BORROWER SECURITY AGREEMENT
THIS
BORROWER SECURITY AGREEMENT
(this
"Agreement"),
is
made as of June __, 2006, by and between Plum Mine Special Purpose, LLC, a
Nevada limited liability company, (the "Company"),
and
the secured parties identified on Schedule
A
hereto
and their respective assigns (each, a secured party and collectively, the
“Secured Parties”) and Xxxx Xxxxxxxx , an individual (the “Collateral
Agent”)
as
collateral agent for the Secured Parties (the Company and the Secured Party
may
hereinafter be referred to singularly as a "party,'
and
collectively as the "parties.").
WITNESSETH:
WHEREAS,
concurrently herewith the Company and its Parent, Goldspring, Inc., are entering
into a loan agreement with the Secured Parties and Collateral Agent (the
"Loan
Agreement"),
pursuant to which the Secured Parties are lending to the Company an aggregate
of
Two Million two Hundred Thousand ($2,200,000) Dollars (the "Loan"),
and
Winfield has agreed to acquire the Existing Mortgage (as defined in the Loan
Agreement) and in consideration therefore the Company is issuing, one or more
Notes (as defined in the Loan Agreement); and
WHEREAS,
in order
to induce the Secured Party 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 first priority security interest in all of its
assets to secure the prompt payment, performance and discharge in full of all
of
Company’s obligations under the Loan Agreement and the Notes.
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 Party is granted a security interest by
this
Agreement 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 Company, 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, minerals, natural
resources and metals, 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 Company’s businesses and
all improvements thereto (collectively, the "Equipment");
and
(ii) All
Inventory of the Company; and
(iii) All
of
the Company’s contract rights and general intangibles, including, without
limitation, all mining rights, 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, and all other intellectual property,
all accounts deposit accounts, employee non-compete agreements, non-disclosure
and assignment of rights agreements, and income tax refunds (collectively,
the
"General
Intangibles");
and
(iv) All
Receivables of the Company 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, all tax refunds and all right, title, security and guaranties
with respect to each Receivable, including any right of stoppage in transit;
and
(v) All
of
the Company’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 Company’s obligations under this Agreement, the Loan Agreement and
the Note, 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 Party 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 Nevada;
provided, however, that in the event that, by reason of mandatory provisions
of
law, any or all of the attachment , perfection or priority of the Secured
Parties’ security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of Nevada,
the term “UCC” shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such attachment,
perfection of priority and for purposes of definitions related to such
provisions.
2. Grant
of Security Interest.
As an
inducement for the Secured Parties to make the Loans and purchase the Notes
and
warrants and to secure the complete and timely payment, performance and
discharge in full, as the case may be, of all of the Obligations, the Company
hereby, unconditionally and irrevocably, pledges, grants and hypothecates to
the
Secured Parties, a senior continuing security interest in, a continuing first
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
Company'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 Company.
The
Company represents and warrants to, and covenants and agrees with, the Secured
Party as follows:
(a) The
Company has the requisite corporate power and authority to enter into this
Agreement and otherwise carry out its obligations hereunder. The execution,
delivery and performance by the Company of this Agreement and the filings
contemplated herein have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company. This
Agreement constitutes a legal, valid and binding obligation of the Company
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
Company 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
B
attached
hereto;
(c) Except
as
to those liens existing as of the date hereof that were disclosed to the Secured
Party by the Company and are set forth on the attached Schedule
C,
if any
(the “Permitted
Liens”),
the
Company is the sole owner of the Collateral (except for non-exclusive licenses
granted by the Company 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.
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 Party pursuant to this Agreement) covering or affecting
any
of the Collateral. So long as this Agreement shall be in effect, without the
prior consent of the Collateral Agent, which consent shall not be unreasonably
withheld, the Company 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 Collateral
Agent on behalf of the Secured Parties pursuant to the terms of this
Agreement).
(d) No
part
of the Collateral or rights in connection therewith, has been judged invalid
or
unenforceable. No written claim has been received that any Collateral or the
Company’s use of any Collateral violates the rights of any third party. There
has been no adverse decision to the Company’s claim of ownership rights in or
exclusive rights to use the Collateral in any jurisdiction or to the Company'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
Company, threatened before any court, judicial body, administrative or
regulatory agency, arbitrator or other governmental authority.
(e) The
Company shall at all times maintain its books of account and records relating
to
the Collateral at its principal place of business and its Collateral at the
locations set forth on Schedule
B
attached
hereto may not relocate such books of account and records unless it delivers
to
the Secured Parties (or to Collateral agent on their behalf) 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, senior, perfected
and continuing first priority liens in the Collateral.
(f) This
Agreement creates in favor of the Secured Parties a valid senior security
interest in the Collateral securing the payment and performance of the
Obligations and, upon making the filings described in the immediately following
sentence, a perfected first priority security interest in such Collateral.
