Document:

EXHIBIT
      4.1

    GPS
      INDUSTRIES, INC.

    CERTIFICATE
      OF DESIGNATION

    OF
      THE

    SERIES
      B
      CONVERTIBLE PREFERRED STOCK

     

    
      
        

      

    

    Pursuant
      to Section 78.195 of the General

    Corporation
      Law of the State of Nevada

    
      

    

     

    GPS
      Industries, Inc., a corporation organized and existing under the laws of the
      State of Nevada (the “Corporation”), hereby certifies that the following
      resolution was duly adopted by the Board of Directors of the Corporation by
      unanimous written consent effective August 23, 2006:

     

    RESOLVED,
      that, Article Four of the Amended Articles of Incorporation, creates and
      authorizes up to 50,000,000 shares of preferred stock (the “Preferred Stock”).
      As of the date hereof, 15,000,000 shares have been designated as Series A 5%
      Convertible Preferred Stock, of which no shares are currently outstanding.
      Accordingly, there are 35,000,000 shares of Preferred Stock which have the
      status of authorized but undesignated and unissued shares of Preferred Stock.
      

     

    RESOLVED
      FURTHER, the Board of Directors of the Corporation hereby establishes a series
      of Series B Convertible Preferred Stock to consist of 4,000,000 shares, and
      hereby fixes the powers, designation, preferences and relative participating,
      optional and other rights of such series of Series B Convertible Preferred
      Stock, and the qualifications, limitations and restrictions thereof, as
      follows:

     

    1. Designation.
      

     

    (a) The
      designation of the series of Series B Convertible Preferred Stock created by
      this resolution shall be “Series B Convertible Preferred Stock” (hereinafter
      called the “Series B Preferred Stock”).

     

    (b) All
      shares of Series B Preferred Stock shall be identical with each other in all
      respects. 

     

    2. Liquidation
      Rights.
      

     

    (a) General.
      In the
      event of any liquidation, dissolution or winding up, whether voluntary or
      involuntary, holders of each share of Series B Preferred Stock shall be entitled
      to be paid out of the assets or surplus funds of the Corporation legally
      available for distribution to holders of the Corporation’s capital stock of all
      classes (whether such assets are capital, surplus, or earnings) before any
      sums
      shall be paid or any assets or surplus funds distributed among the holders
      of
      Common Stock or to the holders of any series of Preferred Stock which may be
      junior in right of preference to Series B Preferred Stock, an amount equal
      to
      $10.00 per share (as adjusted to equitably reflect any stock splits, stock
      dividends or any, combination, reclassification or similar transactions after
      the date hereof) of Series B Preferred Stock plus any unpaid dividends thereon
      (the “Stated Value”). After payment to the holders of the Series B Preferred
      Stock of the amount set forth in this Section 2(a), the remaining assets
      and funds of the Corporation legally available for distribution, if any, shall
      be distributed among the holders of the Common Stock and the Series B Preferred
      Stock in proportion to the shares of Common Stock then held by them and the
      shares of Common Stock which they have a right to acquire upon conversion of
      the
      shares of the Series B Preferred Stock held by them.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) Distributions
      Other than Cash.
      Whenever the distribution provided for in this Section 2 shall be paid in
      property other than cash, the value of such distribution shall be the fair
      market value of such property as determined in good faith by the Board of
      Directors of the Corporation. In each such case, the holders of the Series
      B
      Preferred Stock shall be entitled to a proportionate share of any such
      distribution in accordance with the provisions hereof. 

     

    If
      the
      assets of the Corporation shall be insufficient to permit the payment in full
      to
      holders of the Series B Preferred Stock of the preferential amount set forth
      in
      this Section 2, then the entire assets of the Corporation available for
      such distribution shall be distributed ratably among the holders of the Series
      B
      Preferred Stock in accordance with the aggregate liquidation preference of
      the
      shares of Series B Preferred Stock held by each of them. 

     

    The
      sale,
      lease or exchange (for cash, shares of stock, securities or other consideration)
      of all or substantially all the property and assets of the Corporation, or
      the
      merger, consolidation or reorganization of the Corporation into or with any
      other corporation, or the merger or consolidation of any other corporation
      into
      or with the Corporation or any other transaction or series of related
      transactions, in each case where the shareholders of the Corporation do not
      continue to hold the majority of the voting power after such merger,
      consolidation or reorganization, shall be deemed to be a liquidation for the
      purposes of this section (and such actions shall be considered “Deemed
      Liquidation” for this Certificate of Designations).

     

    3. Conversion.

     

    The
      holders of Series B Preferred Stock shall have conversion rights as
      follows:

     

    (a) Right
      to Convert.
      Each
      share of Series B Preferred Stock shall be convertible, at the option of the
      holder thereof, at any time after the date of issuance of such share, at the
      office of the Corporation or any transfer agent for the Series B Preferred
      Stock, into such number of fully paid and non-assessable shares of Common Stock
      as is determined by dividing the Stated Value ($10.00) of one share of Series
      B
      Preferred Stock by the Conversion Price (the “Conversion Price”) at the time in
      effect for a share Series B Preferred Stock. The Conversion Price per share
      of
      Series B Preferred Stock initially shall be $.061, subject to adjustment from
      time to time as provided below. 

     

    (b) Intentionally
      Deleted.

     

    (c) Mechanics
      of Conversion.
      No
      fractional shares of Common Stock shall be issued upon conversion of the Series
      B Preferred Stock. In lieu of any fractional shares to which the holder of
      a
      share of Series B Preferred Stock would otherwise be entitled, the Corporation
      shall pay cash equal to such fraction multiplied by the then applicable
      Conversion Price of the Series B Preferred Stock. Before any holder of Series
      B
      Preferred Stock shall be entitled to convert the same into shares of Common
      Stock pursuant to Section 3(a), such holder shall surrender the certificate
      or certificates therefor, duly endorsed, at the office of the Corporation or
      of
      any transfer agent for the Series B Preferred Stock, and shall give written
      notice by mail, postage prepaid, to the Corporation at its principal corporate
      office, of the election to convert the same, and such conversion shall be deemed
      to have been made immediately prior to the close of business on the date of
      such
      surrender of the shares of Series B Preferred Stock to be converted. The
      Corporation shall, as soon as practicable thereafter, issue and deliver to
      such
      address as the holder may direct, a certificate or certificates for the number
      of shares of Common Stock to which such holder shall be entitled. The
      Corporation shall pay all documentary, stamp, transfer or other transactional
      taxes attributable to the issuance or delivery of shares of Common Stock upon
      conversion of any shares of Series B Preferred Stock; provided
      that the
      Corporation shall not be required to pay any taxes which may be payable in
      respect of any transfer involved in the issuance or delivery of any certificate
      for such shares in a name other than that of the holder of the shares of
      Preferred Stock in respect of which such shares are being issued.

     

    
      
         

      

      
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    (d) Status
      of Converted Stock.
      In the
      event any shares of Series B Preferred Stock shall be converted pursuant to
      this
      Section 3, the shares so converted shall be canceled and shall not be
      reissued as Series B Preferred Stock by the Corporation. All such shares shall
      upon their cancellation become authorized but unissued shares of Preferred
      Stock
      and may be reissued as part of a new series of Preferred Stock to be created
      by
      resolution or resolutions of the board of directors, subject to the conditions
      and restrictions on issuance set forth herein. 

     

    (e) Certain
      Adjustments and Distributions.

     

    (i) Adjustments
      for Subdivisions or Combinations of Common Stock.
      In the
      event the outstanding shares of Common Stock shall be subdivided by stock split,
      stock dividend or otherwise, into a greater number of shares of Common Stock,
      the Conversion Price of each share of Series B Preferred Stock then in effect
      shall, concurrently with the effectiveness of such subdivision, be
      proportionately decreased. In the event the outstanding shares of Common Stock
      shall be combined or consolidated into a lesser number of shares of Common
      Stock, the Conversion Price of each share of Series B Preferred Stock then
      in
      effect shall, concurrently with the effectiveness of such combination or
      consolidation, be proportionately increased.

