Allete Inc – ‘10-K’ for 12/31/03 – EX-10

On:  Thursday, 3/11/04, at 12:09pm ET   ·   For:  12/31/03   ·   Accession #:  66756-4-34   ·   File #:  1-03548

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Allete 2003 Form 10-K                                141±   647K 
18: 10-K        Unofficial PDF -- r10k03withexhibits                 PDF   2.29M 
 2: EX-2        Ex-2(B) Heater Utilities Stock Purchase Agreement     71    364K 
11: EX-10       Ex-10(Aa)2 Director Compensation Deferral Plan         1      8K 
                          October 2003 Amendment                                 
 3: EX-10       Ex-10(O)3 Split Rock Energy Amended Wholesale         15     54K 
                          Power Coordination and Dispatch                        
                          Operating Agmt 1-30-04                                 
 4: EX-10       Ex-10(P) Split Rock Energy Amended and Restated       41    168K 
                          Withdrawal Agreement 1-30-04                           
 5: EX-10       Ex-10(S) Third Amended and Restated Lasalle           34    122K 
                          Committed Facility Letter 12-23-03                     
 6: EX-10       Ex-10(T)2 Executive Annual Incentive Plan 11-03        1      9K 
                          Amendment                                              
 7: EX-10       Ex-10(U) Supplemental Executive Retirement Plan       27     95K 
                          Effective 1-1-04                                       
 8: EX-10       Ex-10(V)2 Executive Investment Plan-I Amendments       2     13K 
                          Through December 2003                                  
 9: EX-10       Ex-10(W)2 Executive Investment Plan-Ii Amendments      2     13K 
                          Through December 2003                                  
10: EX-10       Ex-10(Z)2 Director Stock Plan Amendments Through       2     12K 
                          December 2003                                          
12: EX-12       EX-12 Ratio of Earnings to Fixed Charges               1     10K 
13: EX-23       Ex-23(A) Consent of Independent Accountants            1      9K 
14: EX-23       Ex-23(B) Consent of General Counsel                    1      9K 
15: EX-31       Ex-31(A) 302 Certification - CEO                       2±    12K 
16: EX-31       Ex-31(B) 302 Certification - CFO                       2±    12K 
17: EX-32       EX-32 906 Certification - CEO and CFO                  1     10K 

EX-10   —   Ex-10(P) Split Rock Energy Amended and Restated Withdrawal Agreement 1-30-04
Exhibit Table of Contents

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                                                                   EXHIBIT 10(p)

CONFIDENTIAL TREATMENT

AMENDED AND RESTATED

WITHDRAWAL AGREEMENT

BY AND BETWEEN

GREAT RIVER ENERGY

 AND

 MINNESOTA POWER

 DATED: JANUARY 30, 2004

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CONFIDENTIAL TREATMENT

 TABLE OF CONTENTS
 -----------------
                                                                            Page
                                                                            ----

ARTICLE 1         DEFINED TERMS................................................3

ARTICLE 2         TRANSFER OF MP FINANCIAL RIGHTS AND CERTAIN                   
BUSINESS ASSETS; MP WITHDRAWAL PAYMENTS;    
                  WITHDRAWAL...................................................9

     2.01   Assignment of MP Financial Rights and Certain Business Assets......9

     2.02   Withdrawal........................................................11

ARTICLE 3         RECONCILIATION AND PAYMENT OF MP CAPITAL                      
                  ACCOUNT.....................................................11

     3.01   Estimated Execution Date MP Capital Account.......................11

     3.02   MP Capital Account Reconciliation.................................13

ARTICLE 4         EMPLOYEES...................................................15

     4.01   [   *   ].........................................................15

     4.02   [   *   ].........................................................15

     4.03   [   *   ].........................................................15

     4.04   [   *   ].........................................................15

ARTICLE 5         OPERATION OF SRE PRIOR TO CLOSING...........................15

     5.01   MP Credit Support of SRE..........................................15

     5.02   Risk Management...................................................15

  5.03   Generation Availability Credit ("GAC") and Combustion Turbine Use
            ("CTU")...........................................................16

ARTICLE 6         CONCURRENT EXECUTION DATE AND CLOSING DATE                    
                  AGREEMENTS AND COOPERATION..................................16

     6.01   Execution Date and Closing Date Agreements........................16

     6.02   Cooperation on Certain Operational Matters........................16

     6.03   Transmission Matters..............................................16

     6.04   Transfer of Data..................................................17

     6.05   FERC Filing and Approval Order....................................17

     6.06   MP Exclusive Purchases and Sales..................................17

ARTICLE 7         INDEMNIFICATION.............................................17

     7.01   Indemnification by MP of GRE......................................17

     7.02   Indemnification by GRE of MP......................................18

     7.03   Principles Regulating Indemnity Rights............................19

*  TEXT HAS BEEN OMITTED PURSUANT  TO A REQUEST FOR CONFIDENTIAL  TREATMENT  AND
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.    
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     7.04   Procedure for Indemnification.....................................19

     7.05   Dispute Resolution................................................22

ARTICLE 8         ADDITIONAL AGREEMENTS WITH RESPECT TO                         
                  OPERATION OF SRE PRIOR TO CLOSING...........................23

     8.01   Actions Refrained From Prior to Closing...........................23

     8.02   Affirmative Actions Prior to Closing..............................24

ARTICLE 9         REPRESENTATIONS AND WARRANTIES OF MP........................24

     9.01   Corporate Standing and Authority; Binding Agreement...............24

     9.02   Absence of Conflicting Agreements or Required Consents............25

     9.03   Title.............................................................25

     9.04   Relinquished Assets...............................................25

     9.05   Litigation........................................................25

ARTICLE 10        REPRESENTATIONS AND WARRANTIES OF GRE.......................25

     10.01  Organization and Authority........................................25

     10.02  Litigation........................................................26

     10.03  Notice of Development.............................................26

ARTICLE 11        CLOSING.....................................................26

     11.01  Time and Place....................................................26

     11.02  Conditions to MP's Obligations to Close...........................26

     11.03  Conditions to GRE's Obligation to Close...........................27

     11.04  Efforts to Satisfy Conditions.....................................28

ARTICLE 12        TERMINATION.................................................29

     12.01  Termination of Agreement..........................................29

     12.02  Procedure Upon Termination........................................29

ARTICLE 13        OTHER MATTERS...............................................29

     13.01  Announcements.....................................................29

     13.02  Use of SRE Name...................................................30

     13.03  Confidentiality...................................................30

     13.04  Tax Matters.......................................................31

ARTICLE 14        MISCELLANEOUS...............................................33

     14.01  Survival of Representations, Warranties and Covenants.............33

     14.02  No Broker.........................................................33

     14.03  Expenses..........................................................33

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     14.04  Notices...........................................................33

     14.05  Binding Effect; No Assignment Without Prior Written Consent.......34

     14.06  Entire Agreement..................................................34

     14.07  Choice of Law.....................................................35

     14.08  Amendment; Waiver.................................................35

     14.09  Pre Closing and Post Closing Cooperation..........................35

     14.10  Counterparts and Facsimile/Electronic Signatures..................35

     14.11  Interpretation....................................................35

     14.12  Payments..........................................................35

     14.13  Termination of Withdrawal Agreement...............................35

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AMENDED AND RESTATED
WITHDRAWAL AGREEMENT

     THIS AMENDED AND  RESTATED  WITHDRAWAL  AGREEMENT  (this  "AGREEMENT"),  is
entered into January 30, 2004, to be effective  from and after December 12, 2003
(the  "EFFECTIVE  DATE") by and between  MINNESOTA  POWER, a division of ALLETE,
Inc., a Minnesota corporation,  an investor-owned utility ("MP") and GREAT RIVER
ENERGY, a Minnesota cooperative corporation ("GRE").                            

RECITALS
--------

     A.     Split  Rock  Energy LLC is a  Minnesota  limited  liability  company
("SRE")  (i)  owned  equally  (50%/50%)  by MP and GRE  (MP  and  GRE  are  each
individually  a  "MEMBER,"  and may  collectively  be  referred to herein as the
"MEMBERS"),  and (ii)  engaged in the  business  of  providing  Core  Operations
(defined below) and Trading Operations (defined below).                         

     B.     SRE is governed  pursuant to that certain  Member  Control Agreement
dated April 14, 2000, entered into by MP and GRE, as amended by (i) that certain
letter  agreement  dated  February  5,  2002,  between  MP and  GRE  (concerning
withdrawal by a Member of SRE),  and (ii) this  Agreement  (the "MEMBER  CONTROL
AGREEMENT").                                                                    

     C.     MP gave notice to GRE  of its desire to withdraw from its membership
in SRE, which notice is acknowledged by the parties hereto to have been properly
given,  even if not strictly in  accordance  with the  provisions  of the Member
Control Agreement.  MP and GRE agree said notice is deemed to have been given on
November 1, 2003.                                                               

     D.     MP and  GRE  entered  into  that  certain  Interim  Agreement  dated
November  18,  2003,  as amended by  Amendment  No. 1 dated  November  21, 2003,
Amendment No. 2 dated December 5, 2003,  Amendment No. 3 dated December 23, 2003
and  Amendment  No.  4  dated  January  30,  2004  (collectively,  the  "INTERIM
AGREEMENT"),  pursuant  to which MP and GRE became  bound to certain  agreements
arising under Sections 2 (operating  expenses;  Net Income and Losses from Power
Trading Transactions; negotiation of a withdrawal agreement), 3 (indemnity), and
4 (termination), of the Interim Agreement (the "BINDING PROVISIONS").           

     E.     MP and GRE shall be bound  to  their  covenants  set  forth  in  the
Binding  Provisions  of the  Interim  Agreement  for the  period  from and after
November 1, 2003,  through the Execution Date (defined below).  At and after the
Closing Date of this Agreement,  the Interim  Agreement,  this Agreement and the
Ancillary  Documents  (defined  below) shall control all relations of MP and GRE
for the respective time periods set forth therein and herein. To the extent this
Agreement conflicts with the Interim Agreement, this Agreement shall govern.    

     F.     MP and GRE  entered  into  that  certain  Withdrawal Agreement dated
December 12, 2003,  as amended by Amendment  No. 1 dated  December 23, 2003 (the
"WITHDRAWAL  AGREEMENT")  pursuant  to which MP and GRE set  forth  the terms by
which,  among other things,  it was anticipated  that MP would withdraw from its
membership in SRE (the "MP WITHDRAWAL").                                        

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     G.     Subsequent to the execution and delivery of the Withdrawal Agreement
it was  determined  that  additional  time would be  required  to obtain a prior
consent order from FERC (as defined below) pursuant to applicable law, including
Section 203 of the Federal Power Act, before the MP Withdrawal could be lawfully
effected (the "FERC APPROVAL").                                                 

     H.     As a consequence of delay  occasioned by  the FERC Approval process,
MP and GRE have hereby  amended and  restated  the  Withdrawal  Agreement in its
entirety to (i) set forth the amended and restated  agreement of MP and GRE with
respect to the MP Withdrawal,  (ii)  terminate the  Withdrawal  Agreement in its
entirety,  and (iii) establish the further understandings and covenants by which
certain actions of MP and GRE will (x) restate and revise the existing  business
relations  between MP and GRE as Members of SRE pending the FERC  Approval,  and
(y)  amend  the  Member  Control  Agreement  to  incorporate  the  terms of this
Agreement.                                                                      

     I.     The initial  actions taken by MP  and GRE to effect the  matters set
forth in Recital H above shall occur at and upon  January 31, 2004 at 11:59 p.m.
CST (the "EXECUTION  DATE") to be followed by the Closing (defined below) on the
Closing  Date,  upon  satisfaction  of the  conditions  to Closing  set forth in
Article 11 of this Agreement.                                                   

     J.     Within five (5) business days  after  receipt of the  FERC Approval,
and and the  satisfaction  of the conditions set forth in Article 11 hereof,  MP
will  withdraw as a Member of SRE  effective  on the Closing  Date at 11:59 P.M.
(CST) (the "WITHDRAWAL  EFFECTIVE TIME") and, effective upon the Closing of this
Agreement and at the Withdrawal  Effective  Time, MP shall no longer be a Member
of SRE nor have any further  obligations  under the Member Control  Agreement or
any other SRE governing document or ancillary agreement,  instrument or document
(other  than the  Ancillary  Documents)  arising  from,  in  connection  with or
pursuant to the organization,  operation or continuing operations of SRE, except
as set forth herein  and/or  pursuant to the Binding  Provisions  of the Interim
Agreement;  PROVIDED,  HOWEVER, that nothing herein shall affect the validity or
continued effectiveness of the Margin Agreement between the Members.            

     K.     Subject  to the Closing of  this Agreement, the timing and method of
withdrawal  by MP as set  forth  in this  Agreement  and the  Interim  Agreement
constitutes a proper amendment and/or waiver of the withdrawal provisions of the
Member Control Agreement with respect to MP.                                    

     L.     From  and after the  Closing  date, all rights and obligations of MP
arising in connection  with SRE shall be determined  solely by the terms of this
Agreement  and the  documents,  instruments,  agreements  and  schedules  hereto
(collectively, the "ANCILLARY DOCUMENTS"),  including any rights and obligations
to or from SRE, GRE and any and all Third Parties.                              

 AGREEMENT
 ---------

     NOW, THEREFORE,  in  consideration  of the  foregoing  Recitals,  which are
incorporated  herein as essential terms of this Agreement,  the mutual covenants
and agreements                                                                  

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hereinafter contained,  and other good and valuable  consideration,  the receipt
and  sufficiency of which are hereby  acknowledged,  the parties hereto agree as
follows:                                                                        

ARTICLE 1 

 DEFINED TERMS

     For  purposes  of this  Agreement and  the Schedules to this Agreement, the
following terms have the meanings specified:                                    

     "AAA RULES" shall  have the  meaning  set forth  in Section 7.05(b) of this
Agreement.                                                                      

     "ACCOUNTING ARBITRATOR" shall have the meaning set forth in Section 3.02(b)
of this Agreement.                                                              

     "ADMINISTRATIVE FEES" or "ADMINISTRATIVE FEE" shall  have  the meaning  set
forth in Section 2.01(d) of this Agreement.                                     

