Document:

GUARANTY AND PLEDGE AGREEMENT

                  GUARANTY AND PLEDGE AGREEMENT (this "Agreement"), dated as of
September 20, 2005, among GPS Industries, Inc., a Nevada corporation (the
"Company"), Robert Silzer (the "Pledgor"), and the pledgees signatory hereto and
their respective endorsees, transferees and assigns (collectively, the
"Pledgees").

                              W I T N E S S E T H:
                              - - - - - - - - - -

                  WHEREAS, pursuant to a Securities Purchase Agreement, dated
the date hereof, between Company and the Pledgees (the "Purchase Agreement"),
Company has agreed to issue to the Pledgees and the Pledgees have agreed to
purchase from Company certain of Company's Callable Secured Convertible Notes,
due three years from the date of issuance (the "Notes"), which are convertible
into shares of Company's Common Stock, par value $.001 per share (the "Common
Stock"). In connection therewith, Company shall issue the Pledgees certain
Common Stock purchase warrants (the "Warrants"); and

                  WHEREAS, as a material inducement to the Pledgees to enter
into the Purchase Agreement, the Pledgees have required and the Pledgor has
agreed (i) to unconditionally guarantee the timely and full satisfaction of all
obligations of the Company, whether matured or unmatured, now or hereafter
existing or created and becoming due and payable (the "Obligations") to the
Pledgees, their successors, endorsees, transferees or assigns under the
Transaction Documents (as defined in the Purchase Agreement) to the extent of
the Collateral (as defined in Section 5 hereof), and (ii) to grant to the
Pledgees, their successors, endorsees, transferees or assigns a security
interest in the number of shares of Common Stock currently owned by the Pledgor
as set forth below the Pledgor's signature on the signature page hereto
(collectively, the "Shares"), as collateral security for Obligations. Terms used
and not defined herein shall have the meaning ascribed to them in the Purchase
Agreement.

                  NOW, THEREFORE, in consideration of the foregoing recitals,
and the mutual covenants contained herein, the parties hereby agree as follows:

     1.  Guaranty.  To  the  extent  of  the  Collateral,   the  Pledgor  hereby
absolutely,  unconditionally and irrevocably  guarantees to the Pledgees,  their
successors,  endorsees, transferees and assigns the due and punctual performance
and  payment  of the  Obligations  owing  to  the  Pledgees,  their  successors,
endorsees, transferees or assigns when due, all at the time and place and in the
amount  and  manner  prescribed  in,  and  otherwise  in  accordance  with,  the
Transaction  Documents,  regardless of any defense or set-off counterclaim which
the Company or any other person may have or assert, and regardless of whether or
not the Pledgees or anyone on behalf of the Pledgees  shall have  instituted any
suit,  action or  proceeding  or  exhausted  its  remedies or taken any steps to
enforce any rights  against  the Company or any other  person to compel any such
performance  or observance or to collect all or part of any such amount,  either
pursuant to the provisions of the Transaction  Documents or at law or in equity,
and regardless of any other condition or contingency.  The Pledgor shall have no
obligation  whatsoever  to the Pledgees  beyond the  Collateral  pledged for the
Obligations set forth herein.

<PAGE>

     2. Waiver of Demand.  The Pledgor  hereby  unconditionally:  (i) waives any
requirement that the Pledgees,  in the event of a breach in any material respect
by the Company of any of its  representations  or warranties in the  Transaction
Documents,  first make demand upon,  or seek to enforce  remedies  against,  the
Company or any other person before demanding  payment of enforcement  hereunder;
(ii) covenants  that this  Agreement  will not be discharged  except by complete
performance of all the Obligations to the extent of the Collateral; (iii) agrees
that this Agreement shall remain in full force and effect without regard to, and
shall not be affected  or  impaired,  without  limitation,  by, any  invalidity,
irregularity  or  unenforceability  in  whole  or in  part  of  the  Transaction
Documents or any limitation on the liability of the Company  thereunder,  or any
limitation  on the  method  or  terms of  payment  thereunder  which  may now or
hereafter  be  caused or  imposed  in any  manner  whatsoever;  and (iv)  waives
diligence, presentment and protest with respect to, and notice of default in the
performance  or payment of any  Obligation by the Company under or in connection
with the Transaction Documents.

     3.  Release.  The  obligations,  covenants,  agreements  and  duties of the
Pledgor hereunder shall not be released,  affected or impaired by any assignment
or  transfer,  in  whole  or in  part,  of  the  Transaction  Documents  or  any
Obligation,  although made without  notice to or the consent of the Pledgor,  or
any  waiver by the  Pledgees,  or by any other  person,  of the  performance  or
observance  by the Company or the Pledgor of any of the  agreements,  covenants,
terms or conditions contained in the Transaction Documents, or any indulgence in
or the  extension  of the  time  or  renewal  thereof,  or the  modification  or
amendment  (whether  material or  otherwise),  or the  voluntary or  involuntary
liquidation,  sale or other  disposition  of all or any  portion of the stock or
assets  of  the  Company  or  the  Pledgor,  or  any  receivership,  insolvency,
bankruptcy,  reorganization, or other similar proceedings, affecting the Company
or the  Pledgor or any assets of the Company or the  Pledgor,  or the release of
any proper from any security for any  Obligation,  or the impairment of any such
property or security,  or the release or discharge of the Company or the Pledgor
from the performance or observance of any agreement, covenant, term or condition
contained in or arising out of the Transaction Documents by operation of law, or
the merger or consolidation of the Company, or any other cause,  whether similar
or dissimilar to the  foregoing.  Notwithstanding  the  foregoing,  the Pledgees
shall  release that number of Shares  ratably upon the  payment,  prepayment  or
conversion of the Notes. By way of example, if the number of Shares is 1,000,000
and the  aggregate  principal  amount of the Notes is  reduced  by 10%,  100,000
Shares shall be released from the pledge.

