Document:

Silver Dragon Resources Inc.: Exhibit 4.2 - Filed by newsfilecorp.com

Exhibit 4.2

AMENDMENT CONVERTIBLE 
PROMISSORY NOTES DOCUMENT

A-04192011 and B-04192011a-d 

The parties agreed that the following Convertible Promissory
Notes by and between Silver Dragon Resources, Inc. and JMJ Financial are herby
amended as follows: 

	
  Section 3.9. If Holder has opinion provided by its counsel, it will
  be at Holder’s expense.
  

	
  Delivery of Conversion Shares. All references to two day delivery
  of conversion shares is changed to three days. 

ALL OTHER TERMS AND CONDITIONS OF THE ORIGINAL CONVERTIBLE
PROMISSORY NOTE DOCUMENTS REMAIN IN FULL FORCE AND EFFECT. 

Please indicate acceptance and approval of this amendment by
signing below: 

	/s/ Marc Hazout                            
    	/s/ JMJ Financial                          
    
	Marc Hazout 	JMJ Financial 
	President & CEO 	Its Principal 
	Silver Dragon Resources, Inc.Silver Dragon Resources Inc.: Exhibit 10.1 - Filed by newsfilecorp.com

Exhibit 10.1

CONVERTIBLE PROMISSORY NOTE 
$525,000 PLUS INTEREST
DUE & PAYABLE 
DOCUMENT B-04192011a 

THIS NOTE AND THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE
AND THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT OR APPLICABLE EXEMPTION OR SAFE HARBOR PROVISION. 

FOR VALUE RECEIVED, on the Effective Date, as defined below on
the signature page Silver Dragon Resources Inc., as Obligors (each a
"Borrower,” or “Obligor”), hereby promises to pay to the Lender (“Lender” or
“Holder”), as defined below on the signature page, the Principal Sum, as defined
below, along with the Interest Rate, as defined below, according to the terms
herein. 

	
    The "Lender" shall be: 
	
    JMJ Financial / Its Principal, or Its Assignees
  

	
     
    
	
      

	
    The "Principal Sum" shall be: 
	
    $525,000 (five hundred twenty-five thousand US
      Dollars): Subject to the following: accrued, unpaid interest shall be
      added to the Principal Sum. 

	
     
    
	
      

	
    The “Consideration” shall be: 
	
    $500,000 (five hundred thousand US Dollars) in the
      form of the Secured & Collateralized Promissory Note Document
      C-04192011a (including Security & Collateral Agreement). 

	
     
    
	
      

	
    The "Interest Rate" shall be: 
	
    5% one-time interest charge on the Principal Sum.
      No interest or principal payments are required until the Maturity Date,
      but both principal and interest may be included in conversion prior to
      maturity date. 

	
     
    
	
      

	
    The "Conversion Price" shall be the following price: 
	
    As applied to the Conversion Formula set forth in
      2.2, 75% (seventy-five percent) of the average of the three lowest closing
      prices in the 20 trading days previous to the conversion; as applies to
      Silver Dragon Resources Inc. voting common stock. 

	
      
	
      

	
    The "Maturity Date" is the date upon which the Principal Sum of
      this Note, as well as any unpaid interest shall be due and payable, and
      that date shall be: 
	
    3 (three) years from the Effective Date, as defined
      below on the signature page. 

	
      
	
      

	
    The “Prepayment Terms” shall be: 
	
    Prepayment is not permitted, unless approved by
      Holder in writing. 

DOCUMENT B-04192011a

ARTICLE 1 PAYMENT-RELATED PROVISIONS 

	 	1.1 	Interest Rate. Subject to the Holder's right to convert, interest
      payable on this Note will accrue interest at the Interest Rate and shall
      be applied to the Principal Sum. 
	 	 	 
	 	1.2 	Payable on Demand. This Note is payable on demand in an amount not to
      exceed the cash amount paid in towards Document C-04192011a

ARTICLE 2 CONVERSION RIGHTS 

The Holder will have the right to convert the Principal Sum and
accrued interest under this Note into Shares of the Borrower's Common Stock as
set forth below. 

2.1 Conversion Rights and Cashless Exercise. Subject to the
terms set forth in Section 2.7, the Holder will have the right at its election
from and after the Effective Date, and then at any time, to convert all or part
of the outstanding and unpaid Principal Sum and accrued interest into shares of
fully paid and nonassessable shares of common stock of Silver Dragon Resources
Inc. (as such stock exists on the date of issuance of this Note, or any shares
of capital stock of Silver Dragon Resources Inc. into which such stock is
hereafter changed or reclassified, the "Common Stock") as per the Conversion
Formula set forth in Section 2.2. Any such conversion shall be cashless, and
shall not require further payment from Holder. Unless otherwise agreed in
writing by both the Borrower and the Holder, at no time will the Holder convert
any amount of the Note into common stock that would result in the Holder owning
more than 4.99% of the common stock outstanding of Silver Dragon Resources Inc.
Shares from any such conversion will be delivered to Holder by 2:30pm EST within
2 (two) business days of conversion notice delivery (see 3.1) by “DWAC/FAST”
electronic transfer (see “Share Delivery” attachment). 

