Document:

Ginseng-growing
      Land Lease Agreement

     

    Heilongjiang
      Province Muling Forestry Bureau

    

    Yanbian
      Huaxing Ginseng Industry Co., Ltd.

    

    June
      12,
      2005

     

    To
      expand
      the area of ginseng-growing land according to the Green Ginseng Growing and
      Processing Program approved by the state of Yanbian, Heilongjiang Province
      Muling Forestry Bureau (the “Bureau”) and Yanbian Huaxing Ginseng Industry Co.,
      Ltd. (the “Company”) have agreed that the Bureau will lease a total of 700
      square hectares of natural forest land with low soil quality and wasteland
      to
      the Company for 20 years from 2005 to 2025 for growing ginseng. The details
      of
      this Agreement are as follows:

    

    
      	
              A.

            	
              Area
                of Land to Be Leased for Growing Ginseng and Duration of Use.
                The
                duration of the use of assigned land is from 1 to 5 years. The Bureau
                will
                provide the Company approximately 700 square hectares of forest land
                to
                grow ginseng for 20 years from 2005 to 2025. The Bureau agrees to
                provide
                the Company at least 30 square hectares of forest land each
                year.

            

    

    

    
      	
              B.

            	
              Authority
                and Responsibility

            

    

    

    
      	 	
              a).

            	
              The
                Power and Responsibility of the
                Bureau

            

      	 	 	 

    

    
      	 	
              1.

            	
              The
                Bureau will handle the application for using the land for the Company.
                The
                Company will pay the land rental fee before the application. The
                amount of
                rental fee will be based on the lease or agreement signed by both
                parties
                each time.

            

      	 	 	 

    

    
      	 	
              2.

            	
              The
                land approved to be leased to the Company can only be used for growing
                ginseng and nothing else, otherwise the Bureau would be entitled
                to cancel
                the Agreement, and the Company would have to indemnify for the Bureau’s
                loss. If the Bureau could not provide the land on time in accordance
                with
                the Agreement and hinder the Company’s ginseng business, the Bureau would
                have to indemnify for the Company’s loss.

            

      	 	 	 

    

    
      	 	
              3.

            	
              The
                land has to be restored the second year after it has been used for
                growing
                ginseng. The Bureau will provide the nursling trees, and the Company
                will
                pay for the labor of planting and maintenance. When the land is returned
                to the Bureau, the newly planted trees on it have to reach a 90%
                survival
                rate. If a 90% survival rate cannot be reached, the Company will
                be
                charged CNY$3 for every tree that dies.

            

      	 	 	 

    

    
      	 	
              4.

            	
              When
                the land is in use by the Company, the Bureau will provide necessities,
                such as accommodation, water, electricity, and communication services.
                The
                Company will pay for these necessities by its
                own.

            

    

      

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	 	
              5.

            	
              During
                effective period of the Agreement, the Bureau will cooperate with
                and
                support the Company’s security staff. The Bureau will not charge the
                Company for the temporary stay of its management and recruitment
                staff.
                The Company shall report the staff information to the local police
                department as soon as they arrive to maintain the security of the
                area.

            

      	 	 	 

    

    
      	 	
              b).

            	
              The
                Power and Responsibility of the
                Company

            

      	 	 	 

    

    
      	 	
              1.

            	
              The
                Company will pay the rent to the Bureau as specified in the
                Agreement.

            

      	 	 	 

    

    
      	 	
              2.

            	
              The
                Bureau will provide the area of land the Company needs every year.
                If the
                Bureau could not provide the land on time, the Bureau would have
                to
                indemnify for the Company’s loss, which will be deducted from the
                rent.

            

      	 	 	 

    

    
      	 	
              3.

            	
              The
                Bureau will deforest the approved land by the end of March each year
                and
                give it to the Company after the timber delivery is completed. The
                Bureau
                will give the wood, trunks and branches less than 10-cm diameter
                to the
                Company to be used as the ginseng fertilizer. If more wood fertilizer
                is
                needed, the Company can purchase it at the local area. The Bureau
                will
                help the Company handle the purchasing.

            

      	 	 	 

    

    
      	 	
              4.

            	
              Base
                on the need of the Company, the Bureau will sell the Company a limited
                quantity of wood for building lodges for
                accommodation.

            

      	 	 	 

    

    
      	 	
              5.

            	
              The
                Company must comply with the fire-preventing regulations, forestry
                policies, and the national laws.

            

      	 	 	 

    

    
      	 	
              6.

            	
              The
                Company is entitled to grow ginsengs and build lodges for accommodation
                in
                the approved land as it plans.

