Termination Agreement
Between
Dragon Gold Resources, Inc.
And
The Shareholders of Dragon Minerals Holdings, Inc. as of July 14, 2004
And
Dragon Minerals Holdings, Inc.
Dated May 5th, 2006
THIS TERMINATION AGREEMENT (hereinafter referred to as this "Agreement") is
entered into as of this 5th day of May, 2006, and effective as of July 15, 2004
by and between Dragon Gold Resources, Inc. a Nevada corporation (hereinafter
referred to as "Dragon Gold") and the former shareholders (hereinafter referred
to as the "Former Shareholders") of Dragon Minerals Holdings, Inc., a British
Virgin Islands corporation (hereinafter referred to as "Dragon Minerals"), who,
pursuant to the Exchange Agreement executed July 15, 2004 received 16,500,000
shares of Dragon Gold in exchange for 100% of the common stock of Dragon
Minerals, upon the following premises:
Premises
WHEREAS, Dragon Gold is a publicly held corporation organized under the
laws of the State of Nevada and engaged in mineral exploration;
WHEREAS, Dragon Minerals is a subsidiary corporation of Dragon Gold
organized under the laws of the British Virgin Islands and also engaged in
mineral exploration;
WHEREAS, management of the constituent corporations entered into a exchange
agreement (the "Exchange Agreement") dated July 15, 2004 pursuant to which
Dragon Gold agreed to acquire 100% of the issued and outstanding securities of
Dragon Minerals in exchange for the issuance of certain shares of Dragon Gold
(the "Exchange") and Dragon Minerals agreed to use its best efforts to cause its
shareholders (the "Dragon Minerals Shareholders") to exchange their securities
of Dragon Minerals on the terms described therein; and
WHEREAS, Dragon Gold, Dragon Minerals, and the Former Shareholders desire
to terminate the Exchange.
Agreement
NOW THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
Organization. Dragon Minerals is a corporation duly organized, validly
existing, and in good standing under the laws of the British Virgin Islands and
has the corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets and to carry on its
business in all material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the states or countries
in which the character and location of the assets owned by it or the nature of
the business transacted by it requires qualification, except where failure to be
so qualified would not have a material adverse effect on its business. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of Dragon
Minerals' Memorandum and articles of association. Dragon Minerals has taken all
actions required by law, its articles of incorporation, or otherwise to
authorize the execution and delivery of this Agreement. Dragon Minerals has full
power, authority, and legal right and has taken all action required by law, its
articles of incorporation, and otherwise to consummate the transactions herein
contemplated.
ARTICLE II
Organization. Dragon Gold is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Nevada and has the
corporate power and is duly authorized, qualified, franchised, and licensed
under all applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets, to carry on its business in
all material respects as it is now being conducted, and except where failure to
be so qualified would not have a material adverse effect on its business, there
is no jurisdiction in which it is not qualified in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of Dragon Gold 's certificate of incorporation or bylaws.
Dragon Gold has taken all action required by law, its certificate of
incorporation, its bylaws, or otherwise to authorize the execution and delivery
of this Agreement, and Dragon Gold has full power, authority, and legal right
and has taken all action required by law, its certificate of incorporation,
bylaws, or otherwise to consummate the transactions herein contemplated.
ARTICLE III
PLAN OF TERMINATION
Section 3.01 The Termination. On the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as defined in Section 3.02),
each Former Shareholder (as defined in the Exchange Agreement) shall assign,
transfer and deliver, free and clear of all liens, pledges, encumbrances,
charges, restrictions or known claims of any kind, nature, or description, the
number of shares of common stock of Dragon Gold received pursuant to the
Exchange in the aggregate constituting 16,500,000 of the issued and outstanding
shares of common stock of Dragon Gold held by each of such shareholders; the
objective of such Termination being the rescission by Dragon Gold of the
acquisition of 100% of the issued and outstanding common shares of Dragon
Minerals Holdings, Inc. In exchange for the transfer of such securities by the
Former Shareholders, Dragon Gold shall issue to the Former Shareholders (1) an
aggregate of 100% of the shares of common stock of Dragon Minerals to the Former
Shareholders as of the Closing Date. In the event the Termination is consummated
but less than 16,500,000 of the common shares of Dragon Gold are delivered to
Dragon Gold, the number of Shares of Dragon Minerals delivered to the Former
Shareholders as described above shall be reduced proportionately. At the
Closing, each Former Shareholder shall, on surrender of his certificate or
certificates representing such Dragon Gold shares to Dragon Gold or its
registrar or transfer agent, be entitled to receive a certificate or
certificates evidencing his proportionate interest in the Dragon Minerals
Shares. Upon consummation of the transaction contemplated herein, assuming
participation by all of the Former Shareholders, all of the shares of capital
stock of Dragon Minerals shall be held by the Former shareholders.
Section 3.02 Closing. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on a date and at such time as the
parties may agree ("Closing Date") but not later than May 5th 2006. Such Closing
shall take place at a mutually agreeable time and place.
Section 3.03 Closing Events. At the Closing, Dragon Gold, Dragon Minerals
and the Former Shareholders, individually or through a representative, shall
execute, acknowledge, and deliver (or shall ensure to be executed, acknowledged,
and delivered) any and all certificates, opinions, financial statements,
schedules, agreements, resolutions, rulings or other instruments required by
this Agreement to be so delivered at or prior to the Closing, together with such
other items as may be reasonably requested by the parties hereto and their
respective legal counsel in order to effectuate or evidence the transactions
contemplated hereby.
Upon execution of this Agreement by both parties the Exchange Agreement
date July 15, 2004 between Dragon Gold and Dragon Minerals shall be of no
further force or effect, and no obligation, right or liability shall arise
hereunder, except that each party shall bear its own costs in connection with
the negotiation, preparation, and execution of this Agreement.
