Document:

exv4w2

 

Exhibit 4.2

 

Otter Tail Corporation

 

Third Amendment

Dated as of December 1, 2007

to

Note Purchase Agreement

Dated as of December 1, 2001

 

Re: $90,000,000 6.63% Senior Notes

due December 1, 2011

 

 

 

Third Amendment to Note Purchase Agreement

     This Third Amendment dated as of December 1, 2007 (the or this “Third 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
Third Amendment (collectively, the “Noteholders”).

R e c i t a l s:

     A. The Company and each of the Purchasers signatory thereto have heretofore entered into the
Note Purchase Agreement dated as of December 1, 2001, as amended by a First Amendment thereto dated
as of December 1, 2002 and by a Second Amendment thereto dated as of October 1, 2004 (as heretofore
so amended, the “2001 Note Purchase Agreement”). The Company has heretofore issued the $90,000,000
6.63% Senior Notes due December 1, 2011 (the “2007 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 2001 Notes.

     B. The Company has entered into that certain Note Purchase Agreement dated as of February 23,
2007 (the “Cascade Note Purchase Agreement”) between the Company and Cascade Investment L.L.C., a
Washington limited liability company (“Cascade”), pursuant to which the Company will issue its
$50,000,000 principal amount 5.778% Senior Note due November 30, 2017 (the “Cascade Note”).

     C. The Company has requested that the 2001 Note Purchase Agreement be amended to, among other
things, (1) permit the guaranty of the Cascade Note by certain Material Subsidiaries (as defined in
the 2001 Note Purchase Agreement), so long as such Material Subsidiaries guarantee the 2001 Notes,
(2) provide that if any Subsidiaries guarantee the obligations of the Company under the Cascade
Note, such Subsidiaries would also guarantee the obligations of the Company under the 2001 Notes,
(3) exclude from the definition of “Restricted Payment” any dividends or similar payments payable
solely to Varistar Corporation, so long as Varistar Corporation is a Wholly-owned Subsidiary of the
Company, (4) provide the Noteholders with the benefit of any more restrictive covenants or more
favorable terms that may be granted to Cascade, and (5) provide that no Subsidiary Guarantor or
Additional Subsidiary Guarantor would be released by the Noteholders unless released by the Lenders
and by Cascade.

     D. The Company and the Noteholders now desire to amend the 2001 Note Purchase Agreement to
address the items described in Recital C above 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
2001 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 Third Amendment set forth in §3.1 hereof, and in consideration of good and

 

 

	 	 	 
	Otter Tail Corporation

	 	Third Amendment to Note Purchase Agreement

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 9.8 of the 2001 Note Purchase Agreement shall be and is hereby
amended in its entirety to read as follows:

     “Section 9.8. Guaranty by Subsidiaries. The Company will cause any Subsidiary which
after the Closing guarantees the obligations of the Company under the Bank Credit Agreement
or under the Cascade Note Purchase Agreement (an “Additional Subsidiary Guarantor”) to
enter into the Guaranty Agreement, and deliver within 15 Business Days thereafter to each
of the holders of the Notes the following items:

     (a) (i) an agreement substantially in the form of Exhibit A to the Guaranty
Agreement, if such agreement is required due to a guarantee of the obligations of
the Company under the Bank Credit Agreement, or (ii) an agreement substantially in
the form of Exhibit A to the Third Amendment to the Note Purchase Agreement dated as
of December 1, 2007, if such agreement is required due to a guarantee of the
obligations of the Company under the Cascade Note;

     (b) a certificate signed by the President, a Vice President or another
authorized Responsible Officer of the Company making representations and warranties
to the effect of those contained in Sections 5.4, 5.6 and 5.7 of this Agreement,
with respect to such Additional Subsidiary Guarantor and the Guaranty Agreement, as
applicable;

     (c) such documents and evidence with respect to such Additional Subsidiary
Guarantor as any holder of the Notes may reasonably request in order to establish
the existence and good standing of such Additional Subsidiary Guarantor; and

     (d) an opinion of counsel addressed to each of the holders of the Notes
satisfactory to the Required Holders, to the effect that the Guaranty Agreement has
been duly authorized, executed and delivered and constitutes the legal, valid and
binding contract and agreement of such Additional Subsidiary Guarantor enforceable
in accordance with its terms, except as an enforcement of such terms may be limited
by bankruptcy, insolvency, fraudulent conveyance and similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles.”

