ex_98593.htm


Exhibit 4.1


 


FIFTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT


 


THIS FIFTH AMENDMENT (this “Amendment”), dated as of October 31, 2017, amends and modifies that certain Third Amended and Restated Credit Agreement, dated as of October 29, 2012 (as amended by the First Amendment thereto dated October 29, 2013, the Second Amendment thereto dated November 3, 2014, the Third Amendment thereto dated October 29, 2015 and the Fourth Amendment thereto dated October 31, 2016, the “Credit Agreement”), among Otter Tail Corporation (the “Borrower”), U.S. BANK NATIONAL ASSOCIATION, as Administrative Agent (in such capacity, the “Agent”), and the Lenders, as defined therein. Terms not otherwise expressly defined herein shall have the meanings set forth in the Credit Agreement.


 


FOR VALUE RECEIVED, the Borrower, the Lenders and the Agent agree that the Credit Agreement is amended as follows.


 


ARTICLE I - AMENDMENTS


 


1.1     The definition of “Long Term Debt Rating” appearing in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:


 


“Long Term Debt Rating” means the rating assigned by S&P, Moody’s or Fitch to the long term, unsecured and unsubordinated indebtedness guaranteed by the non-regulated Subsidiaries of the Borrower; provided that, in the event that any such rating agency shall cease to issue such rating on the long term, unsecured and unsubordinated indebtedness guaranteed by the non-regulated Subsidiaries of the Borrower, the “Long Term Debt Rating” of such rating agency shall be the issuer rating assigned by such rating agency to the Borrower.


 


1.2     The definition of “Termination Date” appearing in Section 1.1 of the Credit Agreement is hereby amended to replace the date “October 29, 2021” with the date “October 31, 2022”.


 


1.3    Schedule 1.1(a) (Commitments and Percentages), Schedule 1.1(b) (Material Subsidiaries), Schedule 1.1(c) (Departing Bank Schedule), Schedule 7.6 (Litigation and Contingent Liabilities), Schedule 7.15 (Subsidiaries), Schedule 7.16 (Partnerships/Joint Ventures), Schedule 9.4 (Exceptions to Ownership of Material Subsidiaries), Schedule 9.7 (Investments), Schedule 9.8 (Existing Liens) and Schedule 9.10 (Certain Transactions with Related Parties), are hereby amended in their entirety to be in the forms of Schedule 1.1(a), Schedule 1.1(b), Schedule 1.1(c), Schedule 7.6, Schedule 7.15, Schedule 7.16, Schedule 9.4, Schedule 9.7, Schedule 9.8 and Schedule 9.10 attached hereto and made a part hereof.


 


ARTICLE II - REPRESENTATIONS AND WARRANTIES


 


To induce the Agent and the Lenders to enter into this Amendment and to make and maintain the Loans under the Credit Agreement as amended hereby, the Borrower hereby warrants and represents to the Agent and the Lenders that it is duly authorized to execute and deliver this Amendment, and to perform its obligations under the Credit Agreement as amended hereby, and that this Amendment constitutes the legal, valid and binding agreement of the Borrower, enforceable in accordance with its terms, subject to limitations as to enforceability which might result from bankruptcy, insolvency, moratorium and other similar laws affecting creditors’ rights generally and subject to limitations on the availability of equitable remedies.


 



 




 




 


ARTICLE III - CONDITIONS PRECEDENT


 


This Amendment shall become effective on the date first set forth above, provided, however, that the effectiveness of this Amendment is subject to the satisfaction of each of the following conditions precedent:


 


3.1     Warranties. Before and after giving effect to this Amendment, the representations and warranties in the Credit Agreement shall be true and correct as though made on the date hereof with respect to representations and warranties containing qualifications as to materiality, and true and correct as though made on the date hereof in all material respects with respect to representations and warranties without qualifications as to materiality, except for changes that are permitted by the terms of the Credit Agreement. The execution by the Borrower of this Amendment shall be deemed a representation that the Borrower has complied with the foregoing condition.


 


3.2    Defaults. Before and after giving effect to this Amendment, no Default and no Event of Default shall have occurred and be continuing under the Credit Agreement. The execution by the Borrower of this Amendment shall be deemed a representation that the Borrower has complied with the foregoing condition.


