<PAGE>
                                                                 EXHIBIT 10.CC.2
================================================================================



                           SECOND AMENDED AND RESTATED


                       LIMITED LIABILITY COMPANY AGREEMENT


                                       OF


                         DIAMOND POWER VENTURES, L.L.C.


                           Dated as of April 24, 2002


                                   ----------


                                Project Gemstone




================================================================================


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                                TABLE OF CONTENTS

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ARTICLE I             FORMATION AND CONTINUATION OF Diamond......................................................1

         Section 1.1       Formation and Continuation of Diamond.................................................1
         Section 1.2       Name..................................................................................2
         Section 1.3       Business of Diamond...................................................................2
         Section 1.4       Location of Principal Place of Business; Registered Office............................2
         Section 1.5       Filings; Registered Agent.............................................................2
         Section 1.6       Term..................................................................................3
         Section 1.7       Title to Diamond Property.............................................................4
         Section 1.8       Payments of Individual Obligations....................................................4

ARTICLE II            DEFINITIONS................................................................................4

         Section 2.1       Definitions...........................................................................4
         Section 2.2       Rules of Construction.................................................................4

ARTICLE III           INTERESTS; MEMBERS; CAPITAL CONTRIBUTIONS; ADDITIONAL AGREEMENTS...........................4

         Section 3.1       Interests.............................................................................4
         Section 3.2       Diamond Class A Member and Diamond Class B Members....................................5
         Section 3.3       Additional Capital Contributions......................................................5
         Section 3.4       Additional Agreements Among Members...................................................8

ARTICLE IV            ALLOCATION OF NET INCOME AND NET LOSS......................................................9

         Section 4.1       Allocation of Net Income and Net Losses...............................................9
         Section 4.2       Allocations After the Extension Period or the Mark-to-Market Measurement Date........10
         Section 4.3       [Reserved]...........................................................................10
         Section 4.4       Special Tax Allocations..............................................................10
         Section 4.5       Curative Allocations.................................................................12
         Section 4.6       Loss Limitation......................................................................12
         Section 4.7       Other Allocation Rules...............................................................13
         Section 4.8       Tax Allocations; Code Section 704(c).................................................13
         Section 4.9       Order of Allocations.................................................................14

ARTICLE V             DISTRIBUTIONS; WITHDRAWALS................................................................15

         Section 5.1       Payments.............................................................................15
         Section 5.2       More than One Diamond Class A Member or Diamond Class B Member.......................17
         Section 5.3       Amounts Withheld.....................................................................17
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         Section 5.4       Deemed Distributions and Payments to Diamond Class A Member..........................18
         Section 5.5       Notice of Certain Distributions......................................................18

ARTICLE VI            MANAGEMENT................................................................................19

         Section 6.1       Management of Diamond................................................................19
         Section 6.2       Right to Rely on the Managing Member.................................................22
         Section 6.3       Decisions Requiring Unanimous Member Consent.........................................22
         Section 6.4       Consents of the Diamond Class A Member...............................................28
         Section 6.5       Duties and Obligations of the Managing Member........................................29
         Section 6.6       Compensation and Expenses............................................................31
         Section 6.7       Demand on EPED B Demand Loans and Garnet Demand Loans Held by Diamond, Diamond
                           Holdings, Aquamarine, Peridot and their Subsidiaries.................................31
         Section 6.8       Execution of other Transaction Documents; Matters Relating to Diamond
                           Holdings, Aquamarine and Peridot.....................................................32
         Section 6.9       Determination of Interest Rate on EPED B Demand Loans and Garnet Demand Loans........32
         Section 6.10      Certain Assets.......................................................................33
         Section 6.11      Covenant of the Managing Member......................................................33
         Section 6.12      Certain Covenants Relating to the Separateness of Diamond............................34

ARTICLE VII           ROLE OF NON-MANAGING MEMBERS..............................................................36

         Section 7.1       Rights or Powers.....................................................................36
         Section 7.2       Voting Rights........................................................................36
         Section 7.3       Procedure for Consent................................................................36
         Section 7.4       Special Rights of the Diamond Class A Member.........................................36

ARTICLE VIII          ACCOUNTING; BOOKS AND RECORDS.............................................................37

         Section 8.1       Accounting; Books and Records........................................................37
         Section 8.2       Reports..............................................................................38
         Section 8.3       Tax Matters..........................................................................40
         Section 8.4       Proprietary Information..............................................................41

ARTICLE IX            AMENDMENTS; MEETINGS......................................................................41

         Section 9.1       Amendments...........................................................................41
         Section 9.2       Meetings of the Members..............................................................41
         Section 9.3       Unanimous Consent....................................................................42
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                                TABLE OF CONTENTS
                                   (CONTINUED)

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ARTICLE X             TRANSFERS OF INTERESTS....................................................................42

         Section 10.1      Restriction on Dispositions of Interests.............................................42
         Section 10.2      Prohibited Dispositions..............................................................43

ARTICLE XI            RETIREMENT OPTION; PURCHASE OPTION; ASSET REMEDY; EXTENSION PERIOD........................44

         Section 11.1      Diamond Class B Member's Retirement Option...........................................44
         Section 11.2      Diamond Class B Member's Purchase Option.............................................46
         Section 11.3      Diamond Asset Remedy.................................................................50
         Section 11.4      Asset Sales..........................................................................51
         Section 11.5      Extension Period.....................................................................51

ARTICLE XII           DISSOLUTION AND WINDING UP................................................................54

         Section 12.1      Liquidating Events...................................................................54
         Section 12.2      Winding Up...........................................................................54
         Section 12.3      Restoration of Deficit Capital Accounts; Compliance With Timing Requirements
                           of Regulations.......................................................................55
         Section 12.4      Deemed Distribution and Recontribution...............................................56
         Section 12.5      Rights of Members....................................................................56
         Section 12.6      Notice of Dissolution................................................................56
         Section 12.7      Character of Liquidating Distributions...............................................57
         Section 12.8      The Liquidator.......................................................................57
         Section 12.9      Form of Liquidating Distributions....................................................57
         Section 12.10     Liquidation Notice...................................................................58

ARTICLE XIII          MISCELLANEOUS.............................................................................59

         Section 13.1      Amendments...........................................................................59
         Section 13.2      Notices..............................................................................59
         Section 13.3      No Waiver; Cumulative Remedies.......................................................59
         Section 13.4      Waiver of Jury Trial.................................................................59
         Section 13.5      Counterparts.........................................................................60
         Section 13.6      Survival of Representations, Warranties and Indemnities: Entire Agreement............60
         Section 13.7      Severability.........................................................................60
         Section 13.8      Construction.........................................................................60
         Section 13.9      [Reserved]...........................................................................60
         Section 13.10     Governing Law........................................................................60
         Section 13.11     Waiver of Action for Partition.......................................................61
         Section 13.12     Consent to Jurisdiction..............................................................61
         Section 13.13     Specific Performance.................................................................61
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         Section 13.14     [Reserved]...........................................................................61
         Section 13.15     Consent to Collateral Assignment by Diamond Class A Member; Rights of Action.........61
         Section 13.16     Effectiveness........................................................................62
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                                    SCHEDULES

         Schedule 3.2(a)            Members and Capital Accounts
         Schedule 3.2(b)            Specified Diamond Assets
         Schedule 6.3(f)            Budget Parameters
         Schedule 6.10              Assets To be Held by Aquamarine and Peridot
         Schedule 13.2              Notice Information

                                    EXHIBITS

         Exhibit A:                 Form of Membership Interest



                                      -v-
<PAGE>



                           SECOND AMENDED AND RESTATED

                       LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                         DIAMOND POWER VENTURES, L.L.C.

         SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this
"DIAMOND LLC AGREEMENT") of DIAMOND POWER VENTURES, L.L.C. ("DIAMOND"), dated as
of April 24, 2002, among DIAMOND, GARNET POWER HOLDINGS, L.L.C., a Delaware
limited liability company ("GARNET"), and GEMSTONE INVESTOR LIMITED, an exempted
company incorporated in the Cayman Islands ("INVESTOR").

                             PRELIMINARY STATEMENTS

         Diamond was formed as a limited liability company under and pursuant to
the provisions of the LLC Act (as hereinafter defined), with Garnet as the
initial member of Diamond, pursuant to the filing of the Diamond Certificate of
Formation on September 6, 2001 and the execution of the Limited Liability
Company Agreement of Diamond Power Ventures, L.L.C. dated as of September 6,
2001 (the "ORIGINAL DIAMOND LLC AGREEMENT"), as amended and restated by that
certain Amended and Restated Limited Liability Company Agreement, dated as of
November 1, 2001 (the "EXISTING DIAMOND LLC AGREEMENT").

         On the Closing Date, (i) Investor was admitted to Diamond as the sole
Diamond Class A Member, (ii) Investor made a Cash Capital Contribution in the
amount of $238,330,926.40 to Diamond, (iii) Garnet was converted to and admitted
as the sole Diamond Class B Member and Managing Member of Diamond, (iv) Garnet
made a Capital Contribution to Diamond of Cash in the amount of $280,782,709.63
and of certain Brazilian power projects and (v) Diamond made a Capital
Contribution of Cash in the amount of approximately $520,000,000 and of certain
Brazilian power projects to Diamond Power Holdings, L.L.C. ("DIAMOND HOLDINGS"),
thereby increasing the value of its investment represented by the Diamond
Holdings Interest.

         The parties hereto have agreed to enter into this Diamond LLC Agreement
to further amend and restate the Existing Diamond LLC Agreement effective on and
as of the Effective Date in accordance with Section 13.16.

                                    ARTICLE I

                      FORMATION AND CONTINUATION OF DIAMOND

         Section 1.1 Formation and Continuation of Diamond. Diamond was formed
as a limited liability company under the LLC Act by the filing of the Diamond
Certificate of Formation on September 6, 2001, with the Secretary of State. The
parties hereto agree to continue Diamond as a limited liability company. The
Members agree that the Existing Diamond LLC Agreement is hereby amended and
restated in its entirety as set forth in, and is hereby superseded in its
entirety by, this Diamond LLC Agreement effective as of the Effective Date.


<PAGE>
                                                           Diamond LLC Agreement


         Section 1.2 Name. The name of Diamond shall continue to be "Diamond
Power Ventures, L.L.C.", and all business of Diamond shall continue to be
conducted in such name or, in the discretion of the Managing Member, under any
other name; provided, however, that (a) in no event shall the name of Diamond
include (i) the name of the Diamond Class A Member, (ii) to the extent that the
Managing Member shall have actual knowledge thereof, the name of any Affiliate
of the Diamond Class A Member, (iii) the name of any Class A Shareholder or (iv)
any abbreviation of any name described in clause (i), (ii) or (iii), and (b) the
Managing Member may change the name of Diamond only upon executing and filing an
amendment to the Diamond Certificate of Formation.

         Section 1.3 Business of Diamond. The purposes of Diamond are limited to
(i) engaging in the business of owning investments in Diamond Permitted Assets,
managing, protecting and conserving such investments in Diamond Permitted
Assets, and making additional investments in Diamond Permitted Assets, (ii)
entering into, and performing its obligations under and consummating the
transactions contemplated by, the Diamond Documents, (iii) engaging in such
additional business endeavors as are permitted under this Diamond LLC Agreement
and (iv) engaging in activities related or incidental to the foregoing. Diamond,
and the Managing Member on behalf of Diamond, may enter into and perform
Diamond's obligations under the Diamond Documents and, subject to Sections 6.3
and 7.4, all documents, agreements, certificates and financing statements
required to be entered into in order to consummate the transactions contemplated
thereby, all without further act, vote or approval of any Person. The
authorization set forth in the preceding sentence shall not be deemed a
restriction on the power and authority of the Managing Member to enter into
other agreements or documents on behalf of Diamond in accordance with the terms
of this Diamond LLC Agreement and the other Diamond Documents, and the Managing
Member is hereby directed by the Members to enter into on behalf of Diamond, the
Diamond Documents to which Diamond is or is to be a party and which have not
previously been entered into by or on behalf of Diamond. The Managing Member
shall have the power to do any and all acts necessary, appropriate, proper,
advisable, incidental or convenient to or in furtherance of the purposes of
Diamond set forth in this Section 1.3 and shall have, without limitation, any
and all powers that may be exercised on behalf of Diamond by the Managing Member
pursuant to Article VI.

         Section 1.4 Location of Principal Place of Business; Registered Office.
The principal place of business of Diamond shall be at c/o El Paso, Av. Pasteur,
154, Botafogo, Rio de Janeiro, Brazil. The registered office of Diamond in the
State of Delaware is located at c/o Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, New Castle County, Delaware
19890-0001, Attention: Corporate Trust Administration.

         Section 1.5 Filings; Registered Agent.

         (a) Filings. The Managing Member shall take any and all other actions
necessary to perfect and maintain the status of Diamond as a limited liability
company under the laws of the State of Delaware, including the preparation,
execution and filing of amendments to the Diamond Certificate of Formation and
such other certificates, documents and instruments as may be required by law. In
addition, the Managing Member in its sole discretion may register or qualify
Diamond as a limited liability company in any jurisdiction outside the United
States, including each other jurisdiction in which registration or qualification
is necessary or appropriate



                                       2
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                                                           Diamond LLC Agreement


because the properties or activities of Diamond are located in that
jurisdiction; provided, however, that (i) Diamond shall not maintain a place of
business in any jurisdiction in the United States, (ii) the Managing Member
shall not cause any of the properties or activities of Diamond (whether directly
or indirectly through Project Companies or otherwise) to be located in any
jurisdiction in the United States, (iii) the Managing Member shall notify the
Diamond Class A Member if, following reasonable investigation (which the
Managing Member shall be obligated to undertake), the Managing Member knows or
reasonably should know that, solely as a result of Diamond doing business in any
other such jurisdiction, the Diamond Class A Member would be required under the
laws of such jurisdiction to qualify to do business in such jurisdiction and
(iv) Diamond shall not conduct business in any jurisdiction other than Brazil
wherein the conduct by Diamond of business in such jurisdiction would reasonably
be expected to subject the Diamond Class A Member to any tax, penalty, liability
or cost except to the extent that (x) such tax, penalty, liability or cost
results from the activities of the Diamond Class A Member in such jurisdiction
(other than those activities in connection with the transactions contemplated
hereby) or (y) the Diamond Class A Member is indemnified (or would have been
indemnified if it had complied with the provisions of the Transaction Documents
applicable to it) for such tax, penalty, liability or cost under Section 5.5 or
6.1(a) of the Participation Agreement or under any other provision of this
Diamond LLC Agreement or any other Transaction Document and such tax, penalty,
liability or cost is not a criminal penalty or liability.

         (b) Delivery of Certificates, etc. in Connection With Qualification of
Diamond. At the request of the Managing Member, each Member shall execute,
acknowledge, swear to and deliver all certificates and other instruments
conforming with this Diamond LLC Agreement that are necessary or appropriate to
form, qualify, continue and terminate Diamond as a limited liability company
under the laws of the State of Delaware and to qualify, continue and terminate
Diamond as a foreign limited liability company in all other jurisdictions in
which Diamond may so qualify, all to the extent contemplated and required by
this Diamond LLC Agreement.

         (c) Registered Agent. The registered agent for service of process on
Diamond in the State of Delaware shall be Wilmington Trust Company, 1100 North
Market Street, Wilmington, New Castle County, Delaware 19890, Attention:
Corporate Trust Administration or any successor as appointed by the Managing
Member in accordance with the LLC Act.

         (d) Dissolution. Upon the dissolution and completion of the winding up
and liquidation of Diamond, the Liquidator, as an authorized person within the
meaning of the LLC Act, shall promptly execute and cause to be filed statements
of intent to dissolve and certificates of cancellation in accordance with the
LLC Act and the laws of any other states or jurisdictions in which the
Liquidator deems such filing necessary or advisable.

         Section 1.6 Term. The term of Diamond commenced on the date the
certificate of formation described in Section 18-201 of the LLC Act (as amended
from time to time, the "DIAMOND CERTIFICATE OF FORMATION") was filed in the
office of the Secretary of State in accordance with the LLC Act and shall
continue until the winding up and liquidation of Diamond and the completion of
its business following a Liquidating Event as provided in Article XII.



                                       3
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                                                           Diamond LLC Agreement

         Section 1.7 Title to Diamond Property. All Diamond Property shall be
owned by Diamond as an entity, and no Member shall have any ownership interest
in such property in its individual name or right. Each Member's interest in
Diamond shall be personal property for all purposes. Diamond shall hold all of
its property in the name of Diamond and not in the name of any Member.

         Section 1.8 Payments of Individual Obligations. Diamond's credit and
assets shall be used solely for the benefit of Diamond, and no asset of Diamond
shall be transferred or encumbered for or in payment of any individual
obligation of any Member.

                                   ARTICLE II

                                   DEFINITIONS

         Section 2.1 Definitions. Unless otherwise defined herein or the context
otherwise requires, capitalized terms used in this Diamond LLC Agreement
(including the Preliminary Statements and the Schedules and Exhibits hereto)
shall have the meanings set forth in Section 1.01 of Annex A to the Amended and
Restated Participation Agreement dated as of the Signing Date (as amended,
restated, supplemented or otherwise modified from time to time pursuant to the
provisions thereof and any other Transaction Document applicable thereto, the
"PARTICIPATION AGREEMENT"), among El Paso, EPED Holding, EPED B, Investor, the
Co-Issuer, Jewel, Topaz, Emerald, Citrine, Garnet, Diamond, Diamond Holdings,
Amethyst, Aquamarine, Peridot, the Share Trust, the Management Company (each as
defined therein), Wilmington Trust Company and The Bank of New York.

         Section 2.2 Rules of Construction. This Diamond LLC Agreement and the
definitions referred to in Section 2.1 shall be governed by, and construed in
accordance with, the rules of construction set forth in Section 1.02 of Annex A
to the Participation Agreement.

                                   ARTICLE III

        INTERESTS; MEMBERS; CAPITAL CONTRIBUTIONS; ADDITIONAL AGREEMENTS

         Section 3.1 Interests. There shall be two classes of Diamond Interests:
a Diamond Class A Member Interest and a Diamond Class B Member Interest.
Certificates in the form attached as Exhibit A hereto (each, a "CERTIFICATE OF
INTEREST") shall be issued to each Diamond Class A Member and Diamond Class B
Member to evidence their respective Diamond Interests herein. Each of the
parties hereto hereby acknowledges and agrees that the Diamond Interests shall
constitute "securities" governed by Article 8 of the Uniform Commercial Code as
in effect in any applicable jurisdiction. The holder of the Diamond Class A
Member Interest shall have all of the rights and obligations provided to the
Diamond Class A Member under this Diamond LLC Agreement and the LLC Act, and the
holder of the Diamond Class B Member Interest shall have all of the rights and
obligations provided to the Diamond Class B Member under this Diamond LLC
Agreement and the LLC Act.



                                       4
<PAGE>
                                                           Diamond LLC Agreement


         Section 3.2 Diamond Class A Member and Diamond Class B Members.

         (a) Diamond Class A Member. On and as of the Closing Date, Investor, as
Diamond Class A Member, made a Capital Contribution to Diamond in Cash in the
amount of $238,330,926.40, and after giving effect to such Capital Contribution
and the other transactions effected on and as of the Closing Date, (i) the name
and address of the Diamond Class A Member and the Capital Account balance of the
Diamond Class A Member was reflected in the books and records of Diamond as set
forth in Schedule 3.2(a) hereto, and (ii) the Managing Member executed on behalf
of Diamond a Certificate of Interest in the name of the Diamond Class A Member
representing its Diamond Class A Member Interest.

         (b) Diamond Class B Member. On and as of the Closing Date, Garnet's
interest in Diamond under the Original Diamond LLC Agreement was converted into
a Diamond Class B Member Interest and Garnet, as the Diamond Class B Member,
made Capital Contributions to Diamond of (x) the Specified Diamond Assets
indicated on Schedule 3.2(b) as being contributed on the Closing Date and (y)
$280,782,709.63 in Cash. After giving effect to such Capital Contributions and
the other transactions effected on and as of the Closing Date, (i) the name and
address of the Diamond Class B Member and the Capital Account balance of the
Diamond Class B Member on and as of the Closing Date was reflected in the books
and records of Diamond as set forth in Schedule 3.2(a) hereto, and (ii) the
Managing Member executed on behalf of Diamond a Certificate of Interest in the
name of the Diamond Class B Member representing its Diamond Class B Member
Interest.

         Section 3.3 Additional Capital Contributions.

         (a) Capital Contributions. The Diamond Class B Member shall be
permitted (and, in the case of clauses (ii) and (iii), deemed) to make the
additional Capital Contributions to Diamond described in clauses (i), (ii),
(iii) and (v) below, and the Diamond Class A Member shall be deemed to make
additional Capital Contributions to Diamond as set forth in clause (iv) below:

                  (i) Capital Contributions of Diamond Permitted Assets. The
         Diamond Class B Member may at any time (x) contribute to Diamond Cash,
         Financial Investments (other than Financial Investments of the type
         described in clause (g) of the definition thereof), EPED B Demand
         Loans, Garnet Demand Loans and the Specified Diamond Assets indicated
         on Schedule 3.2(b) as not being contributed on the Closing Date and (y)
         subject to Sections 6.3(b), contribute to Diamond additional Diamond
         Permitted Assets.

                  (ii) Deemed Capital Contributions. The Diamond Class B Member
         shall be deemed to have made (x) on the date any External Proceeds
         (without duplication) are distributed under Section 5.05 of the
         Indenture and/or Section 5.05 of the New Indenture, a Capital
         Contribution to Diamond in an amount equal to the Diamond External
         Amount and (y) on the date that any FRCA Proceeds are received by
         Diamond arising out of a claim in connection with any Garnet Property,
         a Capital Contribution to Diamond in an amount equal to the FRCA
         Proceeds attributable to such Garnet Property, and, in each case, the
         Diamond Class B Member's Capital Account shall be increased by the
         amount of such deemed Capital Contribution.



                                       5
<PAGE>
                                                           Diamond LLC Agreement


                  (iii) Capital Contributions of Contingent Remarketing
         Proceeds. Any Contingent Remarketing Proceeds that are paid to Diamond
         under the Indenture shall be deemed to have been paid to Diamond as a
         Capital Contribution by the Diamond Class B Member.

                  (iv) Overfund Account. The Diamond Class A Member shall be
         deemed to have made, on the date any amounts are deposited into (1) the
         Overfund Account pursuant to Section 5.04 of the Indenture or (2) the
         Dollar Collection Account pursuant to Section 5.02(b)(v) of the
         Indenture, a Capital Contribution to Diamond in an amount equal to the
         lesser of (x) such amounts so deposited and (y) the sum of the accrued
         and unpaid Diamond Class A Member's Cumulative Priority Return and the
         accrued and unpaid Diamond Class A Member's Cumulative Extension Period
         Return, as applicable.

                  (v) Required Capital Contribution by the Diamond Class B
         Member. (1) On the Extension Period Commencement Date, the Diamond
         Class B Member shall make a Capital Contribution to Diamond of an
         amount equal to the excess (if any) of (A) the sum of (i) the aggregate
         Fair Market Value (as set forth on Schedule 3.2(b)) of the Specified
         Diamond Assets indicated on Schedule 3.2(b) as not being contributed on
         the Closing Date and (ii) the excess (if any) of (x) the aggregate
         amount of Distributions that have been made to the Diamond Class B
         Member on or prior to the Extension Period Commencement Date over (y)
         the excess (if any) of (I) cumulative Net Income and items of income
         and gain allocated to the Diamond Class B Member for the current and
         all prior Allocation Periods pursuant to Section 4.1 over (II)
         cumulative Net Losses and items of deduction and loss allocated to the
         Diamond Class B Member for the current and all prior Allocation Periods
         pursuant to Section 4.1 over (B) the aggregate amount of Capital
         Contributions to Diamond made after the Closing Date but prior to the
         Extension Period Commencement Date by the Diamond Class B Member
         pursuant to (x) Section 3.3(a)(i) to the extent that the Diamond Class
         B Member was not required to make such Capital Contribution pursuant to
         the terms hereof and (y) clause (2) of this Section 3.3(a)(v).

