Document:

Exhibit 10.6

    Exhibit
      10.6

    

    EMPLOYMENT
      AGREEMENT

    

    THIS
      EMPLOYMENT AGREEMENT is
      made
      effective as of the 1st day
      of
      August, 2005 (the
      “Effective Date”).

    

    AMONG:

    

    QUALITY
      COMMUNICATIONS & ALARM COMPANY,
      INC.
      a
      corporation formed pursuant to the laws of the State of New Jersey and having
      an
      office for business located at 1985 Swarthmore Avenue, Suite 4, Lakewood, New
      Jersey ("Employer"), and wholly owned subsidiary of WPCS
      INTERNATIONAL INCORPORATED,
      a
      corporation formed pursuant to the laws of the State of Delaware
      (“Parent”);

    

    AND

    

    RICHARD
      SCHUBIGER,
      an
      individual having an address at 1985 Swarthmore Avenue, Suite 4, Lakewood,
      New
      Jersey (“Employee”)

    

    WHEREAS,
      Parent
      and Employer are parties to that certain Stock Purchase Agreement of even date
      herewith (the “Purchase Agreement”), pursuant to which Employee has agreed to
      continue to serve as President of Employer, and Employer has agreed to hire
      Employee as such, pursuant to the terms and conditions of this Employment
      Agreement (the “Agreement”).

    

    NOW
      THEREFORE THIS AGREEMENT WITNESSETH THAT in
      consideration of the premises and the mutual covenants, agreements,
      representations and warranties contained herein, the Purchase Agreement, and
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, Employee and Employer hereby agree as follows:

    

    ARTICLE
      1

    EMPLOYMENT

    

    Employer
      hereby affirms, renews and extends the employment of Employee as President,
      and
      Employee hereby affirms, renews and accepts such employment by Employer for
      the
“Term” (as defined in Article 3 below), upon the terms and conditions set forth
      herein. 

    

    ARTICLE
      2

    DUTIES

    

    During
      the Term, Employee shall serve Employer and Parent faithfully, diligently and
      to
      the best of his ability, under the direction and supervision of the Board of
      Directors of Employer and the Chief Executive Officer of Parent and shall use
      his reasonable best efforts to promote the interests and goodwill of Employer,
      Parent and any affiliates, successors, assigns, parent corporations,
      subsidiaries, and/or future purchasers of Employer and Parent. Employee shall
      render such services during the Term at Employer’s principal place of business
      or at such other place of business as may be determined by the Board of
      Directors of Employer, as Employer may from time to time reasonably require
      of
      him, and shall devote all of his time during normal business hours to the
      performance thereof. Employee shall have those duties and powers as generally
      pertain to each of the offices of which he holds, as the case may be, subject
      to
      the control of the Board of Directors.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      3

    TERM

    

    The
      “Term” of this Agreement shall commence on the Effective Date and continue
      thereafter for a term of three (3) years, as may be extended or earlier
      terminated pursuant to the terms and conditions of this Agreement. The Term
      of
      this Agreement shall automatically renew for successive one (1) year periods
      unless, prior to the 30th
      calendar
      day preceding the expiration of the then existing Term, either Employer or
      Employee provides written notice to the other that it elects not to renew the
      Term. Upon delivery of such notice, this Agreement shall continue until
      expiration of the Term, whereupon this Agreement shall terminate and neither
      party shall have any further obligation thereafter arising under this Agreement,
      except as explicitly set forth herein to the contrary.

    

    ARTICLE
      4

    COMPENSATION

    

    Salary

    

    4.1
       Employer
      shall pay to Employee an annual salary (the “Salary”) of One Hundred Forty
      Thousand Dollars ($140,000.00), payable in equal installments at the end of
      such
      regular payroll accounting periods as are established by Employer, or in such
      other installments upon which the parties hereto shall mutually agree, and
      in
      accordance with Employer’s usual payroll procedures, but no less frequently than
      monthly. The Board of Directors of Employer or President of Parent shall review
      the Salary annually to consider any increase thereof. 

    

    Benefits

    

    4.2
       During
      the Term, Employee shall be entitled to participate in all medical and other
      employee benefit plans, including vacation, sick leave, retirement accounts
      and
      other employee benefits provided by Employer to similarly situated employees
      on
      terms and conditions no less favorable than those offered to such employees.
      Such participation shall be subject to the terms of the applicable plan
      documents, Employer’s generally applicable policies, and the discretion of the
      Board of Directors or any administrative or other committee provided for in,
      or
      contemplated by, such plan.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Expense
      Reimbursement

    

    4.3
       Employer
      shall reimburse Employee for reasonable and necessary expenses incurred by
      him
      on behalf of Employer in the performance of his duties hereunder during the
      Term, in accordance with Employer's then customary policies, provided that
      such
      expenses are adequately documented. 

    

    Bonus

     

    4.4 In
      addition to the Salary, Employee shall be entitled to receive an incentive
      bonus
      for calendar year 2005 equal to 30% (the "2005 Bonus") of $120,000, the
      Employee’s salary prior to the effective date of this agreement, if Employer,
      for the calendar year 2005, achieves $13 million in revenue, provided, however,
      that the revenue yields a minimum of 12% in earnings before interest and taxes
      (“EBIT”). For purposes of determining EBIT, the Employer’s revenue will include
      revenue from all business generated by Employer and all business allocated
      to
      Employer by Parent. For clarification purposes, the EBIT number will be
      calculated without any costs imposed by Parent for management fees, director
      fees, indirect or direct corporate overhead, non-business related expenses,
      non-recurring corporate expenses, corporate discretionary expenses and
      non-operating expenses, if any. The determination of revenue and EBIT for
      calendar 2005 shall be made by the independent auditor regularly engaged by
      the
      Employer to complete the Employer’s year-end audit. Such auditor shall be
      engaged solely with the approval of the Parent. The 2005 Bonus shall be paid
      the
      Employee within 110 days of the Employer’s calendar year end. The Employer shall
      prepare and send to Employee as soon as practicable after the end of the first
      three calendar quarters in any calendar year, statements showing the Employer’s
      estimated revenue and EBIT as of the end of each such calendar
      quarter.

     

    4.5
Effective
      January 1, 2006, Employee shall be entitled to receive an annual bonus equal
      to
      three percent (3.0%) (the "Bonus") of Employer’s EBIT without
      any
      costs imposed by Parent for management fees, director fees, indirect or direct
      corporate overhead, non-business related expenses, non-recurring corporate
      expenses, corporate discretionary expenses and non-operating expenses, if any.
      The
      amount of the Bonus shall be determined based upon the EBIT reported in the
      financial statements of Employer, as calculated based on U.S. generally accepted
      accounting principles consistently applied. Employer shall instruct the
      independent auditor regularly engaged by the Employer to calculate the Bonus
      for
      each fiscal year, or portion thereof (an “Auditor’s Bonus Report”), within 105
      days after each fiscal year end. Employer shall provide a copy of each Auditor’s
      Bonus Report to Employee promptly upon receipt thereof. Employee shall have
      the
      right to review and independently verify the conclusions of any Auditor’s Bonus
      Report by delivering notice in writing to Employer within thirty (30) days
      after
      receipt of any such Auditor’s Bonus Report indicating that Employee wishes to
      exercise his right of review and verification. Within ten (10) business days
      after receipt of any such notice, Employer shall make available to Employee
      and
      his representatives, at reasonable times during normal business hours, the
      books
      and records of Employer which are reasonably necessary to conduct such review
      and verification. Employee shall cause such review to be conducted and concluded
      as quickly as reasonably practicable and in such a manner so as not to
      unreasonably interfere with the business and operations of Employer. Any
      representatives conducting such review shall, prior to being given access to
      such books and records, be required to enter into confidentiality and
      non-disclosure agreements with Employer on terms and conditions satisfactory
      to
      Employer, acting reasonably. The costs of any such review shall be borne by
      Employee unless the review indicates a discrepancy between the Bonus figure
      contained in the Auditor’s Bonus Report and the figure, if any, agreed to by
      Employer and Employee following such review of greater than five percent (5%).
      If Employee and Employer shall be unable to resolve any dispute respecting
      any
      determination contained in any Auditor’s Bonus Report, then any disputed matters
      (“Disputed Items”) shall, within 20 days after notice is delivered by Employee
      to Employer that there exist Disputed Items, be submitted to arbitration as
      set
      forth below. Within five (5) business days of Employee’s delivery of written
      acceptance of the Auditor’s Bonus Report (as may have been amended or adjusted
      pursuant to the foregoing procedures) to Employer, Employer shall pay Employee
      the Bonus in a lump sum, subject to Employer’s statutory and customary
      withholdings. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Arbitration

    

    4.6 An
      independent chartered accountant chosen by Employer (hereinafter referred to
      as
“Employer’s Accountant”) and an independent chartered accountant chosen by
      Employee (hereinafter referred to as “Employee’s Accountant”) shall together
      within 20 days, appoint a representative from an accounting firm (other than
      Employer’s Accountant or Employee’s Accountant) to arbitrate the dispute
      (hereinafter referred to as the “Arbitrator”). The parties shall, within 20 days
      after the appointment of the Arbitrator, present their position with respect
      to
      the Disputed Items to the Arbitrator together with such other materials as
      the
      Arbitrator deems appropriate. The Arbitrator shall within 20 days after the
      submission of such evidence, submit its written decision on each Disputed Item
      to the parties. Any determination by the Arbitrator with respect to any Disputed
      Item shall be final and binding on such parties. The Arbitrator shall comply,
      and the arbitration shall be conducted in accordance with, the Commercial
      Arbitration Rules of American Arbitration Association then in force. If the
      Arbitrator determines that the Auditor’s Bonus Report was correct so that the
      Bonus presented therein was equal to or greater than the actual Bonus, or less
      than the actual Bonus by a less than five percent (5%) variance, the costs
      of
      any such arbitration shall be borne by Employee. If the Arbitrator determines
      that the Auditor’s Bonus Report was incorrect so that the Bonus presented
      therein was less than the actual Bonus by more than five percent (5%), the
      costs
      of any such arbitration shall be borne by Employer.

    

    
      
        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      5

    OTHER
      EMPLOYMENT

    

    During
      the Term of this Agreement, Employee shall devote substantially all of his
      time
      during normal business hours, and effort, attention, knowledge, and skill to
      the
      management, supervision and direction of Employer’s business and affairs as
      Employee’s highest professional priority. Except as provided below, Employer
      shall be entitled to all benefits, profits or other issues arising from or
      incidental to all work, services and advice performed or provided by Employee.
      Nothing
      in this Agreement shall preclude Employee from devoting reasonable periods
      required for:

    

    
      	 	
              (a)

            	
              serving
                as a director or member of a committee of any organization or corporation
                involving no conflict of interest with the interests of Employer,
                provided
                that Employee must obtain the written consent of
                Employer;

            

    

    

    
      	 	
              (b)

            	
              serving
                as a consultant in his area of expertise (in areas other than in
                connection with the business of Employer), to government, industrial,
                and
                academic panels where it does not conflict with the interests of
                Employer;
                and

            

    

    

    
      	 	
              (c)

            	
              managing
                his personal investments or engaging in any other non-competing
                business;

            

    

    

    provided
      that such activities do not materially interfere with the regular performance
      of
      his duties and responsibilities under this Agreement.

    

    ARTICLE
      6

    CONFIDENTIAL
      INFORMATION/INVENTIONS

    

    Confidential
      Information

    

    6.1 Employee
      shall not, in any manner, for any reasons, either directly or indirectly,
      divulge or communicate to any person, firm or corporation, any confidential
      information concerning any matters not generally known in the wireless
      communications industry or otherwise made public by Employer which affects
      or
      relates to Employer’s business, finances, marketing and/or operations, research,
      development, inventions, products, designs, plans, procedures, or other data
      (collectively, “Confidential Information”) except in the ordinary course of
      business or as required by applicable law. Without regard to whether any item
      of
      Confidential Information is deemed or considered confidential, material, or
      important, the parties hereto stipulate that as between them, to the extent
      such
      item is not generally known in the wireless communications industry, such item
      is important, material, and confidential and affects the successful conduct
      of
      Employer’s business and goodwill, and that any breach of the terms of this
      Section 6.1 shall be a material and incurable breach of this Agreement.
      Confidential Information shall not include: (i) information obtained or which
      became known to Employee other than through his employment by Employer; (ii)
      information in the public domain at the time of the disclosure of such
      information by Employee; (iii) information that Employee can document was
      independently developed by Employee; (iv) information that is disclosed by
      Employee with the prior written consent of Parent; and (v) information that
      is
      disclosed by Employee as required by law, governmental regulation or court
      order.

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Documents

    

    6.2 Employee
      further agrees that all documents and materials furnished to Employee by
      Employer and relating to the Employer’s business or prospective business are and
      shall remain the exclusive property of Employer. Employee shall deliver all
      such
      documents and materials, uncopied, to Employer upon demand therefore and in
      any
      event upon expiration or earlier termination of this Agreement. Any payment
      of
      sums due and owing to Employee by Employer upon such expiration or earlier
      termination shall be conditioned upon returning all such documents and
      materials, and Employee expressly authorizes Employer to withhold any payments
      due and owing pending return of such documents and materials.

    

    Inventions

    

    6.3 All
      ideas, inventions, and other developments or improvements conceived or reduced
      to practice by Employee, alone or with others, during the Term of this
      Agreement, whether or not during working hours, that are within the scope of
      the
      business of Employer or that relate to or result from any of Employer’s work or
      projects or the services provided by Employee to Employer pursuant to this
      Agreement, shall be the exclusive property of Employer. Employee agrees to
      assist Employer, at Employer’s expense, to obtain patents and copyrights on any
      such ideas, inventions, writings, and other developments, and agrees to execute
      all documents necessary to obtain such patents and copyrights in the name of
      Employer.

    

    Disclosure

    

    6.4 During
      the Term, Employee will promptly disclose to the Board of Directors of Employer
      full information concerning any interest, direct or indirect, of Employee (as
      owner, shareholder, partner, lender or other investor, director, officer,
      employee, consultant or otherwise) or any member of his family (as defined
      in
      Section 10.3) in any business that is reasonably known to Employee to purchase
      or otherwise obtain services or products from, or to sell or otherwise provide
      services or products to, Employer or to any of its suppliers or customers,
      other
      than ownership interests of Employee or any member of his family of 1% or less
      of the outstanding stock of a corporation that is publicly traded.

    

    ARTICLE
      7

    COVENANT
      NOT TO COMPETE

    

    Except
      as
      expressly permitted in Article 5 above, during the Term of this Agreement,
      Employee shall not engage in any of the following competitive activities: (a)
      engaging directly or indirectly in any business or activity substantially
      similar to any business or activity engaged (or scheduled to be engaged) in
      by
      Employer; (b) engaging directly or indirectly in any business or activity
      competitive with any business or activity engaged in (or scheduled to be
      engaged) by Employer; (c) soliciting or taking away any employee, agent,
      representative, contractor, supplier, vendor, customer, franchisee, lender
      or
      investor of Employer, or attempting to so solicit or take away; (d) interfering
      with any contractual or other relationship between Employer and any employee,
      agent, representative, contractor, supplier, vendor, customer, franchisee,
      lender or investor; or (e) using, for the benefit of any person or entity other
      than Employer, any Confidential Information of Employer. The foregoing covenant
      prohibiting competitive activities shall survive the termination of this
      Agreement and shall extend, and shall remain enforceable against Employee,
      for
      the period of two (2) years following the date this Agreement is terminated.
      In
      addition, during the two-year period following such expiration or earlier
      termination, neither Employee nor Employer shall make or permit the making
      of
      any negative statement of any kind concerning Employer or its affiliates, or
      their directors, officers or agents or Employee.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      8

    SURVIVAL

    

    Employee
      agrees that the provisions of Articles 6, 7 and 9 shall survive expiration
      or
      earlier termination of this Agreement for any reasons, whether voluntary or
      involuntary, with or without cause, and shall remain in full force and effect
      thereafter. 

