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EXHIBIT 10.1
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”).  THESE
SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO
THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A
THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A
TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE,
FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION,
IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY.  HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.

 
10% CONVERTIBLE PROMISSORY NOTE
 
 
Polar Petroleum Corp.
 
 
DUE September 5, 2016
 
Original Issue Date: September 6, 2013
US$75,000

 
Article I.
 
Section 1.01                                 Principal and Interest.  (a) FOR
VALUE RECEIVED, Polar Petroleum Corp., a Nevada corporation (the “Company”),
hereby promises to pay to the order of US Energy Investments Ltd. or its
registered assigns (“Holder”), in lawful money of the United States of America
and in immediately available funds the principal sum of Seventy Five Thousand
Dollars ($75,000.00) on Septemebr 5, 2016 (the “Maturity Date”).
 
(b) The Company further promises to pay interest in cash on the unpaid principal
amount of this Note at a rate per annum equal to ten percent (10%), commencing
to accrue on the date hereof and payable on the Maturity Date or earlier
prepayment as provided herein.  Interest will be computed on the basis of a
360-day year of twelve 30-day months for the actual number of days elapsed.
 
(c) The Company may prepay all or any portion of the principal amount of this
Note without penalty and without the prior written consent of the Holder.
 
Section 1.02                                 Optional Conversion.  (a) Subject
to the provisions of Section 1.03, at any time or times on or after the Original
Issue Date, the Holder shall be entitled to convert all or any portion of the
outstanding and unpaid principal amount of this Note, together with accrued and
unpaid interest thereon to the date of conversion, into validly issued, fully
paid and non-assessable shares of common stock of the Company (“Common Stock”)
in the manner provided below, at a conversion price per share of Common Stock to
be mutually agreed by the Company and the Holder, which in no event shall be
less than $0.20 per share of Common Stock (the “Conversion Price”).  The Company
shall not issue any fraction of a share of Common Stock upon any conversion.  If
the issuance would result in the issuance of a fraction of a share of Common
Stock, the Company shall round such fraction of a share of Common Stock up to
the nearest whole share.  The Company shall pay any and all transfer, stamp,
issuance and similar taxes that may be payable with respect to the issuance and
delivery of Common Stock upon conversion of any Conversion Amount.
 
 
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(b) The number of Conversion Shares issuable upon conversion of this Note shall
be determined by the quotient obtained by dividing (i) the outstanding principal
amount of this Note and accrued but unpaid interest hereon on the Conversion
Date by (ii) the Conversion Price then in effect.  The calculation by the
Company of the number of Conversion Shares to be received by the Holder upon
conversion hereof, and of the applicable Conversion Price, shall be conclusive
absent manifest error.
 
(c)  To convert any portion of the unpaid principal of this Note into shares of
Common Stock on any date (a “Conversion Date”), the Holder shall (i) transmit by
facsimile (or otherwise deliver), for receipt on or prior to 12:00 noon.,
Eastern Standard time, on such date, a copy of an executed notice of conversion
in the form attached hereto as Exhibit I  (the “Conversion Notice”) to the
Company and (ii) surrender this Note to a nationally recognized overnight
delivery service for delivery to the Company (or an indemnification undertaking
with respect to this Note in the case of its loss, theft or destruction).  On or
before the fifth (5th) trading day for the Common Stock following the date of
receipt of a Conversion Notice (the “Share Delivery Date”), the Company shall
cause the Company’s transfer agent to (i) provided that the transfer agent is
participating in the Fast Automated Securities Transfer Program of DTC, credit
such aggregate number of shares of Common Stock to which the Holder shall be
entitled to the Holder’s balance account with DTC through its Deposit Withdrawal
Agent Commission system, or (ii) if the Transfer Agent is not participating in
the DTC Fast Automated Securities Transfer Program, issue and deliver to the
Holder at the address as specified in the Conversion Notice, a certificate,
registered in the name of the Holder, for the number of shares of Common Stock
to which the Holder shall be entitled.  If the outstanding principal amount of
this Note is greater than the principal portion of being converted, then the
Company shall as soon as practicable after receipt of this Note, at its own
expense, issue and deliver to the Holder a new Note representing the outstanding
principal amount not converted.  Such new Note (i) shall be of like tenor with
this Note, (ii) shall represent, as indicated on the face of such new Note, the
principal amount remaining outstanding, (iii) shall have an issuance date, as
indicated on the face of such new Note, which is the same as the Original Issue
Date of this Note, (iv) shall have the same rights and conditions as this Note,
and (v) shall represent accrued and unpaid interest on the unpaid principal
amount of this Note from the Original Issue Date.

