Document:

exv10w7

 

Exhibit 10.7

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

Right to Purchase           shares of Common Stock of GOLDSPRING, INC. (subject
to adjustment as provided herein)

Form of CLASS B

COMMON STOCK PURCHASE WARRANT

	 	 	 
	No. CB-001

	 	Issue Date: November         , 2004

     GOLDSPRING, INC., a corporation organized under the laws of the State of
Florida (the “Company”), hereby certifies that, for value
received,
                                                                      , or its assigns (the “Holder”), is entitled, subject to the
terms set forth below, to purchase from the Company at any time after the Issue
Date until 5:00 p.m., E.S.T on the fourth anniversary of the Issue Date (the
“Expiration Date”), up to                     fully paid and nonassessable shares of the
common stock of the Company (the “Common Stock”), $.000666 par value per share
at a per share purchase price of $0.20. The aforedescribed purchase price per
share, as adjusted from time to time as herein provided, is referred to herein
as the “Purchase Price.” The number and character of such shares of Common
Stock and the Purchase Price are subject to adjustment as provided herein. The
Company may reduce the Purchase Price without the consent of the Holder.
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in that certain Subscription Agreement (the “Subscription
Agreement”), dated November         , 2004, entered into by the Company and the
Holder.

     As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:

     (a) The term “Company” shall include Goldspring, Inc. and any corporation
which shall succeed or assume the obligations of Goldspring, Inc. hereunder.

     (b) The term “Common Stock” includes (a) the Company’s Common Stock,
$.000666 par value per share, as authorized on the date of the Subscription
Agreement, and (b) any other securities into which or for which any of the
securities described in (a) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.

     (c) The term “Other Securities” refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.

(Stock Purchase Warrant)

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     1. Exercise of Warrant.

          1.1. Number of Shares Issuable upon Exercise. From and after the Issue
Date through and including the Expiration Date, the Holder hereof shall be
entitled to receive, upon exercise of this Warrant in whole in accordance with
the terms of subsection 1.2 or upon exercise of this Warrant in part in
accordance with subsection 1.3, shares of Common Stock of the Company, subject
to adjustment pursuant to Section 4.

          1.2. Full Exercise. This Warrant may be exercised in full by the Holder
hereof by delivery of an original or facsimile copy of the form of subscription
attached as Exhibit A hereto (the “Subscription Form”) duly executed by such
Holder and surrender of the original Warrant within five (5) days of exercise,
to the Company at its principal office or at the office of its Warrant Agent
(as provided hereinafter), accompanied by payment, in cash, wire transfer or by
certified or official bank check payable to the order of the Company, in the
amount obtained by multiplying the number of shares of Common Stock for which
this Warrant is then exercisable by the Purchase Price then in effect or
otherwise subject to Section 2.

          1.3. Partial Exercise. This Warrant may be exercised in part (but not for
a fractional share) by surrender of this Warrant in the manner and at the place
provided in subsection 1.2 except that the amount payable by the Holder on such
partial exercise shall be the amount obtained by multiplying (a) the number of
whole shares of Common Stock designated by the Holder in the Subscription Form
by (b) the Purchase Price then in effect or otherwise subject to Section 2. On
any such partial exercise, the Company, at its expense, will forthwith issue
and deliver to or upon the order of the Holder hereof a new Warrant of like
tenor, in the name of the Holder hereof or as such Holder (upon payment by such
Holder of any applicable transfer taxes) may request, the whole number of
shares of Common Stock for which such Warrant may still be exercised.

          1.4. Fair Market Value. Fair Market Value of a share of Common Stock as of
a particular date (the “Determination Date”) shall mean:

               (a) If the Company’s Common Stock is traded on an exchange or is quoted on
the National Association of Securities Dealers, Inc. Automated Quotation
(“NASDAQ”), National Market System, the NASDAQ SmallCap Market or the American
Stock Exchange, LLC, then the closing or last sale price, respectively,
reported for the last business day immediately preceding the Determination
Date;

               (b) If the Company’s Common Stock is not traded on an exchange or on the
NASDAQ National Market System, the NASDAQ SmallCap Market or the American Stock
Exchange, Inc., but is traded in the over-the-counter market, then the average
of the closing bid and ask prices reported for the last business day
immediately preceding the Determination Date;

               (c) Except as provided in clause (d) below, if the Company’s Common Stock
is not publicly traded, then as the Holder and the Company agree, or in the
absence of such an agreement, by arbitration in accordance with the rules then
standing of the American Arbitration Association, before a single arbitrator to
be chosen from a panel of persons qualified by education and training to pass
on the matter to be decided; or

               (d) If the Determination Date is the date of a liquidation, dissolution or
winding up, or any event deemed to be a liquidation, dissolution or winding up
pursuant to the Company’s charter, then all amounts to be payable per share to
holders of the Common Stock pursuant to the charter in the event of such
liquidation, dissolution or winding up, plus all other amounts to be payable
per share in respect of the Common Stock in liquidation under the charter,
assuming for the purposes of this clause

(Stock Purchase Warrant)

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(d) that all of the shares of Common Stock then issuable upon exercise of
all of the Warrants are outstanding at the Determination Date.

          1.5. Company Acknowledgment. The Company will, at the time of the exercise
of the Warrant, upon the request of the Holder hereof acknowledge in writing
its continuing obligation to afford to such Holder any rights to which such
Holder shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to
afford to such Holder any such rights.

          1.6. Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the Holder of the Warrants
pursuant to Subsection 3.2, such bank or trust company shall have all the
powers and duties of a warrant agent (as hereinafter described) and shall
accept, in its own name for the account of the Company or such successor person
as may be entitled thereto, all amounts otherwise payable to the Company or
such successor, as the case may be, on exercise of this Warrant pursuant to
this Section 1.

          1.7 Delivery of Stock Certificates, etc. on Exercise. The Company agrees
that the shares of Common Stock purchased upon exercise of this Warrant shall
be deemed to be issued to the Holder hereof as the record owner of such shares
as of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within five (5) days thereafter, the Company at its expense (including
the payment by it of any applicable issue taxes) will cause to be issued in the
name of and delivered to the Holder hereof, or as such Holder (upon payment by
such Holder of any applicable transfer taxes) may direct in compliance with
applicable securities laws, a certificate or certificates for the number of
duly and validly issued, fully paid and nonassessable shares of Common Stock
(or Other Securities) to which such Holder shall be entitled on such exercise,
plus, in lieu of any fractional share to which such Holder would otherwise be
entitled, cash equal to such fraction multiplied by the then Fair Market Value
of one full share of Common Stock, together with any other stock or other
securities and property (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise.

     2. Cashless Exercise.

          (a) If a Registration Statement (as defined in the Subscription Agreement)
(“Registration Statement”) is effective and the Holder may sell its shares of
Common Stock upon exercise hereof pursuant to the Registration Statement, this
Warrant may be exercisable in whole or in part for cash only as set forth in
Section 1 above. If no such Registration Statement is available, then payment
upon exercise may be made at the option of the Holder either in (i) cash, wire
transfer or by certified or official bank check payable to the order of the
Company equal to the applicable aggregate Purchase Price, (ii) by delivery of
Common Stock issuable upon exercise of the Warrants in accordance with Section
(b) below or (iii) by a combination of any of the foregoing methods, for the
number of Common Stock specified in such form (as such exercise number shall be
adjusted to reflect any adjustment in the total number of shares of Common
Stock issuable to the holder per the terms of this Warrant) and the holder
shall thereupon be entitled to receive the number of duly authorized, validly
issued, fully-paid and non-assessable shares of Common Stock (or Other
Securities) determined as provided herein.