    

    ARTICLE
      9

    INJUNCTIVE
      RELIEF

    

    Employee
      acknowledges and agrees that the covenants and obligations of Employee set
      forth
      in Articles 6 and 7 with respect to non-competition, non-solicitation,
      confidentiality and Employer’s property relate to special, unique and
      extraordinary matters and that a violation of any of the terms of such covenants
      and obligations will cause Employer irreparable injury for which adequate
      remedies are not available at law. Therefore, Employee agrees that Employer
      shall be entitled to an injunction, restraining order or such other equitable
      relief (without the requirement to post bond) as a court of competent
      jurisdiction may deem necessary or appropriate to restrain Employee from
      committing any violation of the covenants and obligations referred to in this
      Article 9. These injunctive remedies are cumulative and in addition to any
      other
      rights and remedies Employer may have at law or in equity.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      10

    TERMINATION

    

    Termination
      by Employee

    

    10.1 Employee
      may terminate this Agreement for Good Reason at any time upon 30 days’ written
      notice to Employer, provided the Good Reason has not been cured within such
      period of time.

    

    Good
      Reason

    

    10.2 In
      this
      Agreement, “Good Reason” means, without Employee’s prior written consent, the
      occurrence of any of the following events, unless Employer shall have fully
      cured all grounds for such termination within thirty (30) days after Employee
      gives notice thereof:

     

     

    
      	 	
              (i)

            	
              any
                reduction in his then-current
                Salary;

            

    

     

    
      	 	
              (ii)

            	
              any
                material failure to timely grant, or timely honor, any equity or
                long-term
                incentive award;

            

    

    

    
      	 	
              (iii)

            	
              failure
                to pay or provide required compensation and
                benefits;

            

    

    

    
      	 	
              (iv)

            	
              any
                failure to appoint, elect or reelect him to the position of President
                of
                Employer; the removal of him from such position; or any changes in
                the
                reporting structure so that Employee reports to someone other than
                the
                Board of Directors of Employer in connection with such
                position;

            

    

    

    
      	 	
              (v)

            	
              any
                material diminution in his title or duties or the assignment to him
                of
                duties not customarily associated with Employee’s position as President of
                Employer; 

            

    

    

    
      	 	
              (vi)

            	
              any
                relocation of Employee’s office as assigned to him by Employer, to a
                location more than 25 miles from Employer’s current office;
                or

            

    

    

    
      	 	
              (vii)

            	
              any
                unreasonable travel required of Employee by Employer, which is materially
                inconsistent with Employer’s past practices.

            

    

    

    The
      written notice given hereunder by Employee to Employer shall specify in
      reasonable detail the cause for termination, and such termination notice shall
      not be effective until thirty (30) days after Employer’s receipt of such notice,
      during which time Employer shall have the right to respond to Employee’s notice
      and cure the breach or other event giving rise to the termination.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Termination
      by Employer

    

    10.3 Employer
      may terminate its employment of Employee under this Agreement for cause at
      any
      time by written notice to Employee. For purposes of this Agreement, the term
      “cause” for termination by Employer shall be (a) a conviction of or plea of
      guilty or nolo
      contendere by
      Employee to a felony, or any crime involving fraud or embezzlement; (b) the
      refusal by Employee to perform his material duties and obligations hereunder;
      (c) Employee’s willful and intentional misconduct in the performance of his
      material duties and obligations; or (d) if Employee or any member of his family
      makes any personal profit arising out of or in connection with a transaction
      to
      which Employer is a party or with which it is associated, other than personal
      profits arising from any non-controlling interest by Employee or his immediate
      family members in a corporation that is publicly traded, without making
      disclosure to and obtaining the prior written consent of Parent. The written
      notice given hereunder by Employer to Employee shall specify in reasonable
      detail the cause for termination. For purposes of this Agreement, “family” shall
      mean Employee’s spouse and/or minor children. In the case of a termination for
      the causes described in (a) and (d) above, such termination shall be effective
      upon receipt of the written notice. In the case of the causes described in
      (b)
      and (c) above, such termination notice shall not be effective until thirty
      (30)
      days after Employee’s receipt of such notice, during which time Employee shall
      have the right to respond to Employer’s notice and cure the breach or other
      event giving rise to the termination.

    

    Severance

    

    10.4 Upon
      a
      termination of this Agreement without Good Reason by Employee or with cause
      by
      Employer, Employer shall pay to Employee all accrued and unpaid compensation
      as
      of the date of such termination, subject to the provision of Section 6.2. Upon
      a
      termination of this Agreement with Good Reason by Employee or without cause
      by
      Employer, Employer shall pay to Employee all accrued and unpaid compensation
      and
      expense reimbursement as of the date of such termination and the “Severance
      Payment.” The Severance Payment shall be payable in a lump sum, subject to
      Employer’s statutory and customary withholdings. If the termination of Employee
      hereunder is by Employee with Good Reason, the Severance Payment shall be paid
      by Employer within fifteen (15) business days of the expiration of any
      applicable cure period. If the termination of Employee hereunder is by Employer
      without cause, the Severance Payment shall be paid by Employer within five
      (5)
      business days of termination, provided that the bonus portion of the Severance
      Payment, if any, shall be payable within 110 days of the calendar year end
      in
      which Employee was terminated. The “Severance Payment” shall equal the total
      amount of the Salary payable to Employee under Section 4.1 of this Agreement
      from the date of such termination until the end of the Term of this Agreement
      (prorated for any partial month), together with a prorated amount of any bonus
      payable under Section 4.4. The prorated amount of any bonus shall be calculated
      based on revenues and EBIT for the entire calendar year during which Employee
      was terminated and prorated for the portion of such year that Employee was
      employed by Employer. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Termination
      Upon Death

    

    10.5 If
      Employee dies during the Term of this Agreement, this Agreement shall terminate,
      except that Employee’s legal representatives shall be entitled to receive any
      earned but unpaid compensation or expense reimbursement due hereunder through
      the date of death, together with a prorated amount of any bonus payable under
      Section 4.4. 

    

    Termination
      Upon Disability

    

    10.6
       If,
      during the Term of this Agreement, Employee suffers and continues to suffer
      from
      a “Disability” (as defined below), then Employer may terminate this Agreement by
      delivering to Employee thirty (30) calendar days’ prior written notice of
      termination based on such Disability, setting forth with specificity the nature
      of such Disability and the determination of Disability by Employer. For the
      purposes of this Agreement, “Disability” means Employee’s inability, with
      reasonable accommodation, to substantially perform Employee’s duties, services
      and obligations under this Agreement due to physical or mental illness or other
      disability for a continuous, uninterrupted period of sixty (60) calendar days
      or
      ninety (90) days during any twelve month period. Upon any such termination
      for
      Disability, Employee shall be entitled to receive any earned but unpaid
      compensation or expense reimbursement due hereunder through the date of
      termination, together with a prorated amount of any bonus payable under Section
      4.4. 

    

    ARTICLE
      11

    PERSONNEL
      POLICIES, CONDITIONS, AND BENEFITS

    

    Except
      as
      otherwise provided herein, Employee’s employment shall be subject to the
      personnel policies and benefit plans which apply generally to Employer’s
      similarly situated employees as the same may be interpreted, adopted, revised
      or
      deleted from time to time, during the Term of this Agreement, by Parent in
      its
      sole discretion. During the Term hereof, Employee shall be entitled to vacation
      during each year of the Term at the rate of four (4) weeks per year. Within
      30
      days after the end of each year of the Term, Employer shall elect to (a) carry
      over and allow Employee the right to use any accrued and unused vacation of
      Employee, or (ii) pay Employee for such vacation in a lump sum in accordance
      with its standard payroll practices. Employee shall take such vacation at a
      time
      approved in advance by the Chairman of Employer or the President of the Parent,
      which approval will not be unreasonably withheld but will take into account
      the
      staffing requirements of Employer and the need for the timely performance of
      Employee's responsibilities.

    

    ARTICLE
      12

    BENEFICIARIES
      OF AGREEMENT

    

    This
      Agreement shall inure to the benefit of Employer and any affiliates, successors,
      assigns, parent corporations, subsidiaries, and/or purchasers of Employer or
      Parent as they now or shall exist while this Agreement is in
      effect.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      13

    GENERAL
      PROVISIONS

    

    No
      Waiver

    

    13.1 No
      failure by either party to declare a default based on any breach by the other
      party of any obligation under this Agreement, nor failure of such party to
      act
      quickly with regard thereto, shall be considered to be a waiver of any such
      obligation, or of any future breach.

    

    

    Modification

    

    13.2 No
      waiver
      or modification of this Agreement or of any covenant, condition, or limitation
      herein contained shall be valid unless in writing and duly executed by the
      parties to be charged therewith.

    

    Choice
      of Law/Jurisdiction

    

    13.3 This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New Jersey, without regard to any conflict-of-laws principles. Employer
      and Employee hereby consent to personal jurisdiction before all courts in the
      State of New Jersey, and hereby acknowledge and agree that New Jersey is and
      shall be the most proper forum to bring a complaint before a court of
      law.

    

    Entire
      Agreement

    

    13.4 This
      Agreement embodies the whole agreement between the parties hereto regarding
      the
      subject matter hereof and there are no inducements, promises, terms, conditions,
      or obligations made or entered into by Employer or Employee other than contained
      herein.

    

    Severability

    

    13.5
       All
      agreements and covenants contained herein are severable, and in the event any
      of
      them, with the exception of those contained in Articles 1 and 4 hereof, shall
      be
      held to be invalid by any competent court, this Agreement shall be interpreted
      as if such invalid agreements or covenants were not contained
      herein.

    

    Headings

    

    13.6 The
      headings contained herein are for the convenience of reference and are not
      to be
      used in interpreting this Agreement.

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Independent
      Legal Advice

    

    13.7 Employer
      has obtained legal advice concerning this Agreement and has requested that
      Employee obtain independent legal advice with respect to same before executing
      this Agreement. Employee, in executing this Agreement, represents and warranties
      to Employer that he has been so advised to obtain independent legal advice,
      and
      that prior to the execution of this Agreement he has so obtained independent
      legal advice, or has, in his discretion, knowingly and willingly elected not
      to
      do so.

    

    No
      Assignment

    

    13.8
       Employee
      may not assign, pledge or encumber his interest in this Agreement nor assign
      any
      of his rights or duties under this Agreement without the prior written consent
      of Parent.

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    IN
      WITNESS WHEREOF the
      parties have executed this Agreement effective as of the day and year first
      above written.

     

     

     

     

    
      	 	 	 
	 	
              QUALITY
                COMMUNICATIONS & ALARM COMPANY, INC.

            
	 
 	 
 	 
 
	 	By:  	/s/ ANDREW
              HIDALGO
	 	
              

              ANDREW
                HIDALGO

            
	 	Title:
              Director

    

    
      
        	
              	 	 
	 	
                 

              
	 
 	 
 	 
 
	 	 	/s/ RICHARD
                SCHUBIGER
	 	
                

                RICHARD
                  SCHUBIGERExhibit 10.10

    Exhibit
      10.10

    

    AGREEMENT
      AND PLAN OF MERGER

    

    

    THIS
      AGREEMENT AND PLAN OF MERGER
      is made
      as of the 30th day of December,
      2002

    

    AMONG:

    

    WPCS
      INTERNATIONAL INCORPORATED,
      a
      corporation formed pursuant to the laws of the State of Delaware and having
      an
      office for business located at 140 South Village Avenue, Suite 20, Exton,
      Pennsylvania 19341

    

    (“WPCS”)

    

    AND:

    

    WALKER
      COMM MERGER CORP.,
      a body
      corporate formed pursuant to the laws of the State of Delaware and a wholly
      owned subsidiary of WPCS

    

    (the
      "Acquirer")

    

    AND:

    

    WALKER
      COMM, INC.,
      a body
      corporate formed pursuant to the laws of the State of California and having
      an
      office for business located at 521 Railroad Avenue, Fairfield, California
      94533

    

    ("Walker")

    

    AND:

    

    DONALD
      C. WALKER,
      an
      individual having an address at 521 Railroad Avenue, Fairfield, California
      94533

    

    (“D.
      Walker”)

    

    AND:

    

    GARY
      R. WALKER,
      an
      individual having an address at 521 Railroad Avenue, Fairfield, California
      94533

    

    (“G.
      Walker”)

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    AND:

    

    TANYA
      D. SANCHEZ,
      an
      individual having an address at 521 Railroad Avenue, Fairfield, California
      94533

    

    (“T.
      Sanchez”, and together with D. Walker and G. Walker, the “Walker
      Shareholders”)

    

    

    WHEREAS:

    

    A. Walker
      is
      a California corporation engaged in the business of providing structured cabling
      systems;

    

    B. The
      Walker Shareholders own 100 Walker Shares (of which D. Walker owns 51 shares,
      G.
      Walker owns 39 shares and T. Sanchez owns 10 shares), being 100% of the
      presently issued and outstanding Walker Shares;

    

    C. WPCS
      is a
      reporting company whose common stock is quoted on the NASD “Bulletin Board” and
      which is engaged in the business of providing fixed wireless telecommunications
      services;

    

    D. The
      respective Boards of Directors of WPCS, Walker and the Acquirer deem it
      advisable and in the best interests of WPCS, Walker and the Acquirer that the
      Acquirer merge with and into Walker (the "Merger") pursuant to this Agreement
      and the Certificate of Merger, and the applicable provisions of the laws of
      the
      State of Delaware and the State of California; and

    

    E. It
      is
      intended that the Merger shall qualify for United States federal income tax
      purposes as a reorganization within the meaning of Section 368(a)(1)(A) of
      the
      Internal Revenue Code of 1986, as amended.

