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EXHIBIT 10.29
August 4, 2000
Brown & Root Energy Services,
a division of Kellogg Brown & Root, Inc. (BRES)
10200 Bellaire Blvd.
Houston, Texas 77072
Attention: Ivor Smith
Gentlemen:
Energy Partners, Ltd. ("EPL") is pleased to reiterate its intent to
award Brown & Root Energy Services, a division of Kellogg Brown & Root, Inc.
("BRES") the operation and maintenance support of the East Bay onshore and
offshore facilities subject to the negotiation and finalization of a mutually
agreed upon contract. A mutually agreed upon contract will include the following
principal issues:
1. An agreed compensation package based on the Scope of Work as shown
on EXHIBIT "A" attached to this letter agreement.
2. An agreed schedule based on the Scope of Work.
Until the execution of such contract, all work performed by BRES for
EPL shall be governed by this letter agreement. BRES shall be compensated on a
reimbursable basis in accordance with the man-hours expended during this letter
agreement. Payments shall be made within thirty (30) days of invoice. This
letter agreement is cancelable by EPL upon ten (10) days' notice. Should a
mutually agreed upon contract not be executed, and this letter agreement be
cancelled, EPL agrees to compensate BRES for all approved expenses incurred up
to the date of such cancellation, but in no event shall such expenses exceed a
value greater than One Million Dollars ($1,000,000.00). Equipment, materials and
supplies shall not be procured or committed to under this letter agreement
without prior approval of EPL. In the event of such cancellation of this letter
agreement, BRES shall provide all documents prepared for this project and shall
transfer any commitments for materials and/or supplies to EPL.
Landmark Graphics will provide EPL with their Aries software and 20
licenses at a cost of $176,400.00 which they will bill to BRES. EPL will
reimburse BRES for such license.
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Brown & Root Energy Services
a division of Kellogg Brown & Root, Inc. RES
August 4, 2000
Page 2 of 3
INDEMNITY
a. BRES assumes full responsibility and liability for all loss or damage to
materials, machinery, equipment or other property of BRES. BRES specifically
releases EPL from liability for loss or damage to any such property. BRES shall
also be responsible and liable for any and all damage or loss to real and/or
personal property of EPL in any way related to the performance or failure to
perform the work or the provisions of this letter agreement. Upon demand by EPL,
BRES shall, at EPL's sole option, promptly pay for any such loss or damages, or
shall repair or replace such property. For purposes of this paragraph (a) only,
references to BRES and EPL shall include their respective employees, agents,
representatives, invitees, licensees, contractors, and subcontractors, and in
the case of EPL only, shall also include EPL's directors and officers, its joint
interest owners, joint venturers, land owners or lessors, and the surface fee
owner(s) of the real property on which the work is being performed or to which
BRES may have access hereunder. Notwithstanding the foregoing, BRES' obligation
to indemnify EPL for physical loss of or physical damage to EPL's property shall
be limited to $10,000,000 per occurrence even if the liability asserted is based
on negligence (whether active or passive) or other fault or strict liability and
regardless of whether the action or claim is based in contractor's warranty,
statute or otherwise.
b. Each of the parties shall protect, defend, indemnify and hold the other, and
its affiliates harmless from and against any and all suits, actions, legal or
administrative proceedings, claims, causes of action, demands, damages of every
kind and type whatsoever, liabilities, fines, penalties, losses, costs and
expenses (including without limitation, costs of defense and attorneys' fees) or
every kind and character (collectively, "Claims") for bodily injury or death of
any employee of the indemnifying party or its affiliates even if caused by the
sole or concurrent negligence or other fault or strict liability of the party to
be indemnified.
c. BRES shall assume all responsibility for, including control and removal of,
and protect, defend and save harmless EPL from and against all Claims caused by
BRES or BRES' employees, agents, representatives, invitees or subcontractors,
arising from pollution or contamination, which may be imposed upon or incurred
by or asserted by or asserted against EPL by any other party or parties
(including governmental entities), in connection with any environmental
conditions (including, subject to subsection (b) hereof, any alleged exposure of
any third party to environmental conditions) or the remediation of any
environmental conditions (whether now known or hereafter discovered) or any
environmental noncompliance arising out of, resulting from or attributable to
the performance of or failure to perform the work or the provisions of this
letter agreement. For purposes of this paragraph (c), "Claims" shall include,
without limitation, claims for personal injury, other than personal injury of
those persons described in (a), or damages to or with respect to property claims
for the recovery of response costs, or actions required or orders issued under
environmental laws, claims for restitution, contribution or equitable indemnity
from third parties or any governmental entity; claims for injunction relief, and
other orders or notices of violation from federal, state or local agencies or
costs.
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Brown & Root Energy Services
a division of Kellogg Brown & Root, Inc. RES
August 4, 2000
Page 3 of 3
Notwithstanding anything to the contrary in (b), BRES's obligation to
indemnify EPL for pollution or contamination in connection with the work shall
be limited to $10,000,000 per occurrence even if the liability asserted is based
on negligence (whether active or passive) or other fault or strict liability,
and regardless of whether the action or claim is based in contract, tort
warranty, statute or otherwise.
Should BRES be in agreement with the terms of this letter agreement,
please execute in the space provided and return one signed original to the
undersigned.
Very truly yours,
ENERGY PARTNERS, LTD.
/s/ WAYNE A. GREENWALT
Wayne A. Greenwalt
Vice President
WAG/cpl
AGREED AND ACCEPTED THIS
7TH DAY OF AUGUST, 2000
BROWN & ROOT ENERGY SERVICES
BY: /s/ IVOR SMITH
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