Document:

Exhibit 10.20.4

THIS  WARRANT  AND THE SHARES OF COMMON  STOCK  ISSUABLE  UPON  EXERCISE OF THIS
WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE  SECURITIES  LAWS.  THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON
EXERCISE  OF  THIS  WARRANT  MAY NOT BE  SOLD,  OFFERED  FOR  SALE,  PLEDGED  OR
HYPOTHECATED  IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT AS TO THIS
WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF
COUNSEL  REASONABLY  SATISFACTORY  TO INYX,  INC. THAT SUCH  REGISTRATION IS NOT
REQUIRED.

               Right to Purchase 660,000 Shares of Common Stock of
                                   INYX, Inc.
                   (subject to adjustment as provided herein)

                          COMMON STOCK PURCHASE WARRANT

No. _________________                             Issue Date:  December 30, 2003

         INYX,  INC.,  a  corporation  organized  under the laws of the State of
Nevada, hereby certifies that, for value received,  LAURUS MASTER FUND, LTD., or
assigns (the  "Holder"),  is entitled,  subject to the terms set forth below, to
purchase  from the Company (as defined  herein) from and after the Issue Date of
this  Warrant and at any time or from time to time  before  5:00 p.m.,  New York
time,  through the close of business December 30, 2008 (the "Expiration  Date"),
up  to  660,000  fully  paid  and  nonassessable  shares  of  Common  Stock  (as
hereinafter  defined),  $0.001 par value per share,  at the applicable  Exercise
Price per share (as defined  below).  The number and character of such shares of
Common  Stock  and the  applicable  Exercise  Price per  share  are  subject  to
adjustment as provided herein.

         As used  herein  the  following  terms,  unless the  context  otherwise
requires, have the following respective meanings:

                  (a) The  term  "Company"  shall  include  INYX,  Inc.  and any
         corporation  which shall succeed,  or assume the  obligations of, INYX,
         Inc. hereunder.

                  (b) The term "Common Stock" includes (i) the Company's  Common
         Stock,  par value 0.001 per share;  and (ii) any other  securities into
         which  or for  which  any of the  securities  described  in (a)  may be
         converted  or  exchanged  pursuant  to  a  plan  of   recapitalization,
         reorganization, merger, sale of assets or otherwise.

                  (c) The term  "Other  Securities"  refers to any stock  (other
         than  Common  Stock) and other  securities  of the Company or any other
         person  (corporate or otherwise) which the holder of the Warrant at any
         time shall be  entitled  to  receive,  or shall have  received,  on the

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         exercise of the Warrant,  in lieu of or in addition to Common Stock, or
         which at any time  shall be  issuable  or shall  have  been  issued  in
         exchange  for or in  replacement  of Common  Stock or Other  Securities
         pursuant to Section 4 or otherwise.

                  (d) The "Exercise  Price"  applicable under this Warrant shall
         be as follows:

                           (i) a price of $1.84  [125% of the  Fixed  Conversion
                  Price  at  Closing]  for the  first  220,000  shares  acquired
                  hereunder;

                           (ii) a price of $2.21  [150% of the Fixed  Conversion
                  Price  at  Closing]  for  the  next  220,000  shares  acquired
                  hereunder; and

                           (iii) a price of $2.57 [175% of the Fixed  Conversion
                  Price  at  Closing]  for  any   additional   shares   acquired
                  hereunder.

         1. Exercise of Warrant.

         1.1 Number of Shares  Issuable upon  Exercise.  From and after the date
hereof through and including the  Expiration  Date, the Holder shall be entitled
to receive, upon exercise of this Warrant in whole or in part, by delivery of an
original  or fax copy of an  exercise  notice  in the form  attached  hereto  as
Exhibit  A (the  "Exercise  Notice"),  shares of  Common  Stock of the  Company,
subject to adjustment pursuant to Section 4.

         1.2 Fair Market Value. For purposes hereof,  the "Fair Market Value" of
a share of Common Stock as of a particular date (the "Determination Date") shall
mean:

         (a) If the  Company's  Common  Stock is  traded on the  American  Stock
Exchange or another  national  exchange or is quoted on the National or SmallCap
Market of The Nasdaq Stock  Market,  Inc.  ("Nasdaq"),  then the closing or last
sale  price,  respectively,  reported  for the  last  business  day  immediately
preceding the Determination Date.

         (b) If the Company's  Common Stock is not traded on the American  Stock
Exchange or another national exchange or on the Nasdaq but is traded on the NASD
OTC  Bulletin  Board,  then the mean of the average of the closing bid and asked
prices   reported  for  the  last   business  day   immediately   preceding  the
Determination Date.

         (c) Except as provided  in clause (d) below,  if the  Company's  Common
Stock is not publicly traded, then as the Holder and the Company agree or in the
absence of agreement by arbitration in accordance  with the rules then in effect
of the American Arbitration Association, before a single arbitrator to be chosen
from a panel of persons  qualified  by  education  and  training  to pass on the
matter to be decided.

         (d) If the Determination Date is the date of a liquidation, dissolution
or winding up, or any event deemed to be a  liquidation,  dissolution or winding
up pursuant to the Company's  charter,  then all amounts to be payable per share
to holders  of the Common  Stock  pursuant  to the  charter in the event of such
liquidation, dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Stock in liquidation under the charter,  assuming

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for the  purposes of this clause (d) that all of the shares of Common Stock then
issuable upon exercise of the Warrant are outstanding at the Determination Date.

         1.3  Company  Acknowledgment.  The  Company  will,  at the  time of the
exercise of the Warrant,  upon the request of the holder hereof  acknowledge  in
writing its  continuing  obligation to afford to such holder any rights to which
such holder shall continue to be entitled after such exercise in accordance with
the  provisions  of this  Warrant.  If the  holder  shall  fail to make any such
request,  such failure shall not affect the continuing obligation of the Company
to afford to such holder any such rights.

         1.4  Trustee  for  Warrant  Holders.  In the event that a bank or trust
company  shall have been  appointed  as trustee  for the  holders of the Warrant
pursuant to Subsection 3.2, such bank or trust company shall have all the powers
and duties of a warrant agent (as  hereinafter  described) and shall accept,  in
its own name for the account of the Company or such  successor  person as may be
entitled  thereto,  all  amounts  otherwise  payable  to  the  Company  or  such
successor,  as the case may be, on  exercise  of this  Warrant  pursuant to this
Section 1.

         2. Procedure for Exercise.

         2.1 Delivery of Stock  Certificates,  Etc.,  on  Exercise.  The Company
agrees that the shares of Common Stock  purchased  upon exercise of this Warrant
shall be deemed to be issued to the Holder as the record owner of such shares as
of the close of  business  on the date on which  this  Warrant  shall  have been
surrendered and payment made for such shares in accordance herewith.  As soon as
practicable  after the exercise of this  Warrant in full or in part,  and in any
event  within  three (3) business  days  thereafter,  the Company at its expense
(including  the payment by it of any  applicable  issue  taxes) will cause to be
issued in the name of and  delivered  to the  Holder,  or as such  Holder  (upon
payment  by  such  Holder  of any  applicable  transfer  taxes)  may  direct  in
compliance with applicable  securities  laws, a certificate or certificates  for
the number of duly and validly issued,  fully paid and  nonassessable  shares of
Common  Stock (or Other  Securities)  to which such Holder  shall be entitled on
such exercise,  plus, in lieu of any fractional share to which such holder would
otherwise be entitled,  cash equal to such fraction  multiplied by the then Fair
Market  Value  of one  full  share,  together  with  any  other  stock  or other
securities and property  (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise.

         2.2 Exercise. Payment may be made either (i) in cash or by certified or
official bank check payable to the order of the Company equal to the  applicable
aggregate  Exercise Price, (ii) by delivery of the Warrant,  or shares of Common
Stock and/or Common Stock  receivable upon exercise of the Warrant in accordance
with  Section  (b)  below,  or (iii) by a  combination  of any of the  foregoing
methods,  for the number of Common Shares  specified in such Exercise Notice (as
such  exercise  number shall be adjusted to reflect any  adjustment in the total
number of shares of Common  Stock  issuable  to the Holder per the terms of this
Warrant)  and the Holder  shall  thereupon  be entitled to receive the number of
duly authorized,  validly issued, fully-paid and non-assessable shares of Common
Stock (or Other Securities)  determined as provided herein.  Notwithstanding any
provisions  herein to the  contrary,  if the Fair  Market  Value of one share of
Common Stock is greater than the Exercise  Price (at the date of  calculation as

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set forth below),  in lieu of exercising  this Warrant for cash,  the Holder may
elect to receive shares equal to the value (as determined below) of this Warrant
(or the portion  thereof  being  exercised)  by surrender of this Warrant at the
principal  office of the Company  together with the properly  endorsed  Exercise
Notice in which event the  Company  shall issue to the Holder a number of shares
of Common Stock computed using the following formula:

         X=Y             (A-B)
                       ---------
                           A

              Where X =     the number of shares of Common Stock to be issued to
                            the Holder

