Document:

LOAN
        AGREEMENT

      

      AGREEMENT,
        dated as
        of the ____ day of July, 2005, by and between Goldspring,
        Inc.,
        a
        Florida corporation having an address at 8585 East Hartford Drive, Suite
        400,
        Scottsdale, AZ 85255 (the "Borrower")
        and
       (the
        "Lender").

      

      W I T N E S S E T&
#160;H:

      

      WHEREAS,
        the
        Borrower requires funding in the amount of One Million Two Hundred Thousand
        ($1,200,000) Dollars for the purposes hereinafter set forth; and

      

      WHEREAS,
        the
        Borrower is borrowing from the Lender____________Dollars,
        in consideration of which the Borrower is issuing to the Lender, a negotiable
        promissory note (the “Note”)
        at an
        original issue discount of thirty-three and one-third (33.3%) percent (i.e.,
        the
        amount to be paid shall be 33.3% less than the principal amount of the Note
        to
        be issued), and granting to the Lender a security interest in all of its
        assets;
        and 

      

      NOW,
        THEREFORE,
        it is
        agreed as follows:

      

      ARTICLE
        I

      

      COMMITMENT
        OF LENDER;

      BORROWING
        CONDITIONS

       

      
         

        1. Commitment.
          Subject
          to the terms and conditions of this Agreement, the Lender hereby agrees
          to make a two (2) year loan (the “Loan”)
          to the
          Borrower in the original principal amount of___________Dollars
          (the "Loan
          Amount").
          

      

      

      2.
        Promissory
        Note.

      

      (a)
        General.
        The Loan
        shall be evidenced by a Note, issued by the Borrower substantially in the
        form
        of Exhibit
        A
        annexed
        hereto, of even date herewith in the original principal amount of the Loan
        Amount. Principal and any accrued interest on the Note shall be payable in
        equal
        monthly installments on the 1st
        day of
        each month, commencing with the month immediately following the Closing Date
        (as
        defined in Article VII). 

      

      (b)
        Interest.
        The
        unpaid principal amount from time to time outstanding on the Note shall bear
        interest at the rate of fifteen (15%) percent per annum, computed on the
        basis
        of the actual number of days elapsed in a year of 360 days. Interest shall
        be
        payable as set forth in Section 2(a) of this Agreement.

      

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

      (c)
        Prepayment.
        Provided
        an Event of Default has not occurred, whether or not such Event of Default
        has
        been cured, the Borrower will have the option of prepaying the outstanding
        Loan
        Amount ("Optional
        Redemption"),
        in
        whole or in part, by paying to the Lender a sum of money equal to one hundred
        twenty percent (120%) of the Loan Amount to be redeemed, together with accrued
        but unpaid interest thereon and any and all other sums due, accrued or payable
        to the Lender arising under the Note, this Agreement or any other document
        through the Redemption Payment Date, as defined below (the "Redemption
        Amount").
        Borrower’s election to exercise its right to prepay must be by notice in writing
        (“Notice
        of Redemption”).
        The
        Notice of Redemption shall specify the date for such Optional Redemption
        (the
        "Redemption
        Payment Date"),
        which
        date shall be not less than thirty (30) business days after the date of the
        Notice of Redemption (the "Redemption
        Period").

      

      (d)
        Origination
        Fee.
        An
        origination fee of Thirty Three Thousand Five Hundred Dollars ($33,500) shall
        be
        deemed earned and payable upon the execution of this Agreement. 

      

      3. Additional
        Documentation.
        In
        addition to the execution and delivery of this Agreement and the Note, the
        Borrower shall deliver a Security Agreement to the Lender (or the Lender’s
        agent) on or prior to the Closing Date, and any other documents, instruments
        or
        agreements reasonably requested by the Lender in order to effectuate the
        purposes of this Agreement (together with this Agreement and the Note, all
        such
        documents and agreements to be hereinafter referred to as the "Loan
        Documents").

      

      ARTICLE
        II

      

      SECURITY

      

      All
        of
        the obligations of the Borrower under this Agreement and the Note shall be
        secured by a security interest in and to all assets of the Borrower
        (hereinafter, the “Collateral”).
        The
        Borrower hereby irrevocably authorizes the Lender at any time and from time
        to
        time to file in any Uniform Commercial Code jurisdiction any initial financing
        statements and amendments thereto that (a) indicate the Collateral regardless
        of
        whether any particular asset comprised in the Collateral falls within the
        scope
        of Article 9 of the Uniform Commercial Code of the State of New York as amended
        from time to time (“NYUCC”),
        or
        any other Uniform Commercial Code jurisdiction; and (b) contain any other
        information required by part 5 of Article 9 of the NYUCC for the sufficiency
        or
        filing office acceptance of any financing statement or amendment, including
        whether the Borrower is an organization, the type of organization and any
        organization identification number issued to the Borrower. The Borrower agrees
        to furnish any such information to the Lender promptly upon request. The
        Borrower also ratifies its authorization for the Lender to have filed in
        any
        Uniform Commercial Code jurisdiction any like initial financing statements
        or
        amendments thereto if filed prior to the date hereof with respect to the
        Collateral.

