Names and Addresses of Lenders: Maximum Principal Amount of Notes:
EXECUTION
COPY
THIS SECURITY AGREEMENT (this
“Agreement”),
is made as of December 10, 2009, by and between GoldSpring, Inc., a
Nevada corporation, having an address at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (the “Obligor” or “Company”), and
parties set forth on Schedule
A hereto (each a “Secured Party” and
collectively, the “Secured Parties”).
(The Company and the Secured Parties may hereinafter be referred to singularly
as a “party,” and collectively as the “parties”).
WITNESSETH
WHEREAS, concurrently herewith
the Company is entering into a Loan Agreement with the Secured
Parties (the “Loan
Agreement”), pursuant to which the Secured Parties will loan the Company
an aggregate of $4,500,000 (collectively, the “Loan”) and, in
consideration therefor, the Company will issue to the Secured Parties, upon the
terms and conditions stated in the Loan Agreement: (a) convertible promissory
notes of an aggregate principal amount of $4,500,000 (each, a “Note” and,
collectively, the “Notes”); and (b)
warrants to purchase that number of shares of the Company’s Common
Stock equal to fifty (50%) percent of the principal dollar amount of the Notes
divided by $0.01 (“Warrants”);
and
WHEREAS, in order to further
induce the Secured Parties to make the Loan, the Company has agreed to execute
and deliver to the Secured Parties this Agreement for the benefit of the Secured
Parties and to grant to them a security interest in all of its assets (subject
only to security interests the Borrower has granted to (a) ▇▇▇▇▇▇▇▇▇ Trust (the
“▇▇▇▇▇▇▇▇▇
Interest”); (b) certain lenders (the “Additional Lenders”)
as of March 31, 2005, July 15, 2005, September 26, 2005, December 12, 2007, June
27, 2008, December 8, 2008, May 1, 2009 and May 13, 2009, as set forth on Schedule
B hereto (collectively, the “Additional Lenders’
Interests”), to secure the prompt payment, performance and discharge in
full of all of Company’s obligations under the Loan Agreement, the Notes and the
Warrants.
NOW, THEREFORE, in
consideration of the agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1. Certain
Definitions. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1. Terms used but
not otherwise defined in this Agreement that are defined in Article 9 of the UCC
(such as “general
intangibles” and “proceeds”) shall have
the respective meanings given such terms in Article 9 of the
UCC. Each capitalized term used herein, and not otherwise defined,
shall have the meaning ascribed thereto in the Loan Agreement.
(a) “Collateral” means the
collateral in which the Secured Parties are granted a security interest by this
Agreement (subject only to the ▇▇▇▇▇▇▇▇▇ Interest and Additional Lenders’
Interests) and which shall include the following, whether presently owned or
existing or hereafter acquired or coming into existence, and all additions and
accessions thereto and all substitutions and replacements thereof, and all
proceeds, products and accounts thereof, including, without limitation, all
proceeds from the sale or transfer of the Collateral and of insurance covering
the same and of any tort claims in connection therewith:
(i) All
Goods of the Obligor, including, without limitations, all machinery, equipment,
computers, motor vehicles, trucks, tanks, boats, ships, appliances, furniture,
special and general tools, fixtures, test and quality control devices and other
equipment of every kind and nature and wherever situated, together with all
documents of title and documents representing the same, all additions and
accessions thereto, replacements therefor, all parts therefor, and all
substitutes for any of the foregoing and all other items used and useful in
connection with the Obligor’s businesses and all improvements thereto
(collectively, the “Equipment”);
and
(ii) All
Inventory of the Obligor; and
(iii) All
of the Obligor’s contract rights and general intangibles, including, without
limitation, all partnership interests, stock or other securities, licenses,
distribution and other agreements, computer software development rights, leases,
franchises, customer lists, quality control procedures, grants and rights,
goodwill, trademarks, service marks, trade styles, trade names, patents, patent
applications, copyrights, deposit accounts, and income tax refunds
(collectively, the “General
Intangibles”); and
(iv) All
Receivables of the Obligor including all insurance proceeds, and rights to
refunds or indemnification whatsoever owing, together with all instruments, all
documents of title representing any of the foregoing, all rights in any
merchandising, goods, equipment, motor vehicles and trucks which any of the same
may represent, and all right, title, security and guaranties with respect to
each Receivable, including any right of stoppage in transit; and
(v)
All of
the Obligor’s documents, instruments and chattel paper, files, records, books of
account, business papers, computer programs and the products and proceeds of all
of the foregoing Collateral set forth in clauses (i)-(iv) above.
