Document:

THIS
        DEBENTURE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS DEBETNTURE
        HAVE
        NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).
        THIS DEBENTURE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS DEBENTURE
        MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
        REGISTRATION STATEMENT FOR THIS DEBENTURE OR THE COMMON SHARES ISSUABLE UPON
        CONVERSION OF THIS DEBENTURE UNDER SAID ACT, OR AN OPINION OF COUNSEL IN
        FORM,
        SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS
        THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT
        TO RULE
        144 UNDER SAID ACT.

       

      SECURED
        CONVERTIBLE DEBENTURE

       

      FOR
        VALUE RECEIVED,
        GOLDSPRING, INC.
        a
        Florida corporation (hereinafter called the “Company”
        or
“Borrower”),
        hereby promises to pay to the order of ___________________________ or registered
        assigns (the “Holder”)
        the
        sum of __________________ Dollars ($___________) (the “Principal
        Amount”),
        on
March,
        2007
        (the
“Maturity
        Date”),
        and
        to pay interest on the unpaid principal balance hereof at the rate of twelve
        percent (12%) per annum (the “Initial
        Interest Rate”)
        from
        March
        ___, 2005 (the “Issue
        Date”)
        until
        the same becomes due and payable, whether at maturity or upon acceleration
        or by
        prepayment or otherwise. All payments due hereunder (to the extent not converted
        into common stock, par value $0.000666 per share, of the Borrower (the
“Common
        Stock”)
        in
        accordance with the terms hereof) shall be made in lawful money of the United
        States of America or, at the option of the Holder, in whole or in part, in
        shares of Common Stock of the Borrower valued at the then applicable Conversion
        Price (as defined herein). All payments shall be made at such address as
        the
        Holder shall hereafter give to the Borrower by written notice made in accordance
        with the provisions of this Debenture. Whenever any amount expressed to be
        due
        by the terms of this Debenture is due on any day which is not a business
        day,
        the same shall instead be due on the next succeeding day which is a business
        day. As used in this Debenture, the term “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. This Debenture shall be secured pursuant to the terms of that certain
        Security Agreement by and between the Borrower and the Holder of even date
        herewith. Each capitalized term used herein, and not otherwise defined, shall
        have the meaning ascribed thereto in that certain Settlement Agreement, dated
        March
        __,
        2005, pursuant to which this Debenture (and substantially identical Debentures
        other than the Principal Amount) were originally issued to Holder and certain
        related parties (the “
        Agreement”).

      

      The
        following terms shall apply to this Debenture: 

      

      ARTICLE
        I. INTEREST AND AMORTIZATION

      

      1.1  Interest
        Rate.
        Subject
        to Section 1.3 hereof, interest payable on this Note shall accrue at a rate
        per
        annum (the “Interest Rate”) of twelve percent (12%). Interest on the Principal
        Amount shall be simple interest, payable monthly, in arrears, commencing
        on
        April 1, 2005 and on the first day of each consecutive calendar month thereafter
        (each, a “Repayment
        Date”)
        and on
        the Maturity Date, whether by acceleration or otherwise.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      1.2
        Minimum Monthly Principal Payments.
        Amortizing payments of the outstanding Principal Amount of this Note
        shall commence on the first (1st) Repayment Date and shall recur on each
        succeeding Repayment Date thereafter until the Principal Amount has been
        repaid
        in full, whether by the payment of cash or by the conversion of such principal
        into Common Stock pursuant to the terms hereof. On each repayment Date, the
        Borrower shall make payments to the Holders in the amount of one-twenty-fourth
        (1/24th) of the initial Principal Amount (the “Monthly
        Principal Amount”),
        together with any accrued and unpaid interest then due on such portion of
        the
        Principal Amount plus any and all other amounts which are then owing under
        this
        Note that have not been paid (the Monthly Principal Amount, together with
        such
        accrued and unpaid interest and such other amounts, collectively, the
“Monthly
        Amount”).
        Payments of Principal Amount made by Borrower shall be applied to Monthly
        Amounts commencing with the Monthly Amounts thereafter in chronological order.
        Any Principal Amount that remains outstanding on the Maturity Date shall
        be due
        and payable on the Maturity Date.

      

      1.3 Default
        Interest Rate.
        Following the occurrence and during the continuance of an Event of Default,
        the
        annual interest rate on this Note shall automatically be increased to eighteen
        percent (18%) (the “Default
        Interest Rate”),
        and
        all outstanding obligations under this Note, including unpaid interest, shall
        continue to accrue interest from the date of such Event of Default at such
        interest rate applicable to such obligations until such Event of Default
        is
        cured or waived (any such amount referred to herein as “Default
        Interest”).

      

      ARTICLE
        II. CONVERSION RIGHTS

      

      2.1 Conversion
        Right.
        The
        Holder shall have the right at any time, and from time to time, on or prior
        to
        the Maturity Date to convert all or any part of the outstanding and unpaid
        principal amount of this Debenture into fully paid and non-assessable shares
        of
        Common Stock (the “Conversion
        Shares”),
        as
        such Common Stock exists on the Issue Date, or any shares of capital stock
        or
        other securities of the Borrower into which such Common Stock shall hereafter
        be
        changed or reclassified at the Conversion Price (as defined below) determined
        as
        provided herein (a “Conversion”);
        provided,
        however,
        that in
        no event shall the Holder be entitled to convert any portion of this Debenture
        in excess of that portion of this Debenture upon conversion of which the
        sum of
        (1) the number of shares of Common Stock beneficially owned by the Holder
        and
        its affiliates (other than shares of Common Stock which may be deemed
        beneficially owned through the ownership of the unconverted portion of this
        Debenture or the unexercised or unconverted portion of any other security
        of the
        Borrower subject to a limitation on conversion or exercise analogous to the
        limitations contained herein) and (2) the number of Conversion Shares issuable
        upon the conversion of the portion of this Debenture with respect to which
        the
        determination of this proviso is being made, would result in beneficial
        ownership by the Holder and its affiliates of more than 4.9% of the outstanding
        shares of Common Stock. For purposes of the proviso to the immediately preceding
        sentence, beneficial ownership shall be determined in accordance with Section
        13(d) of the Securities Exchange Act of 1934, as amended, and Regulations
        13D-G
        thereunder, except as otherwise provided in clause (1) of such proviso. The
        Holder of this Debenture may waive the limitations set forth herein by written
        notice of not less than sixty-one (61) days to the Company. The number of
        Conversion Shares to be issued upon each conversion of this Debenture shall
        be
        determined by dividing the Conversion Amount (as defined below) by the
        applicable Conversion Price in effect on the date the notice of conversion,
        in
        the form attached hereto as Exhibit
        A
        (the
“Notice
        of Conversion”),
        is
        delivered to the Borrower by the Holder in accordance with Section 2.5 below.
        (the “Conversion
        Date”).
        The
        term “Conversion
        Amount”
        means,
        with respect to any conversion of this Debenture, the sum of (1) the principal
        amount of this Debenture to be converted in such conversion plus
        (2)
        accrued and unpaid interest, if any, on such principal amount at the interest
        rates provided in this Debenture to the Conversion Date plus
        (3)
        default interest, if any, on the amounts referred to in the immediately
        preceding clauses (1) and/or (2) plus
        (4) at
        the Holder’s option, any other amounts owed to the Holder pursuant to this
        Debenture. 

      

      
        
           

        

        
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      2.2 Conversion
        Price.
        

      

      (a) Calculation
        of Conversion Price. The
        Conversion Price shall be equal to the lesser of: (i) eighty-five percent
        (85%)
        of the average of the five (5) lowest closing bid prices of the Common Stock
        as
        reported by Bloomberg L.P. for the twenty (20) trading days preceding the
        date
        the Borrower is obligated to pay the Mandatory Redemption Payment; and (ii)
        eighty-five percent (85%) of the average of the five (5) lowest closing bid
        prices of the Common Stock as reported by Bloomberg L.P. for the twenty (20)
        trading days preceding the date of any such conversion; provided,
        however,
        until
        the effective date of the Registration Statement, the Conversion Price shall
        be
        fifty-percent (50%) of the average of the five (5) lowest closing bid prices
        of
        the Common Stock as reported by Bloomberg L.P. for the twenty (20) trading
        days
        preceding the date of any such conversion. 

      

      Anything
        to the contrary hereinabove notwithstanding, in no event shall the Conversion
        Price be higher than (i) $0.1131 and (ii) the Conversion Price of the
        Convertible Notes (as adjusted from time to time), whichever is lower
(the
        “Conversion Price”).
        The
        Conversion Price shall be subject, as set forth in Section 2.7, to equitable
        adjustments upon the occurrence of certain events including, but not limited
        to,
        stock splits, reverse stock splits, stock dividends or rights offerings by
        the
        Borrower relating to the Borrower’s securities or the securities of any
        subsidiary of the Borrower, combinations, recapitalization, reclassifications,
        extraordinary distributions and similar events. 

      

      
        (b) Deficiency
          Upon Conversion.
          Upon
          Conversion, in the event of any deficiency of any amounts due Holder
          hereunder, Borrower agrees to pay Holder, at Holder’s option any such deficiency
          in either cash or additional shares of Common Stock. If the Holder elects
          to be
          paid such deficiency in Common Stock, such Common Stock shall be valued
          at the
          Conversion Price, then in effect.

      

      

      2.3
         Application
        of Conversion Amounts.
        Any
        amounts converted by the Holder pursuant to Section 2.1 or paid by the Borrower
        shall be deemed to constitute payments of and applied, (i) first, any amounts
        owed other than accrued and unpaid interest (ii) second, against accrued
        and
        unpaid interest on the Principal Amount, and (iii) third, against the Principal
        Amount.

      

      2.4 Authorized
        Shares.
        The
        Borrower covenants that during the period the conversion right exists, the
        Borrower will reserve from its authorized and unissued Common Stock a sufficient
        number of shares, free from preemptive rights, to provide for the issuance
        of
        Common Stock upon the full conversion of this Debenture and the Convertible
        Notes. As of the date of issuance of this Debenture, _____________
        authorized and unissued shares of Common Stock have been duly reserved for
        issuance upon conversion of this Debenture and the Convertible Notes (the
        “Reserved
        Amount”).
        The
        Reserved Amount shall be increased from time to time in accordance with the
        Borrower’s obligations pursuant to the Transaction Documents. The Borrower
        represents that upon issuance, such shares will be duly and validly issued,
        fully paid and non-assessable. In addition, if the Borrower shall issue any
        securities or make any change to its capital structure which would change
        the
        number of shares of Common Stock into which this Debenture and the 2004
        Debentures shall be convertible at their then current conversion price, the
        Borrower shall at the same time make proper provision so that thereafter
        there
        shall be a sufficient number of shares of Common Stock authorized and reserved,
        free from preemptive rights, for conversion of this Debenture. The Borrower
        (i)
        acknowledges that it has irrevocably instructed the Escrow Agent to issue
        certificates for the Common Stock issuable upon conversion of this Debenture,
        and (ii) agrees that its issuance of this Debenture shall constitute full
        authority to its officers and agents who are charged with the duty of executing
        stock certificates to execute and issue the necessary certificates for shares
        of
        Common Stock in accordance with the terms and conditions of this Debenture
        and
        any other of the Transaction Documents.

      

      
        
           

        

        
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      If,
        at
        any time a Holder of this Debenture submits a Notice of Conversion, and the
        Borrower does not have sufficient authorized but unissued shares of Common
        Stock
        available to effect such conversion in accordance with the provisions of
        this
        Article II (a “Conversion
        Default”),
        the
        Borrower shall issue to the Holder all of the shares of Common Stock which
        are
        then available to effect such conversion. The portion of this Debenture which
        the Holder included in its Conversion Notice and which exceeds the amount
        which
        is then convertible into available shares of Common Stock (the “Excess
        Amount”)
        shall,
        notwithstanding anything to the contrary contained herein, not be convertible
        into Common Stock in accordance with the terms hereof until (and at the Holder’s
        option at any time after) the date additional shares of Common Stock are
        authorized by the Borrower to permit such conversion. The Borrower shall
        use its
        best efforts to authorize a sufficient number of shares of Common Stock as
        soon
        as practicable following the earlier of (i) such time that the Holder notifies
        the Borrower or that the Borrower otherwise becomes aware that there are
        or
        likely will be insufficient authorized and unissued shares to allow full
        conversion thereof and (ii) a Conversion Default. The Borrower shall send
        notice
        to the Holder of the authorization of additional shares of Common Stock,
        and the
        Authorization Date.

