EXHIBIT 4-D-4
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OTTER TAIL CORPORATION
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FIRST AMENDMENT
Dated as of December 1, 2002
to
NOTE PURCHASE AGREEMENT
Dated as of December 1, 2001
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Re: $90,000,000 6.63% Senior Notes
due December 1, 2011
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FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT
THIS FIRST AMENDMENT dated as of December 1, 2002 (the or this "First
Amendment") to the Note Purchase Agreement dated as of December 1, 2001 is
between and among OTTER TAIL CORPORATION, a Minnesota corporation (the
"Company"), and each of the institutions which is a signatory to this First
Amendment (collectively, the "Noteholders").
RECITALS:
A. The Company and each of the Noteholders have heretofore entered
into the Note Purchase Agreement dated as of December 1, 2001 (the "Note
Purchase Agreement"). The Company has heretofore issued the $90,000,000 6.63%
Senior Notes due December 1, 2011 (the "Notes") dated December 27, 2001 pursuant
to the Note Purchase Agreement. The Noteholders are the holders of 100% of the
outstanding principal amount of the Notes.
B. The Company has also entered into that certain Credit Agreement
dated as of April 30, 2002 as amended by a First Amendment to Credit Agreement
dated as of September 19, 2002 (as amended, the "Credit Agreement") with the
Banks defined therein and U.S. Bank National Association, as a Bank and as
Agent.
C. Section 10.7 of the Note Purchase Agreement provides, inter alia,
that the Noteholders are entitled to the benefit of any covenant, agreement,
event of default or put event set forth in the Credit Agreement which is more
restrictive on the Company (or more favorable to the Banks) than the covenants,
agreements, events of default or put events contained in the Note Purchase
Agreement.
D. Pursuant to Section 10.7 of the Note Purchase Agreement and to
incorporate those provisions of the Credit Agreement the benefit of which the
Noteholders are entitled to, the Company and the Noteholders now desire to amend
the Note Purchase Agreement in the respects, but only in the respects,
hereinafter set forth.
E. Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Note Purchase Agreement (as amended hereby) unless
herein defined or the context shall otherwise require.
NOW, THEREFORE, upon the full and complete satisfaction of the
conditions precedent to the effectiveness of this First Amendment set forth in
SECTION 3.1 hereof, and in consideration of good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the Company and the
Noteholders do hereby agree as follows:
SECTION 1. AMENDMENTS.
Section 1.1. Section 7.1(a) of the Note Purchase Agreement shall be and
is hereby amended by adding the following words after the phrase "this Section
7.1(a)": "provided, further, that in the event that the Company delivers such
financial statements or copies of such Quarterly
Otter Tail Corporation First Amendment to Note Purchase Agreement
Report on Form 10-Q to any Lender prior to the end of the time period specified
above, then and in such event, the Company shall deliver the same such items to
each such holder of the Notes concurrently therewith;"
Section 1.2. Section 7.1(d) of the Note Purchase Agreement shall be and
is hereby amended in its entirety to read as follows:
"(d) Notice of Default or Event of Default -- immediately upon
a Responsible Officer becoming aware of the existence of any Default or
Event of Default, a written notice specifying the nature and period of
existence thereof and what action the Company is taking or proposes to
take with respect thereto;"
Section 1.3. Section 8.3(a) of the Note Purchase Agreement shall be and
is hereby amended in its entirety to read as follows:
"Section 8.3. Investment Grade Put Event. (a) In the event
that an Investment Grade Put Event shall occur, the Company will give
written notice (a "Company Notice") of such fact not more than 10 days
after the Investment Grade Put Event Date to all holders of the Notes.
The Company Notice shall (i) describe the facts and circumstances of
the Investment Grade Put Event in reasonable detail, (ii) describe the
Debt of the Company then outstanding, (iii) specify the rating, if any,
accorded to Senior Debt by a Designated Rating Agency which is below an
Acceptable Rating or state that Senior Debt is no longer rated by
either one or both of the Designated Rating Agencies, (iv) refer to
this Section 8.3 and the right of the holders of the Notes to require
the Company to purchase their Notes on the terms and conditions
provided for herein upon the occurrence of an Investment Grade Put
Event, and (v) contain an offer by the Company to purchase all of the
outstanding Notes in full together with unpaid accrued interest to the
date of purchase and the Make-Whole Amount. Each holder of the Notes
shall have the right to accept such offer and require purchase of the
Notes held by such holder in full by written notice to the Company
given within 60 days following receipt of the Company Notice. On the
date designated in such holder's notice (which shall be not less than
10 days nor more than 20 days after the date such notice is delivered
to the Company), the Company shall purchase all Notes held by such
holder at 100% of the principal amount of such Notes, together with
unpaid accrued interest thereon to the date of purchase, and the
Make-Whole Amount, if any. Failure to respond by a holder of the Notes
shall constitute an acceptance of such offer and the date of purchase
shall be the 10th Business Day following the end of the 60 day period
referred to in the preceding sentence."
