UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
  WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported) February 25, 2010
 
Global Gold Corporation
(Exact name of registrant as specified in its charter)

Delaware
02-69494
13-3025550
(State or other jurisdiction
(Commission
(IRS
      of incorporation)
File Number)
Identification No.)
 
45 East Putnam Avenue, Greenwich, CT
06830
(Address of principal executive offices)
(Zip Code)
 
Registrant's telephone number, including area code (203) 422-2300
 
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act(17 CFR 240.14a-12)
 
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
[  ]  Pre-commencement communications pursuant to Rule 133-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

 
Item 1.01 Entry into a Material Definitive Agreement.

On February 25, 2010, Global Gold Corporation (the "Company" or "Global Gold") through its wholly owned subsidiary Mego Gold, LLC (“Mego”) entered into an agreement with Industrial Minerals, SA (“IM”) to provide Mego with an advance of $450,000 from IM against future sales of gold and silver concentrate (the “Advance”).   The advance was provided by IM on February 26, 2010.

Key terms include; that Mego provides IM with an exclusive off-take agreement for its gold and silver concentrate in Armenia through December 31, 2012; for 2009 and until February 25, 2010, the price IM paid Mego for gold and silver concentrate was calculated based on 85% of the London AM/PM Gold Fixation and London Silver Spot (“London Rates”), until Mego delivers 2,250 metric tons of concentrate the 85% is reduced to 80%, after 2,250 metric tons have been delivered the price will revert to 85% of London Rates; Mego provides IM with a security interest in its current ore stockpile in Armenia; and the Company provides for a corporate guarantee for repayment of the Advance, all as further described in exhibits 10.3, 10.4 and 10.5 below.

 
Item 9.01 Exhibits
 
Exhibit No. Description
 
10.3
Material Contract – Mego Gold, LLC Gold Concentrate Supply Contract with Industrial Minerals SA dated as of February 25, 2010.
 
10.4
Material Contract – Mego Gold, LLC Security Agreement with Industrial Minerals SA dated as of February 25, 2010.
 
10.5
Material Contract – Global Gold Corporation Guarantee to Industrial Minerals SA dated as of February 25, 2010.
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Dated: March 1, 2010   Global Gold Corporation  
       
 
By:
/s/ Van Z. Krikorian  
  Name:  Van Z. Krikorian  
  Title:  Chairman and Chief Executive Officer  
       

 

 

Exhibit 10.3
 
GOLD CONCENTRATE SUPPLY CONTRACT
DATED February 25th 2010


This contract is made as of the 25 th day of February, 2010 (the "Effective Date") between MEGO GOLD, LLC, registered offices at Suite #2, 2A Tamanian Street,   Yerevan, Armenia, 0009 (the "Seller") and INDUSTRIAL MINERALS SA, c/o Lenz & Staehelin , Rte de Chêne 30 , 1208 Genève, Switzerland   (the "Buyer").

1. SCOPE OF THE AGREEMENT AND EXCLUSIVITY
The Buyer hereby agrees to buy and the Seller hereby agrees to sell Gold Concentrates on the following specific terms and conditions. During 2010, 2011 and 2012 the Seller shall deliver exclusively to the Buyer any and all Gold Concentrates from its or any affiliate’s mines including but not limited to Toukhmanuk Mine, Armenia. The Seller shall not deliver and not offer to nor solicit offers from third parties.

2. MATERIAL AND QUALITY
Gold Concentrates produced from gravitation process (‘Grade A’) and from flotation process (‘Grade B’) ex Toukhmanuk Mine Armenia, assaying typically as per the specification in Schedule 1 to this agreement (‘Concentrates’)

The material shall be otherwise free of constituents deleterious to the smelting and refining process and be free from Radioactivity. Moisture content of the material shall be sufficient to avoid blowing and dusting and shall conform to all local regulations, and the IMO / BC code of safe practice for solid bulk cargoes. In the event that the quality of the material deviates from the typical assay as per the above then Seller shall promptly advise Buyer of the revised provisional assays. In case of adverse changes to the quality of concentrates, Seller shall inform Buyer promptly of those changes and both parties will meet to discuss potential solutions.

3. QUANTITY
A minimum of 2’250 dmt of Grade A and Grade B.
In case the Seller has delivered a lesser quantity in 2010, 2011 and 2012 than 2’250 dmt, then the contract terminates at such time the full quantity has been delivered.
In case the Seller has delivered a higher quantity in 2010, 2011 and 2012 than 2’250 dmt, then the Payables as per 6.A. shall be amended to a higher percentage.

4. SHIPMENT
Evenly spread from January 2010 to December 2012 in big bags of 1-2 mt. The month of shipment shall be the month in which falls the railway bill of lading (‘Shipment’).

5. DELIVERY
Seller shall deliver concentrates to the Buyer on the basis DAF stowed Yerevan, Armenia. All customs clearance procedures in Armenia to be performed and paid by Seller.

6. PRICE
The price per dry metric ton of Gold Concentrates for all shipments shall be the sum of the following payable metals less the sum of the deductions as listed below.

