Document:

ASSET PURCHASE
AGREEMENT

 

This ASSET PURCHASE
AGREEMENT (the “Agreement”), entered into this 31st day of March, 2014, is by and among EC
Company, an Oregon corporation with a principal place of business at 2121 NW Thurman Street, Portland, Oregon 97210 (“Purchaser”),
WPCS INTERNATIONAL – SEATTLE, inc., a Washington corporation with a principal
place of business at 15241 NE 90th Street, Redmond, Washington 98052 (“WPCS-Seattle”), and
WPCS INTERNATIONAL INCORPORATED (“WPCS”), a Delaware corporation with a principal place of business at
One East Uwchlan Avenue, Suite 301, Exton, Pennsylvania 19341 (WPCS-Seattle and WPCS are collectively referred to as the “Sellers”
and each individually as a “Seller”).

 

Sellers and Purchaser
are collectively referred to herein as the “Parties”.

 

WITNESSETH

 

WHEREAS, the
Sellers desire to cease the operation of the Business (as defined herein);

 

WHEREAS, Purchaser
desires to purchase from the Sellers, and the Sellers desire to sell and transfer to Purchaser, the assets of the Sellers relating
to the Business, other than the Excluded Assets (both as defined herein) upon the terms and conditions contained in this Agreement.

 

NOW, THEREFORE,
in consideration of the mutual covenants and promises contained in this Agreement, and for other valuable consideration, the receipt
and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:

 

ARTICLE
1

DEFINITIONS

 

1.1         Defined
Terms. As used in this Agreement, the following terms have the following meanings:

 

(a)           “Accounts
Payable” means all bona fide accounts payable of Sellers related to the Business set forth on Schedule 1.1(a)
and all accounts payable incurred in the ordinary course of business between the date of this Agreement and the Closing Date and
set forth on the Supplemental Disclosure Schedules (as defined in Section 6.4(a)).

 

(b)           “Accounts
Receivable” means all bona fide accounts receivable, notes receivable, and other amounts payable to Sellers, including
Work in Process, in connection with the Business, as of the Closing Date, set forth on Schedule 1.1(b), but specifically
excluding the Delinquent Receivables.

 

(c)           “Affiliate”
means, as to any Person, any other Person who directly or indirectly controls, is under common control with or is controlled by
such Person. As used in this definition, “control” (including, “controlled by” and “under common
control with”) means possession, directly or indirectly, of power to direct or cause the direction of management or policies
of such Person (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).

 

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(d)           “Agreement”
means, unless the context otherwise requires, this Asset Purchase Agreement together with the Schedules and Exhibits attached
hereto, and the certificates and instruments to be executed and delivered in connection herewith.

 

(e)           “Assumed
Contracts” means all written Contracts and all written customer orders, customer contracts, customer quotes, requests
for proposals and requests for quotes of the Business delivered on or prior to the Closing Date or to be delivered following the
Closing Date, set forth on Schedule 1.1(e), but specifically excluding any oral modifications or change orders. Copies of
all Assumed Contracts for more than $25,000, including without limitation any change orders, have been provided by the Sellers
to Purchaser prior to the Closing Date.

 

(f)           “Assumed
Liabilities” means (i) the Accounts Payable of Sellers, and (ii) liabilities under the Assumed Contracts arising
or performed after the Closing Date, but specifically excluding any other liabilities of the Sellers, including without limitation
any Excluded Liabilities.

 

(g)           “Business”
means the electrical contracting business conducted directly by the Sellers in the States of Washington and Oregon. For purposes
of this definition, currently conducted by the Sellers means in support of the business of WPCS-Seattle and excludes all other
subsidiaries of WPCS.

 

(h)           “Business
Records” means originals or true copies of all operating data and financial records of Sellers relating to the Business,
including accounting and bookkeeping books and records, purchase and sale orders and invoices, sales and sales promotional data,
advertising materials, marketing analyses, past and present price lists, past and present customer service files, credit files,
written operating methods and procedures, other financial information related to the Purchased Assets, reference catalogues, insurance
files, personnel records, records relating to potential acquisitions and other financial records, on whatever media, pertaining
to the Business, or to customers or suppliers of, or any other parties having contracts or other business relationships with,
the Business. For purposes of clarity, communications of WPCS as well as correspondence and communications that are subject to
a legally recognized privilege (such as the attorney-client privilege) or represent materials tendered to the Sellers pursuant
to a non-disclosure agreement are not deemed “Business Records” for purposes of this Agreement.

 

(i)           “Cash”
means all cash of WPCS-Seattle.

 

(j)           “Charter
Documents” means each Parties’ articles or certificate of incorporation and bylaws in effect on the date hereof.

 

(k)           “Closing
Date” means the date that the Closing occurs as determined by the mutual agreement of the Parties.

 

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(l)           “COBRA”
means the provisions of Part 6 of Subtitle B of Title I of ERISA and Section 4980B of the Code and all regulations thereunder.

 

(m)           “Code”
means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

 

(n)           “Confidential
Information” has the meaning set forth in Section 6.7(d).

 

(o)           “Contracts”
means any agreement, contract, license, lease, instrument, note, bond, mortgage, indenture, guarantee or other legally binding
commitment or obligation, whether oral or written, listed on Schedule 1.1(o).

 

(p)           “Customer
Lists” means the benefit of WPCS-Seattle’s relationships with customers and all past and current customer lists
and lists of potential customers of the Business (collectively, the “Customers”, and each a “Customer”).

 

(q)           “Deferred
Liabilities” means all deferred liabilities of WPCS-Seattle related to the Business, including any deferred liabilities
to Affiliates of WPCS-Seattle.

 

(r)           “Delinquent
Receivables” means all accounts receivable, notes receivable, and other amounts payable to Sellers in connection
with the Business, that are 180 days or more past due as of the Closing Date, including, without limitation, those listed on Schedule
1.1(r) (except for any undisputed billed or unbilled retainage that is 180 days or more past due as of the Closing Date).

 

(s)           “Directly
Competitive” means engaging in or providing products, goods, services, support or technology similar to those provided
by the Business in the States of Washington, Idaho, Montana or Oregon, including, without limitation, engaging in or providing
such products, goods, services, support or technology in WPCS-Seattle’s electrical contracting business, market and service
segments and/or that compete with WPCS-Seattle’s products, goods, services, support or technology as of the Closing Date.

 

(t)           “Encumbrance”
means any claim, lien, pledge, option, charge, easement, security interest, right-of-way, encroachment, reservation, restriction,
encumbrance, or other right of any Person, or any other restriction or limitation of any nature whatsoever, affecting title to
any of the Purchased Assets.

 

(u)           “Enforceability
Limitations” means (i) bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter
in effect relating to creditors’ rights and (ii) the discretion of the appropriate Governmental Authority with respect
to commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law
or in equity).

 

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(v)           “Environmental
Claim” means any notice of violation, notice of potential or actual responsibility or liability, or Proceeding (including
those for contribution and/or indemnity) by any Governmental Authority or other Person for any damage (including personal injury,
tangible or intangible property damage, natural resource damage, indirect or consequential damages, investigative costs, removal,
response or remediation costs, nuisance, pollution, contamination or other adverse effects on the environment or for fines, penalties
or restrictions or conditions on environmental Permits) resulting from or relating to the following conditions, circumstances or
acts existing or occurring before the Closing Date: (i) the presence of, a Release or threatened Release into the environment of,
or exposure to, any Hazardous Substances, at, in, by or from any of the Facilities, (ii) the generation, manufacture, processing,
distribution, use, handling, transportation, storage, treatment or disposal of any Hazardous Substances at or in connection with
the operation of any of the Facilities, (iii) the violation, or alleged violation, of any Environmental Laws at or in connection
with the operation of any of the Facilities, or (iv) the non-compliance or alleged non-compliance with any Environmental Laws at
or in connection with the operation of any of the Facilities.

 

(w)           “Environmental
Laws” means any applicable Governmental Requirements and any licenses, permits, notices or other requirements issued
pursuant thereto, enacted, promulgated or issued by any Governmental Authority in any jurisdiction, in effect as of the Closing
Date, relating to pollution or protection of public health or the environment (including any air, surface water, groundwater, land
surface or sub-surface strata, whether outside, inside or under any structure), or to the identification, reporting, generation,
manufacture, processing, distribution, use, handling, treatment, storage, disposal, transporting, presence, Release or threatened
Release of, any Hazardous Substances. Without limiting the generality of the foregoing, Environmental Laws include the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the Toxic Substances Control Act, as amended, the Hazardous
Materials Transportation Act, as amended, the Resource Conservation and Recovery Act, as amended, the Clean Water Act, as amended,
the Safe Drinking Water Act, as amended, the Clean Air Act, as amended, the Occupational Safety and Health Act, as amended and
all similar or analogous laws enacted, promulgated or lawfully issued by any Governmental Authority.

 

(x)           “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

 

(y)           “Excluded
Assets” means the following assets of WPCS-Seattle:

 

(i)            the
Cash;

 

(ii)          any
rights of WPCS-Seattle under this Agreement and the other Transaction Documents;

 

(iii)         any
Tax records of WPCS-Seattle, subject to applicable law;

 

(iv)         any
Insurance of WPCS Seattle;

 

(v)          any
rights specifically relating to Excluded Contracts, the Employee Benefit Plans and the documents evidencing or otherwise relating
to the foregoing;

 

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(vi)         any
rights under any “Leases” as defined in Section 4.14 hereof; and

 

(vii)        the
items described on Schedule 1.1(y)(vii).

 

(z)           “Excluded
Contracts” means all Contracts other than Assumed Contracts, including, without limitation, those Contracts set
forth on Schedule 1.1(z).

 

(aa)         “Excluded
Liabilities” means any claims, lawsuits, liabilities, obligations, or any other debts or obligations of the Sellers
or relating to the Business incurred or existing on or prior to the Closing Date, whether the same are known, unknown, accrued,
contingent or otherwise (except to the extent an Assumed Liability), including, without limitation, the following:

 

(i)           any
liability or obligation of the Sellers arising out of or in connection with the negotiation or preparation of this Agreement or
any Transaction Document prepared in connection herewith or the consummation and performance of the transactions contemplated hereby;

 

(ii)          any
Deferred Liabilities;

 

(iii)         the
accounts payables of Sellers, except for the Accounts Payables;

 

(iv)        any
liabilities or obligations associated with the Excluded Assets;

 

(v)         any
amounts owed to or for the benefit of employees of WPCS-Seattle, including, but not limited to, amounts relating to wages, payroll,
bonuses, commissions, benefits, vacations, sick pay, paid time off, personal days earned or accrued prior to the Closing Date (whenever
payable), short-term disability, costs or liabilities, severance pay or union benefits, or any other liabilities or obligations
(collectively, “Payroll Liabilities”) which relate to services performed prior to the Closing Date;

 

(vi)         any
liability or obligation under the Excluded Contracts and other agreements to which any Seller is a party accruing prior to the
Closing Date, to the extent not an Assumed Contract;

 

(vii)        any
claim, liability or obligation of the Sellers, or any consolidated group of which any Seller is a member or shareholder, for any
federal, state, county or local Taxes of any and all types, or any interest or penalties thereon, accrued for, applicable to or
arising from any period prior to the Closing Date;

 

(viii)      any
liability or obligation arising out of or in connection with the Business and operations of the Sellers, the Purchased Assets or
the Assumed Contracts prior to the Closing Date, including without limitation any warranty claim for any services performed by
or goods sold by the Sellers prior to the Closing Date;

 

(ix)         any
liability or obligation for any borrowings of any Seller, including all short-term or long-term debt, except as otherwise provided
herein;

 

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(x)           any
liability or obligation of any Seller to any Affiliate, any shareholder or any shareholder’s affiliated entities or family
members;

 

(xi)         by
reason of or for any default, breach or penalty, whether known or unknown, any liability or obligation under any agreement, contract
or other arrangement or commitment of any Seller arising prior to the Closing Date; and

 

(xii)        any
liability with respect to checks written on bank accounts of Sellers prior to the Closing Date that have not cleared as of the
Closing Date.

 

(bb)       
“Facilities” means any real property ever owned or leased by WPCS or any of their predecessors.

 

(cc)        “Financial
Statements” means (a) the audited, consolidated balance sheet of WPCS as of April 30, 2013 and the related statement
of operations (including related notes, if any) for the twelve (12) months ended April 30, 2013, and (b) the unaudited, consolidated
balance sheet of WPCS as of December 31, 2013 and the related statement of operations (including related notes, if any) for the
eight (8) months ended December 31, 2013 (the “Interim Financial Statements”), as delivered to Purchaser.

 

(dd)        “GAAP”
means, with respect to all accounting matters and issues, generally accepted accounting principles as in effect from time to time
in the United States applied (to the extent applicable) consistent with the Financial Statements.

 

(ee)        “Governmental
Authority” means any federal, state, local or foreign government, or any political subdivision of any of the foregoing,
or any court, agency or other entity, body, organization or group, exercising any executive, legislative, judicial, quasi-judicial,
regulatory or administrative function of government, or any supranational body.

 

(ff)        “Governmental
Requirement” means any published law, statute, regulation, ordinance, rule, directive or code, and any order, judgment,
writ, injunction, decree or award of any Governmental Authority, in each case, now in effect.

 

(gg)       “Hazardous
Substances” means any pollutants, contaminants, substances, hazardous and/or toxic chemicals, carcinogens, wastes,
and any ignitable, corrosive, reactive, toxic or other hazardous substances or materials, whether solids, liquids or gases (including
petroleum and its derivatives, PCBs, asbestos, radioactive materials, waste waters, sludge, slag and any other substance, material
or waste), as defined in or regulated by any Environmental Laws or as determined by any Governmental Authority.

 

(hh)      
“Indemnified Party” means any Seller pursuant to Section 9.4 or Purchaser pursuant to Section 9.2.

 

(ii)        “Indemnifying
Party” means any Seller pursuant to Section 9.2 or Purchaser pursuant to Section 9.4.

 

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(jj)       “Intellectual
Property” means all intellectual property, including, without limitation, (i) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all improvements thereto and all patents, patent applications and patent
disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions and re-examinations thereof,
(ii) all trademarks and service marks (other than those identified as “DEAD” by the United States Patent and Trademark
Office as of the date of this Agreement), trade dress, logos, trade names and corporate names (other than those identified as “INACTIVE”
or otherwise discontinued), together with all translations, adaptations, derivations and combinations thereof and including all
goodwill associated therewith, and all applications, registrations and renewals in connection therewith, (iii) all copyrightable
works, copyrights and all applications, registrations and renewals in connection therewith, (iv) all mask works and all applications,
registrations and renewals in connection therewith, (v) all trade secrets and confidential business information (including ideas,
know-how, compositions, supplier lists, pricing and cost information and business and marketing plans and proposals), (vi) all
computer software (including data and related documentation and software installed on hard disk drives) other than (A) off-the-shelf
computer software subject to shrink-wrap or click-wrap licenses or (B) Microsoft Exchange Online and other email hosting services,
(vii) all copies and tangible embodiments of any of the foregoing (in whatever form or medium), (viii) all website URLS and website
domain names of WPCS-Seattle, and specifically excluding that of WPCS, (ix) Customer files and Supplier files, and (x) any testimonial
releases provided to Purchaser. Notwithstanding anything else to the foregoing, Intellectual Property shall not include “WPCS”,
“WPCS International Incorporated”, “WPCS-Seattle” or any variation thereof.

 

(kk)         “Inventory”
means all raw material, work-in-process and finished goods inventories of the Business, wherever located, including, without limitation,
that which is listed on Schedule 1.1(kk).

 

(ll)           “Knowledge”
means the actual knowledge of any officer or director of the Sellers. 

 

(mm)        “Losses”
means all losses, liabilities, deficiencies, damages (including indirect or consequential damages), encumbrances, fines, penalties,
claims, costs and expenses (including all fines, penalties and other amounts paid pursuant to a judgment, compromise or settlement),
court costs and reasonable legal and accounting fees and disbursements.

 

(nn)         “Material
Adverse Effect” means:

 

(i)           with
respect to the Sellers, an effect that is or would reasonably be expected to be materially adverse (A) to the Business or the Purchased
Assets, results of operations or financial condition of WPCS-Seattle, which will in any event include any adverse effect on the
Business, Purchased Assets, prospects, revenue, or net income of WPCS-Seattle in excess of (I) $100,000 for purposes of Section
8.6; or (II) $20,000 for any other purpose of this Agreement; or (B) to WPCS-Seattle’s ability to perform any of its material
obligations under this Agreement or to consummate the transactions contemplated in this Agreement; or

 

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(ii)          with
respect to Purchaser, an effect that is or would reasonably be expected to be materially adverse (A) to the business, results of
operation or financial condition of Purchaser; or (B) to Purchaser’s ability to perform any of its material obligations under
this Agreement or to consummate the transactions contemplated in the Agreement; provided, however, that in determining whether
a Material Adverse Effect has occurred there shall be excluded any effect on the referenced Party the cause of which is: (A) general
changes in conditions in the financial markets or in the global or United States economy so long as any such change does not materially
affect the referenced Party to a materially different extent than other similarly situated Persons, and (B) the announcement or
disclosure of the transactions contemplated hereby.

 

(oo)        
“Other Current Assets” means all current assets of the Business, including, without limitation, those listed
on Schedule 1.1(oo).

 

(pp)         “Permits”
means all permits, licenses, consents, franchises, approvals and other authorizations required from any Governmental Authority,
including, without limitation, the States of Washington or Oregon, or any city, county or other jurisdiction in connection with
the operation of the Business or the ownership of the Purchased Assets, which is necessary to conduct the Business as presently
conducted, including, without limitation, those set forth on Schedule 4.6(b).

 

(qq)         “Person”
means any Governmental Authority, individual, association, joint venture, partnership, corporation, limited liability company,
trust or other entity.

 

(rr)         “Proceeding”
means any claim, demand, action, suit, litigation, dispute, inquiry, order, writ, injunction, judgment, assessment, decree, grievance,
arbitral action, investigation or other proceeding.

 

(ss)         “Purchased
Assets” means all right, title and interest of Sellers in and to all of the assets of Sellers relating to the Business
of whatsoever nature, tangible or intangible, real or personal, including the following (except to the extent an Excluded Asset):

 

(i)           the
Accounts Receivable and the Delinquent Receivables;

 

(ii)          all
interest in and claims and rights under the Assumed Contracts, including unbilled Work in Process;

 

(iii)         the
Business Records;

 

(iv)         the
Customer Lists;

 

(v)          the
Supplier Lists;

 

(vi)         the
Other Current Assets;

 

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(vii)        the
Intellectual Property owned by Sellers used in the Business, in whole or in part;

 

(viii)       the
telephone and facsimile numbers used in the Business;

 

(ix)         the
Tangible Personal Property;

 

(x)          the
Inventory;

 

(xi)         prepaid
expenses, credits, security and other deposits, and rights to refunds or reimbursements, including, without limitation, those items
relating to the Purchased Assets and listed on Schedule 4.24  (collectively, the “Deposits”);

 

(xii)        all
of WPCS-Seattle’s right, title and interest in all software utilized or planned to be utilized by WPCS-Seattle in the operation
of the Business, except Microsoft Exchange Online and other email hosting services;

 

(xiii)       the
Permits, to the extent the same are transferable;

 

(xiv)        all
rights and interests to any covenant not to compete granted to WPCS-Seattle by any other Person; and

 

(xv)         all
other assets related to the Business, except the Excluded Assets.

