Document:

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                  FIRST AMENDMENT TO REFUNDING CREDIT AGREEMENT

         THIS FIRST AMENDMENT TO REFUNDING CREDIT AGREEMENT (this
"AMENDMENT") dated as of June 30, 2000 among Cornerstone Propane, L.P., a
Delaware limited partnership (the "BORROWER"), the undersigned financial
institutions (each a "LENDER" and together constituting the "REQUIRED
LENDERS", as said terms are defined in the Credit Agreement referred to
below) and Bank of America, N.A. (formerly Bank of America National Trust and
Savings Association), as agent for the Lenders as are or may become parties
to said Credit Agreement (in such capacity, the "AGENT").

                                 R E C I T A L S

         The Borrower is a party to a Refunding Credit Agreement dated as of
November 20, 1998 with the Agent and the Lenders party thereto (as amended,
supplemented or otherwise modified to the date hereof, the "CREDIT
AGREEMENT"). Capitalized terms used but not defined herein shall have the
respective meanings given such terms in the Credit Agreement.

         The Borrower has requested the Agent and the Lenders currently
parties to the Credit Agreement, as provided in Section 11.1 thereof, to
effect certain amendments of the Credit Agreement as more fully herein below
set forth and in fulfillment of the condition set forth in Section 2.1(b)
hereof, NOR has indicated its willingness to enter into a certain Guaranty
Agreement of even date herewith in favor of the Agent, for the benefit of the
Agent and the Lenders from time to time parties to the Credit Agreement.

         NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

                                    ARTICLE I

                         AMENDMENTS OF CREDIT AGREEMENT

Section 1.1 AMENDMENT OF PREAMBLE. On the terms of this Amendment and subject
            to the satisfaction of the conditions precedent set forth below in
            Article II, the preamble of the Credit Agreement is hereby amended
            to read in its entirety as follows:

              "This REFUNDING CREDIT AGREEMENT (as the same may be amended,
              supplemented or otherwise modified from time to time, this
              "AGREEMENT"), dated as of November 20, 1998, among CORNERSTONE
              PROPANE, L.P., a Delaware limited partnership (the
              "BORROWER"), the various financial institutions or other
              Persons as are or may become parties hereto pursuant to
              Section 11.11.1 or 11.11.3 hereof (collectively, the
              "LENDERS"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
              ASSOCIATION ("BOFA"), as agent (the "AGENT") for the Lenders."

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Section 1.2 AMENDMENTS OF SECTION 1.1. On the terms of this Amendment and
            subject to the satisfaction of the conditions precedent set forth
            below in Article II:

(A)  The definition of "Consolidated Interest Expense" set forth in Section 1.1
     of the Credit Agreement is hereby amended to read in its entirety as
     follows:

                         "`CONSOLIDATED INTEREST EXPENSE' means, for any
period, the aggregate consolidated interest expense of the Borrower and the
Restricted Subsidiaries determined in accordance with GAAP but including,
without duplication, (a) all commissions, discounts and other fees and
charges owed with respect to letters of credit and banker's acceptances for
such period, (b) net costs under Interest Rate Agreements for such period,
(c) the Synthetic Lease Interest Component of the Borrower and the Restricted
Subsidiaries for such period, (d) the portion of any Capitalized Lease
Liabilities allocable to consolidated interest expense for such period and
(e) the product of (1) the amount of all dividends (whether in cash or
otherwise (except dividends payable solely in shares of Qualified Capital
Stock)) on all Disqualified Stock of such Person and its Subsidiaries, times
(2) a fraction, the numerator of which is one and the denominator of which is
one minus the then current effective consolidated federal, state and local
income tax rate of such Person, expressed as a decimal; provided, however,
that "Consolidated Interest Expense" shall not include during any period any
out-of-pocket fees or expenses of the Borrower incurred in connection with
that certain First Amendment to Refunding Credit Agreement, dated as of June
30, 2000, among the Borrower, the Lenders and the Agent."

(B)    Section 1.1 of the Credit Agreement is hereby amended by inserting
       therein, in its proper alphabetical order, an additional definition to
       read in its entirety as follows:

                  "`GUARANTY AGREEMENT' means the Guaranty Agreement, dated as
         of June 30, 2000 by NOR in favor of the Agent."

