Exhibit 10.2

 

Execution Version

 

COLLATERAL TRUST AGREEMENT

 

dated as of June 10, 2015

 

among

 

SANDRIDGE ENERGY, INC.,

as the Company,

 

the Guarantors from time to time party hereto,

 

U.S. BANK NATIONAL ASSOCIATION,

as Trustee under the Indenture,

 

the other Parity Lien Representatives from time to time party hereto

 

and

 

U.S. BANK NATIONAL ASSOCIATION,

as Collateral Trustee

 

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TABLE OF CONTENTS

 

ARTICLE 1         DEFINITIONS; PRINCIPLES OF CONSTRUCTION

1

 

 

 

Section 1.1

Defined Terms

1

Section 1.2

Rules of Interpretation

10

 

 

 

ARTICLE 2         THE TRUST ESTATE

11

 

 

 

Section 2.1

Declaration of Trust

11

Section 2.2

Collateral Shared Equally and Ratably

12

Section 2.3

Similar Collateral and Agreements

12

 

 

 

ARTICLE 3         OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE

12

 

 

 

Section 3.1

Appointment and Undertaking of the Collateral Trustee

12

Section 3.2

Release or Subordination of Liens

13

Section 3.3

Enforcement of Liens

14

Section 3.4

Application of Proceeds

14

Section 3.5

Powers of the Collateral Trustee

15

Section 3.6

Documents and Communications

16

Section 3.7

For Sole and Exclusive Benefit of Holders of Parity Lien Obligations

16

Section 3.8

Additional Parity Lien Debt

16

 

 

 

ARTICLE 4         OBLIGATIONS ENFORCEABLE BY THE COMPANY AND THE OTHER GRANTORS

18

 

 

 

Section 4.1

Release of Liens on Collateral

18

Section 4.2

Delivery of Copies to Parity Lien Representatives

20

Section 4.3

Collateral Trustee not Required to Serve, File or Record

21

Section 4.4

Release of Liens in Respect of Notes

21

Section 4.5

Release of Liens in Respect of any Series of Parity Lien Debt other than the
Notes

21

 

 

 

ARTICLE 5         IMMUNITIES OF THE COLLATERAL TRUSTEE

21

 

 

 

Section 5.1

No Implied Duty

21

Section 5.2

Appointment of Agents and Advisors

22

Section 5.3

Other Agreements

22

Section 5.4

Solicitation of Instructions

22

Section 5.5

Limitation of Liability

23

Section 5.6

Documents in Satisfactory Form

23

Section 5.7

Entitled to Rely

23

Section 5.8

Parity Lien Debt Default

23

Section 5.9

Actions by Collateral Trustee

24

Section 5.10

Security or Indemnity in favor of the Collateral Trustee

24

Section 5.11

Rights of the Collateral Trustee

24

Section 5.12

Limitations on Duty of Collateral Trustee in Respect of Collateral

24

Section 5.13

Assumption of Rights, Not Assumption of Duties

25

 

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Section 5.14

No Liability for Clean Up of Hazardous Materials

25

Section 5.15

Other Relationships with the Company or Guarantors

26

 

 

 

ARTICLE 6         RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE

26

 

 

 

Section 6.1

Resignation or Removal of Collateral Trustee

26

Section 6.2

Appointment of Successor Collateral Trustee

26

Section 6.3

Succession

27

Section 6.4

Merger, Conversion or Consolidation of Collateral Trustee

27

Section 6.5

Concerning the Collateral Trustee and the Parity Lien Representatives

27

 

 

 

ARTICLE 7         MISCELLANEOUS PROVISIONS

28

 

 

 

Section 7.1

Amendment

28

Section 7.2

Voting

30

Section 7.3

Further Assurances

31

Section 7.4

Successors and Assigns

31

Section 7.5

Delay and Waiver

32

Section 7.6

Notices

32

Section 7.7

Entire Agreement

33

Section 7.8

Compensation; Expenses

33

Section 7.9

Indemnity

34

Section 7.10

Severability

35

Section 7.11

Headings

35

Section 7.12

Obligations Secured

35

Section 7.13

Governing Law

35

Section 7.14

Consent to Jurisdiction

36

Section 7.15

Waiver of Jury Trial

36

Section 7.16

Counterparts, Electronic Signatures

37

Section 7.17

Effectiveness

37

Section 7.18

Grantors and Additional Grantors

37

Section 7.19

Insolvency

38

Section 7.20

Rights and Immunities of Parity Lien Representatives

38

Section 7.21

Intercreditor Agreement

38

Section 7.22

Force Majeure

38

Section 7.23

Representations and Warranties

39

 

Exhibit A

Form of Additional Parity Lien Debt Certificate

A-1

Exhibit B

Form of Collateral Trust Joinder — Additional Debt

B-1

Exhibit C

Form of Collateral Trust Joinder — Additional Grantor

C-1

 

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This Collateral Trust Agreement (as amended, supplemented, amended and restated
or otherwise modified form time to time in accordance with Section 7.1 hereof,
this “Agreement”) is dated as of June 10, 2015 and is by and among SandRidge
Energy, Inc. (the “Company”), the Guarantors from time to time party hereto,
U.S. Bank National Association, as Trustee (as defined below), the other Parity
Lien Representatives from time to time party hereto and U.S. Bank National
Association, as Collateral Trustee (in such capacity and together with its
successors in such capacity, the “Collateral Trustee”).

 

RECITALS

 

The Company intends to issue 8.75% Senior Secured Notes due 2020 (the “Initial
Notes”) in an aggregate principal amount of $1,250,000,000 pursuant to an
Indenture dated as of the date hereof (as amended, supplemented, amended and
restated or otherwise modified and in effect from time to time, the “Indenture”)
among the Company, the Guarantors and U.S. Bank National Association, as trustee
(in such capacity and together with its successors in such capacity, the
“Trustee”).

 

The Company and the Guarantors intend to secure their Obligations under the
Indenture, any future Parity Lien Debt and any other Parity Lien Obligations,
with Liens on all present and future Collateral to the extent that such Liens
have been provided for in the applicable Parity Lien Security Documents.

 

This Agreement sets forth the terms on which each Parity Lien Secured Party
(other than the Collateral Trustee) has appointed the Collateral Trustee to act
as the collateral trustee for the present and future holders of the Parity Lien
Obligations to receive, hold, maintain, administer and distribute the Collateral
at any time delivered to the Collateral Trustee or the subject of the Parity
Lien Security Documents, and to enforce the Parity Lien Security Documents and
all interests, rights, powers and remedies of the Collateral Trustee with
respect thereto or thereunder and the proceeds thereof.

 

Capitalized terms used in this Agreement have the meanings assigned to them
above or in Article 1 below.

 

AGREEMENT

 

In consideration of the premises and the mutual agreements herein set forth, the
receipt and sufficiency of which are hereby acknowledged, the parties to this
Agreement hereby agree as follows:

 

ARTICLE 1
DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

Section 1.1          Defined Terms. The following terms will have the following
meanings:

 

“Act of Parity Lien Debtholders” means, as to any matter at any time, a
direction in writing delivered to the Collateral Trustee by or with the written
consent of the holders of Parity Lien Debt representing the Required Parity Lien
Debtholders.

 

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“Additional Notes” has the meaning given to such term in the Indenture as in
effect on the date hereof.

 

“Additional Parity Lien Debt” has the meaning set forth in Section 3.8(b).

 

“Additional Parity Lien Debt Certificate” means a notice in substantially the
form of Exhibit A.

 

“Additional Secured Debt Designation” means the written agreement of the holders
of any Series of Parity Lien Debt or their Parity Lien Representative, as set
forth in the indenture, credit agreement or other agreement governing such
Series of Parity Lien Debt, for the benefit of each existing and future holder
of Priority Lien Debt, the Priority Lien Collateral Agent and each existing and
future holder of Priority Liens:

 

(1)           that all Parity Lien Obligations will be and are secured equally
and ratably by all Parity Liens at any time granted by the Company or any
Guarantor to secure any Obligations in respect of such Series of Parity Lien
Debt, whether or not upon property otherwise constituting collateral for such
Series of Parity Lien Debt, and that all such Parity Liens will be enforceable
by the Collateral Trustee for the benefit of all holders of Parity Lien
Obligations equally and ratably;

 

(2)           that the holders of Obligations in respect of such Series of
Parity Lien Debt are bound by the provisions of this Agreement and the
Intercreditor Agreement, including the provisions relating to the ranking of
Parity Liens and the order of application of proceeds from the enforcement of
Parity Liens; and

 

(3)           consenting to and directing the Collateral Trustee to perform its
obligations under this Agreement, the Intercreditor Agreement and the Parity
Lien Security Documents.

 

“Affiliate” means, with respect to any specified Person: (1) any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person; (2) any other Person that owns,
directly or indirectly, 10% or more of the Voting Stock of such specified Person
(or any of such specified Person’s direct or indirect parent’s Voting Stock); or
(3) any other Person 10% or more of the Voting Stock of which is beneficially
owned or held directly or indirectly by such specified Person. For the purposes
of this definition, “control” when used with respect to any specified Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through ownership of voting securities, by contract or
otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.

 

“Agreement” has the meaning set forth in the preamble.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized by law to close, or are in fact closed, in New
York City or in the city where the corporate trust office of the Trustee
specified in the Indenture is located.

 

“Capital Stock” of any Person means any and all shares, units, interests,
participations, rights in or other equivalents (however designated) of such
Person’s capital stock, other equity

 

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interests whether now outstanding or issued after the date hereof, partnership
interests (whether general or limited), limited liability company interests, any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person, including any Preferred Stock, and any rights (other than debt
securities or other Indebtedness convertible into Capital Stock), warrants or
options exchangeable for or convertible into such Capital Stock.

 

“Collateral” means all properties and assets of the Company and the Guarantors
now owned or at any time hereafter acquired in which Liens have been granted, or
purported to be granted, to the Collateral Trustee to secure any or all of the
Parity Lien Obligations, and from and after the time the Collateral Trustee is
required to release its Liens pursuant to Section 3.2 upon any properties or
assets, shall exclude such properties or assets; provided that if such Liens are
required to be released as a result of the sale, transfer or other disposition
of any properties or assets of the Company or any Guarantor, such assets or
properties will cease to be excluded from the Collateral if the Company or any
Guarantor thereafter acquires or reacquires such assets or properties.

 

“Collateral Trustee” has the meaning set forth in the preamble.

 

“Collateral Trust Joinder” means (i) with respect to the provisions of this
Agreement relating to any Additional Parity Lien Debt, an agreement
substantially in the form of Exhibit B, and (ii) with respect to the provisions
of this Agreement relating to the addition of additional Grantors, an agreement
substantially in the form of Exhibit C.

 

“Company” has the meaning set forth in the preamble.

 

“Credit Agreement” means the “Priority Credit Agreement” as defined in the
Intercreditor Agreement.

 

“Credit Agreement Agent” means, at any time, the Person serving at such time as
the “Agent” or “Administrative Agent” under the Credit Agreement or any other
representative then most recently designated in accordance with the applicable
provisions of the Credit Agreement, together with its successors in such
capacity.

 

“Credit Facility” means one or more debt facilities (including, without
limitation, the Credit Agreement), commercial paper facilities or other debt
instruments, indentures or agreements providing for revolving credit loans, term
loans, receivables financings (including through the sale of receivables to the
lenders or to special purpose entities formed to borrow from the lenders against
such receivables), letters of credit, capital markets financings and/or private
placements involving bonds or other debt securities, or other debt obligations,
in each case, as amended, restated, modified, renewed, refunded, restructured,
supplemented, replaced or refinanced from time to time in whole or in part from
time to time, including without limitation any amendment increasing the amount
of Indebtedness incurred or available to be borrowed thereunder, extending the
maturity of any Indebtedness incurred thereunder or contemplated thereby or
deleting, adding or substituting one or more parties thereto (whether or not
such added or substituted parties are banks or other institutional lenders).

 

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“Excess Priority Lien Obligations” has the meaning assigned to such term in the
Intercreditor Agreement.

 

“Grantor” means each of and “Grantors” means, collectively, the Company and the
Guarantors and any other Person (if any) that at any time provides collateral
security for any Parity Lien Obligations.

 

“Guarantee” means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation of such other Person (whether arising by virtue
of partnership arrangements, or by agreement to keep well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof, in
whole or in part; provided that the term “Guarantee” does not include
endorsements for collection or deposit in the ordinary course of business. The
term “Guarantee” used as a verb has a corresponding meaning.

 

“Guarantor” means each Subsidiary of the Company who has Guaranteed payment of
any Parity Lien Obligations, and their respective successors and assigns, in
each case until their respective Guarantee of all Parity Lien Obligations is
released in accordance with the terms of the applicable Parity Lien Documents.

 

“Indebtedness” has the meaning assigned to such term in the Indenture or to such
term or other similar term in any applicable Parity Lien Document.

 

“Indemnified Liabilities” means any and all liabilities (including all
environmental liabilities), obligations, losses, damages, penalties, actions,
judgments, suits, costs, taxes, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, performance, administration
or enforcement of this Agreement or any of the other Parity Lien Security
Documents, including any of the foregoing relating to the use of proceeds of any
Parity Lien Debt or the violation of, noncompliance with or liability under, any
law (including environmental laws) applicable to or enforceable against the
Company, any Subsidiary of the Company or any Guarantor or any of the Collateral
and all reasonable costs and expenses (including reasonable fees and expenses of
legal counsel selected by the Indemnitee) incurred by any Indemnitee in
connection with any claim, action, investigation or proceeding in any respect
relating to any of the foregoing, whether or not suit is brought.

 

“Indemnitee” has the meaning set forth in Section 7.9(a).

 

“Indenture” has the meaning set forth in the recitals.

 

“Initial Notes” has the meaning set forth in the recitals.