     

    (ii) Stock
      Dividends and Other Distributions.
      In the
      event the Corporation makes, or fixes a record date for the determination of
      holders of Common Stock entitled to receive, any distribution (excluding
      repurchases of securities by the Corporation not made on a pro rata basis)
      payable in property or in securities of the Corporation other than shares of
      Common Stock, and other than as otherwise adjusted for in this Section 3 or
      as provided for in Section 1 in connection with a dividend, then and in
      each such event the holders of Series B Preferred Stock shall receive, at the
      time of such distribution, the amount of property or the number of securities
      of
      the Corporation that they would have received had their Series B Preferred
      Stock
      been converted into Common Stock on the date of such event.

     

    (iii) Reorganizations,
      Recapitalizations, Reclassifications or Similar Events.
      If the
      Common Stock shall be changed into the same or a different number of shares
      of
      any other class or classes of stock or other securities or property, whether
      by
      capital reorganization, recapitalization, reclassification or otherwise, then
      each share of Series B Preferred Stock shall thereafter be convertible into
      the
      number of shares of stock or other securities or property to which a holder
      of
      the number of shares of Common Stock of the Corporation deliverable upon
      conversion of such shares of Series B Preferred Stock shall have been entitled
      upon such reorganization, recapitalization, reclassification, merger,
      consolidation or other event.

     

    
      
         

      

      
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    (iv) Certain
      Issuances at Less Than The Conversion Price.
      

     

    (A) If
      the
      Corporation shall, at any time or from time to time, issue any shares of Common
      Stock (or be deemed to have issued shares of Common Stock as provided in
      Section 3(e)(iv)(B)) other than Excluded Securities (as defined below),
      without consideration or for a consideration per share less than the Conversion
      Price in effect immediately prior to each such issuance then the Conversion
      Price shall forthwith (except as provided in this Section 3(e)(iv)(A)) be
      lowered to a price equal to the quotient obtained by dividing:

     

    (1) the
      total
      number of shares of Common Stock outstanding (including any shares of Common
      Stock deemed to have been issued pursuant to Section 3(e)(iv)(B)(3)) (it
      being understood that the shares of Common Stock issuable upon conversion of
      the
      Series B Preferred Stock immediately prior to such issuance shall be deemed
      to be outstanding for all purposes of the computation required in this
      Section 3(e)(iv)(A)(1)), immediately prior to such issuance multiplied by
      the Conversion Price as in effect immediately prior to such issuance, plus
      

     

    (2) the
      consideration received by the Corporation upon such issuance, by 

     

    (3) the
      total
      number of shares of Common Stock outstanding (including any shares of Common
      Stock deemed to have been issued pursuant to Section 3(e)(iv)(B)) (it being
      understood that the shares of Common Stock issuable upon conversion of the
      Series B Preferred Stock immediately prior to such issuance shall be deemed
      to be outstanding for all purposes of the computation required in this
      Section 3(e)(iv)(A)(3)), immediately after the issuance of such Common
      Stock.

     

    (B) For
      the
      purposes of any adjustment of the Conversion Price pursuant to
      Section 3(e)(iv)(A), the following provisions shall be
      applicable:

     

    (1) In
      the
      case of the issuance of Common Stock for cash, the consideration shall be deemed
      to be the amount of cash paid therefor before deducting therefrom any discounts,
      commissions or other expenses allowed, paid or incurred by the Corporation
      for
      any underwriting or otherwise in connection with the issuance and sale
      thereof.

     

    (2) In
      the
      case of the issuance of Common Stock for a consideration in whole or in part
      other than cash, the consideration other than cash be shall be deemed to be
      the
      fair market value thereof as determined in good faith by the Board, irrespective
      of any accounting treatment.

     

    
      
         

      

      
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    (3) In
      the
      case of the issuance of (x) options to purchase or rights to subscribe for
      Common Stock, (y) securities by their terms convertible into or exchangeable
      for
      Common Stock or (z) options to purchase or rights to subscribe for such
      convertible or exchangeable securities:

     

    (i) the
      aggregate maximum number of shares of Common Stock deliverable upon exercise
      of
      such options to purchase or rights to subscribe for Common Stock shall be deemed
      to have been issued at the time such options or rights were issued and for
      a
      consideration equal to the consideration (determined in the manner provided
      in
      Sections 3(e)(iv)(B)(1), 3(e)(iv)(B)(2) and 3(e)(iv)(B)(3)), if any,
      received by the Corporation upon the issuance of such options or rights plus
      the
      minimum purchase price provided in such options or rights for the Common Stock
      covered thereby;

     

    (ii) the
      aggregate maximum number of shares of Common Stock deliverable upon conversion
      of or in exchange for any such convertible or exchangeable securities or upon
      the exercise of options to purchase or rights to subscribe for such convertible
      or exchangeable securities and subsequent conversion or exchange thereof shall
      be deemed to have been issued at the time such securities were issued or such
      options or rights were issued and for a consideration equal to the consideration
      received by the Corporation for any such securities and related options or
      rights (excluding any cash received on account of accrued interest or accrued
      dividends), plus the additional consideration, if any, to be received by the
      Corporation upon the conversion or exchange of such securities or the exercise
      of any related options or rights (the consideration in each case to be
      determined in the manner provided in Sections 3(e)(iv)(B)(1),
      3(e)(iv)(B)(2) and 3(e)(iv)(B)(3));

     

    (iii) on
      any
      change in the number of shares or exercise price of Common Stock deliverable
      upon exercise of any options or rights or conversions of or exchanges for such
      securities, other than a change resulting from the anti-dilution provisions
      thereof, the Conversion Price shall forthwith be readjusted to the Conversion
      Price as would have been obtained had the adjustment made upon the issuance
      of
      such options, rights or securities not converted prior to such change or options
      or rights related to such securities not converted prior to such change been
      made upon the basis of such change;

     

    (iv) on
      the
      expiration of any such options or rights, the termination of any such rights
      to
      convert or exchange or the expiration of any options or rights related to such
      convertible or exchangeable securities in each case having been issued by the
      Corporation, the Conversion Price shall forthwith be readjusted to the
      Conversion Price as would have been obtained had the adjustment made upon the
      issuance of such options, rights, securities or options or rights related to
      such securities been made on the basis that the only shares of Common Stock
      so
      issued were the shares of Common Stock, if any, actually issued or sold upon
      the
      exercise of such options or rights, upon the conversion or exchange of such
      securities, or upon the exercise of the options or rights related to such
      securities and subsequent conversion or exchange thereof; and

     

    (v) no
      further adjustment of the Conversion Price, as adjusted upon the issuance of
      such options or rights, rights to convert or exchange or options or rights
      related to such convertible or exchangeable securities.

     

    
      
         

      

      
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    (C) “Excluded
      Securities” shall mean (i) any securities issued or issuable to employees,
      officers, directors of, or contractors, consultants or advisors to, the
      Corporation pursuant to stock purchase or stock option plans, stock bonuses
      or
      awards, contracts or other arrangements and any shares of Common Stock issuable
      upon exercise of any such securities, (ii) stock issued upon the conversion
      or exercise of any convertible securities, options, warrants or other rights
      to
      acquire capital stock of the Corporation issued on or before the date hereof,
      (iii) stock issued in connection with any stock split, stock dividend or
      recapitalization by the Corporation, (iv)  securities issued pursuant to
      commercial credit arrangements, equipment financings or similar transactions,
      (v) stock issued upon conversion of the Series B Preferred Stock, and
      (vi) securities issued pursuant to strategic transactions with an operating
      company in a business synergistic with the business of the Corporation and
      in
      which the Corporation receives benefits in addition to the investment of funds
      or pursuant to acquisitions or equipment leases, but shall not include a
      transaction in which the Corporation is issuing securities primarily for the
      purpose of raising capital or to an entity whose primary business is investing
      in securities.

