Document:

exv10w1

Exhibit 10.1

EXECUTION COPY

STANDSTILL AGREEMENT

     AGREEMENT, dated July 1, 2009, by and between Otter Tail Corporation, a Minnesota corporation
(the “Company”), and Cascade Investment, L.L.C. (“Cascade”).

     WHEREAS, Cascade entered into a Standstill Agreement, dated May 1, 2009, (the “Previous
Standstill’) with Otter Tail Corporation, a Minnesota corporation (“Old Otter Tail”) that, by its
terms, terminates automatically upon the execution and delivery of this Agreement by Cascade and
the Company, a newly formed holding company of Old Otter Tail, in connection with the consummation
of the Holding Company Reorganization (as defined in the Previous Standstill);

     WHEREAS, the Holding Company Reorganization has been consummated prior to the execution and
delivery of this Agreement and, as a result, the Previous Standstill has terminated by its terms;

     WHEREAS, after giving effect to the Holding Company Reorganization, Cascade is the beneficial
owner of 3,406,499 shares, or approximately 9.6%, of the outstanding common shares, $5 par value
per share, of the Company (the “Common Shares”);

     WHEREAS, the parties hereto wish to provide for a constructive, orderly and mutually
beneficial relationship between themselves;

     WHEREAS, Cascade proposes to acquire additional Common Shares in one or more transactions from
time to time, in open market purchases, block transactions, privately negotiated transactions or
otherwise, pursuant to which Cascade may become an “Interested Shareholder” as defined in the
Minnesota Business Corporation Act (the “MBCA”, and such future transactions that collectively
result in Cascade becoming an Interested Shareholder, the Share Purchases”);

     WHEREAS, Cascade would be subject to certain restrictions under Section 673 of the MBCA if it
should proceed with the Share Purchases in the absence of approval thereof by a committee of
“Disinterested Directors” (as defined in Section 673 of the MBCA) formed by the Company’s Board of
Directors and Cascade has requested that the Company’s Board of Directors consider approving the
Share Purchases in accordance with Section 673 of the MBCA and, in connection with obtaining such
approval, Cascade has agreed to enter this Agreement; and

     WHEREAS, a committee of Disinterested Directors (such committee, the “Special Committee”) has
approved the Share Purchases in accordance with Section 673 of the MBCA, subject to the execution
and delivery of this Agreement;

     NOW, THEREFORE, the parties hereto agree as follows:

     1. Certain Definitions.

 

 

     (a) “Acquisition Transaction” shall mean the acquisition or purchase of all or substantially
all of the assets or securities of, or any merger, consolidation or other form of business
combination with, the Company.

     (b) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules
and regulations of the Securities and Exchange Commission (the “Commission”) thereunder (the
“Exchange Act Rules”) as in effect on the date hereof (the term “registrant” in Rule 12b-2 meaning
in this case the Company or Cascade, as the case may be); except that, for the purposes of this
Agreement, the Company and its subsidiaries shall not be deemed to be Associates or Affiliates of
Cascade and Cascade shall not be deemed to be an Associate or Affiliate of the Company and its
subsidiaries.

     (c) “beneficial ownership” shall be determined pursuant to Rule 13d-3 of the Exchange Act
Rules (or any successor rule or statutory provision) or, if Rule 13d-3 shall be rescinded and there
shall be no successor rule or statutory provision thereto, pursuant to Rule 13d-3 as in effect on
the date hereof.

     (d) “Independent Investment Banker” shall mean a nationally recognized investment banking firm
selected by the affirmative vote of the Board of Directors of the Company (or an appropriate
committee thereof).

     (e) “Permitted Acquisition Transaction” shall mean any Acquisition Transaction by any Person
available to all holders of Voting Securities (A) that is a tender offer (with a mandatory clean-up
or back-end merger at the same price) or (B) that requires a stockholder vote and, in the case of
each of clauses (A) and (B) above, satisfies the following conditions:

     (1) it is recommended by the Board of Directors of the Company; and

     (2) the Board of Directors of the Company shall have received a written opinion of an
Independent Investment Banker that the consideration which the holders of Voting Securities
shall be entitled to receive in such Acquisition Transaction is fair to such stockholders
from a financial point of view.

