1173911--2/21/2008--ENBRIDGE_ENERGY_MANAGEMENT_L_L

related topics

{interest, director, officer}

{tax, income, asset}

{investment, property, distribution}

{stock, price, share}

{stock, price, operating}

RISKS RELATED TO OUR BUSINESS Because our only assets are the Partnership's i-units that we own, our financial condition and results of operations depend solely upon the performance of the Partnership. The distributions of additional shares that we make to our shareholders depend upon the amount of cash that the Partnership distributes to its Class A and B common unitholders. The Partnership may issue additional common or other classes of units, and we may issue additional shares, which would dilute your ownership interest. If we are not fully reimbursed or indemnified for obligations and liabilities we incur in managing the business and affairs of the Partnership, we may be unable to pay those liabilities and the value of our shares could decline. If in the future we cease to manage the business and affairs of the Partnership, we may be deemed to be an investment company under the Investment Company Act of 1940. TAX RISKS TO OUR SHAREHOLDERS If the Partnership were treated as a corporation for U.S. federal income tax purposes, the value of our shares would be substantially reduced, and the owner of our voting shares would have the right to merge us into the Partnership. RISKS ARISING FROM OUR ORGANIZATIONAL STRUCTURE AND RELATIONSHIPS WITH ENBRIDGE, THE GENERAL PARTNER AND THE PARTNERSHIP Shares are subject to purchase provisions that could result in your having to sell your shares at a time or price that may be unfavorable to you. The shares you own are not entitled to vote to elect our directors, and, therefore, you will have little or no opportunity to influence or change our management. The terms of our shares may be changed in ways you may not like, because our board of directors will have the power to change the terms of our shares in ways our board determines, in its sole discretion, are not materially adverse to you. Our limited liability company agreement limits the fiduciary duties that our directors owe to our shareholders and restricts the remedies available to our shareholders for actions taken by our board of directors that might otherwise constitute a breach of a fiduciary duty. Potential conflicts of interest may arise among Enbridge and its shareholders, on the one hand, and us and our shareholders and the Partnership and its unitholders, on the other hand. Because the fiduciary duties of our directors have been modified, our board of directors may be permitted to make decisions that benefit Enbridge and its shareholders or the Partnership and its unitholders more than us and our shareholders. In the event of a liquidation of the Partnership not resulting from any action taken by the Partnership or otherwise approved by us at the direction of our shareholders, the value of our shares would likely decline.

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1173911--2/21/2008--ENBRIDGE_ENERGY_MANAGEMENT_L_L_C