Document:

AGREEMENT

       

      This
        Agreement (“Agreement”)
        is
        entered into this 29th day of March, 2005, by and between the parties identified
        on the signature pages hereto (each an “Investor”
        and
        collectively “Investors”)
        and
GOLDSPRING,
        INC.,
        a
        Florida corporation (the “Company”).

       

      R
        E C I T A L S

       

      1.  WHEREAS,
        the
        parties hereto are also parties to that certain Subscription Agreement dated
        as
        of November 30, 2004 (the “Subscription
        Agreement”)
        whereby the Company issued and sold to the Investors up to $12.0 million
        of
        principal amount of promissory notes of the Company (“Convertible
        Notes”)
        initially convertible into shares of the Company’s common stock, $0.000666 par
        value per share (the “Common
        Stock”)
        and
        warrants to purchase shares of Common Stock; and

       

      2.  WHEREAS,
        pursuant to Section 11.1(iv) of the Subscription Agreement, the Company was
        required to file a registration statement by December 30, 2004 and to have
        caused such registration statement to be declared effective by the Securities
        and Exchange Commission (the “Commission”)
        by
        February 14, 2005; and

       

      3.  WHEREAS,
        the
        Company’s failure to file the registration statement within the time periods
        prescribed in the Subscription Agreement has caused liquidated damages to
        accrue
        pursuant to Section 11.4 of the Subscription Agreement, as further calculated
        and set forth on Exhibit
        A
        attached
        hereto; and

       

      4.  WHEREAS,
        pursuant to Section 12(b) of the Subscription Agreement, the consent of holders
        of not less than 80% of the outstanding principal amount of Convertible Notes
        is
        required prior to the Company’s issuance of any equity security of the Company;
        and

       

      5.  WHEREAS,
        the
        Investors set forth on the signature pages of this Agreement represent 100%
        of
        the outstanding principal amount of Convertible Notes; and

       

      6.  WHEREAS,
        in
        order to provide for certain payment and to avoid the expense, inconvenience,
        and uncertainty of further dispute, the parties hereto desire resolve the
        claims
        and damages that have accrued pursuant to the Subscription Agreement, without
        any admission of liability to any party hereto, on the terms and conditions
        of
        this Agreement.

       

      AGREEMENT

       

      NOW,
        THEREFORE,
        in
        consideration for the mutual promises, various obligations, rights, and
        covenants contained herein and for other consideration, the receipt and
        sufficiency of which are hereby acknowledged, and intending to be legally
        bound,
        the parties hereto agree as follows:

       

      1.  Incorporation
        of Recitals.
        The
        recitals set forth above are true, accurate, and correct, and are incorporated
        in this Agreement by this reference and made a material part of this
        Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      2.  Payment.
        In
        consideration for various obligations, rights, and covenants contained herein
        and other consideration, and without any admission of liability by any party
        hereto, upon the Settlement Date of this Agreement, the Company shall issue
        to
        the Investors up to an aggregate of _______ restricted shares of Common Stock
        (the “Shares”),
        in
        accordance with the names and amounts set forth on Exhibit
        B
        attached
        hereto. For purposes of this Agreement, the “Settlement
        Date”
        shall
        be the date whereby at least 80% of the outstanding principal amount of
        Convertible Notes have approved and executed this Agreement; provided,
        however,
        that if
        the Settlement Date does not occur by April 15, 2005, then this Agreement
        shall
        be null and void and of no further force or effect. The parties acknowledge
        that
        the Investors are granted the registration and other rights described in
        Section
        11 of the Subscription Agreement, except that the Filing Date and Effective
        Date
        of the registration rights related to the Shares shall be April 30, 2005
        and
        June 30, 2005, respectively.

       

      3.  Consent
        and Waiver.
        By
        executing this Agreement, each Investor hereby (i) consents, pursuant to
        Section
        12(b) of the Subscription Agreement, to the issuance of the Shares pursuant
        to
        this Agreement; (ii) waives the application of Section 12(c) of the Subscription
        Agreement with respect to the issuance of the Shares pursuant to this Agreement;
        (iii) waives the application of Section 3.4 of the Common Stock Purchase
        Warrant
        dated November 30, 2004 held by such Investor with respect to the issuance
        of
        the Shares pursuant to this Agreement; and (iv) waives the application of
        Section 3.4(b)(D) of the Convertible Note held by such Investor with respect
        to
        the issuance of the Shares pursuant to this Agreement. The parties acknowledge
        that such consent and waiver applies to the issuance of Shares pursuant to
        this
        Agreement and shall not constitute an implied waiver of any other right,
        power,
        or privilege of the Investors.

       

      4.  Acknowledgement
        and Release.
        In
        consideration of the mutual agreements contained herein, the parties to this
        agreement acknowledge that the Shares are being issued in lieu of liquidated
        damages that accrued pursuant to Section 11.4 of the Subscription Agreement
        during the period commencing November 30, 2004 and continuing through and
        including March 29, 2005, and each party fully, finally, and forever releases
        from and discharges one another, and each of its officers, directors,
        stockholders, employees, accountants, and agents, of and from any and all
        claims, demands, obligations, actions, causes of action, damages, costs,
        and
        expenses of any nature whatsoever, which either party may now have in connection
        with liquidated damages that accrued during such period. 

       

      5.  Representations
        and Warranties of Company

       

      (a)  Authority. Company
        has the power and authority to enter into this Agreement and to carry out
        the
        transactions contemplated hereby. No other proceedings on the part of Company
        are necessary to authorize the execution and delivery by Company of this
        Agreement or the consummation by Company of the transactions contemplated
        hereby. This Agreement has been duly executed and delivered by, and constitutes
        a legal, valid, and binding agreement of Company, enforceable against it
        in
        accordance with its terms, except that (i) such enforcement may be subject
        to
        bankruptcy, insolvency, reorganization, moratorium, or other similar laws
        now or
        hereafter in effect relating to creditors' rights, and (ii) the remedy of
        specific performance and injunctive and other forms of equitable relief may
        be
        subject to equitable defenses and to the discretion of the court before which
        any proceeding therefore may be brought.

       

      
        
          
          

        

        
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      (b)  No
        Violation. The
        execution and delivery of this Agreement and the consummation of the
        transactions contemplated hereby will not violate or result in a breach by
        Company of, or constitute a default under, or conflict with, or cause any
        acceleration of any obligation with respect to, (i) any provision or restriction
        of its articles of incorporation, bylaws, or any loan, indenture, or mortgage
        of
        Company, or (ii) any provision or restriction of any lien, lease agreement,
        contract, instrument, order, judgment, award, decree, ordinance, or regulation
        or any other restriction of any kind or character to which any assets or
        properties of Company is subject or by which Company is bound.

       

      (c)  Accuracy
        of Statements. Neither
        this Agreement nor any statement, exhibit, certificate, or other information
        furnished by Company to Investors in connection with this Agreement or any
        of
        the transactions contemplated hereby contains an untrue statement of a material
        fact or omits to state a material fact necessary to make the statements
        contained herein or therein, in light of circumstances in which they are
        made,
        not misleading.