(d)  The person or persons entitled to receive the shares of Common Stock
issuable upon a conversion of this Note shall be treated for all purposes as the
record holder or holders of such shares of Common Stock from the Conversion
Date.

Section 1.03                                 Maximum
Conversion.  Notwithstanding anything to the contrary contained in this Note,
this Note shall not be convertible by the Holder hereof into Common Stock to the
extent (but only to the extent) that such conversion would cause the Holder and
its affiliates (if they are not, prior to such conversion, already beneficial
owners of greater than 4.99% (the “Maximum Percentage”) of the Company’s
outstanding Common Stock) to beneficially own in excess of the Maximum
Percentage of the Company’s outstanding Common Stock; provided, however, that
the Holder may waive the limitation imposed by this subsection, and/or increase
the Maximum Percentage to some other amount, upon at least sixty-one (61) days’
written notice to the Company prior to the Conversion Date.  For the purposes of
this Section, beneficial ownership and all determinations and calculations
(including, without limitation, with respect to calculations of percentage
ownership) shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.  The limitations contained in this paragraph shall apply
to a successor Holder of this Note.
 
Section 1.04                                 Absolute
Obligation/Ranking.  Except as expressly provided herein, no provision of this
Note shall alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of, and liquidated damages (if any) on, this
Note at the time, place, and rate, and in the coin or currency, herein
prescribed.  This Note is a direct debt obligation of the Company.
 
Section 1.05                                 Different Denominations.  This Note
is exchangeable for an equal aggregate principal amount of Notes of different
authorized denominations, as requested by the Holder surrendering the same.  No
service charge will be made for such registration of transfer or exchange.
 
Section 1.06                                 Reliance on Note Register.  Prior
to due presentment to the Company for permitted transfer or conversion of this
Note, the Company and any agent of the Company may treat the person in whose
name this Note is duly registered as the owner hereof for the purpose of
receiving payment as herein provided and for all other purposes, whether or not
this Note is overdue, and neither the Company nor any such agent shall be
affected by notice to the contrary.
 
 
 
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Article II.
 
Section 2.01                                 Events of Default.  Each of the
following events shall constitute a default under this Note (each an “Event of
Default”):
 
(a) failure by the Company to pay any principal amount or interest due hereunder
within five (5) days of the date such payment is due;
 
(b) the Company or any Subsidiary shall:  (i) make a general assignment for the
benefit of its creditors; (ii) apply for or consent to the appointment of a
receiver, trustee, assignee, custodian, sequestrator, liquidator or similar
official for itself or any of its assets and properties; (iii) commence a
voluntary case for relief as a debtor under the United States Bankruptcy Code;
(iv) file with or otherwise submit to any governmental authority any petition,
answer or other document seeking: (A) reorganization, (B) an arrangement with
creditors or (C) to take advantage of any other present or future applicable law
respecting bankruptcy, reorganization, insolvency, readjustment of debts, relief
of debtors, dissolution or liquidation; (v) file or otherwise submit any answer
or other document admitting or failing to contest the material allegations of a
petition or other document filed or otherwise submitted against it in any
proceeding under any such applicable law, or (vi) be adjudicated a bankrupt or
insolvent by a court of competent jurisdiction;
 
(c) any case, proceeding or other action shall be commenced against the Company
or any Subsidiary for the purpose of effecting, or an order, judgment or decree
shall be entered by any court of competent jurisdiction approving (in whole or
in part) anything specified in Section 2.01(b) hereof, or any receiver, trustee,
assignee, custodian, sequestrator, liquidator or other official shall be
appointed with respect to the Company, or shall be appointed to take or shall
otherwise acquire possession or control of all or a substantial part of the
assets and properties of the Company, and any of the foregoing shall continue
unstayed and in effect for any period of sixty (60) days;
 
(d) any material breach by the Company of any of its representations or
warranties contained in this Note; or
 
(e) any default, whether in whole or in part, shall occur in the due observance
or performance of any obligations or other covenants, terms or provisions to be
performed by the Company under this Note which is not cured within five (5)
business days after receipt of written notice thereof.
 
