Exhibit 10.01

 

SECURITIES PURCHASE AGREEMENT

 

by and among

 

WPCS INTERNATIONAL INCORPORATED,

 

BTX TRADER LLC,

 

DIVYA THAKUR

 

and

 

ILYA SUBKHANKULOV

 

dated as of November 26, 2014

 

 

 

 

Table of Contents

 

    Page       ARTICLE I Purchase and Sale of Common Equity Units; Closing      
  Section 1.01. Purchase and Sale of the Common Equity Units; Payment 1      
Section 1.02. Closing Date 1       Section 1.03. Transactions to be Effected at
the Closing 2       ARTICLE II Representations and Warranties of Seller        
Section 2.01. Organization 3       Section 2.02. Capitalization 3       Section
2.03. Authority; Execution and Delivery; Enforceability 3       Section 2.04.
Title to Common Equity Units 3       Section 2.05. No Conflicts; Consents 4    
  Section 2.06. Litigation 4       Section 2.07. Brokers and Finders 4      
Section 2.08. BTX Financials 4       Section 2.09. Disclaimer of Other
Representations and Warranties 5       ARTICLE III Representations and
Warranties of Purchasers         Section 3.01. Authority; Execution and
Delivery; Enforceability 5       Section 3.02. No Conflicts; Consents 5      
Section 3.03. Investment Representation 6       Section 3.04. No Knowledge of
Misrepresentation or Omission 6       Section 3.05. Brokers and Finders 6      
Section 3.06. Ownership of WPCS Notes 6       Section 3.07. Certain Purchaser
Acknowledgments 7       ARTICLE IV Covenants         Section 4.01. Access and
Investigation 7       Section 4.02. Retention of Books and Records 7      
Section 4.03. Expenses; Transfer Taxes 8       Section 4.04. Post-Closing
Cooperation 8       Section 4.05. Publicity 8       Section 4.06. Further
Assurances 8       Section 4.07. Survival and Right to Indemnification 9

 

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Table of Contents

(continued)

 

    Page       ARTICLE V Conditions to Close         Section 5.01. Conditions to
Obligations of Purchasers 10       Section 5.02. Conditions to Obligations of
Seller 10       ARTICLE VI Releases         Section 6.01. Release by Purchasers
11       Section 6.02. Release by Seller 11       Section 6.03. Release by the
Company 12       ARTICLE VII Termination         Section 7.01. Termination
Events 12       Section 7.02. Effect of Termination 13       ARTICLE VIII
General Provisions         Section 8.01. Statutes 13       Section 8.02.
Non-Business Days 13       Section 8.03. Amendments; Waivers 13       Section
8.04. Assignment 13       Section 8.05. No Third-Party Beneficiaries 13      
Section 8.06. Notices 14       Section 8.07. Interpretation; Exhibits and
Sections; Certain Definitions 14       Section 8.08. Counterparts 19      
Section 8.09. Entire Agreement; Survival 19       Section 8.10. Severability 19
      Section 8.11. Governing Law 19       Section 8.12. Waiver of Jury Trial 19
      Section 8.13. Consent to Jurisdiction 20

 

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SECURITIES PURCHASE AGREEMENT

 

SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of November 26, 2014,
by and among WPCS International Incorporated, a Delaware corporation (“Seller”),
BTX Trader LLC, a Delaware limited liability company (the “Company”), Ilya
Subkhankulov (“Subkhankulov”) and Divya Thakur (“Thakur” and together with
Subkhankulov, the “Purchasers” and individually, a “Purchaser”). Capitalized
terms used but not otherwise defined herein shall have the meanings set forth in
Section 7.07 hereof unless the context clearly provides otherwise.

 

WHEREAS, Seller owns all of the issued and outstanding common equity units of
the Company, which as of the date hereof consists of 10,000 common equity units
(the “Common Equity Units”);

 

WHEREAS, the Purchasers own senior secured convertible notes issued by the
Seller in the aggregate principal amount of $439,408 (the “WPCS Notes”), which
were issued pursuant to the securities purchase agreement dated December 4,
2012, by and among the Seller and the investors listed on the schedule of buyers
attached thereto, as amended, modified and supplemented from time to time (the
“WPCS Purchase Agreement”); and

 

WHEREAS, subject to the terms and conditions set forth herein, Purchasers desire
to purchase from Seller all of the Common Equity Units and Seller desires to
sell to Purchasers all of the Common Equity Units.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:

 

ARTICLE I

PURCHASE AND SALE OF COMMON EQUITY UNITS; CLOSING

 

Section 1.01.  Purchase and Sale of the Common Equity Units; Payment.

 

(a)          On the terms and subject to the conditions of this Agreement, at
the Closing, Seller shall sell, transfer and deliver to Purchasers, and
Purchasers shall purchase from Seller, the Common Equity Units, free and clear
of all Liens other than Permitted Liens, in the amounts set forth on Schedule A
hereto, in exchange for the cancellation and return to the Seller of the WPCS
Notes, along with all rights owned by the Purchasers under the WPCS Notes and
all Transaction Documents (as defined in the WPCS Purchase Agreement)
(collectively, the “Purchase Price”).

 

(b)          The purchase and sale of the Common Equity Units is referred to in
this Agreement as the “Acquisition.”

 

Section 1.02.  Closing Date. The closing of the Acquisition and the other
transactions contemplated hereby shall take place at the offices of Sichenzia
Ross Friedman Ference LLP, 61 Broadway, 32nd Floor, New York, New York 10006, at
10:00 a.m. Eastern Standard Time on November 26, 2014 or at such other time as
mutually agreed to in writing by the Seller and the Purchasers (the “Closing
Date” and collectively, the “Closing”). The Closing shall be deemed to be
effective as of 12:01 a.m. on the Closing Date.

 

 

 

 

Section 1.03.  Transactions to be Effected at the Closing. At the Closing:

 

(a)          Seller shall deliver to Purchasers:

 

(i)          certificates representing the Common Equity Units, free and clear
of all Liens other than Permitted Liens, duly endorsed in blank or accompanied
by stock powers duly endorsed in blank in proper form for transfer with all
required stock transfer tax stamps affixed thereto;

 

(ii)         all other agreements, documents, instruments or certificates
required to be delivered by Seller at or prior to the Closing pursuant to
Section 5.01 of this Agreement; and

 

(iii)        $25,000 by way of wire transfer, or evidence of repayment of the
$25,000 intercompany loan from the Company to the Seller.

 

(b)          Purchasers shall deliver to Seller:

 

(i)          the WPCS Notes;

 

(ii)         a letter of resignation of Thakur from the board of directors of
the Seller, in the form attached hereto as Exhibit A;

 

(iii)        a letter of acknowledgement of the Purchasers that all outstanding
options granted by the Seller are terminated and forfeited by the Purchasers, in
the form attached hereto as Exhibit B; and

 

(iv)        all other agreements, documents, instruments or certificates
required to be delivered by Purchasers at or prior to the Closing pursuant to
Section 5.02 of this Agreement.

 

ARTICLE II

Representations and Warranties OF Seller

 

Except as set forth in the SEC Documents filed during the period beginning on
December 17, 2013 and ending on the date of this Agreement, to the extent
reasonably apparent from the disclosure therein, Seller hereby represents and
warrants to Purchaser as of the date hereof as follows:

 

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Section 2.01.  Organization.

 

(a)          Except as would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, each of the Seller and
the Company (i) has been duly organized and is validly existing in good standing
(to the extent such concept is applicable) under the Laws of its jurisdiction of
organization, with all requisite corporate power and authority to own its
properties and conduct its business as currently conducted and (ii) is duly
qualified as a foreign corporation for the transaction of business, and is in
good standing (to the extent such concept is applicable) under the Laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business so as to require such qualification.

 

(b)          Neither the Seller nor the Company is in breach or violation of any
of its certificate of incorporation, bylaws or other Organizational Documents,
except for any breach or violation that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Prior to the Closing Date, Seller will deliver or make available to Purchaser
true and complete copies of the Company’s certificate of incorporation, bylaws
or other Organizational Documents, each as amended to date.

 

Section 2.02. Capitalization. The Common Equity Units are all of the issued and
outstanding equity interests in the Company. All of the Common Equity Units have
been duly authorized and validly issued, are fully paid and nonassessable and
free of preemptive rights, with no personal liability attaching to the ownership
thereof, and are owned of record and beneficially by Seller. All of the Common
Equity Units were issued in compliance with applicable Laws. None of the Common
Equity Units were issued in violation of any agreement, arrangement or
commitment to which Seller or the Company is a party or is subject to or in
violation of any preemptive or similar rights of any Person. There are no
outstanding or authorized options, warrants or other rights of any kind relating
to the sale, issuance or voting of any Common Equity Units or any securities
convertible into or evidencing the right to purchase any Common Equity Units. To
Seller’s Knowledge, the Company does not have outstanding or authorized any
stock appreciation, phantom stock, profit participation or similar rights. There
are no voting trusts, equityholder agreements, proxies or other agreements or
understandings in effect with respect to the voting or transfer of any of the
Common Equity Units. The Company does not own any shares of capital stock of or
equity interests in (including any securities exercisable or exchangeable for or
convertible into capital stock of or other voting or equity interests in) any
other Person.

 

Section 2.03.  Authority; Execution and Delivery; Enforceability. Seller has
full power and authority to execute this Agreement and to consummate the
Acquisition and the other transactions contemplated hereby. The execution and
delivery by Seller of this Agreement and the consummation by Seller of the
Acquisition and the other transactions contemplated hereby have been duly
authorized by all necessary corporate action. Seller has duly executed and
delivered this Agreement and, assuming that this Agreement is the valid and
binding agreement of Purchaser, this Agreement constitutes a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and other Laws
affecting creditors’ rights generally, and to general principles of equity.

 

Section 2.04.  Title to Common Equity Units. Seller has good and valid title to
the Common Equity Units, free and clear of all Liens other than Permitted Liens.
Upon Seller’s receipt of the Purchase Price, good and valid title to the Common
Equity Units will pass to the Purchaser, free and clear of all Liens, other than
those arising from acts of Purchaser and other than Permitted Liens.

 

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Section 2.05.  No Conflicts; Consents.

 

(a)          The execution and delivery by Seller of this Agreement do not, and
the performance of this Agreement, including the consummation of the Acquisition
and the other transactions contemplated hereby and compliance by Seller with the
terms hereof will not, (1) conflict with, constitute or result in any violation
or breach of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a material benefit under, or result in the creation
of any Lien (other than Permitted Liens) upon any of the properties or assets of
the Company under, any provision of (i) the certificate of incorporation, bylaws
or other Organizational Documents of Seller or the Company, (ii) any written
contract to which the Company is a party or by which any of its properties or
assets is bound, which is material to the business of such Company, or (iii) any
Law applicable to the Company or its properties or assets, other than in each
case any such items that, individually or in the aggregate, have not had and
would not reasonably be expected to have a Company Material Adverse Effect, or
(2) result in the creation or imposition of any Lien other than Permitted Liens
on any properties or assets of the Company.

 

(b)          No notice to, or Consent of, any Person, or registration,
declaration or filing with, any Governmental Entity is required to be obtained
or made by Seller or the Company in connection with Seller’s execution, delivery
and performance of this Agreement or Seller’s consummation of the Acquisition or
the other transactions contemplated hereby except for such Consents,
registrations, declarations or filings which, individually or in the aggregate,
have not had and would not reasonably be expected to have a Company Material
Adverse Effect.

 

Section 2.06.  Litigation. There is no pending, or to Seller’s Knowledge,
threatened in writing action, claim, suit, proceeding or investigation against
the Company, or to which any property, assets or rights of the Company is
subject, nor is the Company subject to any Order that remains outstanding or
unsatisfied, in each case, except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.

 

Section 2.07.  Brokers and Finders. Neither the Company nor its Affiliates have
retained any agent, broker, investment banker, financial advisor or other firm
or Person that is or will be entitled to any brokers’ or finder’s fee or any
other commission or similar fee in connection with any of the transactions
contemplated by this Agreement.

 

Section 2.08.  BTX Financials. Seller has delivered to Purchasers unaudited,
estimated consolidated balance sheet of the Company as of October 31, 2014 and
the unaudited, estimated related income statement for the quarter ended October
31, 2014 (the “Financial Statements”). To the Seller’s Knowledge, the Financial
Statements fairly present the financial condition and the results of operations
of the Company as of their respective dates and for the periods then ended in
accordance with GAAP consistently applied. To the Seller’s Knowledge, there are,
and as of the Closing Date there will be, no liabilities or obligations of any
nature, whether absolute, accrued, contingent, known, matured, unmatured or
otherwise, and whether or not required to be disclosed or provided for in
financial statements in accordance with GAAP, including without limitation,
material unreserved negative contractual obligations, litigation or contingent
liabilities other than customary service and product warranty obligations, which
are not material in nature, of the Company except (i) liabilities and
obligations reflected in the Financial Statements and (ii) liabilities and
obligations incurred between the date of the Interim Financial Statements and
the Closing Date in the ordinary course of the business of the Company.

