Exhibit 10.9

 

WHEN RECORDED

PLEASE RETURN TO:

SandRidge Energy, Inc.

Attn:  Phillip T. Warman

123 Robert S. Kerr Avenue

Oklahoma City, OK 73102-6406

 

DEED OF TRUST

 

FROM

 

SANDRIDGE EXPLORATION AND PRODUCTION, LLC,

as MORTGAGOR

 

TO

 

MICHAEL J. ULRICH,

as TRUSTEE

 

FOR THE BENEFIT OF

 

SANDRIDGE PERMIAN TRUST,

as MORTGAGEE

 

Dated as of August 16, 2011

 

--------------------------------------------------------------------------------

 

DEED OF TRUST

 

THIS DEED OF TRUST (this “Deed of Trust”) is entered into as of August 16, 2011,
by SandRidge Exploration and Production, LLC, a Delaware limited liability
company, as mortgagor (“Mortgagor”), whose address is 123 Robert S. Kerr Avenue,
Oklahoma City, Oklahoma 73102-6406, to Michael J. Ulrich (“Trustee”), whose
address is c/o The Bank of New York Mellon Trust Company, N.A.,  919 Congress
Avenue, Suite 500, Austin Texas 78701, for the benefit of SandRidge Permian
Trust, a statutory trust formed under the laws of the State of Delaware, as
mortgagee (“Mortgagee”), whose address is c/o The Bank of New York Mellon Trust
Company, N.A.,  919 Congress Avenue, Suite 500, Austin Texas 78701.

 

R E C I T A L S:

 

A.            By means of (1) a Term Overriding Royalty Interest Conveyance
(Development),  effective as of April 1, 2011, from Mortgagor to Mistmada Oil
Company, Inc., an Oklahoma corporation (“SandRidge Sub”), a true and correct
copy of which is annexed hereto as Annex A-1 and made a part hereof (the “Term
Conveyance (Development)”), (2) an Assignment of Overriding Royalty Interest,
effective as of April 1, 2011, from SandRidge Sub to Mortgagee, a true and
correct copy of which is annexed hereto as Annex A-2 and made a part hereof (the
“Assignment”), and (3) a Perpetual Overriding Royalty Interest Conveyance
(Development), effective as of April 1, 2011, from Mortgagor to Mortgagee, a
true and correct copy of which is annexed hereto as Annex A-3 and made a part
hereof (the “Perpetual Conveyance (Development)” and, together with the Term
Conveyance (Development), collectively the “Conveyances”), the “Royalty
Interest” (as defined in the Conveyances) has been conveyed and assigned to
Mortgagee, as applicable, from Mortgagor and SandRidge Sub.  Capitalized terms
used herein and not otherwise defined shall have the meanings given such terms
in the Conveyances.

 

B.            SandRidge Energy, Inc. (“SandRidge Parent”), the sole member of
Mortgagor, has undertaken certain obligations with respect to the properties
described in the Conveyances under that certain Development Agreement, dated as
of August 16, 2011, between SandRidge Parent, Mortgagor and Mortgagee (the
“Development Agreement”), and Mortgagor is executing this Deed of Trust to
secure the obligations of Mortgagor and SandRidge Parent under the Development
Agreement.

 

C.            Mortgagee has conditioned its execution and delivery of the
Perpetual Conveyance (Development), the Assignment and the Development Agreement
upon the execution and delivery by Mortgagor of this Deed of Trust, and
Mortgagor has agreed to enter into this Deed of Trust.

 

NOW, THEREFORE, in order to comply with the terms and conditions of the
Development Agreement and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Mortgagor hereby agrees with
Mortgagee as follows:

 

--------------------------------------------------------------------------------

 

ARTICLE I.
Granting Clauses; Secured Obligations

 

Section 1.1             Conveyance.  Mortgagor, in order to secure the payment
and performance of the secured obligations hereinafter referred to and the
performance of the obligations, covenants, agreements, warranties and
undertakings of Mortgagor hereinafter described, in consideration of the uses
and trusts (the “Trust”) established and continued by this Deed of Trust and in
consideration of $10 and other valuable consideration paid before delivery of
this Deed of Trust by each of Trustee and Mortgagee to Mortgagor, who hereby
acknowledges its receipt and that it is reasonably equivalent value for this
Deed of Trust and all other security and rights given by Mortgagor, Mortgagor
does hereby GRANT, SELL, CONVEY, TRANSFER, ASSIGN, SET OVER, CONFIRM and DELIVER
unto Trustee and to Trustee’s successors or substitutes in the Trust, the
following described rights, titles, interests, properties and estates of
Mortgagor (sometimes hereinafter collectively referred to as the “Mortgaged
Properties”): all of Mortgagor’s right, title, interest and estate in, to and
under the oil, gas or other mineral leases described in Exhibit A attached
hereto and made a part hereof (the “Leases”); insofar as and only insofar as
such Leases cover and pertain to the Target Formation, including to such rights
in and under the Leases as may be necessary to drill to, complete in and produce
and market crude oil, natural gas and natural gas liquids (collectively,
“Hydrocarbons”) from the Target Formation; but specifically excluding, however,
all of Mortgagor’s rights, title, and interests in and to (i) any oil, gas,
water supply, saltwater disposal or other well of any nature whatsoever now or
hereafter located on the Subject Lands at the time of or prior to a foreclosure
sale of the Mortgaged Properties, including, without limitation any Development
Wells (each a “Well” and collectively, the “Wells”); and (ii) all personal
property, fixtures and equipment in or on or acquired or used in connection with
the ownership or operation of the Wells or the production, storage, treating,
conditioning, processing, compressing, dehydrating, gathering, transporting or
marketing of Hydrocarbons produced from the Wells, or the disposal of saltwater
or other substances, produced therefrom.

