CHARGE OVER SHARES
THIS DEED is dated February 3, 1997
AND MADE BETWEEN:
(1) GLOBAL GOLD CORPORATION, a Delaware Corporation whose registered office is
000 Xxxx 00xx Xxxxxx, Xxxxx 0X, Xxx Xxxx, New York 10038, U.S.A. (the
"Chargor"); and
IN FAVOUR OF
(2) FIRST DYNASTY MINES LTD. whose registered office is at Xxxxxxx Xxxxxx,
#00-00 Xxxxxxxx Xxxxx, Xxxxxxxxx 039 192 ("FDM").
WITNESSES as follows:
1 Definitions and Interpretation
1.1 In this Charge unless the context otherwise requires:
"Borrowed Money" means amounts advances by FDM to Global Gold Armenia
Limited ("Global Armenia") pursuant to a convertible debenture issued
dated 1997 by Global Armenia and guaranteed by the charger (the
"Debenture") together without interest thereon.
"Charged Property" means the property and rights of the Chargor which are
the subject of any security created or purported to be created by this
Charge
"Derivative Assets" means all stocks shares warrants or other securities
rights dividends interest or other property whether of a capital or income
nature accruing offered issued or deriving at any time by way of dividend
bonus redemption exchange purchase substitution conversion consolidation
subdivision preference option or otherwise attributable to any of the
Shares and Securities or any Derivative Assets previously described
"Encumbrance" means any mortgage charge pledge lien assignment
hypothecation security interest title retention preferential right or
trust arrangement or other security arrangement or agreement or any right
conferring a priority of payment
"Enforcement Event" means any event set out in the Debenture.
"Secured Liabilities" means all monies obligations and liabilities
whatsoever whether for principal interest or otherwise in whatever
currency which may now or at any time
- 1 -
in the future be due owing or incurred by the Chargor to FDM under the
terms of the Debenture and/or this Charge whether actual or contingent and
whether alone severally or jointly as principal guarantor surety or
otherwise and in whatever name or style and whether on any current or
other account or in any other manner whatsoever.
"Shares and Securities" means all stocks shares and other securities:
(i) listed in the Schedule for which the stock or share
certificates or other documents of title have been deposited
by the Chargor with FDM; or
(ii) for which the stock or share certificates or other documents
of title have been deposited by the Chargor with FDM or its
agents or nominees or are held to the order of FDM.
in each case whether held in the Cayman Islands or elsewhere and
irrespective of whether in any such case the deposit was made or the
certificates or other documents were received by FDM or its agents or
nominees for the purposes of creating security, safe custody, collection
or otherwise.
1.2 Reference to Clauses and Schedules are to the clauses and schedules to
this Charge.
1.3 Clause headings are inserted for ease of reference only and are not to
affect the interpretation of this Charge.
1.4 Except to the extent the context otherwise requires any reference in this
document to "this Charge" and any other document referred to in it
includes any document expressed to be supplemental to or collateral with
or which is entered into pursuant to or in accordance herewith or
therewith and shall be deemed to include any instruments amending varying
supplementing novating or replacing the terms of any such documents from
time to time.
1.5 References to a person are to be construed to include corporations firms
companies partnerships individuals associations states and administrative
and governmental and other entities whether or not a separate legal
entity.
1,6 References to any person are to be construed to include references to that
person's successors transferees and assigns whether direct or indirect.
1.7 References to any statutory provision are to be construed as references to
that statutory provision as amended supplemented re-enacted or replaced
from time to time (whether before or after the date of this Charge) and
are to include any orders regulations instruments or other subordinated
legislation made under or deriving validity from that statutory provision.
- 2 -
1.8 The words "other" and "otherwise" are not to be construed ejusdem generis
with any foregoing words where a wider construction is possible.
1.9 The words "including" and "in particular" are to be construed as being by
way of illustration or emphasis only and are not to be construed as, nor
shall they take effect as, limiting the generality of any foregoing words.
2 Covenant to Pay
2.1 The Chargor covenants with FDM that it will pay and discharge the Secured
Liabilities when due to FDM.
