Document:

Exhibit 10.2
                                                                   ------------
                                                                  Execution Copy

================================================================================

                              AMENDED AND RESTATED

                       LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                               QUEST CHEROKEE, LLC

                      a Delaware limited liability company

                                December 22, 2003

================================================================================

    The Member Interests represented by this Agreement have been acquired for
   investment and were issued without registration under the Securities Act of
  1933, as amended (the "Securities Act"), or under the securities laws of any
   state. These Interests may not be sold, pledged, hypothecated, or otherwise
       transferred at any time except (i) in accordance with the Transfer
   Restrictions (as defined in this agreement),contained in this Agreement and
  (ii) pursuant to an effective registration statement under the Securities Act
        and any applicable state securities laws unless an exemption from
      registration under the Securities Act and under any applicable state
          securities laws is available in connection with the transfer.

<PAGE>

                                TABLE OF CONTENTS

                                    Article 1
                                   Definitions

1.1 Definitions...............................................................2
1.2 Construction.............................................................21

                                    Article 2
                                  Organization

2.1 Formation; Continuation; Amendment and Restatement.......................21
2.2 Name.....................................................................21
2.3 Registered Office; Registered Agent; Principal Office; Other Offices.....21
2.4 Purposes.................................................................22
2.5 Foreign Qualification....................................................22
2.6 Term.....................................................................22
2.7 Powers...................................................................22
2.8 Bluestem Contributions...................................................23

                                    Article 3
                       Authorized Units; Rights of Members

3.1 Authorized Number of Units...............................................23
3.2 Personal Property........................................................23
3.3 Certificates.............................................................23
3.4 Mutilated, Destroyed, Lost or Stolen Certificates........................24
3.5 Record Holders...........................................................25
3.6 Liability of Members to Third Parties; Relationship between Members......25
3.7 Access to Information....................................................25

                                    Article 4
                              Capital Contributions

4.1 Capital Contributions....................................................26
4.2 No Interest or Withdrawal................................................26
4.3 Title to Company Assets..................................................26
4.4 Creditors of the Company.................................................27

                                    Article 5
                Capital Accounts, Allocations and Distributions

5.1 Capital Accounts.........................................................27
5.2 Allocations for Capital Account Purposes.................................29
5.3 Allocations for Tax Purposes.............................................32
5.4 Distributions of Net Cash Flow...........................................35
5.5 No Distributions in Kind.................................................37
5.6 Limitations on Distributions.............................................37
5.7 (intentionally omitted)..................................................37
5.8 Fees; Expenses...........................................................37
5.9 Defect Properties........................................................37

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                                    Article 6
                                   Management

6.1  Member Approval Required for Certain Actions............................39
6.2  Management by Board.....................................................40
6.3  Control of Interested Member Matters....................................42
6.4  Officers................................................................43
6.5  Officer Actions.........................................................44
6.6  Indemnification.........................................................45
6.7  Reliance by Third Parties...............................................47

                                    Article 7
                Taxes, Books, Records, Accounting and Reporting

7.1  Books and Records; Right to Audit; Fiscal Year..........................48
7.2  Tax Returns.............................................................48
7.3  Tax Matters Member......................................................48
7.4  Withholding.............................................................50
7.5  Company Bank Accounts...................................................50
7.6  Other Reports...........................................................50

                                    Article 8
                     Restrictions on Transfers of Interests

8.1  Transfers of Member Interests...........................................51
8.2  Buy-Sell................................................................51

                                    Article 9
                    Dissolution, Winding-up and Termination

9.1  Dissolution.............................................................52
9.2  Winding-Up and Termination..............................................52
9.3  Certificate of Cancellation.............................................53
9.4  Certain Matters Concerning a Member.....................................54
9.5  Waiver of Partition.....................................................54

                                   Article 10
                                Other Provisions

10.1  Entire Agreement.......................................................54
10.2  Governing Law..........................................................54
10.3  Non-Waiver.............................................................55
10.4  Severability...........................................................55
10.5  Headings; Exhibits.....................................................55
10.6  Winding Up Arrangements................................................55
10.7  No Third Party Beneficiaries...........................................55
10.8  Counterparts...........................................................55
10.9  Amendment or Restatement...............................................55
10.10 Dispute Resolution.....................................................56
10.11 Notices................................................................56
10.12 Further Assurances.....................................................56
10.13 Waiver of Certain Rights...............................................56

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10.14 Creditors..............................................................56
10.15 Consent of Members.....................................................57
10.16 Confidentiality........................................................57

Exhibits:

Exhibit  A -- Unit Ownership
Exhibit  B -- Form of Certificate
Exhibit  C -- Dispute Resolution  Procedures
Exhibit  D -- List of Appraisers
Exhibit  E -- Transfer Restrictions
Exhibit  F -- Non-Competition Agreement
Exhibit  G -- Cherokee Basin

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                                                                 Execution Copy

                              AMENDED AND RESTATED

                       LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                               QUEST Cherokee, LLC

                      A Delaware Limited Liability Company

      This Amended and Restated  Limited  Liability  Company  Agreement of Quest
Cherokee, LLC (this "Agreement"),  dated as of December 22, 2003 (the "Effective
Date"), is entered into by and between CHEROKEE ENERGY PARTNERS, LLC, a Delaware
limited  liability  company  ("CPL"),  and QUEST ENERGY SERVICE,  INC., a Kansas
corporation  ("QES");  STP  CHEROKEE,  INC., an Oklahoma  corporation  ("STPC");
PONDEROSA GAS PIPELINE COMPANY, INC., a Kansas corporation ("PGPL"); QUEST OIL &
GAS CORPORATION, a Kansas corporation ("QOG"); PRODUCERS SERVICE,  INCORPORATED,
a Kansas corporation  ("PSI");  and J-W GAS GATHERING,  L.L.C., a Kansas limited
liability  company  ("JW" and,  together  with QES,  STPC,  PGPL,  QOG,  and PSI
collectively the "Quest Members" and  individually a "Quest Member").  The Quest
Members  together with CPL are  collectively  referred to as the "Members",  and
individually  referred to as a "Member."  Capitalized  terms used herein and not
otherwise defined have the meaning given to such terms in Section 1.1.

                                    RECITALS

          WHEREAS, the Quest Members formed Quest Cherokee,  LLC (the "Company")
     as a Delaware limited  liability  company by the filing of a Certificate of
     Formation (the "Delaware Certificate") with the Delaware Secretary of State
     on December 11, 2003, which certificate  states that the effective date for
     forming the Company shall be December 12, 2003 (the "Formation  Date"), and
     the execution of that certain Limited  Liability  Company  Agreement of the
     Company, dated as of December 12, 2003 (the "Original Agreement"); and

          WHEREAS,  the Quest  Members have  contributed  certain  assets to the
     Company pursuant to the Contribution Agreement; and

          WHEREAS, pursuant to the Class A Unit Purchase Agreement, CPL has made
     a capital contribution to the Company in exchange for the issuance of Class
     A Units; and

          WHEREAS, the Members desire to amend the Original Agreement to reflect
     such  admission and certain other matters as agreed by the parties,  and as
     so amended to restate it in its entirety in this Agreement;

          NOW, THEREFORE, the Members hereby agree as follows:

<PAGE>

                                   ARTICLE 1
                                  DEFINITIONS

     1.1  Definitions.  As used in this Agreement,  the following terms have the
respective  meanings  set forth below or set forth in the  Sections  referred to
below (and grammatical variations of such terms have correlative meanings):

           "Act" means the Delaware Limited  Liability  Company Act, as the same
      may be amended from time to time.

           "Acquisition"  means any  acquisition  by the  Company  of (i) all or
      substantially all of the interest in any company or business (whether by a
      purchase of assets,  purchase of stock, merger or otherwise);  or (ii) any
      acquisition  or series  of  acquisitions  during  any  Fiscal  Year by the
      Company of the  interests  in any  companies or  businesses  (whether by a
      purchase of assets,  purchase of stock, merger or otherwise),  even though
      involving less than  substantially  all of such interests,  which involves
      the payment of  consideration  in excess of $3,000,000 or would result (or
      would  reasonably  be expected to result) in a reduction of 15% or more of
      the aggregate distributions to be made or that would have been made to the
      Class A Member under Section 5.4 during any Fiscal Year.

           "Adjusted  Capital Account" means the Capital Account  maintained for
      each Member as of the end of each Tax Period of the Company, (a) increased
      by any  amounts  that  such  Member  is  obligated  to  restore  under the
      standards set forth by Treas. Reg.  ss.1.704-1(b)(2)(ii)(c)  (or is deemed
      obligated   to   restore   under   Treas.   Reg.    ss.ss.1.704-2(g)   and
      1.704-2(i)(5)),  and (b)  decreased  by (i) the  amount of all  losses and
      deductions that, as of the end of such Tax Period, are reasonably expected
      to be allocated to such Member in subsequent  Tax Periods  under  sections
      704(e)(2) and 706(d) of the Code and Treas. Reg. ss.1.751-1(b)(2)(ii), and
      (ii)  the  amount  of all  distributions  that,  as of the end of such Tax
      Period,  are  reasonably  expected to be made to such Member in subsequent
      Tax Periods in accordance with the terms of this  Agreement,  or otherwise
      to the extent they exceed  offsetting  increases to such Member's  Capital
      Account that are reasonably expected to occur during (or prior to) the Tax
      Period in which such  distributions  are  reasonably  expected  to be made
      (other than increases as a result of a minimum gain chargeback pursuant to
      Section  5.2(d)(i) or Section  5.2(d)(ii)).  This  definition  of Adjusted
      Capital  Account is intended to comply with the provisions of Treas.  Reg.
      ss.1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

           "Adjusted  Property"  means any property the Carrying  Value of which
      has been adjusted pursuant to Section 5.1(d) or Section 5.1(e).

          "Adverse  Environmental  Condition"  means  an  adverse  environmental
     condition  that is (i) one in which  the  affected  Quest  Assets is not in
     compliance with any Environmental Laws, or (ii) a physical or environmental
     condition with

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      respect  to a Quest  Asset  which  could  give rise to an on-site or
      off-site   remedial   or  other   clean-up   obligations   imposed   under
      Environmental Laws.

           "Affiliate"  means, with respect to any Person,  (a) each entity that
      such Person Controls;  (b) each Person that Controls such Person;  and (c)
      each entity that is under common Control with such Person.

           "Agreed  Allocation"  means any  allocation,  other  than a  Required
      Allocation,  of an item of income,  gain,  deduction  or loss  pursuant to
      Section 5.2.

           "Agreed  Value" means (a) with respect to any  Contributed  Property,
      the value of such Contributed Property as agreed by the parties,  which in
      the case of the assets  contributed to the Company in accordance  with the
      provisions of the Contribution Agreement,  the value of such properties as
      stated in the Class A Unit Purchase Agreement, and (b) with respect to any
      other  Contributed  Property,  the fair market  value of such  property or
      other consideration at the time of contribution as determined by the Board
      using such  reasonable  method of  valuation  as it may  adopt.  The Board
      shall,  in its  discretion,  use such  method as it deems  reasonable  and
      appropriate  to  allocate  the  aggregate   Agreed  Value  of  Contributed
      Properties   contributed   to  the  Company  in  a  single  or  integrated
      transaction among each separate property.

           "Agreement" is defined in the introductory paragraph.

           "Annual  Budget"  means the annual  operating,  capital  expenditure,
      maintenance and  acquisition  budgets,  if any,  adopted or amended by the
      Board  from time to time or  otherwise  in effect as  provided  in Section
      6.2(a)(ii).

           "Applicable  Law"  means  any Law to  which  a  specified  Person  or
      property is subject.

           "Authorized Person" is defined in Section 6.7(a).

          "Bankruptcy" or "Bankrupt" means, with respect to any Person, (a) such
     Person (i) makes a general  assignment  for the benefit of creditors;  (ii)
     files a  voluntary  bankruptcy  petition;  (iii)  becomes the subject of an
     order  for  relief  or is  declared  insolvent  in  any  federal  or  state
     bankruptcy  or  insolvency  proceedings;  (iv) files a  petition  or answer
     seeking  for  such  Person  a  reorganization,   arrangement,  composition,
     readjustment,  liquidation,  dissolution,  or similar relief under any Law;
     (v) files an answer or other  pleading  admitting or failing to contest the
     material  allegations  of  a  petition  filed  against  such  Person  in  a
     proceeding  of the type  described in  subclauses  (i) through (iv) of this
     clause (a); or (vi) seeks, consents to, or acquiesces in the appointment of
     a  trustee,  receiver,  or  liquidator  of  such  Person  or of  all or any
     substantial part of such Person's  properties;  or (b) a proceeding against
     such Person seeking reorganization, arrangement, composition, readjustment,
     liquidation,  dissolution,  or  similar  relief  under  any  Law  has  been
     commenced  and 120 days have  expired  without  dismissal  thereof  or with
     respect to which, without such Person's consent or acquiescence, a

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     trustee,  receiver,  or  liquidator  of  such  Person  or  of  all  or  any
     substantial part of such Person's properties has been appointed and 90 days
     have expired without the appointment  having been vacated or stayed,  or 90
     days  have  expired  after  the  date  of  expiration  of a  stay,  if  the
     appointment has not previously been vacated.

           "Bluestem" means Bluestem Pipeline, LLC, a Delaware limited liability
      company formed and wholly-owned by the Company.

           "Board" is defined in Section 6.2(a).

           "Book-Tax  Disparity"  means, with respect to any item of Contributed
      Property or Adjusted Property,  as of the date of any  determination,  the
      difference  between the  Carrying  Value of such  Contributed  Property or
      Adjusted  Property and the adjusted  basis thereof for federal  income tax
      purposes  as of such date.  A  Member's  share of the  Company's  Book-Tax
      Disparities in all of its Contributed Property and Adjusted Property shall
      be  reflected by the  difference  between such  Member's  Capital  Account
      balance as maintained pursuant to Section 5.1 and the hypothetical balance
      of such Member's  Capital Account computed as if it had been maintained in
      accordance with federal income tax accounting principles.

           "Buy-Sell  Point" means the point in time at which Net Cash Flow will
      be distributed under the provisions of Section 5.4(b)(iv) below.

           "Capital  Account" means the capital account  maintained for a Member
      pursuant to Section 5.1.

           "Capital  Contribution" means, with respect to any Member, the amount
      of  money  and the Net  Agreed  Value of any  assets  (other  than  money)
      contributed to the Company by the Member.  Any reference in this Agreement
      to  the  Capital   Contribution  of  a  Member  shall  include  a  Capital
      Contribution of its predecessors in interest.

          "Carrying Value" means (a) with respect to a Contributed Property, the
     Agreed  Value  of  such  property  reduced  (but  not  below  zero)  by all
     depreciation,   Simulated   Depletion  (computed  as  a  separate  item  of
     deduction),  amortization,  and cost  recovery  deductions  charged  to the
     Members'  Capital  Accounts  in respect of such  property as of the time of
     determination, (b) with respect to an Adjusted Property, the Adjusted Value
     of  such  property  reduced  (but  not  below  zero)  by all  depreciation,
     Simulated   Depletion   (computed  as  a  separate   item  of   deduction),
     amortization and cost recovery  deductions  charged to the Members' Capital
     Accounts with respect to such property as of the time of determination  and
     (b) with respect to any other Company  Assets,  the adjusted  basis of such
     property  for  federal  income  tax  purposes,   all  as  of  the  time  of
     determination.  The Carrying  Value of any property  shall be adjusted from
     time to time in accordance  with Section  5.1(d) and Section  5.1(e) and to
     reflect changes,  additions, or other adjustments to the Carrying Value for
     dispositions  and  acquisitions of Company  properties,  as approved by the
     Board.

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           "Certificate"  means  a  certificate,  substantially  in the  form of
      Exhibit B to this Agreement or in such other form as may be adopted by the
      Board in its discretion, issued by the Company evidencing ownership of one
      of more Units.

           "Change of Control" means:

           (a) when  applied  to an entity  ("Public  Entity")  that has  equity
      securities  registered  under the  Securities Act of 1933, as amended (the
      "Securities  Act"),  such  time as any of the  following  occur:  (i) with
      respect to QRC, on or after the date that  Douglas L. Lamb,  Jerry D. Cash
      or any Immediate  Family Member of either of them sells or transfer 20% or
      more of the number of shares of QRC common  stock  owned or held by any of
      them as of the Effective  Date,  (ii) a tender offer or exchange  offer is
      made  and  consummated  for  the  ownership  of  33.33%  or  more  of  the
      outstanding  voting  securities  of the  Public  Entity,  (iii) the Public
      Entity is merged or consolidated with another corporation ("Other Entity")
      and as a result  of such  merger  or  consolidation  less  than 40% of the
      outstanding  voting  securities of the surviving or resulting  corporation
      are  owned   directly  or  indirectly  in  the  aggregate  by  the  former
      stockholders  of the  Public  Entity  other  than the Other  Entity or its
      Affiliates,  as the same  shall  have  existed  immediately  prior to such
      merger  or  consolidation,  (iv) the  Public  Entity  sells  or  otherwise
      transfers  substantially  all of its assets to another entity which is not
      wholly-owned  directly or  indirectly  by the Public  Entity or one of its
      Subsidiaries,  (v) a person,  within the meaning of section  3(a)(9) or of
      section  13(d)(3) of the Securities  Exchange Act of 1934, as amended (the
      "Exchange  Act"),  acquires  33.33%  or  more  of the  outstanding  voting
      securities   of  the  Public   Entity   (whether   directly,   indirectly,
      beneficially  or of record),  or (vi)  individuals  who, as of the date of
      this Agreement, constitute the board of directors of the Public Entity (as
      of the date of this Agreement, the "Incumbent Board") cease for any reason
      to  constitute a majority of the board of directors of the Public  Entity,
      provided,  that any individual  becoming a director subsequent to the date
      hereof whose  election,  or nomination for election by the Public Entity's
      shareholders,  was  approved by a vote of at least a majority of directors
      then  comprising  the  Incumbent  Board shall be considered as though such
      individual were a member of the Incumbent Board,  but excluding,  for this
      purpose,  any such  individual  whose  initial  assumption of office is in
      connection with an actual or threatened  election  contest relating to the
      election of the directors of the Public Entity; and

          (b) when applied to an entity ("Private  Entity") that is not a Public
     Entity,  such  time as any of the  following  occur  after the date of this
     Agreement: (i) a tender offer or exchange offer is made and consummated for
     the ownership of 50 percent or more of the outstanding voting securities of
     the Private Entity,  (ii) the Private Entity is merged or consolidated with
     another  entity  ("Constituent  Party")  and as a result of such  merger or
     consolidation  50 percent or less of the outstanding  voting  securities of
     the  surviving or resulting  entity is owned  directly or indirectly in the
     aggregate  by the  former  stockholder(s)  of the  Private  Entity or their
     Affiliates,  other than  Affiliates of the  Constituent  Party, as the same
     existed  immediately  prior to such  merger  or  consolidation,  (iii)  the
     Private Entity sells or

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     otherwise transfers substantially all of its assets to another entity which
     is not wholly-owned,  directly or indirectly, by the Private Entity, one of
     its Subsidiaries or its Parent,  (iv) a person (which is not  wholly-owned,
     directly or indirectly,  by such person or one of its  Subsidiaries  or its
     Parent),  within the meaning of section  3(a)(9) or of section  13(d)(3) of
     the Exchange  Act,  acquires 50 percent or more of the  outstanding  voting
     securities   of  the  Private   Entity   (whether   directly,   indirectly,
     beneficially  or of  record)  or  (v) a  distribution  or  sale  of  voting
     securities of the Private  Entity (other than an Owner Sub) is  consummated
     and as a result of such  distribution 80 percent or less of the outstanding
     voting  securities of the Private Entity is owned directly or indirectly in
     the aggregate by the former  stockholder(s)  of the Private Entity or their
     Affiliates; and

           (c) In addition to the provisions in subparagraphs (a) and (b) above,
      with  respect  to QRC and the Class B Members,  a Change of Control  under
      this Agreement  shall be deemed to have occurred if a "change of control,"
      as this term is  defined  under the  Senior  Debt  Documents  or under the
      Subordinated  Note Agreement (or under the Subordinated Note and any other
      documents or instruments  entered into or delivered in connection with the
      Subordinated Note Agreement) has occurred.

           A Change of Control of an entity  will be deemed to have  occurred if
      any Person  that  Controls  such entity  experiences  a Change of Control;
      provided,  however,  that this provision  shall only apply with respect to
      CPL to the extent that any of the events  described  in  subparagraph  (b)
      above occurs with respect to CPL's sole member,  ArcLight  Energy Partners
      Fund I, L.P.

           "Cherokee  Basin" means the area commonly known as the Cherokee Basin
      located  in the  southeastern  portion  of the  State  of  Kansas  and the
      northeastern  portion  of the  State  of  Oklahoma  as  more  particularly
      described on Exhibit G hereto.

           "Claim"  means  any and all  judgments,  claims,  causes  of  action,
      demands,  lawsuits,  suits,  proceedings,  Governmental  investigations or
      audits,  losses,  assessments,  fines,  penalties,  administrative orders,
      obligations, costs, expenses, liabilities and damages, including interest,
      penalties,   reasonable  attorney's  fees,   disbursements  and  costs  of
      investigations, deficiencies, levies and duties.

           "Class  A  Member"  means  CPL and any  assignees  or  successors  in
      interest of CPL to any Class A Units in accordance  with the terms of this
      Agreement (but shall not include any Person who has ceased to be a Class A
      Member in accordance with the terms of this Agreement).

          "Class A Member IRR" means,  as of any date of  distribution,  the per
     annum  discount rate at which the sum of the following  cash flows is equal
     to zero (assuming discounting on the basis of a year of 365 days and actual
     days elapsed):  (i) the aggregate amount of capital contributed,  and loans
     made,  by the Class A Member and its  Affiliates  (including  amounts  made
     available to pay fees and

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     expenses to the Class A Member or its  Affiliates)  directly to the Company
     (each of which  amounts  will be deemed to be negative for purposes of this
     calculation) and (ii) (A) the aggregate amount of equity distributions, and
     payments made in respect of loans,  by the Company  directly to the Class A
     Member or its  Affiliates  minus (B) any  distributions  made  pursuant  to
     Section  5.4(c).  The equity  distributions  and payments in (ii)(A)  above
     exclude the  aggregate  fees and  reimbursed  expenses paid by the Company,
     directly or indirectly, to the Class A Member or its Affiliates. The "Class
     A Member IRR" will be  calculated  using the "XIRR"  function in  Microsoft
     Excel 2000 or an equivalent function in another software package.

           "Class A Unit" is defined in Section 3.1(a)(i).

           "Class A Unit  Purchase  Agreement"  means  the  Membership  Interest
      Purchase  Agreement  between and among the Company,  the Quest Members and
      CPL dated as of December 22, 2003, as amended from time to time.

           "Class A Unit Sharing  Ratio" means as of any date of  determination,
      with respect to each Class A Member,  the ratio that the number of Class A
      Units  held by such  Member  bears to the total  Class A Units held by all
      Members.

           "Class B  Members"  means  the Quest  Members  and any  assignees  or
      successors  in  interest  of such  Quest  Members  to any Class B Units in
      accordance  with the terms of this  Agreement  (but shall not  include any
      Person who has ceased to be Class B Member in accordance with the terms of
      this Agreement).

           "Class B Unit" is defined in Section 3.1(a)(ii).

           "Class B Unit Sharing  Ratio" means as of any date of  determination,
      with respect to each Class B Member,  the ratio that the number of Class B
      Units  held by such  Member  bears to the total  Class B Units held by all
      Members.

           "Closing Date" means the date of the Closing, as defined in the Class
      A Unit Purchase Agreement.

           "Code"  means the Internal  Revenue  Code of 1986,  as amended and in
      effect from time to time.  Any reference  herein to a specific  section or
      sections  of the  Code  shall  be  deemed  to  include  a  reference  to a
      corresponding provision of any successor law.

           "Company" is defined in the Recitals.

           "Company  Assets"  means the assets and  properties of the Company of
      every kind, character and description, whether tangible, intangible, real,
      personal or mixed, and wherever located.

          "Confidential  Information"  means  all  confidential  and  non-public
     information and data relating to the Company or its Affiliates  (other than
     a

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      Member),  including   proposed   strategic   business   plans,   financial
      information, business  opportunities,  pro forma  information and employee
      matters.

           "Conflict  Circumstance" means any transaction or dealing between the
      Company (or any  Wholly-Owned  Subsidiary)  and a Member (the  "Conflicted
      Member") or any of its  Affiliates  pursuant to any  agreement  (including
      this Agreement, the Contribution Agreement, the Management Contract or any
      other Related Agreements) or otherwise;  provided,  however,  that, in the
      case such a Conflict  Circumstance  arises in connection with an agreement
      between the Company and an Affiliate of Member, such Conflict Circumstance
      shall  cease  to  exist  if and  when  the  third  party  with  which  the
      transaction or dealing exists shall cease to be an Affiliate of a Member.

           "Conflicted  Member"  is  defined  in  the  definition  of  "Conflict
      Circumstance."

           "Contract" means any agreement,  contract,  obligation,  promise,  or
      undertaking  (whether written or oral and whether express or implied) that
      is legally binding.

           "Contributed  Property"  means each property or other asset,  in such
      form  as  may  be  permitted  by the  Act,  but  excluding  cash  or  cash
      equivalents, contributed or deemed contributed to the Company as a Capital
      Contribution.  Once  the  Carrying  Value  of a  Contributed  Property  is
      adjusted pursuant to Section 5.1(d) or Section 5.1(e), such property shall
      no  longer  constitute  a  Contributed  Property,  but  shall be deemed an
      Adjusted Property.

           "Contribution   Agreement"   means  the   Contribution,   Conveyance,
      Assignment and Assumption  Agreement dated as of December 22, 2003,  among
      the Company  and the Quest  Members,  pursuant to which the Quest  Members
      agreed to contribute the Quest Assets to the Company.

           "Control" means the possession,  directly or indirectly,  through one
      or more intermediaries, of any of the following:

           (a) (i) in the case of a  corporation,  more than 50  percent  of the
      outstanding  voting  securities  thereof;  (ii) in the  case of a  limited
      liability  company,  partnership,  limited  partnership  or joint venture,
      equity securities of such entity that entitle the owner/holder  thereof to
      the right to receive more than 50 percent of the  distributions  from such
      entity;  (iii) in the  case of a trust or  estate,  including  a  business
      trust, more than 50 percent of the beneficial  interests therein; and (iv)
      in the case of any other entity,  equity securities or ownership interests
      in such  entity  that  entitle  the  owner/holder  thereof to more than 50
      percent of the economic or beneficial interests therein; or

          (b) in the case of any entity,  the  possession  of the power,  acting
     alone,  to direct or cause the direction of the  management and policies of
     the entity by virtue of ownership of voting securities or otherwise.

                                     - 8 -
<PAGE>

           "Curative  Allocation"  means any  allocation  of an item of  income,
      gain,  deduction,  loss or credit  pursuant to the  provisions  of Section
      5.2(d)(ix).

           "Defect"  means  any  deficiency  in one (or  more) of the  following
      respects  regarding  any of the Quest  Assets  existing  as of the Closing
      Date, to-wit:

           (a) any Quest Member's title as to one or more of the Quest Assets is
      subject  to an  outstanding  mortgage,  deed of  trust,  lien or  security
      interest or other material burden or encumbrance, other than the Permitted
      Encumbrances (as this term is defined in Senior Debt Documents existing as
      of the Effective Date);

           (b) any Quest Member owns, with respect to a Lease, less than the net
      revenue  interest shown on Schedule  1.01(bb) to the Class A Unit Purchase
      Agreement  or is  obligated  to bear a share  of the  costs  of  operation
      greater than the working interest  therefor shown on Schedule  1.01(bb) to
      the Class A Unit Purchase  Agreement  without a corresponding  increase in
      net  revenue  interest;  or the  lessor's  mineral  interest  in the lands
      subject to the Lease is less than that specified in Schedule  1.01(bb) for
      such Lease;

           (c) any  Quest  Member's  rights  and  interests  in any of the Quest
      Assets have been or are subject to being reduced by virtue of the exercise
      by a third party of a reversionary or back-in interest, farm-out, or other
      similar  right not  reflected  on  Schedule  1.01(bb)  to the Class A Unit
      Purchase Agreement or at a point different from that reflected in Schedule
      1.01(bb) to the Class A Unit Purchase Agreement;

           (d) any Quest Member is in default under some  material  provision of
      an oil, gas or mineral  lease,  farmout  agreement,  or other  contract or
      agreement constituting or otherwise affecting any of the Quest Assets; and

           (e) an Adverse Environmental  Condition exists with respect to any of
      the Quest Assets; and

           (f) any of the Quest  Assets  contributed  to the  Company by a Quest
      Member (or any of the Quest  Assets  which a Quest  Member  had  otherwise
      agreed  to  contribute  the same to the  Company  under  the  Contribution
      Agreement  or the  Class A Unit  Purchase  Agreement)  is  subject  to any
      Preferential  Rights,  which, (i) in the case of a consent to assign,  has
      not been obtained with respect to the  contribution  and assignment of the
      Quest  Assets  as of the  Closing  Date,  and  (ii) in the  case of  other
      Preferential  Rights,  either (x) has been exercised  prior to the Closing
      Date,  or (y) has not been waived  prior to the Closing  Date,  or (z) the
      requisite  period has not elapsed without said right having been exercised
      on or prior to the Closing Date; and

          (g) any of the Defects described in subparagraphs (a)-(f) above apply
      with  respect  to  any  of the  Quest  Assets  which  are  (or  are to be)
      contributed  or otherwise  assigned by (or for the benefit of) the Company
      to its subsidiary, Bluestem.

                                     - 9 -
<PAGE>

           "Defect Notice Date" is defined in Section 5.9(a).

           "Defect  Property" means any of the Quest Assets (or portion thereof)
      contributed  (or to have been  contributed)  to the  Company  by the Quest
      Members  which either (i) is subject to a Defect,  or (ii) under the terms
      of Section  5.9, the Company or the Class A Member has the right to reject
      or  otherwise  cause  the  re-assignment  to  such  Quest  Member  of such
      Contributed  Property from the Company, or (iii) under the provisions this
      Agreement,  the Defect Value therefor is added to the Defect Property Loss
      Amount.

           "Defect  Property  Loss  Amount"  means the sum of the amounts of all
      Defect Values of any Defects (insofar as they were not cured in accordance
      with the provisions of Section 5.9 below).

           "Defect Property  Loss  Distribution"  is  defined in Section 5.4(c).

           "Defect Value" means,  with respect to a Defect Property,  the amount
      attributable  to the  Defect  relating  thereto  which  is  determined  in
      accordance with the Defect Value Guidelines (or other methods of valuation
      deemed appropriate by the Board).