 

TO HAVE AND TO HOLD the Mortgaged Properties unto Trustee, Trustee’s successors
or substitutes in the Trust and Trustee’s or their assigns, forever.

 

Section 1.2             Assignment of the Mortgaged Properties.

 

(a)           This Deed of Trust is also an absolute and unconditional
assignment to Trustee of the Mortgaged Properties, whether now in existence or
hereafter arising, subject to the Permitted Encumbrances (as defined in the
Conveyances attached hereto as Annex A-1 and Annex A-3).

 

(b)           So long as no default (as hereinafter defined) has occurred and is
then continuing, Mortgagor shall have a license, revocable at the will of
Mortgagee following the occurrence and continuation of a default, to enforce the
terms of the Leases and exercise Mortgagor’s rights thereunder.

 

(c)           Notwithstanding any legal presumption to the contrary, Mortgagee
shall not be obligated by reason of its acceptance of this assignment to perform
any obligation of Mortgagor as lessee under any of the Leases.  The acceptance
of this assignment shall not constitute a

 

2

--------------------------------------------------------------------------------

 

waiver of any rights of Mortgagee under the Development Agreement or the
Conveyances or constitute a cure of any default by Mortgagor or SandRidge Parent
thereunder.

 

Section 1.3             Development Agreement and Other Obligations.  This
conveyance to the Trustee is in trust to secure and enforce the payment and
performance of the following obligations, indebtedness and liabilities:

 

(a)           The full performance of all obligations, covenants, agreements and
undertakings of and by SandRidge Parent and Mortgagor from time to time owing to
Mortgagee under Article II of the Development Agreement;

 

(b)           Any sums advanced or expenses or costs incurred by the Mortgagee
(or any receiver appointed hereunder) which are made or incurred pursuant to, or
permitted by, the terms hereof, plus interest thereon at a rate of interest
equal to the lesser of (i) five percent (5%) per annum or (ii) the maximum rate
permitted under applicable law or otherwise agreed upon, from the date of the
advances or the incurring of such expenses or costs until reimbursed; and

 

(c)           Without limiting the generality of the foregoing, all
post-petition interest, expenses, and other duties, damages and liabilities with
respect to indebtedness or other obligations described above in this
Section 1.3, which would be owed but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization, or similar
proceeding.

 

Section 1.4             Secured Obligations.  The obligations referred to in
Section 1.3, and all renewals, extensions and modifications thereof, and all
substitutions therefor, in whole or in part, are herein sometimes referred to as
the “secured obligations” or the “obligations secured hereby”.  It is
contemplated and acknowledged that the secured obligations may include
obligations hereafter arising and that this Deed of Trust shall have effect, as
of the date hereof, to secure all secured obligations, regardless of whether any
amounts exist on the date hereof or arise on a later date or, whether having
arisen or been advanced, are later repaid in part or in whole and further
obligations arise or advances are made at a later date.

 

Section 1.5             Limitation on Obligations.  The Mortgagor and Mortgagee
hereby agree and acknowledge that, as of the date hereof, the maximum amount
recoverable under this Deed of Trust for any failure by SandRidge Parent or
Mortgagor to perform the obligations described in Section 1.3(a) above is
$294,300,000; provided, that such amount will be adjusted downward, from time to
time, pursuant to Section 2.05(d) of the Development Agreement.  Mortgagor and
Mortgagee further agree and acknowledge that pursuant to Section 1.1 above, the
lien created by this Deed of Trust does not cover or extend to any Wells. 
Accordingly, the lien created by this Deed of Trust shall automatically
terminate on a wellbore only basis (as that term is commonly understood in the
Texas oil and gas industry) as to each Development Well drilled after the date
hereof as the same is completed.  Upon Mortgagor’s request and at Mortgagor’s
expense, Mortgagee shall promptly execute and deliver a partial release, which
will evidence the release in full of the lien created by this Deed of Trust with
respect to any Development Well.

 

Section 1.6             Maturity Date.  The obligations, covenants, agreements
and undertakings described in Section 1.3(a) of this Deed of Trust are due to be
performed on and

 

3

--------------------------------------------------------------------------------

 

before March 31, 2015, unless extended pursuant to the terms of the Development
Agreement to March 31, 2016 (the “Maturity Date”).

 

ARTICLE II.
Covenants

 

Section 2.1             Title Warranty.  Mortgagor warrants, represents,
covenants and agrees that the Mortgaged Properties are free and clear of all
liens, security interests and other Encumbrances, subject only to the Permitted
Encumbrances and that, to Mortgagor’s knowledge, Mortgagor is lawfully seized of
the estates and interests granted to Mortgagor under the Leases.  This Deed of
Trust is subject to (but in no event shall this Deed of Trust be an assumption
of) the Permitted Encumbrances, in each case to the extent and only for so long
as the same are valid and subsisting and affect title to the Mortgaged
Properties; provided, that the foregoing is not intended to, and shall not,
subordinate the lien created hereby.

