AGREEMENT AND PLAN OF REORGANIZATION By And Among DRAGON GOLD RESOURCES, INC. a Nevada Corporation, SECURE VOICE COMMUNICATIONS, INC. a Texas Corporation, AND THE SHAREHOLDERS OF SECURE VOICE COMMUNICATIONS, INC.
By
And
Among
a
Nevada Corporation,
SECURE
VOICE COMMUNICATIONS, INC.
a
Texas Corporation,
AND
THE
SHAREHOLDERS OF
SECURE
VOICE COMMUNICATIONS, INC.
THIS
AGREEMENT AND PLAN OF REORGANIZATION (this “Agreement”)
is
made effective as of May 31, 2007, by and among Dragon Gold Resources, Inc.,
a
Nevada corporation (“Dragon
Gold”),
Secure Voice Communications, Inc., a Texas corporation (“Company”)
and
the shareholders of the Company (“Shareholders”).
RECITALS
WHEREAS,
the
Shareholders are the record and beneficial owner of 40,098,000 shares of common
stock of the Company, which represents all of the issued and outstanding common
stock of Company (“Company Stock”);
WHEREAS,
the
Shareholders desires to sell and Dragon Gold desires to purchase from
Shareholders all of the Company Stock in exchange for an aggregate of
3,207,840,000 shares of Dragon Gold common stock (“Dragon Gold
Stock”);
WHEREAS,
the
respective Boards of Directors of Dragon Gold and the Company have determined
that the exchange is fair to, and in the best interests of, such entities and
have duly approved and adopted this Agreement and the transactions contemplated
herein;
NOW,
THEREFORE,
in
consideration of the premises and the mutual promises made herein, and in
consideration of the representations, warranties, and covenants contained
herein, the parties agree as follows:
ARTICLE
I
DEFINITIONS
As
used
in this Agreement, the following terms have the meanings indicated:
1.01. |
Closing:
The consummation of the transactions contemplated by this
Agreement.
|
1.02. |
Closing
Date
shall mean the time and date that the Closing occurs.
|
1.03. |
Company
Financial Statements
shall consist of an audited balance sheet, statement of income, statement
of cash flows, and statement of stockholder’s equity of the Company for
the period of inception through May 8,
2007.
|
1.04. |
Company
Last Balance Sheet Date
shall mean the period ended May 8,
2007.
|
1.05. |
Company
Stock
shall mean all of the outstanding shares of capital stock of the
Company.
|
1.06. |
GAAP:
Generally accepted accounting
principles.
|
1.07. |
Government
shall mean any federal, state, local, municipal, or foreign government
or
any department, commission, board, bureau, agency, instrumentality,
unit,
or taxing authority thereof.
|
1.08. |
Intellectual
Property
means all (a) licenses, patents, patent applications, patent disclosures,
and improvements hereto, (b) trademarks, service marks, trade dress,
logos, trade names, and corporate and company names and registrations
and
applications for registration thereof, (c) copyrights and registrations
and applications for registration thereof, (d) computer software,
data,
code sources and documentation, and improvements thereto, (e) trade
secrets and confidential business information (including ideas, formulas,
compositions, inventions whether patentable or unpatentable and whether
or
not reduced to practice, know-how, processes and techniques, plans,
proposals, technical data, copyrightable works, financial, marketing,
and
business data, pricing and cost information, business and marketing
plans,
and customer and supplier lists and information), (f) other proprietary
rights, (g) copies and tangible embodiments thereof (in whatever
form or
medium), and (h) other intellectual and intangible property rights,
including all registrations and applications therefore, and all
continuations, continuations in part, and divisional applications.
|
1.09. |
Knowledge
means knowledge after a diligent and reasonable
investigation.
|
1.10. |
Material
Adverse Effect
shall mean any change in the financial condition or operation of
the
business that would materially affect the Company’s business adversely,
including, but not limited to, material changes to management, business
conditions, or financial condition.
|
1.11. |
Proposal
shall have the meaning set forth in Section
8.16.
|
1.12. |
Reverse
Split
shall mean a one-for-eighty reverse split of the Dragon Gold Stock
that
does not reduce the number of shares of Dragon Gold Stock it is authorized
to issue.
|
1.13. |
SEC
shall mean the Securities and Exchange
Commission.
|
1.14. |
SEC
Filings
shall mean the Form 10-KSB filed August 1, 2006, the Form 10-QSB
filed on
November 14, 2006 and the Form 10-QSB filed February 14, 2007.
|
ARTICLE
II
EXCHANGE
On
the
basis of the representations, warranties, covenants, and agreements contained
in
this Agreement and subject to the terms and conditions of this
Agreement:
2.01. Exchange.
The
Shareholders shall assign, transfer and convey at the Closing shares of Company
Stock to Dragon Gold in exchange for shares of Dragon Gold Stock to be issued
at
the rate of one share of Dragon Gold Stock for one Share of Company Stock.
2.02. Purchase
Price.
The
purchase price in con-sideration of the sale of all the Company Stock shall
be
shares of Dragon Gold Stock.
2.03. Tax
Consequences.
Each
party shall be responsible for ascertaining and resolving its own tax
consequences resulting from the transaction. No party shall make any
representation as to any possible tax consequences arising as the result of
the
transaction. However, it is intended that the transaction contemplated hereby
will qualify as a tax-free reorganization.
2.04. Consideration.
The
Company Stock referred to in Section 2.01 and the consideration to be paid
by
Dragon Gold referred to in Sections 2.02 shall constitute all of the
consideration to be paid in connection with the transactions contemplated by
this Agreement.
2.05.
The
Closing.
The
“Closing” of the transactions contemplated by this Agreement shall be negotiated
and concluded between Dragon Gold, the Company, and the Shareholders on or
before May 9, 2007 (the “Closing Date”), at the offices of Xxxxxx &
Xxxxxxxxx, P.C., Xxxxx Xxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000. The
Shareholders will transfer to Dragon Gold all of its right, title and interest
in and to the Company now held or hereafter acquired by them in exchange for
the
consideration set forth herein. Such ownership interest in and to the Company
will be transferred by the Shareholders to Dragon Gold free and clear of any
liens, encumbrances or other obligations.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF
THE
COMPANY AND SHAREHOLDERS
The
Company and Shareholders hereby agree, represent, and warrant to Dragon Gold,
on
the date of this Agreement, as follows:
3.01. Organization
and Qualification.
(a) The
Company is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Texas, with all requisite power and authority
to
conduct its business and is not in breach of, or in default with respect to,
any
term of its Articles of Incorporation, Bylaws or other organizational documents.
The Company has obtained all necessary consents, authorizations, approvals,
orders, licenses, certificates, and permits of and from, and declarations and
filings with, all federal, state, local, and other governmental authorities
and
all courts and other tribunals, to own, lease, license, and use its properties
and assets and to carry on the business in which it is now engaged, except
where
the failure to do so would not have a Material Adverse Effect. The Company
is
duly qualified to transact the business in which it is engaged in every
jurisdiction in which its ownership, leasing, licensing, or use of property
or
assets or the conduct of its business makes such qualification necessary, except
where the failure to do so would not have a Material Adverse
Effect.
(b) The
Company does not have and has never had any subsidiaries and does not directly
or indirectly own any equity interest in, or any interest convertible into
or
exchangeable for any equity or similar interest in, any corporation,
partnership, joint venture or other business association or entity.