6.A)       Payable Metals:
6.A.1       Silver: 80% of the final Silver content subject to a minimum deduction of 30 grams per dmt at the official London Silver Spot/US Cents equivalent quotation as published in Metal Bulletin, averaged over the Quotational Period.
For any delivered quantity above 2’250 dmt the payable shall be 85% of the final Silver content subject to a minimum deduction of 30 grams per dmt at the official London Silver Spot/US Cents equivalent quotation as published in Metal Bulletin, averaged over the Quotational Period.

Page 1 of 7
6.A.2       Gold: 80% of the final Gold content subject to a minimum deduction of 1 gram per dmt at the average of the London AM/PM Gold Fixation, as published in Metal Bulletin, averaged over the Quotational Period
For any delivered quantity above 2’250 dmt the payable shall be 85% of the final Gold content subject to a minimum deduction of 1 gram per dmt at the average of the London AM/PM Gold Fixation, as published in Metal Bulletin, averaged over the Quotational Period

6.A.3      No other metals shall be payable.

6.B)       Deductions:
6.B.1     Treatment Charge:
The Treatment Charge shall be US Dollars 220.00 (two hundred twenty) per dry metric ton DAF Yerevan.
6.B.2     Refining Charge:
Gold: The Refining Charge shall be USD 6 (six) per troy ounce of payable Gold.
Silver:   The Refining Charge shall be USD 0.40 (fourty US cents) per ounce of payable Silver

6.B.3.    Penalties
Arsenic : U.S. Dollars 5.0 (five) per dry metric ton of Gold Concentrates for each 0.1% (zero point one percent) by which the final arsenic content exceeds 0.3% (zero point three percent) fractions pro rata.
Lead : U.S. Dollars 1.0 (one) per dry metric ton of Gold Concentrates for each 0.1% (zero point one percent) by which the final arsenic content exceeds 3% (three percent) fractions pro rata.
Alumina Al 2 O 3 : Penalties to be agreed after the trial shipments.

7. QUOTATIONAL PERIOD
Silver and Gold: First (M+1) following the deemed ocean Bill of Lading (‘Deemed BL Month’) for all payable metals (‘QP’). Buyer shall declare the Deemed BL Month in the month following the railway bill of lading.

8. PAYMENT
8.A)     Prepayment
Buyer shall make a prepayment amounting to US$ 450’000 (‘Prepayment’). Any Provisional and Final Payment as per 8.B. and 8.C. shall count towards the amortization of such Prepayment until it is fully amortized (‘Amortization’). The Prepayment is to be fully amortized in 2010 (‘Period of Amortization’).

The prepayment shall be secured during the Period of Amortization as per the Security Agreement dated February 25 th 2010 in Schedule 1 to this agreement and the Parent Company Guarantee dated February 25 th 2010 in Schedule 2 to this agreement.

8.B)     Provisional Payment
Buyer shall make a provisional payment (‘Provisional Payment’) for 85% (eighty five percent) of the provisional invoice less the deductions and penalties and based on
 
-
the Railway Bill of Lading weight at Yerevan
 
-
the last shipment’s effective assay for the Annual Tonnage (ASA trial stock assay for the Trial Tonnage)
 
-
average price for gold and silver over the week preceding the week of the railway bill of lading date
The provisional payment shall be made within 5 business days against presentation of the following original documents to the Buyer’s Agent Vienna office (the full dispatch details shall be advised accordingly to Buyer’s Agent, including courier Airway bill number):
 
-
Railway Bill of Lading
 
-
Provisional Commercial Invoice certifying that material is free for Export.
 
-
Original Certificate of Origin issued and legalised by the local Chamber of Commerce or EUR .I certificates, if required.
 
-
Provisional Assay issued by Producer.

Page 2 of 7
8.C)     Final Payment
Final settlement (‘Final Payment’) shall be made promptly by the owing party when all final details relating to weight, assays and prices become known against the Final Commercial Invoice and Independent Assayer’s assay/weight report.

If due date falls on a Saturday or New York banking holiday other than Monday, payment shall be made on the preceding New York banking day. If payment due date falls on a Sunday or Monday bank holiday in New York, payment to be made on the next New York banking day.

If the final balance is in favour of the Buyer or the cargo is rejected due to the material not corresponding to the specification under clause 2, the Seller has to state these amounts in his final invoice and pay the Buyer within 5 banking days after the date of the final invoice by wire transfer to the bank account indicated by the Buyer. If the Seller fails to pay such amounts, the Buyer, shall be entitled to set off any liability of the Buyer to the Seller against any liability of the Seller to the Buyer Any exercise by the Buyer of its rights under this clause shall be without prejudice to any other rights or remedies available to the Buyer under this agreement or otherwise.

9. WEIGHING SAMPLING AND MOISTURE DETERMINATION:
For the purpose of final settlement, sampling and moisture determination shall be carried out in Yerevan upon loading rail cars in accordance with standard international practices under the supervision of approved supervision companies. Weighing shall be determined by the Railway Bill of Lading weight and the resulting net dry weight shall apply for final settlement purposes and shall be final and binding on both parties. Buyer and Seller shall appoint an internationally recognized supervision company, to be mutually agreed, on a joint basis to represent them during these operations. The cost for the supervision charge shall be shared equally between Buyer and Seller.

