Document:

Silver Dragon Resources Inc.: Exhibit 10.6 - Filed by newsfilecorp.com

SECURED & COLLATERALIZED PROMISSORY NOTE

$500,000 PLUS INTEREST DUE & PAYABLE 
DOCUMENT
C-04192011b 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. 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,
JMJ Financial (the "Borrower,” or “Writer”), hereby promises to pay to the
Lender (“Lender” or “ Holder”), as defined below, the Principal Sum, as defined
below, along with the Interest Rate, as defined below, according to the terms
herein. 

	
    The "Holder" shall
      be: 
	
    Silver
      Dragon Resources Inc. 

	
      
	
      

	
    The "Principal Sum" shall be: 
	
    $500,000 (five hundred 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 this $500,000 Secured & Collateralized Promissory Note as
      memorialized and evidenced by the attached Exhibit A Collateral and
      Security Agreement. 

	
      
	
      

	
    The "Interest Rate" shall be: 
	
    5.25% 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 prepaid prior to maturity
      date. 

	
      
	
      

	
    The “Recourse” terms shall be: 
	
    This is a full recourse Note such that, for
      example, if the Writer defaults on the payment of this Note, forcing the
      Holder to foreclose on the security/collateral and there is a deficiency
      between (1) the outstanding principal and interest amount and (2) the
      foreclosure liquidation amount; then the Holder has the right to pursue
      additional claims against the Writer for that deficiency. 

	
      
	
      

	
    The “Collateral” or “Security” shall be: 
	
    $500,000 worth of money market fund (or similar
      equivalent), or $500,000 worth of any other assets, as memorialized and
      evidenced by the attached Exhibit A Collateral and Security Agreement.
  

	
      
	
      

	
    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: 
	
    Three years from the Effective Date, as defined
      below on the signature page. 

	
      
	
      

	
    The “Prepayment Terms” shall be: 
	
    Prepayment is permitted at any time by payment
      in the form of any of the following: (1) cash, or (2) other negotiated
      form of payment mutually agreed to in writing, or (3) by surrender of the
      Convertible Promissory Note Document B-04192011b, or (4) by surrender of
      the Collateral or Security with which this Promissory Note is secured.
  

DOCUMENT C-04192011b

ARTICLE 1 PAYMENT-RELATED PROVISIONS 

1.1 Loan Payment Schedule. While no principal or interest
payments are required until the Maturity Date, unless otherwise adjusted by
Writer with written notice to Holder, or unless otherwise prepaid as set forth
above whereby prepayment is permitted at any time by payment of cash, or other
mutually agreed and negotiated payment, or by surrender of the Convertible
Promissory Note Document B-04192011b, or by surrender of the Collateral or
Security related hereto; provided that all conversions are honored as set forth
under Convertible Promissory Note Document B-04192011b and provided that Rule
144 is available to remove the restrictive legend from those shares obtained in
those conversions and such that the shares effectively become immediately freely
tradable, Writer will plan to make payments in total bimonthly amounts of
$200,000 beginning 210 days from the execution of this agreement. Writer
reserves the right to (1) make payments prior to 210 days from the execution of
this agreement, and (2) to make payments in bimonthly amounts in excess of
$200,000, and (3) to adjust this payment schedule and payment amounts with
written notice to Holder. Please note: The $200,000 figure is
based on recent liquidity, and is subject to change based on change in
liquidity. For purposes of this Agreement, “bimonthly” shall be defined as
approximately every 60 (sixty) days. 

1.2 Interest Rate. Interest payable on this Note will accrue
interest at the Interest Rate and shall be applied to the Principal Sum. 

1.3 Application of Payment. Unless otherwise specified in
writing by Writer, all payments made on this Note will be first applied to the
Principal Sum. 

ARTICLE 2 MISCELLANEOUS 

2.1. Notices. Any notice required or permitted hereunder must
be in writing and be 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. 

2.2. 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. 

2.3. Assignability. This Note will be binding upon the Writer
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 only with written consent by Writer. 

2.4. Governing Law. This Agreement 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. 

DOCUMENT C-04192011b

2.5. 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
Writer. 

2.6. 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. 

2.7. 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 Writer and Holder. 

2.8. Transfer, Pledge, Sale, Collateral, Offer. Holder may not
transfer, pledge, sell, use as collateral, offer, or hypothecate this Note to
any third party without written approval from Writer. 

2.9. Effective Date. This Note will become effective only upon
occurrence of the two following events: Execution by both parties, delivery of
Document B-04192011b by the Writer. 

HOLDER:

/s/ Marc Hazout                                      

Marc Hazout 
President
& CEO 
Silver Dragon Resources Inc. 

