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                                                                    EXHIBIT 10.5

                               SECURITY AGREEMENT

      THIS SECURITY AGREEMENT dated as of July 13, 2004 (this "Security
Agreement") is by and among HEP OPERATING COMPANY, L.P., a Delaware limited
partnership ("Borrower"), each other party and each subsidiary of the Borrower
signatory hereto (together with the Borrower, the "Grantors" and individually,
each a "Grantor") and UNION BANK OF CALIFORNIA, N.A., a national association, as
Administrative Agent (the "Secured Party") for the ratable benefit of itself,
the Banks (as defined below), the Issuing Banks (as defined below), and the Swap
Counterparties (as defined below) (together with the Administrative Agent, the
Issuing Banks, the Banks, individually a "Beneficiary", and collectively, the
"Beneficiaries").

                                    RECITALS

      A. This Security Agreement is entered into in connection with that certain
Credit Agreement dated as of July 7, 2004 (as it has been or may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among the Borrower, the banks party thereto from time to time (individually, a
"Bank" and collectively, the "Banks"), the Banks issuing letters of credit
thereunder from time to time (individually, an "Issuing Bank" and collectively,
the "Issuing Banks") and Secured Party.

      B. Each Grantor is a Subsidiary of the Borrower and will derive
substantial direct and indirect benefit from (i) the transactions contemplated
by the Credit Agreement and the other Credit Documents (as defined in the Credit
Agreement) and (ii) the Interest Rate Contracts (as defined in the Credit
Agreement) entered into by the Borrower or any of its Subsidiaries with a Bank
or an Affiliate of a Bank (each such counterparty, a "Swap Counterparty").

      C. It is a requirement under the Credit Agreement that the Grantors shall
secure the due payment and performance of all Obligations (as defined in the
Credit Agreement) by entering into this Security Agreement.

                                    AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged and
confessed, each Grantor hereby agrees with the Secured Party for the benefit of
the Beneficiaries as follows:

      Section 1. Definitions; Interpretation. (a) All capitalized terms not
otherwise defined in this Security Agreement that are defined in the Credit
Agreement shall have the meanings assigned to such terms by the Credit
Agreement. Any terms used in this Security Agreement that are defined in the UCC
(as defined below) and not otherwise defined herein or in the Credit Agreement,
shall have the meanings assigned to those terms by the UCC. All meanings to
defined terms, unless otherwise indicated, are to be equally applicable to both
the singular and plural forms of the terms defined. The following terms shall
have the meanings specified below:

      "Accounts" means an "account" as defined in the UCC, including, without
      limitation, all of any Grantor's rights to payment for goods sold or
      leased, services performed, or otherwise, whether now in existence or
      arising from time to time hereafter, including,

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      without limitation, rights arising under any of the Contracts or evidenced
      by an account, note, contract, security agreement, Chattel Paper
      (including, without limitation, tangible Chattel Paper and electronic
      Chattel Paper), or other evidence of indebtedness or security, together
      with all of the right, title and interest of any Grantor in and to (i) all
      security pledged, assigned, hypothecated or granted to or held by any
      Grantor to secure the foregoing, (ii) all of any Grantor's right, title
      and interest in and to any goods or services, the sale of which gave rise
      thereto, (iii) all guarantees, endorsements and indemnifications on, or
      of, any of the foregoing, (iv) all powers of attorney granted to any
      Grantor for the execution of any evidence of indebtedness or security or
      other writing in connection therewith, (v) all books, correspondence,
      credit files, records, ledger cards, invoices, and other papers relating
      thereto, including without limitation all similar information stored on a
      magnetic medium or other similar storage device and other papers and
      documents in the possession or under the control of any Grantor or any
      computer bureau from time to time acting for any Grantor, (vi) all
      evidences of the filing of financing statements and other statements
      granted to any Grantor and the registration of other instruments in
      connection therewith and amendments thereto, notices to other creditors or
      secured parties, and certificates from filing or other registration
      officers, (vii) all credit information, reports and memoranda relating
      thereto, and (viii) all other writings related in any way to the
      foregoing.

      "Cash Collateral" means all amounts from time to time held in any
      checking, savings, deposit or other account of such Grantor, including, if
      applicable, the Cash Collateral Account, all monies, proceeds or sums due
      or to become due therefrom or thereon and all documents (including, but
      not limited to passbooks, certificates and receipts) evidencing all funds
      and investments held in such accounts.

      "Chattel Paper" has the meaning set forth in the UCC.

      "Collateral" has the meaning set forth in Section 2 of this Security
      Agreement.

      "Contracts" means all contracts to which any Grantor now is, or hereafter
      will be, bound, or to which such Grantor is a party, beneficiary or
      assignee all Insurance Contracts, and all exhibits, schedules and other
      attachments to such contracts, as the same may be amended, supplemented or
      otherwise modified or replaced from time to time.

      "Contract Documents" means all Instruments, Chattel Paper, letters of
      credit, bonds, guarantees or similar documents evidencing, representing,
      arising from or existing in respect of, relating to, securing or otherwise
      supporting the payment of, the Contract Rights.

      "Contract Rights" means (i) all (A) of any Grantor's rights to payment
      under any Contract or Contract Document and (B) payments due and to become
      due to any Grantor under any Contract or Contract Document, in each case
      whether as contractual obligations, damages or otherwise; (ii) all of any
      Grantor's claims, rights, powers, or privileges and remedies under any
      Contract or Contract Document; and (iii) all of any Grantor's rights under
      any Contract or Contract Document to make determinations, to exercise any
      election (including, but not limited to, election of remedies) or option
      or to give or

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      receive any notice, consent, waiver or approval together with full power
      and authority with respect to any Contract or Contract Document to demand,
      receive, enforce or collect any of the foregoing rights or any property
      which is the subject of any Contract or Contract Document, to enforce or
      execute any checks, or other instruments or orders, to file any claims and
      to take any action which, in the reasonable opinion of the Secured Party,
      may be necessary or advisable in connection with any of the foregoing.

      "Document" means a bill of lading, dock warrant, dock receipt, warehouse
      receipt or order for the delivery of goods, and also any other document
      which in the regular course of business or financing is treated as
      adequately evidencing that the person in possession of it is entitled to
      receive, hold and dispose of the document and the goods it covers.

      "Equipment" means any equipment now or hereafter owned or leased by any
      Grantor, or in which any Grantor holds or acquires any other right, title
      or interest, constituting "equipment" under the UCC, including, without
      limitation, all surface or subsurface machinery, equipment, facilities,
      supplies, or other tangible personal property, including tubing, rods,
      pumps, pumping units and engines, pipe, pipelines, meters, apparatus,
      boilers, compressors, liquid extractors, connectors, valves, fittings,
      power plants, poles, lines, cables, wires, transformers, starters and
      controllers, machine shops, tools, machinery and parts, storage yards and
      equipment stored therein, buildings and camps, telegraph, telephone, and
      other communication systems, loading docks, loading racks, and shipping
      facilities, and any manuals, instructions, blueprints, computer software
      (including software that is imbedded in and part of the equipment), and
      similar items which relate to the above, and any and all additions,
      substitutions and replacements of any of the foregoing, wherever located
      together with all improvements thereon and all attachments, components,
      parts, equipment and accessories installed thereon or affixed thereto.

      "Fixtures" means any fixtures now or hereafter owned or leased by any
      Grantor, or in which any Grantor holds or acquires any other right, title
      or interest, constituting "fixtures" under the UCC, including without
      limitation any and all additions, substitutions and replacements of any of
      the foregoing, wherever located together with all improvements thereon and
      all attachments, components, parts, equipment and accessories installed
      thereon or affixed thereto.

      "General Intangibles" means all general intangibles now or hereafter owned
      by any Grantor, or in which any Grantor holds or acquires any other right,
      title or interest, constituting "general intangibles" or "payment
      intangibles" under the UCC, including, but not limited to, all trademarks,
      trademark applications, trademark registrations, tradenames, fictitious
      business names, business names, company names, business identifiers,
      prints, labels, trade styles and service marks (whether or not
      registered), trade dress, including logos and/or designs, copyrights,
      patents, patent applications, goodwill of any Grantor's business
      symbolized by any of the foregoing, trade secrets, license rights, license
      agreements, permits, franchises, and any rights to tax refunds to which
      any Grantor is now or hereafter may be entitled.

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      "Instrument" means an "instrument" as defined in the UCC, including,
      without limitation, any Negotiable Instrument, or any other writing which
      evidences a right to the payment of money and is not itself a security
      agreement or lease and is of a type which is in the ordinary course of
      business transferred by delivery with any necessary endorsement or
      assignment (other than Instruments constituting Chattel Paper).

      "Insurance Contracts" means all contracts and policies of insurance and
      re-insurance maintained or required to be maintained by or on behalf of
      any Grantor under the Credit Documents.

      "Interest Rate Contract" has the meaning set forth in the Credit
      Agreement.

      "Inventory" means all of the inventory of any Grantor, or in which any
      Grantor holds or acquires any right, title or interest, of every type or
      description, now owned or hereafter acquired and wherever located, whether
      raw, in process or finished, and all materials usable in processing the
      same and all documents of title covering any inventory, including, without
      limitation, work in process, materials used or consumed in any Grantor's
      business, now owned or hereafter acquired or manufactured by any Grantor
      and held for sale in the ordinary course of its business, all present and
      future substitutions therefor, parts and accessories thereof and all
      additions thereto, all Proceeds thereof and products of such inventory in
      any form whatsoever, and any other item constituting "inventory" under the
      UCC.

      "Inventory Records" means all books, records, other similar property, and
      General Intangibles at any time relating to Inventory.

      "Investment Property" means "investment property" as defined in the UCC,
      including, without limitation, all securities (whether certificated or
      uncertificated), security entitlements, securities accounts, commodity
      contracts, and commodity accounts.

      "Negotiable Instrument" means a "negotiable instrument" as defined in the
      UCC.

      "Proceeds" means all proceeds (as defined in the UCC) of any or all of the
      Collateral, including without limitation (i) any and all proceeds of, all
      claims for, and all rights of any Grantor to receive the return of any
      premiums for, any insurance, indemnity, warranty or guaranty payable from
      time to time with respect to any of the Collateral, (ii) any and all
      payments (in any form whatsoever) made or due and payable from time to
      time in connection with any requisition, confiscation, condemnation,
      seizure or forfeiture of all or any part of the Collateral by any
      Governmental Authority (or any Person acting under color of any
      Governmental Authority), (iii) all proceeds received or receivable when
      any or all of the Collateral is sold, exchanged or otherwise disposed,
      whether voluntarily, involuntarily, in foreclosure or otherwise, (iv) all
      claims of any Grantor for damages arising out of, or for breach of or
      default under, any Collateral, (v) all rights of any Grantor to terminate,
      amend, supplement, modify or waive performance under any Contracts, to
      perform thereunder and to compel performance and otherwise exercise all
      remedies thereunder, and (vi) any and all other amounts from time to time
      paid or payable under or in connection with any of the Collateral.

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      "Secured Obligations" means all Obligations now or hereafter existing,
      including any extensions, modifications, substitutions, amendments and
      renewals thereof, whether for principal, interest, fees, expenses,
      indemnification, or otherwise.

      "Security Agreement" means this Security Agreement, as the same may be
      modified, supplemented or amended from time to time in accordance with its
      terms.

      "UCC" shall mean the Uniform Commercial Code as the same may, from time to
      time, be in effect in the State of Texas; provided, however, in the event
      that, by reason of mandatory provisions of law, any or all of the
      attachment, perfection or priority of the security interest in any
      Collateral is governed by the Uniform Commercial Code as in effect in a
      jurisdiction other than the State of Texas, the term "UCC" shall mean the
      Uniform Commercial Code as in effect in such other jurisdiction for
      purposes of the provisions hereof relating to such attachment, perfection
      or priority and for purposes of definitions related to such provisions.

      (b) All meanings to defined terms, unless otherwise indicated, are to be
equally applicable to both the singular and plural forms of the terms defined.
Article, Section, Schedule, and Exhibit references are to Articles and Sections
of and Schedules and Exhibits to this Security Agreement, unless otherwise
specified. All references to instruments, documents, contracts, and agreements
are references to such instruments, documents, contracts, and agreements as the
same may be amended, supplemented, and otherwise modified from time to time,
unless otherwise specified. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Security Agreement shall refer to this
Security Agreement as a whole and not to any particular provision of this
Security Agreement. As used herein, the term "including" means "including,
without limitation". Paragraph headings have been inserted in this Security
Agreement as a matter of convenience for reference only and it is agreed that
such paragraph headings are not a part of this Security Agreement and shall not
be used in the interpretation of any provision of this Security Agreement.

      Section 2. Assignment, Pledge and Grant of Security Interest.

      (a) As collateral security for the prompt and complete payment and
performance when due of all Secured Obligations, each Grantor hereby assigns,
pledges, and grants to the Secured Party for the benefit of the Beneficiaries a
lien on and continuing security interest in all of such Grantor's right, title
and interest in, to and under, all items described in this Section 2, whether
now owned or hereafter acquired by such Grantor and wherever located and whether
now owned or hereafter existing or arising (collectively, the "Collateral"):

            (i)   all Contracts, all Contract Rights, Contract Documents and
                  Accounts associated with such Contracts and each and every
                  document granting security to such Grantor under any such
                  Contract;

            (ii)  all Accounts;

            (iii) all Inventory;

            (iv)  all Equipment;

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            (v)    all General Intangibles;

            (vi)   all Investment Property (other than (A) any Investment
                   Property to the extent pledged by a Grantor under the Pledge
                   Agreement dated of even date herewith among the Borrower,
                   certain Subsidiaries of the Borrower party thereto from time
                   to time, and the Secured Party and (B) the Equity Interest in
                   Rio Grande Pipeline Company owned by Navajo Southern, Inc.);

            (vii)  all Fixtures;

            (viii) all Cash Collateral;

            (ix)   any Legal Requirements now or hereafter held by such Grantor
                   (except that any Legal Requirement which would by its terms
                   or under applicable law become void, voidable, terminable or
                   revocable by being subjected to the Lien of this Security
                   Agreement or in which a Lien is not permitted to be granted
                   under applicable law, is hereby excluded from such Lien to
                   the extent necessary so as to avoid such voidness,
                   voidability, terminability or revocability);

            (x)    any right to receive a payment under any Interest Rate
                   Contract in connection with a termination thereof;

            (xi)   (A) all policies of insurance and Insurance Contracts, now or
                   hereafter held by or on behalf of such Grantor, including
                   casualty and liability, business interruption, and any title
                   insurance, (B) all Proceeds of insurance, and (C) all rights,
                   now or hereafter held by such Grantor to any warranties of
                   any manufacturer or contractor of any other Person;

            (xii)  any and all liens and security interests (together with the
                   documents evidencing such security interests) granted to such
                   Grantor by an obligor to secure such obligor's obligations
                   owing under any Instrument, Chattel Paper, or Contract which
                   is pledged hereunder or with respect to which a security
                   interest in such Grantor's rights in such Instrument, Chattel
                   Paper, or Contract is granted hereunder;

            (xiii) any and all guaranties given by any Person for the benefit of
                   such Grantor which guarantees the obligations of an obligor
                   under any Instrument, Chattel Paper or Contract, which are
                   pledged hereunder;

            (xiv)  without limiting the generality of the foregoing, all other

                   personal property, goods, Instruments, Chattel Paper,
                   Documents, Fixtures, credits, claims, demands and assets of
                   such Grantor whether now existing or hereafter acquired from
                   time to time; and

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            (xv)  any and all additions, accessions and improvements to, all
                  substitutions and replacements for and all products and
                  Proceeds of or derived from all of the items described above
                  in this Section 2.

      (b) Notwithstanding anything contained herein to the contrary, it is the
intention of each Grantor, the Secured Party and the other Beneficiaries that
the amount of the Secured Obligation secured by each Grantor's interests in any
of its Property shall be in, but not in excess of, the maximum amount permitted
by fraudulent conveyance, fraudulent transfer and other similar law, rule or
regulation of any Governmental Authority applicable to such Grantor.
Accordingly, notwithstanding anything to the contrary contained in this Security
Agreement or in any other agreement or instrument executed in connection with
the payment of any of the Secured Obligations, the amount of the Secured
Obligations secured by each Grantor's interests in any of its Property pursuant
to this Security Agreement shall be limited to an aggregate amount equal to the
largest amount that would not render such Grantor's obligations hereunder or the
liens and security interest granted to the Secured Party hereunder subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provision of any other applicable law.