     (f) “Person” shall mean any individual, firm, corporation or other entity and shall include
any group comprised of any Person and any other Person with whom such Person or an Affiliate or
Associate of such Person has any agreement, arrangement or understanding, directly or indirectly,
for the purpose of acquiring, holding, voting or disposing of any shares of Voting Securities.

     (g) “Standstill Period” shall mean a period of time beginning on the date of the acquisition
of Voting Securities by Cascade such that Cascade’s aggregate beneficial ownership, directly or
indirectly, of Voting Securities is 10% or greater and ending on the date of termination of this
Agreement.

     (h) “Voting Securities” shall mean the issued and outstanding Common Shares and any other
issued and outstanding securities of the Company entitled generally to vote for the election

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of
directors of the Company without regard to any specific subsequent event or occurrence. Any
percentage of Voting Securities hereunder shall mean as a percentage of voting power.

     2. Restrictions on Purchases.

     (a) Without the approval of the Board of Directors of the Company, during the Standstill
Period Cascade shall not and shall not permit any of its subsidiaries (which shall include all
entities that Cascade controls, whether in corporate or non-corporate form) to, directly or
indirectly:

     (1) acquire, propose or agree to acquire, by purchase or otherwise, Voting Securities
if such acquisition would result in Cascade having beneficial ownership of 20% or more of
the outstanding Voting Securities (such percentage of Voting Securities, the “Percentage
Limitation”) except (i) by way of stock dividends or other distributions by the Company made
available to holders of Voting Securities generally or (ii) pursuant to a Permitted
Acquisition Transaction;

     (2) form or join any “group” within the meaning of Section 13(d)(3) of the Exchange Act
with respect to Voting Securities other than a group, if any, consisting solely of Cascade,
any of its subsidiaries and William H. Gates III;

     (3) deposit any Voting Securities in a voting trust or subject any Voting Securities to
any voting agreement or similar arrangement with respect to the voting of such Voting
Securities; or

     (4) directly or indirectly become a “participant” in any “solicitation” of “proxies”
(as such terms are defined in Regulation 14A under the Exchange Act) to vote, or to seek to
influence any person or entity with respect to the voting of, any Voting Securities, except
in accordance with matters recommended by the Board of Directors of the Company.

     (b) Anything to the contrary contained in Section 2(a) notwithstanding:

     (1) for the avoidance of doubt, nothing in Section 2(a) shall apply to any portfolio
company of Cascade with respect to which Cascade or any of its subsidiaries is not the party
exercising control over the decision to purchase Voting Securities, provided that
such portfolio company is not acting at the request or direction of or in coordination with
Cascade or any of its subsidiaries;

     (2) Cascade will not be deemed in violation of Section 2(a) if the beneficial ownership
of Cascade exceeds the Percentage Limitation solely as a result of an acquisition of Voting
Securities by the Company or its subsidiaries (including as a result of a redemption or
repurchase by the Company of any Voting Securities) that, by reducing the number of Voting
Securities outstanding, increases the proportionate number of Voting Securities beneficially
owned by Cascade (and its subsidiaries), provided that Cascade does not acquire
additional Voting Securities in violation of Section 2(a) after it has been notified by the
Company of such acquisition of Voting Securities by the Company (or its subsidiaries); and

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     (3) nothing contained in Section 2(a) shall prevent Cascade (or any of its
subsidiaries) from voting any Voting Securities then beneficially owned by Cascade (or any
of its subsidiaries) in any manner.

     (c) For purposes of determining compliance with this Section 2, Cascade shall be entitled to
rely without independent investigation upon the most recent publicly available Form 10-K, Form 10-Q
or Form 8-K (or any successor form) of the Company filed with the Commission reporting the number
of Voting Securities then issued and outstanding.

