GUARANTY









Exhibit 10(c)(1)




 




GUARANTY




 




                FOR VALUE

RECEIVED, and in consideration of any loan or other financial accommodation

made to MONTANA MEGAWATTS I, LLC  (the

“Company”) by the Banks (as defined below) under the Committed Facility Letter

dated as of September 28, 2001 (as amended or otherwise modified from time to

time, the “Facility Letter”; capitalized terms used but not otherwise defined

herein have the respective meanings given to them in the Facility Letter) among

the Company, various financial institutions (the “Banks”) and ABN AMRO Bank

N.V., as agent (in such capacity, the “Agent”), NorthWestern Corporation, a

corporation organized and existing under the laws of the State of Delaware (the

“Guarantor”), hereby furnishes its guaranty (the “Guaranty”) of the Obligations

(as defined below) as follows:




                (1)           The Guaranty.  The Guarantor unconditionally and

irrevocably guarantees (as primary obligor and not merely as surety) to the

Agent, for the benefit of the Banks, the following (collectively, the “Obligations”):

(i) the payment in full as and when payable by the Company of any and all

amounts that may become due and payable by the Company under or in accordance

with the Facility Letter and any other Loan Document (including, without

limitation, principal, interest, fees, indemnities, costs and expenses, whether

payable at stated maturity, by acceleration, by required prepayment, on demand

or otherwise); and (ii) the timely performance and discharge by the Company of

all of its other obligations and liabilities under and in accordance with the

Facility Letter and the other Loan Documents (whether such obligations are

absolute or contingent or are liquidated or unliquidated). NOTWITHSTANDING ANY

OTHER PROVISION OF THIS GUARANTY, THE AGGREGATE AMOUNT PAYABLE BY THE GUARANTOR

UNDER THIS GUARANTY IS LIMITED TO $27,500,000, PLUS ANY AND ALL COSTS AND

EXPENSES PAYABLE BY THE GUARANTOR PURSUANT TO SECTION 8 OF THIS

GUARANTY.  The books and records of the

Agent and the Banks showing the amount of the payment Obligations shall be

admissible in evidence in any action or proceeding, shall be binding upon the

Guarantor and shall be conclusive (absent demonstrable error) for the purpose

of establishing the amount of the payment Obligations.  The liability of the Guarantor under this

Guaranty shall be absolute and unconditional irrespective of any lack of

genuineness, validity, legality or enforceability of the Facility Letter, any

other Loan Document or any document, agreement or instrument relating to those

documents or any assignment or transfer of any of those documents.  This is a continuing guaranty and shall

remain in full force and effect and be binding upon the Guarantor and the

Guarantor’s successors and assigns until the date (the “Termination Date”)

which is the earlier to occur of (i) the payment in full and in cash of the

payment Obligations (and any and all other amounts payable by the Guarantor

hereunder), the performance of all other Obligations and the termination of all

Commitments; or (ii) the release by the Agent of the Guarantor’s obligations

hereunder.  Notwithstanding the

immediately preceding sentence, Section 3 shall remain in full force and effect

for a period of 366 days after any occurrence of the Termination Date pursuant

to clause (ii) of the immediately preceding sentence.




                (2)           Waiver of Suretyship Defenses.  The Guarantor authorizes the Agent and each

Bank, without notice or demand and without affecting the Guarantor’s liability

hereunder, from time to time to renew, extend, accelerate, compromise, settle,

restructure, refinance, refund or otherwise change the




 





























 




 




amount and time for payment

of the Obligations, or otherwise change the terms of the Obligations or any

part thereof.  Neither the Agent nor any

Bank shall have any obligation to perfect, secure, marshall, protect or insure

any collateral or any Collateral Document and the Guarantor’s liability

hereunder shall not be affected by the non-perfection, invalidity, impairment

or lack of enforceability of any collateral or Collateral Document.




                (3)

          Returned Payments.  The Guarantor agrees that if at any time all

or any part of any payment theretofore applied by the Agent or any Bank to any

of the Obligations is or must be rescinded or returned by the Agent or such

Bank for any reason whatsoever (including the insolvency, bankruptcy or

reorganization of the Company or the Guarantor), such Obligations shall, for

the purposes of this Guaranty, to the extent that such payment is or must be

rescinded or returned, be deemed to have continued in existence,

notwithstanding such application by the Agent or such Bank, and this Guaranty

shall continue to be effective or be reinstated, as the case may be, as to such

Obligations, all as though such application by the Agent or such Bank had not

been made.




