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Exhibit 4.7(b)    
  

 
 

MPC NATURAL GAS FUNDING TRUST
  
  TRUST AGREEMENT    
  

 
 

dated as of December 11, 1998
  
  AMONG
  
  PATRICK CORCORAN and ELLEN SENECHAL, as BENEFICIARY TRUSTEES,
  
  WILMINGTON TRUST COMPANY, as ISSUER TRUSTEE,
  DELAWARE TRUSTEE and INDEPENDENT
TRUSTEE
  
  and
  
  THE MONTANA POWER COMPANY,
  as GRANTOR and OWNER    

  

 
 

TABLE OF CONTENTS    
  

ARTICLE I

DEFINITIONS  

	 
	 	 
	 	Page

	1.01	 	Capitalized Terms	 	1
	
ARTICLE II

ORGANIZATION
	

2.01	
 	

Name	
 	

3
	2.02	 	Initial Trust Property	 	3
	2.03	 	Office	 	3
	2.04	 	Purposes and Powers; Intent	 	4
	2.05	 	Appointment of the Trustees	 	4
	2.06	 	Declaration of Trust	 	5
	2.07	 	Other Expenses, Liabilities of Trust	 	5
	2.08	 	Situs of Trust	 	5
	2.09	 	Additional Capital Contributions	 	5
	2.10	 	Assignment of Right to Distributions or Payments; Transfers	 	5
	
ARTICLE III

COMPLIANCE WITH THE CODE
	

3.01	
 	

Trust to Be Treated as a Division for Federal Income Tax Purposes	
 	

5
	
ARTICLE IV

SEPARATE EXISTENCE OF TRUST
	

4.01	
 	

Maintenance of Separate Existence	
 	

6
	4.02	 	Merger and Other Transactions	 	9
	4.03	 	Transactions with Affiliates	 	9
	4.04	 	Insolvency	 	9
	4.05	 	Compliance with Corporate Formalities	 	10
	
ARTICLE V

INVESTMENT AND APPLICATION OF TRUST FUNDS
	

5.01	
 	

Investment of Trust Funds	
 	

10
	5.02	 	Application of Funds	 	10

i

 

	
ARTICLE VI

AUTHORITY AND DUTIES OF THE TRUSTEES
	

6.01	
 	

General Authority	
 	

10
	6.02	 	Specific Authority: Special Authority of Beneficiary Trustees	 	10
	6.03	 	Accounting and reports to the Grantor, any Owner, the Internal Revenue Service and Others	 	11
	6.04	 	Signature of Returns	 	11
	6.05	 	Right to Receive Instructions	 	11
	6.06	 	No Duties Except as Specified in This Agreement or in Instructions	 	11
	6.07	 	No Action Except Under Specified Documents or Instructions	 	12
	
ARTICLE VII

CONCERNING THE TRUSTEES
	

7.01	
 	

Acceptance of Trusts and Duties	
 	

12
	7.02	 	Furnishing of Documents	 	12
	7.03	 	Reliance; Advice of Counsel	 	13
	7.04	 	Not Acting in Individual Capacity	 	13
	
ARTICLE VIII

COMPENSATION OF TRUSTEES
	

8.01	
 	

Issuer Trustee's Fees and Expertise	
 	

13
	8.02	 	Beneficiary Trustees' Fees and Expenses	 	13
	
ARTICLE IX

INDEMNIFICATION OF TRUST
	

9.01	
 	

Scope of Indemnification	
 	

14
	
ARTICLE X

TERMINATION OF TRUST
	

10.01	
 	

Dissolution of Trust	
 	

14
	10.02	 	No Termination by Grantor or Owner	 	14
	10.03	 	Cancellation of Certificate of Trust	 	14
	
ARTICLE XI

SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES
	

11.01	
 	

Resignation of Trustee; Appointment of Successor	
 	

14

ii

 

	
ARTICLE XII

MISCELLANEOUS
	

12.01	
 	

Supplements and Amendments	
 	

15
	12.02	 	No Legal Title to Trust Property in Grantor and Owner	 	15
	12.03	 	Limitations on Rights of Others	 	15
	12.04	 	Notices	 	16
	12.05	 	Severability	 	16
	12.06	 	Separate Counterparts	 	16
	12.07	 	Successors and Assigns	 	16
	12.08	 	Headings	 	16
	12.09	 	Governing Law	 	16
	

EXHIBIT 1 CERTIFICATE OF TRUST	
 	

18

iii

  

        TRUST AGREEMENT dated as of December 11, 1998 among The Montana Power Company, a Montana corporation, as Grantor and Owner, Wilmington Trust Company, a Delaware banking
corporation, as Issuer Trustee, Delaware Trustee and Independent Trustee, and Patrick Corcoran, an individual, and Ellen Senechal, an individual, as Beneficiary Trustees. 

        NOW,
THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows: 

 
 

ARTICLE I
  DEFINITIONS    
  

        1.01    Capitalized Terms.    For all purposes of this Agreement, the following terms shall have the meanings set
forth below: 

        "Agreement"
means this Trust Agreement, as it may be amended from time to time. 

        "Affiliate"
shall mean, with reference to any specified Person, any other Person controlling or controlled by or under common control with such specified Person; provided that, for
purposes of this Agreement when used with respect to the Grantor's or any Owner's direct or indirect subsidiaries, any limited partners thereof shall also be deemed "Affiliates." For the purposes of
this definition, "control," when used with reference to any specified Person, shall mean the power to direct the management and policies of such specified Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. 

        "Affiliated
Entity" means the Grantor, any Owner, any of their respective direct or indirect subsidiaries or any Affiliate of any of the foregoing other than the Trust. 

        "Bankruptcy
Code" means Title 11 of the United States Code, 11 U.S.C. ss. 101, et seq., and any successor statute, as amended from time to time. 

        "Beneficiary
Trustee" means any Trustee other than the Issuer Trustee, the Independent Trustee or the Delaware Trustee. 

        "Business
Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. ss. 13801, et seq., and any successor statute, as amended from time to time. 

        "Code"
means the Internal Revenue Code of 1986, as amended. 

        "Collateral"
has the meaning assigned to that term in the Indenture. 

        "Delaware
Trustee" means a trustee who in the case of a natural person is a resident of the State of Delaware, or, in all other cases, a trustee which has its principal place of business
in the State of Delaware. 

        "Eligible
Investments" has the meaning assigned to that term in the Indenture. 

        "Financing
Order" means the order of the Montana Public Service Commission dated April 27, 1998 with a service date of May 1, 1998. 

        "Fiscal
Year" means the calendar year from each January 1 to the following December 31. 

        "GAAP"
means generally accepted accounting principles in effect from time to time. 

        "Grantor"
means MPC. 

        "Indenture"
means the Indenture, dated as of December 22, 1998 to be entered into by and between the Trust and the Note Trustee as the same may be amended, supplemented or
otherwise modified from time to time. 

1

 

        "Independent
Trustee" means a trustee that is not and has not been for at least three years from the date of his or her or its appointment (i) a direct or indirect legal or
beneficial owner of the Trust or MPC or any of their respective Affiliates, (ii) a relative, supplier, employee, officer, director, manager, contractor or material creditor of the Trust or MPC
or any of their respective Affiliates or (iii) a Person who controls MPC or its Affiliates. 

        "Insolvency
Event" means the Significant Events described in (a)(i) and (a)(ii) of that definition. 

        "Issuer
Trustee" means Wilmington Trust Company or any other Trustee designated by the Grantor or any Owner from time to time to replace such trustee. 

        "Liability"
means any damage, judgment, amount paid in settlement, fine, penalty, tax, punitive damages, or cost or expense of any nature (including, without limitation, attorneys' fees
and disbursements). 

        "MPC"
means The Montana Power Company, a Montana corporation, its successors and permitted assigns. 

        "Notes"
has the meaning assigned to that term in the Indenture. 

        "Note
Trustee" means US Bank National Association, as Trustee under the Indenture, and its successors. 

        "Owner"
means the Grantor and its successors and permitted assigns as a beneficial owner (within the meaning of the Business Trust Act) of the Trust. All references in this Agreement to
"any Owner" means each of the Grantor's successors and permitted assigns as a beneficial owner of the Trust, and not the Grantor itself. 

        "Person"
means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, governmental
authority or any other entity of similar nature. 

        "Proceeding"
means any threatened, pending or completed action, suit, appeal or other proceeding of any nature, whether civil, criminal, administrative or investigative, whether formal
or informal, and whether brought by or in the right of the Trust, the Grantor, any Owner or otherwise. 

        "Rating
Agencies" has the meaning assigned to that term under the Indenture. 

        "Sale
Agreement" means the Transition Property Purchase and Sale Agreement, dated as of December 22, 1998, to be entered into by and between the Trust and MPC, as Seller
thereunder. 

        "Servicing
Agreement" means the Transition Property Servicing Agreement, dated as of December 22, 1998 to be entered into by and between the Trust and MPC, as Servicer thereunder. 

        "Significant
Event" means (a) with respect to the Trust, that (i) the Trust shall fail, or admit in writing its inability, to pay its debts generally as they become due, or
shall commence a voluntary case or other Proceeding under any applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other similar law now or hereafter in effect, or shall
consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official for the Trust or for any substantial part of its
property, or shall make any general assignment for the benefit of creditors, or shall take any trust action authorizing the taking of any of the foregoing actions or (ii) a case or other
Proceeding shall be commenced without the application or consent of the Trust, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up, or compensation or
readjustment of debts of the Trust, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or other similar official for the Trust or any substantial part of its assets,
or any similar action with respect to the Trust under any law (foreign or domestic) relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts and such 

2

 

case or Proceeding shall continue undismissed or unstayed and in effect for a period of 90 days or any of the actions sought in such petition or Proceeding, including the entering of an order
for relief in respect of the Trust or the appointment of any trustee, receiver, custodian, liquidator, assignee, sequestrator or other similar official for the Trust or any substantial portion of the
Trust's property shall be granted or otherwise occur (each of (i) and (ii) an "Insolvency Event"); 

	(b)
	the
Trust has become subject to the registration requirements of the Investment Company Act of 1940, as amended; or

	(c)
	the
Note Trustee shall have given notice that any event of default as set forth in the Indenture shall have occurred. 

        "Statute"
means Montana Code Annotated, Sections 69-3-1401, et seq., and Sections 69-8-103 and 69-8-503 (1997). 

        "Supplemental
Indenture" has the meaning assigned to that term in Article IX of the Indenture. 

        "Transition
Property" has the meaning assigned to that term in the Sale Agreement. 

        "Transfer"
means the sale, transfer or other assignment of all of the Grantor's right, title and interest in all or a portion of its beneficial interest in the Trust. 

        "Treasury
Regulations" means the regulations promulgated under the Code. 

        "Trust"
means the Delaware statutory business trust created under this Agreement. 

        "Trustees"
means the trustees of the Trust, which, as provided herein, shall mean the Beneficiary Trustees, the Independent Trustee, the Delaware Trustee and the Issuer Trustee
collectively, not in their respective individual capacities but solely as trustees under this Agreement, and any successor trustees hereunder whether designated as Issuer Trustee, Independent Trustee,
Delaware Trustee or a Beneficiary Trustee. 

        "Trust
Property" means all right, title and interest in and to any property contributed to the Trust by the Grantor or any Owner or otherwise acquired by the Trust, including, without
limitation, all distributions or payments thereon or proceeds thereof. 

        "Trust
Related Agreements" means any instrument or agreement executed in connection with or relating to the Trust or the Notes, including, but not limited to, the Servicing Agreement,
Sale Agreement and the Indenture and any supplemental indentures as each may be supplemented or amended from time to time. 

        Each
of the terms used herein and not defined herein shall have the meanings given to such terms in the Trust Related Agreements, even after the termination of such agreements. 

 
 

ARTICLE II
  ORGANIZATION    
  

        2.01    Name.    The Trust created hereby shall be known as "MPC Natural Gas Funding Trust," in which name the
Trustees shall conduct the business of the Trust, make and execute contracts, and sue and be sued. 

