FIRST SUPPLEMENTAL INDENTURE









Exhibit 4(f)(3)




 




SECOND

SUPPLEMENTAL INDENTURE




 




This SECOND SUPPLEMENTAL INDENTURE, dated as of March

13, 2002 (this “Supplemental Indenture”),

between NorthWestern Corporation, a Delaware corporation (the “Company”), and JPMorgan Chase Bank, as

successor to The Chase Manhattan Bank, as trustee (the “Trustee”), under the Indenture, dated as of

November 1, 1998, between the Company and the Trustee, as previously

supplemented by a first supplemental indenture, dated as of November 1, 1998,

between the Company and the Trustee (collectively, the “Indenture”).




 




WHEREAS, the Company executed and delivered the

Indenture to the Trustee to provide for the issuance from time to time of the

Company’s unsecured debentures, notes or other evidences of indebtedness to be issued

in one or more series as might be determined by the Company under the

Indenture, in an unlimited aggregate principal amount which may be

authenticated and delivered as provided in the Indenture;




 




WHEREAS, pursuant to the terms of the Indenture, the Company

desires to provide for the establishment and issuance of two new series of

notes to be known as the 7-7/8% Notes due 2007 and the 8-3/4% Notes due 2012

(collectively, the “Initial Notes”)

and to provide for the issuance of one or more additional series of Exchange

Notes (as defined herein) or Private Exchange Notes (as defined herein) for

issue only in a Registered Exchange Offer (as defined herein) or Private

Exchange (as defined herein), respectively, pursuant to a Registration Rights

Agreement (as defined herein) for a like principal amount of Initial Notes, the

form and substance of such Initial Notes and Exchange Notes or Private Exchange

Notes and the terms, provisions and conditions thereof to be as set forth in

the Indenture and this Supplemental Indenture;




 




WHEREAS, the Company has requested that the Trustee

execute and deliver this Supplemental Indenture, all requirements necessary to

make this Supplemental Indenture a valid instrument in accordance with its

terms (and to make the Notes (as defined herein), when executed by the Company

and authenticated and delivered by the Trustee, the valid obligations of the

Company) have been performed by the Company, and the execution and delivery of

this Supplemental Indenture has been duly authorized by the Company in all

respects;




 




NOW, THEREFORE, in consideration of the purchase and

acceptance of the Initial Notes and Exchange Notes or Private Exchange Notes by

the Holders thereof, and for the purpose of setting forth, as provided in the

Indenture, the form and substance of the Initial Notes and Exchange Notes or

Private Exchange Notes and the terms, provisions and conditions thereof, the

Company covenants and agrees with the Trustee as follows:




 




ARTICLE I


DEFINITIONS




 




1.1           Definition of

Terms.




 




Unless the context otherwise requires:




 





























 




(a)           a

term not defined herein that is defined in the Indenture has the same meaning

when used in this Supplemental Indenture;




 




(b)           a

term defined anywhere in this Supplemental Indenture has the same meaning

throughout;




 




(c)           the

singular includes the plural and vice versa;




 




(d)           a

reference to a Section or Article is to a Section or Article of this

Supplemental Indenture, unless otherwise noted;




 




(e)           headings

are for convenience of reference only and do not affect interpretation;




 




(f)            the

following terms have the meanings given to them in this Section 1.1(f) for

purposes of this Supplemental Indenture only:




 




“Additional Notes”

means additional 7-7/8% Notes due 2007 and additional 8-3/4% Notes due 2012

issued from time to time after the Issue Date under the terms of this

Supplemental Indenture (other than pursuant to Section 304, 305, 306 and 1107

of the Indenture and other than Exchange Notes or Private Exchange Notes issued

pursuant to an exchange offer for other Notes outstanding under this

Supplemental Indenture), which shall be the same series as the Initial Notes.




 




“Adjusted Treasury

Rate” means, with respect to any Redemption Date, (i) the yield,

under the heading which represents the average for the immediately preceding

week, appearing in the most recently published statistical release designated

“H.15. (519)” or any successor publication which is published weekly by the

Board of Governors of the Federal Reserve System and which establishes yields

on actively traded United States Treasury securities adjusted to constant

maturity under the caption “Treasury Constant Maturities,” for the maturity

corresponding to the Comparable Treasury Issue (or if no maturity is within

three months before or after the remaining term of the Notes being redeemed,

yields for the two published maturities most closely corresponding to the

Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate

shall be interpolated or extrapolated from such yields on a straight line basis,

rounding to the nearest month) or (ii) if such release (or any successor

release) is not published during the week preceding the calculation date or

does not contain such yields, the rate per year equal to the semi-annual

equivalent yield to maturity of the Comparable Treasury Issue (expressed as a

percentage of its principal amount) equal to the Comparable Treasury Price for

such Redemption Date, in each case calculated on the third Business Day

preceding the Redemption Date, plus 0.40% for the Notes.




 




“Comparable Treasury

Issue” means, with respect to any Redemption Date, the United States

Treasury security selected by the Quotation Agent as having a maturity

comparable to the remaining term from the Redemption Date to the maturity date

of the Notes being redeemed that would be utilized, at the time of selection

and in accordance with customary financial practice, in pricing new issues of

corporate debt securities of comparable maturity to the remaining term of the

Notes.




 




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“Comparable Treasury

Price” means, with respect to any Redemption Date, if clause (ii) of

the definition of Adjusted Treasury Rate is applicable, the average of three,

or such lesser number as is obtained by the Trustee, Reference Treasury Dealer

Quotations for such redemption date.




 




“Consolidated Net

Tangible Assets” shall be determined in accordance with generally

accepted accounting principles existing on the date hereof and as of a date not

more than 90 days prior to the happening of the event for which such

determination is being made, such date to be selected by the Company.




 




“Depository”

means The Depository Trust Company, its nominees and their respective

successors.




 




“Exchange Notes”

means the 7-7/8% Notes due 2007 and the 8-3/4% Notes due 2012 issued pursuant

to this Supplemental Indenture in connection with a Registered Exchange Offer

pursuant to the Registration Rights Agreement or otherwise issued in exchange

for Additional Notes.




 




 “Initial Notes” means up to $250,000,000 aggregate

principal amount of 7-7/8% Notes due 2007, and up to $470,000,000 aggregate

principal amount of 8-3/4% Notes due 2012, issued on the Issue Date.




 




“Initial Purchasers”

means, with respect to the Initial Notes issued on the Issue Date, the entities

identified as initial purchasers on Schedule A to the Purchase Agreement.




 




“Issue Date”

means March 13, 2002.




 




“Make-Whole Amount”

means the sum, as determined by the Quotation Agent, of the present values of

the principal amount of the Notes to be redeemed, together with scheduled

payments of interest (exclusive of interest to the Redemption Date) from the

Redemption Date to the maturity date of the Notes being redeemed, in each case

discounted to the Redemption Date on a semi-annual basis, assuming a 360-day

year consisting of twelve 30-day months, at the Adjusted Treasury Rate, plus

accrued interest on the principal amount of the Notes being redeemed to the

Redemption Date.




 




 “Notes” means the Initial Notes, the

Exchange Notes, the Private Exchange Notes and any Additional Notes so

designated by the Company.




 




“Private Exchange”

means the offer by the Company, pursuant to the Registration Rights Agreement,

to the Initial Purchasers to issue and deliver to each Initial Purchaser, in

exchange for the Initial Notes held by such Initial Purchaser as part of its

initial distribution, a like aggregate principal amount of Private Exchange

Notes, or any similar offer with respect to Additional Notes.




 




“Private Exchange

Notes” means the 7-7/8% Notes due 2007 and the 8-3/4% Notes due

2012, issued pursuant to this Supplemental Indenture in connection with 




 




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a Private Exchange pursuant to the Registration Rights Agreement or

otherwise issued in exchange for Additional Notes.




 




“Purchase Agreement”

means, with respect to the Initial Notes issued on the Issue Date, the Purchase

Agreement, dated as of March 8, 2002, among the Company and the Initial

Purchasers.




 




“QIB”

means a “qualified institutional buyer” as defined in Rule 144A.




 




“Quotation Agent”

means a primary U.S. Government securities dealer selected by the Trustee after

consultation with the Company.




 




“Reference Treasury

Dealer” means a primary U.S. Government securities dealer selected

by the Company.




 




“Reference Treasury

Dealer Quotations” means, with respect to each Reference Treasury

Dealer and any Redemption Date, the average, as determined by the Trustee, of

the bid and asked prices for the Comparable Treasury Issue, expressed in each

case as a percentage of its principal amount, quoted in writing to the Trustee

by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the

third Business Day preceding such Redemption Date.




 




“Registered Exchange

Offer” means the offer by the Company, pursuant to the Registration

Rights Agreement, to certain Holders of Initial Notes, to issue and deliver to

such Holders, in exchange for the Initial Notes, a like aggregate principal

amount of Exchange Notes registered under the Securities Act, or any similar

offer with respect to Additional Notes.




 




“Registration Rights

Agreement” means with respect to the Initial Notes issued on the

Issue Date, the Registration Rights Agreement, dated as of March 8, 2002, among

the Company and the Initial Purchasers for the benefit of the Initial

Purchasers and the Holders of the Notes.




 




“Securities Act”

means the Securities Act of 1933, as amended.




 




“Securities

Custodian” means the custodian with respect to a Global Note (as

appointed by the Depository), or any successor Person thereto, and shall

initially be the Trustee.




 




“Shelf Registration

Statement” means the registration statement, if any, filed by the

Company in connection with the offer and sale of Initial Notes or Private

Exchange Notes pursuant to the Registration Rights Agreement.