 

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“Insolvency or Liquidation Proceeding” means:

 

(1)           any case commenced by or against the Company or any Guarantor
under Title 11, U.S. Code or any similar federal or state law for the relief of
debtors, any other proceeding for the reorganization, recapitalization or
adjustment or marshalling of the assets or liabilities of the Company or any
Guarantor, any receivership or assignment for the benefit of creditors relating
to the Company or any Guarantor or any similar case or proceeding relative to
the Company or any Guarantor or its creditors, as such, in each case whether or
not voluntary;

 

(2)           any liquidation, dissolution, marshalling of assets or liabilities
or other winding up of or relating to the Company or any Guarantor, in each case
whether or not voluntary and whether or not involving bankruptcy or insolvency;
or

 

(3)           any other proceeding of any type or nature in which substantially
all claims of creditors of the Company or any Guarantor are determined and any
payment or distribution is or may be made on account of such claims.

 

“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as
of the date hereof, among the Company, the Guarantors, the Collateral Trustee,
on behalf of itself and the holders of the Notes and any other Parity Lien
Obligations, the Priority Lien Collateral Agent, and the other parties from time
to time party thereto, as the same may be amended, restated, supplemented or
otherwise modified or replaced from time to time.

 

“Junior Lien” has the meaning assigned to the term “Third Lien” in the
Intercreditor Agreement.

 

“Junior Lien Debt” has the meaning assigned to the term “Third Lien Debt” in the
Intercreditor Agreement.

 

“Junior Lien Documents” has the meaning assigned to the term “Third Lien
Documents” in the Intercreditor Agreement.

 

“Lien” means any mortgage or deed of trust, charge, pledge, lien (statutory or
otherwise), privilege, security interest, assignment, deposit, arrangement,
hypothecation, claim, preference, priority or other encumbrance for security
purposes upon or with respect to any property of any kind (including any
conditional sale, capital lease or other title retention agreement, any leases
in the nature thereof, and any agreement to give any security interest), real or
personal, movable or immovable, now owned or hereafter acquired.

 

“Mortgage” has the meaning set forth in Section 3.8(d)(1).

 

“Mortgaged Property” has the meaning set forth in Section 3.8(d)(1).

 

“Notes” means, collectively, the Initial Notes and the Additional Notes for
which the requirements set forth in Section 3.8 of this Agreement have been
satisfied.

 

“Note Documents” means the Indenture, the Notes, the Guarantees thereof, the
Intercreditor Agreement and the Notes Security Documents.

 

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“Notes Security Agreement” means the Second Lien Security Agreement, dated as of
the date hereof, among the Company, the Guarantors party thereto and the
Collateral Trustee, on behalf of itself and the holders of the Notes, as the
same may be amended, supplemented or otherwise modified or replaced from time to
time.

 

“Notes Security Documents” means this Agreement, each Collateral Trust Joinder,
the Notes Security Agreement and all security agreements, pledge agreements,
hypothecs, collateral assignments, Mortgages, deeds of trust, deeds to secure
debt, collateral agency agreements, debentures, control agreements or other
grants or transfers for security executed and delivered by the Company or any
Guarantor creating (or purporting to create) a Parity Lien upon Collateral in
favor of the Collateral Trustee (including, without limitation, the financing
statements under the Uniform Commercial Code of the relevant state), in each
case, as amended, modified, renewed, restated or replaced, in whole or in part,
from time to time, in accordance with its terms and Section 7.1.

 

“Obligations” means any principal (including reimbursement obligations with
respect to letters of credit whether or not drawn), interest (including, to the
extent legally permitted, all interest accrued thereon after the commencement of
any Insolvency or Liquidation Proceeding at the rate, including any applicable
post-default rate, specified in the Parity Lien Documents, even if such interest
is not enforceable, allowable or allowed as a claim in such proceeding), premium
(if any), fees, indemnifications, reimbursements, expenses and other liabilities
payable under the documentation governing any Indebtedness.

 

“Officers’ Certificate” means a certificate with respect to compliance with a
condition or covenant provided for in this Agreement, signed on behalf of the
Company by two officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, including:

 

(a)           a statement that the Person making such certificate has read such
covenant or condition;

 

(b)           a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate are based;

 

(c)           a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been satisfied; and

 

(d)           a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.

 

“Parity Lien” means a Lien granted by the Company or any Grantor in favor of the
Collateral Trustee pursuant to a Parity Lien Security Document, at any time,
upon any property of the Company or such Grantor to secure Parity Lien
Obligations.

 

“Parity Lien Debt” means:

 

(1)           the Initial Notes and Guarantees thereof; and

 

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(2)           any other Indebtedness (other than intercompany indebtedness owing
to the Company or its Subsidiaries) of the Company or any Guarantor (including
Additional Notes and Guarantees thereof) that is secured equally and ratably
with the Notes by a Parity Lien that was permitted to be incurred and so secured
under each applicable Secured Debt Document; provided that in the case of any
Indebtedness referred to in clause (2) of this definition, that:

 

(a)           on or before the date on which such Indebtedness is incurred by
the Company or any Guarantor, such Indebtedness is designated by the Company, in
an Additional Parity Lien Debt Certificate executed and delivered in accordance
with Section 3.8(b), as “Parity Lien Debt” for the purposes of the Indenture and
this Agreement; provided further that no such Indebtedness may be designated as
both Parity Lien Debt and Priority Lien Debt or Junior Lien Debt;

 

(b)           other than in the case of any Additional Notes issued under the
Indenture, such Indebtedness is governed by an indenture, credit agreement or
other agreement that includes an Additional Secured Debt Designation and, in
each case, the Parity Lien Representative of such Parity Lien Debt (other than
Additional Notes) shall have executed a joinder to the Intercreditor Agreement
in the form provided therein; and

 

(c)           all other requirements set forth in Section 3.8 have been complied
with;

 

provided, further that in the case of any Additional Notes, on or before the
date on which Indebtedness in respect of Additional Notes is incurred, the
Company will deliver to the Collateral Trustee an Officers’ Certificate stating
that such Indebtedness is permitted by each applicable Parity Lien Document to
be incurred and secured with a Parity Lien equally and ratably with all
previously existing and future Parity Lien Debt.

 

“Parity Lien Debt Default” means any “Event of Default” as defined in the
Indenture, or any similar event or condition set forth in any other Parity Lien
Document that causes, or permits holders of the applicable Series of Parity Lien
Debt outstanding thereunder (with or without the giving of notice or lapse of
time, or both, and whether or not notice has been given or time has lapsed) to
cause, the Parity Lien Debt outstanding thereunder to become immediately due and
payable.

 

“Parity Lien Documents” means, collectively, the Note Documents and any
additional indenture, supplemental indenture, credit agreement or other
agreement governing each other Series of Parity Lien Debt and the Parity Lien
Security Documents.

 

“Parity Lien Obligations” means Parity Lien Debt and all other Obligations in
respect thereof.

 

“Parity Lien Representative” means:

 

(1)           in the case of the Notes, the Trustee; or

 

(2)           in the case of any other Series of Parity Lien Debt, the trustee,
agent or representative of the holders of such Series of Parity Lien Debt who
(A) is appointed to act for the holders of such Series of Parity Lien Debt (for
purposes related to the administration of the Parity Lien Security Documents)
pursuant to the indenture, credit agreement or other agreement

 

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governing such Series of Parity Lien Debt, together with its successors in such
capacity, and (B)  has become a party to this Agreement by executing a
Collateral Trust Joinder.

 

“Parity Lien Secured Parties” has the meaning assigned to the term “Second Lien
Secured Parties” in the Intercreditor Agreement.

 

“Parity Lien Security Documents” means this Agreement, each Collateral Trust
Joinder, the Indenture (insofar as the same grants a Lien on the Collateral),
the Notes Security Documents, and all other security agreements, pledge
agreements, collateral assignments, mortgages, deeds of trust, collateral agency
agreements, control agreements or other grants or transfers for security
executed and delivered by the Company or any Guarantor creating (or purporting
to create) a Lien upon Collateral in favor of the Collateral Trustee, for the
benefit of any of the Parity Lien Secured Parties, in each case, as amended,
modified, renewed, restated or replaced, in whole or in part, from time to time,
in accordance with its terms and Section 7.1.

 

“Person” means an individual, a corporation, a partnership, a limited liability
company, an association, a trust or any other entity, including a government or
political subdivision or an agency or instrumentality thereof.

 

“Preferred Stock” means, with respect to any Person, any Capital Stock of any
class or classes (however designated) which is preferred as to the payment of
dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over the
Capital Stock of any other class in such Person.

 

“Priority Lien” has the meaning assigned to such term in the Intercreditor
Agreement.

 

“Priority Lien Collateral Agent” means Royal Bank of Canada, as agent under the
Credit Agreement and any successor thereof in such capacity under the Credit
Agreement, or if the Credit Agreement ceases to exist, the collateral agent or
other representative of lenders or holders of Priority Lien Obligations
designated pursuant to the terms of the Priority Lien Documents pursuant to
which such Priority Lien Obligations were issued and the Intercreditor
Agreement.

 

“Priority Lien Debt” has the meaning assigned to such term in the Intercreditor
Agreement.

 

“Priority Lien Documents” has the meaning assigned to such term in the
Intercreditor Agreement.

 

“Priority Lien Obligations” has the meaning assigned to such term in the
Intercreditor Agreement.

 

“Priority Lien Representative” means (1) the Credit Agreement Agent or (2) in
the case of any other Series of Priority Lien Debt, the Trustee, agent or
representative of the holders of such Series of Priority Lien Debt who maintains
the transfer register for such Series of Priority Lien Debt and is appointed as
a representative of the Priority Lien Debt (for purposes related to the
administration of the Security Documents) pursuant to the credit agreement or
other agreement governing such Series of Priority Lien Debt.

 

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“Reaffirmation Agreement” means an agreement reaffirming the security interests
granted to the Collateral Trustee in substantially the form attached as
Exhibit 1 to Exhibit A of this Agreement

 

“Required Parity Lien Debtholders” means, at any time, the holders of a majority
in aggregate principal amount of all Parity Lien Debt then outstanding,
calculated in accordance with the provisions of Section 7.2. For purposes of
this definition, Parity Lien Debt registered in the name of, or beneficially
owned by, the Company or any Affiliate of the Company will be deemed not to be
outstanding.

 

“Secured Debt” means Priority Lien Debt, Parity Lien Debt and Junior Lien Debt.

 

“Secured Debt Document” means the Priority Lien Documents, the Parity Lien
Documents and the Junior Lien Documents.

 

“Series of Parity Lien Debt” means, severally, the Notes and each other issue or
series of Parity Lien Debt for which a single transfer register is maintained.

 

“Series of Priority Lien Debt” means, severally, the Indebtedness outstanding
under the Credit Agreement and any other Credit Facility that constitutes
Priority Lien Debt.

 

“Subsidiary” of a Person means:

 

(1)           any corporation more than 50% of the outstanding voting power of
the Voting Stock of which is owned or controlled, directly or indirectly, by
such Person or by one or more other Subsidiaries of such Person, or by such
Person and one or more other Subsidiaries thereof, or

 

(2)           any limited partnership of which such Person or any Subsidiary of
such Person is a general partner, or

 

(3)           any other Person in which such Person, or one or more other
Subsidiaries of such Person, or such Person and one or more other Subsidiaries,
directly or indirectly, has more than 50% of the outstanding Capital Stock or
has the power, by contract or otherwise, to direct or cause the direction of the
policies, management and affairs thereof.

 

“Title Datedown Product” has the meaning set forth in Section 3.8(d)(3).

 

“Trustee” has the meaning set forth in the recitals.

 

“Trust Estate” has the meaning set forth in Section 2.1.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or any other applicable jurisdiction.

 

“Voting Stock” of a Person means Capital Stock of such Person of the class or
classes pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such

 

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Person (irrespective of whether or not at the time Capital Stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency).

 

Section 1.2          Rules of Interpretation.

 

(a)           All capitalized terms used in this Agreement and not otherwise
defined herein have the meanings assigned to them in the Indenture.

 

(b)           Unless otherwise indicated, any reference to any agreement or
instrument will be deemed to include a reference to that agreement or instrument
as assigned, amended, supplemented, amended and restated, or otherwise modified
and in effect from time to time or replaced in accordance with the terms of this
Agreement.

 

(c)           The use in this Agreement or any of the other Parity Lien Security
Documents of the word “include” or “including,” when following any general
statement, term or matter, will not be construed to limit such statement, term
or matter to the specific items or matters set forth immediately following such
word or to similar items or matters, whether or not non-limiting language (such
as “without limitation” or “but not limited to” or words of similar import) is
used with reference thereto, but will be deemed to refer to all other items or
matters that fall within the broadest possible scope of such general statement,
term or matter. The word “will” shall be construed to have the same meaning and
effect as the word “shall.”

 

(d)           References to “Sections,” “clauses,” “recitals” and the “preamble”
will be to Sections, clauses, recitals and the preamble, respectively, of this
Agreement unless otherwise specifically provided. References to “Articles” will
be to Articles of this Agreement unless otherwise specifically provided.
References to “Exhibits” will be to Exhibits to this Agreement unless otherwise
specifically provided.

 

(e)           Notwithstanding anything to the contrary in this Agreement, any
references contained herein to any section, clause, paragraph, definition or
other provision of the Indenture (including any definition contained therein)
shall be deemed to be a reference to such section, clause, paragraph, definition
or other provision of the Indenture as in effect on the date of this Agreement;
provided that any reference to any such section, clause, paragraph or other
provision shall refer to such section, clause, paragraph or other provision of
the Indenture (including any definition contained therein) as amended or
modified from time to time if such amendment or modification has been made in
accordance with the Indenture. Unless otherwise set forth herein, references to
principal amount shall include, without duplication, any reimbursement
obligations with respect to a letter of credit and the face amount of any
outstanding letter of credit (whether or not such amount is, at the time of
determination, drawn or available to be drawn).

 

This Agreement and the other Parity Lien Security Documents will be construed
without regard to the identity of the party who drafted it and as though the
parties participated equally in drafting it. Consequently, each of the parties
acknowledges and agrees that any rule of construction that a document is to be
construed against the drafting party will not be applicable either to this
Agreement or the other Parity Lien Security Documents.

 

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ARTICLE 2
THE TRUST ESTATE

 

Section 2.1          Declaration of Trust.