(C)    The definition of "Loan Document" set forth in Section 1.1 of the Credit
       Agreement is hereby amended to read in its entirety as follows:

                 "`LOAN DOCUMENT' means this Agreement, the Notes, the Security
         Agreement, the Intercreditor Agreement, the Guaranty and any pledge
         agreement, security agreement, guaranty, or mortgage delivered to the
         Agent pursuant to this Agreement, as the same may be amended,
         supplemented, restated or otherwise modified from time to time;
         provided, that the Guaranty Agreement shall not be a Loan Document for
         purposes of this Agreement."

(D)    Section 1.1 of the Credit Agreement is hereby amended by inserting
       therein, in its proper alphabetical order, an additional definition to
       read in its entirety as follows:

         "`NOR PURCHASE EVENT' means the purchase by NOR of all of the
         outstanding Commitments and the Loans under this Agreement and the
         provision of cash collateral or the making of other arrangements
         satisfactory to the Issuer with respect to outstanding Letters of
         Credit, in each case in accordance with Section 2.12(b)(i) or 2.14 of
         the Guaranty Agreement."

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Section 1.3 AMENDMENT OF SECTION 8.2.4. On the terms of this Amendment and
            subject to the satisfaction of the conditions precedent set forth
            below in Article II, Section 8.2.4 of the Credit Agreement is
            hereby amended by inserting, at the end of said Section, a new
            paragraph to read in its entirety as follows:

        "Notwithstanding the foregoing provisions of this SECTION 8.2.4 or any
        directly or indirectly appurtenant definition set forth in SECTION 1.1,
        so long as the Guaranty Agreement shall be in full force and effect and
        NOR (i) is in compliance with all of its material obligations
        thereunder and (ii) has not attempted to revoke in writing any of its
        obligations thereunder pursuant to Section 2.10 thereof or otherwise:

                  (A) the "Total Funded Indebtedness to Consolidated Cash Flow
         Ratio" as of any relevant date and for the period then ending shall,
         for purposes of the foregoing clause (a) of this SECTION 8.2.4, be
         computed by subtracting $40,000,000 (or such greater amount as shall
         be the applicable "Guarantied Amount" on such date as specified in or
         pursuant to the Guaranty Agreement) from the sum of the consolidated
         Debt, Capitalized Lease Liabilities and Synthetic Lease Obligations of
         the Borrower and the Restricted Subsidiaries (to the extent not
         resulting in a negative number); and

                  (B) the ratio of Consolidated Cash Flow to Consolidated
         Interest Expense as of any relevant date and for the period then
         ending shall, for purposes of the foregoing clause (b) of this
         SECTION 8.2.4, be computed by excluding from the denominator of such
         ratio an amount equal to the interest paid during such period on an
         amount of such Indebtedness, not less than $40,000,000, equal to the
         daily average "Guarantied Amount" from time to time in effect during
         such period as specified in or pursuant to the Guaranty Agreement of
         Indebtedness of the Borrower and the Restricted Subsidiaries at a rate
         equal to (1) to the extent of the average amount of the Loans
         outstanding during such period, the interest rates paid during such
         period on such Loans under this Agreement and (2) thereafter, the
         average of the interest rates paid during such period on the Private
         Placement Debt and the Parity Debt.

         In the event that (i) the Guaranty Agreement shall cease to be in full
         force and effect, (ii) NOR fails to comply with any of its material
         obligations under the Guaranty Agreement or (iii) NOR attempts to
         revoke in writing any of its obligations under the Guaranty Agreement,
         any Default or Event of Default which would have existed under the
         Credit Agreement except for the adjustments made pursuant to clauses
         (A) and (B) above shall be retroactively reinstated, and the Agent and
         the Lenders shall have all of their rights and remedies under the
         Credit Agreement, including any rights and remedies arising from a
         Default or Event of Default occasioned by a violation of this Section
         8.2.4."

