SECURITY
        AGREEMENT

       

      THIS
        SECURITY AGREEMENT
        (this
“Agreement”),
        is
        made as of March ___, 2005, by and between Goldspring, Inc., a Florida
        corporation, with its principal executive offices at 8585 East Hartford Drive,
        Suite 400, Scottsdale, AZ 85255 (the “Company”),
        and
        the secured parties identified on Schedule
        A
        hereto
        (each, a “Secured
        Party”
        and
        collectively, the “Secured
        Parties”).
        (The
        Company and the Secured Parties may hereinafter be referred to singularly
        as a
“party,”
        and
        collectively as the “parties.”).

       

      W
        I T N E S S E T H:

       

      WHEREAS,
        concurrently herewith, the Company is entering into a Settlement Agreement
        (the
“Settlement
        Agreement”)
        with
        the Secured Parties, pursuant to which, the Company is issuing the Secured
        Parties 12% Convertible Debentures of the Company in the aggregate principal
        amount of $6,885,184 (the “Convertible
        Debenture”);
        and

       

      WHEREAS,
        in
        order to induce the Secured Parties to enter into the Settlement Agreement,
        the
        Company has agreed to execute and deliver to the Secured Parties this Agreement
        for the benefit of the Secured Parties, and to grant to it a security interest
        in certain property of the Company to secure the prompt payment, performance
        and
        discharge in full of all of Company’s obligations under the Settlement Agreement
        and Convertible Debenture, and certain other Agreements contemporaneously
        entered into by the parties including, a Subscription Agreement, Escrow
        Agreement, Put Agreement and Promissory Note (collectively, the “Transaction
        Documents”).

       

      NOW,
        THEREFORE,
        in
        consideration of the agreements herein contained and for other good and valuable
        consideration, the receipt and sufficiency of which is hereby acknowledged,
        the
        parties hereto hereby agree as follows:

       

      1. Certain
        Definitions.
        As used
        in this Agreement, the following terms shall have the meanings set forth
        in this
        Section 1. Terms used but not otherwise defined in this Agreement that are
        defined in Article 9 of the UCC (such as “general
        intangibles”
        and
“proceeds”)
        shall
        have the respective meanings given such terms in Article 9 of the
        UCC.

       

      (a) “Collateral”
        means
        the collateral in which the Secured Parties are granted a first priority
        security interest by this Agreement and which shall include the following,
        whether presently owned or existing or hereafter acquired or coming into
        existence, and all additions and accessions thereto and all substitutions
        and
        replacements thereof, and all proceeds, products and accounts thereof,
        including, without limitation, all proceeds from the sale or transfer of
        the
        Collateral and of insurance covering the same and of any tort claims in
        connection therewith:

       

      (i) all
        Goods
        of the Company, including, without limitation, all machinery, equipment,
        computers, motor vehicles, trucks, tanks, boats, ships, appliances, furniture,
        special and general tools, fixtures, test and quality control devices and
        other
        equipment of every kind and nature and wherever situated, together with all
        documents of title and documents representing the same, all additions and
        accessions thereto, replacements therefor, all parts therefor, and all
        substitutes for any of the foregoing and all other items used and useful
        in
        connection with the Company’s businesses and all improvements thereto
        (collectively, the “Equipment”);
        and

       

      
        
          
          

        

        
           

          
            

          

        

        
          
          

        

      

      (ii) All
        Inventory of the Company; and

       

      (iii)  All
        of
        the Company’s contract rights and general intangibles, including, without
        limitation, all partnership interests, stock or other securities, licenses,
        distribution and other agreements, computer software development rights,
        leases,
        franchises, customer lists, quality control procedures, grants and rights,
        goodwill, trademarks, service marks, trade styles, trade names, patents,
        patent
        applications, copyrights, deposit accounts, and income tax refunds
        (collectively, the “General
        Intangibles”);
        and

       

      (iv)  All
        Receivables of the Company including all insurance proceeds, and rights to
        refunds or indemnification whatsoever owing, together with all instruments,
        all
        documents of title representing any of the foregoing, all rights in any
        merchandising, goods, equipment, motor vehicles and trucks which any of the
        same
        may represent, and all right, title, security and guaranties with respect
        to
        each Receivable, including any right of stoppage in transit; and

       

      (v)  All
        of
        the Company’s documents, instruments and chattel paper, files, records, books of
        account, business papers, computer programs and the products and proceeds
        of all
        of the foregoing Collateral set forth in clauses (i)-(iv) above.