3.02. Capitalization.
The
Shareholders collectively own one hundred (100%) percent of the issued and
outstanding shares of Company Stock, which constitutes all of the outstanding
capital stock of Company. The Company Stock is not owned or held in violation
of
any preemptive right of any other person or entity, is validly authorized,
validly issued, fully paid and non-assessable, and is owned of record and
beneficially by the Shareholders. The shares of Company Stock held by the
Shareholders are restricted securities and are free and clear of all liens,
security interests, pledges, charges, encumbrances, voting agreements, and
voting trusts. There is no commitment, plan, or arrangement to issue, and no
outstanding option, warrant, convertible debt agreement or other right calling
for the issuance of, any shares of capital stock of the Company or any security
or other instrument convertible into, exercisable for, or exchangeable for
capital stock of the Company.
3.03. Due
Authorization; Third Party Consents.
The
Company has the right, power, legal capacity, and authority to enter into and
perform its obligations under this Agreement, and no approval or consent of
any
person other than the Company is necessary in connection with the execu-tion,
delivery, or performance of this Agreement. The execu-tion, delivery, and
performance of this Agreement by the Company has been duly authorized by its
board of directors and no other corporate proceedings on the part of the Company
are necessary to authorize this Agree-ment or the consummation of the
transactions contemplated hereby. This Agreement constitutes a legal and binding
obliga-tion of the Company, and is valid and enforceable against the Company
in
accordance with its terms.
3.04. Litigation.
There
is not any suit, action, arbitration, or legal, administrative, or other
proceeding or governmental investigation (formal or informal), pending or to
the
best of Company’s Knowledge threatened (or any basis therefor known to the
Company), with respect to the Company or the Shareholders (as it relates to
the
business of the Company), including but not limited to any action or claim
under
any federal, state, local or other governmental act, rule, regulation, or any
interpretations thereof, relating to environmental matters or the protection
of
the safety and health of persons connected with the Company’s business
(including but not limited to the transportation, treatment, storage, recycling,
disposal, or release into the environment of hazardous or toxic materials or
waste), or any basis on which any proceeding or investigation against the
Company or the Shareholders might reasonably be undertaken or brought. The
Company is not presently engaged in any legal action to recover monies due
to
the Company, for damages sustained by the Company, or amounts owed to the
Company. During the two year period immediately preceding the Closing, the
Company has neither received nor been a party to any written notice of
violations, orders, claims, citations, complaints, penalties, assessments,
court, or other proceedings, administrative, civil or criminal, at law or in
equity.
3.05. Employees.
The
Company does not have or contribute to any pension, profit-sharing, option,
other incentive plan, or other Employee Benefit Plan (as defined in Section
3(3)
of the Employee Retirement Income Security Act of 1974), or have any obligation
to or customary arrangement with employees for bonuses, incentive compensation,
vacations, severance pay, insurance, or other benefits except as set forth
in
Schedule 3.05. Schedule 3.05 is a list of each employee and consultant and
the
compensation paid to each employee and consultant.
3.06. No
Violation of Employee Contracts.
No
current or prior employee, consultant or Shareholder of the Company has any
employment or consulting agreement with the Company, except as set forth
in
Schedule 3.06. To the knowledge of the Company, no employee of the Company
is in
violation of any term of any contract, non-competition agreement, or any
other
contract or agreement or any restrictive covenant with, or any other common
law
obligation to, a former employer relating to the right of any such employee
to
be employed by the Company because of the nature of the business conducted
by
the Company or of the use of trade secrets or proprietary informa-tion of
others. There is neither pending nor, to the Knowledge of the Company,
threatened, any actions, suits, proceedings, or claims with respect to any
contract, agreement, covenant, or obligation referred to in the preceding
sentence.
3.07. Contracts,
Agreements and Instruments.
Schedule 3.07 includes the following documents of the Company:
3.07.01.
True and correct copies of all material contracts, agreements and other
instruments of the Company, as well as verbal understandings, involving an
obligation on the part of the Company to pay or to render services, individually
or in the aggregate, in excess of $25,000 per year or to receive payments in
excess of $25,000 per year that is not entered in the ordinary course of
business.
3.07.02.
True and correct copies of all verbal and written contracts, arrangements,
and
understandings
with
officers, directors, and five percent or greater shareholders, except as
disclosed in this Agreement.
Except
for matters which, in the aggregate, would not have a Material Adverse Effect
or
are otherwise disclosed in the Schedules attached hereto or in the Agreement,
to
the Knowledge of the Company, no other party to any such contract, agreement,
instrument, leases, or license is now in violation or breach of, or in default
with respect to complying with, any material provision thereof, and each such
contract, agreement, instrument, lease, or license contained in the Schedules
hereto is in full force and effect and is the legal, valid, and binding
obligation of the Company and is enforceable as to them in accordance with
its
terms. The Company does not have Knowledge that any other party to any such
contract listed in Schedule 3.07 has given notice of termination or taken any
action inconsistent with the continuance of such arrangement or understanding,
except for matters which, in the aggregate, would not have a Material Adverse
Effect; and the execution, delivery, and performance of this Agreement will
not
prejudice any such arrangement or understanding in any way contained in the
Schedules hereto, except for matters which, in the aggregate, would not have
a
Material Adverse Effect. The Company is not a member of a customer or user
organization or of a trade association which relationship would be materially
affected by the execution and performance of this Agreement.
3.08. Consents
and Approvals; No Violation.
The
execution and delivery and performance of this Agreement by the Company will
not
(a) conflict with or result in any breach of any provision of the Articles
of
Incorporation, Bylaws or other organization documents of the Company, (b)
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority (as defined herein), or where the
failure to obtain such consent, approval, authorization or permit, or to make
such filing or notification, would not in the aggregate have a Material Adverse
Effect, (c) result in a material default (with or without due notice or lapse
of
time or both) (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, contract, license, agreement or other instrument
or
obligation to which the Company is a party or by which the Company or any of
its
assets may be bound, except for such defaults (or rights of termination,
cancellation or acceleration) as to which requisite waivers or consents have
been requested, (d) result in the creation or imposition of any lien, charge
or
other encumbrance on the assets of the Company, or (e) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company or
any
of its assets.
3.09. Financial
Statements.
The
Company has delivered to Dragon Gold an unaudited Company balance sheet as
of
May 8, 2007, which fairly presents in all material respects the financial
position of the Company to which it relates as of its date, and each of the
related consolidated statements of operations and retained earnings and cash
flows or equivalent statements in the Company Financial Statements (including
any related notes and schedules) in accordance with generally accepted
accounting principles.
3.10. Undisclosed
Liabilities.
There
are no undisclosed and/or contingent liabilities that may bear upon the value
of
the Company’s business and its financial condition that is not reflected in the
Company Financial Statements.
3.11. Permits
and Licenses.
The
Company has all permits, licenses, and other similar authorizations necessary
for the conduct of its busi-ness as now being conducted by it, and it is not
in
default in any respect under any such permits, licenses, or authoriza-tions,
except for the absence of which would not have a Material Adverse Effect. No
royalties, commissions, or fees are payable by the Company to any person by
reason of the ownership or use of any intangible property. The Company is the
sole and exclusive owner of all of its assets, does not use any of its assets
by
the consent of any other person and is not required to and does not make any
payments to others with respect thereto. Except as set forth in Schedule 3.11,
there are no material licenses, sub-licenses, or agreements relating to the
use
of any intangible property of the Company now in effect, and the Company has
no
Knowledge that any intangible property of the Company is being infringed by
others. No claim that would have a Material Adverse Effect on the business
of
the Company is pending or, to the Knowledge of the Company, threatened, or
has
been made since the Company’s inception to the effect that, nor does the Company
have any Knowledge that, the operation of the Company’s business or any method,
process, part, or material that the Company employs, conflicts in any material
way with, or infringes in any material way upon any rights of the type
enumerated above, owned by others.
