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EXHIBIT 10.7
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") dated as of July 14,
2004, by Gold
and Minerals Co. Inc. a Nevada corporation, or it's assigns
("Seller") Mr. Larry
Lozensky (President) and EL Capitan Precious Metals, Inc., a
Nevada corporation
("Buyer") Mr. Charles C. Mottley (CEO), is made with reference
to the following
facts.
A. Seller owns certain assets, including mining claims granted
by the United
States Bureau of Land Management (the claims) including rights
under
certain contracts, known as the Weaver Mine which is more fully
set forth
in Exhibit A attached hereto (the Quit Claim deed).
B. Buyer is desirous of acquiring the Purchased Assets and of
assuming all of
Sellers right, title and interest in and to the Weaver Creek
mining
claims.
NOW, THEREFORE, in consideration of the mutual agreements,
warranties and
representations contained in this agreement, the parties hereby
agree as
follows.
1. "Purchase Assets." Seller agrees to sell and transfer, and
Buyer agrees to
purchase the Purchased Assets free and clear of all liens,
claims and
encumbrances by delivery of a "Quit-Claim" deed substantially in
the form of
Exhibit A attached.
2. "Assignment of Rights." Seller will assign and Buyer will
accept and assume
all of Seller's rights, title and interest in and to the Weaver
Creek mining
claims.
3.1 "Purchase Price." The purchase price for the Purchased
Assets shall be the
issuance to Seller of One Million (1,000,000) shares of the
common stock of EL
Capitan Precious Metals, Inc. common stock effective
immediately.
3.2 BUYER SHALL NOT ASSUME OR BE RESPONSIBLE FOR ANY LIABILITIES
OR OBLIGATIONS
OF SELLER INCLUDING WITHOUT LIMITATION, ANY LIABILITIES WHICH
SELLER HAS
OBLIGATED TO SATISFY PRIOR TO CLOSING DATE, OR FOR ANY FEDERAL,
STATE OR LOCAL
TAX LIABILITY OF THE SELLER.
4. Closing. The consummation of the transactions contemplated by
the Agreement
(the "Closing") will take place at the offices of Gold &
Minerals Inc. July 14,
2004 or at such other date and time as Buyer and Seller agree
(the "Closing
Date"). At the closing, Seller shall deliver to Buyer the
Quit-claim Deed, and
such Bills of Sale, Assignments and Instruments of Transfer and
Conveyance as
shall be reasonably be required by Buyer for the transfer to
Buyer of all right,
title and interest of Seller in, to and under the Purchased
Assets and the
Mining Business. Each party shall also deliver to each other
such Officer
Certificates and other instruments as the other party shall
reasonably request.
Upon delivery of all of the foregoing, the Deposit shall be
applied to, and
Buyer shall make delivery of the Shares as provided in foregoing
Section 3:1 and
the transaction shall be closed.
5. Other Agreements of the Seller.
(a) Investigation. Seller shall allow Buyer and its
representatives and
persons or entitles which may provide financing for Buyer in
connection
with the transactions contemplated hereby, at all reasonable
times, full
access during normal business hours to all stores, warehouses,
operations,
machinery equipment, inventories property, offices, books,
contracts,
commitments, records and affairs of the Seller and the Mining
Business,
and reasonable access to third parties having business dealings
with the
Seller, for the purpose of familiarizing themselves with the
operation and
conduct of all aspects of their business and for the purpose of
reasonable
inspection, examination, audit, counting and copying such access
shall not
unreasonably interfere with the operation and conduct of the
Mining
Business.
6. Representation of the Seller. Seller and the Principals
hereby jointly and
severally represent and warrant to Buyer as follows:
(a) Organization of Authority. Seller is a corporation duly
organized, validly
existing and in good standing under the laws of the State of
Nevada. This
Agreement has been duly authorized by all requisite corporate
action on
the part of the Seller, and constitutes the valid, binding
enforceable
obligation of Seller and the Principals.
(b) Title to the Purchase Assets. Seller is the lawful owner and
has good and
marketable title to all of the Purchased Assets unto Buyer and
its
successors and assigns against claims of any third parties.
Seller has
authority to sell and transfer the Purchased Assets, which are
(i) free
and clear from any liens or encumbrances, and (ii) are in good
operating
condition and repair, ordinary wear and tear accepted and are
usable in
the ordinary course of business.
(c) Seller's Liabilities. Seller does not have any liability or
obligation
(direct or indirect, contingent or absolute, known or unknown,
mature or
unmatured of any nature whatsoever, whether arising out of
contract, tort,
statute or other ("Liabilities"), except (i) as specifically
disclosed in
Schedule _____ attached here to (ii) Liabilities incurred in the
ordinary
course of business which will not individually or in the
aggregate be
materially adverse to, or result in a material increase in the
current or
long term Liabilities or obligations of Seller. To the best
knowledge of
the Principals, upon due inquiry, there is no basis for
assertion against
Seller of any Liabilities accept for Liabilities.
(d) Compliance with Laws. Seller has complied with and is not in
default under
any applicable law, ordinance regulation or order, the violation
of which
would materially and adversely affect the Purchased Assets or
Contracts.
There is no litigation proceeding or investigation pending or
known to be
threatened which might materially and adversely effect the
Purchased
Assets, the Claims or the Mining Business. Seller holds all of
the
franchises, permits and licenses reasonably necessary to enable
it to
operate the Mining Business as presently conducted.
(e) The Claims. The claims are legal, valid, binding and
enforceable claims
granted by the United States Bureau of Land management to Seller
and to
the knowledge has any other party thereto, violated any
provision thereof
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and complete copies of all of the Claims disclosed on Exhibit A
of this
Agreement have been delivered to Buyer. Except as set forth on
Schedule
_____ none of the Claims is subject to modification, lapse or
termination
not as the consent of any party required, as result of the
execution and
delivery of this agreement or the consummation of the
transaction it
contemplates.
(f) Taxes. Seller has duly filed all federal, state, local and
foreign tax
returns necessary to be filed by it and has duly paid all taxes
(including
any interest or penalties) which are or will be due or payable
with
respect to taxes. There are no known or proposed penalty,
interest or
deficiency assessments with respect to taxes that require
payment by,
relate to or could adversely affect the purchased assets.
(g) Real Estate and Leases. There is disclosed in Schedule _____
(a
description of all real estate (including buildings and
improvements)
owned or leased by Seller according to the character of the
property and
the location thereof. Seller is not and, to the best knowledge
of the
Principals, no other party thereto, is in default in any
material respect
under any real property lease nor has any event occurred which
with the
passage of time or giving of notice or both would constitute
such a
default. No encumbrances have been placed, or have been
permitted to be
placed by the Principals, the Seller or any of their affiliates
on the
real property. Except as disclosed on Schedule ___ the real
property and
the buildings thereon owned or utilized by the Corporations in
the conduct
of the Corporations do not violate any building, zoning or other
laws or
ordinances, or any agreements, applicable thereto, and no notice
of any
such violation or claimed violation or of any condemnation
proceedings has
been received by the Seller or the Principals.
(h) Environmental Matters. Except as disclosed in Schedule _____
to the best
knowledge of Seller and the Principals after due inquiry and
investigation
(i) the Purchased Assets materially comply with any law or
regulation
governing the protection of the environment (including air,
water, soil
and natural resources) or the use storage handling release or
disposal of
any hazardous or toxic substance ("Environmental Laws"), (ii)
Seller has
not received any written notice from any federal, state,
county,
municipal, local or foreign government and any governmental
agency,
bureau, co
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