Document:

Exhibit 4.6
                                                                     -----------

                                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 Bank One, NA, with its main office in Chicago,  Illinois, as Collateral
Agent  (defined  below) for the benefit of Revolving  Lenders (as defined below)
and Term Lenders (defined below) (herein called "Pledgee").

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

     WHEREAS,  Quest  Cherokee,   LLC,  a  Delaware  limited  liability  company
("Borrower"),  Bank One,  NA, as  Administrative  Agent  thereunder  ("Revolving
Agent"),  and the financial  institutions  described as Banks on Schedule  1.1-A
thereto  (collectively,  "Revolving Lenders") are parties to that certain Credit
Agreement (as amended, restated, supplemented or otherwise modified from time to
time, the "Revolving Credit Agreement") dated as of December 22, 2003,  pursuant
to which  Revolving  Lenders have agreed to make revolving loans and participate
in letters of credit issued on behalf of Borrower; and

     WHEREAS,  Borrower,  Bluestem  Pipeline,  LLC, a Delaware limited liability
company ("Bluestem"),  Bank One, NA, as Agent thereunder ("Term Agent"), and the
financial institutions from time to time party thereto as Lenders (collectively,
"Term  Lenders"  and,  together  with  Revolving  Lenders,  "Lenders"  and, each
individually,  a "Lender")  are parties to that certain  Senior Term Second Lien
Secured  Credit  Agreement  (as  amended,  restated,  supplemented  or otherwise
modified from time to time, the "Term Credit  Agreement" and,  together with the
Revolving Credit Agreement,  the "Credit  Agreements" and, each individually,  a
"Credit  Agreement")  dated as of  December  22,  2003,  pursuant  to which Term
Lenders have agreed to make a term loan to Borrower; and

     WHEREAS,  certain of the  relative  rights and  remedies  of the  Revolving
Lenders and Term  Lenders are set forth in that  certain  Collateral  Agency and
Intercreditor  Agreement  dated December 22, 2003 among  Revolving  Agent,  Term
Agent,  Bank One,  NA, as  Collateral  Agent  thereunder  ("Collateral  Agent"),
Lenders,  Cherokee Energy  Partners LLC, a Delaware  limited  liability  company
("Cherokee Partners"), Bluestem and Borrower (as amended, restated, supplemented
or otherwise modified from time to time, the "Intercreditor Agreement"); and

     WHEREAS,  it is a condition  precedent to the  extensions  of credit by the
applicable  Lenders under the applicable  Credit  Agreements  that,  among other
things,  Pledgor  shall  have  executed  and  delivered  to  Pledgee a  security
agreement  granting to Pledgee,  for the benefit of Lenders, a security interest
in the Collateral (as defined herein); and

     WHEREAS,  the board of directors of Pledgor has  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.

                                       1
<PAGE>

     NOW,  THEREFORE,  in  consideration  of the premises and in order to induce
Lenders to extend credit under the Credit Agreements, 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:

     "Code" means the Uniform  Commercial  Code as now or hereafter in effect in
the State of Texas; 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,  "Code" 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.

     "Commitments" means the agreement or commitment by Lenders to make loans or
otherwise extend credit to Borrower under the Credit  Agreements,  and any other
agreement,  commitment,  statement of terms or other document  contemplating the
making of loans or  advances or other  extension  of credit by Lenders to or for
the account of  Borrower  which is now or at any time  hereafter  intended to be
secured by the Collateral under this Agreement.

     "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 Borrower.

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

     "Loan Papers" means,  collectively,  the Revolving Loan Papers and the Term
Loan Papers.

     "Notes" means, collectively, the Revolving Notes and the Term Notes.

     "Obligation  Documents"  means the Credit  Agreements,  the Notes, the Loan
Papers,  and all other documents and  instruments  under, by reason of which, or
pursuant  to  which,  any or all of the  Obligations  are  evidenced,  governed,
secured,  or otherwise dealt with, and all other agreements,  certificates,  and
other documents,  instruments and writings  heretofore or hereafter delivered in
connection herewith or therewith.

     "Obligations"  means all present and future  indebtedness,  obligations and
liabilities  of whatever type which are or shall be secured  pursuant to Section
2.2.

                                       2
<PAGE>

     "Other  Liable Party" means any Person,  other than Pledgor,  but including
Borrower,  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 or any Lender a Lien upon any  property as security for
the Obligations.

     "Permitted  Subordinate  Liens"  means Liens  granted to Cherokee  Partners
pursuant to that certain Pledge Agreement dated as of the date hereof,  executed
by Pledgor in favor of Cherokee  Partners,  as the same is in effect on the date
hereof, so long as such Liens remain  subordinate to the Liens of this Agreement
in a manner satisfactory to Pledgee in its sole discretion.

     "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).

     "Revolving Loan Papers" means the Revolving Credit Agreement, the Revolving
Notes,   this   Agreement,   each  Master  Debt  Guaranty  (as  defined  in  the
Intercreditor  Agreement) which may now or hereafter be executed,  each Security
Document (as defined in the Intercreditor  Agreement) which may now or hereafter
be executed,  all mortgages,  mortgage  amendments  and mortgage  supplements or
modifications now or at any time hereafter  delivered pursuant to Section 5.1 of
the  Revolving  Credit  Agreement,  and all  other  certificates,  documents  or
instruments delivered in connection with the Revolving Credit Agreement,  as the
foregoing may be amended from time to time.

     "Revolving  Notes" means,  collectively,  the promissory notes from time to
time  executed by Borrower  and  payable to the order of each  Revolving  Lender
pursuant  to the terms of the  Revolving  Credit  Agreement  and shall  include,
without  limitation,  that certain Note dated December 22, 2003,  payable to the
order of Bank One, NA, in the original principal amount of $200,000,000, bearing
interest as therein  provided and with interest and  principal  being payable as
therein provided.

     "Term Loan Papers" means the Term Credit  Agreement,  the Term Notes,  this
Agreement,  each Master Debt  Guaranty  which may now or  hereafter be executed,
each Security  Document  which may now or hereafter be executed,  all mortgages,
mortgage amendments and mortgage supplements or modifications now or at any time
hereafter  delivered  in  connection  with the  Term  Credit  Agreement,  as the
foregoing may be amended from time to time.

     "Term Notes" means,  collectively,  the promissory  notes from time to time
executed  by Borrower  and payable to the order of each Term Lender  pursuant to
the terms of the Term Credit Agreement.

     Section 1.2. Other  Definitions.  Reference is hereby made to the Revolving
Credit  Agreement for a statement of the terms thereof.  All  capitalized  terms
used in this Agreement which are defined in the Revolving  Credit  Agreement and
not otherwise defined herein shall

                                       3
<PAGE>

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

     Section 1.3. Schedules. All schedules 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
Schedules, Articles, Sections,  subsections, and other subdivisions refer to the
Schedules,  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

     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 for the benefit of Lenders in and to all
of  Pledgor's  following  rights,  interests  and  property  (collectively,  the
"Collateral"):

     (a) all of the issued and  outstanding  Equity of Borrower (i) described on
Schedule 1 attached hereto and (ii) that Pledgor now owns or hereafter  acquires
(all of the foregoing being herein sometimes called the "Pledged Equity");

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

                                       4
<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:

     (a) Credit Agreement Indebtedness. The payment by Borrower, as and when due
and  payable,  of all amounts  from time to time owing by  Borrower  under or in
respect  of the  Credit  Agreements,  the Notes or any of the  other  Obligation
Documents.

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

     (c) Performance. The due performance and observance by Borrower and Pledgor
of all of their other obligations from time to time existing under or in respect
of any of the Obligation Documents.

     (d) Oil & Gas Hedge  Transactions.  The payment and  performance of any and
all present or future  obligations of any Credit Party according to the terms of
any  present  or  future  Oil  &  Gas  Hedge  Transaction,   including,  without
limitation, any present or future swap agreements, cap, floor, collar, exchange,
transaction,  forward  agreement  or other  exchange  or  protection  agreements
relating  to crude oil,  natural gas or other  hydrocarbons,  or any option with
respect to any such  transaction now existing or hereafter  entered into between
and/or among any Credit  Party,  Pledgee,  any Lender or any affiliate of 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 Lien created by this  Agreement  and  Permitted  Subordinate  Liens.  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.

     (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,  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 Borrower, or (c) any
agreement,  judgment,  license,  order or permit  applicable  to or binding upon
Pledgor or Borrower;  or (ii) result in or require the creation of any Lien upon
any  assets  or  properties  of  Pledgor  other  than the Lien  created  by this
Agreement and Permitted Subordinate Liens. No consent,  approval,  authorization
or order of, and no notice to or filing with Borrower or any other

                                       5
<PAGE>

Person is  required  in  connection  with the grant by Pledgor  of the  security
interest  herein,  or,  except to the extent  required by  applicable  law,  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  other than  Permitted
Subordinate  Liens. This Agreement creates a valid and binding security interest
in favor of Pledgee  in the  Collateral  securing  the  Obligations.  The taking
possession  by  Pledgee  (for  the  benefit  of  Lenders)  of all  certificates,
instruments and cash constituting Collateral from time to time and the filing of
the financing statements delivered  concurrently  herewith by Pledgor to Pledgee
will perfect Pledgee's  security interest  hereunder in the Collateral  securing
the Obligations,  subject to no Liens other than Permitted Subordinate Liens. 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).  Upon completion of the perfection
acts  contemplated  in this Section  3.1(c),  Pledgee will have a first priority
perfected Lien in the Collateral.

     (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 the Lien created by this  Agreement and Permitted  Subordinate  Liens;  (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 Pledgee,  together with a
duly  executed  blank stock or transfer  power for each  certificate;  and (vii)
Borrower has not issued, and there are not outstanding, any options, warrants or
other rights to acquire Equity of Borrower.

     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
or Commitments is outstanding.

     (a) Ownership and Liens. Pledgor will maintain good title to all Collateral
free and clear of all Liens, except for (i) the first priority security interest
created by this Agreement,  and (ii) Permitted  Subordinate Liens.  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  or with  respect  to  Permitted
Subordinate  Liens.  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 that Pledgee may  reasonably  request in
order (i) to perfect and protect the security  interest  created or purported to
be created hereby and the first priority of such security interest;

                                       6
<PAGE>

(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: (A) authorizing and filing such financing or continuation
statements,  or  amendments  thereto,  as may be  necessary  or that Pledgee may
reasonably  request in order to  perfect  and  preserve  the  security  interest
created or purported to be created  hereby,  and (B)  furnishing to Pledgee from
time to time  statements and schedules  further  identifying  and describing the
Collateral  and such other reports in connection  with the Collateral as Pledgee
may reasonably request, all in reasonable detail.

     (c) Delivery of Pledged Equity. All certificates,  instruments and writings
evidencing  the Pledged  Equity shall be delivered to Pledgee on or prior to the
execution and delivery of this Agreement.  All other  certificates,  instruments
and  writings  hereafter  evidencing  or  constituting  Pledged  Equity shall be
delivered  to  Pledgee  promptly  upon the  receipt  thereof  by or on behalf of
Pledgor.  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) 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.

     (e) 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 Borrower is bound,  and shall not be subject to any  restrictions  or
conditions  with  respect to the  transfer,  voting or  capital  of any  Pledged
Equity.

     (f) Permitted  Subordinate Liens.  Pledgor shall take all actions necessary
to ensure that the Permitted Subordinate Liens are at all times subordinated, in
a manner satisfactory to Pledgee in its sole discretion, to the Liens granted in
favor of Pledgee for the benefit of Lenders hereunder.

                                       7
<PAGE>

     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  or
the Commitments is outstanding.

     (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 in
connection with Permitted  Subordinate  Liens),  nor will Pledgor allow any such
Lien,  financing  statement,  or  other  registration  to exist  (other  than in
connection with Permitted  Subordinate  Liens) or deliver actual or constructive
possession of the Collateral to any other Person.

     (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  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.

                                   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.  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

                                       8
<PAGE>

of Pledgor or  otherwise,  from time to time to give  notification  to  Pledgor,
Borrower,  registrar, transfer agent, financial intermediary, or other Person of
Pledgee's security interests  hereunder and, following the occurrence and during
the continuance of an Event of Default and 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 the purposes of this
Agreement  including:  (i) to request or instruct  Pledgor or Borrower (and each
registrar,  transfer  agent,  or similar  Person  acting on behalf of Pledgor or
Borrower) to register the pledge or transfer of the Collateral to Pledgee;  (ii)
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; (iii) to receive, indorse and collect any drafts or other
instruments,  documents and chattel  paper;  and (iv) 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  reasonably
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  Borrower)  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);

                                       9
<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 any Lender to buy) the  Collateral,  or any part thereof,
at any public sale;

     (f) buy (or allow any Lender 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.

     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  contemplated  by  Section  4.4  of the
Intercreditor Agreement.

     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 and each Lender
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 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 or any
Lender.

                                       10
<PAGE>

     (b) Pledgor  agrees to pay on demand all  reasonable  costs and expenses of
Pledgee in connection with the preparation,  execution, delivery,  modification,
and amendment of this Agreement, and the perfection and preservation of the Lien
created under this Agreement, including, without limitation, the reasonable fees
and  expenses of counsel for Pledgee  with  respect  thereto and with respect to
advising  Pledgee as to its rights under this Agreement.  Pledgor further agrees
to pay on demand all costs and expenses of Pledgee,  if any (including,  without
limitation, reasonable attorneys' fees and expenses), in connection with the (i)
the custody, preservation, use or operation of, or the sale of, collection from,
or other realization upon, any Collateral;  and (ii) the exercise or enforcement
of any of the rights of Pledgee hereunder (whether through  negotiations,  legal
proceedings, or otherwise).

     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,  to the fullest
extent  permitted  by  applicable  law,  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,  to  the  fullest  extent
permitted by applicable  law, any right to require Pledgee or Lenders 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,  to the fullest extent  permitted by
applicable  law, 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, to the fullest
extent  permitted  by  applicable  law,  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,  to the fullest  extent  permitted by
applicable  law, the right to enforce any remedy which Pledgee or any Lender has
or may hereafter have against any Other Liable Party, and waives, to the fullest
extent  permitted by applicable law, any benefit of and any right to participate
in any other  security  whatsoever  now or  hereafter  held by Pledgee.  Pledgor
authorizes  Pledgee and each  Lender,  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.

                                       11
<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,

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 Borrower,  or upon the
     exercise  by  Pledgor  or  Borrower  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 over to
     Pledgee as Pledged Equity in the exact form received, to be held by Pledgee
     as Collateral.

                                       12
<PAGE>

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 Borrower
     to register such  securities  (with no obligation of Pledgor or Borrower to
     accomplish such  registration)  for public sale under the Securities Act of
     1933, as amended (the "Securities Act").

                                   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:

                  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:               Bank One, NA, as Collateral Agent
                                            1717 Main Street, 4th Floor
                                            Mail Code TX1-2448
                                            Dallas, Texas  75201
                                            Attn: J. Scott Fowler
                                            Fax No.:  (214) 290-2332

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

                                       13
<PAGE>

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 or
any Lender 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 and Lenders
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  and Lenders  under any  Obligation  Document  against any
party  thereto are not  conditional  or  contingent on any attempt by Pledgee or
Lenders  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.