 

To secure the payment of the Parity Lien Obligations and in consideration of the
premises and the mutual agreements set forth herein, each of the Grantors hereby
confirms the grant of Liens in favor of the Collateral Trustee, and the
Collateral Trustee hereby accepts and agrees to hold, in trust under this
Agreement for the benefit of all current and future Parity Lien Secured Parties,
on all of such Grantor’s right, title and interest in, to and under all
Collateral and on all Liens now or hereafter granted to the Collateral Trustee
by each Grantor under any Parity Lien Security Document for the benefit of the
Parity Lien Secured Parties, together with all of the Collateral Trustee’s
right, title and interest in, to and under the Parity Lien Security Documents,
and all interests, rights, powers and remedies of the Collateral Trustee
thereunder or in respect thereof and all cash and non-cash proceeds thereof
(collectively, the “Trust Estate”).

 

The Collateral Trustee and its successors and assigns under this Agreement will
hold the Trust Estate in trust for the benefit solely and exclusively of all
current and future Parity Lien Secured Parties as security for the payment of
all present and future Parity Lien Obligations.

 

Notwithstanding the foregoing, if at any time:

 

(1)           all Liens securing the Parity Lien Obligations have been released
as provided in Section 4.1;

 

(2)           the Collateral Trustee holds no other property in trust as part of
the Trust Estate;

 

(3)           no monetary obligation (other than indemnification and other
contingent obligations not then due and payable and letters of credit that have
been cash collateralized at the lower of (A) 105% of the aggregate undrawn
amount and (B) the percentage of the aggregate undrawn amount required for
release of Liens under the terms of the applicable Parity Lien Documents) is
outstanding and payable under this Agreement to the Collateral Trustee or any of
its co-trustees or agents (whether in an individual or representative capacity);
and

 

(4)           the Company delivers to the Collateral Trustee an Officers’
Certificate stating that all Parity Liens of the Collateral Trustee have been
released in compliance with all applicable provisions of the Parity Lien
Documents and that the Grantors are not required by any Parity Lien Document to
grant any Parity Lien upon any property, then the Trust Estate arising hereunder
will terminate, except that all provisions set forth in Sections 7.8 and 7.9
that are enforceable by the Collateral Trustee or any of its co-trustees or
agents (whether in an individual or representative capacity) will remain
enforceable in accordance with their terms.

 

The parties further declare and covenant that the Trust Estate will be held and
distributed by the Collateral Trustee subject to the further agreements herein.

 

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Section 2.2          Collateral Shared Equally and Ratably.  The parties to this
Agreement agree that the payment and satisfaction of all of the Parity Lien
Obligations will be secured equally and ratably by the Parity Lien established
in favor of the Collateral Trustee for the benefit of the Parity Lien Secured
Parties, notwithstanding the time of incurrence of any Parity Lien Obligations
or time or method of creation or perfection of any Parity Liens securing such
Parity Lien Obligations.

 

Section 2.3          Similar Collateral and Agreements.  The parties to this
Agreement agree that it is their intention that the Parity Liens be identical.
In furtherance of the foregoing, the parties hereto agree that the Parity Lien
Security Documents (other than the Notes Security Documents) shall be in all
material respects the same forms of documents as the respective Notes Security
Documents creating Liens on the Collateral.

 

ARTICLE 3
OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE

 

Section 3.1          Appointment and Undertaking of the Collateral Trustee.

 

(a)           Each Parity Lien Secured Party (other than the Collateral Trustee)
acting through its respective Parity Lien Representative hereby appoints the
Collateral Trustee to serve as collateral trustee hereunder on the terms and
conditions set forth herein. Subject to, and in accordance with, this Agreement,
the Collateral Trustee will, as collateral trustee, for the benefit solely and
exclusively of the present and future Parity Lien Secured Parties:

 

(1)           accept, enter into, hold, maintain, administer and enforce all
Parity Lien Security Documents, including all Collateral subject thereto, and
all Liens created thereunder, perform its obligations hereunder and under the
Parity Lien Security Documents and protect, exercise and enforce the interests,
rights, powers and remedies granted or available to it under, pursuant to or in
connection with the Parity Lien Security Documents;

 

(2)           take all lawful and commercially reasonable actions permitted
under the Parity Lien Security Documents that it may deem necessary or advisable
to protect or preserve its interest in the Collateral subject thereto and such
interests, rights, powers and remedies;

 

(3)           deliver and receive notices pursuant to this Agreement and the
Parity Lien Security Documents;

 

(4)           sell, assign, collect, assemble, foreclose on, institute legal
proceedings with respect to, or otherwise exercise or enforce the rights and
remedies of a secured party (including a mortgagee, trust deed beneficiary and
insurance beneficiary or loss payee) with respect to the Collateral under the
Parity Lien Security Documents and its other interests, rights, powers and
remedies;

 

(5)           remit as provided in Section 3.4 all cash proceeds received by the
Collateral Trustee from the collection, foreclosure or enforcement of its
interest in the

 

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Collateral under the Parity Lien Security Documents or any of its other
interests, rights, powers or remedies;

 

(6)           execute and deliver amendments to the Parity Lien Security
Documents as from time to time authorized pursuant to Section 7.1 accompanied by
an Officers’ Certificate to the effect that the amendment was permitted under
Section 7.1;

 

(7)           release or subordinate any Lien granted to it by any Parity Lien
Security Document upon any Collateral if and as required by Section 3.2; and

 

(8)           enter into and perform its obligations and protect, exercise and
enforce its interest, rights, powers and remedies under the Intercreditor
Agreement.

 

(b)           Each party to this Agreement acknowledges and consents to the
undertaking of the Collateral Trustee set forth in Section 3.1(a) and agrees to
each of the other provisions of this Agreement applicable to the Collateral
Trustee.

 

(c)           Notwithstanding anything to the contrary contained in this
Agreement, the Collateral Trustee will not commence any exercise of remedies or
any foreclosure actions or otherwise take any action or proceeding against any
of the Collateral (other than actions as necessary to prove, protect or preserve
the Liens securing the Parity Lien Obligations to the extent permitted pursuant
to the Intercreditor Agreement) unless and until it shall have been directed by
written notice of an Act of Parity Lien Debtholders and then only in accordance
with the provisions of this Agreement and the Intercreditor Agreement.

 

(d)           Notwithstanding anything to the contrary contained in this
Agreement, neither the Company nor any of its Affiliates may serve as Collateral
Trustee.

 

Section 3.2          Release or Subordination of Liens.  The Collateral Trustee
will not release or subordinate any Lien of the Collateral Trustee or consent to
the release or subordination of any Lien of the Collateral Trustee, except:

 

(a)           as directed by an Act of Parity Lien Debtholders accompanied by an
Officers’ Certificate to the effect that the release or subordination was
permitted by each applicable Parity Lien Document and otherwise setting forth
the requirements of Section 4.1(b)(1) and 4.1(b)(2);

 

(b)           as required by Article 4;

 

(c)           to release or subordinate Liens on Collateral to the extent
permitted by each applicable Parity Lien Document; provided that the Collateral
Trustee receives an Officers’ Certificate confirming the foregoing;

 

(d)           as ordered pursuant to applicable law under a final and
nonappealable order or judgment of a court of competent jurisdiction; or

 

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(e)           for the subordination of the Trust Estate and the Parity Liens to
the extent required by the Intercreditor Agreement; provided that the Collateral
Trustee receives an Officers’ Certificate confirming the foregoing.

 

Section 3.3          Enforcement of Liens. If the Collateral Trustee at any time
receives written notice from a Parity Lien Representative stating that any event
has occurred that constitutes a default under any Parity Lien Document entitling
the Collateral Trustee to foreclose upon, collect or otherwise enforce its Liens
under the Parity Lien Security Documents, the Collateral Trustee will promptly
deliver written notice thereof to each Parity Lien Representative. Thereafter,
the Collateral Trustee may await direction by an Act of Parity Lien Debtholders
and, subject to the terms of the Intercreditor Agreement, will act, or decline
to act, as directed by an Act of Parity Lien Debtholders, in the exercise and
enforcement of the Collateral Trustee’s interests, rights, powers and remedies
in respect of the Collateral or under the Parity Lien Security Documents or
applicable law and, following the initiation of such exercise of remedies, the
Collateral Trustee will act, or decline to act, with respect to the manner of
such exercise of remedies as directed by an Act of Parity Lien Debtholders.
Unless it has been directed to the contrary by an Act of Parity Lien
Debtholders, the Collateral Trustee in any event may (but will not be obligated
to) take or refrain from taking such action with respect to any default under
any Parity Lien Document as it may deem advisable and in the best interest of
the holders of Parity Lien Obligations, all in the Collateral Trustee’s sole
discretion.

 

Section 3.4          Application of Proceeds.

 

(a)           Subject to the terms of the Intercreditor Agreement, the
Collateral Trustee will apply the proceeds of any collection, sale, foreclosure
or other realization upon, or exercise of any right or remedy with respect to,
any Collateral and the proceeds of any title insurance or other insurance policy
required under any Parity Lien Document or otherwise covering the Collateral,
and any condemnation proceeds with respect to the Collateral, in the following
order of application:

 

FIRST, to the payment of all amounts payable under this Agreement on account of
the Collateral Trustee’s and/or the Trustee’s fees and any costs, expenses,
reasonable legal fees or other liabilities of any kind incurred by the
Collateral Trustee or any co-trustee or agent of the Collateral Trustee in
connection with any Parity Lien Document (including, but not limited to,
indemnification obligations);

 

SECOND, to the respective Parity Lien Representatives equally and ratably for
application to the payment of all outstanding Parity Lien Debt and any other
Parity Lien Obligations that are then due and payable in such order as may be
provided in the Parity Lien Documents in an amount sufficient to pay in full in
cash all outstanding Parity Lien Debt and all other Parity Lien Obligations that
are then due and payable (including, to the extent legally permitted, all
interest accrued thereon after the commencement of any Insolvency or Liquidation
Proceeding at the rate, including any applicable post-default rate, specified in
the Parity Lien Documents, even if such interest is not enforceable, allowable
or allowed as a claim in such proceeding but excluding contingent indemnity

 

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obligations for which no claim has been made), and including the discharge or
cash collateralization (at the lower of (1) 105% of the aggregate undrawn amount
and (2) the percentage of the aggregate undrawn amount required for release of
Liens under the terms of the applicable Parity Lien Document) of all outstanding
letters of credit, if any, constituting Parity Lien Debt;

 

THIRD, to the repayment of Excess Priority Lien Obligations;

 

FOURTH, to the repayment of Junior Lien Debt and any other Obligations secured
by a permitted Junior Lien on the Collateral sold or realized upon; and

 

FIFTH, any surplus remaining after the payment in full in cash of the amounts
described in the preceding clauses will be paid to the Company or the applicable
Guarantor, as the case may be, and as directed in writing by the Company, its
successors or assigns, or as a court of competent jurisdiction may direct.

 

(b)           This Section 3.4 is intended for the benefit of, and will be
enforceable as a third party beneficiary by, each present and future holder of
Parity Lien Obligations, each present and future Parity Lien Representative and
the Collateral Trustee as holder of Parity Liens. The Parity Lien Representative
of each future issuance of Additional Notes and each future Series of Parity
Lien Debt will be required to deliver to the Collateral Trustee a Collateral
Trust Joinder and an Additional Secured Debt Designation as provided in
Section 3.8 at the time of incurrence of such Series of Parity Lien Debt.

 

(c)           In connection with the application of proceeds pursuant to
Section 3.4(a), except as otherwise directed by an Act of Parity Lien
Debtholders, the Collateral Trustee may sell any non-cash proceeds for cash
prior to the application of the proceeds thereof.

 

(d)           In making the determinations and allocations in accordance with
Section 3.4(a), the Collateral Trustee may conclusively rely upon information
supplied by the relevant Parity Lien Representative as to the amounts of unpaid
principal and interest and other amounts outstanding with respect to its
respective Parity Lien Debt and any other Parity Lien Obligations.

 

Section 3.5          Powers of the Collateral Trustee.

 

(a)           The Collateral Trustee is irrevocably authorized and empowered to
enter into and perform its obligations and protect, perfect, exercise and
enforce its interest, rights, powers and remedies under the Parity Lien Security
Documents and applicable law and in equity and to act as set forth in this
Article 3 or, subject to the other provisions of this Agreement, as requested in
any lawful directions given to it from time to time in respect of any matter by
an Act of Parity Lien Debtholders.

 

(b)           No Parity Lien Representative or holder of Parity Lien Obligations
(other than the Collateral Trustee) will have any liability whatsoever for any
act or omission of the Collateral Trustee, and the Collateral Trustee will have
no liability whatsoever for any act or omission of any Parity Lien
Representative or any holder of Parity Lien Obligations.

 

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Section 3.6          Documents and Communications.  The Collateral Trustee will
permit each Parity Lien Representative and each holder of Parity Lien
Obligations upon reasonable written notice and at reasonable times from time to
time to inspect and copy, at the cost and expense of the party requesting such
copies, any and all Parity Lien Security Documents and other documents, notices,
certificates, instructions or communications received by the Collateral Trustee
in its capacity as such.

 

Section 3.7          For Sole and Exclusive Benefit of Holders of Parity Lien
Obligations.  The Collateral Trustee will accept, hold, administer and enforce
all Liens on the Collateral at any time transferred or delivered to it and all
other interests, rights, powers and remedies at any time granted to or
enforceable by the Collateral Trustee and all other property of the Trust Estate
solely and exclusively for the benefit of the present and future holders of
present and future Parity Lien Obligations, and will distribute all proceeds
received by it in realization thereon or from enforcement thereof solely and
exclusively pursuant to the provisions of Section 3.4.

 

Section 3.8          Additional Parity Lien Debt.

 

(a)           The Collateral Trustee will, as trustee hereunder, perform its
undertakings set forth in Section 3.1(a) with respect to any Parity Lien
Obligations constituting Additional Notes or a Series of Parity Lien Debt that
is issued or incurred after the date hereof; provided that:

 

(1)           such Parity Lien Obligations are identified as Parity Lien Debt in
accordance with the procedures set forth in Section 3.8(b); and

 

(2)           the designated Parity Lien Representative identified pursuant to
Section 3.8(b) signs a Collateral Trust Joinder and an Additional Secured Debt
Designation and delivers the same to the Collateral Trustee.