            

    

    

    
      	
              C.

            	
              Miscellaneous
                Issues

            

    

    

    
      	 	
              a).

            	
              The
                Agreement is effective for 20 years from March, 2005 to the end of
                2025.
                If there is any change in national policy that is related to the
                content
                of this Agreement, the Agreement shall make necessary change in accordance
                with the new national policy.

            

      	 	 	 

    

    
      	 	
              b).

            	
              The
                percentage of arable area the Bureau assigns to the Company has to
                be at
                least 90%. If less than 90%, the Bureau must add the shortage along
                with
                the yearly quota to the Company the next
                year.

            

      	 	 	 

    

    
      	 	
              c).

            	
              The
                Agreement can be updated or revised with the consent from both parties.
                The revised agreement has the same legal power as this
                Agreement.

            

      	 	 	 

    

    
      	 	
              d).

            	
              Four
                copies of the Agreement are provided. Two copies are given to each
                party.

            

    

     

    
      
        	
                Heilongjiang
                  Province Muling Forestry Bureau

              	
                Yanbian
                  Huaxing Ginseng Industry Co., Ltd.

              
	
                (With
                  Official Chop)

              	
                Liu
                  Changzhen (With
                  Signature)The
      Approval for Ermu Forestry’s capital investment and land provision to

    Huaxing
      Ginseng Industry Company, Tunhua City, Jilin Province

     

    To:
      Ermu
      Forestry

    

    We
      have
      received your application for capital investment and land provision to Huaxing
      Ginseng Industry Company, Tunhua City, Jilin Province. After our study, the
      approved terms are the following:

    

    1.
      We
      approve that Ermu Forestry uses the collective assets of building complex,
      fences, offices on the property, with the agreed price of RMB600,000 as an
      investment to Huaxing Ginseng Industry Company, Tunhua City, Jilin Province,
      including 1200 square meter of forest. 

    

    2.
      We
      approve that Ermu Forestry will provide 800 hectares to Huaxing Ginseng Industry
      Company, Tunhua City, Jilin Province for ginseng plantation.

    

    3.
      You
      may execute the agreement with the above approved terms.

     

    Ermu
      County Government, Tunhua City

    (with
      official seal)

    

    June
      25,
      2000Unassociated Document

    EMPLOYMENT
      AGREEMENT

     

    This
      Employment Agreement,
      by and
      between El Capitan Precious Metals, Inc., a Nevada corporation (the
“Company”),
      and
      Kenneth P. Pavlich (the “Executive”)
      is
      entered into on the 30th day of April, 2007 (the “Effective
      Date”).

     

    INTRODUCTION

     

    A. On
      April
      6, 2007, the Board of Directors of the Company (the “Board”)
      appointed Executive, and Executive accepted such appointment, as the Company’s
      Chief Executive Officer and President, and further agreed to certain
      compensation for Executive’s services which are set forth in Sections 4(a)(i)
      and 4(e) hereof.

     

    B. The
      Company and Executive desire to memorialize the terms agreed to on April 6,
      2007
      and establish other terms and conditions of Executive’s employment with the
      Company as set forth in this Agreement.

     

    AGREEMENT

     

    Now,
      Therefore,
      in
      consideration of the foregoing, and for other good and valuable consideration
      the receipt and sufficiency of which is hereby acknowledged, the Company and
      Executive, each intending to be legally bound, hereby agree as
      follows:

     

    1. Employment.
      Subject
      to all of the terms and conditions of this Agreement, the Company hereby agrees
      to employ Executive, and Executive hereby accepts such employment and agrees
      to
      serve the Company to the best of his ability. Executive shall report to and
      take
      direction from the Board. 

     

    2. Term.
      The
      term of Executive’s employment hereunder, unless sooner terminated in accordance
      with the provisions of Section 7, shall be for a period of two (2) years (the
      “Term”)
      commencing April 30th, 2007; provided, however, that the Term shall be extended
      automatically for additional periods of one (1) year unless one party shall
      provide notice to the other in writing at least thirty (30) days before the
      initial expiration of the Term or an anniversary date thereof that this
      Agreement shall no longer be so extended, and all such extension periods shall
      be included in the Term.