3.12. Properties.
The
Company has good and valid title to all properties and assets used in its
business or owned by it, free and clear of all liens, mortgages, security
interests, pledges, charges, and encumbrances (except for liens for current
taxes not yet due or disclosed on the Company’s Last Balance Sheet Date).
3.13. Hazardous
Materials.
To the
best of the Company’s Knowledge, the Company has complied with any and all
applicable laws, ordinances, rules, and regulations related to the posses-sion,
transportation, or disposal of hazardous materials. To the Knowledge of the
Company, no employee of the Company has been exposed to hazardous materials
such
that exposure could cause damage to such employee.
3.14. Interest
in Competitors.
No
shareholder, officer or director of the Company, nor any spouse or child of
any
shareholder, officer or director with authority to enter into con-tracts on
behalf of the Company, has any direct or indirect interest in any competitor,
supplier, or customer of the Company or in any person from whom or to whom
the
Company leases any real or personal property, or in any other person with whom
the Company is doing business.
3.15. Tax
and Other Liabilities.
The
Company does not have any present liability of any nature, accrued or
contingent, of the type required to be reflected on a balance sheet or in
appropriate footnotes prepared in accordance with GAAP, including, without
limitation, liabilities for federal, state, local, or foreign taxes and
liabilities to customers or suppliers, which could have a Material Adverse
Effect upon the Company, other than the following:
i. |
Liabilities
for which full provision has been made on the Company’s Last Balance
Sheet; and
|
ii.
|
Other
liabilities arising since the date of the Company’s Last Balance Sheet and
prior to the Closing in the ordinary course of business which are
not
inconsistent with the representations and warranties of the Company
or any
other provision of this Agreement.
|
Without
limiting the generality of the foregoing, the amounts set forth as provisions
for taxes on the Company Last Balance Sheet are sufficient for all accrued
and
unpaid taxes of the Company, whether or not due and payable and whether or
not
disputed, under tax laws, as in effect on the date of the Company’s Last Balance
Sheet or now in effect, for the period ended on such date and for all fiscal
years prior thereto. The Company has filed all applicable tax returns required
to be filed by it or has obtained applicable extensions and are not delinquent
with respect to such extensions; have paid (or have established on the Company
Last Balance Sheet a reserve for) all taxes, assessments, and other governmental
charges payable or remittable by it or levied upon it or its properties, assets,
income, or franchises, which are due and payable and have delivered to Dragon
Gold a true and correct copy of any report as to adjustments received by the
Company from any taxing authority during the past five years and a statement
as
to any litigation, governmental or other proceeding (formal or informal), or
investigation pending.
3.16. Changes
or Events.
Since
the Company Last Balance Sheet Date:
3.16.01.
There has been no event or condition affecting the Company which would have
a
Material Adverse Effect on the Company.
3.16.02.
The Company has not authorized, declared, paid or effected any dividend or
liquidation or other distribution in respect of the Company Stock or other
equity interest or any direct or indirect redemption, purchase or other
acquisition of any equity interest of the Company.
3.16.03.
The Company has not had any changes in its condition (financial or otherwise),
liabilities, assets, or business or in any of its business relationships,
including relationships with suppliers or customers, that, when considered
individually or in the aggre-gate, might reasonably be expected to have a
Material Adverse Effect.
3.16.04.
The Company has not experienced any destruction of, damage to, or loss of any
asset (regardless of whether covered by insurance) that, when considered
individually or in the aggregate, might reasonably be expected to have a
Material Adverse Effect.
3.16.05.
The Company has not made any changes in accounting methods or practices
(including, without limitation, any change in depreciation or amortization
policies or rates), except for any such changes as were required by
law.
3.16.06.
Other than in the ordinary course of business, the Company has not increased
the
salary or other compensation payable or to become payable by the Company to
any
employee, or the declaration, payment, or commitment or obligation of any kind
for the pay-ment by the Company of a bonus or other additional salary or
compensation to any such person.
3.16.07.
The Company has not sold, leased, transferred, or assigned any of their assets,
tangible or intangible, other than for a fair consideration in the ordinary
course of business;
3.16.08.
No party has accelerated, terminated, modified or cancelled any agreement,
contract, lease or license (or series of related agreements, contracts, leases
and licenses) involving more than $25,000 to which the Company is a
party;
3.16.09.
The Company has not made any loans to any person or entity, or guaranteed any
loan;
3.16.10. To the Knowledge of the Company, the Company has not suffered any
loss
or any threatened loss of any permit, license, qualification, special charter
or
certificate of authority held or enjoyed or formerly held or enjoyed by the
Company which loss has had or upon occurrence might reasonably be expected
to
have a Material Adverse Effect;
3.16.11.
The Company has operated its business in the ordinary course and consistent
with
past practices so as to preserve its business organization intact, to retain
the
ser-vices of its employees and to preserve its goodwill and relationships with
suppliers, creditors, cus-tomers, and others having business relationships
with
it;
3.16.12.
The Company has not issued any note, bond or other debt security or created,
incurred or assumed, or guaranteed any indebtedness for borrowed money or
capitalized lease obligations;
3.16.13.
The Company has not delayed or postponed the payment of accounts payable and
other liabilities outside the ordinary course of business;
3.16.14.
The Company has not granted any license or sublicense of any rights under or
with respect to any Intellectual Property owned or licensed by the
Company;
3.16.15.
The Company has not made any loan to, or entered into any other transaction
with, any of its directors, officers, and employees, outside the ordinary course
of business; and
3.16.16.
The Company has not made any agreement to do any of the things described in
the
preceding clauses 3.16.01 through 3.16.15.
3.17 Intellectual
Property.
The
Company does not own or have pending, nor has it licensed, any Intellectual
Property,
other than as described in Schedule 3.17 (the “Company Intellectual Property”).
The Company Intellectual Property has not been the subject of any interference,
opposition or cancellation proceedings. No Shareholder, employee of the Company
or affiliate of the Shareholders, nor any other partnership or enterprise in
which the Shareholders, any employee, or any relative or affiliate had or now
has a 5% or greater ownership interest or other substantial interest, possesses
any Intellectual Property which is used by the Company pursuant to any agreement
or arrangement with such person. The Company has not received any written notice
or written claim of infringement by the Company of the Intellectual Property
of
any third party. There is no infringement by others of the Intellectual Property
of the Company.
3.18.
No
Defaults.
The
consummation of the transactions contemplated by this Agreement will not result
in or constitute any of the following: (i) a breach of any term or provision
of
any other agreement of the Company that will not be waived or released at
Closing; (ii) a default or an event that will not be waived or released at
Closing, and that, with notice or lapse of time or both, would be a default,
breach, or violation of the Articles of Incorporation or Bylaws of the Company
or of any lease, license), promissory note, conditional sales contract,
commitment, inden-ture, mortgage, deed of trust, or other agreement, instrument,
any Intellectual Property, or arrangement to which the Company is a party or
by
which the Company or its assets are bound; (iii) an event that will not be
waived or released at Closing and that would permit any party to termi-nate
any
agreement or to accelerate the maturity of any in-debtedness or other obligation
of the Company; (iv) the creation or imposition of any lien, charge, or
encumbrance on any of the Company’s assets; or (v) a violation of any law or any
rule or regulation of any administrative agency or governmental body unrelated
to the business or any order, writ, injunction or decree of any court,
administrative agency or governmental body to which the Company is
subject.
