Document:

Exhibit 10.11 (Form of Deed of Trust)

                                                                                                                                Exhibit
      10.11

     

    
 

    DEED
      OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT,

    AND
      ASSIGNMENT OF RENTS AND LEASES

    

    NOTICE
      OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE
      ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR
      RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S
      LICENSE NUMBER.

    

    1.
      PARTIES AND PROPERTY CONVEYED

    

    1.1    Quest
      Oil
      Corporation, a Nevada corporation (“Quest”),
      and
      its wholly owned subsidiary, and Wallstin Petroleum, LLC, a Texas limited
      liability company (“Wallstin”),
      hereafter called Grantors (whether one or more), for the purpose of securing
      the
      indebtedness described on Exhibit “A” attached hereto, have granted, sold and
      conveyed to _________________, Trustee, whose address is
      ______________________________, and to his or her substitutes or successors,
      for
      and on behalf of the persons and entities described in Exhibit “A” attached
      hereto (hereafter collectively referred to as "Beneficiary"), all of the
      property described in Exhibit "B" attached to this agreement, and situated
      in
      Eastland and McCullough Counties, Texas (hereafter designated as the
      "Property").

    

    1.2    Grantors
      hereby also convey to the Trustee named above the following described Property
      and a security interest in that Property as follows:

    

    (a)
      The
      Property, described in Exhibit "B," together with any and all improvements,
      fixtures, equipment, property, and proceeds from the use or sale of these items
      on the Property or hereafter placed on that property, including, but not limited
      to all engines, motors, pumps, pump-jacks, tanks, heating equipment, pipelines,
      flow lines, separators, gauges, meters, machinery and other personal property
      used or furnished in connection with the operation, use and enjoyment of such
      real Property and the improvements on it, and all renewals, replacements,
      substitutions, and additions thereto, all of which property and fixtures shall
      be deemed to be a part of and affixed to the Property; and

    

    (b)
      All
      rents, royalties and proceeds from the Property, including all profits and
      income from the oil, gas, and other hydrocarbons produced from the Property,
      and/or received from the improvements described above; and

    

    (c)
      All
      rights and privileges incident or pertaining to the Property.

    

    1.3    The
      expression “Grantors’ successors" as used in this agreement shall mean each,
      every and all of the Grantors’ heirs, executors, administrators, personal
      representatives, successors and assigns.

    

    

    2.
      PURPOSE

    

    2.1    In
      order
      to permit the Trustee and his or her assigns or successors to hold the Property
      together with all of the rights and privileges that go with the Property,
      Grantors bind themselves, their heirs, executors, administrators, and assigns
      to
      warrant and forever defend the Property unto the Trustee, his or her substitutes
      or successors and assigns forever, against the claim, or claims, of all persons
      who claim the Property or any part of it.

    

    2.2    In
      addition to the Lien created above, Grantors grant to the Beneficiary, and
      all
      successors and assigns, a security interest in:

    

    (a)
      each
      and every part of the Property, including, but not limited to, fixtures or
      personal property; and

    

    (b)
      all
      rents, revenues, royalties and other proceeds from the Property, including,
      but
      not limited to, the use, rent, sale, lease or other disposition of the Property;
      and

    

    (c)
      any
      and all sums, proceeds, funds and reserves described or referred to in this
      agreement, providing that this grant of a security interest in proceeds shall
      not be deemed to authorize any action otherwise prohibited by this
      agreement.

    

    

    3.
      DEBT SECURED

    

    3.1    This
      conveyance and Deed of Trust are made in Trust to secure payment of the
      indebtedness (hereinafter the “Debt”) executed by Grantors and payable to the
      persons and entities described in Exhibit “A” attached hereto,
      plus:

    

    (a)
      any
      and all renewals or extensions of the Exhibit “A” indebtedness or any part
      thereof;

    

    (b)
      all
      loans and advances that Beneficiary may hereafter make to the Grantors, and
      any
      and all renewals or extensions of these amounts; and

    

    (c)
      all
      other debts, obligations, and liabilities owed by Grantors to Beneficiary,
      regardless of whether such debts, obligations and liabilities are direct or
      indirect, primary or secondary, joint, several, joint and several, fixed, or
      contingent, and regardless of whether such present or future debt, obligations
      and liabilities may, prior to their acquisition by Beneficiary, be or have
      been
      payable to, or be or have been in favor of, some other person, or have been
      acquired by Beneficiary in a transaction with one other than Grantors, together
      with any and all renewals and extensions of such debts, obligations, and
      liabilities, or any part thereof. 

     

    (d)
      The
      words "Secured Indebtedness", “Debt” or “indebtedness” shall mean all of the
      indebtedness, obligations and liabilities described or referred to in this
      instrument. The word "Holder" shall also mean the holder of the Secured
      Indebtedness, Debt or indebtedness.

    

    3.2    The
      Debt
      secured in this Agreement is payable as set forth in the individual instruments
      which together constitute the Debt.

    

    3.3    This
      conveyance is also made in trust to secure and enforce the payment of all other
      indebtedness of Grantors to Beneficiary presently existing or which may in
      any
      manner or means hereafter be incurred by Grantors.

    

    3.4 It
      is also
      expressly agreed and understood that any and all sums now owed to or advanced
      in
      the future by the Beneficiary to Grantors shall be payable as set forth in
      the
      instruments which together constitute the Debt, and shall bear interest as
      provided therein.

    

    3.5    Default
      under any Security Agreement signed by Grantors in favor of the Beneficiary
      shall be an event of default under this agreement, and the breach of any
      covenant under such Security Agreement shall give Beneficiary the right to
      accelerate the payment under each and all instruments constituting the Debt,
      and
      to invoke all of the rights under those instruments, Security Agreements, and
      accompanying Deeds of Trust, including this Deed of Trust.

    

    3.6    The
      Liens
      created by this agreement shall continue in full force and effect until
      expressly released by the Beneficiary, regardless of whether the debt secured
      hereby may from time to time be paid in part or in full.

    

    3.7    Should
      Grantors do and perform all of the covenants and agreements in this instrument
      contained, and make prompt payment of all indebtedness as it shall become due
      and payable, then subject to any "future advances" or "other indebtedness"
      clauses contained in this agreement, this conveyance shall become null and
      void
      and of no further force and effect, and may be released, at the expense of
      Grantors, by the Beneficiary, Secured Party, or Lender interchangeably (whether
      one or more).

    
      
         

      

      
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    4.
      ASSIGNMENT OF RENTS AND REVENUE

    

    4.1    As
      further security for the payment of the above-described indebtedness, Grantors
      hereby transfer, assign, and convey unto Beneficiary all rents, royalties,
      and
      revenues that may issue from the Property and from the oil, gas and other
      hydrocarbons that may be produced therefrom in accordance with the following
      terms and provisions. 

    

    (a)
      In
      the event of any default in respect of the Debt, Beneficiary, its agent or
      representative, is hereby authorized, at its option, to collect rents, revenues,
      royalties and other proceeds, and apply them, less the reasonable costs and
      expenses of collection, to the payment of the indebtedness, whether then matured
      or to mature in the future, and in such manner as Beneficiary may elect.

    

    (b)
      The
      collection of rents, royalties and revenues by Beneficiary shall not constitute
      a waiver of his or her right to accelerate the maturity of the indebtedness,
      nor
      of his or her right to proceed with the enforcement of this Deed of
      Trust.

    

    4.2    The
      transfer of rents, royalties, revenues, profits and income from the Property
      is
      specific in nature and irrevocable. 

    

    (a)
      So
      long as no default exists in the punctual payment of the indebtedness or in
      the
      keeping and performance of Grantors' covenants and obligations as stated in
      this
      document, Grantors may collect and retain the currently accruing rents,
      royalties, revenues, profits and income from the Property. 

    

    (b)
      In
      the event, however, any of the indebtedness is not paid at its maturity,
      regardless of how such maturity may be brought about, or if default is made
      in
      the keeping or performance of any of Grantor's covenants and obligations, then
      at such time or at any time thereafter, while such or any subsequent default
      continues, any Holder of the Debt may, personally or through an agent selected
      by the Holder, take, or have the Trustee take, possession and control of the
      Property, and receive and collect all rents, royalties, revenues, profits and
      income accrued or accruing, as long as any of the indebtedness remains unpaid
      or
      until foreclosure of the Lien. 

    

    (c)
      Any
      amount collected prior to the sale of the Property shall be applied first to
      the
      expenses incident to such possession, control and collection, and second to
      the
      payment of the indebtedness.

    

    (d)
      The
      Holder of the indebtedness, its agent, or the Trustee may use against Grantors
      or any other persons, such lawful or peaceable means as they may see fit to
      enforce the collection of any such rents, royalties, revenues, profits and
      income, and to secure possession of the Property, and may settle or compromise
      on any terms the Holder or the Trustee sees fit. 

    

    (e)
      The
      Holder or the Trustee may institute and prosecute to final conclusion actions
      of
      forcible entry and detainer, or actions of trespass to try title, or actions
      for
      damages, or any other appropriate actions in the name of the Holder or in the
      name of Grantors or the Trustee, and may settle, compromise, or abandon any
      such
      actions as the Holder or the Trustee may see fit. 

    

    (f)
      The
      Grantors bind themselves to take whatever lawful or peaceful steps the Holder
      or
      the Trustee may ask them to take for such purposes; provided, however, neither
      the Trustee nor the Holder of said indebtedness shall be required to collect
      any
      such rents, royalties, or income or be liable or chargeable for failure so
      to
      do.

    
5.
      CREATION OF SECURITY INTEREST

    

    5.1    It
      is
      understood and agreed that by this document Grantors, in addition to fixing
      and
      creating a Deed of Trust Lien upon and against the Property, have also created
      and granted to the Beneficiary, pursuant to the Uniform Commercial Code of
      Texas, a Security Interest in the Property.

    

    5.2     Without
      limiting any of the provisions of this document, the Grantors, as Debtors,
      and
      referred to in this paragraph as "Debtors" (whether one or more), expressly
      grant to the Holders of the Debt described in this agreement, as Secured Party
      (and in this paragraph called "Secured Party," whether one or more), a secured
      interest in all the Property to the full extent that such Property may be
      subject to the Uniform Commercial Code (specifically, Chapter 9, Business and
      Commerce Code of Texas, as amended) (hereinafter called the "Uniform Commercial
      Code"), and covenant and agree with the Secured Party that:

    

    (a)
      In
      addition to any other remedies granted in this document to the Secured Party
      or
      Trustee, the Secured Party may, in event of any default, proceed under the
      Uniform Commercial Code as to all or any part of the personal property (tangible
      or intangible) and fixtures included in or on the Property (such Property and
      fixtures being herein referred to as the "Collateral"), and shall have and
      may
      exercise with respect to the Collateral all the rights, remedies, and powers
      of
      a Secured Party under the Uniform Commercial Code, including, without
      limitation, the right and power to sell, at public or private sale or sales,
      or
      otherwise dispose of, lease, or utilize the Collateral, and any part or parts
      thereof, in any manner authorized or permitted under the Uniform Commercial
      Code
      after default by a debtor, and to apply the proceeds first towards payment
      of
      any costs, expenses, attorney's fees, and legal expenses thereby incurred by
      Secured Party, and second towards payment of the indebtedness described in
      this
      agreement.

    

    (b)
      Secured Party shall, in the event of default, have the right to take possession
      of the Collateral, and to enter upon the premises where it is located, without
      being deemed guilty of trespass and without liability for damages, and to take
      any action deemed necessary or appropriate or desirable by Secured Party, at
      its
      option and in its discretion, to repair, refurbish or otherwise prepare the
      Collateral for sale, lease, or other use or disposition as authorized in this
      agreement.

    

    (c)
      To
      the extent permitted by law, Debtors expressly waive any notice of sale or
      other
      disposition of the Collateral, and any other rights or remedies of a debtor,
      or
      formalities prescribed by law, relative to sale or disposition of the Collateral
      or exercise of any other right or remedy of Secured Party existing after
      default. To the extent any such notice is required and cannot be waived, Debtors
      agree that if such notice is mailed postage prepaid to the Debtors at the
      address shown opposite their signatures at least five days before the time
      of
      the sale of disposition, such notice shall be deemed reasonable and shall fully
      satisfy any notice requirement.