       

      6.  Investor’s
        Representations and Warranties. Each
        Investor hereby represents and warrants to and agrees with Company only as
        to
        such Investor that:

       

      (a)  Information
        on Company. Investor
        has been furnished with or has had access via the EDGAR system maintained
        by the
        Commission to Company's Form 10-KSB for the year ended December 31, 2003
        as
        filed with the Commission, together with all subsequently filed Forms 10-QSB,
        8-K, and filings made with the Commission available via the EDGAR system
        (hereinafter referred to collectively as the “Reports”).
        In
        addition, the Investor has received in writing from Company such other
        information concerning its operations, financial condition, and other matters
        as
        Investor has requested in writing (such other information is collectively,
        the
“Other
        Written Information”),
        and
        considered all factors Investor deems material in deciding on the advisability
        of investing in the Shares. 

       

      (b)  Information
        on Investor. Investor
        is an “accredited investor”, as such term is defined in Regulation D promulgated
        by the Commission under the 1933 Act, is experienced in investments and business
        matters, has made investments of a speculative nature and has purchased
        securities of U.S. publicly owned companies in private placements in the
        past
        and, with its representatives, has such knowledge and experience in financial,
        tax, and other business matters as to enable Investor to utilize the information
        made available by Company to evaluate the merits and risks of and to make
        an
        informed investment decision with respect to the proposed purchase, which
        represents a speculative investment. Investor has the authority and is duly
        and
        legally qualified to receive and own the Shares. Investor is able to bear
        the
        risk of such investment for an indefinite period and to afford a complete
        loss
        thereof. The information set forth on the signature page hereto regarding
        Investor is accurate.

       

      (c)  Intent. As
        of the Settlement Date, Investor shall accept the Shares for its own account
        for
        investment only and not with a view toward, or for resale in connection with,
        the public sale or any distribution thereof.

       

      
        
          
          

        

        
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      (d)  Compliance
        with Securities Act. Investor
        understands and agrees that the Shares have not been registered under the
        Securities Act of 1933, as amended (the “1933
        Act”)
        Act or
        any applicable state securities laws, by reason of their issuance in a
        transaction that does not require registration under the 1933 Act (based
        in part
        on the accuracy of the representations and warranties of Investor contained
        herein), and that the Shares must be held indefinitely unless a subsequent
        disposition is registered under the 1933 Act or any applicable state securities
        laws or is exempt from such registration. 

       

      (e)  Shares
        Legend. The
        Shares shall bear the following or similar legend:

       

      “THE
        SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
        SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED
        FOR
        SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
        STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW
        OR AN
        OPINION OF COUNSEL REASONABLY SATISFACTORY TO GOLDSPRING, INC. THAT SUCH
        REGISTRATION IS NOT REQUIRED.”

       

      (f)  Authority;
        Enforceability.
        This Agreement and other agreements delivered together with this Agreement
        or in
        connection herewith have been duly authorized, executed, and delivered by
        Investor and are valid and binding agreements enforceable against Investor
        in
        accordance with their terms, subject to bankruptcy, insolvency, fraudulent
        transfer, reorganization, moratorium and similar laws of general applicability
        relating to or affecting creditors’ rights generally and to general principles
        of equity; and Investor has full corporate power and authority necessary
        to
        enter into this Agreement and such other agreements and to perform its
        obligations hereunder and under all other agreements entered into by Investor
        relating hereto.

       

      (g)  Restricted
        Securities. Investor
        understands that the Shares have not been registered under the 1933 Act and
        such
        Investor will not sell, offer to sell, assign, pledge, hypothecate, or otherwise
        transfer any of such securities unless pursuant to an effective registration
        statement under the 1933 Act. Notwithstanding anything to the contrary contained
        in this Agreement, such Investor may transfer (without restriction and without
        the need for an opinion of counsel) the Shares to its Affiliates (as defined
        below) provided that each such Affiliate is an “accredited investor” under
        Regulation D and such Affiliate agrees to be bound by the terms and conditions
        of this Agreement. For the purposes of this Agreement, an “Affiliate” of any
        person or entity means any other person or entity directly or indirectly
        controlling, controlled by or under direct or indirect common control with
        such
        person or entity. For purposes of this definition, “control” means the power to
        direct the management and policies of such person or firm, directly or
        indirectly, whether through the ownership of voting securities, by contract
        or
        otherwise.

       

      (h)  No
        Governmental Review. Each
        Investor understands that no U.S. federal or state agency or any other
        governmental or state agency has passed on or made recommendations or
        endorsement of the Shares or the suitability of the investment in the Shares
        nor
        have such authorities passed upon or endorsed the merits of the offering
        of the
        Shares.

       

      
        
          
          

        

        
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      (i)  Correctness
        of Representations. Each
        Investor represents as to such Investor that the foregoing representations
        and
        warranties are true and correct as of the date hereof and, unless an Investor
        otherwise notifies the Company prior to the Settlement Date shall be true
        and
        correct as of the Settlement Date.

       

      7.  Review
        by Counsel.
        By
        executing this Agreement, the parties acknowledge that this Agreement has
        been
        freely and extensively negotiated and they have fully availed themselves
        of the
        opportunity to consult with counsel of their choice about the consequences
        of
        its terms and provisions. The parties acknowledge that they have read this
        Agreement, that they fully understand it, that they agree to be bound by
        its
        terms and conditions. The parties further acknowledge that such parties are
        not
        relying on any representations or warranties of any of the other parties
        or
        their counsel in entering into this Agreement, except such representations
        or
        warranties as may be expressly set forth in this Agreement.

       

      8.  Binding
        Effect. This
        Agreement, and every part hereof, shall be effective only upon the Settlement
        Date, and shall be binding upon and shall inure to the benefit of the parties
        hereto, as well as to their respective successors-in-interest, heirs, executors,
        administrators, and assigns.

       

      9.  Further
        Assurances.
        Each
        party hereto agrees to take all actions and cooperate as necessary to and
        further agrees to execute any documents that might be necessary to effect
        the
        transactions contemplated by this Agreement.

       

      10.  Entire
        Agreement. This
        writing (including the Recitals) and the exhibits represent the entire agreement
        and understanding of the parties with respect to the subject matter hereof
        and
        supersedes all prior agreements and understandings of the parties respecting
        the
        same.

       

      11.  Attorneys’
        Fees. In
        the event of a violation of this Agreement or any portion thereof, the
        prevailing party in any litigation arising therefrom shall be entitled to
        recover all reasonable attorneys’ fees and costs.

       

      12.  Amendment;
        Waiver. Neither
        this Agreement nor any term hereof may be amended, waived, discharged, or
        terminated, except by a written instrument signed by Company and holders
        of not
        less than 80% of the outstanding principal amount of Convertible Notes, and
        any
        such amendment, waiver, discharge, or termination shall be binding on all
        the
        Holders.