3.19. No
Prohibited Payments.
Neither
the Company nor any employee, or agent of the Company, has made or authorized
any payment of funds of the Company or on behalf of the Company prohibited
by
law and no funds of the Company have been set aside to be used for any payment
prohibited by law.
3.20. Insurance.
The
Company maintains insurance coverage necessary to meet its business
needs.
3.21. Completeness
of Disclosure.
No
representation or warranty in this Agreement and no Appendix, Schedule, Exhibit,
or certificate prepared by the Company pursuant hereto and no statement made
or
other document prepared by the Company and furnished to Dragon Gold by the
Company contains any untrue statement of a material fact or omits or will omit
any material fact necessary in order to make the statements contained therein
not misleading.
Each
of
the Shareholders represents and warrants the following:
3.22. Restricted
Stock.
Each
Shareholder understands and acknowledges that all of the shares of the common
stock of Dragon Gold to be issued to them shall be issued under an exemption
from registration provided for under Section 4(2) of the Securities Act of
1933,
as amended (the “Act”). Consequently, the Shareholders understand and
acknowledge that such common stock will be “restricted stock” as that term is
defined in Rule 144 promulgated under the Act, and that (a) appropriate legends
will be imprinted upon all certificates for the shares of common stock of Dragon
Gold to be issued to the Shareholders, and (b) appropriate stop transfer orders
will be entered in the stock transfer records of Dragon Gold. In addition,
the
Shareholders represent his/her intention to acquire the shares of Dragon Gold
for his/her own account, for investment purposes only, and not with a view
to
any subsequent resale or distribution thereof.
3.23. Authorization.
All
action on the part of the individual Shareholders necessary for the
authorization, execution and delivery of this Agreement by the Shareholders
and
the Company have been taken.
3.24. Title
to the Shares.
Each of
the Shareholders owns, and is transferring to Dragon Gold at the Closing, good,
valid and marketable title to the number of shares of Company Stock set forth
opposite the name of the Shareholders on the signature page hereof, free and
clear of all liens, claims, options and encumbrances whatsoever. Each
Shareholder represents that there are no outstanding options, warrants or rights
to purchase or acquire any of the Company Stock of the individual Shareholders
nor is the Company Stock owned by each Shareholder subject to any voting
agreements, pledges, shareholders agreement or lock-up agreement, or rights
of
first refusals. Each of the Shareholders represents that the shares of Company
Stock being transferred represent all the Company securities, of any kind,
held
by such Shareholder. Each Shareholder hereby represents that the Common Stock
is
evidenced in “book entry” format and, accordingly, no Common Stock certificates
have been issued.
3.25. Purchase
Entirely for His Own Account.
The
Dragon Gold securities will be acquired for investment for each of the
Shareholders’ own account, not as a nominee or agent, and not with the view to
the resale or distribution of any part thereof, and each of the Shareholders
has
no present intention of selling, granting any participation in, or otherwise
distributing the Dragon Gold securities. Each of the Shareholders have no
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to such person with respect to any of the
securities of Dragon Gold.
3.26. Disclosure
of Information.
Each of
the Shareholders has reviewed the SEC Filings and has had the opportunity to
ask
questions of, and receive answers from, representatives of Dragon Gold to obtain
additional information regarding Dragon Gold.
3.27. |
Accredited
Investor.
Each Shareholder hereby represents that he/she/it is an “accredited
investor” as
|
defined
in Rule 501 of Regulation D of the Securities Act of 1933.
3.28. Acceptance
of Dragon Gold Stock.
Each
Shareholder has read this Agreement, agrees to be bound by all the terms of
this
Agreement, and accepts Dragon Gold Stock in exchange for Company Stock in the
denominations set forth in Schedule 2.01.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF DRAGON
GOLD
Dragon
Gold hereby agrees, represent, and warrant to the Company, on the date of this
Agreement, as follows:
4.01.
Organization
and Qualification.
(a) Dragon
Gold is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Nevada, with all requisite power and authority
to
conduct its business and is not in breach of, or in default with respect to,
any
term of its Articles of Incorporation, Bylaws or other organizational documents.
Dragon Gold has obtained all necessary consents, authorizations, approvals,
orders, licenses, certificates, and permits of and from, and declarations and
filings with, all federal, state, local, and other governmental authorities
and
all courts and other tribunals, to own, lease, license, and use its properties
and assets and to carry on the business in which it is now engaged, except
where
the failure to do so would not have a Material Adverse Effect. Dragon Gold
is
duly qualified to transact the business in which it is engaged in every
jurisdiction in which its ownership, leasing, licensing, or use of property
or
assets or the conduct of its business makes such qualification necessary, except
where the failure to do so would not have a Material Adverse
Effect.
(b) Dragon
Gold does not have and has never had any subsidiaries and does not directly
or
indirectly own any equity interest in, or any interest convertible into or
exchangeable for any equity or similar interest in, any corporation,
partnership, joint venture or other business association or entity.
4.02
SEC
Document.
Dragon
Gold has made all of its filings with the SEC that it has been required to
make
under the Act, and the Securities Exchange Act of 1934, as amended (“Exchange
Act”) since January 2005. As of their respective dates, each of the SEC Filings,
attached hereto as Schedule 4.02, complied substantially in all material
respects with the requirements of the Exchange Act and the rules and regulations
of the SEC promulgated thereunder. As of the Closing Date, the financial
statements included in or incorporated by reference into the SEC Documents,
including the related notes and schedules, have been prepared in accordance
with
GAAP applied on a consistent basis throughout the periods covered thereby,
are
true, correct and complete in all respects, and are consistent with the books
and records of Dragon Gold.
4.03.
Capitalization.
The
authorized capital stock of Dragon Gold consists of 500,000,000 shares of common
stock, of which 49,246,724 shares of common stock are outstanding. All issued
and outstanding shares of Dragon Gold common stock are validly issued, fully
paid, non-assessable and free of preemptive rights. Except as set forth herein,
(i) there are no options, warrants, convertible securities or any other
obligation that require Dragon Gold to issue additional shares of capital stock
and (ii) none of the holders of Dragon Gold common stock have anti-dilution
rights, rights of first refusals, subscription rights or rights to purchase
issuances of additional shares.
4.04. Authority,
Binding Agreement.
This
Agreement has been approved by the Board of Directors of Dragon Gold. No
consents, authorizations or approvals, whether of a governmental agency or
instrumentality or otherwise, are necessary in order to enable Dragon Gold
to
enter into and perform this Agreement. This Agreement constitutes legal, valid
and binding obligations of Dragon Gold and is enforceable against Dragon Gold
in
accordance with its terms.
4.05.
Litigation.
There
is not any suit, action, arbitration, or legal, administrative, or other
proceeding or governmental investigation (formal or informal), pending or to
the
best of Dragon Gold’s Knowledge threatened (or any basis therefor known to
Dragon Gold), with respect to Dragon Gold (as it relates to the business of
Dragon Gold), including but not limited to any action or claim under any
federal, state, local or other governmental act, rule, regulation, or any
interpretations thereof, relating to environmental matters or the protection
of
the safety and health of persons connected with the Dragon Gold’ business
(including but not limited to the transportation, treatment, storage, recycling,
disposal, or release into the environment of hazardous or toxic materials or
waste), or any basis on which any proceeding or investigation against Dragon
Gold might reasonably be undertaken or brought. Dragon Gold is not presently
engaged in any legal action to recover monies due to it, for damages sustained
by the Dragon Gold, or amounts owed to Dragon Gold. During the two year period
immediately preceding the Closing, Dragon Gold has neither received nor been
a
party to any written notice of violations, orders, claims, citations,
complaints, penalties, assessments, court, or other proceedings, administrative,
civil or criminal, at law or in equity.
