SUNRISE ENERGY RESOURCES, INC. 6% SUBORDINATED NOTE DUE JULY 25, 2009
SUNRISE
ENERGY RESOURCES, INC.
CD-1011
6%
SUBORDINATED NOTE DUE JULY 25, 2009
This
6%
Note (hereinafter referred to as “the Note” or “the Notes”) is dated JULY 25,
2006.
Borrower: Sunrise
Energy Resources, Inc.
Address: ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
New
York, NY 10017
The
word
“Borrower” means the original Borrower and anyone else who merges with the
Borrower or assumes the Borrower’s obligations under this
Note. However, the assumption of the Borrower’s obligations under
this Note shall not release the Borrower from such obligations.
Lender:
Millington Solutions Limited
Address:
Suite
▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
The
Lender may transfer all or any part of this Note with written notice to the
Borrower of the transfer, including the name, address of the transferee and
the
amount of the Note transferred. The Borrower may treat the Lender as
the owner of this Note until the Borrower receives a written notice of a
transfer of all or part of this Note to another Lender. The word
“Lender” shall mean the original Lender and anyone else to whom this Note is
transferred.
1.
Promise to
Pay. In return for a loan in the amount of US$1,000,
000 (One million US dollars) that is received from the original Lender,
the Borrower promises to pay to the Lender US$1,000,000 (One million US
dollars) (hereinafter referred to as “the Principal”), plus accrued
interest at a rate of 6% (six percent) per
annum. The proceeds of the Note may be received from the Lender in
tranches. The Borrower will repay the entire principal 3 (three) years from
the
date of each tranche, unless the Lender demands earlier payment under “▇▇▇▇▇▇’s
Right of Acceleration” below or the parties agree to extend the due
date. The Borrower may make earlier principal payments.
2.
Interest
Payments. The Borrower will make annual interest payments to
the Lender in calculated at the rate of 10% annualized and accrued from the
date
of the receipt of each tranche hereunder. The interest shall be payable on
March
31, June 30, September 30 and December 31 beginning on March 31,
2007. However, if an interest payment is due on a Saturday, Sunday or
legal holiday, then the Borrower shall make the interest payment the next
day.
The Borrower may at its sole discretion defer the payments of interest until
the
earlier of maturity or conversion of each tranche. Any deferred accrued interest
shall be added to the outstanding Principal balance on the interest payment
date.
CD-1011
1
3.
▇▇▇▇▇▇’s
Right of Acceleration. The Lender has the right, referred to
as “the Lender’s Right of Acceleration”, to declare the entire unpaid principal
and interest under this Note due immediately for any of the following
reasons:
|
|
(a)
|
If
the Borrower fails to make any payment or principal or interest
within
fifteen days after its due date.
|
|
|
(b)
|
If
the Borrower fails to keep any other covenant made in this Note
within
thirty days after written notice from the
Lender.
|
|
|
(c)
|
If
one or more judgments is entered against the Borrower which exceed,
in the
aggregate, $100,000 if the Borrower does not pay such judgments
or arrange
for their enforcement to be postponed no later than within thirty
days
after the judgments have been
entered.
|
|
|
(d)
|
If
bankruptcy, receivership, or insolvency proceedings are started
by or
against the Borrower, or if the Borrower dissolves, liquidates
or
otherwise winds up its business.
|
4. Agreement
of Subordination. The Lender’s rights to receive payments of
principal, interest and fees under this Note is subordinated to the prior
payment of all loans or other extensions of credit made to the Borrower by
any
bank, savings and loan association, finance company, insurance company or
any
similar financial institution (such loans and extensions of credit, together
with any interest or fees payable on or in connection with such loans and
extensions of credit, are from now on called “Senior Indebtedness”) on the
following types:
|
|
(a)
|
The
Lender shall not be entitled to receive any principal, interest
or fee
payments, and the Borrower shall not make such payments, unless,
at the
time of such payment (i) the Borrower shall have paid all amounts
due at
such time under any Senior Indebtedness, and (ii) the Borrower
shall not
be in default under the terms of any Senior Indebtedness and payment
of
the amount due under this Note would not result in a default under
any
Senior Indebtedness. The word “default” includes defaults
declared by holders of any Senior Indebtedness and any conditions,
event
or act which, with notice or the passage of time, would result
in a
default under any Senior
Indebtedness.
