RE: NewPower

We are working hard to address the immediate New Power exposure. Dave: FYI it might actually involve Service Co. Mark, we are talking to Jimmie this morning on that idea. We will certainly review overall exposure as a part of this.

-----Original Message-----
From: Whalley, Greg
Sent: Thursday, August 23, 2001 8:33 AM
To: Delainey, David; Muller, Mark
Cc: Lavorato, John; Buy, Rick; Causey, Richard
Subject: RE: NewPower

we need to be really careful with a decision to get closer to the company, notwithstanding our fiduciary responsibility. i do agree with either getting in or out. we should either get more active, or abandon our board seats and get some distance.

-----Original Message-----
From: Delainey, David
Sent: Wednesday, August 22, 2001 11:12 PM
To: Muller, Mark
Cc: Whalley, Greg; Lavorato, John; Buy, Rick; Causey, Richard
Subject: NewPower

Mark, The word on the street is that the NewPower folks are getting further in trouble (ie) strange trading activity, etc. Looks and smells a little like the old EES.

Couple of opps:
- get another shareholder on-side and demand an Enron led audit to confirm financial and operating health;
- followed up by hostile exit of mgt team if significant issues arise.

Issues:
- obviously pushes us into another level of complicity/fiduciary in a blow up or bankruptcy not unlike the issues we faced with Kafus et al; however, given our continued interest a significant control issue could result in a significant acceleration of a write-off of our existing position plus any outstanding credit.

I would recommend we force the management team to submit to a detailed audit as a part of a united shareholder iniative - Lets discuss.

Rick Buy, what is our current credit position?

Greg/John, do you have a view on this one?

Rick Causey, we probably need a more "permanent solution" ot the NewPower issue.

Regards
Delainey