       

      13.  Governing
        Law. This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        state of New York without regard to principles of conflicts of laws. Any
        action
        brought by either party against the other concerning the transactions
        contemplated by this Agreement shall be brought only in the state courts
        of New
        York or in the federal courts located in the state of New York. The parties
        and
        the individuals executing this Agreement and other agreements referred to
        herein
        or delivered in connection herewith on behalf of the Company agree to submit
        to
        the jurisdiction of such courts and waive trial by jury. In the event that
        any
        provision of this Agreement or any other agreement delivered in connection
        herewith is invalid or unenforceable under any applicable statute or rule
        of
        law, then such provision shall be deemed inoperative to the extent that it
        may
        conflict therewith and shall be deemed modified to conform with such statute
        or
        rule of law. Any such provision which may prove invalid or unenforceable
        under
        any law shall not affect the validity or enforceability of any other provision
        of any agreement.

       

      
        
          
          

        

        
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      14.  Delays
        or Omissions.
        No
        delay
        or omission to exercise any right, power, or remedy accruing to any Investor,
        upon any breach or default of Company under this Agreement, shall impair
        any
        such right, power, or remedy, nor shall it be construed to be a waiver of
        any
        such breach or default, or any acquiescence therein, or of or in any similar
        breach or default thereafter occurring; nor shall any waiver of any single
        breach or default be deemed a waiver of any other breach or default theretofore
        or thereafter occurring.

       

      16.    
         Counterparts.
        This
        Agreement may be executed in counterparts, each of which shall be an original,
        but all of which taken together shall constitute one Agreement..

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]

      IN
        WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
        first above written.

      
        
          
          

        

        
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      COMPANY:

       

      GOLDSPRING,
        INC., a Florida corporation

       

      By:
        _____________________________________     

      Robert
        T.
        Faber, President

      

      INVESTORS:

      

      GAMMA
        OPPORTUNITY CAPITAL PARTNERS, LP

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      LONGVIEW
        FUND LP

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      LONGVIEW
        EQUITY FUND, LP

       

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      LONGVIEW
        INTERNATIONAL

      EQUITY
        FUND, LP

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      ALPHA
        CAPITAL

      AKTIENGESELLSCHAFT

       

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      
        
          
          

        

        
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      CAPITAL
        VENTURES INTERNATIONAL

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      PORTSIDE
        GROWTH AND OPPORTUNITY FUND

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      ENABLE
        GROWTH PARTNERS L.P.

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      WHALEHAVEN
        FUNDS LIMITED

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      STONESTREET
        LIMITED PARTNERSHIP

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      SMITHFIELD
        FIDUCIARY LLC

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      TCMP3
        PARTNERS LLP

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      
        
          
          

        

        
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      BRISTOL
        INVESTMENT FUND, LTD.

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      VERTICAL
        VENTURES, LLC

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      MERRIMAN
        CURHAN FORD CORPORATION

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      ___________________________________
A.
        Tod
        Hindin

      

      KENNETH
        R. WERNER REV TST

      DTD
        7/20/96

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

       

      ___________________________________
Thomas
        P.
        O’Shea, Jr.

      

      

      ___________________________________
D.
        Jonathan
        Merriman

      

      

      ___________________________________
Brock
        Ganeles

      

      

      ___________________________________
Elise
        Stern

      

      
        
          
          

        

        
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      ___________________________________
Craig
        E.
        Sultan

      

      

      ___________________________________
Carl
        Frankson

      

      

      ___________________________________
Jon
        M. Plexico

      

      

      ___________________________________
Pete
        Marcil

      

      

      ___________________________________
David
        Bain

      

      

      ___________________________________
Steven
        R.
        Sarracino

      

      

      ___________________________________
Gregory
        S.
        Curhan

      

      

      ___________________________________
John
        Hiestand

      

      

      ___________________________________
Robert
        E. Ford

      

      

      ___________________________________
Eric
        Wold

      

      

      ___________________________________
Christopher
        Aguilar

      

      
        
          
          

        

        
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      ___________________________________
Peter
        A.
        Blackwood

      

      GENESIS
        MICROCAP INC.

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      

      John
        V.
        Winfield

      

      JOHN
        V.
        WINFIELD IRA-1

       

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      JOHN
        V.
        WINFIELD IRA-2

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      SANTA
        FE
        FINANCIAL CORP.

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      PORTSMOUTH
        SQUARE, INC.

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

      

      INTERGROUP
        CORP.

      

      By:
        _____________________________________

      Name:
        ___________________________________

      Title:
        ____________________________________

       

      
        
          
          

        

        
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      EXHIBIT
        A

       

      CALCULATION
        OF LIQUIDATED DAMAGES

       

      

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
        B

       

      COMMON
        STOCK TO BE ISSUED IN SETTLEMENTSETTLEMENT
        AGREEMENT

      

      

      THIS
        SETTLEMENT AGREEMENT
        (the
“Settlement
        Agreement”)
        is
        made as of March ____, 2005, by and between GoldSpring, Inc., a
        Florida
        corporation, with its principal executive offices at 8585 East Hartford Drive,
        Suite 400, Scottsdale, AZ 85255 (“GoldSpring”),
        and
        certain investors of GoldSpring as set forth on the signature page hereto
        (collectively, “Winfield”).
        (GoldSpring and Winfield may hereinafter be referred to singularly as a
“party,”
        and
        collectively as the “parties.”)

      

      PREAMBLES:

      

      WHEREAS,
        as of
        March 22, 2004, Winfield, in addition to certain other investors of GoldSpring
        (collectively, the “GoldSpring
        Investors”),
        purchased an aggregate of approximately 21.8 million shares of common stock
        of
        GoldSpring (the “Original
        Shares”),
        and
        warrants to purchase approximately 21.8 million additional shares of common
        stock of GoldSpring (collectively, the “Original
        Warrants”),
        pursuant to a Subscription Agreement between GoldSpring and the GoldSpring
        Investors, and related documents, entered into as of such date (collectively,
        the “Original
        Transaction Documents”);
        and

      

      WHEREAS,
        GoldSpring defaulted on certain of its obligations under the Original
        Transaction Documents, and, as a result of such default, entered into an
        additional Subscription Agreement with the GoldSpring Investors (the
“Additional
        Subscription Agreement”),
        and
        related documents, as of November 30, 2004 (collectively, the “Additional
        Transaction Documents”),
        pursuant to which the Original Shares and Original Warrants were exchanged
        for
        8% convertible promissory notes of GoldSpring (the “Convertible
        Notes”)
        in the
        aggregate principal amount of approximately $11.1 million (the “Principal”),
        and
        warrants to purchase approximately 27.8 million shares of common stock of
        GoldSpring, as further set forth in the Additional Transaction Documents;
        and

      

      WHEREAS,
        as of
        December 20, 2004, Winfield delivered a Notice of Conversion to GoldSpring
        (the
“Notice
        of Conversion”),
        electing to convert its portion of the Principal, and accrued and unpaid
        interest thereon, into shares of common stock of GoldSpring (the “Winfield
        Conversion Shares”),
        pursuant to the terms of the Additional Transaction Documents; and

      

      WHEREAS,
        GoldSpring failed to timely deliver the Winfield Conversion Shares to Winfield,
        and, as a result of such failure, as of March 7, 2005, Winfield elected to
        exercise its right to receive the mandatory redemption payment pursuant to
        Section 7.2 of the Additional Subscription Agreement (the “Mandatory
        Redemption Payment”);
        and

      

      WHEREAS,
        GoldSpring is currently unable to pay the Mandatory Redemption Payment to
        Winfield, which, as of March 23, 2005, was an aggregate of $6,885,184;
        and

      

      WHEREAS,
        the
        parties are desirous of settling the claims Winfield has against GoldSpring
        for
        the Mandatory Redemption Payment (the “Winfield
        Claim”)
        (assuming full and complete performance by GoldSpring of its obligations
        hereunder and under the New Transaction Documents) without resorting to
        litigation. 