        2.02    Initial Trust Property.    The Grantor hereby assigns, transfers, conveys and sets over to the Trustees the
sum of $5,000, which sum shall be deposited in an account with Wilmington Trust Company. The Trustees hereby acknowledge receipt of such amount in trust from the Grantor, which amount shall constitute
the initial Trust Property. It is the intention of the parties hereto that the Trust created hereby constitute a business trust under the Business Trust Act, and that this document constitutes the
governing instrument of the Trust. The Trustees are hereby authorized and directed to execute and file a certificate of trust (the "Certificate of Trust") with the Secretary of State of the
State 

3

 

of Delaware in accordance with the provisions of the Business Trust Act in substantially the form attached hereto as Exhibit 1. 

        2.03    Office.    The initial office of the Trust shall be in care of the Issuer Trustee, 1100 North Market Street,
Wilmington, Delaware 19890, Attn: Corporate Trust Administration (telephone number 302-651-1000) or at such other address as the Trustees may designate by notice to the
Grantor, any Owner and the Note Trustee, provided that any other office will comply with the provisions of Section 4.01(c) and (e). 

        2.04    Purposes and Powers; Intent.    (a) The Trust has been created for the purpose of purchasing, owning
and servicing the Transition Property, issuing the Notes, pledging its interest in the Transition Property and other Collateral to the Note Trustee under the Indenture in order to secure the Notes,
entering into the Trust Related Agreements and performing activities that are necessary, suitable or convenient to accomplish these purposes. 

	(b)
	The
Grantor has determined that each of (i) the creation and ownership of the Trust by the Grantor and (ii) the limited purposes of the Trust are in the best interests
of the Grantor and its creditors and represent a prudent and advisable course of action that does not impair the rights and interests of the Grantor's creditors. The Grantor has determined that the
transactions contemplated by this Agreement and the Trust Related Agreements are in the best interests of the Grantor and its creditors and represent a prudent and advisable course of action that does
not impair the rights and interests of the Grantor's creditors. Such determinations are memorialized in the corporate records of the Grantor. The Grantor did not create the Trust with the intent to
hinder, delay, or defraud the Grantor's
creditors, and any transfer to the Trust will not render the Grantor insolvent or incapable of conducting its business in the manner and to the extent presently conducted.

	(c)
	The
Trust shall not have the power to (i) incur any debt other than the Notes and certain costs and expenses associated therewith, or (ii) engage in any business or
activity other than the business and activities enumerated in this Section 2.04.

	(d)
	The
Trust's existence is not dependent on its being a subsidiary of the Grantor or being affiliated with any Affiliated Entity, and the Trust's business operations could be maintained
even if it were not a subsidiary of the Grantor or affiliated with any other Affiliated Entity. The Grantor will not transfer additional Transition Property to the Trust for the purpose of mitigating
losses on the Transition Property that has previously been transferred to the Trust.

	(e)
	The
Trust has determined that the transactions contemplated by the Trust Related Agreements are in the best interests of the Trust and its creditors and represent a prudent and
advisable course of action that does not impair the rights and interests of the Trust's creditors. 

        2.05    Appointment of the Trustees.    (a) The Trust shall have no fewer than two and no more than three
trustees (if the Delaware Trustee, the Issuer Trustee, and Independent Trustee are the same entity) or five trustees (if the Delaware Trustee, the Issuer Trustee and Independent Trustee are different
entities) appointed from time to time by the Grantor or, in the event of a Transfer, by the Owner or Owners. The Grantor or, in the event of a Transfer, the Owner or Owners may at any time increase
the number of Trustees, subject to the provisions of Sections 2.05(b), 3.01, 4.01 and 4.03. The Grantor has appointed Wilmington Trust Company, as Issuer Trustee, Delaware Trustee and Independent
Trustee, and Patrick Corcoran and Ellen Senechal as Beneficiary Trustees of the Trust, which Trustees shall have all the rights, powers and duties set forth herein. 

	(b)
	The
Trust shall at all times have as Issuer Trustee a Person meeting the qualifications of Section 11.01(c) of this Agreement. In addition, the Trust shall at all times have at
least one Trustee which qualifies as a Delaware Trustee and at least one Trustee which qualifies as an 

4

 

Independent
Trustee. The Issuer Trustee, the Delaware Trustee and the Independent Trustee may, and will initially, be the same entity. 

        2.06    Declaration of Trust.    The Trustees hereby declare that they will hold the Trust Property in trust upon and
subject to the conditions set forth herein for the use and benefit of the Grantor or, in the event of a Transfer, any Owner, subject to the obligations of the Trustees under the Trust Related
Agreements. 

        2.07    Other Expenses, Liabilities of Trust.    None of the Grantor, the Trustees or any Owner shall be liable for
any liabilities or obligations of the Trust, including, but not limited to, the indemnification obligations under Article IX. 

        2.08    Situs of Trust.    The Trust will be located and administered in the State of Delaware. All bank accounts
maintained by the Trustees on behalf of the Trust shall be located in the State of Delaware except that those accounts established under the Indenture shall be maintained with the Note Trustee in
accordance with the Indenture. The Trust shall not have any employees in any state other than in the State of Delaware. Except as set forth in the Trust Related Documents, payments will be received by
the Trust only in the State of Delaware and payments will be made by the Trust only from the State of Delaware. 

        2.09    Additional Capital Contributions.    The assets of the Trust are expected to generate a return sufficient to
satisfy all obligations of the Trust under this Agreement and the Trust Related Agreements and any other obligations of the Trust. It is expected that no capital contributions to the Trust will be
necessary after the purchase of the initial Transition Property. In accordance with the private letter ruling received by the Grantor from the Internal Revenue Service dated September 22, 1998
(the "Private Letter Ruling"), on or prior to the date of issuance of the Notes, the Grantor or, in the event of a Transfer, any Owner, shall make an additional contribution to the Trust in an amount
equal to at least 0.50% of the initial principal amount of the Notes or such greater amount as agreed to by the Grantor in connection with the issuance by the Trust of the Notes. No capital
contribution by the Grantor or any Owner, as the case may be, to the Trust will be made for the purpose of mitigating losses on the Transition Property. The capital contribution will be acknowledged
by a written receipt signed by any of the Trustees. The Trustees acknowledge and agree that, notwithstanding anything in this Agreement to the contrary, such additional contribution will be managed by
an investment manager selected by the Grantor or, in the event of a transfer, the Owner or Owners and all income earned thereon shall be allocated or paid by the Note Trustee in accordance with the
provisions of the Indenture. 

        2.10    Assignment of Right to Distributions or Payments; Transfers.    The Grantor and any Owner may assign all or
any part of their respective rights to receive distributions or payments hereunder, but such assignment shall effect no change in the ownership of the Trust. To the fullest extent permitted by law, no
Transfer of a beneficial interest in the Trust shall be made by the Grantor, except to an Affiliate or in connection with the sale or disposition of all or substantially all of the Grantor's gas
distribution business, whether by operation of law or otherwise. Prior written notice of any assignment or transfer hereunder shall, unless the Notes have been paid in full, be given by such Grantor
or Owner to the Rating Agencies in the manner specified in the Indenture. 

 
 

ARTICLE III
  COMPLIANCE WITH THE CODE    
  

        3.01    Trust to Be Treated as a Division for Federal Income Tax Purposes.    Based upon the business activities of
the Trust, the Grantor intends that the Trust be treated as a "business trust" under Treasury Regulations section 301.7701-4(b) and as a "business entity" as that term is defined
under Treasury Regulations section 301.7701-2(a). The Grantor represents and agrees that no election shall be made to treat the Trust as a corporation for federal income tax
purposes and that the Trust shall 

5

 

instead be disregarded as an entity separate from the Grantor, pursuant to Treasury Regulations section 301.7701-3(b)(1)(ii). The Beneficiary Trustees shall cause the Trust to
comply with applicable provisions of the Code and the Treasury Regulations in the manner necessary to effect the intention of the parties that the Trust be treated as a division of MPC for federal
income tax purposes pursuant to Treasury Regulation Section 301.7701-3 and that the Trust be accorded such treatment until its termination pursuant to Section 10.01 hereof and shall
take, or refrain from taking, any action required by the Code or Treasury Regulation in order to maintain such status of the Trust. In addition, the Trust may not claim any credit on, or make any
deduction from the principal and interest payable in respect of, the Notes (other than amounts properly withheld under the Code), or assert any claim against any present or former holder of Notes
because of the payment of taxes levied or assessed upon the Trust. 

 
 

ARTICLE IV
  SEPARATE EXISTENCE OF TRUST    
  

        4.01    Maintenance of Separate Existence.    The Trustees shall take all steps necessary to continue the identity of
the Trust as a separate legal entity and to make it apparent to third Persons that the Trust is an entity with assets and liabilities distinct from those of the Grantor, any Owner, the Trustees,
Affiliates of the Grantor or any Owner or any other Person, and that, except for financial reporting purposes (to the extent required by generally accepted accounting principles) and for state and
federal income and franchise tax purposes, it is not a division of any of the Affiliated Entities or any other Person. In that regard, and without limiting the foregoing in any manner, the Trust
shall: 

	(a)
	be
managed by the Trustees who shall make independent decisions with respect to the daily operations and business affairs of the Trust and, except as otherwise provided herein,
neither the Trustees nor the Trust shall be controlled in making such decisions by the Grantor, any Owner, any Affiliated Entity or any other Person;

	(b)
	maintain
at least one Independent Trustee and one Delaware Trustee (who may be the same Person);

	(c)
	if
the office of the Trust is not in the care of the Issuer Trustee, as provided by Section 2.03, maintain office space separate and clearly delineated from the office space of
any Affiliated Entity, owned by the
Trust or evidenced by a written lease or sublease (even if located in an office owned or leased by, or shared with, an Affiliated Entity);

	(d)
	maintain
the assets of the Trust in such a manner that it is not costly or difficult to segregate, identify or ascertain its individual assets from those of any other Person,
including any Affiliated Entity;

	(e)
	if
the office of the Trust is not in the care of the Issuer Trustee, as provided by Section 2.03, maintain a separate telephone number which will be answered only in its own
name, and keep and use separate stationery, checks and other business forms;

	(f)
	conduct
all intercompany transactions with Affiliated Entities on an arm's-length basis and in accordance with Section 4.03;

	(g)
	not
guarantee or become obligated for the debts of any Affiliated Entity or hold the credit of the Trust out as being available to satisfy the obligations of any Affiliated Entity or
other Person, nor have any of the Trust's obligations guaranteed by any Affiliated Entity or hold the Trust out as responsible for the debts of any Affiliated Entity or for the decisions or actions
with respect to the business and affairs of any Affiliated Entity, nor seek or obtain credit or incur any obligation to any third-party based upon the creditworthiness or assets of any Affiliated
Entity or any other Person (i.e., other than based on the assets of the Trust) nor allow any Affiliated Entity to do such things based on the credit of the Trust; 

6

 

	(h)
	except
as expressly otherwise permitted hereunder or under any of the Trust Related Agreements, not permit the commingling or pooling of the Trust's funds or other assets with the
funds or other assets of any Affiliated Entity;

	(i)
	maintain
separate deposit and other bank accounts and funds to which no Affiliated Entity has any access, which accounts shall be maintained in the name and tax identification number
of the Trust;

	(j)
	maintain
full books of accounts and records (financial or other) and financial statements separate from those of the Affiliated Entities or any other Person, prepared and maintained
in accordance with GAAP (including, but not limited to, all resolutions, records, agreements or instruments underlying or regarding the transactions contemplated by the Trust Related Agreements or
otherwise) and will be audited annually by an independent accounting firm which shall provide such audit to the Note Trustee;

	(k)
	compensate
(either directly or through reimbursement of the Trust's allocable share of any shared expenses) all employees, consultants and agents and Affiliated Entities, to the
extent applicable, for services provided to the Trust by such employees, consultants and agents or Affiliated Entities, in each case, from the Trust's own funds and maintain a sufficient number of
employees in light of its contemplated operations;

	(l)
	pay
for its own account for accounting and payroll services, rent, lease and other expenses (or the Trust's allocable share of any such amounts provided by one or more other
Affiliated Entity) and not have such operating expenses (or the Trust's allocable share thereof) paid by any Affiliated Entities, provided that the Grantor shall be permitted to pay the initial
organization expenses of the Trust;

	(m)
	maintain
adequate capitalization in light of the Trust's business and purpose;