Section 2.02                                 If any Event of Default specified
in Section 2.01(b) or Section 2.01(c) occurs, then the full principal amount of
this Note, together with any other amounts owing in respect thereof, to the date
of the Event of Default, shall become immediately due and payable without any
action on the part of the Holder, and if any other Event of Default occurs, the
full principal amount of this Note, together with any other amounts owing in
respect thereof, to the date of acceleration shall become, at the Holder’s
election, immediately due and payable in cash.  All Notes for which the full
amount hereunder shall have been paid in accordance herewith shall promptly be
surrendered to or as directed by the Company.  The Holder need not provide, and
the Company hereby waives, any presentment, demand, protest or other notice of
any kind, and the Holder may immediately and without expiration of any grace
period enforce any and all of its rights and remedies hereunder and all other
remedies available to it under applicable law.  Such declaration may be
rescinded and annulled by the Holder at any time prior to payment hereunder and
the Holder shall have all rights as a Note holder until such time, if any, as
the full payment under this Section shall have been received by it.  No such
rescission or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon.
 
Section 2.03                                 If any Event of Default occurs, in
addition to the remedies provided in the preceding Section and any other rights
or remedies available to the Holder under applicable law, no later than five (5)
business days after the date of such Event of Default, or such later date as the
Borrower may in writing agree, the Holder may request that the Borrower make
available to the Holder such security as the Holder shall in its absolute
discretion determine, and pending provision of such security and thereafter the
Borrower shall not create or agree to create any mortgage or charge on any part
of its assets.
 
Article III.
 
Section 3.01                                 Covenants.  So long as this Note
shall remain in effect and until any outstanding principal and interest and all
fees and all other expenses or amounts payable under this Note have been paid in
full, unless the Holder shall otherwise consent in writing (such consent not to
be unreasonably withheld), the Company shall:
 
(a) Share Issuances.  Issue any shares of its capital stock other than in
connection with a conversion of this Note.
 
(b)  Notice of Default.  Promptly advise the Holder in writing of the occurrence
of any Event of Default of which the Company is aware.
 
 
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Article IV.
 
Section 4.01                                 Representations of the
Company.  The Company hereby represents and warrants to the Holder that:
 
(a) The Company has the requisite corporate power and authority to enter into
and perform its obligations under this Note, (ii) the execution and delivery of
this Note by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by the Company’s Board of
Directors, and no further consent or authorization is required by the Company,
its Board of Directors or its stockholders, (iii) this Note has been duly
executed and delivered by the Company, (iv) this Note constitutes the valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors’ rights and remedies.
 
(b) The execution, delivery and performance of this Noteby the Company, and the
consummation by the Company of the transactions contemplated hereby, will not
(i) result in a violation of the Articles of Incorporation or by-laws (or
equivalent constitutive document) of the Company or (ii) violate or conflict
with, or result in a breach of any provision of, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company is
a party, or result in a violation of any law, rule, regulation, order, judgment
or decree (including U.S. federal and state securities laws and regulations)
applicable to the Company or by which any property or asset of the Company is
bound or affected, except for those which could not reasonably be expected to
have a material adverse effect on the assets, business, condition (financial or
otherwise), results of operations or future prospects of the Company.
 
(c) There is no action, suit, proceeding, inquiry or investigation before or by
any court, public board, government agency, self-regulatory organization or body
pending against or affecting the Company or any subsidiary, wherein an
unfavorable decision, ruling or finding would adversely affect the validity or
enforceability of, or the authority or ability of the Company to perform its
obligations under, this Note.
 
Section 4.02                                 Representations of the Holder.  The
Holder hereby represents and warrants to the Company that:
 
(a) Investment Purpose. The Holder is acquiring this Note, and, upon conversion
of this Note, the Holder will acquire the shares of Common Stock into which this
Note may be converted (the “Conversion Shares” and, together with this Note, 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 Securities
Act of 1933, as amended (the “Securities Act”); provided, however, that by
making the representations herein, such Holder reserves the right to dispose 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 Securities Act.  The Holder agrees not to sell, hypothecate or otherwise
transfer the Securities unless such Securities are registered under the federal
and applicable state securities laws or unless, in the opinion of counsel
satisfactory to the Company, an exemption from such law is available.
 