     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,

                                       14
<PAGE>

to  the  benefit  of  Pledgee  and  Lenders  and  their  respective  successors,
transferees  and assigns.  Without  limiting the  generality  of the  foregoing,
Pledgee and Lenders may pledge, assign or otherwise transfer any or all of their
respective  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,  upon the termination or expiration of each Credit Agreement
and any other  Commitment  of  Lenders  to extend  credit to  Pledgor,  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. Loan Paper. This Agreement is a "Loan Paper",  and, except as
expressly  provided  herein to the  contrary,  this  Agreement is subject to all
provisions of the Credit Agreements governing the Loan Papers.

                           [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
                                  ----------------------------------------------
                                  Jerry D. Cash,
                                  Co-Chief Executive Officer and Secretary

                               QUEST ENERGY SERVICE, INC.,
                               a Kansas corporation

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

                               STP CHEROKEE, INC.,
                               an Oklahoma corporation

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

                               PONDEROSA GAS PIPELINE COMPANY, INC.,
                               a Kansas corporation

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

                                PRODUCERS SERVICE INCORPORATED,
                                a Kansas corporation

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

                                [Signature Page]

<PAGE>

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

                               By:/s/ Jerry Cash
                                  ----------------------------------------------
                                  Jerry D. Cash,
                                  Manager

Borrower  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 Borrower.

                               QUEST CHEROKEE, LLC,
                               a Delaware limited liability company

                               By:/s/ Jerry Cash
                                  ----------------------------------------------
                                  Jerry D. Cash,
                                  Manager

<PAGE>

                                   SCHEDULE 1

      Pledgor                   Certificate No.                  Units
--------------------------------------------------------------------------------
        QES                           2                       196 Class B
        STP                           3                     3,726 Class B
     Ponderosa                        4                       335 Class B
        QOG                           5                     4,790 Class B
        PSI                           6                        71 Class B
       JWGG                           7                       882 Class B

                                   Schedule 1Exhibit 4.7
                                                                     -----------

                  COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT

                                      AMONG

                              QUEST CHEROKEE, LLC,
                                  AS BORROWER,

                             BLUESTEM PIPELINE, LLC,
                                  AS GUARANTOR,

                       THE QUEST PLEDGORS, DEFINED HEREIN,
                        AND Cherokee ENERGY Partners LLC,
                                  AS PLEDGORS,

                                  BANK ONE, NA,
                AS ADMINISTRATIVE AGENT FOR THE REVOLVER LENDERS
                      UNDER THE REVOLVING CREDIT AGREEMENT,

                              THE REVOLVER LENDERS
           FROM TIME TO TIME PARTY TO THE REVOLVING CREDIT AGREEMENT,

                                  BANK ONE, NA,
                          AS AGENT FOR THE TERM LENDERS
                         UNDER THE TERM LOAN AGREEMENT,

                                THE TERM LENDERS
               FROM TIME TO TIME PARTY TO THE TERM LOAN AGREEMENT,

                                       AND

                                  BANK ONE, NA,
                               AS COLLATERAL AGENT

                            Dated: December 22, 2003

<PAGE>

                  COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT

     THIS COLLATERAL  AGENCY AND INTERCREDITOR  AGREEMENT,  dated as of December
22,  2003  (this  "Agreement"),  is made and  entered  into by and  among  QUEST
CHEROKEE,  LLC, a Delaware limited liability company (the "Borrower"),  BLUESTEM
PIPELINE,  LLC, a Delaware limited liability company  ("Bluestem"),  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
(the  "Quest  Pledgors"),  Cherokee  ENERGY  Partners  LLC, a  Delaware  limited
liability  company  ("Cherokee  Partners"),  Bank One,  NA, a  national  banking
association  with its main  office in Chicago,  Illinois  ("Bank  One"),  in its
capacity  as agent  for the  Revolver  Lenders  (as  defined  below)  under  the
Revolving Credit  Agreement (as defined below) (in such capacity,  the "Revolver
Agent"),  the REVOLVER  LENDERS,  being the  financial  institutions  parties as
"Banks" to the Revolving  Credit  Agreement (as defined below) from time to time
(the  "Revolver  Lenders"),  Bank  One,  in its  capacity  as agent for the Term
Lenders (as defined  below) under the Term Loan Agreement (as defined below) (in
such  capacity,  the  "Term  Agent"),  the TERM  LENDERS,  being  the  financial
institutions  parties as "Lenders" to the Term Loan Agreement (as defined below)
from time to time (the "Term Lenders"),  and Bank One, as Collateral Agent under
this Agreement (in such capacity, the "Collateral Agent") .

                                   WITNESSETH:

     WHEREAS,  the  Borrower,  the Revolver  Agent and the Revolver  Lenders are
parties  to that  certain  Credit  Agreement,  dated as of even  date  herewith,
pursuant  to which the  Revolver  Lenders  have  agreed to make  various  credit
facilities available to the Borrower in an aggregate maximum principal amount of
up to $200,000,000 at any time outstanding (as amended,  modified,  supplemented
or restated from time to time in accordance with this Agreement,  the "Revolving
Credit Agreement");

     WHEREAS,  the Borrower,  the Term Agent and the Term Lenders are parties to
that certain Senior Term Second Lien Secured Credit Agreement,  dated as of even
date  herewith,  pursuant to which the Term  Lenders  have agreed to make a term
loan to the Borrower in the aggregate  principal amount of up to $35,000,000 (as
amended,  modified supplemented or restated from time to time in accordance with
this Agreement, the "Term Loan Agreement");

     WHEREAS,  in order to secure the payment and  performance  of the  Revolver
Debt (as defined  below) and the payment  and  performance  of the Term Debt (as
defined below),  the Borrower has granted to the Collateral Agent, as Collateral
Agent for the benefit of both the Revolver  Lenders and the Term Lenders,  liens
on and security interests in substantially all of the Borrower's assets pursuant
to various Security Documents (as defined below); and

     WHEREAS,  in order to secure the payment and  performance  of the  Revolver
Debt (as defined  below) and the payment  and  performance  of the Term Debt (as
defined below),

                                       2
<PAGE>

     Bluestem  has  executed and  delivered  the  Bluestem  Guaranty (as defined
below) to and for the benefit of the Lenders (as defined below); and

     WHEREAS,  in order to secure the payment and  performance  of the  Revolver
Debt (as defined  below) and the payment  and  performance  of the Term Debt (as
defined below), the Quest Pledgors have executed and delivered the Equityholders
Pledge  Agreement  (as defined  below) to and for the benefit of the Lenders (as
defined below); and

     WHEREAS,  in order to secure the payment and  performance  of the  Revolver
Debt (as defined  below) and the payment  and  performance  of the Term Debt (as
defined  below),  Cherokee  Partners  has executed  and  delivered  the Cherokee
Partners  Pledge  Agreement  (as  defined  below) to and for the  benefit of the
Lenders (as defined below); and

     WHEREAS,  the  parties  hereto  now wish to set  forth  various  agreements
regarding,  among other things,  their relative rights in and  obligations  with
respect to (a) the Security Documents (as defined below), (b) the Collateral (as
defined below), and (c) the Bluestem Guaranty (as defined below).

     NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
sufficiency of which are hereby  acknowledged,  and  incorporating the foregoing
recitals herein, the parties hereto agree as follows.

                             ARTICLE 1. DEFINITIONS

     1.1 Certain Defined Terms. When used herein, the following terms shall have
the  following  meanings  (such  definitions  to be  equally  applicable  to the
singular and plural forms thereof) :

     Affiliate:  shall mean, as to any Person, any Subsidiary of such Person, or
any other Person which,  directly or indirectly,  controls, is controlled by, or
is under  common  control  with,  such Person and,  with respect to any Company,
shall mean, any director,  executive officer, general partner or manager of such
Company and any Person who holds ten percent  (10%) or more of the voting stock,
partnership interests, membership interests or other ownership interests of such
Company.  For  the  purposes  of this  definition,  "control"  (including,  with
correlative  meanings,  the terms  "controlled  by" and  "under  common  control
with"), as used with respect to any Person, shall mean the possession,  directly
or  indirectly,  of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities,
membership interests or partnership interests, or by contract or otherwise.

     Agreement:  shall mean this Collateral Agency and Intercreditor  Agreement,
as  amended,  modified,  supplemented  and/or  restated  from  time  to  time in
accordance with this Agreement.

     Agreement  Obligors:  shall mean the  Borrower,  the Companies and Cherokee
Partners,  and Agreement  Obligor shall mean any one of the Agreement  Obligors,
individually and severally.

     Asset Sale: shall have the meaning specified in Section 2.4.

                                       3
<PAGE>

     Bank  One:  shall  have the  meaning  assigned  to such  term in the  first
paragraph of this Agreement.

     Bankruptcy  Code: shall mean Title 11 of the United States Code, as amended
from time to time.

     Bluestem:  shall  have  the  meaning  assigned  to such  term in the  first
paragraph of this  Agreement,  and shall  include the  successors  and permitted
assigns  of the  entity  identified  as  such  in the  first  paragraph  of this
Agreement.

     Bluestem Guaranty:  shall mean that certain Guaranty of even date herewith,
executed by Bluestem for the benefit of the Lenders,  pursuant to which Bluestem
absolutely and unconditionally  guaranteed the prompt, complete and full payment
of the Master Debt and further  guaranteed the proper and timely  performance by
the Borrower of (i) the Revolver  Debt and (ii) the Term Debt,  as such Guaranty
may be amended,  modified,  supplemented  and/or  restated  from time to time in
accordance with this Agreement.

     Borrower:  shall  have  the  meaning  assigned  to such  term in the  first
paragraph of this  Agreement,  and shall  include the  successors  and permitted
assigns  of the  entity  identified  as  such  in the  first  paragraph  of this
Agreement.

     Business Day: shall mean a day (other than a Saturday or a Sunday) on which
national banking associations are legally open for business in Dallas, Texas and
Chicago, Illinois.

     Cherokee  Partners:  shall have the  meaning  assigned  to such term in the
first  paragraph  of this  Agreement,  and  shall  include  the  successors  and
permitted  assigns of the entity  identified  as such in the first  paragraph of
this Agreement.

     Cherokee  Partners  Pledge  Agreement:   shall  mean  that  certain  Pledge
Agreement of even date herewith from Cherokee  Partners to the Collateral  Agent
for the benefit of the Revolver  Lenders and the Term Lenders,  securing,  inter
alia, the Master Debt.

     Class of  Master  Debt:  shall  mean the  aggregate  of the debt and  other
obligations  under or issued in  connection  with a Master Debt  Agreement.  All
loans and other  obligations  outstanding  under the Revolving  Credit Agreement
shall  constitute one Class of Master Debt, and all loans and other  obligations
outstanding  under the Term Loan Agreement shall  constitute one Class of Master
Debt.

     Collateral: shall mean all property of any kind or description in which the
Collateral  Agent for the benefit of the  Revolver  Lenders and the Term Lenders
has, or purports to have, a Lien or other interest under any Security  Document,
including  the  Collateral  Account  Collateral  and all  amounts at any time on
deposit therein, and all Proceeds of Collateral.

     Collateral Account: shall have the meaning specified in Section 4.4(a).

     Collateral Account Collateral:  shall have the meaning specified in Section
4.4(a).

                                       4
<PAGE>

     Collateral  Estate:  shall  mean all right,  title,  and  interest  of each
Company  in the  Collateral  granted  to the  Collateral  Agent by the  Security
Documents and all rights of the Collateral Agent thereunder.

     Collateral  Standstill Period:  shall have the meaning set forth in Section
6.2(a).

     Collateral  Agent:  shall mean Bank One in its capacity as Collateral Agent
and any  successor  appointed  pursuant  to Section  5.5 or Section  8.9 of this
Agreement.

     Collateral  Distribution:  shall mean, (a) with respect to any  Collateral,
(i) any  payment or  distribution  of such  Collateral,  and (ii) any payment or
distribution  of  Proceeds  of such  Collateral,  and (b)  with  respect  to the
Bluestem Guaranty,  any payment or distribution by Bluestem of cash,  securities
or other property,  whether direct, effected by set-off or otherwise, on account
of the Bluestem Guaranty.

     Companies:  shall mean (a) the Borrower,  (b) Bluestem, (c) all present and
future  Subsidiaries  of the  Borrower and (d) the Quest  Pledgors;  and Company
shall mean any one of the Companies.

     Distribution  Date: shall mean each date for the distribution of amounts on
deposit in the Collateral Account.

     Dollars  and the symbol  "$":  shall  mean the  lawful  money of the United
States of America.

     Effective Date: shall mean the date of this Agreement.

     Enforcement  Action:  shall  mean any  action by the Term  Lenders  to: (i)
foreclose  or otherwise  enforce any Lien now or hereafter  existing in favor of
the  Collateral  Agent  for  the  benefit  of  the  Term  Lenders  in any of the
Collateral pursuant to any of the Security  Documents,  (ii) exercise as against
any of the  Collateral  any other  rights or remedies  the Term Lenders may have
under the Term  Documents,  the UCC or any other  applicable law with respect to
the  Collateral  pursuant to any of the Security  Documents,  or (iii) issue any
written  instruction,  direction,  request or  objection  pursuant to Article 4,
provided however,  that,  notwithstanding  anything to the contrary herein,  the
issuance of an Enforcement  Notice by or on behalf of the Term Lenders shall not
constitute an Enforcement Action.

     Enforcement  Notice:  shall  mean a  written  notice  which  states  that a
Significant  Term  Default  has  occurred  and that the Term  Lenders  desire to
commence an Enforcement Action as a consequence thereof.

     Equityholders Pledge Agreement: shall mean that certain Pledge Agreement of
even date  herewith  from the Quest  Pledgors  to the  Collateral  Agent for the
benefit of the Revolver Lenders and the Term Lenders,  securing, inter alia, the
Revolver Debt and the Term Debt.

     Event of  Default:  shall  mean any "Event of  Default,"  as defined in the
Revolving  Credit  Agreement,  and/or any "Default," as defined in the Term Loan
Agreement.

                                       5
<PAGE>

     Hedging   Obligations:   shall  mean,  with  respect  to  any  Person,  the
obligations of such Person with respect to Hedging Transactions.

     Hedging  Transaction:  shall mean any  transaction  (including an agreement
with respect thereto) now existing or hereafter  entered into by any one or more
of the Companies  which is a rate swap,  basis swap,  forward rate  transaction,
commodity swap, commodity option,  equity or equity index swap, equity or equity
index option, bond option,  interest rate option,  forward exchange transaction,
cap transaction,  floor transaction,  collar transaction,  forward  transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar  transaction  (including  any option with respect to any of
these  transactions) or any combination  thereof,  whether linked to one or more
interest rates,  foreign  currencies,  commodity prices,  equity prices or other
financial measures.

     Lenders:  shall mean the Revolver  Lenders and the Term Lenders,  and their
respective successors and assignees.

     Letters of Credit:  shall  mean  letters of credit (as  defined in the UCC)
issued under the Revolving Credit Agreement.

