EXHIBIT 10.1

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the
29th day of December 2006, by and among GPS Industries, Inc., a Nevada
corporation (the “Company”), and the persons set forth on the signature pages
hereto (“Investors”).

WHEREAS, concurrently with the execution of this Agreement, the Investors are
acquiring an aggregate of (i) 1,874,089 shares (the “Preferred Shares”) of the
Company’s Series B Convertible Preferred Stock, which are initially convertible
into 307,227,738 shares of the Company’s Common Stock as adjusted pursuant to
the terms of the Certificate of Designations for the Preferred Shares (the
“Conversion Shares”), (ii) 12,295,082 shares of Common Stock, and (iii) warrants
(the “Warrants”) to purchase up to 75,254,038 shares (the “Warrant Shares”) of
the Company’s common stock (subject to adjustment pursuant to the terms of the
Warrants);

WHEREAS, certain of the Investors may also purchase Additional Securities (as
such term is defined under Article I.C of the Securities Purchase Agreement,
entered into by the Company and the signatories thereto as of the date hereof)
pursuant to the Securities Purchase Agreement;

WHEREAS, the Investors and the Company desire to enter into this Agreement to
provide the Investors with certain rights relating to the registration of the
Company’s securities held by them;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1. DEFINITIONS. The following capitalized terms used herein have the following
meanings:

“AGREEMENT” means this Agreement, as amended, restated, supplemented, or
otherwise modified from time to time.

“COMMISSION” means the Securities and Exchange Commission, or any other federal
agency then administering the Securities Act or the Exchange Act.

“COMMON STOCK” means the common stock, of the Company.

“COMPANY” is defined in the preamble to this Agreement.

“CONVERSION SHARES” is defined in the preamble to this Agreement.

“DEMAND REGISTRATION” is defined in Section 2.1.1.

“DEMANDING HOLDER” is defined in Section 2.1.1.

 
 

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“EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder, all as the same
shall be in effect at the time.

“FORM S-3” is defined in Section 2.3.

“INDEMNIFIED PARTY” is defined in Section 4.3.

“INDEMNIFYING PARTY” is defined in Section 4.3.

“INVESTOR” is defined in the preamble to this Agreement.

“INVESTOR INDEMNIFIED PARTY” is defined in Section 4.1.

“MAXIMUM NUMBER OF SHARES” is defined in Section 2.1.4.

“NOTICES” is defined in Section 6.2.

“PIGGYBACK REGISTRATION” is defined in Section 2.2.1.

“PREFERRED SHARES” is defined in the preamble to this Agreement.

“REGISTER,” “REGISTERED” and “REGISTRATION” mean a registration affected by
preparing and filing a registration statement or similar document in compliance
with the requirements of the Securities Act, and the applicable rules and
regulations promulgated thereunder, and such registration statement becoming
effective.

“REGISTRABLE SECURITIES” mean all of (i) the Conversion Shares, (ii) Warrant
Shares, (iii) any Additional Securities (as such term is defined under Article
I. C. of the Securities Purchase Agreement) that may be acquired by the
Investors or their assignees, and (iv) the 12,295,082 shares of Common Stock
acquired by Robert C. Silzer, Sr. concurrently with the execution of this
Agreement. Registrable Securities shall also include any warrants, shares of
capital stock or other securities of the Company issued as a dividend or other
distribution with respect to or in exchange for or in replacement of such shares
of Common Stock. As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when: (a) a Registration Statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been sold, transferred, disposed
of or exchanged in accordance with such Registration Statement; (b) such
securities shall have been otherwise transferred, new certificates for them not
bearing a legend restricting further transfer shall have been delivered by the
Company and subsequent public distribution of them shall not require
registration under the Securities Act; or (c) such securities shall have ceased
to be outstanding.

“REGISTRATION STATEMENT” means a registration statement filed by the Company
with the Commission in compliance with the Securities Act and the rules and
regulations promulgated thereunder for a public offering and sale of Common
Stock (other than a registration statement on Form S-8, or its successors, or
such other form which does not include substantially the same information as
would be required in a form for the general registration of securities or would
not be available for the Registrable Securities).

 
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“SECURITIES ACT” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall be
in effect at the time.

“UNDERWRITER” means a securities dealer who purchases any Registrable Securities
as principal in an underwritten offering and not as part of such dealer’s
market-making activities.

"WARRANTS” is defined in the preamble to this Agreement.