      

      Nothing
        herein shall limit the Holder’s right to pursue actual damages for the
        Borrower’s failure to maintain a sufficient number of authorized shares of
        Common Stock, and each Holder shall have the right to pursue all remedies
        available at law or in equity (including degree of specific performance and/or
        injunctive relief). 

      

      2.5 Method
        of Conversion.

      

      (a) Mechanics
        of Conversion. Subject
        to Section 2.1, this Debenture may be converted by the Holder in whole or
        in
        part at any time from time to time after the Issue Date, by (A) submitting
        to
        the Escrow Agent a Notice of Conversion (by facsimile or other reasonable
        means
        of communication dispatched on the Conversion Date prior to 5:00 p.m., New
        York,
        New York time) and (B) subject to Section 2.5(b), surrendering this Debenture
        at
        the principal office of the Escrow Agent.

      

      
        
           

        

        
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      (b) Surrender
        of Debenture Upon Conversion.
        Notwithstanding
        anything to the contrary set forth herein, upon conversion of this Debenture
        in
        accordance with the terms hereof, the Holder shall not be required to physically
        surrender this Debenture to the Escrow Agent unless the entire unpaid principal
        amount of this Debenture is so converted. The Escrow Agent shall maintain
        records showing the principal amount so converted and the dates of such
        conversions or shall use such other method, reasonably satisfactory to the
        Holder and the Borrower, so as not to require physical surrender of this
        Debenture upon each such conversion. In the event of any dispute or discrepancy,
        such records of the Escrow Agent shall be controlling and determinative in
        the
        absence of manifest error. Notwithstanding the foregoing, if any portion
        of this
        Debenture is converted as aforesaid, the Holder may not transfer this Debenture
        unless the Holder first physically surrenders this Debenture to the Escrow
        Agent, whereupon the Escrow Agent will forthwith issue and deliver upon the
        order of the Holder a new Debenture of like tenor, registered as the Holder
        (upon payment by the Holder of any applicable transfer taxes) may request,
        representing in the aggregate the remaining unpaid principal amount of this
        Debenture.

      

      THE
        HOLDER AND ANY ASSIGNEE, BY ACCEPTANCE OF THIS DEBENTURE, ACKNOWLEDGE AND
        AGREE
        THAT, BY REASON OF THE PROVISIONS OF THIS PARAGRAPH, FOLLOWING CONVERSION
        OF A
        PORTION OF THIS DEBENTURE, THE UNPAID AND UNCONVERTED PRINCIPAL AMOUNT OF
        THIS
        DEBENTURE REPRESENTED BY THIS DEBENTURE MAY BE LESS THAN THE AMOUNT STATED
        ON
        THE FACE HEREOF.

      

      (c) Payment
        of Taxes. The
        Borrower shall not be required to pay any tax which may be payable in respect
        of
        any transfer involved in the issue and delivery of shares of Common Stock
        or
        other securities or property on conversion of this Debenture in a name other
        than that of the Holder (or in street name), and the Escrow Agent or the
        Transfer Agent, as the case may be, shall not be required to issue or deliver
        any such shares or other securities or property unless and until the person
        or
        persons (other than the Holder or the custodian in whose street name such
        shares
        are to be held for the Holder’s account) requesting the issuance thereof shall
        have paid to the Escrow Agent or the Transfer Agent, as the case may be,
        the
        amount of any such tax or shall have established to the satisfaction of the
        Escrow Agent or the Transfer Agent, as the case may be, that such tax has
        been
        paid.

      

      (d) Delivery
        of Common Stock Upon Conversion.
        Upon
        receipt by the Escrow Agent from the Holder of a facsimile transmission (or
        other reasonable means of communication) of a Notice of Conversion meeting
        the
        requirements for conversion as provided in this Section 2.5, the Escrow Agent
        shall issue and deliver or cause to be issued and delivered to or upon the
        order
        of the Holder certificates for the Common Stock issuable upon such conversion
        within two (2) business days (the “Deadline”) after such receipt (and, solely in
        the case of conversion of the entire unpaid principal amount hereof, surrender
        of this Debenture) in accordance with the terms hereof.

      

      (e) Obligation
        of Escrow Agent to Deliver Common Stock.
        Upon
        receipt by the Escrow Agent of a Notice of Conversion, the Holder shall be
        deemed to be the Holder of record of the Common Stock issuable upon such
        conversion, the outstanding principal amount and the amount of accrued and
        unpaid interest (and any other unpaid amounts) on this Debenture shall be
        reduced to reflect such conversion, and, unless the Borrower defaults on
        its
        obligations under this Article II, all rights with respect to the portion
        of
        this Debenture being so converted shall forthwith terminate except the right
        to
        receive the Common Stock or other securities, cash or other assets, as herein
        provided, on such conversion. If the Holder shall have given a Notice of
        Conversion as provided herein, the Escrow Agent’s obligation to issue and
        deliver the certificates for Common Stock shall be absolute and unconditional,
        irrespective of the absence of any action by the Holder to enforce the same,
        any
        waiver or consent with respect to any provision thereof, the recovery of
        any
        judgment against any person or any action to enforce the same, any failure
        or
        delay in the enforcement of any other obligation of the Borrower to the holder
        of record, or any setoff, counterclaim, recoupment, limitation or termination,
        or any breach or alleged breach by the Holder of any obligation to the Borrower,
        and irrespective of any other circumstance which might otherwise limit such
        obligation of the Borrower to the Holder in connection with such conversion.
        The
        Conversion Date with respect to a Notice of Conversion shall be the date
        on
        which the Notice of Conversion is given so long as the Notice of Conversion
        is
        received by the Escrow Agent before 5:00 p.m., New York, New York time, on
        such
        date; or if received after 5:00 p.m. New York, New York time the Conversion
        Date
        shall be the following date.

      

      
        
           

        

        
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      2.6 Concerning
        the Shares.
        The
        shares of Common Stock issuable upon conversion of this Debenture may not
        be
        sold or transferred unless (i) such shares are sold pursuant to an effective
        registration statement under the Act or (ii) the Borrower or its transfer
        agent
        shall have been furnished with an opinion of counsel (which opinion shall
        be in
        form, substance and scope customary for opinions of counsel in comparable
        transactions) to the effect that the shares to be sold or transferred may
        be
        sold or transferred pursuant to an exemption from such registration or (iii)
        such shares are sold or transferred pursuant to Rule 144 under the Act (or
        a
        successor rule) (“Rule
        144”)
        or
        (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of
        the Borrower who agrees to sell or otherwise transfer the shares only in
        accordance with this Section 2.6 and who is an Accredited Investor (as defined
        in the Act). Except as otherwise provided in the Agreement (and subject to
        the
        removal provisions set forth below), until such time as the shares of Common
        Stock issuable upon conversion of this Debenture have been registered under
        the
        Act as contemplated by Article IV hereof or otherwise may be sold pursuant
        to
        Rule 144 without any restriction as to the number of securities as of a
        particular date that can then be immediately sold, each certificate for shares
        of Common Stock issuable upon conversion of this Debenture that has not been
        so
        included in an effective registration statement or that has not been sold
        pursuant to an effective registration statement or an exemption that permits
        removal of the legend, shall bear a legend substantially in the following
        form,
        as appropriate:

      

      “THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED
        OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
        SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND
        SCOPE
        CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION
        IS NOT REQUIRED UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
        ACT.”

      

      The
        legend set forth above shall be removed and the Borrower shall issue to the
        Holder a new certificate therefore free of any transfer legend if (i) the
        Borrower or its transfer agent shall have received an opinion of counsel,
        in
        form, substance and scope customary for opinions of counsel in comparable
        transactions, to the effect that a public sale or transfer of such Common
        Stock
        may be made without registration under the Act, including the provisions
        of Rule
        144 and the shares are so sold or transferred, or (ii) in the case of the
        Common
        Stock issuable upon conversion of this Debenture, such security is registered
        for sale by the Holder under an effective registration statement filed under
        the
        Act or otherwise may be sold pursuant to Rule 144 without any restriction
        as to
        the number of securities as of a particular date that can then be immediately
        sold. Nothing in this Debenture shall (i) limit the Borrower’s obligation under
        the Agreement or (ii) affect in any way the Holder’s obligations to comply with
        applicable prospectus delivery requirements upon the resale of the securities
        referred to herein.

       

      
        
           

        

        
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      2.7 Effect
        of Certain Events.
        

      

      (a) Effect
        of Merger, Consolidation, Etc.
        At the
        option of the Holder, the sale, conveyance or disposition of all or
        substantially all of the assets of the Borrower to any Person (as defined
        below)
        other than to a wholly-owned subsidiary of the Borrower, the effectuation
        by the
        Borrower of a transaction or series of related transactions in which more
        than
        50% of the voting power of the Borrower is disposed of, or the consolidation,
        merger or other business combination of the Borrower with or into any other
        Person or Persons when the Borrower is not the survivor shall either: (i)
        be
        deemed to be an Event of Default (as defined in Article IV) or (ii) be treated
        pursuant to Section 2.7(b) hereof. “Person”
        shall
        mean any individual, corporation, limited liability company, partnership,
        association, trust or other entity or organization.

      

      (b) Adjustment
        Due to Merger, Consolidation, Etc. If,
        at
        any time when this Debenture is issued and outstanding, there shall be any
        merger, consolidation, exchange of shares, recapitalization, reorganization,
        or
        other similar event, as a result of which shares of Common Stock of the Borrower
        shall be changed into the same or a different number of shares of another
        class
        or classes of stock or securities of the Borrower or another entity, or in
        case
        of any sale or conveyance of all or substantially all of the assets of the
        Borrower other than in connection with a plan of complete liquidation of
        the
        Borrower and other than to a wholly-owned subsidiary of the Borrower, then
        the
        Holder of this Debenture shall thereafter have the right to receive upon
        conversion of this Debenture, upon the basis and upon the terms and conditions
        specified herein and in lieu of the shares of Common Stock immediately
        theretofore issuable upon conversion, such stock, securities or assets which
        the
        Holder would have been entitled to receive in such transaction had this
        Debenture been converted in full immediately prior to such transaction (without
        regard to any limitations on conversion set forth herein), and in any such
        case
        appropriate provisions shall be made with respect to the rights and interests
        of
        the Holder of this Debenture to the end that the provisions hereof (including,
        without limitation, provisions for adjustment of the Conversion Price and
        of the
        number of shares issuable upon conversion of the Debenture) shall thereafter
        be
        applicable, as nearly as may be practicable in relation to any securities
        or
        assets thereafter deliverable upon the conversion hereof. The Borrower shall
        not
        effect any transaction described in this Section 2.7(b) unless (a) it first
        gives, to the extent practicable, thirty (30) days prior written notice (but
        in
        any event at least fifteen (15) days prior written notice) of the record
        date of
        the special meeting of stockholders to approve, or if there is no such record
        date, the consummation of, such merger, consolidation, exchange of shares,
        recapitalization, reorganization or other similar event or sale of assets
        (during which time the Holder shall be entitled to convert this Debenture)
        and
        (b) the resulting successor or acquiring entity (if not the Borrower) assumes
        by
        written instrument the obligations of this Section 2.7(b). The above provisions
        shall similarly apply to successive consolidations, mergers, sales, transfers
        or
        share exchanges.

      

      
        
           

        

        
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      (c) Adjustment
        Due to Distribution. If
        the
        Borrower shall declare or make any distribution of its assets (or rights
        to
        acquire its assets) to holders of Common Stock as a dividend, stock repurchase,
        by way of return of capital or otherwise (including any dividend or distribution
        to the Borrower’s shareholders in cash or shares (or rights to acquire shares)
        of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”),
        then
        the Holder of this Debenture shall be entitled, upon any conversion of this
        Debenture after the date of record for determining shareholders entitled
        to such
        Distribution, to receive the amount of such assets which would have been
        payable
        to the Holder with respect to the shares of Common Stock issuable upon such
        conversion had such Holder been the holder of such shares of Common Stock
        on the
        record date for the determination of shareholders entitled to such
        Distribution.

