Document:

Exhibit 10.2

    
      

    

    SECURITY
      AGREEMENT

    

    THIS
      SECURITY AGREEMENT
      (this
“Agreement”)
      is
      made as of the 26th
      day of
      March, 2007, by Sunrise Energy Resources, Inc., a Delaware corporation, having
      a
      mailing address at 551 Fifth Avenue, Suite 2020, New York, NY 10017 (the
“Company”);
      TOV Energy-Servicing Company Esko Pivnich (“Esko”), a
      Ukrainian Closed Joint Stock Company, having a mailing address at 10a Ryleeva
      St., Kiev, Ukraine (“Esko”); and Pari,
      Ltd. (“Pari”), a Ukrainian
      Limited Liability company,
      having a
      mailing address at 10a Ryleeva St., Kiev, Ukraine (“Pari”); and together with
      the Company, individually and collectively, the “Debtors”),
      for
      the benefit and security of DUTCHESS
      PRIVATE EQUITIES FUND, LTD.,
      having
      a mailing address at 50 Commonwealth Avenue, Suite 2, Boston, Massachusetts
      02116 (the “Secured
      Party”).

     

    WHEREAS,
      the Company has executed and delivered to Secured Party promissory notes or
      other debentures or instruments, including, without limitation, that certain
      Promissory Note, dated of even date herewith from the Company in favor of the
      Secured Party (as amended or otherwise modified from time to time, collectively,
      the “Notes”)
      pursuant to which the Secured Party has agreed to make certain loans and other
      financial accommodations to the Company;

    

    WHEREAS,
      each of the other Debtors has executed and delivered a guaranty (as amended
      or
      otherwise modified from time to time, the "Guaranty")
      of
      certain obligations of the Company, including all obligations of the Company
      under the Notes; and

     

    WHEREAS,
      the obligations of the Company under the Notes and the obligations of each
      other
      Debtor under the Guaranty are to be secured pursuant to this
      Agreement;

     

    NOW,
      THEREFORE, for and in consideration of any loan, advance or other financial
      accommodation heretofore or hereafter made to or for the benefit of any Debtor
      under or in connection with the Notes of any other Finance Documents (as defined
      below), and for other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the parties hereto agree as
      follows:

     

    ARTICLE
      I

    

    CONSTRUCTION
      AND DEFINED TERMS

     

    1.01    Article and
      Section Headings.
      Article and Section headings and captions in this Agreement are for
      convenience only and shall not affect the construction or interpretation of
      this
      Agreement. Unless otherwise expressly stated in this Agreement, references
      in
      this Agreement to Sections shall be read as Sections of this
      Agreement.

     

    1.02    Schedules and
      Exhibits.
      The
      references in this Agreement to specific Schedules and Exhibits shall be
      read as references to such specific Schedules or Exhibits attached, or
      intended to be attached, to this Agreement and any counterpart of this Agreement
      and regardless of whether they are in fact attached to this Agreement,
      and including
      any amendments, supplements and replacements to such Schedules and Exhibits
      from time to time.

    
      

      

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    1.03    Defined
      Terms.
      Unless
      otherwise expressly stated in this Agreement, (a) capitalized terms which
      are not otherwise defined herein shall have the respective meanings assigned
      thereto in the UCC (as defined below); and (b) the following terms used in
      this Agreement shall have the following meanings:

     

    “Collateral”
means,
      with respect to any Debtor, all property and rights of such Debtor in which
      a
      security interest is granted hereunder.

     

    “Computer
      Hardware and Software” means,
      with respect to any Debtor, all of such Debtor's rights (including rights as
      licensee and lessee) with respect to (i) computer and other electronic data
      processing hardware, including all integrated computer systems, central
      processing units, memory units, display terminals, printers, computer elements,
      card readers, tape drives, hard and soft disk drives, cables, electrical supply
      hardware, generators, power equalizers, accessories, peripheral devices and
      other related computer hardware; (ii) all software programs designed for
      use on the computers and electronic data processing hardware described in
clause
      (i) above,
      including all operating system software, utilities and application programs
      in
      whatsoever form (source code and object code in magnetic tape, disk or hard
      copy
      format or any other listings whatsoever); (iii) any firmware associated
      with any of the foregoing; and (iv) any documentation for hardware,
      software and firmware described in clauses (i),
      (ii)
      and
(iii)
      above,
      including flow charts, logic diagrams, manuals, specifications, training
      materials, charts and pseudo codes.

     

    “Equity
      Interest”
With
      respect to any Person, any ownership interest in such Person, including shares,
      partnership interests, joint venture interests, membership interests, limited
      liability company interests, unit interests and any other equity or ownership
      interests of any kind, and any subscriptions, options, warrants, commitments,
      purchase rights, preemptive rights or agreements of any kind (including any
      stockholders’ or voting trust agreements) for the issuance, sale, registration
      or voting of, or for securities convertible into, any shares, partnership
      interests, joint venture interests, membership interests, limited liability
      company interests, and any other equity or ownership interests in such
      Person.

     

    “Finance
      Documents”
mean,
      collectively, the Notes, the Guaranty, and any other documents or agreements
      executed in connection therewith or herewith and pertaining to the Secured
      Obligations.

     

    “Lien”
Any
      security interest (including security interest within the definition of
“security interest” in the UCC), encumbrance, lien (including any judgment lien,
      any contract lien, any lien arising or resulting from nonpayment of any tax,
      assessment, charge or other imposition, and any lien arising or resulting from
      nonpayment for labor, materials, or supplies), security agreement (including
      any
      agreement that creates or provides for a security interest), deed of trust,
      mortgage, grant, pledge, assignment, hypothecation, title retention contract,
      or
      other arrangement for security purposes, and any agricultural lien (including
      any agricultural lien within the definition of “agricultural lien” in the UCC),
      and including any of the foregoing arising by operation of statute or other
      law
      or the application of equitable principles, whether perfected or unperfected,
      avoidable or unavoidable, consensual or nonconsensual, and any financing
      statement or other similar notice document, whether or not filed, and any
      agreement to give a financing statement or other similar notice
      document.

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    “Lien
      Proceeding”
Any
      action taken (including self help) or proceeding (judicial or otherwise)
      commenced by any Person other than Secured Party for the purpose of enforcing
      or
      protecting any actual or alleged Lien upon any of the Collateral, and including
      any foreclosure, repossession, attachment, execution or other process regarding
      any of the Collateral.

     

    “Permitted
      Lien”
means
      those Liens described on Schedule
      3.07.

     

    “Person”
Any
      natural person, corporation, limited liability company, partnership, joint
      venture, entity, association, joint-stock company, trust or unincorporated
      organization and any Governmental Authority, including any receiver,
      debtor-in-possession, trustee, custodian, conservator, or
      liquidator. 

     

    “Secured
      Obligations” All
      indebtedness, liabilities and obligations which are now or may at any time
      hereafter be due, owing or incurred in any manner whatsoever to Secured Party
      by
      any Debtor, whether under this Agreement, any Notes, the Guaranty or any other
      Finance Document, in each case howsoever created, arising or evidenced, whether
      direct or indirect, absolute or contingent, whether at stated maturity, by
      acceleration or otherwise (including, without limitation, the payment of
      interest and other amounts which would accrue and become due but for the filing
      of a petition in bankruptcy or the operation of the automatic stay under Section
      362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)), including, without
      limitation, all charges, fees, expenses, commissions, reimbursements, premiums,
      indemnities and other payments related to or in respect of such
      obligations.

     

    “UCC”
means
      the Uniform Com-mercial Code as in effect in the Commonwealth of Massachusetts
      on the date of this Agreement, as may be amended or modified from time to time
      after the date hereof; provided
      that,
      "UCC"
      shall
      also mean the Uniform Commercial Code as in effect from time to time in any
      applicable jurisdiction.

     

    ARTICLE
      II

    

    SECURITY
      INTEREST; PERFECTION

     

    2.01    Security
      Interest.
      To
      secure the full and timely payment, performance and satisfaction of the Secured
      Obligations, each Debtor hereby collaterally assigns to Secured Party, and
      grants Secured Party a security interest in, all of such Debtor’s property,
      whether now owned or hereafter existing or acquired, regardless of where located
      including, without limitation,
      all of
      such Debtor’s:

     

    (a)    Accounts;

     

    (b)    Chattel
      Paper, including Electronic Chattel Paper;

     

    (c)    Computer
      Hardware and Software and all rights with respect thereto, including, any and
      all licenses, options, warranties, service contracts, program services, test
      rights, maintenance rights, support rights, improvement rights, renewal rights
      and indemnifications, and any substitutions, replacements, additions or model
      conversions of any of the foregoing

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    (d)    Commercial
      Tort Claims now or hereafter identified on Schedule 2.01(d)
      to this
      Agreement;

     

    (e)    Deposit
      Accounts (as
      defined under the UCC)
      and as
      identified on Schedule
      2.02;

     

    (f)    
Documents
      (as defined under the UCC);

     

    (g)    Financial
      Assets (as defined under the UCC);

     

    (h)    General
      Intangibles (as defined under the UCC);

     

    (i)     
      Goods
      (including all of its Equipment, Fix-tures and Inventory), and all embedded
      software, accessions, additions, attachments, improvements, substitutions and
      replacements thereto and therefor);

     

    (j)     
      Instruments;

     

    (k)    
Intellectual
      Property;

     

    (l)     
      Investment
      Property;

     

    (m)    Letter
      of
      Credit Rights;

     

    (n)    money
      (of
      every jurisdiction whatsoever);

     

    (o)    Security
      Entitlements;

     

    (p)    Supporting
      Obligations

     