                (4)           Guarantor Covenants.  The Guarantor agrees that, so long as the

Termination Date has not occurred, it will:




                (a)           observe and perform each covenant of

the Guarantor set forth in Article 5 (other than Sections 5.10 and 5.11

thereof) and Article 6 of the Guarantor Credit Agreement as if such covenants

(and all related defined terms) mutatis  mutandis were set forth

herein (it being understood that, for purposes of this Guaranty, (i) all

references therein to “Lender”, “Lenders”, and “Required Lenders” shall be

deemed to be references to the Bank, the Banks and the Required Banks,

respectively, (ii) all references to the “Agent” shall be deemed to be

references to the Agent; (iii) all references therein to “Default” and “Event

of Default” shall be deemed to be references to Unmatured Event of Default and

Event of Default, respectively; (iv) all references therein to this “Agreement”

shall be deemed to be references to this Guaranty; and (v) Section 6.2 of the

Guarantor Credit Agreement shall be construed as if clause (ii) of the proviso

therein reads in its entirety as follows: “(ii) the long-term, unsecured and

unenhanced debt obligations of the Borrower shall not have been reduced to

below Baa3 (or the equivalent) by Moody’s (or a successor rating agency thereto)

or to below BBB- (or the equivalent) by S&P (or a successor rating agency

thereto)”; and




                (b)           cause each of NorthWestern Generation

I, LLC and the Company to comply with each covenant set forth on Schedule 2 of

the Facility Letter;




                (5)           Exhaustion of Other Remedies Not

Required.  The obligations of the

Guarantor hereunder are those of a primary obligor, and not merely a surety,

and are independent of the Obligations. 

The Guarantor unconditionally waives any right to require the Agent or

any Bank to (a) proceed against the Company or any other obligor in respect of

the Obligations; (b) proceed against or exhaust any security held directly or

indirectly on account of the Obligations; or (c) pursue any other remedy in the

Agent’s or such Bank’s powers whatsoever. 

No failure or delay by the Agent or any Bank in exercising any right,

power or privilege hereunder shall operate as a waiver thereof nor shall any




 




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single or partial exercise

thereof preclude any other or further exercise thereof or the exercise of any

other right, power or privilege.




                (6)           Waiver of Notices.  The Guarantor hereby waives (i) notice of

acceptance of this Guaranty and of any extension of any loan or other financial

accommodation by the Agent or any Bank to the Company; (ii) presentment and

demand for payment of any of the Obligations; (iii) all diligence in collection

or protection of or realization upon any obligations or any security for or

guaranty of any Obligations; (iv) protest and notice of dishonor or default to

the Guarantor or to any other party with respect to any of the Obligations; and

(v) all other notices to which the Guarantor might otherwise be entitled, in

each case to the fullest extent permitted by applicable law and, in the case of

each notice, to the extent not otherwise expressly provided herein.




                (7)           Amendments.  No amendment or waiver of any provision of

this Guaranty shall in any event be effective unless the same shall be in

writing and signed by the Guarantor and the Agent.




                (8)           Payment of Expenses.  The Guarantor agrees to pay all reasonable

attorneys’ fees and charges (including the reasonable allocated cost of

internal legal services and all reasonable disbursements of internal counsel) and

all other reasonable costs and expenses which may be incurred by the Agent or

any Bank in the enforcement  by the

Agent, on behalf of the Banks, of this Guaranty.




                (9)           Governing Law.  This Guaranty and the rights and obligations

of the Guarantor and the Agent, on behalf of the Banks, under this Guaranty

shall be governed by, and construed and interpreted in accordance with, the

internal laws of the State of New York (determined without reference to

principles of conflicts of law, other than Title 14 of Article 5 of the New

York General Obligations Law).




                (10)   Jurisdiction and Venue. 

ANY LITIGATION BASED HEREON, OR

ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY, SHALL BE BROUGHT AND

MAINTAINED EXCLUSIVELY IN THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN

NEW YORK COUNTY OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN

DISTRICT OF NEW YORK, AND APPELLATE COURTS OF ANY THEREOF.  THE GUARANTOR AND, BY ITS ACCEPTANCE HEREOF,

THE AGENT EACH HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF

THE AFORESAID COURTS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH

ABOVE.  THE GUARANTOR FURTHER

IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE

PREPAID, TO THE ADDRESS SET FORTH FOR THE GUARANTOR IN SECTION 13 HEREOF (OR

SUCH OTHER ADDRESS AS IT SHALL HAVE SPECIFIED IN WRITING TO THE AGENT AS ITS

ADDRESS FOR NOTICES HEREUNDER) OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE

STATE OF NEW YORK.  THE GUARANTOR AND, BY

ITS ACCEPTANCE HEREOF, THE AGENT EACH




 




 




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HEREBY

EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY

OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH

LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY

SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.




