EXECUTION COPY









                    AMENDED AND RESTATED OPERATION AGREEMENT

                                  by and among

                      UNION ELECTRIC COMPANY d/b/a AmerenUE


                                CENTRAL ILLINOIS
                     PUBLIC SERVICE COMPANY d/b/a AmerenCIPS


                   AMERICAN TRANSMISSION SYSTEMS, INCORPORATED


                     Northern indiana public service company

                                       and

                                 GRIDAMERICA LLC

                                February 14, 2003



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                                TABLE OF CONTENTS


ARTICLE I        DEFINITIONS................................................   2

     1.1.        Definitions................................................   2
     1.2.        Rules of Construction......................................  11

ARTICLE II       AUTHORIZATIONS BY THE TRANSMISSION OWNERS..................  12

     2.1.        Functional Control Authorization...........................  12
     2.2.        Non-transferred Facilities.................................  13
     2.3.        Interconnection Agreements.................................  13
     2.4.        Network Upgrades...........................................  14
     2.5.        Revenue Collection and Distribution........................  15
     2.6.        The Company as Owner of Transmission Facilities;
                     Non-Discrimination.....................................  15

ARTICLE III      RIGHTS, POWERS, AND OBLIGATIONS OF THE GridAmerica
                     ITC......................................................16

     3.1.        Operation And Planning.....................................  16
     3.2         Other Matters..............................................  18
     3.3.        Responsibilities To The Transmission Owner.................  18
     3.4.        Additional Obligations.....................................  21
     3.5.        Information................................................  24

ARTICLE IV       RIGHTS, POWERS, AND OBLIGATIONS OF THE
                     TRANSMISSIONS OWNERS...................................  24

     4.1.        Operation and Planning.....................................  24
     4.2.        Additional Obligations.....................................  24
     4.3.        Payments to the Company....................................  24
     4.4.        Transmission Owners' Remedies..............................  35

ARTICLE V        TERM AND TERMINATION.......................................  36

     5.1.        Term.......................................................  36
     5.2.        Termination................................................  38
     5.3.        Effect of Termination Pursuant to Sections 5.1 or 5.2.3....  39
     5.4.        Effect of Termination Pursuant to Section 5.2.2............  40
     5.5.        Regulatory And Other Approvals Or Procedures...............  41

ARTICLE VI       DISPUTE RESOLUTION.........................................  41

     6.1.        Negotiations...............................................  41
     6.2.        Arbitration................................................  41
     6.3.        Arbitration of Certain Claims Regarding Removal of
                     Managing Member........................................  46


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ARTICLE VII      TAX MATTERS................................................  48

     7.1.        Responsibility for Transmission Owner Taxes................  48
     7.2.        Responsibility for the Company Taxes.......................  48

ARTICLE VIII     FORCE MAJEURE..............................................  49

ARTICLE IX       BREACH, CURE AND DEFAULT...................................  49

     9.1.        Continued Operation........................................  49
     9.2.        Remedies...................................................  49
     9.3.        No Joint Liability.........................................  50

ARTICLE X        MISCELLANEOUS PROVISIONS...................................  50

    10.1.        Not for Benefit of Third Parties...........................  50
    10.2.        Governing Law..............................................  50
    10.3         Successors And Assigns.....................................  50
    10.4         Effect of Waiver...........................................  51
    10.5         Severability...............................................  51
    10.6         Renegotiation..............................................  51
    10.7         Representation And Warranties..............................  51
    10.8         Further Assistance.........................................  52
    10.9         Notices....................................................  53
    10.10        Regulatory Proceedings.....................................  53
    10.11        Entire Agreement; Amendments...............................  53
    10.12        Efforts of the Parties.....................................  53
    10.13        Third-Party Joint Agreements...............................  54
    10.14        Confidentiality............................................  54
    10.15        No Partnership.............................................  57
    10.16        Current Documents..........................................  57
    10.17        Late Payments..............................................  57
    10.18        Counterparts...............................................  57
    10.19        Attorneys' Fees............................................  57
    10.20        Time is of the Essence.....................................  57
    10.21        Representatives............................................  57

APPENDICES

APPENDIX A DESCRIPTION OF TRANSFERRED FACILITIES

APPENDIX B THIRD-PARTY JOINT AGREEMENTS

APPENDIX C NOTICES

APPENDIX D - SCHEDULE 5A - DELINEATION OF FUNCTIONS BETWEEN MIDWEST
                     ISO, GRIDAMERICA AND GRIDAMERICA THREE


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                    AMENDED AND RESTATED OPERATION AGREEMENT

     THIS AMENDED AND RESTATED  OPERATION  AGREEMENT is made and entered into as
of the 14th day of February,  2003 by and among (i) UNION ELECTRIC COMPANY d/b/a
AmerenUE  and  CENTRAL   ILLINOIS  PUBLIC  SERVICE   COMPANY  d/b/a   AmerenCIPS
(collectively,  "Ameren,"  and for all  purposes  of this  Agreement,  a  single
Transmission Owner),  AMERICAN TRANSMISSION SYSTEMS,  INCORPORATED ("ATSI"), and
NORTHERN  INDIANA PUBLIC SERVICE COMPANY  ("NIPSCO"),  (ii)  GRIDAMERICA  LLC, a
Delaware  limited  liability  company  (the  "Company"),  each of  which  may be
referred to as a "Party", or collectively as the "Parties."

                                    RECITALS

     WHEREAS,  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;

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

     WHEREAS,  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 within the Midwest ISO.

     WHEREAS, Ameren, ATSI and NIPSCO wish to comply with Order No. 2000 through
the formation of an Independent Transmission Company within the Midwest ISO.

     WHEREAS,  on  October  31,  2002,  (i)  Ameren,  ATSI and  NIPSCO (or their
applicable affiliates),  National Grid USA ("NGUSA"), the Initial Member and the
Company  entered  into a Master  Agreement  dated as of  October  31,  2002 (the
"Original Master  Agreement"),  (ii) the Initial Member 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");

     WHEREAS,  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;

     WHEREAS, each Transmission Owner agrees to transfer Functional Control over
its  Transmission  Facilities to the Company and desires the Company to exercise
Functional Control


<PAGE>



over its Transferred Facilities on the terms and conditions set forth herein and
in the MISO ITC Agreement;

     WHEREAS,   the  Company  agrees  to  accept  Functional  Control  over  the
Transferred  Facilities of the  Transmission  Owners on the terms and conditions
set forth  herein and in the MISO ITC  Agreement,  in each case as  modified  in
compliance with the FERC Approving Order.

     NOW  THEREFORE,   in  consideration   of  the  premises,   and  the  mutual
representations,  warranties,  covenants,  and agreements hereinafter set forth,
and for other good and valuable  consideration,  the receipt and  sufficiency of
which  are  hereby  acknowledged,  and  intending  to  be  legally  bound,  each
Transmission  Owner,  each acting in its  individual  capacity,  and the Company
agree to amend and restate the Original  Operation  Agreement in its entirety as
follows:

                                    ARTICLE I
                                   DEFINITIONS

     1.1  Definitions.  Terms with initial capitalization used in this Agreement
without other definition shall have the meanings specified in this Article I.

     "AAA" shall have the meaning given in Section 6.2(a).

     "Acceptable  Credit  Bank"  shall mean a bank that (i) is subject to review
and examination by a federal  Governmental  Authority,  (ii) is in good standing
with such authority,  (iii) has combined capital,  surplus and undivided profits
aggregating  not less than $500 million and (iv) has  unsecured  long-term  debt
rated at least "A-" by  Standard  and Poor's  Ratings  Group and "A3" by Moody's
Investors Service.

     "Accounting  Failure"  shall mean a material  deficiency  in the  Company's
accounting  practices or systems as identified in an audit conducted pursuant to
the terms of this Agreement.

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

     "Additional Claim" shall have the meaning given in Section 6.2(i).

     "Additional Term" shall have the meaning given in Section 5.1.

     "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.


                                       2

<PAGE>


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

     "Ameren" shall have the meaning given in the preamble.

     "Ancillary Services" shall have the meaning given in the MISO OATT.

     "Applicable Laws and Regulations" shall mean all applicable federal,  state
and local Laws,  ordinances,  rules and  regulations,  and all duly  promulgated
orders and other duly authorized  actions of any  Governmental  Authority having
jurisdiction over a Party, its facilities and/or the services it provides.

     "Approved Uses" shall have the meaning given in Section 10.14(a)(ii).

     "Arbitration" shall have the meaning given in Section 6.2.

     "Arbitration Notice" shall have the meaning given in Section 6.2(b).

     "Arbitration Rules" shall have the meaning given in Section 6.2(a).

     "ATSI" shall have the meaning given in the preamble.

     "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.

     "Cause"  shall mean (i) Gross  Negligence  that  causes,  or is  reasonably
likely  in the  future  to  cause,  a  Material  Adverse  Effect,  (ii)  Willful
Misconduct  that  causes,  or is  reasonably  likely in the  future to cause,  a
Material  Adverse  Effect or (iii) in the case of the Initial Member as Managing
Member (A) the occurrence of any two Counted Years during any five calendar year
period,  or (B) the failure of NGUSA to comply in any material  respect with any
of its  obligations  set forth in  Article  III or  Section  10.1 of the  Master
Agreement.

     "Claimant Party" shall have the meaning given in Section 6.2(b).

     "Claims" shall have the meaning given in Section 6.2(a).

     "Collection Account" shall have the meaning given in Section 3.3.4(a).

     "Commission" or "FERC" shall mean the Federal Energy Regulatory  Commission
or any successor agency.

     "Company Payments" shall have the meaning given in Section 3.4.1(b).

     "Company"  shall mean  GridAmerica  LLC and any  wholly-owned  subsidiaries
created for the purpose of satisfying state domestication requirements.

     "Confidential  Information"  shall mean all  confidential  or trade  secret
information  of a  Disclosing  Party  provided to a Recipient  pursuant to or in
connection  with any  Transaction

                                       3

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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.

     "Counted  Year"  shall  mean (i) any  calendar  year in which the  Managing
Member would have had liability  under  Section  11.8(e)(i) of the LLC Agreement
but for the  application  of the  limitation  contained  in  clause  (ii) of the
proviso  to  such  Section  11.8(e)(i)  or (ii)  any  calendar  year  that is an
Operation Agreement Counted Year; provided,  however, that there may be only one
Counted Year in any calendar year.

     "Disclosing Party" shall have the meaning given in Section 10.14.

     "Dispute Parties" shall have the meaning given in Section 6.2(b).

     "Early  Termination  Event"  shall  have  the  meaning  given  in  the  LLC
Agreement.

     "Effective Date" shall mean October 31, 2002.

     "Emergency" shall mean an event or situation which poses an imminent threat
of material  damage to property or injury  (including  death) to persons,  or is
imminently  likely to cause a material  adverse  effect on the  security  of the
Transmission  System or the  electrical  or  transmission  systems  of any other
Person interconnected to the Transmission System.

     "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.

     "Fair Market Value" shall have the meaning given in the Master Agreement.

     "FERC Approving Order" shall have the meaning given in the recitals hereof.

     "Force Majeure" shall have the meaning given in the MISO OATT.

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     "Functional Control" shall mean the exercise by the Company of control over
the  operation  of  the  Transmission  System  and  performance  of  all  of the
activities contemplated by Order 2000.  Notwithstanding anything to the contrary
in this  Agreement,  Functional  Control  shall  include all  activities  now or
hereafter  required  under  Applicable  Laws and  Regulations to be performed by
RTOs.

     "Generator"  shall mean an Entity  that owns or  controls  and  operates an
electric power generation facility which produces electrical energy.

     "Good  Business   Practice"  shall  mean  (i)  the  Company's  exercise  of
Functional  Control  over the  Transferred  Facilities,  except  as ceded to the
Midwest  ISO under  the MISO ITC  Agreement,  in  accordance  with Good  Utility
Practice and (ii) the Company's fulfillment in a commercially  reasonable manner
and,  where  applicable,  in  accordance  with  Good  Utility  Practice,  of its
obligations hereunder and under the other Transaction Agreements, all Applicable
Laws and Regulations and all other agreements to which the Company is a party.

     "Good  Business  Practice  Breach"  shall have the meaning given in Section
3.4.1(a).

     "Good Utility Practice" shall have the meaning given in the MISO OATT.

     "Governmental  Authority"  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 the Master Agreement.

     "GridAmerica  ITC" shall mean the ITC created by the  Transmission  Owners,
the Company and NGUSA  pursuant to the Master  Agreement,  the LLC Agreement and
this Agreement.

     "Gross  Negligence"  shall mean the gross  negligence of (i) the Company in
the performance of its duties or obligations  under this Agreement other than in
its capacity as an owner of facilities  that  comprise part of the  Transmission
System or (ii) any Affiliate of the Company that provides services to or for the
benefit of the  Company in the  performance  of those  services,  other than any
Affiliate which owns facilities that are part of the Transmission  System in its
capacity as such.

     "Indemnified Owners" shall have the meaning given in Section 4.2.4(a).

     "Indemnified Party" shall have the meaning given in Section 4.2.5(a).

     "Indemnifying Owner" shall have the meaning given in Section 4.2.4(a).

     "Indemnity Cap" shall have the meaning given in Section 4.2.4(c).

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     "Indemnifying Party" shall have the meaning given in Section 4.2.5(a).

     "Independent  Transmission  Company"  or "ITC"  shall  mean an  independent
transmission company approved pursuant to Commission order or regulation.

     "Initial Management Fee" shall have the meaning given on the LLC Agreement.

     "Initial Member" shall have the meaning given in the LLC Agreement.

     "Initial  Public  Offering"  shall  have  the  meaning  given  in  the  LLC
Agreement.

     "Initial  Term" shall mean the period  commencing on the Effective Date and
ending on the fifth anniversary of the Transmission Service Date.

     "Interconnection Agreement" shall mean an agreement between the Company and
either (i) a Generator governing the terms and conditions of the interconnection
of a generation facility to the Transmission System or (ii) a local distribution
entity governing the terms and conditions of the interconnection of distribution
facilities to the Transmission System.

     "Interconnection  Customer"  shall mean a Generator  or local  distribution
entity which has entered into an Interconnection Agreement.

     "Interconnection  Procedures"  shall  mean  those  procedures  and  form of
agreement  governing the  interconnection  of the facilities of a Generator or a
local distribution entity with the Transferred  Facilities which are established
by the Company and effective  pursuant to Applicable  Laws and  Regulations  or,
prior to such effectiveness,  the MISO OATT and the interconnection protocols of
the Midwest ISO, as each may be amended, modified or otherwise supplemented from
time to time.

     "Interconnection  Service"  shall,  with respect to a  Generator,  have the
meaning  given in the MISO  OATT,  and,  with  respect  to a local  distribution
entity,  have the meaning  given in the  Interconnection  Agreement  between the
Company and such local distribution entity.

     "ITC Order" shall mean the order issued by the Commission  authorizing  the
Company to operate as an ITC within the Midwest ISO pursuant to the terms of the
MISO ITC  Agreement  and any other  order of the  Commission  pertaining  to the
Company's rights or responsibilities with respect to the Transferred Facilities.

     "Law" shall mean any applicable  constitutional  provision,  statute,  act,
code (including the United States Internal Revenue Code of 1986, as amended from
time  to  time),  law,  regulation,  rule,  ordinance,  order,  decree,  ruling,
proclamation,  resolution,  judgment, decision,  declaration, or interpretive or
advisory opinion of a Governmental Authority.

     "Liability Cap Amount" shall mean, in any calendar year, an amount equal to
the Initial Management Fee for such calendar year.

                                       6

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     "LLC  Agreement"  shall mean the Amended  and  Restated  Limited  Liability
Company  Agreement of 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.

     "Lockbox Account" shall have the meaning given in Section 3.3.4(a).

     "Lockbox Bank" shall have the meaning given in Section 3.3.4(a).

     "Lockbox Subaccount" shall have the meaning given in Section 3.3.4(a)(ii).

     "Losses" shall mean any and all damages,  losses, claims,  demands,  suits,
recoveries, costs, expenses, liabilities to third parties, reasonable attorneys'
fees, and penalties or other sanctions imposed by Governmental Authorities.

     "Majority of Indemnifying Transmission Owners" shall have the meaning given
in Section 4.2.5(b).