“WARRANT SHARES” is defined in the preamble to this Agreement

2. REGISTRATION RIGHTS.

2.1. DEMAND REGISTRATION.

2.1.1. REQUEST FOR REGISTRATION. Subject to and in accordance with this
Agreement, at any time and from time to time on or after the date hereof, the
Investors or the transferees of Investors shall have the unlimited right to
demand the registration under the Securities Act of all or part of their
Registrable Securities (a “DEMAND REGISTRATION”), provided no demand shall be
made for less than 10 million Registrable Securities (as adjusted to equitably
reflect any stock splits, stock dividends, or any combinations or
reclassification of the Common Stock or similar transactions). Any demand for a
Demand Registration shall be in writing and shall specify the number of shares
of Registrable Securities proposed to be sold and the intended method(s) of
distribution thereof. The Company will notify all other holders of Registrable
Securities of the demand, and each holder of Registrable Securities who wishes
to include all or a portion of such holder’s Registrable Securities in the
Demand Registration (each such holder including shares of Registrable Securities
in such registration, a “DEMANDING HOLDER”) shall so notify the Company in
writing within twenty (20) days after the receipt by the holder of the notice
from the Company. Upon any such request, the Demanding Holders shall be entitled
to have their Registrable Securities included in the Demand Registration,
subject to Section 2.1.3 and the provisos set forth in Section 3.1.1.

2.1.2. UNDERWRITTEN OFFERING. If a majority-in-interest of the Demanding Holders
so elect and such holders so advise the Company as part of their written demand
for a Demand Registration, the offering of such Registrable Securities pursuant
to such Demand Registration shall be in the form of an underwritten offering. In
such event, the right of any holder to include its Registrable Securities in
such registration shall be conditioned upon such holder’s participation in such
underwriting and the inclusion of such holder’s Registrable Securities in the
underwriting to the extent provided herein. All Demanding Holders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the Underwriter or Underwriters
selected for such underwriting by a majority-in-interest of the holders
initiating the Demand Registration.

 
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2.1.3. REDUCTION OF OFFERING. If the managing Underwriter or Underwriters for a
Demand Registration that is to be an underwritten offering advises the Company
and the Demanding Holders in good faith in writing that the dollar amount or
number of shares of Registrable Securities which the Demanding Holders desire to
sell, taken together with all other shares of Common Stock or other securities
which the Company desires to sell and the shares of Common Stock, if any, as to
which registration has been requested pursuant to written contractual piggy-back
registration rights held by other shareholders of the Company who desire to
sell, exceeds the maximum dollar amount or maximum number of shares that can be
sold in such offering without adversely affecting the proposed offering price,
the timing, the distribution method, or the probability of success of such
offering (such maximum dollar amount or maximum number of shares, as applicable,
the “MAXIMUM NUMBER OF SHARES”), then the Company shall include in such
registration: (i) first, the Registrable Securities as to which Demand
Registration has been requested by the Demanding Holders (pro rata in accordance
with the number of shares of Registrable Securities which such Demanding Holders
have requested be included in such registration, regardless of the number of
shares held by such Demanding Holders) that can be sold without exceeding the
Maximum Number of Shares; (ii) second, to the extent that the Maximum Number of
Shares has not been reached under the foregoing clause (i), the shares of Common
Stock or other securities that the Company desires to sell that can be sold
without exceeding the Maximum Number of Shares; (iii) third, to the extent that
the Maximum Number of Shares has not been reached under the foregoing
clauses (i) and (ii), the shares of Common Stock for the account of other
persons that the Company is obligated to register pursuant to written
contractual arrangements with such persons and that can be sold without
exceeding the Maximum Number of Shares; and (iv) fourth, to the extent that the
Maximum Number of Shares have not been reached under the foregoing clauses (i),
(ii) and (iii), the shares of Common Stock that other shareholders desire to
sell that can be sold without exceeding the Maximum Number of Shares to the
extent that the Company, in its sole discretion, wishes to permit such sales
pursuant to this clause (iv).

2.1.4. WITHDRAWAL. If a majority-in-interest of the Demanding Holders disapprove
of the terms of any underwriting or are not entitled to include all of their
Registrable Securities in any offering, such majority-in-interest of the
Demanding Holders may elect to withdraw from such offering by giving written
notice to the Company and the Underwriter or Underwriters of their request to
withdraw prior to the effectiveness of the Registration Statement filed with the
Commission with respect to such Demand Registration.

