ex10-35.htm


Exhibit 10.35


Binding Term Sheet













	
Issuer:

	
Global Gold Consolidated Resources Limited (“GGCR”)


 


	
Subscriber:

	
Consolidated Resources Armenia and affiliates (“CRA”)


 


	
Transaction:

	
Convertible Notes (“the Notes”)


 


	
Principal Amount:

	
Not less than US$2 million during the Interim Period in accordance with the Use of Proceeds as defined herein, unless otherwise agreed to and approved by 75% of the Board of GGCR


 


	
Use of Proceeds:

	
In accordance with the GGCR Interim Funding Budget, which is to be unanimously approved by the Board of Directors of GGCR


 


	
Advance:

	
$377,134 to be funded directly to Armenia in accordance with the GGCR Interim Funding Budget prior to the planned closing of the Joint Venture (the “GGCR Advance Funding”) scheduled for the week of January 9th, 2012


 


	
Funding Term:

	
Interim Period, defined as the period beginning immediately after the closing of the Joint Venture and ending at the completion of the Public Listing process as defined in section 2.4 of the Joint Venture agreement


 


	
Funding Process:

	
Given the dynamic funding requirements of the Properties, as defined in the Joint Venture agreement, all funding needs under the Board approved GGCR Budget will be met by periodic request from any one or more members of the GGCR Board following which approval will be required from 75% of the GGCR Board.  In the event of a GGCR stalemate for more than 10 days, a decision may be made based on a majority vote and the parties acknowledge and agree that funds for the budget may be provided from BNP Paribas, Industrial Minerals, ABB, Firebird Management, individual directors, or other sources that have provided funding in the past.


 


	
Co-investment Right:

	
GGC may co-invest with CRA on an equivalent basis in the Notes


 


	
Maturity

	
1 year


 


	
Cash Coupon / Minimum Return:

	
3% per annum Cash Coupon / Guaranteed Minimum Annual IRR of 15% at a liquidity event (“Liquidity Event”)


 


	
Conversion:

	
At the Liquidity Event, the principal amount of the Notes will be repaid in full based on the value of the Notes at market (the “Market Value”) assuming a conversion value into new common shares of GGCR representing a value agreed to in section 2.5 of the Joint Venture agreement (for the avoidance of doubt, the value is 1% of the existing shares of JVC then held by GGC for each $784,314 of the Notes).  Except as provided for under the Cash Election in Section 2.5 of the Joint Venture agreement, the Notes may not be voluntarily converted by CRA into GGCR except by the unanimous consent of the Board of Directors of GGCR and otherwise will become due at the earlier of the Liquidity Event or Maturity, subject to Section 2.5 of the Joint Venture agreement


 





 




  





  











  






 


	
Liquidity Event:

	
Liquidity Event is defined as an IPO or a change of control of GGCR or any of its subsidiaries including Mego-Gold LLC or Getik Mining Company LLC


 


	
Put/Call Feature:

	
None


 


	
Prepayment:

	
The Notes may be repaid early at any time prior to the Liquidity Event without penalty.


 


	
Information Rights:

	
Quarterly reporting on financial and operational progress at GGCR


 


	
Events of Default:

	
Those typical for transactions of this type, including, without limitation, change of control and cross-default to other indebtedness and specified material contracts, subject to appropriate cure periods


 


	
Security:

	
The obligations of GGCR under the Notes would be secured by a guarantee of Global Gold Corporation until the closing of the joint venture


 


	
Representations and Warranties

	
Usual and customary for transactions of this type, including, without limitation: (i) corporate status, (ii) corporate power and authority/enforceability, (iii) no violation of law or contracts or organizational documents, (iv) no litigation, (v) accuracy of financial statements and no material adverse change, and (vi) perfected security interests in respect of the Security (as described herein).


