Mark:

David Berberian and I have been exploring opportunities with 
PaperExchange.com.  As you can see from the attached note sent this morning, 
we are now discontinuing discussions with this company and won't be doing a 
deal with this group in the foreseeable future.

Please let me know if I need to communicate with them any more clearly to 
indicate our lack of interest.  As you may recall, their investment bankers 
had called David, and David had not taken their call in order to make sure we 
didn't violate our NDA.

Best regards,

Mike Haney
Director, ENW Origination
x58968



 -----Original Message-----
From:  Haney, Mike  
Sent: Tuesday, March 20, 2001 11:03 AM
To: 'mgozon@paperexchange.com'
Cc: Berberian, David
Subject: RE: NewCo value prop and revisit of deal structure

Mike:

Thanks for sending this document to me; it describes your thoughts on the 
business concept well.  I was able to review these ideas with my management 
and get their feedback quickly.

As I mentioned a few minutes ago during our telephone conversation, this does 
not look like something we'd like to do at this point.  While the venture 
appears attractive, it doesn't fit in our current set of opportunities.  

Please keep in touch as you continue to develop your business strategies and 
develop your company.  Best of luck to you and your team as you move forward.

Best regards,

Mike





 -----Original Message-----
From:  "mgozon" <mgozon@paperexchange.com>@ENRON 
[mailto:IMCEANOTES-+22mgozon+22+20+3Cmgozon+40paperexchange+2Ecom+3E+40ENRON@E
NRON.com] 
Sent: Monday, March 19, 2001 10:27 AM
To: Haney, Mike
Subject: NewCo value prop and revisit of deal structure

Mike,

Per our conversation in NYC, attached please find the NewCo discussion
document.  As you will see, NewCo will be well positioned to be the market
leading service provider to the Forest Products industry.  Revenue
generation opportunities exist from software ASP models/licensing,
consulting engagements and in the transactional/logistics arena of the
Exchange. More important, these supplier and buyer interactions all lead to
increased funnel throughput for Clickpaper to EIM. There are tremendous
network effects resulting from this full service, continuum of offerings.

Relative to deal structure, the PEx management team remains open to
identifying a structure that works for both Enron and ENW. This could be as
simple as an outright purchase of PEx or slightly more complex merging of
assets into NewCo. Per my comments at PaperWeek, if there is a deal to be
done, arguably, it makes sense to combine interests prior to PEx making any
other moves now under consideration. Let's determine, once and for all, if
there is a leveragable position that meets the goals of Enron and will
position NewCo to thrive as a significant player in the Forest Products
industry.

I will call you later today and we can review the PP together.

Mike



 - 03.14.01 Terms Version 3.ppt << File: 03.14.01 Terms Version 3.ppt >>