 




“Transfer Restricted

Notes” means Notes that bear or are required to bear the legend set

forth in Section 2.6(b) hereof.




 




“Utility Assets”

means any and all property of the Company and/or any of its subsidiaries, real,

personal and mixed and wherever situated, in any case used or to be 




 




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used, or useful, in or in connection with the generation, production,

transmission or distribution of electric energy or gas in any form and for any

purpose (whether or not such use is the sole use of such property), including,

without limitation, all property subject to the mortgages (whether or not such

property is excepted from such mortgages) of and referenced in (i) the

Indenture, dated August 1, 1940, from the Company (f/k/a NorthWestern Public

Service Company) to JPMorgan Chase Bank (as successor to The Chase Manhattan

Bank (National Association), successor by merger to The Chase National Bank of

the City of New York), as trustee, and C.J. Heinzelmann, successor to Carl E.

Buckley, as individual trustee, as the same may be amended or supplemented (ii)

the General Mortgage Indenture and Deed of Trust, dated as of August 1, 1993,

from the Company (f/k/a NorthWestern Public Service Company) to JPMorgan Chase

Bank (as successor to The Chase Manhattan Bank (National Association)), as the

same may be amended or supplemented and (iii) the Mortgage and Deed of Trust,

dated as of October 1, 1945, from The Montana Power, L.L.C. (as successor to

The Montana Power Company) to Guaranty Trust Company of New York and Arthur E.

Burke, trustees, as the same may be amended or supplemented.




 




1.2           Other Definitions




 








	

  Term


  	

   


  	

  Defined in

  Section


  	

   


  
	

  “Agent Members”


  	

   


  	

  2.4(b)


  	

   


  
	

  “Global Note”


  	

   


  	

  2.4(a)


  	

   


  
	

  “Regulation S”


  	

   


  	

  2.4(a)


  	

   


  
	

  “Restricted Global Note”


  	

   


  	

  2.4(a)


  	

   


  
	

  “Rule 144A”


  	

   


  	

  2.4(a)


  	

   


  










 




ARTICLE II


TERMS AND CONDITIONS OF THE NOTES




 




2.1           Designation and

Principal Amount.




 




There is hereby authorized under this Indenture two

series of Initial Notes designated (i) “7-7/8% Notes due 2007,” limited in

aggregate principal amount on the Issue Date to $250,000,000 and (ii) the

“8-3/4% Notes due 2012,” limited in aggregate principal amount on the Issue

Date to $470,000,000.  In addition,

there is hereby authorized under this Indenture such additional series of Exchange

Notes or Private Exchange Notes as may be issued only in a Registered Exchange

Offer or Private Exchange, respectively, pursuant to the Registration Rights

Agreement, for a like principal amount of Initial Notes, or as may otherwise be

issued for Additional Notes, as applicable. 

The aggregate principal amount of each series may be increased as

provided in Section 2.3




 




2.2           Maturity.




 




The Stated Maturity for the Initial Notes will be as

follow:




 




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  Notes


  	

   


  	

  Maturity


  	

   


  
	

  7-7/8% Notes due 2007


  	

   


  	

  March 15, 2007


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

  8-3/4% Notes due 2012


  	

   


  	

  March 15, 2012


  	

   


  










 




The Stated Maturity for the Exchange Notes or Private

Exchange Notes will be as follows:




 








	

  Notes


  	

   


  	

  Maturity


  	

   


  
	

  7-7/8% Notes due 2007


  	

   


  	

  March 15, 2007


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

  8-3/4% Notes due 2012


  	

   


  	

  March 15, 2012


  	

   


  










 




2.3           Issuance of

Additional Notes.




 




The Company shall be entitled to issue Additional

Notes under this Supplemental Indenture which shall have identical terms as the

Initial Notes (including, without limitation, the same CUSIP number), other

than with respect to the date of issuance and issue price, and which shall be

the same series as the Notes of such series having the same Stated Maturity as

such Additional Notes.  The Initial

Notes of any given series issued on the Issue Date and all Exchange Notes or

Private Exchange Notes with the same Stated Maturity as such series of Initial

Notes issued in exchange therefor, together with any Additional Notes of the

same series as such Initial Notes, shall be treated as a single class for all

purposes under the Indenture.




 




With respect to any Additional Notes, the Company

shall set forth in an Officers’ Certificate, a copy of each of which shall be

delivered to the Trustee along with a Company Order for authentication and delivery

of such Additional Notes, the following information:




 




(1)           the aggregate principal amount of

such Additional Notes to be authenticated and delivered pursuant to this

Supplemental Indenture; and




 




(2)           the issue price, the issue date and

the CUSIP number, ISIN number and Common Code number, if any, of such

Additional Notes; provided, however, that no Additional Notes may be issued at

a price that would cause such Additional Notes to have “original issue

discount” within the meaning of Section 1273 of the Internal Revenue Code of

1986, as amended, and no Additional Notes may be issued if an Event of Default

has occurred and is continuing with respect to any series of Notes.




 




2.4           (a)  Form and Dating.




 




Initial Notes offered and sold to a QIB in reliance on

Rule 144A under the Securities Act (“Rule

144A”) or in reliance on Regulation S under the Securities Act (“Regulation S”), in each case as provided in

the Purchase Agreement or any similar 




 




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agreement with respect to Additional Notes shall be issued initially in

the form of one or more permanent global Notes, substantially in the form as

set forth in Exhibit 1 hereto, in definitive, fully registered form without

interest coupons with the global securities legend and restricted securities

legend set forth in Exhibit 1 hereto, which shall be deposited on behalf of the

purchasers of the Initial Notes represented thereby with the Trustee, at its

Corporate Trust Office, as Securities Custodian (or with such other Securities

Custodian as the Depository may direct), and registered in the name of the

Depository or a nominee of the Depository, duly executed by the Company and

authenticated by the Trustee as hereinafter provided.  Initial Notes offered and sold to an institutional “accredited

investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities

Act shall receive physical delivery of certificated Notes.  Exchange Notes shall be issued in global

form substantially in the form as set forth in Exhibit 2 attached hereto (with

the global securities legend set forth in Exhibit 1 hereto).  Private Exchange Notes shall be issued in

global form substantially in the form as set forth in Exhibit 2 attached hereto

(with the global securities legend and the restricted securities legend set

forth in Exhibit 1 hereto).  Initial

Notes offered and sold to a QIB in reliance on Rule 144A or in reliance on

Regulation S are sometimes referred to in this Supplemental Indenture as

“Restricted Global Notes.”  Exchange Notes

issued in global form and Restricted Global Notes are sometimes referred to in

this Supplemental Indenture as “Global Notes.” 

The aggregate principal amount of the Global Notes may from time to time

be increased or decreased by adjustments made on the records of the Trustee and

the Depository or its nominee as hereinafter provided.




 




(b)           Book-Entry

Provisions.  This Section 2.4(b)

shall apply only to a Global Note deposited with or on behalf of the

Depository.




 




The Company shall execute and the Trustee shall, in

accordance with this Section 2.4(b), authenticate and deliver initially one or

more Global Notes that (a) shall be registered in the name of the Depository or

the nominee of the Depository and (b) shall be delivered by the Trustee to the

Depository or pursuant to the Depository’s instructions or held by the Trustee

as Securities Custodian.




 




Members of, or participants in, the Depository (“Agent Members”) shall have no rights under

this Supplemental Indenture with respect to any Global Note held on their

behalf by the Depository or by the Trustee as the Securities Custodian or under

such Global Note, and the Company, the Trustee and any agent of the Company or

the Trustee shall be entitled to treat the Depository as the absolute owner of

such Global Note for all purposes whatsoever. 

Notwithstanding the foregoing, nothing herein shall prevent the Company,

the Trustee or any agent of the Company or the Trustee from giving effect to

any written certification, proxy or other authorization furnished by the

Depository or impair, as between the Depository and its Agent Members, the

operation of customary practices of such Depository governing the exercise of

the rights of a holder of a beneficial interest in any Global Note.




 




(c)           Certificated

Notes.  Except as provided in this

Section 2.4, Section 2.6 or Section 2.7, owners of beneficial interests in

Restricted Global Notes shall not be entitled to receive physical delivery of

certificated Notes.




 




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2.5           Authentication.




 




The Trustee shall authenticate and deliver: (i) on the

Issue Date, an aggregate principal amount of up to $250,000,000 of 7-7/8% Notes

due 2007 and an aggregate principal amount of up to $470,000,000 of 8-3/4%

Notes due 2012 and (ii) from time to time upon a Company Order as provided in

Section 303 of the Indenture, Exchange Notes or Private Exchange Notes for

issue only in a Registered Exchange Offer or a Private Exchange, respectively,

pursuant to the Registration Rights Agreement, for a like principal amount of

Initial Notes of having the same Stated Maturity as such Exchange Notes or

Private Exchange Notes, as the case may be, and Additional Notes.




 




2.6           Transfer and

Exchange.




 




(a)           Transfer and Exchange of Global

Notes.   (i) The transfer and exchange

of Global Notes or beneficial interests therein shall be effected through the

Depository, in accordance with this Supplemental Indenture (including

applicable restrictions on transfer set forth herein, if any) and the

procedures of the Depository therefor. 

A transferor of a beneficial interest in a Global Note shall deliver to

the Security Registrar a written order given in accordance with the

Depository’s procedures containing information regarding the participant

account of the Depository to be credited with a beneficial interest in the

Global Note.  The Security Registrar

shall, in accordance with such written order, instruct the Depository to credit

to the account of the Person specified in such written order a beneficial

interest in the Global Note and to debit from the account of the Person making

the transfer the beneficial interest in the Global Note being transferred.