    

    NOW
      THEREFORE THIS AGREEMENT WITNESSETH THAT
      in
      consideration of the premises and the mutual covenants, agreements,
      representations and warranties contained herein, and other good and valuable
      consideration, the receipt and sufficiency of which is hereby acknowledged,
      the
      parties hereto hereby agree as follows:

    

    

    ARTICLE
      1

    DEFINITIONS
      AND INTERPRETATION

    

    Definitions

    

    
      	1.1  	
              In
                this Agreement the following terms will have the following
                meanings:

            

    

    

    
      	(a)  	
              “Acquisition
                Shares”
                means the 2,486,000 WPCS Common Shares to be issued to the Walker
                Shareholders or at their direction at Closing pursuant to the Merger
                and
                the terms of this Agreement;

            

    

    

    
      	(b)  	
              “Agreement”
                means this Agreement and Plan of Merger among WPCS, the Acquirer,
                Walker,
                and the Walker Shareholders;

            

    

    

    
      	(c)  	
              “CGCL”
                means the California General Corporation
                Law;

            

    

    

    
      	(d)  	
              “Closing”
                means the completion, on the Closing Date, of the transactions
                contemplated hereby in accordance with Article 9
                hereof;

            

    

    

    
      	(e)  	
              “Closing
                Date”
                means the day on which all conditions precedent to the completion
                of the
                transaction as contemplated hereby have been satisfied or
                waived;

            

    

    

    
      	(f)  	
              “Commission”
                means the Securities and Exchange Commission;

            

    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
 

    
      	(g)  	
              “DGCL”
                means the General Corporation Law of the State of
                Delaware;

            

    

    

    
      	(h)  	
              “Effective
                Time”
                means the date of the filing of an appropriate Certificate of Merger
                in
                the form required by the State of Delaware and the State of California,
                which provide that the Merger shall become effective upon such
                filings;

            

    

    

    
      	(i)  	
              “Employment
                Agreements”
                means the employment agreements to be entered into on the Closing
                Date
                between Walker and D. Walker and Walker and G. Walker in the forms
                attached hereto as Exhibit “A”;

            

    

    

    
      	(j)  	
              “Exchange
                Act”
                means the Securities Exchange Act of 1934, as
                amended;

            

    

    

    
      	(k)  	
              “Merger”
                means the merger, at the Effective Time, of Walker and the Acquirer
                pursuant to this Agreement and Plan of
                Merger;

            

    

    

    
      	(l)  	
              “Place
                of Closing”
                means the offices of Sichenzia Ross Friedman Ference LLP, 1065 Avenue
                of
                the Americas, New York, New York 10018, or such other place as WPCS
                and
                Walker may mutually agree upon;

            

    

    

    
      	(m)  	
              “Registration
                Rights Agreement”
                means the Registration Rights Agreement to be entered into on the
                Closing
                Date between WPCS and the Walker Shareholders in respect of the
                Acquisition Shares in the form attached hereto as Exhibit
                “B”;

            

    

    

    
      	(n)  	
              “SEC
                Reports”
                means all forms, reports and documents filed and required to be filed
                by
                WPCS with the Commission under the Exchange
                Act;

            

    

    

    
      	(o)  	
              “Securities
                Act”
                means the Securities Act of 1933, as amended;

            

    

    

    
      	(p)  	
              “Surviving
                Company”
                means Walker following the Merger with the
                Acquirer;

            

    

    

    
      	(q)  	
              “Walker
                Accounts Payable and Liabilities”
                means all accounts payable and liabilities of Walker, due and owing
                or
                otherwise constituting a binding obligation of Walker (other than
                a Walker
                Material Contract) as of October 31, 2002 as set forth in Schedule
“A”
                hereto;

            

    

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
 

    
      	(r)  	
              “Walker
                Accounts Receivable”
                means all accounts receivable and other debts owing to Walker, as
                of
                October 31, 2002 as set forth in Schedule “B”
                hereto;

            

    

    

    
      	(s)  	
              “Walker
                Assets”
                means all the property and assets of the Walker Business of every
                kind and
                description wheresoever situated including, without limitation, Walker
                Equipment, Walker Material Contracts, Walker Accounts Receivable,
                Walker
                Cash, Walker Intangible Assets, Walker Goodwill, Walker Unlisted
                Inventory, and all credit cards, charge cards and banking cards issued
                to
                Walker;

            

    

    

    
      	(t)  	
              “Walker
                Bank Accounts”
                means all of the bank accounts, lock boxes and safety deposit boxes
                of
                Walker or relating to the Walker Business as set forth in Schedule
“C”
                hereto; 

            

    

    

    
      	(u)  	
              “Walker
                Business”
                means all aspects of the business conducted by
                Walker;

            

    

    

    
      	(v)  	
              “Walker
                Cash”
                means all cash on hand or on deposit to the credit of Walker on the
                Closing Date;

            

    

    

    
      	(w)  	
              “Walker
                Debt to Related Parties”
                means the debts owed by Walker and its subsidiaries to any of the
                Walker
                Shareholders or to any family member thereof, or to any affiliate,
                director or officer of Walker or the Walker Shareholders as described
                in
                Schedule “D”;

            

    

    

    
      	(x)  	
              “Walker
                Equipment”
                means all machinery, equipment, furniture, and furnishings used in
                the
                Walker Business, including, without limitation, the items more
                particularly described in Schedule “E”
hereto;

            

    

    

    
      	(y)  	
              “Walker
                Financial Statements”
                means collectively, the financial statements of Walker for the years
                ended
                December 31, 2000 and 2001, and the ten months ended October 31,
                2002, all
                of which were prepared on an accrual
                basis in accordance with United States generally accepted accounting
                principles (other than the treatment of the Walker Unlisted Inventory),
                true copies of which are attached as Schedule “F”
                hereto;

            

    

    

    
      	(z)  	
              “Walker
                Goodwill”
                means the goodwill of the Walker Business together with the exclusive
                right of WPCS to represent itself as carrying on the Walker Business
                in
                succession of Walker subject to the terms hereof, and the right to
                use any
                words indicating that the Walker Business is so carried on including
                the
                right to use the name "Walker” or “Walker International" or any variation
                thereof as part of the name of or in connection with the Walker Business
                or any part thereof carried on or to be carried on by Walker, the
                right to
                all corporate, operating and trade names associated with the Walker
                Business, or any variations of such names as part of or in connection
                with
                the Walker Business, all telephone listings and telephone advertising
                contracts, all lists of customers, books and records and other information
                relating to the Walker Business, all necessary licenses and authorizations
                and any other rights used in connection with the Walker
                Business;

            

    

    

    
      	(aa)  	
              “Walker
                Insurance Policies”
                means the public liability insurance and insurance against loss or
                damage
                to Walker Assets and the Walker Business as described in Schedule
“G”
                hereto;

            

    

     

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
 

    
      	(bb)  	
              “Walker
                Intangible Assets”
                means all of the intangible assets of Walker, including, without
                limitation, Walker Goodwill, all trademarks, logos, copyrights, designs,
                and other intellectual and industrial property of Walker and its
                subsidiaries;

            

    

     

    
      	(cc)  	
              “Walker
                Material Contracts”
                means the burden and benefit of and the right, title and interest
                of
                Walker in, to and under all trade and non-trade contracts, engagements
                or
                commitments, whether written or oral, to which Walker is entitled
                in
                connection with the Walker Business whereunder Walker is obligated
                to pay
                or entitled to receive the sum of $10,000 or more including, without
                limitation, any pension plans, profit sharing plans, bonus plans,
                loan
                agreements, security agreements, indemnities and guarantees, any
                agreements with employees, lessees, licensees, managers, accountants,
                suppliers, agents, distributors, officers, directors, attorneys or
                others
                which cannot be terminated without liability on not more than one
                month's
                notice, and those contracts listed in Schedule “I” hereto;
                and

            

    

     

    
      	(dd)  	
              “Walker
                Shares”
                means all of the issued and outstanding shares of Walker's equity
                stock;

            

    

    

    
      	(ee)  	
              “Walker
                Unlisted Inventory”
                means the inventory listed on Schedule I hereto, which does not appear
                on
                the Walker Financial Statements.

            

    

    

    
      	(ff)  	
              “WPCS
                Business”
                means all aspects of any business conducted by WPCS and its
                subsidiaries;

            

    

    

    
      	(gg)  	
              “WPCS
                Common Shares”
                means the Common Stock, $0.0001 par value per share, of WPCS;
                and

            

    

    

    
      	(hh)  	
              “WPCS
                Financial Statements”
                means, collectively, the audited consolidated financial statements
                of WPCS
                for the fiscal years ended April 30, 2001 and 2002, together with
                the
                unqualified auditors’ report thereon, and the unaudited financial
                statements six month periods ended October 31, 2001 and 2002, true
                copies
                of which are attached as Schedule “K”
hereto.

            

    

    

    Any
      other
      terms defined within the text of this Agreement will have the meanings so
      ascribed to them.

    

    Captions
      and Section Numbers

    

    1.2 The
      headings and section references in this Agreement are for convenience of
      reference only and do not form a part of this Agreement and are not intended
      to
      interpret, define or limit the scope, extent or intent of this Agreement or
      any
      provision thereof.

    

    Section
      References and Schedules

    

    1.3 Any
      reference to a particular “Article”, “section”, “paragraph”, “clause” or other
      subdivision is to the particular Article, section, clause or other subdivision
      of this Agreement and any reference to a Schedule or Exhibit by letter will
      mean
      the appropriate Schedule or Exhibit attached to this Agreement and by such
      reference the appropriate Schedule or Exhibit is incorporated into and made
      part
      of this Agreement. The Schedules and Exhibits to this Agreement are as
      follows:

     

     

    
 

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    Information
      concerning Walker

    

    Walker
      Disclosure Letter, including the following Schedules appurtenant
      thereto:

     

     

    
      	Schedule 	“A” 	Walker Accounts Payable and
              Liabilities 
	Schedule 	“B” 	Walker Accounts Receivable 
	Schedule 	“C” 	Walker Bank Accounts 
	Schedule 	“D” 	
              Walker
                Debts to Related Parties (including accounts payable aging
                ledger) 

            
	Schedule 	“E” 	Walker Equipment 
	Schedule 	“F” 	Walker Financial
              Statements 
	Schedule 	“G” 	Walker Insurance Policies 
	Schedule 	“H”  	Walker Material Contracts 
	Schedule 	“I” 	Walker Unlisted Inventory
	Schedule 	“J” 	Walker Unlisted
              Tools 

    

     

     

     

    Information
      concerning WPCS

    

    Walker
      Disclosure Letter, including the following Schedules appurtenant
      thereto:

     

     

    
      	Schedule 	“K” 	Financial
              Statements 

    

    

    

    Ancillary
      Agreements

     

    
      
        	Exhibit 	“A” 	Form of Employment
                Agreements 
	Exhibit  	“B” 	Form of Registration Rights
                Agreement 
	Exhibit  	“C” 	Form of Security Agreement and
                UCC-1 
	Exhibit	“D” 	Form of Indemnification
                Agreement 
	Exhibit  	“E”  	Form of Assumption
                Agreement 

      

    

     

     

    

    Severability
      of Clauses

    

    1.4 If
      any
      part of this Agreement is declared or held to be invalid for any reason, such
      invalidity will not affect the validity of the remainder which will continue
      in
      full force and effect and be construed as if this Agreement had been executed
      without the invalid portion, and it is hereby declared the intention of the
      parties that this Agreement would have been executed without reference to any
      portion which may, for any reason, be hereafter declared or held to be
      invalid.

    

    ARTICLE
      2

    THE
      MERGER

    

    The
      Merger

    

    2.1 At
      Closing, the Acquirer shall be merged with and into Walker pursuant to this
      Agreement and Plan of Merger and the separate corporate existence of the
      Acquirer shall cease and Walker, as it exists from and after the Closing, shall
      be the Surviving Company.

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    Effect
      of the Merger

    

    2.2 The
      Merger shall have the effect provided therefor by the DGCL and CGCL. Without
      limiting the generality of the foregoing, and subject thereto, at Closing (i)
      all the rights, privileges, immunities, powers and franchises, of a public
      as
      well as of a private nature, and all property, real, personal and mixed, and
      all
      debts due on whatever account, including without limitation subscriptions to
      shares, and all other choses in action, and all and every other interest of
      or
      belonging to or due to Walker or the Acquirer, as a group, subject to the terms
      hereof, shall be taken and deemed to be transferred to, and vested in, the
      Surviving Company without further act or deed; and all property, rights and
      privileges, immunities, powers and franchises and all and every other interest
      shall be thereafter as effectually the property of the Surviving Company, as
      they were of Walker and the Acquirer, as a group, and (ii) all debts,
      liabilities, duties and obligations of Walker and the Acquirer, as a group,
      subject to the terms hereof, shall become the debts, liabilities and duties
      of
      the Surviving Company and the Surviving Company shall thenceforth be responsible
      and liable for all debts, liabilities, duties and obligations of Walker and
      the
      Acquirer, as a group, and neither the rights of creditors nor any liens upon
      the
      property of Walker or the Acquirer, as a group, shall be impaired by the Merger,
      and may be enforced against the Surviving Company. 

    

    Certificate
      of Incorporation; Bylaws; Directors and Officers

    

    2.3 The
      Certificate of Incorporation of the Surviving Company from and after the Closing
      shall be the Certificate of Incorporation of Walker until thereafter amended
      in
      accordance with the provisions therein and as provided by the applicable
      provisions of the CGCL. The Bylaws of the Surviving Company from and after
      the
      Closing shall be the Bylaws of Walker as in effect immediately prior to the
      Closing, continuing until thereafter amended in accordance with their terms,
      the
      Certificate of Incorporation of the Surviving Company and as provided by the
      CGCL. The Directors of the the Surviving Company at the Effective Time shall
      be
      D. Walker, G. Walker, Andrew Hidalgo, E.J. von Schaumburg and Andrew
      Shoffner.

    

    Conversion
      of Securities

    

    2.4 At
      the
      Effective Time, by virtue of the Merger and without any action on the part
      of
      the Acquirer, Walker or the Walker Shareholders, the shares of capital stock
      of
      each of Walker and the Acquirer shall be converted as follows:

    

    
      	(a)  	
              Capital
                Stock of the Acquirer.
                Each issued and outstanding share of the Acquirer's capital stock
                shall
                continue to be issued and outstanding and shall be converted into
                one
                share of validly issued, fully paid, and non-assessable common stock
                of
                the Surviving Company. Each stock certificate of the Acquirer evidencing
                ownership of any such shares shall continue to evidence ownership
                of such
                shares of capital stock of the Surviving
                Company.

            

    

    

    
      	(b)  	
              Conversion
                of Walker Shares.
                Each Walker Share that is issued and outstanding at the Effective
                Time
                shall automatically be cancelled and extinguished and converted,
                without
                any action on the part of the holder thereof, into the right to receive
                at
                the time and in the amounts described in this Agreement an amount
                of
                Acquisition Shares equal to the number of Acquisition Shares divided
                by
                the number of the Walker Shares outstanding immediately prior to
                Closing.
                All such Walker Shares, when so converted, shall no longer be outstanding
                and shall automatically be cancelled and retired and shall cease
                to exist,
                and each holder of a certificate representing any such shares shall
                cease
                to have any rights with respect thereto, except the right to receive
                the
                Acquisition Shares paid in consideration therefor upon the surrender
                of
                such certificate in accordance with this Agreement. Notwithstanding
                the
                foregoing, the Walker Shareholders direct WPCS to deliver 74,580
                Acquisition Shares to Crader & Associates, Inc., and 24,860
                Acquisition Shares to Ray Helterline (collectively, the “Crader
                Shares”).
                Such Crader Shares shall be deducted pro rata from the Acquisition
                Shares
                otherwise deliverable to the Walker
                Shareholders.

            

    

    

    Additional
      Consideration

    

    2.5  In
      addition to the Acquisition Shares, WPCS shall pay the Walker Shareholders
      additional consideration in the amount of $1,000,000 (“Cash
      Consideration”).
      The
      Cash Consideration shall be paid as follows:

    

    
      	(a)  	
              On
                the Closing Date, WPCS shall pay the Walker Shareholders an aggregate
                of
                $500,000 by certified check, bank check or wire transfer. Such amount
                shall be paid to the Walker Shareholders in proportion to their ownership
                of Walker immediately prior to the
                Merger.

            

    

    

    
      	(b)  	
              The
                $500,000 of remaining Cash Consideration shall be paid through quarterly
                distributions equal to 75% of the net income of Walker (i) after
                the
                elimination of all expenses related to (y) services provided to Walker
                by
                WPCS or any affiliate thereof and (z) transactions between Walker
                and WPCS
                or any affiliate thereof, and (ii) prior to the deduction of interest,
                taxes, depreciation and amortization (“Walker
                Earn-Out Payment”),
                provided, however, that if either D. Walker or G. Walker are (A)
                terminated without cause, or (B) terminate their respective Employment
                Agreements for Good Reason (as defined therein), prior to the completion
                of the terms of their respective Employment Agreements, WPCS shall
                immediately pay the unpaid balance of the Cash Consideration. Commencing
                with each fiscal quarter of WPCS occurring after the Closing Date,
                WPCS
                shall pay, or cause Walker to pay, the Walker Shareholders an amount
                equal
                to the Walker Earn-Out Payment within five business days after the
                earlier
                of (i) the filing with the SEC of a WPCS quarterly report on Form
                10-QSB
                (or Form 10-Q), or the annual report on Form 10-KSB (or Form 10-K),
                whichever SEC form is required to be filed after the applicable fiscal
                period, or (ii) the final date on which such reports are required
                to be
                filed, taking into consideration any permitted automatic extension
                of time
                to file such reports. Such amounts shall be paid to the Walker
                Shareholders in proportion to their ownership of Walker immediately
                prior
                to the Merger. Such payments will be made until an aggregate of $500,000
                shall have been paid to the Walker Shareholders pursuant to this
                Section
                2.5(b). In order to secure the timely payment of all monies due to
                be paid
                for Cash Consideration pursuant to this Agreement, WPCS, Walker and
                the
                Walker Shareholders shall enter into a Security Agreement in substantially
                the form of Exhibit C attached hereto and shall execute and file
                an
                appropriate form UCC-1.

