Exhibit 10.2

 

EXECUTION COPY

 

WAIVER AND AMENDMENT NO. 7 TO CREDIT AGREEMENT

 

THIS WAIVER AND AMENDMENT NO. 7 TO CREDIT AGREEMENT (this “Waiver and Amendment
No. 7”) is made as of July 29, 2016 (the “Effective Date”) by and among INTREPID
POTASH, INC. (the “Borrower”), each of the Lenders party hereto and U.S. BANK
NATIONAL ASSOCIATION, as Administrative Agent (in such capacity, the
“Administrative Agent”), under that certain Credit Agreement, dated as of
August 3, 2011 (as amended, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among the Borrower, the Lenders party
thereto, and the Administrative Agent.  Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.

 

WHEREAS, Section 6.1(a) of the Credit Agreement requires the Borrower to deliver
to the Administrative Agent audited annual financial statements without any
going concern modifier;

 

WHEREAS, the Borrower has informed the Administrative Agent that it will not be
able to deliver such financials for fiscal year 2015 without certain
modifications to the Credit Agreement;

 

WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders waive the requirement to deliver such 2015 annual financials without any
going concern modifier until a date no later than September 30, 2016 in order to
provide time to discuss certain Credit Agreement modifications;

 

WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders waive compliance with Sections 6.21(a) and (b) for the quarters ended
March 31, 2016 and June 30, 2016 until a date no later than September 30, 2016;

 

WHEREAS, the Borrower wishes to reduce the Aggregate Commitment to $1,000,000,
and to make certain other modifications to the Loan Documents; and

 

WHEREAS, the Administrative Agent and the Lenders are willing to provide such
waiver on the terms and conditions set forth below, and the Borrower, the
Administrative Agent and the Lenders are willing to amend the Credit Agreement
on the terms and conditions set forth below;

 

NOW, THEREFORE, in consideration of the premises set forth above, the terms and
conditions set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Borrower, the
Lenders and the Administrative Agent hereby agree as follows.

 

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ARTICLE I — WAIVER AND AMENDMENT.

 

1.1          Waiver.  Effective as of the Effective Date but subject to the
satisfaction of the conditions precedent set forth in Article III below, the
Administrative Agent and the Lenders agree to waive, until the earlier of
(x) the date on which the waivers provided under the July 2016 Note Waiver (as
defined in Article III below) expire, terminate or otherwise are of no force and
effect and (y) September 30, 2016 (the “Waiver Expiry Date”), the requirement
that the Borrower deliver audited annual financial statements for fiscal year
2015 without any going concern modifier and agree that the failure to deliver
audited annual financial statements for fiscal year 2015 without a going concern
modifier (or the existence of audited annual financial statements for fiscal
year 2015 with a going concern modifier) shall not constitute a Default or Event
of Default until the Waiver Expiry Date.  An immediate Event of Default shall
occur under the Credit Agreement if such financials are not delivered by the
Waiver Expiry Date.  In addition, subject to the remainder hereof, the
Administrative Agent and the Lenders agree to waive, until the Waiver Expiry
Date, the Borrower’s compliance with Sections 6.21(a) and (b) of the Credit
Agreement for the quarters ended March 31, 2016 and June 30, 2016, and agree
that the failure to comply with such financial covenants for the fiscal quarters
ended March 31, 2016 and June 30, 2016 shall not constitute a Default or Event
of Default until the Waiver Expiry Date; provided, however, that if the Leverage
Ratio as of the end of any quarter exceeds 10.70 to 1.00, or the Fixed Charge
Coverage Ratio as set forth in Section 6.21(a) of the Credit Agreement is less
than (1.50) to 1.00 as of the end of any quarter, then the waiver provided
hereby shall be null, void and of no further force and effect; provided, further
that the Borrower shall report on the Leverage Ratio and the Fixed Charge
Coverage Ratio as and when required by the Credit Agreement.  The foregoing
waivers do not and shall not apply to any other Default or Event of Default that
may currently be outstanding, and shall not apply to any future Default or Event
of Default.  The Borrower, on its behalf and on behalf of its Subsidiaries and
Affiliates, agrees that the foregoing waivers do not constitute or represent any
agreement or commitment by the Administrative Agent or any Lender to provide any
other modifications to the Credit Agreement or any other Loan Document.  The
Borrower agrees and confirms that it will promptly inform the Administrative
Agent of any extension of the waivers provided under the July 2016 Note Waiver
or the expiry or termination thereof.

 

1.2          Amendments.  Effective as of the Effective Date but subject to the
satisfaction of the conditions precedent set forth in Article III below, the
Borrower, the Administrative Agent and the Lenders agree as follows:

 

a.             The Aggregate Commitment is hereby permanently reduced from
$8,000,000 to $1,000,000. Each Lender’s Commitment shall be reduced ratably as a
result of such permanent reduction in the Aggregate Commitment.

