Re: Pinewood Manor

PRIVILEGED ATTORNEY-CLIENT COMMUNICATION

Steve, Karl and Tom

I met with Karl this morning. My suggestion is that, from this point
forward, all communications with the trailer park should be coordinated with
the legal department and all of our communications internally should be
prefaced with "Attorney-Client Privileged Communication". Any
correspondence or information that I request from you or that you send me
should be prefaced as "Attorney-Client Privileged". Karl is to duplicate his
file for me and to document dates on which conversations or meetings have
taken place thus far. I will draft a letter for Steve's signature to be sent
to the owners of the trailer park and their attorney demanding that they
immediately remove the two trailers that are sitting within 6' and 1' of the
pipe centerline AND the two trailers that are within 16' of the pipe
centerline. In my opinion, you should strictly construe the terms of the
right of way agreement which is of public record that states that the grantor
shall not permit ANY housing or other structure to be within the right of
way. I also will advise them that the trees in the right of way are going to
be removed. I will endeavor to visit with Bud Wolcott and the Lumberton team
regarding this matter.

Richard

I am sending this to you as a "heads up" of possible litigation arising out
of our demand for these trailer homes to be moved off of HPL's easement.
We have a 50' recorded easement prohibiting structures from being on or
within the right of way. The engineer that designed the trailer park wrongly
assumed it was only 30' wide. Four trailers are within the easement. Large
pine trees are in the easement area and literally on top of the pipeline.
Obviously, it will be HPL's nickel to cut down the trees but I anticipate
there may be a dispute as to who pays for the trailers to be moved out of the
easement area. They have retained an attorney; however, he has, thus far,
not disputed HPL's right to prohibit structures within 25' of the pipe
centerline. Let me know if you need more details. I'll keep you advised.

Steve HPL Schneider
11/07/2000 08:30 AM

To: Ann Elizabeth White/HOU/ECT@ECT
cc: Tom Shelton/HOU/ECT@ECT
Subject: Pinewood Manor

PROTECTED - ATTORNEY/CLIENT PRIVILEDGE

Karl will be coming to you to discuss the issues below. We have several
mobile homes that have been positioned and placed within our pipeline
easement, one approximating a foot off the pipeline. There are a couple that
I think we should absolutely mandate to be moved. For the remainder, I would
like to mandate and require in writing the Park management to notify in
writing those that remain encroached on the easement of the inherit dangers
of a natural gas pipeline and their proximity to such. Obviously, I am not
trying to create a scare, as a scare is not warranted based on any known
facts on this pipeline. But I would believe that our liability may be
expanded if we were not proactive and did not require the Park management to
notify the clients that are encroaching of the circumstances upon which they
exist. Each person would therefore be informed about the circumstances
surrounding them and would have made a conscientious decision to remain in
spite of such circumstances. Your thoughts on this please.

---------------------- Forwarded by Steve HPL Schneider/HOU/ECT on 11/07/2000
08:14 AM ---------------------------

Enron North America Corp.

From: Tom Shelton 10/22/2000 10:47 AM

To: Karl E Atkins/NA/Enron@ENRON
cc: Steve HPL Schneider/HOU/ECT@ECT, Calvin Dodd/GCO/Enron@Enron
Subject: Pinewood Manor

I don't know what the current status of the Pinewood Manor matter is, but
Steve Schneider and I talked about it a little on Friday. We think that if
we are going to allow some minor encroachment (a very few mobile
homes/trailers, not too close to the pipeline) onto HPL's 50-foot easement,
then at a minimum we should get an encroachment agreement which includes:
acknowledgement that HPL is not responsible for any damages resulting from
the encroachments
agreement that Pinewood Manor will be responsible for any incremental costs
if the encroachments interfere with our operation, maintenance, etc., and
will remove any encroachments as required by HPL in order for HPL to conduct
its operations as it deems appropriate
a commitment from the owners of Pinewood Manor that they will notify (in a
document that HPL will provide) all present and future tenants about the
pipeline

Please let us know of any developments regarding this matter.