 

(b)           The Company will be permitted to designate as an additional holder
of Parity Lien Debt hereunder each Person who is, or who becomes, the registered
holder of Parity Lien Debt incurred by the Company or any Guarantor after the
date of this Agreement in accordance with the terms of all applicable Parity
Lien Documents. The Company may only effect such designation by delivering to
the Collateral Trustee an Additional Parity Lien Debt Certificate that:

 

(1)           states that the Company or applicable Grantor intends to incur
additional Parity Lien Debt (“Additional Parity Lien Debt”) that is permitted by
each applicable Parity Lien Document to be secured with a Parity Lien equally
and ratably with all previously existing and future Parity Lien Debt;

 

(2)           specifies the name, address and contact information of the Parity
Lien Representative for such series of Additional Parity Lien Debt for purposes
of Section 7.6;

 

(3)           attaches as Exhibit 1 to such Additional Parity Lien Debt
Certificate a Reaffirmation Agreement in substantially the form attached as
Exhibit 1 to

 

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Exhibit A of this Agreement, which Reaffirmation Agreement has been duly
executed by the Company and each Guarantor; and

 

(4)           states that the Company has caused a copy of the Additional Parity
Lien Debt Certificate and the related Collateral Trust Joinder to be delivered
to each then existing Parity Lien Representative.

 

Although the Company shall be required to deliver a copy of each Additional
Parity Lien Debt Certificate, each Collateral Trust Joinder and each Additional
Secured Debt Designation to each then existing Parity Lien Representative, the
failure to so deliver a copy of the Additional Parity Lien Debt Certificate,
Collateral Trust Joinder and/or Additional Secured Debt Designation to any then
existing Parity Lien Representative shall not affect the status of such debt as
Additional Parity Lien Debt if the other requirements of this Section 3.8 are
complied with. Each of the Collateral Trustee and the other then existing Parity
Lien Representatives shall have the right to request that the Company provide a
legal opinion or opinions of counsel (subject to customary assumptions and
qualifications) as to the Additional Parity Lien Debt being secured by a valid
and perfected security interest in the Collateral; provided that (i) such legal
opinion or opinions need not address any collateral of a type not previously
covered by any legal opinion delivered by or on behalf of the Company and (ii)
nothing shall preclude such legal opinion or opinions from being delivered on a
post-closing basis after the incurrence of such Additional Parity Lien Debt if
permitted by the Parity Lien Representative for such Additional Parity Lien
Debt. Notwithstanding the foregoing, nothing in this Agreement will be construed
to allow the Company or any Guarantor to incur additional Indebtedness
(including Additional Notes) unless otherwise permitted by the terms of all
applicable Parity Lien Documents.

 

(c)           With respect to any Parity Lien Obligations constituting
Additional Notes or a Series of Parity Lien Debt that is issued or incurred
after the date hereof, the Company and each of the Guarantors agrees to take
such actions (if any) as may from time to time reasonably be requested by the
Collateral Trustee, any Parity Lien Representative or any Act of Parity Lien
Debtholders, and enter into such technical amendments, modifications and/or
supplements to the then existing Guarantees and Parity Lien Security Documents
(or execute and deliver such additional Parity Lien Security Documents) as may
from time to time be reasonably requested by such Persons (including as
contemplated by Section 3.8(d) below), to ensure that the Additional Notes or
the Additional Parity Lien Debt, as applicable, are secured by, and entitled to
the benefits of, the Parity Lien Security Documents, and each Parity Lien
Secured Party (by its acceptance of the benefits hereof) hereby agrees to, and
authorizes the Collateral Trustee to enter into, any such technical amendments,
modifications and/or supplements (and additional Parity Lien Security
Documents). The Company and each Guarantor hereby further agree that, if there
are any recording, filing or other similar fees payable in connection with any
of the actions to be taken pursuant to this Section 3.8(c) or Section 3.8(d),
all such amounts shall be paid by, and shall be for the account of, the Company
and the respective Guarantors, on a joint and several basis.

 

(d)           Without limitation of the foregoing, upon reasonable request of
the Collateral Trustee, any Parity Lien Representative or any Act of Parity Lien
Debtholders, each Grantor agrees to take the following actions with respect to
any real property Collateral (including Oil and Gas Properties (as defined in
the Indenture as in effect on the date hereof))

 

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with respect to all Additional Parity Lien Debt (it being understood that any
such actions may be taken following the incurrence of any such Additional Parity
Lien Debt on a post-closing basis if permitted by the Parity Lien Representative
for such Additional Parity Lien Debt):

 

(1)           each applicable Grantor shall enter into, and deliver to the
Collateral Trustee a mortgage modification or new mortgage, debenture, hypothec,
deed of trust, deed to secure Indebtedness or similar document, instrument or
agreement with regard to each real property subject to a mortgage, debenture,
hypothec, deed of trust, deed to secure Indebtedness or similar document,
instrument or agreement (each such mortgage, debenture, hypothec, deed of trust,
deed to secure Indebtedness or similar document, instrument or agreement a
“Mortgage” and each such property a “Mortgaged Property”), in proper form for
recording in all applicable jurisdictions, in a form and substance reasonably
satisfactory to the Collateral Trustee;

 

(2)           each applicable Grantor will cause to be delivered to the
Collateral Trustee a local counsel opinion (subject to customary assumptions and
qualifications) to the effect that the Collateral Trustee has a valid and
perfected Lien with respect to each such Mortgaged Property; and

 

(3)           each applicable Grantor will cause a title company to have
delivered to the Collateral Trustee an endorsement to each title insurance
policy for any real property Collateral (excluding Oil and Gas Properties), if
any, then in effect for the benefit of the Parity Lien Secured Parties, date
down(s) or other evidence (which may include a new title insurance policy) (each
such delivery, a “Title Datedown Product”), in each case insuring that (i) the
priority of the Liens of the applicable Mortgage(s) as security for the Parity
Lien Obligations has not changed and, if a new Mortgage is entered into, that
the Lien of such new Mortgage securing the Parity Lien Debt then being incurred
shall have the same priority as any existing Mortgage securing then existing
Parity Lien Obligations, (ii) since the later of the original date of such title
insurance policy and the date of the Title Datedown Product delivered most
recently prior to (and not in connection with) such additional Indebtedness,
there has been no change in the condition of title and (iii) there are no
intervening liens or encumbrances which may then or thereafter take priority
over the Lien of the applicable Mortgage(s), in each case other than with
respect to Liens permitted by each Parity Lien Document.

 

The Company will deliver an Officers’ Certificate to the Collateral Trustee
confirming that the foregoing conditions have been satisfied.

 

ARTICLE 4
OBLIGATIONS ENFORCEABLE BY THE COMPANY AND THE OTHER GRANTORS

 

Section 4.1          Release of Liens on Collateral.

 

(a)           The Collateral Trustee’s Liens upon the Collateral will be
automatically released:

 

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(1)           in whole, upon (A) payment in full in cash and discharge of all
outstanding Parity Lien Debt and all other Parity Lien Obligations that are
outstanding, due and payable at the time all of the Parity Lien Debt is paid in
full in cash and discharged (other than contingent indemnity obligations for
which no claim has been made), (B) termination or expiration of all commitments
to extend credit under all Parity Lien Documents and (C) the cancellation or
termination or cash collateralization (at the lower of (1) 105% of the aggregate
undrawn amount and (2) the percentage of the aggregate undrawn amount required
for release of Liens under the terms of the applicable Parity Lien Documents) of
all outstanding letters of credit issued pursuant to any Parity Lien Documents;

 

(2)           as to any Collateral of a Guarantor that is (A) released as a
Guarantor under each Parity Lien Document and (B) is not obligated (as primary
obligor or guarantor) with respect to any other Parity Lien Obligations and so
long as the respective release does not violate the terms of any Parity Lien
Document which then remains in effect;

 

(3)           as to any Collateral of the Company or a Guarantor that is sold,
transferred or otherwise disposed of by the Company or any Guarantor to a Person
that is not (either before or after such sale, transfer or disposition) the
Company or a Restricted Subsidiary (as defined in the Indenture) of the Company
in a transaction or other circumstance that does not violate Section 4.14 of the
Indenture (other than the obligation to apply proceeds of such Asset Sale (as
defined in the Indenture) as provided in such Section 4.14 of the Indenture) and
is permitted by all of the other Parity Lien Documents, at the time of such
sale, transfer or other disposition or to the extent of the interest sold,
transferred or otherwise disposed of; provided that the Collateral Trustee’s
Liens upon the Collateral will not be released if the sale or other disposition
is subject to Article 5 of the Indenture;

 

(4)           as to a release of less than all or substantially all of the
Collateral, if consent to the release of all Parity Liens on such Collateral has
been given by an Act of Parity Lien Debtholders;

 

(5)           in whole, if the Liens on such Collateral have been released in
accordance with the terms of each Series of Parity Lien Debt;

 

(6)           as to a release of all or substantially all of the Collateral, if
(A) consent to the release of that Collateral has been given by the requisite
percentage or number of holders of each Series of Parity Lien Debt at the time
outstanding as provided for in the applicable Parity Lien Documents and (B) the
Company has delivered an Officers’ Certificate to the Collateral Trustee
certifying that all such necessary consents have been obtained; or

 

(7)           if and to the extent, and in the manner, required by
Section 4.01(a) of the Intercreditor Agreement.

 

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(b)           The Collateral Trustee agrees for the benefit of the Company and
the other Grantors that if the Collateral Trustee at any time receives:

 

(1)           an Officers’ Certificate (which the Collateral Trustee shall be
entitled to rely upon) stating that (A) the signing officer has read Article 4
of this Agreement and understands the provisions and the definitions relating
hereto, (B) such officer has made such examination or investigation as is
necessary to enable him or her to express an informed opinion as to whether or
not the conditions precedent in this Agreement, the Intercreditor Agreement and
all other Parity Lien Documents, if any, relating to the release of the
Collateral have been complied with, (C) in the opinion of such officer, such
conditions precedent, if any, have been complied with and (D) such release of
Collateral did not violate the terms of any applicable Parity Lien Document; and

 

(2)           the proposed instrument or instruments releasing such Lien as to
such property in recordable form, if applicable;

 

then, promptly following receipt by the Collateral Trustee of the items required
by this Section 4.1(b), upon request of the Company, the Collateral Trustee will
execute (with such acknowledgements and/or notarizations as are required) and
deliver evidence of such release to the Company or other applicable Grantor;
provided that, in the case of a release of Liens under Section 4.1(a)(7), the
Collateral Trustee shall execute and deliver such proposed instruments releasing
its Liens contemporaneously with the execution and delivery of such similar
instruments by the Priority Lien Collateral Agent in accordance with the terms
of the Intercreditor Agreement.

 

(c)           The Collateral Trustee hereby agrees that:

 

(1)           in the case of any release pursuant to Section 4.1(a)(3), if the
terms of any such sale, transfer or other disposition require the payment of the
purchase price to be contemporaneous with the delivery of the applicable
release, then, subject to the Intercreditor Agreement and at the written request
of and at the expense of the Company or other applicable Grantor, the Collateral
Trustee will either (A) be present at and deliver the release at the closing of
such transaction or (B) deliver the release under customary escrow arrangements
that permit such contemporaneous payment and delivery of the release; and

 

(2)           at any time when a Parity Lien Debt Default has occurred and is
continuing, within one Business Day of the receipt by it of any Act of Parity
Lien Debtholders pursuant to Section 4.1(a)(4), the Collateral Trustee will
deliver a copy of such Act of Parity Lien Debtholders to each Parity Lien
Representative.

 

Section 4.2          Delivery of Copies to Parity Lien Representatives.  The
Company will deliver to each Parity Lien Representative a copy of each Officers’
Certificate delivered to the Collateral Trustee pursuant to Section 4.1(b),
together with copies of all documents delivered to the Collateral Trustee with
such Officers’ Certificate. The Parity Lien Representatives will not be
obligated to take notice thereof or to act thereon. Each Parity Lien
Representative shall, within

 

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one Business Day of the receipt by it of the Officers’ Certificate and proposed
release instrument(s) delivered to the Collateral Trustee pursuant to
Section 4.1(b), deliver a copy of such notice to each registered holder of the
Series of Parity Lien Debt for which it acts as Parity Lien Representative.

 

Section 4.3          Collateral Trustee not Required to Serve, File or Record. 
Subject to Section 3.2, the Collateral Trustee is not required to serve, file,
register or record any instrument releasing or subordinating its Liens on any
Collateral; provided that if the Company or any other Grantor shall make a
written demand for a termination statement under Section 9-513(c) of the UCC,
the Collateral Trustee shall comply with the written request of the Company or
Grantor to comply with the requirements of such UCC provision (which written
request must be accompanied by an Officers’ Certificate relating to the same);
provided, further, that the Collateral Trustee must first confirm with the
Parity Lien Representatives that the requirements of such UCC provisions have
been satisfied.

 

Section 4.4          Release of Liens in Respect of Notes.  In addition to any
release pursuant to Section 4.1 hereof, the Collateral Trustee’s Parity Liens
will no longer secure the Notes outstanding under the Indenture or any other
Obligations under the Note Documents, and the right of the holders of the Notes
to the benefits and proceeds of the Collateral Trustee’s Parity Liens on the
Collateral will terminate and be discharged as provided for in Section 13.06 of
the Indenture.

 

Section 4.5          Release of Liens in Respect of any Series of Parity Lien
Debt other than the Notes.  In addition to any release pursuant to Section 4.1
hereof, as to any Series of Parity Lien Debt other than the Notes, the
Collateral Trustee’s Parity Lien will no longer secure such Series of Parity
Lien Debt if such Parity Lien Debt has been paid in full, all commitments to
extend credit in respect of such Series of Parity Lien Debt have been terminated
and all other Parity Lien Obligations related thereto that are outstanding and
unpaid at the time such Series of Parity Lien Debt is paid are also paid in
full, or if otherwise released by the terms of such Parity Lien Debt or the
Intercreditor Agreement.