(b) “Obligations” means
all of the Obligor’s obligations under this Agreement, the Loan Agreement, the
Notes and the Warrants, in each case, whether now or hereafter existing,
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or unliquidated, whether or not jointly owed with others, and whether or not
from time to time decreased or extinguished and later decreased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from the Secured Parties as a preference, fraudulent
transfer or otherwise as such obligations may be amended, supplemented,
converted, extended or modified from time to time.
(c) “UCC” means the
Uniform Commercial Code, as currently in effect in the State of New
York.
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2. Grant of
Security Interest. As an inducement for the Secured Parties to
make the Loan and to secure the complete and timely payment, performance and
discharge in full, as the case may be, of all of the Obligations, except for
Permitted Liens (as hereinafter defined), the Obligor hereby, unconditionally
and irrevocably, pledges, grants and hypothecates to the Secured Parties, a
continuing security interest (subject only to the ▇▇▇▇▇▇▇▇▇ Interest and
Additional Lenders’ Interests) in, a continuing lien upon, an unqualified right
to possession and disposition of and a right of set-off against, in each case to
the fullest extent permitted by law, all of the Obligor’s right, title and
interest of whatsoever kind and nature in and to the Collateral (the “Security
Interest”).
3. Representations,
Warranties, Covenants and Agreements of the Obligor. The
Obligor represents and warrants to, and covenants and agrees with, the Secured
Parties as follows:
(a) The
Obligor has the requisite corporate power and authority to enter into this
Agreement and otherwise to carry out its obligations hereunder. The
execution, delivery and performance by the Obligor of this Agreement and the
filings contemplated herein have been duly authorized by all necessary action on
the part of the Obligor and no further action is required by the
Obligor. This Agreement constitutes a legal, valid and binding
obligation of the Obligor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditor’s rights
generally.
(b) The
Obligor represents and warrants that it has no place of business or offices
where its respective books of account and records are kept (other than
temporarily at the offices of its attorneys or accountants), except as set forth
on Schedule
C attached hereto;
(c) Except
as to those liens existing as of the date hereof that were disclosed to the
Secured Parties by the Obligor and are set forth on the attached Schedule
D (the “Permitted Liens”),
the Obligor is the sole owner of the Collateral (except for non-exclusive
licenses granted by the Obligor in the ordinary course of business), free and
clear of any liens, security interests, encumbrances, rights or claims, and is
fully authorized to grant the Security Interest in and to pledge the
Collateral. Except as to the Permitted Liens, there is not on file in
any governmental or regulatory authority, agency or recording office an
effective financing statement, security agreement, license or transfer or any
notice of any of the foregoing (other than those that have been filed in favor
of the Secured Parties pursuant to this Agreement) covering or affecting any of
the Collateral. Except as to the Permitted Liens, so long as this
Agreement shall be in effect, the Obligor shall not execute and shall not
knowingly permit to be on file in any such office or agency any such financing
statement or other document or instrument (except to the extent filed or
recorded in favor of the Secured Parties pursuant to the terms of this
Agreement).
(d) No
part of the Collateral has been judged invalid or unenforceable. No
written claim has been received that any Collateral or the Obligor’s use of any
Collateral violates the rights of any third party. There has been no adverse
decision to the Obligor’s claim of ownership rights in or exclusive rights to
use the Collateral in any jurisdiction or to the Obligor's right to keep and
maintain such Collateral in full force and effect, and there is no proceeding
involving said rights pending or, to the best knowledge of the Obligor,
threatened before any court, judicial body, administrative or regulatory agency,
arbitrator or other governmental authority.
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(e) The
Obligor shall at all times maintain its books of account and records relating to
the Collateral at its principal place of business and may not relocate such
books of account and records unless it delivers to the Secured Parties at least
30 days prior to such relocation (i) written notice of such relocation and the
new location thereof (which must be within the United States) and
(ii) evidence that appropriate financing statements and other necessary
documents have been filed and recorded and other steps have been taken to
perfect the Security Interest to create in favor of the Secured Parties a valid,
perfected and continuing lien in the Collateral.
