Document:

Exhibit 10.5

 

EXECUTION COPY

 

AMENDMENT NO. 1 TO

REGISTRATION RIGHTS AGREEMENT

 

This AMENDMENT NO. 1 (this “Amendment”) to REGISTRATION RIGHTS AGREEMENT, dated August 1, 2012, between Prospect Global Resources, Inc., a Nevada corporation (“Prospect”), and The Karlsson Group, Inc., an Arizona corporation (“Karlsson”), is made as of June 26, 2013.

 

RECITALS

 

WHEREAS, on May 30, 2012, Prospect issued to Karlsson a warrant to purchase up to 5,605,834 shares of common stock of Prospect (the “Original Warrant”); and

 

WHEREAS, on the date hereof, Prospect issued to Karlsson a warrant to purchase up to 3,000,000 shares of common stock of Prospect (the “Additional Warrant”)

 

                                                The parties hereby amend the Agreement as follows:

 

1.              Amendment.

 

a.              Amendment to Definition of Registrable Securities.  Section 1(i) of the Agreement is amended to read as follows:

 

“Registrable Securities” shall mean 8,605,834 shares of Common Stock initially issuable upon exercise of the Warrant and any additional securities issued pursuant to the terms of the Warrant.

 

b.              Amendment to Definition of Warrant.   Section 1(l) of the Agreement is amended to read as follows:

 

“Warrant” shall mean, collectively, the Original Warrant and the Additional Warrant.

 

2.              Miscellaneous.

 

a.              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.

 

b.              Relation to Original Warrant.  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 Warrant,” “hereunder,” “hereof,” or words of like import referring to the Agreement, shall mean and be a reference to the Agreement, as amended hereby.

 

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c.               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.

 

d.              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.

 

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

 

[Signature Page Follows]

 

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

 

	
 
    	
PROSPECT   GLOBAL RESOURCES, INC.,
    
	
 
    	
a   Nevada corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Damon Barber
    
	
 
    	
Name.   Damon Barber
    
	
 
    	
Title:   President, CEO and Secretary
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
THE   KARLSSON GROUP, INC.,
    
	
 
    	
an   Arizona corporation
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Anders Karlsson
    
	
 
    	
Name:   Anders Karlsson
    
	
 
    	
Title:   President
    

 

[Signature Page to Amendment to Registration Rights Agreement]Exhibit 10.6

 

EXECUTION COPY

 

SECOND AMENDMENT TO
 SUPPLEMENTAL PAYMENT AGREEMENT

 

This SECOND AMENDMENT TO SUPPLEMENTAL PAYMENT AGREEMENT (this “Amendment”) is made as of June 26, 2013 by and among Prospect Global Resources, Inc., a Delaware corporation (“Prospect”), American West Potash LLC, a Delaware limited liability company (the “Company”), and The Karlsson Group, Inc., an Arizona corporation (“Karlsson”), with respect to the following facts:

 

RECITALS

 

WHEREAS, Prospect, the Company, and Karlsson entered into that certain Supplemental Payment Agreement dated as of August 1, 2012, which was amended by that certain Amendment to Supplemental Payment Agreement dated as of April 15, 2013 (as amended, the “Agreement”);

 

WHEREAS, Prospect Global Resources, Inc., a Nevada corporation (“Prospect Nevada”), Prospect, the Company and Karlsson entered into that certain Extension Agreement dated as of April 15, 2013 (the “Extension Agreement”);

 

WHEREAS, Prospect Nevada, Prospect, the Company and Karlsson are entering into that certain Second Extension Agreement dated as of the date hereof (the “Second Extension Agreement”); and

 

WHEREAS, it is a condition to the effectiveness of the Second Extension Agreement that Prospect, the Company, and Karlsson amend the Agreement.

 

AGREEMENT

 

1.                                      Amendment to Section 1(a).  The words “fifth (5th) anniversary of the date hereof” in Section 1(a) of the Agreement are hereby replaced with the words “five and one half (51⁄2) year anniversary of the date hereof.”

 

2.                                      Miscellaneous.

 

a.                                      Reaffirmation of Representations and Warranties.  Each of Prospect and the Company makes and reaffirms as of the date hereof each of the representations and warranties set forth in Section 2 of the Agreement.