     

    (f) Certificate
      as to Adjustments.
      Upon
      the occurrence of each adjustment or readjustment of the Conversion Price
      pursuant to this Section 3, the Corporation at its expense shall promptly
      compute such adjustment or readjustment in accordance with the terms hereof
      and
      furnish to each holder of Series B Preferred Stock to which such adjustment
      pertains a certificate setting forth such adjustment or readjustment and showing
      in detail the facts upon which such adjustment or readjustment is based. The
      Corporation shall, upon the written request at any time of any holder of Series
      B Preferred Stock, furnish or cause to be furnished to such holder a like
      certificate setting forth (i) such adjustments and readjustments,
      (ii) the Conversion Price at the time in effect, and (iii) the number
      of shares of Common Stock and the amount, if any, of other property which at
      the
      time would be received upon the conversion of such holder’s Series B Preferred
      Stock.

     

    (g) No
      Impairment.
      The
      Corporation will not, through any reorganization, recapitalization, transfer
      of
      assets, consolidation, merger, dissolution, issue or sale of securities or
      any
      other voluntary action, avoid or seek to avoid the observance or performance
      of
      any of the terms to be observed or performed hereunder by the Corporation,
      but
      will at all times in good faith assist in the carrying out of all the provisions
      of this Section 3 and in the taking of all such action as may be necessary
      or appropriate in order to protect the conversion rights of the holders of
      Series B Preferred Stock against impairment. 

     

    (h) Notices
      of Record Date.
      In the
      event of any taking by the Corporation of a record of the holders of any class
      of securities for the purpose of determining the holders thereof who are
      entitled to receive any dividend or other distribution, any right to subscribe
      for, purchase or otherwise acquire any shares of stock of any class or any
      other
      securities or property or to receive any other right, the Corporation shall
      mail
      to each holder of Series B Preferred Stock at least twenty (20) days prior
      to
      such record date, a notice specifying the date on which any such record is
      to be
      taken for the purpose of such dividend or distribution or right, and the amount
      and character of such dividend, distribution or right.

     

    (i) Reservation
      of Stock Issuable Upon Conversion.
      The
      Corporation shall at all times reserve and keep available out of its authorized
      but unissued shares of Common Stock solely for the purpose of effecting the
      conversion of the shares of Series B Preferred Stock such number of its shares
      of Common Stock as shall from time to time be sufficient to effect the
      conversion of all outstanding shares of Series B Preferred Stock and if at
      any
      time the number of authorized but unissued shares of Common Stock shall not
      be
      sufficient to effect the conversion of all then outstanding shares of Series
      B
      Preferred Stock, the Corporation will promptly take such corporate action as
      may
      be necessary to increase its authorized but unissued shares of Common Stock
      to
      such number of shares as shall be sufficient for such purpose.

     

    
      
         

      

      
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    (j) Notices.
      Any
      notice required by the provisions of this Section 3 to be given to any
      holder of Series B Preferred Stock shall be deemed given if deposited in the
      United States mail, postage prepaid, and addressed to each holder of record
      at
      such holder’s address appearing on the Corporation’s books.

     

    4. Covenants.
      The
      Corporation is prohibited from taking any actions to amend or repeal any
      provision of, or add any provision to, the Corporation’s Amended Articles of
      Incorporation, Bylaws or this Certificate of Designation, if such action would
      change adversely the preferences, rights, privileges or powers of, or
      restrictions provided for the benefit of, the holders of the Series B Preferred
      Stock.

     

    5. Dividends.
      Except
      as set forth below, the holders of the Series B Preferred Stock shall not be
      entitled to receive dividends. The Corporation shall not declare, pay or set
      aside any dividends on shares of any class or series of capital stock of the
      Corporation (other than dividends on shares of Common Stock payable in shares
      of
      Common Stock) unless the holders of the Series B Preferred Stock then
      outstanding shall first receive, or simultaneously receive, a dividend on each
      outstanding share of Series B Preferred Stock in an amount equal to: (i) in
      the
      case of a dividend on Common Stock, an amount equal to the amount that would
      have been payable had the Series B Preferred Stock been converted into Common
      Stock immediately prior to the record date for such dividend; (ii) in the case
      of a dividend on any other series of Preferred Stock that is convertible into
      Common Stock, that dividend per share as if all such shares of Series B
      Preferred Stock and all shares of such other series of Preferred Stock had
      been
      converted into Common Stock, in each case calculated on the record date for
      determination of holders entitled to receive such dividend, or (iii) in the
      case
      of a dividend on any class or series that is not convertible into Common Stock,
      at a rate per share of Series B Preferred Stock determined by dividing the
      amount of the dividend payable on each share of such class or series of capital
      stock by the original issuance price of such class or series of capital stock
      and multiplying such fraction by $10.00 per share (subject to appropriate
      adjustment in the event of any stock dividend, stock split, combination or
      other
      similar recapitalization affecting such shares at any time after the date
      hereof).

     

    6. Voting
      Rights.

     

    (a) General.
      Except
      as otherwise expressly provided herein or as required by law, each holder of
      shares of Series B Preferred Stock shall be entitled to the number of votes
      equal to the number of shares of Common Stock into which the Series B Preferred
      Stock could be converted on the record date for such vote, and shall have voting
      rights and powers equal to the voting rights and powers of the Common Stock.
      

     

    
      
         

      

      
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    (b) Approval
      by Holders of Series B Preferred Stock.
      So long
      as Leisurecorp LLC is the owner of record of 25% or more of the number of shares
      of Series B Preferred Stock that it purchased pursuant to that certain the
      Securities Purchase Agreement, dated as of November 13, 2006 by and between
      the
      Company and the signatories thereto (the “Securities Purchase Agreement”), the
      Corporation shall not, without first obtaining the prior approval of the holders
      of a majority of the then outstanding shares of Series B Preferred Stock, voting
      separately as a class:

     

    (i) Amend,
      waive or repeal any provision of, or add any provision to, the Corporation’s
      Articles of Incorporation or Bylaws if such action would adversely affect the
      rights, preferences, privileges, or restrictions of the Series B Preferred
      Stock;

     

    (ii) Authorize,
      create and/or issue any class or series of the Corporation’s capital stock or
      any rights, options, warrants or other securities that are convertible into
      or
      exchangeable for any capital stock of the Corporation, having any right,
      preference or privilege superior to or on parity with the Series B Preferred
      Stock in any respect whether by reclassification or otherwise;

     

    (iii) Pay,
      declare or set aside for payment any dividends or distributions on any shares
      of
      capital stock of the Corporation;

     

    (iv) Alter,
      amend or change any of the provisions of this Certificate of Designation;

     

    (v) Redeem,
      repurchase, acquire, declare a dividend (or set aside money for such purchase)
      with respect to any security of the Corporation, except that the Corporation
      may
      repurchase shares of its capital stock issued pursuant to the Corporation’s
      stock compensation plans already in effect at such time in accordance with
      the
      terms of such plans;

     

    (vi) Increase
      or decrease the authorized number of shares of Series B Preferred Stock, or
      issue any shares of Series B Preferred Stock other than pursuant to the terms
      of
      the Securities Purchase Agreement;

     

    (vii) Proceed
      with any transaction that would cause a Deemed Liquidation or any other merger,
      consolidation, or business combination or other acquisition involving the
      Corporation (other than solely for the purposes of reincorporation); 

     

    (viii) Increase
      or decrease the authorized number of directors on the Corporation’s Board of
      Directors;

     

    (ix) Agree
      or
      commit to take any of the actions set forth in the foregoing clauses (i) -
      (viii).

     

    (c) Election
      of Directors.
      The
      holders of a majority of the outstanding shares of Series B Preferred Stock
      shall have the right, voting as a separate class, to elect three members of
      the
      Corporation’s board of directors (the “Preferred Directors”), of which two shall
      be designated by such holders of a majority of the outstanding shares of Series
      B Preferred Stock as the “Reviewing Preferred Directors.” In the event one of
      the Preferred Directors resigns, is removed or otherwise leaves the Board of
      Directors, the holders of a majority of the outstanding shares of Series B
      Preferred Stock shall have the right to fill such vacancy by electing a
      replacement Preferred Director. Any Preferred Director may be removed, with
      or
      without cause, by the affirmative vote of the holders of a majority of the
      then
      outstanding shares of Series B Preferred Stock. 

