<PAGE>
Exhibit 10(c)






                     ASSET PURCHASE AGREEMENT

                   dated as of November 1, 1998

                          by and between

                         PP&L GLOBAL, INC.

                               and

                 PORTLAND GENERAL ELECTRIC COMPANY




<PAGE>
                             CONTENTS

                                                          Page

ARTICLE I  SALE OF ASSETS AND CLOSING                        1
    1.01  The Sale                                           1
    1.02  Liabilities                                        5
    1.03  Purchase Price; Allocation                         6
    1.04  Purchase Price Adjustment                          7
    1.05  Closing                                            8
    1.06  Prorations                                         9
    1.07  Further Assurances; Post-Closing Cooperation      10
    1.08  Third Party Consents                              11
    1.09  Insurance Proceeds                                11
    1.10  Inclusion/Exclusion of Certain Assets             12

ARTICLE II  REPRESENTATIONS AND WARRANTIES OF SELLER        13
    2.01  Corporate Existence of Seller                     13
    2.02  Authority                                         13
    2.03  No Conflicts                                      13
    2.04  Governmental Approvals and Filings                14
    2.05  Reports                                           14
    2.06  Taxes                                             15
    2.07  Legal Proceedings                                 15
    2.08  Compliance with Laws and Orders                   15
    2.09  Real Property                                     15
    2.10  Tangible Personal Property                        16
    2.11  Intellectual Property Rights                      17
    2.12  Contracts                                         17
    2.13  Licenses                                          18
    2.14  Insurance                                         18
    2.15  Environmental Matters                             19
    2.16  Absence of Condemnation Proceedings               19
    2.17  Regulation as a Utility                           20
    2.18  Brokers                                           20
    2.19  Acknowledgment of Purchaser                       20
    2.20  Disclaimers Regarding Assets                      20

ARTICLE III  REPRESENTATIONS AND WARRANTIES OF PURCHASER    21
    3.01  Corporate Existence                               21
    3.02  Authority                                         21
    3.03  No Conflicts                                      21
    3.04  Governmental Approvals and Filings                22
    3.05  Legal Proceedings                                 22
    3.06  Compliance with Laws and Orders                   22
    3.07  Regulation as a Utility                           23
    3.08  Brokers                                           23
    3.09  Financing                                         23
    3.10  Financial Statements                              23
    3.11  Opportunity to Inspect Assets                     23

ARTICLE IV  COVENANTS OF SELLER                             24
    4.01  Regulatory and Other Approvals                    24
    4.02  HSR Filings                                       25
    4.03  Investigation by Purchaser                        25
    4.04  No Solicitations                                  26
    4.05  Conduct of Business                               26
    4.06  Certain Restrictions                              26
    4.07  Security Deposits                                 28
    4.08  Delivery of Books and Records, etc.; Removal of
          Property                                          28
    4.09  Fulfillment of Conditions                         28
    4.10  Observation, Inspection and Participation         28
    4.11  Notice of Breach                                  29
    4.12  Bridge Financing Fees                             29
    4.13  Special Maintenance and Capital Expenditures      29

ARTICLE V  COVENANTS OF PURCHASER                           30
    5.01  Regulatory and Other Approvals                    30
    5.02  HSR Filings                                       31
    5.03  PPUC Approval for Holding Company                 31
    5.04  Notice of Breach                                  31
    5.05  Fulfillment of Conditions                         31
    5.06  Tax-Exempt Bond Financed Pollution Control 
          Facilities                                        32
    5.07  Purchaser Financing                               32
    5.08  Transmission                                      32

ARTICLE VI  CONDITIONS TO OBLIGATIONS OF PURCHASER          33
    6.01  Representations and Warranties                    33
    6.02  Performance                                       34
    6.03  Officers' Certificates                            34
    6.04  Orders and Laws                                   34
    6.05  Regulatory Consents and Approvals                 34
    6.06  Colstrip Rights of First Refusal                  34
    6.07  Third Party Consents                              34
    6.08  No Seller Material Adverse Effect                 35
    6.09  Proceedings                                       35
    6.10  Deliveries                                        35
    6.11  Colstrip Operations Arrangements                  35
    6.12  Purchaser Financing                               35
    6.13  Opinion of Counsel                                35
    6.14  Transfer of MPC Generation Assets                 35
    6.15  Transmission Agreements                           36

ARTICLE VII  CONDITIONS TO OBLIGATIONS OF SELLER            36
    7.01  Representations and Warranties                    36
    7.02  Performance                                       36
    7.03  Officers' Certificates                            36
    7.04  Orders and Laws                                   37
    7.05  Regulatory Consents and Approvals                 37
    7.06  Third Party Consents                              37
    7.07  Opinion of Counsel                                37
    7.08  No Purchaser Material Adverse Effect              37
    7.09  Proceedings                                       37
    7.10  Colstrip Rights of First Refusal                  38
    7.11  Deliveries                                        38
    7.12  Transmission Agreements                           38

ARTICLE VIII  TAX MATTERS AND POST-CLOSING TAXES            38
    8.01  Transfer Taxes                                    38
    8.02  Returns with respect to Prorated Taxes            38

ARTICLE IX  SURVIVAL; NO OTHER REPRESENTATIONS              39
    9.01  Survival of Representations, Warranties, Covenants 
          and Agreements                                    39
    9.02  No Other Representations                          39

ARTICLE X  INDEMNIFICATION                                  40
   10.01  Other Indemnification                             40
   10.02  Method of Asserting Claims                        42
   10.03  Exclusivity                                       45
   10.04  Purchaser's Release of Seller Under the Colstrip
          Contracts                                         45

ARTICLE XI  TERMINATION                                     46
   11.01  Termination                                       46
   11.02  Effect of Termination                             47

ARTICLE XII  DEFINITIONS                                    47
   12.01  Definitions                                       47

ARTICLE XIII  MISCELLANEOUS                                 61
   13.01  Notices                                           61
   13.02  Bulk Sales Act                                    62
   13.03  Entire Agreement                                  62
   13.04  Expenses                                          62
   13.05  Public Announcements                              63
   13.06  Confidentiality                                   63
   13.07  Waiver                                            64
   13.08  Amendment                                         64
   13.09  No Third Party Beneficiary                        64
   13.10  No Assignment; Binding Effect                     64
   13.11  Headings                                          65
   13.12  Invalid Provisions                                65
   13.13  Governing Law                                     65
   13.14  Counterparts                                      65



<PAGE>
SCHEDULES

Schedule I     Pre-Closing Known Remedial Liabilities


EXHIBITS

Exhibit A      General Assignment and Bill of Sale
Exhibit B      Assumption Agreement
Exhibit C      Pollution Control Facilities
Exhibit D      Officer's Certificate of Seller
Exhibit E      Secretary's Certificate of Seller
Exhibit F      [Intentionally Omitted]
Exhibit G-1    Opinion of Counsel to Seller
Exhibit G-2    Opinion of General Counsel of Seller
Exhibit G-3    Opinion of Outside Montana Counsel to Seller
Exhibit H      Officer's Certificate of Purchaser
Exhibit I      Secretary's Certificate of Purchaser
Exhibit J      Opinion of Counsel to Purchaser
Exhibit K      Transmission Service Agreement Principles


<PAGE>
                      ASSET PURCHASE AGREEMENT

	This ASSET PURCHASE AGREEMENT dated as of November 1, 1998 
is made and entered into by and between PP&L Global, Inc., a 
Pennsylvania corporation ("Purchaser"), and Portland General 
Electric Company, an Oregon corporation ("Seller").  Capitalized 
terms not otherwise defined herein have the meanings set forth 
in Section 12.01.

	WHEREAS, Seller and its Affiliates engage in a number of 
diversified energy related businesses;

	WHEREAS, Seller's principal business is regulated utility 
operations involving the generation, purchase, transmission and 
distribution of electricity in Oregon; and

	WHEREAS, Seller desires to sell, transfer and assign to 
Purchaser, and Purchaser desires to purchase and acquire from 
Seller, Seller's undivided interests in Colstrip Units 3 & 4 and 
related transmission assets (as defined herein, the "PGE 
Colstrip Interests"), Seller's rights under the Colstrip 
Contracts (as defined herein) and certain other assets of Seller 
relating to the PGE Colstrip Interests, and in connection 
therewith, Purchaser has agreed to assume certain of the 
liabilities of Seller relating to such assets, all on the terms 
set forth herein;

	WHEREAS, on the date hereof PP&L Resources, a Pennsylvania 
corporation and the parent of Purchaser ("Parent"), has entered 
into an Equity Contribution Agreement (the "Contribution 
Agreement") with Purchaser and Seller;

	NOW, THEREFORE, in consideration of the mutual covenants 
and agreements set forth in this Agreement, and for other good 
and valuable consideration, the receipt and sufficiency of which 
are hereby acknowledged, the parties hereto agree as follows:

                          ARTICLE I

                  SALE OF ASSETS AND CLOSING

I.1	The Sale

	(a)  On the terms and subject to the conditions set forth 
in this Agreement, Seller will sell, transfer, convey, assign 
and deliver to Purchaser, and Purchaser will purchase and pay 
for, at the Closing, free and clear of all Liens other than 
Permitted Liens (as such term is defined with respect to any 
date after the Closing), all of Seller's right, title and 
interest in, to and under the PGE Colstrip Interests and the 
Assets and Properties used or held for use principally in 
connection with the operation of the Colstrip Facilities, except 
as otherwise provided in Section 1.01(b), as the same shall 
exist as of the Closing including, but not limited to the 
following (collectively with any proceeds and awards referred to 
in Section 1.09, the "Assets"):

        (i)  Real Property.  The real property (including all 
buildings, structures, fixtures and other improvements thereon) 
used or held for use in connection with or related to the 
operation of the Colstrip Facilities, as described in 
Section 1.01(a)(i) of the Disclosure Schedule, which real 
property is held in fee, easement, permit interest or other 
interest, as the case may be (the "Real Property");

       (ii)  Real Property Leases.  (A) The leases and subleases 
of real property used or held for use in connection with or 
related to the operation of the Colstrip Facilities, as 
described in Section 1.01(a)(ii)(A) of the Disclosure Schedule, 
as to which Seller is the lessor or sublessor and (B) the leases 
and subleases of real property used in connection with or 
related to the operation of the Colstrip Facilities, as 
described in Section 1.01(a)(ii)(B) of the Disclosure Schedule, 
as to which Seller is the lessee or sublessee, together with any 
options to purchase the underlying property and leasehold 
improvements thereon, and in each case all other rights, 
subleases, licenses, permits, deposits and profits appurtenant 
to or related to such leases and subleases (the leases and 
subleases described in subclauses (A) and (B), the "Real 
Property Leases");

       (iii)  Inventory.  All inventories of fuels, supplies, 
materials and spares used or held for use in connection with the 
operation of the Colstrip Facilities located on the Real 
Property or the real property subject to the Real Property 
Leases, held for use principally in connection with, or in 
transit to the Colstrip Facilities on the date of the Closing (a 
listing of the fuel inventories, as of September 30, 1998, is 
included in Section 1.01(a)(iii) of the Disclosure Schedule) 
(the "Inventory");

       (iv)  Tangible Personal Property.  All machinery, 
equipment, vehicles, furniture and other personal property 
located where the operation of the Colstrip Facilities is 
conducted, or used or held for use in connection with the 
operation of the Colstrip Facilities (including but not limited 
to the items listed in Section 1.01(a)(iv) of the Disclosure 
Schedule), together with all buildings and structures 
("Improvements") pertaining to Colstrip Units 3 and 4, including 
Seller's interest in the facilities shared by Colstrip Units 1, 
2, 3 and 4 relating thereto, as to those Improvements which have 
been severed from the Real Property and are to be treated as 
personal property, and all warranties against manufacturers or 
vendors relating thereto, to the extent that such warranties are 
freely transferable (the "Tangible Personal Property");

        (v)  Business Contracts.  All contracts, agreements and 
personal property leases (other than the Real Property Leases, 
the Transferable Permits, the Fuel Contracts, and the Colstrip 
Contracts) used primarily in the operation of the Colstrip 
Facilities, that are listed in Section 1.01(a)(v) of the 
Disclosure Schedule (the "Business Contracts");

        (vi)  Transferable Permits.  All Licenses and 
Environmental Permits owned or held by Seller and used or held 
for use in connection with the operation of the Colstrip 
Facilities that are transferable by Seller to Purchaser as 
listed in Section 1.01(a)(vi) of the Disclosure Schedule, and 
the water rights owned or held by Seller, whether or not such 
rights are created or evidenced by a License, and used or held 
for use in connection with the operation of the Colstrip 
Facilities including those listed in Section 1.01(a)(vi) of the 
Disclosure Schedule (the "Transferable Permits");

        (vii)  Intangible Personal Property.  All Intellectual 
Property used or held for use principally in connection with the 
operation of the Colstrip Facilities and all rights, privileges, 
claims, causes of action and options relating or pertaining to 
the operation of the Colstrip Facilities or the Assets, 
including but not limited to the items listed in 
Section 1.01(a)(vii) of the Disclosure Schedule (the "Intangible 
Personal Property");

        (viii)  Security Deposits.  All security deposits 
deposited by or on behalf of Seller as lessee or sublessee under 
the Real Property Leases (the "Tenant Security Deposits");

        (ix)  Prepaid Expenses.  Except for prepaid expenses and 
deposits of Seller attributable to any Excluded Asset or 
Retained Liabilities, all prepaid expenses, progress payments 
and deposits of or by Seller, rights to receive a prepaid 
expense, deposit or progress payment, and cash in transit that 
constitutes a prepaid expense, progress payment or deposit, 
relating to the Assets or the ownership, operation and 
maintenance of the Colstrip Facilities;

        (x)  Fuel Contracts.  All of the fuel contracts listed 
in Section 1.01(a)(x) of the Disclosure Schedule (the "Fuel 
Contracts");

        (xi)  Colstrip Contracts.  Seller's undivided interests 
in and all of Seller's rights under the Contracts relating to 
the Colstrip Facilities listed in Section 1.01(a)(xi) of the 
Disclosure Schedule (the "Colstrip Contracts");

        (xii)  Allowance and Emission Reduction Credits.  All of 
the allowances and/or emission reduction credits described in 
Section 1.01(a)(xii) of the Disclosure Schedule; 

        (xiii)  Warranties.  Any other warranties and 
indemnities given by third parties relating to the Assets or to 
the ownership, operation and maintenance of the Colstrip 
Facilities other than in connection with any Excluded Assets or 
Retained Liabilities;

        (xiv)  Colstrip Books and Records.  All books, operating 
and maintenance records, operating, safety and maintenance 
manuals, engineering or design plans, drawings, blue prints and 
as-built plans, specifications, procedures and similar items of 
Seller relating specifically to the Colstrip Facilities (the 
"Colstrip Books and Records"); and

        (xv)  PGE Colstrip Transmission Assets. Subject to 
Sections 1.10 and 6.12, the PGE Colstrip Transmission Assets as 
described in Section 1.01(a)(xv) of the Disclosure Schedule.

     To the extent any of the Colstrip Books and Records are 
items susceptible to duplication and are either (x) used in 
connection with any of Seller's businesses other than the 
Colstrip Facilities or (y) are required by Law to be retained by 
Seller, Seller may deliver photostatic copies or other 
reproductions from which, in the case of Colstrip Books and 
Records referred to in clause (x), information solely concerning 
Seller's businesses other than the Colstrip Facilities has been 
deleted.  To the extent that any Contract to be transferred 
hereunder to Purchaser is also utilized by or is for the benefit 
of any of Seller's businesses other than the Colstrip 
Facilities, the rights and obligations under such Contracts 
shall be to the extent practicable allocated between the 
Colstrip Facilities and such other businesses in a fair and 
equitable manner that is reasonably satisfactory to the parties.

     (b)  Excluded Assets.  Notwithstanding anything in this 
Agreement to the contrary, the Assets shall not include the 
following assets of Seller (the "Excluded Assets"):

         (i)  Cash.  All cash, commercial paper, certificates of 
deposit and other bank deposits, treasury bills and other cash 
equivalents;

         (ii)  Investments.  Certificates of deposit, shares of 
stock, securities, evidences of Indebtedness, interest in joint 
ventures, partnerships, limited liability companies and other 
entities;

         (iii)  Tax Refunds.  All refunds or credits, if any, of 
Taxes relating to the Assets due to Seller attributable to any 
period ending on or prior to the Closing;

         (iv)  Real and Personal Property.  The real or personal 
property forming part of the Assets described in 
Section 1.01(b)(iv) of the Disclosure Schedule, the delineation 
and composition of which shall be subject to the Separation 
Document;

         (v)  Corporate Records.  All Books and Records of 
Seller other than the Colstrip Books and Records;

         (vi)  Litigation Claims.  Any rights (including 
indemnification) and claims and recoveries under litigation of 
Seller against third parties attributable to the period on or 
prior to the Closing except to the extent relating to the 
Assumed Liabilities;

         (vii)  Excluded Obligations.  The rights of Seller in, 
to and under all Contracts of any nature, the obligations of 
Seller under which are not expressly assumed by Purchaser 
pursuant to Section 1.02(a);

         (viii)  Tradename and Logo.  All tradenames, 
trademarks, service marks or logos owned by Seller or its 
Subsidiaries including all of Seller's right, title and interest 
in, to and under the names "PGE" "Portland General Electric 
Company" or "Enron" or any related or similar trade names, 
trademarks, service marks or logos;

         (ix)  Accounts Receivable.  All trade accounts 
receivable and all notes, bonds and other evidences of 
Indebtedness of and rights to receive payments arising out of 
sales occurring in connection with the operation of the Colstrip 
Facilities prior to the Closing and the security agreements 
related thereto, including any rights of Seller with respect to 
any third party collection procedures or any other Actions or 
Proceedings which have been commenced in connection therewith;

         (x)  Insurance.  Life insurance policies of Seller's 
Employees and all other insurance policies relating to the 
Colstrip Interests;

         (xi)  Allowance and Emission Reduction Credits.  All of 
Seller's excess allowances and/or emission reduction credits 
relating to the Colstrip Facilities that are not described in 
Section 1.01(a)(xii) of the Disclosure Schedule;

         (xii)  All Other Assets.  All other Assets and 
Properties owned by Seller or its Affiliates not used in the 
operation of the Colstrip Facilities; and

         (xiii)  Other.  Seller's rights under this Agreement 
and the Operative Agreements.


I.2	Liabilities

     (a)  Assumed Liabilities.  In connection with the sale, 
transfer, conveyance, assignment and delivery of the Assets 
pursuant to this Agreement, on the terms and subject to the 
conditions set forth in this Agreement, at the Closing, 
Purchaser will assume and agree to pay, perform and discharge 
when due all of the following Liabilities of Seller, direct or 
indirect, known or unknown, absolute or contingent, which arise 
and are attributable to the period after the date of the Closing 
and relate solely to the Assets or which arose and relate to the 
period on or prior to the date of the Closing and are 
specifically referred to in this Section 1.02(a) as being 
assumed by Purchaser (in all cases, except for Seller's 
Liabilities in connection with the Pollution Control Bonds and 
Liabilities constituting Retained Liabilities) (the "Assumed 
Liabilities"):

          (i)  Real Property Lease Obligations.  All Liabilities 
of Seller under the Real Property Leases arising and to be 
performed after the date of the Closing, and excluding any such 
Liabilities arising or to be performed on or prior to the date 
of the Closing;

          (ii)  Tangible Personal Property Obligations.  All 
Liabilities of Seller under any Contract related to the Tangible 
Personal Property arising and to be performed after the date of 
the Closing, and excluding any such Liabilities arising or to be 
performed on or prior to the date of the Closing;

          (iii)  Liabilities under Business Contracts and 
Transferable Permits.  All Liabilities of Seller under the 
Business Contracts and Transferable Permits, to the extent 
transferred to Purchaser, arising and to be performed after the 
date of the Closing, and excluding any such Liabilities arising 
or to be performed on or prior to the date of the Closing;

          (iv)  Security Deposits.  All Liabilities of Seller 
with respect to any security deposit held by Seller as lessor or 
sublessor under the Real Property Leases, to the extent and only 
to the extent of the respective amount of the security deposit 
delivered to Purchaser at the Closing with respect to any such 
Real Property Lease (the "Landlord Security Deposits");

          (v)  Fuel Contracts and Colstrip Contracts.  All 
Liabilities of Seller under the Fuel Contracts and the Colstrip 
Contracts arising and to be performed after the date of the 
Closing and excluding any such Liabilities arising or to be 
performed on or prior to the date of the Closing; 

          (vi)  Pre-Closing Colstrip Contracts Liabilities.  All 
Liabilities of Seller described in Section 1.02(a)(vi) of the 
Disclosure Schedule; and

          (vii)  Environmental Liabilities.  Subject to 
Section 10.01(b), all Environmental Liabilities; provided, 
however, that nothing set forth in this Section 1.02(a) shall 
require Purchaser to assume any Liability for (x) payment of any 
fines or penalties imposed by a Governmental or Regulatory 
Authority relating to the ownership, operation and maintenance 
of the Colstrip Facilities on or prior to the Closing 
("Environmental Fines and Penalties"), or (y) any Off-Site 
Environmental Liabilities).

     Except with respect to Environmental Liabilities that are 
Assumed Liabilities, Assumed Liabilities shall not include 
Liabilities to the extent such Liabilities, but for a breach or 
default by Seller of its obligations, would have been paid, 
performed or otherwise discharged specifically by their terms or 
the terms hereof on or prior to the Closing as it relates to the 
Assets or to the extent the same arise out of any such breach or 
default.