 

ARTICLE 5
IMMUNITIES OF THE COLLATERAL TRUSTEE

 

Section 5.1          No Implied Duty.  The Collateral Trustee will not have any
fiduciary duties nor will it have responsibilities or obligations other than
those expressly assumed by it in this Agreement, the other Parity Lien Security
Documents and the Intercreditor Agreement. No implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement, the other Parity Lien Documents or the Intercreditor Agreement, or
otherwise exist against the Collateral Trustee. Without limiting the generality
of the foregoing sentences, the use of the term “trustee” in this Agreement with
reference to the Collateral Trustee is not intended to connote any fiduciary or
other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties. The Collateral Trustee will not be required to
take any action that is contrary to applicable law or any provision of this
Agreement, the other Parity Lien Security Documents or the Intercreditor
Agreement.

 

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Section 5.2          Appointment of Agents and Advisors.  The Collateral Trustee
may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, attorneys, accountants,
appraisers or other experts or advisors selected by it in good faith as it may
reasonably require and will not be responsible for any misconduct or negligence
on the part of any of them.

 

Section 5.3          Other Agreements.  The Collateral Trustee has accepted its
appointment as collateral trustee hereunder and is bound by the Parity Lien
Security Documents executed by the Collateral Trustee as of the date of this
Agreement, and the Collateral Trustee shall at the request of the Company
execute additional Parity Lien Security Documents delivered to it after the date
of this Agreement (including to secure Obligations arising under Additional
Parity Lien Debt to the extent such Obligations are permitted to be incurred and
secured under the Parity Lien Documents); provided that such additional Parity
Lien Security Documents do not adversely affect the rights, privileges, benefits
and immunities of the Collateral Trustee or conflict with the terms of the
Intercreditor Agreement. The Collateral Trustee will not otherwise be bound by,
or be held obligated by, the provisions of any credit agreement, indenture or
other agreement governing Parity Lien Debt (other than this Agreement and the
other Parity Lien Security Documents to which it is a party).

 

Section 5.4          Solicitation of Instructions.

 

(a)           The Collateral Trustee may at any time solicit written
confirmatory instructions, in the form of an Act of Parity Lien Debtholders, an
Officers’ Certificate, a legal opinion from counsel to the Company or an order
of a court of competent jurisdiction, as to any action that it may be requested
or required to take, or that it may propose to take, in the performance of any
of its obligations under this Agreement or the other Parity Lien Security
Documents, and the Collateral Trustee will not be liable for any action it takes
or omits to take in good faith in reliance on any such certificate,  opinion or
order.  In the absence of bad faith on its part, the Collateral Trustee may
rely, and will be protected in acting or refraining from acting, upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to have
been signed or presented by the proper Person. The Collateral Trustee need not
investigate any fact or matter stated in the document, but, in the case of any
document which is specifically required to be furnished to the Collateral
Trustee pursuant to any provision hereof, the Collateral Trustee shall examine
the document to determine whether it conforms to the requirements of this
Indenture (but need not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein).

 

(b)           No written direction given to the Collateral Trustee by an Act of
Parity Lien Debtholders that in the sole judgment of the Collateral Trustee
imposes, purports to impose or might reasonably be expected to impose upon the
Collateral Trustee any obligation or liability not set forth in or arising under
this Agreement and the other Parity Lien Security Documents will be binding upon
the Collateral Trustee unless the Collateral Trustee elects, at its sole option,
to accept such direction.

 

(c)           The Collateral Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement at the request, order
or direction of the Required

 

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Parity Lien Debtholders pursuant to the provisions of this Agreement, unless
such holders shall have furnished to the Collateral Trustee reasonable security
or indemnity satisfactory to it against the costs, expenses and liabilities
which may be incurred therein or thereby.

 

Section 5.5          Limitation of Liability.  The Collateral Trustee will not
be responsible or liable for any action taken or omitted to be taken by it
hereunder or under any other Parity Lien Security Document, except as determined
by a court of competent jurisdiction in a final, nonappealable judgment to have
resulted from the Collateral Trustee’s gross negligence or willful misconduct.

 

Section 5.6          Documents in Satisfactory Form.  The Collateral Trustee
will be entitled to require that all agreements, certificates, opinions,
instruments and other documents at any time submitted to it, including those
expressly provided for in this Agreement, be delivered to it in a form and with
substantive provisions reasonably satisfactory to it.  The Collateral Trustee
(i) makes no representation as to the validity or adequacy of any Parity Lien
Document and (ii) is not responsible for any statement in any Parity Lien
Document other than its certificate of authentication and any representations
and warranties made by it.

 

Section 5.7          Entitled to Rely.  The Collateral Trustee may seek and rely
upon, and shall be fully protected in relying upon, any judicial order or
judgment, upon any advice, opinion or statement of legal counsel, independent
consultants and other experts selected by it in good faith and upon any
certification, instruction, notice or other writing delivered to it by the
Company or any Guarantor in compliance with the provisions of this Agreement or
delivered to it by any Parity Lien Representative as to the holders of Parity
Lien Obligations for whom it acts, without being required to determine the
authenticity thereof or the correctness of any fact stated therein or the
propriety or validity of service thereof. The Collateral Trustee may act in
reliance upon any instrument comporting with the provisions of this Agreement or
any signature believed by it in good faith to be genuine and may assume that any
Person purporting to give notice or receipt or advice or make any statement or
execute any document in connection with the provisions hereof or the other
Parity Lien Security Documents has been duly authorized to do so. To the extent
an Officers’ Certificate or opinion of counsel is required or permitted under
this Agreement to be delivered to the Collateral Trustee in respect of any
matter, the Collateral Trustee may rely conclusively on an Officers’ Certificate
or opinion of counsel as to such matter and such Officers’ Certificate or
opinion of counsel shall be full warranty and protection to the Collateral
Trustee for any action taken, suffered or omitted by it under the provisions of
this Agreement and the other Parity Lien Security Documents.  The Collateral
Trustee (a) shall not be responsible to any Parity Lien Secured Party for any
recitals, statements, information, representations or warranties of any other
Person contained herein, in the Parity Lien Documents or in any document,
certificate or other writing delivered in connection herewith or therewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectability, priority of sufficiency of this Agreement, the Parity Lien
Documents or the financial condition of the Company, the Guarantors or any of
them and (b) shall not be required to ascertain or inquire as to the performance
or observation of any of the terms, covenants or conditions of this Agreement or
any Parity Lien Document.

 

Section 5.8          Parity Lien Debt Default.  The Collateral Trustee will not
be required to inquire as to the occurrence or absence of any Parity Lien Debt
Default and will not be affected

 

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by or required to act upon any notice or knowledge as to the occurrence of any
Parity Lien Debt Default unless and until it is directed by an Act of Parity
Lien Debtholders.

 

Section 5.9          Actions by Collateral Trustee.  As to any matter not
expressly provided for by this Agreement or the other Parity Lien Security
Documents, the Collateral Trustee will act or refrain from acting as directed by
an Act of Parity Lien Debtholders and will be fully protected if it does so, and
any action taken, suffered or omitted pursuant to hereto or thereto shall be
binding on the holders of Parity Lien Obligations.

 

Section 5.10        Security or Indemnity in favor of the Collateral Trustee. 
The Collateral Trustee will not be required to advance or expend any funds or
otherwise incur any financial liability in the performance of its duties or the
exercise of its powers or rights hereunder unless it has been provided with
security or indemnity reasonably satisfactory to it against any and all
liability or expense which may be incurred by it by reason of taking or
continuing to take such action.

 

Section 5.11        Rights of the Collateral Trustee.  In the event of any
conflict between any terms and provisions set forth in this Agreement and those
set forth in any other Parity Lien Security Document, the terms and provisions
of this Agreement shall supersede and control the terms and provisions of such
other Parity Lien Security Document. In the event there is any bona fide, good
faith disagreement between the other parties to this Agreement or any of the
other Parity Lien Security Documents resulting in adverse claims being made in
connection with Collateral held by the Collateral Trustee and the terms of this
Agreement or any of the other Parity Lien Security Documents do not
unambiguously mandate the action the Collateral Trustee is to take or not to
take in connection therewith under the circumstances then existing, or the
Collateral Trustee is in doubt as to what action it is required to take or not
to take hereunder or under the other Parity Lien Security Documents, it will be
entitled to refrain from taking any action (and will incur no liability for
doing so) until directed otherwise in writing by a request signed jointly by the
parties hereto entitled to give such direction or by order of a court of
competent jurisdiction.

 

Section 5.12        Limitations on Duty of Collateral Trustee in Respect of
Collateral.

 

(a)           Beyond the exercise of reasonable care in the custody of
Collateral in its possession, the Collateral Trustee will have no duty as to any
Collateral in its possession or control or in the possession or control of any
agent or bailee or any income thereon or as to preservation of rights against
prior parties or any other rights pertaining thereto and the Collateral Trustee
will not be responsible for filing any financing or continuation statements or
recording any documents or instruments in any public office at any time or times
or otherwise perfecting or maintaining the perfection of any Liens on the
Collateral; provided that, notwithstanding the foregoing, the Collateral Trustee
will execute, file or record UCC-3 continuation statements and other documents
and instruments to preserve, protect or perfect the security interests granted
to the Collateral Trustee (subject to the priorities set forth herein) if it
shall receive a specific written request to execute, file or record the
particular continuation statement or other specific document or instrument by
any Parity Lien Representative. The Collateral Trustee shall deliver to each
other Parity Lien Representative a copy of any such written request. The
Collateral Trustee will be deemed to have exercised reasonable care in the

 

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custody of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which it accords its own property, and the
Collateral Trustee will not be liable or responsible for any loss or diminution
in the value of any of the Collateral by reason of the act or omission of any
carrier, forwarding agency or other agent or bailee selected by the Collateral
Trustee in good faith.

 

(b)           Except as provided in Section 5.12(a), the Collateral Trustee will
not be responsible for the existence, genuineness or value of any of the
Collateral or for the validity, perfection, priority or enforceability of the
Liens in any of the Collateral, for the validity or sufficiency of the
Collateral or any agreement or assignment contained therein, for the validity of
the title of any Grantor to the Collateral, for insuring the Collateral or for
the payment of taxes, charges, assessments or Liens upon the Collateral or
otherwise as to the maintenance of the Collateral. The Collateral Trustee hereby
disclaims any representation or warranty to the current and future holders of
the Parity Lien Obligations concerning the perfection of the security interests
granted to it or in the value of any Collateral. The Collateral Trustee shall
not be under any obligation to the Trustee or any holder of Parity Lien Debt to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this or any other Parity Lien
Security Document or the Intercreditor Agreement or to inspect the properties,
books or records of the Company or any Guarantor.

 

Section 5.13        Assumption of Rights, Not Assumption of Duties. 
Notwithstanding anything to the contrary contained herein:

 

(1)           each of the parties thereto will remain liable under each of the
Parity Lien Security Documents (other than this Agreement) to the extent set
forth therein to perform all of their respective duties and obligations
thereunder to the same extent as if this Agreement had not be executed;

 

(2)           the exercise by the Collateral Trustee of any of its rights,
remedies or powers hereunder will not release such parties from any of their
respective duties or obligations under the other Parity Lien Security Documents;
and

 

(3)           the Collateral Trustee will not be obligated to perform any of the
obligations or duties of the Company or any Grantor.

 

Section 5.14        No Liability for Clean Up of Hazardous Materials.  In the
event that the Collateral Trustee is required to acquire title to an asset for
any reason, or take any managerial action of any kind in regard thereto, in
order to carry out any fiduciary or trust obligation for the benefit of another,
which in the Collateral Trustee’s sole discretion may cause the Collateral
Trustee to be considered an “owner or operator” under any environmental laws or
otherwise cause the Collateral Trustee to incur, or be exposed to, any
environmental liability or any liability under any other federal, state or local
law, the Collateral Trustee reserves the right, instead of taking such action,
either to resign as Collateral Trustee or to arrange for the transfer of the
title or control of the asset to a court appointed receiver. The Collateral
Trustee will not be liable to any Person for any environmental liability or any
environmental claims or contribution actions under any federal, state or local
law, rule or regulation by reason of the Collateral Trustee’s actions and
conduct as authorized, empowered and directed hereunder or relating to

 

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any kind of discharge or release or threatened discharge or release of any
hazardous materials into the environment.

 

Section 5.15        Other Relationships with the Company or Guarantors.  U.S.
Bank National Association and its Affiliates (and any successor Collateral
Trustee and its Affiliates) may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with the Company or any Guarantor and its Affiliates as though it was
not the Collateral Trustee hereunder and without notice to or consent of the
Trustee. The Trustee and the holders of the Parity Lien Obligations acknowledge
that, pursuant to such activities, U.S. Bank National Association or its
Affiliates (and any successor Collateral Trustee and its Affiliates) may receive
information regarding the Company or any Guarantor or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Company, such Guarantor or such Affiliate) and acknowledge that the Collateral
Trustee shall not be under any obligation to provide such information to the
Trustee or the holders of the Parity Lien Obligations. Nothing herein shall
impose or imply any obligation on the part of U.S. Bank National Association (or
any successor Collateral Trustee) to advance funds.

 

ARTICLE 6
RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE

 

Section 6.1          Resignation or Removal of Collateral Trustee.  Subject to
the appointment of a successor Collateral Trustee as provided in Section 6.2 and
the acceptance of such appointment by the successor Collateral Trustee:

 

(a)           the Collateral Trustee may resign at any time by giving not less
than 30 days’ notice of resignation to each Parity Lien Representative and the
Company; and

 

(b)           the Collateral Trustee may be removed at any time, with or without
cause, by an Act of Parity Lien Debtholders by giving not less than 30 days’
notice to the Collateral Trustee.

 

Section 6.2          Appointment of Successor Collateral Trustee.  Upon any such
resignation or removal, a successor Collateral Trustee may be appointed by an
Act of Parity Lien Debtholders. If no successor Collateral Trustee has been so
appointed and accepted such appointment within 30 days after the predecessor
Collateral Trustee gave notice of resignation or was removed, the retiring
Collateral Trustee may (at the expense of the Company), at its option, appoint a
successor Collateral Trustee, or petition a court of competent jurisdiction for
appointment of a successor Collateral Trustee, which must be a bank or trust
company:

 

(1)           authorized to exercise corporate trust powers; and

 

(2)           having a combined capital and surplus of at least $250,000,000.