            

    

     

     

    
 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    Adherence
      with Applicable Securities Laws

    

    
      	2.6  	
              The
                Walker Shareholders agree that they are acquiring the Acquisition
                Shares
                for investment purposes and will not offer, sell or otherwise transfer,
                pledge or hypothecate any of the Acquisition Shares issued to them
                (other
                than pursuant to an effective registration statement under the
                Securities
                Act)
                directly or indirectly unless:

            

    

    

    
      	(a)  	
              the
                sale is to WPCS;

            

    

    

    
      	(b)  	
              the
                sale is made pursuant to the exemption from registration under the
                Securities
                Act,
                provided by Rule 144 thereunder; or

            

    

    

    
      	(c)  	
              the
                Acquisition Shares are sold in a transaction that does not require
                registration under the Securities
                Act,
                or
                any applicable United States state laws and regulations governing
                the
                offer and sale of securities, and the seller has furnished to WPCS
                an
                opinion of counsel to that effect or such other written opinion as
                may be
                reasonably required by WPCS.

            

    

    

    The
      Walker Shareholders acknowledge that the certificates representing the
      Acquisition Shares shall bear the following legend:

    

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT. THEY
      MAY
      NOT BE MORTGAGED, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED WITHOUT AN
      EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF
      1933 AND OTHER APPLICABLE SECURITIES LAWS OR AN OPINION OF COUNSEL FOR THE
      COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND OTHER APPLICABLE
      SECURITIES LAWS. THE HOLDER MAY BE REQUIRED TO PROVIDE AN OPINION AT THE
      HOLDER’S COST TO THE COMPANY THAT SUCH TRANSFER IS PERMITTED WITHOUT
      REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS, WHICH OPINION MUST BE
      ACCEPTABLE TO THE COMPANY’S COUNSEL.

    

    

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    

    

    ARTICLE
      3

    REPRESENTATIONS
      AND WARRANTIES

    OF
      WPCS

    

    Representations
      and Warranties

    

    3.1 WPCS
      represents and warrants to Walker and the Walker Shareholders, with the intent
      that Walker and the Walker Shareholders will rely thereon in entering into
      this
      Agreement and in approving and completing the transactions contemplated hereby,
      that, except as disclosed in the WPCS Disclosure Letter:

    

    WPCS
      - Corporate Status and Capacity

    

    
      	(a)  	
              Incorporation.
                WPCS and each of its subsidiaries is a corporation duly organized,
                validly
                existing and in good standing under the laws of the state of its
                incorporation, has the corporate power and authority to own, operate
                and
                lease its properties and to carry on its business as now conducted
                or as
                proposed to be conducted, and is qualified as a foreign corporation
                in
                each jurisdiction in which a failure to be so qualified could reasonably
                be expected to have a material adverse effect on its present or expected
                operations or financial condition.

            

    

    

    
      	(b)  	
              Power
                and Capacity.
                Each of WPCS and Acquirer has the right, power, legal capacity and
                authority to enter into and perform its obligations under this Agreement,
                and all agreements to which WPCS and/or Acquirer is or will be a
                party
                that are required to be executed pursuant to this Agreement (the
                “WPCS
                Ancillary Agreements”).
                The execution, delivery and performance of this Agreement and the
                WPCS
                Ancillary Agreements have been duly and validly approved and authorized
                by
                the respective Boards of Directors of WPCS and Acquirer, and the
                stockholder of Acquirer, as required by applicable law and their
                respective certificates of incorporation and
                bylaws.

            

    

    

    
      	(c)  	
              No
                Filings.
                No filing, authorization or approval, governmental or otherwise,
                is
                necessary to enable WPCS and Acquirer to enter into, and to perform
                their
                respective obligations under, this Agreement and the WPCS Ancillary
                Agreements, except for (a) the filing of the Agreement of Merger with
                the Delaware and California Secretaries of State, the recording of
                the
                Agreement of Merger in the office of the Recorder of the Delaware
                county
                in which WPCS’s registered office is located, and the filing of
                appropriate documents with the relevant authorities of other states
                in
                which WPCS is qualified to do business, if any, and (b) such filings
                as may be required to comply with federal and state securities
                laws.

            

    

    

    
      	(d)  	
              Binding
                Obligation.
                This Agreement and the WPCS Ancillary Agreements are, or when executed
                by
                WPCS and/or Acquirer (as applicable) will be, valid and binding
                obligations of WPCS and Acquirer enforceable in accordance with their
                respective terms, except as to the effect, if any, of (a) applicable
                bankruptcy and other similar laws affecting the rights of creditors
                generally, and (b) rules of law governing specific performance, injunctive
                relief and other equitable remedies

            

    

    

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
 

    
      	(e)  	
              Reporting
                Status; Listing.
                WPCS’s common stock is registered under Section 12(b) or 12(g) of the
                Exchange Act and WPCS is required to file current reports with the
                Commission pursuant to section 13(a) of the Exchange Act. The WPCS
                Common
                Shares are quoted on the NASD "Bulletin Board” under the symbol
                “WPCS”;

            

    

    

    
      	(f)  	
              SEC
                Reports.
                WPCS has timely filed all SEC Reports with the Commission under the
                Exchange Act. The SEC Reports, at the time filed, complied as to
                form in
                all material respects with the requirements of the Exchange Act.
                None of
                the SEC Reports, including without limitation any financial statements
                or
                schedules included therein, contains any untrue statements of a material
                fact or omits to state a material fact necessary in order to make
                the
                statements made, in light of the circumstances under which they were
                made,
                not misleading;

            

    

    

    Acquirer
      - Corporate Status and Capacity

    

    

    
      	(g)  	
              Carrying
                on Business.
                Other than corporate formation and organization, the Acquirer has
                not
                carried on any business activities to
                date.

            

    

    

    

    WPCS
      - Capitalization

    

    
      	(h) 
              	
              Authorized
                Capital.
                The authorized capital of WPCS consists of 30,000,000 WPCS Common
                Shares,
                $0.0001 par value and 5,000,000 shares of preferred stock. $0.0001
                par
                value, of which 10,592,844 WPCS Common Shares, no shares of Series
                B
                Convertible Preferred Stock and 1,000 shares of Series C Convertible
                Preferred Stock are presently issued and outstanding;
                

            

    

    

    
      	(i)  	
              No
                Option.
                No person, firm or corporation has any agreement, warrant or option
                or any
                right capable of becoming an agreement, warrant or option for the
                acquisition of any capital stock or equity interest in WPCS, except
                for an
                option to purchase 11,111 WPCS Common Shares at $2.75 per share expiring
                April 30, 2003, no shares of Series B Convertible Preferred Stock
                and
                1,000 shares of Series C Convertible Preferred
                Stock;

            

    

    

    
      	(j)  	
              Agreements
                Concerning WPCS Capital Stock.
                There are no restrictions on the transfer, sale or other disposition
                of
                any capital stock of WPCS contained in the charter documents of WPCS
                or
                under any other agreements. There are no stockholder agreements,
                investor
                rights agreements, co-sale agreements, right of first refusal agreements,
                voting agreements, registration rights agreements or any other similar
                type of agreement to which WPCS, any subsidiary of WPCS or any officer
                or
                director of WPCS (or any subsidiary of WPCS) is a party.
                

            

    

    

    Acquirer
      - Capitalization

    

    
      	(k)  	
              Authorized
                Capital.
                The authorized capital of the Acquirer consists of 100 shares of
                common
                stock, $0.0001 par value, of which one share of common stock is presently
                issued and outstanding;

            

    

    

    
      	(l)  	
              No
                Option.
                No person, firm or corporation has any agreement, warrant or option
                or any
                right capable of becoming an agreement, warrant or option for the
                acquisition of any capital stock or equity interest in
                Acquirer;

            

    

     

    
 

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    WPCS
      - Records and Financial Statements

    

    
      	(m)  	
              Charter
                Documents.
                The charter documents of WPCS and the Acquirer have not been altered
                since
                the incorporation of each, respectively, except as filed in the record
                books of WPCS or the Acquirer, as the case may be, copies of which
                have
                been provided to Walker;

            

    

    

    
      	(n)  	
              Corporate
                Minute Books.
                The corporate minute books of WPCS and its subsidiaries are complete
                and
                each of the minutes contained therein accurately reflect the actions
                that
                were taken at a duly called and held meeting or by consent without
                a
                meeting. All actions by WPCS and its subsidiaries which required
                director
                or shareholder approval are reflected on the corporate minute books
                of
                WPCS and its subsidiaries. WPCS and its subsidiaries are not in violation
                or breach of, or in default with respect to, any term of their respective
                Certificates of Incorporation (or other charter documents) or by-laws,
                except where such breach or default would not have a material adverse
                effect upon WPCS or such subsidiary,
                respectively;

            

    

    

    
      	(o)  	
              WPCS
                Financial Statements.
                The WPCS Financial Statements present fairly, in all material respects,
                the assets and liabilities (whether accrued, absolute, contingent
                or
                otherwise) of WPCS, on a consolidated basis, as of the respective
                dates
                thereof, and the results of operations and statement of cash flows
                of WPCS
                during the periods covered thereby, in all material respects and
                have been
                prepared in accordance with generally accepted accounting principles
                consistently applied throughout the periods
                indicated;

            

    

    

    
      	(p)  	
              WPCS
                Accounts Payable and Liabilities.
                There are no material liabilities, contingent or otherwise, of WPCS
                or its
                subsidiaries which are not reflected in the WPCS Financial Statements
                except those incurred in the ordinary course of business since the
                date of
                the said schedule and the WPCS Financial Statements, and neither
                WPCS nor
                its subsidiaries have guaranteed or agreed to guarantee any debt,
                liability or other obligation of any person, firm or
                corporation;

            

    

    

    
      	(q)  	
              WPCS
                Accounts Receivable.
                All the accounts receivable of WPCS result from bona fide business
                transactions and services actually rendered without, to the knowledge
                and
                belief of WPCS, any claim by the obligor for set-off or counterclaim,
                and
                are reflected in the WPCS Financial
                Statements;

            

    

    

    
      	(r)  	
              Certain
                Transactions and Agreements.
                None of the officers of WPCS or any subsidiary, nor any member of
                their
                immediate families, has any direct or indirect ownership interest
                in any
                firm or corporation that competes with WPCS (except with respect
                to any
                interest in less than one percent of the stock of any corporation
                whose
                stock is publicly traded). None of said officers or directors, or
                any
                member of their immediate families, is directly or indirectly interested
                in any contract or informal arrangement with WPCS or any subsidiary,
                except for normal compensation for services as an officer, director
                or
                employee thereof. None of said officers or directors or family members
                has
                any interest in any property, real or personal, tangible or intangible,
                including inventions, patents, copyrights, trademarks or trade names
                or
                trade secrets, used in or pertaining to the business of WPCS or any
                subsidiary, except for the normal rights of a
                stockholder;

            

    

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
 

    
      	(s)  	
              Interested
                Party Transactions.
                No officer or director of WPCS or any “affiliate” or “associate” (as those
                terms are defined in Rule 405 promulgated under the Securities Act)
                of any such person has had, either directory or indirectly, a material
                interest in: (i) any person or entity which purchases from or sells,
                licenses or furnishes to WPCS or any subsidiary any goods, property,
                technology or intellectual or other property rights or services;
                or
                (ii) any contract or agreement to which WPCS or any subsidiary is a
                party or by which it may be bound or
                affected;

            

    

    

    
      	(t)  	
              No
                Dividends.
                No dividends or other distributions on any shares in the capital
                of WPCS
                have been made, declared or authorized since the date of WPCS Financial
                Statements;

            

    

    

    
      	(u)  	
              No
                Payments.
                No payments of any kind have been made or authorized since the date
                of the
                WPCS Financial Statements to or on behalf of officers, directors,
                shareholders or employees of WPCS or its subsidiaries or under any
                management agreements with WPCS or its subsidiaries, except payments
                made
                in the ordinary course of business and at the regular rates of salary
                or
                other remuneration payable to them;

            

    

    

    
      	(v)  	
              No
                Pension Plans.
                There are no pension, profit sharing, group insurance or similar
                plans or
                other deferred compensation plans affecting WPCS or its
                subsidiaries;

            

    

    

    
      	(w)  	
              No
                Adverse Events.
                Since October 31, 2002,

            

    

    

    
      	(i)  	
              there
                has not been any material adverse change in the properties, results
                of
                operations, financial position or condition (financial or otherwise)
                of
                WPCS, its subsidiaries, its assets or liabilities or any damage,
                loss or
                other change in circumstances materially affecting WPCS, the WPCS
                Business
                or WPCS’ right to carry on the WPCS Business, other than changes in the
                ordinary course of business,

            

    

    

    
      	(ii)  	
              there
                has not been any damage, destruction, loss or other event (whether
                or not
                covered by insurance) materially and adversely affecting WPCS, its
                subsidiaries, or the WPCS Business,

            

    

    

    
      	(iii)  	
              there
                has not been any material increase in the compensation payable or
                to
                become payable by WPCS to any of WPCS’ officers, employees or agents or
                any bonus, payment or arrangement made to or with any of
                them,

            

    

    

    
      	(iv)  	
              the
                WPCS Business has been and continues to be carried on in the ordinary
                course,

            

    

     

     

    
 

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

     

    
      	(v)  	
              WPCS
                has not waived or surrendered any right of material
                value,

            

    

    

    
      	(vi)  	
              Neither
                WPCS nor its subsidiaries have discharged or satisfied or paid any
                lien or
                encumbrance or obligation or liability other than current liabilities
                in
                the ordinary course of business,
                and

            

    

     

    
      
        	(vii)  	
                
                  no
                    capital expenditures in excess of $10,000 individually or $30,000
                    in total
                    have been authorized or
                    made.

