Document:

exv10w30

 

Exhibit 10.30

SECURITY AGREEMENT

     THIS SECURITY AGREEMENT (this “Agreement”), dated as of June 12, 2007, is made by and between
Golden Phoenix Minerals, Inc., a Minnesota corporation (the “Borrower”), and Crestview Capital
Master LLC., a Delaware limited liability company (the “Secured Party”).

     Pursuant to a Production Payment Purchase Agreement and Assignment of even date herewith (as
the same may be amended, supplemented or restated from time to time, the “Purchase Agreement”), the
Secured Party is purchasing from William D. and Candida Schnack a production payment equal to One
Million Nine Hundred Eighty Thousand Dollars ($1,980,000) (“Production Payment”).

     As a further condition to the purchase of the Production Payment pursuant to the Purchase
Agreement, the Secured Party has required the execution and delivery of this Agreement by the
Borrower.

     ACCORDINGLY, in consideration of the mutual covenants contained in the Purchase Agreement, the
Notes and herein, the parties hereby agree as follows:

     1. Definitions. All terms defined in the recitals hereto and the Purchase Agreement
that are not otherwise defined herein shall have the meanings given them in the recitals and the
Purchase Agreement. All terms defined in the UCC and not otherwise defined herein have the
meanings assigned to them in the UCC. In addition, the following terms have the meanings set forth
below or in the referenced Section of this Agreement:

     “Accounts” means all of the Borrower’s accounts, as such term is
defined in the UCC, including each and every right of the Borrower to the payment of
money, whether such right to payment now exists or hereafter arises, whether such
right to payment arises out of a sale, lease or other disposition of goods or other
property, out of a rendering of services, out of a loan, out of the overpayment of
taxes or other liabilities, or otherwise arises under any contract or agreement,
whether such right to payment is created, generated or earned by the Borrower or by
some other Person who subsequently transfers such Person’s interest to the Borrower,
whether such right to payment is or is not already earned by performance, and
howsoever such right to payment may be evidenced, together with all other rights and
interests (including all Liens) which the Borrower may at any time have by law or
agreement against any account debtor or other obligor obligated to make any such
payment or against any property of such account debtor or other obligor; all
including but not limited to all present and future accounts, contract rights, loans
and obligations receivable, chattel papers, bonds, notes and other debt instruments,
tax refunds and rights to payment in the nature of general intangibles.

     “Collateral” means, whether now owned or existing or hereafter acquired
or arising or in which the Borrower now has or hereafter acquires any rights, all of
the Borrower’s assets, including without limitation accounts, chattel paper,

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deposit accounts, documents, Equipment, General Intangibles, goods,
instruments, intellectual property and Intellectual Property Rights, Inventory,
Investment Property, letter-of-credit rights, letters of credit, all sums on deposit
in any collateral account, and any items in any lockbox; together with (i) all
substitutions and replacements for and products of any of the foregoing; (ii) in the
case of all goods, all accessions; (iii) all accessories, attachments, parts,
equipment and repairs now or hereafter attached or affixed to or used in connection
with any goods; (iv) all warehouse receipts, bills of lading and other documents of
title now or hereafter covering such goods; (v) all collateral subject to the Lien
of the Secured Party; (vi) any money, or other assets of the Borrower that now or
hereafter come into the possession, custody, or control of the Secured Party; and
(vii) proceeds of any and all of the foregoing; provided, however,
that Collateral shall not include(a) any Equipment that is subject to a purchase
money Lien that is a Permitted Lien in favor of any Person if the documents relating
to such Lien do not permit other Liens, or (b) any General Intangible or Investment
Property that is the subject of an enforceable written agreement which specifically
prohibits assignment but only to the extent (A) of such prohibition and (B) that the
terms and provisions of such written agreement (x) expressly prohibit the granting
of a security interest therein or condition the granting of a security interest
therein on the consent of a third party whose consent has not been obtained or (y)
would cause, or allow a third party to cause, forfeiture of such property upon the
granting of a security interest therein.