          (b) Subject to the provisions herein to the contrary, if the Fair Market
Value of one share of Common Stock is greater than the Purchase Price (at the
date of calculation as set forth below), in lieu of exercising this Warrant for
cash, the holder may elect to receive shares equal to the value (as determined
below) of this Warrant (or the portion thereof being cancelled) by surrender of
this Warrant at the principal office of the Company together with the properly
endorsed Subscription Form in which

(Stock Purchase Warrant)

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event the Company shall issue to the holder a number of shares of Common
Stock computed using the following formula:

	 	 	 
	X=

	  Y (A-B)
	

	

	

	      A
	 
	 	 
	Where X=

	 	the number of shares of Common Stock to be issued to the holder
	 
	 	 
	Y=

	 	the number of shares of Common Stock
purchasable under the Warrant or, if only a portion of
the Warrant is being exercised, the portion of the
Warrant being exercised (at the date of such
calculation)
	 
	 	 
	A=

	 	the Fair Market Value of one share of
the Company’s Common Stock (at the date of such
calculation)
	 
	 	 
	B=

	 	Purchase Price (as adjusted to the
date of such calculation)

          (c) The Holder may employ the cashless exercise feature described in
Section (b) above only during the pendency of a Non-Registration Event as
described in Section 11 of the Subscription Agreement.

     For purposes of Rule 144 promulgated under the 1933 Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced, on
the date this Warrant was originally issued pursuant to the Subscription
Agreement.

     3. Adjustment for Reorganization, Consolidation, Merger, etc.

          3.1. Reorganization, Consolidation, Merger, etc. In case at any time or
from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person or (c) transfer all or
substantially all of its properties or assets to any other person under any
plan or arrangement contemplating the dissolution of the Company, then, in each
such case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder of this
Warrant, on the exercise hereof as provided in Section 1, at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and
property (including cash) to which such Holder would have been entitled upon
such consummation or in connection with such dissolution, as the case may be,
if such Holder had so exercised this Warrant, immediately prior thereto, all
subject to further adjustment thereafter as provided in Section 4.

          3.2. Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause
to be delivered the stock and other securities and property (including cash,
where applicable) receivable by the Holder of the Warrants after the effective
date of such dissolution pursuant to this Section 3 to a bank or trust company
(a “Trustee”) having its principal office in New York, NY, as trustee for the
Holder of the Warrants.

          3.3. Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the Other Securities and property
receivable on the exercise of this Warrant after the consummation of such
reorganization, consolidation or merger or the effective date of dissolution
following any such transfer, as the case may

(Stock Purchase Warrant)

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be, and shall be binding upon the issuer of any Other Securities,
including, in the case of any such transfer, the person acquiring all or
substantially all of the properties or assets of the Company, whether or not
such person shall have expressly assumed the terms of this Warrant as provided
in Section 4. In the event this Warrant does not continue in full force and
effect after the consummation of the transaction described in this Section 3,
then only in such event will the Company’s securities and property (including
cash, where applicable) receivable by the Holder of the Warrants be delivered
to the Trustee as contemplated by Section 3.2.

          3.4 Share Issuance. Until the Expiration Date, if the Company shall issue
any Common Stock except for the Excepted Issuances (as defined in the
Subscription Agreement), prior to the complete exercise of this Warrant for a
consideration less than the Purchase Price that would be in effect at the time
of such issue, then, and thereafter successively upon each such issue, the
Purchase 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
Company carrying the right to convert such security or debt instrument into
Common Stock or of any warrant, right or option to purchase Common Stock shall
result in an adjustment to the Purchase Price upon the issuance of the
above-described security, debt instrument, warrant, right, or option and again
at any time upon any subsequent issuances of shares of Common Stock upon
exercise of such conversion or purchase rights if such issuance is at a price
lower than the Purchase Price in effect upon such issuance. The reduction of
the Purchase Price described in this Section 3.4 is in addition to the other
rights of the Holder described in the Subscription Agreement.

     4. Extraordinary Events Regarding Common Stock. In the event that the
Company shall (a) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Purchase Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such event, and
the product so obtained shall thereafter be the Purchase Price then in effect.
The Purchase Price, as so adjusted, shall be readjusted in the same manner upon
the happening of any successive event or events described herein in this
Section 4. The number of shares of Common Stock that the Holder of this Warrant
shall thereafter, on the exercise hereof as provided in Section 1, be entitled
to receive shall be adjusted to a number determined by multiplying the number
of shares of Common Stock that would otherwise (but for the provisions of this
Section 4) be issuable on such exercise by a fraction of which (a) the
numerator is the Purchase Price that would otherwise (but for the provisions of
this Section 4) be in effect, and (b) the denominator is the Purchase Price in
effect on the date of such exercise.

     5. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on
the exercise of the Warrants, the Company at its expense will promptly cause
its Chief Financial Officer or other appropriate designee to compute such
adjustment or readjustment in accordance with the terms of the Warrant and
prepare a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based,
including a statement of (a) the consideration received or receivable by the
Company for any additional shares of Common Stock (or Other Securities) issued
or sold or deemed to have been issued or sold, (b) the number of shares of
Common Stock (or Other Securities) outstanding or deemed to be outstanding, and
(c) the Purchase Price and the number of shares of Common Stock to be received
upon exercise of this Warrant, in effect immediately prior to such adjustment
or readjustment and as adjusted or readjusted as provided in this Warrant. The
Company will forthwith mail a copy of each such certificate to the Holder of
the Warrant and any Warrant Agent of the Company (appointed pursuant to Section
11 hereof).

(Stock Purchase Warrant)

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     6. Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial
Statements. The Company will at all times reserve and keep available, solely
for issuance and delivery on the exercise of the Warrants, all shares of Common
Stock (or Other Securities) from time to time issuable on the exercise of the
Warrant. This Warrant entitles the Holder hereof to receive copies of all
financial and other information distributed or required to be distributed to
the holders of the Company’s Common Stock.

     7. Assignment; Exchange of Warrant. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a “Transferor”). On the surrender
for exchange of this Warrant, with the Transferor’s endorsement in the form of
Exhibit B attached hereto (the “Transferor Endorsement Form”) and together with
an opinion of counsel reasonably satisfactory to the Company that the transfer
of this Warrant will be in compliance with applicable securities laws, the
Company will issue and deliver to or on the order of the Transferor thereof a
new Warrant or Warrants of like tenor, in the name of the Transferor and/or the
transferee(s) specified in such Transferor Endorsement Form (each a
“Transferee”), calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock called for on the face or faces of the Warrant
so surrendered by the Transferor.

     8. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense, twice only, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.