              Y =           the  number of shares  of Common  Stock  purchasable
                            under  the  Warrant  or,  if only a  portion  of the
                            Warrant  is  being  exercised,  the  portion  of the
                            Warrant  being   exercised  (at  the  date  of  such
                            calculation)

              A =           the Fair Market Value of one share of the  Company's
                            Common Stock (at the date of such calculation)

              B =           Exercise  Price  (as  adjusted  to the  date of such
                            calculation)

         3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

         3.1 Reorganization,  Consolidation, Merger, Etc. In case at any time or
from  time  to  time,  the  Company  shall  (a)  effect  a  reorganization,  (b)
consolidate  with or  merge  into  any  other  person,  or (c)  transfer  all or
substantially all of its properties or assets to any other person under any plan
or arrangement  contemplating the dissolution of the Company, then, in each such
case,  as a condition  to the  consummation  of such a  transaction,  proper and
adequate  provision  shall be made by the  Company  whereby  the  Holder of this
Warrant,  on the exercise  hereof as provided in Section 1 at any time after the
consummation of such  reorganization,  consolidation  or merger or the effective
date of such  dissolution,  as the case may be,  shall  receive,  in lieu of the
Common  Stock (or Other  Securities)  issuable  on such  exercise  prior to such
consummation or such effective date, the stock and other securities and property
(including  cash) to which  such  Holder  would  have  been  entitled  upon such
consummation or in connection with such dissolution, as the case may be, if such
Holder had so exercised this Warrant,  immediately prior thereto, all subject to
further adjustment thereafter as provided in Section 4.

         3.2  Dissolution.  In the  event  of  any  dissolution  of the  Company
following the transfer of all or substantially  all of its properties or assets,
the Company,  concurrently with any distributions  made to holders of its Common
Stock,  shall at its expense  deliver or cause to be delivered to the Holder the
stock and other  securities  and property  (including  cash,  where  applicable)
receivable  by the Holder of the  Warrant  pursuant to Section  3.1,  or, if the
Holder shall so instruct the Company,  to a bank or trust  company  specified by
the Holder and having its  principal  office in New York,  NY as trustee for the
Holder of the Warrant.

         3.3  Continuation  of Terms.  Upon any  reorganization,  consolidation,
merger or transfer (and any dissolution  following any transfer)  referred to in
this  Section 3, this  Warrant  shall  continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and

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<PAGE>

property  receivable on the exercise of this Warrant after the  consummation  of
such   reorganization,   consolidation  or  merger  or  the  effective  date  of
dissolution  following  any such  transfer,  as the case  may be,  and  shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer,  the person acquiring all or substantially all of the
properties  or assets of the  Company,  whether  or not such  person  shall have
expressly  assumed  the terms of this  Warrant as  provided in Section 4. In the
event  this  Warrant  does not  continue  in full  force  and  effect  after the
consummation of the transactions described in this Section 3, then the Company's
securities and property  (including  cash, where  applicable)  receivable by the
Holders  of  the  Warrant  will  be  delivered  to  Holder  or  the  Trustee  as
contemplated by Section 3.2.

         4.  Extraordinary  Events Regarding Common Stock. In the event that the
Company shall (a) issue  additional  shares of the Common Stock as a dividend or
other  distribution on outstanding  Common Stock,  (b) subdivide its outstanding
shares of Common  Stock,  or (c)  combine its  outstanding  shares of the Common
Stock into a smaller  number of shares of the Common  Stock,  then, in each such
event,  the Exercise  Price  shall,  simultaneously  with the  happening of such
event,  be adjusted by multiplying  the then Exercise  Price by a fraction,  the
numerator  of which  shall be the number of shares of Common  Stock  outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common  Stock  outstanding  immediately  after such event,  and the
product so obtained shall  thereafter be the Exercise Price then in effect.  The
Exercise Price, as so adjusted,  shall be readjusted in the same manner upon the
happening of any successive  event or events described herein in this Section 4.
The  number of shares of Common  Stock  that the  holder of this  Warrant  shall
thereafter,  on the  exercise  hereof as  provided  in Section 1, be entitled to
receive shall be increased to a number  determined by multiplying  the number of
shares of Common  Stock that would  otherwise  (but for the  provisions  of this
Section 4) be issuable on such exercise by a fraction of which (a) the numerator
is the  Exercise  Price that would  otherwise  (but for the  provisions  of this
Section 4) be in effect, and (b) the denominator is the Exercise Price in effect
on the date of such exercise.

         5.  Certificate  as to  Adjustments.  In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the  Warrant,  the Company at its expense  will  promptly  cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or  readjustment  in  accordance  with the terms of the  Warrant  and  prepare a
certificate  setting forth such adjustment or readjustment and showing in detail
the facts upon which such  adjustment  or  readjustment  is based,  including  a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold,  (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding,  and (c) the Exercise Price
and the number of shares of Common  Stock to be received  upon  exercise of this
Warrant,  in effect  immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant.  The Company will  forthwith
mail a copy of each  such  certificate  to the  holder  of the  Warrant  and any
Warrant agent of the Company (appointed pursuant to Section 11 hereof).

         6.  Reservation of Stock,  Etc.,  Issuable on Exercise of Warrant.  The
Company will at all times  reserve and keep  available,  solely for issuance and
delivery  on the  exercise  of the  Warrant,  shares of  Common  Stock (or Other
Securities) from time to time issuable on the exercise of the Warrant.

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         7.  Assignment;   Exchange  of  Warrant.  Subject  to  compliance  with
applicable  securities laws, this Warrant,  and the rights evidenced hereby, may
be transferred by any registered  holder hereof (a  "Transferor") in whole or in
part.  On the  surrender  for exchange of this  Warrant,  with the  Transferor's
endorsement  in  the  form  of  Exhibit  B  attached  hereto  (the   "Transferor
Endorsement  Form") and together with evidence  reasonably  satisfactory  to the
Company  demonstrating  compliance with applicable  securities laws, which shall
include,  without limitation, a legal opinion from the Transferor's counsel that
such  transfer  is  exempt  from the  registration  requirements  of  applicable
securities  laws,  the Company at its expense but with payment by the Transferor
of any applicable  transfer  taxes) will issue and deliver to or on the order of
the  Transferor  thereof  a new  Warrant  of  like  tenor,  in the  name  of the
Transferor  and/or the  transferee(s)  specified in such Transferor  Endorsement
Form  (each a  "Transferee"),  calling  in the  aggregate  on the  face or faces
thereof for the number of shares of Common Stock called for on the face or faces
of the Warrant so surrendered by the Transferor.

         8.   Replacement  of  Warrant.   On  receipt  of  evidence   reasonably
satisfactory  to the Company of the loss,  theft,  destruction  or mutilation of
this Warrant  and, in the case of any such loss,  theft or  destruction  of this
Warrant,   on  delivery  of  an  indemnity   agreement  or  security  reasonably
satisfactory  in form and  amount  to the  Company  or,  in the case of any such
mutilation,  on surrender and  cancellation of this Warrant,  the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

         9.  Registration  Rights.  The Holder of this  Warrant has been granted
certain  registration  rights by the Company.  These registration rights are set
forth  in a  Registration  Rights  Agreement  entered  into by the  Company  and
Purchaser dated as of even date of this Warrant.

         10. Maximum Exercise. The Holder shall not be entitled to exercise this
Warrant on an exercise date, in connection  with that number of shares of Common
Stock  which would be in excess of the sum of (i) the number of shares of Common
Stock  beneficially  owned by the Holder and its affiliates on an exercise date,
and (ii) the number of shares of Common Stock issuable upon the exercise of this
Warrant with respect to which the determination of this proviso is being made on
an exercise date,  which would result in beneficial  ownership by the Holder and
its affiliates of more than 4.99% of the  outstanding  shares of Common Stock of
the Company on such date.  For the  purposes  of the proviso to the  immediately
preceding sentence,  beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13d-3 thereunder.  Notwithstanding the foregoing,  the restriction  described in
this  paragraph  may be revoked upon 75 days prior notice from the Holder to the
Company and is  automatically  null and void upon an Event of Default  under the
Note.

         11.  Warrant  Agent.  The Company  may,  by written  notice to the each
Holder of the Warrant,  appoint an agent for the purpose of issuing Common Stock
(or Other  Securities)  on the exercise of this  Warrant  pursuant to Section 1,
exchanging  this  Warrant  pursuant  to Section 7, and  replacing  this  Warrant
pursuant  to  Section  8,  or any of the  foregoing,  and  thereafter  any  such
issuance,  exchange or  replacement,  as the case may be,  shall be made at such
office by such agent.

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<PAGE>

         12. Transfer on the Company's Books.  Until this Warrant is transferred
on the books of the Company,  the Company may treat the registered holder hereof
as the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

         13. Notices, Etc. All notices and other communications from the Company
to the  Holder of this  Warrant  shall be mailed by first  class  registered  or
certified mail,  postage prepaid,  at such address as may have been furnished to
the Company in writing by such Holder or, until any such Holder furnishes to the
Company an  address,  then to, and at the  address  of, the last  Holder of this
Warrant who has so furnished an address to the Company.

