Delaware
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02-69494
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13-3025550
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(State or other jurisdiction
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(Commission
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(IRS
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of incorporation)
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File Number)
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Identification No.)
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555 Theodore Fremd Avenue, Rye, NY
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10580
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(Address of principal executive offices)
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(Zip Code)
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Exhibit No.
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Description
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10.3
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Material Agreement – December 2, 2011 signed agreement for the sale of Compania Minera Global Gold Valdivia S.C.M. company to Conventus Ltd. and Amarant Mining Ltd.
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10.4
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Material Agreement – October 27, 2010 signed agreement for the sale of Compania Minera Global Gold Valdivia S.C.M. company to Conventus Ltd. (1)
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Dated: December 7, 2011
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Global Gold Corporation
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By:
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/s/ Van Z. Krikorian
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Name:
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Van Z. Krikorian
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Title:
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Chairman & Chief
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Executive Officer
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(a)
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GGC shall sell, transfer, assign and convey to Amarant, and Amarant shall purchase, receive and acquire from GGC, the Gold Oro Interest, free and clear of any mortgage, pledge, assessment, security interest, lien (other than for taxes not yet due and payable), adverse claim, levy, charge or other encumbrance of any kind (“
Lien
”), as partial consideration for (i) the 1% Amarant Interest set out in Section 3.03(i), (ii) the Additional Payments as set out in Section 3.03 and (iii) the Bonus Payments as set out in Section 3.03; and
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(b)
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GGC shall sell, transfer, assign and convey to Amarant, and Amarant shall purchase, receive and acquire from GGC, the Gold Plata Interest, free and clear of any Lien, as partial consideration for (i) the 1% Amarant Interest set out in Section 3.031(i), (ii) the Additional Payments as set out in Section 3.03 and (iii) the Bonus Payments as set out in Section 3.03;
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(a)
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Subject to the terms and conditions of this Agreement, the closing of the purchase and sale of the interests contemplated in Section 3.1 (the “
Closing”
) shall take place at the offices of Sanders Ortoli Vaughn-Flam Rosenstadt LLP, 501 Madison Avenue, 14
th
Floor, New York, New York (or such other place as the Parties may mutually agree), on the fifth day following the satisfaction or waiver of the conditions to the obligations of the parties hereto set forth in Article VII (other than conditions that by their nature are to be satisfied at Closing, and subject to the satisfaction or waiver of such conditions), or at such place or on such date and at such time as the Parties shall mutually agree (the “
Closing Date”
).
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(b)
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At the Closing,
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(c)
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GGV and Amarant shall assume the royalty obligations to Mr. Ian Hague, domiciled in New York City, of a 1.75% net smelter return royalty (the “NSR”) payable from the sale of gold and all other metals produced from the Pureo Property. The NSR shall be paid quarterly and shall be accompanied by a statement summarizing the calculations for the payment. The quarterly NSR are subject to adjustment at the end of the accounting year with underpayments to be paid within 30 days of the completion of accounts and overpayments to be deducted from future NSR payments. Ian Hague is entitled to inspect and audit production and sales records no more than twice a year and after providing at least 30 days notice. Nothing herein shall restrict Amarant from transferring all or any portion of its interest in the Pureo Property so long as such transfer remains subject to the NSR. If Amarant transfers all or any portion of its interest in the Pureo Property, upon obtaining from the transferee a written assumption of the NSR with respect to the interest so transferred, Amarant shall thereupon be relieved of all liability for payment of the NSR that may arise after the transfer with respect to such transferred interest.
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3.03
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Post-Closing Matters.
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(a)
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Amarant agrees that it shall pay GGC an additional $4,000,000 at any time prior to December 14, 2014 with minimum payments of (i) $1,000,000 on or before December 15, 2011, (ii) an additional $1,000,000 on or before December 15, 2012, (iii) an additional $1,000,000 on or before December 15, 2013 and (iv) an additional $1,000,000 on or before December 15, 2014 (such payments in (i) to (iv), the “
Additional Payments
”); further provided that Amarant may pay all of the Additional Payments prior to December 15, 2014. If Amarant fails to meet any payment obligations under this Agreement and, other than for the Additional Payment due on December 15, 2011, has not cured such failure within sixty days of its occurrence, (i) interest shall accrue on the unpaid amount of the missed payment obligation (the “Unpaid Amount”) from the date of such missed payment until the Unpaid Amount is paid at a rate of 12% per annum, (ii) GGC may convert such outstanding amount into common stock of Amarant if Amarant is quoted on a market or quotation system at a conversion price that shall be equal to VWAP over the past 30 days on which the stock traded or (iii) GGC may immediately declare all amounts due under this agreement.