 

Section 2.2             Mortgagor hereby covenants with the Mortgagee as
follows:

 

(a)           Further Assurance.  Mortgagor will, on request of Mortgagee,
(i) promptly correct any defect, error or omission which may be discovered in
the contents of this Deed of Trust, or in the execution or acknowledgment of
this Deed of Trust; (ii) execute, acknowledge, deliver and record or file such
further instruments and do such further acts as may be necessary, desirable or
proper to carry out more effectively the purposes of this Deed of Trust; and
(iii) execute, acknowledge, deliver, and file or record any document or
instrument reasonably requested by Mortgagee to protect the lien hereunder
against the rights or interests of third persons. Mortgagor shall pay all
reasonable costs connected with any of the foregoing.

 

(b)           Name and Place of Business.  Mortgagor will not cause or permit
any change to be made in its name, identity, limited liability company
structure, federal employer identification number or state of organization
(whether by merger or otherwise) unless Mortgagor shall have notified Mortgagee
of such change at least ten (10) days prior to the effective date of such
change, and shall have first taken all action required by Mortgagee for the
purpose of further perfecting or protecting the lien in the Mortgaged Properties
created hereby. Mortgagor’s exact name is the name set forth in this Deed of
Trust. Mortgagor is a limited liability company organized under the laws of the
State of Delaware.

 

Section 2.3             Transfer Restriction.  Except as permitted in Sections
11.02 and 11.03 of the applicable Conveyance, Mortgagor will not Transfer any of
the Mortgaged Properties without the prior written consent of the Mortgagee.  If
any Mortgaged Property is permitted to be Transferred pursuant to Sections 11.02
and 11.03 of the applicable Conveyance, the Mortgagee will promptly execute,
acknowledge and deliver a release of this Deed of Trust to the extent applicable
to such Mortgaged Properties proposed to be Transferred pursuant to Sections
11.02 and 11.03 of the applicable Conveyance.

 

ARTICLE III.
Remedies Upon Default

 

Section 3.1             Default.  The term “default” as used in this Deed of
Trust means:

 

4

--------------------------------------------------------------------------------

 

(a)           the failure by SandRidge Parent to perform any obligation required
to be performed by it under Section 2.01 of the Development Agreement on or
before the Maturity Date;

 

(b)           failure by SandRidge Parent, within thirty (30) days after notice
thereof from the Mortgagee, to cure a breach in the due performance or
observance of any other covenant or agreement contained in Article II of the
Development Agreement;

 

(c)           failure by the Mortgagor, within thirty (30) days after notice
thereof from the Mortgagee, to cure a breach in the due performance or
observance of any covenant or agreement contained in this Deed of Trust; or

 

(d)           this Deed of Trust shall fail to constitute a lien on any part of
the Mortgaged Properties (subject only to Permitted Encumbrances), and such
failure is not cured within thirty (30) days after written notice to Mortgagor
or Mortgagor otherwise obtains knowledge thereof.

 

Section 3.2             Remedies.

 

(a)           After the occurrence of a default under Section 3.1(a) of this
Deed of Trust, the lien evidenced hereby shall be subject to foreclosure, as
Mortgagee may elect, in any manner provided for herein or provided for or
required by law.  The existence of any default under Section 3.1(a) can be
determined only at the Maturity Date.  Accordingly, notwithstanding any
provision hereof or of law to the contrary, the secured obligations set forth in
Section 2.01 of the Development Agreement are not subject to acceleration.

 

(b)           After the occurrence of a default, Mortgagee is authorized prior
or subsequent to the institution of any foreclosure proceedings to enter upon
and to cause its agents to enter upon, the Mortgaged Properties, or any part
thereof, and to exercise without interference from Mortgagor any and all rights
which Mortgagor has with respect to the management, possession and operation of
the Mortgaged Properties.  All costs, expenses and liabilities of every
character incurred by Mortgagee in managing such properties shall constitute
demand obligations owing by Mortgagor and constitute a portion of the secured
obligations.

 

(c)           It shall be the duty of the Trustee and of his successors and
substitutes in the Trust, on Mortgagee’s request (which request is hereby
presumed) to enforce the Trust by selling the Mortgaged Property as is provided
in this Deed of Trust.

 

(d)           The sale shall be a public sale at auction held between 10 A.M.
and 4 P.M. of the first Tuesday of a month.  The sale shall take place at the
county courthouse in Andrews County, Texas.  The sale shall occur at the area at
that courthouse which the commissioners’ court of Andrews County has designated
as the place where such sales are to take place by designation recorded in the
real property records of Andrews County, or if no area is so designated, then
the notice of sale shall designate the area at the courthouse where the sale
covered by that notice is to take place, and the sale shall occur in that area. 
Notice of the sale shall include a statement of the earliest time at which the
sale will occur and shall be given at least twenty-one (21) days before the date
of the sale (1) by posting notice at the courthouse door of Andrews County a
written notice designating Andrews County as the county in which the Mortgaged
Properties are located, (2) by filing a notice in the Office of the County Clerk
of Andrews County and (3) by Mortgagee

 