 

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Section 2.09.  Disclaimer of Other Representations and Warranties. Except as
otherwise expressly set forth in this Article II, Seller makes no other
representations or warranties and expressly disclaims any other representations
or warranties of any kind or nature, express or implied, as to the condition,
value or quality of the business of the Company or the assets of the Company,
and Seller specifically disclaims any implied representation or warranty of
merchantability, usage, suitability or fitness for any particular purpose with
respect to the assets of the Company, or any part thereof.

 

ARTICLE III

Representations and Warranties of Purchaser

 

Each Purchaser hereby severally, but not jointly, represents and warrants to
Seller as follows as of the date hereof:

 

Section 3.01.  Authority; Execution and Delivery; Enforceability. Purchaser has
full power and authority to execute this Agreement and to consummate the
Acquisition and the other transactions contemplated hereby. The execution and
delivery by Purchaser of this Agreement and the consummation by Purchaser of the
Acquisition and the other transactions contemplated hereby have been duly
authorized by all necessary action. Purchaser has duly executed and delivered
this Agreement and, assuming that this Agreement is the valid and binding
agreement of Seller, this Agreement constitutes a legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and other Laws
affecting creditors’ rights generally, and to general principles of equity.

 

Section 3.02.  No Conflicts; Consents.

 

(a)          The execution and delivery by Purchaser of this Agreement do not,
and the consummation of the Acquisition and the other transactions contemplated
hereby and compliance by Purchaser with the terms hereof will not, (i) have a
Purchaser Material Adverse Effect or (ii) conflict with, constitute or result in
any violation or breach of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or result
in the creation of any Lien upon any of the properties or assets of Purchaser
under, any provision of (A) any contract to which Purchaser is a party or by
which any of its properties or assets is bound, (B) any Law applicable to
Purchaser or its properties or assets, other than, in the case of clauses (A)
and (B) above, any such items that, individually or in the aggregate, have not
had and would not reasonably be expected to have a Purchaser Material Adverse
Effect.

 

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(b)          No Consent of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by Purchaser in
connection with the execution, delivery and performance of this Agreement or the
consummation of the Acquisition or the other transactions contemplated hereby.

 

Section 3.03.  Investment Representation. Purchaser acknowledges that Seller has
made (or caused to be made) available to Purchaser and its representatives the
opportunity to ask questions of the officers and management of the Company as
well as access to the documents, information and records of the Company, and
Purchaser confirms that it has made an independent investigation, analysis and
evaluation of the Company and its assets, liabilities, business and financial
condition. Purchaser has such knowledge and experience in financial and business
matters that it is capable of evaluating the Company and the merits and risks of
an investment in the Common Equity Units. Purchaser is acquiring the Common
Equity Units for its own account and for investment and not with a view toward
or for sale in connection with any distribution (as such term in used in
Section 2(a)(11) of the Securities Act) thereof in violation of the Securities
Act. Purchaser is an “accredited investor” (as such term is defined in Rule 501
of Regulation D promulgated under the Securities Act) and understands that the
Common Equity Units have not been registered under the Securities Act or
registered or qualified under any applicable state securities laws. Purchaser
understands and agrees that the Common Equity Units may not be sold,
transferred, offered for sale or otherwise disposed of without registration
under the Securities Act, except pursuant to an exemption from such registration
available under the Securities Act, and without compliance with state, local and
foreign securities laws, in each case, to the extent applicable.

 

Section 3.04.  No Knowledge of Misrepresentation or Omission. To the Knowledge
of the Purchaser, the representations and warranties of Seller made in this
Agreement are true and correct.

 

Section 3.05.  Brokers and Finders. Neither Purchaser nor its Affiliates has
retained any agent, broker, investment banker, financial advisor or other firm
or Person that is or will be entitled to any brokers’ or finder’s fee or any
other commission or similar fee in connection with any of the transactions
contemplated by this Agreement.

 

Section 3.06.  Ownership of WPCS Notes. Each Purchaser owns and holds,
beneficially and of record, the entire right, title, and interest in and to the
WPCS Notes (including, without limitation, accrued and unpaid interest thereon),
free and clear of all rights and Encumbrances (as defined below).  Purchaser has
full power and authority to transfer and dispose of the WPCS Notes (including,
without limitation, accrued and unpaid interest thereon), free and clear of any
right or Encumbrance other than restrictions under the Securities Act and
applicable state securities laws.  Other than the transactions contemplated by
this Agreement, there is no outstanding vote, plan, pending proposal, or other
right of any person to acquire all or any of the WPCS Notes. “Encumbrances”
shall mean any security or other property interest or right, claim, lien,
pledge, option, charge, security interest, contingent or conditional sale, or
other title claim or retention agreement, interest or other right or claim of
third parties, whether perfected or not perfected, voluntarily incurred or
arising by operation of law, and including any agreement (other than this
Agreement) to grant or submit to any of the foregoing in the future.

 

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Section 3.07. Certain Purchaser Acknowledgments.

 

(a)          Purchaser acknowledges that neither Seller nor the Company, nor any
other Person acting on behalf of Seller or the Company or any of their
Affiliates has made any representation or warranty, express or implied, as to
the accuracy or completeness of any information regarding Seller or the Company
or their respective businesses or assets, except as expressly set forth in
Article II. Purchaser further agrees that neither Seller nor any other Person
shall have or be subject to any liability to Purchaser or any other Person
resulting from the distribution to Purchaser, or Purchaser’s use of, any such
information and any information, document or material made available to
Purchaser or Purchaser’s representatives in certain “data rooms,” management
presentations or any other form in expectation of the transactions contemplated
by this Agreement.