                

              

      

    WPCS
      - Income Tax Matters

    

    
      	(x)  	
              Tax
                Returns.
                All tax returns and reports of WPCS and its subsidiaries required
                by law
                to be filed have been filed and are true, complete and correct, and
                any
                taxes payable in accordance with any return filed by WPCS and its
                subsidiaries or in accordance with any notice of assessment or
                reassessment issued by any taxing authority have been so
                paid;

            

    

    

    
      	(y)  	
              Current
                Taxes.
                Adequate provisions have been made for taxes payable for the current
                period for which tax returns are not yet required to be filed and
                there
                are no agreements, waivers, or other arrangements providing for an
                extension of time with respect to the filing of any tax return by,
                or
                payment of, any tax, governmental charge or deficiency by WPCS or
                its
                subsidiaries. WPCS is not aware of any contingent tax liabilities
                or any
                grounds which would prompt a reassessment including aggressive treatment
                of income and expenses in filing earlier tax
                returns;

            

    

    

    WPCS
      - Applicable Laws and Legal Matters

    

    
      	(z)  	
              Licenses.
                WPCS and its subsidiaries hold all licenses and permits as may be
                requisite for carrying on the WPCS Business in the manner in which
                it has
                heretofore been carried on, which licenses and permits have been
                maintained and continue to be in good standing except where the failure
                to
                obtain or maintain such licenses or permits would not have a material
                adverse effect on the WPCS
                Business;

            

    

    

    
      	(aa)  	
              Applicable
                Laws.
                Neither WPCS nor its subsidiaries have been charged with or received
                notice of breach of any laws, ordinances, statutes, regulations,
                by-laws,
                orders or decrees to which they are subject or which apply to them
                the
                violation of which would have a material adverse effect on the WPCS
                Business, and to WPCS’ knowledge, neither WPCS nor its subsidiaries are in
                breach of any laws, ordinances, statutes, regulations, bylaws, orders
                or
                decrees the contravention of which would result in a material adverse
                impact on the WPCS Business;

            

    

    

    
      	(bb)  	
              Pending
                or Threatened Litigation.
                There is no material litigation or administrative or governmental
                proceeding pending or threatened against or relating to WPCS, its
                subsidiaries, or the WPCS Business nor does WPCS have any knowledge
                of any
                deliberate act or omission of WPCS or its subsidiaries that would
                form any
                material basis for any such action or
                proceeding;

            

    

     

     

    
 

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

     

    
      	(cc)  	
              No
                Bankruptcy.
                Neither WPCS nor its subsidiaries have made any voluntary assignment
                or
                proposal under applicable laws relating to insolvency and bankruptcy
                and
                no bankruptcy petition has been filed or presented against WPCS or
                its
                subsidiaries and no order has been made or a resolution passed for
                the
                winding-up, dissolution or liquidation of WPCS or its subsidiaries;
                

            

    

    

    
      	(dd)  	
              Labor
                Matters.
                Neither WPCS nor its subsidiaries are party to any collective agreement
                relating to the WPCS Business with any labor union or other association
                of
                employees and no part of the WPCS Business has been certified as
                a unit
                appropriate for collective bargaining or, to the knowledge of WPCS,
                has
                made any attempt in that regard;

            

    

    

    
      	(ee)  	
              Finder's
                Fees.
                Neither WPCS nor its subsidiaries are party to any agreement which
                provides for the payment of finder's fees, brokerage fees, commissions
                or
                other fees or amounts which are or may become payable to any third
                party
                in connection with the execution and delivery of this Agreement and
                the
                transactions contemplated herein;

            

    

    

    Execution
      and Performance of Agreement

    

    

    
      	(ff)  	
              No
                Violation or Breach.
                The execution and performance of this Agreement will
                not:

            

    

    

    
      	(i)  	
              violate
                the charter documents of WPCS or the Acquirer or result in any breach
                of,
                or default under, any loan agreement, mortgage, deed of trust, or
                any
                other agreement to which WPCS or its subsidiaries are
                party,

            

    

    

    
      	(ii)  	
              give
                any person any right to terminate or cancel any agreement or any
                right or
                rights enjoyed by WPCS or its
                subsidiaries,

            

    

    

    
      	(iii)  	
              result
                in any alteration of WPCS’ or its subsidiaries’ obligations under any
                agreement to which WPCS or its subsidiaries are
                party,

            

    

    

    
      	(iv)  	
              result
                in the creation or imposition of any lien, encumbrance or restriction
                of
                any nature whatsoever in favor of a third party upon or against the
                assets
                of WPCS,

            

    

    

    
      	(v)  	
              result
                in the imposition of any tax liability to WPCS or its subsidiaries
                relating to the assets of WPCS, or

            

    

    

    
      	(vi)  	
              violate
                any court order or decree to which either WPCS or its subsidiaries
                are
                subject;

            

    

     

     

    
 

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    The
      WPCS Business

    

    
      	(gg)  	
              Maintenance
                of Business.
                Since the date of the WPCS Financial Statements, WPCS and its subsidiaries
                have not entered into any material agreement or commitment except
                in the
                ordinary course and except as disclosed herein or in the WPCS SEC
                Reports;

            

    

    

    
      	(hh)  	
              Subsidiaries.
                Except for the Acquirer, WPCS does not own any subsidiaries and does
                not
                otherwise own, directly or indirectly, any shares or interest in
                any other
                corporation, partnership, joint venture or firm other than WPCS
                Incorporated, a Delaware corporation and Invisinet, Inc., a Delaware
                corporation;

            

    

    

    WPCS
      - Acquisition Shares

    

    
      	(ii)  	
              Acquisition
                Shares.
                The Acquisition Shares when delivered to the holders of Walker Shares
                or
                as directed thereby pursuant to the Merger shall be validly issued
                and
                outstanding as fully paid and non-assessable shares and the Acquisition
                Shares shall be transferable upon the books of WPCS, in all cases
                subject
                to the provisions and restrictions of all applicable securities laws;
                and

            

    

    

    
      	(jj)  	
              Securities
                Law Compliance.
                Except as set forth in the SEC Reports, WPCS has not issued any shares
                of
                its common stock (or securities convertible into or exercisable for
                shares
                of common stock) since June 1, 2002. Neither WPCS nor any person
                acting on
                its behalf has taken or will take any action (including, without
                limitation, any offering of any securities of WPCS under circumstances
                which would require the integration of such offering with the offering
                of
                the Acquisition Shares issued to the Walker Shareholders) which subject
                the issuance or sale of such shares to the Walker Shareholders to
                the
                registration requirements of Section 5 of the Securities
                Act.

            

    

    

    

    Non-Merger
      and Survival

    

    3.2 The
      representations and warranties of WPCS contained herein will be true at and
      as
      of Closing in all material respects as though such representations and
      warranties were made as of such time. Notwithstanding the completion of the
      transactions contemplated hereby, the waiver of any condition contained herein
      (unless such waiver expressly releases a party from any such representation
      or
      warranty) or any investigation made by the Walker Shareholders, the
      representations and warranties of WPCS shall survive the Closing for a period
      of
      two (2) years. 

    

    Indemnity
      

    

    3.3 WPCS
      agrees to indemnify and save harmless Walker and the Walker Shareholders from
      and against any and all claims, demands, actions, suits, proceedings,
      assessments, judgments, damages, costs, losses and expenses, including any
      payment made in good faith in settlement of any claim (subject to the right
      of
      WPCS to defend any such claim), resulting from the breach by it of any
      representation, warranty or covenant made under this Agreement or from any
      misrepresentation in or omission from any certificate or other instrument
      furnished or to be furnished by WPCS to Walker or the Walker Shareholders
      hereunder provided that (i) each individual claim or series of related claims
      exceeds $10,000 and (ii) the amount of all such claims shall not exceed the
      greater of (A) $250,000 or (B) the gross amount realized by the Walker
      Shareholders from the sale of the Acquisition Shares during the two (2) year
      period following the Closing Date. In addition, WPCS agrees to indemnify the
      Walker Shareholders from and against any and all claims, demands, actions,
      suits, proceedings, assessments, judgments, damages, costs, losses and expenses
      arising from the business operations of the Surviving Company after the Closing
      of the Merger or on account of personal guarantees or personal indemnity
      agreements entered into by the Walker Shareholders in connection with the
      obligations of Walker.

     

    
 

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      4

    COVENANTS
      OF WPCS

    

    Covenants

    

    4.1 WPCS
      covenants and agrees with Walker and the Walker Shareholders that it
      will:

    

    
      	(a)  	
              Conduct
                of Business.
                Until the Closing, conduct its business diligently and in the ordinary
                course consistent with the manner in which it generally has been
                operated
                up to the date of execution of this Agreement;

            

    

    

    
      	(b)  	
              Access.
                Until the Closing, give the Walker Shareholders and their representatives
                full access to all of the properties, books, contracts, commitments
                and
                records of WPCS, and furnish to the Walker Shareholders and their
                representatives all such information as they may reasonably
                request;

            

    

    

    
      	(c)  	
              Procure
                Consents.
                Take all reasonable steps required to obtain, prior to Closing, any
                and
                all third party consents required to permit the
                Merger;

            

    

    

    
      	(d)  	
              Public
                Information.
                Until such time that the Walker Shareholders have sold all of the
                Acquisition Shares, make and keep public information available, as
                those
                terms are understood and defined in Rule 144;
                and

            

    

     

    
      	(e) 
              	SEC Filings.
              Until such time that the Walker Shareholders have sold all of the
              Acquisition Shares, file with the Commission in a timely manner, all
              reports and other documents required of WPCS under the Securities Act
              and
              the Exchange Act.

    

     

    
      	(f)
               	 Appointment of Officer and Director.
              On the Closing Date, WPCS and Walker will enter into the Employment
              Agreements with D. Walker and G. Walker. In addition, on the Closing
              Date
              WPCS will appoint D. Walker as Executive Vice President, Project Services
              Division and will appoint G. Walker as a member of the WPCS Board of
              Directors.

    

     

    
      	 (g)
               	Payment of Audit Fees.
              Within ten days after the Closing Date, WPCS will engage the services
              of
              an independent certified public accountant to audit the financial
              statements of Walker for the two fiscal years ended December 31, 2001,
              and
              to review the financial statements of Walker for the ten months ended
              October 31, 2002. WPCS shall be solely responsible for the payment
              of all
              fees related to the foregoing.

    

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      	(h)  	
              Delivery
                of Registration Rights Agreement.
                On the Closing Date, WPCS will deliver the executed Registration
                Rights
                Agreement to the Walker
                Shareholders.

            

    

    

    
      	(i)  	
              Employment
                Agreement.
                On the Closing Date, WPCS shall execute and shall cause the Surviving
                Company to execute and deliver the Employment Agreements to D. Walker
                and
                G. Walker.

            

    

    

    
      	(j)  	
              Intercompany
                Transactions.
                Until such time that the Walker Shareholders have received all of
                the Cash
                Consideration, WPCS shall not, without the prior written consent
                of D.
                Walker and G. Walker, cause the Surviving Company to (i) amend the
                Articles of Incorporation of the Surviving Company, or (ii) merge
                or
                consolidate with any other entity, dissolve, reorganize, or undergo
                any
                fundamental corporate change. 

            

    

    

    Authorization

    

    4.2   WPCS
      hereby agrees to authorize and direct any and all federal, state, municipal,
      foreign and international governments and regulatory authorities having
      jurisdiction respecting WPCS and its subsidiaries to release any and all
      information in their possession respecting WPCS and its subsidiaries to Walker.
      WPCS shall promptly execute and deliver to Walker any and all consents to the
      release of information and specific authorizations which Walker reasonably
      requires to gain access to any and all such information.

    

    Reports
      Under Exchange Act

    

    4.3   With
      a
      view to making available to the Walker Shareholders the benefits of
      Rule 144 promulgated under the Securities Act or any other similar rule or
      regulation of the Commission that may at any time permit the Walker Shareholders
      to sell securities of WPCS to the public without registration and without
      imposing restrictions arising under the federal securities laws on the purchases
      thereof (“Rule 144”), and provided that the one year holding period imposed
      by paragraph d of Rule 144 has been met, WPCS agrees to furnish to each Walker
      Shareholder, so long as such Walker Shareholder owns WPCS Common Shares,
      promptly upon request, (i) a written statement by WPCS that it has complied
      with the reporting requirements of Rule 144, the Securities Act and the
      Exchange Act, (ii) a copy of the most recent annual or quarterly report of
      WPCS and such other reports and documents so filed by WPCS, and (iii) such
      other information as may be reasonably requested to permit the Walker
      Shareholders to sell such securities pursuant to Rule 144 without
      registration.

    

    Survival

    

    4.4  The
      covenants set forth in this Article shall survive the Closing for the benefit
      of
      the Walker Shareholders.

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      5

    REPRESENTATIONS
      AND WARRANTIES OF

    WALKER
      

    

    Representations
      and Warranties

    

    5.1 Walker
      represents and warrants to WPCS, with the intent that it will rely thereon
      in
      entering into this Agreement and in approving and completing the transactions
      contemplated hereby, that, except as disclosed in the Walker Disclosure Letter:
      

    

    Walker
      - Corporate Status and Capacity

    .

    
      	(a)  	
              Incorporation.
                Walker is a corporation duly organized, validly existing and in good
                standing under the laws of the state of its incorporation, has the
                corporate power and authority to own, operate and lease its properties
                and
                to carry on its business as now conducted or as proposed to be conducted,
                and is qualified as a foreign corporation in each jurisdiction in
                which a
                failure to be so qualified could reasonably be expected to have a
                material
                adverse effect on its present or expected operations or financial
                condition.

            

    

    

    
      	(b)  	
              Power
                and Capacity.
                Walker has the right, power, legal capacity and authority to enter
                into
                and perform its obligations under this Agreement, and all agreements
                to
                which Walker is or will be a party that are required to be executed
                pursuant to this Agreement (the “Walker
                Ancillary Agreements”).
                The execution, delivery and performance of this Agreement and the
                Walker
                Ancillary Agreements has been duly and validly approved and authorized
                by
                the Board of Directors and stockholders of Walker, as required by
                applicable law and its articles of incorporation and
                bylaws.

            

    

    

    

    
      	(c)  	
              No
                Filings.
                No filing, authorization or approval, governmental or otherwise,
                is
                necessary to enable Walker to enter into, and to perform its obligations
                under, this Agreement and the Walker Ancillary Agreements, except
                for
                (a) the filing of the Agreement of Merger with the Delaware and
                California Secretaries of State, the recording of the Agreement of
                Merger
                in the office of the Recorder of the Delaware county in which WPCS’s
                registered office is located, and the filing of appropriate documents
                with
                the relevant authorities of other states in which Walker is qualified
                to
                do business, if any, (b) such filings as may be required to comply
                with federal and state securities laws, and (c) certain third-party
                consents, which have been disclosed in Walker’s Disclsoure
                Letter.

            

    

    

    
      	(d)  	
              Binding
                Obligation.
                This Agreement and the Walker Ancillary Agreements are, or when executed
                by Walker will be, valid and binding obligations of Walker enforceable
                in
                accordance with their respective terms, except as to the effect,
                if any,
                of (a) applicable bankruptcy and other similar laws affecting the
                rights
                of creditors generally, and (b) rules of law governing specific
                performance, injunctive relief and other equitable
                remedies.

            

    

     

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    
 

    Walker
      - Capitalization

    

    
      	(e)  	
              Authorized
                Capital.
                The authorized capital of Walker consists of 1,000 shares of common
                stock,
                no par value per share;

            

    

    

    
      	(f)  	
              Ownership
                of Walker Shares.
                The issued and outstanding share capital of Walker will on Closing
                consist
                of 100 shares of common stock (being the Walker Shares), which shares
                on
                Closing shall be validly issued and outstanding as fully paid and
                non-assessable shares. The Walker Shareholders will be at Closing
                the
                registered and beneficial owner of the Walker Shares. The Walker
                Shares
                owned by the Walker Shareholders will on Closing be free and clear
                of any
                and all liens, charges, pledges, encumbrances, restrictions on transfer
                and adverse claims whatsoever;

            

    

    

    
      	(g)  	
              No
                Option.
                No person, firm or corporation has any agreement, warrant or option
                or any
                right capable of becoming an agreement, warrant or option for the
                acquisition of any capital stock or equity interest in
                Acquirer;

            

    

    

    
      	(h)  	
              No
                Restrictions.
                There are no restrictions on the transfer, sale or other disposition
                of
                Walker Shares contained in the charter documents of Walker or under
                any
                agreement;

            

    

    

    Walker
      - Records and Financial Statements

    

    
      	(i)  	
              Charter
                Documents.
                The charter documents of Walker have not been altered since its
                incorporation date, except as filed in the record books of
                Walker;

            

    

    

    
      	(j)  	
              Corporate
                Minute Books. The
                corporate minute books of Walker are complete and each of the minutes
                contained therein accurately reflect the actions that were taken
                at a duly
                called and held meeting or by consent without a meeting. All actions
                by
                Walker which required director or shareholder approval are reflected
                on
                the corporate minute books of Walker. Walker is not in violation
                or breach
                of, or in default with respect to, any term of its ^Articles of
                Incorporation (or other charter documents) or by-laws, except where
                such
                breach or default would not have a material adverse effect upon
                Walker;

            

    

    

    
      	(k)  	
              Walker
                Financial Statements.
                The Walker Financial Statements present fairly, in all material respects,
                the assets and liabilities (whether accrued, absolute, contingent
                or
                otherwise) of Walker as of the respective dates thereof, and the
                results
                of operations and statement of cash flows of Walker during the periods
                covered thereby, in all material respects, and were prepared on an
                accrual
                basis in accordance with generally accepted accounting principles
                consistently applied throughout the periods indicated, except for
                the
                treatment of the Walker Unlisted
                Inventory;

            

    

    

    
      	(l)  	
              Walker
                Accounts Payable and Liabilities.
                There are no material liabilities, contingent or otherwise, of Walker
                which are not disclosed in Schedule “A” hereto or reflected in the Walker
                Financial Statements except those incurred in the ordinary course
                of
                business since the date of the said schedule and the Walker Financial
                Statements, and Walker has not guaranteed or agreed to guarantee
                any debt,
                liability or other obligation of any person, firm or corporation.
                Without
                limiting the generality of the foregoing, all accounts payable and
                liabilities of Walker as of October 31, 2002 are described in Schedule
“A”
                hereto;