     

    
      
         

      

      
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    7. Board
      of Director Restrictions.
      The
      Board of Directors may not take any of the following actions, and none of the
      following actions shall be valid and constitute an action of the Board of
      Directors, unless such action is approved by a majority of the Board of
      Directors, which majority shall include at least one of the Reviewing Preferred
      Directors: 

     

    
      	
              i.

            	
              Recapitalize
                or reorganize the Corporation or voluntarily liquidate, dissolve
                or wind
                up the Corporation;

            
	 	 
	
              ii.

            	
              Incur
                any new indebtedness or refinance any existing indebtedness for borrowed
                money (which shall include for purposes hereof capital lease obligations
                and guarantees or other contingent obligations for borrowed money)
                other
                (a) than trade payables and accrued expenses incurred in the ordinary
                course of business, and (b) indebtedness not to exceed at any time
                $500,000 in the aggregate; provided,
                however,
                that Corporation may extend the payment dates or the maturity date
                of any
                indebtedness for borrowed money;

            
	 	 
	
              iii.

            	
              Approve,
                adopt or amend the Corporation’s annual budget (the “Budget”) or any
                provision thereof; 

            
	 	 
	
              iv.

            	
              Unless
                included in the Corporation’s annual budget approved by the Board of
                Directors for the then-current fiscal year in accordance with this
                Section
                7, incur or commit to incur any capital or operating expenditures
                (other
                than purchases of inventory purchased solely for, and specifically
                to fill
                signed purchase orders) in excess of (a) $50,000 in one or a series
                of
                related expenditures, or (b) in excess of $250,000 in the
                aggregate;

            
	 	 
	
              v.

            	
              Hire
                or fire the (a) Corporation’s Chief Executive Officer, (b) the
                Corporation’s Chief Financial Officer, or (c) any other officer or
                employee of the Corporation who, at the time of hiring, earns or
                is
                expected to earn a base salary (excluding bonuses) of $100,000 or
                more per
                year (a “Qualified Employee”), enter into or approve any employment
                agreement or consulting agreement or arrangement with a Qualified
                Employee, or amend or waive or approve the amendment or waiver of
                any
                material provision of any employment agreement or consulting agreement
                or
                other arrangement with a Qualified Employee;

            
	 	 
	
              vi.

            	
              Acquire
                any assets or equity securities of any other business or entity,
                or sell
                any assets of the Corporation (other than in the ordinary course
                of
                business), in each case if the transaction value of such acquisition
                or
                disposition is greater than $2,000,000; 

            
	 	 
	
              vii.

            	
              Issue
                equity securities or options to any employees, directors, consultants
                or
                other persons eligible to participate in the Corporation’s stock
                compensation, bonus or other compensation plan (collectively, “Company
                Plans”) other than pursuant to such Company Plans;

            
	 	 
	
              viii.

            	
              Alter
                or amend any existing Company Plan, or adopt or enter into any new
                Company
                Plan; and

            
	 	 
	
              ix.

            	
              Enter
                into any agreement, or effect a transaction with any of the Corporation's
                affiliates or stockholders or any of the Corporation’s stockholders'
                affiliates or any family member of an officer or director of the
                Corporation, except for transactions and agreements that exist as
                of the
                date hereof.

            

    

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

     

    The
      restrictions contained in this Section 7 shall remain in effect until the
      earlier of (i) the date on which Leisurecorp LLC is the owner of record of
      less
      than 25% of the number of shares of Series B Preferred Stock that it purchased
      pursuant to that certain the Securities Purchase Agreement, or (ii) the
      Corporation met or exceeded the Budget, as amended pursuant to Section 7.iii,
      for two consecutive fiscal years. Notwithstanding any notice procedures in
      the
      Corporation’s bylaws, notice of all actions subject to this Section 7 shall be
      given to each Preferred Director in writing by both facsimile and by e-mail
      at
      such addresses as specified from time to time by the Reviewing Preferred
      Directors. 

     

    8. Participation
      in Future Financings.
      In
      the
      event that the Corporation
      intends
      to effect a sale (a “Subsequent Financing”) of
      its
      Common Stock or Common Stock Equivalents (as
      defined below) other than the sale or issuance of additional shares of Series
      B
      Preferred Stock pursuant to the Securities Purchase Agreement,
      each
      Qualified Holder (as defined below) shall
      have the right to participate in each such Subsequent Financing to the extent
      specified herein. At least 15 calendar days prior to the scheduled closing
      of a
      Subsequent Financing, the Corporation
      shall
      deliver to each
      Qualified Holder
      a
      written notice of its intention to effect a Subsequent Financing (a “Subsequent
      Financing Notice”), which Subsequent Financing Notice shall describe in
      reasonable detail the proposed terms of such Subsequent Financing
      and
      the
      amount of proceeds intended to be raised thereunder. If, by the
      close
      of business on
      or
      before the tenth day after Qualified
      Holders
      receive
      the Subsequent Financing Notice, the Corporation
      receives
      a written notice from any
      Qualified Holder
      informing the Corporation
      of
such
      Qualified Holder’s
      desire
      to participate in the Subsequent Financing, such Qualified
      Holder
      shall
      thereafter have the right to purchase in the Subsequent Financing up to its
“Pro
      Rata Portion” (as defined below) of the Common Stock and Common Stock
      Equivalents sold in the Subsequent Financing. Failure to respond to the
Corporation
      in
      writing within the foregoing 10-day period shall be conclusively deemed to
      have
      been an election by Qualified
      Holders
      not to
      participate in the Subsequent Financing. In
      the
      event that the Corporation changes the proposed terms of the Subsequent
      Financing after notifying a Qualified Holder, the Corporation must notify such
      Qualified Holder of the changed terms even if the Qualified Holder failed to
      respond to the earlier Subsequent Financing Notice and the Qualified Holder
      shall then have another fifteen day period to respond to such notice. The
      Corporation may not close a Subsequent Financing without first complying with
      all of the terms of this provision and the Corporation may not sell securities
      in a Subsequent Financing on terms and conditions that differ from those
      disclosed to Qualified Holders in a Subsequent Financing Notice. “Pro
      Rata
      Portion” means the ratio of (x) the number of shares of Common Stock
beneficially
      owned by each
      Qualified Holder
      at the
      time that the Subsequent Financing Notice was delivered, and (y) the
sum
      of
      the number
      of
      shares of Common Stock then outstanding
      plus the
      number of shares of Common Stock issuable upon the exercise or conversion of
      all
      outstanding Common Stock Equivalents. 
      Notwithstanding the foregoing, Subsequent
      Financing shall not include any issuance of any Excluded Securities (as defined
      in Section 3(e)(iv)(C), above).
      The
      term “Common Stock Equivalents” means any securities of the Corporation
      which
      would entitle the holder thereof to acquire at any time shares of Common Stock,
      including without limitation, any debt, preferred stock, rights, options,
      warrants or other instrument that is at any time convertible into or
      exchangeable for, or otherwise entitles the holder thereof to receive, shares
      of
      Common Stock.
      The
      term “Qualified Holder” means, at the time of determination, any holder who is
      the registered owner of more than 100,000 shares of Series B Preferred Stock
      (subject to appropriate adjustment in the event of any stock dividend, stock
      split, combination or other similar recapitalization affecting such shares
      at
      any time after the date hereof).

     

    
      
         

      

      
        -10-EXHIBIT
      4.2

     

    NEITHER
      THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
      HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
      SECURITIES COMMISSION OF ANY STATE OR FOREIGN COUNTRY IN RELIANCE UPON AN
      EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
      “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
      FOREIGN COUNTRY. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD
      IN
      THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
      APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED UNDER AN
      AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE
      LAWS.

