
and acknowledges that the Corporation is relying thereon, that:

 

	
(a)  
	
The Subscriber is located outside the “United States,” as such term is defined in Regulation S, and is not a “U.S. person,” as such term is defined in Regulation S and set forth on Exhibit A, and is not purchasing the Securities by or on behalf a person inside the
United States or a U.S. Person.  The purchase of the Securities was conducted in an “offshore transaction,” as such term is defined in Regulation S, such that when the offer to purchase the Securities was made, such Subscriber was not a person within the United  States, and at the time of purchase, the Subscriber is located outside the United States.

 

	
(b)  
	
The Subscriber is acquiring the Securities for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the 1933 Act, applicable state securities laws and applicable Canadian securities laws; provided, however, that by
making the representations herein, such Subscriber reserves the right to dispose of all or any part of the Securities at any time in accordance with or pursuant to an effective registration statement covering such Securities or an available exemption under the 1933 Act, including, without limitation, Regulation S promulgated under the 1933 Act (“Regulation S”).  The Subscriber further represents that in consummating the transactions set forth herein: there is no intent to place the Securities
offshore in an attempt to evade registration requirements with the result that the incidents of ownership never leave the domestic market, or that all or a substantial portion of any economic risk will be returned to the U.S. market during the restricted period under Rule 903 or that there is no reasonable expectation that the securities could be viewed as actually coming to rest abroad.  There is no intent on the part of the Subscriber to enter into the transactions contemplated hereby for the purpose
of “washing off” the resale restrictions through the use of Rule 904.  Nothing contained herein shall be deemed a representation or warranty by such Subscriber to hold the Securities for any period of time, except that the Subscriber agrees that in connection with the resale of any Securities under Regulation S to comply with the offering restrictions set forth in Regulation S, including Rule 903(b)(2), and to not sell any Securities during the distribution compliance period as defined in
Rule 903(b)(2) to a U.S. person or for the account or benefit of a U.S. person. Such Subscriber is acquiring the Securities hereunder in the ordinary course of its business. Such Subscriber does not have any agreement or understanding, directly or indirectly, with any person to distribute any of the Securities, in violation of United States federal or state securities laws or applicable Canadian or provincial securities laws.

 

	
(c)  
	
The Subscriber has been independently advised as to restrictions with respect to trading in the Securities imposed by applicable securities legislation in the jurisdiction in which it resides, confirms that no representation has been made to it by or on behalf of the Corporation with respect thereto, acknowledges that it is aware of the characteristics
of the Securities, the risks relating to an investment therein and of the fact that it may not be able to resell the Securities except pursuant to exemptions under applicable securities legislation and regulatory policy and that the Securities will be subject to resale restrictions and will bear a legend to this effect;

 

	
(d)  
	
The Subscriber understands that the Securities are being offered and sold to it in reliance on specific exemptions or exclusions from the registration requirements of United States federal and state securities laws and applicable Canadian securities laws and that the Corporation is relying in part upon the truth and accuracy of, and such Subscriber’s
compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Subscriber set forth herein in order to determine the availability of such exemptions and the eligibility of such Subscriber to acquire such securities.

 

	
(e)  
	
The decision to execute this Agreement and purchase the Securities agreed to be purchased hereunder has not been based upon any oral or written representation as to fact or otherwise made by or on behalf of the Corporation, and that the decision is based entirely upon its review (the receipt of which is acknowledged) of information which has been filed
by the Corporation with the applicable securities commissions or exchange in compliance, or intended compliance with applicable securities legislation, including any of the Corporation's financial information currently available.  The Subscriber understands that its investment in the Securities involves a high degree of risk.  The Subscriber has sought such accounting, legal and tax advice, as it has considered necessary, to make an informed investment decision with respect to its acquisition
of the Securities.

 

 

- 4 -

 

 

	
(f)  
	
The Subscriber understands that: (i) the Securities and the Securities have not been registered under the 1933 Act or any applicable state securities laws, and may not be offered for sale, sold, pledged, assigned or otherwise transferred unless (A) subsequently registered thereunder, or (B) such Subscriber shall have delivered to the Corporation an opinion
of counsel in a form reasonably acceptable to the Corporation to the effect that such securities to be sold, assigned, pledged or otherwise transferred may be sold, assigned or transferred pursuant to an exemption from such registration requirements. The Corporation reserves the right to place stop transfer instructions against the shares and certificates for the Securities.