 

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 Original Agreement.  This Amendment constitutes an integral part of 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.                                      Successor 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]

 

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

 

	
 
    	
PROSPECT   GLOBAL RESOURCES INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Damon Barber
    
	
 
    	
Name.   Damon Barber
    
	
 
    	
Title:   President, CEO and Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
AMERICAN   WEST POTASH LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Damon Barber
    
	
 
    	
Name.   Damon Barber
    
	
 
    	
Title:   President, CEO and Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE   KARLSSON GROUP, INC.,
    
	
 
    	
an   Arizona corporation
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Anders Karlsson
    
	
 
    	
Name:   Anders Karlsson
    
	
 
    	
Title:   President
    

 

3Exhibit 10.7

 

EXECUTION COPY

 

AMENDMENT TO
 ESCROW AGREEMENT

 

This AMENDMENT TO ESCROW AGREEMENT (this “Amendment”) is made as of June 26, 2013, by and among The Karlsson Group, Inc., an Arizona corporation (“Lender”), Prospect Global Resources, Inc., a Nevada corporation (“Obligor”), and JPMorgan Chase Bank, N.A., a national banking association, as escrow agent (together with any successor in such capacity, the “Escrow Agent”), with respect to the following facts:

 

RECITALS

 

WHEREAS, Lender, Obligor and Escrow Agent entered into that certain Escrow Agreement dated as of April 15, 2013 (the “Original Agreement”);

 

WHEREAS, Lender, Obligor, and the other parties thereto entered into that certain Second Extension Agreement dated as of the date hereof (the “Second Extension”); and

 

WHEREAS, it is a condition to the effectiveness of the Second Extension that the parties hereto amend the Original Agreement.

 

NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

 

AGREEMENT

 

1.              Amendments.

 

a.              Amendment to Section 3(a). The first sentence of Section 3(a) is hereby deleted and replaced with the following:  “Escrow Agent shall hold as the Escrow Amount Escrow Deposits of up to Fourteen Million Sixty-Three Thousand Dollars ($14,063,000), which will be deposited with the Escrow Agent from time to time and in the amounts and on the dates set forth in Schedule I attached hereto. The parties acknowledge that as of June 26, 2013, Obligor has deposited Two Million Sixty-Three Thousand Dollars ($2,063,000).”

 

b.              Amendment to Section 3(b).  Section 3(b) of the Original Agreement is hereby amended and restated in its entirety to read as follows:  “(b) Receipt, investment and reinvestment of the Escrow Amount and any disbursements from the Escrow Account shall be confirmed by the Escrow Agent as soon as practicable by account statement sent (including electronically) to the Parties, or online statements, if available from Escrow Agent, and the Escrow Agent shall be notified by the Parties, as soon as reasonably practicable, after becoming aware of any discrepancies in any such account statement.”

 

c.               Amendment to Schedule 1.  Schedule 1 of the Original Agreement is hereby deleted in its entirety and replaced with Exhibit A attached hereto.

 

d.              Amendment to Schedule 2.  Schedule 2 of the Original Agreement is hereby deleted in its entirety and replaced with Exhibit B attached hereto.

 

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2.              Miscellaneous.

 

a.              Conversion to Cash Account. The parties hereto agree that the escrow account under the Original Agreement, as amended by this Amendment, shall be converted from an MMDA account to a Cash Compensation Account, which has no maximums on the number of distributions that can be made each month.

 

b.              No Other Amendment. Except as expressly amended in this Amendment, all provisions of the Original 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 Original Agreement.  In the event of a conflict between the terms and provisions of this Amendment and the terms and provisions of the Original Agreement, the provisions of this Amendment shall govern.

 

c.               Relation to Original Agreement.  This Amendment constitutes an integral part of the Original Agreement.  Upon the effectiveness of this Amendment, each reference in the Original Agreement to “this Agreement,” “hereunder,” “hereof,” or words of like import referring to the Original Agreement, shall mean and be a reference to the Original 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 California, without regard to its principles of conflicts of law.

 

[Signature Page Follows]

 

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

 

 

	
 
    	
LENDER:
    
	
 
    	
 
    
	
 
    	
THE   KARLSSON GROUP, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Anders Karlsson
    
	
 
    	
Name:   Anders Karlsson
    
	
 
    	
Title:   President
    
	
 
    	
 
    
	
 
    	
OBLIGOR:
    
	
 
    	
 
    
	
 
    	
PROSPECT   GLOBAL RESOURCES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Damon Barber
    
	
 
    	
Name:   Damon Barber
    
	
 
    	
Title:   President, CEO and Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ESCROW   AGENT:
    
	
 
    	
 
    
	
 
    	
JPMORGAN   CHASE BANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Sonny Liu
    
	
 
    	
Name:   Sonny Liu
    
	
 
    	
Title:   Vice President
    

 

[Signature Page –Amendment to Escrow Agreement]

 

 

Exhibit A

 

Schedule 1

 

	
Amount
    	
 
    	