     9. Registration Rights. The Holder of this Warrant has been granted
certain registration rights by the Company. These registration rights are set
forth in the Subscription Agreement. The terms of the Subscription Agreement
are incorporated herein by this reference. Upon the occurrence of a
Non-Registration Event, or in the event the Company is unable to issue Common
Stock upon exercise of this Warrant that has been registered in a Registration
Statement described in Section 11 of the Subscription Agreement, within the
time periods described in the Subscription Agreement, which Registration
Statement must be effective for the periods set forth in the Subscription
Agreement, then upon written demand made by the Holder, the Company will pay to
the Holder of this Warrant, in lieu of delivering Common Stock, a sum equal to
the closing price of the Company’s Common Stock on the Principal Market on the
trading date immediately preceding the date notice is given by the Holder, less
the Purchase Price, for each share of Common Stock designated in such notice
from the Holder.

     10. Maximum Exercise. The Holder shall not be entitled to exercise this
Warrant on an exercise date, in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates on an exercise date,
and (ii) the number of shares of Common Stock issuable upon the exercise of
this Warrant with respect to which the determination of this limitation is
being made on an exercise date, which would result in beneficial ownership by
the Holder and its affiliates of more than 4.99% of the outstanding shares of
Common Stock on such date. For the purposes of 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 Regulation 13d-3
thereunder. Subject to the foregoing, the Holder shall not be limited to
aggregate exercises which would result in the issuance of more than 4.99%. The
Holder shall have the authority and obligation to determine whether the
restriction contained in this Section 10 will limit any exercise hereunder and
to the extent that the Holder determines that the limitation contained in this
Section applies, the determination of which portion of the Warrants are
exercisable shall be the responsibility and obligation of the Holder. The
restriction described in this paragraph may be revoked upon sixty-one (61) days
prior notice from the Holder to the Company. The Holder may allocate which of
the equity of the Company deemed beneficially owned by the Subscriber

(Stock Purchase Warrant)

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shall be included in the 4.99% amount described above and which shall be
allocated to the excess above 4.99%.

     11. Warrant Agent. The Company may, by written notice to the Holder of
the Warrant, appoint an agent (a “Warrant Agent”) for the purpose of issuing
Common Stock (or Other Securities) on the exercise of this Warrant pursuant to
Section 1, exchanging this Warrant pursuant to Section 7, and replacing this
Warrant pursuant to Section 8, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such Warrant Agent.

     12. Transfer on the Company’s Books. Until this Warrant is transferred on
the books of the Company, the Company may treat the registered holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

     13. 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: 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, and (ii) if
to the Holder, to the address and telecopier number listed on the first
paragraph of this Warrant, with a copy by telecopier only to: Grushko &
Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York 10176,
telecopier number: (212) 697-3575.

     14. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or
termination is sought. This Warrant shall be construed and enforced in
accordance with and governed by the laws of New York. Any dispute relating to
this Warrant shall be adjudicated in New York County in the State of New York.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision.

(Stock Purchase Warrant)

7

 

     IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
first written above.

	 	 	 	 	 
	 	GOLDSPRING, INC.

 	 
	 	By:  	/s/ Robert T. Faber	 
	 	 	Name:  	Robert T. Faber, President 	 
	 	 	 	 
	 

(Stock Purchase Warrant)

8

 

Exhibit A

FORM OF SUBSCRIPTION

(to be signed only on exercise of Warrant)

TO: GOLDSPRING, INC.

The undersigned, pursuant to the provisions set forth in the attached Warrant
(No.                   ), hereby irrevocably elects to purchase (check applicable box):

                             shares of the Common Stock covered by such Warrant; or

         the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in Section 2.

The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is
$                   . Such payment takes the form of (check applicable box or boxes):

         $                    in lawful money of the United States; and/or

           the cancellation of such portion of the attached Warrant as is exercisable
for a total of                     shares of Common Stock (using a Fair Market Value of
$                     per share for purposes of this calculation); and/or

         the cancellation of such number of shares of Common Stock as is necessary,
in accordance with the formula set forth in Section 2, to exercise this Warrant
with respect to the maximum number of shares of Common Stock purchasable
pursuant to the cashless exercise procedure set forth in Section 2.

The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to                                                                                                                   
                                        whose address is 

                     
                                                                                                                                           
                                                                                                                                           
               
               
               
               
               
               
               
               
               
.

The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant
shall be made pursuant to registration of the Common Stock under the Securities
Act of 1933, as amended (the “Securities Act”), or pursuant to an exemption
from registration under the Securities Act.

	 	 	 
	Dated:                                      
	 	 
	

	 	______________________________________________________

(Signature must conform to name of holder as

specified on the face of the Warrant)
	 
	 	 
	

	 	______________________________________________________

______________________________________________________

	

	 	(Address)

(Stock Purchase Warrant)

9

 

Exhibit B

FORM OF TRANSFEROR ENDORSEMENT

(To be signed only on transfer of Warrant)

     For value received, the undersigned hereby sells, assigns, and transfers
unto the person(s) named below under the heading “Transferees” the right
represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of GOLDSPRING, INC. to which the within Warrant relates
specified under the headings “Percentage Transferred” and “Number Transferred,”
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of GOLDSPRING,
INC. with full power of substitution in the premises.

	 	 	 	 	 
	Transferees

	 	Percentage Transferred

	 	Number Transferred

	

	 	

	 	

	

	 	

	 	

	

	 	

	 	

	 	 	 
	Dated:                    ,                    

	 	

(Signature must conform to name of (Name) holder as specified
	

	 	on the face of the warrant)
	 
	 	 
	Signed in the presence of:
	 	 
	 
	 	 
	

(Name)

	 	

(address)
	 
	 	 
	ACCEPTED AND AGREED:

[TRANSFEREE]

	 	

(address)
	 
	 	 
	

(Name)exv10w8

 

Exhibit 10.8

FUNDS ESCROW AGREEMENT

     This Agreement is dated as of the 30th day of November, 2004 among
Goldspring, Inc., a Florida corporation (the “Company”), the Subscribers
identified on Schedule A hereto (each a “Subscriber” and collectively
“Subscribers”), and Grushko & Mittman, P.C. (the “Escrow Agent”):

W I T N E S S E T H:

     WHEREAS, the Company and Subscribers have entered into a Subscription
Agreement calling for the sale by the Company to the Subscribers of Convertible
Notes in the aggregate principal amount of up to $12,000,000 and Warrants in
the denominations set forth on Schedule A hereto; and

     WHEREAS, the parties hereto require the Company to deliver the Notes and
Warrants against payment therefor, with such Notes, Warrants and the Escrowed
Payment to be delivered to the Escrow Agent to be held in escrow and released
by the Escrow Agent in accordance with the terms and conditions of this
Agreement; and

     WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant to
the terms and conditions of this Agreement;

     NOW THEREFORE, the parties agree as follows:

ARTICLE I

INTERPRETATION

     1.1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Subscription Agreement shall have the meanings given to
such terms in the Subscription Agreement. Whenever used in this Agreement, the
following terms shall have the following respective meanings:

          (a) “Agreement” means this Agreement and all amendments made hereto and
thereto by written agreement between the parties;

          (b) “Closing Date” shall have the meaning set forth in Section 14(b) of
the Subscription Agreement;

          (c) “Escrowed Payment” means the Common Stock, Class A Warrants and Green
Shoe Warrants set forth on Schedule A hereto;

          (d) “Legal Fees” shall have the meaning set forth in Section 8(b) of the
Subscription Agreement;

          (e) “Legal Opinion” means the original signed legal opinion referred to in
Section 6 of the Subscription Agreement;

          (f) “Notes” shall have the meaning set forth in the Subscription
Agreement;

          (g) “Subscription Agreement” means the Subscription Agreement (and the
exhibits thereto) entered into or to be entered into by the parties in
reference to the sale and purchase of the Notes and Warrants;

 

 

          (h) “Warrants” shall have the meaning set forth in Section 3 of the
Subscription Agreement;

          (i) Collectively, the executed Subscription Agreement, Notes, Legal
Opinion, and Warrants are referred to as “Company Documents”; and

          (j) Collectively, the Escrowed Payment and the executed Subscription
Agreement are referred to as “Subscriber Documents”.