The sample lot size shall be five big bags. Representative sample with a minimum weight of 250 grams shall be taken from each lot. Five sets of samples shall be prepared and sealed in order to allow the following distribution unless otherwise agreed:
- 2 set for the Seller
- 2 set for the Buyer
- 1 set for independent supervision company

10. ASSAYING
An international assayer selected from the list below will make a chemical analysis of the samples taken in accordance with clause 9 and the results of these analyses, together with the results of the moisture determination shall be final and binding for settlement purposes and notified to Buyer and Seller in writing.  Silver and gold shall be assayed by commercial fire assay adjusted for cupel absorption and slag losses.   The costs for these services shall be shared equally between both parties.

Alex Stewart (Assayers) Ltd., UK or
Alfred H. Knight International Ltd, UK or
SGS Laboratory Services, NL

11. SUSPENSION OF QUOTATIONS:
The metal prices and currency quotations specified under this contract are the quotations in general use for the pricing of the metal content of concentrates. Should any quotation referred to in this contract cease to be published or cease to be representative, Buyer and Seller shall negotiate in good faith to establish a mutually acceptable pricing method and in the event of their inability to agree within thirty days of cessation of the quotation, the pricing method shall be determined by arbitration conducted pursuant to arbitration clause of this Contract.

12.TITLE AND RISK, INSURANCE
Title shall pass from Seller to Buyer upon Buyer making a provisional payment. Risk of loss shall pass from Seller to Buyer upon loading material into the Railcars at Yerevan. Insurance shall be covered by Buyer

Page 3 of 7
13. TOTAL OR PARTIAL LOSS
In case of total or partial loss of shipment after risk passes from Seller to Buyer, provisional payments and final settlement shall be made in accordance with Clause No. 8 PAYMENT and otherwise in accordance with the terms of this contract. Seller undertakes to assist Buyer in providing any documentation Buyer may request from time to time in order to pursue any insurance claim.  The insurance settlement shall accrue to Buyer.

14. FORCE MAJEURE
If the performance of any obligation (other than the obligation to pay for material) by any party to this Contract is hindered or prevented by reason of any of the following events, beyond the control of the parties:
- Act of God, strike, fire, lockout, flood, war, insurrection, mob violence, combination of workmen, interference of Unions or Government, suspension of labour, accident, lack of transportation or delay en route or of any other cause whatsoever beyond the reasonable control of Buyer or Seller; this shall be hereinafter referred to as Force Majeure. Such notice shall set forth in reasonable detail the nature of the Force Majeure and the best estimate by the party claiming Force Majeure of the duration thereof. The party so affected shall not be liable to the other for damages on account thereof.  However, if Seller has commenced loading of the material, or quotational period has commenced, Buyer may not declare Force Majeure.
- Any event of Force Majeure so preventing or delaying the performance of any such obligation (other than the obligation to pay for material) shall entitle the party affected to suspend such performance during the time and to the extent of the Force Majeure, provided that the party affected shall inform the other promptly in writing or by telex or facsimile.
- If the circumstances giving rise to a Force Majeure declaration continues for more than 60 consecutive days, the party not declaring Force Majeure shall have the right to renounce any further fulfilment of its obligations hereunder, with the exception of obligations which shall have accrued hereunder between Buyer and Seller.
- Except by the written agreement of Buyer, this clause shall not apply to any material for which pricing has been established or vessel space has been booked or the Quotational Period is running or any advance payment has been made

15. LIQUIDATION
Without limiting any other rights that may be available to the liquidating party (as hereinafter defined), in the event that a party hereto (the defaulting party) is the subject of a bankruptcy, insolvency or other similar proceedings or fails to pay its debts generally as they become due, the other party hereto (the liquidating party) shall have the right, exercisable in its sole discretion and at any time, to liquidate this and any or all other contracts, then outstanding between the parties (whether the liquidating party is the seller or buyer hereunder) by declaring any or all such contracts terminated (whereupon they shall become automatically terminated, except for the obligation to effect payment), calculating the difference, if any between the price specified therein, and the market price for the relevant commodity (as determined by the liquidating party in a commercially reasonable manner at a time or times reasonably determined by the liquidating party), and aggregating or netting such market damages to a single liquidated settlement payment that will be due and payable upon demand therefore.

16. CHANGE OF CONTROL
In the event of any actual or prospective change in the organisation, control or management of the Seller including without limitation a change in ownership, this contract will not be changed or in any way modified and shall continue in full force and effect.

17. TAXES, DUTIES, CHARGES AND COMMISSIONS
If applicable, all duties, taxes, charges and commissions levied or assessed in the country of origin on the material shall be for Seller's account; and all similar levies or assessments outside of the country of origin shall be for Buyer's account.

Page 4 of 7
18. LICENSES
Seller undertakes that all the necessary export licenses and all other authorisations required for the gold concentrates have been obtained and/or will be obtained for the entire quantity covered by this contract. Seller furthermore guarantees that such licenses will remain in force for the full life of the contract.