                  (2) If a Note Trigger Event or Shareholder Trigger Event
         occurs prior to the Extension Period Commencement Date then, on the
         applicable Asset Remedy Standstill Expiration Date, the Diamond Class B
         Member shall make a Capital Contribution to Diamond of an amount equal
         to the excess (if any) of (A) the aggregate Fair Market Value (as set
         forth on Schedule 3.2(b)) of the Specified Diamond Assets indicated on
         Schedule 3.2(b) as not being contributed on the Closing Date over (B)
         the aggregate amount of all Capital Contributions to Diamond made by
         the Diamond Class B Member after the Closing Date but prior to the
         applicable Asset Remedy Standstill Expiration Date pursuant to Section
         3.3(a)(i) to the extent that the Diamond Class B Member was not
         required to make such Capital Contributions pursuant to the terms
         hereof.

                  (3) If proceeds of (x) an Asset Remedy, (y) asset sales or
         asset realizations in connection with an acceleration of the New Notes
         as result of a New Indenture Event of Default and the enforcement of,
         or levy on, any judgment obtained in connection therewith or (z) an
         Asset Disposition are distributed to the New Noteholders pursuant to
         Section 5.05 of the New Indenture, then the Diamond Class B Member
         shall make a



                                       6
<PAGE>

                                                           Diamond LLC Agreement

         Capital Contribution to Diamond no later than the earlier of (A) 12:00
         noon New York City time on the tenth Business Day following the
         repayment in full of the New Notes and (B) the occurrence of an "Event
         of Default" described in Section 7.1(e) of the El Paso Credit Facility
         Agreement with respect to El Paso, (and regardless of whether notice is
         given to the Class B Member) in an amount equal to the aggregate amount
         of such proceeds distributed to the New Noteholders from time to time
         pursuant to the New Indenture.

         (b) Required Capital Contributions by the Diamond Class A Member. So
long as (x) EPED B is the managing member of the Diamond Class B Member and the
Extension Period Commencement Date has not occurred and (y) no Note Trigger
Event, Specified Equity Event or Shareholder Trigger Event has occurred, the
Diamond Class B Member may, from time to time on any Business Day after the
Closing Date, request additional Capital Contributions by the Diamond Class A
Member by delivering to the Diamond Class A Member and the Indenture Trustee a
notice requesting additional Cash Capital Contributions by the Diamond Class A
Member, specifying (i) the amount of such requested Capital Contribution and
(ii) the Business Day on which such Capital Contribution shall be made (which
shall be no less than one Business Day from the date notice is delivered), and
the delivery of such notice shall be deemed to be a demand by Diamond and the
Diamond Managing Member for a Capital Contribution by the Diamond Class A Member
of the amount in Cash specified in such notice on the Business Day specified in
such notice. The Diamond Class A Member hereby agrees that it shall, upon its
receipt of any such notice, make (or cause to be made on its behalf) the Capital
Contribution to Diamond in the amount and on the Business Day specified in such
notice; provided, however, that Investor shall not be required to make any such
additional Capital Contribution to the extent that the requested Capital
Contribution exceeds the amount of Excess Securities Proceeds then held by the
Indenture Trustee (or Fiscal Agent) on behalf of Investor in Cash on the date
specified in such notice for such Capital Contribution in such notice (after
giving effect to any repayments of El Paso Debt Securities and non-Cash
Financial Investments into which the Excess Securities Proceeds were invested,
to the extent actually repaid). Upon receipt by Diamond of a Capital
Contribution by the Diamond Class A Member pursuant to this Section 3.3(b), (x)
Diamond shall invest such funds in Financial Investments or other Diamond
Permitted Assets (including the making of one or more Capital Contributions to
Aquamarine and/or Peridot of all or a portion of such funds) and/or use such
funds to fund any other permitted use of funds by Diamond (including any
Distribution permitted under Article V and the making of one or more loans to
Peridot), in each case as directed by the Managing Member in its sole
discretion, and (y) the Diamond Class A Member's Capital Account shall be
increased by the amount of such Capital Contribution.

         (c) Capital Contributions by Diamond Class A Member. The Diamond Class
A Member shall not be permitted to make Capital Contributions other than (i) the
Capital Contribution described in Section 3.2(a), (ii) Capital Contributions
required to be made pursuant to Section 3.3(b), and (iii) the deemed Capital
Contributions made pursuant to Section 3.3(a)(iv), in each case without the
prior written consent of all of the Members.

         (d) Manner or Payment; Interest on Overdue Payments. Payments under
this Section 3.3 will be made on the due date for value on that date, in Dollars
and immediately available funds. If the Diamond Class B Member defaults in the
performance of any payment



                                       7
<PAGE>
                                                           Diamond LLC Agreement


obligation under Section 3.3(a)(v), it will be required to pay interest (before
as well as after judgment) on the overdue amount to Diamond on demand in the
same currency and funds as the overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at a rate per annum equal to the Alternate Base Rate plus 2% per
annum. Such interest will be calculated on the basis of daily compounding and
the actual number of days elapsed.

         Section 3.4 Additional Agreements Among Members.

         (a) Return of Capital Contributions. Except as otherwise provided in
Article V, Article XI or Article XII or in the LLC Act, no Member shall be
entitled to demand or receive a return of its Capital Contributions or withdraw
its capital from Diamond without the consent of all Members. Under circumstances
requiring a return of any Capital Contributions, no Member shall have the right
to receive property other than Cash except as specifically provided in this
Diamond LLC Agreement.

         (b) Return on Capital. No Member shall receive any interest or return
with respect to its Capital Contributions or its Capital Account, except as
otherwise provided in this Diamond LLC Agreement.

         (c) Obligations of Diamond. No Member (including the Managing Member)
shall be liable for the debts, liabilities, contracts or any other Obligations
of Diamond. Except as otherwise required by mandatory provisions of Applicable
Law or the provisions of this Article III, the provisions of Section 12.3 and
the obligation of the Diamond Class A Member under Section 3.3(b), a Member
shall not be required to lend any funds to Diamond or to make any additional
Capital Contributions to Diamond. No Member shall have personal liability for
the repayment of any Capital Contributions of the other Members.

         (d) Other Investments. Subject, in the case of the Managing Member, to
Sections 6.5(d) and 6.5(e), each Member acknowledges that the other Members and
their Affiliates are free to engage or invest in an unlimited number of
activities or businesses, any one or more of which may be related to the
activities or businesses of Diamond, without having or incurring any obligation
to offer any interest in such activities or businesses to Diamond or any Member,
and neither this Diamond LLC Agreement nor any activity undertaken pursuant to
this Diamond LLC Agreement shall prevent any Member or its Affiliates from
engaging in such activities, or require any Member to permit Diamond or any
Member or its Affiliates to participate in any such activities, and as a
material part of the consideration for the execution of this Diamond LLC
Agreement by each Member, each Member hereby waives, relinquishes, and renounces
any such right or claim of participation. Each Member acknowledges that certain
conflicts of interest may thus arise and hereby agrees that the specific rights
with respect to the Members' and their Affiliates' freedom of action provided in
this Section 3.4(d), together with the other provisions of this Diamond LLC
Agreement, are sufficient to protect their respective interests in relation to
such possible conflicts and are to be in lieu of all other possible limitations
which might otherwise be implied in fact, in law or in equity.



                                       8
<PAGE>
                                                           Diamond LLC Agreement


                                   ARTICLE IV

                      ALLOCATION OF NET INCOME AND NET LOSS

         Section 4.1 Allocation of Net Income and Net Losses. The Members agree
to treat Diamond as a partnership and the Diamond Members as partners thereof
for U.S. federal income tax purposes and shall file all tax returns accordingly.
Except as otherwise provided in this Article IV, Diamond's Net Income or Net
Losses, as the case may be, and each item of income, gain, loss and deduction
entering into the computation thereof, for each Allocation Period ending prior
to the earlier of (x) the day immediately following the Mark-to-Market
Measurement Date and (y) the Extension Period Termination Date, shall be
allocated to the Diamond Members as follows:

         (a) Net Income. Net Income shall be allocated in the following order
and priority:

                  (i) First, 100% to the Diamond Class B Member in an amount
         equal to the excess, if any, of (x) the cumulative Net Losses and items
         of deduction and loss allocated to the Diamond Class B Member pursuant
         to Section 4.1(b)(iii) for the current and all prior Allocation
         Periods, over (y) the cumulative Net Income and items of income and
         gain allocated to the Diamond Class B Member pursuant to this Section
         4.1(a)(i) for all prior Allocation Periods;

                  (ii) Second, 5% to the Diamond Class A Member and 95% to the
         Diamond Class B Member in an amount equal to the excess, if any, of (x)
         the cumulative Net Losses and items of deduction and loss allocated to
         the Diamond Members pursuant to Section 4.1(b)(ii) for the current and
         all prior Allocation Periods, over (y) the cumulative Net Income and
         items of income and gain allocated to the Diamond Members pursuant to
         this Section 4.1(a)(ii) for all prior Allocation Periods; and

                  (iii) Third, 100% of the remainder, if any, to the Diamond
         Class B Member.

         (b) Net Losses. Net Losses shall be allocated in the following order
and priority:

                  (i) First, 100% to the Diamond Class B Member to the extent of
         the excess, if any, of (i) the cumulative Net Income and items of
         income and gain allocated pursuant to Section 4.1(a)(iii) for the
         current and all prior Allocation Periods, over (ii) the cumulative Net
         Losses and items of deduction and loss allocated pursuant to this
         Section 4.1(b)(i) for all prior Allocation Periods;

                  (ii) Second, 5% to the Diamond Class A Member and 95% to the
         Diamond Class B Member until the cumulative amount of Net Losses and
         items of deduction and loss allocated pursuant to this Section
         4.1(b)(ii) in the current and all prior Allocation Periods exceeds the
         cumulative Net Income and items of income and gain allocated pursuant
         to Section 4.1(a)(ii) for the current and all prior Allocation Periods
         by $700,000,000;

                  (iii) Third, 100% of the remainder, if any, to the Diamond
         Class B Member.



                                       9
<PAGE>
                                                           Diamond LLC Agreement


                  Section 4.2 Allocations After the Extension Period or the
         Mark-to-Market Measurement Date. If no Diamond Liquidating Event shall
         have occurred, then for each Allocation Period ending on or after the
         earlier of (a) the day immediately following a Mark-to-Market
         Measurement Date and (b) the Extension Period Termination Date, all
         items of Net Income or Net Loss, as the case may be, and each item of
         income, gain, loss or deduction shall be allocated 100% to the Diamond
         Class B Member, except as provided in the Diamond Regulatory
         Allocations.

         Section 4.3 [Reserved].

         Section 4.4 Special Tax Allocations.

         (a) Items Relating to Diamond Extraordinary Liabilities.

                  (i) Items of deduction in an amount equal to Extraordinary
         Liabilities incurred by Diamond in any Allocation Period shall be
         allocated 100% to the Diamond Class B Member.

                  (ii) Items of Gross Income in an amount equal to the Expense
         Recoveries realized by Diamond or any Diamond Project Company in any
         Allocation Period shall be allocated 100% to the Diamond Class B Member
         in such Allocation Period.

         In applying this Section 4.4(a), the amounts to be allocated shall be
the component items of income, gain, loss and deduction that constitute
Diamond's distributive share of income, gain, loss and deduction from any
Diamond Project Company or any Qualified Energy Company that is directly or
indirectly (in whole or in part) owned by Diamond or any Diamond Operating
Subsidiary, even if such component items are not required to be separately
stated.

         (b) Minimum Gain Chargeback/Member Minimum Gain Chargeback. If there is
a net decrease in "partnership minimum gain" (within the meaning of Regulation
Section 1.704-2(d)) for an Allocation Period with respect to Diamond, then there
shall be allocated to each Diamond Member items of income and gain of Diamond
for that Allocation Period (and if necessary subsequent Allocation Periods)
equal to that Diamond Member's share of the net decrease in partnership minimum
gain (within the meaning of Regulation Section 1.704-2(g)(2)), subject to the
exceptions set forth in Regulation Section 1.704-2(f)(2) and (3), and to any
exceptions provided by the Commissioner of the Internal Revenue Service pursuant
to Regulation Section 1.704-2(f)(5), provided, that if Diamond has any
discretion as to an exception provided pursuant to Regulation Section
1.704-2(f)(5), the Tax Matters Member may exercise reasonable discretion on
behalf of Diamond, which discretion shall be exercised in good faith so as not
to prejudice the interests of any Diamond Member. The foregoing is intended to
be a "minimum gain chargeback" provision as described in Regulation Section
1.704-2(f) and shall be interpreted and applied in all respects in accordance
with that Regulation.

         If during an Allocation Period there is a net decrease in "partner
nonrecourse debt minimum gain" (as determined in accordance with Regulation
Section 1.704-2(i)(3)) with respect to Diamond, then, in addition to the
amounts, if any, allocated pursuant to the preceding paragraph, any Diamond
Member with a share of that partner nonrecourse debt minimum gain (determined in
accordance with Regulation Section 1.704-2(i)(5)) as of the beginning of the
Allocation Period shall,



                                       10
<PAGE>
                                                           Diamond LLC Agreement


subject to the exceptions set forth in Regulation Section 1.704-2(i)(4), be
allocated items of income and gain of such Allocation Period for the Allocation
Period (and, if necessary, for subsequent Allocation Periods) equal to that
Diamond Member's share of the net decrease in the partner nonrecourse minimum
gain. The foregoing is intended to be the "chargeback of partner nonrecourse
debt minimum gain" required by Regulation Section 1.704-2(i)(4) and shall be
interpreted and applied in all respects in accordance with that Regulation.

         (c) Qualified Income Offset. If during any Allocation Period a Diamond
Member unexpectedly receives any adjustment, allocation or Distribution
described in Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), which
causes or increases a deficit balance in such Diamond Member's Adjusted Diamond
Capital Account, then there shall be allocated to such Diamond Member items of
income and gain (consisting of a pro rata portion of each item of income,
including gross income, and gain of Diamond for such Allocation Period) in an
amount and manner sufficient to eliminate such deficit as quickly as possible
provided that an allocation pursuant to this Section 4.4(c) shall be made only
if and to the extent that the Diamond Class A Member would have a deficit
balance in its Adjusted Diamond Capital Account after all other allocations
provided for in this Article IV have been tentatively made as if this Section
4.4(c) were not in this Diamond LLC Agreement. The foregoing is intended to be a
"qualified income offset" provision as described in Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted and applied in all respects in
accordance with that Regulation.

         (d) Member Nonrecourse Deductions. Notwithstanding anything to the
contrary in this Article IV, losses, deductions, or expenditures subject to Code
Section 705(a)(2)(B) that are attributable to a particular partner nonrecourse
liability shall be allocated to the Diamond Member that bears the economic risk
of loss for the liability in accordance with the rules of Regulation Section
1.704-2(i).

         (e) Nonrecourse Deductions. Nonrecourse deductions, within the meaning
of Regulation Sections 1.704-2(b)(1) and 1.704-2(c) shall be allocated 100% to
the Diamond Class B Member.

         (f) Section 754 Adjustments. To the extent Diamond Capital Accounts are
required under Code Section 734(b), including by reason of Regulation Section
1.704-1(b)(2)(iv)(m)(2) or (4), to reflect the adjustment to the adjusted tax
basis of an asset as a result of the Distribution to the Diamond Class A Member
in complete liquidation of the Diamond Class A Member Interest, the amount of
such adjustment shall be treated as an item of gain (if the adjustment is an
increase) or loss (if the adjustment is a decrease) that is allocated to the
Diamond Members in accordance with their interests pursuant to Regulation
Section 1.704-1(b)(2)(iv)(m)(2) or to the Member to whom such Distribution was
made pursuant to Regulation Section 1.704-1(b)(2)(iv)(m)(4) as applicable.

         (g) Allocations Relating to Taxable Issuance of Membership Interests.
Any income, gain, loss or deduction realized as a direct or indirect result of
the issuance of an interest by Diamond to a Member, other than pursuant to Code
Section 707(a)(2) ("ISSUANCE ITEMS") shall be allocated among the Members and
other such allocations to be made under this Diamond LLC Agreement shall be
adjusted so that, to the extent possible, the net amount of such Issuance Items,
together with all other allocations under this Diamond LLC Agreement to the
Diamond



                                       11
<PAGE>
                                                           Diamond LLC Agreement


Class A Member, shall be equal to the net amount that would have been allocated
to such Member if the Issuance Items had not been realized.

         (h) [Reserved].

         (i) Allocations Relating to Diamond Retirement Option or Diamond
Purchase Option. Notwithstanding any other provision of this Article IV, if the
Diamond Class A Member Interest is retired pursuant to Section 11.1 or is
purchased pursuant to Section 11.2, then items of income, gain, loss, deduction,
and expense of the year of retirement or of purchase shall be allocated as
necessary to cause the Diamond Class A Member's Capital Account (after all
adjustments hereunder) to equal the amount payable under Section 11.1, in the
case of the Diamond Retirement Option, or Section 11.2, in the case of the
Diamond Purchase Option (taking into account Section 11.2(h) to the extent
applicable).

         (j) Allocations Relating to a Repurchase of the Diamond Class A Member
Interest. Notwithstanding any other provision of this Article IV, if the Diamond
Class A Member Interest is repurchased pursuant to Section 11.5(e), then items
of income, gain, loss, deduction, and expense of the year of repurchase shall be
allocated as necessary to cause the Diamond Class A Member's Capital Account
(after all adjustments hereunder) to equal the excess of the amount payable to
repurchase such interest, pursuant to Section 11.5(e), over any portion of such
amount applied towards either the Diamond Class A Member's Cumulative Priority
Return or the Diamond Class A Member's Cumulative Extension Period Return,
pursuant to Section 11.5(e)(i).

         Section 4.5 Curative Allocations. The allocations set forth in Sections
4.4(b), 4.4(c), 4.4(d), 4.4(e), and 4.4(f) (the "DIAMOND REGULATORY
ALLOCATIONS") are intended to comply with certain requirements of the
Regulations. It is the intent of the Members that, to the extent possible, all
Diamond Regulatory Allocations shall be offset either with other Diamond
Regulatory Allocations or with allocations of other items of income, gain, loss
or deduction of Diamond pursuant to this Section 4.5. Therefore, notwithstanding
any other provision of this Article IV (other than the Diamond Regulatory
Allocations), the Managing Member shall make such offsetting allocations of
income, gain, loss or deduction of Diamond in whatever manner it determines to
be appropriate so that, after such offsetting allocations are made, each
Member's Capital Account balance is, to the extent possible, equal to the
Capital Account balance such Diamond Member would have had if the Diamond
Regulatory Allocations were not part of this Diamond LLC Agreement and all items
of Diamond were allocated pursuant to this Article IV without regard to the
Diamond Regulatory Allocations. In exercising its discretion under this Section
4.5, the Diamond Managing Member shall take into account future Diamond
Regulatory Allocations under Section 4.4(c) that, although not yet made, are
likely to offset other Diamond Regulatory Allocations previously made under
Sections 4.4(d) and 4.4(e).

         Section 4.6 Loss Limitation. The Net Losses allocated pursuant to
Section 4.1(b) and the items of loss or deduction allocated pursuant to Sections
4.4 and 4.5 to the Diamond Class A Member shall not exceed the maximum amount of
Net Losses and items of loss or deduction that can be so allocated without
causing the Diamond Class A Member to have a deficit balance in its Adjusted
Diamond Capital Account at the end of any Allocation Period. All Net Losses and
items of loss or deduction in excess of the limitation set forth in this Section
4.6 shall be allocated to the Diamond Class B Member.



                                       12
<PAGE>
                                                           Diamond LLC Agreement


         Section 4.7 Other Allocation Rules.

         (a) Net Income, Net Losses and any other items of income, gain, loss or
deduction shall be allocated to the Diamond Members pursuant to this Article IV
as of the last day of each Allocation Period; provided that Net Income, Net
Losses and such other items shall also be allocated at such other times as the
Gross Asset Values of Diamond Property are adjusted pursuant to clause (b) of
the definition of Gross Asset Value.

         (b) The Diamond Members hereby agree to be bound by the provisions of
this Article IV in reporting their shares of Diamond income and loss for income
tax purposes, except to the extent otherwise required by law. The Diamond
Members agree, for purposes of maintaining their Diamond Capital Accounts, to be
bound by the allocations contained in this Article IV, notwithstanding any
allocations for income tax purposes.

         (c) Solely for purposes of determining the Diamond Members'
proportionate share of the "excess non recourse liabilities" of Diamond within
the meaning of Regulation Section 1.752-3(a)(3), the Diamond Members' interests
in profits of Diamond are as follows: 0% to the Diamond Class A Member and 100%
to the Diamond Class B Member.

         (d) To the extent permitted by Regulation Section 1.704-2(h)(3), the
Managing Member shall endeavor to treat Distributions of Cash as having been
made from the proceeds of a nonrecourse liability (within the meaning of
Regulation Section 1.704-2(b)(3)) only to the extent that such Distributions
would cause or increase any deficit balance of the Diamond Class A Member's
Adjusted Diamond Capital Account.

         Section 4.8 Tax Allocations; Code Section 704(c). In accordance with
Code Section 704(c) and the applicable Regulations thereunder, income, gain,
loss, and deduction with respect to any property contributed to Diamond shall,
solely for tax purposes, be allocated among the Diamond Members so as to take
account of any variation between the adjusted basis of such property to Diamond
for federal income tax purposes and its Initial Gross Asset Value.

         In the event the Gross Asset Value of any asset of Diamond is adjusted
pursuant to clause (b) or (d) of the definition of Gross Asset Value, subsequent
allocations of income, gain, loss, and deduction with respect to such asset
shall take account of any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the same manner as
under Code Section 704(c) and the applicable Regulations thereunder.

         Any elections or other decisions relating to such allocations shall be
made by the Diamond Managing Member in any manner that reasonably reflects the
purpose and intention of this Diamond LLC Agreement, provided that Diamond shall
elect to apply any allocation method permitted by the Regulations under Code
Section 704(c). In furtherance of the foregoing, Diamond shall use any
reasonable method, in the discretion of the Diamond Managing Member, such that
the amount of such tax items allocable to the Diamond Class A Member hereunder
for any Allocation Period shall be equal in the aggregate to the amount of book
deductions allocable to the Diamond Class A Member hereunder for such Allocation
Period. Allocations pursuant to this Section 4.8 are solely for purposes of
federal, state, and local taxes and shall not affect, or in any way be taken
into account in computing, any Diamond Member's Capital Account or share



                                       13
<PAGE>
                                                           Diamond LLC Agreement


of Net Income, Net Losses, other items, or Distributions pursuant to any
provision of this Diamond LLC Agreement.

         Except as otherwise provided in this Diamond LLC Agreement, for
federal, state and local income tax purposes, all items of income, gain, loss,
deduction, and any other allocations not otherwise provided for shall be
allocated to the Diamond Members in the same manner as its correlative item of
"book" income, gain, loss or deduction is allocated pursuant to Sections 4.1,
4.2 and 4.4.

         To the extent that allocations made pursuant to this Article IV for any
Allocation Period ending prior to the commencement of the Extension Period, if
any, include the allocation of an item of income or gain that is recaptured as
ordinary income under Code Sections 1245, 1250 and 1254 and that is attributable
to deductions taken prior to the Closing Date, such ordinary income shall be
allocated to the Member to whom the deduction was allocated.

         Section 4.9 Order of Allocations. All allocations made pursuant to this
Article IV shall be made in the following order:

                  (i) Section 4.4(i);

                  (ii) Section 4.4(j);

                  (iii) Section 4.2;

                  (iv) Section 4.4(a);

                  (v) Section 4.4(b);

                  (vi) Section 4.4(c);

                  (vii) Section 4.4(d);

                  (viii) Section 4.4(e);

                  (ix) Section 4.4(g); and

                  (x) Section 4.1.