2.2 The Chargor shall pay interest to the date of payment or discharge
(notwithstanding any demand or any judgment obtained by FDM or the
liquidation or administration of or any arrangement or composition with
creditors by the Chargor) at the rate or rates applicable under the
agreements or arrangements giving rise to the relevant obligations or
liabilities. Such interest shall be compounded in the event of it not
being punctually paid in accordance with the usual practice of banks in
the Cayman Islands but without prejudice to the right of FDM to require
payment of such interest.
2.3 All sums payable by the Chargor under this Charge shall be paid without
any set-off counterclaim withholding or deduction whatsoever unless
required by law in which even the Chargor will simultaneously with making
the relevant payment under this Charge pay to FDM such additional amount
as will result in the receipt by FDM of the full amount which would
otherwise have been receivable and will supply FDM promptly with evidence
satisfactory to FDM that the Chargor has accounted to the relevant
authority for the sum withheld or deducted.
3 Charge
3.1 The Chargor as beneficial owner (with the intent that the security so
constituted shall extend to all beneficial interests of the Chargor in the
Charged Property and to any proceeds of sale or other realisation of the
Charged Property or any part of it) and as continuing security for the
payment and discharge of the Secured Liabilities charges the Shares and
Securities and the Derivative Assets to FDM.
4 Deposit of Title Documents and Further Assurance
4.1 The Chargor shall on the execution of this Charge deposit with FDM (at its
office in Vancouver or as otherwise directed by FDM) all stock or share
certificates or other documents of title to or representing the Charged
Property together with such duly executed transfers or assignments with
the name of the transferee date and consideration left blank as FDM may
require to enable FDM to vest the same in FDM or its nominees or, after
the occurrence of an Enforcement Event, any purchaser to the intent that
FDM
- 3 -
may at any time after the occurrence of an Enforcement Event without
notice present them for registration.
4.2 The Chargor shall subject to clause 4.3 upon the accrual offer issue or
receipt of any Derivative Assets deliver or pay to FDM or procure the
delivery or payment to FDM of all such Derivative Assets or the stock or
share certificates or other documents of title to or representing them
together with such duly executed transfers or assignments with the name of
the transferee date and consideration left blank as FDM may require to
enable FDM to vest the same in FDM or its nominees or, after the
occurrence of an Enforcement Event, any purchaser to the intent that FDM
may at any time after the occurrence of an Enforcement Event without
notice present them for registration.
4.3 For so long as no Enforcement Event has occurred the Chargor will receive
all dividends interest and other income deriving from and received by it
in respect of the Charged Property for the account of the Chargor and will
promptly pay such dividends interest and other income to the Chargor on
receipt.
4.4 Without prejudice to anything else contained in this Charge the Chargor
shall at any time at the request of FDM but at the cost of the Chargor
promptly sign seal execute deliver and do all deeds instruments transfers
renunciations proxies notices documents acts and things in such form as
FDM may from time to time require for perfecting or protecting the
security over the Charged Property or any part of it or for facilitating
its realisation.
5 Representations Warranties and Covenants by the Chargor
5.1 The Chargor represents and warrants to FDM and undertakes that:
(a) it is and will be the sole absolute and beneficial owner and the
registered holder of all of the Charged Property free from
Encumbrances and will not create or attempt to create or permit to
arise or subsist any Encumbrance (other than this Charge) on or over
the Charged Property;
(b) it has not sold or otherwise disposed of or agreed to sell or
otherwise dispose of or granted or agreed to grant any option in
respect of all or any of its right title and interest in and to the
Charged Property or any part of it and will not do any of the
foregoing at any time during the subsistence of this Charge;
(c) except as disclosed in writing approved by FDM the Shares and
Securities are and will at all times be fully paid and there are and
will be no monies or liabilities outstanding in respect of any of
the Charged Property;
(d) the Charged Property has been and will at all times be duly
authorised and validly issued and is and will at all times be free
from any restriction on transfer or rights of pre-emption;
- 4 -
(e) it has and will at all times have the necessary power to enter into
and perform its obligations under this Charge;
(f) this Charge constitutes its legal valid binding and enforceable
obligations and is a security over all and every part of the Charged
Property effective in accordance with its terms;
(g) this Charge does not and will not conflict with or result in any
breach or constitute a default under any agreement instrument or
obligation to which the Chargor is a party or by which it is bound;
(h) all necessary authorisations and consents to enable or entitle it to
enter into this Charge have been obtained and will remain in full
force and effect at all times during the subsistence of the security
constituted by this Charge; and
(i) it will procure due compliance with its obligations in this Charge
by all nominees in whose name or names any Charged Property is
registered or holding any certificates or other documents of title
relating to any Charged Property.