     Lien: shall mean any mortgage, pledge, hypothecation,  assignment,  deposit
arrangement,  encumbrance, lien (statutory or other), or preference, priority or
other  security  agreement  or  preferential  arrangement  of any kind or nature
whatsoever  (including any conditional sale or other title retention  agreement,
any capital lease having  substantially  the same economic  effect as any of the
foregoing, and the filing of any financing statement under the UCC or comparable
law of any jurisdiction in respect of any of the foregoing) .

     Master Debt: shall mean, collectively, the Revolver Debt and the Term Debt.

     Master Debt  Agreements:  shall mean the Revolving Credit Agreement and the
Term Loan Agreement.

     Master  Debt  Documents:  shall mean the  Revolver  Documents  and the Term
Documents.

     Master Debt  Outstanding:  shall mean,  at any date of  determination,  the
total  outstanding  amount of all Master  Debt;  provided,  however,  that,  for
purposes of  determining  the amount of all Revolver  Hedging  Obligations as of
such date,  Master Debt  Outstanding  shall only  include the  Revolver  Hedging
Liabilities.

     Master Debt Guaranty:  shall mean,  individually and collectively,  (a) the
Bluestem  Guaranty,  and (b) each  other and  additional  guarantee  at any time
executed  by any Person for the  benefit of the Lenders (or any of them) for the
purpose of  guaranteeing  the payment of the Master Debt and the  performance by
the  Borrower  of (i) the  "Obligations,"  as  defined in the  Revolving  Credit
Agreement, and (ii) the "Obligations," as defined in the Term Loan Agreement.

     Moody's: shall mean Moody's Investors Services, Inc.

                                       6
<PAGE>

     Notice of Event of Default: shall mean a written certification delivered in
accordance  with Section 4.2(b) hereof  certifying  that an Event of Default has
occurred and is continuing.

     Paid in Full:  shall mean,  with respect to the Revolver  Debt,  payment in
full in cash of such Revolver Debt and the termination of all commitments of the
Revolver  Lenders to lend or otherwise  extend  credit  pursuant to the Revolver
Documents.

     Permitted  Investment:  shall mean investments in (a) direct obligations of
the United  States,  or any Person for which  investments  are guaranteed by the
full faith and credit of the United  States,  maturing in twelve  months or less
from the date of acquisition thereof,  including  repurchase  agreements entered
into with banks or trust  companies  described in clause (c) below having a term
of less  than  one  year  and  fully  collateralized  by such  obligations;  (b)
commercial paper and bankers' acceptances maturing in twelve months or less from
the date of issuance  and which,  at the time of  acquisition,  are rated A-2 or
better by S&P and P-2 or better by Moody's; (c) time deposits or certificates of
deposit  maturing  within  one year  from the date such  investment  is made and
issued by a bank or trust company or any branch of any Lender, which bank, trust
company or branch is organized  under the laws of the United States or any state
thereof,  having capital,  surplus,  and undivided profits  aggregating at least
$250,000,000  and whose  long-term  certificates  of deposit are, at the time of
acquisition  thereof,  rated A-2 by S&P or P2 by Moody's; and (d) investments in
money market funds which invest solely in the types of investments  described in
paragraphs (a) through (c) above.

     Person:  shall mean a  corporation,  business  trust,  joint stock company,
trust,  joint venture,  association,  partnership,  limited  liability  company,
organization, business, individual, government or political subdivision thereof,
governmental agency, or other entity of whatever nature.

     Potential Default: shall mean any event which with notice or lapse of time,
or both, would become an Event of Default.

     Proceeding:  shall  mean  any  voluntary  or  involuntary  (a)  insolvency,
bankruptcy,   receivership,    custodianship,    liquidation,    reorganization,
readjustment,  composition  or any  other  similar  proceeding  relating  to the
Borrower or any of its properties, whether under any bankruptcy,  reorganization
or  insolvency  law or laws,  federal  or state,  or any law,  federal or state,
relating to relief of debtors,  readjustment  of  indebtedness,  reorganization,
composition  or  extension,  (b)  proceeding  for any  liquidation,  liquidating
distribution,  dissolution or other winding up of the Borrower or appointment of
a custodian,  receiver, trustee or other officer with similar powers, whether or
not involving insolvency or bankruptcy  proceedings,  (c) general assignment for
the benefit of creditors of the Borrower or (d) other  marshaling  of the assets
of the Borrower.

     Proceeds:  shall  mean all  "proceeds"  as such term is  defined in Section
9-102 of the UCC and all present and future proceeds of any Collateral,  whether
arising from the collection,  sale, lease, exchange,  assignment,  licensing, or
other disposition of or other  realization upon any Collateral,  the proceeds of
any casualty or condemnation of any Collateral  (including  proceeds of property
insurance and condemnation awards), all claims of the Borrower or any of its

                                       7
<PAGE>

Subsidiaries  against third parties for impairment,  loss, damage, or impairment
of the value of any  Collateral,  and all rights of the  Borrower  or any of its
Subsidiaries under any insurance, indemnity, warranty, or guaranty of or for any
of the  foregoing,  whether such  proceeds  are  represented  as money,  deposit
accounts,  accounts, general intangibles,  securities,  instruments,  documents,
chattel paper,  inventory,  equipment,  fixtures,  goods, or otherwise,  and all
proceeds of such proceeds.

     Quest Pledgors:  shall have the meaning  assigned to such term in the first
paragraph of this  Agreement,  and shall include the  respective  successors and
permitted  assigns  of  each of the  entities  identified  as such in the  first
paragraph  of this  Agreement;  Quest  Pledgor  shall  mean any one of the Quest
Pledgors.

     Refinancing:  shall mean any  renewal or  extension  of any Class of Master
Debt and any refinancing, replacement or substitution in whole or in part of the
Master  Debt of any Class of Master  Debt,  including  any number of  subsequent
refinancings, replacements or substitutions of any prior Refinancings.

     Refinancing  Lender:  shall mean any Person which provides a Refinancing to
the Borrower.

     Reimbursement  Obligations:  shall mean,  at any time,  that portion of the
Revolver  Debt  attributable  to the  obligations  of  the  Borrower  under  the
Revolving  Credit Agreement in respect of the Letters of Credit then outstanding
under the Revolving Credit  Agreement to reimburse  amounts paid by any Revolver
Lender (whether in such capacity or in its capacity as "Letter of Credit Issuer"
under the  Revolving  Credit  Agreement)  in respect of any  drawing or drawings
under a Letter of Credit.

     Release  Consent:  shall mean, in  connection  with any Release  Notice,  a
written  consent or  consents,  executed by the  Revolver  Agent and by the Term
Agent,  expressly  consenting to the release of the specific items of Collateral
specified in such  Release  Notice from the Liens held by the  Collateral  Agent
pursuant to the Security  Documents,  in form and substance  satisfactory to the
Collateral Agent in its sole discretion.

     Release  Notice:  shall  mean a written  notice,  signed  by a  Responsible
Officer of the  Borrower,  which  requests the release of the specific  items of
Collateral  specified in such notice from the Liens held by the Collateral Agent
pursuant to the Security Documents,  and which certifies to the Collateral Agent
that such  Collateral is properly  permitted to be disposed of by a Company in a
transaction contemplated and permitted under each Master Debt Agreement and that
the  Borrower  and/or such  Company,  as the case may be, is entitled  under the
terms of the Master Debt  Agreements to have such  specific  items of Collateral
released from such Liens in connection with consummation of such transaction.

     Required Majority:  shall mean the Required  Percentage of each (or, if the
context requires, any) Class of Master Debt then outstanding.

                                       8
<PAGE>

     Required  Percentage:  shall mean, with respect to any Class of Master Debt
and with respect to any  determination in question,  the percentage or number of
the  holder or  holders  of such  Class of  Master  Debt  required  to make such
determination  under the terms of the Master  Debt  Agreement  under  which such
Class  of  Master  Debt  was  issued;  provided,  however,  that  (a) if no such
percentage or number is specified under the terms of such Master Debt Agreement,
then,  (i) if there be more than two such  holders,  the holder or holders of at
least sixty-six and two-thirds  percent (66 2/3%) of the Master Debt Outstanding
with respect to such Class of Master  Debt,  or (ii) if there be less than three
such holders,  all such holders of the Master Debt  Outstanding  with respect to
such Class of Master Debt, and (b) Hedging  Obligations shall not be included in
the determination of such percentage for any purpose.

     Responsible  Officer:  shall mean the chief executive  officer,  president,
executive vice president,  chief financial officer,  treasurer,  or secretary of
the Borrower.

     Restricted Subsidiary:  shall have the meaning assigned to such term in the
Revolving Credit Agreement.

     Revolver  Agent:  shall mean the Person at the time in question  serving in
the capacity of  "Administrative  Agent" under the Revolving  Credit  Agreement,
and, from and after any Refinancing of the Revolver Debt, any agent,  trustee or
other representative of the Refinancing Lenders effecting such Refinancing,  or,
in the event there is no Person serving in any such capacity,  such  Refinancing
Lenders.

     Revolver Debt:  shall mean the  "Obligations,"  as defined in the Revolving
Credit Agreement, and all principal indebtedness for loans now or hereafter made
under any credit  agreement for a Refinancing  of such Revolver Debt  (provided,
however, that, although there can be Refinancings of Revolver Debt and successor
credit  agreements  for  such  Refinancings,  there  must  be  only  one  credit
agreement,  loan  agreement  or  indenture  in  effect  at any one  time for the
principal indebtedness included within the Revolver Debt) .

     Revolver Documents: shall mean the Revolving Credit Agreement, the Revolver
Notes,  the  Security  Documents,  the  Master  Debt  Guaranty,  and  all  other
agreements,  documents and instruments  executed from time to time in connection
therewith,  as the same may be amended,  supplemented or otherwise modified from
time to time.

     Revolver Hedging Liabilities:  shall mean, as of any date of determination,
the sum of, if greater  than zero,  (i) with  respect to each  Revolver  Hedging
Obligation  that is terminated and  unsatisfied as of such date, (A) zero or (B)
the actual  liability  of  Borrower  and its  Subsidiaries  as of such date as a
result of the early termination of such Revolver Hedging Obligation whichever is
greater,  minus  (ii) the  actual  liability,  if any,  of any  Revolver  Lender
Counterparty to the Borrower and its  Subsidiaries  with respect to any Revolver
Hedging Obligations that are terminated and unsatisfied as of such date.

     Revolver Hedging Obligation:  shall mean any Hedging Obligation owed by any
Company to any Revolver ----------------------------- Lender Counterparty.

                                       9
<PAGE>

     Revolver  Lender  Counterparty:  shall  mean  each  Revolver  Lender or any
Affiliate of a Revolver Lender counterparty to a Hedging Transaction.

     Revolver Lenders: shall have the meaning assigned to such term in the first
paragraph of this  Agreement,  and shall  include (a) each Person at the time in
question party as a "Bank" under the Revolving  Credit  Agreement,  and (b) each
Refinancing Lender with respect to a Refinancing of the Revolver Debt.

     Revolver Notes:  shall mean those certain  promissory notes issued pursuant
to the  Revolving  Credit  Agreement,  as  amended,  modified,  supplemented  or
restated from time to time in accordance with this Agreement.

     Revolving Credit Agreement: shall have the meaning assigned to such term in
the first recital of this  Agreement,  and shall  include any credit  agreement,
loan  agreement or indenture  setting forth the terms of any  Refinancing of the
Revolver Debt (provided,  however,  that,  although there can be Refinancings of
Revolver Debt and successor credit agreements for such Refinancings,  there must
be only one credit  agreement,  loan agreement or indenture in effect at any one
time for the principal indebtedness included within the Revolver Debt) .

     Secured  Obligations:  shall mean (a) all Master Debt,  and (b) all amounts
payable by any Company to the Collateral Agent under the Security Documents.

     Security  Documents:  shall  mean  this  Agreement  and all deeds of trust,
mortgages,  security  agreements,   pledge  agreements,   financing  statements,
pledges,  documents, and other instruments listed on Schedule 1 attached hereto,
and  all  future  deeds  of  trust,  mortgages,   security  agreements,   pledge
agreements, financing statements, pledges, documents, and other instruments made
by any  Company in favor of the  Collateral  Agent for the  purposes of granting
Liens on property  included or to be included in the Collateral Estate to secure
the  payment  and  performance  of the  Master  Debt,  in each case as  amended,
modified, supplemented or restated from time to time.

     Significant  Term  Default:  shall mean any Term Default (a) arising  under
Section 8.2 of the Term Loan  Agreement or (b) arising  under Section 8.3 of the
Term Loan Agreement by reason of the  Borrower's  failure to comply with Section
7.22 of the Term Loan  Agreement,  in each case as Sections 7.22, 8.2 and 8.3 of
the Term Loan Agreement are in effect on the Effective Date,

     Stated Maturity Date: shall mean December ___, 2008.

     Subsidiary:  shall mean,  with respect to any specified  Person,  any other
Person of which, at the time of determination,  such specified Person,  directly
and/or indirectly  through one or more other Persons,  owns more than 50% of the
voting interests.  Unless otherwise qualified,  all references to a "Subsidiary"
or  to  "Subsidiaries"  in  this  Agreement  shall  refer  to  a  Subsidiary  or
Subsidiaries of the Borrower.

                                       10
<PAGE>

     S&P:  shall mean  Standard & Poor's  Ratings  Services,  a division  of the
McGraw Hill Companies, Inc.

     Term Agent:  shall mean the Person at the time in  question  serving in the
capacity  of  "Agent"  under the Term Loan  Agreement,  and,  from and after any
Refinancing of the Term Debt, any agent,  trustee or other representative of the
Refinancing  Lenders  effecting such  Refinancing,  or, in the event there is no
Person serving in any such capacity, such Refinancing Lenders.

     Term  Debt:  shall  mean the  "Obligations,"  as  defined  in the Term Loan
Agreement,  and all principal indebtedness for loans now or hereafter made under
any credit  agreement for a Refinancing  of such Term Debt  (provided,  however,
that,  although  there can be  Refinancings  of Term Debt and  successor  credit
agreements for such Refinancings,  there must be only one credit agreement, loan
agreement or indenture in effect at any one time for the principal  indebtedness
included within the Term Debt) .

     Term  Default:  shall  mean  a  "Default,"  as  defined  in the  Term  Loan
Agreement.

     Term Documents: shall mean, collectively, the Term Loan Agreement, the Term
Notes,  if any,  the  Security  Documents,  the Master  Debt  Guaranty,  and all
instruments,  documents,  certificates contemplated by or executed in connection
with any of them.

     Term  Lenders:  shall have the  meaning  assigned to such term in the first
paragraph of this  Agreement,  and shall  include (a) each Person at the time in
question  party as a  "Lender"  under  the  Term  Loan  Agreement,  and (b) each
Refinancing Lender with respect to a Refinancing of the Term Debt.

     Term Loan  Agreement:  shall have the meaning  assigned to such term in the
second recital of this Agreement,  and shall include any credit agreement,  loan
agreement or indenture  setting forth the terms of any  Refinancing  of the Term
Debt (provided,  however,  that, although there can be Refinancings of Term Debt
and successor credit  agreements for such  Refinancings,  there must be only one
credit agreement,  loan agreement or indenture in effect at any one time for the
principal indebtedness included within the Term Debt) .