         14.  Voluntary  Adjustment by the Company.  The Company may at any time
during the term of this Warrant  reduce the then current  Exercise  Price to any
amount and for any period of time deemed  appropriate  by the Board of Directors
of the Company.

         15. No Shorting.  The Purchaser or any of its affiliates and investment
partners  will not and  will  not  cause  any  person  or  entity,  directly  or
indirectly,  to engage in "short  sales" of the  Company's  Common  Stock or any
other hedging strategies.

         16.  Miscellaneous.  This  Warrant  and any term hereof may be changed,
waived,  discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought.  This Warrant shall be governed by and  construed in accordance  with
the laws of State of New York without regard to principles of conflicts of laws.
Any action brought  concerning  the  transactions  contemplated  by this Warrant
shall be brought only in the state  courts of New York or in the federal  courts
located in the state of New York; provided,  however, that the Holder may choose
to waive this  provision and bring an action  outside the state of New York. The
individuals  executing  this Warrant on behalf of the Company agree to submit to
the  jurisdiction  of such courts and waive trial by jury. The prevailing  party
shall be entitled to recover from the other party its reasonable attorney's fees
and  costs.  In the event  that any  provision  of this  Warrant  is  invalid or
unenforceable  under any applicable  statute or rule of law, then such provision
shall be deemed  inoperative  to the extent that it may conflict  therewith  and
shall be deemed  modified to conform  with such statute or rule of law. Any such
provision  which  may prove  invalid  or  unenforceable  under any law shall not
affect the validity or  enforceability  of any other  provision of this Warrant.
The headings in this Warrant are for purposes of reference  only,  and shall not
limit  or  otherwise  affect  any  of  the  terms  hereof.   The  invalidity  or
unenforceability  of any provision hereof shall in no way affect the validity or
enforceability  of any other  provision.  The  Company  acknowledges  that legal
counsel  participated  in  the  preparation  of  this  Warrant  and,  therefore,
stipulates  that the rule of  construction  that  ambiguities are to be resolved
against the drafting  party shall not be applied in the  interpretation  of this
Warrant to favor any party against the other party.

                   [Balance of page intentionally left blank;
                            signature page follows.]

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<PAGE>

         IN WITNESS WHEREOF, the Company has executed this Warrant as of the
date first written above.

                                                     INYX, INC.

WITNESS:                                             /s/  Jack Kachkar
                                                     By:  Jack Kachkar, Chairman
                                                        ------------------------
                                                        ------------------------
------------------------                                ------------------------

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<PAGE>

                                    Exhibit A

                              FORM OF SUBSCRIPTION
                   (To Be Signed Only On Exercise Of Warrant)

TO:      Ventures National Incorporated d/b/a Titan General Holdings, Inc.

         Attention:        Chief Financial Officer

         The  undersigned,  pursuant to the provisions set forth in the attached
Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):

________          ________shares of the Common Stock covered by such Warrant; or

________          the maximum  number of shares of Common Stock  covered by such
                  Warrant pursuant to the cashless exercise  procedure set forth
                  in Section 2.

         The  undersigned  herewith makes payment of the full Exercise Price for
such  shares  at the  price per share  provided  for in such  Warrant,  which is
$___________. Such payment takes the form of (check applicable box or boxes):

________          $__________ in lawful money of the United States; and/or

________          the cancellation of such portion of the attached Warrant as is
                  exercisable  for a total of  _______  shares of  Common  Stock
                  (using a Fair Market  Value of $_______ per share for purposes
                  of this calculation); and/or

________          the  cancellation  of such number of shares of Common Stock as
                  is  necessary,  in  accordance  with the  formula set forth in
                  Section  2.2, to exercise  this  Warrant  with  respect to the
                  maximum number of shares of Common Stock purchasable  pursuant
                  to the  cashless  exercise  procedure  set forth in Section 2.

         The  undersigned  requests  that the  certificates  for such  shares be
issued in the name of, and delivered to _________________________________  whose
address is ____________________________________________________________________.

         The  undersigned  represents  and warrants that all offers and sales by
the  undersigned of the securities  issuable upon exercise of the within Warrant
shall be made pursuant to  registration of the Common Stock under the Securities
Act of 1933, as amended (the "Securities  Act") or pursuant to an exemption from
registration under the Securities Act.

Dated:_____________________            _________________________________________
                                       (Signature must conform to name of holder
                                        as specified on the face of the Warrant)

                                    Address:____________________________________

                                            ____________________________________

                                      A-1
<PAGE>

                                    Exhibit B

                         FORM OF TRANSFEROR ENDORSEMENT
                   (To Be Signed Only On Transfer Of Warrant)

         For  value  received,   the  undersigned  hereby  sells,  assigns,  and
transfers  unto the person(s)  named below under the heading  "Transferees"  the
right represented by the within Warrant to purchase the percentage and number of
shares of Common  Stock of INYX,  Inc.  into  which the within  Warrant  relates
specified under the headings "Percentage  Transferred" and "Number Transferred,"
respectively,  opposite the name(s) of such  person(s)  and  appoints  each such
person Attorney to transfer its respective right on the books of INYX, Inc. with
full power of substitution in the premises.

                                                 Percentage          Number
Transferees              Address                 Transferred       Transferred

____________________     ____________________    _____________     _____________

____________________     ____________________    _____________     _____________

____________________     ____________________    _____________     _____________

____________________     ____________________    _____________     _____________

Dated:________________________         _________________________________________
                                       (Signature must conform to name of holder
                                        as specified on the face of the Warrant)

                                       Address:_________________________________

                                               _________________________________

                                       SIGNED IN THE PRESENCE OF:

                                       _________________________________________
                                                      (Name)
ACCEPTED AND AGREED:
[TRANSFEREE]

_________________________________________
              (Name)

                                      B-1Exhibit 4.1
                                                                     -----------

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

                               QUEST CHEROKEE, LLC

                                   $51,000,000

                             15% Subordinated Notes

                             NOTE PURCHASE AGREEMENT

                             Dated December 22, 2003

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

<PAGE>

                                TABLE OF CONTENTS

Section                                                        Page

1.    AUTHORIZATION OF NOTES......................................1

2.    SALE AND PURCHASE OF SUBORDINATED NOTES.....................1

3.    CLOSING.....................................................1

4.    CONDITIONS TO CLOSING.......................................2
      4.1. Representations and Warranties.........................2
      4.2. Performance; No Default................................2
      4.3. Transactions...........................................2
      4.4. Compliance Certificates................................2
      4.5. Proceedings and Documents..............................3
      4.6. Fees and Expenses......................................3

5.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............3
      5.1. Organization; Power and Authority......................3
      5.2. Authorization, etc.....................................3
      5.3. Compliance with Laws, Other Instruments, etc...........4
      5.4. Governmental Authorizations, etc.......................4

6.    REPRESENTATIONS OF THE PURCHASER............................4
      6.1. Purchase for Investment................................4
      6.2. Source of Funds........................................4
      6.3. Organization; Power and Authority......................5
      6.4. Authorization, etc.....................................5
      6.5. Compliance with Laws, Other Instruments, etc...........6
      6.6. Governmental Authorizations, etc.......................6
      6.7. Accredited Investor....................................6

7.    INTEREST; PREPAYMENT OF THE NOTES...........................6
      7.1. Interest...............................................6
      7.2. Repayments and Prepayments.............................7
      7.3. Maturity; Surrender, etc...............................8

8.    AFFIRMATIVE COVENANTS.......................................8
      8.1. Compliance with Law....................................8
      8.2. Legal Existence, etc...................................8

9.    NEGATIVE COVENANTS..........................................8
      9.1. Use of Proceeds........................................8
      9.2. Merger, Consolidation, etc.............................8

                                       i
<PAGE>

10.   REMEDIES ON DEFAULT, ETC....................................9
      10.1.Acceleration...........................................9
      10.2.Other Remedies.........................................9
      10.3.Rescission.............................................9
      10.4.No Waivers or Election of Remedies, Expenses, etc.....10

11.   REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES..............10
      11.1.Registration of Notes.................................10
      11.2.Transfer and Exchange of Notes........................10
      11.3.Replacement of Notes..................................11

12.   PAYMENTS ON NOTES..........................................11
      12.1.Home Office Payment...................................11

13.   SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
      AGREEMENT..................................................12

14.   AMENDMENT AND WAIVER.......................................12
      14.1.Requirements..........................................12
      14.2.Solicitation of Holders of Notes......................12
      14.3.Binding Effect, etc...................................13
      14.4.Notes held by Company, etc............................13

15.   NOTICES....................................................13

16.   REPRODUCTION OF DOCUMENTS..................................14

17.   MISCELLANEOUS..............................................14
      17.1.Successors and Assigns................................14
      17.2.Payments Due on Non-Business Days.....................14
      17.3.Severability..........................................14
      17.4.Construction..........................................14
      17.5.Counterparts..........................................15
      17.6.Governing Law.........................................15

