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                                                                    Exhibit 4(a)
                                    GUARANTEE
                                       OF
                              MINNESOTA POWER, INC.

                  For value received,  Minnesota Power, Inc., a corporation duly
organized and existing  under the laws of the State of Minnesota  (herein called
the  "Guarantor"),  hereby fully and  unconditionally  guarantees to the Trustee
under the Indenture,  dated as of May 15, 1996,  between ADESA  Corporation (the
"Company")  and The Bank of New York, as Trustee  (together  with any amendments
thereto,  the "Indenture"),  the payment of the obligations of the Company under
the  Securities of the Second Series and the Indenture  relating to such series,
including, without limitation, (i) the due and punctual payment of the principal
of and premium, if any, and interest on the Securities of the Second Series when
and as the same  shall  become due and  payable,  whether  at  maturity  or upon
redemption or upon declaration or otherwise,  according to the terms thereof and
of the Indenture, and (ii) the due and punctual payment of any amounts which may
be payable by the  Company  under or  pursuant  to the Tax  Indemnity  Agreement
referred  to  in  paragraph  16 of  the  Officer's  Certificate  of  William  T.
Stackhouse,  Chief  Financial  Officer of the Company  dated March 30, 2000 (the
"Tax Indemnity  Payments").  In case of the failure of the Company punctually to
pay any such principal,  premium,  if any, or interest or Tax Indemnity Payment,
the Guarantor hereby agrees to cause any such payment to be made punctually when
and as the same  shall  become due and  payable,  whether  at  maturity  or upon
redemption or upon declaration or otherwise, and as if such payment were made by
the Company. The Guarantor hereby agrees that its obligations hereunder shall be
full and unconditional, irrespective of the validity, legality or enforceability
of the  Securities  of the Second  Series or the  Indenture,  the absence of any
action  to  enforce  the  same,  the  waiver  or  consent  by the  Holder of the
Securities of the Second Series or by the Trustee with respect to any provisions
thereof or of said Indenture,  the recovery of any judgment  against the Company
or any  action  to  enforce  the  same or any  other  circumstance  which  might
otherwise  constitute a legal or equitable  discharge or defense of a guarantor.
The Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger or  bankruptcy  of the  Company,  any
right to require a proceeding first against the Company,  protest or notice with
respect to the  Securities  of the Second Series or the  indebtedness  evidenced
thereby, and all demands whatsoever,  and covenants that this Guarantee will not
be discharged except by complete performance of the obligations contained in the
Securities of the Second Series and in this Guarantee.

                  The Guarantor  hereby  guarantees  that the obligations of the
Company  under the  Securities  of the Second  Series and the  Indenture  to the
extent  related to such series will be paid to the  Trustee  without  set-off or
counterclaim or other reduction  whatsoever  (whether for taxes,  withholding or
otherwise) in lawful currency of the United States of America.

                  The obligations of the Guarantor  hereunder are independent of
the obligations of the Company under the Securities of the Second Series and the
Indenture to the extent related to such series, and a separate action or actions
may be brought and prosecuted  against the Guarantor whether or not an action or
proceeding  is brought  against  the  Company  and whether or not the Company is
joined  in any  such  action  or  proceeding.  The  liability  of the  Guarantor
hereunder  is full and  unconditional  and (to the extent  permitted by law) the
liability  and  obligations  of the Guarantor  hereunder  shall not be released,
discharged,  mitigated,  waived, impaired or affected in whole or in part by any
circumstance  (including any statute of  limitations)  (other than payment) that
might  constitute  a defense  available  to, or  discharge of the Company or the
Guarantor,   including,   without   limitation,   any  termination,   amendment,
modification, addition, deletion, supplement or other change to any of the terms
of the Securities of the Second Series or the Indenture, any failure on the part
of the Trustee or any Holder to enforce,  assert or exercise any right, power or
remedy,  any  waiver,  consent,  extension,  renewal,  indulgence,   compromise,
release,  settlement,  refunding or other action or inaction under or in respect
of any obligation or liability

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of  the  Company  or  the  Guarantor  or  the  Trustee  or  any  Holder,  or any
modification,  compromise, settlement or release by the Trustee, or by operation
of law or otherwise,  of the  obligations  or the liability of the Company under
the Securities of the Second Series, in whole or in part.

                  The  Guarantor  agrees  that if at any time all or any part of
any payment at any time received by the Trustee or the Holders of the Securities
of the Second  Series is or must be rescinded or returned by the Trustee or such
Holders  for  any  reason  whatsoever   (including,   without  limitation,   the
insolvency,  reorganization or bankruptcy of the Company),  then the Guarantor's
obligations hereunder shall, to the extent of the payment rescinded or returned,
be deemed to have continued in existence  notwithstanding  such previous receipt
by the Trustee or such Holders, and the Guarantor's  obligations hereunder shall
continue to be effective or  reinstated,  as the case may be, as if such payment
had never been made.