 

	
(g)  
	
The Subscriber agrees that Subscriber will not engage in hedging transactions involving the Securities unless such transactions are in compliance with the 1933 Act;

 

	
(h)  
	
The Subscriber understands that the certificates or other instruments representing the Common Stock and all certificates issued in substitution thereof and in exchange therefore shall bear restrictive legends in substantially the following forms (and a stop ¬transfer order may be placed against transfer of such share certificates), until such time
as it is no longer required under applicable securities laws:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, OR THE LAWS OF ANY FOREIGN JURISDICTION. THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS SUCH SECURITIES
ARE REGISTERED UNDER THE 1933 ACT AND APPLICABLE STATE SECURITIES LAWS OR SUCH SECURITIES ARE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE SECURITIES LAW AND THE COMPANY WILL BE PROVIDED WITH OPINION OF COUNSEL IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY OR OTHER SUCH INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS ARE AVAILABLE.

 

	
  
	
The legends set forth above shall be removed and the Corporation shall issue a certificate without such legend to the holder, unless the legend is otherwise required by state securities laws, (i) in connection with a sale transaction, provided the Securities are registered under the 1933 Act and applicable state securities laws or
(ii) in connection with a sale transaction, after such holder provides the Corporation with an opinion of counsel, which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions and reasonably acceptable to the Corporation, to the effect that a public sale, assignment or transfer of the Common Stock, may be made without registration under the 1933 Act.

 

	
(i)  
	
The Subscriber has not purchased the Securities as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation
or general advertising;

 

	
(j)  
	
this Agreement is not enforceable by the Subscriber unless and until it has been accepted by the Corporation;

 

	
(k)  
	
is resident at the address set out on the Face Page as the Subscriber’s “Residential Address” or “Head Office Address”;

 

	
(l)  
	
if an individual, the Subscriber is of full age of majority and is legally competent to execute this Agreement and take all action pursuant thereto;

 

 

- 5 -

 

 

	
(m)  
	
this Agreement has been duly and validly authorized, executed and delivered by and constitutes a legal, valid, binding and enforceable obligation of the Subscriber;

 

	
(n)  
	
understands that the sale and delivery of the Securities is conditional upon such sale being exempt from the requirements as to the filing of a prospectus or upon the issuance of such orders, consents or approvals as may be required to permit such sale without the requirement of filing a prospectus;

 

	
(o)  
	
if the Subscriber is a corporation, syndicate, partnership or other form of unincorporated organization, the person executing this Agreement on behalf of the Subscriber has the necessary power and authority to do so and the investment contemplated hereby has been duly authorized by all necessary action of the undersigned;

 

	
(p)  
	
if required by applicable securities legislation, policy or order or securities commission, or other regulatory authority, the Subscriber will execute, deliver, file and otherwise assist the Corporation in filing such reports, undertakings and other documents with respect to the issue of the Securities;

 

	
(q)  
	
it has had access to such additional information and has made such investigations, if any, concerning the Corporation as it has considered necessary so as to make an informed investment decision in connection with an investment in the Securities and it has not received, nor has it requested, nor does it have any need to receive, any other document describing
the business and affairs of the Corporation which has been prepared for delivery to, and review by, prospective purchasers in order to assist them in making an investment decision with respect to the Securities;

 

	
(r)  
	
it has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Securities and is able, by virtue of its net worth and knowledge and experience in financial and business matters, to protect its own interests in connection with the investment and bear the economic loss of
such investment without substantially affecting its assets or business affairs;

 

	
(s)  
	
it consents to the Corporation making a notation on its records or giving instructions to any transfer agent of the Securities and any Shares issuable in exchange therefore or in substitution thereof in order to implement the restrictions on transfer set forth herein;

 

	
(t)  
	
as the Securities are subject to resale restrictions under applicable securities laws and regulations the Subscriber shall comply with all relevant securities legislation and policies concerning any resale of the Securities and shall consult with its own legal advisers with respect to such compliance; and

 