     Section 1.2. Section 9.12 of the 2001 Note Purchase Agreement shall be and is hereby
amended in its entirety to read as follows:

-2-

 

	 	 	 
	Otter Tail Corporation

	 	Third Amendment to Note Purchase Agreement

     Section 9.12. Release of Guaranty Agreement. Subject to the provisos below, upon
receipt by the Noteholders of written notice from the Company and the Lenders that the
guaranty obligations of any of the Subsidiary Guarantors and any Additional Subsidiary
Guarantors under the Bank Credit Agreement have been released by the Lenders, the
obligations of such Subsidiary Guarantors and such Additional Subsidiary Guarantors under
the Guaranty Agreement shall be released and if such obligations of all Subsidiary
Guarantors and all Additional Subsidiary Guarantors have been released the Guaranty
Agreement and the Intercreditor Agreement shall terminate and the Noteholders agree that
they shall take such action as shall be necessary to effectuate such termination; provided,
that if at any time thereafter the Bank Credit Agreement shall again be guaranteed by any
Subsidiary (i) the Company will, within 30 days, cause such Subsidiary to comply with the
requirements of Sections 9.8(a) through (d) and (ii) the Intercreditor Agreement shall be
re-executed by the Noteholders and the Lenders; and provided further, however, if, at the
time of any release of a Subsidiary Guarantor or an Additional Subsidiary Guarantor as
contemplated above, any such Subsidiary Guarantors or Additional Subsidiary Guarantors are
then guarantying the obligations of the Company under the Cascade Note (“Cascade
Guaranties”), then such Subsidiary Guarantors or Additional Subsidiary Guarantors will not
be so released unless and until released from their obligations under the Cascade
Guaranties.

     Section 1.3. Section 10.7 of the 2001 Note Purchase Agreement shall be and is hereby
amended in its entirety to read as follows:

     “Section 10.7 Benefit of More Restrictive Covenants or More Favorable Terms. If any
Lender under the Bank Credit Agreement, or if Cascade under the Cascade Note Purchase
Agreement, is or becomes entitled to the benefit of any (i) covenant, (ii) agreement, (iii)
event of default, or (iv) other event which would permit the Lender or Cascade, as the case
may be, to have the Company Debt obligations it holds purchased by the Company (a “put
event”), which is more restrictive on the Company or its Subsidiaries than the covenants,
agreements, events of default or put events contained herein or which is more favorable to
such Lender or to Cascade, as the case may be, than the covenants, agreements, events of
default or put events contained herein, then such more restrictive or more favorable
covenant, agreement, event of default or put event shall be deemed to be incorporated into
this Agreement by reference during any period such Lender or Cascade is so entitled thereto
without regard to any waivers by the Lender or Cascade, as the case may be, with respect
thereto and shall remain so incorporated for a period of 30 days after the Lender or
Cascade, as the case may be, is no longer entitled to the benefit thereof and the
Noteholders shall be entitled to the benefits thereof with respect to this Agreement in
addition to the existing covenants, agreements, events of default and put events contained
herein so long as any of the Notes remain outstanding.”

     Prior to any closing of a the effectuation of any amendment or modification to the
Bank Credit Agreement or the Cascade Note Purchase Agreement, the Company shall deliver a
letter to the Noteholders containing a list of those covenants, agreements, events of
default and put events which are deemed to be incorporated into this Agreement

-3-

 

	 	 	 
	Otter Tail Corporation

	 	Third Amendment to Note Purchase Agreement

pursuant to the foregoing provisions of this Section 10.7 and concurrently with or prior to
the execution of any amendment to the Bank Credit Agreement, the Company shall deliver to
the Noteholders a letter setting forth all covenants, agreements, events of default and put
events and/or changes thereto which are deemed to be incorporated into this Agreement
pursuant to the foregoing provisions of this Section 10.7 and any such letters delivered to
the Noteholders shall be satisfactory in form and substance to the Noteholders. At any time
after the receipt of any such letter the Required Holders shall have the right by delivery
of written notice to the Company to amend this Agreement by adding to this Agreement any
covenants, agreements, events of default or put events referred to in any such letter which
the Required Holders elect to add pursuant to the foregoing provision of this Section
10.7.”

     Section 1.4. Section 10.11 of the 2001 Note Purchase Agreement shall be and is hereby
amended in its entirety to read as follows:

     “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, (vii)
guarantees by Material Subsidiaries of the obligations of the Company under the Bank Credit
Agreement, so long as each and every Subsidiary that guarantees the obligations of the
Company under the Bank Credit Agreement is a Subsidiary Guarantor or an Additional
Subsidiary Guarantor or becomes an Additional Subsidiary Guarantor in accordance with the
terms of Section 9.8 hereof and the Intercreditor Agreement is in full force and effect, and
(viii) guarantees by Material Subsidiaries of obligations of the Company under the Cascade
Note so long as each and every Subsidiary that guarantees the obligations of the Company
under the Cascade Note is a Subsidiary Guarantor or an Additional Subsidiary Guarantor or
becomes an Additional Subsidiary Guarantor in accordance with the terms of Section 9.8
hereof.”