         Such provisions shall be applied as if all Distributions and
allocations were made at the end of the applicable Allocation Period. Where any
provision depends on the balance of a Capital Account of any Member, that
Capital Account shall be determined after the operation of all preceding
provisions for the applicable Allocation Period. These allocations shall be made
consistently with the requirements of Regulation Section 1.704-2(j).



                                       14
<PAGE>
                                                           Diamond LLC Agreement


                                    ARTICLE V

                           DISTRIBUTIONS; WITHDRAWALS

         Section 5.1 Payments.

         (a) Diamond Class A Member's Cumulative Priority Return. Except as
otherwise provided in Article XII, on or before 3:30 p.m. (New York City time)
on the second Business Day next preceding each Distribution Date occurring prior
to the Extension Period Commencement Date, Available Cash of Diamond shall be
paid 100% to the Diamond Class A Member, until the Diamond Class A Member
receives an amount equal to the excess, if any, of (i) the Diamond Class A
Member's Cumulative Priority Return as of such Distribution Date, over (ii) all
prior payments to the Diamond Class A Member pursuant to this Section 5.1(a)
(including any deemed Section 5.1(a) payments pursuant to Sections 5.4(a)(i) and
5.4(b)(i)). Such amount shall be treated as a "guaranteed payment" within the
meaning of Code Section 707(c) and, whether or not paid, shall not affect the
Diamond Class A Member's Capital Account.

         (b) Extension Period.

                  (i) Subject to Section 5.1(b)(iii), on or before 10:00 a.m.
         (New York City time) on each Extension Period Payment Date (or, if such
         date is not a Business Day, on the next succeeding Business Day),
         Diamond shall pay the Diamond Class A Member all Available Cash of
         Diamond (after the payments owing pursuant to Section 5.1(a) are made),
         until the Diamond Class A Member receives an amount equal to the excess
         if any of (x) the Diamond Class A Member's Cumulative Extension Period
         Return, over (y) all prior payments to the Diamond Class A Member
         pursuant to this Section 5.1(b)(i) (including any deemed Section
         5.1(b)(i) payments pursuant to Sections 5.4(a)(ii) and 5.4(b)(ii)).
         Such amounts shall be treated as a "guaranteed payment" within the
         meaning of Code Section 707(c) and, whether or not paid, shall not
         affect the Diamond Class A Member's Capital Account.

                  (ii) Subject to Section 5.1(b)(iii), on or before 10:00 a.m.
         (New York City time) on each Extension Period Payment Date (or, if such
         date is not a Business Day, on the next succeeding Business Day),
         Diamond shall make a Distribution to the Diamond Class A Member of all
         Available Cash of Diamond (after the payments owing pursuant to
         Sections 5.1(a) and 5.1(b)(i) are made) until the Capital Account of
         the Diamond Class A Member shall equal zero (after taking into account
         all allocations required to be made pursuant to Article IV as of such
         Extension Period Payment Date).

                  (iii) The Diamond Class A Member may, by providing written
         notice thereof to the Managing Member no later than three Business Days
         prior to any Extension Period Payment Date, elect not to receive all or
         any portion of the Diamond Class A Member's Cumulative Extension Period
         Return payable under Section 5.1(b)(i) and/or Distributions pursuant to
         Section 5.1(b)(ii) on that or any subsequent Extension Period Payment
         Date occurring prior to the fourth anniversary of the Extension Period
         Commencement Date, in which case such amounts shall be treated as
         accrued but unpaid Diamond Class A Member's Extension Period Return or
         amounts required to be Distributed pursuant to



                                       15
<PAGE>
                                                           Diamond LLC Agreement

         Section 5.1(b)(ii). Such notice may be revoked in a subsequent notice
         delivered to the Managing Member no later than three Business Days
         prior to any Extension Period Payment Date.

         (c) Distributions in Connection with Asset Remedy, Asset Disposition or
Asset Sales.

                  (i) Prior to the Extension Period. In connection with (A) the
         sale of or realization upon one or more assets pursuant to an exercise
         of the Diamond Asset Remedy, (B) the consummation of an asset sale or a
         realization upon an asset that is an Investor Asset Sale, (C) the
         consummation of an Asset Disposition or (D) the receipt by Diamond of
         any FRCA Proceeds, in each case prior to the Extension Period
         Commencement Date, Diamond shall pay to the Diamond Class A Member, not
         later than 12:00 noon (New York City time) on the date of any such sale
         of assets(s), realizations(s) or receipt of FRCA Proceeds, as
         applicable, (or, if such sale, realization or disposition or receipt of
         FRCA Proceeds occurs after 11:00 a.m. (New York City time), not later
         than 12:00 noon on the next succeeding Business Day), Cash in an
         aggregate amount equal to the lesser of (1) the aggregate proceeds of
         such sale or realization or the aggregate amount of such FRCA Proceeds,
         as applicable, and (2) the sum of the accrued and unpaid Diamond Class
         A Member's Cumulative Priority Return and the positive balance in the
         Diamond Class A Member's Capital Account, in each case, as of such date
         after taking into account all allocations required to be made to the
         Diamond Class A Member pursuant to Article IV as of such date;
         provided, that the payment by Diamond under this Section 5.1(c) of the
         proceeds of (A) any sale of or realization upon assets pursuant to an
         exercise of the Diamond Asset Remedy in connection with a Specified
         Equity Event after the repayment in full of all Outstanding Notes or
         (B) the consummation of an Asset Disposition shall be subject to the
         right of the Diamond Class A Member to elect not to receive all or a
         portion of such proceeds pursuant to Section 6.3(i). Payments pursuant
         to this Section 5.1(c)(i) shall be treated, for GAAP accounting, tax
         and all other purposes of the Transaction Documents, as follows:

                           (x) first, as a payment to the Diamond Class A Member
                  pursuant to Section 5.1(a) in an amount up to the accrued and
                  unpaid Diamond Class A Member's Cumulative Priority Return;
                  and

                           (y) second, the excess, as a Distribution to the
                  Diamond Class A Member.

                  (ii) During the Extension Period. In connection with (A) the
         sale of or realization upon one or more assets pursuant to an exercise
         of the Asset Remedy, (B) the consummation of an asset sale or a
         realization upon an asset that is an Investor Asset Sale or (C) the
         consummation of an Asset Disposition, in each case on or after the
         Extension Period Commencement Date, Diamond shall pay or Distribute
         such amounts as set forth in Section 5.1(b); provided, that no payments
         or Distributions shall be made to the Diamond Class A Member pursuant
         to this clause (c)(ii) after the Extension Period Termination Date;
         provided, further, that the preceding proviso shall not be applicable
         to any payments or Distributions to the Diamond Class A Member pursuant
         to this clause (c)(ii) with respect to the proceeds of any such asset
         sale, realization or Asset



                                       16
<PAGE>
                                                           Diamond LLC Agreement


         Disposition initiated prior to the Extension Period Termination Date
         that have not been paid or Distributed on or prior to the Extension
         Period Termination Date.

         (d) Distributions in Cash. Except as permitted under Section 11.1(d) or
12.9, no Distribution shall be made to the Diamond Class A Member other than in
the form of Cash.

         (e) Distributions to Diamond Class B Member. Prior to the Extension
Period Commencement Date and except to the extent such Available Cash is
required to be Distributed or paid as provided in Section 5.1(a) or 5.1(c), all
Available Cash of Diamond (net of any such Available Cash representing proceeds
of Permitted Financial Obligations of Project Companies) shall be Distributed to
the Diamond Class B Member on such dates as the Diamond Class B Member shall
direct.

         (f) No Other Distributions. Except as provided in this Section 5.1,
Section 5.3, Section 5.4(a)(iii), Section 11.1(d), Section 11.5(e)(ii) and
Article XII, no other Distributions shall be permitted other than any
Distribution made with the consent of all the Members pursuant to Section
6.3(i).

         Section 5.2 More than One Diamond Class A Member or Diamond Class B
Member.

         (a) More than One Diamond Class A Member. In the event that there is
more than one Diamond Class A Member, allocations to the Diamond Class A Member
pursuant to Article IV, Distributions and payments to the Diamond Class A
Member, and all other references in this Diamond LLC Agreement and the
Transaction Documents referring to amounts shall be divided among the Diamond
Class A Members in proportion to their respective Diamond Class A Percentages.
All references in this Diamond LLC Agreement and the other Transaction Documents
to the Diamond Class A Member (or words of similar import) shall be deemed to
refer to all of such Diamond Class A Members, collectively.

         (b) More than One Diamond Class B Member. In the event that there is
more than one Diamond Class B Member, allocations to the Diamond Class B Member
pursuant to Article IV, Distributions to the Diamond Class B Member, and all
other references in this Diamond LLC Agreement and the other Transaction
Documents referring to amounts shall be divided among the Diamond Class B
Members in proportion to their respective Diamond Class B Percentages; provided,
that all other references to the Diamond Class B Member (or words of similar
import) (including any provisions with respect to notices to or by the Diamond
Class B Member or management rights of the Diamond Class B Member) shall be
deemed to refer solely to the original Diamond Class B Member.

         Section 5.3 Amounts Withheld. All amounts withheld or required to be
withheld pursuant to the Code or any provision of any state, local or foreign
Tax law, with respect to any payment, Distribution or allocation to or by
Diamond or to or by the Members and treated by the Code (whether or not withheld
pursuant to the Code) or any other applicable Tax law as amounts payable by or
in respect of the Members or any Person owning an interest, directly or
indirectly, in such Member shall be treated as a Distribution to the Members
with respect to which such amount was withheld pursuant to this Article V for
all purposes under this Diamond LLC Agreement (including an appropriate debit to
such Member's Capital Account).


                                       17
<PAGE>
                                                           Diamond LLC Agreement


         Section 5.4 Deemed Distributions and Payments to Diamond Class A
Member.

         (a) Payment of External Proceeds. Upon the distribution (without
duplication) under Section 5.05 of the Indenture and/or under Section 5.05 of
the New Indenture of any External Proceeds, Diamond shall be deemed to have
made, for GAAP accounting and tax purposes and for all purposes of the
Transaction Documents, payments and/or Distributions in an aggregate amount
equal to the Diamond External Amount, in the order of priority as follows:

                  (i) first, a payment to the Diamond Class A Member pursuant to
         Section 5.1(a) in an amount up to the accrued and unpaid Diamond Class
         A Member's Cumulative Priority Return;

                  (ii) second, a payment to the Diamond Class A Member pursuant
         to Section 5.1(b)(i) in an amount up to the accrued and unpaid Diamond
         Class A Member's Cumulative Extension Period Return; and

                  (iii) third, a Distribution to the Diamond Class A Member in
         an amount up to the balance of the Diamond Class A Member's Capital
         Account as of such date, to the extent of the excess of (A) any portion
         of the Diamond External Amount remaining after the deemed application
         as set forth in clauses (i) and (ii), over (B) amounts paid by the
         Indenture Trustee to Diamond pursuant to Section 5.05(b)(i) or
         5.05(b)(ii) of the Indenture.

         (b) Overfund Account. Following any distribution of amounts deposited
into (1) the Overfund Account pursuant to Section 5.04 of the Indenture or (2)
the Dollar Collection Account pursuant to Section 5.02(b)(v) of the Indenture,
Diamond shall be deemed to have made, for GAAP accounting and tax purposes and
for all purposes of the Transaction Documents, on the date any such amounts are
distributed under Section 5.05 of the Indenture, payments in an aggregate amount
up to the aggregate amount of such amounts distributed by the Indenture Trustee,
in the manner and in the order of priority as follows:

                  (i) first, a payment to the Diamond Class A Member pursuant to
         Section 5.1(a) in an amount up to the accrued and unpaid Diamond Class
         A Member's Cumulative Priority Return; and

                  (ii) second, a payment to the Diamond Class A Member pursuant
         to Section 5.1(b)(i) in an amount up to the accrued and unpaid Diamond
         Class A Member's Cumulative Extension Period Return.

         (c) Political Risk Policy. The receipt by Jewel of any proceeds paid
pursuant to the Political Risk Policy that were taken into account in
calculating Net Income or Net Losses of Diamond shall be deemed to have been
Distributed by Diamond to the Diamond Class A Member.

         Section 5.5 Notice of Certain Distributions. If Diamond Distributes
and/or pays any amount to the Diamond Class A Member in order to cause the
redemption, in whole or in part, of (a) the Notes pursuant to the terms of the
Indenture and/or (b) upon and after payment in full of Outstanding the Notes,
the New Notes pursuant to the terms of the New Indenture, Diamond



                                       18
<PAGE>
                                                           Diamond LLC Agreement


shall notify Investor in writing (with a copy to the Indenture Trustee and/or
the New Indenture Trustee, as applicable) that such Distribution and/or payment
is being made in order to cause such redemption and specifying the amount of
such Distribution and/or payment to be used for such purpose and the relevant
Optional Redemption Date, Mandatory Redemption Date or Special Redemption Date.

                                   ARTICLE VI

                                   MANAGEMENT

         Section 6.1 Management of Diamond.

         (a) Managing Member. The management of Diamond shall be vested in the
Managing Member, which shall be a "manager" within the meaning of the LLC Act,
and except as otherwise provided in this Diamond LLC Agreement, the Managing
Member shall have full power and authority to manage the business and affairs of
Diamond to the extent provided in the LLC Act, and no other Member shall have
any such management power or authority.

         The Diamond Class B Member shall be the Managing Member at all times
prior to the appointment of a replacement Managing Member in accordance with
this Section 6.1(a). The Diamond Class A Member shall have the right to remove
the Diamond Class B Member as Managing Member upon the occurrence of any of the
following events: (i) the Bankruptcy of El Paso, Garnet, the Diamond Class B
Member or the Share Trust; (ii) a material breach by (x) the Diamond Class B
Member, in its capacity as Managing Member, of its obligations as Managing
Member under this Diamond LLC Agreement or (y) the Management Company of any
covenant set forth in the Management Agreement, which breach, in either case,
continues and is uncured in all material respects on the date occurring 30 days
after the Diamond Class B Member, the Management Company, El Paso or any
Affiliate of El Paso receives written notice or has actual knowledge thereof;
(iii) the gross negligence or willful misconduct of (x) the Diamond Class B
Member, in its capacity as Managing Member, in the performance of its
obligations as Managing Member under this Diamond LLC Agreement or (y) the
Management Company in the performance of its obligations under the Management
Agreement; (iv) the removal of (x) EPED Holding as managing member of Topaz
pursuant to Section 6.1(a) of the Topaz LLC Agreement or (y) EPED B as managing
member of Garnet pursuant to Section 6.1(a) of the Garnet LLC Agreement; (v) any
representation or warranty made by El Paso under Section 4.3 of the
Participation Agreement shall prove to have been incorrect in any material
respect when made (or deemed made) and such misrepresentation continues to
remain materially incorrect for 30 days after the earlier of (x) El Paso having
actual knowledge of such misrepresentation and (y) the giving of written notice
of such misrepresentation to El Paso by the Class A Shareholder; (vi) the 60th
day following the occurrence of a Note Trigger Event; (vii) a Specified Equity
Event; (viii) the occurrence of an El Paso Debt Obligation Repayment Event of
the type described in clause (b) of the definition thereof; (ix) the rendering
of any final money judgment, enforceable in any competent court, against any of
Amethyst, Aquamarine or Peridot for payment in an amount in excess of
$100,000,000, and such judgment shall not be discharged or dismissed or
execution thereon stayed within 60 days after entry; (x) the occurrence of any
"event of default" pursuant to the terms of any indebtedness or other obligation
exceeding in the aggregate $10,000,000 in principal amount of any of Amethyst,
Aquamarine or Peridot, and such



                                       19
<PAGE>
                                                           Diamond LLC Agreement


indebtedness or obligation becomes due prior to its stated maturity as a result
thereof; or (xi) the occurrence of any "event of default" pursuant to the terms
of any indebtedness or other obligation (other than, so long as (A) the
applicable "event of default" is waived by El Paso or such Affiliate, as the
case may be, and (B) such "event of default" does not result in any "event of
default" under the terms of any other indebtedness or other obligation of any of
Amethyst, Aquamarine or Peridot owing to any Person other than El Paso or an
Affiliate of El Paso, any indebtedness or other obligation owing to El Paso or
any Affiliate of El Paso) exceeding in the aggregate $100,000,000 in principal
amount of any of Amethyst, Aquamarine or Peridot, which "event of default"
causes, or permits the holder or holders of such indebtedness or other
obligation to cause, such indebtedness or other obligation to become due prior
to its stated maturity. The Diamond Class A Member shall exercise such right of
removal by providing written notice of such exercise (a "SECTION 6.1(a) NOTICE")
to the Diamond Class B Member after the occurrence of any of the foregoing
events and such notice shall become effective (x) in the case of any notice
under clause (i) or (vii) above, immediately and (y) in the case of any notice
under clause (ii), (iii), (iv), (v), (vi), (viii), (ix), (x) or (xi) above, upon
the expiration of the applicable grace and cure periods, if any, referred to in
any such clause; provided, however, that, in each case, if the Share Purchase
Option is exercised and consummated in accordance with Section 7.1 of the
Investor Shareholders Agreement, then the Section 6.1(a) Notice shall be deemed
to have been revoked and shall be of no further force or effect. On the date a
Section 6.1(a) Notice becomes effective, the Diamond Class A Member or its
designee shall (unless such notice is revoked or unless the Diamond Class B
Member shall be actively contesting such removal in good faith by appropriate
proceedings) without further act become the Managing Member of Diamond for all
purposes of this Diamond LLC Agreement and the Diamond Class B Member shall no
longer be the Managing Member.

         The Diamond Class A Member shall also have the right to remove the
Diamond Class B Member as Managing Member by delivering written notice of its
exercise of such right of removal to the Diamond Class B Member no earlier than
five days prior to the end of any Fiscal Quarter and no later than the tenth day
of the next succeeding Fiscal Quarter (each a "QUARTERLY MANAGEMENT REPLACEMENT
WINDOW"); provided, that if such QMR Notice is not given by the Diamond Class A
Member during any such Quarterly Management Replacement Window, then the Diamond
Class B Member shall continue as Managing Member. If a QMR Notice is delivered
during a Quarterly Management Replacement Window and El Paso has not exercised
its Share Purchase Option in accordance with Section 7.1 of the Investor
Shareholders Agreement on or prior to the tenth day following such delivery,
then such QMR Notice shall become effective on such tenth day following delivery
and the Diamond Class A Member or its designee shall, on such tenth day, without
further act become the Managing Member of Diamond for all purposes of this
Diamond LLC Agreement and the Diamond Class B Member shall no longer be the
Managing Member; provided, however, that if El Paso exercises its Share Purchase
Option in accordance with Section 7.1 of the Investor Shareholders Agreement on
or prior to such tenth day after delivery of such QMR Notice, then such QMR
Notice shall not become effective until the sixtieth day following the date of
such exercise by El Paso of its Share Purchase Option and then if, and only if,
the Share Purchase Option shall not have been consummated prior to such sixtieth
day.

         (b) Authority of Managing Member. The Managing Member shall have the
authority on behalf and in the name of Diamond to perform all acts necessary and
desirable to the objects



                                       20
<PAGE>
                                                           Diamond LLC Agreement


and purposes of Diamond, subject only to the restrictions expressly set forth in
this Diamond LLC Agreement (including Sections 6.3 and 6.5) and subject to the
rights of the Liquidator to liquidate Diamond and take all actions incidental
thereto in accordance with Article XII. Subject to such restrictions, the
authority of the Managing Member shall include the authority to:

                  (i) engage in transactions and dealings on behalf of Diamond,
         including transactions and dealings with any Member or any Affiliate of
         any Member;

                  (ii) call meetings of Members or any class thereof;

                  (iii) vote any Equity Interests or Diamond Permitted Assets;

                  (iv) (w) purchase or otherwise acquire, or dispose of, Diamond
         Permitted Assets, (x) cause Diamond Holdings to purchase or otherwise
         acquire, or dispose of, Diamond Holdings Permitted Assets, (y) cause
         Diamond Holdings to cause Aquamarine to purchase or otherwise acquire,
         or dispose of, Aquamarine Permitted Assets and (z) cause Diamond
         Holdings to cause Peridot to purchase or otherwise acquire, or dispose
         of, Peridot Permitted Assets;

                  (v) determine and make Distributions, in Cash or otherwise, on
         the Diamond Interests in accordance with the provisions of this Diamond
         LLC Agreement and the LLC Act;

                  (vi) appoint (and dismiss from appointment) officers,
         attorneys and agents on behalf of Diamond, and engage (and dismiss from
         engagement) any and all Persons providing legal, accounting or
         financial services to Diamond, or such other Persons as the Managing
         Member reasonably deems necessary or desirable for the management and
         operation of Diamond;

                  (vii) incur and pay all expenses and obligations incidental to
         the operation and management of Diamond, including all Company Expenses
         of Diamond and all fees, expenses and other amounts payable pursuant to
         the Management Agreement;

                  (viii) open accounts (including, without limitation, the
         Diamond Investor's Account);

                  (ix) subject to Article XII, effect a dissolution of Diamond
         after the occurrence of a Liquidating Event;

                  (x) bring and defend (or settle) on behalf of Diamond actions
         and proceedings at law or equity before any court or governmental,
         administrative or other regulatory agency, body or commission or any
         arbitrator or otherwise;

                  (xi) prepare or cause to be prepared reports, statements and
         other relevant information for distribution to the Members as may be
         required by this Diamond LLC Agreement or the LLC Act and any
         additional information determined to be appropriate by the Managing
         Member from time to time;



                                       21
<PAGE>
                                                           Diamond LLC Agreement


                  (xii) subject to Section 7.4, execute, deliver and perform on
         behalf of Diamond, Diamond's obligations under and exercise on behalf
         of Diamond, Diamond's rights under, any Diamond Documents to which
         Diamond is a party, including any certificates and other documents and
         instruments related thereto;

                  (xiii) prepare and file all necessary returns and statements
         and pay all taxes, assessments and other impositions applicable to
         Diamond Property pursuant to Section 8.3; and

                  (xiv) execute all other documents or instruments, perform all
         duties, exercise all powers, and do all things for and on behalf of
         Diamond necessary or desirable to accomplish any of, or incidental to,
         the foregoing.

The Managing Member is hereby authorized and directed to enter into the
Management Agreement, pursuant to which it will delegate to the Management
Company certain of its duties as Managing Member hereunder and on behalf of
Diamond, as sole member of Diamond Holdings, as more specifically provided in
the Management Agreement, any or all of which duties may be subcontracted to
third Persons by the Management Company.

         Section 6.2 Right to Rely on the Managing Member.

         (a) Any Person dealing with Diamond may rely (without duty of further
inquiry) upon a certificate signed by the Managing Member as to:

                  (i) The identity of the Managing Member, the Diamond Class A
         Member or the Diamond Class B Member;

                  (ii) The existence or nonexistence of any fact or facts that
         constitute a condition precedent to acts by the Managing Member or that
         are in any other manner germane to the affairs of Diamond;

                  (iii) The Persons who are authorized to execute and deliver
         any instrument or document of Diamond; and

                  (iv) Any act or failure to act by Diamond or any other matter
         whatsoever involving Diamond or any Member.

         (b) The signature of the Managing Member shall be sufficient to convey
title to any property owned by Diamond, and all of the Members agree that a copy
of this Diamond LLC Agreement may be shown to the appropriate parties in order
to confirm the same, and further agree that the signature of the Managing Member
shall be sufficient to execute any documents necessary to effectuate this or any
other provision of this Diamond LLC Agreement.