 


	
Covenants

	
By GGCR: usual and customary for transactions of this type, including, without limitation: (i) delivery of financial statements and other reports, (ii) compliance certificate, (iii) notices of default, litigation and governmental proceedings, (iv) compliance with laws and maintenance of permits and licenses, (v) payment of taxes, (vi) maintenance of insurance, (vii) no additional liens or other encumbrances on the assets subject to the Security (as described herein), (viii) no distributions nor dividends, (ix) no issuance of securities or debt, and (x) no change in business


 


	
Conditions Subsequent:

	
·Closing of Joint Venture scheduled during the week of January 9th


·Preparation and execution of Convertible Note documentation







 




  





  











  






 


GGCR Interim Funding Budget


 




	
Item

	 	
Priority

	 	 	
Cost

	 
	  	 	 	 	 	 	 
	
Immediate Funding for Toukhmanuk (GGCR Advance Funding)

	 	 	1	 	 	$	377,134	 
	
2012 Armenia and Partial NY Overhead (5 months w/zero revenue)

	 	 	1	 	 	 	1,250,000	 
	
ABB 2012 Debt Service (5 months)

	 	 	1	 	 	 	450,000	 
	
Reserve

	 	 	1	 	 	 	500,000	 
	
Priority 1 Items to Sustain Armenia Operations

	 	 	1	 	 	$	2,577,134	 
	  	 	 	 	 	 	 	 	 
	
24,000m of Drill core re-logging, re-sampling, 3D block model update

	 	 	1	 	 	$	211,779	 
	
Assaying / Re-assaying (maximum)

	 	 	1	 	 	 	111,505	 
	
NI-43101 Update + Conceptual Mining Study (remaining CSA Global cost)

	 	 	1	 	 	 	39,064	 
	
Behre Dolbear Outstanding Balance

	 	 	1	 	 	 	70,735	 
	
Priority 1 Items to Resolve Resource Problems

	 	 	1	 	 	$	433,083	 
	  	 	 	 	 	 	 	 	 
	
Lead IPO Counsel (Stikeman Elliot)

	 	 	1	 	 	$	300,000	 
	
Jersey Counsel (Ogiers)

	 	 	1	 	 	 	50,000	 
	
IPO Auditors (Grant Thornton)

	 	 	1	 	 	 	199,000	 
	
TSX Regulatory Costs

	 	 	1	 	 	 	210,000	 
	
Provincial Securities Commission

	 	 	1	 	 	 	30,000	 
	
Transfer Agent

	 	 	1	 	 	 	25,000	 
	
Printing, PR, Roadshow

	 	 	1	 	 	 	200,000	 
	
Priority 1 Items to Complete TSX IPO

	 	 	1	 	 	$	1,014,000	 
	  	 	 	 	 	 	 	 	 
	
Total Priority 1 Funding Needs through to IPO Completion

	 	 	 	 	 	$	4,024,217	 
	  	 	 	 	 	 	 	 	 
	
Existing Plant Upgrade

	 	 	2	 	 	$	535,875	 
	
Slimes Dam Retreatment

	 	 	2	 	 	 	932,820	 
	
Priority 2 Items to Improve Cash Flow Profile

	 	 	2	 	 	$	1,468,695	 
	  	 	 	 	 	 	 	 	 
	
Total Priority 2 Funding Needs to Improve Cash Flow Profile

	 	 	 	 	 	$	1,468,695	 
	  	 	 	 	 	 	 	 	 
	
Total GGCR Iterim Funding Budget

	 	 	 	 	 	$	5,492,912	 







 




  





  











  






 


IN WITNESS WHEREOF, GGCR, GGC and CRA have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.


 


GLOBAL GOLD CONSOLIDATED RESOURCES LIMITED, for itself and GGCRM


 












By:___________________________


Name: Van Krikorian


Title: Chairman


 


 


 


GLOBAL GOLD CORPORATION, for itself and as Guarantor


 







 


By:___________________________


Name: Van Krikorian


Title: Chairman and CEO


 







 


CONSOLIDATED RESOURCES ARMENIA


 







 


By:___________________________


Name: Jeffrey R. Marvin