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

DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT
AND ASSIGNMENT OF PRODUCTION
(Oil, Gas and Mineral Properties)

This instrument contains after-acquired property provisions

THE STATE OF TEXAS |     | KNOW ALL MEN BY THESE PRESENTS: COUNTY OF WOOD |

That the undersigned, ENERGYTEC, INC., a Nevada corporation, acting herein by
and through its proper officer who has heretofore been duly authorized, with its
principal office in Dallas, Texas, and the mailing address for which is 14785
Preston Road, Suite 550, Dallas, Texas 75254 (“Mortgagor”, whether one or more),
and Gladewater National Bank, the banking quarters for which are at 678 North
Main, Gladewater, Gregg County, Texas, and the mailing address for which is Post
Office Box 1749, Gladewater, Texas 75647-0027 ("Mortgagee"), hereby agree as
follows:

ARTICLE I.

GRANT

A.     Lien. Mortgagor, for valuable consideration, the receipt of which is
hereby acknowledged, and in consideration of the debt and trust hereinafter
mentioned, has granted, bargained, sold, conveyed, transferred and assigned, and
by these presents does grant, bargain, sell, convey, transfer and assign to
Redonia Harper, Trustee, whose address is Post Office Box 1749, Gladewater,
Texas 75647-0027, and his successors and substitutes in trust, as hereinafter
provided, (the "Trustee"), for the benefit of Mortgagee, the following described
property:

> Certain interest in oil, gas and mineral fee and leasehold estates in the
> property more particularly described in the schedule attached hereto, marked
> Exhibit "A" for identification, incorporated herein and made a part hereof for
> all purposes (the "Land").

B.      Security Interest. For the same consideration, Mortgagor hereby grants
to Mortgagee a continuing security interest in all improvements and all personal
property of any kind or character defined in and subject to the provisions of
the Uniform Commercial Code, including the proceeds and products from any and
all of such improvements and personal property, whether now owned and existing
or hereafter acquired or arising, and situated on any of the Land, including,
but not limited to, pipe, casing, tubing, rods, storage tanks, boilers, loading
racks, pumps, foundations, warehouses, and all other personal property and
equipment of every kind and character upon, incident, appurtenant or belonging
to and used in connection with Mortgagor's interest in the Land, including all
oil, gas and other minerals produced or to be produced to the account of
Mortgagor from the Land and all accounts receivable, general intangibles and
contract rights of Mortgagor in connection with the Land or the Leases,
hereinafter defined, and all proceeds, products, substitutions and exchanges
thereof (the Land, the Leases, hereinafter defined, and real and personal
property interests hereinabove described being the "Mortgaged Property").

C.      Assignment of Security. For the same consideration, Mortgagor hereby
grants to Mortgagee any and all rights of Mortgagor to liens and security
interests securing payment of proceeds from the sale of production from the
Mortgaged Property, including, but not limited to,

DEED OF TRUST - Page 1

those liens and security interests provided for in TEX. BUS. & COM. CODE ANN.
Sec. 9.319 (Tex. UCC) (Vernon Supp. 1988).

D.      Habendum. TO HAVE AND TO HOLD all and singular the Mortgaged Property
and all other property which, by the terms hereof, has or may hereafter become
subject to the lien and/or security interest of this Deed of Trust, Security
Agreement, Financing Statement and Assignment of Production (this "Deed of
Trust"), together with all rights, hereditaments and appurtenances in anywise
belonging to the Trustee or assigns forever.

E.      After Acquired Property. Any additional right, title or interest which
Mortgagor may hereafter acquire or become entitled to in the interests,
properties, Lands and premises aforesaid, or in the oil, gas or other minerals
in and under or produced from the Land and Leases shall inure to the benefit of
and be covered by this Deed of Trust and constitute "Mortgaged Property", the
same as if expressly described and conveyed herein.

ARTICLE II.

WARRANTIES

A.      Warranty of Title. Mortgagor hereby binds itself, its successors and
assigns, to warrant and forever defend all and singular the above described
property, rights, and interest constituting the Mortgaged Property to the
Trustee and to his assigns forever, against every person whomsoever lawfully
claiming or to claim the same or any part thereof.

B.      Additional Warranties. For the same consideration, Mortgagor, for
itself, its successors and assigns, covenants, represents and warrants that:

(1)      Authority and Enforceability. The incurring by Mortgagor of the
indebtedness secured by this Deed of Trust, the execution and delivery by
Mortgagor ENERGYTEC, INC. of the promissory note of $4,000,000.00, dated
_______________________, 2006, and the performance and observance by Mortgagor
of the terms and provisions of such promissory note and this Deed of Trust have
been duly authorized by any necessary corporate proceedings, and will not
contravene any requirement of law, or any provision of Mortgagor's charter or
by-laws, or result in the breach or termination of, or constitute a default
under, any indenture or other agreement or instrument to which Mortgagor is a
party or by which it or any of its property may be bound or affected.

(2)      Additional Authority. Mortgagor is the lawful owner of the Mortgaged
Property and has good right and authority to pledge, mortgage, assign, sell and
convey the same.

(3)      Interests in Mortgaged Property. Mortgagor's interest in the Mortgaged
Property, as set forth in Exhibit "A" hereto, are true and correct.

(4)      Leases in Effect. All of the leases constituting all or part of the
Mortgaged Property (the "Leases") are in full force and effect and all
covenants, express or implied, in respect thereof, or of any assignment there-of
which may affect the validity of any of the Leases, have been performed insofar
as the Leases pertain to the Land.

(5)      Interests Free of Liens. Mortgagor's interest in the Leases is free and
clear of all liens, mortgages, oil payments, or other burdens or encumbrances
and all gross production taxes and other taxes as to which non-payment could
result in a lien against any of the Mortgaged Property have been paid, except as
specifically set forth in Exhibit "A" hereto.

DEED OF TRUST - Page 2

(6)      Compliance with Laws. Mortgagor and the Mortgaged Property are in
compliance with all applicable laws and regulations, including, without
limitation, those relating to any flammable, explosives, radioactive materials,
hazardous wastes, friable asbestos or any material containing asbestos, toxic
substances or related materials, including, without limitation, substances
defined as "hazardous substances", "hazardous materials" or "toxic substances"
in the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. Sec. 9601, et. seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Sec. 1801, et. seq., or the Resource Conservation
and Recovery Act, 42 U.S.C. Sec. 6901, et seq. ("Hazardous Materials").

(7)       Gas Contracts. Except as set forth under the heading for this
provision in the schedule attached hereto, marked Exhibit "B" for
identification, incorporated herein and made a part hereof for all purposes,
Mortgagor (i) is not obligated in any material respect by virtue of any
prepayment made under any contract containing a "take or pay" or "prepayment"
provision, or under any similar agreement to deliver hydrocarbons produced from
or allocated to any of the Mortgaged Property at some future date without
receiving full payment therefor at the time of delivery and (ii) has not
produced gas, in any material amount, subject to, and neither Mortgagor nor any
of the Mortgaged Property is subject to, balancing rights of third parties or
subject to balancing duties under governmental requirements, except as to such
matters for which Mortgagor has established monetary reserves adequate in amount
to satisfy such obligations, and has segregated such reserves from other
accounts.