         Section 6.3 Decisions Requiring Unanimous Member Consent.
Notwithstanding any power or authority granted the Managing Member under the LLC
Act, the Diamond Certificate of Formation or this Diamond LLC Agreement
(including Sections 6.1 and 6.5), the Managing Member may not make any decision
or take any action for which the consent of all the Members is expressly
required by the Diamond Certificate of Formation or this Diamond LLC Agreement,


                                       22
<PAGE>
                                                           Diamond LLC Agreement



without first obtaining such consent. Notwithstanding any power or authority
granted to the Managing Member under the LLC Act, the Diamond Certificate of
Formation or this Diamond LLC Agreement (including Sections 6.1 and 6.5), the
Managing Member shall not have the authority to, and covenants and agrees that
it shall not, take any of the following actions without the consent of all of
the Members (provided that no approval of the Diamond Class B Member shall be
required for any action of the Diamond Class A Member pursuant to Section 7.4,
11.3 or 11.4(a)):

         (a) Contravention. Act in contravention of this Diamond LLC Agreement
or any other Transaction Document applicable to Diamond, Diamond Holdings,
Aquamarine or Peridot or, when acting on behalf of Diamond, on its own account,
on behalf of Diamond as the sole member of Diamond Holdings or on behalf of
Diamond Holdings as the sole member of Aquamarine or Peridot, engage in
activities inconsistent with the purposes of this Diamond LLC Agreement, the
purposes of the Diamond Holdings LLC Agreement, the purposes of the Aquamarine
LLC Agreement, the purposes of the Peridot Company Agreement or the terms of the
Management Agreement, respectively;

         (b) Acquisitions. Cause or permit Diamond, or cause or permit Diamond
to cause or permit (x) Diamond Holdings to, or (y) Diamond Holdings to cause or
permit Aquamarine or Peridot to, acquire by purchase, contribution or exchange
(including by way of merger, liquidation or consolidation with or into any other
Person) in any single transaction or series of related transactions, Qualified
Energy Assets using equity of any of Amethyst, Diamond Holdings, Aquamarine
and/or Peridot in an amount in excess of $100,000,000 as consideration therefor
(excluding from such calculation Permitted Capital Expenditures and funds of
Amethyst, Diamond Holdings, Aquamarine and/or Peridot used in such acquisition
transaction that are derived from Permitted Financial Obligations of Amethyst,
Diamond Holdings, Aquamarine and/or Peridot, as the case may be, recourse for
the payment of which does not extend to assets of Amethyst, Diamond Holdings,
Aquamarine or Peridot, as applicable, other than Qualified Energy Assets of such
Person);

         (c) Character of Permitted Investments. (i) Cause or permit Diamond to
acquire, by purchase, contribution or exchange (including by way of merger,
liquidation or consolidation with or into any other Person), any assets other
than Diamond Permitted Assets, (ii) cause or permit Diamond to cause or permit
Diamond Holdings to acquire by purchase, contribution or exchange (including by
way of merger, liquidation or consolidation with or into any other Person) any
assets other than Diamond Holdings Permitted Assets or (iii) cause or permit
Diamond to cause or permit Diamond Holdings to cause or permit Aquamarine or
Peridot to acquire by purchase, contribution or exchange (including by way of
merger, liquidation or consolidation with or into any other Person) any assets
other than Aquamarine Permitted Assets or Peridot Permitted Assets,
respectively, in each case, regardless of amount;

         (d) Dispositions by Diamond and Diamond Holdings. (i) Cause or permit
Diamond to Dispose of any Diamond Property or (ii) cause or permit Diamond to
cause or permit Diamond Holdings to Dispose of any Diamond Holdings Property,
other than (A) a Disposition that constitutes (x) the granting of a Diamond
Holdings Permitted Lien or (y) the realization on any Diamond Holdings Permitted
Lien other than such realization by EPED B or any of its Affiliates, and (B) any
Disposition of EPED B Demand Loans, Garnet Demand Loans or



                                       23
<PAGE>
                                                           Diamond LLC Agreement


Financial Investments held by Diamond or Diamond Holdings if the proceeds
thereof are used by Diamond Holdings or Diamond, as the case may be, to acquire
additional Diamond Permitted Assets or Diamond Holdings Permitted Assets
respectively; provided, however, that the unanimous consent of all the Members
shall not be required to, and the Managing Member shall have the authority and
be permitted to, cause or permit any Disposition described in this clause (d) if
the consideration therefor is not less than the Fair Market Value of the asset
being Disposed of; provided, further, that this clause (d) shall not apply to
any Disposition of assets in connection with, or to produce funds to
successfully effect, (x) the Purchase Option, the Retirement Option, an Asset
Remedy or an Investor Asset Sale, (y) any enforcement of, or levy on, a judgment
obtained in accordance with Section 2.05(f) of the New Indenture by the New
Indenture Trustee or the New Noteholders in connection with the occurrence of a
New Indenture Event of Default or (z) an Asset Disposition;

         (e) Dispositions by Diamond Project Companies. With respect to
Aquamarine, Peridot and any other Diamond Project Company the disposition of
assets of which is subject to the unilateral control of Aquamarine or Peridot or
as to which Aquamarine or Peridot has shared control or consent, veto or other
rights, cause or permit Diamond to cause or permit Diamond Holdings: (i) to
cause or permit Aquamarine or Peridot to Dispose of, (ii) to cause or permit
Aquamarine or Peridot to cause or permit any such Diamond Project Company to
Dispose of, (iii) to cause or permit Aquamarine or Peridot to exercise its
shared control, consent, veto or other right to cause or permit any such Diamond
Project Company to Dispose of or (iv) to fail to prevent any such Diamond
Project Company from Disposing of, any Qualified Energy Assets, other than (A)
any Disposition of interests in Project Companies (other than Aquamarine or
Peridot) pursuant to any of the Project Documents and outside of the control of
El Paso or its Affiliates (including as required by applicable law, applicable
regulations or contractual obligations entered into in good faith and in the
ordinary course of business), (B) any Disposition in connection with Ordinary
Project Activities, (C) any Disposition or Dispositions of assets that are worn
out or obsolete, (D) the Disposition of assets that, in the aggregate with all
other assets Disposed of pursuant to this clause (D) during the applicable
calendar year, have an aggregate value of less than $40,000,000, (E) any
Disposition that constitutes the granting of a Lien in connection with
Aquamarine Permitted Financial Obligations or Peridot Permitted Financial
Obligations, (F) any Disposition that constitutes the realization by any Person
other than EPED B or any of its Affiliates on any Lien granted in connection
with Aquamarine Permitted Financial Obligations or Peridot Permitted Financial
Obligations, and (G) any Disposition of EPED B Demand Loans, Garnet Demand Loans
or Financial Investments held by Aquamarine, Peridot or any other Diamond
Project Company if the proceeds thereof, as the case may be, are used by
Aquamarine, Peridot or such other Diamond Project Company, as the case may be,
to acquire additional Aquamarine Permitted Assets, Peridot Permitted Assets or,
in the case of any other Diamond Project Company, other assets (provided that
any such assets that are Energy Assets shall be located in the Americas (other
than the United States or Canada) but outside an Excluded Country); provided,
however, that in addition to the exceptions set forth above, the unanimous
consent of all the Members shall not be required to, and the Managing Member
shall have the authority and be permitted to, cause or permit any such
Disposition if the consideration therefor is not less than the Fair Market Value
of the asset being Disposed of; provided, further, that this clause (e) shall
not apply to any Disposition of assets in connection with, or to produce funds
to successfully effect, (x) the Purchase Option, the Retirement Option, an Asset
Remedy or an Investor Asset Sale, (y) any enforcement of, or levy on, a judgment
obtained in accordance



                                       24
<PAGE>
                                                           Diamond LLC Agreement


with Section 2.05(f) of the New Indenture by the New Indenture Trustee or the
New Noteholders in connection with the occurrence of a New Indenture Event of
Default or (z) an Asset Disposition;

         (f) Budgets. Approve or amend, or cause or permit Diamond to permit
Aquamarine to approve or amend, any annual aggregate operating or capital budget
of Diamond or Aquamarine that El Paso has not certified (an "UNCERTIFIED
BUDGET") as falling within Budget Parameters agreed to by the Members as of the
Closing Date, as adjusted to account for additional acquisitions and/or
dispositions; provided that if the Members do not unanimously approve any such
Uncertified Budget, the prior year's operating and capital budget (as adjusted
to account for acquisitions, dispositions and inflation, the "TEMPORARY BUDGET")
shall continue until a new operating and capital budget can be determined by a
professional retained by the Members to prepare such new budget (a "REPLACEMENT
BUDGET"), which Temporary Budget (pending preparation of a definitive
Replacement Budget) and Replacement Budget (when it becomes definitive) shall be
final and shall not require the approval of the Members;

         (g) Indebtedness, Etc. (i) Cause or permit Diamond to incur, assume or
obligate itself by contract for any Permitted Financial Obligations owing by
Diamond (except that Diamond may enter into and incur obligations under the
Transaction Documents, including costs, expenses, indemnities, fees (including
reasonable attorneys' and accountants' fees), Additional Financing Costs and
Taxes), (ii) cause or permit Diamond to cause or permit Diamond Holdings to
incur, assume or obligate itself by contract for any Permitted Financial
Obligations owing by Diamond Holdings other than Company Expenses of Diamond
Holdings and obligations under the Aquamarine Pledge Agreement, the Peridot
Pledge Agreement and any other pledge and/or security agreements securing
Aquamarine Permitted Financial Obligations or Peridot Permitted Financial
Obligations and limited in recourse as required by such definitions, or (iii)
cause or permit Diamond to cause or permit Diamond Holdings to cause or permit
Aquamarine or Peridot to incur, assume or obligate itself by contract for any
Permitted Financial Obligations owing by Aquamarine or Peridot other than
obligations under Aquamarine Financing Documents and Peridot Financing
Documents, respectively, and Company Expenses of Aquamarine or Peridot;

         (h) Issuance of Additional Diamond Interests; Admission of Additional
Members. (i) Cause or permit Diamond to issue Diamond Interests other than the
Diamond Class A Member Interest and the Diamond Class B Member Interest, or to
admit any Diamond Class A Member or Diamond Class B Member to Diamond, (ii)
cause or permit Diamond to cause or permit Diamond Holdings to issue interests
other than the Diamond Holdings Interest, or to admit any member to Diamond
Holdings other than Diamond; (iii) cause or permit Diamond to cause or permit
Diamond Holdings to cause or permit Aquamarine to issue interests other than the
Aquamarine Interest, or to admit any member to Aquamarine other than Diamond
Holdings; or (iv) cause or permit Diamond to cause or permit Diamond Holdings to
cause or permit Peridot to issue interests other than the Peridot Interest, or
to admit any member to Peridot other than Diamond Holdings, in each case of
clause (i), (ii), (iii) or (iv), other than pursuant to Article X or Article XI;
provided that Capital Contributions permitted hereby and made by any existing
Member of Diamond, by Diamond as the sole member of Diamond Holdings or by
Diamond Holdings as the sole member of Aquamarine or Peridot shall not
constitute the admission of a member or the issuance of Diamond Interests or
ownership interests in Diamond Holdings, Aquamarine or Peridot, as the case may
be;



                                       25
<PAGE>
                                                           Diamond LLC Agreement

         (i) Distributions or Redemptions of Member Interests. Cause or permit
(i) any Distribution in respect of Diamond Interests or member interests in
Diamond Holdings, Aquamarine or Peridot or (ii) any redemption of Diamond
Interests or member interests in Diamond Holdings, Aquamarine or Peridot, other
than, in each case in clause (i) or (ii) above, as permitted or contemplated by
the Transaction Documents; provided, that the Diamond Class A Member may, by
written notice to Diamond, elect not to receive all or any portion of any
payment by Diamond under Section 5.1(c) of the proceeds of (A) any sale of or
realization upon assets pursuant to an exercise of the Diamond Asset Remedy in
connection with a Specified Equity Event after the repayment in full of all
Outstanding Notes, or (B) the consummation of an Asset Disposition, and the
consent of the Diamond Class B Member to such election shall be deemed to have
been given upon delivery of the written notice by the Diamond Class A Member to
Diamond. Any amount not paid by Diamond pursuant to such election shall be
treated as accrued but unpaid Diamond Class A Member's Cumulative Priority
Return or amounts required to be Distributed pursuant to Section 5.1, and the
Diamond Class A Member shall have the right to receive such amounts by
consenting to a payment by Diamond, to which the consent of the Diamond Class B
Member shall be deemed to have been given, at any time to pay to the Diamond
Class A Member Cash in an aggregate amount equal to the lesser of (1) the
aggregate amount of all such proceeds retained by Diamond pursuant to this
Section 6.3(i), and (2) the sum of the accrued and unpaid Diamond Class A
Member's Cumulative Priority Return and the positive balance in the Diamond
Class A Member's Capital Account, in each case, as of the date of such payment
to the Diamond Class A Member after taking into account all allocations required
to be made to the Diamond Class A Member pursuant to Article IV as of such date,
and such payments shall be treated, for GAAP accounting, tax and all other
purposes of the Transaction Documents, as set forth in Section 5.1(c).

         (j) Transactions with Affiliates. Cause or permit any violation of the
second sentence of Section 6.5(a)(ii);

         (k) Changes to Diamond Documents. (i) Cause or consent to any
amendment, waiver or other modification of Diamond's rights or obligations under
any Diamond Document, (ii) give or withhold any consent or authorization
required under any Diamond Document to the extent that Diamond is expressly
entitled to give or withhold such consent or authorization pursuant to the terms
of such Diamond Document, or (iii) consent to any termination or assignment by
any other Person (other than the Diamond Class A Member) party to any Diamond
Document of such other Person's rights or obligations thereunder to the extent
that such termination or assignment is expressly prohibited pursuant to the
terms of such Diamond Document without the consent of Diamond (except, in each
case described in this clause (k), (x) to cure any ambiguity, omission, defect
or inconsistency (so long as such amendment, waiver or other modification shall
have no adverse effect on the Diamond Class A Member) or (y) to comply with
Section 5.1(a) of the Participation Agreement), unless the Managing Member shall
have delivered to each Member a legal opinion of nationally recognized outside
counsel experienced in structured finance (including Jones, Day, Reavis & Pogue)
to the effect that such consent, authorization, amendment, waiver or other
modification (1) does not materially adversely affect the rights or obligations
of the Noteholders (if any Notes are then Outstanding) and/or the rights or
obligations of the New Noteholders (if any New Notes are then Outstanding), and
(2) does not modify Diamond's rights or obligations under any Transaction
Document to which it is a party



                                       26
<PAGE>
                                                           Diamond LLC Agreement


(provided, that the opinion described in this clause (2) shall not be required
if El Paso shall have consummated its Share Purchase Option);

         (l) Amendments to Certain Credit Documents and Loans. Cause or consent
to any amendment, waiver or modification of any rights or obligations of
Diamond, Diamond Holdings, Aquamarine or Peridot under, or cause or give any
consent, approval or make any election under, any EPED B Demand Loans, any
Garnet Demand Loans, any loans made to Peridot or any Aquamarine Specified
Credit Documents except, in the case of loans made to Peridot and/or any
Aquamarine Specified Credit Documents, for such amendments, waivers,
modifications, consents, approvals and elections made solely for the purpose of
increasing the amount available for borrowings thereunder (and making conforming
changes to any security agreements, pledge agreements or notes delivered in
connection therewith); provided, however, that this clause (l) shall not apply
to any demand for payment under any EPED B Demand Loans, any Garnet Demand Loans
or any EPED B/Garnet Note in accordance with the terms thereof;

         (m) Mergers. Cause or permit Diamond, or cause or permit Diamond to
cause or permit Diamond Holdings, Aquamarine or Peridot, to legally merge or
consolidate with or into any Person or to liquidate or to sell any or
substantially all of its assets (other than pursuant to Article XII);

         (n) Bankruptcy. Cause or permit Diamond, or cause or permit Diamond to
cause or permit Diamond Holdings, Aquamarine or Peridot, to commence any
Voluntary Bankruptcy, or commence, or solicit others to commence, an Involuntary
Bankruptcy against Diamond Holdings, Aquamarine or Peridot;

         (o) Extension of Term. Cause or permit the extension of the term of
Diamond, Diamond Holdings, Aquamarine or Peridot;

         (p) Resignation as Managing Member. (i) Undertake to resign as the
Managing Member of Diamond except in connection with any event referred to in
Section 6.1(a), (ii) cause or permit Diamond to undertake to resign or withdraw
as the sole member of Diamond Holdings, or (iii) cause or permit Diamond to
cause or permit Diamond Holdings to undertake to resign or withdraw as the sole
member of Aquamarine or Peridot;

         (q) Successor Manager Under Management Agreement. Cause or permit
Diamond (i) to cause the appointment of a successor manager to the Management
Company under the Management Agreement, except in accordance with Section 5 of
the Management Agreement and Section 7.4 hereof, or (ii) to fail to exercise its
rights to cause such appointment if so requested by the Diamond Class A Member;

         (r) Pledge of Aquamarine or Peridot Interest. Enter into any contract,
option, arrangement or other undertaking with respect to (i) the direct or
indirect pledge of the Diamond Holdings Interest or (ii) the direct or indirect
pledge of the Aquamarine Interest or the Peridot Interest except, in the case of
this clause (ii), pursuant to agreements or instruments securing Aquamarine
Permitted Financial Obligations or Peridot Permitted Financial Obligations, as
applicable;



                                       27
<PAGE>
                                                           Diamond LLC Agreement


         (s) ERISA. Cause or permit Diamond, Diamond Holdings, Aquamarine or
Peridot to create or contribute to any multiple employer plan, multi-employer
plan or single-employer plan as defined in Section 4001 of ERISA;

         (t) Possession of Property. Under any circumstances (i) possess Diamond
Property for other than a purpose of Diamond, (ii) cause or permit Diamond
Holdings to possess Diamond Holdings Property for other than a Diamond Holdings
purpose, or (iii) cause or permit Diamond Holdings to cause or permit Aquamarine
or Peridot to possess Aquamarine Property or Peridot Property for other than an
Aquamarine purpose or a Peridot purpose, respectively;

         (u) Fiscal Year. Cause or permit Diamond, Diamond Holdings, Aquamarine
or Peridot to change its Fiscal Year;

         (v) Tax Treatment, etc. Take any of the following actions:

                  (i) Cause Diamond to be treated as a corporation or other
         association taxable as a corporation for federal income tax purposes or
         to take a position inconsistent with Diamond not being treated as a
         corporation or other association taxable as a corporation except as
         required by Applicable Law; or

                  (ii) Cause Diamond Holdings, Aquamarine or Peridot to fail to
         be a disregarded entity for federal income tax purposes or to take a
         position inconsistent with such treatment except as required by
         Applicable Law;

         (w) Liens. Cause or permit Diamond, Diamond Holdings, Aquamarine or
Peridot to create, assume or permit to exist any Lien whatsoever other than
Permitted Liens;

         (x) Confessing Judgment. Cause Diamond to, or cause Diamond to cause
Diamond Holdings, Aquamarine or Peridot to, confess a judgment against Diamond,
Diamond Holdings, Aquamarine or Peridot or settle or cause or permit a
settlement of actions in proceedings at law or in equity in relation to Diamond,
Diamond Holdings, Aquamarine or Peridot before any court or other Governmental
Authority, unless such confession of judgment or settlement (i) is for an amount
less than or equal to $1,000,000 or (ii) would not have an Issuer Material
Adverse Effect; or

         (y) Limitation on Certain New Investments After Trigger Event. (i)
Cause or permit Diamond, (ii) cause or permit Diamond to cause or permit Diamond
Holdings, Aquamarine or Peridot, or (iii) unless the applicable acquisition is
outside of the control of El Paso and its Affiliates, cause or permit Aquamarine
or Peridot to cause or permit any other Diamond Project Company, to acquire, by
purchase, contribution or exchange, any EPED B Demand Loans or Garnet Demand
Loans after the occurrence of a Note Trigger Event, Specified Equity Event,
Shareholder Trigger Event or El Paso Debt Obligation Repayment Event.

         Section 6.4 Consents of the Diamond Class A Member. The Diamond Class A
Member consents to the following actions by the Managing Member to the extent
that such actions require the consent of the Diamond Class A Member pursuant to
Section 6.3 (but such consent shall not constitute a waiver of any other
provision hereof):



                                       28
<PAGE>
                                                           Diamond LLC Agreement


                  (a) The execution and delivery by the Managing Member, on
         behalf of Diamond, Diamond Holdings, Aquamarine and/or Peridot, as
         applicable, of each Transaction Document to which Diamond, Diamond
         Holdings, Aquamarine and/or Peridot is a party; and

                  (b) Any Restructuring entered into by any Diamond Project
         Company.

         Section 6.5 Duties and Obligations of the Managing Member.

         (a) Actions of Diamond. Anything in this Diamond LLC Agreement to the
contrary notwithstanding, for so long as any Obligation of Diamond is
outstanding, the Managing Member covenants to conduct the affairs of Diamond
such that:

                  (i) [Reserved].

                  (ii) Except as otherwise expressly provided in the Management
         Agreement, all transactions between any of El Paso or Garnet (or any of
         their respective Affiliates), on the one hand, and any of Diamond or
         Diamond on behalf of Diamond Holdings (or Diamond Holdings on behalf of
         Aquamarine or Peridot), on the other, shall be duly authorized and
         documented and recorded accurately in the appropriate books and records
         of such entities, except where normal industry practice does not
         normally require authorization or documentation. Except as otherwise
         expressly provided in the Management Agreement, the Managing Member
         shall not (w) cause or permit Diamond, (x) cause or permit Diamond to
         cause or permit Diamond Holdings, (y) cause or permit Diamond to cause
         or permit Diamond Holdings to cause or permit Aquamarine or Peridot or
         (z) cause or permit Diamond to cause or permit Diamond Holdings to
         cause or permit Aquamarine or Peridot to cause or permit any other
         Diamond Project Company, to enter into any transaction with El Paso or
         any Affiliate of El Paso (other than transactions among Diamond and any
         of its Subsidiaries or among Subsidiaries of Diamond), other than
         transactions in any calendar quarter which, taken as a whole, are fair
         and reasonable to Diamond, Diamond Holdings, Aquamarine, Peridot and
         the Diamond Project Companies and provide, in the aggregate, for
         receipt by Diamond, Diamond Holdings, Aquamarine, Peridot and the
         Diamond Project Companies (taken as a whole) of fair consideration and
         reasonably equivalent value; provided, however, that nothing herein
         shall be deemed to prohibit or restrict any sales or transfers of
         assets to El Paso or its designee(s) pursuant to Section 6.1(c)(v) of
         the Participation Agreement. The Members hereby agree that each of the
         Transaction Documents, the Amethyst Specified Credit Documents, the
         Aquamarine Specified Credit Documents and the Peridot Specified Credit
         Documents satisfies the standards set forth in the preceding sentence.

         (b) Trigger Events, Specified Equity Event and Liquidating Events. The
Managing Member shall notify the Members of the occurrence of any acceleration
of the New Notes as a result of a New Indenture Event of Default, Note Trigger
Event, Specified Equity Event, Shareholder Trigger Event or Liquidating Event or
any event that with notice or lapse of time or both would constitute such an
event (other than the event described in Section 12.1(a)) and the action that
the Managing Member has taken or proposes to take with respect thereto,
promptly, but no later than five Business Days, after any Responsible Officer of
El Paso has actual



                                       29
<PAGE>
                                                           Diamond LLC Agreement


knowledge of such occurrence; provided, that in the case of a Specified Equity
Event, the Managing Member shall provide the Members, within three Business Days
after a Responsible Officer of El Paso obtains knowledge of the occurrence of
any Underlying Default which is continuing or of any event not theretofore
remedied which with notice or lapse of time, or both, would constitute an
Underlying Default, notice of such occurrence together with a detailed statement
by a Responsible Officer of El Paso of the steps being taken by El Paso or the
appropriate subsidiary of El Paso to cure the effect of such Underlying Default.

