Exhibit 10.3

 

PARENT COMPANY GUARANTEE

 

THIS DEED is made the 31st day of December 2012

 

BETWEEN:

 

1.                                               Tullow Oil plc, a company
incorporated in England whose registered office is at 9 Chiswick Park, 566
Chiswick High Road, London, W4 5XT (the “Parent”).

 

2.                                               SCS Corporation Ltd a company
incorporated under the laws of the Cayman Islands, and having its principal
place of business at 12012 Wickchester Lane, Suite 475, Houston, TX 77079, USA
(“Farmor”)

 

WHEREAS:

 

(A)                                        By a Farm-out Agreement dated 20
November 2012 and made between (1) Farmor and (2) Tullow Guinea Limited
(hereinafter referred to as “Farmee”), a company established in England and
having its principal offices at 9 Chiswick Park, 566 Chiswick High Road, London,
England (the “Agreement”), whereupon the Farmor has agreed, subject to the terms
set out therein, to transfer certain interests to the Farmee as more fully
described in the Agreement.

 

(B)                                        As security for payment by the Farmee
under the Agreement of the Carried Costs (as such term is defined in the
Agreement) and, if and when applicable, the Additional Carried Costs (as such
term is defined in the Agreement) under the Agreement the Parent has agreed to
guarantee the due and proper performance of such payment obligations as set out
in this Deed.

 

NOW IT IS HEREBY AGREED as follows:

 

1.                                                  DEFINITIONS AND
INTERPRETATION

 

1.1                                        Words and expressions defined in the
Agreement shall, unless otherwise expressly provided herein or the context
otherwise requires, have the same meanings when used in this Deed, including the
Recitals.

 

1.2                                        In this Deed, “person” includes a
corporate entity and any body of persons, corporate or unincorporate and any
reference to the Farmee or Parent shall be construed so as to include its
successors, permitted assigns and permitted transferees, provided that
references to the Farmor shall be to the Farmor only and shall exclude
successors, assigns and transferees.

 

1.3                                        References to any agreement or
document include the same as amended, varied, supplemented or replaced from time
to time.

 

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1.4                                        Clause, appendix and paragraph
headings shall not affect the interpretation of this Deed.

 

1.5                                        A person who is not a party to this
Deed may not enforce, or otherwise have the benefit of, any provision of this
Deed under the Contracts (Rights of Third Parties) Act 1999.

 

1.6                                        “LIBOR” means the one (1) month term,
London Interbank Offered Rate (LIBOR rate or, in the case of such rate ceasing
to be determined or being replaced, such replacement rate commonly referenced or
utilised in accordance with generally accepted market practice for the
determination of the London interbank offered rate for deposits in US dollars as
determined by the Parties, acting reasonably) for US dollar deposits, as
published in London by the Financial Times or, if not published, then by The
Wall Street Journal (or, if not published by either of such sources, as
published by such other reference source selected by the Parties, acting
reasonably), applicable on the first Business Day prior to the due date of
payment and thereafter on the first Business Day of each succeeding calendar
month.

 

2.                                               GUARANTEE

 

2.1                                        In consideration of the Farmor
entering into the Agreement, the Parent hereby irrevocably and unconditionally
guarantees upon demand therefor and at any time and from time to time as a
continuing obligation the due and punctual payment to the Farmor (or on behalf
of the Farmor) by the Farmee of all amounts (whether actual or contingent
together with interest on such sum accrued both before and after the date of
demand until the date of payment) which the Farmee is or shall become obligated
to pay to Farmor pursuant to Clause 4.1(B) (the “Carried Costs”) and if
applicable Clause 4.l1(C) of the Agreement (the “Additional Carried Costs” and
together, the “Guaranteed Obligations”).

 

2.2                                        The Parent as a primary obligor and
as a separate and independent obligation to its obligations and liabilities
under Clause 2.1 agrees to indemnify the Farmor immediately on demand against
any cost, expense, loss or liability suffered or incurred by the Farmor as a
result of: (i) any failure of the Farmee to pay, perform or discharge any of the
Guaranteed Obligations; or (ii) any Guaranteed Obligation being or becoming
unenforceable, invalid or illegal in whole or in part (for any reason and
whether or not known by any party or any other person).

 

2.3                                        Subject to Clause 8.1, in no event
shall the Parent’s liability for the Guaranteed Obligations exceed that of the
Farmee pursuant to Sections 4.1(B) or 4.1(C) of the Agreement (or the liability
the Farmee would have had if the Guaranteed Obligations had been fully
enforceable in accordance with their terms).

 

2.4                                        Any claim or demand made under this
Deed shall be made in writing and shall be accompanied by a statement setting
out in reasonable detail the calculation of such sums together with any
supporting documentation reasonably required to assess such claim or demand. 
The amount of monies which the Parent is at any time liable to pay to Farmor
under the Agreement for the purposes of this Deed shall be calculated in
accordance with the terms of the Agreement.  Otherwise the Parent will pay all
monies due from it under this Deed free and clear of and without deduction of,
or account of, any other right of set-off or counterclaim and without deduction
or withholding of or in respect of any tax.