 

b.             Only Letters of Credit may be issued on and after May 6, 2016. 
No Loans or other extensions of credit shall be made on and after such date. 
Outstanding LC Obligations shall not exceed $1,000,000.  Each of U.S. Bank
National Association and Bank of Montreal shall be the LC Issuer on and after
such date.  U.S. Bank National Association shall be the LC Issuer solely for
those Letters of Credit issued prior to such date (with the understanding that

 

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only one such Letter of Credit has been issued).  If any Letter of Credit is
issued on or after July 29, 2016, then all outstanding Letters of Credit shall
be cash collateralized on the issuance date therefor, on terms and conditions
reasonably acceptable to the LC Issuers, in an amount equal to 105% of the
aggregate face amount thereof.

 

c.             The definition of “Facility Termination Date” is amended in its
entirety as follows:

 

“Facility Termination Date” means the earliest of (x) September 30, 2016,
(y) any date on which the Aggregate Commitment is reduced to zero or otherwise
terminated, in each case pursuant to the terms hereof, and (z) the effective
date for the bank credit facility disclosed by the Borrower to the Lenders on or
prior to May 6, 2016.

 

All provisions of the Credit Agreement and the other Loan Documents are hereby
amended to give effect to the foregoing, notwithstanding any notice requirements
in respect thereof.

 

ARTICLE II- REPRESENTATIONS AND WARRANTIES

 

The Borrower hereby represents and warrants as follows:

 

2.1          This Waiver and Amendment No. 7 and the Credit Agreement, as
modified hereby, constitute legal, valid and binding obligations of the Borrower
and are enforceable against the Borrower in accordance with their terms, except
as enforceability may be limited by bankruptcy, insolvency, or similar laws
affecting the enforcement of creditors’ rights generally.

 

2.2          As of the date hereof and after giving effect to the terms of this
Waiver and Amendment No. 7, (i) no Default or Event of Default shall have
occurred and be continuing and (ii) the representations and warranties of the
Borrower set forth in the Credit Agreement, as amended hereby, are (x) with
respect to any representations or warranties that contain a materiality
qualifier, true and correct in all respects as of the date hereof and (y) with
respect to any representations or warranties that do not contain a materiality
qualifier, true and correct in all material respects as of the date hereof,
except in each case to the extent any such representation or warranty is stated
to relate solely to an earlier date, in which case such representation or
warranty shall have been true and correct on and as of such earlier date.

 

ARTICLE III- CONDITIONS PRECEDENT

 

This Waiver and Amendment No. 7 shall become effective on the Effective Date,
provided, however, that the effectiveness of this Waiver and Amendment No. 7 is
subject to:

 

1.              The Administrative Agent’s receipt of counterparts of (i) this
Waiver and Amendment No. 7 duly executed by the Borrower, the Administrative
Agent and the Lenders required to approve this Waiver and Amendment No. 7 and
(ii) a Consent and Reaffirmation in the form of Annex A hereto duly executed by
each Guarantor.

 

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2.          The Administrative Agent shall have received from the Borrower a
non-refundable work fee of $5,000 for each Lender that delivers its executed
signature page hereto to the Administrative Agent by the day and time designated
for such delivery by the Administrative Agent (with the Administrative Agent
determining in its sole discretion whether any such delivery was made on a
timely basis).

 

3.          Payment of all fees and expenses then due and payable by the
Borrower pursuant to Section 4.1 below.

 

4.          The Administrative Agent shall have received a fully executed and
effective waiver or waiver and amendment, in form and substance acceptable to
it, to the Borrower’s Note Purchase Agreement dated as of August 28, 2012,
which, among other things, waives compliance with financial covenants for the
quarters ended March 31, 2016 and June 30, 2016 until September 30, 2016 or
later (the “July 2016 Note Waiver”).

 

5.          The Administrative Agent shall have received the Borrower’s draft
internally prepared financials for the quarter ended June 30, 2016.

 

ARTICLE IV- GENERAL

 

4.1          Expenses; Future Work Fees.  The Borrower agrees to reimburse the
Administrative Agent upon demand for all reasonable and documented third party
out-of-pocket expenses paid or incurred by the Administrative Agent, including,
without limitation, reasonable fees, charges and disbursements of outside
counsel to the Administrative Agent, in connection with preparation, negotiation
and execution of this Waiver and Amendment No. 7 and any other document required
to be furnished herewith, including, without limitation, all written invoices in
respect of the foregoing delivered to the Borrower prior to the Effective Date. 
The Borrower acknowledges and agrees that any extension of the Facility
Termination Date subsequent to the date hereof shall require its payment of a
$10,000 work fee to each Lender.  No Lender has agreed or committed to any such
future extension, and any such extension shall be approved or declined by each
Lender in its sole discretion.  Such work fee shall be in addition to any other
fees required by the Lenders at the time of any such extension.