     

    Date:
      ______________, 200_

     

    GPS
      INDUSTRIES, INC.

    STOCK
      PURCHASE WARRANT

     

    THIS
      CERTIFIES THAT, for value received, LEISURECORP LLC (“LEISURECORP”) or its
      registered assigns, is entitled to purchase from GPS INDUSTRIES, INC. a Nevada
      corporation (the “Company”), at any time and from time to time during the
      Exercise Period (as defined in Section 2 hereof), Forty Million Nine Hundred
      Eighty Three Thousand Six Hundred and Seven (40,983,607) fully paid and
      nonassessable shares of the Company’s common stock, (the “Common Stock”), at an
      exercise price per share (the “Exercise Price”) of $.122 (the “Warrant”). The
      number of shares of Common Stock purchasable hereunder (the “Warrant Shares”)
      and the Exercise Price are subject to adjustment as provided in Section 4
      hereof. 

     

    This
      Warrant is subject to the following terms, provisions and
      conditions:

     

    1. (a)
      Manner
      of Exercise; Issuance of Certificates.
      Subject
      to the provisions hereof, including, without limitation, the limitations
      contained in Section 7 hereof, this Warrant may be exercised at any time during
      the Exercise Period by the holder hereof, in whole or in part, by delivery
      of a
      completed exercise agreement in the form attached hereto (the “Exercise
      Agreement”), to the Company by 5 p.m. Vancouver time on any Business Day at the
      Company’s principal executive offices (or such other office or agency of the
      Company as it may designate by notice to the holder hereof) and upon payment
      to
      the Company as provided in Section 1(b) below of the applicable Exercise Price
      for the Warrant Shares specified in the Exercise Agreement. The Warrant Shares
      so purchased shall be deemed to be issued to the holder hereof or such holder’s
      designee, as the record owner of such shares, as of the close of business on
      the
      date on which this Warrant shall have been surrendered and the completed
      Exercise Agreement shall have been delivered and payment shall have been made
      for such shares as set forth above or, if such day is not a Business Day, on
      the
      next succeeding Business Day. The Warrant Shares so purchased, representing
      the
      aggregate number of shares specified in the Exercise Agreement, shall be
      delivered to the holder hereof as promptly as practicable. If this Warrant
      shall
      have been exercised only in part, then, unless this Warrant has expired, the
      Company shall, at its expense, at the time of delivery of such certificates,
      deliver to the holder a new Warrant representing the number of shares with
      respect to which this Warrant shall not then have been exercised.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)
      Payment
      of Exercise Price.
      The
      holder shall pay the Exercise Price in immediately available funds.

     

    2. Period
      of Exercise.
      This
      Warrant may be exercised at any time or from time to time (an “Exercise Date”)
      during the period (the “Exercise Period”) beginning on (a) the date hereof and
      ending (b) at 5:00 p.m., Vancouver time, five years from the date
      hereof.

     

    3. Certain
      Agreements of the Company.
      The
      Company hereby covenants and agrees as follows:

     

    (a)
      Shares
      to be Fully Paid.
      All
      Warrant Shares will, upon issuance in accordance with the terms of this Warrant,
      be validly issued, fully paid and nonassessable and free from all taxes, liens,
      claims and encumbrances (except for restrictions existing under applicable
      securities laws).

     

    (b)
      Reservation
      of Shares.
      During
      the Exercise Period, the Company shall at all times have authorized, and
      reserved for the purpose of issuance upon exercise of this Warrant, a sufficient
      number of shares of Common Stock to provide for the exercise in full of this
      Warrant.

     

    (c)
      Successors
      and Assigns.
      This
      Warrant shall be binding upon any entity succeeding to the Company by merger,
      consolidation, or acquisition of all or substantially all of the Company’s
      assets or any other similar transaction.

     

    4. Antidilution
      Provisions.
      During
      the Exercise Period, the Exercise Price and the number of Warrant Shares
      issuable upon the exercise of the Warrants, shall be subject to adjustment
      from
      time to time as provided in this Section 4.

     

    In
      the
      event that any adjustment of the Exercise Price as required herein results
      in a
      fraction of a cent, such Exercise Price shall be rounded up or down to the
      nearest cent; provided that, in no event shall the Exercise Price per share
      be
      reduced below $0.01.

     

    (a)
      Subdivision
      or Combination of Common Stock.
      If the
      Company, at any time during the Exercise Period, subdivides (by any stock split,
      stock dividend, recapitalization, reorganization, reclassification or otherwise)
      its shares of Common Stock into a greater number of shares, then, after the
      date
      of record for effecting such subdivision, the Exercise Price in effect
      immediately prior to such subdivision will be proportionately reduced. If the
      Company, at any time during the Exercise Period, combines (by reverse stock
      split, recapitalization, reorganization, reclassification or otherwise) its
      shares of Common Stock into a smaller number of shares, then, after the date
      of
      record for effecting such combination, the Exercise Price in effect immediately
      prior to such combination will be proportionately increased.

     

    (b)
      Adjustment
      in Number of Shares.
      Upon
      each adjustment of the Exercise Price pursuant to the provisions of Sections
      4(a) and (c), the number of shares of Common Stock issuable upon exercise of
      this Warrant shall be appropriately increased or decreased to equal the quotient
      obtained by dividing (i) the product of (A) the Exercise Price in effect
      immediately prior to such adjustment, multiplied by (B) the number of shares
      of
      Common Stock issuable upon exercise of this Warrant immediately prior to such
      adjustment, by (ii) the adjusted Exercise Price.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    (c)
      Consolidation,
      Merger or Sale.
      In case
      of any consolidation of the Company with, or merger of the Company into, any
      other entity, or in case of any sale or conveyance of all or substantially
      all
      of the assets of the Company or other similar transaction other than in
      connection with a plan of complete liquidation of the Company at any time during
      the Exercise Period, then as a condition of such consolidation, merger or sale
      or conveyance, adequate provision will be made whereby the holder of this
      Warrant will have the right to acquire and receive upon exercise of this Warrant
      in lieu of the shares of Common Stock immediately theretofore acquirable upon
      the exercise of this Warrant, such shares of stock, securities, cash or assets
      as may be issued or payable with respect to or in exchange for the number of
      shares of Common Stock immediately theretofore acquirable and receivable upon
      exercise of this Warrant had such consolidation, merger or sale or conveyance
      not taken place. In any such case, the Company will make appropriate provision
      to cause the provisions of this Section 4 thereafter to be applicable as nearly
      as may be in relation to any shares of stock or securities thereafter
      deliverable upon the exercise of this Warrant. The Company will not effect
      any
      consolidation, merger or sale or conveyance of all or substantially all of
      its
      assets or other similar transaction unless prior to the consummation thereof,
      the successor entity (if other than the Company) assumes by written instrument
      (a copy of which shall be delivered to the holder of this Warrant) the
      obligations under this Warrant and the obligations to deliver to the holder
      of
      this Warrant such shares of stock, securities or assets as, in accordance with
      the foregoing provisions, the holder may be entitled to acquire. The provisions
      of this Section 4(c) shall also apply to successive transactions covered by
      this
      section.

     

    (d)
      Distribution
      of Assets.
      In case
      the Company shall declare or make any distribution of its cash or other assets
      (or rights to acquire its assets) to all holders of Common Stock as a partial
      liquidating dividend, stock repurchase, return of capital or otherwise
      (including any distribution to the Company’s stockholders of shares (or rights
      to acquire shares) of capital stock of a subsidiary) (a “Distribution”), at any
      time during the Exercise Period, then, upon exercise of this Warrant for the
      purchase of any or all of the shares of Common Stock subject hereto, the holder
      of this Warrant shall be entitled to receive its pro-rata amount of such assets
      (or such rights) as would have been payable to the holder had such holder been
      the holder of such shares of Common Stock on the record date for the
      determination of stockholders entitled to such Distribution.

     

    (e)
      Subsequent
      Equity Sales at Less Than The Exercise Price.
      

