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Exhibit 10.1

[*The terms of the Permitted Preferred Stock and Permitted Junior Debt, set
forth on Schedules C-1 and C-2 of this agreement, have been omitted from this
agreement in connection with a request for confidential treatment. The omitted
information has been filed separately with the Securities and Exchange
Commission as part of the request for confidential treatment. The omitted
information is indicated by a blank and marked with an asterisk.]

SECURITIES PURCHASE AGREEMENT
by and among
PROSPECT GLOBAL RESOURCES INC.,
CERTAIN GUARANTORS NAMED HEREIN,
and
THE PURCHASERS NAMED HEREIN
for
$100,000,000
in
10% CONVERTIBLE SPRINGING SECOND-LIEN NOTES DUE 2020
Dated November 29, 2012

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TABLE OF CONTENTS

 
   
   
  Page

ARTICLE I AUTHORIZATION OF NOTES

 
9

ARTICLE II SALE AND PURCHASE OF SECURITIES

 
9

 

2.1

 

Sale and Purchase

 
9

  2.2  

Fees and Expenses

  9

  2.3  

Purchase Price Allocation

  10

ARTICLE III CLOSING

 
10

 

3.1

 

Closing

 
10

  3.2  

Deliveries

  10

  3.3  

Apollo Warrants

  10

ARTICLE IV JOINT CONDITIONS TO CLOSING

 
11

 

4.1

 

Shareholder Approval

 
11

  4.2  

No Order

  11

ARTICLE V COMPANY CONDITIONS TO CLOSING

 
11

 

5.1

 

Representations and Warranties

 
11

  5.2  

Performance; No Default

  11

  5.3  

Officer's Certificate

  11

  5.4  

IRS Forms W-8/W-9

  11

ARTICLE VI PURCHASERS CONDITIONS TO CLOSING

 
12

 

6.1

 

Representations and Warranties

 
12

  6.2  

Performance; No Default

  12

  6.3  

Compliance Certificates

  12

  6.4  

Investors Rights Agreement

  12

  6.5  

Royalty Agreement

  12

  6.6  

Opinions of Counsel

  12

  6.7  

Definitive Feasibility Study

  12

  6.8  

EPC/EPCM Retention

  13

  6.9  

Permits

  13

  6.10  

Key Hire

  13

  6.11  

Confirmatory Reports

  13

  6.12  

Off-Take Agreement

  13

  6.13  

No Material Adverse Changes

  13

  6.14  

Purchase Permitted By Applicable Law, Etc. 

  13

  6.15  

Private Placement Number

  14

  6.16  

Funding Instructions

  14

  6.17  

Proceedings and Documents

  14

  6.18  

Guarantee and Collateral Documents

  14

  6.19  

Certificate of Designation

  14

  6.20  

Karlsson Agreements

  14

  6.21  

Purchaser Expenses

  14

  6.22  

Amendment Confirmation

  14

  6.23  

Bylaws Amendment

  14

2

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ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 
15

 

7.1

 

Organization; Power and Authority

 
15

  7.2  

Authorization, Etc. 

  15

  7.3  

Execution; Due Authority

  16

  7.4  

No Conflicts

  16

  7.5  

Consents, Approvals or Waivers

  16

  7.6  

Legal and Governmental Proceedings

  17

  7.7  

Compliance With Laws

  17

  7.8  

Licenses and Permits

  17

  7.9  

Company SEC Documents

  18

  7.10  

No Material Adverse Effect

  18

  7.11  

Exchange Act

  18

  7.12  

Price Manipulation

  19

  7.13  

Class of Notes

  19

  7.14  

Status Under Investment Company Act

  19

  7.15  

Restrictions on Sale of Notes, Etc. 

  19

  7.16  

Company Controls and Procedures

  19

  7.17  

Public Accounting Firm

  20

  7.18  

Financial Statements; Material Liabilities

  20

  7.19  

Title to Property; Leases

  20

  7.20  

Environmental Matters

  21

  7.21  

Intellectual Property

  23

  7.22  

Taxes

  23

  7.23  

Compliance with ERISA

  23

  7.24  

Material Labor Disputes; Labor Laws

  24

  7.25  

Mineral Rights

  25

  7.26  

Insurance Coverage

  26

  7.27  

Restrictions on Subsidiaries

  26

  7.28  

No Registration Rights

  26

  7.29  

Antitakeover Provisions

  26

  7.30  

No General Solicitation

  26

  7.31  

Material Contracts

  27

  7.32  

Voting Agreements

  27

  7.33  

Compliance with Money Laundering Laws

  27

  7.34  

Compliance with OFAC

  27

  7.35  

Compliance with Other Laws, Regulations and Instruments

  27

  7.36  

Solvency

  27

  7.37  

Use of Proceeds

  27

  7.38  

Brokers' Fees

  27

  7.39  

Collateral Documents

  28

ARTICLE VIII REPRESENTATIONS OF THE PURCHASERS

 
28

 

8.1

 

Organization; Power and Authority

 
28

  8.2  

Execution; Due Authority

  28

  8.3  

No Conflicts

  28

  8.4  

Purchase for Investment

  29

  8.5  

Accredited Investor

  29

  8.6  

Brokers' Fees

  29

3

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  Page

ARTICLE IX CERTAIN INTERIM COVENANTS

 
29

 

9.1

 

Operation of Business

 
29

  9.2  

Access to Information; Consultation

  33

  9.3  

Reasonable Best Efforts

  34

  9.4  

Reservation of Shares

  35

  9.5  

Shareholders Meeting

  35

  9.6  

Proxy

  36

  9.7  

Non-Solicitation

  37

  9.8  

Additional Common Stock Issuances

  39

  9.9  

Affiliate Agreement Modifications

  40

  9.10  

Off-take Agreement

  40

  9.11  

Board and Observer Rights

  40

  9.12  

KG Default Cure

  41

  9.13  

Preemptive Rights

  42

  9.14  

Standstill

  43

  9.15  

Certain Tax Matters

  43

  9.16  

Benefit Plans

  44

  9.17  

FCPA

  44

  9.18  

Supplemental Payment

  44

  9.19  

Further Assurances

  44

ARTICLE X TERMINATION

 
45

 

10.1

 

Right to Terminate

 
45

  10.2  

Effect of Termination

  45

  10.3  

Fees and Expenses

  46

  10.4  

Amendment

  46

  10.5  

Waiver

  46

ARTICLE XI INDEMNIFICATION

 
46

 

11.1

 

Purchaser Indemnification

 
46

  11.2  

Company Indemnification

  47

  11.3  

Indemnification Actions

  47

  11.4  

Limitations

  49

ARTICLE XII VOTING

 
51

 

12.1

 

Voting

 
51

  12.2  

No Adverse Actions

  51

ARTICLE XIII CONVERSION

 
51

 

13.1

 

Conversion Right

 
51

  13.2  

Conversion

  52

  13.3  

Mechanics of Conversion

  52

  13.4  

Adjustment Upon Issuance of Shares of Common Stock

  54

  13.5  

Adjustment for Change in Capital Stock

  56

  13.6  

Adjustment for Rights Issue

  57

  13.7  

Adjustment for Other Distributions

  58

  13.8  

Adjustment for Cash Dividends

  59

  13.9  

Adjustment for Company Tender Offer

  59

  13.10  

When Adjustment May Be Deferred

  60

4

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  Page

  13.11  

When No Adjustment Required

  60

  13.12  

Notice of Adjustment

  61

  13.13  

Voluntary Decrease

  62

  13.14  

Notice of Certain Transactions

  62

  13.15  

Effect of Reclassification, Consolidation, Merger or Sale

  62

  13.16  

Simultaneous Adjustments

  63

  13.17  

Successive Adjustments

  63

  13.18  

Limitation on Adjustments

  63

ARTICLE XIV INFORMATION COVENANTS

 
64

 

14.1

 

Financial Statements

 
64

  14.2  

Requirements as to Financial Statements

  64

  14.3  

Information; Miscellaneous

  65

  14.4  

Notification of Default

  66

ARTICLE XV GENERAL COVENANTS

 
67

 

15.1

 

Use of Proceeds

 
67

  15.2  

Compliance with Laws

  67

  15.3  

Approvals

  67

  15.4  

Maintenance of Corporate Existence, etc

  67

  15.5  

Payment of Notes

  67

  15.6  

Payment of Taxes, etc

  67

  15.7  

Books and Records

  67

  15.8  

Environmental Covenants

  68

  15.9  

Maintenance of Project Assets

  69

  15.10  

Accuracy of Information

  69

  15.11  

Insurance

  69

  15.12  

Business Activities; No Amendment of Organizational Documents

  70

  15.13  

Indebtedness

  71

  15.14  

Liens

  72

  15.15  

Investments

  73

  15.16  

Restricted Payments, etc

  73

  15.17  

Mergers, etc

  73

  15.18  

Asset Dispositions, etc

  73

  15.19  

Transactions with Affiliates

  74

  15.20  

Restrictive Agreements, etc

  74

  15.21  

Inconsistent Agreements

  74

  15.22  

Bank Accounts

  74

  15.23  

Acquisitions

  74

  15.24  

Collateral and Guarantees

  74

  15.25  

Further Assurances

  75

  15.26  

Future Covenants

  75

  15.27  

Repurchase at the Option of Purchasers Upon Change of Control

  75

ARTICLE XVI EVENTS OF DEFAULT

 
76

ARTICLE XVII REMEDIES ON DEFAULT, ETC. 

 
78

 

17.1

 

Acceleration of Maturity; Rescission

 
78

  17.2  

Other Remedies

  78

  17.3  

Waiver of Past Defaults and Events of Default

  78

5

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  Page

  17.4  

Control by Majority

  78

  17.5  

Limitation on Suits

  78

  17.6  

Rights of Holders to Receive Payment

  79

  17.7  

Collection Suit by the Purchasers

  79

  17.8  

Priorities

  79

ARTICLE XVIII REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES; TRANSFER OF APOLLO
PREFERRED SHARES

 
79

 

18.1

 

Registration of Notes

 
79

  18.2  

Transfer and Exchange of Notes

  79

  18.3  

Replacement of Notes

  80

  18.4  

Transfer of Apollo Preferred Shares

  80

ARTICLE XIX PAYMENTS ON NOTES

 
80

ARTICLE XX EXPENSES, ETC. 

 
81

 

20.1

 

Transaction Expenses

 
81

  20.2  

Survival

  81

ARTICLE XXI MODIFICATION AND WAIVER

 
81

 

21.1

 

Requisite Consent of Holders

 
81

  21.2  

Revocation and Effects of Consents

  82

  21.3  

Notation on Exchange of Notes

  82

ARTICLE XXII NOTICES

 
83

ARTICLE XXIII GUARANTEE OF NOTES

 
83

 

23.1

 

Note Guarantee

 
83

  23.2  

Execution and Delivery of Note Guarantee

  84

  23.3  

Release of Guarantors

  84

  23.4  

Waiver of Subrogation

  85

ARTICLE XXIV CONFIDENTIAL INFORMATION

 
85

ARTICLE XXV SUBSTITUTION OF PURCHASER

 
86

ARTICLE XXVI MISCELLANEOUS

 
87

 

26.1

 

Successors and Assigns

 
87

  26.2  

Legal Holidays

  87

  26.3  

Accounting Terms

  87

  26.4  

Severability

  87

  26.5  

Construction, Etc. 

  87

  26.6  

Counterparts

  87

  26.7  

Table of Contents, Headings, Etc. 

  88

  26.8  

Construction

  88

  26.9  

Governing Law

  88

  26.10  

Jurisdiction and Process; Waiver of Jury Trial

  88

  26.11  

Disclosure of Tax Information

  88

  26.12  

Statements Required in Certificate

  89

  26.13  

Force Majeure

  89

  26.14  

Specific Performance

  89

  26.15  

Time of the Essence

  89

6

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SCHEDULE A   —   Information Relating to Purchasers SCHEDULE B   —   Defined
Terms SCHEDULE C-1   —   Terms of Permitted Preferred Stock SCHEDULE C-2   —  
Terms of Permitted Junior Debt SCHEDULE C-3   —   Terms of Notes in Karlsson
Default EXHIBIT A   —   Form of 10% Convertible Springing Second-Lien Notes due
2020 EXHIBIT B-1   —   Form of Purchaser Conversion Notice EXHIBIT B-2   —  
Form of Company Conversion Notice EXHIBIT C   —   Form of Certificate of
Designation EXHIBIT D   —   Minimum Offtake Arrangements EXHIBIT E-1   —   Form
of Series A Warrant EXHIBIT E-2   —   Form of Series B Warrant

7

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SECURITIES PURCHASE AGREEMENT

        SECURITIES PURCHASE AGREEMENT (this "Agreement") dated as of
November 29, 2012, by and among PROSPECT GLOBAL RESOURCES INC., a Nevada
corporation (the "Company"), the Subsidiaries of the Company party hereto from
time to time as GUARANTORS (as defined below) and the PURCHASERS named in
Schedule A hereto (the "Purchasers").

        WHEREAS, the Company is engaged, through its Subsidiaries, in the
exploration and planning for construction and operation of a potash mine and
related facilities to mine and develop the potash deposit located on lands owned
or leased by the Company or its Subsidiaries or on which the Company or its
Subsidiaries otherwise have a right to mine, in the Holbrook Basin of eastern
Arizona (the "Holbrook Project");

        WHEREAS, subject to the terms and conditions of this Agreement, the
Purchasers are paying the Company $100,000,000, and the Company is issuing:
(a) to the Notes Purchasers named in Schedule A hereto (the "Notes Purchasers"),
$100,000,000 aggregate principal amount of 10.0% Convertible Springing Second
Lien Notes due 2020 (the "Notes"), (b) to the Royalty Purchasers, Series A
warrants for the purchase of up to 25,925,926 shares of Common Stock of the
Company, in substantially the form set out in Exhibit E-1 (the "Series A
Warrants"), and Series B warrants for the purchase of up to 21,538,461 shares of
Common Stock of the Company, in substantially the form set out in Exhibit E-2
(the "Series B Warrants" and together with the Series A Warrants, the "Apollo
Warrants"), (c) to the Preferred Share Purchaser named in Schedule A hereto (the
"Preferred Share Purchaser"), the Apollo Preferred Shares, (d) to the Notes
Purchasers, upon certain circumstances contemplated by this Agreement, newly
issued shares of Common Stock of the Company (together with the Notes, the
Apollo Warrants and the Apollo Preferred Shares, the "Securities") and (e) to
the Royalty Purchasers named in Schedule A hereto (the "Royalty Purchasers"),
certain royalty interests in the Company;

        WHEREAS, the Board of Directors of the Company has determined that this
Agreement and the transactions contemplated hereby are in the best interests of
the Company, and its shareholders, and has previously approved this Agreement
and the transactions contemplated hereby (the "Transactions");

        WHEREAS, prior to or contemporaneously with the execution and delivery
of this Agreement by the parties hereto, as a condition and inducement to the
willingness of the Purchasers to enter into this Agreement, certain shareholders
of the Company and certain of the Purchasers have entered into Support
Agreements (the "Support Agreements"), in respect of the shares of Common Stock
held by such shareholders;

        WHEREAS, concurrently with the execution and delivery of this Agreement
by the parties hereto, as a condition and inducement to the willingness of the
Purchasers to enter into this Agreement, and in partial consideration for the
payment by the Purchasers of the Purchase Price, Buffalo Management LLC
("Buffalo"), the Royalty Purchasers and the Company have entered into a Royalty
Agreement, of even date herewith (the "Royalty Agreement"), which provides for,
among other things, Buffalo and the Royalty Purchasers sharing evenly an annual
royalty payment that was previously payable from the Company solely to Buffalo;

        WHEREAS, concurrently with the execution and delivery of this Agreement
by the parties hereto, as a condition and inducement to the willingness of the
Purchasers to enter into this Agreement, the Purchasers and the Company have
entered into an Investors Rights Agreement, of even date herewith (the
"Investors Rights Agreement"), which provides for certain governance and other
rights for the Purchasers;

8

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        NOW, THEREFORE, in consideration of the premises above and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:

ARTICLE I

AUTHORIZATION OF NOTES

        Subject to the terms and conditions of this Agreement, the Company will,
at the Closing, authorize the issuance and sale of $100,000,000 aggregate
principal amount of Notes. The Notes shall be substantially in the form set out
in Exhibit A and shall otherwise be governed by this Agreement.

ARTICLE II

SALE AND PURCHASE OF SECURITIES

        2.1    Sale and Purchase.    Subject to the terms and conditions of this
Agreement, the Company will issue, sell and grant to each Purchaser,
respectively, in the proportions set forth below, at the Closing (except for the
Apollo Warrants, which shall be issued one Business Day after the receipt of
Requisite Shareholder Approval) (and the Purchasers will purchase and accept
from the Company at the Closing (except for the Apollo Warrants, which shall be
accepted one Business Day after the receipt of Requisite Shareholder Approval)),
for the aggregate purchase price of $100,000,000 (the "Purchase Price"), payable
by each Purchaser in cash on the Closing Date in the amount to be specified to
the Company prior to the Closing by the Purchasers:

        (a)   Notes in the principal amount specified opposite such Notes
Purchaser's name in Schedule A;

        (b)   Subject to the terms of Section 9.8, a number of shares of Common
Stock as provided in Section 9.8, allocated pro rata among the Notes Purchasers
in proportion to the principal amount of Notes purchased by them;

        (c)   Subject to the terms of the Royalty Agreement, the royalty
payments contemplated by the Royalty Agreement (the "Royalty"), allocated to the
Royalty Purchasers in proportion to the percentage specified opposite such
Royalty Purchaser's name in Schedule A;

        (d)   Series A Warrants, allocated to the Royalty Purchasers in
proportion to the percentage specified opposite such Royalty Purchaser's name in
Schedule A, to be delivered to Royalty Purchasers on the Business Day after the
date on which the Requisite Shareholder Approval is obtained (or such later date
as specified by the Majority Purchasers by notice to the Company);

        (e)   Series B Warrants, allocated to the Royalty Purchasers in
proportion to the percentage specified opposite such Royalty Purchaser's name in
Schedule A, to be delivered to Royalty Purchasers on the Business Day after the
date on which the Requisite Shareholder Approval is obtained (or such later date
as specified by the Majority Purchasers by notice to the Company); and

        (f)    Apollo Preferred Shares, allocated to the Preferred Share
Purchaser.

        2.2    Fees and Expenses.    Within thirty (30) days of the date hereof,
the Company shall pay, upon invoice, to the Purchasers or any Affiliates of the
Purchasers designated by the Majority Purchasers (by wire transfer of
immediately available funds to an account or accounts as directed by the
Majority Purchasers) reimbursement for all Purchaser Expenses incurred prior to
the date hereof and not previously reimbursed. At the Closing, the Company shall
cause (a) the Purchasers or any Affiliates of the Purchasers designated by the
Majority Purchasers to receive from the Company (by wire transfer of immediately
available funds to an account or accounts as directed by the Majority
Purchasers) reimbursement of Purchaser Expenses incurred through the Closing
Date and not previously

9

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reimbursed and (b) Apollo Global Securities, LLC (or another Affiliate of the
Purchasers (designated by the Majority Purchasers at least two (2) Business Days
prior to the Closing Date)) to receive from the Company a transaction fee (the
"Transaction Fee") in the amount of $2,000,000 (by wire transfer of immediately
available funds to an account or accounts as directed by such designated
Affiliate) (it being understood and agreed that, if requested by the Majority
Purchasers, the Parties will memoralize in a separate letter agreement the
Company's obligation to pay the Transaction Fee).

        2.3    Purchase Price Allocation.    The Purchase Price shall be
allocated among the Notes, the Common Stock, the Royalty, the Apollo Preferred
Shares and the Apollo Warrants contemplated by subsections (a) through (e) of
Section 2.1 in the reasonable discretion of the Purchasers, after consultation
with the Company, and no parties shall take any actions, including filing any
Tax returns or taking any Tax positions, inconsistent with such allocation.

ARTICLE III

CLOSING

        3.1    Closing.    The sale and purchase of the Securities (other than
the Apollo Warrants) to be issued to the Purchasers and of the Royalties to be
granted to each Royalty Purchaser (the "Closing") shall occur at the offices of
Wachtell, Lipton, Rosen & Katz, 51 W. 52nd Street, New York, New York 10019, at
4:30 p.m., Eastern time, at a closing on the date that is twenty (20) Business
Days following the first date on which all conditions set forth in Articles IV,
V and VI have been satisfied or waived (other than those conditions that by
their nature are to be satisfied by actions taken at the Closing, but subject to
the satisfaction or waiver of such conditions) or on such other Business Day as
may be agreed upon by the Company and the Majority Purchasers (the "Closing
Date"), provided, that if the Company has provided the Purchasers with a draft
of the Definitive Feasibility Study no later than twenty (20) Business Days
prior to the date that all such conditions are satisfied or waived and the final
Definitive Feasibility Study that is delivered to the Purchasers and publicly
filed with the SEC in accordance with Section 6.7 is consistent in all material
respects with such draft of the Definitive Feasibility Study, then the Closing
shall occur on a date that is ten (10) Business Days following the satisfaction
or waiver of all such conditions or on such other Business Day as may be agreed
upon by the Company and the Majority Purchasers.

        3.2    Deliveries.    At the Closing, the Company will deliver to
(a) each Notes Purchaser (i) the Notes to be purchased by such Notes Purchaser
in the form of a single Note (or such greater number of Notes in denominations
of at least $500,000 as such Purchaser may request) dated the Closing Date and
registered in such Notes Purchaser's name (or in the name of its nominee) and
(ii) certificates evidencing the Common Stock to be purchased by such Notes
Purchaser pursuant to Section 9.8, if any, and (b) to the Preferred Share
Purchaser certificates evidencing the Apollo Preferred Shares to be purchased by
such Preferred Share Purchaser, in each case against delivery by each Purchaser
to the Company of payment of immediately available funds in the amount of the
purchase price therefor by wire transfer to an account number specified by the
Company no later than two (2) Business Days prior to the anticipated Closing
Date. If at the Closing the Company shall fail to tender such Notes, Common
Stock or Apollo Preferred Shares to any Purchaser as provided above in this
Article III, such Purchaser shall, at its election, be relieved of all
obligations under this Agreement, including the payment of the Purchase Price
described in this Section 3.2. If any of the conditions specified in Articles IV
and VI shall not have been fulfilled to the reasonable satisfaction of the
Majority Purchasers, each Purchaser shall, at its election, be relieved of all
obligations under this Agreement.

        3.3    Apollo Warrants.    At 9:30 a.m., Eastern time, on the first
Business Day following the receipt of the Requisite Shareholder Approval (or on
such later date as specified by the Majority Purchasers by notice to the
Company), at the Wachtell Lipton offices referred to in Section 3.1, the Company
shall issue and deliver to the Royalty Purchasers the Apollo Warrants. For the
avoidance of doubt, if any of

10

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the events referred to in Section 6 of the Apollo Warrants occur from and after
the date hereof through the date of issuance of the Apollo Warrants, the number
of shares of Common Stock for which such Apollo Warrants shall be exercisable
and the exercise price therefor shall each be adjusted in the Apollo Warrants
that are issued to the Royalty Purchasers in such manner as they would have been
adjusted if such Apollo Warrants were issued on the date hereof.

ARTICLE IV

JOINT CONDITIONS TO CLOSING

        The respective obligation of each of the parties hereto to effect the
Closing shall be subject to the satisfaction (or waiver by the Majority
Purchasers and the Company) of the following conditions precedent:

        4.1    Shareholder Approval.    The Requisite Shareholder Approval shall
have been obtained.

        4.2    No Order.    No Governmental Authority or court of competent
jurisdiction shall have promulgated, enacted or issued any statute, rule,
regulation, order, decree, injunction or ruling (whether temporary, preliminary
or permanent) which remains in effect and prohibits, prevents or otherwise
enjoins the consummation of the Transactions.

ARTICLE V

COMPANY CONDITIONS TO CLOSING

        The obligation of the Company to effect the Closing shall be subject to
the satisfaction or waiver of the following conditions precedent:

        5.1    Representations and Warranties.    The representations and
warranties of the Purchasers in this Agreement shall be correct in all material
respects (unless already qualified by materiality or material adverse effect, in
which case such representation or warranty shall be true and correct in all
respects) at the time of the Closing (as if made on and as of the Closing),
except for any representation and warranty which speaks as of a particular date,
in which case such representation and warranty shall be correct in all material
respects (unless already qualified by materiality or material adverse effect, in
which case such representation or warranty shall be true and correct in all
respects) as of such date.

        5.2    Performance; No Default.    The Purchasers shall have performed
and complied in all material respects with all agreements and covenants
contained in this Agreement required to be performed or complied with by them
prior to or at the Closing.

        5.3    Officer's Certificate.    Each Purchaser shall have furnished or
caused to be furnished to the Company at the Closing a certificate of an officer
of such Purchaser reasonably satisfactory to the Company as to the satisfaction
of the conditions set forth in Sections 5.1 and 5.2 at and as of the Closing.

        5.4    IRS Forms W-8/W-9.    Each Purchaser shall have delivered to the
Company a properly completed and duly executed applicable Internal Revenue
Service Form W-9 (or, if such Purchaser is a Foreign Purchaser, a completed
applicable Internal Revenue Service W-8).

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ARTICLE VI

PURCHASERS CONDITIONS TO CLOSING

        The obligation of the Purchasers to effect the Closing shall be subject
to the satisfaction or waiver of the following conditions precedent:

        6.1    Representations and Warranties.    The representations and
warranties of the Company in this Agreement shall be correct in all material
respects (unless already qualified by materiality or Material Adverse Effect, in
which case such representation or warranty shall be true and correct in all
respects) at the time of the Closing (as if made on and as of the Closing),
except for any representation and warranty which speaks as of a particular date,
in which case such representation and warranty shall be correct in all material
respects (unless already qualified by materiality or Material Adverse Effect, in
which case such representation or warranty shall be true and correct in all
respects) as of such date.

        6.2    Performance; No Default.    The Company shall have performed and
complied in all material respects with all agreements and covenants contained in
this Agreement required to be performed or complied with by it prior to or at
the Closing and, after giving effect to the issue and sale of the Securities
(and the application of the proceeds thereof as contemplated by Section 7.37)
and the other Transactions, no Default or Event of Default shall have occurred
and be continuing.

        6.3    Compliance Certificates.    

        (a)    Officer's Certificate.    The Company shall have furnished or
caused to be furnished to the Purchasers at the Closing a Compliance Certificate
as to the satisfaction of the conditions set forth in Sections 6.1 and 6.2 at
and as of the Closing.

        (b)    Secretary's Certificate.    The Company shall have delivered or
caused to be delivered to the Purchasers a certificate of its and each
Guarantor's Secretary or Assistant Secretary, dated the Closing Date, certifying
as to the articles or certificate of incorporation, bylaws and/or other
organizational documents of the Company or such Guarantor, as applicable, and
the resolutions attached thereto and other corporate or other proceedings
relating to the authorization, execution and delivery of the Notes, the Note
Guarantees and/or this Agreement, as applicable.

        6.4    Investors Rights Agreement.    The Investors Rights Agreement
shall be in full force and effect, and neither the Company nor any of its
Subsidiaries shall have entered into any agreement or taken any other action in
a manner that is adverse to, or conflicts with, any of the Investors Group's (as
defined in the Investors Rights Agreement) rights under the Investors Rights
Agreement (including its director designation rights and registration rights
thereunder).

        6.5    Royalty Agreement.    The Royalty Agreement shall be in full
force and effect.

        6.6    Opinions of Counsel.    Brownstein Hyatt Farber Schreck, LLP,
counsel for the Company, shall have furnished to the Purchasers its written
opinion, dated the date of the Closing, in form and substance reasonably
acceptable to the Purchasers, including opinions regarding the validity and
enforceability of (a) the voting rights of the Notes and (b) the Certificate of
Designation and the Apollo Preferred Shares.

        6.7    Definitive Feasibility Study.    The Company shall have received,
and delivered to the Purchasers and publicly filed with the SEC on Form 8-K, the
final Definitive Feasibility Study, which final Definitive Feasibility Study
shows (a) that the Holbrook Project's Capital Costs are not in excess of 10% of
the Current Capital Estimate, (b) that over the life of the mine (measured on a
reserves-only basis) the Holbrook Project's Operating Costs are not higher than
$115/tonne (provided that Operating Costs in excess of $115/tonne will be
permissible to the extent the Company demonstrates, to the Majority Purchasers'
reasonable satisfaction, that (x) such excess

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Operating Costs are being incurred based on a tradeoff optimization study and
(y) such tradeoffs that result in such excess Operating Costs are economically
beneficial to the Company and add value to the Holbrook Project), (c) that ore
grades and mineable reserve and resources estimates are consistent with what was
provided for in the PEA and (d) forecasted production levels, ramp up rates,
royalty rates and all other key commercial factors are consistent with what was
provided for in the PEA (and in respect of royalty rates, including the
royalties granted to the Karlsson Group Inc., Grandhaven Energy LLC and Buffalo
Management LLC in the amounts as publicly disclosed prior to the date hereof).

        6.8    EPC/EPCM Retention.    The Company shall have retained an
Engineering, Procurement and Construction ("EPC") firm or Engineering,
Procurement and Construction Management ("EPCM") firm, reasonably satisfactory
to the Majority Purchasers, for the provision of EPC or EPCM services in
connection with the Holbrook Project.

        6.9    Permits.    There shall have been no indication that the Company
will be unable to obtain any Necessary Permits no later than (a) December 31,
2013 for the Aquifer Protection Permit from the Arizona Department of
Environmental Quality, the permit to construct and operate a source of air
pollutants from the Arizona Department of Environmental Quality, and approval of
leases by the Arizona State Land Department, (b) the applicable dates set forth
on Schedule 6.9 for the applicable Necessary Permits listed on Schedule 6.9 and
(c) December 31, 2013 for all of the other Necessary Permits.

        6.10    Key Hire.    (a) The Project Manager (or person serving in an
equivalent capacity) employed by the Company as of the Closing shall be
reasonably acceptable to the Majority Purchasers (and shall have been hired
after consultation with the Purchasers), (b) the Chief Executive Officer, Chief
Operating Officer and Chief Financial Officer of the Company as of the Closing
shall be reasonably acceptable to the Majority Purchasers (it being understood
that the current persons serving such roles are reasonably acceptable to the
Purchasers for purposes of this condition) and (c) if the Company shall have
hired or fired after the date hereof and prior to the Closing the Chief
Commercial Officer or the Mine Manager (or other executives or managers
performing substantially similar roles), such hiring or firing shall have been
reasonably acceptable to the Majority Purchasers (after consultation with the
Purchasers).

        6.11    Confirmatory Reports.    The Purchasers shall have received,
from their commercial and technical advisors, reports which verify in all
material respects the conclusions of the final Definitive Feasibility Study and
generally support the continued commercial and technical viability of, and the
market opportunity for, the Holbrook Project; provided, that if such reports are
not received by the Purchasers within twenty (20) Business Days of the public
filing of the final Definitive Feasibility Study with the SEC in accordance with
Section 6.7, this condition shall be deemed waived; provided, further, that, for
the avoidance of doubt, if such reports are received within such twenty
(20) Business Days but do not provide such verification and support, then this
condition shall not be deemed to be satisfied.

        6.12    Off-Take Agreement.    The Company shall have used best efforts
to enter into definitive agreements with respect to the Minimum Off-Take
Arrangements.

        6.13    No Material Adverse Changes.    Neither the Company nor any of
its Subsidiaries shall have sustained since the date hereof any Material Adverse
Effect.

        6.14    Purchase Permitted By Applicable Law, Etc.    If requested by a
Purchaser, such Purchaser shall have received an Officer's Certificate from the
Company certifying as to such matters of fact as such Purchaser may reasonably
specify to enable such Purchaser to determine whether its purchase of Notes
shall (a) be permitted by the laws and regulations of each applicable
jurisdiction, (b) not violate any applicable law or regulation (including,
without limitation,

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Regulation T, U or X of the Board of Governors of the Federal Reserve System)
and (c) not subject such Purchaser to any Tax, penalty or liability under or
pursuant to any applicable law or regulation, which law or regulation was not in
effect on the date hereof.

        6.15    Private Placement Number.    A Private Placement Number issued
by Standard & Poor's CUSIP Service Bureau shall have been obtained for the
Notes.

        6.16    Funding Instructions.    The Purchasers shall have received
written instructions signed by a Responsible Officer on letterhead of the
Company confirming the wiring information provided by the Company including
(a) the name and address of the transferee bank, (b) such transferee bank's ABA
number and (c) the account name and number into which the Purchase Price is to
be deposited.

        6.17    Proceedings and Documents.    All corporate and other
proceedings in connection with the Transactions and all documents and
instruments incident to such Transactions shall be satisfactory to the Majority
Purchasers and the Purchasers' counsel, and the Purchasers and the Purchasers'
counsel shall have received all such counterpart originals or certified or other
copies of such documents as the Majority Purchasers or such counsel may
reasonably request.

        6.18    Guarantee and Collateral Documents.    If the Springing Lien
Trigger Date shall have occurred prior to the Closing Date, the Company and the
Guarantors, as applicable, shall have duly executed and delivered to the
Purchasers such Collateral Documents and other agreements, instruments or
filings, all in form and substance satisfactory to the Majority Purchasers, as
the Majority Purchasers may reasonably request to create and perfect Liens on
the Collateral to secure the Obligations in favor of the Collateral Agent,
together with such customary officer's certificates, opinions of counsel and
other documents as the Majority Purchasers may reasonably request in connection
therewith.

        6.19    Certificate of Designation.    The Certificate of Designation
shall have become effective (and shall remain in full force and effect as of the
Closing) and the Company shall have delivered to the Purchasers at the Closing
the then-effective amended and restated Articles of Incorporation of the Company
reflecting the Certificate of Designation.

        6.20    Karlsson Agreements.    (a) There shall have been, since such
contracts were entered into, no amendments, waivers or modifications to any
terms of any contracts entered into in connection with, or otherwise relating
to, the Karlsson Purchase, or any new contracts entered into with Karlsson or
its Affiliates (unless previously consented to in writing by the Majority
Purchasers in accordance with Section 9.1(o)), (b) the Company and its
Subsidiaries shall have performed all obligations under all such agreements
associated with the Karlsson Purchase and (c) after giving effect to the issue
and sale of the Securities (and the application of the proceeds thereof as
contemplated by Section 7.37) and the other Transactions, no default or event of
default shall have occurred and be continuing under the Karlsson Note.

        6.21    Purchaser Expenses.    The Company shall have paid at the
Closing in accordance with Section 2.2 the Transaction Fee and all Purchaser
Expenses incurred by the Purchasers to the extent not previously paid.

        6.22    Amendment Confirmation.    The Company shall have received an
amendment of or waiver (which shall be in full force and effect as of the
Closing) under the agreements specified in Schedule 6.22 in the manner described
on such Schedule 6.22.

        6.23    Bylaws Amendment.    The Company shall have effected such
amendments to its Bylaws (which shall be in full force and effect as of the
Closing) as are necessary or desirable, in the reasonable opinion of the
Majority Purchasers, to effect the voting and director-designation rights of the
Notes and the Apollo Preferred Stock.

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ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

        The Company represents and warrants to each Purchaser that, except as
set forth in the applicable section of the Company Disclosure Schedules:

        7.1    Organization; Power and Authority.    Each of the Company and its
Subsidiaries is duly organized or incorporated, validly existing and in good
standing under the laws of the jurisdiction of its organization or
incorporation, with all requisite power and authority (corporate or other) to
own its properties and carry on its business as now conducted, and is qualified
to do business in, and is in good standing in, every jurisdiction where such
qualification is required, or is subject to no material liability or disability
by reason of the failure to be so qualified or in good standing in any such
jurisdiction.

        7.2    Authorization, Etc.    

        (a)   The Company has, as of the date hereof, an authorized
capitalization and issued and outstanding equity securities (including
Convertible Securities or Options) set forth on Schedule 7.2(a).

        (b)   All of the outstanding shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable and are not subject to any preemptive or similar rights. Except
as described in Schedule 7.2(b) or as permitted by Section 9.1 or consented to
by the Majority Purchasers, there are no outstanding rights (including
preemptive rights), Options to acquire, or instruments convertible into or
exchangeable or exercisable for, any shares of capital stock or other equity
interest in the Company or any of its Subsidiaries, or any contract, commitment,
agreement, understanding or arrangement of any kind relating to the issuance of
any capital stock or other equity interest of the Company or any such
Subsidiary, any such convertible or exchangeable or exercisable securities or
any such rights or Options. All of the outstanding shares of capital stock or
other equity interests of AWP and PGRI Delaware have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned directly
or indirectly by the Company, free and clear of any Liens, restrictions on
voting or transfer or any other claim of any third party. None of the Company,
PGRI Delaware of AWP own or hold, directly or indirectly, any interests in,
capital stock of or other securities (whether equity or debt) of any Person
(other than securities of PGRI Delaware and AWP). No bonds, debentures, notes or
other Indebtedness of the Company or any of its Subsidiaries having the right to
vote on any matters on which the Company's shareholders may vote are issued or
outstanding unless consented to in writing by the Majority Purchasers. The
issuance of the Securities, the conversion of the Notes and the exercise of the
Apollo Warrants will not entitle any holder of any equity interests in the
Company or any of its Subsidiaries (including any holder of Options or
Convertible Securities) to any anti-dilution or similar adjustments or to any
preemptive or similar rights. At Closing, there will be outstanding no other
shares of Series A Preferred Stock of the Company other than the Apollo
Preferred Shares being issued hereunder.

        (c)   The Notes and the guarantees thereof by the Guarantors have been,
or, when executed, will have been, duly authorized by all necessary action
(corporate or other) and, when issued and delivered pursuant to this Agreement,
will have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company and of each of
the Guarantors, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other laws affecting creditors' rights generally and
subject to general principles of equity and implied covenants of good faith and
fair dealing, regardless of whether considered in a proceeding in equity or at
law (the "Enforceability Exceptions"). When issued and sold against receipt of
the Purchase Price as

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provided in this Agreement, the Notes will not be subject to preemptive or
similar rights of any shareholder of the Company and will be free of
restrictions on transfer other than restrictions on transfer under applicable
Laws or as set forth herein. When issued, shares of Common Stock issuable upon
conversion of the Notes, exercise of the Apollo Warrants and pursuant to
Section 9.8 and the Apollo Preferred Shares will have been duly authorized by
all necessary corporate action and when so issued will be validly issued, fully
paid and nonassessable, will not be subject to preemptive or similar rights of
any shareholder of the Company, will be free and clear of all Liens, and will be
free of restrictions on transfer other than restrictions on transfer under
applicable Laws or as set forth herein.

        7.3    Execution; Due Authority.    

        (a)   The execution, delivery and performance of this Agreement, the
Investors Rights Agreement, the Apollo Warrants and the Royalty Agreement (and
all other documents required to be executed and delivered by the Company or any
of the Guarantors) and the consummation of the transactions contemplated hereby
and thereby, have been duly and validly authorized by all necessary corporate
action on the part of the Company and each of the Guarantors, except for
obtaining the Requisite Shareholder Approval.

        (b)   This Agreement, the Investors Rights Agreement and the Royalty
Agreement have been duly executed and delivered by the Company (and, in the case
of the Royalty Agreement, AWP and PGRI Delaware) (and all documents required to
be executed and delivered by the Company or any of the Guarantors at or prior to
the Closing will be duly executed and delivered by the Company and/or such
Guarantors) and this Agreement, the Investors Rights Agreement and the Royalty
Agreement constitute, and at the Closing (assuming the due and valid execution
and delivery of such documents by the other parties thereto) such documents will
constitute, the valid and binding obligations of the Company and each of the
Guarantors, enforceable in accordance with their terms, except for the
Enforceability Exceptions. The Apollo Warrants will, when issued, have been duly
executed and delivered by the Company and will constitute the valid and binding
obligations of the Company, enforceable in accordance with their terms, except
for the Enforceability Exceptions.

        7.4    No Conflicts.    The issue and sale of the Securities and the
compliance by the Company and its Subsidiaries with all of the provisions of the
Securities, this Agreement, the Investors Rights Agreement, the Apollo Warrants
and the Royalty Agreement, and the consummation of the Transactions will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give rise to any right of
termination, cancellation, payment or acceleration under, any contract,
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its Subsidiaries are a party or by
which the Company or any of its Subsidiaries are bound or to which any of the
property or assets of the Company or any of its Subsidiaries are subject, nor
will such action result in any violation of the provisions of the Second Amended
and Restated Articles of Incorporation or the Second Amended and Restated Bylaws
of the Company (collectively, the "Company Organizational Documents") or any
statute or any order, rule or regulation of any court or Governmental Authority
having jurisdiction over the Company or any of its Subsidiaries or any of their
properties, except, with respect to any of the foregoing (other than the
violation of the provisions of the Company Organizational Documents), as would
not reasonably be material to the Company and its Subsidiaries, taken as a
whole, or as would not have a material adverse effect on the ability of each of
the Company and the Guarantors to perform its obligations under this Agreement,
in each case except as previously disclosed to the Purchasers in writing by the
Company.

        7.5    Consents, Approvals or Waivers.    The execution, delivery and
performance of this Agreement, the Investors Rights Agreement and the Royalty
Agreement, including the issue and

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sale of the Notes and the Apollo Warrants and the consummation of the
Transactions, by the Company and the Guarantors will not be subject to any
consent, approval or waiver from any Governmental Authority or other third
Person, except (a) the filing of the Certificate of Designation with the
Secretary of State of the State of Nevada, (b) the Requisite Shareholder
Approval, (c) as set forth on Schedule 7.5 or as previously disclosed to the
Purchasers in writing by the Company and (d) such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or "blue sky" laws in connection with the purchase and distribution
of the Notes by the Purchasers.

        7.6    Legal and Governmental Proceedings.    There are no legal or
governmental proceedings ("Proceedings") pending to which the Company or any of
its Subsidiaries is a party or of which any property of the Company or any of
its Subsidiaries is subject which, individually or in the aggregate, is
reasonably expected to be material to the Company and its Subsidiaries, taken as
a whole, or would have a material adverse effect on the ability of each of the
Company and the Guarantors to perform its obligations under this Agreement, and,
to the Knowledge of the Company and each of the Guarantors, no such Proceedings
are threatened or contemplated by Governmental Authorities or threatened by
others.

        7.7    Compliance With Laws.    

        (a)   The Company and its Subsidiaries are, and have been since
February 11, 2011, in compliance in all material respects with all applicable
Laws. No material change is required in the Company or its Subsidiaries'
processes, properties or procedures in connection with any applicable Laws, and
none of the Company or its Subsidiaries has, prior to the date of this
Agreement, received any notice or communication of any material noncompliance
with any such Laws that has not been cured as of the date of this Agreement.

        (b)   None of the Company, any of its Subsidiaries or Affiliates, or any
director, officer or employee of the Company or any of its Subsidiaries or
Affiliates, or any consultant, agent, broker, representative or other person
associated with or acting for or on behalf of the Company or any of its
Subsidiaries or Affiliates, has taken or failed to take any action or otherwise
engaged in any conduct, directly or indirectly, that would constitute or
otherwise result in a violation by any such Person of the Foreign Corrupt
Practices Act (15 U.S.C. §§78m(b), 78dd-1, 78dd-2, 78ff) (the "FCPA"), The
Bribery Act of 2010 of the United Kingdom (the "UK Bribery Act"), or any other
applicable anti-corruption or other law, rule or regulation regarding bribery,
political contributions, gifts, entertainment, hospitality or the provision of
other things of value or advantage, including, without limitation: directly or
indirectly (i) making, offering or promising to make, or authorizing the making
of, any unlawful payment of money or other thing of value or advantage to any
person; (ii) giving, offering or promising to give, or authorizing the giving
of, any unlawful gift, political or charitable contribution or other thing of
value or advantage to any person; or (iii) requesting or receiving any unlawful
payment, gift, political or charitable contribution or other thing of value or
advantage.

        7.8    Licenses and Permits.    The Company and its Subsidiaries possess
all material licenses, certificates, permits and other authorizations
("Permits") issued by, and have made all declarations and filings with, the
appropriate Governmental Authorities that are necessary for the present conduct
of their respective businesses, including ownership and lease of their
respective properties, as described in the Company SEC Documents, including the
Holbrook Project, and neither the Company nor any of its Subsidiaries have
received notice of any revocation or modification of any material Permits
(including any Necessary Permits) or has any reason to believe that any material
Permit (including any Necessary Permits) will not be renewed in the ordinary
course.

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        7.9    Company SEC Documents.    

        (a)   (i)  Each form, report, document, statement, schedule, prospectus,
registration statement and definitive proxy statement filed by the Company with
the SEC (the "Company SEC Documents") since February 11, 2011, and all Company
SEC Documents filed after the date hereof and prior to the Closing Date,
(i) were and, in the case of Company SEC Documents filed after the date hereof,
will be, as of their respective dates, prepared in all material respects in
accordance with the applicable requirements of the Securities Act, the Exchange
Act and the Sarbanes-Oxley Act, as the case may be, and the rules and
regulations thereunder and (ii) did not at the time they were filed (or, if
amended or superseded by a subsequent filing, then on the date of such filing),
and in the case of such Company SEC Documents filed after the date of this
Agreement, will not as of the time they are filed, contain any untrue statement
of a material fact or omit to state a material fact required to be stated in
such Company SEC Document necessary in order to make the statements therein, in
the light of the circumstances under which they were and will be made, not
misleading. To the Knowledge of the Company, as of the date of this Agreement,
none of the Company SEC Documents is the subject of ongoing SEC review or
outstanding SEC comment.

        (b)   The chief executive officer and chief financial officer of the
Company have made all certifications required by Sections 302 and 906 of the
Sarbanes-Oxley Act, and statements contained in such certificates are complete
and correct, and the Company is otherwise in material compliance with all
applicable provisions of the Sarbanes-Oxley Act.

        (c)   As of the date of this Agreement, the Company has disclosed, based
on its most recent evaluation, to the Company's auditors and the audit committee
of the Board of Directors (i) any significant deficiencies and material
weaknesses in the design or operation of internal control over financial
reporting, which are reasonably likely to adversely affect in any material
respect the Company's ability to record, process, summarize and report its
consolidated financial information; and (ii) any fraud known to management,
whether or not material that involved management or other employees who have a
significant role in the Company's internal controls over financial reporting. As
of the date hereof, the Company has not received any complaint or allegation in
writing since February 11, 2011, regarding accounting, internal accounting
controls or auditing matters, including any such complaint regarding improper
accounting or auditing matters. The Company and its consolidated Subsidiaries
have established and maintain disclosure controls and procedures as defined in
Rule 13a-15(e) under the Exchange Act; such disclosures controls and procedures
are reasonably designed to ensure that material information relating to the
Company and its consolidated Subsidiaries is made known on a timely basis to the
individuals responsible for the preparation of the Company SEC Documents; and,
as of the date hereof, to the Knowledge of the Company, the Company has not
identified any material weaknesses in the design or operation of internal
control over financial reporting. As of the date of this Agreement, to the
Knowledge of the Company, there is no reason to believe that its chief executive
officer and chief financial officer will not be able to give the certifications
and attestations required pursuant to the rules and regulations adopted pursuant
to Section 302 of the Sarbanes-Oxley Act when next due.

        7.10    No Material Adverse Effect.    Neither the Company nor any of
its Subsidiaries has sustained since the Reference Balance Sheet Date any
Material Adverse Effect.

        7.11    Exchange Act.    None of the Transactions (including, without
limitation, the use of the proceeds from the sale of the Securities as described
in Section 7.37) will violate or result in a violation of Section 7 of the
Exchange Act, or any rule or regulation promulgated thereunder, including,
without limitation, Regulations T, U and X of the Board of Governors of the
Federal Reserve System.

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        7.12    Price Manipulation.    Prior to the date hereof, neither the
Company nor any of its Affiliates have taken any action which is designed to or
which has constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the Company in
connection with the sale of any securities of the Company.

        7.13    Class of Notes.    When the Notes are issued and delivered
pursuant to this Agreement, the Notes will not be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities which are listed on
a national securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system.

        7.14    Status Under Investment Company Act.    The Company is not, and
after giving effect to the offering and sale of the Notes and the application of
the proceeds thereof, will not be an "investment company," as such term is
defined in the United States Investment Company Act of 1940, as amended (the
"Investment Company Act").

        7.15    Restrictions on Sale of Notes, Etc.    

        (a)   Neither the Company nor any of its Subsidiaries, nor any person
acting on behalf of the Company or any of its Subsidiaries, has offered or sold
the Notes by means of any general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act or, with respect to Notes sold
outside the United States to non-U.S. persons (as defined in Rule 902 under the
Securities Act), by means of any directed selling efforts within the meaning of
Rule 902 under the Securities Act, and the Company and any Affiliate of the
Company, and any person acting on its or their behalf, have complied with and
will implement the "offering restriction" within the meaning of such Rule 902.

        (b)   Within the preceding six (6) months, neither the Company nor any
of its Subsidiaries, nor any other person acting on behalf of either the Company
or any of its Subsidiaries, has since February 11, 2011 offered or sold to any
person any Notes, or any securities of the same or a similar class as the Notes,
other than Notes offered or sold to the Purchasers hereunder. The Company and
each of its Subsidiaries will take reasonable precautions designed to insure
that any offer or sale, direct or indirect, in the United States or to any
U.S. person (as defined in Rule 902 under the Securities Act) of any Notes or
any substantially similar security issued by the Company or any Guarantor,
within six (6) months subsequent to the date on which the distribution of the
Notes has been completed (as notified to the Company by the Purchasers) is made
under restrictions and other circumstances reasonably designed not to affect the
status of the offer and sale of the Notes in the United States and to
U.S. persons contemplated by this Agreement as transactions exempt from the
registration provisions of the Securities Act.