 

(tt)          “Purchase
Price” means the consideration set forth in Section 2.4(a) below.

 

(uu)         “Related
Person” means any shareholder, director, officer or employee of WPCS-Seattle or any other direct or indirect beneficial
owner of WPCS-Seattle, any Person related to any such shareholder, director, officer, employee or beneficial owner by blood or
marriage, or any limited liability company, partnership, corporation, trust or other entity in which any such person has a substantial
interest as a member, partner, shareholder, trustee or otherwise.

 

(vv)         “Release”
means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, dumping
or disposing into the environment which could give rise to an Environmental Claim or which is required to be reported pursuant
to 40 C.F.R. 302 or 355, or any analogous Environmental Law.

 

(ww)         “Representative”
means any officer, director, principal, attorney, accountant, agent, employee or other representative of any Person.

 

(xx)         “Securities
Laws” means the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.

 

(yy)         “Supplier
Lists” means the benefit of all of WPCS-Seattle’s relationships with suppliers and all past and current supplier
lists and lists of potential suppliers of the Business (collectively, the “Suppliers”, and each a “Supplier”).

 

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(zz)          “Tangible
Personal Property” means all tangible personal property of the Business owned or leased by WPCS-Seattle or in which
WPCS-Seattle has any interest, including, without limitation, all Inventory, computer hardware, furniture and fixtures, transportation
equipment, vehicles, equipment, machinery, servers, ancillary equipment, parts, components, cosigned material, resale products,
leasehold improvements, tooling, supplies and other tangible assets, where ever located, together with any transferable manufacturer
or vendor warranties related thereto, including, without limitation, those listed on Schedule 1.1(zz).

 

(aaa)        “Tax”
means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, startup, occupation,
premium, windfall profits, environmental (including taxes under Code Section 59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), health, unemployment, disability, real property, personal property, intangible property,
sales, use, transfer, registration, value added, goods and services, alternative or add-on minimum, estimated, or other tax or
similar obligation of any kind whatsoever, including any interest, penalty or addition thereto, whether disputed or not.

 

(bbb)        “Tax
Liability” means liability for any Taxes owing by WPCS-Seattle to any Governmental Authority attributable to the
operations and activities of, or otherwise incurred by or existing with respect to, WPCS-Seattle for any period ending on or prior
to the Closing Date, including Taxes computed through the Closing Date with respect to any partial year on a closing-of-the-books
basis as if such partial year ended at the close of business on the Closing Date.

 

(ccc)        “Tax
Return” means any return, declaration, report, claim for refund or information return or statement relating to Taxes,
including any schedule or attachment thereto, and any amendment thereof.

 

(ddd)        “Transaction
Documents” means this Agreement, the Escrow Agreement and the bills of sale, assignments, instruments and other documents
described in Sections 3.1(a) and 3.2(b).

 

(eee)        “Work
in Process” means all work in process in connection with the Business, as of the Closing Date, under the Assumed
Contracts set forth on Schedule 1.1(eee), which the Parties acknowledge and agree specifically excludes any oral modifications
or change orders.

 

1.2           Usage
of Terms. Except where the context otherwise requires, words importing the singular number include the plural number and vice
versa. Use of the word “including” means “including, without limitation.”

 

1.3           References
to Articles, Sections, Exhibits and Schedules. All references in this Agreement to Articles, Sections (and other subdivisions),
Exhibits and Schedules refer to the corresponding Articles, Sections (and other subdivisions), Exhibits and Schedules of or attached
to this Agreement, unless the context expressly, or by necessary implication, otherwise requires.

 

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ARTICLE
2

PURCHASE AND SALE OF PURCHASED ASSETS

2.1           Transfer
of Purchased Assets. Subject to the terms and conditions contained in this Agreement, on the Closing Date, the Sellers, shall
sell, convey, transfer, assign and deliver, or cause to be sold, transferred, assigned and delivered, to Purchaser, and Purchaser
shall purchase and acquire from the Sellers, as applicable, all of the Purchased Assets, free and clear of any Encumbrances, and
the Sellers, as applicable, shall retain the Excluded Assets.

 

2.2           Assumed
Liabilities. On the Closing Date, Purchaser shall assume and agree to pay or perform in accordance with their terms the Assumed
Liabilities. Purchaser shall provide evidence to the Sellers as reasonably requested from time to time that the Assumed Liabilities
have been paid in full.

 

2.3           Excluded
Liabilities. On the Closing Date, Sellers shall retain and pay or perform in accordance with their terms the Excluded Liabilities,
and Purchaser shall not assume any obligation for or in respect of the Excluded Liabilities. The Sellers shall provide evidence
to Purchaser as reasonably requested from time to time that the Excluded Liabilities have been paid in full.

 

2.4           Consideration.

 

(a)          As consideration
for the sale, transfer, assignment, conveyance and delivery of the Purchased Assets, Purchaser shall pay Sellers an amount equal
to TWO MILLION SEVEN HUNDRED THIRTY THOUSAND ONE HUNDRED TWENTY-THREE Dollars ($2,730,123.00)
increased/decreased by (i) the amount by which the Estimated NABSV (as defined below) based on the Estimated Closing Date Balance
Sheet (defined below) is more/less than the Target NABSV (as defined below), and/or (ii) the Post-Closing Adjustment Amount (defined
below) (as so adjusted, the “Purchase Price”).

 

(b)          On the Closing
Date, Purchaser shall (i) deposit an amount equal to the Payroll Liabilities (calculated as of the last day of the calendar month
prior to the Closing Date) plus $250,000.00 (the “Escrowed Funds”) into an escrow account maintained by Sichenzia Ross
Friedman Ference LLP (the “Escrow Account”); and (ii) pay the balance of the Purchase Price to the Sellers
(the “Closing Payment”). The Escrowed Funds shall be held in accordance with the terms and conditions
set forth in the escrow agreement attached hereto as Exhibit 2.4(b) (the “Escrow Agreement”),
but shall provide for, without limitation, the payment of the Payroll Liabilities and to ensure the proper transfer of the Purchased
Assets and the transfer of title.

 

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2.5       Net Asset Balance
Sheet Value Adjustment.

 

(a)      Net Asset Balance
Sheet Value; Targeted Net Asset Balance Sheet Value. For purposes of this Agreement, “Net Asset Balance Sheet Value”
or “NABSV” means the total of (i) Accounts Receivable, furniture and fixtures, computers and software, office
equipment, machinery and equipment, vehicles and equipment and cost and estimated earnings in excess of billings, minus (ii) billings
in excess of cost and estimated earnings and Accounts Payable of the Sellers, in each case computed in accordance with GAAP and
consistent with historical practice; provided, however, that there shall be a five percent (5%) discount on Accounts Receivable
and a two percent (2%) discount on all Work in Process. For purposes of this Agreement, “Target Net Asset Balance Sheet
Value” or “Target NABSV” means $2,730,123, calculated on December 31, 2013 as set forth in the Target
NABSV attached hereto as Exhibit 2.5(a).

 

(b)      Estimated NABSV;
Preliminary NABSV Adjustment. Not less than ten (10) business days prior to the Closing Date, the Sellers shall provide to
Purchaser a calculation of the NABSV as of the last day of the calendar month prior to the Closing Date (the “Estimated
NABSV”), together with a copy of the balance sheet of the Company as of such date upon which such calculation is
based (the “Estimated Closing Date Balance Sheet”), which shall be prepared in a manner consistent with
the preparation of the Financial Statements and the Target NABSV, including schedules, the Payroll Liabilities and list of specific
asset categories as reasonably requested by Purchaser. The Sellers shall also deliver or, if requested by Purchaser, make available
to Purchaser at the offices of WPCS-Seattle in Redmond, Washington, any documents or materials necessary to determine the Estimated
NABSV, including without limitation the Accounts Receivables, Delinquent Receivables, Work in Process, Assumed Contracts and any
other materials reasonably requested by Purchaser. If Purchaser objects in any way either to the Sellers’ calculation of
the Estimated NABSV or the Estimated Closing Date Balance Sheet, then Purchaser shall notify the Sellers in writing of such objection
within seven (7) business days following its receipt of the Estimated NABSV. At the Closing, if the Estimated NABSV is more/less
than the Target NABSV, the Purchase Price shall be increased/decreased on a dollar-for-dollar basis in the amount of such shortfall
(the “NABSV Adjustment”).

 

(c)       NABSV; Resolution
Procedures. Not later than forty (40) days after the Closing Date, the Sellers shall prepare and deliver to Purchaser its calculation
of the NABSV as of the Closing Date (the “Closing Date NABSV”), together with a copy of the balance sheet
upon which such calculation is based (the “Closing Date Balance Sheet”), which shall be prepared in a
manner consistent with the preparation of the Financial Statements and the Target NABSV, including schedules and list of specific
asset categories as reasonably requested by Purchaser. If Purchaser objects in any way either to the Sellers’ calculation
of the Closing Date NABSV or to the Closing Date Balance Sheet, then Purchaser shall notify the Sellers in writing of such objection
within thirty (30) days following its receipt of the Closing Date NABSV. If, for any reason, Purchaser fails to give the Sellers
notice of any such objection within such 30-day period, then, for purposes of this Section 2.5(c), the Sellers’ calculation
of the Closing Date NABSV shall be deemed to be the actual NABSV and shall be used as the basis for making any further adjustments
to the Purchase Price described in Section 2.5(d). If, however, Purchaser notifies the Sellers of such an objection within
such 30-day period, then the Sellers and Purchaser shall, for a period of time not to exceed ten (10) days (unless otherwise agreed
in writing by the Parties) after the date upon which the Sellers receives Purchaser’s objection notice (such period of time
being hereinafter referred to as the “Resolution Period”), work together diligently and in good faith
to resolve any and all such objections. If, at or before the end of the Resolution Period, the Sellers and Purchaser resolve their
disputes regarding the calculation of the Closing Date NABSV or the Closing Date Balance Sheet, as applicable, then the calculation
of the Closing Date NABSV as so agreed to by the Sellers and Purchaser shall be deemed to be the actual NABSV and shall be used
as the basis for making any further adjustments to the Purchase Price described in Section 2.5(d). If, at the end of the
Resolution Period, the Sellers and Purchaser have not resolved their disputes regarding the calculation of the Closing Date NABSV
or the Closing Date Balance Sheet, as applicable, then such disputes shall, within two (2) days after the expiration of the Resolution
Period, be submitted to EisnerAmper (the “Independent Accounting Firm”) for final determination. The
Independent Accounting Firm shall only have the authority to resolve matters expressly submitted to it for resolution. The Parties
shall each pay fifty percent (50%) of the costs and expenses of the Independent Accounting Firm and be responsible, at each Party’s
sole cost and expense, for any attorneys’ fees and other expenses incurred by such Party in its calculation of the Closing
Date NABSV. The Independent Accounting Firm’s resolution of any disputes hereunder shall be made within thirty (30) days
of the submission of such dispute thereto, shall be set forth in a written statement delivered to the Sellers and Purchaser, shall
be conclusive and binding on the Parties for all purposes and shall be used as the basis for making any further adjustments to
the Purchase Price described in Section 2.5(d).

 

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(d)      Further Adjustment
to Purchase Price. The “Post Closing Adjustment Amount” (which may be a positive or negative number)
will be equal to the amount determined by subtracting the Closing Date NABSV, as determined pursuant to Section 2.5(c),
from the Purchase Price paid at Closing, as determined pursuant to Section 2.5(b). If the Post Closing Adjustment Amount
is positive, then the Sellers, jointly and severally, shall pay to Purchaser an amount equal to the Post Closing Adjustment Amount.
If the Post Closing Adjustment Amount is negative, the Purchaser shall pay to the Sellers an amount equal to the Post Closing Adjustment
Amount. Any amounts owed to the Sellers or Purchaser, as applicable, pursuant to this Section 2.5(d) shall be paid to the
Sellers or Purchasers, as applicable, within three (3) days of the final determination thereof (the “Adjustment Date”)
by wire transfer of immediately available funds, cashier’s check or certified check.

 

(e)       The Sellers and Purchaser
agree to treat any payments made pursuant to Section 2.5(d) as an adjustment to the NABSV Adjustment and the Purchase Price
for all Tax purposes and to cooperate in connection with the preparation and filing of any Tax Return, claim for refund or other
required or optional filings relating to any Tax matters related thereto, the preparation of any Tax audit related thereto, the
preparation of any Tax protest related thereto or the prosecution or defense of any Proceeding relating to any such Tax matters,
in each case in accordance with Section 6.9.

 

2.6           Taxes;
Proration.   Sellers will be responsible for the payment of any sales, use, transfer, excise, stamp or other similar Taxes and
all recording fees and similar charges imposed by reason of the transfer of the Purchased Assets pursuant to this Agreement and
any deficiency, interest or penalty with respect to such Taxes. Sellers shall promptly remit (without delay or extension) the same
to the applicable taxing authorities and provide evidence to Purchaser as reasonably requested from time to time that such Taxes
have been paid in full. Seller agrees to notify Purchaser promptly of receipt of any bills or other communications relating to
such Taxes, fees and charges and shall prepare and file, and shall fully cooperate with the other Parties with respect to the preparation
and filing of, any returns or other filings relating to such Taxes, fees and charges.

 

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2.7           Allocation
of Purchase Price. The Purchase Price shall be allocated as set forth on Schedule 2.7 hereto in accordance with Section
1060 of the Code. Each of the Parties hereto agrees to prepare and file all tax returns (including IRS Form 8594) in a manner consistent
with such allocation and to report this transaction for Federal and State income tax purposes in accordance with such allocation
of the Purchase Price and shall use their reasonable efforts to sustain such allocation in any subsequent tax audit or dispute.

 

ARTICLE
3

CLOSING

 

3.1           Closing.
The closing of the transactions contemplated by this Agreement will be held at 10:00 a.m. local time on the Closing Date at the
offices of WPCS-Seattle in Redmond, Washington or any other place as Purchaser and Sellers shall mutually agree (the “Closing”).
The Closing will be effective as of 11:59 p.m. eastern time on the Closing Date.

 

(a)           Conveyances
at Closing. Upon the terms and conditions contained in this Agreement, on the Closing Date, Sellers shall deliver to Purchaser
(i) one or more bills of sale conveying in the aggregate all of the Purchased Assets, (ii) one or more assignments of the Intellectual
Property owned by Sellers or used in the Business in recordable form, (iii) one or more assignments of the Assumed Contracts of
Sellers, (iv) such other instruments as are reasonably requested by Purchaser to enable title to vest in Purchaser in and to the
Purchased Assets in accordance with the provisions of this Agreement and (v) such other documents and agreements as are contemplated
in Article 8 of this Agreement.

 

(b)          All
of such instruments will be in form and substance, and will be executed and delivered in a manner, reasonably satisfactory to Purchaser
and Sellers, but will not diminish the status of title to the Purchased Assets required to be delivered pursuant to this Agreement.

 

3.2           Assumptions
at Closing.

 

(a)           Upon
the terms and conditions contained in this Agreement, on the Closing Date, Purchaser will deliver to Sellers (i) one or more bills
of sale acquiring in the aggregate all of the Purchased Assets, (ii) one or more assignments of the Assumed Contracts of Sellers,
(iii) an assumption of the Assumed Liabilities, (iv) such other instruments of assumption evidencing Purchaser’ assumption
of the Assumed Liabilities as Sellers reasonably deem necessary and (v) such other documents and agreements as are contemplated
by Article 7 of this Agreement.

 

(b)           All
such instruments will be in form and substance, and will be executed and delivered in a manner, reasonably satisfactory to Sellers
and Purchaser, but will not increase or decrease the Assumed Liabilities required to be assumed by Purchaser pursuant to this
Agreement.

 

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3.3           Certificates
and Other Document. Each of the Parties shall deliver or cause to be delivered the certificates and other documents and items
described in Articles 6, 7 and 8.

 

3.4           Non-Transferable
Assets. The Parties understand and agree that certain Purchased Assets may not be immediately transferable or assignable to
Purchaser, and Purchaser may in its sole discretion allow Sellers to retain certain of such assets after the Closing Date (the
“Non-Transferable Assets”), and this Agreement will not constitute an assignment of any such Non-Transferable
Assets. In such event, (i) Sellers shall use their best efforts to obtain any consent or authorization which may be required to
transfer or assign the Non-Transferable Assets to Purchaser or to remove or eliminate any impediment preventing the transfer or
assignment of the Non-Transferable Assets to Purchaser, (ii) Sellers shall grant to Purchaser full use and benefit of its interest
in the Non-Transferable Assets to the extent permitted by the terms of or applicable to such Non-Transferable Assets, it being
the intent of the Parties that, to the extent not inconsistent with the foregoing, Purchaser shall have the benefit of the Non-Transferable
Assets as though it were the sole owner thereof, (iii) Sellers shall take all actions necessary to preserve the value of the Non-Transferable
Assets, (iv) Sellers shall not transfer or assign the Non-Transferable Assets to any Person other than Purchaser or Purchaser’s
assigns, (v) Sellers shall transfer or assign the Non-Transferable Assets to Purchaser at the earliest date, if any, on which such
transfer or assignment can be effected and (vi) subject to clauses (i) through (iv) above, Purchaser will be responsible for obligations
relating to such Non-Transferable Assets arising or occurring on or after the Closing Date as if they had been transferred or assigned
to Purchaser in accordance with the terms of this Agreement. Upon the request of Purchaser, Sellers shall enforce, for the account
and on behalf of Purchaser, any rights of Sellers arising under or in connection with any Non-Transferable Asset.

 

ARTICLE
4

REPRESENTATIONS AND WARRANTIES OF SELLERS

 

Except as set forth
under the corresponding section of the disclosure schedules delivered concurrently herewith (the “Disclosure Schedules”),
which Disclosure Schedules shall (i) be deemed a part hereof and shall qualify any representation, warranty or otherwise made herein
to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, each Seller, jointly and severally,
hereby represent and warrant to Purchaser, and acknowledges that such representations and warranties are material inducements to
Purchaser entering into this Agreement, as follows:

 

4.1           Organization
and Authority of Sellers to Conduct Business. Each Seller is duly organized, validly existing and in good standing under the
laws of the state in which it is incorporated. Schedule 4.1 sets forth each jurisdiction where each Seller is qualified
to do business. WPCS-Seattle is duly licensed or qualified to do business as a foreign corporation and is in good standing in all
States in which the character of the Purchased Assets or nature of the Business requires it to be so licensed or qualified and
in which the failure to qualify and be in good standing would not have a Material Adverse Effect on the Business, financial condition
or operations of WPCS-Seattle. WPCS-Seattle has full corporate power and authority to conduct the Business as it is presently being
conducted and to own, operate and lease its properties and assets therein, to execute and deliver this Agreement, to sell, convey,
transfer, assign and deliver the Purchased Assets to Purchaser and to consummate the transactions contemplated by this Agreement.