4.06. Employees.
Dragon
Gold does not have or contribute to any pension, profit-sharing, option, other
incentive plan, or other Employee Benefit Plan (as defined in Section 3(3)
of
the Employee Retirement Income Security Act of 1974), or have any obligation
to
or customary arrangement with employees for bonuses, incentive compensation,
vacations, severance pay, insurance, or other benefits. Dragon Gold has no
employees or consultants.
4.07. No
Violation of Employee Contracts.
No
current or prior employee, consultant or stockholder of Dragon Gold has any
employment or consulting agreement with Dragon Gold. To the Knowledge of Dragon
Gold, no employee of Dragon Gold is in violation of any term of any contract,
non-competition agreement, or any other contract or agreement or any restrictive
covenant with, or any other common law obligation to, a former employer relating
to the right of any such employee to be employed by Dragon Gold because of
the
nature of the business conducted by Dragon Gold or of the use of trade secrets
or proprietary informa-tion of others. There is neither pending nor, to the
Knowledge of Dragon Gold, threatened, any actions, suits, proceedings, or claims
with respect to any contract, agreement, covenant, or obligation referred to
in
the preceding sentence.
4.08. Contracts,
Agreements and Instruments.
There
are no contracts, agreements and other instruments of Dragon Gold, as well
as
verbal understandings, involving an obligation on the part of Dragon Gold to
pay
or to render services, individually or in the aggregate, in excess of $5,000
per
year or to receive payments in excess of $5,000 per year, except as described
in
this Agreement. There are no verbal and written contracts, arrangements, and
understandings with officers, directors, and five percent or greater
shareholders.
4.09. Consents
and Approvals; No Violation.
The
execution and delivery and performance of this Agreement by Dragon Gold will
not
(a) conflict with or result in any breach of any provision of the Articles
of
Incorporation, Bylaws or other organization documents of Dragon Gold, (b)
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority (as defined herein), or where the
failure to obtain such consent, approval, authorization or permit, or to make
such filing or notification, would not in the aggregate have a Material Adverse
Effect, (c) result in a material default (with or without due notice or lapse
of
time or both) (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, contract, license, agreement or other instrument
or
obligation to which Dragon Gold is a party or by which Dragon Gold or any of
its
assets may be bound, except for such defaults (or rights of termination,
cancellation or acceleration) as to which requisite waivers or consents have
been requested, (d) result in the creation or imposition of any lien, charge
or
other encumbrance on the assets of Dragon Gold, or (e) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Dragon Gold or
any
of its assets.
4.10. Balance
Sheet Items.
As
reported on Dragon Gold’s quarterly report on Form 10-QSB for the three-month
period ended December 31, 2006, Dragon Gold had total assets of $17,971, total
liabilities of $20,677, and there are no undisclosed and/or contingent
liabilities (including all taxes, assessments, and other governmental charges
payable by it or levied upon it or its properties, assets, income, or
franchises). Dragon Gold also does not have any present liability of any nature,
accrued or contingent, of the type required to be reflected on a balance sheet
or in appropriate footnotes prepared in accordance with GAAP. At Closing, there
will be no change to assets and all liabilities (including undisclosed and/or
contingent and taxes) shall be settled and/or paid in full, except for the
liabilities set forth on Schedule 6.03.
4.11. Permits
and Licenses.
Except
to satisfy the representations set forth in Section 4.01, Dragon Gold is not
required to have or maintain any permits, licenses, and other similar
authorizations necessary for the conduct of its busi-ness as now being conducted
by it, and it is not in default in any respect under any such permits, licenses,
or authoriza-tions. No royalties, commissions, or fees are payable by Dragon
Gold to any person by reason of the ownership or use of any intangible property.
Dragon Gold is the sole and exclusive owner of all of its assets, does not
use
any of its assets by the consent of any other person and is not required to
and
does not make any payments to others with respect thereto. There are no material
licenses, sub-licenses, or agreements relating to the use of any intangible
property of Dragon Gold now in effect, and Dragon Gold has no Knowledge that
any
intangible property of Dragon Gold is being infringed by others. No claim that
would have a Material Adverse Effect on the business of Dragon Gold is pending
or, to the Knowledge of Dragon Gold, threatened, or has been made since Dragon
Gold’s inception to the effect that, nor does Dragon Gold has any Knowledge
that, the operation of Dragon Gold’s business or any method, process, part, or
material that Dragon Gold employs, conflicts in any material way with, or
infringes in any material way upon any rights of the type enumerated above,
owned by others.
4.12. Properties.
Dragon
Gold has good and valid title to all properties and assets used in its business
or owned by it, free and clear of all liens, mortgages, security interests,
pledges, charges, and encumbrances.
4.12.01.
Set forth in the SEC Filings is a true and complete list of all properties
and
assets owned, leased, or licensed by Dragon Gold, including with respect to
such
properties and assets leased or licensed by Dragon Gold, a description of such
lease or license. All such properties and assets owned by Dragon Gold are
reflected in its last balance sheet as reported in the SEC Filings. All
properties and assets owned, leased, or licensed by Dragon Gold are in good
and
usable condition (reasonable wear and tear, which is not such as to have a
Material Adverse Effect on the operation of the business of Dragon Gold,
excepted).
4.12.02.
The properties and assets owned, leased, or licensed by Dragon Gold constitute
all such properties and assets which are necessary to the business of Dragon
Gold as presently conducted.
4.13. Hazardous
Materials.
Dragon
Gold is not in the business of posses-sion, transportation, or disposal of
hazardous materials.
4.14. Changes
or Events.
Since
Dragon Gold’s last balance sheet as disclosed in its SEC Filings:
4.14.01.
There has been no event or condition affecting Dragon Gold which would have
a
Material Adverse Effect on Dragon Gold.
4.14.02.
Dragon Gold has not authorized, declared, paid or effected any dividend or
liquidation or other distribution in respect of Dragon Gold Stock or other
equity interest or any direct or indirect redemption, purchase or other
acquisition of any equity interest of Dragon Gold, except preferred
stock.
4.14.03.
Dragon Gold has not had any changes in its condition (financial or otherwise),
liabilities, assets, or business or in any of its business relationships,
including relationships with suppliers or customers, that, when considered
individually or in the aggre-gate, might reasonably be expected to have a
Material Adverse Effect.
4.14.04.
Dragon Gold has not experienced any destruction of, damage to, or loss of any
asset (regardless of whether covered by insurance) that, when considered
individually or in the aggregate, might reasonably be expected to have a
Material Adverse Effect.
4.14.05.
Dragon Gold has not made any changes in accounting methods or practices
(including, without limitation, any change in depreciation or amortization
policies or rates), except for any such changes as were required by
law.
4.14.06.
Other than in the ordinary course of business, Dragon Gold has not increased
the
salary or other compensation payable or to become payable by Dragon Gold to
any
employee, or the declaration, payment, or commitment or obligation of any kind
for the pay-ment by Dragon Gold of a bonus or other additional salary or
compensation to any such person.
4.14.07.
Dragon Gold has not sold, leased, transferred, or assigned any of their assets,
tangible or intangible, other than for a fair consideration in the ordinary
course of business;
4.14.08.
No party has accelerated, terminated, modified or cancelled any agreement,
contract, lease or license (or series of related agreements, contracts, leases
and licenses) involving more than $5,000 to which Dragon Gold is a
party;
4.14.09.
