EXHIBIT 10.3

                               SECURITY AGREEMENT

         SECURITY AGREEMENT, dated as of October 12, 2004, between Quest Energy,
Ltd., a Kentucky corporation ("Quest"), and Professional Traders Funds, LLC, a
New York limited liability company, and its endorsees, transferees, and assigns
(the "Secured Party").

                               W I T N E S S E T H
                               - - - - - - - - - -

         WHEREAS, pursuant to the Security Convertible Promissory Note dated the
date hereof and due April 12, 2005 between Quest Minerals & Mining Corp., a Utah
corporation and indirect parent corporation of Quest ("QMMG"), and the Secured
Party (the "Note"), the Secured Party has agreed to loan to QMMG U.S.
$250,000.00 (the "Loan"). The principal amount outstanding and interest payable
under the Note is convertible into shares of QMMG's common stock, $0.001 par
value (the "Common Stock"). In connection with the transactions contemplated by
the Loan, QMMG is issuing to the Secured Party a Common Stock purchase warrant
of even date herewith to purchase 250,000 shares of Common Stock (the
"Warrant"); and

         WHEREAS, in order to induce the Secured Party to make the Loan to QMMG,
Quest has agreed to execute and deliver to the Secured Party this Agreement for
the benefit of the Secured Party and to grant to it a first priority security
interest in certain property of Quest to secure the prompt payment, performance
and discharge in full of QMMG's obligations under the Transaction Documents (as
defined below).

         NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

         1.       Certain Definitions. As used in this Agreement, the following
terms shall have the meanings set forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the UCC
(such as "general intangibles" and "proceeds") shall have the respective
meanings given such terms in Article 9 of the UCC.

                  (a)      "Collateral" means the collateral in which the
Secured Party is granted a security interest by this Agreement and which shall
include the following, whether presently owned or existing or hereafter acquired
or coming into existence, and all additions and accessions thereto and all
substitutions and replacements thereof, and all proceeds, products and accounts
thereof, including, without limitation, all proceeds from the sale or transfer
of the Collateral and of insurance covering the same and of any tort claims in
connection therewith:

                           (i)      The equipment of the Company set forth on
Schedule A hereto, together with all documents of title and documents
representing the same, all additions and accessions thereto, replacements
therefor, all parts therefor, and all substitutes for any of the foregoing
(collectively, the "Equipment"); and

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                           (ii)     All of the Company's documents, instruments
and chattel paper, files, records, books of account, business papers, computer
programs and the products and proceeds of all of the foregoing Collateral set
forth in clause (i) above.

                  (b)      "Company" shall mean, collectively, Quest and all of
its subsidiaries.

                  (c)      "Obligations" means all of the Company's obligations
under this Agreement, the Note and the Warrant, in each case, whether now or
hereafter existing, voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with others,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from the Secured Party as a
preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time.

                  (d)      "Transaction Documents" means the Note, the Warrant,
and this Agreement.

                  (e)      "UCC" means the Uniform Commercial Code, as currently
in effect in the State of New York.

         2.       Grant of Security Interest. As an inducement for the Secured
Party to make the Loan to QMMG and to secure the complete and timely payment,
performance and discharge in full, as the case may be, of all of the
Obligations, the Company hereby, unconditionally and irrevocably, pledges,
grants and hypothecates to the Secured Party, a continuing security interest in,
a first lien upon and a right of set-off against all of the Company's right,
title and interest of whatsoever kind and nature in and to the Collateral (the
"Security Interest").

         3.       Representations Warranties Covenants and Agreements of the
Company. The Company represents and warrants to, and covenants and agrees with,
the Secured Party as follows:

                  (a)      The Company has the requisite corporate power and
authority to enter into this Agreement and otherwise to carry out its
obligations thereunder. The execution, delivery and performance by the Company
of this Agreement and the filings contemplated therein have been duly authorized
by all necessary action on the part of the Company and no further action is
required by the Company.

