AGREEMENT
EXHIBIT
10.4
AGREEMENT
Agreement
(this “Agreement”) dated as of November 8, 2006 by and among GPS
Industries, Inc., a Nevada corporation (the “Company”) and each of the note
purchasers set forth on the signature pages hereto (the “Buyers”) is made with
reference to the following:
A. The
Company and Buyers have entered into a Securities Purchase Agreement dated
as of
September 20, 2005 (the “Purchase Agreement”) pursuant to which the Buyers
purchased from the Company secured convertible notes of the Company (the
“Notes”) in the initial aggregate amount of $3,720,000 (including prepaid
interest) which aggregate amount (including unpaid interest) as of the date
hereof is $2,527,603.
B. The
Company wishes to prepay the Notes and the Buyers are willing to accept the
prepayment in full satisfaction of the Notes and all other obligations of
Company to NIR of any nature including pursuant to the Purchase Agreement and
all documents executed in connection therewith.
C. Defined
terms not expressly defined herein shall have the same meanings as ascribed
to
them in the Purchase Agreement.
NOW
THEREFORE, the Company and each of Buyers hereby agree as follows:
1. Prepayment
of the Notes.
The
Company agrees to pay, and the Buyers agree to accept, in full satisfaction
of
all amounts owing under the Notes, including outstanding principal amount and
accrued and unpaid interest thereon, the amount of $2,800,000 (the “Payoff
Amount”). The parties acknowledge that the Payoff Amount is less than the
Optional Prepayment Amount set forth in Section 5.1 of each of the Notes.
In consideration of the Buyers accepting such reduced amount, within
five (5) business days from the payment of the Payoff Amount, the Company
shall deliver to the Buyers (pro rata in accordance with the amount being paid
to the applicable Buyer) five year warrants to purchase an aggregate of
3,000,000 shares of the Company’s common stock at an exercise price of $0.122
per share (the “New Warrants”). The New Warrants will be substantially in the
form of the warrants previously delivered to the Buyers (the “Existing
Warrants”) except that the New Warrants will contain customary piggyback
registration rights subject to priority to the New Investors (as defined below)
in the case of cutbacks. The Payoff Amount shall be paid to the Buyers by wire
transfer within five (5) business days from the execution of this Agreement
by the parties in accordance with instructions to be provided to the Company
by
the Buyers.
2. Release.
Subject
only to the payment of the Payoff Amount and delivery of Warrants, each of
the
Buyers hereby agrees to release the Company and each entity providing to the
Company funds for the Payoff Amount (the “New Investors”) and their respective
officers, agents, employees, subsidiaries, related entities, affiliates,
divisions, successors, persons acting on their behalf in connection with the
matter set forth above and/or assigns, of and from any and all claims,
counterclaims, rights, demands, costs, damages, losses, liabilities, actions
and
causes of action including attorneys’ fees and court costs of every nature and
description, whether known or unknown, suspected or unsuspected, foreseen or
unforeseen, real or imaginary, actual or potential, and whether arising in
tort
or contract or at law or in equity, under common law, state law, federal law
or
any other law, or otherwise, including but not limited to the Purchase
Agreement, the Notes, the Security Agreement, the Intellectual Property Security
Agreement, the Existing Warrants, the Guaranty and Pledge Agreement and all
documents and instruments executed pursuant thereto.
3. Representations
and Warranties of the Company.
The
Company represents and warrants to each Buyer that: (i) it has all
requisite corporate power and authority to enter into and perform this Agreement
and to consummate the transactions contemplated hereby; (ii) that the
execution and delivery of this Agreement has been duly authorized by this
Company’s Board of Directors and no further consent or authorization of Company
or its Board of Directors is required; and (iii) this Agreement constitutes
the legal, valid and binding obligation of the Company enforceable against
the
Company in accordance with its terms.
4. Representations
of Buyers.
Each of
Buyers represents or warrants to the Company that: (i) such Buyer has all
requisite power and authority to enter into and perform this Agreement;
(ii) the execution and delivery of this Agreement and the consummation by
such Buyer of the transactions contemplated hereby have been duly authorized
and
no further consent or authorization of Buyer or its Board of Directors, managers
or its equity holders is required; (iii) this Agreement constitutes the
legal, valid and binding obligation of such Buyer enforceable against such
Buyer
in accordance with its terms; and (iv) such Buyer has not assigned,
transferred, sold or pledged the Note issued to such Buyer and such Buyer has
the right and authority to accept in full payment of the applicable Note the
Prepayment Amount applicable thereto.
5. Waiver.
Without
limiting the scope of the release hereunder, each Buyer hereby expressly waives
any claim that such Buyer may have pursuant to the Purchase Agreement or the
applicable Note, including, without limitation, any requirement that Company
provide such Buyer a notice with respect to any Future Offerings or that the
Company failed to honor any conversion requests.
6. Release
of Security; Delivery of Notes and Stock.
Upon
payment of Payoff Amount and delivery of the New Warrants, the security interest
granted to each of Buyers with respect to any property of the Company shall
be
automatically terminated and the Buyers shall promptly execute any and all
documents required and take any and all reasonable actions to effect such
termination. In connection herewith, each Buyer hereby appoints the Company
its
attorney-in-fact, to file all termination statements with respect to any
security interest or lien over the Company’s assets or take such other action to
effect such termination or release of security interest. Additionally, the
Buyers shall promptly return to any pledgor of securities any stock pledged
by
such pledgor in connection with the Notes pursuant to the Guaranty and Pledge
Agreement, and shall promptly deliver to the Company the original of the Notes
marked cancelled.
7. Miscellaneous.
(a) This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which shall constitute one and the same Agreement
and shall become effective when counterparts have been signed by each party
and
delivered to the other parties. This Agreement, once executed by a party, may
be
delivered to any other party hereto by facsimile transmission of a copy of
this
Agreement bearing the signature of the party so delivering this
Agreement.
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(b) Entire
Agreement.
This
Agreement contains the entire understanding of the parties with respect to
the
matters covered herein.
(c) Amendments.
No
provision of this Agreement may be amended or waived other than by an instrument
in writing signed by the parties hereto and by the New Investors.
(d) Successors
and Assignees.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns. Neither the Company nor any Buyer shall assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the other.
IN
WITNESS WHEREOF, the undersigned Buyers and Company have caused this Agreement
to be duly executed as of the date first above written.
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Dated: ___________________,
2006
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By:
Xxxxxx
X. Xxxxxx, Xx.
Chief
Executive Officer
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BUYERS:
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Dated: ___________________,
2006
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AJW
PARTNERS, LLC
By:
SMS
GROUP, LLC
Its:
By:
Xxxx
X. Xxxxxxxx
Manager
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Dated: ___________________,
2006
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AJW
OFFSHORE, LTD.
By:
FIRST
STREET MANAGER II, LLC
Its:
By:
Xxxx
X. Xxxxxxxx
Manager
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Dated: ___________________,
2006
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AJW
QUALIFIED PARTNERS, LLC
By:
AJW
MANAGER, LLC
Its:
By:
Xxxx
X. Xxxxxxxx
Manager
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Dated: ___________________,
2006
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NEW
MILLENNIUM CAPITAL
PARTNERS II,
LLC
By:
FIRST
STREET MANAGER II, LLP
Its:
By:
Xxxx
X. Xxxxxxxx
Manager
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