(b) Accredited Investor Status.  The Holder meets the requirements of at least
one of the suitability standards for an “Accredited Investor” as that term is
defined in Rule 501(a)(3) of Regulation D under the Securities Act.
 
(c) Investor Qualifications.  The Holder (i) if a natural person, represents
that the Holder has reached the age of 21 and has full power and authority to
execute and deliver this Note and all other related agreements or certificates
and to carry out the provisions hereof and thereof; (ii) if a corporation,
partnership, or limited liability company or partnership, or association, joint
stock company, trust, unincorporated organization or other entity, represents
that such entity was not formed for the specific purpose of acquiring this Note,
such entity is duly organized, validly existing and in good standing under the
laws of the state of its organization, the consummation of the transactions
contemplated hereby is authorized by, and will not result in a violation of
state law or its charter or other organizational documents, such entity has full
power and authority to execute and deliver this Note and all other related
agreements or certificates and to carry out the provisions hereof and thereof
and to purchase and hold this Note, the execution and delivery of this Note has
been duly authorized by all necessary action, this Note has been duly executed
and delivered on behalf of such entity and is a legal, valid and binding
obligation of such entity; or (iii) if executing this Note in a representative
or fiduciary capacity, represents that it has full power and authority to
execute and deliver this Note in such capacity and on behalf of the subscribing
individual, ward, partnership, trust, estate, corporation, or limited liability
company or partnership, or other entity for whom the Holder is executing this
Note, and such individual, partnership, ward, trust, estate, corporation, or
limited liability company or partnership, or other entity has full right and
power to perform pursuant to this Note and make an investment in the Company,
and represents that this Note constitutes a legal, valid and binding obligation
of such entity.  The execution and delivery of this Note will not violate or be
in conflict with any order, judgment, injunction, agreement or controlling
document to which the Holder is a party or by which it is bound.
 
 
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(d) Solicitation.  The Holder is unaware of, is in no way relying on, and did
not become aware of the offering of this Note through or as a result of, any
form of general solicitation or general advertising including, without
limitation, any article, notice, advertisement or other communication published
in any newspaper, magazine or similar media or broadcast over television or
radio, in connection with the offering and sale of this Note and is not
subscribing for this Note and did not become aware of the offering of this Note
through or as a result of any seminar or meeting to which the Holder was invited
by, or any solicitation of a subscription by, a person not previously known to
the Holder in connection with investments in securities generally.
 
(e) Brokerage Fees.  The Holder has taken no action that would give rise to any
claim by any person for brokerage commissions, finders’ fees or the like
relating to this Note or the transaction contemplated hereby (other than
commissions to be paid by the Company to the Brokers).
 
(f) Knowledge and Experience.  The Holder has such knowledge and experience in
financial, tax, and business matters, and, in particular, investments in
securities, so as to enable it to utilize the information made available to it
in connection with this Note to evaluate the merits and risks of an investment
in this Note and the Company and to make an informed investment decision with
respect thereto.
 
(g) Liquidity.  The Holder has adequate means of providing for such Holder’s
current financial needs and foreseeable contingencies and has no need for
liquidity of its investment in this Note for an indefinite period of time, and
after purchasing this Note the Holder will be able to provide for any
foreseeable current needs and possible personal contingencies.  The Holder must
bear and acknowledges the substantial economic risks of the investment in this
Note including the risk of illiquidity and the risk of a complete loss of this
investment.
 
(h) High Risk Investment.  The Holder is aware that an investment in this Note,
and upon conversion of this Note, the Conversion Shares, involves a number of
very significant risks and has carefully researched and reviewed and understands
the risks of, and other considerations relating to, the purchase of this Note,
and upon conversion of this Note, the Conversion Shares.
 
(i) Reliance on Exemptions.  The Holder understands that this Note is being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and such Holder’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Holder set forth herein in order to determine the
availability of such exemptions and the eligibility of such Holder to acquire
such securities.
 