(8)      Refunds. Except as set forth under the heading for this provision in
the schedule attached hereto, marked Exhibit "B" for identification,
incorporated herein and made a part hereof for all purposes, there exist no
orders of, or proceedings pending before, or other governmental requirements of,
the Federal Energy Regulatory Commission, the Texas Railroad Commission or any
other similar state of federal regulatory body or governmental authority which
could result in Mortgagor being required to refund any material portion of the
proceeds received or to be received from the sale of hydrocarbons constituting
part of the Mortgaged Property.

ARTICLE III.

INDEBTEDNESS SECURED

This conveyance is made, IN TRUST, HOWEVER, to secure and enforce the payment of
the following indebtedness, obligations and liabilities:

(a)     The promissory note dated ___________________, 2006, executed by
Mortgagor ENERGYTEC, INC. to the order of Mortgagee in the principal sum of FOUR
MILLION AND NO/100 DOLLARS ($4,000,000.00) bearing interest and payable (in
installments) as therein provided, and containing the usual provisions in notes
of this character, together with any and all renewals, extensions,
rearrangements and increases thereof; (b) all additional indebtedness of
Mortgagor to Mortgagee arising pursuant to the provisions of this deed of trust;
(c) all loans and advances which Mortgagee may hereafter make to the Mortgagor;
(d) all other and additional debts, obligations, and liabilities of every kind
and character of Mortgagee to Mortgagor, now or hereafter existing, regardless
of whether such debts, obligations and liabilities be direct or indirect,
primary or secondary, joint or several, or joint and several, fixed or
contingent, and regardless of whether such present or future obligations are
payable to, or be or have been in favor of some other person or have been
acquired by Mortgagee in a transaction with one other than Mortgagor, including
but not limited to attorneys’ fees and other expenses of collection and
enforcement of the Note, this deed of trust and other secured indebtedness; (e)
performance of all obligations of Mortgagor to Mortgagee hereunder, under the
Note, under any other instrument now or hereafter securing any indebtedness of
Mortgagor to Mortgagee and under any agreement arising from or relating to any
indebtedness of Mortgagor to Mortgagee; and (f) any and all renewals,
extensions, changes in form reamortizations and other modifications of such
debts, obligations and liabilities, or any part thereof.

DEED OF TRUST - Page 3

ARTICLE IV.

COVENANTS OF MORTGAGOR

In consideration of the Indebtedness hereinabove described, Mortgagor, for
itself, its successors and assigns, covenants and agrees as follows:

A.      Title Curative. Mortgagor will proceed with reasonable diligence to
correct any defect in the title to the Mortgaged Property should any such defect
be found to exist after the execution and delivery of this Deed of Trust; and in
this connection, should it be found, after the execution and delivery of this
Deed of Trust, that there exists upon the Mortgaged Property any lien or
encumbrance equal or superior in rank to the liens and security interests
created by this Deed of Trust, or should any such lien or encumbrance hereafter
arise, Mortgagor will promptly discharge and remove the same from the Mortgaged
Property.

B.      Further Assurances. Upon request of Mortgagee, Mortgagor will promptly
correct any defect which may be discovered after the execution and delivery of
this Deed of Trust in any other documents executed in connection herewith, in
the execution or acknowledgment hereof or thereof, or in the description of the
Mortgaged Property, and will execute, acknowledge, and deliver such division
orders, transfer orders and other assurances and instruments as shall, in the
opinion of Mortgagee, be necessary or proper to convey and assign to the Trustee
all of the Mortgaged Property herein conveyed or assigned, or intended to be so.

C.      Maintenance of Leases. Mortgagor will keep and continue all Leases,
estates and interests herein described and contracts and agreements relating
thereto in full force and effect in accordance with the terms thereof and will
not permit the same to lapse or otherwise become impaired for failure to comply
with the obligations thereof, whether express or implied. In this connection,
Mortgagor shall not release any of the Leases without the prior written consent
of Mortgagee.

D.      Maintenance of Equipment. Mortgagor will keep and maintain all
improvements and all personal property and equipment now or hereafter situated
on the Land and constituting a portion o the Mortgaged Property and used or
obtained in connection therewith in good state of repair and condition, ordinary
wear and tear excepted, and will not tear down or remove the same or permit the
same to be torn down or removed without the prior consent of Mortgagee, except
in the usual course of operations as might be required for replacement when
otherwise in compliance with this Deed of Trust.

E.      Notification of Loss. Mortgagor will notify Mortgagee of the
destruction, loss, termination or acquisition of any Mortgaged Property within
three business days thereof.

F.      Pooling or Unitization. Mortgagor will not, without the prior written
consent of Mortgagee, pool or unitize all or any part of the Mortgaged Property
where the pooling or unitization would result in the diminution of Mortgagor's
net revenue interest in production from the pooled or unitized lands
attributable to the Mortgaged Property constituting a portion of such pooled or
unitized lands. Immediately after the formation of any pool or unit in
accordance herewith, Mortgagor will furnish to Mortgagee a conformed copy of the
pooling agreement, declaration of pooling, or other instrument creating the
pooling or unit. The interest of Mortgagor included in any pool or unit
attributable to the Mortgaged Property or any part thereof shall become a part
of the Mortgaged Property and shall be subject to liens and security interests
hereof in the same manner and with the same effect as though the pool or unit
and the interest of Mortgagor therein were specifically described in Exhibit "A"
hereto. In the event any proceedings of any governmental body which could result
in pooling or unitizing all or any part of the Mortgaged Property are commenced,
Mortgagor shall give immediate written notice thereof to Mortgagee.

G.      Payment of Lienable Claims. Mortgagor will pay all taxes now or
hereafter to accrue against any of the Mortgaged Property and all other taxes or
assessments, general or special, lawfully

DEED OF TRUST - Page 4

levied against it on such Mortgaged Property which might become a lien thereon
before such taxes become delinquent; and it will during the life of this Deed of
Trust keep the Mortgaged Property, and each and every part thereof, free, clear
and discharged from all liens, charges, encumbrances, or assessments that might
become superior, coordinate or subordinate to the liens or security interests of
this Deed of Trust.

H.      Maintenance of Workmen's Compensation Insurance. Mortgagor will at all
times maintain workmen's compensation insurance with a responsible insurance
company where required by, and in accordance with, the laws of the state in
which the Mortgaged Property is located.

I.      Mortgagee's Payment of Lienable Claims. In the event Mortgagor shall
fail or neglect to pay any taxes, general or special, or shall fail or neglect
to relieve the Mortgaged Property from any lien which might become superior or
equal to the lien of this Deed of Trust, or fail to carry such workmen's
compensation or other insurance, the Trustee, at his option, or Mortgagee, at
its option, may pay such taxes, liens, charges or encumbrances, or any part
thereof, or effect such workmen's compensation insurance, and Mortgagor will
promptly reimburse Trustee or Mortgagee, as the case may be, therefor; and any
and all such sums so paid hereunder shall be paid by Mortgagor upon demand at
Mortgagee's principal offices, and shall constitute a part of the Indebtedness.

