NOTICE OF SALE AND DISPOSITION OF COLLATERAL

This Notice of Sale and Disposition of Collateral (“Notice”) is given pursuant to the Arizona Uniform Commercial Code and other applicable law, if any (the “UCC”).  On September 2, 2014, at 10:30 a.m. (local time) at the offices of Polsinelli PC, 1 E. Washington Street, Suite 1200, Phoenix, Arizona 85004, The Karlsson Group, Inc. (“SECURED PARTY”), acting as a secured creditor, will offer at public sale for auction to the highest bidder, for cash, all right, title and interest in the assets of Prospect Global Resources, Inc., a Delaware corporation (the “Debtor”) including but not limited to each Master Consulting Services Agreement between Debtor and Tetra Tech, Inc. dated July 29, 2011 (collectively, the “Collateral”).  SECURED PARTY neither expresses any opinion as to the value of the Collateral nor makes any representation or warranties as to the condition or continued operation of the Debtor.  The Collateral will be sold “as is” and without recourse to SECURED PARTY.  SECURED PARTY makes no warranties, covenants or representations, express or implied, as to the Collateral, the sale of the Collateral, or the Debtor.  Accordingly, there is no warranty relating to title, possession, quiet enjoyment, or the like in this disposition and/or any sale pursuant to this disposition.

The Collateral has been pledged by the Debtor to SECURED PARTY to secure Debtor’s obligations to SECURED PARTY under a Senior First Priority Secured Promissory Note in the original principal amount of $125,000,000.00 dated as of August 1, 2012 (as amended, the “Note”) and certain security documents executed in connection therewith.

SECURED PARTY will accept bids on the Collateral upon the following terms and conditions:

  1. Only bids which are specific as to the specific items sought to be purchased and the amount bid therefor will be considered.  SECURED PARTY therefore reserves the right to require all bids to be in writing.  If competing offers for different items are submitted, SECURED PARTY may adjourn the auction to determine which offer(s), if any, will be accepted.
  2. SECURED PARTY reserves the right to postpone or re-notice the time, date and/or place of the sale.  SECURED PARTY reserves the right to sell the property in lots, bulk or as individual items.  If competing offers with different terms and conditions are submitted, SECURED PARTY reserves the right to determine which offer shall be accepted, and its decision in this matter shall be final.
  3. SECURED PARTY shall not be obligated to make any sale, and reserves the right to reject any and all offers at its sole discretion for any reason whatsoever.
  4. SECURED PARTY reserves the right to bid at the sale or any continuation or adjournment thereof.
  5. The indebtedness of Debtor to SECURED PARTY is the Note’s principal balance of $125,593,130.26 as of April 29, 2014, plus additional accruing interest, costs, late fees, tax gross up payments, attorneys’ fees and other charges as provided in the Note from and after April 29, 2014, until paid in full, together with costs, expenses and attorneys’ fees incurred by SECURED PARTY in enforcing the Note and the applicable security documents. SECURED PARTY reserves the right to credit bid at the sale.
  6. The sale will not be complete until the successful bidder delivers to SECURED PARTY or its counsel cash, certified check or immediately available funds in the full amount of the successful bid.  Notwithstanding the foregoing, SECURED PARTY may, but shall not be required to, allow the successful bidder up to two (2) business days to deliver the full payment as set forth above.  In case the successful bidder fails to complete the purchase within the time allowed, the Collateral may thereupon again be offered for sale without further publication or notice.  In the event of a failure to complete the purchase, the bidder will not be relieved of liability to complete the purchase, and the bidder’s deposit will not be refunded.
  7. To obtain further information as to the sale and the terms and conditions thereof and/or further information regarding the Collateral, interested parties should contact Gerrit Steenblik of Polsinelli PC, counsel for SECURED PARTY, at One East Washington St., Suite 1200, Phoenix, AZ 85004-2568; telephone number (602) 650-2348.
  8. The above terms and conditions of sale may be supplemented or amended by SECURED PARTY at any time prior to the sale.

Dated August 20, 2014                                                                      The Karlsson Group, Inc.