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Non-Tech : Kelso Technologies VSE:KLS

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To: Bill Potton who wrote (41)	5/14/1998 10:37:00 AM
From: John Carswell	of 73

Bill, Court Holdings had worked with Kelso on the HERV project over many years. With changes within Court, their priorities changed and their focus was on other business development matters which is where they chose to direct current resources. The JS75 SRV was virtually a new project governed by new patents and so it was an opportunity for them to focus elsewhere. That, in part, has enabled Kelso to work towards setting up a US-based, wholly-owned subsidiary to manufacture its own technology. It means a higher rate of return to Kelso and its shareholders since we are not in a 50/50 joint venture with any other company. We are very pleased with the direction we are taking and believe it is in the shareholders' best interests. Regards.

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