     3. Representations.

     (a) The Company represents and warrants to Cascade that:

     (1) The Company has the requisite corporate power to enter into, deliver and perform
its obligations under this Agreement. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been duly
authorized by all requisite corporate action on its part. This Agreement has been duly and
validly executed and delivered by the Company and constitutes a valid and binding obligation
of the Company enforceable against the Company in accordance with its terms;

     (2) The execution and delivery of this Agreement and the Share Purchases by Cascade in
accordance with this Agreement will not violate, result in the breach or modification of,
conflict with, constitute a default or result in an acceleration of any obligation under,
result in the imposition of any encumbrance pursuant to, or affect the validity or
effectiveness of, (A) the Articles of Incorporation of the Company, as amended, or Bylaws of
the Company, as amended, of, (B) Section 673 of the MBCA or Minnesota Statute Section
216B.48 or (C) any contract, permit, order or other law applicable to the Company, except
(as to clause (C) only) for any violation, breach, modification, conflict, default,
acceleration, encumbrance or effect which would not have a material adverse effect on the
Company and its subsidiaries taken as a whole. Except for required filings, notifications,
consents, authorizations, approvals, waivers or exemptions to or from a governmental or
regulatory body or authority (“Agency Authorizations”), if any, under (i) state or federal
securities laws, (ii) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iii) the
Federal Energy Regulatory Commission and (iv) the Minnesota Public Utilities Commission, the
North Dakota Public Service Commission and the South Dakota Public Utilities Commission, if
any, which Agency Authorizations referred to in this clause (iv) to the extent required by
the execution and delivery of this Agreement have been made, obtained or requested on or
prior to the date hereof, no Agency Authorization is required to be made, obtained or
requested by the Company in connection with the execution and delivery by the Company of
this Agreement or the Share Purchases; and

     (3) The Board of Directors of the Company and the Special Committee have taken all
actions necessary to approve the Share Purchases in accordance with Section 673 of the MBCA
so as to exempt Cascade from the imposition of the restrictions contained in Section 673 of
the MBCA applicable to a “business combination” (as

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defined in Section 011 of the MBCA) between the Company and Cascade and, to the knowledge of the Company, no other “fair price”,
“moratorium”, “control share acquisition” or other similar anti-takeover law is applicable
to the Share Purchases by Cascade.

     (b) Cascade represents and warrants to the Company that:

     (1) Cascade has the power to enter into, deliver and perform its obligations under this
Agreement. This Agreement has been duly and validly executed and delivered by Cascade and
constitutes a valid and binding obligation of Cascade enforceable against Cascade in
accordance with its terms; and

     (2) The execution and delivery of this Agreement and the Share Purchases by Cascade in
accordance with this Agreement will not violate, result in the breach or modification of,
conflict with, constitute a default or result in an acceleration of any obligation under,
result in the imposition of any encumbrance pursuant to, or affect the validity or
effectiveness of, any organizational documents of, or any contract, permit, law or order
applicable to, Cascade, except for any violation, breach, modification, conflict, default,
acceleration, encumbrance or effect which would not have a material adverse effect on
Cascade. Except for Agency Authorizations, if any, under (i) state or federal securities
laws, (ii) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iii) the Federal
Energy Regulatory Commission and (iv) the Minnesota Public Utilities Commission, the North
Dakota Public Service Commission and the South Dakota Public Utilities Commission, if any,
no Agency Authorizations is required to be made, obtained or requested by Cascade in
connection with the execution and delivery by Cascade of this Agreement or the Share
Purchases.

     4. Termination of the Previous Standstill. The parties confirm that the Previous
Standstill has been terminated pursuant to and in accordance with its terms and is of no further
force or effect.