     1.2. Entire Agreement. This Agreement along with the Company Documents
and the Subscriber Documents constitute the entire agreement between the
parties hereto pertaining to the Company Documents and Subscriber Documents and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties. There are no warranties,
representations and other agreements made by the parties in connection with the
subject matter hereof except as specifically set forth in this Agreement, the
Company Documents and the Subscriber Documents.

     1.3. Extended Meanings. In this Agreement words importing the singular
number include the plural and vice versa; words importing the masculine gender
include the feminine and neuter genders. The word “person” includes an
individual, body corporate, partnership, trustee or trust or unincorporated
association, executor, administrator or legal representative.

     1.4. Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by all parties, or, in the
case of a waiver, by the party waiving compliance. Except as expressly stated
herein, no delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of any party of any right, power or privilege hereunder preclude any
other or future exercise of any other right, power or privilege hereunder.

     1.5. Headings. The division of this Agreement into articles, sections,
subsections and paragraphs and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement.

     1.6. Law Governing this Agreement. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
regard to principles of conflicts of laws. Any action brought by either party
against the other concerning the transactions contemplated by this Agreement
shall be brought only in the state courts of New York or in the federal courts
located in the state of New York. Both parties and the individuals executing
this Agreement and other agreements on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury. The prevailing party
(which shall be the party which receives an award most closely resembling the
remedy or action sought) shall be entitled to recover from the other party its
reasonable attorney’s fees and costs. In the event that any provision of this
Agreement or any other agreement delivered in connection herewith is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any agreement.

     1.7. Specific Enforcement, Consent to Jurisdiction. The Company and
Subscriber acknowledge and agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injuction or
injunctions to prevent or cure breaches of the provisions of this

(Funds Escrow Agreement)

2

 

Agreement and to enforce specifically the terms and provisions hereof or
thereof, this being in addition to any other remedy to which any of them may be
entitled by law or equity. Subject to Section 1.6 hereof, each of the Company
and Subscriber hereby waives, and agrees not to assert in any such suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction
of such court, that the suit, action or proceeding is brought in an
inconvenient forum or that the venue of the suit, action or proceeding is
improper. Nothing in this Section shall affect or limit any right to serve
process in any other manner permitted by law.

ARTICLE II

DELIVERIES TO THE ESCROW AGENT

     2.1. Company Deliveries. On or before December 6, 2004, the Company shall
deliver the Legal Fees and Company Documents to the Escrow Agent. The Legal
Fees will be delivered pursuant to the following wire transfer instructions:

Citibank, N.A.

1155 6th Avenue

New York, NY 10036, USA

ABA Number: 0210-00089

For Credit to: Grushko & Mittman, IOLA Trust Account

Account Number: 45208884

     2.2. Subscriber Deliveries. On or before December 6, 2004, each
Subscriber shall deliver to the Escrow Agent such Subscriber’s portion of the
Escrow Payment and the executed Subscription Agreement.

     2.3. Intention to Create Escrow Over Company Documents and Subscriber
Documents. The Subscriber and Company intend that the Company Documents and
Subscriber Documents shall be held in escrow by the Escrow Agent pursuant to
this Agreement for their benefit as set forth herein.

     2.4. Escrow Agent to Deliver Company Documents and Subscriber Documents.
The Escrow Agent shall hold and release the Company Documents and Subscriber
Documents only in accordance with the terms and conditions of this Agreement.

ARTICLE III

RELEASE OF COMPANY DOCUMENTS AND SUBSCRIBER DOCUMENTS

     3.1. Release of Escrow. Subject to the provisions of Section 4.2, the
Escrow Agent shall release the Company Documents and Subscriber Documents as
follows:

          (a) On the Closing Date, the Escrow Agent will simultaneously release the
Company Documents to the Subscriber and release the Subscriber Documents to the
Company except that the Legal Fees will be released to the Subscriber’s
attorneys.

          (b) All funds to be delivered to the Company shall be delivered pursuant
to the wire instructions to be provided in writing by the Company to the Escrow
Agent.

          (c) Notwithstanding the above, upon receipt by the Escrow Agent of joint
written instructions (“Joint Instructions”) signed by the Company and the
Subscriber, it shall deliver the Company Documents and Subscriber Documents in
accordance with the terms of the Joint Instructions.

(Funds Escrow Agreement)

3

 

          (d) Notwithstanding the above, upon receipt by the Escrow Agent of a final
and non-appealable judgment, order, decree or award of a court of competent
jurisdiction (a “Court Order”), the Escrow Agent shall deliver the Company
Documents and Subscriber Documents in accordance with the Court Order. Any
Court Order shall be accompanied by an opinion of counsel for the party
presenting the Court Order to the Escrow Agent (which opinion shall be
satisfactory to the Escrow Agent) to the effect that the court issuing the
Court Order has competent jurisdiction and that the Court Order is final and
non-appealable.

     3.2. Acknowledgement of Company and Subscriber; Disputes. The Company and
the Subscriber acknowledge that the only terms and conditions upon which the
Company Documents and Subscriber Documents are to be released are set forth in
Sections 3 and 4 of this Agreement. The Company and the Subscriber reaffirm
their agreement to abide by the terms and conditions of this Agreement with
respect to the release of the Company Documents and Subscriber Documents. Any
dispute with respect to the release of the Company Documents and Subscriber
Documents shall be resolved pursuant to Section 4.2 or by agreement between the
Company and Subscriber.

ARTICLE IV

CONCERNING THE ESCROW AGENT

     4.1. Duties and Responsibilities of the Escrow Agent. The Escrow Agent’s
duties and responsibilities shall be subject to the following terms and
conditions:

          (a) The Subscriber and Company acknowledge and agree that the Escrow Agent
(i) shall not be responsible for or bound by, and shall not be required to
inquire into whether either the Subscriber or Company is entitled to receipt of
the Company Documents and Subscriber Documents pursuant to, any other agreement
or otherwise; (ii) shall be obligated only for the performance of such duties
as are specifically assumed by the Escrow Agent pursuant to this Agreement;
(iii) may rely on and shall be protected in acting or refraining from acting
upon any written notice, instruction, instrument, statement, request or
document furnished to it hereunder and believed by the Escrow Agent in good
faith to be genuine and to have been signed or presented by the proper person
or party, without being required to determine the authenticity or correctness
of any fact stated therein or the propriety or validity or the service thereof;
(iv) may assume that any person believed by the Escrow Agent in good faith to
be authorized to give notice or make any statement or execute any document in
connection with the provisions hereof is so authorized; (v) shall not be under
any duty to give the property held by Escrow Agent hereunder any greater degree
of care than Escrow Agent gives its own similar property; and (vi) may consult
counsel satisfactory to Escrow Agent, the opinion of such counsel to be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by Escrow Agent hereunder in good faith and in accordance
with the opinion of such counsel.