Dragon Gold has not made any loans to any person or entity, or guaranteed any
loan;
4.14.10.
To the Knowledge of Dragon Gold, Dragon Gold has not suffered any loss or any
threatened loss of any permit, license, qualification, special charter or
certificate of authority held or enjoyed or formerly held or enjoyed by Dragon
Gold which loss has had or upon occurrence might reasonably be expected to
have
a Material Adverse Effect;
4.14.11.
Dragon Gold has operated its business in the ordinary course and consistent
with
past practices so as to preserve its business organization intact, to retain
the
ser-vices of its employees and to preserve its goodwill and relationships with
suppliers, creditors, cus-tomers, and others having business relationships
with
it;
4.14.12.
Dragon Gold has not issued any note, bond or other debt security or created,
incurred or assumed, or guaranteed any indebtedness for borrowed money or
capitalized lease obligations;
4.14.13.
Dragon Gold has not delayed or postponed the payment of accounts payable and
other liabilities outside the ordinary course of business;
4.14.14.
Dragon Gold has not made any loan to, or entered into any other transaction
with, any of its directors, officers, and employees, outside the ordinary course
of business; and
4.14.15.
Dragon Gold has not made any agreement to do any of the things described in
the
preceding clauses 4.14.01 through 4.14.15.
4.15. Intellectual
Property.
Dragon
Gold does not own any Intellectual Property.
4.16.
No
Defaults.
The
consummation of the transactions contemplated by this Agreement will not result
in or constitute any of the following: (i) a breach of any term or provision
of
any other agreement of Dragon Gold that will not be waived or released at
Closing; (ii) a default or an event that will not be waived or released at
Closing, and that, with notice or lapse of time or both, would be a default,
breach, or violation of the Articles of Incorporation or Bylaws of Dragon Gold
or of any lease, license, promissory note, conditional sales contract,
commitment, inden-ture, mortgage, deed of trust, or other agreement, instrument,
any Intellectual Property, or arrangement to which Dragon Gold is a party or
by
which Dragon Gold or its assets are bound; (iii) an event that will not be
waived or released at Closing and that would permit any party to termi-nate
any
agreement or to accelerate the maturity of any in-debtedness or other obligation
of Dragon Gold; (iv) the creation or imposition of any lien, charge, or
encumbrance on any of Dragon Gold’s assets; or (v) a violation of any law or any
rule or regulation of any administrative agency or governmental body unrelated
to the business or any order, writ, injunction or decree of any court,
administrative agency or governmental body to which Dragon Gold is
subject.
4.17. No
Prohibited Payments.
Neither
Dragon Gold nor any employee, or agent of Dragon Gold, has made or authorized
any payment of funds of Dragon Gold or on behalf of Dragon Gold prohibited
by
law and no funds of Dragon Gold have been set aside to be used for any payment
prohibited by law.
4.18. Insurance.
Dragon
Gold represents that it has no insurance policies.
4.19. Completeness
of Disclosure.
No
representation or warranty in this Agreement and no Appendix, Schedule, Exhibit,
or certificate prepared by Dragon Gold pursuant hereto and no statement made
or
other document prepared by Dragon Gold and furnished to the Company by Dragon
Gold contains any untrue statement of a material fact or omits or will omit
any
material fact necessary in order to make the statements contained therein not
misleading.
4.20. Regulatory
Investigations.
There
have been and are no current SEC, state securities commissions, or NASD
investigations into the Company or its trading activities.
4.21. Market
for Common Stock.
Dragon
Gold’s common stock is currently listed on the over-the-counter electronic
bulletin board ("OTCBB") under the symbol "DRGO.OB". Dragon Gold is not aware
of
any fact or circumstance that would jeopardize or otherwise impair the ability
of Dragon Gold’s Stock to trade on the OTCBB presently or after consummation of
the transactions contemplated herein.
4.22. Termination
of Agreements.
In May
2006, Dragon Gold terminated, with no liability to itself or its officers or
directors, the following eight agreements, contracts or other obligations:
(i) |
Cooperative
Agreement with Yinchuan Mining;
|
(ii) |
Cooperative
Agreement with Guilin Research Institute of Geology and Mineral
Resources;
|
(iii) |
Letter
of Intent with Hanzhong Geological
Brigade;
|
(iv) |
Acquisition
Agreement with Dragon Minerals, Inc.
(“DMI”);
|
(v) |
Letter
of Intent with the shareholders of
DMI;
|
(vi) |
Employment
Agreement Chairman Non-Executive;
|
(vii) |
Cancellation
of 13,500,000 shares of common stock; and
|
(viii) |
Cancellation
of Options to purchase 3,000,000 shares of common
stock.
|
Dragon
Gold incurred no liability to any third party prior to or as a result of any
of
the above referenced agreements.
ARTICLE
V
DELIVERY
OBLIGATIONS OF DRAGON GOLD
The
obligations of Dragon Gold under this Agreement are subject, at the option
of
Dragon Gold, to the following conditions:
5.01. The
Shareholders in the amount of at least 80% shall execute this Agreement and
deliver at Closing the signature page of this Agreement.
5.02. Each
Shareholder shall deliver Company stock certificates owned by each Shareholder
and duly executed stock powers in denomination set forth in Schedule 2.01.
ARTICLE
VI
DELIVERY
OBLIGATIONS OF THE
COMPANY
AND THE SHAREHOLDERS
The
obligations of the Company and the Shareholders under this Agreement are
subject, at the option of the Company and the Shareholders, to the following
conditions:
6.01. Dragon
Gold shall deliver board of directors resolutions, in the form attached as
Schedule 6.01, acknowledging that its officers have resigned and be replaced
by
the following Company officers: (i) Xxxx Xxxxx will serve as the Company’s chief
financial officer; and (ii) Xxx Xxxxx will serve as the Company’s chief
executive officer.
6.02. Dragon
Gold shall deliver board of directors resolutions, in the form attached as
Schedule 6.01, acknowledging that the directors of Dragon Gold shall be Xxx
Xxxxx and Xxxx Xxxxxxxxx post-Closing.
6.03. Dragon
Gold shall deliver documents, attached as Schedule 6.03 confirming that all
debts have been settled and/or paid in full as of the Closing Date and that
there are only a limited amount of liabilities at Closing.
6.04. Dragon
Gold shall deliver an opinion of counsel, dated the Closing Date, to the
Company, attached as Schedule 6.04.
ARTICLE
VII
INDEMNIFICATION
7.01. Indemnification
by Dragon Gold.
Dragon
Gold shall indemnify, defend and hold harmless the Company and Shareholders
against any damage, loss, claim, liability, cost or expense, including
reasonable fees and disbursements of counsel, accountants, experts and other
consultants (collectively, “Damages”),
resulting from, arising out of, or based upon any misstatement or omission
from
any representation by, or any breach of warranty, covenant or agreement of
Dragon Gold contained in this Agreement, including schedules, certificates
and
documents delivered by Dragon Gold.
7.02. Indemnification
Procedures.
Promptly after receipt by the Company (the “Indemnitee”),
of
notice of any action, suit, proceeding, audit, claim or potential claim (any
of
which is hereinafter individually referred to as a “Circumstance”), which could
give rise to a right to indemnification for Damages pursuant to Section 7.01,
the Indemnitee shall give Dragon Gold (the “Indemnitor”)
written notice describing the Circumstance in reasonable detail; provided,
that
failure of Indemnitee to give such notice to the Indemnitor shall not relieve
the Indemnitor from any of its indemnification obligations hereunder unless
(and
then only to the extent) that the failure to give such notice prejudices the
defense of the Circumstance by the Indemnitee. Indemnitor shall pay such
obligation and assume such liability in full unless it disputes such
Circumstance within ten (10) days from the date of notice provided to
Indemnitor.
