Document:

Exhibit
10.03

 

[FORM
OF WARRANT]

 

NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE
TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144
OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

WPCS International Incorporated

 

Warrant To Purchase Common
Stock

 

Warrant No.: ________

 

Date of Issuance: December ___, 2012 (“Issuance
Date”)

 

WPCS
International Incorporated, a Delaware corporation (the “Company”), hereby certifies that, for good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [BUYER],
the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms
set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this
Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement
hereof, the “Warrant”), at any time or times on or after the Issuance Date, but not after 11:59 p.m., New
York time, on the Expiration Date (as defined below), _________________1 (subject to adjustment as provided
herein) fully paid and non-assessable shares of Common Stock (as defined below) (the “Warrant
Shares”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth
in Section 16. This Warrant is one of the Warrants to Purchase Common Stock (the “SPA Warrants”)
issued pursuant to Section 1 of that certain Securities Purchase Agreement, dated as of December 4, 2012, by and among
the Company and the investors (the “Buyers”) referred to therein, as amended from time to time (the
“Securities Purchase Agreement”).

 

 

___________________________

1150% warrant coverage

    	 

    	 	

    
 

 

1.EXERCISE
OF WARRANT.

 

(a)Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)),
this Warrant may be exercised by the Holder on any day on or after the Issuance Date, in whole or in part, by delivery (whether
via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit A (the “Exercise
Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading Day following an exercise
of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the Exercise Price in effect
on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so exercised (the “Aggregate
Exercise Price”) in cash or via wire transfer of immediately available funds if the Holder did not notify the Company
in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder
shall not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery
of an Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution
and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of
the original of this Warrant after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first
(1st) Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit
by facsimile an acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B,
to the Holder and the Company’s transfer agent (the “Transfer Agent”). On or before the third (3rd)
Trading Day following the date on which the Company has received such Exercise Notice, the Company shall (X) provided that the
Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer
Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal
at Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program,
issue and deliver to the Holder or, at the Holder’s instruction pursuant to the Exercise Notice, the Holder’s agent
or designee, in each case, sent by reputable overnight courier to the address as specified in the applicable Exercise Notice,
a certificate, registered in the Company’s share register in the name of the Holder or its designee (as indicated in the
applicable Exercise Notice), for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise.
Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record
of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are
credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares (as the
case may be). If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of
Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired
upon an exercise, then, at the request of the Holder, the Company shall as soon as practicable and in no event later than three
(3) Business Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in
accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior
to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional
shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to
be issued shall be rounded up to the nearest whole number. The Company shall pay any and all taxes and fees which may be payable
with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. Notwithstanding the foregoing, except
in the case where an exercise of this Warrant is validly made pursuant to a Cashless Exercise (as defined in Section 1(d)),
the Company’s failure to deliver Warrant Shares to the Holder on or prior to the second (2nd) Trading Day after the Company’s
receipt of the Aggregate Exercise Price shall not be deemed to be a breach of this Warrant.

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(b)Exercise
Price. For purposes of this Warrant, “Exercise Price” means $0.471, subject to adjustment as provided herein.

 

(c)Company’s
Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, to issue to the Holder within
the later of (i) three (3) Trading Days after receipt of the applicable Exercise Notice and (ii) two (2) Trading Days after the
Company’s receipt of the Aggregate Exercise Price (or valid notice of a Cashless Exercise) (such later date, the “Share
Delivery Deadline”), a certificate for the number of shares of Common Stock to which the Holder is entitled and register
such shares of Common Stock on the Company’s share register or to credit the Holder’s balance account with DTC for
such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of this Warrant (as the
case may be) (a “Delivery Failure”), then, in addition to all other remedies available to the Holder, the Company
shall pay in cash to the Holder on each day after such Share Delivery Deadline that the issuance of such shares of Common Stock
is not timely effected an amount equal to 2% of the product of (A) the aggregate number of shares of Common Stock not issued to
the Holder on a timely basis and to which the Holder is entitled and (B) the Closing Sale Price of the Common Stock on the Trading
Day immediately preceding the last possible date on which the Company could have issued such shares of Common Stock to the Holder
without violating Section 1(a). In addition to the foregoing, if on or prior to the Share Delivery Deadline, the Company
shall fail to issue and deliver a certificate to the Holder and register such shares of Common Stock on the Company’s share
register or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is
entitled upon the Holder’s exercise hereunder (as the case may be), and if on or after such Share Delivery Deadline the
Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to
all or any portion of the number of shares of Common Stock, issuable upon such exercise that the Holder so anticipated receiving
from the Company, then, in addition to all other remedies available to the Holder, the Company shall, within three (3) Business
Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal
to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the
shares of Common Stock so purchased (including, without limitation, by any other Person in respect, or on behalf, of the Holder)
(the “Buy-In Price”), at which point the Company’s obligation to so issue and deliver such certificate
or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled
upon the Holder’s exercise hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate, or
(ii) promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates representing such shares
of Common Stock or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder
is entitled upon the Holder’s exercise hereunder (as the case may be) and pay cash to the Holder in an amount equal to the
excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock multiplied by (B) the lowest
Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable Exercise
Notice and ending on the date of such issuance and payment under this clause (ii).

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(d)Cashless
Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), if at any time
of exercise hereof after the six month anniversary of the Issuance Date a Registration Statement (as defined in the
Registration Rights Agreement) is not effective (or the prospectus contained therein is not available for use on a continuous
basis) for the resale by the Holder of all of the Registrable Securities (as defined in the Registration Rights Agreement) at
market prices from time to time, then the Holder may, in its sole discretion, exercise this Warrant in whole or in part and,
in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the
Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock
determined according to the following formula (a “Cashless Exercise”):

 

	Net Number = (A x B) - (A x C)	 
	                                     D	 

 

For purposes of the
foregoing formula:

 

A= the total number of shares with
respect to which this Warrant is then being exercised.

 

B=the quotient of (x) the sum of
the VWAP of the Common Stock of each of the five (5) Trading Days ending at the close of business on the Principal Market immediately
prior to the time of exercise as set forth in the applicable Exercise Notice, divided by (y) five (5).

 

C= the
Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

 

D= as applicable: (i) the
Closing Sale Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if
such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading
Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of
“regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities
laws) on such Trading Day, (ii) the Bid Price of the Common Stock as of the time of the Holder’s execution of the
applicable Exercise Notice if such Exercise Notice is executed during “regular trading hours” on a Trading Day
and is delivered within two (2) hours thereafter pursuant to Section 1(a) hereof, or (iii) the Closing Sale Price of the
Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice is a Trading Day and such
Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof after the close of “regular trading
hours” on such Trading Day.

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(e)Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant
Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares
that are not disputed and resolve such dispute in accordance with Section 13.

 

(f)Limitations
on Exercises.

 

(i)Beneficial
Ownership. Notwithstanding anything to the contrary contained in this Warrant, this Warrant shall not be exercisable by the
Holder hereof to the extent (but only to the extent) that after giving effect to such exercise the Holder (together with any of
its affiliates) would beneficially own in excess of  9.99% (the “Maximum Percentage”) of the Common Stock.
To the extent the above limitation applies, the determination of whether this Warrant shall be exercisable (vis-à-vis other
convertible, exercisable or exchangeable securities owned by the Holder or any of its affiliates) and of which such securities
shall be convertible, exercisable or exchangeable (as the case may be, as among all such securities owned by the Holder) shall,
subject to such Maximum Percentage limitation, be determined on the basis of the first submission to the Company for conversion,
exercise or exchange (as the case may be). No prior inability to exercise this Warrant pursuant to this paragraph shall have any
effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability.
For the purposes of this paragraph, beneficial ownership and all determinations and calculations (including, without limitation,
with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the 1934 Act
(as defined in the Securities Purchase Agreement) and the rules and regulations promulgated thereunder. The provisions of this
paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership
limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage
limitation. The limitations contained in this paragraph shall apply to a successor Holder of this Warrant. The holders of Common
Stock shall be third party beneficiaries of this paragraph and the Company may not waive this paragraph without the consent of
holders of a majority of its Common Stock. For any reason at any time, upon the written or oral request of the Holder, the Company
shall within one (1) Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding,
including by virtue of any prior conversion or exercise of convertible or exercisable securities into Common Stock, including,
without limitation, pursuant to this Warrant or securities issued pursuant to the Securities Purchase Agreement.

