Document:

<PAGE>
                                                                    EXHIBIT 10.1

                 FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT

         THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (herein called this
"Amendment") made as of the 11th day of September, 2003 by and between Priority
Fulfillment Services, Inc. ("Priority"), Priority Fulfillment Services of
Canada, Inc. ("Priority Canada"; Priority and Priority Canada are sometimes
collectively referred to herein as "Borrowers", and each individually as
"Borrower") and Comerica Bank (successor by merger to Comerica Bank-California
("Bank"),

                              W I T N E S S E T H:

         WHEREAS, Borrowers and Bank have entered into that certain Loan and
Security Agreement dated as of March 28, 2003 (as from time to time amended or
modified, the "Original Agreement") for the purposes and consideration therein
expressed, pursuant to which Bank became obligated to make loans to Borrowers as
therein provided; and

         WHEREAS, Borrowers and Bank desire to amend the Original Agreement to
provide for term loans and for the other purposes set forth herein;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and in the Original Agreement, in
consideration of the loans which may hereafter be made by Bank to Borrowers, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto do hereby agree as follows:

                                   ARTICLE I.

                           Definitions and References

         Section 1.1 Terms Defined in the Original Agreement. Unless the context
otherwise requires or unless otherwise expressly defined herein, the terms
defined in the Original Agreement shall have the same meanings whenever used in
this Amendment.

         Section 1.2. Other Defined Terms. Unless the context otherwise
requires, the following terms when used in this Amendment shall have the
meanings assigned to them in this Section 1.2.

                  "Amendment" means this First Amendment to Loan and Security
         Agreement.

                  "Loan Agreement" means the Original Agreement as amended
         hereby.

<PAGE>

                                   ARTICLE II.

                        Amendments to Original Agreement

         Section 2.1. Defined Terms.

         (a) The definition of "Committed Revolving Line" in Exhibit A to the
Original Agreement is hereby amended in its entirety to read as follows:

                  "Committed Revolving Line" means a Credit Extension of up to
         $5,000,000 (inclusive of any amounts outstanding under the Letters of
         Credit Sublimit).

         (b) The following definitions are hereby added to Exhibit A to the
Original Agreement following the definition of "Equipment":

                  "Equipment Advance" has the meaning set forth in Section
         2.1A(b).

                  "Equipment Line" means Equipment Advances of up to $2,500,000.

                  "Equipment Maturity Date" means September 10, 2006.

         (c) The following definitions are hereby added to Exhibit A to the
Original Agreement immediately following the definition of "Trademarks":

                  "Tranche A" has the meaning assigned in Section 2.1A(b)(i).

                  "Tranche B" has the meaning assigned in Section 2.1A(b)(i).

                  "Tranche A Equipment Advance" or "Tranche A Equipment
         Advances" means any Equipment Advance(s) made under Tranche A.

                  "Tranche B Equipment Advance" or "Tranche B Equipment
         Advances" means any Equipment Advance(s) made under Tranche B.

                  "Tranche A Availability End Date" means March 10, 2004.

                  "Tranche B Availability End Date" means September 10, 2004.

         Section 2.2. Equipment Advances. The following Section 2.1A is hereby
added to the Original Agreement immediately following Section 2.1:

                                       2
<PAGE>

                  2.1A Equipment Advances.

                  (a) Promise to Pay. Borrowers promise to pay to Bank, in
         lawful money of the United States of America, the aggregate unpaid
         principal amount of all Equipment Advances made by Bank to Borrowers,
         together with interest on the unpaid principal amount of such Equipment
         Advances at rates in accordance with the terms hereof.

                  (b) Equipment Advances.

                  (i) Subject to and upon the terms and conditions of this
         Agreement, Bank agrees to make advances (each an "Equipment Advance"
         and, collectively, the "Equipment Advances") under the Equipment Line
         to Borrowers. The first Equipment Advance shall be used to refinance
         Priority's existing equipment leases, including buyout provisions, with
         various creditors (the "First Equipment Advance"). Each subsequent
         Equipment Advance shall be advanced in two tranches, Tranche A and
         Tranche B. Each Borrower may request Equipment Advances under Tranche A
         at any time from the date hereof through the Tranche A Availability End
         Date. Each Borrower may request Equipment Advances under Tranche B at
         any time from the Tranche A Availability End Date through the Tranche B
         Availability End Date. Neither the amount of any individual Equipment
         Advance, nor the aggregate remaining outstanding principal balance of
         Equipment Advances shall exceed the Equipment Line and the aggregate
         amount of Tranche A Equipment Advances and Tranche B Equipment Advances
         shall not exceed $1,000,000. Each Equipment Advance (other than the
         First Equipment Advance) shall not exceed 80% of the invoice amount of
         equipment and software approved by Bank from time to time (which the
         applicable Borrower shall, in any case, have purchased within 90 days
         of the date of the corresponding Equipment Advance), including taxes,
         shipping, warranty charges, freight discounts and installation expense
         (collectively, "Soft Costs"); provided that (i) the aggregate amount of
         Equipment Advances (excluding the First Equipment Advance) made with
         respect to Soft Costs shall not exceed $200,000, and (ii) the aggregate
         amount of Equipment Advances (excluding the First Equipment Advance)
         with respect to Soft Costs shall not exceed twenty percent (20%) of the
         aggregate principal amount of Equipment Advances (excluding the First
         Equipment Advance).