Section 1.4 AMENDMENT OF SECTION 9.3(d). On the terms of this Amendment and
            subject to the satisfaction of the conditions precedent set forth
            below in Article II, Section 9.3(d) of the Credit Agreement is
            hereby amended by inserting the following at the end thereof:

         "Without limiting the generality of the foregoing, the Borrower
         acknowledges and agrees that the rights provided for in the Guaranty
         Agreement are in addition to the rights provided for in this Agreement
         and the other Loan Documents. In connection with the

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         Guaranty Agreement, the Borrower agrees that any amount paid over to
         the Agent pursuant to Section 2.08 of the Guaranty Agreement may be
         applied by the Agent and the Lenders to principal of the Loans (and
         the same shall thereupon be reduced) notwithstanding the Borrower's
         intention to pay, or direction to NOR or any other Person to pay, any
         other obligation of the Borrower. Any amounts received by the Agent
         or the Lenders pursuant to the terms of the Guaranty Agreement shall
         be applied to principal of the Loans."

Section 1.5 AMENDMENT OF SECTION 10.9. On the terms of this Amendment and
            subject to the satisfaction of the conditions precedent set forth
            below in Article II, the last two sentences of Section 10.9 of the
            Credit Agreement are hereby amended to read in their entirety as
            follows:

         "Any successor agent shall have a market capitalization equal to or
         greater than $500,000,000; PROVIDED, HOWEVER, that this requirement
         shall not apply from and after the occurrence of a NOR Purchase Event.
         Notwithstanding the foregoing, (a) BofA may not be removed as the
         Agent at the request of the Required Lenders unless BofA shall also
         simultaneously be replaced as the Issuer hereunder pursuant to
         documentation in form and substance reasonably satisfactory to BofA
         and (b) upon any resignation of BofA (or any successor Agent) as the
         Agent, BofA (or such successor) shall be deemed to have concurrently
         resigned as the Issuer with respect to the issuance of any further
         Letters of Credit hereunder (including without limitation the
         extension of the expiration of any outstanding Letter of Credit),
         and, unless such resignation shall occur concurrently with or after a
         NOR Purchase Event, the successor Agent shall be deemed concurrently
         appointed as the Issuer (unless the Required Lenders otherwise
         agree)."

Section 1.6 ADDITION OF SECTION 10.12. On the terms of this Amendment and
            subject to the satisfaction of the conditions precedent set forth
            below in Article II, the Credit Agreement is hereby amended by
            inserting, as Section 10.12 of the Credit Agreement, a new
            provision to read in its entirety as follows:

         "Section 10.12 GUARANTY AGREEMENT. Each of the Lenders from time to
         time party to this Agreement irrevocably authorizes the Agent, without
         the necessity of any notice to or further consent from such Lender, to
         accept, on behalf of such Lender, the Guaranty Agreement, and agrees
         to be bound by all of the terms and conditions thereof."

Section 1.7 AMENDMENT OF SECTION 11.1. On the terms of this Amendment and
            subject to the satisfaction of the conditions precedent set forth
            below in Article II, Section 11.1 of the Credit Agreement is hereby
            amended by (a) deleting the period at the end of subsection (d) and
            substituting "; or" in lieu thereof and (b) inserting, immediately
            following such subsection (d), a new subsection (e) to read in its
            entirety as follows:

         "(e)  release NOR from its obligations under the Guaranty
               Agreement."

Section 1.8 ADDITION OF SECTION 11.11.3. On the terms of this Amendment and
            subject to the satisfaction of the conditions precedent set forth
            below in Article II, Section 11.11 of the

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            Credit Agreement is hereby amended by inserting, as Section
            11.11.3 of the Credit Agreement, a new provision to read in its
            entirety as follows:

