Document:

Exhibit 10.1

Exhibit
10.1

COMMON STOCK PURCHASE AGREEMENT

THIS COMMON STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of November 22,
2011 by and between VERY HUNGRY LLC and any assignees or transferees thereof (the
“Purchaser”) and PROSPECT GLOBAL RESOURCES INC., a Nevada corporation (the
“Company”). Purchaser and the Company are sometimes each referred to herein as a
“Party” and collectively as the “Parties.”

ARTICLE I.

DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for
all purposes of this Agreement, the following terms have the meanings set forth in this Section
1.1:

“Business Day” means any day except any Saturday, any Sunday, any day which is
a federal legal holiday in the United States or any day on which banking institutions in the
State of Colorado are authorized or required by law or other governmental action to close.

“Closing” means the closing of the purchase and sale of the Shares pursuant to
Section 2.1.

“Closing Date” means the Business Day on which this Agreement has been executed
and delivered by the applicable parties thereto, and all conditions precedent to (i) the
Purchaser’s obligations to pay the Purchase Price and (ii) the Company’s obligations to
deliver the Shares, in each case, have been satisfied or waived.

“Common Stock” means the common stock of the Company, par value $0.001 per
share, and any other class of securities into which such securities may hereafter be
reclassified or changed.

“Purchase Documents” means this Agreement, the Warrant and the Registration
Rights Agreement.

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political subdivision
thereof.

“Purchase Price” means $10,999,998.75 in cash.

“Registration Rights Agreement” means the Registration Rights Agreement dated
the date hereof between the Company and the Purchaser and any holder of the Warrant.

“Securities Act” means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.

“Warrant” means the Warrant to purchase 2,588,235 shares of Common Stock dated
the date hereof issued by the Company to the Purchaser or its designee(s).

 

 

 

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrant.

ARTICLE II.

PURCHASE AND SALE

2.1 Closing.

(a) On the Closing Date, upon the terms and subject to the conditions set forth herein,
substantially concurrent with the execution and delivery of this Agreement by the parties hereto,
the Company agrees to sell, and the Purchaser agrees to purchase, 2,588,235 shares of Common Stock
(the “Shares”) at a purchase price of $4.25 per Share. The Purchaser shall deliver to
the Company, via wire transfer of immediately available funds, the Purchase Price and the Company
shall deliver to the Purchaser the Shares. Upon satisfaction of the covenants and conditions set
forth herein, the Closing shall occur at the offices of the Company or such other location as the
parties shall mutually agree.

2.2 Deliveries.

(a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered
to the Purchaser the following:

(i) this Agreement duly executed by the Company;

(ii) the Warrant duly executed by the Company; and

(iii) the Registration Rights Agreement duly executed by the Company.

(b) On or prior to the Closing Date, the Purchaser shall deliver or cause to be
delivered to the Company the following:

(i) this Agreement duly executed by the Purchaser;

(ii) the Registration Rights Agreement duly executed by the Purchaser and any
holder of the Warrant; and

(iii) the Purchase Price by wire transfer to the account as specified in writing
by the Company.

2.3 Closing Conditions. 

(a) The obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:

(i) the accuracy in all material respects when made and on the Closing Date of
the representations and warranties of the Purchaser contained herein (unless as of a
specific date therein);

(ii) all obligations, covenants and agreements of the Purchaser required to be
performed at or prior to the Closing Date shall have been performed; and

(iii) the delivery by the Purchaser of the items set forth in Section 2.2(b) of
this Agreement.

 

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(b) The respective obligations of the Purchaser hereunder in connection with the
Closing are subject to the following conditions being met:

(i) the accuracy in all material respects when made and on the Closing Date of
the representations and warranties of the Company contained herein (unless as of a
specific date therein);

(ii) all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed; and

(iii) the delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to the Purchaser as follows on the date hereof and
on the Closing Date:

3.1 Organization of the Company. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. The Company has full
corporate power and authority to own, use, lease and license its assets and its properties and to
carry on its business as it is now being conducted.

3.2 Power and Authority. The Company has full power and authority to enter into the
Purchase Documents and to consummate the transactions contemplated hereby and thereby. The Company
has duly and validly executed and delivered the Purchase Documents. Each of the Purchase Documents
constitute legal, valid and binding obligations of the Company, enforceable in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance or similar laws in effect which affect the
enforcement of creditors’ rights generally and by equitable limitations on the availability of
specific remedies.

3.3 No Conflict. The execution and delivery by the Company of the Purchase Documents
and the consummation of the transactions contemplated hereby will not conflict with or result in
any violation of or default under (with or without notice or lapse of time, or both) or give rise
to a right of termination, cancellation, modification or acceleration of any obligation or loss of
any benefit under (i) any provision of the Certificate of Incorporation of the Company, as amended,
or Bylaws of the Company, (ii) any mortgage, indenture, lease, contract or other agreement or
instrument, permit, concession, franchise or license to which the Company or any of its properties
or assets is subject, or (iii) any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company or its properties or assets.

3.4 Government Approvals. Except as may be required by any state “blue sky” laws, no
authorization, consent, approval, license, qualification or formal exemption from, nor any filing,
declaration or registration with, any court, governmental agency, regulatory authority or political
subdivision thereof, any securities exchange or any other Person is required in connection
with the execution, delivery or performance by the Company of this Agreement or the business of the
Company.

 

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3.5 Liabilities. To the best of the Company’s knowledge, it has no material
contingent liabilities not disclosed in the financial statements filed with the Securities and
Exchange Commission.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser hereby represents and warrants to the Company as follows on the date hereof and
on the Closing Date:

4.1 Power and Authority. The Purchaser has full power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby and thereby. The Purchaser
has duly and validly executed and delivered this Agreement. Each Purchase Document constitutes
legal, valid and binding obligations of the Purchaser, enforceable in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization, fraudulent conveyance or similar laws in effect which affect the enforcement of
creditors’ rights generally and by equitable limitations on the availability of specific remedies.

4.2 Risk. The Purchaser recognizes that the purchase of the Shares involves a high
degree of risk in that: (i) the Company is a development stage business with only limited operating
history and will require additional operating funds from time to time; (ii) an investment in the
Company is highly speculative and only investors who can afford the loss of their entire investment
should consider investing in the Company and the Shares; (iii) the Purchaser may not be able to
liquidate his, her or its investment; (iv) transferability of the Shares is extremely limited; and
(v) in the event of a disposition of the Shares, the Purchaser could sustain the loss of his, her
or its entire investment.

4.3 Accredited Investor. The Purchaser is an “accredited investor” as such term is
defined in Rule 501 of Regulation D promulgated under the Securities Act, and the Purchaser is able
to bear the economic risk of a loss of its entire investment in the Shares.

4.4 Investment Experience. The Purchaser has prior investment experience, including
investment in non-listed and unregistered securities.

4.5 Residency. The Purchaser’s principal residence address is in the jurisdiction set
forth on the signature page of this Agreement.

4.6 Information. The Purchaser acknowledges and agrees that the Purchaser has been
provided access to and has had the opportunity to discuss with the Company and review any
information the Purchaser desires in order to analyze the Company’s business, management, financial
affairs, prospects and the terms and conditions of this transaction with the Company. The
Purchaser has such knowledge and experience in financial and business matters that the Purchaser is
capable of evaluating the merits of this transaction. The Purchaser has had the opportunity to
seek independent advice in connection with such evaluation and analysis.

 

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4.7 Protection of Interests; Exempt Offering. The Purchaser by reason of the
Purchaser’s business or financial experience has the capacity to protect the Purchaser’s own
interests in connection with the transaction contemplated hereby. The Purchaser agrees that the
Purchaser will not sell or otherwise transfer the Shares unless they are registered under the
Securities Act or unless an exemption from such registration is available.