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In Connection with (i) above, any interest due under this section shall be paid quarterly and interest not paid when due shall be added to the Unpaid Amount. Amarant shall pay all of GGC’s reasonable costs, including attorneys fees, in connection with recovering the Unpaid Amount.
In connection with (ii) above “VWAP” shall mean the volume weighted average price of Amarant’s common shares during any trading day as reported by or based on information provided by Bloomberg LP or other reputable reporting service reasonably acceptable to Amarant.
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(b)
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Amarant agrees that it shall provide semi-annual reports to GGC as to GGV’s annual production and that GGC may, with reasonable notice which shall be at least 30 days, inspect and audit development, production and property records of GGV; provided that if Amarant is subject to the reporting requirements of the Securities Exchange Act of 1934 (or voluntarily complies with such act), Amarant is under no obligation to disclose any information which has not been included in filings with the U.S. and Securities and Exchange Commission under such Act or the Securities Act of 1933.
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(c)
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Amarant agrees that if within seven years of the date hereof, GGV, Amarant or any of their successors produces 150,000 ounces of gold from the Pureo Property, Amarant shall pay (or cause to be paid) to GGC a one-off bonus of $2,500,000, with such bonus to be paid within 60 days of achieving such production (the “
Bonus Payment
”).
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(d)
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For as long as Additional Payments are due under this Agreement, Amarant agrees that prior to relinquishing, selling or otherwise transferring GGV, Minera Global, Global Oro or Global Plata or all of GGV’s property rights related to the Pureo Property, it shall provide GGC written notice of the pertinent terms and conditions of the offer of the proposed sale and the proposed assignment including all documents containing the offer. GGC shall have fifteen days from the date such notice is delivered to notify Amarant whether it elects to acquire the offered interest at the same price and on the same terms and conditions as set forth in the notice. In the event any consideration to be paid pursuant to a third party offer is not in US dollars, the non-assigning party shall have the right to substitute for such consideration the fair market value thereof in US dollars as determined by reference to the noon-dollar buying rate as published by Bloomberg on the date of notice. In the event GGC does not exercise its right of first refusal, the assigning party shall have 90 days to complete the assignment on the terms and conditions contained in the notice after which 90 days the right of first refusal of GGC shall once again apply.
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(e)
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GGC agrees that until December 31, 2011 it shall provide Amarant with reasonable consulting services and technical assistance in connection with the Pureo Property, including its development, production, exploration and expansion.
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(f)
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Amarant agrees that within four months of the Closing it shall pay the funds due Conventus pursuant to Article II of this Agreement. Amarant’s failure to pay such consideration to Conventus shall not affect any of the other obligations of this Agreement.
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(g)
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GGC covenants that it shall not distribute as a dividend or any other form of distribution to its shareholders any of the shares of Amarant that it receives as part of the 1% Amarant Interest. This provision shall apply to GGC for as long as it holds any Amarant shares acquired under this Agreement, provided that this provision shall cease to apply if Amarant becomes a reporting company under the Securities Exchange Act of 1934.
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(h)
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Amarant covenants that within six months of the Closing it shall have caused each of GGV and Minera Global to have taken all corporate action necessary to change their respective names such that neither GGV nor Minera Global shall have the word “Global” (or any similar word) in its name.
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(i)
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On or before December 15, 2011, Amarant shall (i) issue and convey to GGC, and GGC shall purchase, receive and acquire from Amarant, the 1% Amarant Interest, free and clear of any Lien, in consideration for the Global Oro Interest set out in Section 3.01(a), the Global Plata Interest set out in Section 3.01(b) and (ii) deliver to GGC a copy of its charter documents and all amendments thereto.
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(a)
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Indebtedness
. No GGC Subsidiary has any outstanding indebtedness for borrowed money (other than to another GGC Subsidiary) or any outstanding guarantees of any indebtedness for borrowed money of any person, and is not directly or indirectly liable upon or with respect to (by discount, repurchase agreement or otherwise), or obligated in any other way to provide funds in respect of, or to guarantee or assume, any debt, obligation or dividend from any Person.
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(b)
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Taxation
. Each GGC Subsidiary (i) has filed all material U.S. federal, state, local and all non-U.S. income, franchise and other Tax returns and reports required to be filed through the date of this Agreement and has paid all taxes due thereon, and (ii) no material tax deficiency has been determined adversely to a GGC Subsidiary nor does GGC have any knowledge of any material tax deficiencies pertaining to a GGC Subsidiary.