                  The  failure of the  Trustee  to  enforce  any right or remedy
hereunder,  or promptly to enforce any right or remedy hereunder, or promptly to
enforce any such right or remedy,  shall not  constitute a waiver  thereof,  nor
give rise to any estoppel against the Trustee, nor excuse the Guarantor from its
obligations hereunder.

                  No reference  herein to the Indenture and no provision of this
Guarantee  or of the  Indenture  shall  alter or  impair  the  guarantee  of the
Guarantor, which is absolute and unconditional,  of the due and punctual payment
of the  principal  of and  premium,  if any, and interest on the Security of the
series upon which this Guarantee is endorsed and of any Tax Indemnity Payments.

                  The Guarantor  shall be subrogated to all rights of the Holder
of the  Securities  of the Second  Series  against the Company in respect of any
amounts paid by the Guarantor  pursuant to the provisions of this Guarantee upon
payment by the Guarantor of all amounts due and payable under such Guarantee.

                  This  Guarantee  shall be  irrevocable  unless  terminated  as
provided  herein.  This Guarantee shall be terminated upon the assumption by the
Guarantor of the  obligations  of the Company under the Securities of the Second
Series and the Indenture to the extent related to such series as provided in the
terms of such Securities.

                  All  capitalized  terms used in this  Guarantee  which are not
defined  herein but are defined in the  Indenture  shall have the  meanings  set
forth in the Indenture.

                  This Guarantee shall be deemed to be a contract made under the
laws of the State of New York and  shall for all  purposes  be  governed  by and
construed in accordance with the laws of such State.

SECTION 1.  CONSOLIDATION, MERGER AND SALE OF ASSETS.

                  During the term of this  Guarantee,  the  Guarantor  shall not
consolidate  with or merge into any other  corporation,  or convey or  otherwise
transfer or lease its properties and assets  substantially as an entirety to any
Person, unless

               (a) the corporation  formed by such  consolidation  or into which
      the  Guarantor is merged or the Person  which  acquires by  conveyance  or
      transfer,  or which  leases,  the  properties  and assets of the Guarantor
      substantially  as an  entirety  shall be a Person  organized  and  validly
      existing  under the laws of the United  States,  any State  thereof or the
      District of Columbia,  and shall expressly assume,  the obligations of the
      Guarantor under this Guarantee;

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               (b) immediately  after giving effect to such transaction no Event
      of Default,  and no event  which,  after  notice or lapse of time or both,
      would become an Event of Default,  shall have occurred and be  continuing;
      and

               (c)  the  Guarantor  shall  have  delivered  to  the  Trustee  an
      Officer's  Certificate (as hereinafter  defined) and an Opinion of Counsel
      (as hereinafter  defined),  each stating that such consolidation,  merger,
      conveyance,  or other  transfer or lease and such  supplemental  indenture
      comply  with  this  Guarantee  and that all  conditions  precedent  herein
      provided for relating to such transactions have been complied with.

               Upon any  consolidation  by the  Guarantor  with or merger by the
Guarantor  into any other  corporation or any  conveyance,  or other transfer or
lease of the properties and assets of the Guarantor substantially as an entirety
in  accordance  with this  Section,  the  successor  corporation  formed by such
consolidation  or into which the Guarantor is merged or the Person to which such
conveyance,  transfer or lease is made shall succeed to, and be substituted for,
and may exercise  every right and power of, the Guarantor  under this  Guarantee
and under the terms of the Securities of the Second Series (including assumption
of the  obligations  under the  Securities  of the  Second  Series and under the
Indenture to the extent  related to such series) with the same effect as if such
successor Person had been named as the Guarantor herein, and thereafter,  except
in the  case of a  lease,  the  predecessor  Person  shall  be  relieved  of all
obligations and covenants under this Guarantee.

SECTION 1A.       FINANCIAL INFORMATION.

         During the term of this  Guarantee,  the Guarantor shall deliver to the
holders of the Securities of the Second Series:

         (a)  Quarterly  Statements - promptly,  and in any event within 60 days
after  the end of each  quarterly  fiscal  period  in  each  fiscal  year of the
Guarantor  (other  than the last  quarterly  fiscal  period of each such  fiscal
year), duplicate copies of:

                  (i)   consolidated balance sheets of the Guarantor as at the
         end of such quarter, and

                  (ii)  consolidated  statements  of  income,  cash  flows,  and
         changes in shareholders'  equity, of the Guarantor for such quarter and
         (in the case of the second and third  quarters)  for the portion of the
         fiscal  year ending with such  quarter,  setting  forth in each case in
         comparative  form the  figures  for the  corresponding  periods  in the
         previous fiscal year, all in reasonable detail,  prepared in accordance
         with GAAP applicable to quarterly financial statements  generally,  and
         certified  by an  Authorized  Officer  as  fairly  presenting,  in  all
         material  respects,  the  financial  position  of the  companies  being
         reported on and their results of operations and cash flows,  subject to
         changes resulting from year-end adjustments,

provided,  that delivery within the time period specified above of copies of the
Guarantor's  Quarterly  Report on Form 10-Q which is prepared in compliance with
the  requirements  therefor and which is filed with the  Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section 1A(a);