     "Management Fee" shall have the meaning given in the LLC 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 the Company
will exercise under the MISO ITC Agreement.

     "Master  Agreement"  shall mean the Amended and Restated  Master  Agreement
dated as of February  14, 2003 among the  Company,  NGUSA and each  Transmission
Owner  or its  applicable  Affiliate  as the same may be  amended,  modified  or
otherwise supplemented and in effect from time to time.

     "Material  Adverse Effect" means an effect that is, or is reasonably likely
to be,  materially  adverse to the  business,  assets,  condition  (financial or
otherwise) or operations of the Transmission System taken as a whole.

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

     "Midwest  ISO"  shall  mean the  Midwest  Independent  Transmission  System
Operator, Inc.

     "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.

     "MISO OATT" shall mean the Open Access  Transmission  Tariff of the Midwest
Independent  Transmission System Operator, Inc. on file with the Commission,  as
it may be amended, modified or otherwise supplemented and in effect from time to
time.

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     "NERC"  shall  mean the  North  American  Reliability  Council,  applicable
regional electric reliability councils, or successor organizations.

     "Net Plant" or "net  plant"  shall  mean,  as of the 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 FERC 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.

     "Network Upgrades" shall have the meaning given in the MISO OATT.

     "NGUSA" shall mean National Grid USA.

     "NIPSCO" shall have the meaning given in the preamble.

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

     "Non-transferred  Facilities"  shall mean, with respect to any Transmission
Owner,  such  Transmission  Owner's  transmission  facilities  and  distribution
facilities (i) which are not Transferred Facilities, but which are necessary for
the  provision  of  Transmission  Service or Wholesale  Distribution  Service to
Eligible  Customers  pursuant  to the MISO OATT and which may be  subject  to an
agency  agreement;   and  that  are  disclosed  to  the  Company  prior  to  the
Transmission  Service  Date or (ii) as a  Transmission  Owner  may  subsequently
include as "Non-transferred Facilities" for purposes of this Agreement.

     "Notice of Removal Dispute" shall have the meaning given in Section 6.3.2.

     "Operation  Agreement Counted Year" shall mean a calendar year with respect
to which either (i) any Transmission  Owner shall have any indemnity  obligation
to the Company  pursuant to Section  4.2.4(c)  with respect to any Good Business
Practice  Breach  or (ii) any  Transmission  Owner  would  have had a claim  for
indemnification against the Company pursuant to Section 3.4.1(a) with respect to
any claim occurring in such year and involving any Good Business Practice Breach
but for the fact  that  the  amount  of  Losses  suffered  or  incurred  by such
Transmission  Owner with  respect to such claim  plus the  Company  Payments  in
respect of Losses  occurring in such year  exceeded the Liability Cap Amount for
such year.

     "Operational  Failure"  shall mean in any calendar  year (a) the failure of
the Company to perform the  functions it is permitted to perform  under the MISO
ITC  Agreement  with respect to the delivery of more than (i) 0.01% of the total
megawatt hours of Transmission  Transactions

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<PAGE>

within  the  Transmission  System or (ii) 0.4% of the  total  megawatt  hours of
approved  Transmission  Transactions  for a particular  contract path within the
Transmission  System or (b) any damage to  facilities  that comprise part of any
Transmission Owner's Transferred Facilities caused solely by the approval by the
Company  to the extent  permitted  under the MISO ITC  Agreement  of a volume of
Transmission  Transactions that exceed the capacity of the affected  facilities;
provided,  however, that failures caused by (i) Force Majeure occurrences,  (ii)
the failure of a  Transmission  Owner to follow Good  Utility  Practice or (iii)
circumstances  arising on an  interconnected  transmission  system  shall not be
considered in determining whether an Operational Failure has occurred.

     "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 an RTO.

     "Overpaid Party" shall have the meaning given in Section 3.3.4(c).

     "Overpayment" shall have the meaning given in Section 3.3.4(c).

     "Panel" shall have the meaning given in Section 6.2(d).

     "Party" shall have the meaning given in the preamble.

     "Pass-Through  Basis"  shall mean that the  obligation  of a Party making a
payment to another Party under this  Agreement  shall be only to pay that amount
which  such  Party  receives  from a third  party  in  respect  of such  payment
obligation to such Person.

     "Payment Event" shall have the meaning given in Section 4.2.4(c).

     "Percentage Interests" shall have the meaning given in the LLC Agreement.

     "Person" shall mean any natural person or Entity.

     "Recipient" shall have the meaning given in Section 10.14.

     "Regional Transmission  Organization" or "RTO" shall have the meaning given
in 18 C.F.R ss.  35.34(b)(1) of the  Commission's  regulations or such successor
definition approved by the Commission.

     "Related Proceeding" shall have the meaning given in Section 6.2(c).

     "Removal Arbitration" shall have the meaning given in Section 6.3.

     "Removal Claim" shall have the meaning given in Section 6.3.

     "Removal Claimant" shall have the meaning given in Section 6.3.2.

     "Removal Dispute Parties" shall have the meaning given in Section 6.3.2.

                                       9

<PAGE>

     "Removal Notice " shall have the meaning given in Section 6.3.2.

     "Removal Respondent Party" shall have the meaning given in Section 6.3.2.

     "Representatives" shall have the meaning given in Section 10.14(a).

     "Respondent Party" shall have the meaning given in Section 6.2(b).

     "SEOs" shall have the meaning given in Section 6.1.

     "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 Transmission  Owners 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 this Agreement or are owned by the
Company with a Net Plant  greater than 66.67% of the  aggregate Net Plant of all
Transmission  Facilities  subject  to such  Functional  Control  of the  Company
pursuant to this  Agreement  or are 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
this 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 (as defined in
the LLC  Agreement).  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.

     "Taxes" shall mean all taxes,  charges,  fees, levies,  penalties,  and all
other  assessments  imposed by any Governmental  Authority,  including,  but not
limited to,  income,  excise,  property  sales,  transfer,  franchise,  payroll,
withholding, social security, or other taxes, including any interest, penalties,
or additional charges attributable thereto.

     "Tax Return"  shall mean any return,  report,  information  return or other
document (including any related or supporting  information) required to be filed
with or supplied to any Governmental Authority with respect to Taxes.

     "Third Party Claims" shall have the meaning given in Section 4.2.4(c).

     "Third Party Recipient" shall have the meaning given in Section 10.14(c).

     "Transaction Agreements" shall have the meaning given in the LLC Agreement.

     "Transferred  Facilities"  shall  mean,  with  respect to any  Transmission
Owner, the Transmission  Facilities owned by such Transmission  Owner, for which
Functional  Control  has  been  transferred  to the  Company  pursuant  to  this
Agreement and in compliance with Applicable Laws and Regulations,  and which are
described on such Transmission  Owner's subappendix to Appendix A, as Appendix A
may be  amended,  modified  or  otherwise  supplemented  from  time  to  time in
compliance with Applicable Laws and Regulations.

                                       10

<PAGE>

     "Transmission  Business" shall mean, with respect to a Party, its business,
assets,  and activities  relating to the  transmission  of  electricity  through
Transferred Facilities.

     "Transmission Customer" shall have the meaning given in the MISO OATT.

     "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  Owner" shall mean a Person who is a Party to this  Agreement
and transfers Functional Control of Transmission  Facilities to the Company. The
initial Transmission Owners are Ameren, ATSI, NIPSCO.

     "Transmission  Service" shall mean "Transmission Service" as defined in the
MISO OATT and "Network Integration  Transmission Service" as defined in the MISO
OATT but shall not include Interconnection Service.

     "Transmission  Service  Date"  shall have the  meaning  given in the Master
Agreement.

     "Transmission System" shall mean Transferred Facilities and Non-transferred
Facilities taken as a whole.

     "Transmission Transaction" shall mean Transmission Service scheduled by the
Company to the extent permitted by the MISO ITC Agreement.

     "Transmission User" shall have the meaning given to the term "Users" in the
MISO OATT.

     "Underpaid Party" shall have the meaning given in Section 3.3.4(c).

     "Underpayment" shall have the meaning given in Section 3.3.4(c).

     "Willful  Misconduct"  shall mean (i) an act or omission by (A) the Company
in the performance of its duties or obligations  under this Agreement or (B) any
Affiliate thereof that provides services to or for the benefit of the Company in
the  performance  of such  services,  in either case,  that is in disregard of a
known,  reasonably knowable or reasonably obvious risk that harm to the Company,
any  Transmission  Owner, or any of the facilities  included in the Transmission
System is likely to follow or (ii) a deliberate  breach of this Agreement by (A)
the Company in respect of any of its duties or obligations  hereunder or (B) any
Affiliate  thereof that provides  services to or for the benefit of the Company,
in either case, in the performance of such services;  provided, however, that an
act by the Company in its capacity as an owner of facilities  that comprise part
of the  Transmission  System or any act or omission of an  Affiliate  which owns
facilities  that are part of the  Transmission  System in its  capacity  as such
shall not be considered Willful Misconduct.

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

                                       11

<PAGE>

     (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;

     (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 or Appendix
          means a Section or  Article  of, or an  Appendix  to,  this  Agreement
          unless another agreement is specified; and

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

                                   ARTICLE II
                    AUTHORIZATIONS BY THE TRANSMISSION OWNERS

     2.1  Functional  Control  Authorization.  Each  Transmission  Owner  hereby
agrees that on and as of the  Transmission  Service Date the Company shall,  and
the  Company  hereby  agrees  to,  (i)  assume  Functional   Control  over  such
Transmission  Owner's Transferred  Facilities,  and (ii) cede to the Midwest ISO
those  functions  set forth in the MISO ITC Agreement to be ceded to the Midwest
ISO,  in each case for the Initial  Term and any  Additional  Term.  The Company
shall not  exercise  direct  physical  control over the  Transferred  Facilities
except  as set  forth  in  this  Agreement  or in a  separate  agreement  with a
Transmission Owner.  Notwithstanding  the foregoing,  the Parties shall not have
any rights,  duties,  or obligations under this Agreement until the Transmission
Service  Date has  occurred,  except  with  respect to the  Parties'  respective
rights,  duties, and obligations under Articles V, VI, VII, IX and X hereof, and
so much of Article I hereof as is applicable. If a Person becomes a Transmission
Owner pursuant to Section  3.4.3,  the Company shall assume  Functional  Control
over the Transferred  Facilities of such Transmission  Owner on the later of (i)
the date set forth in the amendment  hereto entered into

                                       12

<PAGE>

between the Company and such  Transmission  Owner  pursuant to Section 3.4.3 and
(ii) the Transmission Service Date.

     2.2  Non-transferred  Facilities.  Each Transmission  Owner hereby appoints
the Company as its agent (and the Company  hereby agrees to serve as such agent)
to exercise  Functional  Control over  Non-transferred  Facilities to the extent
necessary for the Company to perform its  obligations  under this  Agreement and
the MISO ITC Agreement.  Upon the Company's  request,  each  Transmission  Owner
further  agrees to provide  the  Company  with all  information  relating to its
Non-transferred  Facilities  that is necessary or appropriate for the Company to
perform its obligations  under this Agreement and the functions set forth in the
MISO ITC Agreement. The agency authorization set forth in this Section 2.2 shall
not be construed as  authorizing  the Company to enter into any  agreement  that
creates  any  liability,   costs,  or  other  obligation  to  be  borne  by  any
Transmission  Owner that is not expressly set forth in the MISO OATT or to enter
into  any  agreement  providing  for  Interconnection  Service  with  regard  to
Non-transferred Facilities.

     2.3  Interconnection  Agreements.  Each Transmission Owner acknowledges and
agrees  that the  Company  is  obligated  under  the MISO  ITC  Agreement  to be
responsible for Interconnection Service on the Transferred  Facilities.  Whether
or not  the  Transmission  Owner  also is a party  to any  such  Interconnection
Agreement,  each  Transmission  Owner  authorizes  the  Company  to  enter  into
Interconnection  Agreements  and related  agreements  involving its  Transferred
Facilities (but not its Non-transferred  Facilities) in accordance with the MISO
ITC Agreement and the Interconnection Procedures. Each Transmission Owner shall,
upon the  reasonable  request of the Company,  cooperate in the  performance  of
activities   necessary  to  implement   requests  for   interconnection  to  its
Transferred  Facilities and necessary to implement the terms of  Interconnection
Agreements  and  other  agreements  related  thereto.  To the  extent  that such
Interconnection  Agreements require the Company to design,  procure,  construct,
install,   and/or  maintain  upgrades  to  a  Transmission  Owner's  Transferred
Facilities or  interconnection  facilities  between the point of interconnection
and a Transmission Owner's Transferred Facilities, such Transmission Owner shall
perform such  activities  (including  providing for the design,  procurement and
construction  of the necessary  facilities) to the extent directed by, and under
the supervision of, the Company. Such Transmission Owner shall timely provide to
the Company an estimate of the costs such Transmission Owner expects to incur in
the performance of such  activities.  To the maximum extent  permitted under the
MISO ITC Agreement and the Interconnection Procedures, the Company shall require
an interconnecting  Generator or local distribution  entity, as the case may be,
to provide funds in advance of construction in amounts  sufficient to compensate
the  affected  Transmission  Owner  for the  amount  estimated  by the  affected
Transmission  Owner  as  the  cost  to  be  incurred  in  connection  with  such
interconnection  facilities and any associated  interconnection  system upgrades
and  the  Company  shall  remit  such  funds  to  the  Transmission  Owner  on a
Pass-Through   Basis.   If  the   Company  is  not   permitted   to  require  an
interconnecting  Generator or local  distribution  entity to provide  funding in
advance,  the Company shall,  to the extent  permitted by the MISO ITC Agreement
and the  Interconnection  Procedures,  assist the Transmission Owners to recover
their verifiable  costs of performing  interconnection  activities.  In no event
shall the Company be responsible  for payments to the  Transmission  Owner other
than on a  Pass-Through  Basis  except as  follows:  (i) to the extent  that the
Company fails to require  advance  funds and/or  credit  support in an amount no
less  than the  amount  estimated  by the  Transmission  Owner  or as  otherwise
determined in an appropriate

                                       13

<PAGE>

proceeding  as the cost to be incurred in connection  with such  interconnection
facilities and any associated interconnection system upgrades, provided that the
Company is  permitted  to require  such amount of advance  funds  and/or  credit
support  under  the MISO  ITC  Agreement,  the  Interconnection  Procedures  and
Applicable  Laws and  Regulations or (ii) if the Company  initiates a proceeding
(except as is necessary or appropriate  to comply with a Commission  requirement
or Commission policy) to reduce the credit support  requirements with respect to
interconnection  customers  generally or that  customer in  particular  from the
levels  permitted  under the  Interconnection  Procedures  without  the  written
consent of the  Transmission  Owners and such credit approval  requirements  are
reduced as a result of such  proceeding.  Any  interconnection  system  upgrades
and/or  interconnection  facilities constructed or installed on the Transmission
System side of the point of interconnection  and such other facilities as may be
identified  in  regard  to  the  interconnection   shall  become  part  of  such
Transmission  Owner's Transferred  Facilities subject to this Agreement.  To the
extent  the  Company  possesses  property  rights  in any  such  interconnection
facilities,  the Company shall execute  appropriate and customary bills of sale,
easements, deeds, assignments, and other documents as may be necessary from time
to time to convey to such  Transmission  Owner any  property  interest  that the
Company  may have in such  assets  free and clear of all liens and  encumbrances
created by the Company.

