Document:

Unassociated Document

    Exhibit
      10.3

    ESCROW
      AGREEMENT

     

    This
      Agreement is made as of the 1st day of
      August,
      2007, by and among Frank Mauger, James Jordan and Todd Kahl, each a shareholder
      (the “Shareholders”) of Major Electric, Inc., a corporation organized and
      existing under the laws of the State of Washington, with its principal offices
      located at 18538 142nd Avenue
      NE,
      Woodinville, Washington 98072 ("MEI"), WPCS International Incorporated, a
      corporation organized and existing under the laws of the State of Delaware,
      with
      its principal offices at One East Uwchlan Avenue, Suite 301, Exton, Pennsylvania
      19341  ("WPCS"), and Sichenzia Ross Friedman Ference LLP, a New York
      limited liability partnership having offices at 61 Broadway, New York, New
      York
      10006 (the "Escrow Agent").

     

    RECITALS

     

     

    The
      Shareholders, MEI and WPCS are
      parties to that certain Stock Purchase Agreement, dated as of August 1, 2007
      (the "Purchase Agreement").  WPCS and the Shareholders wish to provide
      for the escrow of certain monies pursuant to the Purchase Agreement, and desire
      that the Escrow Agent hold such monies in connection therewith pursuant to
      the
      provisions of this Agreement, and the Escrow Agent is willing to hold such
      cash
      pursuant to the provisions of this Agreement.  All capitalized terms
      contained herein and not otherwise defined shall have the meaning ascribed
      to
      them in the Purchase Agreement.  In consideration of the premises and
      mutual covenants, agreements, representations and warranties contained herein,
      the parties hereby agree as follows:

     

    1.           WPCS
      and Shareholders hereby appoint the Escrow Agent to hold $300,000 in cash (the
      "Escrowed Funds"), in a trust account, and the Escrow Agent accepts such
      appointment, subject to the terms and conditions hereof.  WPCS has,
      prior to the execution of this Escrow Agreement, delivered by way of wire
      transfer to the Escrow Agent the Escrowed Funds and hereby irrevocably instructs
      the Escrow Agent to deal with the Escrowed Funds on and subject to the terms
      hereof.  In executing this Escrow Agreement the Escrow Agent
      acknowledges receipt of the Escrowed Funds and the instructions contained
      herein.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

             2.                (a)           The
      Escrow Agent shall retain the Escrowed Funds until the NTAV of the Company
      as of
      the Closing Date shall be determined.

     

    (b)           In
      the event the NTAV as of the Closing Date shall be less than $1,900,000, the
      Cash Purchase Price shall be reduced by the amount of the shortfall and such
      amount shall be delivered to WPCS by the Escrow Agent from the Escrowed
      Funds.  In the event the NTAV as of the Closing Date shall be greater
      than $1,900,000, the Closing Payment shall be increased by the amount of the
      excess and such amount shall be delivered by WPCS to the Shareholders, pro
      rata,
      based upon their ownership of Shares.  The NTAV shall be determined in
      accordance with the terms and conditions of Section 2.3(a) of the Purchase
      Agreement.  The Escrow Agent shall only deliver the Escrowed Funds
      upon (i) written notification signed by each of the Shareholders and WPCS of
      final determination of the NTAV or (ii) delivery to the Escrow Agent of a final
      written determination of NTAV by the Independent Accounting Firm.

     

    (c)           The
      balance of any amount remaining after the delivery of payments required pursuant
      to section 2(b) above (the “Escrow Payment”) shall be delivered to the
      Shareholders, pro rata, based upon their ownership of Shares, within three
      (3)
      business days of the date of the escrow payments required by section 2(b)
      above.

     

    3.           The
      Escrow Agent shall, from time to time, deliver all or some of the Escrowed
      Funds
      to WPCS or the Shareholders in accordance with such written instructions,
      jointly executed by WPCS and the Shareholders, as the Escrow Agent may
      receive.

     

    4.           The
      Escrow Agent shall not be under any duty to give the Escrowed Funds any greater
      degree of care than it gives its own similar property, and it shall have no
      liability hereunder, except for the willful breach or gross negligence of its
      duties hereunder.

     

    5.           The
      Escrow Agent shall have no duties or responsibilities except those expressly
      set
      forth herein, and no implied duties or obligations should be read into this
      Escrow Agreement against the Escrow Agent.  The Escrow Agent need not
      refer to, and will not be bound by, the provisions of any other agreement,
      except for definitions of terms contained in the Purchase
      Agreement.