|
|
|
(b)
|
If
bankruptcy, receivership, or insolvency proceedings by or against
the
Borrower or its property occurs, or if the Borrower dissolves,
liquidates
its assets or otherwise winds up its business, the Borrower shall
pay all
outstanding Senior Indebtedness before making any payment of principal,
interest or fees due under this Note. Any payments or
distributions (including distributions of the Borrower’s non-cash assets
or securities that would otherwise be made to the Lender will first
be
paid on account of all outstanding Senior
Indebtedness.
|
|
|
(c)
|
If
the Lender demands early payment of this Note for any reason, the
Borrower
shall first pay all outstanding Senior Indebtedness before making
any
payments under this note.
|
|
|
(d)
|
If
the Lender receives any payment which is not entitled under this
Note, the
Lender shall hold such payment for the benefit of the holder of
Senior
Indebtedness and deliver such payment or distribution to the holders
of
Senior Indebtedness or their representatives for payment on account
of all
outstanding Senior Indebtedness.
|
CD-1011
2
|
|
(e)
|
After
the Senior Indebtedness has been paid in full, the Lender shall
be
entitled to the rights of Senior Indebtedness to receive payments
until
all amounts due under this Note are paid in
full
|
5.
Notices. All
notices under this Note must be in writing. They may be given by (a)
personal delivery, or (b) certified mail, return receipt
requested. Each Party mush accept and claim the notices given by the
other. Notices shall be addressed to the other party at the address
written at the beginning of this Note, or, if the notice is to a Lender to
whom
this Note was transferred, the address stated in the notice to the Borrower
of
such transfer. Either party may notify the other of a change of
address.
6.
Conversion of Convertible
Notes.
|
6.1.
|
Right
to convert. Subject to and upon compliance with the
provisions of this Section 6, at the option of the holder of any
Notes,
such Notes, or any portion of the principal amount thereof, may
at any
time at or before the close of business on the maturity date of
such Notes
be converted at 100% or so much of the principal amount of such
Notes as
are so converted into Common Stock at the Conversion Price, determined
as
hereinafter provided, in effect at the date of the
conversion.
|
|
6.2.
|
Manner
of Exercise of Conversion Privilege. In order to
exercise the conversion privilege, the holder shall surrender this
Note to
the Company at any time during usual business hours at its principal
office in New York City, accompanied by a written notice to the
Company at
such office or agency that the holder elects to convert this Note
or a
specified portion thereof and stating the name or names (together
with the
address) in which the certificate or certificates for shares of
Common
Stock which shall be issued upon conversion. All Notes
surrendered for conversion shall (if so required by the Company)
be
accompanied by proper assignments thereof to the Company or be
blank. As promptly as practicable after the receipt of such
notice and the surrender of this Note as aforesaid the Company
shall issue
and deliver to the holder, or on his written order, a certificate
or
certificates for the number of full shares of Common Stock issuable
on
such conversion in accordance with the provision of this Article
and cash,
as provided in Subsection 3, in respect of any fraction of a share
of
Common Stock otherwise issuable upon such conversion. Such
conversion shall be deemed to have been effected at the close of
business
on the Date of Conversion, and the person or persons in whose name
or
names any certificate or certificates for shares of Common Stock
shall be
issuable upon such conversion shall be deemed to have become the
holder or
holders of record of the shares represented thereby on such date;
provided, however, that any such surrender on any date when the
stock
transfer books of the Company shall be closed shall constitute
the person
or persons in whose name or names the certificate or certificates
for such
shares are to be issued as the record holder or holders thereof
for all
purposes at the close of business on the next succeeding day on
which such
stock transfer books are open, and the Note surrendered shall not
be
deemed to have been converted until such time for all purposes,
but such
conversion shall be at the conversion price in effect at the close
of
business on the date of such surrender. Anything contained in
this Section 6.2 to the contrary notwithstanding, the Company shall
not be
obligated to effect the transfer of any Conversion Shares upon
conversion
of any portion of any Notes or cause any Conversion Shares upon
conversion
of any Notes to be registered in any name or names other than the
name of
the holder of the Notes, converted or to be converted (or such
holder’s
nominee or nominees) unless such holder delivers to the Company
an opinion
of counsel reasonably satisfactory to the Company to the effect
that such
transfer is in compliance with applicable securities
laws.
