DATED February 3, 1997
DEBENTURE
made between
GLOBAL GOLD ARMENIA LIMITED
(the "Company")
and
FIRST DYNASTY MINES LTD.
(the "Lender")
X.X. Xxxxxx & Company
Xxxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxxxx Xxxx
Grand Cayman
THIS DEBENTURE is made the 3rd day of February 1997
BETWEEN:
(1) GLOBAL GOLD ARMENIA LIMITED, a company incorporated and existing under the
laws of the Cayman Islands (the "Company") which expression shall include
the permitted successors in title transferees and assigns of the Company
OF THE ONE PART
AND:
(2) FIRST DYNASTY MINES LTD., a corporation having its registered xxxxxx xx
Xxxxxxx Xxxxxx, #00-00 Xxxxxxxx Xxxxx, Xxxxxxxxx 039 192 (the "Lender")
which expression shall include the successors in title transferees and
assigns of the Lender
OF THE OTHER PART
W H E R E A S:
The Lender has agreed to grant a loan to the Company of the amount of
US$5,480,000 upon the terms and conditions hereinafter appearing.
NOW THIS DEBENTURE WITNESSETH as follows:
1. (a) Words importing the masculine gender shall include the feminine and
neuter genders and vice versa and words importing the singular
number only shall include the plural number and vice versa and words
importing persons and all reference to persons shall include
corporations and firms; and
(b) "the Principal Sum" shall mean the sum of US$5,480,000 or, if less,
the unpaid balance of the amount paid by Lender pursuant to that
certain letter agreement, dated 27th January, 1997, among the
Company, Lender and Global Gold Corporation. Each advance and
payment under this Debenture shall be noted on the Advance Grid
attached hereto as Exhibit A and shall be binding upon the parties,
absent fraud or mistake.
2. In consideration of the Lender having agreed to grant the loan of the
Principal Sum as aforesaid, the Company hereby covenants to repay on March
31, 1998, June 30, 1998, September 30, 1998
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and December 31 thereafter in 12 equal installments (each a "Payment") to
the Lender the Principal Sum outstanding on 31st March, 1998 and interest
thereon (or on the outstanding balance thereof) at the rate of 10 per
centum simple interest per annum calculated on a 360 day year ("the
applicable interest rate") (as well after as before any judgement).
3. (a) At any time (i) upon and following an event described in Clause 4
below or (ii) following the Maturity Date but prior to repayment in
full of the Principal Sum the Lender shall be entitled by notice in
writing addressed to the Company to require the Company to allot and
issue to him in exchange for and in satisfaction of the Principal
Sum (or such part thereof as the notice may specify) fully paid
ordinary shares of the Company at the rate ("the Conversion Rate")
of one ordinary share of a nominal value of US$0.01 in exchange for
every US$164.40 of the Principal Sum (or such part thereof as is
being converted) and the Company shall forthwith issue to the Lender
so many shares as are properly specified in the said notice, and
shall pay to the Lender a proportionate part of the current interest
due upon the Principal Sum calculated up to the date of such issue.
The forgoint Conversion Rate assumes 100,000 ordinary shares of the
Company issued and outstanding. The sole outstanding ordinary share
of the Company is currently held by the Company's parent, Global
Gold Corporation, a Delaware corporation ("Global"). The Company
will promptly issue 99,999 ordinary shares to Global in order to
coincide with the aforesaid Conversion Rate and such issue shall not
give rise to any adjustment in the Conversion Rate.
(b) The shares issued on conversion shall carry the right to participate
in full in all dividends and (unless adjustment has been made
pursuant to sub-paragraph (c) hereof) other distributions declared
after the date of conversion; in all other respects such share
capital will rank pari passu and form one class with the ordinary
shares of the Company in issue on the date of conversion.
(c) Upon any sub-division or consolidation of ordinary shares, the
Conversion Rate shall be adjusted correspondingly and notice of such
adjustment shall be given to the Lender by the Company.
(d) If any offer or invitation to subscribe for or purchase ordinary
shares is made to the shareholders of the Company, the Company shall
at the same time make, or so far as it is able, procure to be made,
the same offer or invitation to the Lender as if immediately before
the record date of such offer or invitation the Principal Sum had
been converted into ordinary shares at the Conversion Rate then
applicable.
(e) The Company hereby covenants with the Lender that at all times until
the Principal Sum is repaid in full it will maintain sufficient
ordinary shares in its authorised but unissued share capital to
allow it to immediately give effect to the conversion rights hereby
conferred.
