Document:

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                                                                   EXHIBIT 4-D-4

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                             OTTER TAIL CORPORATION

                                   ----------

                                 FIRST AMENDMENT
                          Dated as of December 1, 2002

                                       to

                             NOTE PURCHASE AGREEMENT
                          Dated as of December 1, 2001

                                   ----------

                       Re: $90,000,000 6.63% Senior Notes
                              due December 1, 2011

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                   FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT

         THIS FIRST AMENDMENT dated as of December 1, 2002 (the or this "First
Amendment") to the Note Purchase Agreement dated as of December 1, 2001 is
between and among OTTER TAIL CORPORATION, a Minnesota corporation (the
"Company"), and each of the institutions which is a signatory to this First
Amendment (collectively, the "Noteholders").

                                    RECITALS:

          A. The Company and each of the Noteholders have heretofore entered
into the Note Purchase Agreement dated as of December 1, 2001 (the "Note
Purchase Agreement"). The Company has heretofore issued the $90,000,000 6.63%
Senior Notes due December 1, 2011 (the "Notes") dated December 27, 2001 pursuant
to the Note Purchase Agreement. The Noteholders are the holders of 100% of the
outstanding principal amount of the Notes.

          B. The Company has also entered into that certain Credit Agreement
dated as of April 30, 2002 as amended by a First Amendment to Credit Agreement
dated as of September 19, 2002 (as amended, the "Credit Agreement") with the
Banks defined therein and U.S. Bank National Association, as a Bank and as
Agent.

          C. Section 10.7 of the Note Purchase Agreement provides, inter alia,
that the Noteholders are entitled to the benefit of any covenant, agreement,
event of default or put event set forth in the Credit Agreement which is more
restrictive on the Company (or more favorable to the Banks) than the covenants,
agreements, events of default or put events contained in the Note Purchase
Agreement.

          D. Pursuant to Section 10.7 of the Note Purchase Agreement and to
incorporate those provisions of the Credit Agreement the benefit of which the
Noteholders are entitled to, the Company and the Noteholders now desire to amend
the Note Purchase Agreement in the respects, but only in the respects,
hereinafter set forth.

          E. Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Note Purchase Agreement (as amended hereby) unless
herein defined or the context shall otherwise require.

         NOW, THEREFORE, upon the full and complete satisfaction of the
conditions precedent to the effectiveness of this First Amendment set forth in
SECTION 3.1 hereof, and in consideration of good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the Company and the
Noteholders do hereby agree as follows:

SECTION 1. AMENDMENTS.

         Section 1.1. Section 7.1(a) of the Note Purchase Agreement shall be and
is hereby amended by adding the following words after the phrase "this Section
7.1(a)": "provided, further, that in the event that the Company delivers such
financial statements or copies of such Quarterly

<PAGE>
Otter Tail Corporation                First Amendment to Note Purchase Agreement

Report on Form 10-Q to any Lender prior to the end of the time period specified
above, then and in such event, the Company shall deliver the same such items to
each such holder of the Notes concurrently therewith;"

         Section 1.2. Section 7.1(d) of the Note Purchase Agreement shall be and
is hereby amended in its entirety to read as follows:

                  "(d) Notice of Default or Event of Default -- immediately upon
         a Responsible Officer becoming aware of the existence of any Default or
         Event of Default, a written notice specifying the nature and period of
         existence thereof and what action the Company is taking or proposes to
         take with respect thereto;"

         Section 1.3. Section 8.3(a) of the Note Purchase Agreement shall be and
is hereby amended in its entirety to read as follows:

                  "Section 8.3. Investment Grade Put Event. (a) In the event
         that an Investment Grade Put Event shall occur, the Company will give
         written notice (a "Company Notice") of such fact not more than 10 days
         after the Investment Grade Put Event Date to all holders of the Notes.
         The Company Notice shall (i) describe the facts and circumstances of
         the Investment Grade Put Event in reasonable detail, (ii) describe the
         Debt of the Company then outstanding, (iii) specify the rating, if any,
         accorded to Senior Debt by a Designated Rating Agency which is below an
         Acceptable Rating or state that Senior Debt is no longer rated by
         either one or both of the Designated Rating Agencies, (iv) refer to
         this Section 8.3 and the right of the holders of the Notes to require
         the Company to purchase their Notes on the terms and conditions
         provided for herein upon the occurrence of an Investment Grade Put
         Event, and (v) contain an offer by the Company to purchase all of the
         outstanding Notes in full together with unpaid accrued interest to the
         date of purchase and the Make-Whole Amount. Each holder of the Notes
         shall have the right to accept such offer and require purchase of the
         Notes held by such holder in full by written notice to the Company
         given within 60 days following receipt of the Company Notice. On the
         date designated in such holder's notice (which shall be not less than
         10 days nor more than 20 days after the date such notice is delivered
         to the Company), the Company shall purchase all Notes held by such
         holder at 100% of the principal amount of such Notes, together with
         unpaid accrued interest thereon to the date of purchase, and the
         Make-Whole Amount, if any. Failure to respond by a holder of the Notes
         shall constitute an acceptance of such offer and the date of purchase
         shall be the 10th Business Day following the end of the 60 day period
         referred to in the preceding sentence."

         Section 1.4. The defined terms "Investment Grade Put Event" and "Senior
Debt" set forth in Section 8.3 of the Note Purchase Agreement shall be and are
hereby amended in their entirety to read as follows:

                  "Investment Grade Put Event" shall mean, and occur on, the
         first date on which (i) either of the Designated Rating Agencies rate
         Senior Debt below an Acceptable Rating or (ii) Senior Debt is no longer
         rated by either one or both of the Designated Rating

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Otter Tail Corporation                First Amendment to Note Purchase Agreement

         Agencies. If an Investment Grade Put Event Date shall have occurred and
         subsequent to such Investment Grade Put Event Date both Designated
         Rating Agencies shall rate Senior Debt an Acceptable Rating and
         thereafter an Investment Grade Put Event shall occur, then a new
         Investment Grade Put Event Date shall occur under this Agreement and
         the Company's obligations under this Section 8.3 shall remain binding
         and operative.

                  "Senior Debt" shall mean the long term, unsecured and
         unsubordinated indebtedness of the Company.

         Section 1.5. The introductory language to Section 9 of the Note
Purchase Agreement shall be and is hereby amended in its entirety to read as
follows:

                  "The Company covenants that so long as any of the Notes are
         outstanding, unless, with respect to Sections 9.1 through 9.5 and
         Sections 9.7 through 9.12, the Required Holders shall otherwise
         expressly agree in writing, or, with respect to Section 9.6, the holder
         of each Note shall otherwise expressly agree in writing:"

         Section 1.6. Section 9.7 of the Note Purchase Agreement shall be and is
hereby deleted in its entirety.

         Section 1.7. The introductory language to Section 10 of the Note
Purchase Agreement shall be and is hereby amended in its entirety to read as
follows:

                  "The Company covenants that so long as any of the Notes are
         outstanding, unless the Required Holders shall otherwise expressly
         agree in writing:"

         Section 1.8. Section 10.3(j) of the Note Purchase Agreement shall be
and is hereby amended in its entirety to read as follows:

                  "(j) Liens created, assumed or incurred after the date of the
         Closing given to secure Debt of the Company or any Subsidiary in
         addition to the Liens permitted by the preceding clauses (a) through
         (i) hereof; provided that all Debt secured by Liens permitted under
         this Section 10.3(j) does not exceed $2,000,000 in the aggregate at any
         time outstanding;"

         Section 1.9. Section 10.4 of the Note Purchase Agreement shall be and
is hereby amended in by restating the introductory language and clause (a)
thereof to read as follows:

                  "Section 10.4. Merger, Consolidation, Etc. The Company will
         not, and will not permit any Material Subsidiary to, consolidate with
         or merge with any other corporation or convey, transfer or lease
         substantially all of its assets in a single transaction or series of
         transactions to any Person; provided that:

                            (a) Any Material Subsidiary which is a Wholly-Owned
                  Subsidiary may directly or indirectly merge or consolidate
                  with or into, or transfer all or