	(n)
	conduct
all of the Trust's business (whether in writing or orally) solely in the name of the Trust through its Trustees, employees and agents and hold the Trust out as an entity
separate from any Affiliated Entity;

	(o)
	not
make or declare any distributions of cash or property to the Grantor or any Owner except in accordance with appropriate trust formalities and only consistent with sound business
judgment to the extent that it is permitted pursuant to the Trust Related Agreements and not violative of any applicable law and only if no Significant Event or potential Significant Event then exists
or would result therefrom;

	(p)
	otherwise
practice and adhere to all trust procedures and formalities, such as the holding of regularly scheduled meetings of the Trustees, to the extent required by such formalities
and by this Agreement, the State of Delaware and all other appropriate constituent documents;

	(q)
	not
appoint an Affiliated Entity or any employee of an Affiliated Entity as an agent of the Trust, except as otherwise permitted in the Trust Related Agreements (although such Persons
can qualify as Beneficiary Trustees);

	(r)
	not
acquire obligations or securities of or make loans or advances to or pledge its assets for the benefit of the Grantor, any Owner or any Affiliate of such parties;

	(s)
	not
permit the Grantor, any Owner or any Affiliated Entity to acquire obligations of or make loans or advances to the Trust except as set forth in the Trust Related Agreements;

	(t)
	not
permit the Grantor, any Owner or any Affiliated Entity to guarantee, pay or become liable for the debts of the Trust or permit any such entity to hold out its creditworthiness as
being available to pay the liabilities and expenses of the Trust; 

7

 

	(u)
	maintain
separate minutes of the actions of the Trustees, including of the transactions contemplated by the Trust Related Agreements;

	(v)
	cause
(i) all written and oral communications, including, without limitation, letters, invoices, purchase orders, and contracts, of the Trust to be made solely in the name of
the Trust, (ii) the Trust to have its own tax identification number, stationery, and business forms, separate from those of any Affiliated Entity, (iii) all Affiliated Entities not to
use the stationery or business forms of the Trust, and for the Trust not to use the stationery or business forms of any Affiliated Entity, and (iv) all Affiliated Entities not to conduct
business in the name of the Trust, and the Trust not to conduct business in the name of any Affiliated Entity;

	(w)
	direct
creditors of the Trust to send invoices and other statements of account of the Trust directly to the Trust and not to any Affiliated Entity, and cause the Affiliated Entities
not to direct their creditors to send invoices and other statements of accounts to the Trust;

	(x)
	disclose
in its financial statements the effects of all transactions between the Grantor and the Trust in accordance with generally accepted accounting principles, and in a manner
which makes it clear that the assets of the Trust (including the Transition Property) are not assets of any Affiliated Entity and are not available to pay creditors of any Affiliated Entity;

	(y)
	treat
the transfer of Transition Property from the Grantor to the Trust as a sale under the Statute;

	(z)
	except
as described herein with respect to tax reporting and financial reporting, describe the Trust, and hold the Trust out as a separate legal entity and not as a division or
department of any Affiliate Entity, and promptly correct any known misunderstandings regarding its identity separate from any Affiliated Entity or any Person;

	(aa)
	treat
the Notes as debt obligations of the Trust;

	(bb)
	maintain
its valid existence in good standing under the laws of the State of Delaware and maintain its qualification to do business under the laws of such other jurisdictions as its
operations require; and

	(cc)
	comply
with all laws applicable to the transactions contemplated by this Agreement and the Trust Related Agreements. 

        The
Grantor or, in the event of a Transfer, any Owner shall: 

	(a)
	maintain
as official records all resolutions, agreements, and other instruments underlying or regarding the transactions contemplated by the Trust Related Agreements;

	(b)
	disclose
in its financial statements the effects of all transactions between the Grantor and the Trust in accordance with generally accepted accounting principles, and in a manner
which makes it clear that the assets of the Trust (including the Transition Property) are not assets of any Affiliated Entity and are not available to pay creditors of any Affiliated Entity;

	(c)
	treat
the transfer of Transition Property from the Grantor to the Trust as a sale under the Statute;

	(d)
	if
in accordance with GAAP the assets and liabilities of the Trust are included in the consolidated financial statements of the Grantor, including if the Trust is treated as a
division of MPC, cause the Grantor to prominently and clearly disclose, whether in a footnote or in the notes to such financial statements, that (i) the Trust is a separate legal entity,
(ii) the assets of the Trust are not available to pay the debts of the Grantor or any other Affiliated 

8

 

Entity
and (iii) neither the Grantor nor any other Affiliated Entity is liable or responsible for the debts of the Trust; 

	(e)
	except
as described herein with respect to tax reporting and financial reporting, describe and cause each Affiliated Entity to describe the Trust, and hold the Trust out as a separate
legal entity and not as a division or department of any Affiliate Entity, and promptly correct any known misunderstandings regarding its identity separate from any Affiliated Entity or any Person. 

        4.02    Merger and Other Transactions.    As long as the Notes are outstanding, the Trust may not consolidate with,
merge or convert into another entity or sell all or substantially all of its assets to another entity and dissolve, unless: (i) the entity formed by or surviving such consolidation, merger or
conversion or to
whom all or substantially all of such assets are sold is organized under the laws of the United States, any state thereof or the District of Columbia, (ii) such entity expressly assumes by a
Supplemental Indenture the Trust's obligation to make due and punctual payments upon the Notes and the performance or observance of every agreement and covenant of the Trust under the Indenture,
(iii) no Default or Event of Default (as defined in the Indenture) will have occurred and be continuing immediately after such consolidation, merger, conversion or sale of assets,
(iv) the Rating Agency Condition (as defined in the Indenture) will have been satisfied with respect to such transaction, (v) the Trust has received an opinion of counsel to the effect
that such consolidation, merger, conversion or sale of assets would have no material adverse tax consequence to the Trust or any holders of Notes and such consolidation, merger, conversion or sale of
assets complies with the Indenture and all conditions precedent therein provided relating to such transaction, (vi) none of the Transition Property, the Financing Order or MPC's, the Trust's,
the Note Trustee's or any Noteholder's rights under the Statute or the Financing Order are impaired and (vii) any action that is necessary to maintain the lien and security interest created by
the Indenture will have been taken. Further, the Trust may not sell, transfer, exchange or otherwise dispose of any of its assets, except as expressly permitted by the Indenture, any Supplemental
Indenture, the Servicing Agreement or the Sale Agreement. 

        4.03    Transactions with Affiliates.    The Trust will not enter into, or be a party to, any transaction with any of
its Affiliates, except (i) the transactions contemplated by the Trust Related Agreements and (ii) any other transactions (including, without limitation, the lease of office space or
computer equipment or software by the Trust from an Affiliate of the Trust and the sharing of employees and employee resources and benefits) (A) in the ordinary course of business or as
otherwise permitted hereunder, (B) pursuant to the reasonable requirements and purposes of the Trust's business, (C) upon fair and reasonable terms (and, to the extent material, pursuant
to written agreements) that are on terms and conditions available at the time to the Trust for comparable transactions with unaffiliated Persons and (D) not inconsistent with the terms of
Section 4.01. Unless such transactions are in the ordinary course of business, in which case any of the Trustees, acting singly or collectively, may take all actions necessary to effectuate
such transactions, they will require the approval of a majority of the Trustees, and the Independent Trustee. 

        4.04    Insolvency.    As of the date hereof, neither the Grantor nor the Trust intends to file a voluntary
petition for relief under the Bankruptcy Code or any similar law. No Person may file such a petition on behalf of the Trust other than the Trustees in accordance with this Section 4.04. None of
the Grantor nor any Owner will, prior to the date which is one year and one day after the termination of the Indenture with respect to the Trust, acquiesce, petition or otherwise invoke or cause the
Trust to invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against the Trust under any Federal or state bankruptcy, insolvency or similar law
or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Trust or any substantial part of the property of the Trust, or ordering the winding up
or liquidation of the affairs of the Trust. The Trustees shall not file a bankruptcy or insolvency petition or otherwise institute 

9

 

insolvency or bankruptcy proceedings without the prior written consent of all of the Trustees, including the Independent Trustee. 

        4.05    Compliance with Corporate Formalities.    MPC hereby agrees to observe in all material respects all corporate
procedures and formalities required by its constituent documents and the laws of its state of formation and all other appropriate jurisdictions. 

 
 

ARTICLE V
  INVESTMENT AND APPLICATION OF TRUST FUNDS    
  

        5.01    Investment of Trust Funds.    The provisions of this Article V apply only to funds or Trust Property
that have been released from the lien of the Indenture and are permitted to be held or applied by the Trust. Unless otherwise directed in writing by the Beneficiary Trustees, funds or Trust Property
released by the Note Trustee to the Trust or funds in the possession of the Trust shall be invested and reinvested by the Beneficiary Trustees (or by an independent investment manager appointed in
writing by the Beneficiary Trustees) in Eligible Investments. 

        5.02    Application of Funds.    Income with respect to and proceeds of any funds or Trust Property held by the
Trustees shall be transferred as determined by the Beneficiary Trustees from time to time. 

 
 

ARTICLE VI
  AUTHORITY AND DUTIES OF THE TRUSTEES    
  

        6.01    General Authority.    The Trustees are authorized to take all actions required or permitted to be taken by
them pursuant to the terms of this Agreement and the Trust Related Agreements. 

        6.02    Specific Authority: Special Authority of Beneficiary Trustees.    (a) Notwithstanding any other
provision in this Agreement to the contrary and without the need for any additional consent of any Person, the Beneficiary Trustees, acting singly or collectively, are hereby authorized and directed
to take the following action on behalf of the Trust: (i) execute, deliver and perform any agreements related to the issuance and sale of the Notes, including the Trust Related Agreements, as
necessary, (ii) execute and deliver all certificates and other documents required by any such agreements and (iii) issue and deliver the Notes in accordance with the provisions of such
agreements and the Financing Order and qualify and register the Notes for sale in various states. The Beneficiary Trustees, acting singly or collectively, are authorized to take all actions necessary
or incidental to the day-to-day operations of the Trust. Subject to Section 6.05, all
non-day-to-day matters shall be determined by a majority of the then current Trustees, provided that such majority must include the affirmative vote of the
Independent Trustee (which may also be the Issuer Trustee) for all actions specified in Sections 4.02, 4.03 and 4.04 and any matter that would, if approved by the Trustees, cause the Trust to deviate
from the provisions of
Sections 2.04(a), 2.04(c), 2.05(b), 4.01 and 6.06 of this Agreement. For purposes of determining a majority under this Agreement, each Person that is serving as a Trustee shall be counted as a single
Trustee, even if such Person holds multiple Trustee positions (i.e., the vote of one Person that acts as both Delaware Trustee and Independent Trustee shall be counted only once). 

	(b)
	The
Trust hereby authorizes and directs the Beneficiary Trustees, acting singly or collectively, (i) to file and execute on behalf of the Trust such applications, reports,
surety bonds, irrevocable consents, appointments of attorney for service of process and other papers and documents as shall be necessary or desirable to register the Notes under the securities or
"Blue Sky" laws of such jurisdictions as the Trust may deem necessary or desirable and (ii) to do or cause to be done all such other acts or things and to execute and deliver all such
instruments and documents that any such Beneficiary Trustee shall deem necessary or appropriate to carry out the intent of the foregoing. In the event that any filing referred to above is required by
the state securities or "Blue Sky" laws, to be executed on behalf of the Trust by the Issuer Trustee, then the Issuer Trustee, not in its individual capacity, but solely in 

10

 

its
capacity as trustee of the Trust, is hereby authorized and directed to join in any such filing and to execute on behalf of the Trust any and all of the foregoing. 

	(c)
	Meetings
of the Trustees for the purpose of establishing a majority under this Article VI or otherwise may be called at any time by any of the Trustees upon two days written or
oral notice, stating the time, place and purpose of the meeting, to all Trustees prior to the time of the meeting. In addition, any action required or permitted to be taken at a meeting of the
Trustees may be taken without a meeting upon the written consent of the Trustees who would be necessary to authorize the action at a meeting at which all Trustees were present and voting or upon the
unanimous written consent of the Trustees. The Issuer Trustee shall maintain the minutes of all meetings of the Trustees. Any meeting may be held by means of conference telephone or similar
communications equipment by which all persons participating in the meeting can hear one another. Attendance, whether by telephone or in person, at any meeting of the Trustees shall constitute a waiver
of notice of such meeting. 