 

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3.                                               CONTINUING SECURITY

 

3.1                                        This Deed shall be a continuing
guarantee which shall be and continue in full force and effect irrespective of,
and neither the rights of Farmor nor the obligations of the Parent under this
Deed shall be discharged, impaired or otherwise affected by reason of, any act,
omission, matter or thing which, but for this provision, might operate to
reduce, release or prejudice any of the obligations or liabilities of the
Parent, whether in whole or in part, under this Deed, including (but without
limitation), and whether or not known to the Parent, Farmor or any other person,
by:

 

3.1.1                             any waiver, release, time or indulgence
granted to, or composition with, the Farmee or any other person; or

 

3.1.2                             any amendment of, or the making of any
supplement to, the Agreement; or

 

3.1.3                             the taking, variation, compromise, renewal,
enforcement, realisation or release of, or refusal or neglect to take, perfect,
release or enforce, any rights or remedies against, or granted by, the Farmee or
any other person; or

 

3.1.4                             any incapacity, disability, or defect in
powers of the Farmee or any other person, or any irregular exercise thereof by,
or lack of authority of, any person purporting to act on behalf of the Farmee or
such other person; or

 

3.1.5                             any illegality, invalidity, avoidance or
unenforceability on any grounds whatsoever of, or of any obligations of the
Farmee or any other person under, the Agreement or any other document or
security supplemental or ancillary to the Agreement; or

 

3.1.6                             the death, liquidation, administration,
insolvency, amalgamation, reorganisation, striking off or dissolution or other
cessation of existence, or any change in the constitution, place of
incorporation, name or style, of the Farmor or the Farmee or any other person;

 

3.1.7                             any assignment by the Farmee of its rights and
obligations pursuant to the Agreement; or

 

3.1.8                             the existence of any claim, set-off, or other
rights which the Parent may have at any time against the Farmor or any other
person, or which the Farmor may have at any time against the Parent or the
Farmee.

 

4.                                               DISCHARGE TO BE CONDITIONAL

 

4.1                                        Any release, discharge or settlement
between the Parent and the Farmor shall be conditional upon no security,
disposition or payment to the Farmor by the Farmee, the Parent or any other
person in respect of the Guaranteed Obligations being void, set aside or ordered
to be refunded pursuant to any enactment or law in relation to bankruptcy,
liquidation or insolvency (or its equivalent in any relevant jurisdiction) or
for any reason whatever, and if any such security, disposition or payment is
avoided, set aside or ordered to be refunded the Farmor shall be entitled to
enforce this Deed as if such release, discharge or settlement had not occurred
and any such payment had not been made.

 

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5.                                               ENFORCEMENT

 

5.1                                        The Farmor shall not be obliged
before taking steps to enforce this Deed:

 

5.1.1                             to take any legal action or obtain judgement
in any court or any arbitral award against the Farmee or any other person;

 

5.1.2                             to make or file any claim in any bankruptcy or
liquidation (or its equivalent in any relevant jurisdiction) of the Farmee or of
any other person;

 

5.1.3                             to make, enforce or seek to enforce any claim
against the Farmee or any other person under any security or other document,
agreement or arrangement; or

 

5.1.4                             to enforce against and/or realise (or seek so
to do) any security that it may have in respect of all or any part of the
Guaranteed Obligations.

 

6.                                               REPRESENTATIONS AND WARRANTIES

 

6.1                                        The Parent hereby represents and
warrants to the Farmor that:

 

6.1.1                             It has received a copy of the Agreement and is
familiar with and has approved its terms and conditions;

 

6.1.2                             the Parent is a company incorporated under the
laws of England and possesses the capacity to sue and be sued in its own name
and has the power to carry on its business and to own its property and other
assets;

 

6.1.3                             the Parent has and will have power to execute,
deliver and perform its obligations under this Deed and to carry out the
transactions contemplated hereby, and all necessary corporate and other action
has been taken to authorise the execution, delivery and performance of the same;

 

6.1.4                             the obligations of the Parent under this Deed
constitute its legal, valid and binding obligations and are in full force and
effect and enforceable in accordance with their terms;

 

6.1.5                             the execution, delivery and performance by the
Parent of this Deed does not and will not:

 

(a)                                          contravene any applicable law or
regulation or any order of any competent governmental or other official
authority, body or agency or any judgement;

 

(b)                                          conflict with, or result in any
breach of any of the terms of, or constitute a default under, any agreement or
other instrument to which the Parent is a party or any licence or other
authorisation to which the Parent is subject or by which the Parent or any of
its property is bound;

 

(c)                                           contravene or conflict with the
provisions of the Parent’s Memorandum and Articles of Association or equivalent
constitutional documents under its jurisdiction of incorporation;

 

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6.1.6                             no winding-up, dissolution, insolvency or
administrative proceedings are in effect or taking place, pending, or to the
Parent’s knowledge, threatened against the Parent or any of its assets.