     "AGREEMENT" shall  have  the  meaning  set  forth in the  Preamble to  this
Agreement.                                                                      

     "ANCILLARY DOCUMENTS" shall have the meaning set forth  in the  Recitals to
this Agreement.                                                                 

     "ASSETS"  shall  have  the  meaning set  forth in  Section 2.01(b) of  this
Agreement.                                                                      

     "ASSOCIATED INDEMNIFIED  PARTIES"  shall  have  the  meaning  set  forth in
Section 7.01 of this Agreement.                                                 

     "AUTHORIZED REPRESENTATIVES"  shall  have the  meaning set forth in Section
13.03 of this Agreement.                                                        

     "BINDING PROVISIONS"  shall  have  the meaning set forth in the Recitals to
to this Agreement.                                                              

     "BUSINESS" shall  mean the Core  Operations and  Trading Operations of SRE,
wherever its operations are conducted.                                          

     "CAPITAL ACCOUNT" means, for purposes of Section 3.01 and other  provisions
of this  Agreement  and the  Ancillary  Documents,  the capital  accounts of the
Members derived by generally accepted accounting principles consistently applied
by SRE, as  maintained  on a "book"  basis (as opposed to any tax basis  capital
account),  which  includes  the  initial  investments  of the  Members  and  the
subsequent activities of SRE from and after such investments.                   

     "CAPITAL VIG" shall have the meaning set  forth in  Section 3.01(b) of this
Agreement.                                                                      

   "CTU" shall have the meaning set forth in Section 5.03 of this Agreement.

     "CLOSING" shall  have  the  meaning  set  forth  in  Section 11.01 of  this
Agreement.                                                                      

     "CLOSING DATE" shall have the meaning set  forth in  Section 11.01 of  this
Agreement.                                                                      

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     "COBANK CREDIT FACILITY"  means  that certain Credit Agreement dated August
16, 2000 as amended by First  Amendment  to Credit  Agreement  dated  August 15,
2001, by Second  Amendment to Credit  Agreement  dated August 14, 2002, by Third
Amendment to Credit  Agreement  dated August 13,  2003,  by Fourth  Amendment to
Credit  Agreement  dated  November  12, 2003,  and by Fifth  Amendment to Credit
Agreement  dated  January  30,  2004,  by and  between  SRE  and  the  financial
institutions  from time to time party  thereto and CoBank ACB in its capacity as
agent for the Banks as  Administrative  Agent, (as such terms are defined in the
CoBank Credit Facility).                                                        

     "CODE" means the  Internal  Revenue  Code  of  1986, as  amended,  and  any
successor  thereto.  Any reference to specific  Sections of the Code shall be to
the Section as it now exists and to any successor provision.                    

     "CONFIDENTIAL INFORMATION" shall  have  the  meaning set  forth in  Section
13.03 of this Agreement.                                                        

     "CONSENTS" shall have the  meaning  set  forth  in  Section  9.02  of  this
Agreement.                                                                      

     "CORE OPERATIONS" means the various core utility operations SRE conducts on
behalf  of its  Members,  including  but not  limited  to joint  and  economical
dispatch of the combined generation  resources of its Members to optimally serve
the native  load of each,  marketing  and  selling to third  parties  the excess
generation of its Members not used to serve Members' native load customers,  and
purchase and brokering of energy from third parties for least cost supply to its
Members to serve  their  native  load  customers,  and  related  services as are
performed by SRE.                                                               

     "EFFECTIVE DATE" shall have the meaning set forth in the  Preamble to  this
Agreement.                                                                      

     "ESTIMATED EXECUTION DATE MP CAPITAL ACCOUNT" has the meaning  set forth in
Section 3.01(a) of this Agreement.                                              

     "EXCLUSIVE MEMBER SALES"  are  capacity  and energy  sales  contracts  that
Members have  entered  into prior to becoming SRE Members,  or direct sales by a
Member to another  Member or any Third Party that have been  approved by the SRE
Board of Governors.                                                             

     "EXCLUSIVE PURCHASE" is a purchase that flows  directly to a  specific  SRE
Member.                                                                         

     "EXECUTION DATE" shall  have  the meaning set forth in the Recitals to this
Agreement.                                                                      

     "EXECUTION DATE MP CAPITAL ACCOUNT"  has  the  meaning set forth in Section
3.01(b) of this Agreement.                                                      

     "EXECUTION DATE MP CAPITAL ACCOUNT DISTRIBUTION" shall have the meaning set
forth in Section 3.01(a) of this Agreement.                                     

     "FERC" means the Federal Energy  Regulatory  Commission, an  agency of  the
United States government.                                                       

     "FERC APPROVAL" shall have the meaning set forth in  the  Recitals to  this
Agreement.                                                                      

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     "FERC FILING" shall have  the meaning  set forth in  Section 6.05  of  this
Agreement.                                                                      

     "FERC ORDER"  shall  have the  meaning  set forth  in Section 6.05 of  this
Agreement.                                                                      

   "GAC" shall have the meaning set forth in Section 5.03 of this Agreement.

   "GRE" shall have the meaning set forth in the Preamble to this Agreement.

     "GRE ATTORNEY FEES" shall have the meaning set forth in  Section 7.01(e) of
this Agreement.                                                                 

     "GRE INDEMNIFIED PARTY" or "GRE INDEMNIFIED PARTIES" shall have the meaning
set forth in Section 7.04(a) of this Agreement.                                 

"GOVERNMENTAL BODY" means any:                                        

            (i)   nation,  state, county, city, town, village, district or other
jurisdiction of any nature;                                           

            (ii)  federal, state, local, municipal, foreign or other government;

            (iii) governmental  or  quasi-governmental authority of  any  nature
     (including any governmental agency, branch, board, commission,  department,
    instrumentality, office or other entity, and any court or other tribunal);

(iv)  multinational organization or body; and/or        

            (v)   body exercising,  or  entitled  or purporting to exercise, any
     administrative, executive,  judicial,  legislative,  police,  regulatory or
taxing authority or power of any nature.                              

     The foregoing definition of  Governmental Body  does not and shall  not  be
deemed to include MAPP or MAIN.                                       

"IMO" means Ontario Independent Market Operator.                      

     "INDEMNIFIED PARTY" or  "INDEMNIFYING PARTY"  shall  have  the  meaning set
forth in Section 7.04(c) of this Agreement.                                     

     "INTERIM AGREEMENT" shall have the  meaning set  forth in  the Recitals  to
this Agreement.                                                                 

     "INTERIM PERIOD" shall mean the period commencing November 1, 2003, through
the Execution Date.                                                             

     "JOINT REPORTING TRANSMISSION"  means  the MAPP firm  transmission  service
required by the MAPP reliability handbook rules to support exchanges of capacity
and  energy  between  MP and GRE  during  such time as SRE is  engaged  in joint
reporting of load and capability for MP and GRE.                                

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     "KENDALL COUNTY" means the Kendall  County, Illinois  Unit No. 3 generator,
from which RREC purchases and remarkets power on the wholesale market.          

     "LOSS" or "LOSSES" shall have the meaning set forth in Section 7.01 of this
Agreement.                                                                      

"MAIN" means MidAmerica Interconnected Network.                       

"MAPP" means the Mid-Continent Area Power Pool.                       

     "MISO" means the Midwest Independent System Operator, Inc., a FERC approved
regional transmission organization.                                             

     "MLLCA" means the Minnesota Limited Liability  Company Act, Chapter 322B of
the Minnesota Statutes.                                                         

  "MP" shall have the meaning set forth in the Preamble to this Agreement.

     "MP-GRE BLOCK A AND B AGREEMENTS" means the Block A and Block B Transaction
and Confirmation Agreements dated August 28, 2003 between MP and GRE.           

     "MP INDEMNIFIED PARTY" or "MP  INDEMNIFIED PARTIES" shall  have the meaning
set forth in Section 7.04(b) of this Agreement.                                 

     "MP LEAST COST  SUPPLY"  means such  MP  transactions  for  power,  energy,
transmission  and  financial  products  entered  into for  supply of its  native
utility end use load obligations.                                               

     "MP REPRESENTATIVE" shall have the meaning set forth in Section 13.04(b) of
this Agreement.                                                                 

     "MP WITHDRAWAL" shall have the meaning set  forth in the  Recitals  to this
Agreement.                                                                      

     "MPUC" shall mean the Minnesota Public Utilities  Commission, a  regulatory
political subdivision of the State of Minnesota.                                

     "MANAGEMENT EMPLOYEES" shall have the meaning set forth  in Section 4.01 of
this Agreement.                                                                 

     "MARGIN AGREEMENT" means that certain  Margin Agreement  between MP and GRE
dated February 22, 2001.                                                        

     "MEMBER" or "MEMBERS" shall have the  meaning set  forth in the Recitals to
this Agreement.                                                                 

     "MEMBER CONTROL AGREEMENT" shall have the meaning set forth in the Recitals
to this Agreement.                                                              

     "MEMBERSHIP INTEREST PAYMENT"  shall have  the meaning set forth in Section
2.02(b) of this Agreement.                                                      

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     "MEMBERSHIP INTEREST TRANSFER ORDER" shall  have the  meaning  set forth in
Section 6.05(i) of this Agreement.                                              

     "MEMBERSHIP  INTEREST"  or  "MEMBERSHIP  INTERESTS"  shall mean the  entire
membership  interest of MP in SRE, as that term is                              
defined in Minn. Stat.ss. 322B.03 subd. 31 (2003).                              

     "NET INCOME" and "NET LOSSES" means, for each taxable year or other period,
an amount  equal to SRE's  taxable  income or loss,  as the case may be, for the
year or other period,  determined in accordance  with Section 703(a) of the Code
(including all items of income,  gain,  loss or deduction  required to be stated
separately under Section 702(a) of the Code), with the following adjustments:   

            (1)   Any income of SRE that is exempt from  federal income tax  and
     not otherwise taken into account in computing Net Income or Net Losses will
be added to taxable income or shall reduce a loss;                    

            (2)   Any expenditures of SRE described in Code Section 705(a)(2)(B)
     or treated as Section 705(a)(2)(B) expenditures under  Treasury Regulations
     Section 1.704-1(b)(2)(iv)(i), and  not  otherwise  taken  into  account  in
     computing profits or  losses, will be  subtracted  from taxable  income  or
loss;                                                                 

            (3)   Any items which are  specially allocated to a Member of SRE as
     required by applicable provisions of the Code, will not affect calculations
of Net Income or Net Losses; and                                      

            (4)   For this purpose, any deduction for a loss on sale or exchange
     of SRE property which is disallowed to SRE under  Code Section 267(a)(1) or
     Section 707(b) shall be treated as a Code Section 705(a)(2)(B) expenditure.

     "ORDER" means an action or decision of  the Governmental  Body as to  which
(i) no request for a stay is pending, no stay is in effect, and any deadline for
filing such request that may be  designated  by any  applicable  law has passed,
(ii) no petition for rehearing or  reconsideration  or application for review is
pending and the time for the filing of such petition or application  has passed,
(iii)  the  Governmental  Body  does not  have  the  action  or  decision  under
reconsideration  on its own motion and the time within  which it may effect such
reconsideration  has passed, and (iv) no judicial appeal is pending or in effect
and any deadline for filing any such appeal that may be designated by statute or
rule has passed.                                                                

     "OVERLAP PERIOD" shall have the  meaning set  forth in  Section 13.04(b) of
this Agreement.                                                                 

     "POWER TRADING TRANSACTION" means power Trading Operations conducted by SRE
with or between  non-Member Third Parties (i.e., not involving any Member),  but
excluding Core Operations and any Exclusive Member Sales or Exclusive Purchases.

     "PROCEEDING"  means  any  claim, suit,  litigation,  arbitration,  hearing,
audit,   investigation,   Order,  or  other  action  (whether  civil,  criminal,
administrative or investigative)  noticed,  commenced,  brought,  conducted,  or
heard by or before, or otherwise involving, any Governmental Body or arbitrator.

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     "RREC" means Rainy River Energy Corporation, a Minnesota  corporation  that
is a subsidiary of MP.                                                          

     "REQUIRED NOTICE INFORMATION" shall have the  meaning set  forth in Section
7.04(a) of this Agreement.                                                      

     "RETAINED MP CAPITAL ACCOUNT" shall have the  meaning set forth in  Section
3.01(b) of this Agreement.                                                      

   "SRE" shall have the meaning set forth in the Recitals to this Agreement.

     "STATEMENT OF EXECUTION DATE MP CAPITAL ACCOUNT" shall have the meaning set
forth in Section 3.02(a) of this Agreement.                                     

     "TANGIBLE ASSETS" shall have the meaning set forth in Section 2.01(b)(i) of
this Agreement.                                                                 

     "TAX" or "TAXES" means any federal, state, local  or foreign  income, gross
receipts,  license, payroll,  employment,  excise, severance, stamp, occupation,
premium,  windfall profits,  environmental  (including taxes under Code ss.59A),
customs duties, capital stock, franchise, profits, withholding,  social security
(or similar), unemployment, disability, real property, personal property, sales,
use,  transfer,  registration,  value  added,  alternative  or  add-on  minimum,
estimated, or other tax of any kind whatsoever,  including any interest, penalty
or addition thereto, whether disputed or not.                                   

     "TAX MATTER" shall have  the  meaning set forth in Section 13.04(b) of this
Agreement.                                                                      

     "TAX RETURN" means any  return,  declaration, report, claim for  refund, or
information  return or statement  relating to Taxes,  including  any schedule or
attachment thereto, and including any amendment thereof.                        

     "THIRD PARTY" or "THIRD PARTIES" shall  mean any  person or  entity that is
not a party to this Agreement, other than SRE.                                  