    

    (d)
      The
      Secured Party is also expressly granted the right, at its option, to transfer
      at
      any time to itself or to its nominee, the Collateral, or any part of it, or
      to
      receive the monies, income, proceeds or benefits attributable or accruing to
      it,
      and to hold the Collateral as security for the indebtedness or to apply it
      to
      the principal and interest or other amounts owing on any of the indebtedness,
      whether or not then due, in such order or manner as Secured Party may elect.
      All
      rights to marshaling of assets of Debtors, including any such right with respect
      to the Collateral are hereby waived.

    

    (e)
      No
      other proof than this document is necessary to establish the full legal
      propriety of the sale or other action, or of any fact, condition, or thing
      incident thereto, and all prerequisites of such sale or other action, and of
      the
      fact, condition, or thing incident thereto, shall be presumed conclusively
      to
      have been performed or to have occurred.

    

    (f)
      Secured Party may require Debtors to assemble the Collateral and make it
      available to Secured Party at a place to be designated by Secured Party that
      is
      reasonably convenient to both parties. All expenses of retaking, holding,
      preparing for sale, selling, leasing or otherwise using or disposing of the
      Collateral, that are incurred or paid by Secured Party as authorized or
      permitted under this agreement, including all attorney's fees, legal expenses,
      and costs, shall be added to the indebtedness secured by this document and
      the
      Debtors shall be liable for them.

    

    (g)
      This
      Deed of Trust and Security Agreement, upon being filed for record in the real
      estate records, shall operate also as a financing statement upon item of
      Collateral that are, or may become, fixtures.

    

    (h)
      Any
      copy of this document that is signed by Debtors may also serve as a Financing
      Statement under the Uniform Commercial Code between the Debtors, whose addresses
      are set forth opposite their respective signatures, and the Secured Party,
      whose
      address is set forth.

    

    (i)
      So
      long as any amount remains unpaid on any indebtedness described in this
      agreement, Debtors will not execute, and there will not be filed in any public
      office, any Financing statement or statements affecting the Collateral, other
      than Financing Statements in favor of Secured Party, unless the prior written
      specific consent and approval of Secured Party shall have first been
      obtained.

    

    (j)
      Secured Party is authorized to file a Financing Statement signed only by Secured
      Party covering the Collateral. At the request of Secured Party, Debtors agree
      to
      join Secured Party in executing one or more Financing Statements, pursuant
      to
      the Uniform Commercial Code, in a form satisfactory to Secured Party, and will
      pay the cost of filing and recording these documents as a Financing Statement
      in
      all public offices, at any time, and from time to time, whenever filing or
      recording of any Financing Statement or of this document is deemed by Secured
      Party to be necessary or desirable.

    

    

    
      
         

      

      
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    6.
      GRANTORS' COVENANTS

    

    Grantors
      covenant and agree as follows:

    

    6.1    Grantors
      are lawfully seized of the Property, and have the right to convey it; that
      the
      Property is free from all Liens and encumbrances, recorded or unrecorded, except
      as provided for by this agreement.

    

    6.2    Grantors
      will protect the title and possession of the Property and will pay, when due,
      all taxes and assessments now existing or hereafter levied or assessed on the
      Property, and will preserve and maintain the Lien created by this agreement
      as a
      first and prior Lien on the Property, including any improvements made to or
      on
      the Property.

    

    6.3    Grantors
      will keep the improvements on the Property in good repair and condition, and
      not
      permit or commit any waste on it.

    

    6.4    Grantors
      will insure and keep the Property, and all improvements now or hereafter created
      upon it, insured against loss or damage by fire and windstorm, and any other
      hazard or hazards, as may be reasonably required from time to time by
      Beneficiary during the term of the indebtedness secured by this agreement,
      and
      name the Trustee of this Deed of Trust as the policy beneficiary to the extent
      of the original amount of indebtedness secured, or to the extent of the full
      insurable value of the improvements, whichever is the lesser, in such form
      and
      with such insurance company or companies as may be approved by the Beneficiary,
      and deliver to the Beneficiary the policies of such insurance, having attached
      to the policies such mortgage indemnity clauses as Beneficiary shall direct,
      and
      deliver renewals of such policies to Beneficiary at least ten days before any
      such insurance policies shall expire. 

    

    (a)
      Any
      proceeds that Beneficiary may receive under any such policy, or policies, may
      be
      applied by Beneficiary, at its option, to reduce the indebtedness secured by
      this agreement, whether then matured or to mature in the future, and in such
      manner as Beneficiary may elect. 

    

    (b)
      Beneficiary may at its sole option permit Grantors to use the proceeds of any
      policy to repair or replace all improvements damaged or destroyed and covered
      by
      the policy.

    

    6.5    In
      the
      event Grantors fail to keep the improvements on the Property hereby conveyed
      in
      good repair and condition, or to pay promptly, when due, all taxes and
      assessments, or to preserve the prior Lien of this Deed of Trust on the
      Property, or to keep the building and improvements insured as required by this
      agreement, or to deliver the policy, or policies, of insurance, or their
      renewal, to Beneficiary, as required, then Beneficiary may, at its option,
      but
      without being required to do so, make such repairs, pay such taxes and
      assessments, remove any prior Liens, and prosecute or defend any suits in
      relation to the preservation of the prior Lien of this Deed of Trust on the
      Property, or insure and keep insured the improvements on the Property in an
      amount not to exceed that above-stipulated. 

    

    Any
      sums
      that may be so paid out by Beneficiary, and all sums paid for insurance
      premiums, including the costs, expenses and attorney's fees paid in any suit
      affecting the Property when necessary to protect the Lien, shall bear interest
      from the dates of such payments at the rate of 12% per annum, or such higher
      sum
      as may be deemed reasonable by a court of law, and shall be paid by Grantors
      to
      Beneficiary upon demand, at the same place at which the Note is payable, and
      shall be deemed a part of the debt secured by this agreement and recoverable
      as
      such in all respects.

    

    6.6    Grantors
      shall comply with all restrictive covenants and all laws, ordinances,
      regulations and rules, whether state, federal, or municipal, applicable to
      the
      Property and its ownership, use and occupancy. 

    

    (a)
      Grantors have obtained all approvals, licenses, and permits necessary for the
      ownership, use, and occupancy of the Property. 

    

    (b)
      The
      Property does not lie within any area designated by any governmental authority
      as having flood hazard or flood prone characteristics.

    

    6.7    Grantors
      shall not sell, transfer, mortgage, encumber, convey or otherwise alienate
      the
      Property or any part thereof, or any interest therein, by means of any
      instrument of conveyance, security or contract of any kind or character, without
      of the prior written consent of the Holder.

    

    6.8    Upon
      breach of any of the covenants contained in this agreement, the Holder may,
      at
      its option, accelerate the maturity of all monies owed by Maker to
      Beneficiary.

    

    6.9    If
      Grantors sell or transfer all or part of the Property without the Beneficiary's
      prior written consent, the Beneficiary may declare the entire indebtedness
      due
      and payable.

    

    6.10    The
      Beneficiary may return at any time all payments tendered by Grantors or its
      successors in interest without waiving any rights given to it by this
      document.

    

    6.11    The
      Beneficiary shall not be deemed to have waived its option to accelerate maturity
      of any or all sums secured by this Deed of Trust by accepting one or more
      payments from Grantor or its successor in interest. 

    

    6.12    Beneficiary
      may, at its option, require the payment of a processing fee for its services
      in
      processing a request for Beneficiary's consent to the transfer or assumption
      of
      the indebtedness secured by this Deed of Trust.

    

    6.13    In
      the
      event the Beneficiary approves a future conveyance or encumbrance of the
      Property, or any part thereof, and title becomes vested in a person or entity
      other than Grantors, the Beneficiary may, without notice to Grantors, deal
      with
      such successor or successors in interest, legal or equitable, with reference
      to
      this Deed of Trust and the indebtedness secured hereby in the same manner as
      with Grantors, without in any way vitiating or discharging Grantors' liability
      under this agreement or on the Property.

    

    6.14    No
      sale
      or mortgage of the Property, no forbearance on the part of the Beneficiary,
      and
      no extension of the time for the payment of indebtedness given by the
      Beneficiary shall operate to release, modify, change, or affect the original
      liability of Grantors, either in whole or in part.

    

    

    7.
      GRANTORS’ REPRESENTATIONS

    

    Grantors
      hereby further represent, agree, covenant and stipulate to the
      following:

    

    7.1    They
      have
      executed on the date of this agreement a Warrant or other loan and security
      documents governing and controlling the indebtedness secured by this agreement,
      the use of the proceeds of the loan, and the performance of Grantors in regard
      to the indebtedness.

    

    7.2    Each
      term, condition, right, and duty of such documents, if any, are incorporated
      into this agreement, and made a part of it as if expressly set forth in
      it.

    

    7.3    Violation
      of any such document shall constitute material default under this
      agreement.

    

    7.4    If
      any
      term or condition of any such document be determined illegal or unenforceable
      by
      a Court of competent jurisdiction, the balance of all remaining terms,
      conditions, rights, duties, and documents shall remain in full force and effect
      as if such illegal or unenforceable item had been omitted
      initially.

    

    7.5    The
      rights and remedies of Beneficiary, its successors or assigns, created under
      this agreement and under the other said loan documents, are cumulative of,
      and
      in addition to, and not in lieu of, each other. Beneficiary, its successors
      or
      assigns, may exercise any or all of such rights and remedies as it may elect.
      

    

    7.6    If
      any of
      the terms, covenants or conditions contained in any Security Agreement securing
      the indebtedness described by this agreement appear inconsistent, contradictory,
      or ambiguous, Grantors shall be bound by the decision of Beneficiary, its
      successors or assigns, as to whether such conflict does in fact exist;
      and

     

    (a)
      if
      so, which term, covenant, or condition shall control; and

    

    (b)
      no
      such inconsistency, ambiguity or contradiction, if the same shall be determined
      to exist by Beneficiary, its successors or assigns, shall render all or any
      part
      of any such document void, voidable, ineffective or in any way impair
      Beneficiary's rights and remedies thereunder.

    

    
      
         

      

      
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    8.
      DEFAULT AND REMEDIES

    

    8.1    In
      the
      event of default in the payment of any installment, principal, or interest
      of
      the Debt secured by this agreement, or any other indebtedness that may be
      cross-collateralized in the agreements that evidence the Debt or this Agreement,
      in accordance with the terms of such agreement or agreements, or of a breach
      of
      any of the covenants contained herein or in the agreements evidencing the Debt
      to be performed by Grantors, Beneficiary may elect to declare the entire
      principal indebtedness, with all interest accrued thereon and all other sums
      secured by this agreement, immediately due and payable, and Grantors hereby
      expressly waive presentment and demand for payment. 

    

    (a)
      In
      the event of default in the payment of the indebtedness when due or declared
      due, it shall be the duty of the Trustee, or his or successor or substitute,
      at
      the request of the Beneficiary (which request is hereby conclusively presumed),
      to enforce this Trust by selling the Property secured by this Deed of Trust.
      

    

    (b)
      Trustee shall advertise the time, place, and terms of the sale of the Property
      for at least 21 days preceding the date of sale by posting written or printed
      notice of the sale at the Courthouse door and filing the Notice in the County
      Clerk's office of the county where the Property is situated. 

    

    (c)
      The
      notice may be posted by the Trustee or by any person acting for him or her.
      

    

    (d)
      Beneficiary (the holder of the indebtedness secured hereby), or Trustee shall,
      at least 21 days preceding the date of sale, serve written or printed notice
      of
      the proposed sale by certified mail on each debtor obligated to pay the
      indebtedness secured by this Deed of Trust according to the records of
      Beneficiary.

    

    (e)
      Such
      notice shall be enclosed in a postpaid envelope, properly addressed to such
      debtor at debtor's most recent address as shown by the records of Beneficiary,
      in a post office or official depository under the care and custody of the United
      States Postal Service.

    

    8.2    The
      Trustee shall thereafter also send Grantors any other notice required by
      law.

    

    8.3    The
      Trustee shall sell the Property then subject to the Lien at public auction,
      in
      accordance with the laws of this state and in accordance with the terms of
      the
      notice which states the time period that the property shall be
      sold.