     4. Subrogation.

     (a) Unless and until  complete  performance  of all the  Obligations to the
extent of the  Collateral,  the Pledgor  shall not be  entitled to exercise  any
right of subrogation to any of the rights of the Pledgees against the Company or
any  collateral  security or guaranty  held by the  Pledgees  for the payment or
performance  of the  Obligations,  nor shall the Pledgor seek any  reimbursement
from the Company in respect of payments made by the Pledgor hereunder.

     (b) In the extent that the Pledgor shall become obligated to perform or pay
any sums  hereunder,  or in the event that for any reason the  Company is now or
shall hereafter become indebted to the Pledgor,  the amount of such sum shall at
all times be subordinate as to lien,  time of payment and in all other respects,
to the amounts  owing to the Pledgees  under the  Transaction  Documents and the
Pledgor shall not enforce or receive  payment  thereof until all Obligations due
to the Pledgees  under the  Transaction  have been  performed  or paid.  Nothing
herein  contained  is intended or shall be  construed to give to the Pledgor any
right of  subrogation  in or under the  Transaction  Documents,  or any right to
participate in any way therein, or in any right, title or interest in the assets
of the Pledgees.

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<PAGE>

     5.  Security.   As  collateral   security  for  the  punctual  payment  and
performance, when due, by the Company of all the Obligations, the Pledgor hereby
pledges  with,  hypothecates,  transfers  and assigns to the Pledgees all of the
Shares and all proceeds,  shares and other  securities  received,  receivable or
otherwise  distributed  in respect of or in exchange for the Shares,  including,
without  limitation,  any shares and other securities into which such Shares may
be convertible or exchangeable  (collectively,  the "Additional  Collateral" and
together with the Shares,  the  "Collateral").  Within five (5) business days of
the date of this  Agreement,  the  Pledgor  shall  deliver to the  Pledgees  the
certificate(s) representing the Shares, stamped with a bank medallion guarantee,
along with a stock transfer  power duly executed in blank by the Pledgor,  to be
held by the Pledgees as security.  Any Collateral  received by the Pledgor on or
after the date hereof shall be  immediately  delivered to the Pledgees  together
with any executed  stock  powers or other  transfer  documents  requested by the
Pledgees,  which  request  may be made at any time  prior  to the date  when the
Obligations shall have been paid and otherwise satisfied in full.

     6. Voting Power, Dividends, Etc. and other Agreements.

     (a) Unless and until an Event of Default (as set forth in Section 7 hereof)
has occurred, the Pledgor shall be entitled to:

     (i)  Exercise  all  voting  and/or  consensual  powers  pertaining  to  the
Collateral, or any part thereof, for all purposes;

     (ii) Receive and retain dividends paid with respect to the Collateral; and

     (iii)  Receive the benefits of any income tax  deductions  available to the
Pledgor as a shareholder of the Company.

     (b) The Pledgor  agrees that it will not sell,  assign,  transfer,  pledge,
hypothecate, encumber or otherwise dispose of the Collateral.

     (c) The  Pledgor and the Company  jointly  and  severally  agree to pay all
costs including all reasonable attorneys' fees and disbursements incurred by the
Pledgees in enforcing this Agreement in accordance with its terms.

     7. Default and Remedies.

     (a) For the purposes of this Agreement, "Event of Default" shall mean:

     (i)  default  in or under  any of the  Obligations  after  the  expiration,
without cure, of any applicable cure period;

                                       3

<PAGE>

     (ii) a  breach  in  any  material  respect  by  the  Company  of any of its
representations or warranties in the Transaction Documents; or

     (iii)  a  breach  in any  material  respect  by the  Pledgor  of any of its
representations or warranties in this Agreement.

     (b) the Pledgees shall have the following rights upon any Event of Default:

     (i) the rights and  remedies  provided  by the Uniform  Commercial  Code as
adopted  by the  State of New York (the  "UCC")  (as said law may at any time be
amended);

     (ii) the right to  receive  and retain all  dividends,  payments  and other
distributions of any kind upon any or all of the Collateral;

     (iii) the right to cause any or all of the  Collateral to be transferred to
its own name or to the name of its designee and have such  transfer  recorded in
any place or places deemed appropriate by the Pledgees; and

     (iv) the right to sell, at a public or private sale,  the Collateral or any
part thereof for cash, upon credit or for future delivery,  and at such price or
prices  in  accordance  with the UCC (as such law may be  amended  from  time to
time).  Upon any such sale the Pledgees shall have the right to deliver,  assign
and transfer to the purchaser thereof the Collateral so sold. The Pledgees shall
give the Pledgor not less than ten (10) days' written notice of its intention to
make any such sale.  Any such sale,  shall be held at such time or times  during
ordinary  business  hours and at such place or places as the Pledgees may fix in
the notice of such sale.  The  Pledgees  may adjourn or cancel any sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for the sale,  and such sale may be made at any time or place to which the
same  may be so  adjourned.  In  case  of any  sale  of all or any  part  of the
Collateral upon terms calling for payments in the future, any Collateral so sold
may be retained by the Pledgees until the selling price is paid by the purchaser
thereof, but the Pledgees shall incur no liability in the case of the failure of
such purchaser to take up and pay for the Collateral so sold and, in the case of
such failure,  such Collateral may again be sold upon like notice. The Pledgees,
however, instead of exercising the power of sale herein conferred upon them, may
proceed  by a suit or  suits  at law or in  equity  to  foreclose  the  security
interest and sell the Collateral,  or any portion  thereof,  under a judgment or
decree of a court or courts of competent  jurisdiction,  the Pledgor having been
given due notice of all such action.  The Pledgees shall incur no liability as a
result of a sale of the Collateral or any part thereof. All proceeds of any such
sale,  after  deducting the reasonable  expenses and reasonable  attorneys' fees
incurred in  connection  with such sale,  shall be applied in  reduction  of the
Obligations, and the remainder, if any, shall be paid to the Pledgor.