 

The Collateral Trustee will fulfill its obligations hereunder until a successor
Collateral Trustee meeting the requirements of this Section 6.2 has accepted its
appointment as Collateral Trustee and the provisions of Section 6.3 have been
satisfied.

 

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Section 6.3          Succession.  When the Person so appointed as successor
Collateral Trustee accepts such appointment:

 

(1)           such Person will succeed to and become vested with all the rights,
powers, privileges and duties of the predecessor Collateral Trustee, and the
predecessor Collateral Trustee will be discharged from its duties and
obligations hereunder; and

 

(2)           the predecessor Collateral Trustee will (at the expense of the
Company) promptly transfer all Liens and collateral security and other property
of the Trust Estate within its possession or control to the possession or
control of the successor Collateral Trustee and will execute instruments and
assignments as may be necessary or desirable or reasonably requested by the
successor Collateral Trustee to transfer to the successor Collateral Trustee all
Liens, interests, rights, powers and remedies of the predecessor Collateral
Trustee in respect of the Parity Lien Security Documents or the Trust Estate.

 

Thereafter the predecessor Collateral Trustee will remain entitled to enforce
the immunities granted to it in Article 5 and the provisions of Sections 7.8 and
7.9, and said provisions will survive termination of this Agreement for the
benefit of the predecessor of the Collateral Trustee.

 

Section 6.4          Merger, Conversion or Consolidation of Collateral Trustee.
Any Person into which the Collateral Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Collateral Trustee shall be a party, or
any Person succeeding to the business of the Collateral Trustee shall be the
successor of the Collateral Trustee pursuant to Section 6.3, provided that (i)
without the execution or filing of any paper with any party hereto or any
further act on the part of any of the parties hereto, except where an instrument
of transfer or assignment is required by law to effect such succession, anything
herein to the contrary notwithstanding, such Person satisfies the eligibility
requirements specified in clauses (1) and (2) of Section 6.2 and (ii) prior to
any such merger, conversion or consolidation, the Collateral Trustee shall have
notified the Company and each Parity Lien Representative thereof in writing.

 

Section 6.5          Concerning the Collateral Trustee and the Parity Lien
Representatives.

 

(a)           Notwithstanding anything contained herein to the contrary, it is
expressly understood and agreed by the parties hereto that this Agreement has
been signed by each Parity Lien Representative not in its individual capacity or
personally but solely in its capacity as trustee, representative or agent for
the benefit of the related holders of the applicable Series of Parity Lien Debt
in the exercise of the powers and authority conferred and vested in it under the
related Parity Lien Documents, and in no event shall such Parity Lien
Representative, in its individual capacity, have any liability for the
representations, warranties, covenants, agreements or other obligations of any
other party under this Agreement, any Parity Lien Document or in any of the
certificates, reports, documents, data notices or agreements delivered by such
other party pursuant hereto or thereto.

 

(b)           Notwithstanding anything contained herein to the contrary, it is
expressly understood and agreed by the parties hereto that this Agreement has
been signed by U.S. Bank

 

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National Association, not in its individual capacity or personally but solely in
its capacity as Collateral Trustee, and in no event shall U.S. Bank National
Association, in its individual capacity, have any liability for the
representations, warranties, covenants, agreements or other obligations of any
other party under this Agreement, any Parity Lien Document or in any of the
certificates, reports, documents, data notices or agreements delivered by such
other party pursuant hereto or thereto.

 

(c)           Notwithstanding anything contained herein to the contrary, it is
expressly understood and agreed by the parties hereto that this Agreement has
been signed by U.S. Bank National Association not in its individual capacity or
personally but solely in its capacity as Trustee, and in no event shall U.S.
Bank National Association or any other Parity Lien Representative, in its
individual capacity, have any liability for the representations, warranties,
covenants, agreements or other obligations of any other party under this
Agreement, any Parity Lien Document or in any of the certificates, reports,
documents, data notices or agreements delivered by such other party pursuant
hereto or thereto.

 

(d)           In entering into this Agreement, the Collateral Trustee shall be
entitled to the benefit of every provision of the Indenture relating to the
rights, exculpations or conduct of, affecting the liability of or otherwise
affording protection to the “Collateral Trustee” thereunder. In no event will
the Collateral Trustee be liable for any act or omission on the part of the
Grantors or any Parity Lien Representative.

 

(e)           Except as otherwise set forth herein, neither the Collateral
Trustee nor any Parity Lien Representative shall be required to exercise any
discretion or take any action, but shall be required to act or refrain from
acting (and shall be fully protected in so acting or refraining from acting)
solely upon the instructions of the applicable Required Parity Lien Debtholders
as provided in the Indenture or the related Parity Lien Document; provided that
neither the Collateral Trustee nor any Parity Lien Representative shall be
required to take any action that (i) it in good faith believes exposes it to
personal liability unless it receives an indemnification satisfactory to it from
the applicable holders of the Parity Lien Obligations with respect to such
action or (ii) is contrary to this Agreement, the Intercreditor Agreement or
applicable law.

 

ARTICLE 7
MISCELLANEOUS PROVISIONS

 

Section 7.1          Amendment.

 

(a)           Except as provided in the Intercreditor Agreement, no amendment or
supplement to the provisions of any Parity Lien Security Document will be
effective without the approval of the Collateral Trustee acting as directed by
an Act of Parity Lien Debtholders, except that:

 

(1)           any amendment or supplement that has the effect solely of:

 

(A)          adding or maintaining Collateral, securing additional Parity Lien
Debt that was otherwise permitted by the terms of the Parity Lien

 

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Documents to be secured by the Collateral or preserving, perfecting or
establishing the Liens thereon or the rights of the Collateral Trustee therein;
or

 

(B)          providing for the assumption of the Company or any Guarantor’s
obligations under any Parity Lien Document in the case of a merger or
consolidation or sale of all or substantially all of the properties or assets of
the Company or such Guarantor to the extent permitted by the terms of the
Indenture and the other Parity Lien Documents, as applicable;

 

will become effective when executed and delivered by the Company or any other
applicable Grantor party thereto and, if required for effectiveness pursuant to
its terms, the Collateral Trustee;

 

(2)           no amendment or supplement that reduces, impairs or adversely
affects the right of any holder of Parity Lien Obligations:

 

(A)          to vote its outstanding Parity Lien Debt as to any matter described
as subject to an Act of Parity Lien Debtholders or direction by the Required
Parity Lien Debtholders (or amends the provisions of this clause (2) or the
definition of “Act of Parity Lien Debtholders” or “Required Parity Lien
Debtholders”),

 

(B)          to share in the order of application described in Section 3.4 in
the proceeds of enforcement of or realization on any Collateral; or

 

(C)          to require that Liens securing Parity Lien Obligations be released
only as set forth in the provisions described in Sections 4.1, 4.4 or 4.5,

 

will become effective without the consent of the requisite percentage or number
of holders of each Series of Parity Lien Debt adversely affected thereby under
the applicable Parity Lien Document; and

 

(3)           no amendment or supplement that imposes any obligation upon the
Collateral Trustee or any Parity Lien Representative or adversely affects the
rights of the Collateral Trustee or any Parity Lien Representative,
respectively, in its individual capacity as such will become effective without
the consent of the Collateral Trustee or such Parity Lien Representative,
respectively.

 

Any amendment or supplement to the provisions of the Parity Lien Security
Documents that releases Collateral will be effective only in accordance with the
requirements set forth in the applicable Parity Lien Document referenced in
Section 4.1 hereof. Any amendment or supplement that results in the Collateral
Trustee’s Liens upon the Collateral no longer securing the Notes and the other
Obligations under the Indenture and other Note Documents may only be effected in
accordance with Section 4.4 hereof.

 

(b)           Notwithstanding anything to the contrary contained in
Section 7.1(a) but subject to Sections 7.1(a)(2) and 7.1(a)(3):

 

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(1)           any mortgage or other Parity Lien Security Document may be amended
or supplemented with the approval of the Collateral Trustee acting as directed
in writing by the Required Parity Lien Debtholders, unless such amendment or
supplement would not be permitted under the terms of this Agreement, the
Intercreditor Agreement or any Priority Lien Documents;

 

(2)           any amendment or waiver of, or any consent under, any provision of
any security document that secures Priority Lien Obligations will apply
automatically to any comparable provision of any comparable Parity Lien Security
Document without the consent of or notice to any holder of Parity Lien
Obligations and without any action by the Company or any Guarantor, the
Collateral Trustee or any holder of Notes or other Parity Lien Obligations; and

 

(3)           any mortgage or other Parity Lien Security Document may be amended
or supplemented with the approval of the Collateral Trustee (but without the
consent of or notice to any holder of Parity Lien Obligations and without any
action by any holder of Notes or other Parity Lien Obligations) (i) to cure any
ambiguity, defect or inconsistency, or (ii) to make other changes that do not
have an adverse effect on the validity of the Lien created thereby.

 

(c)           The Collateral Trustee will not enter into any amendment or
supplement unless it has received an Officers’ Certificate to the effect that
such amendment or supplement will not result in a breach of any provision or
covenant contained in this Agreement, the Intercreditor Agreement or any of the
Parity Lien Documents. Prior to executing any amendment or supplement pursuant
to this Section 7.1, the Collateral Trustee will be entitled to receive an
opinion of counsel of the Company to the effect that the execution of such
document is authorized or permitted hereunder, and with respect to amendments
adding Collateral, an opinion of counsel of the Company addressing customary
creation and perfection, and if such additional Collateral consists of equity
interests of any Person which equity interests constitute certificated
securities, priority matters with respect to such additional Collateral (which
opinion may be subject to customary assumptions and qualifications).

 

Section 7.2          Voting.  In connection with any matter under this Agreement
requiring a vote of holders of Parity Lien Debt, each Series of Parity Lien Debt
will cast its votes in accordance with the Parity Lien Documents governing such
Series of Parity Lien Debt. The amount of Parity Lien Debt to be voted by a
Series of Parity Lien Debt will equal (1) the aggregate principal amount of
Parity Lien Debt held by such Series of Parity Lien Debt (including outstanding
letters of credit whether or not then available or drawn), plus (2) other than
in connection with an exercise of remedies, the aggregate unfunded commitments
to extend credit which, when funded, would constitute Indebtedness of such
Series of Parity Lien Debt (to the extent such unfunded commitments have not
been terminated by the holders of such Series of Parity Lien Debt). Following
and in accordance with the outcome of the applicable vote under its Parity Lien
Documents, the Parity Lien Representative of each Series of Parity Lien Debt
will vote the total amount of Parity Lien Debt under that Series of Parity Lien
Debt as a block in respect of any vote under this Agreement.  In connection with
this Section 7.2, the Collateral Trustee may conclusively rely upon information
supplied by the relevant Parity Lien Representative as to the amounts of Parity
Lien Debt held by each Series of Parity Lien Debt.

 

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Section 7.3          Further Assurances.

 

(a)           The Company and each of the Guarantors will do or cause to be done
all acts and things that may be required, or that the Collateral Trustee from
time to time may reasonably request, to assure and confirm that the Collateral
Trustee holds, for the benefit of the holders of Parity Lien Obligations, duly
created and enforceable and perfected Liens upon the Collateral (including any
property or assets that are acquired or otherwise become, or are required by any
Parity Lien Document to become, Collateral after the date hereof), in each case,
as contemplated by, and with the Lien priority required under, the Parity Lien
Documents and in connection with any merger, consolidation or sale of assets of
the Company or any Guarantor, the property and assets of the Person which is
consolidated or merged with or into the Company or any Guarantor, to the extent
that they are property or assets of the types which would constitute Collateral
under the security documents, shall be treated as after-acquired property and
the Company or such Guarantor shall take such action as may be reasonably
necessary to cause such property and assets to be made subject to the Parity
Liens, in the manner and to the extent required under the Parity Lien Documents.

 

(b)           Upon the reasonable request of the Collateral Trustee or any
Parity Lien Representative at any time and from time to time, the Company and
each of the Guarantors will promptly execute, acknowledge and deliver such
security documents, instruments, certificates, notices and other documents, and
take such other actions as may be reasonably required, or that the Collateral
Trustee may reasonably request, to create, perfect, protect, assure or enforce
the Liens and benefits intended to be conferred, in each case as contemplated by
the Parity Lien Documents for the benefit of holders of Parity Lien Obligations;
provided that no such security document, instrument or other document shall be
materially more burdensome upon the Company and the Guarantors than the Parity
Lien Document executed and delivered (or required to be executed and delivered
promptly after the date hereof) by the Company and the Guarantors in connection
with the issuance of the Notes on or about the date hereof.

 

(c)           From and after the date hereof, the Company shall, or shall cause
the applicable Guarantor to, deliver such documents and takes such actions as
are required by Article 13 of the Indenture.

 

(d)           Upon the request of the Collateral Trustee, the Company and the
Guarantors will permit the Collateral Trustee or any of its agents or
representatives, at reasonable times and intervals upon reasonable prior notice,
to visit their offices and sites and inspect any of the Collateral and to
discuss matters relating to the Collateral with their respective officers and
independent public accountants. The Company and the Guarantors shall, at any
reasonable time and from time to time upon reasonable prior notice, permit the
Collateral Trustee or any of its agents or representatives to examine and make
copies of and abstracts from the records and books of account of the Company and
the Guarantors and their Subsidiaries, all at the Company’s expense.

 

Section 7.4          Successors and Assigns.

 

(a)           Except as provided in Section 5.2 and 6.1 through 6.4, the
Collateral Trustee may not, in its capacity as such, delegate any of its duties
or assign any of its rights

 

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hereunder, and any attempted delegation or assignment of any such duties or
rights will be null and void. All obligations of the Collateral Trustee
hereunder will inure to the sole and exclusive benefit of, and be enforceable
by, each Parity Lien Representative and each present and future holder of Parity
Lien Obligations, each of whom will be entitled to enforce this Agreement as a
third-party beneficiary hereof, and all of their respective successors and
assigns.

