EXECUTION COPY











                              AMENDED AND RESTATED
                                MASTER AGREEMENT

                                  by and among

                                GRIDAMERICA LLC,

                            GRIDAMERICA HOLDINGS INC.

                              GRIDAMERICA COMPANIES

                                       and

                                NATIONAL GRID USA




                                February 14, 2003




<PAGE>

                                TABLE OF CONTENTS


                                    ARTICLE I
                                   DEFINITIONS

Section 1.1   Definitions .....................................................2
Section 1.2   Rules of Construction...........................................13

                                   ARTICLE II
       CREATION OF GRIDAMERICA ITC, MANAGING MEMBER; TRANSMISSION SERVICE
                                      DATE

Section 2.1   Creation of Grid America ITC....................................14
Section 2.2   The Intial Member; Term and Removal.............................17

                                   ARTICLE III
                      PURCHASE OF UNITS BY NGUSA AFFILIATES

Section 3.1   Initial Purchase of Units and Purchase of Units to Fund
                Capital Expenditures and Working Capital Needs................20
Section 3.2   Purchase of Units by Affiliated Investors Upon Contributions
                of GridAmerica Transmission Facilities........................21
Section 3.3   Additional Limitations on Commitment............................22
Section 3.4   Failure to Achieve Transmission Service Date....................22

                                   ARTICLE IV
                                   EXCLUSIVITY

Section 4.1   Exclusivity Period..............................................23

                                    ARTICLE V
                         PUT OF TRANSMISSION FACILITIES

Section 5.1   Put Right in Favor of GridAmerica Companies.....................24
Section 5.2   Put Rights of NGUSA Affiliates..................................26
Section 5.3   Put Closing.....................................................27
Section 5.4   Put Units Unregistered..........................................27
Section 5.5   Put Rights Transferable.........................................27
Section 5.6   Publicly Traded Partnership.....................................28
Section 5.7   Certain Resignation and Withdrawal Rights.......................28

                                   ARTICLE VI
                               REGISTRATION RIGHTS

Section 6.1   Demand Registration Rights......................................29
Section 6.2   Incidental Registration.........................................31
Section 6.3   Cutback; Withdrawal Rights......................................32
Section 6.4   Blockage Periods................................................33
Section 6.5   Restrictions on Public Sale.....................................33
Section 6.6   Registration Procedures.........................................33

                                       i

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Section 6.7   Registration Expenses...........................................38
Section 6.8   Indemnification.................................................38
Section 6.9   Preparation; Reasonable Investigation...........................41
Section 6.10  Rule 144 and Rule 144A..........................................42
Section 6.11  Other Registration Rights Agreements............................42
Section 6.12  Specific Performance for Registration Rights....................42
Section 6.13  Exchange of Units for Shares....................................42

                                   ARTICLE VII
                                FAIR MARKET VALUE

Section 7.1   Fair Market Value...............................................43
Section 7.2   General Principles of Application...............................44
Section 7.3   General Principles of Application...............................45

                                  ARTICLE VIII
                             ADMISSION REQUIREMENTS

Section 8.1   Admission Requirements..........................................45

                                   ARTICLE IX
                         REPRESENTATIONS AND WARRANTIES

Section 9.1   Representations and Warranties Concerning the Company...........45
Section 9.2   Representations and Warranties Concerning the Initial Member....47
Section 9.3   Representations and Warranties of GridAmerica Companies.........48
Section 9.4   Representations and Warranties of NGUSA.........................49

                                    ARTICLE X
                                    COVENANTS

Section 10.1  NGUSA Covenants.................................................50
Section 10.2  GridAmerica Company Covenants...................................52
Section 10.3  Rights of Transmission Owners Under the Operation Agreement.....52
Section 10.4  Party Covenants.................................................52

                                   ARTICLE XI
                     TERMINATION, CERTAIN WITHDRAWAL RIGHTS

Section 11.1  Termination of Agreement; Effect of Termination.................53

                                   ARTICLE XII
                               DISPUTE RESOLUTION

Section 12.1  Negotiations....................................................53
Section 12.2  Arbitration.....................................................53
Section 12.3  Arbitration of Certain Claims Regarding Removal of Managing
                Member........................................................57

                                       ii

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                                  ARTICLE XIII
                                  MISCELLANEOUS

Section 13.1  Notices.........................................................59
Section 13.2  Entire Agreement; Amendments....................................59
Section 13.3  Effect of Waiver................................................59
Section 13.4  Not for the Benefit of Third Parties; No Partnership............59
Section 13.5  No Assignment; Binding Effect...................................60
Section 13.6  Severability....................................................60
Section 13.7  Governing Law; Waiver of Jury Trial.............................60
Section 13.8  Counterparts....................................................60
Section 13.9  Confidentiality.................................................62
Section 13.10 Attorneys' Fees.................................................62
Section 13.11 Time is of Essence..............................................62
Section 13.12 Further Assistances.............................................62
Section 13.13 Late Payments...................................................62
Section 13.14 Remedies........................................................62


SCHEDULES

A        Certain Excluded Employees
B        Addresses for Notices



                                      iii

<PAGE>


                      AMENDED AND RESTATED MASTER AGREEMENT

     THIS AMENDED AND RESTATED  MASTER  AGREEMENT is made and entered into as of
February 14, 2002, by and among  GridAmerica LLC, a Delaware  limited  liability
company (the "Company"),  GridAmerica Holdings Inc., a Delaware corporation (the
"Initial  Member"),  the  Persons  signing  this  Agreement  as the  GridAmerica
Companies (the "Original  GridAmerica  Companies")  and any other Person who may
become a party hereto as a  GridAmerica  Company  pursuant to Section 8.1 hereof
(collectively,   with  the  Original  GridAmerica  Companies,  the  "GridAmerica
Companies") and National Grid USA ("NGUSA").

                                    RECITALS

     The United States Federal Energy Regulatory  Commission  (together with any
successor  agency,  the "Commission") in Order No. 2000 called for the formation
of  regional  transmission  organizations  to  promote  the  creation  of  large
electricity  markets  and  to  provide  reliable,   cost-efficient  services  to
customers;

     The Midwest  Transmission  System  Operator,  Inc. (the "Midwest ISO") is a
Commission approved regional transmission organization.

     On April 25, 2002, the Commission issued an order in Docket No. EL02-65 (99
FERC P. 61,105 (2002)) encouraging the formation of an independent  transmission
company ("ITC") within the Midwest ISO.

     The Midwest ISO has an open architecture that accommodates various forms of
ITC in its operation.

     The  GridAmerica  Companies  wish to comply with Order No. 2000 through the
formation of an ITC within the Midwest ISO.

     NGUSA is  involved in the  ownership  and  operation  of  transmission  and
distribution  properties and seeks to further its overall  business  strategy by
acquiring,  owning and operating transmission and distribution  properties,  and
divesting or otherwise disposing of electric generation businesses and assets or
obligations relating thereto.

     On October 31,  2002,  (i) the  Original  GridAmerica  Companies  and NGUSA
entered  into a Master  Agreement  dated as of October 31,  2002 (the  "Original
Master  Agreement"),  (ii) the  predecessor to the Initial  Member,  GridAmerica
Holdings  LLC,  entered  into the Limited  Liability  Company  Agreement  of the
Company dated as of October 31, 2002 (the "Original LLC  Agreement"),  (iii) the
Company and the Original GridAmerica Companies,  or their applicable affiliates,
entered into the Operation Agreement dated as of October 31, 2002 (the "Original
Operation  Agreement") and (iv) the Company and the Midwest ISO entered into the
Appendix I ITC Agreement  dated as of October 31, 2002 (the  "Original  MISO ITC
Agreement") for a transaction that involves: (x) the formation of the Company as
a for-profit  ITC under the Midwest ISO and thereby to achieve  compliance  with
Order No. 2000 and (y) NGUSA,  through one or more of its affiliates,  making an
investment in and,  through the Initial  Member,  serving as managing member of,
the Company (collectively, the "Original Transaction");

<PAGE>

     On  December  19,  2002,  the  Commission  issued an order in  Docket  Nos.
ER02-2233-001  and EC03-14-000  (101 FERC P. 61,320 (2002)) (the "FERC Approving
Order")  conditionally  accepting for filing,  suspending  and making  effective
subject to future refund,  future filings and further orders the Original Master
Agreement,  the Original LLC Agreement, the Original Operation Agreement and the
Original MISO ITC Agreement.

     The GridAmerica  Companies,  NGUSA,  the Initial Member and the Company now
desire to enter into this  Agreement  in order to set out  certain  terms of the
transaction  as  modified  in  compliance  with the FERC  Approving  Order  (the
Original Transaction as so modified is herein referred to as the "Transaction").

     NOW, THEREFORE, in consideration of the mutual covenants,  representations,
warranties,  and agreements contained in this Agreement,  and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged,  the Parties hereby agree to amend and restate the Original Master
Agreement in its entirety as follows:

                                    ARTICLE I

                                   DEFINITIONS

     Section 1.1  Definitions.  The  following  terms shall have the  respective
meanings set forth below when used in this Agreement (and grammatical variations
of such terms  shall have  correlative  meanings),  unless  otherwise  expressly
specified herein to the contrary:

     "AAA" shall have the meaning given in Section 12.2(a).

     "Additional  Arbitration  Request"  shall have the meaning given in Section
12.2(i).

     "Additional Claim" shall have the meaning given in Section 12.2(i).

     "Affiliate"  shall  mean,  with  respect to any  Person,  any other  Person
directly or indirectly  Controlling,  Controlled by or under common Control with
such Person.  As used in this  definition,  "Control" shall mean the possession,
directly or  indirectly,  of the power to direct or cause the  direction  of the
management or policies of a Person (whether  through  ownership of securities or
partnership or other ownership interests,  by contract or otherwise);  provided,
however,  that,  in any  event,  any Person  that owns  directly  or  indirectly
securities  having at least a majority of the voting  power for the  election of
directors or other members of the governing  body of a corporation or at least a
majority of the  partnership  or other  ownership  interests  (that carry voting
power) of any other Person will be deemed to Control such  corporation  or other
Person.

     "Affiliated  Investor" shall mean (i) NGUSA or any NGUSA Affiliate and (ii)
any Person in which NGUSA or any NGUSA Affiliate  directly or indirectly owns at
least a majority of the total equity value of such Person.

                                       2

<PAGE>

     "Agreed Accounting Firm" shall mean  PricewaterhouseCoopers  LLP or another
accounting firm mutually  acceptable to NGUSA and the Company that is nationally
recognized in the United States.

     "Agreement"  shall mean this Amended and Restated Master Agreement dated as
of February 14, 2003, as it may be amended,  modified or otherwise  supplemented
and in effect from time to time.

     "Approval  Order" shall mean one or more Final  Orders that,  collectively,
approve the Transaction Agreements as to which the approval of the Commission is
required under applicable Law, without modification or condition, other than any
such modifications and conditions as would not, in the aggregate,  cause a Party
to fail to realize any material  benefit  which it reasonably  anticipates  from
participation in the transactions contemplated by the Transaction Agreements.

     "Approved  Underwriter"  shall have the  meaning  given in Section  6.1 (h)

     "Approved Uses" shall have the meaning given in Section 13.9(a)(2).

     "Arbitration" shall have the meaning given in Section 12.2.

     "Arbitration Notice" shall have the meaning given in Section 12.2(b).

     "Arbitration Rules" shall have the meaning given in Section 12.2(a).

     "Business Day" shall mean any day other than Saturday,  Sunday or other day
on which banks are authorized or required to be closed in New York, New York.

     "Capital Account" shall have the meaning given in the LLC Agreement.

     "Capital  Expenditures"  shall mean any  expenditures  for fixed or capital
assets  that  would  be  classified,  in  accordance  with  GAAP,  as a  capital
expenditure.

     "Cash Option" shall have the meaning given in Section 3.2(a)(3).

     "Cause" shall have the meaning given in the LLC Agreement.

     "Claimant Party" shall have the meaning given in Section 12.2(b).

     "Claims" shall have the meaning given in Section 12.2(a).

     "Class  A Stock"  and  "Class B Stock"  shall  have the  meanings  given in
Section 6.13(a).

     "Class A Units" and "Class B Units"  shall have the  meanings  given in the
LLC Agreement.

     "Clear Notification" shall have the meaning given in Section 6.4.

                                       3

<PAGE>

     "Commission" shall have the meaning given in the recitals hereof.

     "Company" shall have the meaning given in the preamble hereof.

     "Company's  Notification  of  Readiness"  shall have the  meaning  given in
Section 2.1(d).

     "Confidential   Information"   means  all   confidential  or  trade  secret
information  of a  Disclosing  Party  provided to a Recipient  pursuant to or in
connection  with any  Transaction  Agreement,  including  business  information;
strategies,  methods, technical information,  pricing techniques and strategies;
customer information;  investor information;  price curves; positions, plans and
strategies for expansion or acquisitions,  budgets,  customer lists,  studies of
information  and  data,  electronic  databases,   computer  programs,   bids  or
proposals,  organizational structure,  compensation of personnel and new product
information;  provided,  however,  "Confidential  Information" shall not include
information   that  (i)  was  already   known  by  (as   established   by  dated
documentation)  a Recipient  at the time of the receipt of such  information  by
such Recipient from the Disclosing  Party,  (ii) is in, or subsequently  enters,
the public  domain  other than as a result of a disclosure  by the  Recipient in
breach of an obligation of confidence, (iii) is received by the Recipient from a
third   party  if  such  third  party  was  not  known  to  be  subject  to  any
confidentiality  obligation, (iv) is independently developed by a Person without
access to the Confidential Information provided by the Disclosing Party, (v) was
or is  furnished  by a  Disclosing  Party  to  another  Person  without  written
confidentiality  restrictions,  or (vi)  is  approved  for  release  by  written
authorization of the Disclosing Party.

     "Consent" shall mean any authorization,  consent, opinion, order, approval,
license,  franchise,  ruling,  permit, tariff, rate,  certification,  exemption,
filing or registration from, by, or with any Governmental Authority,  any Person
or any governing body of any Person.

     "Contributed  Transmission  Facilities"  shall  have the  meaning  given in
Section 5.1(a).

     "Damages" shall have the meaning given in Section 6.8(a).

     "Demand  Registration" shall mean an IPO Demand Registration or a Secondary
Demand Registration.

     "Disclosing Party" shall have the meaning given in Section 13.9.

     "Dispute Parties" shall have the meaning given in Section 12.2(b).

     "Distribution Rights" shall have the meaning given in Section 2.2(e).

     "Effective Date" shall mean October 31, 2002.

     "Encumbrance"  shall  mean (i) with  respect  to any Units or  Shares,  any
security  interest,  lien, pledge,  mortgage or other encumbrance,  whether such
encumbrance arises voluntarily, involuntarily or by operation of Law, other than
restrictions on the sale or transfer  thereof arising out of any Securities Laws
or the  Transaction  Agreements  and (ii) with respect to

                                       4

<PAGE>

any other asset, any security  interest,  lien,  pledge or mortgage or any other
material encumbrance, whether such encumbrance arises voluntarily, involuntarily
or by operation of Law.

     "Entity" shall mean a corporation,  limited liability company, partnership,
limited partnership,  trust, firm, association or other organization which has a
legal  existence  under  the  Laws of its  jurisdiction  of  formation  which is
separate and apart from its owner or owners and any Governmental Authority.

     "Equity  Contribution  Agreement"  shall have the meaning  given in Section
10.1(h).

     "Equity  Interests"  shall mean,  with  respect to any Person,  all capital
stock, membership interests, general or limited partnership interests or similar
interests in the equity of such Person.

     "Excess Cash Amount" shall mean the sum of (i) the amount, if any, by which
the  aggregate  amount  of cash  paid or  delivered  to the  First  Divestor  in
connection  with  the  First  Divestor  Divestiture  exceeds  20% of  the  total
consideration  paid or delivered to the First  Divestor in  connection  with the
First Divestor  Divestiture plus (ii) the amount of aggregate purchases of Units
by an Affiliated  Investor  pursuant to Section 3.2,  prior to the date which is
eighteen  months after the  Transmission  Service Date,  in connection  with the
exercise  of a Put  Right  by a  GridAmerica  Company  that  is not an  Original
GridAmerica  Company  plus  (iii) the  amount,  if any,  by which the  aggregate
purchases  of Units by an  Affiliated  Investor  pursuant to Section 3.2, on and
after the date which is eighteen months after the Transmission  Service Date, in
connection with the exercise of a Put Right by a GridAmerica Company that is not
an Original GridAmerica Company exceeds $150,000,000.

     "Exchange Act" shall mean the  Securities  Exchange Act of 1934, as amended
from time to time, and the rules and regulations promulgated thereunder.

     "Excluded  Employees" shall mean (i) each of the individuals  identified on
Schedule A hereto and any other  individual  (A) who was an employee of NGUSA or
any NGUSA Affiliate (other than the Initial Member,  the Company or any of their
respective  subsidiaries) for at least one (1) year prior to rendering  services
for or on behalf of the  Managing  Member or the  Company,  (B) who,  at no time
during the five (5) years prior to becoming employed by or providing services to
NGUSA or any  NGUSA  Affiliate,  was an  employee  of any  Original  GridAmerica
Company  or any  Affiliate  thereof  and (C)  who is  transferred,  seconded  or
otherwise  made  available to the  Managing  Member or the Company to serve in a
senior executive or a senior or special technical position;  provided,  however,
that (x) NGUSA  shall  provide the Company  and each  GridAmerica  Company  with
notice  of  such  Excluded  Employee's  status  as such  within  30 days of such
individual's commencement of service with the Managing Member or the Company and
(y) at no time shall there be more than ten (10) Persons  designated as Excluded
Employees  pursuant to this clause (i) and (ii) a reasonably  limited  number of
employees of NGUSA or any NGUSA Affiliate  (other than the Initial  Member,  the
Company  or any of  their  respective  subsidiaries)  that are  seconded  to the
Company or the Managing Member for less than ninety (90) days.

                                       5

<PAGE>

     "Exclusive  Period" shall mean the period  beginning on the Effective  Date
and ending on the  earliest of (i) the date of closing of an IPO,  (ii) the date
on which the Initial  Member ceases to be the Managing  Member of the Company or
(iii) the fifth anniversary of the Transmission Service Date.

     "Exclusivity  Transaction"  shall mean any transaction  (including an asset
sale, stock sale, merger, consolidation,  or other combination) by or in respect
of any GridAmerica  Company pursuant to which ownership or control of all or any
material portion of such GridAmerica Company's Transmission Facilities which are
subject to the  Functional  Control of the  Company  pursuant  to the  Operation
Agreement are  transferred  to another  Person,  but excluding any  transaction,
proposed transaction or negotiation (i) involving the transfer of such assets to
an Affiliate of such  GridAmerica  Company,  (ii) involving the ultimate  parent
entity of such GridAmerica  Company and  substantially  all of its subsidiaries,
provided  that  the  overall   business  of  such  ultimate  parent  entity  and
subsidiaries is not the ownership and/or  operation of GridAmerica  Transmission
Facilities,  (iii)  involving a lower level  operating  company  with respect to
which GridAmerica Transmission Facilities do not constitute all or substantially
all of its  assets,  (iv) in which the assets to be  transferred  are not all or
substantially all GridAmerica Transmission Facilities,  (v) involving a transfer
of  such  Transmission  Facilities  as  collateral  for a loan  or in a  similar
financing  transaction  and any transfer  thereof in lieu of foreclosure or (vi)
which is in progress as of the Effective Date; provided,  however,  that, in the
case of a transaction,  proposed transaction or negotiation  described in clause
(vi),  (x) the  GridAmerica  Company has  disclosed  the  transaction,  proposed
transaction  or  negotiation to NGUSA in writing on or before the Effective Date
(without being required to disclose the identity of any other Person involved in
such  transaction,  proposed  transaction or  negotiation)  and (y) a definitive
agreement  in respect  thereof  is  executed  within  six (6)  months  after the
Effective Date.

     "Fair Market Value" shall have the meaning given in Section 7.1.

     "Favorable  Opinion of Counsel"  shall mean one or more opinions of counsel
recognized  as being  competent  to opine with respect to the matter as to which
the opinion is being  delivered in form and substance  reasonably  acceptable to
the intended  addressee(s)  thereof  covering  such matters as may be reasonably
requested  by the  intended  addressee(s)  thereof and as are  customary  in the
context  of  similar  transactions  or  situations,  including,  if  applicable,
opinions  confirming the satisfaction of applicable  Securities Laws;  provided,
however, such opinion may be subject to customary and reasonable  qualifications
and assumptions.

     "FERC Approving Order" shall have the meaning given in the recitals hereof.
"Final Order" shall mean an order issued by the Commission approving such of the
Transaction  Agreements as to which approval of the Commission is required under
applicable Law.

     "First Divestor" shall mean, collectively,  the GridAmerica Company and any
of its Affiliates  that  transfers  GridCo East  Transmission  Facilities in the
First Divestor Divestiture.

     "First Divestor Divestiture" shall mean either (i) the acquisition by NGUSA
or any NGUSA Affiliate of any GridCo East Transmission Facilities from the First
Divestor under

                                       6

<PAGE>

circumstances where the Company  contemporaneously  or subsequently issues Units
in exchange for some or all of such GridCo East Transmission  Facilities or (ii)
the issuance by the Company of Units to any Affiliated  Investor in exchange for
cash,  which cash is used by the Company in connection  with the  acquisition of
any GridCo East Transmission  Facilities from the First Divestor,  in each case,
prior to the third  anniversary of the Transmission  Service Date but before any
other GridCo East Company exercises its Put Right.

     "Form S-3" shall mean such form under the  Securities  Act or any successor
registration  form under the  Securities  Act.  subsequently  adopted by the SEC
which permits inclusion or incorporation by reference of substantial information
by reference to other documents filed by GridAmerica HoldCo with the SEC.

     "Functional  Control"  shall  have  the  meaning  given  in  the  Operation
Agreement.

     "GAAP" shall mean United States generally accepted  accounting  principles,
as in effect from time to time.

     "Governmental  Authority" or  "Governmental"  shall mean a federal,  state,
local  or  foreign  governmental  authority;  a state,  province,  commonwealth,
territory  or district  thereof;  a county or parish;  a city,  town,  township,
village or other municipality;  a district,  ward or other subdivision of any of
the foregoing; any executive,  legislative or other governing body of any of the
foregoing; any agency,  authority,  board, department,  system, service, office,
commission,  committee,  council  or  other  administrative  body  of any of the
foregoing;  any court or other judicial body and any officer,  official or other
representative of any of the foregoing.

     "GridAmerica HoldCo" shall have the meaning given in Section 6.13.

     "GridAmerica  ITC" shall mean the ITC created by the GridAmerica  Companies
and NGUSA  pursuant  to this  Agreement,  the LLC  Agreement  and the  Operation
Agreement.

     "GridAmerica   Transmission   Facilities"  shall  mean  those  Transmission
Facilities  owned by a  GridAmerica  Company,  over which the Company  exercises
Functional Control pursuant to the Operation Agreement.

     "Gross Negligence" shall have the meaning given in the LLC Agreement.

     "Incidental Registration" shall have the meaning given in Section 6.2.

     "Indemnity Cap" shall have the meaning given in the Operation Agreement.

     "Independent Transmission Company" or "ITC" shall have the meaning given in
the preamble hereof.

     "Initial Member" shall have the meaning given in the preamble hereof.

     "Initial  Public  Offering"  or "IPO"  shall  mean the  first  underwritten
primary  Public  Offering  of Shares  under a  registration  statement  filed by
GridAmerica HoldCo under the Securities Act.

                                       7

<PAGE>

     "Interested  Parties"  shall mean (i) in the case of the  exercise of a Put
Right by NGUSA or any Affiliated Investor,  NGUSA (acting on behalf of itself or
any affected  Affiliated  Investors) and the Company and (ii) in the case of the
exercise  of a Put Right by any  other  Person,  such  Person  and the  Managing
Member; provided, however, that any determination by the Company in its capacity
as an "Interested  Party" shall be made by the Members (other than NGUSA and any
Affiliated  Investor),  acting  collectively  on the  basis of their  Percentage
Interests.

     "Interested  Party  Valuation Firm" shall have the meaning given in Section
7.1(a).

     "ITC  Agreements"  means (i) the LLC  Agreement,  (ii) the  Certificate  of
Formation of the Company under the Delaware Limited Liability Company Act, (iii)
the Operation Agreement and (iv) this Agreement.

     "IPO Demand Registration" shall have the meaning given in Section 6.1(a).

     "IPO Notice" shall have the meaning given in Section 6.1(b).

     "Law" shall mean any applicable  constitutional  provision,  statute,  act,
code, law, regulation,  rule, ordinance,  order, decree,  ruling,  proclamation,
resolution,  judgment, decision, declaration or interpretive or advisory opinion
of a Governmental Authority.

     "LLC  Agreement"  shall mean the Amended  and  Restated  Limited  Liability
Company  Agreement of the Company  dated as of February  14, 2003,  as it may be
amended, modified or otherwise supplemented and in effect from time to time.

     "Make-Ready  Arrangements"  shall  mean the  arrangements,  contractual  or
otherwise, made by or entered into by or between the Company and the Midwest ISO
pursuant  to  which  each of the  Company  and the  Midwest  ISO  acquires  such
services, intellectual property and other assets as are required for the Company
to serve as an Independent  Transmission  Company within the Midwest ISO and for
each of the Company and the  Midwest ISO to perform its  respective  obligations
under the Delineation of Functions (as defined in the MISO ITC Agreement).