                  (ii) Interest shall accrue from the date of each Equipment
         Advance at the rate specified in Section 2.3(a), and shall be payable
         in accordance with Section 2.3(c). The First Equipment Advance shall be
         payable in 30 equal installments of principal, plus all accrued
         interest, beginning on October 1, 2003, and continuing on the same day
         of each month thereafter until March 1, 2006, at which time all amounts
         due in connection with the First Equipment Advance shall be immediately
         due and payable. Any Equipment Advances that are outstanding under
         Tranche A on the Tranche A Availability End Date shall be payable in 30
         equal monthly installments of principal, plus all accrued interest,
         beginning on April 1, 2004, and continuing on the same day of each
         month thereafter through the Equipment Maturity Date at which time all
         amounts due in connection with Tranche A Equipment Advances made under
         this Section 2.1A(b) shall be immediately due and payable. Any
         Equipment Advances that are outstanding under Tranche B on the Tranche
         B Availability End Date shall be payable in 24 equal monthly
         installments of

                                       3
<PAGE>

         principal, plus all accrued interest, beginning on October 1, 2004 and
         continuing on the same day of each month thereafter through the
         Equipment Maturity Date, at which time all amounts due in connection
         with Tranche B Equipment Advance made under this Section 2.1A(b) shall
         be immediately due and payable. Equipment Advances, once repaid, may
         not be reborrowed. Borrowers may prepay any Equipment Advances without
         penalty or premium.

                  (iii) When a Borrower desires to obtain an Equipment Advance,
         such Borrower shall notify Bank (which notice shall be irrevocable) by
         facsimile transmission to be received no later than 3:00 p.m (Pacific
         time). The notice shall be signed by a Responsible Officer or its
         designee and include a copy of the invoice for any Equipment to be
         financed.

         Section 2.3. Interest Rate. The following sentence is hereby added to
Section 2.3(a) of the Original Agreement:

                  Except as set forth in Section 2.3(b), the Equipment Advances
         shall bear interest, on the outstanding daily balance thereof, at a
         rate equal to 1.5% above the Prime Rate.

         Section 2.4. Equipment Line. The following Section 2.7 is hereby added
to the Original Agreement:

                           2.7. Equipment Line Following Termination of
         Committed Revolving Line . In the event all Advances are paid in full
         and the Committed Revolving Line is terminated prior to the payment in
         full of the Equipment Advances, unless Borrowers comply with the
         requirements of either clause (a) or (b) of this Section 2.7, this
         Agreement will remain in full force and effect (except as to the
         availability of the Committed Revolving Line) and Bank's security
         interest in the Collateral will continue to secure Borrowers'
         obligations under the Equipment Line.

                           (a) Borrowers may, at their option, pay to Bank in
         full all amounts outstanding (all unpaid principal and accrued interest
         through the date of payoff) under the Equipment Line, whereupon (i)
         Borrowers' rights to receive, and Bank's obligations to make, Equipment
         Advances under the Equipment Line shall automatically terminate, (ii)
         Bank shall release its security interests in the Collateral, and (iii)
         this Agreement shall terminate (subject to Section 12.7 hereof); or

                           (b) Borrowers may, at their option, concurrently with
         the termination of the Committed Revolving Line, deposit with Bank (or
         an Affiliate of Bank) an amount equal to the aggregate principal
         balance of the Equipment Advances then outstanding (the "Additional
         Cash Collateral") and execute a pledge and security agreement in favor
         of Bank, in form and substance satisfactory to Bank, pursuant to which
         Borrowers shall grant a first priority security interest in favor of
         Bank in the Additional Cash Collateral. Upon receipt of the Additional
         Cash Collateral and executed pledge and security agreement, Bank will
         release its security interest in all Collateral other than the

                                       4
<PAGE>

         Additional Cash Collateral and all of the covenants contained in
         Articles 6 and 7 hereof (other than 6.1, 6.2(b)-(g) and 6.4) shall
         terminate and be of no further force or effect. Bank agrees that it
         will, from time to time upon written request by Borrowers, release its
         security interest on, and distribute in accordance with Borrowers'
         written directions, Additional Cash Collateral in an amount equal to
         the amount by which the Additional Cash Collateral exceeds the
         aggregate outstanding principal balance of the Equipment Line as of the
         date of such request. When all Equipment Advances and other Obligations
         have been paid in full, Bank shall release its security interest in any
         remaining Additional Cash Collateral.

         Section 2.5. Financial Covenants. Section 6.7 of the Original Agreement
is hereby amended by adding the following subsection (c):

                  (c) Minimum Cash. A balance of Cash at Bank and Cash at Bank's
         affiliates covered by a control agreement of not less than $1,250,000.

         Section 2.6. Exhibits. Exhibit E to the Original Agreement is hereby
amended in its entirety to read as set forth in Exhibit E attached hereto.

                                  ARTICLE III.

                           Conditions of Effectiveness

         Section 3.1. Effective Date. This Amendment shall become effective as
of the date first above written when and only when (i) Bank shall have received,
at Bank's office, a counterpart of this Amendment executed and delivered by
Borrowers, (ii) Borrowers shall have paid Bank, in good and immediately
available funds, a facility fee in the amount of $2,500 with respect to the
Equipment Line, and (iii) Bank shall have received an executed payoff letter
from the various equipment creditors of Priority, in form and substance
satisfactory to Bank, for the termination of Priority's existing Equipment
leases with such creditors.

                                   ARTICLE IV.

                         Representations and Warranties

         Section 4.1. Representations and Warranties of Borrowers. In order to
induce Bank to enter into this Amendment, each Borrower represents and warrants
to Bank that:

                  (a) The representations and warranties contained in Article 5
         of the Original Agreement are true and correct at and as of the time of
         the effectiveness hereof.