-4-

 

	 	 	 
	Otter Tail Corporation

	 	Third Amendment to Note Purchase Agreement

     Section 1.5. The definition of “Restricted Payment” in the 2001 Note Purchase Agreement
shall be and is hereby amended in its entirety to read as follows:

     “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 or, so long as Varistar Corporation is a
Wholly-owned Subsidiary of the Company, to Varistar Corporation), 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 such purpose (other than payment to, or on account of or
for the benefit of, the Company only or, so long as Varistar Corporation is a Wholly-owned
Subsidiary of the Company, Varistar Corporation only).

     Section 1.6. The following defined terms shall be and are hereby added in alphabetical order
to Schedule B of the 2001 Note Purchase Agreement:

     “Cascade” means Cascade Investment L.L.C., a Washington limited liability company, and
any successor holder of all or part of the Cascade Note.

     “Cascade Note” means the “Note” or any similar or replacement instrument as defined in
the Cascade Note Purchase Agreement.

     “Cascade Note Purchase Agreement” means that certain Note Purchase Agreement dated as
of February 23, 2007 between the Company and Cascade, as amended from time to time, and any
replacement, additional or successor agreement or agreements thereto.

Section 2. Representations and Warranties of the Company.

     Section 2.1. To induce the Noteholders to execute and deliver this Third Amendment (which
representations shall survive the execution and delivery of this Third Amendment), the Company
represents and warrants to the Noteholders that:

     (a) this Third Amendment has been duly authorized, executed and delivered by it and
this Third Amendment constitutes the legal, valid and binding 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 Third Amendment, constitutes 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;

-5-

 

			
	Otter Tail Corporation
	 	Third Amendment to Note Purchase Agreement

     (c) the execution, delivery and performance by the Company of this Third 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 § 2.1(c);

     (d) as of the date hereof and after giving effect to this Third Amendment, no Default or Event
of Default has occurred which is continuing; and

     (e) all the representations and warranties contained in Section 5 of the Note Purchase
Agreement are (other than the information on the Schedules thereto which information is no longer
current and other than the representations and warranties set forth in Section 5.3, Section 5.4,
Section 5.5 and the first sentence of Section 5.15) 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.

     (f) Schedule I hereto is a complete and correct list of the Company’s Subsidiaries, showing, as
to each Subsidiary, the correct name thereof, the jurisdiction of its organization, the percentage
of shares of each class of its capital stock or similar equity interests outstanding owned by the
Company and each other Subsidiary and whether such Subsidiary has guaranteed the obligations of the
Company under the Bank Credit Agreement and/or the Cascade Note;

     (g) All of the outstanding shares of capital stock or similar equity interests of each
Subsidiary shown in Schedule I as being owned by the Company and its Subsidiaries have been validly
issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free
and clear of any Lien (except as otherwise disclosed in Schedule I);

     (h) Each Subsidiary identified in Schedule I is a corporation or other legal entity duly organized,
validly existing and in good standing under the laws of its jurisdiction of organization, and is
duly qualified as a foreign corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, other than those jurisdictions as to
which the failure to be so qualified or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect and each such Subsidiary has
the corporate or other power and authority to own or hold under lease the properties it purports to
own or hold under lease and to transact the business it transacts and each Subsidiary Guarantor has
the Corporate or other power and authority to execute and deliver the Guaranty Agreement and
perform its obligations thereunder;

-6-

 

			
	Otter Tail Corporation
	 	Third Amendment to Note Purchase Agreement

     (i) Guaranty Supplements in the form attached hereto as Exhibit A (the “Guaranty Supplements”) been
duly authorized by all necessary action on the part of, and executed and delivered by, E.W. Wylie
Corporation, a North Dakota corporation and Subsidiary of the Company (“E.W. Wylie”), and T.O.
Plastics, Inc., a Minnesota corporation and Subsidiary of the Company (“T.O. Plastics”) and each of
the Guaranty Supplements constitutes a legal, valid and binding obligation of each of E.W. Wylie
and T.O. Plastics, respectively, enforceable against such party in accordance with its terms,
except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, fraudulent
conveyance or other similar laws affecting the enforcement of creditors’ rights generally and (b)
general principles of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law); and

     (j) No Subsidiary is a party to, or otherwise subject to, any legal restriction or any agreement
(other than this Agreement, the Bank Credit Agreement and the Cascade Note Purchase Agreement and
customary limitations imposed by corporate law statutes) restricting the ability of such Subsidiary
to pay dividends out of profits or make any other similar distributions of profits to the Company
or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.

Section 3. Conditions to Effectiveness of This Third Amendment.

     Section 3.1. This Third Amendment shall not become effective until, and shall become effective
when, each and every one of the following conditions shall have been satisfied:

     (a) E.W. Wylie and T.O. Plastics shall have each entered into a Guaranty Supplement.

