Document:

exv10w18

 

Exhibit 10.18

SETTLEMENT AGREEMENT

     THIS SETTLEMENT AGREEMENT (“Agreement”) is made this 26th day of August, 2005 (the “Effective
Date”), by and between GOLDEN PHOENIX MINERALS, INC., a Minnesota corporation qualified to do
business in Nevada (“Golden Phoenix”); EARL HARRISON, dba WESTERN MINE DEVELOPMENT; RETRIEVERS LLC,
a Nevada limited liability company, and JOHN TINGUE and KRIS TINGUE, husband and wife (referred to
collectively as “Retrievers”).

RECITALS

     A. Golden Phoenix has entered into an agreement with Earl Harrison, doing business as Western
Mine Development, to acquire the “Kingston Mill,” which consists of various machinery and equipment
acquired from the Estate of John W. O’Boyle, Jr. The equipment comprising the Kingston Mill is
described on Exhibit A attached hereto. Title to the Kingston Mill has not been formally
transferred from Western Mine Development to Golden Phoenix.

     B. Golden Phoenix contracted with Retrievers to disassemble and transport the Kingston Mill to
the Ashdown Mine situated in Humboldt County, Nevada. The disassembled Kingston Mill was
transported to Retrievers’ storage site in Harney County, Oregon. The parties acknowledge and agree
that Retrievers was paid in full for transpor-tation of the Kingston Mill.

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     C. A dispute has subsequently arisen between Golden Phoenix and Retrievers regarding (1) the
amount of storage fees, if any, owed by Golden Phoenix owed to Retrievers, and (2) the amount of
work to be performed by Retrievers in developing the Ashdown Mine and milling facility. Retrievers
gave notice of a lien having attached to the Kingston Mill, and of Retrievers’ intent to sell the
mill at public auction to satisfy that lien in Harney County. Retrievers further gave notice of its
intent to file suit for breach of contract, lost profits, and other damages, although no suit was
initiated.

     D. Retrievers and Golden Phoenix now wish to resolve and settle these disputes and all other
outstanding matters between them by way of this Agreement.

     THEREFORE, the parties have agreed as follows.

SECTION ONE

Ownership and Lease of Kingston Mill 

     1.1 Transfer of Title; Leaseback. Upon execution of this Agreement, Golden Phoenix and
Western Mine Development will execute a Bill of Sale conveying ownership of the Kingston Mill to
Retrievers. Retrievers agrees to lease the Kingston Mill to Golden Phoenix for a term of five (5)
years and so long thereafter as mining and milling operations are conducted at the Ashdown Mine. In
consideration of this Lease, Golden Phoenix will make the following payments to Retrievers:

     a. Golden Phoenix will pay Retrievers the sum of THIRTY THOUSAND DOLLARS ($30,000.00) upon
execution of this Agreement by way of a

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cashier’s check.

     b. Golden Phoenix will pay Retrievers the additional sum of THIRTY THOUSAND DOLLARS
($30,000.00) within three (3) days of Golden Phoenix having received its Water Pollution Control
Permit from the Nevada Division of Environmental Protection, or by October 23, 2005, whichever
occurs earlier.

     During the term of this Lease, Golden Phoenix will keep the mill in good working order through
regular maintenance and repairs, allowing for reasonable wear and tear, and will be solely
responsible for all related costs. Golden Phoenix will assume all liability for possession, use or
operation of the mill, and will indemnify and hold Retrievers harmless from any and all liability
associated with the mill.

     In addition to the foregoing payments, Golden Phoenix agrees to hire Retrievers to perform all
earthmoving and other related activities at the Ashdown Mine, until all such activities and
reclamation are completed, as more particularly described in Section 2 below. In the event that
Golden Phoenix terminates Retrievers’ services prior to the completion of the Ashdown Project, or
in the event the Ashdown Project is completed in less than two (2) years from the Effective Date,
then Golden Phoenix must either (1) return the Kingston Mill to Retrievers or (2) exercise the
option to purchase set forth in Section 1.2 below. However, in the event the Ashdown Project is
completed on or after a two-year period from the Effective Date of this contract, after payment of
all sums due to Retrievers by Golden Phoenix, Retrievers will execute a Bill of Sale
of the mill to Golden

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Phoenix.

