<PAGE>
                                                                   EXHIBIT 10.28

                           SERIES A SUBORDINATED NOTE

                                    IPO NOTE

                        KHANTY MANSIYSK OIL CORPORATION

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER STATE SECURITIES
     LAWS. THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
     SUBJECT TO THE CONDITIONS SPECIFIED IN A SHARE PURCHASE AGREEMENT DATED
     JUNE 29, 2000 AND A SHAREHOLDER AGREEMENT DATED JUNE 29, 2000. A COPY OF
     SUCH CONDITIONS WILL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON
     WRITTEN REQUEST AND WITHOUT CHARGE. THESE SECURITIES MAY NOT BE RESOLD OR
     TRANSFERRED UNLESS SUCH CONDITIONS ARE COMPLIED WITH AND UNLESS REGISTERED
     OR EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE
     STATE SECURITIES LAWS.

                                PROMISSORY NOTE

US$ 10,005,925                                                    June 30, 2000

     FOR VALUE RECEIVED, Khanty Mansiysk Oil Corporation, a Delaware
corporation (the "COMPANY"), hereby promises to pay to the order of Waldo
Securities S.A. (the "LENDER"), a company organized and existing under the
laws of the British Virgin Islands, the principal sum of Ten Million, Five
Thousand Nine Hundred Twenty Five United States Dollars (US$ 10,005,925),
with no interest payable on the outstanding balance thereof from the date
hereof until paid in full (except as otherwise provided in Section 5 of this
Note.

     This Note (the "NOTE") is issued pursuant to and is entitled to the
benefits of, and is subject to the provisions of, the Share Purchase Agreement,
dated June 29, 2000, between the Company and Lender (as amended or otherwise
supplemented from time to time, the "SHARE PURCHASE AGREEMENT"). The Share
Purchase Agreement, among other things, contains provisions for (i) mandatory
redemption by the Company, (ii) optional redemption, with payment, at option of
Company, in cash or the delivery of shares of common stock of the Company, or a
combination thereof (subject to adjustment pursuant to Section 2.4(a) thereof),
(iii) restrictions on transfer of the Note, and (iv) exchange of Notes in
denominations of US$ 100,000 or integral multiples thereof.

     Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Share Purchase Agreement.

     This Note is also subject to the following terms and conditions:

     1. NO INTEREST. No interest shall accrue or be payable at any time on the
unpaid principal amount of the Note, except as otherwise provided in Section 5
of this Note.

     2. PAYMENT OF PRINCIPAL. Unless sooner declared due hereunder or earlier
redeemed in accordance with the Share Purchase Agreement, the principal amount
of this Note shall be paid on the date fixed for such payment pursuant to
Section 2.4(a) of the Share Purchase Agreement.

     3. METHOD OF PAYMENT. Payments of principal shall be made in United States
Dollars by wire transfer in immediately available funds to the account specified
by the Lender or other holder of this Note (the "HOLDER"); provided, however,
that in the event of redemption of the Note pursuant to Section 2.4 of the Share
Purchase Agreement, payment of the outstanding principal may be made, at the
option of Company, in cash or in common stock of the Company or a combination
thereof. Principal shall be paid at such place as the Holder may designate in
writing to the Company. The


<PAGE>


Holder must surrender this Note to the Company upon the earlier of the
redemption hereof in accordance with the Share Purchase Agreement or at the time
of final payment of principal.

     4. PREPAYMENT. The Company shall have the right to prepay this Note prior
to maturity in accordance with the Share Purchase Agreement without the consent
of the Lender.

     5. INTEREST AFTER DUE DATE. If the principal of this Note is not paid when
due, as a result of redemption or otherwise, the overdue amount shall bear
interest from the due date until paid at an annual rate of 12%.

     6. INTEREST SAVINGS CLAUSE. Notwithstanding any other provision hereof, the
interest payable hereunder shall be limited to the maximum amount permitted
under applicable law. If any amount is paid hereunder which would be usurious
under applicable law, it shall be deemed a payment of principal or shall be
promptly refunded to the Company as necessary to avoid violation of any
applicable usury laws.

     7. APPLICATION OF PAYMENTS. All payments received on this Note shall first
be applied to the payment of any accrued interest (if any) pursuant to Section 5
of this Note and then to the reduction of principal.

     8. WAIVERS. The Company, for itself and its successors and assigns and any
endorsers of this Note from time to time hereby waives presentment for payment,
demand, notice of dishonor, protest, notice of protest and any other notice not
provided for in the Share Purchase Agreement that the Company may lawfully
waive. No delay in exercising any right under this Note shall operate as a
waiver of such right or any other right under this Note, nor shall any omission
in exercising any right on the part of Holder under this Note operate as a
waiver of any other rights. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

     9. ATTORNEY'S FEES. If this Note or interest thereon is not paid when
due, or if it is brought to enforce any right hereunder, the Company and each
successor, assignee and endorser of Note agrees to pay all reasonable costs
of collection and enforcement, including reasonable attorneys' fees. In the
event of any bankruptcy or insolvency proceedings involving the Company,
costs of collection shall include all costs and attorneys' fees incurred in
connection with such proceedings, including the fees of counsel for
attendance at meetings of creditors.

