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Passport Potash to Acquire 100% Interest in its Eastern Landholdings at Holbrook Basin
Oct. 31, 2012
Passport Potash, Inc. is pleased to announce that it has entered into an agreement to acquire 100% interest in its landholdings on the east side of the Holbrook Basin. The Agreement is part of a settlement agreement with North American Potash Developments Inc. and the other parties in the civil action in Utah ("NAPD Group").
Under the terms of the settlement agreement, the parties have agreed to an Amendment of the Option Agreement ("Amendment Agreement") according to the following terms:
• Passport will pay to the NAPD Group a total of $3,850,000 according to the following schedule:
• $150,000 upon execution of the Amendment Agreement;
• $2,450,000 upon TSX Venture Exchange approval;
• $1,250,000 on or before October 31, 2014;
• Passport will issue 750,000 common shares to the NAPD Group upon TSX Venture Exchange approval;
• Upon written notice from the TSX Venture Exchange that the Amendment Agreement has been approved, the parties shall simultaneously do the following: (i) the NAPD Group shall assign all of its right, title, and interest in and to the Property and will take all necessary action with the Arizona State Land Department to effect such assignment; and (ii) Passport will place into escrow on behalf of the NAPD Group the $2,450,000 cash payment and the 750,000 common shares of Passport. The cash payment and shares will be released to the NAPD Group upon receipt of confirmation of the assignment of the Property to Passport from the Arizona State Land Department.
• There will be no royalty attached to the transferred permits.
• Should Passport, or any subsidiary or affiliate, sell or in any way transfer its interest in the Property, the NAPD Group will receive a bonus payment in accordance with the following schedule:
• If Passport receives less than $30 million for the transaction, then no bonus payment shall be payable;
• If Passport receives greater than $30 million but less than $40 million the NAPD Group would receive 20% of the gross consideration in excess of $30 million;
• If Passport receives greater than $40 million but less than $50 million the NAPD Group would receive 10% of the gross consideration in excess of $40 million;
• If Passport receives greater than $50 million the NAPD Group would receive 20% of the gross consideration received in excess of $50 million.
Based upon the foregoing, the parties have agreed to a mutual release and settlement of any claims and causes of action between the parties as of the date of the settlement agreement.
"We are happy to have solidified our position in our eastern landholdings," commented Joshua Bleak, Passport's President and CEO. "This settlement will allow us to focus all our efforts on the development of this project, and is another decisive step towards rounding out the best land package in the Holbrook Basin."
Source: Marketwire
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