        6.03    Accounting and Reports to the Grantor, any Owner, the Internal Revenue Service and Others.    The Trust shall
designate, from time to time, a Beneficiary Trustee which shall, on behalf of the Trust, (i) maintain or cause to be maintained the books of the Trust on a calendar year basis on the accrual
method of accounting, (ii) deliver to the Grantor, any Owner and, unless the Notes are paid in full, the Rating Agencies, within 90 days of the end of each Fiscal Year, or more often, as
may be required by the Code and the regulations thereunder, a copy of the annual financial statement of the Trust for such Fiscal Year and a statement in such form and containing such information as
is necessary and appropriate to enable the Grantor and any Owner to prepare its federal and state income tax returns, (iii) file such tax returns relating to the Trust, cause the Trust to pay
all taxes incurred by it pursuant to federal, state or local income tax law, (iv) cause such tax returns to be signed by the Trust in the manner required by law, and (v) cause to be
mailed to the Grantor and any Owner copies of all such reports and tax returns of the Trust. 

        6.04    Signature of Returns.    The Trustee designated in Section 6.03 shall sign on behalf of the Trust the
tax returns of and all other tax filings of, or on behalf of, the Trust, unless applicable law requires the
Owner to sign such documents, in which case, so long as the Grantor is the Owner and applicable law allows the Grantor to sign any such document, the Grantor shall sign such document. At any time that
the Grantor is not the Owner, or is otherwise not allowed by law to sign any such document, then the party required by law to sign such document shall sign. 

        6.05    Right to Receive Instructions.    In the event that any Trustee is unable to decide between alternative
courses of action for whatever reason, or is unsure as to the application of any provision of this Agreement or any Trust Related Agreement, or such provision is ambiguous as to its application, or
is, or appears to be, in conflict with any other applicable provision, or in the event that this Agreement or any Trust Related Agreement permits any determination by the Trustees or is silent or is
incomplete as to the course of action which the Trustees are required to take with respect to a particular set of facts, any one or more of the Trustees may give notice of such circumstances (in such
form as shall be appropriate under the circumstances) to the Grantor or, in the event of a Transfer, to the Owner or Owners and request instructions from independent, appropriate legal or other
counsel to the Trustees in accordance with Section 7.03 of this Agreement and no Trustee shall have liability to any Person as a result of its good faith actions or omissions in accordance
therewith. 

        6.06    No Duties Except as Specified in This Agreement or in Instructions.    The Trustees shall not have any duty or
obligation to manage, make any payment in respect of, register, record, sell, dispose of or otherwise deal with the Trust Property, prepare or file any tax, securities law or UCC filing or to
otherwise take or refrain from taking any action under, or in connection with, any document contemplated hereby to which the Trustees are a party, except as expressly provided by the terms of this
Agreement or, in the case of the Beneficiary Trustees, the Trust Related Agreements and no 

11

 

implied duties or obligations shall be read into this Agreement or the Trust Related Agreements against the Trustees. The Trustees nevertheless agree that, in the event that claims are made against
any of the Trustees in their individual capacities which result in liens against the Trust Property that are not related to the ownership or the administration of the Trust Property or the
transactions contemplated by the Trust Related Agreements, the Trustee against whom such claims were made shall, at its own cost and expense, promptly take all action as may be necessary to discharge
any liens on any part of the Trust Property resulting from those claims. 

        6.07    No Action Except Under Specified Documents or Instructions.    The Trustees shall not manage, control, use,
sell, dispose of or otherwise deal with any part of the Trust Property except in accordance with the powers granted to and the authority conferred upon the Trustees pursuant to this Agreement and the
Trust Related Agreements. 

 
 

ARTICLE VII
  CONCERNING THE TRUSTEES    
  

        7.01    Acceptance of Trusts and Duties.    The Trustees accept the trusts hereby created and agree to perform their
respective duties hereunder with respect to the same but only upon the terms of this Agreement. The Trustees shall not be personally liable under any circumstances except (i) for their own
willful misconduct or gross negligence, (ii) for liabilities arising from the failure by any of the Trustees to perform obligations expressly undertaken by them in their individual capacity in
the last sentence of Section 6.06, or (iii) for taxes, fees or other charges on, based on or measured by any fees, commissions or compensation received by the Trustees in connection with
any of the transactions contemplated by this Agreement or the Trust Related Agreements. In particular, but not by way of limitation: 

	(a)
	The
Trustees shall not be personally liable for any error of judgment made in good faith by any of the Trustees or a responsible officer thereof;

	(b)
	The
Trustees shall not be personally liable with respect to any action taken or omitted to be taken by the Trustees in good faith in accordance with the instructions delivered
pursuant to Section 6.05;

	(c)
	No
provision of this Agreement shall require the Trustees to expend or risk their personal funds or otherwise incur any financial Liability in the performance of any of their rights
or powers hereunder, if the Trustees shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or Liability is not reasonably assured or provided
to them;

	(d)
	Under
no circumstance shall the Trustees be personally liable for any indebtedness of the Trust under any Trust Related Agreement;

	(e)
	The
Trustees shall not be personally responsible for or in respect of the validity or sufficiency of this Agreement or for the due execution hereof by the Grantor, or for the form,
character, genuineness, sufficiency, value or validity of any Collateral, or for or in respect of the validity or sufficiency of the Trust Related Agreements; and

	(f)
	None
of the Issuer Trustee, the Delaware Trustee or the Independent Trustee shall be charged with any duty to determine compliance by the Trust with the provisions of this Agreement
unless (i) a responsible officer of such Trustee shall, have actual knowledge of non-compliance or (ii) the matter was submitted for the approval of the Trustees in
accordance with the provisions hereof. 

        7.02    Furnishing of Documents.    The Trustees shall furnish to the Grantor and any Owner, promptly upon receipt
thereof, duplicates or copies of all material reports, notices, requests, demands, certificates, financial statements and any other instruments furnished to the Trustees by any party 

12

 

pursuant to the Trust Related Agreements (other than documents originated by or otherwise furnished by the Grantor or any Owner). 

        7.03    Reliance: Advice of Counsel.    (a) The Trustees shall incur no Liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper believed by them to be genuine and believed by them to be signed by
the proper party or parties. The Trustees may accept a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full force and effect. As to any fact or matter the manner of ascertainment of which is not specifically prescribed herein, the
Trustees may for all purposes hereof rely on a certificate, signed by the president or any vice president or by the treasurer or any assistant treasurer or the secretary or any assistant secretary of
the relevant party, as to such fact or matter, and such certificate shall constitute full protection to the Trustees for any action taken or omitted to be taken by them in good faith in reliance
thereon. 

	(b)
	In
the exercise or administration of the trusts hereunder and in the performance of their respective duties and obligations under any of the Trust Related Agreements, the Trustees
(i) may act directly or, at the expense of the Trust in the case of the Issuer Trustee, Delaware Trustee and Independent Trustee, through agents or attorneys pursuant to agreements entered into
with any of them, and the Trustees shall not be liable for the default or misconduct of such agents or attorneys if such agents or attorneys shall have been selected by the Trustees with reasonable
care and (ii) may, at the expense of the Trust in the case of the Issuer Trustee, Delaware Trustee and Independent Trustee, consult with counsel, accountants and other skilled persons to be
selected with reasonable care and employed by them, and the Trustees shall not be liable for anything done, suffered or omitted in good faith by them in accordance with the advice or opinion of any
such counsel, accountants or other skilled persons. 

        7.04    Not Acting in Individual Capacity.    Except as expressly provided in this Article VII, in accepting
the trusts hereby created the Trustees each act solely as trustees hereunder and not in their respective individual capacities, and all Persons having any claim against the Trustees by reason of the
transactions contemplated by this Agreement or the Trust Related Agreements shall look only to the Trust Property for payment or satisfaction thereof. 

 
 

ARTICLE VIII
  COMPENSATION OF TRUSTEES    
  

        8.01    Issuer Trustee's Fees and Expenses.    The Issuer Trustee, Delaware Trustee and Independent Trustee shall
receive compensation for their services hereunder from the Trust Property as are fair, reasonable and customary for the performance of such services and from time to time hereafter as agreed to by the
Beneficiary Trustees, acting singly or collectively, on behalf of the Trust. The Issuer Trustee, Delaware Trustee and Independent Trustee shall be entitled to be reimbursed from the Trust Property in
accordance with the provisions of Article VIII of the Indenture for their reasonable expenses
hereunder, including, without limitation, the reasonable compensation, expenses and disbursements of such agents, representatives, experts and counsel as the Issuer Trustee, Delaware Trustee and
Independent Trustee may employ in connection with the exercise and performance of their rights and duties under this Agreement and the Trust Related Agreements. 

        8.02    Beneficiary Trustees' Fees and Expenses.    The Beneficiary Trustees shall not be compensated by the Trust for
their services performed for or on behalf of the Trust. 

13

 

 
 

ARTICLE IX
  INDEMNIFICATION OF TRUSTEES    
  

        9.01    Scope of Indemnification.    To the fullest extent permitted by law, the Trust shall indemnify the Trustees
against any Liability incurred in connection with any Proceeding in which the Trustees may be involved as a party or otherwise by reason of the fact that such Trustee is or was serving in its capacity
as a Trustee, unless such Liability is based on or arises in connection with the Trustee's own willful misconduct or gross negligence, the failure to perform the obligations set forth in the last
sentence of Section 6.06, or taxes, fees or other charges on, based on or measured by any fees, commissions or compensation received by the Trustees in connection with any of the transactions
contemplated by this Agreement or the Trust Related Agreements. 

 
 

ARTICLE X
  TERMINATION OF TRUST    
  

        10.01    Dissolution of Trust.    (a) The Trust shall dissolve and, after satisfaction of the obligations of
the Trust to any creditors of the Trust as required by applicable law, property -held by the Trust will be distributed to the Grantor or, in the event of a Transfer, to any Owner thirty
years from the date of its creation or sooner, at the option and expense, and upon written instruction of the Grantor or such Owner, but in no event before payment in full of all the Notes and all
fees and expenses under the Trust Related Agreements. The Beneficiary Trustees shall be the liquidators of the Trust and shall be responsible, subject to Section 4.04, for the liquidation of
the Trust in accordance with the Business Trust Act. 

	(b)
	The
bankruptcy of either the Grantor or any Owner or both shall not operate to terminate this Agreement, to dissolve, terminate or annul the Trust, to entitle the Grantor's or any
Owner's legal representatives to claim an accounting or to take any action or Proceeding in any Court for a partition or winding up of the Trust Property, nor otherwise affect the rights, obligations
and liabilities of the parties hereto. 

        10.02    No Termination by Grantor or Owner.    Except as provided in Section 10.01, neither the Grantor nor
any Owner shall be entitled to dissolve or terminate or revoke the Trust established hereunder. 

        10.03    Cancellation of Certificate of Trust.    Upon completion of the winding up of the affairs of the Trust after
dissolution of the Trust in accordance with Section 10.01 or otherwise, the Certificate of Trust shall be canceled by a Beneficiary Trustee's executing and filing a certificate of cancellation
with the Secretary of State of the State of Delaware. 

 
 

ARTICLE XI
  SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES    
  

        11.01    Resignation of Trustee. "Appointment of Successor.    (a) A Trustee may resign at any time without
cause by giving at least 90 days' prior written notice to the Grantor and any Owner, such resignation to be effective upon the acceptance of appointment by a successor Trustee under
Section 11.01(b). In addition, the Grantor or, in the event of a Transfer, any Owner may at any time remove any of the Trustees with or without cause by an instrument in writing delivered to
the Trustee, such removal to be effective upon the acceptance of appointment by a successor Trustee under Section 11.01(b); except that, (i) the Independent Trustee may be removed only
for cause and (ii) neither the Grantor nor any Owner may remove the Independent Trustee (A) after an Event of Default under the Indenture or (B) if the removal of one or more
Trustees would cause the breach of Section 2.05(b). In case of the resignation or removal of a Trustee, the Grantor or, in the event of a Transfer, any Owner may appoint a successor Trustee by
an instrument signed by the Grantor or any Owner, as applicable, subject to Section 2.05(b). If the last remaining Trustee of the Trust resigns or is 

14

 

removed or the Issuer Trustee, the Independent Trustee or Delaware Trustee resigns or is removed and a successor Trustee shall not have been appointed within 30 days after the giving of
written notice of such resignation or the delivery of the written instrument with respect to such removal, such Trustee, the Grantor or any Owner may apply to any court of competent jurisdiction to
appoint a successor Trustee in compliance with Section 2.05(b) to act until such time, if any, as a successor Trustee shall have been appointed as provided above. Any successor Trustee so
appointed by such court shall immediately and without further act be superseded by any successor Trustee appointed as above provided. 