                (11)         Waiver of Jury Trial.  THE

GUARANTOR AND, BY ACCEPTING THE BENEFITS HEREOF, THE AGENT AND EACH BANK EACH

WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY ACTION,

SUIT OR PROCEEDING ARISING OUT OF OR RELATED IN ANY WAY TO THIS GUARANTY.




                (12)         Subrogation.  The Guarantor shall not exercise any

subrogation rights which it may have under this Guaranty nor shall the

Guarantor seek any reimbursement from the Company of amounts paid by the

Guarantor under this Guaranty unless and until the Termination Date has

occurred.




                (13)         Notices.  All notices and other communications

hereunder shall be in writing and shall be deemed to have been given (a) when

received (or when delivery is refused), for notices sent by courier or by hand

delivery, (b) three Banking Days after the date when sent by registered or

certified United States mail, postage prepaid, or (c) when sent by facsimile

(receipt confirmed), in each case to the appropriate address or number set

forth below (or at such other address or number for a person as shall be

specified by like notice):




	

  If to the Guarantor:


  	

  NorthWestern Corporation


  
	

   


  	

  125 S. Dakota Avenue


  
	

   


  	

  Sioux Falls, SD 57104


  
	

   


  	

  Attention: Vice President

  and General Counsel 


  
	

   


  	

  Facsimile: (605) 978-2908


  
	

   


  	

   


  
	

  If to the Agent: 


  	

  ABN AMRO Bank N.V.


  
	

   


  	

  135 S. LaSalle Street


  
	

   


  	

  Suite 710


  
	

   


  	

  Chicago, IL 60603


  
	

   


  	

  Attention: Frank Van deur


  
	

   


  	

  Facsimile: (312) 904-6387


  
			





 




Each notice shall be deemed

effective on receipt by the addressee as aforesaid; provided that notice

received by facsimile after 5:00 p.m. (Central time) at the location of the

addressee of such notice shall be deemed received on the first Banking Day

following the date of such receipt.




                (14)         Transfer of Obligations; Successor Agent.  Any Bank may from time to time, without

notice to the Guarantor but subject to Section 9.14 or 9.15 of the Facility

Letter, as applicable, assign




 




 




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or transfer any or all of

the Obligations or any interest therein; and, notwithstanding any such

assignment or transfer or any subsequent assignment or transfer thereof, such

Obligations shall be and remain Obligations for the purposes of this Guaranty,

and each and every immediate and successive assignee or transferee of any of

the Obligations or of any interest therein shall, to the extent of the interest

of such assignee or transferee in the Obligations, be entitled to the benefits

of this Guaranty to the same extent as if such assignee or transferee were such

Bank. The rights and privileges of the Agent under this Guaranty shall inure to

the benefit of its successors and assigns as Agent under the Facility Letter.




                (15)         Creation of Additional Obligations.  The creation or existence from time to time

of additional Obligations to the Agent or any Bank is hereby authorized,

without notice to the Guarantor, and shall in no way affect or impair the

rights of the Agent or any Bank or the obligations of the Guarantor under this

Guaranty, including the Guarantor’s guaranty of such additional Obligations.




                (16)         Section Captions and References.  Section captions used in this Guaranty are

for convenience only and shall not affect the construction of this

Guaranty.  Section references are

to this Guaranty unless otherwise specified.




                (17)         Severability.  Whenever possible each provision of this

Guaranty shall be interpreted in such manner as to be effective and valid under

applicable law, but if any provision of this Guaranty shall be prohibited by or

invalid under applicable law, such provision shall be ineffective to the extent

of such prohibition or invalidity, without invalidating the remainder of such

provision or the remaining provisions of this Guaranty.




                (18)         Counterparts. This Guaranty may

be executed by Guarantor and accepted by Agent on separate counterparts, each

of which shall constitute an original but both of which, taken together, shall

constitute one and the same Guaranty.




[The remainder of this page

is intentionally left blank.]




 




 




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                IN WITNESS

WHEREOF, the Guarantor has caused this Guaranty to be executed as of September

28, 2001.




	

   


  	

  NORTHWESTERN CORPORATION


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Eric R. Jacobsen


  
	

   


  	

  Name:


  	

  Eric R. Jacobsen


  
	

   


  	

  Title:


  	

  Vice President, General Counsel, Chief Legal Officer & Assistant

  Corporate Secretary


  





 




ACCEPTED AND AGREED




as of the date first above written




 




 




ABN AMRO BANK N.V., as Agent




	

  By:


  	

  /s/ Jeffrey Dodd


  
	

  Name:


  	

  Jeffrey Dodd


  
	

  Title:


  	

  Group Vice President


  
	

   


  	

   


  
	

  By:


  	

  /s/ Frank Van Deur


  
	

  Name:


  	

  Frank Van Deur


  
	

  Title:


  	

  Assistant Vice President


  





 




 




 




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