 

4.2          Counterparts.  This Waiver and Amendment No. 7 may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  Delivery of an executed counterpart of a
signature page of this Waiver and Amendment No. 7 by telecopy or other
electronic imaging methods shall be effective as delivery of a manually executed
counterpart of this Waiver and Amendment No. 7.

 

4.3          Severability.  Any provision in this Waiver and Amendment No. 7
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of this Waiver and Amendment No. 7
are declared to be severable.

 

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4.4          Governing Law.  This Waiver and Amendment No. 7 shall be construed
in accordance with the internal laws (without regard to the conflict of law
provisions) of the State of Colorado, but giving effect to federal laws
applicable to national banks.

 

4.5          Successors; Enforceability.  The terms and provisions of this
Waiver and Amendment No. 7 shall be binding upon the Borrower, the
Administrative Agent and the Lenders and their respective successors and
assigns, and shall inure to the benefit of the Borrower, the Administrative
Agent and the Lenders and the successors and assigns of the Administrative Agent
and the Lenders.

 

4.6          Reference to and Effect on the Credit Agreement.

 

a.             Upon the effectiveness of this Waiver and Amendment No. 7, on and
after the date hereof, each reference in the Credit Agreement to “this
Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean
and be a reference to the Credit Agreement, as amended and modified hereby.

 

b.             Subject to the waiver and amendment provided hereby, the Credit
Agreement and all other documents, instruments and agreements executed and/or
delivered in connection therewith (including, without limitation, all of the
Loan Documents) shall remain in full force and effect and are hereby ratified
and confirmed.

 

c.             Except as specifically set forth herein, the execution, delivery
and effectiveness of this Waiver and Amendment No. 7 shall not operate as a
waiver of any right, power or remedy of the Administrative Agent or the Lenders,
nor constitute a waiver of any provision of the Credit Agreement or any other
documents, instruments and agreements executed and/or delivered in connection
therewith.

 

4.7          Headings.  Section headings in this Waiver and Amendment No. 7 are
for convenience of reference only, and shall not govern the interpretation of
any of the provisions of this Waiver and Amendment No. 7.

 

4.8          Release. In further consideration of the execution by the
Administrative Agent and the Lenders of this Waiver and Amendment No. 7, the
Borrower, on behalf of itself and each of its Subsidiaries Affiliates, and all
of the successors and assigns of each of the foregoing (collectively, the
“Releasors”), hereby completely, voluntarily, knowingly, and unconditionally
releases and forever discharges the Administrative Agent, each of the Lenders,
each of their advisors, professionals and employees, each affiliate of the
foregoing and all of their respective successors and assigns (collectively, the
“Releasees”), from any and all claims, actions, suits, and other liabilities,
including, without limitation, any so-called “lender liability” claims or
defenses (collectively, “Claims”), whether arising in law or in equity, which
any of the Releasors ever had, now has or hereinafter can, shall or may have
against any of the Releasees for, upon or by reason of any matter, cause or
thing whatsoever from time to time occurred on or prior to the date hereof, in
any way concerning, relating to, or arising from (i) any of the Releasors,
(ii) the Obligations, (iii) the Credit Agreement or any of the other Loan
Documents, (iv) the financial condition, business operations, business plans,
prospects or creditworthiness of the Borrower,

 

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and (v) the negotiation, documentation and execution of this Waiver and
Amendment No. 7 and any documents relating hereto.  The Borrower, on behalf of
each of the Releasors, hereby acknowledges that they collectively have been
advised by legal counsel of the meaning and consequences of this release.

 

(signature pages follow)

 

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver and Amendment
No. 7 to be executed by their respective officers thereunto duly authorized as
of the date first written above.

 

 

INTREPID POTASH, INC.

 

 

 

 

 

By:

/s/ Brian D. Frantz

 

Name:

Brian D. Frantz

 

Title:

Senior Vice President and
Chief Accounting Officer

 

Signature Page to

Waiver and Amendment No. 7

to

Intrepid Potash Credit Agreement

 

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U.S. BANK NATIONAL ASSOCIATION,

as a Lender, as LC Issuer and as Administrative Agent

 

 

 

 

 

By:

/s/ William J. Umscheid

 

Name:

William J. Umscheid

 

Title:

Senior Vice President

 

Signature Page to

Waiver and Amendment No. 7

to

Intrepid Potash Credit Agreement

 

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WELLS FARGO BANK, N.A., as a Lender

 

 

 

 

 

By:

/s/ Peter W. Clark

 