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(ii)Principal
Market Regulation. The Company shall not issue any shares of Common Stock upon exercise of this Warrant if the issuance of
such shares of Common Stock would exceed the aggregate number of shares of Common Stock which the Company may issue upon conversion
or exercise (as the case may be) of the Notes and the SPA Warrants without breaching the Company’s obligations under the
rules or regulations of the Principal Market (the number of shares which may be issued without violating such rules and regulations,
the “Exchange Cap”), except that such limitation shall not apply in the event that the Company (A) obtains the
approval of its stockholders as required by the applicable rules of the Principal Market for issuances of shares of Common Stock
in excess of such amount or (B) obtains a written opinion from outside counsel to the Company that such approval is not required,
which opinion shall be reasonably satisfactory to the Holder. Until such approval or such written opinion is obtained, no Buyer
(as defined in the Securities Purchase Agreement) shall be issued in the aggregate, upon exercise or conversion (as the case may
be) of any SPA Warrants or any of the Notes, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap
multiplied by (ii) the quotient of (1) the original principal amount of the Note issued to such Buyer pursuant to the Securities
Purchase Agreement on the Closing Date divided by (2) the aggregate original principal amount of all Notes issued to the Buyers
pursuant to the Securities Purchase Agreement on the Closing Date (with respect to each Buyer, the “Exchange Cap Allocation”).
In the event that any Buyer shall sell or otherwise transfer any of such Buyer’s SPA Warrants, the transferee shall be allocated
a pro rata portion of such Buyer’s Exchange Cap Allocation with respect to such portion of such SPA Warrants so transferred,
and the restrictions of the prior sentence shall apply to such transferee with respect to the portion of the Exchange Cap Allocation
so allocated to such transferee. Upon exercise and conversion in full of a holder’s SPA Warrants and Notes, the difference
(if any) between such holder’s Exchange Cap Allocation and the number of shares of Common Stock actually issued to such holder
upon such holder's exercise in full of such SPA Warrants and such holder’s conversion in full of such Notes shall be allocated
to the respective Exchange Cap Allocations of the remaining holders of SPA Warrants and Notes on a pro rata basis in proportion
to the shares of Common Stock underlying the SPA Warrants and Notes then held by each such holder.

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(g)Insufficient
Authorized Shares. The Company shall keep reserved for issuance under this Warrant a number of shares of Common Stock at least
equal to (I) initially, 36.4%, and (II) after the Stockholder Approval Date (as defined in the Securities Purchase Agreement),
150%, of the maximum number of shares of Common Stock as shall be necessary to satisfy the Company’s obligation to issue
shares of Common Stock hereunder (without regard to any limitation otherwise contained herein with respect to the number of shares
of Common Stock that may be acquirable upon exercise of this Warrant). If, notwithstanding the foregoing, and not in limitation
thereof, at any time after the Issuance Date, while any of the SPA Warrants remain outstanding the Company does not have a sufficient
number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of the
SPA Warrants at least a number of shares of Common Stock (the “Required Reserve Amount”) equal to the number
of shares of Common Stock as shall from time to time be necessary to effect the exercise of all of the SPA Warrants then outstanding
(an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the
Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve
Amount for all the SPA Warrants then outstanding; provided, however, that no Authorized Share Failure shall occur if (x) the Exchange
Cap limitation is in effect and (y) the aggregate number of shares of Common Stock which the Company has reserved for issuance
upon exercise of the SPA Warrants is equal to or greater than the aggregate number of shares of Common Stock that may be issued
upon exercise of the SPA Warrants subject to the Exchange Cap. Without limiting the generality of the foregoing sentence, as soon
as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after
the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase
in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder
with a proxy statement and shall use its reasonable best efforts to solicit its stockholders’ approval of such increase in
authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal.
In the event that the Company is prohibited from issuing shares of Common Stock upon an exercise of this Warrant due to the failure
by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such
unavailable number of shares of Common Stock, the “Authorization Failure Shares”), in lieu of delivering such
Authorization Failure Shares to the Holder, the Company shall pay cash in exchange for the cancellation of such portion of this
Warrant exercisable into such Authorized Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization
Failure Shares and (y) the Closing Sale Price on the Trading Day immediately preceding the date the Holder delivers the applicable
Exercise Notice with respect to such Authorization Failure Shares to the Company and (ii) to the extent the Holder purchases (in
an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorization
Failure Shares, any brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith.

 

2. ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 2.

 

(a)Stock Dividends
and Splits. Without limiting any provision of Section 2(b) or Section 4, if the Company, at any time on or after
the date of the Securities Purchase Agreement, (i) pays a stock dividend on one or more classes of its then outstanding shares
of Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii)
subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares
of Common Stock into a larger number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more
classes of its then outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately
before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for
the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii)
or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If
any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder,
then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.

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(b)Adjustment
Upon Issuance of Shares of Common Stock. If and whenever on or after the date of the Securities Purchase Agreement, the Company
issues or sells, or in accordance with this Section 2 is deemed to have issued or sold, any shares of Common Stock (including
the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any Excluded
Securities issued or sold or deemed to have been issued or sold) for a consideration per share (the “New Issuance Price”)
less than a price equal to the Exercise Price in effect immediately prior to such issue or sale or deemed issuance or sale (such
Exercise Price then in effect is referred to as the “Applicable Price”) (the foregoing a “Dilutive
Issuance”), then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an
amount equal to the New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted
Exercise Price and consideration per share under this Section 2(b)), the following shall be applicable:

 

(i)Issuance
of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 2(b)(i), the “lowest price per share for which one share of Common Stock is
issuable upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable
upon exercise of any such Option” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration
(if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of such
Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise
of such Option and (y) the lowest exercise price set forth in such Option for which one share of Common Stock is issuable upon
the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Option minus (2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon the
granting or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security
issuable upon exercise of such Option plus the value of any other consideration received or receivable by, or benefit conferred
on, the holder of such Option (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price
shall be made upon the actual issuance of such shares of Common Stock or of such Convertible Securities upon the exercise of such
Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.

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(ii)Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 2(b)(ii),
the “lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise
or exchange of such Convertible Security and (y) the lowest conversion price set forth in such Convertible Security for which
one share of Common Stock is issuable upon conversion, exercise or exchange thereof minus (2) the sum of all amounts paid or payable
to the holder of such Convertible Security (or any other Person) upon the issuance or sale of such Convertible Security plus the
value of any other consideration received or receivable by, or benefit conferred on, the holder of such Convertible Security (or
any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance
of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or
sale of such Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to
be made pursuant to other provisions of this Section 2(b), except as contemplated below, no further adjustment of the Exercise
Price shall be made by reason of such issue or sale.

 

(iii)Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or
decreases at any time, the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the
Exercise Price which would have been in effect at such time had such Options or Convertible Securities provided for such
increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case may
be, at the time initially granted, issued or sold. For purposes of this Section 2(b)(iii), if the terms of any Option or
Convertible Security that was outstanding as of the date of issuance of this Warrant are increased or decreased in the manner
described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock
deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such
increase or decrease. No adjustment pursuant to this Section 2(b) shall be made if such adjustment would result in an
increase of the Exercise Price then in effect.

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(iv)Calculation
of Consideration Received. If any Option or Convertible Security or Adjustment Right is issued in connection with the issuance
or sale or deemed issuance or sale of any other securities of the Company, together comprising one integrated transaction, (x)
such Option or Convertible Security (as applicable) or Adjustment Right (as applicable) will be deemed to have been issued for
consideration equal to the Black Scholes Consideration Value thereof and (y) the other securities issued or sold or deemed to have
been issued or sold in such integrated transaction shall be deemed to have been issued for consideration equal to the difference
of (I) the aggregate consideration received or receivable by the Company minus (II) the Black Scholes Consideration Value of each
such Option or Convertible Security (as applicable) or Adjustment Right (as applicable). If any shares of Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor
will be deemed to be the net amount of consideration received by the Company therefor. If any shares of Common Stock, Options or
Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the
Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities, in
which case the amount of consideration received by the Company for such securities will be the arithmetic average of the VWAPs
of such security for each of the five (5) Trading Days immediately preceding the date of receipt. If any shares of Common Stock,
Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the
Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the
net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities,
as the case may be. The fair value of any consideration other than cash or publicly traded securities will be determined jointly
by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event
requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within
five (5) Trading Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser
jointly selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties
absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.

 

(v)Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to
subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such right of subscription or purchase (as the case may
be).

 

(c)Number of
Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraphs (a), (b), (d), (e), (f) or
(g) of this Section 2, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased
or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number
of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard
to any limitations on exercise contained herein).

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(d)Holder's
Right of Alternative Exercise Price Following Issuance of Certain Options or Convertible Securities. In addition to and not
in limitation of the other provisions of this Section 2, if the Company in any manner issues or sells any Options or Convertible
Securities (any such securities, "Variable Price Securities") after the Subscription Date that are convertible
into or exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the
Common Shares, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary
anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations
for such variable price being herein referred to as, the "Variable Price"), the Company shall provide written
notice thereof via facsimile and overnight courier to the Holder on the date of issuance of such Convertible Securities or Options.
From and after the date the Company issues any such Convertible Securities or Options with a Variable Price, the Holder shall
have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Exercise Price upon exercise
of this Warrant by designating in the Exercise Notice delivered upon any exercise of this Warrant that solely for purposes of
such exercise the Holder is relying on the Variable Price rather than the Exercise Price then in effect. The Holder's election
to rely on a Variable Price for a particular exercise of this Warrant shall not obligate the Holder to rely on a Variable Price
for any future exercises of this Warrant.