(f) This
Agreement creates in favor of the Secured Parties a valid security interest
(subject only to the ▇▇▇▇▇▇▇▇▇ Interest and Additional Lenders’ Interests) in
the Collateral securing the payment and performance of the Obligations and, upon
making the filings described in the immediately following sentence, a perfected
security interest in such Collateral (subject only to the ▇▇▇▇▇▇▇▇▇ Interest and
Additional Lenders’ Interests). Except for the filing of financing
statements on Form-1 under the UCC with the jurisdictions indicated on Schedule
E, attached hereto, no authorization or approval of or filing with or
notice to any governmental authority or regulatory body is required either (i)
for the grant by the Obligor of, or the effectiveness of, the Security Interest
granted hereby or for the execution, delivery and performance of this Agreement
by the Obligor or (ii) for the perfection of or exercise by the Secured Parties
of its rights and remedies hereunder.
(g) The
Obligor hereby irrevocably authorizes the Secured Parties at any time and from
time to time to file in any Uniform Commercial Code jurisdiction any initial
financing statements and amendments thereto that (a) indicate the Collateral
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the Uniform Commercial Code of the State of New
York as amended from time to time (“NYUCC”), or any other
Uniform Commercial Code jurisdiction; and (b) contain any other information
required by part 5 of Article 9 of the NYUCC for the sufficiency or filing
office acceptance of any financing statement or amendment, including whether the
Obligor is an organization, the type of organization and any organization
identification number issued to the Obligor. The Obligor agrees to furnish any
such information to the Secured Parties promptly upon request. The
Obligor also ratifies its authorization for the Secured Parties to have filed in
any Uniform Commercial Code jurisdiction any like initial financing statements
or amendments thereto if filed prior to the date hereof with respect to the
Collateral.
(h) The
execution, delivery and performance of this Agreement does not conflict with or
cause a breach or default, or an event that with or without the passage of time
or notice, shall constitute a breach or default, under any agreement to which
the Obligor is a party or by the Obligor is bound. No consent
(including, without limitation, from stockholders or creditors of the Obligor)
is required for the Obligor to enter into and perform its obligations
hereunder.
(i) The
Obligor shall at all times maintain the liens and Security Interest provided for
hereunder as valid and perfected liens and security interests in the Collateral
in favor of the Secured Parties until this Agreement and the Security Interest
hereunder shall be terminated pursuant to Section 11. The Obligor
hereby agrees to defend the same against any and all persons. The
Obligor shall safeguard and protect all Collateral for the account of the
Secured Parties. At the request of the Secured Parties, the Obligor
will pay the cost of filing one or more financing statements pursuant to the UCC
(or any other applicable statute) in form reasonably satisfactory to the Secured
Parties in all public offices wherever filing is, or is deemed by the Secured
Parties to be, necessary or desirable to effect the rights and obligations
provided for herein. Without limiting the generality of the foregoing, the
Obligor shall pay all fees, taxes and other amounts necessary to maintain the
Collateral and the Security Interest hereunder, and the Obligor shall obtain and
furnish to the Secured Parties from time to time, upon demand, such releases
and/or subordinations of claims and liens which may be required to maintain the
priority of the Security Interest hereunder.
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(j) The
Obligor will not transfer, pledge, hypothecate, encumber, license (except for
non-exclusive licenses granted by the Obligor in the ordinary course of
business), sell (except for sales of inventory in the ordinary course of
business) or otherwise dispose of any of the Collateral without the prior
written consent of the Secured Parties.
(k) The
Obligor shall keep and preserve its Equipment, Inventory and other tangible
Collateral in good condition, repair and order and shall not operate or locate
any such Collateral (or cause to be operated or located) in any area excluded
from insurance coverage.
(l) The
Obligor shall, within ten (10) days of obtaining knowledge thereof, advise the
Secured Parties promptly, in sufficient detail, of any substantial change in the
Collateral, and of the occurrence of any event which would have a material
adverse effect on the value of the Collateral or on the Secured Parties’
security interest therein.