(j) Information.  The Holder has been furnished with all documents and materials
relating to the business, finances and operations of the Company and its
subsidiaries and information that Holder requested and deemed material to making
an informed investment decision regarding its purchase of this Note.  The Holder
has been afforded the opportunity to review such documents and materials and the
information contained therein.  The Holder has been afforded the opportunity to
ask questions of the Company and its management.  The Holder understands that
such discussions, as well as any written information provided by the Company,
were intended to describe the aspects of the Company’s and its subsidiaries’
business and prospects which the Company believes to be material, but were not
necessarily a thorough or exhaustive description, and except as expressly set
forth in this Note, the Company makes no representation or warranty with respect
to the completeness of such information and makes no representation or warranty
of any kind with respect to any information provided by any entity other than
the Company.  Some of such information may include projections as to the future
performance of the Company and its subsidiaries, which projections may not be
realized, may be based on assumptions which may not be correct and may be
subject to numerous factors beyond the Company’s and its subsidiaries’
control.  Additionally, Holder understands and represents that it is purchasing
this Note notwithstanding the fact that the Company and its subsidiaries, if
any, may disclose in the future certain material information Holder has not
received, including the financial results of the Company and its subsidiaries
for their current fiscal quarters.  Neither such inquiries nor any other due
diligence investigations conducted by such Holder shall modify, amend or affect
such Holder’s right to rely on the Company’s representations and warranties
contained herein.  The Holder has sought such accounting, legal and tax advice
as it has considered necessary to make an informed investment decision with
respect to its investment in this Note.
 
 
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(k) No Other Representations or Information.  In evaluating the suitability of
an investment in this Note, the Holder has not relied upon any representation or
information (oral or written) with respect to the Company or its subsidiaries,
or otherwise, other than as stated in this Note.  No oral or written
representations have been made, or oral or written information furnished, to the
Holder in connection with the offering of this Note.
 
(l) No Governmental Review.  The Holder understands that no United States
federal or state agency or any other government or governmental agency has
passed on or will pass on, or has made or will make, any recommendation or
endorsement of this Note (or the Conversion Shares), or the fairness or
suitability of the investment in this Note (or the Conversion Shares), nor have
such authorities passed upon or endorsed the merits of the offering of this Note
(or the Conversion Shares).
 
(m) Transfer or Resale.  The Holder understands that: (i) this Note has not been
and are not being registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, or (B) such Holder shall have delivered to
the Company an opinion of counsel, in a generally acceptable form, to the effect
that such securities to be sold, assigned or transferred may be sold, assigned
or transferred pursuant to an exemption from such registration requirements;
(ii) any sale of such securities made in reliance on Rule 144 under the
Securities Act (or a successor rule thereto) (“Rule 144”) may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of such securities under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register such securities under the Securities
Act or any state securities laws or to comply with the terms and conditions of
any exemption thereunder.  There can be no assurance that there will be any
market or resale for this Note (or the Conversion Shares), nor can there be any
assurance that this Note (or the Conversion Shares) will be freely transferable
at any time in the foreseeable future.
 
(n) Legends.  The Holder understands that the certificates representing the
Conversion Shares shall bear a restrictive legend in substantially the following
form (and a stop transfer order may be placed against transfer of such stock
certificates):
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE
SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO
THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A
THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A
TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE,
FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION,
IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY. HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.
 
(o) Confidentiality.  The Holder acknowledges and agrees that all of the
information received by it in connection with the transactions contemplated by
this Note is of a confidential nature and may be regarded as material non-public
information under Regulation FD promulgated by the SEC and that such information
has been furnished to the Holder for the sole purpose of enabling the Holder to
consider and evaluate an investment in this Note.  The Holder agrees that it
will treat such information in a confidential manner, will not use such
information for any purpose other than evaluating an investment in this Note,
will not, directly or indirectly, trade or permit the Holder’s agents,
representatives or affiliates to trade in any securities of the Company while in
possession of such information and will not, directly or indirectly, disclose or
permit the Holder’s agents, representatives or affiliates to disclose any of
such information without the Company’s prior written consent.  The Holder shall
make its agents, affiliates and representatives aware of the confidential nature
of the information contained herein and the terms of this section including the
Holder’s agreement to not disclose such information, to not trade in the
Company’s securities while in the possession of such information and to be
responsible for any disclosure or other improper use of such information by such
agents, affiliates or representatives.  Likewise, without the Company’s prior
written consent, the Holder will not, directly or indirectly, make any
statements, public announcements or other release or provision of information in
any form to any trade publication, to the press or to any other person or entity
whose primary business is or includes the publication or dissemination of
information related to the transactions contemplated by this Note.
 