       

      (b) “Obligations”
        means
        all of the Company’s obligations under this Agreement, and the other Transaction
        Documents, in each case, whether now or hereafter existing, voluntary or
        involuntary, direct or indirect, absolute or contingent, liquidated or
        unliquidated, whether or not jointly owed with others, and whether or not
        from
        time to time decreased or extinguished and later decreased, created or incurred,
        and all or any portion of such obligations or liabilities that are paid,
        to the
        extent all or any part of such payment is avoided or recovered directly or
        indirectly from the Secured Parties as a preference, fraudulent transfer
        or
        otherwise as such obligations may be amended, supplemented, converted, extended
        or modified from time to time.

       

      (c) “UCC”
        means
        the Uniform Commercial Code, as currently in effect in the State of New
        York.

       

      2. Grant
        of Security Interest.
        As an
        inducement for the Secured Parties to purchase the Convertible Debenture
        and
        Shares, and to secure the complete and timely payment, performance and discharge
        in full, as the case may be, of all of the Obligations, except for Permitted
        Liens (as hereinafter defined), the Company hereby, unconditionally and
        irrevocably, pledges, grants and hypothecates to the Secured Parties, a
        continuing first priority security interest in, a continuing lien upon, an
        unqualified right to possession and disposition of and a right of set-off
        against, in each case to the fullest extent permitted by law, all of the
        Company's right, title and interest of whatsoever kind and nature in and
        to the
        Collateral (the “Security
        Interest”).

       

      (a) The
        Security Interest granted herein shall be pari
        passu
        to the
        extent of the Obligations due to any Secured Party and the Obligations due
        to
        all other Secured Parties that are signatories hereto. Each Secured Party
        shall
        have the benefit of all forms of security granted in connection with this
        Agreement, and all proceeds thereof, to the same extent of the Secured Party’s
pari
        passu interest
        with all other secured parties that are signatories hereto. In
        the
        event that the Company materially breaches any of the terms and provisions
        of
        this Security Agreement, or should any Event of Default (as that term is
        defined
        herein) occur, the respective positions of each Secured Party with respect
        to
        the Collateral shall be in accordance with its respective participations
        therein.

       

      
        
          
          

        

        
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      3. Representations,
        Warranties, Covenants and Agreements of the Company.
        The
        Company represents and warrants to, and covenants and agrees with, the Secured
        Parties as follows:

       

      (a) The
        Company has the requisite corporate power and authority to enter into this
        Agreement and otherwise to carry out its obligations thereunder. The execution,
        delivery and performance by the Company of this Agreement and the filings
        contemplated herein have been duly authorized by all necessary action on
        the
        part of the Company and no further action is required by the Company. This
        Agreement constitutes a legal, valid and binding obligation of the Company
        enforceable in accordance with its terms, except as enforceability may be
        limited by bankruptcy, insolvency, reorganization, moratorium or similar
        laws
        affecting the enforcement of creditor’s rights generally.

       

      (b) The
        Company represents and warrants that it has no place of business or offices
        where its respective books of account and records are kept (other than
        temporarily at the offices of its attorneys or accountants), except as set
        forth
        on Schedule
        B
        attached
        hereto;

       

      (c) Except
        as
        to those liens existing as of the date hereof that were disclosed to the
        Secured
        Parties by the Company and are set forth on the attached Schedule
        C
        (the
“Permitted
        Liens”),
        the
        Company is the sole owner of the Collateral (except for non-exclusive licenses
        granted by the Company in the ordinary course of business), free and clear
        of
        any liens, security interests, encumbrances, rights or claims, and is fully
        authorized to grant the Security Interest in and to pledge the Collateral.
        Except as to the Permitted Liens, there is not on file in any governmental
        or
        regulatory authority, agency or recording office an effective financing
        statement, security agreement, license or transfer or any notice of any of
        the
        foregoing (other than those that have been filed in favor of the Secured
        Parties
        pursuant to this Agreement) covering or affecting any of the Collateral.
        Except
        as to the Permitted Liens, so long as this Agreement shall be in effect,
        the
        Company shall not execute and shall not knowingly permit to be on file in
        any
        such office or agency any such financing statement or other document or
        instrument (except to the extent filed or recorded in favor of the Secured
        Parties pursuant to the terms of this Agreement).