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

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

      

      1. Default.
        GoldSpring hereby acknowledges that it is in default of the Convertible Notes,
        for, among other things, the failure to timely deliver the Winfield Conversion
        Shares to Winfield, upon receipt of the Notice of Conversion. In addition,
        GoldSpring hereby acknowledges that it currently owes but is unable to pay
        to
        Winfield the Mandatory Redemption Payment. GoldSpring further acknowledges
        and
        agrees that it has no offset, defense or counterclaim of any kind, nature
        or
        description with respect to any of its defaults and the unpaid monies due
        to
        Winfield, as set forth herein.

      

      2. Settlement.
        In
        settlement of the Winfield Claim, GoldSpring and Winfield hereby agree as
        follows:

      

      (a) Issuance
        of Debenture.
        As of
        even date herewith (the “Closing
        Date”),
        GoldSpring will issue to Winfield, one or more of the 12% Secured Convertible
        Debentures of GoldSpring, in the aggregate principal amount of $6,855,184,
        in
        substantially the form attached hereto as Exhibit
        A
        (collectively the “Debenture”).
        The
        Debenture shall provide for, among other things:

      

      (i) 
        An
        interest rate of 12% per annum (the “Interest”),
        such
        Interest to be payable on a monthly basis, on the first day of each month,
        commencing April 1, 2005;

      

      (ii) A
        conversion price (the “Conversion
        Price”)
        equal
        to the lesser of: (A) 85% of the average of the five (5) lowest closing bid
        prices of the common stock of GoldSpring for the twenty (20) trading days
        immediately preceding the date GoldSpring was required to pay the Mandatory
        Redemption Payment to Winfield, and (B) 85% of the average of the five (5)
        lowest closing bid prices of the common stock of GoldSpring for the twenty
        (20)
        trading days immediately preceding the date of conversion by Winfield;
provided,
        however,
        that,
        until the effective date of a registration statement (the “Registration
        Statement”)
        GoldSpring is required to file, to register, among other things, the shares
        of
        common stock of GoldSpring underlying the Debenture (together with any other
        shares issuable pursuant to the Debenture, the “Debenture
        Shares”),
        in
        addition to the Conversion Shares (as defined in Section 2(b) hereof)
        (collectively, the “GoldSpring
        Shares”),
        the
        conversion price shall be 50% of the average of the five (5) lowest closing
        bid
        prices of the common stock of GoldSpring for the twenty (20) trading days
        immediately preceding the date of conversion by Winfield. In no event shall
        the
        conversion price of the Debenture be greater than the lesser of: (A) $0.1131,
        and (B) the conversion price of the Convertible Notes (as adjusted from time
        to
        time);

      

      (iii) Mandatory
        registration rights with respect to the GoldSpring Shares;

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      (iv) Normal
        and customary anti-dilution provisions;

      

      (v) Negative
        covenants precluding actions outside of GoldSpring’s ordinary course of business
        without the prior written consent of Winfield; and

      

      (vi) Events
        of
        default, which include, without limitation, (A) failure by GoldSpring to
        file
        the Registration Statement within thirty (30) days after the Closing Date,
        or
        (B) the failure of the Registration Statement to be effective within ninety
        (90)
        days of the Closing Date (the “Required
        Effective Date”),
        or
        (C) any event of default under the Additional Transaction Documents or New
        Transaction Documents (as defined in Section 3(c) hereof) (each, an
“Event
        of Default”).

       

      (b) Conversion
        to Shares.
        Contemporaneously with the execution of this Settlement Agreement, Winfield
        shall convert $266,416 (the “Conversion
        Amount”)
        of the
        Debenture into shares of common stock of GoldSpring, at a conversion price
        of
        $0.03 per share (the “Conversion
        Shares”),
        which
        Conversion Amount represents the amount of accrued damages relating to
        GoldSpring’s failure to register certain securities held by Winfield pursuant to
        the Additional Transaction Documents; provided,
        however,
        that
        since the Conversion Shares, when issued, shall be restricted securities
        of
        GoldSpring, GoldSpring agrees to transfer to Winfield a total of 200% of
        such
        amount of Conversion Shares (i.e., a total of 17,761,067 shares of common
        stock). In connection with this conversion, GoldSpring and Winfield shall
        enter
        into a Subscription Agreement, dated as of even date herewith, in substantially
        the form attached hereto as Exhibit
        B
        (the
“New
        Subscription Agreement”).
        The
        New Subscription Agreement shall provide, among other things, that, if
        GoldSpring fails to register the GoldSpring Shares on or before the Required
        Effective Date, or upon any other Event of Default, Winfield has the right
        to
        put the Conversion Shares back to GoldSpring for 125% of the Conversion Amount
        (the “Put
        Purchase Price”),
        pursuant to the terms and conditions of a Put Agreement entered into by
        GoldSpring and Winfield, dated as of even date herewith, in substantially
        the
        form attached hereto as Exhibit
        C
        (the
“Put
        Agreement”).
        

       

      (c) Winfield
        Put Option.
        As
        further set forth in the Put Agreement, if, on the date Winfield exercises
        its
        right to put the Conversion Shares to GoldSpring, GoldSpring has an amount
        of
        cash, as defined by GAAP, equal to or greater than the Put Purchase Price,
        GoldSpring must purchase the Conversion Shares from Winfield for the Put
        Purchase Price. If, on the other hand, at the time Winfield exercises its
        right
        to put the Conversion Shares to GoldSpring, GoldSpring does not have an amount
        of cash, as defined by GAAP, equal to or greater than the Put Purchase Price,
        GoldSpring shall cause the Escrow Agent (as defined in Section 2(e) hereof)
        to
        deliver to Winfield a promissory note in the full amount of the Put Purchase
        Price (the “Note”),
        in
        substantially the form attached hereto as Exhibit
        D.
        

      

      (d) Delivery
        of Conversion Shares.
        Within
        three (3) Business Days (as defined in this Section) after the Closing Date,
        GoldSpring shall deliver certificates representing the Conversion Shares
        to
        Winfield, issued in such names and denominations as specified on Schedule
        A
        hereto.
        For the purposes hereof, a “Business
        Day”
        shall
        mean any day other than a Saturday, Sunday or a day on which commercial banks
        in
        the city of New York, New York are authorized or required by law or executive
        order to remain closed.

