SECURITIES PURCHASE AGREEMENT
 
Securities Purchase Agreement dated as of May 8, 2007 (this “Agreement”) by and
between GPS Industries, Inc., a Nevada corporation, with principal executive
offices located at Suite 214, 5500 152nd Street. Surrey, British Columbia,
Canada V35 S59 (the “Company”), and the entities listed on the signature page
hereof (individually referred to as a “Buyer” and collectively the “Buyers”).
 
WHEREAS, on November 13, 2006 the Company entered into that certain Securities
Purchase Agreement (the “2006 Purchase Agreement”) with Great White Shark
Enterprises, Inc., a Florida corporation (“GWSE”), and Leisurecorp LLC, a Dubai
limited liability company (“Leisurecorp”), in connection with the purchase by
GWSE and Leisurecorp of shares of the Company’s Series B Convertible Preferred
Stock (the “Preferred Shares”) and warrants to purchase shares of the Company’s
common stock (the “Common Stock”) at an exercise price per share of $.122 (the
“Warrants”); and
 
WHEREAS, under the 2006 Purchase Agreement, each of the Buyers has the right,
exercisable until April 28, 2007, to purchase additional Preferred Shares and
Warrants on the same terms as set forth in the 2006 Purchase Agreement; and
 
WHEREAS, the Buyers have exercised their rights to purchase from the Company
additional Preferred Shares and Warrants; and
 
WHEREAS, as set forth herein, the Company and the Buyers have agreed to modify
the terms upon which the Buyers are purchasing the additional Preferred Shares
and Warrants;
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:
 
I.
PURCHASE AND SALE OF PREFERRED SHARES AND WARRANT
 
A.   Transaction. Subject to the satisfaction of the conditions set forth in
Articles VI and VII, at the Closing (as defined below), each Buyer hereby
severally agrees to purchase from the Company, and the Company hereby agrees to
issue and sell to each Buyer in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933, as amended (the
“Securities Act”), the Preferred Shares and Warrants listed under each Buyer’s
name on the signature page of this Agreement.
 
B.   Purchase Price; Form of Payment. The purchase price for the Preferred
Shares and Warrants purchased pursuant to this Agreement shall be paid by
Leisurecorp and GWSE as follows: (i) At the Closing, Leisurecorp shall pay the
entire $10,000,000 purchase price for the Preferred Shares and Warrants
purchased hereunder by delivering to the Company an interest-free promissory
note, the form of which is attached hereto as Appendix A, having an initial
principal balance of $10,000,000 (the “Note”), and a pledge and security
agreement (the “Security Agreement”) in the form attached hereto as Appendix B;
(ii) GWSE shall pay the $2,500,000 purchase price for the Preferred Shares and
Warrants purchased hereunder by issuing a $1,500,000 wire transfer of
immediately available funds to the account of the Company as notified by the
Company and by canceling $1,000,000 of the currently outstanding balance that
the Company owes to GWSE under that certain Endorsement Agreement, dated April
1, 2003, as amended (the “Endorsement Agreement”).
 

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C.   Closing Deliveries. At the closing of the purchase and sale of the
Preferred Shares and the Warrants (the “Closing”) that will occur immediately
following the execution and delivery of this Agreement, (i) the Company shall
issue to the Buyers the Preferred Shares and Warrants listed on the signature
pages of this Agreement, (ii) Leisurecorp shall deliver to the Company the fully
executed Note and the fully executed Security Agreement, (iii) GWSE shall pay
$1,500,000 of its $2,500,000 purchase price by issuing a $1,500,000 wire
transfer of immediately available funds to the account of the Company as
specified by the Company, and (iv) GWSE shall execute a debt exchange agreement
(the “Debt Exchange Agreement”), the form of which is attached hereto as
Appendix C, that effects and evidences the cancellation of $1,000,000 of the
currently outstanding balance of the amounts due under the Endorsement
Agreement. The stock certificate representing the Preferred Shares and the
agreement evidencing the Warrant purchased by GWSE shall be delivered to GWSE at
the Closing. The stock certificate representing the 1,000,000 Preferred Shares
purchased by Leisurecorp shall be issued as three stock certificates (two for
400,000 shares each, and one for 200,000 shares), and the Warrant purchased by
Leisurecorp shall be issued as three separate warrants (two representing the
right to purchase 16,393,442 shares each, and one representing the right to
purchase 8,196,723 shares). The three stock certificates and the three warrants
registered in the name of Leisurecorp shall be retained by the Company under the
Security Agreement and shall be released to Leisurecorp in accordance with the
terms of the Security Agreement.
 
II.
BUYER’S REPRESENTATIONS AND WARRANTIES
 
Except as set forth in Articles II. G and H, which representations and
warranties shall be made solely by the Buyer referenced in such section, each
Buyer severally represents and warrants to and covenants and agrees with the
Company as follows:
 
A.   Buyer is purchasing the Preferred Shares, the Common Stock issuable upon
conversion of the Preferred Shares (the “Conversion Shares”), the Warrants and
the Common Stock issuable upon exercise of the Warrants (the “Warrant Shares”
and, collectively with the Preferred Shares, the Conversion Shares and the
Warrants subject to this Agreement, the “Securities”), for its own account, for
investment purposes only and not with a view towards or in connection with the
public sale or distribution thereof in violation of the Securities Act.
 
B.   Buyer is (i) an “accredited investor” within the meaning of Rule 501 of
Regulation D under the Securities Act, (ii) experienced in making investments of
the kind contemplated by this Agreement, (iii) capable, by reason of its
business and financial experience, of evaluating the relative merits and risks
of an investment in the Securities, and (iv) able to afford the loss of its
investment in the Securities.
 
C.   Buyer understands that the Securities are being offered and sold by the
Company in reliance on an exemption from the registration requirements of the
Securities Act and equivalent state securities and “blue sky” laws, and that the
Company is relying upon the accuracy of, and Buyer’s compliance with, Buyer’s
representations and warranties set forth in this Agreement to determine the
availability of such exemption and the eligibility of Buyer to purchase the
Securities;
 
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D.   Buyer understands that the Securities have not been approved or disapproved
by the Securities and Exchange Commission (the “Commission”) or any state or
provincial securities commission.
 
E.   This Agreement has been duly and validly authorized, executed and delivered
by Buyer and is a valid and binding agreement of Buyer enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally and except as rights to indemnity and
contribution may be limited by federal or state securities laws or the public
policy underlying such laws.
 