       

      (d) No
        part
        of the Collateral has been judged invalid or unenforceable. No written claim
        has
        been received that any Collateral or the Company’s use of any Collateral
        violates the rights of any third party. There has been no adverse decision
        to
        the Company’s claim of ownership rights in or exclusive rights to use the
        Collateral in any jurisdiction or to the Company's right to keep and maintain
        such Collateral in full force and effect, and there is no proceeding involving
        said rights pending or, to the best knowledge of the Company, threatened
        before
        any court, judicial body, administrative or regulatory agency, arbitrator
        or
        other governmental authority. 

       

      
        
          
          

        

        
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      (e) The
        Company shall at all times maintain its books of account and records relating
        to
        the Collateral at its principal place of business and may not relocate such
        books of account and records unless it delivers to the Secured Parties at
        least
        30 days prior to such relocation (i) written notice of such relocation and
        the
        new location thereof (which must be within the United States) and
        (ii) evidence that appropriate financing statements and other necessary
        documents have been filed and recorded and other steps have been taken to
        perfect the Security Interest to create in favor of the Secured Parties valid,
        perfected and continuing liens in the Collateral. 

       

      (f) This
        Agreement creates in favor of the Secured Parties a valid first priority
        security interest in the Collateral securing the payment and performance
        of the
        Obligations and, upon making the filings described in the immediately following
        sentence, a perfected first priority security interest in such Collateral.
        Except for the filing of financing statements on Form-1 under the UCC with
        the
        jurisdictions indicated on Schedule
        B,
        attached hereto, no authorization or approval of or filing with or notice
        to any
        governmental authority or regulatory body is required either (i) for the
        grant
        by the Company of, or the effectiveness of, the Security Interest granted
        hereby
        or for the execution, delivery and performance of this Agreement by the Company
        or (ii) for the perfection of or exercise by the Secured Parties of its rights
        and remedies hereunder.

       

      (g) On
        the
        date of execution of this Agreement, the Company will deliver to the Purchaser’s
        Agent one or more executed UCC financing statements on Form-1 with respect
        to
        the Security Interest for filing with the jurisdictions indicated on
Schedule
        B,
        attached hereto and in such other jurisdictions as may be requested by the
        Secured Parties.

       

      (h) The
        execution, delivery and performance of this Agreement does not conflict with
        or
        cause a breach or default, or an event that with or without the passage of
        time
        or notice, shall constitute a breach or default, under any agreement to which
        the Company is a party or by the Company is bound. No consent (including,
        without limitation, from stockholders or creditors of the Company) is required
        for the Company to enter into and perform its obligations
        hereunder.

       

      (i) The
        Company shall at all times maintain the liens and Security Interest provided
        for
        hereunder as valid and perfected liens and security interests in the Collateral
        in favor of the Secured Parties until this Agreement and the Security Interest
        hereunder shall be terminated pursuant to Section 11. The Company hereby
        agrees
        to defend the same against any and all persons. The Company shall safeguard
        and
        protect all Collateral for the account of the Secured Parties. At the request
        of
        the Secured Parties, the Company will sign and deliver to the Secured Parties
        at
        any time, or from time to time, one or more financing statements pursuant
        to the
        UCC (or any other applicable statute) in form reasonably satisfactory to
        the
        Secured Parties and will pay the cost of filing the same in all public offices
        wherever filing is, or is deemed by the Secured Parties to be, necessary
        or
        desirable to effect the rights and obligations provided for herein. Without
        limiting the generality of the foregoing, the Company shall pay all fees,
        taxes
        and other amounts necessary to maintain the Collateral and the Security Interest
        hereunder, and the Company shall obtain and furnish to the Secured Parties
        from
        time to time, upon demand, such releases and/or subordinations of claims
        and
        liens which may be required to maintain the priority of the Security Interest
        hereunder. 

       

      
        
          
          

        

        
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      (j) The
        Company will not transfer, pledge, hypothecate, encumber, license (except
        for
        non-exclusive licenses granted by the Company in the ordinary course of
        business), sell (except for sales of inventory in the ordinary course of
        business) or otherwise dispose of any of the Collateral without the prior
        written consent of the Secured Parties.

       

      (k) The
        Company shall keep and preserve its Equipment, Inventory and other tangible
        Collateral in good condition, repair and order and shall not operate or locate
        any such Collateral (or cause to be operated or located) in any area excluded
        from insurance coverage.

       

      (l) The
        Company shall, within ten (10) days of obtaining knowledge thereof, advise
        the
        Secured Parties promptly, in sufficient detail, of any substantial change
        in the
        Collateral, and of the occurrence of any event which would have a material
        adverse effect on the value of the Collateral or on the Secured Parties'
        security interest therein.