                  (b) Each Borrower is duly authorized to execute and deliver
         this Amendment and is and will continue to be duly authorized to borrow
         and to perform its obligations under the Loan Agreement. Each Borrower
         has duly taken all corporate action necessary

                                       5
<PAGE>

         to authorize the execution and delivery of this Amendment and to
         authorize the performance of the obligations of such Borrower
         hereunder.

                  (c) The execution and delivery by Borrowers of this Amendment,
         the performance by Borrowers of their obligations hereunder and the
         consummation of the transactions contemplated hereby do not and will
         not conflict with any provision of law, statute, rule or regulation or
         of the organizational documents of Borrowers, or of any material
         agreement, judgment, license, order or permit applicable to or binding
         upon Borrowers, or result in the creation of any lien, charge or
         encumbrance upon any assets or properties of Borrowers. Except for
         those which have been duly obtained, no consent, approval,
         authorization or order of any court or governmental authority or third
         party is required in connection with the execution and delivery by
         Borrowers of this Amendment or to consummate the transactions
         contemplated hereby.

                  (d) When duly executed and delivered, each of this Amendment
         and the Loan Agreement will be a legal and binding instrument and
         agreement of Borrowers, enforceable in accordance with its terms,
         except as limited by bankruptcy, insolvency and similar laws applying
         to creditors' rights generally and by principles of equity applying to
         creditors' rights generally.

                                    ARTICLE V

                                  Miscellaneous

         Section 5.1. Ratification of Agreements. The Original Agreement as
hereby amended is hereby ratified and confirmed in all respects. Any reference
to the Loan Agreement in any Loan Document shall be deemed to be a reference to
the Original Agreement as hereby amended. The execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of Bank under the Loan
Agreement or any other Loan Document nor constitute a waiver of any provision of
the Loan Agreement or any other Loan Document.

         Section 5.2. Survival of Agreements. All representations, warranties,
covenants and agreements of Borrowers herein shall survive the execution and
delivery of this Amendment and the performance hereof, including without
limitation the making or granting of the Advances and Equipment Advances, and
shall further survive until all of the Obligations are paid in full. All
statements and agreements contained in any certificate or instrument delivered
by Borrowers hereunder or under the Loan Agreement to Bank shall be deemed to
constitute representations and warranties by, or agreements and covenants of,
Borrowers under this Amendment and under the Loan Agreement.

         Section 5.3. Loan Documents. This Amendment is a Loan Document, and all
provisions in the Loan Agreement pertaining to Loan Documents apply hereto.

                                       6
<PAGE>

         Section 5.4. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of California and any
applicable laws of the United States of America in all respects, including
construction, validity and performance.

         Section 5.5. Counterparts. This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Amendment.

         THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.

                                       7
<PAGE>

IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.

                                            PRIORITY FULFILLMENT SERVICES, INC.

                                            By:
                                                --------------------------------
                                                     Name:
                                                     Title:

                                            PRIORITY FULFILLMENT SERVICES OF
                                            CANADA, INC.

                                            By:
                                                --------------------------------
                                                     Name:
                                                     Title:

                                            COMERICA BANK (successor by merger
                                            with Comerica Bank-California)

                                            By:
                                                --------------------------------
                                                     Name:
                                                     Title:

                                       8
<PAGE>

                              CONSENT AND AGREEMENT

         PFSWEB, INC., a Delaware corporation, hereby consents to the provisions
of this Amendment and the transactions contemplated herein, and hereby ratifies
and confirms the Guaranty dated as of March 28, 2003 made by it for the benefit
of Bank, and agrees that its obligations and covenants thereunder are unimpaired
hereby and shall remain in full force and effect.

                                            PFSWEB, INC.

                                            By:
                                                --------------------------------
                                                     Name:
                                                     Title:

                                       9
<PAGE>

                                    EXHIBIT E
                             COMPLIANCE CERTIFICATE

TO:      COMERICA BANK - CALIFORNIA

FROM:    PRIORITY FULFILLMENT SERVICES, INC. and PRIORITY FULFILLMENT SERVICES
         OF CANADA, INC.

The undersigned authorized officer of Priority Fulfillment Services, Inc. and
Priority Fulfillment Services of Canada, Inc. (collectively, "Borrowers") hereby
certifies that in accordance with the terms and conditions of the Loan and
Security Agreement between Borrowers and Bank (the "Agreement"), (i) Borrowers
are in complete compliance for the period ending __________ with all required
covenants, including without limitation the ongoing registration of intellectual
property rights in accordance with Section 6.8, except as noted below and (ii)
all representations and warranties of Borrowers stated in the Agreement are true
and correct in all material respects as of the date hereof. Attached herewith
are the required documents supporting the above certification. The Officer
further certifies that these are prepared in accordance with Generally Accepted
Accounting Principles (GAAP) and are consistently applied from one period to the
next except as explained in an accompanying letter or footnotes.

PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES" COLUMN.

<Table>
<Caption>
         REPORTING COVENANT                          REQUIRED                   COMPLIES
         ------------------                          --------                   --------
<S>                                         <C>                                 <C>
Monthly financial statements                Monthly within 35 days              Yes   No

Annual (CPA Audited) of Guarantor           FYE within 90 days                  Yes   No
Annual (CPA Audited) of BSD                 FYE within 90 days                  Yes   No
10Q of Guarantor                            Quarterly within 45 days            Yes   No
10K of Guarantor                            FYE within 90 days                  Yes   No

A/R & A/P Agings, Borrowing Base Cert.      Monthly within 30 days*             Yes   No
A/R Audit                                   Initial and Semi-Annual             Yes   No
IP Report                                   Quarterly within 30 days            Yes   No

                                                                ACTUAL
                                                                ------
Adjusted Tangible Net Worth                 $21,000,000      $___________       Yes   No
</Table>

* Weekly during any period that Adjusted Tangible Net Worth is less than
$21,000,000

<Table>
<Caption>
         FINANCIAL COVENANT                  REQUIRED           ACTUAL          COMPLIES
         ------------------                  --------           ------          --------
<S>                                         <C>                 <C>             <C>
Maintain on a Monthly Basis:

         Minimum Tangible Net Worth         $19,000,000      $___________       Yes   No

         Minimum Liquidity                  1.50 : 1.00      _____ : 1.00       Yes   No
         Minimum Cash                       $1,250,000       $___________       Yes   No
</Table>

COMMENTS REGARDING EXCEPTIONS: See Attached.