     5. Specific Enforcement; Consent to Jurisdiction. The Company, on the one hand, and
Cascade, on the other hand, acknowledge and agree that each would be irreparably harmed and would
have no adequate remedy at law if any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. Accordingly, it is agreed that,
in addition to any other remedies which may be available, the parties shall be entitled to obtain
temporary and permanent injunctive relief with respect to any breach or threatened breach of, or
otherwise obtain specific performance of, the covenants and other agreements contained in this
Agreement. Each party hereto consents to personal jurisdiction in Minnesota in any action relating
to this Agreement and to the appointment of the Secretary of State of Minnesota as agent for
receipt of service of process. 

     6. Miscellaneous.

     (a) Expenses. Each party shall bear the expenses of its attorneys, investment
advisors or other costs it has incurred.

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     (b) Entire Agreement; Amendments. This Agreement embodies the entire agreement
between the parties hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect thereof. This Agreement may be
changed only by an agreement in writing signed by the party against whom any waiver, change,
amendment, modification or discharge may be sought and in the case of the Company only upon the
approval of a majority of the Board of Directors (or an appropriate committee thereof).

     (c) Termination. This Agreement will remain in full force and effect until the
earliest to occur of the following (as a result of which this Agreement shall immediately terminate
and cease to be in full force and effect): (i) termination by the mutual written agreement of the
Company and Cascade; (ii) the expiration of a period of one year from the date of delivery by
Cascade to the Company of written notice of Cascade’s election to terminate this Agreement, which
notice may be delivered by Cascade to the Company at any time after May 1, 2012; (iii) upon written
notice by Cascade to the Company, any time after a third party (A) commences (for the purposes of
Rule 14d-2 under the Exchange Act Rules) a tender offer or exchange offer for at least 50% of the
outstanding Voting Securities; (B) publicly announces the commencement of a proxy contest with
respect to the election of any directors of the Company; or (C) enters into a definitive agreement
with the Company contemplating the acquisition (by way of merger, tender offer, consolidation,
business combination or otherwise) of at least 50% of the outstanding Voting Securities or all or
any material portion of the assets of the Company; or (iv) upon written notice by Cascade to the
Company, any time after Cascade had acquired beneficial ownership of 10% or more of the outstanding
Voting Securities but thereafter has disposed of Voting Securities such that its beneficial
ownership at such time is less than 10% of the outstanding Voting Securities.

     (d) Headings. The section headings are for convenience only and shall not affect the
construction of any provision of this Agreement. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement, unless otherwise indicated.

     (e) Counterparts. This Agreement may be executed by the parties hereto in
counterparts, and each such executed counterpart shall be an original instrument and all of such
counterparts together shall be deemed to be one and the same instrument.

     (f) Notices. All notices, requests, service of process and other communications
hereunder shall be validly given, made or served, upon delivery, if in writing and delivered
personally, by telex (except for service of process) or sent by registered mail, postage prepaid,
to the parties at the following addresses (or at such other address as shall be specified by like
notice):

if to the Company:

 Otter Tail Corporation

4334 18th Avenue S., Suite 200

Fargo, North Dakota 58103

Attention: General Counsel

Facsimile: (701) 232-4108

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with a copy to:

Dorsey & Whitney

50 South Sixth Street

Minneapolis, Minnesota 55402

Attention: Gary L. Tygesson

Facsimile: (612) 340-7800

if to Cascade:

Cascade Investment, L.L.C.

2365 Carillon Point

Kirkland, Washington 98033

Attention: General Counsel

Facsimile: (425) 803-0459

with a copy to:

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

Attention: Robert P. Davis

Facsimile: (212) 225-3999

     (g) Governing Law. This Agreement shall be governed by the laws of the State of
Minnesota without giving effect to the principles of conflicts of law thereof.

     (h) Successors. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

     (i) Waiver. No failure or delay on the part of any party in the exercise of any
power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further exercise of any
other power, right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

     (j) Separability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions or affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction, and the parties agree to negotiate in good faith an
amendment to this Agreement to cure any such invalidity or unenforceability in a manner designed to
most closely effect the purpose of such term or provision.

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     (k) Further Assurances. At the request of either party hereto, the other party hereto
shall execute and deliver to such party such documents and instruments as may be reasonably
necessary to implement or evidence the foregoing.