     Retrievers will be allowed access to the Kingston Mill at all times.

     1.2 Option to Purchase Kingston Mill. Retrievers hereby grants to Golden Phoenix the
exclusive right and option to purchase the Kingston Mill for the sum of TWO HUNDRED FIFTY THOUSAND
DOLLARS ($250,000.00). The option will have a term of five (5) years following the Effective Date.
The purchase price will be reduced by FIFTY THOUSAND DOLLARS ($50,000.00) at the end of every year
following the Effective Date. For example, on August 26, 2006 the purchase price will be
$200,000.00, and on August 26, 2010 the purchase price will be zero.

     Upon exercising its option to purchase, Golden Phoenix will pay the remaining balance of the
purchase price to Retrievers within fifteen (15) days, and Retrievers will execute a Bill of Sale
conveying ownership of the Kingston Mill to Golden Phoenix.

     This option to purchase may be assumed by any third party which acquires the rights and
obligations of this Agreement from Golden Phoenix. The third party may terminate the contract for
services described in Section 2 below by exercising the option to purchase and paying the balance
then due.

SECTION TWO

Construction Operations

     2.1 Scope of Work. Golden Phoenix agrees to hire Retrievers to exclusively act as an
independent contractor for all construction and other activities, for which

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Retrievers is licensed, relating to the Ashdown Mine. These activities will include, but not be
limited to, site preparation; road construction and maintenance; installation of septic tanks and
other facilities; construction of tailings ponds; relocation of the Kingston Mill to the Ashdown
Mine; crushing, screening, and hauling of gravel and ore; equipment hauling; reclamation; and other
projects associated with Ashdown Mine and Mill, as may be requested by the Mine Manager from time
to time.

     2.2 Mine Manager. The Mine Manager shall be Earl Harrison, or such other person as
Golden Phoenix may designated from time to time.

     2.3 Independent Contractor. Retrievers will act as an independent contractor at all
times, and shall be responsible for payment of worker’s compensation, unemployment taxes, federal
income tax withholding for employees, and all other costs, license fees, and taxes attributable to
its activities.

     2.4 Work Orders. All pricing for labor and equipment will be negotiated between Golden
Phoenix Minerals and Retrievers LLC and will reflect current area and industry rates. Retrievers
will bill Golden Phoenix by written invoice, which will set forth the work performed and agreed
upon rates. Retrievers will bill Golden Phoenix for work performed between the 1st and 15th days of
each month, with payment due by the 25th of the month. Retrievers will bill Golden Phoenix for work
performed between the 16th day and the end of each month, with payment due by the 10th of the month
thereafter. Late charges will accrue at the rate of 1.5% per month, and Retrievers may

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declare a default if a payment is not received within thirty (30) days of its due date.

     2.5 Fuel. Golden Phoenix, at its sole cost, shall furnish Retrievers with all diesel
and other fuels required for Retrievers’ conduct of operations.

     2.6 Training. Golden Phoenix will provide all training required by the Mine Safety and
Health Administration (“MSHA”) to employees of Retrievers. Golden Phoenix will also prepare a
safety plan and provide technical assistance to Retrievers, so that Retrievers will remain in
compliance with MSHA regulations at all times.

     2.7 Conduct of Operations. Retrievers will perform all work in a timely and efficient
manner in accordance with industry standards. Retrievers will comply with all laws and regulations
pertaining to the conduct of its operations.