 

(b)           Neither the Company nor any Guarantor may delegate any of its
duties or assign any of its rights hereunder, and any attempted delegation or
assignment of any such duties or rights will be null and void. All obligations
of the Company and the Guarantors hereunder will inure to the sole and exclusive
benefit of, and be enforceable by, the Collateral Trustee, each Parity Lien
Representative and each present and future holder of Parity Lien Obligations,
each of whom will be entitled to enforce this Agreement as a third-party
beneficiary hereof, and all of their respective successors and assigns.

 

Section 7.5          Delay and Waiver.  No failure to exercise, no course of
dealing with respect to the exercise of, and no delay in exercising, any right,
power or remedy arising under this Agreement or any of the other Parity Lien
Security Documents will impair any such right, power or remedy or operate as a
waiver thereof. No single or partial exercise of any such right, power or remedy
will preclude any other or future exercise thereof or the exercise of any other
right, power or remedy. The remedies herein are cumulative and are not exclusive
of any remedies provided by law.

 

Section 7.6          Notices.  Any communications, including notices and
instructions, between the parties hereto or notices provided herein to be given
may be given to the following addresses:

 

If to the Collateral Trustee:

U.S. Bank National Association

 

Corporate Trust Services

 

EX-TX-WSFH

 

5555 San Felipe Street, 11th Floor

 

Houston, Texas 77056

 

Telephone: (713) 235-9206

 

Facsimile: (713) 235-9213

 

Attention: Mauri J. Cowen

 

 

 

with a copy to:

 

 

 

Thompson & Knight LLP

 

333 Clay St., Suite 3300

 

Houston, Texas 77002

 

Telephone: (713) 951-5803

 

Facsimile: (832) 397-8012

 

Attention: Cassandra G. Mott

 

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If to the Company or any other Grantor:

SandRidge Energy, Inc.

 

123 Robert S. Kerr Avenue

 

Oklahoma City, Oklahoma 73102

 

Facsimile: 405-429-5983

 

Attention: General Counsel

 

 

If to the Trustee:

U.S. Bank National Association

 

Corporate Trust Services

 

EX-TX-WSFH

 

5555 San Felipe Street, 11th Floor

 

Houston, Texas 77056

 

Telephone: (713) 235-9206

 

Facsimile: (713) 235-9213

 

Attention: Mauri J. Cowen

 

 

 

with a copy to:

 

 

 

Thompson & Knight LLP

 

333 Clay St., Suite 3300

 

Houston, Texas 77002

 

Telephone: (713) 951-5803

 

Facsimile: (832) 397-8012

 

Attention: Cassandra G. Mott

 

and if to any other Parity Lien Representative, to such address as it may
specify by written notice to the parties named above.

 

All notices and communications will be mailed by first class mail, certified or
registered, return receipt requested, by overnight air courier guaranteeing next
day delivery, or delivered by facsimile to the relevant address or number set
forth above or, as to holders of Parity Lien Debt, its address shown on the
register kept by the office or agency where the relevant Parity Lien Debt may be
presented for registration of transfer or for exchange. Failure to mail or
delivery by facsimile a notice or communication to a holder of Parity Lien Debt
or any defect in it will not affect its sufficiency with respect to other
holders of Parity Lien Debt.

 

If a notice or communication is mailed or delivered by facsimile in the manner
provided above within the time prescribed, it is duly given, whether or not the
addressee receives it.

 

Section 7.7          Entire Agreement.  This Agreement states the complete
agreement of the parties relating to the undertaking of the Collateral Trustee
set forth herein and supersedes all oral negotiations and prior writings in
respect of such undertaking.

 

Section 7.8          Compensation; Expenses.  The Grantors jointly and severally
agree to pay, promptly upon demand:

 

(1)           such compensation to the Collateral Trustee and its agents as the
Company and the Collateral Trustee may agree in writing from time to time;

 

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(2)                                 all reasonable costs and expenses incurred
by the Collateral Trustee and its agents in the preparation, execution,
delivery, filing, recordation, administration or enforcement of this Agreement
or any other Parity Lien Security Document or any consent, amendment, waiver or
other modification relating hereto or thereto;

 

(3)                                 all reasonable fees, expenses and
disbursements of legal counsel and any auditors, accountants, consultants or
appraisers or other professional advisors and agents engaged by the Collateral
Trustee or any Parity Lien Representative incurred in connection with the
negotiation, preparation, closing, administration, performance or enforcement of
this Agreement and the other Parity Lien Security Documents or any consent,
amendment, waiver or other modification relating hereto or thereto and any other
document or matter requested by the Company or any Guarantor;

 

(4)                                 all reasonable costs and expenses incurred
by the Collateral Trustee and its agents in creating, perfecting, preserving,
releasing or enforcing the Collateral Trustee’s Liens on the Collateral,
including filing and recording fees, expenses and taxes, stamp or documentary
taxes, search fees, and title insurance premiums;

 

(5)                                 all other reasonable costs and expenses
incurred by the Collateral Trustee and its agents in connection with the
negotiation, preparation and execution of the Parity Lien Security Documents and
any consents, amendments, waivers or other modifications thereto and the
transactions contemplated thereby or the exercise of rights or performance of
obligations by the Collateral Trustee thereunder; and

 

(6)                                 after the occurrence of any Parity Lien Debt
Default, all costs and expenses incurred by the Collateral Trustee, its agents
and any Parity Lien Representative in connection with the preservation,
collection, foreclosure or enforcement of the Collateral subject to the Parity
Lien Security Documents or any interest, right, power or remedy of the
Collateral Trustee or in connection with the collection or enforcement of any of
the Parity Lien Obligations or the proof, protection, administration or
resolution of any claim based upon the Parity Lien Obligations in any Insolvency
or Liquidation Proceeding, including all fees and disbursements of attorneys,
accountants, auditors, consultants, appraisers and other professionals engaged
by the Collateral Trustee, its agents or the Parity Lien Representatives.

 

The agreements in this Section 7.8 will survive repayment of all other Parity
Lien Obligations and the removal or resignation of the Collateral Trustee and
termination of this Agreement.

 

Section 7.9                              Indemnity.

 

(a)                                 The Grantors jointly and severally agree to
defend, indemnify, pay and hold harmless the Collateral Trustee, each Parity
Lien Representative, each holder of Parity Lien Obligations and each of their
respective Affiliates and each and all of their directors, officers, partners,
trustees, employees, attorneys and agents, and (in each case) their respective
heirs, representatives, successors and assigns (each of the foregoing, an
“Indemnitee”) from and against any and all Indemnified Liabilities; provided
that no Indemnitee will be entitled to

 

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indemnification hereunder with respect to any Indemnified Liability to the
extent such Indemnified Liability is found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of such Indemnitee. THIS INDEMNITY COVERS ORDINARY
NEGLIGENCE OF ANY OF THE FOREGOING PARTIES.

 

(b)                                 All amounts due under this Section 7.9 will
be payable within 10 days upon written demand.

 

(c)                                  To the extent that the undertakings to
defend, indemnify, pay and hold harmless set forth in Section 7.9(a) may be
unenforceable in whole or in part because they violate any law or public policy,
each of the Grantors will contribute the maximum portion that it is permitted to
pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by Indemnitees or any of them.

 

(d)                                 No Grantor will ever assert any claim
against any Indemnitee, on any theory of liability, for any lost profits or
special, indirect or consequential damages or (to the fullest extent a claim for
punitive damages may lawfully be waived) any punitive damages arising out of, in
connection with, or as a result of, this Agreement or any other Parity Lien
Document or any agreement or instrument or transaction contemplated hereby or
relating in any respect to any Indemnified Liability, and each of the Grantors
hereby forever waives, releases and agrees not to sue upon any claim for any
such lost profits or special, indirect, consequential or (to the fullest extent
lawful) punitive damages, whether or not accrued and whether or not known or
suspected to exist in its favor.

 

(e)                                  The agreements in this Section 7.9 will
survive repayment of all other Parity Lien Obligations and the removal or
resignation of the Collateral Trustee and termination of this Agreement.

 

Section 7.10                       Severability.  If any provision of this
Agreement is invalid, illegal or unenforceable in any respect or in any
jurisdiction, the validity, legality and enforceability of such provision in all
other respects and of all remaining provisions, and of such provision in all
other jurisdictions, will not in any way be affected or impaired thereby.

 

Section 7.11                       Headings.  Section headings herein have been
inserted for convenience of reference only, are not to be considered a part of
this Agreement and will in no way modify or restrict any of the terms or
provisions hereof.

 

Section 7.12                       Obligations Secured.  All obligations of the
Grantors set forth in or arising under this Agreement will be Parity Lien
Obligations and are secured by all Liens granted by the Parity Lien Security
Documents.

 

Section 7.13                       Governing Law.  THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY
CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATION LAW).

 

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Section 7.14                       Consent to Jurisdiction.  All judicial
proceedings brought against any party hereto arising out of or relating to this
Agreement or any of the other Parity Lien Security Documents may be brought in
any state or federal court of competent jurisdiction in the State, County and
City of New York. By executing and delivering this Agreement, each party hereto
irrevocably:

 

(1)                                 submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or, to the
extent permitted by law, in such federal court.  Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.  Nothing in this Agreement shall affect any
right that any party hereto may otherwise have to bring any action or proceeding
relating to this Agreement in the courts of any jurisdiction;

 

(2)                                 waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement in any court referred to in paragraph (1) of this Section 7.14,
and waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court;

 

(3)                                 agrees that service of all process in any
such proceeding in any such court may be made by registered or certified mail,
return receipt requested, to such party at its address provided in accordance
with Section 7.6;

 

(4)                                 agrees that service as provided in clause
(3) above is sufficient to confer personal jurisdiction over such party in any
such proceeding in any such court and otherwise constitutes effective and
binding service in every respect; and

 

(5)                                 agrees each party hereto retains the right
to serve process in any other manner permitted by law or to bring proceedings
against any party in the courts of any other jurisdiction.

 

Section 7.15                       Waiver of Jury Trial.  EACH PARTY TO THIS
AGREEMENT WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ITS RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING UNDER THIS
AGREEMENT OR ANY OF THE OTHER PARITY LIEN SECURITY DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT OR THE INTENTS AND
PURPOSES OF THE OTHER PARITY LIEN SECURITY DOCUMENTS. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN

 

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ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE OTHER
PARITY LIEN SECURITY DOCUMENTS, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY TO THIS
AGREEMENT ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH PARTY HERETO HAS ALREADY RELIED ON THIS WAIVER
IN ENTERING INTO THIS AGREEMENT, AND THAT EACH PARTY HERETO WILL CONTINUE TO
RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 7.15 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER WILL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS OF OR TO THIS AGREEMENT OR ANY OF THE
OTHER PARITY LIEN SECURITY DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING THERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

Section 7.16                       Counterparts, Electronic Signatures.  This
Agreement may be executed in any number of counterparts (including by
facsimile), each of which when so executed and delivered will be deemed an
original, but all such counterparts together will constitute but one and the
same instrument. The parties hereto may sign this Agreement and any Collateral
Trust Joinder and transmit the executed copy by electronic means, including
facsimile or noneditable *.pdf files. The electronic copy of the executed
Agreement and any Collateral Trust Joinder is and shall be deemed an original
signature.

 

Section 7.17                       Effectiveness.  This Agreement will become
effective upon the execution of a counterpart hereof by each of the parties
hereto and receipt by each party of written notification of such execution and
written or telephonic authorization of delivery thereof.

 

Section 7.18                       Grantors and Additional Grantors.  Each
Grantor represents and warrants that it has duly executed and delivered this
Agreement. The Company will cause each Person that hereafter becomes a Grantor
or is required by any Parity Lien Document to become a party to this Agreement
to become a party to this Agreement, for all purposes of this Agreement, by
causing such Person to execute and deliver to the Collateral Trustee a
Collateral Trust Joinder, whereupon such Person will be bound by the terms
hereof to the same extent as if it had executed and delivered this Agreement as
of the date hereof. The Company shall promptly provide each Parity Lien
Representative with a copy of each Collateral Trust Joinder executed and
delivered pursuant to this Section 7.18; provided that the failure to so deliver
a copy of the Collateral Trust Joinder to any then existing Parity Lien
Representative shall not affect the inclusion of such Person as a Grantor if the
other requirements of this Section 7.18 are complied with.

 

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Section 7.19                       Insolvency.  This Agreement will be
applicable both before and after the commencement of any Insolvency or
Liquidation Proceeding by or against any Grantor. The relative rights, as
provided for in this Agreement, will continue after the commencement of any such
Insolvency or Liquidation Proceeding on the same basis as prior to the date of
the commencement of any such case, as provided in this Agreement.

 

Section 7.20                       Rights and Immunities of Parity Lien
Representatives.  The Trustee and the Collateral Trustee will be entitled, to
the extent applicable to such entity, to all of the rights, protections,
immunities and indemnities set forth in the Indenture and any future Parity Lien
Representative will be entitled to all of the rights, protections, immunities
and indemnities set forth in the credit agreement, indenture or other agreement
governing the applicable Parity Lien Debt with respect to which such Person will
act as representative, in each case as if specifically set forth herein. In no
event will any Parity Lien Representative be liable for any act or omission on
the part of the Grantors or the Collateral Trustee hereunder.

 

Section 7.21                       Intercreditor Agreement. Each Person that is
secured hereunder, by accepting the benefits of the security provided hereby,
(i) consents (or is deemed to consent), to the subordination of Liens in favor
of the Collateral Trustee as provided for in the Intercreditor Agreement, (ii)
agrees (or is deemed to agree) that it will be bound by, and will take no
actions contrary to, the provisions of the Intercreditor Agreement, (iii)
authorizes (or is deemed to authorize) and instructs (or is deemed to instruct)
the Collateral Trustee on behalf of such Person to enter into, and perform
under, the Intercreditor Agreement as “Second Lien Collateral Trustee” (as
defined in the Intercreditor Agreement). The Collateral Trustee agrees to enter
into any amendments or joinders to the Intercreditor Agreement, without the
consent of any Holder or the Trustee, to add additional Indebtedness as Priority
Lien Debt, Parity Lien Debt or Junior Lien Debt (to the extent permitted to be
incurred and secured by the applicable Secured Debt Documents) and add other
parties (or any authorized agent or trustee therefor) holding such Indebtedness
thereto and to establish that the Lien on any Collateral securing such
Indebtedness ranks equally with the Liens on such Collateral securing the other
Priority Lien Debt, Parity Lien Debt or Junior Lien Debt, as applicable, then
outstanding. The foregoing provisions are intended as an inducement to the
lenders under the Credit Agreement to extend credit to the Company, as the
borrower under the Credit Agreement, and such lenders are intended third party
beneficiaries of this provision and the provisions of the Intercreditor
Agreement. Notwithstanding anything to the contrary contained herein, to the
extent that any Lien on any Collateral is perfected by the possession or control
of such Collateral or of any account in which such Collateral is held, and if
such Collateral or any such account is in fact in the possession or under the
control of the Priority Lien Representative, or of agents or bailees of the
Priority Lien Representative, the perfection actions and related deliverables
described in this Agreement or the other Parity Lien Security Documents shall
not be required.