        7.16    Company Controls and Procedures.    

        (a)   The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in material conformity with GAAP; and (iii) access to assets is
permitted only in accordance with management's general or specific
authorization.

        (b)   Since the date of the latest audited financial statements included
in the Company's Annual Report on Form 10-K ("Form 10-K") for the fiscal year
ended March 31, 2012, there has been no change in the Company's internal control
over financial reporting that has materially adversely affected, or is
reasonably likely to materially adversely affect, the Company's internal control
over financial reporting.

        (c)   The Company maintains disclosure controls and procedures that have
been designed to ensure that material information relating to the Company and
its Subsidiaries is made known to

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the Company's principal executive officer and principal financial officer by
others within those entities, and such disclosure controls and procedures are
effective.

        7.17    Public Accounting Firm.    Ehrhardt Keefe Steiner & Hottman PC,
which has audited certain financial statements of the Company, is an independent
registered public accounting firm as required by the Securities Act and the
rules and regulations of the SEC promulgated thereunder.

        7.18    Financial Statements; Material Liabilities.    

        (a)   Each of the consolidated financial statements contained in the
Company SEC Documents (including in each case all notes and schedules thereto),
including any Company SEC Documents filed after the date of this Agreement,
complied or will comply, as of its respective date, in all material respects
with all applicable accounting requirements and the rules and regulations of the
SEC with respect thereto, was or will be prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of the unaudited statements, as
permitted by Rule 10-01 of Regulation S-X of the SEC), and fairly presented or
will fairly present in all material respects the financial position of the
Company and its consolidated Subsidiaries as of their respective dates and the
results of operations and the cash flows of the Company and its consolidated
Subsidiaries for the periods presented therein, except that any unaudited
interim financial statements do not include all of the information and notes
required by GAAP for complete financial statements and are subject to normal
year-end adjustments.

        (b)   The Company and its Subsidiaries are not subject to any
Liabilities or obligations of any nature, whether or not accrued, absolute,
contingent or otherwise and whether due or to become due, other than Liabilities
(i) as reflected or reserved against on the balance sheet for the quarter ended
September 30, 2012, as contained in the Company SEC Documents (the "Reference
Balance Sheet"), or (ii) incurred in the ordinary course of business consistent
with past practice since the date of the Reference Balance Sheet that have not
had, individually or in the aggregate, a Material Adverse Effect.

        7.19    Title to Property; Leases.    Except as would not adversely
affect the Company's ability to economically construct and operate a potash mine
and related facilities on such properties or otherwise conduct its operations
with respect to such properties or as previously disclosed to the Purchasers in
writing by the Company: each of the Company and each of the Subsidiaries owns or
leases all such properties as are necessary to the conduct of its operations as
presently conducted; the Company and the Subsidiaries have good and marketable
title to all surface real property owned by them in fee simple, and good and
marketable title to all personal property owned by them, in each case free and
clear of all liens, encumbrances and defects of any kind (including mining,
zoning, use or building code restrictions that would prohibit or prevent the
continued effective ownership, leasing, licensing or use of such property in the
business of the Company and the Subsidiaries) that would prevent the Company
from conducting its business as it is now being conducted; any real property and
buildings held under lease by the Company and the Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and the Subsidiaries; the Company and the
Subsidiaries hold either mining leases, mining concessions, mining claims or
participating interests or other conventional property or proprietary interests
or rights, recognized in the jurisdiction in which a particular property is
located, in respect of the ore bodies and minerals located in properties in
which the Company and its Subsidiaries have an interest under valid, subsisting
and enforceable title documents or other recognized and enforceable agreements
or instruments, sufficient to permit the Company or applicable Subsidiary to
explore the minerals relating thereto except where the failure

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to have obtained such rights would individually or in the aggregate be, or
reasonably expected to be, not material to the Company and its Subsidiaries,
taken as a whole; all property, leases or claims in which the Company or any
Subsidiary has an interest or right have been validly located and recorded in
accordance with all applicable laws and are valid and subsisting except where
the failure to be so would not be, or not reasonably expected to be, material to
the Company and its Subsidiaries, taken as a whole; the Company and its
Subsidiaries have all necessary surface rights, access rights and other
necessary rights and interests relating to the properties in which the Company
and its Subsidiaries have an interest, granting the Company or applicable
Subsidiary the right and ability to explore for minerals for development
purposes as are appropriate in view of the rights and interest therein of the
Company or applicable Subsidiary, with only such exceptions as do not interfere
with the currently conducted business of the Company or applicable Subsidiary or
of the rights or interest so held, and each of the proprietary interests or
rights and each of the documents, agreements and instruments and obligations
relating thereto referred to above is currently in good standing in the name of
the Company or a Subsidiary except where the failure to be so would not be, or
not reasonably expected to be, material to the Company and its Subsidiaries,
taken as a whole; the Company is not aware of any reason that it is not or would
not be entitled to extract minerals from its properties and to do all of the
exploration and development contemplated in the Company's current business plan
except for such failures that would not individually or in the aggregate be, or
reasonably expected to be, material to the Company and its Subsidiaries, taken
as a whole; there are no pending or contemplated condemnation proceedings
affecting the real properties owned by the Company or its Subsidiaries with a
fair market value in excess of $1,000,000 or any sale or disposition thereof in
lieu of condemnation, and no real property owned by the Company or its
Subsidiaries with a fair market value in excess of $1,000,000, or any interest
therein, is subject to any right of first refusal, option or other contractual
right to purchase such property or interest therein.

        7.20    Environmental Matters.    

        (a)   Except as would not, individually or in the aggregate, be, or
reasonably expected to be, material to the Company and its Subsidiaries, taken
as a whole:

        (i)    To the Knowledge of the Company, neither the Company nor any of
its Subsidiaries is, or has been, in violation of any U.S. federal, state, local
or foreign law (including common law), regulation, rule, requirement, decision
or order relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata), natural resources, or wildlife, including,
without limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of Hazardous Substances (collectively,
"Materials of Environmental Concern"), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of, or exposure to, Materials of Environmental Concern (collectively,
"Environmental Laws"). As used herein, "Environmental Laws" means and includes,
without limitation, those laws set forth in Title 49 of the Arizona Revised
Statutes; the Comprehensive Environmental Response, Compensation, and Liability
Act, 42 U.S.C. §§ 9601 et seq. ("CERCLA"); the Clean Air Act, 42 U.S.C. §§ 7401
et seq.; the National Environmental Policy Act, §§ 4321 et seq.; and the Clean
Water Act, 33 U.S.C. §§ 1251 et seq.

        (ii)   To the Knowledge of the Company, neither the Company nor any of
its Subsidiaries is in violation or non-compliance with any Permits or other
governmental authorizations required for the operation of the business of the
Company or its Subsidiaries under applicable Environmental Laws.

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        (iii)  Neither the Company nor any of its Subsidiaries has received any
written communication, whether from a Governmental Authority, citizens group,
employee or otherwise, that alleges that the Company or any of its Subsidiaries
is in violation of any Environmental Law.

        (iv)  There is no claim, action or cause of action filed with a court or
governmental authority, no investigation with respect to which the Company or
any of its Subsidiaries has received written notice, and no written notice by
any person or entity alleging potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resources damages, property
damages, personal injuries, attorneys' fees or penalties arising out of, based
on or resulting from the presence, or release into the environment, of any
Material of Environmental Concern at any location owned, leased or operated by
the Company or any of its Subsidiaries, now or in the past (collectively,
"Environmental Claims") pending or, to the Knowledge of the Company or any of
its Subsidiaries, threatened in writing against the Company or any of its
Subsidiaries or any person or entity whose liability for any Environmental Claim
the Company or any of its Subsidiaries has retained or assumed either
contractually or by operation of law; and

        (v)   To the Knowledge of the Company, there are no past or present
actions, activities, circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge, presence or disposal of
any Material of Environmental Concern (including CERCLA hazardous substances),
that would be reasonably expected to result in a violation of any Environmental
Law or form the basis of a potential Environmental Claim against the Company or
any of its Subsidiaries or any person or entity whose liability for any
Environmental Claim the Company or any of its Subsidiaries has retained or
assumed either contractually or by operation of law.

        (b)   To the Knowledge of the Company, the Company has not used or
permitted to be used, except in compliance with all Environmental Laws, any
freehold, leasehold and other real property interests or rights, or other rights
relating to the Mineral Rights (including licenses from landholders permitting
the use of land, leases, rights of way, occupancy rights, surface rights and
easements) to release, dispose, recycle, generate, manufacture, process,
distribute, use, treat, store, transport or handle any Hazardous Substance. To
the Knowledge of the Company, there are not Hazardous Substance on, in or under
any freehold, leasehold and other real property interests or rights, or other
rights relating to the Mineral Rights (including licenses from landholders
permitting the use of land, leases, rights of way, occupancy rights, surface
rights and easements) held, occupied or used, or formerly held, occupied or
used, by the Company or its Subsidiaries.

        (c)   None of the Company, its Subsidiaries, the Mineral Rights or any
real property of the Company or its Subsidiaries is subject to any current, nor,
to the Knowledge of the Company, any pending or threatened:

        (i)    claim, action, notice, demand, allegation, investigation,
proceeding, application, order, judgment, requirement or directive which relates
to environmental, natural resources, Hazardous Substances, human health or
safety matters, and which may require or result in any work, repairs,
rehabilitation, reclamation, remediation, construction, obligations, liabilities
or expenditures (and, to the Knowledge of the Company, there is no basis for
such a claim, action, notice, demand, allegation, investigation, proceeding,
application, order, judgment, requirement or directive); or

        (ii)   allegation, demand, direction, order, notice or prosecution with
respect to any Environmental Law applicable thereto including any Laws
respecting the use, storage, treatment, transportation, rehabilitation,
reclamation, remediation or disposition of any

22

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Hazardous Substance and the Company has not settled any allegation of
non-compliance with Environmental Laws prior to prosecution.

        (d)   The Company has provided to the Purchasers a true and complete
copy of each environmental audit, assessment, study or test of which it is aware
as of the date of this Agreement relating to the Holbrook Project and the
Mineral Rights, including any environmental and social impact assessment study
reports.

        (e)   To the Knowledge of the Company, there are no pending or proposed
changes to Environmental Laws that would render illegal or materially restrict
the operations of the Company, its Subsidiaries or the Holbrook Project.

        7.21    Intellectual Property.    Except as would not reasonably be
expected to be material to the Company and its Subsidiaries, taken as a whole,
the Company and each of its Subsidiaries, own or possess sufficient intellectual
property and proprietary rights, including, without limitation, trademarks,
service marks, trade names, patent rights, copyrights, licenses, approvals,
trade secrets and all other similar rights (collectively, the "Intellectual
Property Rights") reasonably necessary to conduct their business as now
conducted and the expected expiration of any of such Intellectual Property
Rights would not be material, individually or in the aggregate, to the Company
and its Subsidiaries, taken as a whole, and neither the Company nor any of its
Subsidiaries, has received any notice of infringements or conflict with asserted
Intellectual Property Rights which would reasonably be material, individually or
in the aggregate, to the Company and its Subsidiaries, taken as a whole.

        7.22    Taxes.    

        (a)   Except as would not, individually or in the aggregate, be material
to the Company and its Subsidiaries, taken as a whole: (i) the Company, since
February 11, 2011, and each of its Subsidiaries have timely filed or caused to
be filed all U.S. federal, state and foreign income, franchise and other Tax
returns and reports required to be filed by any of them or have properly
requested extensions thereof, and have paid or caused to be paid all Taxes
required to be paid by any of them and, if due and payable, any related or
similar assessment, fine or penalty levied against any of them, except, in each
case, any Taxes that are being contested in good faith by appropriate
proceedings and for which the Company and each of its Subsidiaries, as
applicable, has set aside on its books adequate accruals or reserves in
accordance with GAAP; and (ii) the Company has made adequate charges, accruals
and reserves, in accordance with GAAP, in its consolidated financial statements
contained in the Form 10-K for the fiscal year ended March 31, 2012 in respect
of all U.S. federal, state and foreign income, franchise and other Taxes for all
periods as to which the tax liabilities of the Company since February 11, 2011
or any of its Subsidiaries, has not been finally determined. Neither the Company
since February 11, 2011 nor any of its Subsidiaries has received written notice
from any Taxing authority that it has failed to timely file any Tax return or
failed to timely pay any Taxes owed by it.

        (b)   The Common Stock is (i) traded on a national securities exchange
which is registered under Section 6 of the Exchange Act, and (ii) regularly
quoted by brokers or dealers holding themselves out to buy or sell the Common
Stock at such quoted price, all within the meaning of Code Section 897 and the
Treasury Regulations thereunder.

        7.23    Compliance with ERISA.    Except as would not reasonably be
expected, either individually or in the aggregate, to be material to the Company
and its Subsidiaries, taken as a whole: the Company and its Subsidiaries and all
"employee benefit plans" (as defined under Section 3(3) of ERISA) established or
maintained by the Company, its Subsidiaries or their ERISA Affiliates have been
and are in compliance with their respective terms and all applicable Laws,
including ERISA and the Code; to the Knowledge of the Company, each
Multiemployer

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Plan to which the Company, its Subsidiaries or an ERISA Affiliate contributes is
in compliance with its terms and all applicable Laws, including ERISA and the
Code; no "reportable event" (as defined under Section 4043 of ERISA) has
occurred or is reasonably expected to occur with respect to any Benefit Plan; no
"single employer plan" (as defined in Section 4001 of ERISA) established or
maintained by the Company, its Subsidiaries or any ERISA Affiliate, if such plan
were terminated, would have any "amount of unfunded benefit liabilities" (within
the meaning of Section 4022(c) of ERISA), and each such plan satisfies the
minimum funding standards set forth in Sections 412 and 430 of the Code and
Sections 302 and 303 of ERISA, whether or not waived; neither the Company, its
Subsidiaries nor any of their ERISA Affiliates has incurred or reasonably
expects to incur any unsatisfied liability under (a) Title IV of ERISA with
respect to termination of any Benefit Plan, or withdrawal from any Multiemployer
Plan, or (b) Sections 412, 4971, 4975 or 4980B of the Code; the PBGC has not
instituted proceedings to terminate any Benefit Plan, and no condition exists
that would reasonably be expected to result in such proceedings being instituted
or which would constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan;
with respect to each Benefit Plan, all premiums to the PBGC have been timely
paid in full; there does not now exist, nor do any circumstances exist that
would reasonably be expected to result in any liability (x) under Title IV or
Section 302 of ERISA, (y) under Sections 412 and 4971 of the Code or (z) as a
result of a failure to comply with the continuation coverage requirements of
Section 601 et seq. of ERISA and Section 4980B of the Code, and without limiting
the generality of the foregoing, neither the Company nor any of its
Subsidiaries, nor any of their respective ERISA Affiliates, has engaged in any
transaction described in Section 4069 or Section 4204 or 4212 of ERISA; the
Company and its Subsidiaries have no liability for life, health, medical or
other welfare benefits to former employees or beneficiaries or dependents
thereof, except for health continuation coverage as required by Section 4980B of
the Code or Part 6 of Title I of ERISA and at no expense to the Company and its
Subsidiaries; and with respect to each "employee benefit plan" for which the
Company, its Subsidiaries or any of their ERISA Affiliates would have any
liability that is intended to be qualified under Section 401 of the Code (and
the related trust), the Internal Revenue Service has issued a favorable
determination letter that has not been revoked, there are no circumstances and
no events have occurred that could adversely affect the qualified status of any
such plan (or related trust), and nothing has occurred, whether by action or
failure to act, which would cause the loss of such qualification.

        7.24    Material Labor Disputes; Labor Laws.    Employees of the Company
and its Subsidiaries are not represented by any labor union nor are any
collective bargaining agreements otherwise in effect with respect to such
employees. No labor organization or group of employees of the Company or any of
its Subsidiaries has made a pending demand for recognition or certification, and
there are no representation or certification proceedings or petitions seeking a
representation proceeding presently pending or threatened to be brought or
filed, with the National Labor Relations Board or any other labor relations
tribunal or authority. There are no pending or, to the Knowledge of the Company,
threatened strikes, lockouts, slowdowns or other material labor disputes against
the Company or any of its Subsidiaries. To the best of the Knowledge of the
Company, the hours worked by and payments made to employees of the Company and
each of its Subsidiaries have not been in material violation of the Fair Labor
Standards Act or any other applicable federal, state, local or foreign law
dealing with such matters. Except for payroll yet to be paid for the Company's
current payroll cycle (estimated to be in the rough amount of approximately
$150,000) and, as would otherwise not reasonably be expected, individually or in
the aggregate, to be material to the Company and its Subsidiaries, taken as a
whole, all payments known to be due from the Company and each Guarantor, or for
which any known claim has been made against the Company and each Guarantor, on
account of wages and employee health and welfare insurance and other benefits,
have been paid or accrued as a liability on the books of the

24

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Company and each of its Subsidiaries. The consummation of the Transactions will
not give rise to any right of termination or right of renegotiation on the part
of any union under any collective bargaining agreement to which the Company or
any of its Subsidiaries is bound. It is understood that the Company may need to
create new positions and in doing so restructure the Company's personnel and
contractor relations in connection with its continuing operations, which will be
funded in part by the proceeds from the Transaction.

        7.25    Mineral Rights.    Except as would not adversely affect the
Company's ability to economically construct and operate a potash mine and
related facilities with respect to such Mineral Rights or otherwise conduct its
operations with respect to such Mineral Rights or as previously disclosed to the
Purchasers in writing by the Company:

        (a)   Schedule 7.25(a) describes all Mineral Rights as of the date
hereof. The Company and its Subsidiaries holds all licenses and has all
interests in any mineral interests, mining concessions, mining tenements or
other mineral rights necessary or appropriate to authorize and enable the
Company and its Subsidiaries to explore, develop, construct or operate the
Holbrook Project as contemplated as of the date hereof. As of the date of the
final Definitive Feasibility Study, the Company and its Subsidiaries will hold
all licenses and have all interests in any mineral interests, mining
concessions, mining tenements or other mineral rights necessary or appropriate
to authorize and enable the Company and its Subsidiaries to explore, develop,
construct or operate the Holbrook Project as contemplated in the Definitive
Feasibility Study.

        (b)   The Mineral Rights have been properly located and recorded in
compliance with applicable Laws and, in respect of the Mineral Rights, are
comprised of valid and subsisting mineral claims.

        (c)   The Company or its Subsidiaries is the sole registered and
beneficial owner of the Mineral Rights, with good and marketable title thereto,
free and clear of any title defect or Liens.

        (d)   The Mineral Rights constitute all of the right, title and interest
necessary or appropriate to authorize and enable the Company to explore,
develop, construct or operate the Holbrook Project as contemplated as of the
date hereof.

        (e)   The Company has the right, free and clear of any Liens, to access
and use the surface area where all of the Mineral Rights are located necessary
to explore, develop, construct or operate the Holbrook Project as contemplated
as of the date hereof, and the Company has paid to all surface area owners all
rent, royalties, indemnification or other amounts to which they are entitled,
whether pursuant to any contract or by Law.

        (f)    The Company has the exclusive right to deal with the Mineral
Rights, and there are no restrictions on the ability of the Company to use,
transfer or exploit the Mineral Rights except pursuant to applicable Laws.

        (g)   No Person other than the Company has any interest in the
production or profits to be obtained in the future from the Mineral Rights or
any royalty in respect thereof or any right to acquire such interest.

        (h)   There are no farm-in or earn-in rights, rights of first refusal or
similar rights or provisions which could materially affect the Mineral Rights
other than as disclosed in Item 3 of Schedule 7.18.

        (i)    The Company has not received any notice, whether written or oral,
from any Governmental Authority or any Person, of any revocation or intention to
revoke the interest of the Company in any Mineral Rights.

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        (j)    The Mineral Rights are in good standing under applicable Laws;
all work required to be performed has been performed and all Taxes, rentals,
fees, expenditures and other payments in respect thereof have been paid or
incurred and all filings in respect thereof have been made.

        (k)   All mining operations and all exploration activities in respect of
the Mineral Rights have been conducted in accordance with good mining and
engineering practices and all material workers' compensation and health and
safety regulations have been complied with.

        (l)    There are no Claims that have been commenced, are pending or, to
the Knowledge of the Company, are threatened against the Company, nor is there a
state of facts or events that may give rise thereto, which could affect the
title to or right to explore or develop the Mineral Rights.

        7.26    Insurance Coverage.    The Company and its Subsidiaries carry,
or are covered by, insurance with insurers of recognized financial
responsibility in such amounts, with such deductibles and covering such risks as
the Company and its Subsidiaries deem adequate and prudent for the conduct of
their respective businesses and the value of their respective properties and as
is customary for companies engaged in similar businesses. The Company and its
Subsidiaries have no reason to believe that such insurance coverage cannot be
renewed as and when such coverage expires or that similar coverage could not be
obtained from similar insurers at a cost that would not reasonably be expected
to be material to the Company and its Subsidiaries, taken as a whole (other than
as a result of general market conditions). As of the date hereof, neither the
Company nor any of its Subsidiaries has (a) received notice from any insurer or
agent of such insurer that a material amount of capital improvements or other
expenditures are required or necessary to be made in order to continue such
insurance or (b) any notice from its insurers that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage at reasonable cost from similar insurers as may be necessary to
continue its business.

        7.27    Restrictions on Subsidiaries.    Except as provided in the
Karlsson Agreements, no Subsidiary of the Company is currently prohibited,
directly or indirectly, under any agreement or other instrument to which it is a
party or is subject, from paying any dividends to the Company, from making any
other distribution on such Subsidiary's capital stock, from repaying to the
Company any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary's properties or assets to the Company or any
other Subsidiary of the Company.

        7.28    No Registration Rights.    Schedule 7.28 sets forth all
agreements as of the date hereof pursuant to which any Person has the right to
require the Company or any of its Subsidiaries to register any securities for
sale under the Securities Act. After the date hereof, other than pursuant to the
Investors Rights Agreement or as consented to by the Majority Purchasers, no
Person has received the right to require the Company or any of its Subsidiaries
to register any securities for sale under the Securities Act.

        7.29    Antitakeover Provisions.    The Company's Board of Directors has
taken all necessary actions so that no "business combination," "control share
acquisition," or similar anti-takeover law or regulation is applicable to the
Transactions, including with respect to the issuance of the Securities or to the
execution, delivery or performance of this Agreement and the consummation of the
Transactions.

        7.30    No General Solicitation.    None of the Company or any of its
Affiliates (as defined in Rule 501(b) of Regulation D under the Securities Act),
has, directly or through an agent, engaged in any form of general solicitation
or general advertising in connection with the offering of the Securities (as
those terms are used in Regulation D) under the Securities Act or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act, and the Company has not entered

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into any contractual arrangement with respect to the distribution of the
Securities except for this Agreement.

        7.31    Material Contracts.    All Material Contracts of the Company or
its Subsidiaries existing on the date hereof are contained in the Company's
electronic data room maintained through Merrill Corporation, and (a) the Company
is not, and, to the Knowledge of the Company, no other person is as of the date
hereof, in default under any Material Contract and (b) no notice of default or
breach has been received or delivered by the Company under any Material
Contract, the resolution of which is currently outstanding, and to the Knowledge
of the Company no event or circumstances are occurring, have occurred or exist
which would, but for the passage of time, constitute an event of default under
any Material Contract, including any contracts entered into in connection with,
or otherwise relating to, the Karlsson Purchase.

        7.32    Voting Agreements.    To the Knowledge of the Company, except
for the Support Agreements entered into in connection with the Transactions, as
of the date hereof, there are no existing voting or similar agreements between
the Company's shareholders which could reasonably be expected to adversely
affect the ability of the Company to perform its obligations under this
Agreement.

        7.33    Compliance with Money Laundering Laws.    The operations of the
Company and its Subsidiaries are and have been conducted at all times in
compliance with applicable financial recordkeeping and reporting requirements of
the Currency and Foreign Transactions Reporting Act of 1970, as amended, the
applicable money laundering statutes of jurisdictions where the Company and its
Subsidiaries conduct business, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the "Money Laundering Laws")
and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
Subsidiaries with respect to the Money Laundering Laws is pending or, to the
Knowledge of the Company, threatened.

        7.34    Compliance with OFAC.    Neither the Company nor any of its
Subsidiaries nor, to the Knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company or any of its Subsidiaries, is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department ("OFAC"). The Company will not, directly
or indirectly, use the proceeds of the offering contemplated hereby, or lend,
contribute or otherwise make available such proceeds to any person currently
subject to any U.S. sanctions administered by OFAC.

        7.35    Compliance with Other Laws, Regulations and Instruments.    The
Company and each of its Subsidiaries is in compliance with all Laws, regulations
and orders (including any Environmental Laws, the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act (USA PATRIOT ACT) of 2001, Pub. L. 107-56, as it may be amended or
otherwise modified from time to time (the "Patriot Act"), margin regulations and
ERISA) of any governmental agency or body applicable to it or its property and
all indentures, agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in the aggregate,
would not reasonably be expected to be material to the Company and its
Subsidiaries, taken as a whole.

        7.36    Solvency.    Immediately after giving effect to the
Transactions, the Company and its Subsidiaries on a consolidated basis, will be
Solvent.

        7.37    Use of Proceeds.    The Company will apply the proceeds of the
sale of the Securities as set forth in Section 15.1.

        7.38    Brokers' Fees.    No Person is entitled to any brokerage,
financial advisory, finder's or similar fee or commission payable by any party
hereto in connection with the Transactions based upon arrangements made by or on
behalf of the Company.

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        7.39    Collateral Documents.    The Collateral Documents, when executed
and delivered to the extent required herein, will create legal and valid Liens
on all the Collateral in favor of the Collateral Agent, for the benefit of the
Purchasers and the other holders of Obligations, and such Liens will constitute
perfected and continuing Liens on the Collateral, securing the Obligations,
enforceable against the applicable Obligor, and having priority over all other
Liens on the Collateral, except (a) Liens resulting from mandatory provisions of
applicable law and (b) Liens specifically and expressly permitted to be incurred
by this Agreement on a senior basis to the Obligations.

ARTICLE VIII

REPRESENTATIONS OF THE PURCHASERS

        Each of the Purchasers represents and warrants, solely as to itself, and
on a several, not joint basis, to the Company that:

        8.1    Organization; Power and Authority.    Such Purchaser is duly
organized or incorporated, validly existing and in good standing under the laws
of the jurisdiction of its organization or incorporation, with all requisite
power and authority (corporate or other) to own its properties and carry on its
business as now conducted and as proposed to be conducted, and is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required, or is subject to no material liability or disability
by reason of the failure to be so qualified or in good standing in any such
jurisdiction.

        8.2    Execution; Due Authority.    

        (a)   The execution, delivery and performance of this Agreement, the
Investors Rights Agreement and the Royalty Agreement (and all other documents
required to be executed and delivered by each Purchaser and the consummation of
the Transactions), to the extent such Purchaser is a party to such agreements,
have been duly and validly authorized by all necessary corporate action on the
part of such Purchaser.

        (b)   This Agreement, the Investors Rights Agreement and the Royalty
Agreement, to the extent such Purchaser is a party to such agreements, have been
duly executed and delivered by such Purchaser (and all documents required to be
executed and delivered by such Purchaser at Closing will be duly executed and
delivered by such Purchaser), and this Agreement constitutes, and at the Closing
(assuming the due and valid execution and delivery of such documents by the
other parties thereto) such documents will constitute, the valid and binding
obligations of such Purchaser, enforceable in accordance with their terms,
except for the Enforceability Exceptions.

        8.3    No Conflicts.    The purchase of the Securities and the
compliance by such Purchaser with all of the provisions of the Notes and this
Agreement and the consummation of the Transactions will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or give rise to any right of termination,
cancellation, payment or acceleration under, any contract, indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which such
Purchaser is a party or by which such Purchaser is bound or to which any of the
property or assets of such Purchaser is subject, nor will such action result in
any violation of the provisions of the organizational documents of such
Purchaser or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over such Purchaser or any of
its properties, except, with respect to any of the foregoing (other than the
violation of the provisions of such Purchaser's organizational documents), as
would not reasonably be expected to have a material adverse effect on the
ability of such Purchaser to perform its obligations under this Agreement or
otherwise materially threaten or materially impede the consummation of the
Transactions.

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        8.4    Purchase for Investment.    Each Security Purchaser severally
represents that it (a) is purchasing the Notes for its own account or for one or
more separate accounts maintained by such Purchaser or for the account of one or
more pension or trust funds and not with a view to the distribution thereof;
provided, however, that the disposition of such Purchaser's property shall at
all times be within such Purchaser's control and (b) understands that the Notes
have not been registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not and will not be required to register the Notes.

        8.5    Accredited Investor.    Each Purchaser hereby represents and
warrants to and agrees with the Company that it (a) is an "accredited investor"
within the meaning of Rule 501 under the Securities Act and, with respect to
each Person who is a Purchaser as of the date hereof, a "qualified institutional
buyer" within the meaning of Rule 144A under the Securities Act , (b) has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of an investment in the Notes and it is able to
bear the economic risk of such investment and (c) has had the opportunity to
perform due diligence with respect to the Company and the Transactions and to
ask questions of and receive answers from the Company in respect thereof.

        8.6    Brokers' Fees.    No Person is entitled to any brokerage,
financial advisory, finder's or similar fee or commission payable by any Party
hereto in connection with the Transactions based upon arrangements made by or on
behalf of the Purchasers.

ARTICLE IX

CERTAIN INTERIM COVENANTS

        9.1    Operation of Business.    The Company covenants and agrees that,
between the date of this Agreement and the Closing, unless the Majority
Purchasers shall otherwise agree in writing, the Company shall, and shall cause
its Subsidiaries to, (i) operate and maintain its assets in the ordinary course
of business consistent with past practice, (ii) use commercially reasonable
efforts, consistent with existing practices, to keep available the services of
its employees and preserve relationships with all of its customers, suppliers,
licensors, licensees, distributors, regulators and creditors and (iii) use its
commercially reasonable efforts to preserve substantially intact its business
organization. Without limitation to the foregoing, except as contemplated or
permitted by this Agreement or as set forth in Schedule 9.1, the Company shall
not (and shall cause its Subsidiaries not to), between the date of this
Agreement and the Closing Date, directly or indirectly, do, or propose to do,
any of the following without the prior written consent of the Majority
Purchasers (which consent will not be unreasonably withheld for approvals
contemplated by Sections 9.1(a), (b) (except for the size of the Board of
Directors), (d), (g), (h), (n), (p), (q)(ii), (r), (s), and (v) (solely to the
extent with respect to the foregoing clauses), so long as such actions do not
have an adverse effect on the economic or governance interests of the
Purchasers):

        (a)   except for filing the Certificate of Designation, amend or
otherwise change, or waive any provision of, its articles of incorporation or
bylaws (or similar organizational documents), except for non-material changes
undertaken for routine or administrative reasons which do not adversely affect
the Purchasers;

        (b)   alter the size or powers of the Board of Directors (or creating or
altering the size or powers of any committee thereof), except (i) that the
Company shall be permitted to increase the size of its Board of Directors by one
member solely in connection with the grant of a director designation right to
new investors in connection with capital-raising transactions occurring after
the

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date hereof and (ii) for non-material changes to the powers of the Board of
Directors or any committee undertaken for routine or administrative reasons;

        (c)   issue, sell, register for sale, pledge, dispose of, grant,
encumber or authorize the issuance, sale, registration, pledge, disposition,
grant or encumbrance of any shares of capital stock of any class of the Company
or of its Subsidiaries (including Common Stock), or any Options, Convertible
Securities or other rights of any kind to acquire any shares of such capital
stock, or any other ownership interest (including any phantom interest), of the
Company or of its Subsidiaries, except for the:

        (i)    issuance of Common Stock (x) prior to the receipt of the
Requisite Shareholder Approval, to the Persons listed on Schedule 9.1, unless
such issuance would result in any such Person (collectively with its Affiliates
and Associates) Beneficially Owning seven and one-half percent (7.5%) or more of
the then-outstanding Common Stock or other equity of the Company (or voting
power of the Company for the election of directors) or, (y) from and after the
receipt of the Requisite Shareholder Approval, (A) in an underwritten public
offering involving a broad-based distribution or (B) to any Person, unless such
issuance would result in any such Person (collectively with its Affiliates and
Associates) Beneficially Owning seven and one-half percent (7.5%) or more of the
then-outstanding Common Stock or other equity of the Company (or voting power of
the Company for the election of directors));

        (ii)   from and after the receipt of the Requisite Shareholder Approval,
issuance to any Person or Persons of an amount of Permitted Preferred Stock
that, when aggregated with the amount of all prior and simultaneous permitted
issuances of Permitted Preferred Stock and Permitted Junior Debt, does not
exceed $75 million in the aggregate;

        (iii)  the issuance of the Notes to the Purchasers at the Closing; or

        (iv)  the issuance of shares of Common Stock, Options or other
securities to employees, directors or consultants (who are natural persons) of
the Company pursuant to Benefit Plans existing on the date hereof, as amended
from time to time in accordance with Section 9.1(q)(i);

        (d)   sell, transfer, assign, mortgage, pledge, dispose of, encumber or
authorize the sale, transfer, assignment, mortgage, pledge, disposition, or
encumbrance of any material assets or properties of the Company or any of its
Subsidiaries, except (A) in the ordinary course of business and in a manner
consistent with past practice, (B) pursuant to the Karlsson Agreements, as in
effect on the date hereof, or (C) acquisitions or dispositions for cash
consideration of assets with a value of less than $200,000 individually or in
excess of $500,000 when aggregated with all other dispositions in a twelve
(12)-month period;

        (e)   declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock (except for such declarations, set-asides, dividends and
other distributions made to or from any Subsidiary to or from the Company);

        (f)    reclassify, combine, split or subdivide, or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock, except in
connection with transactions between the Company and its wholly owned
Subsidiaries and transactions among the Company's wholly owned Subsidiaries;

        (g)   except with respect to the acquisition of real property or
interests in real property (which is covered by clause (h) below), acquire, in
any individual or related series of acquisitions, assets, securities or
businesses, whether by purchase, transfer, assignment or otherwise, whether
direct or indirect, and including investments in or formation of partnerships or
joint ventures with third

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parties, with a value in excess of $500,000 individually or $2,000,000 in any
twelve (12)-month period when aggregated with all other acquisitions;

        (h)   acquire, in any individual or related series of acquisitions, any
real property or interests in real property (including Mineral Rights) with a
value in excess of $750,000 or in excess of $1,500,000 in any twelve (12)-month
period when aggregated with all other acquisitions;

        (i)    incur any Indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an accommodation
become responsible for, the obligations of any Person (other than obligations of
the Company or the Company's wholly owned Subsidiaries), or make any loans or
advances, except, from and after the receipt of the Requisite Shareholder
Approval, an amount of Permitted Junior Debt that, when aggregated with the
amount of all prior and simultaneous permitted issuances of Permitted Preferred
Stock and Permitted Junior Debt, does not exceed $75 million in the aggregate;

        (j)    repay or redeem any Indebtedness for borrowed money or debt
securities outstanding as of the date of this Agreement, except for (i) the
Karlsson Note, (ii) scheduled repayments of principal and interest in accordance
with the terms of any such Indebtedness or debt securities and (iii) repayments
and redemptions in the ordinary course of business consistent with past
practice;

        (k)   other than pursuant to the Royalty Agreement and the Grandhaven
Agreement, selling or granting of any royalty (or similar) interests in, or
other rights to payment based on the revenue of, the Company or its Subsidiaries
or any assets or rights of the Company or its Subsidiaries; provided, that the
Company shall be permitted to grant royalties in connection with the acquisition
of property in the ordinary course of business, if (a) such royalty interests
are granted to the seller of the acquired property and relate solely to the
acquired property; and (b) either (i) such royalty interests are granted in
connection with acquisitions of state-owned property, where the size of all
state-owned properties as to which royalties are sold or granted under this
proviso in any twelve (12)-month period does not exceed 1,500 acres in the
aggregate and the royalties granted are substantially consistent with the
published guidelines of the Arizona State Land Department, or (ii) the size of
all non-state-owned properties as to which royalties are sold or granted under
this proviso in any twelve (12)-month period does not exceed 500 acres in the
aggregate and such royalty grants to the recipient only a percentage interest in
gross Potash production from the acquired property, not to exceed the following
percentages:

        (i)    two percent (2%) if Potash produced from the acquired property is
sold at $200/tonne or less;

        (ii)   three percent (3%) if Potash produced from the acquired property
is sold at a price less than or equal to $300/tonne but greater than $200/tonne;

        (iii)  four percent (4%) if Potash produced from the acquired property
is sold at a price less than or equal to $400/tonne but greater than $300/tonne;

        (iv)  five percent (5%) if Potash produced from the acquired property is
sold at a price less than or equal to $500/tonne but greater than $400/tonne;
and

        (v)   six percent (6%) if Potash produced from the acquired property is
sold at a price greater than $500/tonne;

        (l)    making any material changes to the nature of the business of the
Company or its Subsidiaries or entry into any new business lines, including
(i) entering into the ownership, management, development or operation of any
line of business not conducted as of the date of this Agreement by the Company
and its Subsidiaries or (ii) materially changing or exiting any line of business
conducted as of the date of this Agreement by the Company and its Subsidiaries;

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        (m)  discontinuing the Company's status as a public company or
SEC-reporting company, changing the Company's jurisdiction of organization, or
applying to list (or materially altering or terminating its listing) on any
stock exchange;

        (n)   pay, discharge, settle or satisfy any material litigation,
arbitration, proceeding, claim, liability or obligation (absolute or accrued,
asserted or unasserted, contingent or otherwise), except with respect to any
such proceedings or claims disclosed in the Company SEC Documents on or prior to
the date hereof;

        (o)   amending, waiving or otherwise modifying any terms of any
contracts entered into in connection with, or otherwise relating to, the
Karlsson Purchase, or entering into any new contracts with Karlsson or its
Affiliates that adversely affect the Purchasers in any respect, as determined in
good faith by the Majority Purchasers;

        (p)   enter into, renew, extend, materially amend or terminate any
contract with any EPCM or EPC firm, or any contract relating to shaft sinking;

        (q)   (i) accelerate any vesting of compensation or benefits or pay any
compensation or benefits not otherwise due to employees of the Company or any of
its Subsidiaries or enter into, adopt or amend any Benefit Plan (including any
employment agreements), other than (A) adopting a 401(k) plan (on terms
customary for the industry in which the Company operates) or (B) as required by
applicable Law, a Benefit Plan in existence as of the date hereof or a contract
in existence as of the date hereof or (ii) increase or enhance the compensation
or benefits of any employees of the Company or any of its Subsidiaries, other
than as required by applicable Law or as required pursuant to the terms of any
contract as in effect on the date of this Agreement, by more than 3% annually,
or in the case of any employee (other than the chief executive officer, chief
operating officer or chief financial officer) whose responsibilities have been
increased, by more than 10%;

        (r)   change its methods of accounting (other than Tax accounting, which
shall be governed by clause 9.1(s) below), except in accordance with changes in
GAAP as concurred in by the Company's independent auditors;

        (s)   except (i) to the extent required or appropriate to conform to
changes in applicable Tax Law, regulatory accounting requirements or GAAP or
(ii) in the ordinary course of business consistent with past practice, enter
into any closing agreement with respect to material Taxes, settle or compromise
any material liability for Taxes, make, revoke or change any material Tax
election, agree to any adjustment of any material Tax attribute, surrender any
claim for a material refund of Taxes, execute or consent to any waiver extending
the statutory period of limitations with respect to the collection or assessment
of material Taxes, file any material amended Tax return or obtain any material
Tax ruling, change any annual Tax accounting period, adopt or change any method
of Tax accounting, or enter into any Tax allocation agreement, Tax sharing
agreement, Tax indemnity agreement or closing agreement relating to any material
Tax;

        (t)    enter into any new, or amend or otherwise alter, any transaction
with any Affiliate or Associates of the Company or its Subsidiaries, other than
(i) transactions solely among the Company and its Subsidiaries and (ii) the
Royalty Agreement;

        (u)   (i) commencing a voluntary case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to the Company or any of its
Subsidiaries, or seeking to adjudicate the Company or any of its Subsidiaries
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to the Company or any of its Subsidiaries or any indebtedness of the Company or
any of its Subsidiaries, or (B) seeking

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appointment of a receiver, trustee, custodian or other similar official for the
Company or any of its Subsidiaries or for all or any substantial part of the
Company or any of its Subsidiaries' assets, (ii) the making of a general
assignment for the benefit of the Company or any of its Subsidiaries's creditors
or (iii) liquidation, dissolution, reorganization or merger of or involving the
Company or any of its Subsidiaries; or

        (v)   enter into any contract or otherwise obligate the Company or its
Subsidiaries to do any of the foregoing.

        9.2    Access to Information; Consultation.    

        (a)   From the date of this Agreement until the Closing Date, upon
reasonable prior notice, the Company shall, and shall cause its Subsidiaries to,
(i) afford the Representatives of the Purchasers reasonable access, during
normal business hours, upon reasonable notice, to the offices, properties, books
and records of the Company and its Subsidiaries, (ii) furnish or cause to be
furnished to the Representatives of the Purchasers such additional financial and
operating data and other information regarding the Company and its Subsidiaries
as the Purchasers may from time to time reasonably request (including furnishing
to the Purchasers the Company's financial results in advance of any filing of
any Company SEC Document containing such financial results), and
(iii) instructing the employees, counsel, financial advisors, auditors and other
Representatives of the Company and its Subsidiaries to cooperate reasonably with
the Purchasers in its investigation of the Company and its Subsidiaries. No
information or knowledge obtained by the Purchasers in any investigation
pursuant to this Section 9.2 shall affect or be deemed to modify any
representation and warranty made by the Company in Article VII.

        (b)   Without limitation of Section 9.2(a), until the Closing Date, the
Company shall provide the Purchasers:

        (i)    the information contemplated by Sections 14.1(a) and (b),
provided, at any time during which the Company or any of its Subsidiaries is
subject to the periodic reporting requirements of the Exchange Act or
voluntarily reports thereunder, the Company may satisfy its obligations pursuant
to this Sections 9.2(b)(i) by filing or causing any of its subsidiaries to file
with the SEC (via the EDGAR system) on a timely basis annual and quarterly
reports including financial statements of the Company and its Subsidiaries and
satisfying the requirements of the Exchange Act;

        (ii)   as soon as available, (A) a copy of the operating and capital
expenditure budgets for the Company and its Subsidiaries for such fiscal year,
(B) monthly construction progress reports (containing detail on budget, schedule
and key metrics), (C) monthly management accounts and periodic information
packages relating to the operations and financial performance of the Company and
its Subsidiaries, in each case in such form as the Company and its Subsidiaries
prepare in the ordinary course of business, (D) a copy of all information
packages (and any other materials, documents or information) provided to the
board of directors (or similar governing body) of any of the Company and its
Subsidiaries or any director thereof (including notices, minutes, consents and
regularly or specially compiled financial and operating data distributed to the
members of such board or body at the same time as such materials are distributed
to such board or body) and (E) a copy of any information or reporting packages
(and any other materials, certificates, documents or other information) provided
directly or indirectly (including through trustees or other agents) to any or
all lenders to or debt financing sources of the Company and its Subsidiaries;

        (iii)  (A) copies of draft applications for any Necessary Permits with
respect to the Holbrook Project no later than five (5) Business Days prior to
the anticipated filing of such application, (B) copies of any Permits received
by the Company or its Subsidiaries with respect to the

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Holbrook Project within five (5) Business Days of receipt, (C) copies of any
material correspondence with any Governmental Authority with respect to any
Permits within two (2) Business Days of receipt and (D) regular updates on any
material conversations with any Governmental Authority with respect to any
Permits or status of Necessary Permits;

        (iv)  regular updates regarding any discussions regarding financing
arrangements for the Holbrook Project with any source or potential source of the
Project Financing Facility, including notification of any material developments
or changes in terms, and a copy of any term sheets or draft documentation
relating thereto. The Company shall consult with the Purchasers on a regular
basis with regard to the Project Financing Facility and give due consideration
to all reasonable advice and input suggested by the Purchasers in connection
with the Project Financing Facility;

        (v)   prompt written notice upon it becoming aware of (x) the breach of
any of its representations or warranties hereunder or of any of its or its
Subsidiaries' covenants hereunder or (y) any fact, occurrence or development
that may reasonably result in the non-satisfaction of any of the conditions in
Article VI; and

        (vi)  upon the request of any Purchaser, an update meeting or telephone
conference with the Purchasers on the status of the progress of the Definitive
Feasibility Study, and a copy of any materially updated draft of the Definitive
Feasibility Study within two (2) Business Days of receipt.

        (c)   Without prejudice to the consent rights of the Purchasers
contained in Section 9.1, the Company shall consult with the Purchasers, and in
good faith consider any comments or advice from the Purchasers, prior to and in
the course of taking any of the following actions (and shall provide the
Purchasers with regular updates to the status of discussions and negotiations
with respect to any such actions): (i) retention of any third-party consultant,
advisor or finder/broker, (ii) retention or replacement of any senior manager or
officer, (iii) any debt or equity financing transactions, (iv) acquisition or
disposition of a material amount of assets (including real property or Mineral
Rights), (v) any actions with respect to the Karlsson Agreements, (vi) entry
into or modification of any off-take or other long-term purchase agreements for
Potash or any other Material Contract of the Company or its Subsidiaries,
(vi) compensation decisions with respect to officers or employees and
(vii) litigation involving the Company, its Subsidiaries or their assets.

        9.3    Reasonable Best Efforts.    

        (a)   Subject to the terms and conditions of this Agreement, the Company
shall use its reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable under
applicable Law to consummate the Transactions, including (i) preparing and
filing as promptly as practicable with any Governmental Authority or other third
party all documentation to effect all necessary filings, notices, petitions,
statements, registrations, submissions of information, applications and other
documents, (ii) obtaining and maintaining all approvals, consents,
registrations, permits, authorizations and other confirmations required to be
obtained from any Governmental Authority or other third party that are
necessary, proper or advisable to consummate the Transactions, (iii) executing
and delivering all documents required to be executed and delivered at each of
the Closings and (iv) vigorously defending or contesting any litigation or
administrative proceeding, and seeking to have vacated, lifted, reversed or
overturned any order, decree, injunction or ruling (whether temporary,
preliminary or permanent) that is in effect, and that seeks to or would
prohibit, prevent, enjoin or materially restrain or delay the consummation of
the Transactions.

        (b)   The Purchasers and the Company shall (i) promptly notify each
other of any communication concerning this Agreement or the Transactions
received by each of them from any Governmental Authority and permit the other to
review in advance any proposed communication concerning this Agreement, or the
Transactions to any Governmental Authority; (ii) not participate or agree to

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participate in any meeting or discussion with any Governmental Authority in
respect of any filing, investigation or other inquiry concerning this Agreement,
or the Transactions unless it consults with the other in advance and, to the
extent permitted by such Governmental Authority, gives the other the opportunity
to attend and participate in such meeting or discussion; and (iii) furnish each
other with copies of all correspondence, filings and communications (and
memoranda setting forth the substance thereof) between such party and its
Affiliates and Representatives on the one hand, and any Governmental Authority
or members of any such authority's staff on the other hand, with respect to this
Agreement and the Transactions.

        (c)   The Purchasers and the Company each agrees that, from and after
the date hereof and prior to the Closing Date, and except as may be agreed in
writing by the other parties hereto or as may be permitted pursuant to this
Agreement, it shall not, and shall not permit any of its Subsidiaries to, take
any action (or agree to take any action) which could reasonably be expected to
delay the consummation of the Transactions or result in the failure to satisfy
any condition to the consummation of the Transactions (it being understood and
agreed that this Section 9.3(c) shall in no event limit any party's right to
terminate this Agreement in accordance with Article X).

        (d)   Prior to any conversion of the Notes or any exercise of the Apollo
Warrants, the Company and the Majority Purchasers will determine if such
conversion or exercise, as applicable, will be subject to any filing or
notification requirement under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, or any similar requirement of any Governmental Authority.
If such conversion or exercise, as applicable, is subject to any such
requirement, the Company and the applicable Purchaser(s) will use commercially
reasonable efforts to make any required filings or notifications as soon as
practicable, will observe any applicable waiting periods and will make all
commercially reasonable efforts to cause the termination of any such waiting
periods or the removal of any other impediments to conversion or exercise, as
applicable. The Parties will furnish to each other such information and
assistance as may be necessary to ensure the expiration of any applicable
waiting period or the removal of any other impediment to the consummation of
such conversion or exercise, as applicable. The Parties will keep each other
informed of any communications with any Governmental Authority with respect to
the foregoing. The Majority Purchasers shall direct any proceedings,
negotiations or communications with any Governmental Authority with respect to
the foregoing.

        9.4    Reservation of Shares.    The Company shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock
solely for the purpose of issuing and selling shares of Common Stock upon
exercise of the Apollo Warrants at the then current Warrant Price (as defined in
each of the Apollo Warrants), conversion of the Notes at the then current
Conversion Price and pursuant to Section 9.8; and if at any time the number of
shares required to be reserved exceeds seventy-five percent (75%) of the
Company's authorized but unissued shares of Common Stock, the Company shall take
such corporate action as may be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purpose. All shares of Common Stock issued and sold upon exercise of
the Apollo Warrants, conversion of the Notes or pursuant to Section 9.8 shall be
validly issued, fully paid, nonassessable and free and clear of any Liens. The
Company shall use its reasonable best efforts to cause all such shares of Common
Stock to be approved for listing on the Principal Market, subject to official
notice of issuance.