2.2. PIGGY-BACK REGISTRATION.

2.2.1. PIGGYBACK RIGHTS. If at any time on or after the date hereof the Company
proposes to file a Registration Statement under the Securities Act with respect
to an offering of equity securities, or securities or other obligations
exercisable or exchangeable for, or convertible into, equity securities, by the
Company for its own account or for shareholders of the Company for their account
(or by the Company and by shareholders of the Company including, without
limitation, pursuant to Section 2.1), then the Company shall (x) give written
notice of such proposed filing to the holders of Registrable Securities as soon
as practicable but in no event less than twenty (20) days before the anticipated
filing date, which notice shall describe the amount and type of securities to be
included in such offering, the intended method(s) of distribution, and the name
of the proposed managing Underwriter or Underwriters, if any, of the offering,
and (y) offer to the holders of Registrable Securities in such notice the
opportunity to register the sale of such number of shares of Registrable
Securities as such holders may request in writing within ten (10) days following
receipt of such notice (a “PIGGY-BACK REGISTRATION”). The Company shall cause
such Registrable Securities to be included in such registration and shall use
commercially reasonable efforts to cause the managing Underwriter or
Underwriters of a proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggy-Back Registration to be included
on the same terms and conditions as any similar securities of the Company and to
permit the sale or other disposition of such Registrable Securities in
accordance with the intended method(s) of distribution thereof. All holders of
Registrable Securities proposing to distribute their securities through a
Piggy-Back Registration that involves an Underwriter or Underwriters shall enter
into an underwriting agreement in customary form with the Underwriter or
Underwriters selected for such Piggy-Back Registration.

 
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2.2.2. REDUCTION OF OFFERING. If the managing Underwriter or Underwriters for a
Piggy-Back Registration that is to be an underwritten offering advises the
Company and the holders of Registrable Securities in good faith in writing that
the dollar amount or number of shares of Common Stock which the Company desires
to sell, taken together with shares of Common Stock, if any, as to which
registration has been demanded pursuant to written contractual arrangements with
persons other than the holders of Registrable Securities hereunder, the
Registrable Securities as to which registration has been requested under this
Section 2.2, and the shares of Common Stock, if any, as to which registration
has been requested pursuant to the written contractual piggy-back registration
rights of other shareholders of the Company, exceeds the Maximum Number of
Shares, then the Company shall include in any such registration:

(i) If the registration is undertaken for the Company’s account: (A) first, the
shares of Common Stock or other securities that the Company desires to sell that
can be sold without exceeding the Maximum Number of Shares; (B) second, to the
extent that the Maximum Number of Shares has not been reached under the
foregoing clause (A), the Registrable Securities as to which registration has
been requested under this Section 2.2 (pro rata in accordance with the number of
shares of Registrable Securities and securities each holder has actually
requested to be included in such registration, regardless of the number of
shares of Common Stock with respect to which such persons have the right to
request such inclusion) that can be sold without exceeding the Maximum Number of
Shares; and (c) to the extent that the Maximum Number of Shares has not been
reached under the foregoing clauses (A) and (B), the shares of Common Stock as
to which registration has been requested pursuant to written contractual
piggy-back registration rights of other security holders (pro rata in accordance
with the number of shares such person has actually requested to be included in
such registration, regardless of the number of shares of Common Stock with
respect such person has the right to request inclusion).

(ii) If the registration is a “demand” registration undertaken at the demand of
persons other than the holders of Registrable Securities pursuant to written
contractual arrangements with such persons, (A) first, the shares of Common
Stock for the account of the demanding persons that can be sold without
exceeding the Maximum Number of Shares; (B) second, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clause (A),
the shares of Common Stock or other securities that the Company desires to sell
that can be sold without exceeding the Maximum Number of Shares; and (C) third,
to the extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (A) and (B), the Registrable Securities as to which
registration has been requested under this Section 2.2 (pro rata in accordance
with the number of shares such person has actually requested to be included in
such registration, regardless of the number of shares of Common Stock with
respect such person has the right to request inclusion); and (D) fourth, to the
extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (A), (B) and (C), the shares of Common Stock, if any, as to
which registration has been requested pursuant to written contractual piggy-back
registration rights which other shareholders desire to sell that can be sold
without exceeding the Maximum Number of Shares.

 
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2.2.3. WITHDRAWAL. Any holder of Registrable Securities may elect to withdraw
such holder’s request for inclusion of Registrable Securities in any Piggy-Back
Registration by giving written notice to the Company of such request to withdraw
prior to the effectiveness of the Registration Statement. The Company may also
elect to withdraw a registration statement at any time prior to the
effectiveness of the Registration Statement without thereby incurring any
liability to the holders of Registrable Securities. Notwithstanding any such
withdrawal, the Company shall pay all expenses incurred by the holders of
Registrable Securities in connection with such Piggy-Back Registration as
provided in Section 3.3.

