Document:

AXM Pharma, Inc. 8-K/A

                            No. 71012005280009

Shanghai Pudong Development Bank

Agreement of Mortgage of Maximum Amount for Real Estate

Mortgagor: AXM Pharma (Shenyang), Inc. 

Legal Address: No.2 Feiyun Road, Hunnan New District, Shenyang city 

Address: 

Mortgagee: Shanghai Pudong Development Bank, Shenyang branch 

Address: No. 158 Qingnian Street, Shenhe district, Shenyang city 

Whereas AXM Pharma (Shenyang) Inc. (hereinafter “borrower”) and the mortgagee (the lender) signed a series of loan agreements (hereinafter “loan agreements”) according to the term and the amount of creditor’s right in clause 2.1 under the agreement. In order to ensure the implementation of the creditor’s right, the mortgagor would take the following property as mortgaged property and entitle the mortgagee to have priority in satisfying his claim. After negotiation on equal basis, the following agreement was reached by both parties to abide by. 

Clause I Mortgaged Property 

1.1

The mortgaged property under the agreement is as follows: 

Name: the engineering project under construction and the land-use right of the state-owned land 

Location: No.2 –101 to 2-107, Feiyun Road, Hunnan New District, Shenyang City

Type: 

Structure: 

Area: 15202 M2 

Condition: 

Assessed value: RMB 41,529,000

Ownership: 

Ownership of the right to use: 

Number of right certificate: 

1.2

The effect of the right of mortgage shall not only on the above mortgaged property, but also on its appurtenant, subordinative right, subrogation right on the property,

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attachment, things connected and fruits. 

1.3

Provided the mortgagor is in the procedure of bankruptcy, the mortgaged property under the agreement shall not be listed in the properties to be bankrupted. 

Clause II Mortgage Creditor’s Right  

2.1 Principal claim 

The principal claim secured under the agreement is the loan principal that was provided continuously by the lender as per a series of agreements signed in the period of January 14, 2005 to January 11, 2006 between the borrower and the lender, with the maximum amount no higher than          (currency) twenty million (amount in words). The effective certificate for the debt of the borrower shall be the accounting documents provided by the lender according to business operation. The “expire” in the agreement includes the expiration of each principal claim and the expiration ahead of schedule claimed by the lender. 

2.2 The scope of the guaranty 

The scope of the guaranty of mortgage under the agreement includes not only the above principal claim, but also the interests, liquidated penalty, compensation, layer fee paid for the enforcement of mortgage right, litigation fee and other related fee generated. 

2.3 Nature of the guaranty 

(1) The mortgagee is entitled to the priority of compensation from the mortgaged property. When the mortgagee executive his rights under the agreement, he need not recourse to the lender or other guarantor, instead he has priority in satisfying his claim from the proceeds of the property in accordance with the provisions of the Law. 

(2) The suretyship liability of the mortgagor under the agreement shall be independent, irrevocable and unconditional. The mortgage agreement shall not be influenced by the effect of the main contract and shall not be invalid and revocable with the invalid and revocable of the main contract. The suretyship liability of the mortgagor shall not change with the loan extension and reorganization agreed by the lender, nor the change of loan agreement negotiated by the lender and the borrower, nor the change of administration or operation system of the borrower or mortgagor. 

Clause III Notarization and Mortgage Registration 

3.1 The signing of the agreement shall be notarized in notary public appointed by the mortgagee. And the forcible notarization shall be implemented according to the need of the mortgagee. 

3.2 Within 30 days after the notarization (provided the mortgagee claimed clearly that 

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the notarization is not necessary, then the term shall begin upon the signing of the contract), the mortgagor shall fulfill mortgage registration to the real estate registration department which governs according to the administration right of real estate registration. When the mortgage certificate is issued, the mortgagor shall immediately deliver the original of mortgage certificate and / or the original of mortgaged property certificate to the mortgagee. 