Sincerely,

------------------------------------------------
SIGNATURE

------------------------------------------------
TITLE

------------------------------------------------
DATE

                                       10
<PAGE>
BANK USE ONLY

Received By:
             ---------------------------------
AUTHORIZED SIGNER

Date:
      ----------------------------------------

Verified:
          ------------------------------------
AUTHORIZED SIGNER

Date:
      ----------------------------------------
Compliance Status            Yes         No

                                       11exv4w1

 

Exhibit 4.1

THIRD AMENDMENT TO CREDIT AGREEMENT

     THIS THIRD AMENDMENT, dated as of August 25, 2003, amends and modifies a
certain Credit Agreement, dated as of April 30, 2002, as amended by amendments
dated as of September 19, 2002 and April 29, 2003 (as so amended, the “Credit
Agreement”), among OTTER TAIL CORPORATION, a Minnesota corporation (the
“Borrower”), U.S. BANK NATIONAL ASSOCIATION, as Agent (in such capacity, the
“Agent”), and the Banks, as defined therein. Terms not otherwise expressly
defined herein shall have the meanings set forth in the Credit Agreement.

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

ARTICLE I - AMENDMENT TO THE CREDIT AGREEMENT

     1.1 Additional Bank. Wells Fargo Bank, National Association (“Wells”)
shall, upon effectiveness of this Amendment, become a Bank under the Credit
Agreement. Upon such effectiveness, the Agent shall inform Wells of the amount
of the Loans it is required to fund consistent with its Revolving Percentage
and its participating interest in Letters of Credit. Upon funding by Wells,
the Agent shall pay the outstanding Revolving Loans of the other Banks to make
the outstanding Revolving Loans of all Banks consistent with their Revolving
Percentages.

     1.2 Definitions. Section 1.1 is amended as follows:

     (a)  The following new definitions are added:

		
	 	     “Revolving Commitment” means the maximum unpaid principal
amount of the Revolving Loans and participation in Letters of
Credit of all Banks which may from time to time be outstanding
hereunder, being $62,500,000 as of the date of the Third Amendment
hereto, as the same may be reduced from time to time pursuant to
Section 4.3, or, if so indicated, the maximum unpaid principal
amount of Revolving Loans and participation in Letters of Credit of
any Bank (which amounts are set forth on Schedule 1.1(a) hereto or
in the relevant Assignment and Assumption Agreement for such Bank)
and, as the context may require, the agreement of each Bank to make
the Revolving Loans to the Borrower and to participate in the
Letters of Credit subject to the terms and conditions of this
Agreement up to its Revolving Commitment.”

		
	 	     “Revolving
Percentage” means, as to any Bank, the proportion,
expressed as a percentage, that such Bank’s Revolving Commitment
bears to the total Revolving Commitments of all Banks. The
Revolving Percentages of the Banks as of the date of this Third
Amendment hereof are set forth on Schedule 1.1(a).”

 

 

		
	 	     “Swing Line Commitment” means the maximum unpaid principal
amount of the Swing Line Loans of the Swing Line Bank which may
from time to time be outstanding hereunder, being $7,500,000 as of
the date of the Third Amendment hereto, as the same may be reduced
from time to time pursuant to Section 4.3 and, as the context may
require, the agreement of the Swing Line Bank to make the Swing
Line Loans to the Borrower up to the Swing Line Commitment.”

     (b)  The definition of “Commitment” is amended to read as follows:

		
	 	     “Commitment” means the maximum unpaid principal amount of the
Loans and participation in Letters of Credit of all Banks which may
from time to time be outstanding hereunder, being $70,000,000 as of
the date of the Third Amendment hereto, as the same may be reduced
from time to time pursuant to Section 4.3, or, if so indicated, the
maximum unpaid principal amount of Loans and participations in
Letters of Credit of any Bank (which amounts are set forth on
Schedule 1.1(a) hereto or in the relevant Assignment and Assumption
Agreement for such Bank) and, as the context may require, the
agreement of each Bank to make Loans to the Borrower and to
participate in the Letters of Credit subject to the terms and
conditions of this Agreement up to its Commitment. The Commitments
shall include both the Revolving Commitments and the Swing Line
Commitment.”

     (c)  The definition of “Percentage” is amended to read as follows:

		
	 	     “Percentage” means (a) prior to any termination of the
Commitments, as to any Bank, the proportion, expressed as a
percentage, that such Bank’s Commitments bears to the total
Commitments of all Banks, and (b) following any termination of the
Commitments, as to any Bank, the proportion, expressed as a
percentage, that such Bank’s outstanding Loans and participations
in Letters of Credit and Loans (as provided in Sections 2.7(c) and
(d), 2.8 and 4.5) bears to the total outstanding Loans and total
participations in Letters of Credit of all Banks. The Percentages
of the Banks as of the date of this Agreement are set forth on
Schedule 1.1(a).”

     (d)  The definition of “Swing Line Participation Amount” is deleted.

