Document:

ex10_3.htm

    
      

    

     

    SUNRISE
      ENERGY RESOURCES, INC.

     

    CD-1009

    

     10%
      SUBORDINATED NOTE DUE JUNE 6, 2009

    

    This
      10%
      Note (hereinafter referred to as “the Note” or “the Notes”) is dated JUNE 6,
      2006.

    

    Borrower:    Sunrise
      Energy Resources, Inc.

    

    Address:    
551
      Fifth
      Avenue, Suite 601

       
       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
      401,
      302 Regent Street, London W1R 6HH

    

    

    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$2,000, 000 (Two million US dollars) that is received from
      the original Lender, the Borrower promises to pay to the Lender
US$2,000,000 (Two million US dollars) (hereinafter referred to
      as “the Principal”), plus accrued interest at a rate of 10% (ten
      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 “Lender’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.

    

    
      
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    3.
                 Lender’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.

            

    

     

    
      
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              (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.

            

    

    

    
      
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    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$2.20 (Two
                US
                dollars and two cents) per share of Common
                Stock.

            

    

    
      	
               

            	
              (ii)

            	
              Each
                US$1000 Note Unit shall be convertible into 454 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.

    

    
      
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    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.

    

    
      
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    (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;

    

    
      
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    (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.

    

    
      
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    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.

     

    
      
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              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-1009

      

      
        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-1009

      

      
        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.

            

    

    

    
      Agreed
        and executed on this date by the Borrower and the Lender.

    

    

    

    Borrower:    Sunrise
      Energy Resources, Inc.

    

    

    

    s/
      Konstantin Tsiryulnikov

    Konstantin
      Tsiryulnikov

    Chief
      Executive Officer

    

    

    

    Lender:       
      Millington Solutions Limited

    

    

    

    s/
      Millington Solutions Limited

    Evgeniy
      Kozlov

    Director

     

    CD-1009

    11Unassociated Document

    
      

    

     

    
      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:             551
        Fifth Avenue, Suite 601

       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
        401,
        302 Regent Street, London W1R 6HH

      

      

      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 “Lender’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. 
                  Lender’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

        

        
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      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

        

        
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                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

        

        
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      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.

              

      

       

      
        Agreed
          and executed on this date by the Borrower and the Lender.

      

      Borrower:    Sunrise
        Energy Resources, Inc.

      

      

      

      s/
        Konstantin Tsiryulnikov

      Konstantin
        Tsiryulnikov

      Chief
        Executive Officer

      

      

      

      Lender:        
        Millington Solutions Limited

      

      

      

      s/
        Millington Solutions Limited

      Evgeniy
        Kozlov

      Director

      
CD-1011

      11

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