3.3 Provided the mortgagor takes the house to be built as mortgaged property, and the house completed during mortgage term, the mortgagor shall re-registration the mortgage within 30 days upon the receiving of ownership certificate of the house. 

3.4 Provided the agreement terminates as per clause VIII of the contract, or the otherwise consent of the mortgagee, the mortgagee shall return the above documents and other related rights documents to the mortgagor as per the requirement of the mortgagor, and fulfill the write-off procedure in the original real estate registration organ with the mortgagor. 

3.5 All the expense generated under the clause shall be borne on the mortgagor. 

Clause IV Insurance 

4.1 As for the mortgaged property that has been insured, the transmission procedure shall be fulfilled within 5 days upon the signing of the contract, with the mortgagee to be the first beneficiary. As for the mortgaged property that has not been insured or not in compliance with the requirement of the mortgagee, the mortgagor shall go to the insurance company appointed by the mortgagee within 5 days upon the signing of the contract and fulfill the insurance procedure according to the category, term and sum of the insurance, with the mortgagee as the first beneficiary. The above insurance term shall be longer than the term of the loan agreed in the main contract. Provided that the loan in the main contract extend, the mortgagor shall fulfill the procedure of prolonging the insurance term. 

4.2 The mortgagor shall pay all the insurance fee in time, and shall deliver the original of insurance policies and documents to the mortgagee. 

4.3 Without the written consent of the mortgagee, the mortgagor shall not revise or change any clause of the insurance policy or make any change to the insurance policy and shall not terminate or cancel the insurance, or let or allow the insurance to be cancelled, terminated, overdue, ineffective without taking any measure. 

4.4 Provided the mortgagor did not insure the mortgaged property in time or active protect the insurance, the mortgagee is entitled to insure the mortgaged property and / or protect the insurance. The expense generated shall be borne on the mortgagor. Though it is such specified, the mortgagee has no the liability to insure and protect the mortgaged property for the mortgagor. 

4.5 Provided insurance accident occurred to the insured mortgaged property, the 

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mortgagee is entitled the priority to collect the principal, interests and related fee of the mortgage loan from insurance compensation. 

Clause V Representations and warranties 

The mortgagor represents and warrants as follows to the mortgagee, which will continue effective during the term of the agreement. 

5.1 The mortgagor is an enterprise legal person duly organized and registered under the law of P.R.C, which has the power and authority to own its property, has full civil capacity and can shoulder external civil liability independently. 

5.2 The representative is authorized by the mortgagor to sign the agreement. The clauses in the agreement expressed the true intention of the borrower and shall be legal binding to the borrower. 

5.3 The mortgagor’s signing and implement of the agreement shall not against the law, regulations, rules, adjudication, verdict and commands that shall be abided by, and shall not conflict with the constitution of the borrower or any contracts, agreement signed by the borrower or any other liabilities that shall be shouldered by the borrower. 

5.4 All the documents and materials in connection with the agreement are true, effective, complete and accurate, and any information has not been withheld. 

5.5 The mortgagor guarantees his full legal rights of ownership and disposal to the mortgaged property and there is no mortgage of any form (except specified in the agreement otherwise), rental (except claimed in advance in written to the mortgagee and received consent of the mortgagee), trusteeship or intercommunity on the mortgaged property upon the signing of the agreement, and no any forms of disagreement of ownership, legal limitation and other default of rights. 

Clause VI Covenants 

The mortgagor and the mortgagee further reached the covenants as follows: 

6.1 The mortgaged property shall be in custody of the mortgagor. During the custody period, the mortgagor shall keep the mortgaged property safe and undamaged and shall perform the liabilities of maintenance and repair, pay the tax and fees related to the mortgaged property and mortgage. 

6.2 The mortgagee is entitled to inspect and supervise the mortgagor’s operational condition, the use and custody of the mortgaged property at any time during the period of mortgage. The mortgagor shall actively cooperate. 