7.03.
Termination.
Indemnification obligations of Dragon Gold terminate twelve months after the
date of the signing of this Agreement provided, however, that the
Indemnification period will be extended if there is a claim made during the
twelve-month period.
ARTICLE
VIII
MISCELLANEOUS
8.01. Expenses.
Dragon
Gold and the Company shall each be solely responsible for and bear all of its
own respective expenses, including, without limitation, expenses of legal
counsel, accountants, financial and other advisors, incurred at any time in
connection with pursuing or consummating the definitive agreements and the
Transaction contemplated herein.
8.02. Brokerage
and Other Fees.
Each
party shall be responsible for the fees of their respective brokers and/or
professionals (including, without limitation, legal and accounting fees) engaged
to assist in the preparation, negotiation and counseling with respect, and
relating, to this Agreement and consummation of the transactions contemplated
herein, as well as their respective out-of-pocket expenses.
8.03. Further
Actions.
At any
time and from time to time, the parties agree, at their expense, to take such
actions and to execute and deliver such documents as may be reasonably necessary
to effectuate the purposes of this Agreement.
8.04. Understanding
and Advice of Counsel.
The
Company, the Shareholders, and Dragon Gold have had the assistance of separate
counsel (including, without limitation, tax counsel) in carefully reviewing,
discussing and considering all terms of this Agreement; and, with the benefit
of
such advice by counsel, who has read and considered this Agreement, have agreed
to execute the same. This Agreement shall not be construed against or
unfavorably to any party because of such party’s involvement in the preparation
or drafting of this Agreement.
8.05. Modification.
The
Agreement and the schedules and exhibits hereto set forth the entire
understanding of the parties with respect to the subject matter hereof supersede
all existing agreements among them concerning such subject matter, and may
be
modified only by a written instrument duly executed by the Parties.
8.06. Notices.
Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be delivered by personal delivery or by overnight
delivery or mailed by certified mail, return receipt requested (or by the most
nearly comparable method if mailed from or to a location outside of the United
States), or delivered against receipt to the party to whom it is to be given
at
the address of such party set forth on the signature page to this Agreement.
Any
notice or other communication given by certified mail (or by such comparable
method) shall be deemed given at the time of receipt thereof.
8.07. Waiver.
Any
waiver by any party of a breach of any provision of this Agreement shall not
operate as or be construed to be a waiver of any other breach of that provision
or of any breach of any other provision of this Agreement. The failure of a
party to insist upon strict adherence to any term of this Agreement on one
or
more occasions will not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other
term
of this Agreement. Any waiver must be in writing and, in the case of a corporate
party, be authorized by a resolution of the Board of Directors or by an officer
of the waiving party.
8.08. Binding
Effect.
The
provisions of this Agreement shall be binding upon and inure to the benefit
of
each party’s respective successors, assigns, heirs, and personal
representatives.
8.09. No
Third-Party Beneficiaries.
Except
for the Investors which are third-party beneficiaries to this Agreement, this
Agreement does not create, and shall not be construed as creating, any rights
enforceable by any person not a party to this Agreement.
8.10. Severability.
If any
provision of this Agreement is invalid, illegal, or unenforceable, the balance
of this Agreement shall remain in effect, and if any provision is inapplicable
to any person or circumstance, it shall nevertheless remain applicable to all
other persons and circumstances.
8.11. Headings.
The
headings of this Agreement are solely for convenience of reference and shall
be
given no effect in the construction or interpretation of this
Agreement.
8.12. Counterparts,
Governing Law;
Venue.
This
Agreement may be executed in any number of counterparts (facsimile signatures
are sufficient), each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall
be
governed by and construed in accordance with the laws of the State of Texas
without giving effect to conflict of laws. Venue of any dispute concerning
this
Agreement shall be exclusively in Xxxxxx County, Texas.
8.13. Survival
of Representations and Warranties.
All
representations, warranties, covenants and agree-
ments
made by any party to this Agreement shall survive for a period of twelve months
after the Closing, and upon expiration of such period, such representations
and
warranties shall expire.
8.14. Entire
Agreement; Assignment.
This
Agreement (a) constitutes the entire agreement among the parties with respect
to
the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, among the parties or any of them with
respect to the subject matter hereof and (b) shall not be assigned by operation
of law or otherwise.
8.15. Post-Closing.
The
parties agree to execute, deliver, and take action post-closing as necessary
to
effectuate any transaction herein contemplated.
8.16. Reverse
Split;
Stockholders Meeting; Proxy Statement.
Promptly following the Closing, Dragon Gold shall take all action necessary
to
effect the Reverse Split. Without limiting the generality of the
foregoing, promptly following the Closing, Dragon Gold shall take all action
necessary to call a meeting of its stockholders (the “Stockholders Meeting”),
which shall occur not later than June 30, 2007 (the “Stockholders Meeting
Deadline”), for the purpose of seeking approval of the Reverse Split (the
“Proposal”). In connection therewith, the Company will promptly prepare
and file with the SEC proxy materials (including a proxy statement and form
of
proxy) for use at the Stockholders Meeting and, after receiving and promptly
responding to any comments of the SEC thereon, shall promptly mail such proxy
materials to the stockholders of the Company. The Company will comply with
Section 14(a) of the 1934 Act and the rules promulgated thereunder in relation
to any proxy statement (as amended or supplemented, the “Proxy Statement”) and
any form of proxy to be sent to the stockholders of the Company in connection
with the Stockholders Meeting, and the Proxy Statement shall not, on the date
that the Proxy Statement (or any amendment thereof or supplement thereto) is
first mailed to stockholders or at the time of the Stockholders Meeting, contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein not false or misleading,
or omit to state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies or the
Stockholders Meeting which has become false or misleading.
[SIGNATURE
PAGE SET FORTH BELOW]
IN
WITNESS WHEREOF, the parties have duly executed this Agreement effective as
of
the date written in the preamble of this Agreement.