J.      Operation of Mortgaged Property. Mortgagor will operate or, to the
extent that the right of operation is vested in others, will exercise its best
efforts to require the operator to operate the Mortgaged Property and all wells
drilled thereon and that may hereafter be drilled thereon, continuously and in
good workmanlike manner in accordance with the best usage of the field and in
accordance with all laws of the State in which the Mortgaged Property is
situated and the United States of America, as well as all rules, regulations,
and laws of any governmental agency having jurisdiction to regulate the manner
in which the operation of the Mortgaged Property shall be carried on, and will
comply with all terms and conditions of the Leases it now holds, or any
assignment or contract obligating Mortgagor in any way with respect to the
Mortgaged Property; but nothing herein shall be construed to empower Mortgagor
to bind the Trustee or Mortgagee to any contract obligation, or render the
Trustee or Mortgagee in any way responsible or liable for bills or obligations
incurred by Mortgagor.

K.      Maintenance of Liability and Casualty Insurance. Mortgagor will carry
with standard insurance companies satisfactory to Mortgagee or holder of the
Indebtedness, public liability and property damage insurance, as well as
insurance against loss or damage to the Mortgaged Property by fire, lightning,
tornado and explosion, all in amounts satisfactory to Mortgagee; all such
policies shall be payable to Mortgagee, and the policies evidencing the same or
acceptable certificates thereof shall be held by Mortgagee. Mortgagee shall have
the right to collect, and Mortgagor hereby assigns to Mortgagee, any and all
monies that may become payable under any policies of insurance by reason of
damage, loss or destruction of the Mortgaged Property or any part thereof, and
Mortgagee shall apply all such sums or any part thereof, at its election, toward
the payment of the Indebtedness, whether the same be then due or not,
application to be made first to interest and then to principal, and shall
deliver to Mortgagor the balance, if any, after any application has been made.

L.       Compliance with Operating Agreements. Mortgagor agrees to promptly pay
all bills for labor and materials incurred in the operation of the Mortgaged
Property and will promptly pay its share of all costs and expenses incurred
under any joint operating agreement affecting the Mortgaged Property or any
portion thereof; will furnish Mortgagee, as and when requested, full information
as to the status of any joint account maintained with others under any such
operating agreement; will not take any action to incur any liability or lien
thereunder; and will not enter into any new operating agreement or amendment of
existing operating agreement affecting the Mortgaged Property without prior
written consent of Mortgagee. Furthermore, Mortgagor will not consent or agree
to participate in any proposed operation under any presently existing operating
agreement affecting the Mortgaged Property unless Mortgagor obtains the prior
written consent of Mortgagee and deposits either with the operator, where
Mortgagor is a non-operator, or with Mortgagee, where Mortgagor is a
non-operator or operator, Mortgagor's share of the estimated cost of the
proposed operation prior to electing to participate in the operation. To the
extent that Mortgagor is unable to consent to any

DEED OF TRUST - Page 5

proposed operation with respect to any of the Mortgaged Property, prior to
electing not to participate in the proposed operation, Mortgagor will use its
best efforts, to the extent practicable once it is determined that it cannot so
participate and to the extent allowed to do so under the relevant operating
agreement or other applicable contract, farmout to others acceptable to
Mortgagee, on the best terms obtainable, which terms shall be acceptable to
Mortgagee, the interest or relevant portion of the interest of Mortgagor in the
proposed operation.

M.      Access to Mortgaged Property. Mortgagor will permit Mortgagee and its
accredited agents, representatives, attorneys and employees at all times to go
upon, examine, inspect and remain on the Mortgaged Property, and to go upon the
derrick floor of any well at any time drilled or being drilled thereon, and will
furnish Mortgagee, upon request, all pertinent information regarding the
development and operation of the Mortgaged Property.

N.      Evidence of Title. Promptly upon receipt of a request from Mortgagee,
Mortgagor will furnish and deliver, a Title Opinion prepared by competent legal
counsel covering title to the real property herein mortgaged from the
Sovereignty of the Soil to the latest practicable date, when taken together with
abstracts and/or Title Opinions previously furnished to Mortgagee. Should
Mortgagor fail to furnish such Title Opinion upon such request, Mortgagee may
obtain such Title Opinion, and any and all costs incurred thereby shall be
payable by Mortgagor to Mortgagee upon demand at Mortgagee's principal offices.
The Title Opinion shall be and constitute a part of the Mortgaged Property as
defined above.

O.      Notification of Legal Proceedings. Mortgagor will promptly notify
Mortgagee or other holder or holders of the Indebtedness, in writing, of the
commencement of any legal proceedings affecting the Mortgaged Property or any
part thereof, and will take such action as may be necessary to preserve its and
Mortgagee's rights affected thereby; and should Mortgagor fail or refuse to take
any such action, Mortgagee may at its election take such action on behalf and in
the name of Mortgagor and at Mortgagor's cost and expense.

P.       Maintenance of Existence. If Mortgagor, is a corporation, it will
maintain its corporate existence and will maintain and procure all necessary
corporate franchise and permits to the end that Mortgagor shall be and continue
to be a corporation in good standing in the state of its incorporation and in
the state wherein the Mortgaged Property is located, with full power and
authority to own and operate all of the Mortgaged Property as contemplated
herein until this Deed of Trust shall have been fully satisfied.

Q.       Waivers. Mortgagor hereby expressly waives any and all rights or
privileges of marshaling of assets, sale in inverse order of alienation,
notices, appraisements, redemption and any prerequisite to the full extent
permitted by applicable law, in the event of foreclosure of the lien or liens
and/or security interests created herein. Mortgagee at all times shall have the
right to release any part of the Mortgaged Property now or hereafter subject to
the lien or security interest of this Deed of Trust, any part the proceeds of
production or other income herein or hereafter assigned or pledged, or any other
security it now has or may hereafter have securing the Indebtedness, without
releasing any other part of the Mortgaged Property, proceeds or income, and
without affecting the liens or security interests hereof as to the part or parts
thereof not so released, or the right to receive future proceeds and income.

R.      Payment of Mortgagee's Expenses. Upon demand of Mortgagee, Mortgagor
will promptly pay all costs and expenses heretofore or hereafter incurred by
Mortgagee for legal, accounting, engineering or geological services rendered to
it in connection with the making of the initial or any future loan to Mortgagee
secured in whole or in part by the liens and security interests hereof or in the
enforcement of any of Mortgagee's rights hereunder. The obligations of Mortgagor
hereunder shall survive the non-assumption of this Deed of Trust in a case
commenced under Title 11 of the United States Code or other similar law of the
United States of America, the State of Texas or any other jurisdiction and be
binding upon Mortgagor, or a trustee, receiver, custodian or liquidator of
Mortgagor appointed in any such case.

DEED OF TRUST - Page 6

S.      Other Liens. Without prior approval and written consent of Mortgagee,
Mortgagor will not mortgage, pledge or otherwise encumber the Mortgaged Property
or any part thereof, regardless of whether the lien or encumbrance is senior,
coordinate, junior, inferior or subordinate to the lien and security interest
created hereby.