     10. RIGHTS AND PRIORITIES. The rights and priorities of the Holders of this
Note with respect to payment of interest and principal shall be subordinated in
right of payment to the notes issued by the Company pursuant to the
US$ 55,000,000 financing conducted by the Company in October 1997 (the "SENIOR
FINANCING") and shall rank PARI PASSU with the rights and priorities of all
other current and future unsecured indebtedness of the Company of similar size
(being less than US$ 10 Million) and tenor.

     11. SUBORDINATION.

     (a)  The indebtedness of the Company evidenced hereunder shall be junior
          and subordinate to the Senior Debt. As used in this Note, the term
          "SENIOR DEBT" means: (i) all securities issued by the Company pursuant
          to the Senior Financing and (ii) any refundings, renewals or
          extensions of any indebtedness described in clause (i) above.

     (b)  In the event of any dissolution, winding up, liquidation,
          reorganization or other similar proceedings relative to the Company,
          its property or its operations (whether in bankruptcy, insolvency or
          receivership proceedings, or upon an assignment for the benefit of
          creditors, or any other marshalling of assets of the Company or
          otherwise), then all Senior Debt shall first be paid in full in cash
          or cash equivalents before the Company shall be entitled to retain
          any payment or distribution of assets made after such event with
          respect to the Notes. In any such proceeding, any payment or
          distribution of assets to which the Holder would be entitled if the
          Notes were not subordinated to the Senior Debt shall be paid by the
          trustee or agent or other person making such payment or distribution,
          or by the Holder if received by it, directly to the


                                       2
<PAGE>

          holders of the Senior Debt (pro rata) to the extent necessary to make
          payment in full of all Senior Debt remaining unpaid, after giving
          effect to any concurrent payment or distribution to or for the holders
          of the Senior Debt.

     (c)  The Company may, from time to time (and with respect to payments of
          principal of the Notes, upon 30-days prior written notice to the
          holders of the Senior Debt), pay or cause to be paid to the Holder and
          the Holder may accept and retain scheduled payments in respect of
          interest and principal on the Notes, as originally executed and
          delivered, unless at the time of any such proposed payment or
          immediately after giving effect thereto, there shall exist any default
          with respect to the Senior Debt that permits holders of the Senior
          Debt as to which such default relates to accelerate in maturity (each,
          a "SENIOR EVENT OF DEFAULT") and the holders of the Senior Debt have
          notified the Company in writing of the existence of such Senior Event
          of Default prior to such payment. If the Holder receives payment from
          the Company pursuant to this Section 11(c), such payment shall be
          deemed to constitute a representation by the Company to the holders of
          the Senior Debt and to the Holders that no Senior Event of Default
          exists, and that such payment is permitted to be paid to the Holder
          under the Notes; and the Holder shall be entitled to keep and retain
          such payments, unless the holders of the Senior Debt shall have
          notified the Company of the Holder of a Senior Event of Default in
          writing prior to such payment, in which case (if such Senior Event of
          Default in fact existed on the date of such payment) the Holder shall
          forthwith deliver such payment or an amount of cash equal thereof to
          the holders of the Senior Debt for application in payment of the
          Senior Debt.

     (d)  In the event that the Holder shall receive any payment or distribution
          of assets which the Holder is not entitled to retain under the
          provisions of the Note, the Holder shall hold any amount so received
          in trust for the holders of Senior Debt and, upon the request of any
          holder of Senior Debt, shall forthwith turn over such payment or
          distribution (without liability for interest thereon) to the holders
          of Senior Debt (pro rata) in the form received to be applied to Senior
          Debt. Any holder of Senior Debt may at any time and from time to time
          without the consent of or notice to the Holder: (i) extend, renew,
          modify or amend the terms of Senior Debt; (ii) sell, exchange, release
          or otherwise deal with any property pledged, mortgaged or otherwise
          securing Senior Debt; (iii) release any guarantor or any other person
          (except the Company) liable in any manner for the Senior Debt; (iv)
          exercise or refrain from exercising any rights against the Company or
          any other person; and (v) apply any sums by whomever paid or however
          realized to Senior Debt. Any and all of such actions set forth in this
          Section 11 may be taken by holders of Senior Debt without incurring
          responsibility to the Holder and without impairing or releasing the
          obligations of the Holder under this Section 11.

     (e)  No holders of Senior Debt shall be prejudiced in its right to enforce
          subordination of the Notes by any act or failure to act by the Company
          or anyone in custody of the Company's assets or property. No amendment
          or modification of the terms of this Section 11 shall be effective as
          against any holder of Senior Debt without the consent of such holder.

     12. NOTICES. Any notice, request, demand, consent, approval or other
communication which the Company or the Holder are obligated or may elect to give
hereunder shall be given in the form and in the manner set forth in the Share
Purchase Agreement for the giving of notices thereunder and shall be deemed
given for the purposes hereof at such time as the same, if given under the Share
Purchase Agreement, would be deemed given.


                                       3
<PAGE>


     13. SEVERABILITY. If any provision of this Note or the application thereof
to any party or circumstances is held invalid or unenforceable, the remainder of
this Note and the application of such provision to other parties or
circumstances will not be affected thereby and the provisions of this Note shall
be several in any such instance.

     14. GOVERNING LAW. This Note shall be governed by and interpreted in
accordance with the laws of the State of New York applicable to agreements made
and to be performed within such State.


                                        KHANTY MANSIYSK OIL CORPORATION

                                        By:
                                            -----------------------------
                                            Name: John B. Fitzgibbons
                                            Title: Chief Executive Officer



                                       4