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(c)
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Disputes/Litigation
. (i) There is no (and has not been any) action, lawsuit, proceeding, inquiry or investigation before or by any governmental authority pending or, to the knowledge of GGC, threatened against or affecting the Pureo Property or any GGC Subsidiary or any of their officers or directors (in their capacity as officers and directors of a GGC Subsidiary) and (ii) there is no (and has not been any) civil action, lawsuit, arbitration or other similar proceeding, before or by any governmental authority pending or, to the knowledge of GGC, threatened against or affecting any GGC Subsidiary or any of their officers or directors (in their capacity as officers and directors of a GGC Subsidiary).
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(d)
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Environmental
.
Each GGC Subsidiary (i) is in compliance with all Environmental Laws (as defined below), (ii) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its businesses, (iii) has conducted all necessary environmental assessments and (iv) is in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (i) through (iv), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a material adverse effect. In connection with the Environmental Laws, neither GGC or any of the GGC Subsidiaries are aware of any claim, threatened or potential claim or circumstances related to any of assets or properties of a GGC Subsidiary (whether arising from a GGC Subsidiary or a previous owner) that GGC or such GGC Subsidiary should reasonably believe would lead to a GGC Subsidiary’s criminal or civil liability. The term “
Environmental Laws
” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, dams, land surface or subsurface strata), including, without limitation, laws relating to mining, emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “
Hazardous Materials
”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
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(e)
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Subsidiaries
. No GGC Subsidiary has a 33% or greater equity interest in any entity, except as set out in the Recitals to this Agreement.
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(f)
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Global Oro Capitalization and Title
. Global Oro currently only has one member, GGC, and upon Closing and in accordance with the draft Global Oro Amended Operating Agreement, Global Oro will have only one member, Amarant. GGC’s interest in Global Oro is validly issued, fully paid and non-assessable. GGC has not entered into any agreement or delivered any document that in any way restricts the transferability of the Global Oro Interest or Amarant’s full exercise of its rights as an owner of the Global Oro Interest after the Closing Date.
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(g)
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Global Plata Capitalization
. Global Plata currently only has one member, GGC, and upon Closing and in accordance with the draft Global Plata Amended Operating Agreement, Global Plata will have only one member, Amarant. GGC’s interest in Global Plata is validly issued, fully paid and non-assessable. GGC has not entered into any agreement or delivered any document that in any way restricts the transferability of the Global Plata Interest or Amarant’s full exercise of its rights as an owner of the Global Plata Interest after the Closing Date.
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(h)
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Minera
Global
Capitalization
. Minera Global currently has two members, Global Oro and Global Plata, and upon Closing it shall have the same and no additional members. Global Oro and Global Plata’s interest in Minera Global is validly issued, fully paid and non-assessable. Neither of Global Oro or Global Plata has entered into any agreement or delivered any document that in any way restricts Amarant’s full exercise of its rights as an indirect owner of all of the interests in Minera Global after the Closing Date.
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(i)
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GGV
Capitalization
. GGV currently has only two members, Minera Global and Global Oro, and upon Closing its sole members shall be Minera Global and Global Oro. Minera Global’s interest in GGV is validly issued, fully paid and non-assessable. Minera Global has not entered into any agreement or delivered any document that in any way restricts (i) Minera Global’s full exercise of its rights as a direct owner of its interests in GGV or (ii) Amarant’s full exercise of its rights as an indirect owner of all of the interests in GGV after the Closing Date.
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(j)
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Representations of GGC Subsidiaries
. Each of the representations of the GGC Subsidiaries made in this Agreement are true, complete and accurate.
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(k)
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Financial Data
. All financial data provided to Amarant regarding a GGC Subsidiary and all financial data filed by GGC concerning a GGC Subsidiary is true and accurate as of the date of such financial data and GGC knows of no reason to amend or restate any such financial information.
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(l)
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Foreign Corrupt Practices
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Neither GGC nor any GGC Subsidiary nor any director, officer, agent, employee or other Person acting on behalf of GGC or any GGC Subsidiary has, in the course of its actions for, or on behalf of, GGC or any GGC Subsidiary (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.
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(m)
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Affiliated Transactions
. None of the officers, directors or employees of GGC or any GGC Subsidiary is presently a party to any transaction with any GGC Subsidiary, including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer, director or employee or, to the knowledge of the Company or any of its Subsidiaries, any corporation, partnership, trust or other Person in which any such officer, director, or employee has a substantial interest or is an employee, officer, director, trustee or partner.
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(n)
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Property
.
