<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)
CHAPARRAL RESOURCES, INC.
(Name of Issuer)
Common Stock, Par Value, $0.10 Per Share
(Title of Class of Securities)
159420207
(CUSIP Number)
Gaetano J. Casillo
Allen & Company Incorporated
711 Fifth Avenue, New York, New York 10022, (212) 832-8000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
February 11, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Section 240.13d-1(e),(f) or (g), check the following
box [ ].
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purposes of Section 18 of the Securities Exchange Act
of 1934 ("Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
<PAGE>
SCHEDULE 13D
- -------------------
CUSIP No. 159420207
- -------------------
=======================================================
1 NAME OF REPORTING PERSON - S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Allen Holding Inc.
- ---------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ---------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not Applicable
- ---------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(E) [ ]
- ---------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
- ---------------------------------------------------------------------------
7 SOLE VOTING POWER
11,177,107 (includes 2,651,720 shares underlying warrants to purchase
shares of the Issuer's Common Stock.)
- ---------------------------------------------------------------------------
8 SHARED VOTING POWER
0
- ---------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
11,177,107 (includes 2,651,720 shares underlying warrants to purchase
shares of the Issuer's Common Stock.)
- ---------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- ---------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,177,107 (includes 2,651,720 shares underlying warrants to purchase
shares of the Issuer's Common Stock.)
- -----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [x]
- -----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.5%
- -----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
HC
=======================================================
=======================
<PAGE>
<PAGE>
SCHEDULE 13D
- -------------------
CUSIP No. 159420207
- -------------------
=======================================================
=======================
1 NAME OF REPORTING PERSON - S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Allen & Company Incorporated
- -----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- -----------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not Applicable
- -----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(E) [ ]
- -----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- ------------------------------------------------------------------------------
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
11,177,107 (includes 2,651,720 shares underlying warrants to purchase
shares of the Issuer's Common Stock.)
- -----------------------------------------------------------------------------
8 SHARED VOTING POWER
0
- -----------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
11,177,107 (includes 2,651,720 shares underlying warrants to purchase
shares of the Issuer's Common Stock.)
- -----------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- ---------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,177,107 (includes 2,651,720 shares underlying warrants to purchase
shares of the Issuer's Common Stock.)
- -----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [x]
- -----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.5%
- -----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO, BD
=======================================================
=======================
<PAGE>
<PAGE>
AMENDMENT NO. 4
TO THE
SCHEDULE 13D
The Reporting Persons hereby amend their Schedule 13D relating to the common
stock, par value $0.10 per share (the "Common Stock"), of Chaparral
Resources, Inc. (the "Issuer"), to report (i) the purchase of 4,000,000
shares of Common Stock, as further described below, and (ii) the extension of
approximately $2.76 million in credit to the Issuer.
Item 5.Interest in Securities of the Issuer
(a)As of the close of business on March 31, 1999, the Reporting
Persons, by virtue of the language of Rule 13d-3(d)(1)(i), may be deemed to
own beneficially in the aggregate 11,177,107 (including 2,651,720 shares
underlying warrants) shares of the Issuer's Common Stock which constitutes
19.5% of the outstanding shares (based upon the number of shares that were
reported to be outstanding in the Issuer's Form 10-Q filed in November 1998).
<TABLE>
<CAPTION>
=======================================================
=======================
Name Shares of Common Stock Percentage
- -----------------------------------------------------------------------------
<S> <C> <C>
Allen Holding Inc. 11,177,107(1)(2)(3)(4) 19.5%
- -----------------------------------------------------------------------------
Allen & Company Incorporated 11,177,107(1)(2)(3) 19.5%
- -----------------------------------------------------------------------------
=======================================================
=======================
</TABLE>
<PAGE>
<PAGE>
(1) Includes 2,651,720 shares underlying warrants to purchase shares of the
Issuer's Common Stock. The number of Warrants reflected herein includes
225,000 warrants that ACI acquired and holds for the benefit of certain of
its officers, directors and employees.
(2) Does not include certain shares owned directly by certain officers
and stockholders of ACI and AHI with respect to which ACI and AHI disclaim
beneficial ownership. Certain officers and stockholders of AHI and ACI may
be deemed to beneficially own certain shares of the Issuer's Common Stock
reported to be beneficially owned directly by ACI and AHI.
