EXHIBIT 10.1

AGREEMENT OF EXCHANGE

This AGREEMENT OF EXCHANGE (this “Agreement”) is made effective as of March 30,
2017 between El Capitan Precious Metals, Inc., a Nevada corporation (the
“Company”), and Connelly Land LLC, a Minnesota limited liability company
(“Noteholder”).

BACKGROUND

A.
On October 17, 2014, the Company issued that certain 8% Secured Promissory Note
in favor Noteholder in the original principal amount of $500,000 (the “Note”).

B.
As of the date hereof, the aggregate amount of principal and accrued but unpaid
interest outstanding under the Note is $256,027.38 (the “Outstanding Balance”).

C.
The Company and Noteholder each desire that the Note be exchanged for shares of
the Company’s common stock, $0.001 par value per share (the “Common Stock”), on
the terms set forth in this Agreement.

NOW, THEREFORE, the parties hereto agree as follows:

1.          The Company and Noteholder hereby agree that as of the date hereof,
the Note is being exchanged in its entirety for (i) shares of Common Stock at an
exchange rate of $0.08126 per share (with any fractional shares being rounded up
to nearest full share), resulting in the issuance to Noteholder of a total of
3,150,719 shares of Common Stock (the “Exchange Shares”), and (ii) a five year
warrant to purchase 250,000 shares of Common Stock at $0.08126 per share, in
substantially the form attached as Exhibit A (the “Warrant”) (the exchange
contemplated by this Agreement is referred to herein as the “Exchange”).

2.          Effective upon the Exchange: (a) Noteholder agrees that the
Company’s obligations and liabilities under the Note will be satisfied and
fulfilled in full and the Note will be null and void and have no further force
or effect, (b) any and all security interests, mortgages, liens and other
encumbrances that Noteholder may have in or against any property, real or
personal, of the Company, including under that certain Security Agreement dated
as of October 17, 2014 by and between the Company and Noteholder (the “Liens”),
will be released, terminated and satisfied in full, and (c) the Company will be
authorized to make such filings with governmental agencies or other appropriate
offices in order to satisfy, release and terminate the Liens.

3.          Noteholder’s delivery of the original Note to the Company for
cancellation shall not be required to effect the Exchange.  Execution and
delivery of this Agreement shall have the same effect as cancellation of such
original Note.

4.          The Company shall promptly issue or cause to be issued and cause to
be delivered to Noteholder a certificate for the Exchange Shares or, upon the
written request of Noteholder, use its best efforts to deliver, or cause to be
delivered, the Exchange Shares electronically through The Depository Trust
Company or another established clearing corporation performing similar
functions, if available without undue hardship. The Company shall also promptly
deliver the Warrant to Noteholder.
 
 

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5.            By signing and delivering this Agreement, Noteholder hereby
represents and warrants to the Company that:

(a)          Noteholder has been advised that the issuance of Conversion Shares
and the Warrant is not being registered under the Securities Act or applicable
state securities laws but is being offered and sold pursuant to exemptions from
such laws and that the Company’s reliance upon such exemptions is predicated in
part on Noteholder’s representations contained herein.

(b)          Except for the cancellation and exchange of the Note, Noteholder is
not providing additional consideration to the Company in connection with the
Exchange.

(c)          Noteholder has been given access to full and complete information
regarding the Company and has used such access to Noteholder’s satisfaction for
the purpose of obtaining information relevant and appropriate to Noteholder’s
investment decision, and Noteholder has either met with or been given reasonable
opportunity to meet with officers, directors and other representatives of the
Company for the purpose of asking questions of, and receiving answers from, such
officers, directors and other representatives concerning the Company and the
current and proposed business and operations of the Company and to obtain any
additional information, to the extent reasonably available.

(d)          Noteholder recognizes that an investment in the Exchange Shares and
the Warrant is speculative and involves a high degree of risk including, but not
limited to, the risk of the total loss of Noteholder’s  investment in the
Company.

6.     Miscellaneous.

(a)          This Agreement shall be governed, construed and interpreted in
accordance with the Laws of the State of Nevada, without giving effect to
principles of conflicts of law or choice of law that would cause the substantive
laws of any other jurisdiction to apply.

(b)          This Agreement constitutes the entire agreement among the parties
relative to the specific subject matter hereof and thereof.

(c)          In the event one or more of the provisions of this Agreement
should, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein.