      

      (d) Reclassification,
        etc.
        If the
        Borrower at any time shall, by reclassification or otherwise, change the
        Common
        Stock into the same or a different number of securities of any class or classes,
        this Debenture, as to the unpaid principal portion thereof and accrued interest
        thereon, shall thereafter be deemed to evidence the right to purchase an
        adjusted number of such securities and kind of securities as would have been
        issuable as the result of such change with respect to the Common Stock
        immediately prior to such reclassification or other change.

      

      (e) Stock
        Splits, Combinations and Dividends.
        If the
        shares of Common Stock are subdivided or combined into a greater or smaller
        number of shares of Common Stock, or if a dividend is paid on the Common
        Stock
        in shares of Common Stock, the Conversion Price shall be proportionately
        reduced
        in case of subdivision of shares or stock dividend or proportionately increased
        in the case of combination of shares, in each such case by the ratio which
        the
        total number of shares of Common Stock outstanding immediately after such
        event
        bears to the total number of shares of Common Stock outstanding immediately
        prior to such event.

      

      (f) Purchase
        Rights.
        If, at
        any time when this Debenture is issued and outstanding, the Borrower issues
        any
        convertible securities or rights to purchase stock, warrants, securities
        or
        other property (the “Purchase
        Rights”)
        pro
        rata to the record holders of its Common Stock, then the Holder of this
        Debenture will be entitled to acquire, upon the terms applicable to such
        Purchase Rights, the aggregate Purchase Rights which such Holder could have
        acquired if such Holder had held the number of shares of Common Stock acquirable
        upon complete conversion of this Debenture (without regard to any limitations
        on
        conversion contained herein) immediately before the date on which a record
        is
        taken for the grant, issuance or sale of such Purchase Rights or, if no such
        record is taken, the date as of which the record holders of Common Stock
        are to
        be determined for the grant, issue or sale of such Purchase Rights.

       

      (g)  Share
        Issuance.
        So long
        as this Debenture is outstanding, if the Borrower shall issue any Common
        Stock, prior to the complete conversion of this Debenture for a consideration
        less than the Conversion Price that would be in effect at the time of such
        issue, then, and thereafter successively upon each such issuance, the Conversion
        Price shall be reduced to such other lower issue price. For purposes of this
        adjustment, the issuance of any security or debt instrument of the Borrower,
        carrying the right to convert such security or debt instrument into Common
        Stock
        or of any warrant, right or option to purchase Common Stock or the modification
        of any of the foregoing which may be outstanding shall result in an adjustment
        to the Conversion Price upon the modification or issuance of the above-described
        security, debt instrument, warrant, right, or option and again upon the issuance
        of shares of Common Stock upon exercise of such conversion or purchase rights
        if
        such issuance is at a price lower than the then applicable Conversion Price.
        The
        reduction of the Conversion Price described in this paragraph is in addition
        to
        the other rights of the Holder described in the Settlement
        Agreement.

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      (h)  Notice
        of Adjustments.
        Upon
        the occurrence of each adjustment or readjustment of the Conversion Price
        as a
        result of the events described in the second sentence of Section 2.2(a) and/or
        this Section 2.7, the Borrower, at its expense, shall promptly compute such
        adjustment or readjustment and prepare and furnish to the Holder of a
        certificate setting forth such adjustment or readjustment and showing in
        detail
        the facts upon which such adjustment or readjustment is based. The Borrower
        shall, upon the written request at any time of the Holder, furnish to such
        Holder a like certificate setting forth (i) such adjustment or readjustment,
        (ii) the Conversion Price at the time in effect and (iii) the number of shares
        of Common Stock and the amount, if any, of other securities or property which
        at
        the time would be received upon conversion of the Debenture.

       

      (i) Spin-Off.
        Except
        for transactions between the Company and any wholly-owned subsidiary of the
        Company, if, at any time while any portion of this Debenture remains
        outstanding, the Company spins off or otherwise divests itself of a part
        of its
        business or operations or disposes of all or of a part of its assets in a
        transaction (the "Spin
        Off")
        in
        which the Company, in addition to or in lieu of any other compensation received
        and retained by the Company for such business, operations or assets, causes
        securities of another entity (the "Spin
        Off Securities")
        to be
        issued to security holders of the Company, the Company shall cause to be
        reserved Spin Off Securities equal to the number thereof which would have
        been
        issued to the Holder had all of the Holder's Debenture outstanding on the
        record
        date (the "Record
        Date")
        for
        determining the amount and number of Spin Off Securities to be issued to
        security holders of the Company (the "Outstanding
        Debentures")
        been
        converted as of the close of business on the trading day immediately before
        the
        Record Date (the "Reserved
        Spin Off Shares").

      

      2.8 Trading
        Market Limitations.
        Unless
        permitted by the applicable rules and regulations of the principal securities
        market on which the Common Stock is then listed or traded, in no event shall
        the
        Borrower issue upon conversion of or otherwise pursuant to this Debenture
        and
        the other Debentures issued pursuant to the Purchase Agreement more than
        the
        maximum number of shares of Common Stock that the Borrower can issue pursuant
        to
        any rule of the principal United States securities market on which the Common
        Stock is then traded (the “Maximum
        Share Amount”),
        subject to equitable adjustment from time to time for stock splits, reverse
        stock splits, stock dividends, combinations, capital reorganizations and
        similar
        events relating to the Common Stock occurring after the date hereof. Once
        the
        Maximum Share Amount has been issued (the date of which is hereinafter referred
        to as the “Maximum
        Conversion Date”),
        if
        the Borrower fails to eliminate any prohibitions under applicable law or
        the
        rules or regulations of any stock exchange, interdealer quotation system
        or
        other self-regulatory organization with jurisdiction over the Borrower or
        any of
        its securities on the Borrower’s ability to issue shares of Common Stock in
        excess of the Maximum Share Amount (a “Trading
        Market Prepayment Event”),
        at
        the Holder’s option and in lieu of any further right to convert this Debenture,
        in full satisfaction of the Borrower’s obligations under this Debenture, the
        Borrower shall pay to the Holder, within fifteen (15) business days of the
        Maximum Conversion Date (the “Trading
        Market Prepayment Date”),
        an
        amount equal to 135% times
        the
sum
        of (a)
        the then outstanding principal amount of this Debenture immediately following
        the Maximum Conversion Date, plus
        (b)
        accrued and unpaid interest on the unpaid principal amount of this Debenture
        to
        the Trading Market Prepayment Date, plus
        (c)
        Default Interest, if any, on the amounts referred to in clause (a) and/or
        (b)
        above, plus
        (d) any
        optional amounts that may be added thereto at the Maximum Conversion Date
        by the
        Holder in accordance with the terms hereof (the then outstanding principal
        amount of this Debenture immediately following the Maximum Conversion Date,
        plus
        the
        amounts referred to in clauses (b), (c) and (d) above shall collectively
        be
        referred to as the “Remaining
        Convertible Amount”).
        With
        respect to each Holder of Debentures, the Maximum Share Amount shall refer
        to
        such Holder’s pro rata
        share
        thereof determined in accordance with Section 6.9 below. In the event that
        the
        sum of (x) the aggregate number of shares of Common Stock issued upon conversion
        of this Debenture and the other Debentures issued pursuant to the Agreement
        plus
        (y) the
        aggregate number of shares of Common Stock that remain issuable upon conversion
        of this Debenture and the other Debentures issued pursuant to the Agreement,
        represents at least one hundred percent (100%) of the Maximum Share Amount
        (the
“Triggering
        Event”),
        the
        Borrower will use its best efforts to seek and obtain Stockholder Approval
        (or
        obtain such other relief as will allow conversions hereunder in excess of
        the
        Maximum Share Amount) as soon as practicable following the Triggering Event
        and
        before the Maximum Conversion Date. As used herein, “Stockholder
        Approval”
        means
        approval by the stockholders of the Borrower to authorize the issuance of
        the
        full number of shares of Common Stock which would be issuable upon full
        conversion of the then outstanding Debentures but for the Maximum Share
        Amount.

      

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      2.9 Status
        as Stockholder.
        Upon
        submission of a Notice of Conversion by a Holder, (i) the shares covered
        thereby
        (other than the shares, if any, which cannot be issued because their issuance
        would exceed such Holder’s allocated portion of the Reserved Amount or Maximum
        Share Amount) shall be deemed converted into shares of Common Stock and (ii)
        the
        Holder’s rights as a Holder of such converted portion of this Debenture shall
        cease and terminate, excepting only the right to receive certificates for
        such
        shares of Common Stock and to any remedies provided herein or otherwise
        available at law or in equity to such Holder because of a failure by the
        Borrower to comply with the terms of this Debenture. Notwithstanding the
        foregoing, if a Holder has not received certificates for all shares of Common
        Stock prior to the third (3rd) business day after the expiration of the Deadline
        with respect to a conversion of any portion of this Debenture for any reason,
        then (unless the Holder otherwise elects to retain its status as a holder
        of
        Common Stock by so notifying the Borrower) the Holder shall regain the rights
        of
        a Holder of this Debenture with respect to such unconverted portions of this
        Debenture and the Borrower shall, as soon as practicable, return such
        unconverted Debenture to the Holder or, if the Debenture has not been
        surrendered, adjust its records to reflect that such portion of this Debenture
        has not been converted. In all cases, the Holder shall retain all of its
        rights
        and remedies for the Borrower’s failure to convert this Debenture.

       

      ARTICLE
        III. CERTAIN COVENANTS

      

      3.1 Distributions
        on Capital Stock.
        So long
        as the Borrower shall have any obligation under this Debenture, the Borrower
        shall not without the Holder’s written consent (a) pay, declare or set apart for
        such payment, any dividend or other distribution (whether in cash, property
        or
        other securities) on shares of capital stock other than dividends on shares
        of
        Common Stock solely in the form of additional shares of Common Stock or (b)
        directly or indirectly or through any subsidiary make any other payment or
        distribution in respect of its capital stock.

      

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      3.2 Restriction
        on Stock Repurchases.
        So long
        as the Borrower shall have any obligation under this Debenture, the Borrower
        shall not without the Holder’s written consent redeem, repurchase or otherwise
        acquire (whether for cash or in exchange for property or other securities
        or
        otherwise) in any one transaction or series of related transactions any shares
        of capital stock of the Borrower or any warrants, rights or options to purchase
        or acquire any such shares.

      

      3.3 Borrowings.
        So long
        as the Borrower shall have any obligation under this Debenture, the Borrower
        shall not, without the Holder’s written consent, create, incur, assume or suffer
        to exist any liability for borrowed money, except (a) borrowings in existence
        or
        committed on the date hereof and of which the Borrower has informed Holder
        in
        writing prior to the date hereof, (b) indebtedness to trade creditors or
        financial institutions incurred in the ordinary course of business, or
(c)
        borrowings, the proceeds of which shall be used to repay this
        Debenture.

      

      3.4 Sale
        of Assets.
        So long
        as the Borrower shall have any obligation under this Debenture, the Borrower
        shall not, without the Holder’s written consent, sell, lease or otherwise
        dispose (collectively, a “Disposition”) of any significant portion of its
        assets, other than to a wholly-owned subsidiary of the Borrower, outside
        the
        ordinary course of business unless the proceeds of such Disposition is used
        to
        repay this Debenture. Any consent to the disposition of any assets may be
        conditioned on a specified use of the proceeds of such Disposition.

      

      3.5 Advances
        and Loans.
        So long
        as the Borrower shall have any obligation under this Debenture, the Borrower
        shall not, without the Holder’s written consent, lend money, give credit or make
        advances to any person, firm, joint venture or corporation, including, without
        limitation, officers, directors, employees, subsidiaries and affiliates of
        the
        Borrower, except loans, credits or advances (a) in existence or committed
        on the
        date hereof and which the Borrower has informed Holder in writing prior to
        the
        date hereof or (b) made in the ordinary course of business. 