     "Managing  Member"  shall  mean  the  managing  member  of the  Company  as
designated in accordance with Section 6.1 of the LLC Agreement.

     "Market  Participant"  shall mean a Person  that is a "Market  Participant"
within the meaning of Order 2000, or any subsequent rule, regulation or order of
the  Commission  establishing  the  requirements  of  independence  for a Person
managing an ITC exercising the functions and  responsibilities  that GridAmerica
ITC will exercise under the MISO ITC Agreement.

     "Maximum Section 3.1(a) Commitment" shall have the meaning given in Section
3.1(a).

     "Member"  shall mean any Person who is a member of the  Company,  including
the Managing Member.

                                       8

<PAGE>

     "Midwest ISO" shall have the meaning given in the recitals hereof.

     "Midwest ISO's  Notification of Readiness"  shall have the meaning given in
Section 2.1(e).

     "MISO ITC  Agreement"  shall mean the Amended and  Restated  Appendix I ITC
Agreement  by and between  the Midwest ISO and the Company  dated as of February
14, 2003, as the same may be amended,  modified or otherwise supplemented and in
effect from time to time.

     "Net Book Value" shall have the meaning given in Section 2.2(f)(2).

     "Net Plant" or "net  plant"  shall  mean,  as of any date of  determination
thereof and with respect to any Transmission  Facilities,  the net book value of
such Transmission Facilities as computed using the information shown in the then
most  recent  FERC  Form 1  filed  with  the  Commission  with  respect  to such
Transmission Facilities. For the avoidance of doubt, for any and all purposes of
this Agreement and the other  Transaction  Agreements,  (i) "Net Plant" shall be
calculated,  and if  required  adjusted,  annually  on each  anniversary  of the
Effective Date and (ii) the calculation  made and Form 1 information  used shall
be the difference  between (A) the  information  on page 207,  Electric Plant in
Service  (Account 101,  102, 103 and 106),  line 53, Total  Transmission  Plant,
Column  G,  less (B) the  information  on page 219,  Accumulated  Provision  for
Depreciation of Electric Utility Plant (Account 108), Section B. Balances at End
of Year According to Functional Classification, line 23, Transmission, Column C;
provided,  however,  that if FERC Form 1 is  modified  or changed  such that the
foregoing  designations  no longer  apply,  the  information  used shall be that
information  in the  modified  or  changed  form  that  provides,  as  nearly as
practicable, the same substantive result as the foregoing.

     "Neutral Valuation Firm" shall have the meaning given in Section 7.1(c).

     "NGUSA" shall have the meaning given in the preamble hereof.

     "NGUSA Affiliate" shall mean an Affiliate of NGUSA.

     "NGUSA Management Term" shall have the meaning given in Section 2.2(b).

     "NGUSA Termination Notice" shall have the meaning given in Section 2.2(b).

     "Non-Divesting  GridAmerica  Companies"  shall  have the  meaning  given in
Section 2.1(d).

     "Non-Market  Participant"  shall  mean  a  Person  that  is  not  a  Market
Participant.

     "Non-NGUSA  Termination  Notice"  shall have the  meaning  given in Section
2.2(b).

     "Notice  of  Removal  Dispute"  shall  have the  meaning  given in  Section
12.3(b).

     "Operation  Agreement"  shall  mean  the  Amended  and  Restated  Operation
Agreement dated as of February 14, 2003,  among the Company and each GridAmerica
Company

                                       9

<PAGE>

or its applicable Affiliate,  as the same may be amended,  modified or otherwise
supplemented and in effect from time to time.

     "Operational  Segment"  shall mean  Transmission  Facilities  which are (i)
capable of being  operated  in the  ordinary  course of  business  as a coherent
transmission  system and (ii) capable of having  revenues that can be separately
accounted  for under  the then  current  revenue  distribution  methodology  and
procedures of the Company after such facilities are acquired by the Company.

     "Order" shall mean any writ, judgment,  decree, injunction or similar order
of any Governmental Authority (in each such case, whether preliminary or final).

     "Order  2000"  shall mean the  Commission's  order  identified  as Regional
Transmission  Organizations,  Docket No. RM99-2-000,  89 FERC P. 61, 285 (1999),
all subsequent orders of the Commission in such Docket,  and all other orders of
the  Commission   pertaining  to  the  rights  and  obligations  of  a  regional
transmission organization.

     "Original  GridAmerica  Companies"  shall  have  the  meaning  given in the
preamble hereof.

     "Panel" shall have the meaning given in Section 12.2(d).

     "Party" shall mean any party from time to time to this Agreement.

     "Percentage  Interest" shall mean, as at any time of determination and with
respect  to any  Member,  the  product  of (i) the  number of Units held by such
Member at such time divided by the total number of outstanding  Units multiplied
by (ii) one hundred percent (100%).

     "Person" shall mean any natural person or Entity.

     "Pro-forma  Number of Put Units"  shall have the  meaning  given in Section
5.1(c).

     "Prospectus"  shall  mean  the  prospectus  included  in  any  Registration
Statement, as amended or supplemented by any prospectus supplement, with respect
to the  terms of the  offering  of any  portion  of the  Registrable  Securities
covered  by  any  Registration  Statement,  and  by  all  other  amendments  and
supplements  to such  prospectus,  including  post-effective  amendments and all
material incorporated by reference in such prospectus.

     "Public  Offering"  shall mean an underwritten  public offering  registered
pursuant to the Securities Act of Shares of GridAmerica  HoldCo as  contemplated
by Article VI.

     "Put Agreement" shall have the meaning given in Section 5.1(b).

     "Put Closing" shall have the meaning given in Section 5.3.

     "Put Notice" shall have the meaning given in Section 5.1(a).

     "Put Right" shall have the meaning given in Section 5.1.

                                       10

<PAGE>

     "Putting  GridAmerica  Company"  shall  have the  meaning  given in Section
5.1(a).

     "Qualifying Offer" shall have the meaning given in Section 2.2(f)(3).

     "Recipient" shall have the meaning given in Section 13.9.

     "Register,"  "registered"  and  "registration"  shall  mean and refers to a
registration  effected by  preparing  and filing a  Registration  Statement  and
taking  all other  actions  that are  necessary  or  appropriate  in  connection
therewith, and the declaration or ordering of effectiveness of such Registration
Statement by the SEC.

     "Registrable Securities" shall mean, with respect to any Registration,  all
Shares held by Selling Shareholders participating in such Registration, provided
that such term  shall not  include  any such  Shares  after they are sold to the
public  pursuant to a Registration  Statement  under the Securities Act or after
they are sold in a private  transaction in which the registration rights granted
pursuant  to Article VI were not  assigned to the  purchasers  thereof or Shares
which are sold without  restriction  under Rule 144(k) of the  Securities Act or
any successor rule thereto.

     "Registration Expenses" shall have the meaning given in Section 6.7.

     "Registration   Statement"  shall  mean  any   registration   statement  of
GridAmerica  HoldCo that  complies  with  Section 5 of the  Securities  Act that
covers Registrable Securities or other Shares pursuant to the provisions of this
Agreement,  including the  Prospectus,  all amendments  and  supplements to such
registration statement,  including all post-effective  amendments,  all exhibits
and all material incorporated by reference in such registration statement.

     "Related Proceeding" shall have the meaning given in Section 12.2(c).

     "Removal Arbitration" shall have the meaning given in Section 12.3.

     "Removal Claim" shall have the meaning given in Section 12.3.

     "Removal Claimant" shall have the meaning given in Section 12.3(b).

     "Removal Dispute Parties" shall have the meaning given in Section 12.3(b).

     "Removal Notice" shall have the meaning given in Section 12.3(b).

     "Removal Respondent Party" shall have the meaning given in Section 12.3(b).

     "Representatives" shall have the meaning given in Section 13.9(a).

     "Request Period" shall have the meaning given in Section 6.4.

     "Required  Consent"  shall mean,  collectively,  each  Consent that must be
obtained,  satisfied  or made to permit  the  consummation  of the  transactions
contemplated  by this  Agreement and the other  Transaction  Agreements  and the
performance  by each of the  parties  to the  Transaction  Agreements  of  their
respective obligations hereunder and thereunder, but

                                       11

<PAGE>

excluding any Consent which may be required to perform an obligation  which,  by
the terms of the Transaction  Agreements,  will not arise and is not required to
be performed except upon the happening of one or more contingencies specified in
the Transaction Agreements.

     "Respondent Party" shall have the meaning given in Section 12.2(b).

     "SEC" shall mean the United States  Securities  and Exchange  Commission or
any successor agency.

     "Secondary  Demand  Registration"  shall have the meaning  given in Section
6.1(c)(1).

     "Section 3.1(a) Units" shall have the meaning given in Section 2.2(d).

     "Securities  Act" shall mean the  Securities  Act of 1933,  as amended from
time to time, and the rules and regulations promulgated thereunder.

     "Securities  Laws" shall mean the Securities Act, the Exchange Act, and any
other applicable securities Laws.

     "Selling Shareholder" shall mean any holder of Shares who has exercised its
right to sell all or a portion  of those  Shares  pursuant  to the  registration
rights granted pursuant to Article VI.

     "SEOs" shall have the meaning given in Section 12.1.

     "Shares"  shall  mean  shares  of Class A Stock  or  Class B Stock.  "Super
Majority  of  Non-Managing  Members"  shall  have the  meaning  given in the LLC
Agreement.

     "Super Majority of Transmission Owners" shall mean (i) prior to the date on
which the Company  first issues Units in exchange for  Transmission  Facilities,
two-thirds or more of the GridAmerica Companies and (ii) thereafter, one or more
"owners of  transmission  facilities"  who, among them,  own (through  actual or
deemed ownership as provided below) Transmission  Facilities that are subject to
the Functional Control of the Company pursuant to the Operation Agreement or are
owned by the Company  with a Net Plant  greater  than 66.67% of the Net Plant of
all Transmission  Facilities  subject to such Functional  Control of the Company
pursuant to the Operation Agreement or owned by the Company. For purposes of the
above  vote,  the "owner of  transmission  facilities"  means (i) in the case of
Transmission  Facilities subject to the Company's Functional Control pursuant to
the  Operation  Agreement,  the  Person  that  actually  owns such  Transmission
Facilities and (ii) in the case of Transmission Facilities actually owned by the
Company, the Members in accordance with their respective  Percentage  Interests.
In  the  event  that  an  Initial  Public  Offering  shall  have  occurred,  the
independent board members of GridAmerica  HoldCo shall vote the deemed ownership
interest of GridAmerica HoldCo.

     "System-Wide  Assets"  shall  mean the assets of the  Company  that (i) are
intended,  or have the ability, to benefit primarily all or substantially all of
the GridAmerica  Transmission

                                       12

<PAGE>

Facilities  owned by, or subject to the  Functional  Control  of, the Company or
(ii) further the coordination,  management and operation of all or substantially
all of the  GridAmerica  Transmission  Facilities  owned by, or  subject  to the
Functional Control, of the Company.

     "System-Wide  Capital  Expenditures" shall mean Capital Expenditures by the
Company in respect of System-Wide Assets.

     "Third Party Recipient" shall have the meaning given in Section 13.9(c).

     "Transaction" shall have the meaning given in the Recitals hereof.

     "Transaction  Agreements"  means  the  ITC  Agreements  and  the  MISO  ITC
Agreement.

     "Transmission  Facilities"  shall mean facilities used for the transmission
of  electric  power and energy of the kind  subject to the  jurisdiction  of the
Commission.

     "Transmission Service Date" shall have the meaning given in Section 2.1(e).

     "Underwritten   registration"  or  "underwritten  offering"  shall  mean  a
registration in which Shares of GridAmerica HoldCo are sold to an underwriter or
through an underwriter as agent for reoffering to the public.

     "Unit Exchange" shall have the meaning given in Section 6.13.

     "Unit Price" shall have the meaning given in Section 5.1(c).

     "Unit" shall have the meaning given in the LLC Agreement.

     "Willful Misconduct" shall have the meaning given in the LLC Agreement.

     Section  1.2  Rules of  Construction.  The  following  provisions  shall be
applied wherever appropriate herein:

          (i)  "herein,"  "hereby,"  "hereunder,"  "hereof,"  "hereto" and other
     equivalent  words shall  refer to this  Agreement  as an  entirety  and not
     solely to the  particular  portion of this Agreement in which any such word
     is used;

          (ii) "including" means "including without limitation" and is a term of
     illustration and not of limitation;

          (iii)all  definitions  set forth  herein  shall be  deemed  applicable
     whether the words defined are used herein in the singular or the plural;

          (iv) unless  otherwise  expressly  provided,  any term defined in this
     Article I by reference to any other  document shall be deemed to be amended
     herein  to the  extent  that  such  term is  subsequently  amended  in such
     document;

                                       13

<PAGE>

          (v)  wherever used herein,  any pronoun or pronouns shall be deemed to
     include both the singular and plural and to cover all genders;

          (vi) neither  this  Agreement  nor any other  agreement,  document  or
     instrument  referred  to herein or executed  and  delivered  in  connection
     herewith   shall  be  construed   against  any  Person  as  the   principal
     draftsperson hereof or thereof;

          (vii)the section  headings  appearing in this  Agreement  are inserted
     only as a matter of convenience  and in no way define,  limit,  construe or
     describe  the scope or extent of such  section,  or in any way affect  this
     Agreement;

          (viii) any references herein to a particular Section, Article, Exhibit
     or Schedule  means a Section or Article  of, or an Exhibit or Schedule  to,
     this Agreement unless another agreement is specified; and

          (ix) the  Exhibits  and  Schedules  attached  hereto are  incorporated
     herein by reference and shall be considered part of this Agreement.

                                   ARTICLE II

           CREATION OF GRIDAMERICA ITC, MANAGING MEMBER; TRANSMISSION
                                  SERVICE DATE

     Section 2.1 Creation of Grid America ITC.

     (a)  Purpose  of  GridAmerica  ITC.  The  Company  shall,  on the terms and
subject to the conditions set forth in this Agreement,  the other ITC Agreements
and the MISO Agreements,  serve as an Independent  Transmission  Company for the
GridAmerica Transmission Facilities.

     (b)  Required  Consents.  From and after the  Effective  Date and until the
Transmission  Service Date, each Party shall: (1) take  commercially  reasonable
steps necessary and proceed  diligently and in good faith to obtain all Required
Consents   required  to  be  obtained  by  it  to  consummate  the  transactions
contemplated  hereby and by the other Transaction  Agreements which are intended
to be consummated  on the  Transmission  Service Date;  (2) provide  information
which may be requested by Governmental  Authorities in connection therewith; and
(3) cooperate with each other Party in obtaining all Required  Consents required
of such other Party to consummate the  transactions  contemplated  hereby and by
the other  Transaction  Documents  which are intended to be  consummated  on the
Transmission  Service Date. Each Party shall provide prompt notification to each
other  Party  when any  Required  Consent  referred  to in  clause  (1) above is
obtained, taken, made or given, as applicable, and shall advise each other Party
of any material, written, non-confidential communications (and, upon request and
unless  confidential  or precluded by Law,  provide  copies of any such material
communications  which are in writing) with any Governmental  Authority regarding
such Required Consents.

                                       14

<PAGE>

     (c)  Covenant. From and after the Effective Date and until the Transmission
Service Date,  each Party shall  exercise  commercially  reasonable  efforts and
proceed diligently and in good faith to satisfy the conditions to the occurrence
of the Transmission Service Date set forth in Section 2.1(d).

     (d)  Conditions  to  Transmission  Service  Date.  No later  than the fifth
Business Day following the  satisfaction or, in the case of clauses (1), (2) and
(3) below,  waiver by the Party  requiring  the  Required  Consents  referred to
therein, of each of the following conditions precedent, the Company shall notify
the  Midwest  ISO, in  writing,  of the  satisfaction  of all  applicable  legal
requirements, system readiness and systems integration necessary for the Midwest
ISO to assume  its  responsibilities  under the  Delineation  of  Functions  (as
defined in the MISO ITC  Agreement) as required by Section 4.1.3 of the MISO ITC
Agreement (the "Company's Notification of Readiness"):

          (1)  The  Commission  shall have issued one or more Final Orders which
     are no longer subject to possible rehearing and which, collectively, are an
     Approval Order.

          (2)  Each Party  requiring  the same shall have  received any Required
     Consent  under the  Public  Utility  Holding  Company  Act of 1935 and such
     Required  Consent shall:  (i) be in form and substance  which would not, in
     the reasonable  judgment of such Party, and when considered in light of the
     Final Orders and all other  Required  Consents (A) cause such Party to fail
     to realize any material  benefit which it reasonably  anticipates  from the
     transactions  contemplated by the Transaction  Agreements or (B) impose any
     conditions  or  requirements  which could  reasonably be expected to have a
     material  and  adverse  effect on such  Party's  or any of its  Affiliates'
     current  or  planned  operations  or  business  activities  or its or their
     prospects; and (ii) be in full force and effect.

          (3)  Each Party  requiring  the same shall have  received any Required
     Consent under any other  applicable  federal or state Law and such Required
     Consent  shall:  (i) be in form  and  substance  which  would  not,  in the
     reasonable  judgment of such  Party,  and when  considered  in light of the
     Final Orders and all other  Required  Consents (A) cause such Party to fail
     to realize any material  benefit which it reasonably  anticipates  from the
     transactions  contemplated by the Transaction  Agreements or (B) impose any
     conditions  or  requirements  which could  reasonably be expected to have a
     material  and  adverse  effect on such  Party's  or any of its  Affiliates'
     current  or  planned  operations  or  business  activities  or its or their
     prospects; and (ii) be in full force and effect.

          (4)  The  Make-Ready  Arrangements  shall be in place  and shall be in
     form and substance  reasonably  satisfactory to NGUSA and each  GridAmerica
     Company.

          (5)  The Midwest ISO and the Company shall have executed and delivered
     the MISO ITC Agreement,  which shall be reasonably satisfactory in form and
     substance to each GridAmerica Company.

                                       15

<PAGE>

          (6)  The Company shall have  delivered  evidence of a commitment  from
     one or more  insurance  companies to provide  insurance of the types and in
     the amounts as shall be agreed between NGUSA and the GridAmerica Companies,
     such coverages to be effective on and as of the Transmission Service Date.

          (7)  Each Party shall have delivered to each other Party a certificate
     of a  senior  officer,  such  certificate  to  be  in  form  and  substance
     satisfactory to each other Party,  certifying:  (i) that the Final Order of
     the Commission is acceptable as an Approval Order, (ii) that such Party has
     received  all  Required  Consents  required  of it and each  such  Required
     Consent is in form and substance  satisfactory to such Party,  (iii) in the
     case  of  each  GridAmerica  Company,  (x)  that  each  of  the  Make-Ready
     Arrangements   and  the  MISO  ITC  Agreement  is  in  form  and  substance
     satisfactory to such GridAmerica Company, (y) as to the satisfaction of all
     applicable legal  requirements,  system  readiness and systems  integration
     necessary  for the transfer to the Company of  Functional  Control over the
     Transmission Facilities of such GridAmerica Company and for the Midwest ISO
     to assume its  responsibilities  under the  Delineation  of  Functions  (as
     defined in the MISO ITC Agreement) as required by Section 4.1.3 of the MISO
     ITC  Agreement  and (z) such other  matters as the Company  may  reasonably
     request  to permit the  Company,  in  reliance  upon such  certificate,  to
     deliver the Company's Notification of Readiness to the Midwest ISO and (iv)
     in the case of the  Company,  that the  Company  and the  Midwest  ISO have
     agreed on procedures  for  implementing  the  Delineation  of Functions (as
     defined in the MISO ITC Agreement).

     (e) Occurrence of Transmission  Service Date. On the first day of the month
following  the  receipt by the  Midwest  ISO of the  Company's  Notification  of
Readiness and the receipt by the Company of written  notice from the Midwest ISO
of the satisfaction of all applicable legal  requirements,  system readiness and
systems integration necessary for the Midwest ISO to assume its responsibilities
under the  Delineation  of Functions  (as defined in the MISO ITC  Agreement) as
required  by  Section  4.1.3 of the  MISO  ITC  Agreement  (the  "Midwest  ISO's
Notification  of  Readiness"),  but no earlier than the fifth day  following the
date of the Midwest ISO's Notification of Readiness (such day is herein referred
to as the "Transmission Service Date"), the GridAmerica Companies shall transfer
Functional Control over the GridAmerica  Transmission  Facilities to the Company
and  the   Company  and  the  Midwest   ISO  shall   assume   their   respective
responsibilities  under the Delineation of Functions (as defined in the MISO ITC
Agreement)  over the  GridAmerica  Transmission  Facilities as  contemplated  by
Section  4.1.3  of  the  MISO  ITC  Agreement;   provided,   however,  that  the
Transmission  Service Date shall be postponed and shall not occur (i) unless and
until the Midwest ISO shall, in  consideration  of the Make-Ready  Arrangements,
have  made (x) a  one-time  payment  equal to the  amount  of the  actual  costs
(including appropriately allocated internal costs) incurred by NGUSA (and/or its
Affiliates)   and  the   GridAmerica   Companies  to  establish  the  Make-Ready
Arrangements and (y) a one-time  payment to reimburse the GridAmerica  Companies
for their  actual  costs  (including  appropriately  allocated  internal  costs)
incurred  in the  development  of  Alliance  RTO,  such  payments  to be made as
directed  by the  Company,  (ii)  unless  and until the  Midwest  ISO shall have
refunded to Ameren Services Company, with interest, the $18,000,000 payment made
by Ameren  Services  Company to leave the Midwest  ISO  pursuant to the terms of
settlement  approved in Illinois Power Co., 95 FERC P. 61,183,  order on reh'g.,
96 FERC P. 61,206 (2001) and (iii) if there shall then be in effect any Order or
Law  restraining,  enjoining

                                       16

<PAGE>

or otherwise  prohibiting or making illegal the consummation of the transactions
contemplated by the Transaction  Agreements.  Anything in this Section 2.1(e) to
the contrary  notwithstanding,  the aggregate  amount required to be paid by the
Midwest ISO pursuant to clause (i) above shall not exceed $36,200,000.

     Section 2.2. The Initial Member; Term and Removal.

     (a)  The Initial Member.  The Parties  acknowledge  that the Initial Member
has been appointed  Managing  Member of the Company,  and agree that the Initial
Member shall serve in such capacity  pursuant to the terms of this Agreement and
the LLC Agreement.

     (b)  Term of Service.  Subject to  Sections  5.7 and  10.1(4),  the Initial
Member  shall  serve as the  Managing  Member  for the period  beginning  on the
Effective Date and ending on the fifth  anniversary of the Transmission  Service
Date (the "NGUSA  Management  Term").  The NGUSA  Management Term  automatically
shall be extended for successive  two-year  periods unless,  at least six months
before the last day of the then-current  NGUSA  Management Term,  either (i) the
Initial Member gives written  notice to the Company and each of the  GridAmerica
Companies  (an "NGUSA  Termination  Notice") or (ii) Members  holding at least a
majority of the  outstanding  Class A Units give  written  notice to the Initial
Member,  such other Persons as may be required  under the LLC Agreement and each
GridAmerica Company (a "Non-NGUSA  Termination  Notice"), to the effect that the
NGUSA Management Term shall not be so extended.

     (c)  Resignation.  The Initial  Member shall not resign as Managing  Member
and NGUSA shall not permit the Initial Member to resign as Managing Member other
than (i) by  causing  the  NGUSA  Management  Term to  expire  at the end of the
then-current term thereof through issuance of an NGUSA Termination  Notice, (ii)
as may be required by Section  10.1(d),  (iii) upon exercise of its  resignation
rights pursuant to Section 5.7, (iv) upon thirty (30) days prior written notice,
if as the result of a change in applicable  Law,  NGUSA or any of its Affiliates
is no  longer  able to meet  the  requirements  of the  Commission  for  being a
Non-Market  Participant or (v) upon sixty (60) days prior written notice, if, as
a result of a proposed transaction involving an acquisition of a company (or any
of its assets) which is not a member of the Midwest ISO or the  Southwest  Power
Pool  on the  date  of this  Agreement  by  NGUSA  or any of its  Affiliates  in
furtherance of NGUSA's transmission and distribution business strategy described
in Section  9.4(e),  NGUSA or the  Initial  Member is no longer able to meet the
requirements  of the  Commission  for  being a  Non-Market  Participant  and the
Commission does not accept such mitigation  measures as shall have been proposed
by NGUSA in  connection  with such  transaction  as is  contemplated  by Section
10.1(a),  provided,  however,  in the case of any  resignation  pursuant to this
clause  (v),  that  NGUSA  shall  have  paid  to  the  GridAmerica  Companies  a
resignation fee equal to (I) $7,000,000,  if such resignation  becomes effective
prior  to  the  first  anniversary  of  the  Transmission   Service  Date,  (II)
$5,250,000,  if  such  resignation  becomes  effective  on or  after  the  first
anniversary of the Transmission Service Date but prior to the second anniversary
of the Transmission Service Date and (III) $3,500,000 thereafter.

