Exhibit 10.3
 
 
CONSOLIDATED RESOURCES USA, LLC -- GLOBAL GOLD CORPORATION
AGREEMENT FOR FORMATION OF JOINT VENTURE TO DEVELOP PROPERTIES
 
This Agreement made as of March 17, 2011 sets out the terms of cooperation and
creation of a joint venture to develop two mining properties in Armenia between
(i) Global Gold Corporation, a Delaware corporation (“GGC”) and the parent of
Global Gold Armenia, LLC  a Delaware limited liability company (“GGA”) which is
the parent of Global Gold Mining, LLC, a Delaware limited liability company
(“GGM””) which limited liability companies, directly or indirectly, own all of
GGC’s interests, including mining rights, licenses and permits, in respect of
the Toukhmanuk (through Mego-Gold, LLC an Armenian limited liability
company(“MGC”)) and Getik (through the Getik Mining Company, LLC an Armenian
limited liability company (“GMC”)) properties in Armenia (See Annual Report on
Form 10-K filed with the SEC on April 15, 2010 and subsequent filings and
information available on the Company’s website for description of properties
(hereinafter, “Toukhmanuk” and “Getik” and collectively, the “Properties”)) and
(ii) Consolidated Resources USA, LLC, a Delaware company (“CR”).  Upon payment
of the initial consideration (“Initial Consideration”) as provided below, GGC
and CR will work together for twelve months (the “12 Month Period”) to develop
the two mining properties in Armenia and cause the Properties to be contributed
to the JVC in return for the remaining consideration (“Remaining Consideration”)
as defined below.
 
Descrcriptive Information:
     
Joint Venture Parties:
 
Global Gold Corporation including applicable subsidiaries (“GGC”), Consolidated
Resources USA, LLC (“CR”) and the joint venture company, “NewCo” whose identity
and terms will be mutually agreed (“JVC”)
     
Properties to be Contributed:
 
All of the GGC’s interest in the Properties as evidenced by one hundred percent
of the membership interests in MGC and GMC.
     
Initial Consideration:
 
$5.0 million working capital commitment, payable by a $500,000 Advance
immediately following the execution of this Agreement on the terms described
below (the “Advance”); $1,400,000 payable following the satisfactory completion
of due diligence by CR and the execution of definitive documents in 30 days from
the date of this Agreement; and $3,100,000 payable within 5 business days of the
end of every calendar month as needed. CR will exercise control over the release
and use of all working capital provided and will agree on a separate schedule in
advance. If CR elects not to close this transaction described in this agreement
based on its findings during the 30-day due diligence period, GGC shall have
nine months to repay the Advance with 6% interest.
     
Remaining Consideration:
 
a.    In a proportion to be mutually agreed and payable in 12 months from the
date of the signing of a definitive agreement (the “12 Month Period”), $40.0
million in cash and/or newly issued stock of the JVC which will (i) own, develop
and operate Toukhmanuk and Getik, (ii) be a company listed on an exchange fully
admitted to trading and (iii) have no liabilities, obligations, contingent or
not, or commitments except pursuant to the Shareholders Agreement.  GGC’s
ownership in the JVC shall be the greater value of either 51% or the pro forma
value of $40.0 million in newly issued stock of the JVC at the end of the 12
Month Period.  As part of the $40 million in Remaining Consideration, CR may, at
its election, substitute cash for stock in an amount of up to $12.5 million to
increase its ownership at the end of the 12 Month Period based on a ratio of
$784,314 per each 1% of stock. Any unused working capital from the Initial
Consideration is to be added to the Remaining Consideration for payment to GGC.
 
b.    Net Smelter Royalty, if any, to be defined in the definitive agreement.

 
 
 

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Governance and Operations During the 12 Month Period:
 
GGC’s Board of Directors shall be increased to seven with a majority of
independent directors.  The principal shareholders on the board of directors
shall enter into a shareholders’ agreement with CR. The parties shall also share
executives, personnel, and facilities during the 12 Month Period to jointly
develop the properties. The parties shall also form a technical committee to
review and oversee technical aspects of the development of the Properties.
     