       

      3.6
        Contingent Liabilities.
        So long
        as the Borrower shall have any obligation under this Debenture, the
        Borrower shall not, without the Holder’s written consent, assume, guarantee,
        endorse, contingently agree to purchase or otherwise become liable upon the
        obligation of any person, firm, partnership, joint venture or corporation,
        except by the endorsement of negotiable instruments for deposit or collection
        and except assumptions, guarantees, endorsements and contingencies (a) in
        existence or committed on the date hereof and which the Borrower has informed
        Holder in writing prior to the date hereof, and
        (b)
        similar
        transactions in the ordinary course of business.

      3.7  Convertible
        Notes.
        So long
        as the Borrower shall have any obligation under this Debenture, the Borrower
        shall not modify, amend, restate or otherwise alter in any way the Convertible
        Notes or enter into any other agreements with any of the holders of the
        Convertible Notes.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      ARTICLE
        IV. MANDATORY REGISTRATION
        RIGHTS

       

      4.1 Registrable
        Securities.
        The
        Company shall file with the Securities and Exchange Commission (the
“Commission”) on a Form SB-2 registration statement, (the “Registration
        Statement”)
        (or
        such other form that it is eligible to use) in order to register the Conversion
        Shares, together with any other shares of Common stock issuable hereunder
        (collectively the “Registrable
        Securities”)
        for
        resale and distribution under the 1933 Act not later than thirty (30) days
        after
        the Closing Date (the “Filing
        Date”),
        and
        cause to be declared effective not later than June 13, 2005 (the “Effective
        Date”).
        The
        Company will register not less than a number of shares of common stock in
        the
        Registration Statement that is equal to 150% of the Registrable Securities.
        The
        Registration Statement will immediately be amended or additional registration
        statements will be immediately filed by the Company as necessary to register
        additional shares of Common Stock to allow the public resale of all Common
        Stock
        included in and issuable by virtue of the Registrable Securities. Except
        for the
        shares of Common Stock set forth on Schedule 4.1, without the written consent
        of
        the Holder, no securities of the Company other than the Registrable Securities
        will be included in the Registration Statement. It shall be deemed an Event
        of
        Default at any time after the date the Registration Statement is declared
        effective by the Commission (“Actual
        Effective Date”)
        the
        Company has registered for unrestricted resale on behalf of the Holder fewer
        than 125% of the amount of Common Shares issuable upon full conversion of
        all
        sums due under the Debenture.

       

      4.2  Registration
        Procedures.
        If and whenever the Company is required by the
        provisions of Section 4.1 to effect the registration of any Registrable
        Securities under the 1933 Act, the Company will, as expeditiously as
        possible:

       

      

        	(a)  	
                subject
                  to the timelines provided in this Agreement, prepare and file with
                  the
                  Commission a registration statement required by Section 4, with
                  respect to
                  such securities and use its best efforts to cause such registration
                  statement to become and remain effective for the period of the
                  distribution contemplated thereby (determined as herein provided),
                  and
                  promptly provide to the holders of the Registrable Securities copies
                  of
                  all filing and Commission letters of comment and notify Holder
                  (by
                  telecopier provided by Holder) and Bondy & Schloss LLP (by telecopier)
                  on or before 6 pm EST on the same business day that the Company
                  receives
                  notice that (i) the Commission has no comments or no further comments
                  on
                  the Registration Statement, and (ii) the Registration statement
                  has been
                  declared effective, (failure to timely provide notice as required
                  by this
                  Section 4.2(a) shall be a material breach of the Company’s obligation and
                  an Event of Default as defined herein);

              

        

        	(b)  	
                prepare
                  and filed with the Commission such amendments and supplements to
                  the
                  Registration Statement and the prospectus used in connection therewith
                  as
                  may be necessary to keep such Registration Statement effective
                  until the
                  Registration Statement has been effective for a period of two (2)
                  years,
                  and comply with the provision of the 1933 Act with respect to the
                  disposition of all of the Registrable Securities covered by the
                  Registration Statement in accordance with the Holder’s intended method of
                  disposition set forth in the Registration Statement for such
                  period;

              

        

        	(c)  	
                furnish
                  to the Holder, at the Company’s expense, such number of copies of the
                  Registration Statement and the prospectus included therein (including
                  each
                  preliminary prospectus) as the Holder reasonably may request in
                  order to
                  facilitate the public sale or disposition of the securities covered
                  by the
                  Registration Statement;

              

        

        
          
             

          

          
            12

            
              

            

          

          
             

          

        

        	(d)  	
                use
                  its best efforts to register or qualify the Registrable Securities
                  covered
                  by the Registration Statement under the securities or “blue sky” laws of
                  such jurisdictions as the Holder shall request in writing, provided,
                  however, that the Company shall not for any such purpose be required
                  to
                  qualify generally to transact business as a foreign corporation
                  in any
                  jurisdiction where it is not so qualified or to consent to general
                  service
                  of process in any such jurisdiction;

              

        

        	(e)  	
                if
                  applicable, list the Registrable Securities covered by the Registration
                  Statement with any securities exchange on which the Common Stock
                  of the
                  Company is then listed;

              

        

        	(f)  	
                immediately
                  notify the Holder when a prospectus relating thereto is required
                  to be
                  delivered under the 1933 act, of the happening of any event of
                  which the
                  Company has knowledge as a result of which the prospectus contained
                  in
                  such registration statement, as then in effect, includes an untrue
                  statement of a material fact or omits to state a material fact
                  required to
                  be stated therein or necessary to make the statement therein no
                  misleading
                  in light o the circumstances then existing; and

              

         

        

          	(g)   	
                  provided
                    same would not be in violation of the provision of Regulation
                    FD under the
                    1934 Act, make available for inspection by the Holder, and any
                    attorney,
                    accountant or other agent retained by the Holder, all publicly
                    available,
                    non-confidential financial and other records, pertinent corporate
                    documents and properties of the Company, and cause the Company’s officers,
                    directors and employees to supply all publicly available, non-confidential
                    information reasonably request by the Holder, attorney, accountant
                    or
                    agent in connection with the Registration
                    Statement.

                

        

        
           

          4.3  Provision
            of Documents.
            In
            connection with the Registration Statement the Holder will furnish to the
            Company in writing such information and representation letters with respect
            to
            itself and the proposed distribution by it as reasonably shall be necessary
            in
            order to assure compliance with federal and applicable state securities
            laws.

           

          4.4. Non-Registration
            Events.
            The
            Company and the Holder will suffer damages if the Registration Statement
            is not filed by the Filing Date and not declared effective by the Commission
            by
            the Effective Date, and maintained in the manner and within the time
            periods
            contemplated by Section 4 hereof, and it would not be feasible to ascertain
            the
            extent of such damages with precision. Accordingly, if (A) the Registration
            Statement is not filed on or before the Filing Date, (B) is not declared
            effective on or before the Effective Date, (C) the Registration Statement
            is not
            declared effective within three (3) business days after receipt by the
            Company
            or its attorneys of a written or oral communication from the Commission
            that the
            Registration Statement will not be reviewed or that the Commission has
            no
            further comments, or the Registration Statement is filed and declared
            effective
            but shall thereafter cease to be effective (without being succeeded within
            fifteen (15) business days by an effective replacement or amended registration
            statement) for a period of time which shall exceed 30 days in the aggregate
            per
            year (defined as a period of 365 days commencing on the date the Registration
            Statement is declared effective) or more than 20 consecutive days (each
            such
            event referred to in clauses A through C of this Section 4.4 is referred
            to
            herein as a “Non-Registration Event”), then the Company shall deliver to the
            holder of Registrable Securities, as Liquidated Damages, an amount equal
            to two
            percent (2%) for each thirty (30) days or part thereof, thereafter of
            the
            Principal Amount of the Debenture remaining unconverted and purchase
            price of
            Conversion Shares issued upon conversion of the Debenture owned of record
            by the
            Holder which are subject to such Non-Registration Event. The Company
            must pay
            the Liquidated Damages in cash or an amount equal
            to
            two hundred percent of such cash Liquidated Damages if paid in additional
            shares
            of registered unlegended free trading
            shares of Common Stock. Such Common Stock shall be valued at a per share
            value
            equal to eighty-five percent (85%) of the average of the five (5) lowest
            closing
            bid prices of the Common Stock as reported by Bloomberg L.P. for the
            twenty (20)
            trading days preceding the first day of each thirty (30) day or shorter
            period
            for which Liquidated Damages are payable. The Liquidated Damages must
            be paid
            within ten (10) days after the end of each thirty (30) day period or
            shorter
            part thereof for which Liquidated Damages are payable. In the event the
            Registration Statement is filed by the Filing Date but is withdrawn prior
            to
            being declared effective by the Commission, then such Registration Statement
            will be deemed to have not been filed. All oral or written and accounting
            comments received from the Commission relating to the Registration Statement
            must be responded to within fifteen (15) business days. Failure to timely
            respond to such comments from the Commission is a Non-Registration Event
            for
            which Liquidated Damages shall accrue and be payable by the Company to
            the
            Holder of Registrable Securities at the same rate set forth above.
            Notwithstanding the foregoing, the Company shall not be liable to the
            Holder
            under this Section 4.4 for any events or delays occurring as a consequence
            of
            the acts or omissions of the Holder contrary to the obligations undertaken
            by
            Holder in this Agreement. Liquidated Damages will not accrue nor be payable
            pursuant to this Section 4.4 nor will a Non-Registration Event be deemed
            to have
            occurred for times during which Registrable Securities are transferable
            by the
            Holder of Registrable Securities pursuant to Rule 144(k) under the 1933
            Act.

        

      

      

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      4.5
         Expenses.
        All
        expenses incurred by the Company in complying with 

      Article
        IV, including, without limitation, all registration and filing fees, printing
        expenses, fees and disbursements of counsel and independent public accountants
        for the Company, fees and expenses (including reasonable counsel fees) incurred
        in connection with complying with state securities or “blue sky” laws, fees of
        the National Association of Securities Dealers, Inc., transfer taxes, fees
        of
        transfer agents and registrars, costs of insurance and fee of one counsel
        for
        the holder are called “Registration
        Expenses.”
        All
        selling commissions applicable to the sale of Registrable Securities, are
        called
“Selling
        Expenses.”
        The
        Company will pay all Registration Expenses in connection with the Registration
        Statement under Section 4.1. Selling Expenses in connection with the
        Registration Statement under Section 4 shall be borne by the
        Holder.

      

      4.6 Indemnification
        and Contribution.

      
         

        (a) In
          the
          event of a registration of any Registrable Securities under the
          1933
          Act pursuant to Section 4, the Company will, to the extent permitted by
          law,
          indemnify and hold harmless the Holder, each officer of the Holder, each
          director of the Holder, if any, who controls such Holder within the meaning
          of
          the 1933 Act, against any losses, claims, damages or liabilities, joint
          or
          several, to which the Holder, or controlling person may become subject
          under the
          1933 Act or otherwise, insofar as such losses, claims, damages or liabilities
          (or actions in respect thereof) arise out of or are based upon any untrue
          statement or alleged untrue statement of any material fact contained in
          the
          Registration Statement under-which such Registrable Securities were registered
          under the 1933 Act pursuant to this Section 4, any preliminary prospectus
          or
          final prospectus contained therein, or any amendment or supplement thereof,
          or
          arise out of or are based upon the omission or alleged omission to state
          therein
          a material fact required to be stated therein or necessary to make the
          statements therein not misleading in light of the circumstances when made,
          and
          will subject to the provisions of Section 4.6(c) reimburse the Holder,
          and each
          such controlling person for any legal or other expenses reasonably incurred
          by
          them in connection with investigating or defending any such loss, claim,
          damage,
          liability or action; provided, however, that the Company shall not be liable
          to
          the Holder to the extent that any such damages arise out of or are based
          upon an
          untrue statement or omission made in any preliminary prospectus if (i)
          the
          Holder failed to send or deliver a copy of the final prospectus delivered
          by the
          Company to the Holder with or prior to the delivery of written confirmation
          of
          the sale by the Holder to the person asserting the claim from which such
          damages
          arise, (ii) the final prospectus would have corrected such untrue statement
          or
          alleged untrue statement or such omission or alleged omission, or (iii)
          to the
          extent that any such loss, claim, damage or liability arises out of or
          is based
          upon an untrue statement or alleged untrue statement or omission or alleged
          omission so made in conformity with information furnished by any such Holder,
          or
          any such controlling person in writing specifically for use in such registration
          statement or prospectus.

