Exhibit 10.3

Execution Version

THIRD AMENDMENT TO CREDIT AGREEMENT

 

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of
March 31, 2016, is among SAMSON OIL AND GAS USA, INC., a Colorado corporation
(“Borrower”), SAMSON OIL & GAS LIMITED, an Australian public company (the
“Parent”), SAMSON OIL AND GAS USA MONTANA, INC., a Colorado corporation (“Samson
Montana”, and together with the Parent, collectively, the “Guarantors”, and
each, individually, a “Guarantor”), the Lenders party hereto, and MUTUAL OF
OMAHA BANK, as Administrative Agent for the Lenders (in such capacity,
“Administrative Agent”) and as L/C Issuer.

 

R E C I T A L S

 

A. Borrower, the financial institutions party thereto, and Administrative Agent
are parties to a Credit Agreement dated as of January 27, 2014, as amended by
that certain First Amendment to Credit Agreement, dated as of November 24, 2014,
and that certain Second Amendment to Credit Agreement, dated as of May 13, 2015
(collectively, the “Original Credit Agreement”).

 

B. The parties desire to amend the Original Credit Agreement as hereinafter
provided.

 

NOW, THEREFORE, in consideration of these premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1. Same Terms. All terms used herein which are defined in the Original Credit
Agreement shall have the same meanings when used herein, unless the context
hereof otherwise requires or provides. In addition, (a) all references in the
Loan Documents to the “Credit Agreement” or the “Agreement” shall mean the
Original Credit Agreement, as amended by this Amendment, as the same shall
hereafter be amended from time to time, and (b) all references in the Loan
Documents to the “Loan Documents” shall mean the Loan Documents, as amended by
this Amendment and the Modification Papers, as the same shall hereafter be
amended from time to time. In addition, the following terms have the meanings
set forth below:

 

“Effective Date” means the date when (a) all Lenders have executed this
Amendment, and (b) the conditions set forth in Section 2 of this Amendment have
been complied with to the satisfaction of the Administrative Agent, unless
waived in writing by the Administrative Agent.

 

“Modification Papers” means this Amendment and all of the other documents and
agreements executed in connection with the transactions contemplated by this
Amendment.

 

2. Amendments to Original Credit Agreement. On the Effective Date, the Original
Credit Agreement shall be deemed to be amended as follows:

 

(a) The following definitions in Section 1.01 of the Original Credit Agreement
shall be amended to read in their entireties as follows:

 

 

 

 

“‘Applicable Rate’ means, from time to time, with respect to any Base Rate Loan
or Eurodollar Rate Loan, or with respect to the Letter of Credit fee and the
commitment fee payable hereunder, as the case may be, the rate per annum set
forth below based upon the Leverage Ratio, as set forth in the most recent
Compliance Certificate received by Administrative Agent pursuant to Section
7.02(a):

 

Pricing
Level Leverage Ratio Eurodollar
Loans and
Letter of
Credit Fee Base Rate
Loans Commitment
Fee Rate 1 ≤ 2.50 to 1.00 3.00% 1.25% 0.50% 2 > 2.50 to 1.00 but ≤ 3.00 to 1.00
4.00% 1.75% 0.50% 3 > 3.00 to 1.00 but ≤ 3.50 to 1.00 4.50% 2.00% 0.50% 4 > 3.50
to 1.00 but ≤ 4.00 to 1.00 5.00% 2.25% 0.50% 5 > 4.00 to 1.00 but ≤ 4.50 to 1.00
5.50% 2.50% 0.25% 6 > 4.50 to 1.00 6.00% 2.75% 0.25%

 

For the period beginning on the Third Amendment Effective Date through the date
a Compliance Certificate is delivered for the fiscal quarter ending June 30,
2016, the Applicable Rate shall be set at Pricing Level 6. Upon Borrower’s
delivery of a Compliance Certificate pursuant to Section 7.02(a), the Applicable
Rate shall automatically be adjusted as set forth in the schedule above, such
automatic adjustment to take effect as of the first Business Day following the
date a Compliance Certificate is delivered; provided, however, in the event
Borrower fails to timely deliver a Compliance Certificate as required by Section
7.02(a), the Applicable Rate shall be automatically set at Pricing Level 6 in
the schedule above (such automatic adjustment to take effect on the first
Business Day following the date such Compliance Certificate was required to have
been delivered under Section 7.02(a)) until delivery of a Compliance Certificate
indicating an adjustment to the Applicable Rate is applicable, such adjustment
to take effect automatically as of the first Business Day following delivery of
such Compliance Certificate

 

If, as a result of any restatement of or other adjustment to the financial
statements of Borrower or for any other reason (including without limitation,
late delivery of a Compliance Certificate), Borrower or Administrative Agent
determines that either (a) the Leverage Ratio as calculated by Borrower as of
any applicable date was inaccurate and a proper calculation of such ratio would
have resulted in higher pricing for such period or (b) such Compliance
Certificate (which may have been delivered untimely) indicates a Leverage Ratio
that would have resulted in a higher pricing for such period, Borrower shall
promptly and retroactively be obligated to pay to Administrative Agent for the
account of the Lenders an amount equal to the excess of the amount of interest
and fees that should have been paid for such period over the amount of interest
and fees actually paid for such period; provided, however, if the proper
calculation thereof would have resulted in lower pricing for such period,
neither Administrative Agent nor any Lender shall have any obligation to
recalculate such interest or fees or to repay any interest or fees to Borrower.