     "TRADING OPERATIONS" means the various wholesale  power trading  operations
SRE  conducts  pursuant  to its  market-based  rate  tariff  on file at the U.S.
Federal Energy Regulatory Commission, including but not limited to Power Trading
Transactions,  wholesale  power trading,  engaging in the physical and financial
trading of electric power and energy,  gas trading,  hedging,  including but not
limited to foreign  exchange  hedges,  and trading  transmission  service  under
separately tagged and segregated portfolio  operations,  other than trading done
for Core Operations.                                                            

     "WITHDRAWAL AGREEMENT" shall have the meaning set forth  in the Recitals to
this Agreement.                                                                 

     "WITHDRAWAL EFFECTIVE TIME"  shall  have  the  meaning  set  forth  in  the
Recitals to this Agreement.                                                     

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     "WITHDRAWAL PAYMENT" shall have the meaning set forth in Section 2.01(c) of
this Agreement.                                                                 

     "WITHDRAWAL SETTLEMENT" shall have the meaning set forth in Section 2.01(c)
of this Agreement.                                                              

ARTICLE 2 

 TRANSFER OF MP FINANCIAL RIGHTS AND CERTAIN BUSINESS ASSETS; MP
WITHDRAWAL PAYMENTS; WITHDRAWAL 

     2.01   ASSIGNMENT OF MP  FINANCIAL  RIGHTS  AND  CERTAIN  BUSINESS  ASSETS.
Effective at and upon the Execution Date:                                       

            (a)   ASSIGNMENT OF FINANCIAL RIGHTS. Except as contemplated by  the
     terms of this  Agreement,  MP hereby  assigns to GRE, free and clear of all
     liens, claims,  encumbrances,  restrictions and security interests, any and
     all   financial   rights  in  the  profits  and  losses  of  SRE,  and  any
     distributions  thereof,  to which MP would  otherwise be entitled under the
     Member Control  Agreement or the MLLCA.  This assignment by MP shall (i) be
     governed  by  Section  322B.31  of the  MLLCA,  and (ii) serve to amend the
     following   provisions  of  the  Member  Control  Agreement:   Section  4.3
     (Allocations  of  Net  Income  and  Net  Losses),  Section  4.5  (Mandatory
     Distributions),   Section  4.6  (Distributions  in  Kind),  Section  4.7(c)
     (Qualified  Income  Offset),  Section 4.9  (Discretionary  Adjustment)  and
     Section 4.10  (Special  Allocations  to Founding  Members - New Member Fee;
     Distributions).  Based on and in clarification of the foregoing,  except as
 provided in this Agreement, upon and after the Execution Date MP shall:

                        (A)   have no further  right  under the  Member  Control
                  Agreement to (i) any further  allocations of net income or net
                  losses,  (ii)  mandatory or  permissive  distributions,  (iii)
                  distributions in kind, or (iv) special  allocations  described
    in Section 4.10 of the Member Control Agreement.

                        (B)   not be (1) allocated any adjustment, allocation or
                  distribution described in Section 4.7(c) of the Member Control
                  Agreement,  or (2)  subject  to any  discretionary  adjustment
                  described in Section 4.9 of the Member Control  Agreement,  it
                  being  agreed that the matters  which take effect  pursuant to
                  and on the Execution Date,  including  without  limitation the
                  termination  of MP's credit support for the operations of SRE,
                  have  and  reflect  the  substantial  economic  effect  of the
                  respective economic interests of MP and GRE from and after the
                  Execution   Date  and  are   intended  to  conform   with  the
                  requirements  of  Code  Section  704(b)  and  the  regulations
                  thereunder. As a consequence of the foregoing, with respect to
                  any and all  allocations of any economic  activity of SRE upon
                  and after  the  Execution  Date,  MP shall be  allocated  zero
                  percent  (0%) and GRE shall be allocated  one hundred  percent
(100%).                                     

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            (b)   ASSIGNMENT OF CERTAIN  BUSINESS  ASSETS.  MP  hereby  assigns,
     relinquishes and transfers any and all right,  title and interest in and to
     the assets set forth below to GRE, or its designee,  on the Execution  Date
(the "ASSETS").                                                       

                  (i)   All  tangible  property  of  MP used  presently  in  the
Business (the "TANGIBLE ASSETS").                       

                  (ii)  All rights to  use  and  all  copies of (i)  the  ZaiNet
            software that are conferred by the Sungard  (Caminus)  license,  and
            (ii)  the  maintenance  and  other  agreements  attached  hereto  as
            SCHEDULE  2.01(b)(ii),  pursuant  to the ZaiNet  Novation  Agreement
substantially in the form attached hereto as EXHIBIT A. 

                  (iii) Any software (other than the ZaiNet software  referenced
            above)  developed or modified by SRE and/or MP for use by SRE as set
            forth on SCHEDULE  2.01(b)(iii).  This  software  includes,  without
            limitation,   all  source   code,   object  code  other   associated
            documentation,  and new  versions,  revisions,  updates and upgrades
            currently in the possession of MP;  PROVIDED,  HOWEVER,  that at the
            Closing   GRE  shall   grant  to  MP  a   perpetual,   royalty-free,
            non-transferable  license to use and/or modify such software for use
            in its core least cost supply  license  and any  Trading  Operations
post-Closing.                                           

                  (iv)  The  telephone,  servers,  office  furniture  and  other
            personal  property,  and the leased Dell personal computer equipment
         and associated software described on SCHEDULE 2.01(b)(iv) hereto.

                  (v)   Copies of all data used in the  Business that is in MP's
            control,  including  but not limited to data  contained in MP's data
            warehouse.  MP shall  have the right to  retain  copies of such data
without restriction, except as set forth herein.        

            The Assets shall be  relinquished  and  transferred to  GRE  or  its
     designee pursuant to a bill of relinquishment and transfer substantially in
the form of EXHIBIT B hereto.                                         

            (c)   PAYMENT OF WITHDRAWAL  SETTLEMENT.  In  full  settlement  (the
     "WITHDRAWAL  SETTLEMENT") of MP's termination of financial participation in
     SRE and as an advance  payment for MP's withdrawal as a party to the Member
     Control  Agreement at the Withdrawal  Effective  Time, MP has, on or before
     the Execution  Date,  remitted a payment to GRE of One Million Nine Hundred
Seventy-Nine Thousand Dollars ($1,979,000) (the "WITHDRAWAL PAYMENT").

            (d)   ADMINISTRATIVE  FEES. On or  within  five (5) days  after  the
     Execution Date, MP shall remit to GRE an administrative fee of $100,000. In
     the event that the FERC Order is not  received on or before  April 1, 2004,
     MP shall remit to GRE an additional  administrative  fee(s) of $200,000 for
     the month of April,  2004,  and each  succeeding  month  thereafter  to the
     Closing or  termination  of this  Agreement,  which  payments shall be made
     respectively  on April 30, 2004,  and the last day of each such  succeeding
     month  thereafter,  unless the Closing or a termination  of this  Agreement
     occurs within or before any of such months. If the Closing or a termination
of this Agreement occurs in any of                                    

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     the months set forth  above,  the  administrative  fee for (i) the month in
     which the Closing or a  termination  occurs shall be prorated by the number
     of days in the month through the Closing Date or the termination  date (for
     example,  if the Closing Date is April 16, 2004, the administrative fee for
     the  month  will be  (16/30 X  $150,000)),  and (ii) all  months  after the
     Closing Date or the termination  date shall not become due (any amount that
     accrues  pursuant  to  the  above  shall  be  referred  to  herein  as  the
     "ADMINISTRATIVE  FEES" and any full or partial payment relating to a single
month is an "ADMINISTRATIVE FEE").                                    

2.02   WITHDRAWAL.                                                    

            (a)   MP WITHDRAWAL. At and  upon  the Withdrawal Effective Time, MP
     shall be deemed to have withdrawn from the Member Control  Agreement.  As a
     consequence,  MP shall no  longer  be a Member  of SRE or have any  further
     rights or  obligations  under the  Member  Control  Agreement  or any other
     governing  document,  or agreement  arising from,  in  connection  with, or
     pursuant to the  organization,  operation or continuing  operations of SRE,
     except as set forth herein and/or  pursuant to the Ancillary  Documents and
the Binding Provisions of the Interim Agreement.                      

            (b)   RELINQUISHMENT AND  TRANSFER OF MP MEMBERSHIP INTEREST. At and
     upon the  Closing,  for a payment by GRE to MP of One  Million  Dollars ($1
     million),  plus the Capital Vig (the  "MEMBERSHIP  INTEREST  PAYMENT")  and
     other  good and  valuable  consideration,  on the  Closing  Date,  MP shall
     relinquish and transfer to GRE the  Membership  Interest of MP in SRE, free
     and clear of all liens,  claims,  encumbrances,  restrictions  and security
     interests  pursuant  to  a  Relinquishment  and  Assignment  of  Membership
Interest substantially in the form of EXHIBIT C hereto.               

ARTICLE 3 

RECONCILIATION AND PAYMENT OF MP CAPITAL ACCOUNT

3.01   ESTIMATED EXECUTION DATE MP CAPITAL ACCOUNT.                   

            (a)   ESTIMATION AND PARTIAL DISTRIBUTION OF THE MP CAPITAL ACCOUNT.
     GRE has caused SRE to deliver to MP a statement of the estimated MP Capital
     Account,  which  estimate was  determined  on a basis  consistent  with the
     methodology to be employed in the  calculation of the Capital Account of MP
     pursuant to Section 3.01(c) below (such estimate,  the "ESTIMATED EXECUTION
     DATE MP CAPITAL  ACCOUNT").  GRE and MP agree that the Estimated  Execution
     Date MP Capital Account amount is  $12,406,996.  On the Execution Date, GRE
     shall cause SRE to remit $10 million to MP as a partial  distribution  from
     the  Capital  Account  of  MP  (the  "EXECUTION  DATE  MP  CAPITAL  ACCOUNT
DISTRIBUTION").                                                       

            (b)   EXECUTION  DATE MP CAPITAL  ACCOUNT  AND  RETAINED  MP CAPITAL
     ACCOUNT.  Subsequent to the Execution Date, the Estimated Execution Date MP
     Capital  Account shall be  reconciled to the actual  balance of the Capital
     Account of MP (the "EXECUTION DATE MP CAPITAL  ACCOUNT") in accordance with
     Section 3.02 below.  The  difference  between the Execution Date MP Capital
Account and the sum of: (x) $10 million                               

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     Execution  Date MP Capital  Account  Distribution,  and (y) the  Membership
     Interest  Payment  (less the Capital Vig  thereon)  (such  difference,  the
     "RETAINED MP CAPITAL ACCOUNT") will be remitted to MP at the Closing, along
     with interest at an annual rate of 1.25%  thereon from the  Execution  Date
     through the Closing Date (the  "CAPITAL  VIG"),  pursuant to receipt of the
     FERC Order (defined in Section 6.05(ii)). The parties acknowledge and agree
     that,  at and upon the  Closing,  $1 million of the Capital  Account of MP,
     representing  the initial  capital  contribution of MP in SRE, shall be (1)
     retained in SRE,  and (2) will  become  part of the GRE Capital  Account in
SRE.                                                                  

            (c)   COMPUTATIONS FOR MP CAPITAL ACCOUNT. For purposes of computing
     (i) the Estimated Execution Date MP Capital Account, and (ii) the Execution
     Date MP Capital  Account,  each such capital account shall be determined in
     accordance  with the book value of such MP Capital  Account  (as opposed to
     the Tax basis Capital  Account of MP)  determined  in  accordance  with the
     generally  accepted  accounting  principles  of SRE  consistently  applied,
     except  that MP and GRE  have  agreed  to  amend  hereby  such  controlling
     provisions  of the Member  Control  Agreement in order to  incorporate  the
     following deviations from prior practice.  In furtherance of the foregoing,
     GRE   shall   cause   SRE  to   adopt   and   incorporate   the   following
     accounting/allocation principles into the SRE accounting for its operations
     and its Capital  Accounts  for the  period(s)  commencing  November 1, 2003
through the Execution Date:                                           

                  (i)   All trading gross margin (gross  margin  or  gross  loss
            from  marketing   activities)  as  determined  in  accordance   with
            generally accepted accounting principles consistently applied by SRE
            arising from or incident to Power Trading Transactions (i) initiated
            on or after November 1, 2003, and (ii) those  initiated prior to and
            delivered  on or after  November 1, 2003,  in each case  through the
            Execution  Date,  shall be allocated in their entirety (100%) to GRE
and no allocation shall be made to MP; and              

                  (ii)  All core  gross  margin  (gross  margin  from  marketing
            activities)  as  determined in accordance  with  generally  accepted
            accounting  principles  consistently  applied by SRE arising from or
            incident to Core Operations  prior to and through the Execution Date
shall be allocated equally (50%/50%) to MP and GRE; and 

                  (iii) The  operating   expenses  and  costs  arising  from  or
            incident to Core Operations and Power Trading  Transactions  for the
            period (A) commencing  November 1, 2003,  through December 31, 2003,
            shall be allocated equally (50%/50%) to MP and GRE, except that MAPP
            and MAIN fees  shall be  allocated  in  accordance  with  historical
            practices,  and (B)  commencing  January 1, 2004,  to the  Execution
            Date, the  allocation of such operating  expenses and costs shall be
            wholly (100%) to GRE, and no allocation  shall be made to MP, except
            that (i) MAPP and MAIN fees shall be  allocated in  accordance  with
            historical  practices,  and (ii) Three Hundred  Twenty Five Thousand
            ($325,000)  shall be allocated to MP for payment of Core  Operations
expenses for January, 2004; and                         

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                  (iv)  All credit facility fees and interest expense and gains/
            losses on foreign  currency  allocations  relating to Power  Trading
            Transactions for the period commencing November 1, 2003, through the
            Execution  Date shall be allocated in their  entirety  (100%) to GRE
and no allocation shall be made to MP; and              

                  (v)   All interest income for the  period  commencing November
            1, 2003,  through  the  Execution  Date shall be  allocated  equally
(50%/50%) to MP and GRE; and                            

                  (vi)  Any adjustments,  mark-to-market adjustments, and normal
            accounting adjustments made in the ordinary course of business shall
            be allocated (A) equally  (50%/50%) to MP and GRE if such adjustment
            relates to the period prior to November 1, 2003,  or (B)  consistent
            with Sections  3.01(c)  (i)-(v) of this Agreement if such adjustment
            relates to the period from and after  November  1, 2003  through the
Execution Date; and                                     

                  (vii) In computation  of  any  of  the  foregoing, or  the  MP
            Capital  Account   generally,   all  SRE  Management   Employee  and
            non-Management  Employee  severance  pay or other  such  termination
            costs  (including  non-cash  benefits)  shall be  allocated in their
     entirety (100%) to GRE and no allocation shall be made to MP.