Dragon
Gold Resources,
Inc., a Nevada Secure
Voice Communications, a Texas
Corporation Corporation
By: By:
_________________,
President
_________________, President
Address:
______________________________ Address:
______________________________
______________________________
______________________________
SECURE
VOICE COMMUNICATION SHAREHOLDERS:
Name Name
_________________ _________________
Signature Signature
Number
of
Shares of Stock: _____________ Number
of
Shares of Stock: _____________
Address:
____________________________ Address:
___________________________
____________________________
___________________________
Name Name
_________________ _________________
Signature Signature
Number
of
Shares of Stock: _____________
Number
of Shares of Stock: _____________
Address:
____________________________ Address:
___________________________
____________________________
___________________________
10
SCHEDULE
2.01
Dragon
Gold Stock exchanged for Company Stock
Name
of Secure Voice Shareholder
|
Number
of Secure Voice Shares Owned
|
Number
of Dragon Gold Shares To be Issued
|
|||||
Silver
Star Holdings
|
22,092,000
|
1,767,360,000
|
|||||
Xxxxxxxx
Xxxxxxxxx Trust
|
3,560,000
|
284,800,000
|
|||||
Xxxxxx
& Xxxxxxxxx
|
1,200,000
|
96,000,000
|
|||||
Xxxxxx
Xxxx
|
3,996,000
|
319,680,000
|
|||||
Xxxx
X. Xxxxx
|
1,600,000
|
128,000,000
|
|||||
Xxx
Xxx
|
300,000
|
24,000,000
|
|||||
Xxxxxxxxx
Xxxxx
|
200,000
|
16,000,000
|
|||||
Xxxxxxx
Xxxxx
|
200,000
|
16,000,000
|
|||||
Xxxxx
Xxxx
|
2,800,000
|
224,000,000
|
|||||
Xxxx
Xxxxxxx
|
100,000
|
8,000,000
|
|||||
Xxxxx
Xxxxx
|
500,000
|
40,000,000
|
|||||
Xxxx
Xxxxxxxxx
|
250,000
|
20,000,000
|
|||||
Xxxxx
Xxxxxx
|
1,600,000
|
128,000,000
|
|||||
Xxxx
Xxxx
|
100,000
|
8,000,000
|
|||||
Xxx
Xxxxx
|
1,600,000
|
128,000,000
|
|||||
Total
|
40,098,000
|
3,207,840,000
|
SCHEDULE
3.05
Employment
Compensation of Company
Employee/Consultant Amount
Paid
1. Xxxxx
Xxxx 2,800,000
shares of common stock
2. Xxxxx
Xxxxxxx Xxxxx $5,000.00/month,
plus 1,600,000
shares of common stock
3. Xxxx
x.
Xxxxx $5,000.00/month,
plus 1,600,000
shares of common stock
SCHEDULE
3.06
Employment
and/or Consulting Agreements of Company
Employment
and Consulting Agreements with the following individuals are attached
hereto:
1. Consulting
Agreement with Xxxxx Xxxx
2. Employment
Agreement with Xxxxx Xxxxxxx Xxxxx
3. Employment
Agreement with Xxxx Xxxxx
SCHEDULE
3.07
Contracts,
Agreements and Instruments of Company
The
following contracts and agreements are attached hereto:
1. |
Promissory
Note issued to Secure Voice Communication, Inc., a Florida
corporation
|
2. |
License
Agreement with Xxxxx Xxxxxx and Xxxxxxx
Xxxxxxxx
|
SCHEDULE
3.11
Permits
and Licenses of Company
The
Company has the following permits and licenses:
1. |
License
Agreement with Xxxxx Xxxxxx and Xxxxxxx
Xxxxxxxx
|
SCHEDULE
3.17
Company
Intellectual Property
See
Schedule 3.11
SCHEDULE
4.02
Dragon
Gold SEC Filings
SCHEDULE
6.01
Board
Resolutions for new Dragon Gold Officers & Directors
SCHEDULE
6.03
Confirmation
that Dragon Gold Debt Settled in Full &
Amount
of Liabilities at Closing
The
undersigned hereby confirm that there is a total of approximately $_________
in
outstanding liabilities of Dragon Gold, Inc. as of the date hereof. All other
outstanding debts of Dragon Gold, Inc. have been settled and/or paid in full.
Dated
as
of the ___ day of May, 2007.
[Name] [Name]
_____________________________ _____________________________
SCHEDULE
6.04
Opinion
of Counsel of Dragon Gold
Opinions
Based
upon and subject to the foregoing, it is my opinion that:
1. Dragon
Gold has the corporate authority to issue a total of 500,000,000 shares of
common stock, $0.001 par value per share; 49,946,724 shares of the common stock
are presently issued and outstanding.
2. Dragon
Gold is a validly existing corporation under the laws of the State of Nevada
and
has full corporate power and authority under such laws to own its properties
and
to conduct its business. Dragon Gold is qualified to conduct business as a
foreign corporation in each jurisdiction where the nature of its business
activities requires such qualification except where failure to so qualify would
not have a material adverse effect upon the business or financial condition
of
Dragon Gold.
3. The
shares issuable under the Agreement and Plan of Reorganization (“Reorganization
Agreement”), when issued and paid for in accordance with their terms, will be
fully paid and non-assessable. Dragon Gold has authorized the issuance of the
shares under the Reorganization Agreement; and has full power and authority
to
issue the same on the terms and conditions set forth in the Reorganization
Agreement, as provided in the Consent of Directors adopting the Reorganization
Agreement.
4. Neither
the execution and delivery of the Reorganization Agreement, nor compliance
with
the terms and provisions thereof, including without limitation the consummation
of the transactions contemplated thereby, will violate any statute, regulation
or ordinance of any governmental authority, or conflict with or result in the
material breach of any term, condition or provision of the Articles of
incorporation, , Bylaws or other charter documents of Dragon Gold, nor, to
my
knowledge, of any agreement, deed, contract, mortgage, indenture, writ, order,
decree, legal obligation or instrument to which Dragon Gold is a party or by
which it or any of its assets or properties are or may be bound; or constitute
a
material default (or an event which, with the lapse of time or the giving of
notice, or both, would constitute a material default) thereunder, nor result
in
the creation or imposition or any lien, charge or encumbrance, or restriction
of
any nature whatsoever with respect to any properties or assets of Dragon Gold
,
nor give to others any interest or rights, including rights of termination,
acceleration or cancellation in or with respect to any of the properties,
assets, contracts or business of Dragon Gold. The Reorganization Agreement and
all other agreements and documents delivered by Dragon Gold in connection
therewith have been duly executed and delivered by Dragon Gold and constitute
valid and binding obligations of Dragon Gold enforceable in accordance with
their respective terms. Execution of the Reorganization Agreement and
performance by Dragon Gold thereunder have been duly authorized by all requisite
corporate action on their respective parts, and performance thereunder will
not
violate any provision of its Articles of Incorporation or Bylaws, nor, to my
knowledge, any agreements, mortgages or other commitments of any type or nature
whatsoever or any law, order, regulation or decree applicable to it or its
properties, except that no opinion is expressed as to the validity of the
indemnification provisions insofar as they are or may be held to be violative
of
public policy (under either state or federal law), the availability of specific
performance or other equitable remedies, the effects of bankruptcy, insolvency,
moratorium and all other similar laws and decisions affecting the rights of
creditors generally.
5.
No
approval of the Dragon Gold shareholders or authorization of or prior filing
with any governmental authority, including the Securities and Exchange
Commission, or any other person or entity on the part of Dragon Gold is required
as a condition to the execution and delivery of the Reorganization Agreement
or
the consummation of the transactions contemplated thereby other than the filing
of any documents contemplated by the Reorganization Agreement.
6. All
of
the shares of Dragon Gold common stock that are issued and outstanding were
issued either pursuant to an effective registration statement under the
Securities Act of 1933 or pursuant to validly perfected exemptions from
registration. I have reviewed the letter dated January 21, 200 by Xxxxxxx Xxxxx,
commonly referred to as the Xxxxx-Worm analysis, and have concluded that (i)
none of the shares of outstanding Dragon Gold common stock is subject to an
interpretation under the Xxxxx-Worm analysis requiring the resale to be
registered under the Securities Act of 1933, (ii) none of the scenarios
described in the letter (or similar scenarios) were used by Dragon Gold with
respect to any of the outstanding shares of Dragon gold common stock, and (iii)
none of the sales of the Dragon Gold common stock would be part of a plan by
any
such person to distribute or redistribute securities to the public in violation
of the registration requirements of the Securities Act of 1933. Dragon Gold
is
not a shell or blank check company. None of the shares of Dragon Gold common
stock that are free trading or eligible for resale under Rule 144k are subject
to the Xxxxx-Worm analysis that would require that the resale of such shares
be
registered under the Securities Act of 1933.