19. LIABILITIES
In no event shall Seller or Buyer be liable for indirect or consequential damages or for specific performance.

20. WARRANTIES
The Seller warrants that the material conforms, within any tolerances stated, to the description stated herein.

21. ASSIGNMENT
Seller shall not assign the whole or any part of its rights and obligations hereunder directly or indirectly without the prior written consent of the Buyer.  Buyer shall have the right to assign to its designated financing bank the whole or any part of its rights under this Contract, including without limitation, its right to receive and take delivery of the material in accordance with the terms of this Contract and its right, title and interest on any material delivered or held to Buyer's order and in relation to which the Buyer has made an Advance Payment.

22. SET-OFF
The Buyer, shall be entitled but not obliged, at any time or times, with notice to the Seller, to set off any liability of the Buyer to the Seller against any liability, as determined in a commercially reasonable manner by the Buyer, of the Seller to the Buyer (in either case howsoever arising, under whatever contract between the parties and whether any such liability of the Seller is present or future, liquidated or unliquidated and irrespective of the currency of its denomination) and the Buyer may for such purpose convert or exchange any currency. Any exercise by the Buyer of its rights under this clause shall be without prejudice to any other rights or remedies available to the Buyer or to the Seller under this agreement or otherwise.

23. CHOICE OF LAW
The construction, validity and performance of the agreement shall be governed by The Laws of England to the exclusion of any other law which may be imputed in accordance with Choice of Law Rules applicable in any jurisdiction.  However, neither party shall be precluded from pursuing arrest, attachment and/or other conservatory actions in the courts of any other country or exercising any contractual rights in relation to the goods or vessel provided for elsewhere in the agreement.

The United Nations Convention on Contracts for the International Sale of Goods of Vienna, 11 th April 1980, shall not apply to this transaction.

24. ARBITRATION
Any dispute arising out of or in connection with this agreement including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the rules of conciliation and arbitration of the London Court of International Arbitration (LCIA), which rules are deemed  to be incorporated by reference into this section. The tribunal shall consist of three arbitrators, one to be nominated by the Seller, one by the Buyer and one by the President of the LCIA. The place of arbitration shall be London. The language of the arbitration shall be English. The arbitrator shall give a written record of the award and the reasons therefore. The award shall be final and binding.

25. DEFINITIONS
The following terms shall have the following meanings when used in this Contract:
a) 
Wet metric ton or wmt means 2,204.62 pounds avoirdupois, natural state.
b) 
Dry metric ton or dmt means 2,204.62 pounds avoirdupois, dry state.
c) 
Dollars and Cents means the lawful currency of the United States of America.
d) 
A Troy Ounce equals 31.1035 grams.
e) 
A pound equals 453.593 grams
 
Page 5 of 7
 
f) 
A Gram equals 1/1000 of a kilogram.
g) 
A unit equals 1% of the dry net weight
h) 
A Calendar month refers to a named month in the Gregorian calendar.
i) 
A calendar week refers to the calendar days Monday to and including Friday.
j)
A business day refers to any calendar day Monday to and including Friday, which is not a legal and recognised holiday.
k)
Metal Bulletin refers to the publication known as "METAL BULLETIN" which is published twice a week in London by Metal Bulletin Journal, Ltd.
l) 
LME refers to London Metal Exchange
m)
Date of Shipment shall be the date on which the last Railway Bill of Lading of the current shipment is issued, stamped and signed.
n)
Date of arrival at discharge port shall be the month during which the carrying vessel reports to the Customs at the discharge port.
o) 
Normal Office Hours means 8:00 - 17:00 on Monday through Friday.
p)
INCOTERMS 2000 means International rules for the interpretation of the most commonly used trade terms in international trade, published by the  International Chamber of  Commerce in 1936 and amended in 1953, 1967, 1976, 1980, 1990 and 2,000
q)
TML means the Transportable Moisture Limit valid in Buyer’s sole option for current shipment.
r) 
FMP means Flow Moisture Point valid in Buyer’s sole opinion for current shipment
s)
IMP/BC Code refers to a cargo shipped/loaded in accordance with latest International Maritime Organisation / Bulk Cargo Code.

26. WAIVER
No party shall be deemed to have waived any right, power or privilege under this agreement unless such waiver is in writing and duly executed by it. No failure or delay in exercising any right hereunder shall be deemed a waiver thereof by any party. No exercise or partial exercise of any right, power or privilege shall preclude any other or further exercise thereof or of any other right, power or privilege.

27. ENTIRE AGREEMENT
Notwithstanding anything contained in any other agreement to the contrary this contract contains the entire agreement between the parties with respect to the subject matter hereof and all representations relating thereto are merged herein.

28. CONFIDENTIALITY
The Buyer and the Seller shall keep confidential and not disclose to any other person any business secrets or other confidential information it acquires about the other party. The parties shall not be bound by the foregoing confidentiality obligation in those cases where the other party has consented to disclosure, disclosure is required by any applicable law or relevant government authority or the secrets or information are obtained or available from any other source (other than as a result of the breach of this Contract).