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      (e) Escrow
        of Debenture Shares and Note.
        GoldSpring has agreed that, contemporaneously with the execution of this
        Agreement, it shall deposit with Bondy & Schloss LLP (the “Escrow
        Agent”):
        (i)
        certificates representing 150% of the amount of the Debenture Shares (assuming
        the conversion in full of all outstanding amounts due pursuant to the Debenture
        as of the Closing Date), which shall be held in such names as Winfield shall
        designate, and (ii) the Note, made in the name of Winfield, to collectively
        be
        held in escrow pursuant to the terms and conditions of an Escrow Agreement,
        dated as of even date herewith, by and among GoldSpring, Winfield and the
        Escrow
        Agent, in substantially the form attached hereto as Exhibit
        E
        (the
“Escrow
        Agreement”).

      

      (f) Security
        Interest.
        As
        further inducement for Winfield to enter into this Settlement Agreement,
        and to
        secure the complete and timely payment, performance and discharge in full,
        as
        the case may be, of all of GoldSpring’s obligations hereunder, and under the New
        Transaction Documents, GoldSpring shall grant to Winfield a continuing first
        priority security interest in and to all of the assets of GoldSpring, pursuant
        to a Security Agreement entered into between GoldSpring and Winfield, dated
        as
        of even date herewith, in substantially the form attached hereto as Exhibit
        F
        (the
“Security
        Agreement”).

      

      (g) GoldSpring
        shall return the Convertible Notes to Winfield to be held by Winfield until
        such
        time as GoldSpring satisfies its obligations under this Settlement Agreement
        and
        the New Transaction Documents. Winfield hereby agrees to return the Convertible
        Notes to GoldSpring upon such satisfaction by GoldSpring of its obligations
        under this Settlement Agreement and the New Transaction Documents.

      

      3. Warranties
        and Representations of GoldSpring.
        In
        order to induce Winfield to enter into this Settlement Agreement in settlement
        of the Winfield Claim (assuming full and complete performance by GoldSpring
        of
        its obligations hereunder and under the New Transaction Documents), GoldSpring
        hereby represents and warrants to Winfield as follows:

      

      (a) Organization,
        Good Standing and Qualification. GoldSpring
        is a corporation duly organized, validly existing and in good standing under
        the
        laws of the State of Florida, and has all requisite corporate power and
        authority to own and operate its assets and properties and to carry on its
        current or contemplated business. GoldSpring is duly qualified to transact
        business and is in good standing in each jurisdiction wherein the properties
        owned or leased or the business transacted by GoldSpring makes such
        qualification to do business as a foreign corporation necessary, except where
        the failure to so qualify could not reasonably be expected to have a material
        adverse effect on the condition, financial or otherwise, results of operations,
        business, prospects or properties of GoldSpring.

      

      (b) Capitalization.
        As of
        the Closing Date, GoldSpring has (A) __________ outstanding shares of common
        stock, (B) __________ outstanding options to purchase shares of its common
        stock, (C) __________ outstanding warrants to purchase shares of its common
        stock, and (D) convertible securities, or other rights, calling for the issuance
        of an aggregate of __________ shares of its common stock (collectively, the
        “GoldSpring
        Securities”).
        The
        GoldSpring Securities have, as applicable, been duly authorized and validly
        issued and are fully paid and non-assessable, have been issued and sold in
        compliance with applicable securities laws of the United States and
        jurisdictions thereof and any other applicable securities laws, and were
        not
        issued in violation of any preemptive rights, rights of first refusal or
        other
        similar rights granted by GoldSpring. There are no shareholders agreements,
        voting agreements or other similar agreements with respect to the outstanding
        shares of common stock of GoldSpring to which GoldSpring is a party or, to
        the
        knowledge of GoldSpring (having undertaken no independent investigation),
        between or among any of GoldSpring’s stockholders.

      

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      (c) Power
        and Authority. All
        corporate action on the part of GoldSpring and its officers, directors and
        stockholders necessary for the authorization, execution and delivery of this
        Settlement Agreement, the Debenture, the New Subscription Agreement, the
        Put
        Agreement, the Note, the Escrow Agreement, the Security Agreement, and any
        other
        documents related thereto (collectively, the “New
        Transaction Documents”),
        the
        performance of all obligations of GoldSpring hereunder and thereunder, and
        the
        authorization, issuance and delivery of the Debenture, Debenture Shares,
        Conversion Shares and Note being issued hereunder, and under the other New
        Transaction Documents, and the shares of common stock of GoldSpring issuable
        upon conversion of the Debenture, have been taken or will be taken, as required.
        The New Transaction Documents have been duly executed and delivered by
        GoldSpring and (assuming due authorization, execution and delivery by Winfield)
        constitute the valid and legally binding obligations of GoldSpring, enforceable
        in accordance with their terms.

      

      (d) Valid
        Issuance of Securities. 

      

      (i) The
        Debenture, Debenture Shares, Conversion Shares and Note, when issued, sold
        and
        delivered in accordance with the terms hereof, and of the other New Transaction
        Documents, for the consideration expressed herein, and therein, will be duly
        and
        validly issued, fully paid and non-assessable and free of any liens or
        encumbrances created by GoldSpring.

      

      (ii) The
        Conversion Shares and the Debenture Shares issuable upon conversion of the
        Debenture, have been duly and validly reserved for issuance upon such
        conversion, and upon issuance in accordance with the terms of the Debenture,
        will be fully paid and non-assessable and will be free of restrictions on
        transfer other than restrictions on transfer under applicable state and federal
        securities laws. No preemptive right, right of first refusal granted by
        GoldSpring, or other similar right exists with respect to the Debenture,
        Debenture Shares, Conversion Shares, or the Note, or the issuance and sale
        thereof.

      

      (iii) GoldSpring
        understands and acknowledges the potentially dilutive effect to its common
        stock
        upon the issuance of the Debenture Shares and Conversion Shares. GoldSpring
        further acknowledges that its obligation to issue the Debenture Shares and
        Conversion Shares in accordance with this Settlement Agreement, is absolute
        and
        unconditional regardless of the dilutive effect that such issuance may have
        on
        the ownership interests of other stockholders of GoldSpring.

      

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      (e) Governmental
        Consents. No
        consent, approval, order or authorization of, or registration, qualification,
        designation, declaration or filing with, any federal, regional, state or
        local
        governmental authority on the part of GoldSpring is required in connection
        with
        the GoldSpring’s authorization, issuance and sale of the Debenture, Debenture
        Shares, Conversion Shares and Note, and the transactions contemplated by
        the New
        Transaction Documents, except for filings, if any, required pursuant to
        applicable state securities or Blue Sky laws, which filings will be made
        within
        the required statutory or regulatory periods, and any filing pursuant to
        Regulation D of the Securities and Exchange Commission, which filing, if
        made,
        will be made within fifteen (15) days of the Closing.

      

      (f) Litigation. There
        is
        no action, suit, claim, proceeding or investigation pending or, to GoldSpring’s
        knowledge, threatened against GoldSpring, which could reasonably be expected
        to
        have a material adverse effect on the condition, financial or otherwise,
        results
        of operations, business, prospects or properties of GoldSpring. GoldSpring
        is
        not, and to GoldSpring’s knowledge (having undertaken no independent
        investigation), no founder, director, officer or key employee is, a party
        or
        subject to the provisions of any order, writ, injunction, judgment or decree
        of
        any court or government agency or instrumentality that could reasonably be
        expected to have a material adverse effect on the condition, financial or
        otherwise, results of operations, business, prospects or properties of
        GoldSpring. There is no action, proceeding or investigation by GoldSpring
        currently pending or which GoldSpring intends to initiate.