     

    
      
         

      

      
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    6.           The
      Escrow Agent may consult with counsel and shall be fully protected with respect
      to any action taken or omitted by it in good faith on advice of
      counsel.

     

    7.           The
      Escrow Agent makes no representation as to the validity, value, genuineness
      or
      the collectibility of any security or other document or instrument held by
      or
      delivered to it.

     

    8.           The
      Escrow Agent will receive no compensation for its services
      hereunder.

     

       9.            In
      the event that the Escrow Agent shall be uncertain as to its duties or rights
      hereunder, or shall receive instructions from WPCS and the Shareholders or
      both
      of them, with respect to the Escrowed Funds, which, in its opinion, are in
      conflict with any of the provisions hereof (i) it shall be entitled to refrain
      from taking any action, and in doing so shall not become liable in any way
      or to
      any person for its failure or refusal to comply with such conflicting demands,
      and it shall be entitled to continue so to refrain from acting and so refuse
      to
      act until it shall be directed otherwise, in writing, jointly by WPCS and the
      Shareholders or until it shall receive a final determination of a court of
      law,
      arbitration panel, or similar adjudicative body, or (ii) it may commence an
      interpleader action in any court of competent jurisdiction to seek an
      adjudication of the rights of WPCS and the Shareholders.

     

    10.             The
      Escrow Agent may act in reliance upon any notice, instruction, certificate,
      statement, request, consent, confirmation, agreement or other instrument which
      it believes to be genuine and to have been signed by a proper person or persons,
      and may assume that any of the officers of WPCS or the Shareholders purporting
      to act on behalf of WPCS or the Shareholders in giving any such notice or other
      instrument in connection with the provisions hereof has been duly authorized
      to
      do so.

     

    
      
         

      

      
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    11.1             In
      the event that the Escrow Agent retains counsel or otherwise incurs any legal
      fees by virtue of any provision of this Escrow Agreement, the reasonable fees
      and disbursements of such counsel and any other liability, loss or expense
      which
      the Escrow Agent may thereafter suffer or incur in connection with this Escrow
      Agreement or the performance or attempted performance in good faith of its
      duties hereunder shall be paid (or reimbursed to it) by WPCS.  In the
      event that the Escrow Agent shall become a party to any litigation in connection
      with its functions as Escrow Agent pursuant to this Escrow Agreement, whether
      such litigation shall be brought by or against it, the reasonable fees and
      disbursements of counsel to the Escrow Agent including the amounts attributable
      to services rendered by members or associates of Escrow Agent at the then
      prevailing hourly rate charged by them and disbursements incurred by them,
      together with any other liability, loss or expense which it may suffer or incur
      in connection therewith, shall be paid (or reimbursed to it) by WPCS, unless
      such loss, liability or expense is due to the willful breach or gross negligence
      by the Escrow Agent of its duties hereunder.

     

    11.2  WPCS
      hereby
      unconditionally agrees to indemnify the Escrow Agent and hold it harmless from
      and against any and all taxes (including federal, state and local taxes of
      any
      kind and other governmental charges), expenses, damages, actions, suits or
      other
      charges incurred by or brought or assessed against it for (i) anything done
      or
      omitted by it in the performance of its duties hereunder, or (ii) on account
      of
      acting in its capacity as an Escrow Agent or stakeholder hereunder, except
      as a
      result of its willful breach or gross negligence of its duties under this Escrow
      Agreement.

     

    11.3             
      All expenses incurred by the Escrow Agent in connection with the performance
      of
      its duties hereunder shall be paid (or reimbursed to it) by WPCS.

     

    
      
         

      

      
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    11.4
      The agreements contained in this
      section 11 shall survive any termination of the duties of the Escrow Agent
      hereunder.

     

    12.             The
      terms and provisions of this Escrow Agreement may not be waived, discharged
      or
      terminated orally, but only by an instrument in writing signed by the person
      or
      persons against whom enforcement of the discharge, waiver or termination is
      sought.

     

    13.             The
      Escrow Agent shall not be bound by any modification of the provisions of this
      Escrow Agreement, unless such modification is in writing and signed by WPCS
      and
      the Shareholders, and, with respect to any modification in Escrow Agent's duties
      or its rights of indemnification hereunder, it shall have given their prior
      written consent thereto.

     

    14.             WPCS
      and the Shareholders shall, from time to time, execute such documents and
      perform such acts as the Escrow Agent may reasonably request and as may be
      necessary to enable the Escrow Agent to perform its duties hereunder or
      effectuate the transactions contemplated by this Escrow Agreement.

     

    15.             WPCS
      and the Shareholders hereby acknowledge that the acts of the Escrow Agent are
      purely ministerial and do not represent a conflict of interest for the Escrow
      Agent to act, or continue to act, as counsel for any party to this Agreement
      with respect to any litigation or other matters arising out of this Agreement
      or
      otherwise.

     

    16.             The
      Escrow Agent may resign at any time upon ten (10) days' written notice to WPCS
      and the Shareholders.  In the event of the Escrow Agent's resignation,
      its only duty thereafter shall be to hold and dispose of the Escrowed Funds
      in
      accordance with the provisions of this Agreement until a successor Escrow Agent
      shall be appointed and written notice of the name and address of such successor
      Escrow Agent shall be given to the resigning Escrow Agent by the other parties
      hereto, whereupon the resigning Escrow Agent's only duty shall be to deliver
      the
      Escrowed Funds to the successor Escrow Agent.

     

    
      
         

      

      
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    17.             The
      rights created by this Agreement shall inure to the benefit of, and the
      obligations created hereby shall be binding upon, the heirs, successors, assigns
      and personal representatives of the Escrow Agent, WPCS and the
      Shareholders.

     

    18.             
      Each notice, demand, request, approval or communication ("Notice") which is
      or
      may be required to be given by any party to any other party in connection with
      this Agreement and the transactions contemplated hereby, shall be in writing,
      and given by personal delivery, certified mail, return receipt requested,
      prepaid, or by overnight express mail delivery and properly addressed to the
      party to be served at such address as set forth above.

     

    Notices
      shall be effective on the
      date delivered personally, the next day if delivered by overnight express mail
      or three days after the date mailed by certified mail.

     

    19.             This
      Escrow Agreement shall be governed by, and its provisions construed in
      accordance with the laws of the State of New York.

    

    

    

    [Intentionally
      blank]

     

    
      
         

      

      
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    IN
      WITNESS WHEREOF,
      the parties hereto have caused this Escrow Agreement to be duly executed as
      of
      the day and year first above written.

     

     

    
      	 	
              WPCS
                INTERNATIONAL INCORPORATED

            	 
	 	 	 	 
	
            	
              By:
                

            	/s/ ANDREW
              HIDALGO	 
	 	 	
              Andrew Hidalgo

              Chief
                Executive Officer

            	
            
	 	 	 	 
	 	 	 	 

      	 	MAJOR
              ELECTRIC, INC.	 
	 	 	 	 
	
               

            	
               

            	/s/ FRANK
              MAUGER	 
	 	 	Frank
              Mauger,	 
	 	 	President	 
	 	 	
               

               

            	 

    

    
      	 	SHAREHOLDERS	 
	 	 	 	 
	
               

            	
               

            	/s/ FRANK
              MAUGER	 
	 	 	Frank
              Mauger	 
	 	 	 	 
	 	 	 	 

    

    
      	 	
            	 
	 	 	 	 
	
               

            	
               

            	/s/ JAMES
              JORDAN	 
	 	 	James
              Jordan	 
	 	 	 	 
	 	 	 	 

    

    
      	 	
            	 
	 	 	 	 
	 	
               

            	/s/ TODD
              KAHL	 
	 	 	Todd
              Kahl	 
	 	 	 	 
	 	 	 	 

    

    

    
 

    ESCROW
      AGENT:

    SICHENZIA
      ROSS FRIEDMAN FERENCE LLP

    

    /s/
      THOMAS A. ROSE

    
      
        

      

    

    Thomas
      A.
      Rose,

     PartnerUnassociated Document

    Exhibit
      10.4

    

    EMPLOYMENT
      AGREEMENT

    

    THIS
      EMPLOYMENT AGREEMENT is made effective as of the 1stday
      of August, 2007
      (the “Effective Date”).

    

    AMONG:

    

    MAJOR
      ELECTRIC, INC., a corporation formed pursuant to the laws of the State
      of Washington and having an office for business located at 18538 142nd Avenue
      NE,
      Woodinville, Washington 98072 ("Employer") and wholly owned subsidiary of
WPCS INTERNATIONAL INCORPORATED, a corporation formed pursuant
      to the laws of the State of Delaware (“Parent”);

    

    AND

    

    FRANK
      MAUGER, an individual having an address at 14263 90th
      Avenue NE,
      Bothell, Washington 98011 (“Employee”).

