Binding Memorandum of Understanding
Exhibit
10.3
Binding
Memorandum of Understanding
This is a
binding Memorandum of Understanding (MOU) between Golden Phoenix (GPXM) and
Win-Eldrich Gold Inc. (WEG) regarding the purchase of 100% of GPXM interest in
the Ashdown Project LLC (LLC). The general terms of this MOU are modified and
agreed to by the boards of GPXM and WEG as of February 28, 2009. The
MOU is subject to TSX venture approval and financing.
The terms
of the purchase include:
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WEG
agrees to pay GPXM $5,300,000 and assumes 100% of all obligations and
liabilities held by the Ashdown Project LLC unless otherwise
noted.
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GPXM
will hold a Note for the $5,300,000 purchase price with a 72 month
term.
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$1,500,000
of the Note will hold a first secured position against all assets of the
LLC and 100% of the Membership interest in the LLC and the remaining
$3,800,000 will be secured in a second
position.
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WEG
will have an additional $1,500,000 to assign in the first secured position
(total of $3,000,000) to accommodate new investors into the
Project. Assignment of this security will be at its sole
discretion.
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Interest
rate on the Note will be calculated on a quarterly basis at the prime plus
2% and capped at a maximum interest rate of 10% and will commence from the
date of the definitive agreement.
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No
principle payments are due until April 1,
2010.
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Interest
will begin to accrue April 1, 2009, and principle and interest payments
will be payable on a monthly basis beginning on April 1,
2010.
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Definitive
Purchase Agreement to close no later than April 1,
2009.
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All
litigation between the WEG and GPXM is terminated upon signing of the
definitive agreement.
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GPXM
will retain no (NSR) net smelter royalty encumbrance against the
property.
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GPXM
will have the right to appoint a representative to the WEX BOD, and WEX
will have the right to appoint a representative to the GPXM
BOD.
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/s/ Xxxxx X.
Xxxxxxxxx
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/s/ Xxxxx X.
Xxxxxx
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Xxxxx
X. Xxxxxxxx
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Xxxxx
X. Xxxxxx
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CEO
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President
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Win-Eldrich
Gold, Inc.
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2/25/2009
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2/25/2009
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/s/ Xxxxxx
Xxxxx
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Witness
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2/25/2009
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Binding
Employment Side Letter Agreement
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1.
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GPXM
will be responsible for any remaining contractual payments including
severance payments and expense reports due to Xxxx Xxxxxx and Xxxxx
Xxxxxxx.
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2.
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WEG
will be responsible for all payroll obligations that were made after
November 9th,
2008, including payment of all currently outstanding payroll taxes
due.
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3.
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Any
Employees hired and/or rehired after November 14th,
2008 will be the responsibility of
WEG.
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/s/ Xxxxx X.
Xxxxxxxxx
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/s/ Xxxxx X.
Xxxxxx
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Xxxxx
X. Xxxxxxxx
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Xxxxx
X. Xxxxxx
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CEO
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President
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Win-Eldrich
Gold, Inc.
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2/25/2009
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2/25/2009
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/s/ Xxxxxx
Xxxxx
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Witness
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2/25/2009
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Binding
Side Letter Agreement for Assumption of Liabilities and other
Issues
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1.
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All
documents including (accounting documents, permitting documents,
loan/lease documents, and any geological materials including maps, core
samples, and etc. pertaining to the project) in GPXM’s control relating to
Ashdown will need to be transferred over to
Win-Eldrich.
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2.
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Any
Equipment that GPXM is a guarantor on will need to have best efforts done
to remove them as guarantor as soon as reasonably possible. WEG
will notify GPXM if they lapse on current payment for any of the
lease/loan agreements.
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3.
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WEG
will be responsible for up to $100,000 of the payments and liabilities due
to Retrievers LLC. In return GPXM will get a release from
Retrievers LLC of all claims and title to the Ashdown
Mill. Retrievers LLC will then have the right to piggy back
onto GPXM’s security in the Ashdown
Property.
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4.
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GPXM
will be taking care of Ashdown Milling Company LLC’s production payment
contract and no NSRs will be attached to the
property.
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5.
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The
leased assets in Exhibit A will be transferred to Ashdown Project
LLC.
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6.
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All
Leases and Loans against the 2 Muckers, 2 Trucks, and 2 Telehandlers will
be maintained current and in good
standing.
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7.
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The
loan balance of $160,230 and any accrued interest between GPXM and Ashdown
Project LLC will be forgiven.
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8.
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GPXM
and WEG agree to evenly split all year-end costs for legal and accounting
related to the sale and to the preparation of the year-end financials
(including audit costs etc.).
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9.
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Any
unknown liabilities that may have been incurred prior to November 9th,
2008 and that may present themselves within the next twelve months will be
shared equally between GPXM and
WEG.
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10.
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GPXM
will have prepared a definitive agreement by no later than March 6,
2009.
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/s/ Xxxxx X.
Xxxxxxxx
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/s/ Xxxxx X.
Xxxxxx
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Xxxxx
X. Xxxxxxxx
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Xxxxx
X. Xxxxxx
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CEO
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President
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Win-Eldrich
Gold, Inc.
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2/25/2009
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2/25/2009
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/s/ Xxxxxx
Xxxxx
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Witness
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2/25/2009
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Golden
Phoenix Minerals
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Assets
Leased to Ashdown Project
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Exhibit
"A"
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Description
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ID
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LPN
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Mucker
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Driscopipe
Welder
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2004
GMC w/camper shell - silver
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0XXXX00X000000000
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030RVB
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2002
C&B Utility Trailer
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0XXXX00000X000000
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46368M
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2001
GMC Sierra K1500 - xxxx
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0XXXX00XX0X000000
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467NVE
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2001
GMC Sierra - blue
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0XXXX00XX0X000000
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466NVE
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1999
Chev 1 Ton Crewcab - white
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0XXXX00X0XX000000
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015PYW
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1991
Dodge Ram Wagon - Red
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2B5WB35ZOMK457711
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166SEA
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Whisperwatt
25KVA Generator
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MQ25
3664809
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1989
Ford Xxx - xxx
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0X0XX00X0XXX00000
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715SVK
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Total
Lease Cost
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