Exhibit 10.2

 

Execution Version

 

INTREPID POTASH, INC.

 

FIRST AMENDMENT TO

NOTE PURCHASE AGREEMENT

 

$60,000,000 3.23% Senior Notes, Series A, due April 16, 2020

$45,000,000 4.13% Senior Notes, Series B, due April 14, 2023

$45,000,000 4.28% Senior Notes, Series C, due April 16, 2025

 

Dated as of January 15, 2016

 

To the Holders of the Senior Notes

of Intrepid Potash, Inc.

Named in the Attached Schedule I

 

Ladies and Gentlemen:

 

Reference is made to the Note Purchase Agreement dated as of August 28, 2012
(the “Note Purchase Agreement”) among Intrepid Potash, Inc. (the “Company”) and
you, pursuant to which the Company issued (i) $60,000,000 aggregate principal
amount of its 3.23% Senior Notes, Series A, due April 16, 2020; (ii) $45,000,000
aggregate principal amount of its 4.13% Senior Notes, Series B, due April 14,
2023; and (iii) $45,000,000 aggregate principal amount of its 4.28% Senior
Notes, Series C, due April 16, 2025 (collectively, the “Notes”). You are
referred to herein individually as a “Holder” and collectively as the “Holders.”
Capitalized terms used and not otherwise defined herein have the meanings
ascribed to them in the Note Purchase Agreement, as amended by this First
Amendment to Note Purchase Agreement (this “First Amendment”).

 

The Company has requested an amendment to Sections 7.1, 10.2, and 17.1 of the
Note Purchase Agreement; the inclusion of a new Section 9.9 to the Note Purchase
Agreement; the modification of definitions for “Consolidated Maintenance Capital
Expenditures,” “Default Rate,” and “Leverage Ratio” in Schedule B of the Note
Purchase Agreement; and the addition of new definitions for “Incremental
Interest” and “Unrestricted Cash” to Schedule B of the Note Purchase Agreement.
You have agreed to such amendments on the terms and conditions set forth herein.

 

In consideration of the premises and for good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the Company and the Holders
agree as follows:

 

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1.                                      AMENDMENT OF NOTE PURCHASE AGREEMENT

 

1.1.                            Amendment to Section 7.1.  Section 7.1 is
amended as follows:

 

(a)                                 Subsection (f) is amended by deleting the
word “and” following the semicolon.

 

(b)                                 Subsection (g) is amended by deleting the
period from the end of the subsection and replacing it with “; and”.

 

(c)                                  A new subsection (h) is added to the Note
Purchase Agreement to read in its entirety as follows:

 

“(h)                           Ratings Information — promptly, and in any event
within thirty (30) days of receipt thereof, copies of the then-current rating
for such calendar year obtained pursuant to Section 9.9.”

 

1.2.                            Addition of Section 9.9.  Section 9.9 is added
to the Note Purchase Agreement to read in its entirety as follows:

 

“Section 9.9.                          Maintenance of Ratings.

 

The Company shall obtain a rating each calendar year for the Notes from any
nationally recognized rating agency selected by the Company and accepted by the
SVO for rating corporate debt, and the Company shall maintain such rating.”

 

1.3.                            Amendment to Section 10.2. Section 10.2 is
amended and restated to read as follows:

 

“The Company will not permit the Leverage Ratio, as of the end of each of its
fiscal quarters, to be greater than 3.50 to 1.00; as such Leverage Ratio may be
adjusted pursuant to Section 10.10 below; provided, however, that
notwithstanding any such adjustment, the Company will not permit the Leverage
Ratio as of the end of any fiscal quarter to be greater than 3.50 to 1.00 (the
“Maximum Leverage Ratio”). In addition to the foregoing, if the Leverage Ratio
exceeds 2.25 to 1.00 as of the last day of any fiscal quarter pursuant to the
terms of this Section 10.2, as evidenced by an Officer’s Certificate delivered
pursuant to Section 7.2(a), the interest rate payable on the Notes shall be
increased by 0.25% (the “Incremental Interest”) for a period of time determined
as follows: (a) such Incremental Interest shall begin to accrue on the first day
of the fiscal quarter immediately following the fiscal period in respect of
which such Officer’s Certificate was delivered, and (b) shall continue to accrue
until the Company has provided an Officer’s Certificate pursuant to
7.2(a) demonstrating that, as of the last day of the fiscal period in respect of
which such Certificate is delivered, the Leverage Ratio is not more than 2.25 to
1.00, and in the event such Officer’s Certificate is delivered, the Incremental
Interest shall cease to accrue as of the last

 

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day of the fiscal period in respect of which such Certificate is delivered. For
the avoidance of doubt, if the Leverage Ratio exceeds 2.25 to 1.00 as of the
last day of a fiscal quarter, Incremental Interest shall accrue commencing on
the first day of the subsequent fiscal quarter regardless of whether an
Officer’s Certificate is timely delivered pursuant to Section 7.2(a).”