 

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4.2           Subsidiaries.
WPCS-Seattle has no subsidiaries and does not own, directly or indirectly, capital stock or other voting securities of any corporation
or other Person.

 

4.3           Power
and Authority; Binding Effect. Subject to any consents required under Sections 4.5 and 4.6 below, each Seller has all
necessary power and authority and has taken all action necessary to authorize, execute and deliver this Agreement and the Transaction
Documents, to consummate the transactions contemplated by this Agreement and the Transaction Documents, and to perform its obligations
under this Agreement and the Transaction Documents. Each Seller has delivered to Purchaser copies of all resolutions of such Seller’s
board of directors and/or shareholders with respect to the transactions contemplated by this Agreement and the Transaction Documents,
certified by the Secretary of such Seller in form reasonably satisfactory to counsel for Purchaser. Subject to any consents required
under Sections 4.5 and 4.6 below, no other action on the part of any Seller is required to authorize the execution and delivery
of this Agreement and the Transaction Documents and to consummate the transactions contemplated hereby. This Agreement and the
Transaction Documents has been duly executed and delivered by Sellers and constitutes a legal, valid and binding obligation of
each Seller enforceable in accordance with its terms, except as such enforcement may be limited by the Enforceability Limitations.

 

4.4           Title;
Condition of Tangible Personal Property.

 

(a)Sellers
have and at the Closing Purchaser will receive, good, valid and marketable title, free and clear of all Encumbrances to all of
the Purchased Assets except (a) liens for Taxes not yet due and payable, and (b) such imperfections of title, easements
and Encumbrances, if any, as are not material in character, amount or extent. The Purchased Assets, together with any properties,
assets and rights licensed or leased by Sellers and disclosed in Schedule 4.4(a), constitute all tangible and intangible
assets that Sellers have used, held or are necessary in connection with the operation of the Business as conducted on the date
hereof. There are no facts or conditions affecting any Purchased Assets which would reasonably be expected to materially interfere
with the current use, occupancy or operation of such Purchased Assets. Except as set forth on Schedule 4.4(a), Sellers have
conducted the Business only through Sellers and not through any other divisions or any direct or indirect subsidiaries and no part
of the Business is operated by Sellers through any entity other than Sellers.

 

(b)           The
Tangible Personal Property is operational and in a condition adequate and sufficient for use in the Business as it has been conducted
to date, ordinary wear and tear excepted.

 

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4.5           No
Conflict; Governmental Authorization; Required Filings and Consents.

 

(a)           Except
as set forth on Schedule 4.5(a), neither the execution, delivery and performance of this Agreement or the Transaction Documents
by any Seller nor the consummation of any of the transactions contemplated by this Agreement or the Transaction Documents do, or
will, directly or indirectly (with or without notice or lapse of time or both), (i) contravene, violate or conflict with any
Seller’s Charter Documents, (ii) result in any breach of, violate or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, terminate or cancel or give to others any rights of termination, acceleration
or cancellation of (with or without notice or lapse of time or both), any Contract, agreement, indenture or other instrument to
which any Seller is a party or by which the Business is bound, or (iii) result in the creation of an Encumbrance of any nature
whatsoever on any of the properties or Purchased Assets of any Seller or the Shareholder or materially affect the Business or (iv)
result in the termination of any material license, franchise, lease or permit to which any Seller is a party or by which it or
the Purchased Assets are bound.

 

(b)           The
execution and delivery of this Agreement and the Transaction Documents by each Seller does not, and the performance of this Agreement
and the Transaction Documents, the consummation of the transactions contemplated by the Agreement and the Transaction Documents
by such Seller will not, require any consent of or filing with or notification to, any Governmental Authority or any other Person.

 

4.6           Compliance
with Laws and Permits.

 

(a)            To
the Knowledge of the Sellers, except as set forth on Schedule 4.6(a), WPCS-Seattle has been at all times during the last
three (3) years, and WPCS-Seattle is now being, operated in compliance with applicable Governmental Requirements of the federal
government, the State of WPCS-Seattle’s incorporation and any State where WPCS-Seattle is qualified to do business, and are
not aware of any instances of non-compliance which could reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on WPCS-Seattle, the Business or the Purchased Assets of WPCS-Seattle, and no written notice has been received by
any Seller alleging such non-compliance. This Section 4.6 does not apply to environmental or pollution-related Governmental
Requirements or matters, it being the intent and agreement of the Parties that such matters be exclusively the subject of Section
4.21.

 

(b)          
Schedule 4.6(b) identifies all Permits issued in connection with the Business and currently in effect, and includes (i)
the Governmental Authority that issued the Permit, (ii) the expiration date of each Permit, and (iii) the fact that the Permit
is not transferable to Purchaser, if applicable. To the Sellers’ Knowledge, WPCS-Seattle holds and is in compliance with
all Permits and the Permits constitute all permits, consents, licenses, franchises, authorizations and approvals required, used
in the operation of or necessary to conduct the Business of WPCS-Seattle as currently conducted. All of the Permits are valid and
in full force and effect, no material violations have been experienced, noted or recorded and no material violations are expected,
and no Proceeding is pending or, to the Knowledge WPCS-Seattle, threatened to revoke or limit any of the Permits.

 

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4.7           Financial
Statements; Unknown Liabilities.

 

(a)            Sellers
have delivered to Purchaser the Financial Statements. The Financial Statements fairly present the financial condition and the results
of operations of Sellers as of their respective dates and for the periods then ended in accordance with GAAP consistently applied.
The books and records of Sellers from which the Financial Statements were prepared fairly reflect the assets, liabilities and operations
of Sellers and the Financial Statements are in conformity therewith.

 

(b)           There
are, and as of the Closing Date there will be, no liabilities or obligations of any nature, whether absolute, accrued, contingent,
known, matured, unmatured or otherwise, and whether or not required to be disclosed or provided for in financial statements in
accordance with GAAP, including without limitation, material unreserved negative contractual obligations, litigation or contingent
liabilities other than customary service and product warranty obligations, which are not material in nature, of WPCS-Seattle except
(i) liabilities and obligations reflected in the Financial Statements, (ii) liabilities relating to facts, circumstances or events
specifically disclosed on the Disclosure Schedules, and (iii) liabilities and obligations incurred between the date of the Interim
Financial Statements and the Closing Date in the ordinary course of the Business of WPCS-Seattle (none of which results from, arises
out of or relates to any breach of contract, breach of contractual warranty, tort, infringement or violation of Governmental Requirement).

 

4.8           Tax
Matters.

 

(a)           (i)
WPCS-Seattle has correctly and timely filed all Tax Returns that were required by law to be filed on or prior to the Closing Date,
(ii) to the best of the WPCS-Seattle’s Knowledge, as of the Closing Date, WPCS-Seattle will have in good faith withheld and
accrued or paid to the proper authority all Taxes required to have been withheld and accrued or paid, (iii) all such Tax Returns
were correct and complete in all material respects when filed, (iv) except as set forth on Schedule 4.8(a), WPCS-Seattle
is not currently the beneficiary of any extension of time within which to file any Tax Return and (v) no notice has been received
by Sellers and no claim has been made within the last five (5) years by any Governmental Authority with respect to the Business
or in a jurisdiction where WPCS-Seattle does not file Tax Returns that they are or may be subject to taxation by that jurisdiction.
There are no Encumbrances on any of the Purchased Assets that arose in connection with any failure (or alleged failure) to pay
any Tax, except for inchoate liens for Taxes not yet due and payable.

 

(b)           There
is no material dispute or claim concerning any Tax Liability arising from the Business or the Purchased Assets, either (i) claimed
or raised by any Governmental Authority in writing or (ii) as to which either Seller has Knowledge. Schedule 4.8(b) lists
all income Tax Returns filed with respect to the Business for any taxable period ended on or after April 30, 2013, indicates those
Tax Returns which have been audited, and indicates those Tax Returns that currently are the subject of audit. Sellers have delivered
to Purchaser correct and complete copies of all income Tax Returns, examination reports and statements of deficiencies assessed
against or agreed to by WPCS-Seattle for any taxable period ended on or after April 30, 2013.

 

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4.9           Intellectual
Property.

 

(a)            Schedule
4.9 lists all of the Intellectual Property that is owned by WPCS-Seattle or used in the conduct of the Business
as of the date of this Agreement. Except as set forth on Schedule 4.9 and except for standardized software generally available
to the public, Sellers own, free and clear of any Encumbrances, or have a right and/or license to use, as the case may be, all
Intellectual Property used by the Business.

 

(b)           Except
as provided in Schedule 4.9, no claim has been asserted or, to Sellers’ Knowledge, threatened in writing by
any Person, to the effect that (i) the Intellectual Property owned by WPCS-Seattle or used in the Business, or the manufacture,
use or sale of any products by the Business would infringe or infringes or misappropriates the Intellectual Property rights of
any Person, or (ii) challenging or questioning the validity or effectiveness of any license or agreement with respect to the Intellectual
Property owned by WPCS-Seattle or used in the Business. WPCS-Seattle has paid all filing fees, maintenance fees and other amounts
that have been required to be paid and that were due and owing as of the date hereof under applicable Government Requirements with
respect to the Intellectual Property owned by WPCS-Seattle or used in the Business, or under any Assumed Contract relating to the
Intellectual Property owned by WPCS-Seattle or used in the Business.

 

(c)            Except
as set forth on Schedule 4.9, to the Knowledge of Sellers, no Person nor such Person’s business or products has infringed,
or misappropriated any Intellectual Property owned by WPCS-Seattle or used in the Business, or currently is infringing, or misappropriating
any Intellectual Property owned by WPCS-Seattle or used in the Business.

 

(d)           To
Sellers’ Knowledge, no employee or consultant of WPCS-Seattle is subject to or otherwise restricted by any employment, nondisclosure,
assignment of inventions, non-solicitation of employees or non-competition agreement between such employee or consultant and a
third party that has been violated or will be violated as a result of any of the transactions contemplated by this Agreement.

 

(e)           Except
as provided in Schedule 4.9, WPCS-Seattle has not granted any license or otherwise transferred any Intellectual Property
owned by WPCS-Seattle or used in the Business to any Person, or agreed to indemnify any third party with respect to any alleged
infringement or misappropriation of any third party’s Intellectual Property by WPCS-Seattle or the Business. Except as provided
in Schedule 4.9, no Seller is bound by or a party to any options, licenses or Contracts of any kind relating to the Intellectual
Property rights of any other Person, except for standardized licensed software generally available to the public.

 

4.10         Litigation.
Except as set forth on Schedule 4.10, currently there is, and during the last two (2) years there was, no Proceeding pending
or, to the Knowledge of Sellers, threatened (a) against WPCS-Seattle, or its properties, assets or business, or (b) relating to
the Business or the Purchased Assets or any director, officer or employee of WPCS-Seattle or which could impair or have a Material
Adverse Effect on the Business or the Purchased Assets or which could impair Sellers’ ability to execute, deliver and perform
their/its obligations hereunder.

 

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4.11         Labor
Matters.

 

(a)            Schedule
4.11(a) identifies for each current full and part time employee of Sellers, whether employed directly by WPCS-Seattle or by
WPCS, his or her (i) name, (ii) position or job title, (iii) hire date, (iv) his or her base compensation and bonus compensation
anticipated to be earned during the calendar year ending December 31, 2013 and for the period prior to the Closing Date, (v) his
or her current base compensation, (vi) a description of all employee perquisites or other benefit practices not set forth in WPCS-Seattle’s
Employee Benefit Plans or in agreements listed on Schedule 4.12, and (vii) a description of WPCS-Seattle’s severance
pay policy with respect to such employees.

 

(b)           Except
as set forth on Schedule 4.11(b), the Sellers represent and warrant that:

 

(i)           Sellers
have no obligations under any written or oral labor agreement, collective bargaining agreement or other agreement with any labor
organization or employee group and no labor unions or other organizations or groups represent or purport to represent any employees
of Sellers;

 

(ii)         Sellers
are not engaged in any unfair labor practice and there is no unfair labor practice charge or labor disputes or other employee-related
or employment-related complaint against Sellers pending or subject to any grievance, procedure, arbitration or litigation or, to
the Knowledge of Sellers, threatened before any Governmental Authority;

 

(iii)        WPCS-Seattle
is not experiencing, nor has WPCS-Seattle experienced during the two (2) years immediately preceding the date of the Agreement,
a labor strike, labor disturbance, slowdown, picketing, concerted refusal to work overtime, work stoppage or other material labor
dispute or arbitration, nor, to the Knowledge of Sellers, is any such labor strike, labor disturbance, slowdown, work stoppage
or other material labor dispute or arbitration threatened against WPCS-Seattle;

 

(iv)         No
organizational campaign is being conducted or, to the Knowledge of Sellers, contemplated and there is no pending or, to the Knowledge
of Sellers, threatened petition before any Governmental Authority or other dispute as to the representation of any employees of
WPCS-Seattle;

 

(v)          Each
employee of WPCS-Seattle is an employee “at will” other than those employees party to employment agreements as disclosed
on Schedule 4.18; and

 

(vi)         There
are no known claims against the Sellers by employees or former employees of the Business for unpaid wages or benefits, wrongful
termination, accidental injury or death, sexual harassment or discrimination or violation of any Governmental Requirement.

 

(c)           WPCS-Seattle
has complied with, and is currently in compliance with, all applicable Governmental Requirements relating to any of its employees
or consultants (including any Governmental Requirement of the Occupational Safety and Health Administration), and the Sellers have
not received within the past two (2) years any written notice of failure to comply with any such Governmental Requirement related
to the Business which has not been rectified.

 

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(d)           Except
as set forth on Schedule 4.11(d), WPCS-Seattle has not terminated the employment of any employee during the ninety (90)
days preceding the date of this Agreement, excluding voluntary resignation and termination for cause of the employees so indicated
on Schedule 4.11(d).

 

(e)           WPCS-Seattle
has complied, and will have complied up to the Closing, in all material respects with all laws affecting the employment relationship,
including without limitation, the Worker Adjustment and Retraining Notification Act of 1988, as amended (WARN), if applicable,
and applicable regulations under it with respect to any employment terminations before or on the Closing Date and Sellers will
indemnify Purchaser in the event that Purchaser is held liable for any failure by WPCS-Seattle to comply with any of its obligations
under WARN or this Section 4.11(e).

 

4.12         Employee
Benefits. With respect to the Employee Benefits:

 

(a)            Schedule
4.12 lists all written or oral (i) “employee benefit plans,” as defined in Section 3(3) of ERISA whether or not
subject to ERISA, (ii) all employee schemes, programs, policies, contracts and all bonus, incentive, fringe benefit, profit-sharing,
pension or retirement, deferred compensation, stock bonus, stock purchase, restricted stock, stock option or other equity based
arrangement, medical, life insurance, disability, accident, salary continuation, severance, accrued leave, vacation, sick pay,
sick leave, supplemental retirement and unemployment benefit plans, programs, arrangements, commitments and/or practices (whether
or not insured) for which Sellers make or are required to make payments, transfers, or contributions in respect of current or
former officers, directors or employees of WPCS-Seattle (or employees of WPCS who work primarily for WPCS-Seattle), and (iii)
employment, consulting, termination, change in control and severance policies, plans, programs, contracts or agreements, in each
case for active, retired or former officers, employees or directors of the Business (collectively, “Employee
Benefit Plans”) or with respect to which the Business would reasonably be expected to incur any liability.

 

(b)           To
the Knowledge of Sellers, each Employee Benefit Plan is in compliance with its terms and the requirements of any applicable Governmental
Requirement, except where the failure to comply will not have a Material Adverse Effect. WPCS-Seattle does not have any commitment
to create, modify or terminate any Employee Benefit Plan and has not communicated to any current or former employee, officer or
director of WPCS-Seattle any information or commitment to modify any Employee Benefit Plan or to establish or implement any other
employee retirement benefit or compensation arrangement.

 

(c)           Compliance;
Liability

 

(i)           No
Employee Benefit Plan is subject to Section 412 of the Code or Section 302 or Title IV of ERISA. None of the Purchased Assets is
subject to any lien in favor of, or enforceable by, the Pension Benefit Guaranty Corporation.

 

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(ii)         No
liability has been or is expected to be incurred by the Sellers under or pursuant to Title I or IV of ERISA or the penalty, excise
tax or joint and several liability provisions of the Code relating to employee benefit plans that would reasonably be expected,
following the Closing, to become a liability of Purchaser or of any employee benefit plan established or contributed to by Purchaser
and, to the Knowledge of Sellers, no event, transaction or condition with respect to any Employee Benefit Plan has occurred or
exists that would reasonably be expected to result in any such liability to the Business or, following the Closing, Purchaser .

 

(iii)        Each
of the Employee Benefit Plans has been operated and administered in all material respects in compliance with any applicable Governmental
Requirement, except for any failure so to comply that, individually or together with all other such failures, has not had and would
not reasonably be expected to result in a material liability or obligation on the part of the Business.

 

(iv)         There
are no outstanding liabilities of the Sellers with respect to any labor union-sponsored pension fund or any person employed by
a supplier of WPCS-Seattle regarding any labor union-sponsored pension funds for which Purchaser may have any liability.

 

(d)           No
Acceleration of Benefits.  Except as set forth in Schedule 4.12(d), the consummation of the transactions contemplated
by this Agreement will not by itself entitle any employee, officer or director or former employee, officer or director or any
independent contractor of the Business to severance or similar pay or accelerate the time of payment or vesting or trigger any
payment of funding (through a grantor trust or otherwise) or compensation or benefits under, increase the amount payable or trigger
any other material obligation pursuant to, any Employee Benefit Plan.  The consummation of the transactions contemplated
hereby will not (either alone or upon the occurrence of other acts or events) give rise to any payment or benefit to any employee,
officer or director that will alone or upon the occurrence of additional acts or events result in any payment that would, constitute
an “excess parachute payment” within the meaning of Section 280G or Section 4999 of the Code or the regulations promulgated
thereunder.

 

(e)           Except as set
for on Schedule 4.12, neither of the Sellers have ever maintained or contributed to, or had any obligation to contribute
to any, nor is any Employee Benefit Plan a, “multiple employer plan” (within the meaning of the Code or ERISA) or any
“multiemployer plan” (as defined in Section 4001(a)(3) of ERISA) as a result of which Purchaser could have any liability.