5

--------------------------------------------------------------------------------

 

by certified mail on Mortgagor and SandRidge Parent.  The sale shall begin at
the time stated in the notice of sale or not later than three (3) hours after
that time.  The affidavit of an individual knowledgeable of the facts to the
effect that service was completed is prima facie evidence of service.  After
such written notice shall have been posted and filed, as aforesaid, and such
notice shall have been served upon such debtor or debtors, as aforesaid, Trustee
(or Trustee’s successor or substitute then acting) shall perform Trustee’s duty
to enforce the Trust by selling the Mortgaged Properties, either as an entirety
or in parcels as the Trustee acting may elect, all rights to a marshalling of
assets or sale in inverse order of alienation being waived, as aforesaid to the
highest bidder or bidders for cash, and make due conveyance to the purchaser or
purchasers, with general warranty, and the title to such purchaser or
purchasers, when so made by the Trustee acting, Mortgagor binds itself, its
successors and assigns, to warrant and forever defend against the claims and
demands of every Person whomsoever lawfully claiming or to claim the same or any
part thereof (such warranty to supersede any provision contained in this Deed of
Trust limiting the liability of Mortgagor).  The provisions of this Deed of
Trust with respect to posting and giving notices of sale are intended to comply
with the provisions of Section 51.002 of the Texas Property Code as in force and
effect on the date hereof, and in the event the requirement for any notice under
such Section 51.002 shall be eliminated or the prescribed manner of giving it
shall be modified by future amendment to, or adoption of any statute
superseding, such Section 51.002, the requirement for such particular notice
shall be deemed stricken from or modified in of this Deed of Trust in conformity
with such amendment or superseding statute, effective as of its effective date. 
The manner prescribed in this Deed of Trust for serving or giving any notice,
other than that to be posted or caused to be posted by the Trustee acting, shall
not be deemed exclusive but such notice or notices may be given in any other
manner permitted by applicable law.  Said sale shall forever be a bar against
Mortgagor, its successors and assigns, and all other Persons claiming under it. 
It is expressly agreed that the recitals in each conveyance to the purchaser
shall be full evidence of the truth of the matters therein stated, and all
lawful prerequisites to said sale shall be conclusively presumed to have been
performed.  Trustee may require minimum bids at any foreclosure sale and may
cancel and abandon the sale if no bid is received equal to or greater than any
such minimum bid.

 

(e)           Mortgagee shall have the right to become the purchaser at any sale
made under this Deed of Trust, being the highest bidder, and credit given upon
all or any part of the secured obligations shall be the exact equivalent of cash
paid for the purposes of this Deed of Trust.

 

(f)            No single sale or series of sales by the Trustee acting and no
judicial foreclosure shall extinguish the lien or exhaust the power of sale
under this Deed of Trust except with respect to the items of property sold, nor
shall it extinguish, terminate or impair Mortgagor’s contractual obligations
under this Deed of Trust, but such lien and power shall exist for so long as,
and may be exercised in any manner by law or in this Deed of Trust provided as
often as the circumstances require to give Mortgagee full relief under this Deed
of Trust, and such contractual obligations shall continue in full force and
effect until final termination of this Deed of Trust.

 

(g)           All costs and expenses (including attorneys’ fees) incurred by
Mortgagee in protecting and enforcing the rights of Mortgagee hereunder, shall
constitute a demand obligation owing by Mortgagor to Mortgagee, all of which
shall constitute a portion of the secured obligations.

 

6

--------------------------------------------------------------------------------

 

(h)           If the Trustee acting should commence the sale, Mortgagee may at
any time before the sale is completed direct the Trustee acting to abandon the
sale, and may at any time or times thereafter direct the Trustee acting to again
commence foreclosure; or, irrespective of whether foreclosure is commenced by
the Trustee acting, Mortgagee may at any time after a default institute suit for
collection of the secured obligations or foreclosure of this Deed of Trust.  If
Mortgagee should institute suit for collection of the secured obligations or
foreclosure of this Deed of Trust, Mortgagee may at any time before the entry of
final judgment dismiss it and require the Trustee acting to sell the Mortgaged
Properties in accordance with the provisions of this Deed of Trust.  If the
Mortgaged Properties consists of several parcels or interests, Mortgagee may
designate the order in which the same shall be offered for sale or sold. 
Mortgagor waives all rights to direct the order in which any of the Mortgaged
Properties will be sold in the event of any sale under this Deed of Trust, and
also any right to have any of the Mortgaged Properties marshaled upon any sale.

 

(i)            Notwithstanding any other provisions of this Deed of Trust, any
lease of Minerals covered by this Deed of Trust which are subject to the Mineral
Leasing Act of 1920 as amended, and the regulations promulgated thereunder,
shall not be sold or otherwise disposed of to any party other than the citizens
of the United States, or to associations of such citizens or to any corporation
organized under the laws of the United States, or any state or territory thereof
that are qualified to own or control interests in such leases under the
provisions of such Act and regulations, or to Persons who may acquire ownership
or interest in such leases under the provisions of 30 U.S.C. §184(g) if
applicable, as such Act or regulations are now or may be from time to time in
effect.

 

(j)            The proceeds of any sale of the Mortgaged Properties, and any
other amounts collected by Mortgagee from Mortgagee’s holding, leasing,
operating or making any other use of the Mortgaged Properties, shall be applied
by Mortgagee (or by the receiver, if one is appointed) to the extent that funds
are available therefrom in the following order of priority:

 

FIRST, to the payment of the costs and expenses of taking possession of the
Mortgaged Properties and of holding, maintaining, using, leasing, repairing,
equipping, manning, improving, marketing and selling it, including (i) trustees’
and receivers’ fees, (ii) court costs, (iii) attorneys’ and accountants’ fees
and (iv) costs of advertisement and brokers’ commissions;

 

SECOND, to the payment of the secured obligations;

 

THIRD, to the extent funds are available therefor out of the sale proceeds or
any rents and, to the extent known by Mortgagee, to the payment of any debt or
obligation secured by a subordinate deed of trust on or security interest in the
Mortgaged Properties; and

 

FOURTH, to Mortgagor, its successors and assigns, or to whomsoever may be
lawfully entitled to receive such proceeds.