4.8 Investment Intent. The Purchaser understands that the Shares have not been
registered under the Securities Act by reason of a claimed exemption under the provisions of the
Securities Act which depends, in part, upon the Purchaser’s investment intention. In this
connection, the Purchaser is acquiring the Shares as principal for its own account and not with a
view to or for distributing or reselling the Shares or any part thereof in violation of the
Securities Act or any applicable state securities law, has no present intention of distributing any
of the Shares in violation of the Securities Act or any applicable state securities law and has no
direct or indirect arrangement or understandings with any other persons to distribute or regarding
the distribution of the Shares in violation of the Securities Act or any applicable state
securities law (this representation and warranty not limiting the Purchaser’s right to sell the
Shares in compliance with applicable federal and state securities laws).

4.9 Restricted Securities. The Purchaser understands that there currently is a
limited public market for the Shares and that Rule 144 promulgated under the Securities Act
requires, among other conditions, a one-year holding period prior to the resale (in limited
amounts) of securities acquired in a non-public offering without having to satisfy the registration
requirements under the Securities Act. The Purchaser consents that the Company may, if it desires,
permit the transfer of the Shares out of the Purchaser’s name only when the Purchaser’s request for
transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that
neither the sale nor the proposed transfer results in a violation of the Securities Act or any
state securities or “blue sky” laws (collectively, the “Securities Laws”). The Purchaser
agrees to hold the Company and its members, managers, officers, employees, controlling persons and
agents and their respective heirs, representatives, successors and assigns harmless and to
indemnify them against all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by the Purchaser contained in this Agreement or any sale or distribution by
the Purchaser in violation of the Securities Laws. The Purchaser understands and agrees that in
addition to restrictions on transfer imposed by applicable Securities Laws, the transfer of the
Shares will be restricted by the terms of this Agreement.

4.10 Legends. The Purchaser consents to the placement of a legend on any certificate
evidencing the Shares that the Shares have not been registered under the Securities Laws and
setting forth or referring to the restrictions on transferability and sale thereof contained in
this Agreement. The Purchaser is aware that the Company will make a notation in its appropriate
records with respect to the restrictions on the transferability of the Shares and may place
additional legends to such effect on the Purchaser’s certificate(s) for the Shares.

ARTICLE V.

MISCELLANEOUS

5.1 Lockup. The Purchaser agrees to enter into a customary “lock-up” agreement with
respect to the Shares and the Warrant Shares as required by the underwriter(s) of a public offering
of the Company’s securities.

 

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5.2 Fees and Expenses. Each Party shall pay all costs and expenses that it incurs
with respect to the preparation, negotiation, execution and delivery of this Agreement and the
other documents and agreements entered into in connection herewith. The Company shall pay all
transfer agent fees, stamp taxes and other taxes and duties levied in connection with the delivery
of the Shares to the Purchaser.

5.3 Entire Understanding. This Agreement, together with the schedules hereto, and the
Registration Rights Agreement set forth the entire agreement and understanding of the Parties and
supersede any and all prior agreements, arrangements and understandings among the Parties, and
there are no other prior written or oral agreements, undertakings, promises, warranties, or
covenants respecting such subject matter not expressly set forth herein and therein.

5.4 Further Assurances. Each of the Parties agrees to execute and deliver (or cause
to be executed and delivered) such additional documents and instruments and to perform such
additional acts as may be necessary and appropriate to effectuate, carry out, and perform all of
the terms, provisions, and conditions of this Agreement.

5.5 Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of: (a) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature page of this Agreement prior to 5:30
p.m. (mountain time) on a Business Day, (b) the next Business Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile number set forth on the
signature page of this Agreement on a day that is not a Business Day or later than 5:30 p.m.
(mountain time) on any Business Day, (c) the second Business Day following the date of mailing, if
sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the
party to whom such notice is required to be given. The address for such notices and communications
shall be as set forth on the signature page of this Agreement.

5.6 Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Colorado without giving effect to the principles
of conflicts of law thereof.

5.7 Replacement of the Shares. If any certificate evidencing the Shares is mutilated,
lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and
substitution therefor, a new certificate, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction. The applicant for a new certificate under such
circumstances shall also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement certificate.

5.8 Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the same instrument and
shall become effective when one or more counterparts have been signed by each of the Parties and
delivered (including by facsimile) to the other Parties.

5.9 Recitals. The recitals set forth above are hereby incorporated into this
Agreement and made a binding part hereof.

 

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5.10 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION
BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE
GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND
EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

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

	 	 	 	 	 
	PROSPECT GLOBAL RESOURCES INC.,	 	Address for Notice:
	a Nevada corporation

	 	600 17th St. Suite 2800 South
	 

	 	 	 	Denver, CO 80202
	By:

	 	/s/ Patrick L. Avery 

	 	Attn: Patrick Avery
	 

	 	Name: Patrick L. Avery
	 	Fax: 720-294-0402
	 

	 	Title: Chief Executive Officer
	 	email: pavery@prospectgri.com

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

Brownstein Hyatt Farber Schreck, LLP

410 Seventeenth Street, Suite 2200

Denver, CO 80202-4437

Attn: Jeff Knetsch

	 	 	 	 	 
	VERY HUNGRY LLC	 	Address for Notice:
	 

	 	 	 	730 17th Street Suite 800
	By:

	 	/s/ Brian Fleischmann
	 	Denver CO 80202
	 

	 	 

By: Brian Fleischmann
Title: Manager
	 	Attn: Brian Fleischmann

Fax: 303-571-1221
	 

	 	 
	 	email: bff@hexagoninc.com

 

8Exhibit 10.2

Exhibit 10.2

POTASH ROYALTY

PURCHASE AND SALE AGREEMENT

AND OPTION

THIS POTASH ROYALTY PURCHASE AND SALE AGREEMENT AND OPTION (this “Agreement”), dated
effective as of November 22, 2011 (the “Effective Date”), is between PROSPECT GLOBAL
RESOURCES INC., a Nevada corporation (“Seller”), 600 17th Street, Suite 2800 South, Denver,
Colorado 80202, and GRANDHAVEN ENERGY, LLC, a Wisconsin limited liability company, with an address
of 730 17th Street, Suite 800, Denver, Colorado 80202 (“Buyer”). Seller and Buyer are
sometimes referred to in this Agreement, collectively, as the “Parties,” and individually,
as a “Party.”

Recitals

A. Seller is currently the owner of 11,000,000 Class A Units of American West Potash, LLC, a
Delaware limited liability company (“AWP”). AWP owns the mineral leases of fee lands and
fee mineral interests located in Apache County, Arizona, as described in Parts I, II and III of
Exhibit A attached hereto. AWP owns or controls mineral exploration permits on State of Arizona
lands located in Apache County, Arizona, as described in Part IV of Exhibit A attached hereto
(“State Exploration Permits”), which grant AWP the exclusive right to obtain mineral leases
from the State of Arizona.

B. Seller desires to sell and assign to Buyer, and Buyer desires to purchase and acquire from
Seller, royalty interests and overriding royalty interests in the fee and state lands now or
hereafter owned or controlled by AWP, in accordance with the terms and conditions of this
Agreement.

Agreement

IN CONSIDERATION OF the mutual premises and covenants contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties
hereby agree as follows:

Capitalized terms used but not defined in this Agreement shall have the meanings defined in
the form of Overriding Royalty Interests Assignment and Royalty Deed attached as Exhibit B hereto
(the “Assignment”).