     

    3. Duties.
      The
      Executive shall serve as the Company’s Chief Executive Officer and shall
      perform, subject to the direction of the Board, duties as may be from time
      to
      time directed by the Board. Except as expressly permitted in this Section 3,
      the
      Executive shall devote substantially all of his business time, attention and
      energies to the business and affairs of the Company and shall use his best
      efforts to advance the best interests of the Company and shall not during the
      Term be actively engaged in any other business activity, whether or not such
      business activity is pursued for gain, profit or other pecuniary advantage,
      that
      will interfere with the performance by the Executive of his duties hereunder
      or
      the Executive’s availability to perform such duties or that will adversely
      affect, or negatively reflect upon, the Company. Notwithstanding the foregoing,
      the Company acknowledges and agrees that Executive shall be entitled to (i)
      complete certain duties and obligations relating to his prior employment for
      up
      to 20% of his normal hours of employment and (ii) serve as a member of boards
      of
      directors of other public and private companies, provided that such activities
      shall not violate the terms of this Agreement, including without limitation
      this
      Section 3. 

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

     

    4. Compensation.

     

    (a) Base
      Salary.
      In
      consideration for Executive’s services under this Agreement, the Company hereby
      agrees to pay Executive the following base salary during the Term (the
“Base
      Salary”):

     

    (i) For
      the
      period from April 6, 2007 through December 31, 2007 of the Term, 250,000 shares
      of the Company’s common stock, par value $.001 per share (the “Common
      Stock”),
      issued to Executive on April 6, 2007 (the “2007
      Base Salary”);
      and

     

    (ii) From
      January 1, 2008 through the remainder of the Term, 25,000 shares of Common
      Stock
      per month of continued service, issuable on the first day of the month
      immediately following such month of service (the “Monthly
      Base Salary”);
      provided that, the Aggregate Value (as defined below) of the Monthly Base Salary
      for any month of service during the Term cannot exceed $100,000. “Aggregate
      Value”
for
      purposes of this Section 4(a)(ii) shall mean the average of the closing prices
      of the Common Stock (as identified by the OTC Bulletin Board or applicable
      exchange on which the Common Stock is quoted, or in the absence of such
      quotation or listing, as determined by the Board in its reasonable discretion)
      for the trading days during such month of service. 

     

    (b) Transaction
      Bonus.
      In the
      event the Company enters into a transaction whereby it sells the property
      referred to as the El Capitan property (the “El
      Capitan Property”)
      during
      the Term (including pursuant to a merger, consolidation, sale of all or
      substantially all of the assets of the Company or other similar transaction
      constituting a Change of Control (as defined in Section 6(c) hereto)), Executive
      shall be entitled to a bonus (the “Transaction
      Bonus”)
      equal
      to 0.5% of the Total Transaction Value; provided that, the Company’s
      consummation of a merger or other consolidation with Gold and Minerals Co.,
      Inc.
      shall not constitute a transaction whereby the Transaction Bonus shall apply.
      For purposes of this Agreement, “Total
      Transaction Value”
shall
      mean (i) in the event of the sale of the El Capitan Property as an individual
      asset (or together with other assets not constituting all or substantially
      all
      of the assets of the Company), the aggregate value of consideration received
      by
      the Company in consideration of the El Capitan Property, or (ii) in the event
      of
      a merger, consolidation, sale of all or substantially all of the assets of
      the
      Company, the aggregate value of consideration received by the Company and its
      shareholders in the transaction, in either case including cash, stock, financial
      instruments or other consideration received by the Company and its shareholders
      in the transaction. Notwithstanding the foregoing, in the event the
      consideration to the Company and/or its shareholders is paid over time,
      Executive shall be entitled to the payment of the Transaction Bonus as such
      consideration is received by the Company and/or its shareholders.  

     

    (c) Benefits.
      During
      the Term, Executive shall be entitled to the employee benefits as provided
      by
      the Company to its management team. The Company reserves the right, in its
      sole
      discretion, to alter the terms of such benefits at any time and from time to
      time.

     

    (d) Reimbursement.
      The
      Company shall reimburse Executive for all reasonable out-of-pocket business
      expenses incurred by Executive (“Expenses”)
      on the
      Company’s behalf during the Term, including, without limitation, Expenses
      relating to computer, office and cellular phone and office equipment.
      Notwithstanding the foregoing, Executive must properly account to the Company
      all such expenses in accordance with the rules and regulations of the Internal
      Revenue Service under the Internal Revenue Code of 1986, as amended, and in
      accordance with any standard policies of the Company relating to reimbursement
      of business expenses as such policies exist or may be implemented in the
      future.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

     

    (e) Stock
      Options.
      On
      April 6, 2007, the Company granted Executive a stock option to purchase
      2,500,000 shares of Common Stock at an exercise price of $0.70 per share, the
      per share fair market value of the Common Stock on the date of grant (the
“Option”).
      The
      Option shall vest in five equal amounts of 500,000 shares each upon the initial
      occurrence of each of the following events:

     

    (i) the
      earlier to occur of (A) a merger of the Company with Gold and Minerals, Co.,
      Inc. or (B) such time that the average of the closing price of the Company’s
      common stock over 30 consecutive trading days is at or above $0.75 per share;
      

     

    (ii) the
      earlier to occur of (A) the recommencement of drilling on the El Capitan
      Property or (B) such time that the average of the closing price of the Company’s
      common stock over 30 consecutive trading days is at or above $1.00 per
      share;

     

    (iii) the
      earlier to occur of (A) a qualified joint venture or the receipt of financing
      from a mining operating company or (B) such time that the average of the closing
      price of the Company’s common stock over 30 consecutive trading days is at or
      above $1.25 per share;

     

    (iv) the
      earlier to occur of (A) the listing of the Company’s common stock on a major
      stock exchange or (B) such time that the average of the closing price of the
      Company’s common stock over 30 consecutive trading days is at or above $1.50 per
      share;

     

    (v) the
      earlier to occur of (A) the announcement of a resource calculation relating
      to
      fire assays completed on the El Capitan Property or (B) such time that the
      average of the closing price of the Company’s common stock over 30 consecutive
      trading days is at or above $1.75 per share.

     

    In
      the
      event the Company terminates Executive’s employment, or Executive resigns
      employment from the Company, within three (3) months of a Change of Control,
      the
      unvested portion of the Option shall vest immediately prior to such Change
      of
      Control as set forth in Section 6(c). Upon termination of Executive’s employment
      with the Company for any reason other than pursuant to a Change of Control
      under
      Section 6(c), Executive’s rights to any portion of the Option that has not yet
      vested as of the date of such termination shall not vest, and all of Executive’s
      rights to such unvested portion of the Option shall terminate. The Option shall
      have a term of 10 years from date of grant. In the event of termination of
      Executive’s employment, for any reason or no reason, the vested Options shall
      remain exercisable for two (2) years following the date of termination. In
      connection with such grant, the Executive shall enter into a stock option
      agreement which will memorialize the foregoing vesting schedule and other terms
      described in this Section 4(e) and provide additional standard option
      provisions. 

     

    5. Confidentiality.
      Except
      as specifically permitted by an authorized officer of the Company or by written
      Company policies, Executive will not, either during or after his employment
      by
      the Company, use Confidential Information (as defined below) for any purpose
      other than the business of the Company or disclose it to any person who is
      not
      also an executive of the Company unless authorized by the Board. When
      Executive’s employment with the Company ends, Executive will promptly deliver to
      the Company all records and any compositions, articles, devices, apparatuses
      and
      other items that disclose, describe, or embody Confidential Information,
      including all copies, reproductions, and specimens of the Confidential
      Information in Executive’s possession, regardless of who prepared them and will
      promptly deliver any other property of the Company in Executive’s possession,
      whether or not Confidential Information. As used in this Section 5,
“Confidential Information” means information that is not generally known and
      that is proprietary to the Company or that the Company is obligated to treat
      as
      proprietary, including information known by Executive prior to the Effective
      Date. Any information that Executive reasonably considers Confidential
      Information, or that the Company treats as Confidential Information, will be
      presumed to be Confidential Information (whether the Executive or others
      originated it and regardless of how the Executive obtained it). The
      provisions of this
      Section
      5 shall survive any termination of this Agreement.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

     

    6. Termination.
      The
      Executive’s employment hereunder shall be terminated upon the Executive’s death
      and may be terminated as follows:

     

    (a) “Cause”
      Termination. The
      Executive’s employment hereunder may be terminated by the Board for Cause. Any
      of the following actions by the Executive shall constitute “Cause”:

     

    (i) The
      willful failure, disregard or refusal by the Executive to perform his duties
      hereunder;

     

    (ii) Any
      willful, intentional or grossly negligent act by the Executive having the effect
      of injuring, in a material way (whether financial or otherwise and as determined
      in good-faith by a majority of the Board), the business or reputation of the
      Company or any of its affiliates, including, but not limited to, any officer,
      director, executive or shareholder of the Company or any of its affiliates;
      

     

    (iii) Willful
      misconduct by the Executive in respect of the duties or obligations of the
      Executive under this Agreement, including, without limitation, insubordination
      with respect to directions received by the Executive from the
      Board;

     

    (iv) The
      Executive’s indictment of any felony or a misdemeanor involving moral turpitude
      (including entry of a nolo contendere plea);

     