 




(ii)      Notwithstanding any other provision of

this Supplemental Indenture (other than the provisions set forth in Section 2.7),

a Global Note may not be transferred as a whole except by the Depository to a

nominee of the Depository or by a nominee of the Depository to the Depository

or another nominee of the Depository or by the Depository or any such nominee

to a successor Depository or a nominee of such successor Depository.




 




(iii)     In the event that a Restricted Global Note

is exchanged for Notes in certificated registered form pursuant to Section 2.7

prior to the registration of such Notes under the Securities Act, such Restricted

Global Note may be exchanged only in accordance with such procedures as are

substantially consistent with the provisions of this Section 2.6 (including the

certification requirements set forth on the reverse of the Initial Notes

intended to ensure that such transfers comply with Rule 144A or Regulation S,

as the case may be) and such other procedures as may from time to time be

adopted by the Company.




 




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(b)           Legend.




 




(i)       Except as permitted by the following

paragraphs (ii), (iii) and (iv), each Note certificate evidencing a Transfer

Restricted Note shall bear a legend in substantially the following form:




 




THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED

IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES

ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE

OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR

AN APPLICABLE EXEMPTION THEREFROM.  EACH

PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE

RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT

PROVIDED BY RULE 144A THEREUNDER.




 




THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF

NORTHWESTERN THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE

TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER

REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A

UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE

144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE

WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM

REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF

AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE

SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY

APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE

HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF

THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.  IN CONNECTION WITH ANY TRANSFER, THE HOLDER

WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION

AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER

COMPLIES WITH THE FOREGOING RESTRICTIONS.




 




(ii)      Upon any sale or transfer of a Transfer

Restricted Note (including any Transfer Restricted Note represented by a

Restricted Global Note) pursuant to Rule 144, the Security Registrar shall

permit the transferee thereof to exchange 




 




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such Transfer Restricted

Note for a certificated Note that does not bear the legend set forth above and

rescind any restriction on the transfer of such Transfer Restricted Note, if

the transferor thereof certifies in writing to the Security Registrar that such

sale or transfer was made in reliance on Rule 144 (such certification to be in

the form set forth on the reverse of the Note).




 




(iii)     After a transfer of any Initial Notes or

Private Exchange Notes pursuant to and during the period of the effectiveness

of a registration statement under the Securities Act with respect to such

Initial Notes or Private Exchange Notes, as the case may be, all requirements

pertaining to legends on such Initial Notes or such Private Exchange Notes with

respect to such Notes transferred will cease to apply and Initial Notes or

Private Exchange Notes in global form, in each case without restrictive

transfer legends, will be available to the transferee of the Holder of such

Initial Notes or Private Exchange Notes upon written directions to transfer

such Holder’s interest in the Global Note.




 




(iv)     Upon the consummation of a Registered

Exchange Offer with respect to the Initial Notes, Exchange Notes in global form

will be available to Holders that exchange such Initial Notes in such

Registered Exchange Offer.




 




(v)      Upon the consummation of a Private

Exchange with respect to the Initial Notes, all requirements pertaining to such

Initial Notes that Initial Notes issued to certain Holders be issued in global

form will still apply with respect to Holders of such Initial Notes that do not

exchange their Initial Notes, and Private Exchange Notes in global form with

the global securities legend and the Restricted Notes Legend set forth in

Exhibit 1 hereto will be available to Holders that exchange such Initial Notes

in such Private Exchange.




 




(c)           Cancellation

or Adjustment of Global Note.  At

such time as all beneficial interests in a Global Note have either been

exchanged for certificated Notes, redeemed, purchased or canceled, such Global

Note shall be returned to the Depository for cancellation or retained and

canceled by the Trustee.  At any time

prior to such cancellation, if any beneficial interest in a Global Note is

exchanged for certificated Notes, redeemed, purchased or canceled, the

principal amount of Notes represented by such Global Note shall be reduced and

an adjustment shall be made on the books and records of the Securities

Custodian with respect to such Global Note.




 




(d)           Obligations with Respect to

Transfers and Exchanges of Notes.




 




(i)       To permit registrations of transfers and

exchanges, the Company shall execute and the Trustee shall authenticate

certificated Notes and Global Notes at the Security Registrar’s request.




 




(ii)      No service charge shall be made for any

registration of transfer or exchange, but the Company may require payment of a

sum sufficient to cover any transfer tax, assessments or similar governmental

charge payable in connection therewith (other than any such transfer taxes,

assessments or similar governmental 




 




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charge payable upon exchange or transfer pursuant to

Section 1107 of the Indenture).




 




(iii)     The Security Registrar shall not be

required to register the transfer of or exchange of any Note during a period of

15 Business Days immediately preceding the date notice is given of redemption,

all in accordance with Section 305 of the Indenture.




 




(iv)     Prior to the due presentation for

registration of transfer of any Note, the Company, the Trustee, the Paying

Agent or the Security Registrar may deem and treat the Person in whose name a

Note is registered as the absolute owner of such Note for the purpose of

receiving payment of principal of and interest on such Note and for all other

purposes whatsoever, whether or not such Note is overdue, and none of the

Company, the Trustee, the Paying Agent or the Security Registrar shall be

affected by notice to the contrary.




 




(v)      All Notes issued upon any transfer or

exchange pursuant to the terms of the Indenture shall evidence the same debt

and shall be entitled to the same benefits under the Indenture as the Notes

surrendered upon such transfer or exchange.




 




(e)           No Obligation of the Trustee.




 




(i)       The Trustee shall have no responsibility

or obligation to any beneficial owner of a Global Note, Agent Member or other

Person with respect to the accuracy of the records of the Depository or its

nominee or of any Agent Member, with respect to any ownership interest in the

Notes or with respect to the delivery to any Agent Member, beneficial owner or

other Person (other than the Depository) of any notice (including any notice of

redemption) or the payment of any amount, under or with respect to such

Notes.  All notices and communications

to be given to the Holders and all payments to be made to Holders under the

Notes shall be given or made only to or upon the order of the registered

Holders (which shall be the Depository or its nominee in the case of a Global

Note).  The rights of beneficial owners

in any Global Note shall be exercised only through the Depository subject to

the applicable rules and procedures of the Depository.  The Trustee may rely and shall be fully

protected in relying upon information furnished by the Depository with respect

to its Agent Members and any beneficial owners.




 




(ii)      The Trustee shall have no obligation or

duty to monitor, determine or inquire as to compliance with any restrictions on

transfer imposed under this Supplemental Indenture or under applicable law with

respect to any transfer of any interest in any Note (including any transfers

between or among Agent Members or beneficial owners in any Global Note) other

than to require delivery of such certificates and other documentation or

evidence as are expressly required by, and to do so if and when expressly

required by, the terms of the Indenture.




 




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2.7           Certificated

Notes.




 




(a)           A

Restricted Global Note deposited with the Depository or with the Trustee as

Securities Custodian pursuant to Section 2.4 shall be transferred to the

beneficial owners thereof in the form of certificated Notes in an aggregate

principal amount equal to the principal amount of such Global Note, in exchange

for such Global Note, only if such transfer complies with this Section 2.7 and

the other conditions set forth in Section 305 of the Indenture.




 




(b)           Any

Restricted Global Note that is transferable to the beneficial owners thereof

pursuant to this Section shall be surrendered by the Depository to the Trustee

at its Corporate Trust Office to be so transferred, in whole or from time to

time in part, without charge, and the Trustee shall authenticate and deliver,

upon such transfer of each portion of such Restricted Global Note, an equal

aggregate principal amount of certificated Notes of authorized

denominations.  Any portion of a

Restricted Global Note transferred pursuant to this Section shall be executed,

authenticated and delivered only in denominations of $1,000 principal amount

and any integral multiple thereof and registered in such names as the

Depository shall direct.  Any

certificated Initial Note or Private Exchange Note delivered in exchange for an

interest in the Restricted Global Note shall, except as otherwise provided by

Section 2.6(b), bear the restricted securities legend set forth in Exhibit 1

hereto.




 




(c)           Subject

to the provisions of Section 2.7(b), the registered Holder of a Global Note

shall be entitled to grant proxies and otherwise authorize any Person,

including Agent Members and Persons that may hold interests through Agent

Members, to take any action which a Holder is entitled to take under the

Indenture or the Notes.




 




(d)           In

the event of the occurrence the events specified in Section 305 of the

Indenture, the Company shall promptly make available to the Trustee a

reasonable supply of certificated Notes in definitive, fully registered form

without interest coupons.




 




(e)           Notwithstanding

the foregoing, except as otherwise specified in Section 301 of the Indenture,

any Global Note shall be exchangeable pursuant to this Section 2.7 or Sections

304, 306, 906 or 1107 of the Indenture for Notes registered in the name of, and

a transfer of a Global Note of any series may be registered to, any Person

other than the Depository for such Global Note or its nominee only if:




 




(i)       such Depository notifies the Company that

it is unwilling or unable to continue as Depository for such Global Note or if

at any time such Depository ceases to be a clearing agency registered under the

Securities Exchange Act of 1934, as amended, and a successor Depository is not

appointed by the Company within 90 days;




 




(ii)      the Company executes and delivers to the

Trustee a Company Order that such Global Note shall be so exchangeable and the

transfer thereof so registrable; or




 




12





























 




(iii)     there shall have occurred and be continuing

an Event of Default or an event which, with the giving of notice or lapse of

time, would constitute an Event of Default with respect to the Notes of such

series and the Depository so requests.