6.3 Without the written consent of the mortgagee, the mortgagor shall not sell, transfer, donate, lease, exchange, re-mortgage or dispose the mortgaged property in other way, nor shall the mortgagor re-construct, demolish or change the usage nature of 

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the mortgaged property in other way. 

6.4 Provided that the action of the mortgagor is enough to decrease the value of the mortgaged property, the mortgagee is entitled to ask the mortgagor to stop his action. When the value of the mortgaged property decreased, the mortgagee is entitled to ask the mortgagee to restore its value or to provide guarantee that equal to the value decreased agreed by the mortgagee. 

6.5 Provided that the mortgaged property’s loss, destruction and decrease in value is not caused by the fault of mortgagor, or the mortgaged property is legally listed in the scope of demolishment because of the national construction, the mortgagor shall inform the mortgagee immediately and take effective measures to prevent the expansion of the loss. The mortgagee is entitled the subrogation right on the property on the received compensation and other proceeds. 

6.6 Provided that the mortgagee considers it is necessary, he can appoint an assessment organ legally established to assess the value of mortgaged property. The expense generated shall be borne on the mortgagor. 

6.7 Shall any of the condition occurred that may influence the ability of guarantee responsibility, the mortgagor guarantees to inform the mortgagee in written within three days after he is known the situation. 

Clause VII  Realization of Hypothec 

7.1

In following cases, the monrtgagee may be compensated by the price of pledge or guaranty traded in or auctioned or sold off via mutual negotiation; and if such negotiation fails, the pledge has the right to present a suit to an appropriate people’s court for judgment: when the monrtgagee fails to be compensated upon expiration of the debt clearing period covered under This Contract (including part of the debt that was proclaimed to be mature before maturity, due to the debtor’s breach of contract and/or the monrtgagor’s violation of statement and guarantee or promises, and etc.); or when the monrtgagee has the right to dispose of the estates in pledge as stipulated by or associated with law, code, rules & regulations. The debtor shall pay the deficit part as to the guaranty disposed. Parts or the whole of this Contract that has been notarized with enforceable effect by a monrtgagee-designated public notary shall be as per Article 9.2 of This Contract.

7.2

In dealing with the guaranty or pledge, the monrtgagee has the right to designate an assignee, auction firm, appraiser, lawyer, or other agent to exercise the monrtgagee’s right as a whole or any portion thereof; and the monrtgagor shall not disagree with such designation and/or exercise.

7.3

The monrtgagor shall undertake all the cost arising from or associated with this article and thereby the monrtgagee has the right to collect it directly from the price of the guaranty or pledge disposed. 

7.4

After the monrtgagee has exercised the hypothec as stipulated in This Contract, if 

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the guaranty or pledge fails to clear the debt held in guaranty, the monrtgagor, as the third party, hereby promise undertaking relevant responsibilities together with the debtor without condition, with respect to the uncompensated part of the debt.

Clause VIII Period of Validity

8.1

This Contract will take effect as of the date of hypothecation filing gone through as per Article 3 and subsequent to This Contract being stamped in public seal by both parties hereto referred or exercised by respective legal or designated representatives; and will terminate subsequent to debt clearing as stated in Article 2 of This Contract and cancellation of the hypothecation filing. However, when the debtor pay back before maturity, This Contract will be terminated six (6) months after the due date, unless otherwise agreed upon by both parties.

8.2

The hypothec under this article coexists with the debtee’s right guaranteed as stated in Article 2 of This Contract, annihilation of which will result in annihilation of such hypothec.

If the estates hypothecation filing department requires a certain period for filing continuance, such continuance period as to the guaranty under This Contract will be two (2) years after the expiration of the main debt clearing plus the period starting from the date of hypothecation filing and ending at such expiration, i.e., the date of continuance maturity will beYMD.

Clause IX Others 

9.1

This Contract forms a part of the Loan Contract and shares the same legal binding force with the latter. Complete and effective performance of This Contract is one of the preconditions for the debtor to draw money as per the Loan Contract.