2.3. REGISTRATIONS ON FORM S-3. The holders of Registrable Securities may at any
time and from time to time, request in writing that the Company register the
resale of any or all of such Registrable Securities on Form S-3 or any similar
short-form registration which may be available at such time (“FORM S-3”);
PROVIDED, HOWEVER, that the Company shall not be obligated to effect such
request through an underwritten offering. Upon receipt of such written request,
the Company will promptly give written notice of the proposed registration to
all other holders of Registrable Securities, and, as soon as practicable
thereafter, effect the registration of all or such portion of such holder’s or
holders’ Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other holder or holders
joining in such request as are specified in a written request given within
twenty (20) days after receipt of such written notice from the Company;
PROVIDED, HOWEVER, that the Company shall not be obligated to effect any such
registration pursuant to this Section 2.3: (i) if Form S-3 is not available for
such offering; or (ii) if the holders of the Registrable Securities, together
with the holders of any other securities of the Company entitled to inclusion in
such registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public of less than $250,000.
Registrations effected pursuant to this Section 2.3 shall not be counted as
Demand Registrations effected pursuant to Section 2.1.

3. REGISTRATION PROCEDURES.

3.1. FILINGS; INFORMATION. Whenever the Company is required to effect the
registration of any Registrable Securities pursuant to Section 2, the Company
shall use its best efforts to effect the registration and sale of such
Registrable Securities in accordance with the intended method(s) of distribution
thereof as expeditiously as practicable, and in connection with any such
request:

 
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3.1.1. FILING REGISTRATION STATEMENT. The Company shall, as expeditiously as
possible and in any event within seventy-five (75) days after receipt of a
request for a Demand Registration pursuant to Section 2.1 or an S-3 registration
pursuant to Section 2.3, prepare and file with the Commission a Registration
Statement on any form for which the Company then qualifies or which counsel for
the Company shall deem appropriate and which form shall be available for the
sale of all Registrable Securities to be registered thereunder in accordance
with the intended method(s) of distribution thereof, and shall use its best
efforts to cause such Registration Statement to become and remain effective for
the period required by Section 3.1.3; PROVIDED, HOWEVER, that the Company shall
have the right to defer any Demand Registration for up to sixty (60) days, and
any Piggy-Back Registration for such period as may be applicable to deferment of
any demand registration to which such Piggy-Back Registration relates, in each
case if the Company shall furnish to the holders a certificate signed by the
Chief Executive Officer of the Company stating that, in the good faith judgment
of the Board of Directors of the Company, it would be materially detrimental to
the Company and its shareholders for such Registration Statement to be effected
at such time; PROVIDED FURTHER, HOWEVER, that the Company shall not have the
right to exercise the right set forth in the immediately preceding proviso more
than once in any 365-day period in respect of a Demand Registration hereunder.

3.1.2. COPIES. The Company shall, prior to filing a Registration Statement or
prospectus, or any amendment or supplement thereto, furnish without charge to
the holders of Registrable Securities included in such registration, and such
holders’ legal counsel, copies of such Registration Statement as proposed to be
filed, each amendment and supplement to such Registration Statement (in each
case including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such Registration Statement (including each
preliminary prospectus), and such other documents as the holders of Registrable
Securities included in such registration or legal counsel for any such holders
may request in order to facilitate the disposition of the Registrable Securities
owned by such holders.

3.1.3. AMENDMENTS AND SUPPLEMENTS. The Company shall prepare and file with the
Commission as expeditiously as possible such amendments, including
post-effective amendments, and supplements to such Registration Statement and
the prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective and in compliance with the provisions of the
Securities Act until all Registrable Securities and other securities covered by
such Registration Statement have been disposed of in accordance with the
intended method(s) of distribution set forth in such Registration Statement,
such securities have been withdrawn, or such securities may be sold without
volume restrictions pursuant to Rule 144(k).

 
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3.1.4. NOTIFICATION. After the filing of a Registration Statement, the Company
shall promptly, and in no event more than two (2) business days after such
filing, notify the holders of Registrable Securities included in such
Registration Statement of such filing, and shall further notify such holders
promptly and confirm such advice in writing in all events within two (2)
business days of the occurrence of any of the following: (i) when such
Registration Statement becomes effective; (ii) when any post-effective amendment
to such Registration Statement becomes effective; (iii) the issuance or
threatened issuance by the Commission of any stop order (and the Company shall
take all actions required to prevent the entry of such stop order or to remove
it if entered); and (iv) any request by the Commission for any amendment or
supplement to such Registration Statement or any prospectus relating thereto or
for additional information or of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of the securities covered by such
Registration Statement, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and promptly make
available to the holders of Registrable Securities included in such Registration
Statement any such supplement or amendment; except that before filing with the
Commission a Registration Statement or prospectus or any amendment or supplement
thereto, including documents incorporated by reference, the Company shall
furnish to the holders of Registrable Securities included in such Registration
Statement and to the legal counsel for any such holders, copies of all such
documents proposed to be filed sufficiently in advance of filing to provide such
holders and legal counsel with a reasonable opportunity to review such documents
and comment thereon, and the Company shall not file any Registration Statement
or prospectus or amendment or supplement thereto, including documents
incorporated by reference, to which such holders or their legal counsel shall
object.

