Document:

Exhibit 10.2

 

REAFFIRMATION OF LOAN DOCUMENTS

 

THIS REAFFIRMATION OF LOAN DOCUMENTS (“Reaffirmation”), dated as of May 16, 2014, is executed in favor of The Karlsson Group, Inc., an Arizona corporation (“Karlsson”), by each of Prospect Global Resources, Inc., a Delaware corporation (“Prospect DE”), Prospect Global Resources, Inc., a Nevada corporation (“Parent”), Apache County Land & Ranch, LLC, a Nevada limited liability company (“Apache”), and American West Potash, LLC, a Delaware limited liability company (“AWP” and collectively with Prospect DE, Parent and Apache, the “Prospect Parties” and each a “Prospect Party”) with reference to the following facts:

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

SECTION 2.  Reaffirmation.  Each Prospect Party hereby (i) reaffirms and remakes on the date hereof each of the representations, warranties, covenants and agreements made by it in the Loan Documents, except to the extent such representations and warranties relate solely to an earlier date; (ii) acknowledges and admits its indebtedness and obligations under its respective Collateral Document(s) and under any other Loan Document to which such Prospect Party is a party, as the same have heretofore been, and may from time to time hereafter be, supplemented, amended, modified, restated or extended; and (iii) acknowledges and admits that it has no defenses, offsets or claims whatsoever in respect thereof, in each case notwithstanding the transactions effected by the Amendment Documents.

 

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

 

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

 

2

 

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

 

	
 
    	
KARLSSON:
    
	
 
    	
 
    
	
 
    	
The   Karlsson Group, Inc.
    
	
 
    	
an   Arizona corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael Stone
    
	
 
    	
Name:
    	
Michael   Stone
    
	
 
    	
Its:
    	
CFO   and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
PROSPECT   DE:
    
	
 
    	
 
    
	
 
    	
Prospect   Global Resources, Inc.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gregory Dangler
    
	
 
    	
Name:
    	
Gregory   Dangler
    
	
 
    	
Its:
    	
President,   CEO and Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
PARENT:
    
	
 
    	
 
    
	
 
    	
Prospect   Global Resources, Inc.,
    
	
 
    	
a   Nevada corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gregory Dangler
    
	
 
    	
Name:
    	
Gregory   Dangler
    
	
 
    	
Its:
    	
President,   CEO and Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
AWP:
    
	
 
    	
 
    
	
 
    	
American   West Potash, LLC
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gregory Dangler
    
	
 
    	
Name:
    	
Gregory   Dangler
    
	
 
    	
Its:
    	
President,   CEO and Secretary
    

 

3

 

	
 
    	
APACHE:
    
	
 
    	
 
    
	
 
    	
Apache   County Land & Ranch, LLC
    
	
 
    	
a   Nevada limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gregory Dangler
    
	
 
    	
Name:
    	
Gregory   Dangler
    
	
 
    	
Its:
    	
President,   CEO and Secretary
    

 

4Exhibit 10.3

 

AMENDMENT NO. 1 TO
 SEVENTH EXTENSION AGREEMENT

 

AMENDMENT NO. 1, dated as of May 16, 2014 (this “Amendment”), to SEVENTH EXTENSION AGREEMENT, dated as of April 29, 2014 (as amended from time to time, the “Agreement”), by and among The Karlsson Group, Inc., an Arizona corporation (“Karlsson”), on the one hand, and Prospect Global Resources, Inc., a Delaware corporation (“Prospect DE”), Prospect Global Resources, Inc., a Nevada corporation (“Parent”), Apache County Land & Ranch, LLC, a Nevada limited liability (“Apache”) and American West Potash, LLC, a Delaware limited liability company (“AWP” and collectively with Prospect DE, Parent and Apache the “Prospect Parties” and each a “Prospect Party”) on the other hand, is made with reference to the following facts:.

 

RECITALS

 

A.                                    The Prospect Parties and Karlsson are parties to the Agreement.

 

B.                                    The Prospect Parties have requested that Karlsson amend the deadline for making payment of the Karlsson Legal Expenses (as defined in the Agreement) pursuant to Section 7 of the Agreement by seven (7) days until May 23, 2014.

 

The parties hereby amend the Agreement as follows:

 

1.                                      Amendments.

 

a.                                      Section 7 of the Agreement is hereby amended to change the reference therein to “May 16 , 2014” to read instead “May 23, 2014.”