     (b)  Retained Liabilities.  Except for the Assumed 
Liabilities, Purchaser shall not assume by virtue of this 
Agreement or the transactions contemplated hereby, and shall 
have no liability for, any Liabilities of Seller, including 
Seller's Liabilities under this Agreement and the Operative 
Agreements including, but not limited to, the following (the 
"Retained Liabilities"):

          (i)  any Liabilities of Seller in connection with the 
Pollution Control Bonds or claims by bondholders;

          (ii)  any Environmental Fines and Penalties;

          (iii)  any Off-Site Environmental Liabilities;

          (iv)  any Liabilities of Seller in respect of any 
Excluded Assets;

          (v)  any Liabilities of Seller for Taxes;

          (vi)  any Liabilities of Seller with respect to 
commitments for the purchase or sale of power or fuel, other 
than as provided in Section 1.02(a); and

          (vii)  any Liabilities of Seller relating to any 
Employee of Seller.

I.3	Purchase Price; Allocation

     (a)  Purchase Price.  Subject to any adjustment required 
pursuant to Sections 1.10 or  4.12, the aggregate purchase price 
for the Assets shall be an amount equal to the sum of (x) the 
Base Purchase Price, (y) the Adjustment Amount, and (z) subject 
to Sections 1.10 and 6.12, the PGE Transmission Amount 
(collectively, the "Purchase Price"), payable in immediately 
available United States funds at the Closing in the manner 
provided in Section 1.05 or thereafter (as provided in 
Section 1.04).

     (b)  Allocation of Purchase Price.  Purchaser and Seller 
shall negotiate in good faith prior to the Closing and determine 
the allocation of the consideration paid by Purchaser for the 
Assets.  Each party hereto agrees (i) that any such allocation 
shall be consistent with the requirements of Section 1060 of the 
Code and the regulations thereunder, (ii) to complete jointly 
and to file separately Form 8594 with its Federal Income Tax 
Return consistent with such allocation for the tax year in which 
the Closing occurs and (iii) that no party will take a position 
on any income, transfer or gains Tax Return, before any 
Governmental or Regulatory Authority charged with the collection 
of any such Tax or in any judicial proceeding, that is in any 
manner inconsistent with the terms of any such allocation 
without the consent of the other party.

I.4	Purchase Price Adjustment

     (a)  Within 30 days after the Closing, Seller shall obtain 
from MPC and deliver to Purchaser a statement (each, an 
"Adjustment Statement") which reflects (i) the net book value, 
as reflected on the books of Seller as of the Closing of all 
fuel inventory (FERC account no. 151) and stores inventory (FERC 
account no. 154) used at or in connection with the PGE Colstrip 
Interests (the "Inventory Adjustment Amount"), and (ii) the 
Maintenance and Capital Expenditures Amount applicable to the 
PGE Colstrip Interests.  The Inventory Adjustment Amount and the 
Maintenance and Capital Expenditures Amount for the Closing are 
referred to collectively as the "Adjustment Amount."  The 
Inventory Adjustment Amount will be based on an inventory survey 
conducted by MPC within five days prior to the Closing 
consistent with MPC's current inventory procedures (the 
"Inventory Survey"). Seller will request that MPC permit an 
employee, or representative, of Purchaser to observe the 
Inventory Survey.  Each Adjustment Statement shall be prepared 
using the same generally accepted accounting principles, 
policies and methods as MPC has historically used in connection 
with the calculation of the items reflected on such Adjustment 
Statement.  Purchaser agrees to cooperate with Seller and MPC in 
connection with the preparation of each Adjustment Statement and 
related information, and shall provide to Seller and MPC such 
books, records and information as may be reasonably requested 
from time to time.

     (b)  Purchaser may dispute an Inventory Adjustment Amount 
or a Maintenance and Capital Expenditures Amount; provided, 
however, that Purchaser shall notify Seller and MPC in writing 
of the disputed amount, and the basis of such dispute, within 
ten (10) Business Days of Purchaser's receipt of the applicable 
Adjustment Statement.  In the event of a dispute with respect to 
any part of an Adjustment Amount, Purchaser and Seller shall 
attempt to reconcile their differences and any resolution by 
them as to any disputed amounts shall be final, binding and 
conclusive on the parties.  If Purchaser and Seller are unable 
to reach a resolution of such differences within 30 days of 
receipt of Purchaser's written notice of dispute to Seller, 
Purchaser and Seller shall submit the amounts remaining in 
dispute for determination and resolution to the Independent 
Accounting Firm, which shall be instructed to determine and 
report to the parties, within 30 days after such submission, 
upon such remaining disputed amounts, and such report shall be 
final, binding and conclusive on the parties hereto with respect 
to the amounts disputed.  The fees and disbursements of the 
Independent Accounting Firm shall be shared equally by Purchaser 
and Seller. 

     (c)  Within ten (10) Business Days after Purchaser's 
receipt of an Adjustment Statement, Purchaser shall pay all 
undisputed amounts, or if there is a dispute with respect to any 
amount of such Adjustment Statement within five (5) Business 
Days after the final determination of any amounts on such 
Adjustment Statement, Purchaser shall pay to Seller an amount 
equal to the disputed Adjustment Amount as finally determined to 
be payable with respect to such Adjustment Statement.  All 
Adjustment Statement payments shall be less the Estimated 
Adjustment Amount; provided, however, that if such amount shall 
be less than zero then within five (5) Business Days after the 
final determination of such amount Seller will pay to Purchaser 
the amount by which such amount is less than zero.  Any amount 
paid under this Section 1.04 shall be paid with interest for the 
period commencing on the date of the Closing through the date of 
payment, calculated at the prime rate for domestic banks as 
published in the Wall Street Journal (Northeast Edition) in the 
"Money Rates" section on the date of the Closing, and in 
immediately available United States funds.

I.5	Closing

     The Closing will take place at the offices of LeBoeuf, 
Lamb, Greene & MacRae, L.L.P., 125 West 55th Street, New York, 
New York 10019, or at such other place as Purchaser and Seller 
mutually agree, at 10:00 A.M. local time on the Closing Date.  
At the Closing, Purchaser will pay an amount (the "Estimated 
Purchase Price") in United States dollars equal to the sum of 
(x) the Base Purchase Price, as the same may be adjusted 
pursuant to Sections 1.10 and 4.12, and (y) the Estimated 
Adjustment Amount for the Closing, by wire transfer of 
immediately available United States funds to such account as 
Seller may reasonably direct by written notice delivered to 
Purchaser by Seller at least two (2) Business Days before the 
Closing. Simultaneously, (a) Seller will assign and transfer to 
Purchaser good and valid title in and to the Assets (free and 
clear of all Liens, other than Permitted Liens, as such term is 
defined with respect to periods after the Closing) by delivery 
of (i) a General Assignment and Bill of Sale substantially in 
the form of Exhibit A hereto (the "General Assignment"), duly 
executed by Seller, covering the Personal Property comprising 
the Assets except for the Intellectual Property, (ii) an 
assignment of the Intellectual Property in form and substance 
reasonably satisfactory to Purchaser, (iii) (A) special warranty 
deeds in proper statutory form for recording and otherwise in 
form and substance reasonably satisfactory to Purchaser 
conveying good and marketable title to the Real Property in 
which Seller has a fee or easement interest (subject only to 
Permitted Liens), (B) an assignment in form and substance 
reasonably satisfactory to Purchaser conveying valid and 
subsisting title to the Real Property in which Seller has a 
permit interest or other interest (neither fee nor 
easement)(subject only to Permitted Liens), and (C) all 
necessary documentation to transfer and convey to Purchaser the 
water rights listed in Section 1.01(a)(vi) of the Disclosure 
Schedule including water rights transfer certificates executed 
in proper form to be filed with the appropriate Governmental or 
Regulatory Authority, and (iv) such other good and sufficient 
instruments of conveyance, assignment and transfer, in form and 
substance reasonably acceptable to Purchaser's counsel, as shall 
be effective to vest in Purchaser good and valid title to the 
Assets, good and marketable title to the Real Property in which 
Seller has a fee or easement interest and valid and subsisting 
title to the Real Property in which Seller has a permit interest 
or other interest (neither fee nor easement), in each case 
subject only to Permitted Liens (the General Assignment and the 
other instruments referred to in clauses (a) (ii), (iii) and 
(iv) being collectively referred to herein as the "Assignment 
Instruments"), and (b) Purchaser will assume from Seller the due 
payment, performance and discharge of the Assumed Liabilities by 
delivery of (i) an Assumption Agreement substantially in the 
form of Exhibit B hereto (the "Assumption Agreement"), duly 
executed by Purchaser, and (ii) such other good and sufficient 
instruments of assumption, in form and substance reasonably 
acceptable to Seller's counsel, as shall be effective to cause 
Purchaser to assume the Assumed Liabilities as and to the extent 
provided in Section 1.02(a) (the Assumption Agreement and such 
other instruments referred to in clause (b) (ii) being 
collectively referred to herein as the "Assumption 
Instruments").  At the Closing, there shall also be delivered to 
Seller and Purchaser the opinions, certificates and other 
contracts, documents and instruments required to be delivered 
under Articles VI and VII.

I.6	Prorations

     The following items relating to the Assets, the ownership 
of the PGE Colstrip Interests, and the operation of the Colstrip 
Facilities, will be allocated pro rata per diem for the tax year 
that includes the date of the Closing, with Seller liable for 
such items to the extent they are allocable to the period prior 
to the date of the Closing and Purchaser liable for such items 
to the extent they are allocable to periods beginning with and 
subsequent to the date of the Closing:

     (a)  Property Taxes on or with respect to the Assets.

     (b)  Rents, additional rents, Taxes, to the extent normally 
adjusted in connection with similar transactions, and other 
items payable by Seller under the Real Property Leases and the 
Business Contracts.

     (c)  The amount of rents, Taxes and charges for sewer, 
water, telephone, electricity and other utilities relating to 
the Real Property and the real property subject to the Real 
Property Leases.

     (d)  All other items (excluding other Taxes) normally 
adjusted in connection with similar transactions.

     Except as otherwise agreed by the parties, the net amount 
of all such prorations will be settled and paid on the date of 
the Closing.  At least ninety (90) days prior to the Closing 
Date, Seller will provide Purchaser with a reasonably detailed 
schedule showing a calculation of the estimated prorations as if 
the Closing were occurring on such date.  If the Closing shall 
occur before a real estate Tax rate is fixed, the apportionment 
of Taxes shall be based upon the Tax rate for the preceding year 
applied to the latest assessed valuation and such Taxes shall be 
reprorated upon the request of Seller, on the one hand, or 
Purchaser, on the other hand, made within sixty (60) days after 
the date that the actual amounts become available.  Seller and 
Purchaser agree to furnish each other with such documents and 
other records as may be reasonably requested in order to confirm 
all adjustment and proration calculations made pursuant to this 
Section 1.06.

I.7	Further Assurances; Post-Closing Cooperation

     (a)  Subject to the terms and conditions of this Agreement, 
at any time or from time to time after the Closing, at 
Purchaser's request and without further consideration, Seller 
shall execute and deliver to Purchaser such other instruments of 
sale, transfer, conveyance, assignment and confirmation, provide 
such materials and information and take such other actions as 
Purchaser may reasonably deem necessary or desirable in order 
more effectively to transfer, convey and assign to Purchaser, 
and to confirm Purchaser's title to, all of the Assets, and, to 
the full extent permitted by Law, to put Purchaser in actual 
possession and control of the Assets and to assist Purchaser in 
exercising all rights with respect thereto, and otherwise to 
cause Seller to fulfill its obligations under this Agreement and 
the Operative Agreements.  From time to time after the Closing, 
at Purchaser's request and expense, Seller will reasonably 
cooperate with Purchaser in its efforts to maximize any Tax 
benefits associated with the Assets with respect to periods 
following the Closing and to minimize the Tax costs associated 
with the transactions contemplated hereby; provided such 
cooperation does not adversely affect Seller's Tax position. 
From time to time after the Closing, at Seller's request and 
expense, Purchaser will reasonably cooperate with Seller in its 
efforts to maximize any Tax benefits associated with the Assets 
with respect to periods prior to the Closing and to minimize the 
Tax costs associated with the transactions contemplated hereby; 
provided such cooperation does not adversely affect Purchaser's 
Tax position.

     (b)  Following the Closing, each party will afford the 
other party, its counsel and its accountants, during normal 
business hours, reasonable access to the books, records and 
other data relating to the PGE Colstrip Interests in its 
possession with respect to periods prior to the Closing and the 
right to make copies and extracts therefrom, to the extent that 
such access may be reasonably required by the requesting party 
in connection with (i) the preparation of Tax Returns, (ii) the 
determination or enforcement of rights and obligations under 
this Agreement, (iii) compliance with the requirements of any 
Governmental or Regulatory Authority, (iv) the determination or 
enforcement of the rights and obligations of any Indemnified 
Party or (v) in connection with any actual or threatened Action 
or Proceeding.  Further each party agrees for a period extending 
six (6) years after the Closing not to destroy or otherwise 
dispose of any such books, records and other data unless such 
party shall first offer in writing to surrender such books, 
records and other data to the other party and such other party 
shall not agree in writing to take possession thereof during the 
thirty (30) day period after such offer is made.

     (c)  If, in order properly to prepare its Tax Returns, 
other documents or reports required to be filed with 
Governmental or Regulatory Authorities or its financial 
statements or to fulfill its obligations hereunder, it is 
necessary that a party be furnished with additional information, 
documents or records relating to the PGE Colstrip Interests not 
referred to in paragraph (b) above, and such information, 
documents or records are in the possession or control of the 
other party, such other party shall use its best efforts to 
furnish or make available such information, documents or records 
(or copies thereof) at the recipient's request, cost and 
expense.  Any information obtained by such party in accordance 
with this paragraph shall be held confidential by such party in 
accordance with Section 13.06.

     (d)  Notwithstanding anything to the contrary contained in 
this Section 1.07, if the parties are in an adversarial 
relationship in litigation or arbitration, the furnishing of 
information, documents or records in accordance with paragraph 
(c) of this Section 1.07 shall be subject to applicable rules 
relating to discovery.

I.8	Third Party Consents

     To the extent that any Business Contract, Transferable 
Permit, Fuel Contract or Colstrip Contract is not assignable 
without the consent of another party, this Agreement shall not 
constitute an assignment or an attempted assignment thereof if 
such assignment or attempted assignment would constitute a 
breach thereof.  Seller and Purchaser shall use their reasonable 
efforts to obtain the consent of such other party to the 
assignment of any such Business Contract, Transferable Permit, 
Fuel Contract or Colstrip Contract to Purchaser in all cases in 
which such consent is or may be required for such assignment.  
If any such consent shall not be obtained, or if any attempted 
assignment would be ineffective or would impair Purchaser's 
rights and obligations so that Purchaser would not in effect 
acquire the benefit of substantially all of such rights and 
obligations, Seller shall cooperate with Purchaser in any 
reasonable arrangement, to the extent legally permissible, 
designed to provide for Purchaser the benefits intended to be 
assigned to Purchaser under the relevant Business Contract, 
Transferable Permit, Fuel Contract or Colstrip Contract, 
including enforcement at the cost and for the account of 
Purchaser of any and all rights of Seller against the other 
party thereto arising out of the breach or cancellation thereof 
by such other party or otherwise.  If and to the extent that 
such arrangement is not made in a manner reasonably satisfactory 
to Purchaser, Purchaser shall have no obligation pursuant to 
Section 1.02 or otherwise only with respect to any such Business 
Contract, Transferable Permit, Fuel Contract or Colstrip 
Contract.  The provisions of this Section 1.08 shall not affect 
the right of Purchaser not to consummate the transactions 
contemplated by this Agreement as provided in Section 1.10 or if 
the conditions to its obligations hereunder contained in 
Sections 6.05, 6.06 and 6.07 have not been fulfilled.

I.9	Insurance Proceeds

     If any of the Assets (other than an Asset excluded under 
Section 1.10) is destroyed, damaged or taken in condemnation, 
the insurance proceeds or condemnation award with respect 
thereto shall be an Asset; provided, however, Seller agrees not 
to settle or compromise any amounts concerning such Assets 
during negotiations with Seller's insurance company without 
Purchaser's prior consent.  At the Closing, Seller shall pay or 
credit to Purchaser any such insurance proceeds or condemnation 
awards received by it on or prior to the Closing and shall 
assign to or assert for the benefit of Purchaser all of its 
rights against any insurance companies, Governmental or 
Regulatory Authorities and others with respect to such damage, 
destruction or condemnation.  As and to the extent that there is 
available insurance under policies maintained by Seller and its 
Affiliates, predecessors and successors in respect of any 
Assumed Liability, except for any such insurance proceeds with 
respect to which the insured is directly or indirectly self-
insured or has agreed to indemnify the insurer, Seller shall 
cause such insurance to be applied toward the payment of such 
Assumed Liability.  The provisions of this Section 1.09 shall 
not affect the right of Purchaser not to consummate the 
transactions contemplated by this Agreement if the conditions to 
its obligations hereunder contained in Sections 6.01 or 6.08 
have not been fulfilled.

I.10	Inclusion/Exclusion of Certain Assets

     (a)  Purchaser agrees to use its reasonable best efforts to 
obtain the approval described in clause (ii) of the definition 
of Purchaser Required Regulatory Approvals in a manner 
reasonably satisfactory to Purchaser that will allow Purchaser 
to purchase and own, operate and maintain after the Closing the 
PGE Colstrip Transmission Assets, and to consult with Seller 
prior to abandoning its efforts to do so.  If, notwithstanding 
Purchaser's compliance with the preceding sentence and with 
Section 5.01, such Purchaser Required Regulatory Approval is not 
obtained from FERC with respect to the proposed purchase, 
ownership or operation of the PGE Colstrip Transmission Assets, 
or is finally denied by FERC, within seven (7) months from the 
date of execution of this Agreement or, in the event that the 
condition set forth in Section 6.12 has not been satisfied on or 
prior to the Closing, then (i) at the Closing, Seller and 
Purchaser shall enter into the Transmission Service Agreement 
and the Separation Document, (ii) the PGE Colstrip Transmission 
Assets shall be Excluded Assets hereunder, (iii) the Purchase 
Price shall be reduced by the PGE Colstrip Transmission Amount, 
and (iv) the conditions to Closing described in Sections 6.05 
and 7.05 shall be deemed satisfied with respect to such 
Purchaser Required Regulatory Approval solely with respect to 
the PGE Colstrip Transmission Assets but shall not be deemed 
satisfied with respect to any other Assets, provided that Seller 
shall have the right, in its sole discretion, to waive such 
seven (7) month period and require Purchaser to continue to 
pursue such approval, consistent with Purchaser's obligations 
under this Section 5.01 hereof, for such time period(s) as 
Seller may determine, not to exceed the time period provided for 
in Section 11.01(d) hereof.

     (b)  Purchaser has been provided copies of title insurance 
commitments covering certain of the Assets and intends to obtain 
at its expense additional title commitments and title policies.  
Seller agrees to use reasonable efforts to cure title objections 
of which Seller is notified by Purchaser, to the extent title 
would not otherwise satisfy Seller's obligations with respect to 
the title to be delivered by Seller in compliance with Section 
1.05(a) of this Agreement.  From and after the date hereof and 
through the Closing, Seller shall use reasonable efforts to cure 
and remove exceptions to title to the Real Property (other than 
those exceptions referred to in the preceding sentence) of which 
Seller is notified by Purchaser in writing; provided, however, 
that in no event shall Seller be obligated to incur expenses or 
make payments of any nature in excess of $150,000 in discharging 
its obligations set forth in this sentence. Nothing in the two 
preceding sentences shall change or otherwise affect the nature 
of the title to the Real Property that Seller is obligated to 
transfer to Purchaser in compliance with this Agreement.

                           ARTICLE II

             REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller hereby represents and warrants to Purchaser as 
follows:

II.1  Corporate Existence of Seller

     Seller is a corporation duly incorporated, validly existing 
and in good standing under the Laws of the State of Oregon, and 
has full corporate power and authority to own, use and lease the 
Assets.  Seller is duly qualified or licensed to do business as 
a foreign corporation and is in good standing in each 
jurisdiction in which the Assets make such qualification 
necessary, except in each case in those jurisdictions where the 
failure to be so duly qualified or licensed and in good standing 
would not create a Seller Material Adverse Effect.  Seller has 
heretofore made available to Purchaser complete and correct 
copies of its articles of incorporation, as amended, and bylaws 
(or other comparable corporate charter documents), as currently 
in effect.

II.2  Authority

     Seller has full corporate power and authority to execute 
and deliver this Agreement and the Operative Agreements to which 
it is a party, to perform its obligations hereunder and 
thereunder and to consummate the transactions contemplated 
hereby and thereby, including to sell and transfer (pursuant to 
this Agreement) the Assets.  The execution and delivery by 
Seller of this Agreement and the Operative Agreements to which 
it is a party, and the performance by Seller of its obligations 
hereunder and thereunder, have been duly and validly authorized 
by the Board of Directors of Seller, no other corporate action 
on the part of Seller or its shareholder being necessary.  This 
Agreement has been duly and validly executed and delivered by 
Seller and, subject to receipt of Seller Required Regulatory 
Approvals and Purchaser Required Regulatory Approvals, 
constitutes, and upon the execution and delivery by Seller of 
the Operative Agreements to which it is a party, such Operative 
Agreements will constitute, legal, valid and binding obligations 
of Seller enforceable against Seller in accordance with their 
terms except as the same may be limited by bankruptcy, 
insolvency, reorganization, arrangement, moratorium or other 
similar Laws relating to or affecting the rights of creditors 
generally, or by general equitable principles.