2.2. Conversion Formula. The number of shares issued through
conversion is the conversion amount divided by the conversion price. 

	 	# Shares = Conversion Amount 
	 	                      
      Conversion Price 
	 	2.3. 	This section 2.3 intentionally left blank.
  
	 	2.4. 	This section 2.4 intentionally left blank.
  

2.5 Reservation of Shares. As of the issuance date of this Note
and for the remaining period during which the conversion right exists, the
Borrower will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of Common Stock upon the full
conversion of this Note. The Borrower represents that upon issuance, such shares
will be duly and validly issued, fully paid and non-assessable. The Borrower
agrees that its issuance of this Note constitutes full authority to its
officers, agents and transfer agents who are charged with the duty of executing
and issuing stock certificates to execute and issue the necessary certificates
for shares of Common Stock upon the conversion of this Note. 

2.6. Delivery of Conversion Shares. Shares from any such
conversion will be delivered to Holder by 2:30pm EST within 2 (two) business
days of conversion notice delivery (see 3.1) by “DWAC/FAST” electronic transfer (see “Share Delivery”
attachment). If those shares are not delivered in accordance with this timeframe
stated in this Section 2.6, at any time for any reason prior to offering those
shares for sale in a private transaction or in the public market through its
broker, Holder may rescind that particular conversion to have the conversion
amount returned to the note balance with the conversion shares returned to the
Borrower. The Company will make its best efforts to deliver shares to
Holder same day / next day. 

DOCUMENT B-04192011a

2.6.1. Conversion Delay Penalties.
Holder may assess penalties or liquidated damages (both referred to herein as
“penalties”) as follows. 

2.6.1. A. For each conversion,
Borrower agrees to deliver share issuance instructions to its transfer agent
same day or next day. In the event that the share issuance instructions are not
delivered to the Borrower’s transfer agent by the next day, a penalty of $2,000
per day will be assessed for each day until share issuance instructions are
delivered to the transfer agent ($2,000 per day inclusive of the day of the
conversion); and such penalty will be added to the principal balance of the Note
(under Holder and Borrower’s expectation that any penalty amounts will tack back
to the original date of the note). 

2.6.1. B. For each conversion, in the
event that shares are not delivered by the third business day (inclusive of the
day of the conversion), a penalty of $2,000 per day will be assessed for each
day after the third business day (inclusive of the day of the conversion) until
share delivery is made; and such penalty will be added to the principal balance
of the Note (under Holder and Borrower’s expectation that any penalty amounts
will tack back to the original date of the note). Borrower will not be
subjected to any penalties once its transfer agent processes the shares to the
DWAC system. 

2.7. Discharge By Payment. Conversions under this Convertible
Promissory Note Document B-04192011a are available only after the Conversion
Amount described herein is discharged by payment of equal or greater value from
the Secured & Collateralized Promissory Note Document C-04192011a by either,
at the Holder’s choice, cash payment, or surrender of security/collateral, or
other negotiated form of payment mutually agreed to in writing. 

ARTICLE 3 MISCELLANEOUS 

3.1. Notices. Any notice required or permitted hereunder must
be in writing and either personally served, sent by facsimile or email
transmission, or sent by overnight courier. Notices will be deemed effectively
delivered at the time of transmission if by facsimile or email, and if by
overnight courier the business day after such notice is deposited with the
courier service for delivery. 

3.2. Amendment Provision. The term "Note" and all reference
thereto, as used throughout this instrument, means this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented. 

3.3. Assignability. This Note will be binding upon the Borrower
and its successors and permitted assigns, and will inure to the benefit of the
Holder and its successors and permitted assigns, and may be assigned by the
Holder. 

DOCUMENT B-04192011a

3.4. Governing Law. This Note will be governed by, and
construed and enforced in accordance, with the laws of the State of Florida,
without regard to the conflict of laws principles thereof. Any action brought by
either party against the other concerning the transactions contemplated by this
Agreement shall be brought only in the state courts of Florida or in the federal
courts located in Miami-Dade County, in the State of Florida. Both parties and
the individuals signing this Agreement agree to submit to the jurisdiction of
such courts. 

3.5. Delivery of Process By Holder To Borrower. In the event of
any action or proceeding by Holder against Borrower, and only by Holder against
Borrower, service of copies of summons and/or complaint and/or any other process
which may be served in any such action or proceeding may be made by Holder via
U.S. Mail, overnight delivery service such as FedEx or UPS, email, fax, or
process server, or by mailing or otherwise delivering a copy of such process to
the Borrower at its last known address or to its last known attorney as set
forth in its most recent SEC filing. 