Name: 

Peter W. Clark

 

Title:

Senior Vice President

 

Signature Page to

Waiver and Amendment No. 7

to

Intrepid Potash Credit Agreement

 

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BANK OF MONTREAL, as a Lender

 

 

 

 

 

By:

/s/ C. Scott Place

 

Name:

C. Scott Place

 

Title:

Director

 

Signature Page to

Waiver and Amendment No. 7

to

Intrepid Potash Credit Agreement

 

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BANK OF AMERICA, N.A., as a Lender

 

 

 

 

 

By:

/s/ Daniel J. Ricke

 

Name:

Daniel J. Ricke

 

Title:

Vice President

 

Signature Page to

Waiver and Amendment No. 7

to

Intrepid Potash Credit Agreement

 

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AGFIRST FARM CREDIT BANK, as a Lender

 

 

 

 

 

By:

/s/ Mike C. Hawkins

 

Name:

Mike C. Hawkins

 

Title:

Assistant Vice President

 

Signature Page to

Waiver and Amendment No. 7

to

Intrepid Potash Credit Agreement

 

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UNITED FCS PCA

 

D/B/A FCS COMMERCIAL FINANCE GROUP, as a Lender

 

 

 

 

 

By:

/s/ Daniel J. Best

 

Name:

Daniel J. Best

 

Title:

Vice President

 

Signature Page to

Waiver and Amendment No. 7

to

Intrepid Potash Credit Agreement

 

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BANK OF THE WEST, as a Lender

 

 

 

 

 

By:

/s/ Diane Miller

 

Name:

Diane Miller

 

Title:

Vice President

 

Signature Page to

Waiver and Amendment No. 7

to

Intrepid Potash Credit Agreement

 

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JPMORGAN CHASE BANK, N.A., as a Lender

 

 

 

 

 

By:

/s/ Laura Woodward

 

Name:

Laura Woodward

 

Title:

Vice President

 

Signature Page to

Waiver and Amendment No. 7

to

Intrepid Potash Credit Agreement

 

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Annex A

 

FORM OF CONSENT AND REAFFIRMATION

 

Each of the undersigned hereby acknowledges receipt of a copy of the foregoing
Waiver and Amendment No. 7 to Credit Agreement (the “Waiver and Amendment
No. 7”)  dated as of July 29, 2016 by and among INTREPID POTASH, INC. (the
“Borrower”), each of the Lenders party to the Credit Agreement (defined below)
and U.S. BANK NATIONAL ASSOCIATION, as Administrative Agent (in such capacity,
the “Administrative Agent”), under that certain Credit Agreement, dated as of
August 3, 2011 (as amended, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among the Borrower, the Lenders party
thereto, and the Administrative Agent.  Capitalized terms used in this Consent
and Reaffirmation and not defined herein shall have the meanings given to them
in the Credit Agreement.  Without in any way establishing a course of dealing by
the Administrative Agent or any Lender, each of the undersigned consents to the
Waiver and Amendment No. 7 and reaffirms the terms and conditions of the
Guaranty and any other Loan Document executed by it and acknowledges and agrees
that such Guaranty and each and every such Loan Document executed by the
undersigned in connection with the Credit Agreement remains in full force and
effect and is hereby reaffirmed, ratified and confirmed.  Each of the
undersigned also agrees to join in and be bound by all of the terms and
provisions of the release contained in Section 4.8 of Waiver and Amendment
No. 7.  All references to the Credit Agreement contained in the above referenced
documents shall be a reference to the Credit Agreement as so modified by the
Waiver and Amendment No. 7 and as the same may from time to time hereafter be
amended, modified or restated.

 

Dated: July 29, 2016

 

(signature page follows)

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Consent and
Reaffirmation to be executed by its officers thereunto duly authorized, as of
the date first above written.

 

 

INTREPID POTASH — MOAB, LLC

 

 

 

By: INTREPID POTASH, INC., its Manager

 

 

 

 

 

By:

/s/ Brian D. Frantz

 

Name:

Brian D. Frantz

 

Title:

Senior Vice President and

 

 

Chief Accounting Officer

 

 

 

INTREPID POTASH — WENDOVER, LLC

 

 

 

By: INTREPID POTASH, INC., its Manager

 

 

 

 

 

By:

/s/ Brian D. Frantz

 

Name:

Brian D. Frantz

 

Title:

Senior Vice President and

 

 

Chief Accounting Officer

 

 

 

 

 

INTREPID POTASH — NEW MEXICO, LLC

 

 

 

By: INTREPID POTASH, INC., its Manager

 

 

 

 

 

By:

/s/ Brian D. Frantz

 

Name:

Brian D. Frantz

 

Title:

Senior Vice President and

 

 

Chief Accounting Officer

 

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