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Otter Tail Corporation                First Amendment to Note Purchase Agreement

                  substantially all of its property to, or be a party to an
                  analogous reorganization with the Company or any other
                  Wholly-Owned Subsidiary so long as (i) in any such transaction
                  involving the Company, the Company shall be the surviving or
                  continuing Person and (ii) in any such transaction involving
                  such other Wholly-Owned Subsidiary which is the surviving or
                  continuing Person, such Wholly-Owned Subsidiary, if the
                  non-surviving Material Subsidiary was obligated under the
                  Guaranty Agreement and the Guaranty Agreement shall not have
                  been released pursuant to Section 9.12, shall provide to the
                  holders of the Notes the items described in Section 9.8 (a)
                  through (d) concurrently with the consummation of such
                  transaction; provided further, that a Material Subsidiary may
                  transfer all or substantially all of its property without
                  complying with the foregoing provisions of this clause (a) if
                  the transfer is in compliance with Section 10.5; and"

        Section 1.10. Section 10.6 of the Note Purchase Agreement shall be and
is hereby amended in its entirety to read as follows:

                  "Section 10.6. Transactions with Related Parties. The Company
         will not and will not permit any Material Subsidiary to enter into
         directly or indirectly any transaction or group of related transactions
         (including without limitation the purchase, lease, sale or exchange of
         properties or the rendering of any service) with any Related Party
         (other than the Company or another Material Subsidiary), except in the
         ordinary course of and pursuant to the reasonable requirements of the
         Company's or such Material Subsidiary's business and upon fair and
         reasonable terms no less favorable to the Company or such Material
         Subsidiary than would be obtainable in a comparable arm's-length
         transaction with a Person not a Related Party."

         Section 1.11. The following shall be added as new Sections 10.8 through
10.12 of the Note Purchase Agreement:

                  "Section 10.8. Other Agreements. The Company will not and will
         not permit any Material Subsidiary to enter into any agreement, bond,
         note or other instrument with or for the benefit of any Person other
         than the holders of the Notes which would: (a) be violated or breached
         by the Company's performance of its obligations under the Notes or this
         Agreement, or (b) prohibit any Subsidiary of the Company from paying
         dividends or distributions on, or redeeming, acquiring or retiring for
         value, any shares of stock or other ownership interest that the Company
         holds in such Subsidiary.

                  Section 10.9. Restricted Payments. The Company will not and
         will not permit any Material Subsidiary to either: (a) make any
         Restricted Payment if any Default or Event of Default shall exist or
         shall result from the making of such Restricted Payment; or (b)
         directly or indirectly make any payment on, or redeem, repurchase,
         defease, or make any sinking fund payment on account of, or any other
         provision for, or otherwise pay, acquire or retire for value, any
         Indebtedness of the Company or any Subsidiary that is subordinated in
         right of payment to the Notes (whether pursuant to its terms or by

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Otter Tail Corporation                First Amendment to Note Purchase Agreement

         operation of law), except for regularly-scheduled payments of interest
         and principal (which shall not include payments contingently required
         upon occurrence of a change of control or other event) that are not
         otherwise prohibited hereunder or under the document or agreement
         stating the terms of such subordination.

                  Section 10.10. Investments. The Company will not and will not
         permit any Material Subsidiary to acquire for value, make, have or hold
         any Investments, except:

                            (a) Investments outstanding on April 30, 2002 and
                  listed on Schedule 10.10 attached hereto, and any increases or
                  decreases in the value thereof or write-ups, write-downs or
                  write-offs with respect to such Investments;

                            (b) travel advances to officers and employees in the
                  ordinary course of business;

                            (c) Investments in readily marketable direct
                  obligations of the United States of America having maturities
                  of one year or less from the date of acquisition;

                            (d) Certificates of deposit or bankers' acceptances,
                  each maturing within one year from the date of acquisition,
                  issued by any commercial bank organized under the laws of the
                  United States or any State thereof which has (i) combined
                  capital, surplus and undivided profits of at least
                  $100,000,000, and (ii) a credit rating with respect to its
                  unsecured indebtedness from a nationally recognized rating
                  service that is satisfactory to the Required Holders;

                            (e) Commercial paper maturing within 270 days from
                  the date of issuance and given the highest rating by a
                  nationally recognized rating service;

                            (f) Repurchase agreements relating to securities
                  issued or guaranteed as to principal and interest by the
                  United States of America;

                            (g) Extensions of credit in the nature of accounts
                  receivable or notes receivable arising from the sale of goods
                  and services in the ordinary course of business;

                            (h) Share of stock, obligations or other securities
                  received in settlement of claims arising in the ordinary
                  course of business;

                            (i) Investments outstanding on April 30, 2002 in
                  Subsidiaries by the Company and other Subsidiaries, and
                  Investments by the Company or other Subsidiaries in Persons
                  that will be Subsidiaries upon completion of such Investments;

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Otter Tail Corporation                First Amendment to Note Purchase Agreement

                            (j) Investments not otherwise permitted hereunder
                  which shall not exceed (based on total consideration paid by
                  the Company or a Material Subsidiary): (i) $10,000,000 for any
                  single Investment or series of related Investments in any
                  Person not engaged in one or more of the Company's and
                  Subsidiaries' present lines of business, or (ii) $20,000,000
                  for any single Investment or series of related Investments in
                  any Person that is engaged in one or more of the Company's and
                  Subsidiaries' present lines of business, provided that consent
                  of the Required Holders to such Investments in excess of such
                  limit shall not be unreasonably withheld; and

                            (k) Any Material Subsidiary may make Investments
                  constituting loans to the Company and provided that no Default
                  or Event of Default shall have occurred and continued, the
                  Company and any Material Subsidiary may make Investments
                  constituting loans to (i) any Material Subsidiaries, or (ii)
                  any Subsidiaries that are not Material Subsidiaries, provided,
                  that such loans to any one Subsidiary shall not exceed
                  $15,000,000 in aggregate principal amounts outstanding at any
                  time.

                  Section 10.11. Contingent Liabilities. The Company will not
         and will not permit any Material Subsidiary to either: (a) endorse,
         guarantee, contingently agree to purchase or to provide funds for the
         payment of, or otherwise become contingently liable upon, any
         obligation of any other Person, except by the endorsement of negotiable
         instruments for deposit or collection (or similar transactions) in the
         ordinary course of business, or (b) agree to maintain the net worth or
         working capital of, or provide funds to satisfy any other financial
         test applicable to, any other Person, except (in the case of (a) or (b)
         above) for (i) guaranties by the Company of loans to leveraged Employee
         Stock Ownership Plans; (ii) a performance guaranty by the Company of
         performance by DMI Industries under a certain contract involving
         aggregate payments of approximately $20,000,000; (iii) guaranties by
         the Company or any Material Subsidiary of obligations of any Material
         Subsidiary as lessee under any lease that is not a Capital Lease, (iv)
         other guaranties limited as to principal of recovery to not more than
         $10,000,000 in the aggregate; (v) guaranties by Varistar Corporation of
         the obligations of the Company under the Bank Credit Agreement and (vi)
         the guaranty by Varistar Corporation of the obligations of the Company
         in respect of up to $40,000,000 of Insured Senior Notes due October 1,
         2017, as described in a Prospectus dated September 11, 2002 and a
         prospectus supplement dated on or about September 19, 2002.

                  Section 10.12. Unconditional Purchase Obligations. The Company
         will not and will not permit any Material Subsidiary to enter into or
         be a party to any contract for the purchase or lease of materials,
         supplies or other property or services if such contract requires that
         payment be made by it regardless of whether or not delivery is ever
         made of such materials, supplies or other property or services."

         Section 1.12. Section 11(f) of the Note Purchase Agreement shall be and
is hereby amended as follows:

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Otter Tail Corporation                First Amendment to Note Purchase Agreement

                   (a) the term "Significant" shall be deleted wherever said
         term appears and the term "Material" shall be substituted therefor; and

                   (b) the figure "$10,000,000" shall be deleted wherever said
         figure appears and the figure "$5,000,000" shall be substituted
         therefor.