1. Purchase and Sale of Royalty Interests. In accordance with the terms and conditions of
this Agreement, Buyer agrees to purchase and acquire, and Seller agrees to cause AWP to sell,
grant, assign, transfer and convey to Buyer, the following (collectively, the “Royalty
Interests”):

(a) an overriding royalty interest equal to one percent (1%) of 100% (subject to adjustment of
such percentage as provided in Section 3(c) below) of the Gross Value (without deductions of any
kind or character) of all Minerals extracted and sold from the Private Leased
Premises, such one percent overriding royalty interest not to be proportionately reduced in
any way, regardless of the interest owned by AWP in the Private Leases or the extent of the Mineral
interest covered by the Private Leased Premises (the “Private Lease ORI”);

 

 

 

(b) a perpetual non-participating production royalty equal to one percent (1%) of 100%
(subject to adjustment of such percentage as provided in Section 3(c) below) of the Gross Value
(without deductions of any kind or character) of all Minerals extracted and sold from the Mineral
Interest Lands, such one percent overriding royalty interest not to be proportionately reduced in
any way, regardless of the extent of the Mineral interest owned by Assignor in the Mineral Interest
Lands (the “Mineral Interest Royalty”); and

(c) an overriding royalty interest equal to one percent (1%) of a 100% (subject to adjustment
of such percentage as provided in Section 3(c) below) of the Gross Value (without deductions of any
kind or character) of all Minerals extracted and sold from the State Leased Premises (as and when
State Leases are obtained under each of the State Exploration Permits), such one percent overriding
royalty interest not to be proportionately reduced in any way, regardless of the interest owned by
Assignor in the State Leases or the extent of the Mineral interest covered by the State Leased
Premises (the “State Lease ORI”).

2. Purchase Price. The “Purchase Price” for the Royalty Interests shall be
$25,000.

3. Delivery of Assignments or Shares. Seller and Buyer agree that Seller will use
its best efforts to cause AWP to convey any Royalty Interests not conveyed to Buyer at Closing as
soon as possible after the Closing, or provide optional substitute consideration to Buyer, as
follows:

(a) Seller shall be solely responsible for obtaining any consents required to make the
Assignments. After Closing, Buyer shall continue to have the Share Option as provided in Section
3(e) for the period therein provided.

(b) Seller shall cause AWP to execute, acknowledge and convey to Buyer an Assignment of the
State Lease ORI in each State Lease granted by the State of Arizona to AWP under each of the State
Exploration Permits, as and when the State Leases are issued to AWP. Buyer shall have the option
to receive substitute Royalty Interests as provided in Section 3(c) and the Share Option as
provided in Section 3(e) for the period therein provided.

(c) If, at any time after the Closing date (i) the Arizona State Land Department declines to
issue any State Lease to AWP with respect to any State Exploration Permit, or (ii) the Arizona
State Land Department terminates any State Exploration Permit, or (iii) the Arizona State Land
Department refuses to consent to the assignment of any Royalty Interests in any State Lease, or
requires any reduction of or imposes any condition on such Royalty Interests as a condition of
approving an assignment of such Royalty Interests or approving any royalty reduction or other
action with respect to a State Lease, or (iv) if AWP has not been issued all of the State Leases
and conveyed to Buyer all Royalty Interests in the entire State Leased Premises on or before March
1, 2013, Buyer shall have the option to receive substitute Royalty Interests. Buyer shall have the
option to receive a substitute Assignment of additional Private Lease ORI, Mineral Interest
Royalty, or State Lease ORI, or combination, in
the same number of acres in portions of the Private Leased Premises, Mineral Interest Lands
and State Leased Premises under State Leases issued to AWP and selected by Buyer, nearest to the
affected State Lease or State Leases, in a percentage sufficient to compensate Buyer for the
reduced Royalty Interests in the affected State Lease. The percentage of such additional Royalty
Interests in particular AWP Interests shall be selected by Buyer. Without limiting the foregoing,
if AWP has not been issued any State Leases as of the date that AWP conveys to Buyer the Private
ORI under Section 3(a), at any time prior to the assignment of any portion of the State Lease ORI
to Buyer, Buyer may elect to receive an Assignment of 1.388% Private Lease ORI in all of the
Private Leased Premises and a 1.388% Mineral Interest Royalty in all of the Mineral Interest Lands,
in substitution for its right to receive the State Lease ORI.

 

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(d) The form of the Assignment attached as Exhibit B is drafted in contemplation of
assignments of the Private Lease ORI, Mineral Interest Royalty and State Lease ORI. Because the
assignments of Private Lease ORI, Mineral Interest Royalty and State Lease ORI may be made in
separate instruments, Buyer may prepare a form of assignment for any particular assignment made
hereunder with only the provisions from the Assignment relevant to the type of Royalty Interests
assigned.

(e) If AWP fails for any reason to deliver Assignments of all of the Royalty Interests (or
Assignments of any additional or substitute Royalty Interests if elected by Buyer as provided in
Section 3(c)) on or before December 31, 2013 (the “Share Option Termination Date,” Buyer
shall have the option exercisable at any time thereafter to elect to receive additional common
shares of Seller on the same terms as under the Common Stock Purchase Agreement dated as of
November 22, 2011 between Seller and Very Hungry LLC (“Share Purchase Agreement”),
including the price per share, registration rights and other terms (the “Share Option”).
In lieu of paying cash compensation for such shares, Buyer shall reconvey to AWP without warranty
some or all of the Royalty Interests previously conveyed to Buyer (as described below) and/or
relinquish its rights hereunder to some or all of the Royalty Interests not conveyed to Buyer, as
elected by Buyer in the notice of exercise of the Share Option. Buyer shall have this option to
acquire shares in its sole discretion, exercisable by notice to Seller at any time on or after the
Share Option Termination Date (“Share Option Exercise Date”). Buyer may elect in lieu of
exercising the Share Option to retain the portion of the Royalty Interests previously conveyed and
to require Seller to continue to use its best efforts to cause AWP to convey the remaining Royalty
Interests to Buyer, or may elect to retain all or any portion of the Royalty Interests received
prior to the Share Option Exercise Date and receive shares under the Share Option for the remainder
of the Royalty Interests. Buyer may elect to exercise the Share Option one or more times on or
after the Closing date and prior to the Share Option Termination Date, as to any portion selected
by Buyer of the Royalty Interests not timely received at Closing (or in the case of State Lease
ORI, not received on or before March 1, 2013). The number of shares to which Buyer is entitled if
it exercises the Share Option shall be determined by dividing the value of the Royalty Interests by
the price per share under the Share Purchase Agreement. The value of the Royalty Interests for
purposes of determining the number of shares shall be 1% of the fair market value of the AWP
Interests (including any mine or other improvements thereon), without consideration of any
encumbrance of the AWP Interests, determined as of the Share Option Exercise Date. Such fair
market value shall be determined by the parties. In the event the parties are unable to agree to
the fair market value within 90 days after the Share Option Exercise Date, the fair market value
shall be determined by a valuation expert or appraiser with substantial
experience in the potash industry, which expert shall be independent of both parties and
agreed by the parties. Fees of the expert shall be split by the parties.

 

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4. Seller Representations. Seller hereby represents and warrants to Buyer the following,
and shall represent and warrant that the following remain true and correct at and as of Closing,
and as of the date of each assignment to Buyer of a portion of the Royalty Interests:

(a) Seller is a corporation and AWP is a limited liability company validly existing and in
good standing under the laws of the State of Nevada and Delaware, respectively, and Seller and AWP
are qualified to do business in the State of Arizona.

(b) Seller and AWP each has all requisite power and authority to carry on its business as
presently conducted. Seller has all requisite power and authority to enter into this Agreement,
and perform its obligations under this Agreement. The consummation of the transactions
contemplated by this Agreement will not violate nor be in conflict with any provision of Seller’s
articles of organization and bylaws, or any agreement or instrument to which Seller is a party or
is bound, or any judgment, decree, order, writ, injunction, statute, rule or regulation applicable
to Seller. The execution, delivery and performance of this Agreement, and the transactions
contemplated hereby, have been duly and validly authorized by all requisite action on the part of
Seller.

(c) AWP’s interests in the Mining Leases, Mineral Interest Lands and State Exploration Permits
(the “AWP Interests”), have been created by valid and sufficient conveyances properly
recorded in the records of Apache County, Arizona and the Arizona State Land Department as to the
State Exploration Permits.

(d) To the best of Seller’s knowledge there are no actions, suits or proceedings pending or
threatened in writing against Seller or AWP or the AWP Interests, in any court or by or before any
tribal, federal, state, municipal, or other governmental agency that would adversely affect the
Royalty Interests or impair Seller’s ability to consummate the transactions contemplated hereby.