Section 1.4. The defined terms "Investment Grade Put Event" and "Senior
Debt" set forth in Section 8.3 of the Note Purchase Agreement shall be and are
hereby amended in their entirety to read as follows:
"Investment Grade Put Event" shall mean, and occur on, the
first date on which (i) either of the Designated Rating Agencies rate
Senior Debt below an Acceptable Rating or (ii) Senior Debt is no longer
rated by either one or both of the Designated Rating
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Agencies. If an Investment Grade Put Event Date shall have occurred and
subsequent to such Investment Grade Put Event Date both Designated
Rating Agencies shall rate Senior Debt an Acceptable Rating and
thereafter an Investment Grade Put Event shall occur, then a new
Investment Grade Put Event Date shall occur under this Agreement and
the Company's obligations under this Section 8.3 shall remain binding
and operative.
"Senior Debt" shall mean the long term, unsecured and
unsubordinated indebtedness of the Company.
Section 1.5. The introductory language to Section 9 of the Note
Purchase Agreement shall be and is hereby amended in its entirety to read as
follows:
"The Company covenants that so long as any of the Notes are
outstanding, unless, with respect to Sections 9.1 through 9.5 and
Sections 9.7 through 9.12, the Required Holders shall otherwise
expressly agree in writing, or, with respect to Section 9.6, the holder
of each Note shall otherwise expressly agree in writing:"
Section 1.6. Section 9.7 of the Note Purchase Agreement shall be and is
hereby deleted in its entirety.
Section 1.7. The introductory language to Section 10 of the Note
Purchase Agreement shall be and is hereby amended in its entirety to read as
follows:
"The Company covenants that so long as any of the Notes are
outstanding, unless the Required Holders shall otherwise expressly
agree in writing:"
Section 1.8. Section 10.3(j) of the Note Purchase Agreement shall be
and is hereby amended in its entirety to read as follows:
"(j) Liens created, assumed or incurred after the date of the
Closing given to secure Debt of the Company or any Subsidiary in
addition to the Liens permitted by the preceding clauses (a) through
(i) hereof; provided that all Debt secured by Liens permitted under
this Section 10.3(j) does not exceed $2,000,000 in the aggregate at any
time outstanding;"
Section 1.9. Section 10.4 of the Note Purchase Agreement shall be and
is hereby amended in by restating the introductory language and clause (a)
thereof to read as follows:
"Section 10.4. Merger, Consolidation, Etc. The Company will
not, and will not permit any Material Subsidiary to, consolidate with
or merge with any other corporation or convey, transfer or lease
substantially all of its assets in a single transaction or series of
transactions to any Person; provided that:
(a) Any Material Subsidiary which is a Wholly-Owned
Subsidiary may directly or indirectly merge or consolidate
with or into, or transfer all or
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Otter Tail Corporation First Amendment to Note Purchase Agreement
substantially all of its property to, or be a party to an
analogous reorganization with the Company or any other
Wholly-Owned Subsidiary so long as (i) in any such transaction
involving the Company, the Company shall be the surviving or
continuing Person and (ii) in any such transaction involving
such other Wholly-Owned Subsidiary which is the surviving or
continuing Person, such Wholly-Owned Subsidiary, if the
non-surviving Material Subsidiary was obligated under the
Guaranty Agreement and the Guaranty Agreement shall not have
been released pursuant to Section 9.12, shall provide to the
holders of the Notes the items described in Section 9.8 (a)
through (d) concurrently with the consummation of such
transaction; provided further, that a Material Subsidiary may
transfer all or substantially all of its property without
complying with the foregoing provisions of this clause (a) if
the transfer is in compliance with Section 10.5; and"
Section 1.10. Section 10.6 of the Note Purchase Agreement shall be and
is hereby amended in its entirety to read as follows:
"Section 10.6. Transactions with Related Parties. The Company
will not and will not permit any Material Subsidiary to enter into
directly or indirectly any transaction or group of related transactions
(including without limitation the purchase, lease, sale or exchange of
properties or the rendering of any service) with any Related Party
(other than the Company or another Material Subsidiary), except in the
ordinary course of and pursuant to the reasonable requirements of the
Company's or such Material Subsidiary's business and upon fair and
reasonable terms no less favorable to the Company or such Material
Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not a Related Party."
