Exhibit 10.2

 

REAFFIRMATION OF LOAN DOCUMENTS

 

THIS REAFFIRMATION OF LOAN DOCUMENTS (“Reaffirmation”), dated as of December 3,
2013, is executed in favor of The Karlsson Group, Inc., an Arizona corporation
(“Karlsson”), by each of Prospect Global Resources, Inc., a Delaware corporation
(“Prospect DE”), Prospect Global Resources, Inc., a Nevada corporation
(“Parent”), Apache County Land & Ranch, LLC, a Nevada limited liability
(“Apache”) and American West Potash, LLC, a Delaware limited liability company
(“AWP” and collectively with Prospect DE, Parent and Apache the “Prospect
Parties” and each a “Prospect Party”) with reference to the following facts:

 

A.                                    Prospect DE has entered into and delivered
to the order of Karlsson that certain Senior First Priority Secured Promissory
Note, dated as of August 1, 2012 (such Note, as so amended and as the same may
hereafter be amended, modified, extended and/or restated, being hereinafter
referred to as the “Note”).  Capitalized terms used herein but not otherwise
defined herein shall have the meanings ascribed to them in the Note.

 

B.                                    Pursuant to the Note, Karlsson has made
certain extensions of credit (the “Loan”) to Prospect DE.

 

C.                                    The Loan is secured by, among other
instruments, (i) that certain Deed of Trust, Security Agreement, Assignment of
Production and Proceeds, Fixture Filing and Financing Statement dated as of
August 1, 2012, executed by AWP, as trustor, in favor of and for the benefit of
Karlsson, as beneficiary, and recorded August 1, 2012, as Instrument
No. 2012-004076 in the Official Records of Apache County, Arizona (the “AWP Deed
of Trust”) with respect to the property described therein (the “Premises”),
(ii) that certain Security Agreement, dated as of August 1, 2012, executed by
Prospect DE and AWP in favor of and for the benefit of Karlsson (the “Security
Agreement”), (iii) that certain Membership Interest Pledge Agreement between
Prospect DE and Karlsson, dated as of May 30, 2012 (the “AWP Pledge Agreement”);
(iv) that certain Membership Interest Pledge Agreement between AWP and Karlsson,
dated as of January 28, 2013 (the “Apache Pledge Agreement”); and (v) each of
the Collateral Assignment of Mineral Leases, the Collateral Assignment of Mining
Permits, and the Collateral Assignments of Royalty Agreements, each between AWP
and Karlsson and each dated as of August 1, 2012 (collectively, the “Collateral
Assignments”).  The Loan and all of Prospect DE’s other obligations under the
Loan Documents (as defined below) are guaranteed by that certain Unconditional
Guaranty dated as of August 1, 2012 executed by AWP in favor of and for the
benefit of Karlsson (the “Guaranty”, and together with the AWP Deed of Trust,
the Security Agreement, the Pledge Agreement and the Collateral Assignments and
all financing statements, fixture filings, patent, trademark and copyright
filings and other documents and agreements relating to the collateral for the
Loan and made or delivered pursuant to the Note or any other Loan Document, the
“Collateral Documents”).  The Note, the Collateral Documents and all other
documents, agreements and instruments delivered to Karlsson under or in
connection with the Note are collectively referred to herein as the “Loan
Documents.

 

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D.                                    The Loan Documents include, without
limitation, that certain Third Extension Agreement among the Prospect Parties
and Karlsson dated as of September 13, 2013 (the “Third Extension Agreement”).

 

E.                                     Concurrently herewith, Karlsson and
Prospect DE are entering into a Sixth Amendment to Senior First Priority Secured
Promissory Note (the “Sixth Amendment”) pursuant to which a payment date under
the Note is being extended to December 10, 2013.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual promises and
other agreements hereinafter contained, Karlsson and the Prospect Parties hereby
agree as follows:

 

SECTION 1. Defined Terms.  All initially capitalized terms used without
definition in this Reaffirmation shall have the respective meanings assigned to
them in the Note.

 

SECTION 2.  Reaffirmation.  Each Prospect Party hereby (i) acknowledges and
affirms for the benefit of Karlsson that it has received and reviewed a copy of,
and hereby consents to the execution of, the Sixth Amendment; (ii) makes in
favor of Karlsson, as of the date of this Reaffirmation, each of the
representations and warranties set forth in Section 4 of the Third Extension
Agreement and the acknowledgments set forth in Sections 1(d), 2 and 17 of the
Third Extension Agreement; (iii) reaffirms as of the date hereof each of its
obligations under its respective Collateral Document(s) and under any other Loan
Document to which such Prospect Party is a party, as the same have heretofore
been, and may from time to time hereafter be, supplemented, amended, modified,
restated or extended; (iv) reaffirms each of the waivers set forth in the Third
Extension Agreement (including, but not limited to in Sections 1(f), 9 and 14
thereof); (v) reaffirms, renews, remakes and re-executes as of the date hereof
its general release in, and in the form set forth in, Section 10 of the Third
Extension Agreement; and (vi) reaffirms and remakes each indemnification
obligation set forth in the Third Extension Agreement, including but not limited
to Section 11 thereof.

 

SECTION 3.  Full Force and Effect.  Except as expressly set forth herein, all of
the Loan Documents to which each Prospect Party is party shall remain unmodified
and in full force and effect.

 

SECTION 4.  Counterparts.  This Reaffirmation may be executed in multiple
counterparts, each of which shall constitute an original and all of which, taken
together, shall constitute but one and the same instrument.

 

SECTION 5.  Governing Law.  This Reaffirmation shall be governed by and
construed in accordance with the laws of the State of Arizona.

 

IN WITNESS WHEREOF, the parties hereto have executed this Reaffirmation of Loan
Documents as of the date first above written.

 

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KARLSSON:

 

 

 

The Karlsson Group, Inc.

 

an Arizona corporation

 

 

 

 

 

 

By:

/s/Michael Stone

 

Name: Michael Stone

 

Its: Treasurer/CFO

 

 

 

 

 

PROSPECT DE:

 

 

 

Prospect Global Resources, Inc.,

 

a Delaware corporation

 

 

 

 

 

 

By:

/s/ Damon Barber

 

Name: Damon Barber

 

Its: President, CEO and Secretary

 

 

 

 

 

PARENT:

 

 

 

Prospect Global Resources, Inc.,

 

a Nevada corporation

 

 

 

 

 

 

By:

/s/ Damon Barber

 

Name: Damon Barber

 

Its: President, CEO and Secretary

 

 

 

 

 

AWP:

 

 

 

American West Potash, LLC

 

a Delaware limited liability company

 

 

 

 

 

 

By:

/s/ Damon Barber

 

Name: Damon Barber

 

Its: President, CEO and Secretary

 

[Signatures Continued on Next Page]

 

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APACHE:

 

 

 

Apache County Land & Ranch, LLC

 

a Nevada limited liability company

 

 

 

 

 

 

By:

/s/ Damon Barber

 

Name: Damon Barber

 

Its: President, CEO and Secretary

 

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