29. FUTURE PRODUCTION
Both parties are in agreement to continue the commercial relationship beyond the contract period and agree to extend the frame contract for the full production of Gold Concentrates by one year at the end of each contractual year. The parties agree to negotiate terms during the 4 th quarter of the year for the following year’s production. The parties will make good faith attempts to reach agreement on the terms and conditions for treating similar qualities and shall be based on the international market for smelters treating such material.  In the event the Seller receives other bids, the Buyer shall have the right of first and last refusal to match such terms on that year’s production of concentrates. Buyer agrees to cooperate with and reasonably accommodate requirements set in Seller’s financing obligations.

30. NOTICES
All notices shall be made to the addresses of the parties set forth below or such subsequent address as any party may subsequently advise the other party in writing by first class mail, postage paid or via telefax:

Page 6 of 7
Buyer :     Industrial Minerals SA, c/o Lenz & Staehelin , Rte de Chêne 30 , 1208 Genève, Switzerland  
..                                                      .
Buyer’s agent for shipping and back-office matters : Trade Service Consult GmbH, Kaerntnerring 5-7, 1010 Vienna, Austria
Mr. Stephan Lehmden
Phone:         +43 1 2950905
Mobile:       +43 664 3023591
Facsimile:   +43 1 29509059
Email: stephan.lehmden@sl-tsc.com

Seller :      Mego Gold LLC registered offices at Suite #2, 2A Tamanian Street,   Yerevan, Armenia, 0009
Phone      :  + 374 10 58 98 56
Fax           :  + 374 10 54 56 98
Email: aboghossian@ggm.am


IN WITNESS WHEREOF, the parties hereto have caused their duly authorised representatives to execute this Contract of Purchase and Conditions of Purchase.
 
 
 
 
 
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Exhibit 10.4
 
 
 
 
 
DATED 25 FEBRUARY 2010
 
 
 
 
MEGO GOLD LLC
and
INDUSTRIAL MINERALS SA
 
 
 
 
 
SECURITY AGREEMENT
 
 

 
 
THIS AGREEMENT is made on 25FEBRUARY 2010
 
BY AND BETWEEN
 
(1)
MEGO GOLD LLC, registered offices at Suite#2, 2A Tamanyan Street, Yerevan, Armenia ( hereinafter referred to us " Mego "); and
 
(2)
Industrial Minerals SA, ac/o Lenz & Staehelin, Rte de Chene 30, 1208 Geneva, Switzerland (hereinafter referred to us “Secured Party” ).
 
IT IS AGREED as follows:
 
1.
DEFINITIONS AND INTERPRETATION
 
1.1
Definitions
 
In this Agreement:
 
" Business Day " means a day (other than Saturday or Sunday) on which banks are open for general business in Switzerland and Armenia.
 
" GCSC " means Gold Concentrate Supply Contract concluded between the parties and dated as of February 1, 2010
 
" Civil Code " means the Civil Code of the Republic of Armenia.
 
" Collateral Rights " means all rights, powers and remedies of the Secured Party provided by this Agreement or by law.
 
" Enforcement Event " means the non-performance or improper performance by Mego.
 
" Collateral/Security " means the Stockpile secured under or pursuant to or evidenced by this Agreement.
 
"Stockpile" means 20,000 tones of ore stockpiled and held by, to the order or on behalf of the Secured Party at any time.
 
1.2
Construction
In this Agreement,
 
(a)
Unless a contrary indication appears, a reference to:
 
 
(i)
" assets " includes present and future properties, revenues and rights of every description;
 
 
(ii)
" indebtedness " includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
 
-2-
 
(iii)
a " person " includes any person, firm, company, corporation, government, state or agency of a state or any association, trust or partnership (whether or not having separate legal personality) of two or more of the foregoing;
 
 
(iv)
a " regulation " includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but, if not having the force of law, with which persons who are subject thereto are accustomed to comply) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
 
 
(v)
the " winding-up ", " dissolution ", " administration " or " reorganisation " of a company or corporation shall be construed so as to include any equivalent or analogous proceedings under the laws and regulations of Armenia or any jurisdiction in which the Mego carry on business including the seeking of liquidation, winding-up, reorganisation, bankruptcy, dissolution, administration, arrangement, adjustment, protection or relief of debtors;
 
 
(vi)
a reference to a clause, paragraph or schedule, unless the context otherwise requires, is a reference to a clause, a paragraph of or a schedule to this Agreement.
 
 
(b)
General words shall not be given a restrictive meaning by reason of their being preceded or followed by words indicating a particular class of acts, matters or things or by examples falling within the general words.  Any phrase introduced by the terms "other", "including" and "include" or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms.
 
 
(c)
Section, Clause and Schedule headings are for ease of reference only.
 
2.
SECURED OBLIGATIONS
 
The Mego charge the Stockpile with full title guarantee and mortgages as of first ranking security in favour of the Secured Party, as continuing security for the payment of an amount USD 450 000 /four hundred fifty thousands/ received under the “Gold Concentrate Supply Contract” concluded between the parties and dated as of February 1, 2010 a copy of which is attached hereto and made a part hereof (GCSC).
 