Section 1.11. The following shall be added as new Sections 10.8 through
10.12 of the Note Purchase Agreement:
"Section 10.8. Other Agreements. The Company will not and will
not permit any Material Subsidiary to enter into any agreement, bond,
note or other instrument with or for the benefit of any Person other
than the holders of the Notes which would: (a) be violated or breached
by the Company's performance of its obligations under the Notes or this
Agreement, or (b) prohibit any Subsidiary of the Company from paying
dividends or distributions on, or redeeming, acquiring or retiring for
value, any shares of stock or other ownership interest that the Company
holds in such Subsidiary.
Section 10.9. Restricted Payments. The Company will not and
will not permit any Material Subsidiary to either: (a) make any
Restricted Payment if any Default or Event of Default shall exist or
shall result from the making of such Restricted Payment; or (b)
directly or indirectly make any payment on, or redeem, repurchase,
defease, or make any sinking fund payment on account of, or any other
provision for, or otherwise pay, acquire or retire for value, any
Indebtedness of the Company or any Subsidiary that is subordinated in
right of payment to the Notes (whether pursuant to its terms or by
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Otter Tail Corporation First Amendment to Note Purchase Agreement
operation of law), except for regularly-scheduled payments of interest
and principal (which shall not include payments contingently required
upon occurrence of a change of control or other event) that are not
otherwise prohibited hereunder or under the document or agreement
stating the terms of such subordination.
Section 10.10. Investments. The Company will not and will not
permit any Material Subsidiary to acquire for value, make, have or hold
any Investments, except:
(a) Investments outstanding on April 30, 2002 and
listed on Schedule 10.10 attached hereto, and any increases or
decreases in the value thereof or write-ups, write-downs or
write-offs with respect to such Investments;
(b) travel advances to officers and employees in the
ordinary course of business;
(c) Investments in readily marketable direct
obligations of the United States of America having maturities
of one year or less from the date of acquisition;
(d) Certificates of deposit or bankers' acceptances,
each maturing within one year from the date of acquisition,
issued by any commercial bank organized under the laws of the
United States or any State thereof which has (i) combined
capital, surplus and undivided profits of at least
$100,000,000, and (ii) a credit rating with respect to its
unsecured indebtedness from a nationally recognized rating
service that is satisfactory to the Required Holders;
(e) Commercial paper maturing within 270 days from
the date of issuance and given the highest rating by a
nationally recognized rating service;
(f) Repurchase agreements relating to securities
issued or guaranteed as to principal and interest by the
United States of America;
(g) Extensions of credit in the nature of accounts
receivable or notes receivable arising from the sale of goods
and services in the ordinary course of business;
(h) Share of stock, obligations or other securities
received in settlement of claims arising in the ordinary
course of business;
(i) Investments outstanding on April 30, 2002 in
Subsidiaries by the Company and other Subsidiaries, and
Investments by the Company or other Subsidiaries in Persons
that will be Subsidiaries upon completion of such Investments;
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Otter Tail Corporation First Amendment to Note Purchase Agreement
(j) Investments not otherwise permitted hereunder
which shall not exceed (based on total consideration paid by
the Company or a Material Subsidiary): (i) $10,000,000 for any
single Investment or series of related Investments in any
Person not engaged in one or more of the Company's and
Subsidiaries' present lines of business, or (ii) $20,000,000
for any single Investment or series of related Investments in
any Person that is engaged in one or more of the Company's and
Subsidiaries' present lines of business, provided that consent
of the Required Holders to such Investments in excess of such
limit shall not be unreasonably withheld; and
(k) Any Material Subsidiary may make Investments
constituting loans to the Company and provided that no Default
or Event of Default shall have occurred and continued, the
Company and any Material Subsidiary may make Investments
constituting loans to (i) any Material Subsidiaries, or (ii)
any Subsidiaries that are not Material Subsidiaries, provided,
that such loans to any one Subsidiary shall not exceed
$15,000,000 in aggregate principal amounts outstanding at any
time.