      

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      ARTICLE
        III

      

      REPRESENTATIONS
        AND WARRANTIES OF THE BORROWER 

      

      The
        Borrower makes the following representations and warranties:

      

      (a)
        Organization
        and Authorization.
        The
        Borrower is a corporation duly organized, validly existing and in good standing
        under the laws of the state of its formation, is duly authorized to transact
        business and is in good standing in every other jurisdiction where the failure
        to qualify to do business would have a material adverse effect upon the
        Borrower, and the Borrower is duly authorized and empowered to create, grant
        and
        issue the Note, and to execute and deliver this Agreement. The Borrower has
        the
        authority to own, lease and operate its assets, and to carry on its business
        as
        presently conducted. All action on the part of the Borrower requisite for
        the
        due creation, issuance and delivery of this Agreement and the Note has been
        duly
        and effectively taken. This Agreement, the Note, and the other Loan Documents
        upon the granting, issuance and delivery thereof, will be, valid, binding
        and
        enforceable obligations of the Borrower in accordance with their respective
        terms and compliance herewith will not violate any provision of law, the
        Certificate of Incorporation or By-Laws of the Borrower, or any agreement,
        judgment, order or decree to which the Borrower is a party or otherwise bound,
        subject to applicable bankruptcy, insolvency, or reorganization, moratorium
        or
        other similar laws relating to or affecting generally the enforcement of
        creditors’ rights. No approval or consent of any governmental agency or body of
        the United States or any state thereof or of any other entity or person is
        required as of the Closing Date for the legal and valid execution and delivery
        by the Borrower of this Agreement, the Note pursuant to this Agreement, or
        the
        performance of any obligation of the Borrower hereunder. 

      

      (b)
        Litigation.
        Except
        as set forth in Schedule
        III(b)
        hereto,
        there is no litigation, legal or administrative proceeding, investigation
        or
        other action of any nature pending or, to the knowledge of Borrower, threatened,
        against or affecting the Borrower and/or its subsidiaries which (i) involves
        the
        possibility of any judgments or liabilities aggregating more than Five Thousand
        ($5,000) Dollars not fully covered by insurance or (ii) which may materially
        and
        adversely affect the assets of the Borrower or the right of the Borrower
        to
        carry on its business as now conducted or as contemplated.

      

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      (c)
        Other
        Documents.
        The
        following further documents are being delivered herewith, all of which are
        true,
        complete and accurate:

      

      (i)
        Copies of the Certificate of Incorporation and By-Laws (and all amendments
        thereto) of the Borrower.

      

      (ii)
        Certificate of Good Standing of the Borrower to be supplied within thirty
        (30)
        days of the Closing Date.

      

      (d)
        Taxes.
        All tax
        returns of the Borrower and its subsidiaries, if any, which are shown to
        be due
        and payable thereon have been paid. The Borrower does not know of any ongoing
        tax audit, proposed tax deficiency, assessment, charge or levy against it,
        the
        payment of which is not adequately provided for on the books of the
        Borrower.

      

      (e)
        Full
        Disclosure.
        This
        Agreement and all of the exhibits or schedules attached hereto do not contain
        any statement that is false or misleading with respect to any material fact
        and
        do not omit to state a material fact necessary in order to make the statements
        therein not false or misleading.

      

      (f)
        Compliance
        with Instruments; etc.
        The
        Borrower is not (i) in default under any indenture, agreement or instrument
        to
        which it is a party or by which it is bound, (ii) in violation of its
        Certificate of Incorporation, By-Laws or of any applicable law, (iii) in
        default
        with respect to any order, writ, injunction or decree of any court,
        administrative agency or arbitrator, or (iv) in default under any order,
        license, regulation or demand of any government agency, which default or
        violation would materially and adversely affect the business, properties,
        condition (financial or otherwise) or business prospects of the
        Borrower.

      

      ARTICLE
        IV

      

      AFFIRMATIVE
        COVENANTS OF THE BORROWER

      

      Except
        as
        specifically set forth herein, so long as any part of the principal of or
        interest on the Note remains outstanding, without the prior written consent
        of
        the Lender:

      

      (a)
        Discharge
        Taxes and Indebtedness.
        The
        Borrower will pay and discharge, as they become due, all taxes, assessments,
        debts, claims and other governmental or non-governmental charges lawfully
        imposed upon or incurred by it or the properties and assets of the Borrower,
        except taxes, assessments, debts, claims and charges contested in good faith
        in
        appropriate proceedings for which the Borrower shall have set aside adequate
        reserves for the payment of such tax, assessment, debt, claim or charge.
        The
        Borrower shall provide the Lender, upon the Lender’s request, evidence of
        payment of such taxes, assessments, debts, claims and charges satisfactory
        to
        the Lender.

      

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      (b)
        Insurance.
        The
        Borrower shall maintain such insurance on its properties and assets with
        financially sound and responsible insurance companies, in such amounts as
        from
        time to time are reasonably required by the Lender. The Borrower shall (i)
        deliver to the Lender, upon its request, a detailed list of insurance then
        in
        effect, stating (A) the names of the insurance companies, (B) the amounts
        and
        rates of the insurance, (C) dates of expiration thereof and the properties
        and
        risks covered thereby; (ii) upon request, provide to the Lender copies of
        all
        insurance policies. 

      

      (c)
        Maintain
        Properties.
        The
        Borrower shall maintain in full force and effect its corporate existence,
        rights
        and franchises and all material terms of licenses and other rights to use
        licenses, trademarks, trade names, service marks, copyrights, patents or
        processes owned or possessed by it and necessary to the conduct of its business.
        The Borrower will maintain, preserve and keep all of its properties, equipment
        and assets in good repair, working order and condition, and make, or cause
        to be
        made, all necessary or appropriate repairs, renewals, replacements,
        substitutions, additions, betterments and improvements thereto.

