Deed of Trust - Wood County

Exhibit 10.142

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

DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION

(Oil, Gas and Mineral Properties)

This instrument contains after-acquired property provisions THE STATE OF TEXAS |

| KNOW ALL MEN BY THESE PRESENTS: COUNTY OF WOOD

|

That the undersigned, ENERGYTEC, INC. , a Nevada corporation, acting herein by and through its proper officer who has heretofore been duly authorized, with its principal office in Piano, Texas, and the mailing address for which is 4965 Preston Park Boulevard, Suite 270 East, Piano, Texas 75093 (AMortgagor" , whether one or more), and Gladewater National Bank, the banking quarters for which are at 678 North Main, Gladewater, Gregg County, Texas, and the mailing address for which is Post Office Box 1749, Gladewater, Texas 75647-0027 (" Mortgagee" ), hereby agree as follows:

ARTICLE I.

GRANT

A. Lien . Mortgagor, for valuable consideration, the receipt of which is hereby acknowledged, and in consideration of the debt and trust hereinafter mentioned, has granted, bargained, sold, conveyed, transferred and assigned, and by these presents does grant, bargain, sell, convey, transfer and assign to Redonia Harper, Trustee, whose address is Post Office Box 1749, Gladewater, Texas 75647-0027, and his successors and substitutes in trust, as hereinafter provided, (the " Trustee" ), for the benefit of Mortgagee, the following described property: Certain interest in oil, gas and mineral fee and leasehold estates in the property more particularly described in the schedule attached hereto, marked Exhibit " A" for identification, incorporated herein and made a part hereof for all purposes (the " Land" ).

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

C. Assignment of Security . For the same consideration, Mortgagor hereby grants to Mortgagee any and all rights of Mortgagor to liens and security interests securing payment of proceeds from the sale of production from the Mortgaged Property, including, but not limited to, those liens and security interests provided for in TEX. BUS. & COM. CODE ANN. Sec. 9.319 (Tex. UCC) (Vernon Supp. 1988).

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


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

ARTICLE II. WARRANTIES

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

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

(1) Authority and Enforceability . The incurring by Mortgagor of the indebtedness secured by this Deed of Trust, the execution and delivery by Mortgagor ENERGYTEC, INC. of the promissory note of $4,000,000.00, dated February 27, 2007, and the performance and observance by Mortgagor of the terms and provisions of such promissory note and this Deed of Trust have been duly authorized by any necessary corporate proceedings, and will not contravene any requirement of law, or any provision of Mortgagor' s charter or by-laws, or result in the breach or termination of, or constitute a default under, any indenture or other agreement or instrument to which Mortgagor is a party or by which it or any of its property may be bound or affected.

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

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

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

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

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

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


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

ARTICLE III. INDEBTEDNESS SECURED

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

(a) The promissory note dated February 27, 2007, executed by Mortgagor ENERGYTEC, INC. to the order of Mortgagee in the principal sum of FOUR MILLION AND NO/100 DOLLARS ($4,000,000.00) bearing interest and payable (in installments) as therein provided, and containing the usual provisions in notes of this character, together with any and all renewals, extensions, rearrangements and increases thereof; (b) all additional indebtedness of Mortgagor to Mortgagee arising pursuant to the provisions of this deed of trust; (c) all loans and advances which Mortgagee may hereafter make to the Mortgagor; (d) all other and additional debts, obligations, and liabilities of every kind and character of Mortgagee to Mortgagor, now or hereafter existing, regardless of whether such debts, obligations and liabilities be direct or indirect, primary or secondary, joint or several, or joint and several, fixed or contingent, and regardless of whether such present or future obligations are payable to, or be or have been in favor of some other person or have been acquired by Mortgagee in a transaction with one other than Mortgagor, including but not limited to attorneys= fees and other expenses of collection and enforcement of the Note, this deed of trust and other secured indebtedness; (e) performance of all obligations of Mortgagor to Mortgagee hereunder, under the Note, under any other instrument now or hereafter securing any indebtedness of Mortgagor to Mortgagee and under any agreement arising from or relating to any indebtedness of Mortgagor to Mortgagee; and (f) any and all renewals, extensions, changes in form reamortizations and other modifications of such debts, obligations and liabilities, or any part thereof.

ARTICLE IV.