           "Defect Value Guidelines" means with respect to each Defect, that the
      Defect Value thereof shall be determined in accordance  with the following
      guidelines:

           (a) if the Defect is one  identified  in the Class A Member's  notice
      that the Quest  Member  owns a lesser net  revenue  interest  or a greater
      working interest than that shown on Schedule  1.01(bb) to the Class A Unit
      Purchase  Agreement,  or the net mineral  acres subject to a Lease is less
      than  that  shown  on  Schedule  1.01(bb)  to the  Class  A Unit  Purchase
      Agreement,  then the Defect  Value shall be the amount by which the Agreed
      Value for the  contributed  Quest Assets  affected  would be reduced if it
      were  reduced to reflect the  proportionate  reduction  of the net revenue
      interest or the net mineral acres, or the increase in working interest;

           (b) in the event a third party  exercises an applicable  Preferential
      Right  to  purchase,  the  subject  Quest  Assets  shall be  removed  from
      contribution  (or will be  re-conveyed  by the Company),  the Defect Value
      shall be the Agreed Value of the affected Quest Asset;

          (c) if the  Defect  is that a third  party  fails to give a  necessary
     consent or approval to assign any of the Quest Assets, in a form reasonably
     acceptable  to the Class A Member,  and the subject  Quest Assets cannot be
     contributed  (or must be  re-conveyed,  or,  subject to the  consent of the
     holders of the Senior Debt, the Class A member has the right to require the
     Company to re-convey the Quest Assets),  then the Defect Value would be the
     Agreed Value of the affected Quest Assets;

           (d) if a Defect is a lien,  encumbrance or other charge or claim upon
      a Quest Assets which is liquidated in amount,  then the Defect Value would
      be sum

                                     - 10 -
<PAGE>

      necessary  to be paid to the obligee to remove the Defect from the
      affected Quest Assets;

           (e) if the Defect is an Adverse Environmental  Condition,  the Defect
      Value would be all costs,  expenses and Claims relating to the remediating
      or otherwise  pertaining to the clean-up of the affected  Quest Assets and
      the  amount  of  any  penalties,  fines,  or  other  monetary  assessments
      associated  with or arising  from such  Adverse  Environmental  Condition;
      provided,  however,  that  to the  extent  that  in  accordance  with  the
      provisions  of  Section  5.9  below  the  applicable  Defect  Property  is
      re-conveyed  by the Company,  then the Defect Value shall equal the Agreed
      Value of the affected Defect Property.

           "Delaware Certificate" is defined in the Recitals.

           "Depletable  Property"  means  the  economic  interests  held  by the
      Company  in oil and gas  producing  properties  that  are  subject  to the
      allowance for depletion in accordance with section 611 of the Code.

           "Dispute Resolution Procedures" is defined in Section 10.10.
                                                         -------------

           "Dissolution Event" is defined in Section 9.1(a).

           "Distribution Date" is defined in Section 5.4.

           "Early Liquidation Event" means a Dissolution Event that occurs on or
      before three years after the Closing Date.

           "Economic Risk of Loss" is defined in Treas. Reg.ss.1.752-2(a).

           "Effective Date" is defined in the introductory paragraph.

           "Encumber,"  "Encumbering" or  "Encumbrance"  means the creation of a
      security interest,  lien, pledge,  mortgage or other encumbrance,  whether
      such encumbrance be voluntary, involuntary or by operation of Law.

           "Environmental  Laws" means any Law,  writ,  decision  or  injunction
      relating to the protection of the environment, natural resources or public
      health and safety in effect on the Closing Date or thereafter enacted.

          "Fair Market  Value" means the fair market value of the Company or, as
     the context may require, the Company Assets,  determined as follows: either
     (i) the fair  market  value  determined  by the Board,  but if the Board is
     unable  to reach a  unanimous  agreement  on the fair  market  value of the
     Company  within  45 days  following  the event  giving  rise to the need to
     determine  such Fair Market  Value in  accordance  with the  provisions  of
     Exhibit  E, then (ii) the fair  market  value  determined  by an  appraisal
     conducted  in the  following  manner:  the Class A  Members  (collectively)
     shall,  in a written notice,  designate one independent  appraiser from the
     list set forth herein as Exhibit D hereto, which Exhibit D may

                                     - 11 -
<PAGE>

     be  amended  from  time to time by the  unanimous  vote of the  Board.  The
     appraiser so appointed  under subpart (ii) above shall, as soon as possible
     but in no event longer than ninety (90) days of such designation, determine
     the fair  market  value of the  Company as of the date of the event  giving
     rise  to the  purchase  hereunder  and  deliver  its  report  to all of the
     Members.  If the fair market value is to be  determined  by such  appraisal
     method,  then the Class B Members  (collectively)  shall have ten (10) days
     following  receipt  of such  report  to elect  to have a  second  appraisal
     conducted by one of the  remaining  independent  appraisers  designated  on
     Exhibit D. If the Class B Members  (collectively)  exercise such right, the
     second  appraiser  shall,  within  thirty  (30)  days of such  designation,
     determine  the fair market value of the Company as of the date of the event
     which gave rise to the  purchase  hereunder  and  deliver its report to the
     Members.  Any appraiser  designated as provided herein shall, in making its
     determination:  consider  whatever  factors  relating to the Company as its
     deems  necessary or advisable  but shall not take into account any discount
     for lack of  marketability,  minority interest or any other similar factors
     affecting  the Units of the  Members.  The fair market value of the Company
     shall be the  value  determined  by the  appraiser,  if only  one  shall be
     designated,  or  shall  be the  average  of  both  appraisals  if a  second
     appraiser is designated. Each party designating an appraiser shall bear the
     fees and expenses incurred by such appraiser in reaching its determination.

           "Fiscal Year" is defined in Section 7.1(c).

           "Formation Date" is defined in the Recitals.

           "Gathering  Agreement"  means the  Gathering  Agreement  between  the
      Company and Bluestem, to be entered into on or before the Closing Date.

           "Governmental  Authority" (or "Governmental") means a federal, state,
      local or foreign governmental authority; a state, province,  commonwealth,
      territory or district thereof; a county or parish; a city, town, township,
      village or other  municipality;  a district,  ward or other subdivision of
      any of the foregoing;  any executive,  legislative or other governing body
      of any of the foregoing; any agency, authority, board, department, system,
      service, office,  commission,  committee,  council or other administrative
      body of any of the  foregoing;  any court or other  judicial body; and any
      officer, official or other representative of any of the foregoing.

          "Immediate  Family Member" means with respect to an  individual,  such
     individual's spouse, parent, sibling or child, or any trust created for the
     benefit of such individual's spouse, parent, sibling or child.

          "Indemnitee" is defined in Section 6.6(a).

          "Inflation  Index"  means  the  Consumer  Price  Index  for all  Urban
     Consumers published by the Bureau of Labor Statistics of the United States

                                     - 12 -
<PAGE>

     Department of Labor,  all items  (1982-1984 = 100) or any  successor  index
     established by the Bureau of Labor Statistics for that index.

           "Investment Company Act" means the Investment Company Act of 1940, as
      amended.

           "Involuntary Transfer" is defined in Exhibit E.

           "IRS" means the United States Internal Revenue Service.

           "Law" means any applicable  constitutional  provision,  statute, act,
      code  (including  the Code),  law,  regulation,  rule,  ordinance,  order,
      decree, ruling, proclamation, resolution, judgment, decision, declaration,
      or  interpretative  or  advisory  opinion  or  letter  of  a  Governmental
      Authority having valid jurisdiction.

           "Lease" shall have the meaning attributed to such term in the Class A
      Unit Purchase Agreement.

           "Liquidation Date" means the date on which a Dissolution Event arises
      pursuant to Section 9.1.

           "Liquidator"  means the Person or Persons designated to liquidate the
      Company as provided in Section 9.2(a).

           "Make  Whole   Payment"   means  a  payment  to  the  holder  of  the
      Subordinated  Note  equal to the  amount  that,  when  added to all  prior
      payments  under the  Subordinated  Note  (including,  without  limitation,
      payments made under the Subordinated  Note immediately prior to making the
      Make  Whole  Payment,  itself)  equals  150% of the  original  outstanding
      principal balance of the Subordinated Note.

           "Manager" is defined in Section 6.2(a).

           "Management  Agreement"  means that certain  Operating and Management
      Agreement between the Company and Quest Energy Services,  Inc. relating to
      operations and management services to be provided by QES to the Company.

           "Management  Compensation" means the monthly fee and other amounts to
      be paid by the Company to QES for services  rendered and  reimbursement of
      certain costs and expenses under the Management Agreement.

          "Member"  means any Person  executing this Agreement as of the date of
     this Agreement and any Person hereafter admitted to the Company as a Member
     as  provided in this  Agreement,  but such term does not include any Person
     who has ceased to be a Member of the Company.

          "Member  Interest"  means the  ownership  interest  of a Member in the
     Company, and includes any and all benefits to which such Member is entitled
     as

                                     - 13 -
<PAGE>

     provided in this Agreement, together with all obligations of such Member to
     comply with the terms and provisions of this Agreement.

          "Member  Nonrecourse Debt" is defined in Treas. Reg.  ss.1.704-2(b)(4)
     (after substituting the term "member" for "partner").

          "Member   Nonrecourse   Debt  Minimum   Gain"  is  defined  in  Treas.
     Reg.ss.1.704-2(i)(2) (after substituting the term "member" for "partner").

          "Member  Nonrecourse  Deductions"  means  any and all  items  of loss,
     deduction or expenditure  (including,  without limitation,  any expenditure
     described in section 705(a)(2)(B) of the Code) that, in accordance with the
     principles  of  Treas.   Reg.ss.1.704-2(i),   are  attributable  to  Member
     Nonrecourse Debt.

           "Member Vote" means the approval by those Class A Members who, in the
      aggregate,  have a Class A Unit Sharing  Ratio in excess of 50%,  together
      with the approval of those Class B Members who, in the  aggregate,  have a
      Class B Unit Sharing Ratio in excess of 50%.

           "Merger"  means  the  merger  of the  Company  with or into any other
      Person that results in a Change of Control of the Company.

          "Minimum  Gain" means that amount  determined in  accordance  with the
     principles of Treas. Reg.ss.1.704-2(d).

           "Net Agreed Value" means (a) in the case of the Quest Assets,  unless
      otherwise agreed to by a unanimous vote of the Board, the net agreed value
      of the Quest  Assets  contributed  to the Company  under the  Contribution
      Agreement,  (b) in the case of any other Contributed Property,  the Agreed
      Value of such property  reduced by any  liabilities  either assumed by the
      Company upon such  contribution  or to which such property is subject when
      contributed as set forth on Exhibit A, and (c) in the case of any property
      distributed  to a Member by the Company,  the Company's  Carrying Value of
      such  property (as adjusted  pursuant to Section  5.1(e)) at the time such
      property is  distributed,  reduced by any  indebtedness  either assumed by
      such Member upon such distribution or to which such property is subject at
      the time of distribution,  in either case, as determined under section 752
      of the Code.

           "Net Cash Flow"  means,  as of any  Distribution  Date,  all revenues
      (including  revenues from the sale of hydrocarbons and fees collected from
      third  parties  for use of the  Company's  infrastructure)  and other cash
      proceeds received by the Company from any source LESS:

          (a) royalty and other third party lease burdens;

          (b) production taxes and levies;

                                     - 14 -
<PAGE>

           (c) lease operating expenses;

           (d) capital expenditures;

           (e) debt service  obligations to lenders other than the holder of the
      Subordinated Note;

           (f) any reserve funding requirements of the lenders to the Company or
      as otherwise determined by the Board;

           (g) reasonable  working capital  reserves as determined by the Board;
      and

           (h)  any  accrued   Management   Compensation  under  the  Management
      Agreement.

           Notwithstanding  the  foregoing,  "Net Cash Flow" with respect to the
      Quarter in which the  Liquidation  Date occurs and any subsequent  Quarter
      shall equal zero.

           "Net Income" means,  for any Tax Period,  the excess,  if any, of the
      Company's  items of income and gain for such Tax Period over the Company's
      items of loss and deduction for such Tax Period. The items included in the
      calculation  of Net Income shall be determined in accordance  with Section
      5.1(b) and shall not include any items  allocated  under Section 5.2(a) or
      Section 5.2(b).

           "Net Loss"  means,  for any Tax Period,  the  excess,  if any, of the
      Company's  items  of loss and  deduction  for  such  Tax  Period  over the
      Company's items of income and gain for such Tax Period. The items included
      in the  calculation  of Net Loss shall be determined  in  accordance  with
      Section  5.1(b) and shall not include any items  allocated  under  Section
      5.2(a) or Section 5.2(b).

           "Non-Competition   Agreement"  means  the  Non-Competition  Agreement
      (substantially  in the form  attached  hereto as  Exhibit F) to be entered
      into by each of the Members and  certain of their  Affiliates  pursuant to
      which the  parties  will  agree not to  compete  with the  Company  in the
      Cherokee Basin and to pursue and conduct all opportunities in the Cherokee
      Basin only through the Company.

          "Nonconflicted  Member"  means (i) any Class A Member,  to the  extent
     that  either  (1) any of the Class B Members or QRC are or are deemed to be
     in a  Conflict  Circumstance,  (2) any of the Class B  Members  are (or are
     deemed to be) a Conflicted  Member,  or (3) to the extent there is a Change
     of Control of or  Involuntary  Transfer  by QRC or any Class B Member,  and
     (ii) the Class B Members,  to the extent that either (1) any Class A Member
     is (or is deemed to be) a  Conflicted  Member  with  respect  to a Conflict
     Circumstance,  or (2) there is a Change of Control or Involuntary  Transfer
     by the  Class  A  Member  insofar  as any  such  Change  of  Control  of or
     Involuntary  Transfer  by the  Class A Member  occurs  prior  to the  third
     anniversary of the Effective Date.

                                     - 15 -
<PAGE>

           "Nonrecourse  Built-in  Gain" means with  respect to any  Contributed
      Properties or Adjusted Properties that are subject to a mortgage or pledge
      securing a  Nonrecourse  Liability,  the amount of any  taxable  gain that
      would be  allocated  to the  Members  pursuant  to  Section  5.3(e)(i)(B),
      Section  5.3(e)(ii)(B)  and Section  5.3(e)(iii) if such  properties  were
      disposed  of  in a  taxable  transaction  in  full  satisfaction  of  such
      liabilities and for no other consideration.

           "Nonrecourse  Deductions" means any and all items of loss,  deduction
      or expenditures  (described in section  705(a)(2)(B) of the Code) that, in
      accordance  with  the  principles  of  Treas.  Reg.   ss.1.704-2(b),   are
      attributable to a Nonrecourse Liability.

          "Nonrecourse Liability" is defined in Treas. Reg. ss.1.752-1(a)(2).

          "Officers" is defined in Section 6.4(a).

          "Original Agreement" is defined in Recitals.

          "Other Members" means, with respect to the Class A Member, the Class B
     Members and with respect to the Class B Members, the Class A Member.

           "Parent"  means,  with  respect to a Person,  that  Affiliate of such
      Person  that  Controls  such  Person  and is not  Controlled  by any other
      Person.

           "Person"  means  the  meaning   assigned  to  that  term  in  section
      18-101(12) of the Act and also includes a  Governmental  Authority and any
      other entity.

           "Preferential  Rights" shall mean any  preferential  purchase rights,
      rights of first  refusal,  consents  to  assign,  lessor's  approvals,  or
      similar rights.

           "Quarter"  means,  unless the context  requires  otherwise,  a fiscal
      quarter.

           "Quest Assets" shall have the meaning  attributed to such term in the
      Class A Unit Purchase Agreement.

          "Quest Excess Tax Distribution"  shall be determined as of the date of
     each  distribution  under Section 5.4(a) or Section 5.4(b), as the case may
     be,  occurring  closest to the date that QRC makes a  quarterly  payment of
     estimated  federal and state income tax (the "Quest Quarterly Tax Payment")
     and will be equal to the  difference  (but not less than zero)  between (i)
     the sum of the amount of the current  Quest  Quarterly  Tax Payment and the
     amount of all Quest  Quarterly  Tax  Payments  previously  made  during the
     current Fiscal Year and (ii) the sum of the aggregate amount that the Class
     B Members would be distributed  pursuant to Section  5.4(a)(iii) or Section
     5.4(b)(iii), as the case may be, on such date of distribution if the amount
     of the distribution pursuant to Section 5.4(a)(i) or Section 5.4(b)(i),  as
     the  case  may be,  on such  date  was  zero  and the  amount  of all  such
     distributions previously made during the current Fiscal Year to the Class B
     Members;  provided,  that in no event will the sum of (I) the Quest  Excess
     Tax

                                     - 16 -
<PAGE>

     Distribution as of any date and (II) the aggregate  amount that the Class B
     Members would be  distributed  pursuant to Section  5.4(a)(iii)  or Section
     5.4(b)(iii),  as the case may be,  exceed 50  percent of the total Net Cash
     Flow  distributable on such date; and provided further that at such time as
     the  Subordinated  Note has been paid in full and the Class A Member IRR is
     30 percent, the Quest Excess Tax Distribution will thereafter be zero.

           "Quest  Members"  or "Quest  Member" is  defined in the  introductory
      paragraph.

           "QRC" means Quest Resource Corporation, a Nevada corporation.

           "Recapture Income" means any gain recognized by the Company (computed
      without  regard to any  adjustment  required  by section 734 or 743 of the
      Code) upon the disposition of any property or asset of the Company,  which
      gain is  characterized  as  ordinary  income  because  it  represents  the
      recapture of deductions  previously taken with respect to such property or
      asset.

           "Record  Holder"  means the Person in whose name a Unit is registered
      on the books of the Company as of the date of determination.

           "Related  Agreements" means the Contribution  Agreement,  the Class A
      Unit Purchase Agreement,  the Management Agreement,  the Subordinated Note
      Agreement,  Non-Competition  Agreement,  Gathering Agreement and any other
      agreement  contemplated  by the foregoing  agreements to which the Company
      and a Member or any  Affiliate  of a Member  are  parties,  as all of such
      agreements may be amended from time to time after the Closing Date.

           "Required  Allocation" means any allocation (or limitation imposed on
      an allocation) of an item of income,  gain,  deduction or loss pursuant to
      Sections  5.2(a),  5.2(d)(i),  5.2(d)(ii),   5.2(d)(iii),  5.2(d)(vi)  and
      5.2(d)(viii).

           "Residual Gain" or "Residual Loss" means any item of gain or loss, as
      the case may be, of the Company recognized for federal income tax purposes
      resulting  from a sale,  exchange,  or other  disposition of a Contributed
      Property or Adjusted Property,  to the extent such item of gain or loss is
      not allocated pursuant to Section 5.3(e)(i)(B) or Section 5.3(e)(ii)(B) to
      eliminate Book-Tax Disparities.

           "Senior Debt" shall mean all principal, interest (including,  without
      limitation,  interest  accruing  after the filing or  commencement  of any
      insolvency  or bankruptcy  proceeding,  whether or not an allowed claim in
      such  proceeding),  fees,  expenses,  indemnities  and other charges,  now
      existing or  hereafter  arising  under or with  respect to the Senior Debt
      Documents.

          "Senior  Debt  Documents"  shall  mean  any  credit  agreement,  note,
     indenture, lease or other agreements, mortgages or instruments by which the
     Company has received  financing that, either by its terms or pursuant to an
     agreement with the holder of the  Subordinated  Note, is senior in right of
     payment

                                     - 17 -
<PAGE>

     to the Subordinated Debt, as any of the foregoing may be amended,  restated
     or supplemented from time to time.

           "Sharing  Ratios"  means (i) 30  percent  to the  Class A Members  in
      proportion  to their  respective  Class A Unit Sharing  Ratios and (ii) 70
      percent to the Class B Members in proportion to their  respective  Class B
      Unit Sharing Ratios.

           "Simulated   Basis"  means  the  Carrying  Value  of  any  Depletable
      Property.

           "Simulated  Depletion"  means  a  depletion  allowance  computed  (in
      accordance  with federal income tax principles) for each taxable year with
      respect to each Depletable Property using the cost (not percentage) method
      of depletion under Treas. Reg. ss.1.704-1(b)(2)(iv)(k)(2). For purposes of
      computing Simulated  Depletion with respect to any property,  the Carrying
      Value of such property  shall be deemed to be the Simulated  Basis in such
      property and in no event shall such  allowance,  in the aggregate,  exceed
      such Simulated Basis.  Solely for purposes of this calculation,  remaining
      reserves shall be as determined consistently by the TMM as approved by the
      Board.

           "Simulated Gain"  attributable to a Depletable  Property means,  upon
      the sale or other  taxable  disposition  of a  Depletable  Property by the
      Company,  the excess,  if any, of the amount realized from the disposition
      over the Simulated Basis of such property,  as theretofore  adjusted.  For
      these  purposes,  Simulated  Gains shall be computed  in  accordance  with
      Treas.  Reg.  ss.1.704-1(b)(2)(iv)(k)(2)  applying  cost (not  percentage)
      depletion.

           "Simulated Loss"  attributable to a Depletable  Property means,  upon
      the sale or other  taxable  disposition  of a  Depletable  Property by the
      Company,  the excess, if any, of the Simulated Basis of such property,  as
      theretofore   adjusted,   over  the  amount  realized  from  the  sale  or
      disposition.  For these  purposes,  Simulated  Losses shall be computed in
      accordance with Treas. Reg.  ss.1.704-1(b)(2)(iv)(k)(2) applying cost (not
      percentage) depletion.

           "Specified  Price" means,  for purposes of Exhibit E and with respect
      to a particular  Member,  the amount equal to the  hypothetical  aggregate
      distributions  such Member would  receive if all Company  Assets were sold
      for cash equal to their Fair Market Value,  all Company  liabilities  were
      satisfied to the extent  required by their terms  (limited with respect to
      any Nonrecourse  Liability or Member  Nonrecourse Debt, to the Fair Market
      Value of the assets securing each such liability),  and all remaining cash
      and other assets were  distributed in full to the Members  pursuant to the
      provisions of Section 5.4.

          "Specified Price Per Class A Unit" means the aggregate Specified Price
     for all Class A Members  divided by the total  number of Class A Units that
     are issued and  outstanding  (on a fully  diluted  basis) as of the date of
     determination.

                                     - 18 -
<PAGE>

           "Specified  Price Per Class B Unit"  means  the  aggregate  Specified
      Price for all Class B Members divided by the total number of Class B Units
      that are issued and  outstanding (on a fully diluted basis) as of the date
      of determination.

           "Specified  Price Per Unit" means,  with respect to any Class A Units
      or the Class B Units to be sold  under  Sections  1.4 or 1.5 of Exhibit E,
      the  Specified  Price Per Class A Units (with respect to Class A Units) or
      the Specified  Price Per Class B Unit (with respect to Class B Units),  as
      the case may be.

           "Subordinated  Debt" shall mean all principal,  interest  (including,
      without limitation,  interest accruing after the filing or commencement of
      any insolvency or bankruptcy  proceeding,  whether or not an allowed claim
      in such proceeding),  fees,  expenses,  indemnities and other charges, now
      existing or hereafter  arising  under or with respect to the  Subordinated
      Note.

           "Subordinated  Note" (whether one or more) means the 15 percent notes
      issued  by the  Company  pursuant  to the terms of the  Subordinated  Note
      Agreement.

           "Subordinated Note Agreement" means the Note Purchase Agreement dated
      as of December 22, 2003, as amended, restated or supplemented from time to
      time.

           "Subsidiary"  means, as to any Person,  (a) any corporation more than
      50  percent  of whose  stock of any class or  classes  having by the terms
      thereof ordinary voting power to elect a majority of the directors of such
      corporation (irrespective of whether or not at the time stock of any class
      or classes of such  corporation  shall have or might have voting  power by
      reason of the happening of any  contingency)  is at the time owned by such
      Person and/or one or more  Subsidiaries of such Person and (b) any limited
      liability  company,  partnership,   limited  partnership,  joint  venture,
      unincorporated association or other entity in which such Person and/or one
      or more  Subsidiaries  of such  Person has more than a 50  percent  equity
      interest at the time or has the power or authority,  through  ownership of
      voting securities,  by contract or otherwise, to exercise Control over the
      business affairs of the entity.

          "Target Capital Account" means,  with respect to any Member, an amount
     equal to the  hypothetical  distributions  such Member would receive if all
     Company  Assets not sold as provided  in Section  9.2(a) were sold for cash
     equal to their Fair Market Value, all Company liabilities were satisfied to
     the  extent  required  by  their  terms  (limited,   with  respect  to  any
     Nonrecourse  Liability or Member Nonrecourse Debt, to the Fair Market Value
     of the assets securing each such  liability) and the remaining  assets were
     distributed  in full to the Members  pursuant to Section 5.4 without regard
     to Section 5.4(a)(i) or Section 5.4(b)(i).

          "Tax Distribution Balance" means, as of any date of determination, the
     difference between (i) the total aggregate  distributions made to the Class
     B

                                     - 19 -
<PAGE>

     Members  pursuant to Section  5.4(a)(i) and Section  5.4(b)(i) and (ii) the
     total  aggregate   payments  or  distributions  made  pursuant  to  Section
     5.4(a)(ii) and Section 5.4(b)(ii).

           "Tax Matters Member" or "TMM" is defined in Section 7.3.

           "Tax Period"  means the taxable year (or any other  relevant  taxable
      period) of the Company for federal income tax purposes.

           "Term" is defined in Section 2.6.
                                -----------

           "Third  Party"  means any  Person  other  than a Member or any of its
      Wholly-Owned Subsidiaries.

           "Transfer"  means a sale,  assignment,  conveyance,  gift,  exchange,
      disposition, pledge, hypothecation or other transfer, whether voluntary or
      involuntary, by operation of law or otherwise.

           "Transfer  Restrictions"  means the restrictions and other provisions
      relating to the  Transfer of Units set forth on Exhibit E attached  hereto
      and set forth in any other provisions in this Agreement.

          "Treasury   Regulations"  or  "Treas.   Reg."  means  the  Income  Tax
     Regulations promulgated under the Code.

           "Unit"   means  a  Member   Interest  of  a  Member  in  the  Company
      representing a fractional part of the Member  Interests of all Members and
      shall consist of Class A Units and Class B Units.

           "Unrealized Gain"  attributable to any Company Asset means, as of any
      date of determination, the excess, if any, of (a) the fair market value of
      such  property  as of such date (as  determined  under  Section  5.1(d) or
      Section  5.1(e)),  over (b) the Carrying Value of such property as of such
      date (prior to any  adjustment  to be made  pursuant to Section  5.1(d) or
      Section 5.1(e) as of such date).

           "Unrealized Loss"  attributable to any Company Asset means, as of any
      date of  determination,  the excess,  if any, of (a) the Carrying Value of
      such property as of such date (prior to any adjustment to be made pursuant
      to  Section  5.1(d) or  Section  5.1(e) as of such date) over (b) the fair
      market value of such property as of such date (as determined under Section
      5.1(d) or Section 5.1(e)).

           "U.S.  GAAP" means  generally  accepted  accounting  principles as in
      effect in the United States of America on the applicable date.

           "Wholly-Owned  Subsidiary"  means an entity  in which  the  Person in
      question  owns or controls  80% or more of the voting  securities  of such
      entity.

                                     - 20 -
<PAGE>

     Other terms defined herein have the meanings so given them.

     1.2 Construction. Unless the context requires otherwise: (a) the gender (or
lack of gender)  of all words used in this  Agreement  includes  the  masculine,
feminine,  and neuter;  (b) the term  "include" or "includes"  means  "includes,
without limitation," and "including" means "including,  without limitation"; (c)
references  to Articles  and  Sections  refer to Articles  and  Sections of this
Agreement;  (d)  references to Exhibits  refer to the Exhibits  attached to this
Agreement, which are made a part hereof for all purposes; (e) references to Laws
refer to such Laws as they may be amended from time to time,  and  references to
particular  provisions  of a Law include  any  corresponding  provisions  of any
succeeding  Law;  and (f)  references  to money  refer to legal  currency of the
United States of America.

                                   ARTICLE 2
                                 ORGANIZATION

     2.1  Formation; Continuation; Amendment and Restatement. The Members ratify
the organization and formation of the Company and continue the Company, pursuant
to the terms  and  conditions  of this  Agreement.  This  Agreement  amends  and
restates in its entirety and supersedes the Original Agreement, which shall have
no further  force or effect from and after the  Effective  Date.  The rights and
liabilities  of the Members  shall be as  provided in the Act,  except as may be
expressly provided otherwise in this Agreement.

     2.2   Name. The name of the Company shall  continue to be "Quest  Cherokee,
LLC," and all  Company  business  must be  conducted  in that name or such other
names that comply with Law as the Board selects.

     2.3  Registered  Office; Registered Agent; Principal Office; Other Offices.
The registered office of the Company required by the Act to be maintained in the
State of Delaware shall be the office of the initial  registered  agent named in
the  Delaware  Certificate  or such other  office  (which need not be a place of
business of the Company) as the Board may  designate  in the manner  provided by
Law. The  registered  agent of the Company in the State of Delaware shall be the
initial registered agent named in the Delaware  Certificate or such other Person
or  Persons  as the Board may  designate  in the  manner  provided  by Law.  The
principal  office  of the  Company  in the  United  States  shall  be at 5901 N.
Western,  Suite 200, Oklahoma City, Oklahoma,  or at such place as the Board may
designate,  which may but need not be in the State of Delaware,  and the Company
shall maintain records there or at such other place as the Board shall designate
and shall keep the street  address of such  principal  office at the  registered
office of the Company in the State of Delaware.  The Company may have such other
offices as the Board designates.

     2.4  Purposes. The purposes of the Company are (a) to own,  hold,  sell and
otherwise  deal  with  all  Company  Assets  and  all  liabilities   related  or
attributable  thereto,  all pursuant to and in accordance with the provisions of
this  Agreement,  (b) to engage  directly  in, or  entering  into or forming any
corporation,  partnership,  joint venture,  limited  liability  company or other
arrangement  to engage  directly in, any business  activity  that the Company is
permitted  to  engage  in  by  this  Agreement  and,  in  connection  therewith,
exercising all of the rights and powers

                                     - 21 -
<PAGE>

conferred upon the Company pursuant to the agreements  relating to such business
activity, (c) engaging directly in, or entering into or forming any corporation,
partnership,  joint venture,  limited  liability company or other arrangement to
engage  indirectly  in, any  business  activity  that is  approved  by the Board
pursuant to the provisions of Article 6 and which lawfully may be conducted by a
limited  liability  company  pursuant to the Act and, in  connection  therewith,
exercising all of the rights and powers  conferred upon the Company  pursuant to
the  agreements  relating  to  such  business  activity,  and  (d)  engaging  in
activities  incidental or reasonably  related to,  resulting  from, or otherwise
necessary  or  convenient  to  facilitate,  the  activities  referred  to in the
foregoing clauses (a) through (c);  provided,  that all of such activities shall
be  undertaken  only in the  Cherokee  Basin  unless the Board  shall  determine
otherwise.

