Document:

Exhibit 10.12

                                                                       BIODIESEL
                                                 National Biodiesel Board Member
gulf hydrocarbon                                                  24 7 BIODIESEL

Introducing Biodiesel to the Petroleum Industry

Monday, April 28, 2008

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

Dear Nick:

This letter sets forth the intent of Methes Energies Canada Inc. ("Company") to
enter into a Production Off Take Agreement (the "POTA") with Gulf Hydrocarbon,
Inc. ("GH") and/or its assigns and together with Company, the "Parties" and each
a "Party"), pursuant to which Company 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.   Company Production Facility. Company will produce biodiesel at a site at
     Sombra, Ontario (the "Company Facility").

2.   Exclusivity. Company intends to market all of its biodiesel output (subject
     to the Reserve Amount, defined in Paragraph 3 below) from the Sombra site
     exclusively to GH. GH shall be reported to be the market or marketer of the
     Company biodiesel. GH shall notify Company 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 Company
     Facility. In recognition of this provision, GH hereby notifies Company that
     GH has executed a POTA with other parties who are considering a location in
     the same area.

     2.1. Exceptions to exclusivity. This exclusivity excludes any productions
          not directly owned by the Company or affiliated company, meaning a
          production by which the Company is only a manager for a client using
          its site. The Company will do all reasonable efforts to enter in same
          type of agreement for their client.

3.   Company Reserve Amount. Company shall have the right to reserve up to ten
     percent (10%) of its monthly biodiesel output (the "Reserve Amount"), which
     Reserve Amount shall not be included in the terms of the POTA. Company
     shall have the right to identify the markets and customers to which it will
     sell the Reserve Amount directly, without marketing assistance or other
     input from GH.

                 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>

4.   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 ten (10) 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
     Company and GH appropriate to transactions of this type.

5.   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.

6.   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, GH not 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; and provided further that Company
     shall be permitted to disclose the existence of this letter of intent to
     the landowner or any other party required to secure real property and other
     requirements in connection with the Proposed Transaction.

     6.1. The Company will do all reasonable effort to minimize disclosure of
          said transaction but considering its intention to become a public
          reporting company, and the requirement of such might not permit the
          Company to prevent such disclosure. Also the Company will provide such
          agreement to financial institution for financing purpose.

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

8.   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
9.   respective lawyers, accountants and financial advisors.

10.  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

<PAGE>

     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. COMPANY 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.

11.  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.

12.  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 15 days after the date of this letter. 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.

                                           Very truly yours,

                                           GULF HYDROCARBON, INC.

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

Accepted:  13th May 2008
           -------------

Methes Energies Canada Inc.

by:  /s/ Nicholas Ng
     ---------------------------------
     Name:  Nicholas Ng
     Title: Director of Business Developmentex10_14.htm

Exhibit 10.14

 

PROMISSORY NOTE

	
$473,556.00
	
January 29, 2009

	  	
Brooklyn, New York

 

FOR VALUE RECEIVED, Softdiffusion S.A. (“Maker”) hereby promises to pay to Methes Energies International Ltd., a Nevada corporation (“Methes”), at Methes’s principal office, Attention: Chief Financial Officer, or at such other place as Methes may designate in
writing from time to time, the principal sum of four-hundred seventy-three thousand five-hundred fifty-six DOLLARS ($473,556.00) in lawful money of the United States of America.

1.           Maturity.  The principal amount of this Note shall be due and payable on March 8, 2010.

2.           Pledge.  This Note is executed and delivered to Methes in payment of the aggregate purchase price for 236,778 shares of Methes’s common stock
(the “Shares”) pursuant to that certain subscription agreement between Maker and Methes dated January 29, 2009.  To secure payment of this Note, Maker hereby grants to Methes a security interest in, and pledges with and delivers to Methes, the Shares.

3.           Prepayment.  Maker may prepay all or any portion of this Note at any time without penalty.  Any such prepayment shall reduce the principal
balance hereof. Upon such prepayment, Methes shall release to Maker that portion of the Shares equal to the amount of any such prepayment at $2.00 per share. The unpaid principal balance of this obligation at any time shall be the principal amount of this Note less the amount of prepayments made thereon by or for the benefit of Maker, which balance shall be set forth and updated from time to time as appropriate on Exhibit A hereto.

4.           Cancellation.  In the event that this Note is not paid in full when due, Methes, in its sole discretion (and without limiting any other rights or remedies
available to Methes hereunder, at law or in equity), may cancel the Shares, excepting that portion of the Shares released to Maker in accordance with Paragraph 3. The certificates representing the Shares not released in accordance with Paragraph 3 shall be retained by Methes until this Note has been paid in full at which time the certificates will be released.

5.           Costs of Collection.  Maker agrees to pay any and all costs, including without limitation attorneys’ fees, costs and expenses (in addition to
any statutory costs) at trial, or on any appellate review, incurred by Methes in enforcing this Note and collecting sums due hereunder.

6.           Waiver of Suretyship Defenses.  Maker and all persons liable or to become liable on this Note waive presentment, protest and demand and notice of protest,
demand, dishonor or nonpayment of this Note.

7.           Waiver.  No delay or failure on the part of Methes to exercise any of its rights hereunder shall be deemed a waiver of such rights or any other right
of Methes, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of such rights or any other right on any future occasion.

 

 

 

 

 

8.           Governing Law; Severability.  This Note is a full recourse Note and shall be construed in accordance with the laws of the State of Nevada, regardless
of choice of law rules applicable in such state.  If any provision or provisions of this Note are found to be unenforceable, the remaining provisions shall nevertheless be enforceable and shall be construed as if the unenforceable provisions were deleted.

9.           Rights and Remedies.  Methes will have all rights and remedies available to it at law or in equity.  All available rights and remedies are
cumulative and may be exercised singularly or concurrently.  Methes’s exercise of one right or remedy is not an election.

	  	  	
MAKER:

	  	  	  
	  	  	
Softdiffusion S.A.

	  	  	  
	  	  	  
	  	  	  
	  	  	
By:  
	/s/ Albert H. Davis	  
	  	  	
Title:  
	Director	  

ACCEPTED AND AGREED:

Methes Energies International, Ltd.

	
By:  
	/s/ Michel G. Laporte	  
	
Title:  
	President & CEO	  

 

 

 

 

2

 

 

Exhibit A

SCHEDULE OF PAYMENTS

(updated from time to time)

	  	
Date
	
Amount
	
Number of Shares

	
Principal Balance
	
1/29/09
	
$473,556.00
	
236,778

	
Prepayment
	
7/8/09
	
$100,000.00
	
50,000

	
REMAINING TOTAL
	
7/8/09
	
$373,556.00
	
186,778

	  	
Date
	
Amount
	
Number of Shares

	
Principal Balance
	
7/8/09
	
$373,556.00
	
186,778

	
Prepayment
	
8/29/09
	
$37,500.00
	
18,750

	
REMAINING TOTAL
	
8/29/09
	
$336,056.00
	
168,028

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