F.   Since June 1, 2006, neither such Buyer nor any person over which such Buyer
has control which (x) had knowledge of the transactions contemplated hereby, (y)
has or shares discretion relating to such Buyer’s investments or trading or
information concerning such Buyer’s investments, including in respect of the
Securities, or (z) is subject to such Buyer’s review or input concerning such
affiliate’s investments or trading (collectively, “Trading Affiliates”) has,
directly or indirectly, effected or agreed to effect any short sale, whether or
not against the box, established any “put equivalent position” (as defined in
Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended (the “1934
Act”)) with respect to the Common Stock, granted any other right (including,
without limitation, any put or call option) with respect to the Common Stock or
with respect to any security that includes, relates to or derived any
significant part of its value from the Common Stock.
 
G.   Leisurecorp, on its own behalf, hereby represents and warrants that the
Note and Security Agreement have been duly and validly authorized, executed and
delivered by Leisurecorp and that each of the Note and the Security Agreement is
a valid and binding agreement of Leisurecorp enforceable against it in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally.
 
H.   GWSE, on its own behalf, hereby represents and warrants that the Debt
Exchange Agreement has been duly and validly authorized, executed and delivered
by GWSE and that Debt Exchange Agreement is a valid and binding agreement of
GWSE enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors’ rights and remedies generally.
 
III.
THE COMPANY’S REPRESENTATIONS
 
The Company represents and warrants to Buyers that:
 
A.   Organization and Qualification. The Company and each of its Subsidiaries
(as defined below), if any, is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it is
incorporated, with full power and authority (corporate and other) to own, lease,
use and operate its properties and to carry on its business as and where now
owned, leased, used, operated and conducted. The Company and each of its
Subsidiaries is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which its ownership or use of property or
the nature of the business conducted by it makes such qualification necessary
except where the failure to be so qualified or in good standing would not have a
Material Adverse Effect. “Material Adverse Effect” means any of (i) a material
and adverse effect on the legality, validity or enforceability of any document
executed by the Company in connection with the transactions contemplated by this
Agreement and the Warrants (the foregoing documents are herein collectively
referred to as the “Transaction Documents”), (ii) a material and adverse effect
on the results of operations, assets, prospects, business or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a whole,
or (iii) an adverse impact on the Company’s ability to perform under any of the
Transaction Documents. “Subsidiary” or “Subsidiaries” means any corporation(s)
or other organization(s), whether incorporated or unincorporated, in which the
Company owns, directly or indirectly, any equity or other ownership interest.
 
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B.   Authorization; Enforcement. (i) The Company has all requisite corporate
power and authority to enter into and perform this Agreement and the other
Transaction Documents and to consummate the transactions contemplated hereby and
thereby and to issue the Preferred Shares, the Warrants, the Conversion Shares,
and the Warrant Shares, in accordance with the terms hereof and thereof, (ii)
the execution and delivery of this Agreement and the other Transaction Documents
by the Company and the consummation by it of the transactions contemplated
hereby and thereby (including without limitation, the issuance of the Conversion
Shares and the Warrant Shares) have been duly authorized by the Company’s Board
of Directors and no further consent or authorization of the Company, its Board
of Directors, its shareholders or any third party is required, (iii) this
Agreement has been, and the other Transaction documents when executed, will be
duly executed and delivered by the Company, and (iv) this Agreement constitutes,
and upon execution and delivery by the Company of the other Transaction
Documents, each of such instruments will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms.
 
C.   Capitalization.
 
(i)   As of the date hereof, the authorized capital stock of the Company
consists solely of (i) 1,600,000,000 shares of Common Stock, of which
376,533,966 shares are issued and outstanding, 40 million shares are reserved
for issuance pursuant to the Company’s stock option plans, of which options for
the purchase of 24,290,000 are outstanding, and 411,432,650 shares are reserved
for issuance pursuant to securities exercisable for, or convertible into or
exchangeable for shares of Common Stock (including the shares issuable upon
conversion of the Preferred Shares and exercise of the Warrants issued to GWSE
and Leisurecorp under the 2006 Purchase Agreement); and (ii) 50,000,000 shares
of preferred stock (the “Preferred Stock”), of which 15,000,000 shares have been
designated “Series A Preferred Stock,” and 4,000,000 have been designated
“Series B Convertible Preferred Stock.” As of the date hereof, no shares of
Series A Preferred Stock are outstanding, and a total of 1,874,089 shares of
Series B Convertible Preferred Stock are issued and outstanding. Except as set
forth in this paragraph and in Schedule C(i), as of the date hereof there are no
other securities exercisable for, or convertible into or exchangeable for shares
of capital stock of the Company, and the Company has no contractual or other
obligation to issue any shares of capital stock. There are no other authorized
shares of capital stock or voting securities. The Company currently has a
sufficient number of authorized shares of Common Stock to cover all shares of
Common Stock that are issuable as of the date of this Agreement if all currently
issued and outstanding options, warrants and convertible or exchangeable
securities were exercised, converted or exchanged on the date hereof.
 
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(ii)  Immediately after giving effect to the transactions contemplated by this
Agreement, the authorized capital stock of the Company will consist of (a)
1,600,000,000 shares of Common Stock, of which a maximum of 376,533,966 shares
will be issued and outstanding (assuming no exercise of currently outstanding
options or warrants, a true and complete schedule of which is attached hereto as
Schedule C(ii)), 40 million shares will be reserved for issuance pursuant to the
Company’s stock option plans, of which options for the purchase of 24,290,000
will be outstanding (assuming no exercise of currently outstanding options), and
667,580,191 shares will be reserved for issuance pursuant to then outstanding
agreements or then outstanding securities exercisable for, or convertible into
or exchangeable for shares of Common Stock; and (b) 50,000,000 shares of
preferred stock, of which 15,000,000 shares have been designated “Series A
Preferred Stock” (none of which will be outstanding), and 4,000,000 shares have
been designated “Series B Convertible Preferred Stock,” of which 3,124,089
shares will be issued and outstanding. As of the Closing Date, except as set
forth in this paragraph and on Schedule C(ii), there will be no other securities
exercisable for, or convertible into or exchangeable for shares of Common Stock
or Preferred Stock, the Company will have no contractual or other obligation to
issue any shares of capital stock, and there will be no other authorized shares
of capital stock or voting securities.
 
(iii)        All of the Company’s outstanding shares of capital stock are duly
and validly issued, fully paid and nonassessable and were issued in compliance
with state and federal securities laws and were not issued in violation of any
preemptive or similar rights.
 