      Section 3. Representations and Warranties. Each Grantor hereby represents
and warrants the following to the Secured Party and the other Beneficiaries:

      (a) Records. Such Grantor's sole jurisdiction of formation and type of
organization are as set forth in Schedule 1 attached hereto. Other than for
Accounts which individually or in the aggregate do not exceed $500,000, none of
the Accounts is evidenced by a promissory note or other instrument.

      (b) Other Liens. Such Grantor is, and will be the record, legal, and
beneficial owner of all of the Collateral pledged by such Grantor free and clear
of any Lien, except for the Permitted Liens. No effective financing statement or
other instrument similar in effect covering all or any part of the Collateral
is, or will be, on file in any recording office, except such as may be filed in
connection with this Security Agreement or in connection with other Permitted
Liens or for which satisfactory releases have been received by the Secured
Party.

      (c) Lien Priority and Perfection.

            (i) Subject only to Permitted Liens, this Security Agreement creates
valid and continuing security interests in the Collateral, securing the payment
and performance of all the Secured Obligations. Upon the filing of financing
statements with the jurisdiction listed in Schedule 1, the security interests
granted to the Secured Party hereunder will constitute valid first-priority
perfected security interests in all Collateral with respect to which a security
interest can be perfected by the filing of a financing statement, subject only
to Permitted Liens.

            (ii) No consent of any other Person and no authorization, approval,
or other action by, and no notice to or filing with any Governmental Authority
is required (A) for the grant by such Grantor of the pledge, assignment, and
security interest granted hereby or for the execution, delivery, or performance
of this Security Agreement by such Grantor, (B) for the validity, perfection, or
maintenance of the pledge, assignment, lien, and security interest created

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hereby (including the first-priority (subject to Permitted Liens) nature
thereof), except for security interests that cannot be perfected by filing under
the UCC, or (C) for the exercise by the Secured Party of the rights provided for
in this Security Agreement or the remedies in respect of the Collateral pursuant
to this Security Agreement, except (1) those consents to assignment of licenses,
permits, approvals, and other rights that are as a matter of law not assignable,
(2) those consents, approvals, authorizations, actions, notices or filings which
have been duly obtained or made and, in the case of the maintenance of
perfection, the filing of continuation statements under the UCC, and (3) those
filings and actions described in Section 3(c)(i).

      (d) Tax Identification Number and Organizational Number. The federal tax
identification number of such Grantor and the organizational number (if any) of
such Grantor are as set forth in Schedule 1.

      (e) Tradenames; Prior Names. Except as set forth on Schedule 1, such
Grantor has not conducted business under any name other than its current name
during the five years immediately prior to the date of this Security Agreement.

      Section 4. Covenants.

      (a) Further Assurances.

            (i) Each Grantor agrees that from time to time, at its expense, such
Grantor shall promptly execute and deliver all instruments and documents, and
take all action, that may be reasonably necessary or desirable, or that the
Secured Party may reasonably request, in order to perfect and protect any
pledge, assignment, or security interest granted or intended to be granted
hereby or to enable the Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, each Grantor (A) at the request of Secured Party,
shall execute such instruments, endorsements or notices, as may be reasonably
necessary or desirable or as the Secured Party may reasonably request, in order
to perfect and preserve the assignments and security interests granted or
purported to be granted hereby, (B) shall, if any Collateral shall be evidenced
by a promissory note or other Instrument or Chattel Paper and such promissory
note, Instrument or Chattel Paper shall, individually or in the aggregate,
exceed $500,000, deliver and pledge to the Secured Party hereunder such note or
Instrument or Chattel Paper duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
the Secured Party, and (C) authorizes the Secured Party to file any financing
statements, amendments or continuations without the signature of such Grantor to
the extent permitted by applicable law in order to perfect or maintain the
perfection of any security interest granted under this Security Agreement
(including, without limitation, financing statements using an "all assets" or
"all personal property" collateral description). Notwithstanding anything in
this Security Agreement to the contrary, the Grantor shall not be required to
take any action with respect to the perfection of the security interest in any
Cash Collateral which is not then held by a Lender or the Borrower or a
Subsidiary of the Borrower.

            (ii) Following written request by the Secured Party, each Grantor
shall pay all filing, registration and recording fees and all refiling,
re-registration and re-recording fees, and all other reasonable expenses
incident to the execution and acknowledgment of this Security

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Agreement, any assurance, and all federal, state, county and municipal stamp
taxes and other taxes, duties, imports, assessments and charges arising out of
or in connection with the execution and delivery of this Security Agreement, any
agreement supplemental hereto, any financing statements, and any instruments of
further assurance.

            (iii) Each Grantor shall promptly provide to the Secured Party all
information and evidence the Secured Party may reasonably request concerning the
Collateral to enable the Secured Party to enforce the provisions of this
Security Agreement.

      Section 5. Change of Name; State of Formation. Each Grantor shall give the
Secured Party at least 30 days' prior written notice before it (i) in the case
of any Grantor that is not a "registered organization" (as such term is defined
in Section 9-102 of the UCC), changes the location of its principal place of
business and chief executive office, (ii) changes the location of its
jurisdiction of formation or organization, (iii) changes the location of the
original copies of any Chattel Paper evidencing Accounts if such Chattel Paper,
individually or in the aggregate, exceeds $500,000, or (iv) changes its name or
uses a trade name other than its current name used on the date hereof. Other
than as permitted by Section 6.09 of the Credit Agreement or as permitted in the
preceding sentence, no Grantor shall amend, supplement, modify or restate its
articles or certificate of incorporation, bylaws, limited liability company
agreements, or other equivalent organizational documents, without the prior
written consent of the Secured Party.

      (a) Right of Inspection. Each Grantor shall hold and preserve, at its own
cost and expense reasonably satisfactory and complete records of the Collateral,
including, but not limited to, Instruments, Chattel Paper, Contracts, and
records with respect to the Accounts, and will permit representatives of the
Secured Party, upon reasonable advance notice, at any time during normal
business hours to inspect and copy them. Upon the occurrence and during the
continuation of any Event of Default, at the Secured Party's request, each
Grantor shall promptly deliver copies of any and all such records to the Secured
Party.

      (b) Liability Under Contracts and Accounts. Notwithstanding anything in
this Security Agreement to the contrary, (i) the execution of this Security
Agreement shall not release any Grantor from its obligations and duties under
any of the Contract Documents, or any other contract or instrument which are
part of the Collateral and Accounts included in the Collateral, (ii) the
exercise by the Secured Party of any of its rights hereunder shall not release
any Grantor from any of its duties or obligations under any Contract Documents,
or any other Contract or Instrument which are part of the Collateral and
Accounts included in the Collateral, and (iii) the Secured Party shall not have
any obligation or liability under any Contract Documents, or any other contract
or instrument which are part of the Collateral and Accounts included in the
Collateral by reason of the execution and delivery of this Security Agreement,
nor shall the Secured Party be obligated to perform any of the obligations or
duties of any Grantor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.

      (c) Transfer of Certain Collateral; Release of Certain Security Interest.
Each Grantor agrees that it shall not sell, assign, or otherwise dispose of any
Collateral, except as otherwise permitted under the Credit Agreement. The
Secured Party shall promptly, at the Grantors' expense, execute and deliver all
further instruments and documents, and take all further action

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that a Grantor may reasonably request in order to release its security interest
in any Collateral which is disposed of in accordance with the terms of the
Credit Agreement.

      (d) Accounts. Each Grantor agrees that it will use commercially reasonable
efforts to ensure that each Account (i) is and will be, in all material
respects, the genuine, legal, valid, and binding obligations of the account
debtor in respect thereof, representing an unsatisfied obligation of such
account debtor, (ii) is and will be, in all material respects, enforceable in
accordance with its terms, is not and will not be subject to any setoffs,
defenses, taxes, counterclaims, except in the ordinary course of business, (iii)
is and will be, in all material respects, in compliance with all applicable
laws, whether federal, state, local or foreign, and (iv) if evidenced by Chattel
Paper, will not require the consent of the account debtor in respect thereof in
connection with its assignment hereunder.

      (e) Negotiable Instrument. If any Grantor shall at any time hold or
acquire any Negotiable Instruments, including promissory notes, and such
Negotiable Instruments, individually or in the aggregate, exceed $500,000, then
such Grantor shall forthwith endorse, assign and deliver the same to the Secured
Party, accompanied by such instruments of transfer or assignment duly executed
in blank as the Secured Party may from time to time reasonably request.

      (f) Other Covenants of Grantor. Each Grantor agrees that (i) any action or
proceeding to enforce this Security Agreement may be taken by the Secured Party
either in such Grantor's name or in the Secured Party's name, as the Secured
Party may deem necessary, and (ii) such Grantor will, until the indefeasible
payment in full in cash of the Secured Obligations (including all Letter of
Credit Obligations), the termination of all obligations of the Issuing Banks and
the Banks in respect of Letters of Credit, and the termination or expiration of
the Commitments, warrant and defend its title to the Collateral and the interest
of the Secured Party in the Collateral against any claim or demand of any
Persons (other than Permitted Liens) which could reasonably be expected to
materially adversely affect such Grantor's title to, or the Secured Party's
right or interest in, such Collateral.

      Section 6. Termination of Security Interest. Upon the indefeasible payment
in full in cash of the Secured Obligations (including all Letter of Credit
Obligations), the termination or expiration of all Letters of Credit and the
termination of all obligations of the Issuing Banks and the Banks in respect of
Letters of Credit, and the termination or expiration of the Commitments, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the applicable Grantor to the extent such Collateral
shall not have been sold or otherwise applied pursuant to the terms hereof. Upon
any such termination, the Secured Party will promptly, at the Grantors' expense,
execute and deliver to the applicable Grantor such documents (including, without
limitation, UCC-3 termination statements) as such Grantor shall reasonably
request to evidence such termination.

      Section 7. Reinstatement. If, at any time after payment in full of all
Secured Obligations and termination of the Secured Party's security interest,
any payments on the Secured Obligations previously made must be disgorged by the
Secured Party for any reason whatsoever, including, without limitation, the
insolvency, bankruptcy or reorganization of any Grantor or any other Person,
this Security Agreement and the Secured Party's security interests

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herein shall be reinstated as to all disgorged payments as though such payments
had not been made, and each Grantor shall sign and deliver to the Secured Party
all documents, and shall do such other acts and things, as may be reasonably
necessary to reinstate and perfect the Secured Party's security interest (other
than the Secured Party's security interest in Cash Collateral that is held by a
Person other than a Lender, the Borrower or any Subsidiary of the Borrower).
EACH GRANTOR SHALL DEFEND AND INDEMNIFY EACH BENEFICIARY FROM AND AGAINST ANY
CLAIM, DAMAGE, LOSS, LIABILITY, COST OR EXPENSE UNDER THIS SECTION 7 (INCLUDING
REASONABLE ATTORNEYS' FEES AND EXPENSES) IN THE DEFENSE OF ANY SUCH ACTION OR
SUIT INCLUDING SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE ARISING AS
A RESULT OF THE INDEMNIFIED BENEFICIARY'S OWN NEGLIGENCE BUT EXCLUDING SUCH
CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE THAT IS FOUND IN A FINAL,
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
FROM SUCH INDEMNIFIED BENEFICIARY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

      Section 8. Remedies upon Event of Default.

      (a) If any Event of Default has occurred and is continuing, the Secured
Party may (and shall at the written request of the Majority Banks), (i) proceed
to protect and enforce the rights vested in it by this Security Agreement or
otherwise available to it, including but not limited to, the right to cause all
revenues and other moneys pledged hereby as Collateral to be paid directly to
it, and to enforce its rights hereunder to such payments and all other rights
hereunder by such appropriate judicial proceedings as it shall deem most
effective to protect and enforce any of such rights, either at law or in equity
or otherwise, whether for specific enforcement of any covenant or agreement
contained in any of the Contract Documents, or in aid of the exercise of any
power therein or herein granted, or for any foreclosure hereunder and sale under
a judgment or decree in any judicial proceeding, or to enforce any other legal
or equitable right vested in it by this Security Agreement or by law; (ii) cause
any action at law or suit in equity or other proceeding to be instituted and
prosecuted and enforce any rights hereunder or included in the Collateral,
subject to the provisions and requirements thereof; (iii) sell or otherwise
dispose of any or all of the Collateral or cause the Collateral to be sold or
otherwise disposed of in one or more sales or transactions, at such prices and
in such manner as may be commercially reasonable, and for cash or on credit or
for future delivery, without assumption of any credit risk, at public or private
sale, without demand of performance or notice of intention to sell or of time or
place of sale (except such notice as is required by applicable statute and
cannot be waived), it being agreed that the Secured Party may be a purchaser on
behalf of the Beneficiaries or on its own behalf at any such sale and that the
Secured Party, any other Beneficiary, or any other Person who may be a bona fide
purchaser for value and without notice of any claims of any or all of the
Collateral so sold shall thereafter hold the same absolutely free from any claim
or right of whatsoever kind, including any equity of redemption of any Grantor,
any such demand, notice or right and equity being hereby expressly waived and
released to the extent permitted by law; (iv) incur reasonable expenses,
including reasonable attorneys' fees, reasonable consultants' fees, and other
costs appropriate to the exercise of any right or power under this Security
Agreement; (v) perform any obligation of any Grantor hereunder and make
payments, purchase, contest or compromise any encumbrance, charge or lien, and
pay taxes and expenses, without, however, any obligation to do so; (vi) in
connection with any acceleration and

                                       11

<PAGE>

foreclosure, take possession of the Collateral and render it usable and repair
and renovate the same, without, however, any obligation to do so, and enter upon
any location where the Collateral may be located for that purpose, control,
manage, operate, rent and lease the Collateral, collect all rents and income
from the Collateral and apply the same to reimburse the Beneficiaries for any
cost or expenses incurred hereunder or under any of the Credit Documents and to
the payment or performance of any Grantor's obligations hereunder or under any
of the Credit Documents, and apply the balance to the other Secured Obligations
and any remaining excess balance to whomsoever is legally entitled thereto;
(vii) secure the appointment of a receiver for the Collateral or any part
thereof; (viii) require any Grantor to, and each Grantor hereby agrees that it
will at its expense and upon request of the Secured Party forthwith, assemble
all or part of the Collateral as directed by the Secured Party and make it
available to the Secured Party at a place to be designated by the Secured Party
which is reasonably convenient to both parties; (ix) exercise any other or
additional rights or remedies granted to a secured party under the UCC; or (x)
occupy any premises owned or leased by any Grantor where the Collateral or any
part thereof is assembled for a reasonable period in order to effectuate its
rights and remedies hereunder or under law, without obligation to any Grantor in
respect of such occupation. If, pursuant to applicable law, prior notice of sale
of the Collateral under this Section is required to be given to any Grantor,
each Grantor hereby acknowledges that the minimum time required by such
applicable law, or if no minimum time is specified, 10 days, shall be deemed a
reasonable notice period. The Secured Party shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. The Secured
Party may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.

      (b) All reasonable costs and expenses (including reasonable attorneys'
fees and expenses) incurred by the Secured Party in connection with any suit or
proceeding in connection with the performance by the Secured Party of any of the
agreements contained in any of the Contract Documents, or in connection with any
exercise of its rights or remedies hereunder, pursuant to the terms of this
Security Agreement, shall constitute additional indebtedness secured by this
Security Agreement and shall be paid on demand by the Grantors to the Secured
Party on behalf of the Beneficiaries.

      Section 9. Remedies Cumulative; Delay Not Waiver.

      (a) No right, power or remedy herein conferred upon or reserved to the
Secured Party is intended to be exclusive of any other right, power or remedy
and every such right, power and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right, power and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder or otherwise shall not
prevent the concurrent assertion or employment of any other appropriate right or
remedy. Resort to any or all security now or hereafter held by the Secured Party
may be taken concurrently or successively and in one or several consolidated or
independent judicial actions or lawfully taken nonjudicial proceedings, or both.

