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 action.  In addition, I have attached an electronic version of a Batch Funding Request which lays out the Bridgeline ownership structure and walks through one of the two transactions with Bridgeline that is currently being contemplated.

1)  We need to understand what the effects might be of terminating the Gas Storage and Transportation Agreements between ENA and Bridgeline ("S&T Agreements").  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 Contribution Agreement and the Side Letter Agreement which stipulates the methodology for calculating damages in the event of termination of these agreements.  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 have on ENA's ability to reject those agreements as part of the bankruptcy proceedings.;

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 Partnership Agreement?  Would filing voluntary petitions in bankruptcy on behalf 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 Partnership Agreement?  Could we reject the Contribution Agreement (is it sufficiently 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 Napoleonville Storage Cavern (which Enron is already obligated to contribute under the Contribution Agreement no later than 7/1/2002))?  We need to recognize that 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 LLC) and the related Unanimous Consent.  

Also be advised that there is another transaction that is currently being contemplated 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 million to Bridgeline under the S&T Agreements ($1.2 million is pre-petition and the remainder is post-petition).  Initially, Bridgeline rejected our requests to release the gas in storage so that we could sell it (they claimed that they had a right to do this because they have a common carrier lien on the 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 told 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 Bridgeline and later determine that Bridgeline did not have the authority to require 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 anything else from us in order to fully consider the questions raised above.