          (b) The Subscriber and Company acknowledge that the Escrow Agent is acting
solely as a stakeholder at their request and that the Escrow Agent shall not be
liable for any action taken by Escrow Agent in good faith and believed by
Escrow Agent to be authorized or within the rights or powers conferred upon
Escrow Agent by this Agreement. The Subscriber and Company, jointly and
severally, agree to indemnify and hold harmless the Escrow Agent and any of
Escrow Agent’s partners, employees, agents and representatives for any action
taken or omitted to be taken by Escrow Agent or any of them hereunder,
including the fees of outside counsel and other costs and expenses of defending
itself against any claim or liability under this Agreement, except in the case
of gross negligence or willful misconduct on Escrow Agent’s part committed in
its capacity as Escrow Agent under this Agreement. The Escrow Agent shall owe
a duty only to the Subscriber and Company under this Agreement and to no other
person.

(Funds Escrow Agreement)

4

 

          (c) The Subscriber and Company jointly and severally agree to reimburse
the Escrow Agent for outside counsel fees, to the extent authorized hereunder
and incurred in connection with the performance of its duties and
responsibilities hereunder.

          (d) The Escrow Agent may at any time resign as Escrow Agent hereunder by
giving five (5) days prior written notice of resignation to the Subscriber and
the Company. Prior to the effective date of the resignation as specified in
such notice, the Subscriber and Company will issue to the Escrow Agent a Joint
Instruction authorizing delivery of the Company Documents and Subscriber
Documents to a substitute Escrow Agent selected by the Subscriber and Company.
If no successor Escrow Agent is named by the Subscriber and Company, the Escrow
Agent may apply to a court of competent jurisdiction in the State of New York
for appointment of a successor Escrow Agent, and to deposit the Company
Documents and Subscriber Documents with the clerk of any such court.

          (e) The Escrow Agent does not have and will not have any interest in the
Company Documents and Subscriber Documents, but is serving only as escrow
agent, having only possession thereof. The Escrow Agent shall not be liable
for any loss resulting from the making or retention of any investment in
accordance with this Escrow Agreement.

          (f) This Agreement sets forth exclusively the duties of the Escrow Agent
with respect to any and all matters pertinent thereto and no implied duties or
obligations shall be read into this Agreement.

          (g) The Escrow Agent shall be permitted to act as counsel for the
Subscriber in any dispute as to the disposition of the Company Documents and
Subscriber Documents, in any other dispute between the Subscriber and Company,
whether or not the Escrow Agent is then holding the Company Documents and
Subscriber Documents and continues to act as the Escrow Agent hereunder.

          (h) The provisions of this Section 4.1 shall survive the resignation of
the Escrow Agent or the termination of this Agreement.

     4.2. Dispute Resolution: Judgments. Resolution of disputes arising under
this Agreement shall be subject to the following terms and conditions:

          (a) If any dispute shall arise with respect to the delivery, ownership,
right of possession or disposition of the Company Documents and Subscriber
Documents, or if the Escrow Agent shall in good faith be uncertain as to its
duties or rights hereunder, the Escrow Agent shall be authorized, without
liability to anyone, to (i) refrain from taking any action other than to
continue to hold the Company Documents and Subscriber Documents pending receipt
of a Joint Instruction from the Subscriber and Company, or (ii) deposit the
Company Documents and Subscriber Documents with any court of competent
jurisdiction in the State of New York, in which event the Escrow Agent shall
give written notice thereof to the Subscriber and the Company and shall
thereupon be relieved and discharged from all further obligations pursuant to
this Agreement. The Escrow Agent may, but shall be under no duty to, institute
or defend any legal proceedings which relate to the Company Documents and
Subscriber Documents. The Escrow Agent shall have the right to retain counsel
if it becomes involved in any disagreement, dispute or litigation on account of
this Agreement or otherwise determines that it is necessary to consult counsel.

          (b) The Escrow Agent is hereby expressly authorized to comply with and
obey any Court Order. In case the Escrow Agent obeys or complies with a Court
Order, the Escrow Agent shall not be liable to the Subscriber and Company or to
any other person, firm, corporation or entity by reason of such compliance.

(Funds Escrow Agreement)

5

 

ARTICLE V

GENERAL MATTERS

     5.1. Termination. This escrow shall terminate upon the release of all of
the Company Documents and Subscriber Documents or at any time upon the
agreement in writing of the Subscriber and Company.

     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:

	(a)	 	If to the Company, to:

Goldspring, Inc.

8585 E. Hartford Drive, Suite 400

Scottsdale, AZ 85255

Attn: Robert T. Faber, President & CEO

Fax: (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.

Fax: (602)445-8100

	(b)	 	If to the Subscribers, to: the addresses and fax numbers listed on
Schedule A hereto

	(c)	 	If to the Escrow Agent, to:

Grushko & Mittman, P.C.

551 Fifth Avenue, Suite 1601

New York, New York 10176

Fax: 212-697-3575

or to such other address as any of them shall give to the others by notice made
pursuant to this Section 5.2.

     5.3. Interest. No portion of the Escrowed Payment shall be held in an
interest bearing account nor will interest be payable in connection therewith.

(Funds Escrow Agreement)

6

 

     5.4. Assignment; Binding Agreement. Neither this Agreement nor any right
or obligation hereunder shall be assignable by any party without the prior
written consent of the other parties hereto. This Agreement shall enure to the
benefit of and be binding upon the parties hereto and their respective legal
representatives, successors and assigns.

     5.5. Invalidity. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal, or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.

     5.6. Counterparts/Execution. This Agreement may be executed in any number
of counterparts and by different signatories hereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument. This Agreement
may be executed by facsimile transmission and delivered by facsimile
transmission.

(Funds Escrow Agreement)

7

 

     5.7. Agreement. Each of the undersigned states that he has read the
foregoing Funds Escrow Agreement and understands and agrees to it.

	 	 	 	 	 
	 	 	GOLDSPRING, INC.

the “Company”
	 
	 	 	 	 
	

	 	By:	 	/s/ Robert T. Faber
	

	 	 	 	
 
	

	 	 	 	Robert T. Faber, President

	 	 	 	 	 	 	 	 	 	 	 
	GAMMA OPPORTUNITY CAPITAL PARTNERS, LP	 	LONGVIEW FUND LP	 	LONGVIEW EQUITY FUND, LP
	“Subscriber”

	 	 	 	“Subscriber”
	 	 	 	“Subscriber”	 	 
	 
	 	/s/ Jonathan P. Knight	 	 	 	/s/ S. Michael Rudolph	 	 	 	/s/ Wayne Coleson
	
 	 	
 	 	
 
	Print Name:

	 	Jonathan P. Knight	 	Print Name:	 	S. Michael Rudolph	 	Print Name:	 	Wayne Coleson
	

	 	
 
	 	 	 	
 
	 	 	 	
 
	 
	 	 	 	 	 	 	 	 	 	 
	LONGVIEW INTERNATIONAL EQUITY FUND, LP	 	ALPHA CAPITAL AKTIENGESELLSCHAFT	 	CAPITAL VENTURES INTERNATIONAL
	“Subscriber”

	 	 	 	“Subscriber”
	 	 	 	“Subscriber”	 	 
	 
