GUARANTY AND INDEMNIFICATION
This Guaranty and Indemnification Agreement ("Agreement") is made and
entered into effective January 1, 1998, by and between Shell Western E&P Inc.
("SWEPI"), a Delaware corporation, and Xxxxxx Xxxxxx Energy Partners, L.P.
("KM"), a Delaware limited partnership.
RECITALS
For and in consideration of the premises and of the covenants herein
contained, and for other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, SWEPI and KM hereby agree as
follows:
ARTICLE I. DEFINITIONS
1.1 "KM Parties" shall have the same meaning as assigned to such term under
the Master Agreement, having an effective date of January 1, 1998 (the "Master
Agreement").
1.2 "Shell Parties" shall have the same meaning as assigned to such term
under the Master Agreement.
ARTICLE II. GUARANTY AND INDEMNITY BY SWEPI
2.1 Guaranty by SWEPI.
(a) SWEPI guarantees the performance by Shell CO2 LLC and Shell CO2
General LLC of the requirements under Section 2.4(f) of the First
Amended and Restated Limited Partnership Agreement of Shell CO2
Company, Ltd. (the "Limited Partnership Agreement") for repayment
or reimbursement of Distribution Imbalance Amounts (but SWEPI
does not assume or guarantee
the payment or performance of any other obligations, requirements
or liabilities under the Limited Partnership Agreement).
(b) SWEPI guarantees the performance by each of the Shell Parties of
the terms and conditions of the Assumption and Indemnification
Agreement, having an effective date of January 1, 1998 (the
"Assumption and Indemnification Agreement").
(c) SWEPI guarantees the performance by each of the Shell Parties of
the terms and conditions of the Master Agreement.
2.2 Indemnification by SWEPI. SWEPI hereby indemnifies and holds harmless
KM, the "KM Indemnified Parties" and the "LP Indemnified Parties" (as such terms
are defined in the Assumption and Indemnification Agreement) from and against
the losses, damages and expenses of such parties resulting from, arising out of
or in connection with any and all of the following:
(a) breach by Shell CO2 LLC and/or Shell CO2 General LLC of the
specific requirements of the Limited Partnership Agreement
referred to in Section 2.1(a) hereof.
(b) breach by any of the Shell Parties of the Assumption and
Indemnification Agreement;
(c) breach by any of the Shell Parties of the Master Agreement;
(d) breach by any of the Shell Parties in failing to grant the rights
and licenses set forth in the Shell Technology Agreement, having
an effective date of January 1, 1998.
Provided, however, in no event shall SWEPI be obligated to indemnify KM, the KM
Indemnified Parties or the LP Indemnified Parties for any costs, damages,
expenses or other remedies beyond
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those remedies specifically provided under the Master Agreement or the
Assumption and Indemnification Agreement with regard to breaches of said
agreements.
ARTICLE III. GUARANTY AND INDEMNITY BY KM
3.1 Guaranty by KM.
(a) KM guarantees the performance by Xxxxxx Xxxxxx
CO2, LLC ("KM CO2") of the requirements under Section 2.4(f) of the
Limited Partnership Agreement for repayment or reimbursement of
Distribution Imbalance Amounts or for financial obligations arising out
of Section 5.5(i) of the Limited Partnership Agreement (but KM does not
assume or guarantee the payment or performance of any other
obligations, requirements or liabilities under the Limited Partnership
Agreement).
(b) KM guarantees the performance by each of the KM Parties of the terms
and conditions of the Assumption and Indemnification Agreement.
(c) KM guarantees the performance by each of the KM Parties of the terms
and conditions of the Master Agreement.
3.2 Indemnification by KM. KM hereby indemnifies and holds harmless SWEPI,
the "Shell Indemnified Parties" (as such term is defined in the Assumption and
Indemnification Agreement) and the LP Indemnified Parties from and against the
losses, damages and expenses of such parties resulting from, arising out of or
in connection with any and all of the following:
(a) breach by KM CO2 of the specific requirements of the Limited
Partnership Agreement referred to in Section 3.1(a) hereof;
(b) breach by any of the KM Parties of the Assumption and Indemnification
Agreement;
(c) breach by any of the KM Parties of the Master Agreement;
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Provided, however, in no event shall KM be obligated to indemnify SWEPI, the
Shell Indemnified Parties or the LP Indemnified Parties for any costs, damages,
expenses or other remedies beyond those remedies specifically provided under the
Master Agreement, the Assumption and Indemnification Agreement or the Limited
Partnership Agreement with regard to breaches of said agreements.
ARTICLE IV. MISCELLANEOUS
4.1 Notices. All notices and other communications
provided for in this Agreement shall be delivered and sent by registered or
certified mail return receipt requested, by overnight courier or by electronic
facsimile transmission, and shall be considered to have been given when
delivered to the party to whom directed.