     

    (i) If
      the
      Company shall, at any time or from time to time, issue any shares of Common
      Stock (or be deemed to have issued shares of Common Stock as provided in Section
      4(e)(ii)) other than Excluded Securities (as defined below), without
      consideration or for a consideration per share less than the Exercise Price
      in
      effect immediately prior to each such issuance then the Exercise Price shall
      forthwith (except as provided in this Section 4(e)(i)) be lowered to a price
      equal to the quotient obtained by dividing:

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    (1) the
      total
      number of shares of Common Stock outstanding (including any shares of Common
      Stock deemed to have been issued pursuant to Section 4(e)(ii)(3)) (it being
      understood that the shares of Common Stock issuable upon exercise of this
      Warrant immediately prior to such issuance shall be deemed to be outstanding
      for
      all purposes of the computation required in this Section 4(e)(i)(1)),
      immediately prior to such issuance multiplied by the Exercise Price as in effect
      immediately prior to such issuance, plus 

     

    
      	
              (2)

            	
              the
                consideration received by the Company upon such issuance, by
                

            
	
              (3)

            	
              the
                total number of shares of Common Stock outstanding (including any
                shares
                of Common Stock deemed to have been issued pursuant to Section 4(e)(ii))
                (it being understood that the shares of Common Stock issuable upon
                exercise of this Warrant immediately prior to such issuance shall
                be
                deemed to be outstanding for all purposes of the computation required
                in
                this Section 4(e)(i)(3)), immediately after the issuance of such
                Common
                Stock.

            

    

     

    Following
      a reduction in the Exercise Price under this Section 4(e)(i), the total number
      of Warrant Shares issuable hereunder shall be proportionately increased such
      that the aggregate Exercise Price payable hereunder, after taking into account
      the decrease in the Exercise Price per Warrant Share, shall be equal to the
      aggregate Exercise Price for all Warrant Shares prior to such
      adjustment.

    

    (ii) For
      the
      purposes of any adjustment of the Exercise Price pursuant to Section 4(e)(i),
      the following provisions shall be applicable:

     

    (1) In
      the
      case of the issuance of Common Stock for cash, the consideration shall be deemed
      to be the amount of cash paid therefor before deducting therefrom any discounts,
      commissions or other expenses allowed, paid or incurred by the Company for
      any
      underwriting or otherwise in connection with the issuance and sale
      thereof.

     

    (2) In
      the
      case of the issuance of Common Stock for a consideration in whole or in part
      other than cash, the consideration other than cash be shall be deemed to be
      the
      fair market value thereof as determined in good faith by the Board, irrespective
      of any accounting treatment.

     

    (3) In
      the
      case of the issuance of (x) options to purchase or rights to subscribe for
      Common Stock, (y) securities by their terms convertible into or exchangeable
      for
      Common Stock or (z) options to purchase or rights to subscribe for such
      convertible or exchangeable securities:

     

    (i) the
      aggregate maximum number of shares of Common Stock deliverable upon exercise
      of
      such options to purchase or rights to subscribe for Common Stock shall be deemed
      to have been issued at the time such options or rights were issued and for
      a
      consideration equal to the consideration (determined in the manner provided
      in
      Sections 4(e)(ii)(1), 4(e)(ii)(2) and 4(e)(ii)(3)), if any, received by the
      Company upon the issuance of such options or rights plus the minimum purchase
      price provided in such options or rights for the Common Stock covered
      thereby;

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    (ii) the
      aggregate maximum number of shares of Common Stock deliverable upon conversion
      of or in exchange for any such convertible or exchangeable securities or upon
      the exercise of options to purchase or rights to subscribe for such convertible
      or exchangeable securities and subsequent conversion or exchange thereof shall
      be deemed to have been issued at the time such securities were issued or such
      options or rights were issued and for a consideration equal to the consideration
      received by the Company for any such securities and related options or rights
      (excluding any cash received on account of accrued interest or accrued
      dividends), plus the additional consideration, if any, to be received by the
      Company upon the conversion or exchange of such securities or the exercise
      of
      any related options or rights (the consideration in each case to be determined
      in the manner provided in Sections 4(e)(ii)(1), 4(e)(ii)(2) and
      4(e)(ii)(3));

     

    (iii) on
      any
      change in the number of shares or exercise price of Common Stock deliverable
      upon exercise of any options or rights or conversions of or exchanges for such
      securities, other than a change resulting from the anti-dilution provisions
      thereof, the Exercise Price shall forthwith be readjusted to the Exercise Price
      as would have been obtained had the adjustment made upon the issuance of such
      options, rights or securities not converted prior to such change or options
      or
      rights related to such securities not converted prior to such change been made
      upon the basis of such change;

     

    (iv) on
      the
      expiration of any such options or rights, the termination of any such rights
      to
      convert or exchange or the expiration of any options or rights related to such
      convertible or exchangeable securities in each case having been issued by the
      Company, the Exercise Price shall forthwith be readjusted to the Exercise Price
      as would have been obtained had the adjustment made upon the issuance of such
      options, rights, securities or options or rights related to such securities
      been
      made on the basis that the only shares of Common Stock so issued were the shares
      of Common Stock, if any, actually issued or sold upon the exercise of such
      options or rights, upon the conversion or exchange of such securities, or upon
      the exercise of the options or rights related to such securities and subsequent
      conversion or exchange thereof; and

     

    (v) no
      further adjustment of the Exercise Price, as adjusted upon the issuance of
      such
      options or rights, rights to convert or exchange or options or rights related
      to
      such convertible or exchangeable securities.

     

    (f)
      Notice
      of Adjustment.
      Upon
      the occurrence of any event which requires any adjustment of the Exercise Price
      then, and in each such case, the Company shall give notice thereof to the holder
      of this Warrant, which notice shall state the Exercise Price resulting from
      such
      adjustment and the increase or decrease in the number of Warrant Shares issuable
      upon exercise of this Warrant, setting forth in reasonable detail the method
      of
      calculation and the facts upon which such calculation is based. Such calculation
      shall be certified by the chief financial officer of the Company.

     

    (g)
      Minimum
      Adjustment of the Exercise Price.
      No
      adjustment of the Exercise Price shall be made in an amount of less than 1%
      of
      the Exercise Price in effect at the time such adjustment is otherwise required
      to be made, but any such lesser adjustment shall be carried forward and shall
      be
      made at the time and together with the next subsequent adjustment which,
      together with any adjustments so carried forward, shall amount to not less
      than
      1% of such Exercise Price.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    (h)
      No
      Fractional Shares.
      No
      fractional shares of Common Stock are to be issued upon the exercise of this
      Warrant, but the Company shall pay a cash adjustment in respect of any
      fractional share which would otherwise be issuable in an amount equal to the
      same fraction of the closing bid price of a share of Common Stock on the
      Principal Market on the date of such exercise.

     

    (i)
      Other
      Notices.
      In case
      at any time:

     

    (i) the
      Company shall declare any dividend upon the Common Stock payable in shares
      of
      stock of any class or make any other distribution (including dividends or
      distributions payable in cash out of retained earnings) to the holders of the
      Common Stock;

     

    (ii) the
      Company shall offer for subscription pro rata to the holders of the Common
      Stock
      any additional shares of stock of any class or other rights;

     

    (iii) there
      shall be any capital reorganization of the Company, or reclassification of
      the
      Common Stock, or consolidation or merger of the Company with or into, or sale
      of
      all or substantially all of its assets to, another corporation or entity;
      or

     

    (iv) there
      shall be a voluntary or involuntary dissolution, liquidation or winding up
      of
      the Company;

     

    then,
      in
      each such case, the Company shall give to the holder of this Warrant (a) notice
      of the date or estimated date on which the books of the Company shall close
      or a
      record shall be taken for determining the holders of Common Stock entitled
      to
      receive any such dividend, distribution, or subscription rights or for
      determining the holders of Common Stock entitled to vote in respect of any
      such
      reorganization, reclassification, consolidation, merger, sale, dissolution,
      liquidation or winding-up and (b) in the case of any such reorganization,
      reclassification, consolidation, merger, sale, dissolution, liquidation or
      winding-up, notice of the date (or, if not then known, a reasonable estimate
      thereof by the Company) when the same shall take place. Such notice shall also
      specify the date on which the holders of Common Stock shall be entitled to
      receive such dividend, distribution, or subscription rights or to exchange
      their
      Common Stock for stock or other securities or property deliverable upon such
      reorganization, reclassification, consolidation, merger, sale, dissolution,
      liquidation, or winding-up, as the case may be. Such notice shall be given
      at
      least fifteen (15) days prior to the record date or the date on which the
      Company’s books are closed in respect thereto. Failure to give any such notice
      or any defect therein shall not affect the validity of the proceedings referred
      to in clauses (i), (ii), (iii) and (iv) above. Notwithstanding the foregoing,
      the Company may publicly disclose the substance of any notice delivered
      hereunder prior to delivery of such notice to the holder of this
      Warrant.