Schedule A     -     Information Relating To Purchasers

Schedule B           Defined Terms

Exhibit 1      -     Form of 15% Subordinated Note

                                       ii
<PAGE>

                               QUEST CHEROKEE, LLC
                                 5901 N. Western
                                    Suite 200
                          Oklahoma City, Oklahoma 73118

                             15% Subordinated Notes

                                                               December 22, 2003

Cherokee Energy Partners LLC
200 Clarendon Street
Boston, MA 02117

Ladies and Gentlemen:

           Quest  Cherokee,  LLC,  a Delaware  limited  liability  company  (the
"Company"),  agrees with Cherokee  Energy Partners LLC ("you" or "Purchaser") as
follows:

1.    AUTHORIZATION OF NOTES.

           The  Company  will  authorize  the issue  and sale of  $51,000,000.00
aggregate  principal  amount of its 15%  Subordinated  Notes (the  "Subordinated
Notes")  such term to include  any such notes  issued in  substitution  therefor
pursuant  to Section  12 of this  Agreement.  The  Subordinated  Notes  shall be
substantially in the form set out in Exhibit 1, with such changes therefrom,  if
any, as may be approved by you and the Company.  Certain  capitalized terms used
in this  Agreement  are defined in Schedule B;  references to a "Schedule" or an
"Exhibit" are, unless otherwise specified,  to a Schedule or an Exhibit attached
to this  Agreement.  In addition,  on or before the Closing,  the Company  shall
authorize  the issue and  delivery of PIK Notes (as  hereinafter  defined).  The
aggregate principal amount of the Subordinated Notes outstanding at any time may
not exceed $51,000,000.00 plus the aggregate principal amount of PIK Notes.

2. SALE AND PURCHASE OF SUBORDINATED NOTES.

           Subject to the terms and  conditions of this  Agreement,  the Company
will  issue  and sell to you and you will  purchase  from  the  Company,  at the
Closing provided for in Section 3, Subordinated Notes in the aggregate principal
amount of $51,000,000.00.

3.    CLOSING.

           The sale and  purchase of the  Subordinated  Notes to be purchased by
you shall occur at the  offices of Andrews  Kurth LLP,  600 Travis,  Suite 4200,
Houston,  Texas 77002, at 10:00 a.m., Houston time, at a closing (the "Closing")
on December 22, 2003 or on such other  Business Day or at such other location as
may be agreed upon by the Company and you. At the

<PAGE>

Closing the Company will deliver to you the  Subordinated  Notes to be purchased
by you in the form of a single  Subordinated  Note (or such  greater  number  of
Subordinated  Notes in  denominations  of at least  $100,000 as you may request)
dated the date of the  Closing  and  registered  in your name (or in the name of
your  nominee),  against  delivery  by you  to  the  Company  or  its  order  of
immediately  available  funds in the amount of the purchase price therefor (less
all fees and  expenses  to be  deducted  by you  pursuant to Section 4.6 of this
Agreement) by wire transfer of  immediately  available  funds for the account of
the Company to account  number  Devon  Energy  Production  Company,  LP, Bank of
America, ABA 111000012, Account 1252483696.

4.    CONDITIONS TO CLOSING.

           Your obligation to purchase and pay for the Subordinated  Notes to be
sold to you at the Closing is subject to the  fulfillment to your  satisfaction,
prior to or at the Closing, of the following conditions:

4.1.  Representations and Warranties.

           The  representations  and warranties of the Company in this Agreement
shall be true and correct in all material respects at the time of the Closing.

4.2.  Performance; No Default.

           The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at the Closing and after  giving  effect to the issue and sale
of the  Subordinated  Notes,  no Default or Event of Default shall have occurred
and be continuing.

4.3.  Transactions

           The  Closing  Transactions  shall have been  consummated  or shall be
consummated concurrently with the Closing, in each case, on terms and conditions
reasonably acceptable to you.

4.4. Compliance Certificates.

     (a)  Officer's  Certificate.  The Company  shall have  delivered  to you an
Officer's  Certificate,  dated  the  date of the  Closing,  certifying  that the
conditions specified in Sections 4.1 and 4.2 have been fulfilled.

     (b)  Secretary's  Certificate.  The Company  shall have  delivered to you a
certificate  certifying as to the resolutions attached thereto and other limited
liability  company  proceedings  relating to the  authorization,  execution  and
delivery of the Notes and this Agreement.

                                       2
<PAGE>

4.5.  Proceedings and Documents.

           All limited  liability  company and other  proceedings  in connection
with  the  transactions  contemplated  by  this  Agreement  (including,  without
limitation,  the  Transaction  Documents)  and  all  documents  and  instruments
incident to such  transactions  shall be  satisfactory  to you and your  special
counsel,  and  you and  your  special  counsel  shall  have  received  all  such
counterpart  originals or certified or other copies of such  documents as you or
they may reasonably request.

4.6.  Fees and Expenses

           On the Closing Date, the Company shall pay you a commitment fee in an
amount  equal to 2.0% of the  Subordinated  Notes  issued and sold  pursuant  to
Section  2. The  Company  shall  pay you the  fees,  charges  and  disbursements
incurred  by you in  connection  with  the  transactions  contemplated  by  this
Agreement,  including  reasonable  fees  payable  to  your  special  counsel  as
reflected in a statement of such  counsel  rendered to the Company.  The Company
agrees and hereby authorizes you to deduct from the amount of the purchase price
of the  Subordinated  Notes the fees and  expenses  due pursuant to this Section
4.6.

5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

           The Company represents and warrants to you that:

5.1.  Organization; Power and Authority.

           The  Company is a limited  liability  company  duly  formed,  validly
existing  and in good  standing  under  the laws of the State of  Delaware.  The
Company is duly qualified to transact  business as a foreign  limited  liability
company and is in good standing in each  jurisdiction  in which the character of
its properties or the nature of its business make such qualification  necessary,
except where the failure to be so qualified  could not reasonably be expected to
result in a Material Adverse Effect.  The Company has the power and authority to
execute and deliver this Agreement,  the Notes and the Transaction Documents and
to perform the provisions hereof and thereof.

5.2.  Authorization, etc.

           This  Agreement,  the Notes and the  Transaction  Documents have been
duly authorized by all necessary limited liability company action on the part of
the Company,  and this  Agreement  constitutes,  and upon execution and delivery
thereof each Note will constitute,  a legal, valid and binding obligation of the
Company  enforceable against the Company in accordance with its terms, except as
such  enforceability  may be limited by (i) applicable  bankruptcy,  insolvency,
reorganization,  moratorium or other similar laws  affecting the  enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

                                       3
<PAGE>

5.3.  Compliance with Laws, Other Instruments, etc.

           The  execution,  delivery  and  performance  by the  Company  of this
Agreement  and the Notes  will not (i)  contravene,  result in any breach of, or
constitute  a  default  under any  indenture,  mortgage,  deed of  trust,  loan,
purchase or credit agreement, lease, limited liability company agreement, or any
other  agreement  or  instrument  to which the  Company is bound or by which the
Company or any of their  respective  properties  may be bound or affected,  (ii)
conflict  with  or  result  in a  breach  of  any of the  terms,  conditions  or
provisions of any order, judgment, decree, or ruling of any court, arbitrator or
Governmental  Authority applicable to the Company or (iii) violate any provision
of any  statute  or  other  rule or  regulation  of any  Governmental  Authority
applicable to the Company,  except in each case above, where such contravention,
conflict,  breach or violation  could not  reasonably be expected to result in a
Material Adverse Effect.

5.4.  Governmental Authorizations, etc.

           No consent, approval or authorization of, or registration,  filing or
declaration with, any Governmental  Authority is required in connection with the
execution,  delivery or  performance  by the Company of this Agreement or any of
the Notes.

6.    REPRESENTATIONS OF THE PURCHASER.

6.1.  Purchase for Investment.

           You represent  that you are purchasing the Notes for your own account
or for one or more separate accounts maintained by you or for the account of one
or more pension or trust funds and not with a view to the distribution  thereof,
provided that the  disposition  of your or their  property shall at all times be
within  your or their  control.  You  understand  that the  Notes  have not been
registered  under  the  Securities  Act and  may be  resold  only if  registered
pursuant  to the  provisions  of the  Securities  Act  or if an  exemption  from
registration  is  available,  except  under  circumstances  where  neither  such
registration  nor such an  exemption is required by law, and that the Company is
not required to register the Notes.