     (d)  Redemption  Rights Upon  Expiration  of NGUSA  Management  Term.  Upon

expiration of the NGUSA  Management  Term  following the delivery of a Non-NGUSA
Termination Notice with respect to which neither NGUSA or an Affiliated Investor
voted in favor,  NGUSA shall have the right, but not the obligation,  to require
the  Company  to  redeem

                                       17

<PAGE>

some or all of the Units which were purchased by Affiliated  Investors  pursuant
to Section  3.1(a)  ("Section  3.1(a)  Units")  (to the extent  still held by an
Affiliated  Investor)  at a price equal to the Fair Market Value of such Section
3.1(a) Units.  Notwithstanding the foregoing,  no Affiliated Investor shall have
the right to require the  redemption  of any 3.1(a)  Units which were  purchased
pursuant to Section  3.1(a)  after the second  anniversary  of the  Transmission
Service Date.

     (e)  Option In Respect of  Indemnity  Cap. If, in any  calendar  year,  the
GridAmerica  Companies  that are and/or were parties to the Operation  Agreement
(the  "Non-Divesting  GridAmerica  Companies")  have  paid  aggregate  indemnity
payments  pursuant to Section  4.2.4(c) of the Operation  Agreement  equal to or
greater  than  the  Indemnity  Cap,  and one or more  Non-Divesting  GridAmerica
Companies who, among them, own  Transmission  Facilities that are subject to the
Functional  Control of the Company  pursuant to the Operation  Agreement  having
aggregate  Net Plant of at least 66.67% of the aggregate Net Plant of all of the
Transmission  Facilities owned by the Non-Divesting  GridAmerica  Companies that
are subject to the Functional  Control of the Company do not, within twenty (20)
days of a written request from NGUSA,  agree to waive in writing the application
of the Indemnity Cap, then NGUSA shall have the right,  but not the  obligation,
upon  twenty (20) days prior  written  notice to the  Non-Divesting  GridAmerica
Companies  to  require  the  Non-Divesting  GridAmerica  Companies  jointly  and
severally  to  purchase  from the  holder  thereof,  the  right to  receive  any
distributions  in respect of the Section  3.1(a)  Units,  but not  including any
voting or other rights associated with such Units (the  "Distribution  Rights"),
for an aggregate  purchase  price  payable in cash equal to that portion of such
holder's  Capital  Account  represented by such Section 3.1(a) Units;  provided,
however,  that, with respect to any Non-Divesting  GridAmerica Company that is a
subsidiary  of a registered  holding  company under the Public  Utility  Holding
Company Act of 1935, the transfer of Distribution  Rights to such  Non-Divesting
GridAmerica  Company  (but not the  joint  and  several  obligation  to make the
payments as described above) shall be expressly  conditioned upon the receipt of
all required  consents and approvals of the SEC under that statute.  The written
request from NGUSA shall  specify the Capital  Account of each holder of Section
3.1(a)  Units and provide  reasonable  detail as to the changes in such  Capital
Account  since the purchase of the Section  3.1(a) Units.  If any  Non-Divesting
GridAmerica Company fails to purchase its share of the Distribution  Rights, the
other  Non-Divesting  GridAmerica  Companies  shall be required to purchase such
share and shall be  subrogated  to rights of the holders of the  Section  3.1(a)
Units  against  such  non-performing   Non-Divesting  GridAmerica  Company.  The
Distribution Rights purchased by the Non-Divesting  GridAmerica  Companies shall
be assigned to the  Non-Divesting  GridAmerica  Companies in proportion to their
payments therefor.

          (f)  Rights of the Company Upon Expiration of NGUSA Management Term.

               (1)  If the Initial  Member ceases to be the Managing  Member for
          any reason,  the Company shall have the right, but not the obligation,
          to either (i) acquire 100% of the outstanding  Equity Interests of the
          Initial  Member or 100% of the assets and  liabilities  of the Initial
          Member for a price equal to the Net Book Value of the  Initial  Member
          determined as of the date on which the Initial Member ceases to be the
          Managing  Member or (ii) may offer (or a designee  of the  Company may
          offer)  employment to any employee of the Initial  Member,  other than
          Excluded  Employees.  The Company may exercise  the rights  granted by
          this  Section 2.2 (f) by  delivering  written

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<PAGE>

          notice to NGUSA and the Initial  Member  within  sixty (60) days after
          the date on which the Initial Member ceases to be the Managing Member.

               (2)  If the  Company  elects to acquire the Equity  Interests  or
          assets and liabilities of the Initial  Member,  NGUSA shall cause such
          Equity  Interests or assets and  liabilities  to be transferred to the
          Company free and clear of all Encumbrances (except, in the case of the
          assets of the Initial Member, Encumbrances that have been disclosed to
          the Company),  and NGUSA and the seller of such Equity Interests shall
          be  required  to make  customary  representations  and  warranties  in
          respect of due authorization, title, enforceability, no conflicts with
          agreements  or  applicable  Laws,  the  need  for any  third  party or
          Governmental consents,  and disclosing material assets,  contracts and
          liabilities.  The "Net Book Value" of the Initial  Member shall be the
          difference,  but not less than zero,  between the aggregate  assets of
          the  Initial  Member  less the  aggregate  liabilities  of the Initial
          Member,  both  determined  in  accordance  with GAAP. If NGUSA and the
          Company do not agree on the Net Book Value of the Initial Member,  the
          Net Book Value shall be finally  determined  by the Agreed  Accounting
          Firm. The  acquisition of the Equity Interest of the Initial Member or
          the assets and liabilities of the Initial Member by the Company or its
          designee  shall not  include  any Units or Shares or any  indebtedness
          incurred to acquire any Units or Shares,  and (i) immediately prior to
          the closing of such  acquisition,  the Initial Member shall distribute
          or otherwise  transfer any Units or Shares held by it to its member(s)
          or shareholder(s) (as the case may be) and cause the Initial Member to
          be  released  from any  indebtedness  incurred to acquire any Units or
          Shares  and shall  cause  any  Encumbrances  on assets of the  Company
          securing  acquisition  indebtedness  for such  Units or  Shares  to be
          released  and (ii) any such Units or Shares and any such  indebtedness
          shall not be included in determining the Net Book Value of the Initial
          Member.

               (3)  If the Company or its designee elects to offer employment to
          any employees of the Initial  Member (or, in the case of a purchase of
          the Equity Interest in the Initial Member, the Company or its designee
          elects to retain the services of any such  employees),  it shall do so
          on such terms and  subject to such  conditions  as it may from time to
          time elect;  provided,  however, that no such offer shall be deemed to
          be a "Qualifying  Offer" with respect to any such employee unless such
          offer  is  made  during  the  60-day  period  referred  to in  Section
          2.2(f)(1),   and  such  offer  offers  employment  in  a  position  of
          comparable authority with an overall compensation package which, taken
          as a whole,  is  comparable to the overall  compensation  package then
          provided  by the  Initial  Member.  During  the sixty  (60) day period
          referred  to  in  Section  2.2(f)(1),  neither  NGUSA  nor  any  NGUSA
          Affiliate  (other  than the  Company)  shall  offer  employment  to or
          otherwise directly or indirectly retain or seek to retain the services
          of any  employee  of the  Initial  Member,  other  than  any  Excluded
          Employee,  and NGUSA shall not permit any NGUSA Affiliate to engage in
          any such  activities.  After the  expiration  of such  sixty  (60) day
          period,  NGUSA and any NGUSA  Affiliate  may offer  employment  to any
          employee of the Initial  Member;  provided,  however,  that neither of
          NGUSA nor any NGUSA  Affiliate  (other than the  Company)  shall offer
          employment to or otherwise  directly or  indirectly  retain or seek to
          retain the services of any employee of the Initial  Member (other than
          any Excluded  Employees) who receives a Qualifying  Offer for a period
          of one year after the date such Qualifying  Offer is made. The Company
          shall provide NGUSA

                                       19

<PAGE>

          with copies of all Qualifying  Offers of employment  made to employees
          of the Initial Member.  The Initial Member shall have no obligation to
          retain any  employee  of the Initial  Member as an  employee  after it
          ceases to be Managing Member.

               (4)  In the event that there are  holders of Class A Units  other
          than NGUSA and/or Affiliated  Investors at the time the Initial Member
          ceases to be the Managing  Member,  then such holders shall  represent
          the  interests of the Company in  connection  with the exercise by the
          Company of the rights  contained in this Section 2.2(f).  In the event
          that  there are no holders  of Class A Units  other than NGUSA  and/or
          Affiliated  Investors,  then (i) if the  Company  has  issued at least
          $250,000,000 in Class B Units to Persons other than the Initial Member
          and/or its Affiliates,  then the holders of such Units shall represent
          the interests of the Company, and (ii) otherwise,  a Super Majority of
          Transmission  Owners may, if they so elect,  by giving notice to NGUSA
          and the Initial  Member  delivered  not later than  fifteen  (15) days
          after the receipt by the GridAmerica Companies of an NGUSA Termination
          Notice,  a  Non-NGUSA  Termination  Notice or the  notice  of  removal
          delivered  pursuant to Section 6.1(b) of the LLC Agreement,  represent
          the  interests of the Company in  connection  with the exercise by the
          Company of the rights  contained in this Section  2.2(f) to the extent
          permitted by applicable Law.

                                   ARTICLE III

                      PURCHASE OF UNITS BY NGUSA AFFILIATES

     Section 3.1 Initial Purchase of Units and Purchase of Units to Fund Capital
Expenditures and Working Capital Needs.  Subject to the limitations set forth in
Section 3.3, NGUSA shall (or in the case of Section 3.1(b), may at its election)
cause the Initial  Member  and/or one or more  Affiliated  Investors to purchase
Units in the Company as follows:

     (a)  On the  Effective  Date,  NGUSA  shall  cause  the  Initial  Member to
purchase  1,000  Units for a total  purchase  price of  $50,000.  Following  the
Effective Date, when and as the Initial Member, in the performance of its duties
or obligations  as Managing  Member,  determines  that the Company is in need of
additional funds to pay for Capital Expenditures relating to System-Wide Capital
Expenditures or for additional  working capital purposes,  NGUSA shall cause one
or more  Affiliated  Investors  to  purchase  additional  Units in the amount so
determined by the Initial Member; provided, however, that the maximum commitment
of NGUSA and of any Affiliated  Investors  pursuant to this Section 3.1 (a) (the
"Maximum Section 3.1 (a) Commitment")  shall be $25,000,000.  If, at the time of
the purchase of any Units pursuant to this Section 3.1(a), the Initial Member is
the only Member of the Company, the purchase price for Units shall be $50.00 per
Unit  and,  otherwise,  shall  be  equal  to the  Fair  Market  Value  of a Unit
determined pursuant to Article VII.

     (b)  Following the Effective Date,  when and as the Initial Member,  in the
performance of its duties or obligations as Managing Member, determines that the
Company is in need of additional funds to pay for Capital Expenditures  relating
to GridAmerica  Transmission  Facilities or to acquire GridAmerica  Transmission
Facilities, NGUSA may, at its election cause one or more Affiliated Investors to
purchase  additional Units in the amount so determined by the

                                       20

<PAGE>

Initial Member. If at the time of purchase of any Units pursuant to this Section
3.1(b), the Initial Member is the only Member of the Company, the purchase price
for Units  shall be $50.00 per Unit and,  otherwise,  shall be equal to the Fair
Market Value of a Unit determined pursuant to Article VII.

     Section 3.2 Purchase of Units by Affiliated Investors Upon Contributions of
GridAmerica Transmission Facilities.

     (a)  Subject to the limitations set forth in Sections 3.2(c) and 3.3, NGUSA
shall cause one or more  Affiliated  Investors to purchase  Units in the Company
upon the exercise by a GridAmerica Company of a Put Right or the purchase by the
Company of Transmission Facilities from a GridAmerica Company as follows:

          (1)  At each  Put  Closing,  a  number  of  Units  equal  to 5% of the
     Pro-forma  Number of Put Units at a  purchase  price per Unit  equal to the
     Unit Price;

          (2)  At the closing of each purchase of Transmission Facilities from a
     GridAmerica Company other than NGUSA or an Affiliated Investor (whether for
     cash or Units or both),  Units  having a purchase  price equal to 5% of the
     Fair  Market  Value of the  Transmission  Facilities  so  purchased  by the
     Company; and

          (3)  At the option of either NGUSA or the Putting  GridAmerica Company
     (such option being referred to as the "Cash Option"),  a number of Units up
     to an additional  15% (or such higher  percentage as to which NGUSA and the
     Putting  GridAmerica  Company  may  agree) of the  Pro-forma  Number of Put
     Units,  in which  event (i) the  number of Units  received  by the  Putting
     GridAmerica  Company at the Put  Closing  shall be reduced by the number of
     additional  Units  purchased  by such  Affiliated  Investors  and (ii) such
     Putting  GridAmerica  Company  shall,  at the Put  Closing,  receive a cash
     distribution in an amount equal to the aggregate amount paid to the Company
     for such additional Units.

The per Unit price for any Units purchased pursuant this Section 3.2(a) shall be
equal to the Unit Price.

     (b)  If either the Putting GridAmerica Company or NGUSA desires to exercise
its Cash Option,  it shall provide the other and the Company with written notice
of such exercise at least sixty (60) days prior to the Put Closing, which notice
shall specify the  percentage of the Pro-forma  Number of Put Units to which the
exercise  relates.  Notwithstanding  anything to the contrary  contained in this
Section 3.2(b),  if NGUSA exercises the Cash Option and the Putting  GridAmerica
Company determines in good faith that the corresponding  distribution of cash by
the Company to such Putting  GridAmerica Company in connection with the exercise
of the Cash  Option  would  result  in the  Putting  GridAmerica  Company  being
required to  recognize  income as a result of such  distribution  of cash in the
year in which such cash distribution is made in excess of the difference between
the amount of such cash payment and such Putting GridAmerica  Company's pro rata
tax basis in the  Transmission  Facilities  which are  subject to the Put Notice
(determined  by  multiplying  the aggregate  tax basis of all such  Transmission
Facilities by the  percentage of the Pro-forma  Number of Put Units to which the
Cash Option relates), the Putting

                                       21

<PAGE>

GridAmerica Company may, at its election,  upon written notice to NGUSA received
at least thirty (30) days prior to the Put Closing, require NGUSA to rescind the
exercise of the Cash Option. Such notice shall provide a detailed explanation of
the income effect of the exercise by NGUSA of the Cash Option.

     (c)  Notwithstanding  anything  in  this  Agreement  to  the  contrary,  no
Affiliated  Investor  shall have any  obligation to purchase  Units  pursuant to
Section  3.2(a)  (i) if (A) the sum of (x) the  aggregate  amount  of all  Units
purchased by any Affiliated Investor pursuant to Section 3.2(a) and (y) the Fair
Market Value (determined at the time the Transmission Facilities in question are
contributed  to the Company  pursuant to Article V of all capital  contributions
comprising  Transmission  Facilities  made by the  Initial  Member and any NGUSA
Affiliates would exceed (B) the difference  between (x) $500,000,000 and (y) the
amount of the  aggregate  Capital  Contributions  of the Initial  Member and any
Affiliated Investor made pursuant to Section 3.1; provided,  however, that there
shall be excluded from such  calculation the amount,  if any, of the Excess Cash
Amount or (ii) if all Affiliated  Investors  would have,  after giving effect to
the purchase of Units  pursuant to Section 3.2(a) and the issuance of Units to a
Putting  GridAmerica  Company in connection  with exercise of the Put Right,  an
aggregate  Percentage Interest in the Company in excess of twenty percent (20%);
provided,  further,  however, that there shall be excluded from such calculation
Section 3.1(a) Units and any Units issued in respect of the Excess Cash Amount.

     (d)  The  provisions of this Section 3.2 shall not apply to the exercise of
a Put Right by any NGUSA Affiliate.

     Section 3.3 Additional Limitations on Commitment.  Notwithstanding anything
contained in Sections 3.1 or 3.2 to the contrary, but subject to Section 3.2(c):

     (a)  NGUSA shall have no  obligation  to cause any  Affiliated  Investor to
purchase Units pursuant to this Agreement having an aggregate  purchase price in
excess of the sum of $500,000,000 and the Excess Cash Amount.

     (b)  NGUSA shall have no  obligation  to cause any  Affiliated  Investor to
purchase any Units in  connection  with the exercise of the Put Right (i) during
the  final  six (6)  months  of the  initial  NGUSA  Management  Term if a NGUSA
Termination Notice or a Non-NGUSA Termination Notice has been delivered pursuant
to Section 2.2(b),  (ii) if NGUSA  exercises its resignation  rights pursuant to
Section  5.7,  or (iii) at any time after the  Initial  Member  ceases to be the
Managing  Member;  provided,  however,  that the  obligation  to purchase  Units
pursuant to Section  3.2(a) shall  continue  with respect to the exercise of the
Put Right if the Put Notice  relating  thereto was delivered prior to (x) in the
case of clause (i) above,  the final six months of the initial NGUSA  Management
Term or (y) in the case of clause (iii) above,  the date that the Initial Member
ceases to be the Managing Member.

     Section 3.4 Failure to Achieve  Transmission  Service  Date. If the Initial
Member  resigns or is  removed  prior to the  Transmission  Service  Date,  each
GridAmerica Company shall, within thirty (30) days of receipt of notice from the
Initial Member, pay to the Company such GridAmerica  Company's pro rata share of
all capital  contributions made by the Initial Member or any Affiliated Investor
pursuant to Section 3.1(a).  The obligation of each

                                       22

<PAGE>

GridAmerica  Company to pay its pro rata share of such amounts  shall be several
and not joint and several,  and no GridAmerica Company shall be obligated to pay
to the Company any portion of the pro rata share of another  GridAmerica Company
of such amount.  The Initial Member,  as Managing  Member of the Company,  shall
cause the Company to redeem for their  original  purchase  price,  the number of
Units  purchased by the Initial  Member or any Affiliated  Investor  pursuant to
Section 3.1(a) (the proceeds from which were used for the purposes  contemplated
by Section  3.1(a)),  having an original  purchase  price equal to the aggregate
amount received by the Company from the GridAmerica  Companies  pursuant to this
Section  3.4.  For  purposes  of this  Section  3.4,  the pro  rata  share of an
GridAmerica Company shall be equal to the product of the total amount of capital
contributions  made pursuant to Section  3.1(a)  multiplied  by a fraction,  the
numerator of which is the Net Plant of such GridAmerica  Company's  Transmission
Facilities  which are to be subject  to the  Functional  Control of the  Company
pursuant  to the  Operation  Agreement  and  the  denominator  of  which  is the
aggregate Net Plant of all GridAmerica Companies'  Transmission Facilities which
are to be  subject to the  Functional  Control of the  Company  pursuant  to the
Operation Agreement.

                                   ARTICLE IV

                                   EXCLUSIVITY

     Section  4.1  Exclusivity  Period.  If a  GridAmerica  Company  proposes to
consider  soliciting  an  Exclusivity  Transaction  or is  approached by another
Person regarding an Exclusivity  Transaction during the Exclusive Period,  prior
to  engaging  in  substantive  negotiations  with  respect  to such  Exclusivity
Transaction with any other Person,  such GridAmerica  Company shall first notify
NGUSA of its intention to enter into  substantive  negotiations  regarding  such
transaction. Upon receipt of such notice, NGUSA shall have an exclusive right to
make a proposal to such GridAmerica  Company for the purchase of the GridAmerica
Transmission  Facilities which are the subject of such Exclusivity  Transaction,
subject only to NGUSA's execution and delivery to such GridAmerica  Company of a
commercially  reasonable  confidentiality  agreement  to  be  proposed  by  such
GridAmerica  Company (which shall not contain standstill  provisions).  Promptly
upon execution of such a  confidentiality  agreement,  such GridAmerica  Company
will provide  NGUSA with access to business,  financial,  and other  information
relating to such GridAmerica Transmission Facilities in the same form and to the
extent it intends to provide such information to other  prospective  buyers.  If
NGUSA does not execute or deliver  such a  confidentiality  agreement  within 10
days of receipt,  it will be deemed to have waived its rights under this Section
4.1.  During  the  60-day  period  following  the date on  which  NGUSA is first
provided access to such  information,  and in order to allow NGUSA the option to
make  an  offer  to such  GridAmerica  Company  to  purchase  such  Transmission
Facilities,  such  GridAmerica  Company  shall not further  discuss or negotiate
with, or otherwise  provide  information  regarding  any  potential  Exclusivity
Transaction  to, any Person other than NGUSA.  NGUSA shall have no obligation to
make an offer to purchase  such  Transmission  Facilities  and such  GridAmerica
Company  shall have no  obligation  to  consider,  negotiate  or accept any such
offer,  if made.  If NGUSA and the  GridAmerica  Company do not agree to such an
acquisition  by NGUSA or an NGUSA  Affiliate  during  such 60-day  period,  such
GridAmerica  Company shall have one (1) year thereafter to enter into definitive
agreements in respect of any Transfer of such Transmission  Facilities.  If such
GridAmerica Company has not

                                       23

<PAGE>

so entered into definitive  agreements,  during such one (1) year period,  NGUSA
shall  have the  rights  provided  under this  Section  4.1 with  respect to any
further Exclusivity Transaction.

                                    ARTICLE V

                         PUT OF TRANSMISSION FACILITIES

     Section 5.1 Put Right in Favor of GridAmerica  Companies.  Each GridAmerica
Company  shall  have the  right,  but not the  obligation  (a "Put  Right"),  to
contribute  to  the  Company   GridAmerica   Transmission   Facilities  of  such
GridAmerica Company in exchange for Units, and to the extent provided in Section
3.2(a)(2),  for cash,  with an  aggregate  Fair  Market  Value equal to the Fair
Market Value of the Transmission  Facilities being so contributed (determined as
of the date set forth below) on the following terms and subject to the following
conditions:

     (a)  A GridAmerica  Company  desiring to exercise its Put Right (a "Putting
GridAmerica  Company")  shall do so by providing at least 270 days prior written
notice (the "Put Notice") to NGUSA,  the Managing  Member,  the Company and each
other  GridAmerica  Company.   Such  notice  shall  designate  the  Transmission
Facilities which the Putting  GridAmerica  Company proposes to contribute to the
Company  through  exercise  of its  Put  Right  (the  "Contributed  Transmission
Facilities").  No Put  Notice may be given,  and no Put Right may be  exercised,
before the date eighteen (18) months after the  Transmission  Service Date.  The
exercise  by a Putting  GridAmerica  Company  of a Put  Right  (i) shall  become
irrevocable on the thirtieth  (30th) day after  determination  of the Unit Price
and the Fair Market Value of the Contributed Transmission Facilities and (ii) in
the  case  of the  exercise  of a Put  Right  following  an IPO  Notice,  may be
conditioned  upon the successful  completion of the IPO to which such IPO Notice
relates.

     (b)  Promptly  upon  exercise  by a Putting  GridAmerica  Company  of a Put
Right, the Managing Member and such Putting  GridAmerica Company shall negotiate
the terms and conditions upon which the Contributed Transmission Facilities will
be contributed to the Company,  including the scope of any  representations  and
warranties  that the  Putting  GridAmerica  Company  will make in respect of the
Contributed   Transmission   Facilities,   the  need  for  any   third-party  or
Governmental   consents   therefor,   and  the  scope  and  limitations  on  any
indemnification  obligations in respect thereof. In addition, if required by the
Public Utility  Holding Company Act of 1935 and the rules of the SEC promulgated
thereunder, the obligation of such Putting GridAmerica Company to contribute its
Contributed Transmission Facilities to the Company in exchange for Units and the
obligation  of the Company to issue  Units in  consideration  therefor  shall be
expressly  conditioned on the receipt of all required  consents and approvals of
the SEC under such Act. Such terms and conditions shall be set forth in an asset
contribution  agreement  (the "Put  Agreement")  which  shall be executed by the
Putting GridAmerica  Company and the Company.  Although the terms and conditions
of each Put Agreement are subject to  negotiation  between the parties  thereto,
the specific  terms and  conditions  of each Put  Agreement  shall,  pursuant to
Section 5.1(c), be taken into consideration for purposes of determining the Fair
Market Value of the Contributed Transmission Facilities. The Putting GridAmerica
Company shall be required to convey the Contributed Transmission Facilities free
and  clear  of  all  Encumbrances  securing  any  indebtedness  of  the  Putting

                                       24

<PAGE>

GridAmerica  Company or any  Affiliate  thereof,  except as the  Company and the
Putting GridAmerica Company may otherwise agree in the Put Agreement.

     (c)  Upon  completion of the  negotiations of the Put Agreement (or earlier
if the Company and the Putting  GridAmerica Company agree), the Company and such
Putting  GridAmerica Company immediately shall proceed to determine the per Unit
Fair Market  Value of the  outstanding  Units  (such per Unit Fair Market  Value
being  referred  to as the  "Unit  Price")  and the  Fair  Market  Value  of the
Contributed Transmission  Facilities,  both to be determined as of a common date
to be agreed to by the Company and such Putting GridAmerica  Company. The number
of Units that the Putting  GridAmerica Company shall be entitled to receive upon
exercise  of its Put  Right  assuming  that no Cash  Option  is  exercised  (the
"Pro-forma  Number of Put Units") shall be equal to the Fair Market Value of the
Contributed  Transmission  Facilities  divided by the Unit Price. In determining
the Fair Market Value of the Contributed Transmission Facilities,  the terms and
conditions  of  the  proposed  Put   Agreement,   including  the  scope  of  any
representations  and  warranties   contained  therein,  the  scope  of  and  any
limitations on any indemnity  obligations,  the presence of any  Encumbrances on
the Contributed  Transmission Facilities and matters described in Section 5.1(e)
shall be expressly  taken into account.  In  determining  the Unit Price and the
Pro-forma  Number of Put  Units,  the  Putting  GridAmerica  Company  shall have
diligence  rights  with  respect  to the  Company,  and the  Company  shall have
diligence rights with respect to the Contributed  Transmission Assets, customary
for merger and acquisition  transactions;  provided,  however,  that neither the
Putting  GridAmerica  Company nor the  Company  shall be  obligated  to disclose
information  subject to confidentiality  provisions in favor of third parties or
competitively  sensitive  commercial  information  of  a  kind  not  customarily
disclosed  in  due   diligence  in  connection   with  merger  and   acquisition
transactions.  The  Company  and  the  Putting  GridAmerica  Company  shall  use
commercially   reasonable   efforts  to  obtain  a  waiver  of  any   applicable
confidentiality  restrictions,  and in any event,  to the extent  feasible,  all
information described in the proviso to the immediately preceding sentence which
is not disclosed shall be disclosed in summary or redacted form.