      (b) No delay or omission of the Secured Party to exercise any right or
power accruing upon the occurrence and during the continuance of any Event of
Default as aforesaid shall impair

                                       12

<PAGE>

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

      Section 10. Contract Rights. Upon the occurrence and during the
continuance of an Event of Default, the Secured Party may exercise any of the
Contract Rights and remedies of any Grantor under or in connection with the
Instruments, Chattel Paper, or Contracts which represent Accounts, the General
Intangibles, or which otherwise relate to the Collateral, including, without
limitation, any rights of any Grantor to demand or otherwise require payment of
any amount under, or performance of any provisions of, the Instruments, Chattel
Paper, or Contracts which represent Accounts, or the General Intangibles.

      Section 11. Accounts.

      (a) Upon the occurrence and during the continuance of an Event of Default,
the Secured Party may, or may direct any Grantor to, take any action reasonably
necessary or advisable to enforce collection of the Accounts, including, without
limitation, notifying the account debtors or obligors under any Accounts of the
assignment of such Accounts to the Secured Party and directing such account
debtors or obligors to make payment of all amounts due or to become due directly
to the Secured Party. Upon such notification and direction, and at the expense
of the Grantors, the Secured Party may enforce collection of any such Accounts,
and adjust, settle, or compromise the amount or payment thereof in the same
manner and to the same extent as any Grantor might have done.

      (b) Upon the occurrence and during the continuance of an Event of Default,
and upon receipt by any Grantor of written notice from the Secured Party that an
Event of Default has occurred and is continuing, all amounts and proceeds
(including instruments) received by such Grantor in respect of the Accounts
shall be received in trust for the benefit of the Secured Party hereunder, shall
be segregated from other funds of such Grantor, and shall promptly be paid over
to the Secured Party in the same form as so received (with any necessary
indorsement) to be held as Collateral. Following receipt of such notice and
prior to the waiver or cure of the applicable Event of Default, no Grantor shall
adjust, settle, or compromise the amount or payment of any Account, nor release
wholly or partly any account debtor or obligor thereof, nor allow any credit or
discount thereon.

      Section 12. Application of Collateral. The proceeds of any sale, or other
realization (other than that received from a sale or other realization permitted
by the Credit Agreement) upon all or any part of the Collateral pledged by any
Grantor shall be applied by the Secured Party as set forth in Section 7.06 of
the Credit Agreement.

      Section 13. Secured Party as Attorney-in-Fact for Grantor. Each Grantor
hereby constitutes and irrevocably appoints the Secured Party, acting for and on
behalf of itself and the Beneficiaries and each successor or assign of the
Secured Party and the Beneficiaries, the true and lawful attorney-in-fact of
such Grantor, with full power and authority in the place and stead of such
Grantor and in the name of such Grantor, the Secured Party or otherwise to take
any action and execute any instrument at the written direction of the
Beneficiaries and enforce all rights, interests and remedies of such Grantor
with respect to the Collateral, including the right:

                                       13

<PAGE>

      (a) to ask, require, demand, receive and give acquittance for any and all
moneys and claims for moneys due and to become due under or arising out of the
any of the other Collateral, including without limitation, any Insurance
Contracts;

      (b) to elect remedies thereunder and to endorse any checks or other
instruments or orders in connection therewith;

      (c) to file any claims or take any action or institute any proceedings in
connection therewith which the Secured Party may deem to be reasonably necessary
or advisable;

      (d) to pay, settle or compromise all bills and claims which may be or
become liens or security interests against any or all of the Collateral, or any
part thereof, unless a bond or other security satisfactory to the Secured Party
has been provided; and

      (e) upon foreclosure, to do any and every act which any Grantor may do on
its behalf with respect to the Collateral or any part thereof and to exercise
any or all of such Grantor's rights and remedies under any or all of the
Collateral;

provided, however, that the Secured Party shall not exercise any such rights
except upon the occurrence and continuation of an Event of Default. THIS POWER
OF ATTORNEY IS A POWER COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE.

      Section 14. Secured Party May Perform. The Secured Party may from
time-to-time perform any act which any Grantor has agreed hereunder to perform
and which such Grantor shall fail to perform after being requested in writing to
so perform (it being understood that no such request need be given after the
occurrence and during the continuance of any Event of Default and after notice
thereof by the Secured Party to any Grantor) and the Secured Party may from
time-to-time take any other action which the Secured Party deems reasonably
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein, and the reasonable expenses of
the Secured Party incurred in connection therewith shall be part of the Secured
Obligations and shall be secured hereby.

      Section 15. Secured Party Has No Duty. The powers conferred on the Secured
Party hereunder are solely to protect its interest in the Collateral and shall
not impose any duty on it to exercise any such powers. Except for reasonable
care of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Secured Party shall have no duty as to any
Collateral or responsibility for taking any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral.

      Section 16. Reasonable Care. The Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which the Secured Party accords its own Property.

      Section 17. Payments Held in Trust. After the occurrence and during the
continuance of an Event of Default, all payments received by any Grantor under
or in connection with any Collateral shall be received in trust for the benefit
of the Secured Party, and shall be segregated

                                       14

<PAGE>

from other funds of such Grantor and shall be forthwith paid over to the Secured
Party in the same form as received (with any necessary endorsement).

      Section 18. Miscellaneous.

      (a) Expenses. Each Grantor will upon demand pay to the Secured Party for
its benefit and the benefit of the Beneficiaries the amount of any reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of its
counsel and of any experts, which the Secured Party and the Beneficiaries may
incur in connection with (i) the custody, preservation, use, or operation of, or
the sale, collection, or other realization of, any of the Collateral, (ii) the
exercise or enforcement of any of the rights of the Secured Party or any
Beneficiary hereunder, and (iii) the failure by any Grantor to perform or
observe any of the provisions hereof.

      (b) Amendments; Etc. No amendment or waiver of any provision of this
Security Agreement nor consent to any departure by any Grantor herefrom shall be
effective unless the same shall be in writing and authenticated by the affected
Grantor, the Secured Party and either, as required by the Credit Agreement, the
Majority Banks or all of the Banks, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

      (c) Addresses for Notices. All notices and other communications provided
for hereunder shall be made in the manner and to the addresses set forth in the
Credit Agreement or on the signature page hereto.

      (d) Continuing Security Interest; Transfer of Interest. This Security
Agreement shall create a continuing security interest in the Collateral and,
unless expressly released by the Secured Party, shall (a) remain in full force
and effect until the indefeasible payment in full in cash of the Secured
Obligations (including all Letter of Credit Obligations), the termination or
expiration of all Letters of Credit and the termination of all obligations of
the Issuing Banks and the Banks in respect of Letters of Credit, and the
termination or expiration of the Commitments, (b) be binding upon each Grantor
and its successors, tranferees and assigns, and (c) inure, together with the
rights and remedies of the Secured Party hereunder, to the benefit of and be
binding upon, the Secured Party, the Issuing Banks, and the Banks and their
respective successors, transferees, and assigns, and to the benefit of and be
binding upon, the Swap Counterparties, and each of their respective successors,
transferees, and assigns to the extent such successors, transferees, and assigns
of a Swap Counterparty is a Bank or an Affiliate of a Bank. Without limiting the
generality of the foregoing clause, when any Bank assigns or otherwise transfers
any interest held by it under the Credit Agreement or other Credit Document to
any other Person pursuant to the terms of the Credit Agreement or such other
Credit Document, that other Person shall thereupon become vested with all the
benefits held by such Bank under this Security Agreement.

      (e) Severability. Wherever possible each provision of this Security
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Security Agreement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Security Agreement.

                                       15

<PAGE>

      (f) Choice of Law. This Security Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Texas, except
to the extent that the validity or perfection of the security interests
hereunder, or remedies hereunder, in respect of any particular Collateral are
governed by the laws of a jurisdiction other than the state of Texas.

      (g) Counterparts. The parties may execute this Security Agreement in any
number of duplicate originals, each of which constitutes an original, and all of
which, collectively, constitute only one agreement. The parties may execute this
Security Agreement in counterparts, each of which constitutes an original, and
all of which, collectively, constitute only one agreement. Delivery of an
executed counterpart signature page by facsimile is as effective as executing
and delivering this Security Agreement in the presence of the other parties to
this Security Agreement. In proving this Security Agreement, a party must
produce or account only for the executed counterpart of the party to be charged.

      (h) Headings. Paragraph headings have been inserted in this Security
Agreement as a matter of convenience for reference only and it is agreed that
such paragraph headings are not a part of this Security Agreement and shall not
be used in the interpretation of any provision of this Security Agreement.

      (i) Conflicts. In the event of any explicit or implicit conflict between
any provision of this Security Agreement and any provision of the Credit
Agreement, the terms of the Credit Agreement shall be controlling.

      (j) Additional Grantors. Pursuant to Section 5.10 of the Credit Agreement,
each Subsidiary of the Borrower that was not in existence on the date of the
Credit Agreement is required to enter into this Security Agreement as a Grantor
upon becoming a Subsidiary of the Borrower. Upon execution and delivery after
the date hereof by the Secured Party and such Subsidiary of an instrument in the
form of Annex 1, such Subsidiary shall become a Grantor hereunder with the same
force and effect as if originally named as a Grantor herein. The execution and
delivery of any instrument adding an additional Grantor as a party to this
Security Agreement shall not require the consent of any other Grantor hereunder.
The rights and obligations of each Grantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Grantor as a party to this
Security Agreement.

      (k) Entire Agreement. THIS SECURITY AGREEMENT AND THE OTHER CREDIT
DOCUMENTS, AS DEFINED IN THE CREDIT AGREEMENT REPRESENT THE FINAL AGREEMENT
AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

      THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.

                            [SIGNATURE PAGES FOLLOW]

                                       16

<PAGE>

           The parties hereto have caused this Security Agreement to be duly
executed as of the date first above written.

GRANTORS:                         HEP OPERATING COMPANY, L.P., a Delaware
                                    limited partnership

                                    By: HEP Logistics GP, L.L.C., a Delaware
                                        limited liability company, its General
                                        Partner

                                    By: Holly Energy Partners, L.P., a Delaware
                                        limited partnership, its Managing Member

                                    By: HEP Logistics Holdings, L.P., a Delaware
                                        limited partnership, its General Partner

                                    By: Holly Logistic Services, L.L.C., a
                                        Delaware limited liability company, its
                                        General Partner

                                        By:  /s/ M. Neale Hickerson
                                            ------------------------------------
                                                 M. Neale Hickerson
                                                 Vice President - Treasury and
                                                 Investor Relations

                           [Signature pages continue.]

                      Signature Page to Security Agreement

<PAGE>

                                  HEP PIPELINE GP, L.L.C., a Delaware limited
                                                 liability company
                                  HEP REFINING GP, L.L.C., a Delaware limited
                                                 liability company
                                  HEP MOUNTAIN HOME, L.L.C., a Delaware
                                                 limited liability company
                                  HEP PIPELINE, L.L.C., a Delaware limited
                                                 liability company
                                  HEP REFINING, L.L.C., a Delaware limited
                                                 liability company
                                  HEP WOODS CROSS, L.L.C., a Delaware
                                                 limited liability company

                                  Each by: HEP Operating Company, L.P., a
                                           Delaware limited partnership and its
                                           Sole Member

                                    By: HEP Logistics GP, L.L.C., a Delaware
                                        limited liability company, its General
                                        Partner

                                    By: Holly Energy Partners, L.P., a Delaware
                                        limited partnership, its Managing Member

                                    By: HEP Logistics Holdings, L.P., a Delaware
                                        limited partnership, its General Partner

                                    By: Holly Logistic Services, L.L.C., a
                                        Delaware limited liability company, its
                                        General Partner

                                        By:  /s/ M. Neale Hickerson
                                            ------------------------------------
                                                 M. Neale Hickerson
                                                 Vice President - Treasury and
                                                 Investor Relations

                           [Signature pages continue.]

                      Signature Page to Security Agreement

<PAGE>

                                  HEP NAVAJO SOUTHERN, L.P., a Delaware limited
                                       partnership
                                  HEP PIPELINE ASSETS, LIMITED PARTNERSHIP,
                                       a Delaware limited partnership

                                   Each by: HEP Pipeline GP, L.L.C., a Delaware
                                          limited liability company and its
                                          General Partner

                                    By: HEP Operating Company, L.P., a Delaware
                                        limited partnership and its Sole Member

                                    By: HEP Logistics GP, L.L.C., a Delaware
                                        limited liability company, its General
                                        Partner

                                    By: Holly Energy Partners, L.P., a Delaware
                                        limited partnership, its Managing Member

                                    By: HEP Logistics Holdings, L.P., a Delaware
                                        limited partnership, its General Partner

                                    By: Holly Logistic Services, L.L.C., a
                                        Delaware limited liability company, its
                                        General Partner

                                        By:  /s/ M. Neale Hickerson
                                            ------------------------------------
                                                 M. Neale Hickerson
                                                 Vice President - Treasury and
                                                 Investor Relations

                           [Signature pages continue.]

                      Signature Page to Security Agreement

<PAGE>

                                  HEP REFINING ASSETS, L.P., a Delaware limited
                                              partnership

                                    By: HEP Refining GP, L.L.C., a Delaware
                                        limited liability company and its
                                        General Partner

                                    By: HEP Operating Company, L.P., a Delaware
                                        limited partnership and its Sole Member

                                    By: HEP Logistics GP, L.L.C., a Delaware
                                        limited liability company, its General
                                        Partner

                                    By: Holly Energy Partners, L.P., a Delaware
                                        limited partnership, its Managing Member

                                    By: HEP Logistics Holdings, L.P., a Delaware
                                        limited partnership, its General Partner

                                    By: Holly Logistic Services, L.L.C., a
                                        Delaware limited liability company, its
                                        General Partner

                                        By:  /s/ M. Neale Hickerson
                                            ------------------------------------
                                                 M. Neale Hickerson
                                                 Vice President - Treasury and
                                                 Investor Relations

                           [Signature pages continue.]

                      Signature Page to Security Agreement

<PAGE>

SECURED PARTY:                      UNION BANK OF CALIFORNIA, N.A., as
                                    Secured Party for the ratable benefit of the
                                    Beneficiaries

                                    By:  /s/ Sean Murphy
                                        ----------------------------------------
                                             Sean Murphy, Vice President

                      Signature Page to Security Agreement<PAGE>

                                                                    EXHIBIT 10.6

           MORTGAGE, DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF
            RENTS AND LEASES, FIXTURE FILING AND FINANCING STATEMENT

      THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A TRANSMITTING UTILITY.

       THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY AND FUTURE ADVANCE
                                   PROVISIONS.

THIS INSTRUMENT IS TO BE FILED FOR RECORD, AMONG OTHER PLACES, IN THE REAL
ESTATE RECORDS. THIS INSTRUMENT AND THE LIENS CREATED PURSUANT HERETO COVER,
AMONG OTHER THINGS, PRODUCTS AND PROCEEDS. THIS INSTRUMENT ALSO COVERS FIXTURES
IN WHICH MORTGAGOR OWNS AN INTEREST. THIS INSTRUMENT CONTAINS AN ASSIGNMENT OF
RENTS AND LEASES.

A POWER OF SALE HAS BEEN GRANTED IN THIS DEED OF TRUST. A POWER OF SALE MAY
ALLOW MORTGAGEE TO TAKE THE COLLATERAL ENCUMBERED BY THIS DEED OF TRUST AND SELL
IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON DEFAULT BY MORTGAGOR
UNDER THIS DEED OF TRUST.

                                      FROM

                                  [MORTGAGOR],
                                  as Mortgagor

                                       TO

                             [Sean Murphy], Trustee
                               for the benefit of

             UNION BANK OF CALIFORNIA, N.A., as Administrative Agent
                          (Mortgagee and Secured Party)

                                  July 13, 2004

For purposes of filing this Deed of Trust as a financing statement, the mailing
address of Mortgagor is 100 Crescent Court, Suite 1600, Dallas, Texas
75201-6927, Attention: Steve McDonnell; the mailing address of Mortgagee is 445
South Figueroa Street, 15th Floor, Los Angeles, California 90071, Attention: Don
Smith.