     (l) Business Days. Any action which is required to be taken hereunder shall be taken
on a business day and where the date required for any action hereunder does not fall on a business
day, such action shall be taken on the next calendar day which is a business day.

[Signature Page to Follow]

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     IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.

	 	 	 	 	 
	 	OTTER TAIL CORPORATION

 	 
	 	By:  	/s/ George A. Koeck
 	 
	 	Name:  George A. Koeck 	 
	 	Title:  Corporate Secretary & General Counsel 	 
	 

	 	 	 	 	 
	 	CASCADE INVESTMENT, L.L.C.

 	 
	 	By:  	/s/ Michael Larson
 	 
	 	Name:  Michael Larson 	 
	 	Title:  Business Managerexv10w1

Exhibit 10.1

EXECUTION COPY

AMENDMENT NO. 2 TO MASTER AGREEMENT

     THIS AMENDMENT NO. 2 to the Master Agreement (“Amendment”) is made on June 23, 2009.

AMONG:

OOO Geostream Assets Management;

L Group;

Key Energy Services, Inc.; and

Key Energy Services Cyprus Ltd.;

collectively hereinafter referred to as the “Parties”.

RECITALS

     WHEREAS, the Parties entered a certain Master Agreement dated August 26, 2008, as amended on
March 11, 2009 (“Master Agreement”); and

     WHEREAS, the Parties wish to amend the Master Agreement as hereinafter provided.

     NOW, THEREFORE, the Parties agree as follows:

1. INTERPRETATION

All capitalized terms used in this Amendment have the same meaning given to them in the Master
Agreement, unless otherwise stated in this Amendment.

2. AMENDMENT TO MASTER AGREEMENT

2.1. The Parties hereby agree to amend the Master Agreement as follows.

2.2. Clause 2.4 of the Master Agreement (as amended) is hereby deleted in its entirety and
replaced with the following new Clause 2.4.:

“2.4. Prior to September 1, 2009, but after completion of the commitments and obligations provided
for in the attached Initial Closing Exhibit, whichever occurs last, the Second Closing will occur.
The second investment consideration will be paid by KESC, subject to KESC and OOO Geostream Assets
Management’s prior mutual agreement as set forth below,

(1) in a combination of the following:

	 	(a)	 	Cash; and

RUSSIAN VERSION OF AGREEMENT

 

 

EXECUTION COPY

	 	(b)	 	A promissory note, issued by KESC in favor of OOO Geostream Services Group
affiliate company, payable thirty (30) days after demand (“Promissory Note”), but not
later than October 31, 2009, and subject to provisions to be set forth in the Promissory
Note providing, among other things, that in the event that KESC fails to timely pay the
balance due under the Promissory Note pursuant to the terms thereof, KESC shall be
obligated within thirty (30) days to relinquish, transfer and assign to OOO Geostream
Assets Management the number of Shares equal to:

(i) the total number of Shares issued to KESC in the Second Closing; multiplied by

(ii) the quotient obtained by dividing (A) the outstanding balance due and payable
under the Promissory Note which KESC has failed to timely pay; by (B) the total
amount of the second investment consideration.

	 	 	 	Any such relinquishment, transfer and assignment to OOO Geostream Assets Management of
Shares as described above shall be deemed payment in full satisfaction of the balance then
due and payable under the Promissory Note and KESC shall thereafter be released of all
covenants, liabilities and obligations under the Promissory Note.

(2) No later than thirty (30) days prior to the date of the Second Closing, the Parties shall
mutually agree to (i) the amounts to be allocated between items (a) and (b) above, (ii) the OOO
Geostream Services Group affiliate company payee of the Promissory Note, and (iii) any other terms
applicable to the Promissory Note.

Or

(3) All in cash if the legal jurisdiction agreed to by the Parties does not allow the use of a
promissory note as a valid consideration for the Shares.