         (c) Maintenance of Diamond's Existence, etc. At Diamond's expense, the
Managing Member shall take all actions that may be necessary or appropriate (i)
for the continuation of Diamond's valid existence as a limited liability company
under the laws of the State of Delaware and its qualification to do business
under the laws of each other jurisdiction in which such existence or
qualification is necessary to protect the limited liability of the Members or to
enable Diamond to conduct the business in which it is engaged or to perform its
obligations under any agreement to which it is a party, (ii) for the
accomplishment of Diamond's purposes, including the acquisition, management,
maintenance, preservation, and operation of Diamond Permitted Assets in
accordance with the provisions of this Diamond LLC Agreement and applicable laws
and regulations and (iii) to enforce Diamond's rights under each of the
Transaction Documents to which Diamond is a party and each EPED B/Garnet Note.
Without limitation of the foregoing, the Managing Member shall cause Diamond to
maintain all licenses, permits, registrations, authorizations, use agreements,
consents, orders or approvals of governmental or quasi-governmental agencies and
authorities (whether Federal, state, local, municipal or foreign) necessary to
own its properties and to conduct its activities in accordance with all
applicable laws, rules, regulations and orders, except where any failure to do
so would not have an Aggregate JV Material Adverse Effect or an Issuer Material
Adverse Effect.

         (d) Devotion of Time; Other Activities. Without limitation of the
Manager's obligations under the Management Agreement, the Managing Member and
any of its Affiliates shall be required to devote only such time to the affairs
of Diamond as is necessary to manage and operate Diamond, giving due
consideration to the provisions of the Management Agreement, and each such
Person shall be free to serve any other Person or enterprise in any capacity
that it may deem appropriate in its discretion.

         (e) Fiduciary Duty. Except as otherwise provided in the proviso to the
second sentence of Section 6.5(a)(ii), the Managing Member shall be under a
fiduciary duty to conduct the affairs of Diamond in the best interests of
Diamond, including the safekeeping and use of all Diamond Property and the use
thereof for the exclusive benefit of Diamond and will not conduct the affairs of
Diamond so as to benefit any other business now owned or hereafter acquired by
any Member if such conduct also produces a detriment to Diamond. Without
limiting the foregoing duty, the Managing Member shall perform its obligations
hereunder using a degree of skill and attention no less that that which El Paso
exercises with respect to its own business.

         (f) Making of Payments. Unless otherwise expressly provided herein, all
Distributions or payments to the Members pursuant to any provision of this
Diamond LLC Agreement shall be made no later than 3:30 p.m., New York City time,
on the day of Distribution or payment, and, at the time of any such Distribution
or payment, the Managing Member shall provide to the Members a notice
identifying the nature of the Distribution or



                                       30
<PAGE>
                                                           Diamond LLC Agreement


payment, the Section or Sections of this Diamond LLC Agreement pursuant to which
it is being made and the amount being Distributed or paid pursuant to each such
Section.

         (g) Compliance with Diamond LLC Agreement. The Managing Member shall
cause Diamond to comply with all of the obligations of Diamond set forth in this
Diamond LLC Agreement; provided, however, that the Managing Member shall have no
obligation to cause Diamond to pay the Diamond Class A Member's Priority Return
or make any other Cash Distributions or other payments in respect of the Diamond
Class A Member Interest under this Diamond LLC Agreement except to the extent
that there are funds on deposit in the Diamond Investor's Account that are
freely available to be applied to such payment at the time such payment is due,
and then only from such funds; and provided, further, that in no event shall the
Managing Member have any personal obligation or liability with respect to any
obligations of Diamond.

         (h) Notice Regarding Qualification to Do Business. The Managing Member
shall provide notice to the Members of any state or jurisdiction in which
Diamond is qualified to do business (other than its jurisdiction of organization
and any jurisdiction in which Diamond was qualified to do business on the
Closing Date).

         (i) Payment of Closing Costs. To the extent not paid from other sources
(including Emerald), the Managing Member shall cause Diamond to pay the Closing
Costs on the Closing Date or, if due after the Closing Date, on the due date
therefor.

         Section 6.6 Compensation and Expenses. Except as provided in Section
5.5 of the Participation Agreement, and except pursuant to, or as contemplated
by, the Management Agreement, no Member or Affiliate of any Member shall receive
any salary, fee, or draw for services rendered to or on behalf of Diamond or
otherwise in its capacity as a Member, nor shall any Member or Affiliate of any
Member be reimbursed for any expenses incurred by such Member or Affiliate on
behalf of Diamond or otherwise in its capacity as a Member; provided, however,
that the Managing Member shall be promptly reimbursed by Diamond for all
reasonable out-of-pocket costs and expenses incurred by the Managing Member or
its Affiliates in connection with the management and operation of Diamond.

         Section 6.7 Demand on EPED B Demand Loans and Garnet Demand Loans Held
by Diamond, Diamond Holdings, Aquamarine, Peridot and their Subsidiaries. The
Managing Member shall cause Diamond, and shall cause Diamond to cause each of
Diamond Holdings, Aquamarine and Peridot to (x) make demand on the EPED B Demand
Loans and/or Garnet Demand Loans held by such Person and (y) cause any
Subsidiary of such Person to make demand on the EPED B Demand Loans and/or
Garnet Demand Loans held by such Subsidiary, in each case, (i) within a
sufficient time to provide Diamond with sufficient funds to enable Diamond to
make any payments to the Diamond Class A Member when due pursuant to Section
5.1(a), (ii) on the occurrence of a Liquidating Event, (iii) if requested by the
Diamond Class B Member, on any Purchase Date or Retirement Date, (iv) to acquire
additional Diamond Permitted Assets, (v) upon the occurrence of an El Paso Debt
Obligation Repayment Event, (vi) upon expiration of the Asset Sale Standstill
Period, if requested by the Diamond Class A Member in an Asset Sale Notice
delivered pursuant to this Diamond LLC Agreement and (vii) to otherwise satisfy
the obligations of Diamond; provided, however, that, upon the delivery by the


                                       31
<PAGE>
                                                           Diamond LLC Agreement


Diamond Class A Member of a written request to the Managing Member at any time
during the period from the Extension Period Commencement Date to the Extension
Period Termination Date, the Managing Member shall cause Diamond to cause each
of Aquamarine and Peridot to (x) make demand on the EPED B Demand Loans and
Garnet Demand Loans held by such Person and (y) cause any Subsidiary of such
Person to make demand on the EPED B Demand Loans and Garnet Demand Loans held by
such Subsidiary, in each case, in the amount specified by the Diamond Class A
Member in its notice.

         Section 6.8 Execution of other Transaction Documents; Matters Relating
to Diamond Holdings, Aquamarine and Peridot.

         (a) Execution of Transaction Documents. On the Signing Date,
simultaneously with the execution and delivery of this Diamond LLC Agreement,
the Managing Member on behalf of Diamond shall execute and deliver, or cause to
be executed and delivered, all Transaction Documents to be entered into by
Diamond on or prior to the Signing Date (to the extent not previously executed),
and any amendments, restatements or supplements thereto, and take such further
actions in each case, as are contemplated in the Closing Agreement and otherwise
in connection with consummation of the Exchange Offer and the transactions
contemplated thereby.

         (b) Sole Member. The Managing Member shall cause Diamond to be the sole
member of Diamond Holdings, and shall (through Diamond Holdings) cause Diamond
Holdings to be the sole member of each of Aquamarine and Peridot, in each case
unless all of the Members consent in accordance with Section 6.3(h) to the
issuance of additional interests in Diamond Holdings, Aquamarine or Peridot, as
the case may be.

         (c) Governmental Permits, etc. of Diamond Holdings, Aquamarine and
Peridot. The Managing Member, on behalf of Diamond as sole member of Diamond
Holdings and on behalf of Diamond Holdings as sole member of Aquamarine and
Peridot, shall cause each of Diamond Holdings, Aquamarine and Peridot to obtain
or effect all Governmental Approvals necessary under, and otherwise comply with,
the laws of the jurisdictions in which it is conducting business and to comply
with all of its Contractual Obligations, except in any case above where any
failure to do so would not have an Aggregate JV Material Adverse Effect.

         (d) Aquamarine Subsidiary Financial Statements, Etc. The Managing
Member, on behalf of Diamond as sole member of Diamond Holdings, shall cause
Diamond Holdings to cause Aquamarine to provide to any Member promptly following
a request therefor by such Members any financial statements, material
operational data, other material reports and material notices delivered to
Aquamarine or subsidiaries of Aquamarine pursuant to the Project Documents in
respect of the Diamond Project Companies, subject to the restrictions set forth
in Section 8.4.

         Section 6.9 Determination of Interest Rate on EPED B Demand Loans and
Garnet Demand Loans. Subject to Section 6.3(l), the Managing Member shall
administer all EPED B Demand Loans and Garnet Demand Loans held by Diamond. Each
Member agrees that in order for the Managing Member to manage effectively such
EPED B Demand Loans and Garnet Demand Loans, the following provisions shall
apply:



                                       32
<PAGE>
                                                           Diamond LLC Agreement


                  (a) The Managing Member shall: (i) determine the El Paso
         Applicable Rate for each Eurodollar Period for each EPED B Demand Loan
         and Garnet Demand Loan made by Diamond, and shall notify EPED B or
         Garnet (as applicable) and El Paso of each such determination and (ii)
         at the request of Diamond Holdings, Aquamarine, Peridot or any
         Subsidiary of Aquamarine or Peridot, determine the El Paso Applicable
         Rate for each Eurodollar Period for each EPED B Demand Loan or Garnet
         Demand Loan made by Diamond Holdings, Aquamarine, Peridot or any such
         Subsidiary, as the case may be, and shall notify EPED B or Garnet (as
         applicable), El Paso and Diamond Holdings, Aquamarine, Peridot or such
         Subsidiary (as applicable) of each such determination.

                  (b) Each Member shall promptly notify the Managing Member in
         the event any Member receives a notice from any financial institution
         to the effect that the Eurodollar Rate does not reflect the cost of
         funds for such financial institution in connection with any proposed or
         current borrowings by such Member from such financial institution. In
         the event any Member has given the notice described in the first
         sentence of this clause (b), such Member agrees that in the event
         subsequent thereto, it receives a notice from such financial
         institution to the effect that the Eurodollar Rate would again reflect
         the cost of funds for such financial institution in connection with any
         proposed or current borrowings by such Member from such financial
         institution, such Member shall promptly notify the Managing Member that
         it has received such a notice.

                  (c) Upon its receipt of any notice described in clause (b) of
         this Section, the Managing Member shall promptly notify EPED B or
         Garnet (as applicable) and El Paso of the change in the El Paso
         Applicable Rate required pursuant to the applicable EPED B Demand Loan
         or Garnet Demand Loan.

         Section 6.10 Certain Assets. The Managing Member hereby represents and
warrants to the Diamond Class A Member, as of the Closing Date, that (a) the
amount shown on Schedule 3.2(b) below the heading "Fair Market Value" for each
Specified Diamond Asset is El Paso's book value of such Specified Diamond Asset
at the Closing Date as reflected on El Paso's books and records in accordance
with GAAP and (b) the amount shown on Schedule 6.10 below the heading "Fair
Market Value" for each asset described thereon is (i) in the case of the assets
described on Schedule 6.10 as "Assets to be Held by Aquamarine," Diamond
Holdings' book value of such asset at the Closing Date and (ii) in the case of
the asset described on Schedule 6.10 as "Assets to be Held by Peridot," the book
value of such assets at the time of purchase thereof by Peridot as reflected on
Peridot's books and records in accordance with GAAP.

         Section 6.11 Covenant of the Managing Member. Except as otherwise
permitted by this Diamond LLC Agreement, the Managing Member hereby covenants
and agrees not to (i) take any action to file a certificate of cancellation or
its equivalent with respect to itself, (ii) withdraw or attempt to withdraw from
Diamond, (iii) exercise any power under the LLC Act to dissolve Diamond, (iv)
except incident to a Permitted Transfer, Dispose of all or any portion of its
Diamond Interest or (v) petition for judicial dissolution of Diamond. Further,
except incident to a Permitted Transfer, the Managing Member hereby covenants
and agrees to continue to carry out the duties of the Managing Member under this
Diamond LLC Agreement until Diamond is dissolved and liquidated pursuant to
Article XII.



                                       33
<PAGE>
                                                           Diamond LLC Agreement


         Section 6.12 Certain Covenants Relating to the Separateness of Diamond.
Diamond shall maintain its separate existence and, specifically, shall conduct
its affairs in accordance with, and the Managing Member and each Member agrees
that it will not take any actions in its dealings with Diamond or with other
Persons (including their creditors) that are inconsistent with, the following:

                  (a) Diamond shall: (i) maintain and prepare separate financial
         reports (if any) and financial statements (if any) in accordance with
         GAAP, showing its assets and liabilities separate and apart from those
         of any other Person, and will not have its assets listed on the
         financial statement of any other Person (provided, however, that
         Diamond's assets may be included in a consolidated financial statement
         of a Member if inclusion on such consolidated financial statement is
         required to comply with the requirements of GAAP, but only if (x) such
         consolidated financial statement shall be appropriately footnoted to
         the effect that Diamond's assets are owned by Diamond and that they are
         being included on the consolidated financial statement of such Member
         solely to comply with the requirements of GAAP, and (y) such assets
         shall be listed on Diamond's own separate balance sheet); (ii) maintain
         its books, records and bank accounts separate from those of its
         Affiliates, any constituent party and any other Person; and (iii) not
         permit any Affiliate or constituent party (other than the Managing
         Member, the Members and the Management Company) independent access to
         its bank accounts.

                  (b) Diamond shall not commingle or pool any of its funds or
         other assets with those of any Affiliate or constituent party or any
         other Person, and it shall hold all of its assets in its own name.

                  (c) Diamond shall conduct its own business in its own name and
         shall not operate, or purport to operate, collectively as a single or
         consolidated business entity with respect to any Person.

                  (d) Diamond shall, insofar as is consistent with commercial
         and business circumstances affecting its business and financial
         condition, remain solvent and pay its own debts, liabilities and
         expenses (including overhead expenses, if any) only out of its own
         assets as the same shall become due (except for certain legal fees,
         accounting fees and other out-of-pocket costs and expenses incurred by
         Diamond in connection with the formation, administration and activities
         of Diamond, which items may be paid by the Diamond Class B Member, or
         any Affiliate of Diamond or the Diamond Class B Member) (provided, that
         this covenant shall not constitute a guaranty or "keep well" obligation
         by any of the Managing Member, any Member, the Management Company, any
         administrator of or with respect to Diamond or any other Person in
         respect of Diamond or its debt, liabilities or expenses, or any
         financial or balance sheet condition or ratio of or relating to
         Diamond).

                  (e) Diamond has done, or caused to be done, and shall do, all
         things necessary to observe all Delaware limited liability company
         formalities and other organizational formalities, and preserve its
         existence (subject to Article XII and the other express provisions
         hereof), and it shall not, nor will it permit any Affiliate or
         constituent party to,



                                       34
<PAGE>
                                                           Diamond LLC Agreement


         amend, modify or otherwise change this Diamond LLC Agreement in a
         manner which would adversely affect the existence of Diamond as a
         special purpose entity.

                  (f) Diamond shall not have any employees.

                  (g) Diamond does not, and shall not, (i) guarantee, become
         obligated for, or hold itself or its credit out to be responsible for
         or available to satisfy, the debts or obligations of any other Person
         or (ii) control the decisions or actions respecting the daily business
         or affairs of any other Person other than pursuant to the Transaction
         Documents.

                  (h) Diamond shall, to the extent it utilizes stationery,
         invoices and checks, maintain and utilize separate stationery, invoices
         and checks bearing its own name.

                  (i) Diamond shall, at all times, hold itself out to the public
         as a legal entity separate and distinct from any other Person and shall
         correct any known misunderstanding regarding its separate identity.

                  (j) Diamond shall not identify itself as a division of any
         other Person.

                  (k) Diamond shall maintain its assets in such a manner that it
         will not be costly or difficult to segregate, ascertain or identify its
         individual assets from those of any Affiliate, constituent party or any
         other Person.

                  (l) Diamond shall not use its separate existence to abuse
         creditors or to perpetrate a fraud, injury, or injustice on creditors
         in violation of Applicable Law.

                  (m) Diamond shall not, in connection with the Transaction
         Documents, act with an intent to hinder, delay, or defraud any of its
         creditors in violation of Applicable Law.

                  (n) Diamond shall not be consensually merged or legally
         consolidated with any other Person (other than being consolidated with
         certain Affiliates for financial reporting and federal tax purposes),
         but without prejudice to the right to dissolve, liquidate or wind up in
         accordance with this Diamond LLC Agreement or Applicable Law.

                  (o) Diamond shall not incur any Relevant Indebtedness except
         to the extent not prohibited by the Transaction Documents.

                  (p) Diamond shall not make loans or advances to any Person,
         except as permitted by the Transaction Documents.

                  (q) Diamond shall not pledge its assets for the benefit of any
         Person, except pursuant to the Transaction Documents.

                  (r) The issuances of the Diamond Class A Member Interest to
         Investor and the Diamond Class B Member Interest to Garnet were and are
         intended to be, and shall be accounted for on the books, records and
         financial statements of Diamond, Investor and



                                       35
<PAGE>
                                                           Diamond LLC Agreement


         Garnet as, the issuance of equity capital and not as a loan by Investor
         or Garnet, as the case may be, to Diamond.

                  (s) Diamond shall make no transfer of its assets except in
         accordance with the Transaction Documents.

                                   ARTICLE VII

                          ROLE OF NON-MANAGING MEMBERS

         Section 7.1 Rights or Powers. No Member (other than the Managing
Member) shall have any right or power to take part in the management or control
of Diamond or its business and affairs or to act for or bind Diamond in any way.
Notwithstanding the foregoing, the Members shall have all the rights and powers
specifically set forth in this Diamond LLC Agreement, including those rights set
forth in Section 7.4. Any Member, any Affiliate thereof or an employee,
stockholder, agent, member, manager, director or officer of a Member or any
Affiliate thereof, may also be an employee or agent of Diamond or a member,
manager or officer of the Managing Member. The existence of these relationships
and acting in such capacities will not result in such Member being deemed to be
participating in the control of the business of Diamond or otherwise affect the
limited liability of such Member.

         Section 7.2 Voting Rights. Except for the Managing Member acting in its
capacity as such, each Member shall have the right to vote only on those matters
expressly reserved for its vote (i) as provided in this Diamond LLC Agreement or
(ii) as required by mandatory provisions of the LLC Act.

         Section 7.3 Procedure for Consent. In any circumstances requiring the
approval or consent of any Member specified in this Diamond LLC Agreement, such
approval or consent may, except as expressly provided to the contrary in this
Diamond LLC Agreement, be given or withheld in the sole and absolute discretion
of such Member. Each Member agrees to use its best efforts to respond promptly
to any request for any such approval or consent. If the Managing Member receives
the necessary approval or consent of the Members to such action, the Managing
Member shall be authorized and empowered to implement such action without
further authorization by the Members.

         Section 7.4 Special Rights of the Diamond Class A Member.
Notwithstanding any other provision hereof, the Diamond Class A Member (a) shall
have the right and power to control the liquidation of Diamond as Liquidator as
set forth in Article XII, (b) shall have the sole right to exercise the rights
of Diamond (for itself and as the sole member of Diamond Holdings) set forth in
Section 5.2 of the Management Agreement, (c) shall have the right to become the
Managing Member or to appoint a replacement Managing Member pursuant to Section
6.1(a) and (d) shall have the sole right (i) to cause a Diamond Asset Remedy
pursuant to Section 11.3 and (ii) to cause one or more Investor Asset Sales
pursuant to Section 11.4.



                                       36
<PAGE>

                                                           Diamond LLC Agreement

                                  ARTICLE VIII

                          ACCOUNTING; BOOKS AND RECORDS

         Section 8.1 Accounting; Books and Records.

         (a) Maintenance of Books and Records. Diamond shall maintain at its
principal place of business or, upon notice to the Members, at such other place
as the Managing Member shall determine, separate books of account for Diamond,
which shall include a record of all costs and expenses incurred, all charges
made, all credits made and received, and all income derived in connection with
the conduct of Diamond and the operation of its business in accordance with this
Diamond LLC Agreement.

         (b) Accounting Methods.

                  (i) Diamond shall maintain appropriate books and records in a
         manner as necessary to comply with GAAP and with the Code and the
         Regulations.

                  (ii) All amounts payable under any agreement between Diamond
         on the one hand and the Members or their Affiliates (excluding Diamond)
         on the other hand, other than Distributions, shall be treated as
         occurring between Diamond and a Person who is not a Member within the
         meaning of Section 707(a)(1) of the Code and such amounts payable by
         Diamond to any Member or such Member's Affiliates shall be considered
         an expense or capital cost, as the case may be, of Diamond for income
         tax and financial reporting purposes, and, except as specifically
         contemplated by Article V shall not be considered a Distribution to
         such Member, including in maintaining such Member's Capital Account,
         and any such amounts payable by any Member or its Affiliates to Diamond
         shall not, except as specifically contemplated by Article III, be
         considered a contribution to Diamond, including in maintaining such
         Member's Capital Account.

         (c) Access to Books, Records, etc. Subject to Section 8.4, each Member
or any agents or representatives of any Member (including the Class A
Shareholder), upon reasonable notice and with reasonable frequency, may (i)
visit and inspect any of the properties of Diamond or any Subsidiary of Diamond,
(ii) examine any information with respect to Diamond or its assets that it may
reasonably request and make copies of and abstracts from the financial and
operating records and books of account of Diamond or such Subsidiary, and (iii)
discuss the affairs, finances and accounts of Diamond with the Managing Member
and its officers, directors and independent accountants, all at such reasonable
times and as often as such Member or any agents or representatives of such
Member may reasonably request, and Diamond shall pay or reimburse the Diamond
Class A Member for its reasonable costs and expenses incurred in connection with
such visits, inspections and examinations; provided, however, that Diamond shall
have no obligation to pay the expense of such visits, inspections and
examinations in any calendar year to the extent that the aggregate amount of all
such expenses of the Diamond Class A Member, together with all expenses of the
Topaz Minority Member incurred in connection with visits, inspections and
examinations pursuant to Section 8.1(c) of the Topaz LLC Agreement and all
expenses of the Garnet Preferred Member incurred in connection with visits,
inspections and examinations pursuant to Section 8.1(c) of the Garnet LLC
Agreement, in each



                                       37
<PAGE>
                                                           Diamond LLC Agreement


case incurred during such calendar year, exceeds $50,000 or, following delivery
of a QMR Notice, $2,000,000 (provided, that such amount following delivery of a
QMR Notice shall be calculated from the date of such QMR Notice without regard
to calendar year) unless a Note Trigger Event, Specified Equity Event or
Shareholder Trigger Event has occurred and is continuing in which case there
shall be no limit; provided, further, that all visits and inspections shall be
subject to reasonable safety requirements and shall be made at the sole risk of
the applicable Diamond Class A Member, agent, representative or Class A
Shareholder. Notwithstanding the foregoing, to the extent the properties or
information referred to herein relate to any Subsidiary of Diamond that is not,
directly or indirectly, wholly owned by Diamond, the rights granted to each
Member pursuant to this Section 8.1(c) are expressly subject to compliance by
such Member with the confidentiality procedures and guidelines of such
Subsidiary, as in effect from time to time; provided, that the Managing Member
will cause Diamond to use reasonable efforts to cause its Subsidiaries to avoid
imposing confidentiality restrictions that prohibit disclosure of information to
Persons that agree to be bound by the applicable confidentiality restrictions.

         Section 8.2 Reports.

         (a) In General. The Managing Member shall be responsible for the
preparation of financial reports of Diamond and the coordination of financial
matters of Diamond with Diamond's accountants. Each report delivered by Diamond
to the Members pursuant to this Section 8.2 shall be accompanied by a
representation of an Authorized Officer of El Paso that such report presents
fairly in all material respects the information contained therein, subject, in
the case of the reports to be delivered pursuant to Section 8.2(c), to year-end
audit adjustments.