 

Section 3.3             Successor or Substitute Trustee.  In case of absence,
death, inability, refusal or failure of Trustee named herein to act, or in case
Trustee should resign (and Trustee is hereby authorized to resign without notice
to or consent of Mortgagor), or if Mortgagee shall desire, with or without
cause, to replace the named Trustee, or to replace any

 

7

--------------------------------------------------------------------------------

 

successor or substitute previously named, Mortgagee or any agent or
attorney-in-fact for Mortgagee may name, constitute and appoint a successor and
substitute trustee (or another one) without other formality than an appointment
and designation in writing, which need not be acknowledged, filed or recorded to
be effective, except only in those circumstances—if any—where acknowledgment,
filing and/or recording is required by applicable law and such law also
precludes Mortgagor from effectively waiving such requirement.  Upon such
appointment, this conveyance shall automatically vest in such substitute
trustee, as Trustee, the estate in and title to all of the Mortgaged Properties,
and such substitute Trustee so appointed and designated shall thereupon hold,
possess and exercise all the title, rights, powers and duties in this Deed of
Trust conferred on the Trustee named and any previous successor or substitute
Trustee, and his conveyance to the purchaser at any such sale shall be equally
valid and effective as if made by the Trustee named in this Deed of Trust.  Such
right to appoint a substitute Trustee shall exist and may be exercised as often
and whenever from any of said causes, or without cause, as aforesaid, Mortgagee
or Mortgagee’s agent or attorney-in-fact elects to exercise it.

 

Section 3.4             Remedies Cumulative.  All remedies herein provided for
are cumulative of each other and of all other remedies existing at law or in
equity and are cumulative of any and all other remedies provided for in the
Development Agreement, and, in addition to the remedies herein provided, there
shall continue to be available all such other remedies as may now or hereafter
exist at law or in equity for the collection of the secured obligations and the
enforcement of the covenants herein and the foreclosure of the Lien evidenced
hereby, and the resort to any remedy provided for hereunder or under the
Development Agreement or provided for by applicable law shall not prevent the
concurrent or subsequent employment of any other appropriate remedy or remedies.

 

Section 3.5             Discretion as to Security.  Mortgagee may resort to any
security given by this Deed of Trust or to any guaranty of the obligations
secured hereby, in whole or in part, and in such portions and in such order as
may seem best to Mortgagee in its sole and uncontrolled discretion, and any such
action shall not in any way be considered as a waiver of any of the rights,
benefits, liens or security interests evidenced by this Deed of Trust.

 

Section 3.6             Mortgagor’s Waiver of Certain Rights.  To the full
extent Mortgagor may do so, Mortgagor agrees that Mortgagor will not at any time
insist upon, plead, claim or take the benefit or advantage of any law now or
hereafter in force providing for any valuation, stay, extension or redemption,
and Mortgagor, for Mortgagor, Mortgagor’s successors and assigns, and for any
and all Persons ever claiming any interest in the Mortgaged Properties, to the
extent permitted by applicable law, hereby waives and releases all rights of
valuation, stay of execution, redemption, notice of intention to mature or
declare due the whole of the secured obligations,  notice of election to mature
or declare due the whole of the secured obligations and all rights to a
marshaling of assets of Mortgagor, including the Mortgaged Properties, or to a
sale in inverse order of alienation in the event of foreclosure of the Lien
hereby created.  Mortgagor shall not have or assert any right under any statute
or rule of law pertaining to the marshaling of assets, sale in inverse order of
alienation, the exemption of homestead, the administration of estates of
decedents or other matters whatever to defeat, reduce or affect the right under
the terms of this Deed of Trust to a sale of the Mortgaged Properties for the
collection of the secured obligations without any prior or different resort for
collection, or the right under the terms of this Deed of Trust to the payment of
the secured obligations out of the proceeds of sale of the

 

8

--------------------------------------------------------------------------------

 

Mortgaged Properties in preference to every other claimant whatever.  If any law
referred to in this Section 3.6 and now in force, of which Mortgagor or
Mortgagor’s successors or assigns or any other Persons claiming any interest in
the Mortgaged Properties might take advantage despite this section, shall
hereafter be repealed or cease to be in force, such law shall not thereafter be
deemed to preclude the application of this Section 3.6.

 

Section 3.7             No Release of Obligations.  Neither Mortgagor nor any
other Person hereafter obligated for payment of all or any part of the secured
obligations shall be relieved of such secured obligations by reason of (a) the
failure of Mortgagee or any other Person so obligated to foreclose the lien of
this Deed of Trust or to enforce any provision hereunder or under the
Development Agreement; or (b) the release, regardless of consideration, of the
Mortgaged Properties or any portion thereof or interest therein or the addition
of any other property to the Mortgaged Properties.  Mortgagee may release,
regardless of consideration, any part of the Mortgaged Properties without, as to
the remainder, in any way impairing, affecting, subordinating or releasing the
lien created in or evidenced by this Deed of Trust or its stature as a first and
prior lien and security interest in and to the Mortgaged Properties, and without
in any way releasing or diminishing the liability of any Person liable for the
repayment or performance of the secured obligations.  For payment of the secured
obligations, Mortgagee may resort to any other security therefor held by
Mortgagee in such order and manner as Mortgagee may elect.