SECTION THREE

Default and Termination

     3.1 Notice of Default. If Golden Phoenix fails to make payment to Retrievers, as
provided in Section 2.4 above, or fails to fulfill any of the other obligations of this Agreement,
Retrievers shall give Golden

     Phoenix notice specifying the nature of the default. Golden Phoenix
shall have thirty (30) days in which to remedy the default. If Golden Phoenix fails to do so, Retrievers may terminate this Agreement, take possession of the
Kingston Mill, and remove the Kingston Mill from the Ashdown Mine.

     3.2 Termination by Golden Phoenix. Golden Phoenix may terminate

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Retrievers’ activities at the Ashdown Mine and mill by giving thirty (30) day’s advance written
notice thereof and by exercising its option to purchase the Kingston Mill as specified in Section
1.2 above.

SECTION FOUR

Dismissal of Legal Action

     Retrievers agrees to take no further action in regard to the lien proceeding described above
in Recital C. Each party shall bear its own fees and costs related to such action. Each party
dismisses and releases, with respect to the other, all claims for relief, whether known or unknown,
relating to dismantling, transportation, and storage of the Kingston Mill, as well as any alleged
breach of oral agreements between Golden Phoenix and Retrievers relating to earthmoving and
construction activities at the Ashdown Mine.

     All rights and obligations between the parties as of the Effective Date are set forth in this
Agreement and the Work Orders described in Section 2.4 above.

SECTION FIVE

Miscellaneous Provisions

     5.1 Binding Effect. This Agreement shall inure to the benefit of and be binding upon
the parties hereto, their respective heirs, executors, administrators, successors, and assigns.

     5.2 Applicable Law. The terms and provisions of this Agreement shall be
interpreted in accordance with the laws of the State of Nevada.

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     5.3 Entire Agreement. This Agreement terminates and replaces all prior agreements,
either written, oral or implied, between the parties hereto, and constitutes the entire agreement
between the parties.

     5.4 Void or Invalid Provisions. If any term, provision, covenant or condition of this
Agreement, or any application thereof, should be held by a court of competent jurisdiction to be
invalid, void or unenforceable, all provisions, covenants and conditions of this Agreement, and all
applications thereof not held invalid, void or unenforceable, shall continue in full force and
effect and shall in no way be affected, impaired, or invalidated thereby. However, should a
material provision of this Agreement be held to be void or invalid, the court shall have authority
to modify this Agreement so as to carry out the intent of the parties as determined by the court.

     5.5 Time of the Essence. Time is of the essence of this Agreement and each and every
part thereof.

     5.6 Confidentiality. All reports and data provided by Golden Phoenix to Retrievers
shall be held in strictest confidence, and Retrievers shall not disclose such information without
Golden Phoenix’s prior written consent.

     5.7 No Partnership. Nothing in this Agreement shall create a partnership between Golden
Phoenix and Retrievers.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first
above written.

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	 	 	GOLDEN PHOENIX MINERALS, INC,	 	 
	 	 	  a Minnesota corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	EARL HARRISON, dba WESTERN MINE	 	 
	 	 	  DEVELOPMENT	 	 
	 
	 	 	 	 	 	 
	 	 	RETRIEVERS LLC, a Nevada limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

  JOHN TINGUE, Manager
	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	JOHN TINGUE	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	KRIS TINGUE	 	 

golden phoenix/7329

settlement agreement (retrievers) (8-05) (with tingue changes)

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EXHIBIT A

Ashdown Mill Equipment List stored at John Tingues Property

May 3, 2005

	 	 	 
	1.

	 	1 — 40’ x50’ steel building (Star)
	2.

	 	1 — Grizzly w/10” x 10” openings
	3.

	 	1 — Coarse ore bin, 40 ton capacity in 2 steel framed sections
	4.

	 	1 — Plate feeder 24”
	5.

	 	1 — 20” x 22’ conveyor
	6.

	 	1 — Bucket elevator
	7.

	 	1 — 4’ x 8’ vibrating screen w/ 1/2” cloth
	8.