    (q)    with
      respect to each Person (as defined herein) listed in Schedule
      2.01(q)
      hereto
      and each other corporation hereafter acquired or formed by such Debtor, the
      Equity Interests from time to time issued and outstanding, including the
      certificates, if any, representing the Equity Interests and any interest of
      such
      Debtor in the entries on the books of the issuer thereof or any financial
      intermediary pertaining to the Equity Interests, together with all dividends,
      cash, options, warrants, rights, instruments, distributions, returns of capital
      or principal, income, interest, profits and other property, interests (debt
      or
      equity) or proceeds as a result of a split, revision, reclassification,
      consolidation, merger or other like change of the Equity Interests or any issuer
      thereof, from time to time received, receivable or otherwise distributed to
      such
      Debtor in respect of or in exchange for any or all of the Equity
      Interests;

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    (r)    
all
      promissory notes or intercompany notes and and all certificates or instruments
      evidencing such promissory notes or intercompany notes; and

     

    to
      the
      extent not included in the foregoing, other personal property of any kind or
      description, together with all books, records, writings, data bases, information
      and other property relating to, used or useful in connection with, or
      evidencing, embodying, incorporating or referring to any of the foregoing,
      and
      all Proceeds, products, rents, issues, profits and returns of and from any
      of
      the foregoing; provided
      that to
      the extent that the provisions of any lease or license of Computer Hardware
      and
      Software or Intellectual Property expressly prohibit (which prohibition is
      enforceable under applicable law) the assignment thereof, and the grant of
      a
      security interest therein, the Secured Party will not enforce its security
      interest (other than in respect of the Proceeds thereof) for so long as such
      prohibition continues, it
      being understood
      that
      upon request of the Secured Party, such Debtor will in good faith use reasonable
      efforts to obtain consent for the creation of a security interest in favor
      of
      the Secured Party (and to Secured Party’s enforcement of such security interest)
      in such Debtor's rights under such lease or license.

     

    2.02    Intentionally
      Deleted.

     

    2.03    Perfection
      by Filing.

     

    (a)    Each
      Debtor authorizes Secured Party to file any financing statement and agrees
      to
      execute, in recordable form, and deliver to Secured Party any other document
      or
      instrument, and to cause any third party to execute and deliver to Secured
      Party
      any other document (including financing statement termination statements),
      requested by Secured Party to perfect the security interests created under
      this
      Agreement and to establish, maintain, and continue the first priority of the
      security interests created under this Agreement.

     

    (b)    Each
      Debtor hereby appoints Secured Party as such Debtor’s attorney-in-fact, with
      power of substitution, which appointment is irrevocable and coupled with an
      interest, to execute in the name of Debtor, and to transmit to, or file, record,
      or register with, any Person, and at any time, any document or instrument that
      Secured Party may deem necessary or advisable for the purpose of creating,
      enforcing, defending, protecting, perfecting, continuing, or maintaining any
      security interest, or the perfection or priority of any security interest,
      created under this Agreement. 

     

    (c)    Secured
      Party shall not be required to obtain Debtor’s consent or authorization for
      Secured Party to file, and Secured Party shall be entitled to file, with or
      without execution by Debtor (or by Secured Party as Debtor’s attorney-in-fact),
      any financing statement, amendment, or other record that Secured Party may
      be
      authorized to file in accordance with the terms of the UCC with respect to
      the
      security interests created under this Agreement. 

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    (d)    Any
      financing statement or other document filed to perfect the security interests
      evidenced by this Agreement may, at Secured Party’s option, describe or indicate
      the Collateral in the manner that the Collateral is described in this Agreement,
      or as all assets of Debtor, or as all personal property of Debtor, or by any
      other description or indication of the Collateral that may be sufficient for
      a
      financing statement under the UCC.

     

    (e)    
If
      prior
      to Debtor’s execution of this Agreement, Secured Party shall have filed in any
      jurisdiction, or with any governmental authority, any financing statement,
      amendment, or other document describing or indicating the Collateral, or
      containing a description or indication of all assets of Debtor or all personal
      property of Debtor comprising the Collateral, or containing any other
      description or indication of the Collateral, Debtor, by executing this
      Agreement, irrevocably (i) authorizes, ratifies, confirms, and adopts
      (A) each such previously filed financing statement, amendment or other
      document, and (B) the filing of each such previously filed financing
      statement, amendment, or other document, and (ii) agrees that each such
      previously filed financing statement, amendment, or other document is valid
      and
      effective as though it had been authorized by Debtor and filed with Debtor’s
      authorization.

     

    2.04    Perfection
      by Possession.
      If
      Collateral is of a type as to which it is necessary, desirable, or advisable,
      as
      determined by Secured Party, for Secured Party to take possession of such
      Collateral in order to protect, perfect, or maintain the first priority of
      Secured Party’s security interest or other Lien (subject only to Permitted
      Security) in such (or any other) Collateral, then, promptly upon Secured Party’s
      request, Debtor shall deliver such Collateral to Secured Party.

     

    ARTICLE
      III

    

    REPRESENTATIONS
      AND WARRANTIES

     

    Debtor
      makes the following representations and warranties to Secured Party, which
      shall
      each be continuing and in effect at all times, and Secured Party shall be
      entitled to rely upon the truth, accuracy, and completeness of the following
      representations and warranties without regard to any other information that
      may
      be now or hereafter known by or disclosed to Secured Party or any of Secured
      Party’s directors, officers, employees, agents, attorneys or other
      advisors:

     

    3.01    Debtor’s
      Name and Identification Number.
      The
      name of each Debtor set forth on the first page and the signature page of this
      Agreement is Debtor’s correct and complete legal name. The street address for
      Debtor in this Agreement is Debtor’s mailing address. Such Debtor's chief
      executive office and principal place of business are as set forth on
Schedule
      3.01
      hereto
      (and such Debtor has not maintained its chief executive office and principal
      place of business at any other location during the five (5) years preceding
      the
      date hereof, and each other location where such Debtor maintains a place of
      business is also set forth on Schedule
      3.01
      hereto

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    3.02    Permitted
      Liens; Collateral.
      (a) No
      financing statement (other than Permitted Liens) covering any of such Debtor’s
      rights in the Collateral is on file in any public office; (b) Secured Party’s
      security interest in the Collateral is a first priority perfected security
      interest, subject to no Liens other than Permitted Liens; (c) such Debtor is
      and
      will be the lawful owner of all Collateral, free of all liens, claims, security
      interests and encumbrances whatsoever, other than the security interest
      hereunder and Permitted Liens, with full power and authority to execute this
      Agreement and perform such Debtor's obligations hereunder, and to subject the
      Collateral to the security interest hereunder and (d) all information with
      respect to the Collateral set forth in any schedule, certificate or other
      writing at any time heretofore or hereafter furnished by such Debtor to the
      Secured Party is and will be true and correct in all material respects as of
      the
      date furnished.

     

    3.03    Authorization
      and No Conflicts.
      (a)
      Each Debtor is a corporation duly organized, validly existing and in good
      standing under the laws of its state of incorporation as listed on the first
      page of this Agreement; (b) the execution and delivery of this Agreement and
      the
      performance by such Debtor of its obligations hereunder are within such Debtor's
      corporate powers, have been duly authorized by all necessary corporate action,
      have received all necessary govern-mental approval (if any shall be required),
      and do not and will not contravene or conflict with any provision of law or
      of
      the articles of incorporation or by-laws of such Debtor or of any material
      agreement, indenture, instrument or other document, or any material judgment,
      order or decree, which is binding upon such Debtor; and (c) this Agreement
      is a legal, valid and binding obligation of such Debtor, enforceable in
      accordance with its terms, except that the enforceability of this Agreement
      may
      be limited by bankruptcy, insolvency, fraudulent conveyance, fraudulent
      transfer, reorganization, moratorium or other similar laws now or hereafter
      in
      effect relating to creditors' rights generally and by general principles of
      equity (regardless of whether enforcement is sought in a proceeding in equity
      or
      at law).

     

    3.04    Tangible
      Collateral. Schedule
      3.04
      hereto
      contains a complete listing of such Debtor’s tangible Collateral located with
      any bailee, warehousemen or other third parties and all of such Debtor’s
      Collateral which is subject to certificate of title statutes. 

     

    3.05    Deposit
      Accounts.
      Except
      as listed on Schedule 2.02,
      Debtor
      has no Deposit Accounts and is not a party to or otherwise bound by any Deposit
      Account Agreement. 

     

    3.06    Leases.
      Except
      as listed on Schedule 3.06
      (which
      schedule contains a true, accurate and complete list and description of all
      leases to which Debtor is a lessor, lessee, or other party or otherwise bound),
      Debtor is not a lessor or lessee under, or a party to, or otherwise bound by
      the
      terms of, any lease.

     

    3.07    Commercial
      Tort Claims.
      Except
      as listed on Schedule 2.01(d),
      Debtor
      has no Commercial Tort Claims.