 

(e)Stock Combination
Event Adjustment. If at any time and from time to time on or after the Issuance Date there occurs any stock split, stock
dividend, stock combination recapitalization or other similar transaction involving the Common Stock (each, a “Stock Combination
Event”) and the product of (i) the quotient determined by dividing (x) the Exercise Price in effect immediately prior
to the Stock Combination Event by (y) the quotient determined by dividing (A) the sum of the VWAP of the Common Stock on each day
of the fifteen (15) Trading Day period immediately prior to the Stock Combination Event, divided by (B) fifteen (15); and (ii)
the quotient determined by dividing (x) the sum of the VWAP of the Common Stock on each day of the fifteen (15) Trading Day period
immediately following the date of such Stock Combination Event, divided by (y) fifteen (15) (each, an “Event Market Price”)
is less than the Exercise Price then in effect (after giving effect to the adjustment in clause (b) above), then on the sixteenth
(16th) Trading Day immediately following such Stock Combination Event, the Exercise Price then in effect on such sixteenth (16th)
Trading Day (after giving effect to the adjustment in clause (b) above) shall be reduced (but in no event increased) to the Event
Market Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an
increase in the Exercise Price hereunder, no adjustment shall be made.

 

(f)Other Events.
In the event that the Company (or any Subsidiary (as defined in the Securities Purchase Agreement)) shall take any action to which
the provisions hereof are not strictly applicable, or, if applicable, would not operate to protect the Holder from dilution or
if any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features),
then the Company’s board of directors shall in good faith determine and implement an appropriate adjustment in the Exercise
Price and the number of Warrant Shares (if applicable) so as to protect the rights of the Holder, provided that no such adjustment
pursuant to this Section 2(e) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined
pursuant to this Section 2, provided further that if the Holder does not accept such adjustments as appropriately protecting
its interests hereunder against such dilution, then the Company’s board of directors and the Holder shall agree, in good
faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination
shall be final and binding and whose fees and expenses shall be borne by the Company.

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(g)Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of
a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of
Common Stock.

 

(h)Adjustment.
If on each of (I) the earlier of (x) the Effective Date and (y) the six month anniversary of the Closing Date and, if
applicable, (II) if a Current Public Information Failure (as defined in the Registration Rights Agreement) exists as of the
six month anniversary of the Closing Date, the earlier of (A) such date thereafter when such Current Public Information
Failure is cured and (B) the first anniversary of the Issuance Date (each, a “First Adjustment Date”), the
Exercise Price then in effect exceeds the Market Price as of such First Adjustment Date (each a “First Adjustment
Exercise Price”) or, if later, in each case, the Stockholder Approval Date, the Exercise Price hereunder shall be
reset to such First Adjustment Exercise Price as of such First Adjustment Date (each, a “First Exercise Price
Adjustment”). If immediately following the close of business on the later of (x) the first anniversary of the
Closing Date, (y) the three month anniversary of the last First Adjustment Date, if any, on or prior to the first anniversary
of the Closing Date and (z) the three month anniversary of the Stockholder Approval Date (the “Second Adjustment
Date”, and together with each First Adjustment Date and the Stockholder Approval Date, collectively, the
“Adjustment Dates”), the Exercise Price then in effect exceeds the Market Price as of such Second
Adjustment Date (the “Second Adjustment Exercise Price”), the Exercise Price hereunder shall be reset to
the Second Adjustment Exercise Price as of the Second Adjustment Date (the “Second Exercise Price
Adjustment”). In addition to the foregoing, if as of the close of business on the Stockholder Approval Date
(after giving effect to any adjustments pursuant to this Section 2(h) and Section Error! Reference source not found.)
the Exercise Price then in effect exceeds the Closing Bid Price of the Common Stock on the Stockholder Approval Date (the
“Stockholder Approval Adjustment Price”, and together with each First Adjustment Exercise Price and the
Second Adjustment Exercise Price, collectively, the “Adjustment Exercise Prices”), the Exercise Price
hereunder shall be reset to the Stockholder Approval Adjustment Price as of the close of business of Stockholder Approval
Date (the “Stockholder Approval Exercise Price Adjustment”, and together with each First Adjustment
Exercise Price Adjustment and the Second Exercise Price Adjustment, collectively, the “Exercise Price
Adjustments”).

 

3.RIGHTS
UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if the Company shall declare or
make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock,
by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each
such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have
participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this
Warrant (without regard to any limitations on exercise hereof, including without limitation, the Maximum Percentage)
immediately before the date on which a record is taken for such Distribution, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, to the extent that the Holder’s right to participate in any such Distributions would result in the Holder
exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent
(or the beneficial ownership of any such shares of Common Stock as a result of such Distribution to such extent) and such
Distribution to such extent shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Maximum Percentage).

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4.PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

(a)Purchase
Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or
sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the
record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be
entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could
have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including without limitation, the Maximum Percentage) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is
taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of
such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase
Right would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right
to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as
its right thereto would not result in the Holder exceeding the Maximum Percentage).

 

(b)Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i)  the Successor Entity
assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined in
the Securities Purchase Agreement) in accordance with the provisions of this Section 4(b) pursuant to written agreements
in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements
to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding number
of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which
applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares
of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the
number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental Transaction) and (ii) the Successor Entity (including its Parent
Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the
consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and
after the date of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring
to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company
and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect
as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor
Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the
consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets
or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable
thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly
traded common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been
entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior
to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in
accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(f) hereof, the Holder
may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental
Transaction without the assumption of this Warrant. In addition to and not in substitution for any other rights hereunder, prior
to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”),
the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise
of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date,
in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable
under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant
prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including
warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of
the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction
(without regard to any limitations on the exercise of this Warrant). Provision made pursuant to the preceding sentence shall be
in a form and substance reasonably satisfactory to the Holder.

 

(c)Black
Scholes Value. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request of the Holder
delivered at any time commencing on the earliest to occur of (x) the public disclosure of any Fundamental Transaction, (y)
the consummation of any Fundamental Transaction and (z) the Holder first becoming aware of any Fundamental Transaction
through the date that is ninety (90) days after the public disclosure of the consummation of such Fundamental Transaction by
the Company pursuant to a Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may
be) shall purchase this Warrant from the Holder on the date of such request by paying to the
Holder cash in an amount equal to the Black Scholes Value.

 

(d)Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate
Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard
to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of
the Maximum Percentage, applied however with respect to shares of capital stock registered under the 1934 Act and thereafter
receivable upon exercise of this Warrant (or any such other warrant)).

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5. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation (as defined
in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good
faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder.
Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may
be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common
Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the SPA Warrants are outstanding, take all action
necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting
the exercise of the SPA Warrants, the maximum number of shares of Common Stock as shall from time to time be necessary to effect
the exercise of the SPA Warrants then outstanding (without regard to any limitations on exercise). 

 

6.WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as
a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the
Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its
capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or
withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due
exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on
the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the
Company shall provide the Holder with copies of the same notices and other information given to the stockholders of the
Company generally, contemporaneously with the giving thereof to the stockholders.

 

7.REISSUANCE
OF WARRANTS.

 

(a)Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered
as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and,
if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

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(b)Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated
below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of
this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d))
representing the right to purchase the Warrant Shares then underlying this Warrant.

 

(c)Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase
the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such
portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for
fractional shares of Common Stock shall be given.

 

(d)Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.

 

8.NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s) and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental Transaction. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of its Subsidiaries, the Company shall simultaneously file such notice with the SEC (as defined in the Securities Purchase Agreement) pursuant to a Current Report on Form 8-K. It is expressly understood and agreed that the time of execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.

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9.AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(f)) may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder. The Holder shall be entitled, at its option, to the benefit of any amendment of (i) any other similar warrant issued under the Securities Purchase Agreement or (ii) any other similar warrant. No consideration shall be offered or paid to the Holder to amend or consent to a waiver or modification of any provision of this Warrant unless the same consideration is also offered to all of the holders of the other SPA Warrants. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.

  

10.SEVERABILITY. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

 

11.GOVERNING
LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from
bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations
to the Holder or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

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12.CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant. Terms used in this Warrant but defined in the other Transaction Documents shall have
the meanings ascribed to such terms on the Closing Date (as defined in the Securities Purchase Agreement) in such other Transaction
Documents unless otherwise consented to in writing by the Holder. 

 

13.DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price, the Closing Sale Price, the Bid Price
or fair market value or the arithmetic calculation of the number of Warrant Shares (as the case may be), the Company or the Holder
(as the case may be) shall submit the disputed determinations or arithmetic calculations (as the case may be) via facsimile (i)
within two (2) Business Days after receipt of the applicable notice giving rise to such dispute to the Company or the Holder (as
the case may be) or (ii) if no notice gave rise to such dispute, at any time after the Holder learned of the circumstances giving
rise to such dispute (including, without limitation, as to whether any issuance or sale or deemed issuance or sale was an issuance
or sale or deemed issuance or sale of Excluded Securities). If the Holder and the Company are unable to agree upon such determination
or calculation (as the case may be) of the Exercise Price, the Closing Sale Price, the Bid Price or fair market value or the number
of Warrant Shares (as the case may be) within three (3) Business Days of such disputed determination or arithmetic calculation
being submitted to the Company or the Holder (as the case may be), then the Company shall, within two (2) Business Days submit
via facsimile (a) the disputed determination of the Exercise Price, the Closing Sale Price, the Bid Price or fair market value
(as the case may be) to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the
disputed arithmetic calculation of the number of Warrant Shares to the Company’s independent, outside accountant. The Company
shall cause at its expense the investment bank or the accountant (as the case may be) to perform the determinations or calculations
(as the case may be) and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it
receives such disputed determinations or calculations (as the case may be). Such investment bank’s or accountant’s determination
or calculation (as the case may be) shall be binding upon all parties absent demonstrable error. 

