PROMISSORY NOTE

$75,000.00                                                          May 27, 1998

     FOR VALUE  RECEIVED,,  Chaparral  Resources,  Inc.,  a Colorado  ("Maker"),
promises to pay to Howard Karren ("Payee"), in lawful money of the United States
of America,  the  principal  sum of  Seventy-Five  Thousand  Dollars  ($75,000),
together with interest in arrears on the unpaid  principal  balance at an annual
rate equal to seven percent (7%) 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.

     The  principal  amount of this Note  together  with any  accrued and unpaid
interest  thereon shall be due and payable on demand,  but in no event more than
one hundred and eighty  (180) days from the date hereof.  All payments  shall be
made in lawful money of hte 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.  Any
partial  prepayments  shall be applied to  installments  of principal in inverse
order of their maturity.

     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 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.

     (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 60 days.

     Maker  shall  notify  Payee in  writing  within  three  (3) days  after the
     occurrence of any Event of Default of which Maker acquires knowledge.

<PAGE>


     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 Payee's  exercise of any or all of its rights and remedies under
this Note, 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 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.

     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 Texas without regard
to conflicts of laws principles.  Maker irrevocably consents to the jurisdiction
of the courts in the State of Texas, Harris County, and to the Federal Court for
such  county 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.  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.

     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.

                                       2

<PAGE>


     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:    /s/ Michael B. Young, Treasurer
---------------------------------------
Title: Treasurer
---------------------------------------



                                       3

<PAGE>





                                 PROMISSORY NOTE

$20,000.00                                                          July 1, 1998

     FOR VALUE  RECEIVED,,  Chaparral  Resources,  Inc.,  a Colorado  ("Maker"),
promises to pay to Howard Karren ("Payee"), in lawful money of the United States
of America,  the principal sum of Twenty Thousand  Dollars  ($20,000),  together
with interest in arrears on the unpaid principal balance at an annual rate equal
to seven percent (7%) 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.

     The  principal  amount of this Note  together  with any  accrued and unpaid
interest  thereon shall be due and payable on demand,  but in no event more than
one hundred and eighty  (180) days from the date hereof.  All payments  shall be
made in lawful money of hte 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.  Any
partial  prepayments  shall be applied to  installments  of principal in inverse
order of their maturity.

     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 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.

     (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 60 days.


     Maker  shall  notify  Payee in  writing  within  three  (3) days  after the
     occurrence of any Event of Default of which Maker acquires knowledge.

<PAGE>


     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 Payee's  exercise of any or all of its rights and remedies under
this Note, 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 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.

     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 Texas without regard
to conflicts of laws principles.  Maker irrevocably consents to the jurisdiction
of the courts in the State of Texas, Harris County, and to the Federal Court for
such  county 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.  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.

     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.

                                       2

<PAGE>


     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:    /s/ Michael B. Young, Treasurer
--------------------------------------
Title: Treasurer
--------------------------------------




                                       3