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
2
<PAGE>
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 a