    

    (a)
      The
      property shall be sold at the Courthouse door of said county where such Property
      is situated, on the first Tuesday in any month between the hours of ten o'clock
      a.m. and four o'clock p.m., to the highest bidder for cash, cashier’s check or
      any other equivalent which is acceptable to the holder of the Note or the
      beneficiary, selling all of the Property as an entirety or in such parcels
      as
      the Trustee acting may elect, and make due conveyance to the Purchaser or
      Purchasers, binding Grantors, their heirs and assigns. 

    

    (b)
      If
      the Property is situated in more than one county, the notice shall be posted
      as
      provided at the Courthouse door of each of such counties where the Property
      is
      situated, and the Property may then be sold at the Courthouse door of any one
      of
      such counties, and the notices so posted shall designate the county where the
      Property will be sold. 

    

    (c)
      Out
      of the money arising from such sale, the Trustee shall first pay all the
      expenses of advertising the sale and making the conveyance, including a
      commission of five percent to himself or herself, which commission shall be
      due
      and owing in addition to the attorney's fees provided for in the Debt, and
      then
      pay to Beneficiary the full amount of principal, interest, attorney's fees
      and
      other charges due and unpaid on the Debt, and all other indebtedness secured
      hereby, giving the balance of the sales price, if any, to Grantors, their heirs
      or assigns. 

    

    (d)
      The
      recitals in the conveyance to the Purchase or Purchasers shall be full and
      conclusive evidence of the truth of the matters therein stated, and all
      prerequisites to the sale shall be presumed to have been performed, and such
      sale and conveyance shall be conclusive against Grantors, their heirs and
      assigns.

    

    8.4    The
      affidavit of any person having knowledge that service of notice of such proposed
      sale was completed shall be prima facie evidence of the fact of service. In
      this
      respect and to the full extent they may legally do so, Grantors also expressly
      covenant, stipulate and agree that:

    

    (a)
      The
      address of Grantors set out opposite their signature hereto shall conclusively
      be deemed and considered to be, and remain at all times, the most recent address
      of Grantors obligated to pay such indebtedness as shown by the records of the
      Holder of such indebtedness. 

    

    (b)
      Such
      address may be changed from time to time by express written notice of the change
      signed by all debtors obligated to pay such indebtedness and actually delivered
      to and received by the Holder of such indebtedness, setting forth a new address
      which shall conclusively be deemed and considered to be, and remain at all
      time
      thereafter, the most recent address of all debtors obligated to pay such
      indebtedness as shown by the records of the Holder of such indebtedness until
      such address is changed in the manner provided for.

    

    (c)
      The
      records of the Holder of such indebtedness will not be deemed to reflect any
      change in the name or identity of the debtors obligated to pay the indebtedness
      (to whom notice of a proposed sale shall be required to be mailed as provided
      for above) unless and until express written notice of such changes by all
      debtors obligated to pay such indebtedness is actually delivered to and received
      by the Holder of the indebtedness, and no notice of the sale or sales other
      than
      the notices provided for by this agreement shall be required to be given to
      Grantors or any other person, and any other notice is expressly
      waived.

    

    8.5    It
      is
      agreed that in the event a foreclosure under this agreement should be commenced
      by the Trustee, or his or her substitute or successor, Beneficiary may at any
      time before the sale of the Property direct the Trustee to abandon the sale,
      and
      may then institute suit for the collection of the Debt, and for the foreclosure
      of this Deed of Trust Lien. It is further agreed that if Beneficiary should
      institute such a suit it may, at any time before the entry of a final judgment
      in the suit, dismiss it and require the Trustee, or his or her substitute or
      successor, to sell the Property in accordance with the provisions of this Deed
      of Trust.

    

    8.6    Beneficiary
      shall have the right to purchase at any sale of the Property if he or she is
      the
      highest bidder, and to have the amount for which such property is sold credited
      on the debt then owing.

    

    8.7    Beneficiary
      is hereby authorized to appoint a substitute Trustee or a successor Trustee
      to
      act instead of the Trustee named in this agreement without other formality
      than
      the designation in writing of a substitute or successor trustee. The authority
      hereby conferred shall extend to the appointment of other successor and
      substitute Trustees successively until the indebtedness has been paid in full,
      or until the Property is sold. Each substitute and successor Trustee shall
      succeed to all of the rights and powers of the original Trustee.

    

    8.8    Grantors
      expressly waive and renounce the benefit of all present and future laws
      providing for any appraisement before sale of any of the Property covered by
      this Deed of Trust, commonly known as "appraisement laws," and all present
      and
      future laws extending in any manner the time for enforcement of collection
      of
      the indebtedness secured hereby, commonly known as "stay laws" and "redemption
      laws."

    

    8.9    If
      any
      sale is made of the Property, or any portion thereof, under the terms of this
      Deed of Trust, Grantors, their heirs, and assigns, shall upon the making of
      such
      sale, surrender and deliver possession of the Property to the Purchaser at
      such
      sale, and in the event of their failure to do so they shall after the making
      of
      the sale be tenants at will of such Purchaser. In the event of their failure
      to
      surrender possession of the Property upon demand, the Purchaser, or his or
      her
      heirs or assigns, shall be entitled to institute and maintain an action for
      forcible detainer of the Property in the Justice of the Peace Court in the
      Precinct in which such Property, or any part of it, is situated.

    

    8.10    It
      is
      agreed that the Lien hereby created shall take precedence over, and be a prior
      Lien to, any other Lien of any character, whether vendor's, materialmen's,
      or
      mechanic's Lien created on the Property after the date of this agreement, and
      in
      the event the proceeds of the indebtedness secured by this agreement are used
      to
      pay off and satisfy any Liens existing on the Property prior to the date of
      this
      agreement, then Beneficiary is, and shall be, subrogated to all of the rights,
      Liens and remedies of the Holders of the indebtedness so paid.

    

    8.11    It
      is
      further agreed that if Grantors, their heirs or assigns, while owning the
      Property, should commit an act of bankruptcy, or authorize the filing of a
      voluntary petition in bankruptcy, or should an act of bankruptcy be committed
      and involuntary proceedings instituted or threatened, or should the Property
      be
      taken over by a Receiver for Grantors, their heirs or assigns, the Exhibit
“A”
      Debt shall, at the option of Beneficiary, immediately become due and payable,
      and the acting Trustee may then proceed to sell the Property under the
      provisions of this Deed of Trust.

    

    8.12    It
      is
      agreed that if default is made in the payment of any installment of the Debt
      secured by this Deed of Trust, or any other indebtedness that is cross
      collateralized in this agreement, or if advancements are made under the terms
      of
      this Deed of Trust, the Holder shall have the option to proceed with foreclosure
      in satisfaction of such items, either through the courts or by directing the
      Trustee, or his or her successors in trust, to proceed as if under a
      foreclosure, conducting the sale as provided, without declaring the whole debt
      due. 

    

    (a)
      If
      the sale is made because of such default, such sale may be made subject to
      the
      un-matured part of the Debt secured by this Deed of Trust. It is agreed that
      such sale, if so made, shall not in any manner affect the un-matured part of
      the
      debt secured by this Deed of Trust, but as to such un-matured part this Deed
      of
      Trust shall remain in full force and effect, just as though no sale had been
      made under the provisions of this paragraph. 

    

    (b)
      It is
      further agreed that several sales may be made without exhausting the right
      of
      sale for any un-matured part of the debt secured, it being the purpose to
      provide for a foreclosure and sale of the security for any matured portion
      of
      the debt secured without exhausting the power of foreclosure, and to sell the
      security for any other part of the debt secured hereby whether matured at the
      time or subsequently maturing. 

    

    8.13    Without
      limiting any of the powers or remedies provided elsewhere herein, Grantors
      agree
      that in the event the indebtedness is payable in installments or includes,
      at
      any time, items of matured as well as un-matured indebtedness, the Holder of
      the
      matured installments or items of indebtedness, as the case may be, shall have
      the right to have the Property sold, subject to the part of the secured
      indebtedness that is un-matured at the time the Trustee is requested to make
      such sale. 

    

    (a)
      The
      Trustee is expressly authorized and empowered to conduct such sale, which is
      called an "installment foreclosure." 

    

    (b)
      Any
      such installment foreclosure made under this paragraph shall not affect the
      Lien
      securing that portion of the indebtedness to which the sale is to be made
      subject. 

    

    (c)
      No
      installment foreclosures shall exhaust the power of the Trustee to conduct
      future installment foreclosures, nor in any way limit the power of sale provided
      elsewhere in this document. The provisions elsewhere in this document relating
      to the manner of conducting Trustee's sales, including the advertising thereof,
      shall also apply to any installment foreclosure.

    

    8.14    The
      filing of a suit to foreclose any Lien, mortgage or security interest hereunder,
      either on any matured portions of the indebtedness or for the whole
      indebtedness, shall never be considered to be an election so as to preclude
      foreclosure, under any power of sale contained in this agreement, after
      dismissal of the suit.

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    9.
      Trustee Not Liable For Damages

    

    9.1    Trustee
      shall not be liable for any error of judgment or act done by Trustee, or be
      otherwise responsible or accountable under any circumstances whatever.

    

    9.2    Trustee
      shall not be personally liable in case of entry by him or anyone acting by
      virtue of the powers granted him upon the mortgaged premises for debts
      contracted or liability or damages incurred in the management or operation
      of
      the mortgaged premises. 

    

    9.3    Trustee
      shall have the right to rely on any instrument, document or signature
      authorizing or supporting any action taken or proposed to be taken by him
      hereunder or believed by him in good faith to be genuine.

    

    9.4    Trustee
      shall be entitled to reimbursement for expenses incurred by him in the
      performance of his duties hereunder and to reasonable compensation for such
      of
      his services hereunder as shall be rendered. Grantor will save and hold him
      harmless from and against any and all loss, cost, liability, damage and expense
      whatsoever incurred by him in the performance of his duties.

    

    9.5    All
      monies received by Trustee shall, until used or applied as herein provided
      be
      held in trust for the purposes for which they were received, but need not be
      segregated in any manner from any other monies (except to the extent required
      by
      law) and Trustee shall be under no liability for interest on any monies received
      by him hereunder.

    

    9.6    Trustee
      may resign by giving of notice of such resignation in writing to Beneficiary.
      If
      Trustee shall die, resign or become disqualified from acting in the execution
      of
      this Trust or fail or refuse to exercise the same when requested by Beneficiary
      so to do or if for any reason and without cause Beneficiary shall prefer to
      appoint a substitute trustee to act instead of the original Trustee named
      herein, or any prior successor or substitute trustee, Beneficiary shall have
      full power to appoint a substitute trustee and, if preferred, several substitute
      trustees in succession who shall succeed to all the estate, rights, powers
      and
      duties of the Trustee.

    

    9.7    Such
      appointment may be executed by an authorized officer, agent or attorney-in-fact
      of Beneficiary (whether acting pursuant to a power of attorney or otherwise),
      and such appointment shall be conclusively presumed to be executed with
      authority and shall be valid and sufficient without proof of any action by
      the
      Board of Directors or any superior officer of Beneficiary.

    

    9.8    Any
      new
      Trustee appointed pursuant to any of the provisions hereof shall, without any
      further act, Deed of conveyance, become vested with all the estates, properties,
      rights, powers and trusts of its or his predecessor in the rights hereunder
      with
      like effect as if originally named as Trustee herein; but, nevertheless, upon
      the written request of Beneficiary or his successor trustee, the Trustee ceasing
      to act shall execute and deliver an instrument transferring to such successor
      trustee, upon the trust herein expressed, all the estates, properties, rights,
      powers and trusts of the Trustee so ceasing to act, and shall duly assign,
      transfer and deliver any of the property and monies held by the Trustee to
      the
      successor trustee so appointed in its or his place.

    

    9.9    Trustee
      may authorize one or more parties to act on his behalf to perform the
      ministerial functions required of him hereunder, including, without limitation,
      the transmittal and posting of any notices.

    

    9.10    Trustee
      shall not be required to take any action toward the execution and enforcement
      of
      the trust hereby created or to institute, appear in or defend any action, suit
      or other proceeding in connection therewith where in his opinion such action
      will be likely to involve him in expense or liability, unless requested to
      do so
      by a written instrument signed by Beneficiary and, if Trustee so requests,
      unless Trustee is tendered security and indemnity satisfactory to him against
      any and all costs, expenses and liabilities arising therefrom.