	 	1 — fine ore bin in 3 steel frame sections 130 ton capacity
	9.

	 	1 — 18” x 22’ feed conveyor
	10.

	 	1 — 6’ x 7’ Allis Chalmers Ball mill frame with trunion caps and discharge spout
	11.

	 	2 — 3” x 3” Slurry pump
	12.

	 	1 — 10” krebbs cyclone
	13.

	 	1 — 5’ x 6’ conditioner tank with mixer
	14.

	 	1 — bank (4 cells) #24 Deco roughers
	15.

	 	1 — bank (4 cells) #18 Deco cleaners
	16.

	 	1 — 40’ float cell frame
	17.

	 	1 — vertical 1” deco pump
	18.

	 	1 — 15’ thickener
	19.

	 	1 — Diaphragm pump 2” Dorr-Oliver
	20.

	 	1 — 4’ disk filter
	21.

	 	1 — 3” Sutorbilt blower
	22.

	 	1 — IR vacuum pump
	23.

	 	1 — Filtrate pump 2”
	24.

	 	1 — concentrate bin 550 ft3
	25.

	 	1 — 2” vertical sump pump
	26.

	 	4 — reagent feeders
	27.

	 	1 — 10,000 gal fuel tankexv10w19

 

 Exhibit
10.19

PRODUCTION PAYMENT PURCHASE AGREEMENT

          This Production Payment Purchase Agreement (the “Agreement”) is entered into as of September
___, 2005, by and between Golden Phoenix Minerals, Inc., a Minnesota corporation (the “Company”)
and Ashdown Milling Company, LLC, a Nevada limited liability company (“Purchaser”). Both the
Company and the Purchaser may sometimes be referred to as a “Party” or collectively as the
“Parties.”

          WHEREAS, the Company is the manager and operator of a joint venture established with
Win-Eldrich Mines Limited, by written agreement attached hereto and made a part hereof as Exhibit
“A” (the “Ashdown Joint Venture Agreement”) encompassing 101 unpatented lode mining claims in
Humboldt County, Nevada, commonly known as the Ashdown Mine; and

          WHEREAS, pursuant to the Ashdown Joint Venture Agreement, the Company has the right to receive
sixty percent (60%) of all minerals, base and precious, produced from the Ashdown Mine once, among
other things, the Company constructs a “pilot mill” and completes certain other exploration and
development activities resulting in initial production of minerals from the Ashdown Mine sufficient
to recover the cost of production of the minerals and resulting in a cash distribution to the
members of the Ashdown Joint Venture; and

          WHEREAS, in order to finance continued exploration and development of the Ashdown Mine,
including, but not limited to, obtaining necessary permits and constructing the “pilot mill” to
test production methods and milling techniques before entering into commercial production of
minerals, precious and base, from the Ashdown Mine, the Company is willing to sell to the Purchaser
and the Purchaser is willing to purchase from the Company a carved out production payment to be
paid from the Company’s share of the distribution of minerals (or sales of minerals) from the
Ashdown Joint Venture.

          NOW THEREFORE, in consideration for the mutual promises set forth in this Agreement, and for
other valuable consideration the receipt of which is hereby acknowledged, the Parties agree as
follows:

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ARTICLE
1

PURCHASE OF THE PRODUCTION PAYMENT

          1.1       Purchase of Production Payment. In exchange for the Purchase
Price set forth in Section 1.2 of this Agreement, the Company agrees to sell and the Purchaser
agrees to purchase a production payment equal to two hundred forty percent (240%) of the Purchase
Price paid by the Purchaser to the Company pursuant to the schedule of payments specified in
Section 1.2 of this Agreement. The payment shall be paid exclusively from the Company’s share of
production of base and precious minerals produced from the Ashdown Mine allocated to the Company
pursuant to the Ashdown Joint Venture Agreement. The rate of payment shall be equal to a twelve
percent (12%) Net Smelter (Refinery) Return on the entire production of precious and base minerals
produced from the Ashdown Mine, but paid solely from the Company’s share of production distributed
to the Company pursuant to the Ashdown Joint Venture Agreement. Until the production payment is
paid by the Company in full, the Company shall provide the Purchaser with monthly reports in
writing reporting production and sales of minerals, both precious and base, from the Ashdown Mine
and the calculation of the production payment to be paid by the Company. The production payment
shall be paid to the Purchaser monthly by the end of the month following the month the production
occurs.