 




Upon the occurrence in respect of any Global Note of any series of any

one or more of the conditions specified in clauses (i), (ii) or (iii) of the

preceding sentence or such other conditions as may be specified as contemplated

by Section 301 of the Indenture for such series, then without unnecessary

delay, but in any event not later than the earliest date on which such interests

may be so exchanged, the Company shall deliver to the Trustee definitive Notes

of that series in aggregate principal amount equal to the principal amount of

such Global Note, executed by the Company.




 




2.8           Defeasance.




 




The Notes shall be subject to defeasance as set forth

in Article 14 of the Indenture.




 




2.9           Covenants.




 




Holders of the Notes

shall have the benefit of the additional restrictive covenants set forth in

Article 3 of this Supplemental Indenture.




 




2.10         Optional

Redemption.




 




The Company may redeem all or part of the Notes at any

time at its option at a Redemption Price equal to the greater of (i) the

principal amount of the Notes being redeemed plus accrued interest to the

Redemption Date or (ii) the Make-Whole Amount for the Notes of the series being

redeemed as more fully provided in the Indenture.




 




If the Company is redeeming less than all the Notes at any time, the

Trustee will select Notes to be redeemed by lot or using a method it considers

fair and appropriate. 

Notice of redemption will be mailed at least 30 days but not more

than 60 days before the Redemption Date to each Holder of Notes to be redeemed in

accordance with Section 106 of the Indenture.  Notes in denominations larger than $1,000 principal amount may be redeemed

in part but only in integral multiples of $1,000. 

The Company will not know the exact Redemption Price until three Business Days

before the Redemption Date.  Therefore,

the notice of redemption will only describe how the Redemption Price will be

calculated.  If money sufficient

to pay the Redemption Price of and accrued interest on all Notes (or portions

thereof) to be redeemed on the Redemption Date is deposited with the Paying

Agent on or before the redemption date and certain other conditions are

satisfied, on and after such Redemption Date interest will cease

to accrue on such Notes (or such portions thereof) called for redemption.




 




ARTICLE III


COVENANTS APPLICABLE TO THE NOTES




 




For the sole benefit of

the holders of the Notes, the Company agrees:




 




13





























 




3.1           Limitation on

Liens.




 




(a)           So

long as any Notes remain outstanding, the Company will not, nor will it permit

any Subsidiary to, issue, assume or guarantee (collectively, “create”) any Debt

secured by any mortgage, security interest, pledge, lien or other encumbrance

(collectively, a “mortgage”) upon any property owned by the Company, or any

such Subsidiary, except Debt issued by the Company to any Subsidiary or Debt

issued by any Subsidiary to the Company or any other Subsidiary (whether such

property or Debt is now owned or hereafter acquired), without in any such case

effectively securing, prior to or concurrently with the creation of any such

Debt, the Notes for so long as such Debt is so secured (together with, if the

Company shall so determine, any other Debt of or guaranteed by the Company or

such Subsidiary ranking equally with the Notes and then existing or thereafter

created) equally andratably with, or prior to, such Debt, unless the total

amount of all Debt of the Company and its Subsidiaries secured by a mortgage

(other than Debt secured by mortgages permitted by clauses (i) through (xi)

below) would not exceed at any time outstanding the greater of (I) the

difference between (A) 10% of the Consolidated Net Tangible Assets of the

Company and its Subsidiaries minus (B) the amount, if any, of Debt outstanding

pursuant to clause (x) below which is secured by any Utility Assets and (II)

$300.0 million; provided, that the foregoing restrictions shall not apply to

or prevent the creation or existence of:




 




(i)       mortgages on any property or asset

acquired, constructed or improved by the Company or any of the Subsidiaries

before or after the date of this Supplemental Indenture, and any improvements

thereon, accessions thereto or other property acquired or constructed for use

in connection therewith or related thereto, which are created or assumed prior

to or contemporaneously with, or within one year after, such acquisition or

completion of such construction or improvement to secure or provide for the

payment of all or any part of the purchase price of such property or asset or

the cost of such construction or improvement incurred after the date of this

Supplemental Indenture, plus any costs, expenses, interest and fees incurred in

relation thereto or a guarantee given in respect thereof, or, in addition to

mortgages contemplated by clauses (ii) and (iii) below, mortgages on any

property existing at the time of acquisition thereof; provided, that the

mortgages shall not apply to any other property theretofore owned by the

Company or any such Subsidiary other than, in the case of any such construction

or improvement, (1) unimproved real property on which the property so

constructed or the improvement is located (2) other property (or improvements

thereon) which is an improvement to or is acquired or constructed for use in

connection therewith or related thereto, (3) any right and interest under any

agreement or other documents relating to the property being so constructed or improved

or such other property and (4) the stock of any Subsidiary created or

maintained for the primary purpose of owning the property so constructed or

improved;




 




14





























 




(ii)      existing mortgages on any property or

indebtedness of a Person or other entity which is merged with or into, or

consolidated with the Company or a Subsidiary;




 




(iii)     mortgages on any property or indebtedness

of a Person or other entity existing at the time such Person or other entity

becomes a Subsidiary;




 




(iv)     mortgages to secure Debt of a Subsidiary to

the Company or to another Subsidiary;




 




(v)      mortgages in favor of the United States of

America, any State, any foreign country or any department, agency or

instrumentality or political subdivision of any such jurisdiction, to secure

partial, progress, advance or other payments pursuant to any contract or

statute or to secure any Debt incurred for the purpose of financing all or any

part of the purchase price of the cost of constructing or improving the

property subject to such mortgages, including, without limitation, mortgages to

secure Debt of the pollution control or industrial revenue bond type;




 




(vi)     mortgages to secure Debt of the Company or

any Subsidiary maturing within 12 months from the issuance thereof and incurred

in the ordinary course of business;




 




(vii)    mortgages on any property (including,

without limitation, any natural gas, oil or other mineral property) to secure

all or part of the cost of exploration, drilling or development thereof, or to

secure Debt incurred to provide funds for any such purpose;




 




(viii)   mortgages existing on the date of this

Supplemental Indenture;




 




(ix)     mortgages to secure Debt of the Company or

a Subsidiary incurred in connection with a specifically identifiable project

where the mortgage relates and is confined to a property or properties

(including, without limitation, shares or other rights of ownership in entities

that own such property or project) involved in such project and acquired by the

Company or a Subsidiary after the date of the original issuance of the Initial

Notes and the recourse of the creditors in respect of such Debt is limited to

any or all of such project and property (including as aforesaid);




 




(x)      mortgages secured by any Utility Assets;

and




 




(xi)     mortgages for the purposes of extending,

renewing or replacing in whole or in part Debt secured by any mortgage

permitted by this Section 3.1(a), provided, that the principal amount of Debt

secured thereby shall not exceed the principal amount of Debt so secured at the

time of such extension, renewal or replacement, and that such extension,

renewal or replacement shall be limited to all or a part of the property or

Debt which secured the mortgage so extended, renewed or replaced.




 




15





























 




(b)           If

at any time the Company or any Subsidiary shall issue, assume or guarantee any

Debt secured by any mortgage and if subsection (a) of this Section 3.1 requires

that the Notes be secured equally and ratably with such Debt, the Company will

promptly deliver to the Trustee an Officer’s Certificate stating that, and an

Opinion of Counsel to the effect that, the covenant of the Company contained in

subsection (a) of this Section has been complied with.




 




ARTICLE IV


EXPENSES




 




4.1           Payment of

Expenses.




 




In connection with the offering, sale and issuance of

the Notes, the Company will pay for all costs and expenses relating to the

offering, sale and issuance of the Notes, including compensation to the Initial

Purchasers payable pursuant to the Purchase Agreement and compensation of the

Trustee under the Indenture.




 




ARTICLE V


MISCELLANEOUS




 




5.1           Ratification of

Indenture.




 




The Indenture, as supplemented by this Supplemental

Indenture, is in all respects ratified and confirmed, and this Supplemental

Indenture shall be deemed part of the Indenture in the manner and to the extent

herein and therein provided.




 




5.2           Trustee Not

Responsible for Recitals.




 




The recitals herein contained are made by the Company

and not by the Trustee, and the Trustee assumes no responsibility for the

correctness thereof.  The Trustee makes

no representation as to the validity or sufficiency of this Supplemental

Indenture.




 




5.3           Governing Law.




 




This Supplemental Indenture and each Note shall be

deemed to be a contract made under the internal laws of the State of New York

and for all purposes shall be construed in accordance with the laws of said

State, without giving effect to any contrary conflict of laws or choice of law

provisions of the law of the State of New York or any other jurisdiction.




 




5.4           Severability.




 




In case any one or more of the provisions contained in

this Supplemental Indenture or in the Notes shall for any reason be held to be

invalid, illegal or unenforceable in any respect, such invalidity, illegality

or unenforceability shall not 




 




16





























 




affect any other provisions of this Supplemental Indenture or of the

Notes, but this Supplemental Indenture and the Notes shall be construed as if

such invalid or illegal or unenforceable provision had never been contained

herein or therein.




 




5.5           Counterparts.




 




This Supplemental Indenture may be executed in any

number of counterparts each of which shall be an original, but such

counterparts shall together constitute but one and the same instrument.




 




17





























 




IN WITNESS WHEREOF, the parties hereto have caused

this Supplemental Indenture to be duly executed and their respective corporate

seals to he hereunto affixed and attested, on the date or dates indicated in

the acknowledgments and as of the day and year first above written.