 

7.                                               CONTINUING AND ADDITIONAL
SECURITY

 

7.1                                        This Deed is a continuing security
and shall remain in full force and effect until all the Guaranteed Obligations
have been discharged or satisfied in full, notwithstanding the administration,
liquidation, insolvency, bankruptcy, striking-off or other incapacity of the
Farmee or any other person, or any change in the constitution, the articles of
association or by-laws of the Farmee or of the Parent or of any other person or
in the name or style of any of them or any settlement of account or other matter
whatsoever; provided that the Parent may request Farmor to grant a release from
this Deed prior to its termination if the Farmee assigns all of its rights and
obligations under and in accordance with the Agreement, to a third party and
such third party, is of financial standing acceptable to the Farmor (in its sole
judgement) and, if required by the Farmor, procures that an Affiliate acceptable
to the Farmor (in its sole judgement) enters into a guarantee with the Farmee in
the same form ‘mutatis mutandis’ as this Deed.

 

7.2                                        This Deed is in addition to and shall
not merge with or otherwise prejudice or affect or be prejudiced by any other
right, remedy, guarantee, indemnity or security and may be enforced without
first having recourse to the same or any other bill, note, mortgage, charge,
pledge or lien now or hereafter held by or available to the Farmor.

 

8.                                               PAYMENT AND DEFAULT INTEREST

 

8.1                                        Where, in this Deed, any date is
specified as being, or is required to be, the due date for payment and payment
is not made on that date, interest shall be paid on the amount outstanding on a
daily basis (after as well as before any judgement) from the start of the due
date to the end of the day preceding the date of actual payment at the rate of
two percent (2%) plus LIBOR, compounded monthly

 

9.                                               ASSIGNMENTS AND TRANSFERS

 

9.1                                        This Deed shall be binding upon the
Parent and its successors and permitted assigns and shall inure to the benefit
of the Farmor only.

 

9.2                                        Neither Party may assign or transfer
all or any of its rights, benefits or obligations under this Deed without the
prior written consent of the other Party

 

10.                                        MISCELLANEOUS

 

10.1                                 No delay or omission by the Farmor to
exercise any right, power or remedy vested in it under this Deed or by law shall
impair such right, power or remedy, or be construed as a waiver of, or as an
acquiescence in, any default by the Parent.  If the Farmor on any occasion
agrees to waive any such right, power or remedy, such waiver shall not in any
way preclude or impair any further exercise thereof or the exercise of any other
right, power or remedy.

 

10.2                                Any waiver by the Farmor of any provision of
this Deed, and any consent or approval given by the Farmor, shall only be
effective if given in writing and then only strictly for the purpose and

 

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upon the terms for which it is given. No waiver shall constitute a continuing
waiver unless expressly provided.

 

10.3                                 This Deed may not be amended or varied
orally but only in writing executed by each of the parties hereto.

 

10.4                                 The rights, powers and remedies of the
Farmor contained in this Deed are cumulative and not exclusive of each other nor
of any other rights, powers or remedies conferred by law, and may be exercised
from time to time and as often as the Farmor may think fit.

 

10.5                                 If at any time one or more of the
provisions of this Deed is or becomes invalid, illegal or unenforceable in any
respect under any law by which it may be governed or affected, the validity,
legality and enforceability of the remaining provisions shall not be in any way
affected or impaired as a result.

 

10.6                                 This Deed may be executed in any number of
counterparts and all such counterparts taken together shall be deemed to
constitute but one and the same instrument.

 

10.7                                 The Parent shall, upon demand sign,
perfect, do, execute and register all such further assurances, documents, acts
and things as the Farmor may reasonably require for the purpose of more
effectually accomplishing or perfecting the transaction or security contemplated
by this Deed.

 

10.8                                 The terms of the Agreement relating to
confidentiality shall apply, mutatis mutandis, to this Deed.

 

11.                                        NOTICES

 

11.1                                 The terms of the Agreement relating to the
provision of notices shall apply, mutatis mutandis, to this Deed and the Parent
agrees that it can be notified at the same address as the Farmee.

 

12.                                        APPLICABLE LAW AND JURISDICTION

 

12.1                                 This Deed shall be governed by the laws of
England and Wales and the parties hereto agree to the exclusive jurisdiction of
the ordinary courts of England to resolve any disputes arising hereunder.

 

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AS WITNESS the parties hereto have entered into this Deed the day and year first
before written.

 

SIGNED and DELIVERED as

)

a Deed for and on behalf

)

of Tullow Oil plc

)

by Graham Martin

)

its Director

)

in the presence of:

)

Diane Tilley

 

SIGNED and DELIVERED as

)

a Deed for and on behalf

)

of SCS Corporation Ltd.

)

by P.C. Reinbolt

)

its Director

)

in the presence of:

)

Paolo Amdruso

 

Director

 

 

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