5.2 The Chargor undertakes to FDM to provide a copy of any report accounts
circular or notice received in respect of or in connection with any of the
Charged Property to FDM forthwith upon the receipt by the Chargor.
5.3 The Chargor shall promptly pay all calls or other payments due and will
discharge all other obligations in respect of any part of the Charged
Property and if the Chargor fails to fulfil any such obligations FDM may,
but shall not be obliged to, make such payments on behalf of the Chargor
in which event any sums so paid shall be reimbursed on demand by the
Chargor to FDM together with interest as provided for in the Debenture
from the date of payment by FDM until repayment whether before or after
judgment.
5.4 The Chargor shall indemnify FDM on a full indemnity basis against calls or
other payments relating to the Charged Property and any defect in the
Chargor's title to the Charged Property and against all actions
proceedings losses costs claims and demands suffered or incurred in
respect of anything done or omitted in any way relating the the Charged
Property or in the exercise or purported exercise of the powers contained
in this Charge by FDM.
5.5 The Chargor shall not do or cause or permit anything to be done which may
adversely affect the security created or purported to be created by this
Charge or which is a variation or abrogation of the rights attaching to or
conferred by all or any part of the Charged Property without the prior
written consent of FDM and shall take such action as FDM may in its
discretion direct in relation to any proposed compromise arrangement
reorganisation conversion repayment offer or scheme of arrangement
-5-
affecting all or any part of the Charged Property.
6 Rights of FDM
6.1 FDM may at its discretion (in the name of the Chargor or otherwise
subject to clause 4.3 after the occurrence of any Enforcement Event and
without any consent or authority on the part of the Chargor) exercise any
voting rights and any powers or rights which may be exercised by the
person or persons in whose name or names the Charged Property is
registered.
6.2 Following the occurrence of an Enforcement Event all dividends interest
and other income forming part of the Charged Property shall, unless
otherwise agreed between FDM and the Chargor, be paid without any set-off
or deduction whatsoever to an interest bearing suspense account and
retained by FDM until applied as hereinafter provided as part of the
Charged Property and any such monies which may be received by the Chargor
shall pending such payment be held in trust for FDM.
6.3 The powers conferred on FDM by this Charge are solely to protect its
interests in the Charged Property and shall not impose any duty on it to
exercise any such powers. FDM shall not have any duty as to any Charged
Property and shall incur no liability for:
(a) ascertaining or taking action in respect of any calls instalments
conversions exchanges maturities tenders or other matters in
relation to any Charged Property or the nature or sufficiency of any
payment whether or not FDM has or is deemed to have knowledge of
such matters; or
(b) taking any necessary steps to preserve rights against prior parties
or any other rights pertaining to any Charged Property.
6.4 FDM shall not be liable to account as mortgagee in possession in respect
of all or any of the Charged Property and shall not be liable for any loss
upon realisation or for any failure to present any interest coupon or any
bond or stock drawn for repayment or for any failure to pay any call or
installments or to accept any offer or to notify the Chargor of any such
matter or for any failure to ensure that the correct amounts (if any) are
paid or received in respect of the Charged Property or for any negligence
or default by its nominees or agents or for any other loss of any nature
whatsoever in connection with the Charged Property.
7. Enforcement
7.1 If any Enforcement Event shall occur and be continuing then:
(a) FDM shall cease to be under any further financial commitment to the
Chargor and may at any time thereafter declare the Secured
Liabilities (or such of them as FDM may specify) immediately due and
payable forthwith on
-6-
demand; and
(b) the security constituted by this Charge shall become immediately
enforceable and the power of sale shall become immediately
exercisable.