T.      Transfer or Division Orders. Upon request of Mortgagee, Mortgagor will
execute and deliver written notices of assignments to any persons, corporations
or other entities owing or which may in the future owe to Mortgagor monies or
accounts arising in connection with any of the following matters: (a) any oil,
gas or mineral production from the Mortgaged Property; (b) any gas contracts,
processing contracts or other contracts relating to the Mortgaged Property; or
(c) the operation of or production from any part of the Mortgaged Property. The
notices of assignments shall advise the third parties that all of the monies or
accounts described above have been assigned to Mortgagee, and if required by
Mortgagee, shall also require and direct that future payments thereof, including
amounts then owing and unpaid, be paid directly to Mortgagee.

U.      Effect of Violation. Any mortgage, pledge, encumbrance, unitization,
pooling, communitization or other action or instrument in violation of the
prohibitions contained in F. or S. above shall be of no force or effect against
Mortgagee.

V.      Sales of Assets or Reorganization. Without the prior written consent of
Mortgagee, Mortgagor will not sell, lease, transfer or otherwise dispose of all
or substantially all of its properties and assets, or, if Mortgagor is a
corporation, consolidate or merge into any other corporation, or permit another
corporation to merge into it.

W.      Compliance with Laws. Mortgagor will comply at all times with all
federal, state and local laws, regulations, and ordinances applicable to the
Mortgaged Property, including, without limitation, all environmental protection
and hazardous waste requirements, and in this regard:

(1)       Natural or Environmental Resources Compliance. Mortgagor will comply
with any and all applicable local, state and federal laws, ordinances, rules,
regulations and orders (a) related to any natural or environmental resource or
media located on, above, within, in the vicinity of, related to or affected by
the Mortgaged Property, any property in which Mortgagee has a mortgage, security
or other interest or any other property of Mortgagor, or (b) required for the
performance or conduct of its operations.

(2)       Notification of Hazardous Materials Inquiries. Mortgagor will
forthwith notify Mortgagee in writing of any request from any governmental
agency or other entity for information on releases of Hazardous Materials from,
affecting or related to the Mortgaged Property, any property in which Mortgagee
has a mortgage, security or other interest or any other property of Mortgagor;
notify Mortgagee of any actual, proposed or threatened testing or other
investigation by any governmental agency or other entity concerning the
environmental condition of or related to such property; provide to Mortgagee
such information as Mortgagee shall request concerning the generation, storage,
disposal, transportation or other management, if any, of any Hazardous
Materials.

(3)      Hazardous Materials Compliance and Indemnification. Mortgagor will at
all times comply fully and in a timely manner with, and will cause all
employees, agents, contractors, sub-contractors and future lessees (pursuant to
appropriate lease provisions) of Mortgagor, while such persons are acting within
the scope of their relationship with Mortgagor, to so comply with, all
applicable federal, state and local laws, regulations, guidelines, codes and
ordinances applicable to the use, generation, handling, storage, treatment,
transport and disposal of any Hazardous Materials now or hereafter located or
present on or under the Mortgaged Property, and Mortgagor indemnifies and hold
Mortgagee harmless from and against any and all claims, losses, damages,
liabilities, fines, penalties, charges, administrative and judicial proceedings
and orders, judgments, remedial actions, requirements and enforcement actions of
any kind, and all costs and

DEED OF TRUST - Page 7

expenses incurred in connection there-with (including, without limitation,
attorneys' fees and expenses), arising directly or indirectly, in whole or in
part, out of (a) the presence of any Hazardous Materials on, under or from the
Mortgaged Property, whether prior to or during the term hereof, or (b) any
activity carried on or undertaken on or off the Mortgaged Property, whether
prior to or during the term hereof, and whether by Mortgagor or any predecessor
in title or any employees, agents, contractors or subcontractors of Mortgagor or
any predecessor in title, or any third persons at any time occupying or present
on the Mortgaged Property, in connection with the handling, treatment, removal,
storage, decontaminations, cleanup, transport or disposal of any Hazardous
Materials at any time located or present on or under the Mortgaged Property,
including, without limitation, any of the foregoing arising, in whole or in
part, from negligence on the part of Mortgagee, (the foregoing indemnity being
the "Hazardous Materials Indemnity"). The Hazardous Materials Indemnity shall
further apply to any residual contamination on or under the Mortgaged Property,
or affecting any natural resources, and to any contamination of any property or
natural resources arising in connection with the generation, use, handling,
storage, transport or disposal of any Hazardous Materials, irrespective of
whether any of such activities were or will be undertaken in accordance with
applicable laws, regulations, codes and ordinances; and

(4)     Survival of Indemnification. The Hazardous Materials Indemnity shall
survive repayment of the indebtedness, provided that the claims and other
actions of any kind against Mortgagee which give rise to the Hazardous Materials
Indemnity are not barred by the applicable statute of limitations at the time
such claims or actions are instituted.

X.      Uneconomic Wells. As to any oil and/or gas well forming part of the
Mortgaged Property, should there not be, for a period in excess of three
consecutive calendar months, proceeds from the sale of production from such well
(net or productions, severance and windfall profit taxes and royalties
overriding royalties and other payments out of or measured by production) in
excess of the expense of operation of the relevant well (including, but not
limited to, operator's overhead, payments to contractors and suppliers and
annual taxes assessed on the basis of the value of the property prorated on a
monthly basis, but expressly excluding any portion of the cost of drilling or
completing the relevant well or the cost of non-routine workover or remedial
operators) then, upon receipt by Mortgagor or written notification from
Mortgagee, Mortgagor will (a) take all necessary steps to abandon the relevant
well or (b) provide from sources other than proceeds from the sale of production
attributable to the Mortgaged Property (i.e., through borrowings or contractual
commitments obtained from third parties not in violation of any provision of
this Deed of Trust) any funds required to pay Mortgagor's share of the expenses
associated with the continuing operation of such well.

Y.       Performance of Gas Contracts. Mortgagor will perform and observe in all
material respects each of the provisions of the contracts relating to the sale
of gas produced from or attributable to the Mortgaged Property to which
Mortgagor is a party of its part to be performed or observed prior to the
termination thereof and will give Mortgagee prior written notice of any change,
modification or amendment to or waiver of any of the terms or provisions of any
of such contracts or any action which will release any party from its
obligations or liabilities under any of such contracts, none of which shall be
done except in good faith and as the result of arm's length negotiations.

Z.      Transactions with Affiliates. Mortgagor will not, directly or
indirectly, enter into any sale, lease or exchange of any property or any
contract for the rendering of goods or services with respect to any of the
Mortgaged Property (including, but not limited to, operating agreements under
which Mortgagor or an affiliate serves as operator) with any affiliate of
Mortgagor other than upon fair and reasonable terms no less favorable than could
be obtained in an arm's length transaction with a person not an affiliate of
Mortgagor.

DEED OF TRUST - Page 8

ARTICLE V.