     (d)  The Putting  GridAmerica  Company shall have the right to withdraw its
Put Notice  without  prejudice to its right to issue a subsequent Put Notice (i)
within thirty (30) days after  determination of the Unit Price and the Pro-forma
Number of Put Units or (ii) in the case of the exercise of a Put Right following
an IPO  Notice,  if  such  IPO is not  successfully  completed.  In the  case of
withdrawal of a Put Notice pursuant to clause (i) of the  immediately  preceding
sentence,  the Putting  GridAmerica  Company  shall,  within thirty (30) days of
receipt of a written  request  therefor from the Company,  reimburse the Company
for its reasonable,  out-of-pocket costs and expenses incurred in respect of the
withdrawn Put Notice, including,  without limitation,  the costs and expenses of
the Company's  Interested  Party  Valuation Firm and the Company's  share of the
costs and expenses of any Neutral  Valuation Firm. Any request for reimbursement
pursuant to this Section  5.1(d) shall itemize in reasonable  detail all amounts
for which reimbursement is requested,  and any disputes as to such amounts shall
be resolved by the dispute resolution procedures set forth in Article XII.

     (e)  Notwithstanding  anything contained in this Agreement to the contrary,
no Putting GridAmerica Company shall have any right to exercise a Put Right with
respect  to, and the Company  shall have no  obligation  to accept,  Contributed
Transmission Facilities which do not meet the following requirements:

                                       25

<PAGE>

          (1)  The Contributed  Transmission Facilities either constitute all of
     the Transmission  Facilities of the Putting  GridAmerica Company over which
     the  Company  exercises   Functional  Control  pursuant  to  the  Operation
     Agreement or constitute an Operational Segment thereof.

          (2)  The  Contributed  Transmission  Facilities  taken as a whole (and
     taking into account any  contractual  arrangements  between the Company and
     the  Putting  GridAmerica  Company),  include all of the  facilities,  real
     estate interests (including easements, rights of way and rights of access),
     equipment,  contract rights,  intellectual property rights and other assets
     (including  access to  services  and  personnel)  reasonably  necessary  to
     operate the  Contributed  Transmission  Facilities as part of an integrated
     system with the other GridAmerica Transmission  Facilities.  In furtherance
     thereof, the Company and the Putting GridAmerica Company shall negotiate in
     good  faith  as  to  (i)  the  identity  of  the  Contributed  Transmission
     Facilities,  (ii) the terms on which any necessary  services  provided on a
     contractual  basis  will be made  available,  and (iii) the  allocation  of
     employees  of the  Putting  GridAmerica  Company  and/or the  provision  of
     employees on a contract basis. In determining the assets and services to be
     included in the Contributed Transmission Facilities, the long term business
     and operational  plans of the Company and the Putting  GridAmerica  Company
     and the cost of providing  replacement  facilities  and  services  shall be
     considered.  All  services to be provided by contract  shall be provided on
     commercially  reasonable terms, but the Putting  GridAmerica  Company shall
     not be obligated to provide any services at less than cost.

     (f)  If the Company and the Putting GridAmerica Company are unable to agree
as to any matters relating to the exercise by a Putting  GridAmerica  Company of
its Put Right,  including,  without  limitation,  the  Contributed  Transmission
Facilities,  the terms of the Put  Agreement and the terms on which any services
are to be  provided,  such  matters  shall be  resolved  pursuant to the dispute
resolution  procedures  set  out  in  Article  XII;  provided,   however,  that,
notwithstanding  any  determination  of such matters  pursuant to Article XII, a
Putting GridAmerica Company may, even though the Unit Price and Pro-forma Number
of Put Units have not been  determined,  withdraw  its Put  Notice,  pursuant to
Section 5.1(d).

     (g)  All Put  Rights  shall  terminate  at 5:00  p.m.  New York time on the
earlier of (i) the fourth (4th)  anniversary of the Transmission  Services Date,
or (ii) if the IPO Notice is given  before the fourth (4th)  anniversary  of the
Transmission Service Date, the date which is 300 days after the date of such IPO
Notice;  provided,  however, that Put Rights shall be continued after the fourth
(4th) anniversary of the Transmission Services Date with respect to Transmission
Facilities  as to which a Put  Notice  has been  given on or prior to the fourth
(4th)  anniversary  of the  Transmission  Services  Date.  No Put  Right  may be
exercised unless, at the time of exercise,  the Putting  GridAmerica  Company is
party to the Operation Agreement.

     Section 5.2 Put Rights of NGUSA Affiliates. If any NGUSA Affiliate acquires
GridAmerica  Transmission  Facilities  or, while the Initial  Member is Managing
Member,  acquires  non-GridAmerica  Transmission Facilities which are capable of
being  operated  as part of a single  integrated  transmission  system  with the
GridAmerica Transmission Facilities, such NGUSA Affiliate shall have a Put Right
with respect to such Transmission  Facilities,  which Put Right shall be subject
to all of the terms and conditions of Article V.

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<PAGE>

     Section 5.3 Put Closing.  The closing of the  contribution  of  Contributed
Transmission  Facilities  pursuant  to the  exercise  of a Put Right  (each such
closing, a "Put Closing"),  shall occur on a Business Day, shall take place at a
location mutually agreed by the Putting  GridAmerica Company and the Company and
shall be  consistent  with the  requirements  set  forth in the  applicable  Put
Agreement,  including any conditions  precedent to closing contained in such Put
Agreement. No Put Closing shall occur less than 270 days after the date on which
the Put Right in respect  thereof  was  exercised,  unless the  Company  and the
Putting  GridAmerica  Company  otherwise agree. The deliveries by the parties at
the Put Closing  and the  conditions  precedent  to the Put  Closing,  including
necessary consents and approvals of third parties and Governmental  Authorities,
shall be set forth in the applicable Put Agreement; provided, however, that at a
minimum:

     (a)  At each Put Closing, the Putting GridAmerica Company shall execute and
deliver,  or cause to be executed and delivered,  to the Company,  the following
documents and agreements:

          (1)  assignments,  bills of sale,  warranty deeds, and other documents
     assigning the applicable  Transmission  Facilities to the Company, free and
     clear  of  all  Encumbrances  securing  any  indebtedness  of  the  Putting
     GridAmerica Company or any Affiliate thereof, except as the Company and the
     Putting GridAmerica Company may otherwise agree in the Put Agreement; and

          (2)  unless  such  Putting  GridAmerica  Company  or its  designee  is
     already a Member of the Company,  such  documentation as may be required by
     the LLC Agreement to become a Member of the Company.

     (b)  At  each  Put  Closing,  the  Company  shall  deliver  to the  Putting
GridAmerica Company the following documents:

          (1)  an assumption agreement;

          (2)  evidence  of  appropriate  entry of the Units to be issued to the
     Putting  GridAmerica  Company upon exercise on the Company's  Unit Registry
     (as defined in the LLC Agreement); and

          (3)  a Favorable Opinion of Counsel to the effect that such Units have
     been  duly  and  validly  issued  by the  Company  and are  fully  paid and
     non-assessable.

     Section 5.4 Put Units  Unregistered.  No Units delivered at the Put Closing
will have been registered under the Securities Act or under any state securities
laws,  and such units will be offered  and sold in reliance on federal and state
exemptions for transactions not involving a public offering of securities.

     Section 5.5 Put Rights Transferable. The Put Rights provided in Section 5.1
shall be freely  assignable to any Person that acquires all, or any  Operational
Segment of, GridAmerica Transmission Facilities from any GridAmerica Company, so
long  as  such  acquiring  party  executes  this  Agreement  and  the  Operation
Agreement.

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<PAGE>

     Section 5.6 Publicly Traded  Partnership.  Notwithstanding  anything to the
contrary  herein,  no issuance of Units may be made to any Person if as a result
of such  transfer  the Company  would have more then 100 Members  determined  in
accordance with Treasury Regulation Section 1.7704-1(h)(1) and (3).

     Section 5.7 Certain Resignation and Withdrawal Rights.

     (a)  Rights  Upon  Certain  Exercises  of Put  Rights.  If the first of the
GridAmerica  Companies and any NGUSA Affiliates to exercise a Put Right delivers
its Put  Notice  prior to April 30,  2005,  the  Initial  Member  may  resign as
Managing  Member (and upon the  effective  date of such  resignation,  the NGUSA
Management Term shall expire),  and each  GridAmerica  Company may withdraw from
the GridAmerica ITC and terminate its participation under this Agreement and the
Operation  Agreement (as provided in Section 5.1(a) of the Operation  Agreement)
by providing  all of the other Parties  written  notice of such  resignation  or
withdrawal within thirty (30) days of receipt of such Put Notice.

     (b)  Rights Upon Failure to Exercise Put Rights.  If no Put Notice has been
received  prior to March 31,  2005,  the  Initial  Member may resign as Managing
Member (and upon the effective date of such  resignation,  the NGUSA  Management
Term shall expire),  and each GridAmerica  Company may withdraw from GridAmerica
ITC and  terminate  its  participation  under this  Agreement  and the Operation
Agreement  (as  provided  in  Section  5.1(b)  of the  Operation  Agreement)  by
providing  all of the  other  Parties  written  notice  of such  resignation  or
withdrawal within the thirtieth (30th) month following the Effective Date.

     (c)  Effect of  Resignation or  Withdrawal.  Any  resignation or withdrawal
pursuant to this  Section 5.7 shall be effective on the first day of the seventh
month  following  the month in which  notice  thereof is  delivered  pursuant to
Section 13.1.  Upon receipt of any notice of resignation or withdrawal  pursuant
to this Section 5.7, the other Parties shall have the right,  exercisable within
thirty (30) days of receipt of such notice,  to resign or withdraw,  as the case
may be. Without the prior written  consent of NGUSA,  no part of the GridAmerica
Transmission  Facilities  of any  GridAmerica  Company that  withdraws  from the
GridAmerica  ITC shall be  included  in or be managed  by an ITC that  exercises
functions similar in scope to the function exercised by the Company with respect
to the GridAmerica Transmission Facilities (determined after taking into account
the functions  exercised by the Midwest ISO under the MISO ITC  Agreement) for a
period of one (1) year after the effective  date of such  GridAmerica  Company's
withdrawal,  provided,  however, that the foregoing prohibition shall not apply,
if the Initial  Member  exercised  its  resignation  rights  pursuant to Section
5.7(a)  or (b)  prior to the date of any such  withdrawal.  Notwithstanding  the
foregoing,  unless the Commission shall otherwise approve,  no withdrawal by any
GridAmerica  Company from  GridAmerica ITC pursuant to this Section 5.7 shall be
or become effective  unless and until such GridAmerica  Company becomes a member
of the Midwest ISO as contemplated by Section 2.3 of the MISO ITC Agreement.

                                       28

<PAGE>

                                   ARTICLE VI

                               REGISTRATION RIGHTS

                     Section 6.1 Demand Registration Rights.

     (a)  Demand  for IPO.  At any  time  after  the  third  anniversary  of the
Transmission  Service  Date,  NGUSA (on behalf of itself  and/or any  Affiliated
Investor) or GridAmerica  Companies holding not less than 30% of the outstanding
Units shall be entitled to request in writing,  that the Company effect the Unit
Exchange and effect the  registration  under the  Securities  Act of Registrable
Securities of  GridAmerica  HoldCo in accordance  with this Section 6.1 (an "IPO
Demand  Registration").  Any such request for an IPO Demand  Registration  shall
specify the Members desiring to participate  therein,  the amount of Registrable
Securities  proposed to be sold by each such Member,  and the intended method of
disposition  thereof.  Upon receiving a request for an IPO Demand  Registration,
the  Company  shall  cause  GridAmerica  HoldCo to  prepare  and file as soon as
practicable the documents  necessary to effect such IPO Demand  Registration and
shall use  commercially  reasonable  efforts  to cause  the same to be  declared
effective by the SEC as soon as  practicable.  Notwithstanding  anything in this
Section 6.1 to the contrary,  (i) the Company shall not be obligated to effect a
registration  under this  Section  6.1(a)  unless it is advised by a  nationally
recognized investment banking firm that the anticipated aggregate gross offering
price with respect thereto is expected to be equal to or exceed $250,000,000, or
despite  commercially  reasonable  efforts  to do so,  the  Company is unable to
obtain  the  listing  of the  Shares to be sold in the IPO on the New York Stock
Exchange or another comparable  national securities exchange on which securities
of major U.S.  issuers  engaged in the utility  industry  are  traded,  (ii) the
Company may delay the Unit Exchange and an IPO Demand Registration to a date not
later  than the fifth  anniversary  of the  Transmission  Service  Date if it is
advised by a nationally recognized investment banking firm that such delay would
be in the best interest of the Company and would  contribute to a successful IPO
and (iii) if all the Persons requesting the IPO Demand Registration determine to
attempt to qualify the Unit  Exchange  as a  tax-deferred  exchange  pursuant to
Section 351 of the Code, the Company and GridAmerica HoldCo may limit the number
of Shares to be sold by GridAmerica  Companies  participating  in the IPO if the
Company   determines   such   limitation   to  be  necessary  to  preserve  such
tax-treatment of the Unit Exchange.

     (b)  IPO Notice.  Upon receipt of an IPO Demand  Registration  request or a
determination  by the  Company  to effect an IPO,  the  Company  promptly  shall
provide NGUSA and all  GridAmerica  Companies with written notice of the request
or  determination  (the "IPO Notice") at least three hundred (300) days prior to
the filing of any  Registration  Statement  in respect of the IPO, and each such
notice shall inform NGUSA and each GridAmerica  Company that all outstanding Put
Rights will expire three hundred (300) days after the date of such notice unless
the IPO is not successfully completed.

     (c)  Demand Registration After IPO.

          (1)  At any time after the Initial Public  Offering,  NGUSA (on behalf
     of itself and/or any Affiliated Investor) and GridAmerica Companies holding
     among them not less than 15% of the aggregate Shares and Units  outstanding
     shall be entitled to

                                       29

<PAGE>

request in writing that  GridAmerica  HoldCo effect the  registration  under the
Securities  Act of  Registrable  Securities in accordance  with this Section 6.1
(each,  a  "Secondary  Demand  Registration").  Any such request for a Secondary
Demand  Registration  shall  specify  the  GridAmerica  Companies  and/or  NGUSA
Affiliates desiring to participate therein, the amount of Registrable Securities
proposed to be sold by each such Member,  and the intended method of disposition
thereof.   Upon  receiving  a  request  for  a  Secondary  Demand  Registration,
GridAmerica  HoldCo  shall  prepare  and file  within  forty-five  (45) days the
documents  necessary  to  effect  Secondary  Demand  Registration  and  will use
commercially  reasonable  efforts to cause the same to be declared  effective by
the SEC as soon  thereafter  as  practicable.  Notwithstanding  anything in this
Section 6.1 to the contrary, GridAmerica HoldCo shall not be obligated to effect
a Secondary Demand Registration unless it is advised by a nationally  recognized
investment banking firm that the anticipated aggregate gross offering price with
respect  thereto  would  equal or exceed  $75,000,000.  Any such  request  for a
Secondary  Demand  Registration  may be a request for a shelf  registration,  if
GridAmerica  HoldCo is eligible to use a shelf  registration at the time of such
request.

          (2)  Promptly  after  receipt  of a  request  for a  Secondary  Demand
     Registration,  GridAmerica  HoldCo shall provide NGUSA and each GridAmerica
     Company with written notice of such demand.

     (d)  Limitation on Demand  Registrations.  Notwithstanding  anything to the
contrary set forth in Section 6.1(c),  GridAmerica HoldCo shall not be obligated
to file a Registration Statement with respect to a Secondary Demand Registration
upon a request by a Person  under  Section  6.1(c),  if three  Secondary  Demand
Registrations  have become  effective  as specified  in Section  6.1(f)  (unless
GridAmerica  HoldCo is eligible to register the  Registrable  Securities on Form
S-3, in which case NGUSA and the  GridAmerica  Companies shall have an unlimited
right to require  such  registrations).  If, in  connection  with any  Secondary
Demand  Registration,  the Shares to be included by any Selling  Shareholder  in
such registration are reduced by the Approved  Underwriter by one-third (1/3) or
more of the amount of Shares such Selling  Shareholders  requested to include in
such registration, such registration shall not constitute a Demand Registration.

     (e)  Participation in Demand.  Each GridAmerica Company and each Affiliated
Investor  shall  have  thirty 30 days  after the  receipt  of notice of a Demand
Registration  to  elect  to  participate  in  the   registration  as  a  Selling
Shareholder by providing the Company and GridAmerica  HoldCo with written notice
of such  election,  which notice shall  indicate the number of Shares which such
Person  desires  to  include in the  registration.  The right of such  Person to
participate in the registration shall be subject to Section 6.3.

     (f)  Effective Demand  Registration.  A registration shall not constitute a
Demand  Registration  until the Registration  Statement has become effective and
remains continuously effective for the lesser of (i) the period during which all
Registrable  Securities  registered in the Demand Registration are sold and (ii)
one hundred eighty (180) days; provided,  however, that a registration shall not
constitute  a Demand  Registration  if (x) after such  Demand  Registration  has
become  effective,  such registration or the related offer, sale or distribution
of  Registrable  Securities  thereunder  is  interfered  with by any stop order,
injunction  or other  order  or

                                       30

<PAGE>

requirement  of the SEC or  other  Governmental  Authority  for any  reason  not
attributable to any Selling  Shareholder and such interference is not thereafter
eliminated  or (y) the  conditions  to  closing  specified  in the  underwriting
agreement,  if any, entered into in connection with such Demand Registration are
not  satisfied  or  waived,  other  than by reason of a failure  by any  Selling
Shareholder;  provided,  further,  that if a  registration  constitutes a Demand
Registration,  notwithstanding  the  operation  of  clause  (x) of this  Section
6.1(f),  then the period of effectiveness  provided for in the first sentence of
this  Section  6.1(f)  shall be  extended  for the same amount of time such stop
order, injunction or other order or requirement existed.

     (g)  Underwriting   Procedures.   If  the  Selling  Shareholders  demanding
registration so elect, the offering of Registrable  Securities pursuant to up to
a  maximum  of  three  Demand  Registrations  shall  be in  the  form  of a firm
commitment  underwritten  offering, and the managing underwriter or underwriters
selected  for  such  offering  shall be the  Approved  Underwriter  selected  in
accordance with Section 6.1(h). With respect to any firm commitment underwritten
offering,  GridAmerica  HoldCo  shall  enter  into a  reasonable  and  customary
underwriting   agreement  with  the  Approved   Underwriter.   If  the  Approved
Underwriter  advises  GridAmerica  HoldCo in  writing  that in its  opinion  the
aggregate  amount  of  Shares  requested  to be  included  in such  offering  is
sufficiently  large to have a  material  adverse  effect on the  success of such
offering,  including the price,  then  GridAmerica  HoldCo shall include in such
registration  only the  aggregate  amount of Shares  that in the  opinion of the
Approved  Underwriter  may be sold without any such material  adverse effect and
such Shares shall be allocated pro rata among the Selling Shareholders demanding
such registration on the basis of the number of Registrable  Shares requested to
be  included  in  such  registration  by  each  such  Selling  Shareholder,  and
thereafter  to the Company,  and finally to the holders of other  incidental  or
piggy-back registration rights, if any.

     (h)  Selection of Underwriters.  If any Demand  Registration is in the form
of an underwritten  offering,  the Selling  Shareholders shall select and engage
one or more  investment  banking  firms  of  national  reputation  to act as the
managing   underwriters   of   the   offering   (collectively,   the   "Approved
Underwriter");  provided,  however,  that the Approved Underwriter shall, in any
case, be acceptable to GridAmerica HoldCo in its reasonable judgment.

     Section 6.2 Incidental Registration.  If GridAmerica HoldCo shall determine
to register any Shares,  or any securities  convertible  into or exchangeable or
exercisable  for  Shares,  for  its  own  account  or  for  the  account  of any
stockholder (other than a registration on Forms S-4 or S-8 or any replacement or
successor form thereof),  any  GridAmerica  Company or NGUSA  Affiliate shall be
entitled to include  Registrable  Securities in such  registration  (and related
underwritten offering, if any) (each, an "Incidental Registration") on the terms
and conditions set forth in this Section 6.2.

     (a)  GridAmerica   HoldCo  promptly  shall  give  written  notice  of  such
determination to register such securities to NGUSA and each GridAmerica Company,
and NGUSA (on behalf of itself  and any NGUSA  Affiliate)  and each  GridAmerica
Company shall have the right to request,  by written notice given to GridAmerica
HoldCo  within  thirty  (30)  days of the  receipt  by them  of such  notice  of
determination, that a specific number of Registrable Securities held by an NGUSA
and/or an NGUSA  Affiliate  or such  GridAmerica  Company  be  included  in such
Registration Statement.

                                       31

<PAGE>

     (b)  If the proposed registration relates to an underwritten  offering, the
notice  required  by  Section  6.2(a)  shall  specify  the name of the  managing
underwriter for such offering, and if the proposed registration would constitute
an IPO,  the notice  required by Section  6.2(a)  shall comply with the terms of
Section 6.1(b).

     (c)  If the proposed registration relates to an underwritten  offering, any
Selling Shareholders  desiring to participate in such offering must (i) sell all
or a portion of its  Registrable  Securities  on the same basis  provided in the
underwriting  arrangements  approved by GridAmerica HoldCo and (ii) complete and
execute all  questionnaires,  powers of attorney,  underwriting  agreements  and
other  documents  on  the  same  basis  as  other  similarly   situated  Selling
Shareholders (or, if there are no other Selling Shareholders,  on the same basis
as other selling  stockholders or as would be customary in a transaction of this
type) reasonably  required under the terms of such underwriting  arrangements or
by the SEC.

     (d)  GridAmerica  HoldCo  shall have the right to terminate or withdraw any
registration statement filing under this Section 6.2 prior to the effective date
thereof  for any reason  without  liability  to any Member as a result  thereof,
whether or not such Member has elected to become a Selling Shareholder.  In such
event,  GridAmerica HoldCo or any Selling  Shareholder may elect to continue the
registration;  provided,  however, that if such termination or withdrawal occurs
prior to the filing of the initial registration  statement with the SEC, but not
otherwise,   then  such  election  shall  constitute  a  request  for  a  Demand
Registration and shall be subject to the limits on Demand Registration  requests
set forth in this Agreement.

     Section 6.3 Cutback; Withdrawal Rights.

     (a)  If the managing  underwriter for the  underwritten  offering under the
proposed registration to be made by GridAmerica HoldCo determines that inclusion
of all or any portion of the Shares  intended  to be  included in such  offering
would adversely  affect the ability of the underwriter for such offering to sell
all of the  securities  requested to be included for sale or the price per share
in such offering, the number of Shares that may be included in such registration
GridAmerica  HoldCo will be  obligated to include in such  offering,  as to each
Person  proposing to sell Shares in such offering,  only a portion of the Shares
such  Person  has  requested  to be  registered  equal to the ratio  which  such
Person's  requested  Shares bears to the total number of Shares  requested to be
included in such  registration  statement by all Persons (other than GridAmerica
HoldCo),  who have requested that their Shares be included in such registration,
it being  understood  that the  securities  to be included in such  registration
shall be allocated first to GridAmerica HoldCo and thereafter in accordance with
the  foregoing  ratio;  provided,  however,  that,  in  the  case  of  a  Demand
Registration, prior to any reduction in the number of Shares to be registered by
the Selling Shareholders demanding the Demand Registration, the aggregate amount
of Shares to be included in the offering by any other Selling  Shareholder shall
be reduced in its entirety.

     (b)  Each  Selling  Shareholder  shall  have  the  right  to  withdraw  its
Registrable  Securities from the Registration Statement at any time prior to the
effective date thereof, but if the same relates to an underwritten  offering and
the initial filing  thereof has been made, it may only withdraw its  Registrable
Securities  during  the time  period  and on  terms  deemed  appropriate  by the
underwriters for such underwritten offering.