        9.5    Shareholders Meeting.    The Company will take, in accordance
with applicable Law and the Company Organization Documents, all action necessary
to convene a meeting of its shareholders (the "Shareholders Meeting") as
promptly as practicable after the date hereof (and in no event later than thirty
(30) days after the date that the SEC has informed the Company that it has no
further comments on, or does not intend to review, the Proxy Statement), to
consider and vote upon the Transactions, regardless of whether the Board of
Directors of the Company determines at any time that the Transactions are no
longer advisable or recommends that the shareholders of the Company reject them
or any other Adverse Recommendation Change has occurred at any time. The Board
of Directors of

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the Company shall recommend the approval of the Transactions (the "Board
Recommendation"), unless permitted to make an Adverse Recommendation Change
pursuant to Section 9.7(c), and shall take all lawful action to solicit and
obtain such approval by holders of a majority of the outstanding shares of
Common Stock (the "Requisite Shareholder Approval"). The Company may, and the
Majority Purchasers may require the Company to, adjourn or postpone the
Shareholders Meeting one or more times, unless prior to such adjournment or
postponement the Company shall have received an aggregate number of proxies
sufficient for the Requisite Shareholder Approval, provided that the Company, on
the one hand, and the Majority Purchasers, on the other hand, may each only
adjourn or postpone the Shareholders Meeting for no more than twenty (20) days
in the aggregate. The Company shall, upon the reasonable request of the Majority
Purchasers, advise the Purchasers at least on a daily basis on each of the last
ten (10) Business Days prior to the date of the Shareholders Meeting as to the
aggregate tally of proxies received by the Company with respect to the Requisite
Shareholder Approval. Without the prior written consent of the Majority
Purchasers, the approval of the Transactions shall be the only matter which the
Company shall propose to be acted on by the shareholders of the Company at the
Shareholders Meeting. Without limiting the generality of the foregoing, the
Company agrees that its obligations pursuant to this Section 9.5 shall not be
affected by the commencement, proposal, disclosure or communication to the
Company or any other Person of any Competing Proposal.

        9.6    Proxy.    

        (a)   The Company shall prepare and file with the SEC, as promptly as
practicable after the date of this Agreement but in no event later than five
(5) Business Days after the date of this Agreement, a proxy statement in
preliminary form relating to the Transactions (such proxy statement, including
any amendment or supplement thereto, the "Proxy Statement"). The Company shall
file with the SEC the definitive Proxy Statement and shall cause the mailing of
the definitive Proxy Statement to the shareholders of the Company to occur on
the twelfth (12th) day (or, if such day is not a Business Day, the first
Business Day subsequent to such calendar day) immediately following the filing
of the preliminary Proxy Statement with the SEC, or if not practicable,
including as a result of outstanding comments from the SEC, then as promptly as
practicable thereafter. The Company agrees, as to it and its Subsidiaries, that
the Proxy Statement will comply in all material respects with the applicable
provisions of the Exchange Act and the rules and regulations thereunder. Each of
the Company and the Purchasers covenants and agrees, as to it and its
Affiliates, that none of the information supplied by it or any of its Affiliates
for inclusion or incorporation by reference in the Proxy Statement will, at the
date of mailing to shareholders of the Company and at the time of the
Shareholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The Board of Directors of the Company shall make the Board
Recommendation with respect to the approval of the Transactions, unless
permitted to make an Adverse Recommendation Change pursuant to Section 9.7(c),
and shall include such recommendation in the Proxy Statement.

        (b)   The Company shall afford the Purchasers a reasonable opportunity
to review and comment on the Proxy Statement prior to its filing with the SEC,
including any amendments or supplements thereto, and shall give due
consideration to all the reasonable additions, deletions or changes suggested
thereto by the Purchasers. The Company will promptly advise the Purchasers if at
any time prior to the effective time of such Proxy Statement, the Company shall
obtain knowledge of any facts that might make it necessary to amend or
supplement the Proxy Statement in order to make the statements contained therein
not misleading or to comply with applicable Law. The Company shall promptly
notify the Purchasers of the receipt of all comments from the SEC with respect
to the Proxy Statement and of any request by the SEC for any amendment or
supplement thereto or for additional information and shall promptly provide to
the Purchasers copies of all correspondence between the Company and/or any of
its Representatives and the SEC with respect to the Proxy Statement and shall
provide the

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Purchasers an opportunity to review and comment on any such amendment,
supplement or response to the SEC and shall give due consideration to all the
reasonable additions, deletions or changes suggested thereto by the Purchasers.
Each Purchaser and the Company shall use its reasonable best efforts promptly to
provide responses to the SEC with respect to all comments received on the Proxy
Statement from the SEC. To the extent required by applicable Law in the good
faith judgment of the Company, the Company shall, as promptly as reasonably
practicable, prepare, file and distribute to its shareholders any supplement or
amendment to the Proxy Statement if any event shall occur that requires such
action.

        9.7    Non-Solicitation.    

        (a)   Subject to Section 9.7(b), the Company hereby agrees that, from
the date of this Agreement until the receipt of the Requisite Shareholder
Approval, the Company will not (and will cause its Representatives and
Subsidiaries not to): (x) solicit, negotiate, encourage or otherwise discuss
(including continuing any current discussions or negotiations) with any Person
other than Purchasers and their affiliates and advisors, (i) the sale, directly
or indirectly, of any interest in the Company or its Subsidiaries (including any
debt or equity securities, other than ordinary course issuances of equity to
employees, directors, and consultants and pursuant to contractual commitments
existing as of the date hereof and disclosed to the Purchasers) or a significant
portion of its assets, (ii) any other debt or equity financing of the Company or
its Subsidiaries, (iii) any merger or consolidation involving the Company or its
Subsidiaries, or (iv) any recapitalization or restructuring involving the
Company or its Subsidiaries (any such transaction described in clauses (i)
through (iv), for purposes of this Section, a "substitute transaction");
(y) furnish any non-public information concerning the Company or its
Subsidiaries to any Person, other than Purchasers and their affiliates and
advisors, for the purpose of a substitute transaction; or (z) enter into any
agreement with respect to a substitute transaction with any Person other than
Purchasers or their affiliates. In addition, the Company will (and will cause
its Representatives and Subsidiaries to) (a) immediately terminate all
discussions and/or negotiations with any Person other than Purchasers which may
reasonably be expected to lead to a substitute transaction and (b) immediately
cease any and all work (and not engage in any such work during the period set
forth in this Section) with respect to any substitute transaction.
Notwithstanding anything to the contrary in the foregoing, the Company and its
Representatives shall be permitted to solicit, negotiate with, discuss with and
provide non-public information to, or in connection with, but may not sign
definitive documents with respect to (or publicly disclose or take any other
action or fail to take any action that would either cause the Company to have
any public disclosure obligations with respect to or that would result, or be
reasonably likely to result, in any other Person publicly disclosing) a
substitute transaction with or in connection with, (a) any bank or other
potential lender in connection with project finance debt funding in connection
with the Project Finance Facility, (b) one or more lease counterparties in
connection with capital leases in respect of equipment for the Company's
operations in connection with the Project Finance Facility, (c) Grandhaven
Energy, LLC ("Grandhaven") in connection with the Grandhaven Agreement
Amendment, (d) the acquisition of additional mineral and land interests in the
Holbrooke Basin, and (e) any transaction permitted without Majority Purchaser
consent under Sections 9.1(c) and 9.1(i). For the avoidance of doubt, this
Section 9.7(a) is not intended to prohibit customary public company investor
relations communications or discussions by the Company or its Representatives
(it being understood and agreed that such permissible customary communications
or discussions shall not be deemed to include the provision of or communication
of any of the reports (or portions thereof) that have been (or will be) prepared
by or on behalf of the Purchasers or their advisors, whether before, on or after
the date hereof, or any similar reports or information packages or any other
information that is not otherwise publicly disclosed).

        (b)   At any time after the date hereof and prior to obtaining the
Requisite Shareholder Approval, the Company or its Board of Directors may
(i) furnish nonpublic information to any third party making an unsolicited
Competing Proposal (provided, however, that prior to so furnishing such
information, the

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Company receives from the third party an executed Acceptable Confidentiality
Agreement and all such information has previously been provided to the
Purchasers or is provided to the Purchasers prior to or substantially
concurrently with the time it is provided to such third party), and (ii) engage
in discussions or negotiations with such third party with respect to such
Competing Proposal if and only if: (x) such Competing Proposal did not otherwise
result from a breach of this the Section 9.7, (y) such third party has submitted
a Competing Proposal which the Board of Directors of the Company determines in
good faith, after consultation with its financial and legal advisors,
constitutes, or could reasonably be expected to lead to, a Superior Proposal,
and (z) the Board of Directors of the Company determines in good faith, after
consultation with legal counsel, that failure to take such action would be
inconsistent with the directors' fiduciary duties under applicable Law. Prior to
taking any of the actions referred to in this Section 9.7(b), the Company shall
notify the Purchasers orally and in writing that it proposes to furnish
non-public information and/or enter into discussions or negotiations as provided
in this Section 9.7(b).

        (c)   Except as expressly permitted by this Section 9.7(c), the Board of
Directors of the Company shall not (i) withdraw, qualify, or modify, or publicly
propose to withdraw, qualify, or modify, in a manner adverse to the Purchasers,
the Board Recommendation; (ii) adopt, approve or recommend, or publicly propose
to adopt, approve or recommend, any Competing Proposal made or received after
the date hereof; (iii) subject to Section 9.7(f), (A) fail to publicly recommend
against any Competing Proposal within five (5) Business Days (or the Outside
Date if earlier) after Majority Purchasers so request in writing, (B) fail to
publicly reaffirm the Board Recommendation within five (5) Business Days (or the
Outside Date if earlier) if requested by the Majority Purchasers in writing, or
(C) fail to include the Board Recommendation in the Proxy Statement, (any of the
actions described in clauses (i), (ii), and (iii) of this Section 9.7(c), an
"Adverse Recommendation Change"); or (iv) cause or permit the Company or any of
its Subsidiaries to enter into any letter of intent, memorandum of
understanding, agreement in principle, acquisition agreement, investment
agreement or similar definitive agreement (other than an Acceptable
Confidentiality Agreement) with respect to any Competing Proposal.
Notwithstanding anything to the contrary set forth in this Agreement, at any
time prior to obtaining the Requisite Shareholder Approval, the Board of
Directors of the Company shall be permitted to make an Adverse Recommendation
Change with respect to a Superior Proposal, subject to compliance with
Section 9.7(d), if the Board of Directors of the Company (A) has received an
unsolicited Competing Proposal (which Competing Proposal did not arise out of
any breach of this Section 9.7) that, in the good faith determination of the
Board of Directors of the Company, constitutes a Superior Proposal, after having
complied with, and giving effect to all of the adjustments which may be offered
by the Purchasers pursuant to, Section 9.7(d), and (B) determines in good faith,
after consultation with its legal advisors, that failure to take such action
would be inconsistent with the directors' fiduciary duties under applicable Law.

        (d)   The Company shall not be entitled to effect an Adverse
Recommendation Change as permitted under Section 9.7(c) with respect to a
Superior Proposal unless (i) the Company has provided a written notice (a
"Notice of Superior Proposal") to the Purchasers that the Company intends to
take such action and describing the material terms and conditions of the
Superior Proposal that is the basis of such action (including the identity of
the third party making such Superior Proposal) and attaching the most current
version, in an unredacted form, of any proposed agreement pursuant to which such
Superior Proposal is proposed to be consummated, (ii) during the four
(4) Business Day period following the Purchasers' receipt of the Notice of
Superior Proposal, the Company shall, and shall cause its Representatives to,
negotiate with the Purchasers in good faith (to the extent the Purchasers desire
to negotiate) to make such adjustments to the terms and conditions of this
Agreement and the other agreements contemplated hereby so that such Superior
Proposal ceases to constitute a Superior Proposal; and (iii) following the end
of the four (4) Business Day period, the Board of Directors of the Company shall
have determined in good faith, taking into account any changes to this Agreement
and the other agreements contemplated hereby proposed in writing by the

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Purchasers in response to the Notice of Superior Proposal or otherwise, that the
Superior Proposal giving rise to the Notice of Superior Proposal continues to
constitute a Superior Proposal. Any material amendment to the financial terms or
any other material amendment of such Superior Proposal shall require a new
Notice of Superior Proposal and the Company shall be required to comply again
with the requirements of this Section 9.7(d).

        (e)   From and after the date hereof, the Company shall, as promptly as
reasonably practicable (and in any event within two (2) Business Days of
receipt), advise the Purchasers of receipt by the Company of any Competing
Proposal or any request for non-public information in connection with any
Competing Proposal, the status and material terms and conditions of any such
Competing Proposal or request (including the identity of the third party making
such Competing Proposal) and a unredacted copy of any documentation, proposal or
written communication relating to such Competing Proposal or request, and shall
as promptly as reasonably practicable (and in any event within two (2) Business
Days of receipt) advise the Purchasers of any material amendments to any such
Competing Proposal or request.

        (f)    Nothing in this Section 9.7 shall prohibit the Board of Directors
of the Company from taking and disclosing to the Company's stockholders a
position contemplated by Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of
Regulation M-A promulgated under the Exchange Act, or other Law, if the Board of
Directors of the Company, after consultation with outside legal counsel,
determines in good faith that the failure to so disclose such position would
reasonably be expected to be inconsistent with the directors' exercise of their
fiduciary obligations under Law.

        (g)   For purposes of this Agreement:

        (i)    "Competing Proposal" means any bona fide written proposal or
offer relating to (i) the sale, directly or indirectly, of any equity or debt
securities of the Company or its Subsidiaries or a significant portion of its
assets or (ii) any other debt or equity financing of the Company or its
Subsidiaries, (other than, in either such case, those described in the last
sentence of Section 9.7(a) or from the Purchasers or their Affiliates), that, in
either such case, would result in gross proceeds to the Company or its
Subsidiaries of not less than the gross proceeds receivable in connection with
this Agreement, the agreements contemplated hereby, and in the transactions
hereby and thereby.

        (ii)   "Superior Proposal" means any Competing Proposal that (A) (x) if
involving Common Stock or Equity-based Securities, has a per share price or
implied per share price per share of Common Stock greater than the per share
price implied by the Notes and the Warrants, taken together, and (y) if
involving any debt securities, has an interest rate less than the interest rate
of the Notes (including a cash portion thereof less than the cash portion of the
Notes), a maturity date no shorter than the Notes, a ranking no higher than the
Notes, and a set of covenants no more restrictive than those of the Notes, and
(B) is on terms that the Board of Directors of the Company determines in good
faith, after consultation with the Company's financial and legal advisors, and
considering such factors as the Board of Directors of the Company considers in
good faith to be appropriate (including the conditionality, certainty of
financing and the timing and likelihood of consummation of such proposal on the
terms proposed), are more favorable to the Company and its shareholders from a
financial point of view than the Transactions (after giving effect to all
adjustments to the terms thereof which may be offered by the Purchasers in
writing (including pursuant to Section 9.7(d)).

        9.8    Additional Common Stock Issuances.    If the final Definitive
Feasibility Study indicates that the estimated total Capital Costs (the "DFS
Estimate") for the Holbrook Project exceeds the Current

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Capital Estimate by 2.5% or more, then the Company shall issue to the Notes
Purchasers at Closing, and for no additional consideration other than the
Purchase Price:

        (a)   if the DFS Estimate is between 2.5% and 5.0% higher than the
Current Capital Estimate, 3,993,095 shares of Common Stock; or

        (b)   if the DFS Estimate is between 5.0% and 10.0% higher than the
Current Capital Estimate, 7,189,275 shares of Common Stock.

        (c)   In the event that the Company shall, after the date of this
Agreement (i) issue, or declare a dividend or make a distribution on its shares
of its Common Stock in, shares of its Common Stock or Options or Convertible
Securities (including without limitation the issuance of Common Stock, Options
or other equity securities under a Benefits Plan (whether or not in effect as of
the date hereof)), (ii) subdivide or reclassify the outstanding shares of its
Common Stock into a greater number of shares, or (iii) combine or reclassify the
outstanding shares of its Common Stock into a smaller number of shares, then the
number of shares of Common Stock receivable by the Purchasers pursuant to
subsections (a) and (b) shall be appropriately adjusted such that the Purchasers
receive such number of shares of Common Stock in the aggregate that would
entitle the Purchasers to 3.6% and 6.3%, respectively, of the outstanding voting
power of the Company for the election of directors (accounting for such issuance
and the issuance of the Notes to the Purchasers but not any exercise of any
Options (including the Apollo Warrants) or other Convertible Securities
outstanding as of the date hereof), provided that such adjustments are not
required as a result of the exercise of any Option or Convertible Security
outstanding as of the date hereof.

        9.9    Affiliate Agreement Modifications.    The Company shall use
reasonable best efforts to engage in discussions with Grandhaven for the
termination of the Grandhaven Agreement in consideration for the potential
issuance from the Company to Grandhaven of Options to purchase Common Stock or
Equity-based Securities, in each case on terms reasonably acceptable to the
Majority Purchasers (the "Grandhaven Agreement Amendment"), provided, for the
avoidance of doubt, that the failure to enter into such a transaction with
Grandhaven shall not itself be deemed to be a failure of any of the closing
conditions set forth in Article VI.

        9.10    Off-take Agreement.    The Company shall use best efforts to
enter into additional definitive agreements with respect to off-take
arrangements with customers for Potash production on the terms similar in all
material respects as set forth in Exhibit D (the "Minimum Off-Take
Arrangements"), as soon as practicable.

        9.11    Board and Observer Rights.    

        (a)   Promptly after the date hereof, unless prohibited by applicable
Law or the rules of the Principal Market (and provided that the Company shall
use reasonable best efforts to remove any such prohibitions), the Company shall
appoint one representative of the Purchasers designated in writing by the
Purchasers (the "Purchaser Designee") to the Board of Directors of the Company.
Until the earlier of the Closing Date and the termination of this Agreement, at
each annual or special meeting (or action by written consent) of shareholders of
the Company at which directors are to be elected to its Board of Directors, the
Company will nominate and use its best efforts to cause the election to its
Board of Directors of the Purchaser Designee. In the event of the death,
disability, resignation or removal of the Purchaser Designee, or in the event of
the failure of the Purchaser Designee to be elected, the Company's Board of
Directors will promptly appoint to the Company's Board of Directors a
replacement Purchaser Designee designated by the Purchasers to fill the
resulting vacancy, and such individual shall then be deemed the Purchaser
Designee for all purposes hereunder; provided that if the Purchaser Designee is
removed for cause, the replacement Purchaser Designee will not be the same
person who was removed. Until the earlier of the Closing Date and the
termination of this Agreement,

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the Company's Board of Directors will not remove, or recommend to the
shareholders of the Company removal of, the Purchaser Designee without the prior
written consent of the Purchasers.

        (b)   Until the earlier of the Closing Date and the termination of this
Agreement, the Purchasers shall have the right to appoint one observer on the
Company's Board of Directors (the "Board Observer") (it being understood that a
Board Observer shall have all the rights (other than voting rights) of a
director on the Company's Board of Directors, including (A) the right to attend
all meetings of the Company's Board of Directors as an observer, (B) the right
to receive advance notice of each meeting, including such meeting's time and
place, at the same time and in the same manner as such notice is provided to the
members of the Company's Board of Directors, (C) the right to receive copies of
all materials, including notices, minutes, consents and regularly compiled
financial and operating data distributed to the members of the Company's Board
of Directors at the same time as such materials are distributed to the Company's
Board of Directors, and shall have the same access to information concerning the
business and operations of the Company, and (D) the right to discuss the
affairs, finances and accounts of the Company with, and to make proposals and
furnish advice with respect thereto to, the Company's Board of Directors,
without voting).

        (c)   At or prior to Closing, in satisfaction of its obligations under
the Investors Rights Agreement and the Company's Second Amended and Restated
Articles of Incorporation (as amended by the Certificate of Designation), the
Company shall appoint four designees of the Purchasers to the Board of Directors
of the Company and take all actions necessary to set the size of its Board of
Directors to nine members, provided, that if the Company has, pursuant to
Section 9.1(b), added an additional director in connection with a
capital-raising transaction, then the Company shall appoint five designees of
the Purchasers to the Board of Directors of the Company and take all actions
necessary to set the size of its Board of Directors to eleven members. For
avoidance of doubt, from and after the Closing, the parties' obligations with
respect to such director-designees shall be governed by the Investors Rights
Agreement and the Company's Second Amended and Restated Articles of
Incorporation (as amended by the Certificate of Designation), and provided,
further, that if, after the date hereof, there is a change in applicable Law or
the rules of the Principal Market that prohibits the rights in this
subsection (c), then the Company shall use reasonable best efforts to remove
such prohibitions and, if it is unsuccessful in doing so, the Company and the
Majority Purchasers will discuss in good faith amendments to this subsection (c)
to remove such prohibition (it being acknowledged that in no event will the
Majority Purchasers be obligated to accept a lesser number of directors than a
number equal to the Purchaser Percentage Interest multiplied by the outstanding
number of directors on the board of directors of the Company).

        9.12    KG Default Cure.    

        (a)   If at any time prior to the full repayment of the Karlsson Note,
the Company or any of its Subsidiaries is in payment default or any other
default that would entitle the holder of the Karlsson Note to accelerate the
payment of obligations thereunder or is reasonably likely to be in such default
within thirty (30) days, (i) the Company shall immediately provide the
Purchasers notice thereof, (ii) the Royalty Purchasers shall have the right (but
not the obligation), assuming the default is not cured within the subsequent
fifteen (15) days, to purchase either (A) Common Stock or (B) notes issued by
the Company or its Subsidiaries, in each case on the terms set forth in this
Section 9.12 and for an aggregate amount sufficient to (in the Majority
Purchasers' sole discretion) either (x) pay off the Karlsson Note in full
(including any principal, interest, expenses, penalties or any other amounts
outstanding) or (y) pay off such lesser amount as would be necessary to avoid or
cure the default or anticipated default (as determined in the Majority
Purchasers' reasonable discretion) and (iii) the Company shall use such proceeds
for such purpose. For the avoidance of doubt, this Section 9.12 (and the Royalty
Purchasers' rights hereunder) shall apply (and remain in effect) prior to, at or
after the Closing until such time (if any) that this Agreement is terminated
pursuant to Article X hereof.

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        (b)   If, pursuant to Section 9.12(a), the Royalty Purchasers elect to
purchase Common Stock, such Common Stock shall be issued to the Royalty
Purchasers or their respective designees at a per-share price equal to the
lesser of (i) the then-applicable Conversion Price for the Notes (whether or not
the Notes have actually been issued) or (ii) the arithmetic average of the
volume-weighted average price ("VWAP") of the Common Stock for the ten
(10) Trading Day period immediately preceding the date of such purchase. Such
Common Stock, when issued, shall be duly and validly authorized and issued,
fully paid and non-assessable and free and clear of any Liens, restriction on
voting or transfer or any other claim of any third party. In the event of any
purchase of Common Stock pursuant to this Section 9.12(b), the Company shall
enter into a registration rights agreement with respect to such shares of Common
Stock with the Royalty Purchasers, on the same terms as those set forth in
Articles IV and V of the Investors Rights Agreement, which registration rights
agreement shall terminate upon the Closing.

        (c)   If, pursuant to Section 9.12(a), the Royalty Purchasers elect to
purchase notes issued by the Company or its Subsidiaries, such notes will be
nonconvertible and issued on terms set forth in Schedule C-3 and such other
terms customary for financings of such type and otherwise reasonably requested
by the Majority Purchasers.

        9.13    Preemptive Rights.    

        (a)   The Royalty Purchasers will have the preemptive rights set forth
in this Section 9.13 with respect to any issuance of any Common Stock or
Equity-based Securities by the Company or any of its Subsidiaries that are
issued prior to the Closing (any such issuance other than those described in
clauses (i), (ii) and (iii) below, a "Preemptive Rights Issuance"), except for
(i) issuances to employees, directors and consultants pursuant to and in
accordance with stock incentive plans of the Company that were publicly filed
with the SEC prior to the date hereof (provided that any such issuances are made
in accordance with the terms, conditions and limitations of such plans as they
existed as of the date of hereof and without effect to any amendments or other
modifications thereof after the date hereof unless approved by the Majority
Purchasers) or in accordance with written agreements set forth in Schedule 9.13
(provided that any such issuances are made in accordance with the terms,
conditions and limitations of such agreements as they existed as of the date
hereof and without effect to any amendments or other modifications thereof after
the date hereof unless approved by the Majority Purchasers), (ii) issuances of
shares of Common Stock as consideration in any merger approved pursuant to
Section 9.1, or (iii) issuances of shares of Common Stock pursuant to and in
accordance with warrant agreements entered into (and publicly filed with the
SEC) prior to the date hereof and previously disclosed to the Purchasers
(provided that any such issuances are made in accordance with the terms,
conditions and limitations of such warrant agreements as they existed as of the
date hereof and without effect to any amendments or other modifications thereof
after the date hereof unless approved by the Majority Purchasers).

        (b)   If the Company or any of its Subsidiaries at any time or from time
to time, prior to the Closing, effects one or more Preemptive Rights Issuance,
the Company shall give written notice to each Royalty Purchaser a reasonable
period in advance of each such issuance (but in no event later than ten
(10) days prior to such issuance), which notice shall set forth the number and
type of the securities to be issued, the issuance date, the offerees or
transferees, the price per security, and all of the other terms and conditions
of such issuance, which shall be deemed updated by delivery of the final
documentation for such issuance to each Royalty Purchaser. With respect to each
such Preemptive Rights Issuance, the Royalty Purchasers shall have the right,
exercisable (by written notice to the Company (the "Preemptive Rights Notice"))
at any time at or within thirty (30) days following the Closing, to elect to
purchase (or designate an Affiliate thereof (including, without limitation,
another Royalty Purchaser) to purchase) a number of securities specified in such
Preemptive Rights Notice (which number may be any number up to but not exceeding
such Royalty Purchaser's pro rata portion of the Preemptive Rights Cap Amount
applicable to such Preemptive Rights Issuance), on the same

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terms and conditions as such Preemptive Rights Issuance (it being understood and
agreed that (i) the price per security that the Royalty Purchasers shall pay
shall be the same as the price per security set forth in the Preemptive Rights
Notice, and (ii) the Royalty Purchasers shall not be required to comply with any
terms, conditions, obligations or restrictions (including, without limitation,
any non-compete, standstill or other limitations but excluding any remaining
period of a transfer or lock-up restriction applicable at such time to other
purchasers in such Preemptive Rights Issuance) not directly necessary for the
effectuation of the sale or issuance of such securities). The Royalty Purchasers
shall, by notice to the Company, within thirty (30) days after the Closing,
indicate which pre-Closing Preemptive Rights Issuances the Royalty Purchasers
are electing to exercise their preemptive rights with respect to and the number
of securities the Royalty Purchasers are electing to purchase with respect to
such pre-Closing Preemptive Rights Issuances. If the Royalty Purchasers exercise
their preemptive rights hereunder with respect to one or more Preemptive Rights
Issuances, the Company shall (or shall cause such Subsidiary to) issue to the
Royalty Purchasers (or their designated Affiliates) the number of securities
specified in the applicable Preemptive Rights Notices as soon as reasonably
practicable thereafter. For the avoidance of doubt, in the event that the
issuance of Common Stock or Equity-based Securities in a Preemptive Rights
Issuance involves the purchase of a package of securities that includes Common
Stock or Equity-based Securities and other securities in the same Preemptive
Rights Issuance, each Royalty Purchaser shall have the right to acquire its
applicable pro rata portion of such other securities, together with its
applicable pro rata portion of such Common Stock or Equity-based Securities, in
the same manner described above (as to amount, price and other terms).

        (c)   The election by the Royalty Purchasers not to exercise its
preemptive rights hereunder with respect to any Preemptive Rights Issuance shall
not affect its right (other than in respect of a reduction in the Purchaser
Percentage Interest) as to any other Preemptive Rights Issuances. Each Royalty
Purchaser shall be entitled to deliver its own notices and make its own
elections for purposes of this Section 9.13, and the non-exercise by any Royalty
Purchaser shall not affect the rights of any other Royalty Purchaser under this
Section 9.13.

        9.14    Standstill.    Without the prior consent of the Company, the
Purchasers shall not at any time until the one-year anniversary of the Closing,
purchase or acquire any outstanding equity securities of the Company (including
any Options or Convertible Securities of the Company) (it being understood and
agreed that, for the avoidance of doubt, such restriction shall not apply to any
purchase or acquisition by the Purchasers pursuant to and in accordance with
Sections 9.8, 9.12 and 9.13, pursuant to the exercise or conversion of the
Apollo Warrants or the Notes, pursuant to the Investors Rights Agreement
(including Section 2.1 thereof) or as otherwise contemplated by the
Transactions).

        9.15    Certain Tax Matters.    

        (a)   The Company shall not take any Tax position on any Tax return, in
any Tax Proceeding, or otherwise in respect of the Notes, the other Securities
or the Royalty without the prior written consent of the Majority Purchasers,
which consent will not be unreasonably withheld, conditioned or delayed.

        (b)   The Company shall provide to the Purchasers such cooperation,
documentation and information relating to the Company, the other Securities, the
Royalties and the Transactions as the Purchasers may reasonably request in
connection with (i) filing any Tax return, amended Tax return or claim for
refund, (ii) determining a liability for Taxes or a right to refund of Taxes, or
(iii) conducting any Tax Proceeding. The Company shall make its employees
reasonably available at the Company's cost to provide an explanation of any
documents or information provided pursuant to this Section 9.15(b).

        (c)   Except as required by applicable Law, all payments made by the
Company hereunder, pursuant to the Securities or pursuant to the Royalty
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other Taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority (together with any interest,

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additions to Tax and penalties applicable thereto, "Indemnified Taxes"). If any
Indemnified Taxes are required to be withheld from any amounts payable by the
Company to the Purchasers hereunder, pursuant to the Securities or pursuant to
the Royalty Agreement, the amounts so payable to the Purchasers shall be
increased to the extent necessary to yield to the Purchasers (after payment of
all Indemnified Taxes) interest or any such other amounts payable hereunder or
pursuant to the Securities at the rates or in the amounts specified in this
Agreement or by the terms of the Securities, as applicable. Whenever any
Indemnified Taxes are payable by the Company, the Company shall timely pay such
Indemnified Taxes and shall send to the Purchasers a certified copy of an
original official receipt received by the Company showing payment thereof. If
the Company fails to pay any Indemnified Taxes when due to the appropriate
Taxing Authority or fails to remit to the Purchasers the required receipts or
other required documentary evidence, the Company shall indemnify the Purchasers
for any incremental Taxes, interest or penalties that may become payable by the
Purchasers as a result of any such failure.

        9.16    Benefit Plans.    The Company agrees that (x) from the date
hereof through the Closing Date (and thereafter), it shall not take any action
to accelerate the vesting of, or otherwise provide a benefit to a holder of, an
outstanding equity or equity-based compensation award as a result of any of the
transactions contemplated hereby, including due to any such transaction
constituting a Change in Control or term of similar import (within the meaning
of the governing documents applicable to such award) and (y) between the date
hereof and the Closing Date, it shall obtain waivers (in a form satisfactory to
the Majority Purchasers) from the Company employees party to the agreements
listed on Schedule 9.16 to the effect that none of the transactions contemplated
hereby shall constitute a Change in Control for purposes of the applicable
agreement.

        9.17    FCPA.    As soon as practicable after the date hereof, the
Company shall adopt a compliance program for the FCPA, which compliance program
shall be consistent with the prevailing standards of other companies operating
in the Company's industry and reasonably acceptable to the Majority Purchasers.

        9.18    Supplemental Payment.    In the event that the Company or its
Subsidiaries become liable for a Supplemental Payment, the Company shall pay to
the Notes Purchasers and the Royalty Purchasers an amount of cash (the
"Supplemental Payment Gross Up"), allocated among the Notes Purchasers and the
Royalty Purchasers in the manner specified by the Majority Purchasers (which
manner shall be intended to reflect the relative percentage interests of
ownership of Company securities of the Purchasers and their ultimate investors),
equal to an amount that if such amount of the Supplemental Payment Gross Up is
divided by the sum of (i) such amount of the Supplemental Payment Gross Up and
(ii) the amount of the Supplemental Payment, would represent a percentage that
is equal to the Investor Percentage Interest (as defined in the Investors Rights
Agreement) at such time. Any such payment of the Supplemental Payment Gross Up
shall be made at the same time as the payment of the Supplemental Payment.

        9.19    Further Assurances.    After the Closing, each of the Company,
the Guarantors and each Purchaser agrees to take such further actions and to
execute, acknowledge and deliver all such further documents as are reasonably
requested by the other Parties for carrying out the purposes of this Agreement
or of any document delivered pursuant to this Agreement or the Transactions.
Without limitation of the foregoing, upon the request of a Purchaser, the
Company will enter into a management rights agreement, in customary form and
reasonably acceptable to the Company.

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ARTICLE X

TERMINATION

        10.1    Right to Terminate.    Notwithstanding anything to the contrary
set forth in this Agreement, this Agreement may be terminated and the
Transactions abandoned at any time prior to the Closing:

        (a)   by mutual written consent of the Company and the Majority
Purchasers; or

        (b)   by the Company or the Majority Purchasers, if:

        (i)    the Closing shall not have been consummated on or before
December 31, 2013 (the "Outside Date"); provided, however, that neither the
Company, on the one hand, nor the Majority Purchasers, on the other hand, shall
be entitled to terminate this Agreement under this Section 10.1(b)(i) if such
Party's breach of any provision of this Agreement shall have been the cause of,
or otherwise resulted in, the failure of the Closing to occur on or before the
Outside Date; or

        (ii)   a court of competent jurisdiction or other Governmental Authority
shall have issued a final, non-appealable order, decree or ruling permanently
restraining, enjoining or otherwise prohibiting the sale and purchase of the
Notes or the other Transactions; provided, that the Party seeking to terminate
this Agreement pursuant to this Section 10.1(b)(ii)) shall have complied in all
material respects with its obligations in Section 9.3; or

        (iii)  the Shareholders Meeting (including any permitted adjournments or
postponements thereof) shall have been held and completed and the Requisite
Shareholder Approval shall not have been obtained at such Shareholders Meeting
(or at any adjournment or postponement thereof, if applicable); or

        (c)   by the Majority Purchasers, if the Company shall have breached any
of its representations or warranties in this Agreement or failed to perform any
of its covenants in this Agreement such that the conditions set forth in
Sections 6.1 or 6.2 would not be capable of being satisfied on such date if such
date was the Closing Date, and such breach or failure to perform shall not have
been cured or waived in writing prior to the earlier of (i) fifteen (15) days
following notice of such breach or failure to the Company and (ii) the Outside
Date; provided, that Majority Purchasers shall not have the right to terminate
this Agreement pursuant to this Section 10.1(c) if any Purchaser is then in
material breach of any of its representations or warranties in this Agreement or
has failed to perform in any material respect any of its covenants in this
Agreement; or

        (d)   by the Company, if any Purchaser shall have breached any of its
representations or warranties in this Agreement or failed to perform any of its
covenants in this Agreement such that the conditions set forth in Sections 5.1
or 5.2 would not be capable of being satisfied on such date if such date was the
Closing Date, and such breach or failure to perform has not been cured or waived
in writing prior to the earlier of (i) fifteen (15) days following notice of
such breach or failure to the Purchasers and (ii) the Outside Date; provided,
that the Company shall have no right to terminate this Agreement pursuant to
this Section 10.1(d) if the Company is then in material breach of any of its
representations or warranties in this Agreement or has failed to perform in any
material respect any of its covenants in this Agreement; or

        (e)   by the Majority Purchasers, if prior to obtaining the Requisite
Shareholder Approval, the Board of Directors of the Company shall have made an
Adverse Recommendation Change or the Company has materially breached its
obligations under Section 9.7.

        10.2    Effect of Termination.    In the event that the Closing Date
does not occur as a result of any Party hereto exercising its rights to
terminate this Agreement pursuant to this Article X, then this Agreement shall
be null and void and, except as otherwise expressly provided herein (including
as

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provided for in Section 10.3), no Party shall have any rights or obligations
under this Agreement, except that nothing herein shall relieve any Party from
liability for any wrongful failure or refusal to perform or observe in any
material respect any agreement or covenant contained herein. In the event the
termination of this Agreement results from the wrongful failure or refusal of
any Party to perform in any material respect any agreement or covenant herein,
then the other Party shall be entitled to all remedies available at law or in
equity and shall be entitled to recover court costs and reasonable attorneys'
fees in addition to any other relief to which such Party may be entitled. In the
event that a Party wrongfully terminates or repudiates this Agreement or
wrongfully fails to consummate the Transactions, the remedies available to the
other Party in equity shall include specific performance as set forth in
Section 26.14 of this Agreement and such other remedies as may be available to
the other Party at Law.

        10.3    Fees and Expenses.    Except as otherwise specifically provided
herein, each Party hereto is responsible for all costs and expenses incurred by
it in connection with this Agreement, whether or not the Transactions are
consummated. In the event that this Agreement is terminated (a) by any Party
pursuant to Section 10.1(b)(i) and, at the time of such termination, the
Requisite Shareholder Approval has not been obtained; (b) by any Party pursuant
to Section 10.1(b)(iii); or (c) by the Majority Purchasers, pursuant to
Section 10.1(c) or Section 10.1(e), then the Company shall promptly (and in no
event later than two (2) Business Days following such termination) (x) reimburse
to the Purchasers or any Affiliates of the Purchasers designated by the Majority
Purchasers all Purchaser Expenses, to the extent not previously reimbursed, and
(y) pay to the Royalty Purchasers (in proportion to the percentage specified
opposite each such Royalty Purchaser's name in Schedule A) a fee of $7.5 million
(the "Company Termination Fee"), in the case of each of (x) and (y) by wire
transfer of immediately available funds to an account or accounts as directed by
the Purchasers.

        10.4    Amendment.    This Agreement may be amended by the parties
hereto whether before or after the Requisite Shareholder Approval is obtained;
provided, however, that after the Requisite Shareholder Approval is obtained, no
amendment may be made that by Law, requires further approval by shareholders
unless such further approval is first obtained. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto.

        10.5    Waiver.    At any time, any Party hereto may, to the extent
permitted by applicable Law, (a) extend the time for the performance of any
obligation or other act of any other Party hereto, (b) waive any inaccuracy in
the representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any agreement or condition
contained herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the Party or Parties to be bound thereby.

ARTICLE XI

INDEMNIFICATION

        11.1    Purchaser Indemnification.    From and after the Closing, the
Purchasers shall, on a several but not joint basis, indemnify, defend and hold
harmless the Company and its Subsidiaries (and the officers, directors,
employees, partners, members and Affiliates of each of the foregoing) from and
against all Damages incurred or suffered by such Persons:

        (a)   caused by or arising out of or resulting from any Purchaser's
breach of any of its covenants or agreements contained in Article IX; or

        (b)   caused by or arising out of or resulting from any breach of any
representation or warranty made by a Purchaser contained in Article VIII of this
Agreement, as of the Closing Date, as if made on such date, except for any
representation and warranty which speaks as of a particular date, in which case,
as of such particular date, or in the certificate delivered by such Purchaser at
Closing pursuant to Section 5.3;

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even if such Damages are caused in whole or in part by the negligence (whether
sole, joint, or concurrent), strict liability, or other legal fault of any
Indemnified Person, but excepting in each case Damages against which the Company
would be required to indemnify a Purchaser (or related Indemnified Person) under
Section 11.2(b) at the time the claim notice is presented by the Company.
"Damages" for purposes of this Article XI, means the amount of any liability,
loss (including diminution of value), cost, expense, claim, award, or judgment
incurred or suffered by any Indemnified Person arising out of or resulting from
the indemnified matter, whether attributable to personal injury or death,
property damage, contract claims, torts or otherwise including reasonable fees
and expenses of attorneys, consultants, accountants, or other agents and experts
reasonably incident to matters indemnified against, and the costs of
investigation and/or monitoring of such matters, and the costs of enforcement of
the indemnity.

        11.2    Company Indemnification.    From and after the Closing, the
Company shall indemnify, defend and hold harmless each Purchaser and its
Affiliates (and the officers, directors, employees, partners and members of each
of the foregoing) against and from all Damages incurred or suffered by such
Persons:

        (a)   caused by or arising out of or resulting from the Company or its
Subsidiary's breach of any of the Company's covenants or agreements contained in
Article IX;

        (b)   caused by or arising out of or resulting from any breach of any
representation or warranty made by the Company contained in Article VII of this
Agreement, as of the Closing Date, as if made on such date, except for any
representation and warranty which speaks as of a particular date, in which case,
as of such particular date, or in the certificate delivered by the Company at
Closing pursuant to Section 6.3(a);

        (c)   caused by or arising out of or resulting from any Proceeding
brought by any shareholders of the Company (including any derivative actions),
any Governmental Authorities or any other third party relating to the Company's
authorization and execution of this Agreement or any agreement or instrument
contemplated by this Agreement or the performance of the Transactions; or

        (d)   solely until such time as the Notes have been fully converted into
Common Stock, caused by or arising out of in connection with, or as a result of
(i) the execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations thereunder or the consummation of the Transactions, (ii) the use of
the proceeds of the Notes purchased hereunder, including the development and
operation of the Holbrook Project, (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or operated by the
Company or any of its Subsidiaries, or any Environmental Liability related in
any way to the Company or any of its Subsidiaries, or (v) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto,

even if such Damages are caused in whole or in part by the negligence (whether
sole, joint, or concurrent), strict liability, or other legal fault of any
Indemnified Person, but excepting in each case Damages against which the
Purchasers would be required to indemnify the Company under Section 11.1(a) at
the time the claim notice is presented by the Purchasers.

        11.3    Indemnification Actions.    All claims for indemnification under
Sections 11.1 and 11.2 shall be asserted and resolved as follows:

        (a)   For purposes of this Article XI, the term "Indemnifying Person"
when used in connection with particular Damages shall mean the Person having an
obligation to indemnify another Person

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or Persons with respect to such Damages pursuant to this Article XI, and the
term "Indemnified Person" when used in connection with particular Damages shall
mean a Person having the right to be indemnified with respect to such Damages
pursuant to this Article XI.

        (b)   To make a claim for indemnification under Sections 11.1 or 11.2,
an Indemnified Person shall notify the Indemnifying Person of its claim,
including the specific details of and specific basis under this Agreement for
its claim (the "Claim Notice"). In the event that the claim for indemnification
is based upon a claim by a third Person against the Indemnified Person (a
"Claim"), the Indemnified Person shall provide its Claim Notice promptly after
the Indemnified Person has actual knowledge of the Claim and shall enclose a
copy of all papers (if any) served with respect to the Claim; provided, that the
failure of any Indemnified Person to give notice of a Claim as provided in this
Section 11.3 shall not relieve the Indemnifying Person of its obligations under
Section 11.1 or 11.2 except to the extent such failure materially prejudices the
Indemnifying Person's ability to defend against the Claim. In the event that the
claim for indemnification is based upon an inaccuracy or breach of a
representation, warranty, covenant or agreement, the Claim Notice shall specify
the representation, warranty, covenant or agreement that was inaccurate or
breached.

        (c)   In the case of a claim for indemnification based upon a Claim, the
Indemnifying Person shall have thirty (30) days from its receipt of the Claim
Notice to notify the Indemnified Person whether it admits or denies its
liability to defend the Indemnified Person against such Claim under this
Article XI. If the Indemnifying Person does not notify the Indemnified Person
within such thirty (30) day period regarding whether the Indemnifying Person
admits or denies its liability to defend the Indemnified Person, the Damages for
which the Indemnified Person is seeking indemnity shall be conclusively deemed a
liability of the Indemnifying Person hereunder. The Indemnified Person is
authorized, prior to and during such thirty (30) day period, to file any motion,
answer or other pleading that it shall deem necessary or appropriate to protect
its interests or those of the Indemnifying Person and that is not prejudicial to
the Indemnifying Person.

        (d)   If the Indemnifying Person admits its liability to indemnify the
Indemnified Person, it shall have the right and obligation to diligently defend,
at its sole cost and expense, the Claim. The Indemnifying Person shall have full
control of such defense and proceedings, including any compromise or settlement
thereof. If requested by the Indemnifying Person, the Indemnified Person agrees
to cooperate in contesting any Claim, which the Indemnifying Person elects to
contest (provided, however, that the Indemnified Person shall not be required to
bring any counterclaim or cross-complaint against any Person). The Indemnified
Person may participate in, but not control, any defense or settlement of any
Claim controlled by the Indemnifying Person pursuant to this Section 11.3(d). An
Indemnifying Person shall not, without the written consent of the Indemnified
Person, settle any Claim or consent to the entry of any judgment with respect
thereto that (i) does not include, in the case of a settlement, an unconditional
written release of the Indemnified Person from all liability in respect of such
Claim or (ii) may materially and adversely affect the Indemnified Person (other
than as a result of money damages covered by the indemnity).

        (e)   If the Indemnifying Person does not admit its liability to
indemnify the Indemnified Person or admits its liability, but fails to
diligently defend or settle the Claim, then the Indemnified Person shall have
the right to defend against the Claim (at the sole cost and expense of the
Indemnifying Person, if the Indemnified Person is entitled to indemnification
hereunder), with counsel of the Indemnified Person's choosing, subject to the
right of the Indemnifying Person to admit its liability to indemnify the
Indemnified Person and assume the defense of the Claim at any time prior to
settlement or final determination thereof. If the Indemnifying Person has not
yet admitted its liability to indemnify the Indemnified Person, the Indemnified
Person shall send

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written notice to the Indemnifying Person of any proposed settlement and the
Indemnifying Person shall have the option for ten days following receipt of such
notice to (i) admit in writing its liability for indemnification with respect to
such Claim and (ii) if liability is so admitted, reject the proposed settlement.

        11.4    Limitations.    

        (a)   The representations and warranties of the parties in Articles VII
and VIII, and the corresponding representations and warranties given in the
certificates delivered at the Closing pursuant to Sections 5.3 and 6.3(a), as
applicable, shall survive the Closing for a period of eighteen (18) months,
except that (i) the representations and warranties of the Company contained in
Section 7.1 (Organization; Power and Authority), 7.2 (Authorization, Etc), 7.3
(Execution; Due Authority); 7.4 (No Conflicts); 7.5 (Consents, Approvals or
Waivers); 7.7(b) (Compliance with Law) and 7.22 (Taxes) (collectively, the
"Fundamental Representations") shall survive the Closing indefinitely, and the
representations and warranties of the Company contained in Section 7.8 (License
and Permits) and 7.20 (Environmental Matters) shall survive the Closing for
three (3) years. The covenants in this Agreement shall survive the Closing
without time limit except as may otherwise be expressly provided herein.
Representations, warranties, covenants and agreements shall be of no further
force and effect after the date of their expiration; provided, that there shall
be no termination of any bona fide claim asserted pursuant to this Agreement
with respect to such a representation, warranty, covenant, or agreement prior to
its expiration date. Subject to the foregoing, all representations and
warranties contained herein shall survive the purchase or transfer by any
Purchaser of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any subsequent holder of a Note, regardless
of any investigation made at any time by or on behalf of such Purchaser or any
other holder of a Note.

        (b)   The indemnities in Sections 11.1(b) and 11.2(b) shall terminate as
of the termination date of each respective representation or warranty that is
subject to indemnification, except in each case as to matters for which a Claim
Notice for indemnity has been delivered to the Indemnifying Person on or before
such termination date.

        (c)   Notwithstanding anything to the contrary in this Agreement, for
purposes of determining whether a representation or warranty has been breached
for purposes of this Article XI, each representation and warranty set forth in
Article VII and Article VIII, shall be read without regard to and without giving
effect to any "material," "materiality," "Material Adverse Effect", or similar
qualifications, that may be contained in any such representation or warranty.

        (d)   The Company shall not have any liability for any Damages under
Section 11.2(b), except for the Fundamental Representations, until the aggregate
of all such claims result in total Damages which are incurred or suffered by the
Purchasers (or their related Indemnified Persons) that exceed $1,000,000 (the
"Threshold"), in which case the Purchasers shall be entitled to indemnification
for all Damages incurred; provided, however, that the aggregate liability of the
Company pursuant to Section 11.2(b), except for the Fundamental Representations,
shall not be in excess of an aggregate amount of $20,000,000 (the "Cap").

        (e)   The Purchasers shall not have any liability for any Damages
arising under Section 11.1(b) until the aggregate of all such claims result in
total Damages which are incurred or suffered by the Company that exceeds the
Threshold, in which case the Company shall be entitled to indemnification for
all Damages incurred; provided, however, that the aggregate liability of the
Purchasers pursuant to Section 11.1(b) shall not be in excess of an aggregate
amount of the Cap.

        (f)    If any Damages sustained by an Indemnified Person are covered by
an insurance policy or an indemnification, contribution or similar obligation of
another Person (other than an Affiliate of such

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Indemnified Person), both the Indemnified Person and the Indemnifying Person
shall use commercially reasonable efforts to collect such insurance proceeds or
indemnity, contribution or similar payments. The amount of any Damages subject
to indemnification shall be reduced by the amounts recoverable under applicable
insurance policies or an indemnification, contribution or similar obligation of
another Person (other than an Affiliate of such Indemnified Person) with respect
to claims related to such Damages (net of (i) any increase in premiums,
(ii) retroactive premiums, (iii) premium adjustments or (iv) any deductible
incurred in obtaining such proceeds) and if any Indemnified Person receives such
insurance proceeds or indemnity, contribution or similar payments after the
settlement of any indemnification claim, such Indemnified Person shall refund to
the Indemnifying Party or parties the amount of such insurance proceeds or
indemnity, contribution or similar payments, up to the amount received in
connection with such indemnification claim. It is the intention of the parties
hereto that no insurer or third party shall be entitled to any benefit or right
it would not be entitled to receive in the absence of this Section 11.4(f).