9.2

Any change to This Contract shall not be made without mutual negotiation and unanimous agreement by both parties; with regard to any change in the prefiled items as agreed upon by both parties, the monrtgagor shall go through proceedings for filing such change, otherwise, without filing such change, This Contract itself will remain effective further.

9.3

This Contract is explained and governed by the Law of People’s Republic of China. Any disputes associated with or arising from performance of This Contract shall be submitted to the local people’s court at the monrtgagee’s chief executive place for settlement. This Contract has been notarized with enforceable effect by a monrtgagee-designated public notary, so the monrtgagee may apply to the people’s court with due jurisdiction to enforce it as per relevant laws of PRC.

9.4

This Contract is made in 4 original copies, with each original copy for each party, public notary, and estates filing department; and in several duplicate copies for archiving or later reference. 

In signing This Contract, both parties have no disagreement to any and all articles of 

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This Contract and have a correct understanding of the legal explanation of those articles concerning both parties’ rights, responsibilities, and liabilities.

Mortgagor (Official Seal) 

Mortgagee (Official Seal) 

AXM Pharma (Shenyang) Inc. /s/  

Shanghai Pudong Development Bank Shenyang Banch /s/

Legal or Designated Representative 

Legal or Designated Representative 

(Signature or Seal) 

   (Signature or Seal)

Wang Weishi /s/

       Gua Jingjuan /s/

Bank and Account: Shanghai Pudong Development Bank Shenyang Banch 

71010154500000422 

Date of Signature:  

7 of 7EXHIBIT 4.1

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.

WARRANT NO. B-__                                          Minneapolis, Minnesota
                                                               November 18, 2004

         This certifies that, for value received,  ____________________,  or its
successors  or  assigns  ("Holder")  is  entitled  to  purchase  from El Capitan
Precious  Metals,  Inc.  (the  "Company")  _____________________________________
fully paid and  nonassessable  shares (the  "Shares")  of the  Company's  Common
Stock,  $.001 par value (the  "Common  Stock") at any time and from time to time
from the date hereof until  November 18, 2009, at an exercise price of $0.85 per
share (the "Exercise Price"), subject to adjustment as herein provided.

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

         1. Exercise of Warrant.

            (a) Exercise for Cash. 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 office in Scottsdale, Arizona, 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 at any time within the period above named), 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 made 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) 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.

            (b) Cashless Exercise. Upon receipt of a notice of cashless
exercise, the Company shall deliver to the Holder (without payment by the Holder
of any exercise price) that number of Shares that is equal to the quotient
obtained by dividing (x) the value of the Warrant on the date that the Warrant
shall have been surrendered (determined by subtracting the aggregate exercise
price for the Shares in effect on the Exercise Date from the aggregate Fair

<PAGE>

Market Value (hereinafter defined) for the Shares by (y) the Fair Market Value
of one share of Common Stock. A notice of "cashless exercise" shall state the
number of Shares as to which the Warrant is being exercised. "Fair Market Value"
for purposes of this Section (b) shall mean the average of the Common Stock
closing prices reported by the principal exchange on which the Common Stock is
traded, or the last sale prices as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("Nasdaq") National Market,
SmallCap Market, or Bulletin Board, as the case may be, for the ten (10)
business days immediately preceding the Exercise Date or, in the event no public
market shall exist for the Common Stock at the time of such cashless exercise,
Fair Market Value shall mean the fair market value of the Common Stock as the
same shall be determined in the good faith discretion of the Board of Directors,
after full consideration of all factors then deemed relevant by such Board in
establishing such value, including by way of illustration and not limitation,
the per share purchase price of Common Stock or per security convertible into
one share of Common Stock of the most recent sale of shares of Common Stock or
securities convertible into Common Stock by the Company after the date hereof
all as evidenced by the vote of a majority of the directors then in office.