         

        
          
             

          

          
            14

            
              

            

          

          
             

          

        

        (b)
          In the event of a registration of any of the Registrable Securities
          under the 1933 Act pursuant to Section 4, Holder, to the extent permitted
          by
          law, indemnifies and holds harmless the Company, and each person, if any,
          who
          controls the Company within the meaning of the 1933 Act, each officer of
          the
          Company who signs the Registration Statement, each director of the Company,
          against all losses, claims, damages or liabilities, joint or several, to
          which
          the Company or such officer or director may become subject under the 1933
          Act or
          otherwise, insofar as such losses, claims, damages or liabilities (or actions
          in
          respect thereof) arise out of or are based upon any untrue statement or
          alleged
          untrue statement of any material fact contained in the Registration Statement
          under which such Registrable Securities were registered under the 1933
          Act
          pursuant to this Section 4, any preliminary prospectus or final prospectus
          contained therein, or an amendment or supplement thereof, or arise out
          of or are
          based upon the omission or alleged omission to state therein a material
          fact
          required to be stated therein or necessary to make the statements therein
          not
          misleading, and will reimburse the Company and each such officer or director
          for
          any legal or other expenses reasonably incurred by them in connection with
          investigating or defending any such loss, claim, damage, liability or action,
          provided, however, that the Holder will be liable hereunder in any such
          case if
          and only to the extent that any such loss, claim, damage or liability arises
          out
          of or is based upon an untrue statement or alleged untrue statement or
          omission
          or alleged omission made in reliance upon and in conformity with information
          pertaining to the Holder, as such, furnished in writing to the Company
          by the
          Holder specifically for use in the Registration Statement or prospectus,
          and
          provided, further, however, that the liability of the Holder hereunder
          shall be
          limited to the net proceeds actually received by the Holder from the sale
          of
          Registrable Securities covered by the Registration Statement.

      

       

      (c) Promptly
        after receipt by an indemnified party hereunder of notice of the commencement
        of
        any action, such indemnified party shall, if a claim in respect thereof is
        to be
        made against the indemnifying party hereunder, notify the indemnifying party
        in
        writing thereof, but the omission so to notify the indemnifying shall not
        relieve it from any liability which it may have to such indemnified party
        other
        than under this Section 4.6(c) and shall only relieve it from any liability
        which it may have to such indemnified party under this Section 4.6(c) except
        and
        only if and to the extent the indemnifying party is prejudiced by such omission.
        In case any such action shall be brought against any indemnified party and
        it
        shall notify the indemnifying party of the commencement thereof, the
        indemnifying party shall be entitled to participate in and, to the extent
        it
        shall wish, to assume and undertake the defense thereof with counsel
        satisfactory to such indemnified party, and, after notice from the indemnifying
        party to such indemnified party of its election so to assume and undertake
        the
        defense thereof, the indemnifying party shall not be liable to such indemnified
        party under this Section 4.6(c) for any legal expenses subsequently incurred
        by
        such indemnified party in connection with the defense thereof other than
        reasonable costs of investigation and of liaison with counsel so selected,
        provided, however, that, if the defendants in any such action include both
        the
        indemnified party and the indemnifying party and the indemnified party shall
        have reasonably concluded that there may be reasonable defenses available
        to it
        which are different from or additional to those available to the indemnifying
        party or if the interests of the indemnified party reasonably may be deemed
        to
        conflict with the interests of the indemnifying party, the indemnified parties,
        as a group, shall have the right to select one separate counsel and to assume
        such legal defenses and otherwise to participate in the defense of such action,
        with the reasonable expenses and fees of such separate counsel and other
        expenses related to such participation to be reimbursed by the indemnifying
        party as incurred.

       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      (d)  In
        order
        to provide for just and equitable contribution in the event of joint liability
        under the l933 Act in any case in which either (i) the Holder, or any
        controlling person of the Holder, makes a claim for indemnification pursuant
        to
        this Section 4.6 but it is judicially determined (by the entry of a final
        judgment or decree by a court of competent jurisdiction and the expiration
        of
        time to appeal or the denial of the last right of appeal) that such
        indemnification may not be enforced in such case notwithstanding the fact
        that
        this Section 4.6 provides for indemnification in such case, or (ii) contribution
        under the 1933 Act may be required on the part of the Holder or controlling
        person of the Holder in circumstances for which indemnification is not provided
        under this Section 4.6; then, and in each such case, the Company and the
        Holder
        will contribute to the aggregate losses, claims, damages or liabilities to
        which
        they may subject (after contribution from others) in such proportion so that
        the
        Holder is responsible only for the portion represented by the percentage
        that
        the public offering, price of its securities offered by the Registration
        Statement bears to the public offering price of all securities offered by
        the
        Registration Statement, provided , however, that such case, (y) the Seller
        will
        not be required to contribute any amount in excess of the public offering
        price
        of all such securities sold by it pursuant to the Registration Statement;
        and
        (z) no person or entity guilty of fraudulent misrepresentation (within meaning
        of Section 4(f) of the 1933 Act) will be entitled to contribution from any
        person or entity who was not guilty of such fraudulent
        misrepresentation.

      

      ARTICLE
        V. EVENTS OF DEFAULT

      

      The
        occurrence of any of the following events of default ("Event of Default")
        shall,
        at the option of the Holder hereof, make all sums of principal and interest
        then
        remaining unpaid hereon and all other amounts payable hereunder immediately
        due
        and payable, upon demand, without presentment, or grace period, all of which
        hereby are expressly waived, except as set forth below:

      

      5.1 Failure
        to Pay Principal or Interest.
        The
        Borrower fails to pay the principal hereof or interest thereon when due on
        this
        Debenture, whether at maturity, upon a Trading Market Prepayment Event pursuant
        to Section 2.8, upon acceleration or otherwise.

      

      5.2 Conversion
        and the Shares.
        The
        Borrower fails to issue (or fails to timely issue) shares of Common Stock
        to the
        Holder (or announces or threatens that it will not honor its obligation to
        do
        so) upon exercise by the Holder of the conversion rights of the Holder in
        accordance with the terms of this Debenture (for a period of at least forty-five
        (45) days, if such failure is solely as a result of the circumstances governed
        by Section 2.4 and the Borrower is using its best efforts to authorize a
        sufficient number of shares of Common Stock as soon as practicable), fails
        to
        transfer or cause the Escrow Agent and/or its transfer agent to transfer
        any
        certificate for shares of Common Stock issuable to the Holder upon conversion
        of
        or otherwise pursuant to this Debenture as and when required by this Debenture
        or the other Transaction Documents, or fails to remove any restrictive legend
        (or to withdraw any stop transfer instructions in respect thereof) on any
        certificate for any shares of Common Stock issuable to the Holder upon
        conversion of or otherwise pursuant to this Debenture as and when required
        by
        this Debenture or the other Transaction Documents(or makes any announcement,
        statement or threat that it does not intend to honor the obligations described
        in this paragraph) and any such failure shall continue uncured (or any
        announcement, statement or threat not to honor its obligations shall not
        be
        rescinded in writing) for five (5) days after the Borrower shall have been
        notified thereof in writing by the Holder.

      

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      5.3 Failure
        to File and/or Effect Registration.
        The
        Borrower fails to: (i) file the Registration Statement within 30 days of
        the
        date of this Debenture (ii) obtain effectiveness with the SEC of the
        Registration Statement within 90 days after filing; or (iii) such Registration
        Statement lapses in effect (or sales cannot otherwise be made thereunder
        effective, whether by reason of the Borrower’s failure to amend or supplement
        the prospectus included therein in accordance with this Debenture or otherwise)
        for more than thirty (30) consecutive days or sixty (60) days in any twelve
        month period after the Registration Statement becomes effective.

       

      5.4 Breach
        of Covenants.
        The
        Borrower breaches any material covenant or 

      other
        material term or condition contained in this Debenture or
        any of the other Transaction Documents, and such breach continues for a period
        of ten (10) days after written notice thereof to the Borrower from the
        Holder.

      

      5.5 Breach
        of Representations and Warranties.
        Any
        representation or warranty of the Borrower made herein or in any agreement,
        statement or certificate given in writing pursuant hereto or in connection
        herewith (including, without limitation, the Agreement or any of the other
        Transaction Documents), shall be false or misleading in any material respect
        when made and the breach of which has (or with the passage of time will have)
        a
        material adverse effect on the rights of the Holder with respect to this
        Debenture, the Purchase Agreement or the Registration Rights Agreement or
        any of
        the other Transaction Documents;

      

      5.6 Receiver
        or Trustee.
        The
        Borrower or any subsidiary of the Borrower shall make an assignment for the
        benefit of creditors, or apply for or consent to the appointment of a receiver
        or trustee for it or for a substantial part of its property or business,
        or such
        a receiver or trustee shall otherwise be appointed;

      

      5.7 Judgments.
        Any
        money judgment, writ or similar process shall be entered or filed against
        the
        Borrower or any subsidiary of the Borrower or any of its property or other
        assets for more than $50,000, and shall remain un-vacated, un-bonded or
        un-stayed for a period of twenty (20) days unless otherwise consented to
        by the
        Holder, which consent will not be unreasonably withheld;

      

      5.8 Bankruptcy.
        Bankruptcy, insolvency, reorganization or liquidation proceedings or other
        proceedings for relief under any bankruptcy law or any law for the relief
        of
        debtors shall be instituted by or against the Borrower or any subsidiary
        of the
        Borrower and if instituted against Borrower is not dismissed within sixty
        (60)
        days; or

      

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      5.9 Delisting
        of Common Stock.
        The
        Borrower shall fail to maintain the listing of the Common Stock on at least
        one
        of the OTCBB, the Nasdaq National Market, the Nasdaq SmallCap Market, the
        New
        York Stock Exchange, or the American Stock Exchange.

       

      5.10 Stop
        Trade.
        An SEC
        or judicial stop trade order or Principal Market trading
        suspension that lasts for five or more consecutive trading days.

       

      5.11 Cross-Default.
        A
        default by the Borrower of a material term, covenant, warranty
        or undertaking of any Transaction Document or other agreement to which the
        Borrower and Holder 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.

      

      5.12 Third
        Party Cross-Default.
        A
        default or alleged default by the Borrower of a material term covenant, warranty
        or undertaking contained in the Convertible Notes which is not cured after
        any
        required notice and/or cure period.

      

      5.13 Other
        Defaults.
        Any
        other event specifically described or identified as such herein. 

      

      ARTICLE
        VI. MISCELLANEOUS

      

      6.1 Failure
        or Indulgence Not Waiver.
        No
        failure or delay on the part of the Holder in the exercise of any power,
        right
        or privilege hereunder shall operate as a waiver thereof, nor shall any single
        or partial exercise of any such power, right or privilege preclude other
        or
        further exercise thereof or of any other right, power or privileges. All
        rights
        and remedies existing hereunder are cumulative to, and not exclusive of,
        any
        rights or remedies otherwise available.

      

      6.2 Notices.
        Any
        notice herein required or permitted to be given shall be in writing and may
        be
        personally served or delivered by courier or sent by United States mail and
        shall be deemed to have been given upon receipt if personally served (which
        shall include telephone line facsimile transmission) or sent by courier or
        three
        (3) days after being deposited in the United States mail, certified, with
        postage pre-paid and properly addressed, if sent by mail. For the purposes
        hereof, the address of the Holder shall be as shown on the records of the
        Borrower
        with
        copies to: Bondy & Schloss LLP, 60 East 42nd
        Street,
        37th
        Floor,
        New York, New York 10165, Attn: Jeffrey A. Rinde, Esq. Telecopier (212)
        972-1677; and the address of the Borrower shall be: Goldspring, Inc. 8585
        E.
        Hartford Drive, Suite 400, Scottsdale, Arizona 85255, Attn: Robert T. Faber,
        President & CEO, telecopier (480) 505-4044, with a copy by telecopier only
        to Greenberg Traurig LLP, 2375 E. Camelback Road, Suite 700 Phoenix, Arizona
        85016, Attn: Robert S. Kant, Esq., telecopier (602) 445-8100.
        Both
        the
        Holder and the Borrower may change the address for service by service of
        written
        notice to the other as herein provided.