      

      (d)
        Furnish
        Information.
        Promptly
        on request of the Lender, the Borrower will furnish such information as may
        reasonably be necessary to determine whether (i) the Borrower is complying
        with
        its covenants and agreements contained in this Agreement or (ii) an Event
        of
        Default (as hereunder defined) has occurred hereunder.

      

      (e)
        Maintain
        Office.
        The
        Borrower will maintain an office at the address set forth in this Agreement
        or
        at such other place as it shall determine upon not less than fifteen (15)
        days
        prior notice to the Lender, where notices, presentations and demands to or
        upon
        it with respect to this Agreement can be made.

      

      (f)
        Copies
        of Legal Process and Claims.
        The
        Borrower shall, within ten (10) days after receipt, forward to the Lender
        at its
        address set forth on the signature page hereto, a copy of any communication,
        notice, legal process or other notification relating to an uninsured claim
        or
        alleged claim against it in excess of Five Thousand ($5,000) Dollars and
        any
        proceedings relating to the replevin of any personal property, or to recover
        possession of any real property, leased or owned by the Borrower. The Borrower
        shall, within ten (10) days after receipt, forward to the Lender at its office,
        notice of any proceeding or hearing or threat thereof before any state or
        federal bureau, agency, commission, board or department which could materially
        affect the operation of its business. With respect to any legal process,
        proceeding or hearing, the return date of which is less than such ten (10)
        days,
        notice shall be given forthwith.

      

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

      (g)
        Additional
        Documentation.
        In
        furtherance of the transactions herein contemplated, the Borrower will execute
        and cause to be delivered to the Lender, and any other holder of the Note,
        such
        other certificates, documents, statements, agreements and opinions as may
        be
        reasonably requested by the Lender during the term of this
        Agreement.

      

      (h)
        Notice
        of Adverse Change.
        The
        Borrower shall promptly give notice to the Lender (but in any event within
        seven
        (7) business days) after becoming aware of the existence of any condition
        or
        event which constitutes, or the occurrence of, any of the
        following:

      

      (i)
        any
        Event of Default as hereunder defined; or

      

      (ii)
        the
        institution or threatening of institution of an action, suit or proceeding
        against the Borrower before any court, administrative agency or arbitrator,
        which, if adversely decided, could materially adversely affect the business,
        prospects, properties, financial condition or results of operations of the
        Borrower, whether or not arising in the ordinary course of
        business.

      

      Any
        notice given hereunder shall specify the nature and period of existence of
        the
        condition, event, information, development or circumstance, the anticipated
        effect thereof and what actions the Borrower has taken and/or proposes to
        take
        with respect thereto.

      

      (i)
        Use
        of Proceeds.
        The
        parties agree that the Borrower intends to use the proceeds of the Loan for
        general working capital purposes.

      

      (j)
        Compliance
        With Agreements; Compliance With Laws.
        The
        Borrower shall comply with the terms and conditions of all material agreements,
        commitments or instruments to which the Borrower is a party or by which it
        may
        be bound. The Borrower shall duly comply in all respects with any relevant
        laws,
        ordinances, rules and regulations of any foreign, federal, state or local
        government or any agency thereof, or any writ, order or decree, and conform
        to
        all valid requirements of governmental authorities relating to the conduct
        of
        its business, properties or assets, including, but not limited to, the rules
        and
        regulations of the Federal Communications Commission.

      

      (k)
        Negative
        Covenants of the Borrower.
        On and
        after the date hereof, and for so long as any part of the principal of or
        interest on the Note shall remain unpaid, without the prior written consent
        of
        the Lender:

      

      (i)
        No
        Distribution of Profits or Assets.
        The
        Borrower will not declare or pay any distribution, in cash or otherwise,
        of any
        of its profits or assets or redeem, return, purchase or otherwise acquire
        directly or indirectly any of its shares of common stock now or hereafter
        outstanding.

      

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

      (ii)
        No
        Indebtedness.
        Except
        for indebtedness owing to the Lender hereunder, the Borrower will not incur
        any
        indebtedness for borrowed money.

      

      (iii) No
        Guarantees.
        The
        Borrower will not assume, endorse or become liable for or guarantee the
        obligations of any corporation, partnership, limited liability company,
        individual or other entity excluding the endorsement of negotiable instruments
        for deposit or collection in the ordinary course of business.

      

      (iv)
        No
        Liens.
        The
        Borrower will not allow the mortgage or pledge of, or creation of a security
        interest in, any of its assets.

      

      (v)
        No
        Transfer of Assets.
        The
        Borrower will not (i) enter into any acquisition, merger, consolidation,
        reorganization, or recapitalization, or reclassify its capital stock, or
        liquidate, wind up, or dissolve itself (or suffer any liquidation or
        dissolution), (ii) convey, sell, assign, lease, transfer, or otherwise dispose
        of, in one transaction or a series of transactions, all or any substantial
        part
        of the business, property, or assets, whether now owned or hereafter acquired,
        of Borrower, or (iii) acquire by purchase or otherwise all or substantially
        all
        of the property, assets, stock, or other evidence of beneficial ownership
        of any
        person or entity.