                  (b)      The Company represents and warrants that it has no
place of business or offices where its respective books of account and records
are kept (other than temporarily at the offices of its attorneys or accountants)
or places where Collateral is stored or located, except as set forth on Schedule
A attached hereto;

                  (c)      The Company is the sole owner of the Collateral
(except for non-exclusive licenses granted by the Company in the ordinary course
of business), free and clear of any liens, security interests, encumbrances,
rights or claims, except as set forth on Schedule A, and is fully authorized to
grant the Security Interest in and to pledge the Collateral. There is not on
file in any governmental or regulatory authority, agency or recording office an
effective financing statement, security agreement, license or transfer or any

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notice of any of the foregoing (other than those that have been filed in favor
of the Secured Party pursuant to this Agreement) covering or affecting any of
the Collateral, except as set forth on Schedule A. So long as this Agreement
shall be in effect, the Company shall not execute and shall not knowingly permit
to be on file in any such office or agency any such financing statement or other
document or instrument (except to the extent filed or recorded in favor of the
Secured Party pursuant to the terms of this Agreement or as set forth on
Schedule A).

                  (d)      No part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any Collateral or the
Company's use of any Collateral violates the rights of any third party. There
has been no adverse decision to the Company's claim of ownership rights in or
exclusive rights to use the Collateral in any jurisdiction or to the Company's
right to keep and maintain such Collateral in full force and effect, and there
is no proceeding involving said rights pending or, to the best knowledge of the
Company, threatened before any court, judicial body, administrative or
regulatory agency, arbitrator or other governmental authority.

                  (e)      The Company shall at all times maintain its books of
account and records relating to the Collateral at its principal place of
business and its Collateral at the locations set forth on Schedule A attached
hereto and may not relocate such books of account and records or tangible
Collateral unless it delivers to the Secured Party at least 30 days prior to
such relocation (i) written notice of such relocation and the new location
thereof (which must be within the United States) and (ii) evidence that
appropriate financing statements and other necessary documents have been filed
and recorded and other steps have been taken to perfect the Security Interest to
create in favor of the Secured Party valid, perfected and continuing first
priority liens in the Collateral.

                  (f)      This Agreement creates in favor of the Secured Party
a valid security interest in the Collateral securing the payment and performance
of the Obligations and, upon making the filings described in the immediately
following sentence, a perfected first priority security interest in such
Collateral, except as set forth on Schedule A. Except for the filing of
financing statements on Form UCC-1 under the UCC with the jurisdictions
indicated on Schedule B, attached hereto, no authorization or approval of or
filing with or notice to any governmental authority or regulatory body is
required either (i) for the grant by the Company of, or the effectiveness of,
the Security Interest granted hereby or for the execution, delivery and
performance of this Agreement by the Company or (ii) for the perfection of or
exercise by the Secured Party of its rights and remedies hereunder.

                  (g)      On the date of execution of this Agreement, the
Company will deliver to the Secured Party one or more executed UCC financing
statements on Form UCC-1 under the UCC with respect to the Security Interest for
filing with the jurisdictions indicated on Schedule B, attached hereto and in
such other jurisdictions as may be requested by the Secured Party.

                  (h)      The execution, delivery and performance of this
Agreement does not conflict with or cause a breach or default, or an event that
with or without the passage of time or notice, shall constitute a breach or
default, under any agreement to which the Company is a party or by which the
Company is bound. No consent (including, without limitation, from stockholders

<PAGE>

or creditors of the Company) is required for the Company to enter into and
perform its obligations hereunder.

                  (i)      The Company shall at all times maintain the liens and
Security Interest provided for hereunder as valid and perfected first priority
liens and security interests in the Collateral in favor of the Secured Party,
except as set forth on Schedule A, until this Agreement and the Security
Interest hereunder shall be terminated pursuant to Section 11 hereof. The
Company hereby agrees to defend the same against any and all persons. The
Company shall safeguard and protect all Collateral for the account of the
Secured Party. At the request of the Secured Party, the Company will sign and
deliver to the Secured Party at any time or from time to time one or more
financing statements pursuant to the UCC (or any other applicable statute) in
form reasonably satisfactory to the Secured Party and will pay the cost of
filing the same in all public offices wherever filing is, or is deemed by the
Secured Party to be, necessary or desirable to effect the rights and obligations
provided for herein. Without limiting the generality of the foregoing, the
Company shall pay all fees, taxes and other amounts necessary to maintain the
Collateral and the Security Interest hereunder, and the Company shall obtain and
furnish to the Secured Party from time to time, upon demand, such releases
and/or subordinations of claims and liens which may be required to maintain the
priority of the Security Interest hereunder.