       

      (m) The
        Company shall promptly execute and deliver to the Secured Parties such further
        deeds, mortgages, assignments, security agreements, financing statements
        or
        other instruments, documents, certificates and assurances and take such further
        action as the Secured Parties may from time to time request and may in its
        sole
        discretion deem necessary to perfect, protect or enforce its security interest
        in the Collateral.

       

      (n) The
        Company shall permit the Secured Parties and their representatives and agents
        to
        inspect the Collateral at any time, and to make copies of records pertaining
        to
        the Collateral as may be requested by the Secured Parties from time to
        time.

       

      (o) The
        Company will take all steps reasonably necessary to diligently pursue and
        seek
        to preserve, enforce and collect any rights, claims, causes of action and
        accounts receivable in respect of the Collateral.

       

      (p) The
        Company shall promptly notify the Secured Parties in sufficient detail upon
        becoming aware of any attachment, garnishment, execution or other legal process
        levied against any Collateral and of any other information received by the
        Company that may materially affect the value of the Collateral, the Security
        Interest or the rights and remedies of the Secured Parties
        hereunder.

       

      (q) All
        information heretofore, herein or hereafter supplied to the Secured Parties
        by
        or on behalf of the Company with respect to the Collateral is accurate and
        complete in all material respects as of the date furnished.

       

      2. Defaults.
        The
        following events shall be “Events
        of Default”:

       

      (a) A
        breach
        by the Company of its material obligations under the Transaction Documents
        (as
        defined herein) and failure to cure such breach for ten (10) days after receipt
        by the Company of notice of such breach from the Secured Parties;

       

      
        
          
          

        

        
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      (b) Any
        material misrepresentation or warranty of the Company in this Agreement shall
        prove to have been incorrect in any material respect when made; and

       

      (c) The
        failure by the Company to observe or perform any of its material obligations
        hereunder for ten (10) days after receipt by the Company of notice of such
        failure from the Secured Parties.

       

      5. Duty
        To Hold In Trust.
        Upon
        the occurrence of any Event of Default and at any time thereafter, the Company
        shall, upon receipt by it of any revenue, income or other sums subject to
        the
        Security Interest, whether payable pursuant to the Transaction Documents
        or
        otherwise, or of any check, draft, debenture, trade acceptance or other
        instrument evidencing an obligation to pay any such sum, hold the same in
        trust
        for the Secured Parties and shall forthwith endorse and transfer any such
        sums
        or instruments, or both, to the Secured Parties for application to the
        satisfaction of the Obligations.

       

      6. Rights
        and Remedies Upon Default.
        Upon
        occurrence of any Event of Default and at any time thereafter, the Secured
        Parties shall have the right to exercise all of the remedies conferred hereunder
        and under the Settlement Agreement and other Transaction Documents, and the
        Secured Parties shall have all the rights and remedies of a secured party
        under
        the UCC and/or any other applicable law (including the Uniform Commercial
        Code
        of any jurisdiction in which any Collateral is then located). Without
        limitation, the Secured Parties shall have the following rights and
        powers:

       

      (a) The
        Secured Parties shall have the right to take possession of the Collateral
        and,
        for that purpose, enter, with the aid and assistance of any person, any premises
        where the Collateral, or any part thereof, is or may be placed and remove
        the
        same, and the Company shall assemble the Collateral and make it available
        to the
        Secured Parties at places which the Secured Parties shall reasonably select,
        whether at the Company's premises or elsewhere, and make available to the
        Secured Parties, without rent, all of the Company’s respective premises and
        facilities for the purpose of the Secured Parties taking possession of, removing
        or putting the Collateral in saleable or disposable form.

       

      (b) The
        Secured Parties shall have the right to operate the business of the Company
        using the Collateral and shall have the right to assign, sell, lease or
        otherwise dispose of and deliver all or any part of the Collateral, at public
        or
        private sale or otherwise, either with or without special conditions or
        stipulations, for cash or on credit or for future delivery, in such parcel
        or
        parcels and at such time or times and at such place or places, and upon such
        terms and conditions as the Secured Parties may deem commercially reasonable,
        all without (except as shall be required by applicable statute and cannot
        be
        waived) advertisement or demand upon or notice to the Company or right of
        redemption of the Company, which are hereby expressly waived. Upon each such
        sale, lease, assignment or other transfer of Collateral, the Secured Parties
        may, unless prohibited by applicable law which cannot be waived, purchase
        all or
        any part of the Collateral being sold, free from and discharged of all trusts,
        claims, right of redemption and equities of the Company, which are hereby
        waived
        and released.