	(b)
	Any
successor Trustee, however appointed, shall execute and deliver to the predecessor Trustee and the Trust an instrument accepting such appointment, and thereupon such successor
Trustee, without further acts, shall become vested with all the estates, properties, rights, powers, duties and trusts of the predecessor Trustee in the trusts hereunder with like effect as if
originally named as a Trustee herein; but nevertheless, upon the written request of such successor Trustee and payment of the predecessor Trustee's fees and expenses, such predecessor Trustee shall
execute and deliver an instrument transferring to such successor Trustee, upon the trusts herein expressed, all the estates, properties, rights, powers, duties and trusts of such predecessor Trustee,
and such predecessor Trustee shall duly assign, transfer, deliver and pay over to such successor Trustee all moneys or other property then held or subsequently received by such predecessor Trustee
upon the trusts herein expressed.

	(c)
	Any
successor Issuer Trustee, however appointed, shall be a bank or trust company incorporated and doing business within the United States of America and having a combined capital and
surplus of at least $550,000,000. Any Person into which any Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person to which all or substantially all the corporate trust business of the Trustee may be transferred, shall, subject to the terms of this
Agreement, be the Trustee of the Trust under this Agreement without further act or consent of any Person. 

 
 

ARTICLE XII
  MISCELLANEOUS    
  

        12.01    Supplements and Amendments.    This Agreement may be amended only by a written instrument signed by the
Grantor, any Owner and a majority of the Trustees (which majority shall include the Independent Trustee) at the time of such amendment. No such amendment may be made unless the Rating Agency Condition
(as defined in the Indenture) is satisfied in connection herewith. No amendment shall affect the rights, liabilities or protections of any Trustee without the written consent of such Trustee. The
Trustees shall be entitled to an opinion of counsel stating that an amendment is authorized or permitted hereunder and under the Trust Related Agreements. 

        12.02    No Legal Title to Trust Property in Grantor and Owner.    Neither the Grantor nor any Owner shall have legal
title to or ownership of any part of the Trust Property. No transfer, by operation of law or otherwise, of any right, title and interest of the Grantor or any Owner in and to their undivided
beneficial interest in the Trust Property hereunder shall operate to terminate this Agreement or the trusts hereunder, to dissolve, terminate or annul the Trust or to entitle any successor transferee
to an accounting or to the transfer to it of legal title to any part of the Trust Property. 

        12.03    Limitations on Rights of Others.    Nothing in this Agreement, whether express (other than
Section 12.07) or implied, shall be construed to give to any Person other than the Trust, the Trustees, the Grantor and any Owner any legal or equitable right, remedy or claim in or to the
Trust Property
or, except for the Grantor and any Owner, under or in respect of this Agreement or any covenants, conditions or provisions contained herein. 

15

 

        12.04    Notices.    Unless otherwise expressly specified or permitted by the terms hereof, all notices shall be in
writing and delivered by hand or mailed by certified mail, postage prepaid, if to the Trustees, addressed to: 

	 
	 	 

	Wilmington Trust Company	 	1100 North Market Street

Wilmington, DE 19890

Attention: Corporate Trust Administration

(302) 651-1000
	

Patrick Corcoran	
 	

1100 North Market Street

Wilmington, DE 19890

Attention: Corporate Trust Administration

(302) 651-1000
	

Ellen Senechal	
 	

1100 North Market Street

Wilmington, DE 19890

Attention: Corporate Trust Administration

(302) 651-1000

or
to such other addresses as the Trustees may have set forth in a written notice to the Grantor, any Owner and the Note Trustee; and if to the Grantor, addressed to: The Montana Power Company, 40
East Broadway, Butte, Montana 59701 or to such other address as the Grantor may have set forth in a written notice to the Trustees and the Note Trustee. All notices to any Owner shall be sent care of
the Grantor to the Grantor's address set forth above or to such other address as such Owner may have set forth in a written notice to the Grantor, the Trustees and the Note Trustee. Whenever any
notice in writing is required to be given by the Trustees hereunder, such notice shall be deemed given and such requirement satisfied 72 hours after such notice is mailed by certified mail,
postage prepaid, addressed
as provided above; any notice given by the Grantor or any Owner to the Trustees shall be effective upon receipt. 

        12.05    Severability.    Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 

        12.06    Separate Counterparts.    This Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 

        12.07    Successors and Assigns.    All covenants and agreements contained herein shall be binding upon, and inure to
the benefit of, the Trustees and their respective successors and assigns and the Grantor, any Owner and their respective successors and permitted assigns, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by the Grantor and any Owner shall bind its successors and permitted assigns. 

        12.08    Headings.    The headings of the various Articles and Sections herein are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof. Any reference to any Article or Section contained in this Agreement shall refer to such Article or Section as set forth in this
Agreement, notwithstanding failure to use the term "hereof," "hereto" or "herein" in connection with such reference. 

        12.09    Governing Law.    This Agreement shall in all respects be governed by, and construed in accordance with, the
laws of the State of Delaware (without regard to conflict of laws principles), including all matters of construction, validity and performance. 

16

  

        IN WITNESS WHEREOF, the parties hereto have duly executed or caused this Agreement to be duly executed by their respective officers hereunto duly authorized, as of the day and year first
above written. 

	 	 	THE MONTANA POWER COMPANY,

as Grantor and Owner
	

 	
 	

By:	

/s/  J.P. PEDERSON      
 Name: J.P. Pederson

Title: V.P., Chief Financial & Information Officer

	

 	
 	
WILMINGTON TRUST COMPANY

as Issuer Trustee, Delaware Trustee and

Independent Trustee
	

 	
 	

By:	

/s/  JAMES P. LAWLER      
 Name: James P. Lawler

Title: Vice President

	

 	
 	
PATRICK CORCORAN, as a Beneficiary Trustee
	

 	
 	

 	

/s/  PATRICK CORCORAN      

	

 	
 	
ELLEN SENECHAL, as a Beneficiary Trustee
	

 	
 	

 	

/s/  ELLEN SENECHAL      

17

 
 
 

EXHIBIT 1
  CERTIFICATE OF TRUST
  OF MPC NATURAL GAS FUNDING TRUST    
  

        THIS Certificate of Trust of MPC Natural Gas Funding Trust (the "Trust") is being fully executed and filed by the undersigned, as trustees, to form a
business trust under the Delaware Business Trust Act (12 Del. C. ss.3801, et seq.) (the "Act"). 

	1.
	Name.    The
name of the business trust formed hereby is MPC Natural Gas Funding Trust.

	2.
	Delaware
Trustee.    The name and business address of the trustee of the Trust with its principal place of business in the State of Delaware are Wilmington Trust Company,
1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust Administration.

	3.
	Effective
Date.    This Certificate of Trust shall be effective as of its filing with the Secretary of State of the State of Delaware. 

        IN
WITNESS WHEREOF, the undersigned have executed this Certificate of Trust in accordance with Section 3811(a)(1) of the Act. 

	PATRICK CORCORAN, not in his

individual capacity, but solely

as trustee of the Trust	 	WILMINGTON TRUST COMPANY

not in its individual capacity,

but solely as trustee of the Trust
	

By:	

/s/  PATRICK CORCORAN      
	
 	

By:	

/s/  JAMES P. LAWLER      
 Name: James P. Lawler

Title: Vice President

	ELLEN SENECHAL, not in her

individual capacity, but solely as

trustee of the Trust	 	 	 
	

 	

/s/  ELLEN SENECHAL      
	
 	

 	

 

18

QuickLinks

Exhibit 4.7(b)

MPC NATURAL GAS FUNDING TRUST TRUST AGREEMENT

dated as of December 11, 1998 AMONG PATRICK CORCORAN and ELLEN SENECHAL, as BENEFICIARY TRUSTEES, WILMINGTON TRUST COMPANY, as ISSUER TRUSTEE, DELAWARE TRUSTEE and INDEPENDENT TRUSTEE and THE MONTANA POWER COMPANY,
 as GRANTOR and OWNER

TABLE OF CONTENTS

ARTICLE I DEFINITIONS

ARTICLE II ORGANIZATION

ARTICLE III COMPLIANCE WITH THE CODE

ARTICLE IV SEPARATE EXISTENCE OF TRUST

ARTICLE V INVESTMENT AND APPLICATION OF TRUST FUNDS

ARTICLE VI AUTHORITY AND DUTIES OF THE TRUSTEES

ARTICLE VII CONCERNING THE TRUSTEES

ARTICLE VIII COMPENSATION OF TRUSTEES

ARTICLE IX INDEMNIFICATION OF TRUSTEES

ARTICLE X TERMINATION OF TRUST

ARTICLE XI SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES

ARTICLE XII MISCELLANEOUS

EXHIBIT 1 CERTIFICATE OF TRUST OF MPC NATURAL GAS FUNDING TRUSTQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 4.7(c)    
  

 
 

TRANSITION PROPERTY PURCHASE AND SALE AGREEMENT
  
    between
  
    MPC NATURAL GAS FUNDING TRUST
  
    Issuer
  
    and
  
    THE MONTANA POWER COMPANY    
  

     Seller  

 Dated as of December 22, 1998  

  

 
 

TABLE OF CONTENTS    
  

	 
	 	 
	 	Page

	

ARTICLE I    DEFINITIONS	
 	

1
	 	SECTION 1.01.	 	Definitions	 	1
	 	SECTION 1.02.	 	Other Definitional Provisions	 	3
	

ARTICLE II    CONVEYANCE OF TRANSITION PROPERTY	
 	

3
	 	SECTION 2.01.	 	Conveyance of Transition Property	 	3
	

ARTICLE III    REPRESENTATIONS AND WARRANTIES OF SELLER	
 	

4
	 	SECTION 3.01.	 	Organization and Good Standing	 	4
	 	SECTION 3.02.	 	Due Qualification	 	4
	 	SECTION 3.03.	 	Power and Authority	 	4
	 	SECTION 3.04.	 	Binding Obligation	 	4
	 	SECTION 3.05.	 	No Proceedings	 	4
	 	SECTION 3.06.	 	No Violation	 	4
	 	SECTION 3.07.	 	Approvals	 	5
	 	SECTION 3.08.	 	The Transition Property	 	5
	

ARTICLE IV    COVENANTS OF THE SELLER	
 	

6
	 	SECTION 4.01.	 	Corporate Existence	 	6
	 	SECTION 4.02.	 	No Liens	 	6
	 	SECTION 4.03.	 	SECTION 4.03	 	7
	 	SECTION 4.04.	 	Notice of Liens	 	7
	 	SECTION 4.05.	 	Compliance with Law	 	7
	 	SECTION 4.06.	 	Covenants Related to Transition Property	 	7
	 	SECTION 4.07.	 	Protection of Title	 	8
	 	SECTION 4.08.	 	Nonpetition Covenants	 	8
	 	SECTION 4.09.	 	Taxes	 	8
	 	SECTION 4.10.	 	Notice of Breach to Rating Agencies	 	8
	

ARTICLE V    THE SELLER	
 	

8
	 	SECTION 5.01.	 	Liability of Seller; Indemnities	 	8
	 	SECTION 5.02.	 	Merger or Consolidation of, or Assumption of the Obligations of, Seller	 	9
	 	SECTION 5.03.	 	Limitation on Liability of Seller and Others	 	10
	

ARTICLE VI    MISCELLANEOUS PROVISIONS	
 	

10
	 	SECTION 6.01.	 	Amendment	 	10
	 	SECTION 6.02.	 	Notices	 	11
	 	SECTION 6.03.	 	Assignment	 	11
	 	SECTION 6.04.	 	Limitations on Rights of Others	 	11
	 	SECTION 6.05.	 	Severability	 	11
	 	SECTION 6.06.	 	Limitations on Rights of Others	 	11
	 	SECTION 6.07.	 	Headings	 	11
	 	SECTION 6.08.	 	Governing Law	 	11
	 	SECTION 6.09.	 	Assignment to Trustee	 	11
	 	SECTION 6.10.	 	Limitation of Liability	 	12

i

 
 

TRANSITION PROPERTY PURCHASE AND SALE    
  

        AGREEMENT dated as of December 22, 1998, between MPC NATURAL GAS FUNDING TRUST, a special purpose Delaware statutory business trust (the "Issuer"), and THE
MONTANA POWER COMPANY, a Montana corporation, as Seller (the "Seller"). 