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    ARTICLE
      IV

    

    AFFIRMATIVE
      COVENANTS

     

    Debtor
      covenants and agrees to the following:

     

    4.01    Account
      Debtors.
      The
      Secured Party may, at any time that an Event of Default exists, whether before
      or after any revocation of such power and authority or the maturity of any
      of
      the Secured Obligations, notify an Account Debtor or other Person obligated
      on
      Collateral to make payment or otherwise render performance to or for the benefit
      of the Secured Party and enforce, by suit or otherwise the obligations of an
      Account Debtor or other Person obligated on Collateral and exercise the rights
      of such Debtor with respect to the obligation of the Account Debtor or other
      Person obligated on Collateral to make payment or otherwise render performance
      to such Debtor, and with respect to any property that secures the obligations
      of
      the Account Debtor or other Person obligated on the Collateral. In connection
      with exercise of such rights and remedies, the Secured Party may surrender,
      release or exchange all or any part thereof, or compromise or extend or renew
      for any period (whether or not longer than the original period) any indebtedness
      thereunder or evidenced thereby. Upon the request of the Secured Party during
      the existence of an Event of Default, each Debtor will, at its own expense,
      notify any or all parties obligated on any of the Collateral to make payment
      to
      the Secured Party of any amounts due or to become due thereunder. Upon request
      by the Secured Party during the existence of an Event of Default, each Debtor
      will forthwith, upon receipt, transmit and deliver to the Secured Party, in
      the
      form received, all cash, checks, drafts and other instruments or writings for
      the payment of money (properly endorsed, where required, so that such items
      may
      be collected by the Secured Party) which may be received by such Debtor at
      any
      time in full or partial payment or otherwise as proceeds of any of the
      Collateral. Except as the Secured Party may otherwise consent in writing, any
      such items which may be so received by any Debtor will not be commingled with
      any other of its funds or property, but will be held separate and apart from
      its
      own funds or property and upon express trust for the Secured Party until
      delivery is made to the Secured Party. Each Debtor will comply with the terms
      and conditions of any consent given by the Secured Party pursuant to the
      foregoing sentence. 

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    4.02    Additional
      Covenants.
      Each
      Debtor: 

     

    (a)    will,
      at the
      Secured Party’s request, at any time and from time to time, execute and deliver
      to the Secured Party such financing statements, amendments and other documents
      and do such acts as the Secured Party deems necessary in order to establish
      and
      maintain valid, attached and perfected first priority security interests in
      the
      Collateral in favor of the Secured Party, free and clear of all Liens and claims
      and rights of third parties whatsoever except Permitted Liens; each Debtor
      hereby irrevocably authorizes the Secured Party at any time, and from time
      to
      time, to file in any jurisdiction any initial financing statements and
      amendments thereto that (i) indicate the Collateral (x) as all assets of such
      Debtor or words of similar effect, regardless of whether any particular asset
      comprised in the Collateral falls within the scope of Article 9 of the UCC
      of
      the jurisdiction wherein such financing statement or amendment is filed, or
      (y)
      as being of an equal or lesser scope or with greater detail;

     

    (b)    will
      keep all
      its Inventory at, and will not maintain any place of business at any location
      other than, its address(es) shown on Schedule
      3.01
      hereto
      or at such other addresses of which such Debtor shall have given the Secured
      Party not less than 30 days' prior written notice; 

     

    (c)    will
      keep its
      records concerning the Collateral in such a manner as will enable the Secured
      Party or its designees to determine at any time the status of the
      Collateral;

     

    (d)    will
      furnish
      the Secured Party such information concerning such Debtor, the Collateral and
      the Account Debtors as the Secured Party may from time to time reasonably
      request; 

     

    (e)    will
      permit
      the Secured Party and its designees, from time to time, on reasonable notice
      and
      at reasonable times and intervals during normal business hours (or at any time
      without notice during the existence of an Event of Default) to inspect such
      Debtor's Inventory and other Goods, and to inspect, audit and make copies of
      and
      extracts from all records and other papers in the possession of such Debtor
      pertaining to the Collateral and the Account Debtors, and will, upon request
      of
      the Secured Party during the existence of an Event of Default, deliver to the
      Secured Party all of such records and papers; 

     

    (f)    will,
      upon
      request of the Secured Party, stamp on its records concerning the Collateral,
      and add on all Chattel Paper and Instruments constituting a portion of the
      Collateral, a notation, in form satisfactory to the Secured Party, of the
      security interest of the Secured Party hereunder; 

     

    (g)    except
      for
      the sale or lease of Inventory in the ordinary course of its business and sales
      of Equipment which is no longer useful in its business or which is being
      replaced by similar Equipment, will not sell, lease, assign or create or permit
      to exist any Lien on any Collateral other than Permitted Liens; 

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    (h)    will
      at all
      times keep all of its Inventory and other Goods insured under policies
      maintained with reputable, financially sound insurance companies against loss,
      damage, theft and other risks to such extent as is customarily maintained by
      companies similarly situated, and cause all such policies to provide that loss
      thereunder shall be payable to the Secured Party as its interest may appear
      (it
      being understood that (A) so long as no Event of Default shall be existing,
      the
      Secured Party shall deliver any proceeds of such insurance which may be received
      by it to such Debtor and (B) whenever an Event of Default shall be existing,
      the
      Secured Party may apply any proceeds of such insurance which may be received
      by
      it toward payment of the Secured Obligations, whether or not due, in such order
      of application as the Secured Party may determine), and such policies or
      certificates thereof shall, if the Secured Party so requests, be deposited
      with
      or furnished to the Secured Party; 

     

    (i)    
will
      take
      such actions as are reasonably necessary to keep its Goods in good repair and
      condition; 

     

    (j)    
will
      take
      such actions as are reasonably necessary to keep its Equipment in good repair
      and condition and in good working order, ordinary wear and tear
      excepted;

     

    (k)    will
      promptly
      pay when due all license fees, registration fees, taxes, assessments and other
      charges which may be levied upon or assessed against the ownership, operation,
      possession, maintenance or use of its Equipment and other Goods;

     

    (l)    
will
      take
      all steps reasonably necessary to protect, preserve and maintain all of its
      rights in the Collateral and will keep all of the tangible Collateral in the
      United States; 

     

    (m)   will
      promptly
      notify the Secured Party in writing upon acquiring or otherwise obtaining any
      Collateral after the date hereof consisting of Deposit Accounts, Investment
      Property, Letter-of-Credit Rights or Electronic Chattel Paper and, upon the
      request of the Secured Party, will promptly execute such other documents, and
      do
      such other acts or things deemed appropriate by the Secured Party to confer
      upon
      the Secured Party control (as defined in the UCC) with respect to such
      Collateral; 

     

    (o)    promptly
      notify the Secured Party in writing upon acquiring or otherwise obtaining any
      Collateral after the date hereof consisting of Documents or Instruments and,
      upon the request of the Secured Party, will promptly execute such other
      documents, and do such other acts or things deemed appropriate by the Secured
      Party to deliver to the Secured Party possession of such Documents which are
      negotiable and Instruments, and, with respect to nonnegotiable Documents, to
      have such nonnegotiable Documents issued in the name of the Secured Party;
      

     

    (p)    promptly
      notify the Secured Party in writing upon incurring or otherwise obtaining a
      Commercial Tort Claim after the date hereof against any third party, and, upon
      the request of the Secured Party, will promptly enter into an amendment to
      this
      Agreement, and do such other acts or things deemed appropriate by the Secured
      Party to give the Secured Party a security interest in such Commercial Tort
      Claim; and

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    (q)    further
      agrees to take other action reasonably requested by the Secured Party to insure
      the attachment, perfection and first priority of, and the ability of the Secured
      Party to enforce, the security interests in any and all of the Collateral
      including, without limitation, (i) executing, delivering and, where appropriate,
      filing financing statements and amendments relating thereto under the UCC,
      to
      the extent, if any, that the Debtor’s signature thereon is required therefor,
      (ii) complying with any provision of any statute, regulation or treaty of the
      United States as to any Collateral if compliance with such provision is a
      condition to attachment, perfection or priority of, or ability of the Secured
      Party to enforce, the security interests in such Collateral, (iii) obtaining
      governmental and other third party consents and approvals, including without
      limitation any consent of any licensor, lessor or other Person obligated on
      Collateral, (iv) obtaining waivers from mortgagees and landlords in form and
      substance satisfactory to the Secured Party, and (v) taking all actions required
      by the UCC in effect from time to time or by other law, as applicable in any
      relevant UCC jurisdiction, or by other law as applicable in any foreign
      jurisdiction.

     

    4.03    Taxes,
      Assessments, Charges, and Other Impositions.
      Debtor
      shall pay and discharge promptly, on or before the date due, all taxes,
      assessments, charges, and other impositions imposed by any governmental
      authority on Debtor, or on the Collateral, relating to the ownership or use
      of
      the Collateral, or relating to any sale, lease, license or other disposition
      of
      the Collateral; provided, however, Debtor shall not be required to pay or
      discharge, or to cause to be paid or discharged, any such tax, assessment,
      charge, or other imposition so long as (a) the validity of such tax,
      assessment, charge or other imposition is being contested in good faith by
      Debtor by appropriate proceedings.

     

    4.04    Notice
      of Lien Proceeding.
      Debtor
      shall give Secured Party immediate written notice of the threat by any Person
      to
      commence any proceedings on a material portion of the Collateral or any other
      Lien Proceeding.

     

    4.05    Delivery
      of Certificated Equity Interests.
      All
      certificates, agreements or instruments representing or evidencing the pledged
      Equity Interests, to the extent not previously delivered to the Secured Party,
      shall promptly upon receipt thereof by any Debtor be delivered to and held
      by
      the Secured Party pursuant hereto. All such certificated Collateral shall be
      in
      suitable form for transfer by delivery or shall be accompanied by duly executed
      instruments of transfer or assignment in blank, all in form and substance
      reasonably satisfactory to the Secured Party. Security Party shall have the
      right, at any time after the occurrence and during the continuance of any Event
      of Default, to exchange certificates representing or evidencing such pledged
      Equity Interests for certificates of smaller or larger denominations. If any
      issuer of pledged Equity Intersets is organized in a jurisdiction which does
      not
      permit the use of certificates to evidence equity ownership, or if any of such
      pledged Equity Interests are at any time not evidenced by certificates of
      ownership, then each applicable Debtor shall, to the extent permitted by
      applicable law, record such pledge on the equityholder register or the books
      of
      the issuer, execute any customary pledge forms or other documents necessary
      or
      appropriate to complete the pledge and give the Secured Party the right to
      transfer such pledged Equity Interests.