Section 10.11. Contingent Liabilities. The Company will not
and will not permit any Material Subsidiary to either: (a) endorse,
guarantee, contingently agree to purchase or to provide funds for the
payment of, or otherwise become contingently liable upon, any
obligation of any other Person, except by the endorsement of negotiable
instruments for deposit or collection (or similar transactions) in the
ordinary course of business, or (b) agree to maintain the net worth or
working capital of, or provide funds to satisfy any other financial
test applicable to, any other Person, except (in the case of (a) or (b)
above) for (i) guaranties by the Company of loans to leveraged Employee
Stock Ownership Plans; (ii) a performance guaranty by the Company of
performance by DMI Industries under a certain contract involving
aggregate payments of approximately $20,000,000; (iii) guaranties by
the Company or any Material Subsidiary of obligations of any Material
Subsidiary as lessee under any lease that is not a Capital Lease, (iv)
other guaranties limited as to principal of recovery to not more than
$10,000,000 in the aggregate; (v) guaranties by Varistar Corporation of
the obligations of the Company under the Bank Credit Agreement and (vi)
the guaranty by Varistar Corporation of the obligations of the Company
in respect of up to $40,000,000 of Insured Senior Notes due October 1,
2017, as described in a Prospectus dated September 11, 2002 and a
prospectus supplement dated on or about September 19, 2002.
Section 10.12. Unconditional Purchase Obligations. The Company
will not and will not permit any Material Subsidiary to enter into or
be a party to any contract for the purchase or lease of materials,
supplies or other property or services if such contract requires that
payment be made by it regardless of whether or not delivery is ever
made of such materials, supplies or other property or services."
Section 1.12. Section 11(f) of the Note Purchase Agreement shall be and
is hereby amended as follows:
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Otter Tail Corporation First Amendment to Note Purchase Agreement
(a) the term "Significant" shall be deleted wherever said
term appears and the term "Material" shall be substituted therefor; and
(b) the figure "$10,000,000" shall be deleted wherever said
figure appears and the figure "$5,000,000" shall be substituted
therefor.
Section 1.13. Sections 11(g) and (h) of the Note Purchase Agreement
shall be and are hereby amended by deleting the term "Significant" wherever said
term appears and substituting therefor the term "Material."
Section 1.14. Section 11(i) of the Note Purchase Agreement shall be and
is hereby amended as follows:
(a) the term "Significant" shall be deleted and the term
"Material" shall be substituted therefor;
(b) the figure "$10,000,000" shall be deleted wherever said
figure appears and the figure "$1,000,000" shall be substituted
therefor; and
(c) the phrase "60 days" shall be deleted wherever said
phrase appears and the phrase "30 days" shall be substituted therefor.
Section 1.15. Section 11(k) of the Note Purchase Agreement shall be and
is hereby amended in its entirety to read as follows:
"(k) if (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or part
thereof or a waiver of such standards or extension of any amortization
period is sought or granted under section 412 of the Code, (ii) a
notice of intent to terminate any Plan shall have been or is reasonably
expected to be filed with the PBGC or the PBGC shall have instituted
proceedings under ERISA section 4042 to terminate or appoint a trustee
to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, shall
exceed $500,000, (iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or
any Subsidiary establishes or amends any employee welfare benefit plan
that provides post-employment welfare benefits in a manner that would
increase the liability of the Company or any Subsidiary thereunder; and
in the case of clauses (i), (iv), (v) or (vi) above only, any such
event or events, either individually or together with any other such
event or events, would reasonably be expected to have a Material
Adverse Effect; or"
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Otter Tail Corporation First Amendment to Note Purchase Agreement
Section 1.16. The following shall be added as a new Section 11(l) of
the Note Purchase Agreement:
"(l) any Person, or group of Persons acting in concert, that
owned less than 5% of the shares of any voting class of stock
of the Company shall have acquired more than 25% of the shares
of such voting stock."
Section 1.17. The following defined terms contained in Schedule B of the
Note Purchase Agreement shall be and are hereby amended in their entirety to
read as follows:
"Bank Credit Agreement" means the Credit Agreement dated as of
April 30, 2002 among the Company, the Banks defined therein, and U.S.
Bank National Association, as a Bank and as Agent, as amended from time
to time, any replacement, additional or successor agreement or
agreements thereto or any other bank credit facility or bank credit
facilities in effect from time to time with banks or other lending
institutions.
"Debt" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money and its
redemption obligations in respect of Redeemable Preferred
Stock;
(b) its liabilities for the deferred purchase price
of property acquired by such Person (excluding accounts
payable arising in the ordinary course of business but
including, without limitation, all liabilities created or
arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) its Capital Lease Obligations;
(d) all liabilities for borrowed money secured by
any Lien with respect to any property owned by such Person
(whether or not it has assumed or otherwise become liable for
such liabilities);
(e) net liabilities under any interest rate swap,
collar or other interest rate hedging agreement;
(f) undertakings or agreements to reimburse or
indemnify issuers of letters of credit other than commercial
letters of credit; and
(g) any Guaranty of such Person with respect to Debt
of a type described in any of clauses (a) through (f) hereof,
excluding ordinary course endorsements.
