Binding Term Sheet

Global Gold Consolidated Resources Limited (“GGCR”)

 

Consolidated Resources Armenia and affiliates (“CRA”)

 

Convertible Notes (“the Notes”)

 

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

 

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

 

$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

 

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

 

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.

 

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

 

1 year

 

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

 

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 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

 

None

 

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

 

Quarterly reporting on financial and operational progress at GGCR

 

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

 

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

 

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).

 

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

 

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

·Preparation and execution of Convertible Note documentation