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    4.06    Voting
      Rights: Distributions: etc.
      So long
      as no Event of Default shall have occurred and be continuing,
      (i)
      each Debtor shall be entitled to exercise any and all voting and other
      consensual rights pertaining to the pledged Equity Interests or any part thereof
      for any purpose not inconsistent with the terms or purposes of this Agreement;
      provided,
      however,
      that no
      Debtor shall in any event exercise such rights in any manner which may have
      an
      adverse effect on the security intended to be provided by this
      Agreement
      and (ii)
      each Debtor
      shall be
      entitled to receive and retain
      any and
      all distributions with respect to such pledged Equity Interests.
      Upon the
      occurrence and during the continuance of any Event of Default,
      upon
      written notice from the Secured Party, all rights of each Debtor to exercise
      such voting and other consensual rights it would otherwise be entitled to
      exercise hereunder and all rights of such Debtor to receive distributions
      otherwise permitted hereunder
      shall
      cease, and all such rights shall thereupon become vested in the Secured
      Party.
      Any
      distributions which are received by any Debtor in violation of the provisions
      of
      this Agreement shall be received in trust for the benefit of the Secured Party,
      shall be segregated from other funds of such Debtor and shall immediately be
      paid over to the Secured Party as Collateral in the same form as so received
      (with any necessary endorsement).

     

    ARTICLE
      V

    

    NEGATIVE
      COVENANTS

     

    Debtor
      covenants and agrees to the following:

     

    5.01    Identity.
      Debtor
      shall not change Debtor’s name or corporate structure. If Debtor is organized
      solely under the law of a single state or the United States and as to which
      the
      state or the United States must maintain
      a public record showing the organization to have been organized, Debtor shall
      not organize under the laws of another jurisdiction.

     

    5.02    Deposit
      Accounts.
      Debtor
      shall not open or close any Deposit Account, without prior written notice to
      the
      Secured Party.

     

    5.03    Liens.
      Debtor
      shall not create, incur, assume or suffer to exist any Liens upon any Collateral
      of Debtor other than Permitted Liens.

     

    ARTICLE
      VI

    

    EVENT
      OF DEFAULT; ENFORCEMENT OF SECURITY INTEREST

     

    6.01    Any
      one
      or more of the following events (regardless of the reason therefor) shall
      constitute an "Event
      of Default"
      hereunder:

     

    (a)    Any
      default or event of default shall occur under any of the Notes or any other
      Finance Documents.

     

     

    
      	
               

            	 	
               

            	 	
               

            	 	
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    (b)    Any
      Debtor shall fail or neglect to perform, keep or observe any provision of this
      Agreement or any other Finance Document and the same shall remain unremedied
      for
      a period of ten (10) business days after notice is given to such Debtor by
      the
      Secured Party.

    

    (c)    The
      Secured Party shall fail to have an enforceable first priority lien on and
      security interest in the Collateral.

    

    (d)    Any
      Debtor files a bankruptcy petition, a bankruptcy petition is filed against
      any
      Debtor which remains undismissed or unstayed for 30 consecutive days, or any
      Debtor makes a general assignment for the benefit of creditors.

    

    6.02    Right
      to Enforce Claim; Secured Party in Possession or
      Control.  

     

    (a)    Upon
      the
      occurrence of an Event of Default and during the continuance thereof, and in
      addition to such other rights and remedies as Secured Party may have under
      other
      provisions of this Agreement or any other Finance Document, or under common
      or
      statutory law, Secured Party may reduce a claim to judgment, foreclose, or
      otherwise enforce the claim, security interest, or agricultural lien by any
      available judicial procedure, and if the Collateral is Documents, Secured Party
      may proceed either as to the Documents or as to the Goods the Documents
      cover.

     

    (b)   If
      Secured Party has possession of Collateral, (i) reasonable expenses, including
      the cost of insurance and payment of taxes or other charges, incurred in the
      custody, preservation, use, or operation of the Collateral are chargeable to
      Debtor and are secured by the Collateral, (ii) the risk of accidental loss
      or
      damage is upon Debtor to the extent of a deficiency in any effective insurance
      coverage, (iii) Secured Party shall keep the Collateral identifiable, but
      fungible Collateral may be commingled, and (iv) Secured Party may use or operate
      the Collateral (A) for the purpose of preserving the Collateral or its value,
      or
      (B) as permitted by an order of a court having competent jurisdiction, or (C)
      for the purpose of transporting the Collateral, or (D) for the purposes of
      demonstrating the use or operation of the Collateral.

     

    (c)    
If
      Secured Party has possession of Collateral or control of Collateral that is
      Deposit Accounts, Electronic Chattel Paper, Investment Property, or
      Letter-of-credit rights, then Secured Party (i) may hold as additional security
      any Proceeds, except money or funds, received from the Collateral, (ii) shall
      apply money or funds received from the Collateral to reduce the Secured
      Obligations unless remitted to Debtor, and (iii) may create a security interest
      in the Collateral.

     

    (d)    
If
      Secured Party has possession of Collateral that is Chattel Paper or an
      Instrument, then as to any such Chattel Paper or Instrument, Secured Party
      shall
      not be obligated to take any necessary steps to preserve rights against prior
      parties.

     

     

    
      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    6.03    Collection
      and Enforcement.
      After
      the occurrence of an Event of Default and during the continuance thereof (in
      accordance with the Facilities Agreement), Secured Party may: 

     

    (a)    notify
      any Account Debtor or other Person obligated on Collateral to make payment
      or
      otherwise render performance to or for the benefit of Secured
      Party;

     

    (b)    take
      any
      Proceeds to which Secured Party is entitled under Section 9-315 of
      Article 9 of the UCC;

     

    (c)    enforce
      the obligations of any Debtor or other Person obligated on Collateral and
      exercise the rights of Debtor with respect to the obligations of the Debtor
      or
      other Person obligated on Collateral to make payment or otherwise render
      performance to Debtor, and with respect to any property that secures the
      obligations of the Debtor or other Person obligated on the
      Collateral;

     

    (d)    if
      Secured Party is a Bank and holds a security interest in a Deposit Account
      maintained with Secured Party, apply the balance of the Deposit Account to
      the
      obligation secured by the Deposit Account; and

     

    (e)    
if
      Secured Party holds a security interest in a Deposit Account perfected by
      control pursuant to an agreement among Debtor, Secured Party and the Bank with
      which the Deposit Account is maintained, or if Secured Party becomes the Bank’s
      customer with respect to the Deposit Account, instruct the Bank with which
      the
      Deposit Account is maintained to pay the balance of the Deposit Account to
      or
      for the benefit of Secured Party.

     

    6.04    Possession
      of Collateral.

     

    (a)    After
      the
      occurrence of an Event of Default and during the continuance thereof, Secured
      Party may require Debtor to assemble the Collateral and make the Collateral
      available to Secured Party at a place designated by Secured Party which is
      reasonably convenient to Secured Party and Debtor. If Secured Party requires
      Debtor to assemble the Collateral and make the Collateral available to Secured
      Party, as described in the preceding sentence, Debtor shall do so promptly,
      and
      in any event within ten (10) days after Secured Party gives Debtor a notice
      requesting Debtor to assemble the Collateral and make the Collateral available
      to Secured Party at the place designated by Secured Party. Without limiting
      Secured Party’s right to designate any place which is reasonably convenient to
      Debtor for making Collateral available to Secured Party, Debtor agrees that
      any
      place designated by Secured Party and located within one hundred (100) miles
      of
      any place where Debtor stores, uses, sells, leases, licenses, or maintains
      Collateral in the ordinary course of Debtor’s business shall be conclusively
      deemed to be a place reasonably convenient to Debtor for making the Collateral
      available to Secured Party.

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    (b)    After
      the
      occurrence of an Event of Default and during the continuance thereof, Secured
      Party may, pursuant to judicial process, or without judicial process if Secured
      Party proceeds without breach of peace, (1) take possession of the
      Collateral and, (2) without removal, render Equipment unusable and dispose
      of Collateral on Debtor’s premises.

     

    6.05    Disposition
      of Collateral.

     

    (a)    After
      the
      occurrence of an Event of Default and during the continuance thereof, Secured
      Party may sell, lease, license, or otherwise dispose of any or all of the
      Collateral in its present condition or following any commercially reasonable
      preparation or processing. 

     

    (b)    Secured
      Party may dispose of Collateral by public or private proceedings, by one or
      more
      contracts, as a unit or in parcels, and at any time and place and on any
      terms.

     

    (c)    Secured
      Party may purchase Collateral (1) at a public disposition or (2) if the
      Collateral is of a kind that is customarily sold on a recognized market or
      the
      subject of widely distributed standard price quotations, at a private
      disposition.

     

    (d)    A
      contract for sale, lease, license, or other disposition includes the warranties
      relating to title, possession, quiet enjoyment, and the like which by operation
      of law accompany a voluntary disposition of property of the kind subject to
      the
      contract; provided, however, Secured Party may disclaim or modify such
      warranties (1) in a manner that would be effective to disclaim or modify
      the warranties in a voluntary disposition of property of the kind subject to
      the
      contract of disposition, or (2) by communicating to the purchaser a Record
      evidencing the contract for disposition and including an express disclaimer or
      modification of the warranties, and provided further that a Record is sufficient
      to disclaim such warranties if such Record indicates “There is no warranty
      relating to title, possession, quiet enjoyment, or the like in this disposition”
or uses words of similar import.

     

    (e)    Prior
      to
      a disposition of Collateral, Secured Party shall give Debtor, and any other
      parties required to receive notice under Article 9 of the UCC, notification
      as required under Article 9 of the UCC before a sale, lease, license, or
      other disposition of Collateral.