     1.3 The Commitments. Section 2.1 is amended to read as follows:

		
	 	        “Section 2.1 The Commitments. Subject to the terms and conditions
hereof and in reliance upon the warranties of the Borrower herein:

		
	 	(a) each Bank agrees, severally and not jointly, to make loans
(each, a ‘Revolving Loan’ and, collectively, the ‘Revolving Loans’)
to the Borrower from time to time from the date hereof until the
Termination Date, during which period the Borrower may repay and
reborrow in accordance with the provisions hereof, provided, that
the aggregate unpaid principal amount of any Bank’s Revolving Loans
plus its participation in Letter of Credit Obligations shall not
exceed such
Bank’s Revolving Commitment and provided, further, that the total
of all outstanding Revolving Loans and Letter of Credit Obligations
shall not exceed the aggregate Revolving Commitments of all Banks
at any time. The Revolving Loans shall be made by the Banks on a
pro rata basis, calculated for each Bank based on its Revolving
Percentage.

2

 

		
	 	(b) the Swing Line Bank agrees to make loans (each a ‘Swing Line
Loan’ and, collectively, the ‘Swing Line Loans’) to the Borrower
from time to time from the date hereof until the Termination Date,
during which period the Borrower may repay and reborrow in
accordance with the provisions hereof, provided, that the aggregate
unpaid principal amount of the Swing Line Loans at any one time
outstanding shall not exceed the Swing Line Commitment.”

     1.4 Borrowing Procedures. Section 2.3(a)(iii) is deleted. It is the
intent that request for Swing Line Loans be governed by Section 2.7(a).

     1.5 Swing Line Provisions and Procedures on Event of Default. Section
2.7 is amended to read as follows:

     “Section 2.7 Swing Line Loans; Procedures on Event of Default.

		
	 	(a) The borrowing procedures and time requirements set forth in
Section 2.3, and the timing requirements for repayments set forth
in Section 4.4 shall not apply to the Swing Line Loans. Instead,
the Swing Line Bank and the Borrower shall enter into mutually
acceptable arrangements and agreements for “sweep” funding and
repayment of the Swing Line Loans.

		
	 	(b) Unless an Event of Default shall have occurred and shall be
continuing, the Swing Line Bank shall have the right to receive,
retain, and apply to the Swing Line Loans any payment made under
the foregoing arrangements and shall not be required to remit such
payment to the Agent for application to any other obligations of
the Borrower, and to such extent, the second sentence of Section
4.4 shall not apply to such payments.

		
	 	(c) Upon occurrence and during continuance of an Event of Default:
(i) the Agent shall, on behalf of the Borrower (which hereby
irrevocably directs the Agent to act on its behalf), request the
Banks (including the Swing Line Bank) to make Loans, and the Agent
shall apply the proceeds thereof to payment of outstanding
Revolving Loans or Swing Line Loans, so that after the making of
such Loans and application of the proceeds thereof, each Bank shall
have made its Percentage of the outstanding Loans (all of which
shall be Base Rate Advances); and (ii) the Agent shall adjust the
participating interest of all Banks in the outstanding Letters of
Credit and Letter of Credit Obligations so that each Bank shall
hold its Percentage of such participating interests in the Letters
of Credit and Letter of Credit Obligations. For such purpose and
for purposes of Section 2.7(d), the
Percentage of each Bank shall be determined as if the Commitments
had not been terminated (i.e. as provided in subparagraph (a) of
the definition of ‘Percentage’).

3

 

		
	 	(d) If, for any reason, Loans may not be (as determined by the
Agent in its sole discretion), or are not, made pursuant to Section
2.7(c), then, effective on the date such Loans would otherwise have
been made, each Bank (including the Swing Line Bank) severally,
unconditionally and irrevocably agrees that it shall purchase a
participating interest in the outstanding Loans to the extent
necessary so that each Bank shall hold (either directly or by
participation) its Percentage of all outstanding Loans.

		
	 	(e) Whenever any Bank receives any payment on account of its Loans
in which a participation is deemed to have been sold as provided in
Section 2.7(d), such Bank will distribute to the Bank or Banks
deemed to have purchased such participation their share or shares
of such payment (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Bank’s
participating interest was outstanding and funded and, in the case
of principal and interest payments, to reflect such Bank’s pro rata
portion of such payment if such payment is not sufficient to pay
the principal of and interest on all Loans then due); provided,
however, that in the event that such payment received by the Bank
so distributing payments is required to be returned, the Bank or
Banks receiving payment will return to the distributing Bank any
portion thereof previously distributed to it or them by the
distributing Bank.

		
	 	(f) Each Bank’s obligation to make the Loans referred to in
Section 2.7(c) and to fund its participating interests in the
Letters of Credit, Letter of Credit Obligations and Loans pursuant
to Section 2.7(c) and Section 2.7(d) shall be absolute and
unconditional and shall not be affected by any circumstance,
including, without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right which such Bank or the Borrower
may have against the any other Bank, the Borrower or any other
Person for any reason whatsoever; (ii) the occurrence or
continuance of an Event of Default or the failure to satisfy any of
the other conditions precedent specified in Article VI; (iii) any
adverse change in the condition (financial or otherwise) of the
Borrower; (iv) any breach of this Agreement or any other Loan
Document by the Borrower or any Bank; or (v) any other
circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing.

		
	 	(g) Upon the request for a Loan, adjustment of any participation
in funded Letter of Credit Obligation or participation in a Loan,
as provided in Section 2.7(c) and Section 2.7(d), each Bank
required to fund amounts of such Loan or participations shall
transfer to the Agent the amount of such funding on the Business
Day requested by the Agent (or if such request is made after 2:00
p.m., Minneapolis time, on the next succeeding Business Day), and
the Agent shall apply the proceeds of such Loans or participations
in accordance with the terms of such Sections.