WRITER:

__________________________________
JMJ Financial / Its
Principal 
EFFECTIVE DATE AS EXECUTED BY WRITER: 
__________________________________
NOTARY FOR SIGNATURE BY WRITER: 

DOCUMENT C-04192011b

EXHIBIT A 
COLLATERAL & SECURITY AGREEMENT 

1. Security Interest. Writer hereby grants to Holder a
security interest in the following described property (“Security” or
“Collateral” or “Security Interest”): 

$500,000 worth of money market fund (or similar equivalent), or
$500,000 worth of any other assets 

This Collateral and security interest will secure the payment
and performance of the Writer’s Secured & Collateralized Promissory Note
Document C-04192011b in the amount of $500,000 (five hundred thousand US
Dollars). 

2. Warranties and Covenants of Writer. Writer makes the
following warranties and covenants to Holder: 

(A) Writer is the sole owner of the Collateral free from any
lien, security interest, or encumbrance, and Writer will defend the Collateral
against all claims and demands of all parties at any time claiming interest
therein. 

(B) This Collateral has not been pledged, assigned, or
hypothecated for any other purpose, and no financing statement is on file in any
local, state, or federal institution, bureau, government, or public office. 

(C) While the principal and interest balance of the Secured
& Collateralized Promissory Note Document C-04192011b remains outstanding,
Writer will not transfer, sell, offer to sell, assign, pledge, liquidate, spend,
or otherwise transfer to any party an amount of the Collateral equal to or
greater than the outstanding balance of the Secured & Collateralized
Promissory Note Document C-04192011b. 

(D) Writer will pay promptly when due all taxes, expenses, and
assessments upon the Collateral. 

3. Perfection. Holder has the right, upon its election,
to perfect the Collateral and security and this Collateral and Security
Agreement by filing a financing statement or like instrument with its proper
local, state, or federal institution, bureau, government, or public office.
Holder is encouraged to perfect this instrument, and Writer will reasonably
assist in Holder’s doing so. 

4. Remedies Upon Default. In the event of Writer’s
default on the Secured & Collateralized Promissory Note Document
C-04192011b, Holder may declare all obligations secured hereby immediately due
and payable and shall have the remedies of a secured party, including without
limitation the right to take immediate and exclusive possession of the
Collateral or any part thereof, or to obtain a court order to do so; and the
Writer must surrender the security and Collateral to the Holder within 5 (five)
business days of receiving written notice that Holder is taking possession of
the Collateral as remedy of default. 

5. Normal Course of Business. Provided that no default
has occurred on the Secured & Collateralized Promissory Note Document
C-04192011b, Writer will use and possess the Collateral in the normal course of
business. Further, Writer may liquidate, transfer, or exchange the Collateral into another viable investment vehicle with
equal or greater value, including but not limited to bonds, money market funds,
mutual funds, other stocks, or private placement convertible promissory notes or
other investment vehicles. However, any liquidation, transfer, or exchange into
another viable investment vehicle will not affect Holder’s security, rights, or
claims to the underlying Collateral. At any time upon Holder’s request, Writer
will promptly provide update on the investment vehicle placement of this
Collateral. 

DOCUMENT C-04192011b

6. Termination of Security. At the time of prepayment or
payoff of the Secured & Collateralized Promissory Note Document C-04192011b
to Holder by Writer, Holder’s security interest in this Collateral shall
automatically terminate. In the event that the Collateral and security interest
were perfected by Holder as set forth in Section 3, upon termination of security
as set forth in this section 6, the Holder will withdraw any and all perfection
instruments on the collateral and security within 5 (five) business days. 

7. Governing Law. This Agreement 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. 

8. No Public Announcement. No public announcement may be
made regarding this Collateral & Security Agreement without written
permission by both Writer and Holder. In the event that any securities law requires this document to be filed
publicly, all information regarding description of the
Collateral that is considered personal financial information shall be struck out with <<<CONFIDENTIAL>>> and
listed as follows: 

$500,000 worth of <<<CONFIDENTIAL>>> money
market fund (or similar equivalent), or $500,000 worth of any other assets 

9. Effective Date. This agreement will become effective
as set forth in Section 2.9 of Secured & Collateralized Promissory Note
Document C-04192011b. 

HOLDER:

/s/ Marc Hazout                             

Marc Hazout 
President
& CEO 
Silver Dragon Resources Inc. 