Schedule 5.01(n)
sets out a list of all assets and real property owned by each GGC Subsidiary, including maps and documentation showing the location and title of all real property owned or leased by such GGC Subsidiary or which such GGC Subsidiary otherwise has the right to exploit (the “
Assets
”). Each GGC Subsidiary has good, clear and marketable title to the Assets, except as otherwise set out in
Schedule 5.01(n)
, and all Assets are free and clear of Liens. There are no condemnation, environmental, zoning or other land use regulation proceedings, either instituted or threatened, which would have a material adverse effect on the use or operation of the Assets. The Assets are in good condition and repair and are fit for the purposes for which GGC currently intends to use them. No person other than GGC owns any assets or holds any property interest or license rights to any assets, including the Assets which are used in the actual or intended business of GGC.
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(o)
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Contracts
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Schedule 5.01(o)
sets out all contracts of each GGC Subsidiary that are necessary for such GGC Subsidiary’s actual or intended business and for which such GGC Subsidiary is required to make expenditures (in a single transaction or a series of transactions) in excess of US$20,000. Each contract listed in
Schedule 5.01(o)
is in full force and effect and has not been defaulted upon by any party to such contract.
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(p)
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Mining Rights
. Each GGC Subsidiary is in possession of all mining rights (all of which are set out in
Schedule 5.01(p)
) (the “
Mining Rights
”) necessary for such GGC Subsidiary to operate its actual or intended business. ”). A map that depicts the details of these mining concessions is included in
Schedule 5.01(p)
. All such Mining Rights have been granted to such GGC Subsidiary pursuant to valid authorizations in full force and effect and all such Mining Rights during such relevant time period shall be located on or with respect to the properties set out in
Schedule 5.01(p)
on which such GGC Subsidiary holds valid rights in full force and effect or as otherwise obtained through valid and enforceable contracts. None of the Mining Rights are subject to any pending, or to GGC’s or such GGC Subsidiary’s knowledge, threatened dispute, condemnation or expropriation proceedings or to any right or interest of any person superior at law to such Mining Rights or which in any way will impair or restrict the ability of such GGC Subsidiary to use, enjoy and exercise such Mining Rights. None of the Mining Rights are subject to the approval of, grant from or are otherwise dependent upon any first nation or native peoples. Except as set out on
Schedule 5.01(p)
, the Mining Rights, the claims attached thereto and the lands on which they are located are free from obligations, mortgages, prohibitions, restrictions, injunction orders, promises, options, royalties or other personal or contractual rights whatsoever, royalties, contracts of leases or obligations of any type in favor of third parties and also free of litigations, debts or other judicial or voluntary restrictions that could affect its ownership, use and possession or any of its rights.
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(q)
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Permits and Approvals
. Each GGC Subsidiary has kept and keeps in total good standing all the permits, approvals and necessary authorizations for the Mining Rights.
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(r)
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Amarant Investments to Date
. GGC hereby acknowledges that Conventus has made US$1,000,000 million in payments for the GGC Subsidiaries to date and that the credit for those payments is being transferred by this Agreement to Amarant.
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(s)
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Shareholder authority
. Under Delaware law, GGC does not require the approval of a majority of its shareholders to effect the transactions contemplated by this Agreement (including the transfer of the Global Oro Interest and the Global Plata Interest).
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(t)
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There are no material changes from regarding the financial condition of Global Oro, Global Plata, GGV or Minera Global from the financial information regarding those companies incorporated in GGC’s
Form 10-K filed with the SEC on April 14, 2011 and subsequent quarterly filings with
the US Securities and Exchange Commission (nor are there any material liabilities not disclosed therein) or as provided to Amarant’s Chilean counsel.
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(u)
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Any governmental certificates regarding the mining claims on the Pureo Property that are produced within 20 days of the Closing will demonstrate that GGV or Minera Global is the sole holder of such claims and will not demonstrate any lien or other encumberance theron.
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(a)
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Title to 1% Amarant Interest
. Prior to the issuance of the Amarant Interest, Amarant will be authorized to issue the 1% Amarant Interest to GGC, and upon doing so GGC will have good and valid title to, and sole record and beneficial ownership of, the 1% Amarant Interest free and clear of any and all Liens. Upon Issuance, the 1% Amarant Interest will be validly issued, fully paid and non-assessable. Amarant has not entered into any agreement or arrangement pursuant to which it is, or may be, required to issues membership interests in Amarant as a result of the transactions contemplated by this Agreement.
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(b)
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Disputes/Litigation
. (i) There is no (and has not been any) action, lawsuit, proceeding, inquiry or investigation before or by any governmental authority pending or, to the knowledge of Amarant, threatened against or affecting Amarant or any of its officers or directors (in their capacity as officers and directors of Amarant) and (ii) there is no (and has not been any) civil action, lawsuit, arbitration or other similar proceeding, before or by any governmental authority pending or, to the knowledge of Amarant, threatened against or affecting Amarant or any of its officers or directors (in their capacity as officers and directors of Amarant).