(e) To the best of Seller’s knowledge, neither Seller nor AWP has received notice of or has
knowledge of any pending claim or audit against Seller from any applicable taxing authority for
assessment of taxes with respect to the AWP Interests, or Seller or AWP, and all such taxes that
are due as of the Effective Date have been paid in full.

(f) The AWP Interests are not subject to any calls on Mineral production, agreements involving
any prepayments for Mineral production, or any other agreements pursuant to which Seller is
obligated to deliver Minerals, or the proceeds of the sale thereof, without receiving payment
therefor at or after the time of delivery, other than the royalties and payments provided by the
Underlying Agreements (“Underlying Agreements” shall also include, as used in this
Agreement, the State Exploration Permits).

(g) To the best of Seller’s knowledge, there exist no facts relating to the condition, use or
operation of any of the AWP Interests, and the release or disposal, if any, of hazardous substances
on or under the lands subject to the AWP Interests, that could constitute or result in a violation
of any environmental law, or result in a suit, action, claim, investigation or
inquiry under or with respect to such environmental law, or cause or result in the incurrence
of any obligation for remediation under such environmental law. To Seller’s knowledge, the AWP
Interests are not subject to any existing, pending or threatened investigation or inquiry by any
governmental authority or to any obligation for remediation under any applicable environmental law.

 

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(h) (i) Seller is not in breach of any of the Underlying Agreements and, to the best of
Seller’s knowledge, no other person is in breach of any Underlying Agreements; (ii) no event has
occurred and no circumstance exists that would, in any material respect, contravene, conflict with,
or result in a violation or breach of, or give Seller or any other person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or performance of, or to
cancel, terminate or modify any of the Underlying Agreements, (iii) all rentals, royalties and
other payments payable or due under the Underlying Agreements as of the Effective Date have been
duly and properly paid, and all minimum exploration work has been performed or cash paid in lieu
thereof, and all other terms and conditions necessary to keep the AWP Interests in force and effect
as of the Effective Date have been fully performed under each Underlying Agreement, and (iv) each
Underlying Agreement is in full force and effect.

(i) Other than surface disturbance allowed under existing permits on lands used in current
exploration operations on the AWP Interests, to the best of Seller’s knowledge, there is no
unreclaimed land within the AWP Interests that: (i) AWP is obligated by law or contract to reclaim;
or (ii) has not been reclaimed in accordance with all applicable requirements of each regulatory
authority having jurisdiction over the AWP Interests.

(j) To the best of Seller’s knowledge, the operation of the AWP Interests has been in
compliance with all applicable laws, rules and regulations.

(k) To the best of Seller’s knowledge, all rentals, royalties and other payments payable or
due under the Underlying Agreements, as of the Effective Date, have been duly and properly paid,
and all conditions necessary to keep the Underlying Agreements in force and effect have been fully
performed. To Seller’s knowledge, all operating expenses and other costs and expenses attributable
to Seller’s interests in the Underlying Agreements due and payable prior to the Effective Date,
have been duly and properly paid in all material respects by Seller in accordance with applicable
law.

(l) To the best of Seller’s knowledge, all permits from governmental agencies having
jurisdiction in connection with the exploration and development of the AWP Interests have been
obtained and all obligations thereunder fully performed and will continue to be timely and fully
performed.

5. Buyer Representations. Buyer hereby represents and warrants to Seller that the
following representations and warranties shall be true and correct at and as of Closing:

(a) It is duly organized, validly existing and in good standing under the laws of the state of
Wisconsin.

(b) It has all requisite power and authority to carry on its business as presently conducted,
to enter into this Agreement, and perform its obligations under this Agreement. The
consummation of the transactions contemplated by this Agreement will not violate nor be in
conflict with any provision of its articles of organization or organizational documents, or any
agreement or instrument to which it is a party or is bound, or any judgment, decree, order, writ,
injunction, statute, rule or regulation applicable to it. The execution, delivery and performance
of this Agreement, and the transactions contemplated hereby, have been duly and validly authorized
by all requisite action on its part.

 

5

 

6. Closing. The purchase and sale of the Royalty Interests pursuant to this Agreement (the
“Closing”) shall occur on the second business day after notice by Buyer (which notice may
be given upon unilateral demand for Closing by Buyer, in Buyer’s sole discretion), or such later
date as Buyer and Seller may mutually agree in writing, at the offices of Buyer at the address of
Buyer first set forth above, or if the parties mutually agree by fax or electronically. At the
Closing, the following shall occur:

(a) Seller shall cause AWP to execute a joinder to this Agreement that binds AWP (in addition
to Seller) to perform all of Seller’s covenants hereunder and makes to Buyer all of the
representations and warranties of Seller hereunder that relate to AWP or the AWP Interests;

(b) Seller shall cause AWP to execute, acknowledge and deliver to Buyer one or more
Assignments of the Private Lease ORI in the entire Private Leased Premises and an Assignment of the
Mineral Interest Royalty in all of the Mineral Interest Lands;

(c) Seller shall cause AWP to execute, acknowledge and deliver to Buyer one or more
Assignments of the State Lease ORI, for any portion of the State Leased Premises, if any, for which
AWP has been issued State Leases;

(d) On or before the Closing date, Buyer shall wire the Purchase Price to AWP to an account
designated by AWP prior to the Closing date. Seller acknowledges that upon delivery by Buyer of
the Purchase Price, Buyer shall have no remaining obligations under this Agreement that Buyer has
not performed, and that Seller shall have the sole remaining obligations hereunder to convey the
Royalty Interests and as otherwise provided under this Agreement; and

(e) AWP shall execute and deliver to Buyer an Affidavit of Non-Foreign Status in form
acceptable to Buyer.

There are no conditions to Seller’s obligations at Closing other than payment of the Purchase Price
to AWP at Closing.

7. Disclaimer of Other Warranties. Other than the representations set forth in Section 4
hereof and in each assignment of Royalty Interests made hereunder, this Agreement and the
Assignment is made without any other representation or warranty, either expressed or implied.

8. Legal and Beneficial Title to Royalty Interests. Legal title to the Royalty Interests
shall be transferred from AWP to Buyer upon the later of the Closing date hereof or the date of the
Assignment of such interests, but effective as of the Effective Date. Seller shall vote and
take all actions under AWP’s operating agreement, the Underlying Agreements and other applicable
agreements necessary to preserve the AWP Interests and Buyer’s Royalty Interests therein, and shall
hold such interest, including any accrued production royalties, in trust for the benefit of Buyer,
until AWP has assigned the entire Royalty Interests to Buyer.

 

6

 

9. Transfer Taxes. Buyer shall be responsible for any and all state and local taxes or
fees imposed on the transfer of the Royalty Interests.

10. Compliance with Underlying Agreements. Until such time as AWP has made Assignments of
all of the Royalty Interests, Seller shall cause AWP to comply with all obligations under the
Underlying Agreements at all times in order to maintain the Underlying Agreements in good standing
and avoid any default thereunder, including by timely performing all work required under the
Underlying Agreements, and timely paying all rental fees, advance royalty payments, payments in
lieu of annual minimum work expenditures, and other payments required the terms of the Underlying
Agreements or by applicable law. Assignor shall timely file with the Arizona State Land Department
and any other applicable state agencies all reports and other information required by the State
Exploration Permits or State Leases or by applicable law.

11. Guaranty of Seller. Until such time as AWP has made Assignments of all of the Royalty
Interests, Seller unconditionally guarantees the prompt and complete payment and performance when
due, whether by acceleration or otherwise, of all obligations and liabilities, whether now in
existence or hereafter arising, of AWP under this Agreement and each Assignment of the Royalty
Interests. This guaranty is one of payment and performance and not of collection.