     2.5   Foreign Qualification.  Prior to the Company's conducting business in
any  jurisdiction  other than the State of  Delaware,  the Board shall cause the
Company to comply,  to the extent procedures are available and those matters are
reasonably within the control of the Board,  with all requirements  necessary to
qualify the Company as a foreign limited liability company in that jurisdiction.
At the request of the Board,  each Member shall execute,  acknowledge,  swear to
and  deliver  all  certificates  and  other  instruments  conforming  with  this
Agreement that are necessary or  appropriate to qualify,  continue and terminate
the Company as a foreign limited liability company in all such  jurisdictions in
which the Company may conduct business.

     2.6   Term.  The period of  existence of the Company (the "Term") commenced
on  the  Formation  Date  and  shall  end  at  such  time  as a  certificate  of
cancellation  is filed with the  Secretary  of State of the State of Delaware in
accordance  with Section 9.3.  Notwithstanding  the  foregoing,  the term of the
Company shall not end prior to December 31, 2010, unless  unanimously  agreed to
by the Members.

     2.7  Powers.  The  Company is  empowered  to do any and all acts and things
necessary,  appropriate,  proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described in Section
2.4 and for the protection and benefit of the Company.

     2.8  Bluestem  Contributions.  The Company has formed,  and owns all of the
membership  interests of,  Bluestem.  Initially,  Bluestem  will acquire,  hold,
operate and dispose of certain gathering systems,  gathering pipelines,  related
rights of way and easements,  and related contracts and interests (collectively,
"Gathering  Assets),  subject to the other  provisions  of this  Agreement.  The
Members agree that any  Gathering  Assets which are either (i) part of the Quest
Assets,  or (ii) part of the  assets  acquired  (or to be  acquired)  by Company
pursuant to that  Purchase  and Sale  Agreement  dated as of  December  10, 2003
between  Devon Energy  Production  Company,  L.P.  and Tall Grass Gas  Services,
L.L.C.,  as  sellers,  and QRC, as buyer  ("Devon  PSA") (QRC has  assigned  its
interest in the Devon PSA to the Company),  shall be contributed and assigned by
the Company to  Bluestem.  On or before the Closing  Date,  Company  shall cause
Bluestem to enter into the  Gathering  Agreement,  where  Bluestem will agree to
provide gathering  services with respect to oil and gas properties  constituting
the Company Assets.

                                     - 22 -
<PAGE>

                                   ARTICLE 3
                       AUTHORIZED UNITS; RIGHTS OF MEMBERS

     3.1   Authorized Number of Units.

     (a)  The aggregate  number of Units that the Company is authorized to issue
is the total number of Units consisting of the following classes:

          (i) the Company  shall be  authorized to issue 10,000 Class A Units of
     Member Interest ("Class A Units"), and

          (ii) the Company  shall be authorized to issue 10,000 Class B Units of
     Member Interest ("Class B Units").

     (b)  The rights of the  holders  of the Class A Units and the Class B Units
shall be as expressly provided in this Agreement.

     3.2  Personal Property. A Member's Units shall be personal property for all
purposes.

     3.3  Certificates. Upon the Company's issuance of Units to any Person as of
or  after  the date of this  Agreement,  the  Company  shall  issue  one or more
Certificates  in the name of such  Person  evidencing  the  number of such Units
being so issued.  Certificates shall be executed on behalf of the Company by the
President and Chief Executive Officer or any Vice President and the Secretary or
any Assistant Secretary of the Company.

     The Company  hereby  irrevocably  elects that all  interests in the Company
shall be  securities  governed by Article 8 of the Uniform  Commercial  Code and
shall be evidenced by certificates.  Each  certificate  shall bear the following
legend:  "This  certificate  evidences a membership  interest in the Company and
shall be a security for purposes of Article 8 of the Uniform  Commercial Code as
in effect in the State of  Delaware."  The  certificated  interests  shall be in
registered form within the meaning of Article 8 of the Uniform  Commercial Code.
The  purpose  and intent of this  Section  3.3,  and the  certificates  of units
evidencing Membership Interests,  shall be to evidence Membership Interests that
are  governed  by Article 8 of the Uniform  Commercial  Code but shall not be to
affect,  impair, expand, alter, or diminish the distributions or allocations set
forth in this Agreement or any other provision  contained in this Agreement that
relates to income, profits,  losses, voting or the rights and obligations of the
Members or the Company under this Agreement.  Each  certificate  shall also bear
such  other  legends  as  required  in this  Agreement  or in Exhibit E attached
hereto.

     3.4  Mutilated, Destroyed, Lost or Stolen Certificates.

     (a) If any  mutilated  Certificate  is  surrendered  to  the  Company,  the
appropriate  officers of the Company  shall  execute  and  deliver,  in exchange
therefor, a new Certificate  evidencing the same number and type of Units as the
Certificate so surrendered.

     (b) The appropriate officers of the Company shall execute and deliver a new
Certificate in place of any Certificate  previously  issued if the Record Holder
of the Certificate:

                                     - 23 -
<PAGE>

          (i) makes proof by affidavit,  in form and substance  satisfactory  to
     the Company,  that a previously issued Certificate has been lost, destroyed
     or stolen;

          (ii) requests the issuance of a new Certificate before the Company has
     notice that the  Certificate  has been acquired by a purchaser for value in
     good faith and without notice of an adverse claim;

          (iii) if requested by the Company,  delivers to the Company a bond, in
     form and substance satisfactory to the Company, with surety or sureties and
     with fixed or open  penalty as the Company may  reasonably  direct,  in its
     sole  discretion,  to indemnify  the Company  against any claim that may be
     made  on  account  of  the  alleged  loss,  destruction  or  theft  of  the
     Certificate; and

          (iv) satisfies any other reasonable requirements imposed by the Board.

     If a Member fails to notify the Company  within a reasonable  time after it
has notice of the loss, destruction or theft of a Certificate, and a transfer of
the Member  Interests  represented by the  Certificate is registered  before the
Company  receives such  notification,  the Member shall be precluded from making
any claim against the Company for such transfer or for a new Certificate.

     (c)  As a condition  to the  issuance  of any new  Certificate  under  this
Section  3.4, the Company may require the payment of a sum  sufficient  to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses reasonably connected therewith.

     3.5  Record Holders.  The Company shall be entitled to recognize the Record
Holder as the Member with respect to any Member Interest and, accordingly, shall
not be bound to  recognize  any  equitable or other claim to or interest in such
Member  Interest  on the part of any other  Person,  regardless  of whether  the
Company shall have actual or other notice thereof,  except as otherwise provided
by Applicable Law.

     3.6  Liability of Members to Third Parties; Relationship  between  Members.
No Member  shall be liable  for the debts,  obligations  or  liabilities  of the
Company solely by virtue of its status as a Member of the Company. Except as may
be expressly  provided in another separate,  written guaranty or other agreement
executed by a Member,  no Member shall be liable for the debts,  obligations  or
liabilities  of the Company,  including  under a judgment,  decree or order of a
court.  Except as  otherwise  provided  in this  Agreement,  no  Member  has the
authority  or power to act for or on behalf of or bind the  Company  or to incur
any  expenditures  on behalf of the Company.  This Agreement shall not be deemed
for any  purpose to create a general  partnership,  limited  partnership,  joint
venture or any other  similar  relationship  among the Members,  and the Members
intend that no Member be a partner of any other  Member for any  purposes  other
than  federal  and  state tax  purposes.  Each  Member,  to the  fullest  extent
permitted by Applicable Law,  expressly waives any fiduciary duty that any other
Member may owe to such Member under Applicable Law or otherwise.

     3.7  Access to Information.  The  Company  shall be required to provide any
information  that a  Member  may  reasonably  request  concerning  the  Company;
provided,

                                     - 24 -
<PAGE>

however,  that this Section 3.7 shall not obligate (a) the Company or any Member
to  create  any  information  that  does not  already  exist at the time of such
request (other than to convert existing  information from one medium to another,
such as  providing  a  printout  of  information  that is stored  in a  computer
database)  or (b) any Member to  disclose  (i) its tax or  accounting  practices
relating  to its  ownership  or  transfer  of its  Units  or (ii)  its  business
activities  other than activities  undertaken  pursuant to this  Agreement,  the
Contribution  Agreement,  the Class A Unit Purchase Agreement,  or other than as
may be  necessary to disclose in order to confirm or enforce the  provisions  of
the  Non-Competition  Agreement.  Each  Member  shall also have the right,  upon
reasonable  notice,  and at all reasonable  times during usual business hours to
inspect the assets of the  Company and to audit,  examine and make copies of the
books of account and other  records of the Company.  Such right may be exercised
through any agent or employee of such Member  designated  in writing by it or by
an independent  public  accountant,  attorney or other consultant so designated.
The Member making the request shall bear all costs and expenses  incurred in any
inspection, examination or audit made on such Member's behalf.

                                   ARTICLE 4
                              CAPITAL CONTRIBUTIONS

     4.1   Capital Contributions.

     (a)   On the Closing Date, CPL has contributed to the Company, as a Capital
Contribution,  subject to and in accordance with the terms and provisions of the
Class A Unit  Purchase  Agreement,  cash in the  amount set forth in the Class A
Unit  Purchase  Agreement  in  exchange  for all the number of Class A Units set
forth opposite its name on Exhibit A attached  hereto,  such Class A Units to be
subject to all of the terms, provisions and conditions of this Agreement.

     (b)   The Quest Members have, on or prior  to the Closing Date, contributed
to the Company, as a Capital Contribution, subject to and in accordance with the
terms and provisions of the Contribution Agreement and the Class A Unit Purchase
Agreement,  all of the assets  described in the  Contribution  Agreement and the
Class A Unit  Purchase  Agreement  in exchange for  membership  interests in the
Company.  Effective as of the Closing Date, all such  membership  interests have
been  converted  into the number of Class B Units set forth  opposite each Quest
Member's name on Exhibit A attached hereto,  such Class B Units to be subject to
all of the terms, provisions and conditions of this Agreement.

     (c)   Except as otherwise  required  by this  Agreement  or in the Act, the
Capital  Contributions  referred to in Section  4.1(a) and Section  4.1(b) shall
constitute  the full  obligation of the  respective  Members to furnish funds or
property to the Company,  and no  additional  funds or other  property  shall be
required of any Member.  No Member  shall have the right to make any  additional
Capital Contributions.

     (d)   All  Member Interests  issued  to the  Members  pursuant  to,  and in
accordance  with the  requirements  of,  this  Article 4 shall be fully paid and
non-assessable  Member  Interests,  except  as  such  non-assessability  may  be
affected by section 18-607 of the Act.

                                     - 25 -
<PAGE>

     4.2   No Interest or Withdrawal.  No interest shall be paid by the  Company
on Capital  Contributions or on balances in Capital Accounts. No Member shall be
entitled to withdraw any part of its Capital Contribution or its Capital Account
or to receive any distributions  from the Company,  except as expressly provided
in this  Agreement.  A Member  shall not be required to  contribute  any cash or
property  to the Company to enable the  Company to return any  Member's  Capital
Contribution.

     4.3  Title to  Company  Assets.  Title to  Company  Assets,  whether  real,
personal or mixed and  whether  tangible  or  intangible,  shall be deemed to be
owned by the  Company as an entity,  and no Manager or Member,  individually  or
collectively,  shall have any ownership  interest in such Company  Assets or any
portion thereof.

     4.4  Creditors  of the Company.  Except for the holder of the  Subordinated
Note,  no  creditor of the  Company  will have or shall  acquire at any time any
direct or indirect  interest in the profits,  capital or property of the Company
other than the security  interest of a secured  creditor as a result of making a
loan to the Company or the security  interests  granted to the Class A Member in
accordance  with  the  terms  of the  Class A Unit  Purchase  Agreement  (or any
security  agreement or pledge agreement executed in connection  therewith),  and
the Company  and/or  Member(s)  executing and delivering  security  documents to
evidence such security interest.

                                   ARTICLE 5
                CAPITAL ACCOUNTS, ALLOCATIONS AND DISTRIBUTIONS

     5.1   Capital Accounts.

     (a) The Company  shall  establish  and  maintain for each Member a separate
Capital  Account  in  accordance  with the  rules of Treas.  Reg.  ss.1.704-1(b)
(2)(iv).  Such Capital  Account shall be increased by (i) the cash amount or Net
Agreed Value of all Capital  Contributions made or deemed made to the Company by
that Member pursuant to this Agreement, and (ii) all items of Company income and
gain  (including  income and gain exempt from tax) computed in  accordance  with
Section  5.1(b) and  allocated  to that  Member  pursuant  to Section  5.2,  and
decreased by (x) the amount of cash or Net Agreed Value of all actual and deemed
distributions of cash or property made to that Member pursuant to this Agreement
and (y) all items of Company  deduction  and loss  computed in  accordance  with
Section  5.1(b) and  allocated  to that Member  pursuant to Section 5.2. The Net
Agreed Value of the Capital  Contributions made by each Member on the respective
dates of such Capital  Contributions  pursuant to Section 4.1 shall be set forth
on Exhibit A; provided, however, that in the event that any property contributed
by a Quest Member becomes a Defect  Property,  as provided in Section 5.9 below,
and the Company is not  indemnified  in whole or in part for such Defect  Value,
then the Net Agreed Value of such Defect Property shall be reduced by the amount
of the Defect Value for which the Company was not indemnified.

     (b) For purposes of computing the amount of any item of income, gain, loss,
or  deduction  to  be  reflected   in  the  Members'   Capital   Accounts,   the
determination, recognition, and

                                     - 26 -
<PAGE>

classification  of any  such  item  shall  be  the  same  as its  determination,
recognition,  and classification for federal income tax purposes  (including any
method or methods of depreciation,  cost recovery, or amortization used for that
purpose), provided that:

          (i)  Except  as   otherwise   provided  in  Treas.   Reg.ss.1.704-1(b)
     (2)(iv)(m),  the  computation  of all  items  of  income,  gain,  loss  and
     deduction shall be made without regard to any election under section 754 of
     the Code which may be made by the Company and, as to those items  described
     in section  705(a)(1)(B) or 705(a)(2)(B) of the Code, without regard to the
     fact that such  items are not  includable  in gross  income or are  neither
     currently  deductible nor capitalized  for federal income tax purposes.  To
     the extent an  adjustment  to the adjusted  tax basis of any Company  Asset
     pursuant to section  734(b) or 743(b) of the Code is required,  pursuant to
     Treas.   Reg.   ss.1.704-1(b)(2)(iv)(m),   to  be  taken  into  account  in
     determining Capital Accounts,  the amount of such adjustment in the Capital
     Accounts shall be treated as an item of gain or loss.

          (ii) Any income, gain, or loss attributable to the taxable disposition
     of any Company Assets other than a Depletable  Property shall be determined
     as if the adjusted  basis of such  property as of such date of  disposition
     was equal in amount to the  Company's  Carrying  Value with respect to such
     property as of such date.

          (iii) In accordance  with the  requirements  of section  704(b) of the
     Code, any  deductions for  depreciation,  cost  recovery,  or  amortization
     attributable  to any  Contributed  Property  shall be  determined as if the
     adjusted  basis of such property on the date it was acquired by the Company
     was equal to the Agreed Value of such property. Upon an adjustment pursuant
     to Section  5.1(d) or Section  5.1(e) to the Carrying  Value of any Company
     Asset subject to depreciation,  cost recovery, or amortization, any further
     deductions  for  such   depreciation,   cost  recovery,   or   amortization
     attributable  to such property  shall be determined  (x) as if the adjusted
     basis of such  property was initially  equal to the Carrying  Value of such
     property  immediately  following such  adjustment,  and (y) using a rate of
     depreciation,  cost recovery,  or amortization derived from the same method
     and useful  life (or,  if  applicable,  the  remaining  useful  life) as is
     applied for federal income tax purposes;  provided that, if the asset has a
     zero adjusted  basis for federal  income tax purposes,  depreciation,  cost
     recovery,  or  amortization   deductions  shall  be  determined  using  any
     reasonable method that the Board may adopt.

          (iv)  Simulated  Depletion  with respect to each  Depletable  Property
     shall be  allocated  among the  Members,  and shall  reduce  each  Member's
     Capital  Account,  in the same  proportion  that  such  Members  (or  their
     predecessors  in interest)  were  allocated  the adjusted tax basis of such
     property as provided in Section 5.3(b).

          (v) Any  Simulated  Gain shall be  allocated  to the Members and shall
     increase their Capital  Accounts in the same manner as the amount  realized
     in excess of  Simulated  Basis from such  disposition  is  allocated to the
     Members under Section 5.3(d).  Any Simulated Loss shall be allocated to the
     Members and shall reduce their Capital Accounts in the same proportion that
     such  Members  (or  their   predecessors-in-interest)  were  allocated  the
     adjusted tax basis of such property as provided in Section 5.3(b).

                                     - 27 -
<PAGE>

     (c)  An assignee of a Member  Interest,  upon  admission as a Member, shall
succeed to a pro rata portion of the Capital Account of the transferring  Member
relating to the Member Interest so transferred.

     (d) Consistent with the provisions of Treas.  Reg. ss.1.704-1(b)(2)(iv)(f),
on an issuance of additional  Member Interests for cash or Contributed  Property
other than pursuant to Section 4.1, the Capital  Accounts of the Members and the
Carrying Value of all Company Assets immediately prior to such issuance shall be
adjusted  upward or downward to reflect any Unrealized  Gain or Unrealized  Loss
attributable  to such Company  Assets,  as if such Unrealized Gain or Unrealized
Loss had been recognized on a sale of such properties  immediately prior to such
contribution  for an amount equal to its fair market value.  Any Unrealized Gain
or  Unrealized  Loss  attributable  to such  property  shall be allocated in the
manner  set  forth in  Section  5.2.  In  determining  such  Unrealized  Gain or
Unrealized  Loss, the aggregate cash amount and fair market value of all Company
Assets (including cash or cash equivalents) immediately prior to the issuance of
additional  Member  Interests  shall  be  determined  by the  Board  using  such
reasonable method of valuation as it may adopt.

     (e) In accordance  with Treas.  Reg.  ss.1.704-1(b)(2)(iv)(f),  immediately
prior to any  actual or deemed  distribution  to a Member of any  Company  Asset
(other than a distribution  of cash that is not in redemption or retirement of a
Member Interest),  the Capital Accounts of all Members and the Carrying Value of
all  Company  Assets  shall be  adjusted  upward  or  downward  to  reflect  any
Unrealized  Gain or Unrealized Loss  attributable to such Company Assets,  as if
such  Unrealized  Gain or Unrealized  Loss had been recognized on a sale of such
properties  immediately  prior to such  distribution  for an amount equal to its
fair market value.  Any Unrealized Gain or Unrealized Loss  attributable to such
property  shall be  allocated in the same manner as set forth in Section 5.2. In
determining  such  Unrealized  Gain or Unrealized Loss the aggregate cash amount
and fair market value of all Company Assets (including cash or cash equivalents)
immediately prior to a distribution  shall be determined and allocated among the
assets by the Board using such reasonable method of valuation as it may adopt.

     5.2 Allocations for Capital Account  Purposes.  For purposes of maintaining
the  Capital  Accounts  and in  determining  the  rights  of the  Members  among
themselves, Net Income or Net Loss, and all other items of Company income, gain,
loss, and deduction ("book" items),  for any Tax Period shall be allocated among
the Members as follows:

     (a)  General.  Except as  provided  in Section  5.2(b),  Section  5.2(c) or
Section 5.2(d), (i) Net Income or Net Loss with respect to a Tax Period shall be
allocated  30  percent  to the  Class A Member  and 70  percent  to the  Class B
Members,  in proportion to their  respective  Class B Sharing Ratios;  provided,
however,  that Net Loss shall not be  allocated  to a Member if such  allocation
would  cause a Member to have or  increase  a deficit  balance  in its  Adjusted
Capital  Account at a time when any other  Member has a positive  balance in its
Adjusted  Capital  Account.  Such Net Losses shall  instead be allocated to each
Member with a positive  balance in its Adjusted Capital Account in proportion to
such balances.

                                     - 28 -
<PAGE>

     (b)  Allocations of Income with Respect to a Defect Property Loss.

          (i)  Notwithstanding  the  foregoing,  in the  event  that the Class A
     Member  receives  during any Fiscal Year one or more Defect  Property  Loss
     Distributions  pursuant  to  Section  5.4(c),  the  Class A Member  will be
     allocated  an amount  of income  for such  Fiscal  Year  equal to the total
     Defect Property Loss Distributions  received by the Class A Member pursuant
     to Section 5.4(c) for such Fiscal Year.

          (ii) In the event  that the  Company  is  required  to pay the Class A
     Member or any of its Affiliates  for an  indemnified  loss under any of the
     Related Agreements,  such loss will be deemed made as a payment made to the
     Class A Member other than in its capacity as a Member and the deduction for
     such payment  will be specially  allocated to and borne by the Quest Member
     to which such loss relates.

     (c)  Allocations  Following a  Dissolution  Event.  Following a Dissolution
Event,  all items of income,  gain,  loss and deduction shall be allocated among
the Members so as to cause the Capital Account of each Member to be equal to its
Target Capital Account.

     (d)  Special  Allocations.  Notwithstanding  any  other  provision  of this
Section  5.2,  the  following  special  allocations  shall  be made for such Tax
Period:

          (i) Minimum Gain  Chargeback.  Notwithstanding  any other provision of
     this Section 5.2, if there is a net decrease in Minimum Gain during any Tax
     Period, each Member shall be allocated items of Company income and gain for
     such Tax Period (and, if necessary,  subsequent  Tax Periods) in the manner
     and amounts provided in Treas. Reg. ss.ss.1.704-2(f)(6),  1.704-2(g)(2) and
     1.704-2(j)(2)(i),  or any successor provision. For purposes of this Section
     5.2(d)(i),   each  Member's  Adjusted  Capital  Account  balance  shall  be
     determined,  and the allocation of income or gain required  hereunder shall
     be effected,  prior to the application of any other allocations pursuant to
     this  Section  5.2(d)(i)  with  respect to such Tax Period  (other  than an
     allocation  pursuant to Section  5.2(d)(v)  and Section  5.2(d)(vi)).  This
     Section  5.2(d)(i) is intended to comply with the Minimum  Gain  Chargeback
     requirement   in  Treas.   Reg.ss.1.704-2(f)   and  shall  be   interpreted
     consistently therewith.

          (ii)   Chargeback   of   Member   Nonrecourse   Debt   Minimum   Gain.
     Notwithstanding  the other  provisions  of this  Section  5.2  (other  than
     Section 5.2(d)(i)), except as provided in Treas. Reg. ss.1.704-2(i)(4),  if
     there is a net decrease in Member  Nonrecourse Debt Minimum Gain during any
     Tax Period, any Member with a share of Member Nonrecourse Debt Minimum Gain
     at the  beginning of such Tax Period  shall be  allocated  items of Company
     income and gain for such period (and, if necessary,  subsequent periods) in
     the manner and amounts  provided  in Treas.  Reg.  ss.ss.1.704-2(i)(4)  and
     1.704-2(j)(2)(ii),  or any  successor  provisions.  For  purposes  of  this
     Section 5.2(d)(ii), each Member's Adjusted Capital Account balance shall be
     determined,  and the allocation of income or gain required  hereunder shall
     be effected,  prior to the application of any other allocations pursuant to
     this Section  5.2(d)(ii),  other than Section  5.2(d)(i)  and other than an
     allocation  pursuant  to Section  5.2(d)(v)  and Section  5.2(d)(vi),  with
     respect to such Tax Period.  This Section  5.2(d)(ii) is intended to comply
     with the chargeback of

                                     - 29 -
<PAGE>

     items of income and gain requirement in Treas.  Reg.  ss.1.704-2(i)(4)  and
     shall be interpreted consistently therewith.

          (iii) Qualified Income Offset. If any Member unexpectedly receives any
     adjustments,   allocations,  or  distributions  described  in  Treas.  Reg.
     ss.ss.1.704-1(b)(2)(ii)(d)(4),  1.704-1(b)(2)(ii)(d)(5),  or  1.704-1(b)(2)
     (ii)(d)(6),  items of Company income and gain shall be specially  allocated
     to such  Member in an amount and manner  sufficient  to  eliminate,  to the
     extent  required by the  Treasury  Regulations  promulgated  under  section
     704(b) of the Code, the deficit  balance,  if any, in its Adjusted  Capital
     Account  created  by such  adjustments,  allocations  or  distributions  as
     quickly as possible,  unless such deficit  balance is otherwise  eliminated
     pursuant to Section 5.2(d)(i) or Section 5.2(d)(ii).

          (iv) Gross Income  Allocations.  In the event any Member has a deficit
     balance  in its  Capital  Account at the end of any Tax Period in excess of
     the sum of (A) the amount such  Member is  required to restore  pursuant to
     the  provisions of this  Agreement and (B) the amount such Member is deemed
     obligated  to  restore  pursuant  to  Treas.  Reg.   ss.ss.1.704-2(g)   and
     1.704-2(i)(5),  such Member shall be specially  allocated  items of Company
     gross  income and gain in the amount of such excess as quickly as possible;
     provided that an allocation  pursuant to this Section  5.2(d)(iv)  shall be
     made  only if and to the  extent  that  such  Member  would  have a deficit
     balance in its  Capital  Account as  adjusted  after all other  allocations
     provided  for in this  Section  5.2 have been  tentatively  made as if this
     Section 5.2(d)(iv) were not in this Agreement.

          (v)  Nonrecourse Deductions. Nonrecourse Deductions for any Tax Period
     shall be allocated  among the Members in accordance with the ratio in which
     taxable income is allocated to the Members with respect to such Tax Period.
     If the Board determines that the Company's  Nonrecourse  Deductions must be
     allocated in a different  ratio to satisfy the safe harbor  requirements of
     the Treasury Regulations  promulgated under section 704(b) of the Code, the
     Board is  authorized  to revise  the  prescribed  ratio to the  numerically
     closest ratio that does satisfy such requirements.

          (vi) Member Nonrecourse Deductions.  Member Nonrecourse Deductions for
     any Tax Period shall be allocated  100 percent to the Member that bears the
     Economic Risk of Loss with respect to the Member  Nonrecourse Debt to which
     such Member  Nonrecourse  Deductions are  attributable  in accordance  with
     Treas. Reg. ss.1.704-2(i).  If more than one Member bears the Economic Risk
     of Loss with respect to a Member  Nonrecourse Debt, such Member Nonrecourse
     Deductions  attributable  thereto shall be allocated  between or among such
     Members in  accordance  with the  ratios in which they share such  Economic
     Risk of Loss.

          (vii)   Nonrecourse   Liabilities.   For   purposes  of  Treas.   Reg.
     ss.1.752-3(a)(3),  the Members agree that  Nonrecourse  Liabilities  of the
     Company in excess of the sum of (A) the amount of Minimum  Gain and (B) the
     total amount of  Nonrecourse  Built-in  Gain shall be  allocated  among the
     Members in accordance with their Sharing Ratios.

                                     - 30 -
<PAGE>

          (viii)  Section 754  Adjustments.  To the extent an  adjustment to the
     adjusted  tax basis of any  Company  Asset  pursuant  to section  734(b) or
     section  743(b)  of  the  Code  is  required,   pursuant  to  Treas.   Reg.
     ss.1.704-1(b)(2)(iv)(m),  to be taken into account in  determining  Capital
     Accounts,  the amount of such  adjustment  to the  Capital  Accounts  shall
     treated as an item of gain (if the  adjustment  increases  the basis of the
     asset) or loss (if the adjustment  decreases such basis),  and such item of
     gain or loss  shall  be  specially  allocated  to the  Members  in a manner
     consistent with the manner in which their Capital  Accounts are required to
     be adjusted pursuant to such section of the Treasury Regulations.

          (ix) Curative Allocations. Notwithstanding any other provision of this
     Section 5.2, other than the Required Allocations,  the Required Allocations
     shall be taken into account in making the Agreed  Allocations  so that,  to
     the extent  possible,  the net amount of items of  income,  gain,  loss and
     deduction allocated to each Member pursuant to the Required Allocations and
     the Agreed Allocations,  together, shall be equal to the net amount of such
     items that would have been  allocated  to each such Member under the Agreed
     Allocations  had  the  Required   Allocations  and  any  related   Curative
     Allocation not otherwise been provided in this Section 5.2. Notwithstanding
     the preceding sentence,  Required  Allocations  relating to (A) Nonrecourse
     Deductions  shall not be taken into account except to the extent that there
     has been a decrease  in  Company  Minimum  Gain and (B) Member  Nonrecourse
     Deductions  shall not be taken into account except to the extent that there
     has been a decrease in Member  Nonrecourse  Debt Minimum Gain.  Allocations
     pursuant  to this  Section  5.2(d)(ix)  shall only be made with  respect to
     Required  Allocations to the extent the Board  reasonably  determines  that
     such Required  Allocations will otherwise be inconsistent with the economic
     agreement among the Members. Further,  allocations pursuant to this Section
     5.2(d)(ix)  shall be  deferred  with  respect to  allocations  pursuant  to
     clauses  (A) and (B) hereof to the extent the Board  reasonably  determines
     that such  allocations  are  likely to be  offset  by  subsequent  Required
     Allocations.

     5.3  Allocations for Tax Purposes.

     (a)  Except as otherwise provided in this  Section  5.3, for tax  purposes,
each item of income,  gain,  loss and  deduction  shall be  allocated  among the
Members in the same manner as its correlative  item of book income,  gain, loss,
or deduction is allocated pursuant to Section 5.2.

     (b)  The deduction for depletion under section 611 of the Code with respect
to each separate  Depletable  Property  shall be computed for federal income tax
purposes separately by each Member rather than by the Company in accordance with
section  613A(c)(7)(D)  of the  Code.  For  purposes  of such  computation,  the
proportionate  share of the  adjusted  basis  (before  taking  into  account any
adjustment  resulting  from an  election  made by the  Company on behalf of such
Member under section 754 of the Code) of each Depletable  Property  allocated to
each Member shall be determined in accordance with the following principles:

          (i) In the case of a Contributed Property,  the adjusted basis of each
     such property shall be allocated in a manner consistent with the principles
     of section 704(c) of

                                     - 31 -
<PAGE>

     the Code to take into  account any  variation  between the Agreed  Value of
     such property and its adjusted basis for federal income tax purposes at the
     time of contribution.

          (ii) In the case of an Adjusted Property,  the adjusted basis shall be
     allocated or reallocated (A) first to take into account all Unrealized Gain
     or Unrealized Loss and prior allocations thereof pursuant to Section 5.1(d)
     or Section 5.1(e)  consistent  with the principles of section 704(c) of the
     Code  and  (B)  second,  in  the  event  such  property  was  originally  a
     Contributed Property, among the Members in a manner consistent with section
     704(c) of the Code.