|
CD-1011
3
In
case
any Note is surrendered for conversion for only a portion of the principal
amount thereof, the Company shall execute and deliver to the holder of such
Note, at the expense of the Company, a new Note in the denomination or
denominations ($1,000 and integral multiples thereof, plus one Note in a
lesser
denomination, if required) as such holder may request in an aggregate principal
amount equal to the unconverted portion of the Note so surrendered.
|
6.3.
|
Fractions
of Share. The Company shall not be required to issue
fractions of a share or scrip representing fractional shares of
Common
Stock upon conversion of the Note. If any fraction of a share
of Common Stock would, except for the provisions of this Section
be
issuable on the conversion of any Notes (or specified portions
thereof),
the Company shall pay a cash adjustment in respect of such fraction,
equal
to the value of such fraction based on the then Conversion
Price.
|
|
6.4.
|
Conversion
Price.
|
|
|
(i)
|
The
price at which shares of Common Stock shall be delivered upon conversion
(herein called the Conversion Price) shall initially be US$1.40
(One US
dollar and forty cents) per share of Common
Stock.
|
|
|
(ii)
|
Each
US$1000 Note Unit shall be convertible into 714 shares of the Borrower’s
common stock.
|
|
|
(iii)
|
The
Conversion Price in effect or to be in effect at any time shall
be subject
to adjustment from time to time as provided in subsection
6.5.
|
|
6.5
|
Adjustment
of Conversion Price and Number of Shares of Common Stock Issuable
upon
Conversion of the Notes. Upon each adjustment of the
Conversion Price, the Note Holders shall thereafter be entitled
to
purchase, at the conversion price resulting from such adjustment,
the
number of shares obtained by multiplying the Conversion Price in
effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment and dividing
the
product thereof by the conversion price resulting from such
adjustment.
|
The
Conversion Price shall be subject to adjustment from time to time as
follows:
A. In
case the Company at any time or from time to time after the date hereof (I)
issues or sells any additional shares of Common Stock for a consideration
per
share less than the Conversion Price in effect immediately prior to the issue
or
sale of such additional shares, or without consideration, or (II) pay or
make a
dividend (other than in cash payable from retained earnings or earned surplus)
or other distribution on Common Stock, then and thereafter successively upon
each such issue, sale, dividend or other distribution, the Conversion Price
for
each share of Common Stock in effect immediately prior to such issue, sale,
dividend or other distribution shall forthwith be reduced to a price (calculated
to the nearest full cent) equal to the quotient obtained by dividing (i)
an
amount equal to the sum of (a) the total number of shares of Common Stock
outstanding immediately prior to such issue sale, dividend or other distribution
multiplied by such Conversion Price in effect immediately prior to such issue,
sale, dividend or other distribution, plus (b) in the case of such an issue
or
sale, the consideration, if any, received by the Company upon such issue
or
sale, or minus (c) in the case of such a dividend or other distribution,
the
amount of such dividend or other distribution, by (ii) the total number of
shares of Common Stock outstanding immediately after such issue, sale, dividend
or other distribution.