 

(f)            Each Employee
Benefit Plan intended to be qualified under Section 401(a) of the Code and the trust, if any forming apart thereof, is so qualified
and has received a favorable IRS determination letter as to the tax-qualified status of the plan and trust as to form under Section
501(a) of the Code, and nothing has occurred since the date of such determination letter that would reasonably be expected to adversely
affect such qualification or tax exempt status.

 

(g)           To the Knowledge
of Sellers, neither any Employee Benefit Plan, nor any other Person has engaged in a “prohibited transaction” as defined
in ERISA Section 406 or Code Section 4975, with respect to such Employee Benefit Plan, for which no individual or class exemption
exists.

 

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(h)            There are no Proceedings
pending or, to the Knowledge of Sellers, threatened (other than routine claims for benefits) with respect to any Employee Benefit
Plan, its related assets or trust, or any fiduciary, administrator or sponsor of such Employee Benefit Plan.

 

4.13        Transactions
with Related Persons.

 

(a)            Except
as set forth on Schedule 4.13, no Related Person is presently, or at any time during the past two (2) years has been, a
party to any transaction with WPCS-Seattle, including, without limitation, any Contract (a) providing for the furnishing of services
to or by, (b) providing for the rental or sale of real or personal property to or from, or (c) otherwise requiring payments to
or from (other than for services as employees of the Business) such Related Person. Except as set forth on Schedule 4.13,
all such transactions with Related Persons have been and are on an arms-length basis providing for substantially the same payment
and performance terms as would reasonably be expected to be negotiated with an independent third party. Except as set forth on
Schedule 4.13, there is no outstanding amount owing (including pursuant to any advance, note or other indebtedness instrument)
from WPCS-Seattle to any Related Person or from any Related Person to Seller.

 

(b)           No Related Person,
(i) owns, directly or indirectly, and whether on an individual, joint or other basis, any equity interest in (x) any
material property or asset, real or personal, tangible or intangible, used in or held for use in connection with or pertaining
to the Business other than the Purchased Assets, or (y) any Person, that is a Supplier, Customer or competitor of the
Business, or (ii) serves as an officer or director of any Person that is a Supplier, Customer or competitor of the
Business.

 

4.14        Real
Property.

 

(a)            WPCS-Seattle does
not, nor has it ever, owned any real property. Schedule 4.14 contains an accurate and complete list of all leases, subleases
and any other agreements relating to the use or occupancy of real property (collectively, the “Leases”),
including all amendments, supplements and other modifications thereto to which WPCS-Seattle is a party or bound or to which WPCS
is a party or bound with respect to property used by WPCS-Seattle in connection with the Business. WPCS-Seattle has delivered true
and correct copies of all leases currently in effect. Sellers, as applicable, have good valid and insurable title to all valid
leasehold interests in all leased real property described in each Lease set forth in Schedule 4.14 (or required to be set
forth in Schedule 4.14), free and clear of any and all Encumbrances. Each Lease is in full force and effect; all rents and
additional rents due to date on each such Lease have been paid; in each case, the lessee has been in peaceable possession since
the commencement of the original term of such Lease and is not in default thereunder and no waiver, indulgence or postponement
of the lessee’s obligations thereunder has been granted by the lessor; and there exists no default or event, occurrence,
condition or act (including the transfer of the Purchased Assets hereunder) which, with the giving of notice, the lapse of time
or the happening of any further event or condition, would become a default under such Lease. To the Knowledge of Sellers, and Sellers,
as applicable, have not violated and are not currently in violation of any of the terms or conditions under any such Leases in
any material respect, and, to the Knowledge of Sellers, all of the covenants to be performed by any other party under any such
Lease have been fully performed. Notwithstanding any other provision hereof, there shall be no transfer of any rights under any
Leases to Purchaser . Any rights to Leases shall be deemed to be part of the “Excluded Assets”.

 

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(b)           Current Use. 
To the Knowledge of Sellers, the use and operation of the real property leased by Sellers, as applicable, in the conduct of the
Business as currently conducted do not violate in any material respect any Governmental Requirement (except that compliance with
Environmental Laws is covered in Section 4.21), covenant, condition, restriction, easement, license, permit or agreement
or order of any Governmental Authority.

 

(c)           Conformance;
Proceedings.  Neither WPCS-Seattle nor WPCS (to the extent it involves the Business) has received any written notice of
a pending or anticipated change in any applicable building, zoning, subdivision and other land use and similar Governmental Requirement
affecting the leased real property described in the Leases that could reasonably be expected to have or result in a Material Adverse
Effect, or a material adverse effect upon the ownership, alteration, use, occupancy or operation of the leased real property or
any portion thereof.  No current use by Sellers, as applicable, of the leased real property described in the Leases is dependent
upon a nonconforming use or other governmental approval, the absence of which would materially limit the use, value, occupancy
or operation of the leased real property or other Purchased Assets of the Business.

 

(d)           Condemnation. 
Neither WPCS-Seattle nor WPCS (to the extent it involves the Business) have received any written notice from any Governmental Authority
of any pending, threatened or contemplated condemnation proceeding affecting the leased real property or any part thereof
or of any sale or other disposition of the leased real property or any portion thereof in lieu of condemnation.

 

(e)           No Option. 
Except as set forth on Schedule 4.14(e), neither WPCS-Seattle nor WPCS (to the extent it involves the Business) owns or
holds, and has not granted, and are not obligated, under any option, right of first offer, right of first refusal or other contractual
right to purchase, acquire, lease, sell or dispose of the leased real property or any portion thereof or interest therein or any
other real property, in each case, except as may be provided in the Leases.

 

4.15        Insurance.
There is set forth on Schedule 4.15 a list and brief description of all insurance policies on the date hereof held by the
Sellers with respect to WPCS-Seattle’s properties, assets and business, or on which they pay premiums, including, without
limitation, life insurance and title insurance policies, which description includes the premiums payable by it thereunder (“Insurance”)
and each such policy is currently in full force and effect and will be as of the Closing Date. All such insurance premiums in respect
of such coverage have been paid in full, or if not due, are properly accrued on the Financial Statements. All claims, if any, made
against WPCS-Seattle that are covered by such policies have been, or are being, settled or defended by the insurance companies
that have issued such policies. WPCS-Seattle is in material compliance with respect to its obligations under any insurance policy
maintained by it, and to Sellers’ Knowledge, WPCS-Seattle has never been denied insurance coverage. WPCS-Seattle has no self-insurance
or co-insurance programs. The insurance policies set forth on Schedule 4.15 are reasonable and customary for a business
of the size and nature of the Business.

 

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4.16        Accounts
Receivable; Delinquent Receivables. All of the Accounts Receivable set forth on Schedule 1.1(b) and the Delinquent Receivables
set forth on Schedule 1.1(r) are bona fide receivables, are reflected on the books and records of Sellers, arose in the
ordinary course of the Business and will be collected in the ordinary course of the Business consistent with past collection practices
at their full face value net of reserves for doubtful accounts. There is no right of offset against any of the Accounts Receivable
or the Delinquent Receivables and no agreement for deduction or discount has been made with respect to any of the Accounts Receivable
or Delinquent Receivables other than ordinary course trade discounts.

 

4.17        Accounts
Payable. The Accounts Payable set forth on Schedule 1.1(a) and reflected on the Financial Statements have arisen in
bona fide arm’s length transactions in the ordinary course of Business. Except as set forth on Schedule 4.17, there
are no unpaid invoices or bills representing amounts alleged to be owed by Sellers, or other alleged obligations of Sellers, relating
to WPCS-Seattle which Sellers have disputed or determined to dispute or refuse to pay.

 

4.18        Material
Contracts.

 

(a)           Schedule
4.18 sets forth a list of all Material Contracts. “Material Contracts” means all written or oral
Contracts to which WPCS-Seattle or WPCS (to the extent it involves the Business) is currently a party to or bound by and that constitute:

 

(i)           Any
Contract for the purchase of materials, supplies, goods, services, or personal property from any supplier or for the furnishing
of services to WPCS-Seattle that involve future aggregate annual payments by WPCS-Seattle or WPCS (to the extent it involves the
Business) of $25,000 or more;

 

(ii)         Any
Contract, customer orders, customer contracts, customer quotes, requests for proposals and requests for quotes of the Business
that involves performance of services or delivery of goods or materials by WPCS-Seattle of $25,000 or more;

 

(iii)        Any
non-competition agreement, profit-sharing agreement or any other agreement or obligation which purports to restrict the conduct
of any business by Sellers, or the ability of WPCS-Seattle to operate in any geographic area;

 

(iv)         Any
Contract or plans, including any employment, compensation, non-competition, non-solicitation, incentive, retirement, loan or severance
arrangements, with any current or former shareholder, director or officer or current employee of WPCS-Seattle or WPCS (to the extent
it involves the Business). Sellers hereby represent and warrant that the Sellers are not a party to any Contracts that provide
for the provision of any severance, benefit or any other payments by WPCS-Seattle, or WPCS (to the extent it involves the Business),
to its former employees;

 

(v)           Any
agreement, joint venture, product development, research and development, partnership, limited liability company or similar agreements
or arrangements involving a sharing of profits, losses, costs or liabilities by WPCS-Seattle with any other Person;

 

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(vi)         Indentures,
loan or credit agreements, security agreements and other agreements and instruments relating to the borrowing or guarantee of money
or extension of credit in any case in excess of $1,000;

 

(vii)        Any
standby letter of credit, performance or payment bond, guarantee arrangement or surety bond of any nature involving amounts in
excess of $1,000;

 

(viii)       Other
Contracts not in the ordinary course of business;

 

(ix)         Any
Contract for the sale or lease of any of the assets of WPCS-Seattle outside the ordinary course of the Business or for the grant
to any Person of any preferential rights to purchase or lease any of their assets;

 

(x)Any
Contract pursuant to which the transactions contemplated by this Agreement would amend or modify such Contract, or would trigger
the payment of revenues or fees to the counterparty of such Contract;

 

(xi)         Any
Contract (A) relating to the acquisition, issuance, voting, registration, sale or transfer of any securities, (B) providing any
Person with any preemptive right, right of participation, right of maintenance or any similar right with respect to any securities,
or (C) providing WPCS-Seattle with any right of first refusal with respect to, or right to repurchase or redeem, any securities;

 

(xii)        Any
Contract imposing any confidentiality obligation on WPCS-Seattle or containing “standstill” or similar provisions (A)
to which any Governmental Authority is a party or under which any Governmental Authority has a right or obligation, or (B) directly
or indirectly benefiting any Governmental Authority (including any subcontract or other contract between WPCS-Seattle and any contractor
or subcontractor to any Governmental Authority); or

 

(xiii)      Any
Contract or arrangement to allocate, share or otherwise indemnify for Taxes.

 

(b)           Except
as set forth on Schedule 4.18, (i) each Material Contract is, to the Knowledge of Sellers, valid and binding on each Seller,
as applicable, and, to the Knowledge of Sellers, each other party thereto, and is in full force and effect, except where such failure
to be valid and binding or to be in full force and effect would not, individually or in the aggregate, have a Material Adverse
Effect; (ii) Sellers and, to the Knowledge of Sellers, each other party thereto, have performed all material obligations required
to be performed by it to date under each Material Contract, except where such failure to perform would not result in a Material
Adverse Effect; and (iii) no Seller, to the Knowledge of Sellers, any other party thereto, has violated or defaulted in any material
respect or terminated or given or received notice of, any material violation or default or any termination under or non-renewal
of (nor, to the Knowledge of Sellers, does there exist any condition which with the passage of time or the giving of notice or
both would result in such a violation, default, termination or non-renewal under) any Material Contract, except where such violation
or default would not individually or in the aggregate, have a Material Adverse Effect. WPCS-Seattle has provided, or made available,
to Purchaser true and correct copies of each Material Contract, including any change orders or amendments thereto.

 

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4.19        Customers.
No Customer of the Business has informed Sellers that it intends to terminate or materially reduce its relationship with Seller,
and to the Knowledge of Sellers, there are no material problems or disputes with any Customer of the Business.  To the Knowledge
of Sellers, WPCS-Seattle has good business relationships with each of its Customers.  

 

4.20        Suppliers.
No Supplier of the Business has informed Sellers that it intends to terminate or materially reduce its relationship with Sellers,
and to the Knowledge of Sellers, there are no material problems or disputes with any Supplier of the Business. To the Knowledge
of Sellers, WPCS-Seattle has good business relationships with each of its Suppliers.

 

4.21        Environmental.
Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect:

 

(a)           WPCS-Seattle
is, and at all times WPCS-Seattle has been, in compliance with all applicable Environmental Laws with respect to the Purchased
Assets and the operation of the Business and has obtained and is in compliance with all applicable material environmental Permits
with respect to the Business or the Purchased Assets. WPCS-Seattle has not received any written communication, whether from a Governmental
Authority, citizens group, employee or otherwise, alleging a violation, liability or potential liability, that the Business is
not in such compliance, and, to the Knowledge of Sellers, there are no past or present actions, activities, circumstances, conditions,
events or incidents that are reasonably likely to prevent or interfere with such compliance in the future.

 

(b)           There
is no Environmental Claim pending or, to the Knowledge of Sellers, threatened, against WPCS-Seattle. All Hazardous Substances
at any time used, generated or disposed of by WPCS-Seattle have been disposed of in accordance with Environmental Laws.

 

(c)           There
are no past or present actions, omissions, activities, circumstances, conditions, events or incidents, including, without limitation,
the Release or presence of any Hazardous Substances, which could form the basis of any Environmental Claim against WPCS-Seattle.

 

(d)           WPCS-Seattle
has made available to Purchaser true, complete and correct copies and results of any reports, studies, analyses, tests or monitoring
possessed by WPCS-Seattle pertaining to Hazardous Substances in, on, beneath or adjacent to any property or assets currently or
formerly owned, operated, occupied or leased or used in connection with the Business, or regarding Seller’s compliance with
applicable Environmental Laws.

 

(e)           The
transactions contemplated hereunder require no notice or approval from any Governmental Authority with jurisdiction over the environment
in order to transfer control in any environmental Permit.

 

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4.22        Absence
of Certain Changes. From December 31, 2013 to the date hereof, except as set forth on Schedule 4.22, disclosed in the
Financial Statements or otherwise contemplated by this Agreement, Sellers have conducted the Business in all material respects
in the ordinary course and consistent with past practice and there has not been:

 

(a)           Any
material loss, damage or destruction to, or any material interruption in the use of, any of the assets of WPCS-Seattle (whether
or not covered by insurance) that constitutes a Material Adverse Effect;

 

(b)           Any
change in the business, financial condition or operations of WPCS-Seattle that has had a Material Adverse Effect;

 

(c)           Any
change relating to employees, including, without limitations, any increase in the compensation, granting of bonuses payable or
to become payable by the Sellers in connection with the Business, hiring of new employees except in the ordinary course of the
Business consistent with past practice;

 

(d)           Except
in the ordinary course of the Business, any sale or transfer or other disposition by WPCS-Seattle of any assets, Tangible Personal
Property or Intellectual Property, any mortgage or pledge or creation of any Encumbrance relating to any such property, any lease
of equipment or any cancellation of any debt or claim;

 

(e)           Any
change of the methods of accounting or accounting practices, business or manner of conducting business of Sellers or any other
event or development that has had, or would have individually or in the aggregate, a Material Adverse Effect;

 

(f)           Any
other transaction not in the ordinary course of the Business or not otherwise consistent with the past practices of WPCS-Seattle;

 

(g)           Any
material transactions with Affiliates of WPCS-Seattle, including without limitation WPCS, relating to the Business or the Purchased
Assets, which are not listed on Schedule 4.22 hereto;

 

(h)           Any
waiver by WPCS-Seattle of any right of material value;

 

(i)           Any
acquisition by Sellers of all of any part of the assets, properties, capital stock or business of any other Person;

 

(j)           Any
material change by WPCS-Seattle to its business policies regarding advertising, marketing, pricing, sales or returns;

 

(k)           Any
material expenditures by WPCS-Seattle in connection with the Business, except in the ordinary course of the Business;

 

(l)           Any
incurrence by WPCS-Seattle of any material debt in connection with the Business, except in the ordinary course of the Business;
or

 

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(m)           Any
dividend or distribution declared or paid on the capital stock of WPCS-Seattle.

 

4.23        Inventories.
Except as set forth on Schedule 4.23, (a) the Inventory is in the physical possession of Sellers, and (b) none of the
Inventory is pledged as collateral or held on consignment by others. The Inventory has been, determined and valued on a first-in
first-out basis (but not in excess of net realizable value), in accordance with GAAP, applied on a basis consistent with the Financial
Statements. The Inventory was acquired or produced by Sellers in the ordinary course of the Business. Except as reflected in the
reserve for unsalable or obsolete inventory reflected in the Financial Statements, the Inventory is good and merchantable and is
of a quality and quantity presently useable and salable by WPCS-Seattle in the ordinary course of the Business consistent with
past practice, except for such failures of inventory to meet standards or requirements as would not, individually or in the aggregate,
have a Material Adverse Effect.

 

4.24        Deposits.
Attached as Schedule 4.24 is a true, correct and complete list of all Deposits of WPCS-Seattle as of the date hereof, setting
forth the amount of each Deposit.

 

4.25        Backlog.
The value of WPCS-Seattle’s sales order backlog has not materially decreased since November 30, 2013.

 

4.26        No
Brokers. Sellers have not entered into any agreement, arrangement or understanding with any Person which will result in any
obligation by Purchaser to pay any finder’s fee, brokerage commission or similar payment in connection with the transactions
contemplated by this Agreement.

 

4.27        Product
Warranties. The Sellers have not undertaken any performance obligations or made any warranties or guarantees with respect
to any services performed by or goods provided by the Sellers other than those disclosed on Schedule 4.27.

 

4.28        Disclosure.
The inclusion of any item on any Disclosure Schedule shall constitute disclosure for all purposes under this Agreement and all
such information is deemed to be fully disclosed to Purchaser, and shall not be construed as an indication of the materiality or
lack thereof of such item.

 

ARTICLE
5

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Except as set forth
under the corresponding section of the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall
qualify any representation, warranty or otherwise made herein to the extent of the disclosure contained in the corresponding section
of the Disclosure Schedules, Purchaser represents and warrants to the Sellers, and acknowledges that such representations and warranties
are material inducements to the Sellers entering into this Agreement, as follows:

 

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5.1           Organization
and Good Standing. Purchaser is duly organized, validly existing and in good standing under the laws of the state in which
it is incorporated. Purchaser has full corporate power and authority to conduct its business as presently being conducted and to
own, operate and lease its properties and assets therein and to execute and deliver this Agreement, to purchase the Purchased Assets
which it is purchasing from the Sellers and to consummate the transactions contemplated by this Agreement.