12. Miscellaneous.

(a) Entire Agreement. All exhibits attached to this Agreement are hereby incorporated
by reference herein and made a part hereof for all purposes as if set forth in their entirety
herein. This Agreement, including the exhibits attached hereto, constitutes the entire agreement
between the Parties as to the subject matter of this Agreement and supersedes all prior agreements,
understandings, negotiations and discussions of the Parties, whether oral or written. No
supplement, amendment, alteration, modification or waiver of this Agreement shall be binding unless
executed in writing by the Parties. All other drafts whether written or oral of this Agreement are
rescinded and this Agreement supersedes any prior draft of this Agreement whether written or oral,
including all previous letters or emails regarding the purchase and sale of the Royalty Interests.

(b) Assignment; Assignment or Amendment of AWP Interests. The rights of Buyer may be
assigned and the provisions of this Agreement shall extend to its successors and assigns. Seller
may not assign or transfer, or permit AWP to assign or transfer, all or any portion of AWP’s
interest in the AWP Interests, or amend, modify, renew, substitute or extend any portion of AWP’s
interest in the AWP Interests, nor assign or delegate this Agreement or the obligations of Seller
hereunder, without the prior written consent of Buyer which may be withheld in its sole discretion.

(c) Governing Law. This Agreement shall be governed and construed in accordance with
the laws of the State of Colorado; provided that any Assignments executed,
acknowledged and delivered under this Agreement shall be governed by the law provided in such
Assignment. In the event of any dispute arising out of or relating to this Agreement, the
prevailing Party shall be entitled to recover from the other Party court costs and reasonable
attorneys’ fees.

 

7

 

(d) Notices. Any notice required or permitted by this Agreement shall be given in
writing by personal service, overnight delivery service, e-mail, facsimile or by certified mail,
return receipt requested, postage prepaid, as follows:

	 	 	 	 	 
	If to Seller:	 	With a copy to:
	 
	Prospect Global Resources Inc.	 	 
	600 17th Street, Suite 2800 South	 	 
	Denver, Colorado 80202	 	 
	Attention:

	 	Patrick L. Avery	 	 
	 

	 	President	 	 
	Fax: (720) 294-0402	 	 
	Email: PAvery@ProspectGRI.com	 	 
	 
	 	 	 	 
	If to Buyer:	 	With a copy to:
	 

	 	 	 	 	 
	Grandhaven Energy, LLC	 	 
	730 17th Street, Suite 800	 	 
	Denver, Colorado 80202	 	 
	Attention:

	 	Conway J. Schatz	 	 
	 

	 	Vice President	 	 
	Fax: (303) 571-1221	 	 
	Email: cjs@hexagoninc.com	 	 

(or such other address as designated in writing by either Party to the other) and shall be deemed
to have been given as of the date of receipt by the intended Party.

(e) Further Assurances. The Parties agree to execute, acknowledge and deliver such
additional instruments, agreements or other documents, and take such other action as may be
necessary or advisable to consummate the transactions contemplated by this Agreement. The Parties
acknowledge that they and their respective counsel have negotiated and drafted this Agreement
jointly and agree that the rule of construction that ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation or construction of this Agreement.

(f) Counterparts. This Agreement may be executed in counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such counterparts together shall
constitute for all purposes one agreement. Facsimiles and electronic copies of this Agreement
shall be effective as originals.

 

8

 

(g) Rule Against Perpetuities. The parties intend that any right, interest option or
estate in property created hereunder or pursuant hereto be construed as not subject to any common
law or statutory rule against perpetuities. In the event that any common law or
statutory rule against perpetuities is held to apply to any such right, interest, option or
estate, notwithstanding any other provision of this Agreement, if such right, interest, option or
estate in property conveyed by this Agreement does not vest upon the date hereof, such right,
interest or estate shall vest, if at all, within twenty-one years less 10 days after the death of
the last surviving descendant of Joseph P. Kennedy (the late father of the former President of the
United States), who is living on the earlier of the Effective Date hereof or the date this
Agreement is first executed by one of the parties hereto. Notwithstanding the limitation in the
preceding sentence, the parties agree and intend that a court finding any common law or statutory
rule against perpetuities applicable shall reform such right, interest, option or estate so that
such right, interest, option or estate is exercisable for the longest period permissible under such
rule, including such longer time as may be authorized by the Arizona Statutory Rule Against
Perpetuities, Arizona Revised Statutes § 33-261, if by such reformation such right, interest,
option or estate would be exercisable for a period longer than that provided in the preceding
sentence.

(h) Interpretation. As used in this Agreement, except as otherwise indicated herein
or as the context may otherwise require: (a) the words “include,” “includes,” and “including” are
deemed to be followed by “without limitation” whether or not they are in fact followed by such
words or words of like import; (b) the words “hereof,” “herein,” “hereunder,” and comparable terms
refer to the entirety of this Agreement, including the exhibits hereto, and not to any particular
article, section or other subdivision hereof or exhibit hereto; (c) any pronoun shall include the
corresponding masculine, feminine and neuter forms; (d) the singular includes the plural and vice
versa, (e) references to any agreement or other document are to such agreement or document as
amended, modified, supplemented and restated now or hereafter from time to time; (f) references to
any statute or regulation are to it as amended, modified, supplemented and restated now or
hereafter from time to time, and to any corresponding provisions of successor statutes or
regulations; (g) except as otherwise expressly provided in this Agreement, references to “Section,”
“preamble,” “recital,” or another subdivision or to an “Exhibit” are to an article, section,
preamble, recital or subdivision hereof or an “Exhibit” hereto; and (h) references to any person
include such person’s respective successors, assigns, transferees, lessees, heirs, executors and
administrators, whether by merger, consolidation, amalgamation, reorganization, sale of assets or
otherwise. Any reference herein to a “day” or number of “days” (without the explicit qualification
of “business”) shall be deemed to refer to a calendar day or number of calendar days. If any
action or notice is to be taken or given on or by a particular calendar day, and such calendar day
is not a business day, then such action or notice may be taken or given on the next succeeding
business day.

(i) Memorandum. Seller shall record promptly after Closing in the records of Apache
County a memorandum of this Agreement approved by Buyer.

[Signature Page follows]

 

9

 

IN WITNESS WHEREOF, Buyer and Seller have executed and delivered this Agreement as of November
22, 2011, to be effective for all purposes as of the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	SELLER:	 	 	 	BUYER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	PROSPECT GLOBAL RESOURCES INC.	 	 	 	GRANDHAVEN ENERGY, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Patrick L. Avery, President
	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 	 
	 	 	 	 	 	 	 	 	730 17th Street, Suite 800	 	 
	 	 	 	 	 	 	 	 	Denver, Colorado 80202	 	 

 

10

 

	 	 	 
	STATE OF Colorado)
	 	 
	 

	 	: ss.
	COUNTY OF Denver)
	 	 

On this 22nd day of November, 2011, before me,                     , a notary public in and
for said State, personally appeared Patrick Avery, known or identified to me to be the Chief
Executive Officer of Prospect Global Resources Inc., a Nevada corporation, the person who executed
the instrument on behalf of such limited liability company and acknowledged to me that such
corporation executed the same.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in
this certificate first above written.

	 	 	 	 	 	 	 	 	 
	 

	 	Notary Public	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Residing at:	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	My Commission Expires:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

	 	 	 
	STATE OF Colorado)
	 	 
	 

	 	: ss.
	COUNTY OF Denver)
	 	 

On this 22nd day of November, 2011, before me,                     , a notary public in
and for said State, personally appeared
                    , known or identified to me to be the                      of Grandhaven Energy,
LLC, a Wisconsin limited liability company, the person who executed the instrument on behalf of
such limited liability company and acknowledged to me that such limited liability company executed
the same.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year
in this certificate first above written.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Notary Public	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Residing at:	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	My Commission Expires:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

 

11

 

EXHIBIT A

to Potash Overriding Royalty Purchase And Sale Agreement And Option

dated effective as of November 22, 2011

AWP INTERESTS

[attach]

 

 

 

EXHIBIT B

to Potash Royalty Purchase And Sale Agreement And Option

dated effective as of November 22, 2011

OVERRIDING ROYALTY INTERESTS ASSIGNMENT

AND ROYALTY DEED

THIS OVERRIDING ROYALTY INTERESTS ASSIGNMENT AND ROYALTY DEED (“Assignment”) is executed and
delivered this                      day of                     , 20_____ 

(“Effective Date”), by AMERICAN WEST POTASH LLC, a
Delaware limited liability company (“Assignor” or “Debtor”) whose address is 600 17th Street, Suite
2800 South, Denver, Colorado 80202, as assignor, to GRANDHAVEN ENERGY, LLC,  a Wisconsin limited
liability company, with an address of 730 17th Street, Suite 800, Denver, Colorado 80202
(“Assignee” or “Secured Party”), as grantee.

