EXHIBIT 10.5
PROMISSORY NOTE
$1,650 Dated: August 25, 2003
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1. Principal.
FOR VALUE RECEIVED, the undersigned, Mongolian Explorations Ltd., a Nevada
corporation ("Borrower"), hereby promises to pay to the order of Timursukh
Oidov, of Ulaanbaatar, Mongolia ("Lender"), the principal sum of One Thousand
Six Hundred and Fifty Dollars (U.S.$1,650) (the "Loan") without interest with no
fixed terms of repayment.
2. Manner of Payment.
Principal on the Loan, and all other amounts payable hereunder, are payable in
lawful currency of United States in immediately available funds at such address
and in such form as may be required by Lender.
Unless accelerated pursuant to the terms of this Note, the unpaid balance of
this Note, shall be due and payable on demand (the "Maturity Date. No amount
paid under this Note may be reborrowed. All payments received by Xxxxxx under
this Note shall be credited first to any charges or other expenses for which
Xxxxxx is entitled to payment hereunder, next to unpaid principal.
3. Events of Default/Remedies.
a. Events of Default. Any of the following events shall constitute an
Event of Default:
(1) breach by Borrower of any of Borrower's obligations or covenants
under this Note; or
(2) Xxxxxxxx (A) becomes insolvent or admits in writing Xxxxxxxx's
inability to pay Xxxxxxxx's debts as they mature, (B) makes any
assignment for the benefit of creditors, or (C) applies for or consents
to the appointment of a receiver or trustee for Borrower or for a
substantial part of Borrower's property or business, or a receiver or
trustee otherwise is appointed and is not discharged within thirty (30)
days after such appointment; or
(3) any of Borrower's representations or warranties made herein or in
any statement or certificate at any time given by Borrower pursuant
hereto or in connection herewith is false or misleading in any material
respect; or
(4) any bankruptcy, insolvency, reorganization or liquidation
proceeding or other proceeding for relief under any bankruptcy law or
any law for the relief of debtors is instituted by or against Borrower;
or
(5) any money judgment, writ or warrant of attachment, or similar
process (singly or, if more than one, cumulatively in excess of
USD$15,000) is entered or filed against Borrower or any of the assets
of Borrower and (A) remains unvacated, unbonded, unstayed, undismissed
or undischarged for a period of thirty (30) days or in any event later
than five (5) days before the date of any proposed sale thereunder, or
(B) Xxxxxxxx has not appealed the same in good faith to Xxxxxx's
satisfaction; or
(6) the condition, financial or otherwise, of Borrower suffers any
material adverse change, in the reasonable opinion of Xxxxxx; or
b Remedies. Upon demand or upon the occurrence and during the continuance
of an Event of Default described in Subsections 3(a)(2) or 3(a)(4) above,
all indebtedness under this Note shall automatically be immediately due
and payable. In addition, Lender, at its option, and without notice to
Borrower, may take one or more of the actions described below. Upon the
occurrence and during the continuance of any other Event of Default,
Lender at its option and, unless otherwise specified below, without notice
to Borrower, may do any one or more of the following:
(1) declare all indebtedness under this Note immediately due and
payable and credit any sums received thereafter in such manner as it
elects upon such indebtedness; provided, however, that such application
of sums so received shall not serve to waive or cure any default
existing under this Note nor to invalidate any notice of default or any
act done pursuant to such notice and shall not prejudice any rights of
Lender; and
(2) exercise any or all rights provided or permitted by law or granted
pursuant to this Note in such order and in such manner as Lender may,
in its sole judgment, determine.
c. No Waiver of Remedies. No waiver of any breach of or default under any
provision of this Note shall constitute or be construed as a waiver by
Lender of any subsequent breach of or default under that or any other
provision of this Note.
d. Remedies Not Exclusive. No remedy herein conferred upon Xxxxxx is
intended to be exclusive of any other remedy herein or in any other
agreement between the parties hereto or by law provided or permitted, but
each shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law, in equity or by
statute.
4. Covenants and Agreements.
Borrower hereby makes the following covenants, which shall be deemed to be
continuing covenants until payment in full of all indebtedness of Borrower to
Lender arising under this Note:
a. Borrower shall promptly notify Lender in writing of the occurrence of
any act or event including, without limitation, the commencement or threat
of any action, suit, claim or proceeding against or investigation of
Borrower, which could materially and adversely affect Borrower or which
could impair the validity, effectiveness or enforceability of, or impair
Borrower's ability to perform its obligations under, this Note, and of the
occurrence of any Event of Default or any event which with the giving of
notice, the lapse of time, or both, would become an Event of Default and
the action Borrower proposes to take with respect thereto.
b. Borrower shall, at any time and from time to time, upon the written
request of Xxxxxx, execute and deliver to Lender such further documents
and instruments and do such other acts and things as Lender may reasonably
request in order to effectuate fully the purpose and intent of this Note.
5. Representations and Warranties of Borrower.
Borrower hereby makes the following representations and warranties, which shall
be deemed to be continuing representations and warranties until payment in full
of all indebtedness of Borrower to Lender arising pursuant to this Note:
a. No Conflict. The execution, delivery and performance of this Note are
not in contravention of or in conflict with any agreement, indenture or
undertaking to which Borrower is a party or by which Borrower or any of
Borrower's assets or property may be bound or affected and do not cause
any security interest, lien or other encumbrance to be created or imposed
upon any such property by reason thereof.
b. Litigation. There is no action, suit or proceeding pending or, to the
best of Xxxxxxxx's knowledge and belief, threatened against or affecting
Borrower which could impair the validity, effectiveness or enforceability
of, or impair Borrower's ability to perform its obligations under, this
Note, whether said actions, suits or proceedings are at law or in equity
or before or by any governmental authority.
6. Legal Fees.
Xxxxxxxx agrees to pay all costs and expenses, including without limitation
reasonable attorneys' fees, incurred by Xxxxxx in connection with the
enforcement of any obligation of Borrower under this Note.
7. Severability.
In case any term or any provision of this Note shall be invalid, illegal or
unenforceable, such provision shall be severable from the rest of this Note and
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
8. Headings.
Headings used in this Note are inserted for convenience only and shall not be
deemed to constitute a part hereof.
9. Governing Law.
This Note shall be governed by and construed in accordance with the laws of the
State of Nevada.
Borrower:
MONGOLIAN EXPLORATIONS LTD.
a Nevada corporation
By: /s/ Xxxx Xxxxx
Xxxx Xxxxx, President