3.02   MP CAPITAL ACCOUNT RECONCILIATION.                             

            (a)   STATEMENT OF EXECUTION  DATE MP CAPITAL  ACCOUNT.  As soon  as
     practicable,  and in no  event  later  than  twenty  (20)  days  after  the
     Execution  Date,  GRE shall  cause SRE to prepare and provide to MP a final
     calculation of the Execution Date MP Capital  Account  determined as of the
     Execution  Date (the  "Statement  of Execution  Date MP Capital  Account"),
     which  Statement of Execution Date MP Capital  Account shall be prepared in
     accordance with generally accepted accounting  principles and procedures of
     SRE consistently  applied,  except for the adjustments  required by Section
     3.01(c)  above.  The  reasonable  fees,  costs and  expenses of Third Party
     professionals  (but not the internal costs to SRE or GRE)  associated  with
     the preparation of the Statement of Execution Date MP Capital Account shall
     be borne one hundred percent (100%) by MP. MP shall have concurrent  access
     to  any  of  the  work  papers  and  source  documentation  of  SRE  or its
     professionals  that are utilized in any way in the  compilation  of data or
     preparation of the Statement of Execution Date MP Capital  Account.  Within
     ten (10) days  after its  receipt of the  Statement  of  Execution  Date MP
     Capital Account,  MP shall provide SRE with notice of any disagreement with
     the  preparation  of  or  the  calculations  underlying  the  Statement  of
     Execution  Date MP Capital  Account,  specifying in reasonable  detail such
     disagreement.  If within such ten (10) day period MP makes no  objection to
     the Statement of Execution Date MP Capital  Account,  then the Statement of
     Execution  Date MP Capital  Account shall become final and binding upon the
     parties and the amount  therein shall state the  Execution  Date MP Capital
Account.                                                              

            (b)   DISPUTE  RESOLUTION.  If  MP   objects  to  the  Statement  of
     Execution  Date MP  Capital  Account in any  manner,  then GRE and MP shall
negotiate in good faith for a                                         

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     period of ten (10) days from and after the date of the MP  objection(s)  to
     resolve such  objection(s).  If the parties fail to agree on a Statement of
     Execution Date MP Capital  Account within the  aforementioned  ten (10) day
     period,  then, as to any matters  still in dispute,  MP and GRE shall refer
     the matter to  arbitration  conducted by a mutually  acceptable  accounting
     firm  independent  of GRE and MP (such  firm to serve  as  arbitrator  (the
     "ACCOUNTING ARBITRATOR") for the sole purpose of this Section 3.02(b)). The
     Accounting  Arbitrator  so  selected  will  consider  only those  items and
     amounts set forth in the Statement of Execution Date MP Capital  Account as
     to which MP and GRE have disagreed within the time periods and on the terms
     specified  above and must resolve the matter in  accordance  with the terms
     and provisions of this Agreement. In submitting a dispute to the Accounting
     Arbitrator,  each of MP and GRE shall  concurrently  furnish,  at their own
     respective expense,  to the Accounting  Arbitrator and the other party such
     documents and  information as the Accounting  Arbitrator may request.  Each
     party may also furnish to the Accounting  Arbitrator such other information
     and documents as it deems relevant,  with copies of such submission and all
     such documents and information being concurrently given to the other party.
     Neither party shall have or conduct any  communication,  either  written or
     oral, with the Accounting Arbitrator without the other party, respectively,
     either  being  present  or  receiving  a  concurrent  copy  of any  written
     communication.   The   Accounting   Arbitrator  may  conduct  a  conference
     concerning the objections  and  disagreements  between MP and GRE, at which
     conference  each party shall have the right to (i)  present its  documents,
     materials  and  other  evidence  (previously  provided  to  the  Accounting
     Arbitrator  and the  other  party),  and  (ii)  have  present  its or their
     advisors,  accountants,  counsel and other representatives.  The Accounting
     Arbitrator  shall  resolve  each item of  disagreement  based solely on the
     presentations  and  supporting  material  provided  by the  parties and not
     pursuant to any  independent  review  (the  foregoing,  however,  shall not
     preclude the Accounting  Arbitrator from  independent  research of facts or
     determining  proper  application  of  SRE  generally  accepted   accounting
     principles  consistently  applied  or the terms of this  Agreement  and the
     Ancillary  Documents  with respect to the subject  matter of the objections
     and  disagreement  between the parties).  The Accounting  Arbitrator  shall
     issue a detailed written report that sets forth the resolution of all items
     in dispute and that contains, as applicable, a final Statement of Execution
     Date MP Capital Account  according to the dispute(s)  noticed.  Such report
     shall state the Execution Date MP Capital  Account and be final and binding
     upon MP and GRE.  The  Accounting  Arbitrator  may  choose to  circulate  a
     preliminary report(s) for the comment of the parties. The fees and expenses
     of the Accounting  Arbitrator incurred in connection with the determination
     of the disputed items by the Accounting  Arbitrator  shall be borne equally
     by MP and GRE.  MP and GRE  shall,  and GRE shall  cause SRE to,  cooperate
     fully with the  Accounting  Arbitrator and respond on a timely basis to all
     requests for  information  or access to documents or personnel  made by the
     Accounting  Arbitrator  or by MP, all with the intent to fairly and in good
     faith resolve all disputes  relating to the Statement of Execution  Date MP
Capital Account as promptly as reasonably practicable.                

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CONFIDENTIAL TREATMENT

 ARTICLE 4

 EMPLOYEES

4.01   [   *   ]                                                      

4.02   [   *   ]                                                      

4.03   [   *   ]                                                      

4.04   [   *   ]                                                      

*  TEXT HAS BEEN OMITTED  PURSUANT TO A REQUEST FOR  CONFIDENTIAL TREATMENT  AND
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.    

 ARTICLE 5

 OPERATION OF SRE PRIOR TO CLOSING

     For the period from November 1, 2003 through the dates indicated below, the
parties agree to operate SRE as set forth in this Article 5.                    

     5.01   MP CREDIT SUPPORT OF SRE. MP credit support of SRE  cannot  be  used
for (i) Trading Operations  transactions initiated after October 31, 2003, where
delivery  occurs  after  the  Execution  Date,  nor  (ii)  for  Core  Operations
transactions  initiated  after the Execution  Date. MP will continue to maintain
existing credit support and provide new credit support,  on the same basis as MP
has  provided  credit  support  in the past,  until the  Execution  Date  unless
otherwise  agreed by the parties and SRE.  As set forth on SCHEDULE  5.01,  MP's
credit  support  consists of  guarantees  to Third  Parties and support of SRE's
existing Co-Bank Credit  Facility.  MP's credit exposure  continues  through the
cash settlement of all transactions for which it has provided credit support. MP
and GRE have  taken  all  steps  necessary  to assure  that the  Co-Bank  Credit
Facility  will remain in place until June 30, 2004,  although the guaranty of MP
has been released.                                                              

     5.02 RISK  MANAGEMENT. Until  the  Execution  Date, SRE  will  conduct  its
Business  within the risk  limits  established  by the SRE board  resolution  of
November 12, 2003,  which  includes a $2.5 million for stress limit,  and within
the $5.0 million stop-loss limit, and any                                       

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additional  policies as described in the SRE board minutes  dated  September 24,
2003, each as set forth in SCHEDULE 5.02.                                       

     5.03   GENERATION AVAILABILITY CREDIT ("GAC") AND  COMBUSTION  TURBINE  USE
("CTU").  GAC shall be settled  with no payment to either  party for all periods
ending  October  31,  2003.  SRE  shall  not use or apply  the GAC from the time
November 1, 2003 through  Closing.  The  methodology  developed to determine CTU
during the month of October,  2003, as shown in SCHEDULE 5.03, will also be used
to determine CTU for the Interim  Period.  GRE shall continue to promptly notify
MP of the CTU  amount on the first day of the next  month and MP shall  promptly
pay the CTU amount.                                                             

ARTICLE 6 

 CONCURRENT EXECUTION DATE AND CLOSING DATE AGREEMENTS AND
COOPERATION 

     6.01   EXECUTION DATE AND CLOSING DATE AGREEMENTS. On the Execution Date MP
and GRE shall enter into the Core Consulting Services Agreement substantially in
the form of EXHIBIT D hereto, whereby GRE shall provide transitional  consulting
services to MP. Promptly  following the Closing,  MP shall,  and GRE shall cause
SRE to, enter into the Support Services  Agreement  substantially in the form of
EXHIBIT E hereto,  whereby MP shall provide transitional  services to SRE, which
shall terminate the existing  administrative  services  agreement between MP and
SRE, the invoiced  costs of which shall not exceed  $25,000 per month  beginning
February 1, 2004.                                                               

     6.02   COOPERATION ON CERTAIN OPERATIONAL MATTERS. The parties have reached
an  understanding  and  agreement  with  respect  to the  matters  set  forth in
SCHEDULES 6.02 (a)-(e), as described below, as set forth in each such schedule. 

SCHEDULE 6.02(a)  Operational Matters: for International Falls,       
           GENSYS and SMMPA, and Least Cost Supply
SCHEDULE 6.02(b)  Joint Reporting                                     
SCHEDULE 6.02(c)  Mutual Generator Outage Protection                  
SCHEDULE 6.02(d)  Kendall Brokering Agreement                         
SCHEDULE 6.02(e)  Ancillary Agreements                                
SCHEDULE 6.02(f)  MP-GRE Capacity Reservation and Option              
Agreements                  

     6.03   TRANSMISSION MATTERS. MP and GRE agree that the current transmission
positions  and  requests  now  held by SRE  will be (i)  retained  by SRE,  (ii)
immediately  assigned to MP, (iii) immediately  assigned to RREC, or (iv) remain
conditionally with SRE with some future predetermined disposition, as listed and
described in SCHEDULE  6.03.  The  contracts to  effectuate  these  transmission
assignments  are attached in EXHIBIT F and GRE shall cause SRE to execute  these
contracts on the Execution  Date and promptly file with MISO and any  regulatory
agencies, as may be required. In the event that the FERC Order is not issued, MP
shall cause the transmission assignments to be reassigned to SRE.               

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     6.04   TRANSFER OF DATA. MP and GRE shall, promptly following the Execution
Date,  effectuate the transfer to SRE of all copies of data used in the Business
that is in MP's control  including,  but not limited to, data  contained in MP's
data  warehouse or MP shall retain such data  pending  future  transfer at SRE's
request,  subject  to the data  retention  policy  set forth in  SCHEDULE  6.04.
Pending such transfer of data, the parties shall  mutually  cooperate to provide
SRE with the same access to the data it had in the  ordinary  course of business
prior to Closing.                                                               

     6.05   FERC FILING AND APPROVAL ORDER.  Promptly  following  the  Execution
Date, MP shall prepare and submit a statutory filing to FERC (the "FERC FILING")
which seeks authority from FERC to relinquish MP's Membership Interest to GRE in
accordance  with  Section  203  of the  Federal  Power  Act,  16  U.S.C.  824(b)
(alternatively, the "MEMBERSHIP INTEREST TRANSFER ORDER" or the "FERC ORDER").  

     In the event that either MP or GRE become aware that the Membership Initial
Transfer  Order may be, or is, the subject of an  objection  and  therefore  may
result in a petition for rehearing,  the parties shall determine  whether or not
to proceed with or delay the Closing pending  resolution of the objection and/or
rehearing,  as the case may be. GRE agrees to support  such  filings at FERC and
further agrees to cooperate with MP in providing any  information  regarding SRE
and GRE in such proceedings.                                                    

     6.06   MP EXCLUSIVE PURCHASES AND SALES. From and after the Execution Date,
MP and GRE agree that (i) MP shall  assume all  obligations  and  liability  for
least cost  supply to serve its own native  load  customers,  including  but not
limited  to,  purchase of  capacity  and energy  from Third  Parties and sale of
excess MP  generation  resources not needed to serve the native load of MP, (ii)
SRE shall have no obligation or liability  for Core  Operations  with respect to
MP, (iii) MP waives its rights under the Member  Control  Agreement  for any and
all  allocations  of gains or losses of SRE arising from Core  Operations of SRE
and MP shall have no further  liability for any expenses of SRE Core Operations,
and (iv) each shall  immediately  cause SRE to designate  all MP  purchases  and
sales of capacity and energy as "Exclusive Purchase and Sales" as defined in the
SRE Rate Schedule No. 4 effective September 12, 2001 on file at FERC.           