         2. Transferability  of  this  Warrant.  This Warrant is issued upon the
following  terms,  to which each  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 have 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 hereof, except
those that may be created by or imposed upon the Holder or its property, and
without limiting the generality of the foregoing, the Company covenants and
agrees that it will from time to time take all such actions as may be requisite

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<PAGE>

to assure that the par value per share of the Common Stock is at all times equal
to or less than the effective purchase price per share of the Common Stock
issuable pursuant to this Warrant. 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 free of
preemptive or other rights for the exclusive purpose of issue upon exercise of
the purchase rights evidenced by this Warrant, 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 $.05 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 $.05
per share.

            (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 any 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

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<PAGE>

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 each 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 the 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 the Warrants as if the Warrants had been
exercised immediately prior to such capital reorganization, reclassification of
capital stock, such consolidation, merger, sale, conveyance, lease or other
transfer and the Warrant Holders 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 each Holder such shares of stock,
securities, cash or property as in accordance with the foregoing provisions such
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 stockholder of  the
Company.

         6. Piggyback Registration  Rights. If at any time prior to November 18,
2009, the Company shall propose to file any  registration  statement (other than
any  registration  on Form S-4,  S-8 or any other  similarly inappropriate form,
or any successor forms thereto) (the  "Registration  Statement") under the  1933
Act  covering a public  offering of the  Company's  Common Stock, it will notify
the  Holder hereof at  least thirty (30) days prior to each such filing and will
use its best  efforts  to  include in the  Registration  Statement  (to the
extent  permitted  by  applicable  regulation),  the Common  Stock  purchased or
purchasable  by the  Holder  upon the  exercise  of the  Warrant  to the  extent
requested by the Holder  hereof  within twenty (20) days after receipt of notice
of such filing (which  request shall specify the interest in this Warrant or the
Shares intended to be sold or disposed of by such Holder and describe the nature
of any proposed sale or other disposition thereof); provided, however, that if a
greater number of Shares is offered for  participation in the proposed  offering
than in the  reasonable  opinion of the  managing  underwriter  of the  proposed
offering can be accommodated  without adversely affecting the proposed offering,
then  the  amount  of  Shares  proposed  to  be  offered  by  such  Holders  for
registration,  as  well  as  the  number  of  securities  of any  other  selling
shareholders participating in the registration, shall be proportionately reduced
to a number deemed satisfactory by the managing  underwriter.  The Company shall
bear all expenses and fees incurred in connection with the preparation,  filing,
and amendment of the Registration Statement with the Commission, except that the
Holder shall pay all fees,  disbursements  and expenses of any counsel or expert
retained by the Holder and all underwriting  discounts and  commissions,  filing

                                       4
<PAGE>

fees and any  transfer  or other taxes  relating  to the Shares  included in the
Registration Statement.  The Holder of this Warrant agrees to cooperate with the
Company in the preparation and filing of any Registration Statement,  and in the
furnishing of information concerning the Holder for inclusion therein, or in any
efforts by the Company to establish  that the proposed  sale is exempt under the
1933 Act as to any proposed distribution.

         7.  Governing  Law.  This Warrant shall be governed by and construed in
accordance with the laws of the State of Colorado.

         8.  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 Holders.

         9. 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 Capital  Precious
Metals,  Inc.,  10876 E. Tierra  Drive,  Scottsdale,  AZ 85259,  (480)  607-7193
(facsimile)  or to such other  address as the Company or the Holder shall notify
the other as provided in this Section.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer in the date set forth above.

                                   EL CAPITAN PRECIOUS METALS, INC.

                                   By:_____________________________________

                                      Its:_________________________________

<PAGE>

                                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]

                                            ____________________________________
                                            [Printed]

                                            ____________________________________

                                            ____________________________________
                                            [Address]

                                      * * *

                                 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]

                                            ____________________________________
                                            [Printed]

                                            ____________________________________

                                            ____________________________________
                                            [Address]

                                       6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}]]