         (b) Annual Reports. Within 120 days after the end of each Fiscal Year
commencing with the Fiscal Year ending December 31, 2001, the Managing Member
shall cause to be prepared and to be delivered to each other Member the
following:

                  (i) Financial Reports. A balance sheet as of the last day of
         such Fiscal Year and an income statement and statement of cash flows
         for Diamond for (x) in the case of the Fiscal Year ending December 31,
         2001, the period from formation of Diamond to December 31, 2001, and
         (y) in the case of any other Fiscal Year, such Fiscal Year, and notes
         associated with each, in each case prepared in accordance with GAAP and
         audited by the JV Accountants; and

                  (ii) Officer's Certificate. Written certification by an
         Authorized Officer of the Managing Member that Diamond is in compliance
         with Section 6.5(a)(ii).

The financial statements described in clause (i) of this Section 8.2(b) shall be
accompanied by a representation of the Managing Member stating that (x) the
financial statements described in clause (i) of this Section 8.2(b) present
fairly, in all material respects, the financial position of Diamond at the end
of the most recently completed Fiscal Year and the results of its operations and
its cash flows for such applicable period, in conformity with GAAP and (y) after
reasonable inquiry, the Managing Member has no actual knowledge of the
occurrence of any acceleration of the New Notes as a result of a New Indenture
Event of Default, Note Trigger Event, Specified Equity Event, Shareholder
Trigger Event or Liquidating Event (other than a Liquidating Event of


                                       38
<PAGE>
                                                           Diamond LLC Agreement


the type described in Section 12.1(a)), in any such case, that is then
continuing or, if the Managing Member has such actual knowledge, specifying the
then continuing event and the action that the Managing Member has taken or
proposes to take with respect thereto.

         (c) Quarterly Reports. Within 60 days after the close of each of the
first three Fiscal Quarters during any Fiscal Year beginning with the Fiscal
Quarter ending March 31, 2002, the Managing Member shall cause to be prepared
and to be delivered to each other Member the following:

                  (i) Financial Reports. Unaudited financial statements
         consisting of a balance sheet as of the last day of such Fiscal Quarter
         and an income statement and a statement of cash flows for Diamond for
         such Fiscal Quarter, in each case prepared in accordance with GAAP
         except that such quarterly financial statements need not include
         footnote disclosure and may be subject to ordinary year-end adjustment;
         and

                  (ii) Officers Certificate. Written certification by an
         Authorized Officer of the Managing Member that Diamond is in compliance
         with Section 6.5(a)(ii).

The financial statements described in clause (i) of this Section 8.2(c) shall be
accompanied by a representation of the Managing Member stating that (x) the
financial statements described in clause (i) of this Section 8.2(c) present
fairly, in all material respects, the financial position of Diamond at the end
of the most recently completed Fiscal Quarter and the results of its operations
and its cash flows for such Fiscal Quarter, in conformity with GAAP, subject to
year end audit requirements, and (y) after reasonable inquiry, the Managing
Member has no actual knowledge of the occurrence of any acceleration of the New
Notes as a result of a New Indenture Event of Default, Note Trigger Event,
Specified Equity Event, Shareholder Trigger Event or Liquidating Event (other
than a Liquidating Event of the type described in Section 12.1(a)), in any such
case, that is then continuing or, if the Managing Member has such actual
knowledge, specifying the then continuing event and the action that the Managing
Member has taken or proposes to take with respect thereto.

         (d) Retirement, Purchase Option and Liquidation Date Reports. The
Managing Member shall cause to be prepared and to be delivered to each Member
(x) on any JV Final Payment Date with respect to Diamond, a balance sheet as of
the Mark-to-Market Measurement Date setting forth the aggregate Mark-to-Market
Value for each of the Diamond Permitted Assets (a "MARK-TO-MARKET BALANCE
SHEET") together with a certificate by the Managing Member that such statements
have been prepared in accordance with this Diamond LLC Agreement, subject to
adjustment as a result of the audit to be provided pursuant to the following
clause (y) and (y) on the date on which final Distributions are made to the
Members pursuant to Section 12.2 hereof and not later than seventy-five (75)
days after the Retirement Date on which the Diamond Class A Member Interest is
retired or the Purchase Date, certification by the JV Accountants that such
statements have been prepared in accordance with this Diamond LLC Agreement.

         (e) Valuation Reports. The Managing Member shall cause to be prepared
contemporaneously with any adjustment to the Gross Asset Values of Diamond
assets in accordance with clause (b) of the definition of Gross Asset Value,
reports required to determine



                                       39
<PAGE>
                                                           Diamond LLC Agreement


the Mark-to-Market Value of such assets and (x) in the event any Diamond
Permitted Asset is acquired (whether by contribution or purchase), sold or
Distributed by Diamond, with respect to such Diamond Permitted Asset only and
(y) upon the occurrence of any adjustment to the Gross Asset Value of all
Diamond Permitted Assets, with respect to all Diamond Permitted Assets, and the
Managing Member shall furnish such reports to each Member.

         (f) [Reserved].

         Section 8.3 Tax Matters.

         (a) Actions by Managing Member. The Managing Member is authorized to
make any and all elections for federal, state, and local tax purposes including
any election, if permitted by applicable law: (i) to adjust the basis of Diamond
Property pursuant to Code Sections 754, 734(b) and 743(b), or comparable
provisions of state or local law, in connection with Dispositions of Diamond
Interests and in connection with Diamond Distributions; (ii) with the consent of
the Members, to extend the statute of limitations for assessment of tax
deficiencies against the Members with respect to adjustments to Diamond's
federal, state, or local tax returns; and (iii) to the extent provided in Code
Sections 6221 through 6231, to represent Diamond and the Members before taxing
authorities or courts of competent jurisdiction in tax matters affecting Diamond
or the Members in their capacities as Members, and to file or cause to be filed
any tax returns and execute any agreements or other documents relating to or
affecting such tax matters, including agreements or other documents that bind
the Members with respect to such tax matters or otherwise affect the rights of
Diamond and the Members. The Managing Member is specifically authorized to act
as the "TAX MATTERS MEMBER" under the Code and in any similar capacity under
state or local law.

         (b) Tax Information and Filings. The Managing Member shall deliver or
cause to be delivered to each Member necessary tax information for each Member's
estimated quarterly tax filings as soon as practicable after the end of each
quarter of each Fiscal Year of Diamond. The Managing Member shall deliver or
cause to be delivered to each Member: (i) on or prior to March 30 of each Fiscal
Year, the Managing Member's good faith estimate of the amount of such Member's
allocable share of taxable income or loss of Diamond for the preceding Fiscal
Year, (ii) on or prior to July 30 of each Fiscal Year, an update of the estimate
for the preceding Fiscal Year delivered pursuant to clause (i) and (iii) as soon
as practicable after the end of each Fiscal Year of Diamond but not later than
September 15 of the next succeeding Fiscal Year, necessary tax information for
each Member's annual tax filings. The Managing Member shall file or cause to be
filed tax or information returns and all other filings for Diamond prepared in
accordance with the Code, the Regulations and applicable state and local tax
laws. The Managing Member shall use reasonable efforts to provide the Diamond
Class A Member with details concerning the foregoing information upon the
Diamond Class A Member's reasonable inquiries.

         (c) Tax Classification.

                  (i) The Managing Member shall take such action as may be
         required under the Code and Regulations to cause Diamond to be treated
         as a partnership and each of



                                       40
<PAGE>
                                                           Diamond LLC Agreement


         Diamond Holdings, Aquamarine and Peridot to be treated as a disregarded
         entity for United States federal income tax purposes.

                  (ii) To the extent Section 8.3(c)(i) does not govern the state
         and local tax classification of Diamond, Diamond Holdings, Aquamarine
         and Peridot, the Managing Member shall take such action as may be
         required under applicable state and/or local law to cause Diamond to be
         treated as, and in a manner consistent with a partnership (or the
         functional equivalent thereof) and to cause each of Diamond Holdings,
         Aquamarine and Peridot to be treated as, and in a manner consistent
         with, a disregarded entity (or the functional equivalent thereof) for
         state and local income and franchise tax purposes; provided, that the
         Managing Member shall not take any action under this clause (c)(ii)
         which would be inconsistent with its obligations under Section
         8.3(c)(i).

         Section 8.4 Proprietary Information. Notwithstanding any provision of
this Diamond LLC Agreement or any other Transaction Document to the contrary,
the Diamond Class A Member shall not have access to (i) information that the
Managing Member reasonably believes to be in the nature of trade secrets or
proprietary information, (ii) any information subject to the attorney-client
privilege unless disclosure to the Diamond Class A Member would not result in a
waiver of such privilege, (iii) any information that is required to be kept
confidential by Applicable Law or (iv) any information that is required to be
kept confidential by any Contractual Obligation entered into by any Diamond
Class B Member, Diamond or any Diamond Project Company with any third person in
good faith in the ordinary course of business and in any context that is not
unreasonable in light of the contemplated transaction.

                                   ARTICLE IX

                              AMENDMENTS; MEETINGS

         Section 9.1 Amendments. Amendments to this Diamond LLC Agreement may be
proposed by the Members. Following such proposal, the Managing Member shall
submit to the Members a verbatim statement of any proposed amendment if counsel
for Diamond shall have approved of the same in writing as to form, and the
Managing Member shall include in any such submission a recommendation as to the
proposed amendment. The Managing Member shall seek the written vote of the
Members on the proposed amendment or shall call a meeting to vote thereon and to
transact any other business that it may deem appropriate. A proposed amendment
shall be adopted and be effective as an amendment to this Diamond LLC Agreement
only if it receives the affirmative vote of all of the Members.

         Section 9.2 Meetings of the Members.

         (a) Meetings of the Members may be called by the Managing Member and
shall be called upon the written request of any Member. The notice shall state
the nature of the business to be transacted. Subject to other requirements
specified herein regarding notice periods, notice of any such meeting shall be
given to all Members not less than five Business Days nor more than thirty days
prior to the date of such meeting. Members may vote in person, by proxy or by
telephone at such meeting. Whenever the vote or consent of Members is permitted
or required under this Diamond LLC Agreement, such vote or consent may be given
at a meeting of



                                       41
<PAGE>
                                                           Diamond LLC Agreement


Members or may be given in accordance with the procedure prescribed in Section
9.3. Except as otherwise expressly provided in this Diamond LLC Agreement, the
unanimous vote of the Members shall be required to constitute the act of the
Members.

         (b) For the purpose of determining the Members entitled to vote on, or
to vote at, any meeting of the Members or any adjournment thereof, the Managing
Member or the Member requesting such meeting may fix, in advance, a date as the
record date for any such determination. Such date shall not be more than thirty
days nor less than one Business Day before any such meeting.

         (c) Each Member may authorize any Person or Persons to act for it by
proxy on all matters in which the Member is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting. Every
proxy must be signed by the Member or its attorney-in-fact. No proxy shall be
valid after the expiration of eleven months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
of the Member executing it or as provided under the terms of such proxy.

         (d) Each meeting of Members shall be conducted by the Managing Member
or such other Person as the Managing Member may appoint pursuant to such rules
for the conduct of the meeting as the Managing Member or such other Person deems
appropriate.

         Section 9.3 Unanimous Consent. In the event the consent of the Members
is required for any action to be taken by Diamond, such consent may be given at
a meeting, which may be conducted by conference telephone call, or provided in a
writing executed by all the Members.

                                    ARTICLE X

                             TRANSFERS OF INTERESTS

         Section 10.1 Restriction on Dispositions of Interests.

         (a) Dispositions of Diamond Class A Member Interest. Except as provided
in Article XI or Section 13.15, the Diamond Class A Member shall not Dispose of
(other than by a retirement, repurchase or redemption) all or any portion of its
Diamond Class A Member Interest or withdraw from Diamond without the prior
written consent of the Diamond Class B Member (or, if EPED B is not the Managing
Member of the Diamond Class B Member, the prior written consent of EPED B) in
its sole discretion; provided, however, that during the Extension Period, no
such consent shall be required in connection with the Disposition by the Diamond
Class A Member of its Diamond Class A Member Interest to a Qualified Holder at
any time after the Asset Sale Standstill Period for such Disposition shall have
expired. Following any such Disposition by Investor of its entire Diamond Class
A Member Interest, Investor shall be deemed withdrawn from Diamond as a Diamond
Class A Member. Upon any Disposition, in whole or in part, made in accordance
with this Section 10.1(a), the transferee of such Diamond Interest will be
admitted as a Diamond Class A Member without further action or consent by any
other Member.

         (b) Dispositions of Diamond Class B Member Interest. The Diamond Class
B Member shall not Dispose of its Diamond Class B Member Interest to any Person
or withdraw



                                       42
<PAGE>
                                                           Diamond LLC Agreement


from Diamond without the prior written consent of the Diamond Class A Member in
its sole discretion; provided, however, that the Diamond Class B Member may
Dispose of all or any portion of its Diamond Class B Member Interest to any El
Paso Affiliate that is a Qualified Holder. Following any Disposition of the
Diamond Class B Member Interest in whole, the Diamond Class B Member shall be
deemed withdrawn from Diamond as a Diamond Class B Member. Upon any Disposition
made in accordance with this Section 10.1(b), the transferee of such Diamond
Interest will be admitted as a Diamond Class B Member without further action or
consent by any other Member.

         (c) Permitted Transfers. Any Disposition permitted by this Section 10.1
shall be referred to in this Diamond LLC Agreement as a "PERMITTED TRANSFER,"
the Person to which the applicable Diamond Interest is transferred shall be a
"PERMITTED TRANSFEREE" and the Diamond Interest transferred shall be a
"TRANSFERRED INTEREST." A Permitted Transferee shall be entitled to become a
substituted Member in Diamond in respect of the applicable Transferred Interest
without any further act on the part of any other Member or the Managing Member
being required. Any Permitted Transferee of 100% of the Diamond Class B Member
Interest shall become the successor Managing Member hereunder without any
further act on the part of any other Member being required; provided, that such
successor Managing Member shall be subject to replacement as set forth in
Section 6.1(a).

         Section 10.2 Prohibited Dispositions.

         (a) Any purported Disposition of a Diamond Interest that is not a
Permitted Transfer shall be null and void and of no effect whatever; provided,
however, that, if Diamond is required to recognize a Disposition of a Diamond
Interest that is not a Permitted Transfer, the Transferred Interest shall be
strictly limited to the transferor's rights to allocations and Distributions as
provided by this Diamond LLC Agreement with respect to the Transferred Interest,
which allocations and Distributions may be applied (without limiting any other
legal or equitable rights of Diamond) to satisfy any debts or obligations, or
liabilities for damages that the transferor or transferee of such Diamond
Interest may have to Diamond.

         (b) To the fullest extent permitted by law, in the case of a
Disposition or attempted Disposition of a Diamond Interest that is not a
Permitted Transfer, the parties engaging or attempting to engage in such
Disposition shall be liable to indemnify and hold harmless Diamond and the other
Members from all losses, costs, liability, and damages that any of such
indemnified Persons may incur (including incremental tax liability and
reasonable lawyers' fees and expenses) as a result of such Disposition or
attempted Disposition and efforts to enforce the indemnity granted hereby.



                                       43
<PAGE>
                                                           Diamond LLC Agreement


                                   ARTICLE XI

                       RETIREMENT OPTION; PURCHASE OPTION;
                         ASSET REMEDY; EXTENSION PERIOD

         Section 11.1 Diamond Class B Member's Retirement Option.

         (a) Retirement Option. The Diamond Class B Member may, without the
consent of the Diamond Class A Member, at any time elect to cause not less than
all of the Diamond Class A Member Interest to be retired in accordance with this
Section 11.1 (the "DIAMOND RETIREMENT OPTION"), by making an Irrevocable
Election and giving written notice thereof (a "RETIREMENT NOTICE") to the
Diamond Class A Member, the other Members (if any), the Indenture Trustee (if
any Notes are then Outstanding) or the Fiscal Agent (if any Notes are not then
Outstanding) and the New Indenture Trustee (if any New Notes are then
Outstanding) (which notice shall include notification as to the matters set
forth in Section 5.5); provided, however, that the Diamond Retirement Option may
not be exercised without the consent of the Diamond Class A Member: (i) after
the earliest to occur of (x) a Liquidating Event and (y) if a Note Trigger Event
has occurred, the applicable Asset Remedy Standstill Expiration Date, provided,
that, following the exercise and consummation of the Share Purchase Option, the
Diamond Retirement Option may be exercised by the Diamond Class B Member after a
Specified Equity Event or delivery of a QMR Notice without the consent of the
Diamond Class A Member; or (ii) during the Extension Period at any time
following the date on which an Asset Sale Notice shall have become effective
pursuant to Section 11.4(a) until the earlier of the date of (x) the rescission
of such Asset Sale Notice by the Diamond Class A Member and (y) the receipt by
Diamond of the proceeds received from the sale of all assets identified in such
Asset Sale Notice; and provided, further, that the Diamond Retirement Option may
not be exercised (x) if the Diamond Retirement Amount payable in connection with
such Diamond Retirement Option would exceed the balance of the Diamond Class A
Member's Capital Account immediately after giving effect to the adjustments and
allocations required by the first sentence of Section 11.1(c), and (y) unless
the Topaz Majority Member exercises, simultaneously with the exercise of the
Diamond Retirement Option, either the Topaz Purchase Option or the Topaz
Retirement Option. Notwithstanding the foregoing, (i) the Diamond Retirement
Option may be exercised without the consent of the Diamond Class A Member at any
time during a FRCA Option Period so long as the Topaz Majority Member exercises,
simultaneously with the exercise of the Diamond Retirement Option, either the
Topaz Purchase Option or the Topaz Retirement Option and (ii) the Diamond
Retirement may not be exercised after (x) if a Specified Equity Event has
occurred, the earliest of (A) a Special Management Replacement Date, (B) the
date on which an Asset Remedy Notice becomes effective in accordance with
Section 11.3(a) of the Diamond LLC Agreement, Garnet LLC Agreement or Topaz LLC
Agreement, or (C) the date on which a Liquidation Notice becomes effective under
Section 12.10 of the Diamond LLC Agreement, the Topaz LLC Agreement or the
Garnet LLC Agreement, or (y) the delivery of a QMR Notice.

         (b) Retirement Notice. Any Retirement Notice shall include the
following:

                  (i) a statement that the entire Diamond Class A Member
         Interest is to be retired;



                                       44
<PAGE>
                                                           Diamond LLC Agreement


                  (ii) the date on which the retirement Distribution shall be
         made to the Diamond Class A Member (the "RETIREMENT DATE"), which date
         shall not be less than ten Business Days nor more than ninety days
         after the date on which the Retirement Notice was given; provided,
         however, that prior to the Extension Period Commencement Date and so
         long as any Notes or New Notes are Outstanding, if an Asset Remedy
         Notice or Liquidation Notice has been delivered pursuant to this
         Diamond LLC Agreement or a Specified Equity Event has occurred, in each
         case prior to the delivery of such Retirement Notice, the Retirement
         Date shall not be later than (A) the applicable Asset Remedy Standstill
         Expiration Date or (B) in the case of a Specified Equity Event, the
         earlier of the Special Management Replacement Date or the date on which
         an Asset Remedy Notice becomes effective in accordance with Section
         11.3(a);

                  (iii) a statement specifying the Diamond Retirement Amount to
         be Distributed or paid on the Retirement Date and showing the
         calculation thereof in reasonable detail; and

                  (iv) a representation and warranty by the Diamond Class B
         Member that Diamond has, or will have on the Retirement Date, Cash in
         an amount equal to or greater than the Diamond Retirement Amount.

         (c) Mark-to-Market. On the Retirement Date, the Gross Asset Values of
all of Diamond assets shall be adjusted to equal their respective Mark-to-Market
Values as of the Mark-to-Market Measurement Date and any Net Income, Net Losses
and other items of income, gain, loss and deduction of Diamond shall be
allocated among the Members as of such Mark-to-Market Measurement Date in
accordance with Article IV. Solely for GAAP accounting purposes, the retirement
of the Diamond Class A Member Interest pursuant to this Section 11.1(c) shall be
deemed to be effective on the applicable Mark-to-Market Measurement Date. For
all purposes of the Transaction Documents, on and after the retirement of the
Diamond Class A Member Interest pursuant to this Section 11.1(c), the Diamond
Class A Member shall be deemed to have withdrawn as, and to no longer be, a
Diamond Class A Member hereunder and shall no longer be entitled to receive the
Accrued Diamond Return.

         (d) Retirement Amount. On the Retirement Date, Diamond shall Distribute
to the Diamond Class A Member Cash in an amount (the "DIAMOND RETIREMENT
AMOUNT") that is equal to the excess of (x) the fair market value of the Diamond
Class A Member Interest as of the Applicable Notice Date, which fair market
value shall be presumed to be the Diamond Value as of the Applicable Notice Date
(unless an Appraised Value Election has been made, in which case such fair
market value shall be presumed to be the Appraised Price of the Diamond Class A
Member Interest), over (y) the product of (I) the Diamond Percentage and (II)
all repayments of and proceeds of, and all interest and earnings on, Financial
Investments to the extent paid in Cash into the Accounts during the period from
the Applicable Notice Date to (and including) the Retirement Date and not
otherwise taken into account in the calculation of Diamond Value or Appraised
Price, as the case may be. In addition, as a condition to the retirement of the
Diamond Class A Member Interest on the Retirement Date, Diamond shall pay all
Administrative Expenses and New Administrative Expenses then due and owing (to
the extent such expenses are invoiced and notice thereof has been given to
Garnet or Diamond at least three Business Days prior to the Retirement Date) to
the extent not paid by Garnet, El Paso or any other Person on or



                                       45
<PAGE>
                                                           Diamond LLC Agreement


prior to the Retirement Date. Notwithstanding the foregoing, the Diamond Class A
Member may make an Appraised Value Election by delivering written notice of such
election to the Diamond Class B Member and Diamond no later than ten Business
Days following the Applicable Notice Date; provided, however, that the Diamond
Class A Member shall not be permitted to make an Appraised Value Election
hereunder unless the Topaz Minority Member simultaneously makes an Appraised
Value Election under the Topaz LLC Agreement with respect to its Topaz Minority
Member Interest; and provided, further, that (i) any such election by the
Diamond Class A Member shall be irrevocable upon delivery of such notice by the
Diamond Class A Member, (ii) the General Appraisal Procedures shall be
implemented, (iii) the Diamond Class A Member shall pay and assume liability
for, and indemnify the other Members and Diamond against, all fees, costs and
expenses in any way relating to or arising out of the General Appraisal
Procedures, including all fees and expenses of all of the appraisers engaged in
connection therewith and (iv) Diamond shall be obligated to Distribute the
Diamond Value on the Retirement Date, and the remainder of the Diamond
Retirement Amount (or, if the Diamond Retirement Amount is less than the amount
Distributed on the Retirement Date, a rebate in respect thereof) shall be
Distributed to the Diamond Class A Member (or reimbursed to Diamond, as the case
may be) through the post-closing adjustments described in Section 11.2(h).
Diamond shall Distribute to the Diamond Class A Member an amount equal to the
Diamond Value, and the Diamond Class A Member Interest in Diamond shall be
retired, at 12:00 noon (New York City time) on the Retirement Date.
Distributions to the Diamond Class A Member in connection with a retirement of
the Diamond Class A Member Interest shall consist solely of Cash unless
otherwise consented to by the Diamond Class A Member.

         (e) Treatment as a Retirement under Section 736. Payments made in
liquidation of the Diamond Interest of the retiring Diamond Class A Member shall
be made in exchange for the interest of such Member in Diamond Property pursuant
to Section 736(b)(1) of the Code, including the interest of such Member in the
goodwill of Diamond.

         Section 11.2 Diamond Class B Member's Purchase Option.