     Nothing in this section  shall alter  any pre-existing MP obligation to SRE
to fulfill any  pre-existing  SRE  obligations  to Third Parties for capacity or
energy,  including  but not  limited  to, the GENSYS and SMMPA  transactions  as
indicated in SCHEDULE 6.02(a).                                                  

ARTICLE 7 

 INDEMNIFICATION

     7.01   INDEMNIFICATION BY MP OF GRE. MP  hereby  covenants  and  agrees  to
defend,  indemnify and hold harmless GRE and SRE, and their respective  members,
officers,  directors,  employees,  affiliates,  agents,  successors  and assigns
(collectively,  the "ASSOCIATED  INDEMNIFIED PARTIES"),  from and against and in
respect of any and all losses,  costs, expenses (including reasonable attorneys'
fees and  disbursements of counsel),  liabilities,  damages,  fines,  penalties,
charges,  assessments,  judgments,  settlements,  claims,  causes of action, and
other  obligations  of any nature  whatsoever  (excluding,  however,  claims for
incidental, consequential, or special damages, including punitive damages, other
than  which  arise  from a Third  Party  claim  against                         

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the indemnified  party  hereunder)  (individually,  a "LOSS," and  collectively,
"LOSSES")  that GRE,  SRE or their  Associated  Indemnified  Parties may suffer,
sustain,  incur or be subject to arising out of, based upon or resulting from or
on account of any of the following:                                             

            (a)   the breach or falsity of any  representation or warranty  made
     by MP in this Agreement,  the Interim Agreement or the Ancillary Documents;
and                                                                   

            (b)   the breach of any  covenant or  agreement  made by MP in  this
     Agreement,  the Interim Agreement and/or the Ancillary  Documents (although
     the  pre-Closing  covenants  to obtain all  Consents  shall expire upon the
Closing); and                                                         

            (c)   one-half (1/2) of expenses of  SRE (net of any Tax  benefit by
     way of deduction or deferral and  insurance  recoveries),  which arise from
     any period prior to the Execution Date,  which are (i) not accounted for in
     the  computation  of the  Execution  Date MP  Capital  Account  as  finally
     determined,  and  (ii)  not  excluded  in a  category  of  expenses  in the
     reconciliation  of the MP Capital  Account  pursuant to the  provisions  of
Section 3.01(c) of this Agreement; and                                

            (d)   one-half (1/2) of any Losses (excluding severance pay or other
     such termination  costs made to a  non-Management  Employee of SRE) arising
     out of any claim(s)  arising from,  in  connection  with or incident to the
     termination   of  the   employment  of  any  SRE  employee  to  the  extent
     attributable to downsizing or  restructuring of SRE as a consequence of the
     withdrawal of MP from SRE where such  termination  occurs during the period
from and after the Execution Date through October 31, 2004; and       

            (e)   the reasonable attorneys fees and expenses incurred by GRE and
     SRE from and after  January 23, 2004  through the Closing  Date or the date
     this Agreement is terminated,  whichever date occurs earlier,  arising from
     and in  connection  with the  requirement  of the FERC Filing  described in
     Section 6.05 hereof (the "GRE ATTORNEY  FEES").  All such GRE Attorney Fees
shall be paid by MP within fifteen (15) days of presentment by GRE.   

     7.02   INDEMNIFICATION BY GRE OF MP. GRE  hereby  covenants and  agrees  to
defend,  indemnify and hold harmless MP, and its Associated Indemnified Parties,
from and against any Loss and all Losses that MP or its  Associated  Indemnified
Parties may suffer,  sustain, incur, or be subject to arising out of, based upon
or resulting from or on account of any of the following:                        

            (a)   the breach or falsity of any  representation or warranty  made
     by GRE in this Agreement,  the Interim Agreement or any Ancillary Document;
and                                                                   

            (b)   the breach of any covenant or agreement made by GRE, or by GRE
     on behalf of SRE,  in this  Agreement,  the Interim  Agreement,  and/or any
Ancillary Document; and                                               

            (c)   any SRE Losses, as defined in  the  Interim  Agreement,  which
     arise from, in connection  with or incident to (i) SRE Trading  Operations,
     including market or credit exposure,  (ii) MP credit support of the Trading
Operations, including (x) any MP                                      

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     guaranty providing credit support to SRE's Trading  Operations,  or (y) any
     letters  of credit  issued  to  provide  credit  support  to SRE's  Trading
     Operations  under the CoBank  Credit  Facility,  and (iii) cash  collateral
     posted by SRE to support Trading  Operations,  including but not limited to
     Five Million  Dollars  ($5,000,000)  posted by SRE in deposit with American
     Electric  Power on or about December 23, 2003, and any such cash posted for
     deposit  by SRE  will not  impact  the  distribution  of cash to MP or MP's
Capital Account; and                                                  

            (d)   any claim(s) arising from, in connection with or  incident  to
     any lease of premises to which SRE is a party or MP's guaranty thereof; and

            (e)   any claim(s) arising from, in connection  with or incident  to
     the  operations  or contracts of SRE or GRE (with respect to SRE) after the
     Execution  Date,  except  (i) for  Power  Trading  Transactions  that  were
     initiated  prior to November 1, 2003, but which are not settled until after
     the  Execution  Date,  and  (ii)  to  the  extent  of  the  indemnification
obligation of MP described in Section 7.01(d) of this Agreement.      

7.03   PRINCIPLES REGULATING INDEMNITY RIGHTS.                        

            (a)   Without limiting the generality of the foregoing, with respect
     to any measurement of damages or costs or expenses owing hereunder,  either
     party shall have the right to be put in the same  financial  position as it
     would  have been had the  matter  leading  to the claim of  indemnification
     never  occurred or arose.  Each party shall be reimbursed by the other on a
     monthly basis for all liabilities  and damages  incurred and all reasonable
costs and reasonable expenses incurred in enforcing this indemnity.   

            (b)   Notwithstanding any other provision herein, either party shall
     be entitled to seek  equitable  relief with respect to any  indemnification
     claim which arises from a covenant hereof.  Each party shall use reasonable
     efforts to provide prompt notice to the other of each  indemnifiable  claim
     it believes it has suffered;  PROVIDED,  HOWEVER, no delay in providing any
     such notice shall affect its right to recover  damages or equitable  relief
     as appropriate  under this Agreement.  The foregoing  covenant shall be for
     the benefit of the parties hereto and shall not be deemed to give any Third
Party rights under this Agreement.                                    

            (c)   The parties understand and  agree that GRE shall  prevent  SRE
     from asserting any claim of any kind against MP and its affiliates  arising
     from, in connection with or incident to any action or omission of MP or its
     affiliates prior to the Closing Date, as a consequence of the occurrence of
the Closing.                                                          

7.04   PROCEDURE FOR INDEMNIFICATION.                                 

            (a)   MP DIRECT INDEMNIFICATION OF GRE. In the event that GRE and/or
     any of its Associated Indemnified Parties (individually, a "GRE INDEMNIFIED
     PARTY" and  collectively,  the "GRE INDEMNIFIED  PARTIES")  intends to seek
     indemnification under this Agreement pursuant to the provisions of Sections
     7.01 of this  Agreement,  the GRE  Indemnified  Party shall  promptly  give
     notice  hereunder  to MP,  specifying  in such  notice,  to the extent such
     specific information is available, (i) the specific  nature of the  Loss or

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     Losses to be indemnified, (ii) the amount and, as applicable, a computation
     of the amount,  of such Loss or Losses,  (iii) any and all evidence of such
     Loss or Losses, including all documents, instruments, notices and financial
     data,  in  whatever  form or  media,  sufficient  for MP to  ascertain  the
     propriety and amount of the  indemnification  claim,  and (iv) any relevant
     dates relating to the assertion,  accrual and payment of the Loss or Losses
     (collectively,  the "REQUIRED NOTICE INFORMATION").  MP shall have ten (10)
     days to consider such claim and, within such period shall either (x) object
     by written notice to the GRE Indemnified Party to the claim, in whole or in
     part, or (y) remit the undisputed  amount  requested by the GRE Indemnified
     Party.  In the  event  that the claim is  objected  to by MP in whole or in
     part,  the parties  shall  attempt to resolve  the dispute  within ten (10)
     business  days of the receipt of the MP  objection  by the GRE  Indemnified
     Party.  In the event the parties are unable to resolve the  disputed  claim
     within  such  period,   the  matter  shall  be  resolved  pursuant  to  the
arbitration procedure set forth in Section 7.04(e) hereof.            

            (b)   GRE DIRECT INDEMNIFICATION OF MP. In  the event that MP and/or
     any of its Associated Indemnified Parties (individually, an "MP INDEMNIFIED
     PARTY" and  collectively,  the "MP  INDEMNIFIED  PARTIES")  intends to seek
     indemnification  under this Agreement pursuant to the provisions of Section
     7.02 of this Agreement, the MP Indemnified Party shall promptly give notice
     hereunder  to  GRE,   specifying   in  such  notice  the  Required   Notice
     Information,  to the extent such specific  information  is  available.  GRE
     shall have ten (10) days to consider  such claim and,  within such  period,
     shall either (x) object by written  notice to the MP  Indemnified  Party to
     the  claim,  in  whole or in  part,  or (y)  remit  the  undisputed  amount
     requested  by the MP  Indemnified  Party.  In the  event  that the claim is
     objected  to by GRE in whole or in  part,  the  parties  shall  attempt  to
     resolve the dispute within ten (10) business days of the receipt of the GRE
     objection by the MP Indemnified  Party. In the event the parties are unable
     to resolve the  disputed  claim  within such  period,  the matter  shall be
     resolved pursuant to the arbitration procedure set forth in Section 7.04(e)
hereof.                                                               

            (c)   PROCEDURE FOR  INDEMNIFICATION  OF THIRD PARTY CLAIMS.  In the
     event any of the GRE  Indemnified  Parties  or the MP  Indemnified  Parties
     intend to seek indemnification  pursuant to the provisions of Sections 7.01
     or 7.02 hereof as a result of the claim of a Third Party (the  "INDEMNIFIED
     PARTY"),  the Indemnified Party shall promptly give notice hereunder to the
     other party (the  "INDEMNIFYING  PARTY") after obtaining  written notice of
     any service of a summons or notice of a Proceeding in any action instituted
     against the  Indemnified  Party as to which recovery or other action may be
     sought  against  the  Indemnified  Party  because  of  the  indemnification
     provided for in Sections  7.01 or 7.02 hereof,  and the  Indemnified  Party
     shall  permit  the  Indemnifying  Party to assume  the  defense of any such
     Proceeding;  PROVIDED,  HOWEVER,  that the  Indemnified  Party shall not be
     required to permit  such an  assumption  of the  defense of any  Proceeding
     which,  if not first paid,  discharged or otherwise  complied  with,  would
     result in a material  interruption  or  disruption  of the  business of the
     Indemnified  Party,  or any  material  part  thereof.  Notwithstanding  the
     foregoing, the right to indemnification  hereunder shall not be affected by
     any  failure of the  Indemnified  Party to give such notice (or by delay by
     the Indemnified  Party in giving such notice) unless,  and then only to the

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     extent that, the rights and remedies of the  Indemnifying  Party shall have
     been  prejudiced  as a result of the  failure to give,  or delay in giving,
such notice.                                                          

            If the Indemnifying Party  assumes  the  defense of such  Proceeding
     referenced  in the  Indemnified  Party's  notice,  the  obligations  of the
     Indemnifying Party hereunder as to such Proceeding shall include taking all
     steps necessary in the defense or settlement of such Proceeding and holding
     the Indemnified  Party harmless from and against any and all Losses arising
     from,  in  connection  with or incident to any  settlement  approved by the
     Indemnifying  Party  or  any  judgment  entered  in  connection  with  such
     Proceeding,  except where,  and only to the extent that,  the  Indemnifying
     Party has been  prejudiced  by the actions or omissions of the  Indemnified
     Party.  Notwithstanding the foregoing, the assumption of the defense of any
     Proceeding by the  Indemnifying  Party shall not constitute an admission of
     responsibility  to  indemnify  or in any  manner  impair  or  restrict  the
     Indemnifying  Party's  rights to later seek to be reimbursed  its costs and
     expenses  if  indemnification  under this  Agreement  with  respect to such
     Proceeding  was not  required.  The  Indemnifying  Party  shall not, in the
     defense of such Proceeding,  consent to entry of any judgment (other than a
     judgment of dismissal on the merits  without costs) except with the written
     consent of the  Indemnified  Party (which consent shall not be unreasonably
     withheld, delayed or conditioned) or enter into any settlement (except with
     the written  consent of the Indemnified  Party,  which consent shall not be
     unreasonably  withheld,  delayed  or  conditioned)  unless  (i) there is no
     finding or admission of any  violation  of  applicable  law and no material
     effect on any claims that could  reasonably  be expected to be made against
     the Indemnified  Party,  (ii) the sole relief provided is monetary damages,
     and (iii) the  settlement  shall  include the giving by the claimant or the
     plaintiff to the Indemnified  Party a release from all liability in respect
to such claim or litigation.                                          

            If the Indemnifying Party assumes  the  defense of  such  Proceeding
     referenced in the Indemnified  Party's notice,  the Indemnified Party shall
     be entitled to  participate  in the defense of the claim.  The  Indemnified
     Party shall bear the fees and expenses of any additional  counsel  retained
     by it to  participate  in its  defense  unless any of the  following  shall
     apply:  (i) the  employment of such counsel  shall have been  authorized in
     writing by the Indemnifying  Party, or (ii) the Indemnifying  Party's legal
     counsel shall advise the Indemnifying Party in writing,  with a copy to the
     Indemnified  Party, that there is a conflict of interest that would make it
     inappropriate  under applicable  standards of professional  conduct to have
     common counsel. If clause (i) or (ii) in the immediately preceding sentence
     is applicable,  then the Indemnified  Party may employ separate  counsel at
     the expense of the Indemnifying  Party to represent the Indemnified  Party,
     but in no event shall the Indemnifying  Party be obligated to pay the costs
     and expenses of more than one such separate  counsel for any one complaint,
claim, action or Proceeding in any one jurisdiction.                  

            If the Indemnifying Party does not assume the  defense of  any  such
     Proceeding  by a Third Party after  receipt of notice from the  Indemnified
     Party,  the  Indemnified  Party may defend against such  Proceeding in such
     manner as it reasonably deems  appropriate.  The Indemnified  Party may not
     settle  such  claim  or  litigation  without  the  written  consent  of the
Indemnifying Party, which consent shall not be unreasonably withheld. 

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            Each party shall cooperate in good faith  and in all  respects  with
     each  Indemnifying  Party  and  its   representatives   (including  without
     limitation  its  counsel) in the  investigation,  negotiation,  settlement,
     trial and/or defense of any Proceedings (and any appeal arising therefrom).
     The parties shall  cooperate  with each other in any  notifications  to and
     information requests of any insurers.  No individual  representative of any
     party, or their respective  affiliates,  shall be personally liable for any
     Loss or Losses under this Agreement,  except as  specifically  agreed to by
said individual representative.                                       

            (d)   REMEDIES.  The  respective  indemnification obligations of the
     parties set forth in Article 7 of this Agreement are the exclusive remedies
     of the parties and their successors, assigns or others seeking to claim by,
     through, or on behalf of a party, under this Agreement, and no other remedy
     or  remedies,  whether  arising  under any  applicable  law,  common law or
     otherwise,  may be used,  asserted or prosecuted  in  connection  with this
     Agreement and any  transaction,  occurrence,  or omission  arising from, in
     connection with or otherwise based upon this Agreement;  provided, however,
     that all equitable  remedies shall remain  available other than rescission,
     which shall not be an  available  remedy of either party  hereto,  or their
     respective  successors  and assigns,  under or pursuant to this  Agreement.
     This Section  7.04(d) shall not be applicable in the specific  instances in
which a party hereto has committed fraud.                             