    (v) The
      determination by the Company, after a reasonable and good-faith investigation
      by
      the Company following a written allegation by another employee of the Company,
      that the Executive engaged in some form of harassment prohibited by law
      (including, without limitation, age, sex or race discrimination), unless the
      Executive’s actions were specifically directed by the Board;

     

    (vi) Any
      misappropriation or embezzlement of the property of the Company or its
      affiliates (whether or not a misdemeanor or felony);

     

    (vii) Breach
      by
      the Executive of any of the provisions of Section 5 of this Agreement;
      and

     

    (viii) Breach
      by
      the Executive of any provision of this Agreement other than those contained
      in
      Section 5 which is not cured by the Executive within thirty (30) days after
      notice thereof is given to the Executive by the Company.

     

    (b) Disability
      Termination. The
      Executive’s employment hereunder may be terminated by the Board due to the
      Executive’s Disability. For purposes of this Agreement, a termination for
“Disability” shall occur (i) when the Board has provided a written termination
      notice to the Executive supported by a written statement from a reputable
      independent physician to the effect that the Executive shall have become so
      physically or mentally incapacitated as to be unable to resume, within the
      ensuing twelve (12) months, his employment hereunder by reason of physical
      or
      mental illness or injury, or (ii) upon rendering of a written termination notice
      by the Board after the Executive has been unable to substantially perform his
      duties hereunder for 90 or more consecutive days, or more than 120 days in
      any
      consecutive twelve month period, by reason of any physical or mental illness
      or
      injury. For purposes of this Section 6(b), the Executive agrees to make himself
      available and to cooperate in any reasonable examination by a reputable
      independent physician retained by the Company.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

     

    (c) Change
      of Control. The
      Executive’s employment hereunder may be terminated by the Board (or its
      successor) upon the occurrence of a Change of Control. For purposes of this
      Agreement, “Change
      of Control”
means
      (i) the acquisition, directly or indirectly, following the date hereof by any
      person (as such term is defined in Section 13(d) and 14(d)(2) of the Securities
      Exchange Act of 1934, as amended), in one transaction or a series of related
      transactions, of securities of the Company representing in excess of fifty
      percent (50%) or more of the combined voting power of the Company’s then
      outstanding securities if such person or his or its affiliate(s) do not own
      in
      excess of 50% of such voting power on the date of this Agreement, or (ii) the
      future disposition by the Company (whether direct or indirect, by sale of assets
      or stock, merger, consolidation or otherwise) of all or substantially all of
      its
      business and/or assets in one transaction or series of related transactions
      (other than a merger effected exclusively for the purpose of changing the
      domicile of the Company); provided that a merger or consolidation of the Company
      with Gold and Minerals Co., Inc shall not constitute a “Change of
      Control.”

     

    7. Compensation
      upon Termination.

     

    (a) If
      the
      Executive’s employment is terminated by the Board for Cause, then the Company
      shall pay to the Executive on the date of termination his Base Salary, any
      earned Transaction Bonus, and any expense reimbursement amounts incurred prior
      to and until the date of termination. 

     

    (b) If
      the
      Executive’s employment is terminated as a result of his death or Disability, or
      if Executive resigns his employment for any reason (other than pursuant to
      a
      Change of Control under Section 7(c) hereof), the Company shall, within a
      reasonable time after his death or Disability, pay to the Executive or to the
      Executive’s estate, as applicable, his Base Salary, any earned Transaction Bonus
      and any expense reimbursement amounts incurred prior to and until the date
      of
      his Death or Disability. 

     

    (c) If,
      within three (3) months of a Change of Control, Executive’s employment is
      terminated by the Company (or its successor) for any reason, or Executive
      resigns employment from the Company, the Company (or its successor, as
      applicable) shall, on the date of termination, (i) pay to the Executive his
      Base
      Salary, any earned Transaction Bonus and any expense reimbursement amounts
      prior
      to and until the date of termination and (ii) issue Executive 600,000 shares
      of
      Common Stock.

     

    (d) If
      the
      Executive’s employment is terminated by the Company for a reason other than as
      provided in Sections 6(a), 6(b), 6(c) or Executive’s death, the Company shall,
      within a reasonable time of such termination, (i) pay to the Executive his
      Base
      Salary, any earned Transaction Bonus and any expense reimbursement amounts
      incurred prior to and until the date of termination or his Death or Disability,
      as applicable, and (ii) issue Executive 600,000 shares of Common
      Stock.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

     

    (e) In
      the
      event, prior to December 31, 2007, Executive resigns his employment (other
      than
      within three (3) months following a Change in Control) or is terminated pursuant
      to Section 6(a), upon the request of the Company, Executive shall be required
      to
      return to the Company a pro rata portion of the 2007 Base Salary (in the form
      of
      cash or shares of Common Stock valued at $.70 per share at Executive’s
      discretion), based on the percentage of (i) days of employment of Executive
      during calendar year 2007 to (ii) the number of calendar days from and including
      April 6, 2007 to December 31, 2007. 