(m) The
Obligor shall promptly execute and deliver to the Secured Parties such further
deeds, mortgages, assignments, security agreements, financing statements or
other instruments, documents, certificates and assurances and take such further
action as the Secured Parties may from time to time request and may in its sole
discretion deem necessary to perfect, protect or enforce its security interest
in the Collateral.
(n) The
Obligor shall permit the Secured Parties and their representatives and agents to
inspect the Collateral at any time, and to make copies of records pertaining to
the Collateral as may be requested by the Secured Parties from time to
time.
(o) The
Obligor will take all steps reasonably necessary to diligently pursue and seek
to preserve, enforce and collect any rights, claims, causes of action and
accounts receivable in respect of the Collateral.
(p) The
Obligor shall promptly notify the Secured Parties in sufficient detail upon
becoming aware of any attachment, garnishment, execution or other legal process
levied against any Collateral and of any other information received by the
Obligor that may materially affect the value of the Collateral, the Security
Interest or the rights and remedies of the Secured Parties
hereunder.
(q) All
information heretofore, herein or hereafter supplied to the Secured Parties by
or on behalf of the Obligor with respect to the Collateral is accurate and
complete in all material respects as of the date furnished.
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4. Defaults. The following
events shall be “Events of
Default”:
(a) A
breach by the Obligor of its material obligations under the Loan Agreement,
Notes or Warrants, and failure to cure such breach for ten (10) days after
receipt by the Obligor of notice of such breach from the Secured
Parties;
(b) Any
representation or warranty of the Obligor in this Agreement shall prove to have
been incorrect in any material respect when made; and
(c) The
material failure by the Obligor to observe or perform any of its material
obligations hereunder for ten (10) days after receipt by the Obligor of notice
of such failure from the Secured Parties.
5. Duty To
Hold In Trust. Upon the
occurrence of any Event of Default and at any time thereafter, the Obligor
shall, upon receipt by it of any revenue, income or other sums subject to the
Security Interest, whether payable pursuant to the Loan Agreement, the Note, or
otherwise, or of any check, draft, debenture, trade acceptance or other
instrument evidencing an obligation to pay any such sum, hold the same in trust
for the Secured Parties and shall forthwith endorse and transfer any such sums
or instruments, or both, to the Secured Parties for application to the
satisfaction of the Obligations.
6. Rights
and Remedies Upon Default. Upon occurrence of any Event of
Default and at any time thereafter, the Secured Parties shall have the right to
exercise all of the remedies conferred hereunder and under the Loan Agreement,
and the Secured Parties shall have all the rights and remedies of a secured
party under the UCC and/or any other applicable law (including the Uniform
Commercial Code of any jurisdiction in which any Collateral is then
located). Subject only to the ▇▇▇▇▇▇▇▇▇ Interest and Additional
Lenders’ Interests, the Secured Parties shall have the following rights and
powers:
(a) The
Secured Parties shall have the right to take possession of the Collateral and,
for that purpose, enter, with the aid and assistance of any person, any premises
where the Collateral, or any part thereof, is or may be placed and remove the
same, and the Obligor shall assemble the Collateral and make it available to the
Secured Parties at places which the Secured Parties shall reasonably select,
whether at the Obligor's premises or elsewhere, and make available to the
Secured Parties, without rent, all of the Obligor’s respective premises and
facilities for the purpose of the Secured Parties taking possession of, removing
or putting the Collateral in saleable or disposable form.
(b) The
Secured Parties shall have the right to operate the business of the Obligor
using the Collateral and shall have the right to assign, sell, lease or
otherwise dispose of and deliver all or any part of the Collateral, at public or
private sale or otherwise, either with or without special conditions or
stipulations, for cash or on credit or for future delivery, in such parcel or
parcels and at such time or times and at such place or places, and upon such
terms and conditions as the Secured Parties may deem commercially reasonable,
all without (except as shall be required by applicable statute and cannot be
waived) advertisement or demand upon or notice to the Obligor or right of
redemption of the Obligor, which are hereby expressly waived. Upon
each such sale, lease, assignment or other transfer of Collateral, the Secured
Parties may, unless prohibited by applicable law which cannot be waived,
purchase all or any part of the Collateral being sold, free from and discharged
of all trusts, claims, right of redemption and equities of the Obligor, which
are hereby waived and released.