(a) If to Shell Western E&P, Inc.:
200 N. Dairy Ashford
P. O. Xxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: X. X. Xxxxxxx
Phone: 281/000-0000
Fax: 281/000-0000
(b) If to Shell Xxxxxx Pipeline Company:
200 N. Dairy Ashford
P. O. Xxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: X. X. Xxxxxxx
Phone: 281/000-0000
Fax: 281/000-0000
(c) If to Shell Land & Energy Company:
200 N. Dairy Ashford
P. O. Xxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: X. X. Xxxxxxx
Phone: 281/000-0000
Fax: 281/000-0000
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(d) If to Shell Western Pipeline Inc.:
200 N. Dairy Ashford
P. O. Xxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: X. X. Xxxxxxx
Phone: 281/000-0000
Fax: 281/000-0000
(e) If to Shell CO2 LLC:
000 Xxxxxxxx Xxxx.
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: X. X. Xxxxxxxxxx
Phone: 213/000-0000
Fax: 213/000-0000
(f) If to Shell CO2 General LLC
200 N. Dairy Ashford
P. O. Xxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: X. X. Xxxxxxx
Phone: 281/000-0000
Fax: 281/000-0000
(g) If to Xxxxxx Xxxxxx Operating, L.P. "A":
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Phone: (000)000-0000
Fax: (000)000-0000
(h) If to Xxxxxx Xxxxxx CO2 LLC:
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Phone: (000)000-0000
Fax: (000)000-0000
4.2 Severability. If any one or more of the provisions contained in this
Agreement or any document executed in connection herewith shall be invalid,
illegal or unenforceable in any respect under any applicable law, the validity,
legality, and enforceability of the remaining provisions contained herein or
therein shall not in any way be affected or impaired. In the case of
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any such invalidity, illegality or unenforceability, the parties hereto agree to
use their best efforts to achieve the purpose of such provision by a new legally
valid and enforceable stipulation.
4.3 Amendments. This Agreement may be amended only with each party's
written consent.
4.4 Waiver. Any failure of any party to comply with any of its obligations,
agreements, or conditions herein contained may be waived (either generally or in
particular instances and either retroactively or prospectively) in writing, but
not in any other manner, by the party to whom such compliance is owed. Any such
waiver shall operate as a bar to any claim for indemnification under Articles II
and III or otherwise for damages arising from the obligation, agreement or
condition so waived. No waiver of any provision of this Agreement shall
constitute a waiver of any other provision hereof.
4.5 Applicable Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the internal laws of the State of Texas without
regard to rules concerning conflicts of law.
4.6 Arbitration Procedures. This Agreement shall be subject to the
arbitration procedures provided for and specified in the Limited Partnership
Agreement, which terms are incorporated by reference herein.
4.7.Successors and Assigns. All covenants and agreements contained in this
Agreement by or on behalf of any of the parties shall bind the respective
successors by operation of law and permitted assigns of such parties and shall
inure to the benefit of the successors by operation of law and permitted assigns
of such parties. This Agreement may not be assigned in whole or in part to any
non-party without the written permission of all the other Parties.
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4.8 Entire Agreement. This Agreement and the Transaction Documents (as
defined in the Master Agreement) previously entered into by the Parties or some
of them set forth the entire understanding and agreement between the parties as
to the matters covered herein and therein and supersede and replace any prior
understanding, agreement or statement (written or oral) with respect thereto.
4.9 Counterparts. This Agreement may be executed in separate and several
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
4.10 Headings; References. The headings of the Articles and Sections of
this Agreement are for guidance and convenience of reference only and shall not
limit or otherwise affect any of the terms or provisions hereof. References
herein to an "Article" or a "Section" or an "Exhibit" or a "Schedule" shall be
to an Article or a Section or an Exhibit or a Schedule of this Agreement unless
a contrary intent is clearly stated; and references to terms or provisions
"herein" or "hereof" shall be to terms or provisions of this Agreement.
4.11 Special Exemplary, Consequential or Punitive Damages. The parties shall
only be entitled to recover actual damages for a breach or violation of this
Agreement. No party shall be entitled to recover special, exemplary,
consequential or punitive damages from the other parties for breach or violation
of this Agreement and each party hereby waives any claim or right to special,
exemplary, consequential or punitive damages hereunder; provided, however, the
foregoing shall not limit any indemnification obligations hereunder or preclude
one party from being indemnified by another party against such types of damages
in the event they are awarded against a party and such party is entitled to
indemnification pursuant to the terms of this Agreement.
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EXECUTED this 5th day of March, 1998.
XXXXXX XXXXXX ENERGY PARTNERS, L.P.
By: KINDER XXXXXX X.X., INC., its sole general partner
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Vice Chairman
SHELL WESTERN E&P INC., By: X. X. Xxxxxx, President
By: /s/ X. X. Xxxxxxx
--------------------------------------
X. X. Xxxxxxx,
Attorney-in-Fact, for X. X. Xxxxxx