	 	/s/ Wayne Coleson	 	 	 	/s/ Konrad Ackermann	 	 	 	/s/ Martin Kobinger
	
 	 	
 	 	
 
	Print Name:

	 	Wayne Coleson	 	Print Name:	 	Konrad Ackermann	 	Print Name:	 	Martin Kobinger
	

	 	
 
	 	 	 	
 
	 	 	 	
 
	 
	 	 	 	 	 	 	 	 	 	 
	PORTSIDE GROWTH AND OPPORTUNITY FUND	 	ENABLE GROWTH PARTNERS L.P.	 	WHALEHAVEN FUNDS LIMITED
	“Subscriber”

	 	 	 	“Subscriber”
	 	 	 	“Subscriber”	 	 
	 
	 	/s/ Jeffrey Smith	 	 	 	/s/ Mitch Levine	 	 	 	/s/ Evan Schemenauer
	
 	 	
 	 	
 
	Print Name:

	 	Jeffrey Smith

	 	Print Name:
	 	Mitch Levine	 	Print Name:	 	Evan Schemenauer - Director
	

	 	Authorized Signatory	 	 	 	
 
	 	 	 	
 
	 
	 	 	 	 	 	 	 	 	 	 
	STONESTREET LIMITED PARTNERSHIP	 	SMITHFIELD FIDUCIARY LLC	 	TCMP3 PARTNERS LLP
	“Subscriber”

	 	 	 	“Subscriber”
	 	 	 	“Subscriber”	 	 
	 
	 	/s/ Michael Finkelstein	 	 	 	/s/ Adam J. Chill	 	 	 	/s/ Steven E. Slawson
	
 	 	
 	 	
 
	Print Name:

	 	Michael Finkelstein	 	Print Name:
	 	Adam J. Chill

	 	Print Name:	 	Steven E. Slawson
	

	 	
 
	 	 	 	Authorized Signatory	 	 	 	
 
	 
	 	 	 	 	 	 	 	 	 	 
	BRISTOL INVESTMENT FUND, LTD.	 	VERTICAL VENTURES, LLC	 	MERRIMAN CURHAN FORD CORPORATION
	“Subscriber”

	 	 	 	“Subscriber”
	 	 	 	“Subscriber”	 	 
	 
	 	/s/ Paul Kessler	 	 	 	/s/ Joshua Silverman	 	 	 	/s/ D. Jonathan Merriman
	
 	 	
 	 	
 
	Print Name:

	 	Paul Kessler, Director	 	Print Name:
	 	Joshua Silverman	 	Print Name:	 	Merriman
	

	 	
 
	 	 	 	
 
	 	 	 	
 

	 	 	 
	

	 	ESCROW AGENT:
	 
	 	/s/ Edward Grushko
	

	 	
 
	

	 	GRUSHKO & MITTMAN, P.C.

(Funds Escrow Agreement)

8

 

     5.7. Agreement. Each of the undersigned states that he has read the
foregoing Funds Escrow Agreement and understands and agrees to it.

	 	 	 	 	 
	 	 	GOLDSPRING, INC.

the “Company”
	 
	 	 	 	 
	

	 	By:	 	/s/ Robert T. Faber
	

	 	 	 	
 
	

	 	 	 	Robert T. Faber, President

	 	 	 	 	 	 	 	 	 	 	 
	A. TOD HINDIN	 	KENNETH R. WERNER REV TST 
DTD 7/20/96	 	THOMAS P. O’SHEA, JR.
	“Subscriber”

	 	 	 	“Subscriber”
	 	 	 	“Subscriber”	 	 
	/s/ A. Tod Hindin	 	/s/ Kenneth Werner	 	/s/ Thomas P. O’Shea, Jr.
	
 	 	
 	 	
 
	Print Name:
	 	A. Tod Hindin	 	Print Name:	 	Kenneth Werner	 	Print Name:	 	Thomas P. O’Shea, Jr.
	

	 	
 
	 	 	 	
 
	 	 	 	
 
	 
	 	 	 	 	 	 	 	 	 	 
	D. JONATHAN MERRIMAN	 	BROCK GANELES	 	ELISE STERN
	“Subscriber”

	 	 	 	“Subscriber”
	 	 	 	“Subscriber”	 	 
	/s/ D. Jonathan Merriman	 	/s/ Brock Ganeles	 	/s/ Elise Stern
	
 	 	
 	 	
 
	Print Name:
	 	D. Jonathan Merriman	 	Print Name:	 	Brock Ganeles	 	Print Name:	 	Elise Stern
	

	 	
 
	 	 	 	
 
	 	 	 	
 
	 
	 	 	 	 	 	 	 	 	 	 
	CRAIG E. SULTAN	 	CARL FRANKSON	 	JON M. PLEXICO
	“Subscriber”

	 	 	 	“Subscriber”
	 	 	 	“Subscriber”	 	 
	/s/ Craig E. Sultan	 	/s/ Carl Frankson	 	/s/ Jon M. Plexico
	
 	 	
 	 	
 
	Print Name:
	 	Craig E. Sultan	 	Print Name:	 	Carl Frankson	 	Print Name:	 	Jon M. Plexico
	

	 	
 
	 	 	 	
 
	 	 	 	
 
	 
	 	 	 	 	 	 	 	 	 	 
	PETE MARCIL	 	DAVID BAIN	 	STEVEN R. SARRACINO
	“Subscriber”

	 	 	 	“Subscriber”
	 	 	 	“Subscriber”	 	 
	/s/ Peter C. Marcil	 	/s/ David Bain	 	/s/ Steven R. Sarracino
	
 	 	
 	 	
 
	Print Name:
	 	Peter C. Marcil	 	Print Name:	 	David Bain	 	Print Name:	 	Steven R. Sarracino
	

	 	
 
	 	 	 	
 
	 	 	 	
 
	 
	 	 	 	 	 	 	 	 	 	 
	GREGORY S. CURHAN	 	JOHN HIESTAND	 	ROBERT E. FORD
	“Subscriber”

	 	 	 	“Subscriber”
	 	 	 	“Subscriber”	 	 
	/s/ Gregory S. Curhan	 	/s/ John Hiestand	 	/s/ Robert E. Ford
	
 	 	
 	 	
 
	Print Name:
	 	Gregory S. Curhan	 	Print Name:	 	John Hiestand	 	Print Name:	 	Robert E. Ford
	

	 	
 
	 	 	 	
 
	 	 	 	
 

	 	 	 
	

	 	ESCROW AGENT:
	 
	 	/s/ Edward Grushko
	

	 	
 
	

	 	GRUSHKO & MITTMAN, P.C.

(Funds Escrow Agreement)

9

 

     5.7. Agreement. Each of the undersigned states that he has read the
foregoing Funds Escrow Agreement and understands and agrees to it.