          1.2       Purchase Price and Schedule of Payments. The minimum purchase
price for the production payment set forth in Section 1.1 of this Agreement shall be eight hundred
thousand US Dollars ($800,000) paid to the Company by the Purchaser pursuant to the Schedule of
Payments attached hereto and made a part hereof as Exhibit “B” upon the Company achieving the
milestones set forth therein. Additional purchase payments may be paid by the Purchaser, in its
sole and absolute discretion, in $50,000 increments up to a maximum purchase price of one million
five hundred thousand US Dollars ($1,500,000). All payments of the purchase price, except for the
first scheduled payment due upon the execution of this Agreement by the Parties, must be requested
by the Company after achieving the applicable milestone ten (10) days prior to funding.

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          1.3       Use of Proceeds. The Company agrees to use the proceeds paid by
the Purchaser pursuant to Section 1.2 of this Agreement solely for Exploration and Development
Expenditures as defined in Section 2.3 of this Agreement in order to satisfy the Company’s
obligation to explore and develop the Ashdown Mine.

          1.4       Purchase of Common Stock and Common Stock Purchase Warrants. In
addition to the production payment purchased by the Purchaser pursuant to Section 1.1 of this
Agreement, the Purchaser agrees to purchase and the Company agrees to sell to the Purchaser one
share of the Company’s common stock and one common stock purchase warrant with an exercise price
equal to twenty cents ($0.20) per share expiring three (3) years from the date of this Agreement
for each one Dollar of Purchase Price paid for the production payment pursuant to Section 1.2 of
this Agreement at no additional consideration. Solely for the purpose of determining the
sufficiency of legal consideration for the issuance of the shares and warrant, $0.02 of each Dollar
of the Purchase Price paid for the production payment pursuant to Section 1.2 of this Agreement
shall be allocated to each share of common stock and common stock purchase warrant purchased
pursuant to this Section 1.4 without reducing the amount of the production payment purchased
pursuant to Section 1.1 of this Agreement.

          1.5       Representations and Warranties Relating to the Purchase of Common
Stock and Warrants. In connection with the purchase of the shares of the Company’s common stock
and common stock purchase warrants, the Purchaser represents and warrants that each member of the
Purchaser is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D, that
the Purchaser is purchasing the shares and warrants for its own account, for investment purposes,
and not with the intention of distributing the shares and warrants to the public. The Purchaser
acknowledges that the shares and warrants, when issued, shall constitute “restricted securities” as
defined in Rule 144(a) and may not be offered or sold by the Purchaser without registration with
the Securities and Exchange Commission or may be sold only pursuant to an available exemption from
the registration requirements of the Securities Act of 1933, as amended.

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ARTICLE
2

DEFINITIONS

          The following definitions shall apply to the terms and conditions of this Agreement:

          2.1       Pilot Mill. The pilot mill is a milling facility constructed
and operated by the Company for the purpose of performing metallurgical testing of Ores and
Minerals prior to Commencement of Commercial Production. The pilot mill may be converted to a
full-scale milling facility by the Company once metallurgical testing is completed and thereafter
used to perform Commercial Production, as evidenced by a resolution of the Company as manager and
operator of the Ashdown Mine pursuant to the Ashdown Joint Venture Agreement.