       

      
        
          
          

        

        
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      7. Applications
        of Proceeds.
        The
        proceeds of any such sale, lease or other disposition of the Collateral
        hereunder shall be applied first, to the expenses of retaking, holding, storing,
        processing and preparing for sale, selling, and the like (including, without
        limitation, any taxes, fees and other costs incurred in connection therewith)
        of
        the Collateral, to the reasonable attorneys' fees and expenses incurred by
        the
        Secured Parties in enforcing its rights hereunder and in connection with
        collecting, storing and disposing of the Collateral, and then to satisfaction
        of
        the Obligations, and to the payment of any other amounts required by applicable
        law, after which the Secured Parties shall pay to the Company any surplus
        proceeds. If, upon the sale, license or other disposition of the Collateral,
        the
        proceeds thereof are insufficient to pay all amounts to which the Secured
        Parties are legally entitled, the Company will be liable for the deficiency,
        together with interest thereon, at the rate of 18% per annum (the “Default
        Rate”),
        and
        the reasonable fees of any attorneys employed by the Secured Parties to collect
        such deficiency. To the extent permitted by applicable law, the Company waives
        all claims, damages and demands against the Secured Parties arising out of
        the
        repossession, removal, retention or sale of the Collateral, unless due to
        the
        gross negligence or willful misconduct of the Secured Parties.

       

      All
        ordinary costs and expenses incurred by any Secured Party in collection of
        the
        Obligations shall be borne exclusively by the Company including, without
        limitation, any costs, expenses, fees or disbursements incurred by outside
        agencies or attorneys retained by the Secured Party to effect collections
        of the
        Obligations or any collateral securing the Obligations. In such event, any
        money
        paid, any expenses, costs and attorneys fees paid or incurred in connection
        therewith or in enforcing, maintaining or preserving the rights of all Secured
        Parties under this Agreement shall be shared by all Secured Parties pro rata
        in
        accordance with their respective percentage of the Convertible Debenture.
        The
        provisions of this paragraph shall not apply to any suits, actions, proceedings
        or claims of the nature referred to herein or otherwise which are based upon
        or
        related to the repayment of, or the taking of security for, any loans and/or
        advances made by any Secured Party to the Company that do not arise under
        the
        Purchase Agreements or that are not participated in by all Secured Parties,
        and
        the party making such loans and/or advances shall be exclusively responsible
        for
        such suits, actions, proceedings or claims and the payment of all such expenses
        in connection therewith.

       

      8. Costs
        and Expenses.
        The
        Company agrees to pay all reasonable out-of-pocket fees, costs and expenses
        incurred in connection with any filing required hereunder, including without
        limitation, any financing statements, continuation statements, partial releases
        and/or termination statements related thereto or any expenses of any searches
        reasonably required by the Secured Parties. The Company shall also pay all
        other
        claims and charges which in the reasonable opinion of the Secured Parties
        might
        prejudice, imperil or otherwise affect the Collateral or the Security Interest
        therein. The Company will also, upon demand, pay to the Secured Parties the
        amount of any and all reasonable expenses, including the reasonable fees
        and
        expenses of its counsel and of any experts and agents, which the Secured
        Parties
        may incur in connection with (i) the enforcement of this Agreement, (ii)
        the
        custody or preservation of, or the sale of, collection from, or other
        realization upon, any of the Collateral, or (iii) the exercise or enforcement
        of
        any of the rights of the Secured Parties under the Settlement Agreement and
        other Transaction Documents. Until so paid, any fees payable hereunder shall
        be
        added to the principal amount of the Convertible Debenture and shall bear
        interest at the Default Rate.

       

      
        
          
          

        

        
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      9. Responsibility
        for Collateral.
        The
        Company assumes all liabilities and responsibility in connection with all
        Collateral, and the obligations of the Company hereunder or under the Settlement
        Agreement or other Transaction Documents shall in no way be affected or
        diminished by reason of the loss, destruction, damage or theft of any of
        the
        Collateral or its unavailability for any reason.