     

    (f) This
      Section 7 sets forth the only obligations of the Company with respect to the
      termination of the Executive’s employment with the Company, and the Executive
      acknowledges that, upon the termination of his employment, he shall not be
      entitled to any payments or benefits which are not explicitly provided in
      Section 7. Further, notwithstanding anything to the contrary contained in this
      Section 7, the Company shall have no obligation to pay, and Executive shall
      have
      no obligation to receive, any compensation, benefits or other consideration
      provided for in this Section 7 following termination of Executive’s employment
      unless Executive executes a separate agreement releasing the Company from any
      and all liability in connection with the termination of Executive’s
      employment.

     

    (g) If
      Executive is a director of the Company at the time his employment is terminated
      for any reason, the Executive shall be deemed to have resigned as director
      of
      the Company, effective as of the date of such termination.

     

    (h) The
      provisions of this
      Section
      7 shall survive any termination of this Agreement.

     

    8. Gross-up
      Payment. 

     

    (a) If
      Executive becomes entitled to the Common Stock payment under Sections 7(c)
      or
      7(d) hereof (the “Payment”), which is or becomes subject to the tax imposed by
      Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (or
      any similar tax that may hereafter be imposed) (the “Excise Tax”), the Company
      shall pay to Executive at the time specified below an additional amount (the
      “Gross-up Payment”) (which shall include, without limitation, reimbursement for
      any penalties and interest that may accrue in respect of such Excise Tax) such
      that the net amount retained by Executive, after reduction for any Excise Tax
      (including any penalties or interest thereon) on the Payment and any federal,
      state and local income or employment tax and Excise Tax on the Gross-up Payment
      provided for by this Section, but before reduction for any federal, state,
      or
      local income or employment tax on the Payment, shall be equal to the sum of
      (A)
      the Payment, and (B) an amount equal to the product of any deductions disallowed
      for federal, state, or local income tax purposes because of the inclusion of
      the
      Gross-up Payment in Executive’s adjusted gross income multiplied by the highest
      applicable marginal rate of federal, state, or local income taxation,
      respectively, for the calendar year in which the Gross-up Payment is to be
      made.
      For purposes of determining whether the Payment will be subject to the Excise
      Tax and the amount of such Excise Tax:

     

    (i) The
      Payment shall be treated as “parachute payments” within the meaning of Section
      280G(b)(2) of the Code, and all “excess parachute payments” within the meaning
      of Section 280G(b)(1) of the Code shall be treated as subject to the Excise
      Tax,
      unless, and except to the extent that, in the written opinion of independent
      compensation consultants, counsel or auditors of nationally recognized standing
      (“Independent Advisors”) selected by the Company and reasonably acceptable to
      Executive, the Payment (in whole or in part) does not constitute a parachute
      payment, or such excess parachute payment (in whole or in part) represents
      reasonable compensation for services actually rendered within the meaning of
      Section 280G(b)(4) of the Code in excess of the base amount within the meaning
      of Section 280G(b)(3) of the Code or are otherwise not subject to the Excise
      Tax; 

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

     

    (ii) The
      amount of the Payment which shall be treated as subject to the Excise Tax shall
      be equal to the lesser of (A) the Payment or (B) the total amount of excess
      parachute payments within the meaning of Section 280G(b)(1) of the Code (after
      applying clause (i) above); and

     

    (iii) 
      The
      value of any non-cash benefits or any deferred payment or benefit shall be
      determined by the Independent Advisors in accordance with the principles of
      Sections 280G(d)(3) and (4) of the Code.