	
(u)  
	
the Subscriber acknowledges that the foregoing representations, warranties and acknowledgments and covenants are made by it with the intent that they may be relied upon in determining its eligibility to purchase the Securities under relevant securities legislation. The Subscriber further agrees that by accepting the Securities subscribed for pursuant hereto,
at Closing Time, it shall be representing and warranting that the foregoing representations, warranties and acknowledgments and covenants are true as at the Closing Time with the same force and effect as if they had been made by it as at the Closing Time and will survive the completion of the sale of such Shares. The Corporation shall be entitled to rely on the representations, warranties, acknowledgments and covenants of the Subscriber contained hereto and the Subscriber shall indemnify and hold harmless the
Corporation for any loss or damage it may suffer as a result of any misrepresentation by the Subscriber.

 

Representations and Warranties of the Corporation

 

The Corporation represents and warrants to the Subscriber that, as of the date of this Agreement and at the Closing:

 

	
(a)  
	
it has been duly incorporated and organized and is a valid and subsisting corporation under the laws of the State of Nevada, and is duly qualified to carry on business in the State of Nevada and in each other jurisdiction, if any, wherein the carrying out of the activities contemplated makes such qualifications necessary;

 

 

- 6 -

 

 

	
(b)  
	
it has the full corporate right, power and authority to execute this Agreement, and to issue the Securities to the Subscriber pursuant to the terms of this Agreement;

 

	
(c)  
	
the execution and delivery of and the performance by the Corporation of this Agreement will not constitute a breach of or default under the organizational documents of the Corporation or any agreement, contract or indenture to which the Corporation is a party or by which it is bound;

 

	
(d)  
	
the Securities will be fully paid and non-assessable upon receipt and acceptance of the full consideration therefor; and

 

	
(e)  
	
there is no suit, action, claim, investigation or inquiry by any person or entity or any administrative agency or governmental body, and no legal, administrative or arbitration proceeding pending, or to the Corporation's knowledge, threatened against the Corporation which has or will materially affect the Corporation's ability to consummate the transactions
herein contemplated.

 

Costs

 

The Subscriber acknowledges and agrees that all costs and expenses incurred by the Subscriber (including any fees and disbursements of any special counsel retained by the Subscriber) relating to the purchase of the Securities shall be borne by the Subscriber.

 

Appointment of the Corporation as Agent 

 

The Subscriber hereby irrevocably authorizes the Corporation to:

 

	
(a)  
	
negotiate and settle the form of any other agreement to be entered into in connection with this Private Placement and to waive in whole or in part, or extend the time for compliance with, any of the closing conditions in such manner and on such terms and conditions as the Corporation may determine, acting reasonably, without in any way affecting the Subscriber's
obligations or the obligations of others;

 

	
(b)  
	
swear, execute, file and record on its behalf, this Agreement and any documents necessary to accept delivery of the Securities on the Closing Date, and to terminate this subscription on behalf of the Subscriber in the event that any condition precedent to this Private Placement has not been satisfied;

 

	
(c)  
	
act as its representative at the Closing, to release the funds representing the Total Subscription Price, and to execute in its name and on its behalf all closing receipts and documents required;

 

	
(d)  
	
complete or correct any errors or omissions in any form or document provided by the Subscriber;

 

	
(e)  
	
approve any opinions, certificates or other documents addressed to the Subscriber; and

 

	
(f)  
	
receive on its behalf certificates representing the Securities subscribed.

 

Governing Law

 

This Subscription Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Nevada applicable thereto.  Any and all disputes arising under this Subscription Agreement, whether as to interpretation, performance or otherwise, shall be subject to the
jurisdiction of the courts of the State of Nevada and each of the parties hereto hereby irrevocably submits to the jurisdiction of the courts of such State.

 

Survival

 

This Agreement including, without limitation, the representations, warranties and covenants contained herein, shall survive and continue in full force and effect and be binding upon the parties notwithstanding the completion of the purchase of the Securities by the Subscriber pursuant hereto, the completion of the issue of Shares and any
subsequent disposition by the Subscriber of any of the Securities.

 

 

- 7 -

 

 

Assignment

 

This Agreement is not transferable or assignable.

 

Execution

 

The Corporation shall be entitled to rely on delivery by facsimile machine of an executed copy of this Agreement and acceptance by the Corporation of such facsimile copy shall be equally effective to create a valid and binding agreement between the Subscriber and the Corporation in accordance with the terms hereof.