(iv)   The Warrants and the Preferred Shares to be issued pursuant to this
Agreement have been duly authorized and when issued in accordance with the terms
of this Agreement will be fully paid and non-assessable and will be free and
clear of any liens other than any liens created by the holder thereof, and will
not be issued in violation of any preemptive or similar rights and will be
issued in compliance with federal and state securities laws. The Common Stock
issuable upon conversion of the Preferred Shares and exercise of the Warrants
will be duly and validly, fully paid and non-assessable and will be free and
clear of any liens other than any liens created by the holder thereof, and will
not be issued in violation of any preemptive or similar rights and will be
issued in compliance with federal and state securities laws.
 
(v)   The Company has issued options to purchase Common Stock and warrants
exercisable for Common Stock on the terms and in the amounts set forth on
Schedule C (the “Convertible Securities”). Except for the Convertible Securities
and except as otherwise set forth on Schedule C, there are no outstanding
options, warrants, rights (including conversion or preemptive rights and other
similar rights) or agreements, orally or in writing for the purchase or
acquisition from the Company of any of its shares of capital stock.
 
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(vi)   The holders of Series B Preferred Shares will be entitled to the rights,
preferences and privileges as set forth in the Certificate of Designation of the
Series B Convertible Preferred Stock (the “Certificate of Designation”). The
Company has furnished to the Buyers true and correct copies of the Company's
Articles of Incorporation as in effect on the date hereof ("Articles of
Incorporation") and the Company's By-laws, as in effect on the date hereof (the
"By-laws"),
 
(vii)   Except for the Shareholder Agreement entered into as of December 29,
2006 by and between the Company, GWSE, Leisurecorp, Robert C. Silzer, Sr., and
Douglas Wood, the Company is not a party or subject to any agreement or
understanding relating to the voting or giving of written consents with respect
to any capital stock or by a director of the Company.
 
D.   Acknowledgment of Dilution. The Company understands and acknowledges the
potentially dilutive effect to the Conversion Shares and Warrant Shares issuable
upon conversion of the Preferred Shares or exercise of the Warrants. The Company
further acknowledges that, except as set forth in Article IV.F., its obligation
to issue the Conversion Shares and Warrant Shares in accordance with this
Agreement, the Articles of Incorporation, the Certificate of Designation, and
the Warrants is absolute and unconditional regardless of the dilutive effect
that such issuance may have on the ownership interests of other shareholders of
the Company.
 
E.   No Conflicts. The execution, delivery and performance of this Agreement and
the other Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without
limitation, the issuance and reservation for issuance of the Conversion Shares
and Warrant Shares) will not (i) conflict with or result in a violation of any
provision of the Articles of Incorporation or By-laws or (ii) violate or
conflict with, or result in a breach of any provision of, or constitute a
default (or an event which with notice or lapse of time or both could become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement, indenture, patent,
patent license or instrument to which the Company or any of its Subsidiaries is
a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws and regulations
and regulations of any self-regulatory organizations to which the Company or its
securities are subject) applicable to the Company or any of its Subsidiaries or
by which any property or asset of the Company or any of its Subsidiaries is
bound or affected. The businesses of the Company and its Subsidiaries, if any,
are not being conducted, and shall not be conducted so long as a Buyer owns any
of the Securities, in violation of any law, ordinance or regulation of any
governmental entity. Neither the Company nor any of its Subsidiaries is in
violation of its Certificate or Articles of Incorporation, By-laws or other
organizational documents and neither the Company nor any of its Subsidiaries is
in default under any material contract, agreement or understanding to which it
is a party or by which it or its assets or properties is bound.
 
F.   SEC Documents; Financial Statements. Since December 31, 2004 the Company
has timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the 1934 Act (all of the foregoing and all exhibits included therein and
financial statements and schedules thereto and documents incorporated by
reference therein, being hereinafter referred to herein as the “SEC Documents”).
As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the 1934 Act and the rules and regulations of
the SEC promulgated thereunder applicable to the SEC Documents, and none of the
SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. None of the
statements made in any such SEC Documents is, or has been, required to be
amended or updated under applicable law (except for such statements as have been
amended or updated in subsequent filings prior the date hereof). As of their
respective dates, the financial statements of the Company included in the SEC
Documents, including the notes thereto (the “Financial Statements”), complied as
to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, were complete
and correct in all material respects as of their respective dates, and were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods indicated. The Financial Statements
fairly present the consolidated financial condition and operating results of the
Company at the dates and during the periods indicated therein (subject in the
case of unaudited statements, to normal and recurring year-end adjustments)
Except as set forth in the Financial Statements, the Company has no liabilities,
contingent or otherwise, other than (i) liabilities incurred in the ordinary
course of business subsequent to June 30, 2006 and (ii) obligations under
contracts and commitments incurred in the ordinary course of business and not
required under generally accepted accounting principles to be reflected in such
financial statements, which in the case of (i) or (ii), individually or in the
aggregate, are not material to the financial condition or operating results of
the Company.
 
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G.   Absence of Certain Changes. Since December 31, 2005, there has been no
material adverse change and no material adverse development in the assets,
liabilities, business, properties, operations, financial condition, results of
operations or prospects of the Company or any of its Subsidiaries.
 
H.   Absence of Litigation. Except as set forth in the SEC Documents and
Schedule H, there is no action, suit, claim, proceeding, inquiry, or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the Company
or any of its Subsidiaries, threatened against or affecting the Company or any
of its Subsidiaries, or their officers or directors in their capacity as such,
that could have a Material Adverse Effect. There is no judgment, decree or order
against the Company, or to the knowledge of the Company or any of its
Subsidiaries, against its officers or directors (in their capacities as such)
that could have a Material Adverse Effect.
 
I.   Tax Status. Except as set forth in Schedule I, the Company and each of its
Subsidiaries has made or filed all federal, state, local and foreign income and
all other tax returns, reports and declarations required by any jurisdiction to
which it is subject (unless and only to the extent that the Company and each of
its Subsidiaries has set aside on its books provisions reasonably adequate for
the payment of all unpaid and unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim. The Company has not executed a waiver with respect to the statute of
limitations relating to the assessment or collection of any foreign, federal,
state or local tax.
 