II.3  No Conflicts 

     Except as set forth in Section 2.03 of the Disclosure 
Schedule, and other than obtaining Seller Required Regulatory 
Approvals and Purchaser Required Regulatory Approvals, the 
execution and delivery by Seller of this Agreement do not, and 
the execution and delivery by Seller of the Operative Agreements 
to which it is a party, the performance by Seller of its 
obligations under this Agreement and such Operative Agreements 
and the consummation of the transactions contemplated hereby and 
thereby will not:

     (a)  conflict with or result in a violation or breach of 
any of the terms, conditions or provisions of the articles of 
incorporation, as amended, or  bylaws, as amended (or other 
comparable corporate charter documents) of Seller;

     (b)  require any consent, approval, authorization or 
permit, or filing with or notification to, any Governmental or 
Regulatory Authority, except (x) for the Seller Required 
Regulatory Approvals and the Purchaser Required Regulatory 
Approvals, or (y) for those requirements which become applicable 
to Seller as a result of the specific regulatory status of 
Purchaser (or any of its Affiliates) or as a result of any other 
facts that specifically relate to the business or activities in 
which Purchaser (or any of its Affiliates) is or proposes to be 
engaged;

     (c)  result in a default (or give rise to any right of 
termination, cancellation or acceleration or require any consent 
or approval) under any of the terms, conditions or provisions of 
any note, bond, mortgage, indenture, license, agreement or other 
instrument or obligation to which Seller is a party or by which 
Seller, or any of the Assets may be bound, except for such 
defaults (or rights of termination, cancellation or acceleration 
or any consent or approval) as to which requisite waivers or 
consents have been obtained; or

     (d)  conflict with or result in a violation or breach of 
any term or provision of any Law or Order applicable to Seller 
or any of its Assets and Properties.

II.4  Governmental Approvals and Filings

     Except for (i) Seller Required Regulatory Approvals and 
(ii) with respect to the PGE Colstrip Transmission Assets as set 
forth in Section 1.01(a)(xv) of the Disclosure Schedule, no 
consent, approval or action of, filing with or notice to any 
Governmental or Regulatory Authority on the part of Seller is 
required in connection with the execution, delivery and 
performance of this Agreement or any of the Operative Agreements 
to which it is a party or the consummation of the transactions 
contemplated hereby or thereby, except those as would be 
required solely as a result of the identity or the legal or 
regulatory status of Purchaser or any of its Affiliates.

II.5  Reports

     Since December 31, 1995, Seller has filed or caused to be 
filed with the SEC, the applicable state or local utility 
commissions or regulatory bodies and FERC, all material forms, 
statements, reports and documents (including all exhibits, 
amendments and supplements thereto) required to be filed by it 
with respect to the PGE Colstrip Interests under each of the 
Securities Act, the Exchange Act, the applicable state public 
utility Laws, the Federal Power Act, the Holding Company Act and 
the respective rules and regulations thereunder, all of which 
complied in all material respects with all applicable 
requirements of the appropriate act and the rules and 
regulations thereunder in effect on the date each such report 
was filed, and there are no material misstatements or omissions 
in respect of such reports.

II.6  Taxes

     Seller has timely filed or will timely file all Tax Returns 
required to be filed by Seller with respect to the ownership, 
operation and maintenance of the Assets and has paid or will pay 
all Taxes shown to be due on such returns with respect to all 
tax periods ending prior to the Closing.  Except for the 
properties financed with the Pollution Control Bonds, no other 
Assets have been financed using tax exempt financing.  The 
owners of the Colstrip Facilities have jointly made a timely and 
effective affirmative election pursuant to Section 761(a) of the 
Code and Treasury Regulation Section 1.761-2(b) to be excluded 
from all of subchapter K of the Code, and such election has not 
been modified, revoked or otherwise altered, and remains in 
effect.  Seller has not taken and has not been notified that any 
of such owners has taken any action inconsistent with such 
election.

II.7  Legal Proceedings

     Except as disclosed in Section 2.07 of the Disclosure 
Schedule (with paragraph references corresponding to those set 
forth below):

     (a)  there are no Actions or Proceedings pending or, to the 
Knowledge of Seller, threatened against, relating to or 
affecting Seller with respect to the ownership, operation or 
maintenance of the Assets which could reasonably be expected 
(i) to result in the issuance of an Order restraining, enjoining 
or otherwise prohibiting or making illegal the consummation of 
any of the transactions contemplated by this Agreement or any of 
the Operative Agreements, or (ii) individually or in the 
aggregate with other such Actions or Proceedings, to create a 
Seller Material Adverse Effect; and

     (b)  there are no Orders outstanding against Seller with 
respect to the ownership, operation and maintenance of the 
Assets which, individually or in the aggregate with other such 
Orders, would have a Seller Material Adverse Effect.

II.8  Compliance with Laws and Orders

     Except as disclosed in Section 2.08 of the Disclosure 
Schedule, Seller is not in material violation of or in material 
default under any Law or Order applicable to Seller's ownership 
of the Assets or, to Seller's Knowledge, the operation and 
maintenance of the Assets.

II.9  Real Property

     (a)  Section 1.01(a)(i) of the Disclosure Schedule contains 
a description of, and exhibits indicating the location of, the 
Real Property owned by Seller and included in the Assets, and 
Section 1.01(a)(ii)(A) of the Disclosure Schedule contains a 
description of, and exhibits indicating the location of, each 
parcel of real property leased by Seller (as lessor, sublessor, 
lessee or sublessee), or as to which Seller holds easements or 
other rights, and included in the Assets.

     (b)  Seller, or with respect to Real Property described in 
Exhibit D to Section 1.01(a)(i) of the Disclosure Schedule, MPC 
or its Affiliates, as the case may be, has, and at Closing 
Seller will have, good and marketable title to the Real Property 
in which Seller (or with respect to the Real Property described 
in the aforementioned Exhibit D, MPC or its Affiliates, as the 
case may be) holds a fee or easement interest.  Pursuant to the 
terms and conditions of the Colstrip Contracts, Seller has, and 
to Seller's Knowledge, MPC or its Affiliates has, valid and 
subsisting title to the Real Property in which Seller (or MPC or 
its Affiliates, as the case may be) holds a permit interest or 
other interest, in each case, free and clear of all Liens other 
than Permitted Liens.  Except for the Permitted Liens and the 
Real Property subject to Real Property Leases described in 
Section 1.01(a)(ii)(A) of the Disclosure Schedule, Seller, 
subject to the terms and conditions of the Colstrip Contracts, 
is in possession of the Real Property and there are no third 
party licenses or tenants at the sites of the Real Property or 
Real Property Leases.

     (c)  Seller has a valid and subsisting leasehold estate in 
and the right to quiet enjoyment of the real properties subject 
to the Real Property Leases described in Section 1.01(a)(ii)(B) 
of the Disclosure Schedule for the full term thereof.  Each Real 
Property Lease to which Seller is a party is a legal, valid and 
binding agreement, enforceable in accordance with its terms, of 
Seller and of each other Person that is a party thereto, and 
except as set forth in Section 2.09(c) of the Disclosure 
Schedule, there is no default (or any condition or event which, 
after notice or lapse of time or both, would constitute a 
default) thereunder.

     (d)  Seller has made available to Purchaser prior to the 
execution of this Agreement true and complete copies of (i) any 
current surveys in Seller's possession or any policies of title 
insurance currently in force and in the possession of Seller 
with respect to the Real Property, and (ii) all Real Property 
Leases (including any amendments and renewal letters) and, to 
the extent reasonably available, all other documents referred to 
in clause (i) of this paragraph (d) with respect to the real 
property subject to the Real Property Leases described in 
Section 1.01(a)(ii)(B) of the Disclosure Schedule.

     (e)  Except set forth in Section 12.01(e) of the Disclosure 
Schedule, to Seller's Knowledge all Real Properties have access 
to a public road and are zoned for their current uses.  No fee 
ownership, lease, right of way, easement, license or other right 
in real property, other than the Real Property and the Real 
Property Leases, is necessary for the Purchaser to own, operate 
and maintain the Asssets substantially as currently owned, 
operated and maintained by or on behalf of Seller.  Seller or to 
Seller's Knowledge, MPC or its Affiliates, has not received any 
written notice that any of the improvements on any of the Real 
Property or Real Property Leases, including without limitation 
the Easements, or any appurtenances thereto or equipment therein 
or the operation or maintenance thereof, violate any restrictive 
covenant or the terms, conditions or restrictions of any 
easement.

II.10  Tangible Personal Property

     Seller, subject to the terms and conditions of the Colstrip 
Contracts, or, to Seller's Knowledge, MPC or its Affiliates, is 
in possession of and has good and valid title to, or has valid 
leasehold interests in or valid rights under Contract to use, 
all the Tangible Personal Property used in and individually or 
in the aggregate with other such property material to the 
ownership, operation and maintenance of the Colstrip Facilities.  
To Seller's Knowledge all the Tangible Personal Property is free 
and clear of all Liens, other than Permitted Liens and Liens 
disclosed in Section 2.10 of the Disclosure Schedule, and is in 
all material respects in good working order and condition, 
ordinary wear and tear excepted; provided, however, that if the 
PGE Transmission Assets are not purchased by Purchaser, the 
Separation Document will be considered a Permitted Lien with 
respect to the property subject thereto.

II.11  Intellectual Property Rights

     Seller has not received notice that Seller is infringing 
any Intellectual Property of any other Person in connection with 
the Assets or the operation of the Colstrip Facilities, no claim 
is pending or has been made against Seller to such effect that 
has not been resolved and, to its Knowledge, Seller is not 
infringing any Intellectual Property of any other Person.

II.12  Contracts

     (a)  Section 2.12(a) of the Disclosure Schedule (with 
paragraph references corresponding to those set forth below) 
contains a true and complete list of each of the following 
Contracts (true and complete copies of which, together with all 
amendments and supplements thereto, have been made available to 
Purchaser prior to the execution of this Agreement) to which 
Seller is a party (other than indirectly pursuant to Seller's 
obligations under the Colstrip Contracts) and which relate to 
the operation of the Colstrip Facilities or by which any of the 
Assets are bound:

          (i)  all Contracts with any Person containing any pro-
vision or covenant prohibiting or limiting the ability of Seller 
to engage in any activity relating to the operation of the 
Colstrip Facilities or compete with any Person in connection 
with the operation of the Colstrip Facilities or prohibiting or 
limiting the ability of any Person to compete with Seller in 
connection with the operation of the Colstrip Facilities;

          (ii)  all partnership, joint venture, shareholders' or 
other similar Contracts with any Person in connection with the 
operation of the Colstrip Facilities;

          (iii)  all Contracts with distributors, dealers, 
manufacturer's representatives, sales agencies or franchises 
with whom Seller deals in connection with the operation of the 
Colstrip Facilities which in any case involve the payment or 
potential payment, pursuant to the terms of any such Contract, 
by or to Seller of more than $250,000 annually;

          (iv)  all Contracts relating to the future disposition 
or acquisition of any Assets, other than dispositions or 
acquisitions of Inventory in the ordinary course of business; 
and

          (v)  all other Contracts (other than the Real Property 
Leases) not described above that constitute Assumed Liabilities 
with respect to the operation of the Colstrip Facilities that 
(A) involve the payment or potential payment, pursuant to the 
terms of any such Contract, by or to Seller of more than 
$250,000 annually and (B) cannot be terminated within sixty (60) 
days after giving notice of termination without resulting in any 
material cost or penalty to Seller (or, after the Closing, to 
Purchaser).

     (b)  Each Contract required to be disclosed in 
Section 2.12(a) of the Disclosure Schedule and each of the 
Colstrip Contracts, the Fuel Contracts and each of the Business 
Contracts which involves the payment or potential payment by or 
to Seller of more than $250,000 annually is in full force and 
effect and constitutes a legal, valid and binding agreement, 
enforceable in accordance with its terms, of Seller and of each 
other party thereto; and except as disclosed in Section 2.12(b) 
of the Disclosure Schedule neither Seller nor, to the Knowledge 
of Seller, any other party to such Contract is in violation or 
breach of or default under any such Contract (or with notice or 
lapse of time or both, would be in violation or breach of or 
default under any such Contract).

II.13  Licenses

      (a  Seller has been and is in material compliance with all 
Licenses, including without limitation those Licenses listed in 
Section 2.13(b) of the Disclosure Schedule, necessary to allow 
Seller to obtain the benefits of the PGE Colstrip Interests as 
currently enjoyed by Seller.  Except as disclosed in 
Section 2.13(a) of the Disclosure Schedule, Seller has not 
received any written notification that it is in violation, nor 
does Seller otherwise have Knowledge of any violations, of any 
of such Licenses, or any Law or Order of any Governmental or 
Regulatory Authority applicable to it.  

     (b  Section 2.13(b) of the Disclosure Schedule sets forth 
all material Licenses and Environmental Permits relating to the 
ownership, operation and maintenance of the Colstrip Facilities 
to which Seller is a named licensee or permittee.

II.14  Insurance

     Except as set forth in Section 2.14 of the Disclosure 
Schedule, all material policies of fire, liability, worker's 
compensation and other forms of insurance owned or held by 
Seller (other than indirectly through Seller's obligations under 
the Colstrip Contracts) and insuring the Assets are in full 
force and effect, all premiums with respect thereto covering all 
periods up to and including the date as of which this 
representation is being made have been paid (other than 
retroactive premiums which may be payable with respect to 
comprehensive general liability and worker's compensation 
insurance policies), and no notice of cancellation or 
termination has been received by Seller with respect to any such 
policy which was not replaced on substantially similar terms 
prior to the date of such cancellation.  Except as set forth in 
Section 2.14 of the Disclosure Schedule, Seller has not been 
refused any insurance with respect to the Assets nor has its 
coverage been limited by any insurance carrier to which it has 
applied for any such insurance or with which it has carried 
insurance during the last twelve months.

II.15  Environmental Matters

     With respect to its ownership interest in the PGE Colstrip 
Interests, except as disclosed in Section 2.15 of the Disclosure 
Schedule:

      (a  Seller and, to Seller's Knowledge, MPC, holds, and is 
in substantial compliance with, all Licenses which are required 
for Seller to own, and for MPC to operate and maintain, the 
Assets under applicable Environmental Laws ("Environmental 
Permits"), and Seller has not received any written notice of any 
violation of any Environmental Law that has not heretofore been 
resolved and Seller, and, to Seller's Knowledge, MPC, is 
otherwise in substantial compliance with applicable 
Environmental Laws with respect to the ownership, operation and 
maintenance of the Assets.

      (b  Seller has not received any written request for 
information, or been notified that it is a potentially 
responsible party, under any Environmental Law with respect to 
any on-site location relating to the ownership, operation and 
maintenance of the Assets.

      (c  Seller has not entered into or agreed to any consent 
decree or order, and is not subject to any outstanding judgment, 
decree, or judicial order relating to compliance with any 
Environmental Law or to investigation or cleanup of Hazardous 
Materials under any Environmental Law relating to the ownership, 
operation and maintenance of the Assets.

      (d  There are no claims, actions, proceedings or 
investigations pending or, to the Knowledge of Seller, 
threatened against Seller before any court, Governmental or 
Regulatory Authority relating to any Environmental Law relating 
to the PGE Colstrip Interests with respect to the ownership, 
operation and maintenance of the Assets.

      (e  To its Knowledge, Seller or MPC has made available to 
Purchaser: (i) a list of all material environmental reports 
and/or audits prepared by or for Seller within the past five (5) 
years which discuss the environmental conditions of the Assets; 
and (ii) a list of all underground storage tanks and/or surface 
impoundments located on the Assets which contain or have 
contained Hazardous Materials.

      The representations and warranties made in this 
Section 2.15 are Seller's exclusive representations and 
warranties relating to environmental matters.

II.16  Absence of Condemnation Proceedings

     Neither the whole nor any portion of the PGE Colstrip 
Interests is subject to any pending or, to Seller's Knowledge, 
threatened suit or Order for condemnation or other taking by any 
public authority.

II.17  Regulation as a Utility

     Seller is a public utility company within the meaning of 
the Holding Company Act. Except as set forth in Section 2.17 of 
the Disclosure Schedule, Seller is not subject to regulation as 
a public utility or public service company (or similar 
designation) by the United States, any state of the United 
States, any foreign country or any municipality or any political 
subdivision of the foregoing.

II.18  Brokers

     Except for Goldman, Sachs & Co., whose fees, commissions 
and expenses are the sole responsibility of MPC, Morgan Stanley 
Dean Witter, whose fees, commissions and expenses are the sole 
responsibility of Puget and Merrill Lynch & Co., whose fees, 
commissions and expenses are the sole responsibility of Seller, 
all negotiations relative to this Agreement and the transactions 
contemplated hereby have been carried out by Seller directly 
with Purchaser without the intervention of any Person on behalf 
of Seller in such manner as to give rise to any valid claim by 
any Person against Purchaser for a finder's fee, brokerage 
commission or similar payment.

II.19  Acknowledgment of Purchaser

     Purchaser expressly acknowledges that Seller is the holder 
of a non-controlling interest in the Colstrip Facilities 
pursuant to the Colstrip Contracts, and that Seller (i) did not 
manage the construction of the Colstrip Facilities, (ii) is not 
now and has never been the operator (or otherwise in physical 
possession) of the Colstrip Facilities, including with respect 
to issues involving the year 2000 compliance, and (iii) was not 
involved in or responsible for the creation or provision of data 
or information about the Colstrip Facilities by MPC or any other 
co-owner of the Colstrip Facilities. 

II.20  Disclaimers Regarding Assets

     EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THE ASSETS 
ARE BEING TRANSFERRED "AS IS, WHERE IS" AND SELLER EXPRESSLY 
DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR 
NATURE, EXPRESS OR IMPLIED, AS TO THE CONDITION, VALUE OR 
QUALITY OF THE ASSETS OR THE PROSPECTS (FINANCIAL AND 
OTHERWISE), RISKS AND OTHER INCIDENTS OF THE ASSETS AND SELLER 
SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF 
MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS FOR ANY 
PARTICULAR PURPOSE WITH RESPECT TO THE ASSETS, OR ANY PART 
THEREOF.

                          ARTICLE III

             REPRESENTATIONS AND WARRANTIES OF PURCHASER

     Purchaser hereby represents and warrants to Seller as 
follows:

III.1  Corporate Existence

     Purchaser is a corporation duly incorporated, validly 
existing and in good standing under the Laws of the Commonwealth 
of Pennsylvania and has full corporate power and authority to 
conduct its business as it is now being conducted and to own, 
lease and operate its Assets and Properties.  Purchaser has full 
corporate power and authority to enter into this Agreement and 
the Operative Agreements to which it is a party, to perform its 
obligations hereunder and thereunder and to consummate the 
transactions contemplated hereby and thereby.  Purchaser has 
heretofore made available to Seller complete and correct copies 
of its articles of incorporation and by-laws (or other 
comparable corporate charter documents), as currently in effect.

III.2  Authority

     The execution and delivery by Purchaser of this Agreement 
and the Operative Agreements to which it is a party, and the 
performance by Purchaser of its obligations hereunder and 
thereunder, have been duly and validly authorized by the Board 
of Directors of Purchaser, no other corporate action on the part 
of Purchaser or its stockholders being necessary.  This 
Agreement has been duly and validly executed and delivered by 
Purchaser and, subject to receipt of Seller Required Regulatory 
Approvals and Purchaser Required Regulatory Approvals, 
constitutes, and upon the execution and delivery by Purchaser of 
the Operative Agreements to which it is a party, such Operative 
Agreements will constitute, legal, valid and binding obligations 
of Purchaser enforceable against Purchaser in accordance with 
their terms except as the same may be limited by bankruptcy, 
insolvency, reorganization, arrangement, moratorium or other 
similar Laws relating to or affecting the rights of creditors 
generally, or by general equitable principles.

III.3  No Conflicts

     Except as set forth in Section 3.03 of the Disclosure 
Schedule, and other than obtaining Seller Required Regulatory 
Approvals and Purchaser Required Regulatory Approvals, the 
execution and delivery by Purchaser of this Agreement do not, 
and the execution and delivery by Purchaser of the Operative 
Agreements to which it is a party, the performance by Purchaser 
of its obligations under this Agreement and such Operative 
Agreements and the consummation of the transactions contemplated 
hereby and thereby will not:

     (a    conflict with or result in a violation or breach of 
any of the terms, conditions or provisions of the articles of 
incorporation or by-laws (or other comparable corporate charter 
documents) of Purchaser;

     (b    require any consent, approval, authorization or 
permit, or filing with or notification to, any Governmental or 
Regulatory Authority except for Seller Required Regulatory 
Approvals and Purchaser Required Regulatory Approvals;

     (c    result in a default (or give rise to any right of 
termination, cancellation or acceleration) under any of the 
terms, conditions or provisions of any note, bond, mortgage, 
indenture, license, agreement or other instrument or obligation 
to which Purchaser is a party or by which any of its Assets and 
Properties may be bound, except for such defaults (or rights of 
termination, cancellation or acceleration) as to which requisite 
waivers or consents have been obtained; or

     (d    conflict with or result in a violation or breach of 
any term or provision of any Law or Order applicable to 
Purchaser or any of its Assets and Properties.

III.4  Governmental Approvals and Filings

     Except for Purchaser Required Regulatory Approvals, no 
consent, approval or action of, filing with or notice to any 
Governmental or Regulatory Authority on the part of Purchaser is 
required in connection with the execution, delivery and 
performance of this Agreement or any of the Operative Agreements 
to which it is a party or the consummation of the transactions 
contemplated hereby or thereby.

III.5  Legal Proceedings

     Except as disclosed in Section 3.05 of the Disclosure 
Schedule (with paragraph references corresponding to those set 
forth below):

     (a     there are no Actions or Proceedings pending or, to 
the Knowledge of Purchaser, threatened against, relating to or 
affecting Purchaser or any of its Assets and Properties which 
could reasonably be expected (i) to result in the issuance of an 
Order restraining, enjoining or otherwise prohibiting or making 
illegal the consummation of any of the transactions contemplated 
by this Agreement or any of the Operative Agreements, or 
(ii) individually or in the aggregate with other such Actions or 
Proceedings, to create a Purchaser Material Adverse Effect; and

     (b     there are no Orders outstanding against Purchaser 
which, individually or in the aggregate with other such Orders, 
would have a Purchaser Material Adverse Effect.

III.6  Compliance with Laws and Orders

     Except as disclosed in Section 3.06 of the Disclosure 
Schedule, Purchaser is not in violation of or in default under 
any Law or Order applicable to Purchaser or its Assets and 
Properties.