 

b.                                      Section 5(a) of the Agreement is hereby amended to change the reference therein to “May 16, 2014” to read instead “May 23, 2014”.

 

c.                                       The Agreement is amended by the addition of a new Section 25 thereto, which shall read in its entirety as follows:

 

“Access to and Copying of Books and Records; Access to Officers.  With respect to all such books, records, and other documents and instruments of the Prospect Parties, whether paper or electronic, and all portions thereof, as are not subject to attorney-client privilege  (collectively, the “Applicable Documents”), each of the Prospect Parties agrees: (i) to make available to Karlsson and/or its designee(s), and to instruct such Prospect Party’s counsel, advisors, agents, officers and current or former employees to make available to Karlsson and/or its designee(s), all Applicable Documents; and (ii) to allow Karlsson and/or its designee(s) to inspect and copy, at Karlsson’s sole expense, any Applicable Document(s).  Each Prospect Party additionally agrees to instruct its respective officers, directors, auditors, counsel and agents to make themselves available to Karlsson and/or its

 

 

designee(s) at reasonable times during normal business hours, following reasonable advance request, and to provide to Karlsson and/or its designee(s) all information related to the business of such Prospect Party (other than the contents of communications subject to attorney-client privilege) as Karlsson and/or its designee may request.

 

2.                                      Miscellaneous.

 

a.                                      Representations and Warranties.

 

(i)                                     Officer.  Gregory Dangler is at the date hereof the duly-appointed and acting President, CEO and Secretary of each of the Prospect Parties;

 

(ii)                                  Enforceability.  This Amendment has been duly authorized, and the Agreement, as amended by this Amendment, constitutes the legal, valid and binding obligation of the Prospect Parties, enforceable against each of the Prospect Parties in accordance with its terms.;

 

b.                                      No Other Amendment. Except as expressly amended in this Amendment, all provisions of the Agreement shall remain in full force and effect, and the parties thereto and hereto shall continue to have all their rights and remedies under the Agreement. In the event of a conflict between the terms and provisions of this Amendment and the terms and provisions of the Agreement, the provisions of this Amendment shall govern.

 

c.                                       Relation to Agreement. This Amendment constitutes an integral part of the Agreement. Capitalized terms not otherwise defined herein shall have the respective meanings given them in the Agreement. Upon the effectiveness of this Amendment, each reference in the Agreement to “this Agreement,” “hereunder,” “hereof,” or words of like import referring to the Agreement, shall mean and be a reference to the Agreement, as amended hereby.

 

d.                                      Successors and Assigns. This Amendment shall be binding on and shall inure to the benefit of the parties hereto and their respective successors and assigns except as otherwise provided herein.

 

e.                                       Counterparts. This Amendment may be executed by the parties hereto on any number of separate counterparts, any of which may be executed and transmitted by facsimile, and each of which shall be deemed an original and all of which, taken together, shall be deemed to constitute one and the same instrument.

 

f.                                        Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of Arizona, without regard to its principles of conflicts of law.

 

[Signature Page Follows]

 

2

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date first above written.

 

	
 
    	
KARLSSON:
    
	
 
    	
 
    
	
 
    	
The   Karlsson Group, Inc.
    
	
 
    	
an   Arizona corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael Stone
    
	
 
    	
Name:
    	
Michael   Stone
    
	
 
    	
Its:
    	
CEO   and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PROSPECT   DE:
    
	
 
    	
 
    
	
 
    	
Prospect   Global Resources, Inc.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gregory Dangler
    
	
 
    	
Name:
    	
Gregory   Dangler
    
	
 
    	
Its:
    	
President,   CEO and Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PARENT:
    
	
 
    	
 
    
	
 
    	
Prospect   Global Resources, Inc.,
    
	
 
    	
a   Nevada corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gregory Dangler
    
	
 
    	
Name:
    	
Gregory   Dangler
    
	
 
    	
Its:
    	
President,   CEO and Secretary
    

 

3

 

	
 
    	
AWP:
    
	
 
    	
 
    
	
 
    	
American   West Potash, LLC
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gregory Dangler
    
	
 
    	
Name:
    	
Gregory   Dangler
    
	
 
    	
Its:
    	
President,   CEO and Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
APACHE:
    
	
 
    	
 
    
	
 
    	
Apache   County Land & Ranch, LLC
    
	
 
    	
a   Nevada limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gregory Dangler
    
	
 
    	
Name:
    	
Gregory   Dangler
    
	
 
    	
Its:
    	
President,   CEO and Secretary
    

 

4

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