 

THIRD AMENDMENT TO CREDIT AGREEMENT– Page 2

 

 

 

‘Eurodollar Rate’ means for any Interest Period with respect to a Eurodollar
Rate Loan, the rate per annum equal to the rate determined by Administrative
Agent to be the London interbank offered rate as administered by ICE Benchmark
Administration (or any other Person that takes over the administration of such
rate) that appears on pages LIBOR01 or LIBOR02 of the Reuters screen that
displays such rate (or any successor thereto) for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period; provided that
if such rate appearing on such screen or page shall be less than zero, such rate
shall be deemed to be zero for purposes of this Agreement. If such rate is not
available at such time for any reason, Administrative Agent shall determine such
rate as the average of quotations for three (3) major New York money center
banks of whom Administrative Agent shall inquire as the "London Interbank
Offered Rate" for deposits in U.S. Dollars at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period.

 

‘Test Period’ means, at any time, the four consecutive fiscal quarters of
Borrower then last ended (in each case taken as one accounting period) for which
financial statements have been or are required to be delivered pursuant to this
Agreement; provided, however, for purposes of the calculation of EBITDAX and
interest expense for the Test Period ending June 30, 2016, such amounts shall be
annualized by taking the results of the fiscal quarter ending June 30, 2016, and
multiplying them by four (4); for the Test Period ending September 30, 2016,
such amounts shall be annualized by taking the results of the two (2) fiscal
quarters ending September 30, 2016, and multiplying them by two (2); and for the
Test Period ending December 31, 2016, such amounts shall be annualized by taking
the results of the three (3) fiscal quarters ending December 31, 2016, and
multiplying them by four (4) and dividing them by three (3).”

 

(b) The following definitions shall be added to Section 1.01 of the Original
Credit Agreement in appropriate alphabetical order:

 

“‘Available Commitment’ means, as of any date of determination thereof, the
difference between (a) the Commitment on such date, minus (b) the Outstanding
Amount of Loans and L/C Obligations on such date.

 

‘Equity Transaction’ means a transaction or series of transactions whereby one
or more financial institutions or other third parties who qualify as “accredited
investors” under applicable Securities Laws contributes capital to and receives
Equity Interests in Borrower, which (a) results in aggregate net cash proceeds
to Borrower of not less than $5,000,000, and (b) is on terms and conditions and
pursuant to documentation acceptable to Administrative Agent.

 

‘Excess Cash Flow’ means, with respect to Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP, as of any applicable date of
determination thereof for the calendar month then ended, an amount equal to (a)
cash receipts for such calendar month, minus (b) lease operating expenses paid
during such calendar month, minus (c) consolidated cash interest expense paid
during such calendar month, minus (d) amounts actually paid in cash in respect
of production taxes and total federal, state, local and foreign income, and
similar taxes for such calendar month, minus (e) the aggregate amount of all
regularly scheduled principal payments or prepayments of Indebtedness made by
Borrower and its Subsidiaries during such calendar month, minus (f) to the
extent permitted under Section 8.07, general and administrative expenses paid
during such calendar month.

 

THIRD AMENDMENT TO CREDIT AGREEMENT– Page 3

 

 

‘Excess Cash Flow Report’ means a report, in form and substance satisfactory to
Administrative Agent, certified by a Responsible Officer of Borrower setting
forth, in reasonable detail, the calculation of Excess Cash Flow for the
previous month and the basis therefor.

 

‘Leverage Ratio’ means, with respect to Borrower and its Subsidiaries on a
consolidated basis determined in accordance with GAAP, as of any applicable date
and for any applicable period of determination thereof, the ratio of (a) Total
Funded Debt on such date, to (b) EBITDAX for such period.

 

‘Liquidity’ means, with respect to Borrower and its Subsidiaries on a
consolidated basis as of any applicable date of determination thereof, the sum
of (a) unrestricted cash and Cash Equivalents, plus (b) the Available
Commitment.

 

‘Oasis’ means Oasis Petroleum North America LLC, a Delaware limited liability
company, and its successors and assigns and any future holder of the Oasis Note.

 

‘Oasis Acquisition Agreement’ means that certain Purchase and Sale Agreement,
dated as of January 31, 2016, between Borrower and Oasis, as the same has been
or may be amended, restated, supplemented or otherwise modified from time to
time.

 

‘Oasis Note’ means that certain Secured Promissory Note, dated as of the Third
Amendment Effective Date, executed and delivered by Borrower to Oasis in the
original principal amount of $4,000,000, as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with this
Agreement.

 

‘Oasis Subordination Agreement’ means that certain Subordination and
Intercreditor Agreement, dated as of the Third Amendment Effective Date, among
Administrative Agent, Borrower, and Oasis, as amended, restated, supplemented or
otherwise modified from time to time.

 

‘Senior Funded Debt’ means, as of any date of determination thereof, with
respect to Borrower and its Subsidiaries on a consolidated basis and without
duplication, all outstanding liabilities for borrowed money and other
interest-bearing liabilities, including current and long term liabilities owed
to Lenders but excluding Indebtedness evidenced by the Oasis Note.

 

‘Senior Leverage Ratio’ means, with respect to Borrower and its Subsidiaries on
a consolidated basis determined in accordance with GAAP, as of any applicable
date and for any applicable period of determination thereof, the ratio of (a)
Senior Funded Debt on such date, to (b) EBITDAX for such period.

 

THIRD AMENDMENT TO CREDIT AGREEMENT– Page 4

 

 

‘Third Amendment’ means that certain Third Amendment to Credit Agreement, dated
as of the Third Amendment Effective Date, among Borrower, the Lenders party
thereto, and Administrative Agent.

 

‘Third Amendment Effective Date’ means March 31, 2016.

 

‘Total Funded Debt’ means, as of any date of determination thereof, with respect
to Borrower and its Subsidiaries on a consolidated basis and without
duplication, all outstanding liabilities for borrowed money and other
interest-bearing liabilities, including current and long term liabilities owed
to Lenders.