6.2.  Source of Funds.

           You  represent  that at least one of the  following  statements is an
accurate  representation  as to each source of funds (a  "Source") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:

(a) if you  are an  insurance  company,  the  Source  does  not  include  assets
allocated  to any  separate  account  maintained  by you in which  any  employee
benefit  plan (or its  related  trust) has any  interest,  other than a separate
account that is  maintained  solely in  connection  with your fixed  contractual
obligations  under which the amounts payable,  or credited,  to such plan and to
any  participant or  beneficiary of such plan  (including any annuitant) are not
affected in any manner by the investment performance of the separate account; or

(b) the Source is either  (i) an  insurance  company  pooled  separate  account,
within the meaning of  Prohibited  Transaction  Exemption  ("PTE")  90-1 (issued
January 29,

                                       4
<PAGE>

1990), or (ii) a bank collective  investment fund, within the meaning of the PTE
91-38 (issued July 12, 1991) and, except as you have disclosed to the Company in
writing  pursuant to this  paragraph  (b), no employee  benefit plan or group of
plans maintained by the same employer or employee organization beneficially owns
more  than 10% of all  assets  allocated  to such  pooled  separate  account  or
collective investment fund; or

     (c) the Source  constitutes  assets of an  "investment  fund"  (within  the
meaning of Part V of the QPAM  Exemption)  managed by a "qualified  professional
asset manager" or "QPAM"  (within the meaning of Part V of the QPAM  Exemption),
no employee  benefit  plan's assets that are included in such  investment  fund,
when combined with the assets of all other employee benefit plans established or
maintained  by the same  employer  or by an  affiliate  (within  the  meaning of
Section  V(c)(1) of the QPAM Exemption) of such employer or by the same employee
organization  and managed by such QPAM,  exceed 20% of the total  client  assets
managed by such QPAM,  the conditions of Part I(c) and (g) of the QPAM Exemption
are  satisfied,  neither the QPAM nor a person  controlling or controlled by the
QPAM  (applying  the  definition  of  "control"  in  Section  V(e)  of the  QPAM
Exemption)  owns a 5% or more  interest in the  Company and (i) the  identity of
such QPAM and (ii) the names of all  employee  benefit  plans  whose  assets are
included in such  investment  fund have been disclosed to the Company in writing
pursuant to this paragraph (c); or

     (d) the Source is a governmental plan; or

     (e) the Source is one or more employee benefit plans, or a separate account
or trust fund comprised of one or more employee benefit plans, each of which has
been identified to the Company in writing pursuant to this paragraph (e); or

     (f) the Source does not include assets of any employee  benefit plan, other
than a plan exempt from the coverage of ERISA.

As used in this Section 6.2, the terms  "employee  benefit plan",  "governmental
plan",  "party in interest" and  "separate  account"  shall have the  respective
meanings assigned to such terms in Section 3 of ERISA.

6.3.  Organization; Power and Authority.

           The  Purchaser is a limited  liability  company duly formed,  validly
existing  and in good  standing  under  the laws of the State of  Delaware.  The
Purchaser is duly qualified to transact  business as a foreign limited liability
company and is in good standing in each  jurisdiction  in which the character of
its properties or the nature of its business make such qualification  necessary,
except where the failure to be so qualified  could not reasonably be expected to
result in a material  adverse effect.  The Purchaser has the power and authority
to execute and deliver this Agreement and to perform the  provisions  hereof and
thereof.

6.4.  Authorization, etc.

           This  Agreement has been duly  authorized  by all  necessary  limited
liability  company  action  on the part of the  Purchaser,  and  this  Agreement
constitutes a legal, valid and binding  obligation of the Purchaser  enforceable
against the Purchaser in accordance with its

                                       5
<PAGE>

terms,   except  as  such  enforceability  may  be  limited  by  (i)  applicable
bankruptcy,  insolvency,  reorganization,   moratorium  or  other  similar  laws
affecting  the  enforcement  of  creditors'  rights  generally  and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

6.5. Compliance with Laws, Other Instruments, etc.

           The  execution,  delivery and  performance  by the  Purchaser of this
Agreement  will not (i)  contravene,  result in any breach of, or  constitute  a
default under any indenture,  mortgage,  deed of trust, loan, purchase or credit
agreement, lease, limited liability company agreement, or any other agreement or
instrument  to which the  Purchaser is bound or by which the Purchaser or any of
their  respective  properties  may be bound or affected,  (ii)  conflict with or
result in a breach of any of the terms,  conditions  or provisions of any order,
judgment,  decree, or ruling of any court,  arbitrator or Governmental Authority
applicable  to the  Purchaser or (iii)  violate any  provision of any statute or
other  rule  or  regulation  of any  Governmental  Authority  applicable  to the
Purchaser, except in each case above, where such contravention, conflict, breach
or violation  could not  reasonably be expected to result in a material  adverse
effect.

6.6.  Governmental Authorizations, etc.

           No consent, approval or authorization of, or registration,  filing or
declaration with, any Governmental  Authority is required in connection with the
execution, delivery or performance by the Purchaser of this Agreement.

6.7.  Accredited Investor.

           Purchaser  represents that it is an "accredited  investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

7. INTEREST; PREPAYMENT OF THE NOTES.

7.1. Interest.

     (a) Interest  accrued on each Note shall be payable,  without  duplication:
(i) subject to Section  7.1(b),  on each  Interest  Payment Date and (ii) on the
date of any payment or prepayment, in whole or in part, of principal outstanding
on such Note.

     (b) All interest occurring under the Notes which becomes due and payable on
an Interest  Payment Date shall,  to the extent (i) that a payment due under the
Notes is  precluded  to be made to you in cash by the terms of the  Senior  Loan
Documents or (ii) the Company does not having  sufficient cash available on such
Interest  Payment  Date to make such  payment  pursuant  to  Section  5.4 of the
Amended and Restated Limited Liability Company Agreement,  be paid to you by the
issuance of a note (a "PIK Note") in a principal  amount  equal to the amount of
accrued  interest due and payable to you on such Interest  Payment Date. The PIK
Notes  shall be  substantially  in the form set out in Exhibit 1. The failure of
the  Company to issue you a PIK Note on any  Interest  Payment  Date when due as
provided in this Section  7.1(b) shall not alter or affect the obligation of the
Company to pay the amount due on such  Interest  Payment Date under the terms of
this Agreement and each Note, and such accrued and unpaid amount shall in all

                                       6
<PAGE>

events  be  deemed  to  be  an  obligation   to  issue  a  PIK  Note   hereunder
notwithstanding any action or non-action of the Company.

7.2.  Repayments and Prepayments.

           The Company  shall repay in full the unpaid  principal  amount of the
Notes upon the Final  Maturity  Date. The Company shall have the right to extend
the Final Maturity Date one time by a period of up to two (2) additional  years,
provided  that the Company  notifies the Purchaser in writing that it desires to
extend the Final Maturity Date, such notice to be received by the holder of each
Junior  Note no later than sixty (60) days prior to the current  Final  Maturity
Date. Prior thereto, the Company:

     (a) may,  from time to time on any  Business  Day,  prepay,  in whole or in
part, the outstanding principal amount of any Notes; provided, however, that all
such  voluntary  prepayments  shall  require at least three (3) but no more than
five (5) Business Days prior written irrevocable notice to you, and (ii) if such
prepayment is made as a result of an Early  Liquidation  Event,  such prepayment
shall include the Make Whole Amount;

     (b) shall, to the extent permitted under the Senior Loan Documents, on each
Distribution  Date,  prepay the  principal  of the Notes in an amount equal to a
percentage of the Company's Net Cash Flow determined  pursuant to Section 5.4(a)
of the Amended and Restated Limited Liability Company Agreement;

     (c) shall, to the extent  permitted  under the Senior Loan Documents,  upon
the occurrence of an Early Liquidation  Event, repay each and every Note and the
Make Whole Amount;

     (d) from and after the Senior Term Repayment Date, shall,  immediately upon
any acceleration of the Final Maturity Date of the Notes pursuant to Section 11,
repay each and every Note.  Except as  otherwise  provided in this  Section 7.2,
each  prepayment of the Notes made in accordance  with this Section 7.2 shall be
applied,  to the extent of such payment,  in the following  order: (1) first, to
the  payment of accrued  interest on the Notes;  (2)  second,  to the payment of
accrued  interest on the outstanding PIK Notes in the inverse order of the dates
of the issuance of the PIK Notes;  (3) third, to the payment of principal on the
Notes in the  inverse  order of the  dates of the  issuance  of the  Notes;  (4)
fourth, in the event of an Early  Liquidation  Event, to the payment of the Make
Whole  Amount,  if any; and (5) fifth,  to the payment of all other  obligations
owing to you under this  Agreement.  The parties hereto agree,  that even if the
outstanding  principal  amount of the Notes has been  repaid in full,  the Notes
will continue to be  outstanding  until the earlier of (i) December 22, 2006 and
(ii) the date  the  Make  Whole  Amount  has  been  paid in  full.  The  Company
acknowledges,  and the parties hereto agree,  that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically  provided for) and that the provision for payment
of a  Make-Whole  Amount by the Company in the event that the Notes are prepaid,
is intended to provide compensation for the deprivation of such right under such
circumstances.