DEFEASANCE, FORECLOSURE AND OTHER REMEDIES

A.      Defeasance. Should Mortgagor make due and punctual payment of the
Indebtedness, as the same becomes due and payable, and duly observe and perform
all of the covenants, conditions and agreements herein (and in all other
agreements with Mortgagee) provided to be observed and performed by it, then the
conveyance of the Mortgaged Property shall become of no further force and
effect, and the lien and security interest hereof shall be released at the cost
and expense of Mortgagor; otherwise, it shall remain in full force and effect.

B.      Default Events, Acceleration and Exercise of Power of Sale. In case any
one or more of the following events of default shall happen:

(1)      Payment of Indebtedness. Default be made by Mortgagor in the due and
punctual payment of the Indebtedness, or any part thereof, principal or
interest, as the same becomes due and payable, whether by acceleration or
otherwise; or

(2)      Covenants and Warranties. Default be made by Mortgagor in the due
observance or performance of any of the covenants, conditions or agreements
herein provided to be observed or performed by Mortgagor or any warranty of
Mortgagor herein made prove to be untrue or inaccurate in any material respect;
or

(3)      Failure of Title. Mortgagor's title to the Mortgaged Property, or any
substantial part thereof, become the subject of actual or threatened litigation
which would or might, in Mortgagee's opinion, on final determination result in
substantial impairment or loss of the security provided for herein; or

(4)      Sale or Encumbrance. Mortgagor, without the prior written consent of
Mortgagee (Mortgagee having an absolute right to refuse to consent or to
condition its consent upon satisfaction of any one or more of the following
requirements: (a) that the interest rate on the Indebtedness be increased to a
rate acceptable to Mortgagee; (b) that a reasonable transfer fee, in an amount
determined by Mortgagee, be paid; (c) that a principal amount deemed appropriate
by Mortgagee be paid against the Indebtedness to reduce to a level acceptable to
Mortgagee the ratio that the outstanding balance of the Indebtedness bears to
the value of the Mortgaged Property as determined by Mortgagee; (d) that
Mortgagor and each proposed transferee execute such assumption agreements and
other instruments as Mortgagee shall reasonably require; (e) that the proposed
transferee's creditworthiness and experience in owning and operating similar
properties be demonstrable and proven to Mortgagee's reasonable satisfaction as
being at least as good as Mortgagor's; (f) that the liability to Mortgagee of
Mortgagor and all other guarantors of all or any part of the Indebtedness will
be confirmed by them in writing to be unaffected and unimpaired by such
transfer, conveyance or encumbering; and (g) that any proposed junior mortgagee
expressly subordinate to all liens and security interests securing the
Indebtedness as to both lien and payment right priority), sell, assign, lease,
transfer, mortgage, pledge, hypothecate or otherwise dispose of or encumber all
or any portion of the Mortgaged Property or enter into any contractual
arrangement to do so, irrespective of whether or not the transfer, conveyance or
encumbrance would or might (i) diminish the value of any security for the
Indebtedness, (ii) increase the risk of default under this Deed of Trust, (iii)
increase the likelihood of Mortgagee's having to resort to any security for the
Indebtedness after default or (iv) add or remove the liability of any person or
entity for payment or performance of the Indebtedness or any covenant or
obligation under this Deed of Trust; provided, however, the foregoing shall not
apply to hydrocarbons produced and sold in the ordinary course of business; or

(5)      Involuntary Insolvency. An order, judgment or decree be entered against
Mortgagor by any court of competent jurisdiction or by any other duly authorized

DEED OF TRUST - Page 9

authority, on the petition of a creditor or otherwise, granting relief under
Title 11 of the United States Code or under any bankruptcy, insolvency, debtor's
relief or other similar law of the United States or any state approving a
petition seeking reorganization or an arrangement of Mortgagor's debts or
appointing a receiver, trustee, conservator, custodian or liquidator of
Mortgagor or all or any substantial part of Mortgagor's assets; or

(6)      Voluntary Insolvency. Mortgagor (i) discontinue its usual business, or
(ii) apply for or consent to the appointment of a receiver, trustee or
liquidator of Mortgagor of all or a substantial part of its assets, or (iii)file
a voluntary petition commencing a case under Title 11 of the United States Code,
seeking liquidation, reorganization or rearrangement, or taking advantage of any
bankruptcy, insolvency, debtor's relief or other similar law of the United
States or any state, or (iv) make a general assignment for the benefit of
creditors, or (v) be unable, or admit in writing its inability, to pay its debts
generally as they become, or (vi) file an answer admitting the material
allegations of a petition filed against it in any case commenced under Title 11
of the United States Code or any reorganization, insolvency, conservatorship or
similar proceeding under any bankruptcy, insolvency, debtor's relief or other
similar law of the United States or any state, or apply for relief under any
state or federal act for the relief of debtors; or

(7)      Contracts Relating to Indebtedness. Default be made by Mortgagor in the
due observance or performance of any of the covenants, conditions or agreements
provided to be observed or performed by Mortgagor in any loan agreement or other
contract or agreement relating to any Indebtedness; or

(8)       Decline in Value of Collateral. The Mortgaged Property materially
decline in value in the determination of Mortgagee; or Mortgagee, in its sole
discretion, deem payment of the Indebtedness to be insecure; or

(9)      Fraudulent Actions or Preference of Creditor. Mortgagor conceal,
remove, or permit to be concealed or removed, any part of its property, with
intent to hinder, delay or defraud its creditors or any of them; or make or
suffer a transfer of any of its property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law; or make any transfer of its
property to or for the benefit of a creditor at a time when other creditors
similarly situated have not been paid amounts owing; or take any other action in
the nature of a fraud upon its creditors, or any of them;

then, and in any such event, the whole of the principal of the Indebtedness
remaining unpaid, together with all interest accrued thereon, may, at the option
of the holder thereof, without notice (including, but not limited to, notice of
intention to accelerate maturity and notice of acceleration of maturity) or
demand, which are, to the full extent permitted by applicable law, waived by
Mortgagor for purposes of any provision of this Deed of Trust or of the
evidences of the Indebtedness, be declared immediately due and payable; and
thereupon, or at any time thereafter while the Indebtedness or any part thereof
remains unpaid, it shall be the duty of the Trustee, on request of the holder of
the Indebtedness (which request is hereby presumed), to enforce this Trust; and
after advertising the time and place of the sale for at least 21 days prior to
the day of sale, by posting or causing to be posted a written or printed notice
thereof at the courthouse door and by filing a copy of such notice in the office
of the County Clerk of each county in which the Land or any part thereof may be
situated, and serving written notice of the proposed sale on each debtor
obligated to pay the Indebtedness according to the records of the holder of the
Indebtedness, by postage prepaid, certified United States mail, at the most
recent address for such debtor as shown by the records of the holder of the
Indebtedness, at least 21 days prior to the day of sale, to sell the Mortgaged
Property, either as a whole or in parcels, as the Trustee may deem proper, at
public venue at the courthouse of the county in which the Mortgaged Property or
any part thereof may be situated (and being the county designated in the Notice
of Sale) on the first Tuesday of any month between the hours of 10:00 a.m. and
4:00 p.m., to the highest bidder for cash, and after such sale to make the
purchaser or purchasers good and sufficient deeds and assignments in the name of
Mortgagor herein, conveying such property so sold to the purchaser or purchasers
with general warranty of title. The Trustee, or his