(3) Excludes shares held in ACI's market maker account.
(4) Represents shares owned by ACI, a wholly-owned subsidiary of AHI.
(c) In privately negotiated transactions effected on February 11, 1999,
ACI purchased, on behalf of certain of its officersand directors, in the
aggregate, 4,000,000 shares of the Issuers Common Stock for $.05 per
share.
Other than (i)the shares purchased in connection with the transaction
described herein, (ii) the trades effected by ACI in its capacity
as a market maker and (iii) the previous sale of such 4,000,000 shares for
$.01 per share in a privately negotiated transaction effected on
December 31, 1998, no trades involving Issuers Common Stock were made by ACI
or AHI for their own accounts in the past 60 days.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Pursuant to a Promissory Note dated March 31, 1999, the form of which is
attached hereto as Exhibit D and incorporated herein by reference (the Note),
ACI extended approximately $2.76 million in credit to the Issuer.
John McMillian, Chairman of the Board of the Issuer, participated as a lender
in this extension of credit. The Note is secured by a certain Pledge
Agreement dated March 31, 1999 between ACI and the Issuer
(the Pledge Agreement). The Pledge Agreement is attached hereto as Exhibit E
and incorporated herein by this reference. In connection with the Note and
the Pledge Agreement, ACI and Whittier Ventures LLC, a California limited
liability company (Whittier), entered into a certain Intercreditor
Agreement dated as of March 31, 1999 (the Intercreditor Agreement).
The Intercreditor Agreement established, among other things, that ACIs and
Whittiers security interest in the Collateral as defined in the Pledge
Agreement shall be treated on a pari parsu basis.
Item 7 Material to be Filed as Exhibits.
Exhibit A --Director and Executive Officers of Allen Holding, Inc.
and Allen & Company Incorporated
Exhibit D -- Form of Promissory Note
Exhibit E -- Pledge Agreement
<PAGE>
<PAGE>
After reasonable inquiry and to the best of our knowledge and belief, we certify
that the information set forth in this statement is true, complete and correct.
Dated: March 31, 1999
ALLEN HOLDING INC.
By: /s/ Gaetano J. Casillo
- ----------------------------------------
Gaetano J. Casillo
Vice President
ALLEN & COMPANY INCORPORATED
By: /s/ Gaetano J. Casillo
- ----------------------------------------
Gaetano J. Casillo
Vice President
135661
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A
OFFICERS AND DIRECTORS OF ALLEN HOLDING INC.
AND ALLEN & COMPANY INCORPORATED
<S> <C> <C>
Principal Occupation (i.e.,
Business Position with Allen Holdings Inc.
Name xx Address and Allen & Company Incorporated)
Herbert A. Allen x President, Managing Director,
Director, Chief Executive Officer
Herbert A. Allen III x Vice President, Director
Grace Allen x Director
Glenn A. Andreas x Vice President - Elect
Eran S. Ashany x Vice President, Director
Edmund M. Bleich x Vice President
Jay B. Bockhaus x Vice President - Elect
Denise Calvo-Silver x Vice President, Director
Dominick J. Cantalupo x Co-Chief Operations Officer,
Vice President
Marvyn Carton x Director - Emeritus
Gaetano J. Casillo x Chief Compliance Officer,
Vice President
Toby R. Coppel x Vice President - Elect
Robert H. Cosgriff x Chief Administrative Officer,
Executive Vice President,
Managing Director, Director
Richard M. Crooks, Jr. x Director
Thalia V. Crooks x Vice President, Director
Mary L. Cullen x Vice President, Secretary, Director
Robert A. Dean x Vice President
<PAGE>
<PAGE>
<S> <C> <C>
Principal Occupation (i.e.,
Business Position with Allen Holdings Inc.