 

14.REMEDIES,
CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Warrant. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including, without limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.

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15.TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except as may otherwise be required by Section 2(g) of the Securities Purchase Agreement.

  

16.CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

  

(a)“Adjustment
Right” means any right granted with respect to any securities issued in connection with, or with respect to, any
issuance or sale (or deemed issuance or sale in accordance with Section 2) of shares of Common Stock (other than rights
of the type described in Section 3 and 4 hereof) that could result in a decrease in the net consideration received by
the Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement
rights, cash adjustment or other similar rights).

 

(b)“Approved
Stock Plan” means any employee benefit plan or employment agreement which has been approved by the board of directors
of the Company prior to or subsequent to the date hereof pursuant to which shares of Common Stock and standard options to purchase
Common Stock may be issued to any employee, officer or director for services provided to the Company in their capacity as such.

 

(c)“Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities
exchange or trading market for such security, the bid price of such security on the principal securities exchange or trading market
where such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not
apply, the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported
by Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time
of determination, the average of the bid prices of any market makers for such security as reported in the “pink sheets”
by OTC Markets Group Inc. (formerly Pink Sheets LLC) as of such time of determination. If the Bid Price cannot be calculated for
a security as of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such
time of determination shall be the fair market value as mutually determined by the Company and the Holder. If the Company and
the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance
with the procedures in Section 13. All such determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during such period.

    	18

    	 

    
 

(d)“Black
Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment Right (as the
case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Stock on the Trading
Day immediately preceding the public announcement of the execution of definitive documents with respect to the issuance of such
Option or Convertible Security (as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for
a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as of the date
of issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv)
an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined
utilizing a 365 day annualization factor) as of the Trading Day immediately following the date of issuance of such Option,
Convertible Security or Adjustment Right (as the case may be).

 

(e)“Black
Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the
Holder’s request pursuant to Section 4(c), which value is calculated using the Black Scholes Option Pricing Model
obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the greater of
(1) the highest Closing Sale Price of the Common Stock during the period beginning on the Trading Day immediately preceding
the announcement of the applicable Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if
earlier) and ending on the Trading Day of the Holder’s request pursuant to Section 4(c) and (2) the sum of the price
per share being offered in cash in the applicable Fundamental Transaction (if any) plus the value of the non-cash
consideration being offered in the applicable Fundamental Transaction (if any), (ii) a strike price equal to the Exercise
Price in effect on the date of the Holder’s request pursuant to Section 4(c), (iii) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the greater of (1) the remaining term of this Warrant as of the
date of the Holder’s request pursuant to Section 4(c) and (2) the remaining term of this Warrant as of the date of
consummation of the applicable Fundamental Transaction or as of the date of the Holder’s request pursuant to
Section 4(c) if such request is prior to the date of the consummation of the applicable Fundamental Transaction, (iv) a
zero cost of borrow and (v) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the
HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following
the earliest to occur of (x) the public disclosure of the applicable Fundamental Transaction, (y) the consummation of the
applicable Fundamental Transaction and (z) the date on which the Holder first became aware of the applicable Fundamental
Transaction.

 

(f)“Bloomberg”
means Bloomberg, L.P.

    	19

    	 

    
 

(g)“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.

 

(h)“Closing
Sale Price” means, for any security as of any date, the last closing trade price for such security on the Principal
Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate
the closing trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg,
or, if the Principal Market is not the principal securities exchange or trading market for such security, the last trade price
of such security on the principal securities exchange or trading market where such security is listed or traded as reported by
Bloomberg, or if the foregoing does not apply, the last trade price of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg,
the average of the ask prices of any market makers for such security as reported in the “pink sheets” by OTC Markets
Group Inc. (formerly Pink Sheets LLC). If the Closing Sale Price cannot be calculated for a security on a particular date on any
of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security,
then such dispute shall be resolved in accordance with the procedures in Section 13. All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

 

(i)“Common
Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii) any capital stock
into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(j)“Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any
shares of Common Stock.

 

(k)“Effective
Date” means such date the applicable Registration Statement filed pursuant to the Registration
Rights Agreement shall be effective and the prospectus contained therein shall be available for the resale by the Holder of all
of the Registrable Securities (which, solely for clarification purposes, includes at least 100% of all shares of Common
Stock issuable upon conversion of the Notes and upon exercise of the SPA Warrants (without regard for any limitations on conversion,
issuance or exercise set forth therein) in accordance with the terms of the Registration Rights Agreement).

 

(l)“Eligible
Market” means The New York Stock Exchange, the NYSE MKT, the Nasdaq Global Select Market, the Nasdaq Global Market or
the Principal Market.

    	20

    	 

    
 

(m)“Excluded
Securities” means (i) shares of Common Stock or standard options to purchase Common Stock to directors, officers or employees
of the Company in their capacity as such pursuant to an Approved Stock Plan (as defined below), provided that (A) all such issuances
(taking into account the shares of Common Stock issuable upon exercise of such options) after the date hereof pursuant to this
clause (i) do not, in the aggregate, exceed more than 10% of the Common Stock issued and outstanding immediately prior to the date
hereof and (B) the exercise price of any such options is not lowered, none of such options are amended to increase the number of
shares issuable thereunder and none of the terms or conditions of any such options are otherwise materially changed in any manner
that adversely affects any of the Buyers; (ii) shares of Common Stock issued upon the conversion or exercise of Convertible Securities
(other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i)
above) issued prior to the date hereof, provided that the conversion price of any such Convertible Securities (other than standard
options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) is not lowered,
none of such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock
Plan that are covered by clause (i) above) are amended to increase the number of shares issuable thereunder and none of the terms
or conditions of any such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved
Stock Plan that are covered by clause (i) above) are otherwise materially changed in any manner that adversely affects any of the
Buyers; (iii) the shares of Common Stock issuable upon conversion of the Notes or otherwise pursuant to the terms of the Notes,
and (iv) the shares of Common Stock issuable upon exercise of the SPA Warrants.

 

(n)“Expiration
Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if such date falls on a
day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday.

 

(o)“Fundamental
Transaction” means that (i) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more related
transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries is the surviving corporation)
any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its
respective properties or assets to any other Person, or (3) allow any other Person to make a purchase, tender or exchange offer
that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares
of Voting Stock of the Company held by the Person or Persons making or party to, or associated or affiliated with the Persons making
or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other
Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company (not including
any shares of Voting Stock of the Company held by the other Person or other Persons making or party to, or associated or affiliated
with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (5) reorganize,
recapitalize or reclassify the Common Stock, or (ii) any “person” or “group” (as these terms are used for
purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become
the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate
ordinary voting power represented by issued and outstanding Voting Stock of the Company.

    	21

    	 

    
 

(p)“Market
Price” means, for any given date, 85% of the quotient of (I) the Closing Bid Price of the Common Stock on each of the
five (5) consecutive Trading Days ending and including the Trading Day immediately preceding any Adjustment Date, divided by (II)
five (5) (such period, the “Market Price Measuring Period”). All such determinations to be appropriately adjusted
for any stock dividend, stock split, stock combination, reclassification or similar transaction during such Market Price Measuring
Period.

 

(q) “Notes”
has the meaning ascribed to such term in the Securities Purchase Agreement, and shall include all notes issued in exchange therefor
or replacement thereof.

 

(r)“Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(s)“Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

 

(t)“Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.

 

(u)“Principal
Market” means the Nasdaq Capital Market.

 

(v)“Registration
Rights Agreement” means that certain registration rights agreement, dated as of the Closing Date, by and among the Company
and the initial holders of the Notes relating to, among other things, the registration of the resale of the Common Stock issuable
upon conversion of the Notes or otherwise pursuant to the terms of the Notes and exercise of the Warrants, as may be amended from
time to time.

 

(w)“Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving
any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction
shall have been entered into.

 

(x)“Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time
of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise
designated as a Trading Day in writing by the Holder.

 

(y)“Voting
Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have
the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or
trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might
have voting power by reason of the happening of any contingency).

    	22

    	 

    
 

(z)“VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or,
if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities
market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00
p.m., New York time, as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not
apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board
for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average
of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in
the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If VWAP cannot be calculated for such security
on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved in accordance with the procedures in Section 13. All such determinations shall
be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

 

[signature page follows]

    	23

    	 

    
 

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

	 	WPCS International Incorporated 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	By:	 
	 		Name:
	 		Title:

 

    	 

    	 	

    

 

EXHIBIT A

 

EXERCISE
NOTICE

 

TO BE EXECUTED
BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

WPCS INTERNATIONAL
INCORPORATED

 

The undersigned holder
hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of
WPCS International Incorporated, a Delaware corporation (the “Company”), evidenced by Warrant to Purchase Common
Stock No. _______ (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.

 

1.Form of Exercise
Price. The Holder intends that payment of the Exercise Price shall be made as:

 

	 	_________________	a “Cash Exercise” with respect to _________________
Warrant
    Shares; and/or	 
	 	 	 	 
	 	_________________	a “Cashless Exercise” with respect to ______________
Warrant Shares.	 

  

In the event that the
Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder
hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the date
set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.

 

2.Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum
of $___________________ to the Company in accordance with the terms of the Warrant.