 

Section 7.22                       Force Majeure.  The Collateral Trustee shall
not be liable for delays or failures in performance resulting from acts of God,
strikes, lockouts, riots, acts of war, epidemics, governmental regulations
superimposed after the fact, fire, communication line failures, computer
viruses, power failures, earthquakes or other disasters or similar acts beyond
its control.

 

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Section 7.23                       Representations and Warranties.  The
Collateral Trustee, the Company, each Guarantor and each Parity Lien
Representative represents and warrants to the others as of the date hereof (or,
in the case of any Parity Lien Representative that becomes a party hereto after
the date hereof, on the date that it becomes party hereto), that: (a) neither
the execution and delivery of this Agreement nor its performance of or
compliance with the terms and provisions hereof will conflict with, or result in
a breach of the terms, conditions, or provisions of, or constitute a default
under, any other agreement to which it is now subject; (b) it has all requisite
authority to execute, delivery and perform its obligations under this Agreement;
and (c) this Agreement constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject only to applicable
bankruptcy, insolvency or similar laws and general principles of equity.

 

Section 7.1                              Incorporation by Reference.  Article 13
of the Indenture is hereby incorporated by reference into this Agreement as if
the provisions thereof were fully set forth herein.

 

Section 7.2                              Additional Persons Bound Hereby.  Each
Parity Lien Secured Party (other than the Parity Lien Representative) and each
holder of any Parity Lien Debt (other than the Parity Lien Representative)
agrees, by virtue of becoming a Parity Lien Secured Party or a holder of any
Parity Lien Debt, as applicable, that it shall be bound by the terms of this
Agreement as if it were a party hereto.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Collateral Trust
Agreement to be executed by their respective officers or representatives as of
the day and year first above written.

 

COMPANY:

 

SANDRIDGE ENERGY, INC.

 

 

 

 

 

 

 

 

By:

/s/ Eddie M. LeBlanc

 

 

Name:

Eddie M. LeBlanc

 

 

Title:

Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

GUARANTORS:

 

SANDRIDGE OPERATING COMPANY

 

 

INTEGRA ENERGY, L.L.C.

 

 

SANDRIDGE EXPLORATION AND PRODUCTION, LLC

 

 

SANDRIDGE MIDSTREAM, INC.

 

 

SANDRIDGE HOLDINGS, INC.

 

 

SANDRIDGE GATHERING LLC

 

 

 

 

 

 

 

 

By:

/s/ Eddie M. LeBlanc

 

 

Name:

Eddie M. LeBlanc

 

 

Title:

Executive Vice President and Chief Financial Officer

 

[Signature Page to Collateral Trust Agreement]

 

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U.S. BANK NATIONAL ASSOCIATION, as Trustee under the Indenture

 

 

 

 

 

 

 

 

By:

/s/ Mauri J. Cowen

 

 

Name:

Mauri J. Cowen

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as Collateral Trustee

 

 

 

 

 

 

 

 

By:

/s/ Mauri J. Cowen

 

 

Name:

Mauri J. Cowen

 

 

Title:

Vice President

 

[Signature Page to Collateral Trust Agreement]

 

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EXHIBIT A

 

FORM OF
ADDITIONAL PARITY LIEN DEBT CERTIFICATE

 

Reference is made to the Collateral Trust Agreement, dated as of June 10, 2015
(as amended, supplemented, amended and restated or otherwise modified and in
effect from time to time, the “Collateral Trust Agreement”), among SandRidge
Energy, Inc., a Delaware corporation (the “Company”), the Guarantors from time
to time party thereto, U.S. Bank National Association, as Trustee under the
Indenture (as defined therein), the other Parity Lien Representatives from time
to time party thereto and U.S. Bank National Association, as Collateral Trustee.
Capitalized terms used but not otherwise defined herein have the meanings
assigned to them in the Collateral Trust Agreement. This Additional Parity Lien
Debt Certificate is being executed and delivered in order to designate
additional secured debt as Parity Lien Debt entitled to the benefit of the
Collateral Trust Agreement.

 

The undersigned, the duly appointed [specify title] of the Company hereby
certifies on behalf of [the Company or applicable Grantor] that:

 

(A)                               [the Company or applicable Grantor] intends to
incur additional Parity Lien Debt (“Additional Parity Lien Debt”) which will be
permitted by each applicable Parity Lien Document to be secured by a Parity Lien
equally and ratably with all previously existing and future Parity Lien Debt;

 

(B)                               the name and address of the Parity Lien Debt
Representative for the Additional Parity Lien Debt for purposes of Section 7.6
of the Collateral Trust Agreement is:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Telephone:

 

 

 

 

 

 

Fax:

 

 

 

(C)                               Attached as Exhibit 1 hereto is a
Reaffirmation Agreement duly executed by the Company and each Guarantor, and

 

(D)                               the Company has caused a copy of this
Additional Parity Lien Debt Certificate and the related Collateral Trust Joinder
to be delivered to each existing Parity Lien Representative.

 

A-1

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IN WITNESS WHEREOF, the Company has caused this Additional Parity Lien Debt
Certificate to be duly executed by the undersigned officer as of
                     , 20     .

 

 

SANDRIDGE ENERGY, INC.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

ACKNOWLEDGEMENT OF RECEIPT

 

The undersigned, the duly appointed Collateral Trustee under the Collateral
Trust Agreement, hereby acknowledges receipt of an executed copy of this
Additional Parity Lien Debt Certificate.

 

 

U.S. BANK NATIONAL ASSOCIATION, as Collateral Trustee

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

A-2

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EXHIBIT 1 TO ADDITIONAL PARITY LIEN DEBT CERTIFICATE

 

FORM OF
REAFFIRMATION AGREEMENT

 

                                   , 20    

 

Reference is made to the Collateral Trust Agreement, dated as of June 10, 2015
(as amended, supplemented, amended and restated or otherwise modified and in
effect from time to time, the “Collateral Trust Agreement”), among SandRidge
Energy, Inc., a Delaware corporation (the “Company”), the Guarantors from time
to time party thereto, U.S. Bank National Association, as Trustee under the
Indenture (as defined therein), the other Parity Lien Representatives from time
to time party thereto and U.S. Bank National Association, as Collateral Trustee.
Capitalized terms used but not otherwise defined herein have the meanings
assigned to them in the Collateral Trust Agreement. This Reaffirmation Agreement
is being executed and delivered as of                      , 20     in
connection with an Additional Parity Lien Debt Certificate of even date herewith
which Additional Parity Lien Debt Certificate has designated additional Parity
Lien Debt entitled to the benefit of the Collateral Trust Agreement.

 

Each of the undersigned hereby consents to the designation of additional secured
debt as Parity Lien Debt as set forth in the Additional Parity Lien Debt
Certificate of even date herewith and hereby confirms its respective guarantees,
pledges, grants of security interests and other obligations, as applicable,
under and subject to the terms of each of the Parity Lien Documents to which it
is party, and agrees that, notwithstanding the designation of such additional
indebtedness or any of the transactions contemplated thereby, such guarantees,
pledges, grants of security interests and other obligations, and the terms of
each Parity Lien Document to which it is a party, shall continue to be in full
force and effect.

 

Governing Law and Miscellaneous Provisions. The provisions of Article 7 of the
Collateral Trust Agreement will apply with like effect to this Reaffirmation
Agreement.

 

IN WITNESS WHEREOF, each of the undersigned has caused this Reaffirmation
Agreement to be duly executed as of the date written above.

 

 

[names of the Company and Guarantors]

 

 

 

 

 

 

 

Name:

 

 

Title:

 

 

A-3

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EXHIBIT B

 

FORM OF
COLLATERAL TRUST JOINDER – ADDITIONAL DEBT

 

Reference is made to the Collateral Trust Agreement, dated as of June 10, 2015
(as amended, supplemented, amended and restated or otherwise modified and in
effect from time to time, the “Collateral Trust Agreement”), among SandRidge
Energy, Inc., a Delaware corporation (the “Company”), the Guarantors from time
to time party thereto, U.S. Bank National Association, as Trustee under the
Indenture (as defined therein), the other Parity Lien Representatives from time
to time party thereto and U.S. Bank National Association, as Collateral Trustee.
Capitalized terms used but not otherwise defined herein have the meanings
assigned to them in the Collateral Trust Agreement. This Collateral Trust
Joinder is being executed and delivered pursuant to Section 3.8 of the
Collateral Trust Agreement as a condition precedent to the debt for which the
undersigned is acting as agent being entitled to the benefits of being
additional Parity Lien Debt under the Collateral Trust Agreement.

 

[1.                                  Joinder. The undersigned,
                                   , a                                 , (the
“New Representative”) as [trustee, administrative agent] under that certain
[described applicable indenture, credit agreement or other document governing
the additional secured debt] hereby agrees to become party as a Parity Lien
Representative under the Collateral Trust Agreement for all purposes thereof on
the terms set forth therein, and to be bound by the terms of the Collateral
Trust Agreement as fully as if the undersigned had executed and delivered the
Collateral Trust Agreement as of the date thereof.](1)

 

[1][2.]               Additional Secured Debt Designation

 

The undersigned, on behalf of itself and each holder of Obligations in respect
of the [Additional Notes][Series of Parity Lien Debt] for which the undersigned
is acting as Parity Lien Representative hereby agrees, for the enforceable
benefit of each existing and future holder of Priority Lien Obligations, the
Priority Lien Collateral Agent, all holders of each current and future Series of
Parity Lien Debt, each other current and future Parity Lien Representative and
each current and future holder of Parity Lien Obligations and as a condition to
being treated as Parity Lien Debt under the Collateral Trust Agreement that:

 

(a)                                 all Parity Lien Obligations will be and are
secured equally and ratably by all Parity Liens at any time granted by the
Company or any other Grantor to secure any Obligations in respect of any
[Additional Notes][Series of Parity Lien Debt], whether or not upon property
otherwise constituting collateral for such Series of Parity Lien Debt, and that
all such Parity Liens will be enforceable by the Collateral Trustee for the
benefit of all holders of Parity Lien Obligations equally and ratably;

 

(b)                                 the undersigned and each holder of
Obligations in respect of the [Additional Notes][Series of Parity Lien Debt] for
which the undersigned is acting as Parity Lien Representative are bound by the
provisions of the Collateral Trust Agreement and the

 

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(1) Delete if Additional Parity Lien Debt constitutes Additional Notes.

 

B-1

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Intercreditor Agreement, including the provisions relating to the ranking of
Parity Liens and the order of application of proceeds from the enforcement of
Parity Liens; and

 

(c)                                  the Collateral Trustee shall perform its
obligations under the Collateral Trust Agreement, the other Parity Lien Security
Documents and the Intercreditor Agreement.

 

3.                                      Governing Law and Miscellaneous
Provisions.  The provisions of Article 7 of the Collateral Trust Agreement will
apply with like effect to this Collateral Trust Joinder.

 

IN WITNESS WHEREOF, the parties hereto have caused this Collateral Trust Joinder
to be executed by their respective officers or representatives as of
                                  , 20      .

 

 

[insert name of the new representative or the Trustee]

 

 

 

 

 

 

 

Name:

 

 

Title:

 

 

The Collateral Trustee hereby acknowledges receipt of this Collateral Trust
Joinder and agrees to act as Collateral Trustee for the [New
Representative][Trustee] and the holders of the Obligations represented thereby:

 

 

U.S. BANK NATIONAL ASSOCIATION, as Collateral Trustee

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

B-2

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EXHIBIT C

 

FORM OF
COLLATERAL TRUST JOINDER – ADDITIONAL GRANTOR

 

Reference is made to the Collateral Trust Agreement, dated as of June 10, 2015
(as amended, supplemented, amended and restated or otherwise modified and in
effect from time to time, the “Collateral Trust Agreement”), among SandRidge
Energy, Inc., a Delaware corporation (the “Company”), the Guarantors from time
to time party thereto, U.S. Bank National Association, as Trustee under the
Indenture (as defined therein), the other Parity Lien Representatives from time
to time party thereto and U.S. Bank National Association, as Collateral Trustee.
Capitalized terms used but not otherwise defined herein have the meanings
assigned to them in the Collateral Trust Agreement. This Collateral Trust
Joinder is being executed and delivered pursuant to Section 7.18 of the
Collateral Trust Agreement.

 

1.                                      Joinder.  The undersigned,
                                    , a                                    ,
hereby agrees to become party as a Grantor under the Collateral Trust Agreement
for all purposes thereof on the terms set forth therein, and to be bound by the
terms of the Collateral Trust Agreement as fully as if the undersigned had
executed and delivered the Collateral Trust Agreement as of the date thereof.

 

2.                                      Governing Law and Miscellaneous
Provisions.  The provisions of Article 7 of the Collateral Trust Agreement will
apply with like effect to this Collateral Trust Joinder.

 

IN WITNESS WHEREOF, the parties hereto have caused this Collateral Trust Joinder
to be executed by their respective officers or representatives as of
                                  , 20      .

 

 

[                                                                             ]

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

The Collateral Trustee hereby acknowledges receipt of this Collateral Trust
Joinder and agrees to act as Collateral Trustee with respect to the Collateral
pledged by the new Grantor:

 

 

U.S. BANK NATIONAL ASSOCIATION, as Collateral Trustee

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

C-1

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