     “Equipment” means all of the Borrower’s equipment, as such term is
defined in the UCC, whether now owned or hereafter acquired, including but not
limited to all present and future machinery, vehicles, furniture, fixtures,
manufacturing equipment, shop equipment, office and recordkeeping equipment, parts,
tools, supplies, and including specifically the goods described in any equipment
schedule or list herewith or hereafter furnished to the Secured Party by the
Borrower.

     “Event of Default” has the meaning given in Section 6.

     “General Intangibles” means all of the Borrower’s general intangibles,
as such term is defined in the UCC, whether now owned or hereafter acquired,
including all present and future Intellectual Property Rights, customer or supplier
lists and contracts, manuals, operating instructions, permits, franchises, the right
to use the Borrower’s name, and the goodwill of the Borrower’s business.

     “Indebtedness” is used herein in its most comprehensive sense and means
any and all advances, debts, obligations and liabilities of the Borrower to the
Secured Party, heretofore, now or hereafter made, incurred or created, whether
voluntary or involuntary and however arising, whether due or not due, absolute or
contingent, liquidated or unliquidated, determined or undetermined, including under
any swap, derivative, foreign exchange, hedge, deposit, treasury

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management or other similar transaction or arrangement at any time entered into
by the Borrower with the Secured Party, and whether the Borrower may be liable
individually or jointly with others, or whether recovery upon such Indebtedness may
be or hereafter becomes unenforceable.

     “Intellectual Property Rights” means all actual or prospective rights
arising in connection with any intellectual property or other proprietary rights,
including all rights arising in connection with copyrights, patents, service marks,
trade dress, trade secrets, trademarks, trade names or mask works.

     “Inventory” means all of the Borrower’s inventory, as such term is
defined in the UCC, whether now owned or hereafter acquired, whether consisting of
whole goods, spare parts or components, supplies or materials, whether acquired,
held or furnished for sale, for lease or under service contracts or for manufacture
or processing, and wherever located.

     “Investment Property” means all of the Borrower’s investment property,
as such term is defined in the UCC, whether now owned or hereafter acquired,
including but not limited to all securities, security entitlements, securities
accounts, commodity contracts, commodity accounts, stocks, bonds, partnership
interests, joint venture interests, limited liability company interests, mutual fund
            shares, money market shares and U.S. Government securities.

     “Lien” means any security interest, mortgage, deed of trust, pledge,
lien, charge, encumbrance, title retention agreement or analogous instrument or
device, including the interest of each lessor under any capitalized lease and the
interest of any bondsman under any payment or performance bond, in, of or on any
assets or properties of a Person, whether now owned or hereafter acquired and
whether arising by agreement or operation of law.

     “Permitted Liens” means (i) the Security Interest, (ii) nonconsensual
Liens securing Taxes, assessments or governmental charges or levies or the claims or
demands of materialmen, mechanics, carriers, warehousemen, landlords an other like
Persons, which are not overdue or are being contested in good faith by appropriate
proceedings, (iii) Liens incurred in the Ordinary Course of Business (A) in
connection with worker’s compensation, unemployment insurance, social security and
other like Laws, (B) to secure the performance of letters of credit, bids, tenders,
sales contracts, leases, statutory obligations, surety, reclamation, environmental,
appeal and performance bonds an other similar obligations not incurred in connection
with the borrowing of money, the obtaining of advances of the payment of the
deferred purchase price of property or (C) after such time as the Company has
lawfully reserved sufficient number of shares of Common Stock to permit conversion
in full of the Production Payment, in connection with working capital credit
facilities and operating, financing or other lease or purchase money financing not
to exceed five million dollars

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($5,000,000), (iv) covenants, restrictions, rights, easements and minor
irregularities in title which do not materially interfere with the Borrower’s
business or operations as presently conducted, and (v) Liens in existence on the
date hereof and described on Exhibit C hereto and after such time as the
Company has lawfully reserved sufficient number of shares of Common Stock to permit
conversion in full of the Production Payment, an additional Lien that may be created
in the future in favor of future lenders providing project financing for purposes of
the exploration and development of one or more of the Borrower’s mining properties
not exceeding five million dollars ($5,000,000).

     “Security Interest” has the meaning given in Section 2.