DEED OF TRUST - Page 10

successor or substitute, is hereby authorized and empowered to appoint any one
or more persons as his attorney(s)-in-fact to act as Trustee under him and in
his name, place and stead, such appointment to be evidenced by a written
instrument executed by the Trustee, or his successor or substitute, to perform
any one or more act or acts necessary or incident to any sale under the power of
sale hereunder, including, without limitation, the posting and filing of any
notices, the conduct of the sale and the execution and delivery of any
instruments conveying the Mortgaged Property as a result of the sale, but in the
name and on behalf of the Trustee, or his successor or substitute; and all acts
done or performed by such attorney(s)-in-fact shall be valid, lawful and binding
as if done or performed by the Trustee, or his successor or substitute. No
single sale or series of sales by the Trustee shall extinguish the lien or
exhaust the power of sale hereunder except with respect to the items of property
sold, but such lien and power shall exist for so long as and may be exercised in
any manner by law or as herein provided as often as the circumstances require to
give Mortgagee full relief hereunder. The purchaser at any such sale shall not
assume, nor shall his or its heirs, legal representatives, successors or
assigns, be deemed to have assumed, by reason of the acquisition of property or
rights mortgaged hereunder, any liability or obligation of any lessee or
operator of the Mortgaged Property, or any part thereof, arising by reason of
any occurrence taking place prior to such sale. It shall not be necessary to
have present, or to exhibit at any such sale, any of the personal property
subject to the lien or security interest hereof.

C.      Rights as Secured Party. Upon the happening of any of the
above-enumerated events of default, Mortgagee shall be entitled to all of the
rights, powers and remedies afforded a secured party by the Uniform Commercial
Code with reference to the personal property and fixtures in which Mortgagee has
been granted a security interest hereby, or Mortgagee may proceed as to both the
real and personal property covered hereby.

D.      Application of Proceeds of Sale. The Trustee is authorized to receive
the proceeds of said sale or sales and apply the same as follows:

FIRST: to the payment of all necessary costs and expenses incident to the
execution of this Deed of Trust, including, but not limited to, a fee to the
Trustee of 5% to be estimated upon the amount realized at the sale;

SECOND: to any and all Indebtedness then hereby secured, application to be made
in such order and in such manner as the holder of said Indebtedness may, in its
discretion, elect;

THIRD: the balance, if any, to Mortgagor or its successors or assigns.

E.      Substitute Trustee. In the event of the death of the Trustee, or his
removal from the State of Texas, or his failure, refusal, or inability for any
reason to make any such sale or to perform any of the trusts herein declared, or
at any time, whether with or without cause, then the holder of the Indebtedness
may appoint, in writing, a substitute trustee who shall thereupon succeed to all
the estates, rights, powers, and trusts herein granted to and vested in the
Trustee. In the same events as first above stated, and in the same manner,
successive substitute trustees may thereafter be appointed.

F.      Statements by Trustee. It is agreed that in any deed or deeds given by
any Trustee any and all statements of fact or other recitals therein made as to
the identity of the holder or holders of the Indebtedness, or as to default in
the payments thereof or any part thereof, or as to the breach of any covenants
herein contained, or as to the request to sell, notice of sale, time, place,
terms and manner of sale, and receipt, application, and distribution of the
money realized therefrom, or as to the due and proper appointment of a
substitute trustee, and, without being limited by the foregoing, as to any other
or additional act or thing having been done by Mortgagee or by any other holder
of the Indebtedness or by the Trustee, shall be taken by all courts of law and
equity prima facie evidence that the statements or recitals state facts and are
without further question to be so accepted; and Mortgagor does hereby ratify and
confirm any and all acts that the Trustee may lawfully do in the premises by
virtue of the terms and conditions of this instrument.

DEED OF TRUST - Page 11

G.      Suit to Collect and Foreclose. The holder of the Indebtedness may, at
its election, or the Trustee may, upon written request of the holder of the
Indebtedness, proceed by suit or suits, at law or in equity, to enforce the
payment of the Indebtedness in accordance with the terms hereof and of the note,
notes or guaranties evidencing it, and to foreclose the lien and/or security
interest of this Deed of Trust as against all or any portion of the Mortgaged
Property and to have such property sold under the judgment or decree of a court
of competent jurisdiction.

H.      Mortgagee as Purchaser. It is expressly understood that the holder of
the Indebtedness, or the Trustee, may be a purchaser of the Mortgaged Property,
or of any part hereof, at any sale thereof, whether such sale be under the power
of sale hereinabove vested in the Trustee or upon any other foreclosure of the
lien and/or security interest hereof, or otherwise; and the holder of the
Indebtedness or the Trustee so purchasing shall, upon any such purchase, acquire
good title to the Mortgaged Property so purchased, free of the lien and/or
security interest of this Deed of Trust and free of all rights of redemption in
Mortgagor.

I.      Remedies Cumulative and Non-Exclusive. The rights of entry, sale, or
suit, as hereinabove or hereinafter conferred, are cumulative of all other
rights and remedies herein or by law or in equity provided, and shall not be
deemed to deprive the holder of the Indebtedness or Trustee of any such other
legal or equitable rights or remedies, by judicial proceedings or otherwise,
appropriate to enforce the conditions, covenants and terms of this Deed of Trust
and of any note or guaranty reflecting the Indebtedness, and the employment of
any remedy hereunder, or otherwise, shall not prevent the concurrent or
subsequent employment of any other appropriate remedy or remedies.

ARTICLE VI.

ASSIGNMENT OF PRODUCTION

A.      Assignment. In addition to the conveyance to the Trustee herein made,
Mortgagor does hereby transfer, assign, deliver and convey unto Mortgagee, its
successors and assigns, all of the oil, gas and other minerals produced, saved
or sold from the Mortgaged Property and attributable to the interest of
Mortgagor therein subsequent to 7:00 a.m. on the 1st day of the month in which
this Deed of Trust is executed, together with the proceeds of any sale thereof;
Mortgagor hereby directs any purchaser now or hereafter taking any production
from the Mortgaged Property to pay to Mortgagee such proceeds derived from the
sale thereof, and to continue to make payments directly to Mortgagee until
notified in writing by Mortgagee to discontinue the same; and the purchaser of
any such production shall not be required to see to the application of the
proceeds thereof by Mortgagee and payment made to Mortgagee shall be binding and
conclusive as between such purchaser and Mortgagor. Mortgagor further agrees to
perform all such acts, and to execute all such further assignments, transfer and
division orders, and other instruments as may be required or desired by
Mortgagee or any other party to have such proceeds and revenues to paid to
Mortgagee.

B.      Change of Purchaser. Should any purchaser taking the production from the
Mortgaged Property fail to make prompt payment to Mortgagee in accordance with
this Assignment, Mortgagee shall have the right at Mortgagor's expense to demand
a change of connection and to designate another purchaser with whom a new
connection may be made, without any liability on the part of Mortgagee in making
such selection, so long as ordinary care is used in the making thereof; and
failure of Mortgagor to consent to and promptly effect such change of connection
shall constitute an event of default hereunder, and the whole Indebtedness may
be immediately declared due and payable, at the option of Mortgagee and without
demand, presentment or other notice (including, but not limited to notice of
intention to accelerate maturity and notice of acceleration of maturity), and
the Mortgaged Property shall become subject to the foreclosure proceedings and
power of sale hereunder.