 

‘Trailing Period Basis’ shall mean, with respect to the computation of any
amount or ratio as of any date of determination (such date referred to herein as
the ‘Test Date’), (a) if the Test Date occurs during the period beginning April
30, 2016 through and including March 31, 2017, a calculation based on the period
beginning April 1, 2016 through and including the Test Date, divided by the
number of calendar months within such period, multiplied by 12, and (b) if the
Test Date occurs after March 31, 2017, such amount or ratio shall be calculated
based on the 12-month period most recently ended.”

 

(c) Section 2.04(b) of the Original Credit Agreement shall be amended and
restated to read in its entirety as follows:

 

“(b) If for any reason (including without limitation those arising from the
Borrowing Base Reduction (as defined in the Third Amendment) or a reduction of
the Borrowing Base described in Section 4.05) the Total Outstandings at any time
exceed the total Commitments then in effect, Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; provided, however, that Borrower shall not be required to Cash
Collateralize the L/C Obligations pursuant to this Section 2.04(b) unless there
remains any such excess after the prepayment in full of the Loans; and provided
further, however, that the provisions of Section 4.06 shall control in the event
that the reason for such excess is due to the redetermination of the Borrowing
Base pursuant to Section 4.02 or Section 4.03.”

 

(d) Section 2.04 of the Original Credit Agreement shall be amended to add a new
Section 2.04(d) thereto to read in its entirety as follows:

 

“(d) On the fifteenth day of each calendar month, Borrower shall prepay the
Loans in an amount equal to 50% of Excess Cash Flow for the previous calendar
month, as reflected in the Excess Cash Flow Report. To effectuate the payment
required under this Section 2.04(d), Mutual of Omaha, as the depository bank,
shall, and Borrower hereby authorizes Mutual of Omaha to, initiate debit entries
to any and all accounts held by Borrower or any Subsidiary thereof with Mutual
of Omaha and to debit such payment amount from such accounts. This authorization
to initiate debit entries shall remain in full force and effect until
Administrative Agent terminates such arrangement. Borrower represents that
Borrower or a Subsidiary thereof, or any one or more of them, is and will be the
owner(s) of all funds in such accounts. Borrower, for itself and its
Subsidiaries, acknowledges that (i) such debit entries may cause an overdraft of
such accounts which may result in Mutual of Omaha’s refusal to honor items drawn
on such accounts until adequate deposits are made to such account, and (ii) if a
debit is not made the payment may be late or past due.”

 

THIRD AMENDMENT TO CREDIT AGREEMENT– Page 5

 

 

(e) The first sentence in Section 4.03 of the Original Credit Agreement shall be
amended to read in its entirety as follows:

 

“Special determinations of the Borrowing Base may be requested by Borrower not
more than one time per calendar year or by Administrative Agent at the direction
of Lenders not more than two times per calendar year.”

 

(f) Article V of the Original Credit Agreement shall be amended to add a new
Section 5.03 thereto to read in its entirety as follows:

 

“5.03. Additional Conditions to Credit Extensions after the Third Amendment
Effective Date. The obligation of each Lender to honor any Request for Credit
Extension (other than a Loan Notice requesting only a conversion of Loans to the
other Type, or a continuation of Eurodollar Rate Loans) at any time after the
Third Amendment Effective Date is further subject to the condition precedent
that after giving effect to the Credit Extension so requested, Borrower shall
have Liquidity of at least (a) during the period from the Third Amendment
Effective Date to December 30, 2016, $1,500,000, and (b) on December 31, 2016
and thereafter, $2,500,000, in each case as reflected in the most recent
financial statements of Borrower delivered to Administrative Agent pursuant to
Section 7.01(b).”

 

(g) Section 7.01(b) of the Original Credit Agreement shall be amended and
restated to read in its entirety as follows:

 

“(b) as soon as available, but in any event within thirty (30) days after the
end of each calendar month (commencing with the calendar month ended March 31,
2016), (i) (A) a consolidated balance sheet of Parent, Borrower and its
Subsidiaries as at the end of such calendar month, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for such
calendar month and for the portion of the fiscal year then ended, or (B) if
Parent owns any Material Non-Cash Assets and Administrative Agent so requires in
its sole discretion, a consolidated balance sheet of Borrower and its
Subsidiaries as at the end of such calendar month, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for such
calendar month and for the portion of the fiscal year then ended, and (ii) if
any Material Domestic Subsidiary exists, a consolidating balance sheet of
Borrower and its Material Domestic Subsidiaries as at the end of such calendar
month, and the related consolidating statements of income or operations,
shareholders' equity and cash flows for such calendar month and for the portion
of the fiscal year then ended, in each case, all in reasonable detail, such
consolidated statements delivered pursuant to clause (i) above to be certified
by a Responsible Officer of Borrower as fairly presenting the financial
condition, results of operations, shareholders' equity and cash flows of Parent
(if applicable), Borrower and its Subsidiaries in accordance with GAAP, subject
only to normal year-end audit adjustments and the absence of footnotes and such
consolidating statements delivered pursuant to clause (ii) above, if applicable,
to be certified by a Responsible Officer of Borrower to the effect that such
statements are fairly stated in all material respects when considered in
relation to the consolidated financial statements of Borrower and its
Subsidiaries.”

 

THIRD AMENDMENT TO CREDIT AGREEMENT– Page 6

 

 

(h) Section 7.02(d) of the Original Credit Agreement shall be amended by
deleting the phrase “forty-five (45) days” therein and inserting the phrase
“thirty (30) days” in lieu thereof.