     “UCC” means the Uniform Commercial Code as in effect from time to time
in the State of California.

     2. Security Interest. The Borrower hereby grants to the Secured Party to secure the
payment of the Indebtedness, a security interest in all of the Borrower’s right, title and interest
in, to and under the Collateral (the “Security Interest”).

     3. Representations, Warranties and Agreements. The Borrower hereby represents,
warrants and agrees as follows:

     (a) Title. The Borrower (i) has absolute title to each item of Collateral in
existence on the date hereof, free and clear of all Liens except the Permitted
Liens, (ii) will have, at the time the Borrower acquires any rights in Collateral
hereafter arising, absolute title to each such item of Collateral free and clear of
all Liens except Permitted Liens, (iii) will keep all Collateral free and clear of
all Liens except Permitted Liens, and (iv) will defend the Collateral against all
claims or demands of all Persons other than the Secured Party and the holders of
Permitted Liens. The Borrower will not sell or otherwise dispose of the Collateral
or any interest therein, outside the ordinary course of business, without the prior
written consent of the Secured Party.

     (b) Chief Executive Office; Identification Number. The Borrower’s chief
executive office and principal place of business is located at the address set forth
under its signature below. The Borrower’s federal employer identification number
and organization identification number is correctly set forth under its signature
below.

     (c) Location of Collateral. As of the date hereof, the tangible Collateral is
located only in the states and at the address, as identified on Exhibit A
attached hereto. The Borrower will not permit any tangible Collateral to be located
in any state (and, if county filing is required, in any county) in which a financing
statement covering such Collateral is required to be, but has not in fact been,
filed in order to perfect the Security Interest.

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     (d) Changes in Name, Organizational Documents, Location. The Borrower will not
change its name, organizational or Charter Documents, or jurisdiction of
organization, without the prior written consent of the Secured Party, which consent
will not be unreasonably withheld, conditioned or delayed. The Borrower will not
change its business address, without prior written notice to the Secured Party.
Notwithstanding the foregoing, the Secured Party hereby consents to the Borrower’s
proposed reincorporation from the State of Minnesota to the State of Nevada as more
specifically described in the Borrower’s proxy statement relating to its 2007 Annual
Meeting of Shareholders on file with the Securities Exchange Commission.

     (e) Fixtures. The Borrower will not permit any tangible Collateral to become
part of or to be affixed to any real property without first assuring to the
reasonable satisfaction of the Secured Party that the Security Interest will be
prior and senior to any Lien then held or thereafter acquired by any mortgagee of
such real property or the owner or purchaser of any interest therein. If any part
or all of the tangible Collateral is now or will become so related to particular
real estate as to be a fixture, the real estate concerned and the name of the record
owner are accurately set forth in Exhibit B hereto.

     (f) Rights to Payment. Each right to payment and each instrument, document,
chattel paper and other agreement constituting or evidencing Collateral is (or will
be when arising, issued or assigned to the Secured Party) the valid, genuine and
legally enforceable obligation, subject to no defense, setoff or counterclaim (other
than those arising in the ordinary course of business), of the account debtor or
other obligor named therein or in the Borrower’s records pertaining thereto as being
obligated to pay such obligation. The Borrower will not, without the Secured Party’
consent, agree to any material modification or amendment or agree to any
forbearance, release or cancellation of any such obligation, and will not, without
the Secured Party’s consent, subordinate any such right to payment to claims of
other creditors of such account debtor or other obligor.

     (g) Commercial Tort Claims. Promptly upon knowledge thereof, the Borrower will
deliver to the Secured Party notice of any commercial tort claims it may bring
against any Person, including the name and address of each defendant, a summary of
the facts, an estimate of the Borrower’s damages, copies of any complaint or demand
letter submitted by the Borrower, and such other information as the Secured Party
may request. Upon request by the Secured Party, the Borrower will grant the Secured
Party a security interest in all commercial tort claims it may have against any
Person.

