EXHIBIT 10.4
 
AGREEMENT
 
Agreement (this “Agreement”) dated as of November 8, 2006 by and among GPS
Industries, Inc., a Nevada corporation (the “Company”) and each of the note
purchasers set forth on the signature pages hereto (the “Buyers”) is made with
reference to the following:
 
A. The Company and Buyers have entered into a Securities Purchase Agreement
dated as of September 20, 2005 (the “Purchase Agreement”) pursuant to which the
Buyers purchased from the Company secured convertible notes of the Company (the
“Notes”) in the initial aggregate amount of $3,720,000 (including prepaid
interest) which aggregate amount (including unpaid interest) as of the date
hereof is $2,527,603.
 
B. The Company wishes to prepay the Notes and the Buyers are willing to accept
the prepayment in full satisfaction of the Notes and all other obligations of
Company to NIR of any nature including pursuant to the Purchase Agreement and
all documents executed in connection therewith.
 
C. Defined terms not expressly defined herein shall have the same meanings as
ascribed to them in the Purchase Agreement.
 
NOW THEREFORE, the Company and each of Buyers hereby agree as follows:
 
1.     Prepayment of the Notes. The Company agrees to pay, and the Buyers agree
to accept, in full satisfaction of all amounts owing under the Notes, including
outstanding principal amount and accrued and unpaid interest thereon, the amount
of $2,800,000 (the “Payoff Amount”). The parties acknowledge that the Payoff
Amount is less than the Optional Prepayment Amount set forth in Section 5.1 of
each of the Notes. In consideration of the Buyers accepting such reduced amount,
within five (5) business days from the payment of the Payoff Amount, the Company
shall deliver to the Buyers (pro rata in accordance with the amount being paid
to the applicable Buyer) five year warrants to purchase an aggregate of
3,000,000 shares of the Company’s common stock at an exercise price of $0.122
per share (the “New Warrants”). The New Warrants will be substantially in the
form of the warrants previously delivered to the Buyers (the “Existing
Warrants”) except that the New Warrants will contain customary piggyback
registration rights subject to priority to the New Investors (as defined below)
in the case of cutbacks. The Payoff Amount shall be paid to the Buyers by wire
transfer within five (5) business days from the execution of this Agreement by
the parties in accordance with instructions to be provided to the Company by the
Buyers.
 
2.     Release. Subject only to the payment of the Payoff Amount and delivery of
Warrants, each of the Buyers hereby agrees to release the Company and each
entity providing to the Company funds for the Payoff Amount (the “New
Investors”) and their respective officers, agents, employees, subsidiaries,
related entities, affiliates, divisions, successors, persons acting on their
behalf in connection with the matter set forth above and/or assigns, of and from
any and all claims, counterclaims, rights, demands, costs, damages, losses,
liabilities, actions and causes of action including attorneys’ fees and court
costs of every nature and description, whether known or unknown, suspected or
unsuspected, foreseen or unforeseen, real or imaginary, actual or potential, and
whether arising in tort or contract or at law or in equity, under common law,
state law, federal law or any other law, or otherwise, including but not limited
to the Purchase Agreement, the Notes, the Security Agreement, the Intellectual
Property Security Agreement, the Existing Warrants, the Guaranty and Pledge
Agreement and all documents and instruments executed pursuant thereto.
 
 
 

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3.     Representations and Warranties of the Company. The Company represents and
warrants to each Buyer that: (i) it has all requisite corporate power and
authority to enter into and perform this Agreement and to consummate the
transactions contemplated hereby; (ii) that the execution and delivery of this
Agreement has been duly authorized by this Company’s Board of Directors and no
further consent or authorization of Company or its Board of Directors is
required; and (iii) this Agreement constitutes the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms.
 
4.     Representations of Buyers. Each of Buyers represents or warrants to the
Company that: (i) such Buyer has all requisite power and authority to enter into
and perform this Agreement; (ii) the execution and delivery of this Agreement
and the consummation by such Buyer of the transactions contemplated hereby have
been duly authorized and no further consent or authorization of Buyer or its
Board of Directors, managers or its equity holders is required; (iii) this
Agreement constitutes the legal, valid and binding obligation of such Buyer
enforceable against such Buyer in accordance with its terms; and (iv) such Buyer
has not assigned, transferred, sold or pledged the Note issued to such Buyer and
such Buyer has the right and authority to accept in full payment of the
applicable Note the Prepayment Amount applicable thereto.
 
5.     Waiver. Without limiting the scope of the release hereunder, each Buyer
hereby expressly waives any claim that such Buyer may have pursuant to the
Purchase Agreement or the applicable Note, including, without limitation, any
requirement that Company provide such Buyer a notice with respect to any Future
Offerings or that the Company failed to honor any conversion requests.
 
6.     Release of Security; Delivery of Notes and Stock. Upon payment of Payoff
Amount and delivery of the New Warrants, the security interest granted to each
of Buyers with respect to any property of the Company shall be automatically
terminated and the Buyers shall promptly execute any and all documents required
and take any and all reasonable actions to effect such termination. In
connection herewith, each Buyer hereby appoints the Company its
attorney-in-fact, to file all termination statements with respect to any
security interest or lien over the Company’s assets or take such other action to
effect such termination or release of security interest. Additionally, the
Buyers shall promptly return to any pledgor of securities any stock pledged by
such pledgor in connection with the Notes pursuant to the Guaranty and Pledge
Agreement, and shall promptly deliver to the Company the original of the Notes
marked cancelled.
 
7.     Miscellaneous.
 
(a) This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
Agreement and shall become effective when counterparts have been signed by each
party and delivered to the other parties. This Agreement, once executed by a
party, may be delivered to any other party hereto by facsimile transmission of a
copy of this Agreement bearing the signature of the party so delivering this
Agreement.
 
 
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(b) Entire Agreement. This Agreement contains the entire understanding of the
parties with respect to the matters covered herein.
 
(c) Amendments. No provision of this Agreement may be amended or waived other
than by an instrument in writing signed by the parties hereto and by the New
Investors.
 
(d) Successors and Assignees. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and assigns. Neither the Company
nor any Buyer shall assign this Agreement or any rights or obligations hereunder
without the prior written consent of the other.
 
IN WITNESS WHEREOF, the undersigned Buyers and Company have caused this
Agreement to be duly executed as of the date first above written.
 
Dated: ___________________, 2006
GPS INDUSTRIES, INC.
 
By:                     
Robert C. Silzer, Sr.
Chief Executive Officer
 
 
BUYERS:
 
Dated: ___________________, 2006
AJW PARTNERS, LLC
 
By:          SMS GROUP, LLC
Its:                 
 
 
By:                 
Cory S. Ribotsky
Manager
 

 
 
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Dated: ___________________, 2006
AJW OFFSHORE, LTD.
 
By:          FIRST STREET MANAGER II, LLC
Its:            
 
 
By:            
Cory S. Ribotsky
Manager
 
Dated: ___________________, 2006
AJW QUALIFIED PARTNERS, LLC
 
By:          AJW MANAGER, LLC
Its:            
 
By:            
Cory S. Ribotsky
Manager
 
Dated: ___________________, 2006
NEW MILLENNIUM CAPITAL
PARTNERS II, LLC
 
By:          FIRST STREET MANAGER II, LLP
Its:            
 
 
By:            
Cory S. Ribotsky
Manager
 

 
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