    

    10.
      GENERAL PROVISIONS

    

    10.1    In
      the
      event any item, term, or provision contained in this document is in conflict,
      or
      may hereafter be held to be in conflict, with the laws of Texas, this document
      shall be affected only as to its application to such item, term or provision,
      and shall in all other respects remain in full force and effect. In no event
      and
      upon no contingency shall Grantors be required to pay interest in excess of
      the
      maximum interest that may be lawfully charged by the Holder of the indebtedness
      under the laws of the State of Texas.

    

    10.2    The
      execution and delivery of this Deed of Trust shall not impair or affect any
      other security (by endorsement or otherwise) for the payment of the secured
      indebtedness, and no security taken hereafter as security for payment of any
      part, or all, of the obligation shall impair in any manner or affect this Deed
      of Trust, all such present and future additional security being considered
      as
      cumulative security. 

    

    (a)
      Any
      of the property or collateral secured hereby may be released or partially
      released from this Deed of Trust without altering, varying, or diminishing
      in
      any way the force or effect of this Deed of Trust as to the Property or
      Collateral not expressly released. 

    

    (b)
      This
      Deed of Trust shall continue as a first Lien, security interest, and charge
      on
      all of the Property and Collateral not expressly released until all sums and
      indebtedness secured by this agreement have been paid in full. Any future
      assignment or attempted assignment or transfer of the interest of Grantors
      in
      and to any of the Property or Collateral described above shall not deprive
      the
      Beneficiary of the right to sell or otherwise dispose of all or any part of
      the
      Property.

    

    10.3    It
      is
      agreed that a time extension, or time extensions, may be made concerning the
      payment of all, or any part, of the indebtedness secured by this agreement
      without altering or affecting the priority of the Lien created by this Deed
      of
      Trust.

    

    10.4    In
      the
      event any portion of the indebtedness cannot be lawfully secured by this Deed
      of
      Trust Lien on the Property, it is agreed that the first payments made on the
      indebtedness shall be applied to the discharge of such portion of the
      indebtedness.

    

    10.5    Beneficiary
      is entitled to receive any and all sums that may become payable to Grantors
      for
      the condemnation of the Property, or any part thereof, for public or
      quasi-public use, or by virtue of private sale in lieu of condemnation, as
      well
      as any sums that may be awarded or become payable to Grantors for damages caused
      by public works or construction on or near the Property. 

    

    (a)
      All
      such sums are assigned to Beneficiary, who may, after deducting all expenses
      actually incurred, including attorney's fees, release the remainder of the
      amount to Grantors or apply it to the reduction of the secured indebtedness,
      whether then matured or to mature in the future, or on any money obligation
      under this agreement, as and in such manner as Beneficiary may elect.

    

    (b)
      Beneficiary shall not, in any event or circumstances, be liable or responsible
      for failure to collect, or to exercise diligence in the collection of, any
      such
      sums.

    

    10.6    Nothing
      contained herein shall ever entitle Beneficiary, upon the arising of any
      contingency whatsoever, to receive or collect interest in excess of the highest
      rate allowed by the laws of the State of Texas on the principal indebtedness,
      or
      on any money obligation under this agreement, and in no event shall Grantors
      be
      obligated to pay interest in excess of such rate.

    

    10.7    If
      this
      Deed of Trust is executed by only one person or by a corporation, the plural
      reference to Grantors shall be held to include the singular, and all of the
      covenants and agreements undertaken to be performed by, and the rights conferred
      upon, the respective Grantors shall be binding upon and inure to the benefit
      of
      not only the parties, but also their heirs, executors, administrators, grantees,
      successors, and assigns.

    

    10.8    The
      Grantors hereby agree to furnish the Beneficiary with proof that insurance
      premiums and property taxes have been paid on the property on a timely basis,
      in
      order to assure the Beneficiary that the property is insured and that insurance
      coverage cannot or has not lapsed and that property taxes shall not become
      delinquent. Grantors agree to furnish the Beneficiary with such verification
      as
      the Beneficiary may reasonably require throughout the duration of the
      Debt.

    

    10.11    It
      is
      agreed that an extension may be made at the time of the payment and that any
      part of the above described property may be released from this Lien without
      affecting the priority of the Lien which was created by this original dead
      of
      trust in favor of any junior Lien holder, mortgagee or purchaser or any other
      persons acquiring interest in the property that has been conveyed. It is the
      intention of the parties in this document to preserve the Lien priority on
      the
      property which has been described herein on all improvements referred to in
      this
      Deed of Trust.

    

    Signed
      on
      September ___, 2005.

    

    

    Grantors:

     

    Quest
      Oil
      Corporation, a Nevada corporation

    

    By:
      ________________________________

    

    Its:
      ________________________________

    

    

    

    Wallstin
      Petroleum, LLC, a Texas limited liability company

    

    By:
      _________________________________

    

    Its:
      _________________________________

    

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    STATE
      OF
      TEXAS   §

                  §

    COUNTY
      OF                                     
       §

    

    

    This
      instrument was acknowledged before me on the __
      day
      of
      ______________, 2005, by ________________________, _________________ of Quest
      Oil Corporation, a Nevada corporation, on behalf of said
      corporation.

    

                                                                                                __________________________

                                                                                                Notary
      Public, State
      of Texas

    

    Notary’s
      commission expires:

       

    
      
        

      

    

    

    STATE
      OF
      TEXAS   §

                  §

    COUNTY
      OF                              
      §

    

    

    This
      instrument was acknowledged before me on the _
      day
      of
      ______________, 2005, by ________________________, _________________ of Wallstin
      Petroleum, LLC, a Texas Limited Liability Company, on behalf of said
      company.

     

                                                                    

     

                                                                                    Notary
      Public, State
      of Texas

    

    Notary’s
      commission expires:

     

    
      
        

      
   

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    

    EXHIBIT
      “A”

    

    LIST
      OF
      INVESTORS

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    EXHIBIT
      “B”

    

    1.
      Oil, Gas and Mineral Leases:

    

    All
      of
      Grantors’ interest in the following oil, gas and mineral leases: 

    

    Cox
      Lease

    

    Oil
      and
      Gas Lease dated June 30, 1981, between Frances Cox, as Lessor, and Greg
      Zelienski et al., as Lessee, recorded in Volume 760, Page 604, Deed Records
      of
      Eastland County, Texas, as amended by instrument executed December 28, 1981,
      and
      recorded in Volume 773, Page 626, Deed Records of Eastland County, Texas, and
      as
      corrected by instrument executed April 28, 1982, and filed for record under
      File
      No.82-14323 in the Official Public or Real Property Records of Eastland County,
      Texas, covering the NE/4 of Section 76, Block 3, H&TC Ry. Co. Survey,
      A-1328, in Eastland County, Texas, SAVE AND EXCEPT 26.3944 acres, more or less,
      out of the W/2 of S/3 of such tract, all as more particularly described in
      said
      Lease, as amended and corrected.

    

    

    Elliott
      Lease

     

    Oil,
      Gas,
      and Mineral Lease dated April 13, 1972 between Catherine Elliott, as Lessor,
      and
      B.J. Hatchett et al., as Lessee, covering the W/2 of S/3 of NE/4 of Section
      76,
      Block 3. H&TC Ry. Co. in Eastland County, Texas, containing 26.3944 acres,
      more or less, as recorded in Volume 782, Page 530, Deed Records of Eastland
      County, Texas.

     

    

    Tarver
      "B" Lease

     

    Oil,
      Gas,
      and Mineral Lease granted in Agreed Judgment and Lease dated January 18, 1983
      in
      Cause No. 30,165, in the 91st Judicial District Court, Eastland County, Texas,
      in the lawsuit styled West
      Texas Mineral Interests, Inc. vs. Bob Armstrong, Commissioner of the General
      Land Office of the State of Texas
      covering
      the SE/4 of Section 76 Block 3, H&TC Ry. Co. Survey, Abstract No. 2142,
      Eastland County, Texas as more fully described in instrument dated March 7,
      1983, and recorded in Volume 816, Page 222, Official Public Records of Eastland
      County, Texas.

    

    

    Tarver
      “A” Lease

    

    Oil,
      Gas
      and Mineral Lease dated October 28, 2004 between, Delbert Tarver, as Lessor,
      and
      Wallstin Petroleum, LLC, as Lessee, covering the NW/4 of Section 57, Block
      3,
      H&TC Ry. Co. Survey, Abstract 245, being 160 acres, more or less, in
      Eastland County, Texas, and said Lease being recorded in Volume 02285, pages
      83
      and 84, Official Public Records of Eastland County, Texas.

    
 

    Nettie
      Gardner Lease

    

    Being
      116.3 acres, more or less, out of the NE corner of Joseph Blieke Survey No.
      1055, Abstract 45, Certificate No. 364, in McCullough County, Texas, patented
      to
      Jacob De Cordova by Patent No. 642, Volume II, and described by metes and bounds
      as follows: 

    Beginning
      at the NE corner of Survey No. 1055 for NE corner of this tract: THENCE with
      the
      East line of said Survey No. 1055, South 558.6 varas to a stake; THENCE N 67
      W
      1,281 varas to a stake for the SW corner of this tract, from which a mesquite.
      10” in diameter bears. S 83 1⁄2 E 44 varas; THENCE North 23 E 00 varas to a stake
      in the South line of a public road; THENCE with the South line of said public
      road S 67 E 1,242 varas to the place of beginning.

    

    

    2.
      Other Interests:

    

    All
      right, title and interest of Grantors (including, without limitation, the right
      to receive payments due Grantors as the Seller under any of said contract)
      under
      all gas sales contracts, oil, gas, condensate or other product sales contracts
      and division orders now existing or which may, prior to the final release of
      this Mortgage, be hereafter made in connection with any of the above described
      leases, including all such contracts relating to the oil, gas and mineral
      leases, units, lands, pipeline or pipeline gathering systems conveyed and
      assigned in this instrument; together with all of Grantors’ title, interest and
      rights, including the right to receive oil, gas and mineral production, in
      all
      oil or gas units in which any of the above Oil, Gas and Mineral Leases are
      now
      or hereafter pooled or unitized for oil or gas operation or production; provided
      that nothing herein shall be construed as authorized Grantors to execute any
      future unit declaration or agreement which will affect the lands covered by
      the
      above Oil, Gas and Mineral Leases without the prior consent of the Beneficiary
      named in the foregoing Deed of Trust.

     

    
      
         

      

      
        8Exhibit 10.12 (Form of Debenture)

                                                                                                                                Exhibit
      10.12

    
 

    DEBENTURE

    (QUEST
      CANADA CORP.)

     

    QUEST
      CANADA CORP., a
      corporation existing under the laws of the Province of Alberta and having an
      office and carrying on business in Calgary, Alberta.

     

    
      	1.     	
              Quest
                Canada Corp. (the "Corporation"),
                for value received, acknowledges that it is or may become indebted
                to the
                lenders, as more particularly described in Schedule "B" hereto (the
                "Lenders")
                up to the principal amount of FIFTEEN MILLION UNITED STATES DOLLARS
                (US$15,000,000.00) (the "Principal
                Sum")
                and covenants and agrees to and with the Lenders that it will pay
                to the
                Lenders the Principal Sum in lawful money of Canada, on demand, and
                further covenants and agrees with the Lenders that it will pay to
                the
                Lenders interest on the Principal Sum or so much thereof remaining
                from
                time to time owing, and interest thereon, at such rate or rates per
                annum
                as may be provided for in agreements made between the Lenders and
                the
                Corporation from time to time, such rates to not be less than fifteen
                percent (15%) in any event, and such interest to be calculated on
                the
                portion or portions of the Principal Sum and interest thereon as
                shall
                from time to time remain unpaid. All payments of principal and interest
                are to be made at the addresses of the Lenders shown in Schedule
                "B"
                attached hereto. Interest payable hereunder shall be payable both
                before
                and after maturity and before and after judgment until all monies
                payable
                hereunder, with interest as aforesaid, shall have been fully paid
                and
                satisfied. This Debenture secures payment by the Corporation to the
                Lenders of all debts and liabilities, present and future, direct
                and
                indirect, absolute and contingent, matured or not at any time owing
                by the
                Corporation to the Lenders, whether arising from dealings between
                the
                Lenders and the Corporation or from any other dealings or proceedings
                by
                which the Lenders may be or become in any manner whatsoever creditors
                of
                the Corporation, and whenever incurred, and whether incurred by the
                Corporation alone or with another or others and whether as principal
                or
                surety, including without limitation all interest, commissions, legal
                and
                other expenses and charges (hereinafter collectively called the
                "Indebtedness").

