LOCK-UP AGREEMENT

 

[__], 2013

 

Ladies and Gentlemen:

 

The undersigned is a beneficial owner of shares of capital stock, or securities
convertible into or exercisable or exchangeable for the capital stock (each, a
“Company Security”) of WPCS International Incorporated, a Delaware corporation
(the “Company”).

 

1. Lockup. For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees, for the benefit of the
Company, that, during the period beginning on the date hereof and ending on the
two year anniversary of the date hereof (the “Lockup Period”), the undersigned
will not directly or indirectly, (i) offer, sell, offer to sell, contract to
sell, hedge, pledge, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
sell (or announce any offer, sale, offer of sale, contract of sale, hedge,
pledge, sale of any option or contract to purchase, purchase of any option or
contract of sale, grant of any option, right or warrant to purchase or other
sale or disposition), or otherwise transfer or dispose of (or enter into any
transaction or device that is designed to, or could be expected to, result in
the disposition by any person at any time in the future), any Company Security,
beneficially owned, within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), by the undersigned on the
date hereof or hereafter acquired or (ii) enter into any swap or other agreement
or any transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of any Company Security, whether or not
any such swap or transaction described in clause (i) or (ii) above is to be
settled by delivery of any Company Security.

 

2. Leak-Out Provision. Notwithstanding the lockup provisions of Paragraph 1,
beginning on the six month anniversary of the date hereof and on every six month
anniversary thereafter until the termination of the Lockup Period, 25% of the
Company Securities subject to this Letter Agreement shall be released from the
restrictions contained herein.

 

 

 

3. Permitted Transfer. Notwithstanding the foregoing, the undersigned (and any
transferee of the undersigned) may transfer any Company Security: (i) as a bona
fide gift or gifts, provided that prior to such transfer the donee or donees
thereof agree in writing to be bound by the restrictions set forth herein, (ii)
to any trust, partnership, corporation or other entity formed for the direct or
indirect benefit of the undersigned or the immediate family of the undersigned,
provided that prior to such transfer a duly authorized officer, representative
or trustee of such transferee agrees in writing to be bound by the restrictions
set forth herein, and provided further that any such transfer shall not involve
a disposition for value, (iii) to non-profit organizations qualified as
charitable organizations under Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, or (iv) if such transfer occurs by operation of law, such as
rules of descent and distribution, statutes governing the effects of a merger or
a qualified domestic order, provided that prior to such transfer the transferee
executes an agreement stating that the transferee is receiving and holding any
Company Security subject to the provisions of this Letter Agreement. For
purposes hereof, “immediate family” shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin.

 

3. Governing Law. This Letter Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

 

4. Miscellaneous. This Letter Agreement will become a binding agreement among
the undersigned as of the date hereof. This Letter Agreement (and the agreements
reflected herein) may be terminated by the mutual agreement of the Company and
the undersigned, and if not sooner terminated, will terminate upon the
expiration date of the Lockup Period. This Letter Agreement may be duly executed
by facsimile and in any number of counterparts, each of which shall be deemed an
original, and all of which together shall be deemed to constitute one and the
same instrument. Signature pages from separate identical counterparts may be
combined with the same effect as if the parties signing such signature page had
signed the same counterpart. This Letter Agreement may be modified or waived
only by a separate writing signed by each of the parties hereto expressly so
modifying or waiving such agreement.

 

[SIGNATURE PAGES FOLLOW]

 

 

 

 

 

 

Very truly yours,

 

_______________________________

 

 

 

 

 

Number of shares of Common Stock owned: ________

 

Other Company Securities owned: ___________

 

Certificate Numbers: _____________________________

 

Accepted and Agreed to:

 

WPCS INTERNATIONAL INCORPORATED

 

 

By:___________________________________________

Name:

Title: