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First Amendment To Loan And Security Agreement

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Governing Law: Texas     Date: 5/8/2008
Industry: Business Services     Sector: Services

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This FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this   Amendment ”) is entered into effective April 30, 2008, by and between SILICON VALLEY BANK (“ Bank ”) and GPS INDUSTRIES, INC. , a Nevada corporation, (“ Borrower ”) .
A.   Bank and Borrower have entered into that certain Loan and Security Agreement dated as of February 28, 2008 (as may from time to time be amended, modified, supplemented or restated, collectively the “ Loan Agreement ”). Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.
B.   Borrower is currently in default under the Loan Agreement following the death of Guarantor Douglas J. Wood (the “ Existing Default ”).
C.   Borrower is also in default for its failure to deliver its financial statements required by Section 6.2 of the Loan Agreement for month ending February 29, 2008 (the “ Delivery Default ”).
D.   Borrower has requested that Bank: (i) increase the amount of the Revolving Line to $6,500,000, (ii) forbear from exercising its rights and remedies against Borrower from the date hereof for the Existing Default through July 31, 2008 (the “ Forbearance Period ”), and (iii) waive the Delivery Default.
E.   Although Bank is under no obligation to do so, Bank is willing to make the changes set forth herein, on all on the terms and conditions set forth in this Amendment and so long as Borrower complies with the terms, covenants and conditions set forth in this Amendment in a timely manner.
Now, Therefore, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
1.   Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.
2.   Forbearance.
2.1.   Forbearance Period . So long as no Event of Default, other than the Existing Default, occurs, subject to the terms and conditions set forth herein, Bank shall forbear from filing any legal action or instituting or enforcing any rights and remedies it may have against Borrower through the Forbearance Period. Except as expressly provided herein, this Amendment does not constitute a waiver or release by Bank of any Obligations or of any existing Event of Default, or any Event of Default which may arise in the future after the date of execution of this Amendment. Borrower understands that Bank has made no commitment and is under no obligation whatsoever to grant any additional extensions of time at the end of the Forbearance Period.

2.2.   Forbearance Terms . Repayment and performance of all obligations of Borrower to Bank under the Loan Agreement and this Amendment shall be secured by the Collateral.
3.   Limitation of Forbearance .
3.1.   This Amendment is effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to, other than as specifically set forth herein, (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under or in connection with any Loan Document.
3.2.   This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents are hereby ratified and confirmed and shall remain in full force and effect.
4.   Waiver. Subject to the terms of Section 10 below, Bank hereby waives (i) the Delivery Default. Except as provided in the above described default and except as otherwise set forth herein, Bank's agreement to waive the Delivery Default and the foregoing covenants (1) in no way shall be deemed an agreement by Bank to waive Borrower's compliance with the above-described covenants as of all subsequent dates, and (2) shall not limit or impair the Bank's right to demand strict performance of these covenants as of all other subsequent dates, and (3) shall not limit or impair Bank's right to demand strict performance of all other covenants as of any date.
5.   Amendments .
5.1.   Definitions . The following definitions are either amended and restated in their entirety or inserted, as applicable:
Borrowing Base ” is the lesser of (a) the maximum principal amount guaranteed by Guarantor pursuant to the Guaranty, plus the sum of, without duplication, (i) the Value of the Pledged CD, (ii) the Value of any certificates of deposit pledged to Bank by Hansen to secure the Obligations, and (iii) the Value of any certificates of deposit pledged to Bank by Great White to secure the Obligations, or (b) $6,500,000.

Great White ” is Great White Shark Enterprises, LLC, a Florida limited liability company.
Revolving Line ” is an Advance or Advances in an amount equal to Six Million Five Hundred Thousand Dollars ($6,500,000).
Value ” shall mean with respect to any certificates of deposit pledged to Bank to secure the Obligations, including, but not limited to, any Pledged CD, on any date, a dollar value at the face amount thereof.
6.   Representations and Warranties. To induce Bank to enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:
6.1.   Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default other than the Existing Default has occurred and is continuing;
6.2.   Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement;
6.3.   The organizational documents of Borrower delivered to Bank on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;
6.4.   The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement have been duly authorized by all necessary action on the part of Borrower;
6.5.   The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower;
6.6.   The execution and de

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