     

    6.06    Additional
      Provisions Regarding Sales and Other Dispositions.
      In the
      event that Secured Party shall sell or otherwise dispose of the Collateral,
      or
      any part thereof in accordance with this Agreement, the following additional
      provisions shall be applicable to such sale or other disposition:

     

    (a)    Such
      sale
      or other disposition may be at public or private sale (or at any broker’s board
      or on any securities exchange) for cash, upon credit or for future delivery
      as
      Secured Party shall deem appropriate. Secured Party shall be authorized at
      any
      such sale (if Secured Party deems it advisable to do so with regard to any
      type
      or item of Collateral) to restrict the prospective bidders or purchasers to
      Persons who will represent and agree that they are purchasing the Collateral
      for
      their own use (or for their own account for investment, as applicable) and
      not
      with a view to the distribution or sale thereof, and upon consummation of any
      such sale, Secured Party shall have the right to assign, transfer and deliver
      to
      the purchaser or purchasers thereof the Collateral so sold. Each such purchaser
      at any such sale shall hold the property sold absolutely, free from any claim
      or
      right on the part of Debtor, and Debtor hereby waives (to the extent permitted
      by law) all rights of redemption, stay and appraisal which Debtor now has or
      may
      at any time in the future have under any rule of law or statute now existing
      or
      hereafter enacted. Secured Party shall give Debtor at least ten (10) days’
written notice (which Debtor agrees is reasonable notice) of Secured Party’s
      intention to make any sale of Collateral owned by Debtor. Such notice, in the
      case of a public sale, shall state the time and place for such sale and, in
      the
      case of a sale at a broker’s board or on a securities exchange, shall state the
      board or exchange at which such sale is to be made and the day on which the
      Collateral, or portion thereof, will first be offered for sale at such board
      or
      exchange. Any such public sale shall be held at such time or times within
      ordinary business hours and at such place or places as Secured Party may fix
      and
      state in the notice of such sale, and Secured Party shall not be obligated
      to
      make any sale of any Collateral if Secured Party shall determine not to do
      so,
      regardless of the fact that notice of sale of such Collateral shall have been
      given, and Secured Party may, without notice or publication, adjourn any public
      or private sale or cause the same to be adjourned from time to time by
      announcement at the time and place fixed for sale, and such sale may, without
      further notice to Debtor or anyone else, be made at the time and place to which
      the same was so adjourned.

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    (b)    In
      case
      any sale of all or any part of the Collateral is made on credit or for future
      delivery, the Collateral so sold may be retained by Secured Party until the
      sale
      price is paid by the purchaser or purchasers thereof, but Secured Party shall
      not incur any liability in case any such purchaser or purchasers shall fail
      to
      take up and pay for Collateral so sold and, in case of any such failure, such
      of
      the Collateral may be sold again upon notice to Debtor as set forth in this
      Section. 

     

    (c)    At
      any
      public sale, Secured Party may bid for or purchase, free (to the extent
      permitted by law) from any right of redemption, stay or appraisal on the part
      of
      Debtor (all said rights being also hereby waived and released to the extent
      permitted by law), the Collateral or any part thereof offered for sale and
      may
      make payment on account thereof by using any claim then due and payable to
      Secured Party from Debtor as a credit against the purchase price, and Secured
      Party may, upon compliance with the terms of sale, hold, retain and dispose
      of
      such property without further accountability to Debtor therefor. 

     

    (d)    For
      purposes of any sale of Collateral in accordance with this Agreement, a written
      agreement to purchase the Collateral or any portion thereof shall be treated
      as
      a sale thereof. Secured Party shall be free to carry out such sale pursuant
      to
      such agreement, and Debtor shall not be entitled to the return of the Collateral
      or any portion thereof subject thereto, notwithstanding the fact that after
      Secured Party shall have entered into such an agreement, all Events of Default
      shall have been remedied and the Secured Obligations paid in full.

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    (e)    Upon
      any
      sale of Collateral by Secured Party (including a sale pursuant to a power of
      sale granted by statute or under a judicial proceeding), the receipt of Secured
      Party or of the officer making the sale shall be a sufficient discharge to
      the
      purchaser or purchasers of the Collateral being sold, and such purchaser or
      purchasers shall not be obligated to see to the application of any part of
      the
      purchase money paid over to Secured Party or such officer or be answerable
      in
      any way for the misapplication thereof. 

     

    ARTICLE
      VII

     

    POWER
      OF ATTORNEY

     

    7.01    Power
      of Attorney; Collections by Secured Party.

     

    (a)    Debtor
      hereby appoints Secured Party as Debtor’s attorney-in-fact, with power of
      substitution, which appointment is irrevocable and coupled with an interest,
      to
      do each of the following in the name of Debtor or in the name of Secured Party
      or otherwise, for the use and benefit of Secured Party, but at the cost and
      expense of Debtor, and with or without notice to Debtor: (i) notify the
      Account Debtors and insurers to make payments directly to Secured Party, and
      to
      take control of the cash and non-cash Proceeds of any Collateral or insurance;
      (ii) renew, extend or compromise any of the Collateral or deal with the
      same as Secured Party may deem advisable; (iii) release, exchange,
      substitute, or surrender all or any part of the Collateral; (iv) remove
      from Debtor’s places of business all Collateral Records without cost or expense
      to Secured Party; (v) make such use of Debtor’s places of business as may
      be reasonably necessary to administer, control and collect the Collateral;
      (vi) repair, alter or supply Goods, if any, necessary to fulfill in whole
      or in part the purchase order or similar order of any Account Debtor;
      (vii) demand, collect, give receipt for, and give renewals, extensions,
      discharges and releases of any of the Collateral; (viii) institute and
      prosecute legal and equitable proceedings to enforce collection of, or realize
      upon, any of the Collateral; (ix) settle, renew, extend, compromise,
      compound, exchange or adjust claims with respect to any of the Collateral or
      any
      legal proceedings brought with respect thereto; (x) indorse the name of
      Debtor upon any item of payment relating to the Collateral or upon any proof
      of
      claim in bankruptcy against any Collateral; and (xi) institute and
      prosecute legal and equitable proceedings to reclaim any of the Goods sold
      to
      any Account Debtor obligated on an Account at a time when such Account Debtor
      was insolvent. Secured Party agrees that it shall not exercise any power or
      authority granted under this power of attorney unless an Event of Default has
      occurred and is continuing. The foregoing power of attorney is in addition
      to
      any other power of attorney that may be granted to Secured Party under any
      Finance Document.

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    (b)    NONE
      OF
      SECURED PARTY OR ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
      REPRESENTATIVES SHALL BE RESPONSIBLE TO DEBTOR FOR ANY ACT OR FAILURE TO ACT
      UNDER ANY POWER OF ATTORNEY OR OTHERWISE, EXCEPT IN RESPECT OF DAMAGES
      ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS
      FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION, NOR FOR ANY PUNITIVE,
      EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

     

    ARTICLE
      VIII

    

    GENERAL
      PROVISIONS

     

    8.01    Remedies
      Cumulative.
      Upon
      the occurrence and during the continuance of any Event of Default, and in
      addition to such other rights and remedies as Secured Party may have under
      other
      provisions of this Agreement or any other Finance Document, Secured Party may
      exercise any one or more of its rights and remedies under common or statutory
      law. No failure or delay on the part of Secured Party in exercising any right,
      power or privilege hereunder or under any other Finance Document and no course
      of dealing between Debtor or any other Obligor or other Person and Secured
      Party
      shall operate as a waiver thereof; nor shall any single or partial exercise
      of
      any right, power or privilege hereunder or under any other Finance Document
      preclude any other or further exercise thereof or the exercise of any other
      right, power or privilege hereunder or thereunder. The rights and remedies
      provided in this Agreement are cumulative and not exclusive of any rights or
      remedies which Secured Party would otherwise have and may be exercised
      simultaneously. No notice to or demand on Debtor in any case shall entitle
      Debtor or any other obligor or any other Person to any other or further notice
      or demand in similar or other circumstances or constitute a waiver of the rights
      of Secured Party to any other or further action in any circumstances without
      notice or demand.

     

    ARTICLE
      IX

    

    MISCELLANEOUS

     

    9.01    Each
      of
      the Debtors agrees to pay all expenses, including reasonable attorney's fees
      and
      charges (including time charges of attorneys who are employees of Secured Party)
      paid or incurred by Secured Party in endeavoring to collect the Secured
      Obligations of such Debtor, or any part thereof, and in enforcing this Agreement
      against such Debtor, and such obligations will themselves be Secured
      Obligations.

     

    9.02    No
      delay
      on the part of Secured Party in the exercise of any right or remedy shall
      operate as a waiver thereof, and no single or partial exercise by Secured Party
      of any right or remedy shall preclude other or further exercise thereof or
      the
      exercise of any other right or remedy.

     

    9.03    This
      Security Agreement shall remain in full force and effect until all Secured
      Obligations have been paid in full. If at any time all or any part of any
      payment theretofore applied by the Secured Party to any of the Secured
      Obligations is or must be rescinded or returned by the Secured Party for any
      reason whatsoever (including the insolvency, bankruptcy or reorganization of
      any
      Debtor), such Secured Obligations shall, for the purposes of this Agreement,
      to
      the extent that such payment is or must be rescinded or returned, be deemed
      to
      have continued in existence, notwithstanding such application by the Secured
      Party, and this Agreement shall continue to be effective or be reinstated,
      as
      the case may be, as to such Secured Obligations, all as though such application
      by the Secured Party had not been made.

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    9.04    The
      rights and privileges of Secured Party hereunder shall inure to the benefit
      of
      its successors and assigns.