Except for the filing of financing statements on Form-1 under the UCC with
the
jurisdictions indicated on Schedule
D,
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 Company of, or the effectiveness of, the Security Interest granted hereby
or for the execution, delivery and performance of this Agreement by the Company
or (ii) for the perfection of or exercise by the Secured Party of its rights
and
remedies hereunder.
(g) The
Company hereby irrevocably authorizes the Secured Parties (or Collateral Agent
on behalf of Secured Parties) at any time and from time to time before or after
the date hereof, 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
Nevada as amended from time to time, or any other Uniform Commercial Code
jurisdiction; and (b) contain any other information required by part 5 of
Article 9 of the UCC for the sufficiency or filing office acceptance of any
financing statement or amendment, including whether the Company is an
organization, the type of organization and any organization identification
number issued to the Company. The Company agrees to furnish any such information
to the Secured Parties promptly upon request. The Company also ratifies its
authorization for the Secured Party 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 Company is a party or by the Company is bound. No consent (including,
without limitation, from stockholders or creditors of the Company) is required
for the Company to enter into and perform its obligations
hereunder.
(i) The
Company 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 Party until this Agreement and the Security Interest
hereunder shall be terminated pursuant to Section 12. The Company hereby agrees
to defend the same against any and all persons. The Company shall safeguard
and
protect all Collateral for the account of the Secured Parties. At the request
of
the Secured Parties, the Company 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 Party in all public offices wherever
filing is, or is deemed by the Secured Party to be, necessary or desirable
to
effect the rights and obligations provided for herein. Without limiting the
generality of the foregoing, the Company shall pay all fees, taxes and
government fees and other amounts necessary to maintain the Collateral and
the
Security Interest hereunder, and the Company shall obtain and furnish to the
Secured Party 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.
(j) The
Company will not transfer, pledge, hypothecate, encumber, license, 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 Collateral
Agent.
(k) The
Company 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
Company shall, within ten (10) days of obtaining knowledge thereof, advise
the
Collateral Agent 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
Company shall promptly execute and deliver to the Secured Parties (or to
Collateral Agent on their behalf) such further deeds, mortgages, assignments,
assignment of rents, security agreements, financing statements or other
instruments, documents, certificates and assurances and take such further action
as the Collateral Agent 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
Company shall permit the Secured Parties and Collateral Agent and its
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
Collateral Agent from time to time.
(o) The
Company 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
Company shall promptly notify the Collateral Agent 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
Company that may materially affect the value of the Collateral, the Security
Interest or the rights and remedies of the Secured Parties or Collateral Agent
hereunder.
(q) All
information heretofore, herein or hereafter supplied to the Secured Parties
or
Collateral Agent by or on behalf of the Company with respect to the Collateral
is accurate and complete in all material respects as of the date
furnished.
4. Defaults.
The
following events shall be “Events
of Default”:
(a) The
occurrence of the Event of Default as defined in the Loan Agreement and
Note;
(b) Any
representation or warranty of the Company in this Agreement shall prove to
have
been incorrect in any material respect when made; and
(c) The
material failure by the Company to observe or perform any of its material
obligations hereunder for ten (10) days after receipt by the Company of notice
of such failure from the Secured Party.
5. Duty
To Hold In Trust.
Upon the
occurrence of any Event of Default and at any time thereafter, the Company
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, Note, 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. The
Collateral Agent; Rights and Remedies Upon Default.
Each of
the Secured Parties hereby irrevocably appoints the Collateral Agent to act
on
its behalf hereunder as attorney -in- fact and under any other document executed
in connection herewith, and authorizes the Collateral Agent to take such actions
on its behalf to exercise such powers as are delegated to the Collateral Agent
by the terms hereof or thereof, and the Company shall not have rights as a
third
party beneficiary of any such provision in this Section 6. The Collateral Agent
is authorized to act, in its sole discretion, on behalf of the Secured Parties
as described herein. Upon occurrence and continuance of any Event of Default
and
at any time thereafter, the Collateral Agent (on behalf of the Secured Parties)
shall have the right to exercise (on behalf of the Secured Parties) all of
the
remedies conferred to the Secured Parties (or to Collateral Agent) hereunder
and
under the Notes, and the Collateral Agent (on behalf of 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 subject). Without limitation,
the
Collateral Agent (on behalf of the Secured Parties) shall have the following
rights and powers:
(a)
to have
a third party custodian 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 Company shall assemble the Collateral and make it available to the
Collateral Agent for the benefit of the Secured Parties at places which the
Collateral Agent shall reasonably select, whether at the Company’s premises or
elsewhere, and make available to the Collateral Agent, without rent, all of
the
Company’s respective premises and facilities for the purpose of the Collateral
Agent taking possession of, removing or putting the Collateral in saleable
or
disposable form; and
(b)
to
operate the business of the Company 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 Collateral Agent 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
Company or right of redemption of the Company, which are hereby expressly
waived. Upon each such sale, lease, assignment or other transfer of Collateral,
the Collateral Agent 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
Company, which are hereby waived and released.