        (g)   Notwithstanding anything to the contrary contained in this
Agreement (other than the final proviso in this subsection (g)) or provided for
under any applicable Law, no Indemnifying Person shall be liable under this
Article XI (other than under Section 11.2(c)) to any Indemnified Person, either
in contract or in tort, for any loss of profits or any consequential,
incidental, exemplary, indirect, special or punitive damages of such Indemnified
Person, including loss of future revenue, income or profits, whether or not the
possibility of such damages has been disclosed to the Indemnifying Person in
advance or could have been reasonably foreseen by the Indemnifying Person;
provided, however, that nothing in this Section 11.4(g) shall limit the
liability of an Indemnified Person under this Article XI for any loss of profits
or any consequential, incidental, exemplary, indirect, special or punitive
damages, including loss of future revenue, income or profits relating to the
breach or alleged breach hereof actually paid by an Indemnified Person to a
third party; and provided further that nothing in this Section 11.4(g) shall
limit any claims based on diminution of value.

        (h)   Each Indemnified Person shall use commercially reasonable efforts
to mitigate any Damages for which such Indemnified Person seeks indemnification
(it is understood that an Indemnified Person's failure to satisfy its
obligations under this Section 11.4(h) shall constitute a breach of this
Agreement by such Indemnified Person but that such failure shall not limit such
Indemnified Person's rights under this Article XI and shall not limit an
Indemnifying Person's rights to reduce the amount payable by such Indemnifying
Person for Damages to reflect such breach). Each Indemnified Person shall use
commercially reasonable efforts to pursue against Persons who are not parties to
this Agreement any and all rights or benefits (including rights to be
indemnified and held harmless or rights to be reimbursed for, or to share,
certain costs, expenses or Taxes) with respect to any matter that is
indemnifiable under this Article XI.

        (i)    Notwithstanding anything to the contrary contained in this
Agreement, from and after Closing this Article XI contains the Parties'
exclusive remedy against each other with respect to breaches of the
representations, warranties, covenants and agreements of the Parties contained
in Articles VII, VIII and IX (other than any such covenants and agreements that
are to be performed, in part or in full, after the Closing) and the affirmations
of such representations, warranties, covenants and agreements contained in the
certificate delivered by each Party at Closing pursuant to Sections 5.3 and
6.3(a), as applicable.

        (j)    For Tax purposes, the parties agree that all indemnification
payments made hereunder constitute adjustments to the Purchase Price and shall
report any payments as such on their Tax returns, unless otherwise required by
applicable law.

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ARTICLE XII

VOTING

        12.1    Voting.    On any matter presented to the shareholders of the
Company for their action or consideration at any meeting of the shareholders of
the Company or for action by written consent, each Purchaser shall be entitled
to the number of votes equal to the number of shares of Common Stock into which
the Notes held by such Purchaser (as of the record date for determining
shareholders entitled to vote on such matter) are convertible based on the
then-effective Conversion Price (including any adjustments pursuant to
Article XIII) and shall have voting rights and powers equal to the voting rights
and powers of the Common Stock (except as otherwise expressly provided herein or
as required by Law, voting together with the Common Stock as a single class) and
shall be entitled to notice of any such shareholders' meeting or action by
written consent in accordance with the Bylaws of the Company. Fractional votes
shall not, however, be permitted and any fractional voting rights resulting from
the above formula shall be rounded down to the nearest whole number.
Notwithstanding the foregoing, the holders of Notes shall vote as a separate
class on any matters as to which a separate class vote is required by applicable
Law or as provided in Section 12.2.

        12.2    No Adverse Actions.    As long as any Notes are outstanding, the
Company shall not, without the affirmative vote or written consent of the
holders of 67% of the then outstanding principal amount of Notes, amend its
articles of incorporation or bylaws in any manner that adversely affects the
voting rights of the Notes, or enter into any agreement committing the Company
to do any of the foregoing.

ARTICLE XIII

CONVERSION

        At any time or times after the Closing, the Note shall be convertible
into shares of Common Stock, on the terms and conditions set forth in this
Article XIII.

        13.1    Conversion Right.    

        (a)   At any time and from time to time on or after the Closing Date,
each Purchaser shall be entitled to convert all or any portion of the
outstanding and unpaid principal and all or any portion of the accrued and
unpaid interest on the Notes owned by such Purchaser (such amount to be the
"Conversion Amount" for purposes of this Article XIII) into fully paid and
nonassessable shares of Common Stock in accordance with Section 13.3, at the
Conversion Price (as defined below).

        (b)   Upon or at any time after the Conversion Milestone, the Company
shall be entitled to cause the conversion of all or any portion of the
outstanding and unpaid principal and all or any portion of the accrued and
unpaid interest on the Notes (such amount to be the "Conversion Amount" for
purposes of this Article XIII) into fully paid and nonassessable shares of
Common Stock in accordance with Section 13.3, at the Conversion Price, provided
that if the Company causes conversion of less than all of the outstanding
principal amount of the Notes, such conversions shall be made from each of the
Purchasers on a pro rata basis in proportion to the principal amount of Notes
held by them.

        (c)   The Company shall not issue any fraction of a share of Common
Stock upon any conversion. If the issuance would result in the issuance of a
fraction of a share of Common Stock, the Company shall round such fraction of a
share of Common Stock up to the next whole share. The Company shall pay any and
all transfer, stamp and similar Taxes that may be payable with respect to the
issuance and delivery of Common Stock upon conversion of any Conversion Amount.

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        13.2    Conversion.    The number of shares of Common Stock issuable
upon conversion of any Conversion Amount pursuant to Section 13.1(a) or
(b) shall be determined by dividing (x) the applicable Conversion Amount by
(y) the Conversion Price.

        (a)   "Initial Conversion Price" means $2.70.

        (b)   "Conversion Price" as of any date herein, means the Initial
Conversion Price as adjusted from time to time pursuant to this Article XIII
hereof. It is expressly acknowledged and agreed by the Company that the
Conversion Price on the Closing Date may be lower than the Initial Conversion
Price as a result of adjustments to the Initial Conversion Price set forth in
this Article XIII that are based on events occurring prior to the Closing Date.

        13.3    Mechanics of Conversion.    

        (a)   To convert any Conversion Amount into shares of Common Stock on
any date (a "Purchaser Conversion Date"), a Purchaser shall (A) transmit for
delivery, for receipt on or prior to 7:00 p.m., New York time, on such date,
which must be a Business Day, a copy of an executed notice of conversion in the
form attached hereto as Exhibit B-1 (the "Purchaser Conversion Notice") to the
Company and the Transfer Agent and (B) surrender the Notes to a common carrier
for delivery to the Company within three (3) Business Days following a
conversion of the Notes. On or before the first (1st) Business Day following the
date of receipt of a Purchaser Conversion Notice, the Company shall transmit by
facsimile a confirmation of receipt of such Purchaser Conversion Notice to such
Purchaser and the Transfer Agent. On or before the third (3rd) Trading Day
following the date of receipt of a Purchaser Conversion Notice (a "Purchaser
Share Delivery Date"), the Company shall (x) provided, that the Transfer Agent
is participating in the DTC Fast Automated Securities Transfer Program and the
shares are eligible to be sold without restrictions (other than volume
restrictions) under Rule 144 under the Securities Act, credit such aggregate
number of shares of Common Stock to which such Purchaser shall be entitled to
such Purchaser's or its designee's balance account with DTC through its
Deposit/Withdrawal At Custodian system or (y) otherwise, issue and deliver to
the address as specified in the Purchaser Conversion Notice, a certificate,
registered in the name of such Purchaser or its designees, for the number of
shares of Common Stock to which such Purchaser shall be entitled. If the
outstanding principal of the Notes is greater than the principal portion of the
Conversion Amount being converted, then the Company shall as soon as practicable
and in no event later than three (3) Business Days after receipt of the Notes
and at its own expense, issue and deliver to such Purchaser a new Note
representing the outstanding principal not converted. The Person or Persons
entitled to receive the shares of Common Stock issuable upon a conversion of the
Notes shall be treated for all purposes as the record purchaser of such shares
of Common Stock on the Purchaser Conversion Date, irrespective of the date such
shares are credited to such purchaser's account with DTC or the date of delivery
of the certificates evidencing such Conversion Shares, as the case may be.

        (b)   To convert any Conversion Amount into shares of Common Stock on
any date (a "Company Conversion Date"), the Company shall transmit for delivery,
for receipt on or prior to 7:00 p.m., New York time, on such date, which must be
a Business Day, a copy of an executed notice of conversion in the form attached
hereto as Exhibit B-2 (the "Company Conversion Notice") to the Purchasers and
the Transfer Agent and the Purchasers shall surrender the Notes to a common
carrier for delivery to the Company within three (3) Business Days following a
conversion of the Notes. On or before the first (1st) Business Day following the
date of receipt of a Company Conversion Notice, each Purchaser shall transmit by
facsimile a confirmation of receipt of such Company Conversion Notice to the
Company and the Transfer Agent. On or before the third (3rd) Trading Day
following the date of receipt by the Purchasers of a Company Conversion Notice
(a "Company Share Delivery Date" and together with a Purchase Share Delivery
Date, a "Share Delivery Date"), the Company shall (x) provided, that the
Transfer Agent is participating in the DTC Fast Automated Securities Transfer
Program and the shares are eligible to be sold without restrictions (other than
volume restrictions) under Rule 144 under the

52

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Securities Act, credit such aggregate number of shares of Common Stock to which
each Purchaser shall be entitled to such Purchaser's balance account with DTC
through its Deposit/Withdrawal At Custodian system or (y) if the Transfer Agent
is not participating in the DTC Fast Automated Securities Transfer Program,
issue and deliver to each Purchaser a certificate, registered in the name of
such Purchaser, for the number of shares of Common Stock to which such Purchaser
shall be entitled. If the outstanding principal of the Notes is greater than the
principal portion of the Conversion Amount being converted, then the Company
shall as soon as practicable and in no event later than three (3) Business Days
after receipt of the Notes and at its own expense, issue and deliver to each
Purchaser a new Note representing the outstanding principal not converted. The
Person or Persons entitled to receive the shares of Common Stock issuable upon a
conversion of the Notes shall be treated for all purposes as the record
purchaser of such shares of Common Stock on the Company Conversion Date,
irrespective of the date such shares are credited to the purchasers' account
with DTC or the date of delivery of the certificates evidencing such Conversion
Shares, as the case may be.

        (c)   If the Company shall fail to issue a certificate to a Purchaser or
credit such Purchaser's balance account with DTC, as applicable, for the number
of shares of Common Stock to which such Purchaser is entitled upon conversion of
any Conversion Amount on or prior to the Share Delivery Date (a "Conversion
Failure"), then (A) the Company shall pay damages to the Purchasers for each
trading day of such Conversion Failure in an amount equal to 1.5% of the product
of (1) the sum of the number of shares of Common Stock not issued to the
Purchasers on or prior to the Share Delivery Date and to which the Purchasers is
entitled, and (2) the Closing Sale Price of the Common Stock on the Share
Delivery Date; provided, that the payment of such damages shall not relieve the
Company from its obligation to deliver the shares to which the Purchasers are
entitled upon conversion of such Conversion Amount except to the extent of a
voided Conversion Notice pursuant to clause (B) of this sentence and (B) the
Purchasers, upon written notice to the Company, may void its Conversion Notice
with respect to any portion of the Conversion Amount in respect of which there
has been a Conversion Failure, and retain or have returned, as the case may be,
any portion of the Notes in respect of which there has been a Conversion
Failure; provided, that the voiding of a Conversion Notice shall not affect the
Company's obligations to pay any amounts which have accrued under the Notes
prior to the date of such notice pursuant to this Section 13.3(c) or otherwise.
In addition to the foregoing, if the Company shall fail on or prior to the Share
Delivery Date to issue and deliver a certificate to such Purchaser or credit
such Purchaser's balance accounts with DTC for the number of shares of Common
Stock to which such Purchaser is entitled upon such Purchaser's conversion of
any Conversion Amount or on any date of the Company's obligation to deliver
shares of Common Stock as contemplated pursuant to clause (ii) below, and if on
or after such Share Delivery Date such Purchaser purchases (in an open market
transaction or otherwise) Common Stock to deliver in satisfaction of a sale by
such Purchaser of Common Stock issuable upon such conversion that such Purchaser
anticipated receiving from the Company (a "Buy-In"), then the Company shall,
within three (3) Trading Days after such Purchaser's request and in such
Purchaser's discretion, either (i) pay cash to such Purchaser in an amount equal
to such Purchaser's total purchase price (including brokerage commissions and
other out-of-pocket expenses, if any) for the shares of Common Stock so
purchased (the "Buy-In Price"), at which point the Company's obligation to issue
and deliver such certificate or credit such Purchaser's balance account with DTC
for the shares of Common Stock to which such Purchaser is entitled upon such
Purchaser's conversion of the applicable Conversion Amount shall terminate, or
(ii) promptly honor its obligation to deliver to such Purchaser a certificate or
certificates representing such Common Stock or credit such Purchaser's balance
account with DTC for the number of shares of Common Stock to which such
Purchaser is entitled upon such Purchaser's conversion hereunder (as the case
may be) and pay cash to such Purchaser in an amount equal to the excess (if any)
of the Buy-In Price over the product of (A) such number of shares of Common
Stock, times (B) the Closing Sale Price on the Conversion Date.

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        (d)   In the event that the Company receives a Conversion Notice from
more than one Purchaser for the same Conversion Date and the Company can convert
some, but not all, of such portions of the Notes submitted for conversion, the
Company shall convert from each Purchaser electing to have Notes converted on
such date a pro rata amount of such Purchaser's portion of its Notes submitted
for conversion based on the principal amount of Notes submitted for conversion
on such date by such Purchasers relative to the aggregate principal amount of
all Notes submitted for conversion on such date; provided, however, that nothing
in this Section 13.3(d) shall be deemed to release the Company from any such
failure to convert. In the event of a dispute as to the number of shares of
Common Stock issuable to a Purchaser in connection with a conversion of the
Notes, the Company shall issue to such Purchaser the number of shares of Common
Stock not in dispute and resolve such dispute in accordance with the terms of
this Agreement.

        13.4    Adjustment Upon Issuance of Shares of Common Stock.    If and
whenever on or after the date hereof the Company issues or sells, or in
accordance with this Section 13.4 is deemed to have issued or sold, any shares
of Common Stock (including the issuance or sale of shares of Common Stock owned
or held by or for the account of the Company) for a consideration per share (the
"New Issuance Price") less than a price equal to the Conversion Price in effect
immediately prior to such issue or sale or deemed issuance or sale (such
Conversion Price then in effect is referred to as the "Applicable Price") (the
foregoing a "Dilutive Issuance"), other than distributions covered by
Section 13.6, then the Conversion Price then in effect shall be reduced to a
price determined in accordance with the following formula:

    R1 = R ×   OS + A

--------------------------------------------------------------------------------

OS + B    

Where:

    R1 =   the Conversion Price in effect immediately after such Dilutive
Issuance;
 
 
R =
 
the Conversion Price in effect immediately prior to such Dilutive Issuance;
 
 
OS =
 
the number of shares of Common Stock outstanding immediately prior to such
Dilutive Issuance (treating for this purpose as outstanding all shares of Common
Stock issuable upon exercise of Options outstanding immediately prior to such
issue or upon conversion or exchange of Convertible Securities (excluding the
Notes) outstanding immediately prior to such issue (to the extent such Options
or Convertible Securities have an exercise or conversion price below R);
 
 
A =
 
the number of shares of Common Stock that would have been issued (or be deemed
to have been issued) if such Dilutive Issuance had been issued at a price per
share equal to R (determined by dividing the aggregate consideration received by
the Company in respect of such issue by R); and
 
 
B =
 
the number of shares of Common Stock issued (or deemed to have been issued) in
such Dilutive Issuance.

        For purposes of determining the adjusted Conversion Price under this
Section 13.4, the following shall be applicable:

        (A)    Issuance of Options.    If the Company in any manner grants or
sells any Options and the lowest price per share for which one share of Common
Stock is issuable upon the exercise of any such Option or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any
such Option is less than the Applicable Price, then such share of Common Stock
shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the granting or sale of such Option for such price per
share. For purposes of this

54

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Section 13.4(A), the "lowest price per share for which one share of Common Stock
is issuable upon the exercise of any such Options or upon conversion, exercise
or exchange of any Convertible Securities issuable upon exercise of any such
Option" shall be equal to the sum of the lowest amounts of consideration (if
any) received or receivable by the Company with respect to any one share of
Common Stock upon the granting or sale of the Option, upon exercise of the
Option and upon conversion, exercise or exchange of any Convertible Security
issuable upon exercise of such Option. Except as contemplated below, no further
adjustment of the Conversion Price shall be made upon the actual issuance of
such share of Common Stock or of such Convertible Securities upon the exercise
of such Options or upon the actual issuance of such share of Common Stock upon
conversion, exercise or exchange of such Convertible Securities. The Conversion
Price will be readjusted to the extent that such Options are not exercised prior
to their expiration.

        (B)    Issuance of Convertible Securities.    If the Company in any
manner issues or sells any Convertible Securities and the lowest price per share
for which one share of Common Stock is issuable upon the conversion, exercise or
exchange thereof is less than the Applicable Price, then such share of Common
Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such Convertible Securities for
such price per share. For the purposes of this Section 13.4(B), the "lowest
price per share for which one share of Common Stock is issuable upon the
conversion, exercise or exchange thereof" shall be equal to the sum of the
lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the
Convertible Security and upon conversion, exercise or exchange of such
Convertible Security. Except as contemplated below, no further adjustment of the
Conversion Price shall be made upon the actual issuance of such share of Common
Stock upon conversion, exercise or exchange of such Convertible Securities, and
if any such issue or sale of such Convertible Securities is made upon exercise
of any Options for which adjustment of the Conversion Price has been or is to be
made pursuant to other provisions of this Section 13.4, except as contemplated
below, no further adjustment of the Conversion Price shall be made by reason of
such issue or sale. The Conversion Price will be readjusted to the extent that
such Convertible Securities are not converted prior to the last day on which
they are convertible.

        (C)    Change in Option Price or Rate of Conversion.    If the purchase
or exercise price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exercise or exchange of any Convertible
Securities, or the rate at which any Convertible Securities are convertible into
or exercisable or exchangeable for shares of Common Stock increases or decreases
at any time, the Conversion Price in effect at the time of such increase or
decrease shall be adjusted to the Conversion Price which would have been in
effect at such time had such Options or Convertible Securities provided for such
increased or decreased purchase price, additional consideration or increased or
decreased conversion rate (as the case may be) at the time initially granted,
issued or sold. For purposes of this Section 13.4(C), if the terms of any Option
or Convertible Security that was outstanding as of the Closing Date are
increased or decreased in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the shares of Common
Stock deemed issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of such increase or decrease. No
adjustment pursuant to this Section 13.4(C) shall be made if such adjustment
would result in an increase of the Conversion Price then in effect.

        (D)    Calculation of Consideration Received.    In case any Option is
issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto, the Options
will be deemed to have been issued for a consideration of $0.01. If any shares
of Common Stock, Options or Convertible Securities are issued or sold or deemed
to have been

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issued or sold for cash, the consideration received therefor will be deemed to
be the amount of consideration received by the Company therefor. If any shares
of Common Stock, Options or Convertible Securities are issued or sold for a
consideration other than cash, the amount of such consideration received by the
Company will be the fair value of such consideration, except where such
consideration consists of publicly traded securities, in which case the amount
of consideration received by the Company for such securities will be the
arithmetic average of the VWAP of such security for the five (5) Trading Day
period immediately preceding the date of receipt. If any shares of Common Stock,
Options or Convertible Securities are issued to the owners of the non-surviving
entity in connection with any merger in which the Company is the surviving
entity, the amount of consideration therefor will be deemed to be the fair value
of such portion of the net assets and business of the non-surviving entity as is
attributable to such shares of Common Stock, Options or Convertible Securities
(as the case may be). The fair value of any consideration other than cash or
publicly traded securities will be determined jointly by the Company and the
Purchasers. If such parties are unable to reach agreement within ten (10) days
after the occurrence of an event requiring valuation (the "Valuation Event"),
the fair value of such consideration will be determined within five (5) Trading
Days after the tenth (10th) day following such Valuation Event by an
independent, reputable appraiser (an "Appraiser") jointly selected by the
Company and the Majority Purchasers; provided, that if the Company and the
Majority Purchasers cannot agree on an Appraiser within such ten (10) Trading
Days, each will choose an Appraiser and the two Appraisers will choose a third
Appraiser who will determine the fair value of such consideration. The
determination of such appraiser shall be final and binding upon all parties
absent manifest error (provided such determination is approved by the Majority
Purchasers) and the fees and expenses of such appraiser shall be borne by the
Company.

        13.5    Adjustment for Change in Capital Stock.    If, after the date
hereof, the Company:

        (a)   pays a dividend or makes another distribution to all or
substantially all holders of Common Stock payable exclusively in shares of
Common Stock;

        (b)   subdivides the outstanding shares of Common Stock into a greater
number of shares; or

        (c)   combines the outstanding shares of Common Stock into a smaller
number of shares;

then the Conversion Price will be adjusted based on the following formula:

    R1 = R ×   OS1

--------------------------------------------------------------------------------

OS    

where:

    R1 =   the Conversion Price in effect immediately after the open of business
on the Ex-Dividend Date for such dividend or distribution, or immediately after
the open of business on the effective date of such subdivision or combination,
as the case may be;
 
 
R =
 
the Conversion Price in effect immediately prior to the open of business on the
Ex-Dividend Date for such dividend or distribution, or immediately prior to the
open of business on the effective date of such subdivision or combination, as
the case may be;
 
 
OS1 =
 
the number of shares of Common Stock outstanding immediately prior to the open
of business on the Ex-Dividend Date for such dividend or distribution, or
immediately prior to the open of business on the effective date of such
subdivision or combination, as the case may be; and
 
 
OS =
 
the number of shares of Common Stock outstanding immediately after such dividend
or distribution, or immediately after the effective date of such subdivision or
combination, as the case may be.

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        Such adjustment shall become effective immediately after the open of
business on the Ex-Dividend Date for such dividend or distribution, or the
effective date for such subdivision or combination. If any dividend or
distribution of the type described in this Section 13.5 is declared but not so
paid or made, or the outstanding shares of Common Stock are not split or
combined, as the case may be, the Conversion Price shall be immediately
readjusted, effective as of the date the Board of Directors determines not to
pay such dividend or distribution, or split or combine the outstanding shares of
Common Stock, as the case may be, to the Conversion Price that would then be in
effect if such dividend, distribution, share split or share combination had not
been declared or announced.

        If, after an adjustment, a Purchaser upon conversion of its Note may
receive shares of two or more classes of Capital Stock of the Company, the
Conversion Price shall thereafter be subject to adjustment upon the occurrence
of an action taken with respect to any such class of Capital Stock as is
contemplated by this Article XIII with respect to the Common Stock, on terms
comparable to those applicable to Common Stock in this Article XIII.

        13.6    Adjustment for Rights Issue.    If, after the date hereof, the
Company distributes any rights or Options to all or substantially all holders of
Common Stock entitling such holders to purchase (for a period expiring within
sixty (60) days) shares of Common Stock at a price per share less than the
average of the Closing Sale Prices of the Common Stock for the ten
(10) consecutive Trading Day period ending on, and including, the Trading Day
immediately preceding the date of announcement of such distribution, the
Conversion Price shall be adjusted in accordance with the following formula;
provided, however, that the Conversion Price will be readjusted to the extent
that such rights or Options are not exercised prior to their expiration or are
not distributed:

    R1 = R ×   O+((N×P)/M)

--------------------------------------------------------------------------------

(O+N)    

where:

    R1 =   the Conversion Price in effect immediately after the open of business
on the Ex-Dividend Date for such distribution;
 
 
R =
 
the Conversion Price in effect immediately prior to the open of business on the
Ex-Dividend Date for such distribution;
 
 
O =
 
the number of shares of Common Stock outstanding at the close of business on the
Trading Day immediately preceding the Ex-Dividend Date for such distribution;
 
 
N =
 
the number of additional shares of Common Stock issuable pursuant to such rights
or Options;
 
 
P =
 
the per-share offering price payable to exercise such rights or Options for the
additional shares plus the per-share consideration (if any) the Company receives
for such rights or Options; and
 
 
M =
 
the average of the Closing Sale Prices of the Common Stock for the ten
(10) consecutive Trading Day period ending on, and including, the Trading Day
immediately preceding the date of announcement of such distribution.

        Such adjustment shall be successively made whenever any such rights or
Options are distributed and shall become effective immediately after the open of
business on the Ex-Dividend Date for such distribution. To the extent that
shares of the Common Stock are not delivered after the expiration of such rights
or Options, the Conversion Price shall be readjusted to the Conversion Price
that would then be in effect had the adjustments made upon the issuance of such
rights or Options been made on the basis of delivery of only the number of
shares of Common Stock actually delivered. If such rights or

57

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Options are not so issued, the Conversion Price shall be adjusted promptly to be
the Conversion Price that would then be in effect if such Ex-Dividend Date for
such distribution had not been fixed.

        For purposes of this Section 13.6, in determining whether any rights or
Options entitle the holders to subscribe for or purchase Common Stock at less
than the average of the Closing Sale Prices of Common Stock for each Trading Day
in the applicable ten (10) consecutive Trading Day period, there shall be taken
into account any consideration received by the Company for such rights or
Options and any amount payable on exercise thereof, with the value of such
consideration, if other than cash, to be determined by the Board of Directors.

        No adjustment shall be made under this Section 13.6 if the application
of the formula stated above in this Section 13.6 would result in a value of R1
that is equal to or greater than the value of R.

        13.7    Adjustment for Other Distributions.    If, after the date
hereof, the Company distributes to all or substantially all holders of its
Common Stock any of its debt, securities or assets or any rights or Options to
purchase securities of the Company (including securities or cash, but excluding
(a) distributions of capital stock as to which an adjustment is required
pursuant to Section 13.5, (b) distributions of rights or Options as to which an
adjustment is required pursuant to Section 13.6, (c) dividends or other
distributions paid exclusively in cash (as to which Section 13.8 applies) and
(d) any Spin-off to which the provisions set forth below in this Section 13.7
shall apply), the Conversion Price shall be decreased in accordance with the
formula:

    R1 = R ×   M - F

--------------------------------------------------------------------------------

M    

where:

    R1 =   the Conversion Price in effect immediately after the open of business
on the Ex-Dividend Date for such distribution;
 
 
R =
 
the Conversion Price in effect immediately prior to the open of business on the
Ex-Dividend Date for such distribution;
 
 
M =
 
the average of the Closing Sale Prices of the Common Stock for the ten
(10) consecutive Trading Day-period ending on, and including, the Trading Day
immediately preceding the Ex-Dividend Date for such distribution; and
 
 
F =
 
the fair market value, as determined by the Board of Directors, of the portion
of those assets, securities, rights, or Options to be distributed in respect of
each share of Common Stock immediately prior to the open of business on the
Ex-Dividend Date for such distribution.

        With respect to an adjustment pursuant to this Section 13.7 where there
has been a payment of a dividend or other distribution on the Common Stock in
shares of Capital Stock of any class or series, or similar equity interest, of
or relating to a Subsidiary or other business unit, where such Capital Stock or
similar equity interest is listed or quoted (or will be listed or quoted upon
consummation of the Spin-off) on a national securities exchange or reasonably
comparable non-U.S. equivalent, which is referred to herein as a "Spin-off," the
Conversion Price will be decreased based on the following formula:

    R1 = R ×   MP

--------------------------------------------------------------------------------

F + MP    

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where:

    R1 =   the Conversion Price in effect immediately after the open of business
on the Ex-Dividend Date for the Spin-off;
 
 
R =
 
the Conversion Price in effect immediately prior to the open of business on the
Ex-Dividend Date for the Spin-off;
 
 
F =
 
the average of the Closing Sale Prices of the Capital Stock or similar equity
interest distributed to holders of Common Stock applicable to one share of the
Common Stock over the first ten (10) consecutive Trading Day period immediately
following, and including, the Ex-Dividend Date for the Spin-off (such period,
the "Valuation Period"); and
 
 
MP =
 
the average of the Closing Sale Prices of the Common Stock over the Valuation
Period.

        The adjustment to the Conversion Price under the preceding paragraph of
this Section 13.7 will be made immediately after the open of business on the day
after the last day of the Valuation Period, but will be given effect as of the
open of business on the Ex-Dividend Date for the Spin-off. For purposes of
determining the Conversion Price, in respect of any conversion during the ten
(10) consecutive Trading Days commencing on the Ex-Dividend Date for any
Spin-off, references within the portion of this Section 13.7 related to
Spin-offs to ten (10) consecutive Trading Days shall be deemed replaced with
such lesser number of Trading Days as have elapsed from, and including, the
Ex-Dividend Date for such Spin-off to, but excluding, the relevant Conversion
Date.

        13.8    Adjustment for Cash Dividends.    If, after the date hereof, the
Company distributes to all or substantially all holders of its Common Stock any
dividends payable exclusively in cash, the Conversion Price shall be adjusted in
accordance with the formula:

    R1 = R ×   SP-C

--------------------------------------------------------------------------------

SP    

where:

    R1 =   the Conversion Price in effect immediately after the open of business
on the Ex-Dividend Date for such distribution;
 
 
R =
 
the Conversion Price in effect immediately prior to the open of business on the
Ex-Dividend Date for such distribution;
 
 
SP =
 
the average of the Closing Sale Prices of Common Stock over the ten
(10) consecutive Trading Day period ending on, and including, the Trading Day
immediately preceding the Ex-Dividend Date for such distribution; and
 
 
C =
 
the amount in cash per share the Company distributes to holders of Common Stock.

        The adjustment shall become effective immediately after the open of
business on the Ex-Dividend Date with respect to the distribution.

        13.9    Adjustment for Company Tender Offer.    If, after the date
hereof, the Company or any Subsidiary of the Company makes a payment to holders
of Common Stock in respect of a tender or exchange offer, other than an odd-lot
offer, by the Company or any of its Subsidiaries for shares of Common Stock, to
the extent that the cash and value of any other consideration included in the
payment per share of Common Stock exceeds the average of the Closing Sale Prices
over the ten (10) consecutive Trading Day period commencing on, and including,
the Trading Day following the last

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date on which tenders or exchanges may be made pursuant to such tender or
exchange offer ("Expiration Date"), the Conversion Price shall be decreased
based on the following formula:

    R1 = R ×   OS×SP

--------------------------------------------------------------------------------

F+(SP×OS')    

where:

    R1 =   the Conversion Price in effect immediately after the open of business
on the Trading Day following the Expiration Date;
 
 
R =
 
the Conversion Price in effect immediately prior to the open of business on the
Trading Day following the Expiration Date;
 
 
F =
 
the fair market value, as determined by the Board of Directors, of the aggregate
consideration payable in such tender or exchange offer (up to any maximum amount
specified in the terms of the tender or exchange offer) for all shares of Common
Stock that the Company or any Subsidiary of the Company purchases in such tender
or exchange offer, such fair market value to be measured as of the expiration
time of the tender or exchange offer ("Expiration Time");
 
 
OS =
 
the number of shares of Common Stock outstanding immediately prior to the
Expiration Time (prior to giving effect to such tender offer or exchange offer);
 
 
OS' =
 
the number of shares of Common Stock outstanding immediately after the
Expiration Time (after giving effect to such tender offer or exchange offer);
and
 
 
SP =
 
the average of the Closing Sale Prices of Common Stock over the ten
(10) consecutive Trading Day period commencing on, and including, the Trading
Day following the Expiration Date.

        The adjustment to the Conversion Price under the preceding paragraph of
this Section 13.9 will be made immediately after the open of business on the
eleventh (11th) Trading Day following the Expiration Date but will be given
effect at the open of business on the Trading Day following the Expiration Date.
For purposes of determining the Conversion Price, in respect of any conversion
during the ten (10) consecutive Trading Days commencing on the Trading Day
following the Expiration Date, references within this Section 13.9 to ten
(10) consecutive Trading Days shall be deemed replaced with such lesser number
of Trading Days as have elapsed from, and including, the Trading Day following
the Expiration Time to, but excluding, the relevant Conversion Date.

        13.10    When Adjustment May Be Deferred.    No adjustment in the
Conversion Price need be made unless the adjustment would require an increase or
decrease of more than 1% of the Conversion Price. If the adjustment is not made
because the adjustment does not change the Conversion Price by more than one
percent (1%), then the adjustment that is not made shall be carried forward and
taken into account in any future adjustment. Notwithstanding the foregoing, all
such carried-forward adjustments shall be made with respect to the affected
Notes on the Trading Day that is thirty (30) Trading Days prior to the scheduled
Maturity Date and thereafter any adjustment to the Conversion Price shall be
made on each subsequent Scheduled Trading Day immediately preceding the
scheduled Maturity Date.

        All calculations under this Article XIII shall be made to the nearest
cent or to the nearest 1/10,000th of a share, as the case may be.

        13.11    When No Adjustment Required.    No adjustment need be made as a
result of:

        (a)   the issuance of any shares of Common Stock by the Company upon
conversion of the Notes;

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        (b)   the issuance of any shares of Common Stock pursuant to any present
or future plan providing for the reinvestment of dividends or interest payable
on securities of the Company and the investment of additional optional amounts
in shares of Common Stock under any plan;

        (c)   the issuance of any shares of Common Stock or Options pursuant to
any present or future employee, director or consultant Benefit Plan of the
Company or any of its Subsidiaries; provided that any such issuances are made in
accordance with the terms, conditions and limitations of such plans as they
existed as of the date hereof and without effect to any amendments or other
modifications thereof after the date hereof, unless previously approved by the
Majority Purchasers;

        (d)   any accrued and unpaid interest;

        (e)   the issuance of any shares of Common Stock pursuant to any Option
outstanding as of the date hereof or issuable pursuant to any agreement set
forth in Schedule 13.11(e), provided that such issuance of shares of Common
Stock upon exercise of such Options or Convertible Securities (or under such
agreements) is made pursuant to the terms of such Options or Convertible
Securities (or of such agreements) in effect on the date immediately preceding
the date hereof and the exercise, conversion or similar price and the number of
shares underlying such Option or Convertible Security (or the terms and
conditions of such agreements) are not amended or changed after the date hereof
and the other material terms of such Options or Convertible Securities are not
otherwise amended or changed after the date hereof, unless previously approved
by the Majority Purchasers;

        (f)    the issuance of the rights pursuant to any Company stockholders
rights plan ("Stockholder Rights Plan");

        (g)   the distribution of separate certificates representing the rights
under a Stockholder Rights Plan;

        (h)   the exercise or redemption of the rights in accordance with any
rights agreement under a Stockholder Rights Plan; or

        (i)    the termination or invalidation of the rights under a Stockholder
Rights Plan.

        If any event described in Section 13.11(f) through (i) occurs, the
Purchasers will receive the rights under such Stockholders Rights Plan upon
conversion, unless, prior to any conversion, the rights have separated from the
Common Stock. If the rights have separated, the Conversion Price will be
adjusted at the time of separation as provided by Section 13.6 (subject to
readjustment in the event of the expiration termination or redemption of such
rights.)

        No adjustment need be made for a transaction referred to in
Sections 13.5 through 13.9 if the Purchasers may participate in the transaction
(as a result of holding the Notes, and at the same time and upon the same terms
as holders of Common Stock participate) on a basis that the Majority Purchasers
determine to be fair and appropriate (excluding any participation through
exercise of any preemptive rights), and with notice of such participation to the
Purchasers, in any of the events described in Sections 13.4 through 13.9 as if
each Purchaser held a number of shares of Common Stock equal to the Conversion
Price, divided into by the principal amount (expressed in thousands) of Notes
held by such Purchaser, without having to convert its Notes.

        13.12    Notice of Adjustment.    Whenever the Conversion Price is
adjusted, the Company shall promptly or within three (3) Business Days mail to
the Purchasers a notice of the adjustment. The Company shall file with the
trustee (if any) and the conversion agent (if any) such notice briefly stating
the facts requiring the adjustment and the manner of computing it. The notice of
adjustment shall be conclusive evidence that the adjustment is correct, unless
the Majority Purchasers, by notice to the Company within three (3) Business Days
of receiving such notice of adjustment, disputes such adjustment. If, after
discussing in good faith for ten (10) Business Days, the parties are unable to
reach

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agreement over the appropriate adjustment, such adjustment will be determined
within five (5) Business Days after such ten (10) Business Day period by an
independent, reputable national accounting firm (an "Accounting Firm") jointly
selected by the Company and the Majority Purchasers; provided that if the
Company and the Majority Purchasers cannot agree on an Accounting Firm within
such ten (10) Business Day period, each will choose an Accounting Firm and the
two Accounting Firms will choose a third Accounting Firm who will determine the
appropriate adjustment. The determination of the Accounting Firm shall be final
and binding upon all parties absent manifest error, and the fees and expenses of
such Accounting Firm shall be borne by the party with whom the Accounting Firm
most closely agrees.

        13.13    Voluntary Decrease.    The Company from time to time may (but
is not required to) decrease the Conversion Price, as permitted by law, by any
amount at any time for at least twenty (20) Business Days, so long as the
decrease is irrevocable during such period. In addition, the Company may also
(but is not required to) decrease the Conversion Price to avoid or diminish any
income Tax to holders of Common Stock or rights to purchase Common Stock in
connection with any dividend or distribution of shares (or rights to acquire
shares) or similar event. Whenever the Conversion Price is decreased, the
Company shall mail to the Purchasers a notice of the decrease. The Company shall
mail the notice at least fifteen (15) days before the date the decreased
Conversion Price takes effect. The notice shall state the decreased Conversion
Price and the period it will be in effect. A voluntary decrease of the
Conversion Price does not change or adjust the Conversion Price otherwise in
effect for purposes of Sections 13.4 through 13.9.

        13.14    Notice of Certain Transactions.    If:

        (a)   the Company takes any action that would require an adjustment in
the Conversion Price pursuant to Section 13.4 through 13.9 (unless no adjustment
is to occur, pursuant to Section 13.11); or

        (b)   there is a liquidation or dissolution of the Company,

then the Company shall mail to the Purchasers a notice stating the proposed
record date for a dividend, distribution or subdivision or the proposed
effective date of a combination, reclassification, consolidation, merger,
binding share exchange, transfer, liquidation or dissolution. The Company shall
file and mail the notice at least fifteen (15) Trading Days before such date.
Failure to file or mail the notice or any defect in it shall not affect the
validity of the transaction.

        13.15    Effect of Reclassification, Consolidation, Merger or Sale.    

        (a)   In the event of:

        (i)    any reclassification of the outstanding shares of Common Stock
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a split, subdivision or combination
covered by Section 13.5);

        (ii)   a consolidation, merger, combination or binding share exchange
involving the Company; or

        (iii)  any sale or conveyance of all or substantially all of the
property and assets of the Company to any other Person,

in each case as a result of which holders of Common Stock shall be entitled to
receive cash, securities or other property or assets with respect to or in
exchange for such Common Stock (any such event, "Merger Event"), then the
Company or the successor or purchasing Person, as the case may be, provide that
the Purchasers shall be entitled at and after the effective time of the Merger
Event to convert their Notes into the type and amount of shares of stock, other
securities or other property or assets (including cash or any combination
thereof) that the Purchasers would have been entitled to

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receive upon such Merger Event had they converted their Notes immediately prior
to such Merger Event ("Reference Property").

        (b)   With respect to Notes surrendered for conversion after the
effective date of any such Merger Event in lieu of cash, shares of Common Stock
or a combination of cash and shares of Common Stock otherwise provided for
hereunder, the Company shall deliver to the converting Purchaser a number of
units of Reference Property (each such unit comprised of the kind and amount of
shares of stock, securities or other property or assets (including cash or any
combination thereof) that a holder of one share of Common Stock immediately
prior to such Merger Event would have owned or been entitled to receive based on
the Weighted Average Consideration) equal to (A) the aggregate principal amount
of Notes to be converted, divided by (B) the Conversion Price immediately prior
to the Merger Event.

        (i)    The Company will deliver cash in lieu of fractional units of
Reference Property (provided that the amount of such cash shall be determined as
if references in such Section to "the Closing Sale Price" were instead a
reference to "the Closing Sale Price of a unit of Reference Property" composed
of the type and amount of shares of stock, securities or other property or
assets (including cash or any combination thereof) that a holder of one share of
Common Stock immediately prior to such Merger Event would have owned or been
entitled to receive based on the Weighted Average Consideration).

        (ii)   For purposes of this Section 13.15, the "Weighted Average
Consideration" means the weighted average of the types and amounts of
consideration received by the holders of Common Stock entitled to receive cash,
securities or other property or assets with respect to or in exchange for such
Common Stock in any Merger Event who affirmatively make such an election;
provided that, if the types and amounts of consideration that holders of Common
Stock would be entitled to receive with respect to or in exchange for such
Common Stock is based in part upon any form of shareholders election, the
"Weighted Average Consideration" will be deemed to be (A) if holders of the
majority of the shares of Common Stock affirmatively make such an election, the
weighted average of the types and amounts of consideration received by the
holders of Common Stock that affirmatively make such an election or (B) if the
holders of a majority of the shares of Common Stock do not affirmatively make
such an election, the types and amount of consideration actually received by
such holders.

        (iii)  The Company shall notify the Purchasers of the Weighted Average
Consideration as soon as practicable after the Weighted Average Consideration is
determined.

        (c)   The above provisions of this Section 13.15 shall similarly apply
to successive Merger Events.

        13.16    Simultaneous Adjustments.    In the event that this
Article XIII requires adjustments to the Conversion Price under more than one of
Sections 13.5, 13.6, 13.7 and 13.8, and the record dates for the distributions
giving rise to such adjustments shall occur on the same date, then such
adjustments shall be made by applying, first, the provisions of Section 13.5,
second, the provisions of Section 13.7, third, the provisions of Section 13.8
and, fourth, the provisions of Section 13.6.

        13.17    Successive Adjustments.    After an adjustment to the
Conversion Price under this Article XIII, any subsequent event requiring an
adjustment under this Article XIII shall cause an adjustment to the Conversion
Price as so adjusted.

        13.18    Limitation on Adjustments.    The Company shall not take any
action that would result in an adjustment pursuant to the foregoing provisions
in this Article XIII if that adjustment would reduce the Conversion Price below
the then par value of the shares of Common Stock issuable upon conversion of the
Notes.

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ARTICLE XIV

INFORMATION COVENANTS

        Each of the Obligors covenants that, from and after the Closing Date, so
long as any of the Notes are outstanding:

        14.1    Financial Statements.    The Company shall deliver to each
Purchaser:

        (a)   as soon as available and in any event within ninety (90) days
after the end of its fiscal year, audited consolidated statements of income,
owners' equity and cash flows of the Company and its Subsidiaries for such
fiscal year and the related consolidated audited balance sheet as at the end of
such fiscal year, setting out in each case in comparative form the corresponding
figures for the preceding fiscal year, and an opinion of an independent public
or chartered accountant of recognized international standing as is reasonably
acceptable to the Purchasers, which opinion shall (i) state that said financial
statements fairly present in all material respects the financial condition and
results of operations of the Company and its Subsidiaries as at the end of, and
for, such fiscal year in accordance with GAAP and (ii) following the end of the
fiscal year in which the Project Financing Facility Closing Date occurs contain
no "going concern" or like qualification; and

        (b)   as soon as available and in any event within sixty (60) days after
the end of each of the first three fiscal quarters of each fiscal year of the
Company, unaudited consolidated statements of income and cash flows of the
Company and its Subsidiaries, for such fiscal quarter and for the period from
the beginning of the respective fiscal year to the end of such period, and the
related unaudited balance sheet, as at the end of such fiscal quarter, setting
out in each case in comparative form the corresponding figures for the preceding
fiscal quarter or period, as applicable, accompanied by a certificate of a
senior financial officer of the Company, which certificate shall state that said
financial statements fairly present in all material respects the financial
condition and results of operations of the Company and its Subsidiaries, in
accordance with GAAP as at the end of, and for, such period (subject only to
normal year-end audit adjustments).

Delivery within the time period specified above of copies of the Company's
Form 10-K or Quarterly Report on Form 10-Q ("Form 10-Q"), as the case may be,
prepared in compliance with the requirements therefor and filed with the SEC
shall be deemed to satisfy the requirements of this Section 14.1.

        14.2    Requirements as to Financial Statements.    

        (a)   Each set of financial statements delivered by the Company pursuant
to Section 14.1 shall be accompanied by a Compliance Certificate certifying that
no Default or Event of Default has occurred and is continuing or, if a Default
or Event of Default has occurred and is continuing, describing the same, as well
as any actions the Company intends to take in respect thereof.

        (b)   Each set of financial statements delivered pursuant to
Section 14.1 will be prepared using GAAP, accounting practices and financial
reference periods consistent with those applied in the preparation of the
Original Financial Statements unless, in relation to any set of financial
statements, the Company notifies the holders that there has been a change in
GAAP, the accounting practices or reference periods and it delivers to the
holders:

        (i)    a description of any change necessary for those financial
statements to reflect the GAAP, accounting practices and reference periods upon
which the Original Financial Statements were prepared; and

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        (ii)   sufficient information, in form and substance as may be
reasonably required by the holders, to enable the holders to determine whether
the covenants contained herein have been complied with and make an accurate
comparison between the financial position indicated in those financial
statements and the Original Financial Statements.

        14.3    Information; Miscellaneous.    The Company shall deliver to each
Purchaser:

        (a)   copies of all documents delivered by the Company to its
(i) shareholders (or any class of them) or (ii) its creditors generally, in each
case, within ten (10) days of such documents being delivered;

        (b)   copies of all documents delivered by the Company to the agent or
lenders under the Project Financing Facility within ten (10) days of such
documents being delivered, in each case excluding documents in respect of
administrative matters but including any operating, engineering, financial,
insurance, accounting or other reports;

        (c)   promptly upon becoming aware thereof, the details of any
litigation, arbitration or administrative proceedings which are current,
threatened or pending against the Company or any of its Subsidiaries, and which
might, if adversely determined, have a Material Adverse Effect;

        (d)   annually, within twenty (20) Business Days of the annual renewal
date of the insurance policies maintained in connection with the Holbrook
Project, a memorandum prepared by the Company summarizing the then-outstanding
insurance coverage with respect to the Holbrook Project together with a
certificate or certificates of insurance prepared by a Responsible Officer
and/or the relevant insurance carriers, as the case may be, and in form and
substance satisfactory to the holders confirming that:

        (i)    all such insurance coverage is in full force and effect and all
premiums payable in connection therewith have been paid;

        (ii)   in the opinion of the Responsible Officer, such insurance is
sufficient for the purposes of the Holbrook Project and complies with the
provisions of Section 15.11;

        (iii)  following the Springing Lien Trigger Date, the Collateral Agent
is named as an additional insured under all policies of insurance and loss payee
under all policies of insurance except third-party liability insurance; and

        (iv)  the insurers under such insurance policies have agreed in writing
not to amend or terminate such policies without at least twenty (20) Business
Days prior written notice thereof to the Collateral Agent and have entered into
such agreements as are required pursuant to Section 15.11.

        (e)   as promptly as practicable after the occurrence of the relevant
event, details as to any:

        (i)    material disputes with such of its insurance carriers as are
providing insurance coverage with respect to the Holbrook Project;

        (ii)   failure to pay any insurance premium as and when required that
might result in the cancellation of any insurance policy implemented in
connection with, or relating to, the Holbrook Project;

        (iii)  material reduction in the amount of, or any other material change
in, insurance coverage maintained in connection with the Holbrook Project;

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        (iv)  occurrence of any actual or reasonably expected liability or loss
in an aggregate amount in excess of $500,000 which is covered by the terms of
any policy of insurance maintained in connection with the Holbrook Project; and

        (v)   notices received from any insurance carriers with respect to the
cancellation of or proposed cancellation of any policy of insurance maintained
in connection with the Holbrook Project (and, in the case of the notification of
any such details, stating the reasons therefor, together with any other
information concerning the insurance coverage required to be maintained pursuant
to this Agreement as the Collateral Agent shall have reasonably requested);

        (f)    promptly upon the effectiveness or occurrence thereof, as the
case may be, copies of any instrument, correspondence or other item of
documentation implementing, amending, supplementing or otherwise modifying the
material provisions of the definitive documentation for the Project Finance
Facility or other material Indebtedness;

        (g)   without limiting any other provision of this Section 14.3, as soon
as possible (and in any event within three (3) Business Days) after any Obligor
knows or has reason to know of any event or circumstance which has a reasonable
likelihood of having a Material Adverse Effect with respect to such Obligor,
notice of such event or circumstance and describing the same in reasonable
detail;

        (h)   promptly following execution thereof, copies of all Project
Documents;

        (i)    (i) not later than March 1st in each fiscal year, an annual
operating and cash flow budget for the Holbrook Project for the next succeeding
fiscal year (showing expense and revenue, cash flows and capital expenditures on
a monthly basis), in form and substance satisfactory to the holders and (ii) not
later than the 20th day of each month, a variance report against the
corresponding (1) month and (2) the elapsed portion of the fiscal year, in each
case, as set forth in the applicable annual report delivered pursuant to
clause (i) hereof;

        (j)    promptly following any Obligor becoming aware of the occurrence
thereof, notice of any event or circumstance which entitles, or might reasonably
be expected to entitle, any Person to cancel, suspend or terminate any Approval
of the nature referred to in Section 15.3;

        (k)   promptly following the occurrence thereof and without limiting the
provisions of Section 15.8, notice of any event or circumstance which
constitutes, or might reasonably be expected to constitute, a material
environmental spill or accident at the Holbrook Project;

        (l)    promptly upon the implementation thereof, copies of all
documentation relating to each Hedging Agreement entered into by any Obligor;
and

        (m)  promptly as becomes available, such further information regarding
the financial condition, business, assets and operations of any Obligor as any
holder may reasonably request.

