AGREEMENT
AGREEMENT
This
Agreement (“Agreement”)
is
entered into this 29th day of March, 2005, by and between the parties identified
on the signature pages hereto (each an “Investor”
and
collectively “Investors”)
and
GOLDSPRING,
INC.,
a
Florida corporation (the “Company”).
R
E C I T A L S
1. WHEREAS,
the
parties hereto are also parties to that certain Subscription Agreement dated
as
of November 30, 2004 (the “Subscription
Agreement”)
whereby the Company issued and sold to the Investors up to $12.0 million
of
principal amount of promissory notes of the Company (“Convertible
Notes”)
initially convertible into shares of the Company’s common stock, $0.000666 par
value per share (the “Common
Stock”)
and
warrants to purchase shares of Common Stock; and
2. WHEREAS,
pursuant to Section 11.1(iv) of the Subscription Agreement, the Company was
required to file a registration statement by December 30, 2004 and to have
caused such registration statement to be declared effective by the Securities
and Exchange Commission (the “Commission”)
by
February 14, 2005; and
3. WHEREAS,
the
Company’s failure to file the registration statement within the time periods
prescribed in the Subscription Agreement has caused liquidated damages to
accrue
pursuant to Section 11.4 of the Subscription Agreement, as further calculated
and set forth on Exhibit
A
attached
hereto; and
4. WHEREAS,
pursuant to Section 12(b) of the Subscription Agreement, the consent of holders
of not less than 80% of the outstanding principal amount of Convertible Notes
is
required prior to the Company’s issuance of any equity security of the Company;
and
5. WHEREAS,
the
Investors set forth on the signature pages of this Agreement represent 100%
of
the outstanding principal amount of Convertible Notes; and
6. WHEREAS,
in
order to provide for certain payment and to avoid the expense, inconvenience,
and uncertainty of further dispute, the parties hereto desire resolve the
claims
and damages that have accrued pursuant to the Subscription Agreement, without
any admission of liability to any party hereto, on the terms and conditions
of
this Agreement.
AGREEMENT
NOW,
THEREFORE,
in
consideration for the mutual promises, various obligations, rights, and
covenants contained herein and for other consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally
bound,
the parties hereto agree as follows:
1. Incorporation
of Recitals.
The
recitals set forth above are true, accurate, and correct, and are incorporated
in this Agreement by this reference and made a material part of this
Agreement.
2. Payment.
In
consideration for various obligations, rights, and covenants contained herein
and other consideration, and without any admission of liability by any party
hereto, upon the Settlement Date of this Agreement, the Company shall issue
to
the Investors up to an aggregate of _______ restricted shares of Common Stock
(the “Shares”),
in
accordance with the names and amounts set forth on Exhibit
B
attached
hereto. For purposes of this Agreement, the “Settlement
Date”
shall
be the date whereby at least 80% of the outstanding principal amount of
Convertible Notes have approved and executed this Agreement; provided,
however,
that if
the Settlement Date does not occur by April 15, 2005, then this Agreement
shall
be null and void and of no further force or effect. The parties acknowledge
that
the Investors are granted the registration and other rights described in
Section
11 of the Subscription Agreement, except that the Filing Date and Effective
Date
of the registration rights related to the Shares shall be April 30, 2005
and
June 30, 2005, respectively.
3. Consent
and Waiver.
By
executing this Agreement, each Investor hereby (i) consents, pursuant to
Section
12(b) of the Subscription Agreement, to the issuance of the Shares pursuant
to
this Agreement; (ii) waives the application of Section 12(c) of the Subscription
Agreement with respect to the issuance of the Shares pursuant to this Agreement;
(iii) waives the application of Section 3.4 of the Common Stock Purchase
Warrant
dated November 30, 2004 held by such Investor with respect to the issuance
of
the Shares pursuant to this Agreement; and (iv) waives the application of
Section 3.4(b)(D) of the Convertible Note held by such Investor with respect
to
the issuance of the Shares pursuant to this Agreement. The parties acknowledge
that such consent and waiver applies to the issuance of Shares pursuant to
this
Agreement and shall not constitute an implied waiver of any other right,
power,
or privilege of the Investors.