8 Power of Sale
8.1 At any time after the security constituted by this Charge has become
enforceable FDM may without further notice to the Chargor exercise the
power to sell or otherwise dispose of the whole or any part of the Charged
Property, in such manner and on such terms and for such consideration
(whether payable immediately or by instalments) as FDM shall in its
absolute discretion think fit and without liability for loss whatsoever,
and may (without prejudice to any right which it may have under any other
provision of this Charge) treat such part of the Charged property as
consists of money as if it were the proceeds of such a sale or other
disposal. FDM shall after the payment of any claims having priority to the
security created by this Charge apply the proceeds without prejudice to
the right of FDM to recover any shortfall from the Chargor in paying the
costs of sale or other disposal and in or towards the discharge of the
Secured Liabilities in such order as FDM in its absolute discretion thinks
fit and the surplus (if any) of such proceeds shall be paid to the person
or persons entitled to it including without limitation the Chargor.
9 Protection of Third Parties
9.1 No purchaser mortgagee or other person dealing with FDM shall be concerned
to enquire whether the Secured Liabilities have become payable or whether
any power which it is purporting to exercise has become exercisable or
whether any money is due under this Charge or as to the application of any
money paid raised or borrowed or as to the propriety or regularity of
any sale by or other dealing with FDM.
10 Power of Attorney
10.1 The Chargor by way of security irrevocably appoints FDM to be the attorney
of the Chargor (with full powers of substitution and delegation) for the
Chargor and in its name or otherwise and on its behalf and as its act and
deed to sign seal execute deliver protect and do all deeds instruments
transfers renunciations proxies notices documents acts and things which
the Chargor may or ought to do under the covenants and provisions
contained in this Charge and generally in its name and on its behalf to
exercise all or any of the powers authorities and discretions conferred by
or pursuant to this Charge on FDM and to execute and deliver and otherwise
protect any deed assurance agreement instrument or act which it may deem
proper in the exercise of all or any of the powers authorities or
discretions conferred on FDM pursuant to this Charge.
10.2 The Chargor ratifies and confirms and agrees to ratify and confirm
anything such
-7-
attorney shall lawfully and properly do or purport to do by virtue of
clause 10.1 and all money expended by any such attorney shall be deemed to
be expenses incurred by FDM under this Charge.
10.3 The Chargor undertakes to procure that all registered holders from time to
time of any of the Charged Property shall forthwith grant FDM a power of
attorney on the terms set out in clause 10.1 in respect of such Charged
Property.
11 Discharge of Security
11.1 The security constituted by this Charge shall be continuing and shall not
be considered as satisfied or discharged by any intermediate payment or
settlement of the whole or any part of the Secured Liabilities or any
other matter or thing whatsoever including the insolvency liquidation or
administration of the Chargor and shall be binding until all the Secured
Liabilities have been unconditionally and irrevocably paid and discharged
in full.
11.2 Upon the irrevocable payment or discharge in full of the Secured
Liabilities FDM will or will procure that its nominees will (as the case
may be) at the request and cost of the Chargor retransfer to the Chargor
all FDM's right title and interest in or to the Charged Property freed
from this Charge.
11.3 Upon any release of the Charged Property FDM or its nominees (as the case
may be) shall not be bound to release or transfer to the Chargor the
identical stocks shares or securities which were deposited with or
transferred to it or them and the Chargor shall accept shares and
securities of the same class and denomination or such other securities as
then represent the Charged Property.
12 Avoidance of Payments
12.1 No assurance security or payment which may be avoided or adjusted under
any enactment relating to bankruptcy or insolvency and no release
settlement or discharge given or made by FDM on the faith of any such
assurance security or payment shall prejudice or affect the right of FDM
to recover from the Chargor (including the right to recover any monies
which it may have been compelled by due process of law to refund and any
costs payable by it pursuant to otherwise incurred in connection with such
process) or to enforce the security created by or pursuant to this Charge
to the full extent of the Secured Liabilities.
13 Communications
13.1 Every notice demand or other communication under this Charge shall be in
writing and may be delivered personally or by letter telex or facsimile
transmission despatched by FDM to the Chargor to its address specified at
the head of this Charge or to the
-8-
following numbers:
Chargor
c/o Global Gold Corporation
000 Xxxx 00xx Xxxxxx
Attn: Xx. Xxxxx Xxxxxxxxx, President
Fax no: (000) 000-0000
or to such other address and or telex number or facsimile number as may be
notified in accordance with this Clause by the relevant party to the other
party for such purpose.