     7.05   DISPUTE RESOLUTION.  In  the  event  a  dispute  arises  under  this
Agreement,  except with respect to Article 3 or equitable remedies pursued under
this Agreement,  such disputes shall be resolved in the manner set forth in this
Section 7.05.                                                                   

            (a)   If a  dispute  arises  under  this  Agreement,  including  any
     question regarding the existence,  validity,  interpretation or termination
     hereof,  which is not described as an exception in this Section  7.05,  GRE
     and MP may  invoke  the  dispute  resolution  procedure  set  forth in this
     Section 7.05 by giving written  notice to the other party.  If either party
     gives such a notice,  the parties shall enter into  discussions  concerning
     this dispute. If the dispute is not resolved as a result of such discussion
     in ten (10) days, an attempt will be made to resolve the matter by a formal
     nonbinding  mediation with an independent neutral mediator agreed to by the
     parties.  If the parties cannot agree on a mediator  within a period of ten
     (10) days after  expiration  of the ten (10) day period for  resolution  by
     discussion,  then  either  party  may  apply  to  any  court  of  competent
     jurisdiction  for  appointment of a mediator,  which  appointment  shall be
     binding and nonappealable.  Upon commencement of the mediation process, the
     parties shall promptly communicate with respect to a procedure and schedule
     for the conduct of the  Proceeding  and for the exchange of  documents  and
     other  information  related to the dispute.  The mediation process shall be
     deemed ended if the dispute has not been  resolved  within thirty (30) days
after appointment of the mediator.                                    

            (b)   All claims, disputes or other matters in question  between the
     parties to this  Agreement  arising out of or  relating  to this  Agreement
     which are not  resolved by  mediation in  accordance  with Section  7.05(a)
     within thirty (30) days after  appointment  of mediator  shall be submitted
     for,  subject  to  and  decided  by  arbitration  in  accordance  with  the
     Commercial  Arbitration  Rules  of  the  American  Arbitration  Association
     currently in effect as of the date of this Agreement ("AAA RULES"),  except
to the extent  those rules                                            

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     are  inconsistent  with this Section 7.05. Any arbitration  must be held in
     Minnesota by a single  arbitrator  mutually  selected by the parties hereto
     or,  if the  parties  hereto  cannot  agree  on  the  appointment  of  such
     arbitrator within ten (10) days following the date notice of the dispute is
     given by a party to the adverse party, an arbitrator  selected according to
     the AAA  Rules.  The  arbitrator's  award  shall be final,  conclusive  and
     binding  upon all parties to this  Agreement,  and  judgment may be entered
     upon  it in  accordance  with  the  Federal  Arbitration  Act in any  court
     described in Section  7.05(c).  The arbitrator shall be required to provide
     in  writing  to the  parties  the  basis  for the  award  or  Order of such
     arbitrator,  and  a  court  reporter  shall  record  all  hearings  (unless
     otherwise  agreed to by the  parties),  with such record  constituting  the
     official  transcript of such  Proceedings.  MP and GRE specifically  desire
     this  Arbitration  clause  to be  governed  by the  United  States  Federal
Arbitration Act, and not by the arbitration laws of any state.        

            (c)   MP and GRE agree and consent that any legal  action,  suit  or
     Proceeding  seeking to enforce  this  Section 7.05 or to confirm or contest
     any  arbitration  award  shall be  instituted  and  adjudicated  solely and
     exclusively in any court of general  jurisdiction  in Minnesota,  or in the
     United States  District Court having  jurisdiction  in Minnesota and MP and
     GRE agree that venue will be proper in such courts and waive any  objection
     which they may have now or hereafter to the venue of any such suit,  action
     or  Proceeding  in such courts,  and  irrevocably  consent and agree to the
     jurisdiction of said courts in any such suit, action or Proceeding.  MP and
     GRE further agree to accept and acknowledge  service of any and all process
     which may be served in any such suit,  action or Proceeding in said courts,
     and also agree that  service of process or notice upon them shall be deemed
     in every respect  effective  service of process or notice upon them, in any
     suit, action or Proceeding,  if given or made: (i) by a Person over the age
     of eighteen who  personally  serves such notice or service of process on MP
     or GRE,  as the case may be,  or (ii) by  certified  mail,  return  receipt
     requested,  mailed to MP or GRE,  as the case may be,  at their  respective
addresses set forth in this Agreement.                                

            (d)   In the event of arbitration filed or  instituted  between  the
     parties  pursuant  to this  Section  7.05,  the  prevailing  party  will be
     entitled to receive from the adverse party all costs, damages and expenses,
     including  reasonable  attorney's fees, incurred by the prevailing party in
     connection  with that action or Proceeding,  whether or not the controversy
     is reduced to judgment or award.  The  prevailing  party will be that party
     who is determined by the arbitrator to have prevailed on the major disputed
issues.                                                               

ARTICLE 8 

 ADDITIONAL AGREEMENTS WITH RESPECT TO OPERATION OF SRE PRIOR TO
CLOSING 

     8.01   ACTIONS REFRAINED FROM PRIOR TO CLOSING. Between the Effective  Date
and the Closing  Date,  GRE and MP shall  cause SRE not do any of the  following
without prior written authorization from MP and GRE:                            

            (a)   merge or consolidate with or into any  other  entity or  enter
into any agreements relating thereto; or                              

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            (b)   authorize or make any distribution of capital or  property  to
     any Member of SRE other than as  contemplated  by this  Agreement and, with
 respect to the Retained MP Capital Account, pursuant to the FERC Order.

     8.02   AFFIRMATIVE ACTIONS PRIOR TO CLOSING. Between the Effective Date and
the Closing Date, except as otherwise consented to in writing by MP and GRE, GRE
and MP shall cause SRE to:                                                      

            (a)   continue to make available to MP  and  GRE  and  its  counsel,
     accountants  and other  representatives  for  examination  all business and
     financial  books  and  records  of SRE,  as well as all  other  information
reasonably considered relevant to the Business and affairs of SRE;    

            (b)   operate the Business in accordance with the MPUC  Order  dated
     June 1,  2000,  and  consistent  with  that  operation  SRE  shall  use all
     commercially  reasonable  efforts to preserve intact SRE's present business
     organization  and  goodwill  of  customers,  suppliers  and  others  having
     business  relations  with SRE,  and  maintain  SRE's  membership  and joint
reporting in MAPP.                                                    

            (c)   maintain   SRE's   books   of   account,   records  and  files
     substantially  in the same manner as they are maintained as of the date of,
     but giving effect to the  provisions  of, this Agreement and make no change
in accounting principles utilized presently;                          

            (d)   maintain  and  enforce  existing  policies  of   insurance  or
     substitute policies providing  reasonably  comparable insurance coverage in
     amounts not less than those in effect on the date of this  Agreement and in
     any event in amounts of coverage  which are at least  typical for companies
of SRE's size and in SRE's industry; and                              

            (e)   take all required corporate action  to effectuate and  perform
     the  transactions  contemplated  by this  Agreement  and  use  commercially
     reasonable  efforts to satisfy the  conditions to the  obligations to close
     the  transactions  contemplated  herein,  to the extent such conditions are
within the reasonable control of SRE.                                 

ARTICLE 9 

REPRESENTATIONS AND WARRANTIES OF MP

MP represents and warrants to GRE that:                               

     9.01   CORPORATE  STANDING  AND  AUTHORITY;  BINDING  AGREEMENT.  MP  is  a
division of ALLETE, Inc., a corporation duly organized,  validly existing and in
good standing  under the laws of the State of Minnesota  and has full  corporate
power to own all of its  properties and assets and to conduct its business as it
is now being conducted.  The execution of this Agreement and consummation of the
transactions  contemplated  herein  shall  not  violate  any  provision  of MP's
Articles of Incorporation or Bylaws, and MP has obtained all necessary corporate
authorization for the execution,  delivery and performance of this Agreement and
the consummation of the transactions  contemplated  hereby.  This Agreement is a
legal, valid and binding agreement of MP,  enforceable  against MP in accordance
with its terms, subject to the laws of bankruptcy,                              

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insolvency and  moratorium and  other  laws  or equitable  principles  generally
affecting creditors' rights.                                                    

     9.02   ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED  CONSENTS.  Except (x)
for submitting the FERC Filing  described in Section 6.05 and obtaining the FERC
Order,  and (y) as set forth in  SCHEDULE  9.02,  the  execution,  delivery  and
performance  of  this  Agreement  by  MP,  including,  without  limitation,  the
assignment  of its  Membership  Interests  to GRE,  does not and will  not:  (i)
conflict with or violate any law, rule,  regulation,  Order,  judgment or decree
applicable  to MP or by which any of MP's  assets  are bound or  affected,  (ii)
result in any breach of or  constitute  a default  under any  contract  or other
agreement or note, bond, mortgage, indenture, lease, license, franchise or other
instrument or obligation to which MP is a party or by which any of the MP assets
are bound or affected, or (iii) require any consent, approval,  authorization or
permit of any governmental or regulatory authority,  domestic or foreign, or any
person or entity not a party to this Agreement ("CONSENTS").                    

     9.03   TITLE. As  of  the  Execution  Date  (i)  MP  shall  have  good  and
marketable title to the Assets that are Tangible  Assets,  such title to be free
and  clear of all  liens,  claims,  security  interests,  mortgages,  easements,
restrictions,  charges and encumbrances  (other than those in favor of GRE under
the Member  Control  Agreement),  and (ii) with  respect to the Assets  that are
leased or licensed,  MP shall have a valid license or leasehold interest.  As of
the Closing, MP shall have good and marketable title to its Membership Interest.

     9.04   RELINQUISHED ASSETS. MP has title to or a valid leasehold or license
interest to the Assets.  The Assets  relinquished  and  transferred by MP are in
operating condition and are as is, where is, as used at and by SRE in the normal
course of  business.  The Assets are all of the Assets used  exclusively  in the
Business,  but shall not include assets used in the Business which are also used
in the operation of the business of MP (by way of example, the Oracle accounting
system software).                                                               

     9.05   LITIGATION. There is no litigation pending or, to the best knowledge
of MP after due inquiry of its  officers,  threatened  against MP which seeks to
prevent,  or if successful  would  prevent,  MP from  consummating  the purchase
contemplated by this Agreement.                                                 

     9.06   NOTICE  OF  DEVELOPMENT.  MP  shall  notify  GRE  of  any  event  or
occurrence  that has as its basis an event or  occurrence  that arose  after the
date  hereof  which  would  cause  a  breach  at  the  Closing  of  any  of  the
representations and warranties set forth in Sections 9.01, 9.02 and 9.05.       

ARTICLE 10

 REPRESENTATIONS AND WARRANTIES OF GRE

GRE represents and warrants to MP that:                               

     10.01  Organization and  Authority. GRE is a  cooperative  duly  organized,
validly  existing and in good standing under the laws of the State of Minnesota,
and has full power and authority to carry on its current business operations and
consummate the transactions                                                     

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contemplated by this Agreement. The execution of this Agreement and consummation
of the transactions contemplated herein shall not violate any provision of GRE's
governing  documents or any law, regulation or ordinance or any provision of any
contract,  instrument,  Order, award, judgment or decree to which GRE is a party
or by which GRE is bound. This Agreement is a legal, valid and binding agreement
of GRE enforceable against GRE in accordance with its terms, subject to the laws
of bankruptcy,  insolvency and moratorium and other laws or equitable principles
generally   affecting   creditors'   rights.  GRE  has  obtained  all  necessary
cooperative   authorization  and  approval  for  the  execution,   delivery  and
performance  of  this  Agreement  and  the   consummation  of  the  transactions
contemplated hereby. No consent, authorization, Order or approval of any person,
governmental authority or any court is required in connection with the execution
and  delivery  by GRE  of  this  Agreement  or  the  consummation  by GRE of the
transactions contemplated hereby.                                               

     10.02  LITIGATION. There is no litigation pending or, to the best knowledge
of GRE after due inquiry of its officers,  threatened against GRE which seeks to
prevent,  or if successful  would prevent,  GRE from  consummating  the purchase
contemplated by this Agreement.                                                 

     10.03  NOTICE  OF  DEVELOPMENT.  GRE  shall  notify  MP  of  any  event  or
occurrence  that has as its basis an event or  occurrence  that arose  after the
date  hereof  which  would  cause  a  breach  at  the  Closing  of  any  of  the
representations and warranties set forth in Sections 10.01 and 10.02.           

ARTICLE 11

 CLOSING

     11.01  TIME AND PLACE. Upon receipt of  the  Membership  Interest  Transfer
Order which is not  subject to an  objection  that may result in a rehearing  by
FERC (such that the parties have agreed to delay the Closing pursuant to Section
6.05 hereof), MP and GRE shall schedule the Closing,  which shall take place not
later than five (5) business  days after receipt of the FERC Order (the "CLOSING
DATE"). The closing hereunder (the "CLOSING") shall take place at the offices of
Leonard, Street and Deinard,  Professional Association,  150 South Fifth Street,
Suite 2300,  Minneapolis,  Minnesota,  55402, or at such other time and place as
may be agreed to by the parties.  The Closing shall be deemed to be effective at
11:59  P.M.  (CST) on the  Closing  Date,  which  shall  also be the  Withdrawal
Effective Time.                                                                 

     11.02  CONDITIONS TO MP'S OBLIGATIONS  TO  CLOSE. The  obligation of MP  to
Close  shall be  subject  to  satisfaction  of the  following  deliverables  and
conditions precedent on or prior to the Closing Date:                           

(a)   PAYMENTS AND DELIVERY OF DOCUMENTS:               
----------------------------------          

                  (i)   RECEIPT OF MEMBERSHIP INTEREST PAYMENT. MP shall receive
the Membership Interest Payment from GRE at the Closing.