 




	

   


  	

  NORTHWESTERN CORPORATION


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Kipp D. Orme


  
	

   


  	

   


  	

  Name: Kipp D. Orme


  
	

   


  	

   


  	

  Title: Vice

  President & 


  Chief Financial Officer


  
	

   


  	

   


  
	

  Attest:


  	

   


  
	

  /s/ Eric R. Jacobsen


  	

   


  	

   


  
	

  Name: Eric R. Jacobsen


  	

   


  
	

  Title:


  	

  Senior Vice President, General Counsel,


  	

   


  
	

   


  	

  Chief Legal Officer & Assistant Corporate

  Secretary


  	

   


  
	

   


  	

   


  
	

   


  	

  JPMORGAN CHASE BANK,


  
	

   


  	

  as Trustee


  
	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ James Neaney


  
	

   


  	

   


  	

  Name: James D. Neaney


  
	

   


  	

   


  	

  Title: Vice President


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

  Attest:


  	

   


  
	

  /s/ R. J. Halleran


  	

   


  	

   


  
	

  Name: R. J. Halleran


  	

   


  
	

  Title: Assistant Vice President


  	

   


  
					





 




 




18





























 




EXHIBIT 1




 




to




 




SUPPLEMENTAL INDENTURE




 




[FORM OF FACE OF INITIAL

NOTE]




 




[Global Securities

Legend]




 




UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED

REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),

NEW YORK, NEW YORK, TO NORTHWESTERN CORPORATION OR ITS AGENT FOR REGISTRATION

OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL NOTE ISSUED IS REGISTERED IN

THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED

REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH

OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY

TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON

IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN

INTEREST HEREIN.




 




TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO

TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR

THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL

NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET

FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.




 




[Restricted Securities

Legend]




 




THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED

IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES

ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED,

SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN

APPLICABLE EXEMPTION THEREFROM.  EACH

PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE

RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT

PROVIDED BY RULE 144A THEREUNDER.




 




THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF

NORTHWESTERN THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE

TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY

BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE

SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II)

OUTSIDE THE UNITED STATES IN AN OFFSHORE 




 




19





























 




TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III)

PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY

RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE

REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH

(IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE

UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED

TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS

REFERRED TO IN (A) ABOVE.  IN CONNECTION

WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT

SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY

REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.




 




	

  No.


  	

  $


  	

   


  





CUSIP No.:




ISN No.:




Common Code No.:




 




_____ % Notes due March

15, 20__




 




NORTHWESTERN CORPORATION, a Delaware corporation,

promises to pay to CEDE & Co., or registered assigns, the principal sum of

___________________ ________________ Dollars on March 15, 20__.




 




Interest Payment Dates:  March 15 and September 15.




 




Record Dates: 

March 1 and September 1.




.




Additional provisions of this Note are set forth on

the reverse side of this Note.




 




Dated: _______ __, 20__




 




	

   


  	

  NORTHWESTERN CORPORATION


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

  Name:


  
	

   


  	

  Title:


  
	

   


  	

   


  
	

  Attest:


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

  By:


  	

   


  	

   


  	

   


  
	

  Name:


  	

   


  
					





 




20





























 




	

  Title:


  	

   


  





 




21





























 




TRUSTEE’S CERTIFICATE OF




AUTHENTICATION




Dated:  _______ __, 20__




 




This is one of the Securities of the series

designated therein referred to in the within-mentioned Indenture.




 




	

   


  	

  JPMorgan Chase Bank, as successor to the 


  
	

   


  	

  Chase Manhattan Bank, as Trustee


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  	

   


  
	

   


  	

  Authorized

  Officer


  





 




22





























 




[FORM OF REVERSE SIDE OF INITIAL NOTE]




 




____% Notes due March 15,

20__




 




ARTICLE VIInterest.




 




NORTHWESTERN CORPORATION, a Delaware corporation (such

corporation, and its successors and assigns under the Indenture hereinafter

referred to, being herein called the “Company”), promises to pay interest on

the principal amount of this Note at the rate per annum shown above; provided,

however, that if a Registration Default (as defined in the Registration Rights

Agreement) occurs, additional interest will accrue on this Note

as provided in the Registration Rights Agreement at a rate of 0.25% per annum

(“Additional Interest Rate”) from and including the date on which any such

Registration Default shall occur but excluding the date on which all

Registration Defaults have been cured for the first 90-day period immediately

following the occurrence of such Registration Default.  The Additional Interest Rate shall increase

by an additional 0.25% per annum with respect to each subsequent 90-day period

until all Registration Defaults have been cured, up to a maximum Additional

Interest Rate of 1.0% per annum.  The

Company will pay interest semi-annually on March 15 and September 15 of each

year, commencing ________ __, 20__. 

Interest on the Notes will accrue from the most recent date to which

interest has been paid, or, if no interest has been paid, from ______ __, 20__,

or such other date on which the Notes are originally issued.  Interest will be computed on the basis of a

360-day year of twelve 30-day months. 

The Company shall pay interest on overdue principal and premium at the

above rate and will pay interest on overdue installments of interest at such

rate to the extent lawful at the rate borne by the Notes.




 




ARTICLE VIIMethod of

Payment.




 




The Company will pay interest on the Notes (except

defaulted interest) to the Persons who are registered Holders of Notes at the

close of business on the March 1 or September 1 next preceding the interest

payment date even if Notes are canceled after the record date and on or before

the interest payment date.  Holders must

surrender Notes to a Paying Agent to collect principal payments.  The Company will pay principal and interest

in money of the United States that at the time of payment is legal tender for

payment of public and private debts.  Payments

in respect of the Notes represented by a Global Note (including principal,

premium, if any, and interest) will be made by wire transfer of immediately

available funds to the accounts specified by The Depository Trust Company.  The Company will make all payments in respect

of a certificated Note (including principal, premium, if any, and interest) at

the Company’s option by (i) mailing a check to the registered address of each

Holder thereof or (ii) by wire transfer to a Dollar account maintained by the

payee with a bank in the United States.




 




ARTICLE VIIIPaying

Agent and Security Registrar.




 




23





























 




Initially, the Trustee will act as Paying

Agent and Security Registrar.  The

Company may appoint and change any Paying Agent or Security Registrar without

notice.  The Company may act as Paying

Agent or Security Registrar.




 




ARTICLE IXIndenture.




 




The Company issued the Notes pursuant to a Second

Supplemental Indenture, dated as of March 13, 2002,

which supplements an Indenture and a First Supplemental Indenture, each dated

as of November 1, 1998, (collectively, the “Indenture”), between the

Company and the Trustee.  The terms of

the Notes include those stated in the Indenture and those made part of the

Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.

§§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and not

defined herein have the meanings ascribed thereto in the Indenture.  The Notes are subject to all such terms, and

Holders of Notes are referred to the Indenture and the TIA for a statement of

those terms.




 




The Notes are senior unsecured obligations of

the Company.  The Initial Notes issued on the

Issue Date and all Exchange Notes or Private Exchange Notes with the same

Stated Maturity as such series of Initial Notes issued in exchange therefor,

together with any Additional Notes of the same series as such Initial Notes, will

be treated as a single class for all purposes under the Indenture.  The Indenture contains a covenant that limits the

ability of the Company and its Subsidiaries to incur secured Debt unless the

total amount of all the secured Debt would not exceed at any time outstanding the

greater of (i) the difference between (a) 10% of Consolidated Net Tangible

Assets of the Company and its Subsidiaries minus (b) the amount, if any, of

Debt outstanding which is secured by any Utility Assets and (ii) $300,000,000.  This covenant is subject to important

exceptions and qualifications as more fully provided in the Indenture.




 




ARTICLE XOptional

Redemption.




 




The Company may redeem all or part of

the Notes at any time at its option at a Redemption Price equal to

the greater of (i) the principal amount of the Notes being redeemed plus accrued

interest to the Redemption Date or (ii) the Make-Whole Amount for the Notes of the

series being redeemed as more fully provided for in the Indenture.




 




ARTICLE XINotice of

Redemption.




 




If the Company is redeeming less than all the Notes at any time, the

Trustee will select Notes to be redeemed by lot or using a method it considers

fair and appropriate.  Notice of

redemption will be mailed at least 30 days but not more than 60 days before

the Redemption Date to each Holder of Notes to be redeemed in

accordance with Section 106 of the Indenture.  Notes in denominations larger than $1,000 principal amount may be redeemed

in part but only in integral multiples of $1,000. 

The Company will not know the exact Redemption Price until three

Business Days before the Redemption Date. 

Therefore, the notice of redemption will only describe how the

Redemption Price will be calculated.  If

money sufficient to pay the Redemption Price of 




 




24





























 




and accrued interest on all Notes (or portions thereof) to be redeemed

on the Redemption Date is deposited with the Paying Agent on or before the

Redemption Date and certain other conditions are satisfied, on and after such Redemption

Date interest will cease to accrue on such Notes (or such portions thereof)

called for redemption.




 




ARTICLE XIIAdditional Notes.




 




The Company may, without the consent of the Holders of Notes, create and

issue Additional Notes of any series ranking equally with the Notes of that

series in all respects, including having the same CUSIP number, so that such

Additional Notes shall be consolidated and form a single series with the Notes

of that series and shall have the same terms as to status, redemption or

otherwise as the Notes of that series. 

No Additional Notes may be issued if an Event of Default has occurred

and is continuing with respect to the Notes.




 




ARTICLE XIIIDenominations;

Transfer; Exchange.