13.2 Every notice demand or other communication shall be deemed to have been
received (if sent by post) 5 working days after being posted prepaid
airmail (if posted from or to an address outside the Cayman Islands) and
(if delivered personally or despatched by telex subject to receiving the
correct telex answerback or by facsimile transmission) at the time of
delivery or despatch if during normal business hours in the place of
intended receipt on a working day in the place of intended receipt and
otherwise at the opening of business in that place on the next succeeding
such working day.
14 Currency Indemnity
14.1 If under any applicable law or regulation or pursuant to a judgment or
order being made or registered against the Chargor or the liquidation of
the Chargor or without limitation for any other reason any payment under
or in connection with this Charge is made or falls to be satisfied in a
currency (the "payment currency") other than the currency in which such
payment is expressed to be due under or in connection with this Charge
(the "contractual currency") then to the extent that the amount of such
payment actually received by FDM when converted into the contractual
currency at the rate of exchange falls short of the amount due under or in
connection with this Charge the Chargor as a separate and independent
obligation shall indemnify and hold harmless FDM against the amount of
such shortfall. For the purposes of this Clause "rate of exchange" means
the rate at which FDM is able on or about the date of such payment to
purchase, in accordance with its normal practice, the contractual currency
with the payment currency and shall take into account (and the Chargor
shall be liable for) any premium and other costs of exchange including any
taxes or duties incurred by reason of any such exchange.
15 Miscellaneous
15.1 No delay or omission on the party of FDM in exercising any right or remedy
under this Charge shall impair that right or remedy or operate as or be
taken to be a waiver of it nor shall any single partial or defective
exercise of any such right or remedy preclude
-9-
any other or further exercise under this Charge or that or any other right
or remedy.
15.2 FDM's rights under this Charge are cumulative and not exclusive of any
rights provided by law and may be exercised from time to time and as often
as FDM deems expedient.
15.3 Any waiver by FDM of any terms of this Charge or any consent or approval
given by FDM under it shall only be effective if given in writing and then
only for the purpose and upon the terms and conditions if any on which it
is given.
15.4 The security constituted by this Charge shall be in addition to and shall
not be prejudiced determined or affected by nor operate so as in any way
to determine prejudice or affect any Encumbrance which FDM xxx now or at
any time in the future hold for or in respect of the Secured Liabilities
or any part of them and shall not be prejudiced by time or indulgence
granted to any person or any abstention by FDM in perfecting or enforcing
any remedies securities guarantees or rights it may now or in the future
have from or against the Chargor or any other person or any waiver release
variation act omission forbearance unenforceability indulgence or
invalidity of any such remedy security guarantee or right.
15.5 If at any time any one or more of the provisions of this Charge is or
becomes illegal invalid or unenforceable in any respect under any law of
any jurisdiction neither the legality validity or enforceability of the
remaining provisions of this Charge nor the legality validity or
enforceability of such provision under the law of any other jurisdiction
shall be in any way affected or impaired as a result.
15.6 Any statement certificate or determination of FDM as to the Secured
Liabilities or without limitation any other matter provided for in this
Charge shall be in the absence of manifest error be conclusive and binding
on the Chargor.
15.7 The parties agree that if requested by FDM United States UCC fiduciary
statements will be filed in such jurisdictions as required by it, such
fiduciary statements to be signed solely by Chargor.
16 Law and Jurisdiction
16.1 This Charge is governed by and shall be construed in accordance with the
laws of the Cayman Islands.
-10-
IN WITNESS whereof the Chargor and FDM have executed and delivered this Charge
as a Deed the day and year first before written.
Executed as a Deed by GLOBAL )
GOLD CORPORATION )
by: )
)
)
/s/ Xxxxxx Gain )
Director )
------------------------------ )
Witnessed in the presence of:
/s/ [ILLEGIBLE]
Executed as a Deed by FIRST )
DYNASTY MINES LTD. )
by: )
)
)
______________________________ )
Witnessed in the presence of: )
Consented to by Global Gold Armenia Limited.
Dated: 1997
-11-
SCHEDULE
Number of shares Description of shares
100,000 Ordinary Shares in the
capital of Global Gold
Armenia Limited, a Cayman
Islands exempted, company
of a par value of US$0.01
each registered in the
name of Global Gold Corporation
-12-