         (a) Purchase Option. The Diamond Class B Member may, at any time
permitted pursuant to Section 11.2(b), elect to purchase or to cause the
purchase of the Diamond Class A Member's entire Diamond Class A Member Interest
(the "DIAMOND PURCHASE OPTION"); provided, that the Diamond Class B Member makes
an Irrevocable Election and the Electing Purchasers give written notice (the
"PURCHASE OPTION NOTICE") to the Diamond Class A Member, the Indenture Trustee
(if any Notes are then Outstanding) or the Fiscal Agent (if any Notes are not
then Outstanding) and the New Indenture Trustee (if any New Notes are then
Outstanding) (which notice shall include notification as to the matters set
forth in Section 5.5). The Diamond Class B Member may designate any Person as
having the right, and may assign to any Person the right, to purchase all or a
portion of the Diamond Class A Member Interest (the Diamond Class B Member and
each such designee or assignee, an "ELECTING PURCHASER").

         (b) Exercise of Purchase Option. The Diamond Purchase Option may be
exercised at any time; provided, however that the Diamond Purchase Option may
not be exercised without the consent of the Diamond Class A Member: (i) after
the earliest to occur of (x) a Liquidating Event and (y) if a Note Trigger Event
has occurred, the applicable Asset Remedy Standstill



                                       46
<PAGE>
                                                           Diamond LLC Agreement


Expiration Date, provided, that, following the exercise and consummation of the
Share Purchase Option, the Diamond Purchase Option may be exercised by the
Diamond Class B Member after a Specified Equity Event or delivery of a QMR
Notice without the consent of the Diamond Class A Member; or (ii) during the
Extension Period at any time following the date on which an Asset Sale Notice
shall have become effective pursuant to Section 11.4(a) until the earlier of the
date of (x) the rescission of such Asset Sale Notice by the Diamond Class A
Member and (y) the receipt by Diamond of the proceeds received from the sale of
all assets identified in such Asset Sale Notice; and provided, further, that the
Diamond Purchase Option may not be exercised unless the Topaz Majority Member
exercises, simultaneously with the exercise of the Diamond Purchase Option,
either the Topaz Purchase Option or the Topaz Retirement Option. Notwithstanding
the foregoing, the Diamond Purchase Option may be exercised without the consent
of the Diamond Class A Member at any time during a FRCA Option Period so long as
the Topaz Majority Member exercises, simultaneously with the exercise of the
Diamond Purchase Option, either the Topaz Purchase Option or the Topaz
Retirement Option. Notwithstanding the foregoing, the Diamond Purchase Option
may not be exercised after (x) if a Specified Equity Event has occurred, the
earliest of (A) a Special Management Replacement Date, (B) the date on which an
Asset Remedy Notice becomes effective in accordance with Section 11.3(a) of the
Diamond LLC Agreement, Garnet LLC Agreement or Topaz LLC Agreement, or (C) the
date on which a Liquidation Notice becomes effective under Section 12.10 of the
Diamond LLC Agreement, the Topaz LLC Agreement or the Garnet LLC Agreement, or
(y) the delivery of a QMR Notice.

         (c) Purchase Option Notice. Any Purchase Option Notice shall include
the following:

                  (i) a statement that the entire Diamond Class A Member
         Interest is to be purchased;

                  (ii) a statement listing the Electing Purchasers and
         specifying the amount of the Diamond Class A Member Interest that each
         such Electing Purchaser has agreed to purchase; and

                  (iii) a statement specifying the date on which the closing of
         the purchase and sale of the Diamond Class A Member Interest shall
         occur (the "PURCHASE DATE"), which Purchase Date shall not be less than
         ten Business Days nor more than ninety days after the date on which the
         Purchase Option Notice was given; provided, however, that prior to the
         Extension Period Commencement Date and so long as any Notes or New
         Notes are Outstanding, if an Asset Remedy Notice or Liquidation Notice
         has been delivered pursuant to this Diamond LLC Agreement or a
         Specified Equity Event has occurred, in each case prior to the delivery
         of such Purchase Option Notice, then the Purchase Date shall not be
         later than (A) in the case of an Asset Remedy Notice or Liquidation
         Notice, the applicable Asset Remedy Standstill Expiration Date or (B)
         in the case of a Specified Equity Event, the earlier to occur of the
         Special Management Replacement Date or the date on which an Asset
         Remedy Notice becomes effective in accordance with Section 11.3(a), as
         applicable; and



                                       47
<PAGE>
                                                           Diamond LLC Agreement


                  (iv) a statement specifying the Diamond Purchase Price to be
         paid on the Purchase Date and showing the calculation thereof in
         reasonable detail.

         (d) Mark-to-Market. On the Purchase Date, the Gross Asset Values of all
of Diamond assets shall be adjusted to equal their respective Mark-to-Market
Values as of the Mark-to-Market Measurement Date and any Net Income, Gross
Income, Net Losses and other items of income, loss, gain, deduction and credit
of Diamond shall be allocated among the Members as of such Mark-to-Market
Measurement Date in accordance with Article IV.

         (e) Purchase Price. On the Purchase Date, the Electing Purchaser(s)
shall pay to the Diamond Class A Member, in consideration for the Diamond Class
A Member Interest, an amount of Cash (the "DIAMOND PURCHASE Price") that is
equal to the excess of (x) the fair market value of the Diamond Class A Member
Interest as of the Applicable Notice Date, which fair market value shall be
presumed to be the Diamond Value as of the Applicable Notice Date (unless an
Appraised Value Election has been made, in which case such fair market value
shall be presumed to be the Appraised Price of the Diamond Class A Member
Interest), over (y) the product of (I) the Diamond Percentage and (II) all
repayments of and proceeds of, and all interest and earnings on, Financial
Investments to the extent paid in Cash into the Accounts during the period from
the Applicable Notice Date to (and including) the Purchase Date and not
otherwise taken into account in the calculation of Diamond Value or Appraised
Price, as the case may be. In addition, as a condition to the purchase of the
Diamond Class A Member Interest on the Purchase Date, Diamond shall pay all
Administrative Expenses and New Administrative Expenses then due and owing (to
the extent such expenses are invoiced and notice thereof has been given to
Garnet or Diamond at least three Business Days prior to the Purchase Date) to
the extent not paid by Garnet, El Paso or any other Person on or prior to the
Purchase Date. Notwithstanding the foregoing, the Diamond Class A Member may
make an Appraised Value Election by delivering written notice of such election
to the Electing Purchaser(s) no later than ten Business Days following the
Applicable Notice Date; provided, however, that the Diamond Class A Member shall
not be permitted to make an Appraised Value Election hereunder unless it
simultaneously makes an Appraised Value Election under the Topaz LLC Agreement
with respect to its Topaz Minority Member Interest; and provided, further, that
(i) any such election by the Diamond Class A Member shall be irrevocable upon
delivery of such notice by the Diamond Class A Member, (ii) the General
Appraisal Procedures shall be implemented, (iii) the Diamond Class A Member
shall pay and assume liability for, and indemnify the other Members and the
Electing Purchaser(s) against, all fees, costs and expenses in any way relating
to or arising out of the General Appraisal Procedures, including all fees and
expenses of all of the appraisers engaged in connection therewith and (iv) the
Electing Purchaser(s) shall be obligated to pay the Diamond Value on the
Purchase Date, and the remainder of the Diamond Purchase Price (or, if the
Diamond Purchase Price is less than the amount paid on the Purchase Date, a
rebate in respect thereof) shall be paid to the Diamond Class A Member (or
Electing Purchaser(s), as the case may be) through the post-closing adjustments
described in Section 11.2(h).



                                       48
<PAGE>
                                                           Diamond LLC Agreement


         (f) Consummation of Purchase.

                  (i) The closing of the purchase and sale of the Diamond Class
         A Member Interest shall occur on the Purchase Date specified in the
         Purchase Option Notice; provided, that the Diamond Purchase Price shall
         be subject to post-closing adjustments as set forth in Section 11.2(h).

                  (ii) The closing shall occur at such place as is mutually
         agreeable to the Members, or upon the failure to agree, at the
         principal place of business of Diamond. On the Purchase Date, the
         Diamond Class A Member shall deliver to the Electing Purchasers good
         title to the Diamond Class A Member Interest purchased, free and clear
         of any liens, claims, encumbrances, security interests or options.

                  (iii) On the Purchase Date, the Members shall execute such
         documents and instruments of conveyance as may be reasonably necessary
         or appropriate to effectuate the transaction contemplated hereby,
         including the Disposition of the Diamond Class A Member Interest. The
         reasonable costs of such Disposition and closing, including attorneys'
         fees and filing fees of the Members, shall be paid by the Electing
         Purchasers in proportion to their Diamond Class A Member Interests.

                  (iv) Solely for GAAP accounting purposes and for purposes of
         the LLC Act, the purchase of the Diamond Class A Member Interest
         pursuant to this Section 11.2 shall be deemed to be effective as of the
         close of business on the applicable Mark-to-Market Measurement Date
         and, thereafter, the Electing Purchasers shall be admitted as
         substitute Diamond Class A Members of Diamond in respect of the
         portions of Investor's (or its successor's) Diamond Class A Member
         Interest acquired thereby and the Diamond Class A Member shall be
         deemed withdrawn as, and shall no longer be, a Diamond Class A Member
         hereunder.

         (g) Appraised Value Election. (x) In the event that the Class A Member
shall have made an Appraised Value Election in accordance with Section 11.1(d)
or Section 11.2(e) then, in each case, the Fair Market Value (determined as of
the applicable Purchase Date or Retirement Date) of all Appraised Value Property
shall be appraised in accordance with the General Appraisal Procedures. The
Diamond Class A Member shall pay and assume liability for, and indemnify the
other Members and Diamond against, all fees, costs and expenses in any way
relating to or arising out of the General Appraisal Procedures, including all
fees and expenses of all of the appraisers engaged in connection therewith.

         (h) Post-Closing Adjustments. Upon completion of the General Appraisal
Procedures with respect to Diamond and Topaz, if the Appraised Price with
respect to the Diamond Class A Member Interest exceeds the Diamond Value paid or
Distributed on the Purchase Date or Retirement Date, Diamond (in the case of a
Diamond Retirement Option) or the Electing Purchaser(s) (in the case of a
Diamond Purchase Option) shall Distribute or pay to the Diamond Class A Member
an amount equal to such excess. In the event that the Appraised Price with
respect to the Diamond Class A Member Interest is less than the Diamond Value
paid or Distributed on the Purchase Date or Retirement Date, the Diamond Class A
Member shall be obligated to pay (or cause to be paid) to Diamond (in the case
of a Diamond Retirement Option)



                                       49
<PAGE>
                                                           Diamond LLC Agreement


or the Electing Purchaser(s) (in the case of a Diamond Purchase Option) such
shortfall; provided, however, that in no event shall the Diamond Class A Member
be obligated to pay an amount in excess of (a) the amount received by the
Diamond Class A Member on the Retirement Date or Purchase Date, as applicable,
over (b) the product of (i) the Diamond Percentage and (ii) any amounts
specified in clause (a) used to redeem the Notes and/or the New Notes (after
having applied monies derived from all other sources to the redemption of the
Notes and/or the New Notes). Any amounts paid pursuant to this Section 11.2(h)
shall be treated as adjustments to the Diamond Purchase Price or the Diamond
Retirement Amount, as the case may be.

         (i) Treatment as Purchase Under Section 741. The Members agree to treat
the Disposition of the Diamond Class A Member Interest to the Electing
Purchasers pursuant to this Section 11.2 as a purchase and sale under Section
741 of the Code and not as a retirement under Section 736 of the Code.

         Section 11.3 Diamond Asset Remedy.

         (a) Exercise of Diamond Asset Remedy. So long as any Notes or New Notes
are Outstanding, the Diamond Class A Member may, at any time following a Note
Trigger Event, Shareholder Trigger Event or, after the repayment in full of all
Outstanding Notes, a Specified Equity Event, elect to cause (i) the sale of or
realization upon one or more assets of Diamond, Diamond Holdings, Aquamarine,
Peridot and/or any Diamond Project Company in accordance with clause (b) below
and/or (ii) the payment of Cash and/or proceeds of such asset sales pursuant to
Section 5.1(c), in each case by delivering an Asset Remedy Notice to the
Managing Member (and, if the Diamond Class B Member is not the Managing Member,
the Diamond Class B Member), and such Asset Remedy Notice shall, unless the
Diamond Class A Member Interest is retired pursuant to Section 11.1 or purchased
pursuant to Section 11.2 on or prior to (A) the applicable Asset Remedy
Standstill Expiration Date or (B) in the case of a Specified Equity Event, the
delivery of such Asset Remedy Notice, become effective on, and permit a Diamond
Asset Remedy on and after, (x) the applicable Asset Remedy Standstill Expiration
Date or (y) in the case of a Specified Equity Event, the delivery of such Asset
Remedy Notice; provided, however, that the Diamond Class A Member may rescind
such Asset Remedy Notice by delivering to the Managing Member (and, if the
Diamond Class B Member is not the Managing Member, the Diamond Class B Member)
written notice of such rescission; provided, further, that in the case of a
Specified Equity Event, if the Share Purchase Option is consummated on or prior
to the tenth Business Day following delivery of such Asset Remedy Notice, then
such notice shall be deemed to have been revoked and shall be of no further
force and effect. Any such rescission shall not affect the Diamond Class A
Member's right to deliver any subsequent Asset Remedy Notice.

         (b) Dispositions. After delivery of an Asset Remedy Notice and after
the occurrence of the applicable Asset Remedy Standstill Expiration Date or,
after repayment in full of the Outstanding Notes, a Specified Equity Event, the
Diamond Class A Member shall have the right and authority to (i) cause Diamond
to Dispose of any Diamond Property, (ii) cause Diamond to cause Diamond Holdings
to Dispose of or realize upon any Diamond Holdings Property, (iii) cause Diamond
to cause Diamond Holdings to cause Aquamarine and/or Peridot to Dispose of or
realize upon any Aquamarine Property or Peridot Property, as the case may be,
and/or (iv) cause Diamond to cause Diamond Holdings to cause Aquamarine and/or
Peridot to cause one or more



                                       50
<PAGE>
                                                           Diamond LLC Agreement


Diamond Project Companies to Dispose of or realize upon Property of such Diamond
Project Companies; provided, however, that no such Disposition shall be made to
any Person that is the Diamond Class A Member or a Restricted Person.

         Section 11.4 Asset Sales.

         (a) Exercise of Asset Sale Rights. So long as no Notes or New Notes are
Outstanding, the Diamond Class A Member may, at any time (x) following the
occurrence of a Shareholder Trigger Event or a Specified Equity Event or (y)
during the Extension Period, elect to cause (i) the sale of or realization upon
one or more assets of Diamond, Aquamarine, Peridot and/or the Diamond Project
Companies and/or (ii) the payment of Cash and/or proceeds of such asset sales
pursuant to Section 5.1(c) by delivering to the Managing Member (and, if the
Diamond Class B Member is not the Managing Member, the Diamond Class B Member)
an Asset Sale Notice and such Asset Sale Notice shall become effective to permit
the sale of the assets specified therein on the 10th Business Day following
delivery of such Asset Sale Notice; provided, however, that the Diamond Class A
Member may rescind such Asset Sale Notice by delivering to the Managing Member
(and, if the Diamond Class B Member is not the Managing Member, the Diamond
Class B Member) written notice of such rescission; and provided, further, that
if an Irrevocable Election has been made by the Diamond Class B Member and a
Purchase Option Notice or a Retirement Notice has been delivered pursuant to
this Diamond LLC Agreement on or prior to such 10th Business Day, no Asset Sale
Notice shall become effective to permit the sale of the assets specified therein
until the day after the Purchase Date or Retirement Date, as the case may be,
specified in such notice (and then if, but only if, such purchase or retirement
is not consummated). Any such rescission shall not affect the Diamond Class A
Member's right to deliver any subsequent Asset Sale Notice.

         (b) Standstill; Dispositions. Notwithstanding any delivery of an Asset
Sale Notice by the Diamond Class A Member in accordance with Section 11.4(a),
(i) (a) neither the Diamond Class A Member nor any of Diamond, Diamond Holdings,
Aquamarine or Peridot (at the direction of the Diamond Class A Member) may enter
into any binding agreement to Dispose of or realize upon any assets of Diamond,
Diamond Holdings, Aquamarine or Peridot until the expiration of the applicable
Asset Sale Standstill Period and (b) such agreements may be entered into only
with respect to the assets specified in the applicable Asset Sale Notice that
has become effective and (ii) no sale or other Disposition of any asset of
Diamond, Diamond Holdings, Aquamarine or Peridot shall be made to any Person
that is a Diamond Class A Member or a Restricted Person.

         Section 11.5 Extension Period.

         (a) Commencement of Extension Period. If a Shareholder Trigger Event or
a Specified Equity Event shall have occurred or is continuing after the later of
(x) the Note Final Payment Date and (y) the New Note Final Payment Date, the
Diamond Class A Member shall have the right (but shall not be obligated) to
elect to commence the Extension Period by delivering written notice thereof to
Topaz, the Topaz Majority Member, Diamond and the Diamond Class B Member.



                                       51
<PAGE>
                                                           Diamond LLC Agreement


         (b) Allocations; Payments. During the Extension Period (i) Net Income
and Net Losses shall be allocated as set forth in Article IV and (ii) payments
and Distributions shall be made to the Diamond Class A Member solely as set
forth in Sections 5.1(b) and 5.1(c).

         (c) Restrictions on Authority of Managing Member. Notwithstanding any
power or authority granted the Managing Member under the LLC Act, the Diamond
Certificate of Formation or this Diamond LLC Agreement, during the Extension
Period, (i) the Managing Member shall not have the authority to, and covenants
and agrees that it shall not, take any of the following actions without the
consent of all of the Members: (x) cause or permit Diamond, Diamond Holdings,
Aquamarine or Peridot to acquire (by purchase, contribution, exchange or
otherwise) any additional assets, (y) cause or permit Diamond, Diamond Holdings,
Aquamarine or Peridot to incur any additional Permitted Financial Obligations,
or (z) cause or permit Diamond, Diamond Holdings, Aquamarine or Peridot to make
any Dispositions other than (1) Dispositions to provide Cash to be Distributed
to Diamond for the purpose of enabling Diamond to make Distributions under
Section 5.1(b) and (2) Dispositions by Aquamarine of interests in Project
Companies of the type described in clause (A), (B), (E) or (F) of Section
6.3(e), (ii) the Managing Member, on behalf of Diamond as sole member of
Aquamarine, shall cause Aquamarine to Distribute to Diamond all Available Cash
of Aquamarine to the extent permitted to be Distributed in accordance with the
Aquamarine Financing Documents (other than Aquamarine Specified Credit
Documents) and the Transaction Documents and (iii) the Managing Member, on
behalf of Diamond as sole member of Peridot, shall cause Peridot to Distribute
to Diamond all Available Cash of Peridot.

         (d) Expiration of Extension Period. If no Liquidating Event shall have
occurred, then after the Extension Period Termination Date: (i) the Diamond
Class A Member shall have no right or authority to cause Diamond to take any
action and, without limitation of the foregoing, all of the Diamond Class A
Member's rights under Sections 7.4, 11.3 and 11.4 shall be terminated and the
Diamond Class B Member shall, without further action, have all of the rights
given to the Diamond Class A Member under such Sections, (ii) the Diamond Class
B Member shall have the right and authority to cause Diamond to admit one or
more additional Members and/or issue additional membership interests and (iii)
the Diamond Class B Member shall have the right to cause Diamond to retire the
Diamond Class A Member Interest for an amount equal to the Diamond Class A
Member's then current Capital Account balance.

         (e) Repurchase of Diamond Class A Member Interest. If on any date
during the Extension Period (assuming that such date was a Repurchase Date):

                  (i) the sum of (w) the Topaz Minority Member's Capital Account
         in Topaz, (x) the Diamond Class A Member's Capital Account in Diamond,
         (y) the accrued and unpaid Diamond Class A Member's Cumulative Priority
         Return and (z) the accrued and unpaid Diamond Class A Member's
         Cumulative Extension Period Return, would, if paid or Distributed to
         the Topaz Minority Member and the Diamond Class A Member (as
         applicable), result in Investor achieving or exceeding the Target IRR;

                  (ii) the sum of the Topaz Repurchase Price and the Diamond
         Repurchase Price equals the amount described in clause (i); and



                                       52
<PAGE>
                                                           Diamond LLC Agreement


                  (iii) the amount of Available Cash of Diamond together with
         the amount that would be receivable by Diamond from the sale or
         repayment of Diamond Permitted Assets of the type described in clause
         (b), (c), (d) or (e) of the definition thereof held by Diamond, equals
         or exceeds the Diamond Repurchase Price,

then Diamond shall (1) to the extent necessary to produce sufficient Cash to pay
the Diamond Repurchase Price (as defined below), sell or demand repayment of any
Financial Investments held by Diamond and (2) repurchase the Diamond Class A
Member Interest in accordance with the procedures set forth in Sections
11.2(f)(ii) and 11.2(f)(iii) on the Repurchase Date for an amount (the "DIAMOND
REPURCHASE PRICE") equal to the excess of (A) the amount that would, if paid or
Distributed to the Topaz Minority Member and the Diamond Class A Member (as
applicable), result in Investor achieving the Target IRR, over (B) the Topaz
Repurchase Price paid by Topaz in respect of its repurchase of the Topaz
Minority Member Interest in accordance with Section 11.5(e) of the Topaz LLC
Agreement; provided, however, that in no event shall the sum of the Diamond
Repurchase Price and the Topaz Repurchase Price equal an amount that would, if
paid or Distributed to the Topaz Minority Member and the Diamond Class A Member
(as applicable), result in Investor achieving an Internal Rate of Return in
excess of or less than the Target IRR. For all purposes of the Transaction
Documents, for GAAP accounting purposes and for purposes of the LLC Act, on and
after the Repurchase Date, the Diamond Class A Member shall be deemed withdrawn
as, and shall no longer be, a Diamond Class A Member hereunder.

         The Members agree to treat payments in respect of the repurchase
pursuant to this Section 11.5(e) for U.S. federal income tax purposes as made in
liquidation of the Diamond Class A Member Interest as follows:

                  (i) first, as a guaranteed payment described in Section 707(c)
         of the Code to the extent of any accrued and unpaid Diamond Class A
         Member's Cumulative Priority Return and accrued and unpaid Diamond
         Class A Member's Cumulative Extension Period Return, pursuant to
         Section 736(a)(2) of the Code; and

                  (ii) second, the excess (if any), as a Distribution in
         liquidation of the Diamond Class A Member Interest, pursuant to Section
         736(b)(1) of the Code, including the interest of such Member in the
         goodwill of Diamond.

         (f) Repurchase Date; Mark-to-Market. On the Repurchase Date, the Gross
Asset Values of all of Diamond's assets shall be adjusted to equal their
respective Mark-to-Market Values as of the Mark-to-Market Measurement Date and
any Net Income, Gross Income, Net Losses and other items of income, loss, gain,
deduction and credit of Diamond shall be allocated among the Members as of such
Mark-to-Market Measurement Date in accordance with Article IV.



                                       53
<PAGE>
                                                           Diamond LLC Agreement


                                   ARTICLE XII

                           DISSOLUTION AND WINDING UP

         Section 12.1 Liquidating Events. Diamond shall dissolve and commence
winding up and liquidating upon the first to occur of any of the following
(collectively, "LIQUIDATING EVENTS"):

                  (a) Expiration of Term. The tenth anniversary of the Closing
         Date.

                  (b) Liquidation Notice. The date on which, pursuant to Section
         12.10, a Liquidation Notice becomes effective to cause a Liquidating
         Event.

                  (c) Unanimous Vote. The unanimous vote of the Members to
         dissolve, wind up, and liquidate Diamond or Aquamarine.

                  (d) [Reserved].