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7. Applications
of Proceeds.
(a) Subject
only to the ▇▇▇▇▇▇▇▇▇ Interest and Additional Lenders’ Interests, the proceeds
of any such sale, lease or other disposition of the Collateral hereunder shall
be applied first, to the expenses of retaking, holding, storing, processing and
preparing for sale, selling, and the like (including, without limitation, any
taxes, fees and other costs incurred in connection therewith) of the Collateral,
to the reasonable attorneys' fees and expenses incurred by the Secured Parties
in enforcing its rights hereunder and in connection with collecting, storing and
disposing of the Collateral, and then to satisfaction of the Obligations, and to
the payment of any other amounts required by applicable law, after which the
Secured Parties shall pay to the Obligor any surplus proceeds. If,
upon the sale, license or other disposition of the Collateral, the proceeds
thereof are insufficient to pay all amounts to which the Secured Parties are
legally entitled, the Obligor will be liable for the deficiency, together with
interest thereon, at the rate of 18% per annum (the “Default Rate”), and
the reasonable fees of any attorneys employed by the Secured Parties to collect
such deficiency. To the extent permitted by applicable law, the
Obligor waives all claims, damages and demands against the Secured Parties
arising out of the repossession, removal, retention or sale of the Collateral,
unless due to the gross negligence or willful misconduct of the Secured
Parties.
(b) All
ordinary costs and expenses incurred by the Secured Parties in collection of the
Obligations shall be borne exclusively by the Obligor including, without
limitation, any costs, expenses, fees or disbursements incurred by outside
agencies or attorneys retained by the Secured Parties to effect collections of
the Obligations or any Collateral securing the Obligations. The
provisions of this paragraph shall not apply to any suits, actions, proceedings
or claims of the nature referred to herein or otherwise which are based upon or
related to the repayment of, or the taking of security for, any loans and/or
advances made by any Secured Parties to the Company that do not arise under the
Loan Agreement or that are not participated in by the Secured Parties, and the
party making such loans and/or advances shall be exclusively responsible for
such suits, actions, proceedings or claims and the payment of all such expenses
in connection therewith.
8. Costs and
Expenses. The
Obligor agrees to pay all reasonable out-of-pocket fees, costs and expenses
incurred in connection with any filing required hereunder, including without
limitation, any financing statements, continuation statements, partial releases
and/or termination statements related thereto or any expenses of any searches
reasonably required by the Secured Parties. The Obligor shall also
pay all other claims and charges which in the reasonable opinion of the Secured
Parties might prejudice, imperil or otherwise affect the Collateral or the
Security Interest therein. The Obligor will also, upon demand, pay to
the Secured Parties the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the Secured Parties may incur in connection with (i) the enforcement of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, or (iii) the exercise or
enforcement of any of the rights of the Secured Parties under the Loan
Agreement. Until so paid, any fees payable hereunder shall be added
to the principal amount of the Note and shall bear interest at the Default
Rate.
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9. Responsibility
for Collateral. The Obligor assumes all liabilities and
responsibility in connection with all Collateral, and the obligations of the
Obligor hereunder or under the Loan Agreement shall in no way be affected or
diminished by reason of the loss, destruction, damage or theft of any of the
Collateral or its unavailability for any reason.