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         (b) Annual  Statements  -  promptly,  and in any event  within 105 days
after the end of each fiscal year of the Guarantor, duplicate copies of,

                  (i)   consolidated balance sheets of the Guarantor, as at the
         end of such year, and

                  (ii)  consolidated  statements  of  income,  cash  flows,  and
         changes  in  shareholders'  equity,  of the  Guarantor,  for such year,
         setting  forth in each case in  comparative  form the  figures  for the
         previous fiscal year, all in reasonable detail,  prepared in accordance
         with GAAP, certified by an Authorized Officer as fairly presenting,  in
         all material  respects,  the financial  position of the companies being
         reported  on and  their  results  of  operations  and  cash  flows  and
         accompanied  by an opinion  thereon  of  independent  certified  public
         accountants of recognized national standing,  which opinion shall state
         that  such  financial   statements  present  fairly,  in  all  material
         respects,  the financial  position of the companies being reported upon
         and their results of  operations  and cash flows and have been prepared
         in conformity with GAAP, and that the  examination of such  accountants
         in  connection  with  such  financial   statements  has  been  made  in
         accordance with generally  accepted auditing  standards,  and that such
         audit   provides   a   reasonable   basis  for  such   opinion  in  the
         circumstances,

provided  that the  delivery  within  the  time  period  specified  above of the
Guarantor's  Annual Report on Form 10-K for such fiscal year  (together with the
Guarantor's  annual report to  shareholders  if any,  prepared  pursuant to Rule
14a-3  under  the  Exchange  Act)  which are  prepared  in  accordance  with the
requirements  therefor  and which are filed  with the  Securities  and  Exchange
Commission, shall be deemed to satisfy the requirements of this Section 1A(b);

SECTION 2. LIMITATION ON LIENS.

               A. The Guarantor  shall not suffer any Lien (other than Permitted
Liens)  to be  created  or to  exist  upon any  property  (other  than  Excepted
Property) of the Guarantor,  real, personal or mixed, of whatever kind or nature
and  located  in the  State  of  Minnesota,  whether  owned  at the  date of the
execution and delivery of this  Guarantee or hereafter  acquired,  all except as
expressly contemplated in subsection B of this Section.

               B. The provisions of subsection A shall not prohibit the creation
or existence of any Lien on property of the Guarantor which secures indebtedness
for borrowed money if either:

                       1. the Guarantor shall make effective provision whereby
               this Guarantee shall be secured equally and ratably with the
               indebtedness secured by such Lien; or

                       2. the  Guarantor  shall  deliver to the  Trustee  bonds,
               notes or other  evidences  of  indebtedness  secured by such Lien
               (hereinafter  called "Secured  Obligations")  (a) in an aggregate
               principal  amount equal to the aggregate  principal amount of the
               Securities  of the Second Series then  Outstanding,  (b) maturing
               (or being subject to mandatory  redemption) on March 30, 2010 and
               (c)   containing,   in  addition  to  any  mandatory   redemption
               provisions  applicable  to all  Secured  Obligations  outstanding
               under such Lien and any mandatory redemption provisions contained
               therein  pursuant  to  clause  (b)  above,  mandatory  redemption
               provisions  correlative  to  the  provisions,  if  any,  for  the
               mandatory redemption (pursuant to a sinking fund or

                                       4

<PAGE>
               otherwise)  of the  Securities  of the  Second  Series or for the
               redemption  thereof  at the  option of the  Holder,  as well as a
               provision for mandatory  redemption  upon an  acceleration of the
               maturity  of all  Outstanding  Securities  of the  Second  Series
               following an Event of Default  (such  mandatory  redemption to be
               rescinded  upon the  rescission of such  acceleration);  it being
               expressly  understood that such Secured  Obligations (x) may, but
               need  not,  bear  interest,   (y)  may,  but  need  not,  contain
               provisions  for  the  redemption  thereof  at the  option  of the
               issuer,  any such redemption to be made at a redemption  price or
               prices not less than the principal  amount  thereof and (z) shall
               be held by the  Trustee  for the  benefit  of the  Holders of all
               Securities  of the Second  Series  from time to time  Outstanding
               subject to such terms and conditions relating to surrender to the
               Guarantor, transfer restrictions, voting, application of payments
               of principal and interest and other matters as shall be set forth
               in an indenture  supplemental hereto  specifically  providing for
               the delivery to the Trustee of such Secured Obligations.