(d)          Each party represents and warrants that no agent, broker,
investment banker, person or firm acting on behalf of or under the authority of
such party is or will be entitled to any broker’s or finder’s fee or any other
commission directly or indirectly in connection with the transactions
contemplated herein.
 
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(e)          Each party shall, at any time and from time to time, upon request
of the other and without additional consideration, will do, execute, acknowledge
and deliver, or will cause to be done, executed, acknowledged and delivered, all
such further acts, deeds, assignments, transfers, conveyances and assurances as
may be reasonably required to effect the transactions contemplated by this
Agreement.

(f)          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
one and the same instrument. Delivery of an executed counterpart of this
Agreement may be made by means of a facsimile machine or as an attachment in
“pdf” or similar format to an electronic mail message.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date set forth in the first paragraph hereof.

 
EL CAPITAN PRECIOUS METALS, INC.
                   
By:
/s/ John F. Stapleton
 
Name:
    John F. Stapleton
 
Title:
    Chief Executive Officer

 
CONNELLY LAND LLC
                   
By:
/s/ Jason Connelly
 
Name:
    Jason Connelly
 
Title:
    President

 
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Exhibit A

Form of Warrant
 
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The Warrant and the securities issuable upon exercise of this Warrant (the
“Securities”) have not been registered under the Securities Act of 1933 (the
“Securities Act”) or under any state securities or Blue Sky laws (“Blue Sky
Laws”).  No transfer, sale, assignment, pledge, hypothecation or other
disposition of this Warrant or the Securities or any interest therein may be
made except (a) pursuant to an effective registration statement under the
Securities Act and any applicable Blue Sky Laws or (b) if the Company has been
furnished with both an opinion of counsel for the holder, which opinion and
counsel shall be reasonably satisfactory to the Company, to the effect that no
registration is required because of the availability of an exemption from
registration under the Securities Act and applicable Blue Sky Laws, and
assurances that the transfer, sale, assignment, pledge, hypothecation or other
disposition will be made only in compliance with the conditions of any such
registration or exemption.
 

WARRANT TO PURCHASE SHARES OF COMMON STOCK OF
EL CAPITAN PRECIOUS METALS, INC.

March 30, 2017
 
Warrant No. 2017-1
250,000 Shares

   
This certifies that, for value received, Connelly Land LLC, a Minnesota limited
liability company, or its successors or assigns (“Holder”), is entitled to
purchase from El Capitan Precious Metals, Inc., a Nevada corporation (the
“Company”) Two Hundred Fifty Thousand (250,000) fully paid and nonassessable
shares (the “Shares”) of the Company’s common stock (the “Common Stock”) at an
exercise price of $0.08126 per Share (the “Exercise Price”), subject to
adjustment as herein provided.  This Warrant has been issued to the Holder by
the Company pursuant to that certain Agreement of Exchange dated even with the
date hereof.  This Warrant may be exercised by Holder at any time after the date
hereof; provided, however, that Holder shall in no event have the right to
exercise this Warrant or any portion hereof later than March 30, 2022.

This Warrant is subject to the following provisions, terms and conditions:

1.          Exercise of Warrant.  The rights represented by this Warrant may be
exercised by the Holder, in whole or in part (but not as to a fractional share
of Common Stock), by the surrender of this Warrant (properly endorsed, if
required) at the Company’s principal executive office, or such other office or
agency of the Company as the Company may designate by notice in writing to the
Holder at the address of such Holder appearing on the books of the Company, and
upon payment to it by certified check, bank draft or cash of the purchase price
for such Shares.  The Company agrees that the Shares so purchased shall have and
are deemed to be issued to the Holder as the record owner of such Shares as of
the close of business on the date on which this Warrant shall have been
surrendered and payment received for such Shares as aforesaid.  Certificates for
the Shares of Common Stock so purchased shall be delivered to the Holder within
a reasonable time, not exceeding ten (10) business days, after the rights
represented by this Warrant shall have been so exercised, and, unless this
Warrant has expired, a new Warrant representing the number of Shares, if any,
with respect to which this Warrant shall not then have been exercised shall also
be delivered to the Holder within such time.  The Company may require that any
such new Warrant or any certificate for Shares purchased upon the exercise
hereof bear a legend substantially similar to that which is contained on the
face of this Warrant.
 
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2.             Transferability of this Warrant.  This Warrant is issued upon the
following terms, to which Holder consents and agrees:

(a)          Until this Warrant is transferred on the books of the Company, the
Company will treat the Holder of this Warrant registered as such on the books of
the Company as the absolute owner hereof for all purposes without being affected
by any notice to the contrary.
 