                                       4

<PAGE>

     8.  Application  of  Proceeds;   Release.  The  proceeds  of  any  sale  or
enforcement of or against all or any part of the Collateral,  and any other cash
or  collateral at the time held by the Pledgees  hereunder,  shall be applied by
the Pledgees  first to the payment of the  reasonable  costs of any such sale or
enforcement,  then to reimburse the Pledgees for any damages,  costs or expenses
incurred by the Pledgees as a result of an Event of Default, then to the payment
of the  principal  amount or stated valued (as  applicable)  of, and interest or
dividends  (as  applicable)  and any  other  payments  due in  respect  of,  the
Obligations.  The remainder,  if any,  shall be paid to the Pledgor.  As used in
this  Agreement,  "proceeds"  shall mean  cash,  securities  and other  property
realized in respect of, and distributions in kind of, the Collateral,  including
any thereof received under any reorganization, liquidation or adjustment of debt
of any issuer of securities included in the Collateral.

     9. Representations and Warranties.

          (a) The Pledgor hereby represents and warrants to the Pledgees that:

          (i) the Pledgor has full power and authority and legal right to pledge
     the  Collateral  to the  Pledgees  pursuant  to  this  Agreement  and  this
     Agreement constitutes a legal, valid and binding obligation of the Pledgor,
     enforceable in accordance with its terms.

          (ii) the  execution,  delivery and  performance  of this Agreement and
     other instruments contemplated herein will not violate any provision of any
     order or  decree  of any court or  governmental  instrumentality  or of any
     mortgage,  indenture, contract or other agreement to which the Pledgor is a
     party or by which the Pledgor and the Collateral may be bound, and will not
     result in the creation or imposition of any lien, charge or encumbrance on,
     or security  interest in, any of the Pledgor's  properties  pursuant to the
     provisions of such mortgage, indenture, contract or other agreement.

          (iii) the  Pledgor is the sole record and  beneficial  owner of all of
     the Shares; and

          (iv) the Pledgor owns the Collateral free and clear of all Liens.

          (b) The Company represents and warrants to the Pledgees that:

          (i) it has no knowledge that any of the  representations or warranties
     of the Pledgor herein are incorrect or false in any material respect;

          (ii)  all  of  the  Shares  were  validly   issued,   fully  paid  and
     non-assessable; and

          (iii) the Pledgor is the record holder of the Shares.

     10. No  Waiver;  No  Election  of  Remedies.  No failure on the part of the
Pledgees to exercise,  and no delay in  exercising,  any right,  power or remedy
hereunder  shall  operate as a waiver  thereof;  nor shall any single or partial
exercise by the  Pledgees of any right,  power or remedy  preclude  any other or
further  exercise  thereof or the exercise of any other right,  power or remedy.
The  remedies  herein  provided  are  cumulative  and are not  exclusive  of any
remedies  provided by law. In  addition,  the exercise of any right or remedy of
the Pledgees at law or equity or under this  Agreement  or any of the  documents
shall not be deemed to be an election of Pledgee's rights or remedies under such
documents or at law or equity.

                                       5

<PAGE>

     11.  Termination.  This Agreement  shall terminate on the date on which all
Obligations have been performed, satisfied, paid or discharged in full.

     12. Further  Assurances.  The parties hereto agree that,  from time to time
upon the written request of any party hereto, they will execute and deliver such
further documents and do such other acts and things as such party may reasonably
request in order fully to effect the  purposes of this  Agreement.  The Pledgees
acknowledge  that  they  are  aware  that  Pledgor  shall  have  no  obligations
whatsoever to the Pledgees beyond the Collateral pledged for the Obligations set
forth herein,  and no request for further  assurance may or shall  increase such
Obligations.

     13. Miscellaneous.

     (a) Modification.  This Agreement contains the entire understanding between
the  parties  with  respect  to  the  subject  matter  hereof  and  specifically
incorporates  all prior oral and  written  agreements  relating  to the  subject
matter  hereof.  No portion  or  provision  of this  Agreement  may be  changed,
modified,  amended,  waived,  supplemented,  discharged,  canceled or terminated
orally or by any course of dealing,  or in any manner other than by an agreement
in writing, signed by the party to be charged.

     (b)  Notice.  Any and all  notices or other  communications  or  deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of  transmission,  if
such  notice or  communication  is  delivered  via  facsimile  at the  facsimile
telephone  number  specified in this Section  prior to 6:30 p.m.  (New York City
time)  on a  Business  Day (as  defined  in the  Purchase  Agreement),  (ii) the
Business Day after the date of transmission,  if such notice or communication is
delivered  via  facsimile at the facsimile  telephone  number  specified in this
Agreement later than 6:30 p.m. (New York City time) on any date and earlier than
11:59 p.m.  (New York City time) on such date,  (iii) the Business Day following
the  date of  mailing,  if  sent  by  nationally  recognized  overnight  courier
services,  or (iv) upon  actual  receipt  by the  party to whom  such  notice is
required to be given. The address for such notices and  communications  shall be
as follows:

If to the Company:                          GPS Industries, Inc.
                                            Suite 214, 5500- 152nd Street
                                            Surrey, British Columbia V3S-5J9
                                            Attention: Chief Executive Officer
                                            Telephone:  (604) 576-7442
                                            Facsimile:

                                       6

<PAGE>

With copies to:                          Troy & Gould
                                         1801 Century Park East
                                         Los Angeles, CA 90067
                                         Attention:   David Ficksman, Esq.
                                         Telephone:  (310) 789-1290
                                         Facsimile:   (310) 789-1490

If to the Pledgor:                       Robert Silzer
                                         c/o GPS Industries, Inc.
                                         Suite 214, 5500- 152nd Street
                                         Surrey, British Columbia V3S-5J9
                                         Attention: Chief Executive Officer
                                         Telephone:  (604) 576-7442
                                         Facsimile: (604) 576-7460

If to the Pledgees:                      AJW Partners, LLC
                                         AJW Offshore, Ltd.
                                         AJW Qualified Partners, LLC
                                         New Millennium Capital Partners II, LLC
                                         1044 Northern Boulevard
                                         Suite 302
                                         Roslyn, New York  11576
                                         Facsimile No.:  (516) 739-7115
                                         Attention:  Corey S. Ribotsky

         With copies to:                 Ballard Spahr Andrews & Ingersoll, LLP
                                         1735 Market Street, 51st Fl.
                                         Philadelphia, PA 19103
                                         Facsimile No.: (215) 864-8999
                                         Attention:  Gerald J. Guarcini, Esquire

     (c)  Invalidity.  If any part of this Agreement is contrary to,  prohibited
by, or deemed invalid under applicable laws or regulations, such provision shall
be  inapplicable  and deemed  omitted to the extent so contrary,  prohibited  or
invalid,  but the remainder hereof shall not be invalidated thereby and shall be
given effect so far as possible.