        WHEREAS
the Issuer desires to purchase the Transition Property created pursuant to the Statute, the Financing Order and the Issuance Advice Letter; and 

        WHEREAS
the Seller is willing to sell such Transition Property to the Issuer. 

        NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows: 

 
 

ARTICLE I
  DEFINITIONS    
  

        SECTION 1.01.    Definitions.    Whenever used in this Agreement, the following words and
phrases shall have the following meanings: 

        "Agreement"
means this Transition Property Purchase and Sale Agreement, as the same may be amended and supplemented from time to time. 

        "CTC-GP
Customers" means (i) all of MPC's present core customers (customers with an annual usage of less than 60,000 MMBTUs), (ii) customers who converted to
transportation service after September 1, 1993, and (iii) those core customers who convert or have converted to transportation service after December 31, 1996.
Non-core customers that began transportation service before September 1, 1993 and new customers connecting since November 1, 1991, not previously MPC customers, that have
annual usage of 60,000 MMBTUs or greater will not be classified as CTC-GP Customers. 

        "CTC-RA
Customers" means all of MPC's customers except (i) Conoco, Inc., (ii) Cenex, Inc. and (iii) new customers who were connected to
MPC's transmission or distribution systems after December 31, 1996 with annual loads of 5,000 Dekatherms or greater. 

        "Customers"
means the CTC-GP Customers and the CTC-RA Customers. 

        "Date
of Breach" means, with respect to the repurchase obligation specified in Section 5.01(b), the date of breach of a representation and warranty that triggers such repurchase
obligation. 

        "Final
Order" means the Final Order No. 5898d of the MPSC with a service date of October 31, 1997, including all exhibits, schedules, appendices and attachments thereto. 

        "Financing
Order" means Order No. 6035a of the MPSC, dated April 27, 1998 with a service date of May 1, 1998, including all exhibits, schedules, appendices and attachments
thereto. 

        "FTA
Assessment Period" means the period during which FTA Charges are assessed, such period ending on the earlier of (i) the date on which all interest and principal on the Notes
have been paid in full and (ii) November 1, 2012. 

        "FTA
Charges" means the nonbypassable, usage-based fixed transition amount charges included in the regular utility bills of Customers and permitted to be levied upon the Customers by the
Financing Order and the Issuance Advice Letter. 

        "Indenture"
means the Indenture dated as of December 22, 1998, between the Issuer and the Trustee, as the same may be amended and supplemented from time to time. 

        "Insolvency
Event" means, with respect to a specified Person, (a) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such
Person or any substantial part of its property in an involuntary case under any applicable Federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or 

 

ordering the winding-up or liquidation of such Person's affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b) the
commencement by such Person of a voluntary case under any applicable Federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry
of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing. 

        "Issuance
Advice Letter" means the Issuance Advice Letter, dated December 15, 1998, filed with the MPSC by the Seller pursuant to the Financing Order, which Issuance Advice Letter
became effective on December 22, 1998. 

        "Issuer"
has the meaning set forth in the preamble of this Agreement. 

        "Lien"
means a security interest, lien, charge, pledge, equity or encumbrance of any kind. 

        "Losses"
has the meaning assigned to that term in Section 5.01(e). 

        "MCA"
means the Montana Code Annotated, as amended from time to time. 

        "MMBTU"
means one million British Thermal Units. 

        "MPC"
means The Montana Power Company, a Montana corporation. 

        "MPSC"
means the Montana Public Service Commission or any successor governmental agency in interest thereto. 

        "MPSC
Regulations" has the meaning assigned to that term in the Servicing Agreement. 

        "Notes"
means the Issuer's 6.20% Transition Bonds issued under the Indenture. 

        "Officer's
Certificate" means a certificate signed by the chairman of the board, the chief executive officer, the president, the vice chairman of the board, any vice president, the
treasurer, any assistant treasurer, the secretary or any assistant secretary of the Seller. 

        "Opinion
of Counsel" means one or more written opinions of counsel who may be an employee of or counsel to the party providing such opinion(s) of counsel, which counsel shall be
acceptable to the party receiving such opinion(s) of counsel. 

        "Repurchase
Date" means the date that is five Business Days after the date that is (i) if the terms of Section 5.01(b)(i)(A) and Section 5.01(b)(i)(B)(ii) are
applicable, two Business Days after the Date of Breach if the Seller fails to make the deposit required by such Section or 180 days after the Date of Breach if the Seller makes the deposit
required by such Section, (ii) if the terms of Section 5.01(b)(ii) are applicable, 30 days after the Seller receives written notice from the Trustee or otherwise becomes
aware of such breach and (iii) if the terms of Section 5.01(b)(i)(A) and Section 5.01(b)(i)(B)(i) are applicable, 180 days after the Date of Breach. 

        "Repurchase
Price" has the meaning specified in Section 5.0 l(b)(i). 

        "Seller"
means The Montana Power Company and its successors in interest to the extent permitted hereunder. 

        "Servicer
Default" means an event specified in Section 7.01 of the Servicing Agreement. 

        "Servicing
Agreement" means that certain Transition Property Servicing Agreement dated as of the date hereof between The Montana Power Company, as Servicer, and the Issuer. 

2

 

        "Statute"
means MCA, Sections 69-3-1401, et seq., and Sections 69-8-103 and 69-8-503 (1997) as further amended
from time to time. 

        "Transition
Costs" has the meaning assigned to that term in Section 69-3-1402(9) of the MCA. 

        "Transition
Property" means the "Transition Property" contemplated by the Financing Order and specifically described in the Issuance Advice Letter. 

        "True-Up
Mechanism Advice Letter" has the meaning assigned to that term in the Servicing Agreement. 

        "Trustee"
means the Person acting as trustee under the Indenture, its successors in interest and any successor trustee under the Indenture. 

        SECTION
1.02.    Other Definitional Provisions.    (a) Capitalized terms used herein and not otherwise defined
herein have the meanings assigned to them in the Indenture. 

	(b)
	All
terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

	(c)
	The
words "hereof", "herein", "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement; Section, Schedule and Exhibit references contained in this Agreement are references to Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without Limitation".

	(d)
	The
definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders
of such terms. 

 
 

ARTICLE II
  CONVEYANCE OF TRANSITION PROPERTY    
  

        SECTION 2.01.    Conveyance of Transition Property.    In consideration of the Issuer's
delivery to, or upon the order of, the Seller of $56,122,403, the Seller does hereby sell, transfer, assign, set over and
otherwise convey to the Issuer, without recourse (subject to the obligations herein), all right, title and interest of the Seller in and to the Transition Property (such sale, transfer, assignment,
set over and conveyance of the Transition Property includes, to the fullest extent permitted by the Statute, the assignment of all revenues, collections, claims, rights, payments, money or proceeds of
or arising from the FTA Charges pursuant to the Financing Order and the Issuance Advice Letter). Such sale, transfer, assignment, set over and conveyance are hereby expressly stated to be a sale and,
pursuant to Section 69-8-503(16) of the MCA, shall be treated as an absolute transfer of all of the Seller's right, title and interest (as in a true sale), and not as a
pledge or other financing, of the Transition Property, other than for federal and state. income and franchise tax purposes. If such sale, transfer, assignment, set over and conveyance are held not to
be a true sale as contemplated by Section 698-503(1 6) of the MCA, then such sale, transfer, assignment, set over and conveyance shall be treated as a pledge of the
Transition Property and the Seller shall be deemed to have granted a security interest to the Issuer in the Transition Property. The Seller takes the position that it has no rights in the Transition
Property to which such a security interest could attach because it has sold all rights in the Transition Property to the Issuer pursuant to Section 69-8-503(16) of the
MCA. 

3

 

 
 

ARTICLE III
  REPRESENTATIONS AND WARRANTIES OF SELLER    
  

        The Seller makes the following representations and warranties, as of the Closing Date, on which the Issuer has relied in acquiring the Transition Property. The
representations and warranties shall survive the sale of the Transition Property to the Issuer and the pledge thereof to the Trustee pursuant to the Indenture. 

        SECTION
3.01.    Organization and Good Standing.    The Seller is duly organized and validly existing as a corporation
in good standing under the laws of the State of Montana, with the power and authority to own its properties and to conduct its business as such properties are currently owned and such business is
presently conducted, and had at all relevant times, and has, the requisite power, authority and legal right to own the Transition Property. 

        SECTION
3.02.    Due Qualification.    The Seller is duly qualified to do business as a foreign corporation in good
standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business shall require such qualifications,
Licenses or approvals (except where the failure to so qualify would not be reasonably likely to have a material adverse effect on the Seller's business, operations, assets, revenues, properties or
prospects). 

        SECTION
3.03.    Power and Authority.    The Seller has the requisite power and authority to execute and deliver this
Agreement and to carry out its terms; the Seller has full power and authority to sell, transfer, assign, set over and otherwise convey the Transition Property to be sold, transferred, assigned, set
over and conveyed to the Issuer and the Seller has duly authorized such sale, transfer, assignment,
set over and conveyance to the Issuer by all necessary corporate action; and the execution, delivery and performance of this Agreement has been duly authorized by the Seller by all necessary corporate
action. 

        SECTION
3.04.    Binding Obligation.    This Agreement constitutes a legal, valid and binding obligation of the Seller
enforceable against the Seller in accordance with its terms, subject to applicable insolvency, reorganization, moratorium, fraudulent transfer and other similar laws relating to or affecting
creditors' rights generally from time to time in effect and to general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing),
regardless of whether considered in a proceeding in equity or at law. 

        SECTION
3.05.    No Proceedings.    There are no proceedings or investigations pending or, to the Seller's knowledge,
threatened before any court, Federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Seller or its properties involving or relating
to the Seller or the Issuer or, to the Seller's knowledge, any other Person: (i) asserting the invalidity of this Agreement, the Indenture or any of the other Basic Documents or the Notes,
(ii) seeking to prevent the issuance of the Notes or the consummation of any of the transactions contemplated by this Agreement, the Indenture or any of the other Basic Documents,
(iii) seeking any determination or ruling that might materially and adversely affect the performance by the Seller of its obligations under, or the validity or enforceability of, this
Agreement, the Indenture, any of the other Basic Documents or the Notes or (iv) which might adversely affect the Federal or state income tax attributes of the Notes. 

        SECTION
3.06.    No Violation.    The consummation of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles
of incorporation or bylaws of the Seller, or any indenture, agreement or other instrument to which the Seller is a party or by which it shall be bound; nor result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other 

4

 

instrument; nor violate any law or any order, rule or regulation applicable to the Seller of any court or of any Federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties. 

        SECTION
3.07.    Approvals.    No approval, authorization, consent, order or other action of, or filing with, any
court, Federal or state regulatory body, administrative agency or other governmental instrumentality is required in connection with the execution and delivery by the Seller of this Agreement, the
performance by the Seller of the transactions contemplated hereby or the fulfillment by the Seller of the terms hereof, except those that have been obtained or made and those that the Seller, in its
capacity as Servicer under the Servicing Agreement, is required to make in the future pursuant to Article IV of the Servicing Agreement. 

        SECTION
3.08.    The Transition Property.    (a) Information.
At the Closing Date, all information provided by the Seller to the Issuer with respect to the Transition Property (including the Expected Amortization Schedule, the Financing Order and the Issuance
Advice Letter) is correct in all material respects. 

