PROMISSORY NOTE
THIS
NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE PLEDGED, SOLD, ASSIGNED
OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH
RESPECT THERETO UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW OR
AN
EXEMPTION FROM SUCH REGISTRATION.
|
$10,000,000
|
New
York, New York
|
|
May
8, 2007
|
FOR
VALUE
RECEIVED, the undersigned, Leisurecorp LLC, a Dubai limited liability company
(the "Borrower"), hereby promises to pay the order of GPS Industries, Inc.,
a
Nevada corporation, with principal executive offices located at Xxxxx 000,
0000
000xx Xxxxxx, Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X00 X00 ("Lender"), the principal
sum of TEN MILLION U.S. DOLLARS ($10,000,000), at the times, at the place,
and
in the manner provided in this Note.
The
Borrower shall repay the principal of this Note as follows:
(1)
$2,000,000
shall be due and payable on June 30, 2007 (“Payment #1”);
(2)
$4,000,000
shall be due and payable on October 31, 2007 (“Payment #2”); and
(3)
$4,000,000
shall be due and payable on December 31, 2007 (“Payment #3”);
provided
that, if such day falls on a Saturday, Sunday or banking holiday in New York,
such amounts shall be due instead on the next business day.
The
principal of this Note may be prepaid at any time, in whole or in part, without
penalty or premium.
This
Note
shall not bear interest when no Event of Default has occurred and is continuing.
Following the occurrence and during the continuance of an Event of Default,
the
unpaid principal balance of this Note then due and owing shall bear interest
at
a rate of six percent (6%) per annum. All such interest shall be computed
on the
basis of a year of 365 days and the number of days actually elapsed. Anything
herein to the contrary notwithstanding, if an Event of Default occurs, all
interest accruing following the occurrence and during the continuance of
such an
Event of Default shall be payable at the rate provided above in cash on the
Lender's demand.
Notwithstanding
the foregoing or any other provision contained in this Note, nothing herein
contained shall authorize or permit the exaction or payment of interest by
the
Borrower where the same would be unlawful or prohibited by any applicable
law or
would violate the applicable usury law of any jurisdiction. In any such event,
this Note shall automatically be deemed amended to permit interest charged
at an
amount equal to, but not greater than, the maximum permitted by
law.
All
principal (and any interest) shall be payable in the lawful money of the
United
States at the offices of Lender, or at such other place as may be designated
in
writing by the holder of this Note. All payments hereunder shall be made
without
reduction by reason of set-off, counter-claim or otherwise.
This
Note
is executed and delivered as consideration for the purchase by Xxxxxx of
the
Borrower's Series B Convertible Preferred Stock and Warrants pursuant to
that
certain Securities Purchase Agreement, dated as of April 27, 2007. This Note
is
secured by that certain Pledge and Security Agreement, of even date herewith,
from the Borrower in favor of the Lender (the “Security
Agreement”).
An
“Event
of Default” shall mean that Borrower fails to make a payment of principal on
this Note within 15 days of the scheduled date on which such principal payment
is due under this Note.
Should
the indebtedness represented by this Note, or any part thereof, be collected
in
law or in equity, or in bankruptcy, receivership or in any other court
proceedings, or this Note be placed in the hands of attorneys for collection
after default, the Borrower agrees to pay, in addition to the principal,
interest and other amounts due and payable hereon and hereunder, all costs
and
expenses incurred in connection with such collection, including, without
limitation, reasonable attorneys’ and collection fees.
The
Borrower hereby waives, to the fullest extent permitted by law, diligence,
presentment, demand for payment, protest, notice of dishonor and any and
all
other notices or demands of every kind and the right to plead the statute
of
limitations as a defense to any action hereunder. No delay on the part of
the
holder hereof in exercising any rights hereunder shall operate as a waiver
of
such rights.
All
notices and other communications provided for hereunder shall be in writing
and
shall be sent by (a) registered or certified mail postage prepaid, return
receipt requested (b) messenger or (c) telecopy, followed by first-class
mail,
to the party to whom addressed at the following respective addresses or telecopy
numbers or to such other address or telecopy number as the party affected
may
hereafter designate:
(i)
If
to the
Lender:
Suite
214
0000
000xx Xxxxxx
Surrey,
British Columbia
Canada
V35 S59
Attn:
Chief Executive Officer
Telecopier:
(000) 000-0000
(ii)
If
to the
Borrower:
Xxxxx
Xxxxxxx
Chief
Executive Officer
Istithmar
Leisure
P.O.
Box
17000, Dubai, UAE
Telephone:
x0000-0000000
Telecopy:
x0000-0000000
This
Note
may not be changed orally, but only by an agreement in writing, which is
signed
by the party or parties against whom enforcement of any waiver, change,
modification or discharge is sought.
2
The
terms
and conditions of this Note shall inure to the benefit of and be binding
upon
the respective successors and assigns of the parties. Nothing in this Note,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Note, except as expressly
provided in this Note.
This
Note
shall not be subject to offset or deduction for any reason.
THIS
NOTE
AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND XXXXXX HEREUNDER SHALL
BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NE W
YORK.
3
LENDER:
LEISURECORP
LLC
By:________________________________
Name:
Title:
[SIGNATURE
PAGE TO PROMISSORY NOTE]
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