     (b) executed counterparts of this Third Amendment, duly executed by the Company and the
holders of 100% of the outstanding principal of the 2001 Notes, shall have been delivered to the
Noteholders;

     (c) the representations and warranties of the Company set forth in § 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 §§ 2.1(a), 2.1(b), 2.1(c) and 2.1(i) hereof, which opinion shall be in
form and substance satisfactory to the Noteholders;

     (e) the Company shall have paid to the holders of the 2001 Notes, on a pro rata basis, an
agreed-upon fee that shall be non-refundable; and

     (f) the Company shall have paid the reasonable fees and expenses of Chapman and Cutler LLP,
counsel to the Noteholders, pursuant to 

§ 4.1.

Upon receipt of all of the foregoing, this Third Amendment shall become effective.

-7-

 

			
	Otter Tail Corporation
	 	Third Amendment to Note Purchase Agreement

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 LLP, special counsel to the Noteholders, in connection with the negotiation, preparation,
approval, execution and delivery of this Third Amendment.

Section 5. Noteholder Representations and Warranties.

     Section 5.1. Each Noteholder separately represents that it holds the principal amount of 2001
Notes set forth opposite its signature block below.

Section 6. Miscellaneous.

     Section 6.1. This Third Amendment shall be construed in connection with and as part of the Note
Purchase Agreement, and except as modified and expressly amended by this Third Amendment, all
terms, conditions and covenants contained in the 2001 Note Purchase Agreement and the 2001 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 Third Amendment may refer to the 2001 Note
Purchase Agreement without making specific reference to this Third Amendment but nevertheless all
such references shall include this Third Amendment unless the context otherwise requires.

     Section 6.3. The descriptive headings of the various Sections or parts of this Third Amendment are
for convenience only and shall not affect the meaning or construction of any of the provisions
hereof.

     Section 6.4. This Third Amendment shall be governed by and construed in accordance with New York
law.

     Section 6.5. The execution hereof by you shall constitute a contract between us for the uses and
purposes hereinabove set forth, and this Third Amendment may be executed in any number of
counterparts, each executed counterpart constituting an original, but all together only one
agreement.

-8-

 

			
	Otter Tail Corporation
	 	Third Amendment to Note Purchase Agreement

	 	 	 	 	 	 	 
	 	 	Otter Tail Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ George A. Koeck	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: George A. Koeck	 	 
	 

	 	 	 	Title: General Counsel and Corporate
 Secretary	 	 

-9-

 

			
	Otter Tail Corporation
	 	Third Amendment to Note Purchase Agreement

	 	 	 	 	 	 	 
	Principal Amount of
2001 Notes Held:	 	Accepted and Agreed to:	 	 
	 
	 	 	 	 	 	 
	$36,000,000	 	The Prudential Insurance Company of America	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brian N. Thomas	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Brian N. Thomas	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	$7,500,000	 	Prudential Retirement Insurance and Annuity Company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Prudential Investment Management, Inc., as investment manager	 	 
	 
	 

	 	By:
	 	/s/ Brian N. Thomas	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 
	$5,000,000	 	Hartford Life Insurance Company	 	 
	 
	 

	 	By:
	 	Prudential Private Placement Investors, L.P., as Investment Advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Prudential Private Placement Investors, Inc., General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brian N. Thomas	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Brian N. Thomas	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	$1,500,000	 	Medica Health Plan	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Prudential Private Placement Investors, L.P., as Investment Advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Prudential Private Placement Investors, Inc., General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brian N. Thomas	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Brian N. Thomas	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 

 

 

			
	Otter Tail Corporation
	 	Third Amendment to Note Purchase Agreement

	 	 	 	 	 	 	 
	Principal Amount
of 2001 Notes Held:	 	Accepted and Agreed to:	 	 
	 
	 	 	 	 	 	 
	$13,000,000	 	GENWORTH LIFE INSURANCE COMPANY

(f/k/a General Electric Capital Assurance Company)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John R. Endres	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: John R. Endres	 	 
	 

	 	 	 	Title: Investment Officer	 	 
	 
	 	 	 	 	 	 
	$7,000,000	 	GENWORTH LIFE INSURANCE COMPANY OF NEW YORK

(f/k/a GE Capital Life Assurance Company of New York)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John R. Endres	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: John R. Endres	 	 
	 

	 	 	 	Title: Investment Officer	 	 
	 
	 	 	 	 	 	 
	$5,000,000	 	GENWORTH LIFE AND ANNUITY INSURANCE COMPANY

(as successor by merger to First Colony Life Insurance Company)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John R. Endres	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: John R. Endres	 	 
	 

	 	 	 	Title: Investment Officer	 	 

 

 

	 	 	 
	Otter Tail Corporation

	 	Third Amendment to Note Purchase Agreement
	 
	 	 
	Principal Amount of 2001 Notes Held:

	 	Accepted and Agreed to:
	 
	 	 
	$10,000,000

	 	AIG Edison Life Insurance Company
	 
	 

	 	By: AIG Global Investment Corp,
	 

	 	          investment sub-adviser

	 	 	 	 	 
	 	 	 