                  (j)      The Company will not transfer, pledge, hypothecate,
encumber, license (except for non-exclusive licenses granted by the Company in
the ordinary course of business), sell or otherwise dispose of any of the
Collateral without the prior written consent of the Secured Party.

                  (k)      The Company shall keep and preserve the Collateral in
good condition, repair and order and shall not operate or locate any such
Collateral (or cause to be operated or located) in any area excluded from
insurance coverage.

                  (l)      The Company shall, within thirty (30) days of
obtaining knowledge thereof, advise the Secured Party promptly, in sufficient
detail, of any substantial change in the Collateral, and of the occurrence of
any event that would have a material adverse effect on the value of the
Collateral or on the Secured Party's security interest therein.

                  (m)      The Company shall promptly execute and deliver to the
Secured Party such further deeds, mortgages, assignments, security agreements,
financing statements or other instruments, documents, certificates and
assurances and take such further action as the Secured Party may from time to
time request and may in its sole discretion deem necessary to perfect, protect
or enforce its security interest in the Collateral in which the Secured Party
has been granted a security interest hereunder, substantially in a form
acceptable to the Secured Party, which, other than as stated therein, shall be
subject to all of the terms and conditions hereof.

                  (n)      The Company shall permit the Secured Party and its
representatives and agents to inspect the Collateral at any time, and to make
copies of records pertaining to the Collateral as may be requested by the
Secured Party from time to time.

<PAGE>

                  (o)      The Company will take all steps reasonably necessary
to diligently pursue and seek to preserve, enforce and collect any rights,
claims, causes of action and accounts receivable in respect of the Collateral.

                  (p)      The Company shall promptly notify the Secured Party
in sufficient detail upon becoming aware of any attachment, garnishment,
execution or other legal process levied against any Collateral and of any other
information received by the Company that may materially affect the value of the
Collateral, the Security Interest or the rights and remedies of the Secured
Party hereunder.

                  (q)      All information heretofore, herein or hereafter
supplied to the Secured Party by or on behalf of the Company with respect to the
Collateral is accurate and complete in all material respects as of the date
furnished.

         4.       Defaults. The following events shall be "Events of Default":

                  (a)      The occurrence of a Triggering Event (as defined in
the Note) under the Note;

                  (b)      Any representation or warranty of the Company in this
Agreement or in any other Transaction Document shall prove to have been
incorrect in any material respect when made; and

                  (c)      The failure by the Company to observe or perform any
of its obligations hereunder or in any other Transaction Document, for thirty
(30) days after receipt by the Company of notice of such failure from the
Secured Party.

         5.       Duty To Hold In Trust. Upon the occurrence of any Event of
Default and at any time thereafter, the Company shall, upon receipt by it of any
revenue, income or other sums subject to the Security Interest, whether payable
pursuant to the Note or otherwise, or of any check, draft, note, trade
acceptance or other instrument evidencing an obligation to pay any such sum,
hold the same in trust for the Secured Party and shall forthwith endorse and
transfer any such sums or instruments, or both, to the Secured Party for
application to the satisfaction of the Obligations.

         6.       Rights and Remedies Upon Default. Upon the occurrence of any
Event of Default and at any time thereafter, the Secured Party shall have the
right to exercise all of the remedies conferred hereunder and under the Note and
the Warrant, and the Secured Party shall have all the rights and remedies of a
secured party under the UCC and/or any other applicable law (including the
Uniform Commercial Code of any jurisdiction in which any Collateral is then
located). Without limitation, the Secured Party shall have the following rights
and powers:

                  (a)      The Secured Party shall have the right to take
possession of the Collateral and, for that purpose, enter, with the aid and
assistance of any person, any premises where the Collateral, or any part
thereof, is or may be placed and remove the same, and the Company shall assemble
the Collateral and make it available to the Secured Party at places which the
Secured Party shall reasonably select, whether at the Company's premises or
elsewhere, and make available to the Secured Party, without rent, all of the
<PAGE>

Company's respective premises and facilities for the purpose of the Secured
Party taking possession of, removing or putting the Collateral in saleable or
disposable form.