 

Section 3.8             Discontinuance of Proceedings.  In case Mortgagee shall
have proceeded to invoke any right, remedy or recourse permitted hereunder or
under the Development Agreement and shall thereafter elect to discontinue or
abandon same for any reason, Mortgagee shall have the unqualified right to do so
and, in such an event, Mortgagor and Mortgagee shall be restored to their former
positions with respect to the secured obligations, this Deed of Trust, the
Development Agreement, the Mortgaged Properties and otherwise, and the rights,
remedies, recourses and powers of Mortgagee shall continue as if same had never
been invoked.

 

ARTICLE IV.
Miscellaneous

 

Section 4.1             Filing.  This Deed of Trust is to be filed for record in
the real property records of the county where a the Mortgaged Properties are
situated.  The mailing address of Mortgagor is the address of Mortgagor set
forth at the end of this Deed of Trust and the address of Mortgagee from which
information concerning the Lien hereunder may be obtained is the address of
Mortgagee set forth at the end of this Deed of Trust.  Nothing contained in this
Section 4.1 shall be construed to limit the scope of this Deed of Trust.

 

Section 4.2             Waivers.  Mortgagee may at any time and from time to
time in writing waive compliance by Mortgagor with any covenant herein made by
Mortgagor to the extent and in the manner specified in such writing, or consent
to Mortgagor’s doing any act which hereunder Mortgagor is prohibited from doing,
or to Mortgagor’s failing to do any act which hereunder Mortgagor is required to
do, to the extent and in the manner specified in such writing, or release any
part of the Mortgaged Properties or any interest therein from the lien of this
Deed of Trust.  Any party liable, either directly or indirectly, for the secured
obligations or for any covenant herein or in the Development Agreement may be
released from all or any part

 

9

--------------------------------------------------------------------------------

 

of such obligations without impairing or releasing the liability of any other
party.  No such act shall in any way impair any rights or powers hereunder
except to the extent specifically agreed to in such writing.

 

Section 4.3             No Impairment of Security.  To the extent allowed by
applicable law, the lien, privilege and other security rights hereunder shall
not be impaired by any indulgence, moratorium or release which may be granted
including, but not limited to, any renewal, extension or modification which may
be granted with respect to any secured obligations, or any surrender,
compromise, release, renewal, extension, exchange or substitution which may be
granted in respect of the Mortgaged Properties, or any part thereof or any
interest therein, or any release or indulgence granted to any endorser,
guarantor or surety of any secured obligations.

 

Section 4.4             Acts Not Constituting Waiver.  Any default may be waived
without waiving any other prior or subsequent default.  Any default may be
remedied without waiving the default remedied.  Neither failure to exercise, nor
delay in exercising, any right, power or remedy upon any default shall be
construed as a waiver of such default or as a waiver of the right to exercise
any such right, power or remedy at a later date.  No single or partial exercise
of any right, power or remedy hereunder shall exhaust the same or shall preclude
any other or further exercise thereof, and every such right, power or remedy
hereunder may be exercised at any time and from time to time.  No modification
or waiver of any provision hereof nor consent to any departure by Mortgagor
therefrom shall in any event be effective unless the same shall be in writing
and signed by Mortgagee and then such waiver or consent shall be effective only
in the specific instances, for the purpose for which given and to the extent
therein specified.  No notice nor demand on Mortgagor in any case shall of
itself entitle Mortgagor to any other or further notice or demand in similar or
other circumstances.  Acceptance of any payment in an amount less than the
amount then due on any secured obligations shall be deemed an acceptance on
account only and shall not in any way excuse the existence of a default
hereunder.

 

Section 4.5             Forbearance or Extension.  No forbearance and no
extension of the time for the payment of the obligations secured hereby, shall
operate to release, discharge, modify, change or affect, in whole or in part,
the liability of Mortgagor hereunder for the payment of the obligations or
performance of the obligations secured hereby, or the liability of any other
Person hereunder or for the payment of the obligations secured hereby.

 

Section 4.6             Place of Payment.  All secured obligations which may be
owing hereunder at any time by Mortgagor shall be payable at the place
designated in the Development Agreement (or if no such designation is made, at
the address of Mortgagee indicated at the end of this Deed of Trust), or at such
other place as Mortgagee may designate in writing.

 

Section 4.7             Application of Payments to Certain Obligations.  If any
part of the secured obligations cannot be lawfully secured by this Deed of Trust
or if any part of the Mortgaged Properties cannot be lawfully subject to the
lien, privilege and security interest hereof to the full extent of such
obligations, then all payments made shall be applied on said obligations first
in discharge of that portion thereof which is not secured by this Deed of Trust.

 

10

--------------------------------------------------------------------------------

 

Section 4.8             Compliance With Usury Laws.  It is the intent of
Mortgagor and Mortgagee to contract in strict compliance with applicable usury
law from time to time in effect.  In furtherance thereof, it is stipulated and
agreed that none of the terms and provisions contained herein, in the
Development Agreement or in the Conveyances shall ever be construed to create a
contract to pay, for the use, forbearance or detention of money, interest in
excess of the maximum amount of interest permitted to be collected, charged,
taken, reserved or received by applicable law from time to time in effect.

 

Section 4.9             Release of Deed of Trust.  In addition to the partial
releases required pursuant to Section 1.5 hereof, if Mortgagor has satisfied its
obligations under Article II of the Development Agreement, the lien created by
this Deed of Trust shall automatically terminate and upon request by Mortgagor,
Mortgagee shall promptly cause satisfaction, discharge and release of this Deed
of Trust to be entered upon the record at the expense of Mortgagor and shall
execute and deliver or cause to be executed and delivered such instruments of
satisfaction, reassignment and/or release as may be appropriate.