4. Notwithstanding any other provisions of this Debenture any sums owing
hereunder shall become payable immediately and all unpaid interest and any
other monies owing hereunder shall become immediately owing and payable as
follows:-
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(a) If the Company shall default in the payment of any monies due and
owing hereunder; or
(b) If any representation or warranty made in or in connection with this
Debenture or the execution and delivery thereof or in any document
or certificate furnished pursuant hereto shall prove at any time to
have been incorrect in any material respect; or
(c) If the Company shall default in the performance or observance of any
agreement covenant stipulation or obligation contained or implied in
this Debenture whether negative or otherwise (other than obligations
in respect of the payment of any monies hereunder); or
(d) If by or under the authority of any Government the management of the
Company or its authority to conduct its business is curtailed to the
point of making it effectively inoperative by any seizure or
intervention or proceedings of any nature; or
(e) If a distress or execution shall be levied or enforced upon or
against any of the Chattels or property of the Company and shall not
be satisfied within seven (7) days of the levy or enforcement of
such distress or execution; or
(f) If the Company makes or attempts to make any alteration to the
provisions of its Memorandum or Articles of Association which might
in the opinion of the Lender affect its interests hereunder or shall
fail or neglect to comply with any or all of the provisions of the
Companies Law Cap. 22 or any statutory modification or re-enactment
thereof or any other of the laws of the Cayman Islands in so far as
the same way relate to it; or
(g) If an order is made or an effective resolution is passed for the
winding up of the Company except for the purpose of a
reconstruction or amalgamation the terms of which have been
previously approved in writing by the Lender; or
(h) If an encumbrancer takes possession or a receiver is appointed of
any part of the assets of the Company; or
(i) If the Company ceases or threatens to cease to carry on its business
or substantially the whole of its business; or
(j) If the Company shall have sold or agreed to sell the whole of its
undertaking or any substantial part thereof otherwise than with the
previous written convent of the Lender; or
(k) If the Company is unable to pay its debts within the meaning of
Section 92 of the Companies Law Cap. 22 or any statutory
modification or re-enactment thereof; or
5. The Company hereby represents and warrants to the Lender that it is a
corporation duly organised, validly existing and in good standing under
the Laws of the Cayman Islands and that it is duly qualified to do
business wherever necessary to carry on its present operations and that
the making and performance of this Debenture is within its powers having
been duly authorised
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by all necessary governmental and corporate approvals and does not
contravene any law or any contractual restriction binding on the Company
and that this Debenture is a legal valid and binding obligation of the
Company enforceable against the Company in accordance with its terms and
that there are no pending or threatened actions or proceedings before any
court or administrative agency which may materially adversely affect the
Company or its financial conditions and operations.
6. the Company hereby further covenants with the Lender at all times during
the continuance of this Debenture as follows:
(a) At all times during the continuance of this Debenture to keep up and
maintain and preserve all the property of the Company in good and
merchantable order and condition;
(b) To pay to the Lender on demand all costs charges and expenses
incurred or to be incurred by the Lender in relation to these
presents or any default hereunder or the protection or enforcement
of any of the rights of the Lender hereunder together with the stamp
duty and recording fees hereon;
(c) To carry on its business in a proper and efficient manner; and
(d) To observe and perform all the covenants agreements and provisions
contained in or implied hereby.
7. It shall be lawful for but not obligatory on the Lender to advance and pay
all sums of money necessary for the purpose of remedying any breach or
breaches of covenants or obligations whether imposed on the Company under
the provisions of this Debenture or implied by law and all monies so paid
and shall bear interest at the applicable interest rate computed from the
time or respective times of paying or advancing the same.
8. No neglect omission or forbearance on the part of the Lender to take
advantage of or enforce any right or remedy arising out of any breach or
non-observance of any covenant or condition herein contained or implied
shall be deemed to be or operate as a general waiver of such covenant or
condition or the right to enforce or take advantage of the same in respect
of any breach or non-observance thereof either original or recurring.
9. Any notice required to be given to or served on the Company or the Lender
under these presents shall be in writing and shall be deemed to be
sufficiently given by personal service at the respective places of
business of the Company or the Lender or if posted shall be deemed to be
sufficiently given to and served respectively seventy-two hours after the
time of posting it posted by registered post and addressed to the Lender
or the Company at the address stated above.
10. This Debenture shall be governed and construed solely according to the
Laws of the Cayman Islands.
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IN WITNESS WHEREOF each of the Company and the Lender has executed this
Debenture as a Deed by its duly authorised persons the day and year first above
written.
Signed for and on behalf of )
GLOBAL GOLD ARMENIA )
LIMITED by: )
/s/ Xxxxxx X. Xxxxxxxx, ) Per: /s/ Xxxxxx X. Xxxxxxxx
Director ) --------------------------
) Director
in the presence of: )
/s/ Xxxx X. Xxxxxxxxxx, III. )
-----------------------------
witness and thereby executed
by GLOBAL GOLD ARMENIA
LIMITED as its Deed
Signed for and on behalf of )
FIRST DYNASTY MINES )
LTD. by: )
) Per:___________________________
,Director ) Director
)
in the presence of: )
)
_____________________________
witness, and thereby executed
by FIRST DYNASTY MINES
LTD. as its Deed
GUARANTEE
Payment by, and performance of the obligations of Global Gold Armenia Limited a
wholly owned subsidiary of Global Gold Corporation under the forgoing Debenture
dated February 3, 1997 is hereby unconditionally and irrevocably guaranteed by
Global Gold Corporation.
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IN WITNESS WHEREOF Global Gold Corporation has executed this Guarantee as a Deed
on the 3rd day of February, 1997
Signed for and on behalf of )
GLOBAL GOLD )
CORPORATION by: )
/s/ Xxxxx X. Xxxxxxxxx, ) Per: /s/ Xxxxx X. Xxxxxxxxx
,Director ) --------------------------
) Director
in the presence of: )
/s/ Xxxx X. Xxxxxxxxxx, III. )
------------------------------
witness, and thereby executed
by GLOBAL GOLD CORPORATION
as its Deed
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