               C. If the Guarantor shall elect either of the alternatives
described in subsection B, the Guarantor shall deliver to the Trustee:

                       1. an  amendment  to this  Guarantee  (a)  together  with
               appropriate inter-creditor  arrangements,  whereby this Guarantee
               shall be secured by the Lien  referred to in subsection B equally
               and ratably with all other  indebtedness  secured by such Lien or
               (b)  providing  for  the  delivery  to  the  Trustee  of  Secured
               Obligations;

                       2. an  Officer's  Certificate  (a) stating  that,  to the
               knowledge of the signer, (I) no Event of Default has occurred and
               is  continuing  and (II) no event has occurred and is  continuing
               which  entitles the secured  party under such Lien to  accelerate
               the maturity of the indebtedness  outstanding  thereunder and (b)
               stating the aggregate principal amount of indebtedness  issuable,
               and then proposed to be issued, under and secured by such Lien;

                       3. an Opinion of Counsel (a) if this  Guarantee  is to be
               secured by such Lien,  to the effect that all  Securities  of the
               Second  Series then  Outstanding  are  entitled to the benefit of
               such  Lien  equally  and  ratably  with  all  other  indebtedness
               outstanding under such Lien or (b) if Secured  Obligations are to
               be  delivered  to the  Trustee,  to the effect that such  Secured
               Obligations  have been duly issued under such Lien and constitute
               valid  obligations,  entitled to the benefit of such Lien equally
               and ratably with all other  indebtedness  then outstanding  under
               such Lien.

               D. For all purposes of this Guarantee, except as otherwise
expressly provided or unless the context otherwise requires:

                       "EXCEPTED PROPERTY" means

                       (a)  all  cash on hand or in  banks  or  other  financial
               institutions,  deposit  accounts,  shares of stock,  interests in
               general or  limited  partnerships,  bonds,  notes,  evidences  of
               indebtedness and other securities not hereafter paid or delivered
               to,  deposited with or held by the Trustee  hereunder or required
               so to be;
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                       (b) all  contracts,  leases,  operating  agreements,  and
               other  agreements  of  whatsoever  kind and nature;  all contract
               rights,  bills,  notes and other  instruments  and chattel  paper
               (except to the extent that any of the same constitute securities,
               in which case they are  separately  excepted from this  Guarantee
               under clause (a) above); all revenues,  income and earnings,  all
               accounts,  accounts  receivable  and unbilled  revenues,  and all
               rents,  tolls,  issues,  product and  profits,  claims,  credits,
               demands  and  judgments;  all  governmental  and other  licenses,
               permits, franchises, consents and allowances; all patents, patent
               licenses  and other patent  rights,  patent  applications,  trade
               names, trademarks,  copyrights, claims, credits, choses in action
               and other intangible property and general intangibles  including,
               but not limited to, computer software;

                       (c)  all  automobiles,   buses,   trucks,  truck  cranes,
               tractors,  trailers and similar  vehicles and movable  equipment;
               all rolling stock,  rail cars and other railroad  equipment;  all
               vessels, boats, barges and other marine equipment; all airplanes,
               helicopters,  aircraft  engines and other flight  equipment;  all
               parts,  accessories  and supplies used in connection  with any of
               the foregoing;  and all personal  property of such character that
               the  perfection  of a  security  interest  therein  or other Lien
               thereon is not  governed  by the  Uniform  Commercial  Code as in
               effect in the jurisdiction in which such property is located;

                       (d) all goods,  stock in trade,  wares,  merchandise  and
               inventory  held for the purpose of sale or lease in the  ordinary
               course of business; all materials,  supplies, inventory and other
               items of personal  property which are consumable  (otherwise than
               by ordinary  wear and tear) in their use in the  operation of any
               property of the  Guarantor;  all fuel,  including  nuclear  fuel,
               whether  or not  any  such  fuel is in a form  consumable  in the
               operation of any property of the  Guarantor,  including  separate
               components  of any fuel in the  forms in  which  such  components
               exist at any time  before,  during or after the period of the use
               thereof as fuel; all hand and other portable tools and equipment;
               all furniture and furnishings; and computers and data processing,
               data storage,  data  transmission,  telecommunications  and other
               facilities, equipment and apparatus, which, in any case, are used
               primarily  for   administrative   or  clerical  purposes  or  are
               otherwise not necessary for the operation or  maintenance  of the
               facilities, machinery, equipment or fixtures of the Guarantor for
               (i) the  generation,  transmission  or  distribution  of electric
               energy, (ii) the transmission,  storage or distribution of gas or
               (iii) the appropriation, storage, transmission or distribution of
               water;

                       (e) all coal,  ore,  gas, oil and other  minerals and all
               timber,  and all rights and  interests  in any of the  foregoing,
               whether or not such  minerals or timber  shall have been mined or
               extracted or otherwise  separated from the land; and all electric
               energy,  gas  (natural  or  artificial),  steam,  water and other
               products   generated,   produced,   manufactured,   purchased  or
               otherwise acquired by the Guarantor;