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(c)
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Commencement of production.
Upon Closing,
Amarant
will be responsible for the July 24, 2009 contractual condition with Juan Jose Quijano Fernandez and Juan Jose Quijano Claro to commence production on a commercial basis on the Pureo Property on or before August 15, 2011 (a date which has subsequently been postponed by Juan Jose Quijano Fernandez and Juan Jose Quijano Claro to December 31, 2012).
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(a)
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change the remuneration or any material term of employment of any director, officer or employee of any GGC Subsidiary, other than (i) as required by law and (ii) pursuant to the terms of any arrangements as in effect as of the date of this Agreement;
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(b)
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declare or pay any dividend or make any other distribution;
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(c)
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purchase or sell any material assets, other than any purchase of assets (which alone or in a series of transactions totals more than $10,000) all of which permissible purchases are to be disclosed in a certificate (Certificate 6.01(c)) to be provided to Amarant at Closing;
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(d)
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enter into, amend or terminate any material agreement or arrangement;
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(e)
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amend its operating agreement, certificate of formation or other charter and operative documents;
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(f)
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borrow any money or incur any other indebtedness (including failing to settle accounts payable in a timely manner);
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(g)
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appoint any person as a director or executive officer or engage any person as a consultant; and
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(h)
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amend any insurance contract, allow any insurance policy to expire or terminate or fail to notify any insurer of an insurance claim in accordance with the relevant provisions of the applicable policy.
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(a)
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Representations, Warranties and Covenants
. (i) The representations and warranties of GGC and each GGC Subsidiary contained in this Agreement shall have been true and correct in all material respects as of the date of this Agreement and shall be true and correct in all material respects as of the Closing Date, except for such failures to be true and correct as, individually or in the aggregate, would not have a material adverse effect on any of the GGC Subsidiaries (or all of them in the aggregate) and (ii) the covenants and agreements contained in this Agreement to be performed or complied with by GGC and the GGC Subsidiaries on or before the Closing shall have been performed or complied with in all material respects.
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(b)
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No Injunction
. There shall not be any injunction, judgment, order, decree, ruling or charge in effect preventing the consummation of the transactions contemplated by this Agreement.
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(c)
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Due Diligence
. The reasonably satisfactory completion of a due diligence review related to the GGC subsidiaries and GGC’s ownership of Global Oro and Global Plata.
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(d)
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Closing Documents
. GGC and the GGC Subsidiaries shall have delivered or caused to be delivered to Amarant on or prior to the Closing Date, in form and substance satisfactory to Amarant:
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(i)
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good and sufficient instruments of sale, transfer, assignment and conveyance in form satisfactory to Amarant, selling, transferring, assigning and conveying to Amarant valid title to the Global Oro Interest and the Global Plata Interest, each free of any Liens;
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(ii)
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the executed Global Oro Amended Operating Agreement and the Global Oro member resolutions approving the Global Oro Amended Operating Agreement,
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(iii)
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the executed Global Plata Amended Operating Agreement and the Global Plata member resolutions approving the Global Plata Amended Operating Agreement,
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(iv)
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the resolutions of GGC’s board of directors approving the transactions contemplated by this Agreement, and
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(v)
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a letter from Ted Urquhart stating that upon Closing he resigns from his position as a representante of GGV.
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(a)
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Representations, Warranties and Covenants
. (i) The representations and warranties of Amarant contained in this Agreement shall have been true and correct in all material respects as of the date of this Agreement and shall be true and correct in all material respects as of the Closing Date, except for such failures to be true and correct as, individually or in the aggregate, would not have a material adverse effect on Amarant. (ii) The covenants and agreements contained in this Agreement to be performed or complied with by Amarant on or before the Closing shall have been performed or complied with in all material respects.
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(b)
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No Injunction
. There shall not be any injunction, judgment, order, decree, ruling or charge in effect preventing the consummation of the transactions contemplated by this Agreement
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(c)
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Due Diligence.
The reasonably satisfactory completion of a due diligence review related to Amarant.
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(d)
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Closing Documents
. Amarant shall have delivered or caused to be delivered to GGC on or prior to the Closing Date, in form and substance satisfactory to GGC:
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(i)
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a written consent (and any amendments thereto) from Juan Jose Quijano Fernandez and Juan Jose Quijano Claro extending to December 31, 2012 the production arrangement on the Pureo Property upon payment of $1,000,000 by December 15, 2011.
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