       

      10. Security
        Interest Absolute.
        All
        rights of the Secured Parties and all Obligations of the Company hereunder,
        shall be absolute and unconditional, irrespective of: (a) any lack of validity
        or enforceability of this Agreement, the Settlement Agreement, or any of
        the
        Transaction Documents, or any portion hereof or thereof; (b) any change in
        the
        time, manner or place of payment or performance of, or in any other term
        of, all
        or any of the Obligations, or any other amendment or waiver of or any consent
        to
        any departure from the Settlement Agreement, or other Transaction Documents;
        (c)
        any exchange, release or nonperfection of any of the Collateral, or any release
        or amendment or waiver of or consent to departure from any other collateral
        for,
        or any guaranty, or any other security, for all or any of the Obligations;
        (d)
        any action by the Secured Parties to obtain, adjust, settle and cancel in
        its
        sole discretion any insurance claims or matters made or arising in connection
        with the Collateral; or (e) any other circumstance which might otherwise
        constitute any legal or equitable defense available to the Company, or a
        discharge of all or any part of the Security Interest granted hereby. Until
        the
        Obligations shall have been paid and performed in full, the rights of the
        Secured Parties shall continue even if the Obligations are barred for any
        reason, including, without limitation, the running of the statute of limitations
        or bankruptcy. The Company expressly waives presentment, protest, notice
        of
        protest, demand, notice of nonpayment and demand for performance. In the
        event
        that at any time any transfer of any Collateral or any payment received by
        the
        Secured Parties hereunder shall be deemed by final order of a court of competent
        jurisdiction to have been a voidable preference or fraudulent conveyance
        under
        the bankruptcy or insolvency laws of the United States, or shall be deemed
        to be
        otherwise due to any party other than the Secured Parties, then, in any such
        event, the Company's obligations hereunder shall survive cancellation of
        this
        Agreement, and shall not be discharged or satisfied by any prior payment
        thereof
        and/or cancellation of this Agreement, but shall remain a valid and binding
        obligation enforceable in accordance with the terms and provisions hereof.
        The
        Company waives all right to require the Secured Parties to proceed against
        any
        other person or to apply any Collateral which the Secured Parties may hold
        at
        any time, or to marshal assets, or to pursue any other remedy. The Company
        waives any defense arising by reason of the application of the statute of
        limitations to any obligation secured hereby.

       

      11. Term
        of Agreement.
        This
        Agreement and the Security Interest shall terminate on the date on which
        all
        payments under the Convertible Debenture have been made in full by the Company
        and/or the date that the Secured Parties convert in full the Convertible
        Debenture into shares of the Company’s Common Stock. Upon such termination, the
        Secured Parties, at the request and at the expense of the Company, will join
        in
        executing any termination statement with respect to any financing statement
        executed and filed pursuant to this Agreement. 

       

      
        
          
          

        

        
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      12. Power
        of Attorney; Further Assurances.
        

       

      (a) The
        Company authorizes the Secured Parties upon five (5) business days prior
        notice,
        and does hereby make, constitute and appoint them, and their respective
        officers, agents, successors or assigns with full power of substitution,
        as the
        Company's true and lawful attorney-in-fact, with power, in its own name or
        in
        the name of the Company, to, after the occurrence and during the continuance
        of
        an Event of Default, (i) endorse any debentures, checks, drafts, money orders,
        or other instruments of payment (including payments payable under or in respect
        of any policy of insurance) in respect of the Collateral that may come into
        possession of the Secured Parties; (ii) to sign and endorse any UCC financing
        statement or any invoice, freight or express bill, bill of lading, storage
        or
        warehouse receipts, drafts against debtors, assignments, verifications and
        notices in connection with accounts, and other documents relating to the
        Collateral; (iii) to pay or discharge taxes, liens, security interests or
        other
        encumbrances at any time levied or placed on or threatened against the
        Collateral; (iv) to demand, collect, receipt for, compromise, settle and
        sue for
        monies due in respect of the Collateral; and (v) generally, to do, at the
        option
        of the Secured Parties, and at the Company's expense, at any time, or from
        time
        to time, all acts and things which the Secured Parties deem necessary to
        protect, preserve and realize upon the Collateral and the Security Interest
        granted therein in order to effect the intent of this Agreement, the Settlement
        Agreement, and any of the other Transaction Documents, all as fully and
        effectually as the Company might or could do; and the Company hereby ratifies
        all that said attorney shall lawfully do or cause to be done by virtue hereof.
        This power of attorney is coupled with an interest and shall be irrevocable
        for
        the term of this Agreement and thereafter as long as any of the Obligations
        shall be outstanding.

       

      (b) On
        a
        continuing basis, the Company will make, execute, acknowledge, deliver, file
        and
        record, as the case may be, in the proper filing and recording places in
        any
        jurisdiction, including, without limitation, the jurisdictions indicated
        on
Schedule
        B,
        attached hereto, all such instruments, and take all such action as may
        reasonably be deemed necessary or advisable, or as reasonably requested by
        the
        Secured Parties, to perfect the Security Interest granted hereunder and
        otherwise to carry out the intent and purposes of this Agreement, or for
        assuring and confirming to the Secured Parties the grant or perfection of
        a
        security interest in all the Collateral.