7. Indemnification
of the Collateral Agent.
Neither
the Collateral Agent nor any of its affiliates or representatives will be liable
for any action taken or omitted to be taken by it or them under this Agreement
in good faith and believed by it or them to be within the discretion or power
conferred upon it or them by this Agreement or be responsible for the
consequences of any error of judgment (except for fraud, gross negligence,
or
willful misconduct). Unless indemnified to its satisfaction against loss, cost,
liability and expense, the Collateral Agent may not be compelled to do any
act
under this Agreement or to take any action toward the execution or enforcement
of the powers created under this Agreement or to prosecute or defend any suit
in
respect of this Agreement. If the Collateral Agent requests instructions from
Secured Parties with respect to any act or action in connection with this
Agreement, then the Collateral Agent is entitled to refrain (without incurring
any liability to anyone by so refraining) from that act or action unless and
until it has received instructions. In no event, however, may the Collateral
Agent or any of its representatives be required to take any action that it
or
they determine could incur for it or them criminal or onerous civil liability.
Without limiting the generality of the foregoing, no Secured Party has any
right
of action against the Collateral Agent as a result of the Collateral Agent’s
acting or refraining from acting under this Agreement in accordance with
instructions of the Secured Parties. EACH
SECURED
PARTY
(IN PROPORTION TO THE THEN-OUTSTANDING PRINCIPAL AMOUNT OF NOTES)
SHALL
INDEMNIFY THE COLLATERAL
AGENT
AND ITS REPRESENTATIVES AND HOLD THEM HARMLESS FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, REASONABLE EXPENSES, AND REASONABLE DISBURSEMENTS OF ANY KIND OR NATURE
WHATSOEVER (EXCEPT FOR FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT) THAT
MAY
BE IMPOSED ON, ASSERTED AGAINST, OR INCURRED BY THEM IN ANY WAY RELATING TO
OR
ARISING OUT OF THIS AGREEMENT OR ANY ACTION TAKEN OR OMITTED BY THEM UNDER
THIS
AGREEMENT.
8. Applications
of Proceeds.
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 (or Collateral Agent) 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 (or Collateral
Agent
on their behalf) shall pay to the Company 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 is legally
entitled, (i) then the policies shall be allowed among the Secured Parties
in
proposition to the amount outstanding under each Note, and (ii) the Company
will
be liable for the deficiency, together with interest thereon, at the Default
Interest rate (as defined in the Notes), and the reasonable fees of any
attorneys employed by the Secured Parties (or Collateral Agent on their behalf)
to collect such deficiency. To the extent permitted by applicable law, the
Company waives all claims, damages and demands against the Secured Parties
(or
Collateral Agent) arising out of the repossession, removal, retention or sale
of
the Collateral, unless due to the gross negligence or willful misconduct of
the
Secured Party.
(a) All
ordinary costs and expenses incurred by the Secured Parties (or collateral
Agent) in collection of the Obligations shall be borne exclusively by the
Company 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.
9. Costs
and Expenses.
The
Company 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 or Collateral Agent. The Company
shall also pay all other claims and charges which in the reasonable opinion
of
the Secured Parties as Collateral Agent might prejudice, imperil or otherwise
affect the Collateral or the Security Interest therein. The Company 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 Party 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 Interest
rate.
10. Responsibility
for Collateral.
The
Company assumes all liabilities and responsibility in connection with all
Collateral, and the obligations of the Company 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.
11. Security
Interest Absolute.
All
rights of the Secured Parties and all Obligations of the Company hereunder,
shall be absolute and unconditional, 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 (or Collateral Agent) 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
Company, 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 Company 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 Company'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 Company 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 Company waives any defense arising by reason of the application
of
the statute of limitations to any obligation secured hereby.
12. Term
of Agreement.
This
Agreement and the Security Interest shall terminate on the date that of all
amounts due the Secured Parties under the Loan Agreement and the Notes have
been
indefensibly full and all other obligations have been indefensibly paid or
satisfied. Upon such termination, the Secured Parties, at the request and at
the
expense of the Company, will join in executing any termination statement with
respect to any financing statement executed and filed pursuant to this
Agreement.
13. Power
of Attorney; Further Assurances.