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<PAGE>

     Section 6.4 Blockage Periods.  Notwithstanding  any other provision of this
Agreement,  GridAmerica  HoldCo  shall not be  obligated  to file (but  shall be
obligated to continue  the  preparation  of) any  Registration  Statement  under
Section 6.1 at any time that  GridAmerica  HoldCo or any of its subsidiaries are
engaged in confidential  negotiations or other confidential business activities,
disclosure of which would be required in such registration  statement (but would
not be required if such registration statement were not filed), and the Board of
Directors of  GridAmerica  HoldCo  determines in good faith (after  consultation
with  the  Selling  Shareholders  participating  in  such  offering)  that  such
disclosure  would be materially  detrimental to the Company and its Unit holders
or would have a material adverse effect on any such confidential negotiations or
other confidential  business activities.  GridAmerica HoldCo may decline to file
any Registration  Statement for this reason only once in any 12-month period and
only for a  maximum  period of 90 days at any one time.  If  GridAmerica  HoldCo
declines to file any  Registration  Statement  pursuant to this  Section 6.4, it
shall  notify the  affected  Selling  Shareholders  (the  "Clear  Notification")
promptly  after the  circumstances  preventing  the  filing of the  Registration
Statement  under Section 6.1 no longer  apply.  For a period of 20 Business Days
following  receipt of a Clear  Notification  (the "Request  Period") the Selling
Shareholders shall have the right to request a Demand  Registration  pursuant to
Section  6.1(a) or 6.1(c).  GridAmerica  HoldCo shall not be permitted to file a
registration  statement to register Shares for offering by GridAmerica HoldCo or
any  stockholder  other than a Selling  Shareholder  (except on Form S-4 or Form
S-8) until:

     (a)  If the Selling  Shareholders have not requested a Demand  Registration
within the Request Period, the day after the end of the Request Period, and

     (b)  If the  Selling  Shareholders  have  requested  a Demand  Registration
within  the  Request  Period,  completion  of the  offering  under  such  Demand
Registration  pursuant to Section 6.1(f);  provided,  however,  that GridAmerica
HoldCo may participate  simultaneously in such Demand  Registration  pursuant to
Section 6.1(g).

     Section 6.5  Restrictions  on Public Sale. If  Registrable  Securities  are
included (in whole or in part) in a Registration  Statement filed by GridAmerica
HoldCo  under  Section 6.1 for sale in an  underwritten  offering,  each Selling
Shareholder agrees, if requested by the managing underwriter(s) of such offering
and if each other Person  participating in such offering also so agrees,  not to
sell,  make any short  sale of,  loan,  grant any option  for the  purchase  of,
dispose of or effect any public sale or distribution of common equity securities
of the same series and class as (or securities  exchangeable  or exercisable for
or  convertible  into common equity  securities of the same series and class as)
its  Registrable  Securities,  including  a sale  pursuant to Rule 144 under the
Securities Act (except as part of such  underwritten  registration),  during the
five (5) day period  prior to, and during the ninety (90) day period  following,
any such  registration  (or  during  such  shorter  period  as is  requested  or
consented to by the managing  underwriter(s)  with respect to GridAmerica HoldCo
or any other  holder of common  stock of  GridAmerica  HoldCo)  beginning on the
closing date of such  underwritten  offering,  to the extent timely  notified in
writing by GridAmerica HoldCo or the managing underwriter(s).

     Section  6.6  Registration  Procedures.   In  connection  with  GridAmerica
HoldCo's  registration  obligations  pursuant  to  Sections  6.1 and 6.2 hereof,
GridAmerica HoldCo promptly will prepare such registration statement and use its
commercially  reasonable  efforts to

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<PAGE>

cause to be effective such  registration  to permit the sale of the  Registrable
Securities  covered thereby in accordance with the intended method or methods of
disposition   thereof,   and  pursuant  thereto,   GridAmerica  HoldCo  will  as
expeditiously as possible:

     (a)  with  respect to  registrations  made  pursuant  to Section  6.1 only,
prepare  and file with the SEC a  Registration  Statement  with  respect to such
Registrable Securities and use its commercially reasonable efforts to cause such
Registration Statement to become effective as soon as practicable, and, upon the
request of the Selling Shareholders,  keep such Registration Statement effective
for up to one hundred  twenty  (120) days or such lesser  period as is necessary
for  the  underwriters  in an  underwritten  offering  to sell  the  Registrable
Securities  registered  thereby,  provided,  however,  that,  before  filing any
Registration  Statement or Prospectus or any amendments or supplements  thereto,
the Company will furnish to the Selling Shareholders and their counsel for their
review and comments  copies of all such documents  proposed to be filed at least
five (5) days prior  thereto  and the  Company  shall not file any  registration
statement  or  amendment  or  post-effective  amendment  or  supplement  to such
registration  statement or Prospectus used in connection therewith to which such
counsel  shall have  reasonably  objected  in writing on the  grounds  that such
amendment  or  supplement  does  not  comply  (explaining  why) in all  material
respects  with  the  requirements  of the  Securities  Act or of  the  rules  or
regulations thereunder;

     (b)  prepare  and  file  with  the  SEC  such  amendments,   post-effective
amendments and supplements to the  Registration  Statement and the Prospectus as
may be necessary to comply with the  provisions  of the  Securities  Act and the
rules  and  regulations  thereunder  with  respect  to  the  disposition  of all
securities covered by such Registration Statement;

     (c)  promptly  notify the Selling  Shareholders  (i) when the Prospectus or
any Prospectus supplement or post-effective  amendment has been filed, and, with
respect to the Registration Statement or any post-effective  amendment, when the
same has become  effective,  (ii) of any  request by the SEC for  amendments  or
supplements  to the  Registration  Statement or the Prospectus or for additional
information,  (iii) of the issuance by the SEC of any stop order  suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose,  (iv) of the receipt by GridAmerica HoldCo of any notification
with  respect  to  the  suspension  of  the  qualification  of  the  Registrable
Securities for sale in any  jurisdiction or the initiation or threatening of any
proceeding  for such  purpose and (v) of the  happening of any event which makes
any statement made in the Registration Statement, the Prospectus or any document
incorporated  therein by  reference  untrue or which  requires the making of any
changes  in  the  Registration   Statement,   the  Prospectus  or  any  document
incorporated  therein by reference so that such  documents  will not contain any
untrue  statement of a material fact or omit to state any material fact required
to be stated  therein or necessary to make the statements  therein,  in light of
the circumstances under which they were made, not misleading;

     (d)  make commercially  reasonable  efforts to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement at the earliest
possible time;

     (e)  if requested by the Approved Underwriter or the Selling  Shareholders,
promptly incorporate in a Prospectus supplement or post-effective amendment such
information

                                       34

<PAGE>

as the Approved Underwriter or such Selling  Shareholders  reasonably request to
be included  therein as required by  applicable  Law and (ii) make all  required
filings of such Prospectus supplement or such post-effective  amendment promptly
after  GridAmerica  HoldCo  has  received  notification  of  the  matters  to be
incorporated in such  Prospectus  supplement or such  post-effective  amendment;
provided,  however, that GridAmerica HoldCo shall not be required to take any of
the actions of this Section 6.6(e) which it determines are not, on the advice of
counsel for GridAmerica HoldCo, required under applicable Law;

     (f)  furnish to each Selling Shareholder, without charge, at least one copy
of  the  Registration  Statement  and  any  post-effective   amendment  thereto,
including financial statements and schedules, all documents incorporated therein
by reference and all exhibits (including those incorporated by reference);

     (g)  deliver to each Selling  Shareholder,  without charge, such reasonable
number of conformed copies of the Registration Statement (and any post-effective
amendment  thereto) and such number of copies of the Prospectus  (including each
preliminary  prospectus)  and any  amendment  or  supplement  thereto  (and  any
documents  incorporated  by reference  therein) as such Selling  Shareholder may
reasonably  request,  all in  full  conformity  with  the  Securities  Act;  and
GridAmerica  HoldCo  consents to the use of the  Prospectus  or any amendment or
supplement thereto by such Selling  Shareholder in connection with the offer and
sale of the Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;

     (h)  prior  to  any  offering  of  Registrable   Securities  covered  by  a
Registration  Statement,  register  or qualify or  cooperate  with each  Selling
Shareholder  in  connection  with  the  registration  or  qualification  of such
Registrable  Securities for offer and sale under the securities or blue sky laws
of such jurisdictions as the managing underwriter,  if applicable,  or each such
Selling Shareholder reasonably requests, and use commercially reasonable efforts
to keep  each  such  registration  or  qualification  (or  exemption  therefrom)
effective,  including through new filings, or amendments or renewals, during the
period such Registration  Statement is required to be kept effective pursuant to
the terms of this Agreement;  and do any and all other acts or things  necessary
or  advisable to enable the  disposition  in all such  jurisdictions  reasonably
requested  by  such  Selling  Shareholder;  provided,  however,  that  under  no
circumstances shall GridAmerica HoldCo be required in connection therewith or as
a condition thereof to qualify to do business,  to become subject to taxation or
to  file a  general  consent  to  service  of  process  in any  such  states  or
jurisdictions;

     (i)  cooperate with the Selling  Shareholders and the managing  underwriter
or   underwriters   to  facilitate  the  timely   preparation  and  delivery  of
certificates representing Registrable Securities to be sold, free of any and all
restrictive  legends,   such  certificates  to  be  in  such  denominations  and
registered in such names as the managing underwriter or underwriters, if any, or
such  Selling  Shareholders  may request  and make  available  to the  Company's
transfer agent prior to the restrictions of the Registrable  Securities a supply
of such certificates;

     (j)  upon the  occurrence of any event  contemplated  by Section  6.6(c)(v)
above,  prepare a supplement  or  post-effective  amendment to the  Registration
Statement or the Prospectus or any document incorporated therein by reference or
file any  other  required

                                       35

<PAGE>

document so that, as thereafter  delivered to the purchasers of the  Registrable
Securities,  the Prospectus  will not contain an untrue  statement of a material
fact or omit to state  any  material  fact  required  to be  stated  therein  or
necessary to make the statements therein not misleading;

     (k)  make  generally  available  to the  holders  of  GridAmerica  HoldCo's
outstanding  securities earnings statements satisfying the provisions of Section
11(a) of the Securities Act, no later than forty-five (45) days after the end of
any twelve (12) month  period (or ninety  (90) days,  if such period is a fiscal
year) (i)  commencing  at the end of any  fiscal  quarter  in which  Registrable
Securities  are  sold to  underwriters  in a firm or best  efforts  underwritten
offering,  or, if not sold to  underwriters  in such an offering (ii)  beginning
with the first month of GridAmerica  HoldCo's  first fiscal  quarter  commencing
after the effective date of the Registration  Statement,  which statements shall
cover said twelve (12) month period;

     (l)  provide and cause to be maintained a transfer  agent and registrar for
all Registrable Securities covered by each Registration Statement from and after
a date not later than the effective date of such Registration Statement;

     (m)  use   commercially   reasonable   efforts  to  cause  all  Registrable
Securities  covered by each  Registration  Statement  to be  listed,  subject to
notice  of  issuance,  prior to the date of the first  sale of such  Registrable
Securities pursuant to such Registration  Statement, on each securities exchange
on which the Shares issued by GridAmerica HoldCo are then listed,

     (n)  enter  into such  agreements  (including  underwriting  agreements  in
customary  form  containing,   among  other  things,  reasonable  and  customary
indemnities)  and take such other  actions  as the  Selling  Shareholders  shall
reasonably  request in order to expedite or facilitate  the  disposition of such
Registrable Securities;

     (o)  furnish, at the request of the Selling Shareholders,  on the date that
Registrable  Securities are delivered to an  underwriter  for sale in connection
with  an   underwritten   registration,   or,  in  connection   with  any  other
registration,  on the date that the Registration  Statement with respect to such
registration becomes effective,  (i) an opinion, dated such date, of the counsel
representing  GridAmerica HoldCo for the purpose of such  registration,  in form
and substance as is customarily given to underwriters in an underwritten  public
offering,   addressed  to  the   underwriters,   if  any,  and  to  the  Selling
Shareholders,  (ii) a letter  dated such date,  from the  independent  certified
public  accountants  of  GridAmerica   HoldCo,  in  form  and  substance  as  is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering,  addressed to the underwriters,  if any, and to
such Selling Shareholders,  subject to such Selling  Shareholders'  provision of
information   reasonably   requested  by  such   independent   certified  public
accountants  to comply with the rules  governing  delivery  of such  letters and
(iii) cause the underwriting agreement to contain indemnification provisions and
procedures no less favorable than those set forth in Section 6.8 hereof (or such
other provisions and procedures  acceptable to such Selling  Shareholders)  with
respect to all parties to be indemnified pursuant to such Section;

     (p)  with  respect to not more than  three  Demand  Registrations  effected
pursuant to Section 6.1,  cause its senior  management  to  participate  in road
shows and other customary  marketing efforts in connection with the offering and
sale of Registrable Securities;

                                       36

<PAGE>

     (q)  as promptly as  practicable  after filing with the SEC of any document
which is incorporated by reference into a registration  statement filed pursuant
hereto (in the form in which it was  incorporated),  deliver a copy of each such
document to each seller of Registrable Securities;

     (r)  promptly make available for inspection by any Selling Shareholder, any
underwriter  participating  in any  disposition  pursuant  to  any  Registration
Statement filed pursuant hereto, and any attorney,  accountant or other agent or
representative  retained by any such seller or  underwriter  (collectively,  the
"Inspectors"),  all financial and other records,  pertinent  corporate documents
and properties of GridAmerica  HoldCo and its  subsidiaries  (collectively,  the
"Records"),  as shall be reasonably  necessary to enable them to exercise  their
due  diligence  responsibility,  and cause the  GridAmerica  HoldCo's  officers,
directors  and  employees  to  supply  all  information  requested  by any  such
Inspector in connection with such  registration  statement;  provided,  however,
that unless the  disclosure  of such  Records is necessary to avoid or correct a
misstatement  or omission in the  registration  statement or the release of such
Records  in  ordered  pursuant  to a  subpoena  or other  order  from a court of
competent jurisdiction,  GridAmerica HoldCo shall not be required to provide any
information  hereunder if (A) GridAmerica  HoldCo believes,  after  consultation
with  counsel for  GridAmerica  HoldCo,  that to do so would  cause  GridAmerica
HoldCo to forfeit  an  attorney-client  privilege  that was  applicable  to such
information or (B) either (1) GridAmerica  HoldCo has requested and been granted
from the SEC confidential  treatment of such information contained in any filing
with  the  SEC  or  documents  provided   supplementally  or  otherwise  or  (2)
GridAmerica  HoldCo  reasonably  determines  in good faith that such Records are
confidential  and so  notifies  that  Inspectors  in  writing  unless,  prior to
furnishing any such  information  agrees with respect to (A) or (B), such holder
of Registrable  Securities  requesting such  information  agrees to enter into a
confidentiality agreement in customary form and subject to customary exceptions;
and provided,  further that each holder of Registrable Securities agrees that it
will,  upon  learning  that  disclosure  of such Records is sought in a court of
competent jurisdiction,  give notice to GridAmerica HoldCo and allow GridAmerica
HoldCo at its expense, to undertake appropriate action and to prevent disclosure
of the Records deemed confidential;

     (s)  provide a CUSIP  number for  Registrable  Securities  included  in any
registration  statement  filed pursuant hereto not later than the effective date
of such registration statement;

     (t)  cooperate  with  each  Selling   Shareholder   and  each   underwriter
participating  in the  disposition  of such  Registrable  Securities  and  their
respective  counsel in connection with any filings  required to be made with the
National Association of Securities Dealers, Inc. ("NASD"); and

     (u)  use its  commercially  reasonable  efforts  to take  all  other  steps
necessary to effect the registration of such Registrable Securities contemplated
hereby.

Each  Selling   Shareholder  agrees  that,  upon  receipt  of  any  notice  from
GridAmerica  HoldCo  of the  happening  of any  event of the kind  described  in
Section 6.6(c)(v) hereof,  such Selling  Shareholder will forthwith  discontinue
disposition  of  Registrable  Securities  under the  Prospectus  related  to the
applicable  Registration  Statement until such Selling  Shareholders' receipt of
the

                                       37

<PAGE>

copies of the supplemented or amended Prospectus  contemplated by Section 6.6(j)
hereof, or until it is advised. in writing by GridAmerica HoldCo that the use of
the  Prospectus  may be  resumed.  It  shall  be a  condition  precedent  to the
obligations  of GridAmerica  HoldCo to take any action  pursuant to this Section
6.6 with respect to the Registrable  Securities of Selling Shareholder that such
Selling  Shareholder  shall  furnish  to  GridAmerica  HoldCo  such  information
regarding itself and the Registrable  Securities held by it as shall be required
by the Securities Act to effect the  registration of such Selling  Shareholder's
Registrable  Securities and as typically  provided by similarly situated selling
stockholders.

     Section  6.7   Registration   Expenses.   All  expenses   incident  to  any
registration to be effected hereunder (whether or not the Registration Statement
is filed or declared effective) and incident to GridAmerica HoldCo's performance
of or  compliance  with  this  Agreement,  including,  without  limitation,  all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws, printing expenses,  messenger and delivery expenses,  fees of the
National   Association  of  Securities   Dealers,   Inc.,   stock  exchange  and
qualification  fees, fees and disbursements of GridAmerica  HoldCo's counsel and
of independent certified public accountants of GridAmerica HoldCo (including the
expenses of any special audit required by or incident to such performance),  the
expenses  of  the  underwriters  that  are  customarily   requested  in  similar
circumstances by such underwriters (excluding discounts,  commissions or fees of
underwriters,   qualified  independent  underwriters,  selling  brokers,  dealer
managers  or  similar  securities   industry   professionals   relating  to  the
distribution  of the  Registrable  Securities),  all such expenses  being herein
called "Registration Expenses," will be borne by GridAmerica HoldCo. GridAmerica
HoldCo will also pay its  internal  expenses and the expense of any annual audit
and the fees and expenses of any person  retained by  GridAmerica  HoldCo.  Each
Selling Shareholder will pay its internal expenses, the fees and expenses of any
counsel,   advisor  or  other  person  retained  by  such  Selling  Shareholder.
Notwithstanding  the foregoing,  GridAmerica HoldCo will not be obligated to pay
Registration  Expenses  for more than Demand  Registrations  effected by Selling
Shareholders   pursuant  to  Section  6.1.  Registration  Expenses  incurred  in
connection with Registration Statements requested under Section 6.1 that are not
filed or declared  effective by the SEC will be paid by  GridAmerica  HoldCo and
will not count  against  such limit;  provided,  however,  if such  Registration
Statement not being filed or declared  effective is the result of the actions of
any  Selling   Shareholder,   then  such  Selling   Shareholder  will  bear  the
Registration   Expenses  of  such  Demand   Registration   in  which  case  such
registration shall not be counted as a Demand Registration under Section 6.1.

     Section 6.8 Indemnification.

     (a)  Indemnification by GridAmerica  HoldCo.  GridAmerica HoldCo agrees, to
the fullest extent permitted by Law, to indemnify and hold harmless each Selling
Shareholder,  its officers,  directors,  partners, employees and agents and each
person who controls such Selling  Shareholder  (within the meaning of Section 15
of the  Securities  Act or Section  20 of the  Exchange  Act) and the  officers,
directors,  partners,  employees and agents of any such controlling  person from
and against any and all losses,  claims,  damages and liabilities (including any
investigation,  legal or other expenses  reasonably incurred in connection with,
and any amount paid in  settlement  of, any action,  suit or  proceeding  or any
claim asserted) (collectively,  "Damages") to which such Selling Shareholder may
become  subject under the  Securities  Act, the Exchange Act or other federal or
state securities Law, at common Law or otherwise,  insofar as

                                       38

<PAGE>

such Damages arise out of or are based upon (i) any untrue  statement or alleged
untrue  statement of a material fact  contained in any  Registration  Statement,
Prospectus or  preliminary  prospectus  or any amendment or supplement  thereto,
(ii) the omission or alleged  omission to state therein a material fact required
to be stated  therein or necessary to make the statements  therein,  in light of
the  circumstances  under  which they were made,  not  misleading  and (iii) any
violation or alleged violation by GridAmerica  HoldCo of the Securities Act, the
Exchange Act or any state  securities  or blue sky Laws in  connection  with the
Registration Statement, Prospectus or preliminary prospectus or any amendment or
supplement  thereto;  provided,  however,  that  GridAmerica  HoldCo will not be
liable to any Selling  Shareholder to the extent that such Damages arise from or
are based upon any untrue  statement  or omission (x) made in reliance on and in
conformity  with written  information  furnished to  GridAmerica  HoldCo by such
Selling Shareholder expressly for the inclusion in such Registration  Statement,
(y) made in any  preliminary  prospectus if such Selling  Shareholder  failed to
deliver  a copy of the  Prospectus  with or prior  to the  delivery  of  written
confirmation of the sale by such Selling  Shareholder to the party asserting the
claim  underlying  such Damages and such  Prospectus  would have  corrected such
untrue  statement  or  omission  and (z) made in any  Prospectus  if such untrue
statement or omission  was  corrected  in an  amendment  or  supplement  to such
Prospectus,  and a sufficient  number of such  amendment or  supplement  to such
Prospectus  were  delivered  to such  Selling  Shareholder  prior to the sale of
Registrable  Securities  and such  Selling  Shareholder  failed to deliver  such
amendment or supplement  prior to or  concurrently  with the sale of Registrable
Securities to the party asserting the claim underlying such Damages. GridAmerica
HoldCo shall also indemnify  underwriters,  selling brokers, dealer managers and
similar  securities  industry  professionals  participating  in the distribution
customarily  indemnified  by issuers in  underwritten  public  offerings,  their
officers,  directors,  agents and  employees  and each Person who controls  such
Persons (within the meaning of Section 15 of the Securities Act or Section 20 of
the  Exchange  Act) to the same  extent as  provided  above with  respect to the
indemnification of the Selling Shareholders.

     (b)  Indemnification by Selling Shareholders. If Registrable Securities are
sold  under a  Prospectus  which  is a part of a  Registration  Statement,  each
Selling  Shareholder agrees to indemnify and hold harmless  GridAmerica  HoldCo,
its directors and each officer who signed such  Registration  Statement and each
person who controls  GridAmerica HoldCo (within the meaning of Section 15 of the
Securities  Act or Section 20 of the Exchange Act) and the officers,  directors,
partners,  employees  and agents of any such  controlling  person under the same
circumstances  as the foregoing  indemnity  from  GridAmerica  HoldCo to Selling
Shareholders,  to the extent that such losses, claims,  damages,  liabilities or
actions  arise out of or are based upon any untrue  statement of a material fact
or omission of a material fact that was made in the Prospectus, the Registration
Statement,  or any  amendment or  supplement  thereto,  in reliance  upon and in
conformity with information  relating to any Selling  Shareholder,  furnished in
writing to  GridAmerica  HoldCo by such Selling  Shareholder,  expressly for use
therein,  provided that in no event shall the aggregate liability of any Selling
Shareholder  exceed  the amount of the net  proceeds  received  by such  Selling
Shareholder  upon the sale of the  Registrable  Securities  giving  rise to such
indemnification   obligation.  Each  Selling  Shareholder  shall  indemnify  the
underwriters under terms customary to such underwritten  offerings as reasonably
requested by such underwriters.  GridAmerica HoldCo and each Selling Shareholder
shall be entitled to receive  indemnities  from  underwriters,  selling brokers,
dealer managers and similar securities

                                       39

<PAGE>

industry professionals participating in the distribution,  to the same extent as
customarily furnished by such persons in similar circumstances.

     (c)  Conduct  of  Indemnification   Proceedings.  Any  person  entitled  to
indemnification  hereunder will (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying  party to assume the defense of such claim with counsel  reasonably
satisfactory  to the  indemnified  party,  provided,  however,  that any  person
entitled to  indemnification  hereunder  shall have the right to employ separate
counsel  and to  participate  in the  defense  of such  claim,  but the fees and
expenses of such  counsel  shall be at the expense of such person and not of the
indemnifying party unless (A) the indemnifying party has agreed to pay such fees
or expenses,  (B) the indemnifying party shall have failed to assume the defense
of such claim and employ counsel  reasonably  satisfactory to such person within
thirty  (30) days of receipt  of notice of such  claim or (C) in the  reasonable
judgment of such  indemnified  person based on advice of counsel,  a conflict of
interest may exist between such person and the  indemnifying  party with respect
to such claims (in which case, if the person notifies the indemnifying  party in
writing that such person elects to employ separate counsel at the expense of the
indemnifying  party, the  indemnifying  party shall not have the right to assume
the defense of such claim on behalf of such person). No settlement in respect of
any third  party claim may be effected  by the  indemnifying  party  without the
indemnified   party's  prior  written   consent  (which  consent  shall  not  be
unreasonably  withheld) unless the settlement involves only the payment of money
by the indemnifying party,  provides for a full and unconditional release of the
indemnified  party and does not include a statement as to, or any  admission of,
fault,  culpability  or a failure to act by, or on behalf  of,  the  indemnified
party. Any  indemnifying  party who is not entitled to, or elects not to, assume
the  defense of a claim will not be  obligated  to pay the fees and  expenses of
more than one counsel for all parties  indemnified  by such  indemnifying  party
with respect to such claim, unless, in the reasonable judgment of an indemnified
party based on advice of counsel,  a conflict of interest  exists  between  such
indemnified party and one or more other indemnified parties with respect to such
claim,  in which  case the  indemnifying  party  shall be  obligated  to pay the
reasonable fees and  disbursement,  of such additional  counsel or counsels.  As
used in this Section 6.8(c), the terms "indemnifying party," "indemnified party"
and other  terms of similar  import are  intended  to include  only  GridAmerica
HoldCo  (and its  officers,  directors  and control  persons  and the  officers,
directors,  partners,  employees and agents of such control persons as set forth
above) on the one hand, and one or more Selling  Shareholders  (and its or their
officers,  directors,  partners,  employees,  agents and control persons and the
officers,  directors,  partners, employees and agents of such control persons as
set forth above) on the other hand, as applicable.