            

    

     

    For
      the
      purposes of this Debenture, “Note
      and Warrant Purchase Agreement" means
      the
      note and warrant purchase and sale agreement dated the _____ day of September,
      2005 between the Lenders and Quest Oil Corporation.

    

    
      	2.     	
              Neither
                the execution,
                delivery nor registration of this Debenture nor the advance in part
                of the
                Principal Sum hereby secured shall bind the Lenders to advance the
                Principal Sum or any un-advanced portion thereof but nevertheless
                the lien
                and charge hereby created shall take effect forthwith on the execution
                hereof and shall be a continuous charge notwithstanding that the
                balance
                owing hereunder may fluctuate and may be from time to time and at
                any time
                reduced to a nil balance and further notwithstanding that the advance
                of
                monies hereunder may be repaid and further advanced, it being understood
                that such continuous charge shall be security for any balance of
                any and
                all of the Indebtedness at any time and from time to time payable
                under
                the provisions of this Debenture.

            

    

     

    
      	3.     	
              The
                Indebtedness
                shall be paid without regard to any equities between the Corporation
                and
                the original or intermediate holder hereof or any set-off or cross-claims
                and the receipt of the Lenders for the payment of the Indebtedness
                will be
                a good discharge to the Corporation in respect
                thereof.

            

    

     

    
      	4.     	
              As
                security for
                the due payment of the Indebtedness and the performance of the obligations
                of the Corporation herein
                contained:

            

    

     

    
      	(a)     	
              the
                Corporation mortgages, charges, grants and assigns to and in favour
                of the
                Lenders as and by way of a first fixed and specific mortgage, charge
                and
                security interest all of its present and after-acquired right, title,
                estate and interest in and to that property as may be described and
                referred to in Schedule "A" hereto, including proceeds thereof, together
                with any and all accretions and accessions thereto, substitutions
                therefor
                and any and all fixtures and attachments and other property at any
                time or
                times placed upon or associated with, or as may be necessary for
                the
                effective use and operation of the property as may be described in
                the
                Schedule "A" and which forms part thereof, all of which, together
                with any
                other property subsequently acquired and specifically mortgaged and
                charged as herein provided for, is hereinafter collectively referred
                to as
                the "Specifically
                Mortgaged Property";

            

    

     

    
      	(b)     	
              the
                Corporation mortgages, charges, grants and assigns to and in favour
                of the
                Lenders as and by way of a first floating mortgage, charge and security
                interest all of its present and after-acquired right, title, estate
                and
                interest in and to all real property that is not subject to the fixed
                and
                specific mortgage, charge and security interest provided for in clause
                4(a), including proceeds thereof together with any and all accretions
                and
                accessions thereto, substitutions therefor and any and all fixtures
                and
                attachments and other property at any time or times placed upon or
                associated with, or as may be necessary for the effective use and
                operation of, such property; and

            

    

     

    
      	(c)     	
              the
                Corporation mortgages, charges, grants, creates and assigns to and
                in
                favour of the Lenders as and by way of a first mortgage, charge and
                continuing security interest, and the Lenders hereby take a continuing
                security interest, in all of the Corporation's present and after-acquired
                personal property of whatsoever nature and kind and wheresoever situate
                including, without limitation, its goods, chattel paper, securities,
                documents of title, instruments, money and intangibles, as those
                terms are
                defined in the Personal
                Property Security Act
                (Alberta), together with any and all other property and undertakings
                not
                included in clause 4(a) or (b)
                above.

            

    

     

    
      	 	
              For
                all purposes of this Debenture, the words "Mortgaged
                Property"
                mean and include all present, after-acquired and future undertakings,
                property and assets of the Corporation, all as described in subclauses
                (a), (b) and (c) of this clause 4.

            

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
      	5.     	
              The
                Corporation
                hereby covenants and agrees that if at any time during the currency
                of
                this Debenture it shall acquire any property which is in addition
                to or
                incremental to the Specifically Mortgaged Property that has a value
                in
                excess of $100,000.00 it shall, forthwith upon such acquisition,
                give
                notice thereof to the Lenders, and the Corporation does hereby further
                covenant and agree to forthwith execute and deliver such deeds, documents,
                instruments and assurances as the Lenders may require to subject
                such
                property to the specific mortgage and charge created by clause 4(a)
                of
                this Debenture. Further, the Lenders are hereby granted the right
                to
                attach to the Debenture from time to time a land schedule setting
                forth
                those of the Corporation's properties and assets as the Lenders may
                determine in their sole discretion, and to revise from time to time
                such
                land schedule as the Lenders may determine in their sole discretion,
                and
                the Corporation hereby authorizes the Lenders to do so as its duly
                appointed attorneys. The Corporation ratifies and confirms any and
                all
                such actions so taken by the Lenders from time to
                time.

            

    

     

    
      	6.     	
              The
                lien,
                charge and security interest hereby created shall be a continuous
                charge
                notwithstanding that Schedule "A" hereto may be amended from time
                to time
                and further notwithstanding that Schedule "A" may not set forth or
                describe any properties from time to
                time.

            

    

     

    
      	7.     	
              This
                Debenture shall
                also operate as security for the due observance and performance of
                all
                obligations of the Corporation under all guarantees made by the
                Corporation in favour of the Lenders whether the same are made prior
                to,
                concurrent with or after the date hereof, and for the due payment
                of all
                monies that at any time and from time to time become payable by the
                Corporation to the Lenders pursuant to any and all such
                guarantees.

            

    

     

    
      	8.     	
              The
                Corporation represents,
                warrants and undertakes to and with the Lenders
                that:

            

    

     

    
      	(a)     	
              the
                Corporation has good right and lawful authority to grant a security
                interest in, convey, assign, transfer, mortgage and charge the Mortgaged
                Property according to the true intent and meaning of this
                Debenture;

            

    

     

    
      	(b)     	
              this
                Debenture constitutes legal, valid and binding obligations of the
                Corporation, enforceable in accordance with the terms hereof, subject
                to
                applicable bankruptcy, insolvency or similar laws affecting creditor’s
                rights generally and to the availability of equitable remedies;
                and

            

    

     

    
      	(c)     	
              the
                Mortgaged Property is, and will continue to be, free and clear of
                all
                adverse claims, mortgages, liens and charges of any nature whatsoever
                other than those in favour of the Lenders and those described
                below:

            

    

     

    
      	(i)     	
              liens
                for taxes, assessments or governmental charges not yet due or
                delinquent;

            

    

     

    
      	(ii)     	
              builder's,
                carrier's, warehouseman's, mechanic's or other similar liens incidental
                to
                construction or operations which have not been filed pursuant to
                law and
                relate to obligations not due or
                delinquent;

            

    

     

    
      	(iii)     	
              liens
                in favour of a public utility or any municipality or governmental
                or other
                authority when required by such public utility or municipality or
                other
                authority in connection with the operations of the Corporation in
                the
                ordinary course of business of the Corporation, which in the aggregate
                do
                not detract materially from the value of any part of the Mortgaged
                Property or its use in the operations of the Corporation;
                and

            

    

     

    
      	(iv)     	
              liens
                (not filed pursuant to law) incurred or created in the ordinary course
                of
                business of the Corporation and in accordance with sound industry
                practice
                in respect of any of the Mortgaged Property as security in favour
                of any
                other person who is conducting the exploration, development or operation
                of the property to which such liens relate, as to the Corporation's
                proportionate share of the costs and expenses of such exploration,
                development or operation; and provided the payment of such costs
                and
                expenses are not due or delinquent;

            

    

     

    (Items
      (i) to (iv) above are collectively referred to hereinafter as the "Permitted
      Encumbrances").

     

    
      	(d)     	
              the
                Corporation has complied in all material respects with applicable
                legislation governing the Corporation and the Mortgaged Property,
                including without limitation all environmental
                legislation;

            

    

     

    
      	(e)     	
              the
                Corporation is not aware of any material environmental damage, pollution
                or contamination whatsoever relating to the Mortgaged Property, whether
                arising from or relating to the drilling of wells or conduct of
                operations, the production of petroleum substances or otherwise;
                and

            

    

     

    
      	(f)     	
              the
                Corporation is not aware of any investigation, order, notification,
                request or other proceedings issued or commenced under any federal,
                provincial, or local environmental pollution law, regulation or ordinance
                respecting the Mortgaged Property or the Corporation, or any
                non-compliance with or violation of such notice, proceedings or
                laws.

            

    

     

    
      	9.   
                	
              Notwithstanding
                anything
                in
                this Debenture, it is understood and agreed that the security interest
                created hereby shall not extend or apply to the last day of the term
                of
                any lease or any agreement therefor but upon the enforcement of this
                Debenture the Corporation shall stand possessed of such last day
                in trust
                to assign the same to any person, firm or corporation acquiring such
                term.

            

    

     

    
      	10.     	
              The
                Corporation shall not,
                without the prior express written consent of the Lenders, not to
                be
                unreasonably withheld:

            

    

     

    
      	(a)     	
              grant,
                create or assume any mortgage, pledge, charge or other encumbrance
                of
                whatsoever nature or kind charging the whole or any part of the Mortgaged
                Property, whether specifically, by way of floating charge, by way
                of
                security interest, or otherwise, other than the Permitted
                Encumbrances;

            

    

     

    
      	(b)     	
              suffer
                or permit any lien or encumbrance not expressly permitted by this
                Debenture to rank in priority to or pari passu with this Debenture
                or to
                arise or exist against the Mortgaged Property or any part thereof;
                or

            

    

     

    
      	(c)     	
              do
                anything which from time to time the Corporation has agreed not to
                do
                under the provisions of any other agreement or instrument with the
                Lenders.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	11.     	
              The
                Corporation shall:

            

    

     

    
      	(a)     	
              carry
                on and continuously conduct its business in a manner consistent with
                generally accepted industry practices; to the extent it is able,
                maintain,
                repair and keep in good working order and condition in accordance
                with
                generally accepted industry practices the Mortgaged Property; pay
                all
                rents and royalties and observe all material covenants reserved by
                and
                contained in all leases through which the Corporation holds an interest
                in
                any Mortgaged Property other than those leases respecting lands that
                are
                to be abandoned and reclaimed in the ordinary course of the Corporation's
                business; and carry on business and operate those oil and gas assets
                which
                it is operator of in accordance with good oilfield practices, accepted
                industry standards and all applicable agreements, regulations and
                laws;

            

    

     

    
      	(b)     	
              insure
                and keep insured such of the Mortgaged Property as is of a nature
                usually
                insured against loss or damage by fire or other causes to its full
                insurable value in a company or companies acceptable to the Lenders
                and at
                the request of the Lenders assign to the Lenders all monies payable
                in
                respect of any and all such
                insurance;

            

    

     

    
      	(c)     	
              maintain
                adequate and appropriate insurance, including insurance for public
                liability, blow-outs, and all-risk perils in a company or companies
                acceptable to the Lenders and at the request of the Lenders assign
                to the
                Lenders all monies payable in respect of any and all such
                insurance;

            

    

     

    
      	(d)     	
              defend
                title to the Mortgaged Property against the claims and demands of
                all
                persons, firms or corporations
                whomsoever;

            

    

     

    
      	(e)     	
              if
                requested, provide to the Lenders from time to time such information
                about
                the Mortgaged Property and the Corporation as the Lenders may reasonably
                request;

            

    

     

    
      	(f)     	
              abide
                by, observe and perform the terms and covenants of all agreements
                entered
                into from time to time with the
                Lenders;

            

    

     

    
      	(g)     	
              upon
                reasonable notice by the Lenders, allow the Lenders access to visit
                and
                inspect the Mortgaged Property;

            

    

     

    
      	(h)     	
              notify
                the Lenders in writing immediately in the event that a contaminant
                spill,
                emission or any other environmental damage
                whatsoever:

            

    

     

    
      	(i)     	
              occurs
                or is discovered on any property in which the Corporation holds an
                interest, or on any property adjacent to such property;
                or

            

    

     

    
      	(ii)     	
              results
                from, directly or indirectly, any operation conducted by or on behalf
                of
                the Corporation,

            

    

     

    that
      may
      have a material adverse effect on the Corporation or the Mortgaged
      Property;

     

    
      	(i)     	
              notify
                the Lenders in writing immediately upon receiving any notice, order
                or
                decree, or being subject to any fine, under any environmental law,
                regulation, rule, order, procedure or control that may have, singly
                or in
                the aggregate, a material adverse effect on the Corporation or the
                Mortgaged Property; and

            

    

     

    
      	(j)     	
              provide
                to the Lenders, at the Corporation’s expense, immediately upon receiving a
                request therefor from the Lenders, any and all reports, studies,
                information and documents the Lenders may require or request respecting
                the environmental condition of any of the Mortgaged Property or any
                liability the Corporation may have for environmental damage, including
                without limitation any studies or reports which the Lenders request
                be
                prepared, such studies or reports to be prepared by a firm acceptable
                to
                the Lenders; in the event these studies or reports disclose that
                all
                applicable environmental laws, regulations, orders, procedures and
                controls have not been or are not being complied with, the Corporation
                shall take all action necessary to ensure that compliance is effected
                by
                the date stipulated by the Lenders.