     Term Notes:  shall mean those  certain  promissory  notes,  if any,  issued
pursuant to the Term Loan  Agreement,  as  amended,  modified,  supplemented  or
restated from time to time in accordance with this Agreement.

     UCC: shall mean the Uniform  Commercial Code as in effect from time to time
in the  State of Texas;  provided,  however,  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 the State of Texas,  "UCC"  shall mean 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.

                                       11
<PAGE>

     Withdrawal  Notice:  shall have the  meaning  specified  in Section  4.2(c)
hereof.

     ARTICLE 2. COLLATERAL AGENCY

     2.1 Creation of  Collateral  Agency.  In order to provide for the creation,
perfection and maintenance of all Liens granted under Security Documents and for
the  enforcement  of the various  rights and  remedies set forth in the Security
Documents,  and to set forth the  relative  rights of the Lenders with regard to
the Collateral and the Bluestem Guaranty as set forth herein, the Lenders hereby
appoint  Bank One as the  Collateral  Agent under this  Agreement  and the other
Security  Documents,  and the Collateral  Agent hereby  accepts its  appointment
subject  to the  terms  and  conditions  of  this  Agreement  and  the  Security
Documents.  Each  Company  hereby  reaffirms  and  confirms  the  grant  of  the
Collateral  Estate in favor of the Collateral Agent in accordance with the terms
of the  Security  Documents  and for the  benefit  of the  Lenders  as set forth
therein and herein.

     2.2  Possession  and Use of  Collateral.  So long as no  Event  of  Default
exists,  each Company  shall have the right to remain in  possession  and retain
control of the Collateral  (other than any  Collateral for which  applicable law
requires that Liens on such Collateral be perfected by control or possession) in
accordance  with,  and to the extent  permitted by, the terms of the Master Debt
Agreements and the terms of the Security Documents.

     2.3 Addition of  Collateral  to the  Collateral  Estate.  At any time,  any
Company and the  Collateral  Agent may,  without  necessity  of consent from the
Revolver  Agent,  the Term Agent or any of the  Lenders,  enter into one or more
Security Documents, in form reasonably satisfactory to the Collateral Agent: (a)
to  supplement  or add to the  covenants  of such Company for the benefit of all
Lenders or to surrender any right or power conferred upon any one or more of the
Companies;  (b) to  mortgage  or  pledge  to the  Collateral  Agent,  or grant a
security interest in favor of the Collateral Agent in, any property or assets as
additional security for the Secured  Obligations;  or (c) to cure any ambiguity,
to correct or supplement any provision herein or in any Security  Document which
may be defective or inconsistent with any other provision herein or therein,  or
to make any other  provision  with  respect  to  matters  or  questions  arising
hereunder  which  shall  not be  inconsistent  with any  provision  hereof.  The
Collateral  Agent, the Revolver Agent, the Term Agent and the Lenders agree that
the forms of Security  Documents being executed and delivered  concurrently with
(and dated of even date with) this Agreement are  satisfactory  to such parties.
The Borrower  will deliver or cause to be  delivered  to the  Collateral  Agent,
promptly upon the execution and delivery thereof,  executed  counterparts of all
Security  Documents and all amendments and supplements  thereto.  The Collateral
Agent  shall keep all  Security  Documents  held by it at the  principal  office
maintained  by it in  Dallas,  Texas,  or, if none is there  maintained,  at its
primary  address for notice under this  Agreement,  shall provide copies of such
Security  Documents to the Lenders within a reasonable time after its receipt of
a written request therefor,  and permit any Lender or the representative thereof
to inspect the same at such office during normal  business hours upon reasonable
prior notice.

     2.4  Releases  of  Collateral.   In  connection  with  the  proposed  sale,
assignment,  transfer, or other disposition of any Collateral by any Company (an
"Asset Sale"), the Borrower, on behalf of such selling Company,  shall deliver a
Release Notice to the Collateral  Agent,  the Revolver Agent and the Term Agent.
If (a) the Collateral Agent receives a Release Consent relative to such Release

                                       12
<PAGE>

Notice within  fifteen (15)  Business  Days after,  the delivery of such Release
Notice,  or (b) within  fifteen  (15)  Business  Days after the delivery of such
Release Notice, the Collateral Agent shall not have received a written objection
from  either the  Revolver  Agent or the Term  Agent  stating  that the  selling
Borrower is not entitled  under the terms of the Revolving  Credit  Agreement or
the Term  Loan  Agreement,  as the case may be,  to obtain  the  release  of the
Collateral  specified  in  the  Release  Notice,  then,  in  either  event,  the
Collateral Agent shall provide for the release of the Liens with respect to such
Collateral  to the extent  requested  by the  Borrower  in the  Release  Notice,
provided,  however,  that the effective  delivery of any releases provided under
this Section 2.4 shall be expressly  conditioned  upon the  consummation  of the
Asset Sale to which the Release  Notice  relates.  If,  however,  the Collateral
Agent  receives a timely  written  objection from the Revolver Agent or the Term
Agent,  the  Collateral  Agent may not  release  the Liens with  respect to such
Collateral, and the Collateral Agent may not take any actions requested of it by
the Borrower until such objection  shall be withdrawn in writing by the Revolver
Agent or the Term  Agent,  as the case may be, or until five (5)  Business  Days
after the Collateral  Agent shall have received an order of a court of competent
jurisdiction, which shall be final and no longer subject to appeal, directing it
to release the Liens of the  Collateral  Agent with respect to such  Collateral;
provided,  however,  that,  notwithstanding the foregoing,  such selling Company
shall not be entitled to such release, and the Collateral Agent shall not effect
such release,  without the prior written consent of the Revolver Agent, the Term
Agent and the Required  Percentage of each Class of Master Debt then outstanding
if, at the time such  release  would  otherwise  be effected  by the  Collateral
Agent,  the  Collateral  Agent is in  receipt  of a Notice  of Event of  Default
(whether  given prior to or after the  delivery by the  Borrower or such selling
Company of the Release  Notice to which such  release is  related)  for which no
Withdrawal  Notice  withdrawing  the same has been  received  by the  Collateral
Agent.  Upon  consummation  of the Asset  Sale for  which a release  of Liens is
granted  hereunder,  (i) all cash  Proceeds  received by or owing to any Company
from the sale of such released  Collateral  shall be immediately  turned over to
the Collateral Agent, together with any necessary endorsements or instruments of
assignment or transfer,  for deposit in the Collateral  Account and distribution
in accordance  with the provisions of Section 4.4 hereof,  and (ii) all non-cash
Proceeds  received  by or owing to any  Company  from the sale of such  released
Collateral shall be immediately  pledged to the Collateral Agent for the benefit
of the Lenders pursuant to an appropriate  Security Document (and, to the extent
constituting instruments, securities or other property as to which perfection of
the Collateral Agent's Lien thereon is established by possession pursuant to the
UCC,  turned  over  to  the  Collateral  Agent,   together  with  any  necessary
endorsements or instruments of assignment or transfer) to be held as part of the
Collateral Estate hereunder as additional Collateral hereunder.  Notwithstanding
anything to the contrary contained herein,  during the existence of any Event of
Default or Borrowing  Base  Deficiency (in each case as defined in the Revolving
Credit  Agreement),  the Collateral Agent will (and the Term Agent and each Term
Lender hereby  irrevocably  authorizes the  Collateral  Agent to), to the extent
requested by the Revolver Agent,  release or otherwise terminate (pursuant to an
instrument  or  instruments  in form and  substance  acceptable  to the Revolver
Agent)  the  Liens  securing  the  Term  Debt  with  respect  to any  Collateral
encumbered  by such Liens to the extent  such  Collateral  is the  subject of an
Asset  Sale (to an  unaffiliated  third  party in good  faith in an arms  length
transaction  for cash  proceeds  in an amount  proposed  by  Revolver  Agent and
consented to by the Required Percentage of the Term Lenders, such consent not to
be  unreasonably  withheld or delayed) and the proceeds  thereof  applied to the
repayment of the Revolver  Debt.  Any covenant or other  restriction in the Term
Loan Agreement that is inconsistent with the provisions of the

                                       13
<PAGE>

preceding  sentence is hereby  waived to the extent of such  inconsistency  such
that the provisions of the preceding  sentence shall prevail in the event of any
conflict with the provisions of the Term Loan Agreement.  Subject to the receipt
of reasonable prior notice by the Collateral Agent, such releases,  terminations
and  other   instruments  and  agreements   shall  be  delivered   substantially
contemporaneous with such sale or disposition.

     2.5 Obligations Absolute.

          (a) No  Security  Document,  and no Master Debt  Guaranty,  may in any
event be  revoked  by any  Company.  Each  Company  agrees  that such  Company's
obligations  and  the  obligations  of such  Company's  Subsidiaries  under  the
Security  Documents  and  each  Master  Debt  Guaranty  shall  not be  released,
diminished,  or impaired  by, and waives,  to the fullest  extent  permitted  by
applicable  law, any rights which such Company might otherwise have which relate
to:

               (i) Any  lack of validity or enforceability of any of the Secured
     Obligations,  any Security Document, any Master Debt Guaranty, or any other
     agreement  or  instrument  relating  thereto;   any  increase,   reduction,
     extension,  or  rearrangement  of  any  of  the  Secured  Obligations;  any
     amendment,  supplement,  or  other  modification  of any  of  the  Security
     Documents  or any Master  Debt  Guaranty;  any  release,  waiver or consent
     granted under any of the Security Documents or any Master Debt Guaranty; or
     any sale, assignment,  delegation,  or other transfer of any of the Secured
     Obligations  and/or  any of the  Security  Documents  or  any  Master  Debt
     Guaranty;

               (ii) Any grant of any  security or support for any of the Secured

     Obligations  or any  impairment  of any  security or support for any of the
     Secured  Obligations,  including  any full or  partial  release,  exchange,
     subordination,   or  waste  of  any  collateral  for  any  of  the  Secured
     Obligations  or any full or  partial  release  of any  Company or any other
     Person  liable  for  the  payment  or  performance  of any  of the  Secured
     Obligations;  any change in the organization or structure of any Company or
     any other  Person  liable  for the  payment  or  performance  of any of the
     Secured  Obligations;  or  the  insolvency,  bankruptcy,   liquidation,  or
     dissolution  of any Company or any other  Person  liable for the payment or
     performance of any of the Secured Obligations;

               (iii)  The  manner of  applying  payments  on any of the  Secured
     Obligations  or the  proceeds  of any  security  or support  for any of the
     Secured Obligations against any of the Secured Obligations;

                    (iv) The failure to give notice of the  occurrence of any of
     the  events or  actions  referred  to in this  Section  2.5,  notice of any
     Potential Default or Event of Default,  notice of intent to demand,  notice
     of demand, notice of presentment for payment, notice of nonpayment,  notice
     of  intent  to  protest,  notice of  protest,  notice  of grace,  notice of
     dishonor, notice of intent to accelerate, notice of acceleration, notice of
     bringing  of action to enforce  the  payment or  performance  of any of the
     Secured  Obligations,  notice of any sale or  foreclosure of any collateral
     for any of the Secured  Obligations,  notice of any  transfer of any of the
     Secured Obligations, notice of the financial condition of or other

                                       14
<PAGE>

     circumstances  regarding  the  Borrower,  any other  Company,  or any other
     Person  liable for any of the Secured  Obligations,  or any other notice of
     any kind relating to any of the Secured Obligations; or

                    (v) Any other action taken or omitted  which  affects any of
     the  Secured  Obligations  or any of the  Collateral,  whether  or not such
     action or omission  prejudices any Company or increases the likelihood that
     any  Company  will be  required  to pay or support  payment of the  Secured
     Obligations  pursuant  to the  terms  hereof,  of any  of the  Master  Debt
     Guaranty, or of any of the Security Documents.

          (b) The  Master Debt Guaranty and each of the Security Documents shall
     continue to be  effective  or be  reinstated  if any payment on the Secured
     Obligations must be refunded for any reason, including as a result of or by
     reason of any Proceeding.  In the event that the Collateral Agent or any of
     the  Lenders  must  refund  any  payment   received   against  the  Secured
     Obligations,  any prior  release  from the terms of this  Agreement  or the
     other Security  Documents  given to any Company by the Collateral  Agent in
     connection with such payment shall be without effect, and all such Security
     Documents shall be reinstated in full force and effect as to the Collateral
     subject to such release.

                             ARTICLE 3. MASTER DEBT

          3.1 Modification of Master Debt.

               (a) The Borrower,  the Revolver Agent,  and the Revolver  Lenders
agree that without the prior written  consent of the Term Agent and the Required
Percentage of the Term Lenders they will not renew, extend,  modify or amend the
Revolving  Credit  Agreement or any of the instruments or documents  relating to
the  Revolver  Debt  to  (i)  increase  the  maximum  principal  amount  of  the
commitments  under  the  Revolving  Credit  Agreement  to an amount in excess of
$200,000,000,  or (ii)  increase  the  applicable  margin  with  respect  to the
interest  rate  on any of the  Revolver  Debt  by  more  than  2.00%  per  annum
(excluding  any increase  resulting  from the  imposition of any default rate of
interest in accordance with the terms of the Revolver Documents) .

               (b) The Borrower, the Term Agent, and the Term Lenders agree that
without  the prior  written  consent  of the  Revolver  Agent  and the  Required
Percentage of the Revolver Lenders they will not renew, extend,  modify or amend
the Term Loan Agreement or any of the  instruments or documents  relating to the
Term Debt to (i)  increase the maximum  principal  amount of the Term Debt to an
amount in excess of  $35,000,000 or the rate of interest on any of the Term Debt
(other  than as a result of the  imposition  of a default  rate of  interest  in
accordance with the terms of the Term  Documents),  (ii) change or add any event
of default or any convenant  with respect to the Term Debt if the effect of such
change or addition is to cause any one or more of the Term  Documents to be more
restrictive on any Company than such Term Documents were prior to such change or
addition, (iii) change the dates upon which payments of principal or interest on
the Term Debt are due, or (iv) change any redemption or prepayment provisions of
the Term Debt.  Furthermore,  the Lien  priorities  provided herein shall not be
altered  or  otherwise  affected  by any  amendment,  modification,  supplement,
extension,

                                       15
<PAGE>

renewal,  restatement, or refinancing of the Master Debt or any portion thereof,
nor by any action or inaction which the Collateral  Agent,  the Revolver  Agent,
the  Term  Agent  or any  Lender  may  take or fail  to take in  respect  of the
Collateral,  or  otherwise,  except for any release or  termination  executed by
Collateral Agent in accordance with the terms hereof.

                    ARTICLE 4. ACTIONS REGARDING COLLATERAL

     4.1  Preservation  and Maintenance of Collateral.  The Collateral Agent may
from time to time take action for the protection  and  enforcement of its rights
under the Security Documents on behalf of the Lenders,  but the Collateral Agent
shall not be obligated to take any action  under the Security  Documents  except
that (a) the Collateral  Agent shall perform such duties as are specifically set
forth herein  including  the taking of action  during an Event of Default as set
forth  in  Section  4.2  below  to the  extent  required  thereby,  and  (b) the
Collateral Agent shall take such action as may be reasonably requested from time
to time in writing pursuant to this Agreement as long as the requested action is
not prohibited by this Agreement or by any of the Security  Documents,  does not
conflict with  applicable law, and the Collateral  Agent is indemnified,  to its
satisfaction, by the Lenders.