          2.2       Commencement of Commercial Production. Commencement of
Commercial Production shall occur upon the completion of all major construction and development
work, including but not limited to, conversion of the pilot mill to a full-scale milling facility,
receipt of all necessary production and operating permits from local, state and federal regulatory
agencies and the beginning of reasonably satisfactory operation of mine and mill facilities in the
course of substantial mining operations resulting in the production and sale of marketable
concentrates, other than for metallurgical testing and trial marketing purposes, as evidenced by a
resolution of the Company as manager and operator of the Ashdown Mine pursuant to the Ashdown Joint
Venture Agreement.

          2.3       Exploration and Development Expenditures. Exploration and
Development Expenditures shall mean the Company’s total costs and expenses incurred with respect to
examining, exploring, and developing the Ashdown Mine pursuant to the Ashdown Joint Venture
Agreement and all matters connected therewith incurred after the date of the Ashdown Joint Venture
Agreement and prior to the Commencement of Commercial Production, including, without limitation,
costs and expenses incurred with respect to the design and construction of any and all milling
facilities, together with costs and expenses relating to geological, geochemical, and geophysical
studies, feasibility studies, exploration and development drilling, sampling and assaying, mine
design and development, the cost of any mining equipment or machinery

4

 

purchased prior to the Commencement of Commercial Production, compliance with environmental and
regulatory requirements, pre-production stripping, the construction of roads connecting the Ashdown
mine to a central road system, and any other similar or related expenses incurred prior to the
Commencement of Commercial Production and any attorney’s fees reasonably related to any of the
foregoing.

          2.4       Net Smelter Returns. Net Smelter Returns for all purposes of
this Agreement shall mean the amount actually received by the Ashdown Joint Venture from any sale
of Ores and Minerals mined or otherwise recovered and removed from the Ashdown Mine less, but only
to the extent actually incurred and borne by the Ashdown Joint Venture:

          2.4.1       Sales, use, gross receipts, severance, and other taxes, if any,
payable with respect to severance, production, removal, sale or disposition of Ores and
Minerals, but excluding any taxes on net income;

          2.4.2       Brokerage fees and sales commissions, if any;

          2.4.3       Charges and costs, if any, for transportation from the mine or
mill to places where Ores and Minerals are smelted, refined, processed and/or sold; and

          2.4.4       Charges, costs, including assaying and sampling costs, and all
penalties, if any, incurred upon smelting, refining, or processing Ores and Minerals; in the
event smelting, refining, or processing is carried out in facilities owned or controlled by
the Ashdown Joint Venture, charges, costs, and penalties for such operations shall mean the
amount the Ashdown Joint Venture would have incurred if such operations were carried out at
facilities not owned or controlled by the Ashdown Joint Venture then offering comparable
services for comparable products on prevailing terms.

          2.5       Ores and Minerals. Ores and Minerals for all purposes of this
Agreement shall mean collectively Ores and Minerals as defined below:

5

 

          2.5.1       Minerals. Minerals, whether singular or plural, shall mean
any and all mineral substances of any nature, metallic or non-metallic, including, but not
limited to, Molybdenum. The term Minerals shall not include oil, gas, or other liquid or
gaseous hydrocarbon substances, or sand, gravel, aggregates or building stone.

          2.5.2       Ores. Ores, whether singular or plural, shall mean all
material which in the sole discretion of the Ashdown Joint Venture justifies either (i)
mining, extracting, or recovering from place in the Ashdown Mine and selling or delivering
to a processing plant for physical or chemical treatment, or (ii) treating in place in the
Ashdown Mine by chemical, solution, or other methods; said term shall also include all
mineral-bearing solutions, natural or introduced, recovered by the Ashdown Joint Venture
from the Ashdown Mine and sold or processed by the Ashdown Joint Venture, and all mineral
and non-mineral components of all such material and solutions.