(b)          This Warrant may not be exercised, and this Warrant and the Shares
underlying this Warrant shall not be transferable, except in compliance with all
applicable state and federal securities laws, regulations and orders, and with
all other applicable laws, regulations and orders.
 
(c)          Prior to making any disposition of this Warrant or of any of the
Shares underlying this Warrant, the Holder will give written notice to the
Company describing the manner of any such proposed disposition.  The Warrant may
not be transferred, and the Shares may not be transferred, without the Holder
obtaining an opinion of counsel satisfactory in form and substance to the
Company’s counsel stating that the proposed transaction will not result in a
prohibited transaction under the Securities Act of 1933, as amended (“Securities
Act”), and applicable Blue Sky Laws.  By accepting this Warrant, the Holder
agrees to act in accordance with any conditions reasonably imposed on such
transfer by such opinion of counsel.
 
(d)          Neither this issuance of this Warrant nor the issuance of the
Shares underlying this Warrant has been registered under the Securities Act.
 
3.             Certain Covenants of the Company.  The Company covenants and
agrees that all Shares which may be issued upon the exercise of the rights
represented by this Warrant, upon issuance and full payment for the Shares so
purchased, will be duly authorized and issued, fully paid and nonassessable and
free from all taxes, liens and charges with respect to the issue thereof, except
those that may be created by or imposed upon the Holder or its property.  The
Company further covenants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized and reserved a sufficient number of shares of its Common
Stock to provide for the exercise of the rights represented by this Warrant.
 
4.             Adjustment of Exercise Price and Number of Shares.  The Exercise
Price and number of Shares are subject to the following adjustments:

(a)          Adjustment of Exercise Price for Stock Dividend, Stock Split or
Stock Combination.   In the event that (i) any dividends on any class of stock
of the Company payable in Common Stock or securities convertible into or
exercisable for Common Stock (“Common Stock Equivalents”) shall be paid by the
Company, (ii) the Company shall subdivide its then outstanding shares of Common
Stock into a greater number of shares, or (iii) the Company shall combine its
outstanding shares of Common Stock, by reclassification or otherwise, then, in
any such event, the Exercise Price in effect immediately prior to such event
shall (until adjusted again pursuant hereto) be adjusted immediately after such
event to a price (calculated to the nearest full cent) determined by dividing
(a) the number of shares of Common Stock outstanding immediately prior to such
event, multiplied by the then existing Exercise Price, by (b) the total number
of shares of Common Stock outstanding immediately after such event, and the
resulting quotient shall be the adjusted Exercise Price per share.  No
adjustment of the Exercise Price shall be made if the amount of such adjustment
shall be less than $.01 per share, but in such case any adjustment that would
otherwise be required then to be made shall be carried forward and shall be made
at the time and together with the next subsequent adjustment which, together
with any adjustment or adjustments so carried forward, shall amount to not less
than $.01 per share.
 
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(b)          Adjustment of Number of Shares Purchasable on Exercise of
Warrants.  Upon each adjustment of the Exercise Price pursuant to this Section,
the Holder shall thereafter (until another such adjustment) be entitled to
purchase at the adjusted Exercise Price the number of shares, calculated to the
nearest full share, obtained by multiplying the number of shares specified in
such Warrant (as adjusted as a result of all adjustments in the Exercise Price
in effect prior to such adjustment) by the Exercise Price in effect prior to
such adjustment and dividing the product so obtained by the adjusted Exercise
Price.
 
(c)          Notice as to Adjustment.  Upon any adjustment of the Exercise Price
and any increase or decrease in the number of shares of Common Stock purchasable
upon the exercise of the Warrant, then, and in each such case, the Company
within thirty (30) days thereafter shall give written notice thereof, by first
class mail, postage prepaid, addressed to each Holder as shown on the books of
the Company, which notice shall state the adjusted Exercise Price and the
increased or decreased number of shares purchasable upon the exercise of the
Warrants, and shall set forth in reasonable detail the method of calculation and
the facts upon which such calculation is based.
 
