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                                                                  EXHIBIT 10.14


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                               GUARANTY AGREEMENT


                            Dated as of June 30, 2000

                                       by

                            NORTHWESTERN CORPORATION

                                   in favor of

                             BANK OF AMERICA, N.A.,

                                    as Agent



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                               GUARANTY AGREEMENT


                  This GUARANTY AGREEMENT (this "GUARANTY"), dated as of June
30, 2000, is made by NorthWestern Corporation, a Delaware corporation (the
"GUARANTOR"), in favor of Bank of America, N.A., as agent for the Lenders named
in the Credit Agreement referred to below (in such capacity, together with its
successors in such capacity, the "AGENT").

                  The Refunding Credit Agreement, dated as of November 20, 1998
(as the same may be amended, restated, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT"), among Cornerstone Propane, L.P., a
Delaware limited partnership (the "BORROWER"), the Lenders named therein
(individually, a "Lender" and, collectively, the "LENDERS") and the Agent,
provides, on its terms and subject to its conditions, for loans to be made by
the Lenders to the Borrower in an aggregate principal amount not exceeding
$110,000,000.

                  The Guarantor indirectly owns 100% of Cornerstone Propane GP,
Inc., the managing general partner of the Borrower, and 82.5% of SYN Inc., the
special general partner of the Borrower. Cornerstone Propane GP, Inc. and SYN
Inc. collectively own a 1.0101% general partner interest in the Borrower.

                  The Agent and the Lenders would not enter into that certain
First Amendment to Refunding Credit Agreement, dated as of June 30, 2000, with
the Borrower without the Guarantor executing and delivering this Guaranty.

                  To induce the Agent and the Lenders to continue to extend
credit under the Credit Agreement and the other Loan Documents, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor has agreed to guarantee the Guarantied Obligations
(as defined below) to the extent herein provided upon the terms and conditions
of this Guaranty. Accordingly, the Guarantor agrees with the Agent and the
Lenders as follows:

                  SECTION 1. DEFINITIONS.

                  1.01.    DEFINITIONS. Unless otherwise defined herein, all
         capitalized terms used in this Guaranty that are defined in the Credit
         Agreement (including those terms incorporated by reference) shall have
         the respective meanings assigned to them in the Credit Agreement. In
         addition, the following terms shall have the following meanings under
         this Guaranty:

                  "BANKRUPTCY CODE" shall mean Title 11 of the United States
Code, as amended.

                  "GUARANTIED OBLIGATIONS" shall mean any and all Obligations in
respect of principal of Loans payable under the Credit Agreement, it being
acknowledged by the Guarantor that certain extensions of credit under the Credit
Agreement are available on a revolving basis

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and that the Agent and the Lenders shall have the right to apply amounts paid
pursuant to the terms hereof to such of the Guarantied Obligations as they
shall determine.

                  1.02.    INTERPRETATION. In this Guaranty, unless otherwise
         indicated, the singular includes the plural and plural the singular;
         words importing any gender include the other gender; references to
         statutes or regulations are to be construed as including all statutory
         or regulatory provisions consolidating, amending or replacing the
         statute or regulation referred to; references to "writing" include
         printing, typing, lithography and other means of reproducing words in a
         tangible visible form; the words "including," "includes" and "include"
         shall be deemed to be followed by the words "without limitation";
         references to articles, sections (or subdivisions of sections),
         exhibits, annexes or schedules are to this Guaranty; references to
         agreements and other contractual instruments shall be deemed to include
         all subsequent amendments, extensions and other modifications to such
         instruments; and references to Persons include their respective
         successors and permitted assigns and, in the case of Governmental
         Authorities, Persons succeeding to their respective functions and
         capacities.

                  SECTION 2. THE GUARANTEE.

                  2.01.    GUARANTEE. The Guarantor hereby guarantees to the
         Agent and each Lender the timely payment in full when due (whether at
         stated maturity, by acceleration or otherwise) of the Guarantied
         Obligations up to but not exceeding the Guarantied Amount (as defined
         in SECTION 2.09 below) then in effect, in each case strictly in
         accordance with their terms. The Guarantor hereby further agrees that
         if the Borrower shall fail to pay in full when due (whether at stated
         maturity, by acceleration or otherwise) all or any part of the
         Guarantied Obligations, the Guarantor will immediately pay the same up
         to but not exceeding the Guarantied Amount, without any demand or
         notice whatsoever, and that in the case of any extension of time of
         payment or renewal of all or any part of the Guarantied Obligations,
         the same will be timely paid in full when due (whether at extended
         maturity, by acceleration or otherwise) in accordance with the terms of
         such extension or renewal. To the fullest extent permitted by law, this
         Guaranty is absolute, irrevocable and unconditional in nature and is
         made with respect to any and all Guarantied Obligations now existing or
         in the future arising. The Guarantor's liability under this Guaranty
         shall continue until full satisfaction of the Guarantor's obligations
         hereunder. This Guaranty is a guarantee of due and punctual payment and
         performance and not of collectibility.

                  2.02.    ACKNOWLEDGMENTS, WAIVERS AND CONSENTS. The Guarantor
         acknowledges that the obligations undertaken by it under this Guaranty
         involve the guarantee of obligations of Persons other than the
         Guarantor and that such obligations of the Guarantor are, to the
         fullest extent permitted by law, absolute, irrevocable and
         unconditional under any and all circumstances. In full recognition and
         in furtherance of the foregoing, the Guarantor agrees, to the fullest
         extent permitted by law, that:

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    (a)           Without affecting the enforceability or effectiveness of this
         Guaranty in accordance with its terms and without affecting, limiting,
         reducing, discharging or terminating the liability of the Guarantor, or
         the rights, remedies, powers and privileges of the Agent and the
         Lenders under this Guaranty, the Agent and the Lenders may, at any time
         and from time to time and without notice (except as provided in Section
         2.12) or demand of any kind or nature whatsoever:

                           (i)      amend, supplement, modify, extend, renew,
         waive, accelerate or otherwise change the time for payment or
         performance of, or the terms of, all or any part of the Guarantied
         Obligations (including any increase or decrease in the principal
         portion of, or rate or rates of interest on, all or any part of the
         Guarantied Obligations);

                           (ii)     amend, supplement, modify, extend, renew,
         waive or otherwise change, or enter into or give, any Loan Document or
         any agreement, security document, guarantee, approval, consent or other
         instrument with respect to all or any part of the Guarantied
         Obligations, any Loan Document or any such other instrument or any term
         or provision of the foregoing;