Use of Initial Consideration:
 
The Initial Consideration will be used for restricted purposes as mutually
agreed on confidential schedules to be separately concluded by the parties, and
will include priorities such as production expansion and improvements,
exploration, operations, construction, bank debt service payments, and
satisfaction of payables and other due amounts. CR shall have the right to have
its representative oversee and monitor compliance with the mutually agreed use
of funds.
     
JVC:
 
GGC shall have the right to designate at least  two directors, Messrs. Ian Hague
and Van Krikorian, and the parties shall have the right to designate directors
which together shall constitute not less than their respective percentage
ownership interests of the JVC  of the Board of Directors or like body and the
parties agree to use their best efforts to cause the election of agreed
officers.
 
The management team of the JVC shall be put in place before the end of the 12
Month Period subject to approval by the Board of JVC.  The parties intend to
integrate all of GGC’s Toukhmanuk and Getik mining and exploration operations
into the JVC.
 
As approved by the GGC Board, cash generated by Toukhmanuk during the 12 Month
Period to be prioritized for use as follows during the 12 Month Period:
 
1.    First to repay the remaining off-take financing;
 
2.    Second to meet required debt service (P&I) payments for the ABB loan;
     
Closing Date:
 
12 months from the date of signing a definitive agreement.

 
 
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Governance Provisions:
     
Voting Rights:
 
Voting rights in the JVC shall be the subject of a shareholders’ agreement and
shall be in proportion to the parties’ pro forma ownership of the JVC.
     
Board Representation:
 
The appointed GGC Directors shall be included in the Audit, Executive,
Compensation and any other significant board committee.
     
Employment Agreements:
 
Management will have normal executive employment agreements providing for a
percentage of their business time devoted to JVC at compensation levels to be
mutually agreed.
 
Common Stock Provisions:
     
Transferability:
 
The JVC stock delivered to GGC shall be freely transferable and fully admitted
to trading.
     
Shareholders Agreement:
 
The foregoing terms and others as may mutually be agreed upon shall be set forth
in a Shareholder Agreement.
     
Other:
         
Closing Conditions:
 
Closing shall be subject to completion of payment of the Remaining Consideration
following the 12 Month Period.
     
License Compliance and Code of Conduct:
 
Upon transfer of the Properties to the JVC, JVC shall perform all applicable
license requirements for the Properties, and maintain all licenses. In addition,
the JVC shall establish a Code of Conduct and maintain itself in compliance with
relevant United States laws that would govern United States shareholders and
directors.
     
Representations and Warranties:
 
Customary representations, including, without limitation, those relating to
organization and qualification, financial statements, authorization, execution
and delivery, validity and enforceability of agreements, issuance of the shares,
actions pending, compliance with laws and environmental regulations,
governmental consent, taxes, insurance adequacy, no conflict with agreements and
charter provisions, capitalization, and no material adverse change.  Customary
remedies for a breach of any representation or warranty shall be agreed.
     
Confidentiality:
 
Neither this Agreement nor its substance, in whole or in part, shall be
disclosed publicly or privately prior to the execution of this Agreement.
     
Governing Law:
 
New York, substantive law without regard to conflict of laws principles
     
Consent to Jurisdiction:
 
New York

 
 
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Consent to Arbitration:
 
Any controversy or claim arising out of or relating to this Agreement or any of
the definitive or related  documents, whether grounded in tort, contract or
otherwise, shall be settled exclusively by arbitration administered by the
American Arbitration Association in New York City in accordance with its
Commercial Arbitration Rules including the Optional Rules for Emergency Measures
of Protection, and judgment on the award rendered by a single arbitrator may be
entered in any court having jurisdiction thereof.

The parties hereby acknowledge their agreement to the foregoing as of the date
set for the above.
 
        Consolidated Resources USA, LLC
Global Gold Corporation
 
By:  /s/ Jeffrey R. Marvin
 
By:  /s/ Van Krikorian
Name:  Jeffrey R. Marvin
Name:  Van Krikorian
Title: Manager
Title: Chairman and CEO

 
 
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