10. Security
Interest Absolute. All rights of the Secured Parties and all
Obligations of the Obligor hereunder, shall be absolute and unconditional
(subject only to the ▇▇▇▇▇▇▇▇▇ Interest and Additional Lenders’ Interests),
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Loan Agreement, or any agreement entered into in connection with the
foregoing, or any portion hereof or thereof; (b) any change in the time, manner
or place of payment or performance of, or in any other term of, all or any of
the Obligations, or any other amendment or waiver of or any consent to any
departure from the Loan Agreement, or any other agreement entered into in
connection with the foregoing; (c) any exchange, release or nonperfection of any
of the Collateral, or any release or amendment or waiver of or consent to
departure from any other collateral for, or any guaranty, or any other security,
for all or any of the Obligations; (d) any action by the Secured Parties to
obtain, adjust, settle and cancel in its sole discretion any insurance claims or
matters made or arising in connection with the Collateral; or (e) any other
circumstance which might otherwise constitute any legal or equitable defense
available to the Obligor, or a discharge of all or any part of the Security
Interest granted hereby. Until the Obligations shall have been paid
and performed in full, the rights of the Secured Parties shall continue even if
the Obligations are barred for any reason, including, without limitation, the
running of the statute of limitations or bankruptcy. The Obligor
expressly waives presentment, protest, notice of protest, demand, notice of
nonpayment and demand for performance. In the event that at any time any
transfer of any Collateral or any payment received by the Secured Parties
hereunder shall be deemed by final order of a court of competent jurisdiction to
have been a voidable preference or fraudulent conveyance under the bankruptcy or
insolvency laws of the United States, or shall be deemed to be otherwise due to
any party other than the Secured Parties, then, in any such event, the Obligor’s
obligations hereunder shall survive cancellation of this Agreement, and shall
not be discharged or satisfied by any prior payment thereof and/or cancellation
of this Agreement, but shall remain a valid and binding obligation enforceable
in accordance with the terms and provisions hereof. The Obligor
waives all right to require the Secured Parties to proceed against any other
person or to apply any Collateral which the Secured Parties may hold at any
time, or to marshal assets, or to pursue any other remedy. The
Obligor waives any defense arising by reason of the application of the statute
of limitations to any obligation secured hereby.
11. Term of
Agreement. This Agreement and the Security Interest shall
terminate on the repayment of all amounts due the Secured Parties under the Loan
Agreement and the Notes. Upon such termination, the Secured Parties,
at the request and at the expense of the Obligor, will join in executing any
termination statement with respect to any financing statement executed and filed
pursuant to this Agreement.
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12. Power of
Attorney; Further Assurances.
(a) The
Obligor authorizes the Secured Parties, and does hereby make, constitute and
appoint the Secured Parties, and the Secured Parties’ respective officers,
agents, successors or assigns with full power of substitution, as the Obligor’s
true and lawful attorney-in-fact, with power, in its own name or in the name of
the Obligor, to, after the occurrence and during the continuance of an Event of
Default, (i) endorse any debentures, checks, drafts, money orders, or other
instruments of payment (including payments payable under or in respect of any
policy of insurance) in respect of the Collateral that may come into possession
of the Secured Parties; (ii) to sign and endorse any UCC financing statement or
any invoice, freight or express ▇▇▇▇, ▇▇▇▇ of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications and notices in
connection with accounts, and other documents relating to the Collateral; (iii)
to pay or discharge taxes, liens, security interests or other encumbrances at
any time levied or placed on or threatened against the Collateral; (iv) to
demand, collect, receipt for, compromise, settle and ▇▇▇ for monies due in
respect of the Collateral; and (v) generally, to do, at the option of the
Secured Parties, and at the Obligor’s expense, at any time, or from time to
time, all acts and things which the Secured Parties deem necessary to protect,
preserve and realize upon the Collateral and the Security Interest granted
therein in order to effect the intent of this Agreement and the Loan Agreement,
all as fully and effectually as the Obligor might or could do; and the Obligor
hereby ratifies all that said attorney shall lawfully do or cause to be done by
virtue hereof. This power of attorney is coupled with an interest and
shall be irrevocable for the term of this Agreement and thereafter as long as
any of the Obligations shall be outstanding.
(b) On
a continuing basis, the Obligor will make, execute, acknowledge, deliver, file
and record, as the case may be, in the proper filing and recording places in any
jurisdiction, including, without limitation, the jurisdictions indicated on
Schedule
D, attached hereto, all such instruments, and take all such action as may
reasonably be deemed necessary or advisable, or as reasonably requested by the
Secured Parties, to perfect the Security Interest granted hereunder and
otherwise to carry out the intent and purposes of this Agreement, or for
assuring and confirming to the Secured Parties the grant or perfection of a
security interest in all the Collateral.
(c) The
Obligor hereby irrevocably appoints the Secured Parties as the Obligor’s
attorney-in-fact, with full authority in the place and stead of the Obligor and
in the name of the Obligor, from time to time at the discretion of the Secured
Parties, to take any action and to execute any instrument which the Secured
Parties may deem necessary or advisable to accomplish the purposes of this
Agreement, including the filing, in its sole discretion, of one or more
financing or continuation statements and amendments thereto, relative to any of
the Collateral without the signature of the Obligor where permitted by
law.
