NON-NEGOTIABLE PROMISSORY NOTE
$500,000.00 August 5, 2000
FOR VALUE RECEIVED, Chaparral Resources, Inc. a Delaware corporation
("Maker"), promises to pay to EcoTels International Limited, a Cayman Islands
company ("Payee"), in lawful money of the United States of America, the
principal sum of Five Hundred Thousand Dollars ($500,000.00), together with
interest in arrears on the unpaid principal balance at an annual rate equal to
10%, in the manner provided below. Interest shall be calculated on the basis of
a year of 365 or 366 days, as applicable, and charged for the actual number of
days elapsed.
ARTICLE 1
PAYMENTS
1.1 PRINCIPAL AND INTEREST
The principal amount of this Note, together with all accrued but unpaid
interest thereon, shall be due and payable on September 30, 2000.
1.2 MANNER OF PAYMENT
Payment of principal and interest on this Note shall be made via Fedwire
electronic fund transfer to an account designated by Payee in writing. If
payment of principal or interest on this Note is due on a day which is not a
business day, such payment shall be due on the next succeeding business day, and
such extension of time shall be taken into account in calculating the amount of
interest payable under this Note. "Business Day" means any day other than a
Saturday, Sunday or legal holiday in the State of Texas.
1.3 PREPAYMENT
Maker may, without premium or penalty, at any time and from time to time,
prepay all or any portion of the outstanding principal balance due under this
Note, provided that each such pre-payment is accompanied by accrued interest on
the amount of principal prepaid calculated to the date of such pre-payment. Any
partial pre-payments shall be applied to installments of principal in inverse
order of their maturity.
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ARTICLE 2
DEFAULTS
2. EVENTS OF DEFAULT
The occurrence of any one or more of the following events with respect to
Maker shall constitute an event of default hereunder ("Event of Default"):
(a) if Maker shall fail to pay when due any payment of principal or
interest on this Note and such failure continues for 15 days after Payee
notifies Maker therein writing;
(b) if, pursuant to or within the meaning of the United States Bankruptcy
Code or any other federal or state law relating to insolvency or relief of
debtors (a "Bankruptcy Law"), Maker shall (i) commence a voluntary case or
proceeding; (ii) consent to the entry of an order for relief against it in
an involuntary case; (iii) consent to the appointment of a trustee,
receiver, assignee, liquidator or similar official; (iv) make an assignment
for the benefit of its creditors; or (v) admit in writing its inability to
pay its debts as they become due; and
(c) if a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that (i) is for relief against Maker in an involuntary
case, (ii) appoints a trustee, receiver, assignee, liquidator or similar
official for Maker or substantially all of Maker's properties, or (iii)
orders the liquidation of Maker, and in each case the order or decree is
not dismissed within 120 days.
2.2 NOTICE BY MAKER
Maker shall notify Payee in writing within five days after the occurrence
of any Event of Default of which Maker acquires knowledge.
2.3 REMEDIES
Upon the occurrence of an Event of Default hereunder (unless all Events of
Default have been cured or waived by Payee), Payee may, at its option, (a) by
written notice to Maker, declare the entire unpaid principal balance of this
Note, together with all accrued but unpaid interest thereon, immediately due and
payable regardless of any prior forbearance, and (b) exercise any and all rights
and remedies available to it under applicable law, including, without
limitation, the right to collect from Maker all sums due under this Note. Maker
shall pay all reasonable costs and expenses incurred by or on behalf of Payee in
connection with Payee's exercise of any or all of its rights and remedies under
this Note, including, without limitation, reasonable attorneys' fees.
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ARTICLE 3
MISCELLANEOUS
3.1 WAIVER
The rights and remedies of Payee under this Note shall be cumulative and
not alternative. No waiver by Payee of any right or remedy under this Note shall
be effective unless in a writing signed by Payee. Neither the failure nor any
delay in exercising any right, power or privilege under this Note will operate
as a waiver of such right, power or privilege and no single or partial exercise
of any such right, power or privilege by Payee will preclude any other or
further exercise of such right, power or privilege or the exercise of any other
right, power or privilege. To the maximum extent permitted by applicable law,
(a) no claim or right of Payee arising out of this Note can be discharged by
Payee, in whole or in part, by a waiver or renunciation of the claim or right
unless in a writing, signed by Payee, (b) no waiver that may be given by Payee
will be applicable except in the specific instance for which it is given, and
(c) no notice to or demand on Maker will be deemed to be a waiver of any
obligation of Maker or of the right of Payee to take further action without
notice or demand as provided in this Note. Maker hereby waives presentment,
demand, protest and notice of dishonor and protest.
3.2 NOTICES
Any notice required or permitted to be given hereunder shall be given in
accordance with the Agreement.
3.3 SEVERABILITY
If any provision in this Note is held invalid or unenforceable by any court
of competent jurisdiction, the other provisions of this Note will remain in full
force and effect. Any provision of this Note held invalid or unenforceable only
in part or degree will remain in full force and effect to the extent not held
invalid or unenforceable.
3.4 GOVERNING LAW
This Note will be governed by the laws of the State of Texas without regard
to conflicts of laws principles.
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3.5 PARTIES IN INTEREST
This Note shall bind Maker and its successors and assigns. This Note shall
not be assigned or transferred by Payee without the express prior written
consent of Maker, except by will or, in default thereof, by operation of law.
3.6 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Note are provided for convenience only and
will not affect its construction or interpretation. All references to "Section"
or "Sections" refer to the corresponding Section or Sections of this Note unless
otherwise specified. All words used in this Note will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the words "hereof" and "hereunder" and similar references refer to
this Note in its entirety and not to any specific section or subsection hereof.
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IN WITNESS WHEREOF, Maker has executed and delivered this Note as of the date
first written above.
CHAPARRAL RESOURCES, INC.
By: /s/ Michael B. Young
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Michael B. Young
Treasurer and Controller
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