III.7  Regulation as a Utility

     Purchaser is not a public utility company within the 
meaning of the Holding Company Act.  As of the Closing, 
Purchaser will be subject to regulation as a public utility and 
as a licensee under the Federal Power Act.  Purchaser is not 
otherwise subject to regulation as a public utility or public 
service company (or similar designation) by the United States, 
any state of the United States (except to the extent that assets 
acquired by Purchaser under the MPC Purchase Agreement and 
related activities in connection therewith will subject 
Purchaser to regulation under Montana law), any foreign country 
or any municipality or any political subdivision of the 
foregoing.

III.8  Brokers

     Except for Chase Securities Inc., whose fees, commissions 
and expenses are the sole responsibility of Purchaser, all 
negotiations relative to this Agreement and the transactions 
contemplated hereby have been carried out by Purchaser directly 
with Seller without the intervention of any Person on behalf of 
Purchaser in such manner as to give rise to any valid claim by 
any Person against Purchaser for a finder's fee, brokerage 
commission or similar payment.

III.9  Financing

     Purchaser has cash and/or commitments for equity 
contributions or credit facilities sufficient (and has provided 
Seller with evidence thereof) to pay the Base Purchase Price and 
to make all related payments of fees and expenses in connection 
with the transactions contemplated by this Agreement and the 
Operative Agreements.

III.10  Financial Statements

     Purchaser has delivered to Seller the financial statements 
of Purchaser listed on Section 3.10 of the Disclosure Schedule, 
and such financial statements and notes fairly present the 
financial condition and the results of operations, changes in 
stockholders' equity, and cash flow of Purchaser as of the 
respective dates of and for the periods referred to therein, all 
in accordance with GAAP, subject, in the case of interim 
financial statements, to normal recurring year-end adjustments 
(the effect of which will not, individually or in the aggregate, 
be materially adverse) and the absence of notes and schedules.

III.11  Opportunity to Inspect Assets

     Prior to its execution of this Agreement, Purchaser has 
conducted an independent investigation of the Assets.  In making 
its decision to execute this Agreement, and to purchase the 
Assets, Purchaser has relied upon the terms and provisions of 
this Agreement and the results of such independent 
investigation.

                           ARTICLE IV

                        COVENANTS OF SELLER

     Seller covenants and agrees with Purchaser that, at all 
times from and after the date hereof until the Closing, and, 
with respect to Section 4.08 thereafter, Seller will comply with 
all covenants and provisions of this Article IV, except to the 
extent Purchaser may otherwise consent in writing.

IV.1  Regulatory and Other Approvals

     Seller will (a)(i) take all reasonable steps necessary or 
desirable, and proceed diligently and in good faith and use all 
reasonable efforts, as promptly as practicable to obtain all 
consents, approvals (including Final Orders) or actions of, to 
make all filings with and to give all notices to Governmental or 
Regulatory Authorities provided that the Final Order(s) of the 
OPUC approving the transaction and the terms and conditions of 
each of the Operative Agreements and the respective regulatory 
treatment of any and all financial impacts thereof in each case 
shall be in form and substance satisfactory to Seller in its 
reasonable discretion and (ii) take all commercially reasonable 
steps necessary or desirable to obtain all consents, approvals 
or actions, and give all notices to, any other Person required 
of Seller, in each case, to consummate the transactions 
contemplated hereby and by the Operative Agreements, including 
those described in Section 2.03 of the Disclosure Schedule and 
Seller Required Regulatory Approvals, or required for Purchaser 
to own, operate or maintain, on and after the Closing, the 
Assets substantially as such assets are currently owned, 
operated and maintained by Seller, (b) provide such other 
information and communications to such Governmental or 
Regulatory Authorities or other Persons as such Governmental or 
Regulatory Authorities or other Persons may reasonably request 
in connection therewith and (c) provide reasonable cooperation 
(i) to Purchaser in obtaining all Purchaser Required Regulatory 
Approvals and other consents, approvals or actions of, making 
all filings with and giving all notices to Governmental or 
Regulatory Authorities or other Persons required of Purchaser to 
consummate the transactions contemplated hereby and by the 
Operative Agreements and (ii) to Purchaser and Purchaser's 
potential lenders in connection with Purchaser Financing for the 
transactions contemplated by this Agreement.  Prior to making 
any filings with a Governmental or Regulatory Authority pursuant 
to this Section 4.01, Seller agrees to provide copies of such 
filings to Purchaser.  Nothing in this Agreement shall require 
Seller to institute litigation or to pay or agree to pay any sum 
of money or make financial accommodations (other than the 
payment or incurrence of customary expenses and filing or other 
fees) in order to obtain any necessary consent, approval or 
authorization including, without limitation, the Seller Required 
Regulatory Approvals.  Seller will provide prompt notification 
to Purchaser when any such consent, approval, action, filing or 
notice referred to in clause (a) above is obtained, taken, made 
or given, as applicable, and will advise Purchaser of any 
communications (and, unless precluded by Law or Order, provide 
copies of any such communications that are in writing) with any 
Governmental or Regulatory Authority or other Person regarding 
any of the transactions contemplated by this Agreement or any of 
the Operative Agreements.

IV.2  HSR Filings

     In addition to and not in limitation of Seller's covenants 
contained in Section 4.01, Seller will (a) consult with 
Purchaser as to appropriate timing of filings and take promptly 
all actions necessary to make the filings required of Seller or 
its Affiliates under the HSR Act, (b) comply at the earliest 
practicable date with any request for additional information 
received by Seller or its Affiliates from the Federal Trade 
Commission or the Antitrust Division of the Department of 
Justice pursuant to the HSR Act and (c) cooperate with Purchaser 
in connection with Purchaser's filing under the HSR Act and in 
connection with resolving any investigation or other inquiry 
concerning the transactions contemplated by this Agreement 
commenced by either the Federal Trade Commission or the 
Antitrust Division of the Department of Justice or state 
attorneys general.

IV.3  Investigation by Purchaser

     Seller will (a) provide Purchaser and its officers, 
employees, counsel, accountants, financial advisors, potential 
lenders, Purchaser's and potential lenders' consultants and 
other representatives (collectively, "Representatives") with 
full access, upon reasonable prior notice and during normal 
business hours, to the Employees and such other officers, 
employees and agents of Seller who have any responsibility for 
the PGE Colstrip Interests, to Seller's accountants, and, 
subject to the terms and conditions of the Colstrip Contracts, 
to the Assets (including, to the extent it is within Seller's 
power to do so, access to the Colstrip Facilities site), but 
only to the extent that such access does not unreasonably 
interfere with Seller's business and the operation of the 
Assets, (b) make available to Purchaser and its Representatives, 
upon request, a copy of each report, schedule or other document 
filed or received by Seller between the Bid Date and the Closing 
with or from the SEC, FERC, EPA, OPUC or any other relevant 
Governmental or Regulatory Authority and relating to the 
ownership, operation and maintenance of the Assets or the 
transactions contemplated by this Agreement, and all such 
information and data (including copies of Business Contracts, 
Transferable Permits, Fuel Contracts, Colstrip Contracts, and 
other Books and Records) concerning the ownership, operation and 
maintenance of the PGE Colstrip Interests and the Assets and the 
Assumed Liabilities as Purchaser or its Representatives 
reasonably may request in connection with such investigation, 
except to the extent that furnishing any such report, schedule, 
other documents, information or data would violate any Law, 
Order (including any protective order or similar confidentiality 
obligation), Contract, License or Environmental Permit 
applicable to Seller or by which any of its Assets and 
Properties is bound.  In furtherance of the foregoing, Seller 
agrees to cooperate with Purchaser in connection with 
Purchaser's efforts to obtain Purchaser Financing, as defined in 
Section 5.07.  Seller's cooperation shall include the 
negotiation and execution of a consent with the lenders with 
respect to the Operative Agreements, which consent shall include 
providing such lenders with rights to cure a Purchaser default 
under the Operative Agreements; provided, however, that Seller 
shall not be obligated, in connection with such cooperation or 
consent, to take any action or enter into any agreement that 
would have any adverse effect on Seller or any of its rights or 
benefits under this Agreement or the Operative Agreements.

IV.4  No Solicitations

     Subject to the duties imposed by applicable Law, Seller 
will not take, nor will it permit any Affiliate of Seller (or 
authorize or permit any investment banker, financial advisor, 
attorney, accountant or other Person retained by or acting for 
or on behalf of Seller or any such Affiliate) to take, directly 
or indirectly, any action to solicit, encourage, receive, 
negotiate, assist or otherwise facilitate (including by 
furnishing confidential information with respect to the Colstrip 
Facilities or permitting access to the Assets and Properties and 
Books and Records of Seller) any offer or inquiry from any 
Person concerning the acquisition of any of the Assets other 
than Purchaser or its Affiliates or any of their 
Representatives.

IV.5  Conduct of Business

     (a    From the Bid Date to the Closing, Seller shall, 
consistent with the terms and conditions of the Colstrip 
Contracts and to the extent such matters are presented to Seller 
by MPC thereunder, vote or cause to be voted its Project Share 
(as defined in the Colstrip Contracts) in favor of (i) the 
continued operation of the Colstrip Facilities only in the 
ordinary course of business consistent with Good Utility 
Practice, (ii) causing MPC to use commercially reasonable 
efforts to (A) maintain good relations with and keep available 
(subject to dismissals and retirements in the ordinary course of 
business) the services of key Employees, (B) maintain the Assets 
in good working order and condition, ordinary wear and tear 
excepted, (C) maintain the good will of lessors, customers, 
suppliers, lenders and other Persons with whom MPC otherwise has 
significant business relationships in connection with the 
operation of the Colstrip Facilities, (D) materially comply with 
all Laws and Orders, including Environmental Laws applicable to 
the ownership, operation and maintenance of the Colstrip 
Facilities and (E) keep in force at not less than their present 
limits all material policies of insurance covering the Assets to 
the extent reasonably practicable in light of the prevailing 
market conditions in the insurance industry.

     (b    Without limiting the generality of the foregoing, 
except with the prior written consent of Purchaser, Seller will, 
with respect to the Colstrip Facilities promptly notify 
Purchaser if Seller becomes aware of the cancellation of any 
material insurance policy or any material modification thereto.

IV.6  Certain Restrictions

     Except as set forth in Section 4.06 of the Disclosure 
Schedule, Seller will refrain from agreeing to any of the 
following actions:

     (a    creating any Lien (other than a Permitted Lien) on 
the Assets except in the ordinary course of Seller's business or 
as required under Seller's instruments of Indebtedness as in 
effect on the date hereof and, in each case, as will be removed 
on or prior to the Closing;

     (b    selling, leasing (as lessor), transferring or 
otherwise disposing of, any of the Assets (except as 
contemplated by Exhibit D to Section 1.01(a)(i) of the 
Disclosure Schedule), other than Assets used, consumed or 
replaced in the ordinary course of business consistent with Good 
Utility Practice;

     (c    entering into, amending or modifying in any material 
way, terminating (partially or completely), granting any waiver 
of any material term under or giving any material consent with 
respect to any Business Contract, Transferable Permit, Fuel 
Contract, Colstrip Contract or other contract or agreement 
comprising a part of the Assets or that relates to the Assets, 
the Assumed Liabilities or is material to the operation of the 
Colstrip Facilities;

     (d    other than in the ordinary course of business, 
incurring, purchasing, canceling, prepaying or otherwise 
providing for a complete or partial discharge in advance of a 
scheduled payment date with respect to, or waiving any right 
under, any Liability of or owing to Seller in connection with 
the Assets, the Assumed Liabilities or the operation of the 
Colstrip Facilities in an aggregate principal amount exceeding 
$500,000;

     (e    engaging with any Person in any Business Combination, 
unless such Person agrees in a written instrument to adopt and 
comply with the terms and conditions of this Agreement as though 
such Person was an original signatory hereto;

     (f    engaging in any transaction individually or in the 
aggregate with other such transactions material to the ownership 
or operation of the Assets with any officer, director, Affiliate 
or Associate of Seller, or any Associate of any such officer, 
director or Affiliate, that would be an Assumed Liability and 
that would extend beyond the Closing other than in the ordinary 
course of business on terms no less favorable to Seller than 
could be obtained on an arm's-length basis with an unaffiliated 
third party;

     (g    to the extent it has notice thereof and the authority 
to do so pursuant to the Colstrip Contracts, making any material 
change in the level of fuel inventory and stores inventory 
customarily maintained by Seller with respect to the PGE 
Colstrip Interests, other than consistent with Good Utility 
Practice; 

     (h    to the extent it has notice thereof and the authority 
to do so pursuant to the Colstrip Contracts, entering into any 
commitment for the purchase or sale of fuel having a term 
greater than six months and not terminable on or before the 
Closing either (i) automatically, or (ii) by option of Seller 
(or, after the Closing, by Purchaser) in its sole discretion, if 
the aggregate payment under such commitment and all other 
outstanding commitments not previously approved by Purchaser 
would be expected to exceed $500,000;

     (i    making any tax election or entering into or amending 
any real or personal property Tax agreement, treaty or 
settlement that would have a negative effect on the Tax status 
of Purchaser with regard to the Assets; or

     (j    entering into any Contract to do or engage in any of 
the foregoing.

     The foregoing shall not preclude Seller from making, or 
agreeing to the making of (i) Maintenance Expenditures and 
Capital Expenditures and (ii) at Seller's expense under the 
Colstrip Contracts, such other maintenance and capital 
expenditures as Seller or MPC deems necessary, subject in all 
cases to the applicable provisions of the Colstrip Contracts.

IV.7   Security Deposits

     Seller will transfer to Purchaser at the Closing all of 
Seller's right, title and interest in and to the Tenant Security 
Deposits and the Landlord Security Deposits and any other 
deposits, prepayments or progress payments made or held by 
Seller in connection with the Assets or material to the 
ownership, operation and maintenance of the Colstrip Facilities.

IV.8  Delivery of Books and Records, etc.; Removal of Property

     (a    At the Closing, Seller shall deliver or make 
available to Purchaser at Seller's place of business in 
Portland, Oregon, all of the Books and Records relating to the 
PGE Colstrip Interests as are in Seller's possession, and if at 
any time after the Closing Seller discovers in its possession or 
under its control any other such Books and Records or other 
Assets, it will forthwith deliver such Books and Records or 
other Assets to Purchaser.

     (b    Except as set forth in Section 4.08(b) of the 
Disclosure Schedule, within a reasonable time after the Closing, 
Seller shall take all commercially reasonable steps to remove 
any of Seller's Assets and Properties not being sold to 
Purchaser hereunder from the Real Property except as 
contemplated by the Separation Document.  Such removal shall be 
at the sole cost and risk of Seller, including risk of loss and 
damage to such Assets and Properties and to the Assets conveyed 
to Purchaser hereby.

IV.9   Fulfillment of Conditions

     Seller will execute and deliver at the Closing each 
Operative Agreement that Seller is required hereby to execute 
and deliver as a condition to the Closing, will take all 
commercially reasonable steps necessary or desirable and proceed 
diligently and in good faith to satisfy each other condition to 
the obligations of Purchaser contained in this Agreement and 
will not take or fail to take any action that could reasonably 
be expected to result in the nonfulfillment of any such 
condition.

IV.10  Observation, Inspection and Participation

     Seller agrees, subject to its rights and obligations under 
the Colstrip Contracts, that between the date of this Agreement 
and the date of the Closing, Purchaser shall be entitled to have 
a reasonable number of representatives, all of whom shall be 
employees of Purchaser or its Affiliates unless otherwise 
approved by Seller in each instance, which approval shall not be 
unreasonably withheld ("Site Representatives") at any of the 
Assets, on a full or part time basis (whether on site or off-
site), as determined by Purchaser; provided, however, that 
(a) the presence and activities of the Site Representatives 
shall be conducted in a manner as not to interfere unreasonably 
with the ownership, operation and maintenance of the Assets, or 
with the activities of Seller and MPC not related to the Assets 
and (b) the Site Representatives shall not have access to any 
information that is unavailable pursuant to Section 4.03. 
Reasonable office space and facilities will be made available by 
Seller to such Site Representatives. Each Site Representative 
shall have the right to review budgets and expenditures, audit 
records (except for personnel and medical records unless 
required by law), inspect equipment, advise on repairs required 
for equipment, review permits, review the progress of outages, 
review maintenance and operating practices and otherwise observe 
all activities at the above mentioned facilities in each case to 
the extent related to the operation of the Assets.  Between the 
date hereof and the Closing, Seller shall, to the extent it is 
able to do so under the Colstrip Contracts, exercise its 
reasonable efforts to invite Site Representatives to attend 
internal meetings in which Seller participates and which relate 
specifically to the physical operation or maintenance of the 
Assets; provided, however, that such obligation shall not extend 
to (i) meetings of the boards of directors, or any committees 
thereof, of  Seller or any of its Affiliates, (ii) meetings with 
counsel, or (iii) meetings the subject matter of which, in 
Seller's reasonable judgment, if disclosed to Purchaser, would 
likely be detrimental to Seller (including, without limitation, 
information relating to Seller's proposed business activities 
following the Closing or to contractual or other matters as to 
which the interests of Seller and Purchaser may diverge).  Site 
Representatives shall also be entitled to consult with Seller 
and make recommendations as to all activities relating to the 
management, operation, maintenance, construction, renewal, 
addition, replacement, modification and disposal of the Assets, 
including, without limitation, applications for authorizations, 
permits and licenses, and fuel procurement and transportation.

IV.11  Notice of Breach

     Seller shall promptly give notice to Purchaser upon 
becoming aware of the occurrence of any event which would cause 
or constitute a breach of any of the representations, warranties 
or covenants of Seller contained in this Agreement.

IV.12  Bridge Financing Fees

     In the event that Purchaser obtains bridge financing 
directly or indirectly from a non-Affiliated third party in 
connection with the transactions contemplated hereby, Seller 
will deduct from the Base Purchase Price at the time of Closing 
an amount equal to 13.01% of any financing fees paid by 
Purchaser in connection with such bridge financing; provided, 
however, that the deduction under this Section 4.12 shall not 
exceed $2,012,647 in the aggregate.

4.13  Special Maintenance and Capital Expenditures

     Within thirty (30) days after the date hereof, Seller and 
Purchaser shall mutually agree on a Schedule setting forth a 
month by month special maintenance and capital expenditure 
budget relating to the Assets for calendar years 1999 and 2000 
(the "Budget"). The Budget will be divided into two parts; 
Category A items and Category B items. With respect to items 
listed under Category A, Seller agrees to use commercially 
reasonable efforts to cause MPC, to the extent Seller has the 
right to do so under the Colstrip Contracts, to conduct and 
complete such special maintenance and capital expenditures at 
the times set forth in the Budget. With respect to items listed 
under Category B, Seller shall cause MPC, to the extent Seller 
has the right to do so under the Colstrip Contracts, to conduct 
and complete such special maintenance and capital expenditures 
at such times as Seller and MPC shall determine in their 
reasonable discretion after consultation with Purchaser. With 
respect to emergency special maintenance and capital expenditure 
items not identified in the Budget that arise after the date 
hereof and prior to the Closing, Seller will cause MPC, to the 
extent Seller has the right to do so under the Colstrip 
Contracts, to consult with Purchaser and to conduct and complete 
any such emergency special maintenance and capital expenditure 
items in accordance with Good Utility Practice ("Emergency 
Expenditures").

                          ARTICLE V

                   COVENANTS OF PURCHASER

     Purchaser covenants and agrees with Seller that, at all 
times from and after the date hereof until the Closing and, in 
the case of Section 5.06, thereafter, Purchaser will comply with 
all covenants and provisions of this Article V, except to the 
extent Seller may otherwise consent in writing.

V.1  Regulatory and Other Approvals

     Purchaser will (a) take all reasonable steps necessary or 
desirable, and proceed diligently and in good faith and use all 
reasonable efforts, at the earliest commercially practicable 
dates, to obtain all consents, approvals or actions of, to make 
all filings with and to give all notices to Governmental or 
Regulatory Authorities or any other Person required of Purchaser 
to consummate the transactions contemplated hereby and by the 
Operative Agreements, including  those described in Section 3.03 
of the Disclosure Schedule and Purchaser Required Regulatory 
Approvals or for Purchaser to own, operate or maintain, on and 
after the Closing, the Assets substantially as such assets are 
currently owned, operated and maintained by Seller, (b) provide 
such other information and communications to such Governmental 
or Regulatory Authorities or other Persons as such Governmental 
or Regulatory Authorities or other Persons may reasonably 
request in connection therewith and (c) provide reasonable 
cooperation to Seller in obtaining Seller Required Regulatory 
Approvals and all other consents, approvals or actions of, 
making all filings with and giving all notices to Governmental 
or Regulatory Authorities or other Persons required of Seller to 
consummate the transactions contemplated hereby and by the 
Operative Agreements.  Prior to making any filings with a 
Governmental or Regulatory Authority pursuant to this 
Section 5.01, Purchaser agrees to provide copies of such filings 
to Seller.  Nothing in this Agreement shall require Purchaser to 
institute litigation or to pay or agree to pay any sum of money 
or make financial accommodations (other than the payment or 
incurrence of customary expenses and filing or other fees) in 
order to obtain any necessary consent, approval or authorization 
including, without limitation, the Purchaser Required Regulatory 
Approvals.  Purchaser will provide prompt notification to Seller 
when any such consent, approval, action, filing or notice 
referred to in clause (a) above is obtained, taken, made or 
given, as applicable, and will advise Seller of any 
communications (and, unless precluded by Law, provide copies of 
any such communications that are in writing) with any 
Governmental or Regulatory Authority or other Person regarding 
any of the transactions contemplated by this Agreement or any of 
the Operative Agreements.

V.2  HSR Filings

     In addition to and without limiting Purchaser's covenants 
contained in Section 5.01, Purchaser will (a) consult with 
Seller as to the appropriate timing of filings and take promptly 
all actions necessary to make the filings required of Purchaser 
or its Affiliates under the HSR Act, (b) comply at the earliest 
practicable date with any request for additional information 
received by Purchaser or its Affiliates from the Federal Trade 
Commission or the Antitrust Division of the Department of 
Justice pursuant to the HSR Act and (c) cooperate with Seller in 
connection with Seller's filing under the HSR Act and in 
connection with resolving any investigation or other inquiry 
concerning the transactions contemplated by this Agreement 
commenced by either the Federal Trade Commission or the 
Antitrust Division of the Department of Justice or state 
attorneys general.