                                       7
<PAGE>

7.3.  Maturity; Surrender, etc.

           In the case of each  prepayment of Notes  pursuant to this Section 7,
the principal  amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such  prepayment,  together  with interest on such
principal amount accrued to such date and the applicable  Make-Whole  Amount, if
any, but only in the event of an Early  Liquidation  Event.  From and after such
date, unless the Company shall fail to pay such principal amount when so due and
payable, together with the interest and Make-Whole Amount, if any, as aforesaid,
interest  on such  principal  amount  shall  cease to  accrue.  Any Note paid or
prepaid in full shall be  surrendered to the Company and cancelled and shall not
be reissued, and no Note shall be issued in lieu of any prepaid principal amount
of any Note.

8.    AFFIRMATIVE COVENANTS.

           The  Company  covenants  that  so  long  as  any  of  the  Notes  are
outstanding:

8.1.  Compliance with Law.

           The Company  will comply with all laws,  ordinances  or  governmental
rules or  regulations  to which it is subject  and will  obtain and  maintain in
effect all licenses,  certificates,  permits,  franchises and other governmental
authorizations necessary to the ownership of its properties or to the conduct of
its business, in each case to the extent necessary to ensure that non-compliance
with such laws,  ordinances or governmental  rules or regulations or failures to
obtain or maintain in effect such licenses,  certificates,  permits,  franchises
and  other  governmental  authorizations  could  not,  individually  or  in  the
aggregate, reasonably be expected to have a Material Adverse Effect.

8.2.  Legal Existence, etc.

           The  Company  will at all times  preserve  and keep in full force and
effect its limited  liability company existence and all rights and franchises of
the  Company  and its  Subsidiaries  unless,  in the good faith  judgment of the
Company,  the  termination  of or failure to preserve and keep in full force and
effect such limited liability company  existence,  right or franchise could not,
individually or in the aggregate, have a Material Adverse Effect.

9.    NEGATIVE COVENANTS.

           The  Company  covenants  that  so  long  as  any  of  the  Notes  are
outstanding:

9.1.  Use of Proceeds.

           The Company will not use the proceeds of the Subordinated Notes other
than as permitted pursuant to the Senior Credit Facilities.

9.2.  Merger, Consolidation, etc.

           The  Company  shall  not  consolidate  with or merge  with any  other
corporation or convey,  transfer or lease  substantially  all of its assets in a
single transaction or series of

                                       8
<PAGE>

transactions  to any Person unless (a) the Company is the  survivor,  or (b) the
surviving Person assumes all obligations of the Company under this Agreement.

10. REMEDIES ON DEFAULT, ETC.

10.1. Acceleration.

     (a)  If  an  Event  of  Default   described  in  Section  5(a)(ii)  of  the
Subordinated   Note  has  occurred,   all  the  Notes  then  outstanding   shall
automatically become immediately due and payable.

     (b) If any other  Event of Default  has  occurred  and is  continuing,  any
holder or holders of more than 50% in principal  amount of the Notes at the time
outstanding may at any time at its or their option,  by notice or notices to the
Company,  declare  all the Notes  then  outstanding  to be  immediately  due and
payable.

     (c)  If  any  Event  of  Default   described  in  Section  5(a)(i)  of  the
Subordinated Note has occurred and is continuing, any holder or holders of Notes
at the time  outstanding  affected by such Event of Default may at any time,  at
its or their option, by notice or notices to the Company,  declare all the Notes
held by it or them to be immediately due and payable.

           Upon any Notes  becoming  due and payable  under this  Section  10.1,
whether  automatically  or by declaration,  such Notes will forthwith mature and
the entire unpaid  principal  amount of such Notes,  plus all accrued and unpaid
interest  thereon,  shall all be immediately due and payable,  in each and every
case without  presentment,  demand,  protest or further notice, all of which are
hereby waived.

10.2. Other Remedies.

           If any Default or Event of Default has  occurred  and is  continuing,
and  irrespective  of  whether  any Notes  have  become  or have  been  declared
immediately  due and payable under  Section 10.1,  the holder of any Note at the
time outstanding may proceed to protect and enforce the rights of such holder by
an action at law, suit in equity or other  appropriate  proceeding,  whether for
the specific  performance of any agreement  contained  herein or in any Note, or
for an injunction against a violation of any of the terms hereof or thereof,  or
in aid of the  exercise  of any power  granted  hereby or  thereby  or by law or
otherwise.

10.3. Rescission.

           At any time  after  any  Notes  have been  declared  due and  payable
pursuant to clause (b) or (c) of Section 10.1,  the holders of not less than 50%
in  principal  amount of the Notes then  outstanding,  by written  notice to the
Company,  may rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue  interest on the Notes,  all  principal  of any
Notes  that are due and  payable  and are  unpaid  other  than by reason of such
declaration,  and all  interest  on such  overdue  principal,  (b) all Events of
Default and  Defaults,  other than  non-payment  of amounts that have become due
solely by  reason  of such  declaration,  have  been  cured or have been  waived
pursuant to Section  15, and (c) no judgment or decree has been  entered for the
payment of any monies due pursuant hereto or to the Notes. No rescission

                                       9
<PAGE>

and  annulment  under this Section 10.3 will extend to or affect any  subsequent
Event of Default or Default or impair any right consequent thereon.

10.4. No Waivers or Election of Remedies, Expenses, etc.

           No course of  dealing  and no delay on the part of any  holder of any
Note in exercising any right,  power or remedy shall operate as a waiver thereof
or otherwise prejudice such holder's rights, powers or remedies. No right, power
or remedy  conferred by this  Agreement  or by any Note upon any holder  thereof
shall be  exclusive of any other  right,  power or remedy  referred to herein or
therein  or now or  hereafter  available  at  law,  in  equity,  by  statute  or
otherwise. Without limiting the obligations of the Company under Section 13, the
Company  will pay to the holder of each Note on demand  such  further  amount as
shall be sufficient  to cover all costs and expenses of such holder  incurred in
any  enforcement  or  collection  under  this  Section  10,  including,  without
limitation, reasonable attorneys' fees, expenses and disbursements.

11. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

11.1. Registration of Notes.

           The Company shall keep at its principal  executive  office a register
for the  registration  and  registration  of  transfers  of Notes.  The name and
address of each holder of one or more Notes,  each transfer thereof and the name
and address of each  transferee of one or more Notes shall be registered in such
register.  Prior to due presentment for registration of transfer,  the Person in
whose name any Note shall be registered shall be deemed and treated as the owner
and  holder  thereof  for all  purposes  hereof,  and the  Company  shall not be
affected by any notice or knowledge to the  contrary.  The Company shall give to
any holder of a Note that is an  Institutional  Investor  promptly  upon request
therefor,  a  complete  and  correct  copy of the  names  and  addresses  of all
registered holders of Notes.

11.2. Transfer and Exchange of Notes.

           Upon surrender of any Note at the principal  executive  office of the
Company for registration of transfer or exchange (and in the case of a surrender
for  registration  of  transfer,  duly  endorsed  or  accompanied  by a  written
instrument of transfer duly  executed by the  registered  holder of such Note or
his  attorney  duly  authorized  in writing and  accompanied  by the address for
notices of each  transferee  of such Note or part  thereof),  the Company  shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor,  in an
aggregate  principal  amount  equal  to  the  unpaid  principal  amount  of  the
surrendered  Note.  Any  transfer  of all or a portion of the Notes must be made
simultaneously  with,  and in proportion  to, a transfer of a Class A Membership
Interests in the Company.  Each such new Note shall be payable to such Person as
such  holder may request  and shall be  substantially  in the form of Exhibit 1.
Each  such new Note  shall be  dated  and bear  interest  from the date to which
interest shall have been paid on the  surrendered  Note or dated the date of the
surrendered  Note if no interest  shall have been paid thereon.  The Company may
require  payment  of a sum  sufficient  to cover any  stamp tax or  governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be

                                       10
<PAGE>

transferred in denominations  of less than $100,000,  provided that if necessary
to enable the  registration  of  transfer  by a holder of its entire  holding of
Notes, one Note may be in a denomination of less than $100,000.  Any transferee,
by its acceptance of a Note registered in its name (or the name of its nominee),
shall be deemed to have made the representation set forth in Section 6.2.

11.3. Replacement of Notes.

           Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss,  theft,  destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor,  notice from
such Institutional Investor of such ownership and such loss, theft,  destruction
or mutilation), and

     (a) in the case of loss,  theft or  destruction,  of  indemnity  reasonably
satisfactory to it (provided that if the holder of such Note is, or is a nominee
for, an original  Purchaser or another holder of a Note with a minimum net worth
of at least  $100,000,000,  such Person's own  unsecured  agreement of indemnity
shall be deemed to be satisfactory), or

     (b) in the case of mutilation, upon surrender and cancellation thereof,

the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost,  stolen,  destroyed or mutilated  Note if no interest shall have been paid
thereon.