     

    9.05    Secured
      Party’s Rights to Release Obligors; etc.
      Secured
      Party may take or release other security, may release any party primarily or
      secondarily liable for any Secured Obligations or other indebtedness to Secured
      Party, may grant extensions, renewals or indulgences with respect to such
      Secured Obligations or other indebtedness and may apply any other security
      therefor held by Secured Party to the satisfaction of such Secured Obligations
      or other indebtedness, all without prejudice to any of Secured Party’s rights
      under this Agreement.

     

    9.06    Notices.
      Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Agreement must be in writing and will be deemed
      to
      have been delivered (i) upon delivery, when delivered personally; (ii) upon
      receipt, when sent by facsimile (provided a confirmation of transmission is
      mechanically or electronically generated and kept on file by the sending party);
      or (iii) one (1) day after deposit with a nationally recognized overnight
      delivery service, so long as it is properly addressed. The addresses and
      facsimile numbers for such communications shall be:

     

    If
      to any
      Debtor:

    

    Attn:
      Roman Livson 

    Sunrise
      Energy Resources, Inc

    551
      FIFTH
      AVENUE

    SUITE
      2020

    NEW
      YORK
      NY 10017 

    Telephone:
      212-973-0063

    Fax:
      212-214-0310 

    

    If
      to the
      Secured Party:

    

    Dutchess
      Capital Management, LLC

    Douglas
      Leighton

    50
      Commonwealth Ave, Suite 2

    Boston,
      MA 02116

    Telephone:
      (617) 301-4700

    Facsimile:
      (617) 249-0947

     

     

    
      	
               

            	 	
               

            	 	
               

            	 	
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    9.07    Term.
      The
      term of this Agreement shall commence with the date of this Agreement and shall
      continue in full force and effect and be binding upon Debtor until all Secured
      Obligations of Debtor to Secured Party shall have been fully paid and satisfied
      and Secured Party shall have given Debtor written notice of the termination
      of
      this Agreement (excluding provisions that by their terms survive termination
      of
      other provisions of this Agreement or survive the termination of the security
      interest created under this Agreement). Secured Party shall not be obligated
      to
      give Debtor written notice of termination of this Agreement, or to terminate
      any
      financing statements or other Lien Notices, until all Secured Obligations of
      Debtor to Secured Party shall have been fully paid and satisfied and there
      is no
      commitment on the part of Secured Party to make an advance, incur an obligation
      or otherwise give value, and Debtor shall have given Secured Party a written
      demand requesting the termination of this Agreement and any financing statements
      at which time Secured Party shall execute and deliver such documents, at
      Debtor’s expense, as are necessary to release Secured Party’s liens in the
      Collateral including filing all appropriate financing statements for the release
      of all Liens on the Collateral. Notwithstanding anything to the contrary in
      this
      Agreement or any other Finance Documents, this Agreement shall continue to
      be
      effective or be reinstated, as the case may be, if at any time any amount
      received by Secured Party in respect of the Secured Obligations is rescinded
      or
      must otherwise be restored or returned by Secured Party upon the insolvency,
      bankruptcy, dissolution, liquidation or reorganization of Debtor or upon the
      appointment of any intervenor or conservator of, or trustee or similar official
      for, Debtor or any substantial part of Debtor’s assets, or otherwise, all as
      though such payments had not been made.

     

    9.08    Further
      Assurances.
      Debtor
      shall execute and deliver to Secured Party such further assurances and take
      such
      other further actions as Secured Party may from time to time request to further
      the intent and purpose of this Agreement and to maintain and protect the rights
      and remedies intended to be created in favor of Secured Party under this
      Agreement.

     

    9.09    Amendments,
      Waivers and Consents; Successors and Assigns.
      Neither
      this Agreement nor any other Finance Document nor any of the terms hereof or
      thereof may be amended, modified, changed, waived, discharged or terminated,
      nor
      shall any consent be given, unless such amendment, modification, change, waiver,
      discharge, termination or consent is in writing signed by Secured Party and
      Debtor. This Agreement shall create a continuing security interest in the
      Collateral and shall (i) remain in full force and effect until the Secured
      Obligations have been fully paid
      and
      satisfied and this Agreement has been terminated, (ii) be binding upon
      Debtor and its successors and assigns, and (iii) inure, together with the
      rights and remedies of Secured Party hereunder, to the benefit of Secured Party
      and Secured Party’s successors, transferees and assigns. This Agreement may not
      be assigned by Debtor without prior written consent of Secured Party, which
      consent may be withheld in Secured Party’s sole discretion.

     

    9.10    Entire
      Agreement.
      This
      Agreement and any other Finance Documents are a complete and exclusive
      expression of all the terms of the matters expressed therein, and all prior
      agreements, statements, and representations, whether written or oral, which
      relate thereto in any way are hereby superseded and shall be given no force
      and
      effect. No promise, inducement, or representation has been made to Debtor which
      relates in any way to the matters expressed in this Agreement and in any other
      Finance Documents, other than what is expressly stated herein and in such
      Finance Documents.

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    9.11    No
      Strict Construction.
      The
      parties hereto have participated jointly in the negotiation and drafting of
      this
      Agreement. In the event of any ambiguity or question of intent or interpretation
      arises, this Agreement shall be construed as if drafted jointly by the parties
      hereto and no presumption or burden of proof shall arise favoring or disfavoring
      any party by virtue of the authorship of any provisions of this
      Agreement.

     

    9.12    Governing
      Law.
      This
      Agreement and all related instruments and documents and the rights and
      obligations of the parties hereunder and thereunder shall, in all respects,
      be
      governed by, and construed in accordance with, the internal laws of the
      Commonwealth of Massachusetts, without regard to conflicts of law principles,
      regardless of the location of the Collateral, excepting, however, that the
      Uniform Commercial Code (or decisional law) of a jurisdiction other than the
      Commonwealth of Massachusetts may provide the method of perfection, the effect
      of perfection or non-perfection, or the priority of liens and security interests
      created under this Agreement.

     

    9.13    DISPUTES
      SUBJECT TO ARBITRATION.
      The
      parties to this Agreement will submit all disputes arising under it to
      arbitration in Boston, Massachusetts before a single arbitrator of the American
      Arbitration Association (“AAA”). The arbitrator shall be selected by application
      of the rules of the AAA, or by mutual agreement of the parties, except that
      such
      arbitrator shall be an attorney admitted to practice law in the Commonwealth
      of
      Massachusetts. No party to this agreement will challenge the jurisdiction or
      venue provisions as provided in this section. Nothing
      in this section shall limit the Secured Party’s right to obtain an injunction
      for a breach of this Agreement from a court of law.

     

    9.14    Severability.
      Any
      provision of this Agreement, or of any other Finance Document, that is
      prohibited by, or unenforceable under, the laws of any jurisdiction shall,
      as to
      such jurisdiction, be ineffective to the extent of such prohibition or
      unenforceability, without invalidating the remaining provisions of this
      Agreement, and any such prohibition or unenforceability in any jurisdiction
      shall not invalidate or render unenforceable such provision in any other
      jurisdiction. To the extent permitted by applicable law, Debtor hereby waives
      any provision of law which renders any provision of this Agreement or any other
      Finance Document prohibited or unenforceable in any respect.

     

    9.15    Counterparts.
      This
      Agreement may be executed in counterparts and each shall be effective as an
      original, and a photocopy, facsimile or telecopy of this executed Agreement
      shall be effective as an original. In making proof of this Agreement, it shall
      not be necessary to produce more than one counterpart, photocopy, facsimile,
      or
      telecopy of this executed Agreement.

     

    9.16    Time.
      Time is
      of the essence of this Agreement.

     

    [SIGNATURE
      PAGE FOLLOWS]

     

     

    
      	
               

            	 	
               

            	 	
               

            	 	
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    IN
      WITNESS WHEREOF,
      and
      intending to be legally bound hereby, each Debtor has executed this Agreement
      as
      of the date first above written.

     

    
      	
              DEBTOR:

            
	 	 
	
              Sunrise
                Energy Resources, Inc.

            
	 	 
	
              By:

            	
              /s/
                Konstantin Tsiryulnikov

            
	
              Name:

            	
              Konstantin
                Tsiryulnikov

            
	
              Title:

            	
              President
                and CEO

            
	 	 
	
              By:

            	
              /s/
                Roman Livson

            
	
              Name:

            	
              Roman
                Livson

            
	
              Title:

            	
              Chief
                Financial Officer 

            

    

     

    
      SECURED
        PARTY:

    

     

    
      DUTCHESS
        PRIVATE EQUITIES FUND, LTD

    

    
      	 	 
	 	 
	
              By:

            	
              /s/
                Douglas H. Leigton

            
	
              Name:

            	
              Douglas
                H. Leighton

            
	
              Title:

            	
              Director

            

    

    
       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    LIST
      OF SCHEDULES

     

    Schedule
      2.01(d) (Commercial Tort claims)

    Schedule
      2.01(q) (Equity Interests)

    Schedule
      2.02 (Deposit Accounts)

    Schedule
      3.01 (Designated Locations)

    Schedule
      3.04 (Tangible Collateral)

    Schedule
      3.06 (Leases)

    Schedule
      3.07 (Permitted Liens)

     

    
       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
                 

              
	
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    Schedule
      2.01(d)

    

    Commercial
      Tort claims

     

     

     

    
       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
                 

              
	
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    Schedule
      2.01(q)

    

    Equity
      Interests

    

      
        	
                Issuer

              	
                Class
                  of Stock

              	
                Certificate
                  No(s)

              	
                Number
                  

                of
                  Shares

              	
                Percentage
                  of all Issued Equity Interests of Issuer

              
	 	