Name xx Address and Allen & Company Incorporated)
Orin F. Devereux x Vice President, Director
Daniel Englander x Vice President - Elect
Howard M. Felson x Assistant Secretary, Vice President
Anthony J. Ferrante x Treasurer
Richard L. Fields x Executive Vice President, Managing
Director, Director
Paul A. Gould x Executive Vice President, Managing
Director, Director
John G. Hall x Vice President, Director
John H. Josephson x Vice President, Director
Clarke R. Keough x Vice President, Director
Donald R. Keough x Chairman of the Board, Managing Director,
Director
Kaveh A. Khosrowshahi x Vice President, Director
LeRoy Kim x Vice President - Elect
Neal Kopp x Vice President
Terry Allen Kramer x Director
Irwin H. Kramer x Executive Vice President,
Managing Director, Director
Suzanne G. Kucera x Vice President, Director
Robert J. Kurz x Vice President
William F. Leimkuhler x Assistant Secretary, Vice
President, General Counsel
Jonathan A. Lipton x Vice President - Elect
<PAGE>
<PAGE>
<S> <C> <C>
Principal Occupation (i.e.,
Business Position with Allen Holdings Inc.
Name xx Address and Allen & Company Incorporated)
Dan W. Lufkin x Special Advisor to the Board of
Directors
Robert A. Mackie x Executive Vice President,
Managing Director, Director
James C. Maiden, Jr. x Vice President
Terence C. McCarthy x Co-Chief Operations Officer,
Vice President
Robert C. Miller x Vice President, Director
Terrence C. Morris x Vice President
Brian J. Murphy x Vice President, Director
Louis J. Mustacchio x Vice President
Walter T. O'Hara, Jr. x Executive Vice President,
Managing Director, Director
Christine R. Olenchalk x Vice President
Nancy B. Peretsman x Executive Vice President,
Managing Director, Director
Patrick S. Perry x Vice President, Director
Pamela M. Plager x Vice President, Director
Eugene Protash x Vice President, Assistant
Secretary
James W. Quinn x Director, Vice President,
Assistant Secretary
James S. Rubin x Vice President - Elect
Philip D. Scaturro x Executive Vice President,
Managing Director, Director
John A. Schneider x Executive Vice President,
Managing Director, Director
Daniel J. Selmonosky x Vice President, Director
<PAGE>
<PAGE>
<S> <C> <C>
Principal Occupation (i.e.,
Business Position with Allen Holdings Inc.
Name xx Address and Allen & Company Incorporated)
Enrique F. Senior x Executive Vice President,
Managing Director, Director
Stanley S. Shuman x Executive Vice President,
Managing Director, Director
John M. Simon x Executive Vice President,
Managing Director, Director
Kenneth M. Siskind x Vice President - Elect
Ian G. Smith x Vice President - Elect
Everett K. Wallace x Vice President - Elect
Dennis J. Warfield x Vice President, Chief
Information Officer
Kim M. Wieland x Executive Vice President,
Managing Director, Director,
Chief Financial Officer
Edward D. Weinberger x Vice President, Director
Harold M. Wit x Executive Vice President,
Managing Director, Director
</TABLE>
x 711 Fifth Avenue, New York, New York 10022-3194.
xx All the Executive Officers and Directors of Allen Holding Inc. and
Allen & Company Incorporated are U.S. citizens unless otherwise
indicated.
<PAGE>
<PAGE>
EXHIBIT D
PROMISSORY NOTE
$2,769,978.08 March 31, 1999
FOR VALUE RECEIVED, Chaparral Resources, Inc., a Colorado corporation
(Maker), promises to pay to Allen & Company Incorporated (Payee), in lawful
money of the United States of America, the principal sum of [Two Million
Two Hundred Fifty Thousand Dollars ($2,769,978.00), together with interest in
arrears on the unpaid principal balance at an annual rate equal to eight
percent (8%) per annum. 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.
This Note is secured as provided in that certain Pledge Agreement
dated the date hereof between Payee and Maker (the Pledge Agreement). This
Note shall supersede the Promissory Notes (aggregating $1,750,000 in face
amount) dated January 12, January 19, January 26, February 4, February 11 and
February 22, 1999 from Maker to Payee, and delivery of this Note by Maker to
Payee shall be deemed to constitute repayment by Maker of all outstanding
principal and interest under such Promissory Notes.
The principal amount of this Note, together with any accrued and unpaid
interest thereon shall be due and payable on or before August 31, 1999. All
payments shall be made in lawful money of the United States and in
immediately available funds.
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 prepayment is accompanied by accrued interest on the
amount of principal prepaid calculated to the date of such prepayment.