        14.4    Notification of Default.    The Company shall notify the holders
of any Default or Event of Default (and the steps, if any, being taken to remedy
it) promptly upon becoming aware of the occurrence thereof.

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ARTICLE XV

GENERAL COVENANTS

        Each of the Obligors covenants that, from and after the Closing Date, so
long as any of the Notes are outstanding:

        15.1    Use of Proceeds.    The Company shall apply the proceeds of the
sale of the Notes for (a) the purpose of financing the Holbrook Project
(including, but not limited to, the costs associated with the Definitive
Feasibility Study and the initial drilling, engineering and permitting related
thereto), (b) repayment of amounts due under the Karlsson Note and (c) general
corporate purposes.

        15.2    Compliance with Laws.    Each Obligor will, and will cause each
of its Subsidiaries to, comply in all material respects with all laws to which
it may be subject (including Environmental Laws).

        15.3    Approvals.    Each Obligor will, and will cause each of its
Subsidiaries to, obtain, maintain in full force and effect, and comply in all
material respects with, all Approvals as may be required or advisable from time
to time for each Obligor to (i) execute, deliver, perform and preserve its
rights under any of the Note Documents or any Project Document executed or to be
executed by it, (ii) following the Springing Lien Trigger Date, grant and
perfect the Liens granted or purported to be granted and perfected by it
pursuant to any Collateral Document to which it is a party, (iii) maintain and
operate its business in accordance with standard industry practice, and
(iv) own, lease, use or license the Project Assets in which it holds any
interest and operate the Holbrook Project and the Mine in accordance with sound
mining and business practice.

        15.4    Maintenance of Corporate Existence, etc.    Each Obligor will,
and will cause each of its Subsidiaries to, (i) do and cause to be done at all
times all things necessary to maintain and preserve its corporate existence and
(ii) do and cause to be done at all times all things necessary to be duly
qualified to do business and be in good standing (where such concept is
relevant) as a foreign corporation, in each jurisdiction where the nature of its
business makes such qualification necessary.

        15.5    Payment of Notes.    The Company shall pay the principal and
interest on the Notes in accordance with the terms of the Notes. The Company
shall pay interest on overdue principal (including post-petition interest in a
proceeding under any Bankruptcy Law), and overdue interest, to the extent
lawful, at the rate specified in the Notes.

        15.6    Payment of Taxes, etc.    Each Obligor shall, and shall cause
each of its Subsidiaries to, file all Tax returns (including all property Tax
returns and other similar Tax returns applicable to the Holbrook Project)
required by applicable law to have been filed by it. Each Obligor shall, and
shall cause each of its Subsidiaries to, pay and discharge, as the same may
become due and payable, all Taxes, assessments, fees and other governmental
charges or levies against it or on any of its property as well as claims of any
kind or character; provided, however, that the foregoing shall not require any
Person to pay or discharge any such Tax, assessment, fee, charge, levy or claim
so long as it shall be diligently contesting the validity or amount thereof in
good faith by appropriate proceedings and shall have set aside on its books
adequate reserves in accordance with GAAP with respect thereto.

        15.7    Books and Records.    

        (a)   Each Obligor will, and will cause each of its Subsidiaries to,
keep financial records and accounting and management information systems
reflecting all of its business affairs and transactions in accordance with
applicable laws and produce financial statements in accordance with GAAP.

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        (b)   On not less than three (3) days prior written notice where no
Default or Event of Default has occurred or is continuing and on not less than
twenty-four (24) hours prior notice where a Default or Event of Default has
occurred and is continuing, each Obligor will, and will cause each of its
Subsidiaries to, permit any advisers of the Purchasers, the holders or any of
their respective representatives during reasonable business hours to inspect any
and all of its properties and operations (including the Mine), to visit all of
its offices or any other location where relevant personnel or records are
located, to discuss its financial matters with its officers, its banks and its
independent chartered accountants and certified public accountants, as the case
may be (and hereby authorizes such independent chartered accountants or
certified public accountants, as the case may be, to discuss its financial
matters with any of the foregoing Persons or its representatives whether or not
any representative of the relevant Obligor is present), and to examine (and
photocopy extracts from) any of its books or other corporate records or any
instrument, document or correspondence relating to any of the Project Documents.
Without limiting the generality of the foregoing, each Obligor shall, and shall
cause each of its Subsidiaries to, provide all relevant and necessary assistance
to:

        (i)    any advisors to the Purchasers in connection with the performance
of their respective duties to the Purchasers (including the review of all
matters relating to the development and operation of the Holbrook Project
(including environmental issues) and the preparation of any reports in
connection therewith); and

        (ii)   the holders in connection with the exercise of their rights
hereunder and under each other Note Document.

        (c)   The Company shall pay any fees of such chartered accountants or
certified public accountants incurred in connection with this Section 15.7.

        (d)   It is expressly understood that none of the advisors to the
Purchasers nor any holder assumes any obligation to any Obligor or any other
party in respect of the operation, development, exploration and production of
the Holbrook Project.

        15.8    Environmental Covenants.    Each Obligor will, and will cause
each of its Subsidiaries to and will use commercially reasonable efforts to
cause each other Project Party to:

        (a)   use and operate the Mine, the Project Assets and all of the
facilities and properties related thereto in material compliance with all
applicable Environmental Laws and applicable permits and Approvals;

        (b)   keep all material Approvals and Permits relating to environmental
matters related to the Holbrook Project in effect;

        (c)   remain in material compliance with, and handle all Hazardous
Substances in material compliance with, all applicable Environmental Laws;

        (d)   (i) promptly notify the holders and provide copies upon receipt of
all material written claims, complaints, notices or inquiries relating to the
condition of the facilities and properties related to the Holbrook Project and
the Project Assets or compliance with the Environmental Laws relating to the
Holbrook Project, and (ii) promptly cure any non-compliance which is the subject
matter of any actions and proceedings relating to such Environmental Laws in
accordance with the requirements of any applicable Governmental Authority; and

        (e)   provide such information and certifications which the holders may
reasonably request from time to time to evidence compliance with this Section
(including in connection with any environmental audit to determine compliance
therewith).

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        15.9    Maintenance of Project Assets.    Each Obligor will, and will
cause each of its Subsidiaries to, maintain, preserve, protect and keep:

        (a)   all of its ownership, lease, use, license and other interests in
the Project Assets (including all Mining Rights) as are necessary for it to be
able to operate the Mine substantially in accordance with sound mining and
business practice; and

        (b)   all of the Project Assets owned by it in good repair, working
order, and condition, and make necessary and proper repairs, renewals, and
replacements so that the business carried on in connection therewith may be
properly conducted at all times, unless the continued maintenance of any of such
Project Assets is no longer necessary or economically desirable for the
operation of the Mine, such operation to be substantially in accordance with
sound mining and business practice.

        15.10    Accuracy of Information.    Each Obligor will ensure that all
factual information hereafter furnished by or on behalf of such Obligor or any
of its Subsidiaries in writing to any holder for the purposes of or in
connection with this Agreement or any Transactions will be true and accurate in
all material respects on the date as of which such information is dated or
certified and such information shall not be incomplete by omitting to state any
material fact known to the relevant Obligor or Subsidiary necessary to make such
information not misleading in any material respect.

        15.11    Insurance.    

        (a)   The Company shall, and shall cause its Subsidiaries to, at all
times maintain or cause to be maintained in effect, with responsible and
reputable insurance companies in such amounts and covering such risks as is
consistent with prudent practice and which are acceptable to the holders in
their reasonable discretion.

        (b)   The Company will provide the holders with not less than ten
(10) Business Days' prior written notice of any proposed change of any insurance
company providing insurance coverage of the nature referred to in clause (a)
above, and any such change shall be consistent with the provisions of this
Agreement.

        (c)   Each Obligor shall ensure that all premiums required to be paid in
order to ensure that the policies referred to in this Section 15.11 are in full
force and effect shall be paid as and when the same shall become due and payable
and shall otherwise comply with each other term and condition of such policies
so as to ensure that such policies are, and shall continue, in full force and
effect; provided, that if any Obligor does not so ensure that all such premiums
are paid, the holders may (but shall have no obligation to) pay such premiums
and the applicable Obligor shall indemnify the holders pursuant to Section 11.2;
provided further that any such payment by the holders shall not cure the
applicable Obligor's failure to observe the obligations set forth in this
Section 15.11.

        (d)   Following the Springing Lien Trigger Date, subject to the
Intercreditor Agreement, all of the insurance policies relating to the Holbrook
Project will, in each case, in accordance with best practice in the mining
industry and to prevailing market practice in connection with comparable
facilities for projects similar to the Holbrook Project:

        (i)    specify the Collateral Agent (on behalf of the holders) as an
additional insured under all policies of liability insurance (excluding motor or
automobile insurance and policies of insurance relating to workers' compensation
and/or employers' liability) and the Collateral Agent (on behalf of the holders)
as loss payee under all policies of insurance except third-party liability
insurance and contain such endorsements in favor of the Collateral Agent as the
Collateral Agent shall reasonably require (including that the policy shall not
be invalidated as

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against the holders by reason of any action or failure to act of the Company or
any other Person);

        (ii)   not be cancellable (or non-renewable or subject to a decrease in
the scope or amount of coverage (including by way of increase in any
deductible)) as against the holders (including for failure to pay premiums) or
subject to material alteration of any kind without (A) in the case of any such
action, thirty (30) days' written notice of such action having been given by the
Company or the issuer of the relevant policy to the holders, and (B) in the case
of any such material alteration, the prior written consent of the holders;

        (iii)  provide for waiver of any right of set-off, recoupment,
subrogation, counterclaim or any other deduction, by attachment or otherwise,
with respect to any liability of the beneficiary of such policy (including the
incorporation of a "non-vitiation" provision) and provide that all amounts
payable by reason of loss or damage to any of the Project Assets shall be
payable in a manner which is consistent with this Agreement;

        (iv)  provide for payments of claims thereunder in Dollars; and

        (v)   otherwise (including with respect to the identity of the brokers,
insurers, re-insurers and/or indemnities involved in connection with the
solicitation, placement and issue of such insurance policies) be in form and
substance reasonably satisfactory to the holders.

        In connection with the foregoing, following the Springing Lien Trigger
Date, and subject to the Intercreditor Agreement, the Company shall (x) execute
and deliver notices to the brokers, underwriters and insurance companies through
or with whom any policy of insurance maintained in connection with the Holbrook
Project have been effected in such form as the holders may from time to time
reasonably request, and (y) procure that any insurer effecting any policy of
insurance maintained in connection with the Holbrook Project execute and deliver
such notices to the issuer of any such policy as the holders may from time to
time reasonably request.

        (e)   The Company shall not at any time do or omit to do anything
whereby any insurance required pursuant to this Section 15.11 would, or would be
likely to, be rendered void or voidable or suspended, impaired or defeated in
whole or in part.

        (f)    The Company will make (or will cause to be made) full disclosure
of all relevant issues and facts to the issuer of each insurance policy
maintained in connection with the Holbrook Project such that no such issuer will
be entitled to vitiate, cancel or otherwise refuse or decline to honor the terms
of, or pay claims in respect of, any such insurance policy.

        (g)   In the event that the Company makes any claim under any insurance
policy, it shall be solely responsible for and shall pay any deductible in
connection with such claim.

        (h)   For the avoidance of doubt, no holder shall be under any
obligation to the underwriters, insurance companies, or brokers by or through
whom any policy of insurance referred to in this Section 15.11 shall be
effected.

        15.12    Business Activities; No Amendment of Organizational
Documents.    

        (a)   AWP will not, and Company will not permit AWP to:

        (i)    engage in any business activity other than the development and
operation of the Holbrook Project and the Mine and any activity incidental
thereto;

        (ii)   following the Springing Lien Trigger Date, maintain any place of
business other than the location of the Mine or Denver, Colorado without first
taking (to the satisfaction of the holders) all actions necessary to protect the
Liens granted or purported to be granted pursuant to the relevant Collateral
Agreements.

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        (b)   No Obligor will, or will permit any of its Subsidiaries to:

        (i)    amend its Organizational Documents (including to reduce its share
capital) in any material respect or change its corporate name; or

        (ii)   change its fiscal year,

in each case without the consent of the Majority Purchasers.

        (c)   The Company will not and will not permit PGRI Delaware to engage
in any business activity other than as a holding company for the ownership,
directly or indirectly, of all or a portion of the issued and outstanding share
capital of AWP and other subsidiaries engaged in exploration, development,
mining and related activities in connection with the mining of Potash, other
metals and commodities and activities incidental thereto.

        15.13    Indebtedness.    Each Obligor will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist or otherwise
become or be liable in respect of any Indebtedness other than:

        (a)   Indebtedness in respect of the Notes and other Obligations;

        (b)   Indebtedness in respect of any Hedging Obligations incurred and
reasonably calculated to mitigate any risk to which the Company or its
Subsidiaries are exposed in connection with their development or operations, and
not incurred for speculative purposes;

        (c)   Indebtedness in respect of amounts payable to contractors,
sub-contractors, carriers, warehousemen, mechanics, materialmen, repairers,
suppliers and landlords, incurred in the ordinary course of business and not for
money borrowed;

        (d)   Indebtedness incurred in the ordinary course of business in
connection with the purchases of goods and services or the exploration,
development, operation and reclamation of mineral properties (and excluding, for
the avoidance of doubt, Indebtedness);

        (e)   Indebtedness incurred in respect of surety, bid, performance or
appeal bonds or similar obligations and trade-related letters of credit, in each
case provided in the ordinary course of business;

        (f)    Indebtedness in respect of tenders, statutory obligations,
utilities, leases and contracts (other than for Indebtedness) entered into in
the ordinary course of business,

        (g)   Indebtedness in respect of Taxes, assessments, fees and other
governmental charges or levies (including with respect to workers' compensation,
unemployment insurance, social security benefits or other forms of governmental
insurance or benefits) to the extent that payment thereof shall not at the time
be required to be made in accordance with the provisions of Section 15.6;

        (h)   Indebtedness in respect of judgments or awards, the enforcement of
which has not been stayed (by reason of a pending appeal or otherwise), for a
period of more than ten (10) days or the payment of which is covered in full
(subject to a customary deductible) by insurance maintained with responsible
insurance companies;

        (i)    Approved Subordinated Indebtedness;

        (j)    Indebtedness of AWP and PGRI Delaware not in excess of
$125,000,000 in aggregate principal amount at any one time outstanding and
incurred pursuant to the Karlsson Note;

        (k)   on or after the Project Financing Facility Closing Date,
Indebtedness of the Obligors not in excess of $900,000,000 in aggregate
principal amount at any one time outstanding incurred pursuant to a Project
Financing Facility;

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        (l)    Capitalized Lease Liabilities not in excess of $300,000,000 in
aggregate principal amount at any one time outstanding;

        (m)  Indebtedness pursuant to a Cost Overrun Facility not in excess of
$250,000,000 in aggregate principal amount at any one time outstanding;

        (n)   Permitted Junior Debt; and

        (o)   in the case of the Company, Indebtedness in an amount not in
excess of $50,000,000 in aggregate principal amount at any one time outstanding
and not permitted by the preceding paragraphs of this Section 15.13.

        15.14    Liens.    Each Obligor will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Liens upon any of
its properties, revenues or assets, whether now owned or hereafter acquired,
except:

        (a)   Liens in favor of the Collateral Agent pursuant to the Collateral
Documents or otherwise for the benefit of the holders of the Obligations;

        (b)   Liens for Taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books;

        (c)   Liens in favor of carriers, warehousemen, mechanics, materialmen,
suppliers and landlords incurred in the ordinary course of business for sums not
overdue or being contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its
books;

        (d)   Liens incurred in the ordinary course of business in connection
with unemployment insurance or other forms of governmental insurance or
benefits, or to secure performance of tenders, statutory obligations, leases and
contracts (other than for Indebtedness) entered into in the ordinary course of
business or to secure obligations on surety or appeal bonds;

        (e)   Liens in respect of judgments in existence less than ten
(10) Business Days after the entry thereof or with respect to which execution
has been stayed or the payment of which is covered in full (subject to a
customary deductible) by insurance maintained with responsible insurance
companies;

        (f)    Liens on the assets and membership units of AWP and the assets of
PGRI Delaware to secure the obligations in respect of the Karlsson Note;

        (g)   Liens in connection with the Grandhaven Agreement or the
Grandhaven Agreement Amendment;

        (h)   Liens on Collateral to secure the obligations in respect of the
Project Financing Facility; provided that the holder of such Lien shall have
entered into an Intercreditor Agreement;

        (i)    Liens in respect of the Cost Overrun Facility; provided that the
holder of such Lien shall have entered into a Second Lien Intercreditor
Agreement;

        (j)    Liens securing Capitalized Lease Liabilities, provided that such
Liens extend only to the assets acquired with or financed by such Indebtedness;
and

        (k)   Liens granted by AWP in the ordinary course of business in respect
of Project Assets with an individual fair market value at any one time which is
not in excess of $5,000,000 and an aggregate fair market value at any one time
which is not in excess of $10,000,000.

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        15.15    Investments.    Each Obligor will not, and will not permit any
of its Subsidiaries to, acquire all or substantially all of the assets of any
other Person and will not make, incur, assume or suffer to exist any Investment
in any other Person, except (a) Cash Equivalent Investments, (b) Investments
outstanding on the date of this Agreement and set forth on Schedule 15.15 and
(c) in the case of the Company and PGRI Delaware, investments in their
Subsidiaries.

        15.16    Restricted Payments, etc.    Each Obligor will not and will not
permit any of its Subsidiaries to:

        (a)   declare, pay or make any distribution (in cash, property or
obligations) on any shares of any class of capital stock (now or hereafter
outstanding) of such Obligor or on any ownership interest of such Obligor or on
any Options or other rights with respect to any shares of any class of capital
stock of, or other ownership interest (now or hereafter outstanding) in, such
Obligor or apply any of its funds, property or assets to the purchase,
redemption or other retirement of any shares of any class of capital stock of,
or other ownership interest (now or hereafter outstanding) in, such Obligor, or
Options or other rights with respect to any shares of any class of capital stock
of, or other ownership interest (now or hereafter outstanding) in, such Obligor;

        (b)   repay, redeem, purchase or otherwise defease or discharge any
indebtedness that is subordinated in right of payment or lien priority to the
Obligations prior to its stated maturity; or

        (c)   make any deposit for any of the foregoing purposes.

        (the payments and distributions described in paragraph (a) to (c) above
collectively referred to as "Restricted Payments");

        provided, however, that (i) any Subsidiary of the Company may declare,
pay or make distributions ratably with respect to their Capital Stock; (ii) any
Obligor may make Restricted Payments to any former employee or director of the
Company or its Subsidiaries in connection with any employment arrangements; and
(iii) the Company and any Subsidiary may make Restricted Payments to any
Obligor.

        15.17    Mergers, etc.    Each Obligor will not, and will not permit any
of its Subsidiaries to, enter into any merger or consolidation or sell or
otherwise transfer all or substantially all of its assets, except as may be
consented to by the Majority Purchasers.

        15.18    Asset Dispositions, etc.    Each Obligor will not, and will not
permit any of its Subsidiaries to, sell, transfer, lease or otherwise dispose
of, or grant options, warrants or other rights with respect to, any of its
assets (including accounts receivable) to any Person, unless:

        (a)   in the case of AWP, such disposal is made in the ordinary course
of business pursuant to arrangements which are otherwise in compliance with this
Agreement;

        (b)   in the case of any other Obligor or Subsidiary which is producing
output from mining activities, such disposal is of such output made in the
ordinary course of business;

        (c)   such disposal is of obsolete or redundant assets which are no
longer used or required by the relevant Obligor or Subsidiary or of assets which
are to be replaced; or

        (d)   the net book value of all assets disposed of by all Obligors and
their Subsidiaries (excluding, however, assets disposed of pursuant to
clauses (a), (b) or (c) above) in the same fiscal year of the Company does not
exceed $10,000,000 (or the equivalent thereof in any other currency) in the
aggregate and fair value in cash or other assets is received therefor.

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        15.19    Transactions with Affiliates.    Each Obligor will not, and
will not permit any of its Subsidiaries to, enter into, or cause, suffer or
permit to exist:

        (a)   any arrangement or contract pursuant to which any indebtedness is
extended by such Obligor or Subsidiary to any of its Affiliates as obligor; or

        (b)   any other arrangement or contract with any of its Affiliates
(including management or similar contracts or arrangements relating to the
allocation of revenues, Taxes and expenses or otherwise) unless such arrangement
is on market standard arm's-length terms;

provided, however, that nothing in this Section 15.19 shall prevent, or be
deemed to prevent (i) the execution and performance of any Note Document; or
(ii) any transaction by and among the Obligors.

        15.20    Restrictive Agreements, etc.    Each Obligor will not, and will
not permit any of its Subsidiaries to, enter into any agreement prohibiting
(i) the creation or assumption of any Lien upon its properties, revenues or
assets to secure the Obligations, whether now owned or hereafter acquired, or
the ability of such Obligor to amend or otherwise modify this Agreement or any
other Note Document or Project or (ii) the dividend, distribution or loan of
funds by any Subsidiary to the Company.

        15.21    Inconsistent Agreements.    Each Obligor will not, and will not
permit any of its Subsidiaries to, enter into any agreement containing any
provision which would be violated or breached by the issuing of the Notes
hereunder or by the performance by any Obligor of its obligations hereunder or
under any Note Document.

        15.22    Bank Accounts.    After the Springing Lien Trigger Date, the
Obligors shall not open or maintain any bank account or similar deposit
arrangement that is not subject to a Lien in favor of the holders of the Notes
except with the prior written consent of the Majority Purchasers.

        15.23    Acquisitions.    Each Obligor will not, and will not permit any
of its Subsidiaries to:

        (a)   purchase, subscribe for or otherwise acquire any shares (or other
securities or any interest therein), in, or incorporate or form, any other
company or agree to do any of the foregoing; or

        (b)   purchase or otherwise acquire any assets (other than in the
ordinary course of business) or revenues or (without limitation to any of the
foregoing) acquire any business or interest therein or form or enter into, any
partnership, consortium, joint venture or other like arrangement or agree to do
so.

        15.24    Collateral and Guarantees.    

        (a)   Upon the Springing Lien Trigger Date, and, following the Springing
Lien Trigger Date, upon the acquisition or production of any Project Assets
(including the entering into of any Project Document or Hedging Agreement) or
other Collateral in respect of which no Lien has effectively been granted
pursuant to any Collateral Document, each relevant Obligor shall promptly (and
in any event within twenty (20) days of the Springing Lien Trigger Date and/or
the relevant acquisition or production), each Obligor will:

        (i)    enter into agreements or instruments, in form and substance
reasonably satisfactory to the Collateral Agent, in order to grant to the
Collateral Agent, for the ratable benefit of the holders to secure all
Obligations, valid and binding Liens over all Project Assets and all other
Collateral, which Liens shall be first-priority prior to the Project Financing
Facility Closing Date and second-priority, subordinated to the Liens securing
the Project Financing Facility pursuant to the Intercreditor Agreement, on and
after the Project Financing Facility Closing Date (subject, in each case, to
(1) Liens resulting from mandatory provisions of

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applicable law and (2) Liens specifically and expressly permitted to be incurred
by this Agreement on a senior basis to the Obligations);

        (ii)   simultaneously therewith, effect all relevant filings,
notarizations and registrations or obtain the acknowledgment and agreement of
all relevant counterparties, as the case may be, in order to perfect the Liens
so granted; and

        (iii)  deliver customary opinions in form and substance reasonably
satisfactory to the Purchasers from counsel reasonably satisfactory to the
Purchasers with respect to enforceability, creation, perfection and such other
matters as may be reasonably requested by the Purchasers.

Without limiting the generality of the foregoing, following the Springing Lien
Trigger Date, each Obligor will ensure that promptly upon (and in any event
within twenty (20) days after) the effectiveness of any Project Document or of
any Hedging Agreement, (i) the Collateral Agent, for the ratable benefit of the
holders of the Notes, shall be granted valid and perfected first-priority or
second-priority, as applicable, Liens (except as aforesaid) over the relevant
Obligor's rights thereunder as security for the Obligations, and (ii) the
Collateral Agent shall receive such documentation as it shall reasonably require
as evidence of the rights of the holders to assume the rights and obligations of
the relevant Obligor (and/or any affiliate thereof party to such Project
Document) under each such Project Document upon the occurrence of an Event of
Default.

        (b)   Upon and after the Springing Lien Trigger Date, the Company shall
cause each Subsidiary of the Company not party hereto on the date hereof,
whether now existing or hereafter formed, to execute a joinder hereto assuming
the obligations of a Guarantor hereunder pursuant to Article XXIII and otherwise
in form and substance satisfactory to the Purchasers.

        15.25    Further Assurances.    Following the Springing Lien Trigger
Date, each Obligor shall promptly do all such acts and execute all such
documents as the Collateral Agent or any holders may reasonably request (and in
such form as the Collateral Agent or such holders may reasonably require):

        (a)   to perfect the Liens created or intended to be created under or
evidenced by the Collateral Documents or for the exercise of any rights, powers
and remedies of the Collateral Agent or the holders granted by or pursuant to
the Note Documents or by law; and/or

        (b)   to grant to the Collateral Agent or the holders Liens over any
property or assets of that Obligor located in any jurisdiction equivalent or
similar to the Liens intended to be granted by or pursuant to the Collateral
Documents.

        15.26    Future Covenants.    Upon the occurrence of the Project
Financing Facility Closing Date, the Company and the Purchasers shall negotiate
in good faith the implementation of additional covenants and modification or
deletion of existing covenants for the benefit of the holders, consistent with,
and in any event no more restrictive than, those contained in the Project
Financing Facility in respect of matters as to the development and operation of
the Holbrook Project, including budgets and development plans with respect
thereto, which are not fully known as of the date hereof.

        15.27    Repurchase at the Option of Purchasers Upon Change of
Control.    

        (a)   If a Change of Control occurs, each holder of Notes shall have the
right to require the Company to offer to repurchase all or any part of that
holder's Notes pursuant to a Change of Control Offer on the terms set forth
herein. In the Change of Control Offer, the Company shall offer a change of
control payment in cash equal to 101.00% of the aggregate principal amount of
Notes repurchased plus accrued and unpaid interest, if any (a "Change of Control
Payment"), on

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the Notes repurchased to the Change of Control Payment Date, subject to the
rights of holders of Notes on the relevant record date to receive interest due
on the relevant interest payment date.

        (b)   Within thirty (30) days following the date on which the Company
becomes aware that a Change of Control has occurred, the Company shall mail a
notice to each holder describing the transaction or transactions that constitute
the Change of Control and offering to repurchase Notes on the Change of Control
Payment Date specified in the notice, which date shall be no earlier than ten
(10) days and no later than thirty (30) days from the date such notice is
mailed, pursuant to the procedures described in such notice.

        (c)   The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with this
Section 15.27, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 15.27 by virtue of such compliance.

        (d)   On the Change of Control Payment Date, the Company shall, to the
extent lawful, accept for payment all Notes or portions of Notes properly
tendered pursuant to the Change of Control Offer.

        (e)   The Company shall promptly mail to each holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Company shall
promptly mail (or cause to be transferred by book entry) to each holder a new
Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each new Note shall be in a principal amount
of $2,000 or an integral multiple of $1,000.

        (f)    The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.

        (g)   Notwithstanding anything to the contrary contained herein, a
Change of Control Offer may be made in advance of a Change of Control, and
conditioned upon the occurrence of such Change of Control, if a definitive
agreement is in place for the Change of Control at the time of making the Change
of Control Offer. Notes repurchased by the Company or any of its Affiliates
pursuant to a Change of Control Offer shall have the status of Notes issued but
not outstanding or shall be retired and canceled, at the option of the Company.

ARTICLE XVI

EVENTS OF DEFAULT

        Each of the following is an "Event of Default":

        (d)   default for five (5) Business Days in the payment when due of
interest, if any, on the Notes;

        (e)   default in the payment when due (at maturity, upon redemption or
otherwise) of the principal of, or premium, if any, on, the Notes;

        (f)    failure by any Obligor to comply with the covenants contained in
Sections 15.4, 15.7(b), 15.12, 15.13, 15.14(i), 15.15, 15.16 (in the case of
Liens to which the Company has not consented, after thirty (30) days), 15.17,
15.18, 15.19, 15.20, 15.21, 15.22, 15.23, 15.24, 15.25 or 15.27 of this
Agreement or failure by the Company to convert any Note as required pursuant to
Article XIII hereof;

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        (g)   failure by any Obligor to comply with the covenants contained in
Section 15.4(ii) and such failure shall not be cured within ten (10) days;

        (h)   failure by any Obligor to comply with any of the other agreements
in this Agreement or any other Note Document and such failure shall not be cured
within thirty (30) days;

        (i)    default under any mortgage, agreement, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness by any Obligor (or the payment of which is guaranteed by any
Obligor), whether such Indebtedness or Guarantee now exists, or is created after
the date hereof, if that default:

        (i)    is caused by a failure to pay principal at final maturity on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default"); or

        (ii)   results in, or gives rise to a right of the holders of such
Indebtedness to cause, the acceleration of such Indebtedness prior to its
express maturity,

and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$5.0 million or more;

        (j)    failure by any Obligor to pay final judgments entered by a court
or courts of competent jurisdiction aggregating in excess of $5.0 million to the
extent such judgment is not covered by insurance or is in excess of insurance
coverage, which judgments are not paid, discharged or stayed for a period of
sixty (60) days;

        (k)   any Guarantee of any Obligor of the Obligations is held in any
judicial proceeding to be unenforceable or invalid or ceases for any reason
other than directly as a result of any Purchaser's action or inaction to be in
full force and effect, or any Guarantor, or any Person acting on behalf of any
Guarantor, denies or disaffirms its obligations under its Guarantee hereunder;

        (l)    after the date that is twenty (20) days after the Springing Lien
Trigger Date, any of the Collateral Documents shall cease, for any reason other
than directly as a result of any Purchaser's action or inaction, to be in full
force and effect, or any Lien created by any of the Collateral Documents shall
cease to be enforceable and of the same effect and priority purported to be
created thereby;

        (m)  the Company, any Guarantor or any of their respective Subsidiaries
pursuant to or within the meaning of any Bankruptcy Law:

        (i)    commences a voluntary insolvency proceeding;

        (ii)   consents to the entry of an order for relief against it in an
involuntary insolvency proceeding or consents to its dissolution or winding-up;

        (iii)  consents to the appointment of a Custodian of it or for any
substantial part of its Property;

        (iv)  makes a general assignment for the benefit of its creditors; or

        (v)   takes any comparable action under any foreign laws relating to
insolvency;

provided, however, that the liquidation of any entity into its parent, other
than as part of a credit reorganization, will not constitute an Event of Default
under this clause (i); or

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        (n)   a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:

        (i)    is for relief against the Company or any Subsidiary in an
involuntary insolvency proceeding;

        (ii)   appoints a Custodian of the Company or any Subsidiary or for any
substantial part of its Property; or

        (iii)  orders the winding-up, liquidation or dissolution of the Company
or any Subsidiary;

or grants any similar relief under any foreign laws; and in each such case the
order or decree remains unstayed and in effect for sixty (60) days.

ARTICLE XVII

REMEDIES ON DEFAULT, ETC.

        17.1    Acceleration of Maturity; Rescission.    In the case of an Event
of Default arising from clauses (i) or (j) of Article XVI, all outstanding Notes
will become due and payable immediately without further action or notice. If any
other Event of Default occurs and is continuing, the Majority Purchasers may
declare all the Notes to be due and payable immediately by notice in writing to
the Company.

        17.2    Other Remedies.    If an Event of Default occurs and is
continuing, subject to Section 17.4 and 17.5, any holder of any Notes then
outstanding may pursue any available remedy, under the Note Documents or
otherwise, by proceeding at law or in equity to collect the payment of principal
of, or premium, if any, and interest on the Notes or to enforce the performance
of any provision of the Notes, this Agreement or the other Note Documents and
may take any necessary action to settle, compromise, adjust or otherwise
conclude any proceedings to which it is a party.

        Any recovery of judgment shall, after provisions for the payment of the
reasonable compensation, expenses, disbursements of any holder of Notes then
outstanding and their respective counsel, be for the ratable benefit of the
holders of the Notes in respect of which such judgment has been recovered. A
delay or omission by any holder of Notes in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative, to the
extent permitted by law. Any costs associated with actions taken by any holder
under this Section 17.2 shall be reimbursed to such holder by the Company.

        17.3    Waiver of Past Defaults and Events of Default.    The holders of
a majority in principal amount of Notes at the time outstanding by notice to the
Company may, on behalf of the holders of all the Notes, rescind an acceleration
or waive any existing Default and its consequences under this Agreement, except
a continuing Default in the payment of interest or premium, if any, on, or the
principal of, the Notes. In the case of any such waiver, the Company and any
holders of Notes shall be restored to their former positions and rights under
this Agreement, respectively, provided that no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereto.

        17.4    Control by Majority.    The Majority Purchasers shall have the
right to direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Purchasers, subject to certain
exceptions.

        17.5    Limitation on Suits.    Except to enforce the right to receive
payment of principal, premium, if any, or interest when due, no holder of Notes
may pursue any remedy with respect to this Agreement or the Notes unless the
Majority Purchasers have agreed to pursue the remedy.

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        17.6    Rights of Holders to Receive Payment.    Notwithstanding any
other provision of this Agreement, the right of any holder of a Note to receive
payment of the principal of or premium, if any, or interest, if any, on its Note
or to bring suit for the enforcement of any such payment, on or after the due
date expressed in the Notes shall not be impaired or affected without the
consent of the holder.

        17.7    Collection Suit by the Purchasers.    If an Event of Default in
payment of principal, premium or interest specified in clauses (a) or (b) of
Article XVI occurs and is continuing, any holder of any Notes then outstanding
may recover judgment in its own name and on behalf of each of other holders of
Notes against the Company or any Guarantor (or any other obligor on the Notes)
for the whole amount of unpaid principal and accrued interest remaining unpaid.

        17.8    Priorities.    If any holder of any Notes then outstanding
collects any money pursuant to this Article XVII, it shall pay out the money in
the following order:

        FIRST, to reimburse such holder of Notes then outstanding for any
expenses related to bringing and maintaining a proceeding pursuant to this
Article XVII;

        SECOND, to the holders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest as to each, ratably, without preference
or priority of any kind, according to the amounts due and payable on the Notes;
and

        THIRD, to the Company or, to the extent the holder of Notes then
outstanding collects any amount from any Guarantor, to such Guarantor.

        The holders of at least a majority in aggregate principal amount of the
Notes then outstanding may collectively fix a record date and payment date for
any payment to holders pursuant to this Section 17.8.

ARTICLE XVIII

REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES; TRANSFER OF APOLLO PREFERRED
SHARES

        18.1    Registration of Notes.    The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.

        18.2    Transfer and Exchange of Notes.    Upon surrender of any Note to
the Company at the address and to the attention of the designated officer (all
as specified in Article XXII), for registration of transfer or exchange (and in
the case of a surrender for registration of transfer, duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder of such Note or such holder's attorney duly authorized in writing and
accompanied by the relevant name, address and other information for notices of
each transferee of such Note or part thereof), within ten (10) Business Days
thereafter, the Company shall execute and deliver, at the Company's expense
(except as provided below), one or more new Notes (as requested by the holder
thereof) in exchange therefor, in an aggregate principal amount equal to the
unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in
the form of Exhibit A. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated
the date of the surrendered Note if no

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interest shall have been paid thereon. The Company may require payment of a sum
sufficient to cover any stamp Tax or governmental charge imposed in respect of
any such transfer of Notes. Notes shall not be transferred in denominations of
less than $500,000. Any transferee, by its acceptance of a Note registered in
its name (or the name of its nominee), shall be deemed to have made the
representation set forth in Section 8.5. Notwithstanding anything to the
contrary set forth herein, upon conversion of any portion of the Notes in
accordance with the terms hereof, the Purchasers shall not be required to
physically surrender the Notes to the Company unless (a) the full principal
amount represented by the Notes is being converted or (b) the Purchasers have
provided the Company with prior written notice (which notice may be included in
a Conversion Notice) requesting reissuance of the Notes upon physical surrender
of the Notes. The Purchasers and the Company shall maintain records showing the
principal and interest, if any, converted and the dates of such conversions or
shall use such other method, reasonably satisfactory to the Purchasers and the
Company, so as not to require physical surrender of the Notes upon conversion.

        18.3    Replacement of Notes.    Upon receipt by the Company at the
address and to the attention of the designated officer (all as specified in
Article XXII) of evidence reasonably satisfactory to it of the ownership of and
the loss, theft, destruction or mutilation of any Note, and

        (o)   in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a nominee
for, an original Purchaser or another holder of a Note with a minimum net worth
of at least 200% of the value of the lost, stolen or destroyed Note, such
Person's own unsecured agreement of indemnity shall be deemed to be
satisfactory), or

        (p)   in the case of mutilation, upon surrender and cancellation
thereof, within ten (10) Business Days thereafter, the Company, at its own
expense, shall execute and deliver, in lieu thereof, a new Note, dated and
bearing interest from the date to which interest shall have been paid on such
lost, stolen, destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

        18.4    Transfer of Apollo Preferred Shares.    The Apollo Preferred
Shares may only be transferred (a) to an Affiliate of the Preferred Share
Purchaser, or (b) with the consent of the Company.

ARTICLE XIX

PAYMENTS ON NOTES

        So long as any Purchaser or its nominee shall be the holder of any Note,
and notwithstanding anything in such Note to the contrary, the Company will pay
all sums becoming due on such Note for principal and interest by the method and
at the address specified for such purpose below such Purchaser's name in
Schedule A, or by such other method or at such other address as such Purchaser
shall have from time to time specified to the Company in writing for such
purpose, without the presentation or surrender of such Note or the making of any
notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, such Purchaser shall surrender such Note for cancellation, reasonably
promptly after any such request, to the Company at its principal executive
office or at the place of payment most recently designated by the Company. Prior
to any sale or other disposition of any Note held by a Purchaser or its nominee,
such Purchaser will, at its election, either endorse thereon the amount of
principal paid thereon and the last date to which interest has been paid thereon
or surrender such Note to the Company in exchange for a new Note or Notes
pursuant to Section 18.2. The Company will afford the benefits of this
Article XIX to any direct or indirect transferee of any Note purchased by a
Purchaser under this Agreement and that has made the same agreement relating to
such Note as the Purchasers have made in this Article XIX.

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ARTICLE XX

EXPENSES, ETC.

        20.1    Transaction Expenses.    The Company will pay all reasonable
out-of-pocket costs and expenses (including reasonable attorneys' fees) incurred
by the Purchasers in connection with the negotiation and execution of this
Agreement and the Notes and any amendments, waivers or consents under or in
respect of this Agreement or the Notes (whether or not such amendment, waiver or
consent becomes effective) and in connection with the enforcement of the terms
and conditions hereof and of the Notes, including, without limitation: (a) the
costs and expenses incurred in enforcing or defending (or determining whether or
how to enforce or defend) any rights under this Agreement or the Notes or any
other Note Document, in responding to any subpoena or other legal process or
informal investigative demand issued in connection with this Agreement or the
Notes, or by reason of being a holder of any Note and (b) the costs and
expenses, including financial advisors' fees, incurred in connection with the
insolvency or bankruptcy of the Company or any Subsidiary or in connection with
any work-out or restructuring of the transactions contemplated hereby and by the
Notes. The Company will pay, and will save each Purchaser and each other holder
of a Note harmless from, all claims in respect of any fees, costs or expenses,
if any, of brokers and finders (other than those, if any, retained by a
Purchaser or other holder in connection with its purchase of the Notes).

        20.2    Survival.    The obligations of the Company under this
Article XX will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.

ARTICLE XXI

MODIFICATION AND WAIVER

        21.1    Requisite Consent of Holders.    

        (a)   Except as provided in Section 21.1(b) of this Agreement, this
Agreement, the Notes or any other Note Document may be amended or supplemented
with the consent of the Majority Purchasers (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Notes), and any existing Default or compliance with any provision of
this Agreement or the Notes may be waived with the consent of the Majority
Purchasers (including, without limitation, consents obtained in connection with
a purchase of, or tender offer or exchange offer for, Notes).

        (b)   Without the consent of each holder affected, an amendment,
supplement or waiver may not (with respect to any Notes held by a non-consenting
holder):

        (i)    reduce the principal amount of Notes whose holders must consent
to an amendment, supplement or waiver;

        (ii)   reduce the principal of or change the fixed maturity of any Note;

        (iii)  provide for any right of voluntary redemption of the Notes by the
Company or its affiliates;

        (iv)  reduce the rate of or change the time for payment of interest on
any Note;

        (v)   waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest, if any, on the Notes (except a rescission of
acceleration of the Notes by the holders of at least a majority in aggregate
principal amount of the then outstanding Notes and a waiver of the Payment
Default that resulted from such acceleration in each case in accordance with and
subject to the terms of this Agreement;

        (vi)  make any Note payable in money other than that stated in the
Notes;

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       (vii)  impair the right of any holder to receive payment of principal of,
or interest on such holder's notes on or after the due dates therefor or to
institute suit for the enforcement of any payment on or with respect to such
holder's notes;

      (viii)  release any Guarantor (or permit any entity to fail to become a
Guarantor) from any of its Obligations under its Note Guarantee or this
Agreement, except in accordance with the terms of this Agreement;

        (ix)  release all or substantially all of the Collateral from (or permit
all or substantially all of the Collateral to fail to become subject to) the
Lien of the Collateral Agent securing the Obligations;

         (x)  alter in any manner adverse to the holders, the provisions of
Article XII or Article XIII; or

        (xi)  make any change to Section 21.1(a) or this Section 21.1(b).

        (c)   The consent of the holders of the Notes shall not be necessary to
approve the particular form of any proposed amendment. It shall be sufficient if
such consent approves the substance of the proposed amendment.

        (d)   After an amendment under this Agreement becomes effective, the
Company shall mail to each registered holder of the Notes at such holder's
address appearing in the register a notice briefly describing such amendment.
However, the failure to give such notice to all holders of the Notes, or any
defect therein, shall not impair or affect the validity of the amendment.

        21.2    Revocation and Effects of Consents.    

        (a)   After an amendment, supplement, waiver or other action becomes
effective, a consent to it by a holder of a Note is a continuing consent
conclusive and binding upon such holder and every subsequent holder of the same
Note or portion thereof, and of any Note issued upon the transfer thereof or in
exchange therefor or in place thereof, even if notation of the consent is not
made on any such Note.

        (b)   The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the holders entitled to consent to any amendment,
supplement, or waiver. If a record date is fixed, then, notwithstanding
Section 21.2(a), those Persons who were holders at such record date (or their
duly designated proxies), and only such Persons, shall be entitled to consent to
such amendment, supplement, or waiver or to revoke any consent previously given,
whether or not such Persons continue to be holders after such record date. No
such consent shall be valid or effective for more than ninety (90) days after
such record date unless the consent of the requisite number of holders has been
obtained.

        21.3    Notation on Exchange of Notes.    If an amendment, supplement or
waiver changes the terms of a Note, the Company shall request the holder of the
Note (in accordance with the specific written direction of the Company) to
deliver such Note to the Company. In such case, the Company shall place an
appropriate notation on the Note about the changed terms and return it to the
holder. Alternatively, if the Company so determines, the Company in exchange for
the Note shall issue, the Guarantors shall endorse and the Company shall
authenticate a new Note that reflects the changed terms. Failure to make the
appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.

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ARTICLE XXII

NOTICES

        All notices and communications provided for hereunder, unless otherwise
specified, shall be in writing and shall be deemed delivered (a) on a Business
Day if sent by telecopy during the Business Day or on the next Business Day if
sent after a Business Day has ended or (b) the next Business Day after delivery
to a recognized overnight delivery service (with charges prepaid). Any such
notice must be sent:

          (i)  if to any Purchaser or its nominee, to such Purchaser or nominee
at the address specified for such communications in Schedule A, or at such other
address as such Purchaser or nominee shall have specified to the Company in
writing,

with a copy (which shall not constitute notice) to:

Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: Andrew Nussbaum
                   Ante Vucic
Telecopy: 212-403-2000

         (ii)  if to the Company, to the Company at the address set forth below
or at such other address as the Company shall have specified to the holder of
each Note in writing:

Prospect Global Resources Inc.
1401 17th Street
Suite 1550
Denver, CO 80439
Attention: Chief Executive Officer
Telecopy: 303-990-8440

with a copy (which shall not constitute notice) to:

Brownstein Hyatt Farber Schreck, LLP
410 17th Street
Suite 2200
Denver, CO 80439
Attention: Jeff Knetsch
Telecopy: 303-223-1111

ARTICLE XXIII

GUARANTEE OF NOTES

        23.1    Note Guarantee.    The Guarantors, fully and unconditionally,
jointly and severally, guarantee, on an unsubordinated basis, to each holder
(a) the due and punctual payment of the principal of, premium (if any) and
interest on each Note, when and as the same shall become due and payable,
whether at maturity, by acceleration or otherwise, the due and punctual payment
of interest on the overdue principal of and interest on the Notes, to the extent
lawful, and the due and punctual payment of all other obligations and due and
punctual performance of all Obligations of the Company to the holders all in
accordance with the terms of such Note and this Agreement, and (b) in the case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that the same shall be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, at stated maturity, by
acceleration or otherwise. Each Guarantor agrees that its

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obligations hereunder shall be absolute and unconditional, irrespective of, and
shall be unaffected by, any invalidity, irregularity or unenforceability of any
such Note or this Agreement, any failure to enforce the provisions of any such
Note and this Agreement, any waiver, modification or indulgence granted to the
Company with respect thereto by the holder of such Note, or any other
circumstances which may otherwise constitute a legal or equitable discharge of a
surety or such Guarantor.

        Each Guarantor hereby waives diligence, presentment, demand for payment,
filing of claims with a court in the event of merger or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest or
notice with respect to any such Note or the Indebtedness evidenced thereby and
all demands whatsoever, and covenants that this Note Guarantee shall not be
discharged as to any such Note except by payment in full of the principal
thereof, premium (if any) and interest thereon. Each Guarantor hereby agrees
that, as between such Guarantor, on the one hand, and the holders, on the other
hand, (i) to the extent lawful in an applicable jurisdiction, the maturity of
the Obligations guaranteed hereby may be accelerated as provided in Article XVII
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (ii) in the event of any declaration of acceleration of
such obligations as provided in Article XVII, such obligations (whether or not
due and payable) shall forthwith become due and payable by each Guarantor for
the purpose of this Note Guarantee.

        The Note Guarantee of any Guarantor may be released pursuant to
Section 23.3, in connection with the cessation of corporate existence of such
Guarantor permitted under the terms of this Agreement.

        The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of any holder under the Note Guarantees.

        23.2    Execution and Delivery of Note Guarantee.    To further evidence
the Note Guarantee set forth in Section 23.1, each Guarantor hereby agrees, on
the date such Guarantor becomes a party hereto, that a notation of such Note
Guarantee, reasonably satisfactory in form and substance to the Purchasers shall
be endorsed on each Note authenticated and delivered by the Company on the
Closing Date and such Note Guarantee shall be executed by either manual or
facsimile signature of an Officer of each Guarantor. The validity and
enforceability of any Note Guarantee shall not be affected by the fact that it
is not affixed to any particular Note.

        Each of the Guarantors hereby agrees that its Note Guarantee set forth
in Section 23.1 shall be in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Note Guarantee.

        If an Officer of a Guarantor whose signature is on this Agreement or a
Note Guarantee no longer holds that office at the time the Company authenticates
the Note on which such Note Guarantee is endorsed or at any time thereafter,
such Guarantor's Note Guarantee of such Note shall be valid nevertheless.

        The delivery of any Note by the Company, after the authentication
thereof hereunder, shall constitute due delivery of any Note Guarantee set forth
in this Agreement on behalf of the Guarantor.

        23.3    Release of Guarantors.    The Note Guarantee of a Guarantor
shall be released:

        (q)   in connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by way of merger or
consolidation) to a Person that is not (either before or after giving effect to
such transaction) the Company or a Subsidiary of the Company, if the sale or
other disposition is permitted by the terms of this Agreement; or

        (r)   in connection with any sale or other disposition of Capital Stock
of that Guarantor to a Person that is not (either before or after giving effect
to such transaction) the Company or a

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Subsidiary of the Company, if the sale or other disposition is permitted by the
terms of this Agreement;

and in either such case, the Company has delivered to the holders of Notes then
outstanding an Officer's Certificate stating that all conditions precedent
herein provided for relating to such transactions have been complied with and
that such release is authorized and permitted hereunder.

        Each holder of Notes then outstanding shall execute any documents
reasonably requested by either the Company or a Guarantor in order to evidence
the release of such Guarantor from its obligations under its Note Guarantee
endorsed on the Notes and under this Article XXIII.