      

      (vi)
        Extraordinary
        Transactions and Disposal of Assets.
        The
        Borrower will not enter into any transaction not in the ordinary and usual
        course of Borrower’s business, including the sale, lease, or other disposition
        of, moving, relocation, or transfer, whether by sale or otherwise, of any
        of
        Borrower’s properties or assets.

      

      ARTICLE
        V

      

      DEFAULTS
        AND REMEDIES

      
         

        
          1. Events
            of Default.
            Any one
            of the following events shall be considered an event
            of
            default ("Event
            of Default")
            as
            that term is used herein:

        

      

      

      (a)
        If
        the Borrower defaults in the payment of principal or interest on the Note
        after
        the same shall become payable as therein or herein set forth and such failure
        continues for a period of five (5) days; or

      

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

      (b)
        If
        default beyond five (5) days from notice provided in accordance herewith
        shall
        occur under the terms of the Note (other than a default covered by clause
        (a)
        above), of this Agreement or of any other agreement between the Borrower
        and the
        Lender, or in any other document or instrument executed and delivered in
        connection herewith, or under any agreement or instrument between the Borrower
        and any third party, which upon default results in an acceleration of the
        making
        of Borrower’s obligation to such third party or in the termination of such
        agreement or results in the Borrower becoming immediately liable for any
        amount
        to a third party in excess of $10,000; or

      

      (c)
        If
        any representation, warranty or covenant made by the Borrower herein proves
        to
        have been untrue in any material respect as of the Closing Date, or any
        information, statement, certificate or data furnished hereunder proves to
        have
        been untrue in any material respect as of the date as of which the facts
        therein
        set forth were stated or certified; or

      

      (d)
        Except for a default covered by clauses (a), (b), (c) and (e) hereof, if
        a
        default shall be made in the due observance or performance of any other
        covenant, affirmative or negative, or condition to be kept or performed by
        the
        Borrower contained in this Agreement; or

      

      (e)
        If
        the Borrower shall (i) make a general assignment for the benefit of creditors,
        or (ii) apply for or consent to the appointment of a receiver, trustee, or
        liquidator of the Borrower or of all or a substantial part of its assets,
        or
        (iii) be adjudicated a bankrupt, or (iv) file a voluntary petition in bankruptcy
        or a voluntary petition seeking reorganization or to effect a plan or other
        arrangement with creditors or file a petition or answer seeking to take
        advantage of any law (whether federal or state) relating to the relief of
        debtors. 

      

      (f)
        A
        default by the Borrower of a material term, covenant, warranty or undertaking
        of
        any other agreement to which the Borrower and Lender are parties, or the
        occurrence of a material event of default under any such other agreement
        which
        is not cured after any required notice and/or cure period. 

      

      2.Acceleration
        of Loan.
        During
        the continuation of any Event of Default specified in Article V, Section
        1, the
        Lender or any other holder of the Note may, by notice in writing delivered
        to
        the Borrower, declare the entire outstanding principal amount of the Note
        held
        by such Lender and the interest accrued thereon immediately due and payable,
        and
        the said principal and interest shall thereupon become and be immediately
        due
        and payable without presentment, demand, protest, notice of protest or other
        notice of dishonor of any kind, all of which are hereby expressly waived
        by the
        Borrower. Any principal and interest not paid when due and payable shall
        bear
        interest thereafter at the lesser of seventeen (17%) percent per month or
        the
        maximum rate permitted by applicable law.

      

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

      3.Enforcement
        of Rights.
        Upon
        the happening of any Event of Default specified in Article V, Section 1,
        the
        Lender or any other holder of the Note may proceed to protect and enforce
        its
        rights with respect to the Note and the other documents referred to herein
        either by suit in equity or action at law, and proceed to obtain judgment
        or any
        other relief whatsoever.

      

      4.Payment
        of Expenses.
        The
        Borrower shall pay all expenses, court costs and reasonable attorneys’ fees
        which may be incurred by the Lender or any other holder of the Note in
        connection with or arising out of any Event of Default hereunder upon a final
        nonappealable determination in Lender’s favor.

      

      ARTICLE
        VI

      

      CONDITIONS
        PRECEDENT

      

      1.Conditions
        of Lender’s Obligations.

      

      The
        obligations of the Lender hereunder shall be subject to the performance by
        the
        Borrower of all its agreements theretofore to be performed hereunder and
        to the
        following further conditions:

      

      (a)Officer's
        Certificate.
        The
        Lender shall have received a certificate or certificates of the Chief Executive
        Officer of the Borrower dated as of the Closing Date to the effect
        that:

      

      (i)
        The
        representations and warranties of Borrower herein and in any of the Loan
        Documents executed in connection with this Agreement are true and correct
        in all
        material respects at and as of each of the Closing Dates; and

      

      (ii)
        The
        Borrower has performed all agreements herein contained to be performed at
        or
        prior to the Closing Date.

      

      (b)Certified
        Copies of Resolutions.
        The
        Lender shall have received certified copies of resolutions of the board of
        directors of the Borrower, in form and substance satisfactory to the Lender
        and
        its counsel, with respect to the authorization and execution of this Agreement
        and the issuance of the Note.

      

      (c) Delivery
        of Instruments and Other Documents.
        The
        Lender shall have received in form and content satisfactory to Lender and
        its
        counsel, an originally executed Note and such other documents or instruments
        as
        the Lender may reasonably request.