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J.   Disclosure. All information relating to or concerning the Company or any of
its Subsidiaries set forth in this Agreement is true and correct in all material
respects and the Company has not omitted to state any material fact necessary in
order to make the statements made herein or therein, in light of the
circumstances under which they were made, not misleading. No event or
circumstance known to the Company has occurred or exists with respect to the
Company or any of its Subsidiaries or its or their business, properties,
prospects, operations or financial conditions, which, under applicable law, rule
or regulation, requires public disclosure or announcement by the Company but
which has not been so publicly announced or disclosed.
 
K.   Patents, Copyrights, etc. (i) The Company and each of its Subsidiaries owns
or possesses the requisite licenses or rights to use all patents, patent
applications, patent rights, inventions, know-how, trade secrets, trademarks,
trademark applications, service marks, service names, trade names and copyrights
("Intellectual Property") necessary to enable it to conduct its business as now
operated; there is no claim or action by any person pertaining to, or proceeding
pending, or to the Company's knowledge threatened, which challenges the right of
the Company or of a Subsidiary with respect to any Intellectual Property
necessary to enable it to conduct its business as now operated; to the best of
the Company's knowledge, the Company's or its Subsidiaries' current and intended
products, services and processes do not infringe on any Intellectual Property or
other rights held by any person; and the Company is unaware of any facts or
circumstances which might give rise to any of the foregoing. The Company and
each of its Subsidiaries have taken reasonable security measures to protect the
secrecy, confidentiality and value of their Intellectual Property.
 
L.   Acknowledgment Regarding Buyers’ Purchase of Securities. The Company
acknowledges and agrees that the Buyers are acting solely in the capacity of
arm’s length purchasers with respect to this Agreement and the transactions
contemplated hereby. The Company further acknowledges that no Buyer is acting as
a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereby and any
statement made by any Buyer or any of their respective representatives or agents
in connection with this Agreement and the transactions contemplated hereby is
not advice or a recommendation and is merely incidental to the Buyers’ purchase
of the Securities. The Company further represents to each Buyer that the
Company’s decision to enter into this Agreement has been based solely on the
independent evaluation of the Company and its representatives.
 
M.   No Integrated Offering. Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf, has directly or indirectly made any
offers or sales in any security or solicited any offers to buy any security
under circumstances that would require registration under the Securities Act of
the issuance of the Securities to the Buyers.
 
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N.   No Brokers. The Company has taken no action which would give rise to any
claim by any person for brokerage commissions, transaction fees or similar
payments relating to this Agreement or the transactions contemplated hereby.
 
O.   Environmental Matters.
 
(i)  There are, to the best of the Company’s knowledge, with respect to the
Company or any of its Subsidiaries or any predecessor of the Company, no past or
present violations of Environmental Laws (as defined below), releases of any
material into the environment, actions, activities, circumstances, conditions,
events, incidents, or contractual obligations which may give rise to any common
law environmental liability or any liability under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 or similar
federal, state, local or foreign laws and neither the Company nor any of its
Subsidiaries has received any notice with respect to any of the foregoing, nor
is any action pending or, to the Company’s knowledge, threatened in connection
with any of the foregoing. The term “Environmental Laws” means all federal,
state, local or foreign laws relating to pollution or protection of human health
or the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata), including, without limitation,
laws relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants contaminants, or toxic or hazardous substances or wastes
(collectively, “Hazardous Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder.
 
(ii)  Other than those that are or were stored, used or disposed of in
compliance with applicable law, no Hazardous Materials are contained on or about
any real property currently owned, leased or used by the Company or any of its
Subsidiaries, and no Hazardous Materials were released on or about any real
property previously owned, leased or used by the Company or any of its
Subsidiaries during the period the property was owned, leased or used by the
Company or any of its Subsidiaries, except in the normal course of the Company’s
or any of its Subsidiaries’ business.
 
(iii)  To the best of the Company’s knowledge there are no underground storage
tanks on or under any real property owned, leased or used by the Company or any
of its Subsidiaries that are not in compliance with applicable law.
 
P.   Title to Property. The Company and its Subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of the Company and its Subsidiaries. Any real property and facilities held under
lease by the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as would not have a
Material Adverse Effect.
 
Q.   Internal Accounting Controls. The Company and each of its Subsidiaries
maintain a system of internal accounting controls sufficient, in the judgment of
the Company’s board of directors, to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
 
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R.   Permits; Compliance. The Company and each of its Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted (collectively, the "Company Permits"), and there is
no action pending or, to the knowledge of the Company, threatened regarding
suspension or cancellation of any of the Company Permits. Neither the Company
nor any of its Subsidiaries is in conflict with, or in default or violation of,
any of the Company Permits, except for any such conflicts, defaults or
violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Since December 31, 2005, neither the
Company nor any of its Subsidiaries has received any notification with respect
to possible conflicts, defaults or violations of applicable laws, except for
notices relating to possible conflicts, defaults or violations, which conflicts,
defaults or violations would not have a Material Adverse Effect.
 
S.   Foreign Corrupt Practices. Neither the Company, nor any of its
Subsidiaries, nor any director, officer, agent, employee or other person acting
on behalf of the Company or any Subsidiary has, in the course of his actions
for, or on behalf of, the Company, used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977,
as amended, or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment to any foreign or domestic government official or
employee.
 
T.   OTCBB. The Company is not in violation of the quotation requirements of the
Over-the-Counter Bulletin Board (the "OTCBB") and does not reasonably anticipate
that the Common Stock will be removed by the OTCBB in the foreseeable future.
The Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing.
 
U.   No Investment Company. The Company is not, and upon the issuance and sale
of the Securities as contemplated by this Agreement will not be an “investment
company” required to be registered under the Investment Company Act of 1940.
 
V.   Certain Registration Matters. Assuming the accuracy of the Buyers’
representations and warranties set forth in Article II, no registration under
the Securities Act is required for the offer and sale of the Conversion Shares
and Warrant Shares by the Company to the Buyers under the transaction documents.
 
10

--------------------------------------------------------------------------------

 
W.   Antitakeover Matters.
 
(i)   The Company does not have 100 or more stockholders of record who have
addresses in the State of Nevada appearing on the stock ledger of the Company.
 
(ii)   The Company, its stockholders, and its Board of Directors have taken all
actions required by Sections 78.378-78.3793 (inclusive) and Sections
78.411-78.444 (inclusive) (collectively, the Takeover Provisions) of the General
Corporation Law of the State of Nevada in connection with the transactions
contemplated by this Agreement and the other Transaction Documents and no
actions need be taken by any other person or entity for the transactions
contemplated by this Agreement and the other Transaction Documents to be in
compliance with the Takeover Provisions.
 