Assignor and Assignee are parties to a Potash Royalty Purchase and Sale Agreement dated
effective as of November 22, 2011 (together with all exhibits thereto, the “Purchase and Sale
Agreement”), pursuant to which Assignor agreed to sell and Assignee agreed to purchase certain
royalties and overriding royalties in Minerals.

IN CONSIDERATION of Ten dollars and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by Assignor:

A. Assignor hereby grants, sells, assigns, transfers and sets over unto Assignee, its
successors and assigns, an overriding royalty interest equal to [one percent (1%)][percentage
subject to adjustment as provided in Section 3 of Purchase and Sale Agreement] of 100% of the Gross
Value (as hereinafter defined), without deductions of any kind or character, of all Minerals
extracted and sold from the Private Leased Premises (as hereinafter defined), under:

	 	1.	 	that certain Mineral Lease dated effective July 27, 2011 by and between PAP &
POP Family Ltd., a Texas limited partnership and 3MKJ, a Texas limited partnership, as
lessor (the “Hortenstine Group”), and Assignor, as lessee (the “Hortenstine Group
Mining Lease”), a memorandum of which is recorded as Document #                     , book                     ,
page                      of the records of Apache County, Arizona, and which covers the property
listed in Part I of Exhibit A hereto; and
	 
	 	2.	 	that certain Mineral Lease dated effective July 27, 2011 by and between James
Marlin Gale, David Glen Spurlock, Ransome Theodore Spurlock Jr., Robert H. W.W.
Spurlock, Vincent Pride Spurlock, Nancy Elizabeth Winn and Evelyn Lucking, as lessor
(the “SL Group”), and Assignor, as lessee (the “Spurlock/Lucking Group Mining Lease”),
a memorandum of which is recorded as Document #                     , book                     , page                      of
the records of
Apache County, Arizona, and which covers the property listed in Part II of Exhibit A
hereto;

 

B-1

 

(the Hortenstine Group Mining Lease and the Spurlock/Lucking Group Mining Lease are herein referred
to collectively as the “Private Leases”), such one percent overriding royalty interest not to be
proportionately reduced in any way, regardless of the interest owned by Assignor in the Private
Leases or the extent of the Mineral interest covered by the Private Leased Premises.

B. Assignor hereby grants, sells, assigns, transfers and sets over unto Grantee, its
successors and assigns, a perpetual non-participating production royalty (the “Mineral Interest
Royalty”) equal to [one percent (1%)] [percentage subject to adjustment as provided in Section 3 of
Purchase and Sale Agreement] of 100% of the Gross Value (without deductions of any kind or
character) of all Minerals extracted and sold from the lands described in Part IV of Exhibit A
hereto (the “Mineral Interest Lands”), such one percent overriding royalty interest not to be
proportionately reduced in any way, regardless of the extent of the Mineral interest owned by
Assignor in the Mineral Interest Lands.

C. Assignor hereby grants, sells, assigns, transfers and sets over unto Assignee, its
successors and assigns, an overriding royalty interest equal to [one percent (1%)] [percentage
subject to adjustment as provided in Section 3 of Purchase and Sale Agreement] of a 100% of the
Gross Value (without deductions of any kind or character) of all Minerals extracted and sold from
the State Leased Premises (as hereinafter defined), such one percent overriding royalty interest
not to be proportionately reduced in any way, regardless of the interest owned by Assignor in the
State Leases or the extent of the Mineral interest covered by the State Leased Premises.

D. “Leased Premises” shall mean the Private Leased Premises and the State Leased Premises.

E. “Private Leased Premises” shall mean the fee land and interests in fee land now subject to
the Mining Leases, more particularly described in Part I and Part II of Exhibit A hereto, and all
rights in such lands and interests now or hereafter owned or leased by Assignor, its successors and
assigns, under any amendment, substitution or renewal of the Mining Leases, or any other lease,
sublease, option or other agreement.

F. “Minerals” shall mean all potash which is known to exist or which is discovered to exist
after the Effective Date in and under the Leased Premises, extracted, mined or processed by
underground mining, solution mining or other mining methods now existing or developed or invented
after the Effective Date.

G. “Mining Leases” shall mean the Private Leases and the State Leases.

H. “Overriding Royalty Interests” shall mean the overriding royalty interests in the Leased
Premises created under this Assignment.

 

B-2

 

I. “Potash Sharing Agreement” shall mean that certain Potash Sharing Agreement dated as of
July 27, 2011 between the Hortenstine Group, the SL Group and American General Life Insurance
Company. a Texas corporation, and Assignor.

J. “Royalty Interests” shall mean the Overriding Royalty Interests and the Mineral Interest
Royalty.

K. “State Leased Premises” shall mean the lands and interests in land now subject to the
“State Leases” insofar as the State Leases cover the “State Lands,” as such terms are described in
Part III of Exhibit A hereto, including all rights to such lands covered thereby under exploration
permits, the Mining Leases, and all rights in such lands and interests now or hereafter owned or
leased by Assignor, its successors and assigns, under any amendment, substitution or renewal of the
Mining Leases, or any other exploration permit, lease, sublease, option or other agreement.

L. Assignor shall comply with all obligations under the Mining Leases, the Potash Sharing
Agreement, and the option agreements described in Exhibit A (collectively, the “Underlying
Agreements”) at all times in order to maintain the Underlying Agreements in good standing and avoid
any default thereunder, including by timely performing all work required under the Underlying
Agreements, and timely paying all rental fees, advance royalty payments, payments in lieu of annual
minimum work expenditures, and other payments required the terms of the Underlying Agreements or by
applicable law. Assignor shall timely file with the Arizona State Land Department and any other
applicable state agencies all reports and other information required by the State Leases or by
applicable law.

ADDITIONAL TERMS AND CONDITIONS

This Assignment is subject to the following terms, conditions and limitations:

1. Payments. The Royalty Interests shall be paid within 45 days of the end of each
calendar quarter with respect to all Minerals sold, used or consumed, or distributed in kind by
Assignor to its members in such calendar quarter. Assignor shall pay to Assignee the amounts due
under the Royalty Interests by wire transfer of immediately available funds to the account of
Assignee at such bank as Assignee may designate from time to time by written notice to Assignor.
Any such bank shall be deemed the agent of Assignee only for the purpose of receiving payments.

2. Extent of Royalty Interests. (a) The Overriding Royalty Interests are granted
subject to the terms and provisions of the Mining Leases, any amendment, renewal, substitution, or
extension of the Mining Leases, or any amendments or modifications to or substitutions for the
Mining Leases, or any new lease covering the Leased Premises if the new lease is taken or acquired
by Assignor, its successors or assigns, whether any new lease, amendment, modification or
substitution is entered into by (or in the name, or on behalf of) Assignor, or by (or in the name,
or on behalf of) any parent, subsidiary, affiliated or related entity or other person associated in
any manner to or with Assignor, or by any successor or
assign of Assignor; provided that no such amendment, modification, renewal, substitution or
extension, shall reduce, diminish or otherwise adversely affect Assignee’s Overriding Royalty
Interests without Assignee’s prior written consent, which may be withheld by Assignee in its sole
discretion. Nothing in the Potash Sharing Agreement, or any future amendment to the Potash Sharing
Agreement, shall reduce, diminish or otherwise adversely affect Assignee’s Overriding Royalty
Interests without Assignee’s prior written consent, which may be withheld by Assignee in its sole
discretion.