         Section 1.13. Sections 11(g) and (h) of the Note Purchase Agreement
shall be and are hereby amended by deleting the term "Significant" wherever said
term appears and substituting therefor the term "Material."

         Section 1.14. Section 11(i) of the Note Purchase Agreement shall be and
is hereby amended as follows:

                   (a) the term "Significant" shall be deleted and the term
         "Material" shall be substituted therefor;

                   (b) the figure "$10,000,000" shall be deleted wherever said
         figure appears and the figure "$1,000,000" shall be substituted
         therefor; and

                   (c) the phrase "60 days" shall be deleted wherever said
         phrase appears and the phrase "30 days" shall be substituted therefor.

        Section 1.15. Section 11(k) of the Note Purchase Agreement shall be and
is hereby amended in its entirety to read as follows:

                   "(k) if (i) any Plan shall fail to satisfy the minimum
         funding standards of ERISA or the Code for any plan year or part
         thereof or a waiver of such standards or extension of any amortization
         period is sought or granted under section 412 of the Code, (ii) a
         notice of intent to terminate any Plan shall have been or is reasonably
         expected to be filed with the PBGC or the PBGC shall have instituted
         proceedings under ERISA section 4042 to terminate or appoint a trustee
         to administer any Plan or the PBGC shall have notified the Company or
         any ERISA Affiliate that a Plan may become a subject of any such
         proceedings, (iii) the aggregate "amount of unfunded benefit
         liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
         all Plans, determined in accordance with Title IV of ERISA, shall
         exceed $500,000, (iv) the Company or any ERISA Affiliate shall have
         incurred or is reasonably expected to incur any liability pursuant to
         Title I or IV of ERISA or the penalty or excise tax provisions of the
         Code relating to employee benefit plans, (v) the Company or any ERISA
         Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or
         any Subsidiary establishes or amends any employee welfare benefit plan
         that provides post-employment welfare benefits in a manner that would
         increase the liability of the Company or any Subsidiary thereunder; and
         in the case of clauses (i), (iv), (v) or (vi) above only, any such
         event or events, either individually or together with any other such
         event or events, would reasonably be expected to have a Material
         Adverse Effect; or"

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Otter Tail Corporation                First Amendment to Note Purchase Agreement

         Section 1.16. The following shall be added as a new Section 11(l) of
the Note Purchase Agreement:

                  "(l) any Person, or group of Persons acting in concert, that
                  owned less than 5% of the shares of any voting class of stock
                  of the Company shall have acquired more than 25% of the shares
                  of such voting stock."

        Section 1.17. The following defined terms contained in Schedule B of the
Note Purchase Agreement shall be and are hereby amended in their entirety to
read as follows:

                  "Bank Credit Agreement" means the Credit Agreement dated as of
         April 30, 2002 among the Company, the Banks defined therein, and U.S.
         Bank National Association, as a Bank and as Agent, as amended from time
         to time, any replacement, additional or successor agreement or
         agreements thereto or any other bank credit facility or bank credit
         facilities in effect from time to time with banks or other lending
         institutions.

                  "Debt" means, with respect to any Person, without duplication,

                            (a) its liabilities for borrowed money and its
                  redemption obligations in respect of Redeemable Preferred
                  Stock;

                            (b) its liabilities for the deferred purchase price
                  of property acquired by such Person (excluding accounts
                  payable arising in the ordinary course of business but
                  including, without limitation, all liabilities created or
                  arising under any conditional sale or other title retention
                  agreement with respect to any such property);

                            (c) its Capital Lease Obligations;

                            (d) all liabilities for borrowed money secured by
                  any Lien with respect to any property owned by such Person
                  (whether or not it has assumed or otherwise become liable for
                  such liabilities);

                            (e) net liabilities under any interest rate swap,
                  collar or other interest rate hedging agreement;

                            (f) undertakings or agreements to reimburse or
                  indemnify issuers of letters of credit other than commercial
                  letters of credit; and

                            (g) any Guaranty of such Person with respect to Debt
                  of a type described in any of clauses (a) through (f) hereof,
                  excluding ordinary course endorsements.

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Otter Tail Corporation                First Amendment to Note Purchase Agreement

                  Debt of any Person shall include all obligations of such
         Person of the character described in clauses (a) through (g) to the
         extent such Person remains legally liable in respect thereof
         notwithstanding that any such obligation is deemed to be extinguished
         under GAAP.

                  "Indebtedness" with respect to any Person means, at any time,
         without duplication, all obligations, contingent or otherwise, which in
         accordance with GAAP should be classified upon the Company's balance
         sheet as liabilities, but in any event including the following (whether
         or not they should be classified as liabilities upon such balance
         sheet):

                            (a) its liabilities for borrowed money and its
                  redemption obligations in respect of Redeemable Preferred
                  Stock;

                            (b) its liabilities for the deferred purchase price
                  of property acquired by such Person (excluding accounts
                  payable arising in the ordinary course of business but
                  including all liabilities created or arising under any
                  conditional sale or other title retention agreement with
                  respect to any such property);

                            (c) Capital Lease Obligations;

                            (d) all liabilities for borrowed money secured by
                  any Lien with respect to any property owned by such Person
                  (whether or not it has assumed or otherwise become liable for
                  such liabilities);

                            (e) all its liabilities in respect of letters of
                  credit or instruments serving a similar function issued or
                  accepted for its account by banks and other financial
                  institutions (whether or not representing obligations for
                  borrowed money);

                            (f) Swaps of such Person;

                            (g) any obligation on account of deposits or
                  advances; and

                            (h) any Guaranty of such Person with respect to
                  liabilities of a type described in any of clauses (a) through
                  (f) hereof.

                  For all purposes of this Agreement, the Indebtedness of any
         Person shall include the Indebtedness of any partnership or joint
         venture in which such Person is a general partner or a joint venturer.

                  "Interest Charges" means, for any period of determination, the
         aggregate consolidated amount, without duplication, of interest paid,
         accrued or scheduled to be paid in respect of any Indebtedness of the
         Company and its Subsidiaries, including in all cases interest expense
         determined in accordance with GAAP and (a) all but the principal
         component of payments in respect of conditional sale contracts, Capital
         Leases and other

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Otter Tail Corporation                First Amendment to Note Purchase Agreement

         title retention agreements, (b) commissions, discounts and other fees
         and charges with respect to letters of credit and bankers' acceptance
         financings and (c) net costs under any interest rate swap, collar or
         other interest rate hedging agreements, in each case determined in
         accordance with GAAP.

                  "Lender" means any "Bank" under the Bank Credit Agreement.

        Section 1.18. The following defined terms shall be and are hereby added
in alphabetical order to Schedule B of the Note Purchase Agreement:

                  "DMI Industries" means DMI Industries, Inc., a North Dakota
         corporation and a subsidiary of the Company.

                  "First Amendment Effective Date" means December ___, 2002.

                  "Investment" means the acquisition, purchase, making or
         holding of any stock or other security, any loan, advance, contribution
         to capital, extension of credit (except for trade and customer accounts
         receivable for inventory sold or services rendered in the ordinary
         course of business and payable in accordance with customary trade
         terms), any acquisitions of real or personal property (other than real
         and personal property acquired in the ordinary course of business) and
         any purchase or commitment or option to purchase stock or other debt or
         equity securities of or any interest in another Person or any integral
         part of any business or the assets comprising such business or part
         thereof.

                  "Material Subsidiary" means (a) the Subsidiaries listed on
         SCHEDULE 1 hereto, and (b) any Subsidiary acquired after the First
         Amendment Effective Date if the acquisition of such Subsidiary has
         required consent of the Required Holders under Section 10.10(j) to be
         deemed permitted under this Agreement.

                  "Related Party" means any Person (other than a Subsidiary):
         (a) which directly or indirectly through one or more intermediaries
         controls, or is controlled by, or is under common control with, the
         Company; (b) which beneficially owns or holds 5% or more of the equity
         interest of the Company; or (c) 5% or more of the equity interest of
         which is beneficially owned or held by the Company or a Subsidiary. As
         used in this definition, "control" means the possession, directly or
         indirectly, of the power to direct or cause the direction of the
         management and policies of a Person, whether through the ownership of
         voting securities, by contract or otherwise.