4

 

     1.6. Letters of Credit. It is intended that, prior to occurrence of an
Event of Default, the Banks purchase participating interest in the Letters of
Credit in accordance with their respective Revolving Percentages (and not
Percentages). Section 2.8 of the Credit Agreement is amended to read as
provided in Exhibit AA attached hereto. For ease of reference of the parties,
words added to such Section 2.8 are double-underlined in Exhibit AA.

     1.7 Reduction or Termination of Commitments. The following sentence is
added at the end of Section 4.3:

		
	 	“Reductions of Commitments shall be applied ratably to the Revolving
Commitments and the Swing Line Commitments and the Borrower may not
terminate one such Commitment (Revolving Commitment and Swing Line
Commitment) without also terminating the other such Commitment.”

     1.8 Schedule. Schedule 1.1(a) is replace by Schedule 1.1(a) attached
hereto.

     1.9 Construction. All references in the Credit Agreement to “this
Agreement”, “herein” and similar references shall be deemed to refer to the
Credit Agreement as amended by this Amendment.

ARTICLE II - REPRESENTATIONS AND WARRANTIES

     To induce the Agent and the Banks to enter into this Amendment and to make
and maintain the Loans under the Credit Agreement as amended hereby, the
Borrower hereby warrants and represents to the Agent and the Banks that it is
duly authorized to execute and deliver this Amendment, and to perform its
obligations under the Credit Agreement as amended hereby, and that this
Amendment constitutes the legal, valid and binding agreement of the Borrower,
enforceable in accordance with its terms.

ARTICLE III - CONDITIONS PRECEDENT

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

     3.1 Warranties. Before and after giving effect to this Amendment, the
representations and warranties in Article VII of the Credit Agreement shall be
true and correct as though made on the date hereof, except for changes that are
permitted by the terms of the Credit Agreement. The execution by the Borrower
of this Amendment shall be deemed a representation that the Borrower has
complied with the foregoing condition.

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

5

 

     3.3 Documents and Fee. The following shall have been executed and
delivered to the Agent and the Borrower shall have paid to the Agent the
following fee:

	 
	(a) This Amendment, executed by the Borrower, the Agent and the Banks;
	 
	(b) The Acknowledgment in the form attached hereto, executed by the
Guarantor;
	 
	(c) Revolving Notes, executed by the Borrower, payable to Wells in the
amount of up to $20,000,000 and payable to U.S. Bank in the amount of up
to $17,500,000 (which Revolving Note payable to U.S. Bank shall replace
the existing Revolving Note payable to U.S. Bank in the amount of up to
$25,000,000);
	 
	(d) An acknowledgment and agreement, executed by Wells, as contemplated
by Section 3.5 of the Intercreditor Agreement; and
	 
	(e) A supplement to the Agent’s Fee Letter (which, together with the
original Agent’s Fee Letter, will be deemed the “Agent’s Fee Letter” for
purposes of reference thereto in the Credit Agreement).

ARTICLE IV - GENERAL

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

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

     4.3 Severability. Any provision of this Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.

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

6

 

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

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

7

 

(signature page follows)

8

 

	 	 	 	 	 
	 	 	OTTER TAIL CORPORATION
	 	 	 	 	 
	 	 	
By:
	/s/	Kevin G. Moug
	 	 	 	

	 	 	 	 	 
	 	 	
Title:
	 	C.F.O. & Treasurer
	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION,
	 	 	 	 	as Agent and a Bank
	 	 	 	 	 
	 	 	
By:
	/s/	Randy Salzwedel
	 	 	 	

	 	 	 	 	Randy A. Salzwedel

Vice President
	 	 	 	 	 
	 	 	
BANK ONE, N.A., as a Bank

	 	 	 	 	 
	 	 	
By:
	/s/	Sharon K. Webb
	 	 	 	

	 	 	 	 	 
	 	 	
Title:
	 	Associate Director
	 	 	 	

	 	 	
BANK HAPOALIM B.M., as a Bank

	 	 	 	 	 
	 	 	
By:
	/s/	James Surless
	 	 	 	

	 	 	 	 	 
	 	 	
Title:
	 	VP
	 	 	 	

	 	 	 	 	 
	 	 	
and	 	 
	 	 	 	 	 
	 	 	
By:
	/s/	Laura Raffa
	 	 	 	

	 	 	 	 	 
	 	 	
Title:
	 	SVP
	 	 	 	

	 	 	 	 	 
	 	 	
WELLS FARGO BANK, NATIONAL

 ASSOCIATION, as a Bank

	 	 	 	 	 
	 	 	
By:
	/s/	G. N. Ophaug
	 	 	 	

	 	 	 	 	 
	 	 	
Title:
	 	V.P.
	 	 	 	

9

 

ACKNOWLEDGMENT

     Reference is made to the Guaranty, dated as of April 30, 2002 (the
“Guaranty”) pursuant to which the undersigned, as Guarantor (the “Guarantor”)
has guaranteed payment and performance of obligations of Otter Tail Corporation
(the “Borrower”) to U.S. Bank National Association, as Agent, and the Banks
(the “Creditors”) under the Credit Agreement among the Borrower and the
Creditors dated as of April 30, 2002 (as thereafter amended, the “Credit
Agreement”) and under each Note and Loan Document, as defined in the Credit
Agreement. The Guarantor acknowledges that it has received a copy of the
proposed Third Amendment to the Credit Agreement, to be dated on or about
August 25, 2003 (the “Amendment”). The Guarantor agrees and acknowledges that
the Amendment shall in no way impair or limit the right of the Creditors under
the Guaranty, and confirm that by the Guaranty, the Guarantor continues to
guaranty payment and performance of the obligations of the Borrower to the Bank
under the Credit Agreement as amended pursuant to the Amendment. The Guarantor
hereby confirms that the Guaranty remains in full force and effect, enforceable
against the Guarantor in accordance with its terms.