     

    For
      purposes of determining the amount of the Gross-up Payment, Executive shall
      be
      deemed (A) to pay federal income taxes at the highest marginal rate of federal
      income taxation for the calendar year in which the Gross-up Payment is to be
      made; (B) to pay any applicable state and local income taxes at the highest
      marginal rate of taxation for the calendar year in which the Gross-up Payment
      is
      to be made, net of the maximum reduction in federal income taxes which could
      be
      obtained from deduction of such state and local taxes if paid in such year
      (determined without regard to limitations on deductions based upon the amount
      of
      Executive’s adjusted gross income); and (C) to have otherwise allowable
      deductions for federal, state, and local income tax purposes at least equal
      to
      those disallowed because of the inclusion of the Gross-up Payment in Executive’s
      adjusted gross income. In the event that the Excise Tax is subsequently
      determined to be less than the amount taken into account hereunder at the time
      the Gross-up Payment is made, Executive shall repay to the Company at the time
      that the amount of such reduction in Excise Tax is finally determined (but,
      if
      previously paid to the taxing authorities, not prior to the time the amount
      of
      such reduction is refunded to Executive or otherwise realized as a benefit
      by
      Executive) the portion of the Gross-up Payment that would not have been paid
      if
      such Excise Tax had been applied in initially calculating the Gross-up Payment,
      plus interest on the amount of such repayment at the rate provided in Section
      1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to
      exceed the amount taken into account hereunder at the time the Gross-up Payment
      is made (including by reason of any payment the existence or amount of which
      cannot be determined at the time of the Gross-up Payment), the Company shall
      make an additional Gross-up Payment in respect of such excess (plus any interest
      and penalties payable with respect to such excess) at the time that the amount
      of such excess is finally determined.

     

    The
      Gross-up Payment provided for above shall be paid on the 30th day (or such
      earlier date as the Excise Tax becomes due and payable to the taxing
      authorities) after it has been determined that the Payment (or any portion
      thereof) is subject to the Excise Tax; provided, however, that if the amount
      of
      such Gross-up Payment or portion thereof cannot be finally determined on or
      before such day, the Company shall pay to Executive on such day an estimate,
      as
      determined by the Independent Advisors, of the minimum amount of such payments
      and shall pay the remainder of such payments (together with interest at the
      rate
      provided in Section 1274(b)(2)(B) of the Code), as soon as the amount thereof
      can be determined. In the event that the amount of the estimated payments
      exceeds the amount subsequently determined to have been due, such excess shall
      constitute a loan by the Company to Executive, payable on the fifth day after
      demand by the Company (together with interest at the rate provided in Section
      1274(b)(2)(B) of the Code). If more than one Gross-up Payment is made, the
      amount of each Gross-up Payment shall be computed so as not to duplicate any
      prior Gross-up Payment. The Company shall have the right to control all
      proceedings with the Internal Revenue Service that may arise in connection
      with
      the determination and assessment of any Excise Tax and, at its sole option,
      the
      Company may pursue or forego any and all administrative appeals, proceedings,
      hearings, and conferences with any taxing authority in respect of such Excise
      Tax (including any interest or penalties thereon); provided, however, that
      the
      Company’s control over any such proceedings shall be limited to issues with
      respect to which a Gross-up Payment would be payable hereunder, and Executive
      shall be entitled to settle or contest any other issue raised by the Internal
      Revenue Service or any other taxing authority. Executive shall cooperate with
      the Company in any proceedings relating to the determination and assessment
      of
      any Excise Tax and shall not take any position or action that would materially
      increase the amount of any Gross-Up Payment hereunder.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

     

    (b) Modified
      Cut-Back.
      Notwithstanding the foregoing, if it shall be determined that the amount of
      any
      payment due Executive pursuant to this Section would result in less than $20,000
      in net after-tax value to Executive, then no Gross-Up payment shall be made
      to
      Executive and the total payments due Executive pursuant to this Section shall
      be
      reduced to an amount that would not result in the imposition of any Excise
      Tax.

     

    9. Tax
      Election.
      Executive shall be responsible for filing with the Internal Revenue Service
      an
      appropriate written notice of election pursuant to Section 83(b) of the Internal
      Revenue Code of 1986, as amended, if Executive wishes to make such an election.
      Grantee shall notify the Company in writing if Grantee files such an election
      within 30 days of the date of this Agreement. The Company intends, in the event
      it does not receive from Executive evidence of such filing, to claim a tax
      deduction for any amount which would otherwise be taxable to Executive in the
      absence of such an election. EXECUTIVE ACKNOWLEDGES THAT IT IS EXECUTIVE’S SOLE
      RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
      83(b), EVEN IF EXECUTIVE REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE
      THIS
      FILING ON EXECUTIVE’S BEHALF.