CD-1011
4
The
Company shall not be required to make any adjustment of the Conversion Price
if
the amount of such adjustment shall be less than $0.001 per share, but in
such
case any adjustment that would otherwise be required then to be made shall
be
carried forward and shall be made at the time and together with any adjustment
so carried forward, shall amount to not less than $0.001 per share.
For
the
purpose of any adjustment as provided in this subsection A, the following
provisions shall also be applicable:
(i) In
case of the issue of additional shares of Common Stock for cash, the
consideration received by the Company therefore shall be deemed to be the
cash
proceeds received by the Company for such shares, without deduction therefrom
of
any expenses incurred or any underwriting commissions or concessions paid
or
allowed by the Company in connection therewith.
(ii) In
case at any time the Company shall grant any rights to subscribe for or to
purchase, or any options for the purchase of, Common Stock or any stock or
other
securities convertible into or exchangeable for Common Stock (such convertible
or exchangeable stock or securities being herein called “Convertible
Securities”), whether or not such rights or options or the rights to convert or
exchange any such Convertible Securities are immediately exercisable, and
the
price per share for which Common Stock is issuable upon the exercise of such
rights or options or upon conversion or exchange of such Convertible
Securities,
(iii) In
case at any time the Company shall declare a dividend or make any other
distribution upon any stock of the Company payable in Common Stock or
Convertible Securities, any Common Stock or Convertible Securities, as the
case
may be, issuable in payment of such dividend or distribution shall be deemed
to
have been issued or sold without consideration.
(iv) In
case any shares of Common Stock or Convertible Securities or any rights or
options to purchase any such Common Stock or Convertible Securities shall
be
issued or sold, in whole or in part, for a consideration other than cash,
the
amount of the consideration other than cash received by the Company shall
be
deemed to be the fair value of such consideration as determined by the Board
of
Directors of the Company.
CD-1011
5
(v) In
the event of the consolidation of the Company with or the merger of the Company
into any other corporation or of the sale of the properties and assets of
the
Company as, or substantially as, an entirety for stock or other securities
of
any corporation, or the merger of any other corporation into the Company
as a
result of which the holders of shares of Common Stock of the Company shall
be
deemed to have become the holders of, or shall become entitled to, stock
or
other securities of any corporation other than the Company, the Company shall
be
deemed to have issued a number of shares of its Common Stock for such stock
or
securities computed on the basis of the exchange ratio actually applied in
the
transaction and for a consideration equal to the fair market value on the
date
of such transaction of such stock or securities of the other
corporation. If such determination shall cause an adjustment in the
Conversion Price, the determination of the number of shares of Common Stock
issuable upon the conversion of any Convertible Note immediately prior to
such
consolidation, merger or sale for the purpose of subsection (iii) of this
subsection 6.5 shall be made after giving effect to such adjustment of the
Conversion Price.
(vi) In
case of the payment or making of a dividend or other distribution on Common
Stock in property (other than in shares of Common Stock and securities
convertible into or exchangeable for shares for Common Stock, but including
all
other securities) such dividend or other distribution shall be deemed to
have
been paid or make at the close of business at the record date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be the amount of cash and, if in property other than cash,
shall be deemed to be the value of such property as determined in good faith
by
the Board of Directors of the Company at the time of the declaration of such
dividend or other distribution.
(vii) The
number of shares of Common Stock outstanding at any given time shall not
include
shares owned or held by or for the account of the Company, and the disposition
of any such shares shall be considered an issue of sale of Common
Stock.