     (h) Miscellaneous Covenants. The Borrower will:

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          (i) keep all tangible Collateral in good repair, working order and condition,
normal wear and tear and depreciation excepted, and will, from time to time, replace
any worn, broken or defective parts thereof;

          (ii) promptly pay all taxes and other governmental charges levied or assessed
upon or against any Collateral or upon or against the creation, perfection or
continuance of the Security Interest;

          (iii) at all reasonable times, permit the Secured Party or its representatives
to examine or inspect any Collateral, wherever located, and to examine, inspect and
copy the Borrower’s books and records pertaining to the Collateral and its business
and financial condition and to send to account debtors and other obligors requests
for verifications of amounts owed to the Borrower;

          (iv) keep accurate and complete records pertaining to the Collateral and
pertaining to the Borrower’s business and financial condition and submit to the
Secured Party such periodic reports concerning the Collateral and the Borrower’s
business and financial condition as the Secured Party may from time to time
reasonably request;

          (v) promptly notify the Secured Party of any loss of or material damage to any
Collateral or of any adverse change, known to the Borrower, in the prospect of
payment of any sums due on or under any instrument, chattel paper, or account
constituting Collateral;

          (vi) if the Secured Party at any time so requests (after the occurrence of an
Event of Default and only so long as such Event of Default continues), promptly
deliver to the Secured Party any instrument, document or chattel paper constituting
Collateral, duly endorsed or assigned by the Borrower;

          (vii) at all times keep all tangible Collateral insured against risks of fire
(including so-called extended coverage), theft, collision (in case of Collateral
consisting of motor vehicles) and such other risks and in such amounts as the
Secured Party may reasonably request, with any such policies containing a lender
loss payable endorsement acceptable to the Secured Party;

          (viii) from time to time authorize or execute such financing statements as the
Secured Party may reasonably require in order to perfect the Security Interest and,
if any Collateral consists of a motor vehicle, execute such documents as may be
required to have the Security Interest properly noted on a certificate of title;

          (ix) pay when due or reimburse the Secured Party on demand for all reasonable
out-of-pocket costs of collection of any of the Indebtedness and all other
reasonable out-of-pocket expenses (including in each case all reasonable

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attorneys’ fees) incurred by the Secured Party in connection with the creation,
perfection, satisfaction, protection, defense or enforcement of the Security
Interest or the creation, continuance, protection, defense or enforcement of this
Agreement or any or all of the Indebtedness, including expenses incurred in any
litigation or bankruptcy or insolvency proceedings;

          (x) authorize, execute, deliver or endorse any and all instruments, documents,
assignments, security agreements and other agreements and writings which the Secured
Party may at any time reasonably request in order to secure, protect, perfect or
enforce the Security Interest and the Secured Party’s rights under this Agreement;
and

          (xi) not use or keep any Collateral, or permit it to be used or kept, for any
unlawful purpose or in violation of any federal, state or local law, statute or
ordinance.

          (xii) Secured Party’s Right to Take Action. The Borrower authorizes
the Secured Party to file from time to time where permitted by law, such financing
statements against collateral described as “all personal property” as the Secured
Party deems necessary or useful to perfect the Security Interest. The Borrower will
not amend any financing statements in favor of the Secured Party except as permitted
by law. Further, if the Borrower at any time fails to perform or observe any
agreement contained in Section 3(h), and if such failure continues for a
period of ten (10) days after the Secured Party gives the Borrower written notice
thereof (or, in the case of the agreements contained in clauses (vii) and (viii) of
Section 3(h), immediately upon the occurrence of such failure, without
notice or lapse of time), the Secured Party may (but need not) perform or observe
such agreement on behalf and in the name, place and stead of the Borrower (or, at
the Secured Party’s option, in the Secured Party’s own name) and may (but need not)
take any and all other actions which the Secured Party may reasonably deem necessary
to cure or correct such failure (including, without limitation the payment of taxes,
the satisfaction of security interests, liens, or encumbrances, the performance of
obligations under contracts or agreements with account debtors or other obligors,
the procurement and maintenance of insurance, the execution of financing statements,
the endorsement of instruments, the qualification and licensing of the Borrower to
do business in any jurisdiction, and the procurement of repairs or transportation);
and, except to the extent that the effect of such payment would be to render any
loan or forbearance of money usurious or otherwise illegal under any applicable law,
the Borrower shall thereupon pay the Secured Party on demand the amount of all
moneys expended and all costs and expenses (including reasonable attorneys’ fees)
incurred by the Secured Party in connection with or as a result of the Secured
Party’s performing or observing such agreements or taking such actions, together
with interest thereon from the date expended or incurred by the Secured Party at the
highest