          (iii) In the case of all other oil and gas  properties,  the  adjusted
     basis of such properties shall be allocated among the Members in accordance
     with their Sharing Ratios.

     (c) Each Member shall  separately keep records of its share of the adjusted
tax basis in each  Depletable  Property,  adjust such share of the  adjusted tax
basis for any cost or  percentage  depletion  allowable on such property and use
such adjusted tax basis in the  computation of its cost or percentage  depletion
or in the computation of its gain or loss on the disposition of such property by
the  Company.  Upon the request of the TMM,  each Member shall advise the TMM of
its  adjusted  tax basis in each  Depletable  Property  of the  Company  and any
depletion  computed with respect  thereto as computed in accordance with Section
5.3(b).

     (d)  For the purpose of the  separate  computation  of gain or loss by each
Member on the sale or  disposition  of each separate  Depletable  Property,  the
Company's  "amount  realized" (as such term is defined in section 1001(b) of the
Code) from such sale shall be allocated  for federal  income tax purposes to the
Members as follows:

          (i) In the case of any Contributed  Property,  such "amount  realized"
     shall be  allocated  (A) first,  to the  Members in an amount  equal to the
     Simulated  Basis in such  property in the same  proportion  as such Members
     were allocated adjusted basis in such property (as determined in accordance
     with Section 5.3(b) above),  and (B) second,  in the manner consistent with
     the  principles  of  section  704(c) of the Code to take into  account  any
     variation  between the Agreed Value of such property and its adjusted basis
     for federal income tax purposes at the time of contribution  and (C) third,
     any Residual Gain or Residual Loss  attributable to a Contributed  Property
     shall be allocated  among the Members in the same manner as its correlative
     item of "book" gain or loss is allocated pursuant to Section 5.2.

          (ii) In the case of any  Adjusted  Property,  such  "amount  realized"
     shall be  allocated  (A) first,  to the  Members in an amount  equal to the
     Simulated  Basis in such  property in the same  proportion  as such Members
     were allocated adjusted basis in such property (as determined in accordance
     with Section 5.3(b) above),  (B) second,  in a manner  consistent  with the
     principles  of  section  704(c)  of the  Code  to  take  into  account  the
     Unrealized  Gain or Unrealized  loss  attributable to such property and the
     allocations  thereof  pursuant  to Section  5.1(d) or Section  5.1(e),  (C)
     third, in the event such property was originally a Contributed Property, be
     allocated among the Members in a manner consistent with Section 5.1(d), and
     (D), fourth,  any item of Residual Gain or Residual Loss attributable to an
     Adjusted Property shall be allocated among the Members in the

                                     - 32 -
<PAGE>

     same manner as its  correlative  item of "book"  gain or loss is  allocated
     pursuant to Section 5.2.

          (iii) In the case of all other  oil and gas  properties,  the  "amount
     realized"  shall be allocated (1) first,  to the Members in an amount equal
     to the Simulated Basis in each such property in the same proportion as such
     Members were allocated  adjusted basis in (or attributable to such property
     (as  determined in accordance  with Section  5.3(b) above)) and (2) second,
     the balance to the Members in the same  manner as the  correlative  item of
     "book" gain or loss is allocated pursuant to Section 5.2.

     (e)  In an attempt to eliminate Book-Tax  Disparities  attributable  to all
other  Contributed  Property or Adjusted  Property items of income,  gain, loss,
depreciation,  amortization and cost recovery  deductions shall be allocated for
tax purposes among the Members as follows:

          (i)  In the case of a Contributed Property,

               (A) such items attributable  thereto shall be allocated among the
          Members in the manner  provided  under section 704(c) of the Code that
          takes into  account the  variation  between  the Agreed  Value of such
          Contributed   Property  and  its   adjusted   basis  at  the  time  of
          contribution; and

               (B) any item of Residual Gain or Residual Loss  attributable to a
          Contributed  Property shall be allocated among the Members in the same
          manner as its  correlative  item of "book"  gain or loss is  allocated
          pursuant to Section 5.2.

          (ii) In the case of an Adjusted Property,

               (A) such items attributable thereto shall (1) first, be allocated
          among  the  Members  in a manner  consistent  with the  principles  of
          section 704(c) of the Code to take into account the Unrealized Gain or
          Unrealized  Loss  attributable  to such  property and the  allocations
          thereof pursuant to Section 5.1(d) or Section 5.1(e),  and (2) second,
          in the event such property was originally a Contributed  Property,  be
          allocated  among  the  Members  in a manner  consistent  with  Section
          5.3(e)(i)(A); and

               (B) any item of Residual Gain or Residual Loss attributable to an
          Adjusted  Property  shall be  allocated  among the Members in the same
          manner as its  correlative  item of "book"  gain or loss is  allocated
          pursuant to Section 5.2.

          (iii) Book-Tax  Disparities  will be  eliminated,  to the least extent
     possible,   using  the   "traditional"   method  provided  in  Treas.  Reg.
     ss.1.704-3(b).

     (f)  Any gain allocated  to the  Members  upon  the  sale or other  taxable
disposition  of any Company Asset shall,  to the extent  possible,  after taking
into account other required allocations of gain pursuant to this Section 5.3, be
characterized as Recapture Income in the same proportions and to the same extent
as such Members (or their predecessors in interest) have

                                     - 33 -
<PAGE>

been  allocated  any  deductions  directly  or  indirectly  giving  rise  to the
treatment of such gains as Recapture Income.

     (g) All items of income, gain, loss, deduction and credit recognized by the
Company for tax purposes and  allocated  to the Members in  accordance  with the
provisions  hereof shall be  determined  without  regard to any  election  under
section  754 of the Code which may be made by the  Company;  provided  that such
allocations,  once made,  shall be adjusted as necessary or  appropriate to take
into account those adjustments  permitted or required by sections 734 and 743 of
the Code.

     (h) As between a transferor  and  transferee of any Member  Interest,  each
item of income,  gain, loss, deduction or credit attributable to the transferred
Member Interest shall,  for tax purposes,  be allocated among the transferor and
transferee  as if the  books  of the  Company  were  closed  on the  date of the
transfer  and  (i) all  items  of  income,  gain,  loss,  deduction,  or  credit
attributable to the period ending on or before the date of the transfer shall be
allocated to the transferor and (ii) all items of income, gain, loss, deduction,
or credit  attributable to the period beginning on the day after the date of the
transfer shall be allocated to the transferee.

     5.4 Distributions of Net Cash Flow. On each date on which the Company makes
a distribution  to the Members (or at such other time as may be set forth in the
Senior Debt Documents or the Subordinated  Note Agreement),  but in any event no
less  often than once per  Quarter  (the  "Distribution  Date"),  provided  that
neither  the  Company nor the  Subordinated  Note holder has  received a default
notice with respect to the Senior  Debt,  which  default  notice  prohibits  the
Company from paying or  distributing  any Net Cash Flow (and  provided that such
distributions  are not otherwise  restricted  under the terms of the Senior Debt
Documents), the Board shall cause Net Cash Flow (including,  without limitation,
any permitted tax  distributions  under the Senior Debt Documents) to be paid or
distributed  as  follows,  subject,  however,  to the other  provisions  of this
Section 5.4 and the provisions of Section 5.9 below:

     (a) If Amounts  Owing on the  Subordinated  Note.  If any amount is due and
owing with respect to the Subordinated Note, then Net Cash Flow shall be applied
as follows:

          (i) First,  to the Class B Members in proportion  to their  respective
     Class  B  Sharing  Ratios  in an  amount  equal  to the  Quest  Excess  Tax
     Distribution, if any;

          (ii) Then, 100% to the holder of the Subordinated  Note, to be applied
     in  accordance  with the  terms of the  Subordinated  Note,  until  the Tax
     Distribution Balance has been reduced to zero; provided,  however,  that to
     the  extent  payments  to the  holder  of the  Subordinated  Note  would be
     prohibited  under the Senior Debt  Documents,  then the payments that would
     otherwise have been made under this section shall,  instead, be distributed
     100% to the Class A Members in proportion to their  respective Class A Unit
     Sharing Ratios;

          (iii)  Then,  an amount up to 15 percent of the Net Cash Flow shall be
     distributed (A) 0% to the Class A Members in proportion to their respective
     Class A Unit Sharing Ratios,  and (B) 100 percent to the Class B Members in
     proportion to their respective Class B Unit Sharing Ratios;

                                     - 34 -
<PAGE>

          (iv) Finally,  all remaining Net Cash Flow shall be paid to the holder
     of the Subordinated Note and be applied in accordance with the terms of the
     Subordinated Note;  provided,  however,  that to the extent payments to the
     holder of the  Subordinated  Note would be prohibited under the Senior Debt
     Documents, then the payments that would otherwise have been made under this
     section  shall,  instead,  be  distributed  100% to the Class A Members  in
     proportion to their respective Class A Unit Sharing Ratios.

          (v)  Notwithstanding  the  foregoing,  upon  and  following  an  Early
     Liquidation  Event, Net Cash Flow will be paid 100 percent to the holder of
     the Subordinated Note until the Subordinated Note has been paid in full and
     the holder of the  Subordinated  Note has received the Make Whole  Payment,
     and to the  extent of any excess Net Cash Flow  remaining  thereafter,  the
     balance shall be distributed in accordance with Section 5.4(b) below.

     (b) If No Amounts  Owing on the  Subordinated  Note. If all amounts due and
owing with respect to the Subordinated  Note have previously been paid, then Net
Cash Flow shall be applied as follows:

          (i) First,  to the Class B Members in proportion  to their  respective
     Class  B  Sharing  Ratios  in an  amount  equal  to the  Quest  Excess  Tax
     Distribution, if any;

          (ii)  Then,  100% to the  Class  A  Members  in  proportion  to  their
     respective Class A Unit Sharing Ratios until the Tax  Distribution  Balance
     has been reduced to zero;

          (iii)  Then,  (A) an amount up to 40  percent of Net Cash Flow will be
     distributed to the Class B Members in proportion to their  respective Class
     B Unit Sharing  Ratios and (B) all remaining Net Cash Flow up to 60 percent
     of Net Cash Flow will be distributed to the Class A Member in proportion to
     their respective Class A Unit Sharing Ratios until such time as the Class A
     Member IRR is 30 percent; and

          (iv)  thereafter,  Net Cash Flow will be distributed (A) 30 percent to
     the Class A Members in proportion to their Class A Unit Sharing Ratios, and
     (B) 70  percent to the Class B Members in  proportion  to their  respective
     Class B Unit Sharing Ratios.

     (c) Notwithstanding  the foregoing,  in the event that the aggregate Defect
Property Loss Amount exceeds  $2,500,000  (such excess amount is herein referred
to as the "Excess Defect Property Loss Amount"),  then any amounts distributable
to the Class B Members  pursuant  to  Section  5.4(a) or  Section  5.4(b)  shall
instead be distributed to the Class A Member until there has been distributed to
the Class A Member pursuant to this Section 5.4(c) an amount equal to the Excess
Defect Property Loss Amount (a "Defect Property Loss  Distribution");  provided,
however,  that to the  extent a Defect  Value for a Defect has been added to the
Defect  Property  Loss Amount and such Defect is something for which the Class A
Member has received indemnification for, been held harmless and made whole under
the  terms of the  Class A Unit  Purchase  Agreement,  but only  insofar  as the
amounts  actually  received  under  such   indemnification   and  hold  harmless
provisions  equal not less than the Defect Value thereof) under the terms of the
Class A Unit  Purchase  Agreement,  then the Defect  Value  thereof  (or portion
thereof for which the Class A Member has been  indemnified,  held  harmless  and
been made

                                     - 35 -
<PAGE>

whole)  shall be  deducted  from the  Excess  Defect  Property  Loss  Amount for
purposes of the calculation set forth in this Section 5.4(c).

     (d)  Notwithstanding  any provision of this Agreement to the contrary,  the
Company shall withhold from all  distributions  and other payments to any Member
or any Person any and all amounts  required to be withheld under federal,  state
or local law. All amounts  withheld  with  respect to a Member  pursuant to this
Section 5.4(d) shall be treated as a payment or distribution made to such Member
for all purposes under this Agreement.

     5.5 No Distributions in Kind. The Company may not distribute to the Members
any Company Assets in kind except as approved by a Member Vote.

     5.6  Limitations  on  Distributions.  Notwithstanding  any provision to the
contrary contained in this Agreement,  the Company shall not make a distribution
to a Member to the extent that such distribution is not permitted under the Act.
A Member who receives a  distribution  that is not permitted  under the terms of
section  18-607  of the  Act  shall  have  no  liability  under  the Act or this
Agreement  to  return  the   distribution   unless  the  Member  knew  that  the
distribution violated the terms of such section.

     5.7 (Intentionally Omitted)

     5.8 Fees; Expenses.

     (a)  Management  Compensation.   For  the  services  under  the  Management
Agreement  and as  reimbursement  for  overhead and  internal  expenses,  and as
reimbursement  for other costs and expenses,  QES shall receive from the Company
the  Management  Compensation  in  accordance  with the terms of the  Management
Agreement.  The  Management  Compensation  shall be paid in accordance  with the
terms of the Management Agreement.

     (b) Expenses. The Company shall reimburse CPL and the Quest Members for all
of its or their  reasonable  costs and  expenses  incurred  connection  with the
preparation,  negotiation,  execution and delivery of this Agreement  (including
the fees and expenses of legal counsel to CPL and the Quest Members).

     5.9 Defect Properties.

     (a) Defect  Property  Notice.  Upon the  discovery of a Defect  regarding a
Defect Property by the Class A Member,  the Class A Member shall promptly notify
the  Company and the Quest  Members in  writing.  Any such notice by the Class A
Member shall include appropriate  evidence and documentation to substantiate its
position and shall be  delivered  to the Quest  Members on or before May 1, 2004
(other  than  Defects  relating  to the  existence  of an Adverse  Environmental
Condition), and on or before July 1, 2004 with regard to any Defects relating to
the existence of an Adverse Environmental  Condition (such applicable date being
the "Defect Notice Date").  After the Defect Notice Date, any Defect regarding a
defect  Property which is not so disclosed to the Quest Members on or before the
Defect Notice Date shall conclusively be deemed waived by the Class A Member for
all  purposes  except  for  purposes  of the  enforcement  of, and any claim for
indemnification  or other  remedy  for,  (i) any  breach of any  representation,
covenant, or warranty of the Quest Members (subject to and only to the extent it

                                     - 36 -
<PAGE>

survives as provided therein) under the Class A Unit Purchase Agreement and (ii)
the warranties provided by the Quest Members in any deed, assignment and/or bill
of sale delivered to the Company at or prior to the Closing.

     (b) Environmental  Inspection.  After the execution of this Agreement,  the
Class A Member and its authorized  representatives shall have physical access to
the Contributed Property contributed by the Quest Members at the Class A Members
sole cost,  risk and expense for the purpose of inspecting the same,  conducting
such tests, examination, investigations and assessments as may be reasonable and
necessary or appropriate to evaluate the environmental and physical condition of
the  Contributed  Property  contributed  by the  Quest  Members,  including  the
identification  of  wetlands.  For those  Contributed  Properties  which are not
operated by the Quest Members,  the Quest Members shall obtain  permission  from
the operator to conduct such inspections.

     (c) Re-Conveyance;  Other Remedies  regarding Defect Property.  The Class A
Member,  by delivery of written notice,  may notify the Quest Members (a "Defect
Notice") of any Defect  pursuant to the terms of this Section  5.9,  regarding a
Defect  Property.  The Quest  Members  shall  have an  opportunity  to cure such
Defect,  insofar as (i) such Quest Members  notify the Class A Member in writing
of such  election to cure within  fifteen  (15) days  following  the date of the
Defect Notice ("Defect Notice Response Date"),  (ii) such Quest Members cure the
Defect to the Class A Member's satisfaction within one hundred twenty (120) days
following  the date of the  Defect  Notice  and (iii) the Quest  Members  do not
utilize any funds or resources of the Company to cure the same.  The Company and
the affected Quest Member acting in their individual capacity,  shall diligently
and in good  faith  use  reasonable  efforts  to agree on the  existence  of any
asserted  Defects,  and the Defect Value of the asserted  Defects in  accordance
with the Defect  Guidelines.  Any disputes by the Quest  Members  regarding  the
Defects or the Defect  Value  alleged in the Defect  Notice  must be asserted in
writing by the Defect Notice  Response Date and any such dispute  regarding such
Defects or the Defect Value thereof which is not resolved by the Members  within
thirty (30) days  following  the Defect  Notice  Response Date shall be resolved
pursuant to the dispute resolution  provisions under Section 10.10 below. In the
event that the Defect is incapable  of being cured or if the cure period  lapses
without the Defect being cured,  then, with respect to each Defect identified in
a Defect  Notice  submitted  by the Class A Member,  the Defect  Values for such
Defect  Properties  shall be added to the Defect  Property  Loss  Amount and the
Class A Member  shall,  by written  notice  delivered  to the Class B Members no
later than  thirty (30) days  following  the  expiration  of such  120-day  cure
period,  either (y)  subject to any  approvals  required  under the Senior  Loan
Documents,  have the Company  re-convey  the affected  Defect  Property,  or (z)
permit the Company to retain the  affected  Contributed  Property in its current
condition,   subject  to  the  other  provisions  hereof   (including,   without
limitation,  the  provisions  of  Section  5.4(c)  above).  The Class A Member's
failure to timely make such an  election  shall be deemed an election to proceed
under clause (z) above.  To the extent an election is made to have a Contributed
Property re-conveyed, the REASSIGNMENT OR RE-CONVEYANCE INSTRUMENT SHALL PROVIDE
THAT THE QUEST  MEMBER(S) SHALL DEFEND AND INDEMNIFY THE COMPANY AND THE CLASS A
MEMBER AND THEIR  SUCCESSORS  AND ASSIGNS  FROM ANY AND ALL  LIABILITY,  CLAIMS,
COSTS  (INCLUDING,  WITHOUT  LIMITATION  ATTORNEYS' FEES, COURT COSTS, AND OTHER
COSTS OF SUIT, INVESTIGATION OR ACTION), EXPENSES, DAMAGES, COSTS OF SETTLEMENT,

                                     - 37 -
<PAGE>

FINES,  PENALTIES,  SUITS,  CAUSES OF  ACTION,  INJURY TO  PERSONS  OR DAMAGE TO
CONTRIBUTED PROPERTY (INCLUDING WITHOUT LIMITATION TO THAT OF THE QUEST MEMBERS'
AND THE CLASS A  MEMBER'S  EMPLOYEES,  AGENTS,  CONTRACTORS,  SUBCONTRACTORS  OR
INVITEES)  WHICH MAY ARISE  DIRECTLY OR INDIRECTLY  FROM OUT OF OR IN CONNECTION
WITH SUCH  RE-CONVEYED  CONTRIBUTED  PROPERTY,  THE  CONDITION  THEREOF,  OR THE
COMPANY'S  OWNERSHIP OR OPERATION  THEREOF,  AND WITHOUT  REGARD TO WHETHER SAME
ARISE  FROM OR OUT OF THE  COMPANY'S  OR THE QUEST  MEMBERS'  ACTIVITIES  ON THE
REASSIGNED  OR  RE-CONVEYED  CONTRIBUTED  PROPERTIES,   AND  REGARDLESS  OF  THE
NEGLIGENCE,  STRICT LIABILITY OR OTHER FAULT OR LIABILITY OF THE COMPANY, OR ANY
OTHER PERSON OR PARTY.

                                   ARTICLE 6
                                   MANAGEMENT

     6.1  Member Approval Required for Certain Actions.

     (a)  A Member Vote shall not be required  with respect to any matter unless
otherwise specifically provided for in this Agreement or by the Act.

     (b)  Meetings; Written  Consent.  In the event any Member Vote is required,
such Member Vote will be taken at a duly called  meeting of the Members.  Notice
of the time,  date and  place of  meeting  shall be given to each  Member by the
Company  by  personal  delivery,  telephone  or fax sent to the  address of each
Member set forth on Exhibit A at least five (5) business  days in advance of the
meeting;  provided,  however,  no notice  need be given to a Member  who  waives
notice before or after the meeting or who attends the meeting without protesting
at or before its  commencement the inadequacy of notice to such Member. A Member
may attend a meeting in person, and it may also participate in meetings by means
of a  conference  call or similar  communications  equipment  that  permits  all
Members to hear each other.  Any action required or permitted to be taken at any
meeting of the  Members  may be taken  without a meeting if one or more  written
consents to such  action  shall be signed by not less than the number of Members
required to approve or authorize the action if approved at a duly called meeting
of the Members . Such written  consents shall be delivered to the Company at its
principal office and, unless otherwise specified, shall be effective on the date
when delivered.

     6.2  Management by Board.

     (a) Board.  Except for  situations  in which the approval of the Members is
required  pursuant to the terms of this  Agreement or by the Act, (i) the powers
of the Company shall be exercised by or under the authority of, and the business
and affairs of the Company  shall be managed  under the direction of, a board of
managers (the "Board")  consisting of  representatives of the Members designated
as provided in Section 6.2(b) (the "Managers"),  and (ii) except as delegated by
the Board to the  Officers  in  accordance  with  Section  6.4,  the Board shall
determine and approve the overall objectives,  policies, procedures and methods,
and shall make all decisions  and take all actions for the Company  permitted by
the  Act,  in  order to carry  on the  Company's  business  consistent  with the
purposes of the Company as stated in and not

                                     - 38 -
<PAGE>

inconsistent  with Applicable Law or the other  provisions of this Agreement.  A
Manager that is  designated  by a Member may vote at a meeting of the Board by a
written  proxy  executed  by that  Manager  and  delivered  to  another  Manager
designated by the same Member. A proxy shall be revocable unless it is stated to
be  irrevocable.  It is acknowledged  that initially,  certain of the day-to-day
operations and functions will be delegated to the Officers of the Company and to
QES under the Management Agreement;  but without in any way limiting the breadth
of the authority of the Board,  the following  shall require the approval of the
Board (and solely to the extent required under this Agreement or Applicable Law,
the Members):

          (i) Any matters  which are  expressly  restricted or reserved from the
     authority of QES under the terms of the Management Agreement;

          (ii) The  adoption  or  amendment  of the  annual  operating,  capital
     expenditure,  maintenance and acquisition  budget (the "Annual Budget") for
     the Company and any increase or decrease in the Annual  Budget by more than
     10 percent,  in each case, other than changes  reasonably  necessary in the
     case of emergencies, provided that, if the parties are unable to approve an
     Annual  Budget for any Fiscal Year,  the Annual Budget for the prior Fiscal
     Year (annualized if necessary) shall remain in effect,  insofar as the same
     relates  to  operating  expenses  of the  Company  (but shall not remain in
     effect with regard to any capital expenditure budget provided therein),  as
     adjusted  by  changes in the  Inflation  Index,  until the Board  otherwise
     approves an Annual Budget;

          (iii) Hiring or terminating any Officer and determining the powers and
     authority and  compensation of the Officers;  provided,  however,  that any
     matter  requiring  approval of the Board or a Member Vote will require such
     approval  or  vote to  delegate  authority  regarding  such  matter  to the
     Officers;

          (iv) The incurrence by the Company of indebtedness  for borrowed money
     (and  any  related  guarantee,   pledge,  lien  or  security  arrangement);
     provided,  however,  that borrowings by the Company under a credit facility
     that has  previously  been approved by the Board are not subject to further
     approval by the Board;

          (v) Entering  into any  agreement  for the hedging of the price of any
     oil, gas or other mineral, or entering into any agreement for the purchase,
     sale, or exchange of any oil, gas or other mineral for a fixed price or for
     a term in excess of six (6) months;

          (vi) Making any Acquisitions; and

          (vii) Any actions or  approvals  by the  Company in its  capacity as a
     member of Bluestem.

     (b)  Designation of Managers.

          (i) The Board shall  consist of four (4)  Managers  designated  by the
     Members.  The Class A Member shall have the right to designate two Managers
     (and if there is more than one Class A Member,  then those  Class A Members
     who, in the  aggregate,  have a Class A Unit Sharing Ratio in excess of 50%
     shall make such designation),  and the Class B Members, collectively (based
     on the approval of those Class B Members who, in the

                                     - 39 -
<PAGE>

     aggregate,  have a Class B Unit  Sharing  Ratio in excess  of 50  percent),
     shall have the right to designate two Managers.

          (ii) The Class A Member or the  Class B  Members,  as the case may be,
     may remove and replace any Manager designated by such Class A Member or the
     Class B Members,  as the case may be, at any time, upon notice to the other
     class of Members.

     (c) Votes of Managers. In all Board votes, each Manager will have one vote.

     (d)  Unanimous  Manager  Approval.  Except as provided in Section  6.3, all
matters requiring the approval of the Board shall require approval by all of the
Managers. Such matters include:

          (i) Any issuance of Units or other Member Interests by the Company;

          (ii) Any action or election that would cause the Company to be taxable
     as a corporation for federal tax purposes;

          (iii) Any material tax  election by the Company,  including  elections
     made  pursuant  to Section  7.2;  provided  that the  election  provided in
     section 754 of the Code will be made at the request of any Member;

          (iv)  Determinations  by the Board of the  amount of Net Cash Flow for
     distribution pursuant to Section 5.4;

          (v) The provision of guarantees,  indemnities, loans or other forms of
     financial  or credit  support in favor of any holder of any Units or any of
     its  Affiliates,  other  than as  contemplated  by this  Agreement  and the
     Related Agreements;

          (vi)  The  engagement  of  the  Company's   independent  auditors  and
     engineers;

          (vii)  Determinations by the Board to provide  indemnification  to any
     agent or trustee of the Company pursuant to Section 6.6; -----------

          (viii) Establishing bank and investment  accounts and arrangements for
     the Company pursuant to Section 7.5.

     (e)  Meetings; Written  Consent.  If action is to be taken at a duly called
meeting of the Managers,  notice of the time, date and place of meeting shall be
given to each Manager by the Manager  calling the meeting by personal  delivery,
telephone or fax sent to the address of each Manager set forth in the records of
the Company at least five (5) business days in advance of the meeting; provided,
however,  no notice need be given to a Manager who waives notice before or after
the  meeting or who  attends the  meeting  without  protesting  at or before its
commencement the inadequacy of notice to such Manager.  The Manager may attend a
meeting in  person,  and they may also  participate  in  meetings  by means of a
conference call or similar communications equipment that permits all Managers to
hear each other.  Any action required or permitted to be taken at any meeting of
the Managers may be taken  without a meeting if one or more written  consents to
such action shall be signed by not less than the number of Managers required to

                                     - 40 -
<PAGE>

approve or  authorize  the action if approved  at a duly  called  meeting of the
Managers. Such written consents shall be delivered to the Board at the principal
office of the Company and, unless otherwise specified, shall be effective on the
date when the first consent is delivered.

     6.3 Control of Interested Member Matters.

     (a)  Notwithstanding  anything to the contrary contained in this Agreement,
with respect to any Conflict Circumstance, the Nonconflicted Member (through the
Board  representatives of such Nonconflicted  Member) shall,  subject to Section
6.3(b),  have the sole and exclusive  power and right for and on behalf,  and at
the sole  expense,  of the  Company  (i) to control  all  decisions,  elections,
notifications,  actions,  exercises or  nonexercises  and waivers of all rights,
privileges  and remedies  provided to, or possessed by, the Company with respect
to a Conflict Circumstance,  and (ii) in the event of any potential,  threatened
or asserted claim, dispute or action with respect to a Conflict Circumstance, to
retain and  direct  legal  counsel  and to  control,  assert,  enforce,  defend,
litigate,  mediate,  arbitrate,  settle,  compromise  or waive  any and all such
claims,  disputes and  actions.  Accordingly,  Company  action with respect to a
Conflict Circumstance shall require the approval of the Board representatives of
the Nonconflicted  Member. Each Member shall, and shall cause its Affiliates to,
take all such  actions,  execute  all such  documents  and  enter  into all such
agreements as may be necessary or  appropriate  to facilitate or further  assure
the accomplishment of this Section.

     (b) The Nonconflicted  Member, in exercising its control,  power and rights
pursuant  to this  Section  6.3,  shall  act in good  faith  and in a manner  it
believes to be in the best  interests  of the  Company;  provided  that it shall
never be deemed to be in the best  interests of the Company not to pay,  perform
and observe all of the  obligations  to be paid,  performed or observed by or on
the  part  of the  Company  under  the  terms  of any  Related  Agreements.  The
Nonconflicted  Member  shall  act  through  the  Board  representatives  of such
Nonconflicted Member, and the approval of such Board representatives will be the
sole requirement for the Nonconflicted Member (and therefore the Board on behalf
of the  Company)  to  take  any  action  in  respect  of the  relevant  Conflict
Circumstance.  The Conflicted Member (or its Affiliates) shall have the right to
deal with the Company and with the Nonconflicted Member on an arm's-length basis
and in a manner it  believes to be in its own best  interests,  but in any event
must deal with them in good faith.

     6.4   Officers.

     (a)   The Board may appoint agents of the Company,  which  agents  shall be
referred to as "Officers" of the Company,  having the titles,  power,  authority
and duties  described in this Section 6.4 or as otherwise  granted by the Board.
Subject to the  foregoing,  the  Officers  shall have the full  authority to and
shall  manage,  control and oversee the  day-to-day  business and affairs of the
Company  and shall  perform all other acts as are  customary  or incident to the
management  of such  business  and  affairs,  which will include the general and
administrative  affairs of the Company and the operation and  maintenance of the
Company Assets in accordance with the provisions of Section 6.5.

     (b) The Officers may include a Chairman,  a President  and Chief  Executive
Officer, one or more Vice Presidents,  a Secretary, a Treasurer, and one or more
Assistant Secretaries and

                                     - 41 -
<PAGE>

Assistant  Treasurers,  and any other officer position or title as the Board may
approve. Any person may hold two or more offices.

     (c) The  Officers  may be appointed by the Board at such times and for such
terms as the Board shall determine.  Any Officer may be removed, with or without
cause,  only by the Board.  Vacancies  in any  office may be filled  only by the
Board.

     (d) In  accordance  with and  subject  to the  limitations  imposed by this
Agreement  or any  direction of the Board,  the  President  and Chief  Executive
Officer,  as such,  shall (i) supervise  generally the other  Officers,  (ii) be
responsible  for the  management  and  day-to-day  business  and  affairs of the
Company, its other Officers,  employees and agents and shall supervise generally
the affairs of the Company,  (iii) have full  authority to execute all documents
and take all actions  that the Company may legally  take and (iv) have the power
and authority to delegate the President and Chief Executive Officer's powers and
authority to any proper Officer.

     (e) In the absence of the President and Chief Executive Officer,  each Vice
President  appointed  by the  Board  shall  have all of the  powers  and  duties
conferred  upon the President and Chief  Executive  Officer,  including the same
power as the  President  and Chief  Executive  Officer to execute  documents  on
behalf of the Company.  Each such Vice President shall perform such other duties
and may  exercise  such other powers as may from time to time be assigned to him
by the Board or the President and Chief Executive  Officer.  Vice Presidents may
be designated  Executive Vice Presidents,  Senior Vice Presidents,  or any other
title determined by the Board.