     (d)  Contribution.   If  for  any  reason  the   foregoing   indemnity   is
unavailable,  then the indemnifying party shall contribute to the amount paid or
payable by the indemnified  party as a result of such losses,  claims,  damages,
liabilities  or expenses in such  proportion  as is  appropriate  to reflect the
relative fault of the indemnifying party or indemnifying parties on the one hand
and the  indemnified  party on the other in  connection  with the  statements or
omissions  which  resulted  in such  losses,  claims,  demands,  liabilities  or
expenses as well as any other relevant equitable considerations. With respect to
contribution  required pursuant to this Section 6.8(d), the relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to  information  supplied by the  indemnifying  party or
indemnifying  parties

                                       40

<PAGE>

on the  one  hand or the  indemnified  party  on the  other,  and  the  parties'
relative, intent, knowledge, access to information and opportunity to correct or
prevent such untrue  statement or omission.  Notwithstanding  the  provisions of
this Section 6.8(d), an indemnified  holder of Registrable  Securities shall not
be  required to  contribute  any amount in excess of the amount by which the net
proceeds to such holder of Registrable  Securities  from the sale thereof exceed
the amount of damages which such indemnified  holder has otherwise been required
to pay  pursuant  to Section  6.8(b) by reason of any  untrue or alleged  untrue
statement  or  omission  or alleged  omission.  No person  guilty of  fraudulent
misrepresentation (within the meaning of Section 11 of the Securities Act) shall
be  entitled  to  contribution  from  any  person  who  was not  guilty  of such
fraudulent misrepresentation.

     (e)  Timing of Payments.  An indemnifying  party shall make payments of all
amounts required to be made pursuant to the foregoing provisions of this Section
6.8 to or for the account of the  indemnified  party from time to time  promptly
upon  receipt of bills or invoices  relating  thereto or when  otherwise  due or
payable.

     (f)  Survival. The indemnity and contribution  agreements contained in this
Section  6.8  shall  remain  in  full  force  and  effect,   regardless  of  any
investigation  made by or on behalf of any Selling  Shareholder,  its  officers,
directors,  partners,  attorneys, agents or any person, if any, who controls any
Selling  Shareholder  as  aforesaid,  and shall  survive  the  transfer  of such
Registrable Securities by any Selling Shareholder.

     Section 6.9 Preparation;  Reasonable Investigation.  In connection with the
preparation and filing of a Registration Statement pursuant to the terms of this
Agreement:

     (a)  GridAmerica  HoldCo shall,  with respect to a  Registration  Statement
filed by GridAmerica HoldCo, give each Selling Shareholder, the underwriters, if
any, and their respective counsel and accountants the opportunity to participate
in the preparation of such Registration  Statement (other than reports and proxy
statements  incorporated  therein by reference  and lawfully and properly  filed
with the SEC) and each  Prospectus  included  therein or filed with the SEC, and
each amendment thereof or supplement thereto;

     (b)  GridAmerica HoldCo shall give the participating GridAmerica Companies,
the  underwriters,  if any, and their  respective  counsel and accountants  such
reasonable access to its books and records and such opportunities to discuss the
business of  GridAmerica  HoldCo with its  officers and the  independent  public
accountants  who have certified its financial  statements as shall be necessary,
in the opinion of the Selling  Shareholders or such  underwriters,  to conduct a
reasonable   investigation  within  the  meaning  of  Section  11(b)(3)  of  the
Securities Act; and

     (c) the  Selling  Shareholders  shall,  to the  fullest  extent  reasonably
necessary,  cooperate with GridAmerica  HoldCo,  the  underwriters,  if any, and
their respective counsel and accountants in order to complete the preparation of
a Registration  Statement (other than reports and proxy statements  incorporated
therein by reference)  and each  Prospectus  included  therein or filed with the
SEC, and each amendment thereof or supplement thereto.

                                       41

<PAGE>

     Section 6.10 Rule 144 and Rule 144A. At all times during which  GridAmerica
HoldCo is subject to the periodic  reporting  requirements  of the Exchange Act,
GridAmerica  HoldCo  covenants that it will file, on a timely basis, the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules  and  regulations  adopted  by the SEC  thereunder,  and it will take such
further  action as NGUSA or the  GridAmerica  Companies may  reasonably  request
(including,  without limitation,  compliance with the current public information
requirements of Rule 144(c) and Rule 144A under the Securities  Act), all to the
extent required from time to time to enable such  GridAmerica  Companies to sell
Registrable  Securities without registration under the Securities Act within the
limitation of the conditions  provided by (a) Rule 144 under the Securities Act,
as such  Rule  may be  amended  from  time to  time,  (b) Rule  144A  under  the
Securities  Act,  as such  rule may be  amended  from  time to time,  or (c) any
similar rule or  regulation  hereafter  adopted by the SEC.  Upon the request of
NGUSA or any GridAmerica Company, GridAmerica HoldCo will provide reasonable and
customary assistance to facilitate such Person's sale of Registrable  Securities
in block trades or other similar  transactions.  Notwithstanding  the foregoing,
nothing in this  Section 6.10 shall be deemed to require  GridAmerica  HoldCo to
register any of its securities pursuant to the Exchange Act.

     Section 6.11 Other Registration Rights Agreements.  Neither the Company nor
GridAmerica HoldCo will enter into any agreement offering registration rights to
any  person  which  are more  favorable  than  those  granted  to NGUSA  and the
GridAmerica  Companies under this Agreement unless,  prior to entering into such
agreement,  it shall offer registration rights on substantially similar terms to
the GridAmerica Companies.

     Section 6.12  Specific  Performance  for  Registration  Rights.  Each party
hereto   shall  be  entitled  to  enforce  its  rights  under  this  Article  VI
specifically to recover damages by reason of any breach of any provision of this
Article VI and to exercise all other rights  existing in its favor.  The parties
hereto agree and  acknowledge  that money damages may not be an adequate  remedy
for any breach of the  provisions  of this Article VI and that each party may in
its  sole  discretion  apply  to  any  court  of  law  or  equity  of  competent
jurisdiction for specific  performance and/or injunctive relief (without posting
a bond or other  security)  in order to enforce or prevent any  violation of the
provisions of this Article VI.

     Section 6.13 Exchange of Units for Shares.  In order to effectuate the IPO,
NGUSA and the  GridAmerica  Companies  have  determined  that it is desirable to
create a Delaware corporation  ("GridAmerica HoldCo") and, to the extent desired
by any Member,  to exchange issued and outstanding  Units of Members desiring to
participate in such an exchange for Shares of  GridAmerica  HoldCo in accordance
with this Section 6.13 (the "Unit Exchange").

     (a)  In connection with any IPO, the Company shall cause GridAmerica HoldCo
to be incorporated as a Delaware  corporation.  The Certificate of Incorporation
and Bylaws of GridAmerica HoldCo shall be in such form as the Company determines
shall best facilitate the IPO; provided, however, that the charter shall provide
for two classes of common stock of GridAmerica HoldCo which shall have identical
rights and privileges,  except that "Class A Stock" shall have voting rights and
"Class B Stock"  shall have no voting  rights,  and shall  further  provide that
Class A Stock may be held only by a Person who is a Non-Market  Participant  and
Class A Shares shall be  convertible  to Class B Shares and Class B Shares shall
be

                                       42

<PAGE>

convertible  to Class A Shares  in the same  manner  as is  provided  in the LLC
Agreement with respect to Class A Units and Class B Units.

     (b)  In connection  with any IPO, (i) Shares issued by  GridAmerica  HoldCo
may be issued for cash,  in which case the cash  proceeds of the IPO may be used
to acquire Units of the Company or (ii) Shares may be issued in exchange for all
or any  portion  of the  issued and  outstanding  Units held by any  GridAmerica
Company  that is a Member  that  desires  to  participate  in the Unit  Exchange
occurring  in  connection  with the IPO.  Following  an IPO  (whether  or not in
connection with a Secondary Demand Registration), an GridAmerica Company that is
a Member may  request  that  Shares be issued to it in  exchange  for all or any
portion of the issued and outstanding  Units held by such  GridAmerica  Company,
and, upon such a request,  GridAmerica HoldCo will effectuate a Unit Exchange in
accordance with such request within thirty (30) days.

     (c)  Immediately  prior to the closing of the IPO, the Company  shall cause
GridAmerica  HoldCo  to  become  a  party  to this  Agreement  for  purposes  of
effectuating the provisions of this Article VI and to exchange each Class A Unit
held by an GridAmerica  Company desiring to participate in the Unit Exchange and
offered for exchange for one share of Class A Stock and to exchange each Class B
Unit  held by such  GridAmerica  Company  desiring  to  participate  in the Unit
Exchange  and offered  for  exchange  for one share of Class B Stock.  After the
initial Unit Exchange, any GridAmerica Company shall have the right, but not the
obligation,  to  exchange  Units for  Shares  upon ten (10) days  prior  written
request.

     (d)  The  Company  and each  GridAmerica  Company  shall  use  commercially
reasonable efforts to obtain all approvals of Governmental Authorities necessary
to effectuate the Unit Exchange,  the IPO and any  subsequent  Public  Offering.

                                  ARTICLE VII

                                FAIR MARKET VALUE

     Section 7.1 Fair  Market  Value.  Whenever  used in this  Agreement,  "Fair
Market Value" means, with respect to the valuation of any property, the value of
such  property  at the  time in  question  as  determined  in good  faith by the
Interested  Parties;  provided,  however,  that if such parties fail to agree in
writing  upon the value of such  property  before the earlier of (i) twenty (20)
days after the first request to make such a determination or (ii) the date sixty
(60) days prior to the transaction in question, then the following shall apply:

     (a)  Each Interested Party shall select a nationally  recognized investment
banking firm to make such  determination  on such  Interested  Party's behalf in
accordance with the standards,  procedures, and assumptions set forth in Section
7.2.  Each  Interested  Party  shall  pay all of the  fees and  expenses  of the
investment  banking firm selected by it (each such firm being  referred to as an
"Interested  Party  Valuation  Firm").  Subject to Section 13.9, each Interested
Party promptly  shall make  available to each other and any  investment  banking
firms involved in such process such  information  as is reasonably  necessary to
reach a Fair Market Value  determination.  Each Interested  Party Valuation Firm
shall determine its proposed fair market value of the property being valued.

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<PAGE>

     (b)  If the proposed fair market values  determined by the Interested Party
Valuation  Firms are within 10% of each other,  then "Fair  Market  Value" shall
mean the average of such proposed fair market values.

     (c)  If the proposed fair market values  determined by the Interested Party
Valuation  Firms are not within 10% of each  other,  then the  Interested  Party
Valuation Firms shall select a third nationally  recognized  investment  banking
firm (the  "Neutral  Valuation  Firm"),  which shall be paid for equally by both
Interested  Parties.  (If the Interested Party Valuation Firms fail to appoint a
Neutral  Valuation  Firm  within  twenty  (20)  days of the date the last of the
Interested Party Valuation Firms rendered its opinion of fair market value, then
either  Interested  Party  may apply to any court or  arbitration  panel  having
jurisdiction to make such  appointment).  The Neutral  Valuation Firm shall also
propose a fair market value for the property being valued. If:

          (1)  the fair market value  proposed by the Neutral  Valuation Firm is
     higher  than the fair  market  values  proposed  by both  Interested  Party
     Valuation Firms,  then "Fair Market Value" shall mean the higher of the two
     fair market values proposed by the Interested Party Valuation Firms;

          (2)  the  proposed  fair  market  value   determined  by  the  Neutral
     Valuation  Firm is lower  than  the fair  market  values  proposed  by both
     Interested Party Valuation  Firms,  then "Fair Market Value" shall mean the
     lower  of the two fair  market  values  proposed  by the  Interested  Party
     Valuation Firms; and

          (3)  the fair market value  proposed by the Neutral  Valuation Firm is
     between the fair market values proposed by both Interested  Party Valuation
     Firms,  then "Fair Market Value" shall mean the fair market value  proposed
     by the Neutral Valuation Firm.

     (d)  In any case where an investment  banking firm is required to render an
opinion of fair market value,  such opinion shall be rendered  within 30 days of
being engaged.

     Section 7.2 General  Principles of  Application.  The following  principles
shall apply generally to any  determination of "fair market value" under Section
7.1,  whether  such  determination  is made by the  Interested  Parties or by an
investment banking firm:

     (a)  "Fair  market  value"  shall mean the price at which the  property  in
question  would  change  hands  between  a willing  buyer and a willing  seller,
neither being under any compulsion and both having  reasonable  knowledge of the
relevant facts,  including the relevant  regulatory policies and, where the item
in question is an interest, or a group of assets used, in a business,  such item
shall be valued based on its going-concern value.

     (b)  Any  expected  tax  benefits  of  either  Interested  Party  shall  be
considered in determining "fair market value."

     (c)  In computing the "fair market value" of a Unit or group of Units, such

values  shall be  determined  by  reference  to the "fair  market  value" of the
Company  and the  presence  or  absence  of voting or  control  rights  shall be
ignored.

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<PAGE>

     (d)  Except as otherwise expressly provided in this Agreement, all property
will be valued on a  stand-alone  basis  without  regard  to any  expected  cost
savings  or  other   synergies   resulting   from  any   proposed   transaction.
Notwithstanding  the  foregoing,  (i) if as a result of the failure of a Putting
GridAmerica  Company to include in its Contributed  Transmission  Facilities all
Transmission  Facilities  necessary  or  reasonably  appropriate  to operate the
Contributed  Transmission  Facilities  in the manner in which such  Transmission
Facilities were operated  immediately  prior to the  determination  of the "fair
market  value"  of such  Transmission  Facilities,  the cost to the  Company  of
replacing those omitted  Transmission  Facilities shall be taken into account in
determining "Fair Market Value" and (ii) the economic and operational  effect of
any assets or contractual  arrangements for the provision of services offered by
a Putting  GridAmerica  Company in connection with the exercise of any Put Right
shall be taken  into  account  in  determining  the "fair  market  value" of any
Contributed Transmission Facilities.

     Section 7.3 General Principles of Application. When the "Fair Market Value"
to be determined is in connection  with a contribution  of assets to the Company
by the  Managing  Member or one of its  Affiliates,  the Members  other than the
Managing  Member and its  Affiliates  acting  collectively  will  represent  the
interests of the Company in such valuation process.

                                  ARTICLE VIII

                             ADMISSION REQUIREMENTS

     Section 8.1 Admission  Requirements.  Any  successor  owner (other than the
Company and its subsidiaries) of any of the GridAmerica  Transmission Facilities
(whether by  assignment,  operation  of law or  otherwise)  shall be entitled to
become a GridAmerica  Company by becoming a party to the Operation  Agreement in
accordance  with its  terms  and by  agreeing  to be bound by the  terms of this
Agreement.  Any  Person  that  acquires  any Units  from a  GridAmerica  Company
(whether by  assignment,  operation  of law or  otherwise)  shall be entitled to
become a  GridAmerica  Company  by  agreeing  to be  bound by the  terms of this
Agreement.  The  Company  may  permit,  in its  discretion,  any  owner of other
Transmission  Facilities  that  becomes  party  to the  Operation  Agreement  in
accordance therewith to become a GridAmerica Company, and the Company shall, and
the Initial Member,  in its capacity as the Managing Member shall, in any event,
cause each such  Person,  as a condition  to  becoming a party to the  Operation
Agreement,  to  agree  to be  bound  by the  terms  of  Section  2.2(e)  of this
Agreement, in each case, by complying with any terms and conditions for becoming
a participant in the  GridAmerica  ITC approved by Commission and by agreeing to
be bound by the  terms  of this  Agreement  and  such  Section  2.2(e).  For the
avoidance of doubt, a Person that becomes an GridAmerica Company pursuant hereto
that is not also a party to the  Operation  Agreement  shall  have no  rights or
obligations under Section 2.2(e).

                                   ARTICLE IX

                         REPRESENTATIONS AND WARRANTIES

     Section 9.1 Representations and Warranties Concerning the Company. In order
to induce the GridAmerica  Companies to enter into this Agreement,  the Company,
the Initial

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<PAGE>

Member and NGUSA hereby  jointly and  severally  represent  and warrant that the
statements contained in this Section 9.1 are true and correct.

     (a)  Organization and Standing. The Company is a Delaware limited liability
company, duly organized, validly existing and in good standing under the laws of
the  jurisdiction  of its  organization,  with full power and  authority to own,
lease,  use and operate its  properties and to conduct its business as and where
owned, leased, used, operated and conducted.

     (b)  Corporate Power and Authority.  Subject to the receipt by the Company,
the  Initial  Member  and NGUSA of any  Required  Consents  required  by it, the
Company has all requisite  power and authority to enter into this  Agreement and
to consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby  have been duly  authorized  by all  necessary  action on the part of the
Company. This Agreement has been duly executed and delivered by the Company and,
subject  to the  receipt by the  Company,  the  Initial  Member and NGUSA of any
Required  Consents  required  by it,  constitutes  the legal,  valid and binding
obligation of the Company,  enforceable against it in accordance with its terms,
subject  to  bankruptcy,  insolvency,  fraudulent  conveyance,   reorganization,
moratorium  and other  similar laws relating to or affecting  creditors'  rights
generally and general equitable  principles  (whether considered in a proceeding
in equity or at law).

     (c)  Conflicts;  Consents.  Neither  the  execution  and  delivery  of this
Agreement by the Company nor the consummation of the  transactions  contemplated
hereby:

          (1)  will  violate,  conflict  with,  or  result  in a  breach  of any
     provision of its certificate of organization or the LLC Agreement; or

          (2)  will  violate,  conflict  with,  or  result  in a  breach  of any
     provision of, or  constitute a default (or an event which,  with the giving
     of notice,  the passage of time or otherwise,  would  constitute a default)
     under, require any consent under, or entitle any Person (with the giving of
     notice, the passage of time or otherwise) to terminate,  accelerate, modify
     or call a default  under,  or result in the creation of any lien,  security
     interest, charge or encumbrance upon any of the properties or assets of the
     Company,  under any of the terms,  conditions  or  provisions  of any note,
     bond, mortgage,  indenture, deed of trust, license, contract,  undertaking,
     agreement,  lease or other instrument or obligation to which the Company is
     a party,  the effect of which will have or is reasonably  likely to have, a
     material adverse effect on the business,  properties,  condition (financial
     or otherwise) or results of operations of the Company.

     (d)  Approvals.  Subject to the receipt by the Company,  the Initial Member
and NGUSA of any Required  Consents  required by it, all  authorizations  of and
exemptions,  actions or approvals  by, and all notices to or filings  with,  any
federal  Governmental  Authority that are required to have been obtained or made
by the  Company,  the  Initial  Member  and/or  NGUSA,  as the case  may be,  in
connection  with the execution and delivery of this Agreement have been obtained
or made  and are in full  force  and  effect,  and all  conditions  of any  such
authorizations, exemptions, actions or approvals have been complied with.

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<PAGE>

     Section 9.2 Representations  and Warranties  Concerning the Initial Member.
In order to induce the GridAmerica Companies to enter into this Agreement, NGUSA
and the Initial Member hereby  jointly and severally  represent and warrant that
the statements contained in this Section 9.2 are true and correct.

     (a)  Organization and Standing.  The Initial Member is a limited  liability
company, duly organized, validly existing and in good standing under the laws of
the  jurisdiction  of its  organization,  with full power and  authority to own,
lease,  use and operate its  properties and to conduct its business as and where
owned, leased, used, operated and conducted.

     (b)  Corporate Power and Authority.  Subject to the receipt by the Company,
the  Initial  Member  and NGUSA of any  Required  Consents  required  by it, the
Initial  Member  has all  requisite  power  and  authority  to enter  into  this
Agreement and to consummate the transactions contemplated by this Agreement. The
execution  and  delivery  of  this  Agreement  and  the   consummation   of  the
transactions  contemplated  hereby have been duly  authorized  by all  necessary
action on the part of the Initial Member.  This Agreement has been duly executed
and delivered by the Initial Member and,  subject to the receipt by the Company,
the  Initial  Member  and  NGUSA  of  any  Required  Consents  required  by  it,
constitutes  the legal,  valid and binding  obligation  of the  Initial  Member,
enforceable  against it in  accordance  with its terms,  subject to  bankruptcy,
insolvency, fraudulent conveyance, reorganization,  moratorium and other similar
laws relating to or affecting  creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).

     (c)  Conflicts;  Consents.  Neither  the  execution  and  delivery  of this
Agreement  by the  Initial  Member  nor  the  consummation  of the  transactions
contemplated hereby:

          (1)  will  violate,  conflict  with,  or  result  in a  breach  of any
     provision of its organizational documents; or

          (2)  will  violate,  conflict  with,  or  result  in a  breach  of any
     provision of, or  constitute a default (or an event which,  with the giving
     of notice,  the passage of time or otherwise,  would  constitute a default)
     under, require any consent under, or entitle any Person (with the giving of
     notice, the passage of time or otherwise) to terminate,  accelerate, modify
     or call a default  under,  or result in the creation of any lien,  security
     interest, charge or encumbrance upon any of the properties or assets of the
     Initial  Member,  under any of the terms,  conditions  or provisions of any
     note,  bond,  mortgage,   indenture,  deed  of  trust,  license,  contract,
     undertaking,  agreement,  lease or other  instrument or obligation to which
     the  Initial  Member  is a  party,  the  effect  of which  will  have or is
     reasonably  likely to have,  a  material  adverse  effect on the  business,
     properties,  condition (financial or otherwise) or results of operations of
     the Initial Member.

     (d)  Approvals.  Subject to the receipt by the Company,  the Initial Member
and NGUSA of any Required  Consents  required by it, all  authorizations  of and
exemptions,  actions or approvals  by, and all notices to or filings  with,  any
federal  Governmental  Authority that are required to have been obtained or made
by the  Company,  the  Initial  Member  and/or  NGUSA,  as the case  may be,  in
connection  with the execution and delivery of this Agreement have been

                                       47

<PAGE>

obtained or made and are in full force and  effect,  and all  conditions  of any
such authorizations, exemptions, actions or approvals have been complied with.

     Section 9.3  Representations  and Warranties of GridAmerica  Companies.  In
order to induce the  Company,  the  Initial  Member and NGUSA to enter into this
Agreement,  each GridAmerica Company hereby represents and warrants severally as
to itself,  and not jointly and severally as to any other  GridAmerica  Company,
that the statements contained in this Section 9.3 are true and correct.

     (a)  Organization and Standing.  Such GridAmerica Company is a corporation,
duly  organized,  validly  existing and in good  standing  under the laws of the
jurisdiction of its  organization,  with full power and authority to own, lease,
use and operate its  properties  and to conduct its business as and where owned,
leased, used, operated and conducted.

     (b)  Corporate  Power  and  Authority.  Subject  to  the  receipt  by  such
GridAmerica  Company of any Required  Consents  required by it, such GridAmerica
Company has all requisite  power and authority to enter into this  Agreement and
to consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly  authorized  by all  necessary  action on the part of such
GridAmerica Company. This Agreement has been duly executed and delivered by such
GridAmerica  Company and, subject to the receipt by such GridAmerica  Company of
any Required Consents required by it,  constitutes the legal,  valid and binding
obligation of such  GridAmerica  Company,  enforceable  against it in accordance
with its  terms,  subject  to  bankruptcy,  insolvency,  fraudulent  conveyance,
reorganization,  moratorium  and other  similar  laws  relating to or  affecting
creditors' rights generally and general equitable principles (whether considered
in a proceeding in equity or at law).

     (c)  Conflicts;  Consents.  Neither  the  execution  and  delivery  of this
Agreement by such  GridAmerica  Company nor the consummation of the transactions
contemplated hereby:

          (1)  will  violate,  conflict  with,  or  result  in a  breach  of any
     provision of its organizational documents; or

          (2)  will  violate,  conflict  with,  or  result  in a  breach  of any
     provision of, or  constitute a default (or an event which,  with the giving
     of notice,  the passage of time or otherwise,  would  constitute a default)
     under, require any consent under, or entitle any Person (with the giving of
     notice, the passage of time or otherwise) to terminate,  accelerate, modify
     or call a default  under,  or result in the creation of any lien,  security
     interest,  charge or  encumbrance  upon any of the  properties or assets of
     such GridAmerica Company, under any of the terms,  conditions or provisions
     of any note, bond, mortgage,  indenture, deed of trust, license,  contract,
     undertaking,  agreement,  lease or other  instrument or obligation to which
     such  GridAmerica  Company is a party,  the effect of which will have or is
     reasonably  likely to have,  a  material  adverse  effect on the  business,
     properties,  condition (financial or otherwise) or results of operations of
     such GridAmerica Company.

                                       48

<PAGE>

     (d)  Approvals.  Subject to the receipt by such GridAmerica  Company of any
Required Consents required by it, all authorizations of and exemptions,  actions
or approvals  by, and all notices to or filings with,  any federal  Governmental
Authority  that are required to have been  obtained or made by such  GridAmerica
Company in connection  with the execution  and delivery of this  Agreement  have
been  obtained or made and are in full force and effect,  and all  conditions of
any such  authorizations,  exemptions,  actions or approvals  have been complied
with.