                       ***********************************

                                  Page 1 of 33

<PAGE>

ATTENTION OF RECORDING OFFICER:  This instrument is a mortgage of both real and
personal property and is, among other things, a Security Agreement and Financing
Statement under the Uniform Commercial Code. This instrument creates a lien on
rights in or relating to lands of Mortgagor which are described in Exhibit A
hereto.

RECORDED DOCUMENT SHOULD BE RETURNED TO:

                          BRACEWELL & PATTERSON, L.L.P.
                           South Tower Pennzoil Place
                        711 Louisiana Street, Suite 2900
                              Houston, Texas 77002
                          Attention: Stephanie Koo Song

<PAGE>

           MORTGAGE, DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF
            RENTS AND LEASES, FIXTURE FILING AND FINANCING STATEMENT

      THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A TRANSMITTING UTILITY. THIS
      INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY AND FUTURE ADVANCE PROVISIONS.

      THIS MORTGAGE, DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND
LEASES, FIXTURE FILING, AND FINANCING STATEMENT (this "Deed of Trust") dated
effective as of July 13, 2004, is executed and delivered by [MORTGAGOR]
("Mortgagor"), to [Sean Murphy] as Trustee for the benefit of UNION BANK OF
CALIFORNIA, N.A. (the "Mortgagee") in its capacity as the administrative agent
under the Credit Agreement (as defined below) and on behalf of the Credit
Parties (as hereinafter defined). The addresses of Mortgagor and Mortgagee
appear in Section 6.12 of this Deed of Trust.

                                   WITNESSETH:

      WHEREAS, this Deed of Trust is executed in connection with, and pursuant
to the terms of, the Credit Agreement dated as of July 7, 2004 (as hereafter
renewed, extended, amended, supplemented and/or restated from time-to-time, the
"Credit Agreement") among HEP Operating Company, L.P., a Delaware limited
partnership, as borrower ("Borrower"), the banks party thereto from time to time
(individually, a "Bank" and collectively, the "Banks"), the Banks issuing
letters of credit thereunder from time to time (individually, an "Issuing Bank"
and collectively, the "Issuing Banks"), and Mortgagee as administrative agent
for the Banks and the Issuing Banks ("Administrative Agent").

      WHEREAS, the Borrower is the principal financing entity for all capital
requirements of certain of its Subsidiaries. Mortgagor is a wholly-owned
Subsidiary of Borrower, and Mortgagor will derive substantial direct or indirect
benefit from the transactions contemplated by the Credit Documents.

      WHEREAS, the Borrower or any of its Subsidiaries may from time-to-time
enter into one or more Interest Rate Contracts with a Bank or an Affiliate of a
Bank (each such counterparty, a "Swap Counterparty", and together with the
Banks, the Issuing Banks, the Mortgagee, and Administrative Agent being
collectively referred to herein as the "Credit Parties") and Mortgagor will
directly or indirectly benefit from such Interest Rate Contracts.

      WHEREAS, it is a condition to the performance obligation of Mortgagee and
of the Banks under certain of the Credit Documents that Mortgagor shall have
executed and delivered this Deed of Trust.

      Now, therefore, in consideration of the foregoing and for other good and
valuable consideration and in order to induce Mortgagee, Administrative Agent,
Issuing Banks, and the Banks to enter into the Credit Agreement and the Swap
Counterparties to enter into the Interest Rate Contracts, Mortgagor has agreed
to execute and deliver this Deed of Trust and Mortgagor (a) wishes to make this
Deed of Trust in favor of the Trustee for the benefit of Mortgagee on behalf of
the Credit Parties to secure the Secured Obligations (as defined below) and (b)
hereby agrees as follows:

                                  Page 3 of 33

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

      1.1 DEFINED TERMS UNDER THE CREDIT AGREEMENT. As used in this Deed of
Trust, and in the event such terms are not otherwise defined in this Deed of
Trust, such terms shall have the meanings assigned to such terms in the Credit
Agreement.

      1.2 CERTAIN DEFINED TERMS. As used in this Deed of Trust, the following
terms shall have the following meanings (unless otherwise indicated, such
meanings to be equally applicable to both the singular and the plural forms of
the terms defined):

            (a) "Accounts" means all accounts (as that term is defined in the
      UCC) and all other rights to payment now or hereafter owned by Mortgagor,
      or in which Mortgagor holds or acquires any other right, title or
      interest, whether or not earned by Mortgagor by performance.

            (b) "Books, Records, and Data" means all of the following, whether
      written or in electronically reproducible form, to the extent any of the
      following is used in connection with or associated with the ownership
      and/or operation of the Refined Products Pipeline Systems or the Refined
      Products Terminals: all documents; instruments; papers; books; records;
      books of account; files and data, including engineering, operating, and
      other technical data, summaries, reports, drawings, and maps;
      certificates; financial statements; ledgers; minute books; and
      environmental studies and plans.

            (c) "Contracts" means all contracts and agreements now in effect, or
      hereafter entered into by Mortgagor, Mortgagor's predecessors in interest,
      or by any other parties to the extent that Mortgagor has any right or
      interest thereto or thereunder for the sale, purchase, marketing,
      exchange, processing, treating, compressing, handling, storing,
      transporting, transmitting or gathering of Hydrocarbons, to the extent
      such contracts and agreements cover, include or relate to all or any
      portion of the Lands and the Systems, including without limitation, the
      Omnibus Agreement, the Pipelines and Terminals Agreement and the other
      contracts and agreements described on Schedule 1 attached hereto and made
      a part hereof, and all exhibits, schedules and other attachments to such
      contracts, as the same may be amended, supplemented or otherwise modified
      or replaced from time to time.

            (d) "Fixtures" means any fixture or fixtures now or hereafter owned
      or leased by Mortgagor, or in which Mortgagor holds or acquires any other
      right, title or interest, constituting "fixtures" under the UCC or that is
      considered a "fixture" pursuant to any applicable Legal Requirement of any
      jurisdiction in which such property is located or pursuant to the Legal
      Requirements of which the character, constitution, or classification of
      such property may be determined. "Fixtures" as used in this Deed of Trust
      includes, but shall not be limited to, the Fixture Operating Equipment,
      all pipe that comprises part of a pipeline system owned in whole or in
      part by Mortgagor, and any and all additions,

                                  Page 4 of 33

<PAGE>

      substitutions and replacements of any of the foregoing, wherever located,
      including all improvements thereon and all attachments, components, parts,
      equipment and accessories installed thereon or affixed thereto together
      with all proceeds, products, renewals, increases, profits, substitutions,
      replacements, additions, and accessions of any of the foregoing.

            (e) "Fixture Operating Equipment" means any equipment related to or
      used in connection with the operation of fixtures, including, without
      limitation, the items described in the first sentence of the definition of
      Operating Equipment (as hereinafter defined), which as a result of being
      incorporated into realty or structures or improvements located therein or
      thereon, with the intent that they remain there permanently, constitute
      fixtures under the laws of the state in which such equipment is located.

            (f) "General Intangibles" means all general intangibles now or
      hereafter owned by Mortgagor, or in which Mortgagor holds or acquires any
      other right, title or interest, constituting "general intangibles" or
      "payment intangibles" under the UCC, including intellectual property,
      trademarks, trademark applications, trademark registrations, trade names,
      fictitious business names, business names, company names, business
      identifiers, prints, labels, trade styles and service marks (whether or
      not registered), trade dress, including logos and/or designs, copyrights,
      patents, patent applications, or goodwill of Mortgagor's businesses
      symbolized by any of the foregoing, trade secrets, license rights, license
      agreements, permits, franchises, and any rights to tax refunds to which
      Mortgagor is now or hereafter may be entitled.

            (g) "Hydrocarbons" means oil, gas, coal seam gas, casinghead gas,
      drip gasoline, natural gasoline, condensate, distillate, and all other
      liquid and gaseous hydrocarbons produced or to be produced in conjunction
      therewith from a well bore and all products, by-products, and other
      substances derived therefrom or the processing thereof, and all other
      minerals and substances produced in conjunction with such substances,
      including, but not limited to, sulfur, geothermal steam, water, carbon
      dioxide, helium, and any and all minerals, ores, or substances of value
      and the products and proceeds therefrom.

            (h) "Lands" means the real property (including any buildings and
      improvements located thereon) (i) described or referred to in the Exhibit
      A attached hereto or (ii) described in any instrument or document
      described in Exhibit A and which descriptions are incorporated herein by
      reference.

            (i) "Leases" means any and all leases or subleases means all leases
      or subleases covering the Lands or the Systems or any portion thereof now
      or hereafter existing or entered into.

            (j) "Mortgaged Property" means, (x) with respect to the lien created
      by this Deed of Trust, all of Mortgagor's right, title, and interest in
      the following, to the extent such property is capable of being encumbered
      by the liens other than the security interest granted hereunder pursuant
      to any applicable Legal Requirement, and (y) with respect to the security
      interest granted to Mortgagee pursuant to this Deed of Trust, all of

                                  Page 5 of 33

<PAGE>

      Mortgagor's right, title, and interest in the following, to the extent
      such property is capable of being encumbered by the security interest
      granted hereunder pursuant to any applicable Legal Requirement:

                  (i)    Accounts;

                  (ii)   Books, Records, and Data;

                  (iii)  Fixtures;

                  (iv)   General Intangibles;

                  (v)    the Lands;

                  (vi)   Leases and Rents;

                  (vii)  Material Contracts;

                  (viii) Operating Equipment;

                  (ix)   Refined Products;

                  (x)    the Systems;

                  (xi)   the Servitudes;

                  (xii)  all other real, personal, or mixed property which
            comprises a part of, is necessary for, and/or is used or is held for
            use in connection with any of the foregoing;

                  (xiii) any of the foregoing that is acquired by Mortgagor at
            any time after the date of Deed of Trust and

                  (xiv)  any Proceeds of any of the foregoing.

            (k) "Operating Equipment" means all surface or subsurface machinery,
      equipment, facilities, supplies, or other tangible personal property,
      including oil wells, gas wells, water wells, injection wells, gas
      processing plants, casing, tubing, rods, pumps, pumping units and engines,
      christmas trees, derricks, separators, gun barrels, flow lines, tanks,
      tank batteries, gas systems (for gathering, treating, compression,
      disposal or injection), chemicals, solutions, water systems (for treating,
      disposal and injection), pipe, pipelines, meters, apparatus, boilers,
      compressors, liquid extractors, connectors, valves, fittings, power
      plants, poles, lines, cables, wires, transformers, starters and
      controllers, machine shops, tools, machinery and parts, storage yards and
      equipment stored therein, buildings and camps, telegraph, telephone and
      other communication systems, roads, loading docks, loading racks and
      shipping facilities, fixtures, and other appurtenances, appliances and
      property of every kind and character, movable or immovable, together with
      all improvements, betterments and additions, accessions and attachments
      thereto and

                                  Page 6 of 33

<PAGE>

      replacements thereof, in each case wherever located and to the extent any
      of such tangible personal property is used in connection with or
      associated with the ownership and/or operation of the Lands or the
      Systems. For the avoidance of doubt, but without limiting the generality
      of the foregoing, "Operating Equipment" shall not include any items
      incorporated into realty or structures or improvements located therein or
      thereon in such a manner that such items no longer remain personalty under
      the laws of the state in which such equipment is located.

            (l) "Organizational Documents" means (i) in the case of a
      corporation, its articles or certificate of incorporation and bylaws, (ii)
      in the case of a general partnership, its partnership agreement, (iii) in
      the case of a limited partnership, its certificated of limited partnership
      and partnership agreement, (iv) in the case of a limited liability
      company, its articles of organization and operating agreement or
      regulations, and (v) in the case of any other entity and, to the extent
      any of the types of entities previously described have other
      organizational and governance documents and agreements not otherwise
      described in this definition, its and their organizational and governance
      documents and agreements.

            (m) "Personalty Collateral" means any part of the Mortgaged Property
      constituting personal property or with respect to which the UCC governs
      the creation, attachment, and perfection of liens and security interests
      in such property, whether or not such property is exclusively considered
      "personal property" pursuant to any applicable Legal Requirement of any
      jurisdiction in which such property is located or pursuant to the Legal
      Requirements of which the character, constitution, or classification of
      such property may be determined.

            (n) "Proceeds" means "proceeds" as that term is defined in the UCC,
      and includes, but is not limited to, all proceeds of any or all of the
      Mortgaged Property, including without limitation (i) any and all proceeds
      of, and all claims for, any property insurance, indemnity, warranty or
      guaranty payable from time to time with respect to any of the Mortgaged
      Property, (ii) any and all payments (in any form whatsoever) made or due
      and payable from time to time in connection with any requisition,
      confiscation, condemnation, seizure or forfeiture of all or any part of
      the Mortgaged Property by any Governmental Authority (or any person acting
      under color of governmental authority), (iii) all proceeds received or
      receivable when any or all of the Mortgaged Property is sold, exchanged or
      otherwise disposed, whether voluntarily, involuntarily, in foreclosure or
      otherwise, and (iv) any and all other amounts from time to time paid or
      payable under or in connection with any of the Mortgaged Property.

            (o) "Realty Collateral" means any part of the Mortgaged Property
      constituting real property, whether or not such property is exclusively
      considered "real property" pursuant to any applicable Legal Requirement of
      any jurisdiction in which such property is located or pursuant to the
      Legal Requirements of which the character, constitution, or classification
      of such property may be determined.

                                  Page 7 of 33

<PAGE>

            (p) "Refined Products" means gasoline, diesel fuel, jet fuel, liquid
      petroleum gases, asphalt and asphalt products, and all other products
      refined, separated, fractionated, settled, and dehydrated from any
      Hydrocarbon or other petroleum product.

            (q) "Rents" means all of Mortgagor's right, title, and interest in
      and to all rents, issues, profits, revenues, royalties, income, and other
      benefits derived from any leases or other transfers of any other part of
      the Mortgaged Property.

            (r) "Secured Obligations" means:

                  (i) The "Obligations", as that term is defined in the Credit
            Agreement, including all indebtedness evidenced by the Notes;

                  (ii) All other indebtedness, obligations, and liabilities of
            the Borrower or any of its Subsidiaries, whether now existing or
            hereafter arising under or pursuant to the Credit Agreement, this
            Deed of Trust, any Guaranty, any Interest Rate Contract with a Swap
            Counterparty, or any of the other Credit Documents, whether fixed or
            contingent, joint or several, direct or indirect, primary or
            secondary, and regardless of how created or evidenced, and including
            without limitation, any interest accruing during the pendency of any
            bankruptcy, insolvency, receivership or other similar proceeding,
            regardless of whether allowed or allowable in such proceeding;

                  (iii) All sums advanced or costs or expenses incurred by
            Mortgagee or any of the other Credit Parties (whether by it directly
            or on its behalf by the Trustee), which are made or incurred
            pursuant to, or allowed by, the terms of this Deed of Trust plus
            interest thereon from the date of the advance or incurrence until
            reimbursement of Mortgagee or such Credit Party charged at the same
            rate of interest as Reference Rate Advances are charged when an
            Event of Default exists as set forth in the Credit Agreement;

                  (iv) All future advances or other value, of whatever class or
            for whatever purpose, at any time hereafter made or given by
            Mortgagee or any of the other Credit Parties to the Borrower or any
            of its Subsidiaries under or pursuant to any Credit Document or any
            Interest Rate Contract with a Swap Counterparty; and

                  (v) All renewals, extensions, modifications, amendments,
            rearrangements and substitutions of all or any part of the above
            whether or not Mortgagor executes any agreement or instrument.

            (s) "Servitudes" means any and all land use agreements, permits,
      servitudes, rights of way, easements, licenses, Leases and similar
      devices, whether now existing or hereafter arising, for the construction,
      maintenance and operation of the Systems.