     (f) The  Secretary  shall record or cause to be recorded in books  provided
for that purpose the minutes of meetings or actions of the Board, shall see that
all notices are given in accordance with the provisions of this Agreement and as
required by  Applicable  Law,  shall be  custodian  of all  records  (other than
financial), shall see that the books, reports, statements,  certificates and all
other  documents and records  required by  Applicable  Law are properly kept and
filed,  and, in  general,  shall  perform  all duties  incident to the office of
Secretary  and such other duties as may,  from time to time, be assigned by this
Agreement, the Board or the President and Chief Executive Officer. The Assistant
Secretaries  shall  exercise the powers of the Secretary  during that  Officer's
absence or inability or refusal to act.

     (g) The  Treasurer  shall  keep or cause to be kept the books of account of
the Company and shall render  statements of the financial affairs of the Company
in such  form and as often  as  required  by this  Agreement,  the  Board or the
President and Chief Executive  Officer.  The Treasurer,  subject to the order of
the Board,  shall have the custody of all funds and  securities  of the Company.
The Treasurer shall perform all other duties commonly incident to his office and
shall  perform such other  duties and have such other powers as this  Agreement,
the Board or the President and Chief Executive Officer shall designate from time
to time.  The  Assistant  Treasurers  shall  exercise the power of the Treasurer
during  that  Officer's  absence or  inability  or  refusal to act.  Each of the
Assistant  Treasurers  shall possess the same power as the Treasurer to sign all
certificates, contracts, obligations and other instruments of the Company. If no
Treasurer or Assistant  Treasurer is appointed and serving in the absence of the
appointed  Treasurer  and Assistant  Treasurer,  such other Officer as the Board
shall select shall have the powers and duties conferred upon the Treasurer.

                                     - 42 -
<PAGE>

     (h) The  Company  may  grant  powers  of  attorney  or other  authority  as
appropriate  to establish  and evidence the  authority of the Officers and other
persons.

     (i) Unless  otherwise  provided  by  resolution  of the Board or in Section
6.4(d),  no Officer  shall have the power or authority to delegate to any person
such  Officer's  powers as an Officer to manage the  business and affairs of the
Company.

     6.5 Officer Actions.  Subject to the other provisions hereof (including any
provisions hereof regarding actions that would otherwise require the approval of
the Members or the Managers),  the President and Chief  Executive  Officer shall
have the authority to take the following actions for the Company, subject to the
direction  and control of the Board or the  revocation  (in whole or in part) by
the Board of such authority:

     (a) Managing the day-to-day operations of the Company,  insofar as the same
are consistent with the Annual Budget;

     (b) Obtaining all permits, certificates,  licenses and regulatory approvals
necessary  to carry out the business of the Company,  and  preparing  and timely
providing such filings, reports,  statements and information to any Governmental
Authority as may be required in connection therewith from time to time;

     (c)  Protecting  and preserving the title and interests of the Company with
respect to the Company Assets, insofar as the same is consistent with the Annual
Budget;

     (d)  Negotiating  contracts  of the  Company  in  the  ordinary  course  of
business, insofar as the same is consistent with the Annual Budget;

     (e) Executing and  delivering  approved  documents  requiring  execution on
behalf of the Company, insofar as the same is consistent with the Annual Budget;

     (f) Taking such actions as may be  delegated  or assigned to the  President
and  Chief  Executive  Officer  or the other  Officers  from time to time by the
Board;

     (g) Taking any other  actions  similar in character to those  identified in
clauses (a) to (f) above and other  actions  involving  dollar limits lower than
the limits specified in Section 6.2(a),  other than those requiring  approval by
the Board or by a Member Vote under this Agreement;  provided, however, that the
President  and  Chief  Executive  Officer  (or  other  Officers)  shall  have no
authority to take any action on behalf of the Company that was not authorized by
the Annual Budget or pursuant to a separate written  delegation of authorization
by the Board;  provided further,  however, that without the unanimous consent of
the  Board to take any  action  on behalf  of the  Company  (including,  without
limitation,  causing  the  Company to make any  acquisition  or  disposition  of
Company Assets) which has the result (or would reasonably be expected to result)
in a reduction of the aggregate distributions to be made or that would have been
made to the Class A Member under Section 5.4 by 15% or more for any Fiscal Year;
and

     (h) Performing such ancillary and ministerial acts, and making,  executing,
acknowledging  and delivering all contracts,  assignments and other  agreements,
instruments or

                                     - 43 -
<PAGE>

documents as are reasonably  necessary or appropriate to carry out the duties of
the President and Chief Executive Officer and other Officers hereunder.

     6.6   Indemnification.

     (a) To the fullest extent  permitted by Law but subject to the  limitations
expressly  provided in this  Agreement,  each Person who serves in any  capacity
described  below shall be indemnified  and held harmless by the Company from and
against any and all losses,  claims,  damages,  liabilities  (joint or several),
expenses  (including  reasonable  legal fees and  expenses),  judgments,  fines,
penalties,  interest,  settlements  and other  amounts  arising from any and all
Claims, whether civil, criminal,  administrative or investigative,  in which any
such Person may be involved,  or is  threatened  to be  involved,  as a party or
otherwise, by reason of such Person's status as (i) a present or former Manager,
(ii) a present  or former  Officer  of the  Company,  (iii) a present  or former
employee,  agent or trustee of the Company  (such Persons who are not present or
former employees,  Officers or Managers of the Company are to be indemnified and
held harmless,  and to be  Indemnitees  for purposes of this Agreement only upon
approval by the Board),  or (iv) a Person  serving at the request of the Company
in another entity in a similar  capacity as that referred to in the  immediately
preceding clauses (i) or (ii), provided,  that in each case the Person described
in the immediately preceding clauses (i), (ii), (iii) or (iv) (the "Indemnitee")
acted in good faith and in a manner which such Indemnitee  believed to be in, or
not  opposed to, the best  interests  of the Company  and,  with  respect to any
criminal  proceeding,  had no  reasonable  cause to  believe  such  Indemnitee's
conduct was  unlawful.  The  termination  of any action,  suit or  proceeding by
judgment,  order, settlement,  conviction or upon a plea of nolo contendere,  or
its equivalent,  shall not create a presumption  that the Indemnitee  acted in a
manner contrary to that specified  above. Any  indemnification  pursuant to this
Section 6.6 shall be made only out of the Company Assets.

     (b) To the fullest extent permitted by Law, expenses (including  reasonable
legal fees and expenses)  incurred by an Indemnitee who is indemnified  pursuant
to Section  6.6(a) in defending any Claim shall,  from time to time, be advanced
by the Company prior to the final  disposition of such Claim upon receipt by the
Company of an undertaking by or on behalf of the Indemnitee to repay such amount
if it shall be determined  that the Indemnitee is not entitled to be indemnified
as authorized in this Section 6.6.

     (c) The  indemnification  provided by this Section 6.6 shall be in addition
to any other rights to which an Indemnitee  may be entitled under any agreement,
as a matter of Law or otherwise, both as to actions in the Indemnitee's capacity
as (i) a present or former Manager, (ii) a present or former Officer,  employee,
agent or trustee of the Company, or (iii) a Person serving at the request of the
Company in another entity in a similar capacity,  and as to actions in any other
capacity, and shall continue as to an Indemnitee who has ceased to serve in such
capacity  and shall inure to the benefit of the heirs,  successors,  assigns and
administrators of the Indemnitee.

     (d) The Company  may  purchase  and  maintain  insurance,  on behalf of the
Managers,  the  Officers  and such other  Persons as the Board shall  determine,
against  any  liability  that may be  asserted  against or  expense  that may be
incurred by such Person in connection with the

                                     - 44 -
<PAGE>

Company's activities,  regardless of whether the Company would have the power to
indemnify  such Person  against  such  liability  under the  provisions  of this
Agreement.

     (e) For purposes of this  Section 6.6, the Company  shall be deemed to have
requested  an  Indemnitee  to serve as  fiduciary  of an employee  benefit  plan
whenever the  performance by the Indemnitee of such  Indemnitee's  duties to the
Company  also  imposes  duties  on,  or  otherwise  involves  services  by,  the
Indemnitee to the plan or  participants  or  beneficiaries  of the plan;  excise
taxes  assessed  on an  Indemnitee  with  respect to an  employee  benefit  plan
pursuant  to  Applicable  Law shall  constitute  "fines"  within the  meaning of
Section 6.6(a); and action taken or omitted by the Indemnitee with respect to an
employee  benefit  plan in the  performance  of such  Indemnitee's  duties for a
purpose  reasonably  believed by such  Indemnitee  to be in the  interest of the
participants  and  beneficiaries of the plan shall be deemed to be for a purpose
which is in, or not opposed to, the best interests of the Company.

     (f) In no event may an Indemnitee subject the Members to personal liability
by reason of the indemnification provisions set forth in this Agreement.

     (g) An Indemnitee shall not be denied  indemnification  in whole or in part
under this Section 6.6 because the Indemnitee had an interest in the transaction
with  respect  to  which  the  indemnification  applies  if the  transaction  is
otherwise permitted by the terms of this Agreement.

     (h)  The  provisions  of this  Section  6.6  are  for  the  benefit  of the
Indemnitees,  their heirs, successors,  assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.

     (i) No  amendment,  modification  or  repeal  of  this  Section  6.6 or any
provision  hereof  shall in any manner  terminate,  reduce or impair  either the
right of any past, present or future Indemnitee to be indemnified by the Company
or the obligation of the Company to indemnify any such  Indemnitee  under and in
accordance  with the  provisions  of this  Section 6.6 as in effect  immediately
prior to such  amendment,  modification or repeal with respect to claims arising
from or  relating  to  matters  occurring,  in whole  or in part,  prior to such
amendment,  modification  or  repeal,  regardless  of when  such  claims  may be
asserted.

     (j) No  Manager or Member  shall be liable to the  Company or to any Member
for any  loss  suffered  by the  Company  unless  such  loss is  caused  by such
Manager's  or  Member's  gross  negligence,   willful  misconduct,   intentional
violation  of law or  material  breach of this  Agreement.  No Manager or Member
shall be liable for errors in judgment or for any acts or omissions  that do not
constitute gross negligence, willful misconduct, intentional violation of law or
material  breach of this  Agreement.  Any  Manager  or Member may  consult  with
counsel and accountants in respect of Company affairs and, provided such Manager
or Member acts in good faith reliance upon the advice or opinion of such counsel
or accountants, such Manager or Member shall not be liable for any loss suffered
by the  Company in reliance  thereon.  Notwithstanding  anything  stated in this
Agreement to the contrary,  none of the Quest Members, nor any Manager appointed
by the Class B Members,  nor any existing or former employee of QRC or any Quest
Members  (to the extent  they are present or former  employees  of the  Company)
shall be entitled to any  indemnification  by the  Company  with  respect to any
Claims  arising  from or  relating to the  formation  or  capitalization  of the
Company, including, without limitation, the transactions

                                     - 45 -
<PAGE>

contemplated in the Contribution Agreement,  the Class A Unit Purchase Agreement
and the other Related Agreements or the Senior Debt Documents.

     (k) The provisions of the indemnification  provided in this Section 6.6 are
intended  by the  Members  to apply even if such  provisions  have the effect of
exculpating the Indemnitee  from legal  responsibility  for the  consequences of
such  Person's  negligence,  fault or other  conduct,  subject  to limits  under
Applicable Law.

     6.7  Reliance by Third Parties.

     (a)  Notwithstanding anything to the contrary in this Agreement, any Person
dealing  with the Company  shall be entitled  to assume that the  President  and
Chief Executive  Officer or any Person  authorized by the Board to act on behalf
of and in the name of the Company (each an  "Authorized  Person") has full power
and  authority  to  encumber,  sell or  otherwise  use in any manner any and all
assets of the Company and to enter into any  authorized  contracts  on behalf of
the  Company,  and such Person  shall be  entitled  to deal with any  Authorized
Person as if it were the  Company's  sole party in  interest,  both  legally and
beneficially. In no event shall any Person dealing with any Authorized Person be
obligated to ascertain  that the terms of this Agreement have been complied with
or to inquire into the necessity of any act or action of any Authorized Person.

     (b) Each and every  certificate,  document or other instrument  executed on
behalf of the Company by any Authorized  Person shall be conclusive  evidence in
favor of any and every Person relying thereon or claiming thereunder that (i) at
the  time of the  execution  and  delivery  of  such  certificate,  document  or
instrument,  this  Agreement  was in full  force  and  effect,  (ii) the  Person
executing and  delivering  such  certificate,  document or  instrument  was duly
authorized  and  empowered  to do so for and on behalf of the  Company and (iii)
such  certificate,  document or  instrument  was duly  executed and delivered in
accordance  with the terms and  provisions of this Agreement and is binding upon
the Company.

                                   ARTICLE 7
                 TAXES, BOOKS, RECORDS, ACCOUNTING AND REPORTING

          7.1 Books and Records; Right to Audit; Fiscal Year.

     (a) The  Company  shall  keep,  at the  principal  office or other  offices
determined by the Board,  and make  available to each Member,  or its designated
agent, at any time during normal business hours in that office,  within ten days
after  written  request  by such  Member,  books of  account  and other  Company
records.  The copying by any Member, or its designated agent, of any part or all
of such  records,  at the  personal  expense  of  such  Member  is  specifically
authorized.  Each Member, or its designated agent, shall have the right to audit
the books and records of the Company if the audit is  commenced on or before the
end of the second full Fiscal Year following the Fiscal Year to which such books
and records relate. Any expense incurred by such Member, or its designated agent
in  connection  with the  inspection  of the  Company's  books or  records or in
connection  with auditing such books and records shall be paid by such Member or
such agent and not by the Company.

                                     - 46 -
<PAGE>

     (b) The books and records of the Company  shall be maintained in accordance
with U.S. GAAP.

     (c) The fiscal year of the Company for U.S. GAAP purposes shall commence as
of June 1 and expire on May 31, unless  otherwise  permitted  under the Code and
approved by the Board (the "Fiscal Year").

     7.2  Tax  Returns. The Board will  timely  prepare and file (or cause to be
timely prepared and filed) appropriate federal,  state and local tax returns for
the  Company.  The Board shall  determine  whether  the  Company  shall make any
elections under the Code.

     7.3  Tax Matters  Member. The Members shall  designate by a Member Vote one
Member as the "Tax  Matters  Member" or "TMM" to act on behalf of the Company as
"tax  matters  partner"  pursuant  to  section  6231 of the Code.  The TMM shall
initially be CPL. The TMM and other Members shall use all reasonable  efforts to
comply with  responsibilities  outlined in this  Section 7.3 and  sections  6222
through 6233 and 6050K of the Code (and the Treasury Regulations thereunder) and
in doing so shall incur no liability to any other  Member.  Notwithstanding  the
TMM's  obligation  to use  all  reasonable  efforts  in the  fulfillment  of its
responsibilities,  the TMM shall not be required to incur any  expenses  for the
preparation for, or pursuance of, administrative or judicial proceedings, unless
the Members agree on a method for sharing such expenses.

     (a)  Information  Request by the TMM.  The Members  shall  furnish the TMM,
within ten days from the  receipt of the  request,  the  information  (including
information  specified in section  6230(e) of the Code on member  identification
and section  6050K of the Code for  transfers of member  interests)  the TMM may
reasonably request to comply with the requirements on furnishing  information to
the IRS.

     (b)  TMM Agreements with the IRS.

          (i) The TMM  shall  not  agree  to any  extension  of the  statute  of
     limitations for making assessments on behalf of the Company without a prior
     Member  Vote.  The TMM  shall not bind any  other  Member  to a  settlement
     agreement in a tax audit without  obtaining the written  concurrence of any
     such Member.

          (ii) Any other Member who enters into a settlement  agreement with the
     Secretary of the Treasury with respect to any Company items,  as defined in
     section 6231(a)(3) of the Code, shall notify the other Members of the terms
     within 90 days from the date of such settlement.

     (c) Inconsistent  Treatment of Company Items. If any Member intends to file
a notice of  inconsistent  treatment  under  section  6222(b) of the Code,  such
Member shall,  prior to the filing of such notice,  notify the TMM of the actual
or potential  inconsistency of the Member's intended treatment of a Company item
with the treatment of that item by the Company.  Within one week of receipt, the
TMM shall remit copies of such notification to the other Members.

     (d) Request for Administrative Adjustment. No Member shall file pursuant to
section 6227 of the Code a request for an  administrative  adjustment of Company
items without

                                     - 47 -
<PAGE>

first notifying all other Members. If such request is approved by a Member Vote,
the TMM shall file the request on behalf of the Company. If unanimous consent is
not obtained  within 30 days from such notice,  or within the period required to
timely file the request, if shorter,  any Member,  including the TMM, may file a
request for administrative adjustment on its own behalf.

     (e) Judicial  Proceedings.  Any Member  intending to file a petition  under
section  6226 or 6228 of the Code or any other Code  section with respect to any
Company item, or other tax matter involving the Company,  shall notify the other
Members prior to such filing of the nature of the  contemplated  proceeding.  In
the case  where the TMM is the  Member  intending  to file such  petition,  such
notice  shall be given within a  reasonable  time to allow the other  Members to
participate in the choice of the forum for such petition.  If the Members do not
agree with the forum  chosen by the TMM,  then the forum  shall be chosen by the
TMM.  If a Member  intends to seek  review of any court  decision  rendered as a
result of such  proceeding,  the Member  shall  notify the other Member prior to
seeking such review.

     7.4 Withholding. Notwithstanding any other provision of this Agreement, the
Board is authorized  to take any action that it determines in its  discretion to
be necessary or appropriate to cause the Company to comply with any  withholding
requirements established under the Code or any other federal, state or local law
including, without limitation, pursuant to sections 1441, 1442, 1445 and 1446 of
the Code.  To the extent that the Company is required or elects to withhold  and
pay over to any taxing  authority any amount  resulting  from the  allocation or
distribution of income to any Member (including,  without limitation,  by reason
of section 1446 of the Code), the amount withheld will be treated by the Company
as a  distribution  of  cash  pursuant  to  Section  5.4 in the  amount  of such
withholding from such Member.

     7.5  Company Bank Accounts. The Company may establish,  subject to approval
by the Board, one or more separate bank and investment accounts and arrangements
for the Company,  which shall be maintained in the Company's name with financial
institutions  and  firms  that the  Board  determines.  The  Company  shall  not
commingle the Company's funds with the funds of any Manager or Member.

     7.6  Other Reports.

     (a)  As soon as practicable,  but in no event  later than 90 days after the
close of each Fiscal Year of the Company,  the Board shall cause to be mailed or
furnished to each Member an annual report containing financial statements of the
Company for such Fiscal Year of the Company,  presented in accordance  with U.S.
GAAP, including a balance sheet and statements of operations, Company equity and
cash  flows,  such  statements  to be  audited by a firm of  independent  public
accountants selected by the Board.

     (b)  As soon as  practicable, but in no event  later than 45 days after the
close of each Quarter  except the last  Quarter of each Fiscal  Year,  the Board
shall  cause to be  mailed  or  furnished  to each  Member  a report  containing
unaudited financial  statements of the Company and such other information as may
be required by Applicable Law, regulation or rule, or as the Board determines to
be necessary or appropriate.

                                     - 48 -
<PAGE>

     (c) As soon as  practicable,  but in no event  later than 45 days after the
close of each month,  the Board shall  cause to be mailed or  furnished  to each
Member a report  containing  unaudited  financial  statements of the Company and
such other information as the Board determines to be necessary or appropriate.

     (d) As soon as  practicable,  but in no event  later than 45 days after the
close of each Quarter,  a report describing in reasonable detail the progress of
all drilling operations conducted during such Quarter,  including a statement of
the cost of wells  completed or abandoned and an explanation of the  abandonment
of any well abandoned during such Quarter which had produced,  and a forecast of
drilling activities during the next Quarter.

     (e) As soon as practicable, but in no event later than each February 15 and
August 31 of each year commencing on August 31, 2004, an engineering and reserve
report covering all of the Company oil and gas properties  (consistent  with SPE
Reserve Definition Guidelines and industry practices) prepared and provided by a
mutually agreed  independent  engineering  firm (such reports to be certified to
the Company and each of the Members).

                                   ARTICLE 8
                     RESTRICTIONS ON TRANSFERS OF INTERESTS

     8.1  Transfers of Member Interests.

     (a)  General  Restriction.  Any  Transfer of Class A Units or Class B Units
must  be in  accordance  with  the  Transfer  Restrictions,  including,  without
limitation,  the terms and  conditions  of the  provisions  of Exhibit E and the
other provisions of this Agreement;  and any attempted Transfer of Class A Units
or Class B Units that is not made in accordance  with the Transfer  Restrictions
and this Agreement shall be null and void and shall have no effect.

     (b)  Change of  Control.  A Change  of  Control  of a Member  will have the
effects specified in the Transfer Restrictions.

     (c)  Bankruptcy.  A Bankruptcy of a Member or any Person that Controls such
Member will have the effects specified in the Transfer Restrictions.

     (d) Admission of Member.  Any Person who has been assigned Class A Units or
Class B Units in  accordance  with the  terms  and  conditions  of the  Transfer
Restrictions,  shall be  admitted to the Company as a Member as provided in this
Agreement  and  the  Transfer  Restrictions,   upon  receipt  by  the  Board  of
counterpart  signature  pages  and  other  documents,   in  form  and  substance
satisfactory  to the Board,  as may be required to effect such  admission and to
evidence such  assignee's  (i)  acceptance of the terms and  conditions of, (ii)
authority  to  enter  into and  (iii)  agreement  to the  consents  and  waivers
contained in this  Agreement,  the  Non-Competition  Agreement  and the Transfer
Restrictions.

     8.2 Buy-Sell.  At any time following a Buy-Sell Point,  the Class A Members
(collectively),  on the one hand, or the Class B Members (collectively),  on the
other hand (either,  the  "Buy-Sell  Offeror") may deliver to the other class of
Members  (the  recipients(s)   being  the  "Buy-Sell  Offeree")  written  notice
("Buy-Sell Notice") of an intent to sell all of the Buy-Sell

                                     - 49 -
<PAGE>

Offeror's Units to the Buy-Sell Offeree, or to buy all of the Buy-Sell Offeree's
Units issued and held by the Buy-Sell  Offeree,  at a specified price ("Buy-Sell
Price")  calculated in accordance  herewith and any other terms of such transfer
(the  "Specified  Buy-Sell  Terms").  The Buy-Sell  Price shall be calculated as
follows:  (i) the Buy-Sell Offeror shall state in the Buy-Sell Notice an assumed
value of the Company ("Assumed Value"), and (ii) the Buy-Sell Price with respect
to all of the issued and  outstanding  Class B Units shall be an amount equal to
seventy percent (70%) of the Assumed Value,  and the Buy-Sell Price with respect
to all of the issued and  outstanding  Class A Units shall be an amount equal to
thirty  percent (30%) of the Assumed  Value.  Such  Buy-Sell  Notice shall set a
closing  date not less than sixty (60) nor more than one  hundred  twenty  (120)
days from the  Buy-Sell  Notice  date.  The  Buy-Sell  Offeree  shall  then have
twenty-five  (25) days  following the date of the Buy-Sell  Notice to notify the
Buy-Sell  Offeror whether such Buy-Sell Offeree elects to buy, in the aggregate,
all of the Units of the Buy-Sell  Offeror,  or sell all of their (its) Units, at
the Buy-Sell  Price for the  applicable  class of Units and  Specified  Buy-Sell
Terms. Upon such election, the Members shall close the transaction in accordance
with the terms stated in the Buy-Sell Notice.  If the Buy-Sell Offeree does not,
in the aggregate,  elect to buy all of the Units of the Buy-Sell  Offeror,  then
the Buy-Sell  Offeror shall (i) have no obligation to sell any of its Units, and
(ii) have the right to acquire all of the issued and outstanding  Units from the
Buy-Sell Offeree. If the Buy-Sell Offeree, on one hand, or the Buy-Sell Offeror,
on the other  hand,  will be the  selling  Member(s)  of their  Units  under the
provisions  set forth  above  (either a "Selling  Member"),  and if the  Selling
Member is the holder of a loan to the  Company or the other  Member  (including,
without  limitation,  the  Subordinated  Note and  Subordinated  Debt),  then in
addition to the payment of the  Buy-Sell  Price as a condition  to closing,  the
non-transferring  (purchasing)  Member(s)  shall  pay  the  Selling  Member  any
outstanding principal and accrued but unpaid interest on all such loans and upon
receipt of such payments, the Selling Member shall assign all of the outstanding
principal  (and  accrued   interest   thereon)  under  any  such  loans  to  the
non-transferring (purchasing) Member(s).

                                   ARTICLE 9
                     DISSOLUTION, WINDING-UP AND TERMINATION

     9.1   Dissolution.

     (a)  The Company shall dissolve,  and (subject to Section 10.6) its affairs
shall be wound  up,  on the  first to  occur  of the  following  events  (each a
"Dissolution Event"):

          (i)  a Member Vote to dissolve the Company; and

          (ii) entry of a decree of judicial  dissolution  of the Company  under
     section  18-802 of the Act;  provided  that the Board  shall not  submit an
     application  for a decree  of  judicial  dissolution  unless  and until all
     amounts payable under the obligations of the Company have been indefeasibly
     paid in full.

     (b)  The Company shall not dissolve other than pursuant to Section 9.1(a).

     (c)  Each Member covenants  and agrees that it will not cause a dissolution
of the  Company,  directly or  indirectly,  by breaching  any  provision of this
Agreement.

                                     - 50 -
<PAGE>

     9.2   Winding-Up and Termination.

     (a)   The  winding up of the  Company  shall  commence  on  the  day of the
applicable  Dissolution  Event, but this Agreement shall not terminate until the
Company  Assets  have  been  distributed  in  accordance  with the terms of this
Section  9.2.  The Board shall act as  Liquidator  or it may appoint one or more
Members as  Liquidator;  provided,  however,  that (x) no Member with respect to
which a  Bankruptcy  event has  occurred  shall  serve as (or act with any other
Person as) the Liquidator.  The Liquidator shall immediately  proceed to wind up
and terminate the affairs of the Company and liquidate the assets of the Company
and  shall  apply  and  distribute  the  proceeds  of such  liquidation,  unless
otherwise required by mandatory  provisions of applicable law, by the end of the
taxable year during which the liquidation  occurs (or, if later,  within 90 days
after the date of such liquidation) as provided herein and in the Act. The costs
of liquidation  shall be borne as a Company expense.  Until final  distribution,
the Liquidator  shall continue to operate the business and assets of the Company
with all of the power and  authority  of the  Board.  Maintenance  of  property,
borrowing and  expenditures of Company funds for legitimate  Company purposes to
effectuate  or  facilitate  the  winding up or the  liquidation  of the  Company
affairs shall be authorized if the  Liquidator,  in the exercise of its business
judgment,  believes  that the  interests  of the  Company  would be best  served
thereby,  and such actions shall not be construed to involve a  continuation  of
the Company. The steps to be accomplished by the Liquidator are as follows:

          (i) as promptly as possible  after  dissolution  and again after final
     winding up, the Liquidator shall cause a proper  accounting to be made by a
     recognized  firm of certified  public  accountants  of the Company  Assets,
     liabilities  and  operations  through the last calendar day of the month in
     which the  dissolution  occurs or the final  winding  up is  completed,  as
     applicable;

          (ii)  sell  or  otherwise  dispose  of all  Company  assets,  and  any
     resulting  gain or loss  from  such  sales  or other  dispositions  will be
     computed and allocated to the Members in accordance with Section 5.2(c).

          (iii) the Liquidator  shall  discharge from the Company's funds all of
     the debts,  liabilities  and  obligations  of the  Company  (including  all
     expenses  incurred in winding up) or otherwise make adequate  provision for
     payment and discharge thereof (including the establishment of a cash escrow
     fund for  contingent  liabilities  in such  amount and for such term as the
     Liquidator may reasonably determine); and

          (iv)  all  remaining   Company  Assets   (including   cash)  shall  be
     distributed  among the Members so that the cumulative  total  distributions
     and liquidating distributions received by each Member equals the cumulative
     amount it is  entitled  to receive  under  Section  5.4  without  regard to
     Section 5.4(a)(i) or Section 5.4(b)(i).

     (b) The distribution of cash or other assets to a Member in accordance with
the provisions of this Section 9.2  constitutes a complete  return to the Member
of its Capital  Contributions  and a complete  distribution to the Member of its
Member Interest and all the Company Assets and constitutes a compromise to which
all Members have consented pursuant to section 18-502(b) of the Act.

                                     - 51 -
<PAGE>

     9.3  Certificate of Cancellation.  Upon  completion of the  distribution of
Company  Assets as provided  herein,  the  Liquidator  (or such other  Person or
Persons  as  the  Act  may  require  or  permit)  shall  file a  certificate  of
cancellation  with the  Secretary of State of the State of Delaware,  cancel any
other  filings made  pursuant to Section 2.5, and take such other actions as may
be necessary to terminate the existence of the Company.  Upon the filing of such
certificate of  cancellation,  the existence of the Company shall terminate (and
the Term shall end).

     9.4  Certain Matters Concerning a Member.

     (a)  Notwithstanding any other provisions of this Agreement, the Bankruptcy
of a Member  shall not cause such Member to cease to be a Member of the Company,
and upon the  occurrence  of such an event,  the  business of the Company  shall
continue without dissolution.

     (b) The dissolution, liquidation or termination of a Member shall not cause
the  termination or dissolution of the Company,  and the business of the Company
shall continue without dissolution.

     9.5 Waiver of Partition. To the maximum extent permitted by Applicable Law,
each Member hereby waives any right to partition of the Company Assets.

                                   ARTICLE 10
                                OTHER PROVISIONS

     10.1  Entire  Agreement. This Agreement and the Exhibits hereto (along with
the Class A Unit  Purchase  Agreement,  the  Contribution  Agreement,  the other
Related  Agreements  and the various  agreements to be entered into on or before
the  Closing  Date under the Class A Unit  Purchase  Agreement)  constitute  the
entire  agreement  between the Members with respect to the subject matter hereof
and supersedes and replaces any prior agreements or  understandings  relating to
the subject matter hereof (including, without limitation, this Agreement amends,
restates, supersedes and replaces in its entirety, the Original Agreement).

     10.2 Governing Law. This Agreement is governed by and shall be construed in
accordance  with the laws of the  State of  Delaware.  In the  event of a direct
conflict   between  the   provisions  of  this   Agreement  and  any  mandatory,
non-waivable  provision of the Act, such provision of the Act shall control.  If
any  provision  of the Act  provides  that it may be varied or  superseded  in a
limited liability company agreement (or otherwise by agreement of the members or
managers  of a  limited  liability  company),  such  provision  shall be  deemed
superseded  and waived in its  entirety if this  Agreement  contains a provision
addressing the same issue or subject matter.