X.   Offering. Subject in part to the truth and accuracy of each Buyer’s
representations and warranties set forth in Article II, the offer, sale and
issuance of the Securities as contemplated by this Agreement are exempt from the
registration requirements of the Securities Act and applicable state securities
and “blue sky” laws, and neither the Company nor any authorized agent acting on
its behalf will take any action hereafter that would cause the loss of such
exemption.
 
Y.   Indebtedness. Attached hereto as Schedule Y is a true, complete and correct
list of all outstanding secured and unsecured Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has commitments as of
April 27, 2007. The total amount of all Indebtedness (including, for this
purpose, amounts less than $50,000 and including all principal and accrued
interest) outstanding as of the date of this Agreement is $7,321,473, which
number has not increased in the aggregate by more than $100,000 from April 27,
2007 through the date of this Agreement. For the purposes of this Agreement,
“Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed
in excess of $50,000 (other than trade accounts payable incurred in the ordinary
course of business), (b) all guaranties, endorsements and other contingent
obligations in respect of Indebtedness of others; and (c) the present value of
any lease and other similar payments in excess of $50,000.
 
Z.   Signing Authority. Bart Collins has been appointed as, and currently is
serving as the special Executive Vice President of the Company designated under
Article IV, Section 8 of the Company’s Bylaws. As the Executive Vice President,
Mr. Collins has the authority, and is required, to sign and approve the
transactions described in Article IV.J of the 2006 Purchase Agreement. The
covenant described in Article IV.J of the 2006 Purchase Agreement remains in
full force and effect in accordance with its terms and the Company is in
compliance with such covenant.
 
IV.
CERTAIN COVENANTS AND ACKNOWLEDGMENTS
 
A.   Restrictive Legend. Each Buyer acknowledges and agrees that, upon issuance
pursuant to this Agreement, the Securities (including any Warrant Shares and
Conversion Shares) shall have endorsed thereon a legend in substantially the
following form (and a stop transfer order may be placed against transfer of the
Securities until such legend has been removed):
 
11

--------------------------------------------------------------------------------

 
“NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE [CONVERTIBLE] HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR FOREIGN COUNTRY IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR FOREIGN COUNTRY. THE SECURITIES REPRESENTED HEREBY MAY NOT BE
OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED
UNDER AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.”
 
At the written request of any Buyer, the legend set forth above shall be removed
and the Company shall issue a certificate without such legend to the holder of
any Security upon which it is stamped, if, (a) such Security is registered for
sale under an effective registration statement filed under the Securities Act or
may otherwise be sold under Rule 144 or Regulation S without any restriction as
to the number of securities as of a particular date that can be immediately
sold, or (b) such holder provides the Company with an opinion of counsel, in
form, substance and scope customary for opinions of counsel in comparable
transactions, which opinion shall be reasonably acceptable to the Company’s
counsel, to the effect that a public sale or transfer of such security may be
made without registration under the Securities Act, which opinion shall be
accepted by the Company so that the sale or transfer is effected, or (c) such
holder provides the Company with reasonable assurances that such Security can be
sold pursuant to Rule 144 or Regulation S.
 
B.   Filings. The Company shall timely make all necessary filings with the
Commission, including by not limited to a Form D with respect to the Securities
as required under Regulation D, and “blue sky” filings required to be made by
the Company in connection with the sale of the Securities to Buyer as required
by all applicable Laws, and shall provide a copy thereof to Buyer promptly after
such filing.
 
The Company also agrees that it shall, on or prior to the Closing Date, take any
other such action as the Company shall reasonably determine is necessary to
qualify the Securities for sale to Buyers under such “blue sky” laws (or to
obtain an exemption therefrom), and shall provide evidence of any such action so
taken to Buyers on or prior to the Closing Date; provided that Company shall not
be required to (a) qualify to generally do business in any jurisdiction where it
would not otherwise be required to qualify but for this subsection or
(b) subject itself to taxation in any such jurisdiction.
 
12

--------------------------------------------------------------------------------

 
C.   Reporting Status. So long as Buyers beneficially own any of the Securities,
the Company shall file all reports required to be filed by it with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act or any reports or
filings that are required by the OTCBB.
 
D.   Use of Proceeds. The Company intends in good faith to use all of the cash
portion of the purchase price that it receives from the sale of the Preferred
Shares and Warrants (at the Closing or from time to time under the Note) to (i)
extinguish the $5,544,345 of indebtedness identified on Schedule Y (the
"Identified Indebtedness") by no later than December 31, 2007, (ii) eliminate
all indebtedness (other than (x) trade accounts payable and accrued operating
liabilities incurred in the ordinary course of operations, and (y) real estate
lease obligations) as of December 31, 2007, (iii) increase its stockholders
equity on its audited balance sheet as of December 31, 2007 (after the full
payment of the Note) to not less than $5,000,000, and (iv) have no less than
approximately $950,000 of cash, or cash equivalents available as of December 31,
2007. The Company is currently considering repaying a portion of the Identified
Indebtedness by exchanging such indebtedness for shares of Common Stock, and
nothing herein shall obligate the Company to use the proceeds of this offering
to repay the Identified Indebtedness if such indebtedness is repaid through the
issuance of shares of Common Stock. The Company may modify its use of the
proceeds received from the sale of the Preferred Shares and Warrants if such
modification (including any final authorization to repay the Identified
Indebtedness through issuance of shares of Common Stock) is approved by a
majority of the Board of Directors, which majority shall include at least one of
the Reviewing Preferred Directors (as such term is defined in the Certificate of
Designation).
 
E.   No Integration. The Company shall not make any offers or sales of any
security (other than the Preferred Shares and the Warrants offered hereby) under
circumstances that would require registration of the Preferred Shares, the
Warrants, the Conversion Shares or the Warrant Shares under the Securities Act
or cause the offering of the Preferred Shares and the Warrants to be integrated
with any other offering of securities by the Company for the purpose of any
stockholder approval provision application to the Company or its securities.
 
F.   Securities Laws Disclosure; Publicity. The Company shall not publicly
disclose the name of a Buyer, or issue a press release or otherwise make a
public statement or a filing with the Commission or any regulatory agency or
trading market regarding the transactions contemplated by this Agreement or the
fact that the Buyer is an investor in the Company without the prior consent of
such Buyer in each instance (each a “Public Statement”), unless such Public
Statement is required by applicable law or the rules of any securities exchange
on which the securities of the Company are then listed or traded, in which case
the Buyer shall have the right to review such Public Statement at least 96 hours
in advance of the proposed release or filing and the Buyer may not unreasonably
withhold or delay its consent to such release or filing. No Buyer may make a
Public Statement without the prior consent of the Company, such consent not to
be unreasonably withheld or delayed.
 