         "Section 11.11.3 ASSIGNMENTS TO NOR. Upon the occurrence of a NOR
         Purchase Event, each Lender shall assign and delegate to NOR all of
         such Lender's total Loans and Commitments (the date of such assignment
         and delegation, the "Assignment Effective Date") pursuant to
         documentation satisfactory to such Lender and NOR. From and after the
         Assignment Effective Date, (x) NOR shall be deemed automatically to
         have become a party hereto and shall be and have the rights and
         obligations of a Lender hereunder and under the other Loan Documents,
         and (y) each assignor Lender shall be released from its obligations
         hereunder and under the other Loan Documents. Upon the Assignment
         Effective Date, the Commitments hereunder shall automatically be
         reduced to zero and NOR shall have no other obligation to lend, issue
         Letters of Credit or otherwise extend financial accommodations to the
         Borrower, although NOR may, in its sole discretion, do so if it so
         elects. In no event shall NOR have any obligation to indemnify the
         Agent under Section 10.7 hereof for events occurring prior to the
         Assignment Effective Date. Upon the Assignment Effective Date, the
         Borrower agrees for the benefit of NOR that the Borrower shall take
         all action necessary or appropriate pursuant to this Agreement, the
         Intercreditor Agreement and the other Loan Documents to reflect the
         NOR Purchase Event including, without limitation, (a) issuing new
         Notes payable to NOR, and (b) delivery to the Trustee of the
         certificates contemplated by Section 6 of the Intercreditor Agreement
         to ensure that NOR is recognized by the Trustee as a holder of Parity
         Debt and a Parity Lender thereunder for purposes of Section 4 of the
         Intercreditor Agreement."

Section 1.9 ADDITION OF SECTION 11.16. On the terms of this Amendment and
            subject to the satisfaction of the conditions precedent set forth
            below in Article II, the Credit Agreement is hereby amended by
            inserting, as Section 11.16 of the Credit Agreement, a new
            provision to read in its entirety as follows:

         "Section 11.16 AMENDMENT OF INTERCREDITOR AGREEMENT. So long as the
         Guaranty Agreement remains in effect, each of the Borrower, the Agent
         and the Lenders hereby agrees that it will not, without the prior
         written consent of NOR, amend or otherwise modify the Intercreditor
         Agreement in any manner which would adversely affect the rights of
         NOR, in the event that NOR shall hold any Loans on the date of any
         distribution payable in respect of Parity Debt under Section 4 of the
         Intercreditor Agreement (as said Agreement is in effect on June 30,
         2000), to receive the portion of such distribution allocable to the
         Loans so held by NOR."

                                   ARTICLE II

                              CONDITIONS PRECEDENT

Section 2.1 CONDITIONS TO EFFECTIVENESS OF ARTICLE I AMENDMENTS. The amendments
            set forth in Article I of this Amendment shall become effective on
            the date (the "AMENDMENT EFFECTIVE DATE") which is the first date
            on which all of the following conditions precedent shall have been
            satisfied, and when effective, shall take effect as of June 30,
            2000, regardless of whether the Amendment Effective Date occurs
            prior to, on or after such date:

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(a)    The Agent shall have received, on behalf of the Lenders, this Amendment,
       duly executed and delivered by or on behalf of the Borrower, the Agent
       and the Required Lenders under the Credit Agreement.

(b)    The Agent shall have received, on behalf of the Lenders, the Guaranty
       Agreement, duly executed and delivered by NOR.

(c)    The Agent shall have received, on behalf of the Lenders, copies of
       partnership authorizations for the Borrower and resolutions of the board
       of directors of each of the Managing General Partner, the Restricted
       Subsidiaries and NOR authorizing and ratifying the transactions
       contemplated hereby, certified by the Secretary or an Assistant
       Secretary of such Person.

(d)    The Agent shall have received, on behalf of the Lenders, the opinion of
       (i) McCutchen, Doyle, Brown & Enersen, LLP, special counsel for the
       Borrower and (ii) Andrews & Kurth L.L.P., special counsel for NOR and of
       Eric R. Jacobsen, Vice President and General Counsel of NOR (it being
       understood that said special counsel and Mr. Jacobsen may apportion the
       coverage of their respective opinions in a manner customary for external
       and internal counsel in financing transactions); in each case in form
       and substance satisfactory to the Agent.

(e)    Each of the representations and warranties set forth in this Amendment
       shall be true and correct on a date when all other conditions set forth
       in Sections 2(a) through 2(d), inclusive, shall have been satisfied.