        23.4    Waiver of Subrogation.    Until all the obligations under the
Notes and the Note Guarantees are satisfied in full, each Guarantor hereby
irrevocably waives any claim or other rights which it may now or hereafter
acquire against the Company that arise from the existence, payment, performance
or enforcement of such Guarantor's obligations under its Note Guarantee and this
Agreement, including, without limitation, any right of subrogation,
reimbursement, exoneration, indemnification, and any right to participate in any
claim or remedy of any holder of Notes against the Company, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other Property or by set-off or in
any other manner, payment or Note on account of such claim or other rights. If
any amount shall be paid to any Guarantor in violation of the preceding sentence
and the Notes shall not have been paid in full, such amount shall have been
deemed to have been paid to such Guarantor for the benefit of, and held in trust
for the benefit of, the holders of the Notes, and shall forthwith be paid to the
Company for the benefit of such holders to be credited and applied upon the
Notes, whether matured or unmatured, in accordance with the terms of this
Agreement. Each Guarantor acknowledges that it shall receive direct and indirect
benefits from the financing arrangements contemplated by this Agreement and that
the waiver set forth in this Section 23.4 is knowingly made in contemplation of
such benefits.

ARTICLE XXIV

CONFIDENTIAL INFORMATION

        For the purposes of this Article XXIV, "Confidential Information" means
information delivered to any Purchaser by or on behalf of the Company, any
Subsidiary or any Guarantor in connection with the transactions contemplated by
or otherwise pursuant to this Agreement that is proprietary in nature, provided
that such term does not include information that (a) was publicly known or
otherwise known to such Purchaser prior to the time of such disclosure (without
breach of any confidentiality or fiduciary obligation), (b) subsequently becomes
publicly known through no act or omission by such Purchaser or any person acting
on such Purchaser's behalf, (c) otherwise becomes known to such Purchaser other
than through disclosure by the Company or any Subsidiary (provided that such
Purchaser did not know or have reason to believe that the party disclosing such
information was subject to any confidentiality or fiduciary obligation to the
Company, any Subsidiary or any Guarantor) or (d) constitutes financial
statements delivered to such Purchaser under Section 14.1 that are otherwise
publicly available. Each Purchaser will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by such Purchaser
in good faith to protect confidential information of third parties delivered to
such Purchaser, provided that such Purchaser may deliver or disclose
Confidential Information to (i) its directors, officers, employees, partners,
managers, shareholders, members, agents, attorneys and affiliates (to the extent
such disclosure reasonably relates to the administration of the investment
represented by its Notes), (ii) its financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Article XXIV, or (iii) any
other Person (w) to effect compliance with any Law, rule, regulation or order
applicable to such Purchaser, (x) in response to any subpoena or

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other legal process, (y) in connection with any litigation to which such
Purchaser is a party or (z) if an Event of Default has occurred and is
continuing, to the extent such Purchaser may reasonably determine such delivery
and disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under such Purchaser's Notes and this
Agreement (provided that for clauses (w), (x) and (y), such Purchaser shall
(1) promptly notify the Company of the existence, terms and circumstances
surrounding such request or requirement for disclosure, (2) consult with the
Company on the advisability of taking legally available steps to resist or
narrow such request or requirement, (3) assist the Company in seeking a
protective order or other appropriate remedy and (4) if disclosure is ultimately
necessary, disclose only the portion of the information legally required to be
disclosed and use commercially reasonable efforts to obtain confidential
treatment for such information). Each holder of a Note, by its acceptance of a
Note, will be deemed to have agreed to be bound by and to be entitled to the
benefits of this Article XXIV as though it were a party to this Agreement. On
reasonable request by the Company in connection with the delivery to any holder
of a Note of information required to be delivered to such holder under this
Agreement or requested by such holder (other than a holder that is a party to
this Agreement or its nominee), such holder will enter into an agreement with
the Company embodying the provisions of this Article XXIV.

        Notwithstanding anything to the contrary in this Article XXIV, each
Purchaser and any Affiliate thereof may disclose: (a) the type of business in
which the Company and its Subsidiaries are engaged; (b) the percentage and fair
value of any Notes held by such Purchaser or any Affiliate under this Agreement
and the amount of such Notes; and (c) the relationship of such Purchaser or its
Affiliates to the Company and its Subsidiaries in respect of this Agreement;
provided that no such disclosure shall include, or in any way describe, the
sales or earnings results or projections of the Company or any of its
Subsidiaries (except in connection with general statistical summaries or
analyses of the portfolio investments that do not specify or identify the
Company or any of its Subsidiaries), or any terms of any contracts to which the
Company or any of its Subsidiaries is a party or any counterparty thereto and
the terms of such contracts.

ARTICLE XXV

SUBSTITUTION OF PURCHASER

        Each Purchaser (including any substitute Purchaser or any transferee of
any portion of the purchase commitments pursuant to this Article XXV) shall have
the right to substitute any Person as the purchaser of the Notes, other
Securities and/or Royalties that it has agreed to purchase hereunder, or
transfer or assign a portion of such Purchaser's commitment for the purchase of
Notes, other Securities and/or Royalties to such Person, by written notice to
the Company, which notice shall be signed by both such Purchaser and such
Person, shall contain such Person's agreement to be bound by this Agreement,
contain a confirmation by such Person of the accuracy with respect to it of the
representations set forth in Article VI, and be accompanied by a properly
completed and duly executed Internal Revenue Service Form W-9 (or, if such
Person is a Foreign Assignee, a properly completed and duly executed Internal
Revenue Service Form W-8, completed in such a manner as to benefit, to the
fullest extent permitted by applicable U.S. federal income tax law, from any
available reduction of such Foreign Assignee's liability for U.S. federal income
Taxes with respect to amounts to which such Foreign Assignee is entitled
pursuant to the Securities or pursuant to the Royalty Agreement). Upon receipt
of such notice, if the original Purchaser has elected to substitute such Person
or has allocated 100% of its commitments to one or more Persons, any reference
to such Purchaser in this Agreement (other than in this Article XXV), shall be
deemed to refer to such Person(s) in lieu of such original Purchaser (including
any corresponding references to such Person as "Notes Purchaser" or "Royalties
Purchaser," as the case may be). In the event that such Person is so substituted
as a Purchaser hereunder and such Person thereafter transfers to such original
Purchaser all of the Notes, other Securities and Royalties then held by such
Person, upon receipt by the Company of notice of such

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transfer, any reference to such Person as a "Purchaser" in this Agreement (other
than in this Article XXV), shall no longer be deemed to refer to such Person,
but shall refer to such original Purchaser, and such original Purchaser shall
again have all the rights of an original holder of the Notes, other Securities
and Royalties under this Agreement. In the event that a Purchaser transfers or
assigns a portion (but not all) of such Purchaser's commitment for the purchase
of Notes, other Securities and/or Royalties, such transferee or assignee shall
be deemed an additional "Purchaser" for all purposes under this Agreement
(including any corresponding references to such Person as "Notes Purchaser" or
"Royalties Purchaser," as the case may be). Schedule A shall be updated upon the
occurrence of any substitution, transfer or assignment contemplated herein.

ARTICLE XXVI

MISCELLANEOUS

        26.1    Successors and Assigns.    Except as set forth in Article XXV,
this Agreement shall be binding upon, and inure solely to the benefit of, the
Purchasers, the Company, the Guarantors, and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement.

        26.2    Legal Holidays.    A "Legal Holiday" is a Saturday, a Sunday or
other day on which (a) commercial banks in the City of New York are authorized
or required by law to close or (b) the Principal Market is not open for trading.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.

        26.3    Accounting Terms.    All accounting terms used herein which are
not expressly defined in this Agreement have the meanings respectively given to
them in accordance with GAAP. Except as otherwise specifically provided herein,
(a) all computations made pursuant to this Agreement shall be made in accordance
with GAAP, and (b) all financial statements shall be prepared in accordance with
GAAP.

        26.4    Severability.    Any provision of this Agreement that 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 provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.

        26.5    Construction, Etc.    Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.

        Certain capitalized and other terms used in this Agreement are defined
in Schedule B; and references to a "Schedule" or an "Exhibit" are, unless
otherwise specified, to a Schedule or an Exhibit attached to this Agreement. For
the avoidance of doubt, all Schedules and Exhibits attached to this Agreement
shall be deemed to be a part hereof.

        26.6    Counterparts.    This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one (1) instrument. Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.

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        26.7    Table of Contents, Headings, Etc.    The table of contents,
cross-reference sheet and headings of the Sections of this Agreement have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.

        26.8    Construction.    Each of the Company and the Guarantors
acknowledges and agrees that the purchase and sale of the Securities pursuant to
this Agreement is an arm's-length commercial transaction between the Company, on
the one hand, and the several Purchasers, on the other, and that each of the
Company and the Guarantors has consulted its own legal and financial advisors to
the extent it deemed appropriate.

        26.9    Governing Law.    This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the laws
of the State of New York (excluding choice-of-law principles of the laws of such
State that would permit the application of the laws of a jurisdiction other than
such State), other than to the extent the laws of the State of Nevada (including
chapters 78 and 92A of the Nevada Revised Statutes) mandatorily apply.

        26.10    Jurisdiction and Process; Waiver of Jury Trial.    

        (a)   Each of the Company and the Guarantors and the Purchasers agrees
that any suit or proceeding arising in respect of this Agreement will be tried
in the U.S. District Court for the Southern District of New York or in any state
court located in the City and County of New York and the Company and the
Guarantors and the Purchasers agree to submit to the jurisdiction of, and to
venue in, such courts.

        (b)   The Company consents to process being served by or on behalf of
any holder of Notes in any suit, action or proceeding of the nature referred to
in Section 26.10(a) by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, return receipt
requested, to it at its address specified in Article XXII or at such other
address of which such holder shall then have been notified pursuant to said
Section. The Company agrees that such service upon receipt (i) shall be deemed
in every respect effective service of process upon it in any such suit, action
or proceeding and (ii) shall, to the fullest extent permitted by applicable law,
be taken and held to be valid personal service upon and personal delivery to it.
Notices hereunder shall be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any reputable
commercial delivery service.

        (c)   Nothing in this Section 26.10 shall affect the right of any holder
of a Note to serve process in any manner permitted by law, or limit any right
that the holders of any of the Notes may have to bring proceedings against the
Company in the courts of any appropriate jurisdiction or to enforce in any
lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

        (d)   Each of the Company, the Guarantors and the Purchasers hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the Transactions.

        26.11    Disclosure of Tax Information.    Notwithstanding anything
herein to the contrary, the Company (and the Company's employees,
representatives, and other agents) and each of the Guarantors (and each of the
Guarantors' employees, representatives, and other agents) are authorized to
disclose to any and all persons, the Tax Treatment and Tax Structure of the
potential transaction and all materials of any kind (including Tax opinions and
other Tax analyses) provided to the Company and to any of the Guarantors
relating to that treatment and structure, without the Purchasers imposing any
limitation of any kind. For this purpose, "Tax Treatment" means U.S. federal and
state income Tax treatment, and "Tax Structure" is limited to any facts that may
be relevant to that treatment.

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        26.12    Statements Required in Certificate.    Each certificate (other
than certificates provided pursuant to Section 14.1(a)) with respect to
compliance by or on behalf of the Company or any Guarantor with a condition or
covenant provided for in this Agreement shall include:

        (s)   a statement that the Person making such certificate or opinion has
read such covenant or condition;

        (t)    a statement that, in the opinion of such Person, it or he has
made such examination or investigation as is necessary to enable it or him to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and

        (u)   a statement as to whether or not, in the opinion of such Person,
such covenant or condition has been complied with.

        26.13    Force Majeure.    In no event shall the Company be responsible
or liable for any failure or delay in the performance of its obligations
hereunder arising out of or caused by, directly or indirectly, forces beyond its
control, including, without limitation, strikes, work stoppages, accidents,
fires, floods, acts of war or terrorism, civil or military disturbances, nuclear
or natural catastrophes or acts of God, and interruptions, loss or malfunctions
of utilities, communications or computer (software and hardware) services; it
being understood that the Company shall use reasonable efforts which are
consistent with accepted practices in the mining industry to resume performance
as soon as practicable under the circumstances.

        26.14    Specific Performance.    The parties agree that irreparable
damage would occur in the event that any party fails to consummate the
transactions contemplated by this Agreement in accordance with the terms of this
Agreement and that each of the Company and the Purchasers shall be entitled to
specific performance in such event, in addition to any other remedy at Law or in
equity. The parties agree that the Company and the Purchasers shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement or to
enforce specifically the terms and provisions of this Agreement in addition to
any other remedy to which either Party may be entitled.

        26.15    Time of the Essence.    Time shall be of the essence of this
Agreement.

[Signature page follows]

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        IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
by their authorized representatives as of the date first above written.

    PROSPECT GLOBAL RESOURCES INC.
 
 
By:
 
/s/ PATRICK L. AVERY

--------------------------------------------------------------------------------

        Name:   Patrick Avery         Title:   Chief Executive Officer and
President

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    AIF VII PG O&R HOLDINGS, L.P.
 
 
By:
 
Apollo Advisors VII (APO FC), L.P.,
its general partner
 
 
By:
 
Apollo Advisors VII (APO FC-GP), LLC,
its general partner
 
 
By:
 
/s/ LAURIE D. MEDLEY

--------------------------------------------------------------------------------

        Name:   Laurie D. Medley         Title:   Vice President

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    AIF VII PG HOLDINGS, L.P.
 
 
By:
 
Apollo Advisors VII, L.P.,
its general partner
 
 
By:
 
Apollo Capital Management VII, LLC,
its general partner
 
 
By:
 
/s/ LAURIE D. MEDLEY

--------------------------------------------------------------------------------

        Name:   Laurie D. Medley         Title:   Vice President

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    ANRP PG HOLDINGS, L.P.
 
 
By:
 
Apollo ANRP Advisors, L.P.,
its general partner
 
 
By:
 
Apollo ANRP Capital Management, LLC,
its general partner
 
 
By:
 
/s/ LAURIE D. MEDLEY

--------------------------------------------------------------------------------

        Name:   Laurie D. Medley         Title:   Vice President

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    ANRP PG O&R HOLDINGS, L.P.
 
 
By:
 
Apollo ANRP Advisors (APO FC), L.P.,
its general partner
 
 
By:
 
Apollo ANRP Advisors (APO FC-GP), LLC,
its general partner
 
 
By:
 
/s/ LAURIE D. MEDLEY

--------------------------------------------------------------------------------

        Name:   Laurie D. Medley         Title:   Vice President

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    AP PG GOLDEN SHARE, LLC
 
 
By:
 
Apollo Management VII, L.P.,
its manager
 
 
By:
 
AIF VII Management, LLC,
its general partner
 
 
By:
 
/s/ LAURIE D. MEDLEY

--------------------------------------------------------------------------------

        Name:   Laurie D. Medley         Title:   Vice President

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SCHEDULE A

INFORMATION RELATING TO PURCHASERS

Name of Notes Purchasers
  Principal Amount of
Notes to be Purchased  

AIF VII PG Holdings, L.P. 

  $ 76,200,000  

ANRP PG Holdings, L.P. 

  $ 23,800,000  

Total

  $ 100,000,000  

 

Name of Royalty Purchasers
  Percentage of
Royalty to be
Purchased   Percentage of
Series A
Warrants to
be Received   Percentage of
Series B
Warrants to
be Received   Percentage of
Termination Fee
to be Received  

AIF VII PG O&R Holdings, L.P. 

    76.20 %   76.20 %   76.20 %   76.20 %

ANRP PG O&R Holdings, L.P. 

    23.80 %   23.80 %   23.80 %   23.80 %

Total

    100 %(1)   100 %   100 %   100 %

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(1)The percentages in this Schedule A refer to the percentage of the Royalty
that is allocable to the Royalty Purchasers in the Royalty Agreement. For the
avoidance of doubt, the Royalty Purchasers are not entitled to the Royalty that
is allocable to Buffalo Management LLC in the Royalty Agreement.

Name of Preferred Share Purchaser

AP PG Golden Share, LLC

        1)    All payments by wire transfer of immediately available funds to
accounts to be specified by the applicable Purchaser no later than two
(2) Business Days prior to the date of the applicable payment.

        2)    All notices of payments, written confirmations of such wire
transfers and all other communications:

c/o Apollo Global Management, LLC
9 West 57th Street
New York, NY 10019
Attention: Laurie Medley
Facsimile: (646) 607-0528

Sch. A-1

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SCHEDULE B

DEFINED TERMS

        As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:

        "Acceptable Confidentiality Agreement" shall mean a customary
confidentiality agreement containing terms no less favorable to the Company in
the aggregate than the terms set forth in the Confidentiality Agreement, dated
March 5, 2012, between the Company and Apollo Management VII, L.P.

        "Accounting Firm" is defined in Section 13.12.

        "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings. For purposes of this Agreement, Apollo Global Management, LLC and its
Affiliates shall not be deemed to be Affiliates of the Company or any of its
Subsidiaries.

        "Associate" means, when used to indicate a relationship with any Person,
(i) any officer or director of such Person, (ii) any spouse, former spouse,
child, parent, parent of a spouse, sibling, grandchild or grandparent of any of
the Persons listed in clause (i) above, (iii) any Affiliate of any of the
Persons listed in clause (i) or (ii) above, (iv) any corporation or organization
of which such Person listed in clause (i) or (ii) above is an officer or partner
or is directly or indirectly the beneficial owner of 10% or more of any class of
equity securities, and (v) any trust or other estate in which any of the Persons
listed in clause (i) or (ii) above has a substantial beneficial interest or as
to which such Person serves as trustee or in a similar fiduciary capacity.

        "Agreement" is defined in the first paragraph of this Agreement.

        "Applicable Price" is defined in Section 13.4.

        "Apollo Preferred Shares" means 100 shares of the Company's Series A
Preferred Stock as described in the Certificate of Designation.

        "Apollo Warrants" are defined in the third paragraph of this Agreement.

        "Appraiser" is defined in Section 13.4(D).

        "Approval" means any authorization, consent, approval, license, lease,
ruling, permit, tariff, rate, certification, exemption, filing, variance, claim,
order, judgment, decree, sanction or publication of, by or with, any notice to,
any declaration of or with, or any registration by or with, or any other action
or deemed action by or on behalf of, any Governmental Authority.

        "Approved Subordinated Indebtedness" means any indebtedness outstanding
from any Obligor to any other Obligor which is subject to the terms and
conditions of a subordination agreement in form and substance satisfactory to
the Purchasers providing for, among other things, the subordination of the
Indebtedness subject to the subordination agreement to the Indebtedness
evidenced by the Notes, and which is incurred on terms and conditions, and
pursuant to documentation, acceptable to the holders, acting in their reasonable
discretion.

        "AWP" means American West Potash LLC, a Delaware limited liability
company and, as of the date hereof, a wholly owned indirect Subsidiary of the
Company.

Sch. B-1

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        "Bankruptcy Law" means Title 11, United States Code, or any other U.S.
Federal or state law for the relief of debtors.

        "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act as in effect on the date hereof. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.

        "Benefit Plan" shall mean any employee benefit plan, program, policy,
practice, undertaking or other arrangement maintained, sponsored or administered
by the Company or any of its Subsidiaries, to which the Company or any of its
Subsidiaries contributes or is bound, or in respect of which the Company or any
of its Subsidiaries has, or will have, any liability or contingent liability, in
each case providing benefits to any employees of the Company or any of its
Subsidiaries (or any beneficiary or dependent thereof), whether or not written
(whether funded or unfunded, insured or uninsured, formal or informal,
registered or unregistered), including without limitation any bonus, incentive,
deferred compensation, incentive compensation, vacation, stock purchase, stock
option, phantom stock, pension, retirement savings, profit sharing, life or
accident insurance, hospitalization, health, medical or dental, disability,
severance, employment, change of control or fringe benefit plan, program or
agreement and any related trusts or other funding vehicles.

        "Board Observer" is defined in Section 9.11(b).

        "Board of Directors" means:

        (a)   with respect to a corporation, the board of directors of the
corporation or any committee thereof duly authorized to act on behalf of such
board;

        (b)   with respect to a partnership, the board of directors of the
general partner of the partnership;

        (c)   with respect to a limited liability company, the managing member
or members or any controlling committee of managing members thereof; and

        (d)   with respect to any other Person, the board or committee of such
Person serving a similar function.

        "Buffalo" is defined in the sixth paragraph of this Agreement.

        "Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banking institutions in New York City are authorized or
required by law to close.

        "Buy-In" is defined in Section 13.3(c).

        "Buy-In Price" is defined in Section 13.3(c).

        "Cap" is defined in Section 11.4(d).

        "Capital Costs" shall mean all costs to develop, build, equip,
commission and ramp up to nameplate capacity the mine, processing facilities,
required infrastructure (including any necessary infrastructure to export
product whether at the mine site or off the mine site) and administrative
facilities at the mine site. Capital Costs shall include direct, indirect costs
and contingency, direct and indirect owner's costs and contingency plus spare
parts and first fills.

        "Capitalized Lease Liabilities" means all monetary obligations of any
Person under any leasing or similar arrangement which could be classified as
capitalized leases, and, for purposes of this Agreement and each other Note
Document, the amount of such obligations shall be the capitalized amount
thereof, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty.

Sch. B-2

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        "Capital Stock" means:

        (a)   in the case of a corporation, corporate stock;

        (b)   in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;

        (c)   in the case of a partnership or limited liability company,
partnership interests (whether general or limited) or membership interests; and

        (d)   any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person, but excluding from all of the foregoing
clauses (a) through (d) any debt securities convertible into Capital Stock,
whether or not such debt securities include any right of participation with
Capital Stock.

        "Cash Equivalent Investment" means, at any time:

        (e)   securities denominated in Dollars maturing not more than twelve
(12) months from the date of issue, which are issued, guaranteed or insured by
the government of the United States of America; or

        (f)    any negotiable certificate of deposit or bankers' acceptance,
guaranteed investment contracts, repurchase agreement or discount debt
obligation (in each case, denominated in Dollars), maturing not more than one
(1) year after such time, which is issued (or, in the case of a bankers'
acceptance, accepted) by any domestic commercial banking institution that has a
credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1
or higher by Fitch Ratings Ltd or P-1 or higher by Moody's Investor Services
Limited.

        "CERCLA" is defined in Section 7.20(a)(i).

        "Certificate of Designation" means the certificate of designation of the
Apollo Preferred Shares in the form set forth in Exhibit C.

        "Change of Control" means the occurrence of any of the following:

        (g)   (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act)), other than Permitted Holders, is
or becomes the Beneficial Owner, directly or indirectly, of 35.0% or more of the
voting power of the Voting Stock of the Company (or upon any merger or
consolidation, the surviving or successor entity); or (ii) during any period of
two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election to such Board of Directors or whose nomination for
election was approved by a vote of at least 50.0% of the directors of the
Company then still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so approved)
cease for any reason to constitute at least a majority of the Board of Directors
of the Company;

        (h)   the sale, transfer, conveyance, or other disposition in one or a
series of related transactions, of all or substantially all of the properties or
assets of the Company and the Subsidiaries, taken as a whole (which, for the
avoidance of doubt, shall not include merger or consolidation transactions), to
any "person" (as that term is used in Section 13(d)(3) of the Exchange Act)
other than to Permitted Holders; or

        (i)    the adoption of a plan relating to the liquidation or dissolution
of the Company.

        "Change of Control Offer" means an offer to a holder of Notes to
repurchase all or any part of that holder's Notes in the event a Change of
Control occurs.

        "Change of Control Payment" is defined in Section 15.27(a).

Sch. B-3

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        "Change of Control Payment Date" means the date of repurchase of Notes
by the Company pursuant to a Change of Control Offer.

        "Claim" is defined in Section 11.3(b).

        "Claim Notice" is defined in Section 11.3(b).

        "Closing" is defined in Section 3.1.

        "Closing Date" is defined in Section 3.1.

        "Closing Sale Price" means, for any security as of any date, the last
closing bid price and last closing trade price, respectively, for such security
on the Principal Market, as reported by Bloomberg, or, if the Principal Market
begins to operate on an extended hours basis and does not designate the closing
bid price or the closing trade price, as the case may be, then the last bid
price or last trade price, respectively, of such security prior to 4:00 p.m.,
New York Time, as reported by Bloomberg, or if the foregoing do not apply, the
last closing bid price or last trade price, respectively, of such security in
the over-the-counter market on the electronic bulletin board for such security
as reported by Bloomberg, or, if no closing bid price or last trade price,
respectively, is reported for such security by Bloomberg, the average of the bid
prices, or the ask prices, respectively, of any market makers for such security
as reported in the OTC Link or "pink sheets" by OTC Markets Group Inc. (formerly
the Pink OTC Markets Inc.). If the Closing Sale Price cannot be calculated for a
security on a particular date on any of the foregoing bases, the Closing Sale
Price, as the case may be, of such security on such date shall be the fair
market value as mutually determined by the Company and the Holder. If the
Company and the Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved by an Appraiser selected as
provided in Section 13.4(d). All such determinations to be appropriately
adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transaction during the applicable calculation
period.

        "Code" means the Internal Revenue Code of 1986, as amended, and the
rules, regulations and published interpretations promulgated thereunder from
time to time.

        "Collateral" means substantially all of the property, real or personal,
tangible or intangible, of each Obligor, including, without limitation, any
property subject to a Lien in favor of the lenders in respect of the Project
Financing Facility.

        "Collateral Agent" means the agent named as "Collateral Agent" in the
Collateral Documents.

        "Collateral Documents" means any security agreements, mortgages,
collateral access agreements, deposit account control agreements, securities
account control agreements and any other documents pursuant to which any Obligor
grants or perfects a Lien upon any real or personal property as security for
payment of the Obligations.

        "Company Disclosure Schedules" means the disclosure schedules attached
hereto that correspond to the numbered sections in Article VII; the information
disclosed in any particular section of the Company Disclosure Schedules shall be
deemed to relate to and to qualify only the particular representation or
warranty set forth in the corresponding numbered section in Article VII;
provided, however, that to the extent that an item in a section of the Company
Disclosure Schedules is relevant and reasonably apparent on its face to apply to
the disclosure required by any other section of Article VII, such item shall be
deemed to be disclosed in the section of the Company Disclosure Schedules
corresponding to such other section of Article VII whether or not an explicit
cross-reference appears.

        "Common Stock" means the common stock of the Company, par value $0.001
per share.

        "Company" is defined in the first paragraph of this Agreement.

Sch. B-4

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        "Company Converstion Date" is defined in Section 13.3(b).

        "Company Conversion Notice" is defined in Section 13.3(b).

        "Company Organizational Documents" is defined in Section 7.4.

        "Company SEC Documents" is defined in Section 7.9(a).

        "Company Share Delivery Date" is defined in Section 13.3(b).

        "Company Termination Fee" is defined in Section 10.3.

        "Compliance Certificate" means a certificate an officer of the Company
reasonably satisfactory in form and substance to the Purchasers certifying of
compliance with the provisions of this Agreement.

        "Confidential Information" is defined in Article XXV.

        "Conversion Amount" is defined in Section 13.1(a) and 13.1(b).

        "Conversion Date" is defined in Section 13.3(a).

        "Conversion Failure" is defined in Section 13.3(c).

        "Conversion Milestone" means the date on which both of the following has
occurred: (i) Project Completion, and (ii) at any time after Project Completion,
the arithmetic average of the daily VWAP of the Common Stock for any twenty
(20) consecutive Trading Days being 200% or more of the then-applicable
Conversion Price (provided that this condition shall only be deemed to be
satisfied if the Common Stock is listed on Nasdaq, TSX or NYSE/AMEX (or another
national securities exchange in the US or Canada reasonably acceptable to the
Majority Purchasers) during such twenty (20) consecutive Trading Day measuring
period).

        "Conversion Price" is defined in Section 13.2(b).

        "Convertible Securities" means, with respect to any Person, any shares
or securities (other than Options) directly or indirectly convertible into or
exchangeable or exercisable for shares of capital stock of such Person
(including, in the case of the Company, shares of Common Stock).

        "Cost Overrun Facility" means any committed credit facility made
available to the Company for the purposes of funding capital cost overruns and
which has been made available on terms and conditions, and pursuant to
documentation, acceptable to the Collateral Agent (acting on the instructions of
the Majority Purchasers).

        "Current Capital Estimate" means $1,530,000,000.

        "Custodian" means any receiver, interim receiver, receiver and manager,
trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.

        "Damages" is defined in Section 11.1.

        "Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.

        "Definitive Feasibility Study" shall mean a definitive feasibility study
with respect to the Holbrook Project from Tetra Tech or another firm reasonably
acceptable to the Majority Purchasers which (a) indicates that applicable
metallurgical test work has been completed such that the entire flow sheet has
been finalized and fixed and is fully specified to support basic and detailed
engineering and obtaining firm vendor quotes; (b) indicates that at least 50% of
basic engineering has been completed; (c) indicates that procurement is
well-advanced; (d) indicates that capital and operating cost estimate with an
accuracy of +/- 15%, has been completed and in the case of the capital cost
estimate, has minimal reliance on factored estimates and primarily relies on
takeoffs and unit rates; (e) indicates that

Sch. B-5

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significant trade-off and optimization studies have been completed;
(f) indicates that all environmental assessments have been performed and all key
permit applications have been submitted; (g) indicates that the Holbrook Project
has a schedule that starts no later than the first quarter of 2014 and has a
duration from Notice to Proceed (as defined in the EPCM or EPC contract) to
Project Completion (as would be defined in a customary project finance facility)
that does not exceed fifty-two (52) months; (h) indicates that the Holbrook
Project is supported by reserves and resources of all potash members which the
Company has the right to mine which are estimated using assumptions,
methodologies and a mine plan acceptable to the Purchasers' independent
engineering firm and meet NI 43-101 standards that have a tonnage and grade
consistent with that presented in the Reserves and Resources Statement presented
in the Preliminary Economic Assessment ("PEA") by Tetra Tech (which was filed
with the SEC on December 22, 2011), and that in any event will (x) have
sufficient demonstrable resources of ultimately recoverable standard product of
all potash members that support a mine life of twenty-five (25) years and
(y) have sufficient reserves to support a mine life of at least twenty
(20) years; and (i) meets the definitive feasibility study requirements of
commercial project finance lending banks, policy banks and major export credit
agencies to which the Company will be applying for financial support, including
compliance with the Equator Principles.

        "DFS Estimate" is defined in Section 9.8.

        "Dilutive Issuance" is defined in Section 13.4.

        "Enforceability Exceptions" is defined in Section 7.2(c).

        "Environmental Claims" is defined in Section 7.20(a)(iv).

        "Environmental Laws" is defined in Section 7.20(a)(i).

        "EPC" is defined in Section 6.8.

        "EPCM" is defined in Section 6.8.

        "Equity Interests" means Capital Stock and all Options or other rights
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).

        "Equity-based Security" means any capital stock, any preferred stock or
any other equity-like or hybrid securities (including debt securities with
equity components), including, without limitation, Options, convertible,
exchangeable or exercisable securities, stock appreciation rights or any other
security or arrangement whose economic value is derived from the value of the
equity of the Company or its Subsidiaries.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.

        "ERISA Affiliate" means, with respect to the Company or a Subsidiary of
the Company, any trade or business (whether or not incorporated) that, together
with the Company or such Subsidiary, is treated as a single employer under
Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

        "Event of Default" is defined in Article XVI.

        "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations promulgated thereunder from
time to time in effect.

        "Ex-Dividend Date" means, with respect to any issuance, dividend or
distribution, the first date on which the shares of Common Stock trade on the
applicable exchange or in the applicable market, regular way, without the right
to receive the issuance, dividend or distribution in question.

Sch. B-6

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        "Expiration Date" is defined in Section 13.9.

        "Expiration Time" is defined in Section 13.9.

        "FCPA" is defined in Section 7.7(b).

        "Foreign Assignee" means an assignee of an interest in the Securities or
the Royalty Agreement (including pursuant to Article XXV) that is a Foreign
Purchaser.

        "Foreign Purchaser" means a Purchaser other than a Purchaser that is, or
is treated as, a "United States person" for U.S. federal income tax purposes,
within the meaning of Section 7701(a)(30) of the Code.

        "Form 10-K" is defined in Section 7.16(b).

        "Form 10-Q" is defined in Section 14.1.

        "GAAP" means generally accepted accounting principles in the United
States of America set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a
significant segment of the accounting profession, as in effect from time to
time, provided that if any change in GAAP would alter the computation or
determination of any financial ratio or other test provided for under this
Agreement such ratio or other test shall continue to be computed in accordance
with GAAP as in effect prior to such change until the Majority Purchasers and
the Company shall have agreed whether (and if so, how) to amend this Agreement
to eliminate the effect of such change on such computation or determination.

        "Governmental Authority" means:

        (j)    the government of

        (i)    the United States of America or any state or other political
subdivision thereof, or

        (ii)   any other jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts jurisdiction over any
properties of the Company or any Subsidiary, or

        (k)   any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such government.

        "Grandhaven" is defined in Section 9.7.

        "Grandhaven Agreement" means the Potash Royalty Purchase and Sale
Agreement and Option, dated November 22, 2011, between the Company and
Grandhaven.

        "Grandhaven Agreement Amendment" is defined in Section 9.9.

        "Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection or deposit in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.

        "Guarantors" means each entity that signs this Agreement as a Guarantor
on the date hereof and each entity that becomes a party hereto after the date
hereof, including pursuant to Section 15.24, and each of their respective
successors and assigns, in each case, until the Note Guarantee of such Person
has been released in accordance with the provisions of this Agreement.

        "Hazardous Substances" means (i) any pollutant, contaminant, chemical or
toxic or hazardous material or substance or waste or any other material or
substance, to the extent exposure to such

Sch. B-7

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material or substance is now or hereafter prohibited, limited or regulated under
any Environmental Law, (ii) any petrochemical or petroleum distillates or
by-products, acidizing, well improvement, hydraulic fracturing ("fracking") or
drilling fluids, produced waters, radioactive materials (including naturally
occurring radioactive materials), asbestos in any form, urea formaldehyde foam
insulation, transformers or other equipment that contain dielectric fluid
containing polychlorinated biphenyls, explosives, and radon gas, and (iii) any
chemicals, materials, wastes, or substances defined, listed, or classified as or
included in the definition or designations of "hazardous substances," "solid
waste," "regulated substances," "hazardous wastes," "hazardous materials,"
"restricted hazardous materials," "extremely hazardous substances," "toxic
substances," "contaminants" or "pollutants" or words of similar meaning and
regulatory effect or with respect to which liability or standards of conduct are
imposed.

        "Hedging Agreement" means any agreement evidencing or creating any
Hedging Obligations.

        "Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:

        (l)    interest rate swap agreements, interest rate cap agreements,
interest rate collar agreements and other agreements or arrangements designed to
protect such Person against fluctuations in interest rates;

        (m)  currency exchange swap agreements, currency exchange cap
agreements, currency exchange collar agreements and other agreements or
arrangements designed to protect such Person against fluctuations in currency
exchange values;

        (n)   commodity swap agreements, commodity cap agreements, commodity
collar agreements and other agreements or arrangements designed to protect such
Person against fluctuations in commodity prices; and

        (o)   other agreements or arrangements designed to protect such Person
against fluctuations in interest rates or currency exchange rates.

        "Holbrook Project" is defined in the second paragraph of this Agreement.

        "holder" means, with respect to any Note the Person in whose name such
Note is registered in the register maintained by the Company pursuant to
Section 18.1.

        "Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:

        (p)   in respect of borrowed money;

        (q)   raised pursuant to any note purchase facility or evidenced by
bonds, notes, debentures, loan stock or similar instruments or letters of credit
(or reimbursement agreements in respect thereof);

        (r)   in respect of banker's acceptances;

        (s)   representing Capitalized Lease Liabilities;

        (t)    representing the balance deferred and unpaid of the purchase
price of any Property due more than six (6) months after such Property is
acquired, except any such balance that constitutes an accrued expense or trade
payable (other than any contingent payment obligations of a Person based on the
performance of a business or asset or Capital Stock purchased by such Person);

        (u)   representing the net loss value of any Hedging Obligations;

        (v)   representing receivables sold or discounted (other than any
receivables to the extent they are sold on a non-recourse basis);

Sch. B-8

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        (w)  representing any amount raised under any other transaction
(including any forward sale or purchase agreement) having the commercial effect
of a borrowing;

        (x)   representing any counter-indemnity obligation in respect of a
guarantee, indemnity, bond, standby or documentary letter of credit or any other
instrument issued by a bank or financial institution; or

        (y)   representing the amount of any liability in respect of any
guarantee or indemnity for any of the items referred to in paragraphs (a) to (i)
above;

if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person.

        "Indemnified Person" is defined in Section 11.3(a).

        "Indemnifying Person" is defined in Section 11.3(a).

        "Indemnified Taxes" is defined in Section 9.15(c).

        "Indemnity Tax Benefit" is defined in Section 11.4(g).

        "Initial Conversion Price" is defined in Section 13.2(a).

        "Insolvency Default" means any condition or event which, after notice,
lapse of time or both, would constitute an Event of Default of the nature
referred to in clauses (i) or (j) of Article XVI.

        "Investors Rights Agreement" is defined in the eighth paragraph of this
Agreement.

        "Intellectual Property Rights" is defined in Section 7.21.

        "Intercreditor Agreement" means an agreement between the Collateral
Agent, on behalf of the holders, and the agent or other representative for the
lenders under the Project Finance Facility which will provide (a) for the
subordination of the Liens securing the Obligations to the Liens securing the
Indebtedness under the Project Finance Facility, (b) that the Liens on the
Collateral securing the Notes shall not, other than pursuant to a proceeding
under Bankruptcy Law, be released absent the consent of the Collateral Agent
unless there has been final and full payment of the Obligations, (c) that the
holders of the Notes will have enforcement rights over the Collateral subject to
an agreed upon standstill period if the holders of the obligations in respect of
the Project Finance Facility are not exercising such enforcement rights,
(d) that the holders of the Notes will have the right to purchase the
Indebtedness and other liquidated obligations under the Project Finance Facility
at par during such standstill period and (e) such other terms as are reasonably
satisfactory to the Purchasers.

        "Investment Company Act" is defined in Section 7.14.

        "Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or similar obligations relative to the
liabilities of such other Persons), advances or capital contributions (excluding
commission, travel and similar advances to officers, agents and employees made
in the ordinary course of business and excluding advances made to customers and
suppliers with respect to current or anticipated purchases of inventory in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP, excluding, for the avoidance of doubt, accounts receivable
arising in the ordinary course of business.

Sch. B-9

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        "Karlsson" means The Karlsson Group, Inc., an Arizona corporation.

        "Karlsson Agreements" means the agreements entered into in connection
with the Karlsson Purchase, as in effect on the date hereof or as amended with
the consent of the Majority Purchasers or as permitted by Section 9.1(o).

        "Karlsson Note" means that certain Senior First Priority Secured
Promissory Note, dated August 1, 2012, made by PGRI Delaware in favor of
Karlsson in the principal amount of $125,000,000, together with the related
financing agreements.

        "Karlsson Purchase" means the transactions contemplated by that certain
Membership Interest Purchase Agreement, dated as of May 30, 2012, between PGRI
Delaware and Karlsson, including all ancillary agreements and documentation
entered in connection therewith.

        "Knowledge" means, with respect to the Company, the knowledge, after
reasonably inquiry, of Patrick Avery, Brian Wallace, Wayne Rich, Jonathan
Bloomfield and Gregory Dangler.

        "Law" means all laws, statutes, rules, regulations, ordinances, orders,
decrees, requirements, judgments and codes of Governmental Authorities.

        "Legal Holiday" is defined in Section 26.2.

        "Liabilities" shall mean any and all Indebtedness, liabilities, costs,
expenses and obligations, whether accrued or fixed, known or unknown, absolute
or contingent, matured or unmatured or determined or determinable, whether or
not required to be recorded or reflected in a balance sheet in accordance with
GAAP.

        "Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title-retention agreement, any lease
(other than an operating lease) in the nature thereof, any option or other
agreement to sell or give a security interest in and, any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction. For purposes of the Note Documents, any Person
shall be deemed to own, subject to a Lien, any property that it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement (other than an
operating lease) relating to such property.

        "Majority Purchasers" means, (i) prior to Closing, Purchasers with at
least a majority of purchase commitment for the Notes as set forth in Schedule A
and (ii) from and after the Closing, Purchasers (including any transferee
holders who subsequently become Purchasers) holding at least a majority of the
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Affiliates).

        "Material Adverse Effect" means any development, event, state of facts,
change or effect that, individually or in the aggregate, has had or would
reasonably be expected to have a material adverse effect on (a) the ability of
AWP to develop and operate the Holbrook Project and the Mine in a manner which
is consistent with the financial projections; (b) the business, assets,
liabilities, operations, performance, properties, condition (financial or
otherwise) or prospects of the Company, AWP or the Holbrook Project, or the
Company and its Subsidiaries taken as a whole, (c) the ability of any Obligor to
perform or comply with its obligations under this Agreement, the Note Documents
or any Project Document or with respect to the Transactions; (d) the legality,
validity or enforceability of the Note Documents or any Project Documents; or
(e) following the Springing Lien Trigger Date, the rights and remedies of any
holder under the Collateral Documents.

Sch. B-10

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        "Material Contracts" means any contract to which the Company or any of
its Subsidiaries is a party to or is expressly bound by that:

        (z)   is a "material contract" (as such term is defined in
Item 601(b)(10) of Regulation S-K of the SEC);

        (aa) relates to any joint venture, partnership, limited liability or
other similar agreements or arrangements relating to the formation, creation,
operation, management or control of any joint venture or partnership that is
material to the business of the Company and any of its Subsidiaries, taken as a
whole, or in which the Company owns more than a 15% voting or economic interest;

        (bb) that is an indenture, credit agreement, loan agreement, security
agreement, guarantee, note, mortgage or other contract providing for or securing
indebtedness for borrowed money or deferred payment (in each case, whether
incurred, assumed, guaranteed or secured by any asset) in excess of $1,000,000;

        (cc) prohibits the payment of dividends or distributions in respect of
any Equity Interest of the Company or any of any of its Subsidiaries, prohibits
the pledging of any Equity Interest of any of the Company's Subsidiaries or
prohibits the issuance of guarantees by any of the Company's Subsidiaries;

        (dd) is a settlement, conciliation or similar agreement (x) with any
Governmental Authority or (y) which would require the Company or any of the
Company's Subsidiaries to pay consideration of more than $1,000,000 after the
date of this Agreement;

        (ee) (A) contains a standstill or similar agreement pursuant to which
the Company or any of the Company's Subsidiaries has agreed not to acquire
assets or securities of a third party, or (B) which contains any
"non-solicitation", "no hire" or similar provision which restricts the Company
or any of the Company's Subsidiaries in soliciting, hiring, engaging, retaining
or employing such third party's current or former employees in a manner, or to
an extent, that would interfere in any material respect with the ordinary course
of operations of the business of the Company or any of its Subsidiaries;

        (ff)  relates to any acquisition by the Company or any of its
Subsidiaries of equity interests or any material assets (other than acquisitions
of inventory or equipment in the ordinary course of business) pursuant to which
the Company or any of its Subsidiaries has continuing indemnification (other
than indemnification obligations with respect to directors and officers),
"earn-out" or other contingent payment or guarantee obligations, in each case,
that could result in payments in excess of $1,000,000;

        (gg) contains any covenant that (A) materially limits the ability of the
Company or any of the Company's Subsidiaries to engage in any line of business,
or to compete with any Person or operate at any geographic location, except for
radius restrictions that may be contained in contracts entered into in the
ordinary course of business consistent with past practice, or expressly
requiring the Company and/or any of the Company's Subsidiaries to purchase an
amount of goods or services from a particular Person in an amount in excess of
$1,000,000 annually, or $2,000,000 in the aggregate, or (B) could require the
disposition of any material assets or material line of business of the Company
or any of the Company's Subsidiaries;

        (hh) involves any directors, executive officers (as such term is defined
in the Exchange Act) or 5% shareholders of the Company or any of their
affiliates (other than the Company or any of the Company's Subsidiaries) or
immediate family members;

        (ii)   relates to the employment of any individual on a full-time or
part-time consulting or other basis providing annual compensation in excess of
$200,000;

Sch. B-11

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        (jj)   contains a license in respect of Intellectual Property (except
for (A) licenses of commercially available software granted to the Company or
any of the Company's Subsidiaries and (B) licenses granted by the Company or any
of the Company's Subsidiaries to franchisees in the ordinary course of business
consistent with past practice) and that is material to the conduct of the
business of the Company and any of its Subsidiaries, taken as a whole;

        (kk) by its terms calls for aggregate payments by the Company or any of
the Company's Subsidiaries of more than $1,000,000 over the remaining term of
such Contract, except for any such Contract entered into in the ordinary course
of business consistent with past practice or that may be canceled, without any
material penalty or other material liability to the Company or any Company
Subsidiaries, upon notice of ninety (90) days or less;

        (ll)   entered into in connection with, or otherwise relating to, the
Karlsson Purchase; or

        (mm)  grants to any Person any right of first offer or right of first
refusal to purchase, lease, sublease, use, possess or occupy all or a
substantial part of the material assets of the Company or any of its
Subsidiaries.

        "Materials of Environmental Concern" is defined in Section 7.20(a)(i).

        "Maturity Date" when used with respect to any Note, means the later of
(i) the seventh (7th) anniversary of the Closing Date and (ii) the date that is
six (6) months after the maturity date of the Senior Project Finance Bank Debt
(as such maturity date shall be in effect on the date of initial incurrence of
the Senior Project Finance Bank Debt).

        "Merger Event" is defined in Section 13.15(a).

        "Mine" means, collectively, all properties, assets or other rights,
whether real or personal, tangible or intangible, now owned or leased or
hereafter acquired by or for the benefit of the Company or any of its
Subsidiaries which assets are used or intended for use in or forming part of the
Holbrook Project (and, for the avoidance of doubt, shall include (i) the potash
deposits located at the Holbrook Project and (ii) all associated beneficiation
facilities, together with all plant sites, waste dumps, ore dumps, crushing
circuits, abandoned heaps, power-supply systems and ancillary and infrastructure
facilities which are used in connection with the operation of the Holbrook
Project).

        "Mineral Rights" means all mineral interests, mining concessions, mining
tenements or other mineral rights owned by or subject to any lease, license or
similar agreement in favor of the Company and its Subsidiaries.

        "Minimum Off-Take Arrangements" is defined in Section 9.10.

        "Mining Rights" means all interests in the surface of any lands, the
minerals in (or that may be extracted from) any lands, all royalty agreements,
water rights, patented and unpatented mining claims, fee interests, mineral
leases, mining licenses, profits-a-prendre, joint ventures and other leases,
rights-of-way, inurements, licenses, permits and other mining rights and
interests used by or necessary to the Company or any of its Subsidiaries to
construct, develop and operate the Mine.

        "Money Laundering Laws" is defined in Section 7.33.

        "Moody's" means Moody's Investors Service, Inc., or any successor rating
agency.

        "Multiemployer Plan" means any "multiemployer plan" (as such term is
defined in section 4001(a)(3) of ERISA).

        "Necessary Permits" mean any Permits materially necessary for the
construction, production and operation of the Holbrook Project (including any
related to the logistics chain), including any Permits scheduled in
Schedule 6.9, but excluding any Permits that may be needed for activities within
the boundary of the Petrified Forest National Park.

Sch. B-12

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        "New Issuance Price" is defined in Section 13.4.

        "Note Documents" means this Agreement, the Notes, the Investors Rights
Agreement, the Royalty Agreement and the Collateral Documents.

        "Note Guarantee" means the Guarantee by each Guarantor of the Company's
obligations under this Agreement and the Notes, executed pursuant to the
provisions of this Agreement, with such variations as may be required under
local law in the event of a Note Guarantee delivered by a non-U.S. Guarantor.

        "Notes" is defined in the third paragraph of this Agreement.

        "Notes Purchaser" is defined in the third paragraph of this Agreement,
provided that if any such Notes Purchaser transfers all or a portion of such
Notes Purchaser's commitment pursuant to Article XXV or all or a portion of the
Notes held by such Notes Purchaser, such transferee shall be deemed a "Notes
Purchaser" for all purposes under this Agreement.

        "Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Obligor arising under any Note
Document or otherwise with respect to any Note, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including principal, interest
and fees, including interest and fees that accrue after the commencement by or
against any Obligor or any Affiliate thereof of any proceeding under any
debtor-relief laws naming such Person as the debtor in such proceeding,
regardless of whether such interest and fees are allowed claims in such
proceeding.

        "Obligor" means the Company or any Guarantor.

        "OFAC" is defined in Section 7.34.

        "Officer" means the Chairman of the Board, Chief Executive Officer,
President, Chief Financial Officer or any Executive Vice President, Senior Vice
President, Vice President, Treasurer or any Assistant Treasurer or Secretary or
any Assistant Secretary of the specified Person, or equivalent officer in the
case of non-corporate or non-U.S. entities.

        "Officer's Certificate" means a certificate signed by an Officer (or two
Officers to the extent specifically required by this Agreement) of the specified
Person and delivered to each holder of Notes then outstanding.

        "Operating Costs" shall mean all inside the fence cash costs necessary
to produce Potash with 60% grade delivered to the mine gate to customers,
including: mining, processing, compaction, product storage and handling,
load-out, tailings disposal, environmental and safety and mine site G&A, but
excluding any royalty-type payments and Taxes on mine-generated income.

        "Options" means, with respect to any Person, any rights, warrants or
options to subscribe for or purchase shares of capital stock or Convertible
Securities of such Person (including, in the case of the Company, shares of
Common Stock).

        "Organizational Documents" means, with respect to each Obligor, (a) its
certificate or articles of incorporation, bylaws, operating agreement,
partnership agreement or similar documents in any applicable jurisdiction; and
(b) all shareholder agreements, voting trusts and similar arrangements
applicable to any of its authorized Capital Stock or other equity interests.

        "Original Financial Statements" means the audited consolidated financial
statements of the Company and its Subsidiaries for the fiscal year ended
March 31, 2012.

        "Outside Date" is defined in Section 10.1(b)(i).

Sch. B-13

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        "Party" means each of the Company, the Guarantors and the Purchasers,
and "Parties" means all such Persons.