    

    

    WHEREAS,
      Employee has agreed to continue to serve as an employee 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 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 faithfully, diligently and to the best
      of his ability, under the direction and supervision of the Board of Directors
      of
      Employer and shall use his best efforts to promote the interests and goodwill
      of
      Employer and any affiliates, successors, assigns, subsidiaries, and/or future
      purchasers of Employer. Employee shall render such services during the Term
      at
      Employer’s principal place of business in Woodinville, Washington or at such
      other place of business within a 25 mile radius of Woodinville, Washington
      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 business
      time to the performance thereof.

    

    ARTICLE
      3

    TERM

    

    The
      “Term” of this Agreement shall commence on the Effective Date and continue
      thereafter for a term of one (1) year, as may be extended or earlier terminated
      pursuant to the terms and conditions of this Agreement.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
      4

    COMPENSATION

    Salary

    

    4.1

    Employer
      shall pay to Employee an annual salary (the “Salary”) of One Hundred Fifty
      Thousand Dollars ($150,000.00), 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.   If this Agreement is extended for additional periods,
      the Salary increases will be determined by the Employer’s Board of
      Directors.

    

    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.

    

    Automobile

    

    4.4

    Employee
      shall be entitled to a $500 per month automobile allowance.  In
      addition, Employer shall reimburse Employee for all maintenance and gasoline
      expenses associated with the automobile, provided that such expenses are
      adequately documented.

    

    Bonus

    

    
      	
              4.5  

            	 

    

    In
      addition to the Salary, Employee shall be eligible to receive bonuses, based
      on
      the financial performance of the Employer, at the discretion of the Board of
      Directors of the Employer or Parent.

    

    

    ARTICLE
      5

    OTHER
      EMPLOYMENT

    

    During
      the Term of this Agreement, Employee shall devote substantially all of his
      business and professional time 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.
      Provided that the activities listed below do not materially interfere with
      the
      duties and responsibilities under this Agreement, nothing in this Agreement
      shall preclude Employee from devoting reasonable periods required
      for:

     

    
      	
               

            	
              (a)

            	
              Serving
                as a member of any organization involving no conflict of interest
                with
                Employer;

            

    

     

    
      
         

      

      
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              (b)

            	
              Serving
                as a consultant in his area of expertise to government, commercial
                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.

            

    

    

    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 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, 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 in the public domain
      at the time of the disclosure of such information by Employee, (ii) information
      that is disclosed by Employee with the prior consent of Employer, or (iii)
      information disclosed in connection with a legal or governmental proceeding
      provided that Employee has delivered prior written notice thereof to Employer
      and has reasonably cooperated (at Employer’s expense) with any efforts by
      Employer to prevent such disclosure.

    

    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, not copied, to Employer upon demand therefor 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.

    

    NOTICE
      PURSUANT TO RCW 49.44.140(3):

    

    This
      Section 6.3 shall not apply to an invention for which no equipment, supplies,
      facility, or trade secret information of the Employer was used and which was
      developed entirely on the Employee’s own time, unless (a) the invention relates
      (i) directly to the business of the Employer, or (ii) to the Employer’s actual
      or demonstrably anticipated research or development, or (b) the invention
      results from any work performed by the Employee for the Employer.

    

    
      
         

      

      
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    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 immediate family in
      any
      business that is actually 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.

    

    ARTICLE
      7

    COVENANT
      NOT TO COMPETE

    

    Except
      as
      expressly permitted in Article 5 above, during the Term of this Agreement and
      for a period of two (2) years after the later of the Effective Date or the
      termination of the Employee’s employment by the Employer, 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 in (or scheduled to be engaged) by the Employer or the Parent
      in any areas where the Employer or the Parent engage in business; (b) engaging
      directly or indirectly in any business or activity competitive with any business
      or activity engaged in (or scheduled to be engaged) by the Employer or the
      Parent in any areas where the Employer or the Parent engage in business; (c)
      soliciting or taking away any employee, agent, representative, contractor,
      supplier, vendor, customer, franchisee, lender or investor of the Employer
      or
      the Parent, or attempting to so solicit or take away; (d) interfering with
      any
      contractual or other relationship between the Employer or the Parent 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 the Employer, any Confidential Information of the Employer
      or
      the Parent.  In addition, during the two-year period following such
      expiration or earlier termination, neither Employee nor Employer or Parent
      shall
      make or, to the extent within its control, permit the making of any negative
      statement of any kind concerning Employer or its affiliates, or their directors,
      officers or agents or Employee, except in connection with any legal or
      governmental proceedings or actions. Nothing in this Article 7 shall be deemed,
      however, to prevent Employee from owning securities of any publicly-owned
      corporation engaged in any such business, provided that the total amount of
      securities of each class owned by Employee in such publicly-owned corporation
      (other than Parent) does not exceed two percent (2%) of the outstanding
      securities of such class.