 

5.2           Power
and Authority; Binding Effect. Purchaser has all necessary power and authority and has taken all action necessary to authorize,
execute and deliver this Agreement and the Transaction Documents, to consummate the transactions contemplated by this Agreement
and the Transaction Documents, and to perform its obligations under this Agreement and Transaction Documents. Purchaser has delivered
to Sellers copies of all resolutions of Purchaser’s board of directors and/or shareholders with respect to the transactions
contemplated by this Agreement and the Transaction Documents, certified by the Secretary of Purchaser, in form reasonably satisfactory
to counsel for Sellers. No other action on the part of Purchaser is required to authorize the execution and delivery of this Agreement
and to consummate the transactions contemplated hereby. This Agreement and the Transaction Documents have been duly executed and
delivered by Purchaser and constitutes a legal, valid and binding obligation of Purchaser, enforceable in accordance with its terms,
except as such enforcement may be limited by the Enforceability Limitations.

 

5.3           No
Conflict or Violation. Neither the execution, delivery and performance of this Agreement or the Transaction Documents by Purchaser,
nor the consummation of any of the transactions contemplated by this Agreement or the Transaction Documents do, or will, directly
or indirectly (with or without notice or lapse of time or both), (i) contravene, violate or conflict with Purchaser’s
Charter Documents, (ii) result in any breach of violate or constitute a default (or an event which with notice or lapse of time
or both would become a default) under, terminate or cancel or give to others any rights of termination, acceleration or cancellation
of (with or without notice or lapse of time or both), any contract, agreement, indenture or other instrument to which Purchaser
is a party, (iii) result in the creation of an Encumbrance of any nature whatsoever on any of the properties of Purchaser, or (iv)
result in the termination of any license, franchise, lease or permit to which Purchaser is a party.

 

5.4           Consents
and Approvals. No consent, approval or authorization of, or declaration, filing or registration with, any Person is required
to be made or obtained by Purchaser in connection with the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated by this Agreement, which consent, authorization or approval, declaration, filing or registration
has not been obtained or made on the date hereof.

 

5.5           No
Proceedings. There is no Proceeding pending or, to the knowledge of Purchaser, threatened against, relating to or affecting
in any adverse manner the transactions contemplated by this Agreement.

 

5.6           No
Brokers. Purchaser has not entered into any agreement, arrangement or understanding with any Person which will result in the
obligation to pay any finder’s fee, brokerage commission or similar payment in connection with the transactions contemplated
by this Agreement.

 

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5.7          No
Other Agreements. Purchaser has not entered into any agreement, arrangement, promise or understanding with the Sellers or with
any of Sellers’ current or former employees, agents, Representatives or Related Persons, which may or will result in the
remittance of any fee, commission, consideration, compensation, equity, security, “kickback”, or remuneration of any
nature to such persons, directly or indirectly, in connection with the transactions contemplated by this Agreement.

 

5.8          Insurance.
Purchaser has begun the process of obtaining insurance binders and will use its best efforts to have its insurance policies in
place as soon as practicable following the Closing. Purchaser shall present Sellers with copies of said policies upon receipt thereof.

 

5.9          Patriot
Act. Purchaser certifies that neither it nor any of its Affiliates has been designated, and is not owned or controlled, by
a “suspected terrorist” as defined in Executive Order 13224. Purchaser hereby acknowledges that the Sellers seek to
comply with all applicable laws concerning money laundering and related activities. In furtherance of those efforts, Purchaser
hereby represents, warrants and agrees that: (i) none of the Purchase Price paid or which will be paid to the Sellers has been
or shall be derived from, or related to, any activity that is deemed criminal under United States law; and (ii) no contribution
or payment by Purchaser or any of its Affiliates to the Sellers, to the extent that they are within Purchaser’s and/or its
Affiliates’ control shall cause the Sellers to be in violation of the United States Bank Secrecy Act, the United States International
Money Laundering Control Act of 1986 or the United States International Money Laundering Abatement and Anti-Terrorist Financing
Act of 2001. Purchaser agrees to provide Sellers any additional information regarding Purchaser or any of its Affiliates that the
Sellers reasonably request to ensure compliance with all applicable laws concerning money laundering and similar activities.

 

ARTICLE
6

COVENANTS and agreements

 

Sellers and Purchaser
each covenant and agree with the other as follows:

 

6.1          Consents.
Subject to Section 6.2(a) below, between the date of this Agreement and the Closing Date, the Parties will cooperate with
each other in obtaining the consents identified in Schedule 6.1 to this Agreement.

 

6.2          Cooperation.

 

(a)           Subject
to the terms and conditions of this Agreement, each Party shall each use its respective commercially reasonable efforts, in good
faith, to take or cause to be taken all action reasonably necessary or desirable on its part so as to permit consummation of the
transactions contemplated by this Agreement on or at the earliest reasonably practicable date including, without limitation, (i)
to authorize, approve or permit the full and complete sale, conveyance, assignment or transfer of Purchased Assets, free and clear
of any Encumbrances, and (ii) any consents or approvals of third persons as contemplated by Section 6.1, above. Without
limiting the generality of the foregoing, subject to the terms and conditions of this Agreement, each Party shall cooperate and
take such action and execute such other and further documents and instruments of transfer and assumption as reasonably may be requested
from time to time after the Closing Date by any other Party to carry out the transfer of the Purchased Assets and the Business
as contemplated by and otherwise effectuate the terms and provisions and intent of this Agreement. Subject to the terms and conditions
of this Agreement, no Party hereto shall knowingly take or fail to take any action that would substantially impair the prospects
of, or materially delay, completing the transactions contemplated by this Agreement.

 

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(b)           Unless
prohibited by applicable law, the Sellers, as applicable, shall give prompt notice to Purchaser, and Purchaser shall give prompt
notice to Sellers, of (i) the occurrence, or failure to occur, of any event known to it which occurrence or failure would
be reasonably likely to cause any representation or warranty contained in this Agreement to be untrue or inaccurate at any time
from the date hereof to the Closing Date such that the conditions set forth in Section 7.1 or Section 8.1, as applicable,
would not be met if such failure to be true or accurate were to occur or be continuing on the Closing Date, and (ii) any material
failure of any Party known to such Party, as the case may be, to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder, and each Party shall use commercially reasonable efforts to remedy such failure.

 

(c)           In
the event that this Agreement is terminated without the transactions contemplated hereby having been consummated, upon the request
of Sellers, Purchaser will and will cause its Representatives to promptly redeliver or cause to be redelivered, all copies of documents
and information furnished by Sellers, as the case may be, or their Representatives to such Party and their Representatives in connection
with this Agreement or the transactions contemplated hereby and destroy or cause to be destroyed all notes, memoranda, summaries,
analyses, compilations and other writings related thereto or based thereon prepared by Purchaser or its Representatives.

 

(d)           Each
Party shall provide and shall request its auditors to provide the other Party with such historical financial information regarding
it (and related audit reports and consents) as the other Party may reasonably request for disclosure purposes under the Securities
Laws.

 

6.3          Press
Releases. Sellers and Purchaser shall agree with each other in writing prior to Closing as to the form and substance of any
press release related to this Agreement, and shall consult each other as to the form and substance of other public disclosures
related thereto; provided, however, that nothing contained herein shall prohibit either Party, following notification to the other
Party or after the Closing, from making any disclosure which is required by any Governmental Requirement.

 

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6.4          Actions
Pending the Closing.

 

(a)           From
the date hereof until the Closing Date, and except as otherwise provided for by this Agreement, or consented to or approved by
Purchaser, Sellers shall operate the Business in the ordinary course and shall use commercially reasonable efforts to maintain
intact and preserve in all material respects Sellers’ business organization, the Purchased Assets, the Assumed Contracts,
their properties, the Business and their relationships with Customers, Suppliers, employees and other Persons in the usual, regular
and ordinary course in substantially the same manner as heretofore conducted. Sellers shall promptly notify Purchaser of any material
changes to the Business, or WPCS-Seattle’s operations, financial position, assets, Assumed Contracts or prospects. Should
any such fact or condition require any change in the Sellers’ disclosure schedules if the Sellers’ disclosure schedules
were dated the date of the occurrence or discovery of any such fact or condition, Sellers will promptly deliver to Purchaser a
supplement to the disclosure schedule specifying such change (the “Supplemental Disclosure Schedules”).

 

(b)           Without
limiting the generality of Section 6.4(a), above, from the date hereof until the Closing Date, Sellers shall not, except
with the prior written consent of Purchaser and except as expressly contemplated or permitted by this Agreement:

 

(i)           carry
on the Business other than in the usual, regular and ordinary course in substantially the same manner as heretofore conducted;

 

(ii)         incur
any indebtedness in an amount greater than $25,000 other than in the ordinary course of the Business;

 

(iii)        amend
their Charter Documents;

 

(iv)         waive
or release any material right or cancel or compromise any material debt or claim;

 

(v)           liquidate
or sell or dispose of any Purchased Assets or acquire any material assets other than inventory in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted;

 

(vi)         increase
the rate of compensation of, pay or agree to pay any bonus to, or provide any other employee benefit or incentive to, any of the
directors, officers or employees of WPCS-Seattle or directors, officers or employees of WPCS providing services to WPCS-Seattle,
except in a manner consistent with past practice or as required by law or contractual obligation in effect as of the date hereof;

 

(vii)        knowingly
take any action, or knowingly fail to take any action, that would render any representation, warranty, covenant or agreement in
this Agreement inaccurate or breached such that the conditions in Section 8.1 or Section 8.2 will not be satisfied;

 

(viii)       modify
any Assumed Contracts, including by a change order or oral modification, other than in the usual, regular and ordinary course;
or

 

(ix)         agree
or consent to do any of the foregoing.

 

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6.5          Sellers’
Employees.

 

(a)           Not
less than ten (10) business days before the Closing Date, the Sellers will deliver to Purchaser an updated schedule of Sellers’
employees with all of the information contained on Schedule 4.11(a). Purchaser may offer employment to such individuals
at Purchaser’s sole and absolute discretion. If Purchaser determines to offer employment to any such individuals, any such
employment shall be solely on an “at will” basis and Purchaser shall not have any obligation to continue employing
such employees for any length of time thereafter, except for Curtis LaChance with whom the Purchaser intends to enter into an Employment
Agreement.

 

(b)           The
Sellers will use all reasonable efforts to facilitate the transfer of the Sellers’ employees to Purchaser, and will waive,
or cause to be waived, any non-competition, non-solicitation or non-disclosure or similar obligations any such employee granted
to or for the benefit of the Sellers or any other agreement, arrangement or provision that would restrict the activities in which
such employees could engage in connection with their employment by Purchaser.  Notwithstanding any provision of this Agreement,
nothing herein shall confer on any employee any right to continued employment, except as may be provided by law or by agreement
between the Purchaser and any employees.

 

(c)           The
Sellers shall be responsible for any Payroll Liabilities arising out of the termination of any of its employees on or prior to
the Closing Date. The Sellers shall also remain fully responsible for any payroll, bonus, benefits, cost or liabilities, including
without limitation any union costs and liabilities, incurred or accrued prior to the Closing with respect to each employee that
may be retained by Purchaser.

 

(d)           As
of the Closing Date, the Sellers will terminate all of its employees and will pay each employee all wages, accrued bonuses and
commissions, and accrued vacation pay earned up to the time of termination, including overtime pay.

 

6.6          Non-Competition
and Confidentiality.

 

(a)           In
consideration of the Purchase Price and Purchaser’s covenants set forth in this Agreement, each Seller agrees that, for the
period beginning on the Closing Date and ending three (3) years thereafter, it will not directly or indirectly, participate, engage
in any business or activity which is, Directly Competitive with the Business.

 

(b)           For
a period of three (3) years beginning on the Closing Date, each Seller shall not in any manner, directly, indirectly, individually,
in partnership, jointly or in conjunction with any Person, (i) recruit or solicit or attempt to recruit or solicit, on its behalf
or on behalf of any other Person, any employee of Purchaser or an Affiliate of Purchaser, as an employee or consultant; (ii) encourage
any Person (other than Purchaser or an Affiliate of Purchaser ) to recruit or solicit any employee of Purchaser or an Affiliate
of Purchaser; (iii) otherwise encourage any employee of a Purchaser or an Affiliate of a Purchaser to discontinue his or her employment
by a Purchaser or an Affiliate of a Purchaser; (iv) solicit any customer of Purchaser, Sellers or an Affiliate of any Party who
is or has been a customer on or prior to the Closing Date for the purpose of providing, distributing, marketing or selling products
or services similar to those sold or provided by Purchaser; or (v) persuade or attempt to persuade any customer or supplier of
Purchaser or an Affiliate of Purchaser to terminate or modify such customer’s or supplier’s relationship with Purchaser
or an Affiliate of Purchaser.

 

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(c)           Each
Seller acknowledges that the covenants contained in this Section 6.6 were a material and necessary inducement for Purchaser
to agree to the transactions contemplated by this Agreement and that the Sellers realized significant monetary benefit, directly
or indirectly, from these transactions, and that a violation of any of the terms of this Section 6.6 will cause irreparable
and continuing damage to Purchaser, the amount of which will be impossible to estimate or determine and which cannot be adequately
remedied by an action at law. Therefore, Purchaser shall have the right to seek an injunction, restraining order or other equitable
relief, including, without limitation, specific performance, from any court of competent jurisdiction without posting a bond or
similar security in the event of any breach or attempted breach of this Section 6.6, and each Seller hereby consents to
the granting by any court of an injunction or other equitable relief, without the necessity of actual monetary loss being proved,
in order that the breach or threatened breach of such provisions may be effectively restrained. The rights and remedies provided
by this Section 6.6 are cumulative and in addition to any other rights and remedies which Purchaser may have hereunder or
at law or in equity or otherwise.

 

(d)           Each
Seller agrees that it shall not, and it shall take all commercially reasonable efforts to cause its directors, officers, employees
and shareholders and their Affiliates to not, use for itself or others, or publish, disclose or otherwise reveal or divulge, any
Confidential Information (as such term is defined below).  Each Seller shall, and shall take all commercially reasonable
efforts to cause its directors, officers, employees and shareholders and their Affiliates to, (1) maintain all Confidential Information
in the strictest confidence and keep the same secret using at least the same degree of care as it uses for its personal confidential
information, (2) retain all Confidential Information in trust in a fiduciary capacity for the sole and absolute benefit of Purchaser,
and (3) refrain from using or allowing to be used any Confidential Information for its own benefit or for the benefit of any third
party, provided, however, that in the event disclosure of Confidential Information is requested (i) by a Governmental Authority
under color of law or applicable regulation, (ii) pursuant to subpoena or other compulsory process, or (iii) otherwise as may
be required by law, each such Seller, to the extent lawfully possible, will (X) give Purchaser at least five (5) days prior written
notice before its disclosure, and (Y) provide Purchaser with copies of any written responsive materials. For purposes of this
Agreement, “Confidential Information” shall mean non-public information concerning the financial data,
strategic business plans, product development (or other proprietary product data), Customer Lists, customer information, Supplier
Lists, supplier information, costs, pricing, materials, supplies, venders, products, services, information relating to governmental
relations, discoveries, practices, processes, methods, marketing plans, Intellectual Property and other material non-public, proprietary
and confidential information of each Seller and the Shareholder relating to the Business or the Purchased Assets, that, in any
case, is not otherwise generally available to the public and has not been disclosed by Purchaser to others not subject to confidentiality
agreements.  Confidential information does not include information that (i) is already known to a Seller on a non-confidential
basis at the time of disclosure to such Seller; (ii) becomes known to a Seller from a source other than Purchaser, provided,
that, to the Knowledge of the Sellers, such source has not entered into a confidentiality agreement with Purchaser with
respect to such information or obtained the information from an entity or Person who is a party to a confidentiality agreement
with Purchaser, and without a breach of this Agreement or without a breach of duty owed by any other Person or entity to Purchaser;
(iii) is proven by competent evidence by a Seller that it was independently conceived or discovered by such Seller without
reference to or use of the Confidential Information; or (iv) has become publicly known and made generally available through no
wrongful act of a Seller.

 

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(e)          In
case any one or more of the terms or provisions contained in this Section 6.6 shall for any reason be held invalid, illegal
or unenforceable, such invalidity, illegality or unenforceability shall not affect any other terms or provisions hereof, but such
term or provision shall be deemed modified or deleted as or to the extent required by applicable law, and such modification or
deletion shall not affect the validity of the other terms or provisions of this Section 6.6 or any other terms or provisions
of this Agreement.  In addition, if any one or more of the restrictions contained in this Section 6.6 shall for any
reason be held to be unreasonable with regard to time, duration, geographic scope or activity, the parties contemplate and hereby
agree that such restriction shall be modified and shall be enforced to the extent compatible with applicable law.

 

6.7           Access
to Records and Personnel.

 

(a)          For
a period of six (6) years after the Closing Date, Sellers and their Representatives will have reasonable access to (including the
right to make copies of) all Business Records, including, without limitation, books and records of Sellers transferred to Purchaser
hereunder, relating to the Purchased Assets or the Business prior to the Closing Date and to all former employees of Sellers having
knowledge with respect thereto, to the extent that such access may reasonably be required in connection with matters relating to
(i) liabilities of Sellers not assumed by Purchaser hereunder, (ii) all matters as to which Sellers are required to provide indemnification
under this Agreement, or (iii) the preparation of any Tax Returns required to be filed by Sellers with respect to any periods prior
to the Closing. Such access will be afforded by Purchaser upon receipt of reasonable advance notice and during normal business
hours, provided such access does not unduly disrupt Purchaser’s normal business operations. Sellers will be solely responsible
for any costs or expenses incurred by it pursuant to this Section 6.7(a). If Purchaser wishes to dispose of any of such
Business Records, including, without limitation, books and records, prior to the expiration of the six-year period, Purchaser shall,
prior to such disposition, give Sellers 90 days’ written notice, at the expense of Sellers, to segregate and remove such
books and records as Sellers may select.

 

(b)          For
a period of six (6) years after the Closing Date, Purchaser and its Representatives will have reasonable access to (including the
right to make copies of) all of the Business Records, including, without limitation, books and records relating to the Purchased
Assets or the Business which Sellers or any of their Representatives are permitted to retain after the Closing Date. Such access
will be afforded by Sellers and their Representatives upon receipt of reasonable advance notice and during normal business hours.
Purchaser will be solely responsible for any costs and expenses incurred by it pursuant to this Section 6.7(b). If Sellers
or their Representatives wish to dispose of any of such Business Records, including, without limitation, books and records, prior
to the expiration of such six-year period, it shall, prior to such disposition, give Purchaser 90 days’ written notice, at
Purchaser’s expense, to segregate and remove such books and records as Purchaser may select.

 

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6.8           Continuation
Health Care Coverage. On and after the Closing, WPCS-Seattle will make available to all Qualified Individuals (as hereafter
defined) COBRA continuation health coverage. WPCS-Seattle also will notify any Qualified Individual of his or her right to obtain
COBRA continuation health coverage from WPCS-Seattle. For purposes of this Section 6.8, “Qualified Individual”
means any employee or qualified beneficiary of Seller who, prior to the date of Closing or as a result of the transactions contemplated
under this Agreement, has or had incurred a Qualifying Event (as defined by COBRA) and who has elected, or may elect to have COBRA
continuation coverage.