      

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

      ARTICLE
        VII

      

      CLOSING

      

      The
        closing of the Agreement and the issuance of the Note to the Lender shall
        occur
        at the offices of Hodgson Russ, LLP, 60 East 42nd
        Street,
        New York, NY 10165 on July __, 2005 (the "Closing
        Date")
        or at
        such other time or place as the parties shall agree. 

      

      ARTICLE
        VIII

      

      Legal
        Fees

      

      The
        Borrower, upon closing, shall pay to Hodgson Russ LLP, an aggregate fee of
        $
        20,000.00 (“Legal
        Fees”)
        as
        reimbursement for services rendered to Lender in connection with this Agreement
        and the other documents related hereto. 

      

      Miscellaneous

      

      1.Representation
        to Survive Closing.
        All
        warranties, representations, covenants and agreements made by the Borrower
        herein shall survive the Closing.

      

      2.Notice.
        All
        notices, requests, demands and communications under or in respect hereof
        shall
        be deemed to have been duly given and made if in writing (including fax)
        if
        delivered by hand or left at or posted by pre-paid registered or certified
        mail
        (airmail if dispatched to a foreign county) to the party concerned at its
        address appearing below or sent by fax to the number and with copy as below
        indicated. Service shall be deemed to be effective: so far as delivery by
        hand
        is concerned when handed to the recipient or left at the recipient's address;
        by
        post three days after posting (seven days if sent to a foreign country);
        by fax
        on the same day as dispatch and receipt is confirmed. The said addresses
        and fax
        numbers shall continue in force until alternatives are notified and receipt
        of
        such notification has been acknowledged:

      

      If
        to
        Lender to the addresses set forth on the signature page of this
        Agreement.

      

      With
        copies to:

      

      Hodgson
        Russ LLP

      60
        East
        42nd
        Street,
        37th
        Floor

      New
        York,
        NY 10165

      Fax
        No:
        (212)972-1677

      Attn:
        Jeffrey A. Rinde, Esq.

      

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

      If
        to
        Borrower, to its address set forth at the beginning of this
        Agreement.

      

      With
        copies to:

      

      Tomlinson
        Zisko LLP

      Attn:
        Michael C. Doran, Esq.

      200
        Page
        Mill Road

      Palo
        Alto, CA 94306

      Fax:
        (650) 324-1808

       

      3.
        Binding
        upon Successors.
        All
        covenants and agreements herein contained by or on behalf of the Borrower
        shall
        bind its successors and assigns and shall inure to the benefit of the Lender
        and
        its successors and assigns; Borrower may not assign this Agreement or any
        rights
        or duties hereunder without Lender’s prior written consent and any prohibited
        assignment shall be absolutely void. Lender reserves the right to sell, assign,
        transfer, negotiate, or grant participation in all or any part of, or any
        interest in Lender’s rights and benefits hereunder; provided, that Lender shall,
        for informational purposes but not as a requirement, notify the Borrower
        of the
        identity of all other assignees or participants who have acquired an ownership
        interest in the Note, and upon conversion, in the equity of the Borrower
        as a
        result thereof. In connection with any such assignment or participation,
        Lender
        may disclose all documents and information which Lender now or hereafter
        may
        have relating to Borrower's business.

      

      4.Counterparts.
        This
        Agreement may be executed in counterparts at one time or at different times
        and,
        irrespective of the date of execution between the parties named herein, it
        shall
        be deemed executed as of the date first above written.

      

      5.
        Governing
        Law; Jurisdiction.
        This
        Agreement and the performance of the parties hereunder shall be construed
        and
        interpreted in accordance with the internal laws of the State of New York,
        wherein it was negotiated and executed, and the parties hereunder consent
        and
        agree that the state and federal courts which sit in the State of New York
        and
        the County of New York shall have exclusive jurisdiction with respect to
        all
        controversies and disputes arising hereunder.

      

      6.Severability.
        If any
        provision of this Agreement is held to be unenforceable for any reason, the
        remainder of this Agreement shall, nevertheless, remain in full force and
        effect.

      

      7.No
        Waiver of Rights.
        No
        course of dealing on the part of the Lender, nor any failure or delay on
        the
        part of the Lender with respect to the exercise of any right, power or privilege
        given or granted hereunder, the Note or any other document or instrument
        executed in connection herewith shall operate as a waiver thereof as to any
        future defaults, or any single or partial exercise by the Lender of any right,
        power or privilege granted or contained herein or therein shall preclude
        the
        Lender from later or further exercise of any right, power or privilege as
        to any
        future defaults. The rights and remedies of the Lender are cumulative and
        not
        exclusive of any other remedies under law.

      

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

      8.Construction.
        Unless
        the context of this Agreement clearly requires otherwise, references to the
        plural include the singular, references to the singular include the plural,
        the
        term "including" is not limiting, and the term "or" has, except where otherwise
        indicated, the inclusive meaning represented by the phrase "and/or." The
        words,
        "hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement
        refer to this Agreement as a whole and not to any particular provision of
        this
        Agreement. Article, Section, subsection, paragraph, clause, schedule, and
        exhibit references are to this Agreement unless otherwise specified. Any
        reference in this Agreement to this Agreement shall include all alterations,
        amendments, changes, extension, modifications, renewals, replacement,
        substitutions and supplements, thereto and thereof, as applicable.