     (d) Benefit of Agreement. This Agreement shall be binding upon and inure to
the parties hereto and their respective successors and assigns.

     (e) Mutual Agreement.  This Agreement embodies the arm's length negotiation
and mutual  agreement  between  the  parties  hereto and shall not be  construed
against either party as having been drafted by it.

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<PAGE>

     (f) New  York Law to  Govern.  This  Agreement  shall  be  governed  by and
construed and enforced in accordance  with the internal laws of the State of New
York without  regard to the  principals of conflicts of law thereof.  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 or that
such suit,  action or  proceeding  is improper.  Each party  hereby  irrevocably
waives  personal  service of process and consents to process being served in any
such suit,  action or  proceeding by mailing a copy thereof to such party at the
address in effect for  notices to it under this  agreement  and agrees that such
service  shall  constitute  good and  sufficient  service of process  and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Guaranty and Pledge Agreement to be duly executed by their respective authorized
persons as of the date first indicated above.

                                      GPS INDUSTRIES, INC.

                                      By:
                                         ---------------------------------------
                                          Robert Silzer
                                          Chief Executive Officer

                                      Pledgees:

                                      AJW PARTNERS, LLC
                                      By:      SMS Group, LLC

                                      By:
                                         ---------------------------------------
                                          Corey S. Ribotsky
                                          Manager

                                      AJW OFFSHORE, LTD.
                                      By:  First Street Manager II, LLC

                                      By:
                                         ---------------------------------------
                                          Corey S. Ribotsky
                                          Manager

                                      AJW QUALIFIED PARTNERS, LLC
                                      By:  AJW Manager, LLC

                                      By:
                                         ---------------------------------------
                                          Corey S. Ribotsky
                                          Manager

                                      NEW MILLENNIUM CAPITAL PARTNERS II, LLC
                                      By:  First Street Manager II, LLC

                                      By:
                                         ---------------------------------------
                                          Corey S. Ribotsky
                                          Manager

                    [Signatures Continued on Following Page]

                                       9

<PAGE>

                                      Pledgor:

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

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

                            Number of Shares subject to this pledge:

                            Date such Shares were acquired:SECURITY AGREEMENT

         SECURITY AGREEMENT (this "Agreement"), dated as of September 20, 2005,
by and among GPS Industries, Inc., a Nevada corporation ("Company"), and the
secured parties signatory hereto and their respective endorsees, transferees and
assigns (collectively, the "Secured Party").

                              W I T N E S S E T H:

         WHEREAS, pursuant to a Securities Purchase Agreement, dated the date
hereof, between Company and the Secured Party (the "Purchase Agreement"),
Company has agreed to issue to the Secured Party and the Secured Party has
agreed to purchase from Company certain of Company's Callable Secured
Convertible Notes, due three years from the date of issue (the "Notes"), which
are convertible into shares of Company's Common Stock, par value $.001 per share
(the "Common Stock"). In connection therewith, Company shall issue the Secured
Party certain Common Stock purchase warrants (the "Warrants"); and

         WHEREAS, in order to induce the Secured Party to purchase the Notes,
Company has agreed to execute and deliver to the Secured Party this Agreement
for the benefit of the Secured Party and to grant to it a first priority
security interest in certain property of Company to secure the prompt payment,
performance and discharge in full of all of Company's obligations under the
Notes and exercise and discharge in full of Company's obligations under the
Warrants.

         NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

1. Certain Definitions. As used in this Agreement, the following terms shall
have the meanings set forth in this Section 1. Terms used but not otherwise
defined in this Agreement that are defined in Article 9 of the UCC (such as
"general intangibles" and "proceeds") shall have the respective meanings given
such terms in Article 9 of the UCC.

(a) "Collateral" means the collateral in which the Secured Party is granted a
security interest by this Agreement and which shall include the following,
whether presently owned or existing or hereafter acquired or coming into
existence, and all additions and accessions thereto and all substitutions and
replacements thereof, and all proceeds, products and accounts thereof,
including, without limitation, all proceeds from the sale or transfer of the
Collateral and of insurance covering the same and of any tort claims in
connection therewith:

(i) All Goods of the Company, including, without limitations, all machinery,
equipment, computers, motor vehicles, trucks, tanks, boats, ships, appliances,
furniture, special and general tools, fixtures, test and quality control devices
and other equipment of every kind and nature and wherever situated, together
with all documents of title and documents representing the same, all additions
and accessions thereto, replacements therefor, all parts therefor, and all
substitutes for any of the foregoing and all other items used and useful in
connection with the Company's businesses and all improvements thereto
(collectively, the "Equipment"); and

<PAGE>

(ii) All Inventory of the Company; and

(iii) All of the Company's contract rights and general intangibles, including,
without limitation, all partnership interests, stock or other securities,
licenses, distribution and other agreements, computer software development
rights, leases, franchises, customer lists, quality control procedures, grants
and rights, goodwill, trademarks, service marks, trade styles, trade names,
patents, patent applications, copyrights, deposit accounts, and income tax
refunds (collectively, the "General Intangibles"); and

(iv) All Receivables of the Company including all insurance proceeds, and rights
to refunds or indemnification whatsoever owing, together with all instruments,
all documents of title representing any of the foregoing, all rights in any
merchandising, goods, equipment, motor vehicles and trucks which any of the same
may represent, and all right, title, security and guaranties with respect to
each Receivable, including any right of stoppage in transit; and

(v) All of the Company's documents, instruments and chattel paper, files,
records, books of account, business papers, computer programs and the products
and proceeds of all of the foregoing Collateral set forth in clauses (i)-(iv)
above.