V.3  PPUC Approval for Holding Company

     From the date hereof through the Closing, Purchaser agrees 
not to enter into any Contract or take any action which, when 
taken together with the consummation of the transactions 
contemplated by this Agreement, would violate any condition 
imposed by the PPUC that limits Parent's investment in 
diversified businesses without prior PPUC approval.  Purchaser 
further agrees that, in seeking the approval described in clause 
(v) of the definition of Purchaser Required Regulatory 
Approvals, Purchaser shall use commercially reasonable efforts 
to seek any reasonable PPUC approval that would allow Purchaser 
to consummate the transactions contemplated hereby and to own, 
operate and maintain the Assets in substantially the same manner 
as currently owned, operated and maintained by Seller.

V.4  Notice of Breach

     Purchaser shall promptly give notice to Seller upon 
becoming aware of the occurrence of any event which would cause 
or constitute a breach of any of the representations, warranties 
or covenants of Purchaser contained in this Agreement.

V.5  Fulfillment of Conditions

     Purchaser will execute and deliver at the Closing each 
Operative Agreement that Purchaser is hereby required to execute 
and deliver as a condition to the Closing, will take all 
commercially reasonable steps necessary or desirable and proceed 
diligently and in good faith to satisfy each other condition to 
the obligations of Seller contained in this Agreement and will 
not take or fail to take any action that could reasonably be 
expected to result in the nonfulfillment of any such condition.

V.6  Tax-Exempt Bond Financed Pollution Control Facilities

     (a    Following the Closing until the maturity or 
redemption date of the Pollution Control Bonds,

          (i)  Except as otherwise permitted in (ii), Purchaser 
will not materially change or permit to be changed the character 
or nature of the use of those facilities listed in Exhibit C 
hereto (the "Pollution Control Facilities") from the manner 
Seller has used said facilities prior to the sale of the Assets, 
unless such changed use would constitute a use or purpose of 
said facilities for which tax-exempt bonds could be issued 
pursuant to section 1313 of the Tax Reform Act of 1986 (P.L. 99-
514 or, hereinafter, the "1986 Tax Act"), to refund bonds 
described in section 1312(a) of the 1986 Tax Act which, for 
purposes hereof, are assumed to have been issued to finance 
facilities of the same character and use or purpose as said 
facilities; 

          (ii)  Purchaser will not sell or otherwise transfer 
any portion of such Pollution Control Facilities  unless (A) the 
transferee covenants to satisfy the conditions of 
Section 5.06(a)(i) and with respect to its ownership and use of 
said facilities following the date of any such purchase or (B) 
the transfer relates to personal property and is exclusively for 
cash the proceeds of which will be expended within six months of 
the date of receipt on facilities for which tax-exempt bonds 
could be issued pursuant to section 1313 of the 1986 Tax Act, to 
refund bonds described in section 1312(a) of said act which, for 
purposes hereof, are assumed to have been issued to finance 
facilities of the same character and use or purpose as said 
facilities; and

          (iii)  Purchaser will cooperate with Seller and use 
commercially reasonable efforts to permit Seller to have access 
to the Colstrip Facilities at reasonable times to examine the 
Pollution Control Facilities.

     Nothing herein shall be construed to prevent Purchaser from 
ceasing to use any facilities or equipment that, in Purchaser's 
reasonable judgment, have become obsolescent or otherwise 
uneconomical to continue to use.  Seller will notify Purchaser 
when the Pollution Control Bonds have matured or been redeemed.  

V.7  Purchaser Financing

     Purchaser will proceed in good faith and use all reasonable 
efforts to obtain financing on commercially reasonable terms in 
amounts and structure reasonably consistent with Purchaser's 
financing plan as set forth in Purchaser's written proposal to 
Seller dated September 25, 1998 (the "Purchaser Financing").

V.8 Transmission

     (a)  Transmission Path from Colstrip Units 3 & 4 to 
Townsend.  If, notwithstanding Purchaser's compliance with 
Section 1.10(a) and with Section 5.01, the Purchaser Required 
Regulatory Approval described in clause (ii) of the definition 
of Purchaser Required Regulatory Approvals is not obtained from 
FERC with respect to the proposed purchase, ownership or 
operation of the PGE Colstrip Transmission Assets, or is finally 
denied by FERC, then the Parties contemplate that they will 
enter into a Transmission Service Agreement, negotiation of 
which has yet to be completed.  Immediately following the date 
hereof, and for the next sixty (60) days, the Parties covenant 
to use their reasonable best efforts, working diligently and 
cooperatively, to complete negotiations and the drafting of a 
definitive Transmission Service Agreement consistent with the 
Transmission Service Agreement Principles as set forth on 
Exhibit K and reasonably satisfactory to both Parties.

     (b)  Transmission Path from Townsend to Garrison.  
Immediately following the date hereof, as contemplated by 
Sections 6.07 and 7.06, and for the next sixty (60) days, the 
Parties covenant to use their reasonable best efforts, working 
diligently and cooperatively to negotiate with the Bonneville 
Power Administration for its consent to the assignment at 
Closing from Seller to Purchaser of the Montana Intertie 
Agreement, as described on Exhibit K.

     (c)  Transmission Path from Garrison to Portland.  
Immediately following the date hereof, and for the next sixty 
(60) days, the Parties covenant to use their reasonable best 
efforts, working diligently and cooperatively, to negotiate with 
the Bonneville Power Administration to convert Seller's 
transmission rights under its Integration of Resources Contract 
(Contract No. DE-MS79-89BP92273 of December 5, 1989) to a point 
to point transmission agreement reasonably satisfactory to 
Purchaser and to negotiate a release of Seller's obligations 
under such contract reasonably satisfactory to Seller.

V.9   Wholesale Transition Service Agreement

     The Parties shall enter into good faith negotiations 
following the date hereof with respect to an agreement for the 
sale by Purchaser of energy from the Colstrip Facility to 
Seller, in a quantity  approximately equivalent to that of the 
PGE Colstrip Interests, and having a term of up to two (2) years 
("Wholesale Transition Service Agreement"), provided, however, 
that neither Party shall be obligated for any reason to enter 
into such an agreement.


                         ARTICLE VI

            CONDITIONS TO OBLIGATIONS OF PURCHASER

      The obligations of Purchaser hereunder to purchase the 
Assets and to assume and pay, perform and discharge the Assumed 
Liabilities are subject to the fulfillment, at or before the 
Closing, of each of the following conditions (all or any of 
which may be waived in whole or in part by Purchaser in its sole 
discretion):

VI.1  Representations and Warranties

      The representations and warranties made by Seller in this 
Agreement and the Operative Agreements, taken as a whole, shall 
be true and correct, in all material respects, on and as of the 
Closing as though repeated on and as of the Closing or, in the 
case of representations and warranties made as of a specified 
date earlier than the Closing, on and as of such earlier date.

VI.2  Performance

     Seller shall have performed and complied with, in all 
material respects, the agreements, covenants and obligations 
required by this Agreement to be so performed or complied with 
by Seller at or before the Closing.

VI.3  Officers' Certificates

     Seller shall have delivered to Purchaser a certificate, 
dated as of the Closing and executed by the Chairman of the 
Board, the President or any Vice President of Seller, 
substantially in the form and to the effect of Exhibit D hereto, 
and a certificate, dated as of the Closing and executed by the 
Secretary or any Assistant Secretary of Seller, substantially in 
the form and to the effect of Exhibit E hereto.

VI.4  Orders and Laws

     There shall not be in effect on the date of the Closing any 
Order or Law restraining, enjoining or otherwise prohibiting or 
making illegal the consummation of any of the transactions 
contemplated by this Agreement or any of the Operative 
Agreements.

VI.5  Regulatory Consents and Approvals

     Subject to Section 1.10, all Seller Required Regulatory 
Approvals and Purchaser Required Regulatory Approvals shall have 
been duly obtained, made or given and shall be in full force and 
effect and shall be Final Orders reasonably satisfactory to 
Purchaser and all terminations or expirations of waiting periods 
imposed by any Governmental or Regulatory Authority necessary 
for the consummation of the transactions contemplated by this 
Agreement and the Operative Agreements, including under the HSR 
Act, shall have occurred.

VI.6  Colstrip Rights of First Refusal

     Seller shall have either received the consents required 
under each of the Colstrip Rights of First Refusal or the 
exercise periods of such Colstrip Rights of First Refusal shall 
have expired.

VI.7  Third Party Consents

     The consents (or in lieu thereof waivers) listed in 
Section 6.07 of the Disclosure Schedule shall have been obtained 
and shall be in full force and effect and shall be reasonably 
satisfactory to Purchaser.

VI.8  No Seller Material Adverse Effect

     There shall not have occurred and be continuing a Seller 
Material Adverse Effect.

VI.9  Proceedings

     All corporate and other proceedings to be taken by Seller 
in connection with the transactions contemplated hereby and all 
documents incident thereto shall be reasonably satisfactory in 
form and substance to Purchaser and its counsel, and Purchaser 
and its counsel shall have received all such certified or other 
copies of such documents as it or they may reasonably request.

VI.10  Deliveries

     Seller shall have executed and delivered to Purchaser 
(i) the General Assignment, (ii) the other Assignment 
Instruments, and (iii)  if the PGE Colstrip Transmission Assets 
are not conveyed to Purchaser at the Closing, Seller and 
Purchaser shall have entered into the Separation Document.

VI.11  Colstrip Operations Arrangements

     There shall be in effect (a) arrangements reasonably 
satisfactory to Purchaser pursuant to which Purchaser shall be 
the operator of the entire Colstrip generating facility for a 
period of at least ten (10) years after the Closing, subject 
only to removal for cause or (b) such other arrangements with 
respect to the operation of the Colstrip generating facility as 
are reasonably acceptable to Purchaser.

VI.12  Purchaser Financing

     Purchaser's obligation to purchase the PGE Colstrip 
Transmission Assets at the Closing is subject to the receipt by 
Purchaser, on or prior to the Closing, of the Purchaser 
Financing or other financing reasonably satisfactory to 
Purchaser.	

VI.13   Opinion of Counsel

     Purchaser shall have received the opinion of (i) LeBoeuf, 
Lamb, Greene & MacRae, L.L.P., counsel to Seller, dated as of 
the Closing, substantially in the form and to the effect of 
Exhibit G-1 hereto, (ii) General Counsel of Seller, dated as of 
the Closing, substantially in the form and to the effect of 
Exhibit G-2 hereto, and (iii) outside Montana counsel to Seller, 
dated as of the Closing, substantially in the form and to the 
effect of Exhibit G-3 hereto. 

VI.14  Transfer of MPC Generation Assets

     That portion of the Generation Assets (as such term is 
defined in the MPC Purchase Agreement) to be transferred to 
Purchaser at the Closing under the MPC Purchase Agreement 
consisting of, at a minimum, (i) Corette, (ii) MPC's undivided 
interest in Colstrip 1, 2, and 3, and (iii) the Missouri/Madison 
Hydro Units with Basin/Idaho/BPA Power Contracts (in each case 
of (i), (ii), and (iii), as such terms are defined in the MPC 
Purchase Agreement shall have been purchased by Purchaser, 
unless such purchase has not occurred solely as a result of a 
breach by Purchaser of the MPC Purchase Agreement.

6.15  Transmission Agreements

     If the PGE Colstrip Transmission Assets are not conveyed to 
Purchaser at Closing, then (i) Seller and Purchaser shall have 
entered into a Transmission Service Agreement, (ii) MPC shall 
have purchased the PGE Colstrip Transmission Assets, or (iii) 
other arrangements reasonably satisfactory to Purchaser shall 
have been entered into with respect to the transmission of 
electric energy for the PGE Colstrip Interests.


                       ARTICLE VII

            CONDITIONS TO OBLIGATIONS OF SELLER

     The obligations of Seller hereunder to sell the Assets are 
subject to the fulfillment, at or before the Closing, of each of 
the following conditions (all or any of which may be waived in 
whole or in part by Seller in its sole discretion):

VII.1  Representations and Warranties

     The representations and warranties made by Purchaser in 
this Agreement and the Operative Agreements, taken as a whole, 
shall be true and correct, in all material respects on and as of 
the Closing as though repeated on and as of the Closing.

VII.2  Performance

     Purchaser shall have performed and complied with, in all 
material respects, the agreements, covenants and obligations 
required by this Agreement to be so performed or complied with 
by Purchaser at or before the Closing.

VII.3  Officers' Certificates

     Purchaser shall have delivered to Seller a certificate, 
dated as of the Closing and executed by the Chairman of the 
Board, the President or any Executive or Senior Vice President 
of Purchaser, substantially in the form and to the effect of 
Exhibit H hereto, and a certificate, dated as of the Closing and 
executed by the Secretary or any Assistant Secretary of 
Purchaser, substantially in the form and to the effect of 
Exhibit I hereto.

VII.4  Orders and Laws

     There shall not be in effect on the date of the Closing any 
Order or Law restraining, enjoining or otherwise prohibiting or 
making illegal the consummation of any of the transactions 
contemplated by this Agreement or any of the Operative 
Agreements.

VII.5  Regulatory Consents and Approvals

     Subject to Section 1.10, all Seller Required Regulatory 
Approvals and Purchaser Required Regulatory Approvals shall have 
been duly obtained, made or given and shall be in full force and 
effect and shall be a Final Order, and all terminations or 
expirations of waiting periods imposed by any Governmental or 
Regulatory Authority necessary for the consummation of the 
transactions contemplated by this Agreement and the Operative 
Agreements, including under the HSR Act, shall have occurred.

VII.6  Third Party Consents

     The consents (or in lieu thereof waivers) listed in 
Section 7.06 of the Disclosure  Schedule shall have been 
obtained and shall be in full force and effect and shall be 
reasonably satisfactory to Seller.

VII.7  Opinion of Counsel

     Seller shall have received the opinions of  (i) Winthrop, 
Stimson, Putnam & Roberts, counsel to Purchaser, dated as of the 
Closing, substantially in the form and to the effect of 
Exhibit J hereto, and (ii) internal counsel to Parent, under 
Pennsylvania laws and the federal laws of the United States, 
dated as of the Closing, with respect to the due authorization, 
execution, delivery and enforceability of the Contribution 
Agreement.  Such counsel's opinion as provided for in clause (i) 
in the preceding sentence need not cover any matter contained in 
the opinions required by Exhibit J to the extent such matter 
involves the laws of Montana, Oregon, Washington, Pennsylvania 
or any other jurisdiction other than the federal laws of the 
United States or the laws of the State of New York, and, in lieu 
thereof, Seller shall have received the opinions of counsel 
admitted in such other jurisdictions covering such matter.

VII.8  No Purchaser Material Adverse Effect

     There shall not have occurred and be continuing a Purchaser 
Material Adverse Effect.

VII.9  Proceedings

     All corporate and other proceedings to be taken by 
Purchaser in connection with the transactions contemplated 
hereby and all documents incident thereto shall be reasonably 
satisfactory in form and substance to Seller and its counsel and 
Seller and its counsel shall have received all such certified or 
other copies of such documents as it or they may reasonably 
request.

VII.10  Colstrip Rights of First Refusal

     Seller shall have either received the consents required 
under each of the Colstrip Rights of First Refusal or the 
exercise periods of such Colstrip Rights of First Refusal shall 
have expired.

VII.11  Deliveries

     Purchaser shall have delivered to Seller (i) the Assumption 
Agreement and (ii) the other Assumption Instruments. 

VII.12  Transmission Agreements

     If the PGE Colstrip Transmission Assets are not conveyed to 
Purchaser at Closing, then (i) Seller and Purchaser shall have 
entered into a Transmission Service Agreement, (ii) MPC shall 
have purchased the PGE Colstrip Transmission Assets, or (iii) 
other arrangements reasonably satisfactory to Seller shall have 
been entered into with respect to the transmission of electric 
energy for the PGE Colstrip Interests.

                        ARTICLE VIII

              TAX MATTERS AND POST-CLOSING TAXES


VIII.1  Transfer Taxes

     All Transfer Taxes incurred in connection with this 
Agreement and the transactions contemplated hereby shall be 
borne by Purchaser, and Purchaser, at its own expense, will 
file, to the extent required by applicable Law, all necessary 
Tax Returns and other documentation with respect to all such 
Transfer Taxes, and, if required by applicable Law, Seller will 
join in the execution of any such Tax Returns or other 
documentation and will take such positions therein as are 
reasonably requested by Purchaser.  Nothing in the foregoing 
sentence shall require Seller to take a position adverse to its 
own posture with regard to Taxes.  Prior to the Closing, 
Purchaser will provide to Seller, to the extent possible, an 
appropriate certificate from each applicable taxing authority to 
the effect that no Transfer Tax will be incurred in connection 
with this Agreement and the transactions contemplated hereby.

VIII.2  Returns with respect to Prorated Taxes

     With respect to those Taxes to be prorated in accordance 
with Section 1.06 of this Agreement, Purchaser shall prepare and 
timely file all Tax Returns required to be filed after the 
Closing with respect to the Assets and shall duly and timely pay 
all such Taxes shown to be due on such Tax Returns. Purchaser's 
preparation of any such Tax Return shall be subject to Seller's 
approval, which approval shall not be unreasonably withheld. 
Purchaser shall make such Tax Returns available for Seller's 
review and approval no later than twenty (20) Business Days 
prior to the due date for filing such Tax Return. Within fifteen 
(15) Business Days after receipt of such Tax Return, Seller 
shall pay to Purchaser its proportionate share of the amount 
shown as due on such Tax Return determined in accordance with 
Section 1.06 of this Agreement.

                        ARTICLE IX

            SURVIVAL; NO OTHER REPRESENTATIONS

IX.1  Survival of Representations, Warranties, Covenants and 
Agreements

     (a)  Subject to Section 11.02, the representations and 
warranties of Purchaser and Seller (other than the 
representations and warranties, (x) contained in Section 2.06 
(the "Tax Representation") which shall survive for the 
applicable period of the applicable statute of limitation), and 
(y) contained in Section 2.09(b) (the "Title Representation") 
which shall survive the Closing indefinitely) (all of the 
representations and warranties of Purchaser and Seller, 
excluding the Tax Representation and the Title Representation, 
are hereinafter referred to as the "General Representations"), 
shall survive the Closing for a period of twelve (12) months; 
provided, however, if Purchaser (or any successor or assign of 
Purchaser) procures title insurance with respect to the Real 
Property, to the extent that Purchaser (or any successor or 
assign of Purchaser) actually receives proceeds from the title 
insurer in respect of any matters addressed by any of the 
representations and warranties contained in Section 2.09, then, 
only with respect to such matters, and only to such extent, such 
representations and warranties shall be deemed not to have been 
made;

     (b)  Subject to Section 11.02, the covenants and agreements 
of Seller and Purchaser contained in this Agreement (other than 
the covenants and agreements contained in Articles IV (excluding 
Section 4.08) and V (excluding Section 5.06) (the "Pre-Closing 
Covenants"), which covenants and agreements shall survive the 
Closing for a period of twelve (12) months) (all of the 
covenants and agreements of Purchaser and Seller, excluding the 
Pre-Closing Covenants, are hereinafter referred to as the "Post-
Closing Covenants"), shall survive the Closing indefinitely; and

     (c)  Any due diligence or other investigation or 
examination by any party with respect to the transactions 
contemplated by this Agreement shall not in any way affect or 
lessen the representations and warranties of the other party 
contained herein or the indemnifications with respect thereto.

IX.2  No Other Representations

     Notwithstanding anything to the contrary contained in this 
Agreement, it is the explicit intent of each party hereto that 
Seller is making no representation or warranty whatsoever, 
express or implied, including but not limited to any implied 
representation or warranty as to condition, merchantability or 
suitability as to any of the Assets, except those 
representations and warranties contained in this Agreement and 
the exhibits, schedules, documents, certificates and instruments 
delivered in connection with the Closing.  In particular, Seller 
makes no representation or warranty to Purchaser with respect to 
(i) the information set forth in the Confidential Information 
Memorandum dated March 1998 and the supplements thereto, or (ii) 
any financial projection or forecast relating to the PGE 
Colstrip Interests or the Colstrip Facilities. With respect to 
any such projection or forecast delivered by or on behalf of 
Seller to Purchaser, Purchaser acknowledges that (i) there are 
uncertainties inherent in attempting to make such projections 
and forecasts, (ii) it is familiar with such uncertainties, 
(iii) it is taking full responsibility for making its own 
evaluation of the adequacy and accuracy of all such projections 
and forecasts furnished to it and (iv) it shall have no claim 
against Seller with respect to such projections and forecasts.

                       ARTICLE X

                    INDEMNIFICATION

X.1  Other Indemnification

     (a)  Subject to the other Sections of this Article X, 
Seller shall indemnify Purchaser and its Affiliates and their 
respective directors, officers, employees, agents and 
representatives ("Purchaser Group") in respect of, and hold 
Purchaser Group harmless from and against, any and all Losses 
suffered, incurred or sustained by Purchaser Group or to which 
Purchaser Group becomes subject, resulting from, arising out of 
or relating to:

          (i)  any breach by Seller of any representation or 
warranty of Seller contained in this Agreement (determined in 
all cases as if the terms "material" or "materially" or the 
capitalized versions thereof, were not included therein);

          (ii)  any breach by Seller of any covenant or 
agreement of Seller contained in this Agreement (determined in 
all cases as if the terms "material" or "materially" (or the 
capitalized versions thereof) were not included therein); or

          (iii)  Retained Liability;

provided, however, that Seller shall have no liability for 
Losses under clause (i) arising from a breach of a General 
Representation or the Tax Representation unless and until the 
aggregate amount of all Losses arising from such breaches 
asserted by Purchaser equals or exceeds $1,000,000 in which 
event Seller shall be liable for all such Losses; and provided, 
further, that, except with respect to Losses arising from a 
breach of the Title Representation, such indemnification shall 
be effective only with respect to claims written notice of which 
is received by Seller with respect to Losses arising under 
clause (i) above relating to General Representations (or, with 
respect to the Tax Representation, the date upon which the 
applicable statute of limitations expires) or clause (ii) above 
relating to Pre-Closing Covenants, no later than the date that 
is twelve (12) months from the Closing.  Except as set forth in 
paragraph (b) below in, no event shall the Liability of Seller 
for Losses under clause (i) of this Section 10.01(a) arising out 
of breaches of the General Representations exceed, in the 
aggregate, fifty percent (50%) of the Purchase Price, (or, with 
respect to breaches of the Title Representation and the 
covenants contained in Sections 1.01(a)(i) and 1.05 exceed, in 
the aggregate, the Purchase Price).