     Section 9.4 Representations and Warranties of NGUSA. In order to induce the
GridAmerica Companies to enter into this Agreement,  NGUSA hereby represents and
warrants that the statements contained in this Section 9.4 are true and correct.

     (a)  Organization  and Standing.  NGUSA is a corporation,  duly  organized,
validly  existing and in good standing under the laws of the jurisdiction of its
organization,  with full power and authority to own, lease,  use and operate its
properties  and to  conduct  its  business  as and where  owned,  leased,  used,
operated and conducted.

     (b)  Corporate Power and Authority.  Subject to the receipt by the Company,
the Initial Member and NGUSA of any Required  Consents required by it, NGUSA has
all requisite power and authority to enter into this Agreement and to consummate
the transactions  contemplated by this Agreement.  The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been  duly  authorized  by all  necessary  action  on the  part of  NGUSA.  This
Agreement  has been duly  executed and  delivered  by NGUSA and,  subject to the
receipt by the Company,  the Initial  Member and NGUSA of any Required  Consents
required by it,  constitutes the legal,  valid and binding  obligation of NGUSA,
enforceable  against it in  accordance  with its terms,  subject to  bankruptcy,
insolvency, fraudulent conveyance, reorganization,  moratorium and other similar
laws relating to or affecting  creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).

     (c)  Conflicts;  Consents.  Neither  the  execution  and  delivery  of this
Agreement by NGUSA nor the consummation of the transactions contemplated hereby:

          (1)  will  violate,  conflict  with,  or  result  in a  breach  of any
     provision of its organizational documents; or

          (2)  will  violate,  conflict  with,  or  result  in a  breach  of any
     provision of, or  constitute a default (or an event which,  with the giving
     of notice,  the passage of time or otherwise,  would  constitute a default)
     under, require any consent under, or entitle any Person (with the giving of
     notice, the passage of time or otherwise) to terminate,  accelerate, modify
     or call a default  under,  or result in the creation of any lien,  security
     interest,  charge or  encumbrance  upon any of the  properties or assets of
     NGUSA, under any of the terms,  conditions or provisions of any note, bond,
     mortgage,  indenture,  deed  of  trust,  license,  contract,   undertaking,
     agreement,  lease or other  instrument  or  obligation  to which NGUSA is a
     party,  the effect of which will have or is  reasonably  likely to have,  a
     material adverse effect on the business,  properties,  condition (financial
     or otherwise) or results of operations of NGUSA.

                                       49

<PAGE>

     (d)  Approvals.  Subject to the receipt by the Company,  the Initial Member
and NGUSA of any Required  Consents  required by it, all  authorizations  of and
exemptions,  actions or approvals  by, and all notices to or filings  with,  any
federal  Governmental  Authority that are required to have been obtained or made
by the Company,  the Initial  Member and/or NGUSA,  as the case may be, NGUSA in
connection  with the execution and delivery of this Agreement have been obtained
or made  and are in full  force  and  effect,  and all  conditions  of any  such
authorizations, exemptions, actions or approvals have been complied with.

     (e)  NGUSA  Business  Strategy.  NGUSA is  involved  in the  ownership  and
operation of transmission and  distribution  properties and seeks to further its
overall business  strategy by acquiring,  owning and operating  transmission and
distribution  properties,  and  divesting  or  otherwise  disposing  of electric
generation businesses and assets or obligations relating thereto.

                                    ARTICLE X

                                    COVENANTS

     Section 10.1 NGUSA  Covenants.  NGUSA hereby  agrees for the benefit of the
GridAmerica  Companies,  that for so long as the Initial  Member is the Managing
Member, NGUSA will:

     (a)  Maintain,  and  cause  the  Initial  Member  to  maintain,  Non-Market
Participant status except to the extent that the failure of NGUSA or the Initial
Member to maintain Non-Market  Participant status occurs as a result of a change
in  applicable  Law,  in which case NGUSA  shall take or shall cause the Initial
Member to take commercially  reasonable steps to regain  Non-Market  Participant
status so long as the cost  thereof  is not  material.  To the  extent  that the
pursuit by NGUSA of its transmission and distribution  strategy could reasonably
be expected to result in the loss by NGUSA or the Initial  Member of  Non-Market
Participant status,  NGUSA shall (i) propose to the Commission to take, or cause
to be taken,  commercially reasonable mitigation measures to maintain Non-Market
Participant status, (ii) if NGUSA reasonably believes that the Commission is not
likely to accept such mitigation measures, so notify the GridAmerica  Companies,
such  notice to be given at least one  hundred and fifty (150) days prior to the
date that NGUSA or the Initial Member  expects NGUSA and/or the Initial  Member,
as the case may be, to lose Non-Market Participant status and, if after delivery
of such notice, the GridAmerica Companies so request, undertake, at its expense,
to identify a new Managing Member which is willing to replace the Initial Member
on  substantially  the same  terms as are set  forth  in the ITC  Agreements  or
otherwise propose  alternate means of maintaining the independent  management of
GridAmerica  ITC and (iii) shall not deliver any notice of resignation  pursuant
to Section  2.2(c)(v)  prior to the date that is ninety (90) days after the date
of the  delivery of any notice given as required by the  foregoing  clause (ii).
Anything in this  Section  10.1(a) to the contrary  notwithstanding,  nothing in
this Section 10.1(a) shall be deemed to prohibit the right of the Initial Member
to resign as permitted by Section 2.2(c).

     (b)  Neither (i) permit the Initial Member, legally or beneficially, to own
any assets or incur any liabilities, or to engage in any business, other than as
may  relate  to or arise out of the  ownership  of Units,  the  business  of the
Company and the fulfillment by the Initial

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Member of its  obligations  as Managing  Member nor (ii) permit any Affiliate of
the Initial  Member (other than the Company or any subsidiary of the Company) to
own any assets  necessary or desirable  for, or  otherwise  appropriate  to, the
operation  of  the  Company,   including  any  System-Wide  Assets.   Except  as
contemplated  by the  proviso  in the  immediately  preceding  sentence,  if the
Initial Member or any NGUSA Affiliate  (other than the Company or any subsidiary
of the Company)  acquires  any assets of the type  referred to in clause (ii) of
the proceeding sentence, NGUSA shall cause such Person to promptly transfer such
assets to the Company.

     (c)  Not enter into, or permit any NGUSA  Affiliate or the Company to enter
into any agreement  which prohibits or restricts the right to remove the Initial
Member  for  Cause  pursuant  to  Section  6.1 (b) of the LLC  Agreement  or the
purchase of the Equity  Interests or asset and liabilities of the Initial Member
pursuant to Section 2.1(e),  except in compliance with Section 6.2(g) of the LLC
Agreement.

     (c)  Promptly cause the Initial Member to resign as Managing  Member,  such
resignation  to  be  deemed  "removal"  for  all  purposes  of  the  Transaction
Agreements,  if (i) a Super  Majority  of  Transmission  Owners  delivers to the
Initial Member and NGUSA written  notice for the removal of the Managing  Member
in accordance  with Section  6.1(b)(ii) of the LLC Agreement or Section 4.4.3 of
the  Operation  Agreement  and (ii) either  NGUSA does not contest  such removal
within thirty (30) days or a binding determination that grounds for such removal
exist has been made  pursuant to Article XII,  Article X of the LLC Agreement or
Article VI of the Operation Agreement.

     (e)  Cause (i) the Initial  Member to be a direct or indirect  wholly-owned
subsidiary of NGUSA,  (ii) all Units purchased  pursuant to Section 3.1(a) to be
held  by  one  or  more  NGUSA  Affiliates  which  are  directly  or  indirectly
wholly-owned by NGUSA, and (iii) all Units purchased, pursuant to Section 3.2 to
be held by an  Affiliated  Investor  until the date two years  after the date of
purchase thereof, or the date of the IPO, whichever is earlier.

     (f)  Prior to the Transmission  Service Date, use  commercially  reasonable
efforts to cause the Initial Member to satisfy all of the  conditions  necessary
to allow the Transmission  Service Date to occur as soon as is practicable,  but
in all  events  prior  to  June  30,  2003;  and in  furtherance  thereof,  each
GridAmerica  Company,  severally  as to itself and not  jointly  and  severally,
agrees to use commercially  reasonable efforts to cause the Transmission Service
Date to occur as soon as practicable, but in all events, prior to such date.

     (g)  Not amend, or permit the Initial Member or any Affiliated  Investor to
amend,  the LLC Agreement to amend the  definitions of  Transaction  Agreements,
Cause,  Gross  Negligence,  Super  Majority of  Non-Managing  Members or Willful
Misconduct  or Sections  11.8(e)  through (h) of the LLC  Agreement  without the
approval of a Super Majority of  Transmission  Owners,  and until such time as a
Super Majority of Non-Managing  Members shall have the approval rights contained
in Section  6.6(b) of the LLC Agreement,  not permit any Affiliated  Investor to
amend,  modify  or  otherwise  supplement  or  waive  any  provision  of the LLC
Agreement  in a manner  that would alter or change the  powers,  preferences  or
rights of a Member (other than the Initial  Member) or any other Person that has
the right to become a Member  pursuant to this Agreement  (assuming for purposes
of this Subsection  10.1(8) that such other

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<PAGE>

Person has become a Member) so as to  adversely  affect  such  Member's  or such
other  Person's  powers,  preferences  or rights as a Member  thereunder  or the
effect  of which is (A) that the  Company  is able to enter  into or engage in a
transaction,  contract, agreement or arrangement that would have contravened the
LLC  Agreement  prior to such  amendment  or (B) would impair the ability of the
Company to carry out its Permitted Purposes.

     (h)  Not permit the Initial Member to make any  distribution to the holders
of, or  redemption  of, the Equity  Interests of the Initial  Member or make any
loans to NGUSA or any Affiliated  Investor unless,  prior to such distributions,
redemptions or loans, NGUSA notifies each GridAmerica Company and each Member of
such  distribution,  redemption  or loan and agrees in an  agreement  reasonably
satisfactory   to  a  Super  Majority  of   Transmission   Owners  (the  "Equity
Contribution  Agreement")  to cause the Person(s) who own the Initial  Member to
make,  at the written  request of the Company,  any  GridAmerica  Company or any
Member,  a capital  contribution  or other  equity  contribution  to the Initial
Member in an amount equal to the lesser of (i)  $25,000,000,  (ii) the aggregate
amount of such  distributions,  redemptions  and loans and (iii) any unsatisfied
liability  of the  Initial  Member to the  Company  or any  GridAmerica  Company
incurred as a result of the indemnity  obligation of the Initial Member pursuant
to Section  11.8(e) of the LLC Agreement or as a result of the Gross  Negligence
or Willful Misconduct of the Initial Member. The Equity  Contribution  Agreement
shall provide that NGUSA shall cause such capital  contribution  or other equity
contribution  to be (A) made to the  Initial  Member and (B) used by the Initial
Member solely for purposes of satisfying such liabilities of the Initial Member.

     Section 10.2  GridAmerica  Company  Covenants.  Each  GridAmerica  Company,
severally as to itself and not jointly and severally,  hereby  covenants for the
benefit of NGUSA that:  (a) it will not, and will not permit any of its majority
owned  subsidiaries  to,  purchase or hold any  securities  of The National Grid
Group,  PLC for so long as any Affiliate of NGUSA is the Managing Member and (b)
no later than 35 days after the Commission  issues one or more Final Orders,  it
shall notify the Company in writing whether or not such Final Orders  constitute
an Approval Order.

     Section 10.3 Rights of Transmission  Owners Under the Operation  Agreement.
The Parties  agree that the  Non-Divesting  GridAmerica  Companies  (i) shall be
parties in  interest  in respect of any  dispute  concerning  the removal of the
Managing  Member  pursuant to Sections  6.1(b)(ii) and 10.3 of the LLC Agreement
and (ii) shall have the right to cause the  Company  to  enforce  the  indemnity
obligation  of the  Initial  Member  pursuant  to  Section  11.8(e)  of the  LLC
Agreement or the liability of the Initial  Member based on its Gross  Negligence
or  Willful  Misconduct  to the  extent  necessary  to allow  the  Non-Divesting
GridAmerica  Companies to enforce and collect on their indemnity  claims against
the  Company  under the  Operation  Agreement  and to enforce  the rights of the
Company in any Equity  Contribution  Agreement  (including  the right to require
National  Grid USA to cause  the  Persons  who own the  Initial  Member  to make
capital or equity  contributions  to the Initial Member pursuant to such Section
10.1(h)).

     Section 10.4 Party Covenants.  Each Party that is or becomes a Member shall
not,  and shall cause its  Affiliates  that are  Members  not to,  amend the LLC
Agreement to amend the definitions of ITC Agreements,  Cause,  Gross Negligence,
Super Majority of Non-Managing

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Members  or  Willful  Misconduct  or  Sections  11.8(e)  through  (h) of the LLC
Agreement without the approval of a Super Majority of Transmission Owners.

                                   ARTICLE XI

                     TERMINATION, CERTAIN WITHDRAWAL RIGHTS

     Section 11.1 Termination of Agreement; Effect of Termination.

     (a)  If the  Transmission  Service  Date has not occurred on or before June
30, 2003, any Party may, upon thirty (30) days prior written notice to the other
Parties, cause the GridAmerica ITC to terminate.

     (b)  This  Agreement may be terminated  as to any  GridAmerica  Company (i)
pursuant  to  Section  5.7 or  (ii)  at any  time  by  mutual  consent  of  such
GridAmerica  Company and the Initial Member.  In the event of the termination of
this Agreement as to any GridAmerica  Company  pursuant to this Section 11.1(b),
this  Agreement  shall  become void as to such  GridAmerica  Company and have no
further effect, without any liability on the part of any party or its directors,
officers or stockholders;  provided,  however,  that no such  termination  shall
release any GridAmerica Company from any liabilities  pursuant to Section 2.2(d)
or Section 3.4.

     (c)  Notwithstanding the foregoing,  nothing contained in this Section 11.1
shall  relieve  any party to this  Agreement  of  liability  for a breach of any
provision of this Agreement.

                                   ARTICLE XII

                               DISPUTE RESOLUTION

     Section  12.1  Negotiations.  If a dispute  between any two or more Parties
arises out of or relates to this Agreement, any such Party may notify each other
Party that it intends to initiate the dispute  resolution  procedures  set forth
herein.  Immediately  upon the  receipt of such  notice,  the Party  sending the
notice and each other Party  receiving  the notice shall refer such dispute to a
senior  executive  officer (the "SEOs") of each such Party for  consultation and
advice prior to the commencement of the arbitration proceedings.  The SEOs shall
meet in person or by teleconference as soon as mutually  practicable to consider
such matters.  If the SEOs fail to resolve such dispute  within thirty (30) days
of such notice being sent, any Party to the dispute or  controversy  may declare
the  consultation  procedure set forth in this Section 12.1 terminated and refer
the dispute to arbitration pursuant to Section 12.2.

     Section  12.2  Arbitration.  If a dispute  between any two or more  Parties
arises out of or relates to this  Agreement or to the  relationship  between the
Parties  created  by this  Agreement,  and such  Parties  have not  successfully
resolved such dispute through  negotiation on or before the thirtieth (30th) day
following  the notice  referred to in Section  12.1,  then such dispute shall be
resolved  according  to this  Section  12.2.  If such  dispute is subject to the
jurisdiction of the Commission,  then any Party to the dispute may, within sixty
(60) days of the notice  referred to in

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<PAGE>

Section 12.1,  bring such dispute before the Commission  for  resolution.  If no
Party  brings the dispute  before the  Commission  within sixty (60) days of the
notice  referred  to in Section  12.1,  or if the  dispute is not subject to the
jurisdiction of the  Commission,  then such dispute shall be resolved by binding
arbitration ("Arbitration") under the following provisions.

     (a)  All Claims To Be  Arbitrated.  Except as provided  in the  immediately
preceding  sentence  and in  Section  7.1  and  12.2(1),  any  and  all  claims,
counterclaims,  demands,  causes of action,  disputes,  controversies  and other
matters in question arising out of or relating to this Agreement,  any provision
hereof,  the alleged breach hereof, or in any way relating to the subject matter
hereof or the  relationship  between the Parties created  hereby,  involving the
Parties  ("Claims") shall be finally resolved by binding  arbitration by a panel
of arbitrators under the Commercial  Arbitration Rules (the "Arbitration Rules")
of  the  American  Arbitration   Association  (the  "AAA")  to  the  extent  not
inconsistent  with the provisions of this Agreement,  regardless of whether some
or all of such Claims allegedly (i) are  extra-contractual in nature, (ii) sound
in contract, tort, or otherwise, (iii) are provided by federal or state statute,
common law or  otherwise or (iv) seek  damages or any other  relief,  whether at
law, in equity or otherwise.

     (b)  Referral of Claims to  Arbitration.  Subject to Section  12.1,  one or
more  Parties  may  refer a Claim  to  arbitration  (the  "Claimant  Party")  by
providing  notice  (an  "Arbitration  Notice")  to each  other  Party or Parties
against  which  the  Claim  is  asserted  (whether  one  or  more  parties,  the
"Respondent  Party")  in the  manner  set forth in the  Arbitration  Rules.  The
Arbitration  Notice must  include a general  description  of the Claim and shall
identify all Respondent  Parties and the reasons for asserting the Claim against
each Respondent  Party. The Arbitration is commenced  between the Claimant Party
and the Respondent Party ("Dispute  Parties") by sending the Arbitration  Notice
to the Respondent Party.

     (c)  Stay  for  Commission   Proceedings;   Effect  of  Commission  Orders.
Following commencement of the Arbitration, if a Party other than a Dispute Party
institutes a proceeding  before the Commission  that involves one or more of the
Dispute  Parties  and the relief  sought in that  proceeding  would  require the
Commission  to  resolve  one or more  issues  presented  in the  Arbitration  (a
"Related Proceeding"), then the Dispute Parties agree that the Arbitration shall
be stayed during the pendency of such Related  Proceedings.  The Dispute Parties
further agree that the  Commission's  resolution in Related  Proceedings  of any
issue  that is also  presented  in the  Arbitration  shall be and is  final  and
binding as to that issue in the Arbitration.

     (d)  Number and Qualification of Arbitrators. The panel of arbitrators (the
"Panel") shall consist of three  arbitrators  appointed in accordance  with this
Section   12.2  and  the   Arbitration   Rules.   Arbitrators   shall  meet  the
qualifications  for arbitrators  established by the AAA and, in addition,  shall
have  significant   experience  in  the  electric  industry  and/or  significant
experience as an arbitrator in complex commercial matters. The arbitrators shall
each take an oath of neutrality.

     (e)  Appointment of Arbitrators.  By the fifteenth (15th) day following the
day on  which  the  Arbitration  Notice  is sent to the  Respondent  Party,  the
Claimant  Party shall  submit its  appointment  of the first  arbitrator  to the
Respondent  Party and the AAA. If the Claimant  Party  consists of more than one
Party,  then those Parties shall jointly  appoint the first  arbitrator.  By the
fifteenth  (15th) day following the  appointment  of the first  arbitrator,  the
Respondent  Party shall submit its  appointment of the second  arbitrator to the
Claimant  Party and the AAA. If the  Respondent  Party consists of more than one
Party, then those Parties shall jointly appoint the

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<PAGE>

second  arbitrator.  The two arbitrators  appointed by the Dispute Parties shall
appoint a third  arbitrator,  who shall be the  chairperson of the Panel, by the
fifteenth (15th) day following the appointment of the second arbitrator.  If the
second  arbitrator has not been appointed by the fifteenth  (15th) day following
the appointment of the first  arbitrator,  or if the first two arbitrators  have
not  appointed the third  arbitrator  by the fifteenth  (15th) day following the
appointment of the second  arbitrator,  any Dispute Party may request the AAA to
appoint the  arbitrator(s)  in  question.  If any  arbitrator  resigns,  becomes
incapacitated, or otherwise refuses or fails to serve or to continue to serve as
an  arbitrator,  the Dispute  Party or  arbitrators  entitled to designate  that
arbitrator shall promptly designate a successor. In the event that either of the
Claimant Party or the Respondent  Party consist of more than one Party and those
Parties are unable to agree on the appointment of an arbitrator,  then all three
arbitrators  shall  be  appointed  by  the  AAA;  provided,  however,  that  the
arbitrators  so  appointed  shall meet the  qualifications  set forth in Section
12.2(d).

     (f)  Governing Law. In deciding the substance of the Parties'  Claims,  the
arbitrators  shall first rely upon the  provisions  of this  Agreement and shall
then apply the  substantive  laws governing  this Agreement  pursuant to Section
13.7.

     (g)  Powers of the  Arbitrators;  Limitations  On Remedies.  The  validity,
construction  and  interpretation  of  this  agreement  to  arbitrate,  and  all
procedural  aspects of the arbitration  conducted  pursuant to this agreement to
arbitrate,  including  the  determination  of the  issues  that are  subject  to
arbitration  (i.e.,   arbitrability),   the  scope  of  the  arbitrable  issues,
allegations  of "fraud in the  inducement"  to enter into this Agreement or this
arbitration provision, allegations of waiver, laches, delay or other defenses to
arbitrability, and the rules governing the conduct of the arbitration (including
the time for filing an answer,  the time for the  filing of  counterclaims,  the
times for amending the pleadings,  the specificity of the pleadings,  the extent
and scope of discovery, the issuance of subpoenas, the times for the designation
of experts,  whether  the  arbitration  is to be stayed  pending  resolution  of
related  litigation  involving  third  parties  not  bound  by this  arbitration
agreement,  the  receipt  of  evidence  and the  like),  shall be decided by the
arbitrators to the extent not provided for in this Article XII. The  arbitrators
shall decide the Claims based on this Agreement,  the Arbitration Rules, and the
governing law, and not ex aqueo et bono, as amiable compositeurs,  or in equity.
The  arbitrators  shall not have the power to award any of those  remedies which
are precluded by Section 13.14(b). The arbitrators shall have the power to enter
such interim  orders as they deem  necessary,  including  orders to preserve the
subject  matter of the Claim or to  preserve or adjust the status of the Parties
pending resolution of the Claim in the Arbitration. The chairperson is empowered
to issue interim  orders on his own authority in emergency  situations and where
necessary  to  ensure  the  efficient   administration  of  the  Arbitration  on
application  from a Dispute  Party,  which orders shall remain in effect until a
meeting of all  arbitrators  may be convened to consider  the  application.  The
arbitrators  shall  have the  power to assess  the  attorneys'  fees,  costs and
expenses of the  Arbitration  (including  the  arbitrators'  fees and  expenses)
against  one or more  of the  Parties  in  whatever  manner  or  allocation  the
arbitrators deem appropriate.

     (h)  Venue;  Procedural  Issues.  The seat of the Arbitration  shall be New
York,  New York,  or such other  place as the  Dispute  Parties  may agree.  The
arbitrators  shall set the date,  the time and the place of the  hearing,  which
must commence on or before the one hundred  twentieth  (120th) day following the
designation  of the third  arbitrator.  All  decisions of the three

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<PAGE>

arbitrators  shall be made by  majority  vote.  In  determining  the  extent  of
discovery,  the  number  and  length of  depositions  and all other  pre-hearing
matters, the arbitrators shall endeavor,  to the extent possible,  to streamline
the proceedings and minimize the time and cost of the  proceedings.  There shall
be no  transcript  of the hearing.  The final  hearing shall not exceed ten (10)
business  days,  with the  Claimant  Party and  Respondent  Party  each  granted
one-half  of the  allocated  time to present  its case to the  arbitrators.  All
proceedings  conducted  hereunder and the decision of the  arbitrators  shall be
kept confidential by the arbitrators,  the AAA and any Persons  participating in
the  Arbitration,  except that the  confidentiality  obligations  of the Parties
shall be governed by Section 13.9.

     (i)  Additional  Claims.  After the Arbitration has commenced and the Panel
has been  appointed,  if a further Claim arises under this Agreement that is not
successfully  settled  pursuant  to  Section  12.1,  and the  further  Claim (an
"Additional  Claim") is related to the Claim in the  Arbitration or involves the
same Dispute  Parties,  then any Party to the Additional Claim may ask the Panel
to  accept  jurisdiction  over  the  Additional  Claim  and  include  it in  the
Arbitration  by  submitting  an  Arbitration  Notice in the  manner set forth in
Section  12.2(b)  (an  "Additional   Arbitration   Request")  and  submitting  a
concurrent  request to the Panel to accept the  Additional  Claim.  The  Parties
agree that the Panel should accept  jurisdiction over an Additional Claim if the
resolution  of the Claim  before the Panel will  involve some or all of the same
legal and factual  issues  presented  by the  Additional  Claim or if  accepting
jurisdiction  over the  Additional  Claim would  facilitate or help minimize the
costs of resolving  the disputes at issue and not unduly delay the  Arbitration.
The Parties  agree,  however,  that the Panel alone shall  determine  whether it
should accept  jurisdiction  over an Additional Claim and that its determination
shall be final and  unappealable.  If the Panel  refuses  jurisdiction  over the
Additional  Claim,  then the Additional  Arbitration  Request shall constitute a
separate request for arbitration,  which shall proceed  independently  and under
this Section 12.2 as if filed on the date the Panel denied the request to accept
jurisdiction.  So long as there is no pending Additional  Arbitration Request to
the Panel to accept jurisdiction,  any Party to an Additional Claim may commence
a separate arbitration proceeding in the manner set forth in this Section 12.2.