	 	 	 	 	 
	 	 	GOLDSPRING, INC.

the “Company”
	 
	 	 	 	 
	

	 	By:	 	/s/ Robert T. Faber
	

	 	 	 	
 
	

	 	 	 	Robert T. Faber, President

	 	 	 	 	 	 	 	 	 	 	 
	ERIC WOLD	 	CHRISTOPHER AGUILAR	 	PETER A. BLACKWOOD
	“Subscriber”

	 	 	 	“Subscriber”
	 	 	 	“Subscriber”	 	 
	 
	 	/s/ Eric Wold	 	 	 	/s/ Christopher Aguilar	 	 	 	/s/ Peter A. Blackwood
	
 	 	
 	 	
 
	Print Name:

	 	Eric Wold	 	Print Name:
	 	Christopher Aguilar	 	Print Name:	 	Peter A. Blackwood
	

	 	
 
	 	 	 	
 
	 	 	 	
 
	 
	 	 	 	 	 	 	 	 	 	 
	GENESIS MICROCAP INC.	 	JOHN V. WINFIELD	 	JOHN V. WINFIELD IRA-1
	“Subscriber”

	 	 	 	“Subscriber”
	 	 	 	“Subscriber”	 	 
	 
	 	/s/ Larry Gibbons	 	 	 	/s/ John V. Winfield	 	 	 	/s/ John V. Winfield
	
 	 	
 	 	
 
	Print Name:

	 	Lawrence S. Gibbons 	 	Print Name:
	 	John V. Winfield 	 	Print Name:	 	John V. Winfield
	

	 	
 
	 	 	 	
 
	 	 	 	
 
	 
	 	 	 	 	 	 	 	 	 	 
	JOHN V. WINFIELD IRA-2	 	SANTA FE FINANCIAL CORP.	 	PORTSMOUTH SQUARE, INC.
	“Subscriber”

	 	 	 	“Subscriber”
	 	 	 	“Subscriber”	 	 
	 
	 	/s/ John V. Winfield	 	 	 	/s/ John V. Winfield	 	 	 	/s/ John V. Winfield
	
 	 	
 	 	
 
	Print Name:

	 	John V. Winfield	 	Print Name:
	 	John V. Winfield	 	Print Name:	 	John V. Winfield 
	

	 	
 
	 	 	 	
 
	 	 	 	
 
	 
	 	 	 	 	 	 	 	 	 	 
	INTERGROUP CORP.	 	ERIK FRANKLIN	 	 	 	 
	“Subscriber”

	 	 	 	“Subscriber”	 	 	 	 	 	 
	 
	 	/s/ John V. Winfield	 	 	 	/s/ Erik Franklin	 	 	 	 
	
 	 	
 	 	 	 	 
	Print Name:

	 	John V. Winfield	 	Print Name:	 	Erik Franklin	 	 	 	 
	

	 	
 
	 	 	 	
 	 	 	 	 

	 	 	 
	

	 	ESCROW AGENT:
	 
	 	/s/ Edward Grushko 
	

	 	
 
	

	 	GRUSHKO & MITTMAN, P.C.

(Funds Escrow Agreement)

10

 

SCHEDULE A TO FUNDS ESCROW AGREEMENT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	GREEN SHOE
	 	 	 	 	 	 	 	 	 	 	COMMON STOCK	 	CLASS A WARRANT	 	WARRANT
	 	 	NOTE PRINCIPAL	 	CLASS B	 	COMPONENT OF	 	COMPONENT OF	 	COMPONENT OF
	 SUBSCRIBER
	 	AMOUNT
	 	WARRANTS
	 	PURCHASE PRICE
	 	PURCHASE PRICE
	 	PURCHASE PRICE

	GAMMA OPPORTUNITY CAPITAL PARTNERS, LP

605 Crescent Executive Court, Suite 416

Lake Mary, Florida 32746

Fax:
	 	$	832,550	 	 	 	2,081,375	 	 	 	1,630,435	 	 	 	815,218	 	 	 	815,218	 
	LONGVIEW FUND LP

600 Montgomery Street, 44th Floor

San Francisco, CA 94111

Fax: (415) 981-5302
	 	$	832,550	 	 	 	2,081,375	 	 	 	1,630,435	 	 	 	815,218	 	 	 	815,218	 
	LONGVIEW EQUITY FUND, LP

600 Montgomery Street, 44th Floor

San Francisco, CA 94111

Fax: (415) 981-5302
	 	$	1,248,825	 	 	 	3,122,063	 	 	 	2,445,652	 	 	 	1,222,826	 	 	 	1,222,826	 
	LONGVIEW INTERNATIONAL EQUITY FUND, LP

600 Montgomery Street, 44th Floor

San Francisco, CA 94111

Fax: (415) 981-5302
	 	$	416,275	 	 	 	1,040,688	 	 	 	815,217	 	 	 	407,609	 	 	 	407,609	 
	ALPHA CAPITAL AKTIENGESELLSCHAFT

Pradafant 7

9490 Furstentums

Vaduz, Lichtenstein

Fax: 011-42-32323196
	 	$	555,033	 	 	 	1,387,583	 	 	 	1,086,957	 	 	 	543,479	 	 	 	543,479	 
	CAPITAL VENTURES INTERNATIONAL

401 City Lane Avenue, Suite 220

Bala Cynwyd, PA 19004

Fax:
	 	$	1,110,066	 	 	 	2,775,165	 	 	 	2,173,913	 	 	 	1,086,957	 	 	 	1,086,957	 
	PORTSIDE GROWTH AND OPPORTUNITY FUND

C/o Ramius Capital Group, LLC

666 Third Avenue, 26th Floor

New York, NY 10017

Fax: (212) 845-7999
	 	$	277,516	 	 	 	693,790	 	 	 	543,478	 	 	 	271,739	 	 	 	271,739	 

(Funds Escrow Agreement)

11

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	GREEN SHOE
	 	 	 	 	 	 	 	 	 	 	COMMON STOCK	 	CLASS A WARRANT	 	WARRANT
	 	 	NOTE PRINCIPAL	 	CLASS B	 	COMPONENT OF	 	COMPONENT OF	 	COMPONENT OF
	 SUBSCRIBER
	 	AMOUNT
	 	WARRANTS
	 	PURCHASE PRICE
	 	PURCHASE PRICE
	 	PURCHASE PRICE

	ENABLE GROWTH PARTNERS L.P.

One Ferry Building, Suite 255

San Francisco, CA 94111

Fax: (415) 677-1580
	 	$	222,013	 	 	 	555,033	 	 	 	434,783	 	 	 	217,392	 	 	 	217,392	 
	WHALEHAVEN FUNDS LIMITED 

3rd Floor, 14 Par-Laville Road

Hamilton, Bermuda HM08

Fax: (441) 292-1373

By:
	 	$	166,510	 	 	 	416,275	 	 	 	326,087	 	 	 	163,044	 	 	 	163,044	 
	STONESTREET LIMITED PARTNERSHIP

C/o Canaccord Capital Corporation

320 Bay Street, Suite 1300

Toronto, Ontario M5H 4A6, Canada

Fax: (416) 956-8989
	 	$	388,523	 	 	 	971,308	 	 	 	760,870	 	 	 	380,435	 	 	 	380,435	 
	SMITHFIELD FIDUCIARY LLC

C/o Highbridge Capital

9 West 57th Street, 27th Floor

New York, NY 10019

By: Adam Chill

Fax:
	 	$	277,516	 	 	 	693,790	 	 	 	543,478	 	 	 	271,739	 	 	 	271,739	 
	TCMP3 PARTNERS LLP

C/o Titan Capital Management

7 Century Drive, Suite 201

Parsippany, NJ 07054

Fax: (973) 540-0702
	 	$	111,006	 	 	 	277,515	 	 	 	217,391	 	 	 	108,696	 	 	 	108,696	 
	BRISTOL INVESTMENT FUND, LTD.