Maker hereby represents to Payee that it has no debt obligations
that would be senior in priority to the repayment of this Note, except for
the $975,000 obligation arising in connection with Makers note to Chase Bank of
Texas, N.A.; Maker hereby agrees that without the prior written consent of
Payee it will not incur any such senior debt obligations until all principal
and interest under this Note has been paid in full.
Maker agrees to use its best efforts to obtain any and all
consents to this Promissory Note and the related Pledge Agreement that may
be required by any obligee under any debt obligation of Maker ranking in right
of repayment senior to or pari passu with Makers obligation hereunder.
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 the principal or
interest on this Note and such failure continues for
fifteen (15) days after Payee notifies Maker thereof in
writing.
<PAGE>
<PAGE>
(b) Any Event of Default (as defined therein) under any debt
obligation of Maker ranking in priority of repayment
senior to or pari passu with this promissory note.
(c) 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.
(d) 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 Makers properties, or (iii) orders
the liquidation of Maker, and in each case the order or
decree is not dismissed within 60 days.
(e) Any grant of a security interest in any asset of the
Maker, other than as contemplated by the
Pledge Agreement, without the express prior written
consent of Payee.
Maker shall notify Payee in writing within three (3) days after
the occurrence of any Event of Default of which Maker acquires knowledge.
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, (i) by written notice to Maker, declare the entire unpaid principal
balance of this Note, together with all accrued interest thereon, immediately
due and payable regardless of any prior forbearance, and (ii) 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 Payees exercise of any or all of its
rights and remedies under this Note and the Pledge Agreement,including,
without limitation, reasonable attorneys fees.
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 under this Note, 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 wavier or renunciation of the claim or
right unless in 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.
<PAGE>
<PAGE>
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.
This Note will be governed by the laws of the State of New York
without regard to conflicts of laws principles. Maker irrevocably consents
to the jurisdiction of the courts in the State of New York, County of New York,
and to the Federal Court for such in connection with any actions or
proceedings arising out of or relating to this Agreement, and waives
any objection to venue laid therein.
This Note shall bind Maker and its successors and assigns.
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.
IN WITNESS WHEREOF, Maker has executed and delivered this Note as
of the date first stated above.
CHAPARRAL RESOURCES, INC.
By:
- --------------------------------
Title:
- --------------------------------
135661
<PAGE>
<PAGE> PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of March 31, 1999 between Chaparral
Resources, inc., a Colorado corporation (Pledgor) and ALLEN & COMPANY
INCORPORATED, a New York corporation (the "Secured Party").
W I T N E S S E T H :
WHEREAS, Pledgor has delivered a Promissory Note in the
principal amount of $2,769.978.08 of even date herewith to the Secured Party
(the "Note");
WHEREAS, the Secured Party is unwilling to accept such Note and
advance such payments without security therefor by a pledge by Pledgor of all
of Pledgors right, title and interest in and to the Collateral (as defined
below).
NOW, THEREFORE, the undersigned hereby agrees as follows:
1.Grant of Security Interest. As security for the debts,
liabilities and obligations evidenced by or arising under the Note (the
"Obligations"), Pledgor hereby pledges to Secured Party, and grants and conveys
to Secured Party a security interest in, all of the issued and outstanding
shares of Central Asia Petroleum (Guernsey) Ltd. (CAP-G), representing all
of Pledgor's right, title and interest therein and thereto, and all profits,
distributions and proceeds arising therefrom (collectively, the
"Collateral"). In the event of a foreclosure hereunder, Pledgor hereby agrees
that all profits, distributions or proceeds resulting from Pledgor's
ownership of the Collateral shall be delivered or distributed as directed by
Secured Party. Pledgor shall accept any such profits, distributions or
proceeds in trust for Secured Party and shall deliver them immediately upon
the direction of Secured Party, together with Pledgor's endorsement and
appropriate instruments of transfer.