 

(i) Section 7.02 of the Original Credit Agreement shall be amended by (i)
deleting the word “and” at the end of clause (k) thereof, (ii) renumbering
clause (l) as clause (n), and (iii) adding a new clause (l) and clause (m)
thereto to read in their entirety as follows:

 

“(l) within thirty (30) days after the end of each calendar month, a report
setting forth all accounts payable of Borrower as of the end of such calendar
month, such report to show the age of such accounts and such other information
as Administrative Agent shall reasonably request;

 

(m) within fifteen (15) days after the end of each calendar month, an Excess
Cash Flow Report; and”

 

(j) Section 7.12 of the Original Credit Agreement shall be amended and restated
to read in its entirety as follows:

 

7.12. Financial Covenants.

 

(a) Current Ratio. Maintain on a consolidated basis, as of the end of each
fiscal quarter of Borrower, a Current Ratio of at least 1.00 to 1.00.

 

(b) Leverage Ratio. Maintain a Leverage Ratio, for any Test Period ending during
the following periods, commencing with the Test Period ending March 31, 2016, of
not greater than the amount set forth below during the corresponding period
below:

 

Test Period Ending Maximum Ratio March 31, 2016 through September 30, 2016 5.75
to 1.00 December 31, 2016 5.00 to 1.00 March 31, 2017 through June 30, 2017 4.75
to 1.00 September 30, 2017 and thereafter 4.00 to 1.00

 

(c) Senior Leverage Ratio. Maintain a Senior Leverage Ratio, for any Test Period
ending during the following periods, commencing with the Test Period ending
March 31, 2016, of not greater than the amount set forth below during the
corresponding period below:

 

THIRD AMENDMENT TO CREDIT AGREEMENT– Page 7

 

 

Test Period Ending Maximum Ratio March 31, 2016 through June 30, 2016 4.25 to
1.00 September 30, 2016 4.00 to 1.00 December 31, 2016 and thereafter 3.75 to
1.00

 

(d) Interest Coverage Ratio. Maintain on a consolidated basis an Interest
Coverage Ratio of at least 2.50 to 1.00. This ratio shall be calculated at the
end of each Test Period.

 

(e) Minimum Liquidity. Maintain a minimum Liquidity, as of the end of each
calendar month, of not less than (i) for the period commencing with the calendar
month ending June 30, 2016 through December 30, 2016, $1,500,000 and (ii) for
the calendar month ending December 31, 2016 and each calendar month thereafter,
$2,500,000.

 

(k) Article VII of the Original Credit Agreement shall be amended by adding a
new Section 7.22 and Section 7.23 thereto to read in their entirety as follows:

 

“7.22. Required Swap Contracts. Within 5 Business Days of the Third Amendment
Effective Date, enter into and thereafter maintain at all times Swap Contracts
entered into for the purpose and effect of fixing prices on oil or gas expected,
as of any day, to be produced (a) which are for combined durations of not less
than twenty-four (24) months, (b) in which the aggregate monthly production
covered by all such contracts (determined, in the case of contracts that are not
settled on a monthly basis, by a monthly proration acceptable to Administrative
Agent) for any single month does not in the aggregate equal an amount which is
less than 75% of the aggregate Projected Oil and Gas Production anticipated to
be sold in the ordinary course of business for such month, and (c) which
otherwise comply with Section 8.09(a) and are otherwise on terms acceptable to
Administrative Agent in its sole discretion.

 

7.23 Capital Transactions.

 

(a) On or before August 31, 2016, Borrower shall deliver to Administrative Agent
a true and correct copy of Borrower’s prospectus or comparable disclosure
document for an Equity Transaction.

 

(b) On or before September 30, 2016, Borrower shall have received aggregate net
cash proceeds of not less than $5,000,000 from an Equity Transaction.”

 

(l) Section 8.01 of the Original Credit Agreement shall be amended by (i)
deleting the word “and” at the end of clause (n) thereof, (ii) adding the word
“and” at the end of clause (o) thereof, and (iii) adding a new clause (p)
thereto to read in its entirety as follows:

 

“(p) Liens securing the Oasis Note; provided, that (i) such Liens securing such
Indebtedness are subordinate to the Liens securing the Obligations, this
Agreement and the other Loan Documents pursuant to the Oasis Subordination
Agreement, and (ii) such Liens do not encumber any property of Borrower or any
Subsidiary other than the properties acquired under the Oasis Acquisition
Agreement;”

 

THIRD AMENDMENT TO CREDIT AGREEMENT– Page 8

 

 

(m) Section 8.03 of the Original Credit Agreement shall be amended by (i)
deleting the word “and” at the end of clause (f) thereof, (ii) deleting the
period at the end of clause (g) thereof and inserting “; and” in lieu thereof,
and (iii) adding a new clause (h) thereto to read in its entirety as follows:

 

“(h) Indebtedness owed to Oasis under the Oasis Note so long as the aggregate
amount thereof does not exceed $4,000,000, plus accrued but unpaid interest in
accordance with the Oasis Note as in effect on the Third Amendment Effective
Date; provided, however, that such Indebtedness is subordinate to the
Obligations under this Agreement and the other Loan Documents pursuant to the
Oasis Subordination Agreement.”

 

(n) Section 8.07 of the Original Credit Agreement shall be amended and restated
to read in its entirety as follows:

 

“8.07. Limitation on General and Administrative Expenses. Permit Borrower's
general and administrative expenses for the operation of all of its oil and gas
properties (either direct or payable to outside operators or agents) as
determined in accordance with GAAP and Council of Petroleum Accountants
Societies procedures, and all salaries, bonuses, withdrawals, distributions,
consulting and professional fees and other forms of compensation, and all other
overhead, to exceed $3,000,000 in the aggregate in any 12-month period. For
purposes of this Section 8.07, general and administrative expenses shall be
calculated on a Trailing Period Basis.”