 

3.Delivery
of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ Warrant
Shares in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, to the following address:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

Date: _____________ __, _____

 

__________________________

Name of Registered Holder

 

By: ________________________

       Name:

       Title:

    	 

    	 	

    
 

EXHIBIT B

 

ACKNOWLEDGMENT

 

The
Company hereby acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated
number of shares of Common Stock in accordance with the Transfer Agent Instructions dated _________, 20__, from the Company and
acknowledged and agreed to by _______________.

 

 

	 	WPCS International Incorporated
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	By:	 
	 		Name:
	 		Title:Exhibit
10.04

 

SECURITY
AND PLEDGE AGREEMENT

 

SECURITY AND PLEDGE
AGREEMENT, dated as of December __, 2012 (this “Agreement”) made by WPCS International Incorporated,
a Delaware corporation (the “Company”), and each of the undersigned subsidiaries of the Company from time to
time, if any (each a “Grantor” and collectively and together with the Company the “Grantors”),
in favor of Worldwide Stock Transfer LLC, a New Jersey limited liability company, in its capacity as collateral agent
(in such capacity, the “Collateral Agent”) for the “Buyers” (as defined below) party to the Securities
Purchase Agreement, dated as of December 4, 2012 (as amended, restated or otherwise modified from time to time, the “Securities
Purchase Agreement”).

 

WITNESSETH:

 

WHEREAS, the Company
and each party listed as a “Buyer” on the Schedule of Buyers attached thereto (collectively, the “Buyers”)
are parties to the Securities Purchase Agreement, pursuant to which the Company shall be required to sell, and the Buyers shall
purchase or have the right to purchase, the “Notes” (as defined therein) issued pursuant thereto (as such Notes may
be amended, restated, replaced or otherwise modified from time to time in accordance with the terms thereof, collectively, the
“Notes”);

 

WHEREAS, certain Grantors
from time to time (other than the Company) (collectively, the “Guarantors”) may execute and deliver one or more
guarantees (each, a “Guaranty”) in form and substance acceptable to and in favor of the Collateral Agent for
the benefit of itself and the Buyers, with respect to the Company’s obligations under the Securities Purchase Agreement,
the Notes and the Transaction Documents (as defined below);

 

WHEREAS, it is a condition
precedent to the Buyers purchasing the Notes issued pursuant to the Securities Purchase Agreement that the Grantors shall have
executed and delivered to the Collateral Agent this Agreement providing for the grant to the Collateral Agent, for the benefit
of the Buyers, of a security interest in all personal property of each Grantor to secure all of the Company’s obligations
under the Securities Purchase Agreement, the Notes and the other “Transaction Documents” (as defined in the Securities
Purchase Agreement) (the “Transaction Documents”) and the Guarantors’ obligations under any such Guaranty,
as applicable; and

 

WHEREAS, the Grantors
have determined that the execution, delivery and performance of this Agreement directly benefits, and is in the best interest of,
the Grantors.

 

NOW, THEREFORE, in consideration
of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement,
each Grantor agrees with the Collateral Agent, for the benefit of the Buyers, as follows:

 

Section
1.      Definitions.

 

(a)               
Reference is hereby made to the Securities Purchase Agreement and the Notes for a statement of the terms thereof. All terms
used in this Agreement and the recitals hereto which are defined in the Securities Purchase Agreement, the Notes or in Articles
8 or 9 of the Uniform Commercial Code as in effect from time to time in the State of Illinois (the “Code”),
and which are not otherwise defined herein shall have the same meanings herein as set forth therein; provided that terms
used herein which are defined in the Code as in effect in the State of New York on the date hereof shall continue to have the same
meaning notwithstanding any replacement or amendment of such statute except as the Collateral Agent may otherwise determine; provided,
further that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral
is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “Code”
means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof
relating to such perfection, effect of perfection or non-perfection or priority.

 

    	 

    	 

    
 

(b)              
The following terms shall have the respective meanings provided for in the Code: “Accounts”, “Cash Proceeds”,
“Certificate of Title”, “Chattel Paper”, “Commercial Tort Claim”, “Commodity Account”,
“Commodity Contracts”, “Deposit Account”, “Documents”, “Equipment”, “Fixtures”,
“General Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment Property”,
“Letter-of-Credit Rights”, “Noncash Proceeds”, “Payment Intangibles”, “Proceeds”,
“Promissory Notes”, “Security”, “Record”, “Security Account”, “Software”,
and “Supporting Obligations”.

 

(c)               
As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable
equally to both the singular and plural forms of such terms:

 

“Capital Stock”
means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, and (ii) with respect to any Person that is not a corporation,
any and all partnership, membership or other equity interests of such Person.

 

“Cash Release
Amount” has the meaning set forth in the Notes.

 

“Cash and Receivables
Report” has the meaning set forth in the Notes.

 

“Collateral”
has the meaning set forth in Section 2 of this Agreement.

 

“Collateral
Agency Agreement” means that certain Collateral Agency Agreement dated as of the date hereof by and among Collateral
Agent, Buyers and Company.

 

“Collection
Account Bank” has the meaning set forth in Section 5(i)(B) of this Agreement.

 

“Controlled
Account Agreement” means a control agreement, in form and substance satisfactory to Collateral Agent, executed and delivered
by a Grantor, Collateral Agent either an applicable securities intermediary (with respect to a Securities Account) or bank (with
respect to a Deposit Account) with respect to a Controlled Account, as may be amended, restated, supplemented, or otherwise modified
from time to time.

 

    	 

    	 

    
 

“Controlled
Accounts” has the meaning set forth in Section 5(i)(A) of this Agreement.

 

“Copyright Licenses”
means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor and providing
for the grant of any right to use or sell any works covered by any copyright (including, without limitation, all Copyright Licenses
set forth in Schedule II hereto).

 

“Copyrights”
means all domestic and foreign copyrights, whether registered or not, including, without limitation, all copyright rights throughout
the universe (whether now or hereafter arising) in any and all media (whether now or hereafter developed), in and to all original
works of authorship fixed in any tangible medium of expression, acquired or used by any Grantor (including, without limitation,
all copyrights described in Schedule II hereto), all applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings in the United States Copyright Office or in any similar office or agency
of the United States or any other country or any political subdivision thereof), and all reissues, divisions, continuations, continuations
in part and extensions or renewals thereof.

 

“Event of
Default” shall have the meaning set forth in the Notes.

 

“Foreign Currency
Controlled Accounts” means any account of the Company or its Subsidiaries holding non-United States dollar deposits.

 

“Foreign Subsidiary”
has the meaning set forth in Section 2 of this Agreement.

 

“GAAP”
has the meaning set forth in Section 4(c) of this Agreement.

 

“Governmental
Authority” means any nation or government, any Federal, state, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Insolvency
Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code (Chapter 11
of Title 11 of the United States Code) or under any other bankruptcy or insolvency law, assignments for the benefit of creditors,
formal or informal moratoria, compositions, or extensions generally with creditors, or proceedings seeking reorganization, arrangement,
or other similar relief.

 

“Intellectual
Property” means the Copyrights, Trademarks and Patents.

 

“Licenses”
means the Copyright Licenses, the Trademark Licenses and the Patent Licenses.

 

“Lien”
means any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts
and contract rights).

 

“Lockbox, Cash
& Receivables Balance” has the meaning set forth in the Notes.

 

    	 

    	 

    
 

“Master Collection
Account” means account number 7675415108 held at Sovereign Bank, N.A. subject to a Controlled Account Agreement
in favor of the Collateral Agent in the form attached hereto as Exhibit B-3 or such other form reasonably acceptable to
the Collateral Agent.

 

“Non-Public
Certification” has the meaning set forth in Section 11 of this Agreement.

 

“Obligations”
has the meaning set forth in Section 3 of this Agreement.

 

“Operating Accounts”
means, collectively, each of account number 7581049124, 7581049345, 7581049078, 7581049051, 7581050912, 7581049094, 7581049086,
7581050378 and 7581049108 held at Sovereign Bank, N.A. or such other operating accounts as agreed to in writing by Collateral Agent,
in each case, so long as each such account is subject to a Controlled Account Agreement in favor of the Collateral Agent in the
form attached hereto as Exhibit B-1 or such other form reasonably acceptable to the Collateral Agent.

 

“Patent Licenses”
means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor and providing
for the grant of any right to manufacture, use or sell any invention covered by any Patent (including, without limitation, all
Patent Licenses set forth in Schedule II hereto).

 

“Patents”
means all domestic and foreign letters patent, design patents, utility patents, industrial designs, inventions, trade secrets,
ideas, concepts, methods, techniques, processes, proprietary information, technology, know-how, formulae, rights of publicity and
other general intangibles of like nature, now existing or hereafter acquired (including, without limitation, all domestic and foreign
letters patent, design patents, utility patents, industrial designs, inventions, trade secrets, ideas, concepts, methods, techniques,
processes, proprietary information, technology, know-how and formulae described in Schedule II hereto), all applications,
registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States
Patent and Trademark Office, or in any similar office or agency of the United States or any other country or any political subdivision
thereof), and all reissues, divisions, continuations, continuations in part and extensions or renewals thereof.

 

“Perfection
Requirement” or “Perfection Requirements” has the meaning set forth in Section 4(i) of this Agreement.