            

    

     

    
      	12.     	
              In
                the event of a loss under
                any of the insurance maintained by the Corporation, the Lenders,
                at its
                option, may apply the insurance proceeds on account of the Principal
                Sum
                and interest secured hereby or may apply the same to rebuilding,
                repairing
                and restoring the Mortgaged Property, or may apply the same partly
                for one
                purpose and partly for the other
                purpose.

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	13.     	
              The
                Indebtedness shall
                immediately become due and payable, whether with or without prior
                demand
                therefor, and the security hereby constituted shall become immediately
                enforceable:

            

    

     

    
      	(a)     	
              if
                the Corporation makes default in payment when due of any indebtedness
                or
                liability to the Lenders whether secured hereby or
                not;

            

    

     

    
      	(b)     	
              if
                and when the Corporation shall make default in payment of any part
                of the
                Indebtedness on the days appointed for payment under this Debenture
                or
                otherwise or, in the case of the Principal Sum, upon demand being
                made for
                payment thereof; 

            

    

     

    
      	(c)     	
              if
                and when there is any breach of, or there exists a default under,
                any of
                the covenants contained in clause 11 hereof, and such breach or default
                remains unrectified thirty (30) days after the Lenders have given
                notice
                thereof to the Corporation, the Corporation acknowledging that this
                curative period does not alter the demand nature of the Indebtedness
                and
                that the Lenders may demand payment in full of the Indebtedness at
                any
                time, and that if such demand is made the security hereby constituted
                shall become immediately enforceable without prejudice to the Lenders'
                other rights and remedies;

            

    

     

    
      	(d)     	
              a
                representation or warranty contained herein is or becomes untrue
                in any
                material respect, or if the Corporation shall commit any breach of,
                or
                there exists a default under, any of the covenants contained in clause
                10
                hereof;

            

    

     

    
      	(e)     	
              if
                the Corporation shall become in breach or default in the observance
                or
                performance of any term, condition, covenant, agreement, representation
                or
                warranty contained in any present or future agreement between the
                Lenders
                and the Corporation and the breach or default is not remedied within
                the
                grace period (if any) set forth in such
                agreement;

            

    

     

    
      	(f)     	
              if
                the Corporation threatens to commit or commits any act or acts of
                bankruptcy; if a petition in bankruptcy is filed or presented against
                the
                Corporation; if the Corporation makes any assignment for the benefit
                of
                its creditors or if the Corporation enters into any arrangement with
                its
                creditors; if the Corporation becomes bankrupt or insolvent, or makes
                an
                authorized assignment pursuant to the Bankruptcy
                and Insolvency Act or
                any substitute or replacement legislation therefor; if proceedings
                are
                commenced to appoint a receiver, receiver/manager, or trustee in
                respect
                of the assets of the Corporation; if the Corporation is party to
                any
                transaction which is or falls within the contemplation of any fraudulent
                preferences legislation; if a petition is filed, an order made, a
                resolution passed or any proceedings are taken for the dissolution,
                liquidation or winding-up of the Corporation; if the Corporation
                ceases or
                threatens to cease to carry on its business; if proceedings are commenced
                for the suspension of the business of the Corporation; if the Corporation
                sells or disposes of its assets other than as expressly permitted
                in this
                Debenture; if any judgment against the Corporation shall remain
                unsatisfied for a period in excess of thirty (30) days; if any proceedings
                are commenced against the Corporation under the Companies
                Creditors Arrangement Act
                or
                the Bankruptcy
                and Insolvency Act
                or
                any substitute or replacement legislation therefor;
                

            

    

     

    For
      the
      purposes of this Debenture, "Events
      of Default"
      means
      the events described in any of the subclauses in this Clause 13.

     

    Nothing
      in this clause or elsewhere in this Debenture shall in any way alter the demand
      nature of the Indebtedness or any part thereof, and the Lenders may, if they
      deem advisable, in their sole and absolute discretion, demand payment in full
      of
      the Indebtedness (and of all other indebtedness and obligations secured hereby)
      at any time, and if such demand is made the security hereby constituted shall
      become immediately enforceable without prejudice to the Lenders' other rights
      and remedies.

     

    
      	14.     	
              If
                the Indebtedness
                or
                any portion thereof is not paid by the Corporation upon demand made
                by the
                Lenders, whether before or after an Event of Default, or if an Event
                of
                Default occurs, all of the Indebtedness shall automatically become
                immediately due and payable and the Corporation shall immediately
                pay to
                the Lenders all amounts owing in respect of the Indebtedness. Without
                restricting anything herein contained, it is the intent and purpose
                hereof
                that the Indebtedness shall become payable and be paid on demand
                or upon
                the occurrence of an Event of Default without any requirement of
                time or
                further notice of any kind, all of which are expressly waived by
                the
                Corporation.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	15.     	
              If
                the security hereby
                constituted shall become enforceable pursuant to the terms hereof,
                and the
                Corporation acknowledges to and agrees with the Lenders that the
                Lenders
                may enter into possession of all or any part of the Mortgaged Property,
                or
                the Lenders may commence such legal action or other proceedings
                (including, without limitation, actions or proceedings seeking foreclosure
                and/or sale and the appointment of a receiver, which term as used
                in this
                Debenture includes a receiver-manager) as it in its sole and absolute
                discretion may deem expedient and realize upon any security granted
                in
                favour of the Lenders, all without the obligation to marshal its
                security
                and without any additional notice, presentation, demand or protest,
                all of
                which the Corporation hereby expressly waives. Upon the security
                hereby
                constituted becoming enforceable pursuant to the terms hereof, the
                Corporation shall be deemed thereupon to have irrevocably appointed
                the
                Lenders as its true and lawful attorney, for and in its name, place
                and
                stead, to execute and deliver for and on behalf of the Corporation
                all
                such transfers, leases, mortgages, grants, pledges, deeds, documents,
                instruments and assurances and do and perform all such acts and things
                as
                may be necessary or advisable to carry out the rights, remedies and
                powers
                hereby granted to the Lenders. The rights and remedies of the Lenders
                hereunder are cumulative, are in addition to and are not in substitution
                for any rights or remedies provided by law or contained in any other
                agreement, instrument, or security heretofore or hereafter granted
                by the
                Corporation in favour of the Lenders, and any and all such rights
                or
                remedies may be exercised independently or concurrently by the
                Lenders.

            

    

     

    
      	16.     	
              The
                Lenders may,
                at any time after the security hereby constituted shall have become
                enforceable, appoint any person, firm or corporation, whether an
                officer
                or employee of the Lenders or not, to be a receiver of all or any
                part of
                the Mortgaged Property and may from time to time remove any receiver
                so
                appointed and appoint another in its stead and the Lenders shall
                not in
                any way be responsible for any misconduct or negligence on the part
                of any
                such receiver.

            

    

     

    
      	17.     	
              A
                receiver so appointed shall,
                for the purposes of responsibility for his acts, be deemed to be
                the agent
                of the Corporation and not of the Lenders, and shall (unless limited
                by
                applicable legislation) have power:

            

    

     

    
      	(a)     	
              to
                take possession of, collect and otherwise assume control all or such
                part
                of the Mortgaged Property as the receiver deems appropriate from
                time to
                time and for that purpose take any proceedings in the name of the
                Corporation or otherwise;

            

    

     

    
      	(b)     	
              to
                carry on or to concur in the carrying on of the business of the
                Corporation;

            

    

     

    
      	(c)     	
              to
                sell or lease or concur in selling or leasing all or any part of
                the
                Mortgaged Property;

            

    

     

    
      	(d)     	
              to
                make any arrangement or compromise which the receiver may consider
                expedient;

            

    

     

    
      	(e)     	
              to
                prosecute and defend all suits, proceedings and actions which the
                receiver
                considers necessary or advisable for the proper protection of the
                Mortgaged Property; and

            

    

     

    
      	(f)     	
              for
                any one or more of the above purposes, to borrow money and grant
                security
                for the repayment thereof and all amounts so borrowed, together with
                interest thereon, may form a first fixed charge upon the Mortgaged
                Property,

            

    

     

    and
      for
      the purposes aforesaid, the Corporation hereby authorizes a receiver so
      appointed (and by these presents does so appoint such receiver its true and
      lawful attorney for and in its name, place and stead) to execute and deliver
      for
      and on behalf of the Corporation all such transfers, leases, mortgages, deeds,
      documents, instruments and assurances and do and perform all such acts and
      things as may be necessary or advisable to carry out the powers hereby granted,
      subject to applicable law. Further, the receiver shall be vested with such
      other
      discretions and powers as may be granted in the instrument of appointment and
      any supplement thereto. The aforesaid authorization and appointment shall in
      no
      way limit, restrict or derogate from, in any manner whatsoever, those powers
      and
      authorities which such receiver shall otherwise have and enjoy.

     

    The
      net profits
      of
      carrying on the business of the Corporation and the net proceeds of sale of
      the
      Mortgaged Property, or any part or parts thereof, shall be applied by the
      receiver, subject to the claim of all secured and unsecured creditors (if any),
      ranking in priority to this Debenture:

     

    
      	 	
              Firstly:

            	
              in
                payment of all costs and expenses of and incidental to the appointment
                of
                the receiver and the exercise by him of all or any of the aforesaid
                powers, including the reasonable remuneration of the receiver and
                all
                other costs and expenses properly paid or payable by the
                receiver;

            

    

     

    
      	 	
              Secondly:

            	
              in
                and towards payment to the Lenders of the Indebtedness to be applied
                by
                the Lenders thereto at their discretion to any interest or principal
                remaining payable or due on or under this Debenture;
                and

            

    

     

    Thirdly:     
any
      surplus shall be paid to the Corporation.

     

    The
      Lenders shall have no liability to the receiver for the receiver's remuneration,
      costs, charges or expenses.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	18.     	
              The
                Corporation
                acknowledges that if a stay of proceedings is issued against the
                Corporation pursuant to the Bankruptcy
                and Insolvency Act,
                the Companies’
                Creditors Arrangements Act or
                otherwise, the Lenders would be irreparably harmed and materially
                prejudiced if any proceeds of the Mortgaged Property were used for
                any
                purpose other than the repayment of the debts secured hereby, and
                the
                Corporation hereby acknowledges and agrees that any proceeds of the
                Mortgaged Property received by the Corporation while such stay is
                in
                effect shall be received and held in trust for the
                Lenders.

            

    

     

    
      	19.     	
              If
                the security
                hereby constituted shall become enforceable, the Lenders may, either
                before or after any entry, and to the extent permitted by law, sell
                and
                dispose of the Mortgaged Property, either as a whole or in separate
                parcels, at a public auction or by tender or by private sale at such
                time
                or times as the Lenders may determine, with or without notice to
                the
                Corporation, and may make any such sale, either for cash or credit
                or part
                cash and part credit or any other arrangement providing for deferred
                payment, and with or without advertisement, and with or without a
                reserve
                bid as the Lenders may see fit, and the Lenders may also rescind
                or vary
                any contract of sale that may have been entered into and resell with
                or
                under any of the powers conferred hereunder and adjourn any such
                sale from
                time to time and may execute and deliver to the purchaser or purchasers
                of
                the Mortgaged Property or any part thereof a good and sufficient
                deed or
                conveyance or deeds or conveyances for the same, the Lenders being
                hereby
                constituted the irrevocable attorney of the Corporation for the purpose
                of
                making such sale and executing such deeds or conveyances, and any
                such
                sale made as aforesaid shall be a perpetual bar both in law and in
                equity
                against the Corporation and all other persons claiming all or any
                part of
                the Mortgaged Property by, from, through or under the
                Corporation.