4. Acknowledgement
and Release.
In
consideration of the mutual agreements contained herein, the parties to this
agreement acknowledge that the Shares are being issued in lieu of liquidated
damages that accrued pursuant to Section 11.4 of the Subscription Agreement
during the period commencing November 30, 2004 and continuing through and
including March 29, 2005, and each party fully, finally, and forever releases
from and discharges one another, and each of its officers, directors,
stockholders, employees, accountants, and agents, of and from any and all
claims, demands, obligations, actions, causes of action, damages, costs,
and
expenses of any nature whatsoever, which either party may now have in connection
with liquidated damages that accrued during such period.
5. Representations
and Warranties of Company
(a) Authority. Company
has the power and authority to enter into this Agreement and to carry out
the
transactions contemplated hereby. No other proceedings on the part of Company
are necessary to authorize the execution and delivery by Company of this
Agreement or the consummation by Company of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by, and constitutes
a legal, valid, and binding agreement of Company, enforceable against it
in
accordance with its terms, except that (i) such enforcement may be subject
to
bankruptcy, insolvency, reorganization, moratorium, or other similar laws
now or
hereafter in effect relating to creditors' rights, and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may
be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefore may be brought.
2
(b) No
Violation. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not violate or result in a breach by
Company of, or constitute a default under, or conflict with, or cause any
acceleration of any obligation with respect to, (i) any provision or restriction
of its articles of incorporation, bylaws, or any loan, indenture, or mortgage
of
Company, or (ii) any provision or restriction of any lien, lease agreement,
contract, instrument, order, judgment, award, decree, ordinance, or regulation
or any other restriction of any kind or character to which any assets or
properties of Company is subject or by which Company is bound.
(c) Accuracy
of Statements. Neither
this Agreement nor any statement, exhibit, certificate, or other information
furnished by Company to Investors in connection with this Agreement or any
of
the transactions contemplated hereby contains an untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained herein or therein, in light of circumstances in which they are
made,
not misleading.
6. Investor’s
Representations and Warranties. Each
Investor hereby represents and warrants to and agrees with Company only as
to
such Investor that:
(a) Information
on Company. Investor
has been furnished with or has had access via the XXXXX system maintained
by the
Commission to Company's Form 10-KSB for the year ended December 31, 2003
as
filed with the Commission, together with all subsequently filed Forms 10-QSB,
8-K, and filings made with the Commission available via the XXXXX system
(hereinafter referred to collectively as the “Reports”).
In
addition, the Investor has received in writing from Company such other
information concerning its operations, financial condition, and other matters
as
Investor has requested in writing (such other information is collectively,
the
“Other
Written Information”),
and
considered all factors Investor deems material in deciding on the advisability
of investing in the Shares.
(b) Information
on Investor. Investor
is an “accredited investor”, as such term is defined in Regulation D promulgated
by the Commission under the 1933 Act, is experienced in investments and business
matters, has made investments of a speculative nature and has purchased
securities of U.S. publicly owned companies in private placements in the
past
and, with its representatives, has such knowledge and experience in financial,
tax, and other business matters as to enable Investor to utilize the information
made available by Company to evaluate the merits and risks of and to make
an
informed investment decision with respect to the proposed purchase, which
represents a speculative investment. Investor has the authority and is duly
and
legally qualified to receive and own the Shares. Investor is able to bear
the
risk of such investment for an indefinite period and to afford a complete
loss
thereof. The information set forth on the signature page hereto regarding
Investor is accurate.
(c) Intent. As
of the Settlement Date, Investor shall accept the Shares for its own account
for
investment only and not with a view toward, or for resale in connection with,
the public sale or any distribution thereof.
3
(d) Compliance
with Securities Act. Investor
understands and agrees that the Shares have not been registered under the
Securities Act of 1933, as amended (the “1933
Act”)
Act or
any applicable state securities laws, by reason of their issuance in a
transaction that does not require registration under the 1933 Act (based
in part
on the accuracy of the representations and warranties of Investor contained
herein), and that the Shares must be held indefinitely unless a subsequent
disposition is registered under the 1933 Act or any applicable state securities
laws or is exempt from such registration.