 

6.9           Cooperation
in Litigation and Taxes. The Sellers shall provide Purchaser, and Purchaser shall provide the Sellers, at no cost to either
party, with such cooperation as may reasonably be requested in connection with (a) the defense of any Proceeding relating to the
Purchased Assets or the Business whether existing on the Closing Date or arising thereafter out of, or relating to, an occurrence
or event happening on or prior to the Closing Date, or (b) Taxes relating to the Purchased Assets or the Business.

 

6.10         Accounts
Receivable; Delinquent Receivables.  At the Closing, all of the Accounts Receivable and Delinquent Receivables as of the
Closing Date shall become the sole property of Purchaser. Immediately following the Closing Date, the Sellers and Purchaser shall
jointly notify all Customers who have an outstanding balance with Sellers as of the Closing Date that all payments with respect
thereto shall be paid directly to Purchaser.  All monies received by Sellers on or subsequent to the Closing Date for services
rendered or products or goods delivered or provided on or prior to the Closing Date or arising from Purchaser’s ownership
and operation of the Purchased Assets until the Closing shall be held by Sellers for the benefit of Purchaser and paid over to
Purchaser within five (5) business days of receipt.  The Sellers shall hold all such funds as a fiduciary for Purchaser and
shall safeguard and transfer such funds to Purchaser, together with all statements and supporting documentation, within the time
limitations established hereby.   Purchaser and Purchaser’s accountant shall have access upon reasonable prior
notice during normal business hours to inspect and make and retain copies of Sellers’ relevant books and records relating
to the Accounts Receivables and the Delinquent Receivables for the purpose of ascertaining Sellers’ compliance with this
Section 6.10.

 

6.11         Licenses
and Permits. Sellers shall use their commercially reasonable best efforts to assist Purchaser in obtaining licenses and the
Permits to conduct the Business, if and to the extent necessary.

 

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6.12         Transition. 
For ninety (90) days following the Closing, the Sellers shall use their commercially reasonable efforts, at no cost to Sellers,
to encourage WPCS-Seattle Customers, clients, Suppliers, and other business associates to maintain the same business relationships
with Purchaser after the Closing as they maintained with Sellers prior to the Closing.  Immediately following the Closing
Date, Sellers and Purchaser jointly shall deliver a letter to each of WPCS-Seattle’s Customers, clients, suppliers, and other
business associates notifying them of the change in the ownership of the Business and Purchased Assets, and that all correspondence
and payments relating to the Business shall thereafter be delivered to Purchaser.  Sellers will refer to Purchaser all customer
inquiries and customer prospects relating to the Business of Sellers, including those received through Sellers’ website. 
Sellers agree to use their best efforts to take such actions as may be necessary to entitle Purchaser to use WPCS-Seattle’s
telephone and facsimile numbers, marketing collateral materials and business forms.  Sellers agree to provide access to WPCS-Seattle’s
Microsoft Exchange Servers to provide such services currently provided by WPCS-Seattle or its Affiliates to Sellers, including,
but not limited to remote email access and remote access to the estimating and accounting software systems as currently provided
to Sellers, and to forward to Purchaser any mail or e-mails received by them after the Closing that relate to the Purchased Assets,
the Assumed Liabilities or the operation of the Business after the Closing or otherwise properly relates to Purchaser and not the
Sellers. Purchaser agrees to forward to Sellers any mail or e-mails received by Purchaser after the Closing that relate to the
Excluded Assets or the Excluded Liabilities or otherwise properly relates to the Sellers and not Purchaser.

 

In addition, for a
period of thirty (30) days following the Closing, the Sellers shall provide Purchaser, at Sellers’ sole cost and expense,
with access to the property currently used by WPCS-Seattle in connection with the Business to allow Purchaser to remove the Purchased
Assets and to transition the Business. Such removal shall be done in such manner as to avoid any damage to such property. The Sellers
and Purchaser both agree to maintain appropriate insurance on the vehicles being purchased during such 30 day period. Purchaser
agrees to indemnify Sellers for any damage to such vehicles after the Closing Date of this Agreement.

 

6.13         Sellers’
Existence.  Until the Sellers have fully satisfied their obligations pursuant to this Agreement, Sellers shall continue
to validly exist as corporations, in good standing under the laws of the states of their incorporations, and the Sellers shall
take all necessary action, including the payment of any filing and other fees to maintain such existence.

 

6.14         Exclusivity.

 

(a)          From
the date hereof until the earlier of (i) the Closing Date, or (ii) the termination of this Agreement, Sellers and their Representatives,
officers, directors and shareholders shall not, directly or indirectly, engage in any negotiations concerning, or provide any Confidential
Information or data to, or have any discussions with, any Person relating to a proposed sale and purchase of the Business or the
Purchased Assets (a “Potential Acquisition”), or otherwise knowingly encourage or facilitate any effort
or attempt to make or implement a Potential Acquisition.

 

(b)          The
Sellers shall immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Person
conducted heretofore with respect to any Potential Acquisition. The Sellers agree that they will take the necessary steps to promptly
inform its/their Representatives of the obligations undertaken in this Section 6.14.

 

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ARTICLE
7

CONDITIONS
TO OBLIGATIONS OF SELLERS

 

The obligations of
Sellers to deliver the Purchased Assets and to consummate the transactions contemplated by this Agreement are subject to the satisfaction,
on or prior to the Closing Date, of each of the following conditions (any of which, in Sellers’ absolute and sole discretion,
may be waived in whole or in part without impairing or affecting any right of indemnification or other right or remedy under this
Agreement):

 

7.1           Representations
and Warranties. The representations and warranties of Purchaser set forth in Article 5 hereof shall be true and correct
in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date
(or on the date when made in the case of any representation and warranty which specifically relates to an earlier date), except
as otherwise contemplated by this Agreement or consented to in writing by Sellers.

 

7.2           Covenants.
Purchaser shall have in all material respects performed all obligations and complied with all covenants required by this Agreement
to be performed or complied with at or prior to the Closing Date.

 

7.3           No
Proceedings. No Proceeding will be pending, threatened or anticipated against Purchaser or Sellers seeking to enjoin, or adversely
affecting, the consummation of the transactions contemplated by this Agreement.

 

7.4           Payment.
Sellers shall have received the Closing Payment.

 

7.5           Escrow
Funds and Agreement. Purchaser shall have deposited the Escrowed Funds pursuant to the Escrow Agreement and Sellers will have
received the Escrow Agreement executed by Purchaser and the escrow agent.

 

7.6           NASDAQ
Approval. WPCS shall have been advised by the NASDAQ Stock Market (“NASDAQ”) that the transactions contemplated
hereby will not result in the delisting of the Company’s common stock from NASDAQ.

 

7.7           Stockholders’
Approval. The stockholders of WPCS shall have approved the transactions contemplated in this Agreement in accordance with Delaware
General Corporate Law.

 

7.8           Closing
Certificate. Purchaser shall have delivered to Sellers a certificate, dated the Closing Date and signed by Purchaser’s
respective chairman, chief executive officer, president, executive vice president or senior vice president to the effect that each
of the representations and warranties made by Purchaser in this Agreement are true and correct in all material respects (provided
that any representations and warranties qualified by materiality shall be true and correct in all respects) when made and on and
as of the Closing Date with the same effect as though such representations and warranties had been made or given on and as of the
Closing Date, and that Purchaser has performed and complied in all material respects with all of its obligations and covenants
under this Agreement which are to be performed or complied with by it on or prior to the Closing Date.

 

7.9           Closing
Documents. Purchaser shall have made or caused to be made delivery to Sellers of the items set forth in Section 3.2(a).

 

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7.10         Secretary’s
Certificate.  A certificate of the secretary of Purchaser certifying the signatures of all officers of Purchaser executing
this Agreement or any other agreement, document or instrument contemplated hereby and certifying as true and accurate the attached
copies of: (1) Purchaser’s articles of incorporation as in effect at the time of the Closing, (2) Purchaser’s bylaws
as in effect at the time of the Closing, and (3) resolutions approved by the board of directors of Purchaser, in their capacity
as such, authorizing the Agreement, the Schedules and Exhibits thereto and the transactions contemplated thereby.

 

7.11         Proceedings
and Documentation.  All corporate and other proceedings of Purchaser in connection with the transactions contemplated
by this Agreement, and all documents and instruments incident to such proceeding, shall be reasonably satisfactory in substance
and form to Sellers and Sellers’ counsel, and Sellers and Sellers’ counsel shall have received all such receipts, documents
and instruments, or copies thereof, certified if requested, to which Sellers are entitled and as may be reasonably requested.

 

7.12         Certificate
of Existence.  Purchaser shall have delivered to the Sellers a Certificate of Existence or Good Standing Certificate,
certified by the Secretary of State of Purchaser’s state of incorporation and dated not more than 10 days prior to the Closing
Date.

 

ARTICLE
8

CONDITIONS
TO PURCHASER’S OBLIGATIONS

 

The obligation of Purchaser
to consummate the transactions contemplated by this Agreement is subject to the satisfaction, on or prior to the Closing Date,
of each of the following conditions (any of which, in Purchaser’s absolute and sole discretion, may be waived in whole or
in part without impairing or affecting any right of indemnification or other right or remedy under this Agreement):

 

8.1           Representations
and Warranties. The representations and warranties of Sellers set forth in Article 4 hereof shall be true and correct
in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date
(or on the date when made in the case of any representation and warranty which specifically relates to an earlier date), except
as otherwise contemplated by this Agreement or consented to in writing by Purchaser.

 

8.2           Covenants.
Sellers shall have in all material respects performed all obligations and complied with all covenants required by this Agreement
to be performed or complied with at or prior to the Closing Date including, but not limited, obtaining the third-party consents
set forth on Schedule 6.1.

 

8.3           No
Proceedings. No Proceeding will be pending, threatened or anticipated against any Party seeking to enjoin, or adversely affecting,
the transactions contemplated by this Agreement.

 

8.4           Escrow
Agreement. Purchaser will have received the Escrow Agreement executed by the Sellers and the escrow agent.

 

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8.5           Seller
Closing Certificate. Each Seller shall have delivered to Purchaser a certificate, dated the Closing Date and signed by such
Seller’s respective chairman, chief executive officer, president, executive vice president or senior vice president to the
effect that each of the representations and warranties made by such Seller in this Agreement are true and correct in all material
respects (provided that any representations and warranties qualified by materiality shall be true and correct in all respects)
when made and on and as of the Closing Date with the same effect as though such representations and warranties had been made or
given on and as of the Closing Date, and that such Seller has performed and complied in all material respects with all of its obligations
and covenants under this Agreement which are to be performed or complied with by it on or prior to the Closing Date.

 

8.6           No
Material Adverse Effect. WPCS-Seattle shall not have, since the date of this Agreement, suffered any business interruption,
damage to or destruction of its properties, or other incident, occurrence, or event (other than the decision to enter into this
Agreement) that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect.

 

8.7           Closing
Documents. Sellers shall have made or caused to be made delivery to Purchaser of the items set forth in Section 3.1(a).

 

8.8           Seller
Secretary’s Certificate.  A certificate of the secretary of each Seller certifying the signatures of all officers
of each Seller executing this Agreement or any other agreement, document or instrument contemplated hereby and certifying as true
and accurate the attached copies of: (1) such Seller’s certificate of incorporation as in effect at the time of the Closing,
(2) such Seller’s by-laws as in effect at the time of the Closing, and (3) resolutions approved by the board of directors
and shareholders of such Seller, in their capacity as such, authorizing the Agreement, the Schedules and Exhibits thereto and the
transactions contemplated thereby.

 

8.9           Proceedings
and Documentation.  All corporate and other proceedings of each Seller in connection with the transactions contemplated
by this Agreement, and all documents and instruments incident to such proceedings, shall be reasonably satisfactory in substance
and form to Purchaser and Purchaser’s counsel, and Purchaser and Purchaser’s counsel shall have received all such receipts,
documents and instruments, or copies thereof, certified if requested, to which Purchaser are entitled and as may be reasonably
requested.

 

8.10         Consents. 
All required consents, permits and approvals shall have been obtained by Sellers.

 

8.11         Possession
of Assets.  Sellers shall have delivered to Purchaser all Customer Lists, Supplier Lists, Intellectual Property and other
items contemplated hereby so as to put Purchaser into full possession of all of the Purchased Assets, free and clear of any and
all Encumbrances.

 

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8.12         Certificate
of Existence.  Each Seller shall have delivered to Purchaser a Certificate of Existence or Good Standing Certificate,
dated not more than 10 days prior to the Closing Date and certified by the Secretary of State of (i) each Seller’s state
of incorporation and (ii) states in which such Seller is qualified to do business as a foreign corporation, provided that, such
foreign qualifications may be delivered by Sellers to Purchaser within three (3) business days after the Closing Date.

 

8.13         Key
Employees. Purchaser shall have negotiated acceptable employment arrangements with Curtis LaChance and such other employees
as Purchaser shall identify to the Sellers prior to the Closing Date.

 

8.14         Due
Diligence. Purchaser shall have concluded, in its sole and absolute discretion, that the Business, Purchased Assets, Assumed
Contracts, results of operation or condition (financial or otherwise) of the Sellers meet all of Purchaser’s requirements
and are in all respects satisfactory to Purchaser. By signing this Agreement, the Purchaser shall be deemed to shall have acknowledged
that they have satisfactorily completed their due diligence.

 

8.15         Supplemental
Disclosure Schedules. Purchaser shall have received and approved, in its sole and absolute discretion, the Supplemental Disclosure
Schedules (as defined in Section 6.4(a)).

 

8.16         Estimated
NABSV and Payroll Liabilities. Purchaser shall have received and approved, in its sole and absolute discretion, the Estimated
NABSV and the Payroll Liabilities calculated as of the last day of the calendar month prior to the Closing Date.

 

ARTICLE
9

SURVIVAL AND INDEMNIFICATIONS

 

9.1           Survival
of Representations, Warranties, Covenants and Agreements.

 

(a)          All
representations, warranties, agreements and indemnities of Sellers contained in this Agreement will survive the Closing Date; provided,
that no claim for any misrepresentation or breach of a representation or warranty may be asserted at any time after the second
anniversary of the date of this Agreement, except that (i)  any claim that any Seller engaged in a fraudulent activity, or
committed a fraud, may be asserted at any time, and (ii) a claim for any misrepresentation or breach of a representation or warranty
contained in Section 4.4(a) (Title), Section 4.8 (Tax Matters), Section 4.11 (Labor Matters), Section 4.12
(Employee Benefits) and Section 4.21 (Environmental) may be asserted until the expiration of the applicable statute of limitations
period (the period applicable to such representations and warranties shall be referred to as the “Claims Period”).
Any claim made by Purchaser with respect to the representations and warranties of Sellers and their predecessors contained in this
Agreement must be initiated by Purchaser during the applicable Claims Period. All of the representations and warranties of Sellers
contained in this Agreement will in no respect be limited or diminished by any past or future inspection, investigation, examination,
or possession on the party of Purchaser or its Representatives, except where Purchaser had actual knowledge that a representation
or warranty of Sellers was materially false when made.

 

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(b)          All
covenants and agreements of Sellers contained in this Agreement (including, but not limited to, the obligation of Sellers, as applicable,
to convey the Purchased Assets to Purchaser free and clear of any Encumbrance, the obligations of Sellers set forth in Section
3.4 hereof and the indemnification obligations of Sellers and the Shareholder set forth in Section 9.2) will survive
the Closing Date until fully performed or discharged.

 

(c)          All
representations and warranties of Purchaser contained in this Agreement will survive the Closing Date; provided, that no claim
for any misrepresentation or breach of a representation or warranty may be asserted at any time after the second anniversary of
the date of this Agreement. All covenants and agreements of Purchaser contained in this Agreement (including the indemnification
obligations of Purchaser set forth in Section 9.4) will survive the Closing Date until fully performed or discharged.

 

9.2           Indemnification
by Sellers.

 

(a)          Subject
to the terms and conditions contained in this Agreement, following the Closing, Sellers, jointly and severally (the “Seller
Indemnifying Party”), shall indemnify and hold harmless, Purchaser and its Affiliates and its respective Representatives,
officers, directors, employees, agents, successors and assigns (each a “Purchaser Indemnified Party”),
from and against any and all Losses, claims, damages, costs and expenses, interest, awards, judgments and penalties (including
reasonable attorneys’ and consultants’ fees and expenses and cost of investigation) actually suffered or incurred by
them, arising out of or resulting from:

 

(i)          Subject
to Section 9.1(a) above, the misrepresentation or breach of any representation or warranty made by any Seller contained
in this Agreement;

 

(ii)         the
breach of any covenant or agreement by any Seller contained in this Agreement or the nonfulfillment of any agreement or covenant
made by any Seller herein;

 

(iii)        any
debt liability or obligation of any Seller not included in the Assumed Liabilities;

 

(iv)        any
Employee Benefit Plan;

 

(v)         any
Environmental Claim or any violation of any Environmental Laws which occurred or relate to time periods or events on or prior to
the Closing Date;

 

(vi)        any
warranty claims brought against WPCS-Seattle with regard to services performed by or goods provided by WPCS-Seattle prior to the
Closing Date, except that there shall be no indemnification for a warranty claim related to Work in Process;

 

(vii)       any
liability, payment or obligation in respect of any Tax Liabilities owing by any Seller, or any of their predecessors of any kind
or description (including interest and penalties with respect thereto);

 

(viii)      the
use, operation, ownership and/or exploitation of the Purchased Assets and/or the Business on or prior to the Closing Date; or

 

    	43

    	 

    

 

(ix)         the
Excluded Assets, the Excluded Liabilities and the Excluded Contracts.

 

9.3           Limits
on Indemnification.

 

(a)          The
right of Purchaser to be indemnified pursuant to Section 9.2 shall be the sole and exclusive remedy with respect to any
Loss of whatever kind and nature, in law, equity or otherwise, known or unknown, which Purchaser have now or may have in the future,
including without limitation, any Losses attributable to any inaccuracy or breach of any representation or warranty to Purchaser
at or prior to Closing, or any failure to perform the covenants, agreements or undertakings contained in this Agreement, any Disclosure
Schedule or certificate delivered pursuant hereto or any agreement or other document contemplated hereby, other than as a result
of actual fraud by any Seller, and except as otherwise provided herein. The Parties acknowledge that (A) except as expressly provided
in Article 4, Sellers have not made and are not making any representations, warranties or commitments whatsoever regarding
the subject matter of this Agreement, express or implied, and (B) except as expressly provided in Article 4, Purchaser is
not relying and has not relied on, any representations, warranties, projections, assumptions or commitments whatsoever regarding
the subject matter of this Agreement, express or implied.