     (j)  Arbitration  Awards.  The  arbitrators  shall render their award on or
before the thirtieth  (30th) day following the last session of the hearing fully
resolving all Claims that are the subject of the Arbitration. The award shall be
in writing,  shall give reasons for the  decision(s)  reached by the arbitrators
and shall be signed and dated by the arbitrators,  and a copy of the award shall
be delivered to each of the Dispute  Parties.  A Party  against  which the award
assesses a monetary  obligation  or enters an  injunctive  order  shall pay that
obligation or comply with that order on or before the thirtieth  (30th) calendar
day  following  the  receipt of the award or by such other date as the award may
provide.  Any award of the arbitrators  shall be consistent with the limitations
and terms of this  Agreement.  The  arbitrators'  award may be confirmed in, and
judgment  upon the award  entered  by, any court  having  jurisdiction  over the
Parties.

     (k)  Binding Nature.  The decisions of the  arbitrators  shall be final and
binding on the Parties and  non-appealable  to the maximum  extent  permitted by
Law.

     (l)  Assistance  of  Courts.  It is the  intent  of the  Parties  that  the
Arbitration  shall be conducted  expeditiously,  without initial recourse to the
courts and without  interlocutory  appeals of the arbitrators'  decisions to the
courts.  Notwithstanding any other provision of this

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Agreement,  however,  a  Party  may  seek  court  assistance  in  the  following
circumstances:  (i) if a Party  refuses  to honor  its  obligations  under  this
agreement to arbitrate, any other Party may obtain appropriate relief compelling
arbitration in any court having  jurisdiction  over the refusing Party,  and the
order compelling arbitration shall require that the arbitration proceedings take
place in Washington,  D.C., and in the manner specified  herein,  (ii) a Dispute
Party may apply to any state or federal court having relevant  jurisdiction  for
orders  requiring  witnesses  to  obey  subpoenas  issued  by  the  arbitrators,
including requests for documents, and (iii) a Party may apply at any time before
or during the Arbitration to any court having relevant jurisdiction for an order
preserving the status quo ante and/or  evidence in  anticipation  of arbitration
(for avoidance of doubt,  preservation  of the status quo ante includes an order
compelling a Party to continue to fulfill an obligation  under this Agreement or
to refrain  from taking an action  that would  constitute  a default  under this
Agreement;  for further avoidance of doubt, such an application to the courts is
not intended to and does not constitute waiver of the right to arbitrate Claims,
nor does it refer any Claim to court for decision).  The Parties agree to comply
with any interim order issued by the arbitrators or by the chairperson.  Any and
all of the arbitrators'  orders and decisions,  including interim orders, may be
enforced by any state or federal  court having  jurisdiction.  Each Party agrees
that arbitration pursuant to this Section 12.2 shall be the exclusive method for
resolving  all Claims  and that it will not  commence  an action or  proceeding,
except as provided in this Section 12.2.

     Section 12.3  Arbitration of Certain Claims  Regarding  Removal of Managing
Member.  If a Super  Majority of  Transmission  Owners  shall have  attempted to
remove the Managing  Member for Cause pursuant to Section  6.1(b)(ii) of the LLC
Agreement,  and the Managing Member disputes whether Cause for removal exists (a
"Removal  Claim"),  Section  10.1(d) of this  Agreement or Section  4.4.3 of the
Operation Agreement, then the issue of whether Cause exists immediately shall be
referred  to  and  resolved  by  binding  arbitration  ("Removal   Arbitration")
according to this Section 12.3.  The Removal Claim shall be finally  resolved by
one  arbitrator   appointed  in  accordance  with  this  Section  12.3  and  the
Arbitration  Rules to the extent not  inconsistent  with the  provisions of this
Agreement.  The  Expedited  Procedures  of the  Arbitration  Rules shall be used
unless  the  arbitrator  determines  that  they  would  be  inappropriate.   The
arbitrator shall take an oath of neutrality.

     (a)  Application  to Removal Claim;  Relation to Other Claims.  Any dispute
other than a Removal Claim must be resolved in a separate  Arbitration  pursuant
to Section 12.2. A Removal Arbitration may not be joined to or consolidated with
an Arbitration without the consent of all parties in the Removal Arbitration and
the  Arbitration(s).  The decision of the arbitrator on a Removal Claim shall be
final and conclusive and bind any arbitrators in an Arbitration  commenced under
Section 12.2.

     (b)  Referral of Claims to  Arbitration.  A Managing  Member who receives a
written  notice of removal as  contemplated  in  Section  6.1(b)(ii)  of the LLC
Agreement,  Section  10.1(d) of this Agreement or Section 4.4.3 of the Operation
Agreement (a "Removal  Notice"),  and who disputes that Cause for removal exists
or a Member or NDTO upon  receipt of notice  from the  Managing  Member  that it
disputes that Cause exists (the "Removal  Claimant"),  may refer a Removal Claim
to Removal  Arbitration by providing  notice (a "Notice of Removal  Dispute") to
the Managing Member, all Members and all NDTOs that are not the Removal Claimant
(whether one or more parties, the "Removal Respondent Party"), in the manner set

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<PAGE>

forth in the Arbitration  Rules. The Notice of Removal Dispute also must contain
a list of five (5) proposed  arbitrators.  The Removal  Arbitration is commenced
between the Removal Claimant and the Removal  Respondent Party ("Removal Dispute
Parties")  by sending the Notice of Removal  Dispute to the  Removal  Respondent
Party.

     (c)  Appointment  of  Arbitrator.  Within ten (10) days of  delivery of the
Notice of Removal  Dispute,  the Removal  Respondent  Party shall deliver to the
Removal  Claimant  and the AAA a list of five (5) proposed  arbitrators.  If the
lists  provided by the Removal  Claimant and the Removal  Respondent  Party both
contain  a  common  proposed  arbitrator,  such  person  shall  be  selected  as
arbitrator;  otherwise,  the AAA shall appoint the  arbitrator  according to the
procedures  contained  in the  Arbitration  Rules.  If the  arbitrator  resigns,
becomes incapacitated,  or otherwise refuses or fails to serve or to continue to
serve as an arbitrator,  the Removal Dispute Parties shall promptly  designate a
successor  using the procedures  established in this Section 12.3. An arbitrator
appointed  pursuant  to this  Section  12.3(c) may not also be  appointed  as an
arbitrator pursuant to Section 12.2.

     (d)  Governing  Law. In deciding the substance of the Removal  Claims,  the
arbitrator shall first rely upon the provisions of this Agreement and shall then
apply the substantive laws governing this Agreement pursuant to Section 13.7.

     (e)  Powers of the Arbitrators;  Limitations On Remedies. The arbitrator in
a Removal  Arbitration  shall decide solely the Removal Claim, and shall have no
power to decide any other Claim.  The arbitrator  shall decide the Removal Claim
based on this Agreement,  the Arbitration  Rules, and the governing law, and not
ex aqueo et bono, as amiable  compositeur,  or in equity.  The arbitrator  shall
have the power to assess the attorneys' fees (in accordance with Section 13.10),
costs and expenses of the Removal  Arbitration  (including the arbitrators' fees
and  expenses)  against  one or  more  of the  Parties  in  whatever  manner  or
allocation the arbitrator deems appropriate.

     (f)  Venue; Procedural Issues. The seat of the Removal Arbitration shall be
New York,  New York,  or such other  place as the  Removal  Dispute  Parties may
agree. The arbitrator shall set the date, the time and the place of the hearing,
which  must  commence  on or before  the  thirtieth  (30th)  day  following  the
appointment of the arbitrator.  There shall be no transcript of the hearing. The
final hearing shall not exceed ten (10) business days, with the Removal Claimant
and Removal  Respondent  Party each granted  one-half of the  allocated  time to
present its case to the arbitrator.  All proceedings conducted hereunder and the
decision of the arbitrator shall be kept confidential by the arbitrator, the AAA
and any Persons participating in the Removal Arbitration.

     (g)  Arbitration Awards. The arbitrator shall render his award on or before
the tenth (10th) day following the  hearing(s) on the Removal  Claim.  The award
shall be in writing, shall give a reasonably detailed description of the reasons
for the  decision(s)  reached by the arbitrator and shall be signed and dated by
the  arbitrator,  and a copy of the  award  shall  be  delivered  to each of the
Removal Dispute  Parties.  Any award of the arbitrator  shall be consistent with
the  limitations  and terms of this  Agreement.  The  arbitrator's  award may be
confirmed  in,  and  judgment  upon the  award  entered  by,  any  court  having
jurisdiction over the Parties.

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<PAGE>

                                  ARTICLE XIII

                                  MISCELLANEOUS

     Section 13.1 Notices. Every notice,  request, or other statement to be made
or delivered  to a Party  pursuant to this  Agreement  shall be directed to such
Party's  representative  at the address or  facsimile  number for such Party set
forth on Schedule B or to such other  address or  facsimile  number as the Party
may  designate  by  written  notice to each other  Party from time to time.  All
notices or other  communications  required or permitted to be given  pursuant to
this  Agreement  must be in writing and will be considered as properly  given if
sent by facsimile  transmission  (with  confirmation  notice sent by first class
mail, postage prepaid),  by reputable nationwide overnight delivery service that
guarantees next business day delivery, by personal delivery,  or, if mailed from
within the United States,  by first class United States mail,  postage  prepaid,
registered or certified with return receipt requested. Any notice hereunder will
be deemed to have been duly  given (i) on the date  personally  delivered,  (ii)
when received, if sent by certified or registered mail, postage prepaid,  return
receipt requested or if sent by overnight delivery service; and (iii) if sent by
facsimile  transmission,  on the date sent, provided confirmation notice is sent
by first-class mail, postage prepaid promptly thereafter.

     Section 13.2 Entire Agreement;  Amendments.  This Agreement constitutes the
entire  agreement among the Parties  pertaining to the subject matter hereof and
supersedes all prior agreements,  representations and understandings, written or
oral,  pertaining  thereto,  including that certain letter of intent dated as of
June 20, 2002 among NGUSA and the Original GridAmerica  Companies.  No amendment
to or  modification,  termination  or waiver of or under any  provision  of this
Agreement  shall be valid  unless the same shall be in writing and signed by the
Company,  NGUSA, the Initial Member and one or more GridAmerica Companies owning
Transmission  Facilities subject to the Functional Control of the Company with a
Net Plant of at least  66.67%  of the  aggregate  Net  Plant of all  GridAmerica
Companies'  Transmission  Facilities  subject to the  Functional  Control of the
Company (for  purposes of this Section 13.2,  an  GridAmerica  Company that is a
Member shall be deemed to own Transmission  Facilities equal to the Transmission
Facilities  owned  by  the  Company  multiplied  by  such  Member's   Percentage
Interest); provided, however, that (i) any amendment, modification,  termination
or waiver  that  adversely  affects a specific  Party must also be  approved  in
writing  by such Party and (ii) a waiver by a Party as to only its rights may be
granted by such Party;  provided,  further,  that any  amendment to Section 6.13
which does not deprive a Party of the essential benefits of Article VI shall not
be deemed to adversely affect such Party.

     Section  13.3  Effect  of  Waiver.  No waiver by a Party of any one or more
defaults by another Party in the  performance of this Agreement shall operate or
be construed as a waiver of any future default or defaults,  whether of alike or
different character.

     Section 13.4 Not for the Benefit of Third  Parties;  No  Partnership.  This
Agreement  is  intended  to be solely  for the  benefit  of the  Parties,  their
successors  and permitted  assignees and is not intended to and shall not confer
any rights or benefits on any Person not a signatory  hereto.  This Agreement is
not intended,  and shall not be construed,  interpreted or applied,  to create a
partnership or joint venture, among the Parties.

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<PAGE>

     Section 13.5 No Assignment;  Binding Effect. Except as provided in Sections
5.5 and 8.1 or in  connection  with  an  assignment  to  lenders,  neither  this
Agreement nor any right, interest or obligation hereunder may be assigned by any
Party hereto  without the prior  written  consent of each other Party hereto and
any  attempt to do so will be void,  except for  assignments  and  transfers  by
operation of law. Subject to the preceding  sentence,  this Agreement is binding
upon,  inures to the benefit of and is  enforceable  by the  Parties  hereto and
their respective successors and assigns.

     Section  13.6  Severability.  Any  provision  of  this  Agreement  that  is
prohibited or unenforceable in any jurisdiction  shall, as to that jurisdiction,
be ineffective to the extent of that  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof or  affecting  the  validity or
enforceability of that provision in any other jurisdiction.

     Section  13.7  Governing  Law;  Waiver  of Jury  Trial.  THE  VALIDITY  AND
INTERPRETATION  OF THIS AGREEMENT  SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK,  WITHOUT  REFERENCE TO THE CHOICE OF LAW PRINCIPLES THAT WOULD REQUIRE
THE LAW OF ANOTHER JURISDICTION TO APPLY. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES,  TO THE FULLEST  EXTEND  PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY  PROCEEDING  ARISING OUT OF OR RELATING TO THIS  AGREEMENT OR ANY OF
THE TRANSACTIONS CONTEMPLATED HEREBY.

     Section 13.8 Counterparts.  This Agreement may be executed in counterparts,
each of which  shall be  deemed an  original,  but all of which  together  shall
constitute one and the same instrument,  notwithstanding that all of the Parties
are not signatories to the original or to the same counterpart.

     Section  13.9  Confidentiality.  The  following  provisions  set  forth the
obligations arising out of the disclosure of Confidential Information by a Party
(the  "Disclosing  Party") to another Party (the  "Recipient"  or  "Recipients")
under this Agreement.

     (a)  Agreement of Non  Disclosure  and  Non-Use.  In  consideration  of the
disclosure by a Disclosing Party to a Recipient of Confidential Information, the
Recipient and its officers, directors, partners, employees,  Affiliates, agents,
representatives,  outside auditors, attorneys, and any Third Party Recipient who
have access to the Confidential Information (collectively, "Representatives"):

          (1)  shall keep  Confidential  information  confidential and will not,
     without the prior written consent of such Disclosing Party or as allowed by
     this Agreement, disclose Confidential Information to other Persons; and

          (2)  shall not use  Confidential  Information  other than for purposes
     legitimately related to the operation of the business of the Company and/or
     GridAmerica ITC,  including  ("Approved  Uses");  provided,  however,  that
     subject  to  any  applicable  copyright  rights  of  the  Company,  nothing
     contained herein shall limit the right of the Managing Member or any of its
     Representatives  from using any Confidential  Information of the Company or
     disclosed to the Company by any GridAmerica  Company consisting

                                       60

<PAGE>

     of  methods,   techniques,  rate  design  and  other  similar  Confidential
     Information that relates to the electric  transmission  industry generally,
     and not to the business of a particular  GridAmerica Company (but excluding
     any  software  developed  by the Company or any  GridAmerica  Company,  and
     excluding any  Confidential  Information of an  GridAmerica  Company marked
     "proprietary" by such GridAmerica  Company),  for other than Approved Users
     which are not in competition  with the Company.  Each  Recipient  agrees to
     transmit the Confidential Information of a Disclosing Party only to such of
     the  Recipient's   Representatives   who  need  to  know  the  Confidential
     Information  for the purpose of assisting the  Recipient in Approved  Uses,
     and who are informed of the  provisions  of this Section  13.9. A Recipient
     shall  be  fully   liable  for  any  breach  of  this   Agreement   by  its
     Representatives  and  agrees,  at its  sole  expense,  to  take  reasonable
     measures to restrain its  Representatives  from  prohibited or unauthorized
     disclosure or use of the Confidential Information.

     (b)  Disclosure Required by Subpoena,  Law, Litigation or Legal Process. If
any portion of Confidential Information is required to be disclosed by subpoena,
Law,  litigation,  arbitration  or similar legal  process,  or to a Governmental
Authority,  the  Recipient  will  promptly  inform the  Disclosing  Party of the
existence,  terms and  circumstances  surrounding  such request  before any such
disclosure  is  required  so as to allow the  Disclosing  Party to  protect  the
Confidential  Information.  The Recipient will consult with the Disclosing Party
on the advisability of taking  legally-available  steps to resist or narrow such
request.  The Disclosing Party may thereafter seek to obtain a protective order,
and the Recipient  shall  cooperate with the Disclosing  Party in its efforts to
obtain a protective  order, to restrict access to, and any use or disclosure of,
the  Confidential   Information,   at  the  expense  of  the  Disclosing  Party.
Notwithstanding  anything else to the contrary  contained  herein,  Confidential
Information  that is  required to be  disclosed  in the  ordinary  course of the
Company's business to MISO or to the Commission or other Governmental  Authority
pursuant to Law or the MISO  Agreement  may be so disclosed  without  compliance
with this Section 13.9(b).

     (c)  Disclosure In Connection  with Financing  Transactions  or Transfer of
Units.  In  the  event  that  a  Recipient  desires  to  disclose   Confidential
Information  in  connection  with a  financing  or  other  similar  transaction,
including as part of the due diligence  requested by a proposed  counterparty (a
"Third  Party  Recipient"),   such  Recipient  may  disclose  such  Confidential
Information  to such Third Party  Recipient only after receipt by such Recipient
from  such  Third-Party  Recipient  of a  confidentiality  agreement  containing
substantially the terms and conditions set forth in this Section 13.9; provided,
however, that no competitively sensitive Confidential  Information concerning an
GridAmerica  Company may be disclosed to any Person that is a direct  competitor
of such  GridAmerica  Company without such  GridAmerica  Company's prior written
consent.

     (d)  Disclosure  in  Connection  with  Dispute.  A Recipient  may  disclose
Confidential  Information  to (i) the Panel in  connection  with an  Arbitration
pursuant to Section 12.2,  (ii) to the  Commission  in  connection  with a Claim
being heard by the Commission and (iii) to a court in connection  with a dispute
being heard by such court;  provided,  however,  that the  Recipient  shall take
reasonable steps to protect the confidentiality of such Confidential Information
and,  where the  Recipient  would not be  materially  adversely  affected by its
disclosure to the Disclosing  Party of its intent to disclose such  Confidential
Information in

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<PAGE>

connection with a dispute as provided above,  the Recipient shall so disclose to
the Disclosing  Party the  Recipient's  intent to so disclose such  Confidential
Information so as to allow the Disclosing  Party the opportunity to protect such
Confidential  Information.  In such case, the Recipient shall cooperate with the
Disclosing Party in its efforts to obtain a protective order, to restrict access
to, and any other use or disclosure of, the Confidential Information.

     (e)  Survival of Obligations.  The obligations with respect to Confidential
Information set forth herein shall survive the termination of this Agreement for
five (5) years.  Upon the  termination of the obligations of this Agreement with
respect to an item of Confidential  Information,  the Recipient shall be free to
use and disclose such item of  information  freely and without any obligation to
the Disclosing Party.

     (f)  Ownership of Confidential Information.  Each Disclosing Party reserves
its  (and,  if  applicable,  its  licensor's)  ownership  rights  in  and to its
Confidential  Information  disclosed to a Recipient and only grants a license to
use such  Confidential  Information  for the Approved  Uses.  In addition,  each
Recipient  agrees  that  it does  not  acquire  any  ownership  interest  in the
Confidential Information of any Disclosing Party by virtue of the combination of
such Confidential  Information with other  Confidential  Information,  including
that of the Company.

     Section 13.10 Attorneys' Fees. In any dispute arising hereunder,  the party
prevailing at final  judgment  shall be entitled to recover from the other party
all of its reasonable  attorneys'  fees and costs incurred in such a proceeding,
in addition to any affirmative or injunctive relief that it may receive.

     Section  13.11  Time  is of the  Essence.  Time is of the  essence  of each
provision of this Agreement.

     Section 13.12 Further Assurances. Each Party agrees that it shall hereafter
execute and deliver such further instruments,  provide all information, and take
or forbear such further acts and things as may be reasonably required and useful
to  carry  out  the  intent  and  purpose  of  this  Agreement  and as  are  not
inconsistent with the provisions of this Agreement.

     Section 13.13 Late  Payments.  If a Party does not pay within ten (10) days
of the date  required  hereunder,  all or any portion of an amount such Party is
required  to pay as provided  in this  Agreement  then (i) the amount such owing
Party is  required  to pay shall bear  interest  at (A) the sum of (I) a varying
rate per annum that is equal to the interest  rate  publicly  quoted by The Wall
Street Journal,  from time to time as the prime commercial or similar  reference
interest rate with  adjustments in that varying rate to be made on the same date
as any  change  in that  rate  plus  (II) 2% per  annum or (B) such  lower  rate
required under  applicable  Law,  compounded  annually and (ii) a Party to which
payment is due may take any  action,  at the cost and expense of the owing Party
to obtain  payment by such  owing  Party of the  portion  of such owing  Party's
payment that is in default, together with interest thereon as provided above.

     Section 13.14 Remedies.

     (a)  The Parties  agree that a breach of this  Agreement  by any Party will
result in  irreparable  damage to the other  Parties for which no money  damages
could  adequately  compensate.  In addition to all other  remedies to which such
other  Parties may be entitled at law

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<PAGE>

or in equity,  any Party shall be entitled to seek injunctive relief or specific
performance to restrain or compel the breaching  Party, and each Party expressly
waives any claim that an adequate remedy at law exists for such a breach.

     (b)  Notwithstanding  anything contained in this Agreement to the contrary,
no Party shall be liable to any other Party for indirect, consequential, special
or punitive damages on account of any action or proceeding  brought hereunder or
related hereto.

                                       63



<PAGE>



     IN WITNESS WHEREOF,  this Agreement has been duly executed and delivered by
the duly authorized officer of each party as of the date first above written.

                                      GRIDAMERICA LLC
                                      BY GRIDAMERICA HOLDINGS INC., ITS
                                      MANAGING MEMBER


                                      By:      \s\Nicholas P. Winser
                                         ---------------------------------------
                                      Name:       Nicholas P. Winser
                                      Title:      Chief Executive Officer
                                      Date:       February 14, 2003


                                      GRIDAMERICA HOLDINGS, INC.


                                      By:      \s\Nicholas P. Winser
                                         ---------------------------------------
                                      Name:       Nicholas P. Winser
                                      Title:      Chief Executive Officer
                                      Date:       February 14, 2003






                                       64

<PAGE>


                                      AMEREN SERVICES COMPANY as agent for
                                      Union Electric Company d/b/a AmerenUE and
                                      Central Illinois Public Service Company
                                      d/b/a AmerenCIPS


                                      By:      \s\David A. Whiteley
                                         ---------------------------------------
                                      Name:       David A. Whiteley
                                      Title:      Senior Vice President
                                      Date:       February 14, 2003


                                      AMERICAN TRANSMISSION SYSTEMS,
                                      INCORPORATED


                                      By:      \s\Stanley F. Szwed
                                         ---------------------------------------
                                      Name:       Stanley F. Szwed
                                      Title:      Vice President
                                      Date:       February 14, 2003


                                      NORTHERN INDIANA PUBLIC SERVICE
                                      COMPANY


                                      By:      \s\ Jerry L. Godwin
                                         ---------------------------------------
                                      Name:        Jerry L. Godwin
                                      Title:       Chief Operating Officer
                                      Date:        February 14, 2003


                                      NATIONAL GRID USA


                                      By:   \s\ Richard P. Sergel by Nick Winser
                                         ---------------------------------------
                                      Name:     Richard P. Sergel
                                      Title:    President and CEO
                                      Date:     February 14, 2003



                                       65


<PAGE>

                                                  Schedule A to Master Agreement

                           CERTAIN EXCLUDED EMPLOYEES

Paul Halas

Philip Johnson

Roger Kenyon

Nigel Williams

Nick Winser



                                       66

<PAGE>

                                                  Schedule B to Master Agreement

                              ADDRESSES FOR NOTICE

GridAmerica LLC

GridAmerica LLC
c/o National Grid USA
25 Research Drive
Westborough, MA 01582
Attn:    Nick Winser
         Senior Vice President
Fax:     508-366-5498
with a copy to:
Lawrence J. Reilly, Esq.
Senior Vice President and General Counsel
Fax:     508-389-2605


GridAmerica Holdings Inc.

c/o National Grid USA
25 Research Drive
Westborough, MA 01582
Attn:    Nick Winser
         Senior Vice President
Fax:     508-366-5498
with a copy to:
Lawrence J. Reilly, Esq.
Senior Vice President and General Counsel
Fax:     508-389-2605

Ameren Services Company

Ameren Services Company
One Ameren Plaza
1901 Chouteau Avenue
St. Louis, MO 63103
Attn:    David A. Whiteley
         Senior Vice President
Fax:     314-554-3066


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<PAGE>

Ameren Services Company
One Ameren Plaza
1901 Chouteau Avenue
St. Louis, MO 63103
Attn:    Steven R. Sullivan
         General Counsel
Fax:     314-554-4014

American Transmission Systems, Incorporated

c/o FirstEnergy Service Company
76 South Main Street
Akron, OH 44308
Attn: Stanley F. Szwed
Fax: 330-384-4988

Northern Indiana Public Service Company

Northern Indiana Public Service Company
801 E. 86th Avenue
Merrillville, IN 46410
Attn:    Frank A. Venhuizen
Fax:     219-647-5630

National Grid USA

National Grid USA
25 Research Drive
Westborough, MA 01582
Attn:    Nick Winser
         Senior Vice President
Fax:     508-366-5498
with a copy to:
Lawrence J. Reilly, Esq.
Senior Vice President and General Counsel
Fax:     508-389-2605





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