Bridgeline

Per our conversation,

The following is a list of questions pertaining to Bridgeline that need to =
be answered in order for us to fully evaluate our possible courses of actio=
n. In addition, I have attached an electronic version of a Batch Funding R=
equest which lays out the Bridgeline ownership structure and walks through =
one of the two transactions with Bridgeline that is currently being contemp=
lated.

1) We need to understand what the effects might be of terminating the Gas =
Storage and Transportation Agreements between ENA and Bridgeline ("S&T Agre=
ements"). Specifically, what is the likely remedy for such a termination? =
(dissolution of the partnership? reallocation of profit sharing or voting =
control?). We are sending over the relevant documents including the Contri=
bution Agreement and the Side Letter Agreement which stipulates the methodo=
logy for calculating damages in the event of termination of these agreement=
s. Also, we need to consider whether the S&T Agreements will be construed =
as leases of real property and if so what effects that distinction will hav=
e on ENA's ability to reject those agreements as part of the bankruptcy pro=
ceedings.;

2) What can Enron do in order to block or fend off any attempt to purchase=
our interests in Bridgeline pursuant to the "buy-sell" provisions of the P=
artnership Agreement? Would filing voluntary petitions in bankruptcy on be=
half of the 4 limited partners achieve this result? Remember, the biggest =
concern in this area is Enron's inability to counter any purchase proposal =
with a proposal of its own (given our current lack of access to $);

3) What rights might Enron have to initiate a termination of the Partnersh=
ip Agreement? Could we reject the Contribution Agreement (is it sufficient=
ly executory?)?;

4) What is the impact of a termination of the Partnership Agreement (i.e. =
is it reasonable to think that we would get our contributed assets back and=
return to the status quo?)?;

5) Should we proceed with the transaction that is proposed in the attached=
Batch Funding Request (especially the early contribution of the Napoleonvi=
lle Storage Cavern (which Enron is already obligated to contribute under th=
e Contribution Agreement no later than 7/1/2002))? We need to recognize th=
at if we are unwilling to do this, Bridgeline will likely lose any interest=
in proceeding with the remainder of the transaction (resulting in numerous=
other problems with other counterparties).

We also spoke about your preparing a letter to Texaco in response to their =
letter (pursuant to which they claim to be the sole member of Bridgeline LL=
C) and the related Unanimous Consent. =20

Also be advised that there is another transaction that is currently being c=
ontemplated between Bridgeline and ENA. ENA, as the holder of both storage=
and transport rights under the S&T Agreements, has title to approximately =
1.9 BCF of gas in Bridgeline's storage. ENA owes approximately $2.4 millio=
n to Bridgeline under the S&T Agreements ($1.2 million is pre-petition and =
the remainder is post-petition). Initially, Bridgeline rejected our reques=
ts to release the gas in storage so that we could sell it (they claimed tha=
t they had a right to do this because they have a common carrier lien on th=
e gas). We responded by letting them know that we felt they were violating=
the automatic stay. They have since agreed to hold only those volumes of =
gas which are needed to secure ENA's pre-petitions obligations and have tol=
d us that they would release approximately 1.5 BCF of gas if we paid the $1=
.2 million for post-petition amounts. We do not want to pay these amounts =
as doing so would be tantamount to acknowledging the common carrier lien. =
In other words, if we pay the $1.2 million of post-petition amounts to Brid=
geline and later determine that Bridgeline did not have the authority to re=
quire payment of those amounts prior to releasing the gas, we have done our=
creditors a disservice (and will likely never see that $1.2 million again)=
.

Thank you in advance for your efforts and please call ASAP if you need anyt=
hing else from us in order to fully consider the questions raised above.