	(b)
	Title. The transfer and assignment herein contemplated constitute a sale of the Transition Property from the Seller to the Issuer and
no beneficial interest in or right and title to the Transition Property would be part of the debtor's estate in the event of the filing of a bankruptcy petition by or against the Seller under any
bankruptcy law. No portion of the Transition Property has been sold, transferred, assigned or pledged by the Seller to any Person other than the Issuer. At the Closing Date immediately prior to the
sale hereunder, the Seller owns the Transition Property, free and clear of all Liens and rights of others, no offsets, defenses or counterclaims exist or have been asserted or, to the Seller's
knowledge, threatened with respect thereto and The Montana Power Company, in its capacity as Seller or Servicer, will not at any time assert any Lien against or with respect to any of the Transition
Property.

	(c)
	Transfer Filings. At the Closing Date, the Transition Property has been validly transferred and sold to the Issuer, the Issuer shall
own all such Transition Property, free and clear of all Liens and rights of others, except for such Liens as arise under the Indenture in favor of the holders of the Notes and the Trustee; and all
filings to be made by the Seller (including filings with the MPSC and the Secretary of State of the State of Montana under the MCA) necessary in any jurisdiction to give the Issuer a first priority
perfected ownership or security interest in the Transition Property have been made (subject to such Liens as arise under the Indenture in favor of the holders of the Notes and the Trustee). No further
action, other than any filings required by Section 69-8-503(12) of the MCA, is required to maintain such first priority
perfected ownership or security interest (subject to such Liens as arise under the Indenture in favor of the holders of the Notes and the Trustee).

	(d)
	Financing Order and Issuance Advice Letters; Other Approvals. At the Closing Date, under the laws of the State of Montana and the
United States in effect on the Closing Date, (i) the Financing Order and the Issuance Advice Letter pursuant to which the Transition Property has been created have been duly authorized and
adopted by the MPSC and are in full force and effect; (ii) as of the issuance of the Notes, the Notes are entitled to the protection provided in Sections 69-8-503(3) and
69-8-503(10) of the MCA and, accordingly, the Financing Order, the Transition Property and the Issuance Advice Letter are not revocable by the MPSC and the allocation of
charges among Customer classes set forth in the Final Order does not prohibit the MPSC from approving those adjustments to the FTA Charges required by the first sentence of
Section 69-8-503(3)(e) of the Statute; (iii) neither the State of Montana nor the MPSC may revoke, limit, alter or modify the Transition Property, the Financing
Order or the Issuance Advice Letter relating thereto, and all rights thereunder, in a manner adversely affecting the Noteholders, other than a temporary impairment described in the following 

5

 

sentence,
until the Notes, together with interest thereon, are fully discharged; (iv) the process by which the Financing Order was adopted and approved and the Issuance Advice Letter was
filed, and the Financing Order and the Issuance Advice Letter, themselves, comply with all applicable laws, rules and regulations, and, prior to the discharge in full of the Notes, no court or other
administrative body can order the revocation, alteration, limitation or other impairment of the Financing Order, the Issuance Advice Letter, the Transition Property or the ETA Charges or any rights
arising under any of them or enjoin the performance of any obligations thereunder; and (v) no other approval, authorization, consent,
order or other action of, or filing with, any court, Federal or state regulatory body, administrative agency or other governmental instrumentality is required in connection with the creation of the
Transition Property, except those that have been obtained or made. For purposes of clause (d)(iii) above, a "temporary impairment" shall mean a breach by the State of Montana of its
pledge contained in Section 69-8-503(3)(d) of the MCA effecting a temporary impairment of the Noteholders' rights which under current law would be permitted if it can be
shown to be necessary to advance an important public interest; such an important public interest may arise in connection with a "great public calamity", which might, for example, include economic
upheaval or natural disasters. 

	(e)
	Assumptions. At the Closing Date, the assumptions used in calculating the FTA Charges related to the Transition Property are reasonable
and made in good faith.

	(f)
	Creation of Transition Property. Upon the effectiveness of the Issuance Advice Letter: (i) all of the Transition Property
constitutes a current property right; (ii) the Transition Property includes, without limitation, (A) the right, title and interest in and to the FTA Charges, as adjusted from time to
time, (B) the right to be paid the total amounts set forth in the Issuance Advice Letter, (C) the right, title and interest in and to all revenues, collections, claims, payments, money,
or proceeds of or arising from the FTA Charges set forth in the Issuance Advice Letter, and (D) all rights to obtain adjustments to the ETA Charges pursuant to the Financing Order; and
(iii) the holders of the Transition Property are entitled to recover the Transition Costs described in the Financing Order and the Issuance Advice Letter in the aggregate amount equal to the
principal amount of the Notes, all interest thereon, the Required Overcollateralization Level (as such term is defined in the Servicing Agreement) relating to the Notes, any amount required to
replenish the Capital Subaccount and all related fees, costs and expenses in respect of the Notes and are entitled to assess the ETA Charges necessary to recover such amounts until the end of the ETA
Assessment Period. 

 
 

ARTICLE IV
  COVENANTS OF THE SELLER    
  

        SECTION 4.01.    Corporate Existence.    So long as any of the Notes are outstanding, the
Seller (a) will keep in full force and effect its existence, rights and franchises as a corporation under the laws of the jurisdiction of its incorporation and (b) will obtain and
preserve its qualification to do business, in each case to the extent that in each such jurisdiction such existence or qualification is or shall be necessary to protect the validity and enforceability
of this Agreement, the other Basic Documents to which the Seller is a party and each other instrument or agreement necessary or appropriate to the proper administration of this Agreement and the
transactions contemplated hereby. 

        SECTION
4.02.    No Liens.    Except for the conveyances hereunder, or such Liens as arise under the Indenture in
favor of the holders of the Notes and the Trustee, the Seller will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien on, any of the
Transition Property, or any interest therein, and the Seller shall defend the right, title and interest of the Issuer and the Trustee in, to and under the Transition Property, against all claims of
third parties claiming through or under the Seller. 

6

 

        SECTION
4.03.    Delivery of Collections.    If the Seller receives collections in respect of the ETA Charges or the
proceeds thereof, the Seller agrees to pay the Servicer all payments received by the Seller in respect thereof as soon as practicable after receipt thereof by the Seller, but in no event later than
two Business Days after such receipt. 

        SECTION
4.04.    Notice of Liens.    The Seller shall notify the Issuer and the Trustee promptly after becoming aware
of any Lien on any of the Transition Property other than the conveyances hereunder or such Liens arising under the Indenture. 

        SECTION
4.05.    Compliance with Law.    The Seller hereby agrees to comply with its organizational or governing
documents and all laws, treaties, rules, regulations and determinations of any governmental authority or instrumentality applicable to the Seller, except to the extent that failure to so comply would
not adversely affect the Issuer's or the Trustee's interests in the Transition Property or under any of the Basic Documents or the Seller's performance of its obligations hereunder or under any of the
other Basic Documents to which it is party. 

        SECTION
4.06.    Covenants Related to Transition Property.    (a) So long as any of the Notes are outstanding,
the Seller shall treat the Notes as debt for all purposes to the extent consistent with generally accepted accounting practices. 

	(b)
	So
long as any of the Notes are outstanding, the Seller shall indicate in its financial statements that it is not the owner of the Transition Property.

	(c)
	So
long as any of the Notes are outstanding, the Seller shall not own or purchase any Notes.

	(d)
	The
Seller agrees that upon the sale by the Seller of the Transition Property to the Issuer pursuant to this Agreement, (i) to the fullest extent permitted by law, including
applicable MPSC Regulations, the Issuer shall have all of the rights originally held by the Seller with respect to such Transition Property, including the right to exercise any and all rights and
remedies to collect any amounts payable by any Customer (or any third party supplier who collects from Customers) in respect of such Transition Property, notwithstanding any objection or direction to
the contrary by the Seller and (ii) any payment by any Customer (including any payment by a third party supplier who collects from Customers) to the Issuer shall discharge such Customer's
obligations in respect of such Transition Property to the extent of such payment, notwithstanding any objection or direction to the contrary by the Seller.

	(e)
	So
long as any of the Notes are outstanding (i) the Seller shall not make any statement or reference in respect of the Transition Property that is inconsistent with the
ownership interest of the Issuer, and (ii) the Seller shall not take any action in respect of the Transition Property except solely in its capacity as the Servicer thereof pursuant to the
Servicing Agreement or as otherwise contemplated by the Basic Documents. 

        SECTION
4.07.    Protection of Title.    The Seller shall execute and file such filings, including filings with the
Secretary of State of the State of Montana and the MPSC pursuant to the Statute or the MCA, and cause to be executed and filed such filings, all in such manner and in such places as may be required by
law fully to preserve, maintain, and protect the interests of the Issuer in the Transition Property, including all filings required under the Statute relating to the transfer of the ownership or
security interest in the Transition Property by the Seller to the Issuer. The Seller shall deliver (or cause to be delivered) to the Issuer file-stamped copies of, or filing receipts for,
any document filed as provided above, as soon as available following such filing. The Seller shall institute any action or proceeding necessary to compel performance by the MPSC or the State of
Montana of any of their obligations or duties under the MCA, the Financing Order or the Issuance Advice Letter, and the Seller agrees to take such legal or administrative actions, including defending
against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, as may be reasonably necessary to protect the Issuer and the Noteholders from claims,
state actions or other 

7

 

actions or proceedings of third parties which, if successfully pursued, would result in a breach of any representation set forth in Article III. The costs of any such actions or proceedings
will be payable by the Seller. 

        SECTION
4.08.    Nonpetition Covenants.    Notwithstanding any prior termination of this Agreement or the Indenture,
but subject to the MPSC's right to order the sequestration and payment of revenues arising with respect to the Transition Property notwithstanding any bankruptcy, reorganization or other insolvency
proceedings with respect to the debtor, pledgor or transferor of the Transition Property pursuant to Section 69-8-503(1 5)(b) of the MCA, the Seller shall not, prior to
the date which is one year and one day after the termination of the Indenture, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court or governmental authority
for the purpose of commencing or sustaining a case against the Issuer under any Federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or any substantial part of the property of the Issuer, or ordering the winding up or liquidation of the affairs of the Issuer. 

        SECTION
4.09.    Taxes.    So long as any of the Notes are outstanding, the Seller shall, and shall cause each of its
subsidiaries to, pay all material taxes, assessments and governmental charges imposed upon it or any of its properties or assets or with respect to any of its franchises, business, income or property
before any penalty accrues thereon if the failure to pay any such taxes, assessments and governmental charges would, after any applicable grace periods, notice or other similar requirements, result in
a lien on the Transition Property; provided that no such tax need be paid if the Seller or one of its subsidiaries is contesting the same in good faith by appropriate proceedings promptly instituted
and
diligently conducted and if the Seller or such subsidiary has established appropriate reserves as shall be required in conformity with generally accepted accounting principles. 

        SECTION
4.10.    Notice of Breach to Rating Agencies.    In the event of a breach of any of the Seller's
representations and warranties contained herein, the Seller shall promptly notify the Rating Agencies of such breach. 

 
 

ARTICLE V
  THE SELLER    
  

        SECTION 5.01.    Liability of Seller; Indemnities.    (a) The Seller shall be liable
in accordance herewith only to the extent of the obligations specifically undertaken by the Seller under the Agreement. 

	(b)
	(i) In
the event of a breach by the Seller of any representation and warranty specified in Section 3.08(d) or 3.08(f) that has a material adverse effect on the
Noteholders, the Seller shall repurchase the Transition Property from the Issuer at a purchase price (the "Repurchase Price") equal to the then outstanding principal amount of the Notes and all
accrued and unpaid interest thereon as of the Repurchase Date; provided, however, that the Seller shall not be obligated to repurchase the Transition
Property if (A) within 180 days after the date of the occurrence thereof such breach is cured or the Seller takes remedial action such that there is not and will not be a material
adverse effect on the Noteholders as a result of such breach and (B) either (i) if the Seller had, immediately prior to the breach, a long term debt rating of at least "A-"
or the equivalent by each of the Rating Agencies (or such other long term debt rating as shall be approved by the Rating Agencies), the Seller enters into a binding agreement with the Issuer to pay
any amounts necessary so that all interest payments due on the Notes during such 180-day period will be paid in full, or (ii) if the Seller does not have such long term debt
ratings, the Seller deposits, within two Business Days after such breach, an amount in escrow with the Trustee sufficient, taking into account amounts on deposit in the Collection Account which will
be available for such purpose, to pay all interest payments 

8

 

which
will become due on the Notes during such 180-day period. The Seller will not be in breach of any representation and warranty as a result of a change in law by means of a legislative
enactment, voter initiative, or constitutional amendment. 

