Mitsui & Co. (U.S.A.), Inc. -- Enron Industrial Markets Contract

1. Financial

Clause 2 "Payments", Paragraph 4, Line 2-3
 
"as modified by the practice of any relevant governmental revenue authority," to be deleted.

Clause 8 "Collateral Arrangements" (CRITICAL)

This clause need to be deleted, or we need to have Enron's written confirmation that Enron will not ask Letter of Credit nor any guarantee.

2. Physical

Clause 1.1 "Scope of Agreement" (CRITICAL)

We need to check form and contents of "the Confirmation of the Transaction" before entering into GTC with Enron. (Sean, we are reviewing these terms now and will revert if any changes.)

Clause 1.2 "Transaction Procedure", Line 4-6

If possible, we would like to delete "in a telephone conversation that may be recorded (each Party thereby and hereby consenting to the recording of its representative's telephone conversations without any further notice", as we do not have such phone system.

Clause 1.3 "Confirmation"

 - "Counterparty" in this clause need to be changed to "Buyer".
 - We would like to extend "three (3) business Days" (in Line 9)
   to such as "ten (10) Business Days".
 
Clause 3.1 "Seller's and Buyer's Obligations", Line 6-8

"Each party expressly negates any other representation or warranty,,,,
,,,, , or fitness for any particular purpose" need to be all capital letters.

Clause 3.2 "Delivery", (c) Term/Scheduling (CRITICAL)

This clause is one-sided to Enron. Delivery period should be same for
both parties.

Clause 4.1 "Events of Default", Line 1

"or its credit support provider" to be deleted.

Clause 7.19 "Claim"

We have to consider whether Mitsui's customer would accept this
term, or not (when Mitsui purchase products at Enron Online,
and re-sell the products to such customer). (Sean, we are reviewing
 these terms now and will revert if any changes.)

Clause 7.21 "Insurance"

We may need to ask some change in this clause, as coverage under 
"category A of the Institute Cargo Clauses (Institute of London Underwriters)" may not be same as what Mitsui/USA has with our insurance company for steel products. (Sean, our Insurance Dept. currently checking coverage under Category A set by Institute of London Underwriters, and I will revert early next week on this matter.)

Clause 8 "Collateral Arrangements" (CRITICAL)

This clause needs to be deleted, or we need to have Enron's written confirmation that Enron will not ask Letter of Credit nor any guarantee.

(Sean, there is also a chance that our subsidiary, Mitsui Steel Development will need a similar offline agreement. Let's work through these changes and then we can use the amended contract with Mitsui Steel Development.)

Thank you.

Peter Tierney
Marketing Manager
Steel Dept.
Mitsui & Co. (U.S.A.), Inc.
212 878-4088 TEL
212 878-4299 FAX