Dated as of August 25, 2003.

	 	 	 	 	 
	 	 	VARISTAR CORPORATION
	 
	 	 	
By:
	 	/s/ Kevin G. Moug
	 	 	 	 	

	 
	 	 	
Title:
	 	C. F. O. & Treasurer
	 	 	 	 	

 

 

Schedule 1.1(a)

Commitments and Percentages

Revolving Commitments:

	 	 	 	 	 	 	 	 	 
	Bank:	Initial Revolving Commitment:	Revolving Percentages:
	
	 	
	 	

	U.S. Bank
	 	$	17,500,000	 	 	 	28.00000	%
	Wells Fargo
	 	$	20,000,000	 	 	 	32.00000	%
	Bank One
	 	$	15,000,000	 	 	 	24.00000	%
	Bank Hapoalim
	 	$	10,000,000	 	 	 	16.00000	%
	 
	 	 	
	 	 	 	
	 
	Total:
	 	$	62,500,000	 	 	 	100.00000	%

Swing Line Commitment:

	 	 	 	 	 
	Bank:	Initial Swing Line Commitment:
	
	 	

	U.S. Bank	 	 	
$7,500,000	 

Percentages:

	 	 	 	 	 	 	 	 	 
	Bank:	 	Total Commitments:	 	Percentages:
	
	 	
	 	

	U.S. Bank*
	 	$	25,000,000	 	 	 	35.714286	%
	Wells Fargo
	 	$	20,000,000	 	 	 	28.571429	%
	Bank One
	 	$	15,000,000	 	 	 	21.428571	%
	Bank Hapoalim
	 	$	10,000,000	 	 	 	14.285714	%
	 
	 	 	
	 	 	 	
	 
	Total:
	 	$	70,000,000	 	 	 	100.00000	%

*sum of Revolving Credit Commitment and Swing Line Commitment

 

 

Exhibit AA

Section 2.8 Amendment

      Section 2.8 Letters of Credit

		
	 	(a) Letters of Credit. Subject to the terms and conditions of this
Agreement, and on the condition that aggregate Letter of Credit
Obligations shall never exceed the lesser of (i) $3,000,000 or (ii) the
Revolving Commitments, and that the sum of Letter of Credit Obligations
plus the Revolving Loans shall never exceed the aggregate Revolving
Commitments of all Banks, the Borrower may, in addition to Loans, request
that the Agent issue letters of credit for the account of the Borrower,
by making such request to the Agent (such letters of credit as any of
them may be amended, supplemented, extended or confirmed from time to
time, being herein collectively called the ‘Letters of Credit’). The
Agent may, at its discretion, elect to issue or decline to issue any
requested Letter of Credit. No Letter of Credit shall expire more than
one year after the date of issuance thereof (provided, that Letters of
Credit may automatically extend absent notice of termination by the
issuer). Upon the date of the issuance of a Letter of Credit, the Agent
shall be deemed, without further action by any party hereto, to have sold
to each Bank, and each Bank shall be deemed without further action by any
party hereto, to have purchased from the Agent, a participation, in its
Revolving Percentage, in such Letter of Credit and the related Letter of
Credit Obligations.
	 
	 	(b) Purchase Unconditional. Each Bank’s purchase of a participating
interest in a Letter of Credit pursuant to Section 2.8(a) shall be
absolute and unconditional and shall not be affected by any circumstance,
including, without limitation, (i) any setoff, counterclaim, recoupment,
defense or other right which such Bank or the Borrower may have against
the Agent, the Borrower or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default or an Event of Default or
the failure to satisfy any of the other conditions precedent in Article
VI; (iii) any adverse change in the condition (financial or otherwise) of
the Borrower; (iv) any breach of this Agreement or any other Loan
Document by the Borrower or any Bank; (v) the expiry date of any Letter
of Credit occurring after such Bank’s Revolving Commitment has
terminated; or (vi) any other circumstance, happening or event
whatsoever, whether or not similar or any of the foregoing.
	 
	 	(c) Additional Provisions. The following additional provisions shall
apply to each Letter of Credit:

		
	 	(i)     Upon receipt of any request for a Letter of Credit, the Agent
shall notify each Bank of the contents of such request and of such
Bank’s Revolving Percentage of the amount of such proposed Letter
of Credit.
	 
	 	(ii)     No Letter of Credit may be issued if after giving effect
thereto the Letter of Credit Obligations shall exceed $3,000,000 or
if the sum of (A) the aggregate outstanding principal amount of
Revolving Loans plus (B) the aggregate Letter of
Credit Obligations would exceed the aggregate Revolving Commitments
of all Banks. The Revolving Commitment of each Bank shall be
deemed to be utilized for all purposes hereof in an amount equal to
such Bank’s Revolving Percentage of the Letter of Credit
Obligations.

 

 

		
	 	(iii)     Upon receipt from the beneficiary of any Letter of Credit of
any demand for payment thereunder, Agent shall promptly notify the
Borrower and each Bank as to the amount to be paid as a result of
such demand and the payment date. If at any time the Agent shall
have made a payment to a beneficiary of such Letter of Credit in
respect of a drawing or in respect of an acceptance created in
connection with a drawing under such Letter of Credit, each Bank
will pay to Agent immediately upon demand by the Agent at any time
during the period commencing after such payment until reimbursement
thereof in full by the Borrower, an amount equal to such Bank’s
Revolving Percentage of such payment, together with interest on
such amount for each day from the date of demand for such payment
(or, if such demand is made after 2:00 p.m. Minneapolis time on
such date, from the next succeeding Business Day) to the date of
payment by such Bank of such amount at a rate of interest per annum
equal to the Federal Funds Effective Rate for such period.
	 