 

1.4.                            Amendment to Section 17.1. Section 17.1(b)(i) is
amended and restated to read as follows:

 

“(i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest, other than Incremental Interest, or of the Make-Whole Amount on, the
Notes,”

 

1.5.                            Amendments to Schedule B.

 

(a)                                 The following definitions set forth in
Schedule B are hereby amended and restated in their entirety as follows:

 

“Consolidated Maintenance Capital Expenditures” means, with reference to any
period, the maintenance Capital Expenditures of the Company and its Subsidiaries
calculated on a consolidated basis for such period, which, for purposes of any
calculation under Section 10.1, shall equal $20,000,000 per any four fiscal
quarter period.

 

“Default Rate” means that rate of interest that is the greater of (i) 2% per
annum above the then-effective rate of interest of the Notes (such effective
rate of interest to include any Incremental Interest pursuant to Section 10.2)
or (ii) 2% over the rate of interest publicly announced by U.S. Bank National
Association in New York City as its “base” or “prime” rate.

 

“Leverage Ratio” means, as of any date of calculation, the ratio of (i) the
excess of Consolidated Funded Indebtedness outstanding on such date over
Unrestricted Cash on such date in an amount not to exceed $75,000,000 to
(ii) Consolidated EBITDA for the Company’s then most-recently ended four fiscal
quarters for which financial statements have been delivered pursuant to
Section 7.1.

 

(b)                                 The following definitions are added to
Schedule B in the appropriate alphabetical order:

 

“Incremental Interest” is defined in Section 10.2.

 

“Unrestricted Cash” means, as of any date of determination, that portion of the
Company’s and its Subsidiaries’ aggregate cash and Cash Equivalent Investments
that is not encumbered by or subject to any Lien (including, without

 

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limitation, any Lien permitted hereunder, other than (a) Liens, if any, securing
Notes and (b) bankers’ liens), setoff (other than ordinary course setoff rights
of a depository bank arising under a bank depository agreement for customary
fees, charges and other account-related expenses due to such depository bank
thereunder), counterclaim, recoupment, defense or other right in favor of any
Person.

 

2.                                      REAFFIRMATION; REPRESENTATION AND
WARRANTIES

 

2.1.                            Reaffirmation of Note Purchase Agreement.  The
Company reaffirms its agreement to comply with each of the covenants, agreements
and other provisions of the Note Purchase Agreement and the Notes, as amended by
this First Amendment.

 

2.2.                            No Default or Event of Default.  As of the date
hereof and after giving effect to this First Amendment, there will exist no
Default or Event of Default.

 

2.3.                            Authorization.  The execution, delivery and
performance by the Company of this First Amendment has been duly authorized by
all necessary corporate action and, except as provided herein, does not require
any registration with, consent or approval of, notice to or action by, any
Person (including any Governmental Authority) in order to be effective and
enforceable. The Note Purchase Agreement and this First Amendment each
constitute the legal, valid, and binding obligations of the Company, enforceable
in accordance with their respective terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

3.                                      EFFECTIVE DATE

 

This First Amendment shall be deemed to have been effective as of the date
hereof upon the satisfaction of the following conditions:

 

3.1.                            Consent of Holders to First Amendment.  The
Holders of at least 51% of the aggregate principal amount of the Notes
outstanding shall have executed this First Amendment and the Holders shall have
received a counterpart of this First Amendment duly executed by the Company.

 

3.2.                            Credit Agreement.  The Company shall have
entered into an amendment to the Credit Agreement in substance similar to the
amendments set forth herein and otherwise on terms reasonably satisfactory to
the Required Holders.

 

3.3.                            Confirmation of Subsidiary Guaranty. The Holders
shall have received an executed copy of the Consent and Reaffirmation attached
hereto as Annex A from each Subsidiary Guarantor.

 

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3.4.                            Amendment Fee. Each Holder shall have received
payment of an amendment fee equal to 0.15% of the principal amount of the
outstanding Notes held by such Holder.

 

3.5.                            Expenses.  The Company shall have paid all
reasonable and documented fees and expenses of Foley & Lardner LLP, special
counsel to the Holders, to the extent invoiced.

 

Each Holder, by delivering its signature page to this Amendment, shall be deemed
to have acknowledged and agreed that Section 10.10 of the Note Purchase
Agreement shall not apply to the changes to the Financial Covenants effected by
the amendment to the Credit Agreement described in Section 3.2 above.

 

4.                                      MISCELLANEOUS

 

4.1.                            Ratification.  Except as amended hereby, the
Note Purchase Agreement remains in full force and effect and is ratified,
approved and confirmed in all respects as of the date hereof.

 

4.2.                            Reference to and Effect on the Note Purchase
Agreement.  Upon the effectiveness of this First Amendment, each reference in
the Note Purchase Agreement and in other documents describing or referencing the
Note Purchase Agreement to the “Agreement,” “Note Purchase Agreement,”
“hereunder,” “hereof,” “herein,” or words of like import referring to the Note
Purchase Agreement shall mean and be a reference to the Note Purchase Agreement,
as amended hereby.