 

(o) Section 8.12 of the Original Credit Agreement shall be amended and restated
to read in its entirety as follows:

 

“8.12. Burdensome Agreements. Enter into any Contractual Obligation (other than
this Agreement or any other Loan Document) that (a) limits the ability (i) of
any Subsidiary to make Restricted Payments to Borrower or any Guarantor or to
otherwise transfer property to Borrower or any Guarantor, (ii) of any Subsidiary
to Guarantee the Indebtedness of Borrower or (iii) of Borrower or any Subsidiary
to create, incur, assume or suffer to exist Liens on property of such Person; or
(b) requires the grant of a Lien to secure an obligation of such Person if a
Lien is granted to secure another obligation of such Person; provided, however,
that the foregoing clause (a)(iii) shall not prohibit any negative pledge
incurred or provided (x) in favor of any holder of Indebtedness permitted under
Section 8.03(g) solely to the extent any such negative pledge relates to the
property financed by or the subject of such Indebtedness or (y) in favor of
Oasis solely to the extent any such negative pledge relates to the property
acquired pursuant to the Oasis Acquisition Agreement and does not prohibit the
grant of a Lien in favor of Administrative Agent.”

 

(p) Article VIII of the Original Credit Agreement shall be amended by adding a
new Section 8.18 thereto to read in its entirety as follows:

 

THIRD AMENDMENT TO CREDIT AGREEMENT– Page 9

 

 

“8.18. Payment of Principal or Interest or Amendment of Subordinated Debt.

 

(a) Make or offer to make any optional or voluntary redemption of or otherwise
optionally or voluntarily redeem (whether in whole or in part), or make any
principal or interest payment on, any Indebtedness evidenced by the Oasis Note,
except as permitted under the Oasis Subordination Agreement and except that, so
long as no Default or Event of Default exists or would result therefrom,
Borrower may make optional prepayments of the Indebtedness under the Oasis Note;
or

 

(b) Amend, modify, waive or otherwise change, consent or agree to any amendment,
modification, waiver or other change to, any of the terms of any document
evidencing or executed in connection with the Indebtedness evidenced by the
Oasis Note unless permitted pursuant to the terms of the Oasis Subordination
Agreement.”

 

(q) Section 9.01 of the Original Credit Agreement is hereby amended by (i)
deleting the word “or” at the end of clause (k) thereof, (ii) deleting the
period after the end of clause (l) thereof and inserting “; or” in lieu thereof,
and (iii) adding a new clause (m) thereto to read in its entirety as follows:

 

“(m) Oasis Subordination Agreement. The Oasis Subordination Agreement shall for
any reason, except to the extent permitted by the terms thereof, cease to be in
full force and effect and valid, binding and enforceable in accordance with its
terms against Borrower, any other party thereto (other than Administrative
Agent) or the holder of the Indebtedness subordinated thereby or shall be
repudiated by any of them, or cause the payment of the Indebtedness under the
Oasis Note to be senior or pari passu in right to the payment of the Obligations
under this Agreement, or any payment is made by Borrower or any other Loan Party
in violation of the terms of the Oasis Subordination Agreement.”

 

(r) Schedule 2.01 attached to the Original Credit Agreement is hereby replaced
with Schedule 2.01 attached to this Amendment.

 

(s) Exhibit C attached to the Original Credit Agreement is hereby replaced with
Exhibit C attached to this Amendment.

 

3. Borrowing Base.

 

(a) As of the Effective Date, the Borrowing Base is hereby increased to
$30,500,000, and the Monthly Reduction Amount is hereby reaffirmed at $0.

 

(b) The Borrowing Base shall automatically reduce to $20,500,000 on June 30,
2016 (the “Borrowing Base Reduction”); provided that the Borrowing Base
Reduction shall not count against the number of special determinations permitted
under Section 4.03 of the Credit Agreement; and provided further that the
Borrowing Base Reduction shall be in addition to the scheduled redeterminations
of the Borrowing Base pursuant to Section 4.02 of the Credit Agreement,
regardless of whether any scheduled redetermination occurs prior to,
concurrently with or after the Borrowing Base Reduction.

 

THIRD AMENDMENT TO CREDIT AGREEMENT– Page 10

 

 

(c) For the avoidance of doubt, the parties hereto agree that the increase of
the Borrowing Base pursuant to Section 3(a) hereof shall constitute the April
30, 2016 scheduled redetermination of the Borrowing Base pursuant to Section
4.02 of the Credit Agreement.

 

(d) The Borrowing Base, as increased, and the Monthly Reduction Amount, as
reaffirmed, will remain in effect until next adjusted but pursuant to the
provisions of Article IV of the Original Credit Agreement.

 

4. Conditions Precedent. The obligations, agreements and waivers of Lenders as
set forth in this Amendment are subject to the satisfaction (in the opinion of
Administrative Agent), unless waived in writing by Administrative Agent, of each
of the following conditions (and upon such satisfaction, this Amendment shall be
deemed to be effective as of the Effective Date):

 

(a) Third Amendment to Credit Agreement. This Amendment shall be in full force
and effect.

 

(b) Oasis Acquisition Documents. Administrative Agent shall have received (i) a
true and complete executed copy of the Oasis Acquisition Agreement and each of
the other acquisition documents for such transaction (the “Oasis Acquisition
Documents”); (ii) original counterparts or copies, certified as true and
complete, of the assignments, deeds and leases for all of the properties subject
to the Oasis Acquisition Documents; and (iii) such other related documents and
information as Administrative Agent shall have reasonably requested with respect
to the transaction contemplated by the Oasis Acquisition Documents.