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Otter Tail Corporation First Amendment to Note Purchase Agreement
Debt of any Person shall include all obligations of such
Person of the character described in clauses (a) through (g) to the
extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished
under GAAP.
"Indebtedness" with respect to any Person means, at any time,
without duplication, all obligations, contingent or otherwise, which in
accordance with GAAP should be classified upon the Company's balance
sheet as liabilities, but in any event including the following (whether
or not they should be classified as liabilities upon such balance
sheet):
(a) its liabilities for borrowed money and its
redemption obligations in respect of Redeemable Preferred
Stock;
(b) its liabilities for the deferred purchase price
of property acquired by such Person (excluding accounts
payable arising in the ordinary course of business but
including all liabilities created or arising under any
conditional sale or other title retention agreement with
respect to any such property);
(c) Capital Lease Obligations;
(d) all liabilities for borrowed money secured by
any Lien with respect to any property owned by such Person
(whether or not it has assumed or otherwise become liable for
such liabilities);
(e) all its liabilities in respect of letters of
credit or instruments serving a similar function issued or
accepted for its account by banks and other financial
institutions (whether or not representing obligations for
borrowed money);
(f) Swaps of such Person;
(g) any obligation on account of deposits or
advances; and
(h) any Guaranty of such Person with respect to
liabilities of a type described in any of clauses (a) through
(f) hereof.
For all purposes of this Agreement, the Indebtedness of any
Person shall include the Indebtedness of any partnership or joint
venture in which such Person is a general partner or a joint venturer.
"Interest Charges" means, for any period of determination, the
aggregate consolidated amount, without duplication, of interest paid,
accrued or scheduled to be paid in respect of any Indebtedness of the
Company and its Subsidiaries, including in all cases interest expense
determined in accordance with GAAP and (a) all but the principal
component of payments in respect of conditional sale contracts, Capital
Leases and other
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Otter Tail Corporation First Amendment to Note Purchase Agreement
title retention agreements, (b) commissions, discounts and other fees
and charges with respect to letters of credit and bankers' acceptance
financings and (c) net costs under any interest rate swap, collar or
other interest rate hedging agreements, in each case determined in
accordance with GAAP.
"Lender" means any "Bank" under the Bank Credit Agreement.
Section 1.18. The following defined terms shall be and are hereby added
in alphabetical order to Schedule B of the Note Purchase Agreement:
"DMI Industries" means DMI Industries, Inc., a North Dakota
corporation and a subsidiary of the Company.
"First Amendment Effective Date" means December ___, 2002.
"Investment" means the acquisition, purchase, making or
holding of any stock or other security, any loan, advance, contribution
to capital, extension of credit (except for trade and customer accounts
receivable for inventory sold or services rendered in the ordinary
course of business and payable in accordance with customary trade
terms), any acquisitions of real or personal property (other than real
and personal property acquired in the ordinary course of business) and
any purchase or commitment or option to purchase stock or other debt or
equity securities of or any interest in another Person or any integral
part of any business or the assets comprising such business or part
thereof.
"Material Subsidiary" means (a) the Subsidiaries listed on
SCHEDULE 1 hereto, and (b) any Subsidiary acquired after the First
Amendment Effective Date if the acquisition of such Subsidiary has
required consent of the Required Holders under Section 10.10(j) to be
deemed permitted under this Agreement.
"Related Party" means any Person (other than a Subsidiary):
(a) which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, the
Company; (b) which beneficially owns or holds 5% or more of the equity
interest of the Company; or (c) 5% or more of the equity interest of
which is beneficially owned or held by the Company or a Subsidiary. As
used in this definition, "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.
"Restricted Payment" means any expenditure by the Company or
any Subsidiary for purchase, redemption or other acquisition for value
of any shares of the Company's or any Subsidiary's stock, payment of
any dividend thereon (other than stock dividends and dividends payable
solely to the Company), any distribution on, or payment on account of
the purchase, redemption, defeasance or other acquisition or retirement
for value of, any shares of the Company's or any Subsidiary's stock, or
the setting aside of any funds for any
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such purpose (other than payment to, or on account of or for the
benefit of, the Company only).
"Varistar Corporation" shall mean Varistar Corporation, a
Minnesota corporation and a subsidiary of the Company.
Section 1.19. Schedule 1 and Schedule 10.10 attached hereto shall be and
are hereby inserted as Schedule 1 and Schedule 10.10, respectively, to the Note
Purchase Agreement.