     (b)  In addition to the indemnities contained in clause (a) 
above, Seller shall indemnify Purchaser Group in respect of, and 
hold it harmless from and against, all Losses suffered, incurred 
or sustained by Purchaser Group arising from any Pre-Closing 
Environmental Liability; provided, however, that 
(1) indemnification for Pre-Closing Unknown Remedial Liabilities 
shall be effective only with respect to Losses arising out of a 
matter described in a Claim Notice received by Seller no later 
than the date that is two years from the Closing, (2) Seller's 
Liabilities under this paragraph for Pre-Closing Known and 
Unknown Remedial Liabilities shall be limited in each case to 
Seller's pro rata share (calculated pursuant to the Colstrip 
Contracts) of fifty percent (50%) of any such Loss suffered, 
incurred or sustained by Purchaser Group, and shall not, in any 
event, exceed, in the aggregate, an amount equal to ten percent 
(10%) of the Purchase Price (each such Liability of Seller shall 
be paid by it at the same time that Purchaser Group has paid its 
fifty percent (50%) share thereof); provided, further, that this 
indemnity shall only extend to such Pre-Closing Environmental 
Liabilities attributable to conditions existing at or prior to 
the Closing, and Seller shall not be required to indemnify 
Purchaser for Losses to the extent attributable to acts or 
omissions of Purchaser resulting in an increase in or 
aggravation of such Environmental Liabilities, whether arising 
from a change in use of the Assets or otherwise.  In the event 
that Seller disputes the pro rata share of any Losses 
attributable by Purchaser to Seller under this Section 
10.01(b)(2) in the Claim Notice, Seller will nevertheless pay 
Purchaser the amount requested by Purchaser in the Claim Notice 
and Seller shall proceed to resolve any dispute with MPC and 
Puget concerning allocations of pro rata shares.  If Purchaser 
fails to make a claim against a Potentially Responsible Party 
with respect to Pre-Closing Environmental Liabilities, then upon 
making an indemnity payment pursuant to this paragraph (b), 
Seller shall, to the extent of such indemnity payment, be 
subrogated to all rights of Purchaser against any Potentially 
Responsible Party in respect of the Losses to which the 
indemnity payment relates. If Purchaser makes a claim against, 
and recovers from, a Potentially Responsible Party with respect 
to Pre-Closing Environmental Liabilities and Seller has made an 
indemnity payment with respect to such Loss, then Purchaser 
shall reimburse Seller fifty percent (50%) of such amounts 
recovered, net of any third party costs of collection.

     (c)  Subject to the other Sections of this Article X, 
Purchaser shall indemnify Seller and its Affiliates and their 
respective directors, officers, employees, agents and 
representatives ("Seller Group") in respect of, and hold Seller 
Group harmless from and against, any and all Losses suffered, 
incurred or sustained by Seller Group or to which Seller Group 
becomes subject, resulting from, arising out of or relating to:  

          (i)  any breach by Purchaser of any representation or 
warranty of Purchaser contained in this Agreement (determined in 
all cases as if the terms "material" or "materially" (or the 
capitalized versions thereof), were not included therein);

          (ii)  any breach by Purchaser of any covenant or 
agreement of Purchaser contained in this Agreement (determined 
in all cases as if the terms "material" or "materially" (or the 
capitalized versions thereof) were not included therein); or

          (iii)  an Assumed Liability; provided, however, that 
Purchaser shall have no liability for Losses under clause (i) 
arising from a breach of a General Representation unless and 
until the aggregate amount of all such Losses arising from such 
breaches asserted by Seller equals or exceeds $1,000,000 in 
which event Purchaser shall be liable for all Losses; and 
provided, further, that such indemnification shall be effective 
only with respect to claims written notice of which is received 
by Purchaser with respect to Losses arising under clause (i) 
above relating to General Representations or clause (ii) above 
relating to Pre-Closing Covenants, no later than the date that 
is twelve (12) months from the Closing.  In no event shall the 
Liability of Purchaser for Losses under this Article X arising 
out of breaches of the General Representations exceed, in the 
aggregate, fifty percent (50%) of the Purchase Price.

     (d)  To the extent that an Indemnified Party has received 
insurance proceeds prior to the payment of an indemnity payment 
on an indemnifiable Loss, such indemnifiable Loss shall be 
reduced by an amount equal to such proceeds received by the 
Indemnified Party.  If the amount of any indemnifiable Loss, at 
any time subsequent to the making of an indemnity payment in 
respect thereof, is reduced by recovery, settlement or otherwise 
under or pursuant to any insurance coverage or pursuant to any 
claim, recovery, settlement or payment by or against any other 
entity, the amount of such reduction, less any costs, expenses 
or premiums incurred in connection therewith (together with 
interest thereon from the date of payment thereof at the prime 
rate then in effect for domestic banks as published in the Wall 
Street Journal (Northeast Edition) in the "Money Rates" 
section), shall promptly be repaid by the Indemnified Party to 
the Indemnifying Party.  Nothing in this Section 10.01(d) shall 
be construed to require any party hereto to obtain or maintain 
any insurance coverage or make any claim under its insurance 
coverage.

     (e)  Seller shall not be liable on account of any 
obligations of any co-owners of the Colstrip Facilities to 
Purchaser. 

     (f)  Except as expressly provided above in this Section 
10.01, the Indemnifying Party hereby expressly waives all rights 
of subrogation in respect of any payments made by it under this 
Article X.

X.2  Method of Asserting Claims

     All claims for indemnification by any Indemnified Party 
under Section 10.01 will be asserted and resolved as follows:

     (a)  In the event any claim or demand in respect of which 
an Indemnified Party might seek indemnity under Section 10.01 is 
asserted against or sought to be collected from such Indemnified 
Party by a Person other than Seller, Purchaser or any Affiliate 
of Seller or Purchaser (a "Third Party Claim"), the Indemnified 
Party shall deliver a Claim Notice with reasonable promptness to 
the Indemnifying Party. The Indemnifying Party will notify the 
Indemnified Party as soon as practicable within the Dispute 
Period whether the Indemnifying Party disputes its liability to 
the Indemnified Party under Section 10.01 and whether the 
Indemnifying Party desires, at its sole cost and expense, to 
defend the Indemnified Party against such Third Party Claim.

          (i)  If the Indemnifying Party notifies the 
Indemnified Party within the Dispute Period that the 
Indemnifying Party desires to defend the Indemnified Party with 
respect to the Third Party Claim pursuant to this 
Section 10.02(a), then the Indemnifying Party will have the 
right to defend, at the sole cost and expense of the 
Indemnifying Party, such Third Party Claim by all appropriate 
proceedings, which proceedings will be vigorously and diligently 
prosecuted by the Indemnifying Party to a final conclusion or 
will be settled at the discretion of the Indemnifying Party 
(with the consent of the Indemnified Party, which consent will 
not be unreasonably withheld).  The Indemnifying Party will have 
full control of such defense and proceedings, including any 
settlement thereof; provided, however, that the Indemnified 
Party may, at the sole cost and expense of the Indemnified 
Party, at any time prior to the Indemnifying Party's delivery of 
the notice referred to in the first sentence of this 
Section 10.02(a)(i), file any motion, answer or other pleadings 
or take any other action that the Indemnified Party reasonably 
believes to be necessary or appropriate to protect its interests 
and not prejudicial to the Indemnifying Party (it being 
understood and agreed that, except as provided in clause 
(ii) below, if an Indemnified Party takes any such action that 
is prejudicial and causes a final adjudication that is adverse 
to the Indemnifying Party, the Indemnifying Party will be 
relieved of its obligations hereunder with respect to the 
portion of such Third Party Claim prejudiced by the Indemnified 
Party's action); and provided further, that if requested by the 
Indemnifying Party, the Indemnified Party will, at the sole cost 
and expense of the Indemnifying Party, cooperate with the 
Indemnifying Party and its counsel in contesting any Third Party 
Claim that the Indemnifying Party elects to contest, or, if 
appropriate and related to the Third Party Claim in question, in 
making any counterclaim against the Person asserting the Third 
Party Claim, or any cross-complaint against any Person (other 
than the Indemnified Party or any of its Affiliates). 
Notwithstanding the foregoing, the Indemnified Party may take 
over the control of the defense or settlement of a Third Party 
Claim at any time if it irrevocably waives its right to 
indemnity under Section 10.01 with respect to such Third Party 
Claim.

          (ii)  If the Indemnifying Party fails to notify the 
Indemnified Party within the Dispute Period that the 
Indemnifying Party desires to defend the Third Party Claim 
pursuant to Section 10.02(a), or if the Indemnifying Party gives 
such notice but fails to prosecute vigorously and diligently or 
settle the Third Party Claim, or if the Indemnifying Party fails 
to give any notice whatsoever within the Dispute Period, then 
the Indemnified Party will have the right to defend, at the sole 
cost and expense of the Indemnifying Party, the Third Party 
Claim by all appropriate proceedings, which proceedings will be 
vigorously and diligently prosecuted by the Indemnified Party to 
a final conclusion or will be settled at the discretion of the 
Indemnified Party (with the consent of the Indemnifying Party, 
which consent will not be unreasonably withheld). The 
Indemnified Party will have full control of such defense and 
proceedings, including (except as provided in the immediately 
preceding sentence) any settlement thereof; provided, however, 
that if requested by the Indemnified Party, the Indemnifying 
Party will, at the sole cost and expense of the Indemnifying 
Party, cooperate with the Indemnified Party and its counsel in 
contesting any Third Party Claim which the Indemnified Party is 
contesting, or, if appropriate and related to the Third Party 
Claim in question, in making any counterclaim against the Person 
asserting the Third Party Claim, or any cross-complaint against 
any Person (other than the Indemnified Party or any of its 
Affiliates). Notwithstanding the foregoing provisions of this 
Section 10.02(a)(ii), if the Indemnifying Party has notified the 
Indemnified Party within the Dispute Period that the 
Indemnifying Party disputes its liability hereunder to the 
Indemnified Party with respect to such Third Party Claim and if 
such dispute is resolved in favor of the Indemnifying Party in 
the manner provided in clause (iii) below, the Indemnifying 
Party will not be required to bear the costs and expenses of the 
Indemnified Party's defense pursuant to this 
Section 10.02(a)(ii) or of the Indemnifying Party's 
participation therein at the Indemnified Party's request, and 
the Indemnified Party will reimburse the Indemnifying Party in 
full for all reasonable costs and expenses incurred by the 
Indemnifying Party in connection with such litigation. The 
Indemnifying Party may participate in, but not control, any 
defense or settlement controlled by the Indemnified Party 
pursuant to this Section 10.02(a)(ii), and the Indemnifying 
Party will bear its own costs and expenses with respect to such 
participation.

          (iii)  If the Indemnifying Party notifies the 
Indemnified Party that it does not dispute its liability to the 
Indemnified Party with respect to the Third Party Claim under 
Section 10.01 or fails to notify the Indemnified Party within 
the Dispute Period whether the Indemnifying Party disputes its 
liability to the Indemnified Party with respect to such Third 
Party Claim, the Loss in the amount specified in the Claim 
Notice will be conclusively deemed a liability of the 
Indemnifying Party under Section 10.01 and the Indemnifying 
Party shall pay the amount of such Loss to the Indemnified Party 
on demand.  If the Indemnifying Party has timely disputed its 
liability with respect to such claim, the Indemnifying Party and 
the Indemnified Party will proceed in good faith to negotiate a 
resolution of such dispute, and if not resolved through 
negotiations within the Resolution Period, such dispute shall be 
resolved by litigation in a court of competent jurisdiction.

     (b)  In the event any Indemnified Party should have a claim 
under Section 10.01 against any Indemnifying Party that does not 
involve a Third Party Claim, the Indemnified Party shall deliver 
an Indemnity Notice with reasonable promptness to the 
Indemnifying Party prior to the expiration of the 
indemnification notice period described in this Section 10.02.  
If the Indemnifying Party notifies the Indemnified Party that it 
does not dispute the claim described in such Indemnity Notice or 
fails to notify the Indemnified Party within the Dispute Period 
whether the Indemnifying Party disputes the claim described in 
such Indemnity Notice, the Loss in the amount specified in the 
Indemnity Notice will be conclusively deemed a liability of the 
Indemnifying Party under Section 10.01 and the Indemnifying 
Party shall pay the amount of such Loss to the Indemnified Party 
on demand.  If the Indemnifying Party disputes all or any 
portion of its liability with respect to such claim, it shall 
notify the Indemnified Party thereof in writing during the 
Dispute Period, specifying the portion of the claim that is 
disputed and the basis for such position.  If the Indemnifying 
Party has timely disputed its liability with respect to such 
claim, the Indemnifying Party will be deemed to have accepted 
and be liable for payment of the undisputed portion of such 
claim on demand and the Indemnifying Party and the Indemnified 
Party will proceed in good faith to negotiate a resolution of 
such dispute, and if not resolved through negotiations within 
the Resolution Period, such dispute shall be resolved by 
litigation in a court of competent jurisdiction.

     (c)  In the event of any Loss resulting from a 
misrepresentation, breach of warranty or nonfulfillment or 
failure to be performed of any covenant or agreement contained 
in this Agreement as to which an Indemnified Party would be 
entitled to claim indemnity under Section 10.01 but for the Loss 
limitation provisions of Section 10.01(a) and (c), such 
Indemnified Party may nevertheless deliver a written notice to 
the Indemnifying Party containing the information that would be 
required in a Claim Notice or an Indemnity Notice, as 
applicable, with respect to such Loss. In the case of a Claim 
Notice, the provisions of Section 10.02(a)(i) will be 
applicable. If the Indemnifying Party notifies the Indemnified 
Party that it does not dispute the claim described therein or 
fails to notify the Indemnified Party within the Dispute Period 
whether the Indemnifying Party disputes the claim described in 
such Claim Notice or Indemnity Notice, as the case may be, the 
Loss specified in the notice will be conclusively deemed to have 
been incurred by the Indemnified Party for purposes of making 
the determination of the Loss limitations set forth in 
Section 10.01. If the Indemnifying Party has timely disputed the 
claim described in such Claim Notice or Indemnity Notice, as the 
case may be, the Indemnifying Party and the Indemnified Party 
will proceed in good faith to negotiate a resolution of such 
dispute, and if not resolved through negotiations within the 
Resolution Period, such dispute shall be resolved by litigation 
in a court of competent jurisdiction.

     (d)  In the event of any claim for indemnity under 
Section 10.01(a), Purchaser agrees to give Seller and its 
Representatives reasonable access to the Books and Records and 
Employees in connection with the matters for which 
indemnification is sought to the extent Seller reasonably deems 
necessary in connection with its rights and obligations under 
this Article X.

     (e)  All payments made pursuant to this Article X shall be 
treated as an adjustment to the Purchase Price.

     (f)  In the event an action, dispute, claim, counterclaim 
or controversy ("Dispute") arises between the parties arising 
out of or relating to this Agreement, the aggrieved party shall 
promptly notify the other party of the Dispute within ten 
Business Days after such Dispute arises. If the parties have 
failed to resolve the Dispute within ten Business Days after 
delivery of such notice, each party shall, within five Business 
Days thereafter, nominate a senior officer of its management to 
meet to attempt to resolve the Dispute. The senior officers 
shall meet within twenty Business Days after their nomination. 
Should the senior officers be unable to resolve the Dispute, 
either party may pursue any and all available legal remedies, 
unless the parties mutually agree in writing to an alternative 
dispute resolution procedure.

X.3  Exclusivity

     After the Closing, to the extent permitted by Law, the 
indemnities set forth in this Article X shall be the exclusive 
remedies of Purchaser Group and Seller Group, or any member of 
either of them, for any misrepresentation, breach of warranty or 
nonfulfillment or failure to be performed of any covenant or 
agreement contained in this Agreement, any schedule hereto, or 
any certificate delivered by or on behalf of Seller or Purchaser 
in connection herewith, and the parties shall not be entitled to 
a rescission of this Agreement or to any further indemnification 
rights or claims of any nature whatsoever in respect thereof, 
all of which the parties hereto hereby waive.

X.4  Purchaser's Release of Seller Under the Colstrip Contracts

     From and after the Closing, Purchaser, for itself and on 
behalf of its Affiliates, does hereby release, hold harmless and 
forever discharge Seller and its Affiliates from any and all 
claims, demands, liabilities (including fines and civil 
penalties) or causes of action at Law or in equity, whether 
known or unknown, resulting from any claim that Seller is not 
released from its obligations under the Colstrip Contracts by 
virtue of Sections 1.01(a)(xi) and 1.02(a)(v); provided, 
however, that nothing in this Section 10.04 shall be deemed to 
affect Seller's Retained Liabilities, Purchaser's Assumed 
Liabilities or the parties' indemnification obligations 
hereunder.

                        ARTICLE XI

                        TERMINATION

XI.1  Termination

     This Agreement may be terminated, and the transactions 
contemplated hereby may be abandoned:

     (a)  at any time before the Closing, by mutual written 
agreement of Seller and Purchaser; or

     (b)  at any time before the Closing, by Seller or 
Purchaser, in the event that any Final Order or Law becomes 
effective restraining, enjoining, or otherwise prohibiting or 
making illegal the consummation of any of the transactions 
contemplated by this Agreement or any of the Operative 
Agreements, upon notification of the non-terminating party by 
the terminating party; or

     (c)  at any time before the Closing, by Seller or 
Purchaser, in the event (i) of a breach hereof by the non-
terminating party which gives rise to, as applicable, either a 
Seller Material Adverse Effect (if Seller is the breaching 
party) or a Purchaser Material Adverse Effect (if Purchaser is 
the breaching party) if such non-terminating party fails to cure 
such breach within forty-five (45) days following notification 
thereof by the terminating party, provided that if, at the end 
of such forty-five (45) day period, the non-terminating party is 
endeavoring in good faith, and proceeding diligently, to cure 
such breach, the non-terminating party shall have an additional 
forty-five (45) days in which to effect such cure or (ii) upon 
notification of the non-terminating party by the terminating 
party that the satisfaction of any condition to the terminating 
party's obligations under this Agreement becomes impossible or 
impracticable with the use of commercially reasonable efforts if 
the failure of such condition to be satisfied by the terminating 
party is not caused by a breach hereof by the terminating party, 
provided that if it is reasonably possible that the 
circumstances giving rise to the impossibility or 
impracticability may be removed prior to the expiration of the 
time periods provided in the following subsection (d), then such 
notification may not be given until such time as the removal of 
such circumstances is no longer reasonably possible within such 
time periods; or 

     (d)  at any time after the date which is twelve (12) months 
after the date of this Agreement, by Seller or Purchaser upon 
notification of the non-terminating party by the terminating 
party if the Closing shall not have occurred on or before such 
date and such failure to consummate is not caused by a breach of 
this Agreement by the terminating party; provided, however, that 
if on such date Purchaser and Seller have not received all 
Purchaser Required Regulatory Approvals and all Seller Required 
Regulatory Approvals but all other conditions to the Closing 
shall be fulfilled or shall be capable of being fulfilled, then 
neither party may terminate this Agreement until the expiration 
of such date which is eighteen (18) months after the date of 
this Agreement, provided further, that if on such date Purchaser 
or MPC has not received all Purchaser Required Regulatory 
Approvals or all Seller Required Regulatory Approvals (in each 
case as defined in the MPC Purchase Agreement) related to the 
Hydro Units (as defined in the MPC Purchase Agreement) but all 
other conditions to the Closing shall be fulfilled or shall be 
capable of being fulfilled, then neither party may terminate 
this Agreement until the expiration of the date which is twenty-
four (24) months after the date of this Agreement.

XI.2  Effect of Termination

     If this Agreement is validly terminated pursuant to 
Section 11.01, this Agreement will forthwith become null and 
void, and there will be no liability or obligation on the part 
of Seller or Purchaser (or any of their respective officers, 
directors, employees, agents or other representatives or 
Affiliates), except as provided in the next succeeding sentence 
and except that the provisions with respect to expenses in 
Section 13.04 and confidentiality in Section 13.06 will continue 
to apply following any such termination. Notwithstanding any 
other provision in this Agreement to the contrary, upon 
termination of this Agreement pursuant to Section 11.01(c) or 
(d), Seller will remain liable to Purchaser for any willful 
breach of Section 4.09 of this Agreement by Seller existing at 
the time of such termination, and Purchaser will remain liable 
to Seller for any willful breach of Section 5.05 of this 
Agreement by Purchaser existing at the time of such termination, 
and Seller or Purchaser may seek such remedies, including 
damages and fees of attorneys, against the other with respect to 
any such breach as are provided in this Agreement or as are 
otherwise available at Law or in equity.

                        ARTICLE XII

                        DEFINITIONS

XII.1  Definitions

     (a)  Defined Terms.  As used in this Agreement, the 
following defined terms have the meanings indicated below:

     "Actions or Proceedings" means any action, suit, 
proceeding, arbitration or Governmental or Regulatory Authority 
investigation.

     "Adjustment Amount" has the meaning ascribed to it in 
Section 1.04.

     "Adjustment Statement" has the meaning ascribed to it in 
Section 1.04.