C.      Application of Proceeds. Mortgagor authorizes and empowers Mortgagee to
receive, hold and collect all sums of money paid to Mortgagee in accordance with
this Assignment, and to apply the same as hereinafter provided, all without any
liability or responsibility on the part of Mortgagee, save and except as to good
faith in so receiving and applying such sums. All payments

DEED OF TRUST - Page 12

provided for in this Assignment shall be paid promptly to Mortgagee, and any
provisions contained in any note or notes evidencing the Indebtedness or any
part thereof to the contrary notwithstanding, Mortgagee may apply the same or so
much thereof as it elects to the payment of the Indebtedness, application to be
made in such manner as it may elect, regardless of whether the application so
made shall exceed the payments of principal and interest then due as provided in
the note or notes evidencing the Indebtedness. After such application has been
so made by Mortgagee, the balance of any such payment or payments remaining
shall be paid to Mortgagor.

D.      No Postponement of Installments on Indebtedness. It is understood and
agreed that should such payments provided for by this Assignment be less than
the sum or sums then due on the Indebtedness, such sum or sums then due shall
nevertheless be paid by Mortgagor in accordance with the provisions of the note,
notes, guaranty agreements or other instrument or instruments evidencing the
Indebtedness, and neither this Assignment nor any provisions hereof shall in any
manner be construed to affect the terms and provisions of such note, notes,
guaranty agreements or other instrument or instruments evidencing the
Indebtedness. Likewise, neither this Assignment nor any provisions hereof shall
in any manner be construed to affect the liens, rights, title and remedies
herein granted under this Deed of Trust, and are cumulative of any other
security which Mortgagee now holds or may hereafter hold to secure the payment
of the Indebtedness.

E.      Turnover to Mortgagee. Should Mortgagor receive any of the proceeds of
any sale of oil, gas or other minerals produced, saved or sold from the
Mortgaged Property, which under the terms hereof should have been remitted to
Mortgagee, Mortgagor will immediately remit same in full to Mortgagee.

F.      Release of Proceeds Upon Payment of Indebtedness. Upon payment in full
of all Indebtedness, the remainder of such proceeds held by Mortgagee, if any,
shall be paid over to Mortgagor upon demand, and a release of the interest
hereby assigned will be made by Mortgagee to Mortgagor at its request and its
expense.

G.      Duty of Mortgagee. Mortgagee shall not be liable for any failure to
collect, or for any failure to exercise diligence in collecting, any funds
assigned hereunder. Mortgagee shall be accountable only for funds actually
received.

H.      Power of Attorney to Mortgagee. Mortgagor does hereby designate
Mortgagee as Mortgagor's agent to act in the name, place and stead of Mortgagor
for the purpose of taking any and all actions deemed by Mortgagee necessary for
the realization by Mortgagee of the benefits of the assignment of production
provided herein, recognizing such agency in favor of Mortgagee to be coupled
with the interests of Mortgagee under this Deed of Trust and, thus, irrevocable.

ARTICLE VII.

ADDITIONAL REMEDIES

A.      Mortgagee's Remedying of Mortgagor's Failure to Comply. If Mortgagor
should fail to comply with any of the covenants or obligations of Mortgagor
hereunder, then Mortgagee or the Trustee may perform the same for the account
and at the expense of Mortgagor but shall not be obligated so to do, and any and
all expenses incurred or paid in so doing shall be payable by Mortgagor to
Mortgagee, with interest at the greater of (i) the rate of 10% per annum or (ii)
the rate agreed upon in any other document or instrument relating to the
Indebtedness or any part thereof, from the date when same was so incurred or
paid, and the amount thereof shall be payable on demand and shall be secured by
and under this Deed of Trust, and the amount and nature of such expense and the
time when paid shall be fully established by the affidavit of Mortgagee or any
officer or agent thereof, or by the affidavit of any Trustee acting hereunder;
provided, however, that the exercise of the privileges granted in this paragraph
shall in nowise be considered or constitute a waiver of the right of Mortgagee
upon the happening of an event of default hereunder to declare the Indebtedness
at once due and payable but shall be cumulative of such right and all other
rights herein given.

DEED OF TRUST - Page 13

B.      Entry and Operation. In case any one or more of the events of default
shall happen, then in each and every such cases the Trustee or Mortgagee or any
holder of the Indebtedness or any part thereof, whether or not the Indebtedness
shall have been declared due and payable, in addition to the other rights and
remedies hereunder, may exercise the following additional remedy, but shall not
be obligated so to do: the Trustee, Mortgagee or holder of the Indebtedness may
enter into and upon and take possession of all or any part of the Mortgaged
Property and each and every part thereof and may exclude Mortgagor, its agents
and servants wholly therefrom and have, hold, use, operate, manage and control
the Mortgaged Property and each and every part thereof and produce the oil, gas
and other minerals therefrom and market the same, all at the sole risk and
expense of Mortgagor and at the expense of the Mortgaged Property, applying the
net proceeds to derived, first, to the cost of maintenance and operation of such
Mortgaged Property; second, to the payment of all Indebtedness secured hereby,
principal and interest, application to be made first to interest and then to
principal; and the balance thereof, if any, shall be paid to Mortgagor. Upon
such payment of all such costs and Indebtedness, the Mortgaged Property shall be
returned to Mortgagor in its then condition and such Trustee, Mortgagee or
holder of the Indebtedness shall not be liable to Mortgagor for any damage or
injury to the Mortgaged Property except such as may be caused through his, its
or their fraud or willful misconduct.

C.      Power of Attorney to Mortgagee. Mortgagor does hereby designate
Mortgagee as Mortgagor's agent to act in the name, place and stead of Mortgagor
in the exercise of each and every remedy set forth herein and in conducting any
and all operations and taking any and all action reasonably necessary to do so,
recognizing such agency in favor of Mortgagee to be coupled with the interests
of Mortgagee under this Deed of Trust, and, thus, irrevocable.

ARTICLE VIII.

MISCELLANEOUS

A.      Interest. Any provision in any document that may be executed in
connection herewith to the contrary notwithstanding, the holder of the
Indebtedness shall in no event be entitled to receive or collect, nor shall any
amounts received hereunder be credited so that the holder of the Indebtedness
shall be paid as interest, a sum greater than that authorized by law. If any
possible construction of this Deed of Trust or any instrument evidencing the
Indebtedness, or any or all other notes, guaranties or papers relating to the
Indebtedness, seems to indicate any possibility of a different power given to
the holder of the Indebtedness, or any authority to ask for, demand, or receive
any larger rate of interest, such as a mistake in calculation or wording, this
clause shall override and control, and proper adjustments shall be made
accordingly.

