Document:

xfuel_ex103.htm

EXHIBIT 10.3
 
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS SECURITY IS RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION OR SAFE HARBOR THEREFROM. 
 
	No.    ____________
	US $35,000.00

 
XFUELS, INC. 
 
PROMISSORY NOTE DUE MARCH 31, 2017
 
THIS Note is a duly authorized issuance of XFUELS, INC., a Nevada corporation (the "Company") designated as its August 2016 Note.
 
FOR VALUE RECEIVED, the Company promises to pay to SOUTHRIDGE ADVISORS II LLC, the registered holder hereof (the "Holder"), the principal sum of Thirty Five Thousand and 00/100 Dollars (US $35,000.00), plus accrued interest in the amount of ten percent (10%) per annum on all outstanding principal on March 31, 2017 (the “Maturity Date”). The Company will pay the outstanding principal amount of this Note, plus accrued interest, in cash on the Maturity Date to the registered holder of this Note. The wire transfer of such amount shall constitute a payment hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by wire transfer plus any amounts so deducted.
 
This Note is subject to the following additional provisions:
 
1. [RESERVED] 
 
2. This Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended (the "Act"), and other applicable state and foreign securities laws. 
 
3. No provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of this Note plus accrued interest, at the time and place herein prescribed. This Note is a direct obligation of the Company.
 
4. Presentment. Except as set forth herein, the Company waives presentment, demand and presentation for payment, notice of nonpayment and dishonor, protest and notice of protest and expressly agrees that this Note or any payment hereunder may be extended from time to time by the Holder without in any way affecting the liability of the Company.
 

	 
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5. Maximum Rate. All provisions herein made are expressly limited so that in no event whatsoever, whether by reason of advancement of proceeds hereof, acceleration of maturity of the unpaid balance hereof or otherwise, shall the amount paid or agreed to be paid to Holder for the use of the money advanced or to be advanced hereunder exceed the maximum rate of interest allowed to be charged under applicable law (the “Maximum Rate”), regardless of whether or not there has been an acceleration of the payment of principal as set forth herein. If, from any circumstances whatsoever, the fulfillment of any provision of this Note or any other agreement or instrument now or hereafter evidencing, securing or in any way relating to the indebtedness evidenced hereby shall involve the payment of interest in excess of the Maximum Rate, then, ipso facto, the obligation to pay interest hereunder shall be reduced to the Maximum Rate; and if from any circumstance whatsoever, Holder shall ever receive interest, the amount of which would exceed the amount collectible at the Maximum Rate, such amount as would be excessive interest shall be applied to the reduction of the principal balance remaining unpaid hereunder and not to the payment of interest. This provision shall control every other provision in any and all other agreements and instruments existing or hereafter arising between the Maker and Holder with respect to the indebtedness evidenced hereby. 
 
6. This Note shall be governed by and construed in accordance with the laws of the State of New York. Each of the parties consents to the jurisdiction of the federal courts whose districts encompass any part of the City of New York or the state courts of the State of New York sitting in the City of New York in connection with any dispute arising under this Note and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non coveniens, to the bringing of any such proceeding in such jurisdictions. Each of the parties hereby waives the right to a trial by jury in connection with any dispute arising under this Note.
 
7. The following shall constitute an "Event of Default":
 
	 
	a.	The Company shall default in the payment of principal and interest on this Note and same shall continue for a period of five (5) days; or
	 
	 
	 

	 
	b.	Any of the representations or warranties made by the Company herein, in any certificate or financial or other written statements heretofore or hereafter furnished by the Company in connection with the execution and delivery of this Note shall be false or misleading in any material respect at the time made; or
	 
	 
	 

	 
	c.	The Company shall fail to perform or observe, in any material respect, any other covenant, term, provision, condition, agreement or obligation of any Note and such failure shall continue uncured for a period of thirty (30) days after written notice from the Holder of such failure; or
	 
	 
	 

	 
	d.	The Company shall (1) admit in writing its inability to pay its debts generally as they mature; (2) make an assignment for the benefit of creditors or commence proceedings for its dissolution; or (3) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property or business; or
	 
	 
	 

	 
	e.	A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment; or

	 
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	f.	Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial portion of the properties or assets of the Company and shall not be dismissed within sixty (60) days thereafter; or
	 