WRITER:

__________________________________
JMJ Financial / Its
Principal 
EFFECTIVE DATE AS EXECUTED BY WRITER: 
_______________________________________
NOTARY FOR SIGNATURE BY WRITER:

DOCUMENT C-04192011bSilver Dragon Resources Inc.: Exhibit 10.7 - Filed by newsfilecorp.com

Exhibit 10.7

SECURED & COLLATERALIZED PROMISSORY NOTE

$500,000 PLUS INTEREST DUE & PAYABLE 
DOCUMENT
C-04192011c 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. 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,
JMJ Financial (the "Borrower,” or “Writer”), hereby promises to pay to the
Lender (“Lender” or “ Holder”), as defined below, the Principal Sum, as defined
below, along with the Interest Rate, as defined below, according to the terms
herein. 

	
    The "Holder" shall
      be: 
	
    Silver
      Dragon Resources Inc. 

	
      
	
      

	
    The "Principal Sum" shall be: 
	
    $500,000 (five hundred 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 this $500,000 Secured & Collateralized Promissory Note as
      memorialized and evidenced by the attached Exhibit A Collateral and
      Security Agreement. 

	
      
	
      

	
    The "Interest Rate" shall be: 
	
    5.25% 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 prepaid prior to maturity
      date. 

	
      
	
      

	
    The “Recourse” terms shall be: 
	
    This is a full recourse Note such that, for
      example, if the Writer defaults on the payment of this Note, forcing the
      Holder to foreclose on the security/collateral and there is a deficiency
      between (1) the outstanding principal and interest amount and (2) the
      foreclosure liquidation amount; then the Holder has the right to pursue
      additional claims against the Writer for that deficiency. 

	
      
	
      

	
    The “Collateral” or “Security” shall be: 
	
    $500,000 worth of money market fund (or similar
      equivalent), or $500,000 worth of any other assets, as memorialized and
      evidenced by the attached Exhibit A Collateral and Security Agreement.
  

	
      
	
      

	
    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: 
	
    Three years from the Effective Date, as defined
      below on the signature page. 

	
      
	
      

	
    The “Prepayment Terms” shall be: 
	
    Prepayment is permitted at any time by payment
      in the form of any of the following: (1) cash, or (2) other negotiated
      form of payment mutually agreed to in writing, or (3) by surrender of the
      Convertible Promissory Note Document B-04192011c, or (4) by surrender of
      the Collateral or Security with which this Promissory Note is secured.
  

DOCUMENT C-04192011c

ARTICLE 1 PAYMENT-RELATED PROVISIONS 

1.1 Loan Payment Schedule. While no principal or interest
payments are required until the Maturity Date, unless otherwise adjusted by
Writer with written notice to Holder, or unless otherwise prepaid as set forth
above whereby prepayment is permitted at any time by payment of cash, or other
mutually agreed and negotiated payment, or by surrender of the Convertible
Promissory Note Document B-04192011c, or by surrender of the Collateral or
Security related hereto; provided that all conversions are honored as set forth
under Convertible Promissory Note Document B-04192011c and provided that Rule
144 is available to remove the restrictive legend from those shares obtained in
those conversions and such that the shares effectively become immediately freely
tradable, Writer will plan to make payments in total bimonthly amounts of
$200,000 beginning 210 days from the execution of this agreement. Writer
reserves the right to (1) make payments prior to 210 days from the execution of
this agreement, and (2) to make payments in bimonthly amounts in excess of
$200,000, and (3) to adjust this payment schedule and payment amounts with
written notice to Holder. Please note: The $200,000 figure is
based on recent liquidity, and is subject to change based on change in
liquidity. For purposes of this Agreement, “bimonthly” shall be defined as
approximately every 60 (sixty) days. 

1.2 Interest Rate. Interest payable on this Note will accrue
interest at the Interest Rate and shall be applied to the Principal Sum. 

1.3 Application of Payment. Unless otherwise specified in
writing by Writer, all payments made on this Note will be first applied to the
Principal Sum. 

ARTICLE 2 MISCELLANEOUS 

2.1. Notices. Any notice required or permitted hereunder must
be in writing and be 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. 

2.2. 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. 

2.3. Assignability. This Note will be binding upon the Writer
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 only with written consent by Writer. 

2.4. Governing Law. This Agreement 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. 

DOCUMENT C-04192011c

2.5. 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
Writer. 

2.6. 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. 

2.7. 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 Writer and Holder. 

2.8. Transfer, Pledge, Sale, Collateral, Offer. Holder may not
transfer, pledge, sell, use as collateral, offer, or hypothecate this Note to
any third party without written approval from Writer. 

2.9. Effective Date. This Note will become effective only upon
occurrence of the two following events: Execution by both parties, delivery of
Document B-04192011c by the Writer. 

HOLDER: 

/s/ Marc Hazout                                      

Marc Hazout  

President & CEO 

Silver Dragon Resources Inc. 