(f)    The Agent shall have received, for the account of each Lender, a
       non-refundable amendment fee in an amount equal to 0.6875% of the
       Commitments of such Lender (without regard to usage). Such amendment
       fees shall be fully earned and nonrefundable on the Amendment Effective
       Date. The Agent shall have also received, for its own account, a
       separate amendment fee pursuant to a letter agreement, dated the date
       hereof, between the Agent and the Borrower.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

Section 3.1 THE BORROWER'S REPRESENTATIONS AND WARRANTIES. In order to induce
            the Agent and the Lenders to enter into this Amendment and to amend
            the Credit Agreement in the manner provided in this Amendment, the
            Borrower represents and warrants to the Agent and each Lender as
            of the date of this Amendment as follows:

(a)    POWER AND AUTHORITY. The Borrower has all requisite partnership power
       and authority to enter into this Amendment and to carry out the
       transactions contemplated by, and perform its obligations under, the
       Credit Agreement as amended by this Amendment (hereafter referred to as
       the "AMENDED CREDIT AGREEMENT").

(b)    AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
       Amendment by the Borrower, and the performance of the Amended Credit
       Agreement by the Borrower have

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       been duly authorized by all necessary partnership action, and this
       Amendment has been duly executed and delivered on behalf of the
       Borrower.

(c)    ENFORCEABILITY.  The Amended Credit Agreement constitutes the legal,
       valid and binding obligation of the Borrower, enforceable against the
       Borrower in accordance with its terms, except as enforceability may be
       limited by (a) applicable bankruptcy, insolvency, reorganization,
       moratorium, fraudulent conveyance, fraudulent transfer or other similar
       laws relating to or affecting the rights of creditors generally, (b)
       general principles of equity (regardless of whether considered in a
       proceeding in equity or at law), including, without limitation (i) the
       possible unavailability of specific performance, injunctive relief or
       any other equitable remedy, and (ii) concepts of materiality,
       reasonableness, good faith and fair dealing, and (c) rights of
       indemnification or contribution being limited by Federal and state
       securities laws and the public policy underlying such laws.

(d)    NO CONFLICT. The execution and delivery by the Borrower of this
       Amendment and the performance by the Borrower of the Amended Credit
       Agreement do not and will not (i) contravene, in any material respect,
       any provision of any law, regulation, decree, ruling, judgment or order
       that is applicable to the Borrower or its properties or other assets,
       (ii) result in a breach of or constitute a default under the certificate
       of limited partnership or partnership agreement of the Borrower or any
       material agreement, indenture, lease or instrument binding upon it, or
       its properties or other assets or (iii) result in the creation or
       imposition of any Liens on its properties other than as permitted under
       the Credit Agreement.

(e)    GOVERNMENTAL CONSENTS. No authorization or approval or other action by,
       and no notice to or filing with, any governmental authority or
       regulatory body is required for the due execution, delivery and
       performance by the Borrower of this Amendment.

(f)    REPRESENTATIONS AND WARRANTIES IN THE CREDIT AGREEMENT. The Borrower
       confirms that, as of the Amendment Effective Date and after giving
       effect to this Amendment and the Guaranty Agreement, (i) the
       representations and warranties contained in Article VII of the Credit
       Agreement are true and correct in all material respects, except to the
       extent any such representation and warranty is expressly stated to have
       been made as of a specific date, in which case it shall be true and
       correct as of such specific date and (ii) no Default or Event of Default
       has occurred and is continuing.

(g)    RESTRICTED SUBSIDIARIES. As of the date of this Amendment, the Borrower
       has no Restricted Subsidiaries other than Cornerstone Holding and Flame.

                                   ARTICLE IV

                                  MISCELLANEOUS

Section 4.1 COUNTERPARTS; NOTICE OF EFFECTIVENESS. This Amendment may be
            executed by the Borrower and the Required Lenders in any number of
            counterparts, all of which shall constitute together but one and
            the same agreement, and any such person may become a party hereto
            by executing any such counterpart. The Agent shall give written
            notice of the

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            occurrence of the Amendment Effective Date to the Borrower, the
            Lenders and NOR in the manner specified in Section 11.2 of the
            Credit Agreement; PROVIDED, HOWEVER, that the failure to so notify
            shall not impair the effectiveness of this Amendment.

Section 4.2 RATIFICATION OF CREDIT AGREEMENT. The Credit Agreement, as amended
            by this Amendment (including, without limitation, Section 11.3(a)
            thereof as applied to the transactions contemplated hereby), is
            hereby ratified and confirmed in all respects.