            (t) "Systems" shall mean all pipeline, refrigeration, processing,
      treating, gathering, storage, exchange, handling, transmitting,
      distributing, or transporting systems, plants, terminals and facilities
      now owned or hereafter acquired by Mortgagor and

                                  Page 8 of 33

<PAGE>

      located on all or any portion of the Land, including without limitation
      all of the following properties whether now owned or hereafter acquired by
      Mortgagor: (i) the pipelines, systems, plants, terminals and facilities
      described in Exhibit A, and (ii) all of the accessories or component parts
      thereto, whether or not particularly described herein, including without
      limitation, (A) all equipment, facilities, compressors, lengths of pipe
      and any and all other types of pipe actually employed in the construction
      of the systems, plants, terminals and facilities, including all loops,
      laterals, fittings, connections, valves, mains, meter's, dehydrators,
      scrubbers, controls, tubing, casings surrounding any piping, casing seals,
      casing insulators and casing vents, and all joints, connections or
      flanges, rods, gauges and all compressor, tank and pump sites, pipe,
      piping, pipe racks, truck racks, pumps, engines, compressors, block
      valves, heaters, coolers, filters, refrigerators, dehydrators, extractors,
      measurement and pigging facilities, tanks, storage tanks, loading racks,
      scales, markers, including caution signs, aerial markers, navigable
      waterway marks, mile posts, and ground markers, and all other types of
      markers, cathodic protection test stations, regulators, starters, motors,
      engines, housing, leaders, orifices, skid-mounted equipment, exchangers,
      regenerators, reboilers, refrigeration equipment, separators, meters,
      valves, block valves and generators and all other natural gas and all
      surface or underground facilities, and all fences, and all pressure gauges
      and other gauges, and all interconnections with other pipelines, and all
      side valves, blowdown valves, mainline valves, and all test leads, (C) all
      materials or gas products or by-products processing, treating,
      fractionating, refuting, refrigeration, gas gathering, transporting,
      storing, delivering and/or marketing equipment, (D) all other items or
      types of equipment and associated or component parts or supplies,
      including any and all machinery, tools, blueprints, plans, furniture,
      furnishings, fixtures and other goods of Mortgagor, (E) all spare parts,
      replacements or substitutions of any of the foregoing and all other
      appurtenances of the Systems or their above-described associated or
      component parts, whether as a result of repair, replacement or addition
      and whether attached to, incorporated with the Systems or used in
      connection with the Systems whether or not the same is situated in, on or
      under all or any portion of the Lands, (F) all other personal property and
      fixtures of every kind and character on, incident, appurtenant or
      belonging to and used in connection with the interest of Mortgagor in all
      or any portion of the Lands or the Systems, and (G) all Proceeds and
      products of any of the foregoing.

            (u) "UCC" means, at any time, the Uniform Commercial Code in effect
      in the state of Texas at that time.

      1.3 INTERPRETATIONS. All meanings assigned to any defined terms used in
this Deed of Trust, unless otherwise indicated, are to be equally applicable to
both the singular and plural forms of the terms defined. Article, Section,
Schedule, and Exhibit references are to Articles and Sections of and Schedules
and Exhibits to this Deed of Trust, unless otherwise specified. All references
to instruments, documents, contracts, and agreements are references to such
instruments, documents, contracts, and agreements as the same may be amended,
supplemented, and otherwise modified from time to time, unless otherwise
specified. The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Deed of Trust shall refer to this Deed of Trust as a
whole and not to any particular provision of this Deed of Trust.

                                  Page 9 of 33

<PAGE>

                                   ARTICLE II

                      GRANTING CLAUSES; SECURED OBLIGATIONS

      2.1 CONVEYANCE AND GRANT OF LIEN. In consideration of the advances,
issuances, or extensions by the Credit Parties to Borrower of the funds or
credit constituting the Secured Obligations (including the making of the
Advances and the issuing of the Letters of Credit), and in further consideration
of the mutual covenants contained herein, Mortgagor, by this Deed of Trust
hereby grants, sells, transfers, assigns and conveys with a general warranty of
title, and WITH THE POWER OF SALE, for the uses, purposes and conditions
hereinafter set forth, all of its right, title and interest in and to the
Mortgaged Property unto Trustee, and to his successor or successors or
substitutes IN TRUST, WITH POWER OF SALE, in trust to secure the payment and
performance of the Secured Obligations for the benefit of Mortgagee and the
ratable benefit of the Credit Parties.

TO HAVE AND TO HOLD the Mortgaged Property unto the Trustee and his successors
or substitutes in trust and to his and their successors and assigns forever for
the benefit of the Credit Parties, together with all and singular the rights,
hereditaments and appurtenances thereto in anywise appertaining or belonging, to
secure payment of the Secured Obligations and the performance of the covenants
of Mortgagor contained in this Deed of Trust. Mortgagor does hereby bind itself,
its successors and permitted assigns, to warrant and forever defend all and
singular the Mortgaged Property unto the Trustee and his successors or
substitutes in trust, and their successors and assigns, against every person
whomsoever lawfully claiming or to claim the same, or any part thereof.

      2.2 CONVEYANCE AND GRANT OF SECURITY INTEREST. For the same consideration
and to further secure the Secured Obligations, Mortgagor hereby grants to
Mortgagee for its benefit and the ratable benefit of the other Credit Parties a
security interest in and to the Mortgaged Property.

      2.3 ASSIGNMENT OF RENTS AND LEASES. Mortgagor hereby assigns, transfers,
conveys, and sets over to Mortgagee all of Mortgagor's estate, right, title and
interest in, to and under the Leases, whether existing on the date hereof or
hereafter entered into, together with any changes, extensions, revisions or
modifications thereof and all rights, powers, privileges, options and other
benefits of Mortgagor as the lessor under the Leases regarding the current
tenants and any future tenants, and all the Rents from the Leases, including
those now due, past due, or to become due. Mortgagor irrevocably appoints
Mortgagee its true and lawful attorney-in-fact, at the option of Mortgagee, upon
the occurrence and during the continuance of an Event of Default, to take
possession and control of the applicable portions of the Mortgaged Property,
pursuant to Mortgagor's rights under the Leases, to exercise any of Mortgagor's
rights under the Leases, and to demand, receive and enforce payment, to give
receipts, releases and satisfaction and to sue, in the name of Mortgagor or
Mortgagee, for all of the Rents. THE POWER OF ATTORNEY GRANTED HEREBY SHALL BE
IRREVOCABLE AND COUPLED WITH AN INTEREST AND SHALL TERMINATE ONLY UPON THE
INDEFEASIBLE PAYMENT IN FULL IN CASH OF THE SECURED OBLIGATIONS (INCLUDING ALL
LETTER OF CREDIT OBLIGATIONS), THE TERMINATION OR EXPIRATION OF ALL LETTERS OF
CREDIT AND ALL OBLIGATIONS OF THE ISSUING BANKS AND THE BANKS IN RESPECT OF
LETTERS OF CREDIT, AND THE EXPIRATION OR TERMINATION OF ALL COMMITMENTS, AND
MORTGAGOR HEREBY RELEASES MORTGAGEE

                                 Page 10 of 33

<PAGE>

FROM ALL LIABILITY (OTHER THAN AS A RESULT OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF MORTGAGEE) WHATSOEVER FOR THE EXERCISE OF THE FOREGOING POWER OF
ATTORNEY AND ALL ACTIONS TAKEN PURSUANT THERETO. The consideration received by
Mortgagor to execute and deliver this assignment and the liens and security
interests created herein is legally sufficient and will provide a direct
economic benefit to Mortgagor. It is intended by Mortgagor and Mortgagee that
the assignment set forth herein constitutes an absolute assignment and not
merely an assignment for additional security. Notwithstanding the foregoing,
this assignment shall not be construed to bind Mortgagee to the performance of
any of the covenants, conditions, or provisions of Mortgagor contained in the
Leases or otherwise to impose any obligation upon Mortgagee, and, so long as no
Event of Default shall have occurred and be continuing, Mortgagor shall have a
license, revocable by Mortgagee, to possess and control the Leases and collect
and receive the Rents. Upon the occurrence of an Event of Default, such license
in favor of Mortgagor shall be automatically revoked. Mortgagee's acceptance of
the assignment of the Rents under this Deed of Trust shall not be deemed to
constitute Mortgagee a "secured party in possession," nor obligate Mortgagee to
appear in or defend any proceeding relating to the Rents, any Leases, or the
Mortgaged Property, or to take any action hereunder, expend any money, incur any
expenses, or perform any obligation under any Leases.

      2.4 AFTER-ACQUIRED MORTGAGED PROPERTY. Any and all of the Mortgaged
Property which is acquired after the date of this Deed of Trust shall,
immediately and without any further conveyance, assignment, or act on the part
of Mortgagor or Mortgagee, be subject to the Liens granted pursuant to this Deed
of Trust as fully and completely as though specifically described herein and as
though such Mortgaged Property had been owned by Mortgagor on the date of this
Deed of Trust.

      2.5 REVOLVING CREDIT AND FUTURE ADVANCES. It is contemplated and
acknowledged that the Secured Obligations may include revolving credit loans and
advances from time to time, and that this Deed of Trust shall have effect as of
the date hereof to secure all Secured Obligations, regardless of whether any
amounts are advanced on the date hereof or on a later date or, whether having
been advanced, are later repaid in part or in whole and further advances made at
a later date. This Deed of Trust secures all future advances and obligations
constituting Secured Obligations.

      2.6 SECURITY FOR SECURED OBLIGATIONS. The Liens and other rights granted
pursuant to Section 2.1 and Section 2.2 of this Deed of Trust secure, and the
Mortgaged Property is security for, the prompt performance and payment in full
in cash when due, whether at stated maturity, by acceleration or otherwise, of
the Secured Obligations. Notwithstanding that the balance of the Secured
Obligations may at certain times be zero and that no Secured Obligations may at
certain times be outstanding, the Liens granted hereunder and this Deed of Trust
shall remain in full force and effect at all times and with the same priority
until the payment in full in cash of the Secured Obligations and the expiration
or termination of the Credit Documents.

      2.7 PRODUCTS AND PROCEEDS. THE LIENS AND SECURITY INTERESTS GRANTED BY
MORTGAGOR UNDER THIS DEED OF TRUST INCLUDE ALL PRODUCTS AND PROCEEDS OF THE
MORTGAGED PROPERTY.

                                 Page 11 of 33

<PAGE>

                                   ARTICLE III

                   REPRESENTATIONS, WARRANTIES, AND COVENANTS

      3.1 REPRESENTATIONS AND WARRANTIES. Subject to the provisions of the
Credit Agreement and any express exceptions contained therein, Mortgagor
represents and warrants as follows:

            (a) Mortgagor is duly organized, validly existing, and in good
      standing under the laws of the jurisdiction of its organization and in
      good standing and qualified to do business in each jurisdiction where its
      ownership or lease of property or conduct of its business requires such
      qualification and where a failure to be qualified could reasonably be
      expected to cause a Material Adverse Effect.

            (b) The execution, delivery, and performance by Mortgagor of this
      Deed of Trust and the consummation of the transactions contemplated hereby
      (a) are within Mortgagor's powers, (b) have been duly authorized by all
      necessary action, (c) do not contravene (i) Mortgagor's Organizational
      Documents or (ii) any applicable Legal Requirement or Contract binding on
      or affecting Mortgagor or its property, and (d) will not result in or
      require the creation or imposition of any Lien prohibited by the Credit
      Documents.

            (c) No authorization or approval or other action by, and no notice
      to or filing with, any Governmental Authority is required for (i) the due
      execution, delivery and performance by Mortgagor of this Deed of Trust or
      (ii) the consummation of the transactions contemplated thereby.

            (d) This Deed of Trust has been duly executed and delivered by
      Mortgagor. This Deed of Trust to which Mortgagor is a party is the legal,
      valid, and binding obligation of Mortgagor and is enforceable against
      Mortgagor in accordance with its terms, except as such enforceability may
      be limited by any applicable bankruptcy, insolvency, reorganization,
      moratorium, or similar law affecting creditors' rights generally.

            (e) Mortgagor has good, valid and marketable title to the Mortgaged
      Property free from all Liens, security interests or other encumbrances
      other than the Permitted Liens. Other than the Permitted Liens and other
      than those for which waivers or consents have been obtained and delivered
      to the Mortgagee on or prior to the date hereof, there are no preferential
      purchase rights held by third parties affecting any part of the Mortgaged
      Property or rights of third parties to prohibit the assignment,
      conveyance, pledge, or mortgage of any part of the Mortgaged Property
      without the consent of such third parties.

            (f) The Land, Servitudes and other interests and rights in real
      property described in Exhibit A constitute all of the Lands and Servitudes
      necessary for the construction, ownership, maintenance, access to and
      operation of the Systems affected by

                                 Page 12 of 33

<PAGE>

      this Deed of Trust and the description in Exhibit A hereto includes a
      complete and accurate description of all such properties, rights, and
      interests in real property.

            (g) All of the Contracts affecting any interest in the Lands or the
      rest of the Mortgaged Property are valid, subsisting and in full force and
      effect, and Mortgagor has no knowledge that a default exists under any of
      the terms or provisions, express or implied, of any of such Contracts. All
      of the Contracts and obligations of Mortgagor that relate to the Lands
      constitute legal, valid and binding obligations of Mortgagor. Neither
      Mortgagor nor, to the knowledge of Mortgagor, any other party to any such
      Contract (i) is in breach of or default, or with the lapse of time or the
      giving of notice, or both, would be in breach or default, with respect to
      any obligations under any such Contract, whether express or implied, or
      (ii) has given or threatened to give notice of any default under or
      inquiry into any possible default under, or action to alter, terminate,
      rescind or procure a judicial reformation of, any such Contract.

            (h) All rentals and other payments due under or with respect to the
      Lands have been properly and timely paid. All taxes due and payable have
      been properly and timely paid except for such taxes being contested in
      good faith by appropriate proceedings, and for which reserves shall have
      been made therefore and except for such taxes as are being currently paid
      prior to delinquency in the ordinary course of business. All expenses due
      and payable under the terms of the Contracts have been properly and timely
      paid except for such expenses being contested in good faith by appropriate
      proceedings, and for which reserves shall have been made therefor and
      except for such expenses as are being currently paid prior to delinquency
      in the ordinary course of business.

            (i) Mortgagor shall, at all times, comply in all material respects
      with all Environmental Law.

            (j) To the knowledge of Mortgagor, except in compliance with all
      Environmental Law and in the ordinary course of Mortgagor's business, the
      Mortgaged Property has never been used by Mortgagor or any prior owner of
      the Mortgaged Property as a dump site or storage (whether temporary or
      permanent) site for Hazardous Substance.

            (k) Mortgagor has filed with the appropriate state and federal
      agencies all necessary rate and collection filings and all necessary
      applications for well determinations under the Natural Gas Act of 1938, as
      amended, the Natural Gas Policy Act of 1978, as amended, and the rules and
      regulations of the Federal Energy Regulatory Commission (the "FERC")
      thereunder, and each such application has been approved by or is pending
      before the appropriate state or federal agency.

            (l) All necessary regulatory filings have been properly made in
      connection with the operation of Mortgagor's business related to the
      Mortgaged Property except where a failure to make such filing could
      reasonably be expected to cause a Material Adverse Effect.

                                 Page 13 of 33

<PAGE>

            (m) ADDRESS AND IDENTIFICATION INFORMATION.

                  (i) As of the date of this Mortgage, Mortgagor's address,
            place of business, residence, chief executive office and office
            where Mortgagor keeps its records concerning Accounts, Contract
            Rights and General Intangibles is set forth in the Section 6.12, and
            there has been no change in the location of any Mortgagor's place of
            business, residence, chief executive office and office where it
            keeps such records and no change of Mortgagor's name during the four
            months immediately preceding the date of this Deed of Trust.

                  (ii) Mortgagor's (x) federal tax identification number is
            ___________ and organizational number is ___________, (y) state of
            formation or organization, as applicable is Delaware, and (z)
            correctly-spelled name is ________________.

                  (iii) Mortgagee's address is set forth in Section 6.12 hereto.

                  (iv) Trustee's address is set forth in Section 6.12 hereto.

      3.2 COVENANTS. Subject to the provisions of the Credit Agreement and any
express exceptions contained therein, Mortgagor agrees as follows:

            (a) Payment of Lienable Claims. Mortgagor shall make prompt payment
      when due and owing of all taxes, assessments, and governmental charges
      imposed on or assessed against this instrument, upon the interest of
      Mortgagee or the Trustee, upon the Mortgaged Property or any part thereof,
      or upon the revenues, income, or profits from any of the above, except for
      such amounts as are being contested in good faith by appropriate
      proceedings and for which adequate reserves shall have been established .
      Mortgagor shall make prompt payment when due and owing of all lawful
      claims and demands of mechanics, materialmen, laborers, and others which,
      if unpaid, might result in, or permit the creation of, a lien on the
      Mortgaged Property or any part thereof, and in general will do or cause to
      be done everything necessary so that the lien hereof shall be fully
      preserved, except for such amounts as are being contested in good faith by
      appropriate proceedings and for which adequate reserves shall have been
      established.