     "Affiliate" means any Person that directly, or indirectly 
through one of more intermediaries, controls or is controlled by 
or is under common control with the Person specified. For 
purposes of this definition, control of a Person means the 
power, direct or indirect, to direct or cause the direction of 
the management and policies of such Person whether by Contract 
or otherwise and, in any event and without limitation of the 
previous sentence, any Person owning ten percent (10%) or more 
of the voting securities of another Person shall be deemed to 
control that Person.

     "Agreement" means this Asset Purchase Agreement and the 
Exhibits, the Disclosure Schedule and the Schedules hereto and 
the certificates delivered in accordance with Sections 6.03 and 
7.03, as the same shall be amended from time to time.

     "Assets" has the meaning ascribed to it in Section 1.01(a).

     "Asset Group" means one or more of the categories of Assets 
set forth on Schedule I to the MPC Purchase Agreement.

     "Assets and Properties" of any Person means all assets and 
properties of every kind, nature, character and description 
(whether real, personal or mixed, whether tangible or intangible 
and wherever situated), including the goodwill related thereto, 
operated, owned or leased by such Person.

     "Assignment Instruments" has the meaning ascribed to it in 
Section 1.05.

     "Associate" means, with respect to any Person, any 
corporation or other business organization of which such Person 
is an officer or partner or is the beneficial owner, directly or 
indirectly, of ten percent (10%) or more of any class of equity 
securities, any trust or estate in which such Person has a 
substantial beneficial interest or as to which such Person 
serves as a trustee or in a similar capacity and any relative or 
spouse of such Person, or any relative of such spouse, who has 
the same home as such Person.

     "Assumed Liabilities" has the meaning ascribed to it in 
Section 1.02(a).

     "Assumption Agreement" has the meaning ascribed to it in 
Section 1.05.

     "Assumption Instruments" has the meaning ascribed to it in 
Section 1.05.

     "Base Purchase Price" means an amount equal to 
$192,979,000.

     "Bid Date" means September 28, 1998.

     "Books and Records" of any Person means all files, 
documents, instruments, papers, books and records relating to 
the business, operations, condition of (financial or other), 
results of operations and Assets and Properties of such Person, 
including  financial statements, Tax Returns and related work 
papers and letters from accountants, budgets, pricing 
guidelines, ledgers, journals, deeds, title policies, minute 
books, stock certificates and books, stock transfer ledgers, 
Contracts, Licenses, customer lists, computer files and 
programs, retrieval programs, operating data and plans and 
environmental studies and plans.

     "Budget" has the meaning ascribed to it in Section 4.13.

     "Business Combination" means with respect to any Person, 
any merger, consolidation or combination to which such Person is 
a party, any sale, dividend, split or other disposition of 
capital stock or other equity interests of such Person or any 
sale, dividend or other disposition of all or substantially all 
of the Assets and Properties of such Person, provided, however, 
that neither (i) a divestiture by Seller of all or part of its 
generating assets (provided, that no such divestiture will 
operate as a release of Seller from its obligations under this 
Agreement) nor (ii) any activities or transactions of any 
Affiliate of Seller (so long as not involving Seller), shall be 
considered a Business Combination hereunder.

     "Business Contracts" has the meaning ascribed to it in 
Section 1.01(a)(v).

     "Business Day" means a day other than Saturday, Sunday or 
any day on which banks located in the State of Oregon and the 
Commonwealth of Pennsylvania are authorized or obligated to 
close.

     "Capital Expenditures" means those capital expenditures 
which are identified in the Budget referred to in Section 4.13, 
and such other emergency, non-budgeted capital expenditures made 
by Seller in accordance with the provisions of Section 4.13.

     "CERCLA" means the Comprehensive Environmental Response, 
Compensation and Liability Act of 1980, as amended, and the 
rules and regulations promulgated thereunder.

     "Claim Notice" means written notification pursuant to 
Section 10.02(a) of a Third Party Claim as to which indemnity 
under Section 10.01 is sought by an Indemnified Party, enclosing 
a copy of all papers served, if any, and specifying the nature 
of and basis for such Third Party Claim and for the Indemnified 
Party's claim against the Indemnifying Party under 
Section 10.01, together with the amount or, if not then 
reasonably ascertainable, the estimated amount, determined in 
good faith, of such Third Party Claim.

     "Closing" means the closing of the transactions 
contemplated by Section 1.05.

     "Closing Date" means (a) the later of (x) July 1, 1999 and 
(y) the date thirty (30) days after the day on which the last of 
the consents, approvals, actions, filings, notices or waiting 
periods described in or related to the filings described in 
Sections 6.04 through 6.07 and Sections 7.04 through 7.06 has 
been obtained, made or given or has expired, as applicable; 
provided, that Purchaser agrees to use reasonable efforts to be 
prepared to close prior to July 1, 1999, and shall give notice 
to Seller in the event Purchaser determines that it is able to 
do so, or (b) such other date as Purchaser and Seller mutually 
agree upon in writing.

     "Code" means the Internal Revenue Code of 1986, as amended, 
and the rules and regulations promulgated thereunder.

     "Colstrip Books and Records" has the meaning ascribed to it 
in Section 1.01(a)(xiv).

     "Colstrip Contracts" has the meaning ascribed to it in 
Section 1.01(a)(xi).

     "Colstrip Facilities" means the thermal electric generating 
facilities known as Colstrip Units 3 & 4 located near Colstrip, 
Montana, including the Common Facilities (as defined in the 
Colstrip Contracts) and the PGE Colstrip Transmission Assets..

     "Colstrip Rights of First Refusal" means the rights 
described in the following agreements:  (i) Sections 24(b) and 
24(f) of the Ownership and Operation Agreement, dated as of 
May 6, 1981, as amended, by and among Seller, MPC, WWP, Puget, 
and Pacific Power & Light Company ("Pacific"); and (ii) 
Section 28(f) of the Colstrip Project Transmission Agreement, 
dated as of May 6, 1981, as amended, by and among Seller, MPC, 
WWP, Puget and Pacific.

     "Contract" means any agreement, lease, license, evidence of 
Indebtedness, mortgage, indenture, security agreement or other 
contract.

     "Contribution Agreement" has the meaning ascribed to it in 
the forepart of this Agreement.

     "Disclosure Schedule" means, as the context requires, 
(a) the record delivered to Purchaser by Seller herewith and 
dated as of the date hereof, containing all lists, descriptions, 
exceptions and other information and materials as are required 
to be included therein by Seller pursuant to this Agreement and 
(b) the record delivered to Seller by Purchaser herewith and 
dated as of the date hereof, containing all lists, descriptions, 
exceptions and other information and materials as are required 
to be included therein by Purchaser pursuant to this Agreement.

     "Dispute" has the meaning ascribed to it in 
Section 10.02(f).

     "Dispute Period" means the period ending thirty (30) days 
following receipt by an Indemnifying Party of either a Claim 
Notice or an Indemnity Notice.

     "Easements" means, with respect to the Assets, the 
reservations of easements in favor of Seller to be included in 
the deeds of conveyance with respect to such Assets, 
substantially as set forth in Section 12.01(b) of the Disclosure 
Schedule.

     "Employee" means each employee or officer of Seller, 
Purchaser or MPC, as the context may require, or any of their 
Affiliates, whose employment responsibilities relate to the PGE 
Colstrip Interests or the Colstrip Facilities.  

     "Environmental Fines and Penalties" has the meaning 
ascribed to it in Section 1.02(a)(vii).

     "Environmental Law" means all Federal, state, municipal and 
local laws (including common laws), regulations, rules, 
ordinances, codes, licenses, decrees, judgments, directives, or 
judicial or administrative orders relating to pollution, 
protection, preservation or restoration of human health, the 
environment or natural resources, including, without limitation, 
laws relating to Releases or threatened Releases of Hazardous 
Materials (including, without limitation, into or through 
ambient air, surface water, groundwater, land, wetlands, surface 
and subsurface strata), or otherwise relating to the 
manufacture, processing, distribution, use, treatment, storage, 
disposal, transport or handling of Hazardous Materials, 
including without limitation the Clean Water Act, the Clean Air 
Act, the Resource Conservation and Recovery Act, the Toxic 
Substances Control Act, and CERCLA, in each case as amended, and 
their local counterparts.

     "Environmental Liabilities" means any liabilities, 
obligations or responsibilities under or related to former, 
current or future Environmental Laws, or the common law, whether 
such liability, obligation or responsibility is known or 
unknown, contingent or accrued, arising as a result of or in 
connection with (a) any violation or alleged violation of 
Environmental Laws relating to the Assets; (b) compliance with 
applicable Environmental Laws relating to the Assets; (c) loss 
of life, injury to persons or property or damage to natural 
resources (whether or not such loss, injury or damage was made 
manifest before or after the Closing) caused (or allegedly 
caused) by the presence or Release of Hazardous Materials at, 
on, in, under, adjacent to or migrating from the Assets; and (d) 
the reasonable investigation and/or remediation required by Law 
or constituting a reasonable response to a Governmental or 
Regulatory Authority having jurisdiction (whether or not such 
investigation or remediation commenced on or before the Closing) 
of Hazardous Materials that are present or have been Released 
at, on, in, under, adjacent to or migrating from the Assets, 
including, but not limited to, Hazardous Materials in the soil, 
surface water, sediments, groundwater, landfill cells, or in 
other environmental media at or adjacent to the Assets 
("Remedial Liabilities"); provided further that the liabilities, 
obligations or responsibilities described in clauses (a), (b) 
and (c) shall not include those described in clause (d); 
provided further that Environmental Liabilities shall not 
include (x) Purchaser's internal costs or consequential damages 
(including the value of employees' time, loss of use, downtime 
or increased operating costs); (y) costs of capital improvements 
(including the replacement of equipment that has reached its 
useful life); nor (z) monitoring required by environmental 
permits or the design of the Assets, except in the case of 
clauses (y) and (z), as covered in clause (d) above.

     "Environmental Permits" has the meaning ascribed in 
Section 2.15.

     "EPA" means the Environmental Protection Agency.

     "Estimated Adjustment Amount" means Seller's good faith 
reasonable estimate of an Adjustment Amount for the Closing, 
which estimate shall be provided to Purchaser no later than five 
Business Days before the Closing.

     "Estimated Purchase Price" has the meaning ascribed to it 
in Section 1.05.

     "Exchange Act" means the Securities Exchange Act of 1934, 
as amended, and the rules and regulations promulgated 
thereunder.

     "Excluded Assets" has the meaning ascribed to it in Section 
1.01(b).

     "Federal Power Act" means the Federal Power Act of 1935, as 
amended, and the rules and regulations promulgated thereunder.

     "FERC" means the Federal Energy Regulatory Commission.

     "Final Order" means a final Order after all opportunities 
for rehearing are exhausted (whether or not any appeal thereof 
is pending) that has not been further revised, stayed, enjoined, 
set aside, annulled or suspended, with respect to which any 
required waiting period has expired, and as to which all 
conditions to effectiveness prescribed therein or otherwise by 
Law, regulation or Order have been satisfied. 

     "Fuel Contracts" has the meaning ascribed to it in 
Section 1.01(a)(x).

     "GAAP" means generally accepted accounting principles, 
consistently applied throughout the specified period and in the 
immediately prior comparable period.

     "General Assignment" has the meaning ascribed to it in 
Section 1.05.

     "General Representations" has the meaning ascribed to it in 
Section 9.01(a).

     "Good Utility Practice" means any of the applicable 
practices, methods and acts:

          (i)  required of the party to whom Good Utility 
Practice is being applied under regulations of the National 
Electric Safety Code (as each of such terms is defined in the 
Interconnection Agreement (as such term is defined in the MPC 
Purchase Agreement)) or its successor, whether or not the party 
whose conduct is at issue is a member thereof; or

          (ii)  otherwise engaged in or approved by a 
significant portion of the electric utility industry during the 
relevant time period; which, in the exercise of reasonable 
judgment in light of the facts known at the time the decision 
was made, could have been expected to accomplish the desired 
result at a reasonable cost to the party being expected to apply 
Good Utility Practice, consistent with law, regulation, good 
business practices, generation, transmission, and distribution 
reliability, safety, and expedition.  Good Utility Practice is 
intended to include practices, methods, or acts generally 
accepted in the region, and is not intended to be limited to 
optimum practices, methods, or acts to the exclusion of all 
others.  Good Utility Practice does not include intentional 
disregard of contractual commitments, even if those commitments 
are uneconomic under current market conditions.

     "Governmental or Regulatory Authority" means any court, 
tribunal, arbitrator, authority, agency, commission, official or 
other instrumentality of the United States, any foreign country 
or any domestic or foreign state, county, city or other 
political subdivision or any Native American tribal council or 
similar governing entity.

     "Hazardous Material" means (A) any petrochemical, petroleum 
or petroleum products, oil, flammable explosives, radioactive 
materials, radon gas, asbestos in any form that is or could 
become friable, urea formaldehyde foam insulation and 
transformers or other equipment that contain dielectric fluid 
which may contain levels of polychlorinated biphenyls (PCBs); 
(B) any chemicals or other materials or substances which are now 
or hereafter become defined under any Environmental Law as or 
included in the definition of "hazardous substances," "hazardous 
wastes," "hazardous chemicals," "hazardous materials," 
"extremely hazardous wastes," "restricted hazardous wastes," 
"toxic substances," "pollutants," "contaminants," "hazardous 
matter," "restricted hazardous materials" or words of similar 
import ; and (C) any other chemical or other material or 
substance, the discharge, emission, Release or exposure to which 
is now or hereafter prohibited, limited or regulated by any 
Governmental or Regulatory Authority under any Environmental 
Law.

     "Holding Company Act" means the Public Utility Holding 
Company Act of 1935, as amended, and the rules and regulations 
promulgated thereunder.

     "HSR Act" means Section 7A of the Clayton Act (Title II of 
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as 
amended) and the rules and regulations promulgated thereunder.

     "Improvements" has the meaning ascribed to it in 
Section 1.01(a)(iv).

     "Indebtedness" of any Person means all obligations of such 
Person (i) for borrowed money, (ii) evidenced by notes, bonds, 
debentures or similar instruments, (iii) for the deferred 
purchase price of goods or services (other than trade payables 
or accruals incurred in the ordinary course of business), (iv) 
under capital leases and (v) in the nature of guarantees of the 
obligations described in clauses (i) through (iv) above of any 
other Person.

     "Indemnified Party" means any Person claiming 
indemnification under any provision of Article X.

     "Indemnifying Party" means any Person against whom a claim 
for indemnification is being asserted under any provision of 
Article X.

     "Indemnity Notice" means written notification pursuant to 
Section 10.02(b) of a claim for indemnity under Article X by an 
Indemnified Party, specifying the nature of and basis for such 
claim, together with the amount or, if not then reasonably 
ascertainable, the estimated amount, determined in good faith, 
of such claim.

     "Indenture" means the Supplemental Indenture, dated as of 
July 1, 1945, as amended and supplemented, between Seller and 
The Marine Midland Trust Company of New York, Trustee.

     "Independent Accounting Firm" means PriceWaterhouseCoopers 
or such other independent accounting firm of national reputation 
mutually appointed by Seller and Purchaser.

     "Intangible Personal Property" has the meaning ascribed to 
it in Section 1.01(a)(vii).

     "Intellectual Property" means all patents and patent 
rights, trademarks and trademark rights, trade names and trade 
name rights, service marks and service mark rights, service 
names and service name rights, brand names, inventions, 
copyrights and copyright rights, trade secrets, know-how, 
techniques, computer programs and related documentation, and any 
and all other intangible assets or proprietary information or 
rights (whether registered or under common law) and all pending 
applications for and registrations of patents, trademarks, 
service marks and copyrights.

     "Inventory" has the meaning ascribed to it in 
Section 1.01(a)(iii).

     "Inventory Adjustment Amount" has the meaning ascribed to 
in Section 1.04.

     "Inventory Survey" has the meaning ascribed to in 
Section 1.04.

     "IRS" means the United States Internal Revenue Service.

     "Knowledge" or similar phrases in this Agreement means: 
(i) in the case of Seller, the actual knowledge of Seller's 
officers and employees who are persons generally responsible for 
the subject matter to which knowledge is pertinent, such persons 
being listed in Section 12.01(d) of the Disclosure Schedule at 
the date as of which the representation, warranty or covenant is 
made or repeated, and (ii) in the case of Purchaser the actual 
knowledge of Purchaser's officers and employees who are persons 
generally responsible for the subject matter to which knowledge 
is pertinent, such persons being listed in Section 12.01(d) of 
the Disclosure Schedule at the date as of which the 
representation, warranty or covenant is made or repeated.

     "Landlord Security Deposits" has the meaning ascribed to it 
in Section 1.02(a)(iv).

     "Laws" means all laws, statutes, rules, regulations, 
ordinances and other pronouncements having the effect of law of 
the United States, any foreign country or any domestic or for-
eign state, county, city or other political subdivision or of 
any Governmental or Regulatory Authority.

     "Liabilities" means all Indebtedness, obligations and other 
liabilities of a Person (whether absolute, accrued, contingent, 
fixed or otherwise, or whether due or to become due).

     "Licenses" means all licenses, permits, certificates of 
authority, authorizations, approvals, registrations, franchises 
and similar consents granted or issued by any Governmental or 
Regulatory Authority, other than Environmental Permits, 
including applications for any of the foregoing.

     "Liens" means any mortgage, pledge, assessment, security 
interest, lease, lien, adverse claim, levy, charge or other 
encumbrance of any kind, or easement, or any conditional sale 
Contract, title retention Contract or other Contract to give any 
of the foregoing.

     "Loss" means any and all damages, fines, penalties, 
deficiencies, losses and expenses (including interest, court 
costs, reasonable fees of attorneys, accountants and other 
experts or other reasonable expenses of litigation or other 
proceedings or of any claim, default or assessment); provided, 
however, "Loss" shall not include any consequential, incidental 
or punitive damages for any reason other than in the case of 
willful misconduct.

     "Maintenance Expenditures" means those special maintenance 
expenditures (including for plant overhauls) which are 
identified in the Budget referred to in Section 4.13, and such 
other emergency, non-budgeted special maintenance expenditures 
made by Seller in accordance with the provisions of Section 4.13 
in the exercise of Good Utility Practices.

     "Maintenance and Capital Expenditures Amount" means (i) the 
aggregate amount of all funds actually expended by Seller (and 
amounts due from Seller to third parties at the time of the 
Closing in respect of work actually performed by such third 
parties, to the extent such amounts are not Assumed Liabilities) 
with respect to Maintenance Expenditures and Capital 
Expenditures, in each case which are identified in the Budget, 
during the period beginning on the date one (1) year prior to 
the Closing and ending on the Closing (or such shorter period if 
the Closing occurs less than one year from the date hereof) up 
to but not exceeding $1,620,000 in the aggregate; and (ii) 85% 
of all Emergency Expenditures made by Seller in accordance with 
Section 4.13 if any, during such one (1) year (or shorter) 
period described above.  The Maintenance and Capital 
Expenditures Amount shall not include any Capital Expenditures, 
Maintenance Expenditures or Emergency Expenditures with respect 
to assets or properties that are not transferred to Purchaser 
under this Agreement.

     "MPC" means The Montana Power Company, a Montana 
corporation and the operator of the Colstrip Facilities.

     "MPC Purchase Agreement" means the Asset Purchase 
Agreement, dated as of the date hereof, by and between Purchaser 
and MPC, together with any amendments thereto.

     "Off-Site Environmental Liabilities" means any liabilities, 
obligations or responsibilities under or related to former, 
current or future Environmental Laws or the common law, whether 
such liability, obligation or responsibility is known or 
unknown, contingent or accrued, arising as a result of or in 
connection with Seller's storage, disposal, transportation, 
discharge, Release or recycling of Hazardous Materials prior to 
the Closing at or to locations other than the Real Property 
constituting Assets, provided that liabilities attributable to 
migration of Hazardous Materials from the Real Property 
constituting the Assets shall not constitute Off-Site 
Environmental Liabilities.  

     "Operative Agreements" means, collectively, this Agreement, 
the General Assignment and the other Assignment Instruments, the 
Assumption Agreement, the other Assumption Instruments, the 
Contribution Agreement, the Wholesale Transition Service 
Agreement (if entered into by the Parties), the Transmission 
Service Agreement (if entered into by the Parties) and any 
support or other agreements to be entered into at the Closing in 
connection with the transaction.

     "OPUC" means the Oregon Public Utility Commission.

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

     "Parent" has the meaning ascribed to it in the forepart of 
this Agreement.

     "Permitted Lien" means (i) those Liens and exceptions to 
title to the Assets (except Easements) set forth in Section 
12.01(e) of the Disclosure Schedule; (ii) the Easements; 
(iii) when such term is used with respect to any date before the 
Closing, Liens created by the Indenture; (iv) any Lien for Taxes 
not yet due or delinquent or being contested in good faith by 
appropriate proceedings for which adequate reserves have been 
established in accordance with GAAP; (v) when such term is used 
with respect to any date prior to the Closing, any statutory 
Lien arising in the ordinary course of business by operation of 
Law with respect to a Liability that is not yet due or 
delinquent; (vi) zoning, entitlement, conservation restriction 
and other land use and environmental regulations by any 
Governmental or Regulatory Authority; and (vii) any minor 
imperfection of title or similar Lien, limited in the case of 
items (i) - (vii) (excluding clause (ii)) to only those matters 
which, individually or in the aggregate with other such Liens do 
not materially detract from the value of the Assets as currently 
used or materially interfere with the ownership, operation and 
maintenance of the Assets.

     "Person" means any natural person, corporation, general 
partnership, limited partnership, proprietorship, limited 
liability company, other business organization, trust, union, 
association or Governmental or Regulatory Authority.

     "PGE Colstrip Interests" means Seller's undivided 20% 
interest in Colstrip Units 3 & 4, together with PGE's interest 
in the Common Facilities as provided in the Colstrip Contracts 
and its interest in the PGE Colstrip Transmission Assets.