Section 1.20. The Noteholders agree that the Company has satisfied the
requirements of Section 10.7 of the Note Purchase Agreement by its execution and
delivery of this First Amendment as it pertains to the Credit Agreement;
provided, however, that the requirements of said Section 10.7 are and shall be
applicable to any future amendment, restatement or replacement of the Credit
Agreement, in accordance with the terms of said Section 10.7.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Section 2.1. To induce the Noteholders to execute and deliver this
First Amendment (which representations shall survive the execution and delivery
of this First Amendment), the Company represents and warrants to the Noteholders
that:
(a) this First Amendment has been duly authorized, executed
and delivered by it and this First Amendment constitutes the legal,
valid and binding obligation, contract and agreement of the Company
enforceable against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or
limiting creditors' rights generally;
(b) the Note Purchase Agreement, as amended by this First
Amendment, constitute the legal, valid and binding obligations,
contracts and agreements of the Company enforceable against it in
accordance with their respective terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles relating to or limiting creditors'
rights generally;
(c) the execution, delivery and performance by the Company of
this First Amendment (i) has been duly authorized by all requisite
corporate action and, if required, shareholder action, (ii) does not
require the consent or approval of any governmental or regulatory body
or agency, and (iii) will not (A) violate (1) any provision of law,
statute, rule or regulation or its certificate of incorporation or
bylaws, (2) any order of any court or any rule, regulation or order of
any other agency or government binding upon it, or (3) any provision of
any material indenture, agreement or other instrument to which it is a
party or by which its properties or assets are or may be bound, or (B)
result in a breach or constitute (alone or with due notice or lapse of
time or both) a default under any indenture, agreement or other
instrument referred to in clause (iii)(A)(3) of this SECTION 2.1(c);
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Otter Tail Corporation First Amendment to Note Purchase Agreement
(d) as of the date hereof and after giving effect to this
First Amendment, no Default or Event of Default has occurred which is
continuing;
(e) all the representations and warranties contained in
Section 5 of the Note Purchase Agreement are true and correct in all
material respects with the same force and effect as if made by the
Company on and as of the date hereof; and
(f) since April 30, 2002, the Company has not acquired any
Subsidiary which is a "Material Subsidiary" under the Bank Credit
Agreement.
SECTION 3. CONDITIONS TO EFFECTIVENESS OF THIS FIRST AMENDMENT.
Section 3.1. This First Amendment shall not become effective until, and
shall become effective when, each and every one of the following conditions
shall have been satisfied:
(a) executed counterparts of this First Amendment, duly
executed by the Company and the holders of at least 100% of the
outstanding principal of the Notes, shall have been delivered to the
Noteholders;
(b) the Noteholders shall have received a copy of the
resolutions of the Board of Directors of the Company authorizing the
execution, delivery and performance by the Company of this First
Amendment, certified by its Secretary or an Assistant Secretary;
(c) the representations and warranties of the Company set
forth in SECTION 2 hereof are true and correct on and with respect to
the date hereof;
(d) the Noteholders shall have received the favorable opinion
of counsel to the Company as to the matters set forth in SECTIONS
2.1(a), 2.1(b) and 2.1(c) hereof, which opinion shall be in form and
substance satisfactory to the Noteholders;
(e) Varistar Corporation shall have affirmed its obligations
under the Guaranty Agreement pursuant to an Affirmation in the form of
EXHIBIT A hereto; and
(f) the Company shall have paid the reasonable fees and
expenses of Chapman and Cutler, counsel to the Noteholders, pursuant to
SECTION 4.1.
Upon receipt of all of the foregoing, this First Amendment shall become
effective.
SECTION 4. PAYMENT OF NOTEHOLDERS' COUNSEL FEES AND EXPENSES.
Section 4.1. The Company agrees to pay upon demand, the reasonable fees
and expenses of Chapman and Cutler, counsel to the Noteholders, in connection
with the negotiation, preparation, approval, execution and delivery of this
First Amendment.
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Otter Tail Corporation First Amendment to Note Purchase Agreement
SECTION 5. ACKNOWLEDGEMENT REGARDING GUARANTY.
The Company hereby acknowledges and agrees that the guaranty by
Varistar Corporation of the obligations of the Company in respect of the
Company's $40,000,000 Insured Senior Notes due October 1, 2017 constitutes
"Priority Debt" under the Note Purchase Agreement.
SECTION 6. MISCELLANEOUS.
Section 6.1. This First Amendment shall be construed in connection with
and as part of the Note Purchase Agreement, and except as modified and expressly
amended by this First Amendment, all terms, conditions and covenants contained
in the Note Purchase Agreement and the Notes are hereby ratified and shall be
and remain in full force and effect.
Section 6.2. Any and all notices, requests, certificates and other
instruments executed and delivered after the execution and delivery of this
First Amendment may refer to the Note Purchase Agreement without making specific
reference to this First Amendment but nevertheless all such references shall
include this First Amendment unless the context otherwise requires.