                 

                Common

              	
                 

                ______

              	
                 

                _______

              	
                 

                100%

              
	 	
                 

                Common

              	
                 

                ______

              	
                 

                _______

              	
                 

                100%

              

      

    

    
       

       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
                 

              
	
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    Schedule
      2.02

    

    Deposit
      Accounts

    
      

      
        	
                Account
                  Name

              	
                Account
                  Use

              	
                Bank

              	
                Bank
                  Acct #

              	
                GL
                  Acct #

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	 	 	 	 	 

      

    

    
       

       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
                 

              
	
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    Schedule
      3.01

    

    Designated
      Locations

     

    
      	
              NAME

            	
              MAILING
                ADDRESS 

            
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

    

    
      
         

         

        
          	
                   

                	 	
                   

                	 	
                   

                	 	
                   

                
	
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    Schedule
      3.04

    

    Tangible
      Collateral

    
       

       

       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
                 

              
	
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    Schedule
      3.06

    

    Leases
      

    
       

       

       

       

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
                 

              
	
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    Schedule
      3.07 

    

    Permitted
      Liens

     

    
      
         

         

         

        
          	
                   

                	 	
                   

                	 	
                   

                	 	
                   

                
	
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    SECURED
      CONTINUING UNCONDITIONAL GUARANTY

     

    

    This
      SECURED CONTINUING UNCONDITIONAL GUARANTY (this “Guaranty”),
      is
      made this 26th
      day of
      March, 2007, by TOV
      Energy-Servicing Company Esko Pivnich, a
      Ukrainian Closed Joint Stock Company, having a mailing address at 10a Ryleeva
      St., Kiev, Ukraine (“Esko”);
      and
Pari,
      Ltd., a Ukrainian
      Limited Liability company,
      having a
      mailing address at 10a Ryleeva St., Kiev, Ukraine (“Pari”),
      and
      together with Esko, individually and collectively, jointly and severally, the
      “Guarantor”)
      in
      favor of and for the benefit and security of DUTCHESS
      PRIVATE EQUITIES FUND, LTD.,
      having
      a mailing address at 50 Commonwealth Avenue, Suite 2, Boston, Massachusetts
      02116 (the “Secured
      Party”).

     

    WHEREAS,
      pursuant to one or more promissory notes or other debentures or instruments,
      including, without limitation that certain Promissory Note, dated of even date
      herewith from the Company in favor of the Secured Party (as amended or otherwise
      modified from time to time, collectively, the “Notes”),
      the
      Secured Party has agreed to make certain loans and other financial
      accommodations to Sunrise Energy Resources, Inc. (the “Company”);

     

    WHEREAS,
      each Guarantor is desirous of having the Secured Party extend and/or continue
      the extension of credit to the Company, and the Secured Party has required
      that
      each Guarantor execute and deliver this Guaranty to the Secured Party, as a
      condition to the extension and continuation of credit by the Secured Party;
      and

     

    WHEREAS,
      the extension and/or continued extension of credit, as aforesaid, by the Secured
      Party is necessary and desirable to the conduct and operation of the business
      of
      the Company, and each Guarantor will derive substantial benefits from the credit
      made available to the Company pursuant to the Notes;

     

    NOW,
      THEREFORE, for value received and in consideration of any loan, advance, or
      financial accommodation of any kind whatsoever heretofore, now or hereafter
      made, given or granted to the Company by the Secured Party, each Guarantor
      agrees as follows:

     

    1.    Each
      Guarantor unconditionally guaranties (i) the full and prompt payment when due,
      whether at maturity or earlier, by reason of acceleration or otherwise, and
      at
      all times thereafter, of all of the indebtedness, liabilities and obligations
      of
      every kind and nature of the Company to the Secured Party or any parent,
      affiliate or subsidiary of the Secured Party (the terms “Secured Party” as used
      hereafter shall include such parents, affiliates and subsidiaries), howsoever
      created, arising or evidenced, whether direct or indirect, absolute or
      contingent, joint or several, now or hereafter existing, or due or to become
      due, and howsoever owned, held or acquired by the Secured Party, whether through
      discount, overdraft, purchase, direct loan or as collateral or otherwise,
      including, without limitation, all obligations and liabilities of the Company
      to
      the Secured Party under the Notes, and (ii) the prompt, full and faithful
      discharge by the Company of each and every term, condition, agreement,
      representation and warranty now or hereafter made by the Company to Secured
      Party (all such indebtedness, liabilities and obligations being hereinafter
      collectively referred to as the “Liabilities”).
      Guarantor further agrees to pay all costs and expenses, including, without
      limitation, all court costs and reasonable attorneys’ and paralegals’ fees paid
      or incurred by Secured Party in endeavoring to collect all or any part of the
      Liabilities from, or in prosecuting any action against, Guarantor. All amounts
      payable by Guarantor under this Guaranty shall be payable by Guarantor upon
      demand by Secured Party.

    

      

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
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    2.    Notwithstanding
      any provision of this Guaranty to the contrary, it is intended that this
      Guaranty, and any liens and security interests granted by Guarantor to secure
      this Guaranty, not constitute a “Fraudulent Conveyance” (as defined below).
      Consequently, Guarantor agrees that if this Guaranty, or any liens or security
      interests securing this Guaranty, would, but for the application of this
      sentence, constitute a Fraudulent Conveyance, this Guaranty and each such lien
      and security interest shall be valid and enforceable only to the maximum extent
      that would not cause this Guaranty or such lien or security interest to
      constitute a Fraudulent Conveyance, and this Guaranty shall automatically be
      deemed to have been amended accordingly at all relevant times. For purposes
      hereof, “Fraudulent
      Conveyance”
means
      a
      fraudulent conveyance under Section 548 of the “Bankruptcy Code” (as hereinafter
      defined) or a fraudulent conveyance or fraudulent transfer under the provisions
      of any applicable fraudulent conveyance or fraudulent transfer law or similar
      law of any state, nation or other governmental unit, as in effect from time
      to
      time.

     

    3.    Each
      Guarantor hereby agrees that this Guaranty is a guaranty of payment and
      performance and not of collection, and that, except as hereinafter provided,
      its
      obligations under this Guaranty shall be unconditional, irrespective of (i)
      the
      validity or enforceability of the Liabilities or any part thereof, or of any
      promissory note or other document evidencing all or any part of the Liabilities,
      (ii) the absence of any attempt to collect Liabilities from the Company or
      any
      other guarantor or other action to enforce the same, (iii) the waiver or consent
      by Secured Party with respect to any provision of any instrument evidencing
      Liabilities, or any part thereof, or any other agreement heretofore, now or
      hereafter executed by Company and delivered to Secured Party, (iv) failure
      by Secured Party to take any steps to perfect and maintain its security interest
      in, or to preserve its rights to, any security or collateral for Liabilities,
      (v) the institution of any proceeding under Chapter 11 of Title 11 of the
      United States Code (11 U.S.C. §101 et seq.), as amended (the “Bankruptcy
      Code”)
      or any
      similar or analogous statutory or nonstatutory proceedings under any other
      law,
      whether state, provincial or federal, now existing or hereafter existing for
      relief of the debtors, by or against Company, (vi) Secured Party’s election
      in any such proceeding of the application of Section 1111(b)(2) of the
      Bankruptcy Code, (vii) any borrowing or grant of a security interest by Company
      as debtor-in-possession, under Section 364 of the Bankruptcy Code, (viii) the
      disallowance, under Section 502 of the Bankruptcy Code, of all or any portion
      of
      Secured Party’s claim(s) for repayment of Liabilities, or (ix) any other
      circumstance which might otherwise constitute a legal or equitable discharge
      or
      defense of a guarantor.

     

    4.    Each
      Guarantor hereby waives diligence, presentment, demand of payment, filing of
      claims with a court in the event of receivership, insolvency or bankruptcy
      of
      the Company, protest or notice with respect to Liabilities and all demands
      whatsoever, and covenants that this Guaranty will not be discharged, except
      by
      complete performance of the obligations and liabilities contained herein. Upon
      any default by the Company as provided in any instrument or document evidencing
      all or any part of Liabilities, including, without limitation, the Notes,
      Secured Party may, at its sole election, proceed directly and at once, without
      notice, against any Guarantor to collect and recover the full amount or any
      portion of Liabilities, without first proceeding against the Company, or any
      other person, firm, or corporation, or against any security or collateral for
      Liabilities.

    

      

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
                 

              
	
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    5.    Secured
      Party is hereby authorized, without notice or demand and without affecting
      the
      liability of any Guarantor, to at any time and from time to time (i) renew,
      extend, accelerate or otherwise change the time for payment of, or other terms
      relating to, Liabilities or otherwise modify, amend or change the terms of
      any
      promissory note or other agreement, document or instrument now or hereafter
      executed by the Company and delivered to Secured Party; (ii) accept partial
      payments on Liabilities; (iii) take and hold security or collateral for the
      payment of Liabilities guaranteed hereby, or for the payment of this Guaranty,
      or for the payment of any other guaranties of Liabilities or other liabilities
      of the Company, and exchange, enforce, waive and release any such security
      or
      collateral; (iv) apply such security or collateral and direct the order or
      manner of sale thereof as in its sole discretion it may determine; and (v)
      settle, release, compromise, collect or otherwise liquidate Liabilities and
      any
      security or collateral therefor in any manner, without affecting or impairing
      the obligations of any Guarantor hereunder. Secured Party shall have the
      exclusive right to determine the time and manner of application of any payments
      or credits, whether received from the Company or any other source, and such
      determination shall be binding on each Guarantor. All such payments and credits
      may be applied, reversed and reapplied, in whole or in part, to any of the
      Liabilities as Secured Party shall determine in its sole discretion without
      affecting the validity or enforceability of this Guaranty.