Escrow Deposit Date
    
	
$2,000,000
    	
 
    	
Within two (2) Business Days of the Amendment   Date
    
	
50% of the proceeds from any Qualified   Financing net of any third party payments in satisfaction of transaction   expenses or fees/commissions with such Qualified Financing, not to exceed the   Funding Expense Cap (as such terms “Qualified Financing” and “Funding Expense   Cap” are defined in that certain Senior First Priority Secured Promissory   Note dated August 1, 2012 issued by Prospect Global   Resources, Inc., a Delaware corporation, in favor of Lender, as amended   by that certain Amendment to Senior First Priority Secured Promissory Note   dated as of April 15, 2013, and that certain Second Amendment to Senior   First Priority Secured Promissory Note dated as of June 24, 2013). For   the avoidance of doubt, Obligor shall only be obligated to deposit up to   $12,000,000 on or after June 26, 2013 (i.e. in addition to amounts   already deposited prior to June 26, 2013) with the Escrow Agent in   accordance with Section 3 of this Agreement.
    	
 
    	
Within one (1) Business Day of such   Qualified Financing
    

 

 

Exhibit B

 

Schedule 2

 

Approved Schedule

 

	
Category
    	
 
    	
Amount
    	
 
    	
Approved Vendors/Payees
    
	
Vendors   and Consultants for: Drilling; 43-101 Resource Report; Metallurgical and Rock   Mechanic testwork; a pre-feasibility study; 2013 and 2014 ASLD Permits; and   Definitive Feasibility Study (as defined in the Second Amendment to the   Senior First Secured First Priority Secured Promissory Note)
    	
 
    	
$12,563,000,   estimated breakdown as follows:

 

·                  $2,850,000 for expenses   related to Drilling

 

·                  $30,000 for expenses   related to 43-101 Resource Report

 

·                  $1,000,000 for expenses   related to metallurgical and rock mechanic test work

 

·                  $8,120,000 for expenses   related to completion of pre-feasibility and Definitive Feasibility Study

 

·                  $563,000 for expenses   related to 2013 and 2014 ASLD permits

 

The   parties acknowledge and agree that the above breakdown is only an estimate   and funds from any one category may be used in any other category. 
    	
 
    	
(i)TetraTech,   (ii) North Rim, (iii) JT Boyd, (iv) Novopro,   (iv) drilling contractors, (v) assaying labs, (vi) rock   mechanic testwork labs, (vii) metallurgical testwork labs,   (viii) vendors and contractors performing direct ancillary,   complementary or supplemental support work for any of the activities required   to complete a pre-feasibility study and a Definitive Feasibility Study,   (ix) any other consulting, engineering, or other firms performing   comparable, supplementary or complementary work with similar reputations and experience,   as determined by Obligor in its reasonable discretion, and (x) Arizona   State Land Department (“ASLD”).
    
	
Lease   Payments for Mineral Leases.
    	
 
    	
$500,000
    	
 
    	
The   Hortenstine Group (as defined in that certain Mineral Lease dated   as of July 27, 20111 by and between PAP & POP Family Ltd., a   Texas limited partnership, and 3MKJ, a Texas limited partnership   (collectively the “Hortenstine Group” or “Lessor”), and 
    

 

 

	
Category
    	
 
    	
Amount
    	
 
    	
Approved Vendors/Payees
    
	
 
    	
 
    	
 
    	
 
    	
American   West Potash, LLC, a Delaware limited liability company
    
	
Lease   Payments for Mineral Leases
    	
 
    	
$500,000
    	
 
    	
AIG (as defined   in that certain Potash Sharing Agreement (the “Agreement”) dated as of   July 27, 2011 between American West Potash LLC, a Delaware limited   liability company, and the following parties: (i) the SL Group,   (ii) American General Life Insurance Company, a Texas corporation   (“AIG”), and (iii) Pap and Pop Family Ltd., a Texas limited partnership,   and 3MKJ LP, a Texas limited partnership
    
	
Lease   Payments for Mineral Leases
    	
 
    	
$500,000
    	
 
    	
Spurlock   Lucking Group (as defined in that certain Mineral Lease dated   as of July 27, 2011 by and between James Marlin Gale, a married man,   David Glen Spurlock, a married man as his sole and separate property, Ransom   Theodore Spurlock Jr., a married man, Robert H. W.W. Spurlock, a married man,   Vincent Pride Spurlock, a married man and Nancy Elizabeth Winn, a married   woman and Evelyn Lucking, a married woman, (collectively the “Spurlock   Lucking Group” or “Lessor”), and American West Potash, LLC, a Delaware limited   liability Company)

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