                       (f) all real  property,  leaseholds,  gas rights,  wells,
               gathering,  tap or other pipe lines, or facilities,  equipment or
               apparatus,  in any  case  used  or to be used  primarily  for the
               production or gathering of natural gas;

                                       6
<PAGE>

                       (g) all hydroelectric  plants and all lands, power sites,
               flowage rights, water rights, riparian rights, permits, licenses,
               franchises,   privileges,   leaseholds,  water  locations,  water
               appropriations,  ditches,  flumes,  reservoirs,  reservoir sites,
               canals,  raceways,   dams,  dam  sites,  aqueducts,   structures,
               facilities,  equipment,  or apparatus,  in any case used or to be
               used  primarily in connection  with the  Company's  hydroelectric
               plants; and

                       (h) all leasehold interests held by the Guarantor as
               lessee.


                       "LIEN" means any mortgage, deed of trust, pledge,
security  interest,  encumbrance,  easement,  lease,  reservation,  restriction,
servitude,  charge or similar  right and any other lien of any kind,  including,
without limitation, any conditional sale or other title retention agreement, any
lease  in the  nature  thereof,  and  any  defect,  irregularity,  exception  or
limitation in record title.

                       "OFFICER'S  CERTIFICATE" means a certificate signed by an
Authorized Officer and delivered to the Trustee.

"Authorized  Officer" means the Chairman of the Board,  the President,  any Vice
President, the Treasurer, any Assistant Treasurer, or any other officer or agent
of the Guarantor duly  authorized by the Board of Directors to act in respect of
matters relating to this Guarantee.  "Board of Directors" means either the board
of directors of the Guarantor or any committee thereof duly authorized to act in
respect of matters relating to this Guarantee.

                       "OPINION OF COUNSEL" means a written opinion of counsel,
who may be counsel for the Guarantor, or other counsel acceptable to the
Trustee.

                       "PERMITTED  LIENS" means, as of any particular  time, any
of the following:

                       (a) Liens for taxes,  assessments and other  governmental
               charges or  requirements  which are not  delinquent  or which are
               being contested in good faith by appropriate proceedings;

                       (b) mechanics',  workmen's,  repairmen's,  materialmen's,
               warehousemen's  and  carriers'  Liens,  other  Liens  incident to
               construction,  Liens  or  privileges  of  any  employees  of  the
               Guarantor  for salary or wages earned,  but not yet payable,  and
               other  Liens,  including  without  limitation  Liens for worker's
               compensation  awards,  arising in the ordinary course of business
               for charges or requirements which are not delinquent or which are
               being contested in good faith and by appropriate proceedings;

                       (c) Liens in respect of attachments,  judgments or awards
               arising out of judicial or  administrative  proceedings (i) in an
               aggregate amount not exceeding Ten Million Dollars  ($10,000,000)
               or (ii) with  respect  to which the  Guarantor  shall (X) in good
               faith be prosecuting an appeal or other proceeding for review and
               with respect to which the Guarantor  shall have secured a stay of
               execution pending such appeal or other proceeding or (Y) have the
               right to prosecute an appeal or other proceeding for review;

                                       7
<PAGE>

                       (d) easements,  leases,  reservations  or other rights of
               others in, on, over,  and/or across,  and laws,  regulations  and
               restrictions affecting, and defects,  irregularities,  exceptions
               and limitations in title to, the property of the Guarantor or any
               part thereof;  provided,  however,  that such easements,  leases,
               reservations, rights, laws, regulations,  restrictions,  defects,
               irregularities,   exceptions  and   limitations  do  not  in  the
               aggregate  materially  impair  the  use by the  Guarantor  of its
               property  considered  as a whole for the purposes for which it is
               held by the Guarantor;

                       (e) defects,  irregularities,  exceptions and limitations
               in title to real property  subject to  rights-of-way  in favor of
               the Guarantor or otherwise or used or to be used by the Guarantor
               primarily for  right-of-way  purposes or real property held under
               lease,  easement,  license or similar right;  provided,  however,
               that (i) the  Guarantor  shall have  obtained  from the  apparent
               owner or owners of such real property a sufficient  right, by the
               terms  of  the  instrument  granting  such  right-of-way,  lease,
               easement,  license or similar  right,  to the use thereof for the
               purposes  for which the  Guarantor  acquired  the same,  (ii) the
               Guarantor has power under eminent  domain or similar  statutes to
               remove such defects, irregularities, exceptions or limitations or
               (iii) such defects,  irregularities,  exceptions and  limitations
               may be otherwise  remedied  without undue effort or expense;  and
               defects,  irregularities,  exceptions and limitations in title to
               flood lands, flooding rights and/or water rights;