(a) In
addition to any other rights, powers and authority granted to Collateral Agent
herein or in any other Agreement: The Company authorizes the Collateral Agent
as
agent and attorney - in- fact for the Secured Parties, and does hereby make,
constitute and appoint it, and its respective officers, agents, successors
or
assigns with full power of substitution, as the Company's true and lawful
attorney-in-fact, with power, in its own name or in the name of the Company,
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
Collateral Agent or any of Secured Parties; (ii) to sign and endorse any UCC
financing statement or any invoice, freight or express xxxx, xxxx 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 xxx for monies due in respect of the Collateral; and (v) generally, to
do,
at the option of the Collateral Agent, and at the Company's expense, at any
time, or from time to time, all acts and things which the Collateral Agent
deems
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 and Notes, all as fully and effectually as the Company might
or
could do; and the Company 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 Company will cooperate in good afith with Collateral
Agent
and 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
Collateral Agent, to perfect the Senior 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
Company hereby irrevocably appoints the Collateral Agent as the Company's
attorney-in-fact, with full authority in the place and stead of the Company
and
in the name of the Company, from time to time at the discretion of the
Collateral Agent, to take any action and to execute any instrument which the
Collateral Agent, 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 Company where permitted by
law.
14. 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, on a business day or,
if
not, on the first business day thereafter (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:
|
If
to the Company:
|
Goldspring,
Inc.
|
|
000
Xxxxxx Xxxxx
|
|
|
Xxx
Xxxxxxx, XX 00000
|
|
|
Telephone
No: (000) 000-0000
|
|
|
Fax
No. (000) 000-0000
|
|
With
copies to:
|
Xxxxxxx
Xxxx LLP
|
|
00
Xxxx 00xx Xxxxxx, 00xx Xxxxx
|
|
|
Xxx
Xxxx, XX 00000
|
|
|
Telephone
No: (000) 000-0000
|
|
|
Facsimile
No: (000) 000-0000
|
|
|
Attn.:
Xxxxxxx X. Xxxxx, Esq.
|
|
|
Jolie
Xxxx, Esq.
|
|
|
00
Xxxxxxx Xxxxx, Xxxxx 000
|
|
|
Xxx
Xxxx, XX 00000
|
|
|
Telephone
No.: (000) 000-0000
|
|
|
NY
FAX: (000) 000-0000
|
|
|
DALLAS
FAX: (000) 000-0000
|
If
to the
Secured Parties: to the address set forth immediately across the Secured
Party’s
name on the Schedule
A,
with a
copy to the Collateral Agent.
|
Xxxx
Xxxxxxxx
|
|
|
000
Xxxxxx Xxxxx
|
|
|
Xxx
Xxxxxxx, XX 00000
|
|
|
Telephone
No: (000) 000-0000
|
|
|
Fax
No. (000) 000-0000
|
|
|
With
copies to :
|
Xxxxxxx
Xxxx LLP
|
|
00
Xxxx 00xx Xxxxxx, 00xx Xxxxx
|
|
|
Xxx
Xxxx, XX 00000
|
|
|
Telephone
No: (000) 000-0000
|
|
|
Facsimile
No: (000) 000-0000
|
|
|
Attn.:
Xxxxxxx X. Xxxxx, Esq.
|
15. 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 Collateral Agent shall have the
right, in its 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.
16. Miscellaneous.
(a) No
course
of dealing between the Company and any Secured Party or Collateral Agent, nor
any failure to exercise, nor any delay in exercising, on the part of any Secured
Party or Collateral Agent, any right, power or privilege hereunder or under
the
Loan Agreement or Note 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 and Collateral Agent with respect
to the Collateral, whether established hereby or by the Loan Agreement or Notes
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 terminated,
modified, waived or amended except by a written agreement specifically referring
to this Agreement and signed by the Company and Holders of more than fifty
percent (50%) of the standing principal amount (including Interest) of Notes.
Any such termination, waiver, modification or amendment shall be binding against
all
Noteholders and their Assigns and the Company.
(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.
(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.
IN
WITNESS WHEREOF,
the
parties hereto have caused this Security Agreement to be duly executed on the
day and year first above written. (This signature page may be duplicated for
additional Secured Parties).
| THE COMPANY: | |||
|
PLUM
MINE SPECIAL PURPOSE, LLC
|
|||
| By: | |||
| Name: | |||
| Title: | Manager | ||
|
COLLATERAL
AGENT:
|
|||
|
Xxxx
Xxxxxxxx
|
|||
|
SECURED
PARTIES:
|
|||
|
Print
Name
|
|||
| By: | |||
| Name: | |||
| Address: | |||
|
Print
Name
|
|||
| By: | |||
| Name: | |||
| Address: |
SCHEDULE
A
The
Secured Parties
June
___, 2006 Funding Date
|
Name/Address
|
Loan
Amount(s)
|
|
SCHEDULE
B
Offices
0000
Xxxx
Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx,
XX 00000
SCHEDULE
C
Permitted
Liens
|
Name
and
Address
|
Amount
of Principal Indebtedness
Remaining
|
SCHEDULE
D
Jurisdictions
Florida
Nevada
Arizona