 

(b)          In connection with Purchaser’s investigation of the Company,
Purchaser or Purchaser’s representatives have received from or on behalf of
Seller and the Company certain projections, including projected statements of
operating revenues and income from operations of the Company and certain
business plan information. Purchaser acknowledges that there are uncertainties
inherent in attempting to make such estimates, projections and other forecasts
and plans, that Purchaser is familiar with such uncertainties, that Purchaser is
taking full responsibility for making its own evaluation of the adequacy and
accuracy of all estimates, projections and other forecasts and plans so
furnished to it (including the reasonableness of the assumptions underlying such
estimates, projections and forecasts), and that Purchaser shall have no claim
against Seller or any other Person with respect thereto. Accordingly, neither
Seller nor any other Person makes any representations or warranties whatsoever
with respect to such estimates, projections and other forecasts and plans
(including the reasonableness of the assumptions underlying such estimates,
projections and forecasts).

 

ARTICLE IV

Covenants

 

Section 4.01.  Access and Investigation. Between the date of this Agreement and
the Closing Date and upon reasonable advance notice from a Purchaser, Seller
will, and will cause the Company and its representatives to, (a) afford the
Purchasers and their representatives and prospective lenders and their
representatives full and free access to the Company’s personnel, properties
(including subsurface testing), Contracts, books and records, and other
documents and data, (b) furnish such Persons with copies of all such Contracts,
books and records, and other documents and data as the Purchasers may reasonably
request, and (c) furnish such Persons with such additional financial, operating
and other data and information as the Purchasers may reasonably request.

 

Section 4.02.  Retention of Books and Records. In order to facilitate the
resolution of any claims made against or incurred by Seller prior to the
Closing, for a period of seven (7) years following the Closing, the Purchasers
shall retain the books and records of the Company relating to the business of
the Company for periods prior to the Closing, and upon reasonable notice, afford
the officers, employees, agents and representatives of Seller reasonable access
(including the right to make photocopies, at the expense of Seller), during
normal business hours, to such books and records.

 

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Section 4.03.  Expenses; Transfer Taxes.

 

(a)          Except as otherwise set forth in this Agreement, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the Party incurring such expense, including
all costs and expenses incurred pursuant to this Section 4.03.

 

(b)          Notwithstanding anything to the contrary contained herein,
Purchaser shall pay the amount of any documentary, sales, use, real property
transfer, real property gains, registration, value-added, transfer, stamp,
recording and other similar Taxes, fees, and costs together with any interest
thereon, penalties, fines, costs, fees, additions to tax or additional amounts
with respect thereto incurred in connection with this Agreement and the
transactions contemplated hereby. Each Party shall use commercially reasonable
efforts to avail itself of any available exemptions from any Taxes, and to
cooperate with the other Parties in providing any information and documentation
that may be necessary to obtain such exemptions.

 

Section 4.04.  Post-Closing Cooperation. Seller and the Purchasers shall
cooperate with each other, and shall cause their Affiliates and their officers,
employees, agents, auditors and representatives to cooperate with each other,
for a reasonable period after the Closing to ensure the orderly transition of
the Company from Seller to the Purchasers and to minimize any disruption to the
Company and the other respective businesses of Seller and the Purchasers that
may result from the transactions contemplated by this Agreement. After the
Closing, upon reasonable written notice, Seller and the Purchasers shall furnish
or cause to be furnished to each other and their Affiliates and their respective
employees, counsel, auditors and representatives access, during normal business
hours, to such information and assistance relating to the Company (to the extent
within the control of such Party) as is reasonably necessary for financial
reporting and accounting matters.

 

Section 4.05.  Publicity. No public release or announcement concerning the
Acquisition and the other transactions contemplated by this Agreement shall be
issued by any Party following the Closing Date without the prior consent of the
other Parties (which consent shall not be unreasonably withheld), except as such
release or announcement may be required by Law or the rules or regulations of
any securities exchange, in which case the Party required to make the release or
announcement shall allow the other Party reasonable time to comment on such
release or announcement in advance of such issuance.

 

Section 4.06.  Further Assurances. From time to time, as and when requested by
any Party, each Party shall execute and deliver, or cause to be executed and
delivered, all such documents and instruments and shall take, or cause to be
taken, all such further or other actions, as such other Party may reasonably
deem necessary or desirable to complete the Acquisition and to consummate the
transactions contemplated by this Agreement.

 

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Section 4.07.  Survival and Right to Indemnification.

 

(a)          All of Purchasers’ and Seller’s representations, warranties,
covenants, and/or obligations in this Agreement, and any other certificate or
document delivered pursuant to this Agreement will survive the Closing and the
consummation of the transactions contemplated herein for a one year period from
the Closing.

 

(b)          The Seller covenants and agrees to indemnify, defend, protect and
hold harmless the Purchasers, and their agents, representatives and affiliates
(collectively, together with Purchasers, the “Purchaser Indemnified Parties”) at
all times from and after the date of this Agreement from and against all losses,
liabilities, damages, claims, actions, suits, proceedings, demands, assessments,
adjustments, costs and expenses (including specifically, but without limitation,
reasonable attorneys’ fees and expenses of investigation), whether or not
involving a third party claim and regardless of any negligence of any Purchaser
Indemnified Party (collectively, “Purchaser Losses”), incurred by any Purchaser
Indemnified Party as a result of or arising from (i) any breach of the
representations and warranties of the Seller set forth herein or in certificates
delivered in connection herewith, or (ii) any breach or nonfulfillment of any
covenant or agreement (including any other agreement of the Seller to indemnify
the Purchaser as set forth in this Agreement) on the part of the Seller under
this Agreement, provided, however, that in no event shall Seller’s liability for
Purchaser Losses exceed an aggregate amount of One Hundred Thousand Dollars
($100,000).

 

(c)          The Purchasers covenant and agree to indemnify, defend, protect and
hold harmless the Seller, and its officers, directors, employees, stockholders,
agents, representatives and affiliates (collectively, together with Seller, the
“Seller Indemnified Parties”) at all times from and after the date of this
Agreement from and against all losses, liabilities, damages, claims, actions,
suits, proceedings, demands, assessments, adjustments, costs and expenses
(including specifically, but without limitation, reasonable attorneys’ fees and
expenses of investigation), whether or not involving a third party claim and
regardless of any negligence of any Seller Indemnified Party (collectively,
“Seller Losses”), incurred by any Seller Indemnified Party as a result of or
arising from (i) any breach of the representations and warranties of the
Purchaser set forth herein or in certificates delivered in connection herewith,
(ii) any breach or nonfulfillment of any covenant or agreement (including any
other agreement of the Purchaser to indemnify Seller as set forth in this
Agreement) on the part of the Purchaser under this Agreement, (iii) any debt,
liability or obligation of the Company, (iv) the conduct and operations of the
business of the Company whether before or after Closing, (v) claims asserted
against the Company whether before or after Closing, or (vi) any federal or
state income tax payable by Seller and attributable to the transaction
contemplated by this Agreement provided, however, that in no event shall
Purchasers’ liability for Seller Losses exceed an aggregate amount of One
Hundred Thousand Dollars ($100,000).