12.   PAYMENTS ON NOTES.

12.1. Home Office Payment.

           So long as you or your nominee  shall be the holder of any Note,  the
Company will pay all sums  becoming due on such Note for  principal,  Make-Whole
Amount, if any, and interest by the method and at the address specified for such
purpose  below your name in Schedule A, or by such other method or at such other
address as you shall have from time to time  specified to the Company in writing
for such  purpose,  without the  presentation  or  surrender of such Note or the
making of any notation thereon,  except that upon written request of the Company
made  concurrently  with or reasonably  promptly  after payment or prepayment in
full of any Note,  you shall  surrender such Note for  cancellation,  reasonably
promptly  after any such  request,  to the Company at the address  specified  in
Schedule  A. Prior to any sale or other  disposition  of any Note held by you or
your nominee you will, at your election,  either  endorse  thereon the amount of
principal paid thereon and the last date to which interest has been paid thereon
or  surrender  such  Note to the  Company  in  exchange  for a new Note or Notes
pursuant to Section  11.2.  The Company will afford the benefits of this Section
12.1 to any Institutional  Investor that is the direct or indirect transferee of
any  Note  purchased  by you  under  this  Agreement  and that has made the same
agreement relating to such Note as you have made in this Section 12.1.

                                       11
<PAGE>

13.   SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

           All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent  holder of a Note,  regardless of
any investigation made at any time by or on behalf of you or any other holder of
a  Note.  All  statements  contained  in any  certificate  or  other  instrument
delivered  by or on behalf of the Company  pursuant to this  Agreement  shall be
deemed  representations  and  warranties  of the Company  under this  Agreement.
Subject to the  preceding  sentence,  this  Agreement  and the Notes  embody the
entire agreement and understanding between you and the Company and supersede all
prior agreements and understandings relating to the subject matter hereof.

14.   AMENDMENT AND WAIVER.

14.1. Requirements.

           This  Agreement and the Notes may be amended,  and the  observance of
any  term  hereof  or of  the  Notes  may be  waived  (either  retroactively  or
prospectively),  with (and only with) the written consent of the Company and the
Required  Holders,  except  that  (a)  no  amendment  or  waiver  of  any of the
provisions  of  Section  5 or 6  hereof,  or any  defined  term  (as it is  used
therein), will be effective as to you unless consented to by you in writing, and
(b) no such amendment or waiver may,  without the written  consent of the holder
of each  Note at the time  outstanding  affected  thereby,  (i)  subject  to the
provisions  of Section 11 relating to  acceleration  or  rescission,  change the
amount or time of any  prepayment or payment of principal of, or reduce the rate
or change the time of payment or method of  computation  of  interest  or of the
Make-Whole  Amount,  if any, on, the Notes,  (ii) change the  percentage  of the
principal  amount of the Notes the  holders of which are  required to consent to
any such amendment or waiver, or (iii) amend any of Sections 8, 10, or 14.

14.2. Solicitation of Holders of Notes.

     (a)  Solicitation.  The  Company  will  provide  each  holder  of the Notes
(irrespective  of  the  amount  of  Notes  then  owned  by it)  with  sufficient
information,  sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and  considered  decision with respect to
any proposed  amendment,  waiver or consent in respect of any of the  provisions
hereof or of the Notes.  The Company will  deliver  executed or true and correct
copies of each amendment,  waiver or consent effected pursuant to the provisions
of this Section 16 to each holder of outstanding  Notes  promptly  following the
date on which it is  executed  and  delivered  by, or  receives  the  consent or
approval of, the requisite holders of Notes.

     (b) Payment. The Company will not directly or indirectly pay or cause to be
paid any  remuneration,  whether by way of supplemental or additional  interest,
fee or otherwise, or grant any security, to any holder of Notes as consideration
for or as an  inducement  to the  entering  into by any  holder  of Notes or any
waiver or  amendment  of any of the  terms and  provisions  hereof  unless  such
remuneration is concurrently paid, or security is concurrently

                                       12
<PAGE>

granted,  on the same terms,  ratably to each  holder of Notes then  outstanding
even if such holder did not consent to such waiver or amendment.

14.3. Binding Effect, etc.

           Any  amendment or waiver  consented to as provided in this Section 14
applies  equally to all holders of Notes and is binding  upon them and upon each
future  holder of any Note and upon the Company  without  regard to whether such
Note has been marked to indicate such amendment or waiver.  No such amendment or
waiver will extend to or affect any obligation,  covenant, agreement, Default or
Event of Default not expressly  amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note nor
any delay in exercising any rights  hereunder or under any Note shall operate as
a waiver of any  rights of any  holder of such Note.  As used  herein,  the term
"this Agreement" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.

14.4. Notes held by Company, etc.

           Solely for the  purpose of  determining  whether  the  holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement  or the Notes,  or have  directed  the  taking of any action  provided
herein  or in the  Notes to be taken  upon the  direction  of the  holders  of a
specified   percentage  of  the  aggregate   principal   amount  of  Notes  then
outstanding,  Notes  directly or  indirectly  owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.

15.   NOTICES.

           All notices and  communications  provided for  hereunder  shall be in
writing  and  sent  (a) by  telecopy  if the  sender  on the  same  day  sends a
confirming  copy of such  notice  by a  recognized  overnight  delivery  service
(charges  prepaid),  or (b) by registered or certified  mail with return receipt
requested (postage prepaid),  or (c) by a recognized  overnight delivery service
(with charges prepaid). Any such notice must be sent:

               (i) if to  you  or  your  nominee,  to  you or it at the  address
          specified  for such  communications  in  Schedule  A, or at such other
          address as you or it shall have specified to the Company in writing,

               (ii) if to any other  holder of any Note,  to such holder at such
          address as such other  holder  shall have  specified to the Company in
          writing, or

               (iii) if to the Company, to 5901 N. Western,  Suite 200, Oklahoma
          City,  Oklahoma  73118,  or at such other address as the Company shall
          have specified to the holder of each Note in writing.

Notices under this Section 15 will be deemed given only when actually received.

                                       13
<PAGE>

16.   REPRODUCTION OF DOCUMENTS.

           This Agreement and all documents relating thereto, including, without
limitation,  (a)  consents,  waivers and  modifications  that may  hereafter  be
executed,  (b)  documents  received  by you at the  Closing  (except  the  Notes
themselves),  and (c) certificates and other information previously or hereafter
furnished to you, may be  reproduced  by you by any  photographic,  photostatic,
microfilm,  microcard,  miniature  photographic or other similar process and you
may  destroy  any  original  document  so  reproduced.  The  Company  agrees and
stipulates   that,  to  the  extent   permitted  by  applicable  law,  any  such
reproduction  shall be  admissible  in  evidence as the  original  itself in any
judicial  or  administrative  proceeding  (whether  or not  the  original  is in
existence  and whether or not such  reproduction  was made by you in the regular
course of business) and any  enlargement,  facsimile or further  reproduction of
such  reproduction  shall  likewise be admissible  in evidence.  This Section 16
shall not prohibit the Company or any other holder of Notes from  contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.

17.   MISCELLANEOUS.

17.1. Successors and Assigns.

           All covenants and other agreements  contained in this Agreement by or
on behalf of any of the  parties  hereto  bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.

17.2. Payments Due on Non-Business Days.

           Anything   in  this   Agreement   or  the   Notes  to  the   contrary
notwithstanding, any payment of principal of or Make-whole Amount or interest on
any Note that is due on a date other  than a  Business  Day shall be made on the
next  succeeding  Business Day without  including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.

17.3. Severability.

           Any provision of this Agreement  that is prohibited or  unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such  prohibition  or  unenforceability  without  invalidating  the remaining
provisions  hereof,  and  any  such  prohibition  or   unenforceability  in  any
jurisdiction  shall (to the full  extent  permitted  by law) not  invalidate  or
render unenforceable such provision in any other jurisdiction.

17.4. Construction.

           Each covenant  contained  herein shall be construed  (absent  express
provision to the contrary) as being independent of each other covenant contained
herein,  so that  compliance  with any one  covenant  shall not (absent  such an
express  contrary  provision)  be  deemed to  excuse  compliance  with any other
covenant. Where any provision herein refers to action to be taken by

                                       14
<PAGE>

any Person, or which such Person is prohibited from taking, such provision shall
be  applicable  whether  such  action is taken  directly or  indirectly  by such
Person.

17.5. Counterparts.

           This Agreement may be executed in any number of counterparts, each of
which  shall be an  original  but all of which  together  shall  constitute  one
instrument.  Each  counterpart  may consist of a number of copies  hereof,  each
signed by less than all, but together signed by all, of the parties hereto.

17.6. Governing Law.

           This  Agreement and the Notes shall be construed in accordance  with,
and this  Agreement and the Notes and all matters  arising out of or relating in
any way  whatsoever  (whether in contract,  tort or otherwise) to this Agreement
and the Notes shall be governed by, the law of the State of New York.

                                   * * * * *

           If you are in agreement with the  foregoing,  please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company,  whereupon the foregoing shall become a binding  agreement  between you
and the Company.