      

      6.3 Amendments.
        This
        Debenture and any provision hereof may only be amended by an instrument in
        writing signed by the Borrower and the Holder. The term “Debenture” and all
        reference thereto, as used throughout this instrument, shall mean this
        instrument (and the other Debentures issued pursuant to the Agreement) as
        originally executed, or if later amended or supplemented, then as so amended
        or
        supplemented.

      

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      6.4 Assignability.
        This
        Debenture shall be binding upon the Borrower and its successors and assigns,
        and
        shall inure to the benefit of the Holder and its successors and assigns.
        Each
        transferee of this Debenture must be an “accredited investor” (as defined in
        Rule 501(a) of the 1933 Act). Notwithstanding anything in this Debenture
        to the
        contrary, this Debenture may be pledged as collateral in connection with
        a
bona fide
        margin
        account or other lending arrangement.

      

      6.5 Cost
        of Collection.
        If
        default is made in the payment of this Debenture, the Borrower shall pay
        the
        Holder hereof costs of collection, including reasonable attorneys’
        fees.

      

      6.6 Governing
        Law.
        THIS
        DEBENTURE SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
        THE
        LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
        ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT
        OF
        LAWS. THE BORROWER HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE
        OR
        UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT TO
        ANY
        DISPUTE ARISING UNDER THIS DEBENTURE, THE AGREEMENTS ENTERED INTO IN CONNECTION
        HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES
        IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
        OF
        SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS
        UPON
        A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
        SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING
        HEREIN
        SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
        BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH
        SUIT
        OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
        BY
        SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES
        NOT
        PREVAIL IN ANY DISPUTE ARISING UNDER THIS DEBENTURE SHALL BE RESPONSIBLE
        FOR ALL
        FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY
        IN CONNECTION WITH SUCH DISPUTE.

      

      6.7 Certain
        Amounts.
        Whenever pursuant to this Debenture the Borrower is required to pay an amount
        in
        excess of the outstanding Principal Amount (or the portion thereof required
        to
        be paid at that time) plus accrued and unpaid interest plus any Default
        Interest, the Borrower and the Holder agree that the actual damages to the
        Holder from the receipt of cash payment on this Debenture may be difficult
        to
        determine and the amount to be so paid by the Borrower represents stipulated
        damages and not a penalty and is intended to compensate the Holder in part
        for
        loss of the opportunity to convert this Debenture and to earn a return from
        the
        sale of shares of Common Stock acquired upon conversion of this Debenture
        at a
        price in excess of the price paid for such shares pursuant to this Debenture.
        The Borrower and the Holder hereby agree that such amount of stipulated damages
        is not plainly disproportionate to the possible loss to the Holder from the
        receipt of a cash payment without the opportunity to convert this Debenture
        into
        shares of Common Stock.

       

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      6.8 Maximum
        Payments.
        Nothing
        contained herein shall be deemed to establish or require the payment of a
        rate
        of interest or other charges in excess of the maximum permitted by applicable
        law. In the event that the rate of interest required to be paid or other
        charges
        hereunder exceed the maximum permitted by such law, any payments in excess
        of
        such maximum shall be credited against amounts owed by the Borrower to the
        Holder and thus refunded to the Borrower.

      

      6.9 Allocations
        of Maximum Share Amount and Reserved Amount.
        The
        Maximum Share Amount and Reserved Amount shall be allocated pro rata among
        the
        Holders of Debentures issued pursuant to the Agreement based on the principal
        amount of such Debentures issued to each Holder except as otherwise agreed
        by
        such Holders. Each increase to the Maximum Share Amount and Reserved Amount
        shall be allocated pro rata among the Holders of Debentures based on the
        principal amount of such Debentures held by each Holder at the time of the
        increase in the Maximum Share Amount or Reserved Amount except as otherwise
        agreed by such Holders. In the event a Holder shall sell or otherwise transfer
        any of such Holder’s Debentures, each transferee shall be allocated a pro rata
        portion of such transferor’s Maximum Share Amount and Reserved Amount. Except as
        otherwise agreed to by such Holders, any portion of the Maximum Share Amount
        or
        Reserved Amount which remains allocated to any person or entity which does
        not
        hold any Debentures shall be allocated to the remaining Holders of Debentures,
        pro rata based on the principal amount of such Debentures then held by such
        Holders.

      

      6.10 Damages
        Shares.
        Any
        shares of Common Stock that may be issuable to the Holder pursuant to this
        Debenture in excess of the Conversion Shares (“Damages
        Shares”)
        shall
        be treated as Common Stock issuable upon conversion of this Debenture for
        all
        purposes hereof and shall be subject to all of the limitations and afforded
        all
        of the rights of the other shares of Common Stock issuable hereunder or pursuant
        to any of the other Transaction Documents, including without limitation,
        the
        right to be included in the Registration Statement.

      

      6.11 Denominations.
        At the
        request of the Holder, upon surrender of this Debenture, the Borrower shall
        promptly issue new Debentures in the aggregate outstanding principal amount
        hereof, in the form hereof, in such denominations as the Holder shall
        request.

      

      6.12 Purchase
        Agreement.
        By its
        acceptance of this Debenture, each Holder agrees to be bound by the applicable
        terms of the Purchase Agreement.

      

      6.13 Notice
        of Corporate Events.
        Except
        as otherwise provided below, the Holder of this Debenture shall have no rights
        as a Holder of Common Stock unless and only to the extent that it converts
        this
        Debenture into Common Stock. The Borrower shall provide the Holder with prior
        notification of any meeting of the Borrower’s shareholders (and copies of proxy
        materials and other information sent to shareholders). In the event of any
        taking by the Borrower of a record of its shareholders for the purpose of
        determining shareholders who are entitled to receive payment of any dividend
        or
        other distribution, any right to subscribe for, purchase or otherwise acquire
        (including by way of merger, consolidation, reclassification or
        recapitalization) any share of any class or any other securities or property,
        or
        to receive any other right, or for the purpose of determining shareholders
        who
        are entitled to vote in connection with any proposed sale, lease or conveyance
        of all or substantially all of the assets of the Borrower or any proposed
        liquidation, dissolution or winding up of the Borrower, the Borrower shall
        mail
        a notice to the Holder, at least twenty (20) days prior to the record date
        specified therein (or thirty (30) days prior to the consummation of the
        transaction or event, whichever is earlier), of the date on which any such
        record is to be taken for the purpose of such dividend, distribution, right
        or
        other event, and a brief statement regarding the amount and character of
        such
        dividend, distribution, right or other event to the extent known at such
        time.
        The Borrower shall make a public announcement of any event requiring
        notification to the Holder hereunder within the time frame required by
        applicable law.

      

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

      6.14 Remedies.
        The
        Borrower acknowledges that a breach by it of its obligations hereunder will
        cause irreparable harm to the Holder, by vitiating the intent and purpose
        of the
        transaction contemplated hereby. Accordingly, the Borrower acknowledges that
        the
        remedy at law for a breach of its obligations under this Debenture will be
        inadequate and agrees, in the event of a breach or threatened breach by the
        Borrower of the provisions of this Debenture, that the Holder shall be entitled,
        in addition to all other available remedies at law or in equity, and in addition
        to the penalties assessable herein, to an injunction or injunctions restraining,
        preventing or curing any breach of this Debenture and to enforce specifically
        the terms and provisions thereof, without the necessity of showing economic
        loss
        and without any bond or other security being required.

      

      IN
        WITNESS WHEREOF,
        Borrower has caused this Debenture to be signed in its name by its duly
        authorized officer this ____ day of ______________, 2005.

      

      

      GOLDSPRING,
        INC.

      

      

      

      By: ______________________________

              Robert
        T.
        Faber

             
President
        and Chief Executive Officer

      

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

      EXHIBIT
        A

      

      NOTICE
        OF CONVERSION

      

      (To
        be
        Executed by the Registered Holder

      in
        order
        to Convert the Debentures)

      

      The
        undersigned hereby irrevocably elects to convert $________principal amount
        of
        the Debenture (defined below) into shares of common stock, par value $______
        per
        share ("Common
        Stock"),
        of
        Goldspring, Inc., a Florida corporation (the "Corporation")
        according to the conditions of the convertible debentures of the Corporation
        dated as of March
        ____, 2005 (the "Debentures"), as of the date written below. If securities
        are
        to be issued in the name of a person other than the undersigned, the undersigned
        will pay all transfer taxes payable with respect thereto and is delivering
        herewith such certificates. No fee will be charged to the Holder for any
        conversion, except for transfer taxes, if any. A copy of each Debenture is
        attached hereto (or evidence of loss, theft or destruction thereof).

      

      The
        undersigned hereby requests that the Corporation issue a certificate or
        certificates for the number of shares of Common Stock set forth below (which
        numbers are based on the Holder's calculation attached hereto) in the name(s)
        specified immediately below or, if additional space is necessary, on an
        attachment hereto:

      

      Name:          

      Address:          

      The
        undersigned represents and warrants that all offers and sales by the undersigned
        of the securities issuable to the undersigned upon conversion of the Debentures
        shall be made pursuant to registration of the securities under the Securities
        Act of 1933, as amended (the "Act"),
        or
        pursuant to an exemption from registration under the Act.

      

      Date
        of
        Conversion:____________________________

      Applicable
        Conversion Price:_____________________

      Number
        of
        Shares of Common Stock to be Issued:_____

      Pursuant
        to Conversion of the Debentures:__________

      Signature:___________________________________

      Name:_________________________________

      Address:_______________________________
        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

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                28THIS
        NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS
NOTE
        HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS
        NOTE
        AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD,
        OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
        REGISTRATION STATEMENT AS TO THIS NOTE OR THE COMMON SHARES ISSUABLE UPON
        CONVERSION OF THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
        SATISFACTORY TO GOLDSPRING, INC. THAT SUCH REGISTRATION IS NOT
        REQUIRED. 

       

      CONVERTIBLE
        NOTE

      

      FOR
        VALUE
        RECEIVED, GOLDSPRING, INC., a Florida corporation (hereinafter called
        "Borrower"), hereby promises to pay to __________________,
        (the
        "Holder") or its registered assigns or successors in interest or order, without
        demand, the sum of _____________________ (“Principal
        Amount”), with simple and unpaid interest thereon, on March 31, 2008 (the
        "Maturity Date"), if not sooner paid.

      

      This
        Note
        has been entered into pursuant to the terms of a settlement agreement, dated
        March 19, 2005 (the “Settlement Agreement”) and a subscription agreement, dated
        November 30, 2004 (the “Subscription Agreement”), both between the Borrower and
        the Holder, (collectively, the “Transaction Documents”), and shall be subject to
        the terms of such Transaction Documents. Unless otherwise separately defined
        herein, all capitalized terms used in this Note shall have the same meaning
        as
        is set forth in the Subscription Agreement. The following terms shall apply
        to
        this Note:

      

      ARTICLE
        I

      

      INTEREST
        AND AMORTIZATION

      

      1.1.  Interest
        Rate.
        Subject
        to Section 5.7 hereof, interest payable on this Note shall accrue at a rate
        per
        annum (the "Interest Rate") of eight percent (8%). Interest on the Principal
        Amount shall be simple interest, payable monthly, in arrears, commencing
        on
        April 1, 2006 and on the first day of each consecutive calendar month thereafter
        (each, a "Repayment Date") and on the Maturity Date, whether by acceleration
        or
        otherwise.