                   "Restricted Payment" means any expenditure by the Company or
         any Subsidiary for purchase, redemption or other acquisition for value
         of any shares of the Company's or any Subsidiary's stock, payment of
         any dividend thereon (other than stock dividends and dividends payable
         solely to the Company), any distribution on, or payment on account of
         the purchase, redemption, defeasance or other acquisition or retirement
         for value of, any shares of the Company's or any Subsidiary's stock, or
         the setting aside of any funds for any

                                      -10-
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Otter Tail Corporation                First Amendment to Note Purchase Agreement

         such purpose (other than payment to, or on account of or for the
         benefit of, the Company only).

                  "Varistar Corporation" shall mean Varistar Corporation, a
         Minnesota corporation and a subsidiary of the Company.

        Section 1.19. Schedule 1 and Schedule 10.10 attached hereto shall be and
are hereby inserted as Schedule 1 and Schedule 10.10, respectively, to the Note
Purchase Agreement.

        Section 1.20. The Noteholders agree that the Company has satisfied the
requirements of Section 10.7 of the Note Purchase Agreement by its execution and
delivery of this First Amendment as it pertains to the Credit Agreement;
provided, however, that the requirements of said Section 10.7 are and shall be
applicable to any future amendment, restatement or replacement of the Credit
Agreement, in accordance with the terms of said Section 10.7.

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

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

                   (a) this First Amendment has been duly authorized, executed
         and delivered by it and this First Amendment constitutes the legal,
         valid and binding obligation, contract and agreement of the Company
         enforceable against it in accordance with its terms, except as
         enforcement may be limited by bankruptcy, insolvency, reorganization,
         moratorium or similar laws or equitable principles relating to or
         limiting creditors' rights generally;

                   (b) the Note Purchase Agreement, as amended by this First
         Amendment, constitute the legal, valid and binding obligations,
         contracts and agreements of the Company enforceable against it in
         accordance with their respective terms, except as enforcement may be
         limited by bankruptcy, insolvency, reorganization, moratorium or
         similar laws or equitable principles relating to or limiting creditors'
         rights generally;

                   (c) the execution, delivery and performance by the Company of
         this First Amendment (i) has been duly authorized by all requisite
         corporate action and, if required, shareholder action, (ii) does not
         require the consent or approval of any governmental or regulatory body
         or agency, and (iii) will not (A) violate (1) any provision of law,
         statute, rule or regulation or its certificate of incorporation or
         bylaws, (2) any order of any court or any rule, regulation or order of
         any other agency or government binding upon it, or (3) any provision of
         any material indenture, agreement or other instrument to which it is a
         party or by which its properties or assets are or may be bound, or (B)
         result in a breach or constitute (alone or with due notice or lapse of
         time or both) a default under any indenture, agreement or other
         instrument referred to in clause (iii)(A)(3) of this SECTION 2.1(c);

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Otter Tail Corporation                First Amendment to Note Purchase Agreement

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

                   (e) all the representations and warranties contained in
         Section 5 of the Note Purchase Agreement are true and correct in all
         material respects with the same force and effect as if made by the
         Company on and as of the date hereof; and

                   (f) since April 30, 2002, the Company has not acquired any
         Subsidiary which is a "Material Subsidiary" under the Bank Credit
         Agreement.

SECTION 3. CONDITIONS TO EFFECTIVENESS OF THIS FIRST AMENDMENT.

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

                   (a) executed counterparts of this First Amendment, duly
         executed by the Company and the holders of at least 100% of the
         outstanding principal of the Notes, shall have been delivered to the
         Noteholders;

                   (b) the Noteholders shall have received a copy of the
         resolutions of the Board of Directors of the Company authorizing the
         execution, delivery and performance by the Company of this First
         Amendment, certified by its Secretary or an Assistant Secretary;

                   (c) the representations and warranties of the Company set
         forth in SECTION 2 hereof are true and correct on and with respect to
         the date hereof;

                   (d) the Noteholders shall have received the favorable opinion
         of counsel to the Company as to the matters set forth in SECTIONS
         2.1(a), 2.1(b) and 2.1(c) hereof, which opinion shall be in form and
         substance satisfactory to the Noteholders;

                   (e) Varistar Corporation shall have affirmed its obligations
         under the Guaranty Agreement pursuant to an Affirmation in the form of
         EXHIBIT A hereto; and

                   (f) the Company shall have paid the reasonable fees and
         expenses of Chapman and Cutler, counsel to the Noteholders, pursuant to
         SECTION 4.1.

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

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

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

                                      -12-
<PAGE>
Otter Tail Corporation                First Amendment to Note Purchase Agreement

SECTION 5. ACKNOWLEDGEMENT REGARDING GUARANTY.

         The Company hereby acknowledges and agrees that the guaranty by
Varistar Corporation of the obligations of the Company in respect of the
Company's $40,000,000 Insured Senior Notes due October 1, 2017 constitutes
"Priority Debt" under the Note Purchase Agreement.

SECTION 6. MISCELLANEOUS.

         Section 6.1. This First Amendment shall be construed in connection with
and as part of the Note Purchase Agreement, and except as modified and expressly
amended by this First Amendment, all terms, conditions and covenants contained
in the Note Purchase Agreement and the Notes are hereby ratified and shall be
and remain in full force and effect.

         Section 6.2. Any and all notices, requests, certificates and other
instruments executed and delivered after the execution and delivery of this
First Amendment may refer to the Note Purchase Agreement without making specific
reference to this First Amendment but nevertheless all such references shall
include this First Amendment unless the context otherwise requires.

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

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

                                      -13-
<PAGE>
Otter Tail Corporation                First Amendment to Note Purchase Agreement

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

                                       OTTER TAIL CORPORATION

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

                                      -14-
<PAGE>
Otter Tail Corporation                First Amendment to Note Purchase Agreement

Accepted and Agreed to:

                                      THE PRUDENTIAL INSURANCE COMPANY OF
                                        AMERICA

                                      By  /s/ Jay D. Squiers
                                          Title: Vice President

                                      HARTFORD LIFE INSURANCE COMPANY

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

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

                                      By  /s/ Jay D. Squiers
                                          Title: Vice President

                                      MEDICA HEALTH PLAN

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

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

                                      By  /s/ Jay D. Squiers
                                          Title: Vice President

                                      GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY

                                      By: GE Asset Management, its Investment
                                          Advisor

                                      By: /s/ Stephen De Motto
                                          Title: Vice President - Private
                                                 Investments

                                      -15-
<PAGE>
Otter Tail Corporation                First Amendment to Note Purchase Agreement

                                      GE EDISON LIFE INSURANCE COMPANY

                                      By: GE Asset Management, its Investment
                                          Advisor

                                      By  /s/ Stephen De Motto
                                          Title: Vice President - Private
                                                 Investments

                                      GE CAPITAL LIFE ASSURANCE COMPANY OF
                                        NEW YORK

                                      By: GE Asset Management, its Investment
                                          Advisor

                                      By  /s/ Stephen De Motto
                                          Title: Vice President - Private
                                                 Investments

                                      FIRST COLONY LIFE INSURANCE COMPANY

                                      By: GE Asset Management, its Investment
                                          Advisor

                                      By  /s/ Stephen De Motto
                                          Title: Vice President - Private
                                                 Investments

                                      TREASURER OF THE STATE OF SOUTH CAROLINA
                                        SOUTH CAROLINA RETIREMENT SYSTEM

                                      By  /s/ Grady L. Patterson, Jr.
                                          Title: S C State Treasurer

                                      COUNTRY LIFE INSURANCE COMPANY

                                      By  /s/ John Jacobs
                                      Title: Senior Investment Officer

                                      -16-
<PAGE>

                                    EXHIBIT A

                        AFFIRMATION OF GUARANTY AGREEMENT

         THIS AFFIRMATION OF GUARANTY AGREEMENT (the or this "Affirmation") is
made as of the 1st day of December, 2002, by VARISTAR CORPORATION, a Minnesota
corporation (the "Subsidiary Guarantor") in favor of the Purchasers named in
Schedule I to the hereinafter defined Note Purchase Agreement (together with
their successors, assigns and transferees, the "Noteholders"). Unless otherwise
defined herein, capitalized terms used herein shall have the meanings ascribed
to them in the hereinafter defined Note Purchase Agreement.