 

(c) Acquisition Certificate. Administrative Agent shall have received a
certificate of Borrower certifying (i) that Borrower is concurrently
consummating the acquisition contemplated by the Oasis Acquisition Documents and
all material conditions precedent thereto have been satisfied in all material
respects by all of the parties thereto; (ii) as to the amount of the final
purchase price for the properties subject to the Oasis Acquisition Documents
after giving effect to all adjustments as of the closing date as contemplated by
the Oasis Acquisition Documents and specifying, by category, the amount of such
adjustment; (iii) that attached thereto is a true and complete list of all of
the properties subject to the Oasis Acquisition Documents which are being
acquired by Borrower; (iv) that attached thereto is a true and complete list of
properties subject to the Oasis Acquisition Documents which have been excluded
from the acquisition pursuant to the terms of the Oasis Acquisition Documents,
specifying with respect thereto the basis of exclusion as (1) title defect, (2)
preferential purchase right, (3) environmental, (4) casualty loss, or (5) other
(which is to be explained); (v) that attached thereto is a true and complete
list of all properties subject to the Oasis Acquisition Documents for which any
seller has elected to cure a title defect, specifying the nature of that title
defect and the time frame within which it is expected to be cured; (vi) that
attached thereto is a true and complete list of all properties subject to the
Oasis Acquisition Documents for which any seller has elected to remediate an
adverse environmental condition; and (vii) that attached thereto is a true and
complete list of all properties subject to the Oasis Acquisition Documents which
are currently pending final decision by a third party regarding purchase of such
property in accordance with any preferential right.

 

(d) Oil and Gas Mortgages. Borrower shall have mortgaged to Administrative Agent
for the ratable benefit of the Secured Parties the properties acquired by the
Oasis Acquisition Documents pursuant to the terms of one or more Oil and Gas
Mortgages. In connection therewith, Administrative Agent shall have received
evidence satisfactory to it that all Liens against such properties have been
released or terminated and that arrangements satisfactory to Administrative
Agent have been made for recording and filing of such releases. In addition, if
requested by Administrative Agent, Borrower shall have provided Administrative
Agent with a Property Certificate and a Reconciliation Schedule with respect to
the properties being acquired by the Oasis Acquisition Documents.

 

THIRD AMENDMENT TO CREDIT AGREEMENT– Page 11

 

 

(e) Title Information. Borrower shall have delivered to Administrative Agent
title information and data reasonably acceptable to Administrative Agent
relating to title to the Mineral Interests in the properties being acquired
pursuant to the Oasis Acquisition Documents. These title assurances shall
include a Title Indemnity Agreement, and such post-closing title work, if any,
as Administrative Agent may request.

 

(f) Oasis Subordination Agreement. The Oasis Subordination Agreement shall have
been duly executed by each of the parties thereto, and shall be in full force
and effect.

 

(g) Legal Opinion. Administrative Agent shall have received an opinion of
counsel to Borrower acceptable to Administrative Agent, addressed to
Administrative Agent and each Lender, as to the matters set forth in Exhibit E
to the Original Credit Agreement and such other matters concerning Borrower,
this Amendment, and the other Loan Documents as Administrative Agent may request
and in form and substance satisfactory to Administrative Agent.

 

(h) Authorization Certificate. Borrower shall have executed and delivered to
Administrative Agent a certificate (the “Authorization Certificate”), in form
and substance satisfactory to Administrative Agent, authorizing the execution,
delivery and performance by Borrower of the Modification Papers.

 

(i) Borrowing Base Increase Fee. Borrower shall have paid to Administrative
Agent a fee of $115,000.

 

(j) Fees and Expenses. Administrative Agent shall have received payment of all
out-of-pocket fees and expenses (including reasonable attorneys’ fees and
expenses) incurred by Administrative Agent in connection with the preparation,
negotiation and execution of the Modification Papers.

 

5. Release. To induce the Administrative Agent and the Lenders to enter into
this Amendment, each of Borrower and Guarantors warrants and represents that as
of the Effective Date, there are no claims or offsets or defenses or
counterclaims to the obligations of such Person under the Loan Documents to
which such Person is a party, and in accordance therewith, each of Borrower and
Guarantors:

 

(a) Waives any and all such claims, offsets, defenses or counterclaims, whether
known or unknown, arising under the Loan Documents prior to the Effective Date;
and

 

(b) Releases and discharges the Administrative Agent and the Lenders and their
officers, directors, employees, agents, shareholders, affiliates and attorneys
(the “Released Parties”) from any and all obligations, indebtedness,
liabilities, claims, rights, causes of action or other demands whatsoever,
whether known or unknown, suspected or unsuspected, in law or equity, which such
Person ever had, now have or claim to have or may have against any Released
Parties arising prior to the Effective Date and from or in connection with the
Loan Documents or the transactions contemplated thereby, except those resulting
from the gross negligence or willful misconduct of the Released Parties.

 

THIRD AMENDMENT TO CREDIT AGREEMENT– Page 12

 

 

6. Certain Representations. Each of Borrower and Guarantors represents and
warrants that, as of the Effective Date: (a) each Loan Party has full power and
authority to execute the Modification Papers to which it is a party and such
Modification Papers constitute the legal, valid and binding obligation of such
Loan Party enforceable in accordance with their terms, except as enforceability
may be limited by general principles of equity and applicable bankruptcy,
insolvency, reorganization, moratorium, and other similar laws affecting the
enforcement of creditors’ rights generally; and (b) no authorization, approval,
consent or other action by, notice to, or filing with, any Governmental
Authority or other Person is required for the execution, delivery and
performance by each Loan Party thereof. In addition, each of Borrower and
Guarantors represents that after giving effect to this Amendment all
representations and warranties contained in the Original Credit Agreement and
the other Loan Documents to which such Person is a party are true and correct in
all material respects (provided that any such representations or warranties that
are, by their terms, are requalified by reference to materiality shall be true
and correct without regard to such materiality standard) on and as of the
Effective Date as if made on and as of such date except to the extent that any
such representation or warranty expressly relates solely to an earlier date, in
which case such representation or warranty is true and correct in all material
respects (or true and correct without regard to such materiality standard, as
applicable) as of such earlier date.