            (b) Operation of Mortgaged Property. Mortgagor shall operate the
      Mortgaged Property, continuously and in a good workmanlike manner in
      accordance with all Legal Requirements and comply in all material respects
      with all terms and conditions of the Servitudes it now holds and each
      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 or any other Credit Party to
      any contract or obligation or render the Trustee or Mortgagee or any other
      Credit Party in any way responsible or liable for bills or obligations
      incurred by Mortgagor.

            (c) Maintenance of Easements. Mortgagor shall keep and continue, or
      cause to be kept and continued, all material Servitudes, estates and
      interests herein described and all 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.

                                 Page 14 of 33

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      Without limiting the generality of the foregoing sentence, Mortgagor shall
      not release any of the Servitudes without the prior written consent of
      Mortgagee.

            (d) Other Encumbrances. Mortgagor shall not create, assume, incur or
      suffer to exist, or permit any of its Subsidiaries to create, assume,
      incur or suffer to exist, any Lien on or in respect of any of the
      Mortgaged Property, whether now owned or hereafter acquired, or assign or
      otherwise convey, or permit any such Subsidiary to assign or otherwise
      convey, any right to receive income, in each case to secure or provide for
      the payment of any Debt, trade payable or other obligation or liability of
      any Person; provided, however, that notwithstanding the foregoing,
      Mortgagor or any of its Subsidiaries may create, incur, assume or suffer
      to exist the Permitted Liens.

            (e) Environmental Conditions. If at any time any Hazardous Substance
      is discovered on, under, or about any of the Realty Collateral or any
      other real property owned or operated by Mortgagor ("Other Property") in
      violation of any Environmental Law in any material respect, Mortgagor will
      inform Administrative Agent of the same and of Mortgagor's proposed
      response as required under Environmental Law, including, without
      limitation, the performance of any required investigatory or remedial
      activity, and Mortgagor will, at its sole cost and expense, remedy or
      remove such Hazardous Substances from such real property or Other Property
      or the groundwater underlying such real property or Other Property in
      accordance with (a) the approval of the appropriate Governmental
      Authority, if any such approval is required under Environmental Laws, and
      (b) all Environmental Laws. In addition to all other rights and remedies
      of Administrative Agent and the Credit Parties under the Credit Documents,
      but subject to Mortgagor's right to contest the performance of any such
      response, as further described in this Section, if such Hazardous
      Substances require remediation or removal as set forth in this Section but
      has not been remedied or removed from the affected Mortgaged Property or
      Other Property or the groundwater underlying such Mortgaged Property or
      Other Property by the Borrower within the time periods contemplated by the
      applicable response, Administrative Agent may, at its sole discretion and
      after giving Mortgagor written notification of its intention to
      self-implement any required response, pay to have the same remedied or
      removed in accordance with the applicable remediation program, and
      Mortgagor will reimburse Administrative Agent therefore within ten days of
      Administrative Agent's demand for payment. Mortgagor shall have the right
      to contest any notice, directive or other demand of any third party,
      including without limitation, any Governmental Authority, to remedy or
      remove Hazardous Substances from any Mortgaged Property or any Other
      Property so long as Mortgagor diligently prosecutes such contest to
      completion, complies with any final order or determination and, before
      such contest, either furnishes Administrative Agent security in an amount
      equal to the cost of remediation or removal of the Hazardous Substances or
      posts a bond with a surety satisfactory to Administrative Agent in such
      amount. MORTGAGOR SHALL BE SOLELY RESPONSIBLE FOR, AND WILL INDEMNIFY AND
      HOLD HARMLESS ADMINISTRATIVE AGENT AND EACH OTHER CREDIT PARTY AND EACH OF
      THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS AND
      ASSIGNS FROM AND AGAINST, ANY AND ALL LOSSES, DAMAGES, DEMANDS, CLAIMS,
      CAUSES OF ACTION, JUDGMENTS, ACTIONS, ASSESSMENTS, PENALTIES, COSTS,
      EXPENSES

                                 Page 15 of 33

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      AND LIABILITIES DIRECTLY OR INDIRECTLY ARISING OUT OF OR ATTRIBUTABLE TO
      ANY HAZARDOUS SUBSTANCES AT ANY REALTY COLLATERAL OR ANY OTHER PROPERTY,
      INCLUDING, WITHOUT LIMITATION, THE FOLLOWING: (Y) THE COSTS OF ANY REPAIR,
      CLEANUP OR DETOXIFICATION OF ANY MORTGAGED PROPERTY OR OTHER PROPERTY
      REQUIRED UNDER ENVIRONMENTAL LAW, AND THE PREPARATION AND IMPLEMENTATION
      OF ANY CLOSURE, REMEDIAL OR OTHER PLANS REQUIRED UNDER ENVIRONMENTAL LAW;
      AND (Z) ALL REASONABLE COSTS AND EXPENSES INCURRED BY ADMINISTRATIVE AGENT
      OR ANY OTHER CREDIT PARTY IN CONNECTION WITH CLAUSE (Y) ABOVE, INCLUDING
      REASONABLE ATTORNEYS' FEES; PROVIDED, HOWEVER, THAT MORTGAGOR SHALL NOT BE
      LIABLE FOR ANY OF THE FOREGOING THAT IS FOUND IN A FINAL, NON-APPEALABLE
      JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM THE
      GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ADMINISTRATIVE AGENT OR A CREDIT
      PARTY AFTER TAKING POSSESSION OF THE MORTGAGED PROPERTY. The covenants and
      indemnities provided in this section shall survive the repayment or any
      other satisfaction of the Secured Obligations.

            (f) Notification. Mortgagor will notify Mortgagee of any material
      destruction, loss, termination or acquisition of any of its Mortgaged
      Property within three Business Days thereof.

      3.3 FURTHER ASSURANCES; DEFENSE OF CLAIMS. Subject to the provisions of
the Credit Agreement and any express exceptions contained therein, Mortgagor
further agrees as follows:

            (a) Promptly upon request and at its expense, Mortgagor shall cure
      any defects in the creation, execution and delivery of this Deed of Trust.
      Mortgagor hereby authorizes the Mortgagee to file any financing statements
      without the signature of Mortgagor to the extent permitted by applicable
      law in order to perfect or maintain the perfection of any security
      interest granted under this Deed of Trust. Mortgagor at its expense will
      promptly execute and deliver to the Mortgagee upon reasonable request all
      such other documents, agreements and instruments to comply with or
      accomplish the covenants and agreements of Mortgagor in this Deed of
      Trust, or to further evidence and more fully describe the Mortgaged
      Property, or to correct any omissions in this Deed of Trust, or to state
      more fully the security obligations set out herein, or to perfect, protect
      or preserve any Liens created pursuant hereto, or to make any recordings,
      to file any notices or obtain any consents, all as may be necessary or
      appropriate in connection therewith or to enable the Mortgagee to exercise
      and enforce its rights and remedies with respect to any Mortgaged
      Property.

            (b) Within 30 days after a request by the Mortgagee or any Credit
      Party to cure any title defects or exceptions which are not Permitted
      Liens and which, individually or in the aggregate, (i) materially
      interfere with the ordinary conduct of Business, (ii) materially detract
      from the value or the use of the portion of the Mortgaged Property
      affected thereby, or (iii) could reasonably be expected to have a Material
      Adverse Effect,

                                 Page 16 of 33

<PAGE>

      the Mortagor shall cure such title defects or exceptions or substitute
      such Mortgaged Property with acceptable Property of an equivalent value
      with no title defects or exceptions and deliver to the Mortagee
      satisfactory title evidence in form and substance acceptable to the
      Mortagee in its reasonable business judgment as to the Mortagor's title in
      such Property and the Mortagee's Liens and security interests therein.

            (c) Mortgagor shall promptly notify Mortgagee in writing of the
      commencement of any legal proceeding affecting Mortgagor's title to the
      Mortgaged Property or Mortgagee's Lien or security interest in the
      Mortgaged Property, or any part thereof and which (i) materially
      interferes with the ordinary conduct of Business, (ii) materially detracts
      from the value or the use of the portion of the Mortgaged Property
      affected thereby, or (iii) could reasonably be expected to have a Material
      Adverse Effect. Mortgagor shall take such action, employing attorneys
      agreeable to Mortgagee, as may be necessary to preserve Mortgagor's, the
      Trustee's and Mortgagee's rights affected thereby. If Mortgagor fails or
      refuses to adequately or vigorously, in the reasonable judgment of
      Mortgagee, defend Mortgagor's, the Trustee's or Mortgagee's rights to the
      Mortgaged Property, the Trustee or Mortgagee may take such action on
      behalf of and in the name of Mortgagor and at Mortgagor's expense.
      Moreover, Mortgagee or the Trustee on behalf of Mortgagee, may take such
      independent action in connection therewith as they may in their discretion
      deem proper, including the right to employ independent counsel and to
      intervene in any suit affecting the Mortgaged Property. All costs,
      expenses and attorneys' fees incurred by Mortgagee or the Trustee pursuant
      to this Section 6.3 or in connection with the defense by Mortgagee of any
      claims, demands or litigation relating to Mortgagor, the Mortgaged
      Property or the transactions contemplated in this Deed of Trust shall be
      paid by Mortgagor as provided in Section 6.2 below.

            (d) Mortgagor shall maintain and preserve the Lien and security
      interest herein created as an Acceptable Security Interest.

            (e) Mortgagor shall give Mortgagee at least thirty days' prior
      written notice before it amends, its name or changes its jurisdiction of
      incorporation, organization, or formation, as applicable.

      3.4 RECORDING. Mortgagor shall promptly (at Mortgagor's own expense)
record, register, deposit and file this Deed of Trust and every other instrument
in addition or supplement hereto, including applicable financing statements, in
such offices and places within the state where the Mortgaged Property is located
and at such times and as often as may be necessary to preserve, protect and
renew the Lien and security interest herein created as an Acceptable Security
Interest on real or personal property as the case may be, and otherwise shall do
and perform all matters or things necessary or expedient to be done or observed
by reason of any Legal Requirement for the purpose of effectively creating,
perfecting, maintaining and preserving the Lien and security interest created
hereby in and on the Mortgaged Property.

      3.5 RECORDS, STATEMENTS AND REPORTS. Mortgagor shall keep proper books of
record and account in which complete and correct entries shall be made of
Mortgagor's transactions in accordance with the method of accounting required in
the Credit Agreement and shall furnish or

                                 Page 17 of 33

<PAGE>

cause to be furnished to Mortgagee the reports required to be delivered pursuant
to the terms of the Credit Agreement.

      3.6 COVENANTS RUNNING WITH THE LAND. All covenants and agreements herein
contained shall constitute covenants running with the Land.

      3.7 INCORPORATION OF COVENANTS FROM CREDIT AGREEMENT. The covenants
applicable to Mortgagor and to the Mortgaged Property contained in Article V and
Article VI of the Credit Agreement are hereby confirmed and restated, each such
covenant, together with all related definitions and ancillary provisions, being
hereby incorporated into this Deed of Trust by reference as though specifically
set forth in this Section, and Mortgagor hereby agrees that Mortgagor shall
perform and comply with such covenants until the indefeasible payment in full in
cash of the Secured Obligations (including all Letter of Credit Obligations),
the termination or expiration of all Letters of Credit and all obligations of
the Issuing Banks and the Banks in respect of Letters of Credit, and the
expiration or termination of all Commitments.

                                   ARTICLE IV

                                     DEFAULT

      4.1 EVENTS OF DEFAULT. An Event of Default under the terms of the Credit
Agreement shall constitute an "Event of Default" under this Deed of Trust.

      4.2 ACCELERATION UPON DEFAULT. Upon the occurrence and during the
continuance of any Event of Default (other than pursuant to paragraph (e) of
Section 7.01 of the Credit Agreement), Mortgagee may, or shall at the request of
the Majority Banks, declare the entire unpaid principal of, and the interest
accrued on, and all other amounts owed in connection with, the Secured
Obligations to be forthwith due and payable, whereupon the same shall become
immediately due and payable without any protest, presentment, demand, notice of
intent to accelerate, notice of acceleration or further notice of any kind, all
of which are hereby expressly waived by Mortgagor. If any Event of Default
pursuant to paragraph (e) of Section 7.01 of the Credit Agreement shall occur,
the entire unpaid principal of, and the interest accrued on, and all other
amounts owed in connection with, the Secured Obligations shall immediately and
automatically become and be due and payable in full, without presentment,
demand, protest or any notice of any kind (including, without limitation, any
notice of intent to accelerate or notice of acceleration) all of which are
hereby expressly waived by Mortgagor. Whether or not Mortgagee or the Majority
Banks elect to accelerate as herein provided, Mortgagee may simultaneously, or
thereafter, without any further notice to Mortgagor, exercise any other right or
remedy provided in this Deed of Trust or otherwise existing under the Credit
Agreement or any other Credit Document or any other agreement, document, or
instrument evidencing obligations owing from Mortgagor to any of the Credit
Parties.

                                 Page 18 of 33

<PAGE>

                                    ARTICLE V

                               MORTGAGEE'S RIGHTS

      5.1 RIGHTS TO REALTY COLLATERAL UPON DEFAULT.

            (a) Operation of Property by Mortgagee. Upon the occurrence and
      during the continuance of any Event of Default, and in addition to all
      other rights of Mortgagee, Mortgagee shall have the following rights and
      powers (but no obligation):

                  (i) To hold, use, administer, manage and operate the Realty
            Collateral to the extent that Mortgagor could do so, and without any
            liability to Mortgagor in connection with such operations; and

                  (ii) Either in person or by agent, with or without bringing
            any action or proceeding, or by a receiver appointed by a court, and
            without regard to the adequacy of its security, to enter upon and
            take possession of the Realty Collateral or any part thereof, and
            exclude Mortgagor therefrom, and do any other acts which it deems
            necessary or desirable to preserve the value, marketability or
            rentability of the Realty Collateral, or part thereof or interest
            therein, increase the income therefrom or protect the security
            hereof and, with or without taking possession of the Realty
            Collateral, take any action described herein, sue for or otherwise
            collect the Rents, including those past due and unpaid, and apply
            the same, less reasonable costs and expenses of operation and
            collection including reasonable attorneys' fees, upon the Secured
            Obligations, all in such order as Mortgagee may determine.

      The entering upon and taking possession of the Realty Collateral, the
      taking of any action described herein, the collection of such Rents, and
      the application thereof as aforesaid, shall not cure or waive any Event of
      Default or notice of default or invalidate any act done in response to
      such Event of Default or pursuant to such notice of default and,
      notwithstanding the continuance in possession of the Realty Collateral or
      the collection, receipt and application of Rents, Mortgagee shall be
      entitled to exercise every right provided for in any of the Credit
      Documents or by law upon any Event of Default, including the right to
      exercise the power of sale herein conferred. Mortgagee may designate any
      person, firm, corporation or other entity to act on its behalf in
      exercising the foregoing rights and powers.

            (b) Judicial Proceedings. Upon the occurrence and during the
      continuance of any Event of Default, the Trustee and/or Mortgagee, in lieu
      of or in addition to exercising the power of sale hereafter given, may
      proceed by a suit or suits, in equity or at law (i) for the specific
      performance of any covenant or agreement herein contained or in aid of the
      execution of any power herein granted, (ii) for the appointment of a
      receiver whether there is then pending any foreclosure hereunder or the
      sale of the Realty Collateral, or (iii) for the enforcement of any other
      appropriate legal or equitable remedy; and further, in lieu of the
      non-judicial power of sale hereafter given for Mortgaged Property located
      in the State of Texas, the Trustee may proceed by suit for a sale of the
      Realty Collateral.