     "PGE Colstrip Transmission Amount" means an amount equal to 
$37,464,656.

     "PGE Colstrip Transmission Assets" means Seller's right, 
title and interest in and to the 500 kV transmission system, 
including related facilities, real property and property rights, 
for the transmission of power from the Colstrip Facilities to 
Bonneville Power Administration's transmission system near 
Townsend, Montana, as described in Section 1.01(a)(xv) of the 
Disclosure Schedule.

     "Pollution Control Bonds" means those Pollution Control 
Revenue Refunding Bonds, dated May 1, 1998, Series 1998 A (Non-
AMT) City of Forsyth, Montana in the original principal amount 
of $97,800,000 and Series 1998 B (AMT) City of Forsyth, Montana 
in the original principal amount of $21,000,000.

     "Pollution Control Facilities" means the facilities 
financed with the Pollution Control Bonds described in Exhibit H 
hereto.

     "Post-Closing Covenants" has the meaning ascribed to it in 
Section 9.01(b).

     "Potentially Responsible Party" has the meaning ascribed to 
it in CERCLA.

     "PPUC Order" means the Opinion and Order adopted by PPUC on 
February 9, 1995 in Pennsylvania Power & Light Company's 
application for approval of certain transactions in connection 
with the utility's establishment of a holding company structure.

     "Pre-Closing Covenants" has the meaning ascribed to it in 
Section 9.01(b).

     "Pre-Closing Environmental Liabilities" means those 
Environmental Liabilities attributable to the period on or prior 
to the Closing;

     "Pre-Closing Known Remedial Liabilities" means the subset 
of Pre-Closing Environmental Liabilities that are described in 
paragraph (d) of the definition of Environmental Liabilities and 
that are attributable to the matters set forth in Schedule I 
hereto.

     "Pre-Closing Known and Unknown Remedial Liabilities" means 
all Pre-Closing Known Remedial Liabilities and Pre-Closing 
Unknown Remedial Liabilities arising from or relating to the 
ownership, operation and maintenance of the PGE Colstrip 
Interests, to the extent such PGE Colstrip Interests or any 
portion thereof are acquired by Purchaser.

     "Pre-Closing Unknown Remedial Liabilities" means the subset 
of Pre-Closing Environmental Liabilities that are described in 
paragraph (d) of the definition of Environmental Liabilities and 
that are not attributable to the matters set forth in Schedule I 
hereto.

     "Proceedings" has the meaning ascribed in Section 13.13.

     "Puget" means Puget Sound Energy, Inc., a Washington 
corporation.

     "Purchase Price" has the meaning ascribed to it in 
Section 1.03(a).

     "Purchaser" has the meaning ascribed to it in the forepart 
of this Agreement.

     "Purchaser Financing" has the meaning ascribed to it in 
Section 5.07.

     "Purchaser Group" has the meaning ascribed to it in Section 
10.01(a).

     "Purchaser Material Adverse Effect" means any change or 
effect after the Bid Date that is individually or in the 
aggregate, materially adverse to (a) the business, operations, 
property or condition (financial or otherwise) of Purchaser and 
its subsidiaries, taken as a whole, (b) the ability of Purchaser 
and each of its subsidiaries, taken as a whole, to perform their 
respective obligations under this Agreement or any of the other 
Operative Agreements or (c) the validity or enforceability of 
this Agreement or any of the other Operative Agreements, or the 
rights or remedies of Purchaser hereunder or thereunder. 

     "Purchaser Required Regulatory Approvals" means (i) 
pursuant to Part II of the Federal Power Act, acceptance for 
filing and effectiveness or authorization by Final Order of 
FERC, as applicable, to allow Purchaser to (A) implement 
wholesale sales of electricity under a Wholesale Transition 
Service Agreement (if one is entered into pursuant to Section 
5.09) and any other jurisdictional agreements to be assigned to 
Purchaser, (B) acquire, own and operate the Assets, and (C) sell 
electricity at wholesale at market-based rates; (ii) a Final 
Order of FERC certifying Purchaser as an exempt wholesale 
generator pursuant to Section 32 of the Holding Company Act, 
provided however, that in the event Purchaser does not obtain 
such certification with respect to the acquisition and ownership 
of the PGE Colstrip Transmission Assets, then the provisions of 
Section 1.10 shall apply with respect to such Assets and 
provided further, that in any case such certification will be a 
Purchaser Required Regulatory Approval with respect to all other 
Assets, (iii) subject to the provision of Section 1.10, a Final 
Order of the FERC accepting for filing and effectiveness or 
approving the Transmission Service Agreement in form and 
substance satisfactory to Purchaser in its reasonable discretion 
and providing for the payment by Purchaser of rates not in 
excess of those as set forth on Exhibit K, (iv) a Final Order of 
the OPUC, Montana Public Service Commission and the WUTC, in 
each case if required, including the determinations required by 
Section 32(c) of the Holding Company Act for the Assets to be 
eligible facilities of Purchaser as an exempt wholesale 
generator; (v) approval or authorization by Final Order of the 
Pennsylvania Public Utility Commission pursuant to the PPUC 
Order, if required; (vi) other Licenses, Environmental Permits 
and approvals or authorizations of any other Governmental or 
Regulatory Authority reasonably necessary pursuant to any Law 
for Purchaser to own and operate the Assets other than 
authorizations or approvals, the lack of which would not 
materially detract from the value of the Assets as currently 
used or materially interfere with the ownership, operation and 
maintenance of the Assets; and (vii) expiration or early 
termination of the HSR Act waiting period.

     "Qualified Transfer" means a sale or other disposition of 
the Pollution Control Facilities to a transferee who is 
reasonably expected to use the Pollution Control Facilities in 
such a way that they are treated as qualified pollution control 
facilities within the meaning of Section 103(b)(4)(F) of the 
Internal Revenue Code as in effect prior to the enactment of 
Public Law No. 99-514 (the "Tax Reform Act of 1986").

     "Real Property" has the meaning ascribed to it in 
Section 1.01(a)(i).

     "Real Property Leases" has the meaning ascribed to it in 
Section 1.01(a)(ii).

     "Release" means any release, spill, emission, pouring, 
leaking, pumping, injection, deposit, disposal, discharge, 
emptying, dispersal, dumping, leaching or migration into or 
through the indoor or outdoor environment, including the 
movement of Hazardous Materials through ambient air, soil, 
surface water, ground water, wetlands, land, surface or 
subsurface strata.

     "Representatives" has the meaning ascribed to it in 
Section 4.03.

     "Resolution Period" means the period ending sixty (60) days 
following receipt by an Indemnified Party of a written notice 
from an Indemnifying Party stating that it disputes all or any 
portion of a claim set forth in a Claim Notice or an Indemnity 
Notice.

     "Retained Liabilities" has the meaning ascribed to it in 
Section 1.02(b).

     "SEC" means the Securities and Exchange Commission.

     "Securities Act" means the Securities Act of 1933, as 
amended, and the rules and regulations promulgated thereunder.

     "Seller" has the meaning ascribed to it in the forepart of 
this Agreement.

     "Seller Group" has the meaning ascribed to it in Section 
10.01(c).

     "Seller Material Adverse Effect" means any change in or 
effect on any of the Assets or the operation of any of the 
Assets after the Bid Date that is materially adverse to the 
ownership, business, operations or condition (financial or 
otherwise) of (A) in the case of the PGE Colstrip Interests, the 
PGE Colstrip Interests, or (B) in the case of the PGE Colstrip 
Transmission Assets (unless the provisions of Section 1.10 or 
6.12 have become effective), the PGE Colstrip Interests or the 
PGE Colstrip Transmission Assets, in each case taken as a whole, 
other than (i) any change resulting from changes in the 
international, national, regional or local wholesale or retail 
markets for electricity, (ii) any change resulting from changes 
in the international, national, regional or local markets for 
any fuel used at the Colstrip Facilities, (iii) any change 
resulting from changes in the North American, national, regional 
or local electricity transmission systems, (iv) changes in Law 
that apply generally to similarly situated Persons, and (v) any 
materially adverse change in the Assets which is cured 
(including by payment of money) by Seller before the earlier of 
the Closing and the Termination Date.

     "Seller Required Regulatory Approvals" means (i) the 
approval, if required, of the SEC pursuant to the Holding 
Company Act, (ii) the filings by Seller and Purchaser required 
by the HSR Act and the expiration or earlier termination of all 
waiting periods under the HSR Act, (iii) a Final Order(s) of the 
OPUC approving the transaction and the terms and conditions of 
each of the Operative Agreements and the respective regulatory 
treatment of any and all financial impacts thereof, in each case 
in form and substance satisfactory to Seller in its reasonable 
discretion, and (iv) a Final Order(s) of the FERC approving the 
transaction or any aspects thereof over which FERC has 
jurisdiction, including the approval, if necessary, of the 
Transmission Service Agreement, and the respective regulatory 
treatment of any and all financial impacts of such Final 
Order(s) of FERC in form and substance satisfactory to Seller in 
its reasonable discretion.

     "Separation Document" means the separation document to be 
agreed to by the parties in the event the PGE Transmission 
Assets are not purchased by Purchaser.

     "Site Representatives" has the meaning ascribed to it in 
Section 4.10.

     "Tangible Personal Property" has the meaning ascribed to it 
in Section 1.01(a)(iv).

     "Tax Representation" has the meaning ascribed to it in 
Section 9.01(a).

     "Tax Returns" means any return, report, information return 
or other document (including any related or supporting 
information) required to be supplied to any taxing authority 
with respect to Taxes.

     "Taxes" means all taxes, charges, fees, levies, penalties, 
or other assessments imposed by any United States Federal, state 
or local or foreign taxing authority, including but not limited 
to, income, excise, property, sales, transfer, franchise, 
payroll, withholding, social security or other taxes, including 
any interest, penalties or additions attributable thereto.

     "Tenant Security Deposits" has the meaning ascribed to it 
in Section 1.01(a)(viii).

     "Third Party Claim" has the meaning ascribed to it in 
Section 10.02(a).

     "Title Representation" has the meaning ascribed to it in 
Section 9.01(a).

     "Transferable Permits" has the meaning ascribed to it in 
Section 1.01(a)(vi).

     "Transfer Taxes" means all Taxes in the nature of sales, 
use, transfer, recording, value added or forms of conveyance 
taxes.

     "Transmission Service Agreement" means an agreement between 
Seller and Purchaser completed pursuant to Section 5.08 under 
which Purchaser shall purchase firm point-to-point transmission 
service from Seller on the PGE Colstrip Transmission Assets 
pursuant to the Transmission Service Agreement Principles set 
forth on Exhibit K.

     "Wholesale Transition Service Agreement" has the meaning 
ascribed to it in Section 5.09.

     "WUTC" means the Washington Utilities and Transportation 
Commission.

     "WWP" means The Washington Water Power Company, a 
Washington corporation.

     (b)  Construction of Certain Terms and Phrases.  Unless the 
context of this Agreement otherwise requires, (i) words of any 
gender include each other gender; (ii) words using the singular 
or plural number also include the plural or singular number, 
respectively; (iii) the terms "hereof," "herein," "hereby" and 
derivative or similar words refer to this entire Agreement; 
(iv) the terms "Article" or "Section" refer to the specified 
Article or Section of this Agreement; (v) "include" or 
"including" means including without limiting the generality of 
any description preceding such term, and (vi) the phrase 
"ordinary course of business" refers to the business of Seller 
in connection with the ownership of the PGE Colstrip Interests 
and the performance of its obligations under the Colstrip 
Contracts. Whenever this Agreement refers to a number of days, 
such number shall refer to calendar days unless Business Days 
are specified. All accounting terms used herein and not 
expressly defined herein shall have the meanings given to them 
under GAAP. Any representation or warranty contained herein as 
to the enforceability of a Contract shall be subject to the 
effect of any bankruptcy, insolvency, reorganization, moratorium 
or other similar law affecting the enforcement of creditors' 
rights generally and to general equitable principles (regardless 
of whether such enforceability is considered in a proceeding in 
equity or at Law).

                       ARTICLE XIII

                       MISCELLANEOUS

XIII.1  Notices

     All notices, requests and other communications hereunder 
must be in writing and will be deemed to have been duly given 
only if delivered personally or by facsimile transmission or 
mailed (first class postage prepaid) to the parties at the 
following addresses or facsimile numbers:

     If to Purchaser, to:

          PP&L Global, Inc.
          11350 Random Hills Rd, Suite 400
          Fairfax, Virginia  22030
          Facsimile No.:  (703) 293-2659
          Attn:  Chief Counsel

     with a copy to:

          Winthrop, Stimson, Putnam & Roberts
          One Battery Park Plaza	
          New York, New York  10004-1490
          Facsimile No.: 212-858-1500
          Attn: David P. Falck

     If to Seller, to:

          Portland General Electric Company
          121 SW Salmon Street
          Portland, Oregon  97204
          Facsimile No.: 503-464-2200
          Attn:  General Counsel

     with a copy to:

          LeBoeuf, Lamb, Greene & MacRae, L.L.P.
          125 West 55th Street
          New York, New York  10019-5389
          Facsimile No.:  (212) 424-8500
          Attn:  John G. Klauberg

     All such notices, requests and other communications will 
(i) if delivered personally to the address as provided in this 
Section, be deemed given upon delivery, (ii) if delivered by 
facsimile transmission to the facsimile number as provided in 
this Section, be deemed given upon receipt, and (iii) if 
delivered by mail in the manner described above to the address 
as provided in this Section, be deemed given upon receipt (in 
each case regardless of whether such notice, request or other 
communication is received by any other Person to whom a copy of 
such notice, request or other communication is to be delivered 
pursuant to this Section). Any party from time to time may 
change its address, facsimile number or other information for 
the purpose of notices to that party by giving notice specifying 
such change to the other party hereto.

XIII.2  Bulk Sales Act

     The parties hereby waive compliance with the bulk sales act 
or comparable statutory provisions of each applicable 
jurisdiction. Seller shall indemnify Purchaser and its officers, 
directors, employees, agents and Affiliates in respect of, and 
hold each of them harmless from and against, any and all Losses 
suffered, occurred or sustained by any of them or to which any 
of them becomes subject, resulting from, arising out of or 
relating to the failure of Seller to comply with the terms of 
any such provisions applicable to the transactions contemplated 
by this Agreement.

XIII.3  Entire Agreement

     This Agreement and the Operative Agreements and the other 
exhibits, schedules, documents, certificates and instruments 
executed and delivered pursuant to this Agreement supersede all 
prior discussions and agreements between the parties with 
respect to the subject matter hereof and thereof, including that 
certain confidentiality agreement between Purchaser and MPC 
dated April 8, 1998, as agreed to include Seller, and contain 
the sole and entire agreement between the parties hereto with 
respect to the subject matter hereof and thereof.

XIII.4  Expenses

     Except as otherwise expressly provided in this Agreement 
(including as provided in Section 11.02), whether or not the 
transactions contemplated hereby are consummated, each party 
will pay its own costs and expenses incurred in connection with 
the negotiation, execution and closing of this Agreement and the 
Operative Agreements and the transactions contemplated hereby 
and thereby.

XIII.5  Public Announcements

     At all times at or before the Closing, Seller and Purchaser 
will not issue or make any reports, statements or releases to 
the public or generally to the employees, customers, suppliers 
or other Persons with whom Seller has significant business 
relationships in connection with the PGE Colstrip Interests with 
respect to this Agreement or the transactions contemplated 
hereby without the consent of the other, which consent shall not 
be unreasonably withheld. If either party is unable to obtain 
the approval of its public report, statement or release from the 
other party and such report, statement or release is, in the 
opinion of legal counsel to such party, required by Law in order 
to discharge such party's disclosure obligations, then such 
party may make or issue the legally required report, statement 
or release and promptly furnish the other party with a copy 
thereof. Seller and Purchaser will also obtain the other party's 
prior approval of any press release to be issued immediately 
following the Closing announcing the consummation of the 
transactions contemplated by this Agreement.

XIII.6  Confidentiality

     Each party hereto will hold, and will use its best efforts 
to cause its Affiliates, and their respective Representatives to 
hold, in strict confidence from any Person (other than any such 
Affiliate or Representative), unless (i) compelled to disclose 
by judicial or administrative process (including  in connection 
with obtaining the necessary approvals of this Agreement and the 
transactions contemplated hereby of Governmental or Regulatory 
Authorities) or by other requirements of Law or (ii) disclosed 
in an Action or Proceeding brought by a party hereto in pursuit 
of its rights or in the exercise of its remedies hereunder, all 
documents and information concerning the other party or any of 
its Affiliates furnished to it by the other party or such other 
party's Representatives in connection with this Agreement or the 
transactions contemplated hereby, except to the extent that such 
documents or information can be shown to have been 
(a) previously known by the party receiving such documents or 
information, (b) in the public domain (either prior to or after 
the furnishing of such documents or information hereunder) 
through no fault of such receiving party or (c) later acquired 
by the receiving party from another source if the receiving 
party is not aware that such source is under an obligation to 
another party hereto to keep such documents and information 
confidential; provided that following the Closing the foregoing 
restrictions will not apply to Purchaser's use of documents and 
information concerning the Assets or the Assumed Liabilities 
furnished by Seller hereunder. Purchaser shall have the right to 
disclose Information of Seller with respect to the Assets to 
potential lenders and their respective representatives in 
connection with financing the transactions contemplated by this 
Agreement and to third parties in connection with planning for 
operations of the Assets following the Closing, provided that 
any such disclosure is made pursuant to confidentiality 
obligations equivalent to those provided in this Section 13.06; 
provided, further, if such third parties are involved in the 
energy industry then Purchaser shall not disclose information of 
Seller to such Persons without the written consent of Seller 
which shall not be unreasonably withheld.  In the event the 
transactions contemplated hereby are not consummated, upon the 
request of the other party, each party hereto will, and will 
cause its Affiliates and their respective Representatives to, 
promptly (and in no event later than five (5) Business Days 
after such request) redeliver or cause to be redelivered all 
copies of confidential documents and information furnished by 
the other party in connection with this Agreement or the 
transactions contemplated hereby and destroy or cause to be 
destroyed all notes, memoranda, summaries, analyses, 
compilations and other writings related thereto or based thereon 
prepared by the party furnished such documents and information 
or its Representatives.

XIII.7  Waiver

     Any term or condition of this Agreement may be waived at 
any time by the party that is entitled to the benefit thereof, 
but no such waiver shall be effective unless set forth in a 
written instrument duly executed by or on behalf of the party 
waiving such term or condition. No waiver by any party of any 
term or condition of this Agreement, in any one or more 
instances, shall be deemed to be or construed as a waiver of the 
same or any other term or condition of this Agreement on any 
future occasion. All remedies, either under this Agreement or by 
Law or otherwise afforded, will be cumulative and not 
alternative.

XIII.8  Amendment

     This Agreement may be amended, supplemented or modified 
only by a written instrument duly executed by or on behalf of 
each party hereto.

XIII.9  No Third Party Beneficiary

     The terms and provisions of this Agreement are intended 
solely for the benefit of each party hereto and their respective 
successors or permitted assigns, and it is not the intention of 
the parties to confer third party beneficiary rights upon any 
other Person other than any Person entitled to indemnity under 
Article X.

XIII.10  No Assignment; Binding Effect

     Neither this Agreement nor any right, interest or 
obligation hereunder may be assigned by any party hereto without 
the prior written consent of the other party hereto and any 
attempt to do so will be void, except (a) for assignments and 
transfers by operation of Law, (b) that Seller may assign its 
rights, interests or obligations hereunder, in whole or in part, 
to an Affiliate and (c) that Purchaser may assign any or all of 
its rights, interests and obligations hereunder (including its 
rights under Article X) to (i) a direct or indirect wholly-owned 
subsidiary, provided that any such subsidiary agrees in writing 
to be bound by all of the terms, conditions and provisions 
contained herein (in which event, from the date of such 
assignment and subject to the other provisions of this Section 
13.10, such assignee shall be the Purchaser for the purposes of 
this Agreement), or (ii) any lender providing purchase money or 
other financing to Purchaser from time to time as collateral 
security for such financing, but no such assignment referred to 
in clauses (b) or (c) shall relieve the assigning party of its 
obligations hereunder provided that no such assignment by Seller 
or Purchaser adversely affects the availability or timing of any 
Federal, state or local government consent or approval required 
for the consummation of the transactions contemplated hereby. 
Subject to the preceding sentence, this Agreement is binding 
upon, inures to the benefit of and is enforceable by the parties 
hereto and their respective successors and assigns.  

XIII.11  Headings

     The headings used in this Agreement have been inserted for 
convenience of reference only and do not define or limit the 
provisions hereof.  Neither party shall be deemed to have been 
the drafter of this Agreement, which is the product of detailed, 
arm's-length negotiations between the parties and their 
respective counsel.

XIII.12  Invalid Provisions

     If any provision of this Agreement is held to be illegal, 
invalid or unenforceable under any present or future Law, and if 
the rights or obligations of any party hereto under this 
Agreement will not be materially and adversely affected thereby, 
(a) such provision will be fully severable, (b) this Agreement 
will be construed and enforced as if such illegal, invalid or 
unenforceable provision had never comprised a part hereof, 
(c) the remaining provisions of this Agreement will remain in 
full force and effect and will not be affected by the illegal, 
invalid or unenforceable provision or by its severance herefrom 
and (d) in lieu of such illegal, invalid or unenforceable 
provision, there will be added automatically as a part of this 
Agreement a legal, valid and enforceable provision as similar in 
terms to such illegal, invalid or unenforceable provision as may 
be possible.

XIII.13  Governing Law

     This Agreement shall be governed by and construed in 
accordance with the Laws of the State of New York.

XIII.14  Counterparts

     This Agreement may be executed in any number of 
counterparts, each of which will be deemed an original, but all 
of which together will constitute one and the same instrument.

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

                             PP&L GLOBAL, INC.

                             By:______________________________
                                 Name:
                                 Title:

                             PORTLAND GENERAL ELECTRIC COMPANY

                             By:______________________________
                                 Name:
                                 Title: