Xellos says, "Friend of yours, Frandal?" as he eyes the girl suspiciously.

To Frandal Silvereyes:

The half-elven girl continues to turn toward you, and as she does you can see that her lips are moving. You can also hear her voice. It is faint, but you recognize her words for what they are. She's uttering some sort of spell.

 To Xellos:

You can see that the elf has successfully interrupted the girl's thieving attempt, and she is now focusing her full attention on him. She seems to be saying something, but what it is you cannot tell. You realize that she is wholly unaware of the spectral hand you've created and, therefore, your attempt to nab the coin purse seemingly has a chance of success. 

Quote from Law_less >>

Kurt heads back to the Inn, While he smiles and greets everyone he passes, he also does not stop and celebrate. Kurt walks to the inn and sleeps.

Arissa heads back to the Donnybrook with the halflings, although her heart is not into it.

"Garrett, your last knife throw was quite amazing! I am not nearly so good as you, although I did have a bit of luck."

To futuristic_kf, AmazingAmazon, and Steedling: 

You make your way northward along with many others. You overhear pieces of conversation on a variety of subjects: the tournament, the weather, the plays that were presented at Festival Square, the music, the food, and the dancing, just to name a few. Sprinkled in among all of this talk you also hear people expressing their feelings about the fact that, thus far, Sariel Sunshimmer is the only Windhover that has made an appearance at the festival. Some people are disappointed; others seem troubled, especially by Thoradin's absence. "Isn't it tradition for the cleric to offer the opening blessing?" you hear someone ask. "And where's Ro Venna? And Bharash?" asks someone else. A cheerful voice responds, "Ah, think nothing of it. They're busy...have important responsibilities. They'll be here tomorrow I wager!"

A good distance ahead of you is Kurt; he seems determined to make his way straight to the inn, without allowing anything to distract him on the way. 

Garrett thanks Arissa for the complement but is quick to point out that she is the one, so far, who has earned some gold; whereas he has not. 

Huck and Mithro walk only a short distance with all of you before saying their farewells. They have some other places they want to see in Talisten. "Alora and Arissa, we've asked Ozum to join us in south Talisten later tonight at Flannervy's. You're welcome to join us as well."  They then quickly disappear into the crowd.

Her incantation seemingly has no effect upon you, Frandal. You see the disgust on her face as she realizes her failure. Simultaneously, you notice something very strange indeed: a floating, spectral hand is closing its grasp on the coin purse, which is being held in the girl's hand. You're confident that she is unaware of this "hand."

“Please try to relax.” He says “We are not going to hurt you, neither call the guards if you don’t force us to do it. Why are you doing this?” He continues “You don’t look like a homeless cultrip to me. And versed in the arcane ways! I am impressed!” 

To Frandal: 

As she begins to speak, the coin purse is snatched away from her; she immediately looks at her empty hand, trying to decipher what just took place. She looks behind her but sees nothing, and then she looks at you and begins to speak. "I do this because I'm good at it. Simple as that! During the festival I can collect enough gold to keep me comfortable for several months.There now. I've answered your questions. Let's call things even, shall we? You go your way, and I'll go mine." She then turns her head this way and that; for she's still trying to figure out how she lost the coin purse. 

To Xellos: 

Your attempt to retrieve the stolen coins is successful, and you can see the bewilderment in the girl's face as she tries to determine what just happened. She then begins to speak to the elf. As you approach the two of them, you hear her say to Frandal, "You go your way, and I'll go mine."

The elf looks at her for a few moments and let her hand go. 

“You are not as good as you think” he handles her 10 gp “I hope that this stops it at least during the festival. You are going to end in jail. Try to find an honest job, your abilities could help this city. Try to start small. Perhaps we can talk more and find something suitable for you. Look for me once the tournament ends tomorrow. But no more pickpocketing or I will send you to jail myself.

With that he let her be, checking that he still has his coin purse, and ask Xellos, 

“Let’s go give that money to his rightful owner and enjoy our drinks, shall we?”

Alora returned to the Donnybrooke to freshen up and eat a meal content to join the others for a drink with Huck and Mithro.

Alora would also like to talk to someone about news from abroad along with the lines of 'anything we should be worried about keeping the heroes of the festival away' kind of thing.

Xellos waves his hand over his face to give the appearance that his eyes are glowing balls of fire.

 He steps forward, unveils his cloak to show his Tiefling face and his firey eyes while showing HE has the coin purse and says to the girl, "We are forgiving, but NEVER attempt stealing again. I won't be so nice next time. My friend gave you a gift: your freedom and HIS money; and I am giving you your life. I hope you make the most of it through legitimate means, or you will deal with me if I hear of it. Do not disappoint me."

Intimidation 19

Xellos' eyes and demeanor revert back to normal and he covers his head with his cloak, but still gives her a scowl. He gives a nod in agreement to Frandal the says to the girl one more thing, "Before you go, tell me your name."

She shrinks back, partially hiding her face with her free hand. She refuses to look into your eyes as she stammers, "My name....my name is Yula."  She backs up as far as she can; as she does so, she says one last thing. "No, I won't disappoint you."

Xellos calmly says, "Good. Yula, go make the most of your life without taking what doesn't belong to you. You seem talented in other ways. It's more rewarding that way. Perhaps one day we can look back on this incident as friends. See you around."

 Spoiler for Frandal

Before Yula leaves, he would wonder who she really is and if she's a mage, arcane trickster, etc. Basically Xellos doubts she is a common purse snatcher and would like to know more.

Perception 4 correction, this should be 15

Insight 13

You reflect on all that the girl has said and done since the moment Frandal brought her to your attention. Your best guess is she's a halfway decent thief who augments her craft with a few cantrips. You are by no means certain of this, however. 

AmazingAmazon, futuristic_kf, and Steedling: 

The Donnybrook was crowded yesterday evening. Today it's even more so. As you enter the inn, Garrett explains that he'll be heading up to his room to take care of a few matters but will make an effort to join up with all of you later. There's no place to sit near the entrance of the inn, but as you make your way toward the back, you spy some open seats in the corner. A middle-aged male human with long brown hair covering his shoulders sits alone at the table next to you. The fact that there is one bottle of wine and two glasses on the table in front of him indicates that he might be waiting for someone to join him soon. You can't help but notice that he is meticulously groomed and wears very well-made clothes. He gives a gentle nod to acknowledge your presence but says nothing. He sips his wine slowly and thoughtfully. Within a few minutes you're able to put in your order for food and drink. 

Ozum will push through the throng of people in the Donnybrook to find Pom and make sure he and his companions still have rooms for the night. When the order for drinks comes around Ozum will insist on getting the first round. With a wry smile the gnome looks at Alora and Arissa and say, "I've got this one, but one of you champions will have the next at Flannervy's. Speaking of which, does anyone know how to get there?" He turns around in his chair to face the lone man. "Excuse me sir, would you happen to know the way to Flannervy's Tavern?"

“It’s ok Xellos “ says Frandal looking Yula dissapearing in the streets “I just hope that your impressive display doesn’t stop her for visiting me. I would like to help her. “

He then walks towards the old man and tap on his shoulder. 

“Excuse me sir. Excuse me. I think that you just dropped this... my friend here found it on the ground behind you. “ he says giving to him the purse “ Be careful please. “ he finish with a kind smile to the old man. 

Once he walks away he says to Xellos. 

“Let’s go and take a couple of drinks at the Singing Fire. I am worried.” He says as they continue walking towards it “ People seems to be kind of alarmed that this Windhover cleric, Thoradin, didn’t show up today, and he was expected yesterday at the inn and he didn’t show up... could be nothing but... if something is keeping the Windhover’s occupied during the festivities... “ 

Xellos says, "I think we'll see her again, hopefully she will have a more honest approach to living by then. As for this Thoradin fellow, perhaps someone might know more at the tavern? More people from the tournament will surely be there. We should head there anyway, it's getting late and it's been a long day."