B. Anything
to the contrary notwithstanding, the Company shall not be required to make
any
adjustment of the Conversion Price in any of the following events:
(i) The
issue of the Convertible Notes of which this note is a part;
(ii) The
issue of shares of Common Stock upon the conversion from time to time of
the
Notes;
(iii) The
issue of not more than 1,000,000 shares of Common Stock upon the exercise
of
options granted under the Company’s Employee’s Qualified Stock Option
Plan;
CD-1011
6
(iv) The
issue of non-qualified stock options (and the issuance of shares upon the
exercise thereof) by the Company to its officers and employees for not exceeding
an aggregate of 1,000,000 shares of Common Stock;
(v) Such
additional shares as may be issuable upon the exercise of such options by
reason
of stock dividends, stock splits, and other changes in the capitalization
of the
Company; and
C. In
case at any time the Company’s shares shall be combined into a small number of
shares, the conversion price in effect immediately prior to such combination
shall remain unchanged.
D. If
any capital reorganization or reclassification of the capital stock of the
Company, or consolidation or merger of the Company with another corporation,
or
the sale of all or substantially all of its assets to another corporation
shall
be effected in such a way that holders of Common Stock (or any other securities
of the Company then issuable upon the conversion of this Note) shall be entitled
to receive stock, securities or assets with respect to or in exchange for
Common
Stock (or such other securities) then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the holder hereof shall thereafter have the right to
purchase and receive upon the basis and upon the terms and conditions specified
in this Convertible Note and in lieu of the shares of the Common Stock (or
other
securities) of the Company immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby, such shares of stock,
securities or assets as my be issued or payable with respect to or in exchange
for a number of shares of such Common Stock (or such other securities)
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby, had such reorganization, reclassification,
consolidation , merger or sale not taken place, and in any case appropriate
provision shall be made with respect to the rights and interest of the holder
of
this Convertible Note to the end that the provisions hereof (including without
limitation provisions fro adjustments of the conversion price and of the
number
of shares purchasable upon the conversion of this Note) shall thereafter
be
applicable, as nearly as may be, in relation to any shares of stock, securities
or assets thereafter deliverable upon the conversion hereof (including an
immediate adjustment, by reason of such consolidation, merger or sale, of
the
conversion price, to the value for the Common Stock reflected by the terms
of
such consolidation, merger or sale if the value so reflected is less than
the
conversion price in effect immediately prior to such consolidation, merger
or
sale). The Company shall not effect any such consolidation, merger or
sale, unless prior to the consummation thereof the successor corporation
(if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume, by written instrument executed
and mailed to the registered holder hereof at the last address of such holder
appearing on the books of the Company, the obligation to deliver to such
holder
such shares of stock, securities or assets, as, in accordance with the foregoing
provisions, such holder may be entitled to purchase. The successor
corporation shall be deemed substituted for the Company for all purposes
of this
Agreement and the Convertible Notes.
CD-1011
7
The
provisions of subsection D governing the substitution of another corporation
for
the Company shall similarly apply to successive instances in which the
corporation then deemed to be the Company hereunder shall either sell all
or
substantially all of its properties and assets to any other corporation or
shall
be the surviving corporation of the merger into it of any other corporation
as a
result of which the holders of any of its tock or other securities shall
be
deemed to have become the holders of, or shall become entitled to, the stock
or
other securities of any corporation other than the corporation at the time
deemed to be the Company hereunder.
|
6.6
|
Notice
of Conversion Price. Upon any adjustment of the
conversion price, than and in each such case the Company shall
give
written notice thereof, to the holder thereof, which notice shall
state
the conversion price resulting from such adjustment and the increase
or
decrease, if any, in the number of shares purchasable at such price
upon
the exercise of this Convertible Note, setting forth in reasonable
detail
the method of calculation and the facts upon which such calculation
is
based.
|
The
Company will, within 90 days after the end of each of its fiscal years, and
at
such other times as the Holder may reasonably request, mail to the holder
of
each Convertible Note at the address of such holder shown on the books of
the
Company a certificate of the independent public accountants for the Company
specifying the Conversion Price in effect as the end of such fiscal year
and the
number of shares of Common Stock, or the kind and amount of any securities
or
property other than Common Stock or both, issuable upon the conversion of
the
Convertible Notes.
