SD SandRidge Energy Inc

On June 21, 2019 (the “Restatement Date”), SandRidge Energy, Inc. (the “Company”) amended and restated its existing reserve-based revolving credit facility among the Company, certain of its subsidiaries, the lenders party thereto, and Royal Bank of Canada, as administrative agent (the “Restatement”). In order to effectuate the Restatement, the Company entered into an amendment to the existing credit agreement (the “Existing Credit Agreement”, and as amended and restated, the “Restated Credit Facility”) to, among other things:

The initial borrowing base under the Restated Credit Facility is $300.0 million and the next scheduled borrowing base redetermination is scheduled for October 1, 2019, followed by scheduled semiannual borrowing base redeterminations thereafter. As of the Restatement Date, the aggregate elected commitment amount under the Restated Credit Facility is $270.0 million, which the Company may reduce at its election or increase by causing the elected commitment of an existing lender to increase or by causing a non-lender party to become a lender under the Restated Credit Facility.

The Restated Credit Facility is secured by (i) first-priority mortgages on at least 85% of the PV-9 valuation of all proved reserves included in the most recently delivered reserve report of the Company, (ii) a first-priority perfected pledge of substantially all of the capital stock owned by each credit party and equity interests in the SandRidge Mississippian Trust I and SandRidge Mississippian Trust II that are owned by a credit party and (iii) a first-priority perfected security interest in substantially all the cash, cash equivalents, deposits, securities and other similar accounts, and other tangible and intangible assets of the credit parties (including but not limited to as-extracted collateral, accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property, real property and the proceeds of the foregoing). Other than in respect of the first-priority mortgages, which such requirement was reduced as detailed above, such terms are materially similar as those contained in the Existing Credit Facility.

The Restated Credit Facility requires the company to, commencing with the first full quarter ending after the Restatement Date, maintain (i) a maximum consolidated total net leverage ratio, measured as of the end of any fiscal quarter, of no greater than 3.50 to 1.00 and (ii) a minimum consolidated interest coverage ratio, measured as of the end of any fiscal quarter, of no less than 2.25 to 1.00. Such financial covenants are subject to customary cure rights.

The Restated Credit Facility contains customary affirmative and negative covenants, including as to compliance with laws (including environmental laws, ERISA and anti-corruption laws), maintenance of required insurance, delivery of quarterly and annual financial statements, oil and gas engineering reports, maintenance and operation of property (including oil and gas properties), restrictions on the incurrence of liens, investments, indebtedness, asset dispositions, fundamental changes, restricted payments and other customary covenants. Such covenants are materially similar to those contained in the Existing Credit Facility.

The Restated Credit Facility also includes events of default relating to customary matters, including, among other things, nonpayment of principal, interest or other amounts, violation of covenants, incorrectness of representations and warranties in any material respect, cross-payment default and cross acceleration with respect to indebtedness in an aggregate principal amount of $25.0 million or more, bankruptcy, judgments involving liability of $25.0 million or more that are not paid, and ERISA events. Many events of default are subject to customary notice and cure periods. Such events of default are materially similar to those contained in the Existing Credit Facility.

As described above, the Restated Credit Facility amended and restated, and thereby replaced, the Existing Credit Agreement. The above description of the material terms and conditions of the Restated Credit Facility does not purport to be complete and is qualified in its entirety by reference to the full text of the Restated Credit Facility attached as Exhibit A to the Refinancing Amendment No. 2, which is filed as Exhibit 10.1 hereto.