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rate then applicable to any of the Indebtedness. To facilitate the performance
or observance by the Secured Party of such agreements of the Borrower, the Borrower
hereby irrevocably appoints (which appointment is coupled with an interest) the
Secured Party, or its delegate, as the attorney-in-fact of the Borrower with the
right (but not the duty) from time to time to create, prepare, complete, execute,
deliver, endorse or file, in the name and on behalf of the Borrower, any and all
instruments, documents, financing statements, applications for insurance and other
agreements and writings required to be obtained, executed, delivered or endorsed by
the Borrower under this Section 3 and Section 4.

     4. Rights of Secured Party. At any time and from time to time, whether before or
after an Event of Default, the Secured Party may take any or all of the following actions:

     (a) Account Verification. The Secured Party may at any time and from time to
time send or require the Borrower to send requests for verification of accounts or
notices of assignment to account debtors and other obligors.

     (b) Direct Collection. After an Event of Default and only for so long as such
Event of Default continues, the Secured Party may notify any account debtor, or any
other Person obligated to pay any amount due, that such chattel paper, Account, or
other right to payment has been assigned or transferred to the Secured Party for
security and shall be paid directly to the Secured Party. At any time after the
Secured Party or the Borrower gives such notice to an account debtor or other
obligor (which right shall only exist after an Event of Default and for so long as
such Event of Default continues), the Secured Party may (but need not), in its own
name or in the Borrower’s name, demand, sue for, collect or receive any money or
property at any time payable or receivable on account of, or securing, any such
chattel paper, Account, or other right to payment, or grant any extension to, make
any compromise or settlement with or otherwise agree to waive, modify, amend or
change the obligations (including collateral obligations) of any such account debtor
or other obligor.

     5. Assignment of Insurance. The Borrower hereby assigns to the Secured Party, as
additional security for the payment of the Indebtedness, any and all moneys (including but not
limited to proceeds of insurance and refunds of unearned premiums) due or to become due under, and
all other rights of the Borrower under or with respect to, any and all policies of insurance
covering the Collateral, and the Borrower hereby directs the issuer of any such policy to pay any
such moneys directly to the Secured Party. After the occurrence of an Event of Default and only
for so long as such Event of Default continues, the Secured Party may (but need not), in its own
name or in the Borrower’s name and acting in a reasonable manner, execute and deliver proofs of
claim, receive all such moneys, endorse checks and other instruments representing payment of such
moneys, and adjust, litigate, compromise or release any claim against the issuer of any such
policy.

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     6. Events of Default. Each of the following occurrences shall constitute an event of
default under this Agreement (herein called “Event of Default”): (i) the Borrower shall
fail to pay any or all of the Indebtedness when due or (if payable on demand) on demand; or (ii)
the Borrower shall fail to observe or perform any covenant or agreement herein binding on it.

     7. Remedies upon Event of Default. Upon the occurrence of an Event of Default and at
any time thereafter, the Secured Party may exercise any one or more of the following rights and
remedies after Secured Party has given Borrower written notice of its intent to take such action
and only if the Borrower has not cured the Event of Default within ten (10) business days of such
written notice: (i) declare all unmatured Indebtedness to be immediately due and payable, and the
same shall thereupon be immediately due and payable, without presentment or other notice or demand;
(ii) exercise and enforce any or all rights and remedies available upon default to a secured party
under the UCC, including but not limited to the right to take possession of any Collateral,
proceeding without judicial process or by judicial process (without a prior hearing or notice
thereof, which the Borrower hereby expressly waives), and the right to sell, lease or otherwise
dispose of any or all of the Collateral, and in connection therewith, the Secured Party may require
the Borrower to make the Collateral available to the Secured Party at a place to be designated by
the Secured Party which is reasonably convenient to both parties, and if notice to the Borrower of
any intended disposition of Collateral or any other intended action is required by law in a
particular instance, such notice shall be deemed commercially reasonable if given (in the manner
specified in Section 9) at least ten (10) days prior to the date of intended disposition or
other action; (iii) exercise or enforce any or all other rights or remedies available to the
Secured Party by law or agreement against the Collateral, against the Borrower or against any other
Person or property. The Secured Party is hereby granted a nonexclusive, worldwide and royalty-free
license to use or otherwise exploit all Intellectual Property Rights owned by or licensed to the
Borrower that the Secured Party deems necessary or appropriate to the disposition of any
Collateral.