 

(b)          Without
limiting the effect of any other limitation contained in this Section 9.3, the indemnification provided for in this Article 9 shall
not apply, and Purchaser shall not be entitled to exercise any indemnification rights under this Agreement, except to the extent
that the aggregate amount of the Losses against which Purchaser would otherwise be entitled to be indemnified under this Article
9 exceeds $100,000 (the “Basket”). If the aggregate amount of such Losses exceeds the Basket, then Purchaser shall,
subject to the other limitations contained herein, be entitled to be indemnified for the entire amount of such Losses subject to
the Cap without regard to the Basket.

 

(c)          Except
as set forth in this Section 9.3(c), Sellers’ indemnity obligations for Losses under this Article 9 shall be
limited, in the aggregate, to 100% of the Purchase Price, as adjusted (the “Cap”), except in the case
of fraud, intentional misrepresentation, intentional breach of representation or warranty or with respect to Section 4.4(a)
hereof, which shall be unlimited. The sum of any amounts paid from the Escrowed Funds to Purchaser in connection with any Losses
under this Article 9 shall be counted towards the Cap for the purposes of this Article 9.

 

(d)          Nothing
in this Section 9.3 shall limit any remedy any Purchaser may have against any Seller for fraud committed by such Seller
or the Shareholder under applicable laws.

 

9.4           Indemnification
by Purchaser. Subject to the terms and conditions contained in this Agreement, following the Closing, Purchaser (the “Purchaser
Indemnifying Party”) shall indemnify and hold harmless, Sellers and their Affiliates and their respective Representatives,
officers, directors, employees, agents, successors and assigns (each a “Seller Indemnified Party”) from
and against any and all Losses claims, damages, costs and expenses, interest, awards, judgments and penalties (including reasonable
attorneys’ and consultants’ fees and expenses and costs of investigation), actually suffered or incurred by them, arising
out of or resulting from:

 

    	44

    	 

    

 

(a)          the
misrepresentation or breach of any representation or warranty made by Purchaser contained in this Agreement, including, without
limitation, Purchaser’s failure to satisfy any requirements of the Assumed Liabilities subsequent to the Closing Date provided
for hereunder;

 

(b)          the
breach of any covenant or agreement by Purchaser contained in this Agreement or nonfulfillment of any agreement or covenant made
by Purchaser herein; or

 

(c)          the
use, operation, ownership and/or exploitation of the Purchased Assets by Purchaser subsequent to the Closing Date.

 

9.5           Notice
of Loss; Third Party Claims.

 

(a)          Subject
to Section 9.1 above, in the event that an Indemnified Party proposes to make a claim for indemnification pursuant to Sections
9.2 or 9.4 hereof (other than a Third Party Claim as discussed below), the Indemnified Party will deliver, on or prior to the
date upon which the applicable representations, warranties, indemnities or covenants may be asserted pursuant to Section 9.1,
written notice to the Indemnifying Party which states (i) that a Loss has occurred, (ii) the provisions of this Agreement in respect
of which such right of indemnification is claimed or arises, and (iii) each individual item of Loss or other claim, in reasonable
detail, including the amount and date of such Loss (to the extent reasonably ascertainable).

 

(b)          If
the Indemnified Party shall receive notice of any action, audit, demand or assessment (each, a “Third Party Claim”)
against it or which may give rise to a claim for indemnification pursuant to Sections 9.2 or 9.4, the Indemnified Party
shall promptly give the Indemnifying Party written notice of such Third Party Claim; provided, however, that the failure to provide
such written notice shall not release the Indemnifying Party from any of its obligations under this Article 9 except to
the extent that the Indemnifying Party is materially prejudiced by such failure (but in no event shall any such failure or delay
extend the Claims Period set forth in Section 9.1 above).

 

(c)          If
the Indemnifying Party acknowledges in writing its obligation to indemnify the Indemnified Party hereunder against any Losses that
may result from such Third Party Claim, then the Indemnifying Party shall be entitled to assume and control the defense of such
Third Party Claim at its expense and through counsel of its choice if it gives notice of its intention to do so to the Indemnified
Party within 10 days of the receipt of such notice from the Indemnified Party; provided, however, that if there exists or is reasonably
likely to exist a conflict of interest that would, in the reasonable judgment of counsel to the Indemnifying Party, make it inappropriate
for the same counsel to represent both the Indemnified Party and the Indemnifying Party, then the Indemnified Party shall be entitled
to retain its own counsel in each jurisdiction for which the Indemnified Party determines counsel is required at the expense of
the Indemnifying Party and such counsel shall be entitled to full participation in the defense of or prosecution of counterclaims
related to any such claim and the Indemnifying Party shall direct its counsel to reasonably cooperate in connection therewith.
If the Indemnifying Party does not acknowledge in writing its obligation to indemnify the Indemnified Party hereunder against any
Losses that may result from such Third Party Claim within 10 days, or the Indemnifying Party fails or refuses to promptly assume
and defend such Third Party Claim, then the Indemnified Party shall be entitled to assume and control the defense of such Third
Party Claim at the Indemnifying Party’s expense and through counsel of the Indemnified Party’s choice.

 

    	45

    	 

    

 

(d)          Notwithstanding
anything herein to the contrary, in the event of any Third Party Claim brought by, on behalf of or for the benefit of any Affiliate
of the Indemnifying Party, then the Indemnified Party shall control the defense thereof, at the expense of the Indemnifying Party,
notwithstanding the Indemnifying Party’s obligation to indemnify the Indemnified Party therefor.

 

(e)          In
the event that the Indemnifying Party exercises the right to undertake any such defense against any such Third Party Claim as provided
above, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying
Party, at the Indemnifying Party’s expense, all witnesses, pertinent records, materials and information in the Indemnified
Party’s possession or under the Indemnified Party’s control relating thereto as is reasonably required by the Indemnifying
Party. Similarly, in the event the Indemnified Party is, directly or indirectly, conducting the defense against any such Third
Party Claim, the Indemnifying Party shall cooperate with the Indemnified Party in such defense and make available to the Indemnified
Party, at the Indemnifying Party’s expense, all such witnesses, records, materials and information in the Indemnifying Party’s
possession or under the Indemnifying Party’s control relating thereto as is reasonably required by the Indemnified Party.
No such Third Party Claim may be settled by the Indemnifying Party or Indemnified Party without the prior written consent of the
other, which shall not be unreasonably withheld or delayed.

 

ARTICLE
10

MISCELLANEOUS

 

10.1         Termination.

 

This Agreement may be
terminated:

 

(a)          At
any time on or prior to the Closing Date, by the mutual consent in writing of the Parties hereto;

 

(b)          At
any time on or prior to the Closing Date, by Purchaser in writing if any Seller has, or by Sellers in writing if Purchaser has,
in any material respect, breached (a) any material covenant or agreement contained herein or (b) any material representation
or warranty contained herein, and in either case (x) such breach has not been cured within ten (10) days after the date on which
written notice of such breach is given to the Party committing such breach and (y) such breach would entitle the non-breaching
Party not to consummate the transactions contemplated hereby;

 

    	46

    	 

    

 

(c)          At
any time, by any Party hereto in writing, if any Governmental Authority of competent jurisdiction shall have issued a final, nonappealable
order enjoining or otherwise prohibiting the transactions contemplated herein;

 

(d)          By
any Party hereto in writing, if the Closing Date has not occurred by May 31, 2014, unless the failure of the Closing to occur by
such date shall be due to the failure of the Party seeking to terminate this Agreement to perform or observe the covenants and
agreements set forth herein.

 

10.2         Effect
of Termination. In the event this Agreement is terminated pursuant to Section 10.1, this Agreement shall become void
and have no effect, except that (a) the provisions relating to confidentiality set forth in Section 6.7(c), (d) and (e)
shall survive any such termination, and (b) a termination pursuant to Section 10.1(b) shall not relieve the breaching
Party from liability for an uncured willful breach of such covenant or agreement or representation or warranty giving rise to such
termination.

 

10.3         Waiver.
Except where not permitted by applicable Governmental Requirements, Purchaser and Sellers, by written instrument signed by such
Party, may at any time extend the time for the performance of any of the obligations or other acts of Sellers, on the one hand,
or Purchaser, on the other hand, and may waive (a) any inaccuracies of such Parties in the representations or warranties contained
in this Agreement or any document delivered pursuant hereto or thereto, (b) compliance with any of the covenants, undertakings
or agreements of such Parties, or satisfaction of any of the conditions precedent to its obligations, contained herein or (c) the
performance by such Parties of any of its obligations set out herein or therein. No such waiver or extension shall be effective
unless specifically made in writing and any waiver by a Party of any breach of or failure to comply with any of the provisions
of this Agreement by the other Party shall not be construed as, or construe a continuing waiver of, or a waiver of any other breach
of, or failure to comply with, any other provision of this Agreement.

 

10.4         Further
Assurances. Both before and after the Closing Date, each Party will cooperate in good faith with each other Party and will
take all appropriate action and execute any agreement, instrument or other writing of any kind which may be reasonably necessary
or advisable to carry out and confirm the transactions contemplated by this Agreement.

 

    	47

    	 

    

 

10.5         Risk
of Loss. Risk of loss with respect to any property or assets of Sellers, as applicable, will be borne by Sellers, as applicable,
at all times prior to the Closing and will pass to Purchaser only upon transfer to Purchaser at Closing of title to the Purchased
Assets; notwithstanding the foregoing, risk of loss with respect to any Non-Transferable Assets will also pass to Purchaser at
Closing. If any of the Tangible Personal Property is lost, damaged or destroyed by fire, theft, casualty or any other cause or
causes prior to the Closing (a “Casualty”), Sellers shall promptly notify Purchaser in writing of such
Casualty and the details thereof and shall answer promptly any reasonable requests from Purchaser for details or information. Purchaser
shall thereafter proceed with the Closing, except that in the event of a Casualty to the Tangible Personal Property, the Purchase
Price will be reduced by the dollar amount (based upon replacement value) of the Casualty loss (and any insurance proceeds received
or receivable as a result of such Casualty will be payable to Sellers); provided, however, that if such Casualties materially interfere
or have a Material Adverse Effect, in Purchaser’s reasonable discretion, with the operation of or on the Business, Purchaser
may terminate this Agreement. Purchaser must exercise its option to terminate by written notice to Sellers within fifteen (15)
days or the number of days remaining to the Closing, whichever is less, after the later of Purchaser receiving (a) written
notice of any such Casualty and (b) satisfactory responses to all of its reasonable requests, if any, for details or information.
If this Agreement is not terminated by Purchaser pursuant to this Section 10.5 and if Purchaser and Sellers are unable to
agree as to the dollar amount of the loss (based upon replacement value) or the insurance proceeds to be recovered, the Parties
shall proceed with the Closing as scheduled, except that Purchaser shall place in escrow (to be held pending agreement as to the
final amount) an amount (based upon estimated replacement value of the damaged or destroyed property) as determined by a firm selected
by independent accountants to be agreed upon by the Parties (the “Casualty Amount”). The Casualty Amount
shall be held in escrow until the dispute has been resolved following the Closing either by agreement of Purchaser and Sellers
or otherwise. In the event that the actual Casualty loss is greater than or less than the Casualty Amount held in escrow, to the
extent necessary, the Parties shall make appropriate adjustment payments.

 

10.6         Notices.
Unless otherwise provided in this Agreement, any agreement, notice, request, instruction or other communication to be given hereunder
by any Party to another must be in writing and (a) delivered personally (such delivered notice to be effective on the date
it is delivered), (b) mailed by certified mail, postage prepaid (such mailed notice to be effective three (3) business days
after the date it is mailed), (c) deposited with a reputable overnight courier service (such couriered notice to be effective
one (1) business day after the date it is sent by courier) or (d) sent by electronically confirmed facsimile or email transmission
(such facsimile or email transmission notice to be effective on the date that confirmation of such facsimile or email transmission
is received), with a confirmation sent by way of one of the above methods, as follows:

 

If to Sellers or the
Shareholder, addressed to:

 

Sebastian Giordano

c/o WPCS International
Incorporated

600 Eagleview Boulevard, Suite 300

Exton, Pennsylvania 19341

Telephone: (484) 359-7229

Facsimile: (484) 359-7215

Email: sgiordano@wpcs.com

 

    	48

    	 

    

 

With copies to:

 

Sichenzia Ross Friedman
Ference LLP

61 Broadway, 32nd
Floor

New York, New York
10006

Attention: Harvey Kesner

Telephone: (212) 930-9700

Facsimile: (212) 930-9725

Email: hkesner@srff.com

 

If to Purchaser, addressed
to:

 

EC Company

2121 NW Thurman Street

Portland, Oregon
97201

Attention: Joel Scroggy,
CFO

Telephone: (503)
220-3525

Facsimile:

Email: JOELS@e-c-co.com

 

With a copy to:

 

Ball Janik LLP

15 SW Colorado Avenue,
Suite 3

Bend, Oregon 97702

Attn: Kyle D. Wuepper

Telephone: (541) 693-0062

Facsimile: (541) 617-8824

Email: kwuepper@balljanik.com

 

Any Party may designate in a writing to
any other Party any other address or facsimile number to which, and any other Person to whom or which, a copy of any such notice,
request, instruction or other communication should be sent.

 

10.7         Choice
of Law. This Agreement is governed by and will be construed, interpreted and the rights of the Parties determined in accordance
with the laws of the State of Washington without regard to principles of conflicts of law, except that, with respect to matters
of law concerning the internal corporate affairs of any corporate entity which is a Party to or the subject of this Agreement,
the law of the jurisdiction under which the respective entity was organized will govern.

 

10.8         Expenses.
Each Party hereto shall bear and pay all costs, fees and expenses incurred by it in connection with this Agreement and the transactions
contemplated in this Agreement, including, but not limited to, the costs, fees and expenses of its own financial consultants, accountants
and counsel.

 

    	49

    	 

    

 

10.9         Headings.
The headings of the Articles and Sections of this Agreement are inserted for convenience of reference only and will not affect
the meaning or interpretation of this Agreement.

 

10.10         Entire
Agreement; Oral Modification. This Agreement contains the entire agreement between the Parties to this Agreement with respect
to the subject matter of this Agreement and supersedes each course of conduct previously pursued, accepted or acquiesced in, and
each written or oral agreement and representation previously made, by the Parties to this Agreement with respect to the subject
matter of this Agreement; and no amendment, modification, termination or attempted waiver of any of the provisions hereof shall
be binding unless in writing and signed by all of the Parties hereto.

 

10.11         Successors
and Assigns; Third Party Beneficiaries. Except as otherwise provided in this Agreement, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties. Nothing in this Agreement,
express or implied, is intended to create, and shall not be construed as creating, any rights enforceable by any person not a Party
to this Agreement, and it is the express intent of the Parties that no third party shall have any enforceable rights under this
Agreement.

 

10.12         Severability.
If any provision of this Agreement is for any reason determined to be invalid, such provision shall be deemed modified so as to
be enforceable to the maximum extent permitted by law consistent with the intent of the Parties as expressed in this Agreement,
and such invalidity shall not affect the remaining provisions of this Agreement, which shall continue in full force and effect.

 

10.13         Counterparts.
This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which taken together
will constitute one and the same instrument. Any Party may execute this Agreement by facsimile signature and the other Parties
will be entitled to rely on such facsimile signature as evidence that this Agreement has been duly executed by such Party. Any
Party executing this Agreement by facsimile signature shall immediately forward to the other Parties an original signature page
by overnight mail.

 

10.14         Consent
to Jurisdiction and Venue. Each Party to this Agreement hereby (i) consents to submit himself, herself or itself to the personal
jurisdiction of the Federal courts of the United States located in the Western District of Washington or, if such courts do not
have jurisdiction over such matter, to the applicable courts of the State of Washington located King County, (ii) irrevocably agrees
that all actions or proceedings arising out of or relating to this Agreement will be litigated in such courts and (iii) irrevocably
agrees that he, she or it will not institute any Proceeding relating to this Agreement or any of the transactions contemplated
hereby in any court other than such courts. Each Party to this Agreement accepts for himself, herself or itself and in connection
with his, her or its properties, generally and unconditionally, the exclusive jurisdiction and venue of the aforesaid courts and
waives any defense of lack of personal jurisdiction or inconvenient forum or any similar defense, and irrevocably agrees to be
bound by any non-appealable judgment rendered thereby in connection with this Agreement.

 

    	50

    	 

    

 

10.15         Waiver
of Jury Trial. THE PARTIES HERETO WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE
KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES TO IRREVOCABLY WAIVE TRIAL BY JURY AND THAT ANY ACTION OR PROCEEDING
WHATSOEVER AMONG THEM RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY WILL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

10.16         Independence
of Covenants and Representations and Warranties. All covenants under this Agreement will be given independent effect so that
if a certain action or condition constitutes a default under a certain covenant, the fact that such action or condition is permitted
by another covenant will not affect the occurrence of such default, unless expressly permitted under an exception to such initial
covenant. In addition, all representations and warranties under this Agreement will be given independent effect so that if a particular
representation or warranty proves to be incorrect or is breached, the fact that another representation or warranty concerning the
same or similar subject matter is correct or is not breached will not affect the incorrectness or a breach of such initial representation
or warranty.

 

[SIGNATURE PAGE FOLLOWS]

 

    	51

    	 

    

 

IN WITNESS WHEREOF,
the Parties to this Agreement have executed or caused this Agreement to be executed on the day and year indicated at the beginning
of this Agreement.

 

	PURCHASER:	 	EC COMPANY
	 	 	 
	 	 	By:	/s/ Joel Scroggy
	 	 	Name: Joel Scroggy
	 	 	Title: Chief Financial Officer
	 	 	 
	SELLERS:	 	WPCS INTERNATIONAL – SEATTLE, INC.
	 	 	 
	 	 	By:	/s/  Joseph Heater
	 	 	Name:  Joseph Heater
	 	 	Title:    Chief Financial Officer
	 	 	 
	 	 	WPCS INTERNATIONAL INCORPORATED
	 	 	 
	 	 	By:	/s/ Joseph Heater
	 	 	Name:  Joseph Heater
	 	 	Title:    Chief Financial OfficerTHIRD AMENDMENT TO TERM LOAN AND SECURITY
AGREEMENT

 

THIS THIRD AMENDMENT
TO TERM LOAN AND SECURITY AGREEMENT (this “Amendment”) is dated as of March 31, 2014, among INTEGRATED DRILLING
EQUIPMENT HOLDINGS CORP. (formerly known as Empeiria Acquisition Corp., “IDE Holdings Corp.”), INTEGRATED DRILLING
EQUIPMENT, LLC, a Delaware limited liability company (“IDE”), and INTEGRATED DRILLING EQUIPMENT COMPANY HOLDINGS,
LLC, a Delaware limited liability company (“Holdings LLC”; IDE Holdings Corp., IDE and Holdings LLC are referred
to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally,
as the “Borrowers”), the lenders which are a party hereto (collectively, the “Lenders” and
individually a “Lender”) and ELM PARK CAPITAL MANAGEMENT, LLC, a Delaware limited liability company (“Elm
Park Capital Management”), as agent for Lenders (Elm Park Capital Management, in such capacity, the “Agent”).
Capitalized terms used but not defined in this Amendment shall have the meanings given them in the Term Loan and Security Agreement
(defined below).

