Document:

Exhibit 10.1

 

FIFTH AMENDMENT TO
 SENIOR FIRST PRIORITY SECURED PROMISSORY NOTE

 

This FIFTH AMENDMENT TO SENIOR FIRST PRIORITY SECURED PROMISSORY NOTE (this “Fifth Amendment”) is made as of November 13, 2013 by and between Prospect Global Resources, Inc., a Delaware corporation (“Maker”), and the Karlsson Group, Inc., an Arizona corporation (“Holder”), with respect to the following facts:

 

RECITALS

 

WHEREAS, Maker issued to Holder that certain Senior First Priority Secured Promissory Note dated August 1, 2012 (the “Original Note”), whereby the Maker promised to pay to Holder the principal sum of One Hundred Twenty-Five Million Dollars ($125,000,000);

 

WHEREAS, American West Potash, LLC, a Delaware limited liability company (“AWP”), Prospect Global Resources, Inc., a Nevada corporation (“Prospect Nevada”), Apache County Land & Ranch, LLC, a Nevada limited liability company (“Apache”), Maker and Holder entered into that certain Extension Agreement (the “Extension Agreement”) dated as of April 15, 2013;

 

WHEREAS, Maker and Holder entered into an Amendment to Senior First Priority Secured Promissory Note dated April 15, 2013 (“First Amendment” and the Original Note as amended thereby and as otherwise amended, restated or modified from time to time, the “Note”);

 

WHEREAS, AWP, Prospect Nevada, Apache, Maker and Holder entered into that certain Second Extension Agreement dated as of June 26, 2013;

 

WHEREAS, Maker and Holder entered into a Second Amendment to Senior First Priority Secured Promissory Note dated as of June 26, 2013;

 

WHEREAS, Maker and Holder entered into a Third Amendment to Senior First Priority Secured Promissory Note dated as of September 9, 2013;

 

WHEREAS, AWP, Prospect Nevada, Apache, Maker and Holder entered into that certain Third Extension Agreement dated as of September 13, 2013;

 

WHEREAS, Maker and Holder entered into a Fourth Amendment to Senior First Priority Secured Promissory Note dated as of September 13, 2013;

 

WHEREAS, Maker has requested that Holder extend until December 4, 2013 the deadline for payment of the 2012 453A Amount; and

 

WHEREAS, Holder is willing so to modify the Note.

 

 

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Maker and Holder hereby agree as follows:

 

AGREEMENT

 

1.             Defined Terms.  All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Note.

 

2.             Amendment to Section 2.2.  Clause (i) of Section 2.2 of the Note is amended and restated to read in its entirety as follows:

 

“a payment equal to the 2012 453A Amount on or before December 4, 2013.”

 

3.             Karlsson’s Costs.  No later than November 18, 2013, Maker shall pay to Holder Ten Thousand Dollars ($10,000) in partial reimbursement of Holder’s legal fees and expenses incurred in connection with the Note and the other documents executed and delivered in connection therewith.

 

4.             Miscellaneous.

 

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

 

(b)           Relation to Note.  This Fifth Amendment constitutes an integral part of the Note.  Upon the effectiveness of this Fifth Amendment, each reference in the Note to “this Promissory Note,” “hereunder,” “hereof,” or words of like import referring to the Note, shall mean and be a reference to the Note as amended hereby.

 

(c)           Successors and Assigns.  This Fifth 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 Fifth 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.

 

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

 

	
 
    	
MAKER:
    
	
 
    	
 
    
	
 
    	
PROSPECT   GLOBAL RESOURCES, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Damon Barber
    
	
 
    	
Name:   
    	
Damon   Barber
    
	
 
    	
Title:   
    	
President,   CEO and Secretary
    
	
 
    	
 
    
	
ACKNOWLEDGED   AND AGREED TO
    	
 
    
	
EFFECTIVE   AS OF November 13, 2013:
    	
 
    
	
 
    	
 
    
	
THE   KARLSSON GROUP, INC.,
    	
 
    
	
an   Arizona corporation
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:   
    	
s/s   Michael Stone
    	
 
    
	
Name:   
    	
Michael   Stone
    	
 
    
	
Title:
    	
Treasurer   and CFO
    	
 
    

 

3Exhibit 10.2

 

REAFFIRMATION OF LOAN DOCUMENTS

 

THIS REAFFIRMATION OF LOAN DOCUMENTS (“Reaffirmation”), dated as of November 13, 2013, is executed in favor of The Karlsson Group, Inc., an Arizona corporation (“Karlsson”), by each of Prospect Global Resources, Inc., a Delaware corporation (“Prospect DE”), Prospect Global Resources, Inc., a Nevada corporation (“Parent”), Apache County Land & Ranch, LLC, a Nevada limited liability (“Apache”) and American West Potash, LLC, a Delaware limited liability company (“AWP” and collectively with Prospect DE, Parent and Apache the “Prospect Parties” and each a “Prospect Party”) with reference to the following facts:

 

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

 

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

 

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

 

 

D.            The Loan Documents include, without limitation, that certain Third Extension Agreement among the Prospect Parties and Karlsson dated as of September 13, 2013 (the “Third Extension Agreement”).

 

E.            Concurrently herewith, Karlsson and Prospect DE are entering into a Fifth Amendment to Senior First Priority Secured Promissory Note (the “Fifth Amendment”) pursuant to which a payment date under the Note is being extended through December 4, 2013.

 

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

 

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

 

SECTION 2.  Reaffirmation.  Each Prospect Party hereby (i) acknowledges and affirms for the benefit of Karlsson that it has received and reviewed a copy of, and hereby consents to the execution of, the Fifth Amendment; (ii) makes in favor of Karlsson, as of the date of this Reaffirmation, each of the representations and warranties set forth in Section 4 of the Third Extension Agreement and the acknowledgments set forth in Sections 1(d), 2 and 17 of the Third Extension Agreement; (iii) reaffirms as of the date hereof each of its obligations under its respective Collateral Document(s) and under any other Loan Document to which such Prospect Party is a party, as the same have heretofore been, and may from time to time hereafter be, supplemented, amended, modified, restated or extended; (iv) reaffirms each of the waivers set forth in the Third Extension Agreement (including, but not limited to in Sections 1(f), 9 and 14 thereof); (v) reaffirms, renews, remakes and re-executes as of the date hereof its general release in, and in the form set forth in, Section 10 of the Third Extension Agreement; and (vi) reaffirms and remakes each indemnification obligation set forth in the Third Extension Agreement, including but not limited to Section 11 thereof.

 

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

 

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

 

SECTION 5.  Governing Law.  This Reaffirmation shall be governed by and construed in accordance with the laws of the State of Arizona.

 

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

 

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

 

[Signatures Continued on Next Page]

 

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

 

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