      

      9.Indemnification.
        In the
        event the Lender is required to appear before, or participate in, or become
        involved with, any proceeding initiated by or brought with respect to the
        Borrower by any government or administrative agency, federal, state or local,
        investigating the business operations or activities of the Borrower, the
        Lender
        shall be reimbursed by the Borrower for all expenses incurred by it in
        connection therewith, including, but not limited to, attorney’s fees.
        Additionally, the Borrower will indemnify and hold harmless the Lender from
        each
        and every liability, loss, obligation, cost or expense which may be imposed
        or
        arising out of (x) any such proceeding, or (y) any of the transactions evidenced
        hereby, except for the Lender’s gross negligence or willful
        misconduct.

       

      10. Confidentiality.
        The
        Borrower agrees that it will not disclose, and will not include in any
        public announcement, the name of the Lender, unless expressly agreed to by
        the
        Lender unless and until disclosure is required by law or regulations, and
        then,
        only to the extent
        of
        such requirement.

      

      11.Term.
        This
        Agreement shall become effective upon execution and delivery hereof by Borrower
        and Lender and shall continue in full force and effect until all amount of
        principal and interest on the Note have been paid in full. 

      

      
        
           

        

        
          -12-

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF,
        the
        parties hereto have caused this Agreement to be duly 

      executed
        as of the day and year first above written.

      

      BORROWER:

      

      GOLDSPRING,
        INC.

       

      
        	
                By:
                  _____________________________

                Name:
                  

                Title:

              	 	 
	 	 	 
	
                LENDER

              	
                NOTE
                  PRINCIPAL

              	
                LOAN
                  AMOUNT AFTER ORIGINAL ISSUE DISCOUNT

              
	 	 	 
	 	 	 
	
                ______________________________

                (Signature)

                By:

              	 	 
	 	 	
                PAYMENT
                  AFTER DEDUCTION OF ORIGINATION FEE

              
	 	 	 

      

      

       

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

      EXHIBIT
        A

      

      

      PROMISSORY
        NOTE

      

      

      

       

      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

      Schedule
        III(b)

      
 

      LITIGATION

      

       

      
 

      
        
           

        

          -15-SECURITY
        AGREEMENT

       

      THIS
        SECURITY AGREEMENT
        (this
“Agreement”),
        is
        made as of July 15, 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 “Obligor”
        or
“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 loan agreement (the
        “Loan
        Agreement”)
        with
        the Secured Parties, pursuant to which the Secured Parties are lending to
        the
        Company an aggregate of One Million Two Hundred Thousand ($1,200,000) Dollars
        (the “Loan”),
        and
        the Company is issuing promissory notes to the Secured Parties in the aggregate
        original principal amount up to $1,200,000 (the “Note”),
        at an
        original issue discount of thirty-three and one-third (33.3%) percent (i.e.,
        the
        amount paid is 33.3% less than the principal amount of the Note issued);
        and

       

      WHEREAS,
        in order to induce the Secured Parties to make the Loan, 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 them a first priority security interest
        (subject only to an existing security interest the Company granted to Brockbank
        Trust (the “Brockbank
        Interest”)
        and
        the security interest previously granted to a group of investors on March
        31,
        2005, of which the Secured Parties hereunder were a part (the “Winfield
        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 Loan Agreement and
        the Note.

       

      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. Each
        capitalized term used herein, and not otherwise defined, shall have the meaning
        ascribed thereto in the Loan Agreement.

       

      (a)  “Collateral”
        means
        the collateral in which the Secured Parties is granted a first priority security
        interest by this Agreement (subject only to the Brockbank Interest and Winfield
        Interest) 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 Obligor, including, without limitations, 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 Obligor’s businesses and all improvements thereto
        (collectively, the “Equipment”);
        and

       

      (ii)  All
        Inventory of the Obligor; and

       

      (iii)  All
        of
        the Obligor’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 Obligor 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 Obligor’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 Obligor’s obligations under this Agreement, the Loan Agreement and
        the Note, 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 make the Loan 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
        Obligor hereby, unconditionally and irrevocably, pledges, grants and
        hypothecates to the Secured Parties, a continuing first priority security
        interest (subject only to the Brockbank Interest and Winfield 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 Obligor's right, title and interest of whatsoever kind and nature
        in
        and to the Collateral (the “Security
        Interest”).

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

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

       

      (a)  The
        Obligor has the requisite corporate power and authority to enter into this
        Agreement and otherwise to carry out its obligations hereunder. The execution,
        delivery and performance by the Obligor of this Agreement and the filings
        contemplated herein have been duly authorized by all necessary action on
        the
        part of the Obligor and no further action is required by the Obligor. This
        Agreement constitutes a legal, valid and binding obligation of the Obligor
        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
        Obligor 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
        A
        attached
        hereto;

       

      (c)  Except
        as
        to those liens existing as of the date hereof that were disclosed to the
        Secured
        Parties by the Obligor and are set forth on the attached Schedule
        B
        (the
“Permitted
        Liens”),
        the
        Obligor is the sole owner of the Collateral (except for non-exclusive licenses
        granted by the Obligor 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
        Obligor 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 Obligor’s use of any Collateral
        violates the rights of any third party. There has been no adverse decision
        to
        the Obligor’s claim of ownership rights in or exclusive rights to use the
        Collateral in any jurisdiction or to the Obligor'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 Obligor, threatened
        before
        any court, judicial body, administrative or regulatory agency, arbitrator
        or
        other governmental authority. 