Section 6.3. The descriptive headings of the various Sections or parts
of this First Amendment are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
Section 6.4. This First Amendment shall be governed by and construed in
accordance with New York law.
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Otter Tail Corporation First Amendment to Note Purchase Agreement
Section 6.5. The execution hereof by you shall constitute a contract
between us for the uses and purposes hereinabove set forth, and this First
Amendment may be executed in any number of counterparts, each executed
counterpart constituting an original, but all together only one agreement.
OTTER TAIL CORPORATION
By /s/ George A. Koeck
Title: Corporate Secretary and General
Counsel
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Otter Tail Corporation First Amendment to Note Purchase Agreement
Accepted and Agreed to:
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
By /s/ Jay D. Squiers
Title: Vice President
HARTFORD LIFE INSURANCE COMPANY
By: Prudential Private Placement
Investors, L.P., as Investment Advisor
By: Prudential Private Placement
Investors, Inc., General Partner
By /s/ Jay D. Squiers
Title: Vice President
MEDICA HEALTH PLAN
By: Prudential Private Placement
Investors, L.P., as Investment Advisor
By: Prudential Private Placement
Investors, Inc., General Partner
By /s/ Jay D. Squiers
Title: Vice President
GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY
By: GE Asset Management, its Investment
Advisor
By: /s/ Stephen De Motto
Title: Vice President - Private
Investments
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Otter Tail Corporation First Amendment to Note Purchase Agreement
GE EDISON LIFE INSURANCE COMPANY
By: GE Asset Management, its Investment
Advisor
By /s/ Stephen De Motto
Title: Vice President - Private
Investments
GE CAPITAL LIFE ASSURANCE COMPANY OF
NEW YORK
By: GE Asset Management, its Investment
Advisor
By /s/ Stephen De Motto
Title: Vice President - Private
Investments
FIRST COLONY LIFE INSURANCE COMPANY
By: GE Asset Management, its Investment
Advisor
By /s/ Stephen De Motto
Title: Vice President - Private
Investments
TREASURER OF THE STATE OF SOUTH CAROLINA
SOUTH CAROLINA RETIREMENT SYSTEM
By /s/ Grady L. Patterson, Jr.
Title: S C State Treasurer
COUNTRY LIFE INSURANCE COMPANY
By /s/ John Jacobs
Title: Senior Investment Officer
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EXHIBIT A
AFFIRMATION OF GUARANTY AGREEMENT
THIS AFFIRMATION OF GUARANTY AGREEMENT (the or this "Affirmation") is
made as of the 1st day of December, 2002, by VARISTAR CORPORATION, a Minnesota
corporation (the "Subsidiary Guarantor") in favor of the Purchasers named in
Schedule I to the hereinafter defined Note Purchase Agreement (together with
their successors, assigns and transferees, the "Noteholders"). Unless otherwise
defined herein, capitalized terms used herein shall have the meanings ascribed
to them in the hereinafter defined Note Purchase Agreement.
WITNESSETH:
WHEREAS, the Subsidiary Guarantor is presently a subsidiary of Otter
Tail Corporation, a Minnesota corporation (the "Company");
WHEREAS, the Company and the Noteholders have entered into the Note
Purchase Agreement dated as of December 1, 2001 (as amended, modified, restated
or otherwise supplemented from time to time, the "Note Purchase Agreement");
pursuant to which the Company has issued and sold to the Noteholders its
$90,000,000 6.63% Senior Notes, due December 1, 2011 (the "Notes");
WHEREAS, in connection with the Note Purchase Agreement, the Subsidiary
Guarantor previously executed and delivered to the Noteholders the Guaranty
Agreement dated as of December 1, 2001 (the "Guaranty Agreement"), pursuant to
which the Subsidiary Guarantor has absolutely and unconditionally guaranteed the
payment of the Notes and the performance by the Company of its obligations under
the Note Purchase Agreement;
WHEREAS, the Company and the Noteholders have entered into a First
Amendment dated as of December 1, 2002 (the "First Amendment") to the Note
Purchase Agreement, pursuant to which certain provisions of the Note Purchase
Agreement have been amended;
WHEREAS, the Company and the Subsidiary Guarantor have derived both
direct and indirect benefits from the issuance and sale of the Notes and will
derive both direct and indirect benefits from the execution and delivery by the
Noteholders of the First Amendment;
WHEREAS, it is a condition precedent to the execution and delivery by
the Noteholders of the First Amendment that the Subsidiary Guarantor execute
this Affirmation to acknowledge the First Amendment and to reaffirm its
obligations under the Guaranty Agreement;
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned agrees as follows:
1. First Amendment. The Subsidiary Guarantor acknowledges
the First Amendment, and agrees that the Notes and the obligations of
the Company under the Note Purchase Agreement, as amended by the First
Amendment, are guaranteed by the Guaranty Agreement. All references in
the Guaranty Agreement to the "Note Purchase Agreement" shall be deemed
to refer to the Note Purchase Agreement, as amended by the First
Amendment.