                           (iii)    accept or enter into new or additional
         agreements, security documents, guarantees (including letters of
         credit) or other instruments in addition to, in exchange for or
         relative to any Loan Document, all or any part of the Guarantied
         Obligations or any collateral now or in the future serving as security
         for the Guarantied Obligations;

                           (iv)     accept or receive (including from any other
         guarantor) partial payments or performance on the Guarantied
         Obligations (whether as a result of the exercise of any right, remedy,
         power or privilege or otherwise);

                           (v)      accept, receive and hold any additional
         collateral for all or any part of the Guarantied Obligations (including
         from any other guarantor);

                           (vi)     release, reconvey, terminate, waive,
         abandon, allow to lapse or expire, fail to perfect, subordinate,
         exchange, substitute, transfer, foreclose upon or enforce any
         collateral, security documents or guarantees (including letters of
         credit or the obligations of any other guarantor) for or relative to
         all or any part of the Guarantied Obligations;

                           (vii)    apply any collateral or the proceeds of any
         collateral or guarantee (including any letter of credit or the
         obligations of any other guarantor) to all or any part of the
         Guarantied Obligations in such manner and extent as the Agent or any
         Lender may in its discretion determine;

                           (viii)   release any Person (including any other
         guarantor) from any personal liability with respect to all or any part
         of the Guarantied Obligations;

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                           (ix)     settle, compromise, release, liquidate or
         enforce upon such terms and in such manner as the Agent or the Lenders
         may determine or as applicable law may dictate all or any part of the
         Guarantied Obligations or any collateral on or guarantee of (including
         any letter of credit issued with respect to) all or any part of the
         Guarantied Obligations (including with any other guarantor);

                           (x)      consent to the merger or consolidation of,
         the sale of substantial assets by, or other restructuring or
         termination of the existence of the Borrower or any other Person
         (including any other guarantor);

                           (xi)     proceed against the Borrower, the Guarantor
         or any other guarantor of (including any issuer of any letter of credit
         issued with respect to) all or any part of the Guarantied Obligations
         or any collateral provided by any Person and exercise the rights,
         remedies, powers and privileges of the Agent and the Lenders under the
         Loan Documents or otherwise in such order and such manner as the Agent
         or any Lender may, in its discretion, determine, without any necessity
         to proceed upon or against or exhaust any collateral, right, remedy,
         power or privilege before proceeding to call upon or otherwise enforce
         this Guaranty as to any guarantor;

                           (xii)    foreclose upon any deed of trust, mortgage
         or other instrument creating or granting liens on any interest in real
         property by judicial or nonjudicial sale or by deed in lieu of
         foreclosure, bid any amount or make no bid in any foreclosure sale or
         make any other election of remedies with respect to such liens or
         exercise any right of set-off;

                           (xiii)   obtain the appointment of a receiver with
         respect to any collateral for all or any part of the Guarantied
         Obligations and apply the proceeds of such receivership as the Agent or
         any Lender may in its discretion determine (it being agreed that
         nothing in this clause (xiii) shall be deemed to make the Agent or any
         Lender a party in possession in contemplation of law, except at its
         option);

                           (xiv)    enter into such other transactions or
         business dealings with the Borrower, any Subsidiary or Affiliate of the
         Borrower or any other guarantor of all or any part of the Guarantied
         Obligations as the Agent or any Lender may desire; and

                           (xv)     do all or any combination of the actions set
         forth in this SECTION 2.02(a).

    (b)  To the fullest extent permitted by law, the enforceability and
         effectiveness of this Guaranty and the liability of the Guarantor, and
         the rights, remedies, powers and privileges of the Agent and the
         Lenders, under this Guaranty shall not be affected, limited, reduced,
         discharged or terminated, and the Guarantor hereby expressly waives any
         defense now or in the future arising, by reason of:

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                           (i)      the illegality, invalidity or
         unenforceability of all or any part of the Guarantied Obligations, any
         Loan Document or any agreement, security document, guarantee or other
         instrument relative to all or any part of the Guarantied Obligations;

                           (ii)     any disability or other defense with respect
         to all or any part of the Guarantied Obligations of the Borrower, or
         any other guarantor of all or any part of the Guarantied Obligations
         (including any issuer of any letters of credit), including the effect
         of any statute of limitations that may bar the enforcement of all or
         any part of the Guarantied Obligations or the obligations of any such
         other guarantor;

                           (iii)    the illegality, invalidity or
         unenforceability of any security or guarantee (including any letter of
         credit) for all or any part of the Guarantied Obligations or the lack
         of perfection or continuing perfection or failure of the priority of
         any lien on any collateral for all or any part of the Guarantied
         Obligations;

                           (iv)     the cessation, for any cause whatsoever, of
         the liability of the Borrower or any other guarantor of all or any part
         of the Guarantied Obligations (other than, subject to SECTION 2.05, by
         reason of the full payment and performance of all Guarantied
         Obligations);

                           (v)      any failure of the Agent or any Lender to
         marshal assets in favor of the Borrower or any other Person (including
         any other guarantor), to exhaust any collateral for all or any part of
         the Guarantied Obligations, to pursue or exhaust any right, remedy,
         power or privilege it may have against the Borrower, any other
         guarantor of all or any part of the Guarantied Obligations (including
         any issuer of any Letter of Credit) or any other Person or to take any
         action whatsoever to mitigate or reduce such or any other the
         Guarantor's liability under this Guaranty, neither the Agent nor any
         Lender being under any obligation to take any such action
         notwithstanding the fact that all or any part of the Guarantied
         Obligations may be due and payable and that the Borrower may be in
         default of their obligations under any Loan Document;

                           (vi)     any failure of the Agent or any Lender to
         give notice of sale or other disposition of any collateral (including
         any notice of any judicial or nonjudicial foreclosure or sale of any
         interest in real property serving as collateral for all or any part of
         the Guarantied Obligations) for all or any part of the Guarantied
         Obligations to the Borrower, the Guarantor or any other Person or any
         defect in, or any failure by the Guarantor or any other Person to
         receive, any notice that may be given in connection with any sale or
         disposition of any collateral;

                           (vii)    any failure of the Agent or any Lender to
         comply with applicable laws in connection with the sale or other
         disposition of any collateral for all or any part of the Guarantied
         Obligations;

                           (viii)   any judicial or nonjudicial foreclosure or
         sale of, or other election of remedies with respect to, any interest in
         real property or other collateral

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         serving as security for all or any part of the Guarantied Obligations,
         even though such foreclosure, sale or election of remedies may impair
         the subrogation rights of the Guarantor or may preclude the Guarantor
         from obtaining reimbursement, contribution, indemnification or other
         recovery from the Borrower, any other guarantor or any other Person
         and even though the Borrower may not, as a result of such foreclosure,
         sale or election of remedies, be liable for any deficiency;