                                       Very truly yours,

                                       QUEST CHEROKEE, LLC

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

The foregoing is hereby agreed to as
of the date thereof.

CHEROKEE ENERGY PARTNERS LLC

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

                                       15
<PAGE>

                                                                      SCHEDULE A
                                                                      ----------

                       INFORMATION RELATING TO PURCHASERS

                                                    Principal Amount of
        Name and Address of Purchaser              Notes to be Purchased
        -----------------------------              ---------------------

CHEROKEE ENERGY PARTNERS LLC                           $51,000,000.00

(1) All   payments  by  wire   transfer  of
    immediately available funds to:

    For ArcLight  Energy  Partners  Fund I, L.P.
    Bank:  Boston Private Bank & Trust Company
    Boston, MA
    ABA:    011-002-343
    Account Name: ArcLight Energy Partners
    Fund I, L.P.
    Account Number: 3095030

    with sufficient information to identify
    the source and  application of such funds.

(2) All notices of payments and written
    confirmations of such wire transfers:

    200 Clarendon Street, 55th Fl.
    Boston, MA 02117
    Attn:  General Counsel
    (617) 867-4698 (Fax)
    (617) 531-6316 (Ph)

(3) All other communications:

    200 Clarendon Street, 55th Fl.
    Boston, MA 02117
    Attn:  General Counsel
    (617) 867-4698 (Fax)
    (617) 531-6316 (Ph)

                               Schedule A - Page 1

<PAGE>

                                                                      SCHEDULE B
                                                                      ----------

                                  DEFINED TERMS

           As used herein, the following terms have the respective  meanings set
forth below or set forth in the Section hereof following such term:

           "Affiliate"  means, at any time, and with respect to any Person,  any
other  Person  that at such time  directly  or  indirectly  through  one or more
intermediaries  Controls,  or is Controlled by, or is under common Control with,
such first Person.  As used in this definition,  "Control" means the possession,
directly or  indirectly,  of the power to direct or cause the  direction  of the
management  and policies of a Person,  whether  through the  ownership of voting
securities,  by contract or  otherwise.  Unless the  context  otherwise  clearly
requires,  any reference to an "Affiliate" is a reference to an Affiliate of the
Company.

           "Amended and Restated LLC  Agreement"  means the Amended and Restated
Limited  Liability Company Agreement of the Company attached as Exhibit A to the
Membership Interest Purchase Agreement.

           "Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York, New York are required or authorized to be
closed.

           "Closing" is defined in Section 3.

           "Closing  Transactions" means the closing of each of the transactions
described as "Closing Transactions" in the Senior Loan Documents (other than the
Closing under this Agreement) and the execution and delivery to Purchaser of (i)
the Guaranty by Quest,  in favor of Purchaser,  of the  obligations of the Quest
Subsidiaries under the Membership Interest Purchase  Agreement,  (ii) the Pledge
Agreement  pledging  to  Purchaser,  all  of the  Quest  Subsidiaries'  Class  B
Membership  Interests  in the  Company  to secure the  obligations  of the Quest
Subsidiaries  under the Membership  Interest Purchase  Agreement;  and (iii) the
Non-Competition and Non-Disclosure  Agreement among the Company,  the Purchaser,
Quest and the Quest Subsidiaries.

           "Company" means Quest  Cherokee,  LLC, a Delaware  limited  liability
company.

           "Default"  means an event or condition the occurrence or existence of
which would,  with the lapse of time or the giving of notice or both,  become an
Event of Default.

           "Distribution  Date" is  defined  in the  Amended  and  Restated  LLC
Agreement.

           "Early  Liquidation Event" is defined in the Amended and Restated LLC
Agreement.

           "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations  promulgated thereunder
from time to time in effect.

           "Event of Default" is defined in Section 5 of the Subordinated Note.

                           Schedule B - Page 1

<PAGE>

           "Exchange Act" means the Securities Exchange Act of 1934, as amended.

           "Final  Maturity  Date" means the later of (i)  December 22, 2008 and
(ii) the final maturity date for the Notes permitted under the Term Facility, or
such later date as extended by the Company pursuant to Section 7.2.

           "Governmental Authority" means

           (a)  the government of

                (i)  the  United  States  of  America  or  any  State  or  other
           political subdivision thereof, or

               (ii)  any jurisdiction  in  which the Company or  any  Subsidiary
           conducts  all  or  any  part  of  its  business,  or  which   asserts
           jurisdiction over any properties of the Company or any Subsidiary, or

           (b)  any   entity   exercising   executive,   legislative,  judicial,
           regulatory or administrative functions of, or pertaining to, any such
           government.

           "holder"  means,  with respect to any Note,  the Person in whose name
such Note is  registered in the register  maintained by the Company  pursuant to
Section 11.1.

           "Institutional  Investor" means (a) any original  purchaser of a Note
and (b) any bank, trust company, savings and loan association or other financial
institution,  any pension plan, any investment  company,  any insurance company,
any broker or dealer,  or any other  similar  financial  institution  or entity,
regardless of legal form that has a net worth of at least $100,000,000.

           "Interest  Payment Date" means the last day of each  January,  April,
July and October of each year, commencing January 31, 2004.

           "JW"  means  J-W Gas  Gathering,  LLC,  a  Kansas  limited  liability
company.

           "Make Whole  Amount"  means an amount equal to the Make Whole Payment
(as defined in the Amended and Restated LLC Agreement).

           "Material  Adverse Effect" means a material adverse effect on (a) the
business, operations,  affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform  its  obligations  under  this  Agreement  and the Notes,  or (c) the
validity or enforceability of this Agreement or the Notes.

           "Membership  Interest  Purchase  Agreement" shall mean the Membership
Interest  Purchase  Agreement  dated as of December 22, 2003,  by and among you,
QOG, QES, STPC, PGPC, PSI, and JW.

           "Net Cash Flow" is defined in the Amended and Restated LLC Agreement.

                           Schedule B - Page 2
<PAGE>

           "Notes" mean the Subordinated Notes and the PIK Notes.

           "Officer's  Certificate"  means a certificate  of a Senior  Financial
Officer or of any other officer of the Company whose responsibilities  extend to
the subject matter of such certificate.

           "Person"  means  an  individual,  partnership,  corporation,  limited
liability  company,  association,   trust,  unincorporated  organization,  or  a
government or agency or political subdivision thereof.

           "PGPC"  means  Ponderosa  Gas  Pipeline  Company,   Inc.,  a  Kansas
corporation.

           "PIK Notes" is defined in Section 7.1(b).

           "PSI" means Producers Service, Incorporated, a Kansas corporation.

           "Purchaser" is defined in Section 1.
                                     ---------

           "QES" means Quest Energy Service, Inc., a Kansas corporation.

           "QOG" means Quest Oil & Gas Corporation, a Kansas corporation.

           "QPAM Exemption" means Prohibited  Transaction  Class Exemption 84-14
issued by the United States Department of Labor.

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

           "Quest Subsidiaries" means QES, PSI, PGPC, QOG, JW and STPC.

           "Required Holders" means, at any time, the holders of at least 50% in
principal amount of the Notes at the time  outstanding  (exclusive of Notes then
owned by the Company or any of its Affiliates).

           "Responsible  Officer"  means any Senior  Financial  Officer  and any
other officer of the Company with  responsibility  for the administration of the
relevant portion of this Agreement.

           "Securities  Act" means the  Securities  Act of 1933, as amended from
time to time.

           "Senior  Credit  Facilities"  means  the  Senior  Secured  Revolving
Credit Facility and the Term Facility.

           "Senior  Financial   Officer"  means  the  chief  financial  officer,
principal accounting officer, treasurer or comptroller of the Company.

           "Senior Loan Documents" means each of the agreements  executed by the
Company in connection with the Senior Credit Facilities.

                           Schedule B - Page 3
<PAGE>

           "Senior Secured Revolving Facility" means the $200,000,000.00  Credit
Agreement dated December 22, 2003, among the Company, the lenders party thereto,
and Bank One, NA, as administrative agent and collateral agent.

           "Senior  Term  Repayment  Date"  is  defined  in  Section  6  of  the
Subordinated Note.

           "STPC" means STP Cherokee, Inc., an Oklahoma corporation.

           "Subordinated Notes" is defined in Section 1.

           "Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests  to  enable  it or them (as a group)  ordinarily,  in the  absence  of
contingencies,  to elect a majority  of the  directors  (or  Persons  performing
similar  functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or  more  of its  Subsidiaries  or  such  Person  and  one  or  more  of its
Subsidiaries  (unless  such  partnership  can and  does  ordinarily  take  major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.

           "Term  Facility"  means the  $35,000,000.00  Credit  Agreement  dated
December 22, 2003, among the Company,  the lenders party thereto,  and Bank One,
NA, as administrative agent and collateral agent.

           "Term  Notes"  means the notes  issued by the  Company to the lenders
under the Term Facility.

           "Transaction  Documents" means each of the agreements and instruments
executed by the Company in connection with the Closing Transactions.

                           Schedule B - Page 4

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