	 	By:  	     /s/ Victoria Y. Chin
 	 
	 	 	Name:  	Victoria Y. Chin 	 
	 	 	Title:  	Vice President 	 
	 

 

 

	 	 	 
	Otter Tail Corporation

	 	Third Amendment to Note Purchase Agreement
	 
	 	 
	Principal Amount of 2001 Notes Held:

	 	Accepted and Agreed to:
	 
	 	 
	$5,000,000

	 	Country Life Insurance Company

	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ John Jacobs
 	 
	 	 	Name:  	John Jacobs 	 
	 	 	Title:  	Director – Fixed Income 	 
	 

 

 

Exhibit A

Guaranty Supplement

To the Holders of the Notes
 of
Otter Tail Corporation
 (the
“Company”)

Ladies and Gentlemen:

     Whereas, in order to refinance existing indebtedness and for general corporate purposes, the
Company issued its 6.63% Senior Notes due December 1, 2011 in the aggregate principal amount of
$90,000,000 (the “Notes”) pursuant to the Note Purchase Agreement dated as of December 1, 2001 (as
amended by the First Amendment thereto dated December 1, 2002, the Second Amendment thereto dated
October 1, 2004 and the Third Amendment thereto dated as of
December 1, 2007, the “Note Agreement”)
among the Company and each of the purchasers named on Schedule A attached to said Note Agreement.

     Whereas, as a condition precedent to effectuation of the Third Amendment to the Note
Agreement, the Noteholders described therein required that certain Subsidiaries of the Company
become parties to the Guaranty Agreement in the form attached hereto
(the “Guaranty”) as security
for the Notes.

     Pursuant to Section 9.8 of the Note Agreement, the Company has agreed to cause the
undersigned,
                    , a                      organized under the laws of                      (the
“Additional Subsidiary Guarantor”,) to execute the Guaranty. In accordance with the requirements
of the Guaranty, the Additional Subsidiary Guarantor desires to amend the definition of Guarantor
(as the same may have been heretofore amended) set forth in the Guaranty so that at all times from
and after the date hereof, the Additional Subsidiary Guarantor shall be jointly and severally
liable as set forth in the Guaranty for the obligations of the Company under the Note Agreement
and Notes to the extent and in the manner set forth in the Guaranty.

     The
undersigned is the duly elected                      of the Additional Subsidiary
Guarantor, a subsidiary of the Company, and is duly authorized to execute and deliver this
Guaranty Supplement to each of you. The execution by the undersigned of this Guaranty Supplement
shall evidence its consent to and acknowledgment and approval of the terms set forth herein and in
the Guaranty and by such execution the Additional Subsidiary Guarantor shall be deemed to have
made in favor of the Holders the representations and warranties set forth in Section 5 of the
Guaranty.

 

 

     Upon execution of this Guaranty Supplement, the Guaranty shall be deemed to be amended as set
forth above. Except as amended herein, the terms and provisions of the Guaranty are hereby
ratified, confirmed and approved in all respects.

     Any and all notices, requests, certificates and other instruments (including the Notes) may
refer to the Guaranty without making specific reference to this Guaranty Supplement, but
nevertheless all such references shall be deemed to include this Guaranty Supplement unless the
context shall otherwise require.

     Dated:
                                        ,
                             .

	 	 	 	 	 	 	 
	 	 	[Name of Additional Subsidiary Guarantor]
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 

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SCHEDULE I

SUBSIDIARIES OF THE COMPANY

(i) Subsidiaries of Otter Tail Corporation: All Subsidiaries listed in the table
below are owned 100% by Otter Tail Corporation unless otherwise indicated by footnote.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Number and Class of	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Shares Issued and	 	 	 	 	 	Bank Credit	 	Cascade	 	 
	 	 	 	 	Owned by Otter Tail	 	 	 	 	 	Agreement	 	Note	 	2001 Note
	 	 	State of	 	Corporation or its	 	Footnote	 	Guarantor	 	Guarantor	 	Guarantor
	Company	 	Organization	 	Subsidiaries	 	Ref.	 	(Yes/No)	 	(Yes/No)*
	 	(Yes/No)
	 
	AC Equipment, Inc.

	 	Minnesota
	 	100 Shares Common
	 	 	(3	)	 	No
	 	No
	 	No
	AWI Acquisition Company Limited

	 	Prince Edward

Island

Canada
	 	1 Share Common
	 	 	(8	)	 	No
	 	No
	 	No
	Aerial Contractors,
Inc.

	 	North Dakota
	 	10 Shares Common
	 	 	(3	)	 	No
	 	No
	 	No
	AgraWest Investments Limited

	 	Prince Edward

Island

Canada
	 	5,000,000 Shares

Common

1,500,000 Shares Class A
Preferred 

1,500,000 Shares Class B 

Preferred 

1,500 Shares Class C 

Preferred
	 	 	(9	)	 	No
	 	No
	 	No
	Aviva Sports, Inc.