3.
RELEASE
 
3.1
Release
Upon performance in full by the Mego of their obligations under the GCSC Contract or otherwise upon termination of such Contract, the Secured Party shall, at the request and cost of the Mego, release all the security granted under this Agreement and deliver to the Secured Party all documents necessary to effect the release of security without any recourse to, and without any representations or warranties by, the Secured Party or any of its nominees.
 
-3-
4.
ENFORCEMENT EVENT
 
4.1
Enforcement Event
Mego shall be in default under this agreement upon the occurrence of any of the following events or conditions, namely: (a) default in the performance of any of the Obligations or of any agreements or liabilities contained or referred to herein or in GSCS; (b) any warranty, representation or statement made or furnished to Secured Party by or on behalf of Mego proving to have been false in any material respect when made or furnished; (c) loss, theft, substantial damage, destruction, sale or encumbrance to or any of the Collateral, or the making of any levy, seizure or attachment thereof or thereon; or (d) dissolution, termination of existence, filing by Mego or by any third party against Mego of any petition under any bankruptcy statute, insolvency, business failure, appointment of a receiver of any part of the property of, or assignment for the benefit of creditors by Mego.
 
Upon the occurrence of an Enforcement Event, the Mego must:
 
(a)
transfer to the Secured Party any interest and other monies and benefits it may receive thereafter in connection with the Stockpile
 
(b)
notwithstanding Clause 5.2 of this Agreement, not take any decisions as the owner of Stockpile except in accordance with the instructions of the Secured Party.
 
5.
MEGOS' REPRESENTATIONS AND UNDERTAKINGS
 
5.1
Representations
Mego makes the following representations and warranties to the Secured Party and acknowledges that the Secured Party has become party to this Agreement in reliance on these representations and warranties:
 
(a)
Non-conflict with other obligations
 
The entry into and performance by it of, and the transactions contemplated by, this Agreement  do not and shall not result in the existence of, or oblige it to create, any security over the Collateral other than as permitted under this Agreement.
 
Except for the security interest granted hereby, Mego is the owner of the Collateral free from any adverse lien, security interest or encumbrance; and Mego will defend the Collateral against all claims and demands of all persons at any time claiming the same or any interest therein.
 
-4-
(b)
No Financing Statement covering any of the Collateral or any proceeds thereof is on file in any public office. Mego shall immediately notify the Secured Party in writing of any change in name, address, identity or corporate structure from that shown in this Agreement and shall also upon demand furnish to the Secured Party such further information and shall execute and deliver to Secured Party such financing statements and other documents in form satisfactory to Secured Party and shall do all such acts and things as Secured Party may at any time or from time to time reasonably request or as may be necessary or appropriate to establish and maintain a perfected security interest in the Collateral as security for the Obligations, subject to no adverse liens or encumbrances; and Mego will pay the cost of filing the same or filing or recording this agreement in all public offices wherever filing or recording is deemed by Secured Party to be necessary or desirable.  A carbon, photographic or other reproduction of this agreement is sufficient as a financing statement.
 
(c)
Except as contemplated by the GCSC between the parties, Mego will not sell, assign, pledge, lease or otherwise transfer or encumber the Collateral or any interest therein, without the prior written consent of Secured Party.
 
(d)
Mego will keep the Collateral free from any adverse lien, security interest or encumbrance and in good order and repair, shall not waste or destroy the Collateral or any part thereof, and shall not use the Collateral in violation of any statute, ordinance or policy of insurance thereon. Secured Party may examine and inspect the Collateral at any reasonable time or times, wherever located.
 
(e)
Mego will pay promptly when due all taxes and assessments upon the Collateral or for its use or operation or upon this Agreement or upon any note or notes evidencing the Obligations.

(f) 
Repetition
 
The representations set out in Clauses 5.1 ( Non-conflict with other obligations ) are deemed to be made by the Mego by reference to the facts and circumstances then existing on the date of this Agreement.
 
5.2
Undertakings
(a)
Disposals and Negative pledge
 
The Mego shall not enter into a single transaction or a series of transactions (whether related or not) whether voluntarily or involuntarily, to sell, lease, transfer or otherwise dispose of the whole or any part of the Collateral and will not create or permit to subsist any security interest on any part of the Collateral or otherwise deal with any part of the Collateral, save as may be permitted under this Agreement or instructions received by the Secured Party.
 
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6.
FURTHER ASSURANCE
 
(a)
The Mego will promptly at their own cost do all such acts or execute all such documents as the Secured Party may specify (and in such form as the Secured Party may require in favour of the Secured Party or its nominee(s)) for the purpose of exercising the Collateral Rights or perfecting the Security created or intended to be created in respect of the Collateral or for the exercise of the rights, powers and remedies of the Secured Party provided by or pursuant to this Agreement or by law in each case in accordance with the rights vested in it under this Agreement.
 
(b)
The Mego shall promptly take all such action available to them as may be necessary for the purpose of the creation, perfection, protection or maintenance of the Collateral as a first-ranking security over the Stockpile.
 