 


3.3     Documents. The Borrower, the Agent and the Lenders shall have executed and delivered this Amendment.


 


3.4     Fees. The Agent shall have received all fees and other amounts due and payable on or prior to the date hereof, including, without limitation, (i) all fees set forth in that certain Fee Letter by and between the Borrower and the Agent dated as of October 31, 2017 and (ii) to the extent invoiced reasonably in advance, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower under the Credit Agreement.


 


ARTICLE IV - GENERAL


 


4.1     Expenses. The Borrower agrees to reimburse the Agent upon demand for all reasonable expenses (including reasonable attorneys' fees and legal expenses) incurred by the Agent in the preparation, negotiation and execution of this Amendment and any other document required to be furnished herewith.


 


4.2     Counterparts. This Amendment may be executed in as many counterparts as may be deemed necessary or convenient, and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same instrument.


 



2




 




 


4.3     Severability. Any provision of this Amendment which 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 portions hereof or affecting the validity or enforceability of such provisions in any other jurisdiction.


 


4.4     Governing Law. This Amendment shall be a contract made under the laws of the State of Minnesota, which laws shall govern all the rights and duties hereunder. 


 


4.5     Successors; Enforceability. This Amendment shall be binding upon the Borrower, the Agent and the Lenders and their respective successors and assigns, and shall inure to the benefit of the Borrower, the Agent and the Lenders and the successors and assigns of the Agent and the Lenders. Except as hereby amended, the Credit Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects.


 


 


[Signature Pages Follow]


 



3




 




 


     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date first written above.


 


	
			 

				
			OTTER TAIL CORPORATION

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Kevin Moug

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			Title:

				
			            Chief Financial Officer

				
			 

			
	 	 	 	 
	 	4334 18th Avenue South	 
	 	Suite 200	 
	 	Fargo, North Dakota 58103	 
	 	
			Attention:     Mr. Kevin G. Moug,


			                      Chief Financial Officer

				 
	 	Telephone: (701) 451-3562	 
	 	Fax: (701) 232-4108	 



        



(Signature Page to Fifth Amendment to Otter Tail Corporation Credit Agreement)




 




 


	 	U.S. BANK NATIONAL ASSOCIATION,	 
	
			 

				
			as Agent and a Bank 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Jacquelyn Ness

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			Title:

				
			  Vice President

				
			 

			
	 	 	 	 
	 	505 Second Avenue North	 
	 	Mail Code EP-ND-0630	 
	 	Fargo, ND 58102	 
	 	Attention: Jacquelyn Ness, Vice President	 
	 	Telephone: (701) 280-3655	 
	 	Fax: (701) 280-3580	 



 



(Signature Page to Fifth Amendment to Otter Tail Corporation Credit Agreement)




 




 


	 	BANK OF AMERICA, N.A., as Co-Syndication	 
	
			 

				
			Agent and as a Bank

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ A. Quinn Richardson

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			Title:

				
			  Senior Vice President

				
			 

			
	 	 	 	 
	 	IL-4135-07-65	 
	 	135 S. LaSalle Street	 
	 	Chicago, IL 60603	 
	 	
			Attention:    A. Quinn Richardson


			                      Senior Vice President

				 
	 	Telephone: (312) 992-2160	 
	 	Fax: (312) 904-6546	 



 



(Signature Page to Fifth Amendment to Otter Tail Corporation Credit Agreement)




 




 


	
			 

				
			JPMORGAN CHASE BANK, N.A., as

				
			 

			
	 	Co-Syndication Agent and as a Bank	 
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Justin Martin

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			Title:

				
			  Authorized Officer

				
			 

			
	 	 	 	 
	 	10 South Dearborn, 9th Floor, IL1-0090	 
	 	Chicago, IL 60603	 
	 	Attention: Justine Martin	 
	 	Telephone: (312) 732-4441	 
	 	Fax: (312) 732-1762	 



 



(Signature Page to Fifth Amendment to Otter Tail Corporation Credit Agreement)




 




 


	
			 

				
			KEYBANK NATIONAL ASSOCIATION, as

				
			 

			
	 	Documentation Agent and as a Bank	 
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Keven D. Smith

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			Title:

				
			  Senior Vice President

				
			 

			
	 	 	 	 