     8. Other Personal Property. Unless at the time the Secured Party takes possession of
any tangible Collateral, or within seven days thereafter, the Borrower gives written notice to the
Secured Party of the existence of any goods, papers or other property of the Borrower, not affixed
to or constituting a part of such Collateral, but which are located or found upon or within such
Collateral, describing such property, the Secured Party shall not be responsible or liable to the
Borrower for any action taken or omitted by or on behalf of the Secured Party with respect to such
property.

     9. Subordination to Future Lenders. From and after the Company’s shareholders approve
an increase in the Company’s authorized share capital currently scheduled to occur at the Company’s
2007 Annual Meeting of Shareholders, such that the Secured Party may convert the entire Production
Payment into Common Stock of the Borrower, the Secured Party agrees to subordinate its security
interest granted by the Security Agreement to the Company’s future lenders in an amount not to
exceed five million dollars ($5,000,000) for equipment financing and working capital credit
facilities and another five million dollars ($5,000,000) for project finance for the purpose of
further exploration, development, and mining operations on the

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Company’s mining properties. In such an event, the Secured Party agrees to execute a
subordination agreement and inter-creditor agreement with the Company’s future lenders as the
Company may reasonably request.

     10. Notices. All notices and other communications hereunder shall be in writing and
shall be given as set forth in Section 9.4 of the Purchase Agreement.

     11. Miscellaneous. This Agreement has been duly and validly authorized by all
necessary corporate action. This Agreement does not contemplate a sale of accounts, or chattel
paper.

     (a) Amendment and Waiver. This Agreement or any portion of this Agreement can
only be waived, modified, amended, terminated or discharged, and the Security
Interest can only be released, by an explicit and specific writing signed by the
Secured Party, and, in the case of amendment or modification, in a writing signed by
the Borrower. A waiver signed by the Secured Party shall be effective only in the
specific instance and for the specific purpose given. Mere delay or failure to act
shall not preclude the exercise or enforcement of any of the Secured Party’s rights
or remedies.

     (b) Rights Cumulative. All rights and remedies of the Secured Party shall be
cumulative and may be exercised singularly or concurrently, at the Secured Party’s
option, and the exercise or enforcement of any one such right or remedy shall
neither be a condition to nor bar the exercise or enforcement of any other.

     (c) The Secured Party’s duty of care with respect to Collateral in its
possession (as imposed by law) shall be deemed fulfilled if the Secured Party
exercises reasonable care in physically safekeeping such Collateral or, in the case
of Collateral in the custody or possession of a bailee or other third person,
exercises reasonable care in the selection of the bailee or other third person, and
the Secured Party need not otherwise preserve, protect, insure or care for any
Collateral. The Secured Party shall not be obligated to preserve any rights the
Borrower may have against prior parties, to realize on the Collateral at all or in
any particular manner or order, or to apply any cash proceeds of Collateral in any
particular order of application.

     (d) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Borrower and the Secured Party and their respective successors
and assigns and shall take effect when signed by the Borrower and delivered to the
Secured Party, and the Borrower waives notice of the Secured Party’s acceptance
hereof.

     (e) Secured Party’s Signature. The Secured Party may execute this Agreement if
appropriate for the purpose of filing, but the failure of the Secured

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Party to execute this Agreement shall not affect or impair the validity or
effectiveness of this Agreement. A carbon, photographic or other reproduction of
this Agreement or of any financing statement signed by the Borrower shall have the
same force and effect as the original for all purposes of a financing statement.

     (f) Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive laws (other than conflict laws) of the State of
Nevada.