     2.4  Network Upgrades. Each Transmission Owner acknowledges and agrees that
the  Company  is  obligated  under the MISO ITC  Agreement  to use  commercially
reasonable  efforts to  construct  Transmission  Facilities  as  directed by the
Midwest ISO in order to enable the Midwest ISO to provide  Transmission  Service
pursuant to the MISO OATT.  Each  Transmission  Owner  authorizes the Company to
enter into agreements with Transmission  Customers involving Network Upgrades to
its  Transferred  Facilities  which are  necessary  or  desirable  to enable the
Company  to  perform  its  obligations  under  this  Agreement  and the MISO ITC
Agreement, provided that all such agreements shall be entered into in accordance
with the MISO OATT. Each Transmission  Owner shall, upon the reasonable  request
of the Company,  cooperate in the performance of activities necessary to fulfill
the terms of any agreement  involving  such Network  Upgrades and any agreements
related  thereto.  To the extent  that such  agreements  require  the Company to
design, procure, construct,  install, and/or maintain upgrades or additions to a
Transmission  Owner's  Transferred  Facilities,  such  Transmission  Owner shall
perform such  activities  (including  providing for the design,  procurement and
construction  of the necessary  facilities) to the extent directed by, and under
the supervision of, the Company. Such Transmission Owner shall timely provide to
the Company an estimate of the costs such Transmission Owner expects to incur in
the performance of such  activities.  To the maximum extent  permitted under the
MISO ITC Agreement and the MISO OATT,  the Company shall require a  Transmission
Customer to provide funds in advance of  construction  in amounts  sufficient to
compensate  the  affected  Transmission  Owner for the amount  estimated  by the
affected  Transmission  Owner as the cost to be incurred in connection with such
Network Upgrades and shall remit such funds to the affected  Transmission  Owner
or Transmission  Owners on a Pass-Through Basis. If the Company is not permitted
to require a Transmission  Customer to provide  funding in advance,  the Company
shall,  to the extent  permitted  by the MISO ITC  Agreement  and the MISO OATT,
assist  each  affected  Transmission  Owner to recover its  verifiable  costs of
performing  the  Network  Upgrade  activities.  In no event shall the Company be
responsible for payments to the Transmission  Owner other than on a Pass-Through
Basis,  except as follows:  (i) to the extent that the Company  fails to require
advance  funds  and/or  credit  support  in an amount  no less  than the  amount
estimated by the Transmission Owner or as

                                       14

<PAGE>

otherwise determined in an appropriate  proceeding as the cost to be incurred in
connection with such Network Upgrades, provided that the Company is permitted to
require such amount of advance  funds and/or  credit  support under the MISO ITC
Agreement,  the MISO OATT and  Applicable  Laws and  Regulations  or (ii) if the
Company initiates a proceeding  (except as is necessary or appropriate to comply
with the MISO  ITC  Agreement,  the MISO  OATT or a  Commission  requirement  or
Commission  policy) to reduce the credit  support  requirements  with respect to
Transmission  Customers  generally or that  Transmission  Customer in particular
from the levels permitted under the MISO ITC Agreement and the MISO OATT without
the  written  consent  of the  Transmission  Owners  and  such  credit  approval
requirements  are reduced as a result of such  proceeding.  Any Network Upgrades
constructed or installed on the Transmission System and such other facilities as
may be  identified  shall  become part of the  applicable  Transmission  Owner's
Transferred  Facilities  subject to this  Agreement.  To the extent the  Company
possesses  property  rights in any such  Network  Upgrades,  the  Company  shall
execute appropriate and customary bills of sale, easements,  deeds, assignments,
and  other  documents  as may be  necessary  from time to time to convey to such
Transmission Owner any property interest that the Company may have in such asset
free and clear of all liens and encumbrances created by the Company.

     2.5  Revenue Collection and Distribution. Prior to the Transmission Service
Date the Transmission  Owners shall provide to the Company written  instructions
specifying  the  manner in which all  revenues  received  for the  provision  of
Transmission  Services  and other  services  provided  pursuant to the MISO OATT
shall be distributed among the Transmission Owners, and the Company shall comply
with such  instructions  unless and until such  instructions  are revised by the
Transmission Owners;  provided,  however, that all revenues comprising incentive
revenues,  whether  received by the  Transmission  Owners directly or indirectly
through the Company,  shall be  determined  and  allocated to the Company and to
each  Transmission  Owner as set forth in Section 4.3.2.  To the extent that the
proper  distribution  of  revenues  requires  a  Transmission  Owner to  provide
information and/or instructions to the Company, the Company shall be entitled to
rely upon such  information  and/or  instructions  provided by the  Transmission
Owner  and  shall  not  have  any  obligation  to   independently   verify  such
information.

     2.6  The Company as Owner of Transmission Facilities; Non-Discrimination.

          2.6.1The Company as Owner of Transmission  Facilities.  If the Company
               acquires any facilities  included in the Transmission  System, it
               shall operate such  facilities  as part of an  integrated  system
               together with the other  facilities  included in the Transmission
               System,  but, except as specifically  provided in this Agreement,
               shall not be deemed to be a  Transmission  Owner pursuant to this
               Agreement; provided, however, that if an Affiliate of the Company
               acquires  facilities  that  comprise  part  of  the  Transmission
               System,  such  Affiliate  shall execute an  assumption  agreement
               assuming  the  rights,  duties  and  obligations  of the  selling
               Transmission  Owner hereunder with respect to such facilities and
               shall be treated as a  Transmission  Owner for all purposes under
               this  Agreement.  Such  Affiliate  shall  assume the same rights,
               duties,  and obligations under this Agreement as the Transmission
               Owner from whom such Affiliate purchased the facilities.

                                       15

<PAGE>

          2.6.2Nondiscrimination.  The Company  shall  perform  its  obligations
               under this  Agreement in a manner that does not  discriminate  in
               favor  of  or  against   the   Transferred   Facilities   of  any
               Transmission  Owner or of the Company or its  Affiliates,  and in
               furtherance  thereof,  shall not engage in activities intended to
               enhance  the  revenue of the  Company or any  Transmission  Owner
               relative  to  another  Transmission  Owner  or the  Company.  The
               Company  shall  treat  the   Transmission   Facilities  that  are
               Transferred  Facilities  but are not owned by the Company and the
               Transmission  Facilities the Company owns as a single  integrated
               business  with  respect  to  operations,  rate  design  and other
               matters  affecting the  financial  return on such assets to their
               owners and, in that  connection,  shall not give undue preference
               to  any  particular   Transmission   Facilities.   The  Company's
               compliance  with this Section  2.6.2 shall be  determined  taking
               into  consideration  the  totality of the  circumstances,  and it
               shall have an absolute  defense to any claim of violation of this
               Section that the action or inaction  complained of was within the
               authority   ceded  to  the  Midwest  ISO  or  undertaken  or  not
               undertaken  at the  direction  of the Midwest ISO pursuant to the
               MISO  ITC  Agreement.  The  fact  that a  Transmission  Owner  is
               disadvantaged  vis-a-vis  any  other  Transmission  Owner  or the
               Company  shall  not  in  itself  constitute  a  violation  of the
               Company's  obligations under this Section.  A Transmission  Owner
               shall  not be  required  to  provide  evidence  of the  Company's
               express intent to disadvantage such  Transmission  Owner in order
               to  demonstrate  that the Company has violated this Section.  The
               Parties   agree  to  submit  all   disputes   relating   to  this
               anti-discrimination  provision to the Commission for  resolution;
               provided,  however,  that a Party may institute an Arbitration if
               the Commission disclaims jurisdiction over a dispute.

                                   ARTICLE III
             RIGHTS, POWERS, AND OBLIGATIONS OF THE GridAmerica ITC

     3.1  Operation And Planning.

          3.1.1 Standards.

               (a)  The  Company  shall  participate  in the  Midwest ISO to the
                    extent  set  forth in the MISO ITC  Agreement.  The  Company
                    shall  perform  its  obligations  under this  Agreement,  in
                    accordance with Good Business Practice.  Notwithstanding the
                    foregoing,  in  recognition of the fact that the Company has
                    ceded  certain  functions  with respect to the  Transmission
                    Facilities  to the  Midwest  ISO  pursuant  to the  MISO ITC
                    Agreement,  the Company shall not be deemed to have violated
                    Good  Business  Practice  by  entering  into  the  MISO  ITC
                    Agreement,  any amendments or modifications  thereto, or any
                    similar   agreements   in   which   one  or  more   Regional
                    Transmission  Organizations  assumes  responsibility for any
                    part of Functional Control of any Transmission Facilities or
                    the operation thereof, and

                                       16

<PAGE>

                    it shall be  absolute  defense to any claim that the Company
                    did not  adhere  to Good  Business  Practices  that  (i) the
                    Midwest  ISO (or  another  RTO) had  responsibility  for the
                    performance  of the function in question  under the MISO ITC
                    Agreement or any similar  agreement or under Applicable Laws
                    and  Regulations  or (ii) that the Company was acting  under
                    instruction  of the  Midwest  ISO  (or  another  RTO)  given
                    pursuant to the MISO ITC Agreement or any similar agreement,
                    provided that the Company shall have  exercised Good Utility
                    Practice in its actions implementing such instructions.

               (b)  The  Company  shall  adhere  to all  applicable  reliability
                    guidelines, policies, standards, rules, regulations, orders,
                    license  requirements  and  all  other  requirements  of the
                    Midwest  ISO,  NERC or the regional  reliability  council of
                    NERC in  which  Transferred  Facilities  are  located,  each
                    Transmission Owner's specific  reliability  requirements and
                    operating guidelines  applicable on the Transmission Service
                    Date and as thereafter  modified by the  Transmission  Owner
                    with the  agreement  of the Company to the extent  permitted
                    under the MISO ITC Agreement,  and all  Applicable  Laws and
                    Regulations.   Disputes  regarding  a  Transmission  Owner's
                    specific  reliability  requirements and operating guidelines
                    shall  be  submitted  to the  Midwest  ISO  for  resolution.
                    Pending resolution of such disputes, to the extent permitted
                    under  the  MISO  ITC  Agreement,   a  Transmission  Owner's
                    specific  reliability  requirements and operating guidelines
                    applicable on the  Transmission  Service Date (or thereafter
                    modified by the  Transmission  Owner with the consent of the
                    Company)  shall be used by the Company  with  respect to the
                    Transmission Owner's facilities until the issue is resolved.

          3.1.2Reliability.   The   Company   hereby   assumes  and  shall  have
               responsibility for the reliability of the Transferred  Facilities
               to the extent permitted under the MISO ITC Agreement,  subject to
               Applicable Laws and Regulations.

          3.1.3Planning  and  Operating  Activities.  The  Company  shall  adopt
               detailed  procedures  for planning and operating the  Transferred
               Facilities,  including  procedures for  developing  plans for the
               expansion and utilization of the  Transferred  Facilities and the
               implementation   of  the   Company's   planning   and   operating
               responsibilities  under the MISO ITC  Agreement.  The  procedures
               adopted  by  the  Company  shall  become   effective  as  of  the
               Transmission  Service Date for all purposes under this Agreement.
               If,  as  of  the   Transmission   Service  Date,  more  than  one
               Transmission  Owner  disagrees  with a  procedure  adopted by the
               Company, then those Transmission Owners which so disagree jointly
               shall  have the right to submit  the  dispute  to an  independent
               engineer  who  is a  Non-Market  Participant  and  is  reasonably
               acceptable to the Company; provided,

                                       17

<PAGE>

               however,  that no such disagreement or dispute resolution process
               shall delay the occurrence of the Transmission  Service Date; and
               provided  further,  that the  procedures  adopted by the  Company
               shall remain in effect pending receipt of the  recommendation  of
               the  independent  engineer.  The  Company  shall  adopt  and make
               effective,   prospectively,  the  procedure  recommended  by  the
               independent  engineer  to the extent such  recommended  procedure
               does not  adversely  affect the ability of the Company to perform
               its  obligations  under the MISO ITC  Agreement or to comply with
               Applicable  Laws and  Regulations.  The  planning  and  operating
               procedures  shall set forth the process by which such  procedures
               may be amended, modified and supplemented from time to time after
               the Transmission Service Date.

          3.1.4Performance of Regulatory Obligations.  The Company shall comply,
               and shall provide such information to each Transmission  Owner as
               each  such  Transmission  Owner  requires  to  comply,  and shall
               otherwise assist each such Transmission Owner in complying,  with
               existing transmission, reporting, operating, filing, and planning
               obligations of each such  Transmission  Owner that are imposed by
               Applicable  Laws and  Regulations  and  which  can no  longer  be
               performed  solely  by  such  Transmission   Owner  following  the
               Transmission Service Date.

     3.2  Other Matters.

          3.2.1Pricing.  The  Company  or one or more  Transmission  Owners  may
               propose  to  the  Commission   such   transmission   pricing  for
               Transmission  Service provided on the Transmission  System to the
               extent permitted under Applicable Laws and Regulations.

          3.2.2Ancillary  Services.  The Company may offer Ancillary Services to
               the  extent  permitted  by the MISO  ITC  Agreement,  subject  to
               Applicable Laws and Regulations.

     3.3  Responsibilities To The Transmission Owner.

          3.3.1Relationship.  Except to the extent that (a) a Transmission Owner
               has divested  some or all of its  Transferred  Facilities  to the
               Company or an  Affiliate  of the Company or (b) the Company and a
               Transmission Owner have, by separate  agreement,  agreed to joint
               ownership of certain  Transferred  Facilities,  the Company shall
               not by reason of this Agreement,  have any ownership  interest in
               the Transferred  Facilities or in any revenues or other monies to
               which a Transmission Owner is entitled hereunder.

          3.3.2Avoidance  of Damage.  If the  Company  undertakes  any action or
               avoidance of any action in compliance  with  instructions  of the
               Midwest ISO issued to the Company  pursuant to the Midwest  ISO's
               functional

                                       18

<PAGE>

               responsibilities under the MISO ITC Agreement, and a Transmission
               Owner reasonably believes that such action or avoidance of action
               would cause damage to the  Transferred  Facilities or any portion
               thereof or any property of the Transmission Owner affected by the
               Company's action or avoidance of action,  such Transmission Owner
               shall promptly advise the Company of the expected consequences of
               the Company's action or inaction and the Company after receipt of
               such  notice  shall  promptly  advise  the  Midwest  ISO of  such
               expected consequences.  Notwithstanding the foregoing, any action
               or avoidance of action by the Company  undertaken  in  compliance
               with an  instruction  issued to the  Company by the  Midwest  ISO
               (after advising the Midwest ISO of the expected consequences) and
               in accordance  with the exercise of Good Business  Practice shall
               not constitute a breach of the Company's  obligations  under this
               Agreement.

          3.3.3 Duty to Maximize  Transmission  System Value.  The Company shall
          use commercially  reasonable  efforts to maximize the long-term value,
          including net  revenues,  of the  Transmission  System so long as such
          efforts are consistent with its reliability responsibilities, customer
          service  obligations and other obligations  under this Agreement,  the
          MISO ITC Agreement and Applicable Laws and Regulations.

          3.3.4 Lockbox Account.

               (a)  The Company  shall  establish  promptly  after the execution
                    hereof  and shall  maintain  at all times a lockbox  account
                    (together with any subaccounts) (the "Lockbox Account") with
                    an  Acceptable  Credit Bank  selected  by the  Company  (the
                    "Lockbox  Bank").  All  payments  for  Transmission  Service
                    received by the Company  shall be  deposited  in the Lockbox
                    Account  to  be   allocated   among  the   Company  and  the
                    Transmission Owners in a manner agreed to by the Parties.

                    The  Company shall:

                    (i)  establish  a  collection   account   (the   "Collection
                         Account")  which  shall be  expressly  designated  as a
                         custodial account  established for the joint benefit of
                         the  Company  and each  Transmission  Owner  into which
                         payments  will be made by the Midwest ISO and any other
                         Person making payments to the Company;

                    (ii) establish a separate  subaccount for each  Transmission
                         Owner and the Company to facilitate the distribution of
                         funds to which each Transmission  Owner and the Company
                         is entitled  on a  Pass-Through  Basis or as  otherwise
                         agreed

                                     19
<PAGE>

                         to  by  the  Parties   (with  respect  to  each
                         Transmission  Owner  and  the  Company,   its  "Lockbox
                         Subaccount"); And

                    (iii)the grant of a security  interest to each  Transmission
                         Owner  in (a)  its  Lockbox  Subaccount  and (b) to the
                         extent of its interests therein, the Collection Account
                         and all amounts deposited therein;

                    (iv) instruct the Lockbox Bank that funds deposited into the
                         Collection  Account may be  transferred  by the Company
                         only  into  the  Lockbox  Subaccounts  referred  to  in
                         Section 3.3.4(a)(ii) pursuant to Section 3.3.4(b).

                    (v)  instruct the Lockbox Bank that each Transmission  Owner
                         and the  Company  shall  have the  right,  without  the
                         consent of any other  Person,  to  withdraw  amounts on
                         deposit in such  Transmission  Owner's or the Company's
                         Lockbox   Subaccount   as  and  when  desired  by  such
                         Transmission Owner and/or the Company.