 

Counterparts

 

This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.  In the event any signature page is delivered by facsimile transmission, the party using
such means of delivery shall cause one (1) original executed signature page to be physically delivered to the other party within five (5) days of the execution and delivery hereof.

 

Severability

 

The invalidity or unenforceability of any particular provision of this Agreement shall not affect or limit the validity or enforceability of the remaining provisions of this Agreement.

 

Entire Agreement

 

Except as expressly provided in this Agreement and in the agreements, instruments and other documents contemplated or provided for herein, this Agreement contains the entire agreement between the parties with respect to the sale of the Securities and there are no other terms, conditions, representations or warranties, whether expressed,
implied, oral or written, by statute, by common law, by the Corporation, by the Subscriber or by any third party.

 

[signature page follows]

 

 

 

 

- 8 -

 

 

IN WITNESS WHEREOF the Subscriber has duly executed this Agreement as of the date first mentioned.

 

	  	  	  
	  	  	  
	
(Name of Subscriber - Please type or print)
	  	
(Signature and, if applicable, Office)

	  	  	  
	
If the Subscriber is signing, as agent for a principal and the Subscriber is not a trust company signing as trustee or as an agent for a fully managed account, please complete the following:

	  	  	  
	  	  	  
	
(Name of Beneficial Purchaser - Please type or print)
	  	
(Address of Subscriber)

	  	  	  
	
(Signature and, if applicable, Office)
	  	
(City, State, Zip code of Subscriber)

 

 

ACCEPTANCE

 

The Corporation hereby accepts the above-mentioned Agreement.

 

DATED at                                           , as of the ______ day of                                                                           ,
2008.

 

 

	 	METHES ENERGIES INTERNATIONAL LTD.	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
 
	
By: 
	 	 
	 	 	            Authorized Signatory	 

 

 

                                                

 

- 9 -

 

 

EXHIBIT A

 

Definition of “U.S. Person” under Regulation S

 

As set forth in Rule 902(k) of Regulation S under the Securities Act of 1933, the term “U.S. person” means:

	
  
	
i.
	
Any natural person resident in the United States;

 

	
  
	
ii.
	
Any partnership or corporation organized or incorporated under the laws of the United States;

 

	
  
	
iii.
	
Any estate of which any executor or administrator is a U.S.person;

 

	
  
	
iv.
	
Any trust of which any trustee is a U.S. person;

	
  
	
v.
	
Any agency or branch of a foreign entity located in the United States;

	
  
	
vi.
	
Any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a US person;

	
  
	
vii.
	
Any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; and

	
  
	
viii.
	
Any partnership or corporation if:

	
  
	
A.
	
Organized or incorporated under the laws of any foreign jurisdiction; and

	
  
	
B.
	
Formed by a US person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts.

 

 

 

 

 

- 10 -Exhibit 10.7

                                                                          DIESEL
                                                 National Biodiesel Board Member
gulf hydrocarbon                                                  24 7 BIODIESEL

Introducing Biodiesel to the Petroleum Industry

7/13/2007

Nicholas Ng
Methes Energies
4090 Ridgeway Drive, Unit 19
Mississauga, Ontario L5L 5X5

Dear Nick:

     This letter sets forth the intent of Methes Energies ("Methes") to enter
into a Production Off Take Agreement (the "POTA") with Gulf Hydrocarbon, Inc.
("GH") and together with Methes, the "Parties" and each a "Party"), pursuant to
which Methes agrees to supply all or a portion of its biodiesel output to GH and
GH agrees to take and pay for such biodiesel (the "Proposed Transaction"), in
the manner set forth below.

     1.   Methes Production Facility. Methes will produce biodiesel at a site in
Ontario to be determined (the "Methes ON Facility").

     2.   Exclusivity. Methes intends to market all of its biodiesel output
(subject to the Reserve Amount, defined in Paragraph 3 below) exclusively to GH.
GH shall be reported to be the market or marketer of the Methes biodiesel. GH
shall notify Methes in writing prior to engaging in any discussions or
negotiations or entering into any agreement or understanding with any other
person or entity regarding another biodiesel production off take agreement
within one hundred (100) miles of the Methes ON Facility.