	 
	 

	 
	g.	Any money judgment, writ or warrant of attachment, or similar process in excess of One Hundred Fifty Thousand ($150,000) Dollars in the aggregate shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of sixty (60) days or in any event later than five (5) days prior to the date of any proposed sale thereunder; or
	 
	 
	 

	 
	h.	Bankruptcy, reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Company and, if instituted against the Company, shall not be dismissed within sixty (60) days after such institution or the Company shall by any action or answer approve of, consent to, or acquiesce in any such proceedings or admit the material allegations of, or default in answering a petition filed in any such proceeding; or

 
Then, or at any time thereafter, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion, the Holder may consider all obligations under this Note immediately due and payable within five (5) days of notice, without presentment, demand, protest or notice of any kinds, all of which are hereby expressly waived, anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately enforce any and all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law.
 
Collection. In the event this Note is placed by Holder in the hands of an attorney for collection, or if Holder incurs any costs incident to the collection of the indebtedness evidenced hereby, the Company agrees to pay to Holder an amount equal to all such costs, including without limitation all reasonable attorneys' fees and all court costs.
 
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by an officer thereunto duly authorized.
 
 
		XFUELS, INC.
	
				
	Dated: August 23, 2016
	By: 	/s/ Michael McLaren
	
			Michael McLaren
	
			(Print Name)
	
	 
	 
	  
	 

			President/CEO
	

 
ATTESTOR
 
By: _________________________
 
 
	3Exhibit 10.1

 

Share Pledge Agreement

 

THIS SHARE PLEDGE AGREEMENT
(this “Agreement”), dated as of September 8, 2016 (the “Effective Date”), is entered into by and between
China Ginseng Holdings, Inc. (“Pledgor”), Changchun City Langyin Small Loan Co., Ltd. (former name: Changchun City
Jikailong Small Loan Co., Ltd.) (the “Creditor”), and Changzhen Liu, Jilin Huamei Beverage Co., Ltd., Huaxia Ginseng
Industry Co., Ltd. (each a “Debtor” and together, the “Debtors”).

 

During the period from
April 2013 to July 2014, Changzhen Liu, Jilin Huamei Beverage Co., Ltd., and Jilin Huaxia Ginseng Industry Co., Ltd. (hereinafter
the “Debtors”) on behalf of China Ginseng Holdings Inc., borrowed from the Creditor, on behalf of the Pledgor, certain
loans that as of June 1, 2016, the aggregate amount of outstanding principal and interest is RMB 37 million (the “Total Outstanding
Balance”). The parties hereto hereby agree as follows:

 

The Creditor agrees to
extend the due date of the Total Outstanding Balance to March 31, 2017 (the “Maturity Date”), and as a consideration,
the Pledgor agrees to pledge 10 million restricted shares of common stock of Pledgor (the “Shares”), to the Creditor,
at market value of $0.4 per share, an equivalent to RMB 26.6 million (the “Secured Loan”), based upon an exchange rate
of 1 USD to 6.65 RMB on the Effective Date.

 

If the Pledgor fails to
repay in full upon the Maturity Date under the terms above (the “Default”), a percentage of the Shares, in proportion
to the outstanding amount in default, will be issued by the Pledgor to the Creditor. The amount of RMB 26.6 million of Secured
Loan will be deducted from the Total Outstanding Balance.

 

In the event of Default,
the Shares to be issued will be issued pursuant to Regulation S under the Securities Act of 1933, as amended, and as such, shall
be restricted. Each certificate representing the Shares shall be endorsed with the following legends, in addition to any other
legend required to be placed thereon by applicable federal or state securities laws:

 

“THE SECURITIESARE
BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“THE
SECURITIES ACT”)) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES
ACT IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT.”

 

“TRANSFER OF THESE
SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES
ACT, OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH
THE SECURITIES ACT.”

 

In this Agreement and
Addendum A, the term "U.S. Person" shall have the meaning ascribed thereto in Regulation S promulgated under the 1933
Act and for the purpose of the Agreement includes any person in the United States.

 

     

     

    

  

The Creditor agrees to be subject to the representation
and warranties attached as Addendum A, and such distribution limitations under the Regulation S of the Securities Act, as amended.