                           (ix)     any benefits the Borrower, the Guarantor or
         any other guarantor may otherwise derive from Section 580a, 580b, 580d
         or 726 of the California Code of Civil Procedure or any comparable
         provisions of the laws of any other jurisdiction;

                           (x)      any act or omission of the Agent, any Lender
         or any other Person that directly or indirectly results in or aids the
         discharge or release of the Borrower or any other guarantor of all or
         any part of the Guarantied Obligations or any security or guarantee
         (including any Letter of Credit) for all or any part of the Guarantied
         Obligations by operation of law or otherwise;

                           (xi)     any law which provides that the obligation
         of a surety or guarantor must neither be larger in amount nor in other
         respects more burdensome than that of the principal or which reduces a
         surety's or guarantor's obligation in proportion to the principal
         obligation;

                           (xii)    the possibility that the obligations of the
         Borrower to the Agent and the Lenders may at any time and from time to
         time exceed the aggregate liability of the Guarantor under this
         Guaranty;

                           (xiii)   any counterclaim, set-off or other claim
         which the Borrower or any other guarantor has or alleges to have with
         respect to all or any part of the Guarantied Obligations;

                           (xiv)    any failure of the Agent or any Lender to
         file or enforce a claim in any bankruptcy or other proceeding with
         respect to any Person;

                           (xv)     any extension of credit or the grant of any
         Lien under Section 364 of the Bankruptcy Code;

                           (xvi)    any use of cash collateral under Section 363
         of the Bankruptcy Code;

                           (xvii)   any agreement or stipulation with respect to
         the provision of adequate protection in any bankruptcy proceeding of
         any Person;

                           (xviii)  the avoidance of any Lien in favor of the
         Agent or any Lender for any reason;

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                           (xix)    any bankruptcy, insolvency, reorganization,
         arrangement, readjustment of debt, liquidation or dissolution
         proceeding commenced by or against any Person, including any discharge
         of, or bar or stay against collecting, all or any part of the
         Guarantied Obligations (or any interest on all or any part of the
         Guarantied Obligations) in or as a result of any such proceeding;

                           (xx)     any action taken by the Agent or any Lender,
         whether similar or dissimilar to any of the foregoing, that is
         authorized by this SECTION 2.02 or otherwise in this Guaranty or by any
         other provision of any Loan Document or any omission to take any such
         action; or

                           (xxi)    any other circumstance whatsoever, whether
         similar or dissimilar to any of the foregoing, that might otherwise
         constitute a legal or equitable discharge or defense of a surety or
         guarantor, including by reason of California Civil Code Sections 2787
         to 2855, inclusive, and California Code of Civil Procedure Sections
         580a, 580b, 580d or 726, and all successor sections and any future
         judicial decisions or legislation or of any comparable provisions of
         the laws of any other jurisdiction.

    (c)           To the fullest extent permitted by law, the Guarantor
         expressly waives, for the benefit of the Agent and the Lenders, all
         set-offs and counterclaims and all presentments, demands for payment or
         performance, notices of nonpayment or nonperformance, protests, notices
         of protest, notices of dishonor and all other notices or demands of any
         kind or nature whatsoever with respect to the Guarantied Obligations,
         and all notices of acceptance of this Guaranty or of the existence,
         creation, incurring or assumption of new or additional Guarantied
         Obligations. To the fullest extent permitted by law, the Guarantor
         further expressly waives the benefit of any and all statutes of
         limitation and any and all laws providing for the exemption of property
         from execution or for valuation and appraisal upon foreclosure.

    (d)           The Guarantor represents and warrants to the Agent and the
         Lenders that it has established adequate means of obtaining financial
         and other information pertaining to the business, operations and
         condition (financial and otherwise) of the Borrower and its properties
         on a continuing basis and that the Guarantor is now and will in the
         future remain fully familiar with the business, operations and
         condition (financial and otherwise) of the Borrower and its properties.
         The Guarantor further represents and warrants that it has reviewed and
         approved each of the Loan Documents and is fully familiar with the
         transactions contemplated by the Loan Documents and that it will in the
         future remain fully familiar with such transactions and with any new
         Loan Documents and the transactions contemplated by such Loan
         Documents. The Guarantor hereby expressly waives and relinquishes any
         duty on the part of the Agent or the Lenders (should any such duty
         exist) to disclose to the Guarantor or any other guarantor any matter
         of fact or other information related to the business, operations or
         condition (financial or otherwise) of the Borrower or its properties or
         to any Loan Document or the transactions undertaken pursuant to, or
         contemplated by, any such Loan Document, whether now or in the future
         known by the Agent or any Lender.

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    (e)           The Guarantor intends that its rights and obligations shall be
         those expressly set forth in this Guaranty and that, to the fullest
         extent permitted by law, its obligations shall not be affected,
         limited, reduced, discharged or terminated by reason of any principles
         or provisions of law which conflict with the terms of this Guaranty.

    (f)           The Guarantor acknowledges that it benefits from the
         extensions of credit made and to be made by the Lenders to the Borrower
         under the Credit Agreement and the other Loan Documents.

                  2.03.    UNDERSTANDING WITH RESPECT TO WAIVERS AND CONSENTS.
         The Guarantor warrants and agrees that each of the waivers and consents
         set forth in this Guaranty is made voluntarily and unconditionally
         after consultation with outside legal counsel and with full knowledge
         of its significance and consequences, with the understanding that
         events giving rise to any defense or right waived may diminish, destroy
         or otherwise adversely affect rights which such or any other guarantor
         otherwise may have against the Borrower, the Agent, any Lender or any
         other Person or against any collateral. If, notwithstanding the intent
         of the parties that the terms of this Guaranty shall control in any and
         all circumstances, any such waivers or consents are determined to be
         unenforceable under applicable law, such waivers and consents shall be
         effective to the maximum extent permitted by law.