	 	(iv)     The Borrower shall be irrevocably and unconditionally
obligated forthwith to reimburse the Agent for any amount paid by
the Agent upon any drawing under any Letter of Credit, without
presentment, demand, protest or other formalities of any kind, all
of which are hereby waived. Such reimbursement may, subject to
satisfaction of the conditions in Article VI hereof and to the
available Revolving Commitment (after adjustment in the same to
reflect the elimination of the corresponding Letter of Credit
Obligation), be made by the borrowing of Revolving Loans. The
Agent will pay to each Bank such Bank’s Revolving Percentage of all
amounts received from the Borrower for application in payment, in
whole or in part, of a Letter of Credit Obligation, but only to the
extent such Bank has made payment to the Agent in respect of such
Letter of Credit pursuant to clause (iii) above.
	 
	 	(v)     The Borrower’s obligation to reimburse the Agent for any amount
paid by the Agent upon any drawing under any Letter of Credit shall
be performed strictly in accordance with the terms of this
Agreement and the applicable Letter of Credit Agreement under any
and all circumstances whatsoever and irrespective of (A) any lack
of validity or enforceability of any Letter of Credit, any Letter
of Credit Agreement or this Agreement, or any term or provision
therein, (B) any draft or other document presented under a Letter
of Credit proving to be forged, fraudulent, or invalid in any
respect or any statement therein being untrue or inaccurate in any
respect, (C) payment by the Agent under a Letter of Credit against
presentation of a draft or other document that does not comply with
the terms of such Letter of Credit, or (D) any other event or
circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions

 

 

		
	 	of this clause (v), constitute a legal or equitable discharge of,
or provide a right of setoff against, the Borrower’s obligations
hereunder. Neither the Agent nor the Bank shall have any liability
or responsibility by reason of or in connection with the issuance
or transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery
of any draft, notice or other communication under or relating to
any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms
or any consequence arising from causes beyond the control of the
Agent; provided that the foregoing shall not be construed to excuse
the Agent from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent
permitted by applicable law) suffered by the Borrower that are
caused by the Agent’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly
agree that, in the absence of gross negligence or willful
misconduct on the part of the Agent (as finally determined by a
court of competent jurisdiction), the Agent shall be deemed to have
exercised care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties
hereto expressly agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the
terms of the Letter of Credit, the Agreement may, in its sole
discretion, either accept and make payment upon such documents
without responsibility for further investigation or refuse to
accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.
	 
	 	(vi)     The Borrower will pay to Agent for the account of each Bank in
accordance with its Revolving Percentage letter of credit fee with
respect to each Letter of Credit equal to an amount, calculated on
the basis of face amount of each Letter of Credit, in each case for
the period from and including the date of issuance of such Letter
of Credit to and including the date of expiration or termination
thereof at a per annum rate equal to the then-applicable Applicable
Margin for Eurodollar Advances, such fee to be due and payable in
advance on the date of the issuance thereof. The Agent will pay to
each Bank, promptly after receiving any payment in respect of
letter of credit fee referred to in this clause (v), an amount
equal to the product of such Bank’s Revolving Percentage times the
amount of such fees. The Borrower shall also pay to Agent at the
Principal Office for the account of the Agent an issuance fee of
0.125% of the face amount of the applicable Letter of Credit. All
fees hereunder shall be computed on the basis of a year of 360 days
and paid for the actual number of days elapsed.

 

 
		
	 	(vii)     The issuance by the Agent of each Letter of Credit shall, in
addition to the discretionary nature of this facility, be subject
to the conditions precedent that the Borrower shall have executed and delivered such applications and
other instruments and agreements relating to such Letter of Credit
as the Agent shall have reasonably requested and are not
inconsistent with the terms of this Agreement (the “Letter of
Credit Agreements”). In the event of a conflict between the terms
of this Agreement and the terms of any Letter of Credit Agreement
(including the charging of any fees other than normal and customary
reimbursable expenses), the terms hereof shall control.
	 
	 	(viii)     In the event that any Letter of Credit remains outstanding
after the Termination Date, the Borrower shall deliver, prior to
the Termination Date, cash collateral to be held and applied in
accordance with the terms of Section 10.3.
	 
	 	(ix)     Upon occurrence and during continuance of an Event of Default,
the participating interest of the Banks in the Letters of Credit
and Letter of Credit Obligations shall be adjusted as provided in
Section 2.7(c), and upon such adjustment, the funding of such
adjusted participating interests shall be made as provided in
Section 2.7(g).

		
	 	(d) Indemnification; Release. Borrower hereby indemnifies and holds
harmless the Agent and each Bank from and against any and all claims and
damages, losses, liabilities, costs or expenses which the Agent or such
Bank may incur (or which may be claimed against the Agent or such Bank by
any Person whatsoever), regardless of whether caused in whole or in part
by the negligence of any of the indemnified parties, in connection with
the execution and delivery of any Letter of Credit or transfer of or
payment or failure to pay under any Letter of Credit; provided that the
Borrower shall not be required to indemnify any party seeking
indemnification for any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent, caused by (i) the willful
misconduct or gross negligence of the party seeking indemnification, or
(ii) by the failure by the party seeking indemnification to pay under any
Letter of Credit after the presentation to it of a request required to be
paid under applicable law.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00058-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00058-of-00352.parquet"}]]