       

      (e)  The
        Obligor 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. 

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      (f)  This
        Agreement creates in favor of the Secured Parties a valid first priority
        security interest (subject only to the Brockbank Interest and the Winfield
        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 security interest in such Collateral (subject only
        to the
        Brockbank Interest and the Winfield Interest). Except for the filing of
        financing statements on Form-1 under the UCC with the jurisdictions indicated
        on
Schedule
        C,
        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 Obligor of, or the effectiveness of, the Security Interest granted
        hereby
        or for the execution, delivery and performance of this Agreement by the Obligor
        or (ii) for the perfection of or exercise by the Secured Parties of its rights
        and remedies hereunder.

       

      (g)  The
        Obligor hereby irrevocably authorizes the Secured Parties at any time and
        from
        time to time to file in any Uniform Commercial Code jurisdiction any initial
        financing statements and amendments thereto that (a) indicate the Collateral
        regardless of whether any particular asset comprised in the Collateral falls
        within the scope of Article 9 of the Uniform Commercial Code of the State
        of New
        York as amended from time to time (“NYUCC”),
        or
        any other Uniform Commercial Code jurisdiction; and (b) contain any other
        information required by part 5 of Article 9 of the NYUCC for the sufficiency
        or
        filing office acceptance of any financing statement or amendment, including
        whether the Obligor is an organization, the type of organization and any
        organization identification number issued to the Obligor. The Obligor agrees
        to
        furnish any such information to the Secured Parties promptly upon request.
        The
        Obligor also ratifies its authorization for the Secured Parties to have filed
        in
        any Uniform Commercial Code jurisdiction any like initial financing statements
        or amendments thereto if filed prior to the date hereof with respect to the
        Collateral.

       

      (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 Obligor is a party or by the Obligor is bound. No consent (including,
        without limitation, from stockholders or creditors of the Obligor) is required
        for the Obligor to enter into and perform its obligations
        hereunder.

       

      (i)  The
        Obligor 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 Obligor hereby
        agrees
        to defend the same against any and all persons. The Obligor shall safeguard
        and
        protect all Collateral for the account of the Secured Parties. At the request
        of
        the Secured Parties, the Obligor will pay the cost of filing one or more
        financing statements pursuant to the UCC (or any other applicable statute)
        in
        form reasonably satisfactory to the Secured Parties 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 Obligor shall pay all fees,
        taxes
        and other amounts necessary to maintain the Collateral and the Security Interest
        hereunder, and the Obligor 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. 

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      (j)  The
        Obligor will not transfer, pledge, hypothecate, encumber, license (except
        for
        non-exclusive licenses granted by the Obligor 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
        Obligor 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
        Obligor 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's
        security interest therein.

       

      (m)  The
        Obligor 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
        Obligor shall permit the Secured Parties and its 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
        Obligor 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
        Obligor 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
        Obligor 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 Obligor with respect to the Collateral is accurate and
        complete in all material respects as of the date furnished.

       

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

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      (a)  A
        breach
        by the Obligor of its material obligations under the Loan Agreement and failure
        to cure such breach for ten (10) days after receipt by the Obligor of notice
        of
        such breach from the Secured Parties;

       

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

       

      (c)  The
        material failure by the Obligor to observe or perform any of its material
        obligations hereunder for ten (10) days after receipt by the Obligor 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 Obligor
        shall, upon receipt by it of any revenue, income or other sums subject to
        the
        Security Interest, whether payable pursuant to the Loan Agreement, the Note
        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 Loan Agreement, 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 Obligor shall assemble the Collateral and make it available
        to the
        Secured Parties at places which the Secured Parties shall reasonably select,
        whether at the Obligor's premises or elsewhere, and make available to the
        Secured Parties, without rent, all of the Obligor’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 Obligor
        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 Obligor or right of
        redemption of the Obligor, 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 Obligor, which are hereby
        waived
        and released.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      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 Obligor 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 is legally entitled, the Obligor 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 Obligor 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.

       

      (a)  All
        ordinary costs and expenses incurred by any Secured Parties in collection
        of the
        Obligations shall be borne exclusively by the Obligor including, without
        limitation, any costs, expenses, fees or disbursements incurred by outside
        agencies or attorneys retained by the Secured Parties to effect collections
        of
        the Obligations or any Collateral securing the Obligations. 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 Parties to the Company that do not arise under the Loan Agreement
        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
        Obligor 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 Obligor 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 Obligor 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 Loan Agreement. Until
        so
        paid, any fees payable hereunder shall be added to the principal amount of
        the
        Note and shall bear interest at the Default Rate.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      9.  Responsibility
        for Collateral.
        The
        Obligor assumes all liabilities and responsibility in connection with all
        Collateral, and the obligations of the Obligor hereunder or under the Loan
        Agreement 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 Obligor hereunder,
        shall be absolute and unconditional, irrespective of: (a) any lack of validity
        or enforceability of this Agreement, the Loan Agreement, or any agreement
        entered into in connection with the foregoing, 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 Loan Agreement, or any
        other
        agreement entered into in connection with the foregoing; (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 Obligor, 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
        Obligor
        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 Obligor'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 Obligor 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 Obligor 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 repayment of all
        amounts due the Secured Parties under the Loan Agreement. Upon such termination,
        the Secured Parties, at the request and at the expense of the Obligor, will
        join
        in executing any termination statement with respect to any financing statement
        executed and filed pursuant to this Agreement. 