                  2.04.    SUBROGATION. The Guarantor hereby agrees that, until
         the payment and satisfaction in full of all of the Obligations and the
         expiration and termination of the Commitments of the Lenders under the
         Credit Agreement, it shall not exercise any right, remedy, power or
         privilege, such as any right of subrogation, contribution or indemnity
         or related remedy, power or privilege, arising (whether by contract or
         operation of law, including under the Bankruptcy Code) against the
         Borrower or any other guarantor of all or any part of the Guarantied
         Obligations or any collateral for all or any part of the Guarantied
         Obligations by reason of any payment or other performance pursuant to
         the provisions of this Guaranty and, if any amount shall be paid to the
         Guarantor on account of such rights, remedies, powers or privileges, it
         shall hold such amount in trust for the benefit of, and pay the same
         over to, the Agent (for the benefit of the Lenders) on account of the
         Guarantied Obligations. The Guarantor understands that the exercise by
         the Agent or any Bank of any right, remedy, power or privilege that it
         may have under the Loan Documents, any agreement, security document,
         guarantee or other instrument relative to all or any part of the
         Guarantied Obligations or otherwise may affect or eliminate such or any
         other guarantor's right of subrogation or similar recovery against the
         Borrower, any other guarantors or any collateral and that the Guarantor
         may therefore incur partially or totally nonreimbursable liability
         under this Guaranty. Nevertheless, the Guarantor hereby authorizes and
         empowers the Agent and the Lenders to exercise, in its or their sole
         discretion, any combination of such rights, remedies, powers and
         privileges. Upon payment in full of the Obligations and the expiration
         and termination of the Commitments of the Lenders under the Credit
         Agreement, the Agent and the Lenders will cooperate with the Guarantor
         in exercising the Guarantor's rights of subrogation including, without
         limitation, executing such appropriate instruments of


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         assignment of the Guarantied Obligations the Guarantor has paid and
         the Liens on Collateral for the same as Guarantor may reasonably
         request.

                  2.05.    REINSTATEMENT. To the fullest extent permitted by
         law, the obligations of the Guarantor under this Guaranty shall be
         automatically reinstated if and to the extent that for any reason any
         payment by or on behalf of the Borrower, any other guarantor or any
         other Person or any other application of funds (including the proceeds
         of any collateral for all or any part of the Guarantied Obligations) in
         respect of all or any part of the Guarantied Obligations or any amount
         paid under SECTION 2.12(b) or 2.14 is rescinded or must be otherwise
         restored by any holder of such Guarantied Obligations, whether as a
         result of any proceedings in bankruptcy, reorganization or otherwise
         and the Guarantor agrees that it will indemnify the Agent and each
         Lender on demand for all reasonable costs and expenses (including fees
         and expenses of counsel) incurred by the Agent or such Lender in
         connection with such rescission or restoration.

                  2.06.    REMEDIES. The Guarantor hereby agrees that, as
         between it and the Agent and the Lenders, the obligations of the
         Borrower under the Credit Agreement and the other Loan Documents may be
         declared to be forthwith (or may become automatically) due and payable
         as provided in ARTICLE IX of the Credit Agreement for purposes of
         SECTION 2.01 notwithstanding any stay, injunction or other prohibition
         preventing such declaration (or such obligations becoming due and
         payable as against the Borrower) and that, in the event of such
         declaration (or such obligation being deemed due and payable), such
         obligations (whether or not due and payable by the Borrower) shall
         forthwith become due and payable for purposes of SECTION 2.01.

                  2.07.    SEPARATE ACTION. To the fullest extent permitted by
         law, the Agent (or if there is no Agent, the Required Lenders) may
         bring and prosecute a separate action or actions against the Guarantor
         whether or not the Borrower, any other guarantor or any other Person is
         joined in any such action or a separate action or actions are brought
         against the Borrower, any other guarantor, any other Person, or any
         collateral for all or any part of the Guarantied Obligations. The
         obligations of the Guarantor under, and the effectiveness of, this
         Guaranty are not conditioned upon the existence or continuation of any
         other guarantee (including any letter of credit) of all or any part of
         the Guarantied Obligations. By its acceptance hereof, each Lender
         agrees that this Guaranty may be enforced only by action of the Agent
         upon the instructions of the Required Lenders (or if there is no Agent,
         the Required Lenders) and that no Lender shall have any right
         individually to seek to enforce or to enforce this Guaranty.

                  2.08.    SUBORDINATION OF INDEBTEDNESS OF THE BORROWER AND THE
         RESTRICTED SUBSIDIARIES. The Guarantor agrees that any indebtedness of
         the Borrower or the Restricted Subsidiaries now or in the future owed
         to the Guarantor is hereby subordinated to the Guarantied Obligations
         (to the extent of the Guarantied Amount), enforceable in accordance
         with the terms of this SECTION 2.08. At any time when the Agent shall
         have demanded payment under this Guaranty in accordance with its terms,
         if the Agent so requests in a writing delivered to the Guarantor unless
         and until the

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         Guarantor's obligations hereunder shall have been paid in full, any
         such indebtedness collected by the Guarantor shall be collected, and
         any such indebtedness then or thereafter due and payable and not paid
         when due shall be enforced and payments thereon received, by the
         Guarantor as trustee for the Agent and shall, so long as such
         application is not prevented by an injunction, stay or other court
         order, be paid over to the Agent (for the benefit of the Lenders) in
         kind for application to the Guarantor's obligations hereunder and by
         acceptance of any such payment, the Agent, on behalf of the Lenders,
         agrees that the same will be so applied so long as the Borrower has
         effectively consented to such application. If, after the Agent's
         request, the Guarantor fails to collect or enforce any such
         indebtedness or to pay the proceeds of such indebtedness to the Agent,
         the Agent as the Guarantor's attorney-in-fact may do such acts and sign
         such documents in the Guarantor's name and on the Guarantor's behalf as
         the Agent reasonably considers necessary or desirable to effect such
         collection, enforcement or payment, the Agent being hereby appointed
         the Guarantor's attorney-in-fact for such purpose.

                  2.09.    LIMITATION ON GUARANTEE. Notwithstanding any other
         provision of this Guaranty to the contrary, the aggregate amount that
         the Guarantor may be required to pay under this Guaranty shall not
         exceed $40,000,000 or such amount, greater than $40,000,000, as the
         Guarantor may most recently have specified in a written notice given to
         the Agent (the "GUARANTIED AMOUNT"), together with any interest on
         overdue amounts and costs and expenses (including fees and expenses of
         counsel) payable under SECTION 5.03 hereof; PROVIDED, that the
         Guarantied Amount shall be reduced on a dollar for dollar basis by
         amounts turned over to the Agent pursuant to SECTION 2.08 for
         application to the Guarantied Obligations as contemplated by said
         SECTION 2.08 unless such application has not been effectively consented
         to by the Borrower or is prevented by an injunction, stay or other
         court order; and, PROVIDED, FURTHER, that so long as no Event of
         Default has occurred and is continuing and no Event of Default would
         result from such reduction and the Guarantor is in compliance with all
         of its material obligations hereunder, the Guarantor may from time to
         time reduce the Guarantied Amount to an amount not less than
         $40,000,000 upon five Business Days' written notice to the Agent.
         Except as set forth in the preceding sentence, the Guarantor shall have
         no other payment obligation under this Guaranty, including SECTIONS
         2.08 and 2.11. It is expressly intended and agreed by the Guarantor
         that the obligations and liability of the Guarantor hereunder cover
         only a portion of the Obligations and that the Obligations are and may
         continue to be in excess of the Guarantied Obligations. Accordingly, if
         at any time the amount of the Obligations exceeds the amount of the
         Guarantied Obligations, the Agent shall have the right, at its sole and
         absolute discretion, to apply any amounts received by the Agent, for
         the benefit of the Lenders, in repayment of the Obligations from any
         source other than the Guarantor or the Borrower as an obligor of the
         Guarantor to the extent provided in SECTION 2.08, first to any portion
         of the Obligations that is not a portion of the Guarantied Obligations
         and only after those portions of the Obligations that are not part of
         the Guarantied Obligations have been indefeasibly paid in full, apply
         any such repayments to the reduce the Guarantied Obligations. In no
         event shall