                  (ii)  RECEIPT OF THE RETAINED MP  CAPITAL  ACCOUNT.  MP  shall
            receive payment from SRE at the Closing of the  Retained MP  Capital
Account and the Capital Vig.                            

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                  (iii) GRE  OFFICER'S   CERTIFICATE.   MP   shall   receive   a
            certificate  from an officer of GRE, in form and content  reasonably
            satisfactory  to  MP,  certifying  (i) to the  incumbency  of  GRE's
            authorized  officers executing this Agreement and related documents,
            (ii) to the good  standing  of GRE in the state of its  organization
            and  attaching  a good  standing  certificate  for GRE issued by the
            Secretary of State of such state, (iii) that all necessary corporate
            authorizations  and  approvals  have  been  obtained  by GRE for the
            execution,  delivery  and  performance  of  this  Agreement  and the
            consummation of the transactions  contemplated  hereunder,  and (iv)
            that the execution of this Agreement by GRE and the  consummation of
            the  transactions   contemplated  hereunder  will  not  violate  the
            provisions  of the  Articles  of  Incorporation  of GRE or any other
            agreement  to  which  GRE is a party  or by  which  it is  bound.  A
            certificate  in  substantially  the same form  containing  the above
  information has been delivered to MP on the Execution Date

                  (iv)  CONSENT. The (A) FERC Order, and (B)  the  Consents  set
forth in SCHEDULE 9.02, shall all have been obtained.   

(b)   CONDITIONS PRECEDENT TO CLOSING:                  
--------------------------------            

                  (i)   REPRESENTATIONS, WARRANTIES AND COVENANTS. All covenants
            and  agreements  of GRE set forth  herein  required to be  performed
            prior  to the  Closing  shall  have  been  fully  performed  and the
            representations and warranties of GRE set forth herein shall be true
            and correct as of the Closing Date as though  those  representations
            and  warranties  have  been  made  at and as of  that  time.  At the
            Closing,  MP shall  have  received  a  certificate  signed by a duly
            authorized  officer  of GRE to the  foregoing  effect  in  form  and
content reasonably satisfactory to MP.                  

                  (ii)  NO LITIGATION. There shall not have been  instituted  or
            threatened on or before the Closing Date any action or Proceeding to
            restrict  or  prohibit  the   transactions   contemplated   by  this
Agreement.                                              

     11.03  CONDITIONS TO GRE'S OBLIGATION TO CLOSE. The  obligation of  GRE  to
close  shall be  subject  to  satisfaction  of the  following  deliverables  and
conditions precedent on or prior to the Closing Date or at and upon the Closing:

(a)   PAYMENTS AND DELIVERY OF DOCUMENTS:               
----------------------------------          

                  (i)   PAYMENT OF UNPAID ADMINISTRATIVE FEE(S) AND GRE ATTORNEY
            FEES, SEVERANCE REIMBURSEMENT.  GRE shall receive payment from MP of
            any unpaid  Administrative  Fee(s),  unpaid severance  reimbursement
            pursuant  to  Section  4.03,  unpaid  CTU  payments  and  unpaid GRE
Attorney Fees.                                          

                  (ii)  MEMBERSHIP  INTEREST  RELINQUISHMENT  AND ASSIGNMENT. MP
            shall  have duly  executed  and  delivered  to GRE,  all in form and
            substance  reasonably  satisfactory  to GRE,  a  Relinquishment  and
            Assignment of Membership Interest in substantially the form attached
hereto as EXHIBIT C.                                    

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                  (iii) CONSENTS. The FERC Order shall have  been  obtained  and
            any and all  notices or  Consents  listed or  required  to be listed
            under  SCHEDULE  11.03(a)(iii)  shall  have  been duly made by MP or
            executed and delivered by the person or entity  required to consent,
            in form and content  reasonably  satisfactory to GRE, and shall have
been delivered to GRE by MP.                            

                  (iv)  MP  OFFICER'S  CERTIFICATE.  GRE shall  have  received a
            certificate  from an officer of MP, in form and  content  reasonably
            satisfactory  to  GRE,  certifying  (i) to the  incumbency  of  MP's
            authorized  officers executing this Agreement and related documents,
            (ii) to the good  standing  of MP in the state of its  incorporation
            and  attaching  a good  standing  certificate  for MP  issued by the
            Secretary  of  State  of  such  state,   (iii)  that  all  necessary
            authorizations  and  approvals  have  been  obtained  by MP for  the
            execution,  delivery  and  performance  of  this  Agreement  and the
            consummation of the transactions  contemplated  hereunder,  and (iv)
            that the execution, delivery and performance of this Agreement by MP
            and the consummation of the transactions contemplated hereunder will
            not violate the  provisions  of MP's  Articles of  Incorporation  or
            Bylaws or any other  agreement to which MP is a party or by which it
            is bound. A certificate in  substantially  the same form  containing
            the above  information  has been  delivered to GRE on the  Execution
Date.                                                   

                  (v)   RESIGNATIONS.  GRE   shall  have  received  the  written
            resignations  of any MP  designated  members  of the  SRE  Board  of
            Governors.  MP  personnel  who were also SRE  officers  resigned  as
officers of SRE on the Execution Date.                  

(b)   CONDITIONS PRECEDENT TO CLOSING:                  
-------------------------------             

                  (i)   REPRESENTATIONS, WARRANTIES AND COVENANTS. All covenants
            and agreements of MP set forth herein required to be performed prior
            to  the   Closing   shall   have  been  fully   performed   and  the
            representations  and warranties of MP set forth herein shall be true
            and correct as of the Closing Date as though  those  representations
            and warranties had been made at and as of that time. At the Closing,
            GRE shall have  received a certificate  signed by a duly  authorized
            officer of MP to the foregoing effect in form and content reasonably
satisfactory to GRE.                                    

                  (ii)  NO LITIGATION. There shall not have been  instituted  or
            threatened  any action or  Proceeding  to restrict  or prohibit  the
transactions contemplated by this Agreement.            

     11.04  EFFORTS TO SATISFY  CONDITIONS.  Each  party  shall  use  reasonable
commercial  efforts to secure  promptly the  satisfaction  of the  conditions to
Closing, to the extent the same is within their reasonable control.             

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ARTICLE 12

 TERMINATION

     12.01  TERMINATION OF AGREEMENT.  This Agreement may be terminated  at  any
time prior to the Closing:                                                      

       (i)   by mutual written agreement of GRE and MP; or

                  (ii)  by either MP or  GRE  if,  through  no  breach  of  this
            Agreement by the terminating  party, the Closing has not occurred on
or before May 31, 2004.                                 

No termination of this Agreement shall (i) affect the transactions  which become
effective on or entered into as a  consequence  of, the  Execution  Date,  which
transactions shall be legal, binding and enforceable with respect to the parties
thereto,  or (ii)  relieve  any party  from  liability  it may have  under  this
Agreement   or  the  Interim   Agreement   from   breaches  of  its   respective
representations, warranties or covenants occurring prior to termination.        

     12.02  PROCEDURE UPON TERMINATION. In the event of termination by GRE or by
MP pursuant to Section 12.01(ii) hereof,  written notice thereof shall forthwith
be given to the other party and the transactions  contemplated by this Agreement
to be effected at the Closing shall be terminated  without further action by the
parties hereto. If such a termination takes place:                              

            (a)   The Interim Agreement and the transactions that took effect on
the Execution Date shall be unaffected;                               

            (b)   MP shall continue to be bound by the Member Control Agreement,
subject to the amendments set forth herein;                           

            (c)   No party  hereto  and  none  of  their  respective  directors,
     officers,  shareholders or controlling  persons shall have any liability or
     further  obligation  to any other party  pursuant to this  Agreement or the
     Interim  Agreement,  except as to any  breach of the  continuing  covenants
hereof; and                                                           

            (d)   The provisions of  Articles 1, 2, 3, 4, 5, 7, 12  and  14  and
     Sections 6.02, 6.03, 6.04, 6.06, 9.01, 9.03, 9.04, 10.01,  13.01, 13.02 and
     13.03 shall survive any termination of this Agreement;  PROVIDED,  HOWEVER,
     Sections  12.02(a) and (c) above shall control and constitute the exclusive
     remedy of the parties  with  respect to any Losses that may be claimed by a
party under this Agreement.                                           

ARTICLE 13

 OTHER MATTERS

     13.01  ANNOUNCEMENTS. No press releases, announcements, or other disclosure
related  to  the  specific   details  of  this  Agreement  or  the  transactions
contemplated herein shall be issued or made to the press, employees,  customers,
suppliers or any other person,  except to the extent  necessary for MP or GRE to
(i) comply with  applicable  securities  or other  regulatory  laws,  rules,    

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or regulations,  or other applicable authority, or (ii) obtain MP's release from
its credit support  obligations,  or (iii) as otherwise necessary to comply with
the  terms of this  Agreement.  GRE and MP agree to  cooperate  on any  external
communications regarding MP's withdrawal from SRE. The parties will cause SRE to
observe this provision.                                                         

     13.02  USE OF SRE NAME. As of the Closing Date  and  thereafter,  MP  shall
cease all use of the name  "Split  Rock  Energy"  and any other  similar  names,
except to the extent the name is used in connection with MP delivery of services
on behalf of SRE or GRE as directed by SRE or GRE.                              

     13.03  CONFIDENTIALITY. The parties may, for their mutual  benefit  in  the
course of negotiating and  implementing  the  transactions  contemplated by this
Agreement,  exchange  information  which  is  of  a  non-public  proprietary  or
confidential  nature to the  disclosing  party which,  by way of example but not
limitation,  may include information  related to Core Operations,  Power Trading
Transactions,  business practices,  strategies or approaches,  Capital Accounts,
Net Income and Net Losses (the  "CONFIDENTIAL  INFORMATION").  The  Confidential
Information  may  be  in  any  form  whatsoever,  including  writings,  computer
programs, logic diagrams,  drawings or other media. All information disclosed by
either  party  to the  other,  whether  orally,  in  writing  by  inspection  or
otherwise, shall be Confidential Information when it is so labeled or identified
by the party delivering the information.                                        

     The Confidential Information (i) may be used by the receiving party  solely
in connection with the transactions  described in this Agreement,  and (ii) will
be kept  confidential  and not  disclosed  by the  receiving  party to any other
person, except that Confidential  Information may be disclosed to (i) the United
States  Securities  and Exchange  Commission and any  counterpart  agency of any
state,  whether  or not such  Confidential  Information  shall be made  publicly
available as a consequence of such filing, and (ii) any of the receiving party's
affiliates, directors, officers, employees, attorneys, accountants, consultants,
advisors and agents (collectively, its "AUTHORIZED REPRESENTATIVES") who require
access to such  information  and as required to comply with Section 13.04 below.
Each of the Parties  agrees that any of its Authorized  Representatives  to whom
Confidential  Information is disclosed will be informed of the  confidential  or
proprietary  nature thereof and of the receiving party's  obligations under this
Agreement, and that each party shall be responsible for any use or disclosure of
Confidential Information by any of its Authorized Representatives.              

     Notwithstanding  anything to the  contrary set forth  herein,  Confidential
Information shall not include any information that (i) is, on the Effective Date
of this  Agreement,  available to the public  (including  in any publicly  filed
document),  or (ii) becomes  generally  known to the public after the  Effective
Date of this Agreement other than as a result of any improper act or omission of
MP or GRE or their Authorized  Representatives,  or (iii) was demonstrably known
to MP or GRE prior to the Effective  Date of this  Agreement,  or (iv) MP or GRE
lawfully  receive such  Confidential  Information from a Third Party, who is not
subject  to an  obligation  of  confidentiality  or  non-use at the time of such
transmittal.                                                                    

     If MP or GRE is requested or required (by oral questions,  interrogatories,
requests for information or documents,  subpoena,  civil investigative demand or
similar process) to disclose any of the other party's Confidential  Information,
MP or GRE will provide the other party with                                     

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prompt notice of such request,  and the documents and/or  information  requested
thereby, so that the other party may seek an appropriate protective Order and/or
waive compliance with the provisions of this Agreement.  If, in the absence of a
protective  Order  or  the  receipt  of  a  waiver  hereunder,  MP  or  GRE  are
nonetheless,  in the opinion of MP or GRE's legal counsel, compelled to disclose
Confidential  Information to any tribunal or otherwise stand liable for contempt
or suffer other  censure or penalty,  MP or GRE may  disclose to such  tribunal,
without liability hereunder,  that portion of the Confidential Information which
MP or GRE's legal  counsel  advises  that MP or GRE are  compelled  to disclose;
PROVIDED,  HOWEVER,  that MP or GRE shall give the other party written notice of
the  information  to be  disclosed  as  far in  advance  of  its  disclosure  as
reasonably practicable.                                                         

     13.04  TAX MATTERS.  The following  provisions  shall govern the allocation
of  responsibility  as between MP and the GRE for certain Tax Matters  following
the Closing Date:                                                               

(a)   TAX RETURNS.                                      
-----------                                 

                  (i)   MP shall  prepare,  execute on behalf of SRE and  timely
            file, or cause to be prepared and timely filed, all income/reporting
            Tax Returns of SRE that are due with  respect to any taxable year or
            other taxable  period ending prior to or ending on and including the
            Closing Date. Such authority  shall include,  but not be limited to,
            the determination of the manner in which any items of income,  gain,
            deduction,  loss or credit arising out of the income, properties and
            operations  of SRE  shall  be  reported  or  disclosed  in such  Tax
            Returns; PROVIDED,  HOWEVER, that such Tax Returns shall be prepared
            by treating  items on such Tax Returns in a manner  consistent  with
            the past  practices  with  respect  to such  items,  except  for the
            allocation  provisions of this Agreement which shall be an exception
to such prior treatment.                                

