pls print asap.  thanks. dF
---------------------- Forwarded by Drew Fossum/ET&S/Enron on 01/25/2000 
12:28 PM ---------------------------


Colleen Raker
01/25/2000 12:04 PM
To: Drew Fossum/ET&S/Enron@ENRON
cc: Jim Talcott/ET&S/Enron@ENRON, Maria Pavlou/ET&S/Enron@ENRON, Louis 
Soldano/ET&S/Enron@ENRON 

Subject: Edits Made to Enron Machine and Mechanical Services, Inc. 
Subcontract Agreement with Instromet to Integrate Changes Requested by 
Instromet in Dec. 1999 and Other EM&MS Edits


	

The below note outlines the changes I made to the Enron Machine and 
Mechanical Services, Inc. (Clifton machine shop) Subcontract Agreement with 
Instromet per Instromet's requested changes that Randy Rice and Rick Craig 
accepted.  In the course of editing this Agreement, I rearranged certain 
provisions to clarify the indemnity obligations of the parties, and the 
representations and warranties of the parties. The latter changes are 
described below.  

Instromet has not yet seen this revised Agreement.   GPG Procurement and 
Supply will be meeting with Instromet this Thursday, January 27th, and would 
like to execute the agreement that day.  The plan is to send the attached 
agreement to Instromet no later than the close of GPG's business today.  
Please review the below changes as well as  Exhibit A, Scope of Work, and 
Exhibit B, Unit Price List, and advise me as soon as possible today of any 
concerns you may have.  Thank you for your help in finalizing this agreement.
---------------------- Forwarded by Colleen Raker/ET&S/Enron on 01/25/2000 
11:46 AM ---------------------------


Colleen Raker
01/25/2000 11:45 AM
To: Rod Maybee/OTS/Enron@ENRON
cc:  

Subject: Edits Made to Enron Machine and Mechanical Services, Inc. 
Subcontract Agreement with Instromet to Integrate Changes Requested by 
Instromet in Dec. 1999 and Other EM&MS Edits

Part II, Section 1, Definitions.

Modified to replace the definition of "Test Period" with "Warranty Period", 
and to define the latter as "the period of time up to 30 days from the date 
Instromet receives the shipment of Work at Instromet's first point of 
destination".  Instromet's right to reject the completed Work by notifying 
Enron Machine and Mechanical Services, Inc. (EM&MS) in writing of the alleged 
defect must be exercised by Instromet during the Warranty Period or this 
right is waived.   Instromet's sole remedy for defective goods is the repair 
or replacement by EM&MS.

Part II, Section 6.2, Instromet Furnished Information, Data, Material, 
Equipment Services.

Modified to limit Instromet's liability for consequences of defects in 
manufactured spools to defects in the data, material, equipment, supplies or 
services furnished by or through Instromet.  Original draft also made 
Instromet liable for defects in supplies or services furnished by Enron 
Machine and Mechanical Services, Inc.

Part II, Section 11, Title and Risk of Loss to Work.

Modified to transfer title and all risk of loss in the Work to Instromet as 
of the date of Enron Machine and Mechanical Services, Inc.'s invoice 
statement to Instromet (whether or not Instromet has arranged for the 
shipment of the completed spools).  Original draft placed risk of loss in the 
Work with Instromet at all times, and identified the Point of Delivery 
(Clifton machine shop) as the place of title-transfer.  

Part II, Section 12, Changes.

Modified to provide for the completion of a Work Change Order form (attached 
to the Agreement as Exhibit C) to document changes in Work agreed to by the 
parties.

Part II, Section 13, Standards of Performance and Limited Warranty.

Modified to integrate the new Warranty Period definition discussed in the 
first bullet item above.  Also modified to treat as a separate numbered 
section (Section 9, Indemnification for Third Party Claims) the indemnity 
obligation (regardless of the presence or absence of insurance coverage) of 
Instromet to EM&MS  for third party claims for personal injury or property 
damage arising from EM&MS' Work .  Section 9 is further modified to expressly 
exclude from Instromet's indemnity obligation the percentage of any claim 
that results from the gross negligence, willful misconduct or bad faith of 
EM&MS. Section 9 is also modified to state the right of EM&MS to assume its 
defense of a third party claim if Instromet fails to assume the same per its 
indemnity obligation on being notified of the claim.  

Please note that under Section 8, Liabilities and Indemnifications for Other 
Than Third Party Claims, Instromet and EM&MS have agreed to release and hold 
each other harmless for claims of injury or death of person or loss or damage 
to property in favor of each party or its employees or its agents arising 
from the Work of EM&MS at the Clifton machine shop.  Claims by Instromet's or 
EM&MS's independent contractors would be third party claims coverd by Section 
9.

Part II,  Hazardous Materials, Waste, Pollution Section.

This  section was deleted in its entirety.  Section 9, Indemnification for 
Third Party Claims, will cover the respective responsibilities of the parties 
for such claims.

Part II, Intellectual Property Rights Section.

Instromet was to provide EM&MS with its proposed alternate language for this 
section.  EM&MS has not received this.  Therefore, this separate Section was 
deleted by EM&MS and two of its provisions integrated elsewhere in the 
Agreement.  The first, the provision concerning Instromet's representations 
and warranties of ownership of the processes and methods that Instromet 
requires EM&MS to use in its manufacture of the spools has been set out in a 
separate section, Section 14, Instromet's Representations and Warranties.  
Section 14 now stipulates that Instromet warrants that either Instromet, Inc. 
or its "Affiliate" own such processes or methods used in the Work and that 
all products provided by Instromet are free from third party claims of 
infringement of intellectual property rights.  The second, the provision in 
the original "Intellectual Propery Rights" section concerning Instromet's 
obligation to indemnify EM&MS from third party intellectual property 
infringement claims has been removed and integrated into Section 9, 
Indemnification for Third Party Claims.

Lastly, please note that Section 22.5, Confidential Information,  now states 
that the parties' obligations of confidentiality and non-disclosure shall 
continue for a period of 3 years after the termination of this Agreement.  
The original draft had stipulated that the confidentiality obligations shall 
terminate ___ years after the date of the disclosure of such confidential 
information.  The change was made based on the difficulty of tracking 
different disclosure dates through the term of the Agreement.