     4.2 Enforcement Action under the Security Documents.

          (a) The Collateral  Agent shall be deemed not to have knowledge of the
existence of any condition or event which constitutes an Event of Default unless
notified in writing by the  Revolver  Agent,  the Term Agent,  or a Lender.  The
Collateral Agent shall not be under any obligation,  as a result of knowledge of
an Event of Default,  to take any action  under the  provisions  of any Security
Document unless so directed by the Revolver Agent, the Term Agent or the Lenders
in accordance with this Agreement.

          (b)  Subject to Section 6.2 with  respect to the Term Debt,  if at any
time an Event of  Default  exists,  the  Revolver  Agent,  the Term Agent or the
Required  Percentage  of any Class of Master  Debt shall be entitled to give the
Collateral  Agent and the Borrower a Notice of Event of Default  hereunder.  The
failure to give any Notice of Event of Default  hereunder shall in no way affect
the validity or effectiveness of any similar or subsequent  notice of default or
Event of Default provided to the Borrower or to any Company under the applicable
Master  Debt  Agreement,  nor shall the  failure of the  Borrower to receive any
Notice of Event of Default  hereunder  affect the validity of any request to the
Collateral  Agent or the ability of the Collateral  Agent to exercise the rights
and remedies  provided in the Security  Documents upon receipt of such Notice of
Event of Default.  The  Collateral  Agent shall provide  copies of any Notice of
Event of Default to the Revolver Agent,  the Term Agent,  Cherokee  Partners and
the Borrower  within five (5) Business Days from its receipt of any such notice,
but its failure to do so shall not affect the validity or  effectiveness  of any
such Notice of Event of Default.

          (c) The Revolver Agent,  the Term Agent or the Required  Percentage of
any Class of Master Debt may withdraw any Notice of Event of Default  previously
delivered by it pursuant to Section  4.2(b) above by delivering a written notice
of  withdrawal  (a  "Withdrawal  Notice")  to the  Collateral  Agent,  and  such
Withdrawal  Notice  shall be  effective  (subject to the  provisions  of Section
4.2(e) ) if delivered (i) before the Collateral Agent takes any action to

                                       16
<PAGE>

exercise  any remedy with respect to the  Collateral,  or (ii) at any time after
the Collateral Agent takes any action to exercise any remedy with respect to the
Collateral,  if (x) the Collateral Agent reasonably determines that the exercise
of any remedy or  remedies  with  respect  to the  Collateral  can be  reversed,
terminated,  or  withdrawn  without  prejudice  to the  Collateral  Agent or any
Lender,  and  (y)  the  Companies  have  reimbursed,  or  have  made  acceptable
arrangements to reimburse,  the Collateral  Agent,  the Revolver Agent, the Term
Agent and the Lenders  with  respect to all costs and  expenses  incurred by the
Collateral  Agent,  the  Revolver  Agent,  the Term  Agent  and the  Lenders  in
connection  with  the  enforcement  actions  and the  reversing  or  termination
thereof.  The Revolver Agent,  the Term Agent or the Required  Percentage of any
Class of Master Debt shall deliver a Withdrawal  Notice to the Collateral  Agent
with respect to any Notice of Event of Default previously delivered by it to the
Collateral  Agent promptly after, but only if, each Event of Default that is the
subject of in such Notice of Event of Default  has been waived it by  instrument
in writing delivered to the Borrower.  The Collateral Agent shall provide copies
of any  Withdrawal  Notice  to the  Revolver  Agent,  the Term  Agent,  Cherokee
Partners and the Borrower  within five (5) Business Days from its receipt of any
such  notice,  but its  failure  to do so  shall  not  affect  the  validity  or
effectiveness of any such Withdrawal Notice.

          (d) If a Notice of Event of Default  shall have been  received  by the
Collateral  Agent from the  Revolver  Agent or the  Required  Percentage  of the
Revolver  Debt at any time or from the Term Agent or the Required  Percentage of
the Term Debt after the expiration of the Collateral  Standstill Period and such
Notice of Event of Default shall not have been withdrawn in accordance  with the
provisions of Section  4.2(c) above,  the  Collateral  Agent shall exercise such
rights and  remedies  of the  Collateral  Agent  under the  Security  Documents,
institute and maintain such suits and  proceedings,  and take such other actions
in  connection  therewith as the Revolver  Agent may direct from time to time in
writing if such Notice of Event of Default was  delivered by the Revolver  Agent
or the Required Percentage of Revolver Debt, or the Term Agent if such Notice of
Event of Default was  delivered by the Term Agent or the Required  Percentage of
Term Debt, unless the Revolver Agent or the Required Percentage of Revolver Debt
have on or prior  to the end of any  Collateral  Standstill  Period  caused  the
Collateral  Agent to commence  foreclosure  or other remedies under the Security
Documents with respect to the Collateral and the Collateral  Agent is diligently
pursuing the same, in each case as permitted under the Security Documents during
the existence of an Event of Default.  Upon the  effectiveness of any Withdrawal
Notice  pursuant  to the terms and  provisions  of  Section  4.2(c)  above,  the
Collateral  Agent  shall  discontinue  and  terminate,  without  prejudice,  any
enforcement  action taken by the Collateral Agent with respect to such Notice of
Event of Default;  provided,  however, that any such Withdrawal Notice shall not
become  effective  if,  within  fifteen (15)  Business Days after receipt by the
Collateral  Agent of the  Withdrawal  Notice,  any party  entitled  to deliver a
separate Notice of Event of Default hereunder  objects to the  discontinuance or
termination of such enforcement action.

          (e) In the  event that  the Collateral Agent shall receive conflicting
instructions  from the Revolver Agent, the Term Agent, the Required  Majority of
any Class of Master Debt,  and/or from Required  Majorities of different Classes
of Master Debt,  regarding  the  specific  action to be taken or not to be taken
under the  Security  Documents,  or the manner or timing of the  exercise of any
rights or remedies thereunder, the Collateral Agent shall follow the

                                       17
<PAGE>

instructions  received in writing from the Revolver  Agent,  provided,  however,
that after the expiration of the Collateral  Standstill  Period and provided the
Revolver  Agent or the Required  Percentage  of Revolver  Lenders have not on or
prior  to the end of  such  period  caused  the  Collateral  Agent  to  commence
foreclosure or other  remedies under the Security  Documents with respect to the
Collateral  and the  Collateral  Agent is  diligently  pursuing  the  same,  the
Collateral Agent shall diligently pursue (in each case, to the extent reasonably
requested by the Term Agent or the Required Percentage of Term Lenders) the good
faith exercise of rights and remedies under the Security Documents or applicable
law with respect to the Collateral, including and if requested by the Term Agent
or the Required  Percentage  of Term  Lenders,  the  commencement  of actions to
foreclose the Collateral  Agent's Liens on, or to take possession of, all or any
material portion of the Collateral, the commencement of any judicial proceedings
or  actions  against  or with  respect  to all or any  material  portion  of the
Collateral, or the taking of any action to vacate any stay on enforcement of the
Collateral Agent's Liens on any of the Collateral.

          (f) Any sale or  disposition  of  Collateral by the  Collateral  Agent
pursuant to any power or in accordance  with any rights or remedies set forth in
the Security  Documents shall be in accordance with the provisions of applicable
law and, with respect to any such sale or disposition effected on the provisions
of the UCC applicable  thereto,  shall be effected in a commercially  reasonable
manner.

          (g) The Collateral  Agent shall not be obligated to follow any written
directions   received  pursuant  to  this  Agreement  if  the  Collateral  Agent
determines in good faith that such written  directions  are in conflict with any
provisions of applicable law or any Security Document.

          (h) In the event the occurrence of a fire or other casualty  resulting
in damage to all or any portion of any Collateral (collectively,  a "Casualty"),
(a) the Term Agent and the Term Lenders hereby waive any right to participate or
join in any adjustment, compromise, or settlement of any claims resulting from a
Casualty with respect to any Collateral;  and (b) all proceeds received or to be
received  on  account  of a  Casualty  shall be applied in the manner or manners
provided for in the Revolver Documents; and the Collateral Agent, the Term Agent
and the Term Lenders  agree to execute and deliver any  documents,  instruments,
agreements or further  assurances  reasonably  required to effectuate any of the
foregoing.

     4.3 General Provisions Regarding Remedies.

          (a) No remedy  conferred  upon or  reserved  to the  Collateral  Agent
herein or in the  Security  Documents  is intended to be  exclusive of any other
remedy or remedies,  but every such remedy shall be  cumulative  and shall be in
addition  to every  other  remedy  conferred  herein  or in any of the  Security
Documents or now or hereafter existing at law or in equity or by statute. All of
the powers,  remedies,  and rights of the Collateral  Agent as set forth in this
Agreement  may be exercised by the  Collateral  Agent in respect of any Security
Document as though set forth at length  therein,  and all the powers,  remedies,
and rights of the Collateral Agent as set forth in any Security  Document may be
exercised from time to time as herein and therein provided. No delay or omission
by the Collateral Agent in the exercise of any right,  remedy, or power accruing
upon any Event of Default shall impair any such right, remedy or power or shall

                                       18
<PAGE>

be  construed  to be a waiver of any such Event of  Default  or an  acquiescence
therein;  and every right,  power, and remedy given by any Security Document may
be  exercised  from time to time and as often as may be deemed  expedient by the
Collateral Agent.

          (b) In the event the  Collateral  Agent has  proceeded  to enforce any
right,  remedy,  or power under any Security Document and the proceeding for the
enforcement  thereof has been  discontinued  or  abandoned  for any reason or is
determined  adversely to the Collateral Agent, then and in every such case, each
Agreement Obligor,  the Collateral Agent, the Revolver Agent, the Term Agent and
each Lender shall, subject to any effect of or determination in such proceeding,
severally  and  respectively  be restored to their former  positions  and rights
under such Security  Document with respect to the  Collateral  Estate and in all
other respects, and thereafter all rights, remedies, and power of the Collateral
Agent shall continue as though no such proceeding was taken.

          (c) All rights of action and rights to assert claims upon or under the
Security  Documents  may  be  enforced  by  the  Collateral  Agent  without  the
possession of any Master Debt Agreement or other  instruments which manifest the
Master Debt or the production thereof in any trial or other proceeding  relative
thereto,  and any such suit or proceedings  instituted by the  Collateral  Agent
shall be brought in its name as Collateral  Agent for the benefit of the Lenders
and  any  recovery  of and  from  any  judgment  shall  be  held  as part of the
Collateral  Estate.  Each Agreement Obligor hereby waives, to the fullest extent
permitted by applicable law, notice of intent to demand, demand, presentment for
payment,  notice of nonpayment,  protest,  notice of protest,  grace,  notice of
dishonor, notice of intent to accelerate, notice of acceleration,  and all other
notices in  connection  with the  enforcement  of the Master Debt,  the Security
Documents, and the Collateral.  To the full extent each Agreement Obligor may do
so, no Agreement Obligor shall insist upon,  plead,  claim, or take advantage of
any  law  providing  for  any  appraisement,   valuation,  stay,  extension,  or
redemption,  and each Agreement Obligor hereby waives and releases the same, and
all rights to a  marshaling  of the  assets of such  Agreement  Obligor  and the
Collateral  or to a  sale  in  inverse  order  of  alienation  in the  event  of
foreclosure  of the Liens  granted  pursuant  to the  Security  Documents.  Each
Agreement Obligor agrees not to assert any right under any law pertaining to the
marshaling of assets, sale in inverse order of alienation, the administration of
estates of decedents,  or other matters whatsoever to defeat,  reduce, or affect
the right of the  Collateral  Agent or Lenders  under the terms of the  Security
Documents or applicable law.

          (d) Each Agreement Obligor hereby irrevocably constitutes and appoints
the  Collateral  Agent and any  officer  or agent  thereof,  with full  power of
substitution,  as its true and  lawful  attorney-in-fact  with  full  power  and
authority  to act on  behalf  of such  Agreement  Obligor,  in the  name of such
Agreement  Obligor  or in its own  name,  upon the  occurrence  and  during  the
continuance  of any Event of Default,  to take any and all  appropriate  action,
execute any and all documents  and  instruments,  or institute  any  proceedings
which the  Collateral  Agent,  the  Revolver  Agent,  the Term Agent  and/or the
Lenders deem  reasonably  necessary or desirable to carry out purposes and terms
of any of the Security Documents. This power of attorney is a power coupled with
an interest and shall be irrevocable. Each Agreement Obligor hereby ratifies all
acts  of  such  attorney-in-fact   consistent  with  the  foregoing.   Any  such
attorney-in-fact  shall  not be  liable  for any  acts or  omissions,  INCLUDING
NEGLIGENT ACTS AND

                                       19
<PAGE>

OMISSIONS OF SUCH ATTORNEY-IN-FACT,  unless they constitute the gross negligence
or  willful  misconduct  of such  attorney-in-fact,  but in no event  shall  the
attorney-in-fact  be liable for  special,  indirect or  consequential  losses or
damages of any kind whatsoever (including but not limited to lost profits) .

          (e) Notwithstanding any other provision of any Security Document,  and
except as  expressly  set forth in this  Agreement,  neither  the  rights of the
Revolver  Agent,  the Term Agent or any of the Lenders to receive payment on the
Master Debt held by holders  thereof,  to institute suit for the  enforcement of
such  payment,  to initiate or  participate  with others in any suit,  action or
proceeding  against  any  Company,  including  a  Proceeding,  to  assert  their
respective  positions  as a  creditor  or to  receive  any  distribution  in any
proceeding under or related to the Bankruptcy Code, or to otherwise exercise any
right they may have in connection with such Master Debt (other than the right to
enforce any Lien on the Collateral under the Security Documents,  which shall in
all  circumstances be exercisable only in accordance with this Agreement as long
as this Agreement  remains in effect),  nor the obligation of any Company to pay
the Master Debt owing by such Company, shall be impaired or affected without the
consent of the Revolver Agent,  the Term Agent or such Lenders,  as the case may
be.