     

    10. Dispute
      Resolution.
      Any
      dispute arising out of or related to Executive’s employment with the Company or
      this Agreement or any breach or alleged breach hereof shall be exclusively
      decided by binding arbitration before a single arbitrator in a mutually
      convenient location and governed by the rules of the American Arbitration
      Association. The arbitrator shall have the power and authority to issue
      temporary and permanent awards of injunctive and equitable relief. Attorneys’
fees in each case shall be paid to the prevailing party by the non-prevailing
      party. Executive irrevocably waives Executive’s right, if any, to have any
      disputes between Executive and the Company arising out of or related to
      Executive’s employment with the Company or this Agreement decided in any
      jurisdiction or venue other than by binding arbitration pursuant to the terms
      hereof. The promises by the Company and Executive to arbitrate, which the
      parties agree can be a less expensive and quicker way to resolve disputes than
      litigating them in court or before other agencies or tribunals, constitutes
      adequate, reasonable and sufficient mutual consideration for the enforcement
      of
      this Agreement. 

     

    11. General
      Provisions.

     

    (a) Successors
      and Assigns.
      This
      Agreement is binding on and inures to the benefit of the Company’s successors
      and assigns, all of which are included in the term the “Company” as it is used
      in this Agreement; provided,
      however,
      that
      the Company may assign this Agreement only in connection with a merger,
      consolidation, assignment, sale or other disposition of substantially all of
      its
      assets or business.

     

    (b) Amendment.
      This
      Agreement may be modified or amended only by a written agreement signed by
      both
      the Company and Executive.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

     

    (c) Governing
      Law.
      The laws
      of the state of Nevada will govern the validity, construction, and performance
      of this Agreement, without regard to any choice of law or conflict of law rules
      and regardless of the location of any arbitration under this Agreement.

     

    (d) Construction.
      Wherever possible, each provision of this Agreement will be interpreted so
      that
      it is valid under the applicable law. If any provision of this Agreement is
      to
      any extent invalid under the applicable law, that provision will still be
      effective to the extent it remains valid. The remainder of this Agreement also
      will continue to be valid, and the entire Agreement will continue to be valid
      in
      other jurisdictions.

     

    (e) No
      Waiver.
      No
      failure or delay by either the Company or Executive in exercising or enforcing
      any right or remedy under this Agreement will waive any provision of the
      Agreement. Nor will any single or partial exercise by either the Company or
      Executive of any right or remedy under this Agreement preclude either of them
      from otherwise or further exercising these rights or remedies, or any other
      rights or remedies granted by any law or any related document.

     

    (f) Captions.
      The
      headings in this Agreement are for convenience only and shall not affect this
      Agreement’s interpretation.

     

    (g) References.
      Except
      as otherwise required or indicated by the context, all references to Sections
      in
      this Agreement refer to Sections of this Agreement.

     

    (h) Entire
      Agreement.
      This
      Agreement supersedes all previous and contemporaneous oral negotiations,
      commitments, writings, and understandings between the parties concerning the
      matters in this Agreement. In the case of any conflict between the terms of
      this
      Agreement and any other agreement, writing or understanding, this Agreement
      will
      control.

     

    (i) Notices.
      All
      notices and other communications required or permitted under this Agreement
      shall be in writing and shall be hand delivered or sent by registered or
      certified first class mail, postage prepaid, and shall be effective upon
      delivery if hand delivered, or three days after mailing if mailed to the
      addresses stated below. These addresses may be changed at any time by like
      notice:

     

    
      	
              If
                to the Company:

            	
              El
                Capitan Precious Metals, Inc.

              14301
                North 87th Street, Suite 216

              Scottsdale,
                Arizona 85260

               

            
	
              If
                to Executive:

            	
              Kenneth
                P. Pavlich

              105
                Alderwood Drive

              Chagrin
                Falls, OH 44022

               

            

    

    (j) Counterparts.
      This
      Agreement may be executed in any number of counterparts, all of which taken
      together shall constitute one agreement binding on all parties. Each party
      shall
      become bound by this Agreement immediately upon signing any counterpart,
      independently of the signature of any other party. In making proof of this
      Agreement, however, it will be necessary to produce only one copy signed by
      the
      party to be charged.

     

    Signature
      Page Follows

     

    
      
         

      

      
        9

        
          

        

      

      
         

        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned Executive and the Company have executed this
      Agreement effective as of the Effective Date.

     

    
      	 	
              El
                Capitan Precious Metals, Inc.

            
	 	
              a
                Nevada corporation

            
	 	 	 
	 	 	 
	 	 	 
	 	
              By

            	
              /s/
                Charles C. Mottley

            
	 	 	
              Charles
                C. Mottley

            
	 	 	
              Its:
                Chairman

            
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	         
              /s/ Kenneth P. Pavlich
	 	Kenneth
              P. Pavlich

    

     

     

     

     

     

    

      Signature
        Page of Employment Agreement between

      El
        Capitan Precious Metals, Inc. and Kenneth P. Pavlich

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