                                      10
<PAGE>

         amounts applied to any portion of the Obligations that is not part of
         the Guarantied Obligations reduce the Guarantor's liability hereunder.

                  2.10.    REVOCATION. To the fullest extent permitted by law,
         the Guarantor hereby waives all right of revocation with respect to the
         Guarantied Obligations (it being understood and agreed that no
         reduction of the Guarantied Amount to an amount not less than
         $40,000,000 to the extent permitted under SECTION 2.09 shall constitute
         a revocation for purposes of this sentence).

                  2.11.    RIGHT TO OFFSET BALANCES. The Guarantor agrees that,
         in addition to (and without any limitation of) any right of set-off,
         banker's lien or counterclaim a Lender may otherwise have, each Lender
         shall be entitled, at its option but only with the prior written
         consent of the Required Lenders or the Agent, to offset balances held
         by it for the account of the Guarantor at any of its offices, in
         Dollars or in any other currency, against any Obligations of the
         Borrower to such Lender that are not paid when due (regardless of
         whether such balances are then due to the Guarantor). Any Lender so
         entitled shall promptly notify the Guarantor and the Agent of any
         offset effected by it; PROVIDED, HOWEVER, that such Bank's failure to
         give such notice shall not affect the validity of such offset.

                  2.12.    NOTICE PRIOR TO CERTAIN ACTIONS; PURCHASE OF LOANS BY
         THE GUARANTOR.

    (a)           The Agent agrees to provide not less than 30 days' written
         notice to the Guarantor (an "ACTION NOTICE") prior to taking any of the
         following actions (provided that no such notice need be given with
         respect to any of the following actions that has been agreed or
         consented to in writing by the Borrower in advance of the taking
         thereof): releasing, reconveying, terminating, waiving, subordinating,
         exchanging, substituting, transferring, settling, compromising,
         releasing, liquidating, foreclosing upon or enforcing any collateral
         for all or any part of the Guarantied Obligations; PROVIDED, HOWEVER,
         that the Agent may provide less than 30 days' (but under no
         circumstances less than 10 days') prior written notice of any such
         action to the Guarantor if the Agent reasonably determines that
         providing a full 30 days' prior notice would materially and adversely
         affect the interests of the Agent and the Lenders. The failure of the
         Agent to give any such prior notice when required shall not relieve the
         Guarantor of its liability hereunder except to the extent that the
         action taken reduces or eliminates subrogation rights which the
         Guarantor has obtained, or would obtain, by virtue of payments made or
         required to be made by it under this Guaranty.

    (b)           Upon the receipt of an Action Notice, the Guarantor may, by
         prior facsimile notice (confirmed in writing) to the Agent (a "PURCHASE
         NOTICE"), elect:

                           (i)      to purchase, without recourse, all of the
         Commitments and the Loans ratably from the Lenders pursuant to Section
         11.11.3 of the Credit Agreement at a price equal to 100% of the
         principal amount thereof plus fees then owing and accrued and unpaid
         interest calculated to the date of such purchase specified

                                      11
<PAGE>

         in the Purchase Notice (which purchase date shall be a date not more
         than ten (10) days from the date the Purchase Notice is telecopied to
         the Agent), together with the provision of cash collateral or the
         making of other arrangements satisfactory to the Issuer in its sole
         discretion with respect to the maximum aggregate amount that is or at
         any time thereafter may become available for drawing under any
         outstanding Letters of Credit (whether or not any beneficiary shall
         have presented, or shall be entitled at such time to present, the
         drafts or other documents required to draw under such Letters of
         Credit); or

                           (ii)     to purchase, without recourse, a portion of
         the Loans ratably from the Lenders at a price equal to 100% of the
         principal amount thereof plus accrued and unpaid interest thereon
         calculated to the date of such purchase specified in the Purchase
         Notice (which purchase date shall be a date not more than ten (10) days
         from the date the Purchase Notice is telecopied to the Agent), an
         undivided participating interest in all of the right, title and
         interest of the Lenders in the Loans (collectively, the "PARTICIPATING
         INTERESTS").

If the Guarantor makes either of the foregoing elections, the Lenders shall sell
to the Guarantor on a ratable basis their Loans or a Participating Interest in
their Loans, as the case may be, in such amounts as requested by the Guarantor
in its notice to the Agent. Subject to SECTION 2.05, this Guaranty shall
automatically terminate upon the consummation of any purchase of all of the
Commitments and the Loans and the provision of cash collateral or the making of
other arrangements satisfactory to the Issuer with respect to outstanding
Letters of Credit, in each case pursuant to SECTION 2.12(b)(i).

                  2.13.    PARTICIPATING INTERESTS. In the event the Guarantor
         elects to purchase Participating Interests pursuant to SECTION
         2.12(b)(ii):

    (a)           (i)      All rights of the Guarantor to receive any payment or
         other recovery with respect to its Participating Interests (including,
         without limitation, any distribution in respect of proceeds of
         Collateral and any subrogation, contribution or reimbursement claims)
         are hereby made expressly subordinate to the rights of the Lenders to
         receive payment (including, without limitation, in respect of
         distributions of proceeds of Collateral or other recovery) in full in
         cash of the Obligations owing to them; and

                           (ii)     no Lender selling a Participating Interest
shall be under any Obligation to pay any amount in respect of such Participating
Interest to the Guarantor until such Lender has received payment in full in cash
of all Obligations owing to such Lender and the Commitments of such Lender have
been terminated.