     10.3 Non-Waiver. No waiver by any Member hereto of any one or more defaults
by the  other  Member  in the  performance  of any  of the  provisions  of  this
Agreement  shall be construed as a waiver of any other default whether of a like
kind or different nature.

     10.4  Severability.  If any provision of this Agreement or the  application
thereof to any Member or  circumstance is held invalid or  unenforceable  to any
extent,  (a)  the  remainder  of this  Agreement  and  the  application  of that
provision to other Members or circumstances is not

                                     - 52 -
<PAGE>

affected  thereby,  and (b) the Members shall negotiate in good faith to replace
that provision with a new provision that is valid and  enforceable and that puts
the Members in substantially  the same economic,  business and legal position as
they would have had if the original provision had been valid and enforceable.

     10.5  Headings;  Exhibits.  The headings used for the sections and articles
herein  are for  convenience  and  reference  purposes  only and shall in no way
affect the meaning or  interpretation  of the provisions of this Agreement.  Any
and  all  Exhibits  referred  to in  this  Agreement  are,  by  such  reference,
incorporated herein and made a part hereof for all purposes.

     10.6 Winding Up Arrangements.  All indemnity and audit rights shall survive
the  termination  of this  Agreement for the time period  provided  herein.  All
obligations  provided in this  Agreement  shall remain in effect  following  the
expiration or termination of this Agreement to the extent necessary to give full
force and effect to the rights and obligations undertaken by the Members.

     10.7 No Third Party  Beneficiaries.  Nothing in this  Agreement  (except as
provided in Section 6.7) shall provide any benefit to any third party or entitle
any third party to any claim,  cause of action,  remedy or right of any kind, it
being the intent of the Members that this Agreement  shall not be construed as a
third party beneficiary contract.

     10.8 Counterparts.  This Agreement may be executed in several counterparts,
each of  which  is an  original  and all of  which  constitute  one and the same
instrument.

     10.9 Amendment or Restatement.  This Agreement or the Delaware  Certificate
may be amended only by a written instrument approved by a Member Vote.

     10.10  Dispute  Resolution.  The Members  shall use the dispute  resolution
procedures  set forth in  Exhibit C (the  "Dispute  Resolution  Procedures")  to
resolve  in good  faith  any  dispute,  controversy  or  claim  related  to this
Agreement,  including,  without  limitation,  any  dispute  over the  payment of
indemnification  pursuant to the provisions of Section 6.6, except to the extent
otherwise  set forth  herein,  and except with respect to matters that are to be
resolved  solely in the  discretion of a particular  class of Member(s) or their
designated representatives to the Board. Nothing herein is intended to limit the
Members from resolving informally between them any dispute, controversy or claim
that may  arise,  and  thereby  avoiding  the  necessity  of using  the  Dispute
Resolution Procedures.

     10.11  Notices.  Except  as  expressly  set forth to the  contrary  in this
Agreement,  all  notices,  requests or consents  provided for or permitted to be
given  under this  Agreement  must be in writing  and must be  delivered  to the
recipient at the address set forth in Exhibit A in person, by courier or mail or
(with written confirmation of delivery) by facsimile, telegram, telex, cablegram
or similar  transmission;  and a notice,  request or  consent  given  under this
Agreement  is  effective  on receipt by the Person to receive it.  Whenever  any
notice  is  required  to be  given  by Law,  the  Delaware  Certificate  or this
Agreement,  a written waiver  thereof,  signed by the Person entitled to notice,
whether before or after the time stated therein,  shall be deemed  equivalent to
the giving of such notice. By giving each other Member notice thereof,  a Member
may change its  address for notices or add  additional  addresses  for copies of
notices.

                                     - 53 -
<PAGE>

     10.12  Further  Assurances.  In  connection  with  this  Agreement  and the
transactions  contemplated  hereby,  each Member  shall  execute and deliver any
additional documents and instruments and perform any additional acts that may be
necessary  or  appropriate  to  effectuate  and perform the  provisions  of this
Agreement and those transactions.

     10.13  Waiver of Certain  Rights.  To the extent  permitted  by the Act and
applicable Law, each Member irrevocably waives any right it may have to maintain
any  action for  dissolution  of the  Company.  In  addition,  no Member nor its
Affiliates  shall,  in any  event,  be liable to any other  Member or any of its
respective Affiliates for any indirect, special or consequential damages of such
other member,  including,  but not limited to, loss of revenue, cost of capital,
loss of business  reputation or opportunity whether such liability arises out of
contract, tort (including negligence), strict liability or otherwise.

     10.14 Creditors.  None of the provisions of this Agreement shall be for the
benefit of, or shall be enforceable by, any creditor of the Company.

     10.15 Consent of Members.  To the extent certain matters or actions require
the  approval  of the  Class B  Members,  collectively  or as a group  (such  as
appointment  of certain  Managers on behalf of the Class B Members or exercising
the rights under Section 8.2), such matter shall be deemed approved by the Class
B Members upon the approval of those Class B Members who, in the aggregate, have
a Class B Unit Sharing  Ratio in excess of 50 percent.  To the extent that there
is more than one holder of the Class A Units,  then those  matters  that require
the approval of the Class A Members,  as a group (such as appointment of certain
Managers on behalf of the Class A Members or exercising the rights under Section
8.2),  such  matter  shall be deemed  approved  by the Class A Members  upon the
approval of those Class A Members  who,  in the  aggregate,  have a Class A Unit
Sharing Ratio in excess of 50%.

     10.16 Confidentiality.

     (a) Each Member agrees that it will not disclose to any Person or otherwise
use to its benefit or to the benefit of any third party, including any Affiliate
of such Member, in any way whatsoever any Confidential Information,  without the
consent of the Board or the President and Chief Executive Officer, except as may
be necessary to comply with any  Applicable  Law,  directive or procedure of any
Governmental Authority (including,  without limitation, any disclosures that are
required or  necessitated  under any applicable  securities  laws or tax laws or
regulations relating to the structure of any transaction  contemplated herein or
otherwise).   Each  Member  will  notify  the  Company  before  disclosing  such
information  pursuant to any such Applicable Law, directive or procedure to give
the Company the opportunity to seek a protective  order.  The  restrictions  set
forth in this Section 10.16 shall not apply to information that (i) is, or after
the date of this Agreement,  becomes  generally  available to the public,  other
than  through  the  wrongful  act of any  Person,  (ii)  after  the date of this
Agreement,  is communicated to the Member  disclosing such  information in a non
confidential manner by a third party without any breach of this Section 10.16 or
breach of any  confidentiality  obligations  of such  third  party to any of the
Members  or (iii) was or is already in the  possession  of the Person  receiving
such  information  at the time of its disclosure by the Member  disclosing  such
information, provided,

                                     - 54 -
<PAGE>

that such Person came into  possession of such  information  through means other
than that which would  constitute a breach of this Section  10.16 or a breach of
the confidentiality obligations of any third party to the Member disclosing such
information. In addition, a Member may disclose such Confidential Information to
its respective  Affiliates,  and its and their respective  officers,  directors,
partners,  agents,  members,  managers,  employees,  advisors,  representatives,
co-investors,  lenders and potential  sources of financing as it deems necessary
(collectively,   the   "Member   Representatives"),   insofar  as  such   Member
Representatives have been informed of the confidential nature of the information
and have agreed to maintain  the  confidentiality  thereof and  restrict the use
thereof as contemplated herein; and the Member who discloses such information to
its Member  Representatives  shall be liable for any breach of these obligations
by any of its Member  Representatives.  This  Section  10.16 shall  survive with
respect to a former  Member  for a period of five (5) years  after the date that
such Member ceases to be a Member.

     (b) A Member that subsequently ceases to be a Member shall promptly destroy
(and provide a certificate  of  destruction  to the Company with respect to), or
return to the Company, all Confidential Information in its possession.

     (c) The Members agree that no adequate remedy at law exists for a breach or
threatened  breach  of  any  of  the  provisions  of  this  Section  10.16,  the
continuation of which  unremedied  will cause the Company to suffer  irreparable
harm.  Accordingly,  the Members  agree that the Company  shall be entitled,  in
addition  to  other  remedies  that  may be  available  to  them,  to  immediate
injunctive relief from any breach of any of the provisions of this Section 10.16
and to specific  performance of their rights hereunder,  as well as to any other
remedies available at law or in equity.

                            [Signature Page Follows]

                                     - 55 -
<PAGE>

          IN WITNESS WHEREOF, the Members have executed this Agreement as of the
     Effective Date.

                               Class A Member:

                               Cherokee Energy Partners LLC
                               a Delaware limited liability company

                               By:  /s/ Christopher J. Picotte
                                    -------------------------------
                               Name:      Christopher J. Picotte
                               Title:     Vice President and Treasurer

                               Class B Members:

                               Quest Energy Service, Inc.
                               a Kansas corporation

                               By:  /s/ Jerry Cash
                                    -------------------------------
                               Name:      Jerry D. Cash
                               Title:     Co-Chief Executive Officer

                               STP Cherokee, Inc.
                               an Oklahoma corporation

                               By:  /s/ Jerry Cash
                                    -------------------------------
                               Name:      Jerry D. Cash
                               Title:     Co-Chief Executive Officer

                               Ponderosa Gas Pipeline Company, Inc.
                               a Kansas corporation

                               By:  /s/ Jerry Cash
                                    -------------------------------
                               Name:      Jerry D. Cash
                               Title:     Co-Chief Executive Officer

                               Quest Oil & Gas Corporation
                               a Kansas corporation

                               By:  /s/ Jerry Cash
                                    -------------------------------
                               Name:      Jerry D. Cash
                               Title:     Co-Chief Executive Officer

<PAGE>

                               Producers Service, Incorporated
                               a Kansas corporation

                               By:  /s/ Jerry Cash
                                    -------------------------------
                               Name:      Jerry D. Cash
                               Title:     Co-Chief Executive Officer

                               J-W Gas Gathering, L.L.C.
                               a Kansas limited liability company

                               By:  /s/ Jerry Cash
                                    -------------------------------
                               Name:      Jerry D. Cash
                               Title:     Manager

<PAGE>

<TABLE>
<CAPTION>

                                    EXHIBIT A
                                 UNIT OWNERSHIP

                                                                                                   Net Agreed Value
       Name and Address of Members               Class A Unit              Class B Unit               of Capital
                                                   Ownership                 Ownership               Contributions
                                                   ---------                 ---------               -------------
<S>                                          <C>                          <C>                         <C>
Cherokee Energy Partners LLC                 10,000 Class A Units         0 Class B Units             $100.00
200 Clarendon Street, 55th Floor
Boston, MA  02117
Attention:  General Counsel
Telephone:  617.531.6316
Facsimile:  617.867.4698

Quest Energy Service, Inc.                      0 Class A Units          196 Class B Units            $1,000,000
5901 North Western, Suite 200
Oklahoma City, OK  73118
Attention:  Jerry D. Cash
Telephone:  405.840.9894
Facsimile:  405.840.9897

STP Cherokee, Inc.                              0 Class A Units         3,726 Class B Units           $19,000,000
5901 North Western, Suite 200
Oklahoma City, OK  73118
Attention:  Jerry D. Cash
Telephone:  405.840.9894
Facsimile:  405.840.9897

Ponderosa Gas Pipeline Company, Inc.            0 Class A Units          335 Class B Units        $1,710,000 (3.35%)
5901 North Western, Suite 200
Oklahoma City, OK  73118
Attention:  Jerry D. Cash
Telephone:  405.840.9894
Facsimile:  405.840.9897

Quest Oil & Gas Corporation                     0 Class A Units         4,790 Class B Units          $24,430,000)
5901 North Western, Suite 200
Oklahoma City, OK  73118
Attention:  Jerry D. Cash
Telephone:  405.840.9894
Facsimile:  405.840.9897

Producers Service, Incorporated                 0 Class A Units          71 Class B Units              $360,000
5901 North Western, Suite 200
Oklahoma City, OK  73118
Attention:  Jerry D. Cash
Telephone:  405.840.9894
Facsimile:  405.840.9897
</TABLE>

                               Exhibit A - Page 1

<PAGE>

<TABLE>
<CAPTION>
                                                                                                   Net Agreed Value
       Name and Address of Members               Class A Unit              Class B Unit               of Capital
                                                   Ownership                 Ownership               Contributions
                                                   ---------                 ---------               -------------
<S>                                             <C>                      <C>                          <C>
J-W Gas Gathering, L.L.C.                       0 Class A Units          882 Class B Units            $4,500,000
5901 North Western, Suite 200
Oklahoma City, OK  73118
Attention:  Jerry D. Cash
Telephone:  405.840.9894
Facsimile:  405.840.9897

TOTALS                                       10,000 Class A Units      10,000 Class B Units           $51,000,100

</TABLE>

                               Exhibit A - Page 2
<PAGE>

                                    EXHIBIT B

The Units  represented by this Certificate have been acquired for investment and
were issued  without  registration  under the Securities Act of 1933, as amended
(the  "Securities  Act"),  or under  the  securities  laws of any  state.  These
interests may not be sold, pledged,  hypothecated,  or otherwise  transferred at
any time except (i) in accordance with the restrictions contained in Amended and
Restated Limited Liability  Company  Agreement of Quest Cherokee,  LLC (the "LLC
Agreement"),  as amended from time to time, among the members of Quest Cherokee,
LLC and the other parties thereto (including,  without limitation,  the Transfer
Restrictions,   as  defined   therein),   and  (ii)  pursuant  to  an  effective
registration  statement  under  the  Securities  Act  and any  applicable  state
securities laws unless an exemption from  registration  under the Securities Act
and under any applicable  state  securities laws is available in connection with
the transfer.  This Certificate  evidences a membership  interest in the Company
and shall be a security for purposes of Article 8 of the Uniform Commercial Code
as in effect in the State of Delaware.

                     Certificate Evidencing Class ___ Units
                        Representing Member Interests in
                               QUEST Cherokee, LLC

No.                                                             Class ___ Units

      In  accordance  with  Section  3.3 of the  Amended  and  Restated  Limited
Liability  Company  Agreement of Quest  Cherokee,  LLC, dated as of December 22,
2003,  as  amended,  supplemented  or  restated  from  time  to time  (the  "LLC
Agreement"),  Quest Cherokee,  LLC, a Delaware  limited  liability  company (the
"Company"),  hereby  certifies  that  ________________  (the  "Holder")  is  the
registered owner of Class Units representing membership interests in the Company
(the  "Units")  transferable  on the books of the Company,  in person or by duly
authorized  attorney,  upon surrender of this Certificate  properly endorsed and
accompanied  by a  properly  executed  application  for  transfer  of the  Units
represented by this Certificate.  The rights, preferences and limitations of the
Units are set forth in, and this  Certificate and the Units  represented  hereby
are issued and shall in all respects be subject to the terms and  provisions of,
the LLC  Agreement.  Copies  of the LLC  Agreement  are on file at,  and will be
furnished  without charge on delivery of written  request to the Company at, the
principal  office of the  Company  located  at 5901  North  Western,  Suite 200,
Oklahoma City, Oklahoma 73118.

      The Holder, by accepting this Certificate, is deemed to have (i) requested
admission  as, and agreed to become,  a Member and to have agreed to comply with
and be bound by and to have executed the LLC  Agreement,  (ii)  represented  and
warranted  that the  Holder  has all  right,  power  and  authority  and,  if an
individual,  the capacity  necessary to enter into the LLC  Agreement  and (iii)
made the waivers  and given the  consents  and  approvals  contained  in the LLC
Agreement.

                                Exhibit B-Page 1
<PAGE>

      This  Certificate  shall not be valid for any  purpose  unless it has been
signed and registered by the Company.

                               Dated:__________________________________
                               Quest Cherokee, LLC

                               By:  ___________________________________
                               Name:___________________________________
                               Title:__________________________________

                                Exhibit B-Page 2
<PAGE>

                                    EXHIBIT C
                          DISPUTE RESOLUTION PROCEDURES

      1.  General  Procedure. The Members  shall use the  procedure set forth in
this  Exhibit C to  resolve  in good  faith any  dispute,  controversy  or claim
related to the Agreement,  including any dispute over the  performance,  breach,
termination or interpretation of the Agreement; provided, however, that a Member
may seek equitable relief prior to using the procedure set forth in this Exhibit
C if, in the  reasonable  judgment  of such  Member,  such  Member  will  suffer
irreparable  harm if such  equitable  relief is not granted.  Nothing  herein is
intended  to limit  the  Members  from  resolving  informally  between  them any
dispute, controversy or claim that may arise.

      2.  Submission  To  Board.  Any  Member  may  request  that  any  dispute,
controversy  or claim arising under the Agreement be submitted to the Board,  in
accordance  with  such  procedures  as the  Board  may  establish  and with such
explanation or documentation as the Members deem appropriate to aid the Board in
its  consideration  of the  issues  presented.  The  date  the  matter  is first
considered by the Board as an agenda item at a regular or special meeting of the
Board shall be referred to as the "Submission  Date." The Board shall attempt in
good faith, through the process of discussion and negotiation, to resolve within
20 days after the Submission Date any dispute, controversy or claim presented to
it.

      3.  Mediation.  If the Board cannot  resolve any dispute,  controversy  or
claim  submitted  to it within  20 days  after the  Submission  Date,  or if the
dispute, controversy or claim arose prior to the Closing Date, the Members shall
attempt  in  good  faith  to  settle  the  matter  by  submitting  the  dispute,
controversy or claim to mediation  within 30 days after the Submission  Date (if
the  dispute,  controversy  or claim arose after the  Closing  Date),  using any
mediator  upon which they  mutually  agree.  If the  Members are unable to agree
mutually upon a mediator within 15 days after submitting to mediation,  the case
shall be  referred to the Tulsa,  Oklahoma  office of the  American  Arbitration
Association ("AAA") for mediation.  The cost of the mediator will be paid by the
Company unless the Members otherwise agree.

      4. Arbitration.

      4.1   All Disputes Arbitration. Subject to Section 10.10 of the Agreement,
all disputes  between the Members  arising  under the Agreement and not resolved
through negotiation or mediation shall be submitted to arbitration in accordance
with Section 4 of this  Exhibit C, and the Members  hereby  expressly  waive all
rights to have any such disputes  heard before a court of law,  except the right
to enforce an  arbitration  award as  described in Section 4.5 of this Exhibit C
below.  Arbitration  shall be governed by the Federal  Arbitration Act, 9 U.S.C.
ss.1, et seq., and not by the arbitration  acts,  statutes or rules of any other
jurisdiction.

      4.2   Procedure. In the event the  Members are unable to resolve a dispute
arising  under the  Agreement  after  exercising  good  faith  efforts  to do so
pursuant to the procedures of Sections 2 and 3 of this Exhibit C, any Member may
require that the matter be resolved through binding  arbitration by submitting a
written notice to the Other Members. The notice shall name the noticing Member's
arbitrator  and  shall  contain  a  statement  of  the  issue(s)  presented  for
arbitration.  Within 15 days after receipt of a notice of arbitration, the Other
Members shall

                                Exhibit C-Page 1
<PAGE>

jointly select one arbitrator by written notice and may designate any additional
issue(s)  for  arbitration.  The two named  arbitrators  shall  select the third
arbitrator within fifteen days after the date on which the second arbitrator was
named.  Should the two  arbitrators  fail to agree on the selection of the third
arbitrator,  any Member  shall be entitled  to request  the Senior  Judge of the
United  States  District  Court of the Southern  District of Texas to select the
third  arbitrator.  If the Senior Judge refuses or is unable to select the third
arbitrator,  the Members shall ask the AAA to appoint the third  arbitrator,  it
being  understood,  however,  that the AAA shall not act as administrator of the
arbitration.  All  arbitrators  shall be qualified  by  education or  experience
within the oil and gas or energy industry (to the extent relevant) to decide the
issues  presented for  arbitration.  No arbitrator  shall be a current or former
director,  officer or  employee  of any  Member,  or any of its  Affiliates;  an
attorney  (or  member of a law  firm) who has  rendered  legal  services  to any
Member,  or its  Affiliates,  within the preceding three years; or an accountant
(or member of an  accounting  firm) who has rendered  accounting  or  consulting
services to any Member or its  Affiliates,  within the preceding three years; or
an owner of any debt or equity  securities  (including but not limited to common
or preferred stock or any derivatives thereof) of any Member or its Affiliates.

      4.3  Arbitration  Hearings.  The  three  arbitrators  shall  commence  the
arbitration  hearing  within  25 days  following  the  appointment  of the third
arbitrator, or at such later date as the Members may agree. The proceeding shall
be held at a mutually  acceptable  site in  Houston,  Texas.  If the Members are
unable to agree on a site, the arbitrators  shall select a site. The arbitrators
shall  have the  authority  to  establish  rules and  procedures  governing  the
arbitration  hearing.  Each  Member  shall have the  opportunity  to present its
evidence  at the  hearing.  The  arbitrators  may  call  for the  submission  of
pre-hearing  statements of position and legal authority.  The arbitration  panel
shall not have the authority to award punitive or exemplary  damages,  nor shall
the arbitration  panel have any authority to terminate the Agreement unless that
issue is made subject to  arbitration  under the express terms of the Agreement.
The  arbitrators'  decision  must  be  rendered  within  30 days  following  the
conclusion of the hearing or  submission of evidence,  but no later than 90 days
after appointment of the third arbitrator.

      4.4 Arbitration Decision.  The decision of the arbitrators,  or a majority
of them,  shall be in writing and shall be final and binding upon the Members as
to the issue  submitted.  Each  Member  shall bear the  expense  and cost of own
attorneys and witnesses.  The expense and cost of the arbitrators shall be borne
by the  Company  or as the  arbitrators  may  otherwise  determine  is just  and
equitable.

      4.5  Enforcement  of  Award.  Judgment  upon  any  award  rendered  by the
arbitrators  may be entered in any court  having  jurisdiction.  The  prevailing
Member or Members shall be entitled to reasonable  attorneys'  fees in any court
proceeding necessary to enforce or collect any award or judgment rendered by the
arbitrators.

                                Exhibit C-Page 2
<PAGE>

                                    EXHIBIT D
                               LIST OF APPRAISERS

1.   Ryder Scott

2.   Cauley, Galespie & Associates, Inc.

3.   Miller and Lents, Ltd.

                                Exhibit D-Page 1
<PAGE>

                                    EXHIBIT E
                              TRANSFER RESTRICTIONS

      1.1  General.  No Member may  directly or  indirectly  Transfer all or any
portion  of its Units  except in  accordance  with this  Exhibit E and the other
provisions  of the  Agreement.  A  Person  acquiring  any  interest  in  Unit in
accordance  with the terms  hereof  shall  execute  and deliver to the Company a
counterpart  or copy of this  Agreement  or any other  instrument  containing  a
ratification  of and  consent  to be bound by the terms and  provisions  of this
Agreement,  provided that the failure to execute and deliver any such instrument
shall not be deemed to relieve such Person of the  restrictions  imposed by this
Agreement.  Any attempted  Transfer of Units not in accordance with the terms of
the Agreement and this Exhibit shall be null and void and shall have no effect.

      1.2  Member Consent.

      (a) No Class B Member may Transfer any Class B Units to any Person  (other
than to an Affiliate of such Class B Member, or other than to the Class A Member
or the Class A Member's  designee)  without such Class B Member first  obtaining
the prior written  consent of the Class A Member,  which consent may be withheld
in the Class A Member's discretion;  provided, however, that, upon a transfer of
any Units to an  Affiliate  by such  Class B Member,  the  transferring  Class B
Member  shall  remain  liable for all of its  obligations  hereunder  and shall,
together with its Affiliate transferee,  be jointly and severally liable for all
such  obligations;  provided  further,  however,  that no consent of the Class A
Member will be  required to Transfer  the Class B Units of a Class B Member from
and after the  Buy-Sell  Point,  however the Class B Members and the Transfer of
the Class B Units shall continue to be subject to the provisions of Sections 1.4
and 1.8 of this Exhibit E; provided  further,  however,  that the Class A Member
acknowledges  that it has  consented to a pledge by the Class B Members of their
Class B Units  under the terms of the Senior Debt  Documents  existing as of the
Effective Date and a pledge under that certain Pledge  Agreement dated as of the
Effective Date, executed by the Class B Members, granting a subordinated lien to
CPL.

      (b) The Class A Member  may not  Transfer  any Class A Units to any Person
during the period  through and including the third  anniversary of the Effective
Date without the Class A Member first obtaining the prior written consent of the
Board  representatives  appointed  by  the  Class  B  Members  ("Class  B  Board
Representatives"),   which  consent  may  be  withheld  in  the  Class  B  Board
Representatives'  discretion  prior to the second  anniversary  of the Effective
Date,  but which  consent shall not be  unreasonably  withheld,  conditioned  or
delayed  after the second  anniversary  of the  Effective  Date and prior to the
third anniversary of the Effective Date, except that  notwithstanding  the above
the consent of the Board representatives  appointed by the Class B Members shall
not be required  (and the Class A Member may freely  Transfer its Class A Units)
in the event (i) such  Transfer is to an Affiliate  of the Class A Member;  (ii)
such Transfer is to Class B Members under  Section 8.2 of the  Agreement;  (iii)
any Class B Member is in default of any material provision of the this Agreement
or any of the Related  Agreements;  or (iv) such Transfer  would occur after the
third anniversary of the Effective Date.

                                Exhibit E-Page 1
<PAGE>

      1.3  Transfer  Requirements.  Notwithstanding  anything  to the  contrary
contained  herein,  (including  with respect to Transfers  to  Affiliate),  the
Company shall not recognize for any purpose any purported Transfer unless:

      (a) the Company shall have been  furnished  with the  documents  effecting
such Transfer  executed and  acknowledged  by both  transferor  and  transferee,
together  the written  agreement of the  transferee  to become a party to and be
bound by this  Agreements and any other  applicable  rules and  regulations,  as
amended or supplemented from time to time;

      (b) such Transfer  shall have been made in accordance  with all applicable
laws and  regulations  and all necessary  governmental  consents shall have been
obtained and requirements  satisfied,  including without limitation,  compliance
with the Securities Act of 1933, as amended,  and applicable  state blue sky and
securities laws, and the rules and regulations of the Federal Energy  Regulatory
Commission thereunder, as amended or supplemented from time to time;

      (c) such  Transfer  will not  cause  the  Company  to have  more  than 100
partners  (within the meaning of Regulations  Section  1.7704-1(h))  or does not
otherwise  cause the  Company to be treated as a "publicly  traded  partnership"
within the meaning of Section 7704 of the Code;

      (d) such  Transfer  will not result in a  termination  of the  Company for
purposes of Section 708 of the Code;

      (e) all necessary  instruments  reflecting  such admission shall have been
filed in each jurisdiction in which such filing is necessary in order to qualify
the  Company to conduct  business or to preserve  the limited  liability  of the
Members;

      (f) such  Transfer  would  not,  if made  within  the  United  States,  be
registered under the Securities Act of 1933 and will not cause the Company to be
required to register as an "investment company" under the Investment Company Act
of 1940; and

      (g) such Transfer  does not violate the other  provisions of the Agreement
and this Exhibit.

The non-Transferring Member may request an opinion of counsel (the cost of which
shall be borne by the Transferring  Member) with respect to any of the foregoing
or any other matters that the Board of Managers  reasonably deems appropriate in
respect of any such Transfer. In addition,  the Members, upon unanimous consent,
may waive any of the foregoing provisions.

      1.4 Tag-Along  Rights.  Subject to the other  provisions of this Exhibit E
(including,  without limitation,  the consent  requirements in Section 1.2(a) of
this Exhibit E above and the provisions of Section 1.5 of this Exhibit E, in the
event that any Class B Member  desires  to  Transfer  all or any  portion of its
Class B Units other than to the Class A Member or to an  Affiliate of Such Class
B Member,  as permitted  under Section  1.2(a) of this Exhibit E (a "Third Party
Purchaser"),  such  Class B  Member  shall  give  written  notice  thereof  (the
"Triggering  Notice") to the Class A Member not later than sixty (60) days prior
to the consummation of the proposed Transfer.  The Triggering Notice shall state
the identity of the Third Party Purchaser, the consideration therefor to be paid
by the Third Party  Purchaser and the other material terms and conditions of the
proposed Transfer. If the Class A Member approves the proposed Transfer

                                Exhibit E-Page 2
<PAGE>

pursuant to Section  1.2(a) of this  Exhibit E and does not  otherwise  elect to
exercise  its rights  under  Section  1.5 of this  Exhibit E, the Class A Member
shall  also have a period of twenty  (20) days from  receipt  of the  Triggering
Notice to determine whether the Class A Member may require a number of its Class
A Units equal to the number of Class B Units being offered to be included in the
proposed  Transfer  upon the same terms and  conditions  (other  than  price) as
applicable to and as stated in the Triggering  Notice (the "Tag-Along  Rights");
provided, however, that the price to be paid per Class A Unit by the Third Party
Purchaser  shall not be less than the  Specified  Price Per Class A Unit. In the
event the Class A Member shall elect to exercise its Tag-Along Rights, the Class
A Member shall give written  notice  thereof  (the  "Tag-Along  Notice") to such
Class B  Member(s)  not later than the 20th day from  receipt of the  Triggering
Notice. If the Class A Member shall fail to deliver the Tag-Along Notice to such
Class B Member on or before expiration of such twenty (20) day period, the Class
A Member shall be deemed to have elected not to exercise such Tag-Along  Rights.
In the event the Third Party  Purchaser  fails or refuses to purchase any of the
Class A Units to be sold in  connection  with the exercise by the Class A Member
of its Tag-Along  Rights,  then any prior  approval by the Class A Member of the
proposed Transfer by the Class B Member of its Class B Units to such Third Party
Purchaser shall be deemed retracted and void. In addition, if the Class A Member
is the holder of a loan to the Company or the other Member  (including,  without
limitation,  the Subordinated  Note and Subordinated  Debt), then in addition to
the payment of the Specified  Price per Class A Unit, as a condition to closing,
the Third Party Purchaser shall pay the Class A Member any outstanding principal
and accrued but unpaid interest (or proportionate  amount thereof in the case of
a Transfer  of the Class A Units  which is less than all of the Class A Member's
Units) on all such loans and upon receipt of such  payments,  the Class A Member
shall assign all (or a proportionate  amount,  as applicable) of the outstanding
principal (and accrued interest thereon) under any such loans to the Third Party
Purchaser.