 

4.3.                            Binding Effect.  This First Amendment shall be
binding upon and inure to the benefit of the respective successors and assigns
of the parties hereto.

 

4.4.                            Governing Law.  This First Amendment shall be
governed by and construed in accordance with New York law, excluding
choice-of-law principles of the law of such state that would require the
application of the laws of a jurisdiction other than such state.

 

4.5.                            Counterparts.  This First Amendment may be
executed in any number of counterparts, each executed counterpart constituting
an original, but altogether only one instrument.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the Company and the Holders have caused this First Amendment
to be executed and delivered by their respective officer or officers thereunto
duly authorized.

 

 

 

INTREPID POTASH, INC.

 

 

 

 

 

 

By:

/s/ Brian D. Frantz

 

Name:

Brian D. Frantz

 

Title:

Senior Vice President and

 

 

Chief Accounting Officer

 

S-1

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TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA

 

 

By:

/s/ Laura Parrott

 

Name:

Laura Parrott

 

Title:

Senior Director

 

 

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THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA

 

 

By:

/s/ Brian Keating

 

Name:

Brian Keating

 

Title:

Managing Director

 

 

S-3

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COBANK, ACB

 

 

By:

/s/ Kristina Jensen

 

Name:

Kristina Jensen

 

Title:

Vice President

 

 

S-4

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AGFIRST FARM CREDIT BANK

 

 

By:

/s/ Bruce B. Fortner

 

Name:

Bruce B. Fortner

 

Title:

Vice President

 

 

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FARM CREDIT BANK OF TEXAS

 

 

By:

/s/ Luis M. H. Requejo

 

Name:

Luis M. H. Requejo

 

Title:

Director Capital Markets

 

 

S-6

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GREENSTONE FARM CREDIT SERVICES, ACA/FLCA

 

 

By:

/s/ Curtis Flammini

 

Name:

Curtis Flammini

 

Title:

Vice President

 

 

S-7

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1ST FARM CREDIT SERVICES, PCA

 

 

By:

/s/ Corey J. Waldinger

 

Name:

Corey J. Waldinger

 

Title:

Vice President, Capital Markets Group

 

 

S-8

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FARM CREDIT SERVICES OF AMERICA, PCA

 

 

By:

/s/ Steven L. Moore

 

Name:

Steven L. Moore

 

Title:

Vice President

 

 

S-9

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ANNEX A

 

FORM OF CONSENT AND REAFFIRMATION

 

Each of the undersigned hereby acknowledges receipt of a copy of the foregoing
First Amendment to Note Purchase Agreement (the “First Amendment”) dated as of
January 15, 2016, among Intrepid Potash, Inc. (the “Company”) and certain of the
Holders party to the Note Purchase Agreement, dated as of August 28, 2012 (as
amended, supplemented or otherwise modified from time to time, the “Note
Purchase Agreement”). Capitalized terms used in this Consent and Reaffirmation
and not defined herein shall have the meanings given to them in the Note
Purchase Agreement. Without in any way establishing a course of dealing by the
Holders, each of the undersigned consents to the First Amendment and reaffirms
the terms and conditions of the Subsidiary Guaranty executed by it and
acknowledges and agrees that such Subsidiary Guaranty executed by the
undersigned in connection with the Note Purchase Agreement remains in full force
and effect and is hereby reaffirmed, ratified, and confirmed. All references to
the Note Purchase Agreement contained in the above-referenced document shall be
a reference to the Note Purchase Agreement as so modified by the First Amendment
and as the same may from time to time hereafter be amended, modified, or
restated.

 

Dated: January 15, 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 written above.

 

 

 

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

 

[Signature Page to Consent and Reaffirmation]

 

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SCHEDULE I

 

Holder

 

Aggregate
Principal
Amount of
Series A Notes
Outstanding

 

Aggregate
Principal
Amount of
Series B Notes
Outstanding

 

Aggregate
Principal
Amount of
Series C Notes
Outstanding

 

Teachers Insurance and Annuity Association of America

 

$

0

 

$

0

 

$

37,500,000

 

The Guardian Life Insurance Company of America

 

$

0

 

$

23,500,000

 

$

7,500,000

 

CoBank, ACB

 

$

25,000,000

 

$

0

 

$

0

 

AgFirst Farm Credit Bank

 

$

15,000,000

 

$

0

 

$

0

 

Farm Credit Bank of Texas

 

$

10,000,000

 

$

0

 

$

0

 

Greenstone Farm Credit Services, ACA/FLCA

 

$

10,000,000

 

$

7,000,000

 

$

0

 

1st Farm Credit Services, PCA

 

$

0

 

$

7,500,000

 

$

0

 

Farm Credit Services of America, PCA

 

$

0

 

$

7,000,000

 

$

0

 

Totals

 

$

60,000,000

 

$

45,000,000

 

$

45,000,000

 

 

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