     (g) Severability. If any provision or application of this Agreement is held
unlawful or unenforceable in any respect, such illegality or unenforceability shall
not affect other provisions or applications which can be given effect and this
Agreement shall be construed as if the unlawful or unenforceable provision or
application had never been contained herein or prescribed hereby.

     (h) Survival. All representations and warranties contained in this Agreement
shall survive the execution, delivery and performance of this Agreement and the
creation and payment of the Indebtedness.

     (i) Jurisdiction and Venue. The parties hereto hereby (i) consent to the
personal jurisdiction of the state and federal courts located in the State of
California in connection with any controversy related to this Agreement; (ii) waive
any argument that venue in any such forum is not convenient, (iii) agree that any
litigation initiated by the Secured Party or the Borrower in connection with this
Agreement or any related documents may be venued in either the state or federal
courts located in Sacramento, California; and (iv) agree that a final judgment in
any such suit, action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.

     11. Termination. This Agreement and the Security Interest shall terminate when all
the Indebtedness then due and owing have been paid in full, or when the production payment has been
converted in its entirety into shares of the Borrower’s Common Stock as contemplated by the
Purchase Agreement, at which time the Secured Party shall execute and deliver to the Borrower, all
Uniform Commercial Code termination statements and similar documents which the Borrower shall
reasonably request to evidence such termination.

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

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

	 	 	 	 	 
	CRESTVIEW CAPITAL MASTER LLC

a Delaware limited liability company

	 	GOLDEN PHOENIX MINERALS, INC.

a Minnesota corporation	 	 
	 
	 	 	 	 
	By: Crestview Capital Partners, its sole 

manager

	 	By: /s/ David A. Caldwell
 

Name: David A. Caldwell
	 	 
	 

	 	Title: CEO	 	 
	 
	 	 	 	 
	/s/ Stewart R. Flink
 
 Name:
Stewart R. Flink

	 	Address:	 	 
	Title: Manager
	 	 	 	 
	Address:

	 	1675 E. Prater Way, Suite 102 

Sparks, NV 89434	 	 
	 
	 	 	 	 
	95 Revere Drive, Suite A
	 	 	 	 
	Northbrook, IL 60062
	 	 	 	 

 

 

EXHIBIT A

LOCATION OF COLLATERAL

Exhibit A - 1

 

EXHIBIT B

LEGAL DESCRIPTION

Exhibit B - 1

 

EXHIBIT C

PERMITTED LIENS

Exhibit C - 1exv10w31

 

Exhibit 10.31

NOTICE OF ASSIGNMENT

Date of Exercise: June 13, 2007

William D. and Candida Schnack

9538 Hollow Creek Way

Elk Grove, CA 95624

Fax: (916) 686-4865

Crestview Capital Master, LLC

95 Revere Drive, Suite A

Northbrook, IL 60062

Attn: Adam Blonsky

(847) 559-5807

Bullivant Houser Bailey, PC

1415 L Street, Suite 1000

Sacramento, CA 95814

Attn: Scott E. Bartel, Esq.

Fax: (916) 930-2501

Lady and Gentlemen:

     This constitutes notice under the Advance Sales Restructuring Agreement (the “Restructuring
Agreement”), dated April 23, 2007, by and between Golden Phoenix Minerals, Inc., a Minnesota
corporation (“Golden Phoenix”) and William D. or Candida Schnack (collectively “Schnack”), that
Golden Phoenix elects to assign the option to purchase the production payment provided for in the
Restructuring Agreement to Crestview Capital Master LLC, a Delaware limited liability company
(“Crestview”) pursuant to the Production Payment Purchase Agreement and Assignment (the “Purchase
Agreement”), dated June 12, 2007, by and between Golden Phoenix and Crestview.

     Golden Phoenix further agrees to execute and deliver such other agreements as may be
reasonably requested by Schnack that are consistent with the foregoing or that are
necessary to give further effect thereto.

Very truly yours,

/s/ David A. Caldwell

David A. Caldwell

Chief Executive Officer

Golden Phoenix Minerals, Inc.

1675 East Prater Way, Suite 102

Sparks, NV 89434

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