Caledonia House, Jennett Street

George Town, Grand Cayman

Cayman Islands

Fax: (323) 468-8307
	 	$	333,020	 	 	 	832,550	 	 	 	652,174	 	 	 	326,087	 	 	 	326,087	 
	VERTICAL VENTURES, LLC

641 Lexington Avenue, 26th Floor

New York, NY 10022

Fax: (212) 207-3452
	 	$	277,516	 	 	 	693,790	 	 	 	543,478	 	 	 	271,739	 	 	 	271,739	 
	MERRIMAN CURHAN FORD CORPORATION

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	139,313	 	 	 	348,283	 	 	 	272,826	 	 	 	136,413	 	 	 	136,413	 

(Funds Escrow Agreement)

12

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	GREEN SHOE
	 	 	 	 	 	 	 	 	 	 	COMMON STOCK	 	CLASS A WARRANT	 	WARRANT
	 	 	NOTE PRINCIPAL	 	CLASS B	 	COMPONENT OF	 	COMPONENT OF	 	COMPONENT OF
	 SUBSCRIBER
	 	AMOUNT
	 	WARRANTS
	 	PURCHASE PRICE
	 	PURCHASE PRICE
	 	PURCHASE PRICE

	A. TOD HINDIN

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	55,503	 	 	 	138,758	 	 	 	108,696	 	 	 	54,348	 	 	 	54,348	 
	KENNETH R. WERNER REV TST DTD 7/20/96

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	55,503	 	 	 	138,758	 	 	 	108,696	 	 	 	54,348	 	 	 	54,348	 
	THOMAS P. O’SHEA, JR.

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	33,302	 	 	 	83,255	 	 	 	65,217	 	 	 	32,609	 	 	 	32,609	 
	D. JONATHAN MERRIMAN

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	33,302	 	 	 	83,255	 	 	 	65,217	 	 	 	32,609	 	 	 	32,609	 
	BROCK GANELES

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	27,751	 	 	 	69,378	 	 	 	54,348	 	 	 	27,174	 	 	 	27,174	 
	ELISE STERN

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	27,751	 	 	 	69,378	 	 	 	54,348	 	 	 	27,174	 	 	 	27,174	 
	CRAIG E. SULTAN

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	27,751	 	 	 	69,378	 	 	 	54,348	 	 	 	27,174	 	 	 	27,174	 
	CARL FRANKSON

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	27,751	 	 	 	69,378	 	 	 	54,348	 	 	 	27,174	 	 	 	27,174	 
	JON M. PLEXICO

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	22,201	 	 	 	55,503	 	 	 	43,478	 	 	 	21,739	 	 	 	21,739	 
	PETE MARCIL

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	22,201	 	 	 	55,503	 	 	 	43,478	 	 	 	21,739	 	 	 	21,739	 

(Funds Escrow Agreement)

13

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	GREEN SHOE
	 	 	 	 	 	 	 	 	 	 	COMMON STOCK	 	CLASS A WARRANT	 	WARRANT
	 	 	NOTE PRINCIPAL	 	CLASS B	 	COMPONENT OF	 	COMPONENT OF	 	COMPONENT OF
	 SUBSCRIBER
	 	AMOUNT
	 	WARRANTS
	 	PURCHASE PRICE
	 	PURCHASE PRICE
	 	PURCHASE PRICE

	DAVID BAIN

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	22,201	 	 	 	55,503	 	 	 	43,478	 	 	 	21,739	 	 	 	21,739	 
	STEVEN R. SARRACINO

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	21,646	 	 	 	54,115	 	 	 	42,391	 	 	 	21,196	 	 	 	21,196	 
	GREGORY S. CURHAN

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	11,100	 	 	 	27,750	 	 	 	21,739	 	 	 	10,870	 	 	 	10,870	 
	JOHN HIESTAND

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	11,100	 	 	 	27,750	 	 	 	21,739	 	 	 	10,870	 	 	 	10,870	 
	ROBERT E. FORD

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	11,100	 	 	 	27,750	 	 	 	21,739	 	 	 	10,870	 	 	 	10,870	 
	ERIC WOLD

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	11,100	 	 	 	27,750	 	 	 	21,739	 	 	 	10,870	 	 	 	10,870	 
	CHRISTOPHER AGUILAR

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	11,100	 	 	 	27,750	 	 	 	21,739	 	 	 	10,870	 	 	 	10,870	 
	PETER A. BLACKWOOD

601 Montgomery Street, Suite 1800

San Francisco, CA 94111

Fax: (415) 248-5692
	 	$	11,100	 	 	 	27,750	 	 	 	21,739	 	 	 	10,870	 	 	 	10,870	 
	GENESIS MICROCAP INC.

483 Green Lanes

London N13 4BS, England

By: Lawrence S. Gibbons

Fax: 011-087-0127-5687
	 	$	111,006	 	 	 	277,515	 	 	 	217,391	 	 	 	108,696	 	 	 	108,696	 

(Funds Escrow Agreement)

14

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	GREEN SHOE
	 	 	 	 	 	 	 	 	 	 	COMMON STOCK	 	CLASS A WARRANT	 	WARRANT
	 	 	NOTE PRINCIPAL	 	CLASS B	 	COMPONENT OF	 	COMPONENT OF	 	COMPONENT OF
	 SUBSCRIBER
	 	AMOUNT
	 	WARRANTS
	 	PURCHASE PRICE
	 	PURCHASE PRICE
	 	PURCHASE PRICE

	JOHN V. WINFIELD

820 Moraga Drive

Los Angeles, CA 90049

Fax: (310) 889-2525
	 	$	832,550	 	 	 	2,081,375	 	 	 	1,630,435	 	 	 	815,218	 	 	 	815,218	 
	JOHN V. WINFIELD IRA-1

820 Moraga Drive

Los Angeles, CA 90049

Fax: (310) 889-2525
	 	$	555,033	 	 	 	1,387,583	 	 	 	1,086,957	 	 	 	543,479	 	 	 	543,479	 
	JOHN V. WINFIELD IRA-2

820 Moraga Drive

Los Angeles, CA 90049

Fax: (310) 889-2525
	 	$	277,516	 	 	 	693,790	 	 	 	543,478	 	 	 	271,739	 	 	 	271,739	 
	SANTA FE FINANCIAL CORP.

820 Moraga Drive

Los Angeles, CA 90049

Fax: (310) 889-2525
	 	$	277,516	 	 	 	693,790	 	 	 	543,478	 	 	 	271,739	 	 	 	271,739	 
	PORTSMOUTH SQUARE, INC.

820 Moraga Drive

Los Angeles, CA 90049

Fax: (310) 889-2525
	 	$	277,516	 	 	 	693,790	 	 	 	543,478	 	 	 	271,739	 	 	 	271,739	 
	INTERGROUP CORP.

820 Moraga Drive

Los Angeles, CA 90049

Fax: (310) 889-2525
	 	$	1,110,066	 	 	 	2,775,165	 	 	 	2,173,913	 	 	 	1,086,957	 	 	 	1,086,957	 
	ERIK FRANKLIN

534 Openaki Road

Denville, NJ 07834

Fax:
	 	$	27,751	 	 	 	69,378	 	 	 	54,348	 	 	 	27,174	 	 	 	27,174	 

(Funds Escrow Agreement)

15

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