 

Section 4.10           Notice.  All notices, requests, consents, demands and
other communications required or permitted hereunder or under the Development
Agreement shall be in writing and, unless otherwise specifically provided in the
Development Agreement, shall be deemed sufficiently given or furnished if
delivered by personal delivery, by telefacsimile, by delivery service with proof
of delivery, or by registered or certified United States mail, postage prepaid,
at the addresses specified at the end of this Deed of Trust (unless changed by
similar notice in writing given by the particular party whose address is to be
changed).  Any such notice or communication shall be deemed to have been given
(a) in the case of personal delivery or delivery service, as of the date of
first attempted delivery at the address and in the manner provided herein,
(b) in the case of telefacsimile, upon receipt, and (c) in the case of
registered or certified United States mail, three (3) days after deposit in the
mail.  Notwithstanding the foregoing, or anything else in the Development
Agreement which may appear to the contrary, any notice given in connection with
a foreclosure of the lien created hereunder, or otherwise in connection with the
exercise by Mortgagee of its rights hereunder or under the Development
Agreement, which is given in a manner permitted by applicable law shall
constitute proper notice; without limitation of the foregoing, notice given in a
form required or permitted by statute shall (as to the portion of the Mortgaged
Properties to which such statute is applicable) constitute proper notice.

 

Section 4.11           Invalidity of Certain Provisions.  A determination that
any provision of this Deed of Trust is unenforceable or invalid shall not affect
the enforceability or validity of any other provision and the determination that
the application of any provision of this Deed of Trust to any Person or
circumstance is illegal or unenforceable shall not affect the enforceability or
validity of such provision as it may apply to other Persons or circumstances.

 

Section 4.12           Gender; Titles; Construction.  All references in this
Deed of Trust to articles, sections, subsections and other subdivisions refer to
corresponding articles, sections, subsections and other subdivisions of this
Deed of Trust unless expressly provided otherwise.  Titles appearing at the
beginning of any of such subdivisions are for convenience only and shall not
constitute part of such subdivisions and shall be disregarded in construing the
language contained in such subdivisions.  The words “this Deed of Trust”, “this
instrument”, “herein”,

 

11

--------------------------------------------------------------------------------

 

“hereof”, “hereunder” and words of similar import refer to this Deed of Trust as
a whole and not to any particular subdivision unless expressly so limited. 
Unless the context otherwise requires: “including” and its grammatical
variations mean “including without limitation”; “or” is not exclusive; words in
the singular form shall be construed to include the plural and vice versa; words
in any gender include all other genders; references herein to any instrument or
agreement refer to such instrument or agreement as it may be from time to time
amended or supplemented; and references herein to any Person include such
Person’s successors and assigns.  All references in this Deed of Trust to
Exhibits and Annexes refer to Exhibits and Annexes to this Deed of Trust unless
expressly provided otherwise, and all such Exhibits and Annexes are hereby
incorporated herein by reference and made a part hereof for all purposes.  This
Deed of Trust has been drafted with the joint participation of Mortgagor and
Mortgagee and shall be construed neither against nor in favor of either such
party but rather in accordance with the fair meaning hereof.

 

Section 4.13           Recording.  Mortgagor will cause this Deed of Trust and
all amendments and supplements thereto and substitutions therefor to be
recorded, filed, re-recorded and refiled in such manner and in such places as
Mortgagee shall reasonably request and will pay all such recording, filing,
re-recording and refiling taxes, fees and other charges.

 

Section 4.14           Certain Obligations of Mortgagor.  Without limiting
Mortgagor’s obligations hereunder, Mortgagor’s liability hereunder and the
obligations secured hereby shall extend to and include all post petition
interest, expenses and other duties and liabilities with respect to Mortgagor’s
obligations hereunder which would be owed but for the fact that the same may be
unenforceable due to the existence of a bankruptcy, reorganization or similar
proceeding.

 

Section 4.15           Authority of Mortgagee.  All Persons shall be entitled to
rely on the releases, waivers, consents, approvals, notifications and other acts
of Mortgagee without the joinder of any party other than Mortgagee in such
releases, waivers, consents, approvals, notifications or other acts.

 

Section 4.16           Counterparts.  This Deed of Trust may be executed in
several counterparts, all of which are identical.  All of the counterparts
hereof together shall constitute one and the same instrument.  An executed
counterpart of this Deed of Trust containing the full text of Exhibit A and
Annexes A-1, A-2 and A-3 (although omitting the exhibits and schedules to such
Annexes) is recorded in the real property records of Andrews County, Texas.

 

Section 4.17           Successors and Assigns.  The terms, provisions,
covenants, representations, indemnifications and conditions hereof shall be
binding upon Mortgagor, and the successors and assigns of Mortgagor, and shall
inure to the benefit of Mortgagee and its respective successors and assigns, and
shall constitute covenants running with the Mortgaged Properties.  All
references in this Deed of Trust to Mortgagor or Mortgagee shall be deemed to
include all such successors and assigns.

 

Section 4.18           FINAL AGREEMENT OF THE PARTIES.  THE WRITTEN TRANSACTION
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR,

 

12

--------------------------------------------------------------------------------

 

CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

Section 4.19           CHOICE OF LAW.  WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW THAT MAY CAUSE THE APPLICATION OF LAWS OF ANY OTHER JURISDICTION, THIS
DEED OF TRUST SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF TEXAS.