                                   WITNESSETH:

         WHEREAS, the Subsidiary Guarantor is presently a subsidiary of Otter
Tail Corporation, a Minnesota corporation (the "Company");

         WHEREAS, the Company and the Noteholders have entered into the Note
Purchase Agreement dated as of December 1, 2001 (as amended, modified, restated
or otherwise supplemented from time to time, the "Note Purchase Agreement");
pursuant to which the Company has issued and sold to the Noteholders its
$90,000,000 6.63% Senior Notes, due December 1, 2011 (the "Notes");

         WHEREAS, in connection with the Note Purchase Agreement, the Subsidiary
Guarantor previously executed and delivered to the Noteholders the Guaranty
Agreement dated as of December 1, 2001 (the "Guaranty Agreement"), pursuant to
which the Subsidiary Guarantor has absolutely and unconditionally guaranteed the
payment of the Notes and the performance by the Company of its obligations under
the Note Purchase Agreement;

         WHEREAS, the Company and the Noteholders have entered into a First
Amendment dated as of December 1, 2002 (the "First Amendment") to the Note
Purchase Agreement, pursuant to which certain provisions of the Note Purchase
Agreement have been amended;

         WHEREAS, the Company and the Subsidiary Guarantor have derived both
direct and indirect benefits from the issuance and sale of the Notes and will
derive both direct and indirect benefits from the execution and delivery by the
Noteholders of the First Amendment;

         WHEREAS, it is a condition precedent to the execution and delivery by
the Noteholders of the First Amendment that the Subsidiary Guarantor execute
this Affirmation to acknowledge the First Amendment and to reaffirm its
obligations under the Guaranty Agreement;

         NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned agrees as follows:

<PAGE>

                    1. First Amendment. The Subsidiary Guarantor acknowledges
         the First Amendment, and agrees that the Notes and the obligations of
         the Company under the Note Purchase Agreement, as amended by the First
         Amendment, are guaranteed by the Guaranty Agreement. All references in
         the Guaranty Agreement to the "Note Purchase Agreement" shall be deemed
         to refer to the Note Purchase Agreement, as amended by the First
         Amendment.

                    2. Affirmation. In connection with the execution and
         delivery of the First Amendment, the Subsidiary Guarantor ratifies and
         affirms all of its payment and performance obligations under the
         Guaranty Agreement, in each case as if each reference in such Guaranty
         Agreement to the obligations secured thereby is construed to hereafter
         mean and refer to such obligations under the Note Purchase Agreement,
         as amended by the First Amendment. The Subsidiary Guarantor hereby
         consents to the terms and conditions of the Note Purchase Agreement, as
         amended by the First Amendment, and acknowledges receipt of a copy of
         the First Amendment and acknowledges that the Guaranty Agreement
         remains in full force and effect and is hereby ratified and confirmed.
         The execution of this Affirmation shall not operate as a waiver of any
         right, power or remedy of the Noteholders, nor constitute a waiver of
         any provision of the Guaranty Agreement nor constitute a novation of
         any of the obligations under the Notes or the Note Purchase Agreement,
         as amended by the First Amendment.

                    3. Successors and Assigns. This Affirmation shall be binding
         upon the Subsidiary Guarantor and upon its respective successors and
         assigns and shall inure to the benefit of the Noteholders and its
         respective successors and assigns. The successors and assigns of such
         entities shall include, without limitation, their respective receivers,
         trustees, or debtors-in-possession.

                    4. Further Assurances. The Subsidiary Guarantor hereby
         agrees from time to time, as and when requested by any Noteholder, to
         execute and deliver or cause to be executed and delivered, all such
         documents, instruments and agreements and to take or cause to be taken
         such further or other action as such Noteholder may reasonably deem
         necessary or desirable in order to carry out the intent and purposes of
         this Affirmation, the Notes, the Guaranty Agreement the Note Purchase
         Agreement, as amended by the First Amendment.

                   5. Definitions. All references to the singular shall be
         deemed to include the plural and vice versa where the context so
         requires.

                   6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
         SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF
         THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

                    7. Severability. Wherever possible, each provision of this
         Affirmation shall be interpreted in such manner as to be effective and
         valid under applicable law, but if any provision of this Affirmation
         shall be prohibited by or invalid under such law, such provision shall
         be ineffective to the extent of such prohibition or invalidity without

                                      -2-
<PAGE>

         invalidating the remainder of such provision or the remaining
         provisions of this Affirmation.

                   8. Merger. This Affirmation represents the final agreement of
         the Subsidiary Guarantor with respect to the matters contained herein
         and may not be contradicted by evidence of prior or contemporaneous
         agreements, or prior or subsequent oral agreements, among the Company,
         the Subsidiary Guarantor or the Noteholders.

                   9. Execution in Counterparts. This Affirmation may be
         executed in any number of counterparts and by different parties hereto
         in separate counterparts, each of which when so executed shall be
         deemed to be an original and all of which taken together shall
         constitute one and the same agreement.

                  10. Section Headings. The section headings herein are for
         convenience of reference only, and shall not affect in any way the
         interpretation of any of the provisions hereof.

                  [remainder of page intentionally left blank]

                                      -3-
<PAGE>

         IN WITNESS WHEREOF, this Affirmation has been duly executed by the
undersigned as of the day and year first set forth above.

                                       VARISTAR CORPORATION, a Minnesota
                                         corporation

                                       By
                                          -------------------------------------

                                      -4-
<PAGE>

                                   SCHEDULE 1

                              MATERIAL SUBSIDIARIES

<Table>
<S>      <C>                                    <C>
1.       Varistar Corporation                   corp.

2.       BTD Manufacturing, Inc.                corp.

3.       DMI Industries, Inc.                   corp.

4.       DMS Health Technologies                _____

5.       DMS Imaging, Inc.                      corp.

6.       E.W. Wylie Corporation                 corp.

7.       Northern Pipe Products, Inc.           corp.

8.       Vinyltech Corporation                  corp.
</Table>

<PAGE>

                                 SCHEDULE 10.10

                                   INVESTMENTS

<Table>
<S>                                                                  <C>
Investment in Affordable Housing (OTC)                               $ 6,108,075

Investment in Loan Pools (OTP)                                         1,186,493

Notes Receivable (Glendale Machine)                                      125,000

Deferred Compensation Plan (Varistar)                                  3,280,391

Investment in FM Redhawks                                              2,007,340

Life Insurance (DMS)                                                   1,034,475

Notes Receivable (Wahpeton Land-OTR)                                     140,972

Investment - Moorhead State Lighting (OTESCO)                          1,542,945

Telecommunication Investments (MIS)

  CoBank (St. Paul Bank for Coop's)                                    1,040,098

  ONVOY                                                                  708,300

  Central MN Network Systems                                             353,500

  West Central Transport Group, LLC                                      108,671

  Central Transport Group, LLC                                            52,000

  Northwest Minnesota Special Access, LLC                                  9,161

  Independent Information Systems, Inc.                                   80,000

  Northern Transport Group, LLC                                           29,500

  Northern Fiber, Inc.                                                     2,687

  Notes Receivable                                                       170,908

Other Miscellaneous (OTP, BTD, Chassis, MDG)                              28,453
                                                                     -----------
                                                                     $18,008,969
                                                                     ===========
</Table><PAGE>

                                                                  Exhibit 10-N-1

                             OTTER TAIL CORPORATION

                    DEFERRED COMPENSATION PLAN FOR DIRECTORS

               As Amended and Restated Effective January 1, 2003

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           Page
                                                                          Number
                                                                          ------
<C>                                                                       <C>
1.   PURPOSE                                                                  3

2.   PLAN PERIODS                                                             3

3.   ADMINISTRATION                                                           3

4.   PARTICIPATION                                                            3

5.   DEFERRED COMPENSATION ACCOUNTS                                           5

6.   PAYMENT                                                                  8

7.   ASSIGNMENT                                                              12

8.   TERMINATION AND AMENDMENT                                               12

     SCHEDULE A

     SCHEDULE B
</TABLE>

                                       2
<PAGE>

                             OTTER TAIL CORPORATION

                    DEFERRED COMPENSATION PLAN FOR DIRECTORS

                As Amended and Restated Effective January 1, 2003

      1. PURPOSE. The Plan is designed to provide a method of deferring payment
to non-employee Directors of all or part of their retainer and/or meeting fees,
as fixed from time to time by the Board of Directors, until termination of their
services on the Board.