2. Affirmation. In connection with the execution and
delivery of the First Amendment, the Subsidiary Guarantor ratifies and
affirms all of its payment and performance obligations under the
Guaranty Agreement, in each case as if each reference in such Guaranty
Agreement to the obligations secured thereby is construed to hereafter
mean and refer to such obligations under the Note Purchase Agreement,
as amended by the First Amendment. The Subsidiary Guarantor hereby
consents to the terms and conditions of the Note Purchase Agreement, as
amended by the First Amendment, and acknowledges receipt of a copy of
the First Amendment and acknowledges that the Guaranty Agreement
remains in full force and effect and is hereby ratified and confirmed.
The execution of this Affirmation shall not operate as a waiver of any
right, power or remedy of the Noteholders, nor constitute a waiver of
any provision of the Guaranty Agreement nor constitute a novation of
any of the obligations under the Notes or the Note Purchase Agreement,
as amended by the First Amendment.
3. Successors and Assigns. This Affirmation shall be binding
upon the Subsidiary Guarantor and upon its respective successors and
assigns and shall inure to the benefit of the Noteholders and its
respective successors and assigns. The successors and assigns of such
entities shall include, without limitation, their respective receivers,
trustees, or debtors-in-possession.
4. Further Assurances. The Subsidiary Guarantor hereby
agrees from time to time, as and when requested by any Noteholder, to
execute and deliver or cause to be executed and delivered, all such
documents, instruments and agreements and to take or cause to be taken
such further or other action as such Noteholder may reasonably deem
necessary or desirable in order to carry out the intent and purposes of
this Affirmation, the Notes, the Guaranty Agreement the Note Purchase
Agreement, as amended by the First Amendment.
5. Definitions. All references to the singular shall be
deemed to include the plural and vice versa where the context so
requires.
6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
7. Severability. Wherever possible, each provision of this
Affirmation shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Affirmation
shall be prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such prohibition or invalidity without
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invalidating the remainder of such provision or the remaining
provisions of this Affirmation.
8. Merger. This Affirmation represents the final agreement of
the Subsidiary Guarantor with respect to the matters contained herein
and may not be contradicted by evidence of prior or contemporaneous
agreements, or prior or subsequent oral agreements, among the Company,
the Subsidiary Guarantor or the Noteholders.
9. Execution in Counterparts. This Affirmation may be
executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement.
10. Section Headings. The section headings herein are for
convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions hereof.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, this Affirmation has been duly executed by the
undersigned as of the day and year first set forth above.
VARISTAR CORPORATION, a Minnesota
corporation
By
-------------------------------------
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SCHEDULE 1
MATERIAL SUBSIDIARIES
<Table>
1. Varistar Corporation corp.
2. BTD Manufacturing, Inc. corp.
3. DMI Industries, Inc. corp.
4. DMS Health Technologies _____
5. DMS Imaging, Inc. corp.
6. E.W. Wylie Corporation corp.
7. Northern Pipe Products, Inc. corp.
8. Vinyltech Corporation corp.
</Table>
SCHEDULE 10.10
INVESTMENTS
<Table>
Investment in Affordable Housing (OTC) $ 6,108,075
Investment in Loan Pools (OTP) 1,186,493
Notes Receivable (Glendale Machine) 125,000
Deferred Compensation Plan (Varistar) 3,280,391
Investment in FM Redhawks 2,007,340
Life Insurance (DMS) 1,034,475
Notes Receivable (Wahpeton Land-OTR) 140,972
Investment - Moorhead State Lighting (OTESCO) 1,542,945
Telecommunication Investments (MIS)
CoBank (St. Paul Bank for Coop's) 1,040,098
ONVOY 708,300
Central MN Network Systems 353,500
West Central Transport Group, LLC 108,671
Central Transport Group, LLC 52,000
Northwest Minnesota Special Access, LLC 9,161
Independent Information Systems, Inc. 80,000
Northern Transport Group, LLC 29,500
Northern Fiber, Inc. 2,687
Notes Receivable 170,908
Other Miscellaneous (OTP, BTD, Chassis, MDG) 28,453
-----------
$18,008,969
===========
</Table>