|
6.7
|
Notice
of Distributions, Rights of Reorganization, Etc. In
case at any time:
|
(1) the
Company pays any dividend payable in stock upon its Common Stock or make
any
distribution (other than regular cash dividend) to the holders of its Common
Stock;
(2) the
Company shall offer for subscription pro rata to the holders of its Common
Stock
any additional shares of stock of any class or other rights;
(3) there
shall be any capital reorganization, or reclassification of the capital stock
of
the Company, or consolidation or merger of the Company, or sale of all or
substantially all of its assets to, another corporation; or
(4) there
shall be a voluntary or involuntary dissolution, liquidation or winding up
of
the Company;
then
in
any one or more of said cases, the Company shall give written notice, to
the
holder of this Convertible Note, of the date on which (a) the books of the
Company shall close or a record shall be taken for such dividend, distribution
or subscription rights, or (b) such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up shall
take
place, as the case may be. Such notice shall also specify the dates
as of which the holders of Common Stock of record shall participate in such
dividend, distribution or subscription rights, or shall be entitled to exchange
their Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, as the case may be. Such written notice
shall be given at least 20 days prior to the record date or the date on which
the Company’s transfer books are closed in respect thereto.
CD-1011
8
|
6.8
|
Taxes
on Conversion. The issue of stock certificates on
conversion of the Notes shall be made without charge to the converting
Noteholder for any tax in respect of the issue thereof. The
Company shall not, however, be required to pay any tax which may
be
payable in respect of any transfer involved in the issue and delivery
of
stock in any name other than that of the holder of any Note converted,
and
the Company shall not be required to issue or deliver any certificate
in
respect to such stock unless and until the person or persons requesting
the issuance thereof shall have paid to the Company the amount
of such tax
or shall have established to the satisfaction of the Company that
such tax
has been paid.
|
|
6.9
|
Company
to Reserve Stock. The Company shall at all times
reserve and keep available out of its authorized but unissued stock,
for
the purpose of effecting the conversion of the Notes, such number
of its
duly authorized shares of Common Stock as shall from time to time
be
sufficient to effect the conversion of all outstanding
Notes. If any shares of Common Stock, reserved or to be
reserved, for such purposes, required registration under any Federal
or
state law before such shares may be validly issued to the holder,
the
Company covenants that it will in good faith and as expeditiously
as
possibly endeavor to secure such registration or approval, as the
case may
be.
|
The
Company will not take any action which would cause the conversion price to
be
below the then par value, if any, per share of the Common Stock, or in the
case
of no-par stock, below the amount for which such shares may be issued as
fully
paid and nonassesable.
The
Company covenants that all shares of Common Stock which may be issued upon
conversion of Notes will upon issue be fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issue
thereof.
|
6.10
|
No
Rights as Stockholders. Prior to the conversion of any
Note, the holder of such Note shall not be entitled to any rights
of a
stockholder of the Company, including without limitation the right
to
vote, to receive dividends or other distributions or to exercise
any
pre-emptive rights, and shall not be entitled to receive any notice
of any
proceedings of the Company, except as provided
herein.
|
7.
Representations and Warranties of Corporation
|
7.1
|
The
Сompany
represents that it is a corporation duly organized, validly existing
under
the laws of the State of Delaware. The Company is authorized to
issue the
Notes subscribed to by this instrument. Upon payment for the
Notes, the original Lender shall be the owner of duly and validly
issued
Notes. Delivery of the Note Certificates to the original Lender
shall mean
transfer to the Original Lender the title and the right to sell
the Notes,
the rights to receive interest and principal payments, rights to
convert
the Notes into Common Stock, as well as other rights as envisaged
by the
Articles of the Corporation and the US
laws.
|
CD-1011
9
8.