	 	127 Public Square	 
	 	Mail Code: OH-01-27-1125	 
	 	Cleveland, OH 44114	 
	 	Attention: Keven D. Smith	 
	 	Telephone: (206) 343-6966	 
	 	Fax: (216) 689-4981	 



 



(Signature Page to Fifth Amendment to Otter Tail Corporation Credit Agreement)




 




 


	 	BANK OF THE WEST, a California Banking	 
	 	Corporation, as a Bank	 
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ David Wang

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			Title:

				
			  Director

				
			 

			
	 	 	 	 
	 	250 Marquette Ave., Suite 575	 
	 	Minneapolis, MN 55401	 
	 	Attention: David Wang	 
	 	Telephone: (612) 339-1403	 
	 	Fax: (612) 339-6362	 



 



(Signature Page to Fifth Amendment to Otter Tail Corporation Credit Agreement)




 




 


Schedule 1.1(a)


 


Commitments and Percentages


 


	
			 

				 	
			Initial Commitment:

				 	 	
			Percentage:

				 
	Bank:	 	 	 	 	 	 	 	 
	
			U.S. Bank National Association

				 	$	39,000,000	 	 	 	30	%
	
			JPMorgan Chase Bank, N.A.

				 	$	26,000,000	 	 	 	20	%
	 	 	 	 	 	 	 	 	 
	
			Bank of America, N.A.

				 	$	26,000,000	 	 	 	20	%
	
			KeyBank National Association

				 	$	23,833,333	 	 	 	18.333333076923	%
	
			Bank of the West

				 	$	15,166,667	 	 	 	11.666666923077	%
	
			 

				 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	
			Total:

				 	$	130,000,000	 	 	 	100	%



 



 




 




 


Schedule 1.1(b) 


 


Material Subsidiaries

(as of the date of the Fourth Amended and Restated Credit Agreement)


 


	 
	
			BTD Manufacturing, Inc.

			
	
			Northern Pipe Products, Inc.

			
	
			Varistar Corporation

			
	
			Vinyltech Corporation

			



 



 




 




 


Schedule 1.1(c)


 


Departing Bank Schedule


 


 


None.


 



 




 




 


Schedule 7.6


 


Litigation (Section 7.6)

Contingent Liabilities (Section 7.6)


 


Ameren Services Company, etal v. FERC DC Circuit Case No. 07-1141.  The case is an appeal from FERC challenging its treatment of MISO Revenue Sufficiency Guarantee (“RSG”) charges for entities participating in the MISO wholesale energy market since the market’s start on April 1, 2005.  Otter Tail Power was a participant in the market and could be adversely affected by certain outcomes.


 


Contingent Liabilities


Based on a potential reduction by the FERC in the ROE component of the MISO Tariff, OTP has recorded a $1.6 million liability on its balance sheet as of June 30, 2017, representing OTP’s best estimate of a refund obligation that would arise, net of amounts that would be subject to recovery under state jurisdictional TCR riders, if FERC orders a reduction in ROE component of the MISO Tariff.


 


In 2014 the Environmental Protection Agency (EPA) published both proposed standards of performance for carbon dioxide (CO2) emissions from new, reconstructed and modified fossil fuel-fired power plants (New Source Performance Standards), and proposed CO2 emission guidelines for existing fossil fuel-fired power plants (the Clean Power Plan) under section 111 of the Clean Air Act. The EPA published final rules for each of these proposals on October 23, 2015. Both rules were challenged on legal grounds. On February 9, 2016 the U.S. Supreme Court granted a stay of the Clean Power Plan, pending disposition of petitions for review in the D.C. Circuit. The D.C. Circuit heard oral argument on challenges to the Clean Power Plan on September 27, 2016 before the full court, and a decision was expected in the first half of 2017. However, pursuant to Executive Order 13783, Promoting Energy Independence and Economic Growth, the EPA was directed to consider suspending, revising or rescinding the CO2 rules discussed above. Thereafter, the EPA issued notices in the Federal Register of its intent to review these rules pursuant to the Executive Order, and it filed motions to stay the pending litigation. The D.C. Circuit subsequently issued orders holding in abeyance the appeals of both the New Source Performance Standards and the Clean Power Plan, pending EPA review. Therefore, there is uncertainty regarding the future of both rules.