 

7. No Further Amendments. Except as previously amended in writing or as amended
hereby, the Original Credit Agreement shall remain unchanged and all provisions
shall remain fully effective between the parties hereto.

 

8. Acknowledgments and Agreements. Each of Borrower and Guarantors (a)
acknowledges that on the date hereof all outstanding Obligations are payable in
accordance with their terms, and (b) waives any defense, offset, counterclaim or
recoupment with respect thereto. Borrower, Guarantors, Administrative Agent, L/C
Issuer and each Lender do hereby adopt, ratify and confirm the Original Credit
Agreement, as previously amended in writing and as amended hereby, and
acknowledge and agree that the Original Credit Agreement, as previously amended
in writing and as amended hereby, is and remains in full force and effect. Each
of Borrower and Guarantors acknowledges and agrees that its liabilities and
obligations under the Original Credit Agreement, as previously amended in
writing and as amended hereby, and under the other Loan Documents, are not
impaired in any respect by this Amendment. Any breach of any representations,
warranties and covenants under this Amendment shall be Default or an Event of
Default, as applicable, under the Original Credit Agreement.

 

9. Limitation on Agreements. The modifications set forth herein are limited
precisely as written and shall not be deemed (a) to be a consent under or a
waiver of or an amendment to any other term or condition in the Original Credit
Agreement or any of the Loan Documents, or (b) to prejudice any right or rights
that Administrative Agent now has or may have in the future under or in
connection with the Original Credit Agreement and the other Loan Documents, each
as amended hereby, or any of the other documents referred to herein or therein.
The Modification Papers shall constitute Loan Documents for all purposes.

 

10. Confirmation of Security. Each of Borrower and Guarantors hereby confirms
and agrees that all of the Collateral Documents that presently secure the
Obligations shall continue to secure, in the same manner and to the same extent
provided therein, the payment and performance of the Obligations as described in
the Original Credit Agreement as modified by this Amendment.

 

11. Counterparts. This Amendment may be executed in any number of counterparts,
each of which when executed and delivered shall be deemed an original, but all
of which constitute one instrument. In making proof of this Amendment, it shall
not be necessary to produce or account for more than one counterpart thereof
signed by each of the parties hereto. Delivery of an executed counterpart of
this Amendment by facsimile or other electronic means shall be deemed effective
as delivery of a manually executed counterpart.

 

THIRD AMENDMENT TO CREDIT AGREEMENT– Page 13

 

 

12. Incorporation of Certain Provisions by Reference. The provisions of
Section 11.15 of the Original Credit Agreement captioned “Governing Law,
Jurisdiction; Etc.” and Section 11.16 of the Original Credit Agreement captioned
“Waiver of Right to Trial by Jury” are incorporated herein by reference for all
purposes.

 

13. Entirety, Etc. This Amendment and the other Modification Papers and all of
the other Loan Documents embody the entire agreement between the parties. THIS
AMENDMENT AND ALL OF THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

 

[This space is left intentionally blank. Signature pages follow.]

 

THIRD AMENDMENT TO CREDIT AGREEMENT– Page 14

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment to be
effective as of the date and year first above written.

 

  BORROWER:       SAMSON OIL AND GAS USA, INC.           By: /s/ Robyn Lamont  
  Robyn Lamont     Vice President and Chief Financial Officer      

 

  GUARANTORS:       SAMSON OIL & GAS LIMITED           By: /s/ Robyn Lamont    
Robyn Lamont     Chief Financial Officer      

 

  SAMSON OIL AND GAS USA MONTANA, INC.           By: /s/ Robyn Lamont     Robyn
Lamont     Vice President and Chief Financial Officer      

THIRD AMENDMENT TO CREDIT AGREEMENT– Signature Page

 

 

 

  ADMINISTRATIVE AGENT:       MUTUAL OF OMAHA BANK,   as Administrative Agent  
        By: /s/ Keith Miller   Name: Keith Miller   Title: Senior Energy Lender
     

 

  LENDERS:       MUTUAL OF OMAHA BANK           By: /s/ Keith Miller   Name:
Keith Miller   Title: Senior Energy Lender      

 

 

THIRD AMENDMENT TO CREDIT AGREEMENT– Signature Page

 

 

SCHEDULE 2.01

APPLICABLE PERCENTAGES, MAXIMUM CREDIT AMOUNTS,
and ALLOCATIONS OF INITIAL BORROWING BASE

 

Lender Applicable
Percentage Maximum Credit
Amount Allocation of
Borrowing Base Mutual of Omaha Bank 100.000000000% $50,000,000 $30,500,000      
  Total 100.000000000% $50,000,000 $30,500,000

 

 

SCHEDULE 2.01 – Solo Page

 

 

EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE

 

Financial Statement Date: __________, 201__

 

To: Mutual of Omaha Bank, as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of January 27, 2014
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the "Agreement"; the terms defined therein being used herein
as therein defined), among Samson Oil and Gas USA, Inc., a Colorado corporation
("Borrower"), the Lenders from time to time party thereto, and Mutual of Omaha
Bank, as Administrative Agent and L/C Issuer.

 

The undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the of Borrower, and that, as such, he/she is authorized to execute
and deliver this Compliance Certificate (this "Certificate") to Administrative
Agent on the behalf of Borrower, and that:

 

[Use following paragraph 1 for fiscal year-end financial statements]

 

1. Attached hereto as Schedule 1 are the year-end audited financial statements
required by Section 7.01(a) of the Agreement for the fiscal year of Borrower
ended as of the above date, together with the report and opinion of an
independent certified public accountant required by such section.