    (b)           With respect to any Loans in which the Guarantor has purchased
         a Participating Interest, the Guarantor shall have all of the rights
         and privileges of a Participant; provided, however, that for purposes
         of the Credit Agreement, the Intercreditor Agreement and the other Loan
         Documents, until the Commitments shall have been terminated and the
         Obligations owing to the Lenders shall have been paid in full in cash:

                                      12
<PAGE>

                           (i)      The Guarantor shall not be entitled to
         require any Lender to take or refrain from taking any action under the
         Credit Agreement (including, without limitation, in respect of Section
         11.1 thereof) or under any other Loan Document;

                           (ii)     The Guarantor shall not be considered a
         Lender for any purpose of the Credit Agreement (including, without
         limitation, for purposes of Sections 5.3, 5.4, 5.5, 5.6, 5.8, 11.3 and
         11.4 thereof), the Intercreditor Agreement or any other Loan Document;
         and

                           (iii)     The Guarantor shall have no right or
         obligation under Section 5.9 of the Credit Agreement and no obligation
         pursuant to Section 10.7 of the Credit Agreement.

    (c)           The Lenders shall have no responsibilities except those
         expressly set forth herein or in the Credit Agreement and the documents
         related thereto. The Lenders shall not be responsible to the Guarantor
         for (i) any recitals, statements, representations or warranties
         contained in any of the aforesaid documents or in any certificate or
         other document referred to or provided for therein; (ii) the
         genuineness, legality, value, validity, binding effect, enforceability
         or sufficiency of the Credit Agreement or any other document or
         instrument related to or delivered in connection with the Credit
         Agreement; (iii) the fulfillment of any condition or the performance of
         any obligation or covenant by the Borrower or any other Person; (iv)
         the collectability of any amount due under the Credit Agreement or any
         other Loan Document; or (v) the financial or other condition of the
         Borrower or any other Person. The Guarantor is able to make and has
         made its own independent investigation and determination of the
         foregoing matters and the Guarantor accepts its responsibility
         therefor. The Agent shall provide the Guarantor with copies of any
         notice of default provided to the Agent and the Lenders by the
         Borrower; provided, however, that neither the Agent's nor the Lenders'
         failure to provide the Guarantor with any such notice shall relieve the
         Guarantor of any of its obligations under this Guaranty.

    (d)           No Lender shall be deemed to be an agent for the Guarantor in
         connection with the Participating Interests, any Loans, the Loan
         Documents or any documents related thereto. No Lender shall, in the
         absence of bad faith, gross negligence or willful misconduct, be liable
         to the Guarantor with respect to anything such Lender may do or omit to
         do with respect to the Credit Agreement, the other Loan Documents and
         the transactions contemplated thereby, including any Participating
         Interests purchased by the Guarantor. Finally, any Lender may accept
         deposits from, make loans or otherwise extend credit to, and generally
         engage in any kind of banking business with the Borrower or any other
         Person or entity having obligations relating to the Participating
         Interests or the Loans, and receive payment on such Loans, and
         otherwise act with respect thereto freely and without accountability in
         the same manner as if this Guaranty did not exist. Without limiting the
         generality of the foregoing, each Lender may without liability rely
         upon the advice of legal counsel, accountants and other experts and
         upon

                                      13
<PAGE>

         any written communication or any telephone conversation which such
         Lender believes to be genuine and correct or to have been signed, sent
         or made by the proper entity.

    (e)           In the handling of the Participating Interests purchased
         hereunder, the Lenders shall exercise the same degree of care that the
         Lenders exercise in the making and handling of similar interests for
         their own account. It is expressly understood that the Lenders may,
         without the prior consent of the Guarantor, give or withhold agreement
         to any modification of the Credit Agreement or any other Loan Document,
         grant any waivers (including, without limitation, a waiver of
         conditions precedent or a waiver of any Default or Event of Default) or
         consents in respect thereof, and exercise or refrain from exercising
         any other rights or remedies which the Lenders may have under the
         aforesaid documents.

    (f)           The Guarantor agrees that on demand it will reimburse and
         indemnify each of the Agent and the Lenders (each such Person, an
         "INDEMNIFIED PARTY") from and against any and all liabilities,
         obligations, losses, damages, penalties, judgments, actions, and suits
         (whether or not such Indemnified Party is involved as a party to any
         litigation), as well as costs, expenses, fees, or disbursements of any
         kind or nature whatsoever, including legal fees and disbursements,
         which may be incurred by, asserted against or imposed on such
         Indemnified Party by any Person in connection with the Participating
         Interests (including, without limitation, purchases and repurchases of
         the Participating Interests pursuant to the terms of this Guaranty),
         this Guaranty or any other documents related thereto, or which may
         arise out of the enforcement of any rights under this Guaranty or any
         document related thereto, to the extent not caused by the gross
         negligence or willful misconduct of such Indemnified Party. The
         liabilities of the Guarantor under this SECTION 2.13(g) shall survive
         the termination of the Credit Agreement and this Guaranty.

                  2.14.    PURCHASE OF LOANS BY THE GUARANTOR. Without limiting
         its rights under SECTION 2.12, the Guarantor may at any time, by prior
         facsimile notice (confirmed in writing) to the Agent, elect to
         purchase, without recourse, all of the Commitments and the Loans
         ratably from the Lenders pursuant to Section 11.11.3 of the Credit
         Agreement at a price equal to 100% of the principal amount thereof plus
         accrued and unpaid interest calculated to the date of such purchase
         specified in such notice (which purchase date shall be a date not more
         than ten (10) days from the date the Purchase Notice is telecopied to
         the Agent), together with the provision of cash collateral or the
         making of other arrangements satisfactory to the Issuer in its sole
         discretion with respect to the maximum aggregate amount that is or at
         any time thereafter may become available for drawing under any
         outstanding Letters of Credit (whether or not any beneficiary shall
         have presented, or shall be entitled at such time to present, the
         drafts or other documents required to draw under such Letters of
         Credit). Upon any such election by the Guarantor, the Lenders shall
         sell all of their Loans to the Guarantor. Subject to SECTION 2.05, this
         Guaranty shall automatically terminate upon the consummation of any
         purchase of all of the Commitments and the Loans and the provision of
         cash collateral or the making of other arrangements satisfactory to the
         Issuer with respect to outstanding Letters of Credit, in each case
         pursuant to this SECTION 2.14.

                                      14
<PAGE>

                  SECTION 3.        REPRESENTATIONS AND WARRANTIES OF GUARANTOR.
As of the date hereof and as of the date of each extension of credit by the
Lenders, the Guarantor represents and warrants to the Agent and the Lenders
that:

                  3.01.    EXISTENCE. The Guarantor is a corporation duly
         incorporated, validly existing and in good standing under the laws of
         the state of its incorporation, has the power and authority and the
         legal right to own and operate its properties, to lease the properties
         it operates and to conduct its business, is duly qualified and in good
         standing under the laws of each jurisdiction where its ownership, lease
         or operation of properties or the conduct of its business requires such
         qualification, and is in compliance with all laws except to the extent
         that noncompliance would not have a material adverse effect on the
         condition (financial or otherwise), business, operations assets or
         properties of the Guarantor and its Subsidiaries, taken as a whole.