       

      (c) The
        Company hereby irrevocably appoints the Secured Parties as the Company's
        attorneys-in-fact, with full authority in the place and stead of the Company
        and
        in the name of the Company, from time to time at the discretion of the Secured
        Parties, to take any action and to execute any instrument which the Secured
        Parties may deem necessary or advisable to accomplish the purposes of this
        Agreement, including the filing, in their sole discretion, of one or more
        financing or continuation statements and amendments thereto, relative to
        any of
        the Collateral without the signature of the Company where permitted by
        law.

       

      13. Notices.
        Any
        notice or other communications required or permitted hereunder shall be deemed
        to be sufficient if contained in a written instrument delivered in person
        or
        duly sent by first class certified mail, postage prepaid, by reputable overnight
        courier or such other address as may hereafter be designated in writing by
        the
        addressee to the other parties:

      


      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      If
        to a
        Secured Party, to: 

      


      the
        address set forth beneath his or its name on Schedule
        A
        hereto


      


      with
        a
        copy to:

      


      Bondy
        & Schloss LLP

      60
        East
        42nd
        St.,
        37th
        Floor

      New
        York,
        NY 10165

      Attn:
        Jeffrey A. Rinde, Esq.

      Fax:
        (212) 972-1677

      


      If
        to the
        Company, to:

      


      GoldSpring,
        Inc.

      8585
        East
        Hartford Drive, Suite 400

      Scottsdale,
        AZ 85255

      Attn.:
        Robert T. Faber

      Fax:_______________________

      


      with
        a
        copy to:

      __________________________

      __________________________

      __________________________

      Attn.:_______________________

      Fax:_________________________

      


      or,
        in
        any case, at such other address or addresses as shall have been furnished
        in
        writing by such party to the other parties hereto. All such notices, requests,
        consents and other communications shall be deemed to have been received (a)
        in
        the case of personal delivery, on the date of such delivery, (b) in the case
        of
        mailing, on the fifth business day following the date of such mailing and
        (c) in
        the case of overnight courier, on the second next business day. 

      


      14. Other
        Security.
        To the
        extent that the Obligations are now or hereafter secured by property other
        than
        the Collateral or by the guarantee, endorsement or property of any other
        person,
        firm, corporation or other entity, then the Secured Parties shall have the
        right, in their sole discretion, to pursue, relinquish, subordinate, modify
        or
        take any other action with respect thereto, without in any way modifying
        or
        affecting any of the Secured Party’s rights and remedies hereunder.

      


      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      15. Miscellaneous.

      


      (a) No
        course
        of dealing between the Company and the Secured Parties, nor any failure to
        exercise, nor any delay in exercising, on the part of the Secured Parties,
        any
        right, power or privilege hereunder or under Settlement Agreement, or other
        Transaction Documents shall operate as a waiver thereof; nor shall any single
        or
        partial exercise of any right, power or privilege hereunder or thereunder
        preclude any other or further exercise thereof or the exercise of any other
        right, power or privilege.

      


      (b) All
        of
        the rights and remedies of the Secured Parties with respect to the Collateral,
        whether established hereby or by the Settlement Agreements or other Transaction
        Documents, or by any other agreements, instruments or documents or by law
        shall
        be cumulative and may be exercised singly or concurrently.

      


      (c) This
        Agreement constitutes the entire agreement of the parties with respect to
        the
        subject matter hereof and is intended to supersede all prior negotiations,
        understandings and agreements with respect thereto. Except as specifically
        set
        forth in this Agreement, no provision of this Agreement may be modified or
        amended except by a written agreement specifically referring to this Agreement
        and signed by the parties hereto.

      


      (d) In
        the
        event that any provision of this Agreement is held to be invalid, prohibited
        or
        unenforceable in any jurisdiction for any reason, unless such provision is
        narrowed by judicial construction, this Agreement shall, as to such
        jurisdiction, be construed as if such invalid, prohibited or unenforceable
        provision had been more narrowly drawn so as not to be invalid, prohibited
        or
        unenforceable. If, notwithstanding the foregoing, any provision of this
        Agreement is held to be invalid, prohibited or unenforceable in any
        jurisdiction, such provision, as to such jurisdiction, shall be ineffective
        to
        the extent of such invalidity, prohibition or unenforceability without
        invalidating the remaining portion of such provision or the other provisions
        of
        this Agreement and without affecting the validity or enforceability of such
        provision or the other provisions of this Agreement in any other
        jurisdiction.