               (b)  As soon as practical after receipt of collected funds in the
                    Collection Account, the Company shall cause the Lockbox Bank
                    to transfer the share of such funds belonging to each of the
                    Company  and  the  Transmission  Owners  to  its  respective
                    Lockbox Subaccount.  The Company and the Transmission Owners
                    acknowledge  and agree that the Lockbox  Subaccounts and all
                    amounts  deposited  therein are to  constitute  the sole and
                    exclusive  property of the Transmission Owner or the Company
                    in whose name such Lockbox Subaccount is opened.

               (c)  Any  Party  that  acquires  actual  knowledge  that  it  has
                    received  from the Lockbox  Bank funds in excess of those to
                    which such Party is entitled  hereunder  (an  "Overpayment")
                    promptly  shall  provide the Company with written  notice of
                    such overpayment. If within one (1) year of receipt of funds
                    by a Party from the Lockbox Bank such Party  determines that
                    it has received funds less than those to which such Party is
                    entitled hereunder (an "Underpayment"),  such Party promptly
                    shall  provide  the  Company  with  written  notice  of such
                    Underpayment.  If  the  Company  receives  a  notice  of  an
                    Overpayment  or an  Underpayment  pursuant  to this  Section
                    3.3.4(c), the Company immediately shall (i) notify any other
                    Party that may be affected thereby and (ii) review the books
                    and records of the Company  relating  to the  payment(s)  in
                    question  to  ascertain   whether  an  Underpayment   and/or
                    Overpayment  occurred.  Any disputes regarding the existence
                    of an Overpayment or Underpayment and corrective  actions to
                    be taken shall be resolved in accordance with Article VI. If
                    an Overpaid  Party seeks

                                       20

<PAGE>

                    to  terminate  this  Agreement  for any  reason,  then  such
                    Overpaid  Party,  shall,  as a  condition  precedent  to its
                    termination of this Agreement,  pay to the Company, as agent
                    for and for remittance to each Underpaid Party the amount of
                    any Overpayment such Overpaid Party has received.

          3.3.5The  Company  shall  pay any fees of the  Lockbox  Bank and shall
               cooperate  with  each   Transmission   Owner  in  effecting  such
               Transmission Owner's rights under this Section 3.3.5. The Company
               shall also take such further actions,  as such Transmission Owner
               deems  reasonably  appropriate  or  advisable to  effectuate  the
               purposes of this Section  3.3.5,  to enable any Party to exercise
               and enforce its rights and remedies under this Section 3.3.5, and
               to perfect, preserve or protect the interest of such Party in the
               Lockbox Account contemplated by this Section 3.3.5.

     3.4 Additional Obligations.

          3.4.1 Indemnification by the Company.

               (a)  The Company shall indemnify each Transmission Owner from all
                    Losses suffered or incurred by such  Transmission  Owner and
                    arising  out of or caused by any  failure of the  Company to
                    meet  its  obligation  to use  Good  Business  Practices  in
                    connection with the performance of the Company's  duties and
                    obligations  under this  Agreement  (any such failure  being
                    hereinafter   referred  to  as  a  "Good  Business  Practice
                    Breach");  provided,  however,  that,  except as hereinafter
                    provided,  the  Company  shall not be liable for Losses from
                    any claim or series of  related  claims  involving  any Good
                    Business  Practice  Breach (i)  unless  such  Losses  exceed
                    $150,000 in the aggregate,  and then only to the extent that
                    such  Losses  exceed  $150,000  or (ii) if and to the extent
                    that such Losses arising from any claim or series of related
                    claims  occurring  in any  calendar  year  plus all  Company
                    Payments with respect to all other claims  occurring in such
                    calendar  year are greater than the Liability Cap Amount for
                    such calendar year.  Notwithstanding the foregoing,  none of
                    the  limitations  on  liability  contained  in this  Section
                    3.4.1(a) shall apply in respect of any Losses arising out of
                    Gross  Negligence  or Willful  Misconduct  (and the  Company
                    shall be fully  liable  for any breach of any  provision  of
                    this Agreement  arising out of or caused by Gross Negligence
                    or Willful  Misconduct  or  breaches  by the  Company of its
                    obligations  under  Sections 10.7 and 10.14).  To the extent
                    that a claim asserted  against the Company relates to Losses
                    suffered  by more  than  one  Transmission  Owner,  then the
                    Transmission  Owner that  asserted such claim and such other
                    Transmission Owners shall share the indemnification payments
                    made by the Company in respect  thereof in proportion to the
                    Losses suffered by each.

                                       21

<PAGE>

               (b)  The term  "Company  Payments"  means,  with  respect  to any
                    calendar year, the sum of the following determined as of the
                    time in question:

                    (i)  the aggregate  amount of all  indemnification  payments
                         actually  made by the Company  under  Section  3.4.1(a)
                         with respect to claims  occurring in such calendar year
                         with  respect  to  Good  Business   Practice   Breaches
                         (excluding  payments  made out of insurance  proceeds);
                         plus

                    (ii) the aggregate amount of all Losses actually paid or due
                         and payable by the Company (excluding payments made out
                         of insurance  proceeds and excluding the application of
                         any  indemnification  payments  from  the  Transmission
                         Owners  pursuant to Section  4.2.4(c))  with respect to
                         Third   Party   Claims   (other   than  claims  by  the
                         Transmission  Owners  pursuant  to Section  3.4.1(a) of
                         this Agreement)  occurring in such calendar year to the
                         extent  such  claims  involve  Good  Business  Practice
                         Breaches; plus

                    (iii)the aggregate  amount of all "Managing Member Payments"
                         referred to in Section  11.8(f)(i) of the LLC Agreement
                         that are paid by the  Managing  Member  in  respect  of
                         claims occurring in such year;

                    provided,  however,  that no amount paid by the Company as a
                    result  of Gross  Negligence  or  Willful  Misconduct  shall
                    constitute a Company  Payment.  For purposes of  determining
                    the  amount  of  the  Company  Payments  in  respect  of any
                    calendar  year, a claim shall be deemed to have  occurred in
                    such  calendar  year if the facts,  circumstances  or events
                    which  first  gave  rise  to a  Loss  occurred  during  such
                    calendar year,  regardless of when the claim was asserted or
                    when any particular element of Loss was incurred.

               (c)  For the  avoidance  of  doubt,  the  Company  shall  have no
                    indemnification   obligation  under  Section  3.4.1(a)  with
                    respect to Losses arising out of any claim  occurring in any
                    calendar  year  and  which  arises  out of a  Good  Business
                    Practice  Breach to the extent the amount of such  Losses in
                    respect of such claim plus all Company Payments with respect
                    to all other claims in such  calendar  year are greater than
                    the Liability Cap Amount for such calendar year.

               (d)  Any Transmission Owner asserting a claim for damages against
                    the Company  shall,  promptly  after the  initiation of such
                    claim, give notice thereof to the other Transmission  Owners
                    and the  Members,  which  notice must  include a  reasonably
                    detailed description of the

                                       22

<PAGE>

                    basis  for such  claim.  The  Company  and the  Transmission
                    Owners agree that if any Member  asserts a claim against the
                    Managing   Member   arising   out  of  the  same  facts  and
                    circumstances   that   give   rise  to  the   claim  by  the
                    Transmission Owner or Transmission  owners asserting a claim
                    against the Company pursuant to Section 3.4.1(a), such claim
                    may, at the written  request of such Member  received by the
                    Managing Member within thirty (30) days of the date on which
                    such Member received notice of the initiation of such claim,
                    be consolidated  with, and determined in the same proceeding
                    as the claim for  indemnity  asserted  against  the  Company
                    pursuant to Section 3.4.1(a).


          3.4.2Inspection and Auditing Procedures.  The Company hereby grants to
               each Transmission  Owner and its outside auditors and consultants
               such access to the Company's books and records as is necessary to
               verify and audit  compliance by the Company with the requirements
               of this Agreement.  Such access shall be at reasonable  times and
               under reasonable  conditions.  The Transmission  Owners shall use
               reasonable  efforts to  conduct  any such  audits in concert  but
               shall not be prohibited from  exercising  their rights under this
               Section  3.4.2  individually.  The Company shall also comply with
               the  accounting  and  reporting   requirements   of  Governmental
               Authorities having  jurisdiction over the Company with respect to
               the business aspects of its business operations.

          3.4.3Agreements with Additional  Transmission Owners. The Company may,
               from time to time, in its discretion,  enter into an amendment to
               this  Agreement  for the purpose of adding as a Party  hereto any
               Person,  including a Person that is an  Affiliate of the Company,
               that has  Transmission  Facilities that it proposes to subject to
               this  Agreement  upon  a  determination  by the  Company,  in its
               reasonable   discretion,   that  subjecting   such   Transmission
               Facilities  to  this   Agreement  (x)  will  not  result  in  any
               significant  detriment to existing  Transmission  Owners in their
               capacity  as such and (y) is  likely  to  result in long term net
               benefits to the Company;  provided,  however, that either (i) the
               terms of such amendment must not be materially  more favorable to
               the  counterparty  thereto than the terms applicable to the other
               Transmission  Owners  contained  herein or (ii) the Company  must
               offer to make any such  more  favorable  terms  available  to all
               Transmission  Owners  on a  non-discriminatory  basis;  provided,
               further,  that,  so long as it does not  significantly  adversely
               affect any other  Transmission  Owner,  such an amendment to this
               Agreement that is with an owner of  Transmission  Facilities that
               is a  Non-Market  Participant  may be  made  on  terms  that  are
               different  than  those  set forth  herein.  The  Company  may not
               exercise  Functional  Control  over any  Transmission  Facilities
               (other than those it owns) except pursuant to this Agreement.

                                       23

<PAGE>

          3.4.4Insurance.   At  all  times  during  the  effectiveness  of  this
               Agreement,  the Company shall maintain insurance of the types and
               in the  amounts  agreed to by the  Company  and the  Transmission
               Owners.  If a  Transmission  Owner requests the Company to obtain
               insurance  in addition to the types or amount of coverage  agreed
               to, the Company shall obtain such  insurance,  provided that such
               Transmission  Owner  shall  pay  all of the  costs  thereof.  The
               insurers or reinsurers and the Company, to the extent that it has
               a right of  subrogation,  shall  waive all rights of  subrogation
               against the Transmission Owners.

          3.4.5Coordination with State Securitization  Obligations.  The Parties
               acknowledge that a portion of the revenues payable under the MISO
               OATT  in  respect  of  Transmission   Service   provided  over  a
               particular  Transmission  Owner's  Transferred  Facilities may be
               securitized,  pledged, or otherwise subject to superior rights of
               third parties  ("securitized").  The Company shall cooperate with
               such  Transmission  Owner  with  respect  to such  securitization
               obligations.

     3.5  Information.  Subject to the  confidentiality  provisions set forth in
          Section  10.14,   the  Company  shall  provide  such   information  to
          Transmission   Owners  as  is   necessary  or   appropriate   for  the
          Transmission Owners to perform their obligations under this Agreement.

                                   ARTICLE IV
                       RIGHTS, POWERS, AND OBLIGATIONS OF
                             THE TRANSMISSION OWNERS

     4.1  Operation and Planning.

          4.1.1 Standards.

               (a)  Each  Transmission   Owner  shall  physically   operate  its
                    Transferred Facilities in accordance with this Agreement and
                    the MISO OATT and shall comply with the procedures, manuals,
                    and directions of the Company issued in compliance with this
                    Agreement  and the  MISO  ITC  Agreement.  The  Transmission
                    Owners   shall   provide  the   services  to  be   performed
                    individually by Transmission Owners as set forth on Schedule
                    5A  attached  hereto as Appendix  D. No  Transmission  Owner
                    shall take any action that intentionally interferes with the
                    performance of any function by the Company other than to the
                    extent   necessary  to  avoid  an  Emergency  or  during  an
                    Emergency.  This  Section  4.1.1  (a)  shall  apply  to  the
                    Company if the Company  owns  facilities  that comprise part
                    of the Transmission System.

               (b)  Each  Transmission   Owner  shall  operate  its  Transferred
                    Facilities in  accordance  with Good Utility  Practice,  and
                    shall  adhere  to  all  applicable  reliability  guidelines,
                    policies,  standards, rules,

                                       24

<PAGE>

                    regulations, orders, licensing requirements and requirements
                    of NERC or the regional reliability council of NERC in which
                    a facility owned by it is located.  If a Transmission  Owner
                    believes  that  a  direction  given  by  the  Company  is in
                    contravention  of the  requirements  of NERC  or a  regional
                    reliability council of NERC, it shall immediately advise the
                    Company. If a Transmission Owner and the Company disagree as
                    to  whether  such  direction  is  in  contravention  of  the
                    requirements  of NERC or a regional  reliability  council of
                    NERC,  the Company  shall submit such dispute to the Midwest
                    ISO for resolution.  No  Transmission  Owner shall engage in
                    behavior which manipulates  available transfer capability to
                    the detriment of Transmission Users. The Transmission Owners
                    shall  perform all duties and  functions  specified  for the
                    Transmission Owners in this Agreement. This Section 4.1.1(b)
                    shall  apply to the  Company  if the  Company  or any of its
                    Affiliates becomes an owner of facilities that comprise part
                    of the Transmission System.

          4.1.2 Transmission Maintenance.

               (a)  Unless  otherwise  mutually and  expressly  agreed to by the
                    Company and a Transmission  Owner, each  Transmission  Owner
                    (including  the Company if it owns  Transmission  Facilities
                    that comprise part of the Transmission System) shall repair,
                    maintain,  and replace its Transferred Facilities consistent
                    with  Good  Utility  Practice;  provided,  however,  that no
                    Transmission  Owner shall exercise  Functional  Control over
                    the  Transferred  Facilities.  Except as may be  required to
                    exercise  Functional  Control,  the  Company  shall  have no
                    obligation  or any right to repair,  maintain,  or replace a
                    Transmission     Owner's    Transferred     Facilities    or
                    Non-transferred Facilities.

               (b)  The Transmission  Owner shall obtain the Company's  approval
                    for all planned  maintenance  of such  Transmission  Owner's
                    Transferred Facilities. Each Transmission Owner shall submit
                    its  planned  maintenance  schedules  to  the  Company.  All
                    proposed planned maintenance schedules shall be evaluated by
                    the Company on a non-discriminatory  basis. The Company will
                    coordinate  with both the operations and planning  personnel
                    of  the  Transmission   Owners  for  analysis  and  planning
                    purposes  when  a   transmission   maintenance   request  is
                    received.  If requested by the Company, a Transmission Owner
                    will  provide  to the  Company  an  estimate  of  the  costs
                    associated with potential changes to an approved maintenance
                    schedule or any part thereof.

               (c)  After   receiving   a  planned   maintenance   request   for
                    non-critical  Transmission  Facilities (as such term is used
                    in the MISO ITC  Agreement),  the Company shall, in a timely
                    manner,  either

                                       25

<PAGE>

                    approve  the  request  or deny the  request  and  provide an
                    alternative  time  frame in  which  the  maintenance  can be
                    performed;  provided  that any such  approval  shall  not be
                    final and shall be  subject to  further  modification  after
                    receipt by the Company of the Midwest ISO's  approval of the
                    schedule for critical Transmission  Facilities (as such term
                    is  used in the  MISO  ITC  Agreement).  The  Company  shall
                    determine in a nondiscriminatory  manner and with the use of
                    appropriate  analytical  detail  whether,  and,  if so,  the
                    extent to which, a planned transmission  maintenance request
                    for non-critical  Transmission  Facilities affects available
                    transfer capability, Ancillary Services, the security of the
                    Transmission  System,  and any other relevant  matters.  The
                    Company shall submit the  maintenance  schedule for critical
                    Transmission  Facilities  to the Midwest ISO for approval in
                    accordance  with the MISO ITC  Agreement.  The Company shall
                    promptly notify the Transmission  Owner of the Midwest ISO's
                    approval,  disapproval or modification  and shall modify the
                    schedule  for  maintenance  on   non-critical   Transmission
                    Facilities if appropriate. The Company shall communicate the
                    final  planned  maintenance  schedule for  non-critical  and
                    critical   Transmission   Facilities   to  the   appropriate
                    Transmission Owner in a timely manner.