                  3.02.    LITIGATION. No litigation, investigation or
         proceeding of or before an arbitrator or Governmental Authority is
         pending or, to the knowledge of the Guarantor after due and diligent
         investigation, threatened by or against the Guarantor or against its
         properties or revenues which, if determined adversely, could have a
         material adverse effect on the condition (financial or otherwise),
         business, operations assets or properties of the Guarantor and its
         Subsidiaries, taken as a whole.

                  3.03.    NO BREACH. None of the execution and delivery of this
         Guaranty, the consummation of the transactions contemplated by this
         Guaranty or compliance with the terms and provisions of this Guaranty
         will conflict with or result in a breach of, or require any consent
         under, the corporate charter or by-laws of the Guarantor, or any law,
         regulation, decree, ruling, judgment or order that is applicable to the
         Guarantor or its properties or other assets, or any agreement or
         instrument to which the Guarantor is a party or by which it is bound or
         to which it is subject, or constitute a default under, or result in the
         acceleration or mandatory prepayment of, any Indebtedness evidenced by,
         or termination of, any such agreement or instrument, or result in the
         creation or imposition of any Lien upon any property of the Guarantor
         pursuant to the terms of any such agreement or instrument.

                  3.04.    NECESSARY ACTION. The Guarantor has the corporate
         power and authority and the legal right to make, deliver and perform
         this Guaranty and the Guarantor has taken all necessary action to
         authorize the execution, delivery and performance of this Guaranty.
         This Guaranty has been duly executed and delivered by the Guarantor,
         and constitutes a legal, valid and binding obligation of the Guarantor,
         enforceable against the Guarantor in accordance with its terms, except
         as enforceability may be limited by (a) applicable bankruptcy,
         insolvency, reorganization, moratorium, fraudulent conveyance,
         fraudulent transfer or other similar laws relating to or affecting the
         rights of creditors generally, (b) general principles of equity
         (regardless of whether considered in a proceeding in equity or at law),
         including, without limitation (i) the possible unavailability of
         specific performance, injunctive relief or any other equitable remedy,
         and (ii) concepts of materiality, reasonableness, good faith and fair
         dealing, and

                                      15
<PAGE>

         (c) rights of indemnification or contribution being limited by Federal
         and state securities laws and the public policy underlying such laws.

                  3.05.    APPROVALS. No consent or authorization of, filing
         with, or other act by or in respect of any federal or state
         Governmental Authority, is required in connection with the execution,
         delivery, performance, validity or enforceability of this Guaranty.

                  3.06.    TAXES. The Guarantor has filed all United States
         Federal income tax returns and all other material tax returns that are
         required to be filed by it and has paid all taxes due pursuant to such
         returns or pursuant to any assessment received by the Guarantor and all
         other related penalties and charges. The charges, accruals and reserves
         on the books of the Guarantor in respect of taxes and other
         governmental charges are, in the opinion of the Guarantor, adequate.
         The Guarantor has not given or been requested to give a waiver of the
         statute of limitations relating to the payment of any Federal or other
         taxes.

                  3.07.    CERTAIN REGULATIONS. The Guarantor (i) is not a
         "holding company," or a "subsidiary company" of a "holding company," or
         an "affiliate" of a "holding company" or of a "subsidiary company" of a
         "holding company," within the meaning of the Public Utility Holding
         Company Act of 1935, (ii) is not and is not required to be registered
         as an "investment company" under the Investment Company Act of 1940 and
         (iii) is not subject to any other law, rule or regulation restricting
         its ability to incur Indebtedness or to issue guaranties.

                  SECTION 4. COVENANTS OF GUARANTOR.

                  So long as this Guaranty is in effect and until the earlier of
(x) the date on which all of the Obligations shall have been paid in full and
the expiration and termination of the Commitments of the Lenders under the
Credit Agreement and (y) the date on which the Guarantor shall have paid the
Guarantied Amount and the other amounts due to the Agent and the Lenders under
SECTION 5.03 hereof, the Guarantor agrees as follows:

                  4.01.    REPORTING REQUIREMENTS. The Guarantor shall deliver
         to the Agent for distribution to the Lenders, promptly after the
         sending or filing thereof, copies of all regular, periodic and special
         reports, and all registration statements, which the Guarantor files
         with the Securities and Exchange Commission or any Governmental
         Authority which may be substituted therefor or with any national
         securities exchange.

                  4.02.    EXISTENCE, ETC. The Guarantor will: preserve and
         maintain its legal existence and all of its material rights, privileges
         and franchises; comply with the requirements of all applicable laws,
         rules and regulations if the failure to comply with such requirements
         would have a material adverse effect on the condition (financial or
         otherwise), business, operations assets or properties of the Guarantor
         and its Subsidiaries, taken as a whole; pay and discharge all taxes,
         assessments and governmental charges or levies imposed on it or on its
         income or profits or on any of its property prior to the date on which
         penalties attach, except for any such tax, assessment,

                                      16
<PAGE>

         charge or levy, the payment of which is being contested in good faith
         and by proper proceedings and against which adequate reserves are being
         maintained; maintain all of its properties used or useful in its
         business in good working order and condition, ordinary wear and tear
         excepted; permit representatives of (x) the Agent at its own expense
         prior to the occurrence of an Event of Default or at the expense of the
         Guarantor after the occurrence and during the continuance of an Event
         of Default or (y) any Lender at the expense of the Guarantor after the
         occurrence and during the continuance of an Event of Default, upon
         reasonable advance notice and during normal business hours, to examine,
         copy and make extracts from its books and records, to inspect its
         properties, and to discuss its business and affairs with its officers,
         all to the extent reasonably requested in advance by the Agent or such
         Lender (as the case may be) and to the extent relevant to the
         Guarantor's creditworthiness or performance of its obligations under
         this Guaranty; keep adequate records and books of account, in which
         complete entries will be made in accordance with GAAP; and keep insured
         by financially sound and reputable insurers all property of a character
         usually insured by companies engaged in the same or similar business
         similarly situated against loss or damage of the kinds and in the
         amounts customarily insured against by such companies and carry such
         other insurance as is usually carried by such companies.

                  SECTION 5.        MISCELLANEOUS PROVISIONS.