 

“Person”
means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental Authority.

 

“Pledged Entity”
means, each Person listed from time to time on Schedule IV hereto as a “Pledged Entity,” together with each other Person
all or a portion of whose Capital Stock is acquired or otherwise owned by a Grantor after the date hereof.

 

“Pledged Equity”
means all of each Grantor’s right, title and interest in and to all of the Securities and Capital Stock now or hereafter
owned by such Grantor, regardless of class or designation, including all substitutions therefor and replacements thereof, all proceeds
thereof and all rights relating thereto, also including any certificates representing the Securities and/or Capital Stock, the
right to receive any certificates representing any of the Securities and/or Capital Stock, all warrants, options, share appreciation
rights and other rights, contractual or otherwise, in respect thereof, and the right to receive dividends, distributions of income,
profits, surplus, or other compensation by way of income or liquidating distributions, in cash or in kind, and cash, instruments,
and other property from time to time received, receivable, or otherwise distributed in respect of or in addition to, in substitution
of, on account of, or in exchange for any or all of the foregoing.

 

    	 

    	 

    
 

“Pledged Operating
Agreements” means all of each Grantor’s rights, powers, and remedies under the limited liability company operating
agreements of each Pledged Entity that are limited liability companies, as may be amended, restated, supplemented, or otherwise
modified from time to time.

 

“Pledged Partnership
Agreements” means all of each Grantor’s rights, powers, and remedies under the partnership agreements of each Pledged
Entity that are partnerships, as may be amended, restated, supplemented, or otherwise modified from time to time.

 

“Subsidiary”
shall have the meaning set forth in the Notes.

 

“Sweep”
shall have the meaning as set forth in Section 5(i)(A).

 

“Sweep Accounts”
means, collectively, each of account number 7675413377, 7675414837, 7675414365 and 7675413849 held at Sovereign Bank, N.A.
or such other Controlled Accounts as agreed to in writing by Collateral Agent, in each case, so long as each such account is subject
to a Controlled Account Agreement in favor of the Collateral Agent in the form attached hereto as Exhibit B-2 or such other
form reasonably acceptable to the Collateral Agent.

 

“Trademark Licenses”
means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensor or licensee and providing
for the grant of any right concerning any Trademark, together with any goodwill connected with and symbolized by any such trademark
licenses, contracts or agreements and the right to prepare for sale or lease and sell or lease any and all Inventory now or hereafter
owned by any Grantor and now or hereafter covered by such licenses (including, without limitation, all Trademark Licenses described
in Schedule II hereto).

 

“Trademarks”
means all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s,
Internet domain names, trade styles, designs, logos and other source or business identifiers and all general intangibles of like
nature, now or hereafter owned, adopted, acquired or used by any Grantor (including, without limitation, all domestic and foreign
trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s, Internet domain names,
trade styles, designs, logos and other source or business identifiers described in Schedule II hereto), all applications,
registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States
Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or
any political subdivision thereof), and all reissues, extensions or renewals thereof, together with all goodwill of the business
symbolized by such marks and all customer lists, formulae and other Records of any Grantor relating to the distribution of products
and services in connection with which any of such marks are used.

  

    	 

    	 

    
 

“WPCS Australia”
means, collectively, WPCS Australia Pty Ltd and its direct and wholly owned subsidiaries.

 

“WPCS China”
means, collectively, Taian AGS Pipeline Construction Co. Ltd., WPCS Asia Limited and their direct and wholly owned subsidiaries.

  

SECTION 2.      Grant of
Security Interest. As collateral security for all of the “Obligations” (as defined in Section 3
hereof), each Grantor hereby pledges and assigns to the Collateral Agent for itself and for the benefit of the Buyers, and
grants to the Collateral Agent for itself and for the benefit of the Buyers, a continuing security interest in all personal property
and assets of such Grantor, wherever located and whether now or hereafter existing and whether now owned or hereafter acquired,
of every kind and description, tangible or intangible (collectively, the “Collateral”), including, without
limitation, the following:

 

(a)               
all Accounts;

 

(b)              
all Chattel Paper (whether tangible or electronic);

 

(c)               
the Commercial Tort Claims specified on Schedule VI hereto;

 

(d)              
all Deposit Accounts, all cash and other property from time to time deposited therein and the monies and property in the
possession or under the control of the Collateral Agent or any Buyer or any affiliate, representative, agent or correspondent of
the Collateral Agent or any such Buyer;

 

(e)               all Documents;

 

(f)               
all Equipment;

 

(g)              
all Fixtures;

 

(h)              
all General Intangibles (including, without limitation, all Payment Intangibles);

 

(i)                all Goods;

 

(j)                all Instruments (including, without limitation, Promissory Notes and each certificated Security);

 

(k)              
all Inventory;

 

    	 

    	 

    
 

(l)                all Investment Property (and, regardless of whether classified as Investment Property under the Code, all Pledged Equity,
Pledged Operating Agreements and Pledged Partnership Agreements);

 

(m)            
all Copyrights, Patents and Trademarks, and all Licenses;

 

(n)              
all Letter-of-Credit Rights;

 

(o)              
all Supporting Obligations;

 

(p)              
all other tangible and intangible personal property of each Grantor (whether or not subject to the Code), including, without
limitation, all bank and other accounts and all cash and all investments therein, all proceeds, products, offspring, accessions,
rents, profits, income, benefits, substitutions and replacements of and to any of the property of any Grantor described in the
preceding clauses of this Section 2 (including, without limitation, any proceeds of insurance thereon and all
causes of action, claims and warranties now or hereafter held by each Grantor in respect of any of the items listed above), and
all books, correspondence, files and other Records, including, without limitation, all tapes, desks, cards, Software, data and
computer programs in the possession or under the control of any Grantor or any other Person from time to time acting for any Grantor,
in each case, to the extent of such Grantor’s rights therein, that at any time evidence or contain information relating
to any of the property described in the preceding clauses of this Section 2 or are otherwise necessary or helpful
in the collection or realization thereof; and

 

(q)              
all Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of any and all of the foregoing Collateral;

 

in each case howsoever any Grantor’s
interest therein may arise or appear (whether by ownership, security interest, claim or otherwise).

 

Notwithstanding anything herein to the
contrary, the term “Collateral” shall not include, in the case of a Subsidiary of such Grantor organized under
the laws of a jurisdiction other than the United States, any of the states thereof or the District of Columbia (a “Foreign
Subsidiary”), more than (i) with respect to any Subsidiary of such Grantor organized under the laws of The People’s
Republic of China, 60% of the total combined voting power of all classes of Capital Stock entitled to vote, or (ii) with respect
to any other Persons now or hereafter existing that would constitute a Foreign Subsidiary of such Grantor, 100% of the nonvoting
Capital Stock and 66% of the total combined voting power of all classes of Capital Stock entitled to vote if such action would
result in material adverse, incremental tax liabilities to such Grantor under Section 956 of the Internal Revenue Code; and (B)
any assets owned as of the date hereof by any Subsidiary organized under the laws of The People’s Republic of China or Australia.

 

Each Grantor has agreed not to further
encumber any of its Copyrights, Copyright applications, Copyright registrations and like protections in each work of authorship
and derivative work, whether published or unpublished, any Licenses, Patents, Patent applications and like protections, including
improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part of the same, Trademarks, service
marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, and the goodwill
of the business of such Grantor connected with and symbolized thereby, know-how, operating manuals, trade secret rights, rights
to unpatented inventions, and any claims for damage by way of any past, present, or future infringement of any of the foregoing,
without the Collateral Agent’s prior written consent (which consent may be withheld or given in Collateral Agent’s
sole discretion).

 

    	 

    	 

    
 

The Grantors agree that the pledge of the
shares of Capital Stock acquired by a Grantor of any and all Persons now or hereafter existing who is a Foreign Subsidiary may
be supplemented by one or more separate pledge agreements, deeds of pledge, share charges, or other similar agreements or instruments,
executed and delivered by the relevant Grantors in favor of the Collateral Agent, which pledge agreements will provide for the
pledge of such shares of Capital Stock in accordance with the laws of the applicable foreign jurisdiction. With respect to such
shares of Capital Stock, the Collateral Agent may, at any time and from time to time, in its sole discretion, take actions in such
foreign jurisdictions that will result in the perfection of the Lien created in such shares of Capital Stock.

 

In addition, to secure the prompt and complete
payment, performance and observance of the Obligations and in order to induce the Buyers as aforesaid, each Grantor hereby grants
to Collateral Agent for itself and for the ratable benefit of the Buyers, a right of set-off against the property of such Grantor
held by the Collateral Agent for itself and for the ratable benefit of the Buyers, consisting of property described above in Section
2 now or hereafter in the possession or custody of or in transit to the Collateral Agent, for any purpose, including safekeeping,
collection or pledge, for the account of such Grantor, or as to which such Grantor may have any right or power; provided that such
right shall only to be exercised after an Event of Default has occurred and is continuing.