Section 3.04 Compliance With Laws and Regulations. To the best of its
knowledge, Dragon Gold has complied with all applicable statutes and regulations
of any federal, state, or other applicable governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
Dragon Gold or except to the extent that noncompliance would not result in the
occurrence of any material liability. This compliance includes, but is not
limited to, the filing of all reports to date with federal and state securities
authorities.
ARTICLE IV
Section 4.01 Delivery of Books and Records. At the Closing, Dragon Gold
shall deliver to Dragon Minerals the originals of the corporate minute books,
books of account, contracts, records, and all other books or documents of Dragon
Minerals now in the possession of Dragon Gold or its representatives.
Section 4.02 Indemnification.
(a) Dragon Minerals and the Former Shareholders hereby agree to indemnify
Dragon Gold and each of the officers, agents and directors of Dragon Gold as of
the date of execution of this Agreement against any loss, liability, claim,
damage, or expense (including, but not limited to, any and all expense
whatsoever reasonably incurred in investigating, preparing, or defending against
any litigation, commenced or threatened, or any claim whatsoever), to which it
or they may become subject arising out of or based on any inaccuracy appearing
in or misrepresentations made in this Agreement. The indemnification provided
for in this paragraph shall survive the Closing and consummation of the
termination contemplated with this Agreement.
(b) Dragon Gold hereby agrees to indemnify Dragon Minerals and the Former
Shareholders and each of the officers, agents, and directors of Dragon Minerals
against any loss, liability, claim, damage, or expense (including, but not
limited to, any and all expense whatsoever reasonably incurred in investigating,
preparing, or defending against any litigation, commenced or threatened, or any
claim whatsoever), to which it or they may become subject arising out of or
based on any inaccuracy appearing in or misrepresentation made under this
Agreement. The indemnification provided for in this paragraph shall survive the
Closing and consummation of the termination contemplated by this Agreement.
ARTICLE V
Section 5.01 Governing Law. This Agreement shall be governed by, enforced,
and construed under and in accordance with the laws of the United States of
America and, with respect to the matters of state law, with the laws of the
State of Nevada, without giving effect to principles of conflicts of law
thereunder. Each of the parties (a) irrevocably consents and agrees that any
legal or equitable action or proceedings arising under or in connection with
this Agreement shall be brought exclusively in the federal courts of the United
States with venue in Houston, Texas.
Section 5.02 Notices. Any notice or other communications required or
permitted hereunder shall be in writing and shall be sufficiently given if
personally delivered to it or sent by telecopy, overnight courier or registered
mail or certified mail, postage prepaid, addressed as follows:
If to Dragon Gold, to: 338 Euston Road
London NW1 3BT, UK
With copies to: Hank Vanderkam, Esq.
Vanderkam & Associates
1301 Travis, #1200
Houston, Texas 77002
If to Dragon Minerals
or the Former
Shareholders, to: Raoul Tsakok
Dragon Minerals Holdings Inc.
900-789 West Pender Street
Vancouver, British Columbia
Canada V6C 1H2
Section 5.03 Confidentiality. Each party hereto agrees with the other that,
unless and until the transactions contemplated by this Agreement have been
consummated, it and its representatives will hold in strict confidence all data
and information obtained with respect to another party or any subsidiary thereof
from any representative, officer, director or employee, or from any books or
records or from personal inspection, of such other party, and shall not use such
data or information or disclose the same to others, except (i) to the extent
such data or information is published, is a matter of public knowledge, or is
required by law to be published; or (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement. As of closing of this Termination Agreement,
each party shall return to the other party all documents and other materials
obtained by it or on its behalf and shall destroy all copies, digests, work
papers, abstracts or other materials relating thereto, and each party will
continue to comply with the confidentiality provisions set forth herein.
Section 5.04 Third Party Beneficiaries. This contract is strictly between
Dragon Gold and Dragon Minerals, and, except as specifically provided, no
director, officer, stockholder (other than the Dragon Minerals Shareholders),
employee, agent, independent contractor or any other person or entity shall be
deemed to be a third party beneficiary of this Agreement.
Section 5.05 Entire Agreement. This Agreement represents the entire
agreement between the parties relating to the subject matter thereof and
supersedes all prior agreements, understandings and negotiations, written or
oral, with respect to such subject matter.
Section 5.06 Survival; Termination. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of two years.
Section 5.07 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument. For purposes of this agreement,
facsimile signatures shall be deemed original signatures.
Section 5.08 Amendment or Waiver. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred herein,
at law, or in equity, and may be enforced concurrently herewith, and no waiver
by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may by amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
Section 5.09 Best Efforts. Subject to the terms and conditions herein
provided, each party shall use its best efforts to perform or fulfill all
conditions and obligations to be performed or fulfilled by it under this
Agreement so that the transactions contemplated hereby shall be consummated as
soon as practicable. Each party also agrees that it shall use its best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective this Agreement and the transactions contemplated
herein.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be executed by their respective officers, hereunto duly authorized, as of the
date first-above written.
ATTEST: ____________________________.
BY: Dragon Gold Resources, Inc.
Secretary or Assistant Secretary Chairman
Johannes Petersen
ATTEST: _______________________
BY: Dragon Minerals, Inc
Secretary or Assistant Secretary Chairman and Former Shareholder
Representative
Raoul Tsakok
The undersigned Former Shareholders of Dragon Minerals through their
designated representatives, hereby agree to participate in the Exchange on the
terms set forth above. Each of the undersigned hereby represents and affirms
that he has read each of the representations and warranties of Dragon Minerals
and the Former Shareholders set out in Article I hereof and that, to the best of
his knowledge, all of such representations and warranties are true and correct.
___________________, individually
Mr. _________
___________________, individually
Mr. _________