(b) "Company" shall mean, collectively, Company and all of the subsidiaries of
Company, a list of which is contained in Schedule A, attached hereto.

(c) "Obligations" means all of the Company's obligations under this Agreement
and the Notes, in each case, whether now or hereafter existing, voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later decreased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from the Secured Party as a preference, fraudulent transfer or
otherwise as such obligations may be amended, supplemented, converted, extended
or modified from time to time.

(d) "UCC" means the Uniform Commercial Code, as currently in effect in the State
of New York.

2. Grant of Security Interest. As an inducement for the Secured Party to
purchase the Notes and to secure the complete and timely payment, performance
and discharge in full, as the case may be, of all of the Obligations, the
Company hereby, unconditionally and irrevocably, pledges, grants and
hypothecates to the Secured Party, a continuing security interest in, a
continuing first lien upon, an unqualified right to possession and disposition
of and a right of set-off against, in each case to the fullest extent permitted
by law, all of the Company's right, title and interest of whatsoever kind and
nature in and to the Collateral (the "Security Interest").

3. Representations, Warranties, Covenants and Agreements of the Company. The
Company represents and warrants to, and covenants and agrees with, the Secured
Party as follows:

                                       2

<PAGE>

(a) The Company has the requisite corporate power and authority to enter into
this Agreement and otherwise to carry out its obligations thereunder. The
execution, delivery and performance by the Company of this Agreement and the
filings contemplated therein have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company.
This Agreement constitutes a legal, valid and binding obligation of the Company
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditor's rights generally.

(b) The Company represents and warrants that it has no place of business or
offices where its respective books of account and records are kept (other than
temporarily at the offices of its attorneys or accountants) or places where
Collateral is stored or located, except as set forth on Schedule A attached
hereto;

(c) The Company is the sole owner of the Collateral (except for non-exclusive
licenses granted by the Company in the ordinary course of business), free and
clear of any liens, security interests, encumbrances, rights or claims, and is
fully authorized to grant the Security Interest in and to pledge the Collateral,
except as set forth on Schedule C. There is not on file in any governmental or
regulatory authority, agency or recording office an effective financing
statement, security agreement, license or transfer or any notice of any of the
foregoing (other than those that have been filed in favor of the Secured Party
pursuant to this Agreement) covering or affecting any of the Collateral, except
as set forth on Schedule C. So long as this Agreement shall be in effect, the
Company shall not execute and shall not knowingly permit to be on file in any
such office or agency any such financing statement or other document or
instrument (except to the extent filed or recorded in favor of the Secured Party
pursuant to the terms of this Agreement), except as set forth on Schedule C.

(d) No part of the Collateral has been judged invalid or unenforceable. No
written claim has been received that any Collateral or the Company's use of any
Collateral violates the rights of any third party. There has been no adverse
decision to the Company's claim of ownership rights in or exclusive rights to
use the Collateral in any jurisdiction or to the Company's right to keep and
maintain such Collateral in full force and effect, and there is no proceeding
involving said rights pending or, to the best knowledge of the Company,
threatened before any court, judicial body, administrative or regulatory agency,
arbitrator or other governmental authority.

(e) The Company shall at all times maintain its books of account and records
relating to the Collateral at its principal place of business and its Collateral
at the locations set forth on Schedule A attached hereto and may not relocate
such books of account and records or tangible Collateral unless it delivers to
the Secured Party at least 30 days prior to such relocation (i) written notice
of such relocation and the new location thereof (which must be within the United
States) and (ii) evidence that appropriate financing statements and other
necessary documents have been filed and recorded and other steps have been taken
to perfect the Security Interest to create in favor of the Secured Party valid,
perfected and continuing first priority liens in the Collateral.

                                       3

<PAGE>

(f) This Agreement creates in favor of the Secured Party a valid security
interest in the Collateral securing the payment and performance of the
Obligations and, upon making the filings described in the immediately following
sentence, a perfected first priority security interest in such Collateral
(except as set forth on Schedule C). Except for the filing of financing
statements on Form-1 under the UCC with the jurisdictions indicated on Schedule
B, attached hereto, no authorization or approval of or filing with or notice to
any governmental authority or regulatory body is required either (i) for the
grant by the Company of, or the effectiveness of, the Security Interest granted
hereby or for the execution, delivery and performance of this Agreement by the
Company or (ii) for the perfection of or exercise by the Secured Party of its
rights and remedies hereunder.

(g) On the date of execution of this Agreement, the Company will deliver to the
Secured Party one or more executed UCC financing statements on Form-1 with
respect to the Security Interest for filing with the jurisdictions indicated on
Schedule B, attached hereto and in such other jurisdictions as may be requested
by the Secured Party.

(h) Except as set forth on Schedule C, the execution, delivery and performance
of this Agreement does not conflict with or cause a breach or default, or an
event that with or without the passage of time or notice, shall constitute a
breach or default, under any agreement to which the Company is a party or by
which the Company is bound. No consent (including, without limitation, from
stock holders or creditors of the Company) is required for the Company to enter
into and perform its obligations hereunder.

(i) The Company shall at all times maintain the liens and Security Interest
provided for hereunder as valid and perfected first priority liens and security
interests in the Collateral in favor of the Secured Party until this Agreement
and the Security Interest hereunder shall terminate pursuant to Section 11. The
Company hereby agrees to defend the same against any and all persons. The
Company shall safeguard and protect all Collateral for the account of the
Secured Party. At the request of the Secured Party, the Company will sign and
deliver to the Secured Party at any time or from time to time one or more
financing statements pursuant to the UCC (or any other applicable statute) in
form reasonably satisfactory to the Secured Party and will pay the cost of
filing the same in all public offices wherever filing is, or is deemed by the
Secured Party to be, necessary or desirable to effect the rights and obligations
provided for herein. Without limiting the generality of the foregoing, the
Company shall pay all fees, taxes and other amounts necessary to maintain the
Collateral and the Security Interest hereunder, and the Company shall obtain and
furnish to the Secured Party from time to time, upon demand, such releases
and/or subordinations of claims and liens which may be required to maintain the
priority of the Security Interest hereunder.