                                 Page 19 of 33

<PAGE>

            (c) Foreclosure by Private Power of Sale of Collateral. Upon the
      occurrence and during the continuance of any Event of Default, the Trustee
      shall have the right and power to sell, as the Trustee may elect, all or a
      portion of the Mortgaged Property at one or more sales as an entirety or
      in parcels, in accordance with Section 51.002 of the Texas Property Code,
      as amended from time to time (or any successor provisions of Texas
      governing real property foreclosure sales) or with any applicable state
      law. Mortgagor hereby designates as Mortgagor's address for the purpose of
      notice the address set out in Section 6.12; provided that Mortgagor may by
      written notice to Mortgagee designate a different address for notice
      purposes. Any purchaser or purchasers will be provided with a general
      warranty conveyance binding Mortgagor and Mortgagor's successors and
      assigns. Sale of a part of the Realty Collateral will not exhaust the
      power of sale, and sales may be made from time to time until all of the
      Realty Collateral is sold or all of the Secured Obligations are paid in
      full.

            (d) Certain Aspects of Sale. Mortgagee will have the right to become
      the purchaser at any foreclosure sale and to credit the then outstanding
      balance of the Secured Obligations against the amount payable by Mortgagee
      as purchaser at such sale. Statements of fact or other recitals contained
      in any conveyance to any purchaser or purchasers at any sale made
      hereunder will conclusively establish the occurrence of any Event of
      Default, any acceleration of the maturity of the Secured Obligations, the
      advertisement and conduct of such sale in the manner provided herein, the
      appointment of any successor-Trustee hereunder and the truth and accuracy
      of all other matters stated therein. Mortgagor does hereby ratify and
      confirm all legal acts that the Trustee may do in carrying out the
      Trustee's duties and obligations under this Deed of Trust, and Mortgagor
      hereby irrevocably appoints Mortgagee to be the attorney-in-fact of
      Mortgagor and in the name and on behalf of Mortgagor to execute and
      deliver any deeds, transfers, conveyances, assignments, assurances and
      notices which Mortgagor ought to execute and deliver and do and perform
      any and all such acts and things which Mortgagor ought to do and perform
      under the covenants herein contained and generally to use the name of
      Mortgagor in the exercise of all or any of the powers hereby conferred on
      Trustee. Upon any sale, whether under the power of sale hereby given or by
      virtue of judicial proceedings, it shall not be necessary for Trustee or
      any public officer acting under execution or by order of court, to have
      physically present or constructively in his possession any of the
      Mortgaged Property, and Mortgagor hereby agrees to deliver to the
      purchaser or purchasers at such sale on the date of sale the Mortgaged
      Property purchased by such purchasers at such sale and if it should be
      impossible or impracticable to make actual delivery of such Mortgaged
      Property, then the title and right of possession to such Mortgaged
      Property shall pass to the purchaser or purchasers at such sale as
      completely as if the same had been actually present and delivered.

            (e) Receipt to Purchaser. Upon any sale made under the power of sale
      herein granted, the receipt of the Trustee will be sufficient discharge to
      the purchaser or purchasers at any sale for its purchase money, and such
      purchaser or purchasers, will not, after paying such purchase money and
      receiving such receipt of the Trustee, be obligated to see to the
      application of such purchase money or be responsible for any loss,
      misapplication or non-application thereof.

                                 Page 20 of 33

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            (f) Effect of Sale. Any sale or sales of the Realty Collateral will
      operate to divest all right, title, interest, claim and demand whatsoever,
      either at law or in equity, of Mortgagor in and to the premises and the
      Realty Collateral sold, and will be a perpetual bar, both at law and in
      equity, against Mortgagor, Mortgagor's successors or assigns, and against
      any and all persons claiming or who shall thereafter claim all or any of
      the Realty Collateral sold by, through or under Mortgagor, or Mortgagor's
      successors or assigns. Nevertheless, if requested by the Trustee so to do,
      Mortgagor shall join in the execution and delivery of all proper
      conveyances, assignments and transfers of the Property so sold. The
      purchaser or purchasers at the foreclosure sale will receive as incident
      to his, her, its or their own ownership, immediate possession of the
      Realty Collateral purchased and Mortgagor agrees that if Mortgagor retains
      possession of the Realty Collateral or any part thereof subsequent to such
      sale, Mortgagor will be considered a tenant at sufferance of the purchaser
      or purchasers and will be subject to eviction and removal by any lawful
      means, with or without judicial intervention, and all damages by reason
      thereof are hereby expressly waived by Mortgagor.

            (g) Application of Proceeds. The proceeds of any sale of the Realty
      Collateral or any part thereof, whether under the power of sale herein
      granted and conferred or by virtue of judicial proceedings, shall either
      be, at the option of Mortgagee, applied at the time of receipt, or held by
      Mortgagee in a cash collateral account as additional Mortgaged Property,
      and in either case, applied in the order set forth in Section 7.06 of the
      Credit Agreement.

            (h) Mortgagor's Waiver of Appraisement and Marshalling. Mortgagor
      agrees, to the full extent that Mortgagor may lawfully so agree, that
      Mortgagor will not at any time insist upon or plead or in any manner
      whatever claim the benefit of any appraisement, valuation, stay, extension
      or redemption law, now or hereafter in force, in order to prevent or
      hinder the enforcement or foreclosure of this Deed of Trust, the absolute
      sale of the Mortgaged Property, including the Realty Collateral, or the
      possession thereof by any purchaser at any sale made pursuant to this Deed
      of Trust or pursuant to the decree of any court of competent jurisdiction;
      and Mortgagor, for Mortgagor and all who may claim through or under
      Mortgagor, hereby waives the benefit of all such laws and, to the extent
      that Mortgagor may lawfully do so under any applicable law, any and all
      rights to have the Mortgaged Property, including the Realty Collateral,
      marshaled upon any foreclosure of the Lien hereof or sold in inverse order
      of alienation. Mortgagor agrees that the Trustee may sell the Mortgaged
      Property, including the Realty Collateral, in part, in parcels or as an
      entirety as directed by Mortgagee.

            (i) Waiver of Notices, Appraisements, Reinstatement and other
      Rights. Mortgagor hereby expressly waives, to the full extent permitted by
      applicable law, any and all rights or privileges of notices,
      appraisements, redemption and any prerequisite in the event of foreclosure
      of the liens and/or security interests created herein, including without
      limitation, any right to reinstatement prior to foreclosure. Mortgagee at
      all times shall have the right to release any part of the Mortgaged
      Property now or hereafter subject to the liens or security interests of
      this Deed of Trust, any part of 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

                                 Page 21 of 33

<PAGE>

      part of the Mortgaged Property, proceeds or income, and without affecting
      the liens or security interests hereof as to the part or parts of the
      Mortgaged Property, proceeds or income not so released or the right to
      receive future proceeds and income

      5.2 RIGHTS TO PERSONALTY COLLATERAL UPON DEFAULT. Upon the occurrence and
during the continuance of any Event of Default, Mortgagee or the Trustee may
proceed against the Personalty Collateral in accordance with the rights and
remedies granted herein with respect to the Realty Collateral, or will have all
rights and remedies granted by the Uniform Commercial Code as in effect in Texas
and this Deed of Trust. Mortgagee shall have the right to take possession of the
Personalty Collateral, and for this purpose Mortgagee may enter upon any
premises on which any or all of the Personalty Collateral is situated and, to
the extent that Mortgagor could do so, take possession of and operate the
Personalty Collateral or remove it therefrom. Mortgagee may require Mortgagor to
assemble the Personalty Collateral and make it available to Mortgagee at a place
to be designated by Mortgagee which is reasonably convenient to both parties.
Unless the Personalty Collateral is perishable or threatens to decline speedily
in value or is of a type customarily sold on a recognized market, Mortgagee will
send Mortgagor reasonable notice of the time and place of any public sale or of
the time after which any private sale or other disposition of the Personalty
Collateral is to be made. This requirement of sending reasonable notice will be
met if such notice is mailed, postage prepaid, to Mortgagor at the address
designated in Section 6.12 hereof (or such other address as has been designated
as provided herein) at least ten days before the time of the sale or
disposition. In addition to the expenses of retaking, holding, preparing for
sale, selling and the like, Mortgagee will be entitled to recover attorney's
fees and legal expenses as provided for in this Deed of Trust and in the
writings evidencing the Secured Obligations before applying the balance of the
proceeds from the sale or other disposition toward satisfaction of the Secured
Obligations. Mortgagor will remain liable for any deficiency remaining after the
sale or other disposition. Mortgagor hereby consents and agrees that any
disposition of all or a part of the Mortgaged Property may be made without
warranty of any kind whether expressed or implied.

      5.3 RIGHTS TO FIXTURE COLLATERAL UPON DEFAULT. Upon the occurrence and
during the continuance of any Event of Default, Mortgagee may elect to treat the
Fixture Collateral as either Realty Collateral or as Personalty Collateral (but
not both) and proceed to exercise such rights as apply to the type of Mortgaged
Property selected.

      5.4 CERTAIN REMEDIES RELATED TO RENTS. After the occurrence and during the
continuance of an Event of Default, the Mortgagee may by written notice to
Mortgagor terminate Mortgagor's license to collect the Rents hereunder. Any
Rents received by Mortgagor after such notice shall be held in trust for the
benefit of the Mortgagee, segregated from the other funds of Mortgagor, and
immediately paid over to the Mortgagee, with any necessary endorsement.
Mortgagor irrevocably authorizes all parties obligated to pay Rents to accept
any notice from the Mortgagee that Mortgagor's license to collect the Rents has
been terminated after the occurrence and during the continuance of an Event of
Default and, following such notice, to follow the instructions of the Mortgagee
and ignore the instructions of Mortgagor with respect to collecting the Rents,
including instructions which direct the obligors to pay all amounts due directly
to the Mortgagee. Upon such notification and at the expense of Mortgagor, the
Mortgagee may enforce collection of any Rents, and adjust, settle, or compromise
the amount or payment thereof.

                                 Page 22 of 33

<PAGE>

      5.5 ACCOUNT DEBTORS. Mortgagee may, in its discretion, after the
occurrence and during the continuance of any Event of Default, notify any
account debtor to make payments directly to Mortgagee and contact account
debtors directly to verify information furnished by Mortgagor. Mortgagee shall
not have any obligation to preserve any rights against prior parties.

      5.6 COSTS AND EXPENSES. All reasonable sums advanced or costs or expenses
incurred by Mortgagee (either by it directly or on its behalf by the Trustee or
any receiver appointed hereunder) in protecting and enforcing its rights
hereunder shall constitute a demand obligation owing by Mortgagor to Mortgagee
as part of the Obligations. Mortgagor hereby agrees to repay such reasonable
sums on demand plus interest thereon from the date of the advance or incurrence
until reimbursement of Mortgagee at the same rate of interest as charged
Reference Rate Advances when an Event of Default exists as set forth in the
Credit Agreement.

      5.7 SET-OFF. Upon the occurrence and during the continuance of any Event
of Default, Mortgagee shall have the right to set-off any funds of Mortgagor in
the possession of Mortgagee against any amounts then due by Mortgagor to
Mortgagee pursuant to this Deed of Trust.

                                   ARTICLE VI

                                  MISCELLANEOUS

      6.1 TRUSTEES.

            (a) Successor Trustees. The Trustee may resign in writing addressed
      to Mortgagee or be removed at any time with or without cause by an
      instrument in writing duly executed by Mortgagee. In case of the death,
      resignation or removal of the Trustee, a successor Trustee may be
      appointed by Mortgagee by instrument of substitution complying with any
      applicable requirements of law, and in the absence of any requirement,
      without other formality other than an appointment and designation in
      writing. The appointment and designation will vest in the named successor
      Trustee all the estate and title of the Trustee in all of the Mortgaged
      Property and all of the rights, powers, privileges, immunities and duties
      hereby conferred upon the Trustee. All references herein to the Trustee
      will be deemed to refer to any successor Trustee from time to time acting
      hereunder.

            (b) Indemnification of Trustee. The Trustee shall not be liable for
      any error of judgment or act done by the Trustee in good faith, or be
      otherwise responsible or accountable under any circumstances whatsoever,
      INCLUDING THE TRUSTEE'S OWN NEGLIGENCE, but excluding any of the Trustee's
      own gross negligence or willful misconduct found to be such by a final,
      non-appealable judgment by a court of competent jurisdiction. The Trustee
      may rely on any instrument, document, or signature authorizing or
      supporting any action taken or proposed to be taken by him hereunder,
      believed by him in good faith to be genuine. All moneys received by the
      Trustee shall, until used or applied as herein provided, be held in trust
      for the purposes for which they were received, but need not be segregated
      in any manner from any other moneys (except to the extent required by
      law), and the Trustee shall have no liability for interest on any moneys

                                 Page 23 of 33

<PAGE>

      received by him hereunder. MORTGAGOR SHALL REIMBURSE THE TRUSTEE FOR, AND
      INDEMNIFY AND SAVE THE TRUSTEE HARMLESS AGAINST, ANY AND ALL LIABILITY AND
      EXPENSES WHICH MAY BE INCURRED BY THE TRUSTEE IN THE PERFORMANCE OF THE
      TRUSTEE'S DUTIES HEREUNDER, INCLUDING THOSE INCURRED AS A RESULT OF THE
      TRUSTEE'S OWN NEGLIGENCE, BUT EXCLUDING SUCH LIABILITIES AND EXPENSES THAT
      ARE FOUND BY A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT
      JURISDICTION TO HAVE BEEN INCURRED AS A RESULT OF THE GROSS NEGLIGENCE,
      WILLFUL MISCONDUCT, OR BAD FAITH OF THE TRUSTEE. MORTGAGOR'S OBLIGATIONS
      UNDER THIS SECTION 6.1(b) SHALL SURVIVE THE TERMINATION OF THIS DEED OF
      TRUST, THE PAYMENT IN FULL OF THE SECURED OBLIGATIONS, THE TERMINATION OF
      ALL OBLIGATIONS OF THE ISSUING BANKS AND THE BANKS IN RESPECT OF LETTERS
      OF CREDIT, AND THE TERMINATION OR EXPIRATION OF THE COMMITMENTS.

            (c) Duties of Trustee. It shall be no part of the duty of the
      Trustee to see to any recording, filing or registration of this Deed of
      Trust or any other instrument in addition or supplemental hereto, or to
      see to the payment of or be under any duty with respect to any tax or
      assessment or other governmental charge which may be levied or assessed on
      the Mortgaged Property, any part thereof, or against Mortgagor, or to see
      to the performance or observance by Mortgagor of any of the covenants and
      agreements contained herein. Trustee shall not be responsible for the
      execution, acknowledgment or validity of this Deed of Trust or of any
      instrument in addition or supplemental hereto or for the sufficiency of
      the security purported to be created hereby, and makes no representation
      in respect thereof or in respect of the rights of Mortgagee. Trustee shall
      have the right to seek the advice of counsel upon any matters arising
      hereunder and shall be fully protected in relying as to legal matters on
      the advice of counsel. Trustee shall not incur any personal liability
      hereunder except for his own willful misconduct; and the Trustee shall
      have the right to rely on any instrument, document or signature
      authorizing or supporting any action taken or proposed to be taken by him
      hereunder, believed by him in good faith to be genuine.

      6.2 ADVANCES BY MORTGAGEE OR TRUSTEE. Each and every covenant of Mortgagor
herein contained shall be performed and kept by Mortgagor solely at Mortgagor's
expense. If Mortgagor fails to perform or keep any of the covenants of
whatsoever kind or nature contained in this Deed of Trust, Mortgagee (either by
it directly or on its behalf by the Trustee or any receiver appointed hereunder)
may, but will not be obligated to, make advances to perform the same on
Mortgagor's behalf, and Mortgagor hereby agrees to repay such sums and any
reasonable attorneys' fees incurred in connection therewith on demand plus
interest thereon from the date of the advance until reimbursement of Mortgagee
at the same rate of interest as charged Reference Rate Advances when an Event of
Default exists as set forth in the Credit Agreement. In addition, Mortgagor
hereby agrees to repay on demand any costs, expenses and reasonable attorney's
fees incurred by Mortgagee or the Trustee which are to be obligations of
Mortgagor pursuant to, or allowed by, the terms of this Deed of Trust, including
such costs, expenses and reasonable attorney's fees incurred pursuant to the
terms hereof, plus interest thereon from the date of the advance by Mortgagee or
the Trustee until reimbursement of Mortgagee or the Trustee, respectively, at
the same rate of interest as charged Reference Rate Advances when an Event of
Default exists as set forth in the Credit Agreement. Such amounts will be in
addition to any sum of money which may, pursuant to the terms and conditions of
the written instruments

                                 Page 24 of 33

<PAGE>

comprising part of the Secured Obligations, be due and owing. No such advance
will be deemed to relieve Mortgagor from any default hereunder.