     4.4 Application of Monies by Collateral Agent.

     (a) On the  date  hereof  there  shall be  established  and,  at all  times
thereafter  until the  Collateral  Estate has been  terminated,  there  shall be
maintained by the Collateral Agent a deposit account (the "Collateral  Account")
which shall be maintained  with the  Collateral  Agent at the  principal  office
maintained  by it in  Dallas,  Texas,  or, if none is there  maintained,  at its
primary  address  for  notice  under  this  Agreement.  To secure the prompt and
complete  payment,  when due, and the observance  and  performance of all terms,
covenants,  and agreements relating to all Secured  Obligations,  each Agreement
Obligor hereby  assigns and pledges to the  Collateral  Agent for the benefit of
the Lenders, and grants to the Collateral Agent for the benefit of the Lenders a
security  interest in, all of the right,  title,  and interest of such Agreement
Obligor  in  and  to the  following  property,  whether  presently  existing  or
hereafter  arising or  acquired  (the  "Collateral  Account  Collateral")  : the
Collateral   Account,   all  cash  deposited   therein,   all  certificates  and
instruments,  if any, from time to time representing the Collateral Account; all
investments  from time to time made pursuant to Section 4.4(b) below; all notes,
certificates  of  deposit,  and other  instruments  from time to time  hereafter
delivered to or otherwise possessed by the Collateral Agent in substitution for,
or in  addition  to,  any  or  all  of  the  then  existing  Collateral  Account
Collateral; all interest,  dividends, cash, instruments, and other property from
time to time received,  receivable, or otherwise distributed in respect of or in
exchange for any or all of the then existing Collateral Account Collateral;  and
to the extent not covered above, all Proceeds of the foregoing (whether the same
are acquired  before or after the  commencement  of a case under the  Bankruptcy
Code) . All right,  title,  and interest in and to the Collateral  Account shall
vest in the Collateral Agent, and funds on deposit in the Collateral Account and
other  Collateral  Account  Collateral  shall  constitute part of the Collateral
Estate.  The  Collateral  Account  Collateral  and  Collateral  Account shall be
subject to the exclusive  dominion and control of the Collateral Agent and shall
be held for the benefit of the Lenders as their respective interests appear.

                                       20
<PAGE>

          (b) All money and other Proceeds  received by the Collateral  Agent in
respect of any Collateral, including (i) Proceeds derived from Asset Sales, (ii)
Proceeds derived from the exercise of any right or remedy with respect to any of
the  Collateral  conferred  upon the  Collateral  Agent  under  the terms of any
Security  Document or otherwise  available to the Collateral  Agent at law or in
equity,  (iii)  Proceeds  derived from any assignment of production and from any
assignment of rents,  (iv) insurance  proceeds and  condemnation  proceeds,  (v)
amounts received as a result of set off by the Collateral Agent,  collections of
accounts,  instruments,  chattel paper and other receivables, (vi) Proceeds from
public or private sale or other disposition of any Collateral in accordance with
the  terms  of any  applicable  Security  Document  or  otherwise  permitted  by
applicable  law,  (vii)  Proceeds of any  judicial or  non-judicial  foreclosure
proceedings (or conveyance in lieu thereof), and (viii) all amounts paid over to
the  Collateral  Agent  pursuant to Section  6.1(b),  shall be  deposited  in or
credited to the Collateral  Account.  Any Proceeds deemed not appropriate at the
time of receipt for deposit or credit to the Collateral Account shall be held by
the  Collateral  Agent for the  benefit of the  Lenders  until such time as cash
proceeds are  realized  therefrom or the  Collateral  Agent deems such  Proceeds
appropriate  for deposit or credit to the Collateral  Account.  All funds in the
Collateral  Account shall be invested,  reinvested,  and liquidated (at the risk
and expense of the  Companies)  in  accordance  with  instructions  given to the
Collateral  Agent by (i) the  Borrower,  prior to a Notice  of Event of  Default
having been received by the Collateral Agent, or (ii) the Revolver Agent and the
Term Agent  subsequent  to a Notice of Event of Default  having been received by
the Collateral Agent,  provided,  however, that if the Collateral Agent receives
conflicting  instructions  from  the  Revolver  Agent  and the Term  Agent,  the
Collateral Agent shall comply with the instructions of the Revolver Agent for so
long as any Revolver Debt remains outstanding, and provided further that, in all
circumstances,  all investments shall be Permitted  Investments.  The Collateral
Agent shall not be liable for any loss resulting  from any Permitted  Investment
or the sale or redemption thereof in accordance with the preceding sentence.  If
and when cash is required for  disbursement  in accordance  with this Agreement,
the Collateral Agent is authorized,  to the extent necessary, to cause Permitted
Investments to be sold or otherwise  liquidated in such manner as the Collateral
Agent shall deem appropriate.

          (c) Prior to any Notice of Event of Default  having  been  received by
the Collateral Agent, all amounts in the Collateral Account shall be held by the
Collateral Agent for the benefit of the Lenders until the Borrower  requests the
release  thereof.  Any such  request by the  Borrower  shall be made in writing,
delivered to the Collateral  Agent,  the Revolver Agent and the Term Agent,  and
shall be accompanied  by a certificate of a Responsible  Officer of the Borrower
specifying  (i) the use for the funds  released and stating that the funds shall
be used for the specified purpose,  (ii) that the release is permitted under the
terms of all Master Debt Agreements, (iii) that no Potential Default or Event of
Default then exists, and (iv) that the release, if granted, would not reasonably
be expected to cause or result in the occurrence of an Event of Default.  If the
Collateral  Agent does not receive an objection  from the Revolver  Agent or the
Term Agent  within  fifteen (15)  Business  Days after such request is delivered
stating that the release would  violate the terms of a Master Debt  Agreement or
result in an Event of Default, then the Collateral Agent shall release the funds
or other items of  Collateral  as requested by the  Borrower.  If,  however,  an
objection is received by the Collateral  Agent,  then the Collateral Agent shall
retain the funds or other property in the Collateral  Account until such time as
(i) the objection is withdrawn,  (ii) distributions are made under paragraph (d)
below, or (iii) the

                                       21
<PAGE>

Collateral  Agent  shall  have  received a final  order of a court of  competent
jurisdiction,  no longer subject to appeal, directing it to release the funds or
property.

          (d) After any Notice of Event of Default  having been  received by the
Collateral  Agent and such  notice not  having  been  withdrawn,  all moneys and
property  held or received by the  Collateral  Agent in the  Collateral  Account
shall be held in the Collateral Account for the benefit of the Lenders and, upon
request of the Revolver Agent prior to the Stated  Maturity Date, and thereafter
upon the request of the Revolver Agent, the Term Agent or any Required  Majority
of the  Term  Debt  and to the  extent  available  for  distribution,  shall  be
distributed  from time to time by the Collateral Agent in the following order of
priority:

     First:  to the  Collateral  Agent in an amount equal to all amounts due and
     unpaid to it as of such  Distribution  Date  pursuant  to  Section  5.3 and
     Section 5.4 and all other  amounts due and unpaid it under the terms of the
     Security Documents as of such Distribution  Date,  including all reasonable
     costs and  expenses  (including  reasonable  attorneys  fees)  incurred  in
     connection with any sale, disposition, or other attempt to realize upon all
     or any part of the Collateral (and to the extent any such amounts have been
     previously paid on behalf of the Companies  under Section 5.3,  Section 5.4
     or otherwise by other Persons to reimburse such Persons) ;

     Second: to the Revolver Agent for the benefit of the Revolver Lenders in an
     amount  equal to the full  amount of the  Revolver  Debt then  outstanding,
     whether or not due and payable; provided, however, that with respect to all
     cash  collateralization  obligations covering contingent  obligations under
     Letters of Credit that are included in the Revolver Debt then  outstanding,
     (1) rather than  distributing the amounts  allocable to such obligations to
     the holders  thereof,  such  amounts  shall be  reserved in the  Collateral
     Account (such reserve being an "L/C Reserve") and set aside for the purpose
     of covering  Reimbursement  Obligations  for such Letters of Credit as they
     arise in connection  with draws under such Letters of Credit,  (2) upon any
     draws under such Letters of Credit that are not reimbursed when due, and at
     the request of the issuers of such Letters of Credit,  the Collateral Agent
     shall  distribute  the ratable  share of the L/C Reserve  allocable to such
     Reimbursement  Obligations to the holders of Revolver Debt, and (3) as such
     contingent  obligations  expire,  the  Collateral  Agent shall  release and
     deposit the portion of the L/C Reserve  allocable to such obligations which
     have  expired  into the  Collateral  Account  for general  distribution  in
     accordance with this Agreement;

     Third: to the Term Agent for the benefit of Term Lenders in an amount equal
     to the full  amount of the Term Debt then  outstanding,  whether or not due
     and payable; and

     Fourth:  any surplus  then  remaining  shall be paid to the Borrower or its
     successors or assigns.

The term "unpaid" as used in this Section 4.4(d) refers: (1) in the absence of a
Proceeding  with  respect to any  Agreement  Obligor,  to all amounts of Secured
Obligations  outstanding as of  Distribution  Date,  whether or not then due and
payable,  and (2)  during  the  pendency  of a  Proceeding  with  respect to any
Agreement Obligor, to all amounts with respect to such

                                       22
<PAGE>

Agreement  Obligor  allowed  by the  bankruptcy  court  in  respect  of  Secured
Obligations as a basis for distribution  (including  estimated amounts,  if any,
allowed in respect of contingent claims), in each case, to the extent that prior
distributions have not been made in respect thereof.

          (e)  Notwithstanding  anything herein to the contrary,  the Collateral
Agent shall,  at all times,  have the right to apply funds and property  held in
the  Collateral  Account to the payment of amounts due and unpaid to it pursuant
to Section 5.3 below. Unless otherwise waived by the Revolver Agent and the Term
Agent, the Collateral  Agent shall provide the Borrower,  the Revolver Agent and
the Term Agent with fifteen (15) Business Days prior written  notice of any such
application  of moneys or  property.  Further,  notwithstanding  anything to the
contrary contained herein,  the Collateral Agent,  shall, at all times following
the  occurrence  and during the  continuance  of any Event of Default,  have the
right to distribute Proceeds from an Asset Sale, net of the reasonable costs and
expenses  incurred by the Collateral  Agent in connection with such  disposition
(including  reasonable  attorneys'  fees),  and  all  amounts  paid  over to the
Collateral  Agent pursuant to Section  6.1(b) below,  to the Lenders in the same
manner and to the same extent as provided in Section 4.4(d) above.

          (f) In  making  amounts  available  for  distribution  hereunder,  the
Collateral Agent may liquidate  investments prior to maturity in order to make a
distribution,  and any resultant  loss shall be for the sole account and risk of
the Companies. All such distributions shall be made in cash in Dollars.

          (g)  Each  Agreement   Obligor  hereby   authorizes  and  directs  the

Collateral Agent to comply, and the Collateral Agent agrees to comply,  with the
terms of this  Agreement  regarding,  and with  instructions  originated  by the
Lenders (or by the Revolver Agent and/or the Term Agent) in accordance with this
Agreement  directing,  the  disposition  of  funds  from  time  to  time  in the
Collateral Account or as to any other matters relating to the Collateral Account
or any of the  Collateral  Account  Collateral  without  further  consent by any
Agreement Obligor, but subject to the terms of this Agreement

                        ARTICLE 5. THE COLLATERAL AGENT

     5.1 Acceptance of Collateral Estate; Duties and Limitations. The Collateral
Agent  hereby  accepts  the  trusts of this  Agreement  on behalf of and for the
benefit of all Lenders, but only upon the terms set forth herein,  including the
following:

          (a) Except as otherwise  expressly  provided herein or in the Security

Documents,   the   Collateral   Agent  makes  no   representation   and  has  no
responsibility as to the validity of the Security Documents,  the sufficiency or
value of the  Collateral,  the title to the  Collateral,  or verification of the
sufficiency or continuation of any insurance in respect thereof;

          (b) the  Collateral  Agent may rely and shall be  protected  in acting
upon any resolution, certificate, opinion, consent, or other document reasonably
believed  by it to be genuine  and to have been  executed  or  presented  by the
proper party or parties and, without  limiting the foregoing,  (i) in making any
payment or in taking any other  action  hereunder in respect of any Master Debt,
the Collateral Agent may rely upon a certificate signed by the Term

                                       23
<PAGE>

Agent or the Revolver Agent,  as  appropriate,  with respect to the ownership of
each such Class of Master Debt and the amounts due thereunder, and (ii) whenever
in the  administration  of its duties  hereunder,  the Collateral Agent deems it
reasonably  necessary for a matter to be proved or  established  prior to taking
any action hereunder, the Collateral Agent may request a certification from such
party or parties regarding such matter as it deems appropriate in its reasonable
discretion  and upon which the  Collateral  Agent shall be protected in relying;
and

          (c) the  Collateral  Agent shall be under no liability with respect to
any action or omission taken in accordance  with this Agreement or for any other
action or omission  of the  Collateral  Agent,  INCLUDING  NEGLIGENT  ACTIONS OR
OMISSIONS OF THE COLLATERAL  AGENT (except that nothing  contained  herein shall
relieve the  Collateral  Agent from  liability  for its own gross  negligence or
willful  misconduct),  and in no event shall the Collateral  Agent be liable for
special,  indirect,  or  consequential  losses or damages of any kind whatsoever
(including but not limited to lost profits) .

     5.2  Limitation  of Scope of  Duties.  Beyond  its duties set forth in this
Agreement  and the  other  Security  Documents  as to the  perfection  of  Liens
against,  and the  custody and  preservation  of  Collateral,  which are for the
benefit of the Lenders, and the accounting to the Borrower,  the Revolver Agent,
the Term Agent and the Lenders for moneys received and moneys  distributed by it
hereunder and  thereunder,  the Collateral  Agent shall not have any duty to any
Agreement  Obligor,  the  Revolver  Agent,  the Term Agent or the  Lenders  with
respect to any  Collateral in its  possession or control or in the possession or
control of its agent or nominee,  any income  thereon,  or the  preservation  of
rights against prior parties or any other rights pertaining thereto,  other than
the duty to manage  such funds and such  Collateral  in the same manner it would
manage its own assets.

     5.3  Expenses.  Each Company and each Lender agrees to pay on demand of the
Collateral  Agent (a) all  reasonable  out-of-pocket  costs and  expenses of the
Collateral  Agent in  connection  with  the  preparation,  execution,  delivery,
administration,  modification,  and amendment of this Agreement and the Security
Documents, including the reasonable fees and expenses of outside counsel for the
Collateral  Agent,  (b) all reasonable  out-of-pocket  costs and expenses of the
Collateral  Agent in  connection  with any  Release  Notice,  whether or not any
release of  Collateral  is  effected  in  connection  therewith,  including  the
reasonable  fees and expenses of outside counsel for the Collateral  Agent,  and
(c) all  out-of-pocket  costs and expenses of the Collateral Agent in connection
with the  preservation  or enforcement  of rights under the Security  Documents,
whether through negotiations,  legal proceedings,  or otherwise,  including fees
and expenses of counsel for the  Collateral  Agent.  Each Lender shall be liable
for the foregoing  only to the extent (i) that such expenses are not paid by the
Companies,  (ii)  that  such  expenses  are not paid or  recoverable  out of the
Collateral,  (iii) that such expenses relate to actions of the Collateral  Agent
acting as  Collateral  Agent,  and (iv) of such  Lender's  ratable share of such
expenses based upon the Master Debt Outstanding.  The provisions of this Section
5.3 shall  survive the  repayment of the Secured  Obligations  and any purported
termination  of the Security  Documents  which does not expressly  refer to this
paragraph.