Section 4.3 GOVERNING LAW. This Amendment shall be deemed to be a contract made
            under and governed by the internal laws of the State of New York.

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         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first above written.

                            CORNERSTONE PROPANE, L.P.

                            By:      CORNERSTONE PROPANE GP, INC.,
                                     its Managing General Partner

                                     By:      ________________________________
                                     Name:    ________________________________
                                     Title:   ________________________________

                             BANK OF AMERICA, N.A., as Agent for the Lenders

                                     By:      ________________________________
                                     Name:    ________________________________
                                     Title:   ________________________________

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                              BANK OF AMERICA, N.A.

                                     By:      ________________________________
                                     Name:    ________________________________
                                     Title:   ________________________________

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                             UNION BANK OF CALIFORNIA, N.A.

                                     By:      ________________________________
                                     Name:    ________________________________
                                     Title:   ________________________________

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                             FLEET NATIONAL BANK

                                     By:      ________________________________
                                     Name:    ________________________________
                                     Title:   ________________________________

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                            FIRST UNION NATIONAL BANK

                                     By:      ________________________________
                                     Name:    ________________________________
                                     Title:   ________________________________

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                             THE BANK OF NOVA SCOTIA

                                     By:      ________________________________
                                     Name:    ________________________________
                                     Title:   ________________________________

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                             CREDIT AGRICOLE INDOSUEZ

                                     By:      ________________________________
                                     Name:    ________________________________
                                     Title:   ________________________________

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Each of the undersigned hereby acknowledges and consents to the foregoing First
Amendment to Refunding Credit Agreement, reaffirms the terms of its Guaranty in
favor of the Trustee and acknowledges that such Guaranty remains in full force
and effect in accordance with its terms.

Dated: ________________              CORNERSTONE HOLDING CORP.

                                     By:      ________________________________
                                     Name:    ________________________________
                                     Title:   ________________________________

                                      FLAME, INC.

                                     By:      ________________________________
                                     Name:    ________________________________
                                     Title:   ________________________________

                                       16<PAGE>

                                                                  EXHIBIT 10.14

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--------------------------------------------------------------------------------

                               GUARANTY AGREEMENT

                            Dated as of June 30, 2000

                                       by

                            NORTHWESTERN CORPORATION

                                   in favor of

                             BANK OF AMERICA, N.A.,

                                    as Agent

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<PAGE>
                               GUARANTY AGREEMENT

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

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

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

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

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

                  SECTION 1. DEFINITIONS.

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

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

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

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

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

                  SECTION 2. THE GUARANTEE.

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

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

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<PAGE>

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

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

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

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

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

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

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

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

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

                                       3

<PAGE>

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

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

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

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

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

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

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

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

                                       4

<PAGE>

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

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

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

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

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

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

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

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

                                       5
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

                                         6
<PAGE>

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

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

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

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

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

                                       7
<PAGE>

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

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

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

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

                                      8
<PAGE>

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

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

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

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

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

                                      9
<PAGE>

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

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

                                      10
<PAGE>

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

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

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

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

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

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

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

                                      11
<PAGE>

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

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

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

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

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

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

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

                                      12
<PAGE>

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

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

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

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

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

                                      13
<PAGE>

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

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

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

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

                                      14
<PAGE>

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

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

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

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

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

                                      15
<PAGE>

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

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

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

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

                  SECTION 4. COVENANTS OF GUARANTOR.

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

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

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

                                      16
<PAGE>

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

                  SECTION 5.        MISCELLANEOUS PROVISIONS.

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

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

                                      17
<PAGE>

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

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

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

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

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

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

                                      18
<PAGE>

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

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

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

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

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

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

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

                                      19
<PAGE>

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

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

                                      20

<PAGE>

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

                                     GUARANTOR:

                                     NORTHWESTERN CORPORATION

                                     By:    _________________________________

                                     Name:  _________________________________

                                     Title: _________________________________

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

BANK OF AMERICA, N.A., as Agent

By:    _________________________________

Name:  _________________________________

Title: _________________________________

                                      21

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