(e) Shares
Legend. The
Shares shall bear the following or similar legend:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED
FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW
OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO GOLDSPRING, INC. THAT SUCH
REGISTRATION IS NOT REQUIRED.”
(f) Authority;
Enforceability.
This Agreement and other agreements delivered together with this Agreement
or in
connection herewith have been duly authorized, executed, and delivered by
Investor and are valid and binding agreements enforceable against Investor
in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights generally and to general principles
of equity; and Investor has full corporate power and authority necessary
to
enter into this Agreement and such other agreements and to perform its
obligations hereunder and under all other agreements entered into by Investor
relating hereto.
(g) Restricted
Securities. Investor
understands that the Shares have not been registered under the 1933 Act and
such
Investor will not sell, offer to sell, assign, pledge, hypothecate, or otherwise
transfer any of such securities unless pursuant to an effective registration
statement under the 1933 Act. Notwithstanding anything to the contrary contained
in this Agreement, such Investor may transfer (without restriction and without
the need for an opinion of counsel) the Shares to its Affiliates (as defined
below) provided that each such Affiliate is an “accredited investor” under
Regulation D and such Affiliate agrees to be bound by the terms and conditions
of this Agreement. For the purposes of this Agreement, an “Affiliate” of any
person or entity means any other person or entity directly or indirectly
controlling, controlled by or under direct or indirect common control with
such
person or entity. For purposes of this definition, “control” means the power to
direct the management and policies of such person or firm, directly or
indirectly, whether through the ownership of voting securities, by contract
or
otherwise.
(h) No
Governmental Review. Each
Investor understands that no U.S. federal or state agency or any other
governmental or state agency has passed on or made recommendations or
endorsement of the Shares or the suitability of the investment in the Shares
nor
have such authorities passed upon or endorsed the merits of the offering
of the
Shares.
4
(i) Correctness
of Representations. Each
Investor represents as to such Investor that the foregoing representations
and
warranties are true and correct as of the date hereof and, unless an Investor
otherwise notifies the Company prior to the Settlement Date shall be true
and
correct as of the Settlement Date.
7. Review
by Counsel.
By
executing this Agreement, the parties acknowledge that this Agreement has
been
freely and extensively negotiated and they have fully availed themselves
of the
opportunity to consult with counsel of their choice about the consequences
of
its terms and provisions. The parties acknowledge that they have read this
Agreement, that they fully understand it, that they agree to be bound by
its
terms and conditions. The parties further acknowledge that such parties are
not
relying on any representations or warranties of any of the other parties
or
their counsel in entering into this Agreement, except such representations
or
warranties as may be expressly set forth in this Agreement.
8. Binding
Effect. This
Agreement, and every part hereof, shall be effective only upon the Settlement
Date, and shall be binding upon and shall inure to the benefit of the parties
hereto, as well as to their respective successors-in-interest, heirs, executors,
administrators, and assigns.
9. Further
Assurances.
Each
party hereto agrees to take all actions and cooperate as necessary to and
further agrees to execute any documents that might be necessary to effect
the
transactions contemplated by this Agreement.
10. Entire
Agreement. This
writing (including the Recitals) and the exhibits represent the entire agreement
and understanding of the parties with respect to the subject matter hereof
and
supersedes all prior agreements and understandings of the parties respecting
the
same.
11. Attorneys’
Fees. In
the event of a violation of this Agreement or any portion thereof, the
prevailing party in any litigation arising therefrom shall be entitled to
recover all reasonable attorneys’ fees and costs.
12. Amendment;
Waiver. Neither
this Agreement nor any term hereof may be amended, waived, discharged, or
terminated, except by a written instrument signed by Company and holders
of not
less than 80% of the outstanding principal amount of Convertible Notes, and
any
such amendment, waiver, discharge, or termination shall be binding on all
the
Holders.
13. Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws
of the
state of New York without regard to principles of conflicts of laws. Any
action
brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts
of New
York or in the federal courts located in the state of New York. The parties
and
the individuals executing this Agreement and other agreements referred to
herein
or delivered in connection herewith on behalf of the Company agree to submit
to
the jurisdiction of such courts and waive trial by jury. In the event that
any
provision of this Agreement or any other agreement delivered in connection
herewith is invalid or unenforceable under any applicable statute or rule
of
law, then such provision shall be deemed inoperative to the extent that it
may
conflict therewith and shall be deemed modified to conform with such statute
or
rule of law. Any such provision which may prove invalid or unenforceable
under
any law shall not affect the validity or enforceability of any other provision
of any agreement.
5
14. Delays
or Omissions.
No
delay
or omission to exercise any right, power, or remedy accruing to any Investor,
upon any breach or default of Company under this Agreement, shall impair
any
such right, power, or remedy, nor shall it be construed to be a waiver of
any
such breach or default, or any acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring.
16.
Counterparts.
This
Agreement may be executed in counterparts, each of which shall be an original,
but all of which taken together shall constitute one Agreement..
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.
6
COMPANY:
GOLDSPRING,
INC., a Florida corporation
By:
_____________________________________
Xxxxxx
X.
Xxxxx, President
INVESTORS:
GAMMA
OPPORTUNITY CAPITAL PARTNERS, LP
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
LONGVIEW
FUND LP
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
LONGVIEW
EQUITY FUND, LP
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
LONGVIEW
INTERNATIONAL
EQUITY
FUND, LP
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
ALPHA
CAPITAL
AKTIENGESELLSCHAFT
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
7
CAPITAL
VENTURES INTERNATIONAL
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
PORTSIDE
GROWTH AND OPPORTUNITY FUND
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
ENABLE
GROWTH PARTNERS L.P.
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
WHALEHAVEN
FUNDS LIMITED
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
XXXXXXXXXXX
LIMITED PARTNERSHIP
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
SMITHFIELD
FIDUCIARY LLC
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
TCMP3
PARTNERS LLP
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
8
BRISTOL
INVESTMENT FUND, LTD.
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
VERTICAL
VENTURES, LLC
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
XXXXXXXX
CURHAN FORD CORPORATION
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
___________________________________
A. Xxx Xxxxxx
A. Xxx Xxxxxx
XXXXXXX
X. XXXXXX REV TST
DTD
7/20/96
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
___________________________________
Xxxxxx X. X’Xxxx, Xx.
Xxxxxx X. X’Xxxx, Xx.
___________________________________
D. Xxxxxxxx Xxxxxxxx
D. Xxxxxxxx Xxxxxxxx
___________________________________
Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
___________________________________
Xxxxx Xxxxx
Xxxxx Xxxxx
9
___________________________________
Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
___________________________________
Xxxx Xxxxxxxx
Xxxx Xxxxxxxx
___________________________________
Xxx X. Xxxxxxx
Xxx X. Xxxxxxx
___________________________________
Xxxx Xxxxxx
Xxxx Xxxxxx
___________________________________
Xxxxx Xxxx
Xxxxx Xxxx
___________________________________
Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
___________________________________
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
___________________________________
Xxxx Xxxxxxxx
Xxxx Xxxxxxxx
___________________________________
Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
___________________________________
Xxxx Xxxx
Xxxx Xxxx
___________________________________
Xxxxxxxxxxx Xxxxxxx
Xxxxxxxxxxx Xxxxxxx
10
___________________________________
Xxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxxxx
GENESIS
MICROCAP INC.
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
Xxxx
X.
Xxxxxxxx
XXXX
X.
XXXXXXXX XXX-1
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
XXXX
X.
XXXXXXXX XXX-2
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
SANTA
FE
FINANCIAL CORP.
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
PORTSMOUTH
SQUARE, INC.
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
INTERGROUP
CORP.
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
11
EXHIBIT
A
CALCULATION
OF LIQUIDATED DAMAGES
EXHIBIT
B
COMMON
STOCK TO BE ISSUED IN SETTLEMENT