       

      4. Covenants
        of the GoldSpring.
        GoldSpring covenants and agrees with Winfield as follows:

       

      (a) Stop
        Orders.
        GoldSpring will advise Winfield, promptly after it receives notice of issuance
        by the Securities and Exchange Commission (the “Commission”),
        any
        state securities commission or any other regulatory authority of any stop
        order
        or of any order preventing or suspending any offering of any securities of
        GoldSpring, or of the suspension of the qualification of the common stock
        of
        GoldSpring for offering or sale in any jurisdiction, or the initiation of
        any
        proceeding for any such purpose.

       

      (b) Listing.
        GoldSpring will maintain the listing or quotation of its common stock on
        the
        American Stock Exchange, Nasdaq SmallCap Market, Nasdaq National Market System,
        Bulletin Board, or New York Stock Exchange (whichever of the foregoing is
        at the
        time the principal trading exchange or market for the shares of common stock
        of
        GoldSpring (the “Principal
        Market”)),
        and
        will comply in all respects with its reporting, filing and other obligations
        under the bylaws or rules of the Principal Market, as applicable. GoldSpring
        will provide Winfield with copies of all notices it receives notifying
        GoldSpring of the threatened and actual delisting of its common stock from
        any
        Principal Market. As of the date of this Settlement Agreement, the Bulletin
        Board is and will be the Principal Market.

       

      (c) Market
        Regulations.
        GoldSpring shall notify the Commission, the Principal Market and applicable
        state authorities, in accordance with their requirements, of the transactions
        contemplated by this Settlement Agreement, and shall take all other necessary
        action and proceedings as may be required and permitted by applicable law,
        rule
        and regulation, for the legal and valid issuance of the GoldSpring Shares
        to
        Winfield and promptly provide copies thereof to Winfield.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      (d) Reporting
        Requirements.
        From
        the date of this Settlement Agreement and until the sooner of (i) two (2)
        years
        after the Closing Date, or (ii) until all the GoldSpring Shares have been
        resold
        or transferred by Winfield pursuant to the Registration Statement (as defined
        in
        Section 2(a)(ii) hereof) or pursuant to Rule 144, without regard to volume
        limitation, GoldSpring will (A) cause its common stock to continue to be
        registered under Section 12(b) or 12(g) of the 1934 Act, (B) comply in all
        material respects with its reporting and filing obligations under the 1934
        Act,
        (C) comply with all reporting requirements that are applicable to an issuer
        with
        a class of shares registered pursuant to Section 12(b) or 12(g) of the 1934
        Act,
        as applicable, and (D) comply with all requirements related to any registration
        statement filed pursuant to this Agreement. GoldSpring will use its best
        efforts
        not to take any action or file any document (whether or not permitted by
        the
        1933 Act or the 1934 Act or the rules thereunder) to terminate or suspend
        such
        registration or to terminate or suspend its reporting and filing obligations
        under said acts until three (3) years after the Closing Date. Until the resale
        of the GoldSpring Shares by Winfield, GoldSpring will use its best efforts
        to
        continue the listing or quotation of its common stock on a Principal Market
        and
        will comply in all respects with its reporting, filing and other obligations
        under the bylaws or rules of the Principal Market. GoldSpring agrees to timely
        file a Form D with respect to the GoldSpring Shares if required under Regulation
        D and to provide a copy thereof to Winfield promptly after such
        filing.

       

      (e) Taxes.
        From
        the date of this Settlement Agreement and until the sooner of (i) three (3)
        years after the Closing Date, or (ii) until all the GoldSpring Shares have
        been
        resold or transferred by Winfield pursuant to the Registration Statement
        (as
        defined in Section 2(a)(ii) hereof) or pursuant to Rule 144, without
        regard
        to volume limitations, GoldSpring will promptly pay and discharge, or cause
        to
        be paid and discharged, when due and payable, all lawful taxes, assessments
        and
        governmental charges or levies imposed upon the income, profits, property
        or
        business of GoldSpring; provided,
        however,
        that
        any such tax, assessment, charge or levy need not be paid if the validity
        thereof shall currently be contested in good faith by appropriate proceedings
        and if GoldSpring shall have set aside on its books adequate reserves with
        respect thereto, and provided, further, that GoldSpring will pay all such
        taxes,
        assessments, charges or levies forthwith upon the commencement of proceedings
        to
        foreclose any lien which may have attached as security therefore.

       

      (f) Insurance.
        From
        the date of this Settlement Agreement and until the sooner of (i) three (3)
        years after the Closing Date, or (ii) until all the GoldSpring Shares have
        been
        resold or transferred by Winfield pursuant to the Registration Statement
        (as
        defined in Section 2(a)(ii) hereof) or pursuant to Rule 144, without regard
        to
        volume limitations, GoldSpring will keep its assets which are of an insurable
        character insured by financially sound and reputable insurers against loss
        or
        damage by fire, explosion and other risks customarily insured against by
        companies in GoldSpring’s line of business, in amounts sufficient to prevent
        GoldSpring from becoming a co-insurer and not in any event less than one
        hundred
        percent (100%) of the insurable value of the property insured; and GoldSpring
        will maintain, with financially sound and reputable insurers, insurance against
        other hazards and risks and liability to persons and property to the extent
        and
        in the manner customary for companies in similar businesses similarly situated
        and to the extent available on commercially reasonable terms.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      (g) Books
        and Records.
        From
        the date of this Settlement Agreement and until the sooner of (i) three (3)
        years after the Closing Date, or (ii) until all the GoldSpring Shares have
        been
        resold or transferred by Winfield pursuant to the Registration Statement
        (as
        defined in Section 2(a)(ii) hereof) or pursuant to Rule 144, without regard
        to
        volume limitations, GoldSpring will keep true records and books of account
        in
        which full, true and correct entries will be made of all dealings or
        transactions in relation to its business and affairs in accordance with
        generally accepted accounting principles applied on a consistent
        basis.

       

      (h) Governmental
        Authorities.
        From
        the date of this Settlement Agreement and until the sooner of (i) three (3)
        years after the Closing Date, or (ii) until all the GoldSpring Shares have
        been
        resold or transferred by Winfield pursuant to the Registration Statement
        (as
        defined in Section 2(a)(ii) hereof) or pursuant to Rule 144, without regard
        to
        volume limitations, GoldSpring shall duly observe and conform in all material
        respects to all valid requirements of governmental authorities relating to
        the
        conduct of its business or to its properties or assets.

       

      (i) Intellectual
        Property.
        From
        the date of this Settlement Agreement and until the sooner of (i) three (3)
        years after the Closing Date, or (ii) until all the GoldSpring Shares have
        been
        resold or transferred by Winfield pursuant to the Registration Statement
        (as
        defined in Section 2(a)(ii) hereof) or pursuant to Rule 144, without regard
        to
        volume limitations, GoldSpring shall maintain in full force and effect its
        corporate existence, rights and franchises and all licenses and other rights
        to
        use intellectual property owned or possessed by it and reasonably deemed
        to be
        necessary to the conduct of its business.