      2. PLAN PERIODS. The first Plan Period shall commence upon the election of
Directors at the 1984 Annual Stockholders' Meeting and terminate on December 31,
1984. An additional Plan Period will commence on July 1, 2000 and continue
through December 31, 2000 for which a Director may elect to defer all or part of
his or her retainer and/or meeting fees for that period in the form of
restricted stock units, as provided in Section 5 hereof. Subsequent Plan Periods
shall relate to successive calendar years.

      3. ADMINISTRATION. The Plan shall be administered by a committee of the
Board of Directors designated by the Board to administer the Plan (the
"Committee"). The Committee shall be composed solely of two or more
"Non-Employee Directors," within the meaning of Rule 16b-3 under Section 16 of
the Securities Exchange Act of 1934. The Committee shall have the power to
interpret the Plan and, subject to its provisions, to make all determinations
necessary or desirable for the Plan's administration.

      4. PARTICIPATION.

      (a) An individual who serves as Director and is not otherwise employed by
the Corporation or any of its subsidiaries shall be eligible to participate in
the Plan if the Director elects to have payment of his or her retainer and/or
meeting fees in respect of a Plan Period deferred as provided herein.

                                       3
<PAGE>

      (b) The election to participate shall be made by written notice on
Schedule A to the Plan filed with the Committee prior to the first day of such
Plan Period or, in the case of a Director who first becomes eligible during a
Plan Period, not later than 30 days after the Director first becomes eligible.

      (c) At the time a Director elects to participate in the Plan or when the
Director makes an election with respect to a subsequent Plan Period, the
Director may make a concurrent election on Schedule A to have an organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
(a "Tax Exempt Organization"), receive all or part of the cash distributions of
the Director's retainer and/or meeting fees, plus accruals thereon, in
accordance with the terms of distribution specified on Schedule A (a "Charitable
Election"). At the time a Director makes a Charitable Election, the Director
shall also recommend on Schedule A a specific Tax Exempt Organization to receive
the distributions, subject to the approval of the Committee. The Committee shall
make the final determination as to the Tax Exempt Organization that will receive
the distributions and the Committee retains the authority to designate a
different Tax Exempt Organization from the one recommended by the Director.

      (d) In the case of a Director who first becomes eligible to participate
during a Plan Period, the election to participate shall apply only to
compensation subsequent to making the election. Each such election shall be
irrevocable. An election on Schedule A shall remain in effect until changed or
rescinded. Prior to the beginning of any subsequent Plan Period, a Participant
may irrevocably elect in writing, by completing a new Schedule A, to change an
earlier election with respect to such subsequent Plan Period. Such new election
shall become effective on the first business day of the Plan Period following
receipt by the Committee of the new Schedule A. Notwithstanding the foregoing, a
Participant may elect, prior to July 1, 2000,

                                       4
<PAGE>

to convert all or part of his or her Deferred Cash Account into the Deferred
Stock Account, as such Accounts are described in Section 5 below. The number of
whole and fractional restricted stock units (computed to four decimal places)
shall be determined as of July 3, 2000 by dividing the amount of the Deferred
Cash Account to be converted by the average of the high and low sale prices of a
Common Share of Otter Tail Corporation as reported on the NASDAQ National Market
System on July 3, 2000.

      5. DEFERRED COMPENSATION ACCOUNTS.

      (a) An account shall be established for each eligible, electing Director
(a "Participant") which shall be designated as the Participant's Deferred
Compensation Account. A Participant's Deferred Compensation Account shall
include a Deferred Cash Account, a Charitable Contribution Account, and a
Deferred Stock Account, as applicable. The Deferred Cash Account means the
bookkeeping account of this Plan to which a Participant's deemed cash
allocations are credited pursuant to the Plan. A Charitable Contribution Account
means the bookkeeping account of this Plan to which a Participant's deemed cash
allocations are credited pursuant to a Participant's Charitable Election under
this Plan. The Deferred Stock Account means the bookkeeping account of this Plan
to which a Participant's deemed restricted stock unit allocations are credited
pursuant to this Plan. If a Participant elects to have payment deferred of his
or her retainer and/or meeting fees, the amount of the retainer and/or meeting
fees payable with respect to a Plan Period shall be credited, (i) in monthly
installments as of the last day of each month in the Plan Period to which such
retainer and/or meeting fees relate, for amounts credited to the Participant's
Deferred Cash Account or Charitable Contribution Account and (ii) in quarterly
installments as of the last day of each calendar quarter in the Plan Period to
which such retainer and/or meeting fees relate, for amounts credited to the
Participant's Deferred

                                       5
<PAGE>

Stock Account, subject to the provisions of Section 5(d). The Corporation shall
not be required to segregate any amounts credited to the Deferred Compensation
Accounts, which shall be established merely as an accounting convenience.
Amounts credited to the Deferred Compensation Accounts shall at all times remain
solely the property of the Corporation subject to the claims of its general
creditors and available for the Corporation's use for whatever purpose desired.

      (b) The amounts credited to a Deferred Cash Account and a Charitable
Contribution Account shall, in order to alleviate the adverse effects of an
inflationary economy, accrue interest each month at an annual rate equal to the
rate charged for prime commercial loans of 90-day maturity (based on actual
numbers of days, 360 days to the year), plus 1% as of the last business day of
the month. Such interest shall be computed on the average daily balance in each
of the Deferred Cash Account and the Charitable Contribution Account during such
month and shall be credited to each such Account and compounded as of the last
day of such month. Interest shall continue to accrue and be compounded on the
unpaid balance in each of the Deferred Cash Account and the Charitable
Contribution Account until such Account is fully distributed.

      (c) The amounts credited to a Deferred Stock Account shall be credited in
the form of restricted stock units as of the last day of the calendar quarter.
The number of whole and fractional restricted stock units (computed to four
decimal places) credited to the Account shall be determined by dividing the
amount deferred to the Deferred Stock Account during the quarter by the average
of the high and low sale prices of a Common Share of Otter Tail Corporation as
reported on the NASDAQ National Market System on the last business day of the
quarter. At such times as cash dividends are declared by the Corporation on its
outstanding Common Shares, an amount shall be credited to the Participant's
Deferred Stock Account on the record date for

                                       6
<PAGE>

such dividend equal to the amount of dividends that would be paid if the
restricted stock units (including a fractional unit) were outstanding Common
Shares on such date ("Dividend Equivalents"). At the end of the calendar quarter
in which such Dividend Equivalents are credited to the Participant's Deferred
Stock Account, the Dividend Equivalents shall be converted to additional whole
and fractional restricted stock units (computed to four decimal places) in an
amount determined by dividing the amount of the Dividend Equivalents by the
average of the high and low sale prices of a Common Share of the Corporation as
reported on the NASDAQ National Market System on the last business day of the
quarter. In the event of a stock dividend or other distribution,
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase or exchange of Common
Shares or other securities of the Corporation, issuance of warrants or other
rights to purchase Common Shares or other securities of the Corporation or other
similar corporate transaction or event that affects the Common Shares, the
Committee shall make such adjustments as it deems appropriate in the number of
restricted stock units credited to a Participant's Deferred Stock Account in
order to prevent dilution or enlargement of the Participant's benefits under the
Plan.

      (d) If, prior to the end of a Plan Period, a Participant becomes an
employee of the Corporation or one of its subsidiaries or dies or ceases for any
reason to be a Director, or if the effective date of participation by a
Participant for any Plan Period shall be other than the first day thereof, the
Participant will be entitled to be credited with that proportion of the annual
retainer for the full Plan Period which the number of days of his or her
participation in the Plan during such Plan Period bears to the total number of
days in such Plan Period.