7.
SECURITY ENFORCEMENT
 
7.1
Enforcement out of court
Upon and at any time after the occurrence of an Enforcement Event, the Secured Party may in its sole discretion, by written notice to the Mego in accordance with the Article 249 of the Civil Code of RA (which, at the date of this Security, requires that two-months' notice be given before security can be enforced) and without recourse to any court, in its absolute discretion enforce all or any part of the Collateral by securing and perfecting its title to all or any part of the Collateral (including transferring the Collateral into its name or the name of third persons designated by it or by instructing Mego to sell/export the Collateral to the person designated by the Secured Party) or selling (direct sale), or otherwise disposing of all or any part of the Collateral at a fair market value prevailing at the material time.
 
7.2
Enforcement through court
Upon the occurrence of an Enforcement Event, the Secured Party shall be entitled in its sole discretion to select the enforcement the Security by taking proceedings in any competent court in Armenia.
 
8.
EFFECTIVENESS OF COLLATERAL
 
8.1
No Waiver
No failure to exercise, nor any delay in exercising, on the part of the Secured Party, any right or remedy under this Agreement shall operate as a waiver of any such right or remedy or constitute an election to affirm this Agreement. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy of the Secured Party. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.
 
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8.2
Illegality, Invalidity, Unenforceability
If, at any time, any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of this Agreement nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
 
8.3
No liability
None of the Secured Party or its nominee(s) shall be liable by reason of (a) taking any action permitted by this Agreement or (b) any neglect or default in connection with the Collateral or (c) realisation of all or any part of the Collateral, except in the case of gross negligence or wilful default upon its part.
 
8.4
Implied Covenant for Title
It shall be implied in respect of this Agreement that the Mego are charging the Collateral free from all charges and encumbrances (whether monetary or not) and from all other rights exercisable by third parties (including liabilities imposed and rights conferred by or under any enactment).
 
8.5
Continuing security
(a)
The Security from time to time constituted by this Agreement is a continuing security and will remain in full force and effect as a continuing security until the date of full and final discharge of the GCSC.
 
(b)
No part of the Security from time to time constituted by this Agreement will be considered satisfied or discharged by any intermediate payment, discharge or satisfaction of any part of the CCSC.
 
(c)
In accordance with Article 233 of the Civil Code, the Security shall secure the Secured Party’s claim to the extent of the amount it will be worth of at the time of actual satisfaction.
 
8.6
Immediate recourse
The Mego waives any right it may have of first requiring the Secured Party to proceed against or enforce any other rights or Security or claim payment from any person before claiming from the Mego under this Agreement.
 
8.7
No prejudice
The Collateral created by or pursuant to this Agreement and the rights, powers and remedies of the Secured Party provided by or pursuant to this Agreement or by law shall not be prejudiced by any unenforceability or invalidity of any other agreement or document (other than the agreements and documents under which the GCSC are created) or by any time or indulgence granted to the Mego or any other person by the Secured Party or by any other thing which might otherwise prejudice the Security or any rights, powers and remedies of the Secured Party provided by or pursuant to this Agreement or by law.
 
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8.8
Discretion
Any liberty or power which may be exercised or any determination which may be made under this Agreement by the Secured Party may be exercised or made in its absolute and unfettered discretion without any obligation to give reasons.
 
9.
EXPENSES, STAMP TAXES, INDEMNITY
 
9.1
Expenses
The Mego shall promptly on demand pay the Secured Party the amount of all costs and expenses (including legal fees) reasonably incurred by the Secured Party in connection with the negotiation, preparation and execution of this Agreement and the completion of the transactions and perfection of the security contemplated in this Agreement.
 
9.2
Enforcement expenses
The Mego shall, within 5 (five) Business Days of demand pay to the Secured Party for all the costs and expenses (including legal fees) on a full indemnity basis incurred by it in connection with the exercise, preservation and/or enforcement of any of the rights, powers or remedies of the Secured Party or the Security or any proceedings instituted by or against the Secured Party as a consequence of taking the Security.
 
9.3
Indemnity
The Mego shall, notwithstanding any release or discharge of all or any part of the security, indemnify the Secured Party, its attorneys against any action, proceeding, claims, losses, liabilities and costs which they may sustain as a consequence of any breach by the Mego of the provisions of this Agreement, the exercise or purported exercise of any of the rights and powers conferred on them by this Agreement or otherwise relating to the Collateral.
 
9.4
Interest on Demands
If the Mego fails to perform any of its Obligations under the GCSC and consequently repay the amount due on the due date for payment of that amount the Mego shall pay interest on any such sum (before and after any judgment and to the extent interest at a default rate is not otherwise being paid on such sum) from the date of demand until the date of payment calculated on a daily basis at the interest rate of 8% annually.
 
9.5
Payments Free Of Deduction
All payments to be made to the Secured Party under this Agreement shall be made free and clear of and without deduction for or on account of tax unless the Mego are required to make such payment subject to the deduction or withholding of tax, in which case the sum payable by the Mego in respect of which such deduction or withholding is required to be made shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, the person on account of whose liability to tax such deduction or withholding has been made receives and retains (free from any liability in respect of any such deduction or withholding) a net sum equal to the sum which it would have received and so retained had no such deduction or withholding been made or required to be made.
 