      

      1.2.  Minimum
        Monthly Principal Payments.
        Amortizing payments of the outstanding Principal Amount of this Note shall
        commence on the first (1st) Repayment Date and shall recur on each succeeding
        Repayment Date thereafter until the Principal Amount has been repaid in full,
        whether by the payment of cash or by the conversion of such principal into
        Common Stock pursuant to the terms hereof. Subject to Section 2.1 and Article
        3
        below, on each Repayment Date, the Borrower shall make payments to the Holder
        in
        the amount of one-twenty-fourth (1/24th) of the initial Principal Amount
        (the
        "Monthly Principal Amount"), together with any accrued and unpaid interest
        then
        due on such portion of the Principal Amount plus any and all other amounts
        which
        are then owing under this Note that have not been paid (the Monthly Principal
        Amount, together with such accrued and unpaid interest and such other amounts,
        collectively, the "Monthly Amount"). Amounts of Conversions of Principal
        Amount
        made by the Holder or Borrower pursuant to Section 2.1 or Article III, and
        Redemption Amounts actually paid to Borrower shall be applied to Monthly
        Amounts
        commencing with the Monthly Amounts first payable and then Monthly Amounts
        thereafter in chronological order. Any Principal Amount that remains outstanding
        on the Maturity Date shall be due and payable on the Maturity Date.

      

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      1.3.  Default
        Interest Rate.
        Following the occurrence and during the continuance of an Event of Default,
        subject to Section 5.7, the annual interest rate on this Note shall
        automatically be increased to fifteen percent (15%), and all outstanding
        obligations under this Note, including unpaid interest, shall continue to
        accrue
        interest from the date of such Event of Default at such interest rate applicable
        to such obligations until such Event of Default is cured or waived.

      

      ARTICLE
        II

      

      CONVERSION
        AND REPAYMENT

      

      2.1. (a)
        Holder’s
        Conversion Election.
        The
        Holder shall have the right from and after the date of the issuance of this
        Note
        and then at any time until this Note is fully paid, to convert any outstanding
        and unpaid principal portion of this Note, and accrued interest, at the election
        of the Holder (the date of giving of such notice of conversion being a
        "Conversion Date") into fully paid and nonassessable shares of Common Stock
        as
        such stock exists on the date of issuance of this Note, or any shares of
        capital
        stock of Borrower into which such Common Stock shall hereafter be changed
        or
        reclassified, at the conversion price as defined in Section 2.1(b) hereof
        (the
        "Conversion Price"), determined as provided herein. Upon delivery to the
        Borrower of a Notice of Conversion as described in Section 7 of the Subscription
        Agreement of the Holder's written request for conversion, Borrower shall
        issue
        and deliver to the Holder within three (3) business days from the Conversion
        Date (“Delivery Date”) that number of shares of Common Stock for the portion of
        the Note converted in accordance with the foregoing. At the election of the
        Holder, the Borrower will deliver accrued but unpaid interest on the Note
        through the Conversion Date directly to the Holder on or before the Delivery
        Date.
        The
        number of shares of Common Stock to be issued upon each conversion of this
        Note
        shall be determined by dividing that portion of the principal of the Note
        and
        interest to be converted, by the Conversion Price.

      

      (b)
        Conversion
        Price.
        Subject
        to adjustment as provided in Section 3.4(b), the Conversion Price per share
        shall be (i) $0.20 (“Maximum Base Price”).

      

      (c) Borrower’s
        Repayment Election.
        The
        Monthly Amount due on a Repayment Date shall be paid by the Borrower at the
        Borrower’s election (i) in cash at the rate of 102% of such Monthly Amount
        otherwise due on such Repayment Date within three (3) business days of the
        applicable Repayment Date, or (ii) subject to Section 3.2, with registered,
        freely transferable Common Stock at an applied conversion rate equal to
        eighty-five percent (85%) of the average of the five (5) lowest closing bid
        prices of the Common Stock as reported by Bloomberg L.P. for the twenty (20)
        trading days preceding such Repayment Date. Any portion of the Monthly Amount
        that may not be paid pursuant to Section 2.1(c)(ii) by virtue of Sections
        2.2,
        3.2 or otherwise shall be paid pursuant to Section 2.1(c)(i). 

      

      (d) Application
        of Conversion Amounts.
        Any
        amounts converted by the Holder pursuant to Section 2.1 or paid by the Borrower
        shall be deemed to constitute payments of and applied, (i) first, against
        outstanding fees, (ii) second, against accrued interest on the Principal
        Amount,
        and (iii) third, against the Principal Amount.

      

      2.2. No
        Effective Registration.
        Notwithstanding anything to the contrary herein, no amount payable hereunder
        may
        be converted into Common Stock by the Borrower without the Holder’s consent
        unless (a) either (i) an effective current Registration Statement covering
        the
        shares of Common Stock to be issued in satisfaction of such obligations exists,
        or (ii) an exemption from registration of the Common Stock is available pursuant
        to Rule 144(k) of the Securities Act, and (b) no Event of Default hereunder
        exists and is continuing, unless such Event of Default has been cured within
        any
        applicable cure period or is otherwise waived in writing by the Holder in
        whole
        or in part at the Holder's option.

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      2.3. Optional
        Redemption of Principal Amount.
        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 Principal Amount ("Optional Redemption"), in whole or in part,
        by
        paying to the Holder a sum of money equal to one hundred fifteen percent
        (115%)
        of the Principal Amount to be redeemed, together with accrued but unpaid
        interest thereon and any and all other sums due, accrued or payable to the
        Holder arising under this Note, the Subscription Agreement or any Transaction
        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"). A Notice of Redemption shall not be
        effective with respect to any portion of the Principal Amount for which the
        Holder has a pending election to convert pursuant to Section 3.1, or for
        conversions initiated or made by the Holder pursuant to Section 3.1 during
        the
        Redemption Period. On the Redemption Payment Date, the Redemption Amount,
        less
        any portion of the Redemption Amount against which the Holder has exercised
        its
        rights pursuant to Section 3.1, shall be paid in good funds to the Holder.
        In
        the event the Borrower fails to pay the Redemption Amount on the Redemption
        Payment Date as set forth herein, then (i) such Notice of Redemption will
        be
        null and void, (ii) Borrower will have no right to deliver another Notice
        of
        Redemption, and (iii) Borrower’s failure may be deemed by Holder to be a
        non-curable Event of Default.

      

      ARTICLE
        III

      

      CONVERSION
        RIGHTS

      

      3.1. Holder's
        Conversion Rights.
        Subject
        to Section 2.2, the Holder shall have the right, but not the obligation,
        to
        convert all or any portion of the then aggregate outstanding Principal Amount
        of
        this Note, together with interest and fees due hereon, into shares of Common
        Stock, subject to the terms and conditions set forth in this Article III.
        The
        Holder may exercise such right by delivery to the Borrower of a written Notice
        of Conversion pursuant to Section 3.3.

      

      3.2. Conversion
        Limitation.
        Notwithstanding anything contained herein to the contrary, the Holder shall
        not
        be entitled to convert pursuant to the terms of this Note nor may this Note
        be
        converted in whole or in part into an amount of Common Stock that would be
        convertible into that number of Common Stock which would exceed the difference
        between the number of shares of Common Stock beneficially owned by such Holder
        and 4.99% of the outstanding shares of Common Stock. For the purposes of
        the
        immediately preceding sentence, beneficial ownership shall be determined
        in
        accordance with Section 13(d) of the Exchange Act and Regulation 13d-3
        thereunder. The foregoing limitation shall be calculated as of each Conversion
        Date. Aggregate Conversions over time shall not be limited to 4.99%. The
        Holder
        shall have the authority and obligation to determine whether the restriction
        contained in this Section 10 will limit any conversion hereunder and to the
        extent that the Holder determines that the limitation contained in this Section
        applies, the determination of which portion of the Notes are convertible
        shall
        be the responsibility and obligation of the Holder. The Holder may void the
        Conversion Share limitation described in this Section 3.2 upon 61 days prior
        notice to the Borrower. The Holder may allocate which of the equity of the
        Borrower deemed beneficially owned by the Holder shall be included in the
        4.99%
        amount described above and which shall be allocated to the excess above
        4.99%.

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      3.3. Mechanics
        of Holder's Conversion.
        

      

      (a) In
        the
        event that the Holder elects to convert any amounts outstanding under this
        Note
        into Common Stock, the Holder shall give notice of such election by delivering
        an executed and completed notice of conversion (a "Notice of Conversion")
        to the
        Borrower, which Notice of Conversion shall provide a breakdown in reasonable
        detail of the Principal Amount, accrued interest and fees being converted.
        The
        original Note is not required to be surrendered to the Borrower until all
        sums
        due under the Note have been paid. On each Conversion Date (as hereinafter
        defined) and in accordance with its Notice of Conversion, the Holder shall
        make
        the appropriate reduction to the Principal Amount, accrued interest and fees
        as
        entered in its records and shall provide written notice thereof to the Borrower
        within three (3) business days after the Conversion Date. Each date on which
        a
        Notice of Conversion is delivered or telecopied to the Borrower in accordance
        with the provisions hereof shall be deemed a "Conversion Date". A form of
        Notice
        of Conversion to be employed by the Holder is annexed hereto as Exhibit
        A.

      

      (b) Pursuant
        to the terms of a Notice of Conversion, the Borrower will issue instructions
        to
        the transfer agent accompanied by an opinion of counsel, if so required by
        the
        Borrower's transfer agent, within one (1) business day after the date of
        the
        delivery to Borrower of the Notice of Conversion and shall cause the transfer
        agent to transmit the certificates representing the Conversion Shares to
        the
        Holder by crediting the account of the Holder's designated broker with the
        Depository Trust Corporation ("DTC") through its Deposit Withdrawal Agent
        Commission ("DWAC") system within three (3) business days after receipt by
        the
        Borrower of the Notice of Conversion (the "Delivery Date"). In the case of
        the
        exercise of the conversion rights set forth herein the conversion privilege
        shall be deemed to have been exercised and the Conversion Shares issuable
        upon
        such conversion shall be deemed to have been issued upon the date of receipt
        by
        the Borrower of the Notice of Conversion. The Holder shall be treated for
        all
        purposes as the record holder of such shares of Common Stock, unless the
        Holder
        provides the Borrower written instructions to the contrary.

      

      3.4. Conversion
        Mechanics.

      

      (a) The
        number of shares of Common Stock to be issued upon each conversion of this
        Note
        pursuant to this Article III shall be determined by dividing that portion
        of the
        Principal Amount and interest and fees to be converted, if any, by the then
        applicable Conversion Price.

      

      (b) The
        Conversion Price and number and kind of shares or other securities to be
        issued
        upon conversion shall be subject to adjustment from time to time upon the
        happening of certain events while this conversion right remains outstanding,
        as
        follows:

      

      A. Merger,
        Sale of Assets, etc. If the Borrower at any time shall consolidate with or
        merge
        into or sell or convey all or substantially all its assets to any other
        corporation, this Note, as to the unpaid principal portion thereof and accrued
        interest thereon, shall thereafter be deemed to evidence the right to purchase
        such number and kind of shares or other securities and property as would
        have
        been issuable or distributable on account of such consolidation, merger,
        sale or
        conveyance, upon or with respect to the securities subject to the conversion
        or
        purchase right immediately prior to such consolidation, merger, sale or
        conveyance. The foregoing provision shall similarly apply to successive
        transactions of a similar nature by any such successor or purchaser. Without
        limiting the generality of the foregoing, the anti-dilution provisions of
        this
        Section shall apply to such securities of such successor or purchaser after
        any
        such consolidation, merger, sale or conveyance.

      

      B. Reclassification,
        etc. If the Borrower at any time shall, by reclassification or otherwise,
        change
        the Common Stock into the same or a different number of securities of any
        class
        or classes, this Note, as to the unpaid principal portion thereof and accrued
        interest thereon, shall thereafter be deemed to evidence the right to purchase
        an adjusted number of such securities and kind of securities as would have
        been
        issuable as the result of such change with respect to the Common Stock
        immediately prior to such reclassification or other change.

      

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      C. Stock
        Splits, Combinations and Dividends. If the shares of Common Stock are subdivided
        or combined into a greater or smaller number of shares of Common Stock, or
        if a
        dividend is paid on the Common Stock in shares of Common Stock, the Conversion
        Price shall be proportionately reduced in case of subdivision of shares or
        stock
        dividend or proportionately increased in the case of combination of shares,
        in
        each such case by the ratio which the total number of shares of Common Stock
        outstanding immediately after such event bears to the total number of shares
        of
        Common Stock outstanding immediately prior to such event.