 




The Notes are in registered form without coupons in

denominations of $1,000 and integral multiples of $1,000.  Holders of Notes may transfer or exchange

Notes in accordance with the Indenture. 

The Security Registrar may require a Holder of a

Note, among other things, to furnish appropriate endorsements or transfer documents

and to pay any taxes and fees required by law or permitted by the

Indenture.  The Security Registrar need not

register the transfer of or exchange any Note selected for redemption (except,

in the case of a Note to be redeemed in part, the portion of the Note not to be

redeemed) or any Notes for a period of 15 days before a selection of Notes to

be redeemed.




 




ARTICLE XIVPersons

Deemed Owners.




 




The registered Holder of this Note may be treated as

the sole owner of such Note for all purposes.




 




ARTICLE XVUnclaimed

Money.




 




Subject to applicable abandoned property law, if money

for the payment of principal or interest remains unclaimed for two years, the

Trustee or Paying Agent shall pay the money back to the Company at its request

unless an abandoned property law designates another Person.  After any such payment, Holders entitled to

the money must look only to the Company and not to the Trustee or Paying Agent

for payment.




 




ARTICLE XVISatisfaction

and Discharge.




 




Under the Indenture, the Company can terminate its obligations with respect

to the Notes not previously delivered to the Trustee for cancellation when

those Notes have become due and payable or will become due and payable at their

Stated 




 




25





























 




Maturity

within one year or are to be called for redemption within one year under

arrangements satisfactory to the Trustee for giving notice of redemption.  The Company may terminate its obligations

with respect to the Notes by depositing with the Trustee, as trust funds in

trust dedicated solely for that purpose, an amount sufficient to pay and

discharge the entire indebtedness on the Notes.  In that case, the Indenture will cease to be of further effect

and the Company’s obligations will be satisfied and discharged with respect to

the Notes (except as to the Company’s obligations to pay all other amounts due

under the Indenture and to provide certain Officers’ Certificates and Opinions

of Counsel to the Trustee).  At the

expense of the Company, the Trustee will execute proper instruments

acknowledging the satisfaction and discharge.




 




ARTICLE XVIIAmendment;

Waiver.




 




Subject to certain exceptions set forth in the

Indenture, (i) the Indenture or the Notes may be amended with the written

consent of the Holders of at least a majority in principal amount outstanding

of the Notes; and (ii) any default or noncompliance with any provision

may be waived with the written consent of the Holders of a majority in

principal amount of the Notes then outstanding.  Subject to certain exceptions set forth in the Indenture, without

the consent of any Holder of a Note, the Company and the Trustee shall be

entitled to amend the Indenture or the Notes (i) to evidence the

succession of another Person to the Company and the assumption by any such

successor of the covenants of the Company contained in the Indenture and in the

Notes; or (ii) to add to the covenants of the Company for the benefit of the

Holders of all or any series of Securities (and if such covenants are to be for

the benefit of less than all series of Securities, stating that such covenants

are being included solely for the benefit of such Series) or to surrender any

right or power conferred upon the Company in the Indenture; or (iii) to add any

additional Events of Default (and if such Events of Default are to be for the

benefit of less than all series of Securities, stating that such Events of

Default are being included solely for the benefit of such Series); or (iv) to

change or eliminate any of the provisions of the Indenture; provided that any

such change or elimination shall become effective only when there is no

Security Outstanding of any series created prior to the execution of such

supplemental indenture which is entitled to the benefit of such provision; or

(v) to secure the Securities; or (vi) to establish the form of securities of

any series as permitted by Sections 201 and 301 of the Indenture; or (vii) to

evidence and provide for the acceptance of appointment under the Indenture by a

successor Trustee with respect to the Securities of one or more series and to

add to or change any of the provisions of the Indenture as shall be necessary

to provide for or facilitate the administration of the trusts under the

Indenture by more than one Trustee pursuant to the requirements of Section

610(b) of the Indenture; or (viii) to close the Indenture with respect to the

authentication and delivery of additional series of Securities, to cure any

ambiguity, to correct or supplement any provision in the Indenture which may be

inconsistent with any other provision in the Indenture, or to make any other

provisions with respect to matters or questions arising under the Indenture;

provided such action shall not adversely affect the interests of the holders of

all securities of any series in any material respect.




 




26





























 




ARTICLE XVIIIDefaults

and Remedies.




 




If an Event of Default occurs and is continuing, the

Trustee or the Holders of at least 25% in aggregate principal amount of the

Notes may declare all the Notes to be due and payable immediately.  Certain events of bankruptcy or insolvency

are Events of Default which will result in the Notes being due and payable

immediately upon the occurrence of such Events of Default.




 




Holders of Notes may not enforce the Indenture or the

Notes except as provided in the Indenture. 

The Trustee may refuse to enforce the Indenture or the Notes unless it

receives indemnity or security satisfactory to it.  Subject to certain limitations, Holders of a

majority in principal amount of the Notes may direct the Trustee in its

exercise of any trust or power.  The

Trustee may withhold from Holders of Notes notice of any continuing Default

(except a Default in payment of principal or interest) if it determines that withholding

such notice is in the interest of the Holders of Notes.




 




ARTICLE XIXTrustee

Dealings with the Company.




 




Subject to certain limitations imposed by the TIA, the

Trustee under the Indenture, in its individual or any other capacity, may

become the owner or pledgee of Notes and may otherwise deal with and collect

obligations owed to it by the Company or its Affiliates and may otherwise deal

with the Company or its Affiliates with the same rights it would have if it

were not Trustee.




 




ARTICLE XXNo Recourse

Against Others.




 




A director, officer, employee or stockholder, as such,

of the Company or the Trustee shall not have any liability for any obligations

of the Company under the Notes or the Indenture or for any claim based on, in

respect of or by reason of such obligations or their

creation.  By accepting a Note,

each Holder of a Note waives and releases all such liability.  The waiver and release are part of the

consideration for the issue of the Notes.




 




ARTICLE XXIAuthentication.




 




This Note shall not be valid until an authorized

signatory of the Trustee (or an authenticating agent) manually signs the

certificate of authentication on the face of this Note.




 




ARTICLE XXIIAbbreviations.




 




Customary abbreviations may be used in the name of a

Holder of a Note or an assignee, such as TEN COM (=tenants in common), TEN ENT

(=tenants by the 




 




27





























 




entireties), JT TEN (=joint tenants with rights of survivorship and not

as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors

Act).




 




ARTICLE XXIIICUSIP,

ISIN and Common Code Numbers.




 




Pursuant to a recommendation promulgated by

the Committee on Uniform Security Identification Procedures, the Company has

caused CUSIP numbers to be printed on the Notes and has directed the Trustee to

use such CUSIP numbers in notices of redemption as a convenience to Holders of

Notes.  To the extent such numbers have been

issued, the Company has caused ISN and Common Code numbers to be similarly

printed on the Notes and has similarly instructed the Trustee.  No representation is made as to the

accuracy of such numbers either as printed on the Notes or as contained in any

notice of redemption and reliance may be placed only on the other

identification numbers placed thereon.




 




ARTICLE XXIVHolders’

Compliance with Registration Rights Agreement.




 




Each Holder of a Note, by acceptance hereof,

acknowledges and agrees to the provisions of the Registration Rights Agreement,

including, without limitation, the obligations of the Holders with respect to a

registration and the indemnification of the Company to the extent provided

therein.




 




ARTICLE XXVGoverning

Law.




 




This Security shall be governed by, and construed in

accordance with, the internal laws of the State of New York,

without giving effect to contrary conflict of laws or choice of laws

provisions of the State of New York or any other jurisdiction.




 






















 




The Company will furnish to any Holder of a Note upon

written request and without charge to such Holder of a Note a copy of the

Indenture.  Requests may be made to:




 




NorthWestern Corporation




125 S. Dakota Avenue, Suite 1100




Sioux Falls, South Dakota  57104




Attention:  Secretary




 




28

































 









 




ASSIGNMENT FORM




 




To assign this Note, complete the fo rm below:




 




I or we assign and transfer this Note to:




 




[Print or type assignee’s name, address and zip

code]




 




[Insert assignee’s soc. sec. or tax I.D. No. ]




 




and irrevocably appoint __________________ agent to

transfer this Note on the books of NorthWestern Corporation.  The agent may substitute another to act for

him.








 









 




	

  Date: 


  	

   


  	

   


  	

  Your Signature:


  	

   


  









 









Sign exactly as your name appears on the face of this Note.




 




In

connection with any transfer of any of the Notes evidenced by this certificate

occurring prior to the expiration of the period referred to in Rule 144(k)

under the Securities Act after the later of the date of original issuance of

such Notes and the last date, if any, on which such Notes were owned by

NorthWestern Corporation or any Affiliate of 

NorthWestern Corporation, the undersigned confirms that such Notes are

being transferred in accordance with its terms.




 




CHECK ONE

BOX BELOW




 




(1)           o            to NorthWestern Corporation; or




 




(2)           o            pursuant to an effective

registration statement under the Securities Act of 1933; or




 




(3)           o            inside the United States to a

“qualified institutional buyer” (as defined in Rule 144A under the Securities 




Act of 1933) that purchases for its own account or for the account of a

qualified institutional buyer to whom notice is given that such transfer is

being made in reliance on Rule 144A, in each case pursuant to and in compliance

with Rule 144A under the Securities Act of 1933; or




 




29





























 




(4)           o            outside the United States in an

offshore transaction within the meaning of Regulation S under the




 Securities Act of 1933 in

compliance with Rule 904 under the Securities Act of 1933; or




 




(5)           o            pursuant to the exemption from

registration provided by Rule 144 under the Securities Act of 1933.