      1.5  Right of First  Offer.  Subject  to the  consent  provisions  of this
Exhibit E (including, without limitation, the consent requirements under Section
1.2 of this Exhibit E above) and the other Transfer Restrictions,  to the extent
applicable,  if the Class A Member at any time  desires to  Transfer  any of its
Units (the  "Specified  Interest"),  the Class A Member  shall first give notice
thereof (the "Offer  Request") to the Class B Members of the desire to sell such
Units  and  request  the  Class B  Members  (collectively)  to make an  offer to
purchase the Specified Interest. In the event the Class B Members are interested
in purchasing such Specified Interest,  the Class B Members (collectively) must:
(i) within sixty (60) days following the date of the Offer  Request,  deliver to
the Class A Member a written,  binding offer to purchase the Specified  Interest
(an "Offer Notice") for a specified, fully funded, cash price therefor ("Offered
Price"),  and the Class B Members must  provide  evidence of any  commitment  of
funds from all lenders,  in a form  satisfactory  to the Class A Member,  to the
extent  the Class B Members  intend to use third  party  funds to  purchase  any
portion of the  Specified  Interest,  (ii)  agree  that such  offer will  remain
binding  and  irrevocable  for a period  expiring  not sooner than ten (10) days
following the end of such sixty (60) day period (the "Offer Period"),  and (iii)
must  commit,  in their  offer,  to be  ready,  willing  and  able to close  and
consummate the purchase of the Specified Interest for the Offered Price no later
than thirty (30) days  following the expiration of the  above-referenced  60-day
period (the "ROFO Closing Date"),  if the Class A Member accepts such offer. The
Class A Member  shall  have the right to accept the offer set forth in the Offer
Notice at any time prior to the  expiration of the Offer Period.  If the Class A
Member  accepts such offer,  then the closing  shall occur on or before the ROFO
Closing Date, at which time the Class B Members will

                                Exhibit E-Page 3
<PAGE>

purchase the Specified Interest for the Offered Price. In addition, if the Class
A Member is the holder of a loan to the Company or the other Member  (including,
without  limitation,  the  Subordinated  Note and  Subordinated  Debt),  then in
addition  to the payment of the Offered  Price as a  condition  to closing,  the
Class B Members  shall  pay the Class A Member  any  outstanding  principal  and
accrued but unpaid  interest (or  proportionate  amount thereof in the case of a
Transfer of a Specified  Interest which is less than all of the Class A Member's
Units) on all such loans and upon receipt of such  payments,  the Class A Member
shall assign all (or a proportionate  amount,  as applicable) of the outstanding
principal  (and accrued  interest  thereon)  under any such loans to the Class B
Members.  Upon such receipt of the Offered  Price by the Class A Members and the
satisfaction of any other specified terms, the Class A Member shall Transfer all
of its right, title and interest in and to the Specified Interest free and clear
of all liens and encumbrances to the Class B Members.  If the Class B Members do
not deliver to the Class A Member the Offer Notice  within the period  specified
above or they  provide  such Offer  Notice but fail to close the  purchase on or
prior to the ROFO  Closing  Date,  then  subject to the  consent  provisions  of
Section 1.2 of this  Exhibit E, if  applicable,  the Class A Member may Transfer
the  Specified  Interest  to a third  party,  subject to the other terms of this
Agreement.  If the Class B Members  provide  such Offer  Notice  within the time
period specified above but the Class A Member rejects the offer,  then the Class
A Member,  subject to any consent  provisions in Section 1.2(b) (if  applicable)
may  Transfer  the  Specified  Interest to a third  party,  insofar as the price
received by the Class A Member therefor exceeds the Offered Price.

      1.6  Effective  Date of Transfer.  Any  permitted  Transfer of Units shall
become  effective  as of the first day of the  calendar  moth  during  which the
Company receives a copy of the instrument of assignment and such other documents
which the Company may  request.  The Company  shall  thereafter  pay all further
distributions  or profits or other  compensation by way of income,  or return of
capital,  on account of the Units so  transferred,  to the transferee  from such
effective date.

      1.7  Involuntary   Transfer.   An  Involuntary  Transfer  (as  hereinafter
defined),  shall be deemed a Transfer in  violation of this  Agreement  and this
Exhibit E, and in addition to any other  rights and  remedies  available  to the
Nonconflicted  Member  under  this  Agreement,   at  law,  or  in  equity,  such
Involuntary  Transfer will also trigger certain rights and remedies available to
the  Nonconflicted  Member  under  subparagraph  1.8(b)  below.  An  involuntary
Transfer  ("Involuntary  Transfer")  of (i) a Class  B Unit  shall  include  any
Transfer  (or  proposed  Transfer)  of a Class B Unit (1)  pursuant to a pledge,
mortgage or other  encumbrance  of a Class B Unit granted by a Class B Member to
secure  a debt or  other  obligation  (other  than to the  extent  such  pledge,
mortgage or other  encumbrance is granted to and being enforced or foreclosed by
the Class A Member), (2) pursuant to a bankruptcy or insolvency  proceeding of a
Class B  Member  or QRC,  (3)  pursuant  to a  judicial  order,  legal  process,
execution  or  attachment,   (4)  pursuant  to  the   dissolution,   winding-up,
termination of, or liquidating  distribution by, a Class B Member or QRC (except
to the extent that they Transfer such Units in connection therewith to QRC or to
an existing Quest Member),  or (5) any other involuntary  Transfer not otherwise
provided  for  herein;  provided,  however,  that to the extent that the Class A
Member  (or its  designee)  acquires  any  Class B Units  pursuant  to a pledge,
mortgage,  or other  encumbrance,  such Class A Member shall have all the rights
and  benefits of a Class B Member  hereunder  with respect to such Class B Units
acquired.  An involuntary  Transfer of a Class A Unit shall include any Transfer
(or proposed  Transfer) of a Class A Unit (i) pursuant to a pledge,  mortgage or
other encumbrance of

                                Exhibit E-Page 4
<PAGE>

a Class  A Unit  granted  by the  Class  A  Member  to  secure  a debt or  other
obligation,  (ii) pursuant to a bankruptcy or insolvency proceeding of the Class
A Member,  (iii)  pursuant to a judicial  order,  legal  process,  execution  or
attachment,  (iv) pursuant to the  dissolution,  winding-up,  termination of, or
liquidating  distribution by, the Class A Member,  or (v) any other  involuntary
Transfer not otherwise provided for herein.

      1.8  Change of Control; Exit Transaction.

      (a) A Change of Control  of any Class B Member,  or a Change of Control of
QRC,  shall be deemed a Transfer in violation of this Agreement and this Exhibit
E and the other Transfer  Restrictions,  and in addition to any other rights and
remedies  available  to the Class A Member under this  Agreement,  at law, or in
equity,  such Change of Control  will also trigger  certain  rights and remedies
available to the Class A Member under Section  1.8(b) of this Exhibit E below. A
Change of Control of the Class A Member  prior to the third  anniversary  of the
Effective  Date shall be deemed in violation of this  Agreement and the Transfer
Restrictions  and such Change of Control  will also trigger  certain  rights and
remedies available to the Class B Members (collectively) under Section 1.8(b) of
this Exhibit E.

      (b) Following either:

                (i) a Change of  Control  of QRC or a Change of  Control  of any
           Class B Member  without  the  prior  written  consent  of the Class A
           Member, or following an Involuntary Transfer (as described in Section
           1.7 of this Exhibit E above),  the Class A Member (in addition to any
           other rights or remedies  available to it under this Agreement,  this
           Exhibit  E, at law or in  equity)  shall  have the  right at any time
           thereafter  within forty-five (45) days following the date it becomes
           aware of such Change of Control,  Involuntary  Transfer or  attempted
           Transfer in violation  hereof to provide a notice (the "Exit Notice")
           to the Class B Members, or

                (ii) a Change  of  Control  of the  Class A Member  prior to the
           third anniversary of the Effective Date or an Involuntary Transfer by
           the Class A Member prior to the third  anniversary  of the  Effective
           Date, the Class B Members  (collectively) shall have the right at any
           time  thereafter  within  forty-five  (45) days following the date it
           becomes  aware of such  Change of  Control,  Involuntary  Transfer or
           attempted  Transfer in violation  hereof to provide an Exit Notice to
           the Class A Member,

as the case may be,  that it (or they)  desires  to pursue an Exit  Transaction.
Upon the giving of an Exit  Notice,  a Conflict  Circumstance  will be deemed to
have occurred and, for purposes  hereof,  the Members  providing the Exit Notice
will be deemed to be the  Nonconflicted  Member and therefore all actions on the
part of the Company in pursuing  an Exit  Transaction  may be taken by the Board
representatives of the Member(s) providing the Exit Notice. For purposes hereof,
an  "Exit  Transaction"  shall  mean a sale of all or  substantially  all of the
assets of the Company,  a merger,  consolidation,  interest  exchange or similar
transaction  with a Person that is not an Affiliate of the  Member(s)  providing
the Exit Notice the effect of which would be that the Members would receive cash
or other consideration in return for their respective Interests. An

                                Exhibit E-Page 5
<PAGE>

Exit Transaction  pursuant to an Exit Notice must be closed within eighteen (18)
months  after the date of the Exit  Notice,  or else the right to pursue an Exit
Transaction  pursuant to the specified  event which gave rise to the Exit Notice
shall  terminate,  but the provisions of this Section 1.8 will continue to apply
with respect to any subsequent Change of Control, Involuntary Transfers or other
attempted  Transfers in violation  of the  Transfer  Restrictions  to the extent
otherwise   provided  in  Section  1.8(a),   1.8(b)(i)  and  1.8(b)(ii)   above.
Notwithstanding  anything stated herein to the contrary, to the extent that such
Exit  Transaction  would otherwise  require the consent or approval of the other
Members  (the  Conflicted  Members)  or the Board  representatives  of the other
Members (the  Conflicted  Members),  whether under  Applicable  Law,  under this
Agreement or otherwise,  such other Members (the Conflicted  Members) shall (and
shall direct their Board  representatives)  to approve the Exit  Transaction and
the  consummation  of  the  Exit  Transaction,  in  accordance  with  the  terms
negotiated  by the Board  representatives  of the  Member(s)  providing the Exit
Notice,  and to approve the delegation of all further required  authority to the
Board  representatives  of the Member(s)  providing the Exit Notice to negotiate
and cause the consummation of the Exit Transaction.

      1.9 Failure to Exercise Options. Notwithstanding the failure of any Member
to exercise the options  granted herein within the  respective  times and in the
manner  specified,  all Units,  or any right or interest  therein,  shall remain
subject  at all times to the terms and  provisions  of this  Agreement  and such
Unit, or any right or interest therein, may not thereafter be Transferred except
in accordance with all applicable terms and provisions hereof.

      1.10  Remedies.  Each Member  acknowledges  that this  Agreement  and this
Exhibit E represents a reasonable  and necessary  protection  of the  legitimate
interests  of the  Members and that any  Member's  failure to observe and comply
with the covenants and agreements contained herein may cause irreparable harm to
the Company  and its  Members.  It is  expressly  understood  and agreed by each
Member that it is and will  continue to be difficult  to  ascertain  the nature,
scope and extent of the harm resulting from breach of these covenants and that a
remedy at law for such breach by such Member will be inadequate. Accordingly, it
is the  intention  of each Member  that,  in  addition  to any other  rights and
remedies  at law that the other  Members  may have in the event of any breach or
threatened or attempted breach of this Agreement by a Member,  the other Members
shall be  entitled  to demand and obtain  specific  performance,  including  all
appropriate  injunctive and other equitable relief against such Member, in order
to enforce  against such Member,  or to prevent any breach or any  threatened or
attempted  breach by such Member of, the covenants and  agreements  contained in
this Agreement. In furtherance of the foregoing, each Member agrees to waive any
requirement  for the  securing  or  posting of any bond in  connection  with the
obtaining of any such  injunctive or other  equitable  relief.  In enforcing any
rights  hereunder,  the Company may hold and refuse to transfer any Unit, or any
certificate  therefor,  tendered to it for Transfer, in addition to, and without
prejudice to, any and all other rights or remedies  which may be available to it
or to the Members.

      1.11 Legends on Unit Certificates. The face of each Unit Certificate shall
bear the following endorsement (which shall be made conspicuous by using capital
letters, or bold-face or contrasting type, underlining or similar means):

      The  Units   represented  by  this  Certificate  have  been  acquired  for
      investment and were issued without  registration  under the Securities Act
      of 1933, as

                                Exhibit E-Page 6
<PAGE>

      amended (the "Securities Act"), or under the securities laws of any state.
      These  interests  may not be sold,  pledged,  hypothecated,  or  otherwise
      transferred  at any time except (i) in  accordance  with the  restrictions
      contained in Amended and Restated Limited  Liability  Company Agreement of
      Quest Cherokee,  LLC (the "LLC Agreement"),  as amended from time to time,
      among the members of Quest  Cherokee,  LLC and the other  parties  thereto
      (including,  without  limitation,  the Transfer  Restrictions,  as defined
      therein),  and (ii) pursuant to an effective  registration statement under
      the  Securities  Act and any applicable  state  securities  laws unless an
      exemption  from  registration  under  the  Securities  Act and  under  any
      applicable  state  securities  laws is  available in  connection  with the
      transfer.  This Certificate evidences a membership interest in the Company
      and  shall  be a  security  for  purposes  of  Article  8 of  the  Uniform
      Commercial Code as in effect in the State of Delaware.

      In addition to the foregoing  legends,  a copy of this Agreement  shall be
placed on file at the principal  place of business and at the registered  office
of the Company. Each Member agrees from time to time promptly to submit or cause
to be submitted to the Secretary of the Company all Unit  certificates  owned by
such  Member of record for the  purpose of having the above  referred  to legend
stamped  or  endorsed  thereon  or  having  new Unit  certificates,  of the same
denomination  or  denominations  and  legend as  aforesaid,  issued in  exchange
therefor.

                                Exhibit E-Page 7
<PAGE>

                                    EXHIBIT F
                            NON-COMPETITION AGREEMENT

                                Exhibit F-Page 1
<PAGE>

                                    EXHIBIT G
                                 CHEROKEE BASIN

"Cherokee  Basin" shall consist of the area contained within the Counties listed
below:

STATE OF KANSAS
---------------

      Allen County
      Chautauqua County
      Cowley County
      Elk County
      Greenwood County
      Labette County
      Montgomery County
      Neosho County
      Wilson County
      Woodson County

STATE OF OKLAHOMA
-----------------

      Craig County
      Nowata County

                                Exhibit G-Page 1Exhibit 10.3
                                PLEDGE AGREEMENT

      THIS PLEDGE AGREEMENT (this  "Agreement") is made as of December 22, 2003,
by Quest Oil & Gas  Corporation,  a Kansas  corporation,  Quest Energy  Service,
Inc.,  a Kansas  corporation,  STP  Cherokee,  Inc.,  an  Oklahoma  corporation,
Ponderosa Gas Pipeline Company,  Inc., a Kansas corporation,  Producers Service,
Incorporated,  a Kansas  corporation,  and J-W Gas Gathering,  L.L.C.,  a Kansas
limited liability  company (herein  collectively  referred to as "Pledgor"),  in
favor of Cherokee  Energy  Partners LLC, a Delaware  limited  liability  company
(herein called "Pledgee").

                               R E C I T A L S:
                               - - - - - - - -

      WHEREAS,  Pledgee is acquiring  certain Class A membership  interests (the
"Class A  Interests")  in Quest  Cherokee,  LLC,  a Delaware  limited  liability
company ("Quest Cherokee") pursuant to that certain Membership Interest Purchase
Agreement  dated  December  22,  2003 by and among  Pledgee,  Pledgor  and Quest
Cherokee (as amended, the "Member Purchase  Agreement").  In connection with the
Member Purchase Agreement,  Pledgee,  Pledgor and Quest Resource Corporation,  a
Nevada  corporation  and the parent of Pledgor  ("Parent")  are parties to those
agreements described on Exhibit A attached hereto (such agreements,  as the same
may be  amended,  together  with the Member  Purchase  Agreement,  and all other
agreements,  certificates,  documents,  instruments  and writings  heretofore or
hereafter   delivered  in  connection  herewith  or  therewith  the  "Obligation
Documents");

      WHEREAS,  it is a condition precedent to Pledgee's purchase of the Class A
Interests and entering into the Obligation  Documents that,  among other things,
Pledgor  shall have  executed  and  delivered  to  Pledgee a security  agreement
granting to Pledgee,  a security interest in the Collateral (as defined herein);
and

      WHEREAS,  the boards of directors or managers of Pledgor,  as  applicable,
have  determined  that  Pledgor's  execution,  delivery and  performance of this
Agreement may reasonably be expected to benefit Pledgor, directly or indirectly,
and are in the best interests of Pledgor.

      NOW,  THEREFORE,  in  consideration of the premises and in order to induce
Pledgee to purchase the Class A Interests, Pledgor hereby agrees with Pledgee as
follows:

                                    ARTICLE I

                           Definitions and References

      Section  1.1.  General  Definitions.  As used herein,  the terms  defined
above shall have the meanings  indicated  above,  and the following terms shall
have the following meanings:

      "Bank One Pledge" means that certain Pledge  Agreement dated December ___,
2003  executed  by Pledgor  in favor of Bank One,  NA,  with its main  office in
Chicago,  Illinois  as  Collateral  Agent  (in such  capacity,  the  "Collateral
Agent").

<PAGE>

      "Code" means the Uniform  Commercial  Code in effect in the State of Texas
on the date hereof;  provided that if, by reason of mandatory provisions of law,
the perfection or the effect of perfection or  non-perfection of any Lien in any
Collateral  is  governed  by the  Uniform  Commercial  Code  as in  effect  in a
jurisdiction  other than Texas,  "UCC" means the Uniform  Commercial  Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such perfection or the effect of perfection or non-perfection.

      "Collateral" has the meaning given such term in Section 2.1.

      "Default"  means any event or occurrence  that,  with the passage of time,
will constitute an Event of Default.

       "Equity"  means  shares  of  capital  stock  or  a  partnership,  limited
liability company,  profits, capital or member interest, or options, warrants or
any other right to  substitute  for or otherwise  acquire the capital stock or a
partnership,  limited liability company,  profits, capital or member interest of
each Subsidiary (as defined in Section 2.1(a)).

      "Event of Default"  means the existence of the following  conditions:  (i)
any default,  event of default or any breach by any Person constituting  Pledgor
or by the Parent of the  Obligations;  (ii) either (A) the obligations  that are
the  subject of any  single  default,  event of  default  or breach,  or (B) the
aggregate obligations in the event more than one such default,  event of default
or breach  exists,  is equal to or  greater  than  $5,000,000;  and  (iii)  such
default,  event of  default  or breach  (or the last to occur of such  defaults,
events of  default  or  breaches  aggregating  $5,000,000  if more than one) has
continued  for at least 90 days.  An Event of Default  shall  continue  to exist
until all of the aggregate  obligations  described in part (ii) of the foregoing
sentence are satisfied;  partial satisfaction shall not cure an Event of Default
even if after such partial  satisfaction  less than $5,000,000  remains owing on
such obligations.

      "Lien" means any collateral assignment, lien, pledge, encumbrance,  charge
or security interest.

      "Obligation Documents" has the meaning given in the recitals.

      "Obligations" has the meaning given in Section 2.2.

      "Other Liable Party" means any Person,  other than Pledgor,  but including
each  Subsidiary,  who may now or may at any  time  hereafter  be  primarily  or
secondarily  liable for any of the Obligations or who may now or may at any time
hereafter  have  granted to Pledgee a Lien upon any property as security for the
Obligations.

      "Person" means any individual, corporation, partnership, limited liability
company,  association,  trust,  other  entity or  organization,  or any court or
governmental department,  commission,  board, bureau, agency, or instrumentality
of any  nation  or of any  province,  state,  commonwealth,  nation,  territory,
possession,   county,   parish,  or  municipality,   whether  now  or  hereafter
constituted or existing.

      "Pledged Equity" has the meaning given it in Section 2.1(a).

                                       2
<PAGE>

      Section 1.2. Other Definitions. All terms used in this Agreement which are
defined  in the  Code  and not  otherwise  defined  herein  shall  have the same
meanings  herein as set forth in the Code,  except  where the context  otherwise
requires.

      Section 1.3.  Schedules and Exhibits.  All schedules and exhibits attached
to this Agreement are a part hereof for all purposes.

      Section  1.4.  Amendment  of  Defined  Instruments.   Unless  the  context
otherwise  requires or unless  otherwise  provided  herein,  references  in this
Agreement to a particular  agreement,  instrument  or document also refer to and
include all renewals,  extensions,  amendments,  modifications,  supplements  or
restatements  of any such  agreement,  instrument  or  document,  provided  that
nothing contained in this Section 1.4 shall be construed to authorize any Person
to execute or enter into any such renewal, extension,  amendment,  modification,
supplement or restatement.

      Section 1.5.  References  and Titles.  All references in this Agreement to
Exhibits,  Schedules,  Articles,  Sections,  subsections, and other subdivisions
refer to the Exhibits, Articles, Sections, subsections and other subdivisions of
this Agreement  unless  expressly  provided  otherwise.  Titles appearing at the
beginning of any subdivision are for convenience  only and do not constitute any
part of any such subdivision and shall be disregarded in construing the language
contained in this Agreement.  The words "this  Agreement,"  "herein,"  "hereof,"
"hereby,"  "hereunder"  and words of similar import refer to this Agreement as a
whole and not to any particular  subdivision  unless  expressly so limited.  The
phrases "this Section" and "this  subsection"  and similar phrases refer only to
the Sections or subsections  hereof in which the phrase occurs. The word "or" is
not exclusive,  and the word  "including" (in all of its forms) means "including
without limitation".  Pronouns in masculine, feminine and neuter gender shall be
construed to include any other  gender,  and words in the singular form shall be
construed  to include  the plural and vice versa  unless the  context  otherwise
requires.

                                   ARTICLE II

                  Security Interest [CONFORM TO BANK ONE DOC]

      Section 2.1. Grant of Security Interest. As collateral security for all of
the  Obligations,  Pledgor  hereby  pledges and assigns to Pledgee and grants to
Pledgee a continuing  security  interest in and to all of the following  rights,
interests and property (collectively, the "Collateral"):

      (a)  all of the  issued  and  outstanding  Equity  of (i)  Quest  Cherokee
including,  without  limitation,  the Equity  described  on  Schedule 1 attached
hereto  (but  excluding  any  Equity  owned by  Pledgee),  and  (ii)  any  other
subsidiary of Pledgor  (referred to herein  collectively as  "Subsidiaries"  and
each  individually a "Subsidiary") now owned or hereafter created or acquired by
Pledgor including,  without  limitation,  the Equity of each Subsidiary owned by
Pledgor on the date hereof (all of the foregoing being herein  sometimes  called
the "Pledged Equity");

      (b) any and all  proceeds or other sums  arising from or by virtue of, and
all dividends and distributions (cash or otherwise) payable and/or distributable
with respect to, all or any of the Pledged Equity; and

                                       3
<PAGE>

      (c) all cash,  securities,  dividends  and other  property at any time and
from time to time  receivable  or  otherwise  distributed  in  respect  of or in
exchange for any or all of the Pledged Equity and any other property substituted
or exchanged therefor.

      Section 2.2.  Obligations Secured. The security interest created hereby in
the  Collateral  constitutes  continuing  collateral  security  for  all  of the
following  obligations,  indebtedness and  liabilities,  whether now existing or
hereafter incurred (the "Obligations"):

      (a) Obligation  Documents.  The payment and performance by Pledgors and by
the Parent of (i)all  payment and  indemnity  obligations  of  Pledgors  and the
Parent  created  under and evidenced by the  Obligation  Documents and (ii) with
respect to the LLC Agreement  described on Exhibit A (the "LLC  Agreement") that
is a part of the  Obligation  Documents,  all payment and indemnity  obligations
together  with  any  obligations  regarding  Defects  (as  defined  in  the  LLC
Agreement) and any distributions or allocations  owing in connection  therewith,
for the benefit of Pledgee, is successors and permitted transferees and assigns;
and

       (b)  Renewals.  All  renewals,  extensions,  amendments,   modifications,
supplements, or restatements of, or substitutions for, any of the foregoing.

                                   ARTICLE III

                   Representations, Warranties and Covenants

     Section  3.1.  Representations  and  Warranties.   Pledgor  represents  and
warrants as follows:

      (a)  Ownership  and Liens.  Pledgor has good and  marketable  title to the
Collateral free and clear of all Liens,  encumbrances or adverse claims,  except
for the security  interest created by this Agreement and the Bank One Pledge. No
effective financing statement or other instrument similar in effect covering all
or any part of the Collateral is on file in any recording  office except such as
have been filed in favor of Pledgee  relating to this Agreement and as have been
filed in connection with the Bank One Pledge.

      (b) No Conflicts or Consents. Neither the ownership or the intended use of
the Collateral by Pledgor,  nor the grant of the security interest by Pledgor to
Pledgee herein, nor the exercise by Pledgee of its rights or remedies hereunder,
will (i)  conflict  with any  provision  of (a) any  domestic  or  foreign  law,
statute, rule or regulation,  (b) the certificate of incorporation,  articles of
incorporation,  charter  or  bylaws of  Pledgor  or any  Subsidiary,  or (c) any
agreement,  judgment,  license,  order or permit  applicable  to or binding upon
Pledgor or any  Subsidiary;  or (ii)  result in or require  the  creation of any
Lien,  charge or  encumbrance  upon any  assets or  properties  of  Pledgor.  No
consent,  approval,  authorization  or order of, and no notice to or filing with
any  Subsidiary or any other Person is required in connection  with the grant by
Pledgor of the  security  interest  herein,  or the  exercise  by Pledgee of its
rights and remedies hereunder.

      (c) Security Interest.  Pledgor has and will have at all times full right,
power and authority to grant a security interest in the Collateral to Pledgee in
the  manner  provided  herein,  free and clear of any Lien,  adverse  claim,  or
encumbrance except as evidenced by the Bank One Pledge. This Agreement creates a
valid and  binding  security  interest  in favor of  Pledgee in the

                                       4
<PAGE>

Collateral  securing the  Obligations.  The taking  possession by Pledgee of all
certificates,  instruments and cash constituting Collateral from time to time or
the  filing of the  financing  statements  delivered  concurrently  herewith  by
Pledgor to Pledgee will perfect,  and establish the first priority of, Pledgee's
security  interest  hereunder in the  Collateral  securing the  Obligations.  No
further or subsequent filing,  recording,  registration,  other public notice or
other  action is  necessary  or  desirable  to  perfect or  otherwise  continue,
preserve or protect such security interest except for continuation statements or
filings as contemplated in Section 3.3(b).

      (d) Pledged Equity.  (i) Pledgor is the legal and beneficial  owner of the
Pledged  Equity;  (ii) the Pledged Equity is duly  authorized and issued,  fully
paid and  non-assessable  (as applicable),  and all documentary,  stamp or other
taxes or fees owing in  connection  with the  issuance,  transfer  and/or pledge
thereof   hereunder  have  been  paid;  (iii)  no  dispute,   right  of  setoff,
counterclaim  or defense  exists with  respect to all or any part of the Pledged
Equity;  (iv) the  Pledged  Equity  is free and  clear  of all  Liens,  options,
warrants, puts, calls or other rights of third Persons, and restrictions,  other
than those Liens arising under this Agreement or under the Bank One Pledge;  (v)
Pledgor  has full  right and  authority  to pledge  the  Pledged  Equity for the
purposes and upon the terms set out herein;  (vi)  certificates  (as applicable)
representing  the  Pledged  Equity  have  been  delivered  to  Bank  One,  NA as
Collateral Agent, pursuant to the Bank One Pledge, together with a duly executed
blank stock or transfer power for each certificate;  and (vii) no Subsidiary has
issued, and there are not outstanding,  any options, warrants or other rights to
acquire Equity of any Subsidiary.

      (e)  Location.   Each  Person  comprising  Pledgor  is  organized  in  the
jurisdictions  indicated on Schedule 2 attached hereto;  such  jurisdictions are
the "location" of such person, as such term is used in the Code.

      (f) Name.  Pledgor has not  conducted  business  under any name except the
names in which it has executed this Agreement.

      Section 3.2. Affirmative Covenants. Unless Pledgee shall otherwise consent
in writing,  Pledgor  will at all times comply with the  covenants  contained in
this Section 3.2 from the date hereof and so long as any part of the Obligations
is outstanding.

      (a) Ownership and Liens.  Pledgor will maintain good and marketable  title
to all Collateral  free and clear of all Liens,  encumbrances or adverse claims,
except for (i) the security  interest  created by this  Agreement,  and (ii) the
Liens  created  pursuant  to the  Bank  One  Pledge.  Pledgor  will  cause to be
terminated  any financing  statement or other  registration  with respect to the
Collateral,  except  such as may exist or as may have been filed in favor of (or
otherwise  assigned to) Pledgee.  Pledgor will defend Pledgee's right, title and
special  property and  security  interest in and to the  Collateral  against the
claims of any Person.

      (b)  Further  Assurances.  Pledgor  will at any time and from time to time
promptly execute and deliver all further  instruments and documents and take all
further action that may be necessary or desirable or that Pledgee may reasonably
request in order (i) to perfect  and protect the  security  interest  created or
purported to be created hereby and the priority of such security interest;  (ii)
to enable  Pledgee to exercise and enforce its rights and remedies  hereunder in
respect of the  Collateral;  or (iii) to  otherwise  effect the purposes of this
Agreement,  including:

                                       5
<PAGE>

authorizing and filing such financing or continuation statements,  or amendments
thereto,  as may be  necessary or desirable or that Pledgee may request in order
to perfect and preserve the security interest created or purported to be created
hereby.

       (c) Delivery of Pledged  Equity.  Promptly  upon the  termination  of the
Liens created under the Bank One Pledge,  (i) all certificates,  instruments and
writings  evidencing the Pledged Equity shall be delivered to Pledgee,  (ii) all
other   certificates,   instruments  and  writings   thereafter   evidencing  or
constituting  Pledged  Equity shall be delivered  to Pledgee  promptly  upon the
receipt  thereof by or on behalf of Pledgor,  and (iii) all Pledged Equity shall
be held by or on behalf of Pledgee pursuant hereto and shall be delivered in the
same  manner and with the same  effect as  described  in Section 2.1 and Section
3.1. Upon delivery,  such Equity shall thereupon constitute "Pledged Equity" and
shall be subject to the Liens  herein  created,  for the  purposes  and upon the
terms and conditions set forth in this Agreement and the other Loan Papers.

      (d) Defense of Title.  Pledgor will take any and all actions  necessary to
defend  title to the  Collateral  against all persons and to defend the security
interest of Pledgee in the Collateral and the priority  thereof against any Lien
not expressly permitted hereunder.