B.      Agreement as Entirety. This Deed of Trust, for convenience only, has
been divided into Articles and paragraphs, and it is understood that the rights,
powers, privileges, duties and other legal relations of Mortgagor, the Trustee,
and Mortgagee or any holder of the Indebtedness, shall be determined from this
instrument as an entirety and without regard to the aforesaid division into
Articles and paragraphs and without regard to headings prefixed to such
Articles.

C.      Number and Gender. The terms used to designate any of the parties herein
shall be deemed to include the heirs, successors and assigns of such parties;
the term "successors" shall include the heirs, trustees and legal
representatives; and the term "Mortgagee" shall also include any lawful owner,
holder or pledgee of any Indebtedness. Whenever the context requires, reference
herein made to the single number shall be understood to include the plural and
the plural shall likewise be understood to include the singular. Words denoting
sex shall be construed to include the masculine, feminine, and neuter when such
construction is appropriate, and specific enumeration shall not exclude the
general, but shall be construed as cumulative.

D.      Rights and Remedies Cumulative. Every right and remedy provided for
herein shall be cumulative of each and every other right or remedy of Mortgagee,
whether herein or otherwise conferred, and may be enforced concurrently
therewith, and the unenforceability or invalidity of any

DEED OF TRUST - Page 14

one or more provisions, clauses, sentences or paragraphs of this instrument
shall not render any other provision, clause, sentence or paragraph
unenforceable or invalid. No security theretofore, herewith or subsequently
taken by Mortgagee shall in any manner impair or affect the security given by
this instrument or any security by endorsement or otherwise presently or
previously given, and all security shall be taken, considered and held as
cumulative.

E.      Parties in Interest. This Deed of Trust shall be binding upon the
parties, their respective successors and assigns, and shall inure to the benefit
of the holder of the Indebtedness, and the covenants and agreements herein
contained shall constitute covenants running with the Land.

F.      Supplements. It is contemplated by the parties hereto that from time to
time additional interest and properties may or will be added to the interests
and properties in Exhibit A attached hereto by means of supplemental indentures
identifying this Deed of Trust and describing such interests and properties to
be so added and included, and upon the execution of any such supplemental
indenture, the lien, rights, titles and interests created herein shall
immediately attach to and be effective in respect to any such interests and
properties so described, the same as if same had been included originally in
Exhibit "A" attached hereto, and the same being included in the term "Mortgaged
Property", as used herein.

G.      Counterparts. This instrument is simultaneously executed in a number of
identical counterparts, each of which for all purposes shall be deemed an
original and shall be deemed, and may be enforced from time to time, as a
chattel mortgage, real estate mortgage, deed of trust, security agreement,
assignment or contract, or as one or more thereof.

H.       Fixtures, Minerals and Accounts. Without in any manner limiting the
generality of any of the foregoing hereof, some portions of the personal
property described hereinabove are or are to become fixtures on the land
described herein or to which reference is made herein. In addition, the security
interest created hereby under applicable provisions of the Uniform Commercial
Code attached to minerals, including oil and gas, or accounts resulting from the
sale thereof, at the wellhead or minehead located on the land described or to
which reference is made herein.

I.       Financing Statement. This Deed of Trust may be filed as provided in
TEX. BUS. & COM. CODE ANN. Ch. 9 (Tex. UCC) (Vernon Supp. 1988) relating to the
granting of security interests by nonutilities to assure that the security
interest granted by this Deed of Trust are perfected under Texas law. In this
connection, this instrument will be presented to a filing officer under the
Uniform Commercial Code to be filed in the real estate records as a Financing
Statement covering minerals and fixtures, pursuant to TEX. BUS. & COM. CODE ANN.
Subsec. 9.402(e) and 9.402(f) (Tex. UCC) (Vernon Supp. 1988).

J.      Addresses. For purposes of filing this Deed of Trust as a financing
statement, the addresses for Mortgagor, as the debtor, and Mortgagee, as the
secured party, are as set forth hereinabove.

K.       Recording Counterparts. For the convenience of the parties, this
instrument may be executed in multiple counterparts. For recording purposes,
various counterparts have been executed and there may be attached to each such
counterpart an Exhibit A containing only the description of the Mortgaged
Property, or portions thereof, which relates to the county or state in which the
particular counterpart is to be recorded. A complete, original counterpart of
this instrument with a complete Exhibit A may be obtained from Mortgagee. Each
of the counterparts hereof so executed shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.

L.      No Waiver by Mortgagee. The failure or delay of Mortgagee to file or
give any notice as to this instrument, or to exercise any right, remedy or
option to declare the maturity of the principal debt, or any other sums hereby
secured, or the payment by Mortgagee of any taxes, liens, charges or
assessments, shall not be taken or deemed a waiver of any rights to exercise
such right or option or to declare any such maturity as to any pat or subsequent
violations of any of such covenants

DEED OF TRUST - Page 15

or stipulations, and shall not waive or prejudice any right or lien hereunder.
Any election or failure by Mortgagee to exercise any rights, remedies or options
hereunder shall not constitute a waiver or prejudice the exercise of other
rights or remedies existing hereunder. All rights, powers, immunities, remedies
and liens of Mortgagee existing and to exist hereunder or under any other
instrument, and all other or additional security, and Mortgagee's rights at law
and in equity, shall be cumulative and not exclusive, each of the other; and
Mortgagee shall, in addition to the remedies herein expressly provided, be
entitled to such other remedies as may now or hereafter exist at law or in
equity for securing and collecting the Indebtedness, for enforcing the covenants
herein, and for foreclosing the liens hereof. Resort by Mortgagee to any remedy
provided for hereunder or at law or in equity shall not prevent concurrent or
subsequent resort to the same or any other remedy or remedies.

M.      Purpose Provision. This Deed of Trust is given:

  1. to secure payment of the promissory note executed by Mortgagor ENERGYTEC,
INC., dated February 27, 2006, payable to the order of Mortgagee in the
principal amount of $4,000,000.00, by mortgaging the properties described in
Exhibit "A" attached hereto; and

  2. to provide funds for operations.

EXECUTED this 27th day of February, 2006, but effective as of the 27th day of
February, 2006.

ENERGYTEC, INC.

By:   /s/   Don Lambert, President     By: /s/   Dorothea Krempein, Vice
President

THE STATE OF TEXAS | COUNTY OF GREGG |

BEFORE ME, the undersigned authority, on this day personally appeared Don
Lambert, President of ENERGYTEC, INC., a Nevada corporation, and known to me to
be the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same for the purposes and considerations
therein expressed, as the act and deed of such corporation, and in the capacity
therein stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE this 27th day of February, 2006.

/s/   Notary Public, State of Texas

DEED OF TRUST - Page 16

THE STATE OF TEXAS | COUNTY OF GREGG |

BEFORE ME, the undersigned authority, on this day personally appeared Dorothea
Krempein, Vice President of ENERGYTEC, INC., a Nevada corporation, and known to
me to be the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that she executed the same for the purposes and
considerations therein expressed, as the act and deed of such corporation, and
in the capacity therein stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE this 27th day of February, 2006.

/s/   Notary Public, State of Texas

AFTER RECORDING RETURN TO:
ROBERT A. SHERMAN
POST OFFICE BOX 351
CARTHAGE, TEXAS 75633

DEED OF TRUST - Page 17

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