COVENANTS OF MORTGAGOR

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

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

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

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

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

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

F. Pooling or Unitization . Mortgagor will not, without the prior written consent of Mortgagee, pool or unitize all or any part of the Mortgaged Property where the pooling or unitization would result in the diminution of Mortgagor' s net revenue interest in production from the pooled or unitized lands attributable to the Mortgaged Property constituting a portion of such pooled or unitized lands. Immediately after the formation of any pool or unit in accordance herewith, Mortgagor will furnish to Mortgagee a conformed copy of the pooling agreement, declaration of pooling, or other instrument creating the pooling or unit. The interest of Mortgagor included in any pool or unit attributable to the Mortgaged Property or any part thereof shall become a part of the Mortgaged Property and shall be subject to liens and security interests hereof in the same manner and with the same effect as though the pool or unit and the interest of Mortgagor therein were specifically described in Exhibit " A" hereto. In the event any proceedings of any governmental body which could result in pooling or unitizing all or any part of the Mortgaged Property are commenced, Mortgagor shall give immediate written notice thereof to Mortgagee. G. Payment of Lienable Claims . Mortgagor will pay all taxes now or hereafter to accrue against any of the Mortgaged Property and all other taxes or assessments, general or special, lawfully levied against it on such Mortgaged Property which might become a lien thereon before such taxes become delinquent; and it will during the life of this Deed of Trust keep the Mortgaged Property, and each and every part thereof, free, clear and discharged from all liens, charges, encumbrances, or assessments that might become superior, coordinate or subordinate to the liens or security interests of this Deed of Trust. H. Maintenance of Workmen' s Compensation Insurance . Mortgagor will at all times maintain workmen' s compensation insurance with a responsible insurance company where required by, and in accordance with, the laws of the state in which the Mortgaged Property is located.

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

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

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


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L. Compliance with Operating Agreements . Mortgagor agrees to promptly pay all bills for labor and materials incurred in the operation of the Mortgaged Property and will promptly pay its share of all costs and expenses incurred under any joint operating agreement affecting the Mortgaged Property or any portion thereof; will furnish Mortgagee, as and when requested, full information as to the status of any joint account maintained with others under any such operating agreement; will not take any action to incur any liability or lien thereunder; and will not enter into any new operating agreement or amendment of existing operating agreement affecting the Mortgaged Property without prior written consent of Mortgagee. Furthermore, Mortgagor will not consent or agree to participate in any proposed operation under any presently existing operating agreement affecting the Mortgaged Property unless Mortgagor obtains the prior written consent of Mortgagee and deposits either with the operator, where Mortgagor is a non-operator, or with Mortgagee, where Mortgagor is a non-operator or operator, Mortgagor' s share of the estimated cost of the proposed operation prior to electing to participate in the operation. To the extent that Mortgagor is unable to consent to any proposed operation with respect to any of the Mortgaged Property, prior to electing not to participate in the proposed operation, Mortgagor will use its best efforts, to the extent practicable once it is determined that it cannot so participate and to the extent allowed to do so under the relevant operating agreement or other applicable contract, farmout to others acceptable to Mortgagee, on the best terms obtainable, which terms shall be acceptable to Mortgagee, the interest or relevant portion of the interest of Mortgagor in the proposed operation.

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

N. Evidence of Title . Promptly upon receipt of a request from Mortgagee, Mortgagor will furnish and deliver, a Title Opinion prepared by competent legal counsel covering title to the real property herein mortgaged from the Sovereignty of the Soil to the latest practicable date, when taken together with abstracts and/or Title Opinions previously furnished to Mortgagee. Should Mortgagor fail to furnish such Title Opinion upon such request, Mortgagee may obtain such Title Opinion, and any and all costs incurred thereby shall be payable by Mortgagor to Mortgagee upon demand at Mortgagee' s principal offices. The Title Opinion shall be and constitute a part of the Mortgaged Property as defined above. O. Notification of Legal Proceedings . Mortgagor will promptly notify Mortgagee or other holder or holders of the Indebtedness, in writing, of the commencement of any legal proceedings affecting the Mortgaged Property or any part thereof, and will take such action as may be necessary to preserve its and Mortgagee' s rights affected thereby; and should Mortgagor fail or refuse to take any such action, Mortgagee may at its election take such action on behalf and in the name of Mortgagor and at Mortgagor' s cost and expense.

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

Q. Waivers . Mortgagor hereby expressly waives any and all rights or privileges of marshaling of assets, sale in inverse order of alienation, notices, appraisements, redemption and any prerequisite to the full extent permitted by applicable law, in the event of foreclosure of the lien or liens and/or security interests created herein. Mortgagee at all times shall have the right to release any part of the Mortgaged Property now or hereafter subject to the lien or security interest of this Deed of Trust, any part the proceeds of production ...