    

    ARTICLE
      8

    SURVIVAL

    

    Employee
      agrees that the provisions of Articles 6, 7 and 9, and Employer agrees that
      the
      last sentence of Article 7, 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.  Notwithstanding the foregoing, if this Agreement is
      terminated upon the voluntary or involuntary dissolution of Employer, the filing
      of a petition in bankruptcy by Employer or upon an assignment for the benefit
      of
      creditors of the assets of Employer, Articles 6, 7 and 9 shall be of no further
      force or effect.

    

    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.

    

    
      
         

      

      
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    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
                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;

            

    

    

    
      	
               

            	
              (v)

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

            

    

    

    
      	
               

            	
              (vi)

            	
              the
                failure of Employer to obtain the assumption in writing of its obligation
                to perform the Employment Agreement by any successor to all or
                substantially all of the assets of Employer or upon a merger,
                consolidation, sale or similar transaction of Employer;
                or

            

    

    

    
      	
               

            	
              (vii)

            	
              the
                voluntary or involuntary dissolution of Employer, the filing of a
                petition
                in bankruptcy by Employer or upon an assignment for the benefit of
                creditors of the assets of
                Employer.

            

    

    

    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 without making disclosure to and obtaining
      the prior written consent of Employer. The written notice given hereunder by
      Employer to Employee shall specify in reasonable detail the cause for
      termination. 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.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    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
      and
      expense reimbursement 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, including any pro-rated bonus, 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 five (5) 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.  The “Severance
      Payment” shall equal the 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).

    

    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, including any pro-rated
      bonus, due hereunder through the date of death.

    

    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, including any pro-rated bonus,
      due
      hereunder through the date of termination.

    

    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
      employees as the same may be interpreted, adopted, revised or deleted from
      time
      to time, during the Term of this Agreement, by Employer in its sole discretion.
      During the Term hereof, Employee shall be entitled to vacation during each
      year
      of the Term at the rate of three (3) weeks per year. Employee shall take such
      vacation at a time approved in advance by Employer, 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 as
      they now or shall exist while this Agreement is in effect.

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    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 Washington, without regard to any conflict-of-laws principles. Employer
      and Employee hereby consent to personal jurisdiction before all courts in the
      State of Washington, and hereby acknowledge and agree that the State of
      Washington 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
      warrants 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.

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    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 Employer.

    

    Notices

    

    13.9

    All
      notices and other communications under this Agreement shall be in writing and
      shall be deemed given when delivered personally, mailed by certified mail,
      return receipt requested, or via recognized overnight courier service with
      all
      charges prepaid or billed to the account of the sender to the parties (and
      shall
      also be transmitted by facsimile to the Persons receiving copies thereof) at
      the
      following addresses (or to such other address as a party may have specified
      by
      notice given to the other party pursuant to this provision):

    

    
      	
              (a)  

            	
              Company:

            

    

    

    Major
      Electric, Inc.

    18538
      142nd Avenue
      NE

    Woodinville,
      WA  98072

    Attn:  James
      Jordan

    Phone:  (425)
      483-2677

    Facsimile:  (425)
      402-9708

    

    
      	
              (b)  

            	
              Employee:

            

    

    

    Frank
      Mauger

    14263
      90th Avenue
      NE

    Bothell,
      WA  98011

    Phone:  (425)
      821-0611 (Home)

    

    

    [intentionally
      blank]

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    

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

    

    Employer:

    
 

    
      	 	MAJOR ELECTRIC,
              INC.	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ JAMES
              JORDAN	 
	 	 	
              James
                Jordan

              Vice
                President

            	 
	 	 	 	 
	 	 	 	 

    

    
Employee:

     

    
      	 	
            	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ FRANK
              MAUGER	 
	 	 	
              Frank
                Mauger

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