        "Patriot Act" is defined in Section 7.35.

        "Payment Default" is defined in Article XVI.

        "PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.

        "Permitted Junior Debt" means any Indebtedness of the Company issued or
incurred after the receipt of the Requisite Shareholder Approval and prior to
the Closing which does not include terms that are inconsistent with or contrary
to the terms set forth in Schedule C-2.

        "Permitted Preferred Stock" means any preferred stock of the Company
issued after the receipt of the Requisite Shareholder Approval and prior to the
Closing, which does not include terms that are inconsistent with or contrary to
the terms set forth in Schedule C-1.

        "Permits" is defined in Section 7.8.

        "Permitted Holders" means the Purchasers and holders and their
respective Affiliates.

        "Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.

        "PGRI Delaware" means Prospect Global Resources Inc., a Delaware
corporation and, as of the date hereof, a wholly owned Subsidiary of the
Company.

        "Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA, but excluding any Multiemployer Plan) subject to Title I of ERISA that
is, or within the preceding six (6) years has been, established or maintained,
or to which contributions are, or within the preceding six (6) years have been,
made or required to be made, by the Company or any ERISA Affiliate or with
respect to which the Company or any ERISA Affiliate may have any liability.

        "Potash" means potassium salts, including potassium chloride, potassium
nitrate, potassium sulfate and sulfate of potash magnesia, or langbeinite.

        "Preemptive Rights Cap Amount" means, with respect to a Preemptive
Rights Issuance, a number of securities which, if divided by the sum of (i) such
number of securities plus (ii) the number of securities issued in such
Preemptive Rights Issuance, would represent a percentage that is equal to the
Purchaser Percentage Interest (as of immediately prior to the Preemptive Rights
Issuance). A Royalty Purchaser's "pro rata portion" of the Preemptive Rights Cap
Amount applicable to a Preemptive Rights Issuance shall be determined by the
Majority Purchasers, from time to time, with notice to the Company, in a manner
intended to maintain the relative percentage interests of ownership of Company
securities of the Purchasers and their ultimate investors.

        "Preemptive Rights Issuance" is defined in Section 9.13(a).

        "Preemptive Rights Notice" is defined in Section 9.13(b).

        "Preferred Share Purchaser" is defined in the third paragraph of this
Agreement.

        "Preferred Stock" means any class of capital stock of a Person that is
preferred over any other class of capital stock (or similar equity interests) of
such Person as to the payment of dividends or the payment of any amount upon
liquidation or dissolution of such Person.

        "Principal Market" means the Nasdaq Stock Exchange, or, if the Nasdaq
Stock Exchange is not the principal trading market for the shares of Common
Stock, then on the principal securities exchange or securities market on which
the shares of Common Stock are then traded.

Sch. B-14

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        "Proceedings" is defined in Section 7.6.

        "Project Assets" means all properties, assets or other rights, whether
real or personal, tangible or intangible, now owned or hereafter acquired by or
for the benefit of the Company or any of its Subsidiaries, which are used or
intended for use in or forming part of the Holbrook Project.

        "Project Completion" means (a) until the definition in clause (b) hereto
becomes effective, the earliest date on which all of the following have occurred
with respect to the Holbrook Project: (i) all mining equipment has been tested
successfully; (ii) the mine is operating at 90% of nameplate capacity;
(iii) both underground and surface ore storage spaces are full; and (iii) the
mine has produced more than 200,000 tonnes of Potash or (b) after the entry into
the Project Finance Facility, the definition of "Project Completion" (or
analogous term) contained in the Project Finance Facility, provided that such
definition is reasonably satisfactory to the Majority Purchasers.

        "Project Documents" means instruments relating to the construction,
development or operations of the Holbrook Project pursuant to which either
(i) the aggregate amount payable thereunder by the Obligors exceeds (or may
reasonably be expected to exceed) U.S. $2,000,000 or (ii) the remaining term
thereunder is of more than twelve (12) months.

        "Project Financing Facility" means one or more debt facility with banks
or other institutional lenders or governmental lenders providing for loans for
the purpose of financing the Holbrook Project, as amended, restated, modified,
renewed, refunded, replaced (whether upon or after termination or otherwise) or
refinanced in whole or in part from time to time, whether by the same or any
other lender or group of lenders, in each case on terms and conditions, and
pursuant to documentation, acceptable to the holders.

        "Project Financing Facility Closing Date" means the first date on which
a credit agreement (or similar agreement) governing the Project Financing
Facility is executed and delivered in accordance therewith.

        "Project Party" means the Company and each of its Subsidiaries and any
affiliate, agent, advisor (excluding legal advisers and other similar
professional advisors not actually engaged in the construction, development,
operation or maintenance of the Mine), contractor, consultant, officer, director
or other associate of the Company or any of its Subsidiaries retained, employed
or consulted by the Company or any of its Subsidiaries in connection with the
consummation or the Holbrook Project or the development or operation of the
Mine.

        "Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including Capital Stock in, and other securities of, any
other Person.

        "Proxy Statement" is defined in Section 9.6(a)(ii).

        "Purchaser Conversion Date" is defined in Section 13.3(a).

        "Purchaser Conversion Notice" is defined in Section 13.3(a).

        "Purchaser Designee" is defined in Section 9.11(a).

        "Purchaser Expenses" means all reasonable out-of-pocket expenses
reasonably incurred by the Purchasers or on their behalf in connection with
their due diligence of the Company, the negotiation, preparation, execution,
delivery and performance of this Agreement and the other documents to be
delivered in connection with this Agreement, and the undertaking, structuring,
financing, evaluation and consummation of the Transactions (including, without
limitation, in connection with obtaining the consents, approvals, authorizations
of or delivering any notices or filings in connection therewith to, Governmental
Authorities necessary in connection with the execution, delivery and performance
of this Agreement, the other documents to be delivered in connection with this
Agreement, or the

Sch. B-15

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Transactions), including, without limitation, reasonable fees and expenses of
legal, accounting, industry, consulting and financial advisors. For avoidance of
doubt, in lieu of reimbursement, Purchasers shall be entitled to direct any
third-party invoices directly to the Company for payment directly by the
Company.

        "Purchaser Percentage Interest" means, with respect to any Preemptive
Rights Issuance, the percentage of the total number of votes that may be cast in
the election of directors generally of the Company immediately prior to such
Preemptive Rights Issuance that is represented by (a) the Notes (calculated as
if all of the Notes were issued and outstanding immediately prior to such
Preemptive Rights Issuance), (b) all of the shares of Common Stock previously
issued or then issuable under the Apollo Warrants (calculated as if all such
Common Stock were issued and outstanding immediately prior to such Preemptive
Rights Issuance), (c) any shares of Common Stock issued to the Notes Purchasers
pursuant to Sections 9.8 and 9.12 and (d) any securities with respect to which
the Notes Purchasers have elected to purchase pursuant to Section 9.13 in
connection with any Preemptive Rights Issuances that occurred prior to such
Preemptive Rights Issuance (calculated as if all such elected securities (and
all securities that were issued in such prior Preemptive Rights Issuances) were
issued and outstanding immediately prior to such Preemptive Rights Issuance).

        "Purchase Price" is defined in Section 2.1.

        "Purchaser Share Delivery Date" is defined in Section 13.3(a).

        "Purchasers" is defined in the first paragraph of this Agreement;
provided, that following the Closing Date, each holder of a Note, by its
acceptance of a Note, will be deemed a Purchaser and will be entitled to the
benefits and subject to the obligations of this Agreement as though it were a
party to this Agreement.

        "Reference Balance Sheet" is defined in Section 7.18(b).

        "Reference Property" is defined in Section 13.15(a).

        "refinance" means, in respect of any Indebtedness, to refinance, extend,
renew, refund, repay, prepay, repurchase, redeem, defease or retire, or to issue
other Indebtedness, in exchange or replacement for, such Indebtedness.
"refinanced" and "refinancing" shall have correlative meanings.

        "Representatives" of any Person means the directors, officers,
employees, shareholders, partners, agents, advisors, representatives of such
Person or any other persons acting under the direction of any of them or any of
their affiliates.

        "Requisite Shareholder Approval" is defined in Section 9.5.

        "Responsible Officer" means any Senior Financial Officer and any other
Officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.

        "Restricted Payments" is defined in Section 15.16.

        "Royalty" is defined in Section 2.1(c).

        "Royalty Agreement" is defined in the sixth paragraph of this Agreement.

        "Royalty Purchasers" is defined in the third paragraph of this
Agreement, provided that any assignee or transferee of any such Royalty
Purchaser pursuant to the terms of the Royalty Agreement shall be deemed a
"Royalty Purchaser" for all purposes under this Agreement.

        "Rule 144A" means Rule 144A promulgated under the Securities Act.

        "S&P" means Standard & Poor's Ratings Group, or any successor rating
agency.

Sch. B-16

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        "SEC" shall mean the Securities and Exchange Commission of the United
States, or any successor thereto.

        "Second Lien Intercreditor Agreement" means an agreement between the
Collateral Agent, on behalf of the holders, and the agent or other
representative for the lenders under the Cost Overrun Facility, which will
provide (1) that the Liens securing the Indebtedness under the Cost Overrun
Facility are equally and ratably secured with, but may rank senior in payment
priority to, the Obligations and (2) such other terms as are reasonably
satisfactory to the Collateral Agent.

        "Securities" is defined in the third paragraph of this Agreement.

        "Securities Act" means the Securities Act of 1933, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time
in effect.

        "Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.

        "Series A Warrants" is defined in the third paragraph of this Agreement.

        "Series B Warrants" is defined in the third paragraph of this Agreement.

        "Share Delivery Date" is defined in Section 13.3(b).

        "Shareholders Meeting" is defined in Section 9.5.

        "Solvent" means, when used with respect to any Person, as of any date of
determination, that on such date (a) the present fair saleable value of the
present assets of such Person and its Subsidiaries taken as a whole, exceeds the
sum of their debts (including contingent liabilities); (b) the present fair
salable value of the property of the such Person and its Subsidiaries, taken as
a whole, will be greater than the amount that will be required to pay the
probable liability of their debts and other liabilities (including contingent
liabilities), as such debts and other liabilities become absolute and matured;
(c) such Person and its Subsidiaries, taken as a whole, will be able to pay
their debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) such Person and its
Subsidiaries, taken as a whole, will not have unreasonably small capital with
which to conduct their business as contemplated on such date. The amount of
contingent liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.

        "Spin-off" is defined in Section 13.7.

        "Springing Lien Trigger Date" means the earlier of (i) the date on which
the principal of and interest on indebtedness outstanding under the Karlsson
Note is paid in full and (ii) the Project Financing Facility Closing Date.

        "Stockholder Rights Plan" is defined in Section 13.11(f).

        "Subsidiary" means, with respect to any specified Person:

        (nn) any corporation, association or other business entity of which more
than 50.0% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency and after giving effect to
any voting agreement or shareholders' agreement that effectively transfers
voting power) to vote in the election of directors, managers or trustees of the
corporation, association or other business entity is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and

Sch. B-17

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        (oo) any partnership (i) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(ii) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof); and

        (pp) any other Person that is consolidated in the consolidated financial
statements of the specified Person in accordance with GAAP.

        "substitute transaction" is defined in Section 9.7(x).

        "Support Agreements" is defined in the fifth paragraph of this
Agreement.

        "Supplemental Payment" is defined in that certain Supplemental Payment
Agreement, dated August 1, 2012, by and among the Company, AWP and Karlsson.

        "Supplemental Payment Gross Up" is defined in Section 9.18.

        "Tax" or "Taxes" means all taxes, including income tax, surtax,
remittance tax, presumptive tax, net worth tax, special contribution, production
tax, pipeline transportation tax, value added tax, withholding tax, gross
receipts tax, windfall profits tax, profits tax, severance tax, personal
property tax, real property tax, sales tax, service tax, transfer tax, use tax,
excise tax, premium tax, customs duties, stamp tax, motor vehicle tax,
entertainment tax, insurance tax, capital stock tax, franchise tax, occupation
tax, payroll tax, employment tax, social security, unemployment tax, disability
tax, alternative or add-on minimum tax, estimated tax, and any other tax,
together with any interest, fine or penalty thereon, or addition thereto.

        "Tax Proceeding" means any Tax audit, contest, suit, litigation,
defense, investigation, claim or other proceeding with or against any
Governmental Authority.

        "Tax Structure" is defined in Section 26.11.

        "Tax Treatment" is defined in Section 26.11.

        "tonne" means a metric tonne.

        "Trading Day" means any day on which the shares of Common Stock are
traded on the Principal Market, provided that "Trading Day" shall not include
any day on which the shares of Common Stock are scheduled to trade on such
exchange or market for less than 4.5 hours or any day that the shares of Common
Stock are suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00 p.m., New York City Time).

        "Threshold" is defined in Section 11.4(d).

        "Transaction Fee" is defined in Section 2.2.

        "Transactions" is defined in the fourth paragraph of this Agreement.

        "Transfer Agent" means the Company's transfer agent for its Common Stock
from time to time.

        "UK Bribery Act" is defined in Section 7.7(b).

        "Valuation Period" is defined in Section 13.7.

        "Valuation Event" is defined in Section 13.4(D).

        "Voting Stock" of any specified Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.

        "VWAP" is defined in Section 9.12(b).

        "Weighted Average Consideration" is defined in Section 13.15(b)(ii).

Sch. B-18

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SCHEDULE C-1

TERMS OF PERMITTED PREFERRED STOCK *

Sch. C-1-1

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SCHEDULE C-2

TERMS OF PERMITTED JUNIOR DEBT*

Sch. C-2-1

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SCHEDULE C-3

TERMS OF NOTES IN KARLSSON DEFAULT

Interest Rate

  Then-applicable interest rate on the Karlsson Note + 500 bps.

Interest Type

 

Non-cash; payment-in-kind only.

Maturity

 

One year.

Ranking

 

Junior to Project Finance Facility.

Mandatory prepayments

 

Mandatorily prepayable for any subsequent borrowings from the Project Finance
Facility.

Optional repayment/prepayment penalty

 

Repayable at any time with no penalty.

Covenants

 

None.

Default interest

 

2% above otherwise applicable rate.

Events of Default

 

Non-payment of amounts due, and cross-default to the Securities Purchase
Agreement.

Sch. C-3-1

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EXHIBIT A

[Form of Note]

Prospect Global Resources, Inc.

10% Convertible Springing Second-Lien Notes due 2020

No. [            ]   [Date] $[            ]   PPN[            ]

        FOR VALUE RECEIVED, the undersigned, Prospect Global Resources Inc.
(herein called the "Company"), a corporation organized and existing under the
laws of the State of Nevada, hereby promises to pay to [            ], or its
registered assigns ("Holder"), the initial principal sum of [            ]
DOLLARS (or so much thereof as shall not have been prepaid) on the Maturity Date
(as defined in the Securities Purchase Agreement referred to below) , with
interest (computed on the basis of a three hundred and sixty (360)-day year of
twelve, thirty (30)-day months and actual days elapsed) on the unpaid balance
hereof at the rate of 10.0% per annum from the date hereof, payable in the form
set forth below semiannually, on the [    •    ]th day of [    •    ] and
[    •    ] in each year (each an "Interest Payment Date"), commencing with the
[    •    ] or [    •    ] next succeeding the date hereof, until the principal
hereof shall have become due and payable. The Company shall pay interest on
overdue principal and on overdue interest (to the full extent permitted by law)
at the rate borne by the Notes.

        Payments of principal on this Note are to be made in lawful money of the
United States of America by wire transfer to the Holder.

        A portion of the interest payable on this note corresponding to 4.0% per
annum shall be made in lawful money of the United States of America by wire
transfer to the Holder on each Interest Payment Date. A portion of the interest
payable on this note corresponding to 6.0% per annum (the "PIK Portion") shall
be made by increasing the principal amount of this Note, or if the Holder shall
so elect not fewer than five (5) Business Days prior to any applicable Interest
Payment Date, by issuing additional Notes, in each case on each Interest Payment
Date in an amount equal to the PIK Portion. Unless the election described in the
immediately preceding sentence shall have been made, the principal amount of
this Note shall be automatically increased on the applicable Interest Payment
Date, and this Note shall thereafter evidence such increased principal amount
which shall, from and after the applicable Interest Payment Date, accrue
interest as set forth herein. To the extent the Holder shall have made such
election, Company shall execute and deliver to the Holder on the applicable
Interest Payment Date a new Note or Notes with a face amount equal to the PIK
Portion then payable.

        This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to the Securities Purchase Agreement, dated as of
November [    •    ], 2012 (as from time to time amended, the "Securities
Purchase Agreement"), between the Company and the respective Purchasers named
therein and is entitled to the benefits thereof. Each holder of this Note will
be deemed, by its acceptance hereof, to have made the representations set forth
in Section 8.5 of the Securities Purchase Agreement and agreed to the
confidentiality provisions set forth in Article XXIV of the Securities Purchase
Agreement. Unless otherwise indicated, capitalized terms used in this Note shall
have the respective meanings ascribed to such terms in the Securities Purchase
Agreement. To the extent that any provision of any Note conflicts with the
express provisions of the Securities Purchase Agreement, the provisions of the
Securities Purchase Agreement shall govern and be controlling.

        This Note is a registered Note and, as provided in the Securities
Purchase Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the

A-1

--------------------------------------------------------------------------------

name of, the transferee. Prior to due presentment for registration of transfer,
the Company may treat the person in whose name this Note is registered as the
owner hereof for the purpose of receiving payment and for all other purposes,
and the Company will not be affected by any notice to the contrary.

        The Holder shall have the voting rights set forth in Article XII of the
Securities Purchase Agreement.

        The Holder shall have the right to convert this Note into Common Stock
of the Company in accordance with Article XIII of the Securities Purchase
Agreement.

        This Note is not subject to optional prepayment or redemption by the
Company; provided that this Note may be converted into Common Stock of the
Company at the election of the Company to the extent set forth in
Section 13.1(b) of the Securities Purchase Agreement.

        If an Event of Default occurs and is continuing, the principal of this
Note may be declared or otherwise become due and payable in the manner, at the
price and with the effect provided in the Securities Purchase Agreement.

        Upon the occurrence of a Change of Control and subject to further
limitations contained in the Securities Purchase Agreement, the holder of this
Note may require the Company to redeem this Note in the manner, at the price and
with the effect provided in the Securities Purchase Agreement.

        This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York,
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.

    Prospect Global Resources Inc.
 
 
By
 
         

--------------------------------------------------------------------------------

[Title]

A-2

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EXHIBIT B-1

PROSPECT GLOBAL RESOURCES INC.
CONVERSION NOTICE

Reference is made to the 10% Convertible Springing Second-Lien Note (the "Note")
issued to the undersigned by Prospect Global Resources Inc., a Nevada
corporation (the "Company"). In accordance with and pursuant to the Note, the
undersigned hereby elects to convert the Conversion Amount (as defined in the
Note) of the Note indicated below into shares of Common Stock par value $0.001
per share (the "Common Stock") of the Company, as of the date specified below.

Date of Conversion:    

--------------------------------------------------------------------------------

Aggregate Conversion Amount to be converted:    

--------------------------------------------------------------------------------

Please confirm the following information:

Conversion Price:    

--------------------------------------------------------------------------------

Number of shares of Common Stock to be issued:    

--------------------------------------------------------------------------------

Please issue the Common Stock into which the Note is being converted in the
following name and to the following address:

Issue to:    

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Facsimile Number:    

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Authorization:    

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By:    

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Title:    

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Dated:    

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Account Number:    

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(if electronic book entry transfer)

Transaction Code Number:    

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(if electronic book-entry transfer)

B-1-1

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ACKNOWLEDGMENT

        The Company hereby acknowledges this Conversion Notice and hereby
directs [transfer agent] to issue the above indicated number of shares of Common
Stock in accordance with the Transfer Agent Instructions dated [            ]
from the Company and acknowledged and agreed to by [transfer agent].

    Prospect Global Resources Inc.
 
 
By:
 
  

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Name:
Title:

B-1-2

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EXHIBIT B-2

PROSPECT GLOBAL RESOURCES INC.
CONVERSION NOTICE

Reference is made to the 10% Convertible Springing Second-Lien Note (the "Note")
issued to the holder named below by Prospect Global Resources Inc., a Nevada
corporation (the "Company"). In accordance with and pursuant to the Note, the
Company hereby elects to require the conversion of the Conversion Amount (as
defined in the Note) of the Note indicated below into shares of Common Stock par
value $0.001 per share (the "Common Stock") of the Company, as of the date
specified below.

Holder:    

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Date of Conversion:    

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Aggregate Conversion Amount to be converted:    

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Please confirm the following information:

Conversion Price:    

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Number of shares of Common Stock to be issued:    

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Please indicate and return to the Company within one (1) Business Day of the
receipt of this notice the information below:

Issue to:    

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Facsimile Number:    

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Authorization:    

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By:    

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Title:    

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Dated:    

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Account Number:    

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(if electronic book entry transfer)

Transaction Code Number:    

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(if electronic book-entry transfer)

B-2-1

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ACKNOWLEDGMENT

        The undersigned hereby acknowledges this Conversion Notice and hereby
agrees that the [transfer agent] shall issue the above indicated number of
shares of Common Stock in accordance with the Transfer Agent Instructions dated
[                        ] from the Company and acknowledged and agreed to by
[transfer agent] .

 
 
[Holder]
 
 
By:
 
            

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Name:
Title:    

B-2-2

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EXHIBIT C-1

FORM OF CERTIFICATE OF DESIGNATION

See attached.

C-1

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PROSPECT GLOBAL RESOURCES INC.
Attachment "A" to Certificate of Designation

CERTIFICATE OF DESIGNATION
of
SERIES A PREFERRED STOCK
of
PROSPECT GLOBAL RESOURCES INC.
(Pursuant to the Nevada Revised Statutes 78.1955)

        Prospect Global Resources Inc., a Nevada corporation (the
"Corporation"), does by this certificate certify that, pursuant to the authority
contained in its articles of incorporation (as amended from time to time, the
"Articles of Incorporation") and the provisions of Nevada Revised Statutes
("NRS") 78.1955, the Corporation's Board of Directors (the "Board") has duly
adopted the following resolution creating a series of Preferred Stock designated
as "Series A Preferred Stock":

        RESOLVED, that the Corporation hereby designate and create a series of
authorized Preferred Stock of the Corporation, designated as "Series A Preferred
Stock", as follows:

        Of the 100,000,000 shares of Preferred Stock, $0.001 par value per
share, authorized to be issued by the Corporation pursuant to its Articles of
Incorporation, 100 shares of such Preferred Stock are hereby designated as
"Series A Preferred Stock." The voting powers, designations, preferences,
limitations, restrictions and relative rights of the Series A Preferred Stock
are as set forth below:

ARTICLE I
Number of Shares

        The designation of this series shall be Series A Preferred Stock (the
"Series A Stock"). The number of authorized shares of the Series A Preferred
Stock shall be 100.

ARTICLE II
Rank

        The Series A Preferred Stock shall rank pari passu to the Corporation's
common stock, $0.001 par value per share (the "Common Stock") as to distribution
of assets upon liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary.

ARTICLE III
Dividends

        Holders of the Series A Preferred Stock shall not be entitled to receive
any dividends with respect to the Series A Preferred Stock.

ARTICLE IV
Liquidation Preference

        Holders of the Series A Preferred Stock shall not be entitled to any
liquidation preference with respect to the Series A Preferred Stock.

ARTICLE V
Voting and Related Rights

        A.    The holders of a majority of the Series A Preferred Stock (the
"Majority Holders") shall have the right to elect the following number of
directors at any meeting of stockholders

C-2

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of the Corporation (or by written consent) at which directors are to be elected,
designated or appointed: (i) if the Investor Percentage Interest (as defined in
the Investors Rights Agreement, dated November 29, 2012 by and among the
Corporation and the investors named therein (the "Investor Rights Agreement"))
at such time equals or exceeds twenty-two and four tenths percent (22.4%) (the
"Initial Threshold"), four directors (subject to upwards adjustment pursuant to
Paragraph B below); and (ii) if the Investor Percentage Interest at such time is
less than the Initial Threshold, a number of directors equal to the Investor
Percentage Interest multiplied by the total number of directors on the Board
(inclusive of the directors elected by the Majority Holders pursuant to this
Article V), provided that (x) if the application of clause (ii) results in a
fractional number of Board members of greater than one, the number of directors
that the Majority Holders shall be entitled to elect shall be (A) if the
Investor Percentage Interest at such time equals or exceeds twenty percent
(20%), rounded up to the nearest whole number and (B) if the Investor Percentage
Interest at such time is below twenty percent (20%), rounded up or down to the
nearest whole number and (y) if the application of clause (ii) results in a
fractional number of Board members of less than one, the Majority Holders shall
not have the right to elect any member of the Board.

        B.    From and after the Closing (as defined below), without the written
consent of the Majority Holders, the Corporation shall not change the number of
directors on the Board from nine; provided that without the written consent of
the Majority Holders, the Corporation may increase the size of the Board by one
member solely in connection with the grant of a director designation or
nomination right to new investors in connection with capital-raising
transactions occurring after the Closing (as defined in the Securities Purchase
Agreement dated November 29, 2012 by and among the Corporation, certain
guarantors named therein and the purchasers named therein (the "Purchase
Agreement")); provided, further, that, (i) the Corporation shall be able to
exercise such right only once and (ii) in the event of such increase in the
number of directors, the Majority Holders shall thereafter be entitled to elect
an additional director to the Board (in addition to the number of directors they
are entitled to elect pursuant to Paragraph A above). If, pursuant to the terms
of the Purchase Agreement, the Corporation prior to the Closing increased the
size of its Board by one member in connection with the grant of a director
designation or nomination right to new investors in connection with
capital-raising transactions occurring prior to the Closing, then (i) the
Corporation shall not be entitled to exercise the right set forth in the prior
sentence and (ii) references to "nine" and "four" in Paragraph A above and the
first sentence of this Paragraph B shall instead be "eleven" and "five",
respectively.

        C.    In the event of the death, disability, resignation or removal of a
director elected, designated or appointed by the Majority Holders (other than
pursuant to Section 1.5 of the Investors Rights Agreement), the Majority Holders
may elect or appoint a replacement director to fill the resulting vacancy;
provided that if a director elected by the Majority Holders is removed for
cause, the replacement director will not be the same person who was removed.
Other than pursuant to Section 1.5 of the Investors Rights Agreement or for
cause, a director elected, designated or appointed by the Majority Holders may
not be removed without the prior written consent of the Majority Holders.

        D.    The Corporation will at all times provide the directors elected by
the Majority Holders with the same rights to indemnification that it provides to
the other members of the Board. The directors elected by the Majority Holders
shall each receive director fees and rights to expense reimbursement that are no
less favorable to them than the fees and reimbursement provided to any other
non-management director (in their capacity as directors).

C-3

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        E.    Except as otherwise provided in this Certificate of Designation
for Series A Preferred Stock (the "Certificate of Designation"), the holders of
shares of Series A Preferred Stock and the holders of shares of Common Stock
(together with the holders of Notes (as defined in the Purchase Agreement))
shall vote together as one class on all other matters submitted to a vote of the
stockholders of the Corporation.

        F.     Except as otherwise provided herein or to the extent they may
vote as a separate class under the NRS, the holders of shares of Series A
Preferred Stock shall have no special voting rights and their consent shall not
be required for taking any corporate action, except to the extent they are
entitled to vote with holders of shares of Common Stock as set forth herein.

ARTICLE VI
Restrictions on Transfer

        The outstanding shares of Series A Preferred Stock may only be
transferred (a) to an Affiliate (as defined in the Purchase Agreement) of the
initial holder of the Series A Preferred Stock, or (b) with the consent of the
Board.

ARTICLE VII
Conversion

        Each outstanding share of Series A Preferred Stock shall automatically
convert to one share of Common Stock upon the earlier to occur of (a) a transfer
of such share of Series A Preferred Stock in violation of Article VI above and
(b) the first business day following the first day after the Closing on which
the Investor Percentage Interest is equal to 0.0%.

ARTICLE VIII
Redemption

        The shares of Series A Preferred Stock shall not be redeemable.

ARTICLE IX
Reacquired Shares

        Any shares of Series A Preferred Stock purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their
cancellation be restored to the status of authorized and unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein and in the Articles
of Incorporation.

ARTICLE X
Amendment of Certificate of Designation

        This Certificate of Designation may only be amended with the written
consent of the Majority Holders. Except as otherwise provided in the Articles of
Incorporation, no consent by the holders of shares of any other class or series
of the Corporation's capital stock shall be required to amend this Certificate
of Designation.

C-4

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        IN WITNESS WHEREOF, this Certificate of Designation of Series A
Preferred Stock is executed on behalf of the Corporation as of
                                       , 2013.

  PROSPECT GLOBAL RESOURCES INC.

 

By:

 

 

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  Name:

  Title:

C-5

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EXHIBIT D

MINIMUM OFFTAKE ARRANGEMENTS

Guidelines for the Minimum Off-Take Arrangements

Best Efforts Obligation

  As described in the Securities Purchase Agreement to which this Exhibit is
attached, Prospect will use best efforts to enter into definitive agreements
("Customer Agreements") with respect to the Minimum Off-Take Arrangements no
later than the Closing, on the terms in all material respects as set forth below
and subject to modifications required by the providers of the Project Finance
Facility.

Customers

 

Prospect will enter into Customer Agreements with 2 to 4 customers; provided,
however, that no such customer shall be committed to purchase more than 50% of
the annual volume (as set forth below under "Minimum Volumes") for any year
unless such customer's commitment for such year does not exceed 250,000 tonnes.

Initial Delivery Date

 

The Customer Agreements shall provide that the anticipated initial delivery date
of potash to the customers shall be first calendar month following commencement
of commercial levels of production and/or Project Completion, whatever comes
first; provided, however, that if Prospect cannot meet the anticipated initial
delivery date due to a delay in construction, mining operations, permitting or
force majeure, the parties will agree to negotiate in good faith to adjust
delivery dates and obligations; provided further, that if Prospect is unable to
commence deliveries by June 30, 2017 (structured, for example, with a base
18 month grace period and one 6 month extension), the customer has the right to
terminate the contract.

Term

 

The Customer Agreements shall have a minimum term (the "Term") of three
(3) years; provided that if the initial delivery date is not on a
January 1st then the Term shall be for three years and a fraction of a year so
that the term ends on a December 31st.

Pricing Terms

 

The price at the signing of each sales agreement shall be calculated as follows:

 

(a)    for granular potash, the average of weekly Green Markets indices of
Saskatchewan, Carlsbad, Midwest and Vancouver, less a discount of $5 a tonne;
and

 

(b)    for standard potash, the average of weekly Green Markets indices of
Saskatchewan and Vancouver, less a discount of $5 a tonne.

 

Prospect will allow pricing terms for more than one quarter and up to four
quarters; provided that the Customer Agreements in the aggregate shall have a
mix of terms and durations intended to provide a portfolio of risk across the
portfolio.

D-1

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As a component of the off-take arrangements, Prospect will use best efforts to
provide "collar" pricing designed to provide greater certainty to both parties
with respect to budgeting and planning over a range of years. Under collar
pricing, Prospect and the buyer will agree on the "floor" or minimum price to be
paid by the buyer even if the indices price (above) falls below the floor price
and a "ceiling" or maximum price to be paid by the buyer even if the indices
price rises above the ceiling price. The floor and ceiling prices will be
symmetrical (i.e., equidistant from the initial price) and Prospect shall be
within a reasonable range (for illustrative purposes, the parties believe that a
reasonable floor/ceiling range around the current spot as of the date hereof
would be in the range of ±10 to 20%).

Payment Terms

 

The payment terms in the Customer Agreements will be consistent with customary
payments terms for potash off-take agreements, provided that in no event shall
the payment terms allow for a payment period of longer than 30 days from
delivery.

Minimum Volumes

 

The customers under the Customer Agreements will be required to purchase in the
aggregate, in each calendar year during the Term, at least the following
quantities on a take or pay basis:

 

Years 1-3:

 

1,000,000 tonnes

  Year 4:   750,000 tonnes

  Year 5:   750,000 tonnes

  Year 6:   500,000 tonnes

  Year 7:   250,000 tonnes

 

For the avoidance of doubt, the volumes set forth above are the minimum volumes
that will be required. After Prospect has commenced production, its Board of
Directors may determine whether to seek additional off-take volumes.

Minimum Specifications

 

The Customer Agreements will include customary minimum specifications for
shipments. The Customer Agreements will also include terms describing the
consequences for the failure to meet the minimum specifications, which
consequences shall be no less favorable to Prospect than the following
consequences:

 

•    If during the Ramp Up Period (defined below), shipments fail to meet
minimum specifications, the parties will agree to customary and appropriate
price adjustments to reflect the lower quality. The "Ramp Up Period" shall have
the same definition as that used in the Senior Project Finance Bank Debt.

 

•    After the Ramp Up Period, if two of three consecutive deliveries fail to
meet the minimum specifications, the customer can suspend ordered but not yet
delivered deliveries. The customer will not be required to take a new delivery
until Prospect demonstrates (to the customer's reasonable satisfaction) that it
can meet the minimum specifications. If Prospect cannot demonstrate that it can
meet the minimum specifications within 180 days, the customer will have the
right to terminate the contract.

D-2

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Termination

 

In addition to a termination pursuant to "Minimum Specifications" above, the
only other termination provisions in the Customer Agreements will be
(a) termination by either party following a continuous, 12-month period of force
majeure, (b) for a material breach by the other party (which is uncured within
60 days after notification) or (c) upon a bankruptcy or insolvency-related event
of the other party.

Financial Guarantees

 

Customers will be required to provide a guarantee or standby L/C for the benefit
of Prospect that is reasonably satisfactory to Prospect's lenders. The L/C will
be for one year's forecasted purchases. Once this is in place, orders and
shipments can begin. Customers will be required to pay for each shipment using
irrevocable letters of credit payable at sight against bills of lading.
Customers will have a minimum credit rating of AA as defined by S&P or Moody's
and/or LCs of a similar credit quality.

Assignments

 

No assignment by the customer without prior written consent of Prospect other
than to a bank, financial institution, security trustee or security agent for a
bond or other financing.

Exclusivity

 

The Customer Agreements will be on a non-exclusive basis, and Prospect shall be
permitted to sell to any other party.

Governing Law

 

Delaware.

D-3

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EXHIBIT E-1

FORM OF SERIES A WARRANT

See attached.

E-1-1

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        THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE
OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS.

SERIES A WARRANT TO PURCHASE
COMMON STOCK OF PROSPECT GLOBAL RESOURCES INC.

                        , 2012

PROSPECT GLOBAL RESOURCES INC., a Nevada corporation (the "Company"), HEREBY
CERTIFIES THAT, for value received,                         , or registered
assigns, is entitled to purchase, in whole or part and from time to time, up to
[25,925,926](1) fully paid and non-assessable shares of Common Stock at a
purchase price of $[2.70](2) per share (the "Warrant Price"), in each case
subject to adjustment pursuant to Section 6. As used herein, the term "Common
Stock" means the Company's Common Stock, par value $0.001 per share, as
constituted on the date of original issue of this Warrant, and any shares of
capital stock or other property into which such shares of Common Stock may
thereafter be changed or that may be issued in respect of, in exchange for, or
in substitution of such Common Stock. As used herein, the term "Warrants" means
this Warrant and all warrants delivered in substitution or exchange for such
warrants. The term "Warrant" means one of the Warrants. This Warrant is being
issued in connection with the Securities Purchase Agreement dated as of
November             , 2012 by and among the Company, certain guarantors named
therein and the purchasers named therein for the purchase of $100,000,000 in 10%
Convertible Springing Second-Lien Notes Due 2020 and other securities and
interests of the Company (the "Securities Purchase Agreement"). Capitalized
terms not otherwise defined herein have the meanings set forth in the Securities
Purchase Agreement.

1.Term of Warrants; Exercise of Warrants.

        (a)   Subject to the terms hereof, the holder of this Warrant shall have
the right, at any time and from time to time, from and after the date hereof
until 11:59 PM New York City Time on the date that is one hundred and eighty
(180) days after the Closing Date (as defined in the Securities Purchase
Agreement), to purchase from the Company up to the number of shares of Common
Stock which such holder may at the time be entitled to purchase pursuant to this
Warrant, upon surrender to the Company, at its address for receipt of notices
pursuant

   

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        (1)    Note to Draft:    Number of shares exercisable represents the
aggregate number exercisable under all Series A Warrants; multiple warrants may
be issued to multiple Purchasers. If any of the events described in Section 6 of
this Warrant occur between the date of the Securities Purchase Agreement and the
date this Warrant is issued, the number of shares of Common Stock that this
Warrant is exercisable for shall be adjusted as if Section 6 were in effect as
of the date of the Securities Purchase Agreement—and such adjusted number shall
replace the number listed above in brackets in the definitive Warrant that is
issued.

        (2)    Note to Draft:    If any of the events described in Section 6 of
this Warrant occur between the date of the Securities Purchase Agreement and the
date this Warrant is issued, the Warrant Price shall be adjusted as if Section 6
were in effect as of the date of the Securities Purchase Agreement—and such
adjusted price shall replace the price listed above in brackets in the
definitive Warrant that is issued.

E-1-2

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to Section 9 hereof, of this Warrant, together with the Notice of Exercise form
at the end hereof duly completed and signed, accompanied by payment to the
Company of the Warrant Price for the number of shares with respect to which this
Warrant is being exercised.

        (b)   Payment of the aggregate Warrant Price shall be made by wire
transfer to an account specified in writing (including by email) by the Company.

        (c)   Upon such surrender of this Warrant and payment of such Warrant
Price as aforesaid, the Company shall issue and cause to be delivered with all
reasonable dispatch to or upon the written order of the holder of this Warrant
and in such name or names as such holder may designate, a certificate or
certificates for the number of full shares of Common Stock so purchased. Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become a holder of
such shares of Common Stock as of the close of business on the date of the
surrender of this Warrant and, if applicable, payment of the Warrant Price as
aforesaid, notwithstanding that the certificates representing such shares shall
not actually have been delivered or that the stock transfer books of the Company
shall then be closed. The Company hereby represents and warrants that any Common
Stock issued upon the exercise of this Warrant will be duly and validly
authorized and issued, fully paid and nonassessable and free from all taxes,
liens and charges (other than liens or charges created by the holder of the
Warrant or taxes in respect of any transfer occurring contemporaneously
therewith). The Company will at all times reserve and keep available out of its
authorized but unissued Common Stock, solely for the purpose of providing for
the exercise of this Warrant, the aggregate number of shares of Common Stock, as
the case may be, then issuable upon exercise of this Warrant. The Company will
(i) procure, at its sole expense, the listing of the Common Stock and other
securities issuable upon exercise of this Warrant, subject to issuance or notice
of issuance on all stock exchanges on which the Common Stock are then listed or
traded and (ii) maintain the listing of such Common Stock after issuance. The
Company will ensure that the Common Stock may be issued without violation of any
applicable law or regulation or of any requirement of any securities exchange on
which the Common Stock are listed or traded.

        (d)   This Warrant shall be exercisable, at the election of the holder
of this Warrant, either in full or from time to time in part. In the event that
this Warrant is exercised with respect to less than the aggregate number of
shares of Common Stock this Warrant then entitles such holder to purchase, the
Company shall deliver to or upon the order of such holder hereof a new Warrant
evidencing the rights of such holder to purchase the unpurchased shares of
Common Stock then called for by this Warrant, which new Warrant shall in all
other respects be identical with this Warrant. In the alternative, at the
request of the holder upon any partial exercise of this Warrant, appropriate
notation may be made on this Warrant and the same shall be returned to such
holder.

        2.     Payment of Taxes. The Company shall pay all documentary stamp
taxes, transfer tax or other incidental expenses if any, attributable to the
initial issuance of the shares of Common Stock upon exercise of this Warrant,
provided that the Company shall not be required to pay any tax or taxes which
may be payable with respect to any secondary transfer of a Warrant or the shares
of Common Stock issued upon exercise of any Warrant.

        3.     Transferability. The Warrants are not transferable without the
Company's written consent; provided, that the Warrants may be transferred in
whole or in part without the Company's written consent to any Affiliate (as
defined in the Securities Purchase Agreement) of the holder of this Warrant.

        4.     Exchange of Warrant Certificate. Any Warrant certificate may be
exchanged for another certificate or certificates entitling the holder thereof
to purchase a like aggregate number of shares of

E-1-3

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Common Stock as this certificate then entitles such holder to purchase. Any
holder of a Warrant desiring to exchange such Warrant certificate shall make
such request in writing delivered to the Company, and shall surrender, properly
endorsed, the certificate evidencing the Warrant to be so exchanged. Thereupon,
the Company shall execute and deliver one or more new Warrant certificates as so
requested.

        5.     Mutilated or Missing Warrant. In case any Warrant certificate
shall be mutilated, lost, stolen or destroyed, the Company shall, at the request
of the holder thereof, issue and deliver in exchange and substitution for and
upon cancellation of the mutilated certificate or certificates, or in lieu of
and substitution for the certificate or certificates lost, stolen or destroyed,
a new Warrant certificate or certificates of like tenor and representing an
equivalent right or interest, but only upon receipt of evidence satisfactory to
the Company of such loss, theft or destruction of such Warrant and indemnity, if
requested, satisfactory to the Company.

        6.     Adjustment of Warrant Price and Number of Shares. The number and
kind of securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events, as follows:

        (a)   (i) If and whenever on or after the date hereof the Company issues
or sells, or in accordance with Section 13.4 of the Securities Purchase
Agreement is deemed to have issued or sold, any shares of Common Stock
(including the issuance or sale of shares of Common Stock owned or held by or
for the account of the Company) for a consideration per share (the "New Issuance
Price") less than a price equal to the Warrant Price in effect immediately prior
to such issue or sale or deemed issuance or sale (such Warrant Price then in
effect is referred to as the "Applicable Price") (the foregoing a "Dilutive
Issuance"), other than distributions contemplated by Section 13.6 of the
Securities Purchase Agreement, then the Warrant Price then in effect shall be
reduced to a price determined in accordance with the following formula:

    R1 = R ×   OS + A

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OS + B    

        Where:

    R1 =   the Warrant Price in effect immediately after such Dilutive Issuance;
 
 
R =
 
the Warrant Price in effect immediately prior to such Dilutive Issuance;
 
 
OS =
 
the number of shares of Common Stock outstanding immediately prior to such
Dilutive Issuance (treating for this purpose as outstanding all shares of Common
Stock issuable upon exercise of Options outstanding immediately prior to such
issue (excluding the Apollo Warrants) or upon conversion or exchange of
Convertible Securities (excluding the Notes) outstanding immediately prior to
such issue (to the extent such Options or Convertible Securities have an
exercise or conversion price below R);
 
 
A =
 
the number of shares of Common Stock that would have been issued (or be deemed
to have been issued) if such Dilutive Issuance had been issued at a price per
share equal to R (determined by dividing the aggregate consideration received by
the Company in respect of such issue by R); and
 
 
B =
 
the number of shares of Common Stock issued (or deemed to have been issued) in
such Dilutive Issuance.

E-1-4

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For purposes of this Section 6(a)(i), clauses (A) through (D) of Section 13.4 of
the Securities Purchase Agreement shall apply to the adjustments contemplated in
this Section 6(a)(i), mutandis mutatis.

(ii)        In the event of any such Dilutive Issuance, the number of shares of
Common Stock issuable upon the exercise of this Warrant shall be increased to
the number obtained by dividing (x) the product of (1) the number of shares of
Common Stock issuable upon the exercise of this Warrant immediately prior to
such Dilutive Issuance, and (2) the Warrant Price in effect immediately prior to
such Dilutive Issuance, by (y) the new Warrant Price determined in accordance
with Section 6(a)(i).

        (b)   With respect to any event contemplated in Sections 13.5, 13.6,
13.7, 13.8, or 13.9 of the Securities Purchase Agreement, the adjustments
contemplated by such sections shall be applied to the Warrant Price as if all
references to Conversion Price in such sections were references to Warrant Price
and all reference to conversion of Notes in such sections were references to
exercise of the Warrant. The number of shares of Common Stock issuable upon the
exercise of this Warrant shall be adjusted to the number obtained by dividing
(x) the product of (1) the number of shares of Common Stock issuable upon the
exercise of this Warrant immediately prior to the event giving rise to such
adjustment, and (2) the Warrant Price in effect immediately prior to the event
giving rise to such adjustment, by (y) the new Warrant Price determined in
accordance with this Section 6(b).

        (c)   With respect to any event contemplated in Section 13.15 of the
Securities Purchase Agreement, the Warrant shall be exercisable for the same
type and amount of shares of stock, other securities or other property or assets
(including cash or any combination thereof) that the holder of this Warrant
would have been entitled to receive upon such Merger Event had such holder
exercised this Warrant immediately prior to such Merger Event. In determining
the kind and amount of shares of stock, other securities or other property or
assets (including cash or any combination thereof) receivable upon consummation
of such Merger Event, if the holders of Common Stock have the right to elect the
kind or amount of consideration receivable upon consummation of such Merger
Event, the holder of the Warrant shall have the right to make a similar election
upon exercise of this Warrant with respect to the number of shares of stock,
other securities or other property or assets (including cash or any combination
thereof) which the holder of this Warrant will receive upon exercise of this
Warrant.

        (d)   Sections 13.11, 13.12, 13.13, 13.14, 13.16, 13.17 and 13.18 of the
Securities Purchase Agreement shall apply to the adjustments contemplated in
this Section 6, mutandis mutatis.

        7.     Fractional Interests. The Company shall not be required to issue
fractional shares of Common Stock on the exercise of any Warrant. If any
fraction of a share would, except for the provisions of this Section 7, be
issuable on the exercise of this Warrant (or specified portions thereof), the
Company shall issue a full share of Common Stock in lieu of such fractional
share.

        8.     No Rights as Stockholder; Notices. Nothing contained in this
Warrant shall be construed as conferring upon the holder or its transferees any
rights as a stockholder of the Company, including the right to vote, receive
dividends, consent or receive notices as a stockholder with respect to any
meeting of stockholders for the election of directors of the Company or any
other matter. The Company will at no time close its transfer books against
transfer of this Warrant in any manner which interferes with the timely exercise
of this Warrant.

        9.     Notices. All notices and communications provided for hereunder,
unless otherwise specified, shall be in writing and shall be deemed delivered
(a) on a Business Day if sent by telecopy during the Business Day or on the next
Business Day if sent after a Business Day has ended or (b) the next

E-1-5

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Business Day after delivery to a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:

          (i)  if to any holder of Warrants, at the address specified for such
communications in the Securities Purchase Agreement, or at such other address as
holder of Warrants (or its transferee) shall have specified to the Company in
writing, and

         (ii)  if to the Company, to the Company at the address set forth below
or at such other address as the Company shall have specified to the holder of
the Warrant in writing:

Prospect Global Resources Inc.
1450 17th Street
Suite 1550
Denver, CO 80439
Attention: Chief Executive Officer

        with a copy (which shall not constitute notice) to:

Brownstein Hyatt Farber Schreck, LLP
410 17th Street
Suite 2200
Denver, CO 80439
Attention: Jeff Knetsch

        10.   Successors. This Warrant shall bind and inure to the benefit of
the Company and its permitted successors and assigns hereunder and, in addition,
shall inure to the benefit of and be enforceable by all holders from time to
time of the Warrants.

        11.   Applicable Law. This Warrant shall be enforced in accordance with,
and the rights of the Company and the holder of this Warrant shall be governed
by, the laws of the State of New York (without regard to conflicts of laws
principles thereof).

        12.   Benefits of this Agreement. Nothing in this Warrant shall be
construed to give to any person or corporation other than the Company and the
holder of this Warrant any legal or equitable right, remedy or claim under this
Warrant and this Warrant shall be for the sole and exclusive benefit of the
Company and the holder hereof.

        13.   Amendment. This Warrant may be amended by the Company in any
respect at any time or from time to time upon the written consent of the holder
of this Warrant.

        IN WITNESS WHEREOF, the Company has executed this Warrant.

    PROSPECT GLOBAL RESOURCES INC.
 
 
By:
 

--------------------------------------------------------------------------------

Patrick L. Avery,
Chief Executive Officer

E-1-6

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NOTICE OF EXERCISE

        (1)   The undersigned hereby elects to
purchase                        shares of Common Stock of PROSPECT GLOBAL
RESOURCES INC., pursuant to the provisions of Section 1 of the attached Warrant,
and tenders herewith payment of the purchase price for such shares in full.

        (2)   Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:

 
 
     

--------------------------------------------------------------------------------

(Name)
 
 
     

--------------------------------------------------------------------------------

(Name)

        (3)   Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned or in such other name as is
specified below:

 
 
     

--------------------------------------------------------------------------------

(Name)
 
 
 

--------------------------------------------------------------------------------

(Date)  

--------------------------------------------------------------------------------

(Signature)

E-1-7

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EXHIBIT E-2

FORM OF SERIES B WARRANT

See attached.

E-2-1

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        THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE
OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS.

SERIES B WARRANT TO PURCHASE
COMMON STOCK OF PROSPECT GLOBAL RESOURCES INC.
                        , 2012

        PROSPECT GLOBAL RESOURCES INC., a Nevada corporation (the "Company"),
HEREBY CERTIFIES THAT, for value received,                                    ,
or registered assigns, is entitled to purchase, in whole or part and from time
to time, up to [21,538,461](1) fully paid and non-assessable shares of Common
Stock at a purchase price of $[3.25](2) per share (the "Warrant Price"), in each
case subject to adjustment pursuant to Section 6. As used herein, the term
"Common Stock" means the Company's Common Stock, par value $0.001 per share, as
constituted on the date of original issue of this Warrant, and any shares of
capital stock or other property into which such shares of Common Stock may
thereafter be changed or that may be issued in respect of, in exchange for, or
in substitution of such Common Stock. As used herein, the term "Warrants" means
this Warrant and all warrants delivered in substitution or exchange for such
warrants. The term "Warrant" means one of the Warrants. This Warrant is being
issued in connection with the Securities Purchase Agreement dated as of
November     , 2012 by and among the Company, certain guarantors named therein
and the purchasers named therein for the purchase of $100,000,000 in 10%
Convertible Springing Second-Lien Notes Due 2020 and other securities and
interests of the Company (the "Securities Purchase Agreement"). Capitalized
terms not otherwise defined herein have the meanings set forth in the Securities
Purchase Agreement.