	 	Minnesota
	 	100 Shares Common
	 	 	(6	)	 	No
	 	No
	 	No
	BTD Manufacturing,
Inc.

	 	Minnesota
	 	200 Shares Common
	 	 	(1	)	 	Yes
	 	Yes
	 	Yes
	Chassis Liner Corporation**

	 	Minnesota
	 	100 Shares Common
	 	 	(1	)	 	No
	 	No
	 	No
	DMI Industries, Inc.

	 	North Dakota
	 	980 Shares Common
	 	 	(1	)	 	Yes
	 	Yes
	 	Yes
	DMI Canada, Inc.

	 	Canada
	 	1 Share Common
	 	 	(4	)	 	No
	 	No
	 	No
	DMS Health
Technologies, Inc.

	 	North Dakota
	 	8,500 Shares Class A 

5,100 Shares Class B
	 	 	(1	)	 	Yes
	 	Yes
	 	Yes
	DMS Imaging, Inc.

	 	North Dakota
	 	1,606 Shares Common Voting
	 	 	(2	)	 	Yes
	 	Yes
	 	Yes
	DMS — Imaging
Partners, LLC**

	 	Delaware
	 	 	 	 	(10	)	 	No
	 	No
	 	No
	DMS — Imaging
Partners II, LLC**

	 	Delaware
	 	 	 	 	(10	)	 	No
	 	No
	 	No
	DMS Leasing Corporation**

	 	North Dakota
	 	2,500 Shares Common
	 	 	(2	)	 	No
	 	No
	 	No
	E. W. Wylie
Corporation

	 	North Dakota
	 	100 Shares Common
	 	 	(1	)	 	No
	 	Yes
	 	Yes
	Foley Company

	 	Missouri
	 	50,000 Shares Common
	 	 	(1	)	 	Yes
	 	Yes
	 	Yes
	Galva Foam Marine
Industries, Inc.

	 	Missouri
	 	100,000 Shares Common
	 	 	(6	)	 	No
	 	No
	 	No
	Idaho Pacific
Holdings, Inc.

	 	Delaware
	 	10,002 Shares Class A
Common (voting)
	 	 	(1	)	 	Yes
	 	Yes
	 	Yes
	Idaho-Pacific Corporation

	 	Idaho
	 	400 Shares Common
	 	 	(8	)	 	Yes
	 	Yes
	 	Yes

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Number and Class of	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Shares Issued and	 	 	 	 	 	Bank Credit	 	Cascade	 	 
	 	 	 	 	Owned by Otter Tail	 	 	 	 	 	Agreement	 	Note	 	2001 Note
	 	 	State of	 	Corporation or its	 	Footnote	 	Guarantor	 	Guarantor	 	Guarantor
	Company	 	Organization	 	Subsidiaries	 	Ref.	 	(Yes/No)	 	(Yes/No)*
	 	(Yes/No)
	 
	Idaho-Pacific Colorado Corporation

	 	Delaware
	 	100 Shares Common
	 	 	(8	)	 	No
	 	No
	 	No
	Lynk3 Technologies,
Inc.

	 	Minnesota
	 	100 Shares Common
	 	 	(3	)	 	No
	 	No
	 	No
	Midwest Construction
Services, Inc.

	 	Minnesota
	 	100 Shares Common
	 	 	(1	)	 	Yes
	 	Yes
	 	Yes
	Moorhead Electric,
Inc.

	 	Minnesota
	 	80 Shares Common
	 	 	(3	)	 	No
	 	No
	 	No
	Northern Pipe
Products, Inc.

	 	North Dakota
	 	10,000 Shares Common
	 	 	(1	)	 	Yes
	 	Yes
	 	Yes
	Otter Tail Assurance Limited

	 	Cayman Islands
	 	 50,000 Shares Common
	 	 	(7	)	 	No
	 	No
	 	No
	Otter Tail Energy
Services Company,
Inc.

	 	Minnesota
	 	1,000 Shares Common
	 	 	(7	)	 	No
	 	No
	 	No
	Overland Mechanical
Services, Inc.

	 	Minnesota
	 	100 Shares Common
	 	 	(5	)	 	No
	 	No
	 	No
	Shoreline Industries,
Inc.

	 	 Minnesota
	 	1,000 Shares Common
	 	 	(6	)	 	No
	 	No
	 	No
	ShoreMaster, Inc.

	 	Minnesota
	 	100 Shares Common
	 	 	(1	)	 	Yes
	 	Yes
	 	Yes
	ShoreMaster Costa Rica SRL

	 	Costa Rica
	 	50 Quotas
	 	 	(6	)	 	No
	 	No
	 	No
	St. George Steel
Fabrication, Inc.**

	 	Utah
	 	1,000 Shares Common
	 	 	(0	)	 	No
	 	No
	 	No
	T.O. Plastics, Inc.