     

    (j)
      Certain
      Events.
      If, at
      any time during the Exercise Period, any event occurs of the type contemplated
      by the adjustment provisions of this Section 4 but not expressly provided for
      by
      such provisions, the Company will give notice of such event as provided in
      Section 4 hereof, and the Company’s Board of Directors will make an appropriate
      adjustment in the Exercise Price and the number of shares of Common Stock
      acquirable upon exercise of this Warrant so that the rights of the holder shall
      be neither enhanced nor diminished by such event.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    (k)
      Certain
      Definitions.

     

    (i) “Business
      Day” means any day, other than a Saturday or Sunday or a day on which banking
      institutions in the State of New York are authorized or obligated by law,
      regulation or executive order to close.

     

    (ii) “Common
      Stock,” for purposes of this Section 4, includes the Common Stock and any
      additional class of stock of the Company having no preference as to dividends
      or
      distributions on liquidation, provided that the shares purchasable pursuant
      to
      this Warrant shall include only Common Stock in respect of which this Warrant
      is
      exercisable, or shares resulting from any subdivision or combination of such
      Common Stock, or in the case of any reorganization, reclassification,
      consolidation, merger, or sale of the character referred to in Section 4(c)
      hereof, the stock or other securities or property provided for in such
      Section.

     

    (iii) “Common
      Stock Equivalents” means any securities of the Company which would entitle the
      holder thereof to acquire at any time Common Stock, including, without
      limitation, any debt, preferred stock, rights, options, warrants or other
      instrument that is at any time convertible into or exercisable or exchangeable
      for, or otherwise entitles the holder thereof to receive, Common
      Stock.

     

    (iv) “Excluded
      Securities” shall mean (i) any securities issued or issuable to employees,
      officers, directors of, or contractors, consultants or advisors to, the Company
      pursuant to stock purchase or stock option plans, stock bonuses or awards,
      contracts or other arrangements and any shares of Common Stock issuable upon
      exercise of any such securities, (ii) stock issued upon the conversion or
      exercise of any convertible securities, options, warrants or other rights to
      acquire capital stock of the Company issued on or before the date hereof,
      (iii) stock issued in connection with any stock split, stock dividend or
      recapitalization by the Company, (iv)  securities issued pursuant to
      commercial credit arrangements, equipment financings or similar transactions,
      (v) stock issued upon exercise of this Warrant, and (vi) securities
      issued pursuant to strategic transactions with an operating company in a
      business synergistic with the business of the Company and in which the Company
      receives benefits in addition to the investment of funds or pursuant to
      acquisitions or equipment leases, but shall not include a transaction in which
      the Company is issuing securities primarily for the purpose of raising capital
      or to an entity whose primary business is investing in securities.

     

    (i) “Principal
      Market” means the Over-the-Counter Bulletin Board or, if the Common Stock is not
      traded on the Over-the-Counter Bulletin Board, then the principal securities
      exchange or trading market for the Common Stock.

     

    5. Issue
      Tax.
      The
      issuance of certificates for Warrant Shares upon the exercise of this Warrant
      shall be made without charge to the holder of this Warrant or such shares for
      any issuance tax or other costs in respect thereof, provided that the Company
      shall not be required to pay any tax which may be payable in respect of any
      transfer involved in the issuance and delivery of any certificate in a name
      other than the holder of this Warrant.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    6. No
      Rights or Liabilities as a Stockholder.
      This
      Warrant shall not entitle the holder hereof to any voting rights or other rights
      as a stockholder of the Company. No provision of this Warrant, in the absence
      of
      affirmative action by the holder hereof to purchase Warrant Shares, and no
      mere
      enumeration herein of the rights or privileges of the holder hereof, shall
      give
      rise to any liability of such holder for the Exercise Price or as a stockholder
      of the Company, whether such liability is asserted by the Company or by
      creditors of the Company.

     

    7. Transfer,
      Exchange, Redemption and Replacement of Warrant.

     

    (a)
      Restriction
      on Transfer.
      This
      Warrant and the rights granted to the holder hereof are transferable in whole
      or
      in part, at any one time, upon surrender of this Warrant, together with a
      properly executed assignment in the form attached hereto, at the office or
      agency of the Company referred to in Section 7(e). Until due presentment for
      registration of transfer on the books of the Company, the Company may treat
      the
      registered holder hereof as the owner and holder hereof for all purposes, and
      the Company shall not be affected by any notice to the contrary.

     

    (b)
      Warrant
      Exchangeable for Different Denominations.
      This
      Warrant is exchangeable, upon the surrender hereof by the holder hereof at
      the
      office or agency of the Company referred to in Section 7(e) below, for new
      Warrants of like tenor of different denominations representing in the aggregate
      the right to purchase the number of shares of Common Stock which may be
      purchased hereunder, each of such new Warrant to represent the right to purchase
      such number of shares as shall be designated by the holder hereof at the time
      of
      such surrender.

     

    (c)
      Replacement
      of Warrant.
      Upon
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction, or mutilation of this Warrant and, in the case of any such loss,
      theft, or destruction, upon delivery of an indemnity agreement reasonably
      satisfactory in form and amount to the Company, or, in the case of any such
      mutilation, upon surrender and cancellation of this Warrant, the Company, at
      its
      expense, will execute and deliver, in lieu thereof, a new Warrant of like
      tenor.

     

    (d)
      Cancellation;
      Payment of Expenses.
      Upon
      the surrender of this Warrant in connection with any transfer, exchange, or
      replacement as provided in this Section 7, this Warrant shall be promptly
      canceled by the Company. The Company shall pay all taxes (other than securities
      transfer taxes) and all other expenses (other than legal expenses, if any,
      incurred by the holder or transferees) and charges payable in connection with
      the preparation, execution, and delivery of Warrants pursuant to this Section
      7.

     

    (e)
      Warrant
      Register.
      The
      Company shall maintain, at its principal executive offices (or such other office
      or agency of the Company as it may designate by notice to the holder hereof),
      a
      register for this Warrant, in which the Company shall record the name and
      address of the person in whose name this Warrant has been issued, as well as
      the
      name and address of each transferee and each prior owner of this
      Warrant.