                       (f)  Liens  securing  indebtedness  or other  obligations
               neither  created,  assumed nor guaranteed by the Guarantor nor on
               account of which it customarily  pays interest upon real property
               or  rights  in or  relating  to  real  property  acquired  by the
               Guarantor for the purpose of the  transmission or distribution of
               electric  energy,  gas or water,  for the purpose of  telephonic,
               telegraphic, radio, wireless or other electronic communication or
               otherwise for the purpose of obtaining rights-of-way;

                       (g)  leases  existing  at the date of the  execution  and
               delivery  of this  Guarantee  affecting  properties  owned by the
               Guarantor at said date and renewals and extensions  thereof;  and
               leases affecting such properties  entered into after such date or
               affecting  properties  acquired by the Guarantor  after such date
               which, in either case, (i) have respective terms of not more than
               ten (10) years (including extensions or renewals at the option of
               the  tenant)  or (ii)  do not  materially  impair  the use by the
               Guarantor  of such  properties  for the  respective  purposes for
               which they are held by the Guarantor;

                       (h) Liens vested in lessors,  licensors,  franchisors  or
               permitters  for rent or other  amounts to become due or for other
               obligations or acts to be performed, the payment of which rent or
               the  performance  of which other  obligations or acts is required
               under leases, subleases, licenses, franchises or permits, so long
               as the payment of such rent or other  amounts or the  performance
               of such other  obligations  or acts is not delinquent or is being
               contested in good faith and by appropriate proceedings;

                       (i) controls,  restrictions,  obligations,  duties and/or
               other burdens imposed by federal,  state, municipal or other law,
               or by rules,  regulations or orders of Governmental  Authorities,
               upon  any  property  of the  Guarantor  or the  operation  or

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<PAGE>

               use  thereof  or upon the  Guarantor  with  respect to any of its
               property or the  operation  or use thereof or with respect to any
               franchise,  grant, license, permit or public purpose requirement,
               or any rights  reserved to or  otherwise  vested in  Governmental
               Authorities   to   impose   any  such   controls,   restrictions,
               obligations, duties and/or other burdens;

                       (j) rights  which  Governmental  Authorities  may have by
               virtue of franchises,  grants, licenses, permits or contracts, or
               by virtue of law, to purchase, recapture or designate a purchaser
               of or order  the sale  of,  any  property  of the  Guarantor,  to
               terminate franchises,  grants,  licenses,  permits,  contracts or
               other  rights or to regulate  the  property  and  business of the
               Guarantor;   and  any  and  all   obligations  of  the  Guarantor
               correlative to any such rights;

                       (k) Liens required by law or governmental regulations (i)
               as a condition to the transaction of any business or the exercise
               of any  privilege  or license,  (ii) to enable the  Guarantor  to
               maintain   self-insurance   or  to   participate   in  any  funds
               established  to cover any  insurance  risks,  (iii) in connection
               with  workmen's  compensation,   unemployment  insurance,  social
               security, any pension or welfare benefit plan or (iv) to share in
               the privileges or benefits  required for companies  participating
               in one or more of the arrangements  described in clauses (ii) and
               (iii) above;

                       (l) Liens on property of the Guarantor  which are granted
               by  the  Guarantor  to  secure  duties  or  public  or  statutory
               obligations or to secure,  or serve in lieu of,  surety,  stay or
               appeal bonds;

                       (m) rights  reserved  to or  vested in others to take or
               receive any part of any coal,  ore, gas, oil and other  minerals,
               any timber and/or any electric  capacity or energy,  gas,  water,
               steam and any other products, developed, produced,  manufactured,
               generated, purchased or otherwise acquired by the Guarantor or by
               others on property of the Guarantor;

                       (n) (i) rights and  interests  of Persons  other than the
               Guarantor   arising  out  of  contracts,   agreements  and  other
               instruments to which the Guarantor is a party and which relate to
               the common ownership or joint use of property; and (ii) all Liens
               on the  interests of Persons other than the Guarantor in property
               owned in common by such  Persons and the  Guarantor if and to the
               extent that the  enforcement  of such Liens  would not  adversely
               affect the  interests of the  Guarantor  in such  property in any
               material respect;

                       (o) any restrictions on assignment and/or requirements of
               any  assignee to qualify as a permitted  assignee  and/or  public
               utility or public service corporation;

                       (p) any Liens  which have been bonded for the full amount
               in dispute or for the  payment of which other  adequate  security
               arrangements have been made;

                       (q) grants, by the Guarantor of easements,  ground leases
               or  rights-of-way  in, upon,  over and/or  across the property or
               rights-of-way  of the  Guarantor  for the purpose of roads,  pipe
               lines,  transmission  lines,  distribution  lines,  communication

                                       9
<PAGE>

               lines, railways, removal of coal or other minerals or timber, and
               other  like  purposes,  or for the  joint or  common  use of real
               property,  rights-of-way,  facilities and/or equipment; provided,
               however,  that no such grant shall  materially  impair the use of
               the  property or  rights-of-way  for the  purposes for which such
               property or rights-of-way are held by the Guarantor;