                  5.01.    WAIVER. No failure or delay by the Agent or any
         Lender in exercising any remedy, right, power or privilege under this
         Guaranty or any other Loan Document shall operate as a waiver of such
         remedy, right, power or privilege, nor shall any single or partial
         exercise of such remedy, right, power or privilege preclude any other
         or further exercise of such remedy, right, power or privilege or the
         exercise of any other remedy, right, power or privilege. The remedies,
         rights, powers and privileges provided by this Guaranty are, to the
         extent permitted by law, cumulative and not exclusive of any remedies,
         rights, powers or privileges provided by the other Loan Documents or by
         law.

                  5.02.    NOTICES. All notices and communications to be given
         under this Guaranty shall be given or made in writing to the intended
         recipient at the address specified below or, as to any party, at such
         other address as shall be designated by such party in a notice to each
         other party. Except as otherwise provided in this Guaranty, all such
         communications shall be deemed to have been duly given at the times set
         forth in SECTION 10.02 of the Credit Agreement, in each case given or
         addressed as provided in this SECTION 5.02:

                                      17
<PAGE>

                  To the Guarantor:        NorthWestern Corporation
                                           125 South Dakota Avenue
                                           Sioux Falls, South Dakota  57104
                                           Attention:        Kipp Orme
                                                             VP Finance
                                           Facsimile:        605-978-2910

                  To the Agent:            Bank of America, N.A.
                                           555 S. Flower Street
                                           11th Floor
                                           Mail Code CA9-706-11-03
                                           Los Angeles, California 90071
                                           Attention:        David Price
                                                             Vice President

                  5.03.    EXPENSES, ETC. The Guarantor agrees to pay or to
         reimburse the Agent and the Lenders for all reasonable costs and
         expenses (including reasonable fees and expenses of counsel) that may
         be incurred by the Agent or the Lenders in any effort to enforce any of
         the obligations of the Guarantor under this Guaranty, whether or not
         any lawsuit is filed, including all such costs and expenses (and
         reasonable attorneys' fees and expenses) incurred by the Agent and the
         Lenders in any bankruptcy, reorganization, workout or similar
         proceeding. All amounts required to be paid by the Guarantor under the
         first sentence of SECTION 2.09 of this Guaranty not paid when due shall
         bear interest until paid at the rate per annum equal to the Default
         Rate.

                  5.04.    AMENDMENTS, ETC. Any provision of this Guaranty may
         be waived, altered or amended only by an instrument in writing signed
         by the Guarantor and the Agent (with the consent of the Lenders as
         specified in SECTION 11.1 of the Credit Agreement). Any waiver,
         alteration or amendment shall be for such period and subject to such
         conditions as shall be specified in the written instrument effecting
         the same and shall be binding upon the Agent, each holder of Guarantied
         Obligations and the Guarantor, and any such waiver shall be effective
         only in the specific instance and for the purpose for which given.

                  5.05.    SUCCESSORS AND ASSIGNS. This Guaranty shall be
         binding upon and inure to the benefit of the Guarantor, the Agent and
         their respective successors and assigns. The Guarantor may not assign
         or transfer its rights or obligations under this Guaranty without the
         prior written consent of the Agent (with the further consent of the
         Lenders as specified in SECTION 11.1 of the Credit Agreement). Any
         attempted assignment or transfer in violation of this SECTION 5.05
         shall be null and void.

                  5.06.    SURVIVAL. All representations and warranties made in
         this Guaranty or in any certificate or other document delivered
         pursuant to or in connection with this Guaranty shall survive the
         execution and delivery of this Guaranty or such certificate or

                                      18
<PAGE>

         other document (as the case may be) or any deemed repetition of any
         such representation or warranty.

                  5.07.    ENTIRE AGREEMENT. THIS GUARANTY REPRESENTS THE FINAL
         AGREEMENT AMONG THE GUARANTOR, THE AGENT AND THE LENDERS AND MAY NOT BE
         CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
         AGREEMENTS OF SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
         BETWEEN OR AMONG THE GUARANTOR, THE AGENT AND THE LENDERS.

                  5.08.    SEVERABILITY. Any provision of this Guaranty 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 of this
         Guaranty, and any such prohibition or unenforceability in any
         jurisdiction shall not invalidate or render unenforceable such
         provision in any other jurisdiction.

                  5.09.    CAPTIONS. The table of contents, captions and section
         headings appearing in this Guaranty are included solely for convenience
         of reference and are not intended to affect the interpretation of any
         provision of this Guaranty.

                  5.10.    COUNTERPARTS. This Guaranty may be executed in any
         number of counterparts, all of which taken together shall constitute
         one and the same instrument and any of the parties to this Guaranty may
         execute this Guaranty by signing any such counterpart. Transmission by
         telecopier of an executed counterpart of this Guaranty shall be deemed
         to constitute due and sufficient delivery of such counterpart.

                  5.11.    GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
         GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
         LAW OF THE STATE OF NEW YORK; PROVIDED THAT THE GUARANTOR AGREES THAT
         EACH OF THE WAIVERS AND AGREEMENTS OF THE GUARANTOR HEREIN WHICH REFER
         TO PROVISIONS OF THE CALIFORNIA CIVIL CODE AND THE CALIFORNIA CODE OF
         CIVIL PROCEDURE SHALL BE EFFECTIVE AND ENFORCEABLE TO THE EXTENT
         PERMITTED UNDER APPLICABLE LAW, AND TO THE EXTENT THAT ANY COURT OF
         COMPETENT JURISDICTION SHALL APPLY THE LAWS OF THE STATE OF CALIFORNIA
         TO DETERMINE THE RELATIVE RIGHTS OR REMEDIES OF THE GUARANTOR AND THE
         AGENT HEREUNDER, SUCH WAIVERS AND AGREEMENTS BY THE GUARANTOR SHALL BE
         GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.

                  THE GUARANTOR HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION
OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF
ANY NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK FOR THE PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE
TRANSACTIONS

                                      19
<PAGE>

CONTEMPLATED BY THIS GUARANTY. THE GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.

                  5.12.    WAIVER OF JURY TRIAL. THE GUARANTOR HEREBY
         IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL
         RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
         RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED BY THIS
         GUARANTY.

                                      20

<PAGE>


                  IN WITNESS WHEREOF, the undersigned has executed this Guaranty
as of the date first above written.

                                     GUARANTOR:

                                     NORTHWESTERN CORPORATION



                                     By:    _________________________________

                                     Name:  _________________________________

                                     Title: _________________________________



Accepted on behalf of itself and the Lenders
as of June 30, 2000:

BANK OF AMERICA, N.A., as Agent


By:    _________________________________

Name:  _________________________________

Title: _________________________________






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