Section 1. Term of Warrants; Exercise of Warrants.

        (a)   Subject to the terms hereof, the holder of this Warrant shall have
the right, at any time and from time to time, from and after the date hereof
until 11:59 PM New York City Time on the date that is one hundred and eighty
(180) days after the Closing Date (as defined in the Securities Purchase
Agreement), to purchase from the Company up to the number of shares of Common
Stock which such holder may at the time be entitled to purchase pursuant to this
Warrant, upon surrender to the Company, at its address for receipt of notices
pursuant to Section 9 hereof, of this Warrant, together with the Notice of
Exercise form at the end hereof duly completed and signed, accompanied by

   

--------------------------------------------------------------------------------

        (1)    Note to Draft:    Number of shares exercisable represents the
aggregate number exercisable under all Series A Warrants; multiple warrants may
be issued to multiple Purchasers. If any of the events described in Section 6 of
this Warrant occur between the date of the Securities Purchase Agreement and the
date this Warrant is issued, the number of shares of Common Stock that this
Warrant is exercisable for shall be adjusted as if Section 6 were in effect as
of the date of the Securities Purchase Agreement—and such adjusted number shall
replace the number listed above in brackets in the definitive Warrant that is
issued.

        (2)    Note to Draft:    If any of the events described in Section 6 of
this Warrant occur between the date of the Securities Purchase Agreement and the
date this Warrant is issued, the Warrant Price shall be adjusted as if Section 6
were in effect as of the date of the Securities Purchase Agreement—and such
adjusted price shall replace the price listed above in brackets in the
definitive Warrant that is issued.

E-2-2

--------------------------------------------------------------------------------

payment to the Company of the Warrant Price for the number of shares with
respect to which this Warrant is being exercised.

        (b)   Payment of the aggregate Warrant Price shall be made by wire
transfer to an account specified in writing (including by email) by the Company.

        (c)   Upon such surrender of this Warrant and payment of such Warrant
Price as aforesaid, the Company shall issue and cause to be delivered with all
reasonable dispatch to or upon the written order of the holder of this Warrant
and in such name or names as such holder may designate, a certificate or
certificates for the number of full shares of Common Stock so purchased. Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become a holder of
such shares of Common Stock as of the close of business on the date of the
surrender of this Warrant and, if applicable, payment of the Warrant Price as
aforesaid, notwithstanding that the certificates representing such shares shall
not actually have been delivered or that the stock transfer books of the Company
shall then be closed. The Company hereby represents and warrants that any Common
Stock issued upon the exercise of this Warrant will be duly and validly
authorized and issued, fully paid and nonassessable and free from all taxes,
liens and charges (other than liens or charges created by the holder of the
Warrant or taxes in respect of any transfer occurring contemporaneously
therewith). The Company will at all times reserve and keep available out of its
authorized but unissued Common Stock, solely for the purpose of providing for
the exercise of this Warrant, the aggregate number of shares of Common Stock, as
the case may be, then issuable upon exercise of this Warrant. The Company will
(i) procure, at its sole expense, the listing of the Common Stock and other
securities issuable upon exercise of this Warrant, subject to issuance or notice
of issuance on all stock exchanges on which the Common Stock are then listed or
traded and (ii) maintain the listing of such Common Stock after issuance. The
Company will ensure that the Common Stock may be issued without violation of any
applicable law or regulation or of any requirement of any securities exchange on
which the Common Stock are listed or traded.

        (d)   This Warrant shall be exercisable, at the election of the holder
of this Warrant, either in full or from time to time in part. In the event that
this Warrant is exercised with respect to less than the aggregate number of
shares of Common Stock this Warrant then entitles such holder to purchase, the
Company shall deliver to or upon the order of such holder hereof a new Warrant
evidencing the rights of such holder to purchase the unpurchased shares of
Common Stock then called for by this Warrant, which new Warrant shall in all
other respects be identical with this Warrant. In the alternative, at the
request of the holder upon any partial exercise of this Warrant, appropriate
notation may be made on this Warrant and the same shall be returned to such
holder.

        Section 2. Payment of Taxes.    The Company shall pay all documentary
stamp taxes, transfer tax or other incidental expenses if any, attributable to
the initial issuance of the shares of Common Stock upon exercise of this
Warrant, provided that the Company shall not be required to pay any tax or taxes
which may be payable with respect to any secondary transfer of a Warrant or the
shares of Common Stock issued upon exercise of any Warrant.

        Section 3. Transferability.    The Warrants are not transferable without
the Company's written consent; provided, that the Warrants may be transferred in
whole or in part without the Company's written consent to any Affiliate (as
defined in the Securities Purchase Agreement) of the holder of this Warrant.

        Section 4. Exchange of Warrant Certificate.    Any Warrant certificate
may be exchanged for another certificate or certificates entitling the holder
thereof to purchase a like aggregate number of shares of Common Stock as this
certificate then entitles such holder to purchase. Any holder of a Warrant
desiring to exchange such Warrant certificate shall make such request in writing
delivered to the Company, and shall surrender, properly endorsed, the
certificate evidencing the Warrant to be so

E-2-3

--------------------------------------------------------------------------------

exchanged. Thereupon, the Company shall execute and deliver one or more new
Warrant certificates as so requested.

        Section 5. Mutilated or Missing Warrant.    In case any Warrant
certificate shall be mutilated, lost, stolen or destroyed, the Company shall, at
the request of the holder thereof, issue and deliver in exchange and
substitution for and upon cancellation of the mutilated certificate or
certificates, or in lieu of and substitution for the certificate or certificates
lost, stolen or destroyed, a new Warrant certificate or certificates of like
tenor and representing an equivalent right or interest, but only upon receipt of
evidence satisfactory to the Company of such loss, theft or destruction of such
Warrant and indemnity, if requested, satisfactory to the Company.

        Section 6. Adjustment of Warrant Price and Number of Shares.    The
number and kind of securities purchasable upon the exercise of this Warrant and
the Warrant Price shall be subject to adjustment from time to time upon the
happening of certain events, as follows:

        (a)   (i) If and whenever on or after the date hereof the Company issues
or sells, or in accordance with Section 13.4 of the Securities Purchase
Agreement is deemed to have issued or sold, any shares of Common Stock
(including the issuance or sale of shares of Common Stock owned or held by or
for the account of the Company) for a consideration per share (the "New Issuance
Price") less than a price equal to the Warrant Price in effect immediately prior
to such issue or sale or deemed issuance or sale (such Warrant Price then in
effect is referred to as the "Applicable Price") (the foregoing a "Dilutive
Issuance"), other than distributions contemplated by Section 13.6 of the
Securities Purchase Agreement, then the Warrant Price then in effect shall be
reduced to a price determined in accordance with the following formula:

    R1 = R ×   OS + A

--------------------------------------------------------------------------------

OS + B    

Where:

    R1 =   the Warrant Price in effect immediately after such Dilutive Issuance;
 
 
R =
 
the Warrant Price in effect immediately prior to such Dilutive Issuance;
 
 
OS =
 
the number of shares of Common Stock outstanding immediately prior to such
Dilutive Issuance (treating for this purpose as outstanding all shares of Common
Stock issuable upon exercise of Options outstanding immediately prior to such
issue (excluding the Apollo Warrants) or upon conversion or exchange of
Convertible Securities (excluding the Notes) outstanding immediately prior to
such issue (to the extent such Options or Convertible Securities have an
exercise or conversion price below R);
 
 
A =
 
the number of shares of Common Stock that would have been issued (or be deemed
to have been issued) if such Dilutive Issuance had been issued at a price per
share equal to R (determined by dividing the aggregate consideration received by
the Company in respect of such issue by R); and
 
 
B =
 
the number of shares of Common Stock issued (or deemed to have been issued) in
such Dilutive Issuance.

        For purposes of this Section 6(a)(i), clauses (A) through (D) of
Section 13.4 of the Securities Purchase Agreement shall apply to the adjustments
contemplated in this Section 6(a)(i), mutandis mutatis.

         (ii)  In the event of any such Dilutive Issuance, the number of shares
of Common Stock issuable upon the exercise of this Warrant shall be increased to
the number obtained by dividing (x) the product

E-2-4

--------------------------------------------------------------------------------

of (1) the number of shares of Common Stock issuable upon the exercise of this
Warrant immediately prior to such Dilutive Issuance, and (2) the Warrant Price
in effect immediately prior to such Dilutive Issuance, by (y) the new Warrant
Price determined in accordance with Section 6(a)(i).

        (b)   With respect to any event contemplated in Sections 13.5, 13.6,
13.7, 13.8, or 13.9 of the Securities Purchase Agreement, the adjustments
contemplated by such sections shall be applied to the Warrant Price as if all
references to Conversion Price in such sections were references to Warrant Price
and all reference to conversion of Notes in such sections were references to
exercise of the Warrant. The number of shares of Common Stock issuable upon the
exercise of this Warrant shall be adjusted to the number obtained by dividing
(x) the product of (1) the number of shares of Common Stock issuable upon the
exercise of this Warrant immediately prior to the event giving rise to such
adjustment, and (2) the Warrant Price in effect immediately prior to the event
giving rise to such adjustment, by (y) the new Warrant Price determined in
accordance with this Section 6(b).

        (c)   With respect to any event contemplated in Section 13.15 of the
Securities Purchase Agreement, the Warrant shall be exercisable for the same
type and amount of shares of stock, other securities or other property or assets
(including cash or any combination thereof) that the holder of this Warrant
would have been entitled to receive upon such Merger Event had such holder
exercised this Warrant immediately prior to such Merger Event. In determining
the kind and amount of shares of stock, other securities or other property or
assets (including cash or any combination thereof) receivable upon consummation
of such Merger Event, if the holders of Common Stock have the right to elect the
kind or amount of consideration receivable upon consummation of such Merger
Event, the holder of the Warrant shall have the right to make a similar election
upon exercise of this Warrant with respect to the number of shares of stock,
other securities or other property or assets (including cash or any combination
thereof) which the holder of this Warrant will receive upon exercise of this
Warrant.

        (d)   Sections 13.11, 13.12, 13.13, 13.14, 13.16, 13.17 and 13.18 of the
Securities Purchase Agreement shall apply to the adjustments contemplated in
this Section 6, mutandis mutatis.

        Section 7. Fractional Interests.    The Company shall not be required to
issue fractional shares of Common Stock on the exercise of any Warrant. If any
fraction of a share would, except for the provisions of this Section 7, be
issuable on the exercise of this Warrant (or specified portions thereof), the
Company shall issue a full share of Common Stock in lieu of such fractional
share.

        Section 8. No Rights as Stockholder; Notices.    Nothing contained in
this Warrant shall be construed as conferring upon the holder or its transferees
any rights as a stockholder of the Company, including the right to vote, receive
dividends, consent or receive notices as a stockholder with respect to any
meeting of stockholders for the election of directors of the Company or any
other matter. The Company will at no time close its transfer books against
transfer of this Warrant in any manner which interferes with the timely exercise
of this Warrant.

        Section 9. Notices.    All notices and communications provided for
hereunder, unless otherwise specified, shall be in writing and shall be deemed
delivered (a) on a Business Day if sent by telecopy during the Business Day or
on the next Business Day if sent after a Business Day has ended or (b) the next
Business Day after delivery to a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:

        (1)   if to any holder of Warrants, at the address specified for such
communications in the Securities Purchase Agreement, or at such other address as
holder of Warrants (or its transferee) shall have specified to the Company in
writing, and

E-2-5

--------------------------------------------------------------------------------

        (2)   if to the Company, to the Company at the address set forth below
or at such other address as the Company shall have specified to the holder of
the Warrant in writing:

Prospect Global Resources Inc.
1450 17th Street
Suite 1550
Denver, CO 80439
Attention: Chief Executive Officer

with a copy (which shall not constitute notice) to:

Brownstein Hyatt Farber Schreck, LLP
410 17th Street
Suite 2200
Denver, CO 80439
Attention: Jeff Knetsch

        Section 10. Successors.    This Warrant shall bind and inure to the
benefit of the Company and its permitted successors and assigns hereunder and,
in addition, shall inure to the benefit of and be enforceable by all holders
from time to time of the Warrants.

        Section 11. Applicable Law.    This Warrant shall be enforced in
accordance with, and the rights of the Company and the holder of this Warrant
shall be governed by, the laws of the State of New York (without regard to
conflicts of laws principles thereof).

        Section 12. Benefits of this Agreement.    Nothing in this Warrant shall
be construed to give to any person or corporation other than the Company and the
holder of this Warrant any legal or equitable right, remedy or claim under this
Warrant and this Warrant shall be for the sole and exclusive benefit of the
Company and the holder hereof.

        Section 13. Amendment.    This Warrant may be amended by the Company in
any respect at any time or from time to time upon the written consent of the
holder of this Warrant.

        IN WITNESS WHEREOF, the Company has executed this Warrant.

    PROSPECT GLOBAL RESOURCES INC.
 
 
By:
 
  

--------------------------------------------------------------------------------

Patrick L. Avery,
Chief Executive Officer

E-2-6

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NOTICE OF EXERCISE

        (1)   The undersigned hereby elects to
purchase                        shares of Common Stock of PROSPECT GLOBAL
RESOURCES INC., pursuant to the provisions of Section 1 of the attached Warrant,
and tenders herewith payment of the purchase price for such shares in full.

        (2)   Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:

 
 
  

--------------------------------------------------------------------------------

(Name)
 
 
  

--------------------------------------------------------------------------------

(Name)

        (3)   Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned or in such other name as is
specified below:

 
 
  

--------------------------------------------------------------------------------

(Name)
  

--------------------------------------------------------------------------------

(Date)
 
  

--------------------------------------------------------------------------------

(Signature)

E-2-7

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NOVEMBER 29, 2012

DISCLOSURE SCHEDULES
OF
THE COMPANY

        These Disclosure Schedules have been prepared in connection with the
Securities Purchase Agreement (the "Agreement"), dated as of November 29, 2012,
by and among Prospect Global Resources, Inc. (the "Company"), the Subsidiaries
of the Company set forth on the signature pages thereto (each, individually, a
"Guarantor," and collectively, the "Guarantors") and the Purchaser set forth on
the signature pages thereto ("Purchasers"). These Disclosure Schedules are
qualified in their entirety by reference to specific provisions of the
Agreement. The inclusion of any information in these Disclosure Schedules will
not be deemed an admission or acknowledgement that such information is required
to be listed in the Disclosure Schedules or that any such information is
material to the Company.

        The schedule numbers referenced in these Disclosure Schedules refer to
the corresponding sections of the Agreement to which these Disclosure Schedules
relate; provided, however, to the extent that an item in the Disclosure
Schedules is relevant and reasonably apparent on its face to apply to the
disclosure required by any other section of the Agreement that references a
different schedule contained in these Disclosure Schedules, such item shall be
deemed to be disclosed in the section of the Disclosure Schedules corresponding
to such other section of these Schedules, whether or not an explicit
cross-reference appears.

        The headings, if any, of the individual sections of these Disclosure
Schedules are inserted for convenience only and will not be deemed to constitute
a part thereof or a part of the Agreement. The annexes or exhibits to these
Disclosure Schedules form an integral part of these Disclosure Schedules and are
incorporated therein by reference as if set forth fully herein.

        Defined terms not defined herein shall have the meanings given to such
terms in the Agreement.

S-1

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SCHEDULES

6.9   Permits 6.22   Amendment Confirmation 7.2(a)   Capitalization 7.2(b)  
Pre-emptive Rights/Warrants/Options 7.5   Required Consents 7.18   Undisclosed
Liabilities 7.23   Compliance with ERISA 7.28   No Registration Rights 9.1  
Operation of Business 9.13   Preemptive Rights 9.16   Benefit 13.11   When No
Adjustment Required 15.15   Investments

S-2

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Schedule 6.9
Permits

 
 
Necessary Permit
  Applicable Date 1.   Air Quality Control Permit (Arizona Department of
Environmental Quality ("ADEQ"))   August 31, 2013
2.
 
Aquifer Protection Permit (ADEQ)
 
December 31, 2013
3.
 
Arizona Pollution Discharge Elimination System, 402 Permit for Stormwater
Discharge from Industrial Activities (ADEQ)
 
December 31, 2013
4.
 
Mineral Lease (Arizona State Land Department)
 
December 31, 2013
5.
 
Mined Land Reclamation Plan (Arizona State Mine Inspector)
 
December 31, 2013
6.
 
Major Plan Amendment (Apache County)
 
December 31, 2013
7.
 
Water and/or Wastewater Facilities—Approval to Construct (ADEQ)
 
December 31, 2014
8.
 
Operation and production permits unrelated to initial construction and outside
the PFNP boundaries, of the type customarily obtained by mine developers after
construction, and not reasonably likely to pose a material impediment to
operation of the mine following construction.
 
December 31, 2015

S-3

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Schedule 6.22
Amendment Confirmation

        Potash Supply Agreement, dated October 18, 2012 (the "Sichuan Offtake
Agreement"), among the Company, AWP and Sichuan Chemical Industry Holding
(Group) Co., Ltd.—To be amended or modified to specify that the Transaction and
any Securities acquired in connection with the Transaction will be excluded from
any calculation of Change of Control for purposes of Section 7 of the Sichuan
Offtake Agreement, and that any directors nominated or designated by the
Purchasers shall be deemed to have been directors of the Company as of the date
of the Sichuan Offtake Agreement.

        COR Advisors Investor Relations Consulting Agreement, dated July 5,
2011, between the Company and COR Advisors LLC, as amended on May 9, 2012 and
August 1, 2012—To be amended or modified to specify that the Transaction and any
Securities acquired in connection with the Transaction will be excluded from any
calculation of Change of Control under the agreement.

        Items set forth in Schedule 9.16 shall be resolved as contemplated by
Section 9.16 of the Agreement.

S-4

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Schedule 7.2(a)
Capitalization

Capitalization Summary Report

 
  Authorized   Shares
Outstanding   Shares
Outstanding
Fully Diluted   % Owned on
Fully Diluted
Basis  

Stock

                         

Common

    300,000,000     70,864,468     70,864,468     70.50 %

Preferred

    100,000,000     —     —     0.00 %                    

Total Stock

    400,000,000     70,864,468     70,864,468     70.50 %

Rights to Acquire Stock

                         

Options

    21,700,000           8,761,000     8.72 %

Warrants to Purchase

                         

Common

                20,889,534     20.78 %                        

Total Diluted Shares

                100,515,002     100.00 %

S-5

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Schedule 7.2(b)
Pre-emptive Rights/Warrants/Options

Warrants

        1.     As of the date hereof, the Company has issued warrants that are
exercisable into an aggregate of 20,889,534 shares of common stock.

Options

        1.     As of the date hereof, under the 2011 Employee Equity Incentive
Plan, 13,500,000 shares are authorized and 3,786,000 options are issued and
outstanding.

        2.     As of the date hereof, under the 2011 Director & Consultant
Equity Plan, 8,200,000 shares are authorized and 5,025,000 options are issued
and outstanding.

Other Equity Commitments

        1.     On August 1, 2012 the Company entered into a second amendment to
its investor relations consulting agreement with COR Advisors, LLC pursuant to
which COR has agreed to provide additional services to the Company following its
recent public offering and the Company agreed to pay a monthly retainer of
$20,000 to COR through July 4, 2015. The Company also agreed that the 75,000
shares payable quarterly to COR under the amended agreement would be paid
quarterly in advance rather than in arrears (other than the shares earned during
the quarter ended October 5, 2012, which were paid in arrears). Upon any change
of control transaction, the remaining shares to be issued for the term of the
amended agreement shall become immediately due to COR.

        2.     Pursuant to the Potash Royalty Purchase and Sale Agreement and
Option dated effective as of November 22, 2011 by and between the Company and
Grandhaven Energy ("Grandhaven"), the Company committed to maintain, and
currently maintains at all times, 25 million shares in reserve until the earlier
of (a) Grandhaven exercises its option or (b) such royalty is assigned to
American West Potash LLC ("AWP").

        3.     Pursuant to a Consulting Agreement by and between the Company and
the Thornton Group LLC ("Thornton") dated February 27, 2012 (the "Thornton
Consulting Agreement") upon the Company's entry into the potash supply agreement
with Sichuan Chemical on October 18, 2012 (the "Sichuan Offtake Agreement"), the
Company owed the Thornton Group a one-time success fee, payable in 50% cash and
50% common stock, equal to 2.5% of the average annual potash committed by
Sichuan multiplied by the world price of potash. Pursuant to the side letter
dated November 15, 2012 by and between the Company and Thornton, the success fee
payable to Thornton in connection with the Sichuan Offtake Agreement is (a) cash
payment of $3,875,625 (to be paid in two equal installments) and
(b) approximately 1,656,250 shares of the Company's common stock. As of the date
hereof, the Company paid the first installment of the cash payment on
November 16, 2012 and instructed its transfer agent to issue the Thornton Group
approximately 1,656,250 shares of common stock (for the avoidance of doubt such
shares have been included in the capitalization table on Schedule 7.2(a)). The
Company will pay the second (and final) installment of the cash payment no later
than February 28, 2013. Pursuant to the Thornton Consulting Agreement, the
Company pays Thornton a monthly retainer payment of $10,000 and such agreement
automatically renews for 6 month periods unless the Company terminates the
Agreement (which it may do so at any time) upon 30 days prior written notice. If
the Company terminates the Thornton Consulting Agreement, it will be subject to
the compensation described in Sections 3(c) and 3(e) therein. In addition to the
success fee paid to Thornton by the Company described above, the Thornton
Consulting Agreement provides for a success fee related to any other (i) offtake
arrangements entered into by the Company and third parties that have been
introduced to the Company by Thornton payable 50% in cash and 50% in shares of
the

S-6

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Company's common stock and (ii) 3% of the aggregate amount of investment (debt
or equity) in the Company made by an investor introduced to the Company by
Thornton payable in cash on the closing of such investment.

        4.     In connection with its underwritten offering of 15,000,000 shares
that closed on November 14, 2012 and pursuant to the Underwriting Agreement
dated November 8, 2012 by and among the Company, Dahlman Rose & Company, LLC,
Macquarie Capital (USA) Inc., Roth Capital Partners, LLC and Sterne, Agee &
Leach, Inc. (collectively, the "Underwriters"), the Company granted the
Underwriters a 30-day option to purchase up to an additional 2,250,000 shares of
the Company's common stock to cover over-allotments, if any.

        5.     The Company entered into a consulting agreement with Silver
Peaks, LLC dated November 12, 2012 under which Silver Peaks will receive
warrants to purchase 50,000 shares of the Company's common stock along with
payment of $1,000 per day on a monthly basis.

        6.     As disclosed in the Company's SEC Documents, such liens and/or
restrictions placed on the shares of the Company's Subsidiaries in connection
with the Karlsson Agreements.

        7.     The Company entered into a letter agreement dated November 14,
2012 (the "MCNC Agreement") with MC Namir Capital LLC ("MCNC") for services
related to offtake opportunities under which MCNC will receive warrants to
purchase 60,000 shares of common stock (which such amount is reflected in the
total number of warrants outstanding within these Disclosure Schedules). MCNC
will also receive on a monthly basis (in advance) warrants to purchase 10,000
shares of common stock for an initial term of 12 months.

        8.     Pursuant to the Letter of Agreement dated August 13, 2012 between
Crystal Research Associates, LLC ("CRA") and the Company, the Company agreed to
issue CRA one hundred fifty thousand (150,000) four year warrants in the
Company, at a purchase price equal to its current stock price as of August 13,
2012. The warrants will/have vest[ed] as follows: 25,000 shares on each of
September 13, 2012, October 13, 2012, November 13, 2012, December 13, 2012,
January 13, 2013, and February 13, 2013.

S-7

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Schedule 7.5
Required Consents

        1.     The office lease dated February 23, 2012 by and between the
Company as "Tenant" and CSHV 9595 Wilshire, LLC as "Landlord" for the Company's
Los Angeles office located at 9595 Wilshire Blvd., Beverly Hills, CA 90212,
provides that a transfer at any one time or from time to time of the lessor of a
controlling interest or fifty percent (50%) or more of an interest in Tenant
(whether stock, assets or other form of ownership or control) by any person(s)
or entity(ties) having an interest in ownership or control of Tenant at the
Lease Date shall be deemed to be a Transfer of the lease. Tenant shall not
transfer the lease without the prior written consent of the Landlord and Tenant
shall request such consent at least 30 days prior to the proposed commencement
date of the Transfer.

S-8

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Schedule 7.18
Undisclosed Liabilities

        1.     Pursuant to the Thornton Consulting Agreement by and between the
Company and Thornton, upon the Company's entry into Sichuan Offtake Agreement,
the Company owed the Thornton Group a one-time success fee, payable in 50% cash
and 50% common stock, equal to 2.5% of the average annual potash committed by
Sichuan multiplied by the world price of potash. Pursuant to the side letter
dated November 15, 2012 by and between the Company and Thornton, the success fee
payable to Thornton in connection with the Sichuan Offtake Agreement is (a) cash
payment of $3,875,625 (to be paid in two equal installments) and
(b) approximately 1,656,250 shares of the Company's common stock. As of the date
hereof, the Company paid the first installment of the cash payment on
November 16, 2012 and instructed its Transfer Agent to issue the Thornton Group
approximately 1,656,250 shares of common stock (for the avoidance of doubt such
shares have been included in the capitalization table on Schedule 7.2(a)). The
Company will pay the second (and final) installment of the cash payment no later
than February 28, 2013. Pursuant to the Thornton Consulting Agreement, the
Company pays Thornton a monthly retainer payment of $10,000 and such agreement
automatically renews for 6 month periods unless the Company terminates the
Agreement (which it may do so at any time) upon 30 days prior written notice. If
the Company terminates the Thornton Consulting Agreement, it will be subject to
the compensation described in Sections 3(c) and 3(e) therein. In addition to the
success fee paid to Thornton by the Company described above, the Thornton
Consulting Agreement provides for a success fee related to any other (i) offtake
arrangements entered into by the Company and third parties that have been
introduced to the Company by Thornton payable 50% in cash and 50% in shares of
the Company's common stock and (ii) 3% of the aggregate amount of investment
(debt or equity) in the Company made by an investor introduced to the Company by
Thornton payable in cash on the closing of such investment.

        2.     The below consulting or service agreements provide for success
fees based upon the occurrence of certain trigger events provided therein. As of
the date hereof, no triggering events for any of the respective success fees
listed below have occurred:

        (a)   In addition to the success fee paid to Thornton by the Company
described in Item 1 above, the Thornton Consulting Agreement by and between the
Company and the Thornton, provides for a success fee related to any other
(i) offtake arrangements entered into by the Company and third parties that have
been introduced to the Company by Thornton and (ii) 3% of the aggregate amount
of investment (debt or equity) in the Company made by an investor introduced to
the Company by Thornton. Such amount shall be payable in cash at the time of the
closing of such investment;

        (b)   Section III "Fees" of the MCNC Agreement provides for certain
trigger events for the success fees described therein;

        (c)   Section 3 "Compensation" of the Consulting Agreement with Pulsar
Capital Investimentos Ltda ("Pulsar") dated August 31, 2012 (the "Pulsar
Agreement") as further amended by the Amendment to Consulting Agreement
(undated) between the parties, provides for certain trigger events for the
success fees described therein. The Company also pays Pulsar a monthly retainer
fee of 15,000 pursuant to the Pulsar Agreement and after an initial one year
term the Pulsar Agreement extends for additional six month periods upon the
mutual consent of the parties;

        (d)   The sections entitled "Compensation" and "Warrants" of the
Relationship Agreement dated October 10, 2011 by and between the Company and
Oxford Metrica Limited, provide for certain success fees due to Oxford Metrica
by the Company upon the occurrence of certain trigger events described therein.
This agreement expires October 10, 2016;

S-9

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        (e)   While the Letter Agreement dated January 3, 2012 (the "NCCP Letter
Agreement") by and between the Company and New Century Capital Partners, Inc.
("NCCP"), expired pursuant to its terms on July 3, 2012, Section 5 provides a
12 month tail period, commencing on July 3, 2012, for certain success fees
described therein;

        (f)    Agreement by and between the Company and Roscoe Martin in
connection with executive search and placement services under which Roscoe
Martin is paid 25% (the "placement fee") of the base salary for any successful
placement with the Company. Such placement fee is comprised of cash and options.

        3.     As disclosed in the Company's SEC Documents, the Company owes
royalty payments to the following parties once certain levels of production or
gross revenues are achieved:

        (a)   Pursuant to Section 4 of the Termination of Management Services
Agreement dated August 1, 2012 by and between the Company and Buffalo
Management LLC ("Buffalo"), Buffalo receives a fee equal to 2% of the Company's
annual gross revenues provided in perpetuity.

        (b)   On November 22, 2011, the Company completed two transactions with
entities related to Hexagon Investments, LLC. As part of the consideration given
within those transactions, the Company must either (a) assign a 1% overriding
royalty interest or (b) settle the obligation through issuance of the Company's
common shares to a Hexagon related entity based on the estimated fair value of a
1% royalty interest at the time of exercise "Grandhaven Option."

        (c)   AWP granted The Karlsson Group the right to receive payments equal
to of 1% of the gross sales received by AWP from potash production from the real
property over which AWP currently has leases, licenses and permits for mining
purposes, capped at $75 million.

        (d)   In connection with AWP's exploration permits on state land in
Arizona, upon the conversion of such exploration permits into mining permits,
the State of Arizona will be entitled to receive customary future production
royalties for any potash production on state owned lands.

        (e)   Item 5 below is hereby incorporated by reference. The royalties on
the Company's gross sales are set forth in Article III of the Potash Sharing
Agreement (as defined below).

        4.     As disclosed in the Company's SEC Documents, in the event of a
sale of at least 50% of AWP or a merger of AWP with or into an unaffiliated
entity within four years of the closing date, the Company has agreed to pay The
Karlsson Group an additional payment equal to 15% of the net proceeds received
from the transaction, capped at $75 million.

        5.     In July 2011, AWP entered into a Potash Sharing Agreement dated
July 27, 2011 (the "Potash Sharing Agreement") with the mineral estate owners
party thereto covering 101 private mineral estate sections and related mineral
leases on approximately 63,000 acres adjacent to or in close proximity to AWP's
existing mineral rights. In May, 2012, AWP divested itself of four Arizona state
exploration permits covering the mineral estate of approximately 2,500 gross
acres, which were non-contiguous with our remaining sections. The Potash Sharing
Agreement provides that AWP will pay such mineral estate owners specified dollar
amounts during the development of AWP's mining and processing facility. The
related agreements with each counterparty to the Potash Sharing Agreement
include an annual base rent and a royalty for potash extracted from these
estates. Upon the Company's completion of specified targets set forth in the
Potash Sharing Agreement (which such targets have not yet been met as of the
date hereof), the Company's next payment to such mineral estate owners under the
Potash Sharing Agreement will be in the amount of $1.5 million in accordance
with Article III therein. The term of the Potash Sharing Agreement is perpetual
or until the earliest of cessation of operations by AWP for 180 consecutive days
or abandonment of the potash mining operation by AWP.

        6.     The Investor Relations Consulting Agreement dated July 5, 2011 by
and between the Company and COR Advisors LLC, as amended by Amendment #1 to
Investor Relations Consulting

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Agreement dated May 9, 2012 and as further amended by Amendment #2 to Investor
Relations Consulting Agreement dated August 1, 2012 provides that a 'Change of
Control' transaction shall be any transaction or series of transactions that
results in the sale of the Company or the issuance of common stock or securities
convertible into common stock that in the aggregate would result in a majority
of the Company's shares being owned or controlled by new investors or the change
in a majority of the Company's Board of Directors as constituted on the date
such agreement was signed. In the event that the Transaction triggers a "Change
of Control" as defined above, the remaining shares to be issued for the term
(750,000 shares as of the date hereof) shall become immediately due and payable.

        7.     The Company and its Subsidiaries are party to certain operating
leases for their office space and other ordinary course items that are not
reflected on the Reference Balance Sheet and are not expected to exceed an
aggregate amount of $750,000.

        8.     Item 7 under "Other Equity Commitments" of Schedule 7.2(b) is
hereby incorporated by reference.

        9.     To the extent not already disclosed in Item 2 above, the Company
is also obligated to pay monthly fees for services to certain third parties as
further described below:

        (a)   Independent Contractor Consulting Agreement by and between the
Company and Granite Peak Advisors LLC, the Company pays Granite Peak $20,000 a
month on or before the 15th business day of each month for advisory and
consulting services and such agreement expires on October 10, 2013 unless the
parties choose to extend such arrangement;

        (b)   Independent Contractor Agreement by and between the Company and
Mitsuru Kataoka, the Company pays Mr. Kataoka $5,000 per month paid by the
3rd of every month for consulting and advisory services. Such agreement is
terminable at any time by either party, for any reason, upon 30 day prior
written notice. In the event that the Company terminates, the Company shall pay
Mr. Kataoka two months worth of payment;

        (c)   Item 1 under "Other Equity Commitments" of Schedule 7.2(b) is
hereby incorporated by reference.

        (d)   Item 5 under "Other Equity Commitments" of Schedule 7.2(b) is
hereby incorporated by reference.

S-11

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Schedule 7.23
Compliance with ERISA

        1.     COBRA payments are included as severance benefits pursuant to
individual employment agreements, including those with Chad Brownstein, Brian W.
Wallace, Wayne Rich, and Gregory Dangler.

S-12

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Schedule 7.28
No Registration Rights

        The following Persons have the right to require the Company to register
securities for sale under the Securities Act pursuant to their respective
Registration Rights Agreements with the Company:

Person
  Shares  

The Karlsson Group

    5,605,834  

Delta Institutional LP

    209,900  

Delta Onshore LP

    98,800  

Delta Offshore Master Ltd

    867,771  

Very Hungry LLC

    4,841,608  

Avalon Portfolio, LLC

    1,900,000  

Buffalo Management LLC

    3,983,993  

Certain other purchasers in private placements representing aggregate shares of:

    3,331,628  

S-13

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Schedule 9.1
Operation of Business

        The Persons listed below, including their affiliates:

40 North Industries
Austin Powder Company / Jack Davis
Blackrock
Koch Fertilizers
Lion Gate Capital   LSB Industries
Trafalet
Very Hungry LLC
Emerald
SunAmerica

S-14

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Schedule 9.13
Contracts Obligating the Company to Issue Shares

        Consulting Agreement by and between Thornton Group LLC and the Company
effective as of February 27, 2012.

        Consulting Agreement by and between Pulsar Capital Investimentos Ltda
and the Company effective as of August 31, 2012.

        Amendment to Consulting Agreement by and between Pulsar Capital
Investimentos Ltda and the Company.

        Letter of Agreement by and between Crystal Research Associates, LLC and
the Company effective as of August 13, 2012.

        Agreement by and between New Century Capital Partners, Inc. and the
Company effective as of January 3, 2012.

        Relationship Agreement by and between Oxford Metrica Limited and the
Company dated as of October 10, 2011.

        Proposal and Fee Agreement for Representation by and between Brownstein
Hyatt Farber Schreck, LLP and the Company dated as of July 5, 2011.

        Agreement by and between Dahlman Rose & Co., LLC and the Company dated
as of June 30, 2011.

        Independent Contractor Agreement by and between Milton MacGregor and the
Company dated as of September 1, 2012.

        Agreement by and between MC Namir Capital LLC and the Company dated as
of November 14, 2012.

        Termination of the Management Services Agreement by and between Buffalo
Management LLC and Prospect Global Resources Inc., a Delaware corporation, dated
as of August 1, 2012.

        Independent Contractor Agreement by and between Silver Peaks, LLC and
the Company dated as of November 12, 2012.

        Letter dated as of November 15, 2012, confirming the success fee in the
Consulting Agreement by and between Thornton Group LLC and the Company dated
February 27, 2012, in connection with the Potash Supply Agreement entered into
on October 18, 2012, between Prospect Global Resources Inc. and Sichuan Chemical
Industry Holding (Group), Ltd.

        Investor Relations Consulting Agreement by and between COR Advisors LLC
and the Company effective as of July 5, 2011.

        Amendment #1 to Investor Relations Consulting Agreement by and between
COR Advisors LLC and the Company dated as of May 9, 2012.

        Amendment #2 to Investor Relations Consulting Agreement by and between
COR Advisors LLC and the Company dated as of August 1, 2012.

        Potash Royalty Purchase and Sale Agreement and Option by and between
Grandhaven Energy, LLC and the Company, effective as of November 22, 2011.

        In connection with its underwritten offering of 15,000,000 shares that
closed on November 14, 2012 and pursuant to the Underwriting Agreement dated
November 8, 2012 by and among the Company, Dahlman Rose & Company, LLC,
Macquarie Capital (USA) Inc., Roth Capital Partners, LLC and Sterne, Agee &
Leach, Inc. (collectively, the "Underwriters"), the Company granted the
Underwriters a

S-15

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30-day option to purchase up to an additional 2,250,000 shares of the Company's
common stock to cover over-allotments, if any.

        Item 1 to Schedule 13.11(e) is hereby incorporated by reference.

        Agreement by and between the Company and Roscoe Martin in connection
with executive search and placement services under which Roscoe Martin is paid
25% (the "placement fee") of the base salary for any successful placement with
the Company. Such placement fee is comprised of cash and options.

S-16

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Schedule 9.16
Employee Waivers to be Provided by Closing

1.Brian W. Wallace

•Employment Agreement dated as of June 13, 2012

•2011 Employee Equity Incentive Plan Option Agreement effective as of July 2,
2012, and executed on July 10, 2012

2.Chad Brownstein

•Employment Agreement dated as of August 1, 2012

3.Wayne E. Rich

•Amended and Restated Employment Agreement dated as of June 13, 2012

4.Patrick L. Avery

•Second Amended and Restated Employment Agreement dated as of June 13, 2012

5.Jonathan Bloomfield

•Second Amended and Restated Employment Agreement dated as of September 6, 2011,
with an effective date of September 1, 2010

6.Anita Marks

•Offer Letter dated as of August 20, 2012

7.Gregory Dangler

•Employment Agreement dated as of October 19, 2012

8.Hugh Eisler

•Offer Letter dated as of August 20, 2012

S-17

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Schedule 13.11(e)
When No Adjustment Required

        1.     Pursuant to warrant agreements to purchase common stock with the
holders below:

Name of Warrant holder
  Convertible into Number of
Shares Listed Below  

Very Hungry LLC(1)

    4,841,608  

Scott Reiman Trust(1)

    1,893,687  

Abas Holdings LLC

    11,765  

Adriana Milana

    11,765  

JPFP Family LLC

    25,000  

Rising Sun Ventures (AZ), LLC

    47,059  

Anthony Johnson

    11,765  

Junction Energy Partners, LLC

    117,648  

Mark Attanasio

    111,764  

Melissa Weiler

    29,412  

Jean-Marc Chapus

    23,529  

Michael Parks

    23,529  

Jonathan Insull

    11,765  

Daniel Attanasio

    5,882  

Michael Attanasio

    5,882  

Matthew Miller

    5,882  

Jason Breaux

    5,882  

Richard Stevenson

    5,882  

Christopher Wright

    5,882  

Delta Offshore Master LTD

    867,771  

Delta Institutional LP

    209,900  

Delta Onshore LP

    98,800  

Gary Jamell

    11,765  

John Grier

    235,295  

Dahlman Rose & Company, LLC

    70,588  

Avalon Portfolio, LLC

    1,900,000  

Crystal Research Associates, LLC

    150,000  

Buffalo Management LLC (and its assignees)(2)

    4,433,993  

The Karlsson Group, Inc. 

    5,605,834  

MC Namir Capital LLC

    60,000  

Silver Peaks LLC

    50,000          

    20,889,534  

--------------------------------------------------------------------------------

(1)Hexagon Investments LLC assigned its warrants to purchase common stock of the
Company to Very Hungry LLC.

(2)Buffalo Management LLC assigned an aggregate of 450,000 warrants to the
following parties: The Schnel Family Trust, Granite Peak Advisors LLC, Zasis LLC
and Santa Fe National Insurance Company.

S-18

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        2.     Options granted to the parties set forth below:

Participant Name
  Plan   Shares Granted  

Wayne Rich

  2011 Employee Equity Incentive Plan     1,000,000  

Brian Wallace

  2011 Employee Equity Incentive Plan     1,000,000  

Pat Avery

  2011 Employee Equity Incentive Plan     600,000  

Barry Munitz

  2011 Director and Consultant Equity Incentive Plan     400,000  

Barry Munitz

  2011 Director and Consultant Equity Incentive Plan     300,000  

Devon Archer

  2011 Director and Consultant Equity Incentive Plan     2,000,000  

Pat Avery

  2011 Employee Equity Incentive Plan     300,000  

Marc Holtzman

  2011 Director and Consultant Equity Incentive Plan     300,000  

Zhi Zhong Qui

  2011 Director and Consultant Equity Incentive Plan     200,000  

Jon Bloomfield

  2011 Employee Equity Incentive Plan     200,000  

Scott Reiman

  2011 Director and Consultant Equity Incentive Plan     200,000  

Gray Davis

  2011 Director and Consultant Equity Incentive Plan     200,000  

Chad Brownstein

  2011 Director and Consultant Equity Incentive Plan     200,000  

Conway Schatz

  2011 Director and Consultant Equity Incentive Plan     140,000  

Zhi Zhong Qui

  2011 Director and Consultant Equity Incentive Plan     140,000  

Marc Holtzman

  2011 Director and Consultant Equity Incentive Plan     140,000  

Ari Swiller

  2011 Director and Consultant Equity Incentive Plan     140,000  

Greg Dangler

  2011 Employee Equity Incentive Plan     140,000  

Greg Dangler

  2011 Employee Equity Incentive Plan     300,000  

Erich Kirsch

  2011 Employee Equity Incentive Plan     125,000  

Milton MacGregor

  2011 Director and Consultant Equity Incentive Plan     50,000  

Brownstein Hyatt Farber Schreck LLP

  2011 Director and Consultant Equity Incentive Plan     120,000  

Chad Brownstein

  2011 Director and Consultant Equity Incentive Plan     100,000  

Ari Swiller

  2011 Director and Consultant Equity Incentive Plan     100,000  

Jon Bloomfield

  2011 Employee Equity Incentive Plan     75,000  

Isaac Morgan

  2011 Employee Equity Incentive Plan     40,000  

Hugh Eisler

  2011 Director and Consultant Equity Incentive Plan     25,000  

Anita Marks

  2011 Director and Consultant Equity Incentive Plan     25,000  

Rick Chastain

  2011 Director and Consultant Equity Incentive Plan     25,000  

Tom Neuman

  2011 Director and Consultant Equity Incentive Plan     25,000  

Hugh Eisler

  2011 Director and Consultant Equity Incentive Plan     25,000  

Anita Marks

  2011 Director and Consultant Equity Incentive Plan     25,000  

Rick Chastain

  2011 Director and Consultant Equity Incentive Plan     25,000  

Tom Neuman

  2011 Director and Consultant Equity Incentive Plan     25,000  

Ron Justman

  2011 Director and Consultant Equity Incentive Plan     10,000  

Rick Marlowe

  2011 Director and Consultant Equity Incentive Plan     10,000  

Joe Hardin

  2011 Director and Consultant Equity Incentive Plan     10,000  

Nesrin Arafa

  2011 Employee Equity Incentive Plan     6,000  

Ron Justman

  2011 Director and Consultant Equity Incentive Plan     5,000  

Rick Marlowe

  2011 Director and Consultant Equity Incentive Plan     5,000  

Joe Hardin

  2011 Director and Consultant Equity Incentive Plan     5,000              

        8,761,000  

        3.     Pursuant to the Potash Royalty Purchase and Sale Agreement and
Option dated effective as of November 22, 2011 by and between the Company and
Grandhaven Energy ("Grandhaven") as further amended by the First Amendment to
Potash Royalty Purchase and Sale Agreement and Option, dated March 21, 2012,
between the parties, the Company committed to maintain, and currently maintains
at all times, 25 million shares in reserve until the earlier of (a) Grandhaven
exercises its option or (b) such royalty is assigned to American West Potash LLC
("AWP").

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        4.     The Investor Relations Consulting Agreement dated July 5, 2011 by
and between the Company and COR Advisors LLC, as amended by Amendment #1 to
Investor Relations Consulting Agreement dated May 9, 2012 and as further amended
by Amendment #2 to Investor Relations Consulting Agreement dated August 1, 2012
provides that a 'Change of Control' transaction shall be any transaction or
series of transactions that results in the sale of the Company or the issuance
of common stock or securities convertible into common stock that in the
aggregate would result in a majority of the Company's shares being owned or
controlled by new investors or the change in a majority of the Company's Board
of Directors as constituted on the date such agreement was signed. In the event
that the Transaction triggers a "Change of Control" as defined above, the
remaining shares to be issued for the term (750,000 shares as of the date
hereof) shall become immediately due and payable.

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Schedule 15.15
Investments

        Money market account in the Company's name at KeyBank.

S-21

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QuickLinks

Exhibit 10.1

TABLE OF CONTENTS
SECURITIES PURCHASE AGREEMENT
ARTICLE I AUTHORIZATION OF NOTES
ARTICLE II SALE AND PURCHASE OF SECURITIES
ARTICLE III CLOSING
ARTICLE IV JOINT CONDITIONS TO CLOSING
ARTICLE V COMPANY CONDITIONS TO CLOSING
ARTICLE VI PURCHASERS CONDITIONS TO CLOSING
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE COMPANY
ARTICLE VIII REPRESENTATIONS OF THE PURCHASERS
ARTICLE IX CERTAIN INTERIM COVENANTS
ARTICLE X TERMINATION
ARTICLE XI INDEMNIFICATION
ARTICLE XII VOTING
ARTICLE XIII CONVERSION
ARTICLE XIV INFORMATION COVENANTS
ARTICLE XV GENERAL COVENANTS
ARTICLE XVI EVENTS OF DEFAULT
ARTICLE XVII REMEDIES ON DEFAULT, ETC.
ARTICLE XVIII REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES; TRANSFER OF APOLLO
PREFERRED SHARES
ARTICLE XIX PAYMENTS ON NOTES
ARTICLE XX EXPENSES, ETC.
ARTICLE XXI MODIFICATION AND WAIVER
ARTICLE XXII NOTICES
ARTICLE XXIII GUARANTEE OF NOTES
ARTICLE XXIV CONFIDENTIAL INFORMATION
ARTICLE XXV SUBSTITUTION OF PURCHASER
ARTICLE XXVI MISCELLANEOUS
SCHEDULE A INFORMATION RELATING TO PURCHASERS
SCHEDULE B DEFINED TERMS
SCHEDULE C-1 TERMS OF PERMITTED PREFERRED STOCK
SCHEDULE C-2 TERMS OF PERMITTED JUNIOR DEBT
SCHEDULE C-3 TERMS OF NOTES IN KARLSSON DEFAULT
EXHIBIT A
[Form of Note]
Prospect Global Resources, Inc.
EXHIBIT B-1 PROSPECT GLOBAL RESOURCES INC. CONVERSION NOTICE
ACKNOWLEDGMENT
EXHIBIT B-2 PROSPECT GLOBAL RESOURCES INC. CONVERSION NOTICE
ACKNOWLEDGMENT
EXHIBIT C-1 FORM OF CERTIFICATE OF DESIGNATION
PROSPECT GLOBAL RESOURCES INC. Attachment "A" to Certificate of Designation
CERTIFICATE OF DESIGNATION of SERIES A PREFERRED STOCK of PROSPECT GLOBAL
RESOURCES INC. (Pursuant to the Nevada Revised Statutes 78.1955)
ARTICLE I Number of Shares
ARTICLE II Rank
ARTICLE III Dividends
ARTICLE IV Liquidation Preference
ARTICLE V Voting and Related Rights
ARTICLE VI Restrictions on Transfer
ARTICLE VII Conversion
ARTICLE VIII Redemption
ARTICLE IX Reacquired Shares
ARTICLE X Amendment of Certificate of Designation
EXHIBIT D MINIMUM OFFTAKE ARRANGEMENTS
Guidelines for the Minimum Off-Take Arrangements
EXHIBIT E-1 FORM OF SERIES A WARRANT
NOTICE OF EXERCISE
EXHIBIT E-2 FORM OF SERIES B WARRANT
SERIES B WARRANT TO PURCHASE COMMON STOCK OF PROSPECT GLOBAL RESOURCES INC. ,
2012
NOTICE OF EXERCISE
NOVEMBER 29, 2012 DISCLOSURE SCHEDULES OF THE COMPANY
SCHEDULES
Schedule 6.9 Permits
Schedule 6.22 Amendment Confirmation
Schedule 7.2(a) Capitalization
Schedule 7.2(b) Pre-emptive Rights/Warrants/Options
Schedule 7.5 Required Consents
Schedule 7.18 Undisclosed Liabilities
Schedule 7.23 Compliance with ERISA
Schedule 7.28 No Registration Rights
Schedule 9.1 Operation of Business
Schedule 9.13 Contracts Obligating the Company to Issue Shares
Schedule 9.16 Employee Waivers to be Provided by Closing
Schedule 13.11(e) When No Adjustment Required
Schedule 15.15 Investments