            

    

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    
 

    
      	(m)  	
              Walker
                Accounts Receivable.
                All Walker Accounts Receivable result from bona fide business transactions
                and services actually rendered without, to the knowledge and belief
                of
                Walker, any claim by the obligor for set-off or
                counterclaim;

            

    

    

    
      	(n)  	
              Walker
                Bank Accounts.
                All of the Walker Bank Accounts, their location, numbers and the
                authorized signatories thereto are as set forth in Schedule “C”
                hereto;

            

    

    

    
      	(o)  	
              No
                Debt to Related Parties.
                Walker is not, and on Closing will not be, materially indebted to
                the
                Walker Shareholders nor to any family member thereof, nor to any
                affiliate, director or officer of Walker or the Walker Shareholders
                except
                accounts payable on account of bona fide business transactions of
                Walker
                incurred in normal course of Walker Business, including employment
                agreements with the Walker Shareholders and attached to Schedule
“D”
                hereto is an accounts payable aging
                ledger;

            

    

    

    
      	(p)  	
              No
                Related Party Debt to Walker.
                Neither the Walker Shareholders nor any director, officer or affiliate
                of
                Walker are now indebted to or under any financial obligation to Walker
                on
                any account whatsoever, except for advances on account of travel
                and other
                expenses not exceeding $5,000 in
                total;

            

    

    

    
      	(q)  	
              No
                Dividends.
                No dividends or other distributions on any shares in the capital
                of Walker
                have been made, declared or authorized since the date of the Walker
                Financial Statements;

            

    

    

    
      	(r)  	
              No
                Payments.
                No payments of any kind have been made or authorized since the date
                of the
                Walker Financial Statements to or on behalf of the Walker Shareholders
                or
                to or on behalf of officers, directors, shareholders or employees
                of
                Walker, except payments made in the ordinary course of business and
                at the
                regular rates of salary or other remuneration payable to
                them;

            

    

    

    
      	(s)  	
              No
                Pension Plans.
                There are no pension, profit sharing, group insurance or similar
                plans or
                other deferred compensation plans affecting
                Walker;

            

    

    

    
      	(t)  	
              No
                Adverse Events.
                Since the date of the Walker Financial Statements, except as described
                in
                the Walker Disclosure Letter:

            

    

    

    
      	(i)  	
              there
                has not been any material adverse change in the properties, results
                of
                operations, financial position or condition of Walker, its liabilities
                or
                the Walker Assets or any damage, loss or other change in circumstances
                materially affecting Walker, the Walker Business or the Walker Assets
                or
                Walker’s right to carry on the Walker Business, other than changes in the
                ordinary course of business, 

            

    

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    
 

    
      	(ii)  	
              there
                has not been any damage, destruction, loss or other event (whether
                or not
                covered by insurance) materially and adversely affecting Walker,
                the
                Walker Business or the Walker
                Assets,

            

    

    

    
      	(iii)  	
              there
                has not been any material increase in the compensation payable or
                to
                become payable by Walker to the Walker Shareholders or to any of
                Walker's
                officers, employees or agents or any bonus, payment or arrangement
                made to
                or with any of them,

            

    

    

    
      	(iv)  	
              the
                Walker Business has been and continues to be carried on in the ordinary
                course,

            

    

    

    
      	(v)  	
              Walker
                has not waived or surrendered any right of material
                value,

            

    

    

    
      	(vi)  	
              Walker
                has not discharged or satisfied or paid any lien or encumbrance or
                obligation or liability other than current liabilities in the ordinary
                course of business, and 

            

    

     

    
      	(vii)  	
              
                no
                  capital expenditures in excess of $10,000 individually or $30,000
                  in total
                  have been authorized or made;

              

            

    

    
 

    Walker
      - Income Tax Matters

    

    
      	(u)  	
              Tax
                Returns.
                All tax returns and reports of Walker required by law to be filed
                have
                been filed based on a cash
                basis, and are true, complete and correct, and any taxes payable
                in
                accordance with any return filed by Walker or in accordance with
                any
                notice of assessment or reassessment issued by any taxing authority
                have
                been so paid;

            

    

    

    
      	(v)  	
              Current
                Taxes.
                Adequate provisions have been made for taxes payable for the current
                period for which tax returns are not yet required to be filed and
                there
                are no agreements, waivers, or other arrangements providing for an
                extension of time with respect to the filing of any tax return by,
                or
                payment of, any tax, governmental charge or deficiency by Walker.
                Walker
                is not aware of any contingent tax liabilities or any grounds which
                would
                prompt a reassessment;

            

    

    

    Walker
      - Applicable Laws and Legal Matters

    

    
      	(w)  	
              Licenses.
                Walker holds all licenses and permits as may be requisite for carrying
                on
                the Walker Business in the manner in which it has heretofore been
                carried
                on, which licenses and permits have been maintained and continue
                to be in
                good standing except where the failure to obtain or maintain such
                licenses
                or permits would not have a material adverse effect on the Walker
                Business;

            

    

    

    
      	(x)  	
              Applicable
                Laws.
                Walker has not been charged with or received notice of breach of
                any laws,
                ordinances, statutes, regulations, by-laws, orders or decrees to
                which it
                is subject or which applies to it the violation of which would have
                a
                material adverse effect on the Walker Business, and, to Walker’s
                knowledge, Walker is not in breach of any laws, ordinances, statutes,
                regulations, by-laws, orders or decrees the contravention of which
                would
                result in a material adverse impact on the Walker Business;
                

            

    

     

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    
 

    
      	(y)  	
              Pending
                or Threatened Litigation.
                There is no material litigation or administrative or governmental
                proceeding pending or threatened against or relating to Walker, the
                Walker
                Business, or any of the Walker Assets, nor does Walker have any knowledge
                of any deliberate act or omission of Walker that would form any material
                basis for any such action or
                proceeding;

            

    

    

    
      	(z)  	
              No
                Bankruptcy.
                Walker has not made any voluntary assignment or proposal under applicable
                laws relating to insolvency and bankruptcy and no bankruptcy petition
                has
                been filed or presented against Walker and no order has been made
                or a
                resolution passed for the winding-up, dissolution or liquidation
                of
                Walker;

            

    

    

    
      	(aa)  	
              Labor
                Matters.
                Walker is not a party to any collective agreement relating to the
                Walker
                Business with any labor union or other association of employees and
                no
                part of the Walker Business has been certified as a unit appropriate
                for
                collective bargaining or, to the knowledge of Walker, has made any
                attempt
                in that regard and Walker has no reason to believe that any current
                employees will leave Walker's employ as a result of this
                Merger;

            

    

    

    
      	(bb)  	
              Finder's
                Fees.
                Walker is not a party to any agreement which provides for the payment
                of
                finder's fees, brokerage fees, commissions or other fees or amounts
                which
                are or may become payable to any third party in connection with the
                execution and delivery of this Agreement and the transactions contemplated
                herein, except for certain amounts owed to Crader & Associates, Inc.,
                of which (i) WPCS shall issue 74,560 WPCS Common Shares to Crader
&
                Associates, Inc. at the Closing, (ii) WPCS shall issue 24,860 shares
                to
                Ray Helterline at the Closing, and (iii) the remainder shall be paid
                by
                the Walker Shareholders;

            

    

    

    Execution
      and Performance of Agreement

    

    

    
      	(cc)  	
              No
                Violation or Breach.
                The execution and performance of this Agreement will
                not

            

    

    

    
      	(i)  	
              violate
                the charter documents of Walker or result in any breach of, or default
                under, any loan agreement, mortgage, deed of trust, or any other
                agreement
                to which Walker is a party,

            

    

    

    
      	(ii)  	
              give
                any person any right to terminate or cancel any agreement including,
                without limitation, Walker Material Contracts, or any right or rights
                enjoyed by Walker,

            

    

     

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    
 

    
      	(iii)  	
              result
                in any alteration of Walker's obligations under any agreement to
                which
                Walker is a party including, without limitation, the Walker Material
                Contracts,

            

    

    

    
      	(iv)  	
              result
                in the creation or imposition of any lien, encumbrance or restriction
                of
                any nature whatsoever in favor of a third party upon or against the
                Walker
                Assets,

            

    

    

    
      	(v)  	
              result
                in the imposition of any tax liability to Walker relating to Walker
                Assets
                or the Walker Shares, or

            

    

    

    
      	(vi)  	
              violate
                any court order or decree to which either Walker is subject;
                

            

    

    

    Walker
      Assets - Ownership and Condition

    

    
      	(dd)  	
              Business
                Assets.
                The Walker Assets comprise all of the property and assets of the
                Walker
                Business, and neither the Walker Shareholders nor any other person,
                firm
                or corporation owns any assets used by Walker in operating the Walker
                Business, whether under a lease, rental agreement or other
                arrangement;

            

    

    

    
      	(ee)  	
              Title.
                Walker is the legal and beneficial owner of the Walker Assets, free
                and
                clear of all mortgages, liens, charges, pledges, security interests,
                encumbrances or other claims
                whatsoever;

            

    

    

    
      	(ff)  	
              No
                Option.
                No person, firm or corporation has any agreement or option or a right
                capable of becoming an agreement for the purchase of any of the Walker
                Assets;

            

    

    

    
      	(gg)  	
              Walker
                Insurance Policies.
                Walker maintains the public liability insurance and insurance against
                loss
                or damage to the Walker Assets and the Walker Business as described
                in
                Schedule “G” hereto;

            

    

    

    
      	(hh)  	
              Walker
                Material Contracts.
                The Walker Material Contracts listed in Schedule “H” constitute all of the
                material contracts of Walker;

            

    

    

    
      	(ii)  	
              No
                Default.
                There has not been any default in any material obligation of Walker
                or to
                the knowledge of Walker any other party to be performed under any
                of
                Walker Material Contracts, each of which to the knowledge of Walker
                is in
                good standing and in full force and effect and unamended, and Walker
                is
                not aware of any default in the obligations of any other party to
                any of
                the Walker Material Contracts;

            

    

    

    
      	(jj)  	
              No
                Compensation on Termination.
                There are no agreements, commitments or understandings relating to
                severance pay or separation allowances on termination of employment
                of any
                employee of Walker. Walker is not obliged to pay benefits or share
                profits
                with any employee after termination of employment except as required
                by
                law;

            

    

    

    Walker
      Assets - Walker Equipment

    

    
      	(kk)  	
              Walker
                Equipment.
                The Walker Equipment has been maintained in a manner consistent with
                that
                of a reasonably prudent owner and to the knowledge of Walker such
                equipment is in good working
                condition;

            

    

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    
 

    Walker
      Assets - Walker Goodwill and Other Assets

    

    
      	(ll)  	
              Walker
                Goodwill.
                Walker carries on the Walker Business only under the name "Walker
                Comm,
                Inc." and variations thereof and under no other business or trade
                names.
                Walker does not have any knowledge of any infringement by Walker
                of any
                patent, trademark, copyright or trade
                secret;

            

    

    

    The
      Business of Walker

    

    
      	(mm)  	
              Maintenance
                of Business.
                Since the date of the Walker Financial Statements, the Walker Business
                has
                been carried on in the ordinary course and Walker has not entered
                into any
                material agreement or commitment except in the ordinary course;
                and

            

    

    

    
      	(nn)  	
              Subsidiaries.
                Walker does not own any subsidiaries and does not otherwise own,
                directly
                or indirectly, any shares or interest in any other corporation,
                partnership, joint venture or firm and Walker does not own any subsidiary
                and does not otherwise own, directly or indirectly, any shares or
                interest
                in any other corporation, partnership, joint venture or
                firm.

            

    

    

    Non-Merger
      and Survival

    

    5.2 The
      representations and warranties of Walker contained herein will be true at and
      as
      of Closing in all material respects as though such representations and
      warranties were made as of such time. Notwithstanding the completion of the
      transactions contemplated hereby, the waiver of any condition contained herein
      (unless such waiver expressly releases a party from any such representation
      or
      warranty) or any investigation made by WPCS, the representations and warranties
      of Walker shall survive the Closing for a period of two (2) years. 

    

    Indemnity

    

    5.3 D.
      Walker
      and G. Walker jointly and severally agree to indemnify and save harmless WPCS
      from and against any and all claims, demands, actions, suits, proceedings,
      assessments, judgments, damages, costs, losses and expenses, including any
      payment made in good faith in settlement of any claim (subject to the right
      of
      D. Walker and G. Walker to defend any such claim), resulting from the breach
      by
      Walker of any representation, warranty or covenant of Walker made under this
      Agreement or from any misrepresentation in or omission from any certificate
      or
      other instrument furnished or to be furnished by Walker or the Walker
      Shareholders to WPCS hereunder provided that (i) each individual claim or series
      of related claims exceeds $10,000 and (ii) the amount of all such claims shall
      not exceed the greater of (A) $250,000 or (B) the gross amount realized by
      the
      Walker Shareholders from the sale of the Acquisition Shares during the period
      of
      two (2) years following the Closing Date.

     

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

    

    ARTICLE
      6

    COVENANTS
      OF WALKER AND

    THE
      WALKER SHAREHOLDERS

     

    Covenants

    

    6.1 Walker
      and the Walker Shareholders covenant and agree with WPCS that they
      will:

    

    
      	(a)  	
              Conduct
                of Business.
                Until the Closing, conduct the Walker Business diligently and in
                the
                ordinary course consistent with the manner in which the Walker Business
                generally has been operated up to the date of execution of this Agreement;
                

            

    

    

    
      	(b)  	
              Preservation
                of Business.
                Until the Closing, use their best efforts to preserve the Walker
                Business
                and the Walker Assets and, without limitation, preserve for WPCS
                Walker’s
                relationships with their suppliers, customers and others having business
                relations with them;

            

    

    

    
      	(c)  	
              Access.
                Until the Closing, give WPCS and its representatives full access
                to all of
                the properties, books, contracts, commitments and records of Walker
                relating to Walker, the Walker Business and the Walker Assets, and
                furnish
                to WPCS and its representatives all such information as they may
                reasonably request;

            

    

    

    
      	(d)  	
              Procure
                Consents.
                Until the Closing, take all reasonable steps required to obtain,
                prior to
                Closing, any and all third party consents required to permit the
                Merger
                and to preserve and maintain the Walker Assets, including the Walker
                Material Contracts, notwithstanding the change in control of Walker
                arising from the Merger; and

            

    

    

    

    (f) Delivery
      of Registration Rights Agreement.
      On the
      Closing Date, the Walker Shareholders will deliver the executed Registration
      Rights Agreement to WPCS.

    

    
      	(e)  	
              Employment
                Agreement.
                On the Closing Date, D. Walker and G. Walker will deliver the executed
                Employment Agreements to WPCS.

            

    

    

    Authorization

    

    6.2 Walker
      hereby agrees to authorize and direct any and all federal, state, municipal,
      foreign and international governments and regulatory authorities having
      jurisdiction respecting Walker to release any and all information in their
      possession respecting Walker to WPCS. Walker shall promptly execute and deliver
      to WPCS any and all consents to the release of information and specific
      authorizations which WPCS reasonably require to gain access to any and all
      such
      information.