               (d)  If the Company  revokes a planned  transmission  maintenance
                    outage schedule for non-critical  Transmission Facilities of
                    a Transmission  Owner after it has become final, the Company
                    shall  notify  such  Transmission  Owner of the  decision to
                    revoke  approval  of the  maintenance  schedule  as  soon as
                    possible after the circumstances  arise that create the need
                    for the revocation.  If such  Transmission  Owner incurs any
                    additional costs  associated with the deferred  transmission
                    maintenance,  the Company shall compensate on a Pass-Through
                    Basis such Transmission  Owner for all such verifiable costs
                    collected  by the  Midwest  ISO in rates  or other  charges.
                    Revocation of previously approved maintenance  schedules and
                    compensation  for  related  costs  shall  be  applied  in  a
                    non-discriminatory basis.

               (e)  The  Company   shall   document  all  planned   transmission
                    maintenance requests,  the disposition of those requests and
                    all data supporting the disposition of each request.

               (f)  A  Transmission  Owner shall  notify the  Company  when such
                    Transmission  Owner is performing  maintenance on a facility
                    that could  reasonably  be expected  to result in  unplanned
                    outages within the  Transmission  System.  The Company shall
                    coordinate  with  the   Transmission   Owners  to  implement
                    unplanned transmission maintenance as the need may arise. In
                    an  Emergency,   the  applicable  Transmission  Owner  shall
                    immediately  notify the

                                       26

<PAGE>

                    Company of any necessary Emergency transmission  maintenance
                    and the  Transmission  Owner  shall  document  all events of
                    unplanned  transmission  maintenance and all data related to
                    the Emergency necessitating such maintenance. Prior approval
                    by the Company for such Emergency  transmission  maintenance
                    will not be required.

          4.1.3 Construction of New Facilities.

               (a)  The  Transmission  Owners  acknowledge  and  agree  that the
                    Company  may  require  a  Transmission  Owner  to  construct
                    planned Transmission Facilities, whether the construction is
                    required  pursuant to a direction  by the Midwest ISO to the
                    Company or at the  initiative  of the  Company to the extent
                    permitted by the MISO ITC Agreement. Each Transmission Owner
                    and  the  Company  if it is an  owner  of  facilities  which
                    comprise part of the Transmission  System shall construct at
                    its  sole  cost  and  expense  new  Transmission  Facilities
                    reviewed,  approved,  and ordered to be built by the Company
                    in  accordance   with   planning   processes  and  protocols
                    established  by the Company and the Midwest ISO  pursuant to
                    the MISO ITC Agreement and the planning  procedures  adopted
                    by the Company. The Company will develop  non-discriminatory
                    criteria  consistent  with this  Section  4.1.3 to determine
                    which  Party  (including  the  Company  if it is an owner of
                    facilities  comprising part of the Transmission System) will
                    be  obligated to construct  the new  facilities.  If the new
                    Transmission  Facilities  will be directly  connected to the
                    existing facilities of one Transmission Owner or the Company
                    if it is an  owner  of  facilities  comprising  part  of the
                    Transmission  System, that Transmission Owner or the Company
                    will  be  obligated  to  construct  the  new  facilities  if
                    required by the Company.  If two or more Transmission Owners
                    or the  Company  as an owner of  facilities  comprising  the
                    Transmission  System will be interconnected  directly to the
                    new  facilities,   the  Company  will  assign   construction
                    responsibilities  in accordance with the  non-discriminatory
                    criteria  stated in the planning  procedures  adopted by the
                    Company.  Prior  to  the  acceptance  by the  Commission  of
                    coordinated  planning  processes and protocols  developed by
                    the  Midwest  ISO  and  the   Company,   the   planning  and
                    construction  of new  facilities  shall be  governed  by the
                    planning  processes and protocols of the Midwest ISO and the
                    planning  procedures  adopted by the Company,  to the extent
                    such  procedures  are not  inconsistent  with  the  planning
                    processes and protocols of the Midwest ISO.

               (b)  The   non-discriminatory   criteria   shall   include   cost
                    allocation  methods  for  achieving  equity  among  affected
                    Transmission Owners and the Company in circumstances where a

                                       27

<PAGE>

                    disproportionate,   but  otherwise  unavoidable,  burden  is
                    placed on one or more Transmission Owners or the Company for
                    the  construction  of  new  Transmission   Facilities.   Any
                    Transmission  Owner  may  propose  its own  cost  allocation
                    methodology  to the  Commission for the purpose of achieving
                    equity in particular instances.

               (c)  If a  Transmission  Owner that is obligated to construct new
                    Transmission  Facilities requests that the Company construct
                    such  facilities,  the Company  shall have the right but not
                    the  obligation  to  do  so.  If  the  Company  declines  to
                    construct such facilities,  the Transmission Owner initially
                    obligated to construct the facilities shall remain obligated
                    to do so.

               (d)  A  Transmission  Owner,  or  the  Company  as  an  owner  of
                    facilities  comprising part of the Transmission  System, may
                    satisfy its construction  responsibilities by arranging that
                    another party will  construct,  finance,  and/or own the new
                    Transmission Facilities. If the third party fails to perform
                    within  the  period of time  specified  by the  Company  for
                    construction of such new facilities,  the Transmission Owner
                    or the  Company,  in the case of  facilities  for  which the
                    Company has  accepted the  obligation  to  construct,  shall
                    remain obligated to undertake the construction.  The Company
                    shall determine in a non-discriminatory  manner whether such
                    third party can meet all  necessary  criteria for  financing
                    and/or owning Transmission Facilities  interconnected to the
                    Transmission  System.  A  determination  by the Company that
                    such third party fails to meet all necessary  criteria shall
                    not  relieve the  Transmission  Owner of the  obligation  to
                    construct  the  facilities.  Any  such  third  party  owning
                    Transmission  Facilities shall be required to become a Party
                    to this Agreement pursuant to Section 3.4.3.

               (e)  The  cost  of new  Transmission  Facilities  constructed  by
                    Transmission  Owners pursuant to this Section 4.1.3 shall be
                    recovered in accordance  with the MISO OATT and the revenues
                    associated with such cost recovery  received by the Company,
                    shall be distributed in accordance with this Agreement.

          4.1.4Acquisition.   If  a  Transmission  Owner  acquires  Transmission
               Facilities  that are not part of the  Transmission  System,  such
               facilities  shall become subject to this Agreement  provided that
               (i) such  Transmission  Facilities are physically  interconnected
               with any of the  Transmission  Facilities  owned or  Functionally
               Controlled by the Company or, if such Transmission Facilities are
               not  physically  interconnected  with  any  of  the  Transmission
               Facilities owned or Functionally  Controlled by the Company,  the
               Company determines, in its reasonable discretion, that

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<PAGE>

               subjecting  such  Transmission  Facilities to this Agreement will
               result in net  benefits to the  Company,  (ii) such  Transmission
               Owner consents and (iii) such action does not violate  Applicable
               Laws and Regulations. If Transmission Facilities are added to the
               Transmission  System  as set forth  above,  the  Company  and the
               Transmission  Owner  transferring the facilities shall amend such
               Transmission  Owner's  subappendix  to Appendix A to include such
               Transmission Facilities.

          4.1.5Performance of Regulatory  Obligations.  Each Transmission  Owner
               and the Company if it owns  facilities  that comprise part of the
               Transmission   System  shall  comply,   and  shall  provide  such
               information  to the Company as it  requires to comply,  and shall
               otherwise  assist the Company in  complying,  with  transmission,
               reporting,  operating,  filing,  and planning  obligations of the
               Company that are imposed by Applicable Laws and Regulations.

     4.2  Additional Obligations.

          4.2.1Information.  Subject to the confidentiality provisions set forth
               in Section  10.14,  each  Transmission  Owner shall  provide such
               information  concerning its Transferred Facilities to the Company
               as is  necessary  or  appropriate  for the Company to perform its
               obligations under this Agreement,  the MISO OATT and the MISO ITC
               Agreement.

          4.2.2 Facilities Access.

               (a)  Each  Transmission  Owner shall upon reasonable notice allow
                    the  Company  access  to its  Transferred  Facilities  as is
                    necessary  (i)  to  verify  and  audit  compliance  by  such
                    Transmission  Owner  with  this  Agreement  or (ii)  for the
                    Company to perform its obligations  under this Agreement and
                    the MISO ITC  Agreement.  Such access shall be at reasonable
                    times and under reasonable  conditions.  Representatives  of
                    the Company shall comply with a Transmission  Owner's safety
                    regulations   when  accessing  such   Transmission   Owner's
                    Transferred Facilities.

               (b)  Each   Transmission   Owner's  rights  in  its   Transferred
                    Facilities  shall be  subject  to the  Company's  Functional
                    Control of the  Transmission  System in accordance  with the
                    terms of this Agreement and the MISO ITC Agreement.  Nothing
                    in this Agreement shall be deemed to restrict or to prohibit
                    access to Transferred  Facilities by the Transmission' Owner
                    that owns such Transferred Facilities, or those acting under
                    its authority.

          4.2.3Inspection and Auditing Procedures. Each Transmission Owner shall
               grant the Company and its outside  auditors and consultants  such
               access  to such  Transmission  Owner's  books and  records  as is
               necessary (i) to verify

                                       29

<PAGE>

               and  audit  compliance  by  such  Transmission  Owner  with  this
               Agreement  or (ii) for the  Company  to perform  its  obligations
               under this  Agreement  and the MISO ITC  Agreement.  Such  access
               shall be at  reasonable  times and under  reasonable  conditions.
               Each Transmission Owner shall also comply with the accounting and
               reporting  requirements of any  Governmental  Authorities  having
               jurisdiction over the Transmission  Owner with respect to aspects
               of the Company's business operations.  Contacts between officers,
               employees,  and agents of the Company and those of a Transmission
               Owner,  pursuant to this Section 4.2.3 shall be strictly  limited
               to the purpose of this Section 4.2.3.


          4.2.4 Indemnification by Transmission Owners.

               (a)  Each  Transmission   Owner   ("Indemnifying   Owner")  shall
                    indemnify and hold harmless  each other  Transmission  Owner
                    ("Indemnified  Owners")  from any  Losses  arising  from the
                    Indemnifying Owner's  performance,  neglect or breach of its
                    obligations  under this  Agreement  (whether  arising from a
                    finding of  negligence,  strict  liability or other fault or
                    responsibility),  except  in  cases  where,  and only to the
                    extent that,  the  negligence  or willful  misconduct of any
                    other  Indemnified  Owner  contributed  to the Loss.  In the
                    event   two   or   more   Transmission    Owners   have   an
                    indemnification  obligation under this Section 4.2.4(a) with
                    respect to the same matter, such indemnification  obligation
                    shall be borne by such indemnifying  Transmission  Owners in
                    proportion to each such  indemnifying  Transmission  Owner's
                    comparative  fault.  If the Company  acquires  ownership  of
                    facilities  that comprise part of the  Transmission  System,
                    the  Company  shall be treated as if it were a  Transmission
                    Owner for purposes of this Section 4.2.4(a). Notwithstanding
                    any other provision of this Agreement, no Transmission Owner
                    shall be  liable  to any  other  Transmission  Owner for any
                    actions  taken  in  accordance  with  the   instructions  or
                    direction  of the Company or the Midwest ISO except in cases
                    of the  negligence or  intentional  wrong-doing of the first
                    Transmission Owner.

               (b)  Except  with  respect to its  Transferred  Facilities  or as
                    otherwise  provided in the MISO OATT or this  Agreement,  no
                    Transmission Owner shall be liable for any costs or expenses
                    relating  to  the   operation,   repair,   maintenance,   or
                    improvement   of   any  of   the   Transmission   Facilities
                    constituting part of the Transmission System that are owned,
                    operated,  or controlled by any other  Transmission Owner or
                    the Company.

               (c)  Each Transmission Owner shall severally and not jointly,  on
                    a pro rata  basis as  described  below,  indemnify  and hold
                    harmless  the  Company  from any  Losses  (determined  after
                    application  of the

                                       30

<PAGE>

                    proceeds of any applicable  insurance  policies) suffered or
                    incurred by the Company (but  excluding any lost profits and
                    similar  damages   suffered  or  incurred  by  the  Company)
                    resulting  from any claim by a third  party by reason of the
                    Company's  acts,  omissions  or  alleged  acts or  omissions
                    arising under this Agreement,  the MISO ITC Agreement or the
                    MISO  OATT or by reason of any of the  Midwest  ISO's  acts,
                    omissions  or  alleged  acts  or  omissions   ("Third  Party
                    Claims");  provided,  however,  that such indemnity does not
                    cover (i) Losses  arising out of any action or inaction  (A)
                    of the Company  taken in bad faith,  (B) of the Company that
                    constitutes Gross Negligence or Willful Misconduct or (C) of
                    the Company in its capacity as an owner of  facilities  that
                    comprise  part  of  the  Transmission  System,  (ii)  Losses
                    arising out of Third Party Claims  occurring in any calendar
                    year which involve any Good Business Practice Breach, to the
                    extent the Losses  paid or due and payable by the Company in
                    respect of such Third Party Claim plus all Company  Payments
                    with respect to all other claims  occurring in such calendar
                    year  are  less  than  the  Liability  Cap  Amount  for such
                    calendar  year or (iii)  Losses  from any claim or series of
                    related  claims unless such Losses exceed  $150,000 and then
                    only to the extent that such Losses exceed $150,000. The pro
                    rata liability of each Transmission Owner under this Section
                    4.2.4(c)  shall be equal to a  percentage  of the  aggregate
                    amount  of the  Losses  equal to the  percentage  that  such
                    Transmission  Owner's Net Plant bears to the  aggregate  Net
                    Plant as of the time in which the claim  giving  rise to the
                    Losses  in  question  occurred.   The  obligations  of  each
                    Transmission  Owner set forth in this Section 4.2.4(c) shall
                    terminate automatically for all purposes with respect to all
                    Losses from claims  arising after the Initial  Member ceases
                    to be the  Managing  Member for any reason.  Notwithstanding
                    anything to the contrary in this Agreement, the Transmission
                    Owners'  indemnification   obligations  under  this  Section
                    4.2.4(c) shall terminate  automatically  for all purposes in
                    the  event one or more  Transmission  Owners  and/or  former
                    Transmission  Owners pay, in the aggregate,  an amount equal
                    to $25,000,000 in any year pursuant to this Section 4.2.4(c)
                    (the "Indemnity  Cap"),  regardless of when the claims which
                    gave rise to the  indemnification  obligations  occurred and
                    regardless  of whether  the claims  involve a Good  Business
                    Practice Breach ("Payment  Event");  provided,  however,  if
                    prior to the occurrence of the Payment Event, if the Company
                    owns  Transmission  Facilities  having a Fair  Market  Value
                    equal to or greater than  $250,000,000  in the  aggregate at
                    the time of the acquisition, the indemnification obligations
                    of the Transmission Owners under this Section 4.2.4(c) shall
                    not terminate upon the  occurrence of a Payment  Event,  but
                    nothing in this  proviso is a  limitation  on the  automatic
                    termination of the

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<PAGE>

                    Transmission Owners' indemnification obligations as provided
                    above in the  event  the  Initial  Member  ceases  to be the
                    Managing Member for any reason.

               (d)  For  avoidance of doubt,  no  indemnification  obligation is
                    owed by the Transmission  Owners under Section 4.2.4(c) with
                    respect to Losses arising out of any claim  occurring in any
                    calendar  year  and  which  arises  out of a  Good  Business
                    Practice Breach to the extent that the amount of such Losses
                    plus all Company  Payments  with respect to all other claims
                    occurring in such  calendar year are less than the Liability
                    Cap Amount for such year.

          4.2.5 Administration of Third Party Claims.

               (a)  Promptly  after  receiving  notice  that a third  party  has
                    commenced   a  claim   that   would   be   subject   to  the
                    indemnification provisions of either Section 3.4.1 or 4.2.4,
                    each Party  entitled to  indemnification  (individually  and
                    collectively, "Indemnified Party") under such Sections shall
                    in turn  give  written  notice of that  claim to each  Party
                    obligated to provide the indemnification  under such Section
                    (individually and collectively,  "Indemnifying  Party"). The
                    written notice shall include  reasonable  detail in light of
                    the  circumstances  then  known  to the  Indemnified  Party.
                    Failure to give such notice, or any notice, will not relieve
                    the  Indemnifying  Party  from its  obligations  under  such
                    Sections  except where,  and then solely to the extent that,
                    such failure  actually and materially  prejudices the rights
                    of the Indemnifying Party.