 

SECTION 3.       Security
for Obligations. The security interest created hereby in the Collateral constitutes continuing collateral security
for all of the following obligations, whether now existing or hereafter incurred (collectively,
the “Obligations”):

 

(a)               
for so long as the Notes are outstanding, (i) the payment by the Company, as and when due and payable (by scheduled maturity,
required prepayment, acceleration, demand or otherwise), of all amounts from time to time owing by it in respect of the Securities
Purchase Agreement, this Agreement, the Notes and the other Transaction Documents, and (ii) in the case of any Guarantors, the
payment by such Guarantors, as and when due and payable of all “Guaranteed Obligations” under (and as defined in) each
Guaranty (if any), as applicable, including, without limitation, in both cases, (A) all principal of and interest on the Notes
(including, without limitation, all interest that accrues after the commencement of any Insolvency Proceeding of any Grantor, whether
or not the payment of such interest is unenforceable or is not allowable due to the existence of such Insolvency Proceeding), and
(B) all fees, interest, premiums, penalties, contract causes of action, costs, commissions, expense reimbursements, indemnifications
and all other amounts due or to become due under this Agreement or any of the Transaction Documents; and

 

(b)              
for so long as the Notes are outstanding, the due performance and observance by each Grantor of all of its other obligations
from time to time existing in respect of any of the Transaction Documents, including without limitation, with respect to any conversion
or redemption rights of the Buyers under the Notes.

 

    	 

    	 

    
 

SECTION 4.       Representations
and Warranties. Each Grantor represents and warrants as of the date of this Agreement as follows:

 

(a)               
Schedule I hereto sets forth (i) the exact legal name of each Grantor, and (ii) the state of incorporation, organization
or formation and the organizational identification number of each Grantor in such state. The information set forth in Schedule
I hereto with respect to such Grantor is true and accurate in all respects. Such Grantor has not previously changed its name,
jurisdiction of organization or organizational identification number from those set forth in Schedule I hereto except as disclosed
in Schedule I hereto.

 

(b)              
There is no pending or, to its knowledge, written notice threatening any action, suit, proceeding or claim affecting any
Grantor before any Governmental Authority or any arbitrator, or any order, judgment or award issued by any Governmental Authority
or arbitrator, in each case, that may adversely affect the grant by any Grantor, or the perfection, of the security interest purported
to be created hereby in the Collateral, or the exercise by the Collateral Agent of any of its rights or remedies hereunder.

 

(c)               
All Federal, state and local tax returns and other reports required by applicable law to be filed by any Grantor have been
filed, or extensions have been obtained, and all taxes, assessments and other governmental charges imposed upon any Grantor or
any property of any Grantor (including, without limitation, all federal income and social security taxes on employees’ wages)
and which have become due and payable on or prior to the date hereof have been paid, except to the extent contested in good faith
by proper proceedings which stay the imposition of any penalty, fine or Lien resulting from the non-payment thereof or for which
the non-payment of such amounts would not have a Material Adverse Effect and with respect to which adequate reserves have been
set aside for the payment thereof in accordance with generally accepted accounting principles consistently applied (“GAAP”).

 

(d)              
All Equipment, Fixtures, Goods and Inventory of each Grantor now existing are, and all Equipment, Fixtures, Goods and Inventory
of each Grantor hereafter existing will be, located and/or based at the addresses specified therefor in Schedule III hereto,
except that each Grantor will give the Collateral Agent written notice of any change in the location of any such Collateral within
20 days of such change, other than to locations set forth on Schedule III hereto (or a new Schedule III delivered
by Grantors to Collateral Agent from time to time) and with respect to which the Collateral Agent has filed financing statements
and otherwise fully perfected its Liens thereon or will take such actions pursuant to Section 5(n).  Each Grantor’s
chief place of business and chief executive office, the place where each Grantor keeps its Records concerning Accounts and all
originals of all Chattel Paper are located at the addresses specified therefor in Schedule III hereto. None of the Accounts
is evidenced by Promissory Notes or other Instruments. Set forth in Schedule IV hereto is a complete and accurate list,
as of the date of this Agreement, of (i) each Promissory Note, Security and other Instrument owned by each Grantor, (ii) each Deposit
Account, Securities Account and Commodities Account of each Grantor, together with the name and address of each institution at
which each such account is maintained, the account number for each such account and a description of the purpose of each such account
and (iii) the name of each Foreign Currency Controlled Account, together with the name and address of each institution at which
each such account is maintained and the amount of cash or cash equivalents held in each such Foreign Currency Controlled Account.
Set forth in Schedule II hereto is a complete and correct list of each trade name used by each Grantor and the name of,
and each trade name used by, each person from which each Grantor has acquired any substantial part of the Collateral.

 

    	 

    	 

    
 

(e)               
Each Grantor has delivered to the Collateral Agent complete and correct copies of each License described in Schedule
II hereto, including all schedules and exhibits thereto, which represent all of the Licenses existing on the date of this Agreement.
Each such License sets forth the entire agreement and understanding of the parties thereto relating to the subject matter thereof,
and there are no other agreements, arrangements or understandings, written or oral, relating to the matters covered thereby or
the rights of such Grantor or any of its affiliates in respect thereof. Each material License now existing is, and any material
License entered into in the future will be, the legal, valid and binding obligation of the parties thereto, enforceable against
such parties in accordance with its terms. No default under any material License by any such party has occurred, nor does any defense,
offset, deduction or counterclaim exist thereunder in favor of any such party.

 

(f)               
Each Grantor owns and controls, or otherwise possesses adequate rights to use, all Trademarks, Patents and Copyrights, which
are the only trademarks, patents, copyrights, inventions, trade secrets, proprietary information and technology, know-how, formulae,
and rights of publicity necessary to conduct its business in substantially the same manner as conducted as of the date hereof.
Schedule II hereto sets forth a true and complete list of all registered copyrights, issued Patents, Trademarks, and Licenses
owned or used by each Grantor as of the date hereof. To the best knowledge of each Grantor, all such Intellectual Property of each
Grantor is subsisting and in full force and effect, has not been adjudged invalid or unenforceable, is valid and enforceable and
has not been abandoned in whole or in part. Except as set forth in Schedule II, no such Intellectual Property is the
subject of any licensing or franchising agreement. Except as set forth in Schedule II, no Grantor has any knowledge of any
conflict with the rights of others to any such Intellectual Property and, to the best knowledge of each Grantor, each Grantor is
not now infringing or in conflict with any such rights of others in any material respect, and to the best knowledge of each Grantor,
no other Person is now infringing or in conflict in any material respect with any such properties, assets and rights owned or used
by each Grantor. Except as set forth in Schedule II, no Grantor has received any notice that it is violating or has violated
the trademarks, patents, copyrights, inventions, trade secrets, proprietary information and technology, know-how, formulae, rights
of publicity or other intellectual property rights of any third party.

 

(g)              
Each Grantor is and will be at all times the sole and exclusive owner of, or otherwise has and will have adequate rights
in, the Collateral free and clear of any Liens, except for Permitted Liens. No effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file in any recording or filing office except such as (i) may
have been filed in favor of the Collateral Agent and/or the Buyers relating to this Agreement or the other Transaction Documents
and (ii) are securing Permitted Liens as of the date hereof and disclosed on Schedule 4(g).

 

    	 

    	 

    
 

(h)              
The exercise by the Collateral Agent of any of its rights and remedies hereunder will not contravene any law or any contractual
restriction binding on or otherwise affecting each Grantor or any of its properties and will not result in or require the creation
of any Lien, upon or with respect to any of its properties.

 

(i)                
No authorization or approval or other action by, and no notice to or filing with, any governmental authority or other regulatory
body, is required for (i) the grant by each Grantor, or the perfection, of the security interest purported to be created
hereby in the Collateral, or (ii) the exercise by the Collateral Agent of any of its rights and remedies hereunder, except
(A) for the filing under the Uniform Commercial Code as in effect in the applicable jurisdiction of the financing statements
described in Schedule V hereto, all of which financing statements have been duly filed and are in full force and effect,
(B) with respect to Deposit Accounts, and all cash and other property from time to time deposited therein, for the execution of
a Controlled Account Agreement with the depository institution with which such account is maintained, as provided in Section 5(i),
(C) with respect to Commodity Contracts, for the execution of a control agreement with the commodity intermediary with which
such commodity contract is carried, as provided in Section 5(i), (D) with respect to the perfection of the security
interest created hereby in the United States Intellectual Property and Licenses, for the recording of the appropriate Assignment
for Security, substantially in the form of Exhibit A hereto in the United States Patent and Trademark Office or the United
States Copyright Office, as applicable, (E) with respect to the perfection of the security interest created hereby in foreign
Intellectual Property and Licenses, for registrations and filings in jurisdictions located outside of the United States and covering
rights in such jurisdictions relating to such foreign Intellectual Property and Licenses, (F) with respect to the perfection of
the security interest created hereby in any Letter-of-Credit Rights, for the consent of the issuer of the applicable letter of
credit to the assignment of proceeds as provided in the Uniform Commercial Code as in effect in the applicable jurisdiction, (G)
with respect to Investment Property constituting uncertificated securities, the applicable Grantor will cause the issuer thereof
either (i) to register the Collateral Agent as the registered owner of such security or (ii) to agree in an authenticated record
with such Grantor and the Collateral Agent that such issuer will comply with instructions with respect to such security originated
by the Collateral Agent without further consent of such Grantor, such authenticated record to be in form and substance satisfactory
to the Collateral Agent, (H) with respect to Investment Property constituting certificated securities or instruments, such items
shall be delivered to and held by or on behalf of the Collateral Agent pursuant hereto and shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent, (I) with respect to any action that may be necessary to obtain control of Collateral constituting
Deposit Accounts, Commodity Contracts, Electronic Chattel Paper, or Letter of Credit Rights, the taking of such actions, and (J)
the Collateral Agent having possession of all Documents, Chattel Paper, Instruments and cash constituting Collateral (subclauses
(A), (B), (C), (D), (E), (F), (G), (H), (I) and (J) each a “Perfection Requirement” and collectively, the “Perfection
Requirements”).