3.1.5. STATE SECURITIES LAWS COMPLIANCE. The Company shall use commercially
reasonable efforts to (i) register or qualify the Registrable Securities covered
by the Registration Statement under such securities or “blue sky” laws of such
jurisdictions in the United States as the holders of Registrable Securities
included in such Registration Statement (in light of their intended plan of
distribution) may request and (ii) take such action necessary to cause such
Registrable Securities covered by the Registration Statement to be registered
with or approved by such other Governmental Authorities as may be necessary by
virtue of the business and operations of the Company and do any and all other
acts and things that may be necessary or advisable to enable the holders of
Registrable Securities included in such Registration Statement to consummate the
disposition of such Registrable Securities in such jurisdictions; PROVIDED,
HOWEVER, that the Company shall not be required to qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3.1.5 or subject itself to taxation in any such
jurisdiction.

3.1.6. AGREEMENTS FOR DISPOSITION. The Company shall enter into customary
agreements (including, if applicable, an underwriting agreement in customary
form) and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities. The
representations, warranties and covenants of the Company in any underwriting
agreement which are made to or for the benefit of any Underwriters, to the
extent applicable, shall also be made to and for the benefit of the holders of
Registrable Securities included in such registration statement. No holder of
Registrable Securities included in such registration statement shall be required
to make any representations or warranties in the underwriting agreement except,
if applicable, with respect to such holder’s organization, good standing,
authority, title to Registrable Securities, lack of conflict of such sale with
such holder’s material agreements and organizational documents, and with respect
to written information relating to such holder that such holder has furnished in
writing expressly for inclusion in such Registration Statement.

 
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3.1.7. COOPERATION. The principal executive officer of the Company, the
principal financial officer of the Company, the principal accounting officer of
the Company and all other officers and members of the management of the Company
shall cooperate fully in any offering of Registrable Securities hereunder, which
cooperation shall include, without limitation, the preparation of the
Registration Statement with respect to such offering and all other offering
materials and related documents, and participation in meetings with
Underwriters, attorneys, accountants and potential investors.

3.1.8. RECORDS. The Company shall make available for inspection by the holders
of Registrable Securities included in such Registration Statement, any
Underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other professional retained by any
holder of Registrable Securities included in such Registration Statement or any
Underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, as shall be necessary to enable them to exercise
their due diligence responsibility, and cause the Company’s officers, directors
and employees to supply all information requested by any of them in connection
with such Registration Statement.

3.1.9. OPINIONS AND COMFORT LETTERS. The Company shall furnish, at the request
of any holder requesting registration of Registrable Securities pursuant tot his
Agreement, on the date that such Registrable Securities are delivered to the
underwriters for sale in connection with a registration pursuant to this
Agreement, if such securities are being sold through underwriters, or, if
securities are not being sold through underwriters, on the date that the
Registration Statement with respect to such securities becomes effective, (i) an
opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
the underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the holders requesting registration of Registrable
Securities and (ii) a letter dated such date, from the independent certified
public accountants of the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the holders
requesting registration of Registrable Securities.

3.1.10. COMPLIANCE WITH LAWS; EARNINGS STATEMENT. The Company shall comply with
all applicable rules and regulations of the SEC and Make generally available to
its securityholders earning statements satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the end of any
twelve month period (or 90 days after the end of any twelve month period is a
fiscal year) (i) commencing a the end of any fiscal quarter in which Registrable
Securities are sold to underwriters in a firm commitment or best efforts
underwritten offering, and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company, after
the effective date of the Registration Statement, which statement shall cover
said 12-month period.

 
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3.1.11. LISTING. The Company shall cause all Registrable Securities included in
any registration to be listed on such exchanges or otherwise designated for
trading in the same manner as similar securities issued by the Company are then
listed or designated or, if no such similar securities are then listed or
designated, in a manner satisfactory to the holders of a majority of the
Registrable Securities included in such registration.

3.2. OBLIGATION TO SUSPEND DISTRIBUTION. Upon receipt of any notice from the
Company of the happening of any event of the kind described in
Section 3.1.4(iv), each holder of Registrable Securities included in any
registration shall immediately discontinue disposition of such Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such holder receives the supplemented or amended prospectus
contemplated by Section 3.1.4(iv), and, if so directed by the Company, each such
holder will deliver to the Company all copies, other than permanent file copies
then in such holder’s possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice.