(4) OOO Geostream Assets Management and L Group each hereby agree to appoint Boris Germanovich
Levin as their true and lawful attorney-in-fact to execute for and on their behalf, and do and
perform any and all acts necessary or desirable to complete and execute the Promissory Note and
the Second Closing.”

3. LANGUAGE

This Amendment is executed in English and Russian languages counterparts. In the event of a
conflict between both versions, the English version shall control.

4. GOVERNING LAW

This Amendment shall be governed by and construed in all respects in accordance with laws of
England regardless of the law that might be applied under applicable principles of conflict of
laws.

RUSSIAN VERSION OF AGREEMENT

 

 

EXECUTION COPY

5. MASTER AGREEMENT TO REMAIN IN FULL FORCE AND EFFECT

The terms and conditions of the Master Agreement (including, its Exhibits, Schedules and
attachments) remain in full force and effect and all remain unchanged except as modified by this
Amendment.

6. COUNTERPARTS

6.1. This Amendment may be executed in any number of counterparts, each of which shall be
considered an original.

6.2. The Parties agree that faxed and/or e-mailed scanned copies of this Amendment shall be deemed
original having full legal force and effect and are binding upon the Parties.

7. ADDRESSES AND CONTACT DETAILS OF THE PARTIES

	 	 	 
	OOO Geostream Assets Management
	 	Key Energy Services Cyprus, Ltd.
	8/3 General Karbyshev Blvd.,
	 	Iris House, 3rd Floor
	Moscow, Russian Federation, 123154
	 	8 John Kennedy Street
	www.geostream.ru
	 	3106 Limasol
	Attention: General Director
	 	Cyprus
	 
	 	Attention: Director
	 
	 	With copy to:
	 
	 	Key Energy Services, Inc.
	 
	 	1301 McKinney Street,
	 
	 	Suite 1800,
	 
	 	Houston, Texas, 77010, U.S.A.
	 
	 	Attention: Newton W. “Trey” Wilson III
	 
	 	 
	L-Group
	 	Key Energy Services, Inc.
	OOO Geostream Assets Management
	 	1301 McKinney Street,
	8/3 General Karbyshev Blvd.,
	 	Suite 1800,
	Moscow, Russian Federation, 123154
	 	Houston, Texas, 77010, U.S.A.
	Attention: Boris Germanovich Levin
	 	www.keyenergy.com
	 
	 	Attention: Executive Vice President and
	 
	 	Chief Operating Officer

RUSSIAN VERSION OF AGREEMENT

 

 

EXECUTION COPY

SIGNATURES:

	 	 	 
	OOO Geostream Assets Management
	 	Key Energy Services Cyprus, Ltd.
	 
	 	 
	By: /s/ BORIS GERMANOVICH LEVIN

Boris Germanovich Levin
	 	By: /s/ NEWTON W. WILSON III

Newton W. "Trey" Wilson III

	General Director 
	 	Attorney-in-fact

	 
	 	 
	L-Group
	 	Key Energy Services, Inc.
	 
	 	 
	/s/ BORIS GERMANOVICH LEVIN
	 	By: /s/ NEWTON W. WILSON III

	Boris Germanovich Levin
	 	
Newton W. “Trey” Wilson III, 
Executive Vice President and Chief Operating Officer

	 
	 	 
	/s/ YURII LEONIDOVICH BODNARCHUK
	 	 
	Yurii Leonidovich Bodnarchuk
	 	 
	 
	 	 
	/s/ ALEKSEI RUFATOVICH MUSTAFINOV
	 	 
	Aleksei Rufatovich Mustafinov
	 	 
	 
	 	 
	/s/ MIKHAIL VLADIMIROVICH SIYATSKII
	 	 
	Mikhail Vladimirovich Siyatskii
	 	 
	 
	 	 
	/s/ JOHN THOMAS WILSON
	 	 
	John Thomas Wilson
	 	 
	 
	 	 
	Vemor Trading and Investments Limited
Represented by: Taratula I.P.
	 	 
	 
	 	 
	/s/ TARATULA I.P.
	 	 

RUSSIAN VERSION OF AGREEMENT

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