 

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ARTICLE V

 

CONDITIONS TO CLOSE

 

Section 5.01.  Conditions to Obligations of the Purchasers. The obligations of
the Purchasers to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment or the Purchasers’ waiver, at or prior to
the Closing, of each of the following conditions:

 

(a)          All of Seller’s and Company’s representations and warranties in
this Agreement (considered both collectively and individually) must have been
accurate in all material respects as of the date of this Agreement, and must be
accurate in all material respects as of the Closing Date as if then made;

 

(b)          All of the covenants and obligations that the Seller is required to
perform or to comply with under this Agreement on or before the Closing Date
(considered both collectively and individually) must have been duly performed
and complied with in all material respects at the Purchasers’ reasonable
satisfaction;

 

(c)          Since the date of this Agreement, no event or circumstance shall
have occurred that, individually, or in the aggregate, has had or would
reasonably be expected to have a Company Material Adverse Effect;

 

(d)          There must not have been made or threatened by any Person who is
not a party to this Agreement any claim asserting that such Person (a) is the
holder or the beneficial owner of, or has the right to acquire or to obtain
beneficial ownership of, any stock of or any other voting, equity or ownership
interest in the Company, or (b) is entitled to all or any portion of the
Purchase Price; and

 

(e)          There must not be in effect any Law or Order that (a) prohibits the
Acquisition or consummation of the transactions contemplated under this
Agreement and (b) has been adopted or issued, or has otherwise become effective,
since the date of this Agreement.

 

Section 5.02.  Conditions to Obligations of Seller. The obligations of Seller to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment or Seller’s waiver, at or prior to the Closing, of each of the
following conditions:

 

(a)          All of the Purchasers’ representations and warranties in this
Agreement (considered both collectively and individually) must have been
accurate in all material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if then made;

 

(b)           All of the covenants and obligations that the Purchasers’ are
required to perform or to comply with under this Agreement on or before the
Closing Date (considered both collectively and individually) must have been duly
performed and complied with in all material respects at Seller’s reasonable
satisfaction; and

 

- 10 -

 

  

(c)          There must not be in effect any Law or Order that (a) prohibits the
Acquisition or consummation of the transactions contemplated under this
Agreement and (b) has been adopted or issued, or has otherwise become effective,
since the date of this Agreement.

 

ARTICLE VI

 

RELEASES

 

Section 6.01.  Release by the Purchasers. Each Purchaser, on behalf of himself,
his heirs, executors, representatives, agents, insurers, administrators,
successors, assigns, and successors in interest, and all persons acting by,
through, under, or in concert with him, and each of them, hereby release and
discharge the Seller, together with the Seller’s predecessors, successors,
direct and indirect parent companies, direct and indirect subsidiary companies,
companies under common control with any of the foregoing, affiliates and assigns
and its and their past, present, and future officers, directors, shareholders,
interest holders, members, partners, attorneys, agents, employees, managers,
representatives, assigns and successors in interest, and all persons acting by,
through, under or in concert with them, and each of them, from all known and
unknown charges, complaints, claims, grievances, liabilities, obligations,
judgments, promises, agreements, controversies, damages, actions, causes of
action, suits, rights, demands, costs, losses, debts, penalties, fees, wages,
medical costs, pain and suffering, mental anguish, emotional distress, expenses
(including attorneys' fees and costs actually incurred), and punitive damages,
of any nature whatsoever, whether known or unknown, from the beginning of time
to the date of this Agreement, which such Purchaser has, or may have had,
against the Seller, whether or not apparent or yet to be discovered, or which
may hereafter develop, for any acts or omissions related to or arising from any
agreement or other matter between the Purchaser and the Seller.

 

Section 6.02.  Release by Seller. The Seller, on behalf of itself, its
predecessors, successors, direct and indirect parent companies, direct and
indirect subsidiary companies, companies under common control with any of the
foregoing, affiliates and assigns, and its and their past, present, and future
officers, directors, shareholders, interest holders, members, partners,
attorneys, agents, employees, managers, representatives, assigns, and successors
in interest, and all persons acting by, through, under, or in concert with them,
and each of them, hereby release and discharge each Purchaser, together with the
Purchaser’s heirs, executors, representatives, agents, insurers, administrators,
successors, assigns, and successors in interest, and all persons acting by,
through, under, or in concert with him, and each of them, from all known and
unknown charges, complaints, claims, grievances, liabilities, obligations,
judgments, promises, agreements, controversies, damages, actions, causes of
action, suits, rights, demands, costs, losses, debts, penalties, fees, wages,
medical costs, pain and suffering, mental anguish, emotional distress, expenses
(including attorneys' fees and costs actually incurred), and punitive damages,
of any nature whatsoever, whether known or unknown, from the beginning of time
to the date of this Agreement, which Seller has, or may have had, against either
Purchaser, whether or not apparent or yet to be discovered, or which may
hereafter develop, for any acts or omissions related to or arising from any
agreement or other matter between the Seller and such Purchaser.

 

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Section 6.03.  Release by the Company. The Company, on behalf of itself, its
predecessors, successors, direct and indirect parent companies, direct and
indirect subsidiary companies, companies under common control with any of the
foregoing, affiliates and assigns, and its and their past, present, and future
officers, directors, shareholders, interest holders, members, partners,
attorneys, agents, employees, managers, representatives, assigns, and successors
in interest, and all persons acting by, through, under, or in concert with them,
and each of them, hereby release and discharge the Seller, together with the
Seller’s predecessors, successors, direct and indirect parent companies, direct
and indirect subsidiary companies, companies under common control with any of
the foregoing, affiliates and assigns and its and their past, present, and
future officers, directors, shareholders, interest holders, members, partners,
attorneys, agents, employees, managers, representatives, assigns and successors
in interest, and all persons acting by, through, under or in concert with them,
and each of them, from all known and unknown charges, complaints, claims,
grievances, liabilities, obligations, judgments, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts, penalties, fees, wages, medical costs, pain and suffering,
mental anguish, emotional distress, expenses (including attorneys' fees and
costs actually incurred), and punitive damages, of any nature whatsoever,
whether known or unknown, from the beginning of time to the date of
this Agreement, which the Company has, or may have had, against the Seller,
whether or not apparent or yet to be discovered, or which may hereafter develop,
for any acts or omissions related to or arising from any agreement or other
matter between the Company and the Seller.