                  (b)      The Secured Party shall have the right to operate the
business of the Company using the Collateral and shall have the right to assign,
sell, lease or otherwise dispose of and deliver all or any part of the
Collateral, at public or private sale or otherwise, either with or without
special conditions or stipulations, for cash or on credit or for future
delivery, in such parcel or parcels and at such time or times and at such place
or places, and upon such terms and conditions as the Secured Party may deem
commercially reasonable, all without (except as shall be required by applicable
statute and cannot be waived) advertisement or demand upon, or notice to the
Company or right of redemption of the Company, which are hereby expressly
waived. Upon each such sale, lease, assignment or other transfer of Collateral,
the Secured Party may, unless prohibited by applicable law which cannot be
waived, purchase all or any part of the Collateral being sold, free from and
discharged of all trusts, claims, right of redemption and equities of the
Company, which are hereby waived and released.

         7.       Applications of Proceeds. The proceeds of any such sale, lease
or other disposition of the Collateral hereunder shall be applied first, to the
expenses of retaking, holding, storing, processing and preparing for sale,
selling, and the like (including, without limitation, any taxes, fees and other
costs incurred in connection therewith) of the Collateral, to the reasonable
attorneys' fees and expenses incurred by the Secured Party in enforcing its
rights hereunder and in connection with collecting, storing and disposing of the
Collateral, and then to satisfaction of the Obligations, and to the payment of
any other amounts required by applicable law, after which the Secured Party
shall pay to the Company any surplus proceeds. If, upon the sale, license or
other disposition of the Collateral, the proceeds thereof are insufficient to
pay all amounts to which the Secured Party is legally entitled, the Company will
be liable for the deficiency, together with interest thereon, at the rate of 8%
per annum or such lesser amount permitted by applicable law (the "Default
Rate"), and the reasonable fees of any attorneys employed by the Secured Party
to collect such deficiency.

         8.       Costs and Expenses. The Company agrees to pay all
out-of-pocket fees, costs and expenses incurred in connection with any filing
required hereunder, including without limitation, any financing statements,
continuation statements, partial releases and/or termination statements related
thereto or any expenses of any searches reasonably required by the Secured
Party. The Company shall also pay all other claims and charges that in the
reasonable opinion of the Secured Party might prejudice, imperil or otherwise
affect the Collateral or the Security Interest therein. The Company will also,
upon demand, pay to the Secured Party the amount of any and all reasonable
expenses, including the reasonable fees and expenses of its counsel and of any
experts' and agents, which the Secured Party may incur in connection with (i)
the enforcement of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Collateral, or
(iii) the exercise or enforcement of any of the rights of the Secured Party
under the Note. Until so paid, any fees payable hereunder shall be added to the
principal amount of the Note and shall bear interest at the Default Rate.

         9.       Responsibility for Collateral. The Company assumes all
liabilities and responsibility in connection with all Collateral, and the
obligations of the Company hereunder or under the Note and the Warrant shall in
<PAGE>

no way be affected or diminished by reason of the loss, destruction, damage or
theft of any of the Collateral or its unavailability for any reason.