     3.   POTA Terms. The Parties intend to negotiate, in addition to those
terms and conditions described in Paragraphs 2 and 3 above, the following terms
and conditions with respect to the POTA: the term (one year with automatic
renewal unless terminated by either Party with thirty (30) days notice), the
price redetermination period (sixty (60) days prior to the end of each term),
the price structure (to be floating price equal to the sum of the regional ultra
low sulfur diesel price per gallon plus a premium to be determined), the payment
structure (to be net fifteen (15) days after delivery), feedstock type and
source, logistics, biodiesel storage and appropriate loading infrastructure for
trucks, railcars and marine vessels with temperature corrected meters, quality
monitoring and bills of lading identifying the quality of biodiesel produced and
the treatment of the blenders credit (to be passed on to GH). The POTA shall
contain representations, warranties, covenants and indemnities on the part of
the Methes and GH appropriate to transactions of this type.

                2016 Main Street, Suite 104 o Houston, TX 77002
        Phone: 713 523-7755 o Fax: 713 523-7758 o Toll Free: 800 834-0202
                             www.gulfhydrocarbon.com

<PAGE>

Nicholas Ng
Methes Energies
7/13/2007
Page 2

     4.   Cooperation. The Parties shall cooperate in good faith and use their
reasonable efforts with respect to negotiation of the POTA, and any other
definitive documentation and necessary filings and governmental and third party
consents and approvals.

     5.   Non-Disclosure/Public Announcement. Except as required by law or in
response to a request by regulatory or judicial authorities having jurisdiction
over the applicable Party, neither Party will disclose to any third party the
terms of the Proposed Transaction or the nature of the discussions between the
Parties without the prior written permission of the other Party, other than
information which becomes generally available to the public without violation of
the terms hereof; provided that no Party is precluded by this letter of intent
from confidential discussions with such Party's legal counsel, accountants,
advisors, representatives, agents and potential lenders as reasonably deemed
necessary by such Party in order to facilitate the Proposed Transaction.

     6.   Termination. This letter of intent shall expire on the date that is
the earlier of (i) two years from the date hereof or (ii) the date of the
execution of the POTA described herein.

     7.   Fees, Costs and Expenses. Each Party shall bear its respective costs
related to the Proposed Transaction, including, without limitation, the fees and
expenses of its respective lawyers, accountants and financial advisors.

     8.   Governing Law. This letter of intent will be governed by and construed
in accordance with the laws of Texas without regard to the conflict of law rules
thereof, and each party consents to the exclusive jurisdiction of the United
States District Court for the Southern District of Texas or any Texas State
court sitting in Houston, Texas. Each of the parties waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of venue of any such proceedings in such a court and any claim that any
such proceedings brought in such a court have been brought in an inconvenient
forum. METHES AND GH UNCONDITIONALLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL FOR ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR
INDIRECTLY, THIS LETTER OF INTENT.

<PAGE>

Nicholas Ng
Methes Energies
7/13/2007
Page 3

     9.   Counterparts. This letter of intent may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

     10.   Effect. If the foregoing accurately summarizes our understanding with
respect to the Proposed Transaction, please date and execute the duplicate
original of this letter that is enclosed and return the same to the undersigned
not later than July 31, 2007. This letter of intent sets forth the parties'
intentions with respect to a possible transaction, but, except for Paragraphs 6,
7, 8 and 9, which shall be binding, shall not give rise to any binding
obligations. No such obligations (except for paragraphs 6, 7, 8 and 9, which
shall immediately be binding upon your acceptance of this letter of intent)
shall arise unless and until mutually satisfactory definitive documentation has
been executed and delivered by the Parties.

<PAGE>

Nicholas Ng
Methes Energies
7/13/2007
Page 4

                                           Very truly yours,

                                           GULF HYDROCARBON, INC.

                                           By: /s/ Jess Hewitt
                                               ---------------------------------
                                               Name:   Jess Hewitt
                                               Title:  President

Accepted:  20th July 2007
           --------------

METHES ENERGIES

by:  /s/ Han Ng
     ---------------------------------
     Name:  Han Ng
     Title: DIRECTOR OF BUSINESS DEVELOPMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]