13. Notices. All
notices, requests, demands and other communications hereunder shall be in
writing, with copies to all the other parties hereto, and shall be deemed to
have been duly given when (i) if delivered by hand, upon receipt, (ii) if sent
by facsimile, upon receipt of proof of sending thereof, (iii) if sent by
nationally recognized overnight delivery service (receipt requested), the next
business day or (iv) if mailed by first-class registered or certified mail,
return receipt requested, postage prepaid, four days after posting in the U.S.
mails, in each case if delivered to the following addresses:
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If to the
Obligor: to the address first set forth in the Preambles to this
Agreement.
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With
copies to:
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Jolie
▇. ▇▇▇▇, Esq.
|
|
▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
|
|
|
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
|
|
Phone:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
If to the
Secured Parties: to the address set forth immediately below the Secured Parties’
name on Schedule
A to the Loan Agreement.
|
With
copies to:
|
Blank
Rome LLP
|
|
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇.
|
|
|
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
|
|
Phone:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
Attn.:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
|
14. Other
Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Parties shall have the right, in their sole discretion, to
pursue, relinquish, subordinate, modify or take any other action with respect
thereto, without in any way modifying or affecting any of the Secured Parties’
rights and remedies hereunder.
15. Miscellaneous.
(a) No
course of dealing between the Obligor and the Secured Parties, nor any failure
to exercise, nor any delay in exercising, on the part of the Secured Parties,
any right, power or privilege hereunder or under the Loan Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege.
(b) All
of the rights and remedies of the Secured Parties with respect to the
Collateral, whether established hereby or by the Loan Agreement or by any other
agreements, instruments or documents or by law shall be cumulative and may be
exercised singly or concurrently.
(c) This
Agreement constitutes the entire agreement of the parties with respect to the
subject matter hereof and is intended to supersede all prior negotiations,
understandings and agreements with respect thereto. Except as
specifically set forth in this Agreement, no provision of this Agreement may be
modified or amended except by a written agreement specifically referring to this
Agreement and signed by the parties hereto.
10
(d) In
the event that any provision of this Agreement is held to be invalid, prohibited
or unenforceable in any jurisdiction for any reason, unless such provision is
narrowed by judicial construction, this Agreement shall, as to such
jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of
this Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other
jurisdiction.
(e) No
waiver of any breach or default or any right under this Agreement shall be
considered valid unless in writing and signed by the party giving such waiver,
and no such waiver shall be deemed a waiver of any subsequent breach or default
or right, whether of the same or similar nature or otherwise.
(f) This
Agreement shall be binding upon and inure to the benefit of each party hereto
and its successors and assigns.
(g) Each
party shall take such further action and execute and deliver such further
documents as may be necessary or appropriate in order to carry out the
provisions and purposes of this Agreement.
(h) This
Agreement shall be construed in accordance with the laws of the State of New
York, except to the extent the validity, perfection or enforcement of a security
interest hereunder in respect of any particular Collateral which are governed by
a jurisdiction other than the State of New York in which case such law shall
govern. Each of the parties hereto irrevocably submit to the
exclusive jurisdiction of any New York State or United States federal court
sitting in New York county over any action or proceeding arising out of or
relating to this Agreement, and the parties hereto hereby irrevocably agree that
all claims in respect of such action or proceeding may be heard and determined
in such New York State or Federal court. The parties hereto agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. The parties hereto further waive any
objection to venue in the State of New York and any objection to an action or
proceeding in the State of New York on the basis of forum non
conveniens.
(i) EACH
PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRAIL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO
THE SUBJECT MATER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS
A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH PARTY HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND
THAT EACH PARTY WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE
DEALINGS. EACH PARTY FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY
WAIVED ITS RIGHTS TO A JURY TRIAL FOLLOWING SUCH CONSULTATION. THIS
WAIVER IS IRREVOCABLE, MEANING THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS AND SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF A LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
11
(j) This
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.
[THE
REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]
12
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed on the day and
year first above written.