    

    Survival

    

    6.3 The
      covenants set forth in this Article shall survive the Closing for the benefit
      of
      WPCS. 

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    

    

    ARTICLE
      7

    CONDITIONS
      PRECEDENT

    

    Conditions
      Precedent in favor of WPCS

    

    7.1 WPCS’
      obligations to carry out the transactions contemplated hereby are subject to
      the
      fulfillment of each of the following conditions precedent on or before the
      Closing:

    

    
      	(a)  	
              all
                documents or copies of documents required to be executed and delivered
                to
                WPCS by Walker or the Walker Shareholders under Section 9.2 will
                have been
                so executed and delivered;

            

    

    

    
      	(b)  	
              all
                of the terms, covenants and conditions of this Agreement to be complied
                with or performed by Walker or the Walker Shareholders at or prior
                to the
                Closing will have been complied with or
                performed;

            

    

    

    
      	(c)  	
              WPCS
                shall have completed its review and inspection of the books and records
                of
                Walker and shall be satisfied with same in all material
                respects;

            

    

    

    
      	(d)  	
              title
                to the Walker Shares held by the Walker Shareholders and to the Walker
                Assets will be free and clear of all mortgages, liens, charges, pledges,
                security interests, encumbrances or other claims
                whatsoever;

            

    

    

    
      	(e)  	
              the
                Certificates of Merger shall be executed by Walker in form acceptable
                for
                filing with the Delaware and California Secretaries of
                State;

            

    

    

    
      	(f)  	
              subject
                to Article 8 hereof, there will not have
                occurred

            

    

    

    
      	(i)  	
              any
                material adverse change in the financial position or condition of
                Walker,
                its liabilities or the Walker Assets or any damage, loss or other
                change
                in circumstances materially and adversely affecting the Walker Business
                or
                the Walker Assets or Walker's right to carry on the Walker Business,
                other
                than (i) changes described in the Schedule “A” hereto and (ii) changes in
                the ordinary course of business, none of which has been materially
                adverse, or

            

    

    

    
      	(ii)  	
              any
                damage, destruction, loss or other event, including changes to any
                laws or
                statutes applicable to Walker or the Walker Business (whether or
                not
                covered by insurance) materially and adversely affecting Walker,
                the
                Walker Business or the Walker Assets;
                and

            

    

    

    
      	(g)  	
              the
                transactions contemplated hereby shall have been approved by all
                other
                regulatory authorities having jurisdiction over the subject matter
                hereof,
                if any.

            

    

    

     

    Waiver
      by WPCS

    

    7.2 The
      conditions precedent set out in the preceding section are inserted for the
      exclusive benefit of WPCS and any such condition may be waived in whole or
      in
      part by WPCS at or prior to Closing by delivering to Walker and the Walker
      Shareholders a written waiver to that effect signed by WPCS. In the event that
      the conditions precedent set out in the preceding section are not satisfied
      on
      or before the Closing, WPCS shall be released from all obligations under this
      Agreement.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    

    Conditions
      Precedent in Favor of Walker and the Walker Shareholders

    

    7.3 The
      obligations of Walker and the Walker Shareholders to carry out the transactions
      contemplated hereby is subject to the fulfillment of each of the following
      conditions precedent on or before the Closing:

    

    
      	(a)  	
              all
                documents or copies of documents required to be executed and delivered
                to
                Walker or the Walker Shareholder by WPCS or Acquirer under Section
                9.3
                will have been so executed and
                delivered;

            

    

    

    
      	(b)  	
              all
                of the terms, covenants and conditions of this Agreement to be complied
                with or performed by WPCS at or prior to the Closing will have been
                complied with or performed;

            

    

    

    
      	(c)  	
              Walker
                shall have completed its review and inspection of the books and records
                of
                WPCS and its subsidiaries and shall be satisfied with same in all
                material
                respects;

            

    

    

    
      	(d)  	
              WPCS
                will have delivered the Acquisition Shares to be issued pursuant
                to the
                terms of the Merger to the Walker Shareholders at the Closing and
                the
                Acquisition Shares will be registered on the books of WPCS in the
                name of
                the Walker Shareholders at the Effective
                Time;

            

    

    

    
      	(e)  	
              WPCS
                shall have delivered 74,580 WPCS Shares to Crader & Associates, Inc.,
                and 24,860 WPCS Shares to Ray
                Helterline;

            

    

    

    
      	(f)  	
              title
                to the Acquisition Shares and the Crader Shares will be free and
                clear of
                all mortgages, liens, charges, pledges, security interests, encumbrances
                or other claims whatsoever;

            

    

    

    
      	(g)  	
              payment
                of the Cash Consideration required to be paid as of the Closing Date
                shall
                have been made;

            

    

    

    
      	(h)  	
              payment
                to the Walker Shareholders of the amount of working capital of Walker
                (as
                described in Section 9.2(e)) in excess of $1,200,000, if not previously
                withdrawn; 

            

    

    

    
      	(i)  	
              WPCS
                shall have executed agreements to assume (i) all leases for real
                and
                personal property used by the Walker Business, and (ii) all bonding
                company indemnification agreements that D. Walker and/or G. Walker
                have
                entered into on behalf of Walker, if
                any.

            

    

    

    
      	(j)  	
              the
                Certificate of Merger shall be executed by the Acquirer in form acceptable
                for filing with the Delaware and California Secretaries of State;
                

            

    

    

    
      	(k)  	
              subject
                to Article 8 hereof, there will not have
                occurred

            

    

    

    
      	(i)  	
              any
                material adverse change in the financial position or condition of
                WPCS,
                its subsidiaries, their assets of liabilities or any damage, loss
                or other
                change in circumstances materially and adversely affecting WPCS or
                the
                WPCS Business or WPCS’ right to carry on the WPCS Business, other than
                changes in the ordinary course of business, none of which has been
                materially adverse, or

            

    

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    
 

    
      	(ii)  	
              any
                damage, destruction, loss or other event, including changes to any
                laws or
                statutes applicable to WPCS or the WPCS Business (whether or not
                covered
                by insurance) materially and adversely affecting WPCS, its subsidiaries
                or
                its assets; and

            

    

    

    
      	(h)  	
              the
                transactions contemplated hereby shall have been approved by all
                other
                regulatory authorities having jurisdiction over the subject matter
                hereof,
                if any. 

            

    

     

    Waiver
      by Walker and the Walker Shareholders

    

    7.4 The
      conditions precedent set out in the preceding section are inserted for the
      exclusive benefit of Walker and the Walker Shareholders and any such condition
      may be waived in whole or in part by Walker or the Walker Shareholders at or
      prior to the Closing by delivering to WPCS a written waiver to that effect
      signed by Walker and the Walker Shareholders. In the event that the conditions
      precedent set out in the preceding section are not satisfied on or before the
      Closing Walker and the Walker Shareholders shall be released from all
      obligations under this Agreement.

    

    Termination

    

    7.6 Notwithstanding
      any provision herein to the contrary, if the Closing does not occur on or before
      January 31, 2003, this Agreement will be at an end and will have no further
      force or effect, unless otherwise agreed upon by the parties in
      writing.

    

    Confidentiality

    

    7.7 Notwithstanding
      any provision herein to the contrary, the parties hereto agree that the
      existence and terms of this Agreement are confidential and that if this
      Agreement is terminated pursuant to the preceding section the parties agree
      to
      return to one another any and all financial, technical and business documents
      delivered to the other party or parties in connection with the negotiation
      and
      execution of this Agreement and shall keep the terms of this Agreement and
      all
      information and documents received from Walker and WPCS and the contents thereof
      confidential and not utilize nor reveal or release same, provided, however,
      that
      WPCS may be required to issue news releases regarding the execution and
      consummation of this Agreement and file a Current Report on Form 8-K with the
      Securities and Exchange Commission respecting the proposed Merger contemplated
      hereby together with such other documents as are required to maintain the
      currency of WPCS’ filings with the Securities and Exchange
      Commission.

    

    No-Shop
      Provision

    

    7.8 From
      the
      date hereof until the close of business on January 31, 2003, the parties hereto
      agree that they shall not, nor will they cause their directors, officers,
      employees, agents and representatives to, directly or indirectly, solicit or
      entertain offers from, hold meetings or discussions with, or in any manner
      encourage, accept or consider any proposal of, any other person relating to
      the
      acquisition of Walker, shares of Walker’s capital stock, securities convertible
      into or exchangeable for shares of Walker’s capital stock, or Walker’s assets or
      business, in whole or in part, whether directly or indirectly, through purchase,
      merger, consolidation, original issuance, or otherwise. Walker and the Walker
      Shareholders will immediately notify WPCS in writing regarding any such contact
      from the date hereof until the close of business on January 31,
      2003.

     

     

    
 

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      8

    RISK

    

    Material
      Change in the Business of Walker

    

    8.1 If
      any
      material loss or damage to the Walker Business occurs prior to Closing and
      such
      loss or damage, in WPCS' reasonable opinion, cannot be substantially repaired
      or
      replaced within sixty (60) days, WPCS shall, within two (2) days following
      any
      such loss or damage, by notice in writing to Walker, at its option,
      either:

    

    
      	(a)  	
              terminate
                this Agreement, in which case no party will be under any further
                obligation to any other party; or

            

    

    

    
      	(b)  	
              elect
                to complete the Merger and the other transactions contemplated hereby,
                in
                which case the proceeds and the rights to receive the proceeds of
                all
                insurance covering such loss or damage will, as a condition precedent
                to
                WPCS' obligations to carry out the transactions contemplated hereby,
                be
                vested in Walker or otherwise adequately secured to the satisfaction
                of
                WPCS on or before the Closing Date.

            

    

    

    Material
      Change in the WPCS Business

    

    8.2 If
      any
      material loss or damage to the WPCS Business occurs prior to Closing and such
      loss or damage, in Walker's reasonable opinion, cannot be substantially repaired
      or replaced within sixty (60) days, Walker shall, within two (2) days following
      any such loss or damage, by notice in writing to WPCS, at its option,
      either:

    

    
      	(a)  	
              terminate
                this Agreement, in which case no party will be under any further
                obligation to any other party; or

            

    

    

    
      	(b)  	
              elect
                to complete the Merger and the other transactions contemplated hereby,
                in
                which case the proceeds and the rights to receive the proceeds of
                all
                insurance covering such loss or damage will, as a condition precedent
                to
                Walker's obligations to carry out the transactions contemplated hereby,
                be
                vested in WPCS or otherwise adequately secured to the satisfaction
                of
                Walker on or before the Closing
                Date.

            

    

    

    

    ARTICLE
      9

    CLOSING

    

    Closing

    

    9.1 The
      Merger and the other transactions contemplated by this Agreement will be closed
      at the Place of Closing in accordance with the closing procedure set out in
      this
      Article.

     

    
 

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    Documents
      to be Delivered by Walker

    

    9.2 On
      or
      before the Closing, Walker and the Walker Shareholders will deliver or cause
      to
      be delivered to WPCS:

    

    
      	(a)  	
              the
                original or certified copies of the charter documents of Walker and
                all
                corporate records documents and instruments of Walker, the corporate
                seal
                of Walker and all books and accounts of
                Walker;

            

    

    

    
      	(b)  	
              all
                reasonable consents or approvals required to be obtained by Walker
                for the
                purposes of completing the Merger and preserving and maintaining
                the
                interests of Walker under any and all Walker Material Contracts and
                in
                relation to Walker Assets;

            

    

    

    
      	(c)  	
              certified
                copies of such resolutions of the shareholders and directors of Walker
                as
                are required to be passed to authorize the execution, delivery and
                implementation of this Agreement;

            

    

    

    
      	(d)  	
              an
                acknowledgement from Walker and the Walker Shareholders of the
                satisfaction of the conditions precedent set forth in section 7.3
                hereof;

            

    

    

    
      	(e)  	
              an
                Officer’s Certificate executed by a duly authorized officer of Walker
                stating that the working capital of Walker at the Closing Date (being
                cash, all accounts receivable net of bad debt reserve, employee
                receivables, workmen's compensation refunds receivable for the 2002
                fiscal
                year, costs in excess of billings, less accounts payable, accrued
                expenses
                (short term liabilities as listed on the Walker Financial Statement
                as of
                Oct. 31, 2002), other than Section 125 Plan liabilities, dental trust
                fund
                payable, notes payable - autos (ST), state income tax liability calculated
                on a cash-basis taxable income, and billings in excess of costs )
                is not
                less that $1,200,000, provided, however, that the Walker Shareholders
                shall be entitled to withdraw any working capital of Walker in excess
                of
                $1,200,000;

            

    

    

    
      	(f)  	
              the
                Employment Agreements, duly executed by Walker, D. Walker and G.
                Walker;

            

    

    

    
      	(g)  	
              the
                Certificates of Merger, duly executed by Walker;
                

            

    

    

    
      	(h)  	
              the
                Registration Rights Agreement, duly executed by the Walker Shareholders;
                and

            

    

    

    
      	(i)  	
              such
                other documents as WPCS may reasonably require to give effect to
                the terms
                and intention of this Agreement.

            

    

    

    Documents
      to be Delivered by WPCS

    

    9.3 On
      or
      before the Closing, WPCS shall deliver or cause to be delivered to Walker and
      the Walker Shareholders:

    

    
      	(a)  	
              share
                certificates representing the Acquisition Shares duly registered
                in the
                names of the Walker Shareholders;

            

    

    

    
      	(b)  	
              the
                Cash Consideration due to be paid on the Closing
                Date;

            

    

     

     

    
 

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

     

    
      	(c)  	
              certified
                copies of such resolutions of the directors of WPCS as are required
                to be
                passed to authorize the execution, delivery and implementation of
                this
                Agreement;

            

    

    

    
      	(d)  	
              a
                certified copy of a resolution of the directors of WPCS dated as
                of the
                Closing Date appointing G. Walker as a director of
                WPCS;

            

    

    

    
      	(e)  	
              a
                certified copy of a resolution of the directors of Walker dated as
                of the
                Closing Date, approving the Employment
                Agreements;

            

    

    

    
      	(f)  	
              an
                acknowledgement from WPCS of the satisfaction of the conditions precedent
                set forth in section 7.1 hereof;

            

    

    

    
      	(g)  	
              the
                Employment Agreements, duly executed by WPCS:

            

    

    

    
      	(h)  	
              the
                Registration Rights Agreement, duly executed by WPCS;
                

            

    

    

    
      	(i)  	
              the
                Certificates of Merger, duly executed by the
                Acquirer;

            

    

    

    
      	(j)  	
              the
                Indemnification Agreements between WPCS and D. Walker and G. Walker,
                in
                substantially the form attached hereto as Exhibit
                D;

            

    

    

    
      	(k)  	
              the
                Assumption Agreement, duly executed by
                WPCS;

            

    

    

    
      	(l)  	
              the
                Security Agreement between WPCS, Walker and the Walker Shareholders
                in
                substantially the form attached hereto as Schedule M;
                and

            

    

    

    
      	(m)  	
              such
                other documents as Walker may reasonably require to give effect to
                the
                terms and intention of this
                Agreement.

            

    

    

    

    ARTICLE
      10

    POST-CLOSING
      MATTERS

    

    Forthwith
      after the Closing, WPCS, Walker and the Walker Shareholders agree to use all
      their best efforts to:

    

    
      	(a)  	
              file
                the Certificates of Merger with Secretaries of State of Delaware
                and
                California;

            

    

    

    
      	(b)  	
              cause
                the directors of Walker to be D. Walker, G. Walker, Andrew Hidalgo,
                E.J.
                von Schaumburg and Andrew Shoffner;

            

    

    

    
      	(c)  	
              issue
                a news release reporting the
                Closing;

            

    

    

    
      	(d)  	
              file
                a Form 8-K with the Securities and Exchange Commission disclosing
                the
                terms of this Agreement and, not more than 60 days following the
                filing of
                such Form 8-K, to file and amended Form 8-K which includes audited
                financial statements of Walker as well as pro forma financial information
                of Walker and WPCS as required by Regulation SB as promulgated by
                the
                Securities and Exchange Commission;
                and

            

    

    

    
      	(e)  	
              file
                reports on Form 3 (and Form 13D, where applicable) with the Securities
                and
                Exchange Commission disclosing the acquisition of the Acquisition
                Shares
                by the Walker Shareholders.

            

    

     

     

    
 

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      11

    GENERAL
      PROVISIONS

    

    Arbitration

    

    11.1 The
      parties hereto shall attempt to resolve any dispute, controversy, difference
      or
      claim arising out of or relating to this Agreement by negotiation in good faith.
      If such good negotiation fails to resolve such dispute, controversy, difference
      or claim within thirty (30) days after any party delivers to any other party
      a
      notice of its intent to submit such matter to arbitration, then any party to
      such dispute, controversy, difference or claim may submit such matter to
      arbitration.

