DEED OF VARIATION
 TO A PUT AND CALL OPTION AGREEMENT
DATED 29 JUNE 2010
 
DATE:   24 August 2010

(1) Grafton Resource Investments Ltd
c/o dms Corporate Services Ltd
P O Box 1344, DMS House
20 Genesis Close
Grand Cayman, KY1-1108 Cayman Islands

(2) Universal Gold Holdings (Cayman) Ltd
C/- Maples Corporate Finance Services Ltd
PO Box 309, Ugland House
Grand Cayman, KY1-1104 Cayman Islands
 
BACKGROUND
 
 
A.
On 29 June 2010, Grafton Resource Investments Ltd, (“Grafton”) and Universal
Gold Holdings (Cayman) Ltd (“UNIVERSAL”) entered into a Put and Call Option
Agreement (the “June Agreement”) in respect of shares in Kolar Gold plc (an
English company No 3404980) (“Kolar”).  Terms defined in the June Agreement
shall apply where used in this Deed.

 
B.
Pursuant to the June Agreement, UNIVERSAL has paid the sum of £680,000 by way of
subscription monies to Kolar and Grafton has in accordance with the June
Agreement procured that UNIVERSAL has had issued to it by Kolar:

 
(a)
a Loan Note Certificate No 4 (“Loan Note”) in the sum of £680,000 pursuant to
the CLN Instrument and giving UNIVERSAL as the registered holder thereof the
right to convert into 2,720,000 “B” Ordinary shares of £0.07 each in Kolar at
£0.25 per share; and

 
(b)
a Warrant Certificate No 4 (“Warrant”) giving UNIVERSAL as the registered holder
thereof the right to subscribe for 2,720,000 “B” Ordinary shares of £0.07 each
in Kolar at £0.30 per share. 

 
C.
Grafton confirms that it remains the holder of the 7,160,000 Existing Shares in
Kolar.

 
D.
Grafton and UNIVERSAL wish to cancel and substitute the provisions of clauses 2
(Call Option), 3 (Put Option) and 4 (Failure to Exercise) of the June Agreement
with the provisions set out in this Deed.

 
E.
Grafton anticipates that it will prior to the end of the Call Option Period
referred to below subscribe for or otherwise acquire rights on a fully paid
basis to between 6,840,000 and 10,840,000 additional B Ordinary Shares in Kolar
(“Additional Kolar Share Rights”).

 
F.
Grafton has agreed to grant UNIVERSAL put and call options over the Existing
Shares and such Additional Kolar Share Rights as may be acquired by Grafton
prior to the exercise of the Call Option referred to below for a consideration
based on the valuation criteria set out or referred to in Schedules 1 and 2 to
this Agreement and subject to the terms and conditions set out below.

 
 
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AGREED TERMS:

In consideration for the mutual undertakings and commitments given by each party
to the other hereunder it is hereby agreed between Grafton and UNIVERSAL as
follows:

1.
VARIATION

The June Agreement is hereby varied by this Deed by the deletion of Clauses 2, 3
and 4 of the June Agreement and the substitution therefore of clauses 2, 3 and 4
(respectively) of this Deed.

2.
CALL OPTION

 
a)
Grafton hereby grants to UNIVERSAL a 90 day call option (Call Option) to acquire
Grafton's entire shareholding and share interests in Kolar comprising:

 
 
i)
its Existing Shares; and

 
 
ii)
such Additional Kolar Share Rights as Grafton shall have acquired

 
Provided that the aggregate of the Existing Shares and Additional Kolar Share
Rights (together “Total Kolar Shares”) shall not be more than 16,535,000 Total
Kolar Shares (“Maximum Commitment”);
 
b)
the 90 day Call Option period shall commence on 16 August 2010 and UNIVERSAL
acknowledges that 90 days shall be sufficient time for it to conduct due
diligence in relation to Kolar and to decide whether or not it wishes to
exercise its call option;

 
c)
Where the Total Kolar Shares comprise only the Existing Shares the exercise
price under the Call Option shall comprise:

 
(i) the issue by UNIVERSAL to Grafton of 15,107,600 new shares in UNIVERSAL
credited as fully paid and ranking pari passu with the existing shares in
UNIVERSAL (the "Shares Consideration"); plus

(ii) the legally binding commitment for UNIVERSAL to issue to Grafton over an 18
month period from the date of exercise of the Call Option, warrants to subscribe
for:
 
 
(a)
3,233,026 new shares in UNIVERSAL, such shares to be issued at $0.75 per share;
and

 
(b)
3,233,026 new shares in UNIVERSAL, such shares to be issued at $0.90 per share

all such shares in UNIVERSAL ranking pari passu with all other existing shares
in UNIVERSAL (together the “Warrants Consideration”). The Shares Consideration
and the Warrants  Consideration being together referred to as the “UNIVERSAL
Consideration”.
 
d)
Where the Total Kolar Shares available is equal to the Maximum Commitment the
exercise price under the Call Option shall comprise:

(i) the issue by UNIVERSAL to Grafton of 34,888,850 new shares in UNIVERSAL by
way of the Shares Consideration; plus

(ii) the legally binding commitment for UNIVERSAL to issue to Grafton over an 18
month period from the date of exercise of the Call Option, warrants to subscribe
for:
 
 
(a)
7,466,214 new shares in UNIVERSAL, such shares to be issued at $0.75 per share;
and

 
(b)
7,466,214 new shares in UNIVERSAL, such shares to be issued at $0.90 per share

 
 
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by way of the Warrants Consideration.

e).
if and to the extent that the Total Kolar Shares available are more  than the
Existing Shares but less than the Maximum Commitment:

(i)
the number of shares in UNIVERSAL to be issued by way of the Shares
Consideration shall be ascertained in proportion to the number of Total Kolar
Shares available on the basis of 2.11:1 (namely 2.11 UNIVERSAL Shares shall be
issued for each Kolar Share) and

(ii)
the number of warrants in respect of UNIVERSAL shares to be issued by way of the
Warrants Consideration shall be the amount equal to 0.428% of the Shares
Consideration pursuant to sub- clause (i) above and shall be divided equally
between warrants at $0.75 per UNIVERSAL Share and warrants at $0.90 per
UNIVERSAL Share.

f)
for the avoidance of doubt if the Total Kolar Shares available to Grafton
exceeds the Maximum Commitment any such excess Kolar Shares shall not be subject
to the terms of this Agreement save that Grafton hereby grants to UNIVERSAL a
right of first refusal to be granted a further 90 day Call Option Agreement over
such excess Kolar Shares.  UNIVERSAL’s right of first refusal shall expire on
the Completion Date (as defined below) unless UNIVERSAL has given Grafton prior
written notice during the period from its date of exercise of the Call Option
(under this Deed) and prior to the Completion Date, that it wishes to exercise
such right.  As soon as practicable following Grafton’s receipt of said notice,
the parties hereto shall enter into a further 90 day call option agreement
commencing on the Completion Date in respect of such excess Kolar Shares for an
exercise price calculated on the same basis as set out in clause 2(e) and
Schedules 1 & 2 of this Deed.

g)
UCMC shall exercise its Call Option by giving written notice to Grafton during
the Call Option period, which notice shall be irrevocable (without Grafton’s
consent) and shall contain UGM’s undertaking to:

i)
file a registration statement with the SEC  in respect of the new shares
comprising the Shares Consideration and also comprising the Warrants
Consideration arising from the exercise by Grafton of its rights under the
Warrants Consideration in each case within 75 days of issue; and

ii)
use its best endeavours to procure that the SEC ensure registration of each such
tranche of  shares in UNIVERSAL to which Grafton is entitled as above, takes
place not more than 180 days after initial filing. and

iii)
seek, with the co-operation of Grafton, a listing for the entire issued share
capital of UNIVERSAL on AIM, TSX or other equivalent market within 6 months;

and completion of the transfer of the Total Kolar Shares by Grafton and issue of
the UNIVERSAL Consideration by UNIVERSAL will take place within 30 days of the
exercise of the Call Option by UNIVERSAL (the “Completion Date”).
 
3.
PUT OPTION

a.
Grafton hereby also grants to UGCM a 90 day put option (“Put Option”)
exercisable only during and no later than the end of  the Call Option period
referred to in paragraph 2 (b) above to require Grafton to acquire from
UNIVERSAL its entire rights and interest in the Loan Note and Warrant (and any
New Kolar Shares into which they may at such date have been converted) for an
aggregate price of £680,000 such purchase to be completed within 30 days after
the exercise of the Put Option

 
 
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b.
The price payable by Grafton to UNIVERSAL under the Put Option shall be
satisfied by Grafton in cash (in Sterling or US Dollars at the prevailing spot
conversion rate) as Grafton shall decide against the transfer to Grafton by
UNIVERSAL as the registered holder of both the Loan Note and Warrant(or shares
as aforesaid).

4.
FAILURE TO EXERCISE

 
In the event UNIVERSAL does not exercise either its Call Option or its Put
Option within the option period, both such options will lapse and in such
circumstances Grafton shall retain the Existing Shares and any Additional Kolar
Share Rights and UNIVERSAL shall retain the Loan Note and Warrant and/or  New
Kolar Shares as the case may be.
 
5.
GOVERNING LAW

 
This Deed shall be governed by English law and Grafton and UNIVERSAL agree to
the non-excusive jurisdiction of the English courts.
 