Representations and Warranties of
the Lender
|
8.1
|
Lender’s
Organization. The Lender is duly organized, validly
existing, and in good standing, operating pursuant to the laws
of the
United Kingdom, and has all requisite corporate power and authority
to
carry on its business as currently conducted. The Lender is
also empowered and authorized to purchase the Notes for which it
is
subscribing.
|
|
8.2
|
Private
Sale. The Lender understands that this is a private
offering. The Notes have not been registered under the Act and
are being acquired by the Lender for investment. The Lender
understands that it may not sell the Notes without compliance with
the
Act, applicable portions of which are explained
below.
|
|
8.3
|
Compliance
with Securities Act of 1933. The Lender understands that
the Notes it is acquiring are sold in reliance upon an exemption
from such
registration requirements afforded by Regulation S, governing the
offer
and sale of securities that occur outside the U.S. Regulation S
provides that Notes, sold pursuant to the exemption provided by
that
Regulation, within one (1) year after completion of Notes
purchasing under this Contract (hereinafter referred to as the
“Restricted
Period”), must not be sold without any solicitation or other efforts to
sell the Notes or any re-sale into the United
States.
|
9. No
U.S. Distribution.
|
9.1
|
Lender
is not a US Person. The Lender represents that is not a U.S.
person as defined in Regulation S, promulgated under the
Act. The Lender may be a “distributor” as defined in Regulation
S.
|
|
|
9.2
|
No
Solicitations or Sales to US Person.. The Lender acknowledges that the
Notes cannot be sold in the United States as part of a United States
"distribution" (as such term is defined in the federal securities
laws of
the United States). The Lender has not offered the Notes to any
person in the United States or to any U.S. Person as that term
is defined
in Regulation S. The Lender has no reason to believe that
the purchase of the Notes has been pre-arranged with a Lender in
the
United States. The Lender has not engaged in any "directed
selling efforts" (as that term is defined in Regulation S) to re-sell
the
Notes into the United States or to US Persons; nor has the Lender
conducted any general solicitation to sell the Shares to persons
residing
within the United States or to U.S. Persons. The Lender agrees
that to the extent that it is a distributor, all offers and sales
of the
securities prior to the expiration of the registration period shall
be
made only in accordance with the provision of Rule 903 and Rule
904 under
Regulation S; pursuant to registration of the shares under the
Act, or
pursuant to an exemption from the registration requirements of
the
Act.
|
10.
Restrictive Period Conditions
CD-1011
10
|
10.1.
|
Any
transfer of the Notes resulting in violating the terns of this
Agreement
shall be void. All and any Note transfers by the secretary of the
Corporation or by its transfer agent with making notes in the Securities
Transfer Register of the Corporation shall be carried out only
in
compliance with the provisions of this
Agreement.
|
|
10.2.
|
During
the Restricted Period the Corporation will: refrain from publishing
or
disseminating any material in connection with the offering of the
Notes in
the United States; ensure that all Offering Restrictions as
defined in Regulation S applicable to the sale of Notes pursuant
to this
Contract are thoroughly complied with and satisfied; and refrain
from
engaging, and insure that none of its branches or affiliates will
engage,
in any Directed Selling Efforts as defined in Regulation S with
respect to
the Notes.
|
|
10.3
|
Lender's
Investigation. The Lender has been given a reasonable opportunity to
ask questions of and receive answers from the Corporation concerning
the
Corporation and the Notes for which it is subscribing. The Lender
has such
knowledge and expertise in financial and business matters that
the Lender
is capable of evaluating the merits and risks involved in an investment
in
the Notes. The Lender shall not rely on any received information
apart
from that, which is given in this Contract, as well as on the information,
resulting from any independent study of the Corporation conducted
by the
Lender.
|
▇▇▇▇▇▇
and executed on this date by the Borrower and the Lender.
Borrower: Sunrise
Energy Resources, Inc.
s/
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
Chief
Executive Officer
Lender:
Millington Solutions Limited
s/
Millington Solutions Limited
▇▇▇▇▇▇▇
▇▇▇▇▇▇
Director
CD-1011
11