                                       7
<PAGE>

      6. PAYMENT.

      (a) Following termination of a Participant's service on the Board, the
Corporation shall distribute the entire amount accumulated in the Participant's
Deferred Compensation Account in accordance with the provisions of this Plan.

      (b) By written notice on Schedule A to the Plan filed with the Committee,
a Participant may elect to have distribution of his or her Deferred Cash Account
commence either (i) within 30 days after the date the Participant ceases to be a
Director of the Corporation, (ii) 12 months after the Participant ceases to be a
Director of the Corporation, or (iii) 24 months after the Participant ceases to
be a Director of the Corporation. Any such election, or any change in such
election (by such subsequent written notice to the Committee), shall apply only
to future deferrals. In the event no election is made as to the commencement of
a distribution, such distribution shall commence within 30 days after the date
the Participant ceases to be a Director of the Corporation. The actual date that
distribution shall commence shall be a date within the appropriate period
determined by the Committee in its sole discretion.

      (c) By written notice on Schedule A to the Plan filed with the Committee,
a Participant may choose to receive the distribution of his or her Deferred Cash
Account in the form of (i) one lump-sum payment or (ii) monthly distributions
over a period selected by the Participant of up to 10 years. In the event a
lump-sum payment is made under the Plan, the amount then standing to the
Participant's credit in his or her Deferred Cash Account, including interest at
the rate provided in Section 5(b) to the date of distribution, shall be paid to
the Participant on the date determined under Section 6(b). In the case of a
distribution over a period of years, the Corporation shall pay to the
Participant, commencing on the date determined under Section 6(b), monthly
installments from the amount then standing to the Participant's credit in his or
her

                                       8
<PAGE>

Deferred Cash Account, including interest on the unpaid balance at the rate
provided in Section 5(b) to the date of distribution. The amount of each
installment shall be determined by dividing the then unpaid balance, plus
accrued interest, in the Participant's Deferred Cash Account by the number of
installments remaining to be paid. If a Participant does not make a choice as to
the manner of distribution of his or her Deferred Cash Account, such
distribution shall be made in the form of monthly installments paid over a
five-year period. Notwithstanding the above and subject to approval by the
Committee, a Participant may at any time request, by written notice to the
Committee, to have the monthly payments scheduled to be made to him or her
within a tax year paid to him or her in one installment within such year.

      (d) Amounts credited to a Participant's Charitable Contribution Account
that are to be distributed to a Tax Exempt Organization shall be so distributed
as a lump-sum payment within 60 days after the end of the Plan Period for which
the Charitable Election was made; provided, however, that in the event of the
death of a Participant who has made a Charitable Election, amounts credited to
the Participant's Charitable Contribution Account shall be distributed to the
Tax Exempt Organization as a lump-sum payment within 90 days after the
Participant's death.

      (e) Distributions from the Deferred Stock Account shall be in Common
Shares of the Corporation. The Common Shares available for issuance under this
Plan shall be issued under, and in accordance with the terms of, the Otter Tail
Corporation 1999 Stock Incentive Plan. Upon distribution, one Common Share shall
be issued for each restricted stock unit, except that no fractional shares shall
be issued, and the Participant shall receive a cash payment in lieu of any
fractional share. By written notice on Schedule A to the Plan filed with the
Committee, a Participant may elect to have a distribution of his or her Deferred
Stock Account commence (i) within 30 days after the date the Participant ceases
to be a Director of the Corporation, (ii) 12

                                       9
<PAGE>

months after the Participant ceases to be a Director of the Corporation or (iii)
24 months after the Participant ceases to be a Director of the Corporation. Any
such election, or any change in such election (by subsequent written notice to
the Committee), shall apply only to future deferrals. In the event no election
is made as to the commencement of the distribution, such distribution shall
commence within 30 days after the date the Participant ceases to be a Director
of the Corporation. The actual date that the distribution shall commence shall
be a date within the appropriate period determined by the Committee in its sole
discretion.

      (f) By written notice on Schedule A to the Plan filed with the Committee,
a Participant may choose to receive the distribution of his or her Deferred
Stock Account in the form of (i) one lump-sum payment or (ii) annual
distributions over a period selected by the Participant of up to 10 years. If a
Participant does not make a choice as to the manner of distribution of his or
her Deferred Stock Account, such distribution shall be made in the form of a
lump-sum payment. In the event a lump-sum payment is made under the Plan, a
certificate representing the Common Shares payable for the whole number of
restricted stock units credited to the Participant's Deferred Stock Account
shall be delivered to the Participant or the Participant's Beneficiary, as the
case may be, along with cash in payment of any fractional share, on the date
determined under Section 6(d). In the case of a distribution over a period of
years, the Corporation shall pay to the Participant, commencing on the date
determined under Section 6(d), annual installments from the number of restricted
stock units then credited to the Participant's Deferred Stock Account, including
additional restricted stock units credited as a result of the deemed
reinvestment of Dividend Equivalents credited to the Participant's account. The
amount of each installment shall be determined by dividing the then unpaid
balance of restricted stock units by the number of installments remaining to be
paid. A certificate representing the whole number of

                                       10
<PAGE>

Common Shares payable for such installment shall be delivered to the Participant
or the Participant's Beneficiary, as the case may be, along with cash in payment
of any fractional share. The value of any fractional share shall be based upon
the average of the high and low sale prices of a Common Share of the Corporation
as reported on the NASDAQ National Market System on the business day preceding
the payment date. The Participant or the Participant's Beneficiary, as the case
may be, shall have no rights as a holder of Common Shares unless and until a
certificate for the shares is issued by the Corporation.

      (g) In the event of a Participant's death, the balance of a Participant's
Deferred Cash Account or Deferred Stock Account, as the case may be, shall be
distributed to the Participant's Beneficiary(ies) over a period of not more than
five years or in a lump sum, in accordance with the Participant's choice on
Schedule B to the Plan filed with the Committee. Such distribution shall
commence within 30 days after the Participant's death, on a date within such
month to be determined by the Committee in its sole discretion. Additional
annual payments for distributions made over a period of more than one year shall
be made on the yearly anniversaries of such date. In the event of a
Participant's death after distribution of the Deferred Cash Account or Deferred
Stock Account, as the case may be, has commenced, any choice under this Section
6(f) shall not extend time of payment of such Account beyond the time when
distribution would have been completed if the Participant had lived. A
Participant may change Beneficiary designations by filing a subsequent Schedule
B with the Committee. If a Participant does not make a choice as to the manner
of distribution of his or her Deferred Cash Account or Deferred Stock Account,
as the case may be, in the event of death, any such distribution shall be made
as a lump-sum payment to his or her estate within 30 days after the
Participant's death.

                                       11
<PAGE>

      (h) Notwithstanding any other provision of the Plan, if the Committee
shall determine in its sole discretion that the time of payment of a
Participant's Deferred Compensation Account should be advanced because of
protracted illness or other undue hardship, then the Committee may advance the
time or times of payment (whether before or after the Director's retirement
date) only if the Committee determines that an emergency beyond the control of
the Participant exists and which would cause such Participant severe financial
hardship if the payment of such benefits were not approved. Any such
distribution for hardship shall be limited to the amount needed to meet such
emergency. A Participant who receives a hardship distribution may not reenter
the Plan for 12 months after the date of such distribution. Any distribution for
hardship under this Section 6(h) shall commence or be made within 30 days after
the Committee determines to make such hardship distribution.

      7. ASSIGNMENT. No benefit under the Plan shall in any manner or to any
extent be assigned, alienated, or transferred by any Participant or Beneficiary
or subject to attachment, garnishment, or other legal process.

      8. TERMINATION AND AMENDMENT. The Committee may terminate the Plan at any
time so that no further amounts shall be credited to Deferred Compensation
Accounts or may, from time to time, amend the Plan, without the consent of
Participants or Beneficiaries; provided, however, that no such amendment or
termination shall impair any rights which have accrued under the Plan.