       

      (j) Properties.
        From
        the date of this Settlement Agreement and until the sooner of (i) three (3)
        years after the Closing Date, or (ii) until all the GoldSpring Shares have
        been
        resold or transferred by Winfield pursuant to the Registration Statement
        (as
        defined in Section 2(a)(ii) hereof) or pursuant to Rule 144, without regard
        to
        volume limitations, GoldSpring will keep its properties in good repair, working
        order and condition, reasonable wear and tear excepted, and from time to
        time
        make all necessary and proper repairs, renewals, replacements, additions
        and
        improvements thereto; and GoldSpring will at all times comply with each
        provision of all leases to which it is a party or under which it occupies
        property if the breach of such provision could reasonably be expected to
        have a
        material adverse effect on GoldSpring’s operations.

       

      (k) Confidentiality/Public
        Announcement.
        From
        the date of this Settlement Agreement and until the sooner of (i) three (3)
        years after the Closing Date, or (ii) until all the GoldSpring Shares have
        been
        resold or transferred by Winfield pursuant to the Registration Statement
        (as
        defined in Section 2(a)(ii) hereof) or pursuant to Rule 144, without regard
        to
        volume limitations, GoldSpring agrees that except in connection with a Form
        8-K
        or the Registration Statement, it will not disclose publicly or privately
        the
        identity of Winfield, unless expressly agreed to in writing by Winfield or
        only
        to the extent required by law and then only upon five (5) days prior notice
        to
        Winfield. In any event and subject to the foregoing, GoldSpring undertakes
        to
        file a Form 8-K or make a public announcement describing the New Transaction
        Documents not later than is required by applicable law. In the Form 8-K or
        public announcement, GoldSpring will specifically disclose the amount of
        common
        stock outstanding immediately after the Closing Date. 

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      (l) Further
        Registration Statements.
        Except
        for a registration statement filed on behalf of the Winfield pursuant to
        Section
        2(a)(ii) of this Settlement Agreement, GoldSpring will not file any registration
        statements or amend any already filed registration statement, including but
        not
        limited to Form S-8, with the Commission or with state regulatory authorities
        without the consent of Winfield until the sooner of (i) the Registration
        Statement (as defined in Section 2(a)(ii) hereof) shall have been current
        and
        available for use in connection with the public resale of the Shares for
        180
        days, or (ii) until all the GoldSpring Shares have been resold or transferred
        by
        Winfield pursuant to the Registration Statement or Rule 144 (the “Exclusion
        Period”).
        The
        Exclusion Period shall be tolled during the pendency of an Event of
        Default.

       

      (m) Blackout.
        GoldSpring undertakes and covenants that until the end of the Exclusion Period
        it will not enter into any acquisition, merger, exchange or sale or other
        transaction that could have the effect of delaying the effectiveness of any
        pending registration statement or causing an already effective registration
        statement to no longer be effective or current for a period of fifteen (15)
        or
        more days.

       

      (n) Non-Public
        Information.
        GoldSpring covenants and agrees that neither it nor any other person acting
        on
        its behalf will provide Winfield or its agents or counsel with any information
        that GoldSpring believes constitutes material non-public information, unless
        prior thereto Winfield shall have agreed in writing to receive such information.
        GoldSpring understands and confirms that Winfield shall be relying on the
        foregoing representations in effecting transactions in securities of the
        GoldSpring.

       

      (o) Right
        of First Refusal. Until
        one
        year after the Required Effective Date, Winfield shall be given not less
        than
        ten (10) business days prior written notice of any proposed sale by GoldSpring
        of its common stock or other securities or debt obligations, except
        (i) securities issued or issuable to officers, directors, or full-time
        employees of GoldSpring pursuant to stock grants, stock purchases, and/or
        stock
        option plans or any other stock incentive program, agreement, or arrangement
        approved by all of the disinterested members of GoldSpring’s board of directors,
        (ii) securities issued as full or partial consideration in connection with
        a
        strategic merger, consolidation, or purchase of substantially all of the
        securities or assets of another corporation or entity, (iii) securities issued
        in connection with bank financing or equipment leasing transactions, (iv)
        shares
        of common stock issued upon conversion of other securities of GoldSpring
        held by
        Winfield, and (v) as has been described in the reports or other written
        information filed with the Commission or delivered to Winfield prior to the
        Closing Date (collectively the foregoing are “Excepted
        Issuances”).
        If
        Winfield exercises its rights pursuant to this Section 4(o) shall have the
        right
        during the ten (10) business days following receipt of the notice to purchase
        all or any portion of such offered common stock, debt or other securities
        in
        accordance with the terms and conditions set forth in the notice of sale.
        In the
        event such terms and conditions are modified during the notice period, Winfield
        shall be given prompt notice of such modification and shall have the right
        during the ten (10) business days following the notice of modification,
        whichever is longer, to exercise such right.

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      (p) Offering
        Restrictions.
        Until
        the earlier of (i) payment of the Debenture (including any amounts
        due
        thereunder) by GoldSpring to Winfield, or (ii) until all the GoldSpring
        Shares have been resold or transferred by Winfield pursuant to the Registration
        Statement or pursuant to Rule 144, without regard to volume limitations,
        except for the Excepted Issuances, without the prior written consent of
        Winfield, GoldSpring will not issue any equity, convertible debt or other
        securities convertible into common stock or equity of GoldSpring, which consent
        may be withheld for any reason.

       

      (q) Favored
        Nations Provision.
        Other
        than the Excepted Issuances, if at any time the Debenture is outstanding
        GoldSpring shall offer, issue or agree to issue any common stock or securities
        convertible into or exercisable for shares of common stock (or modify any
        of the
        foregoing which may be outstanding) to any person or entity at a price per
        share
        or conversion or exercise price per share which shall be less than the
        Conversion Price in respect of the GoldSpring Shares, without the consent
        of
        Winfield, then GoldSpring shall issue, for each such occasion, additional
        shares
        of its common stock to Winfield so that the average per share purchase price
        of
        the shares of common stock issued to Winfield shall automatically be reduced
        to
        such other lower price per share. The delivery to Winfield of the additional
        shares of common stock shall be not later than the closing date of the
        transaction giving rise to the requirement for GoldSpring to issue additional
        shares of common stock. Winfield is granted the registration rights described
        in
        Section 9 of the Subscription Agreement in relation to such additional shares
        of
        common stock except that the Filing Date and Effective Date vis-à-vis such
        additional common shares shall be, respectively, the sixtieth (60th)
        and one
        hundred and twentieth (120th)
        date
        after the closing date giving rise to the requirement to issue the additional
        shares of common stock. For purposes of the issuance and adjustment described
        in
        this paragraph, the issuance of any security of GoldSpring carrying the right
        to
        convert such security into shares of common stock or of any warrant, right
        or
        option to purchase common stock shall result in the issuance of the additional
        shares of common stock upon the issuance of such convertible security, warrant,
        right or option and again at any time upon any subsequent issuances of shares
        of
        common stock upon exercise of such conversion or purchase rights if such
        issuance is at a price lower than the Conversion Price in effect upon such
        issuance. Winfield’s rights set forth in this section are in addition to any
        other rights Winfield has pursuant to this Settlement Agreement and any New
        Transaction Document.