 

ARTICLE VII

 

TERMINATION

 

Section 7.01.  Termination Events. Subject to Section 7.02, this Agreement may,
by notice given before or at the Closing, be terminated:

 

(a)          by mutual consent of the Purchasers and Seller;

 

(b)          by the Purchasers if Seller has committed a material breach of any
provision of this Agreement, the Purchasers have not waived such material breach
and Seller has not cure such material breach within 30 days of receipt of
written notice (with specificity) of such;

 

(c)          by Seller if the Purchasers have committed a material breach of any
provision of this Agreement, Seller has not waived such material breach and the
Purchasers have not cure such material breach within 30 days of receipt of
written notice (with specificity) of such;

 

(d)          by the Purchasers if the satisfaction of any condition in Section
5.01 is or becomes impossible (other than through the failure of the Purchasers
to comply with its obligations under this Agreement) and the Purchasers have not
waived such condition; or

 

(e)          by Seller if the satisfaction of any condition in Section 5.02 is
or becomes impossible (other than through the failure of Seller to comply with
its obligations under this Agreement) and Seller has not waived such condition.

 

- 12 -

 

  

Section 7.02.  Effect of Termination. Each Party’s right of termination under
Section 7.01 is in addition to any other rights it may have under this Agreement
or otherwise, and the exercise of such right of termination will not be an
election of remedies. If this Agreement is terminated pursuant to Section 7.01,
all obligations of the Parties under this Agreement will terminate, except that
the obligations in Sections 8.09, 8.10, 8.11, 8.12, and 8.13 will survive;
provided, however, that if this Agreement is terminated by a Party because of
the breach of the Agreement by another Party or because one or more of the
conditions to the terminating Party’s obligations under this Agreement is not
satisfied as a result of any other Party’s failure to comply with its
obligations under this Agreement, the terminating Party’s right to pursue all
legal remedies, including the right to an immediate refund of any amounts paid
to the other Party under this Agreement, will survive such termination
unimpaired.

 

ARTICLE VIII

General Provisions

 

Section 8.01.  Statutes. Except as otherwise provided in this Agreement, any
reference in this Agreement to a statute refers to such statute and all rules
and regulations made under it, as it or they may have been amended or
re-enacted.

 

Section 8.02.  Non-Business Days. Whenever payments are to be made or an action
is to be taken on a day which is not a Business Day, such payment shall be made
or such action shall be taken on or not later than the next succeeding Business
Day.

 

Section 8.03.  Amendments; Waivers. This Agreement may only be amended,
supplemented or otherwise modified by written agreement signed by Seller and
Purchaser. By an instrument in writing, Purchaser or Seller may waive compliance
by the other with any term or provision of this Agreement that such other Party
was or is obligated to comply with or perform. No waiver by a party of any
default, misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or affect
in any way any rights arising by virtue of any prior or subsequent occurrence.
No failure or delay by a party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

 

Section 8.04.  Assignment. This Agreement and the rights and obligations under
this Agreement shall not be assignable or transferable by any Party (including
by operation of law in connection with a merger or consolidation of such Party)
without the prior written consent of the other Party, such consent not to be
unreasonably withheld. Any attempted assignment in violation of this Section
8.04 shall be void.

 

Section 8.05.  No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their respective successors and permitted
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other Person or entity any legal or equitable right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.

 

- 13 -

 

  

Section 8.06.  Notices. All notices, requests, consents, claims, demands,
waivers and other communications hereunder shall be in writing and shall be
deemed to have been given (a) when delivered by hand (with written confirmation
of receipt), (b) when received by the addressee if sent by a nationally
recognized overnight courier (receipt requested), (c) on the date sent by
facsimile (with confirmation of transmission) if sent during normal business
hours of the recipient, and on the next Business Day if sent after normal
business hours of the recipient, or (d) on the third (3rd) Business Day after
the date mailed, by certified or registered mail, return receipt requested,
postage prepaid. Such communications must be sent to the respective parties at
the following addresses (or at such other address for a party as shall be
specified in a notice given in accordance with this Section 8.06):

 

 

If to Purchaser, to:  

Messrs. Ilya Subkhankulov and Divya Thakur

c/o BTX Trader, LLC

79 Madison Ave, 3rd Floor

New York, NY 10016

 

with a copy (which will not constitute notice) to:  

Farrell Fritz, P.C.

1320 RXR Plaza

Uniondale, New York 11556-1320

Facsimile: (516) 336-2216

Attention: Alon Y. Kapen, Esq.

 

If to Seller, to:  

WPCS International Incorporated
521 Railroad Avenue

Suisun City, California 94585
Facsimile: (707) 421-1359
Attention: Chief Executive Officer

 

with a copy (which will not constitute notice) to:   Sichenzia Ross Friedman
Ference LLP
61 Broadway, 32nd Floor
New York, New York 10006
Facsimile: (212) 930-9725
Attention:  Harvey Kesner

 

or to such other Persons, addresses or facsimile numbers as may be designated in
writing by the Person entitled to receive such communication as provided above.

 

Section 8.07.  Interpretation; Exhibits and Sections; Certain Definitions.

 

(a)          The table of contents and headings herein are for convenience of
reference only, do not constitute part of this Agreement and shall not be deemed
to limit or otherwise affect any of the provisions hereof. Where a reference in
this Agreement is made to a Section or Exhibit, such reference shall be to a
Section of or Exhibit to this Agreement unless otherwise indicated. Whenever the
words “include,” “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation.” A reference in
this Agreement to $ or dollars is to U.S. dollars. The words “hereof”, “herein”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. References to “this Agreement” shall include all Exhibits hereto.

 

- 14 -

 

  

(b)          The parties have participated jointly in negotiating and drafting
this Agreement. In the event that an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.

 

(c)          For all purposes of this Agreement:

 

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly controls, is controlled by or is under common control with, such
Person. For the purposes of this definition, “control” (including, the terms
“controlling,” “controlled by” and “under common control with”), as applied to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of that Person, whether
through the ownership of voting securities, by Contract or otherwise.

 

“Business Day” means any day, other than Saturday, Sunday or any day on which
banking institutions located in New York City are authorized or required by Law
or other governmental action to close.