(j) The Company will not transfer, pledge, hypothecate, encumber, license
(except for non-exclusive licenses granted by the Company in the ordinary course
of business), sell or otherwise dispose of any of the Collateral without the
prior written consent of the Secured Party.

(k) The Company shall keep and preserve its Equipment, Inventory and other
tangible Collateral in good condition, repair and order and shall not operate or
locate any such Collateral (or cause to be operated or located) in any area
excluded from insurance coverage.

                                       4

<PAGE>

(l) The Company shall, within ten (10) days of obtaining knowledge thereof,
advise the Secured Party promptly, in sufficient detail, of any substantial
change in the Collateral, and of the occurrence of any event which would have a
material adverse effect on the value of the Collateral or on the Secured Party's
security interest therein.

(m) The Company shall promptly execute and deliver to the Secured Party such
further deeds, mortgages, assignments, security agreements, financing statements
or other instruments, documents, certificates and assurances and take such
further action as the Secured Party may from time to time request and may in its
sole discretion deem necessary to perfect, protect or enforce its security
interest in the Collateral including, without limitation, the execution and
delivery of a separate security agreement with respect to the Company's
intellectual property ("Intellectual Property Security Agreement") in which the
Secured Party has been granted a security interest hereunder, substantially in a
form acceptable to the Secured Party, which Intellectual Property Security
Agreement, other than as stated therein, shall be subject to all of the terms
and conditions hereof.

(n) The Company shall permit the Secured Party and its representatives and
agents to inspect the Collateral at any time, and to make copies of records
pertaining to the Collateral as may be requested by the Secured Party from time
to time.

(o) The Company will take all steps reasonably necessary to diligently pursue
and seek to preserve, enforce and collect any rights, claims, causes of action
and accounts receivable in respect of the Collateral.

(p) The Company shall promptly notify the Secured Party in sufficient detail
upon becoming aware of any attachment, garnishment, execution or other legal
process levied against any Collateral and of any other information received by
the Company that may materially affect the value of the Collateral, the Security
Interest or the rights and remedies of the Secured Party hereunder.

(q) All information heretofore, herein or hereafter supplied to the Secured
Party by or on behalf of the Company with respect to the Collateral is accurate
and complete in all material respects as of the date furnished.

(r) Schedule A attached hereto contains a list of all of the subsidiaries of
Company.

4. Defaults. The following events shall be "Events of Default":

(a) The occurrence of an Event of Default (as defined in the Notes) under the
Notes;

(b) Any representation or warranty of the Company in this Agreement or in the
Intellectual Property Security Agreement shall prove to have been incorrect in
any material respect when made;

                                       5

<PAGE>

(c) The failure by the Company to observe or perform any of its obligations
hereunder or in the Intellectual Property Security Agreement for ten (10) days
after receipt by the Company of notice of such failure from the Secured Party;
and

(d) Any breach of, or default under, the Warrants.

5. Duty To Hold In Trust. Upon the occurrence of any Event of Default and at any
time thereafter, the Company shall, upon receipt by it of any revenue, income or
other sums subject to the Security Interest, whether payable pursuant to the
Notes or otherwise, or of any check, draft, note, trade acceptance or other
instrument evidencing an obligation to pay any such sum, hold the same in trust
for the Secured Party and shall forthwith endorse and transfer any such sums or
instruments, or both, to the Secured Party for application to the satisfaction
of the Obligations.

6. Rights and Remedies Upon Default. Upon occurrence of any Event of Default and
at any time thereafter, the Secured Party shall have the right to exercise all
of the remedies conferred hereunder and under the Notes, and the Secured Party
shall have all the rights and remedies of a secured party under the UCC and/or
any other applicable law (including the Uniform Commercial Code of any
jurisdiction in which any Collateral is then located). Without limitation, the
Secured Party shall have the following rights and powers:

(a) The Secured Party shall have the right to take possession of the Collateral
and, for that purpose, enter, with the aid and assistance of any person, any
premises where the Collateral, or any part thereof, is or may be placed and
remove the same, and the Company shall assemble the Collateral and make it
available to the Secured Party at places which the Secured Party shall
reasonably select, whether at the Company's premises or elsewhere, and make
available to the Secured Party, without rent, all of the Company's respective
premises and facilities for the purpose of the Secured Party taking possession
of, removing or putting the Collateral in saleable or disposable form.

(b) The Secured Party shall have the right to operate the business of the
Company using the Collateral and shall have the right to assign, sell, lease or
otherwise dispose of and deliver all or any part of the Collateral, at public or
private sale or otherwise, either with or without special conditions or
stipulations, for cash or on credit or for future delivery, in such parcel or
parcels and at such time or times and at such place or places, and upon such
terms and conditions as the Secured Party may deem commercially reasonable, all
without (except as shall be required by applicable statute and cannot be waived)
advertisement or demand upon or notice to the Company or right of redemption of
the Company, which are hereby expressly waived. Upon each such sale, lease,
assignment or other transfer of Collateral, the Secured Party may, unless
prohibited by applicable law which cannot be waived, purchase all or any part of
the Collateral being sold, free from and discharged of all trusts, claims, right
of redemption and equities of the Company, which are hereby waived and released.