               (b)  After  receiving  the written  notice  described  in Section
                    4.2.5(a), the Indemnifying Party will have the right but not
                    the duty to defend such claim;  provided,  however, that the
                    Indemnifying   Party  shall   acknowledge   in  writing  its
                    indemnification  obligations  hereunder with respect to such
                    claim.  If, with respect to a claim,  the Indemnified  Party
                    will retain  liability  for a material  amount in connection
                    with such claim, the  Indemnifying  Party shall not have the
                    right to assume the  defense of such claim  hereunder.  This
                    right  to  defend  will  include  the  right to  pursue  any
                    strategy  in  defending   such  claim,   file  any  and  all
                    pleadings,  pursue  discovery in any manner,  make  whatever
                    arguments the Indemnifying Party deems  appropriate,  and to
                    select  counsel of its choice to defend the claim,  provided
                    that (i) the Indemnified  Party gives its written consent to
                    counsel  selected by the  Indemnifying  Party (which consent
                    shall   not  be   unreasonably   withheld)   and   (ii)  the
                    Indemnifying  Party  conducts  the  defense  of  such  claim
                    actively and diligently. Attorneys' fees incurred by counsel
                    selected by the  Indemnifying  Party in defending the claim,
                    as  well  as  other  costs  and  expenses   associated  with
                    defending the claim, will be paid by the

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<PAGE>

                    Indemnifying  Party. If the  Indemnifying  Party consists of
                    one or more of the  Transmission  Owners,  the  decision  to
                    defend  a claim  and the  administration  of such  claim  as
                    provided  in  this  Section   4.2.5(a)   shall  be  made  by
                    Transmission  Owners whose  collective Net Plant exceeds 50%
                    of  the  aggregate  Net  Plant  of all  Transmission  Owners
                    comprising   the   Indemnifying   Party  (the  "Majority  of
                    Indemnifying  Transmission Owners"). Each Transmission Owner
                    agrees that the Majority of Indemnifying Transmission Owners
                    shall have no liability to any other  Transmission  Owner in
                    connection  with the  administration  of claims  under  this
                    Section   4.2.5   except  to  the  extent  the  Majority  of
                    Indemnifying  Transmission  Owners  exercise their authority
                    hereunder in bad faith or in a grossly negligent manner.

               (c)  If the Indemnifying Party assumes the defense of such claim,
                    the Indemnified Party agrees to reasonably cooperate in such
                    defense as long as the  Indemnified  Party is not materially
                    prejudiced  thereby.  As long as the  Indemnifying  Party is
                    conducting   the   defense  of  such  claim   actively   and
                    diligently,   the  Indemnified  Party  may  retain  separate
                    co-counsel  at its own cost and expense and may  participate
                    in the defense of such claim, though ultimate control of the
                    claim's defense shall remain with the Indemnifying Party.

               (d)  In the event the  Indemnifying  Party  does not  assume  the
                    defense of such  claim,  or ceases to conduct the defense of
                    such claim  actively  and  diligently,  or has a conflict of
                    interest with the  Indemnified  Party,  (i) the  Indemnified
                    Party  may  defend  against,  and,  with the  prior  written
                    consent of the  Indemnifying  Party (which consent shall not
                    be  unreasonably  withheld),  consent  to the  entry  of any
                    judgment or enter into any settlement  with respect to, such
                    claim,  (ii)  the  Indemnifying  Party  will  reimburse  the
                    Indemnified Party promptly and periodically for the costs of
                    defending   against   such   claim,   including   reasonable
                    attorneys'  fees and  expenses,  and (iii) the  Indemnifying
                    Party will remain responsible for any Losses the Indemnified
                    Party  may  suffer  as a  result  of such  claim to the full
                    extent provided in Sections 3.4.1 and 4.2.4.


               (e)  If after  the  making  of any  indemnification  payment  the
                    amount of Losses to which such payment relates is reduced by
                    recovery,   settlement  or  otherwise  under  any  insurance
                    coverage, or pursuant to any claim, recovery,  settlement or
                    payment by or against any other  Person,  the amount of such
                    reduction  (less  any  costs,  expenses,  premiums  or Taxes
                    incurred in connection therewith) will promptly be repaid by
                    the Indemnified Party to the Indemnifying Party. Upon making
                    any indemnification

                                       33

<PAGE>

                    payment,  the Indemnifying Party will, to the extent of such
                    indemnification  payment, be subrogated to all rights of the
                    Indemnified  Party against any third party in respect of the
                    Losses  to  which  the   indemnification   payment  relates;
                    provided  that  (i)  the  Indemnifying   Party  is  then  in
                    compliance  with its  obligations  under this  Agreement  in
                    respect of such Losses, and (ii) until the Indemnified Party
                    recovers  full  payment  of such  Losses,  all claims of the
                    Indemnifying  Party  against any such third party on account
                    of  said  indemnification  payment  will be  subrogated  and
                    subordinated in right of payment to the Indemnified  Party's
                    rights  against  such  third  party.  Without  limiting  the
                    generality or effect of any other  provision of this Section
                    4.2.5(e), each such Indemnified Party and Indemnifying Party
                    will duly execute upon  request all  instruments  reasonably
                    necessary  to  evidence  and  perfect  the   above-described
                    subrogation and subordination rights.

          4.3  Payments to the Company

               4.3.1Management Fee. Each Transmission  Owner shall severally and
                    not  jointly,  pay the  Company  its pro  rata  share of the
                    annual  Management Fee. Each  Transmission  Owner's pro rata
                    share of the  Management  Fee in each year shall be equal to
                    the percentage of the Management Fee equal to the percentage
                    that  such  Transmission  Owner's  Net  Plant  bears  to the
                    aggregate Net Plant of all Transmission  Facilities  subject
                    to the  Functional  Control of the Company  pursuant to this
                    Agreement in such year. The amount of the Initial Management
                    Fee,  as  adjusted  pursuant  to  Section  6.3(b) of the LLC
                    Agreement,  may be increased upon and in connection with the
                    addition  of  a  Transmission  Owner  as  a  Party  to  this
                    Agreement  pursuant to Section 3.4.3 of this Agreement by an
                    amount  agreed upon between the Company and such  additional
                    Transmission  Owner;  provided,  however,  that  (a) no such
                    increase in the Initial  Management  Fee shall  result in an
                    increase in the aggregate  amount of the Initial  Management
                    Fee payable by the Original  GridAmerica  Companies  and (b)
                    after  giving   effect  to  such  increase  in  the  Initial
                    Management Fee, the several  obligation of each Transmission
                    Owner to pay its pro rata  share of the  Initial  Management
                    Fee under this Section 4.3 shall not exceed a percentage  of
                    the increased Initial Management Fee equal to the percentage
                    that  such  Transmission  Owner's  Net  Plant  bears  to the
                    aggregate Net Plant of all Transmission  Facilities  subject
                    to the  Functional  Control of the Company  pursuant to this
                    Agreement in such year, adjusted to include the Net Plant of
                    the additional  Transmission Owner, as of the effective date
                    of such increase in the Initial Management Fee.

               4.3.2Incentive  Compensation.  In addition to the  Management Fee
                    payable to the Company, each Transmission Owner shall pay to
                    the  Company   incentive   compensation   pursuant  to  such
                    incentive compensation  arrangements as are agreed from time
                    to time  between  the  Company  and such other  Transmission
                    Owners as shall agree thereto.  The Company

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<PAGE>

                    shall,  from time to time but no less frequently than within
                    thirty  (30) days after the  Transmission  Service  Date and
                    each anniversary thereof, propose to the Transmission Owners
                    incentive  compensation  arrangements  designed to encourage
                    the  efficient  and enhanced  operation  of the  Transferred
                    Facilities  without  regard to any benefit or  detriment  to
                    other businesses and activities of the Transmission  Owners,
                    including   their   electric   generation   businesses   and
                    activities,  which may result  from  implementation  of such
                    proposals.  Any incentive  arrangements  between the Company
                    and the Transmission  Owners shall provide that (a) not less
                    than 25 percent of net incentive  revenues  which are earned
                    through  the  implementation  of  Company's  proposals,   or
                    otherwise  as  a  result  of  the   Company's   exercise  of
                    Functional Control over the Transferred Facilities, shall be
                    payable to the Company as  incentive  compensation;  and (b)
                    each  Transmission  Owner shall  receive a percentage of the
                    balance  of  such  net  incentive   revenues  equal  to  the
                    percentage that such Transmission Owner's Net Plant bears to
                    the  aggregate  Net  Plant  of all  Transmission  Facilities
                    subject to the Functional Control of the Company pursuant to
                    this Agreement in such year .

          4.4  Transmission Owners' Remedies.

               4.4.1Accounting Failures. If an Accounting Failure occurs, at the
                    written  request of a majority  of the  Transmission  Owners
                    (each Transmission Owner having one vote), the Company shall
                    retain and pay for the  services  of an  accounting  firm of
                    national reputation,  which accounting firm shall conduct an
                    examination and analysis of the accounting procedures of the
                    Company  and shall be  required  to issue a  written  report
                    regarding  such   examination  and  analysis,   including  a
                    description  of any  material  weaknesses  in the  Company's
                    accounting  procedures  discovered by such accounting  firm,
                    and recommendations to correct such weaknesses.  The Company
                    shall provide to the Transmission Owners copies of all draft
                    and  final  reports  prepared  by such  accounting  firm and
                    within  thirty  (30) days after  issuance  of a report,  the
                    Company  shall provide a response  thereto  delivered to the
                    Transmission  Owner  which  states  the  extent to which the
                    Company accepts the report's  findings and the basis for any
                    objections.

               4.4.2Operational  Failures.  If an Operational Failure occurs, at
                    the written request of a majority of the Transmission Owners
                    (each Transmission Owner having one vote), the Company shall
                    retain  and pay for the  services  of a  consulting  firm of
                    national  reputation  with  experience  in  electric  energy
                    operations   and   management  and  which  is  a  Non-Market
                    Participant.   Such   consulting   firm  shall   conduct  an
                    examination  and  assessment  of  the  Company's   operating
                    procedures,  management,  staffing and such other matters as
                    such   consulting   firm   deems   appropriate   under   the
                    circumstances  considering  the  nature  of the  Operational
                    Failure  and shall be  required  to issue a  written  report
                    regarding such examination and assessment. The Company shall
                    provide to the  Transmission  Owners

                                       35

<PAGE>

                    copies  of all  draft and  final  reports  prepared  by such
                    consulting  firm and within thirty (30) days after  issuance
                    of a report,  the Company shall  provide a response  thereto
                    delivered to the Transmission Owners which states the extent
                    to which the Company  accepts the report's  findings and the
                    basis for any objections.

               4.4.3Removal of Managing Member for Cause. If a Super Majority of
                    Transmission Owners shall have delivered written notice that
                    they have elected to remove the  Managing  Member for Cause,
                    the Company shall cause the Managing Member to be removed in
                    accordance   with  the  provisions  of  the  LLC  Agreement;
                    provided,  however, that (x) if the Managing Member contests
                    its removal pursuant to the terms of the LLC Agreement,  the
                    Company  shall  acknowledge  and shall  cause  the  Managing
                    Member to acknowledge the rights of the Transmission  Owners
                    to participate in any proceeding to resolve the dispute over
                    the removal pursuant to Section 10.3 of the LLC Agreement or
                    Section 6.3 and (y) no removal of the Managing  Member shall
                    be effective unless and until approved by the Commission.

               4.4.4Replacement  of  Managing  Member.  If a Managing  Member is
                    removed as a result of an Early  Termination Event under the
                    LLC  Agreement,  including a removal for Cause,  the Company
                    shall cause the successor  Managing Member to be selected by
                    vote of a Super Majority of Transmission Owners.

                                    ARTICLE V
                              TERM AND TERMINATION

          5.1  Term. This Agreement shall become effective as to the Company and
each  Transmission  Owner on the  Effective  Date or the  date set  forth in the
amendment  hereto  entered  into  between the Company and a  Transmission  Owner
pursuant to Section 3.4.3.  For each  Transmission  Owner and the Company,  this
Agreement  shall  continue  in  effect  until  the  end  of  the  Initial  Term.
Notwithstanding the scheduled termination hereof at the end of the Initial Term,
this Agreement automatically shall be extended as to a Transmission Owner for an
additional term of two (2) years at the end of the Initial Term,  unless written
notice of termination  hereof is given by such Transmission  Owner to each other
Party at least six months prior to the last day of the Initial  Term;  provided,
however,  that,  if at the time  such  notice  of  termination  is given by such
Transmission Owner, applicable provisions in the Midwest ISO Transmission Owners
Agreement  governing the right of a "Transmission  Owner" thereunder to withdraw
from the  Midwest ISO specify a longer  minimum  time for notice of  withdrawal,
then, unless the Commission shall otherwise  approve,  upon the effectiveness of
the  termination  of  this  Agreement  as  to  any  Transmission   Owner,   such
Transmission Owner shall automatically be and become a member of Midwest ISO for
a term of not less than the

                                       36

<PAGE>

minimum notice period for withdrawal  specified in the Midwest ISO  Transmission
Owners Agreement (measured from the date of the notice of termination  delivered
hereunder) less six months.  Following any such additional term, the term hereof
automatically  shall be  extended  as to a  Transmission  Owner  for  successive
additional terms of two (2) years each (any additional term,  whether  following
the Initial Term or an  additional  term,  being an  "Additional  Term")  unless
written notice of termination hereof is given by such Transmission Owner to each
other  Party  at least  six  months  prior to the last day of the then  existing
Additional  Term;  provided,  however,  that,  if at the  time  such  notice  of
termination is given by such Transmission  Owner,  applicable  provisions in the
Midwest ISO Transmission Owners Agreement governing the right of a "Transmission
Owner" thereunder to withdraw from the Midwest ISO specify a longer minimum time
for notice of withdrawal from the Midwest ISO, then, unless the Commission shall
otherwise  approve,  upon the effectiveness of the termination of this Agreement
as to any Transmission Owner, such Transmission Owner shall automatically be and
become a member of Midwest  ISO for a term of not less than the  minimum  notice
period for withdrawal specified in the Midwest ISO Transmission Owners Agreement
(measured from the date of the notice of termination  delivered  hereunder) less
six months.


Each Transmission Owner may withdraw from the GridAmerica ITC and this Agreement
shall  terminate  with respect to such Party under the following  circumstances:
(a) if a  Transmission  Owner  delivers  notice of its intent to contribute  its
Transferred  Facilities to the Company  pursuant to Section 5.1(a) of the Master
Agreement  prior to the date thirty (30) months after the Effective  Date,  then
each Transmission  Owner may withdraw from the GridAmerica ITC and terminate its
participation under this Agreement by providing all of the other Parties written
notice of such  withdrawal  within  thirty (30) days of receipt of the notice of
such  contribution;  or (b) if no Transmission Owner has delivered notice of its
intent to  contribute  its  Transferred  Facilities  to the Company  pursuant to
Section  5.1(a)  of  the  Master  Agreement  prior  to  the  expiration  of  the
twenty-ninth  (29th) month following the Effective Date, then each  Transmission
Owner may withdraw from the  GridAmerica  ITC and  terminate  its  participation
under this  Agreement by providing  all of the other Parties  written  notice of
such withdrawal  within the thirtieth (30th) month following the Effective Date.
Any withdrawal from the GridAmerica ITC and termination of  participation  under
this  Agreement  shall  be  effective  on the  first  day of the  seventh  month
following  the month in which notice  thereof is delivered  in  accordance  with
Section 10.9; provided, however, that, notwithstanding the foregoing, unless the
Commission shall otherwise approve, no withdrawal by any Transmission Owner from
the  GridAmerica  ITC pursuant to Section  5.1(a) or Section  5.1(b) shall be or
become effective unless and until such Transmission

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<PAGE>

Owner  becomes  a member of the  Midwest  ISO.  Upon  receipt  of any  notice of
withdrawal from the GridAmerica ITC and termination of participation  under this
Agreement pursuant to Section 5.1(a) or Section 5.1(b),  each other Transmission
Owners shall have the right,  exercisable  within thirty (30) days of receipt of
such  notice,   to  withdraw  from  the   GridAmerica   ITC  and  terminate  its
participation under this Agreement; provided, however, that, notwithstanding the
foregoing,  unless the Commission shall otherwise approve,  no withdrawal by any
Transmission  Owner from the  GridAmerica  ITC pursuant to this sentence of this
Section  5.1 shall be or become  effective  unless and until  such  Transmission
Owner becomes a member of the Midwest ISO.  Without the prior written consent of
NGUSA  pursuant  to  Section  5.7  of  the  Master  Agreement,  no  part  of the
Transferred  Facilities  of any  Transmission  Owner  that  withdraws  from  the
GridAmerica ITC and terminates its  participation  under this Agreement shall be
included in or managed by an ITC that  exercises  functions  similar in scope to
the function exercised by the Company with respect to the Transferred 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  Transmission  Owner'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 Section 5.7(b) of the Master
Agreement prior to the date of any such withdrawal.