       

      12.  Power
        of Attorney; Further Assurances.
        

       

      (a)  The
        Obligor authorizes the Secured Parties, and does hereby make, constitute
        and
        appoint the Secured Parties, and the Secured Parties’ respective officers,
        agents, successors or assigns with full power of substitution, as the Obligor's
        true and lawful attorney-in-fact, with power, in its own name or in the name
        of
        the Obligor, 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 Obligor'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 and the Loan Agreement,
        all as fully and effectually as the Obligor might or could do; and the Obligor
        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.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      (b)  On
        a
        continuing basis, the Obligor 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
        C,
        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
        Obligor hereby irrevocably appoints the Secured Parties as the Obligor's
        attorney-in-fact, with full authority in the place and stead of the Obligor
        and
        in the name of the Obligor, 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 its sole discretion, of one or more
        financing or continuation statements and amendments thereto, relative to
        any of
        the Collateral without the signature of the Obligor where permitted by
        law.

       

      13.  Notices.
        All
        notices, requests, demands and other communications hereunder shall be in
        writing, with copies to all the other parties hereto, and shall be deemed
        to
        have been duly given when (i) if delivered by hand, upon receipt, (ii) if
        sent
        by facsimile, upon receipt of proof of sending thereof, (iii) if sent by
        nationally recognized overnight delivery service (receipt requested), the
        next
        business day or (iv) if mailed by first-class registered or certified mail,
        return receipt requested, postage prepaid, four days after posting in the
        U.S.
        mails, in each case if delivered to the following addresses:

       

      
        	 	
                If
                  to the Obligor:

              	
                Goldspring,
                  Inc.

                
                  8585
                    East Hartford Drive, Suite 400

                  
                    Scottsdale,
                      AZ 85255

                    
                      Attention:
                        Chief Executive Officer

                      Telephone
                        No: (480) 505-4040

                      
                        Facsimile
                          No: (480)
                          505-4044

                      

                    

                  

                

              

      

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      
        	 	With copies to: 	
                Tomlinson
                  Zisko LLP

                
                  Attn:
                    Michael C. Doran, Esq.

                  200
                    Page Mill Road

                  Palo
                    Alto, CA 94306

                  Fax:
                    (650) 324-1808

                

              

      

      

       

      If
        to the
        Secured Parties: to the address set forth immediately below such Secured
        Party’s
        name on the signature pages to the Loan Agreement. 

      
        

        
          	 	With copies to:	
                   Hodgson
                    Russ LLP

                  
                    60
                      E.42nd
                      Street

                    New
                      York, NY 10165

                    Attention:
                      Jeffrey A. Rinde, Esq.

                    Telephone
                      No: (212) 661-3535

                    Facsimile
                      No: (212) 972-1677

                  

                

        

         

      

      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 its 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 Parties’ rights and remedies
        hereunder.

       

      15.  Miscellaneous.
        

       

      (a)  No
        course
        of dealing between the Obligor 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 the Loan Agreement 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 Loan Agreement 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.

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      (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.

       

      (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.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      (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 WAIVED 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.

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this Security Agreement to
        be
        duly executed on the day and year first above written.

       

      GOLDSPRING,
        INC.

      

      

      By:___________________________

      Name:_________________________

      Title:__________________________

      

      

      

      Secured
        Parties

      

      

      INTERGROUP
        INCORPORATED

       

      By:___________________________

      Name:

      Address:_______________________

                     
        

                      
        _______________________

      

      PORTSMOUTH
        SQUARE, INC.

       

      By:___________________________

      Name:

      Address:_______________________

      
                       
          

                       
          _______________________

      SANTA
        FE FINANCIAL CORP.

       

      By:___________________________

      Name:

      Address:_______________________

       

                     
        _______________________

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      SCHEDULE
        A

      

      Secured
        Parties

       

      
        	
                 

                Name
                  and
                  Address

              	
                 

                 

                Amount
                  of Notes

              
	
                 

                Santa
                  Fe Financial Corp.

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	
                 

                $190,000

              
	
                 

                Portsmouth
                  Square, Inc.

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	
                 

                $340,000

              
	
                 

                The
                  InterGroup Corporation

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	
                 

                $670,000

              
	
                TOTAL:

              	
                $1,200,000

              

      

      

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      SCHEDULE
        B

      

      

      Permitted
        Liens

      

      
        	
                Name
                  and
                  Address

              	
                Amount
                  of Principal Indebtedness Remaining

              
	
                Brockbank
                  Trust

              	
                $450,000

              
	
                 

                John
                  V. Winfield

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

              	
                 

                $1,721,297

              
	
                 

                John
                  V. Winfield IRA-1

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	
                 

                $1,147,530

              
	
                 

                John
                  V. Winfield IRA-2

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	
                 

                $573,765

              
	
                 

                Santa
                  Fe Financial Corp.

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	
                 

                $573,765

              
	
                 

                Portsmouth
                  Square, Inc.

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	
                 

                $573,765

              
	
                 

                The
                  InterGroup Corporation

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	
                 

                $2,295,061

              
	
                TOTAL:

              	
                $7,335,184

              

      

       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      SCHEDULE
        C

      

      

      Jurisdictions

      

      

      8585
        East
        Hartford Drive, Suite 400

      Scottsdale,
        AZ 85255

       

       

       

      
        
           

        

          16

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