2. Delivery of Pledged Collateral; Further Assurances. The
security interest granted hereby is subordinate only to that previously
granted by Pledgor to Whittier Ventures, LLC (the Other Creditor) pursuant
to that certain Credit Support and Pledge Agreement entered into as of
July 2, 1998 (as amended, the Prior Pledge Agreement). In addition, Pledgor
is simultaneously pledging the Collateral to the Other Creditor pursuant to a
Pledge Agreement of even date herewith. Except to the extent held by or for
the Other Creditor as a secured creditor of Pledgor, all certificates or
instruments representing or evidencing the Collateral shall be delivered to and
held by or on behalf of Secured Party pursuant hereto and shall be in
suitable form for transfer and delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to Secured Party. Secured Party shall have the right
at any time to exchange certificates or instruments representing or
evidencing the Collateral for certificates or instruments of larger or
smaller denominations. Pledgor hereby consents to, and agrees to execute at
Secured Party's request any and all stock powers or other agreements of
transfer to accommodate, any transfer of registration of the Collateral and
to take all further action that may be necessary or desirable or that Secured
Party may request in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable Secured
Party to exercise and enforce its rights and remedies hereunder and to carry
out the provisions and purposes hereof.
<PAGE>
<PAGE>
3.Pledgors Covenants and Warranties: Pledgor warrants and
covenants as follows:
(a) To pay and perform all of the Obligations applicable to
Pledgor according to their terms.
(b) To defend the title to the Collateral against all persons and
against all claims and demands whatsoever, other than
claims or demands of the Other Creditor.
(c) To keep the Collateral free and clear of all liens,
security interests, claims, charges, encumbrances,
taxes and assessments whatsoever, other than security
interests granted in favor of the Other Creditor.
(d) To retain full beneficial ownership the Collateral during
the term of this Pledge Agreement and not
to sell, exchange, assign, loan, deliver, lease, mortgage
or otherwise dispose of or encumber the same
to anyone other than the Other Creditor without the
written consent of Secured Party.
(e) To pay when due all taxes, assessments and commitments
relating to the Collateral.
(f) Upon demand by Secured Party, to execute any written
agreement or do any other acts necessary to
effectuate the purposes and provisions of this Pledge
Agreement and to execute any instrument or
statement required by law or otherwise in order to
perfect or continue the security interest of Secured
Party in the Collateral.
4. Default. The following shall constitute a default by
Pledgor:
(a) Failure to pay any portion of the principal or interest
on the Note when due.
(b) Failure by Pledgor to comply with or perform any provision
of this Pledge Agreement.
(c) Subjection of the Collateral to levy of execution or other
judicial process.
(d) Commencement of any bankruptcy or insolvency proceeding by
or against Pledgor.
(e) Any substantial reduction in the value of the Collateral or
any act of Pledgor which imperils the prospect of full
performance or satisfaction of Pledgor's obligations
herein.
<PAGE>
<PAGE>
Upon any default by Pledgor, the Obligations shall immediately
become due and payable in full without notice or demand and Secured Party
shall have all the rights, remedies and privileges with respect to
repossession, retention and sale of the Collateral and disposition of the
proceeds as are accorded in the Uniform Commercial Code. Waiver by Secured
Party or failure of Secured Party to insist upon a strict performance by
Pledgor shall not constitute waiver by Secured Party as to any future
performance or any of its rights hereunder or under the Note.
1. Other Rights of Secured Party. Secured Party shall be
entitled to reasonable attorneys' fees and expenses in
the collection and sale of the Collateral and the
enforcement of the terms of the Note and this
Pledge Agreement. Pledgor shall remain liable for the
Obligations, for any deficiency resulting from sale of
the Collateral, and for monies expended by
Secured Party in performing any provisions hereof for
Pledgor's account.
2. Termination. Upon satisfaction in full by Pledgor of the
Obligations, this Pledge Agreement and
the security interests granted hereunder shall terminate
and be of no further force and effect.
3. Choice of Law. This Pledge Agreement shall be governed by
the laws of the State of New York.
<PAGE>
<PAGE>
IN WITNESS WHEREOF the undersigned has caused this Pledge
Agreement to be executed on the date first above written.
CHAPARRAL RESOURCES, INC.
By:
---------------------------
Name:
Title:
State of )
) ss.:
County of )
On this day of March, 1999 before me personally came ,
to me known, and known to me to be the individual described in, and who
executed the foregoing instrument, and he acknowledged to me that he
executed the same.
--------------------------------
Notary Public
135661