3.3. REGISTRATION EXPENSES. The Company shall bear all costs and expenses
incurred in connection with any Demand Registration pursuant to Section 2.1, any
Piggy-Back Registration pursuant to Section 2.2, and any registration on
Form S-3 effected pursuant to Section 2.3, and all expenses incurred in
performing or complying with its other obligations under this Agreement, whether
or not the Registration Statement becomes effective, including, without
limitation: (i) all registration and filing fees; (ii) fees and expenses of
compliance with securities or “blue sky” laws (including fees and disbursements
of counsel in connection with blue sky qualifications of the Registrable
Securities); (iii) printing expenses; (iv) the Company’s internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees); (v) the fees and expenses incurred in connection with the listing of
the Registrable Securities as required by Section 3.1.11; (vi) National
Association of Securities Dealers, Inc. fees; (vii) fees and disbursements of
counsel for the Company and fees and expenses for independent certified public
accountants retained by the Company (including the expenses or costs associated
with the delivery of any opinions or comfort letters requested pursuant to
Section 3.1.9); (viii) the fees and expenses of any special experts retained by
the Company in connection with such registration and (ix) the fees and expenses
of one legal counsel selected by the holders of a majority-in-interest of the
Registrable Securities included in such registration. The Company shall have no
obligation to pay any underwriting discounts or selling commissions attributable
to the Registrable Securities being sold by the holders thereof, which
underwriting discounts or selling commissions shall be borne by such holders.

3.4. INFORMATION. The holders of Registrable Securities shall provide such
information as may reasonably be requested by the Company, or the managing
Underwriter, if any, in connection with the preparation of any Registration
Statement, including amendments and supplements thereto, in order to effect the
registration of any Registrable Securities under the Securities Act pursuant to
Section 2 and in connection with the Company’s obligation to comply with federal
and applicable state securities laws.

 
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4. INDEMNIFICATION AND CONTRIBUTION.

4.1. INDEMNIFICATION BY THE COMPANY. The Company shall indemnify and hold
harmless each Investor and each other holder of Registrable Securities, and each
of their respective officers, employees, affiliates, directors, partners,
members, attorneys and agents, and each person, if any, who controls an Investor
and each other holder of Registrable Securities (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) (each, an
“INVESTOR INDEMNIFIED PARTY”), from and against any expenses, losses, judgments,
claims, damages or liabilities, whether joint or several, arising out of or
based upon any untrue statement (or allegedly untrue statement) of a material
fact contained in any Registration Statement under which the sale of such
Registrable Securities was registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained in the Registration
Statement, or any amendment or supplement thereto, or arising out of or based
upon any omission (or alleged omission) to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation or alleged violation by the Company of the Securities Act, the
Exchange Act or the violation by the Company of any or any rule, law or
regulation (including state securities laws) relating to the offer and sale of
Registrable Securities; and the Company shall promptly reimburse the Investor
Indemnified Party (as such expenses are incurred) for any legal and any other
expenses reasonably incurred by such Investor Indemnified Party in connection
with investigating and defending any such expense, loss, judgment, claim,
damage, liability or action; PROVIDED, HOWEVER, that the Company will not be
liable in any such case to the extent that any such expense, loss, claim, damage
or liability arises out of or is based upon any untrue statement or allegedly
untrue statement or omission or alleged omission made in such Registration
Statement, preliminary prospectus, final prospectus, or summary prospectus, or
any such amendment or supplement, in reliance upon and in conformity with
information furnished to the Company, in writing, by such selling holder
expressly for use therein.

4.2. INDEMNIFICATION BY HOLDERS OF REGISTRABLE SECURITIES. Each selling holder
of Registrable Securities will, in the event that any registration is being
effected under the Securities Act pursuant to this Agreement of any Registrable
Securities held by such selling holder, indemnify and hold harmless the Company,
each of its directors and officers and each underwriter (if any), and each other
person, if any, who controls the Company or such underwriter within the meaning
of the Securities Act, against any losses, claims, judgments, damages or
liabilities, whether joint or several, insofar as such losses, claims,
judgments, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or allegedly untrue statement of a
material fact contained in any Registration Statement under which the sale of
such Registrable Securities was registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained in the
Registration Statement, or any amendment or supplement thereto, or arise out of
or are based upon any omission or the alleged omission to state a material fact
required to be stated therein or necessary to make the statement therein not
misleading, if the statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company by such selling
holder expressly for use therein, and shall reimburse the Company, its directors
and officers, and each such controlling person for any legal or other expenses
reasonably incurred by any of them in connection with investigation or defending
any such loss, claim, damage, liability or action. Each selling holder’s
indemnification obligations hereunder shall be several and not joint and shall
be limited to the amount of any net proceeds (after payment of any underwriting
fees, discounts, commissions or taxes) actually received by such selling holder.