 

Section 4.20           EXCULPATION PROVISIONS.  EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS DEED OF TRUST; AND AGREES
THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS DEED OF TRUST;
THAT IT HAS IN FACT READ THIS DEED OF TRUST AND IS FULLY INFORMED AND HAS FULL
NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS DEED OF TRUST;
THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE
THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS DEED OF TRUST; AND
HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS DEED OF TRUST; AND
THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS DEED OF TRUST RESULT IN ONE
PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND
RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY
HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR
ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS DEED OF TRUST ON THE BASIS
THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE
PROVISION IS NOT “CONSPICUOUS.”

 

Section 4.21           Release of Institutional Trustee. It is expressly
understood and agreed by the parties hereto that (a) this Deed of Trust is
executed and delivered for SandRidge Permian Trust, as Mortgagee hereunder, by
The Bank of New York Mellon Trust Company, N.A. (the “Institutional Trustee”)
not individually or personally, but solely as institutional Trustee (and not the
Trustee named herein) on behalf of SandRidge Permian Trust in the exercise of
the powers and authority conferred and vested in it and (b) under no
circumstances shall the Institutional Trustee be liable for any liability of
Mortgagee or for any action taken or not taken by Mortgagee or Institutional
Trustee under or in connection with this Deed of Trust. Mortgagor hereby
unconditionally and irrevocably releases the Institutional Trustee from any and
all claims of Mortgagor, whether now existing or arising in the future, arising
out of, based upon, or otherwise related to, any action taken or not taken by
Mortgagee or the Institutional Trustee under or in connection with this Deed of
Trust.

 

13

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, this Deed of Trust is executed by Mortgagor on the date set
forth in the acknowledgement below, to be effective immediately after the
granting of the Conveyances and the Assignment and simultaneously with the
execution and delivery of the Development Agreement.

 

 

SANDRIDGE EXPLORATION AND PRODUCTION, LLC

 

 

 

 

 

By:

/s/ James D. Bennett

 

 

James D. Bennett

 

 

Executive Vice President and Chief Financial Officer

 

The address of Mortgagor is:

 

SandRidge Exploration and Production, LLC

123 Robert S. Kerr Avenue

Oklahoma City, OK 73102-6406

Attention:  Philip T. Warman

Facsimile No.: (405) 429-5983

 

With a copy to:

 

Locke Lord Bissell & Liddell LLP

2800 JPMorgan Chase Tower
600 Travis

Houston, TX 77002

Attention:  Lyman R. Paden

Facsimile No.: (713) 229-2522

 

SIGNATURE PAGE TO DEED OF TRUST

 

--------------------------------------------------------------------------------

 

 

SANDRIDGE PERMIAN TRUST

 

 

 

By:

The Bank of New York Mellon Trust Company, N.A., as Trustee

 

 

 

 

 

 

 

By:

/s/ Michael J. Ulrich

 

 

Michael J. Ulrich

 

 

Vice-President

 

I do hereby certify that the address of Mortgagee is:

 

The Bank of New York Mellon Trust Company, N.A.

919 Congress Avenue, Suite 500

Austin, Texas 78701

Attn: Michael J. Ulrich

 

SIGNATURE PAGE TO DEED OF TRUST

 

--------------------------------------------------------------------------------

 

STATE OF OKLAHOMA

§

 

§

COUNTY OF OKLAHOMA

§

 

This instrument was acknowledged before me on August 8, 2011, by James D.
Bennett as Executive Vice President and Chief Financial Officer of SandRidge
Exploration and Production, LLC, a Delaware limited liability company, on behalf
of said limited liability company.

 

 

 

 

/s/ Janis L. Roberts

 

 

NOTARY PUBLIC, State of Oklahoma

 

 

Janis L. Roberts

 

 

(printed name)

 

 

 

My commission expires:

 

 

May 22, 2012

 

 

 

 

 

 

 

 

SEAL or STAMP

 

 

 

ACKNOWLEDGMENT PAGE TO DEED OF TRUST

 

--------------------------------------------------------------------------------

 

STATE OF TEXAS

§

 

§

COUNTY OF TRAVIS

§

 

This instrument was acknowledged before me on August 11, 2011, by Michael J.
Ulrich, Vice-President of The Bank of New York Mellon Trust Company, N.A., a
national banking association, on behalf of said association as the Trustee of
SandRidge Permian Trust, a Delaware statutory trust.

 

 

 

 

/s/ Sarah Newell

 

 

NOTARY PUBLIC, State of Texas

 

 

Sarah Newell

 

 

(printed name)

 

 

 

My commission expires:

 

 

02-16-2014

 

 

 

 

 

 

 

 

SEAL or STAMP

 

 

 

ACKNOWLEDGMENT PAGE TO DEED OF TRUST

 

--------------------------------------------------------------------------------

 

ANNEX A-1
COPY OF TERM ROYALTY CONVEYANCE (DEVELOPMENT)

 

--------------------------------------------------------------------------------

 

ANNEX A-2
COPY OF ASSIGNMENT

 

--------------------------------------------------------------------------------

 

ANNEX A-3
COPY OF PERPETUAL ROYALTY CONVEYANCE (DEVELOPMENT)

 

--------------------------------------------------------------------------------

 

EXHIBIT A
MORTGAGED PROPERTIES

 

--------------------------------------------------------------------------------