         10.      Security Interest Absolute. All rights of the Secured Party
and all Obligations of the Company hereunder, shall be absolute and
unconditional, irrespective of: (a) any lack of validity or enforceability of
this Agreement, the Note, the Warrant or any agreement entered into in
connection with the foregoing, or any portion hereof or thereof; (b) any change
in the time, mariner or place of payment or performance of, or in any other term
of, all or any of the Obligations, or any other amendment or waiver of or any
consent to any departure from the Note, the Warrant or any other agreement
entered into in connection with the foregoing; (c) any exchange, release or
nonperfection of any of the Collateral, or any release or amendment or waiver of
or consent to departure from any other collateral for, or any guaranty, or any
other security, for all or any of the Obligations; (d) any action by the Secured
Party to obtain, adjust, settle and cancel in its sole discretion any insurance
claims or matters made or arising in connection with the Collateral; or (e) any
other circumstance which might otherwise constitute any legal or equitable
defense available to the Company, or a discharge o fall or any part of the
Security Interest granted hereby. Until the Obligations shall have been paid and
performed in full, the rights of the Secured Party shall continue even if the
Obligations are barred for any reason, including, without limitation, the
running of the statute of limitations or bankruptcy. The Company expressly
waives presentment, protest, notice of protest, demand, notice of nonpayment and
demand for performance.

         11.      Term of Agreement. This Agreement and the Security Interest
shall terminate on the date on which all payments under the Note have been made
in full and all other Obligations have been paid or discharged. Upon such
termination, the Secured Party, at the request and at the expense of the
Company, will join in executing any termination statement with respect to any
financing statement executed and filed pursuant to this Agreement.

         12.      Power of Attorney; Further Assurances.

                  (a)      The Company authorizes the Secured Party, and does
hereby make, constitute and appoint it, and its respective officers, agents,
successors or assigns with full power of substitution, as the Company's true and
lawful attorney-in-fact, with power, in its own name or in the name of the
Company, to, after the occurrence and during the continuance of an Event of
Default, (i) endorse any notes, checks, drafts, money orders, or other
instruments of payment (including payments payable under or in respect of any
policy of insurance) in respect of the Collateral that may come into possession
of the Secured Party; (ii) to sign and endorse any UCC financing statement or
any invoice, freight or express bill, bill of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications and notices in
connection with accounts, and other documents relating to the Collateral; (iii)
to pay or discharge taxes, liens, security interests or other encumbrances at
any time levied or placed on or threatened against the Collateral; (iv) to
demand, collect, receipt for, compromise, settle and sue for monies due in
respect of the Collateral; and (v) generally, to do, at the option of the
Secured Party, and at the Company's expense, at any time, or from time to time,
all acts and things which the Secured Party deems necessary to protect, preserve
and realize upon the Collateral and the Security Interest granted therein in
order to effect the intent of this Agreement, the Note and the Warrant all as
fully and effectually as the Company might or could do; and the Company hereby
<PAGE>

ratifies all that said attorney shall lawfully do or cause to be done by virtue
hereof. This power of attorney is coupled with an interest and shall be
irrevocable for the term of this Agreement and thereafter as long as any of the
Obligations shall be outstanding.

                  (b)      On a continuing basis, the Company will make,
execute, acknowledge, deliver, file and record, as the case may be, in the
proper filing and recording places in any jurisdiction, including, without
limitation, the jurisdictions indicated on Schedule B, attached hereto, all such
instruments, and take all such action as may reasonably be deemed necessary or
advisable, or as reasonably requested by the Secured Party, to perfect the
Security Interest granted hereunder and otherwise to carry out the intent and
purposes of this Agreement, or for assuring and confirming to the Secured Party
the grant or perfection of a security interest in all the Collateral.

                 (c)       The Company hereby irrevocably appoints the Secured
Party as the Company's attorney-in-fact, with full authority in the place and
stead of the Company and in the name of the Company, from time to time in the
Secured Party's discretion, to take any action and to execute any instrument
which the Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including the filing, in its sole discretion, of one
or more financing or continuation statements and amendments thereto, relative to
any of the Collateral without the signature of the Company where permitted by
law.