                       (r) Prepaid Liens;

                       (s) Purchase  Money Liens and any other Liens existing or
               placed upon property at the time of, or within one hundred eighty
               (180) days after, the acquisition  thereof by the Guarantor,  and
               any extensions, renewals and/or replacements of any such Liens to
               secure any refundings,  refinancings  and/or  replacements of the
               indebtedness  secured thereby;  provided,  however,  that no such
               Purchase  Money Lien or other  Lien shall  extend to or cover any
               property of the Guarantor other than (i) the property so acquired
               and  improvements,  extensions and additions to such property and
               renewals,  replacements and substitutions of or for such property
               or any part or parts  thereof  and (ii) with  respect to Purchase
               Money  Liens,  other  property   subsequently   acquired  by  the
               Guarantor;

                       (t) Liens on  property  of the  Guarantor  which  secure
               indebtedness  for borrowed money which matures less than one year
               from the date of the  issuance or  incurrence  thereof and is not
               extendible  at the  option  of the  issuer,  and any  extensions,
               renewals  and/or  replacements  of any such  Liens to secure  any
               refundings, refinancings and/or replacements of such indebtedness
               by or with similar indebtedness;

                       (u) Liens   created  or  assumed  by  the  Guarantor  in
               connection  with the issuance of debt  securities the interest on
               which is not  included  in gross  income for  purposes of federal
               income taxation  pursuant to Section 103 of the Internal  Revenue
               Code of 1986, as amended (or any successor provision of law), for
               the purpose of financing, in whole or in part, the acquisition or
               construction  of  property  to be used by the  Guarantor,  to the
               extent that such Lien is required in connection with the issuance
               of such debt securities either by applicable law or by the issuer
               of such debt  securities  or is  otherwise  necessary in order to
               establish or maintain such exclusion  from gross income;  and any
               extensions,  renewals  and/or  replacements  of any such Liens to
               secure any refundings,  refinancings  and/or  replacement of such
               debt securities by or with similar securities;

                       (v) Liens securing  indebtedness or lease obligations (i)
               which are related to the  construction or acquisition of property
               not  previously  owned by the Guarantor or (ii) which are related
               to the  financing  of a  project  involving  the  development  or
               expansion of property of the  Guarantor  and (iii) the obligee in
               respect of which has no recourse to the Guarantor or any property
               of the Guarantor other than the property  constructed or acquired
               with the  proceeds of such  transaction  or the project  financed
               with the proceeds of such transaction (or the proceeds thereof);

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<PAGE>

                       (w) Liens created by the Mortgage and Deed of Trust dated
               September 1, 1945 between the  Guarantor and Irving Trust Company
               (now The Bank of New  York)  and  Richard  H.  West  (Douglas  I.
               MacInnes,  successor),  as Trustees,  as heretofore and hereafter
               supplemented and amended (the  "Mortgage");  and Liens created by
               any other indenture  hereafter executed by the Guarantor pursuant
               to  which  bonds  issued  under  the  Mortgage  are  or are to be
               delivered to the  trustee(s)  under such indenture in a principal
               amount at least equal to the principal  amount of debt securities
               to be secured by such indenture; and

                       (x) in addition to the Permitted Liens defined in clauses
               (a) through  (w) above,  Liens on any  property of the  Guarantor
               (other  than  Excepted  Property)  to  secure   indebtedness  for
               borrowed money (under  circumstances not otherwise  excepted from
               the operation of this Section) in an aggregate  principal  amount
               not  exceeding  2.5% of the total assets of the Guarantor and its
               consolidated  subsidiaries,  as shown on the latest balance sheet
               of the Guarantor and its  consolidated  subsidiaries,  audited by
               independent certified public accountants, dated prior to the date
               of the issuance or incurrence of such indebtedness.