     5.4 Indemnification.

                                       24
<PAGE>

          (a) Each  Company and each  Lender,  on behalf of  themselves  and all
Persons claiming by, through,  or under any of them, agrees to protect,  defend,
indemnify,  and  hold  harmless  the  Collateral  Agent,  and its  shareholders,
directors,  officers, employees, agents,  representatives and affiliates and the
shareholders,  directors,  officers,  employees,  agents, and representatives of
those affiliates (collectively, the "Indemnified Parties"), from and against all
demands,   claims,  actions,  suits,  damages,   judgments,   fines,  penalties,
liabilities, and out-of-pocket costs and expenses, including reasonable costs of
attorneys and related costs of experts such as  accountants  (collectively,  the
"Indemnified Liabilities"), actually incurred by any Indemnified Party which are
related to any  litigation or proceeding  relating to the Security  Documents or
the  transactions  contemplated  thereunder or hereunder in connection  with the
Collateral  Agent  acting in its capacity as  Collateral  Agent,  INCLUDING  ANY
INDEMNIFIED LIABILITIES CAUSED BY ANY INDEMNIFIED PARTY'S OWN NEGLIGENCE AND ANY
INDEMNIFIED  LIABILITIES  IMPOSED UPON THE  INDEMNIFIED  PARTY,  OR ANY OF THEM,
UNDER ANY THEORY OF STRICT LIABILITY,  but not Indemnified Liabilities which are
a result of any Indemnified Party's gross negligence or willful misconduct. Each
Lender  shall be liable for the  foregoing  only to the extent (i) that any such
Indemnified Liability is not paid by the Companies,  (ii) that such expenses are
not paid or  recoverable  out of the  Collateral,  (iii)  that such  Indemnified
Liability  relates to the actions of the  Collateral  Agent acting as Collateral
Agent,  and (iv) of such Lender's  ratable share of such  Indemnified  Liability
based upon the Master Debt  Outstanding.  The provisions of this paragraph shall
survive the repayment of the Secured Obligations,  the resignation or removal of
the Collateral Agent and any purported termination of the Security Documents. In
no  event,   however,   shall   Indemnified   Liabilities   include  special  or
consequential  losses  or  damages  of any kind  whatsoever  (including  but not
limited to, lost profits) .

     5.5 Resignation, Removal, and Replacement of Collateral Agent.

          (a) The Collateral Agent or any successor  Collateral Agent may resign
at any time by  giving  at least  thirty  (30)  days'  prior  written  notice of
resignation to the Borrower, the Revolver Agent, the Term Agent and each Lender,
such  resignation to be effective on the later of (a) the date specified in such
notice or (b) the date on which a successor  agrees to act as  Collateral  Agent
hereunder  and under the  Security  Documents.  If  appropriate  instruments  of
assignment to and acceptance by a successor Collateral Agent shall not have been
executed and  delivered  within thirty (30) days after the giving of such notice
of  resignation,  the  resigning  Collateral  Agent  may  petition  any court of
competent jurisdiction for the appointment of a successor Collateral Agent.

          (b) The Required Majority may at any time remove the Collateral Agent,
for or without cause,  by an instrument or  instruments in writing  delivered to
the Collateral Agent and the Borrower, and in the event the office of Collateral
Agent shall become  vacant for any reason,  the Required  Majority may appoint a
successor  Collateral Agent to fill such vacancy if a successor Collateral Agent
has agreed to accept such position. Upon removal of any Person from the position
of "Collateral  Agent", such removal shall become effective on the date on which
a successor  agrees to act as Collateral  Agent hereunder and under the Security
Documents.

                                       25
<PAGE>

          (c) Upon the  appointment  of any  successor  Collateral  Agent,  such
successor  Collateral  Agent  shall  execute,  acknowledge,  and  deliver to the
Borrower and to the retiring or removed Collateral Agent an instrument accepting
such  appointment,  and the  retiring  Collateral  Agent,  at the expense of the
Borrower,  shall duly assign, transfer, and deliver to such successor Collateral
Agent all rights,  instruments  and moneys or other  Collateral  (including  any
funds or Collateral Account Collateral then held in the Collateral Account) then
held by the retiring  Collateral  Agent as Collateral  Agent hereunder and under
the  Security  Documents,  and shall  execute  and  deliver  such  other  proper
instruments  in  such  form as may be  reasonably  requested  by such  successor
Collateral Agent to evidence such assignment,  transfer, and delivery.  Upon the
execution,  acknowledgment  and delivery of all such instruments,  the successor
Collateral Agent shall immediately, and without the need for any further action,
succeed to all of the rights and  obligations of the retiring  Collateral  Agent
under this Agreement and the Security Documents as if originally named therein.

     5.6 Eligibility of Collateral Agent. The Collateral Agent may be either the
Revolver Agent, the Term Agent or a Lender, provided,  however, that such Person
is willing  and able to accept  such  appointment  upon terms  substantially  in
accord with those of this  Agreement.  In all other cases the  Collateral  Agent
shall be a financial  institution with assets in excess of $250,000,000.  If, at
any time, the Collateral Agent shall cease to be eligible in accordance with the
provisions of this Section 5.6, the Collateral  Agent shall  promptly  resign in
the manner and with the effect specified in Section 5.5.

     5.7 Appointment of Separate or  Co-Collateral  Agent.  The Collateral Agent
may, and, upon the request of any Required Majority,  shall, by an instrument in
writing  delivered to the  Borrower and to each Lender,  appoint a bank or trust
company or an individual to act as separate  collateral  agent or  co-collateral
agent  with  respect  to all or any  portion  of the  Collateral  (or all or any
portion of the Master  Debt) in a  jurisdiction  where the  Collateral  Agent is
disqualified from acting.  Such separate collateral agent or co-collateral agent
shall  exercise  only such  rights and shall  have only such  duties as shall be
specified  in  the  instrument  of  appointment.  The  Companies  will  pay  the
reasonable  compensation  and expenses of any such separate  collateral agent or
co-collateral  agent  and  indemnify  such  person  as if  such  Person  was the
Collateral Agent hereunder.

     5.8 Non-Reliance on Collateral  Agent,  Revolver Agent, Term Agent or Other
Lenders.  Each Lender agrees that it has,  independently and without reliance on
the Collateral  Agent,  the Revolver Agent,  the Term Agent or any other Lender,
and based upon such documents and information as it has deemed appropriate, made
its own credit  analysis of the  Companies  and the  Collateral,  including  the
status of the title of such  Collateral,  and its own  independent  decision  to
enter into this  Agreement and the Master Debt  Agreement to which it is a party
or  under  which  it  is  legally  bound.   Each  Lender  agrees  that  it  will
independently  and without  reliance  upon the  Collateral  Agent,  the Revolver
Agent,  the Term Agent or any other  Lender,  and based upon such  documents and
information as it shall deem  appropriate at the time,  continue to make its own
analysis and  decisions in taking or not taking any action under this  Agreement
and/or the Security  Documents.  Except as expressly  set forth herein or in the
Security Documents, the Collateral Agent acting solely as Collateral Agent shall
not be  required  to keep  itself,  the  Revolver  Agent,  the Term Agent or the
Lenders  informed as to the  performance of the Companies  under this Agreement,
any Master  Debt  Agreement  or any other  document,  instrument  or  agreement,
referred to or provided for

                                       26
<PAGE>

herein or  therein,  or to inspect  the  properties  or books of the  Companies.
Except as expressly provided for herein, the Collateral Agent in its capacity as
Collateral Agent shall not have any duty, responsibility or liability to provide
any  Lender  with  any  credit  or other  information  concerning  the  affairs,
financial  condition  or  business  of the  Companies  which  may come  into the
possession of the Collateral Agent, provided, however, that the Collateral Agent
shall send to each Lender,  promptly upon receipt thereof,  duplicates or copies
of all notices, requests, and other instruments received by the Collateral Agent
under or pursuant to this Agreement.

                            ARTICLE 6. SUBORDINATION

     6.1 Limited  Subordination.  As between the  Revolver  Lenders and the Term
Lenders,  the Term Lenders hereby acknowledge and agree,  solely for the benefit
of the Revolver Lenders, that:

          (a) The Liens of the  Security  Documents,  insofar as the same secure
the payment and performance of the Term Debt, are subject and subordinate to the
Liens of the Security  Documents,  insofar as the same secure the Revolver Debt,
to the extent and in the manner set forth in this Agreement; and

          (b) The rights of the Term Lenders to receive Collateral Distributions
under  the  Bluestem  Guaranty  in  payment  of the Term  Debt are  subject  and
subordinate  to the  rights  of  the  Revolver  Lenders  to  receive  Collateral
Distributions  under the Bluestem  Guaranty in payment of the Revolver  Debt, to
the extent and in the manner set forth in this Agreement.

          (c) Until the Revolver  Debt is Paid in Full, if the Term Agent or any
Term Lender receives a Collateral  Distribution  under the Bluestem  Guaranty on
account of the Term Debt the full amount of such Collateral  Distribution  shall
be promptly paid or delivered to the Collateral Agent to be held and distributed
by the Collateral Agent as, and in the same manner as, Proceeds of Collateral in
accordance with this Agreement.

     6.2 Term Debt Standstill Provisions.

          (a) Until the  Revolver  Debt is Paid in Full,  neither the Term Agent
nor any Term Lender  shall,  without the prior  written  consent of the Revolver
Agent,  take any  Enforcement  Action  with  respect  to any of the  Collateral,
including  issuing  any notice,  instruction,  direction,  request or  objection
pursuant to Article 4 (but  excluding the issuance of any  Enforcement  Notice),
until the earliest to occur of the following:

               (i) acceleration of the Revolver Debt; or

               (ii) the passage of 180 days from the delivery of an  Enforcement
          Notice to the Revolver Agent (the "Collateral Standstill Period"), but
          only if any Significant Term Default  described therein shall not have
          been cured or waived within such period.

Notwithstanding the foregoing, Term Lenders may file proofs of claim against any
Agreement  Obligor in any Proceeding  involving such Agreement  Obligor and take
any of the other actions,

                                       27
<PAGE>

and  enforce  any of the  other  rights  and  remedies,  described  or to  which
reference is made in Section 4.3(e)  hereof.  Any  Collateral  Distributions  or
other  proceeds  of any  Enforcement  Action  obtained by Term Agent or any Term
Lender  prior to the time at which the  Revolver  Debt is Paid in Full  shall be
promptly paid or delivered to the Collateral Agent to be held and distributed by
the Collateral Agent in accordance with this Agreement.

               (b) Notwithstanding anything contained herein to the contrary, if
following  the  acceleration  of the  Revolver  Debt by  Revolver  Lenders  such
acceleration is rescinded (whether or not any existing Revolver Default has been
cured or waived),  then all  Enforcement  Actions taken by the Term Agent or any
Term Lender  shall  likewise be rescinded  if such  Enforcement  Action is based
solely on clause (i) of paragraph  (a) of this Section 6.2;  provided,  however,
that  such  rescission  shall  not  affect  the  determination  of  whether  the
Collateral  Standstill Period has expired if an Enforcement Notice was delivered
after such  acceleration  and a Significant  Term Default  exists at the time of
such rescission.

     6.3 Insolvency Proceedings.

          (a) Each of the Revolver  Agent and the Term Agent agrees to file,  in
accordance  with applicable law, all filings and claims required to preserve the
Master Debt under the Term Loan Agreement and the Revolving  Credit Agreement in
any formal  insolvency  Proceeding,  whether under the Bankruptcy  Code or state
law,  within the time periods  required by such applicable law to preserve those
debts,  claims  and  rights,  and each of the  Revolver  Agent  (and each of the
Revolver  Lenders)  and the Term  Agent  (and each of the Term  Lenders)  hereby
irrevocably  authorizes,  empowers and  appoints  the other to execute,  verify,
deliver  and file  proofs of claim upon the failure of such other party to do so
with respect to the relevant Class of Master Debt within three (3) Business Days
prior to the  expiration  of the time to file  such  proof of  claim;  provided,
however,  that  neither  the  Revolver  Agent nor the Term Agent  shall have the
obligation to execute,  verify,  deliver, and/or file any such proof of claim on
behalf of the other Class of Master Debt.

          (b) In the  event  any  Proceeding  is  commenced  by or  against  any
Agreement  Obligor,  the Term Agent and the Term Lenders agree that,  unless and
until the  Revolver  Debt shall  have been Paid in Full,  the Term Agent and the
Term  Lenders,  as the case may be, shall  promptly  pay over to the  Collateral
Agent any Collateral  Distribution  attributable  to any such  Proceeding in the
form received for application  pursuant to this Agreement,  except that the Term
Lenders may receive and retain (i) debt  securities  issued in exchange  for the
Term Debt and (ii) equity interests in the Borrower.

     6.4 Rights of Term Lenders.  Except as expressly  provided herein,  nothing
contained in this  Agreement is intended to, nor shall it,  impair or reduce the
obligation of the Companies,  which are absolute and  unconditional,  to pay the
Term Debt as and when the same shall  become due and  payable or to comply  with
all of the terms and conditions of the Term Loan Agreement. No Person, including
the  Companies,  any third party, a trustee in bankruptcy or  representative  of
creditors,  other than the  Revolver  Lenders  shall be  entitled to any benefit
under this Agreement so as to claim any priority over the Term Lenders.

                                       28
<PAGE>

                          ARTICLE 7. LENDER AGREEMENTS

     7.1 Miscellaneous Security Interests.  Each of the Term Agent, the Revolver
Agent and each Lender  agrees that it is, and shall act as, the agent and bailee
for the other Lenders  (without effect on the priorities  established  hereunder
and without any liability or responsibility) to the extent reasonably  necessary
to perfect any  security  interest in  Collateral  required to be  perfected  by
possession  or control and which is at any time in the  possession  or under the
control of any such Person.

     7.2 Coordination of Enforcement  Efforts.  Without  providing any rights or
benefits to any Agreement  Obligor,  the Revolver Agent, the Term Agent and each
Lender agree that,  in the event  enforcement  proceedings  are necessary at any
time after the  expiration of the  Collateral  Standstill  Period,  such parties
shall   reasonably   discuss  the   possibility  of  undertaking  a  coordinated
enforcement process,  including an effort, if advisable,  to attempt to sell the
Collateral  assets of the Companies for fair market value as a going concern and
to reasonably  enter into  arrangements  between  themselves so as to permit the
ongoing  operation of the business of the Companies.  Failure to enter into such
discussions shall in no way affect the rights and/or obligations of any party as
set  forth  in this  Agreement  nor  shall it  entitle  any  party  to  specific
performance pursuant to Section 7.4 hereof.

     7.3 Information.  The Term Agent and the Revolver Agent agree to furnish to
each other and to all Lenders,  from time to time upon request,  information and
particulars  as to the  amounts  owing by the  Companies  under the Master  Debt
Agreements,  and the  Companies  hereby  consent  to all such  disclosures.  The
Revolver  Agent and the Term Agent  shall  provide  to each other  copies of any
written waivers of any Events of Default granted by it to any Agreement  Obligor
and copies of all amendments to their respective Master Debt Agreements.