     5.2 Termination.

          5.2.1No  Termination.  No Party shall have any right to  terminate  or
               withdraw from this Agreement,  nor shall any  Transmission  Owner
               have the right to withdraw any of its Transferred Facilities from
               GridAmerica  ITC,  except  as  provided  in  Section  5.1 or this
               Section  5.2.  The  provisions  of Article 10 shall  survive  any
               termination of this Agreement.

          5.2.2Divestiture  or Sale of  Transferred  Facilities.  This Agreement
               shall  terminate  as to any  Transmission  Owner on the date such
               Transmission Owner contributes to the Company pursuant to Section
               3.1(b) of the LLC Agreement or otherwise  sells to a Person other
               than the Company  any of such  Transmission  Owner's  Transferred
               Facilities,  but such termination  shall only be to the extent of
               and  extend to such  Transmission  Owner  only in respect of such
               contributed  or  otherwise  sold  Transferred   Facilities.   Any
               proposed sale by a Transmission  Owner of Transferred  Facilities
               shall be conditioned on the delivery by the purchaser  thereof of
               an  assumption   agreement  in  form  and  substance   reasonably
               satisfactory  to the  Company  pursuant  to which  the  purchaser
               assumes  the  obligations  of  the  selling   Transmission  Owner
               hereunder. Such Transmission Owner shall remain a party hereto to
               the extent such  Transmission  Owner continues to own Transferred
               Facilities.   In  the  event  that  a   Transmission   Owner  has
               contributed all of its  Transferred  Facilities to the Company or
               has  otherwise  sold  all of  its  Transferred  Facilities,  this
               Agreement shall

                                       38

<PAGE>

               terminate as to the  Transmission  Owner as of the effective date
               of the  contribution  or sale (as the case may be) of all of such
               Transmission  Owner's  Transferred  Facilities,  including in the
               case  of a  Transmission  Owner  that  retains  ownership  of its
               Non-transferred   Facilities,   except   with   respect   to  any
               obligations of the Transmission Owner hereunder accruing prior to
               the  effective  date  of  the  contribution  or  sale,  including
               indemnification  obligations  pursuant to Section  4.2.4  arising
               from  any  event  occurring  prior to the  effective  date of the
               contribution or sale.

          5.2.3ITC Status.  A  Transmission  Owner may terminate  this Agreement
               with respect to the Transferred  Facilities at any time following
               (i) a determination by the Commission that the Company has ceased
               to be an ITC,  or (ii) an order by the  Commission  requiring  or
               authorizing the Company or the  Transferred  Facilities to become
               subject to the control or  direction  of a Regional  Transmission
               Organization other than the Midwest ISO.

          5.2.4Failure   to   Achieve   Transmission   Service   Date.   If  the
               Transmission  Service  Date has not occurred on or before June 30
               2003,  then at any time after June 30, 2003,  any Party may, upon
               thirty (30) days prior written notice to the other Parties, cause
               the GridAmerica ITC and this Agreement to terminate.

     5.3  Effect Of Termination  Pursuant to Sections 5.1 or 5.2.3. In the event
that a Transmission  Owner terminates this Agreement pursuant to Sections 5.1 or
5.2.3, the following provisions shall apply.

          5.3.1Transmission Customers Held Harmless.  Transmission Customers and
               Interconnection   Customers   taking   service  that  involves  a
               terminating    Transmission   Owner's   Transferred   Facilities,
               including Transmission Service that involves transmission service
               agreements  and  interconnection   and/or  operating   agreements
               executed  before such  Transmission  Owner provided notice of its
               termination  shall receive  service for the remaining term of the
               agreement at the same rates,  terms,  and  conditions  that would
               have been  applicable if there were no  termination,  unless such
               agreements are modified by the Commission in accordance  with its
               statutory  authority  or by  agreement  of  the  parties  to  the
               agreement.  Such  Transmission  Owner  shall make its  facilities
               available to provide service to such  Transmission  Customers and
               Interconnection  Customers  and allow the  Company to continue to
               exercise Functional Control over the Transferred  Facilities with
               respect to such service and shall receive no more in revenues for
               that  service  than if  there  had  been no  termination  by such
               Transmission   Owner.   This  Section  5.3.1  shall  survive  the
               termination of the Agreement by a Transmission Owner.

          5.3.2Existing   Obligations.   Obligations   incurred   and   payments
               applicable to time periods  prior to the  effective  date of such
               termination shall survive

                                       39

<PAGE>

               the termination of this Agreement. The reconciliation and payment
               of all  such  amounts  shall  be  done  as  soon  as  practicable
               following  such   termination.   This  Section  5.3.2  shall  not
               constitute a general  guarantee of the obligations of the Company
               by any Transmission Owner.

          5.3.3Construction   of   Facilities.   Obligations   relating  to  the
               construction  of new  facilities  pursuant to an approved plan of
               the  Company,   which   imposed   duties  upon  the   terminating
               Transmission   Owner   prior   to   such   Transmission   Owner's
               termination, shall be renegotiated as between the Company and the
               terminating   Transmission   Owner   taking  into   consideration
               commitments  made to Transmission  Customers and  Interconnection
               Customers and funds  advanced,  if any,  prior to  termination of
               this  Agreement  with  respect to such  terminating  Transmission
               Owner.  Such  obligations  shall survive the  termination of this
               Agreement with respect to such Transmission Owner.

          5.3.4Other Obligations.  Other obligations between the Company and the
               terminating  Transmission  Owner shall be renegotiated as between
               the Company and the terminating  Transmission  Owner,  subject to
               approval  by  the  Commission.  If  such  obligations  cannot  be
               resolved  through   negotiations,   they  shall  be  resolved  in
               accordance with the dispute resolution procedures provided for in
               this Agreement.

     5.4  Effect of Termination  Pursuant to Section 5.2.2.  In the event that a
Transmission  Owner  terminates  this  Agreement  pursuant  to Section  5.2.2 by
divesting  to the  Company or  otherwise  selling  to another  Person all of its
Transferred Facilities, the following provisions shall apply.

          5.4.1Transmission   Customers  Held   Harmless.   In  the  case  of  a
               Transmission Owner that retains ownership of its  Non-transferred
               Facilities,  Transmission  Customers taking service that involves
               transmission    service    over   such    Transmission    Owner's
               Non-transferred Facilities pursuant to agreements executed before
               such Transmission  Owner provided notice of its termination shall
               continue  to  receive  service  for  the  remaining  term  of the
               agreement at the same rates,  terms,  and  conditions  that would
               have been  applicable  if there were no  withdrawal,  unless such
               agreements are modified by the Commission in accordance  with its
               statutory  authority  or by  agreement  of  the  parties  to  the
               agreement. Such Transmission Owner shall make its Non-transferred
               Facilities  available  to provide  service  to such  Transmission
               Customers   and  allow  the   Company  to  continue  to  exercise
               Functional Control over the Non-transferred  Facilities and shall
               receive no more in revenues  for that  service  than if there had
               been no  termination  by such  Transmission  Owner.  This Section
               5.4.1  shall  survive  the  termination  of  the  Agreement  by a
               Transmission Owner.

          5.4.2Existing   Obligations.   Obligations   incurred   and   payments
               applicable to time periods  prior to the  effective  date of such
               termination shall survive

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<PAGE>

               the termination of this Agreement. The reconciliation and payment
               of all  such  amounts  shall  be  done  as  soon  as  practicable
               following   such   withdrawal.   This  Section  5.4.2  shall  not
               constitute a general  guarantee of the obligations of the Company
               by any Transmission Owner.

          5.4.3Other Obligations.  Other obligations between the Company and the
               terminating  Transmission  Owner shall be renegotiated as between
               the Company and the terminating  Transmission  Owner,  subject to
               approval  by  the  Commission.  If  such  obligations  cannot  be
               resolved  through   negotiations,   they  shall  be  resolved  in
               accordance with the dispute resolution procedures provided for in
               this Agreement.

     5.5  Regulatory  And Other  Approvals Or Procedures.  The  termination by a
Transmission Owner of its obligations hereunder and/or withdrawal of some or all
of its  Transferred  Facilities  from the  GridAmerica  ITC shall be  subject to
applicable   federal  and  state   regulatory   approvals  or  other  regulatory
procedures,   including,  without  limitation,  any  required  approval  of  the
Commission and any  requirement of the Commission that such  Transmission  Owner
join a Commission approved regional transmission organization.

                                   ARTICLE VI
                               DISPUTE RESOLUTION

     6.1  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 may declare the  consultation
procedure  set forth in this  Section  6.1  terminated  and refer the dispute or
controversy to arbitration pursuant to Section 6.2.

     6.2  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 6.1, then such dispute shall be resolved according
to this  Section  6.2.  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 Section 6.2, 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  6.1,  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.
For the avoidance of doubt,  this Section 6.1 does not apply to disputes arising
under the MISO OATT,  which shall be resolved in accordance  with the procedures
set forth therein,  or to disputes arising under another  agreement  between and
among the  Company  and one or more of the  Transmission  Owners or between  the


                                       41

<PAGE>

Company and the Midwest  ISO,  which  shall be resolved in  accordance  with the
dispute resolution procedures of such other agreement.

               (a)  All  Claims  To Be  Arbitrated.  Except as  provided  in the
                    immediately  preceding  sentence and in Sections  6.2(l) and
                    9.2.1, 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 6.1,
                    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.

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<PAGE>

               (d)  Number  and  Qualification  of  Arbitrators.  The  panel  of
                    arbitrators (the "Panel") shall consist of three arbitrators
                    appointed  in  accordance  with  this  Section  6.2  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 chairperson  shall 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 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 6.2(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 10.2.

               (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

                                       43

<PAGE>

                    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
                    VI. 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  9.2.  The
                    arbitrators  shall also 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  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

                                       44

<PAGE>


                    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 10.14.

               (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  6.1,   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   6.2(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 6.2 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 6.2.

               (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

                                       45

<PAGE>

                    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  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 New York,  New York,
                    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
                    6.2 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 6.2.


     6.3  Arbitration of Certain Claims Regarding Removal of Managing Member. If
a Super  Majority of  Transmission  Owners have attempted to remove the Managing
Member for Cause pursuant to Section 4.4.3 of this  Agreement,  and the Managing
Member disputes whether Cause for removal exists (a "Removal  Claim"),  then the
issue of whether Cause exists  immediately  shall be referred to and resolved by
binding arbitration ("Removal  Arbitration")  according to this Section 6.3. The
Removal  Claim  shall  be  finally  resolved  by  one  arbitrator  appointed  in
accordance  with this  Section 6.3 and the  Arbitration  Rules to the extent not
inconsistent with the provisions of this Agreement.  The Expedited Procedures of
the Arbitration

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Rules  shall  be used  unless  the  arbitrator  determines  that  they  would be
inappropriate. The arbitrator shall take an oath of neutrality.

          6.3.1Application  to Removal  Claim;  Relation  to Other  Claims.  Any
               dispute other than a Removal Claim must be resolved in a separate
               Arbitration  pursuant to Section 6.2. 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 6.2.

          6.3.2Referral of Claims to Arbitration. A Managing Member who receives
               a written notice of removal as  contemplated  in Section 4.4.3 (a
               "Removal  Notice"),  and who  disputes  that  Cause  for  removal
               exists,  or a Member or a  Transmission  Owner  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
               Transmission  Owners that are not the Removal  Claimant  (whether
               one or more  parties,  the "Removal  Respondent  Party"),  in the
               manner set 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.

          6.3.3Appointment  of  Arbitrator.  Within ten (10) days of delivery of
               the Notice of  Removal  Dispute,  the  Removal  Respondent  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  both  contain  a  common
               proposed arbitrator, such person shall be selected as arbitrator;
               otherwise, the AAA shall appoint one of them as arbitrator. If no
               persons are named on both lists,  then 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 6.3. An arbitrator appointed pursuant
               to this Section  6.3.3 may not also be appointed as an arbitrator
               pursuant to Section 6.2.


          6.3.4Governing  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 of the State
               of New York, in accordance with Section 10.2 hereof.

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<PAGE>

          6.3.5Powers  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  attorney's  fees (in
               accordance  with  Section  10.19),  costs,  and  expenses  of the
               Removal Arbitration  (including the attorneys' fees and expenses)
               against  one or  more  of  the  Parties  in  whatever  manner  or
               allocation the arbitrator deems appropriate.

          6.3.6Venue;  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.

          6.3.7Arbitration  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  and 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.

                                   ARTICLE VII
                                   TAX MATTERS

     7.1  Responsibility  for Transmission  Owner Taxes. Each Transmission Owner
shall be  responsible  for  preparation  and filing of all Tax Returns and other
filings related to its Transmission Business and Transferred  Facilities and for
payment  of any  Tax  liabilities  related  to  its  Transmission  Business  and
Transferred Facilities.  No Party shall be responsible for, or required to, file
any Tax Returns or other reports for any other Transmission Owner and shall have
no  liability  for  any  Taxes  related  to  any  other   Transmission   Owner's
Transmission Business or Transferred Facilities.

     7.2  Responsibility for the Company Taxes. The Company shall be responsible
for  preparation  and filing of all Tax Returns and other filings related to its
business and the facilities  owned by it constituting  part of the  Transmission
System and for payment of any Tax liabilities

                                       48

<PAGE>

related thereto. No Transmission Owner shall have any responsibility for filing,
or be  required to file,  any Tax  Returns or other  reports for the Company and
shall have no liability for any Taxes related to the Company's owned facilities.

                                  ARTICLE VIII
                                  FORCE MAJEURE

     If a Party is rendered  wholly or partly unable to perform its  obligations
under this  Agreement  because of a Force  Majeure  event,  that Party  shall be
excused from  whatever  performance  is affected by such Force Majeure event but
only to the extent so affected,  provided  that:  (i) the Party,  within two (2)
days after the  occurrence of the Force Majeure  event,  gives the other Parties
notice describing the particulars of the occurrence and its estimated  duration;
(ii) the  suspension  of  performance  is of no  greater  scope and of no longer
duration than is required by the Force Majeure  event;  and (iii) the Party uses
commercially reasonable efforts to remedy its inability to perform and to resume
its full performance under this Agreement;  provided,  however, that the Party's
obligation to remedy its  inability to perform shall not require the  settlement
of any strike,  walkout,  lockout or other labor  dispute on terms that,  in the
sole judgment of the Party  involved in said  dispute,  are contrary to its best
interest.

                                   ARTICLE IX
                            BREACH, CURE AND DEFAULT

     9.1  Continued Operation.  In the event of a breach or default hereunder by
any Party,  the Parties shall continue to operate and maintain their  respective
facilities and perform all acts reasonably  necessary for the Company to operate
and maintain the  Transmission  System in accordance with this Agreement and the
MISO ITC Agreement.

     9.2  Remedies.

          9.2.1Specific  Performance.  The Parties  agree and  stipulate  that a
               breach by a Party of this  Agreement  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
               the other Parties may be entitled hereunder, including reasonable
               attorneys'  fees pursuant to Section  10.19 and court costs,  any
               other  Party  shall be  entitled  to seek  injunctive  relief  or
               specific  performance to restrain or compel the breaching  Party.
               Each of the Parties  expressly  waives any claim that an adequate
               remedy at Law exists for such a breach.