                  (e) Illegality, etc. The happening of any event that makes it
         unlawful, impossible, or impractical to carry on the business of
         Diamond or the Delaware Court of Chancery has entered a decree pursuant
         to Section 18-802 of the LLC Act, and such decree has become final.

                  (f) Fourth Anniversary of Extension Period Commencement Date.
         The fourth anniversary of the Extension Period Commencement Date shall
         have occurred and there has been no prior Extension Period Termination
         Date.

The Members hereby agree that, notwithstanding any provision of the LLC Act,
Diamond shall not dissolve prior to the occurrence of a Liquidating Event. Upon
the occurrence of any event set forth in Section 12.1(a) (so long as no other
Liquidating Event has occurred), Diamond shall not be dissolved or required to
be wound up if at the time of such event there is at least one remaining Member
and that Member carries on the business of Diamond in accordance with Section
18-801 of the LLC Act (any such remaining Member being hereby authorized to
carry on the business of Diamond). If at such time there is not at least one
remaining Member or the remaining Member does not carry on the business of
Diamond, Diamond shall be liquidated in accordance with this Article XII.

         Section 12.2 Winding Up. Upon the occurrence of a Liquidating Event,
Diamond shall continue solely for the purposes of winding up its affairs in an
orderly manner, liquidating its assets, and satisfying the claims of its
creditors and Members, and no Member shall take any action with respect to
Diamond that is inconsistent with the winding up of Diamond's business and
affairs; provided that all covenants contained in this Diamond LLC Agreement and
obligations provided for in this Diamond LLC Agreement shall continue to be
fully binding upon the Members until such time as Diamond Property has been
distributed pursuant to this Section 12.2 and the Diamond Certificate of
Formation has been canceled pursuant to the LLC Act. The Liquidator shall be
responsible for overseeing the winding up and dissolution of Diamond. On the
occurrence of a Liquidating Event, the Gross Asset Values of all of Diamond's
assets shall be adjusted to equal their respective Mark-to Market Values as of
the Mark-to-



                                       54
<PAGE>
                                                           Diamond LLC Agreement


Market Measurement Date and any Net Income, Gross Income, Net Losses and other
items of income, loss, deduction, gain and credit of Diamond shall be allocated
among the Members as of such Mark-to-Market Measurement Date in accordance with
Article IV. The Liquidator shall take full account of Diamond's liabilities and
the Diamond Property and, except as otherwise provided in Section 12.3, shall,
within 75 days of the occurrence of a Liquidating Event or, in the event that
the certification by the JV Accountants required by Section 8.2(d) has not been
delivered by such 75th day as soon as practicable after delivery of such
accountant's certification but in any event within 90 days of such Liquidating
Event, cause the Diamond Property or the proceeds from the sale or disposition
thereof (as determined pursuant to Section 12.9), to the extent sufficient
therefor, to be applied and distributed, to the maximum extent permitted by
Applicable Law and notwithstanding anything in this Diamond LLC Agreement to the
contrary, in the following order (without duplication):

                  (a) First, to creditors (including to the Diamond Class A
         Member to the extent such Member is a creditor, to the extent otherwise
         permitted by Applicable Law and including with respect to payments of
         accrued and unpaid Diamond Class A Member's Cumulative Priority Return
         and accrued and unpaid Diamond Class A Member's Cumulative Extension
         Period Return), other than the Diamond Class B Member and its
         Affiliates, in satisfaction of all of Diamond's debts and liabilities
         other than liabilities for which reasonable provision for payment has
         been made;

                  (b) Second, to the payment and discharge of all of Diamond's
         debts and liabilities incurred in accordance herewith to the Diamond
         Class B Member and its Affiliates to the extent adequate provision
         therefor has not been made; and

                  (c) Third, the balance to the Members in accordance with their
         respective Capital Accounts, as provided under Article IV, immediately
         after giving effect to the adjustments and allocations required by the
         third sentence of this Section 12.2.

The Managing Member shall not receive any additional compensation for any
services performed pursuant to this Article XII.

         The Diamond Class B Member understands and agrees that by accepting the
provisions of this Section 12.2 setting forth the priority of the distribution
of the assets of Diamond to be made upon its liquidation, it expressly waives
any right that it, as a creditor of Diamond, might otherwise have under the LLC
Act to receive distributions of assets pari passu with the other creditors of
Diamond in connection with a distribution of assets of Diamond in satisfaction
of any liability of Diamond, and hereby subordinates to said creditors any such
right.

         Section 12.3 Restoration of Deficit Capital Accounts; Compliance With
Timing Requirements of Regulations. In the event Diamond is "liquidated" within
the meaning of Regulation Section 1.704-1(b)(2)(ii)(g), (x) Distributions shall
be made pursuant to this Article XII to the Members who have positive Capital
Accounts in compliance with Regulation Section 1.704-1(b)(2)(ii)(b)(2), and (y)
if the Diamond Class B Member's Capital Account has a deficit balance (after
giving effect to all contributions, Distributions, and allocations for all
Allocation Periods, including the Allocation Period during which such
liquidation occurs), the Diamond



                                       55
<PAGE>
                                                           Diamond LLC Agreement


Class B Member shall make a Capital Contribution to Diamond in the amount
necessary to restore such deficit balance to zero in compliance with Regulation
Section 1.704-1(b)(2)(ii)(b)(3).

         In the discretion of the Liquidator, with the consent of the Members, a
portion (determined in the manner provided below) of the distributions that
would otherwise be made to the Members pursuant to this Article XII may be:

                  (a) Distributed to a trust established for the benefit of the
         Members solely for the purposes of liquidating Diamond Property,
         collecting amounts owed to Diamond, and paying any contingent or
         unforeseen liabilities or obligations of Diamond or of the Managing
         Member arising out of or in connection with Diamond. The assets of any
         such trust shall be distributed to the Members from time to time, in
         the reasonable discretion of the Liquidator, in the same proportions as
         the amount distributed to such trust by Diamond would otherwise have
         been distributed to the Members pursuant to Section 12.2; or

                  (b) Withheld to provide a reasonable reserve for liabilities
         (contingent or otherwise) of Diamond and to allow for the collection of
         the unrealized portion of any installment obligations owed to Diamond;
         provided, however, that such withheld amounts shall be distributed to
         the Members as soon as practicable.

The portion of the distributions that would otherwise have been made to each of
the Members that is instead distributed to a trust pursuant to Section 12.3(a)
or withheld to provide a reserve pursuant to Section 12.3(b) shall be determined
in the same manner as the expense or deduction would have been allocated if
Diamond had realized an expense equal to such amounts immediately prior to
distributions being made pursuant to Section 12.2.

         Section 12.4 Deemed Distribution and Recontribution. Notwithstanding
any other provision of this Article XII, in the event Diamond is liquidated
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no
Liquidating Event has occurred, the Diamond Property shall not be liquidated,
Diamond's debts and other liabilities shall not be paid or discharged, and
Diamond's affairs shall not be wound up. Instead, solely for federal income tax
purposes, Diamond shall be deemed to have contributed all of the Diamond
Property and liabilities to a new limited liability company in exchange for an
interest in such new company and, immediately thereafter, Diamond will be deemed
to liquidate by Distributing interests in the new company to the Members.

         Section 12.5 Rights of Members. Each Member shall look solely to the
Diamond Property for the return of its Capital Contribution and, except as
otherwise provided in Section 12.9, shall have no right or power to demand or
receive property other than Cash from Diamond.

         Section 12.6 Notice of Dissolution. The Managing Member shall promptly
provide written notice to each of the Members of the occurrence of any
acceleration of the New Notes as a result of a New Indenture Event of Default,
Note Trigger Event, Specified Equity Event, Shareholder Trigger Event or
Liquidating Event (other than a Liquidating Event of the type described in
Section 12.1(a)) in accordance with Section 6.5(b).



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<PAGE>
                                                           Diamond LLC Agreement


         Section 12.7 Character of Liquidating Distributions. All payments made
in liquidation of the Diamond Interest of a withdrawing Member (whether pursuant
to Article XI or Article XII, but excluding payments pursuant to Section
12.2(a)) shall be made in exchange for the interest of such Member in Diamond
Property pursuant to Code Section 736(b)(1), including the interest of such
Member in goodwill of Diamond.

         Section 12.8 The Liquidator.

         (a) Definition. The "LIQUIDATOR" means (i) in the case of any
Liquidating Event described in clause (a), (c) or (e) of Section 12.1, the
Diamond Class B Member or any other Affiliate of El Paso appointed as Liquidator
by the Diamond Class B Member and (ii) in the case of any other Liquidating
Event, the Diamond Class A Member or any other Person appointed as Liquidator by
the Diamond Class A Member.

         The Diamond Class B Member (or the Diamond Class A Member if it may
then appoint the Liquidator) may appoint an appointee to be Liquidator on or
prior to the date on which a Liquidation Event occurs by delivering written
notice of such appointment to the other Members. Any such appointment may be
subsequently withdrawn by similar written notice.

         The Liquidator shall have the rights set forth in Section 18-803(b) of
the LLC Act and exclusively shall have the rights, power and authority of the
Managing Member necessary or appropriate in its discretion to effect the
dissolution, winding up and liquidation of Diamond. The actions of the
Liquidator shall for all purposes be the actions of Diamond.

         (b) Fees. Diamond is authorized to pay a reasonable fee to the
Liquidator for its services performed pursuant to this Article XII and to
reimburse the Liquidator for its reasonable costs and expenses incurred in
performing those services.

         (c) Resignation of Liquidator. At any time any Liquidator may, in its
discretion, resign as Liquidator and the Diamond Class B Member (or the Diamond
Class A Member if it may then appoint the Liquidator) shall appoint a
replacement Liquidator pursuant to Section 12.8(a).

         Section 12.9 Form of Liquidating Distributions.

         (a) In General. Except as provided in this Section 12.9, for purposes
of making distributions required by Section 12.2, the Liquidator may determine
whether to distribute all or any portion of Diamond Property in-kind or to sell
all or any portion of Diamond Property and distribute the proceeds therefrom,
provided that the Liquidator shall not distribute Diamond Property other than
Cash to the Diamond Class A Member without its consent, and the Liquidator shall
be required to reduce Diamond Property to Cash to the extent necessary to make
distributions to the Diamond Class A Member pursuant to Section 12.2 in Cash.

         (b) Diamond Class A Member In-Kind Election. At the election of the
Diamond Class A Member, the Liquidator may be required to distribute all of the
Diamond Property in-kind. In such event, Diamond Property to be distributed to
each Member shall be determined by the Liquidator; provided that, subject to the
next sentence, distributions of any Diamond Property to the Diamond Class A
Member other than the El Paso Notes or Financial Investments



                                       57
<PAGE>
                                                           Diamond LLC Agreement


shall require the consent of all of the Members. If the liquidation of Diamond
is caused by the Bankruptcy of El Paso, the Diamond Class B Member, the Managing
Member or Diamond, upon the request of the Diamond Class A Member and to the
extent so requested, the Liquidator shall distribute to the Diamond Class A
Member, to the extent practicable, the EPED B/Garnet Notes or Financial
Investments.

         Section 12.10 Liquidation Notice.

         (a) Liquidating Events Prior to Extension Period. Prior to the
Extension Period Commencement Date, the Diamond Class A Member may, at any time
on or after the occurrence of a Note Trigger Event or Specified Equity Event,
deliver to the Managing Member (and, if the Diamond Class B Member is not the
Managing Member, the Diamond Class B Member) a written notice (a "LIQUIDATION
NOTICE") stating that such Note Trigger Event or such Specified Equity Event
constitutes a Liquidating Event; provided, however, that: (i) the delivery of a
Liquidation Notice shall not become effective to cause a Liquidating Event until
(A) the applicable Asset Remedy Standstill Expiration Date or (B) in the case of
a Specified Equity Event, the delivery of such Liquidation Notice; (ii) except
in the case of a Specified Equity Event, the Diamond Class A Member may rescind
such Liquidation Notice by delivering to the Managing Member (and, if the
Diamond Class B Member is not the Managing Member, the Diamond Class B Member) a
rescission notice prior to the applicable Asset Remedy Standstill Expiration
Date; and (iii) except in the case of a Specified Equity Event, if both (x) an
Irrevocable Election has been made by the Diamond Class B Member and a Purchase
Option Notice or Retirement Notice has been delivered pursuant to this Diamond
LLC Agreement on or prior to the applicable Asset Remedy Standstill Expiration
Date and (y) an Irrevocable Election has been made by the Topaz Majority Member
and a Purchase Option Notice or Retirement Notice has been delivered pursuant to
the Topaz LLC Agreement on or prior to the applicable Asset Remedy Standstill
Expiration Date, then no Liquidation Notice shall become effective to cause a
Liquidating Event until the day after the Purchase Date or Retirement Date, as
the case may be, specified in such notices (and then if, but only if, each of
the Topaz Minority Member Interest and the Diamond Class A Member Interest shall
not have been either purchased or retired).

         (b) Liquidating Events During Extension Period. The Diamond Class A
Member may, on any date during the Extension Period, elect to cause a
Liquidating Event by delivering to the Managing Member (and, if the Diamond
Class B Member is not the Managing Member, the Diamond Class B Member) a
Liquidation Notice; provided, however, that: (i) the delivery of such
Liquidation Notice shall not become effective to cause a Liquidating Event until
the 10th Business Day following delivery of such Liquidation Notice; (ii) the
Diamond Class A Member may rescind such Liquidation Notice by delivering to the
Managing Member (and, if the Diamond Class B Member is not the Managing Member,
the Diamond Class B Member) a rescission notice prior to such 10th Business Day;
and (iii) if both (x) an Irrevocable Election has been made by the Diamond Class
B Member and a Purchase Option Notice or Retirement Notice has been delivered
pursuant to this Diamond LLC Agreement on or prior to such 10th Business Day and
(y) an Irrevocable Election has been made by the Topaz Majority Member and a
Purchase Option Notice or Retirement Notice has been delivered pursuant to the
Topaz LLC Agreement on or prior to such 10th Business Day, no Liquidation Notice
shall become effective to cause a Liquidating Event until the day after the
Purchase Date or Retirement Date, as the case

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<PAGE>
                                                           Diamond LLC Agreement


may be, specified in such notices (and then if, but only if, each of the Topaz
Minority Member Interest and the Diamond Class A Member Interest shall not have
been either purchased or retired).

                                  ARTICLE XIII

                                  MISCELLANEOUS

         Section 13.1 Amendments. No amendment or waiver of any provision of
this Diamond LLC Agreement, and no consent to any departure by any party
herefrom, shall in any event be effective unless the same shall be in writing
and signed by all Members in accordance with Section 9.1. No such waiver of a
provision or consent to a departure in any one instance shall be construed as a
further or continuing waiver of or consent to subsequent occurrences, or a
waiver of any other provision or consent to any other departure.

         Section 13.2 Notices. Any notice, payment, demand, or communication
required or permitted to be given by any provision of this Diamond LLC Agreement
shall be in writing or by facsimile and shall be deemed to have been delivered,
given, and received for all purposes (a) if delivered personally to the Person
or to an officer of the Person to whom the same is directed or (b) when the same
is actually received (if during the recipient's normal business hours if during
a Business Day, or, if not, on the next succeeding Business Day), if sent by
facsimile (followed by a hard copy of the facsimilied communication sent by
regular mail, postage and charges prepaid), or by courier or delivery service or
by mail, addressed, if to any Member or the Managing Member, to such person at
its address or facsimile number set forth on Schedule 13.2 hereto or to such
other address as such Person may from time to time specify by notice, and if to
any other Person, at its address specified in the Transaction Document pursuant
to which such Person is to receive notice or by notice given in the manner
provided herein to each other Person entitled to receive notice hereunder, or,
in each case, to such other address (and with copies to such other Persons) as
the Person entitled to receive notice hereunder shall specify by notice given in
the manner provided herein to the other Persons entitled to receive notice under
the relevant Transaction Document.

         Section 13.3 No Waiver; Cumulative Remedies. No failure on the part of
any Person to exercise, and no delay in exercising, any right under this Diamond
LLC Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Diamond LLC Agreement preclude any other or
further exercise thereof or the exercise of any other right. The remedies
provided in this Diamond LLC Agreement are cumulative and not exclusive of any
remedies provided by Applicable Law.

         Section 13.4 Waiver of Jury Trial. EACH PARTY TO THIS DIAMOND LLC
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS DIAMOND LLC AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.



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<PAGE>
                                                           Diamond LLC Agreement



         Section 13.5 Counterparts. This Diamond LLC Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
This Diamond LLC Agreement may be delivered by facsimile transmission of the
relevant signature pages thereof.

         Section 13.6 Survival of Representations, Warranties and Indemnities:
Entire Agreement. All representations, warranties and indemnities and
undertakings to pay costs and expenses contained in this Diamond LLC Agreement
or made by or on behalf of the parties hereto, as the case may be, in connection
with this Diamond LLC Agreement shall survive (a) the execution and delivery of
this Diamond LLC Agreement and the other Transaction Documents, (b) performance
by each party of its Obligations under this Diamond LLC Agreement and each other
Transaction Document to which it is a party and (c) the Disposition (whether or
not such Disposition was a Permitted Transfer) by (i) Garnet of all or a portion
of its Diamond Class B Member Interest in Diamond or any termination of its
status as a Diamond Class B Member of Diamond pursuant to this Diamond LLC
Agreement or (ii) any other Member of all or a portion of its Diamond Interest
or any termination of such Person's status as a Member of Diamond, and may be
relied upon by the Persons permitted thereunder, regardless of any investigation
made at any time by or on behalf of such Persons or any such assignee.

         Section 13.7 Severability. If any term, provision, covenant or
condition of this Diamond LLC Agreement, or the application thereof to any party
hereto or any circumstance, is held to be unenforceable, invalid or illegal (in
whole or in part) for any reason (in any relevant jurisdiction), the remaining
terms, provisions, covenants and conditions of this Diamond LLC Agreement,
modified by the deletion of the unenforceable, invalid or illegal portion (in
any relevant jurisdiction), will continue in full force and effect, and such
unenforceability, invalidity or illegality will not otherwise affect the
enforceability, validity or legality of the remaining terms. provisions,
covenants or conditions of this Diamond LLC Agreement so long as this Diamond
LLC Agreement as so modified continues to express, without material change, the
original intentions of the parties hereto as to the subject matter hereof and
the deletion of such portion of this Diamond LLC Agreement will not
substantially impair the respective expectations or reciprocal obligations of
the parties hereto or the practical realization of the benefits that would
otherwise be conferred upon such parties. If any provision hereof is held to be
unenforceable, invalid or illegal as stated above, the parties hereto will
endeavor in good faith negotiations to replace such provision with a valid
provision, the economic effect of which comes as close as possible to that of
the prohibited unenforceable provision.

         Section 13.8 Construction. Every covenant, term, and provision of each
Transaction Document shall be construed simply according to its fair meaning and
not strictly for or against any party thereto.

         Section 13.9 [Reserved].

         Section 13.10 Governing Law. THE LAWS OF THE STATE OF DELAWARE (WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES) SHALL GOVERN THE VALIDITY OF THIS DIAMOND
LLC AGREEMENT, THE CONSTRUCTION OF ITS



                                       60
<PAGE>


                                                           Diamond LLC Agreement

TERMS, AND THE INTERPRETATION OF THE RIGHTS AND DUTIES OF THE MEMBERS.

         Section 13.11 Waiver of Action for Partition. Each of the Members
irrevocably waives any right that it may have to maintain any action for
partition with respect to any of the Diamond Property.

         Section 13.12 Consent to Jurisdiction. Each Member (i) irrevocably
submits to the jurisdiction of any Delaware State court or federal court sitting
in Wilmington, Delaware and of any New York State court or Federal court sitting
in the Borough of Manhattan in any action arising out of this Diamond LLC
Agreement, (ii) agrees that all claims in such action may be decided in such
court, (iii) waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum and (iv) consents to the service of process by mail. A
final judgment in any such action shall be conclusive and may be enforced in
other jurisdictions. Nothing herein shall affect the right of any party to serve
legal process in any manner permitted by law or affect its right to bring any
action in any other court.

         Section 13.13 Specific Performance. Each Member agrees with the other
Members that the other Members would be irreparably damaged if any of the
provisions of this Diamond LLC Agreement are not performed in accordance with
their specific terms and that monetary damages would not provide an adequate
remedy in such event. Accordingly, it is agreed that, in addition to any other
remedy to which the nonbreaching Members may be entitled, at law or in equity,
the nonbreaching Members shall be entitled to injunctive relief to prevent
breaches of the provisions of this Diamond LLC Agreement and specifically to
enforce the terms and provisions of this Diamond LLC Agreement in any action
instituted in any court of the United States or any state thereof having subject
matter jurisdiction thereof.

         Section 13.14 [Reserved].

         Section 13.15 Consent to Collateral Assignment by Diamond Class A
Member; Rights of Action.

         (a) Pursuant to the terms of the Indenture, the Diamond Class A Member
has granted a first priority security interest in substantially all of its
assets (including, without limitation, all of the rights of the Diamond Class A
Member under (i) the Diamond Class A Member Interest and (ii) this Diamond LLC
Agreement, but excluding the Excepted Rights) to the Indenture Trustee for the
benefit of the holders from time to time of the Notes. Each of Diamond and the
Diamond Class B Member hereby acknowledges and consents, for the benefit of the
Diamond Class A Member and the Indenture Trustee, on behalf of the holders of
the Notes, to such grant by the Diamond Class A Member to the Indenture Trustee
(or to any subsequent transferee following foreclosure on such security
interest) and agrees that the Indenture Trustee, on behalf of the holders of the
Notes (or any subsequent transferee following foreclosure on such security
interest), shall, on or after a Note Trigger Event have the right to pursue any
remedy available to the Diamond Class A Member under this Diamond LLC Agreement,
the other Transaction Documents or in law to secure the performance by Diamond,
the Diamond Class B Member or any other Person of its obligations hereunder or
thereunder.



                                       61
<PAGE>
                                                           Diamond LLC Agreement


         (b) The parties hereto further acknowledge the rights of action of the
New Indenture Trustee to enforce, and institute and maintain any suit, action or
proceeding against the Investor to enforce, or otherwise act in respect of, the
rights of the New Noteholders under the New Indenture and to maintain any
proceeding against the assets of the Investor to enforce, or levy on, any
judgment resulting therefrom, subject to Section 2.05(f) of the New Indenture.

         Section 13.16 Effectiveness. This Diamond LLC Agreement shall take
effect as of the Effective Date.



                                       62
<PAGE>



                  IN WITNESS WHEREOF, the undersigned have executed this Diamond
LLC Agreement as of the date above first written.

                                        DIAMOND CLASS A MEMBER:
                                        ----------------------

                                        GEMSTONE INVESTOR LIMITED


                                        By:      /s/ J.S. Klep
                                           -------------------------------------
                                          Name:  J.S. Klep
                                          Title: Director


                                        DIAMOND CLASS B MEMBER:
                                        ----------------------

                                        GARNET POWER HOLDINGS, L.L.C.

                                         By: EPED B Company, its Managing Member



                                        By:  /s/ Antonio Carlos C. Balthazar
                                           -------------------------------------
                                          Name:  Antonio Carlos C. Balthazar
                                          Title: Authorized Signatory



<PAGE>
                                                           Diamond LLC Agreement

ACKNOWLEDGED AND AGREED:


GARNET POWER HOLDINGS, L.L.C., as Managing Member:

         By: EPED B Company, its Managing Member




         By: /s/ Antonio Carlos C. Balthazar
             -----------------------------------------
             Name:  Antonio Carlos C. Balthazar
                    Title: Authorized Signatory



ACKNOWLEDGED AND AGREED:

DIAMOND POWER VENTURES, L.L.C.

         By: GARNET POWER HOLDINGS, L.L.C., its Managing Member

             By: EPED B Company, its Managing Member


         By:  /s/ Antonio Carlos C. Balthazar
            ----------------------------------
            Name:  Antonio Carlos C. Balthazar
            Title: Authorized Signatory


                                       2