WRITER: 

_________________________

JMJ Financial / Its Principal 

EFFECTIVE DATE AS EXECUTED BY WRITER: _________________________

NOTARY FOR SIGNATURE BY WRITER: 

DOCUMENT C-04192011c

EXHIBIT A 
COLLATERAL & SECURITY AGREEMENT

1. Security Interest. Writer hereby grants to Holder a
security interest in the following described property (“Security” or
“Collateral” or “Security Interest”): 

$500,000 worth of money market fund (or similar equivalent), or
$500,000 worth of any other assets 

This Collateral and security interest will secure the payment
and performance of the Writer’s Secured & Collateralized Promissory Note
Document C-04192011c in the amount of $500,000 (five hundred thousand US
Dollars). 

2. Warranties and Covenants of Writer. Writer makes the
following warranties and covenants to Holder: 

(A) Writer is the sole owner of the Collateral free from any
lien, security interest, or encumbrance, and Writer will defend the Collateral
against all claims and demands of all parties at any time claiming interest
therein. 

(B) This Collateral has not been pledged, assigned, or
hypothecated for any other purpose, and no financing statement is on file in any
local, state, or federal institution, bureau, government, or public office. 

(C) While the principal and interest balance of the Secured
& Collateralized Promissory Note Document C-04192011c remains outstanding,
Writer will not transfer, sell, offer to sell, assign, pledge, liquidate, spend,
or otherwise transfer to any party an amount of the Collateral equal to or
greater than the outstanding balance of the Secured & Collateralized
Promissory Note Document C-04192011c. 

(D) Writer will pay promptly when due all taxes, expenses, and
assessments upon the Collateral. 

3. Perfection. Holder has the right, upon its election,
to perfect the Collateral and security and this Collateral and Security
Agreement by filing a financing statement or like instrument with its proper
local, state, or federal institution, bureau, government, or public office.
Holder is encouraged to perfect this instrument, and Writer will reasonably
assist in Holder’s doing so. 

4. Remedies Upon Default. In the event of Writer’s
default on the Secured & Collateralized Promissory Note Document
C-04192011c, Holder may declare all obligations secured hereby immediately due
and payable and shall have the remedies of a secured party, including without
limitation the right to take immediate and exclusive possession of the
Collateral or any part thereof, or to obtain a court order to do so; and the
Writer must surrender the security and Collateral to the Holder within 5 (five)
business days of receiving written notice that Holder is taking possession of
the Collateral as remedy of default. 

5. Normal Course of Business. Provided that no default
has occurred on the Secured & Collateralized Promissory Note Document
C-04192011c, Writer will use and possess the Collateral in the normal course of
business. Further, Writer may liquidate, transfer, or exchange the Collateral into another viable investment vehicle with
equal or greater value, including but not limited to bonds, money market funds,
mutual funds, other stocks, or private placement convertible promissory notes or
other investment vehicles. However, any liquidation, transfer, or exchange into
another viable investment vehicle will not affect Holder’s security, rights, or
claims to the underlying Collateral. At any time upon Holder’s request, Writer
will promptly provide update on the investment vehicle placement of this
Collateral. 

DOCUMENT C-04192011c

6. Termination of Security. At the time of prepayment or
payoff of the Secured & Collateralized Promissory Note Document C-04192011c
to Holder by Writer, Holder’s security interest in this Collateral shall
automatically terminate. In the event that the Collateral and security interest
were perfected by Holder as set forth in Section 3, upon termination of security
as set forth in this section 6, the Holder will withdraw any and all perfection
instruments on the collateral and security within 5 (five) business days. 

7. Governing Law. This Agreement 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. 

8. No Public Announcement. No public announcement may be
made regarding this Collateral & Security Agreement without written
permission by both Writer and Holder. In the event that any securities law requires this document to be filed
publicly, all information regarding description of the
Collateral that is considered personal financial information shall be struck out with <<<CONFIDENTIAL>>> and
listed as follows: 

$500,000 worth of <<<CONFIDENTIAL>>> money
market fund (or similar equivalent), or $500,000 worth of any other assets 

9. Effective Date. This agreement will become effective
as set forth in Section 2.9 of Secured & Collateralized Promissory Note
Document C-04192011c. 

HOLDER: 

 

/s/ Marc Hazout                                      

Marc Hazout 
President &
CEO 
Silver Dragon Resources Inc. 

WRITER:

_________________________
JMJ Financial / Its Principal 

EFFECTIVE DATE AS EXECUTED BY WRITER: _________________________

NOTARY FOR SIGNATURE BY WRITER:

DOCUMENT C-04192011c

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