                                       12
<PAGE>

                                                                      SCHEDULE A

                              IRREVOCABLE ELECTION

                                    under the
                             Otter Tail Corporation
                    Deferred Compensation Plan for Directors
                As Amended and Restated Effective January 1, 2003

      THIS IRREVOCABLE ELECTION is being made pursuant to the Otter Tail
Corporation Deferred Compensation Plan for Directors, As Amended and Restated
Effective January 1, 2003 (the "Plan"). Any election under any Section specified
below which changes a prior election under the Plan shall apply only to
subsequent Plan Periods, as defined in the Plan. Terms used herein shall have
the meanings given to them in the Plan.

SECTION 1. DEFERRAL ELECTION.

      I hereby irrevocably elect to defer receipt of all or part of my retainer
and/or meeting fees pursuant to the terms of the Plan and this Irrevocable
Election, as indicated below:

            ______ % of retainer

            ______ % of meeting fees

SECTION 2. CHARITABLE ELECTION.

      I hereby elect to have a Tax Exempt Organization receive ____% of my
deferred retainer and/or meeting fees, plus accruals thereon, to be distributed
as a lump-sum cash payment within 60 days after the end of each Plan Period,
subject to the terms of the Plan. I understand that my Charitable Election will
remain in effect until I change it, subject to the terms of the Plan.

      Subject to the Committee's approval, I hereby recommend:

                                         _______________________________________
                                         Name of Tax Exempt Organization

                                         _______________________________________
                                         Address

                                         _______________________________________
                                         Contact

                                         _______________________________________
                                         Telephone Number

                                       13
<PAGE>

as the recipient of distributions from my Charitable Contribution Account. I
certify that ______________________ qualifies as an organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. I understand
that the Committee is not bound by my recommendation and has the authority to
designate an alternate Tax Exempt Organization to receive the distributions.

SECTION 3. FORM OF PAYMENT.

      I hereby irrevocably elect to receive payment of the amounts deferred in
accordance with my election in Section 1 above and the terms of the Plan, in the
form indicated below:

                  ______    Cash

                  ______    Common Shares of Otter Tail Corporation. I
                            understand that no actual shares will be issued in
                            my name until I receive a distribution from the Plan
                            and, until such time, my Deferred Stock Account will
                            be credited with restricted stock units and Dividend
                            Equivalents, which will be converted into additional
                            restricted stock units, as described in the Plan.

SECTION 4. TIMING OF DISTRIBUTION.

      I hereby irrevocably elect, in accordance with the terms of the Plan, to
have the distribution from my Deferred Cash Account and/or Deferred Stock
Account, excluding any amounts subject to a Charitable Election, to commence or
be made as follows:

                  ______    within 30 days after I cease to be a Director of the
                            Corporation

                  ______    12 months after I cease to be a Director of the
                            Corporation

                  ______    24 months after I cease to be a Director of the
                            Corporation

      I understand that if no election is made, my distribution will commence or
be made within 30 days after I cease to be a Director of the Corporation.

SECTION 5. NUMBER OF DISTRIBUTIONS FROM DEFERRED CASH ACCOUNT.

      I hereby elect, in accordance with the terms of the Plan, to receive my
cash distributions from my Deferred Cash Account under the Plan, excluding any
amounts subject to a Charitable Election, as indicated below:

                  ______    In one lump sum

                  ______    In monthly installments over a period of ______
                            years (not to exceed 10 years)

                                       14
<PAGE>

      I understand that if no election is made, my cash distribution will be
made in monthly installments over a period of five years.

SECTION 6. NUMBER OF DISTRIBUTIONS FROM DEFERRED STOCK ACCOUNT.

      I hereby elect, in accordance with the terms of the Plan, to receive my
stock distributions from my Deferred Stock Account under the Plan, as indicated
below:

                  ______    In one lump sum

                  ______    In annual installments over a period of ______ years
                            (not to exceed 10 years)

      I understand that if no election is made, my stock distribution will be
made in one lump-sum payment.

      I further understand that payment from my Deferred Stock Account will be
in the form of Common Shares of the Corporation.

SECTION 7. SIGNATURE.

      I understand that the above elections are subject to the terms of the
Plan. I acknowledge receipt of a copy of the Plan. I certify that my elections
are not being made in reliance upon any financial or tax advice given by the
Corporation. I understand that I should consult my own tax advisor as to the tax
consequences of my elections.

__________________________                    __________________________________
Witness                                       Participant's Signature

                                              __________________________________
                                              Date

                                       15
<PAGE>

                                                                      SCHEDULE B

                          BENEFICIARY DESIGNATION FORM

                                    under the

                             Otter Tail Corporation

                    Deferred Compensation Plan for Directors

                As Amended and Restated Effective January 1, 2003

SECTION 1. METHOD OF DISTRIBUTION IN CASE OF DEATH.

      In case of my death, I hereby elect, in accordance with the terms of the
Plan, to have the distribution of my Deferred Compensation Account paid to my
Beneficiary(ies) designated in Section 2 hereof as indicated below:

      ____  In one lump sum

      ____  In annual installments over a period of ___ years (not to exceed
            five years)

      I understand that if no election is made, a lump-sum payment will be made
to my Beneficiary(ies) or estate within 30 days of my death. I further
understand that payments from my Deferred Stock Account, if any, will be in the
form of Common Shares of Otter Tail Corporation.

I UNDERSTAND THAT IF I HAVE MADE A CHARITABLE ELECTION UNDER THE PLAN, AMOUNTS
THAT ARE TO BE DISTRIBUTED TO THE TAX EXEMPT ORGANIZATION WILL BE PAID TO THE
TAX EXEMPT ORGANIZATION IN THE EVENT OF MY DEATH, IN ACCORDANCE WITH THE TERMS
OF THE PLAN.

SECTION 2. DESIGNATION OF BENEFICIARY(IES).

      In the event of my death, I hereby designate the following individuals,
fiduciaries or other entities, either in their own right or in their
representative capacity, in the proportions and in the priority of interest
designated, to be the beneficiaries of any benefits owing to me, under the Plan.

      PRIMARY BENEFICIARIES - The following beneficiary(ies) shall receive all
benefits payable under the Plan in the event of my death in the proportions
designated hereunder. If any one or more of the primary beneficiaries designated
hereunder shall predecease me, such beneficiary's share(s) shall be divided
equally among the remaining primary beneficiaries.

                                       16
<PAGE>

<TABLE>
<CAPTION>
                                   PROPORTIONATE
  NAME AND PRESENT ADDRESS       INTEREST OF PRIMARY         RELATIONSHIP TO
OF PRIMARY BENEFICIARY(IES)        BENEFICIARY(IES)              EMPLOYEE
<S>                              <C>                         <C>
___________________________      ___________________%        _________________
___________________________      ___________________%        _________________
___________________________      ___________________%        _________________
___________________________      ___________________%        _________________
___________________________      ___________________%        _________________
___________________________      ___________________%        _________________
___________________________      ___________________%        _________________
</TABLE>

_______________________       ___________________________
Date                          Participant's Initials

      SECONDARY BENEFICIARIES - The following beneficiary(ies) shall receive all
benefits payable under the Plan in the event of my death in the proportions
designated hereunder only if all of my Primary Beneficiaries have predeceased
me. If all Primary Beneficiaries have predeceased me and if any one or more of
the Secondary Beneficiaries designated hereunder shall predecease me, such
Secondary Beneficiary's share(s) shall be divided equally among the Secondary
Beneficiaries.

<TABLE>
<CAPTION>
                                     PROPORTIONATE
   NAME AND PRESENT ADDRESS           INTEREST OF
        OF SECONDARY                   SECONDARY               RELATIONSHIP
      BENEFICIARY(IES)              BENEFICIARY(IES)            TO EMPLOYEE
<S>                              <C>                         <C>
___________________________      ___________________%        _________________
___________________________      ___________________%        _________________
___________________________      ___________________%        _________________
</TABLE>

      ESTATE - In the event I have declined to designate a Beneficiary hereunder
or if all of the Beneficiaries that I have designated predecease me, then all
benefits payable under the Plan shall be payable to my Estate.

_______________________________             ____________________________________
Witness                                     Participant's Signature

                                            ____________________________________
                                            Date

                                       17

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