6.
CONFIDENTIALITY

 
The parties undertake to each other to keep confidential the existence of this
Deed and UNIVERSAL undertakes that it will not issue any announcement or press
release in relation to or containing information relating to Kolar, nor shall it
disclose to any third party any information relating to Kolar made available to
it during the course of its due diligence, and that it will use the information
available to it in relation to Kolar only for the purposes contemplated by this
Deed,
 
SAVE THAT either party may disclose any information that it is otherwise
required to keep confidential under this clause 6:
 
i.
to such of its professional advisers, consultants and employees or officers as
are reasonably necessary to advise on this Deed, or to facilitate the exercise
of the Option, provided that the disclosing party procures that the people to
whom the information is disclosed keep it confidential as if they were that
party; or

 
ii.
with the written consent of the other party; or

 
iii.
to the extent that the disclosure is required by law or by an regulatory body,
tax authority or securities exchange,

but shall use reasonable endeavours to consult the other party and give them a
reasonable time to respond and take into account any reasonable requests such
other party may have in relation to the disclosure before making it.
 
7.
FURTHER ASSURANCE

 
At all times after the date of this Deed the parties shall, at their own
expense, execute all such documents and do all such acts and things as may
reasonably be required for the purpose of giving full effect to this Deed.
 
 
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8.
ASSIGNMENT

 
All rights under this Deed are personal to the parties and may not be assigned
by either party without the prior written consent of the other party.

9.
WHOLE AGREEMENT

 
This Deed, and any documents referred to in it, constitute the whole agreement
between the parties and supersede any previous arrangement, understanding or
agreement between them relating to the subject matter they cover.
 
10.
VARIATION AND WAIVER

a.
A variation of this Deed shall be in writing and signed by or on behalf of each
party.

b.
Any waiver of any right under this Deed is only effective if it is in writing
and signed by the waiving or consenting party and it applies only in the
circumstances for which it is given, and shall not prevent the party who has
given the waiver from subsequently relying on the provision it has waived.

c.
Except as expressly stated, no failure to exercise or delay in exercising any
right or remedy provided under this Deed or by law constitutes a waiver of such
right or remedy or shall prevent any future exercise in whole or in part
thereof.

d.
No single or partial exercise of any right or remedy under this Deed shall
preclude or restrict the further exercise of any such right or remedy.

e.
Unless specifically provided otherwise, rights arising under this Deed are
cumulative and do not exclude rights provided by law.

 
11.
COSTS

UNIVERSAL shall pay on demand, an amount equal to fifty percent (50%) of all
reasonable legal costs and expenses (together with any value added tax on them)
that Grafton incurs in connection with the negotiation and preparation,
amendment, extension, alteration of the June Agreement, this Deed and any
further 90 day call option agreement (described in clause 2(f)) including
without limitation such legal costs and expenses incurred by Grafton in
effecting any transfers of shares in Kolar to UNIVERSAL in connection
thereto.  Except as provided in this Deed each party shall bear its own legal,
accountancy and other costs, charges and expenses connected with the
negotiation, preparation and implementation of this Deed and any other agreement
incidental to or referred to in this Deed.
 
12.
NOTICES

 
a.
A notice given under this Deed shall be in writing and shall be sent for the
attention of the person, and to the address given above or to such other
address, fax number or person as the relevant party may notify to the other
party)  and shall be delivered personally or sent by fax  or sent by pre-paid
first-class post or recorded delivery.

 
b.
A notice is deemed to have been received:

 
i.
if delivered personally, at the time of delivery; or

ii.
in the case of fax, at the time of transmission; or

iii.
in the case of pre-paid first class post or recorded delivery, 48 hours from the
date of posting;

 
AND if deemed receipt under the previous paragraphs of this clause 12.b) is not
within business hours (meaning 9.00 am to 5.30 pm Monday to Friday on a day that
is not a Business Day), when business next starts in the place of receipt. To
prove service, it is sufficient to prove that the notice was transmitted by fax
to the fax number of the party or, in the case of post, that the envelope
containing the notice was properly addressed and posted.
 
 
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13.
SEVERANCE

 
a.
If any provision of this Deed (or part of a provision) is found by any court or
administrative body of competent jurisdiction to be invalid, unenforceable or
illegal, the other provisions shall remain in force.

b.
If any invalid, unenforceable or illegal provision would be valid, enforceable
or legal if some part of it were deleted, the provision shall apply with
whatever modification is necessary to give effect to the commercial intention of
the parties.

 
14.
THIRD PARTY RIGHTS

 No term of this Deed shall be enforceable by a third party (being any
person   other than the parties and their permitted successors and assignees).
 
15. 
COUNTERPARTS

This Deed may be executed in any number of counterparts, each of which is an
original and which together have the same effect as if each party had signed the
same document.
 
 
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Executed and delivered as a deed    )   For and on behalf of Grafton   )  
Resource Investments Ltd in   ) /s/ David Hutchins the presence of:    )        
in the presence of :  )         Signature of witness: /s/ Matthew Lavers  
Name:  Matthew Lavers   Address:  11 Albermarle St.   Occupation:  Financial
Analyst  

 
 
 

Executed and delivered as a deed    )   For and on behalf of  )   Universal Gold
Holdings  )  /s/ David Cather, Director Cayman) Ltd in  )   the presence of:  
 )         in the presence of :  )         Signature of witness: /s/ Miles Leahy
    Name:  Miles Leahy     Address:  1920 Grosvenor St.     Occupation:  Analyst
   

 
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