DEED OF VARIATION TO A PUT AND CALL OPTION AGREEMENT DATED 29 JUNE 2010
DATED
29 JUNE 2010
DATE: 24 August
2010
(1)
Grafton Resource Investments Ltd
▇/▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇ ▇ ▇▇▇
▇▇▇▇, DMS House
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇-▇▇▇▇ Cayman Islands
(2)
Universal Gold Holdings (Cayman) Ltd
C/-
▇▇▇▇▇▇ Corporate Finance Services Ltd
▇▇ ▇▇▇
▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇-▇▇▇▇ Cayman Islands
BACKGROUND
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A.
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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 ▇▇▇▇▇ Gold plc (an English company No 3404980) (“Kolar”). Terms
defined in the June Agreement shall apply where used in this
Deed.
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B.
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Pursuant
to the June Agreement, UNIVERSAL has paid the sum of £680,000 by way of
subscription monies to ▇▇▇▇▇ and Grafton has in accordance with the June
Agreement procured that UNIVERSAL has had issued to it by
▇▇▇▇▇:
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(a)
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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 ▇▇▇▇▇ at £0.25 per share;
and
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(b)
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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 ▇▇▇▇▇ at £0.30 per
share.
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▇.
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▇▇▇▇▇▇▇
confirms that it remains the holder of the 7,160,000 Existing Shares in
▇▇▇▇▇.
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▇.
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▇▇▇▇▇▇▇
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.
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▇.
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▇▇▇▇▇▇▇
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 ▇▇▇▇▇ Share
Rights”).
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▇.
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▇▇▇▇▇▇▇
has agreed to grant UNIVERSAL put and call options over the Existing
Shares and such Additional ▇▇▇▇▇ 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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1
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:
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1.
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VARIATION
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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.
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2.
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CALL
OPTION
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a)
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Grafton
hereby grants to UNIVERSAL a 90 day call option (Call Option) to acquire
Grafton's entire shareholding and share interests in ▇▇▇▇▇
comprising:
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i)
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its
Existing Shares; and
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ii)
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such
Additional ▇▇▇▇▇ Share Rights as Grafton shall have
acquired
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Provided
that the aggregate of the Existing Shares and Additional Kolar Share Rights
(together “Total ▇▇▇▇▇
Shares”) shall not be more than 16,535,000 Total ▇▇▇▇▇ Shares (“Maximum
Commitment”);
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b)
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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 ▇▇▇▇▇ and to decide whether or not it wishes
to exercise its call option;
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c)
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Where
the Total ▇▇▇▇▇ Shares comprise only the Existing Shares the exercise
price under the Call Option shall
comprise:
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(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:
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(a)
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3,233,026
new shares in UNIVERSAL, such shares to be issued at $0.75 per share;
and
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(b)
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3,233,026
new shares in UNIVERSAL, such shares to be issued at $0.90 per
share
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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”.
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d)
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Where
the Total ▇▇▇▇▇ Shares available is equal to the Maximum Commitment the
exercise price under the Call Option shall
comprise:
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(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:
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(a)
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7,466,214
new shares in UNIVERSAL, such shares to be issued at $0.75 per share;
and
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(b)
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7,466,214
new shares in UNIVERSAL, such shares to be issued at $0.90 per
share
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2
by way of
the Warrants
Consideration.
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e).
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if
and to the extent that the Total ▇▇▇▇▇ Shares available are
more than the Existing Shares but less than the Maximum
Commitment:
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(i)
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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
▇▇▇▇▇ Shares available on the basis of 2.11:1 (namely 2.11 UNIVERSAL
Shares shall be issued for each ▇▇▇▇▇ Share)
and
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(ii)
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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.
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f)
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for
the avoidance of doubt if the Total ▇▇▇▇▇ Shares available to Grafton
exceeds the Maximum Commitment any such excess ▇▇▇▇▇ 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 ▇▇▇▇▇ 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 ▇▇▇▇▇ Shares for an exercise price calculated on the same basis as
set out in clause 2(e) and Schedules 1 & 2 of this
Deed.
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g)
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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:
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i)
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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
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ii)
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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
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iii)
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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;
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and
completion of the transfer of the Total ▇▇▇▇▇ 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”).
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3.
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PUT
OPTION
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▇.
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▇▇▇▇▇▇▇
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 ▇▇▇▇▇ 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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3
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b.
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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).
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4.
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FAILURE TO
EXERCISE
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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 ▇▇▇▇▇
Shares as the case may be.
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5.
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GOVERNING
LAW
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This Deed
shall be governed by English law and Grafton and UNIVERSAL agree to the
non-excusive jurisdiction of the English courts.
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6.
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CONFIDENTIALITY
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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 ▇▇▇▇▇, nor shall it
disclose to any third party any information relating to ▇▇▇▇▇ made available to
it during the course of its due diligence, and that it will use the information
available to it in relation to ▇▇▇▇▇ 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:
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i.
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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
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ii.
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with
the written consent of the other party;
or
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iii.
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to
the extent that the disclosure is required by law or by an regulatory
body, tax authority or securities
exchange,
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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.
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FURTHER
ASSURANCE
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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.
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ASSIGNMENT
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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.
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9.
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WHOLE
AGREEMENT
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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.
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VARIATION
AND WAIVER
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a.
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A
variation of this Deed shall be in writing and signed by or on behalf of
each party.
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b.
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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.
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c.
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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.
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d.
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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.
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e.
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Unless
specifically provided otherwise, rights arising under this Deed are
cumulative and do not exclude rights provided by
law.
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COSTS
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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 ▇▇▇▇▇ 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.
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NOTICES
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a.
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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.
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b.
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A
notice is deemed to have been
received:
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i.
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if
delivered personally, at the time of delivery;
or
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ii.
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in
the case of fax, at the time of transmission;
or
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iii.
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in
the case of pre-paid first class post or recorded delivery, 48 hours from
the date of posting;
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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.
5
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SEVERANCE
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a.
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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.
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b.
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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.
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THIRD
PARTY RIGHTS
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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).
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15.
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COUNTERPARTS
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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.
6
| Executed and delivered as a deed | ) | |
| For and on behalf of Grafton | ) | |
| Resource Investments Ltd in | ) | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ |
| the presence of: | ) | |
| in the presence of : | ) | |
| Signature of witness: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
| Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
| Address: ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. | ||
| Occupation: Financial Analyst | ||
| Executed and delivered as a deed | ) | |
| For and on behalf of | ) | |
| Universal Gold Holdings | ) | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇, Director |
| Cayman) Ltd in | ) | |
| the presence of: | ) | |
| in the presence of : | ) | |
| Signature of witness: /s/ Miles ▇▇▇▇▇ | ||
| Name: Miles ▇▇▇▇▇ | ||
| Address: 1920 Grosvenor St. | ||
| Occupation: Analyst |
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