            

    

     

    
      	20.     	
              Notwithstanding
                the terms
                of
                this Debenture, the Corporation shall remain liable to perform all
                of its
                duties and obligations in regard to the Mortgaged Property (including
                without limitation all of its duties and obligations arising under
                any
                leases, licenses, permits, reservations, contracts, agreements,
                instruments, contractual rights and governmental orders and authorizations
                now or hereafter pertaining thereto) to the same extent as if this
                Debenture had not been executed, and the exercise by the Lenders
                of their
                rights and remedies under or in regard to this Debenture shall not
                release
                the Corporation from such duties, the Lenders having no liability
                for such
                duties and obligations by reason only of the execution and delivery
                of
                this Debenture.

            

    

     

    
      	21.     	
              The
                Lenders may
                (at any time and from time to time) pay or satisfy any lien, charge
                or
                encumbrance now existing or hereafter created or claimed upon the
                Mortgaged Property, or any part thereof, and all amounts so paid
                shall be
                added to the debt hereby secured and the same shall be payable forthwith
                with interest at the rate provided for herein and all amounts so
                paid,
                with interest thereon as aforesaid, shall be charged upon the Mortgaged
                Property.

            

    

     

    
      	22.     	
              The
                Corporation
                hereby indemnifies and agrees to hold harmless the Lenders and their
                successors and assigns from and against all liabilities, actions,
                claims,
                demands, judgments, costs (including all reasonable legal fees and
                expenses whatsoever), charges and reasonable legal fees that may
                be made
                against or incurred by the Lenders arising directly or indirectly
                by
                reason of any claim, action or charge that the Lenders have received
                funds
                that are or may be the property of or be claimed by a third person,
                either
                before or after the payment in full of the Principal Sum, interest
                and
                other monies secured hereby and either before or after the release
                either
                wholly or partially of the mortgage, charge and security interest
                created
                hereby; and the Lenders shall have the right to defend against any
                such
                claims, actions and charges, and claim from the Corporation all expenses
                incurred by the Lenders in connection therewith, including without
                limitation all reasonable legal fees and expenses whatsoever that
                may be
                paid by the Lenders in connection therewith. This covenant and indemnity
                shall survive the repayment of the Indebtedness and shall remain
                in full
                force and effect for the benefit of the Lenders notwithstanding the
                full
                or partial release of the mortgage, charge and security interest
                created
                hereby, or any foreclosure in respect thereof. If any such claim,
                action
                or charge as aforesaid is made after the full or partial release
                of the
                mortgage, charge and security interest created hereby, or any foreclosure
                in respect thereof, such mortgage, charge and security interest shall
                automatically be reinstated without any further action by the Corporation
                or the Lenders, as if and as though such security interest had never
                been
                released or foreclosed, and shall constitute security for all such
                amounts
                claimed by the Lenders pursuant to this
                indemnity.

            

    

     

    
      	23.     	
              The
                Corporation
                hereby indemnifies and agrees to hold harmless the Lenders from and
                against any and all liabilities, actions, claims, demands, judgments,
                costs (including all reasonable legal fees and expenses whatsoever),
                charges, fines, penal or administrative sanctions suffered by the
                Lenders,
                to the extent same are not caused by the gross negligence or willful
                misconduct of the Lenders, relating directly or indirectly to the
                Corporation or the Mortgaged Property and arising directly or indirectly
                out of: (a) any breach of or claim under federal, provincial, or
                local
                environmental laws or regulations, including: (i) all costs of any
                required or necessary repair, clean-up, detoxification, or other
                compliance with any federal, provincial, or local environmental laws
                or
                regulations (whether such action is required or necessary) and; (ii)
                all
                costs of determining whether any of the Corporation’s activities are in
                compliance and causing such activities to be in compliance with all
                federal, provincial, or local environmental laws or regulations and;
                (b)
                damages to persons or property, and the Lenders' reasonable legal
                and
                consultant’s fees and expenses and court costs in respect thereof. This
                covenant and indemnity shall survive the repayment of the Indebtedness
                and
                shall continue in full force and effect for the benefit of the Lenders
                notwithstanding the full or partial release of the mortgage, charge
                and
                security interest created hereby, or any foreclosure in respect thereof.
                If any amount becomes payable pursuant to this indemnity after the
                full or
                partial release of the mortgage, charge and security interest created
                hereby, or any foreclosure in respect thereof, such mortgage, charge
                and
                security interest shall automatically be reinstated without any further
                action by the Corporation or the Lenders, as if and as though such
                security interest had never been released or foreclosed, and shall
                constitute security for all such amounts claimed by the Lenders pursuant
                to this indemnity.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	24.     	
              Unless
                caused by the gross negligence or willful misconduct of the Lenders,
                any
                receiver or any agent of the Lenders, neither the
                Lenders
                nor any receiver nor any agent of the Lenders shall: (i) be responsible
                or
                liable for any debts contracted by it, for damages to persons or
                property,
                for salaries or for non-fulfillment of contracts during any period
                when
                the Lenders or any receiver shall manage or be in possession of any
                security interest created hereby; (ii) be liable to account as mortgagee
                in possession or for anything except actual receipts or be liable
                for any
                loss on realization or for any default or omission for which a mortgagee
                in possession may be liable; (iii) nor be bound to do, observe or
                perform
                or to see to the observance or performance by the Corporation of
                any
                obligations or covenants imposed upon the Corporation; (iv) nor in
                the
                case of any chattel paper, security or instrument, be obligated to
                preserve rights against any other persons. The Corporation hereby
                waives
                any law permitted to be waived by it which imposes higher or greater
                obligations upon the Lenders or any receiver than
                aforesaid.

            

    

     

    
      	25.     	
              The
                Corporation
                hereby indemnifies and agrees to save harmless the Lenders and every
                receiver from and against any and all any and all liabilities, actions,
                claims, demands, judgments, costs (including all reasonable legal
                fees and
                expenses whatsoever), charges, fines, penal or administrative sanctions
                made against, suffered or incurred by the Lenders or any receiver
                and
                relating directly or indirectly to the taking of this Debenture,
                unless
                the foregoing is suffered or incurred due to the gross negligence
                or
                willful misconduct of the Lenders or such receiver; and the Lenders
                and
                every receiver shall have the right to defend against any such
                liabilities, actions, claims, demands, charges and sanctions and
                to claim
                from the Corporation all expenses incurred in connection therewith
                (including all reasonable legal fees and expenses whatsoever). It
                is
                understood and agreed that the covenants and conditions of this clause
                shall remain in full force and effect notwithstanding the payment
                or
                release, either partially or wholly, of the mortgage, charge and
                security
                interest created hereby, or any foreclosure in respect thereof. If
                any
                amount becomes payable pursuant to this indemnity after the full
                or
                partial release of the mortgage, charge and security interest created
                hereby, or any foreclosure in respect thereof, such mortgage, charge
                and
                security interest shall automatically be reinstated without any further
                action by the Corporation or the Lenders, as if and as though such
                security interest had never been released or foreclosed, and shall
                constitute security for all such amounts claimed by the Lenders pursuant
                to this indemnity.

            

    

     

    
      	26.     	
              The
                Indebtedness will be paid
                in
                lawful money of the United States in favour of the Lenders payable
                at the
                addresses of the Lenders shown in Schedule "B" attached hereto, as
                the
                same shall become due and payable hereunder.

               

            

    

    
      	27.    	
              (a)No
                postponement
                or
                partial release or discharge of the mortgages and charges created
                by this
                Debenture shall in any way operate or be construed to release or
                discharge
                the security hereby constituted except as therein specified, or to
                release
                or discharge the Corporation from any obligation or liability to
                the
                Lenders under this Debenture.

            

    

     

    
      	(b)     	
              The
                Lenders may
                waive any breach or default by the Corporation of any of the provisions
                contained in this Debenture or any breach or default by the Corporation
                in
                the observance or performance of any covenant or condition required
                to be
                observed or performed by the Corporation under the terms of this
                Debenture; provided that any such waiver shall apply only to the
                particular breach or default waived and shall not operate as a waiver
                of
                any other or future breach or default. Further, no delay or omission
                upon
                the part of the Lenders to exercise any right or power hereunder
                shall
                impair such right or power or be considered to be a waiver of any
                breach
                or default or any acquiescence
                thereunder.

            

    

     

    
      	(c)     	
              The
                taking of
                a
                judgment or judgments by the Lenders on any of the covenants herein
                contained or on any of the covenants contained in any further or
                associated security documentation taken pursuant hereto shall not
                operate
                as a merger of the said covenants nor affect the right of the Lenders
                to
                interest at the applicable rates and times as provided for
                herein.

            

    

     

    
      	(d)     	
              Nothing
                in this
                Debenture shall be construed as a subordination by the Lenders of
                the
                mortgages, charges and security interests created hereby to any of
                the
                Permitted Encumbrances, it being the intent that all such mortgages,
                charges and security interests shall be a first mortgage, charge
                and
                security interest.

            

    

     

    
      	28.     	
              The
                security
                hereby created is in addition to and not in substitution for any
                other
                security or securities which the Lenders may now or from time to
                time hold
                or take from the Corporation.

            

    

     

    
      	29.     	
              Each
                Lender agrees
                and acknowledges that this Debenture is being held by the Lenders
                to
                secure the Indebtedness on a pari
                passu
                basis. Each of the Lenders hereby acknowledges that to the extent
                permitted by law, the Mortgaged Property and the remedies provided
                under
                this Debenture to the Lenders are for the benefit of the Lenders
                collectively and acting together and not severally and further
                acknowledges that its rights hereunder and under any Mortgaged Property
                are to be exercised not severally, but by an agent upon the decision
                of a
                majority of Lenders, where a majority of Lenders means a group of
                Lenders
                who collectively represent 51% of the value of the indebtedness owing
                to
                the Lenders under the senior secured convertible promissory notes
                issued
                under the Note and Warrant Purchase Agreement (the "Majority
                Lenders").
                The Majority Lenders shall appoint such agent (the "Agent").
                Accordingly, notwithstanding any of the provisions contained herein,
                each
                of the Lenders hereby covenants and agrees that it shall not be entitled
                to take any action hereunder but that such action shall be taken
                only by
                the Agent with the prior written agreement of the Majority Lenders.
                Each
                of the Lenders hereby further covenants and agrees that upon any
                such
                written agreement being given, it shall co-operate fully with the
                Agent to
                the extent requested by the Agent. Notwithstanding the foregoing,
                in the
                absence of instructions from the Lenders and where in the sole opinion
                of
                the Agent, acting reasonably and in good faith, the exigencies of
                the
                situation warrant such action, the Agent may without notice to or
                consent
                of the Lenders take such action on behalf of the Lenders as it deems
                appropriate or desirable in the interest of the Lenders.
                

            

    

     

    
      	30.     	
              The
                Corporation
                hereby agrees to pay to the Lenders, forthwith upon demand, all reasonable
                costs, charges and expenses (including all legal fees and expenses)
                which
                the Lenders suffer or incur in connection with the preparation, execution,
                delivery, registration, administration, defending, amendment and
                enforcement of this Debenture together with interest thereon at the
                rate
                provided for herein from the date the Lenders make demand for payment
                of
                such costs, charges and expenses so suffered or
                incurred.