 
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(p) No Legal Advice from the Company.  The Holder acknowledges that it has had
the opportunity to review this Note and the transactions contemplated by this
Note with its own legal counsel and investment and tax advisors.  The Holder is
relying solely on such advisors and not on any statements or representations of
the Company or any of its employees, representatives or agents for legal, tax,
economic and related considerations or investment advice with respect to this
investment, the transactions contemplated by this Note or the securities laws of
any jurisdiction.
 
(q) No Group Participation.  The Holder and its affiliates is not a member of
any group, nor is any Holder acting in concert with any other person, including
any other Holder, with respect to its acquisition of this Note (and the
Conversion Shares).
 
Article V.
 
Section 5.01                                Notice.  Notices regarding this Note
shall be sent to the parties at the following addresses, unless a party notifies
the other parties, in writing, of a change of address:
 
If to the Company:
4300 B Street
Suite 505
Anchorage,
AK 99503
USA
 
   
If to the Holder:
Shanghai Silver Court
3 / F Silver Office Tower
85 Taoyuan Road
Luwan District
Shangai 200021
PRC

Section 5.02                                Governing Law; Jurisdiction.  All
questions concerning the construction, validity, enforcement and interpretation
of this Note shall be governed by and construed and enforced in accordance with
the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof.  Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of the transactions
contemplated by this Note (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced in the state and federal courts sitting in the City of New
York, Borough of Manhattan (the “New York Courts”).  Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of this Note), and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, or such New York Courts are
improper or inconvenient venue for such proceeding.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Note and
agrees that such service shall constitute good and sufficient service of process
and notice thereof.  Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or
relating to this Note or the transactions contemplated hereby.  If either party
shall commence an action or proceeding to enforce any provisions of this Note,
then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its attorney’s fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.
 
Section 5.03                                Severability.  The invalidity of any
of the provisions of this Note shall not invalidate or otherwise affect any of
the other provisions of this Note, which shall remain in full force and effect.
 
Section 5.04                                Entire Agreement and
Amendments.  This Note represents the entire agreement between the parties
hereto with respect to the subject matter hereof and there are no
representations, warranties or commitments, except as set forth herein.  This
Note supersedes the Convertible Loan Agreement of even date herewith between the
parties hereto, which shall be of no further force or effect. This Note may be
amended only by an instrument in writing executed by the parties hereto.
 
[Remainder of Page Intentionally Left Blank]
 
 
 
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IN WITNESS WHEREOF, with the intent to be legally bound hereby, the Company as
executed this Note as of the date first written above.
 
Polar Petroleum Corp.

By:                                                                    
Name: Daniel Walker
Title:  Chief Executive Officer

ACCEPTED AND AGREED:

US Energy Investments Ltd.

By:                                                               
Name:
Title:

 

 
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 EXHIBIT I
 
NOTICE OF CONVERSION
 
 
(To be executed by the Holder in order to convert the Note)
 
TO: Polar Petroleum Corp.
 

The undersigned hereby irrevocably elects to convert the unpaid principal amount
indicated below of the 10% Convertible Promissory Note due August 30, 2016 (the
“Note”) into shares of Common Stock of Polar Petroleum Corp., according to the
conditions stated therein, as of the Conversion Date written below.
 
Conversion Date:
 
Applicable Conversion Price (per share):
$                                                                                     
Principal amount to be converted:
$                                                                                     
Principal amount of Note unconverted:
$                                                                                     
Number of shares of Common Stock to be issued including as payment of interest,
if applicable:
 
Issue the shares of Common Stock and Warrants in the following name and to the
following address:
 
Issue to the following account of the Holder:
 
Authorized Signature:
 
Name:
 
Title:
 
Phone Number:
 
Broker DTC Participant Code:
 
Account Number:
 

 
 
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