                                       6

<PAGE>

7. Applications of Proceeds. The proceeds of any such sale, lease or other
disposition of the Collateral hereunder shall be applied first, to the expenses
of retaking, holding, storing, processing and preparing for sale, selling, and
the like (including, without limitation, any taxes, fees and other costs
incurred in connection therewith) of the Collateral, to the reasonable
attorneys' fees and expenses incurred by the Secured Party in enforcing its
rights hereunder and in connection with collecting, storing and disposing of the
Collateral, and then to satisfaction of the Obligations, and to the payment of
any other amounts required by applicable law, after which the Secured Party
shall pay to the Company any surplus proceeds. If, upon the sale, license or
other disposition of the Collateral, the proceeds thereof are insufficient to
pay all amounts to which the Secured Party is legally entitled, the Company will
be liable for the deficiency, together with interest thereon, at the rate of 15%
per annum (the "Default Rate"), and the reasonable fees of any attorneys
employed by the Secured Party to collect such deficiency. To the extent
permitted by applicable law, the Company waives all claims, damages and demands
against the Secured Party arising out of the repossession, removal, retention or
sale of the Collateral, unless due to the gross negligence or willful misconduct
of the Secured Party.

8. Costs and Expenses. The Company agrees to pay all out-of-pocket fees, costs
and expenses incurred in connection with any filing required hereunder,
including without limitation, any financing statements, continuation statements,
partial releases and/or termination statements related thereto or any expenses
of any searches reasonably required by the Secured Party. The Company shall also
pay all other claims and charges which in the reasonable opinion of the Secured
Party might prejudice, imperil or otherwise affect the Collateral or the
Security Interest therein. The Company will also, upon demand, pay to the
Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the Secured Party may incur in connection with (i) the enforcement of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, or (iii) the exercise or
enforcement of any of the rights of the Secured Party under the Notes. Until so
paid, any fees payable hereunder shall be added to the principal amount of the
Notes and shall bear interest at the Default Rate.

9. Responsibility for Collateral. The Company assumes all liabilities and
responsibility in connection with all Collateral, and the obligations of the
Company hereunder or under the Notes and the Warrants shall in no way be
affected or diminished by reason of the loss, destruction, damage or theft of
any of the Collateral or its unavailability for any reason.

10. Security Interest Absolute. All rights of the Secured Party and all
Obligations of the Company hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Notes, the Warrants or any agreement entered into in connection with the
foregoing, or any portion hereof or thereof; (b) any change in the time, manner
or place of payment or performance of, or in any other term of, all or any of
the Obligations, or any other amendment or waiver of or any consent to any
departure from the Notes, the Warrants or any other agreement entered into in
connection with the foregoing; (c) any exchange, release or nonperfection of any
of the Collateral, or any release or amendment or waiver of or consent to
departure from any other collateral for, or any guaranty, or any other security,
for all or any of the Obligations; (d) any action by the Secured Party to
obtain, adjust, settle and cancel in its sole discretion any insurance claims or
matters made or arising in connection with the Collateral; or (e) any other
circumstance which might otherwise constitute any legal or equitable defense
available to the Company, or a discharge of all or any part of the Security
Interest granted hereby. Until the Obligations shall have been paid and
performed in full, the rights of the Secured Party shall continue even if the
Obligations are barred for any reason, including, without limitation, the
running of the statute of limitations or bankruptcy. The Company expressly
waives presentment, protest, notice of protest, demand, notice of nonpayment and
demand for performance. In the event that at any time any transfer of any
Collateral or any payment received by the Secured Party hereunder shall be

                                       7

<PAGE>

deemed by final order of a court of competent jurisdiction to have been a
voidable preference or fraudulent conveyance under the bankruptcy or insolvency
laws of the United States, or shall be deemed to be otherwise due to any party
other than the Secured Party, then, in any such event, the Company's obligations
hereunder shall survive cancellation of this Agreement, and shall not be
discharged or satisfied by any prior payment thereof and/or cancellation of this
Agreement, but shall remain a valid and binding obligation enforceable in
accordance with the terms and provisions hereof. The Company waives all right to
require the Secured Party to proceed against any other person or to apply any
Collateral which the Secured Party may hold at any time, or to marshal assets,
or to pursue any other remedy. The Company waives any defense arising by reason
of the application of the statute of limitations to any obligation secured
hereby.

11. Term of Agreement. This Agreement and the Security Interest shall terminate
on the date on which all payments under the Notes have been made in full and all
other Obligations have been paid or discharged. Upon such termination, the
Secured Party, at the request and at the expense of the Company, will join in
executing any termination statement with respect to any financing statement
executed and filed pursuant to this Agreement.

12. Power of Attorney; Further Assurances.

(a) The Company authorizes the Secured Party, and does hereby make, constitute
and appoint it, and its respective officers, agents, successors or assigns with
full power of substitution, as the Company's true and lawful attorney-in-fact,
with power, in its own name or in the name of the Company, to, after the
occurrence and during the continuance of an Event of Default, (i) endorse any
notes, checks, drafts, money orders, or other instruments of payment (including
payments payable under or in respect of any policy of insurance) in respect of
the Collateral that may come into possession of the Secured Party; (ii) to sign
and endorse any UCC financing statement or any invoice, freight or express bill,
bill of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with accounts, and other
documents relating to the Collateral; (iii) to pay or discharge taxes, liens,
security interests or other encumbrances at any time levied or placed on or
threatened against the Collateral; (iv) to demand, collect, receipt for,
compromise, settle and sue for monies due in respect of the Collateral; and (v)
generally, to do, at the option of the Secured Party, and at the Company's
expense, at any time, or from time to time, all acts and things which the
Secured Party deems necessary to protect, preserve and realize upon the
Collateral and the Security Interest granted therein in order to effect the
intent of this Agreement, the Notes and the Warrants, all as fully and
effectually as the Company might or could do; and the Company hereby ratifies
all that said attorney shall lawfully do or cause to be done by virtue hereof.
This power of attorney is coupled with an interest and shall be irrevocable for
the term of this Agreement and thereafter as long as any of the Obligations
shall be outstanding.