(d)          Effect of Reorganization, Reclassification, Merger, etc.  If at any
time while this Warrant is outstanding there should be any capital
reorganization of the capital stock of the Company (other than the issuance of
any shares of Common Stock in subdivision of outstanding shares of Common Stock
by reclassification or otherwise and other than a combination of shares provided
for in Section 4(a) hereof), or any consolidation or merger of the Company with
another corporation, or any sale, conveyance, lease or other transfer by the
Company of all or substantially all of its property to any other corporation,
which is effected in such a manner that the holders of Common Stock shall be
entitled to receive cash, stock, securities, or assets with respect to or in
exchange for Common Stock, then, as a part of such transaction, lawful provision
shall be made so that Holder shall have the right thereafter to receive, upon
the exercise hereof, the number of shares of stock or other securities or
property of the Company, or of the successor corporation resulting from such
consolidation or merger, or of the corporation to which the property of the
Company has been sold, conveyed, leased or otherwise transferred, as the case
may be, which Holder would have been entitled to receive upon such capital
reorganization, reclassification of capital stock, consolidation, merger, sale,
conveyance, lease or other transfer, if such Warrant had been exercised
immediately prior to such capital reorganization, reclassification of capital
stock, consolidation, merger, sale, conveyance, lease or other transfer.  In any
such case, appropriate adjustments (as determined by the Board of Directors of
the Company) shall be made in the application of the provisions set forth in
this Warrant (including the adjustment of the Exercise Price and the number of
Shares issuable upon the exercise of the Warrants) to the end that the
provisions set forth herein shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
deliverable upon the exercise of this Warrant as if this Warrant had been
exercised immediately prior to such capital reorganization, reclassification of
capital stock, such consolidation, merger, sale, conveyance, lease or other
transfer and Holder had carried out the terms of the exchange as provided for by
such capital reorganization, consolidation or merger.  The Company shall not
effect any such capital reorganization, consolidation, merger or transfer
unless, upon or prior to the consummation thereof, the successor corporation or
the corporation to which the property of the Company has been sold, conveyed,
leased or otherwise transferred shall assume by written instrument the
obligation to deliver to Holder such shares of stock, securities, cash or
property as in accordance with the foregoing provisions Holder shall be entitled
to purchase.

5.          No Rights as Stockholders.  This Warrant shall not entitle the
Holder as such to any voting rights or other rights as a shareholder of the
Company.
 
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6.          Governing Law.  This Warrant shall be governed, construed and
interpreted in accordance with the Laws of the State of Nevada, without giving
effect to principles of conflicts of law or choice of law that would cause the
substantive laws of any other jurisdiction to apply.

7.          Amendments and Waivers.  The provisions of this Warrant may not be
amended, modified or supplemented, and waiver or consents to departures from the
provisions hereof may not be given, unless the Company agrees in writing and has
obtained the written consent of the Holder.

8.          Notices.  All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to the Holder
shall be mailed, delivered, or telefaxed and confirmed to the Holder at his or
her address set forth on the records of the Company; or if sent to the Company
shall be mailed, delivered, or telefaxed and confirmed to El Capitan Precious
Metals, Inc., 5871 Honeysuckle Road, Prescott, Arizona 86305-3764, Attention:
Chief Financial Officer, or to such other address as the Company or the Holder
shall notify the other as provided in this Section.

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IN WITNESS WHEREOF, El Capitan Precious Metals, Inc. has caused this Warrant to
be signed by its duly authorized officer in the date set forth above.

 
EL CAPITAN PRECIOUS METALS, INC.:
                   
By:
/s/ John F. Stapleton
 
Name:
    John F. Stapleton
 
Title:
    Chairman & CEO

 
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SUBSCRIPTION FORM

To be signed only upon exercise of Warrant.

The undersigned, the holder of the within Warrant, hereby irrevocably elects to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder, ____________________ of the shares of Common Stock of El Capitan
Precious Metals, Inc. (the “Shares”)  to which such Warrant relates and herewith
makes payment of $_____________ therefor in cash, certified check or bank draft
and requests that a certificate evidencing the Shares be delivered to,
_____________________________, the address for whom is set forth below the
signature of the undersigned:

Dated: ____________________

 
 
 
 (Signature)
         
 (Address)

 
v   v   v

ASSIGNMENT FORM

To be signed only upon authorized transfer of Warrant.

FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto
_____________________________________ the right to purchase shares of Common
Stock of El Capitan Precious Metals, Inc. to which the within Warrant relates
and appoints ____________________ attorney, to transfer said right on the books
of _________________ with full power of substitution in the premises.

Dated: ____________________
 
 

 
 
 
 (Signature)
         
 (Address)

 

 

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