      

      D. Share
        Issuance. So long as this Note is outstanding, if the Borrower shall issue
        any
        Common Stock except for the Excepted Issuances (as defined in the Subscription
        Agreement), prior to the complete conversion of this Note for a consideration
        less than the Conversion Price that would be in effect at the time of such
        issue, then, and thereafter successively upon each such issuance, the Conversion
        Price shall be reduced to such other lower issue price. For purposes of this
        adjustment, the issuance of any security or debt instrument of the Borrower,
        except for the Excepted Issuances, carrying the right to convert such security
        or debt instrument into Common Stock or of any warrant, right or option to
        purchase Common Stock or the modification of any of the foregoing which may
        be
        outstanding shall result in an adjustment to the Conversion Price upon the
        modification or issuance of the above-described security, debt instrument,
        warrant, right, or option and again upon the issuance of shares of Common
        Stock
        upon exercise of such conversion or purchase rights if such issuance is at
        a
        price lower than the then applicable Conversion Price. The reduction of the
        Conversion Price described in this paragraph is in addition to the other
        rights
        of the Holder described in the Subscription Agreement.

      

      (c) Whenever
        the Conversion Price is adjusted pursuant to Section 3.4 above, the Borrower
        shall promptly mail to the Holder a notice setting forth the Conversion Price
        after such adjustment and setting forth a statement of the facts requiring
        such
        adjustment.

      

      3.5. Reservation.
        During
        the period the conversion right exists, Borrower will reserve from its
        authorized and unissued Common Stock not less than one hundred fifty (150%)
        of
        the number of shares of Common Stock sufficient to provide for the issuance
        of
        Common Stock upon the full conversion of this Note. Borrower represents that
        upon issuance, such shares will be duly and validly issued, fully paid and
        non-assessable. Borrower agrees that its issuance of this Note shall constitute
        full authority to its officers, agents, and transfer agents who are charged
        with
        the duty of executing and issuing stock certificates to execute and issue
        the
        necessary certificates for shares of Common Stock upon the conversion of
        this
        Note.

      

      3.6 Issuance
        of Replacement Note.
        Upon
        any partial conversion of this Note, provided an original Note is surrendered
        to
        the Company, a replacement Note containing the same date and provisions of
        this
        Note shall, at the written request of the Holder, be issued by the Borrower
        to
        the Holder for the remaining outstanding Principal Amount of this Note and
        accrued interest which shall not have been converted or paid.

      

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      ARTICLE
        IV

      

      EVENT
        OF DEFAULT

      

      The
        occurrence of any of the following events of default ("Event of Default")
        shall,
        at the option of the Holder hereof, make all sums of principal and interest
        then
        remaining unpaid hereon and all other amounts payable hereunder immediately
        due
        and payable, upon demand, without presentment, or grace period, all of which
        hereby are expressly waived, except as set forth below:

      

      4.1 Failure
        to Pay Principal or Interest.
        The
        Borrower fails to pay any installment of Principal Amount, interest or other
        sum
        due under this Note or any Transaction Document when due and such failure
        continues for a period of five (5) business days after the due
        date.

      

      4.2 Breach
        of Covenant.
        The
        Borrower breaches any material covenant or other term or condition of the
        Subscription Agreement, this Note or Transaction Document in any material
        respect and such breach, if subject to cure, continues for a period of ten
        (10)
        business days after written notice to the Borrower from the Holder.

      

      4.3 Breach
        of Representations and Warranties.
        Any
        material representation or warranty of the Borrower made herein, in the
        Subscription Agreement, Transaction Document or in any agreement, statement
        or
        certificate given in writing pursuant hereto or in connection herewith or
        therewith shall be false or misleading in any material respect as of the
        date
        made and a Closing Date.

      

      4.4 Receiver
        or Trustee.
        The
        Borrower or any Subsidiary of Borrower shall make an assignment for the benefit
        of creditors, or apply for or consent to the appointment of a receiver or
        trustee for them or for a substantial part of their property or business;
        or
        such a receiver or trustee shall otherwise be appointed.

      

      4.5 Judgments.
        Any
        money judgment, writ or similar final process shall be entered or filed against
        Borrower or any subsidiary of Borrower or any of their property or other
        assets
        for more than $50,000, and shall remain unvacated, unbonded or unstayed for
        a
        period of forty-five (45) days.

      

      4.6 Non-Payment.
        A
        default by the Borrower under any one or more obligations in an aggregate
        monetary amount in excess of $50,000 for more than twenty days after the
        due
        date.

      

      4.7 Bankruptcy.
        Bankruptcy, insolvency, reorganization or liquidation proceedings or other
        proceedings or relief under any bankruptcy law or any law, or the issuance
        of
        any notice in relation to such event, for the relief of debtors shall be
        instituted by or against the Borrower or any Subsidiary of Borrower and if
        instituted against them are not dismissed within 45 days of
        initiation.

      

      4.8  Ineligibility
        of Quotation.
        The
        Common Stock of Borrower becomes ineligible for quotation on the OTC Bulletin
        Board (“Bulletin Board”) or such other principal exchange on which the Common
        Stock is quoted or listed for trading; failure to comply with the requirements
        for continued quotation on the Bulletin Board for a period of seven consecutive
        trading days; or notification from the Bulletin Board or any Principal Market
        that the Borrower is not in compliance with the conditions for continued
        quotation or listing on the Bulletin Board or other Principal
        Market.

      

      4.9 Stop
        Trade.
        An SEC
        or judicial stop trade order or Principal Market trading suspension that
        lasts
        for five or more consecutive trading days.

      

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      4.10 Failure
        to Deliver Common Stock or Replacement Note.
        Borrower's failure to timely deliver Common Stock to the Holder pursuant
        to and
        in the form required by this Note of the Subscription Agreement, or, if
        requested by Borrower pursuant to Section 3.6, a replacement Note.

      

      4.11 Non-Registration
        Event.
        The
        occurrence of a Non-Registration Event as described in the Subscription
        Agreement that is not cured within five (5) business days after notice from
        Holder.

      

      4.12 Reverse
        Splits.
        The
        Borrower effectuates a reverse split of its Common Stock without the prior
        written consent of Holders representing not less than 75% of the aggregate
        Principal Amounts outstanding under all Notes issued pursuant to the
        Subscription Agreement.

      

      4.13 Cross
        Default.
        A
        default by the Borrower of a material term, covenant, warranty or undertaking
        of
        any Transaction Document or other agreement to which the Borrower and Holder
        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.

      

      

      ARTICLE
        V

      

      MISCELLANEOUS

      

      5.1 Failure
        or Indulgence Not Waiver.
        No
        failure or delay on the part of Holder hereof in the exercise of any power,
        right or privilege hereunder shall operate as a waiver thereof, nor shall
        any
        single or partial exercise of any such power, right or privilege preclude
        other
        or further exercise thereof or of any other right, power or privilege. All
        rights and remedies existing hereunder are cumulative to, and not exclusive
        of,
        any rights or remedies otherwise available.

      

       

      5.2 Notices.
        All
        notices, demands, requests, consents, approvals, and other communications
        required or permitted hereunder shall be in writing and, unless otherwise
        specified herein, shall be (i) personally served, (ii) deposited in the mail,
        registered or certified, return receipt requested, postage prepaid, (iii)
        delivered by reputable air courier service with charges prepaid, or (iv)
        transmitted by hand delivery, telegram, or facsimile, addressed as set forth
        below or to such other address as such party shall have specified most recently
        by written notice. Any notice or other communication required or permitted
        to be
        given hereunder shall be deemed effective (a) upon hand delivery or delivery
        by
        facsimile, with accurate confirmation generated by the transmitting facsimile
        machine, at the address or number designated below (if delivered on a business
        day during normal business hours where such notice is to be received), or
        the
        first business day following such delivery (if delivered other than on a
        business day during normal business hours where such notice is to be received)
        or (b) on the second business day following the date of mailing by express
        courier service, fully prepaid, addressed to such address, or upon actual
        receipt of such mailing, whichever shall first occur. The addresses for such
        communications shall be: (i) if to the Company, to: Goldspring, Inc., 8585
        E.
        Hartford Drive, Suite 400, Scottsdale, AZ 85255, Attn: Robert T. Faber,
        President & CEO, telecopier: (480) 505-4044, with a copy by telecopier only
        to: Greenberg Traurig LLP, 2375 E. Camelback Road, Suite 700, Phoenix, AZ
        85016,
        Attn: Robert S. Kant, Esq., telecopier: (602) 445-8100, and (ii) if to the
        Subscribers, to: the one or more addresses and telecopier numbers indicated
        on
        the signature pages hereto, with an additional copy by telecopier only to:
        Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York
        10176, telecopier number: (212) 697-3575.

      

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      5.3 Amendment
        Provision.
        The
        term "Note" and all reference thereto, as used throughout this instrument,
        shall
        mean this instrument as originally executed, or if later amended or
        supplemented, then as so amended or supplemented.

      

      5.4 Assignability.
        This
        Note shall be binding upon the Borrower and its successors and assigns, and
        shall inure to the benefit of the Holder and its successors and
        assigns.

      

      5.5 Cost
        of Collection.
        If
        default is made in the payment of this Note, Borrower shall pay the Holder
        hereof reasonable costs of collection, including reasonable attorneys'
        fees.

      

      5.6 Governing
        Law.
        This
        Note 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. Both parties
        and
        the individual signing this Note on behalf of the Borrower agree to submit
        to
        the jurisdiction of such courts. The prevailing party shall be entitled to
        recover from the other party its reasonable attorney's fees and costs. In
        the
        event that any provision of this Note 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 unenforceability of any other provision of this Note. Nothing contained
        herein shall be deemed or operate to preclude the Holder from bringing suit
        or
        taking other legal action against the Borrower in any other jurisdiction
        to
        collect on the Borrower's obligations to Holder, to realize on any collateral
        or
        any other security for such obligations, or to enforce a judgment or other
        court
        in favor of the Holder.

      

      5.7 Maximum
        Payments.
        Nothing
        contained herein shall be deemed to establish or require the payment of a
        rate
        of interest or other charges in excess of the maximum permitted by applicable
        law. In the event that the rate of interest required to be paid or other
        charges
        hereunder exceed the maximum permitted by such law, any payments in excess
        of
        such maximum shall be credited against amounts owed by the Borrower to the
        Holder and thus refunded to the Borrower.

      

      5.8. Construction.
        Each
        party acknowledges that its legal counsel participated in the preparation
        of
        this Note and, therefore, stipulates that the rule of construction that
        ambiguities are to be resolved against the drafting party shall not be applied
        in the interpretation of this Note to favor any party

      against
        the other.

      

      5.9 Redemption.
        This
        Note may not be redeemed or called without the consent of the Holder except
        pursuant to the terms of this Note.

      

      5.10 Shareholder
        Status.
        The
        Holder shall not have rights as a shareholder of the Borrower with respect
        to
        unconverted portions of this Note. However, the Holder will have the right
        of a
        shareholder of the Borrower with respect to the Shares of Common Stock to
        be
        received after delivery by the Holder of a Conversion Notice to the
        Borrower.

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF,
        Borrower has caused this Note to be signed in its name by an authorized officer
        as of the 19th day of March, 2005.

      

      GOLDSPRING,
        INC.

      

      

      

      By:________________________________

      Name:
        Robert T. Faber

      Title:
        President & CEO

      WITNESS:

      

      

      

      ______________________________________

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      NOTICE
        OF CONVERSION

      

      (To
        be
        executed by the Registered Holder in order to convert the Note)

      

      

      The
        undersigned hereby elects to convert $_________ of the principal and $_________
        of the interest due on the Note issued by Goldspring, Inc. on
        _________________,
        2005
        into Shares of Common Stock of Goldspring, Inc. (the "Borrower") according
        to
        the conditions set forth in such Note, as of the date written
        below.

      

      

      

      Date
        of
        Conversion:____________________________________________________________________

      

      

      Conversion
        Price:______________________________________________________________________

      

      

      Shares
        To
        Be
        Delivered:_________________________________________________________________

      

      

      Signature:____________________________________________________________________________

      

      

      Print
        Name:__________________________________________________________________________

      

      

      Address:____________________________________________________________________________

      

      ____________________________________________________________________________

       

       

      
        
           

        

          10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]