OBLIGOR:
GOLDSPRING,
INC.
|
By:
|
|
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
|
|
Title:
President
|
|
SECURED
PARTIES:
|
THE INTERGROUP CORPORATION
|
SANTA FE FINANCIAL CORP.
|
|||
|
By:
|
By:
|
|||
|
Name:
|
Name:
|
|||
|
Title:
|
Title:
|
|||
|
PORTSMOUTH SQUARE, INC.
|
||||
|
By:
|
||||
|
Name:
|
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
|||
|
Title:
|
||||
|
JAG MULTI INVESTMENTS LLC
|
||||
|
|
By:
|
|||
|
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
Name:
|
|||
|
Title:
|
||||
|
▇▇▇▇▇ BROTHERS ▇▇
|
▇▇▇▇▇ COUSINS LLC
|
|||
|
By:
|
By:
|
|||
|
Name:
|
Name:
|
|||
|
Title:
|
|
Title:
|
||
13
SCHEDULE
A
The
Lenders
|
Names and Addresses of Lenders:
|
Maximum
Principal
Amount of Notes:
|
|||
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
|
$ | 750,000 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
||||
|
The
InterGroup Corporation
|
$ | 300,000 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
||||
|
Portsmouth
Square, Inc.
|
$ | 300,000 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
||||
|
Santa
Fe Financial Corp.
|
$ | 150,000 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
||||
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
$ | 1,500,000 | ||
|
_____________________
|
||||
|
_____________________
|
||||
|
Fax:
|
||||
|
JAG
Multi Investments LLC
|
$ | 500,000 | ||
|
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
|
||||
|
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
||||
|
Fax:
|
||||
|
▇▇▇▇▇
Brothers LP
|
$ | 500,00 | ||
|
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Fax:
|
||||
|
▇▇▇▇▇
Cousins LLC
|
$ | 500,000 | ||
|
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Fax:
|
||||
|
TOTAL:
|
$ | 4,500,000 | ||
14
SCHEDULE
B
The Additional
Lenders
(as of December __,
2009)
|
Name and Address
|
Amount of Principal
Indebtedness Remaining
|
|||
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
|
$ | 3,552,152 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ ▇▇▇-1
|
$ | 1,147,152 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Attn.:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
||||
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ ▇▇▇-2
|
$ | 573,765 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Attn.:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
||||
|
Santa
Fe Financial Corp.
|
$ | 1,369,231 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Attn.:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
||||
|
Portsmouth
Square, Inc.
|
$ | 2,617,733 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Attn.:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
||||
|
The
InterGroup Corporation
|
$ | 4,109,575 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Attn.:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
||||
|
Longview
Fund, L.P.
|
$ | 3,722,791 | ||
|
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Attn.:
|
||||
|
Grenville
Finance Ltd.
|
$ | 950,000 | ||
|
c/o
LH Financial Services Corp.
|
||||
|
150
CPS, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Attn.:
|
||||
|
TOTAL:
|
$ | 18,042,777 | ||
15
SCHEDULE
C
Offices
American
▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
16
SCHEDULE
D
Permitted
Liens
|
Name and Address
|
Amount of Principal
Indebtedness Remaining
|
|||
|
▇▇▇▇▇▇▇▇▇
Trust
|
$ | 250,000 | ||
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
|
$ | 2,864,224 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ ▇▇▇-1
|
$ | 1,147,152 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Attn.:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
||||
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ ▇▇▇-2
|
$ | 573,765 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Attn.:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
||||
|
Santa
Fe Financial Corp.
|
$ | 1,079,231 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Attn.:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
||||
|
Portsmouth
Square, Inc.
|
$ | 2,177,733 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Attn.:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
||||
|
The
InterGroup Corporation
|
$ | 3,389,575 | ||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Attn.:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
||||
|
Longview
Fund, L.P.
|
$ | 550,000 | ||
|
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Attn.:
|
||||
|
Grenville
Finance Ltd.
|
$ | 950,000 | ||
|
c/o
LH Financial Services Corp.
|
||||
|
150
CPS, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||||
|
Attn.:
|
||||
|
TOTAL:
|
$ | 12,982,058 | ||
17
SCHEDULE
E
Jurisdictions
Nevada
18