    

    Any
      action or proceeding seeking to enforce any provision of, or based upon any
      right arising out of, this Agreement shall be settled by binding arbitration
      by
      a panel of three (3) arbitrators in accordance with the Commercial
      Arbitration Rules of the American Arbitration Association and governed by the
      laws of the State of Delaware (without regard to the choice-of-law rules or
      principles of that jurisdiction). Judgment upon the award may be entered in
      any
      court located in the State of Delaware, and all the parties hereto hereby
      consent to submit to the jurisdiction of such courts and expressly waive any
      objections or defense based upon lack of personal jurisdiction or
      venue.

    

    Each
      of
      the plaintiff and defendant party to the arbitration shall select one
      (1) arbitrator (or where multiple plaintiffs and/or defendants exist, one
      (1) arbitrator shall be chosen collectively by such parties comprising the
      plaintiffs and one (1) arbitrator shall be chosen collectively by those
      parties comprising the defendants) and then the two (2) arbitrators shall
      mutually agree upon the third arbitrator. Where no agreement can be reached
      on
      the selection of either a third arbitrator or an arbitrator to be named by
      either a group of plaintiffs or a group of defendants, any implicated party
      may
      apply to a judge of the courts of the State of Delaware, to name an arbitrator.
      The location of any arbitration shall be in the State of Delaware. Process
      in
      any such action or proceeding may be served on any party anywhere in the
      world.

    

    

    Procedure
      for Indemnity Claims

    

    11.2 Indemnification
      Claim Made by WPCS.

    

    (a)  Stockholder’s
      Representative.
      For the
      purposes of this Agreement, G. Walker shall act as the representative (the
      “Stockholders’
      Representative”)
      and
      attorney-in-fact for D. Walker and G. Walker (the “Principals”)
      with
      full power of attorney to act on their behalf with respect to any
      indemnification claims made by WPCS under this Agreement including, but not
      limited to, administering, settling, or otherwise resolving any WPCS Claim
      Notice (as defined in Section 11.2(b) below), responding to and settling any
      WPCS Claim Notice, and executing and delivering any statement, release or
      settlement to WPCS. If G. Walker resigns, dies, or is incapacitated and,
      therefore, unable to act as agent as herein contemplated, then D. Walker shall
      be the Stockholders’ Representative. The Principals may appoint a different
      Stockholders’ Representative by giving written notice thereof to
      WPCS.

     

    
 

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    (b)  Notice.
      If WPCS
      elects to assert a claim for indemnification by the Principals under this
      Agreement, it shall give written notice (“WPCS Claim
      Notice”)
      to the
      Stockholders’ Representative within the time period set forth in Section 11.2(f)
      of this Agreement. Such notice shall include a general description of the claim
      and the basis therefore and, if applicable, reference to the relevant provisions
      of this Agreement, documents or other evidence supporting such claim, and the
      amount, if known, asserted by WPCS for such claim (including, if appropriate,
      an
      estimate of all costs and expenses reasonably expected to be incurred by WPCS
      by
      reason of such claim). Such notice and other notices hereunder shall be given
      to
      the Stockholders’ Representative and to the other parties in accordance with and
      at the addresses provided in Sections 11.4 and 11.5 of this Agreement. Within
      twenty (20) business days after receipt of the WPCS Claim Notice, the
      Stockholders’ Representative will advise WPCS whether the Principals agree with
      the WPCS Claim Notice and to the amount thereof, or whether Principals object
      to
      the same.

    

    (c)  Payment
      to WPCS.
      The
      Principals shall pay WPCS (i) the amount of the WPCS Claim Notice if WPCS has
      not received a response to the WPCS Claim Notice from the Stockholders’
Representative within twenty (20) business days after receipt of the WPCS Claim
      Notice by the Stockholders’ Representative, stating that the Principals object
      to the WPCS Claim Notice; or (ii) such other amount as WPCS and the
      Stockholders’ Representative may agree upon in a writing signed by both
      parties.

    

    (d)  Unliquidated
      Claims.
      If a
      claim for indemnification arises out of, or is based on, a claim or right
      asserted by a third party, the parties shall not be required to resolve the
      amount of such loss until such third party claim is resolved whether by judicial
      decision or otherwise, and all appeals have been exhausted or the time for
      filing such appeals shall have expired.

    

    (e)  Mutual
      Resolution.
      If the
      Principals object to a WPCS Claim Notice, the Principals and WPCS shall use
      their best efforts to attempt in good faith to resolve such claim in an
      expedited manner. Each party shall cooperate in furnishing, or providing access
      to, all available documents or other evidence relevant to such claim, except
      any
      privileged evidence or materials specifically prepared to support such WPCS
      Claim Notice by WPCS or to support the Principals’ defense in respect of such
      claim. To the extent the amount of such WPCS Claim Notice is not finally
      resolved within sixty (60) days after objection is made by the Stockholders’
Representative, the disputed portion of such claim shall be submitted for
      settlement pursuant to Section 11.1 of this Agreement, unless otherwise agreed
      by the parties. To the extent the amount of such WPCS Claim Notice is finally
      resolved, WPCS and the Stockholders’ Representative shall sign a written
      statement setting forth such settlement amount. WPCS shall then be entitled
      to
      receive payment of such settlement amount from the Principals.

     

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    
 

    (f)  Termination.
      WPCS’s
      right to indemnification under this Agreement shall apply only to those claims
      written notice of which shall have been delivered by WPCS to the Stockholders’
Representative not later than two (2) years after the Closing Date.

    

    (g)  Settlement
      of Claims.
      To the
      extent that the Principals and WPCS have not resolved any disputed WPCS Claim
      Notice pursuant to Section 11.2.(e) above, such dispute shall be settled in
      accordance with the dispute resolution procedures set forth in Section 11.1
      of
      this Agreement.

    

    11.3 Indemnification
      Claim Made by Walker or the Walker Shareholders.

    

    (a)  Stockholder’s
      Representative.
      For the
      purposes of this Agreement, G. Walker shall act as the representative (the
      “Stockholders’
      Representative”)
      and
      attorney-in-fact for Walker and the Walker Shareholders with full power of
      attorney to act on their behalf with respect to any indemnification claims
      made
      by Walker or the Walker Shareholders under this Agreement including, but not
      limited to, filing, administering, settling, or otherwise resolving any Walker
      Claim Notice (as defined in Section 11.3(b) below), and executing and delivering
      any statement, release or settlement to WPCS with respect to a Walker Claim
      Notice. If G. Walker resigns, dies, or is incapacitated and, therefore, unable
      to act as agent as herein contemplated, then D. Walker shall be the
      Stockholders’ Representative. The Principals may appoint a different
      Stockholders’ Representative by giving written notice thereof to
      WPCS.

    

    (b)  Notice.
      If
      Walker or the Walker Shareholders elect to assert a claim for indemnification
      by
      WPCS under this Agreement, it shall give written notice (“Walker
      Claim Notice”)
      to
      WPCS within the time period set forth in Section 11.3(f) of this Agreement.
      Such
      notice shall include a general description of the claim and the basis therefore
      and, if applicable, reference to the relevant provisions of this Agreement,
      documents or other evidence supporting such claim, and the amount, if known,
      asserted by Walker or the Walker Shareholders for such claim (including, if
      appropriate, an estimate of all costs and expenses reasonably expected to be
      incurred by Walker or the Walker Shareholders by reason of such claim). Such
      notice and other notices hereunder shall be given to WPCS and to the other
      parties in accordance with and at the addresses provided in Sections 11.4 and
      11.5 of this Agreement. Within twenty (20) business days after receipt of the
      Walker Claim Notice, WPCS will advise the Stockholders’ Representative whether
      WPCS agrees with the Walker Claim Notice and to the amount thereof, or whether
      WPCS objects to the same.

    

    (c)  Payment
      to Walker or Walker Shareholders
      WPCS
      shall pay Walker or the Walker Shareholders (i) the amount of the Walker Claim
      Notice if the Shareholders’ Representative has not received a response to the
      Walker Claim Notice from WPCS within twenty (20) business days after receipt
      of
      the Walker Claim Notice by WPCS, stating that WPCS objects to the Walker Claim
      Notice; or (ii) such other amount as WPCS and the Stockholders’ Representative
      may agree upon in a writing signed by both parties.

     

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    
 

    (d)  Unliquidated
      Claims.
      If a
      claim for indemnification arises out of, or is based on, a claim or right
      asserted by a third party, the parties shall not be required to resolve the
      amount of such loss until such third party claim is resolved whether by judicial
      decision or otherwise, and all appeals have been exhausted or the time for
      filing such appeals shall have expired.

    

    (e)  Mutual
      Resolution.
      If WPCS
      objects to a Walker Claim Notice, the Stockholders’ Representative and WPCS
      shall use their best efforts to attempt in good faith to resolve such claim
      in
      an expedited manner. Each party shall cooperate in furnishing, or providing
      access to, all available documents or other evidence relevant to such claim,
      except any privileged evidence or materials specifically prepared to support
      such Walker Claim Notice by Walker or the Walker Shareholders or to support
      WPCS’s defense in respect of such claim. To the extent the amount of such Walker
      Claim Notice is not finally resolved within sixty (60) days after objection
      is
      made by WPCS, the disputed portion of such claim shall be submitted for
      settlement pursuant to Section 11.1 of this Agreement, unless otherwise agreed
      by the parties. To the extent the amount of such Walker Claim Notice is finally
      resolved, WPCS and the Stockholders’ Representative shall sign a written
      statement setting forth such settlement amount. Walker or the Walker
      Shareholders shall then be entitled to receive payment of such settlement amount
      from the Principals.

    

    (f)  Termination.
      Walker
      and the Walker Shareholders’ right to indemnification under this Agreement shall
      apply only to those claims written notice of which shall have been delivered
      by
      the Stockholders’ Representative to WPCS not later than two (2) years after the
      Closing Date.

    

    (g)  Settlement
      of Claims.
      To the
      extent that the Shareholders’ Representative and WPCS have not resolved any
      disputed Walker Claim Notice pursuant to Section 11.3.(e) above, such dispute
      shall be settled in accordance with the dispute resolution procedures set forth
      in Section 11.1 of this Agreement.

    

    Notice

    

    11.4 Any
      notice required or permitted to be given by any party will be deemed to be
      given
      when in writing and delivered to the address for notice of the intended
      recipient by personal delivery, prepaid single certified or registered mail,
      or
      Facsimile. Any notice delivered by mail shall be deemed to have been received
      on
      the fourth business day after and excluding the date of mailing, except in
      the
      event of a disruption in regular postal service in which event such notice
      shall
      be deemed to be delivered on the actual date of receipt. Any notice delivered
      personally or by Facsimile shall be deemed to have been received on the actual
      date of delivery.

    

    Addresses
      for Service

    

    11.5 The
      address for service of notice of each of the parties hereto is as
      follows:

    

    
      	(a)  	
              WPCS
                or the Acquirer:

            

    

     

     

    
 

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    
      	  	
              
                WPCS
                  International Incorporated

                140
                  South Village Avenue, Suite 20

                Exton,
                  Pennsylvania 19341

                Attn:
                  Andrew Hidalgo, President

                Phone:
                  (610) 903-0400

                Facsimile:
                  (610) 903-0401

              

            

    

     

    
      	  	
              
                Copy
                  to:

              

            

    

     

    
      	  	
              
                
                  Marc
                    J. Ross, Esq.

                  Thomas
                    A. Rose, Esq.

                  Sichenzia
                    Ross Friedman Ference LLP

                  1065
                    Avenue of the Americas

                  New
                    York, New York 10018

                  Phone:
                    (212) 930-9700

                  Facsimile:
                    (212) 930-9725

                

              

            

    

     

    
      	(b)  	
              Walker
                or the Walker Shareholders

            

    

     

    
       
        Walker
          Comm, Inc.

        521
          Railroad Avenue

        Fairfield,
          California 94533

        Attn:
          Donald C. Walker, President

        Phone:
          (707) 398-3421

        Facsimile:
          (707) 421-1359

      

    Copy
      to:

    

    Wyman
      Smith, Esq.

    Gaw
      VanMale Smith Myers & Miroglio

    1000
      Main
      Street

    Suite
      300

    Napa,
      California 94559

    Phone:
      (707) 252-9000

    Facsimile:
      (707) 252-0792

    

    

    

    Change
      of Address

    

    11.6 Any
      party
      may, by notice to the other parties change its address for notice to some other
      address in North America and will so change its address for notice whenever
      the
      existing address or notice ceases to be adequate for delivery by hand. A post
      office box may not be used as an address for service.

    

    Further
      Assurances

    

    11.7 Each
      of
      the parties will execute and deliver such further and other documents and do
      and
      perform such further and other acts as any other party may reasonably require
      to
      carry out and give effect to the terms and intention of this
      Agreement.

     

    
 

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    Time
      of the Essence

    

    11.8 Time
      is
      expressly declared to be the essence of this Agreement.

    

    Entire
      Agreement

    

    11.9 The
      provisions contained herein constitute the entire agreement among Walker, the
      Walker Shareholders, the Acquirer and WPCS respecting the subject matter hereof
      and supersede all previous communications, representations and agreements,
      whether verbal or written, among Walker, the Walker Shareholders, the Acquirer
      and WPCS with respect to the subject matter hereof.

    

    Successors
      and Assigns

    

    11.10 This
      Agreement will inure to the benefit of and be binding upon the parties hereto
      and their respective heirs, executors, administrators, successors and permitted
      assigns.

    

    Assignment

    

    11.11 This
      Agreement is not assignable without the prior written consent of the parties
      hereto. 

    

    Counterparts

    

    11.12 This
      Agreement may be executed in counterparts, each of which when executed by any
      party will be deemed to be an original and all of which counterparts will
      together constitute one and the same Agreement. Delivery of executed copies
      of
      this Agreement by Facsimile will constitute proper delivery, provided that
      originally executed counterparts are delivered to the parties within a
      reasonable time thereafter.

    

    Applicable
      Law

    

    11.13 This
      Agreement is subject to the laws of the State of Delaware.

    

    

    

    [Remainder
      of page intentionally left blank.]

     

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF
      the
      parties have executed this Agreement effective as of the day and year first
      above written.

    

    
      
        	 	 	 
	 	
                WPCS
                  INTERNATIONAL INCORPORATED

              
	 
 	 
 	 
 
	 	By:  	/s/ ANDREW
                HIDALGO
	 	
                
Andrew
                Hidalgo, President 
	 	 
	Witness	 
	
                Name 

              	 
	Address 	 

      

    

    
      	 	 	 
	 	
              WALKER
                COMM MERGER
                CORP.

            
	 
 	 
 	 
 
	
            	By:  	/s/ ANDREW
              HIDALGO
	 	
              
Andrew
              Hidalgo, President 
	Witness	 
	
              Name 

            	 
	
              Address 

            	 

    

    

     

    
      
        	 	 	 
	 	WALKER
                COMM, INC
	 
 	 
 	 
 
	 	By:  	/s/ DONALD
                C. WALKER
	 	
                
Donald
                C. Walker, President 
	Witness  	 
	
                Name  

              	 
	Address 	 

      

    

    

    [Signature
      Page to Agreement and Plan of Merger dated December 30, 2002]

     

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

     

     

    
      
        	
                 

                Witness 

              	
                /s/ DONALD C. WALKER

                
                  

                  DONALD
                    C. WALKER 

                

              
	
                Name 

              	 
	
                Address 

              	 
	 	 

      

       

       

      
        
          	
                   

                  Witness 

                	
                  /s/ GARY R. WALKER

                  
                    

                    GARY
                      R. WALKER  

                  

                
	
                  Name 

                	 
	Address 	 
	 	 

        

         

      

    

     

     

    
      
        	
                 

                 

                Witness 

              	
                /s/
                  TANYA D. SANCEZ

                

                TANYA
                  D. SANCHEZ 

              
	Name 	 
	
                Address

              	 
	 	 

      

       

    

     

    
 

    

    

    

    

    [Signature
      Page to Agreement and Plan of Merger dated December 30, 2002]

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