 

 

RECITALS

 

A.Borrowers, Agent
and the Lenders are parties to that certain Term Loan and Security Agreement, dated as of December 14, 2012 (as amended by
the First Amendment to Term Loan and Security Agreement dated April 9, 2013 (the “First Amendment”), the Second
Amendment to Term Loan and Security Agreement dated October 17, 2013 (the “Second Amendment”), and as amended,
restated, joined, extended, supplemented or otherwise modified from time to time, the “Term Loan and Security Agreement”).

 

B.The Obligations
are scheduled to mature on September 30, 2014, and Borrowers have requested that Agent and Lenders extend the stated term of the
Term Loan and Security Agreement for an additional nine-month period.

 

C.Borrowers, Agent
and Lenders have agreed to amend the Term Loan and Security Agreement and Other Documents, subject to the terms and conditions
of this Amendment.

 

AGREEMENTS

 

NOW THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which are acknowledged, the undersigned hereby agree as follows:

 

Article
I

Amendments to Term Loan and Security Agreement

 

1.01         
Section 2.1 (Term Loan) of the Term Loan and Security Agreement is hereby amended by amending and
restating the table set forth therein in its entirety as follows:

 

	Date	Installment Amount
	March 31, 2014	$300,000
	June 30, 2014	$300,000
	September 30, 2014	$300,000
	December 31, 2014	$300,000
	March 31, 2015	$300,000

 

    	

    	 

    

 

 

1.02
Section 3.2 (PIK Interest) of the Term Loan and Security Agreement is deleted in its entirety
and replaced with the following:

 

“3.2 PIK Interest.
In addition to any and all other interest provided for in this Agreement, the principal balance of the Term Loan (inclusive of
any PIK Amount) shall bear additional interest on the daily balance thereof at a per annum rate equal to 4.00% (or during any period
of time when Borrower’s Total Leverage Ratio (calculated as of the end of the most recently completed fiscal quarter ending
after March 31, 2014 for which quarterly financial statements were most recently required to be delivered to Agent) is less than
3:50:1.00, 2.00%), which interest shall accrue with respect to the Term Loan from and after the Closing Date, and shall be paid
in immediately available funds or paid-in-kind as Borrowers elect, in the sole and absolute discretion of Borrowers, by being added
to the principal balance of the Term Loan (inclusive of any PIK Amount theretofore so added) on the first day of each quarter from
and including January 1, 2013 and thereafter. Upon the expiration of the Term, any outstanding PIK Amount shall be due and payable
without notice or demand. In the avoidance of doubt, it is hereby acknowledged and agreed that, except to the extent expressly
provided to the contrary herein, any reference to the principal balance of the Term Loan or the Obligations shall be deemed to
include the PIK Amount.”

 

1.03
Section 6.5 (Financial Covenants) of the Term Loan and Security Agreement are
deleted in their entirety and replaced with the following:

 

“(a)
[Intentionally Omitted]

 

(b) Fixed
Charge Coverage Ratio. Cause to be maintained as of the last day of each month, commencing with the month ending June 30, 2014,
and for each month ending thereafter, a Fixed Charge Coverage Ratio of not less than the applicable ratio required as set
forth in the following table, for each applicable period:

 

	Applicable Period	Ratio
	For the six month period ending June 30, 2014	1.0 to 1.0
	For the seven month period ending July 31, 2014, 	1.0 to 1.0
	For the eight month period ending August 31, 2014,	1.0 to 1.0
	For the nine month period ending September 30, 2014,	1.1 to 1.0
	For the ten month period ending October 31, 2014	1.1 to 1.0
	For the eleven month period ending November 30, 2014	1.1 to 1.0
	For the twelve month period ending December 31, 2014	1.1 to 1.0
	For the twelve month period ending January 31, 2015	1.1 to 1.0
	For the twelve month period ending February 28, 2015	1.1 to 1.0
	For the twelve month period ending March 31, 2015	1.1 to 1.0
	For the twelve month period ending April 30, 2015	1.1 to 1.0
	For the twelve month period ending May 31, 2015, and thereafter	1.1 to 1.0

 

 

    	2

    	 

    

 

 

(c) Minimum
EBITDA. Cause to be maintained minimum EBITDA, measured quarterly, of at least the applicable amount required as set forth
in the following table, for each applicable period:

 

	Applicable Period	Applicable Amount
	For the twelve month period

ending June 30, 2014	$3,000,000
	For the twelve month period

ending September 30, 2014	$5,000,000
	For the twelve month period

ending December 31, 2014	$8,000,000
	For the twelve month period

ending March 31, 2015, and thereafter	$8,000,000

 

 

(d) [Intentionally
Omitted]

 

(e)
Capital Expenditures. Contract for, purchase or make any expenditure or commitments for Capital Expenditures
in an amount less than or equal to, but not greater than, the amount set forth in the following table for the applicable period
set forth opposite thereto:

 

	Applicable Period	Applicable Amount
	For the twelve month period

ending December 31, 2014	$2,000,000
	For the three month period

ending March 31, 2015	$1,000,000

 

 

    	3

    	 

    

 

 

1.04
The first sentence of Section 13.1 (Term) of the Term Loan and Security Agreement is hereby
amended by deleting the date “September 30, 2014” where it appears and replacing it with “June 30, 2015”.

 

1.05
Subsection (a) of Section 16.2 (Entire Understanding) of the Term Loan and Security
Agreement is hereby amended by inserting after the third sentence in such subsection (a), the following new sentence:

 

“Notwithstanding
the foregoing, Agent may modify this Agreement or any of the Other Documents for the purposes of completing missing content or
correcting erroneous content of an administrative nature, without the need for a written amendment, provided that the Agent shall
send a copy of any such modification to the Borrower and each Lender (which copy may be provided by electronic mail).”

 

Article
II

effectiveness of amendments

 

2.01
Conditions. This Amendment shall be effective once each of the following has been delivered to Agent
or performed to Agent and Lenders’ satisfaction:

 

(a)               
this Amendment executed by Borrowers, Agent and Lenders;

 

(b)              
a fully executed Secretary’s Certificate of Borrowers including incumbency of officers and resolutions of the board
of directors approving the terms of this Amendment and the First Lien Amendment (defined below);

 

(c)               
an executed copy of an amendment to the First Lien Loan Agreement in form and substance satisfactory to Agent and Lenders
in all respects, and which, among other things, modifies the stated maturity date under the First Lien Loan Agreement to no earlier
than December 31, 2014 (the “First Lien Amendment”);

 

(d)              
written consent from the First Lien Lenders to all terms and conditions of this Amendment and that this Amendment is expressly
permitted under the First Lien Intercreditor Agreement; and

 

(e)               
such other documents, instruments and information as Agent or Lenders may reasonably request.

 

Article
III

WAIVERS, CoNSENT, REPRESENTATIONS AND WARRANTIES

 

3.01         
Consent to Amendment. Agent and Lenders hereby consent to the execution and delivery of the amendment
to the First Lien Loan Agreement in the form provided to Agent on or before the date hereof. 

 

3.02         
Scope of Agreement; RELEASE. Except as specifically
amended and/or waived by this Amendment, the Term Loan and Security Agreement and Other Documents are unchanged and continue in
full force and effect and are valid, binding and enforceable against Borrowers in accordance with their respective terms. Borrowers
hereby acknowledge as of the date hereof that they have no knowledge of any action, claim, CROSS COMPLAINT, DEFENSE, COUNterCLAIM,
OFFSET, demaND, cause of action, judgment, execution, suit, debt, liability, cost, damage, expense or other obligation of any kind
or nature whatsoever that can be asserted by them against Agent or any Lender or to reduce or eliminate all or any part of their
liability to repay any advances or extensions of credit from Lenders to Borrowers under the Term Loan and Security Agreement, as
amended hereby, or the other documents or to seek affirmative relief or damages of any kind or nature from Lenders or Agent. For
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Borrower, for itself and its
successors and assigns, fully and without reserve, hereby FOREVER releases, disclaims, and DISCHARGES EACH Agent or any Lender,
its respective successors and assigns, and their respective directors, officers, affiliates, attorneys, employees, TRustees, representatives
and agents (COLLECTIVELY, THE “RELEASED PARTIES” and INDIVIDUALLY, A “RELEASED PARTY”) FROM any AND all
actions, claims, CROSS COMPLAINTS, DEFENSES, COUNTERCLAIMS, OFFSETS, demands, causes of action, judgments, executions, suits, debts,
liabilities, costs, damages, expenses or other obligations of any kind and nature whatsoever, known or unknown, direct
and/or indirect, at law or in equity, whether now existing or hereafter asserted (INCLUDING, WITHOUT LIMITATION, ANY OFFSETS, REDUCTIONS,
REBATEMENT, CLAIMS OF USURY OR CLAIMS WITH RESPECT TO THE NEGLIGENCE OF ANY RELEASED PARTY),
whatsoever in each case existing as of the date hereof, or which may hereafter accrue
solely to the extent regarding any actions or facts occurring prior to the date hereof.

 

    	4

    	 

    

  

3.03         
Representations and Warranties. Borrowers jointly and severally represent and warrant to Agent and Lenders
that (a) they possess all requisite company or corporate power and authority to execute, deliver and comply with the terms of this
Amendment, (b) this Amendment has been duly authorized and approved by all requisite company or corporate action on the part of
each Borrower, (c) no other consent of any individual or entity (other than Agent and Lenders and the First Lien Agent and First
Lien Lenders to the extent required by Section 2.01(d)) is required for this Amendment to be effective, (d) the execution
and delivery of this Amendment does not violate the organizational documents of any Borrower, (e) the representations and warranties
in the Term Loan and Security Agreement and each Other Document to which each Borrower is a party are true and correct in all material
respects on and as of the date of this Amendment as though made on the date of this Amendment (except to the extent that
such representations and warranties speak to a specific date or to the extent such representations and warranties relate to the
Existing Defaults), (f) each Borrower is in compliance with all covenants and agreements contained in the Term Loan and Security
Agreement and each Other Document to which it is a party, and (g) no Default or Event of Default has occurred and is continuing.
The representations and warranties made in this Amendment shall survive the execution and delivery of this Amendment. No investigation
by Agent or Lenders is required for Agent or Lenders to rely on the representations and warranties in this Amendment.

 

Article
IV 

COVENANTS
AND CONSENT

 

4.01
Cost Reduction Plan. Borrowers shall at all times continue to comply with the provisions of the cost
reduction plan approved by the board of directors of IDE Holdings Corp., which shall be in form and substance satisfactory to Agent
and Lenders. Borrowers shall promptly notify Agent of any modifications to such cost reduction plan which are subsequently approved
by the board of directors of IDE Holdings Corp.

 

    	5

    	 

    

  

4.02
Termination of Consultant. Agent and Lenders consent and agree that Borrowers may terminate the engagement
of the third-party business consulting firm, as required by Section 4.02 of the First Amendment entered into by the parties hereto.
Borrowers acknowledge that Agent and Lenders reserve their rights to require that Borrowers engage a consultant in the future,
upon the occurrence of any Default or Event of Default after the date hereof.

 

Article
V

Miscellaneous

 

5.01
No Waiver; Effect of Amendments; etc.. Except as expressly set forth herein, this Amendment does not
constitute (i) a waiver of, or a consent to, (A) any provision of any Term Loan and Security Agreement or any Other Document not
expressly referred to in this Amendment, or (B) any present or future violation of, or default under, any provision of the
Term Loan and Security Agreement or Other Documents, or (ii) a waiver of Agent’s or Lenders’ right to insist upon future
compliance with each term, covenant, condition and provision of the Term Loan and Security Agreement or Other Documents. This Amendment
shall constitute an Other Document under the Term Loan and Security Agreement and any failure by any Borrower to comply with any
of the provisions of this Amendment when due shall constitute an immediate Event of Default under the Term Loan and Security Agreement.
Upon and after the effectiveness of this Amendment, each reference in the Term Loan and Security Agreement to “this Agreement”,
“hereunder”, “herein”, “hereof” or words of like import referring to the Term Loan and Security
Agreement, and each reference in the other Documents to “the Loan Agreement”, “thereunder”, “therein”,
“thereof” or words of like import referring to the Term Loan and Security Agreement, shall mean and be a reference
to the Term Loan and Security Agreement as modified and amended hereby.

 

5.02
Form. Each agreement, document, instrument or other writing to be furnished to Agent under any provision
of this Amendment must be in form and, other than Cash Flow Projections, in substance satisfactory to Agent.

 

5.03
Headings. The headings and captions used in this Amendment are for convenience only and will not be
deemed to limit, amplify or modify the terms of this Amendment, the Term Loan and Security Agreement, or the Other Documents.

 

5.04
Costs, Expenses and Attorneys’ Fees. Borrowers jointly and severally agree to pay or reimburse
Agent and Lenders on demand for all its reasonable out-of-pocket costs and expenses incurred in connection with the preparation,
negotiation, and execution of this Amendment and other documents executed in connection therewith, including, without limitation,
the reasonable fees and disbursements of Agent and Lenders’ counsel.

 

5.05         
Reaffirmation of Obligations. Each Borrower hereby reaffirms its obligations under each Loan Document
to which it is a party. Each Borrower hereby further ratifies and reaffirms the validity and enforceability of all of the liens
and security interests heretofore granted, pursuant to and in connection with the Term Loan and Security Agreement or any other
Document, to Agent, as collateral security for the Obligations, and acknowledges that all of such Liens and security interests,
and all Collateral heretofore pledged as security for such Obligations, continue to be and remain collateral for such Obligations
as of the date hereof. Each Borrower hereby acknowledges, confirms and agrees that as of the close of business on March 31, 2014,
the Borrowers were indebted to the Lenders for the Term Loan in an aggregate outstanding principal balance of $19,923,523.01,
plus accrued and unpaid interest in the amount of $204,752.31, plus accrued and unpaid costs and expense owing
under the Documents. All such Obligations owing by the Borrowers are unconditionally owing by the Borrowers to Agent and the Lenders,
without offset, defense, withholding, counterclaim or deduction of any kind, nature or description whatsoever and shall be payable
in accordance with the terms of the Term Loan and Security Agreement and the other Documents.

 

    	6

    	 

    

  

5.06         
Ratification. Each Borrower hereby restates, ratifies and reaffirms each and every term and condition
set forth in the Term Loan and Security Agreement and the other Documents to which it is a party effective as of the date hereof
and as amended hereby.

 

5.07
Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of each of the
undersigned and their respective successors, assigns, heirs and legal representatives, as applicable.

 

5.08
Multiple Counterparts. This Amendment may be executed in any number of counterparts with the same
effect as if all signatories had signed the same document. All counterparts must be construed together to constitute one and the
same instrument. This Amendment may be transmitted and signed by facsimile, portable document format (PDF), and other electronic
means. The effectiveness of any such documents and signatures shall, subject to applicable law, have the same force and effect
as manually-signed originals and shall be binding on Borrowers, Agent and Lenders.

 

5.09
Governing Law; Venue; Etc.. This Amendment must be construed, and its performance enforced, under
the laws of the State of New York applied to contracts to be performed wholly within the State of New York. Any judicial proceeding
brought by or against any Borrower with respect to this Amendment may be brought in any court of competent jurisdiction in the
State of New York, United States of America, and, by execution and delivery of this Amendment, each Borrower accepts for itself
and in connection with its properties, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and
irrevocably agrees to be bound by any judgment rendered thereby in connection with this Amendment. Each Borrower hereby waives
any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction
or venue or based upon forum non conveniens. Each Borrower hereby waives the right to remove any judicial proceeding brought against
such Borrower in any state court to any federal court. Any judicial proceeding by any Borrower against Agent or any Lender involving,
directly or indirectly, any matter or claim in any way arising out of, related to or connected with this Agreement or any related
agreement, shall be brought only in a federal or state court located in the County of New York, State of New York.

 

5.10
Entirety. This Amendment, the Term Loan and Security Agreement
and the Other Documents (as amended hereby) represent the final agreement among the parties and may not be contradicted by evidence
of prior, contemporaneous, or subsequent oral agreements by the Parties. There are no unwritten oral agreements among the Parties.

 

 

[Signatures are on the following pages]

 

    	7

    	 

    

 

IN
WITNESS WHEREOF, this Amendment is executed by each of the undersigned as of the date first written above.

 

	 	 	 
	 	INTEGRATED DRILLING
    EQUIPMENT, LLC
	 	as Borrowing Agent
    and as a Borrower
	 	 	 
	 	 	 
	 	By:	/s/
    N. Michael Dion
	 	Name:	N.
    Michael Dion
	 	Title:	Chief
    Financial Officer
	 	 	 
	 	 	 
	 	INTEGRATED DRILLING
    EQUIPMENT COMPANY HOLDINGS, LLC
	 	as a Borrower
	 	 	 
	 	 	 
	 	By:	/s/
    N. Michael Dion
	 	Name:	N.
    Michael Dion
	 	Title:	Chief
    Financial Officer
	 	 	 
	 	 	 
	 	INTEGRATED DRILLING
    EQUIPMENT HOLDINGS CORP.
	 	as a Borrower
	 	 	 
	 	 	 
	 	By:	/s/
    N. Michael Dion
	 	Name:	N.
    Michael Dion
	 	Title:	Chief
    Financial Officer

 

  

 

[SIGNATURE
PAGE TO THIRD AMENDMENT TO TERM LOAN AND SECURITY AGREEMENT]

    	 

    	 

    

 

	 	ELM PARK CAPITAL
    MANAGEMENT, LLC
	 	as Agent 
	 	 	 
	 	 	 
	 	By: 	/s/
    Mark Schachter
	 	Name: 	Mark
    Schachter
	 	Title: 	Authorized Signatory

 

 

 

[SIGNATURE
PAGE TO THIRD AMENDMENT TO TERM LOAN AND SECURITY AGREEMENT]

    	 

    	 

    

 

	 	ELM
                                         PARK CREDIT OPPORTUNITIES FUND, L.P.

	 	as
                                         a Lender

	 	 	 
	 	 	 
	 	By: 	/s/
    Mark Schachter
	 	Name: 	Mark
    Schachter
	 	Title: 	Authorized
Signatory

 

 

 

 

[SIGNATURE
PAGE TO THIRD AMENDMENT TO TERM LOAN AND SECURITY AGREEMENT]

    	 

    	 

    

 

 

	 	ELM PARK CREDIT
    OPPORTUNITIES FUND (CANADA), L.P.
	 	as a Lender
	 	 	 
	 	 	 
	 	By: 	/s/
    Charles Winograd
	 	Name: 	Charles
    Winograd
	 	Title: 	Authorized Signatory

 

 

 

[SIGNATURE
PAGE TO THIRD AMENDMENT TO TERM LOAN AND SECURITY AGREEMENT]

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