         13.      Notices. All notices, requests, demands and other
communications hereunder shall be in writing, with copies to all the other
parties hereto, and shall be deemed to have been duly given when (i) if
delivered by hand, upon receipt, (ii) if sent by facsimile, upon receipt of
proof of sending thereof, (iii) if sent by nationally recognized overnight
delivery service (receipt requested), the next business day or (iv) if mailed by
first-class registered or certified mail, return receipt requested, postage
prepaid, four days after posting in the U.S. mails, in each case if delivered to
the following addresses:

         If to the Company:         Quest Energy, Ltd.
                                    470 Burning Fork
                                    Pikeville, KY 41502

         If to Secured Party:       Professional Trader Funds, LLC
                                    1400 Old Country Road, Suite 206
                                    Westbury, NY  11590

         14.      Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Party shall have the right, in its sole discretion, to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured Party's rights and
remedies hereunder.
<PAGE>

         15.      Miscellaneous.

                  (a)      No course of dealing between the Company and the
Secured Party, nor any failure to exercise, nor any delay in exercising, on the
part of the Secured Party, any right, power or privilege hereunder or under the
Note shall operate as a waiver thereof; nor shall any single or partial exercise
of any right, power or privilege hereunder or thereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.

                  (b)      All of the rights and remedies of the Secured Party
with respect to the Collateral, whether established hereby or by the Note or by
any other agreements, instruments or documents or by law shall be cumulative and
may be exercised singly or concurrently.

                  (c)      This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof and is intended to
supersede all prior negotiations, understandings and agreements with respect
thereto. Except as specifically set forth in this Agreement, no provision of
this Agreement may be modified or amended except by a written agreement
specifically referring to this Agreement and signed by the parties hereto.

                  (d)      In the event that any provision of this Agreement is
held to be invalid, prohibited or unenforceable in any jurisdiction for any
reason, unless such provision is narrowed by judicial construction, this
Agreement shall, as to such jurisdiction, be construed as if such invalid,
prohibited or unenforceable provision had been more narrowly drawn so as not to
be invalid, prohibited or unenforceable. If, notwithstanding the foregoing, any
provision of this Agreement is held to be invalid, prohibited or unenforceable
in any jurisdiction, such provision, as to such jurisdiction, shall be
ineffective to the extent of such invalidity, prohibition or unenforceability
without invalidating the remaining portion of such provision or the other
provisions of this Agreement and without affecting the validity or
enforceability of such provision or the other provisions of this Agreement in
any other jurisdiction.

                  (e)      No waiver of any breach or default or any right under
this Agreement shall be considered valid unless in writing and signed by the
party giving such waiver, and no such waiver shall be deemed a waiver of any
subsequent breach or default or right, whether of the same or similar nature or
otherwise.

                  (f)      This Agreement shall be binding upon and inure to the
benefit of each party hereto and its successors and assigns.

                  (g)      Each party shall take such further action and execute
and deliver such further documents as may be necessary or appropriate in order
to carry out the provisions and purposes of this Agreement.

                  (h)      This Agreement shall be construed in accordance with
the laws of the State of New York, except to the extent the validity, perfection
or enforcement of a security interest hereunder in respect of any particular
Collateral that are governed by a jurisdiction other than the State of New York
in which case such law shall govern. Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of any New York State or United States
Federal court sitting in the county of New York over any action or proceeding
arising out of or relating to this Agreement, and the parties hereto hereby
irrevocably agree that all claims in respect of such action or proceeding may be
<PAGE>

heard and determined in such New York State or Federal court. The parties hereto
agree that a final judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other inner provided by law. The parties hereto further waive any objection to
venue in the State of New York and any objection to an action or proceeding in
the State of New York on the basis of forum non convenient.

                  (i)      EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO
THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT FOR EACH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY
HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH
PARTY WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS.
EACH PARTY FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH
ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS
RIGHTS TO A JIYRY TRIAL FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE,
MEANING THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT. IN THE EVENT OF A LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

                  (j)      This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

                                  ************

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed on the day and year first above written.



                                          QUEST ENERGY, LTD.


                                          By: /s/ EUGENE CHIARAMONTE, JR.
                                              ----------------------------------
                                          Name:  Eugene Chiaramonte, Jr.
                                          Title: Vice President

                                          PROFESSIONAL TRADERS FUNDS, LLC


                                          By: /s/ HOWARD BERGER
                                              ----------------------------------
                                          Name:  Howard Berger
                                          Title: Manager