	(ii)
	in
the event of a breach by the Seller of any representation and warranty specified in Sections 3.01, 3.03, 3.04, 3.06, 3.08(b) or 3.08(c) that has a material adverse effect on the
Noteholders, if within 30 days after the Seller receives written notice from the Trustee or otherwise becomes aware of such breach, such breach has not been cured and the Seller has not taken
remedial action such that there is not and will not be a material adverse effect on the Noteholders as a result of such breach, then the Seller shall repurchase the Transition Property from the Issuer
for the Repurchase Price on the Repurchase Date.

	(iii)
	Upon
the payment by the Seller of the Repurchase Price pursuant to this Section 5.01(b), neither the Issuer nor any other Person shall have any other claims, rights or
remedies against the Seller for a breach of the foregoing representations and warranties. 

	(c)
	The
Seller shall indemnify the Issuer, the Trustee, and the Noteholders and each of their respective officers, directors, employees, trustees and agents for, and defend and hold
harmless each such Person from and against, any and all taxes (other than any taxes imposed on Noteholders solely as a result of their ownership of Notes) that may at any time be imposed on or
asserted against any such Person as a result of the sate of the Transition Property to the Issuer, including any sales, gross receipts, general corporation, tangible personal property, privilege or
license taxes.

	(d)
	The
Seller shall indemnify the Issuer, the Trustee and the Noteholders and each of their respective officers, directors, employees, trustees and agents for, and defend and hold
harmless each such Person from and against, any and all taxes (other than any taxes imposed on Noteholders solely as a result of their ownership of Notes) that may be imposed on or asserted against
any such Person under existing law as of the Closing Date as a result of the issuance and sale by the Issuer of the Notes or the other transactions contemplated herein, including any sales, gross
receipts, general corporation, tangible personal property, privilege or license taxes.

	(e)
	The
Seller shall indemnify the Issuer, the Trustee and the Noteholders and each of their respective officers, directors, trustees and agents for, and defend and hold harmless each
such Person from and against, any and all liabilities, obligations, losses, damages, payments, costs or expenses of any kind whatsoever (collectively, "Losses") that may be imposed on, incurred by or
asserted against any such Person as a result of (i) the Seller's willful misconduct, bad faith or gross negligence in the performance of its duties or observance of its covenants under this
Agreement, or the Seller's reckless disregard of its obligations and duties under this Agreement or (ii) the Seller's breach of any of its representations or warranties contained in this
Agreement (other than the representations and warranties specified in Section 3.01, 3.03, 3.04, 3.06, 3.08(b), 3.08(c), 3.08(d) or 3.08(f) the breach of which are subject to the repurchase
obligation set forth in Section 5.01(b)).

	(f)
	Indemnification
under Sections 5.01(c) through 5.01(e) shall survive the resignation or removal of the Trustee and the termination of this Agreement and shall include reasonable fees
and expenses of investigation and litigation (including attorneys' fees and expenses). 

        SECTION
5.02.    Merger or Consolidation of, or Assumption of the Obligations of, Seller.    Any Person
(a) into which the Seller may be merged or consolidated, (b) which may result from any merger or consolidation to which the Seller shall be a party or (c) which may succeed to the
properties and assets of the Seller substantially as a whole, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Seller hereunder, shall
be the successor to 

9

 

the    •    Seller under this Agreement without further act on the part of arty of the parties to this Agreement;  provided, however, that (i) prior to giving effect to such transaction, the Seller shall furnish
written notification of the substance of such transaction, (ii) immediately after giving effect to such transaction, no representation or warranty made pursuant to Article III shall have
been breached and (if the Seller is the Servicer) no Servicer Default, and no event which, after notice or lapse of time, or both, would become a Servicer Default shall have occurred and be
continuing, (iii) the Seller shall have delivered to the Issuer, the Trustee and each Rating Agency an Officer's Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied
with, and (iv) the Seller shall have delivered to the Issuer, the Trustee and each Rating Agency an Opinion of Counsel either (A) stating that, in the opinion of such counsel, all
filings to be made by the Seller, including filings with the Secretary of State of the State of Montana and the MPSC pursuant to the MCA, have been executed and filed that are necessary fully to
preserve and protect the interest of the Issuer in the Transition Property and reciting the details of such filings, or (B) stating that, in the opinion of such counsel, no such action shall be
necessary to preserve and protect such interest. Notwithstanding anything herein to the contrary, the execution of the foregoing agreement of assumption and compliance with clauses (i),
(ii) and (iii) above shall be conditions to the consummation of any transaction referred to in clauses (a), (b) or (c) above. 

        SECTION
5.03.    Limitation on Liability of Seller and Others.    The Seller and any director or officer or employee
or agent of the Seller may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person, respecting any matters arising
hereunder. The Seller shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental to its obligations under this Agreement, and that in its opinion
may involve it in any expense or liability. 

 
 

ARTICLE VI
  MISCELLANEOUS PROVISIONS    
  

        SECTION 6.01.    Amendment.    The Agreement may be amended by the Seller and the Issuer, with
the prior written consent of the Trustee, but without the consent of any of the Noteholders, to cure any ambiguity, to correct or supplement any provisions in this Agreement or for the purpose of
adding any provisions to or changing in any manner or eliminating any of the provisions in this Agreement or of modifying in any manner the rights of the Noteholders; provided,
however, that such action shall not, as evidenced by an Officer's Certificate delivered to the Issuer and the Trustee, adversely affect in any material respect the interests of
any Noteholder. Prior to the execution of any such amendment, the Issuer shall furnish written notification of the substance of such amendment to each of the Rating Agencies. 

        This
Agreement may also be amended from time to time by the Seller and the Issuer, with the prior written consent of the Trustee and the prior written consent of the holders of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Noteholders; provided, however, that no such amendment shall (a) increase or reduce in any manner the amount of, or accelerate or delay the
timing of, FTA Collections or (b) reduce the aforesaid percentage of the Outstanding Amount of the Notes, the
Holders of which are required to consent to any such amendment, without the consent of the Holders of all the outstanding Notes. Prior to the execution of any such amendment and the requisite
consents, the Issuer shall furnish written notification of the substance of such amendment or consent to the Trustee and each of the Rating Agencies. 

10

 

        It
shall not be necessary for the consent of Noteholders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. 

        Prior
to its consent to any amendment to this Agreement, the Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that such amendment is authorized or
permitted by this Agreement. The Trustee may, but shall not be obligated to, enter into any such amendment which affects the Trustee's own rights, duties or immunities under this Agreement or
otherwise. 

        SECTION
6.02.    Notices.    All demands, notices and communications upon or to the Seller, the Issuer, the Trustee or
a Rating Agency under this Agreement shall be in writing, personally delivered, mailed or sent by telecopy or other similar form of rapid transmission, and shall be deemed to have been duly given upon
receipt (a) in the case of the Seller, to The Montana Power Company, 40 East Broadway, Butte, Montana 59701 Attention of Patrick R. Corcoran (406) 497-2202, bin the case of
the Issuer, to MPG Natural Gas Funding Trust, c/o Wilmington Trust Company, 1100 North Market Street, Wilmington, DE 19890, Attention: Corporate Trust Administration, (c) in the case of the
Trustee, at the Corporate Trust Office, (d) the case of Fitch IBCA, to Fitch IBCA, Inc. (formerly known as Fitch Investors Service, L.P.), One State Street Plaza, New York, NY 10004,
Attention: ABS Surveillance, (e) in the case of Moody's, to Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New York, NY 10007 or (f) as to each of
the foregoing, at such other address as shall be designated by written notice to the other parties. 

        SECTION
6.03.    Assignment.    Notwithstanding anything to the contrary contained herein, except as provided in
Section 5.02, this Agreement may not be assigned by the Seller. 

        SECTION
6.04.    Limitations on Rights of Others.    The provisions of this Agreement are solely for the benefit of
the Seller, the Issuer, the Trustee and the Noteholders and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy
or claim in the Transition Property or under or in respect of this Agreement or any covenants, conditions or provisions contained herein. 

        SECTION
6.05.    Severability.    Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction. 

        SECTION
6.06.    Separate Counterparts.    This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 

        SECTION
6.07.    Headings.    The headings of the various Articles and Sections herein are for convenience of
reference only and shall not define or limit any of the terms or provisions hereof 

        SECTION
6.08.    Governing Law.    The provisions of this Agreement, and all rights and obligations of the parties
hereunder, shall be governed by and construed in accordance with the law of the State of New York, provided that the nature and extent of the interests of the Seller and the Issuer in the Transition
Property, including without limitation the effectiveness of any transfer of right, title or interest in and to the Transition Property and all proceeds thereof, shall be governed by the law of the
State of Montana. 

        SECTION
6.09.    Assignment to Trustee.    The Seller hereby acknowledges and consents to any mortgage, pledge,
assignment and grant of a security interest by the Issuer to the Trustee pursuant to the Indenture for the benefit of the Noteholders of all tight, title and interest of the Issuer in, to and 

11

 

under the Transition Property and the proceeds thereof and the assignment of any or all of the Issuer's rights hereunder to the Trustee. 

        SECTION
6.10.    Limitation of Liability.    It is expressly understood and agreed by the parties hereto that
(a) this Agreement is executed and delivered by U.S. Bank National Association, not individually or personally but solely as Trustee on behalf of the holders of the Notes, in the exercise of
the powers and authority conferred and vested in it, (b) the representations, undertakings and agreements herein made on the part of the Trustee on behalf of the holders of the Notes are made
and intended not as personal representations, undertakings and agreements by U.S. Bank National Association, but are made and intended for the purpose of binding only the holders of the Notes,
(c) nothing herein contained shall be construed as creating any liability on U.S. Bank National Association, individually or personally, to perform any covenant either expressed or implied
contained herein, except in its capacity as Trustee, all such liability, if any, being expressly waived by the parties who are signatories to this Agreement and by any Person claiming by, through or
under such parties and (d) under no circumstances shall U.S. Bank National Association be personally liable for the payment of any indebtedness or expenses of the holders of the Notes or be
personally liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trustee under this Agreement; provided,
however, that this provision shall not protect U.S. Bank National Association against any liability that would otherwise be imposed by reason of willful misconduct, bad faith
or gross negligence in the performance of its duties or by reason of reckless disregard of its obligations and duties under this Agreement. 

12

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers as of the day and year first above written. 

	 	 	MPC NATURAL GAS FUNDING TRUST,

Issuer,
	

 	
 	

By:	

/s/  PATRICK CORCORAN      
 Title: Beneficiary Trustee
	

 	
 	
THE MONTANA POWER COMPANY,

Seller,
	

 	
 	

By:	

/s/  P.K. MERRILL      
 Title: Vice President and Secretary

	Acknowledged and Accepted:
	
U.S. BANK NATIONAL ASSOCIATION, not

in its individual capacity

but solely as Trustee,
	By:	 	 	 
	 	 	
 Title:	 

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers as of the day and year first above written. 

	 	 	MPC NATURAL GAS FUNDING TRUST,

Issuer,
	

 	
 	

By:	

 
	 	 	 	
 Title:
	

 	
 	
THE MONTANA POWER COMPANY,

Seller,
	

 	
 	

By:	

 
	 	 	 	
 Title:

	Acknowledged and Accepted:
	
U.S. BANK NATIONAL ASSOCIATION, not

in its individual capacity

but solely as Trustee,
	

By:	
 	

/s/        	

 
	 	 	
 Title:Vice President	 

QuickLinks

Exhibit 4.7(c)

TRANSITION PROPERTY PURCHASE AND SALE AGREEMENT between MPC NATURAL GAS FUNDING TRUST Issuer and THE MONTANA POWER COMPANY

TABLE OF CONTENTS

TRANSITION PROPERTY PURCHASE AND SALE

ARTICLE I DEFINITIONS

ARTICLE II CONVEYANCE OF TRANSITION PROPERTY

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER

ARTICLE IV COVENANTS OF THE SELLER

ARTICLE V THE SELLER

ARTICLE VI MISCELLANEOUS PROVISIONS

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