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10.
APPLICATION OF PROCEEDS
 
All moneys received or recovered by the Secured Party as a result of enforcement of the Security shall be:
 
(a)
first, reimbursing the Secured Party any costs incurred in connection with the enforcement of the Security; and
 
(b)
second, paying the amount due to the Secured Party under the GSCS as well as interest incurred, if any; and
 
(c)
if any amount is left from the enforcement of Security in excess of the amounts due to Secured Party, it shall be transferred to Mego.
 
11.
ASSIGNMENT
 
11.1
Permitted Successors
This Agreement shall be binding upon and shall inure to the benefit of each party and its legal successors, permitted transferees and permitted assigns and despite any amalgamation or merger (however effected) relating to such party.
 
11.2
Disclosure
The Secured Party shall be entitled to disclose such information concerning the Mego or any other person and this Agreement as the Secured Party considers appropriate to any actual or proposed direct or indirect successor or to any person to whom information may be required to be disclosed by applicable law.
 
12.
NOTICES
 
12.1
Communications in writing
Any communication to be made under or in connection with the present Agreement shall be made in writing form.
 
13.
WAIVERS AND COUNTERPARTS
 
13.1
Waivers
No waiver by the Secured Party of any of its rights under this Agreement shall be effective unless given in writing.
 
13.2
Counterparts, Governing language
This Agreement is made in three original copies in the Armenian and English languages, all having the same legal effect. Each party holds a copy. A fourth copy shall be provided to, and kept with, the notary public. In the event of any discrepancies between the English and Armenian language versions of this Agreement, the Armenian language version shall prevail.
 
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14.
GOVERNING LAW
 
This Agreement shall be governed by the laws of Republic of Armenia.
 
15.
DISPUTE RESOLUTION
 
Any dispute, controversy or claim which may arise out of or in connection with this Agreement, or the execution, breach, termination or invalidity of this Agreement shall be referred to, and finally resolved by, relevant Armenian courts.

 
THIS AGREEMENT has been signed by the Mego and the Secured Party on the date specified above in February 25, 2010.
 

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EXECUTION PAGE
 
 
 
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Exhibit 10.5
 
GLOBAL GOLD CORPORATION GUARANTEE
 
THIS GUARANTEE, made this 25 th day of February, 2010, by GLOBAL GOLD CORPORATION , a Delaware USA corporation  with its principal offices at 45 East Putnam Avenue, Greenwich, Connecticut, USA  (hereinafter called the “Guarantor” ), in favor of   INDUSTRIAL MINERALS SA, c/o Lenz & Staehelin , Rte de Chêne 30 , 1208 Genève, Switzerland     (hereinafter called “Obligor” ).
 
W I T N E S S E T H :
 
1.   Guarantee of Obligations .  Guarantor hereby guarantees to Obligor the complete and punctual payment or performance of each and every indebtedness and obligation (collectively, the “Obligations”), now existing or arising at any time hereafter, of Obligee to Obligor between Obligor and MEGO GOLD, LLC , registered offices at Suite #2, 2A Tamanian Street,   Yerevan, Armenia, 0009 (hereinafter called “Obligee” ) arising out of or relating directly or indirectly to the “Gold Concentrate Supply Contract” dated as of February 25 th 2010  and the related “Security Agreement”  dated as of February 25 th 2010 (copies of both executed agreements are attached hereto and made a part hereof.)
 
2.   Absolute, Unconditional Guarantee .  This guarantee is an absolute, present, primary, continuing, unlimited and unconditional guarantee of payment and performance, and, without limitation.  If Obligee at any time fails to pay or perform any of the Obligations, Guarantor shall immediately effect complete payment and performance.  Obligor shall have the right in its sole discretion to select the enforcement of the collateral under the Security Agreement and/or this Guarantee in case of default by the Obligee to duly perform any Obligation. Choice by the Obligor on enforcement of the Security Agreement collateral shall not result in waiver and/or cancellation of the rights vested to Obligor under this Guarantee. The payment by the Guarantor of the whole amount owed to the Obligor by Obligee shall be sufficient ground for termination of the Security Agreement.
 
3.   Amendment .  No right or benefit in favor of Obligor shall be deemed waived, no obligation or liability of Guarantor hereunder shall be deemed modified, diminished, released, compromised, extended, discharged or otherwise affected, and no provision or term hereof may be amended, modified or otherwise changed except by an instrument in writing, specifying the same, duly executed by Obligor.
 
4.   Assigns .  This guarantee and all rights and obligations hereunder shall inure to the benefit of and shall be binding on Obligor, Guarantor and their respective successors and assigns.
 
           5.   Incorporation of Gold Concentrate Supply Contract Terms .    The parties expressly incorporate by reference the provisions of the  Gold Concentrate Supply Contract, including but not limited to those related to choice of law and choice of forum.

IN WITNESS WHEREOF, the parties have duly executed this Guarantee on or as of the date first above mentioned.