 
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4.3. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after receipt by any
person of any notice of any loss, claim, damage or liability or any action in
respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such
person (the “INDEMNIFIED PARTY”) shall, if a claim in respect thereof is to be
made against any other person for indemnification hereunder, notify such other
person (the “INDEMNIFYING PARTY”) in writing of the loss, claim, judgment,
damage, liability or action; PROVIDED, HOWEVER, that the failure by the
Indemnified Party to notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability which the Indemnifying Party may have to
such Indemnified Party hereunder, except and solely to the extent the
Indemnifying Party is actually prejudiced by such failure. If the Indemnified
Party is seeking indemnification with respect to any claim or action brought
against the Indemnified Party, then the Indemnifying Party shall be entitled to
participate in such claim or action, and, to the extent that it wishes, jointly
with all other Indemnifying Parties, to assume control of the defense thereof
with counsel reasonably satisfactory to the Indemnified Party. After notice from
the Indemnifying Party to the Indemnified Party of its election to assume
control of the defense of such claim or action, the Indemnifying Party shall not
be liable to the Indemnified Party for any legal or other expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation; PROVIDED, HOWEVER, that in any action in
which both the Indemnified Party and the Indemnifying Party are named as
defendants, the Indemnified Party shall have the right to employ separate
counsel (but no more than one such separate counsel) to represent the
Indemnified Party and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees and expenses of
such counsel to be paid by such Indemnifying Party if counsel of such
Indemnified Party reasonably believes that a material conflict of interest is
likely to exist if the same counsel were to represent such Indemnified Party and
the Indemnifying Party. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, which consent shall not be unreasonably
withheld, consent to entry of judgment or effect any settlement of any claim or
pending or threatened proceeding in respect of which the Indemnified Party is or
could have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such judgment or settlement includes an unconditional
release of such Indemnified Party from all liability arising out of such claim
or proceeding.

4.4. CONTRIBUTION.

4.4.1. If the indemnification provided for in the foregoing Sections 4.1, 4.2
and 4.3 is unavailable to any Indemnified Party in respect of any loss, claim,
damage, liability or action referred to herein, then each such Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage, liability or action in such proportion as is appropriate to
reflect the relative fault of the Indemnified Parties and the Indemnifying
Parties in connection with the actions or omissions which resulted in such loss,
claim, damage, liability or action, as well as any other relevant equitable
considerations. The relative fault of any Indemnified Party and any Indemnifying
Party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such
Indemnified Party or such Indemnifying Party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

 
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4.4.2. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 4.4 were determined by PRO RATA allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding Section.

4.4.3. The amount paid or payable by an Indemnified Party as a result of any
loss, claim, damage, liability or action referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, no holder of Registrable
Securities shall be required to contribute any amount in excess of the dollar
amount of the net proceeds (after payment of any underwriting fees, discounts,
commissions or taxes) actually received by such holder from the sale of
Registrable Securities which gave rise to such contribution obligation. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not also guilty of such fraudulent misrepresentation.

5. REPORTS UNDER THE EXCHANGE ACT.

With a view to making available to the holders of Registrable Securities the
benefits of Rule 144 promulgated under the Securities Act and any other rule or
regulation of the SEC that may at any time permit a holder of Registrable
Securities to sell securities of the Company to the public without registration
on Form S-3, the Company agrees to:

5.1.1. make and keep public information available, as those terms are understood
and defined in SEC Rule 144;

5.1.2. file with the SEC in a timely manner all reports and other documents
required to the Company under the Securities Act and the Exchange Act; and

5.1.3. furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule144, the Securities
Act and the Exchange Act, or that it qualifies as a registrant whose securities
may be resold pursuant to Form S-3 (if it so qualifies), (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested in availing any Holder of any rule or regulation of the SEC
which permits the selling of any securities without registration or pursuant to
such form.

 
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6. MISCELLANEOUS.

6.1. ASSIGNMENT; NO THIRD PARTY BENEFICIARIES. This Agreement and the rights,
duties and obligations of the Company hereunder may not be assigned or delegated
by the Company in whole or in part. This Agreement and the rights, duties and
obligations of the holders of Registrable Securities hereunder may be freely
assigned or delegated by such holder of Registrable Securities in conjunction
with and to the extent of any transfer of Registrable Securities, or any portion
thereof, by any such holder. This Agreement and the provisions hereof shall be
binding upon and shall inure to the benefit of each of the parties and their
respective successors and the permitted assigns of the Investor or holder of
Registrable Securities or of any assignee of the Investor or holder of
Registrable Securities. This Agreement is not intended to confer any rights or
benefits on any persons that are not party hereto other than as expressly set
forth in Article 4 and this Section 6.1.