G.   Limitation on Conversion/Exercise. Leisurecorp hereby agrees that,
notwithstanding anything contained in the Certificate of Designation and in the
Warrant issued to Leisurecorp to the contrary, Leisurecorp shall not (i)
convert, or attempt to convert, any of the Pledged Shares or (ii) exercise, or
attempt to exercise, any Pledged Warrant. For the purposes hereof, the term
“Pledged Shares” shall mean those shares of Preferred Stock that are at that
time still subject to the Security Agreement, and the term “Pledged Warrant”
shall mean any warrant agreement that is at that time still subject to the
Security Agreement. For the purposes of clarification, shares of Preferred Stock
and Warrants that are, from time to time, released under the Security Agreement
and delivered to Leisurecorp shall no longer be deemed to be Pledged Shares of
Pledged Warrants and may, after their release from the Security Agreement, be
converted and exercised in accordance with their terms.
 
13

--------------------------------------------------------------------------------

 
H.   Additional Listings. In the event that the Note is paid in full in
accordance with its terms, the Company shall use its best efforts to cause its
Common Stock to be listed on (i) the Nasdaq Global Market or the Nasdaq Capital
Market on or before March 31, 2008, and (ii) the Dubai International Financial
Exchange by September 30, 2008.
 
I.   Additional Executive Officers. The Company shall use its best efforts to
hire a new Chief Operating Officer and a new Chief Financial Officer (the “New
Officers”) by no later than December 31, 2007. The New Officers, and the terms
of their employment shall be acceptable to, and approved by a majority of the
Board of Directors including, if required by the Certificate of Designation, by
at least one of the Reviewing Preferred Directors (as such term is defined in
the Certificate of Designation).
 
V.
CLOSING
 
Subject to the satisfaction or waiver of the closing conditions in Article VI
and VII and the deliveries referenced in Article I.C, the Closing shall take
place at the offices of the Company at 5500 152nd Street, Suite 214, Surrey,
B.C. V3S 5J9 Canada, on the date of this Agreement immediately following the
execution and delivery of this Agreement, or at such other times as agreed to by
all Buyers and the Company. The date on which the Closing occurs is referred to
in this Agreement as the “Closing Date.”
 
VI.
CONDITIONS TO THE COMPANY’S OBLIGATIONS
 
Each Buyer understands that the Company’s obligation to sell the Preferred
Shares and issue the Warrants on the Closing Date to such Buyer pursuant to this
Agreement is conditioned upon:
 
A.   Payment by each Buyer to Company of the purchase price in the manner
specified in Article I. B., including the execution and delivery by (i)
Leisurecorp of the Note and (ii) GWSE of the Debt Exchange Agreement.
 
B.   Leisurecorp executing and delivering to the Company the Security Agreement.
 
C.   The representations and warranties of such Buyer contained in this
Agreement shall be true and correct as of the Closing Date as if made on the
Closing Date (except for representations and warranties which, by their express
terms, speak as of and relate to a specified date, in which case such
representations and warranties shall be true and correct as of such specified
date) and the Buyer shall have performed, in all material respects, all
covenants and agreements of Buyer required to be performed by it pursuant to
this Agreement on or before the Closing Date.
 
14

--------------------------------------------------------------------------------

 
D.   There shall not be in effect any law or order, ruling, judgment or writ of
any court or public or governmental authority or self regulatory organization
restraining, enjoining or otherwise prohibiting any of the transactions
contemplated by this Agreement.
 
VII.
CONDITIONS TO BUYERS’ OBLIGATIONS
 
The Company understands that Buyers’ obligation to purchase the Securities on
the Closing Date pursuant to this Agreement is conditioned upon:
 
A.   Issuance by the Company of the Preferred Shares and the Warrants (I/N/O
Buyers or I/N/O Buyers’ nominee) in the amounts and denominations set forth in
Article I.B.
 
B.   The representations and warranties of the Company contained in this
Agreement shall be true and correct on the Closing Date as if made on the
Closing Date (except for representations and warranties which, by their express
terms, speak as of and relate to a specified date, in which case such
representations and warranties shall be true and correct as of such specified
date) and the Company shall have performed, in all respects, all covenants and
agreements of the Company required to be performed by it pursuant to this
Agreement on or before the Closing Date.
 
C.   The Chief Executive Officer of the Company shall have delivered a
certificate to the Buyers, dated as of the Closing Date, certifying that all
conditions set forth in this Article VII have been fulfilled.
 
D.   There shall not be in effect any law or order, ruling, judgment or writ of
any court or public or governmental authority or self regulatory organization
restraining, enjoining or otherwise prohibiting any of the transactions
contemplated by this Agreement.
 
E.   Receipt by Buyers of a legal opinion, in a form reasonably satisfactory to
Buyers, from each of the Company’s corporate counsel and the Company’s Nevada
counsel.
 
VIII.
SURVIVAL; INDEMNIFICATION
 
The representations, warranties and covenants made by each of the Company and
each Buyer in this Agreement, the annexes, schedules and exhibits hereto and in
each instrument, agreement and certificate entered into and delivered by them
pursuant to this Agreement shall survive the Closing and the consummation of the
transactions contemplated hereby. In the event of a breach or violation of any
of such representations, warranties or covenants, the party to whom such
representations, warranties or covenants have been made shall have all rights
and remedies for such breach or violation available to it under the provisions
of this Agreement or otherwise, whether at law or in equity, irrespective of any
investigation made by or on behalf of such party on or prior to the Closing
Date.
 
15

--------------------------------------------------------------------------------

 
IX.
GOVERNING LAW; JURISDICTION
 
This Agreement shall be governed by and interpreted in accordance with the laws
of the State of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.
 
X.
COUNTERPARTS; EXECUTION
 
This Agreement may be executed in two (2) or more counterparts, each of which
when so executed and delivered shall be an original, but both of which
counterparts shall together constitute one and the same instrument. A facsimile
transmission of this signed Agreement shall be legal and binding on all parties
hereto.
 
XI.
HEADINGS
 
The headings of this Agreement are for convenience of reference and shall not
form part of, or affect the interpretation of, this Agreement.
 