 




Unless one of the boxes is checked, the Trustee will refuse to register

any of the Notes evidenced by this certificate in the name of any person other

than the registered holder thereof; provided, however, that if box (4) or (5)

is checked, the Trustee shall be entitled to require, prior to registering any

such transfer of the Notes, such legal opinions, certifications and other

information as NorthWestern Corporation or the Trustee has reasonably required

to confirm that such transfer is being made pursuant to an exemption from, or

in a transaction not subject to, the registration requirements of the

Securities Act of 1933, such as the exemption provided by rule 144 under such

Act.




 




	

   


  	

   


  	

   


  
	

  Signature


  
	

   


  	

   


  
	

  Signature Guarantee:


  	

   


  
	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Signature must be guaranteed


  	

   


  	

  Signature


  
								





 




Signatures must be guaranteed by an “eligible guarantor institution”

meeting the requirements of the Security Registrar, which requirements include

membership or participation in the Security Transfer Agent Medallion Program (“STAMP”)

or such other “signature guarantee program” as may be determined by the

Security Registrar in addition to, or in substitution for, STAMP, all in

accordance with the Securities Exchange Act of 1934, as amended.




 




30





























 




TO BE COMPLETED BY PURCHASER IF (3) ABOVE

IS CHECKED.




 




The undersigned represented and warrants that it is purchasing this Note

for its own account or any account with respect to which it exercises sole

investment discretion and that is and any such account is a “qualified

institutional buyer” within the meaning of Rule 144A under the Securities act

of 1933, and is aware that the sale to it is being made in reliance on Rule

144A and acknowledges that it has received such information regarding the

determined not to request such information and that is aware that the

transferor is relying upon the undersigned’s foregoing representations in order

to claim the exemption from registration provided by Rule 144A.




 




	

  Dated:


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  NOTICE:  To be executed by an

  executive officer


  





 




31





























 




DB Draft of March 6, 2002




 




[TO BE ATTACHED TO GLOBAL

NOTES]




SCHEDULE OF INCREASES OR

DECREASES IN GLOBAL NOTE




 




The following increases or decreases in this Global

Note have been made:




 




	

  Date of


  Exchange


  	

   


  	

  Amount of decrease in 


  Principal Amount of this 


  Global Note


  	

   


  	

  Amount of increase in 


  Principal Amount of this 


  Global Note


  	

   


  	

  Principal Amount of this 


  Global Note following 


  such decrease or increase


  	

   


  	

  Signature of authorized 


  signatory of Trustee or


  Notes Custodian


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  





 




32





























 




EXHIBIT 2




to




SUPPLEMENTAL INDENTURE




 




[FORM OF FACE OF EXCHANGE

NOTE




OR PRIVATE EXCHANGE NOTE]




 




*/**/




 






















*/[If the Note is to be issued in global form add

the Global Notes Legend from Exhibit 1 to the Supplemental Indenture and the

attachment from such Exhibit 1 captioned “[TO BE ATTACHED TO GLOBAL NOTES] —

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE”.]




 




**/[If the Note is a Private Exchange Note issued in

a Private Exchange to an Initial Purchaser holding an unsold portion of its initial

allotment, add the Restricted Securities Legend from Exhibit 1 to the

Supplemental Indenture and replace the Assignment Form included in this Exhibit

A with the Assignment Form included in such Exhibit 1.]




 




 




	

  No.


  	

   


  	

   


  	

  $


  	

   


  
	

  CUSIP


  	

   No.:


  	

   


  	

   


  	

   


  
	

  ISN 


  	

  No.:


  	

   


  	

   


  	

   


  
	

  Common Code 


  	

  No.:


  	

   


  	

   


  	

   


  
												





 




 




___% Notes due March 15,

20__




 




NORTHWESTERN CORPORATION, a Delaware corporation,

promises to pay to CEDE & Co., or registered assigns, the principal sum of

_____________________________________ Dollars on March 15, 20___.




 




Interest Payment Dates:  March 15 and September 15.




 




33





























 




Record Dates: 

March 1 and September 1.




 




Additional provisions of this Note are set forth on

the reverse side of this Note.




 




	

  Dated: _______ __, 200_


  	

   


  
	

   


  
	

   


  	

  NORTHWESTERN CORPORATION


  
	

   


  
	

   


  	

   


  	

  By:


  	

   


  
	

   


  	

  Name:


  	

   


  
	

   


  	

  Title:


  	

   


  
	

   


  
	

   


  
	

  Attest:


  
	

   


  
	

  By:


  	

   


  	

   


  	 

	

   


  	

  Name:


  
	

   


  	

  Title


  
										





 




34





























 




TRUSTEE’S CERTIFICATE OF




AUTHENTICATION




 




	

  Dated:  _____

  __, 20__


  	

   


  	

   


  
	

   


  
	

  This is one of the Securities of the series

  designated therein referred to in the within-mentioned Indenture.


  
	

   


  	

   


  
	

   


  	

  JPMorgan Chase Bank, as successor to the


  Chase Manhattan Bank, as Trustee


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  	

   


  
	

   


  	

  Authorized Officer


  
						





 




35





























 




[FORM OF REVERSE SIDE OF EXCHANGE NOTE OR

PRIVATE




EXCHANGE NOTE]




 




_____% Notes due March

15, 20___




 




1.             Interest.




 




NORTHWESTERN CORPORATION, a Delaware corporation (such

corporation, and its successors and assigns under the Indenture hereinafter

referred to, being herein called the “Company”), promises to pay interest on

the principal amount of this Note at the rate per annum shown above.  The Company will pay interest semi-annually

on March 15 and September 15 of each year, commencing ________

__, 20__.  Interest on the Notes

will accrue from the most recent date to which interest has been paid, or, if

no interest has been paid, from _______ __, 20__, or such other date on which

the Notes are originally issued. 

Interest will be computed on the basis of a 360-day year of twelve

30-day months.  The Company shall pay

interest on overdue principal and premium at the above rate and will pay

interest on overdue installments of interest at such rate to the extent lawful

at the rate borne by the Notes.




 




ARTICLE XXVIMethod of

Payment.




 




The Company will pay interest on the Notes (except

defaulted interest) to the Persons who are registered Holders of Notes at the

close of business on the March 1 or September 1 next preceding the interest

payment date even if Notes are canceled after the record date and on or before

the interest payment date.  Holders must

surrender Notes to a Paying Agent to collect principal payments.  The Company will pay principal and interest

in money of the United States that at the time of payment is legal tender for

payment of public and private debts.  Payments

in respect of the Notes represented by a Global Note (including principal,

premium, if any, and interest) will be made by wire transfer of immediately

available funds to the accounts specified by The Depository Trust Company.  The Company will make all payments in respect

of a certificated Note (including principal, premium, if any, and interest) at

the Company’s option by (i) mailing a check to the registered address of each

Holder thereof or (ii) by wire transfer to a Dollar account maintained by the

payee with a bank in the United States.




 




ARTICLE XXVIIPaying

Agent and Security Registrar.




 




Initially, the Trustee will act as Paying

Agent and Security Registrar.  The

Company may appoint and change any Paying Agent or Security Registrar without

notice.  The Company may act as Paying

Agent or Security Registrar.




 




ARTICLE XXVIIIIndenture.




 




The Company issued the Notes pursuant to a Second

Supplemental Indenture, dated as of March 13, 2002,

which supplements an Indenture and a First 




 




36





























 




Supplemental Indenture, each dated as of November 1, 1998,

(collectively, the “Indenture”), between the Company and the

Trustee.  The terms of the Notes include

those stated in the Indenture and those made part of the Indenture by reference

to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as

in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and not

defined herein have the meanings ascribed thereto in the Indenture.  The Notes are subject to all such terms, and

Holders of Notes are referred to the Indenture and the TIA for a statement of

those terms.




 




The Notes are senior unsecured obligations of

the Company.  The Initial Notes issued on

the Issue Date and all Exchange Notes or Private Exchange Notes with the same

Stated Maturity as such series of Initial Notes issued in exchange therefor,

together with any Additional Notes of the same series as such Initial Notes, will

be treated as a single class for all purposes under the Indenture.  The Indenture contains a covenant that limits the

ability of the Company and its Subsidiaries to incur secured Debt unless the

total amount of all the secured Debt would not exceed at any time outstanding the

greater of (i) the difference between (a) 10% of Consolidated Net Tangible

Assets of the Company and its Subsidiaries minus (b) the amount, if any, of

Debt outstanding which is secured by any Utility Assets and (ii) $300,000,000.  This covenant is subject to important

exceptions and qualifications as more fully provided in the Indenture.




 




ARTICLE XXIXOptional

Redemption.




 




The Company may redeem all or part of

the Notes at any time at its option at a Redemption Price equal to

the greater of (i) the principal amount of the Notes being redeemed plus accrued

interest to the Redemption Date or (ii) the Make-Whole Amount for the Notes of the

series being redeemed as more fully provided for in the Indenture.




 




ARTICLE XXXNotice of

Redemption.




 




If the Company is redeeming less than all the Notes at any

time, the Trustee will select Notes to be redeemed by lot or using a method it

considers fair and appropriate.  Notice

of redemption will be mailed at least 30 days but not more than 60 days before

the Redemption Date to each Holder of Notes to be redeemed in

accordance with Section 106 of the Indenture.  Notes in denominations larger than $1,000 principal amount may be redeemed

in part but only in integral multiples of $1,000. 