 

“Company Material Adverse Effect” means any event, change, development, effect
or occurrence (an “Effect”) that, individually or together with any other
Effect, is materially adverse to the business, assets, liabilities, results of
operations or condition (financial or otherwise) of the Company, taken as a
whole; provided, however, that in determining whether a Company Material Adverse
Effect has occurred, there shall be excluded any Effect to the extent resulting
from the following: (a) any Effect affecting the businesses or industries in
which the Company operates (including general pricing changes), (b) any change
in general economic or business conditions, including changes in the financial,
securities or credit markets (including changes in interest rates and currency
rates), or changes in such conditions in any area in which the Company operates,
(c) any change in global or national political conditions, (d) the negotiation,
execution, announcement, pendency or performance of this Agreement and the
transactions contemplated by this Agreement, (e) any failure, in and of itself,
of the Company to meet any estimates, expectations, forecasts or projections,
including revenues, earnings or other measures of financial performance, for any
period; provided, however, that the facts and circumstances underlying any such
failure may, except as may be provided in subsections (a), (b), (c), (d), (f),
(g), (h), (i) or (j) of this definition, be considered in determining whether a
Company Material Adverse Effect has occurred, (f) any change in GAAP or other
accounting standards or any change in any Laws or interpretations thereof, in
each case, after the date of this Agreement, (g) any act of God or any change
that is the result of any outbreak or escalation of acts of war, material armed
hostilities or other material international or national calamity, acts of
terrorism or natural disasters, (h) any loss of or adverse change in the
business relationship between the Company, on the one hand, and Purchaser or any
of its Affiliates, on the other hand, (i) any fees, expenses or change of
control payments incurred in connection with this Agreement and the transactions
contemplated by this Agreement or (j) any action expressly required or permitted
by this Agreement, including actions required to be taken by this Agreement upon
the specific request of Purchaser, or the failure to take any actions due to the
restrictions set forth in this Agreement; except, with respect to clauses (a),
(b), (c), (f) or (g), so long as such changes do not have a disproportionate
adverse impact on the Company, taken as a whole, relative to other businesses of
similar size operating in the same industry in which the Company operates.

 

- 15 -

 

 

“Consent” means any consent, approval, authorization, permit, clearances,
exemption and notice.

 

“Contracts” means any contracts, agreements, licenses, notes, bonds, mortgages,
deeds, undertakings, indentures, leases or other binding instruments or binding
commitments, whether written or oral.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“GAAP” means generally accepted accounting principles in the United States in
effect from time to time.

 

“Governmental Entity” means any international, national, federal, state,
provincial or local governmental, regulatory or administrative authority,
agency, commission, court, tribunal, arbitral body, self-regulated entity or
similar body, whether domestic or foreign.

 

“Laws” means any domestic or foreign laws, common law, statutes, ordinances,
rules, regulations, codes, Orders or legally enforceable requirements enacted,
issued, adopted, promulgated, enforced, ordered or applied by any Governmental
Entity.

 

“Liens” means, with respect to any property or asset, all pledges, liens,
mortgages, charges, encumbrances, hypothecations, options, rights of first
refusal, rights of first offer and security interests of any kind or nature
whatsoever.

 

“Order” means order, writ, assessment, decision, injunction, decree, ruling or
judgment of a Governmental Entity.

 

“Organizational Documents” means the articles of incorporation, certificate of
incorporation, charter, bylaws, articles of formation, certificate of formation,
regulations, operating agreement, certificate of limited partnership,
partnership agreement, and all other similar documents, instruments or
certificates executed, adopted, or filed in connection with the creation,
formation, or organization of a Person, including any amendments thereto.

 

“Party” means any of the Purchasers, Seller or the Company, and “Parties” means
both of them collectively.

 

“Permitted Liens” means (a) statutory Liens for current Taxes or other
governmental charges or assessments not yet due and payable or the amount or
validity of which is being contested in good faith (provided appropriate
reserves required pursuant to GAAP have been made in respect thereof), (b)
mechanics’, carriers’, workers’, repairers’ and similar statutory Liens arising
or incurred in the ordinary course of business for amounts which are not
delinquent or which are being contested by appropriate proceedings (provided
appropriate reserves required pursuant to GAAP have been made in respect
thereof), (c) zoning, entitlement, building and other land use regulations
imposed by Governmental Entities having jurisdiction over such Person’s owned or
leased real property, which are not violated by the current use and operation of
such real property, (d) covenants, conditions, restrictions, easements and other
similar non-monetary matters of record affecting title to such Person’s owned or
leased real property, which do not materially impair the occupancy or use of
such real property for the purposes for which it is currently used in connection
with such Person’s businesses, (e) any right of way or easement related to
public roads and highways, and (f) Liens arising under workers’ compensation,
unemployment insurance, social security, retirement and similar legislation.

 

- 16 -

 

  

“Person” means any individual, corporation, limited or general partnership,
limited liability company, limited liability partnership, trust, association,
joint venture, Governmental Entity and other entity and group (which term will
include a “group” as such term is defined in Section 13(d)(3) of the Exchange
Act).

 

“Purchaser Material Adverse Effect” means a material adverse effect on the
ability of Purchaser to perform its obligations under this Agreement or on the
ability of Purchaser to consummate the Acquisition and the other transactions
contemplated hereby.

 

“Purchaser’s Knowledge” or “Knowledge of the Purchaser” means the actual
knowledge of the Purchaser.

 

“SEC” means the Securities and Exchange Commission.

 

“SEC Documents” means all forms, statements, reports and documents, together
with any required amendments thereto, that the Seller was required to file or
furnish with the SEC pursuant to the Securities Act and the Exchange Act.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Seller’s Knowledge” or “Knowledge of the Seller” means the actual knowledge of
any of the executive officers or the directors of Seller.

 

“Taxes” means all federal, state, local, foreign and other income, gross
receipts, sales, use, production, ad valorem, transfer, franchise, registration,
profits, license, lease, service, service use, withholding, payroll, employment,
unemployment, estimated, excise, severance, environmental, stamp, occupation,
premium, property (real or personal), real property gains, windfall profits,
customs, duties or other taxes, fees, assessments or charges of any kind
whatsoever, together with any interest, additions or penalties with respect
thereto and any interest in respect of such additions or penalties.

 

- 17 -

 

 

(d)          Index of Defined Terms.