3.6. Maximum Payments. Nothing contained herein may be deemed
to establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum will be credited
against amounts owed by the Borrower to the Holder and thus refunded to the
Borrower. 

3.7. Attorney Fees. In the event any attorney is employed by
either party to this Note with regard to any legal or equitable action,
arbitration or other proceeding brought by such party for the enforcement of
this Note or because of an alleged dispute, breach, default or misrepresentation
in connection with any of the provisions of this Note, the prevailing party in
such proceeding will be entitled to recover from the other party reasonable
attorneys' fees and other costs and expenses incurred, in addition to any other
relief to which the prevailing party may be entitled. 

3.8. No Public Announcement. Except as required by securities
law, no public announcement may be made regarding this Note, payments, or
conversions without written permission by both Borrower and Holder. 

3.9. Opinion of Counsel. In the event that an opinion of
counsel is needed for any matter related to this Note, Holder has the right to
have any such opinion provided by its counsel. Holder also has the right to have
any such opinion provided by Borrower’s counsel. 

3.10. Effective Date. This Note will become effective only upon
occurrence of the two following events: execution by both parties, and delivery
of valid payment by the Lender in the form of the Secured & Collateralized
Promissory Note Document C-04192011a (including Security & Collateral
Agreement). 

3.11. Director’s Resolution. Once effective, Borrower will
execute and deliver to Holder a copy of a Board of Director’s resolution
resolving that this note is validly issued, paid, and effective. 

3.12. No Shorting. Holder agrees that so long as any Notes from
Borrower to Holder remain outstanding, Holder will not enter into or effect any
“short sales” of the common stock or hedging transaction which establishes a net
short position with respect to the common stock of Silver Dragon Resources Inc.
Borrower acknowledges and agrees that upon submission of conversion notice as set forth in Section 3.1 (up to the
amount of cash paid in under the Notes), Holder immediately owns the common
shares described in the conversion notice and any sale of those shares issuable
under such conversion notice would not be considered short sales 

DOCUMENT B-04192011a

 

BORROWER[S]: 

 

/s/ Marc Hazout                                       

Marc Hazout 
President &
CEO 
Silver Dragon Resources Inc. 

 

LENDER/HOLDER: 

 

/s/ JMJ Financial                                                    

JMJ Financial / Its Principal

EFFECTIVE DATE AS EXECUTED BY LENDER/HOLDER:    
4/20/2011              

 

NOTARY FOR SIGNATURE BY LENDER/HOLDER: 

<NOTARIZED>

DOCUMENT B-04192011a

SAMPLE 

NOTICE OF CONVERSION 

(To be executed by the Holder in order to convert the Note)

The undersigned hereby elects to convert a portion of the Note
issued by Silver Dragon Resources Inc. into Shares of Common Stock of Silver
Dragon Resources Inc. according to the conditions set forth in such Note, as of
the date written below. 

	Date of Conversion:         
    ____________________________________________________
	 
	Conversion Amount:       
    ____________________________________________________
	 
	Conversion Price:             
    ____________________________________________________
	 
	Shares To Be Delivered:  
    ____________________________________________________
	 
	Signature:    
     ____________________________________________________
	 
	Print Name:  
    ____________________________________________________
	 
	Address:      
    ____________________________________________________
	                      
    ____________________________________________________
	                      
    ____________________________________________________

	Shares from any such conversion will be
    delivered to
      Holder by 2:30pm EST within 2 (two) business days of conversion
    notice by “DWAC/FAST” electronic transfer in accordance with
    Section 2.6.  

DOCUMENT B-04192011a

SHARE DELIVERY ATTACHMENT 

EXAMPLE 

2.6. Delivery of Conversion Shares. Shares from any such
conversion will be delivered to Holder by 2:30pm EST within 2 (two) business
days of conversion notice delivery (see 3.1) by “DWAC/FAST” electronic transfer
(see “Share Delivery” attachment). If those shares are not delivered in
accordance with this timeframe stated in this Section 2.6, at any time for any
reason prior to offering those shares for sale in a private transaction or in
the public market through its broker, Holder may rescind that particular
conversion to have the conversion amount returned to the note balance with the
conversion shares returned to the Borrower. The Company will make its best
efforts to deliver shares to Holder same day / next day. 

Example: 

Holder delivers conversion notice to Borrower at 5:15pm eastern
time on Monday January 1st. 

Borrower’s transfer agent must deliver shares to Holder’s
broker via “DWAC/FAST” electronic transfer by no later than 10:30am eastern time
on Wednesday January 3rd. 

DOCUMENT B-04192011a

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