XII.
SEVERABILITY
 
This Agreement shall be deemed severable, and the invalidity or unenforceability
of any term or provision hereof shall not affect the validity or enforceability
of this Agreement or of any other term or provision hereof. Furthermore, in lieu
of any such invalid or unenforceable term or provision, the parties hereto
intend that there shall be added as a part of this Agreement a provision as
similar in terms to such invalid or unenforceable provision as may be possible
and be valid and enforceable.
 
XIII.
ENTIRE AGREEMENT; REMEDIES, AMENDMENTS AND WAIVERS
 
This Agreement, the Warrants, the Note, the Security Agreement, and the Debt
Exchange Agreement constitute the entire agreement between the parties hereto
pertaining to the subject matter hereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, of such
parties. No supplement, modification or waiver of this Agreement shall be
binding unless executed in writing by both parties. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
 
16

--------------------------------------------------------------------------------

 
XIV.
NOTICES
 
Except as may be otherwise provided herein, any notice or other communication or
delivery required or permitted hereunder shall be in writing and shall be
delivered personally, or sent by telecopier machine or by a nationally
recognized overnight courier service, and shall be deemed given when so
delivered personally, or by telecopier machine or overnight courier service as
follows:
 
A.   if to the Company, to:

GPS Industries, Inc.
Suite 214
5500 152nd Street
Surrey, British Columbia
Canada V3S 5J9
Attn: Chief Executive Officer
Telecopier: (604) 576-7460

with a copy to:

Troy & Gould
1801 Century Park East, 26th Floor
Los Angeles, California 90067
ATTN: David L. Ficksman, Esq.
Telecopier: (310) 789-1490
 
B.   If to a Buyer, to the address set forth on the Buyer’s signature page.
 
The Company or any Buyer may change the foregoing address by notice given
pursuant to this Article XIV.
 
XV.
ASSIGNMENT
 
This Agreement shall not be assignable by either of the parties hereto without
the prior written consent of the other party, and any attempted assignment
contrary to the provisions hereby shall be null and void; provided, however,
that any Buyer may assign its rights and obligations hereunder, in whole or in
part, to any affiliate of such Buyer.
 
XVI.
REMEDIES CUMULATIVE
 
17

--------------------------------------------------------------------------------

 
In the event that the Company fails to observe or perform any covenant or
agreement to be observed or performed under this Agreement, any Buyer may
proceed to protect and enforce its rights by suit in equity or action at law,
whether for specific performance of any term contained in this Agreement or for
an injunction against the breach of any such term or in aid of the exercise of
any power granted in this Agreement or to enforce any other legal or equitable
right, or to take any one or more of such actions, without being required to
post a bond. None of the rights, powers or remedies conferred under this
Agreement shall be mutually exclusive, and each such right, power or remedy
shall be cumulative and in addition to any other right, power or remedy, whether
conferred by this Agreement or now or hereafter available at law, in equity, by
statute or otherwise.
 
18

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to be
executed and delivered on the date first above written.
 
 

        “COMPANY”        
GPS Industries, Inc.,
a Nevada corporation
        By:      

--------------------------------------------------------------------------------

Name:   Title:

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
BUYER SIGNATURE PAGES FOLLOW]
 
19

--------------------------------------------------------------------------------

 

        “BUYER”         LEISURECORP LLC         By:      

--------------------------------------------------------------------------------

Name:   Title:

 
Investment Amount: $10,000,000
Number of Preferred Shares: 1,000,000
Number of Warrant Shares: 40,983,607

Address for Notice:
David Spencer
Chief Executive Officer
Istithmar Leisure
P.O. Box 17000, Dubai, UAE
Telephone: +9714-3687630
Telecopy: +9714-3687654
E-mail: David.Spencer@istithmar.ae

[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

20

--------------------------------------------------------------------------------

 

      “BUYER”         GREAT WHITE SHARK ENTERPRISES, INC.         By:      

--------------------------------------------------------------------------------

Name:   Title:

 
Investment Amount: $2,500,000 cash
Number of Preferred Shares: 250,000
Number of Warrant Shares: 10,245,902

Address for Notice:
Great White Shark Enterprises, Inc.
501 North A1A, Jupiter, FL 33477
Attn: Bart Collins
Telephone: (561) 743-8818
Telecopy: (561) 743-8831
E-mail: Bart.Collins@gwse.com

[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

21

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DISCLOSURE SCHEDULES
 
These disclosure schedules (these “Schedules”) are furnished by GPS Industries,
Inc., a Nevada corporation (the “Company”), pursuant to the Securities Purchase
Agreement dated as of May 8, 2007 (the “Purchase Agreement”), by and among the
Company and the Buyers identified on the signatures pages thereto.
 
Nothing in the Schedules constitutes an admission of any liability or obligation
of the Company to any third party, nor an admission to any third party against
the Company’s interests. Unless otherwise stated, all statements made herein are
made as of the date of execution of the Purchase Agreement. The Schedules are
qualified in their entirety by reference to specific provisions of the Purchase
Agreement. The disclosures in these Schedules are deemed disclosures against the
representations and warranties in the section of the Purchase Agreement to which
they expressly relate and to no other representation or warranty in the Purchase
Agreement.
 
The representations and warranties made by the Company in the Purchase Agreement
are qualified by, and subject to the exceptions noted in, the information set
forth in these Schedules. The inclusion or disclosure of any item or information
in the Schedules shall not be construed as an admission that such item or
information is material to the Company, and any inclusion in the Schedules shall
expressly not be deemed to constitute an admission, or otherwise imply, that any
such item or information is material or creates measures for materiality for the
purposes of the Purchase Agreement.
 
Headings have been inserted on the sections of the Schedules for convenience of
reference only and shall to no extent have the effect of amending or changing
the express description of the sections as set forth in the Purchase Agreement.
Capitalized terms used herein but not otherwise defined shall have the meanings
set forth in the Purchase Agreement.
 
Schedule C    Capitalization
 
(i)  Warrants to purchase 103,954,945 shares of Common Stock are currently
issued and outstanding.
 
The Company has entered into an arrangement with GWSE (the “GWSE Purchase Order
Facility”) for purchase order inventory financing whereby GWSE advances funds on
signed purchase orders, secured by the contract inventory and receivable. These
advances bear interest at 18% per annum. In addition, as additional
consideration for the advances, the Company has agreed to issue to GWSE shares
of Common Stock at the rate of 100,000 shares per $250,000 advanced, adjusted
proportionately for the actual contract advance. As of March 30, 2007, the
Company was committed to issue 659,034 shares under this arrangement, although
the actual issuances have not taken place and will not take place until the
repayment of the advances.
 