      


      (e) No
        waiver
        of any breach or default or any right under this Agreement shall be considered
        valid unless in writing and signed by the party giving such waiver, and no
        such
        waiver shall be deemed a waiver of any subsequent breach or default or right,
        whether of the same or similar nature or otherwise.

      


      (f) This
        Agreement shall be binding upon and inure to the benefit of each party hereto
        and its successors and assigns.

      


      (g) Each
        party shall take such further action and execute and deliver such further
        documents as may be necessary or appropriate in order to carry out the
        provisions and purposes of this Agreement.

      


      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      (h) This
        Agreement shall be construed in accordance with the laws of the State of
        New
        York, except to the extent the validity, perfection or enforcement of a security
        interest hereunder in respect of any particular Collateral which are governed
        by
        a jurisdiction other than the State of New York in which case such law shall
        govern. Each of the parties hereto irrevocably submit to the exclusive
        jurisdiction of any New York State or United States Federal court sitting
        in New
        York county over any action or proceeding arising out of or relating to this
        Agreement, and the parties hereto hereby irrevocably agree that all claims
        in
        respect of such action or proceeding may be heard and determined in such
        New
        York State or Federal court. The parties hereto agree that a final judgment
        in
        any such action or proceeding shall be conclusive and may be enforced in
        other
        jurisdictions by suit on the judgment or in any other manner provided by
        law.
        The parties hereto further waive any objection to venue in the State of New
        York
        and any objection to an action or proceeding in the State of New York on
        the
        basis of forum non conveniens.

      


      (i) EACH
        PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRAIL
        OF ANY
        CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE
        SCOPE
        OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY DISPUTES THAT MAY
        BE
        FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF THIS AGREEMENT,
        INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
        CLAIMS
        AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES
        THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO A
        BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS WAIVER
        IN
        ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON
        THIS
        WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
        REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
        SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY TRIAL
        FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING THAT,
        NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER
        ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
        RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT
        OF A
        LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
        THE
        COURT.

      


      (j) This
        Agreement may be executed in any number of counterparts, each of which when
        so
        executed shall be deemed to be an original and, all of which taken together
        shall constitute one and the same Agreement. In the event that any signature
        is
        delivered by facsimile transmission, such signature shall create a valid
        binding
        obligation of the party executing (or on whose behalf such signature is
        executed) the same with the same force and effect as if such facsimile signature
        were the original thereof.

      


       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      COUNTERPART
        SIGNATURE PAGE TO SECURITY AGREEMENT, DATED MARCH ___,
        2005

      


      IN
        WITNESS WHEREOF,
        the
        parties have executed and delivered this Agreement as of the date first above
        written.

      GOLDSPRING,
        INC.

      


      By:____________________________    

      Name:

      Its:

      


      


      JOHN
        V.
        WINFIELD

      


      JOHN
        V. WINFIELD IRA-1

      


      By:____________________________  

      Name:

      Its:

      


      JOHN
        V. WINFIELD IRA-2

      


      By:____________________________   

      Name:

      Its:

      


      SANTA
        FE FINANCIAL CORP.

      


      By:____________________________   

      Name:

      Its:

      


      PORTSMOUTH
        SQUARE, INC.

      


      By:____________________________   

      Name:

      Its:

      


      THE
        INTERGROUP CORPORATION

      


      By:____________________________   

      Name:

      Its:

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      


       


      SCHEDULE
        A

       

      Secured
        Parties

       

      
        	 	
                 

                Names
                  and Addresses

              	 
	 	
                 

                John
                  V. Winfield

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

              	 
	 	
                 

                John
                  V. Winfield IRA-1

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	 
	 	
                 

                John
                  V. Winfield IRA-2

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	 
	 	
                 

                Santa
                  Fe Financial Corp.

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	 
	 	
                 

                Portsmouth
                  Square, Inc.

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	 
	 	
                 

                The
                  InterGroup Corporation

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	 


      

      


      


      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
        B

       

      Places
        of Business and Jurisdictions

       

                                                                                                                                               
60;                                
        8585
        East Hartford Drive, Suite 400

                                                                                                                
        Scottsdale, AZ 85255

       

       

       

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
        C

      


      Permitted
        Liens

      


       

      


       

      None