     

    6.    To
      secure
      the payment and performance of the Liabilities, including the obligations and
      liabilities contained herein, each Guarantor has granted to Secured Party a
      security interest pursuant to a Security Agreement dated as of even date
      herewith among the Company, each Guarantor and Secured Party (the “Security
      Agreement”) in all property of Guarantor. Guarantor agrees that Secured Party
      shall have the rights and remedies of a secured party under the UCC (as defined
      in the Security Agreement), as now existing or hereafter amended, with respect
      to all of the aforesaid property, including without limitation thereof, the
      right to sell or otherwise dispose of any or all of such property and apply
      the
      proceeds of such sale to the payment of Liabilities. In addition, Secured Party
      may, in its sole discretion, without notice to Guarantor and regardless of
      the
      acceptance of any security or collateral for the payment hereof, appropriate
      and
      apply toward the payment of Liabilities (i) any indebtedness due or to become
      due from Secured Party to Guarantor, and (ii) any moneys, credits or other
      property belonging to Guarantor, at any time held by or coming into the
      possession of Secured Party, whether for deposit or otherwise.

     

    7.    Each
      Guarantor hereby assumes responsibility for keeping itself informed of the
      financial condition of the Company, and any and all endorsers and/or other
      guarantors of any instrument or document evidencing all or any part of
      Liabilities and of all other circumstances bearing upon the risk of nonpayment
      of Liabilities or any part thereof that diligent inquiry would reveal, and
      each
      Guarantor hereby agrees that Secured Party shall not have any duty to advise
      Guarantor of information known to Secured Party regarding such condition or
      any
      such circumstances or to undertake any investigation not a part of its regular
      business routine. If Secured Party, in its sole discretion, undertakes at any
      time or from time to time to provide any such information to any Guarantor,
      Secured Party shall be under no obligation to update any such information or
      to
      provide any such information to Guarantor on any subsequent
      occasion.

    

      

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
                 

              
	
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    8.    Each
      Guarantor consents and agrees that Secured Party shall be under no obligation
      to
      marshal any assets in favor of Guarantor or against or in payment of any or
      all
      of Liabilities. Each Guarantor further agrees that, to the extent that the
      Company make a payment or payments to Secured Party, or Secured Party receives
      any proceeds of collateral, which payment or payments or any part thereof are
      subsequently invalidated, declared to be fraudulent or preferential, set aside
      and/or required to be repaid to the Company, its estate, trustee, receiver
      or
      any other party, including, without limitation, Guarantor, under any bankruptcy
      law, state, provincial or federal law, common law or equitable theory, then
      to
      the extent of such payment or repayment, Liabilities or the part thereof which
      has been paid, reduced or satisfied by such amount, and Guarantor’s obligations
      hereunder with respect to such portion of Liabilities, shall be reinstated
      and
      continued in full force and effect as of the date such initial payment,
      reduction or satisfaction occurred.

     

    9.    Each
      Guarantor agrees that any and all claims of any Guarantor against the Company,
      any endorser or any other guarantor of all or any part of Liabilities, or
      against Company’s properties, whether arising by reason of any payment by any
      Guarantor to Secured Party pursuant to the provisions hereof, or otherwise,
      shall be subordinate and subject in right of payment to the prior payment,
      in
      full, of all of Liabilities.

     

    10.   Secured
      Party may, without notice to anyone, sell or assign Liabilities or any part
      thereof, or grant participations therein, and in any such event each and every
      immediate or remote assignee or holder of, or participant in, all or any of
      Liabilities shall have the right to enforce this Guaranty, by suit or otherwise
      for the benefit of such assignee, holder, or participant, as fully as if herein
      by name specifically given such right, but Secured Party shall have an
      unimpaired right, prior and superior to that of any such assignee, holder or
      participant, to enforce this Guaranty for the benefit of Secured Party, as
      to
      any part of Liabilities retained by Secured Party.

     

    11.          This
      Guaranty shall be binding upon Guarantor and upon the successors (including
      without limitation, any receiver, trustee or debtor in possession of or for
      Guarantor) of Guarantor and shall inure to the benefit of Secured Party and
      its
      respective successors and assigns. Guarantor hereby represents and warrants
      that
      it has all necessary corporate authority to execute and deliver this Guaranty
      and to perform its obligations hereunder.

     

    12.          This
      Guaranty shall continue in full force and effect, and Secured Party shall be
      entitled to make loans and advances and extend financial accommodations to
      the
      Company on the faith hereof until such time as Secured Party has, in writing,
      notified Guarantor that all of Liabilities have been paid in full and discharged
      or until Secured Party has actually received written notice from Guarantor
      of
      the discontinuance of this Guaranty, or written notice of the dissolution of
      Guarantor. In case of any discontinuance by, or dissolution of, Guarantor
      (collectively, a “Termination
      Event”),
      this
      Guaranty and the obligations of Guarantor and its successors or assigns, as
      the
      case may be, shall remain in full force and effect with respect to all of
      Liabilities incurred prior to the receipt by Secured Party of written notice
      of
      the Termination Event. 

    

      

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
                 

              
	
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    13.          Wherever
      possible each provision of this Guaranty shall be interpreted in such manner
      as
      to be effective and valid under applicable law, but if any provision of this
      Guaranty shall be prohibited by or invalid under such law, such provision shall
      be ineffective to the extent of such prohibition or invalidity without
      invalidating the remainder of such provision or the remaining provisions of
      this
      Guaranty.

     

    14.          THIS
      GUARANTY SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE
      COMMONWEALTH OF MASSACHUSETTS, without regard to its conflicts of law
      principles.

     

    15.         
      Each
      Guarantor irrevocably agrees that, subject to Secured Party’s sole and absolute
      election, all disputes arising under this Guaranty will be submitted to
      arbitration in Boston, Massachusetts before a single arbitrator of the American
      Arbitration Association (“AAA”). The arbitrator shall be selected by application
      of the rules of the AAA, or by mutual agreement of the parties, except that
      such
      arbitrator shall be an attorney admitted to practice law in the Commonwealth
      of
      Massachusetts. No party to this agreement will challenge the jurisdiction or
      venue provisions as provided in this section. Nothing
      in this section shall limit the Secured Party’s right to obtain an injunction
      for a breach of this Guaranty from a court of law.

     

    16.          
      Termination.
      This
      Agreement shall terminate on the date on which all Liabilities have been
      satisfied, performed, paid or discharged in full.

    

    [Signature
      Page Follows]

    

      

      
        	
                 

              	 	
                 

              	 	
                 

              	 	
                 

              
	
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    IN
      WITNESS WHEREOF, this Guaranty has been duly executed by the undersigned as
      of
      this 26th
      day of
      March, 2007.

     

    
      	
              GUARANTOR:

            
	 	 
	
              Sunrise
                Energy Resources 

            
	 	 
	
              By:

            	
              /s/
                Konstantin Tsiryulnikov

            
	
              Name:

            	
              Konstantin
                Tsiryulnikov

            
	
              Title:

            	
              President
                and CEO

            
	 	 
	
              Pari,
                Ltd.

            
	 	 
	
              By:

            	
              /s/
                Konstantin Tsiryulnikov

            
	
              Name:

            	
              Konstantin
                Tsiryulnikov

            
	
              Title:

            	
              President
                and CEO

            
	 	 
	
              TOV
                Energy-Servicing Company Esko Pivnich

            
	 	 
	
              By:

            	
              /s/
                Konstantin Tsiryulnikov

            
	
              Name:

            	
              Konstantin
                Tsiryulnikov

            
	
              Title:

            	
              President
                and CEO

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ACKNOWLEDGMENT
      OF SIGNATURES

    

    
      	
              STATE
                OF 

            	  
	
              }

            
	
               

            	 	
              }
                SS

            
	
              COUNTY
                OF 

            	  
	
              }

            

    

    

    I,
      ___________________________, a Notary Public in and for the state and county
      aforesaid, so hereby certify that before me this day personally appeared
      _______________________, known to me to be the same person whose name is
      subscribed to the foregoing Secured Continuing Unconditional Guaranty and known
      to me to be the _____________________________ of the corporation that executed
      the foregoing Secured Continuing Unconditional Guaranty, and acknowledged to
      me
      that he executed and delivered the foregoing consent as his free and voluntary
      act, for the uses set forth therein.

     

    IN
      WITNESS WHEREOF, I have hereunto set my hand and official seal this ______
      day
      of February, 2007.

     

    
      	 	
                
                

            	 
	 	
              Notary
                Public

            	 	 
	 	
               

            	 	 
	 	
              My
                Commission Expires:

            	
                
                

            	 

    

    

    ACKNOWLEDGMENT
      OF SIGNATURES

    

    
      	
              STATE
                OF 

            	  
	
              }

            
	
               

            	 	
              }
                SS

            
	
              COUNTY
                OF 

            	  
	
              }

            

    

    

    I,
      ___________________________, a Notary Public in and for the state and county
      aforesaid, so hereby certify that before me this day personally appeared
      _______________________, known to me to be the same person whose name is
      subscribed to the foregoing Secured Continuing Unconditional Guaranty and known
      to me to be the _____________________________ of the corporation that executed
      the foregoing Secured Continuing Unconditional Guaranty, and acknowledged to
      me
      that he executed and delivered the foregoing consent as his free and voluntary
      act, for the uses set forth therein.

     

    IN
      WITNESS WHEREOF, I have hereunto set my hand and official seal this ______
      day
      of February, 2007.

     

    
      	 	
               
                

            	 
	 	
              Notary
                Public

            	 	 
	 	
               

            	 	 
	 	
              My
                Commission Expires:

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