                       "PREPAID LIEN" means any Lien securing indebtedness for
the payment, prepayment or redemption of which there shall have been irrevocably
deposited in trust with the trustee or other  holder of such Lien moneys  and/or
Investment  Securities which (together with the interest  reasonably expected to
be earned from the investment and  reinvestment in Investment  Securities of the
moneys  and/or the  principal of and interest on the  Investment  Securities  so
deposited) shall be sufficient for such purpose; provided, however, that if such
indebtedness is to be redeemed or otherwise prepaid prior to the stated maturity
thereof,  any notice  requisite to such redemption or prepayment shall have been
given in  accordance  with the  instrument  creating  such  Lien or  irrevocable
instructions  to give such notice shall have been given to such trustee or other
holder.  As used  herein,  the term  "Investment  Securities"  means  any of the
following  obligations or securities on which neither the  Guarantor,  any other
obligor on the  Securities  of the Second  Series nor any Affiliate of either is
the obligor: (a) Government  Obligations;  (b) interest bearing deposit accounts
(which may be represented by  certificates  of deposit) in any national or state
bank (which may  include  the  Trustee or any Paying  Agent) or savings and loan
association  which has outstanding  securities rated by a nationally  recognized
rating  organization in either of the two (2) highest rating categories (without
regard  to  modifiers)  for  short  term  securities  or in any of the three (3)
highest  rating   categories   (without  regard  to  modifiers)  for  long  term
securities;  (c) bankers'  acceptances  drawn on and accepted by any  commercial
bank (which may include the Trustee or any Paying  Agent) which has  outstanding
securities rated by a nationally recognized rating organization in either of the
two (2) highest rating  categories  (without regard to modifiers) for short term
securities or in any of the three (3) highest rating categories  (without regard
to  modifiers)  for  long  term  securities;   (d)  direct  obligations  of,  or
obligations  the  principal  of  and  interest  on  which  are   unconditionally
guaranteed  by, any State or Territory  of the United  States or the District of
Columbia, or any political subdivision of any of the foregoing,  which are rated
by a nationally  recognized rating organization in either of the two (2) highest
rating categories  (without regard to modifiers) for short term securities or in
any of the three (3) highest rating categories (without regard to modifiers) for
long  term  securities;  (e)  bonds  or  other  obligations  of  any  agency  or
instrumentality  of the United States;  (f) corporate debt securities  which are
rated by a nationally

                                       11
<PAGE>

recognized  rating  organization  in  either of the two (2)  highest  rating
categories  (without regard to modifiers) for short term securities or in any of
the three (3) highest rating  categories  (without regard to modifiers) for long
term securities;  (g) repurchase agreements with respect to any of the foregoing
obligations or securities with any banking or financial  institution  (which may
include the Trustee or any Paying Agent) which has outstanding  securities rated
by a nationally  recognized rating organization in either of the two (2) highest
rating categories  (without regard to modifiers) for short term securities or in
any of the three (3) highest rating categories (without regard to modifiers) for
long term securities;  (h) securities issued by any regulated investment company
(including any  investment  company for which the Trustee or any Paying Agent is
the advisor), as defined in Section 851 of the Internal Revenue Code of 1986, as
amended,  or any successor  section of such Code or successor  federal  statute,
provided that the portfolio of such investment company is limited to obligations
or securities of the character and investment  quality  contemplated  in clauses
(a) through (f) above and repurchase  agreements which are fully  collateralized
by any of such  obligations  or  securities;  and (i) any other  obligations  or
securities  which may  lawfully be  purchased  by the Trustee in its capacity as
such.

                       "PURCHASE MONEY LIEN" means, with respect to any property
being acquired by the Guarantor, a Lien on such property which

                       (a) is taken or retained by the transferor of such
               property to secure all or part of the purchase price thereof;

                       (b) is  granted  to one or more  Persons  other  than the
               transferor  which, by making advances or incurring an obligation,
               give value to enable the  grantor of such Lien to acquire  rights
               in or the use of such property;

                       (c) is held by a trustee or agent for the  benefit of one
               or more Persons  described  in clause (a) or (b) above,  provided
               that such Lien may be held,  in addition,  for the benefit of one
               or more other Persons which shall have theretofore  given, or may
               thereafter  give,  value to or for the  benefit or account of the
               grantor of such Lien for one or more other purposes; or

                       (d) otherwise constitutes a purchase money mortgage or a
               purchase money security interest under applicable law;

and,  without  limiting the  generality of the  foregoing,  for purposes of this
Guarantee,  the term  Purchase  Money Lien  shall be deemed to include  any Lien
described  above whether or not such Lien (x) shall permit the issuance or other
incurrence of additional indebtedness secured by such Lien on such property, (y)
shall permit the subjection to such Lien of additional property and the issuance
or other  incurrence of additional  indebtedness on the basis thereof and/or (z)
shall have been granted prior to the acquisition of such property,  shall attach
to or otherwise  cover property  other than the property  being acquired  and/or
shall secure  obligations  issued prior and/or subsequent to the issuance of the
obligations delivered in connection with such acquisition.

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<PAGE>


               IN  WITNESS  WHEREOF,  MINNESOTA  POWER,  INC.  has  caused  this
Guarantee  to be  executed  in its  corporate  name by the  manual or  facsimile
signature of its Chairman of the Board of Directors or its  President or any one
of its Vice  Presidents  and its  corporate  seal or a  facsimile  thereof to be
impressed  or  imprinted  hereon,  and the same to be  attested by the manual or
facsimile signature of its Secretary or any one of its Assistant Secretaries.

Dated:  March 30, 2000

                                                MINNESOTA POWER, INC.

[Corporate Seal]

                                                By      /s/ D. G. Gartzke
                                                  ------------------------------
                                                   Senior Vice President-Finance
                                                   And Chief Financial Officer
Attest:

/s/ Philip R. Halverson
----------------------------
Vice President, Secretary
And General Counsel


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