The Company will not know the exact Redemption Price until three

Business Days before the Redemption Date. 

Therefore, the notice of redemption will only describe how the

Redemption Price will be calculated.  If

money sufficient to pay the Redemption Price of and accrued interest on all

Notes (or portions thereof) to be redeemed on the Redemption Date is deposited

with the Paying Agent on or before the Redemption Date and certain other

conditions are satisfied, on and after such Redemption Date interest will cease

to accrue on such Notes (or such portions thereof) called for redemption.




 




ARTICLE XXXIAdditional Notes.




 




37





























 




The Company may, without the consent of the Holders of Notes, create and issue

Additional Notes of any series ranking equally with the Notes of that series in

all respects, including having the same CUSIP number, so that such Additional

Notes shall be consolidated and form a single series with the Notes of that series

and shall have the same terms as to status, redemption or otherwise as the

Notes of that series.  No Additional

Notes may be issued if an Event of Default has occurred and is continuing with

respect to the Notes.




 




ARTICLE XXXIIDenominations;

Transfer; Exchange.




 




The Notes are in registered form without coupons in

denominations of $1,000 and integral multiples of $1,000.  Holders of Notes may transfer or exchange

Notes in accordance with the Indenture. 

The Security Registrar may require a Holder of a

Note, among other things, to furnish appropriate endorsements or transfer

documents and to pay any taxes and fees required by law or permitted by the

Indenture.  The Security Registrar need not

register the transfer of or exchange any Note selected for redemption (except,

in the case of a Note to be redeemed in part, the portion of the Note not to be

redeemed) or any Notes for a period of 15 days before a selection of Notes to

be redeemed.




 




ARTICLE XXXIIIPersons

Deemed Owners.




 




The registered Holder of this Note may be treated as

the sole owner of such Note for all purposes.




 




ARTICLE XXXIVUnclaimed

Money.




 




Subject to applicable abandoned property law, if money

for the payment of principal or interest remains unclaimed for two years, the

Trustee or Paying Agent shall pay the money back to the Company at its request

unless an abandoned property law designates another Person.  After any such payment, Holders entitled to

the money must look only to the Company and not to the Trustee or Paying Agent

for payment.




 




ARTICLE XXXVSatisfaction

and Discharge.




 




Under the Indenture, the Company can terminate its obligations with

respect to the Notes not previously delivered to the Trustee for cancellation

when those Notes have become due and payable or will become due and payable at

their Stated Maturity within one year or are to be called for redemption within

one year under arrangements satisfactory to the Trustee for giving notice of

redemption.  The Company may terminate

its obligations with respect to the Notes by depositing with the Trustee, as

trust funds in trust dedicated solely for that purpose, an amount sufficient to

pay and discharge the entire indebtedness on the Notes.  In that case, the Indenture will cease to be

of further effect and the Company’s obligations will be satisfied and

discharged with respect to the Notes (except as to the Company’s obligations to

pay all other amounts due




 




38





























 




under the

Indenture and to provide certain Officers’ Certificates and Opinions of Counsel

to the Trustee).  At the expense of the

Company, the Trustee will execute proper instruments acknowledging the

satisfaction and discharge.




 




ARTICLE XXXVIAmendment;

Waiver.




 




Subject to certain exceptions set forth in the

Indenture, (i) the Indenture or the Notes may be amended with the written

consent of the Holders of at least a majority in principal amount outstanding

of the Notes; and (ii) any default or noncompliance with any provision

may be waived with the written consent of the Holders of a majority in

principal amount of the Notes then outstanding.  Subject to certain exceptions set forth in the Indenture, without

the consent of any Holder of a Note, the Company and the Trustee shall be

entitled to amend the Indenture or the Notes (i) to evidence the

succession of another Person to the Company and the assumption by any such

successor of the covenants of the Company contained in the Indenture and in the

Notes; or (ii) to add to the covenants of the Company for the benefit of the

Holders of all or any series of Securities (and if such covenants are to be for

the benefit of less than all series of Securities, stating that such covenants

are being included solely for the benefit of such Series) or to surrender any

right or power conferred upon the Company in the Indenture; or (iii) to add any

additional Events of Default (and if such Events of Default are to be for the

benefit of less than all series of Securities, stating that such Events of

Default are being included solely for the benefit of such Series); or (iv) to

change or eliminate any of the provisions of the Indenture; provided that any

such change or elimination shall become effective only when there is no

Security Outstanding of any series created prior to the execution of such

supplemental indenture which is entitled to the benefit of such provision; or

(v) to secure the Securities; or (vi) to establish the form of securities of

any series as permitted by Sections 201 and 301 of the Indenture; or (vii) to

evidence and provide for the acceptance of appointment under the Indenture by a

successor Trustee with respect to the Securities of one or more series and to

add to or change any of the provisions of the Indenture as shall be necessary

to provide for or facilitate the administration of the trusts under the

Indenture by more than one Trustee pursuant to the requirements of Section

610(b) of the Indenture; or (viii) to close the Indenture with respect to the

authentication and delivery of additional series of Securities, to cure any

ambiguity, to correct or supplement any provision in the Indenture which may be

inconsistent with any other provision in the Indenture, or to make any other

provisions with respect to matters or questions arising under the Indenture;

provided such action shall not adversely affect the interests of the holders of

all securities of any series in any material respect.




 




ARTICLE XXXVIIDefaults

and Remedies.




 




If an Event of Default occurs and is continuing, the

Trustee or the Holders of at least 25% in aggregate principal amount of the

Notes may declare all the Notes to be due and payable immediately.  Certain events of bankruptcy or insolvency

are Events of 




 




39





























 




Default which will result in the Notes being due and payable

immediately upon the occurrence of such Events of Default.




 




Holders of Notes may not enforce the Indenture or the

Notes except as provided in the Indenture. 

The Trustee may refuse to enforce the Indenture or the Notes unless it

receives indemnity or security satisfactory to it.  Subject to certain limitations, Holders of a

majority in principal amount of the Notes may direct the Trustee in its

exercise of any trust or power.  The

Trustee may withhold from Holders of Notes notice of any continuing Default

(except a Default in payment of principal or interest) if it determines that

withholding such notice is in the interest of the Holders of Notes.




 




ARTICLE XXXVIIITrustee

Dealings with the Company.




 




Subject to certain limitations imposed by the TIA, the

Trustee under the Indenture, in its individual or any other capacity, may

become the owner or pledgee of Notes and may otherwise deal with and collect

obligations owed to it by the Company or its Affiliates and may otherwise deal

with the Company or its Affiliates with the same rights it would have if it

were not Trustee.




 




ARTICLE XXXIXNo

Recourse Against Others.




 




A director, officer, employee or stockholder, as such,

of the Company or the Trustee shall not have any liability for any obligations

of the Company under the Notes or the Indenture or for any claim based on, in

respect of or by reason of such obligations or their

creation.  By accepting a Note,

each Holder of a Note waives and releases all such liability.  The waiver and release are part of the

consideration for the issue of the Notes.




 




ARTICLE XLAuthentication.




 




This Note shall not be valid until an authorized

signatory of the Trustee (or an authenticating agent) manually signs the

certificate of authentication on the face of this Note.




 




ARTICLE XLIAbbreviations.




 




Customary abbreviations may be used in the name of a

Holder of a Note or an assignee, such as TEN COM (=tenants in common), TEN ENT

(=tenants by the entireties), JT TEN (=joint tenants with rights of

survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A

(=Uniform Gift to Minors Act).




 




ARTICLE XLIICUSIP,

ISIN and Common Code Numbers.




 




40





























 




Pursuant to a recommendation promulgated by

the Committee on Uniform Security Identification Procedures, the Company has

caused CUSIP numbers to be printed on the Notes and has directed the Trustee to

use such CUSIP numbers in notices of redemption as a convenience to Holders of

Notes.  To the extent such numbers have been issued,

the Company has caused ISN and Common Code numbers to be similarly printed on

the Notes and has similarly instructed the Trustee.  No representation is made as to the accuracy of such

numbers either as printed on the Notes or as contained in any notice of

redemption and reliance may be placed only on the other identification numbers

placed thereon.




 




ARTICLE XLIIIHolders’

Compliance with Registration Rights Agreement.




 




Each Holder of a Note, by acceptance hereof,

acknowledges and agrees to the provisions of the Registration Rights Agreement,

including, without limitation, the obligations of the Holders with respect to a

registration and the indemnification of the Company to the extent provided

therein.




 




ARTICLE XLIVGoverning

Law.




 




This Security shall be governed by, and construed in

accordance with, the internal laws of the State of New York,

without giving effect to contrary conflict of laws or choice of laws

provisions of the State of New York or any other jurisdiction.




 






















 




The Company will furnish to any Holder of a Note upon

written request and without charge to such Holder of a Note a copy of the

Indenture.  Requests may be made to:




 




NorthWestern Corporation




125 S. Dakota Avenue, Suite 1100




Sioux Falls, South Dakota  57104




Attention:  Secretary




 




41





























 




ASSIGNMENT FORM




 




To assign this Note, complete the form below:




 




I or we assign and transfer this Note to:




 




[Print or type

assignee’s name, address and zip code]




 




[Insert assignee’s

soc. sec. or tax I.D. No. ]




 




and irrevocably appoint ___________________ agent to

transfer this Note on the books of NorthWestern Corporation.  The agent may substitute another to act for

him.








 









 




	

  Date: 


  	

   


  	

   


  	

   


  	

  Your Signature:


  	

   


  	

   


  





 




Sign exactly as your name appears on the face of this Note.








 









 




 




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