          9.2.2All  Other  Remedies.  No right or  remedy  herein  conferred  is
               intended to be exclusive of any other  available right or remedy,
               but each and every such right or remedy shall be  cumulative  and
               shall  be in  addition  to every  other  right  or  remedy  given
               hereunder  or  hereafter  existing  under Law or in  equity.  The
               exercise  of any one  right or  remedy  shall  not be  deemed  an
               election of such right or remedy or preclude  the exercise of any
               other right or remedy. The resort to any right or remedy provided
               for herein or provided  for by Law or in equity shall not prevent
               the  concurrent  or

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<PAGE>

               subsequent   employment   of   any   other   right   or   remedy.
               Notwithstanding the foregoing:

               (a)  as between  the  Parties,  notwithstanding  anything  to the
                    contrary in this  Agreement,  no Party will 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;  provided,  however,  that the
                    foregoing  shall not apply to indemnity  obligations  of any
                    Party   hereunder   that  relate  to   liabilities   of  the
                    Indemnified Party to third parties, even if such liabilities
                    to   third   parties   include   liability   for   indirect,
                    consequential,  special or punitive damages suffered by such
                    third parties; and

               (b)  except with respect of the obligations of the Company (i) to
                    reimburse  Transmission  Owners for costs on a  Pass-Through
                    Basis under the  circumstances  described  in Sections  2.3,
                    2.4, 2.5, 4.1.3(a),  (ii) to pay amounts to the Transmission
                    Owners  on  a   Pass-Through   Basis  as  provided  in  this
                    Agreement,  (iii) to perform its  obligations  under Section
                    3.3.4,  and (iv) to  indemnify  the  Transmission  Owners as
                    provided in Section  3.4.1,  the Company  shall be liable to
                    the Transmission Owners only in the case of Gross Negligence
                    or Willful Misconduct.

     9.3  No Joint  Liability.  The  liabilities  and  obligations of each Party
under this  Agreement  shall be several  and not  joint,  and no Party  shall be
jointly  liable under this  Agreement  with any other Party.  Without in any way
limiting the  foregoing,  the failure of one  Transmission  Owner to perform its
obligations  hereunder  shall not  constitute  a failure to perform by any other
Transmission Owner.

                                    ARTICLE X
                            MISCELLANEOUS PROVISIONS

     10.1 Not for Benefit of Third  Parties.  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.

     10.2 Governing Law. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THIS
AGREEMENT  IS REQUIRED TO BE  INTERPRETED  OR  ENFORCED IN  ACCORDANCE  WITH THE
FEDERAL LAW OF THE UNITED STATES OF AMERICA, AND WITHOUT REFERENCE TO THE CHOICE
OF LAW PRINCIPLES IN THE STATE OF NEW YORK THAT REQUIRE  APPLICATION OF THE LAWS
OF A DIFFERENT JURISDICTION.

     10.3 Successors And Assigns.  This Agreement shall inure to the benefit of,
and be binding  upon,  each of the  Parties,  their  respective  successors  and
assigns.  This Agreement may not be assigned by a Transmission Owner except that
this  Agreement  (i) shall be assigned to any

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<PAGE>

successor to the ownership of a Transmission Owner's Transferred Facilities, and
any such  successor  shall become a  Transmission  Owner under this Agreement or
(ii) may be  assigned  to a  lender.  This  Agreement  may not be  assigned,  by
operation of Law or otherwise by the Company,  except to a lender. An assignment
of this Agreement by a Transmission  Owner as to its  Transferred  Facilities in
conformance with clause (i) of this Section 10.3 shall release such Transmission
Owner  from  further   liability  or  obligation  under  this  Agreement  as  to
obligations arising after the date of such assignment.

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

     10.5 Severability.  Except for Section 5.1 of this Agreement, 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, and such invalid, void, or unenforceable provision may be replaced
with a suitable  and  equitable  provision  pursuant to Section 10.6 in order to
carry out,  so far as may be valid and  enforceable,  the intent and  purpose of
such invalid, void, or unenforceable provision.

     10.6 Renegotiation.  If any provision of this Agreement, or the application
thereof  to  any  Person,  Entity,  or  circumstance,  is  held  by a  court  or
Governmental  Authority  of  competent  jurisdiction  to be  invalid,  void,  or
unenforceable, or if a modification or condition to this Agreement is imposed by
a Governmental Authority exercising  jurisdiction over this Agreement,  then the
Parties shall  endeavor in good faith to negotiate  such amendment or amendments
to this Agreement as will restore the relative rights, obligations, and economic
position of the Parties under this Agreement  immediately prior to such holding,
modification,  or condition to the extent consistent with the orders,  decisions
or  requirements  of the  applicable  Governmental  Authority.  The  rights  and
obligations of the Parties under this Agreement  shall be modified to the extent
necessary (i) to comply with an order of the  Commission or (ii) as is necessary
to avoid a determination  by the Commission that the Company has ceased to be an
ITC; provided,  however, that any such modification  (including any modification
of the definition of Functional Control and the scope of activities performed by
each Party hereunder) shall preserve to the maximum extent possible the relative
rights,  obligations,  and  economic  positions  of the Parties  hereunder as in
effect prior to giving effect to such modification.

     10.7 Representations And Warranties. Each Party represents and warrants, as
of the  Effective  Date,  to each other  Party that:

                    (i)  it is  duly  organized,  validly  existing  and in good
                         standing under the applicable Laws of the  jurisdiction
                         of its organization and is qualified to do business (A)
                         in  the   jurisdictions   necessary   to  perform  this
                         Agreement,  in the case of the  Company,  or (B) in the
                         jurisdictions  in which its Transferred  Facilities are
                         located, in the case of a Transmission Owner;

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<PAGE>

                    (ii) it has the power to execute and deliver this  Agreement
                         and to perform its obligations under this Agreement and
                         has taken all necessary  corporate and/or other actions
                         to authorize such execution, delivery and performance;

                    (iii)its  execution  and delivery of this  Agreement and its
                         performance of its obligations  under this Agreement do
                         not violate or conflict with (A) any Laws applicable to
                         it, (B) any  provision  of its  charter or by-laws  (or
                         comparable  constituent  documents),  (C) any  order or
                         judgment  of  any  court  or   Governmental   Authority
                         applicable  to it or  any  of its  assets  or  (D)  any
                         contractual  restriction  binding on or affecting it or
                         any of its assets,  except third-party joint agreements
                         covered by Section 10.13;

                    (iv) subject to the  receipt of any  Required  Consents  (as
                         defined in the Master Agreement) required by it, to its
                         knowledge,  there are no Consents  required  for it and
                         its Affiliates to perform their respective  obligations
                         under this  Agreement  other than  Consents  which have
                         been  obtained  and  Consents  which may be required to
                         perform   obligations  which,  by  the  terms  of  this
                         Agreement,  will not arise and are not  required  to be
                         performed  except  upon  the  happening  of one or more
                         contingencies specified in this Agreement;

                    (v)  this  Agreement has been duly executed and delivered by
                         the Party and constitutes its legal, valid, and binding
                         obligation,  enforceable  against it in accordance with
                         its   terms,   subject   to   applicable    bankruptcy,
                         reorganization,  insolvency, moratorium or similar Laws
                         affecting  creditors' rights generally and subject,  as
                         to enforceability,  to equitable  principles of general
                         application   (regardless  of  whether  enforcement  is
                         sought in a proceeding in equity or at Law); and

                    (vi) except as otherwise  permitted  herein,  it has neither
                         initiated  nor received  written  notice of any pending
                         action,  proceeding,  or  investigation,   nor  to  its
                         knowledge   is  any   such   action,   proceeding,   or
                         investigation  threatened  (or any basis therefor known
                         to it), which questions the validity of this Agreement,
                         or which  would  materially  or  adversely  affect  its
                         rights or obligations under this Agreement.

     10.8 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.

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<PAGE>

     10.9 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 Appendix C 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.

     10.10Regulatory Proceedings.  Subject to the provisions of Section 10.6, no
Party shall seek to amend this Agreement through a unilateral application to the
Commission to do so.  Notwithstanding  the foregoing,  nothing in this Agreement
shall be deemed to prohibit or limit any Party's right to otherwise  initiate or
intervene in any  proceedings  before the  Commission or any other  Governmental
Authority involving its rights,  duties, and obligations under this Agreement or
any aspect of the Transmission System.

     10.11Entire 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 June 20,
2002 among NGUSA,  Ameren, ATSI and NIPSCO regarding the formation and operation
of GridAmerica as an ITC within the Midwest ISO. Except as otherwise provided in
Section  3.4.3,  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 and one or more  Transmission  Owners  owning
Transmission Facilities with a Net Plant of at least 66.67% of the aggregate Net
Plant of all Transmission  Facilities  subject to the Functional  Control of the
Company  pursuant hereto (other than any  Transmission  Facilities  owned by the
Company);  provided, however, that (i) Sections 3.4.1, 4.2.4 and 4.3 may only be
so amended, modified, terminated or waived with the unanimous written consent of
the Company and all the Transmission  Owners, (ii) any amendment,  modification,
termination or waiver that materially adversely affects a specific  Transmission
Owner must be approved in writing by such Transmission Owner, and (iii) a waiver
by a Party as to only its rights may be granted by such Party.

     10.12Efforts of the Parties. Where the consent,  agreement,  or approval of
a Party must be obtained hereunder,  such consent,  agreement, or approval shall
not be unreasonably withheld, conditioned, or delayed. Where a Party is required
or  permitted  to act, or omit to act,  based on its opinion or  judgment,  such
opinion or judgment shall not be unreasonably  exercised. To the extent that the
jurisdiction of any Governmental Authority applies to any part of this Agreement
and/or the transactions or actions covered by this Agreement,  each Transmission
Owner shall  cooperate  with the Company  and all other  Transmission  Owners to
secure any

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<PAGE>

necessary or desirable  approval or acceptance of such Governmental  Authorities
of such part of this Agreement and/or such transactions or actions.

     10.13Third-Party   Joint   Agreements.   This   Agreement,   including  the
appendices, shall not be construed,  interpreted, or applied in such a manner as
to  cause  a  Transmission  Owner  to be in  material  breach,  anticipatory  or
otherwise,  of any  agreement  in effect on the  Effective  Date,  between  such
Transmission  Owner  and one or more  third  parties  for the  joint  ownership,
operation, or maintenance of any electrical facilities covered by this Agreement
or  the  MISO  OATT.  If a  Transmission  Owner  has  such a  third-party  joint
agreement,  it shall discuss with the Company any material conflict between such
third-party  joint agreement and this Agreement  raised by a third party to such
joint  agreement,  but the  resolution of such a conflict  shall,  vis-a-vis the
Company,  be and remain within the sole  discretion of the  Transmission  Owner;
provided,  however,  that the  Transmission  Owner  shall,  if the  conflict  is
otherwise  unresolved,  utilize the  available  remedies and dispute  resolution
procedures to resolve such conflict,  including,  but not limited to, submitting
such conflict to the Commission for resolution;  provided,  further, that unless
so ordered by the Commission or a court having  jurisdiction,  in no event shall
the  Transmission  Owner enter into a resolution  of such  conflict  which would
impair the  reliability of the  Transmission  System.  Each  Transmission  Owner
hereby  represents and warrants that,  except as otherwise set forth on Appendix
B, the  application  of the  provisions  of this  Section  10.13 will not have a
material adverse effect on the ability of the Company to perform its obligations
under  this  Agreement.   Notwithstanding  anything  to  the  contrary  in  this
Agreement,  the  Company  shall  not be  deemed  to be in  breach  of any of its
obligations  under this Agreement or subject to liability  hereunder if it takes
action  or  fails  to  take  action  with  respect  to any  matter  involving  a
Transmission Owner's exercise of its rights under this Section 10.13.

     10.14Confidentiality.  The following  provisions set forth the  obligations
arising  out of the  disclosure  of  Confidential  Information  by a Party  (the
"Disclosing  Party") to one or more Parties (the  "Recipient"  or  "Recipients")
under any Transaction 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"):

                    (i)  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

                    (ii) shall not use Confidential  Information  other than for
                         purposes  legitimately  related to the operation of the
                         business of the Company, including, without limitation,
                         the exercise of Functional Control over any Transferred
                         Facilities   ("Approved  Uses");   provided,   however,
                         that

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<PAGE>

                         nothing contained  herein  shall  limit  the  right  of
                         the Company or any of its Representatives  from  using
                         any Confidential  Information  disclosed to the Company
                         by any Party  consisting of methods,  techniques,  rate
                         design and other similar Confidential Information which
                         relates  to   the   electric   transmission    industry
                         generally,  and not to the business of any Party,  (but
                         excluding any software  developed by the Company or any
                         Transmission  Owner  and  excluding   any  Confidential
                         Information  of   a    Transmission    Owner     marked
                         "Proprietary" by such  Transmission  Owner)  for  other
                         than Approved Uses which are not in  competition  with
                         the business of such Party.  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
                         10.14. 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 the Commission or other
                    Governmental  Authority pursuant to Law or the MISO OATT may
                    be  so  disclosed  without   compliance  with  this  Section
                    10.14(b).


               (c)  Disclosure  In Connection  with  Financing  Transactions  or
                    Transfer  of  Transferred  Facilities.  In  the  event  that
                    a  Recipient

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<PAGE>


                    desires to disclose  Confidential  Information in connection
                    with  a  financing  or  other  similar   transaction  or  in
                    connection  with a transfer of its  Transferred  Facilities,
                    including  as  part  of the  due  diligence  requested  by a
                    proposed   counterparty   or   transferee  (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  10.14;  provided,
                    however,  that  no  competitively   sensitive   Confidential
                    Information concerning a Transmission Owner may be disclosed
                    to  any  Person  that  is  a  direct   competitor   of  such
                    Transmission  Owner without such Transmission  Owner'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 6.2, (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 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

                                       56

<PAGE>

                    Confidential    Information    with    other    Confidential
                    Information, including that of the Company.

     10.15No  Partnership.  This  Agreement  is not  intended,  and shall not be
construed, interpreted or applied, to create a partnership or joint venture, and
no  Transmission  Owner  shall  be  entitled  to act as an agent  for any  other
Transmission Owner with respect to the Company.

     10.16Current Documents.  The Company shall maintain current versions of all
agreements and procedures,  all amendments thereto and shall post such documents
on its Internet World Wide Web Site or equivalent form of electronic posting and
provide such documents to the Transmission Owners.

     10.17Late  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  owning  Party of the  portion of such owning  Party's  payment  that is in
default, together with interest thereon as provided above.

     10.18Counterparts.  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.

     10.19Attorneys'  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.

     10.20Time is of the  Essence.  Time is of the essence of each  provision of
this Agreement.

     10.21Representatives.  No later than fourteen (14) days after the execution
of this Agreement by a Party, such Party shall appoint one (1) representative to
serve as a point of  contact  for  matters  arising  under  this  Agreement.  No
representative  has the right to amend this  Agreement or waive any rights under
this Agreement.  A Party may replace its  representative  at any time at its own
discretion upon providing notice to the other Parties.


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<PAGE>



     IN  WITNESS  WHEREOF,   the  Parties  have  caused  their  duly  authorized
representatives to execute this Agreement, on their respective behalves.


                                  GridAmerica LLC


                                  By  \s\Nicholas P. Winser
                                    --------------------------------------------
                                  Name (typed or printed):  Nicholas P. Winser
                                  Title           Chief Executive Officer


                                  Union Electric Company d/b/a/ AmerenUE
                                  Central Illinois Public Service Company d/b/a/
                                  AmerenCIPS
                                  By:  Ameren Services Company
                                       (their agent)


                                  By  \s\David A. Whiteley
                                    --------------------------------------------
                                  Name (typed or printed):  David A. Whiteley
                                  Title             Senior Vice President


                                  American Transmission Systems, Incorporated



                                  By  \s\Stanley F. Szwed
                                    --------------------------------------------
                                  Name (typed or printed):  Stanley F. Szwed
                                  Title             Vice President


                                  Northern Indiana Public Service Company


                                  By  \s\Jerry L. Godwin
                                    --------------------------------------------
                                  Name (typed or printed):   Jerry L. Godwin
                                  Title                Chief Operating Officer




                                       58