(b) On a continuing basis, the Company will make, execute, acknowledge, deliver,
file and record, as the case may be, in the proper filing and recording places
in any jurisdiction, including, without limitation, the jurisdictions indicated
on Schedule B, attached hereto, all such instruments, and take all such action
as may reasonably be deemed necessary or advisable, or as reasonably requested
by the Secured Party, to perfect the Security Interest granted hereunder and
otherwise to carry out the intent and purposes of this Agreement, or for
assuring and confirming to the Secured Party the grant or perfection of a
security interest in all the Collateral.

                                       8

<PAGE>

(c) The Company hereby irrevocably appoints the Secured Party as the Company's
attorney-in-fact, with full authority in the place and stead of the Company and
in the name of the Company, from time to time in the Secured Party's discretion,
to take any action and to execute any instrument which the Secured Party may
deem necessary or advisable to accomplish the purposes of this Agreement,
including the filing, in its sole discretion, of one or more financing or
continuation statements and amendments thereto, relative to any of the
Collateral without the signature of the Company where permitted by law.

13. Notices. All notices, requests, demands and other communications hereunder
shall be in writing, with copies to all the other parties hereto, and shall be
deemed to have been duly given when (i) if delivered by hand, upon receipt, (ii)
if sent by facsimile, upon receipt of proof of sending thereof, (iii) if sent by
nationally recognized overnight delivery service (receipt requested), the next
business day or (iv) if mailed by first-class registered or certified mail,
return receipt requested, postage prepaid, four days after posting in the U.S.
mails, in each case if delivered to the following addresses:

              If to the Company:         GPS Industries, Inc.
                                         Suite 214, 5500- 152nd Street
                                         Surrey, British Columbia V3S-5J9
                                         Attention: Chief Executive Officer
                                         Telephone:  (604) 576-7442
                                         Facsimile:

              With a copy to:            [                           ]
                                         [                           ]
                                         [                           ]
                                         Attention:
                                         Telephone:
                                         Facsimile:

              If to the Secured Party:   AJW Partners, LLCAJW Offshore, Ltd.
                                         AJW Qualified Partners, LLC
                                         New Millennium Capital Partners II, LLC
                                         1044 Northern Boulevard
                                         Suite 302
                                         Roslyn, New York  11576
                                         Attention:  Corey Ribotsky
                                         Facsimile:  516-739-7115

              With a copy to:            Ballard Spahr Andrews & Ingersoll, LLP
                                         1735 Market Street, 51st Floor
                                         Philadelphia, Pennsylvania  19103
                                         Attention:  Gerald J. Guarcini, Esq.
                                         Facsimile:  215-864-8999

                                       9

<PAGE>

14. Other Security. To the extent that the Obligations are now or hereafter
secured by property other than the Collateral or by the guarantee, endorsement
or property of any other person, firm, corporation or other entity, then the
Secured Party shall have the right, in its sole discretion, to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured Party's rights and
remedies hereunder.

15. Miscellaneous.

(a) No course of dealing between the Company and the Secured Party, nor any
failure to exercise, nor any delay in exercising, on the part of the Secured
Party, any right, power or privilege hereunder or under the Notes shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

(b) All of the rights and remedies of the Secured Party with respect to the
Collateral, whether established hereby or by the Notes or by any other
agreements, instruments or documents or by law shall be cumulative and may be
exercised singly or concurrently.

(c) This Agreement constitutes the entire agreement of the parties with respect
to the subject matter hereof and is intended to supersede all prior
negotiations, understandings and agreements with respect thereto. Except as
specifically set forth in this Agreement, no provision of this Agreement may be
modified or amended except by a written agreement specifically referring to this
Agreement and signed by the parties hereto.

(d) In the event that any provision of this Agreement is held to be invalid,
prohibited or unenforceable in any jurisdiction for any reason, unless such
provision is narrowed by judicial construction, this Agreement shall, as to such
jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.

(e) No waiver of any breach or default or any right under this Agreement shall
be considered valid unless in writing and signed by the party giving such
waiver, and no such waiver shall be deemed a waiver of any subsequent breach or
default or right, whether of the same or similar nature or otherwise.

                                       10

<PAGE>

(f) This Agreement shall be binding upon and inure to the benefit of each party
hereto and its successors and assigns.

(g) Each party shall take such further action and execute and deliver such
further documents as may be necessary or appropriate in order to carry out the
provisions and purposes of this Agreement.

(h) This Agreement shall be construed in accordance with the laws of the State
of New York, except to the extent the validity, perfection or enforcement of a
security interest hereunder in respect of any particular Collateral which are
governed by a jurisdiction other than the State of New York in which case such
law shall govern. Each of the parties hereto irrevocably submit to the exclusive
jurisdiction of any New York State or United States Federal court sitting in
Manhattan county over any action or proceeding arising out of or relating to
this Agreement, and the parties hereto hereby irrevocably agree that all claims
in respect of such action or proceeding may be heard and determined in such New
York State or Federal court. The parties hereto agree that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
The parties hereto further waive any objection to venue in the State of New York
and any objection to an action or proceeding in the State of New York on the
basis of forum non conveniens.

(i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF
THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY
HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY
ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY TRIAL
FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING THAT,
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF A
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

(j) This Agreement may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       11

<PAGE>

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

                              GPS INDUSTRIES, INC.

                                       By:______________________________________
                                           Robert Silzer
                                           Chief Executive Officer

                                       AJW PARTNERS, LLC
                                       By: SMS Group, LLC

                                       By:______________________________________
                                           Corey S. Ribotsky
                                           Manager

                                       AJW OFFSHORE, LTD.
                                       By:  First Street Manager II, LLC

                                       By:______________________________________
                                           Corey S. Ribotsky
                                           Manager

                                       AJW QUALIFIED PARTNERS, LLC
                                       By: AJW Manager, LLC

                                       By:____________________________________
                                           Corey S. Ribotsky
                                           Manager

                                       NEW MILLENNIUM CAPITAL PARTNERS, II, LLC
                                       By:  First Street Manager II, LLC

                                       By:______________________________________
                                           Corey S. Ribotsky
                                           Manager

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