ARTICLE
3

MISCELLANEOUS PROVISIONS

          3.1.       Successors and Assigns. This Agreement may not be assigned by a
Party hereto without the prior written consent of the Company or the Purchaser, as applicable,
provided, however, that a Party may assign its rights and delegate its duties hereunder in whole or
in part to an Affiliate of the Party without the prior written consent of the Company or Purchaser,
after notice duly given by such Party to the Party. The provisions of this Agreement shall inure to
the benefit of and be binding upon the respective permitted successors and assigns of the Parties.
Nothing in this Agreement, express or implied, is intended to confer upon any person or entity
other than the Parties hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as expressly provided in
this Agreement.

          3.2.       Counterparts; Faxes. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which together shall
constitute

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one and the same instrument. This Agreement may also be executed via facsimile, which shall be
deemed an original.

          3.3.       Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in construing or interpreting
this Agreement.

          3.4       Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed effectively given as
hereinafter described (i) if given by personal delivery, then such notice shall be deemed given
upon such delivery, (ii) if given by telex or telecopier, then such notice shall be deemed given
upon receipt of confirmation of complete transmittal, (iii) if given by mail, then such notice
shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three
days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an
internationally recognized overnight air courier, then such notice shall be deemed given one
Business Day after delivery to such carrier. All notices shall be addressed to the party to be
notified at the address as follows, or at such other address as such party may designate by ten
days’ advance written notice to the other party:

	 	 	 	 	 
	 	 	If to the Company:
	 
	 	 	 	 
	 

	 	 	 	Attention: David A. Caldwell
	 

	 	 	 	Fax: 775-853-5010
	 
	 	 	 	 
	 	 	With a copy to:
	 
	 	 	 	 
	 

	 	 	 	Bartel Eng & Schroder
	 

	 	 	 	1331 Garden Hwy, Suite 300
	 

	 	 	 	Sacramento, California 95833
	 

	 	 	 	Attention: Scott Bartel, Esq.
	 

	 	 	 	Fax: (916) 442-3442
	 
	 	 	 	 
	 	 	If to the Purchaser:
	 
	 	 	 	 
	 

	 	 	 	Attention: Kenneth S. Ripley
	 

	 	 	 	Fax: 360-653-9838

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          3.5.       Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of the Company
and the Purchaser.

          3.6.       Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining provisions hereof but
shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted
by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the Parties hereby waive any provision of law which renders any
provision hereof prohibited or unenforceable in any respect.

          3.7.       Entire Agreement. This Agreement, including the Exhibits,
constitute the entire agreement among the Parties hereof with respect to the subject matter hereof
and thereof and supersede all prior agreements and understandings, both oral and written, between
the Parties with respect to the subject matter hereof and thereof.

          3.8.       Further Assurances. The Parties shall execute and deliver all
such further instruments and documents and take all such other actions as may reasonably be
required to carry out the transactions contemplated hereby and to evidence the fulfillment of the
agreements herein contained.

          3.9.       Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.
This Agreement shall be governed by, and construed in accordance with, the internal laws of the
State of Nevada without regard to the choice of law principles thereof. Each of the Parties hereto
irrevocably submits to the exclusive jurisdiction of the courts of the State of Nevada located in
Las Vegas County and the United States District Court for the District of Nevada for the purpose of
any suit, action, proceeding or judgment relating to or arising out of this Agreement and the
transactions contemplated hereby. Service of process in connection with any such suit, action or

8

 

proceeding may be served on each Party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement (other than by telex or facsimile which
shall be deemed improper service). Each of the Parties hereto irrevocably consents to the
jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in
such court. Each Party hereto irrevocably waives any objection to the laying of venue of any such
suit, action or proceeding brought in such courts and irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH
RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.

          IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year
first written above.

	 	 	 	 	 
	 

	 	GOLDEN PHOENIX MINERALS, INC.
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Steven D. Craig, Chairman of the Board	 	 
	 
	 	 	 	 
	 

	 	ASHDOWN MILLING COMPANY, LLC	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Kenneth S. Ripley, Manager	 	 

9

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