 

[Signature Page Follows]

 

     

     

    

  

IN WITNESS WHEREOF, Pledgor, Creditor and Debtors
have duly executed this Share Pledge Agreement as of the day and year first above written.

 

Creditor:

 

Changchun City Langyin Small Loan
Co., Ltd.

/s/ Xiaochuang Liu

Name: Xiaochuang Liu

Title: Legal Representative

 

Debtors:

 

Jilin Huamei Beverage Co.,
Ltd.

/s/ Changzhen Liu

Name:
Changzhen Liu

Title: Legal Representative

 

Jilin Huaxia Ginseng Industry
Co., Ltd.

/s/ Changzhen Liu

Name:
Changzhen Liu

Title: Legal Representative

 

Changzhen Liu

/s/ Changzhen Liu

 

Pledger:

China Ginseng Holdings
Inc.

/s/ Long He

Name:
Long He

Title: Chief Executive Officer

 

     

     

    

  

Addendum A

NON U.S. PERSON REPRESENTATIONS AND ACKNOWLEDGEMENT
FORM

 

Name of Recipient:
______________________

 

CHINA GINSENG HOLDINGS INC.

 

Ladies and Gentlemen:

 

		1.	Acquirer. I (sometimes referred to herein as the "Acquirer") hereby agree
to acquire the Shares pursuant to Regulation S from China Ginseng Holdings Inc. (the "Company”), on the terms and conditions
described herein.

 

		2.	Disclosure. (a) I understand that this issuance of Shares is made outside the United
States and may not be made to any “U.S. person” as defined in Rule 902(k) under the Securities Act of 1933, as amended
(“Securities Act”) (a “Non-U.S. Person”); (b) The Company may not register any transfer of the Shares not
made in accordance with Regulation S of the Securities Act (“Regulation S”), pursuant to registration under the Securities
Act, or pursuant to an available exemption to registration; provided, however, that if the Shares are in bearer form or foreign
law prevents the Company from refusing to register the Shares transfers, other reasonable procedures are implemented to prevent
any transfer of the Shares not made in accordance with the Provisions of Regulation S.

 

		3.	Acquirer Representations and Warranties. I acknowledge, represent and warrant to,
and agree with, the Company as follows:

 

		(a)	(i) my principal address is outside the United States, (ii) I was located outside the United States
at the time any offer to buy the Shares was made to me and at the time that the buy order was originated by me, and (iii) I am
not a “U.S. person” (as defined in Rule 902(k) under the Securities Act;

 

		(b)	Any Acquirer of the Shares by me will be for my own account or for the account of one or more other
Non U.S. Persons located outside of the United States at the time any offer to buy the Shares was made and at the time that the
buy order was originated by me;

 

     

     

    

  

		(c)	I and any accounts for which I am acting are acquiring the Shares for investment purposes and not
with a view to distribution thereof or with any present intention of offering or selling any of the Shares in violation of the
Securities Act;

 

		(d)	I will not engage in hedging transactions involving the Shares unless in compliance with the Securities
Act;

 

		(e)	I understand that the Shares are being offered in a transaction not involving any public offering
within the United States within the meaning of the Securities Act and that the Shares have not been registered under the Securities
Act and that the Shares will bear the following legend:

 

THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED. THE SHARES WERE ISSUED IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PURSUANT TO REGULATION S PROMULGATED UNDER IT. THE SHARES MAY NOT
BE OFFERED OR SOLD IN THE UNITED STATES UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
TRANSFERS OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANE WITH THE PROVISIONS OF REGULATION
S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. FURTHER, HEDGING
TRANSACTIONS WITH REGARD TO THE SHARES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

 

		(f)	I agree to resell the Shares only in accordance with the provisions of Regulation S pursuant to
registration under the Securities Act, or pursuant to an available exemption from registration;

 

		(g)	I acknowledge that you, the Company and others will rely upon my confirmation, acknowledgments
and agreements set forth herein and I agree to notify you promptly if any of my representations or warranties herein cease to be
accurate and complete; and

 

     

     

    

  

		(h)	I understand that the Company is entitled to rely upon this Acknowledgment and is irrevocably authorized
to produce this Acknowledgment or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.

 

Date:

 

__________________________

Recipient Signature

 

___________________________

Recipient Name (Please print)

 

Address to which correspondence should be directed:

 

______________________________________________________

 

_______________________________________________________

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