	 	Minnesota
	 	100 Shares Common
	 	 	(1	)	 	No
	 	Yes
	 	Yes
	TW Renewables, LLC**

	 	Minnesota
	 	 	 	 	 	 	 	No
	 	No
	 	No
	Varistar Corporation

	 	Minnesota
	 	100 Shares Common
	 	 	(7	)	 	No
	 	Yes
	 	Yes
	Ventus Energy
Systems, Inc.

	 	Minnesota
	 	100 Shares Common
	 	 	(3	)	 	No
	 	No
	 	No
	Vinyltech Corporation

	 	 Arizona
	 	100 Shares Common
	 	 	(1	)	 	Yes
	 	Yes
	 	Yes

 

			
	(1)	 	Subsidiary of Varistar Corporation
	 
	(2)	 	Subsidiary of DMS Health Technologies, Inc.
	 
	(3)	 	Subsidiary of Midwest Construction Services, Inc.
	 
	(4)	 	Subsidiary of DMI Industries, Inc.
	 
	(5)	 	Subsidiary of Otter Tail Energy Services Company, Inc.
	 
	(6)	 	Subsidiary of ShoreMaster, Inc.
	 
	(7)	 	Subsidiary of Otter Tail Corporation
	 
	(8)	 	Subsidiary of Idaho Pacific Holdings, Inc.
	 
	(9)	 	Subsidiary of AW1 Acquisition Company Limited
	 
	(10)	 	Subsidiary of DMS Imaging, Inc.
	 
	**	 	Inactiveexv4w3

 

Exhibit 4.3

Execution Copy

OTTER TAIL CORPORATION

FIRST AMENDMENT

Dated
as of December 14, 2007

to

NOTE PURCHASE AGREEMENT

Dated
as of August 20, 2007

$33,000,000 5.95% Senior Unsecured Notes, Series A, due 2017

$30,000,000 6.15% Senior Unsecured Notes, Series B, due 2022

$42,000,000 6.37% Senior Unsecured Notes, Series C, due 2027

$50,000,000 6.47% Senior Unsecured Notes, Series A, due 2037

 

 

FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT

     This First Amendment dated as of December 14, 2007 (the or this “First Amendment”) to the Note
Purchase Agreement dated as of August 20, 2007 is between 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 that certain Note
Purchase Agreement dated as of August 20, 2007 (the “Note Purchase Agreement”) between the
Company and each of the Noteholders listed on Schedule A thereto. The Company has heretofore
issued
(a) $33,000,000 aggregate principal amount of 5.95% Senior Unsecured Notes, Series A, due 2017
(the
“Series A Notes”); (b) $30,000,000 aggregate principal amount of 6.15% Senior Unsecured Notes,
Series
B, due 2022 (the “Series B Notes”); (c) $42,000,000 aggregate principal amount of 6.37% Senior
Unsecured Notes, Series C, due 2027 (the “Series C Notes”); and (d) $50,000,000 aggregate
principal
amount of 6.47% Senior Unsecured Notes, Series D, due 2037 (the “Series D Notes” and together
with
the Series A Notes, the Series B Notes and the Series C Notes, collectively, the “Notes”)
pursuant to the
Note Purchase Agreement.

     B. The Company and the Noteholders now desire to amend the Note Purchase Agreement in
the respects, but only in the respects, hereinafter set forth.

     C. Capitalized terms used herein shall have the respective meanings ascribed thereto in the
Note Purchase Agreement unless herein defined or the context shall otherwise require.

     D. All requirements of law have been fully complied with and all other acts and things
necessary to make this First Amendment a valid, legal and binding instrument according to its
terms for
the purposes herein expressed have been done or performed.

     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.

     1.1. Section 12.2 of the Note Purchase Agreement shall be and is hereby amended in its
entirety
to read as follows:

Interest and Dividend Coverage Ratio. The Company will not permit the Interest and Dividend
Coverage Ratio to be less than 1.5 to 1.0 determined as of the end of the most recently
ended period of four consecutive fiscal quarters of the Company.