                  (ii)  Except as provided in  Section  13.04(a)(i),  GRE  shall
            have the exclusive  authority  and  obligation to prepare and timely
            file, or cause to be prepared and timely filed, all income/reporting
            Tax Returns of SRE with respect to any taxable year or other taxable
            period  ending  after the  Closing  Date;  PROVIDED,  HOWEVER,  with
            respect to Tax Returns to be filed by GRE  pursuant to this  Section
            13.04(a) for taxable periods  beginning  before the Closing Date and
            ending after the Closing  Date,  items set forth on such Tax Returns
            shall be treated in a manner consistent with the past practices with
            respect to such items, except for the allocation  provisions of this
            Agreement which shall be an exception to such prior treatment.  Such
            authority shall include, but not be limited to, the determination of
            the manner in which any items of income,  gain,  deduction,  loss or
            credit  arising out of the income,  properties and operations of SRE
shall be reported or disclosed on such Tax Returns.     

            (b)   CONTROVERSIES.  GRE shall  promptly  notify MP in writing upon
     receipt  by GRE or SRE or any  affiliate  of GRE or SRE after  the  Closing
     Date) of written notice of any inquiries,  claims,  assessments,  audits or
     similar  events with respect to Taxes  relating to a taxable  period ending
     prior to or ending on and  including  the Closing Date for which SRE may be
     liable under this Agreement (any such inquiry, claim, assessment,  audit or

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     similar event, a "TAX  MATTER").  MP, or its duly appointed  representative
     (the "MP REPRESENTATIVE"), at its sole expense, shall have the authority to
     represent  the  interests of SRE with respect to any Tax Matter  before the
     Internal  Revenue   Service,   any  other  taxing   authority,   any  other
     governmental agency or authority or any court and shall have the sole right
     to control the defense,  compromise or other  resolution of any Tax Matter,
     including  responding  to  inquiries,  filing Tax Returns  and  contesting,
     defending  against and resolving any  assessment  for  additional  Taxes or
     notice of Tax deficiency or other adjustment of Taxes of, or relating to, a
     Tax Matter;  PROVIDED,  HOWEVER,  that neither MP nor any of its affiliates
     shall enter into any  settlement of or otherwise  compromise any Tax Matter
     that  affects or may affect the Tax  liability of GRE or SRE for any period
     ending after the Closing Date,  including the portion of a period beginning
     before the Closing  Date and ending  after the Closing  Date (the  "OVERLAP
     PERIOD") that is after the Closing Date,  without the prior written consent
     of GRE. The MP Representative shall keep GRE fully and timely informed with
     respect to the  commencement,  status and nature of any Tax Matter.  The MP
     Representative  shall,  in good faith,  allow GRE, at its sole expense,  to
     make  comments  to the  MP  Representative,  regarding  the  conduct  of or
positions taken in any such Proceeding.                               

            Except as otherwise  provided  in this  Section 13.04(b), GRE  shall
     have the sole  right to  control  any audit or  examination  by any  taxing
     authority,  initiate  any claim for  refund  or amend any Tax  Return,  and
     contest,  resolve and defend against any  assessment for additional  Taxes,
     notice of Tax  deficiency or other  adjustment of Taxes of, or relating to,
     the income, assets or operations of SRE for all taxable periods;  PROVIDED,
     HOWEVER, that GRE shall not, and shall cause its affiliates (including SRE)
     not to, enter into any  settlement  of any contest or otherwise  compromise
     any issue with  respect to the portion of the Overlap  Period  ending on or
     prior to the Closing  Date without the prior  written  consent of MP, which
consent shall not be unreasonably withheld.                           

            (c)   AMENDED TAX RETURNS. Neither MP nor SRE shall file or cause to
     be filed any  amended  Tax Return or claims for  refund  without  the prior
     written consent of GRE, which consent shall not be  unreasonably  withheld,
     delayed or  conditioned,  except for such amended Tax Returns or claims for
     refund  filed  in  connection  with the  resolution  of any Tax  Matter  in
accordance with Section 13.04(b).                                     

            (d)   POST-CLOSING  ACCESS  AND  COOPERATION.  From  and  after  the
     Closing Date, GRE agrees,  and agrees to cause SRE, to permit MP and the MP
     Representative to have reasonable access,  during normal business hours, to
     the books and  records of SRE,  to the extent  that such books and  records
     relate to a period prior to or ending on the Closing Date,  and  personnel,
     for the purpose of enabling MP to: (i) prepare the Tax Returns specified in
     Section  13.04(a)(i),  and (ii) investigate or contest any Tax Matter which
MP has the authority to conduct under Section 13.04(b).               

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ARTICLE 14

 MISCELLANEOUS

     14.01  SURVIVAL OF REPRESENTATIONS, WARRANTIES  AND  COVENANTS.  Except  as
otherwise  provided in this  Agreement:  (a) all covenants and agreements of the
parties contained in this Agreement shall survive the Closing in accordance with
their terms, and (b) the  representations  and warranties of each of the parties
contained in this  Agreement or contained in any document or  certificate  given
under this  Agreement  as well as the right of the other  party to rely  thereon
shall  survive  the  Closing for a period of twelve (12) months from the Closing
Date;  PROVIDED,  that with  respect to any claim made in  writing  within  such
twelve (12) month period,  such  representations  and  warranties  shall survive
until a final and binding resolution of such claim has been determined. Further,
notwithstanding the foregoing,  (i) the representations and warranties contained
in Sections  9.05 and 10.02 shall  survive  until the  expiration of any and all
applicable  statutes  of  limitations  periods  on  the  subject  matter  of the
representation  or  warranty  (or in the  event of a claim or an  assessment  or
reassessment,  until a final and binding  resolution  of all matters in relation
thereto is made),  and (ii) the  representations  and  warranties  contained  in
Sections 9.01, 9.03 and 10.01 shall continue indefinitely.                      

     14.02  NO BROKER. GRE  represents to MP,  and MP  represents  to  GRE, that
neither has engaged, or incurred any unpaid liability to, any broker,  finder or
consultant in connection with this  transaction.  MP shall indemnify the GRE and
its directors, officers,  shareholders and employees and will hold them harmless
from and  against any claims by any broker,  finder or  consultant  deemed to be
engaged by MP for a brokerage fee, finder's fee or the like. GRE shall indemnify
MP and will hold it harmless  from and against any claims by any broker,  finder
or consultant  deemed to be engaged by GRE for a brokerage fee,  finder's fee or
the like.                                                                       

     14.03  EXPENSES. Except  as  otherwise  provided herein,  the parties shall
each pay all of their respective  legal,  accounting and other expenses incurred
in connection with the transactions contemplated by this Agreement.             

     14.04  NOTICES.  Any notice or other  communication  required or  permitted
hereunder  shall be in  writing  and  delivered  personally  or by a  recognized
international  overnight courier service,  addressed as follows or to such other
address as a party shall  specify for this purpose in a notice given in the same
manner:                                                                         

(a)   TO MP:                                            
-----                                       

Minnesota Power                             
30 West Superior Street                     
Duluth, MN  55802                           
Attn:  Mr. Donald J. Shippar, President     
Facsimile:  (218) 723-3960                  

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with copies to:                                         

Mr. Steven W. Tyacke                        
30 West Superior Street                     
Duluth, MN 55802                            
Facsimile:  (218) 723-3955                  

Briggs and Morgan, P.A.                     
2200 IDS Center                             
80 South Eighth Street                      
Minneapolis, MN  55402                      
Attn:  Michael J. Grimes                    
Facsimile:  (612) 977-8650                  

(b)   TO GRE:                                           
------                                      

Great River Energy                          
17845 East Highway 10                       
Elk River, MN  55330                        
              Attn:  David J. Saggau, Vice President and General Counsel
Facsimile:  (763) 241-3732                  

with copies to:                                         

Moss & Barnett, P.A.                        
4800 Wells Fargo Center                     
Minneapolis, MN  55402                      
Attn:  Eric J. Olsen                        
Facsimile:  (612) 339-6686                  

Any notice given pursuant to this Section shall be deemed given when delivered. 

     14.05  BINDING EFFECT; NO ASSIGNMENT WITHOUT PRIOR  WRITTEN  CONSENT.  This
Agreement  shall be binding  upon and shall  inure to the benefit of the parties
hereto and their respective  successors and assigns,  but may not be assigned or
otherwise  transferred  by any party  without the  written  consent of the other
party.                                                                          

     14.06  ENTIRE AGREEMENT. This Agreement, the Ancillary  Documents  and  the
Binding  Provisions  of the Interim  Agreement,  and the Exhibits and  schedules
hereto or expressly  contemplated hereby contain the entire understanding of the
parties  relating to the withdrawal  transaction and supersede all prior written
or oral and all contemporaneous  oral agreements and understandings  relating to
the subject matter hereof,  including the non-binding  provisions of the Interim
Agreement.  All  statements of fact of the parties  contained in any schedule or
Ancillary  Document under this Agreement to be delivered in connection  with the
transactions contemplated hereby will constitute  representations and warranties
of the parties under this Agreement. The Exhibits, schedules and the Recitals to
this Agreement are hereby incorporated by reference into and made a part of this
Agreement for all purposes.                                                     

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     14.07 CHOICE OF LAW. This Agreement shall be interpreted under the internal
laws of the State of Minnesota  without  regard to any  conflicts of law rule or
principle  that  might  result  in  the   application  of  the  law  of  another
jurisdiction.                                                                   

     14.08  AMENDMENT; WAIVER. This Agreement may  be  amended,  supplemented or
modified,  and any provision  hereof may be waived,  only by written  instrument
making  specific  reference to this  Agreement  signed by the party against whom
enforcement  is sought.  No waiver of any of the  provisions  of this  Agreement
shall be deemed to or shall constitute a waiver of any other provision,  whether
or not similar,  nor shall any waiver  constitute a continuing  waiver unless so
specified in writing.                                                           

     14.09  PRE CLOSING AND POST CLOSING COOPERATION. Before and  after Closing,
each of the parties agree that, at the reasonable request of the other party, it
shall take such actions and furnish such additional documents and instruments as
may be necessary or  reasonably  desirable to  supplement  the schedules to this
Agreement  and/or  otherwise  effectuate the  transactions  contemplated by this
Agreement  and the smooth  transition  of the Business to the sole  ownership of
GRE.  In the event that the MPUC or other  regulatory  agency has  questions  or
inquiries about this Agreement or asserts  jurisdiction,  GRE, on its own behalf
and on behalf of SRE, will cooperate with MP to reasonably respond to the MPUC. 

     14.10  COUNTERPARTS AND FACSIMILE/ELECTRONIC SIGNATURES. This Agreement and
any  Ancillary  Document may be executed in  counterparts  and will be effective
when at least one  counterpart  has been  executed  by each party  hereto.  This
Agreement may be executed in duplicate originals,  each of which shall be deemed
to be an original  instrument.  All such  counterparts  and duplicate  originals
together shall constitute but one Agreement.  The counterparts of this Agreement
and any  Ancillary  Document may be executed and  delivered by telecopy or other
electronic  transmission,  and the  receiving  party may rely on receipt of such
executed document as if the original had been received.                         

     14.11 INTERPRETATION. The article and  section  headings  contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and will not in any way affect the meaning or  interpretation  of
this Agreement.  Whenever the singular form of a word is used in this Agreement,
that word will  include the plural form of that word.  The term "or" will not be
interpreted as excluding any of the items  described.  The term "include" or any
derivative of such term does not mean that the items following such term are the
only types of such items.  Neither this Agreement nor any provision contained in
this  Agreement  will be  interpreted  in favor of or against  any party  hereto
because  such  party  or its  legal  counsel  drafted  this  Agreement  or  such
provision.  Whenever the plural form of a word is used in this  Agreement,  that
word will include the singular form of that word.                               

     14.12  PAYMENTS. Any  payments  to  be  made  by  one  party  to  the other
hereunder,  or by SRE to MP, shall be made in U.S. funds either by (i) certified
or bank official check, or (ii) wire transfer of immediately available funds, at
the remitting party's option.                                                   

     14.13  TERMINATION OF  WITHDRAWAL  AGREEMENT. The  Withdrawal  Agreement is
hereby  terminated  and  replaced  in  its  entirety  by  this  Agreement.  This
termination shall not be                                                        

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interpreted,  and is  not,  a  termination  contemplated  by  Article  12 of the
Withdrawal  Agreement,  and no terms of the Withdrawal  Agreement  shall survive
this termination.                                                               

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, this Agreement has been executed the day and year first
above written.                                                                  

               MINNESOTA POWER

                      By: /s/ Donald Shippar
                                      ------------------------------
                      Donald Shippar
                 President

                  GREAT RIVER ENERGY

                      By: /s/ James Van Epps
                                      ------------------------------
                      James Van Epps
                               Chief Executive Officer

[SIGNATURE PAGE TO AMENDED AND RESTATED WITHDRAWAL
AGREEMENT]

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K’ Filing		Date		First		Last			Other Filings
		10/31/04		22
		6/30/04		19					10-Q
		5/31/04		33
		4/30/04		14					10-Q
		4/16/04		15
		4/1/04		14
Filed on:		3/11/04							4
		2/1/04		20
		1/31/04		6
		1/30/04		1		8			8-K
		1/23/04		22
		1/1/04		16
For Period End:		12/31/03		16					11-K,  5,  U-3A-2
		12/23/03		5		23
		12/12/03		5
		12/5/03		5					8-K
		11/21/03		5					8-K
		11/18/03		5					8-K
		11/12/03		8		19			10-Q
		11/1/03		5		23
		10/31/03		19		20			8-K
		9/24/03		20
		8/28/03		10
		8/13/03		8
		8/14/02		8
		2/5/02		5
		9/12/01		21
		8/15/01		8
		2/22/01		10
		8/16/00		8					POS AM
		6/1/00		28
		4/14/00		5
									List all Filings

4 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 2/20/24  ALLETE, Inc.                      10-K       12/31/23  129:18M
 2/16/23  ALLETE, Inc.                      10-K       12/31/22  126:21M
 2/16/22  ALLETE, Inc.                      10-K       12/31/21  122:22M
 2/17/21  ALLETE, Inc.                      10-K       12/31/20  121:21M