     

    (f)
      Exercise
      or Transfer Without Registration.
      If, at
      the time of the surrender of this Warrant in connection with any exercise,
      transfer, or exchange of this Warrant, this Warrant (or, in the case of any
      exercise, the Warrant Shares issuable hereunder), shall not be registered under
      the Securities Act and under applicable state securities or blue sky laws,
      the
      Company may require, as a condition of allowing such exercise, transfer, or
      exchange, (i) that the holder or transferee of this Warrant, as the case may
      be,
      furnish to the Company a written opinion of counsel (which opinion shall be
      reasonably acceptable to the Company and shall be in form, substance and scope
      customary for opinions of counsel in comparable transactions) to the effect
      that
      such exercise, transfer, or exchange may be made without registration under
      the
      Securities Act and under applicable state securities or blue sky laws, (ii)
      that
      the holder or transferee execute and deliver to the Company an investment letter
      in form and substance reasonably acceptable to the Company and (iii) that the
      transferee be an “accredited investor” as defined in Rule 501(a) promulgated
      under the Securities Act; provided, that no such opinion, letter, or status
      as
      an “accredited investor” shall be required in connection with a transfer
      pursuant to Rule 144 under the Securities Act.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    8. Notices.
      Any
      notices required or permitted to be given under the terms of this Warrant shall
      be delivered personally or by courier or by confirmed telecopy, and shall be
      effective five (5) days after being placed in the mail, if mailed, or upon
      receipt or refusal of receipt, if delivered personally or by courier, or by
      confirmed telecopy, in each case addressed to a party. The addresses for such
      communications shall be:

     

    
      	
              If
                to Leisurecorp LLC.

            
	
              C/o
                Istithmar PJSC

              Emirate
                Tower - Level 4

            
	
              Dubai,
                United Arab Emirates

            
	 
	
              Attn:
                David Spencer 

              Chief
                Executive Officer

            
	
              Telephone:
                +9714-3687630

            
	
              Telecopier:
                +9714-3687654

            

    

    

    If
      to any
      other holder, at such address as such holder shall have provided in writing
      to
      the Company, or at such other address as such holder furnishes by notice given
      in accordance with this Section 9.

     

    10. Governing
      Law; Venue.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Warrant shall be governed by and construed and enforced in accordance
      with the laws of the State of New York. Each party agrees that all legal
      proceedings concerning the interpretations, enforcement and defense of the
      transactions contemplated by this Warrant shall be commenced exclusively in
      the
      state and federal courts sitting in the City of New York. Each party hereby
      irrevocably submits to the exclusive jurisdiction of the state and federal
      courts sitting in the City of New York, borough of Manhattan for the
      adjudication of any dispute hereunder, and hereby irrevocably waives, and agrees
      not to assert in any suit, action or proceeding, any claim that it is not
      personally subject to the jurisdiction of any such court, that such suit, action
      or proceeding is improper or is an inconvenient venue for such proceeding.
      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 via registered or certified mail or overnight delivery (with evidence
      of
      delivery) to such party at the address in effect for notices to it under this
      Warrant and agrees that such service shall constitute good and sufficient
      service of process and notice thereof.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    11. Miscellaneous.

     

    (a)
      This
      Warrant and any provision hereof may only be amended by an instrument in writing
      signed by the Company and the holder hereof.

     

    (b)
      The
      descriptive headings of the several Sections of this Warrant are inserted for
      purposes of reference only, and shall not affect the meaning or construction
      of
      any of the provisions hereof.

     

    (c)
      In
      case any one or more of the provisions of this Warrant shall be invalid or
      unenforceable in any respect, the validity and enforceability of the remaining
      terms and provisions of this Warrant shall not in any way be affected or
      impaired thereby and the parties will attempt in good faith to agree upon a
      valid and enforceable provision which shall be a commercially reasonable
      substitute therefore, and upon so agreeing, shall incorporate such substitute
      provision in this Warrant.

     

    (d)
      Subject to the restrictions on transfer set forth herein, this Warrant may
      be
      assigned by the holder. This Warrant may not be assigned by the Company. This
      Warrant shall be binding on and inure to the benefit of the parties hereto
      and
      their respective successors and assigns. Subject to the preceding sentence,
      nothing in this Warrant shall be construed to give to any Person other than
      the
      Company and the holder any legal or equitable right, remedy or cause of action
      under this Warrant.

     

    (e)
      The
      Company will not, by amendment of its governing documents or through any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms of this Warrant, but will at
      all
      times in good faith assist in the carrying out of all such terms and in the
      taking of all such action as may be necessary or appropriate in order to protect
      the rights of the holder hereof against impairment. Without limiting the
      generality of the foregoing, the Company (i) will not increase the par value
      of
      any Warrant Shares above the amount payable therefore on such exercise, (ii)
      will take all such action as may be reasonably necessary or appropriate in
      order
      that the Company may validly and legally issue fully paid and nonassessable
      Warrant Shares on the exercise of this Warrant, and (iii) will not close its
      stockholder books or records in any manner which interferes with the timely
      exercise of this Warrant.

     

    (f)
      In
      the event that the Company fails to observe or perform any covenant or agreement
      to be observed or performed under this Warrant, the holder of this Warrant
      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 Warrant or for
      an
      injunction against the breach of any such term or in aid of the exercise of
      any
      power granted in this Warrant 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 Warrant 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
      Warrant or now or hereafter available at law, in equity, by statute or
      otherwise.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
      authorized officer.

     

    
      	
              GPS
                INDUSTRIES, INC.

            
	
              By:
                _________________________

            
	
              Name:_______________________

            
	
              Title:________________________

            

    

    

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    FORM
      OF EXERCISE AGREEMENT

     

    (To
      be Executed by the holder in order to Exercise the
      Warrant)

     

    
      	
              To: GPS
                Industries, Inc.

            
	
              Suite
                214, 5500 - 152nd Street

            
	
              Surrey,
                British Columbia V3S 8E7

            
	
              Telecopier: (604)
                576-7460

            
	
              Attn: Chief
                Executive Officer

            

    

     

    The
      undersigned hereby irrevocably exercises the right to purchase _____________
      shares of the Common Stock of GPS INDUSTRIES, INC., a corporation organized
      under the laws of the State of Nevada (the “Company”), and tenders herewith
      payment of the Exercise Price in full, in the amount of $_____________, in
      cash,
      by certified bank check or by wire transfer for the account of the
      Company.

     

    The
      undersigned agrees not to offer, sell, transfer or otherwise dispose of any
      Common Stock obtained on exercise of the Warrant, except under circumstances
      that will not result in a violation of the Securities Act of 1933, as amended,
      or any state securities laws.

     

    o  
The
      undersigned requests that the Company cause its transfer agent to electronically
      transmit the Common Stock issuable pursuant to this Exercise Agreement to the
      account of the undersigned or its nominee (which is _________________) with
      DTC
      through its Deposit Withdrawal Agent Commission System (“DTC
      Transfer”).

     

    o   In
      lieu of receiving the shares of Common Stock issuable pursuant to this Exercise
      Agreement by way of DTC Transfer, the undersigned hereby requests that the
      Company cause its transfer agent to issue and deliver to the undersigned
      physical certificates representing such shares of Common Stock.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    The
      undersigned requests that a Warrant representing any unexercised portion hereof
      be issued, pursuant to the Warrant, in the name of the Holder and delivered
      to
      the undersigned at the address set forth below:

     

    
      	
              Dated:_________________

            	
              ____________________________________

            
	 	
              Signature
                of Holder

            
	 	 
	 	
              ____________________________________

            
	 	
              Name
                of Holder (Print)

            
	 	
              Address:

            
	 	
              ____________________________________

            
	 	
              ____________________________________

            
	 	
              ____________________________________

            

    

    

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    FORM
      OF ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns, and transfers all the rights
      of
      the undersigned under the attached Warrant, with respect to the number of shares
      of Common Stock covered thereby issuable pursuant to the attached Warrant set
      forth herein below, to:

     

    
      	
              Name
                of Assignee

            	
              Address

            	
              No
                of Shares

            

    

     

    and
      hereby irrevocably constitutes and appoints _________________________________
      as
      agent and attorney-in-fact to transfer said Warrant on the books of the
      within-named corporation, with full power of substitution in the
      premises.

     

    
      	
              Dated:
                _____________________, ____

            
	
              In
                the presence of

            
	
              __________________

            

    

    

     

    
      	
              Name:
                 

            
	 
	
              Signature:
                 

            
	
              Title
                of Signing Officer or Agent (if any):

            
	 
	 
	
              Address:
                ________________________

            
	 
	 
	
              Note: The
                above signature should correspond exactly with the name on the face
                of the
                within Warrant

            

    

     

    
      
        
        

      

      
        -14-

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