On November 5, 2006 the Company was notified that its obligation to pay $2,000
of fees for services rendered to an advisor involved in the recent UK patent
litigation has become due and owing. Accordingly, the Company is obligated to
issue shares for the $2,000 obligation, by issuing 32,258 shares at a price of
$0.062 per share.
 
22

--------------------------------------------------------------------------------

 
(ii)   The following warrants and options will be outstanding immediately
following the Closing:
 

Outstanding Warrants
 
Expiry Date
 
Exercise
Price
 
Number of Shares
                 
Convertible Preferred Series A
             
- Warrant conversion, 3yr term
   
Expires Aug 3 2007
 
$
0.167
   
880,281
 
- Warrant conversion 3yr term
   
Expires Oct 27, 2007
 
$
0.124
   
592,978
                       
Other Warrants
                   
Cameron L. Truesdell Warrants For $200,000 Common Shares
           
2,857,143 common shs x .25%
   
Expires Aug 24, 2007
 
$
0.10
   
714,285
                       
Shaar Fund
   
Expires Oct 29, 2007
 
$
0.32
   
200,000
 
Hansen Inc.
   
Expires Jun/08
 
$
0.05
   
1,000,000
 
Hansen Inc. - Dec. 27, 2004 LOC renewal
   
Expires Dec/09
 
$
0.05
   
500,000
 
Hansen Inc. - March 14, 2005 LOC renewal
   
Expires Mar/08
 
$
0.10
   
1,000,000
 
Hansen Inc. - October 2005 LOC renewal
   
Expires Sep/08
 
$
0.10
   
1,000,000
 
Windsor Capital Finance
   
Expires Mar/09
 
$
0.06
   
250,000
 
Windsor Capital Finance
   
Expires Mar/09
 
$
0.07
   
250,000
 
Windsor Capital Finance
   
Expires Mar/09
 
$
0.09
   
500,000
 
Doug Wood
   
Expires March 23/09
 
$
0.15
   
666,667
 
Norton Lane Advisors
   
Expires May 3, 2008
 
$
0.20
   
2,250,000
 
Norton Lane Advisors
   
Expires May 3, 2008
 
$
0.30
   
2,350,000
 
JMS Capital Investors With Warrants
   
 
             
WWG Trust #13
   
Expires Dec/07
 
$
0.15
   
500,000
 
Great White Shark Enterprises Loan For $3,000,000
           
Warrants Owing Per Agmt, 3 Yr Term
   
Expires Dec/07
 
$
0.15
   
2,000,000
 
3 Year Warrants issued to Agent Demetrios Tsouvelekakis
   
Expires Jun/08
 
$
0.25
   
2,187,500
 

 
23

--------------------------------------------------------------------------------

 
3 Year Warrants issued to Agent Blue Capital Inc.
   
Expires Jun/08
 
$
0.18
   
1,640,625
 
3 Year Warrants issued to Agent Blue Capital Inc.
   
Expires Jun/08
 
$
0.12
   
928,571
 
3 Year Warrants issued to Lionheart Associates
   
Expires Sep/08
 
$
0.25
   
324,000
 
3 Year Warrants issued to Ocean Avenue Advisors
   
Expires Sep/08
 
$
0.25
   
216,000
                                             
NIR Warrants @ $0.25 (Subject to Anti-dilution provisions)
           
- 1st Tranche
   
Expires Sep 20, 2010
 
$
0.25
   
3,000,000
 
- 2nd Tranche
   
Expires Oct 28, 2010
 
$
0.25
   
1,500,000
 
- 3rd Tranche
   
Expires Dec 9, 2010
 
$
0.25
   
1,500,000
       
 
                                   
Granted on payout of Convertible Notes
   
Expires Nov 6, 2011
 
$
0.122
   
3,000,000
       
 
             
Warrants Issued to Buyers/Directors
   
 
             
Leisurecorp LLC
   
Expires Dec 29, 2011
 
$
0.122
   
40,983,607
 
Great White Shark Enterprises
   
Expires Dec 29, 2011
 
$
0.122
   
18,901,579
 
Doug Wood
   
Expires Dec 29, 2011
 
$
0.122
   
12,295,082
 
Bob Silzer Sr.
   
Expires Dec 29, 2011
 
$
0.122
   
3,073,770
 
Great White Shark Enterprises, Inc.
   
Expires May 8, 2012
 
$
0.122
   
10,245,902
 
Leisurecorp LLC
   
Expires May 8, 2012
 
$
0.122
   
40,983,607
       
 
             
Total Outstanding Warrants
   
 
         
155,434,453
       
 
             
Stock Options Outstanding
   
 
                                   
Issued Oct. 10, 2003
   
580,000
 
$
0.100
       
Issued Dec 21, 2005
   
6,010,000
 
$
0.05 - $0.08
       
Issued September 2006
   
2,700,000
 
$
0.05 - $0.07
       
Issued December 2006
   
15,000,000
 
$
0.074
                             
Total Outstanding Options
               
24,290,000
 

 
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Schedule H   Litigation
 
On February 5, 2007 David Stratton filed a lawsuit against the Company in the
Supreme Court of British Columbia, Vancouver, Canada. Mr. Stratton entered into
a written employment agreement with the Company on June 12, 2006 pursuant to
which Mr. Stratton was employed as our Vice President, Sales. The employment
agreement had a three-year term, renewable each year. Under the employment, Mr.
Stratton was entitled to an annual base salary of CDN $150,000, options to
purchase up to 1,500,000 shares of common stock at an exercise price of $0.05
per share, a signing bonus of 300,000 shares of common stock, certain bonuses
(including bonuses based on gross sales), and sales commissions. On November 8,
2006, Mr. Stratton’s employment was terminated. Mr. Stratton has set forth his
claims in the Statement of Claims, which claims principally consist of the
following: (i) a judgment equal to the amount of his base salary that he would
have earned, (ii) the option to purchase up to 1,500,000 shares of common stock
at an exercise price of $0.05 per share, (iii) the 300,000 signing bonus shares,
(iv) special damages and punitive damages, and (v) legal fees. The Company has
filed a statement of defense denying the allegations and claims in the lawsuit.
 
Schedule I   Tax Status
 
The Company has not filed tax returns in Canada. The Company has accumulated
significant losses in Canada and does not believe there is any amount payable to
the Canadian tax authorities.

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