Gerald - I was concerned that we didn't address what happens to the gains or
losses associated with cash outs.  I understand the procedures for cash out
can be changed but what about the gain/loss impact to the LLC revenue stream?
---------- Original Text ----------

From: "Gerald Nemec" <Gerald.Nemec@enron.com>, on 7/31/00 11:06 AM:



Attached is the latest set of documents which have minor revisions based on my
discussions with Chris last week.  These have been only redlined against the
prior version, not the original versions.  Let me know if you want redlines
against the original docs.  The LLC was not included as no changes were made
from the versions already forwarded.

With respect to the cash out imbalance procedures. The Administrative Services
Agreement (Exhibit B) currently has a rough procedure for such cashout.  It is
also written such that the Members can adopt a new procedure at any time.  If
the current procedures are not sufficient, it probably make the most sense to
have only a working draft (approved by the members) of procedures in place
until
we have a few month of operations under our belt to work out the bugs.  Scott
Sitter will be developing this draft.  The development of these procedures can
be done outside these current revisions.  A final imbalance procedure would be
adopted by written action of the members upon development of those final
procedures.

Let me know if you have any questions.

(See attached file: Amended and Restated Admin3(red).doc)(See attached file:
AMENDED AND RESTATED CAPALLEXP AGREEMENT7(RED).DOC)