6.2. NOTICES. All notices, demands, requests, consents, approvals or other
communications (collectively, “NOTICES”) required or permitted to be given
hereunder or which are given with respect to this Agreement shall be in writing
and shall be personally served, delivered by reputable air courier service with
charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile,
addressed as set forth below, or to such other address as such party shall have
specified most recently by written notice. Notice shall be deemed given on the
date of service or transmission if personally served or transmitted by telegram,
telex or facsimile; PROVIDED, that if such service or transmission is not on a
business day or is after normal business hours, then such notice shall be deemed
given on the next business day. Notice otherwise sent as provided herein shall
be deemed given on the next business day following timely delivery of such
notice to a reputable air courier service with an order for next-day delivery.

To the Company:

GPS Industries, Inc.
5500 152nd St., Suite 214
Surrey, British Columbia
Canada V3S 5J9
Attention: Robert C. Silzer, Sr.
Telecopy: 604-576-7460

with a copy to:

Troy & Gould Professional Corporation
1801 Century Park East, 16th Floor
Los Angeles, California 90067
Attention: David L. Ficksman, Esq.
Telecopy: 310-789-1490

To Investor:

At the addresses set forth on the signature page hereto

 
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6.3. 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.

6.4. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, and all of which taken together shall
constitute one and the same instrument.

6.5. ENTIRE AGREEMENT. This Agreement (including all agreements entered into
pursuant hereto and all certificates and instruments delivered pursuant hereto
and thereto) constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede all prior and contemporaneous agreements,
representations, understandings, negotiations and discussions between the
parties, whether oral or written.

6.6. MODIFICATIONS AND AMENDMENTS. No amendment, modification or termination of
this Agreement shall be binding upon any party unless executed in writing by
such party.

6.7. TITLES AND HEADINGS. Titles and headings of sections of this Agreement are
for convenience only and shall not affect the construction of any provision of
this Agreement.

6.8. WAIVERS AND EXTENSIONS. Any party to this Agreement may waive any right,
breach or default which such party has the right to waive, PROVIDED that such
waiver will not be effective against the waiving party unless it is in writing,
is signed by such party, and specifically refers to this Agreement. Waivers may
be made in advance or after the right waived has arisen or the breach or default
waived has occurred. Any waiver may be conditional. No waiver of any breach of
any agreement or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof nor of any other agreement or provision
herein contained. No waiver or extension of time for performance of any
obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.

6.9. REMEDIES CUMULATIVE. In the event that the Company fails to observe or
perform any covenant or agreement to be observed or performed under this
Agreement, the Investor or any other holder of Registrable Securities 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.

 
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6.10. GOVERNING LAW. This Agreement shall be governed by, interpreted under, and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed within the State of York.

6.11. WAIVER OF TRIAL BY JURY. Each party hereby irrevocably and unconditionally
waives the right to a trial by jury in any action, suit, counterclaim or other
proceeding (whether based on contract, tort or otherwise) arising out of,
connected with or relating to this Agreement, the transactions contemplated
hereby, or the actions of the Company and the Investor in the negotiation,
administration, performance or enforcement hereof.

[Remainder of Page Intentionally Left Blank.]

 
 

 
 
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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to be executed and delivered by their duly authorized representatives as of the
date first written above.

 
GPS INDUSTRIES, INC.
A Nevada corporation
 
 
 
By:____________________________________      
Robert C. Silzer, Sr., President
 
 
INVESTORS:
   
 
Address:
 
C/o Istithmar PJSC
 
Emirates Tower - Level 4
 
Dubai, United Arab Emirates
 
LEISURECORP LLC
 
 
 
By:____________________________________
Name: __________________________________
Title: ___________________________________
 
Address:
 
Great White Shark Enterprises, Inc.
 
501 North A1A,
 
Jupiter, Florida 33477
 
 
GREAT WHITE SHARK ENTERPRISES, INC.
 
 
 
By:____________________________________
Name: __________________________________
Title: ___________________________________
 
Address:
 
C/o GPS Industries, Inc., Suite 214
 
5500 152nd Street
 
Surrey, British Columbia
 
Canada V3S 5J9
 
ROBERT C. SILZER, SR.
 
 
 
By:____________________________________
 
 
 
Address:
 
D. Wood Holdings LLC
 
1001 Courtyard Plaza,
 
Latrobe, Pennsylvania 15650
 
 
DOUGLAS WOOD
 
 
 
By:____________________________________
 

 
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