     1.2. Section 12.9 of the Note Purchase Agreement shall be and is hereby amended in its
entirety,
effective as of August 20, 2007, to read as follows:

“Subsidiary Guarantees. The Company will not permit any 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 (x) guaranties by one or more Subsidiaries of the
Company or Varistar of obligations of the Company or Varistar in respect of Indebtedness
identified in Schedule 7.15 hereto, (y) guaranties by one or more Subsidiaries of the
Company or Varistar of obligations of the Company in respect of Indebtedness of the Company
pursuant to that certain Note Purchase Agreement, dated as of February 23, 2007, between the
Company and Cascade Investment L.L.C., and (z) guaranties by any Subsidiaries of Varistar in
respect of indebtedness incurred by Varistar under a credit facility with U.S. Bank National
Association entered into after the date hereof, if any (a “Varistar Credit Facility”), and
in connection therewith agrees to a covenant restricting itself or its Subsidiaries from
guaranteeing indebtedness of any other Person (a “Subsidiary Guarantee Covenant”).
Notwithstanding the foregoing, in the event Varistar enters into a Varistar Credit Facility,
then (i) in the event such Varistar Credit Facility is terminated or expires by its terms,
the provisions of this Section 12.9 shall be deemed deleted and shall no longer be in effect
and (ii) in the event that the Subsidiary Guarantee Covenant does not apply to any
particular Subsidiary or Subsidiaries, the provisions of this Section 12.9 shall be deemed
deleted and shall no longer be in effect with respect to such particular Subsidiary or
Subsidiaries.

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

     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, 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;

     (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 indenture, mortgage, deed of trust, loan, purchase or credit agreement or other
Material
agreement or 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);

 

 

     (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; and

     (e) all the representations and warranties contained in Section 7 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.

SECTION 3. CONDITIONS TO EFFECTIVENESS OF THIS FIRST AMENDMENT.

     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 Required Holders, shall have been delivered to the Noteholders; and

     (b) 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.

     Upon receipt of all of the foregoing, this First Amendment shall become effective.

SECTION 4. PAYMENT OF NOTEHOLDERS’ COUNSEL FEES AND EXPENSES.

     4.1. The Company agrees to pay upon demand, the reasonable fees and expenses of Winston &
Strawn LLP, counsel to the Noteholders, in connection with the negotiation, preparation,
approval,
execution and delivery of this First Amendment.

SECTION 5. MISCELLANEOUS.

     5.1.
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.

     5.2. 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.

     5.3. 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.

     5.4.
This First Amendment shall be governed by and construed in accordance with the laws of
the State of New York.

[Remainder
of Page Intentionally Left Blank]

 

 

     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/ Kevin G. Moug
 	 
	 	 	Name:  	Kevin G. Moug 	 
	 	 	Title:  	CFO & Treasurer 	 
	 

	 	 	 	 	 
	ACCEPTED AND AGREED TO:	 	 
	 
	 	 	 	 
	DEUTSCHE BANK AG NEW YORK BRANCH	 	 
	 
	 	 	 	 
	By
	 	/s/ Frank Conley	 	 
	Name:

	 	Frank Conley

	 	 
	Title:
	 	Director	 	 
	 
	 	 	 	 
	By
	 	/s/ David Downie	 	 
	Name:

	 	David Downie

	 	 
	Title:
	 	Director	 	 
	 
	 	 	 	 
	TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
	 
	 	 	 	 
	By
	 	/s/ Elizabeth Schulz	 	 
	Name:

	 	Elizabeth Schulz

	 	 
	Title:
	 	Director	 	 
	 
	 	 	 	 
	PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY
	 
	 	 	 	 
	By:

	 	Provident Investment Management, LLC	 	 
	Its:

	 	Agent	 	 
	 
	 	 	 	 
	By
	 	/s/ W. Benson Vance	 	 
	Name:

	 	W. Benson Vance

	 	 
	Title:
	 	Vice President	 	 

4

 

THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA

	 	 	 	 	 
	By

	 	/s/ Barry Scheinholtz
 

	 	 
	Name:

	 	Barry Scheinholtz	 	 
	Title:

	 	Private Placements Manager	 	 

THRIVENT FINANCIAL FOR LUTHERANS

	 	 	 	 	 
	By

	 	/s/ Alan D. Onstad
 

	 	 
	Name:

	 	Alan D. Onstad	 	 
	Title:

	 	Associate Portfolio Manager	 	 

FORT DEARBORN LIFE INSURANCE COMPANY 

THE CATHOLIC AID ASSOCIATION 

GREAT WESTERN INSURANCE
COMPANY 

AMERICAN REPUBLIC INSURANCE COMPANY 

CINCINNATI INSURANCE COMPANY 

COLORADO BANKERS LIFE INSURANCE COMPANY

By: Advantus Capital Management, Inc.

	 	 	 	 	 
	By

	 	/s/ James W. Tobin
 

	 	 
	Name:

	 	James W. Tobin	 	 
	Title:

	 	Vice President	 	 

NAVY MUTUAL AID ASSOCIATION

	 	 	 	 	 
	By

	 	/s/ Allen M. McCray
 

	 	 
	Name:

	 	Allen M. McCray	 	 
	Title:

	 	Vice President, Investments	 	 

NATIONAL GUARDIAN LIFE INSURANCE COMPANY

	 	 	 	 	 
	By

	 	/s/ R.A. Mucci
 

	 	 
	Name:

	 	R.A. Mucci	 	 
	Title:

	 	Senior Vice President & Treasurer	 	 

5

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