 

Defined Term  Section  Page            Agreement  Preamble   1           
Acquisition  1.01(b)   1            Common Equity Units  Preamble   1           
Closing  1.02   2            Closing Date  1.02   2            Company 
Preamble   1            Effect  Definition of “Company Material Adverse Effect” 
 15            Encumbrances  3.06   6            Financial Statements  2.08   4 
          Purchase Price  1.01(a)   1            Purchaser  Preamble   1       
    Purchaser Indemnified Parties  4.07(b)   9            Purchaser Losses 
4.07(b)   9            Purchasers  Preamble   1            Seller  Preamble   1 
          Seller Indemnified Parties  4.07(c)   9            Seller Losses 
4.07(c)   9            Subkhankulov  Preamble   1            Thakur  Preamble 
 1            WPCS Notes  Preamble   1            WPCS Purchase Agreement 
Preamble   1 

 

- 18 -

 

 

Section 8.08.  Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the Parties and delivered to the other Parties. In the event that any
signature is delivered by facsimile transmission or by an e-mail which contains
a portable document format (.pdf) file of an executed signature page, such
signature page shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such signature page were an original thereof.

 

Section 8.09.  Entire Agreement; Survival. This Agreement (including the
Exhibits to this Agreement) constitutes the entire agreement among the Parties
with respect to the subject matter of this Agreement and supersede all other
prior agreements and understandings, both written and oral, among the parties to
this Agreement with respect to the subject matter of this Agreement.

 

Section 8.10.  Severability. If any term or provision of this Agreement is
invalid, illegal or unenforceable in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other term or provision of
this Agreement or invalidate or render unenforceable such term or provision in
any other jurisdiction. Upon such determination that any term or other provision
is invalid, illegal or unenforceable, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to
the greatest extent possible.

 

Section 8.11.  Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York without giving
effect to any choice or conflict of law provision or rule (whether of the State
of New York or any other jurisdiction) that would cause the application of Laws
of any jurisdiction other than those of the State of New York.

 

Section 8.12.  Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT
CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO
ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
8.12.

 

- 19 -

 

 

Section 8.13.  Consent to Jurisdiction. Each Party hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the United States District Court for the Southern District of
New York, or, if (and only if) such court lacks subject matter jurisdiction, the
Federal court of the United States of America sitting in New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the agreements delivered in connection herewith or
the transactions contemplated hereby or thereby or for recognition or
enforcement of any judgment relating thereto, and each of the parties hereby
irrevocably and unconditionally (a) agrees not to commence any such action or
proceeding except in the United States District Court for the Southern District
of New York, or, if (and only if) such court lacks subject matter jurisdiction,
the Federal court of the United States of America sitting in New York, and any
appellate court from any thereof, (b) agrees that any claim in respect of any
such action or proceeding may be heard and determined in the United States
District Court for the Southern District of New York, or, if (and only if) such
court lacks subject matter jurisdiction, the Federal court of the United States
of America sitting in New York, and any appellate court from any thereof, (c)
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any such
action or proceeding in the United States District Court for the Southern
District of New York, or, if (and only if) such court lacks subject matter
jurisdiction, the Federal court of the United States of America sitting in New
York, and any appellate court from any thereof and (d) waives, to the fullest
extent permitted by Law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in the United States District Court for the
Southern District of New York, or, if (and only if) such court lacks subject
matter jurisdiction, the Federal court of the United States of America sitting
in New York, and any appellate court from any thereof. Each Party agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by Law. Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 8.06. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by Law.

 

[signature page follows]

 

- 20 -

 

 

IN WITNESS WHEREOF, Seller and Purchaser have duly executed this Agreement as of
the date first written above.

 

  WPCS INTERNATIONAL INCORPORATED       By: /s/ SEBASTIAN GIORDANO     Name:
Sebastian Giordano     Title: Chief Executive Officer       BTX TRADER LLC      
By: /s/ ILYA SUBKHANKULOV     Name: Ilya Subkhankulov     Title: Chief Operating
Officer       DIVYA THAKUR       /s/ DIVYA THAKUR       ILYA SUBKHANKULOV      
/s/ ILYA SUBKHANKULOV

 

Signature Page to Securities Purchase Agreement

 

 

 

 

SCHEDULE A

 

Purchaser  Number of Common Equity Units Acquiring        Divya Thakur   6,000 
Ilya Subkhankulov   4,000  Total:   10,000 

 

 

 

 

EXHIBIT A

 

November 26, 2014

 

To the Board of Directors

of WPCS International Incorporated:

 

Ladies and Gentlemen:

 

I hereby resign as a director of WPCS International Incorporated, a Delaware
corporation (the “Company”), effective immediately.

 

Further, I hereby confirm that there are no any outstanding remuneration, fees
or any monies of any nature owed to me by the Company, I have no claim against
the Company in respect of any outstanding remuneration, fees or monies owed of
any nature.

 

        Divya Thakur  

 

 

 

  

EXHIBIT B

 

November 26, 2014

 

WPCS International Incorporated

521 Railroad Avenue

Suisun City, California 94585

Re:         Termination of Stock Option Agreement

 

Ladies and Gentlemen:

 

This letter shall serve as a mutual agreement to terminate the employee
nonstatutory stock option agreement, dated as of April 24, 2014, between Divya
Thakur (the “Holder”) and WPCS International Incorporated (“WPCS”) (the
“Agreement”). Effective immediately, the Agreement shall be deemed terminated
and the Holder hereby confirms that any options granted by WPCS shall be deemed
null and void and forfeited by the Holder.

 

        Divya Thakur

 

Accepted to and agreed this

26th day of November, 2014:

 

WPCS INTERNATIONAL INCORPORATED

 

    By:  Sebastian Giordano   Title:  Chief Executive Officer  

 

 

 

 

November 26, 2014

 

WPCS International Incorporated

521 Railroad Avenue

Suisun City, California 94585

Re:          Termination of Stock Option Agreement

 

Ladies and Gentlemen:

 

This letter shall serve as a mutual agreement to terminate the employee
nonstatutory stock option agreement, dated as of April 24, 2014, between Ilya
Subkhankulov (the “Holder”) and WPCS International Incorporated (“WPCS”) (the
“Agreement”). Effective immediately, the Agreement shall be deemed terminated
and the Holder hereby confirms that any options granted by WPCS shall be deemed
null and void and forfeited by the Holder.

 

        Ilya Subkhankulov

 

Accepted to and agreed this 26th day of November, 2014:   WPCS INTERNATIONAL
INCORPORATED       By:  Sebastian Giordano   Title:  Chief Executive Officer