 

B-3

 

(b) To the extent required to obtain approval of the Arizona State Land Department to any
Overriding Royalty Interest in a State Lease, Assignee acknowledges that Assignee’s Overriding
Royalty Interest in such State Leased Premises is subordinate to the State of Arizona’s royalty
interest under such State Lease. If the Arizona State Land Department refuses to consent to the
assignment of any Overriding Royalty Interest or requires any reduction of or imposes any condition
on the Overriding Royalty Interest as a condition of approving an assignment of the Overriding
Royalty Interests or approving any royalty reduction or other action with respect to a State Lease,
Assignee shall have the remedies provided in Section 3 of the Purchase and Sale Agreement.

(c) “Gross Value” shall mean, for sales of Mineral products under arms-length contracts, a sum
calculated based on tons actually sold and shipped during a calendar quarter at the actual average
quarterly sales price received by Assignee during such calendar quarter on a weighted basis
according to production. “Gross Value” shall mean, for all Minerals or Mineral products sold under
non-arms length contracts, used or consumed, or distributed in kind by Assignor to its members, the
fair market value of such Minerals or Mineral Products without deduction for any costs, expenses,
liabilities or obligations paid or incurred by Assignor, other than transportation from the point
of shipment to market at the mine (but not intra-mine transportation costs); provided, however,
that under no circumstances may the Gross Value less transportation costs be less than the average
Gross Value of the Mineral or Mineral product, f.o.b. the mine. Assignor shall obtain Assignee’s
agreement (which shall not be unreasonably withheld) to the method of determining Gross Value of
any Minerals or Mineral Products sold under non-arms length contracts, used or consumed, or
distributed in kind by Assignor to its members, prior to commencing such use, consumption or sale.

(d) If, by reason of failure to use best mining practices or negligence on the part of
Assignor, Minerals are lost or wasted, or rendered economically unrecoverable, Assignor shall be
obligated to pay Assignee the Royalty Interests thereon to the same extent as if such Minerals had
been mined or processed utilizing best mining practices, and settlement shall be made on the basis
of independent estimates obtained by Assignee of the tonnage, grade and recovery rate of Minerals
so lost, wasted or rendered economically unrecoverable.

3. Reports, Records, Audits and Inspections. (a) During every year in which there is
production of ores or minerals from the Leased Premises or Mineral Interest Lands, Assignor shall
deliver to Assignee copies of all exploration and production reports prepared by Assignor regarding
its operations on such lands. Assignor shall also deliver to Assignee, with each royalty payment,
reports detailing the amount of production subsequent to the prior report, the amount of production
sold subsequent to the prior report, and the Gross
Value upon which the royalty payment is based, and any other similar information reasonably
requested by Assignee.

 

B-4

 

(b) Assignee and its representatives shall, at their sole risk and expense, upon reasonable
advance notice to Assignor, have the right to inspect and copy all books and records used by
Assignor to calculate the Royalty Interests due hereunder during normal business hours once in each
calendar year (which limitation shall not apply if Assignor is in default hereunder or to access in
connection with a prospective purchaser of Assignee’s interest).

(c) Assignee and its representatives shall, at their sole risk and expense, upon reasonable
advance notice to Assignor, have access during normal business hours once in each calendar year
(which limitation shall not apply if Assignor is in default hereunder or to access in connection
with a prospective purchaser of Assignee’s interest) to all operations conducted by or on behalf of
Assignors on or related to the Leased Premises or Mineral Interest Lands for the purposes of
viewing or inspecting the same, provided that Assignee and its representatives shall not
unreasonably interfere with such operations.

(d) Assignee, upon written notice, shall have the right to undertake, either directly or
through an independent firm of certified public accountants, an audit of the records and
documentation that relate to the calculation of the Royalty Interests for any calendar quarter
within five years after receipt of payment of the Royalty Interests for such calendar quarter. Any
calculation not so audited shall be deemed final and shall not thereafter be subject to audit or
challenge, except in the case of gross negligence or fraud.

4. Mining Lease Acquisition. If Assignor or its successors or assigns should ever
purchase, acquire directly or indirectly by exchange or otherwise acquire any interest in the
Leased Premises owned by the lessor under any of the Mining Leases, then the Overriding Royalty
Interests shall automatically convert to a perpetual, non-participating royalty interest burdening
such acquired portion of the Leased Premises.

5. Further Assurances. Assignor shall obtain, at its sole cost and expense and
without diminishing the Royalty Interests, any consents required from the Arizona State Land
Department or the parties to the Underlying Agreements, required for the assignment of Royalty
Interests hereunder. Assignor hereby covenants that from time to time it will execute additional
assignments and deeds necessary to create and maintain the Royalty Interests. Separate assignments
of the Overriding Royalty Interests in the State Leased Premises may be executed on officially
approved forms by Assignor to Assignee, in sufficient counterparts to satisfy applicable statutory
and regulatory requirements. Those assignments shall be deemed to contain all of the exceptions,
reservations, warranties, rights, titles, powers and privileges set forth in this Assignment as
fully as though they were set forth in each such assignment. The interests conveyed by such
separate assignments are the same, and not in addition to, the interests conveyed herein.

 

B-5

 

6. Law. This Assignment shall be governed by the law of the State of Arizona and any
questions arising hereunder shall be construed or determined according to such
law, without regard to the conflict of laws provisions thereof. In the event that any judicial
decision shall invalidate the grant of a perpetual, non-participating royalty interest or
overriding royalty interest, the parties intend that the economic consequences and the contractual
rights and obligations of the parties specified hereunder shall remain the same, and this
Assignment shall be reformed or amended by the court or the parties to accomplish such intent.

7. Recording. The parties agree that Assignee may record this Assignment in
accordance with Arizona law in the real property records of Apache County, Arizona, and in the
office of the Arizona State Land Department and any other applicable office, to give notice of the
interests granted herein and to obtain any required approval of the Arizona State Land Department
to this Assignment.

8. Successors and Assigns. (a) This Assignment and the Royalty Interests created
hereby shall run with the Leased Premises and the Mineral Interest Lands and be binding upon and
inure to the benefit of Assignor and Assignee and their respective successors and assigns.

(b) The Royalty Interests shall be freely assignable and transferable by Assignee. No change
or division in the ownership of the Royalty Interests, however accomplished, shall enlarge the
obligations or diminish the rights of Assignor. No change or division in the ownership of the
Royalty Interests shall be binding on Assignor until a copy of the instrument evidencing the change
or division in ownership has been received by Assignor.

(c) Assignor may not assign or transfer all or any portion of its interest in the Leased
Premises or the Mineral Interest Lands, or assign or delegate this Assignment or the obligations of
Assignor hereunder, unless Assignor shall obtain from any such assignee or transferee and provide
to the Assignee a written assumption in a form reasonably satisfactory to Assignee of the
obligations of Assignor under this Assignment. No such transfer or assignment shall relieve
Assignor of its obligations under this Assignment without the prior written consent of Assignee.

9. Representations and Warranties. Assignor represents and warrants to Assignee as
follows:

(a) Assignor has all necessary corporate power and authority to execute and deliver this
Assignment and to perform its obligations hereunder;

(b) This Assignment has been duly authorized by all necessary corporate or other action of
Assignor and, when and as executed and delivered by Assignor, shall constitute the valid and
binding agreement of Assignor, enforceable against Assignor in accordance with its terms, subject
to applicable bankruptcy, insolvency and other similar laws affecting the enforceability of
creditors’ rights generally, general equitable principles, and the discretion of courts in granting
equitable remedies;

 

B-6

 

(c) Neither the execution or delivery of this Assignment nor its performance will violate or
breach the Mining Leases or any agreement or covenant to which such Assignor is a party or by which
it is bound;

(d) Assignor represents and warrants to Assignee that (i) Assignor has good and marketable
title to the Mining Leases, the Leased Premises and the Mineral Interest Lands, (ii) no default, or
circumstance that upon the passage or time or giving of notice would become a default, exists under
any of the Mining Leases, and (iii) the Royalty Interests are free and clear of all liens,
encumbrances or defects;

(e) Assignor makes to Assignee all of the representations and warranties contained in
paragraph 4 of the Purchase and Sale Agreement, as of the Effective Date of this Assignment.