 



 




 




 


Schedule 7.15




Subsidiaries (Section 7.15)


Subsidiaries of Otter Tail Corporation


 


	
			Company 

				
			State of


			Organization

				
			Number and Class of Shares Issued


			and Owned by Otter Tail


			Corporation or its Subsidiaries

				
			Footnote


			Ref.

			
	
			AEV, Inc.

				
			Minnesota

				
			100 Shares Common

				
			(1)

			
	
			ASI, Inc.

				
			Minnesota

				
			100 Shares Common

				
			(3)

			
	
			BTD Manufacturing, Inc.

				
			Minnesota

				
			200 Shares Common

				
			(1)

			
	
			IMD, Inc.

				
			North Dakota

				
			980 Shares Common

				
			(1)

			
	
			Miller Welding & Iron Works, Inc.

				
			Minnesota

				
			1,000 Shares Common

				
			(5)

			
	
			Northern Pipe Products, Inc.

				
			North Dakota

				
			10,000 Shares Common

				
			(1)

			
	
			Otter Tail Assurance Limited

				
			Cayman Islands

				
			50,000 Shares Common

				
			(4)

			
	
			Otter Tail Energy Services Company, Inc.

				
			Minnesota

				
			1,000 Shares Common

				
			(4)

			
	
			Otter Tail Power Company

				
			Minnesota

				
			100 Shares Common

				
			(4)

			
	
			Sheridan Ridge II, LLC

				
			Minnesota

				
			1,000 Membership Units

				
			(2)

			
	
			Shrco, Inc.

				
			Minnesota

				
			100 Shares Common

				
			(1)

			
	
			T.O. Plastics, Inc.

				
			Minnesota

				
			100 Shares Common

				
			(1)

			
	
			Varistar Corporation

				
			Minnesota

				
			100 Shares Common

				
			(4)

			
	
			Vinyltech Corporation

				
			Arizona

				
			100 Shares Common

				
			(1)

			



 


 


	
			(1) Subsidiary of Varistar Corporation


			(2) Subsidiary of Otter Tail Energy Services Company, Inc.


			(3) Subsidiary of Shrco, Inc.

				
			(4) Subsidiary of Otter Tail Corporation


			(5) Subsidiary of BTD Manufacturing, Inc.

			



 



 




 




 


Schedule 7.16


Partnerships and Joint Ventures

as of June 30, 2017


 


 


	
			

			

			Partnership Name


			 

				
			Type of


			Partnership


			Interest


			 

				 	
			

			Ownership


			Percentage


			 

				 	 	
			Book value of


			Investment


			June 30, 2017


			 

				 
	
			Walnut Properties Limited – Summit Group

				
			Limited

				 	 	15.7	 	 	$	0	 
	
			The Homestead Limited Partnership

				
			Limited

				 	 	89.0	 	 	$	0	 
	
			Lincoln Square of Alexandria Limited Partnership

				
			Limited

				 	 	89.0	 	 	$	0	 
	
			Total

				 	 	 	 	 	$	0	 
	 	 	 	 	 	 	 	 	 



 


 


In the ordinary course of business, Otter Tail Power Company has entered into contractual arrangements with other regional utilities providing for ownership interests (both as tenants-in-common and discretely) in transmission and generation assets.


 


 


No Subsidiary Guarantor has any partnership or joint venture interest.


 



 




 




 


Schedule 9.4


 


Exceptions to Ownership of Material Subsidiaries (Section 9.4)


 


 


None.


 



 




 




 


Schedule 9.7


 


Investments (Section 9.7)


 


	 	 	
			As of

			June 30, 2017

				 
	
			Investment in Loan Pools (OTP)

				 	 	47,109	 
	
			Investments – Bank of Butterfield (OTAL)

				 	 	7,969,166	 
	
			CoBank (St Paul Bank for Coop’s) (VSC)

				 	 	73,012	 
	
			Relocation Loans to Employees (OTP)

				 	 	50,000	 
	
			Trusts Associated with Large Transmission Projects (OTP)

				 	 	6,990,646	 
	
			Other Miscellaneous (OTP, TOP)

				 	 	66,825	 
	 	 	 	 	 
	
			Total Investments of Otter Tail Corporation and Subsidiaries

				 	$	15,196,758	 



 



 




 




 


Schedule 9.8


 


Existing Liens (Section 9.8)


 


None.


 



 




 




 


Schedule 9.10


 


Certain Transactions with Related Parties (Section 9.10)


 


None.