 

[Use following paragraph 1 for month-end financial statements]

 

1. Attached hereto as Schedule 1 are the unaudited financial statements required
by Section 7.01(b) of the Agreement for the calendar month ended as of the above
date. Such financial statements fairly present the financial condition, results
of operations and cash flows of Borrower and its Subsidiaries in accordance with
GAAP as at such date and for such period, subject only to normal year-end audit
adjustments and the absence of footnotes.

 

2. The undersigned has reviewed and is familiar with the terms of the Agreement
and has made, or has caused to be made under his/her supervision, a detailed
review of the transactions and condition (financial or otherwise) of Borrower
during the accounting period covered by the attached financial statements.

 

3. A review of the activities of Borrower during such fiscal period has been
made under the supervision of the undersigned with a view to determining whether
during such period Borrower performed and observed all its Obligations under the
Loan Documents, and

 

[select one:]

 

[to the knowledge of the undersigned during such period, Borrower performed and
observed each covenant and condition of the Loan Documents applicable to it, and
no Default has occurred and is continuing.]

 

EXHIBIT C – Page 1

 

 

--or--

 

[the following covenants or conditions have not been performed or observed and
the following is a list of each such Default and its nature and status:]

 

4. The representations and warranties of Borrower contained in Article VI of the
Agreement, and/or any representations and warranties of Borrower or any other
Loan Party that are contained in any of the Loan Documents, are true and correct
on and as of the date hereof, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this
Certificate, the representations and warranties contained in subsections (a),
(b) and (c) of Section 6.05 of the Agreement shall be deemed to refer to the
most recent statements furnished pursuant to clauses (a) and (b), respectively,
of Section 7.01 of the Agreement, including the statements in connection with
which this Certificate is delivered.

 

5. The financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date of this Certificate.

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
___________________, 20___.

 

 

 

 

  SAMSON OIL AND GAS USA, INC.           By:     Name:     Title:        

 

 

EXHIBIT C – Page 2

 

 

For the Month/Year ended ___________________ ("Statement Date")

 

SCHEDULE 2
to the Compliance Certificate
($ in 000's)

 

I. Section 7.12(a) – Current Ratio.1     A. Current Assets (including Borrowing
Base availability, but excluding any non-cash mark-to-market value associated
with Swap Contracts pursuant to ASC 815): $                   B. Current
Liabilities (excluding current maturities of the Obligations and any non-cash
mark-to-market liability associated with Swap Contracts pursuant to ASC 815):
$                   C. Current Ratio (Line I.A ÷ Line I.B): ________ to 1.00  
Minimum Required: 1.00 to 1.00 II. Section 7.12(b) – Leverage Ratio.2     A.
Total Funded Debt (all outstanding liabilities for borrowed money
plus other interest-bearing liabilities, including current and long-term
liabilities): $                   B.   EBITDAX       1. net income:
$                     2. less non-cash revenue or expense associated with Swap
Contracts from ASC 815: ($                )     3. less extraordinary or
non-recurring gains and other extraordinary or non-recurring income:
($                )     4. plus consolidated interest expense: $                
    5. plus income taxes: $                     6. plus depletion, depreciation
and amortization: $                     7. plus other non-cash charges
$                     8. plus exploration charges $                     9. Total
EBITDAX: $                   C. Leverage Ratio (Line II.A ÷ Line II.B.9):
________ to 1.00

 

 

1 For quarterly Compliance Certificate.

2 For quarterly Compliance Certificate.

 

EXHIBIT C – Page 3

 

  

  Maximum Permitted:     Test Period ending March 31, 2016 through September 30,
2016 5.75 to 1.00   Test Period ending December 31, 2016 5.00 to 1.00   Test
Period ending March 31, 2017 through June 30, 2017 4.75 to 1.00   Test Period
ending September 30, 2017 and thereafter 4.00 to 1.00 III. Section 7.12(c) –
Senior Leverage Ratio.3     A. Senior Funded Debt (all outstanding liabilities
for borrowed money
plus other interest-bearing liabilities, including current and long-term
liabilities, minus Indebtedness evidenced by the Oasis Note): $                
  B. EBITDAX (Line II.B.9 above): $                   C. Senior Leverage Ratio
(Line III.A ÷ Line III. B) ________ to 1.00   Maximum Permitted:     Test Period
ending March 31, 2016 through June 30, 2016 4.25 to 1.00   Test Period ending
September 30, 2016 4.00 to 1.00   Test Period ending December 31, 2016 and
thereafter 3.75 to 1.00 IV. Section 7.12(d) – Interest Coverage Ratio.4     A.
EBITDAX (Line II.B.9 above): $                   B. Cash interest expense:
$                   C. Interest Coverage Ratio (Line IV.A ÷ Line IV.B): ________
to 1.00   Minimum Required: 2.50 to 1.00 V. Section 7.12(e) – Liquidity.5     A.
Unrestricted cash and Cash Equivalents: $                   B. Available
Commitment (Commitment, less Outstanding Amount of Loans and L/C Obligations):
$                   C. Liquidity (Line V.A. + Line V.B.): $                  
Minimum Required:     Calendar month ending June 30, 2016 through December 30,
2016: $1,500,000   Calendar month ending December 31, 2016 and thereafter
$2,500,000 VI. Section 8.07 – General and Administrative Expenses6     A.
General and administrative expenses (calculated on a Trailing Period Basis):
$                   Maximum Permitted: $3,000,000

  

 

3 For quarterly Compliance Certificate.

4 For quarterly Compliance Certificate.

5 For monthly Compliance Certificate.

6 For monthly Compliance Certificate.

 

 

EXHIBIT C – Page 4