      6.3 TERMINATION. If the Secured Obligations (including all Letter of
Credit Obligations) have been indefeasible paid in full in cash, all Letters of
Credit have expired or terminated and all obligations of the Issuing Banks and
the Banks in respect of Letters of Credit have terminated, and all Commitments
have expired or terminated, then all of the Mortgaged Property (to the extent
not sold pursuant to the terms hereof) will revert to Mortgagor and the entire
estate, right, title and interest of the Trustee and Mortgagee will thereupon
cease; and Mortgagee in such case shall, upon the request of Mortgagor and the
payment by Mortgagor of all reasonable attorneys' fees and other expenses,
deliver to Mortgagor proper instruments acknowledging satisfaction of this Deed
of Trust.

      6.4 RENEWALS, AMENDMENTS AND OTHER SECURITY. Without notice or consent of
Mortgagor, renewals and extensions of the written instruments constituting part
or all of the Secured Obligations may be given at any time and amendments may be
made to agreements relating to any part of such written instruments or the
Mortgaged Property. Mortgagee may take or hold other security for the Secured
Obligations without notice to or consent of Mortgagor. The acceptance of this
Deed of Trust by Mortgagee shall not waive or impair any other security
Mortgagee may have or hereafter acquire to secure the payment of the Secured
Obligations nor shall the taking of any such additional security waive or impair
the Lien and security interests herein granted. The Trustee or Mortgagee may
resort first to such other security or any part thereof, or first to the
security herein given or any part thereof, or from time to time to either or
both, even to the partial or complete abandonment of either security, and such
action will not be a waiver of any rights conferred by this Deed of Trust. This
Deed of Trust may not be amended, waived or modified except in a written
instrument executed by both Mortgagor and Mortgagee.

      6.5 SECURITY AGREEMENT, FINANCING STATEMENT AND FIXTURE FILING. This Deed
of Trust will be deemed to be and may be enforced from time to time as an
assignment, chattel mortgage, contract, deed of trust, financing statement, real
estate mortgage, or security agreement, and from time to time as any one or more
thereof if appropriate under applicable state law. AS A FINANCING STATEMENT,
THIS DEED OF TRUST IS INTENDED TO COVER ALL PERSONALTY COLLATERAL INCLUDING
MORTGAGOR'S INTEREST IN ALL HYDROCARBONS AS AND AFTER THEY ARE EXTRACTED AND ALL
ACCOUNTS ARISING FROM THE SALE THEREOF AT THE WELLHEAD. THIS DEED OF TRUST SHALL
BE EFFECTIVE AS A FINANCING STATEMENT FILED AS A FIXTURE FILING WITH RESPECT TO
FIXTURE COLLATERAL INCLUDED WITHIN THE MORTGAGED PROPERTY. This Deed of Trust
shall be filed in the real estate records or other appropriate records of the
county or counties in the state in which any part of the Realty Collateral and
Fixture Collateral is located as well as the Uniform Commercial Code records or
other appropriate office of the state in which any Mortgaged Property is
located. At Mortgagee's request, Mortgagor shall execute financing statements
covering the Personalty Collateral and Fixture Collateral, which financing
statements may be filed in the Uniform Commercial Code records or other
appropriate office of the county or state in which any of the Collateral is
located or in any other location permitted or required to perfect Mortgagee's
security interest under the Uniform Commercial Code. In addition, Mortgagor
hereby irrevocably authorizes Mortgagee and any affiliate, employee or agent
thereof, at any

                                 Page 25 of 33

<PAGE>

time and from time to time, to file in any Uniform Commercial Code jurisdiction
any financing statement or document and amendments thereto, without the
signature of Mortgagor where permitted by law, in order to perfect or maintain
the perfection of any security interest granted under this Deed of Trust. A
photographic or other reproduction of this Deed of Trust shall be sufficient as
a financing statement.

      6.6 UNENFORCEABLE OR INAPPLICABLE PROVISIONS. If any term, covenant,
condition or provision hereof is invalid, illegal or unenforceable in any
respect, the other provisions hereof will remain in full force and effect and
will be liberally construed in favor of the Trustee and Mortgagee in order to
carry out the provisions hereof.

      6.7 RIGHTS CUMULATIVE. Each and every right, power and remedy herein given
to the Trustee or Mortgagee will be cumulative and not exclusive, and each and
every right, power and remedy whether specifically herein given or otherwise
existing may be exercised from time to time and as often and in such order as
may be deemed expedient by the Trustee, or Mortgagee, as the case may be, and
the exercise, or the beginning of the exercise, of any such right, power or
remedy will not be deemed a waiver of the right to exercise, at the same time or
thereafter, any other right, power or remedy. No delay or omission by the
Trustee or by Mortgagee in the exercise of any right, power or remedy will
impair any such right, power or remedy or operate as a waiver thereof or of any
other right, power or remedy then or thereafter existing.

      6.8 WAIVER BY MORTGAGEE. Any and all covenants in this Deed of Trust may
from time to time by instrument in writing by Mortgagee and the Majority Banks,
be waived to such extent and in such manner as the Trustee or Mortgagee may
desire, but no such waiver will ever affect or impair either the Trustee's or
Mortgagee's rights hereunder, except to the extent specifically stated in such
written instrument.

      6.9 TERMS. The term "Mortgagor" as used in this Deed of Trust will be
construed as singular or plural to correspond with the number of persons
executing this Deed of Trust as Mortgagor. If more than one person executes this
Deed of Trust as Mortgagor, his, her, its, or their duties and liabilities under
this Deed of Trust will be joint and several. The terms "Mortgagee",
"Mortgagor", and "Trustee" as used in this Deed of Trust include the heirs,
executors or administrators, successors, representatives, receiver, trustees and
assigns of those parties as provided in Section 6.14 below.

      6.10 COUNTERPARTS. This Deed of Trust may be executed in any number of
counterparts, each of which will for all purposes be deemed to be an original,
and all of which are identical except that, to facilitate recordation, in any
particular counties counterpart portions of Exhibit A hereto which describe
Properties situated in counties other than the counties in which such
counterpart is to be recorded may have been omitted.

      6.11 GOVERNING LAW. This Deed of Trust shall be governed by and construed
in accordance with the laws of the State of Texas.

      6.12 NOTICE. All notices required or permitted to be given by Mortgagor,
Mortgagee or the Trustee shall be made in the manner set forth in the Credit
Agreement and shall be addressed as follows:

                                 Page 26 of 33

<PAGE>

      Mortgagor:          [Mortgagor]
                          % HEP Operating Company, L.P.
                          100 Crescent Court, Suite 1600
                          Dallas, Texas 75201-6927
                          Attention: Steve McDonnell
                          Facsimile: 214.871.3850

      Mortgagee:          Union Bank of California, N.A.
                          445 South Figueroa Street, 15th Floor
                          Los Angeles, California 90071
                          Attention: Don Smith
                          Facsimile: 213.236.6823

      Trustee:            Any notices to be given to the
                          Trustee shall also be delivered to Mortgagee.

      6.13 CONDEMNATION. All awards and payments heretofore and hereafter made
for the taking of or injury to the Mortgaged Property or any portion thereof
whether such taking or injury be done under the power of eminent domain or
otherwise, are hereby assigned, and shall be paid to Mortgagee. Mortgagee is
hereby authorized to collect and receive the proceeds of such awards and
payments and to give proper receipts and acquittances therefor. Mortgagor hereby
agrees to make, execute and deliver, upon request, any and all assignments and
other instruments sufficient for the purpose of confirming this assignment of
the awards and payments to Mortgagee free and clear of any encumbrances of any
kind or nature whatsoever. Any such award or payment may, at the option of
Mortgagee, be retained and applied by Mortgagee after payment of attorneys'
fees, costs and expenses incurred in connection with the collection of such
award or payment toward payment of all or a portion of the Secured Obligations,
whether or not the Secured Obligations are then due and payable, or be paid over
wholly or in part to Mortgagor for the purpose of altering, restoring or
rebuilding any part of the Mortgaged Property which may have been altered,
damaged or destroyed as a result of any such taking, or other injury to the
Mortgaged Property.

      6.14 SUCCESSORS AND ASSIGNS. This Deed of Trust shall (a) be binding upon
Mortgagor and its successors, transferees and assigns, and (b) inure, together
with the rights and remedies of the Mortgagee hereunder, to the benefit of and
be binding upon, the Mortgagee, the Issuing Banks, and the Banks and their
respective successors, transferees, and assigns, and to the benefit of and be
binding upon, the Swap Counterparties, and each of their respective successors,
transferees, and assigns to the extent such successors, transferees, and assigns
of a Swap Counterparty is a Bank or an Affiliate of a Bank. Without limiting the
generality of the foregoing clause, when any Bank assigns or otherwise transfers
any interest held by it under the Credit Agreement or other Credit Document to
any other Person pursuant to the terms of the Credit Agreement or such other
Credit Document, that other Person shall thereupon become vested with all the
benefits held by such Bank under this Deed of Trust.

      6.15 ARTICLE AND SECTION HEADINGS. The article and section headings in
this Deed of Trust are inserted for convenience of reference and shall not be
considered a part of this Deed of Trust or used in its interpretation.

                                 Page 27 of 33

<PAGE>

      6.16 USURY NOT INTENDED. It is the intent of Mortgagor and Mortgagee in
the execution and performance of this Deed of Trust, the Credit Agreement and
the other Credit Documents to contract in strict compliance with applicable
usury laws governing the Secured Obligations including such applicable usury
laws of the State of Texas and the United States of America as are from
time-to-time in effect. In furtherance thereof, Mortgagee and Mortgagor
stipulate and agree that none of the terms and provisions contained in this Deed
of Trust, the Credit Agreement or the other Credit Documents shall ever be
construed to create a contract to pay, as consideration for the use, forbearance
or detention of money, interest at a rate in excess of the maximum non-usurious
rate permitted by applicable law and that for purposes hereof "interest" shall
include the aggregate of all charges which constitute interest under such laws
that are contracted for, charged or received under this Deed of Trust, the
Credit Agreement and the other Credit Documents; and in the event that,
notwithstanding the foregoing, under any circumstances the aggregate amounts
taken, reserved, charged, received or paid on the Secured Obligations, include
amounts which by applicable law are deemed interest which would exceed the
maximum non-usurious rate permitted by applicable law, then such excess shall be
deemed to be a mistake and Mortgagee shall credit the same on the principal of
the Secured Obligations (or if the Secured Obligations shall have been paid in
full, refund said excess to Mortgagor). In the event that the maturity of the
Secured Obligations is accelerated by reason of any election of Mortgagee
resulting from any Event of Default, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest may
never include more than the maximum non-usurious rate permitted by applicable
law and excess interest, if any, provided for in this Deed of Trust, the Credit
Agreement or other Credit Documents shall be canceled automatically as of the
date of such acceleration and prepayment and, if theretofore paid, shall be
credited on the Secured Obligations or, if the Secured Obligations shall have
been paid in full, refunded to Mortgagor. In determining whether or not the
interest paid or payable under any specific contingencies exceeds the maximum
non-usurious rate permitted by applicable law, Mortgagor and Mortgagee shall to
the maximum extent permitted under applicable law amortize, prorate, allocate
and spread in equal part during the period of the full stated term of the
Secured Obligations, all amounts considered to be interest under applicable law
of any kind contracted for, charged, received or reserved in connection with the
Secured Obligation.

      6.17 [INTENTIONALLY OMITTED.]

      6.18 NO OFFSETS, ETC. Mortgagor hereby represents, warrants and covenants
to Mortgagee and the Trustee that there are no offsets, counterclaims or
defenses at law or in equity against this Deed of Trust or the indebtedness
secured thereby.

      6.19 BANKRUPTCY LIMITATION. Notwithstanding anything contained herein to
the contrary, it is the intention of Mortgagor, the Mortgagee and the other
Credit Parties that the amount of the Secured Obligation secured by Mortgagor's
interests in any of its Property shall be in, but not in excess of, the maximum
amount permitted by fraudulent conveyance, fraudulent transfer and other similar
law, rule or regulation of any Governmental Authority applicable to Mortgagor.
Accordingly, notwithstanding anything to the contrary contained in this Deed of
Trust in any other agreement or instrument executed in connection with the
payment of any of the Secured Obligations, the amount of the Secured Obligations
secured by Mortgagor's interests in any of its Property pursuant to this Deed of
Trust shall be limited to an aggregate amount equal to the largest amount that
would not render Mortgagor's obligations hereunder or the Liens

                                 Page 28 of 33

<PAGE>

and security interest granted to the Mortgagee hereunder subject to avoidance
under Section 548 of the United States Bankruptcy Code or any comparable
provision of any other applicable law.

      6.20 EXPRESS NEGLIGENCE RULE. The indemnification, release and assumption
provisions provided for in this Agreement shall be applicable whether or not the
losses, costs, expenses and damages in question arose solely or in part from the
gross, active, passive, or concurrent negligence, strict liability or other
fault of any indemnified party. Each of Administrative Agent, the Issuing Banks,
the Banks, the Borrower, and each of the Guarantors acknowledges that this
statement complies with the express negligence rule and is conspicuous.

      6.21 TIME OF THE ESSENCE. Time is of the essence in the performance of
each and every obligation under this Deed of Trust.

      6.22 FINANCING STATEMENT AND UTILITY SECURITY INSTRUMENT FILINGS. This
Deed of Trust may be filed as provided in Article 9 of the UCC, to assure that
the security interests granted by this Deed of Trust are perfected. In this
connection, this instrument will be presented to a filing officer under the UCC
to be filed in the real estate records as a Financing Statement covering
fixtures. This Deed of Trust may also be filed as provided in TEX. BUS. & COM.
CODE ANN. Ch. 35 (Vernon 1996), as amended from time to time, relating to the
granting of a security interest by utilities. The filing of this Deed of Trust
under the provisions of TEX. BUS. & COM. CODE ANN, Ch. 35 (Vernon 1996), as
amended from time to time, shall not constitute an admission by Mortgagor that
it is a utility for purposes of TEX. BUS. & COM. CODE ANN. Ch. 35 (Vernon 1996),
as amended from time to time, or any other statute, rule or regulation of any
governmental authority or agency.

                            [SIGNATURE PAGES FOLLOW]

                                 Page 29 of 33

<PAGE>

                  [SIGNATURE PAGE TO MORTGAGE - PAGE 1 OF ___]

      EXECUTED as of July 13, 2004.

                                          MORTGAGOR:

                                          [____________________]

                                          By: __________________________________
                                          Name: ________________________________
                                          Title: _______________________________

THE STATE OF TEXAS       Section
                         Section
COUNTY OF DALLAS         Section

      The foregoing instrument was acknowledged before me this July 13, 2004 by
_______________________, the __________________ of [MORTGAGOR], on behalf of
[MORTAGOR].

      Given under my hand and official seal this July 13, 2004.

                                          ______________________________________
                                          Notary Public in and for
[NOTARIAL SEAL]                           the State of Texas

                                 Page 30 of 33

<PAGE>

                  [SIGNATURE PAGE TO MORTGAGE - PAGE 2 OF ___]

      EXECUTED as of July 13, 2004.

                                          MORTGAGEE:

                                          UNION BANK OF CALIFORNIA, N.A.

                                          By: __________________________________
                                          Name: ________________________________
                                          Title: _______________________________

THE STATE OF TEXAS     Section
                       Section
COUNTY OF DALLAS       Section

      The foregoing instrument was acknowledged before me this July 13, 2004 by
__________________________, the ________________ of UNION BANK OF CALIFORNIA,
N.A., a national association, on behalf of the national association.

      Given under my hand and official seal this July 13, 2004.

                                          ______________________________________
                                          Notary Public in and for
[NOTARIAL SEAL]                           the State of Texas

                                 Page 31 of 33

<PAGE>

                                    EXHIBIT A

                        DESCRIPTION OF REALTY COLLATERAL

                                 Page 32 of 33

<PAGE>

                                   SCHEDULE I

                        DESCRIPTION OF MATERIAL CONTRACTS

                                 Page 33 of 33

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