            

    

     

    
      	31.     	
              The
                Corporation,
                by executing this Debenture, hereby acknowledges and agrees
                that:

            

    

     

    
      	(a)     	
              value
                has been given by the Lenders;

            

    

     

    
      	(b)     	
              the
                Corporation has rights in the Mortgaged
                Property;

            

    

     

    
      	(c)     	
              there
                is no agreement to postpone the attachment of the security interest
                hereby
                created;

            

    

     

    
      	(d)     	
              the
                Corporation has received a duplicate original of this
                Debenture;

            

    

     

    
      	(e)     	
              notwithstanding
                that the mortgage, charge and security interest created pursuant
                to clause
                4(b) is stated to be a floating charge, the time for attachment of
                the
                mortgage, charge and security interest created pursuant to this Debenture
                has not been postponed and is intended to attach when this Debenture
                is
                signed by the Corporation, and attaches at that time to property
                in which
                the Corporation then has any right, title or interest and attaches
                to
                property in which the Corporation subsequently acquires any right,
                title
                or interest at the time when the Corporation first acquires such
                right,
                title or interest; and

            

    

     

    
      	(f)     	
              the
                Corporation hereby waives its right to receive a copy of any financing
                statement or financing change statement or notice registered by the
                Lenders in connection with this Debenture and any statement issued
                with
                respect thereto where such waiver is not otherwise
                prohibited.

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      	32.     	
              Any
                notice, direction or other instrument required or permitted to be
                given
                under this Debenture by the Lenders to the Corporation, or by the
                Corporation to the Lenders, will be in writing and may be given by
                delivering same or by fax to the following
                address:

            

    

     

    If
      to the
      Corporation:

     

    Quest
      Canada Corp.·

    Calgary,
      AB ·

    Attention: ·

    Facsimile: ·

    

    If
      to the
      Lenders:

     

    See
      names
      and addresses shown on Schedule "B" attached hereto.

    

    Any
      communication aforesaid will:

     

    
      	 	
              (a)

            	
              if
                delivered, be deemed to have been given or made at the time of delivery;
                and

            

    

     

    
      	 	
              (b)

            	
              if
                sent by electronic communication, be deemed to have been given or
                made on
                the day it was sent if confirmation of receipt is obtained during
                normal
                business hours on that day, or on the next day if confirmation is
                received
                after normal business hours.

            

    

     

    The
      Lenders
      and the
      Corporation may change their respective addresses for service as set forth
      in
      this clause by giving notice thereof to the other as herein provided
      for.

     

    
      	33.     	
              The
                Corporation
                shall execute and deliver to the Lenders such further and other deeds,
                documents, instruments and assurances and do or cause to be done
                all such
                other acts and things as may be required by the Lenders from time
                to time
                to give full force and effect to this Debenture and the mortgages,
                charges
                and security interests created
                hereby.

            

    

     

    
      	34.     	
              The
                Corporation
                hereby authorizes the Lenders to file or register such financing
                statements, financing change statements and other documents as the
                Lenders
                may deem appropriate to perfect on an ongoing basis and continue
                the
                mortgage, charge and security interest created hereby and to protect
                and
                preserve the Mortgaged Property.

            

    

     

    
      	35.     	
              This
                Debenture
                shall enure to the benefit of the Lenders and their successors and
                assigns
                and shall be binding upon the Corporation and its successors and
                assigns.

            

    

     

    
      	36.     	
              This
                Debenture
                shall be interpreted and governed by the laws in force in the Province
                of
                Alberta, except as and to the extent that the laws of any jurisdiction
                may
                otherwise validly require, and the Corporation irrevocably submits
                to the
                jurisdiction of the Courts of the Province of
                Alberta.

            

    

     

    
      	37.     	
              To
                the extent
                that any of the Mortgaged Property is in the Province of Saskatchewan
                or
                this Debenture is governed by the laws of Saskatchewan, the Corporation
                agrees that the Limitation of Civil Rights Act, the Land Contracts
                (Actions) Act and Part IV (excepting only section 46) of the Saskatchewan
                Farm Security Act do not apply insofar as they relate to actions
                as
                defined in those Acts, or insofar as they relate to or affect this
                Debenture, the rights of the Lender under this Debenture or any
                instrument, mortgage, charge, pledge, hypothecation, lien (statutory
                or
                otherwise), assignment, financial lease, title retention agreement
                or
                arrangement, security interest or other encumbrance of any nature
                however
                arising, security agreement or other document of any nature that
                renews,
                extends or is collateral to this
                Debenture.

            

    

     

    
      	38.     	
              Time
                shall be
                of
                the essence hereof.

            

    

     

    
      	39.     	
              The
                Corporation acknowledges and agrees
                that in the event that it amalgamates or merges with any other corporation
                or corporations, it is the intention of the Corporation and the Lenders
                that the term "Corporation" when used herein shall apply to each
                of the
                amalgamating corporations and to the resulting amalgamated corporation,
                such that the mortgage, charge and security interest created hereby
                shall
                secure all present and future Indebtedness to the Lenders of each
                of the
                amalgamating corporations and the amalgamated corporation. The mortgage,
                charge and security interest created hereby will attach to all of
                the
                Mortgaged Property owned by each corporation amalgamating with the
                Corporation and by the amalgamated corporation at the time of the
                amalgamation, and shall attach to any Mortgaged Property thereafter
                owned
                or acquired by the amalgamated
                corporation.

            

    

     

    
      	40.     	
              The
                provisions
                of
                the Note and Warrant Purchase Agreement are not superseded by or
                merged in
                the execution or registration of this Debenture, and the provisions
                of the
                Note and Warrant Purchase Agreement shall remain in full force and
                effect
                until all of the conditions thereof to be observed and performed
                by the
                Corporation have been fully paid and satisfied, provided however
                that in
                the event of a conflict between the terms of the Note and Warrant
                Purchase
                Agreement and the terms of this Debenture, the terms of the Note
                and
                Warrant Purchase Agreement shall prevail. Notwithstanding the foregoing,
                if there is any right or remedy of the Lenders set forth in this
                Debenture
                which is not set forth in the Note and Warrant Purchase Agreement,
                such
                right or remedy shall not constitute a
                conflict.

            

    

     

    
      	41.     	
              Any
                provision
                of
                this Debenture which is prohibited or unenforceable in any jurisdiction
                will, as to that jurisdiction, be ineffective to the extent of such
                prohibition or unenforceability and will be severed from the balance
                of
                this Debenture, all without affecting the remaining provisions of
                this
                Debenture or affecting the validity or enforceability of such provision
                in
                any other jurisdiction.

            

    

     

    
      	42.     	
              To
                the full
                extent that it may lawfully do so, the Corporation
                hereby:

            

    

     

    
      	(a)     	
              waives
                and disclaims any benefit of, and shall not have or assert any right
                under
                any statute or rule of law pertaining to the marshalling of assets;
                and

            

    

     

    
      	(b)     	
              agrees
                that it shall not have or assert any right or equity of redemption
                or any
                right under any statute or otherwise to redeem the Mortgaged Property
                or
                any part thereof after the sale hereunder to any person whether such
                sale
                is by the Lenders, any receiver or otherwise, notwithstanding, if
                such
                should be the case, that the Lenders may have purchased
                same.

            

    

     

    
      	43.     	
              This
                Debenture may
                be executed in separate counterparts and by facsimile. Each counterpart,
                when so executed and delivered, shall be deemed to be an original,
                and all
                such counterparts taken together shall constitute one and the same
                instrument.

            

    

     

    
      
        
          677965.v5 

        

        
        

      

      
        8

        
          

        

      

      
        
        

        
          -
            -

        

      

    

    In
      witness whereof the Corporation and the Lenders have attested by the signature
      of their proper officer or officers, or persons duly authorized in that behalf,
      this ______ day of September, 2005.

     

    
      	
              QUEST
                CANADA CORP.

            	 	
              LENDERS

               

            
	
              Per:___________________________
                

              Name: Cameron
                King

              Title: President
                and Chief Executive Officer

            	 	
              Per:______________________________

              Name:
                

              Title:
                

            
	 	 	
               

              Per:______________________________

              Name:
                

              Title:
                

            
	 	 	
               

              Per:______________________________

              Name:
                

              Title:
                

            
	 	 	
               

              Per:______________________________
                

              Name:
                

              Title:
                

            

    

    

     

    
      
        
          677965.v5 

        

        
        

      

      
        9

        
          

        

      

      
        
        

        - -

      

    

    SCHEDULE
      "A" ATTACHED TO AND FORMING PART OF THE DEBENTURE GRANTED BY QUEST CANADA CORP.
      TO THE LENDERS AND DATED THE ____ DAY OF SEPTEMBER, 2005

    

    

    

    Specifically
      Mortgaged Property

     

    The
      Specifically Mortgaged Property referred to in clause 4(a) to the Debenture
      to
      which this Schedule "A" forms part consists of all of the present and
      after-acquired right, title and interest of the Corporation in and
      to:

     

    
      	 	
              (a)

            	
              all
                petroleum, natural gas and related hydrocarbons or minerals in place
                or in
                storage within, upon or under the lands set forth in Exhibit "1"
                hereunto
                annexed and made part of this Schedule "A" (the interest of the
                Corporation therein being represented to be not less than that set
                forth
                in Exhibit "1") and all lands now or hereafter pooled, unitized,
                grouped
                or otherwise combined for production or other purposes with said
                lands;
                and

            

    

     

    
      	 	
              (b)

            	
              all
                rights, licences, agreements, leases, permits, servitudes, easements,
                rights of way, rights of entry and other surface rights, governmental
                or
                administrative authorizations, licenses, permits and consents and
                other
                rights now owned or hereafter acquired by the Corporation under which
                the
                Corporation derives or holds the right to enter upon and use the
                lands in
                Exhibit 1 (and any lands with which said lands are now or hereafter
                pooled, unitized, grouped or otherwise combined) including without
                limitation the right to drill for, produce, store, gather, treat,
                process,
                ship, or transport hydrocarbons now or hereafter produced or allocated
                to
                the lands in Exhibit 1 (and all lands with which said lands
                are now
                or are hereafter pooled, unitized, grouped or otherwise combined);
                and

            

    

     

    
      	 	
              (c)

            	
              all
                the estate or interest of the Corporation in or to any of the said
                hydrocarbons or minerals, rights, licences, permits and lands;
                and

            

    

     

    
      	 	
              (d)

            	
              all
                the right, title and interest of the Corporation in and to all surface
                and
                subsurface machinery, apparatus, equipment, field facilities and
                other
                property and assets of whatsoever nature and kind (including without
                limitation all wells, casing, tubing, rods, pumps and pumping equipment,
                Christmas trees and other wellhead equipment, separators, flow lines,
                pipelines, tanks, treaters, heaters, plans and systems to gather,
                treat
                and/or compress hydrocarbons, plants and systems to treat, dispose
                of or
                inject water or other substances, power plants, poles, lines,
                transformers, starters, controllers, machine shops, tools, spare
                parts and
                spare equipment, telephone, radio and other communication equipment,
                racks
                and storage facilities) used, useful, or intended to be used in connection
                with operations on or relating to the lands set forth in Exhibit "1"
                (and lands with which said lands are now or hereafter pooled, unitized,
                grouped or otherwise combined), including with respect to the production,
                injection, compression, treatment, storage, measuring, gathering
                or
                transportation of hydrocarbons therefrom or allocated thereto;
                and

            

    

     

    
      	 	
              (e)

            	
              all
                buildings, structures, improvements, expansions, erections, works
                and
                fixtures now or hereafter brought, built, erected, constructed, placed
                or

            

    

     

    

     

    
      	 	 	
              otherwise
                situate on the lands in Exhibit 1 (or lands with which said
                lands are
                now or hereafter pooled, unitized, grouped or otherwise
                combined);

            

    

     

    and
      in
      particular, but without limitation, the rights and interests of the Corporation
      referred to in Exhibit "1" hereto.

     

    

     

    
      
        
          677965.v5 

        

        
        

      

      
        10

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      "1" TO SCHEDULE "A" TO THAT $____________________ DEBENTURE DATED SEPTEMBER
      ______, 2005 GRANTED BY QUEST CANADA CORP.

     

    

     

    

     

    LAND
      SCHEDULE

     

    [Intentionally
      Left Blank] 

     

    

     

    
      
        
          677965.v5 

        

        
        

      

      
        11

        
          

        

      

      
        
        

        - -

      

    

    SCHEDULE
      "B" ATTACHED TO AND FORMING PART OF THE DEBENTURE GRANTED BY QUEST CANADA CORP.
      TO THE LENDERS AND DATED THE ____ DAY OF SEPTEMBER, 2005

    

    

    
      	
              Names
                

              of
                Lenders

            	
              Addresses
                

              of
                Lenders

            
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

    

    

    

    
      
        
        

      

      
        12

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