     7.4  Specific   Performance.   Each  of  the  parties  to  this   Agreement
acknowledges  that the Revolver  Lenders and the Term  Lenders  would be damaged
irreparably  in the  event  any of the  provisions  of  this  Agreement  are not
performed in accordance  with their  specific  terms or are otherwise  breached.
Accordingly,  each of the parties to this  Agreement  agrees  that the  Revolver
Lenders and the Term  Lenders,  and the  Revolver  Agent and Term Agent shall be
entitled to an injunction or injunctions  to prevent  breaches of the provisions
of this Agreement and to enforce  specifically  this Agreement and the terms and
provisions of this Agreement in any action  instituted in any court of competent
jurisdiction,  in addition to any other  remedy to which they may be entitled at
law or in  equity,  without  the need to  demonstrate  any  actual  damage to be
suffered by the party seeking such relief and without  posting any bond or other
security.

                            ARTICLE 8. MISCELLANEOUS

     8.1 Interpretation and Survival of Provisions.  Article, Section, Schedule,
and Exhibit references are to this Agreement,  unless otherwise  specified.  All
references to instruments,  documents,  contracts, and agreements are references
to such  instruments,  documents,  contracts,  and agreements as the same may be
amended,  supplemented,  and  otherwise  modified  from  time  to  time,  unless
otherwise specified.  The word "including" shall mean "including but not limited
to." Whenever any Agreement Obligor has an obligation under this Agreement,  the
expense of

                                       29
<PAGE>

complying  with that  obligation  shall be an  expense of the  Companies  unless
otherwise specified.  Whenever any determination,  consent, or approval is to be
made or given by the  Collateral  Agent,  such action shall be in the Collateral
Agent's reasonable  discretion unless otherwise specified in this Agreement.  If
any provision in this Agreement is held to be illegal,  invalid, not binding, or
unenforceable,  such provision shall be fully severable and this Agreement shall
be  construed  and  enforced  as if  such  illegal,  invalid,  not  binding,  or
unenforceable  provision had never comprised a part of this  Agreement,  and the
remaining  provisions shall remain in full force and effect.  This Agreement has
been  reviewed  and  negotiated  by  sophisticated  parties with access to legal
counsel and shall not be  construed  against the drafter.  The  representations,
warranties,  and covenants made in this Agreement shall remain  operative and in
full force and effect regardless of (a) any  investigation  made by or on behalf
of any Person, or (b) the issuance and acceptance of any Master Debt and payment
therefor. Provisions which expressly state so shall remain operative and in full
force and effect unless such  provisions  are expressly  terminated in a writing
referencing  those individual  provisions,  regardless of any purported  general
termination of this Agreement.

     8.2 Binding Effect;  Assignment.  This Agreement and the Security Documents
shall be binding  upon all  parties  hereto  and  thereto  and their  respective
successors and permitted assigns. Except as expressly provided herein and in the
Security  Documents,  such agreements shall not be construed so as to confer any
right or benefit upon any Person, including a trustee in bankruptcy or any other
representatives  of  creditors  generally,   other  than  the  parties  to  this
Agreement,  the Lenders, and their respective  successors and permitted assigns.
The  Companies  may not assign their  rights or delegate  their duties under the
Security Documents.  The Collateral Agent may assign its rights and delegate its
duties  under  the  Security  Documents  in  accordance  with the  terms of this
Agreement.

     8.3  Modifications,  Waivers and  Consents.  This  Agreement may be amended
without the  consent of any  Agreement  Obligor if the effect of such  amendment
does not cause this  Agreement,  as so amended,  to be more  restrictive  on any
Agreement  Obligor not party to such  amendment than this Agreement was prior to
such   amendment.   Unless   otherwise   set  forth  herein,   all   amendments,
modifications, waivers, and consents under all other Security Documents shall be
in writing and signed by the Companies  party thereto and the Collateral  Agent,
acting upon the written  direction of the Required  Percentage  of each Class of
Master Debt, but if such modification,  waiver, or consent adversely affects the
rights, duties, or immunities of the Collateral Agent, then the Collateral Agent
shall take such action only in its own discretion. Nothing herein is intended to
impair the  obligations of the Companies to execute  documents and agreements in
accordance with the respective Master Debt Agreements.

     8.4 Notices.

          (a) The  Collateral  Agent  shall,  promptly  after  receipt  thereof;
deliver to the  Borrower,  the  Revolver  Agent and the Term Agent copies of all
other  notices,   requests,   correspondence  or  instruments  received  by  the
Collateral Agent from any Person under or pursuant to this Agreement.

          (b) All  notices,  requests,  correspondence,  and  other  instruments
delivered to any party hereunder shall be in writing,  and shall be delivered by
registered or certified mail,

                                       30
<PAGE>

return receipt requested,  telex,  telegram,  telecopy, air courier guaranteeing
overnight  delivery,  or personal  delivery,  to such  parties at the  following
addresses:

         If to the Collateral Agent:

         Bank One, NA, as Collateral Agent
         Mail Code IL 1-0634
         1 Bank One Plaza
         Chicago, Illinois 60670-0634
         Attention:  Jim Moore
         Telephone:        (312)  385-7057
         Facsimile:        (312)  732-4840

         With a copy to:

         Bank One, NA, as Collateral Agent
         1717 Main Street
         Fourth Floor
         Dallas, Texas 75201
         Attention:  J. Scott Fowler, Director, Capital Markets
         Telephone:        (214)  290-2162
         Facsimile:        (214)  290-2332

         If to the Revolver Agent or the Revolver Lenders:

         Bank One, NA
         1717 Main Street
         4th Floor
         Mail Code TX1-2448
         Dallas, Texas 75201
         Attention:  J. Scott Fowler

         If to the Term Agent or the Term Lenders:

         Bank One, NA
         Mail Code IL 1-0634
         1 Bank One Plaza
         Chicago, Illinois 60670-0634
         Attention:  Jim Moore
         Telephone:        (312)  385-7057
         Facsimile:        (312)  732-4840

         With a copy to:

         Bank One, NA
         1717 Main Street

                                       31
<PAGE>

         Fourth Floor
         Dallas, Texas 75201
         Attention:  J. Scott Fowler, Director, Capital Markets
         Telephone:        (214)  290-2162
         Facsimile:        (214)  290-2332

         If to the Borrower or any other Company:

         c/o Quest Resources Corporation
         5901 N. Western, Suite 200
         Oklahoma City, Oklahoma 73118
         Attention:        Jerry Cash, Chairman and Co-Chief Executive Officer
         Telephone:        (405)  840-9894
         Facsimile:        (405)  840-9897

         If to Cherokee Partners:

         _______________________________
         _______________________________
         _______________________________
         _______________________________
         Attention:        ___________________________
         Telephone:        ___________________________
         Facsimile:        ___________________________

or to such  other  addresses  as such  parties  may  designate  to the others in
writing. All such notices requests,  correspondence, and other instruments shall
be deemed to have been duly given:  at the time delivered by hand, if personally
delivered;  four (4) days after being sent by  certified  mail,  return  receipt
requested, if mailed; when answered back, if telexed; when receipt acknowledged,
if  telecopied;  and on the next  Business  Day if  timely  delivered  to an air
courier  guaranteeing   overnight  delivery.  Any  notice  required  under  this
Agreement  to be delivered to the  Companies  shall be deemed duly  delivered if
delivered to the Borrower or another of such Companies.

     8.5  Further  Assurances.  Each  party  to this  Agreement  shall  execute,
acknowledge, and deliver all such agreements, documents and instruments and take
all such  further  action as may be  reasonably  necessary  in order to  further
effectuate  the  purposes and to carry out the terms of this  Agreement  and the
Security Documents.

     8.6 Governing  Law. This  Agreement  shall be governed by, and construed in
accordance with, the laws of the State of Texas, without regard to principles of
conflicts of laws.

     8.7 Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate  counterparts,  each
of which counterparts,

                                       32
<PAGE>

when so executed  and  delivered,  shall be deemed to be an original  and all of
which  counterparts,  taken  together,  shall  constitute  but one and the  same
Agreement.

     8.8  Conflict.  In the event any term or provision  hereof is  inconsistent
with or conflicts  with any provision of the Security  Documents,  the terms and
provisions contained in this Agreement shall be controlling.

     8.9 Termination.

          (a) This Agreement and the obligations of the parties  hereunder shall
terminate,  and be of no further  force and effect,  when all amounts owed under
the Master Debt Agreements have been fully and finally paid.

          (b) Except as otherwise  set forth in this  paragraph  (b), the rights
and  obligations  of the  Revolver  Lenders  and the  Revolver  Agent under this
Agreement  shall terminate and be of no further force and effect when all of the
Revolver Debt has been fully and finally paid. If, upon the repayment in full of
the  Revolver  Debt,  the Revolver  Agent or any  Revolver  Lender shall then be
acting as the Collateral Agent under this Agreement and not be Term Lender or be
acting as Term Agent,  then the Revolver Agent or such Revolver  Lender,  as the
case may be, shall duly assign, transfer, and deliver unto the Term Agent all of
the rights,  instruments and moneys or other Collateral  (including any funds or
Collateral Account Collateral then held in the Collateral  Account) then held by
the Revolver  Agent or such Revolver  Lender as Collateral  Agent  hereunder and
under the  Security  Documents,  and  shall  execute  and  deliver  such  proper
instruments  in such form as may  reasonably  be  requested by the Term Agent to
evidence  such  assignment,  transfer,  and  delivery.  Upon  the  Term  Agent's
acceptance of the assignment,  transfer,  and delivery as aforesaid (i) the Term
Agent shall  immediately  and without the need for any further action succeed to
all of the rights and  obligations  of the  Collateral  Agent under the Security
Documents as if originally  named as such therein,  (ii) the Revolver  Agent and
all Revolver Lenders shall be fully and finally released in writing from any and
all obligations  under this Agreement,  and (iii) and the rights of the Revolver
Agent  and the  Revolver  Lender  (each in such  capacity,  but not in any other
capacity) hereunder shall terminate, and be of no further force and effect.

          (c) Except as otherwise  set forth in this  paragraph  (c), the rights
and  obligations  of the Term  Lenders and the Term Agent  under this  Agreement
shall  terminate and be of no further force and effect when all of the Term Debt
has been fully and  finally  paid.  If, upon the  repayment  in full of the Term
Debt,  the Term Agent or any Term Lender shall then be acting as the  Collateral
Agent under this  Agreement and not be Revolver  Lender or be acting as Revolver
Agent,  then the Term Agent or such Term Lender,  as the case may be, shall duly
assign,  transfer,  and  deliver  unto the  Revolver  Agent  all of the  rights,
instruments  and moneys or other  Collateral  (including any funds or Collateral
Account  Collateral  then held in the Collateral  Account) then held by the Term
Agent or such Term Lender as Collateral  Agent  hereunder and under the Security
Documents, and shall execute and deliver such proper instruments in such form as
may reasonably be requested by the Revolver  Agent to evidence such  assignment,
transfer, and delivery.  Upon the Revolver Agent's acceptance of the assignment,
transfer, and delivery as aforesaid (i) the Revolver Agent shall immediately and
without the need for any

                                       33
<PAGE>

further  action  succeed to all of the rights and  obligations of the Collateral
Agent under the Security Documents as if originally named as such therein,  (ii)
the Term  Agent and all Term  Lenders  shall be fully and  finally  released  in
writing from any and all  obligations  under this  Agreement,  and (iii) and the
rights of the Term Agent and the Term Lender (each in such capacity,  but not in
any other capacity)  hereunder shall  terminate,  and be of no further force and
effect.

          (d) Notwithstanding anything to the contrary contained in this Section
8.9, upon the termination of this Agreement (i) the  indemnification  provisions
of Section 5.4 hereof shall  survive the  termination  of this  Agreement,  (ii)
unless and until all obligations owed under all Master Debt Agreements have been
fully and finally paid, the Security  Documents  (other than this Agreement) and
all of the  obligations of the Companies  thereunder  shall remain in full force
and effect, (iii) the payment or distribution priorities of Section 4.4(d) shall
remain  in full  force and  effect,  and (iv) the  power  and  authority  of the
Collateral  Agent to effect  releases  of  Collateral  in  accordance  with this
Agreement shall survive the termination of this Agreement.

     8.10  Subsidiaries.  Each Company hereby  covenants and agrees that it will
not, and will not permit any of its existing or future  Subsidiaries to, take or
fail to take  any  action  that any  Company  Borrower  is  either  required  or
prohibited,  as the  case may be,  from  taking  under  the  provisions  of this
Agreement.

     8.11 JURY WAIVER.  THE PARTIES  HERETO HEREBY WAIVE,  TO THE FULLEST EXTENT
PERMITTED  BY  APPLICABLE  LAW,  ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDINGS  ARISING  OUT OF OR RELATED TO THIS  AGREEMENT  OR THE  TRANSACTIONS
CONTEMPLATED HEREBY.

                      [Signatures on the Following Pages]

                                       34
<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly  executed and  delivered by their proper and duly  authorized  officers and
attorneys-in-fact as of the day and year first above written.

                                  Bank One, NA,
                                  as Revolver Agent and as a Revolver Lender

                                  By: /s/ J. SCOTT FOWLER
                                      -------------------
                                  Name:    J. Scott Fowler
                                  Title:   Director, Capital Markets

                                 Signature Page
<PAGE>

                                  Bank One, NA,
                                  as Term Agent and as a Term Lender

                                  By: /s/ J. SCOTT FOWLER
                                      -------------------
                                  Name:    J. Scott Fowler
                                  Title:   Director, Capital Markets

                                 Signature Page
<PAGE>

                                  Bank One, NA,
                                  as Collateral Agent

                                  By: /s/ J. SCOTT FOWLER
                                      -------------------
                                  Name:    J. Scott Fowler
                                  Title:   Director, Capital Markets

                                 Signature Page

<PAGE>

                                  Quest Cherokee, LLC

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

                                  Bluestem Pipeline, LLC

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

                                 Signature page
<PAGE>

                                  Quest Oil & Gas Corporation

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

                                  Quest Energy Service, Inc.

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

                                  STP Cherokee, Inc.

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

                                  Ponderosa Gas Pipeline Company, Inc.

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

                                  Producers Service Incorporated

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

                                  J-W Gas Gathering, L.L.C.

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

                                 Signature Page
<PAGE>

                                  Cherokee Energy Partners LLC,

                                  By: /s/ CHRISTOPHER J. PICOTTE
                                      --------------------------
                                  Name:  Christopher J. Picottte
                                  Title: Vice President

                                 Signature Page
<PAGE>

                                   Schedule 1
                                       to
                  Collateral Agency and Intercreditor Agreement

                               SECURITY DOCUMENTS

1.   The Equityholders Pledge Agreement.

2.   The Cherokee Partners Pledge Agreement.

3.   Pledge  Agreement  dated  December  22,  2003  from  the  Borrower  to  the
     Collateral  Agent for the  benefit  of the  Revolver  Lenders  and the Term
     Lenders, securing, inter alia, the Master Debt.

4.   Each of the several  Security  Documents styled  "Mortgage,  Deed of Trust,
     Security  Agreement,  Financing  Statement and  Assignment of  Production,"
     dated December 22, 2003,  from Quest Cherokee,  LLC, as Mortgagor,  to Bank
     One, NA, as  Collateral  Agent for Revolving  Lenders and Term Lenders,  as
     Mortgagee, or, alternatively,  to J. Scott Fowler, Trustee, for the benefit
     of Bank One, NA, as Collateral Agent for Revolving Lenders and Term Lenders

                                 Signature Page

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}]]