10. Submission to Jurisdiction; Waivers. Each of the parties hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding relating to the
enforcement of this Assignment, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of Colorado located
in Denver, Colorado, the United States District Court for the District of Colorado, and appellate
courts from any of the foregoing;

(b) consents that any such action or proceeding may be brought in such courts, and waives any
objection that it may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar form of mail or
overnight mail or courier service), postage prepaid, to such party at its address under the notice
provision below; and agrees that nothing herein shall affect the right to effect service of process
in any other manner permitted by law; and

(d) agrees that in the event of any dispute arising out of or relating to this Agreement, the
prevailing Party shall be entitled to recover from the other Party court costs and reasonable
attorneys’ fees.

11. Waiver. The failure of either Assignee or Assignor to insist on the strict
performance of any provision of this Assignment or to exercise any right, power or remedy upon a
breach hereof shall not constitute a waiver of any provision of this Assignment or limit Assignee’s
or Assignor’s right thereafter to enforce any provision or exercise any right hereunder. A waiver
of any provision of this Assignment shall not be effective unless in writing and signed by the
party against whom it is to be enforced.

 

B-7

 

12. Amendment. No modification or amendment of this Agreement shall be valid unless
made in writing and duly executed by Assignee and Assignor.

13. Entire Agreement. This Assignment, together with the Purchase and Sale Agreement,
contains the entire understanding of Assignor and Assignees and supersedes all prior agreements and
understandings between Assignor and Assignee relating to the subject matter hereof. Assignor’s
representations, warranties and covenants in the Purchase and Sale Agreement shall survive the
execution of this Assignment and shall not be deemed to be merged into or terminated by this
Assignment.

14. Severability. If any term or other provision of this Assignment is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all other conditions
and provisions of this Assignment shall nevertheless remain in full force and effect so long as the
economic and legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Assignment so as to effect the original intent of the parties as closely as possible
in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.

15. Notices. Any notice required or permitted by this Assignment shall be given in
writing by personal service, overnight delivery service, e-mail, facsimile or by certified mail,
return receipt requested, postage prepaid, as follows:

	 	 	 	 	 
	If to Seller:	 	With a copy to:
	 
	 	 	 	 
	American West Potash LLC	 	 
	600 17th Street, Suite 2800 South	 	 
	Denver, Colorado 80202	 	 
	Attention: Patrick L. Avery	 	 
	 

	 	President	 	 
	Fax: (720) 294-0402	 	 
	Email: PAvery@ProspectGRI.com	 	 
	 
	 	 	 	 
	If to Buyer:	 	With a copy to:

	 	 	 	 	 
	Grandhaven Energy, LLC	 	 
	730 17th Street, Suite 800	 	 
	Denver, Colorado 80202	 	 
	Attention:

	 	Conway J. Schatz	 	 
	 

	 	Vice President	 	 
	Fax: (303) 571-1221	 	 
	Email: cjs@hexagoninc.com	 	 

(or such other address as designated in writing by either Party to the other) and shall be deemed
to have been given as of the date of receipt by the intended Party.

 

B-8

 

16. No Third Party Beneficiaries. Nothing expressed or implied in this Assignment is
intended or shall be construed to give to any person or entity other than the parties and their
successors or assigns, any rights or remedies under or by reason of this Assignment.

17. Counterparts. This Assignment may be executed in two or more counterparts, each
of which shall be considered one and the same agreement and shall become effective when
counterparts have been executed by each of the parties and delivered to the other party.

18. Rule Against Perpetuities. The parties intend that any right, interest option or
estate in property created hereunder or pursuant hereto be construed as not subject to any common
law or statutory rule against perpetuities. In the event that any common law or statutory rule
against perpetuities is held to apply to any such right, interest, option or estate,
notwithstanding any other provision of this Assignment, if such right, interest, option or estate
in property conveyed by this Assignment does not vest upon the date hereof, such right, interest or
estate shall vest, if at all, within twenty-one years less 10 days after the death of the last
surviving descendant of Joseph P. Kennedy (the late father of the former President of the United
States), who is living on the earlier of the Effective Date hereof or the date this Assignment is
first executed by one of the parties hereto. Notwithstanding the limitation in the preceding
sentence, the parties agree and intend that a court finding any common law or statutory rule
against perpetuities applicable shall reform such right, interest, option or estate so that such
right, interest, option or estate is exercisable for the longest period permissible under such
rule, including such longer time as may be authorized by the Arizona Statutory Rule Against
Perpetuities, Arizona Revised Statutes § 33-261, if by such reformation such right, interest,
option or estate would be exercisable for a period longer than that provided in the preceding
sentence.

19. Interpretation. As used herein, except as otherwise indicated herein or as the
context may otherwise require: (a) the words “include,” “includes,” and “including” are deemed to
be followed by “without limitation” whether or not they are in fact followed by such words or words
of like import; (b) the words “hereof,” “herein,” “hereunder,” and comparable terms refer to the
entirety of this Assignment, including the exhibit hereto, and not to any particular article,
section or other subdivision hereof or exhibit hereto; (c) any pronoun shall include the
corresponding masculine, feminine and neuter forms; (d) the singular includes the plural and vice
versa, (e) references to any agreement or other document are to such agreement or document as
amended, modified, supplemented and restated now or hereafter from time to time; (f) references to
any statute or regulation are to it as amended, modified, supplemented and restated now or
hereafter from time to time, and to any corresponding provisions of successor statutes or
regulations; (g) except as otherwise expressly provided in this Assignment, references to
“Section,” “preamble,” “recital,” or another subdivision or to an “Exhibit” are to an article,
section, preamble, recital or subdivision hereof or an “Exhibit” hereto; and (h) references to any
Person include such Person’s respective successors, assigns, transferees, lessees, heirs, executors
and administrators, whether by merger, consolidation, amalgamation, reorganization, sale of assets
or otherwise. Any reference herein to a “day” or number of “days” (without the explicit
qualification of “business”) shall be deemed to refer to a calendar day or number of calendar days.
If any action or notice is to be taken or given on or by a particular calendar day, and such
calendar day is not a business day, then such action or notice may be taken or given on the next
succeeding business day.

 

B-9

 

IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as of the date first
above written.

	 	 	 	 	 
	 	GRANTOR:

AMERICAN WEST POTASH LLC,

a Delaware limited liability company

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

	 	 	 	 	 
	 	GRANTEE:

GRANDHAVEN ENERGY, LLC,

a Wisconsin limited liability company

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

B-10

 

	 	 	 
	STATE OF                                         )
	 	 
	 

	 	: ss.
	COUNTY OF                     )
	 	 

On this
                    
day of ____ 20_____, before me,                     , a notary public in and for said State,
personally appeared
                    , known or identified to me to be the                      of American West Potash LLC, a Delaware
limited liability company, the person who executed the instrument on behalf of such limited
liability company and acknowledged to me that such limited liability company executed the same.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in
this certificate first above written.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Notary Public	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Residing at:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	My Commission Expires:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

	 	 	 
	STATE OF                                         )
	 	 
	 

	 	: ss.
	COUNTY OF                     )
	 	 

On
this
                    
day of ______ 20_____, before me,                     , a notary public in and for said State,
personally appeared
                    , known or identified to me to be the                      of Grandhaven Energy, LLC, a Wisconsin
limited liability company, the person who executed the instrument on behalf of such limited
liability company and acknowledged to me that such limited liability company executed the same.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year
in this certificate first above written.

	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Notary Public	 	 	 	 
	 

	 	Residing at:	 	 	 	 
	 

	 	 	 	 

	 	 

 

B-11

 

EXHIBIT B

to Potash Royalty Purchase And Sale Agreement And Option

dated effective as of November 22, 2011

 

B-12

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