      (e) Proceeds of Pledged Equity. If Pledgor shall receive, by virtue of its
being or having been an owner of any Pledged Equity,  any (i) Equity  (including
any certificate  representing  any Equity or distribution in connection with any
increase or  reduction  of capital,  reorganization,  reclassification,  merger,
consolidation,  sale of assets,  or spinoff or  split-off),  promissory  note or
other  instrument or writing;  (ii) option or right,  whether as an addition to,
substitution  for, or in exchange for, any Pledged  Equity or  otherwise;  (iii)
dividends or other distributions payable in cash (except such dividends or other
distributions permitted to be retained by Pledgor pursuant to Section 4.7) or in
securities  or other  property;  or (iv)  dividends  or other  distributions  in
connection  with a partial or total  liquidation or dissolution or in connection
with a reduction of capital,  capital surplus or paid-in surplus,  Pledgor shall
receive the same in trust for the benefit of Pledgee,  shall  segregate  it from
Pledgor's other property,  and shall promptly deliver it to Pledgee in the exact
form received,  with any necessary  endorsement or appropriate stock or transfer
powers duly executed in blank, to be held by Pledgee as Collateral.

      (f) Status of Pledged  Equity.  The  certificates  evidencing  the Pledged
Equity (as applicable)  shall at all times be valid and genuine and shall not be
altered.  The  Pledged  Equity at all times  shall be duly  authorized,  validly
issued,  fully paid, and non-assessable (as applicable),  shall not be issued in
violation of the  pre-emptive  rights of any Person or of any agreement by which
Pledgor or any Subsidiary is bound, and shall not be subject to any restrictions
or  conditions  with respect to the  transfer,  voting or capital of any Pledged
Equity.

      (g)  Taxes.  Pledgor  will  pay  when  due  all  taxes,   assessments  and
governmental  charges and levies  upon the  Collateral,  except  those which are
being  contested in good faith by  appropriate  proceedings  and with respect to
which no Lien exists.

      Section 3.3. Negative Covenants. Unless Pledgee shall otherwise consent in
writing,  Pledgor will at all times comply with the covenants  contained in this
Section 3.3 from the date hereof and so long as any part of the  Obligations  is
outstanding.

                                       6
<PAGE>

      (a) Transfer or Encumbrance.  Pledgor will not sell,  assign (by operation
of law or otherwise),  transfer,  exchange, lease or otherwise dispose of any of
the  Collateral,  nor  will  Pledgor  grant a Lien  upon or file or  record  any
financing  statement or other registration with respect to the Collateral (other
than the security  interests created by this Agreement and the Bank One Pledge),
nor will Pledgor allow any such Lien, financing statement, or other registration
to exist or deliver actual or  constructive  possession of the Collateral to any
other  Person other than Liens in favor of Pledgee and Liens  created  under the
Bank One Pledge.

      (b)  Financing  Statement  Filings.   Pledgor  recognizes  that  financing
statements  pertaining to the Collateral have been or may be filed where Pledgor
is organized or formed, maintains any Collateral, has its records concerning any
Collateral,  has its chief executive  office or chief place of business,  or has
its principal  place of  residence.  Without  limitation  of any other  covenant
herein,  Pledgor  will not  cause or permit  any  change to be made in its name,
identity or corporate structure, or any change to be made to its jurisdiction of
formation or  organization  or any change to its mailing  address unless Pledgor
shall have  notified  Pledgee of such change at least  thirty (30) days prior to
the  effective  date of such  change,  and shall  have  first  taken all  action
required by Pledgee  for the purpose of further  perfecting  or  protecting  the
security interest in favor of Pledgee in the Collateral. In any notice furnished
pursuant to this  subsection,  Pledgor will  expressly  state that the notice is
required  by this  Agreement  and  contains  facts that may  require  additional
filings of financing  statements or other notices for the purposes of continuing
perfection of Pledgee's security interest in the Collateral.

      (c) Impairment of Security Interest. Pledgor will not take or fail to take
any action which would in any manner  impair the  enforceability  or priority of
Pledgee's security interest in any Collateral.

      (d)  Restrictions  on  Pledged  Equity.  Pledgor  will not enter  into any
agreement  creating,  or otherwise permit to exist, any restriction or condition
upon the  transfer,  voting or control of any Pledged  Equity,  other than those
contained in the LLC Agreement.

                                   ARTICLE IV

                       Remedies, Powers and Authorizations

      Section 4.1.   Provisions Concerning the Collateral.

      (a) Additional  Financing  Statement  Filings.  Pledgor hereby  authorizes
Pledgee to file one or more financing or continuation statements, and amendments
thereto,  relating  to the  Collateral.  Pledgor  further  agrees that a carbon,
photographic or other reproduction of this Agreement or any financing  statement
describing  any  Collateral is  sufficient  as a financing  statement and may be
filed in any jurisdiction Pledgee may deem appropriate.

      (b) Power of Attorney.  During any period in which an Event of Default has
occurred and is  continuing,  Pledgor  hereby  irrevocably  appoints  Pledgee as
Pledgor's attorney-in-fact and proxy, with full authority in the place and stead
of  Pledgor  and in the  name of  Pledgor  or  otherwise,  from  time to time in
Pledgee's discretion,  to take any action (except for the exercise of any voting
rights  pertaining to the Pledged Equity or any part thereof) and to execute any
instrument,  certificate or notice which Pledgee may deem necessary or advisable
to  accomplish

                                       7
<PAGE>

the purposes of this Agreement including:  (i) to request or instruct Pledgor or
any Subsidiary (and each registrar,  transfer agent, or similar Person acting on
behalf of Pledgor or any  Subsidiary)  to register the pledge or transfer of the
Collateral  to Pledgee;  (ii) to otherwise  give  notification  to Pledgor,  any
Subsidiary,  registrar,  transfer agent, financial intermediary, or other Person
of Pledgee's security interests  hereunder;  (iii) to ask, demand,  collect, sue
for, recover, compound, receive and give acquittance and receipts for moneys due
and to become due under or in respect of any of the Collateral; (iv) to receive,
indorse  and  collect  any drafts or other  instruments,  documents  and chattel
paper;  and (v) to  file  any  claims  or  take  any  action  or  institute  any
proceedings  which Pledgee may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of Pledgee with respect
to any of the Collateral.

      (c)  Performance by Pledgee.  If Pledgor fails to perform any agreement or
obligation  contained herein,  Pledgee may itself perform,  or cause performance
of, such  agreement  or  obligation,  and the  expenses  of Pledgee  incurred in
connection therewith shall be payable by Pledgor under Section 4.4.

      (d) Collection Rights.  Pledgee shall have the right at any time, upon the
occurrence and during the  continuance  of a Default or an Event of Default,  to
notify any or all obligors  (including  each  Subsidiary)  under any accounts or
general  intangibles  included among the Collateral of the assignment thereof to
Pledgee  and to direct such  obligors  to make  payment of all amounts due or to
become due to Pledgor thereunder directly to Pledgee and, upon such notification
and at the  expense of Pledgor  and to the extent  permitted  by law, to enforce
collection  thereof and to adjust,  settle or  compromise  the amount or payment
thereof,  in the same manner and to the same extent as Pledgor  could have done.
After  Pledgor  receives  notice that  Pledgee has given any notice  referred to
above in this subsection,  (i) all amounts and proceeds  (including  instruments
and  writings)  received  by  Pledgor in  respect  of such  accounts  or general
intangibles  shall be received  in trust for the  benefit of Pledgee  hereunder,
shall be segregated from other funds of Pledgor and shall be forthwith paid over
to Pledgee in the same form as so received (with any necessary  endorsement)  to
be held as cash  collateral  and (A)  released to Pledgor upon the remedy of all
Defaults  or  Events  of  Default,  or (B) if any Event of  Default  shall  have
occurred  and be  continuing,  applied as  specified  in Section  4.3;  and (ii)
Pledgor will not adjust,  settle or compromise the amount or payment of any such
account or general  intangible or release wholly or partly any account debtor or
obligor thereof or allow any credit or discount thereon.

      Section 4.2. Event of Default Remedies.  If an Event of Default shall have
occurred  and be  continuing,  Pledgee may from time to time in its  discretion,
without limitation and without notice except as expressly provided below:

      (a) exercise in respect of the Collateral, in addition to other rights and
remedies provided for herein,  under the other Obligation Documents or otherwise
available to it, all the rights and remedies of a secured party on default under
the Code (whether or not the Code applies to the affected Collateral);

                                       8
<PAGE>

      (b)  require  Pledgor  to, and  Pledgor  hereby  agrees  that it will upon
request of Pledgee forthwith, assemble all or part of the Collateral as directed
by Pledgee  and make it  available  to Pledgee  at a place to be  designated  by
Pledgee which is reasonably convenient to both parties;

      (c) reduce its claim to judgment against Pledgor or foreclose or otherwise
enforce,  in whole or in part,  the  security  interest  created  hereby  by any
available judicial procedure;

      (d) dispose of, at its office,  on the  premises of Pledgor or  elsewhere,
all or any part of the Collateral, as a unit or in parcels, by public or private
proceedings,  and by way of one or more contracts (it being agreed that the sale
of any part of the  Collateral  shall not exhaust  Pledgee's  power of sale, but
sales  may be  made  from  time  to  time,  and at any  time,  until  all of the
Collateral has been sold or until the  Obligations  have been paid and performed
in full),  and at any such sale it shall not be  necessary to exhibit any of the
Collateral;

      (e) buy (or  allow  its  designee  to buy)  the  Collateral,  or any  part
thereof, at any public sale;

      (f) buy (or  allow  its  designee  to buy)  the  Collateral,  or any  part
thereof,  at any private sale if the Collateral is of a type customarily sold in
a recognized  market or is of a type which is the subject of widely  distributed
standard price quotations; and

      (g)  apply  by  appropriate  judicial  proceedings  for  appointment  of a
receiver for the Collateral, or any part thereof, and Pledgor hereby consents to
any such appointment.

      Pledgor  agrees  that,  to the extent  notice of sale shall be required by
law,  at least ten (10)  days'  notice to  Pledgor  of the time and place of any
public  sale or the  time  after  which  any  private  sale is to be made  shall
constitute reasonable  notification.  Pledgee shall not be obligated to make any
sale of Collateral  regardless of notice of sale having been given.  Pledgee may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor,  and such sale may, without further notice, be made at
the time and place to which it was so adjourned.

      Pledgor  agrees that upon a foreclosure or transfer in lieu thereof of the
Collateral  that the  purchaser  or  transferee  will be admitted as a member of
Quest  Cherokee,  with all rights of a member  therein,  including all rights to
distributions and all management and voting rights.

      Section 4.3.  Application of Proceeds.  If any Event of Default shall have
occurred and be continuing, Pledgee may in its discretion apply any cash held by
Pledgee as Collateral,  and any cash proceeds  received by Pledgee in respect of
any sale of,  collection from, or other  realization upon all or any part of the
Collateral,  in  the  order  and  manner  determined  by  Pledgee  in  its  sole
discretion.

      Section  4.4.   Release  and   Expenses.   In  addition  to,  and  not  in
qualification of, any similar obligations under other Obligation Documents:

      (a)  Pledgor  agrees to release  and forever  discharge  Pledgee  from and
against any and all claims,  losses and liabilities  growing out of or resulting
from this Agreement  (including  enforcement of this  Agreement).  The foregoing
release  and  discharge  shall  apply  whether  or not

                                       9
<PAGE>

such claims,  losses and  liabilities  are in any way or to any extent owed,  in
whole or in part,  under any claim or theory of strict  liability or are, to any
extent caused, in whole or in part, by any negligent act or omission of any kind
by Pledgee.

      (b)  Pledgor  will upon  demand pay to  Pledgee  the amount of any and all
costs and expenses, including the reasonable fees and disbursements of Pledgee's
counsel and of any experts and  agents,  which  Pledgee may incur in  connection
with  (i)  the  transactions  which  give  rise  to  this  Agreement;  (ii)  the
preparation  of  this  Agreement  and the  perfection  and  preservation  of the
security interest created under this Agreement; (iii) the administration of this
Agreement; (iv) the custody,  preservation, use or operation of, or the sale of,
collection from, or other realization upon, any Collateral;  (v) the exercise or
enforcement  of any of the rights of Pledgee  hereunder;  or (vi) the failure by
Pledgor to perform or observe  any of the  provisions  hereof,  except  expenses
resulting from Pledgee's gross negligence or willful misconduct.

      Section 4.5.  Non-Judicial  Remedies.  In granting to Pledgee the power to
enforce its rights hereunder without prior judicial process or judicial hearing,
Pledgor expressly waives,  renounces and knowingly  relinquishes any legal right
which might otherwise require Pledgee to enforce its rights by judicial process.
In so providing for non-judicial remedies,  Pledgor recognizes and concedes that
such  remedies  are  consistent  with the  usage of  trade,  are  responsive  to
commercial necessity,  and are the result of a bargain at arm's length.  Nothing
herein is  intended to prevent  Pledgee or Pledgor  from  resorting  to judicial
process at either party's option.

      Section 4.6. Other  Recourse.  Pledgor waives any right to require Pledgee
to proceed  against any other Person,  exhaust any  Collateral or other security
for the  Obligations,  or to have any Other  Liable Party joined with Pledgor in
any suit arising out of the Obligations or this  Agreement,  or pursue any other
remedy  in  Pledgee's  power.  Pledgor  further  waives  any and all  notice  of
acceptance of this Agreement and of the creation,  modification,  rearrangement,
renewal or extension for any period of any of the Obligations from time to time.
Pledgor  further waives any defense arising by reason of any disability or other
defense of any Other Liable Party or by reason of the  cessation  from any cause
whatsoever  of the  liability  of  any  Other  Liable  Party.  Until  all of the
Obligations  shall  have  been  paid in  full,  Pledgor  shall  have no right to
subrogation and Pledgor waives the right to enforce any remedy which Pledgee has
or may hereafter have against any Other Liable Party,  and waives any benefit of
and any right to participate  in any other security  whatsoever now or hereafter
held by  Pledgee.  Pledgor  authorizes  Pledgee,  without  notice or demand  and
without  any  reservation  of  rights  against  Pledgor  and  without  affecting
Pledgor's  liability  hereunder or on the Obligations,  from time to time to (a)
take or hold any other  property  of any type from any other  Person as security
for the Obligations, and exchange, enforce, waive and release any or all of such
other  property;  (b)  renew,  extend  for  any  period,   accelerate,   modify,
compromise,  settle or release any of the  obligations of any Other Liable Party
in  respect  to any  or  all  of the  Obligations  or  other  security  for  the
Obligations;  (c)  waive,  enforce,  modify,  amend  or  supplement  any  of the
provisions of any  Obligation  Document with any Person other than Pledgor;  and
(d) release or substitute any Other Liable Party.

                                       10
<PAGE>

      Section 4.7.   Voting  Rights,  Dividends  Etc.  in  Respect  of Pledged
Equity.

      (a) So long as no Default or Event of Default  shall have  occurred and be
continuing, Pledgor may receive and retain any and all dividends,  distributions
or interest paid in respect of the Pledged Equity;  provided,  however, that any
and all

      (i)  dividends,  distributions  and interest paid or payable other than in
      cash  in  respect  of,  and  instruments  and  other  property   received,
      receivable or otherwise  distributed in respect of or in exchange for, any
      Pledged Equity,

      (ii) dividends and other  distributions paid or payable in cash in respect
      of any Pledged Equity in connection with a partial or total liquidation or
      dissolution or in connection with a reduction of capital,  capital surplus
      or paid-in surplus, and

      (iii)cash paid,  payable or otherwise  distributed in redemption of, or in
      exchange for, any Pledged Equity,

      immediately  upon the  satisfaction in full of the obligations  secured by
the Bank One Pledge,  shall be, and shall  forthwith  be delivered to Pledgee to
hold as, Pledged Equity and shall, if received by Pledgor,  be received in trust
for the benefit of Pledgee,  be segregated  from the other  property or funds of
Pledgor,  and be forthwith  delivered to Pledgee in the exact form received with
any necessary  endorsement or appropriate stock or transfer powers duly executed
in blank, to be held by Pledgee as Collateral.

      (b) Upon the  occurrence  and  during the  continuance  of a Default or an
      Event of Default:

      (i)  all  rights  of  Pledgor  to  receive   and  retain  the   dividends,
      distributions  and interest  payments  which  Pledgor  would  otherwise be
      authorized  to  receive  and retain  pursuant  to  subsection  (a) of this
      Section 4.7 shall automatically cease, and all such rights shall thereupon
      become vested in Pledgee which shall  thereupon  have the right to receive
      and hold as Pledged  Equity such  dividends,  distributions  and  interest
      payments;

      (ii) without limiting the generality of the foregoing,  Pledgee may at its
      option exercise any and all rights of conversion,  exchange,  subscription
      or any  other  rights,  privileges  or  options  pertaining  to any of the
      Pledged  Equity  (except  voting  rights) as if it were the absolute owner
      thereof,  including the right to exchange, in its discretion,  any and all
      of the  Pledged  Equity upon the  merger,  consolidation,  reorganization,
      recapitalization or other adjustment of Pledgor or any Subsidiary, or upon
      the  exercise  by Pledgor or any  Subsidiary  of any right,  privilege  or
      option pertaining to any Pledged Equity, and, in connection therewith,  to
      deposit and deliver any and all of the Pledged  Equity with any committee,
      depository,  transfer agent, registrar or other designated agent upon such
      terms and conditions as it may determine; and

      (iii)all  dividends  and interest  payments  which are received by Pledgor
      contrary to the provisions of subsection (b) (i) of this Section 4.7 shall
      be received in trust for the benefit of Pledgee,  shall be segregated from
      other funds of  Pledgor,  and shall be  forthwith  paid

                                       11
<PAGE>

     over to Pledgee as Pledged Equity in the exact form received, to be held by
     Pledgee as Collateral.

Anything  herein to the contrary  notwithstanding,  Pledgee may not exercise any
voting  rights  pertaining to the Pledged  Equity,  and Pledgor may at all times
exercise any and all voting rights  pertaining to the Pledged Equity or any part
thereof for any purpose not inconsistent with the terms of this Agreement or any
other Obligation Document; provided, however, upon the occurrence and during the
continuance  of a Default or an Event of Default,  Pledgor  will not exercise or
refrain from  exercising  any such right,  as the case may be, if Pledgee  gives
notice  that,  in  Pledgee's  judgment,  such action  would result in a material
adverse  change with respect to the value of the Pledged  Equity or the benefits
to Pledgee of its security interest hereunder.

      Section  4.8.  Private Sale of Pledged  Equity.  Pledgor  recognizes  that
Pledgee may deem it  impracticable to effect a public sale of all or any part of
the Pledged  Equity and that  Pledgee may,  therefore,  determine to make one or
more private sales of any such  securities  to a restricted  group of purchasers
who will be obligated to agree,  among other things,  to acquire such securities
for their own account, for investment and not with a view to the distribution or
resale thereof. Pledgor acknowledges that any such private sale may be at prices
and on terms less  favorable to the seller than the prices and other terms which
might have been obtained at a public sale and,  notwithstanding  the  foregoing,
agrees  that  such  private  sales  shall  be  deemed  to  have  been  made in a
commercially  reasonable  manner and that Pledgee  shall have no  obligation  to
delay the sale of any such securities for the period of time necessary to permit
Pledgor or any  Subsidiary  to register such  securities  (with no obligation of
Pledgor or any Subsidiary to accomplish such registration) for public sale under
the Securities Act of 1933, as amended (the "Securities  Act").  Pledgor further
acknowledges  and agrees that any offer to sell such  securities  which has been
(a) publicly advertised on a bona fide basis in a newspaper or other publication
of general circulation in the financial community of Oklahoma City, Oklahoma (to
the extent that such an offer may be so advertised  without  prior  registration
under the Securities  Act), or (b) made privately in the manner  described above
to not less than  fifteen (15) bona fide  offerees  shall be deemed to involve a
"public sale" for the purposes of Section 9.610 of the Code (or any successor or
similar,  applicable  statutory  provision)  as then in  effect  in the State of
Texas,  notwithstanding  that such sale may not  constitute a "public  offering"
under the  Securities  Act,  and that  Pledgee  may, in such event,  bid for the
purchase of such securities.

                                    ARTICLE V

                                  Miscellaneous

      Section 5.1.  Notices.  Any notice or communication  required or permitted
hereunder shall be given in writing,  sent by personal delivery, by telecopy, by
delivery  service with proof of delivery,  or by registered or certified  United
States mail, postage prepaid, addressed to the appropriate party as follows:

                                       12
<PAGE>

           To Pledgor:    c/o Quest Resource Corporation
                          5901 N. Western, Suite 200
                          Oklahoma City, Oklahoma 73118
                          Attn: Jerry D. Cash
                          Fax No.: (405) 840-9894

           To Pledgee:    Cherokee Energy Partners LLC
                          200 Clarendon Street
                          55th Floor
                          Boston, MA  02117
                          Attn:  General Counsel
                          Fax No.:  (617) 867-4698

or to such  other  address  or to the  attention  of such  other  individual  as
hereafter  shall be  designated  in  writing  by the  applicable  party  sent in
accordance  herewith.  Any such notice or communication  shall be deemed to have
been given (a) in the case of personal delivery or delivery  service,  as of the
date of first  attempted  delivery  at the  address  or in the  manner  provided
herein,  (b) in the  case  of  telecopy,  upon  receipt,  or (c) in the  case of
registered or certified  United States mail, three (3) days after deposit in the
mail.

      Section 5.2.  Amendments.  No amendment of any provision of this Agreement
shall be  effective  unless it is in writing and signed by Pledgor and  Pledgee,
and no  waiver  of any  provision  of  this  Agreement,  and no  consent  to any
departure by Pledgor  therefrom,  shall be effective unless it is in writing and
signed by Pledgee,  and then such waiver or consent  shall be effective  only in
the specific  instance  and for the specific  purpose for which given and to the
extent specified in such writing.

      Section 5.3.  Preservation of Rights. No failure on the part of Pledgee to
exercise,  and no delay in  exercising,  any right  hereunder or under any other
Obligation  Document shall operate as a waiver thereof;  nor shall any single or
partial  exercise  of any such  right  preclude  any other or  further  exercise
thereof or the  exercise  of any other  right.  Neither  the  execution  nor the
delivery  of this  Agreement  shall in any  manner  impair or  affect  any other
security for the Obligations. The rights and remedies of Pledgee provided herein
and in the other Obligation  Documents are cumulative of and are in addition to,
and not  exclusive  of, any rights or remedies  provided  by law.  The rights of
Pledgee  under  any  Obligation  Document  against  any  party  thereto  are not
conditional  or  contingent  on any attempt by Pledgee to exercise any of its or
their rights under any other  Obligation  Document against such party or against
any other Person.

      Section 5.4.  Unenforceability.  Any provision of this Agreement  which is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be  ineffective  to  the  extent  of  such  prohibition  or  invalidity  without
invalidating the remaining  portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction.

      Section 5.5. Survival of Agreements. All representations and warranties of
Pledgor  herein,  and all  covenants  and  agreements  herein shall  survive the
execution  and delivery of this  Agreement,  the  execution  and delivery of any
other Obligation Documents and the creation of the Obligations.

                                       13
<PAGE>

      Section 5.6.  Other Liable Party.  Neither this Agreement nor the exercise
by Pledgee or the  failure of  Pledgee to  exercise  any right,  power or remedy
conferred  herein or by law shall be  construed  as  relieving  any Other Liable
Party  from  liability  on the  Obligations  or  any  deficiency  thereon.  This
Agreement  shall  continue  irrespective  of the fact that the  liability of any
Other  Liable  Party  may  have  ceased  or  irrespective  of  the  validity  or
enforceability  of any other  Obligation  Document to which Pledgor or any Other
Liable Party may be a party,  and  notwithstanding  the  reorganization,  death,
incapacity  or bankruptcy of any Other Liable  Party,  and  notwithstanding  the
reorganization  or bankruptcy  or other event or proceeding  affecting any Other
Liable Party.

      Section 5.7.  Binding  Effect and  Assignment.  This  Agreement  creates a
continuing  security  interest  in the  Collateral  and (a) shall be  binding on
Pledgor and its successors and permitted assigns, and (b) shall inure,  together
with all rights and remedies of Pledgee hereunder, to the benefit of Pledgee and
its  respective  successors  and  permitted  transferees  and  assigns.  Without
limiting  the  generality  of the  foregoing,  Pledgee  may  pledge,  assign  or
otherwise  transfer any or all of its rights under any or all of the  Obligation
Documents to any other  Person,  and such other Person  shall  thereupon  become
vested with all of the benefits in respect  thereof granted herein or otherwise.
None of the rights or duties of Pledgor  hereunder  may be assigned or otherwise
transferred without the prior written consent of Pledgee.

      Section 5.8.  Termination.  It is  contemplated by the parties hereto that
there may be times when no Obligations are outstanding, but notwithstanding such
occurrences,  this  Agreement  shall remain valid and shall be in full force and
effect as to subsequent outstanding  Obligations.  Upon the satisfaction in full
of the  Obligations,  and  upon  written  request  for  the  termination  hereof
delivered  by Pledgor to  Pledgee,  this  Agreement  and the  security  interest
created hereby shall terminate and all rights to the Collateral  shall revert to
Pledgor.  Pledgee will,  upon Pledgor's  request and at Pledgor's  expense,  (a)
return  to  Pledgor  such of the  Collateral  as  shall  not have  been  sold or
otherwise  disposed of or applied pursuant to the terms hereof,  and (b) execute
and deliver to Pledgor such  documents as Pledgor  shall  reasonably  request to
evidence such termination.

      Section  5.9.   GOVERNING  LAW.  THIS  AGREEMENT  SHALL  BE  CONSTRUED  IN
ACCORDANCE  WITH AND  GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF
THE UNITED STATES OF AMERICA.

      Section 5.10.  Counterparts.  This Agreement may be separately executed in
any number of  counterparts,  all of which when so  executed  shall be deemed to
constitute one and the same Agreement.

      Section 5.11.  Subordination.  Notwithstanding  anything herein contained,
until the obligations secured by the Bank One Pledge (including any refinancings
thereof) have been paid in full in cash (including  interest  accruing after the
commencement of any bankruptcy or insolvency proceeding regardless of whether it
is an allowed claim in such proceeding) and all commitments  under the Revolving
Credit  Agreement  and Term Credit  Agreement  (as said terms are defined in the
Bank One Pledge,  and as the same may be assigned and amended in connection with
the  refinancing  thereof),  have  terminated,  (a) all Liens of  Pledgee in the
Collateral  shall be and hereby are  subordinated  for all  purposes  and in all
respects  to the  Liens

                                       14
<PAGE>

created  by the Bank One  Pledge  (as the same may be  assigned  and  amended in
connection with the refinancing thereof),  in the Collateral,  regardless of the
time,  manner or order of perfection of any such Liens and (b) Pledgee shall not
in any event  exercise any rights and remedies  granted under this  Agreement or
applicable law with respect to the  Collateral.  Pledgee agrees that it will not
at anytime contest the validity,  perfection,  priority or enforceability of the
indebtedness represented by either the Revolving Credit Agreement or Term Credit
Agreement,  or the Liens of  Collateral  Agent in the  Collateral  securing such
indebtedness.  In the event that Collateral  Agent releases or agrees to release
any of its  Liens  in the  Collateral  in  connection  with  the  sale or  other
disposition  thereof or any of the Collateral is sold or retained  pursuant to a
foreclosure  or  similar  action,  Pledgee  shall (or shall  cause its agent to)
promptly execute and deliver to Collateral Agent such termination statements and
releases as Collateral Agent shall  reasonably  request to effect the release of
the Liens of  Pledgee  in such  Collateral.  In  furtherance  of the  foregoing,
Pledgee hereby irrevocably appoints Collateral Agent its attorney-in-fact,  with
full  authority  in the place and stead of Pledgee and in the name of Pledgee or
otherwise,  to execute and deliver any document or instrument  which Pledgee may
be required to deliver pursuant to this Section 5.11.

                           [Signature Pages to Follow]

                                       15
<PAGE>

      IN WITNESS WHEREOF,  Pledgor has executed and delivered this Agreement, as
of the date first above written.

                               QUEST OIL & GAS CORPORATION,
                               a Kansas corporation

                               By:    /s/ Jerry Cash
                                      ---------------------------------
                               Name:  Jerry D. Cash
                               Title: Co-Chief Executive Officer and Secretary

                               QUEST ENERGY SERVICE, INC.,
                               a Kansas corporation

                               By:    /s/ Jerry Cash
                                      ---------------------------------
                               Name:  Jerry D. Cash
                               Title: Co-Chief Executive Officer and Secretary

                               STP CHEROKEE, INC.,
                               an Oklahoma corporation

                               By:    /s/ Jerry Cash
                                      ---------------------------------
                               Name:  Jerry D. Cash
                               Title: Co-Chief Executive Officer and Secretary

                               PONDEROSA GAS PIPELINE  COMPANY,  INC.,
                               a Kansas corporation

                               By:    /s/ Jerry Cash
                                      ---------------------------------
                               Name:  Jerry D. Cash
                               Title: Co-Chief Executive Officer and Secretary

                                       16
<PAGE>

                               PRODUCERS SERVICE, INCORPORATED,
                               a Kansas corporation

                               By:    /s/ Jerry Cash
                                      ---------------------------------
                               Name:  Jerry D. Cash
                               Title: Co-Chief Executive Officer and Secretary

                               J-W GAS GATHERING, L.L.C.,
                               a Kansas limited liability company

                               By:    /s/ Jerry Cash
                                      ---------------------------------
                               Name:  Jerry D. Cash
                               Title: Manager

Each Subsidiary hereby acknowledges and consents to the pledge of the Collateral
and hereby  agrees to  observe  and  perform  each and every  provision  of this
Agreement applicable to such Subsidiary.

                               QUEST CHEROKEE, LLC,
                               a Delaware limited liability company

                               By:    /s/ Jerry Cash
                                      ---------------------------------
                               Name:  Jerry D. Cash
                               Title: Manager

                                       17
<PAGE>

                                    EXHIBIT A

                              Obligation Documents

1. The Member Purchase Agreement

2. Amended and Restated Limited  Liability  Company Agreement of Quest Cherokee,
LLC, a Delaware  limited  liability  company  dated  December 22, 2003 (the "LLC
Agreement")

3. Assignment  Agreement dated as of December 22, 2003,  between the Parent,  as
assignor, and Quest Cherokee, as assignee,  assigning the Parent's interests and
rights  under the  Purchase  and Sale  Agreement  dated as of December 10, 2003,
between Devon Energy Production Company, L.P. and Tall Grass Gas Services,  LLC,
as sellers, and Parent, as the buyer

<PAGE>

                                   SCHEDULE 1

All Class B Membership Interests issued and outstanding in Quest Cherokee,  LLC,
a Delaware limited liability company.

<PAGE>

                                   SCHEDULE 2

                    Jurisdictions of Organization; Location

              Pledgor                           Location

Quest Oil & Gas Corporation                      Kansas
Quest Energy Service, Inc.                       Kansas
STP Cherokee, Inc.                              Oklahoma
Ponderosa Gas Pipeline Company, Inc.             Kansas
Producers Service, Incorporated                  Kansas
J-W Gas Gathering, L.L.C.                        Kansas

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