       

      5. Further
        Assurances.
        GoldSpring hereby agrees, at its own cost and expense, to execute and to
        deliver
        such additional documents, agreements and instruments and take or cause to
        be
        taken such additional action as Winfield may request in order to more fully
        give
        effect to the settlement reflected in this Settlement Agreement. GoldSpring
        hereby appoints Winfield and its representatives, with full power of
        substitution, as GoldSpring’s attorney-in-fact to sign any document, agreement
        or instrument, or take any action, which GoldSpring would take pursuant to
        the
        provisions hereof if GoldSpring fails to perform its obligations
        hereunder.

      

      6. Specific
        Performance.
        GoldSpring hereby acknowledges that irreparable damage would occur in the
        event
        that any of the provisions of this Settlement Agreement, and the other New
        Transaction Documents, are not performed in accordance with their specific
        terms, or are otherwise breached. Accordingly, the parties agree that Winfield
        is entitled to an injunction to prevent breaches of this Settlement Agreement,
        and the other New Transaction Documents, and to enforce specifically the
        terms
        and provisions hereof and thereof in addition to any other remedy to which
        it is
        entitled in law or in equity.

      

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      7. Miscellaneous.
        

      

      (a) Entire
        Agreement.
        This
        Settlement Agreement, together with the other New Transaction Documents,
        constitute the entire agreement among the parties, and supersede all prior
        agreements, understandings and arrangements, oral or written, among the par-ties
        with respect to the subject matter hereof.

      

      (b) Amendments
        and Waivers.
        This
        Settlement Agreement may not be modified or amended except by an instrument
        or
        instruments in writing signed by the party against whom enforcement of any
        such
        modification or amendment is sought. Any party may, by an instrument in writing,
        waive performance or compliance by any other party with respect to any term
        or
        provision of this Settlement Agreement on the part of such other party to
        be
        performed or complied with. The waiver by any party of a breach of any term
        or
        provision of this Settlement Agreement shall not be construed as a waiver
        of any
        subsequent breach.

      

      (c) Notices.
        Any
        notice or other communication required or permitted hereunder shall be in
        writing and delivered at the addresses designated below, or mailed by registered
        or certified mail, return receipt requested, postage prepaid, addressed as
        follows, or to such other address or addresses as may hereafter be furnished
        by
        one party to the other party in compliance with the terms hereof:

       

      
        If
          to
          Winfield to:

      

      

      The
        InterGroup Corporation

      820
        Moraga Drive

      Los
        Angeles, CA 90049

      Attn.:
        John V. Winfield

      

      with
        a
        copy to:

      

      Bondy
        & Schloss LLP

      60
        East
        42nd
        St.,
        37th
        Floor

      New
        York,
        NY 10165

      Attn:
        Jeffrey A. Rinde, Esq.

      

      If
        to
        GoldSpring to:

      

      GoldSpring,
        Inc.

      8585
        East
        Hartford Drive, Suite 400

      Scottsdale,
        AZ 85255

      Attn.:
        Robert T. Faber

      

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      with
        a
        copy to:

      ____________________

      ____________________

      ____________________

      Attn.:_________________

      

      All
        such
        notices and communications shall be effective when delivered at the designated
        addresses or five days after deposited in the mails in conformity with the
        provisions hereof.

      

      (d) Assignment.
        Neither
        this Settlement Agreement nor any right, remedy, obligation or liability
        arising
        hereunder or by reason hereof shall be assignable by either party without
        the
        prior written consent of the other party.

      

      (e) Section
        and Other Headings.
        The
        section and other headings contained in this Settlement Agreement are for
        reference purposes only and shall not be deemed to be a part of this Settlement
        Agreement or to affect the meaning or interpretation of this Settlement
        Agreement.

      

      (f) Execution
        in Counterparts.
        This
        Settlement Agreement may be executed in counterparts, each of which shall
        be
        deemed to be an original and all of which together shall be deemed to be
        one and
        the same instrument.

      

      (g) Governing
        Law.
        This
        Settlement Agreement shall be governed by and construed in accordance with
        the
        laws of the City of New York, State of New York, without giving effect to
        the
        conflicts of law provisions thereof.

      

      (h) Consent
        to Jurisdiction.
        Each of
        the parties hereto: (i) consents and submits to the jurisdiction of the Courts
        of the State of New York and of the Courts of the United States for a judicial
        district within the territorial limits of the State of New York for all purposes
        of this Settlement Agreement, including, without limitation, any action or
        proceeding instituted for the enforcement of any right, remedy, obligation
        and
        liability arising under or by reason of this Settlement Agreement; and (ii)
        consents and submits to the venue of such action or proceeding in the City
        and
        County of New York (or such judicial district of a Court of the United States
        as
        shall include the same).

       

      

      

      

      [THE
        REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      

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

      

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

      GOLDSPRING,
        INC.

      

      By:____________________________      

      Name:

      Its:

      

      

      JOHN
        V.
        WINFIELD

      

      

      JOHN
        V. WINFIELD IRA-1

      

      By:____________________________     

      Name:

      Its:

      

      JOHN
        V. WINFIELD IRA-2

      

      By:____________________________    

      Name:

      Its:

      

      SANTA
        FE FINANCIAL CORP.

      

      By:____________________________    

      Name:

      Its:

      

      PORTSMOUTH
        SQUARE, INC.

      

      By:____________________________    

      Name:

      Its:

      

      THE
        INTERGROUP CORPORATION

      

      By:____________________________   

      Name:

      Its:

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      SCHEDULE
        A

      

      (List
        of Certificates)

      

      

      
        	
                 

                 

                Name
                  and Address

              	
                 

                Number
                  of Conversion Shares (#)

              
	
                 

                John
                  V. Winfield

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

              	
                 

                __________

              
	
                 

                John
                  V. Winfield IRA-1

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	
                 

                __________

              
	
                 

                John
                  V. Winfield IRA-2

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	
                 

                __________

              
	
                 

                Santa
                  Fe Financial Corp.

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	
                 

                __________

              
	
                 

                Portsmouth
                  Square, Inc.

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	
                 

                __________

              
	
                 

                The
                  InterGroup Corporation

                820
                  Moraga Drive

                Los
                  Angeles, CA 90049

                Attn.:
                  John V. Winfield

              	
                 

                __________

              

      

       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      EXHIBIT
        A

      

      (Form
        of Debenture)

       

       

      
 

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      EXHIBIT
        B

      

      (Form
        of Subscription Agreement)

       

       

       

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      EXHIBIT
        C

      

      (Form
        of Put Agreement)

       

       

      
 

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      EXHIBIT
        D

      

      (Form
        of Promissory Note)

       

       

      
 

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      EXHIBIT
        E

      

      (Form
        of Escrow Agreement)

       

       

      
 

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      EXHIBIT
        F

      

      (Form
        of Security Agreement)

       

       

       

       

      
        
           

        

          20

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