Exhibit 10.2

 

REAFFIRMATION OF LOAN DOCUMENTS

 

THIS REAFFIRMATION OF LOAN DOCUMENTS (“Reaffirmation”), dated as of May 16,
2014, 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 company
(“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.”

 

D.            Concurrently herewith: (i) Karlsson and Prospect DE are entering
into a Fifteenth Amendment to Senior First Priority Secured Promissory Note (the
“Fifteenth

 

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Amendment”) pursuant to which the deadline for discounted payoff of the Note in
full is extended by seven (7) days, until May 23, 2014, and certain conforming
changes to the Note are made to extend the applicable deadlines from May 16,
2014 to May 23, 2014; and (ii) Karlsson and the Prospect Parties are entering
into an Amendment No. 1 to Seventh Extension Agreement (the “Extension
Amendment” and collectively with the Fifteenth Amendment, the “Amendment
Documents”) pursuant to which the deadline for payment of Karlsson legal fees
and expenses is similarly being extended from May 16, 2014 to May 23, 2014.

 

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) reaffirms and remakes
on the date hereof each of the representations, warranties, covenants and
agreements made by it in the Loan Documents, except to the extent such
representations and warranties relate solely to an earlier date;
(ii) acknowledges and admits its indebtedness and 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; and (iii) acknowledges and admits that it has no defenses, offsets or
claims whatsoever in respect thereof, in each case notwithstanding the
transactions effected by the Amendment Documents.

 

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.

 

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

 

 

KARLSSON:

 

 

 

The Karlsson Group, Inc.

 

an Arizona corporation

 

 

 

 

 

 

 

By:

/s/ Michael Stone

 

Name:

Michael Stone

 

Its:

CFO and Treasurer

 

 

 

 

 

 

 

PROSPECT DE:

 

 

 

Prospect Global Resources, Inc.,

 

a Delaware corporation

 

 

 

 

 

 

 

By:

/s/ Gregory Dangler

 

Name:

Gregory Dangler

 

Its:

President, CEO and Secretary

 

 

 

 

 

 

 

PARENT:

 

 

 

Prospect Global Resources, Inc.,

 

a Nevada corporation

 

 

 

 

 

 

 

By:

/s/ Gregory Dangler

 

Name:

Gregory Dangler

 

Its:

President, CEO and Secretary

 

 

 

 

 

 

 

AWP:

 

 

 

American West Potash, LLC

 

a Delaware limited liability company

 

 

 

 

 

By:

/s/ Gregory Dangler

 

Name:

Gregory Dangler

 

Its:

President, CEO and Secretary

 

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APACHE:

 

 

 

Apache County Land & Ranch, LLC

 

a Nevada limited liability company

 

 

 

 

 

By:

/s/ Gregory Dangler

 

Name:

Gregory Dangler

 

Its:

President, CEO and Secretary

 

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