 

(j)                
This Agreement creates in favor of the Collateral Agent a legal, valid and enforceable security interest in the Collateral,
as security for the Obligations. The performance of the Perfection Requirements results in the perfection of such security interests.
Such security interests are, or in the case of Collateral in which each Grantor obtains rights after the date hereof, will be,
perfected, first priority security interests, subject only to Permitted Liens and the Perfection Requirements. Such recordings
and filings and all other action necessary to perfect and protect such security interest have been duly taken or will be taken
pursuant to Section 5(m), and, in the case of Collateral in which any Grantor obtains rights after the date hereof,
will be duly taken, except for the Collateral Agent’s having possession of all Documents, Chattel Paper, Instruments and
cash constituting Collateral after the date hereof and the other actions, filings and recordations described above, including
the Perfection Requirements.

 

    	 

    	 

    
 

(k)              
As of the date hereof, no Grantor holds any Commercial Tort Claims or has knowledge of any pending Commercial Tort Claims,
except for such Commercial Tort Claims described in Schedule VI.

 

(l)                
All of the Pledged Equity is presently owned by the applicable Grantor as set forth in Schedule IV, and is presently represented
by the certificates listed on Schedule IV hereto. As of the date hereof, there are no existing options, warrants, calls or commitments
of any character whatsoever relating to the Pledged Equity other than as contemplated and permitted by the Transaction Documents.
Each Grantor is the sole holder of record and the sole beneficial owner of the Pledged Equity, as applicable. None of the Pledged
Equity has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any
jurisdiction to which such issuance or transfer may be subject. The Pledged Equity constitutes 100% or such other percentage as
set forth of Schedule IV of the issued and outstanding shares of Capital Stock of the applicable Pledged Entity.

 

(m)            
Each Grantor hereby represents and warrants as of the date first written above as follows:

 

(i)                
Such Grantor (A) is a corporation, limited liability company or limited partnership duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, (B) has all requisite corporate, limited liability company
or limited partnership power and authority to conduct its business as now conducted and as presently contemplated and to execute
and deliver this Agreement and each other Transaction Document to which such Grantor is a party, and to consummate the transactions
contemplated hereby and thereby and (C) is duly qualified to do business and is in good standing in each jurisdiction in which
the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary
except where the failure to be so qualified would not result in a Material Adverse Effect.

 

(ii)              
The execution, delivery and performance by each Grantor of this Agreement and each other Transaction Document to which such
Grantor is a party (A) have been duly authorized by all necessary corporate, limited liability company or limited partnership action,
(B) do not and will not contravene its charter or by-laws, its limited liability company or operating agreement or its certificate
of partnership or partnership agreement, as applicable, or any applicable law or any contractual restriction binding on such Grantor
or its properties, (C) do not and will not result in or require the creation of any lien (other than pursuant to any Transaction
Document) upon or with respect to any of its properties, and (D) do not and will not result in any default, noncompliance, suspension,
revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to it or
its operations or any of its properties.

 

    	 

    	 

    
 

(iii)            
Each of this Agreement and the other Transaction Documents to which any Grantor is or will be a party, when delivered, will
be, a legal, valid and binding obligation of the Grantor, enforceable against such Grantor in accordance with its terms, except
as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or other
similar laws and equitable principles (regardless of whether enforcement is sought in equity or at law).

 

(iv)            
There are no conditions precedent to the effectiveness of this Agreement that have not been satisfied or waived.

 

SECTION 5.       Covenants
as to the Collateral. So long as any of the Obligations shall remain outstanding, unless the Collateral Agent shall otherwise
consent in writing:

 

(a)              
Further Assurances.
Each Grantor will at its expense, at any time and from time to time, promptly execute and deliver all further instruments and
documents and take all further action that the Collateral Agent may reasonably request in order to: (i) perfect and protect
the security interest purported to be created hereby; (ii) enable the Collateral Agent to exercise and enforce its rights
and remedies hereunder in respect of the Collateral, including, without limitation, the Master Collection Account, the Sweep Accounts
and the Operating Accounts; or (iii) otherwise effect the purposes of this Agreement, including, without limitation: (A) marking
conspicuously all Chattel Paper and each License and, at the request of the Collateral Agent, each of its Records pertaining to
the Collateral with a legend, in form and substance satisfactory to the Collateral Agent, indicating that such Chattel Paper,
License or Collateral is subject to the security interest created hereby, (B) delivering and pledging to the Collateral Agent
each Promissory Note, Security (subject to the limitations set forth in Section 2), Chattel Paper or other Instrument, now
or hereafter owned by any Grantor, duly endorsed and accompanied by executed instruments of transfer or assignment, all in form
and substance satisfactory to the Collateral Agent, (C) executing and filing (to the extent, if any, that any Grantor’s
signature is required thereon) or authenticating the filing of, such financing or continuation statements, or amendments thereto,
as may be necessary or that the Collateral Agent may reasonably request in order to perfect and preserve the security interest
purported to be created hereby, (D) furnishing to the Collateral Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection with the Collateral in each case as the Collateral
Agent may reasonably request, all in reasonable detail, (E) if any Collateral shall be in the possession of a third party,
notifying such Person of the Collateral Agent’s security interest created hereby and obtaining a written acknowledgment
from such Person that such Person holds possession of the Collateral for the benefit of the Collateral Agent, which such written
acknowledgement shall be in form and substance reasonably satisfactory to the Collateral Agent, (F) if at any time after
the date hereof, any Grantor acquires or holds any Commercial Tort Claim, promptly notifying the Collateral Agent in a writing
signed by such Grantor setting forth a brief description of such Commercial Tort Claim and granting to the Collateral Agent a
security interest therein and in the proceeds thereof, which writing shall incorporate the provisions hereof and shall be in form
and substance satisfactory to the Collateral Agent, (G) upon the acquisition after the date hereof by any Grantor of any
motor vehicle or other Equipment subject to a certificate of title or ownership (other than a Motor Vehicle or Equipment that
is subject to a purchase money security interest), causing the Collateral Agent to be listed as the lienholder on such certificate
of title or ownership and delivering evidence of the same to the Collateral Agent in accordance with Section 5(j)hereof;
and (H) taking all actions required by the Uniform Commercial Code or by other law, as applicable, in any relevant Uniform
Commercial Code jurisdiction, or by other law as applicable in any foreign jurisdiction.

 

    	 

    	 

    
 

(b)              
Location of Equipment and Inventory. Each Grantor will keep the Equipment and Inventory (i) at the locations specified
therefor on Schedule III hereto, or (ii) at such other locations set forth on Schedule III and with respect to which
the Collateral Agent has filed financing statements and otherwise fully perfected its Liens thereon, or (iii) at such other locations
in the United States, provided that within 20 days following the relocation of Equipment or Inventory to such other location or
the acquisition of Equipment or Inventory, Grantor shall deliver to the Collateral Agent a new Schedule III indicating such
new locations.

 

(c)              
Condition of Equipment. Each Grantor will maintain or cause the Equipment (necessary or useful to its business) to be maintained
and preserved in good condition, repair and working order, ordinary wear and tear excepted, and will forthwith, or in the case
of any loss or damage to any Equipment of any Grantor within a commercially reasonable time after the occurrence thereof, make
or cause to be made all repairs, replacements and other improvements in connection therewith which are necessary or desirable,
consistent with past practice, or which the Collateral Agent may reasonably request to such end. Any Grantor will promptly furnish
to the Collateral Agent a statement describing in reasonable detail any such loss or damage in excess of $25,000 per occurrence
to any Equipment.

 

(d)              
Taxes, Etc. Each Grantor agrees to pay promptly when due all property and other taxes, assessments and governmental charges
or levies imposed upon, and all claims (including claims for labor, materials and supplies) against, the Equipment and Inventory,
except to the extent the validity thereof is being contested in good faith by proper proceedings which stay the imposition of
any penalty, fine or Lien resulting from the non-payment thereof and with respect to which adequate reserves in accordance with
GAAP have been set aside for the payment thereof.

 

(e)               
Insurance.

 

(i)                
Each Grantor will, at its own expense, maintain insurance (including, without limitation, commercial general liability and
property insurance) with respect to the Equipment and Inventory in such amounts, against such risks, in such form and with responsible
and reputable insurance companies or associations as is required by any Governmental Authority having jurisdiction with respect
thereto or as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated
and in any event, in amount, adequacy and scope reasonably satisfactory to the Collateral Agent. To the extent requested by the
Collateral Agent at any time and from time to time, each such policy for liability insurance shall provide for all losses to be
paid on behalf of the Collateral Agent and any Grantor as their respective interests may appear, and each policy for property damage
insurance shall provide for all losses to be adjusted with, and paid directly to, the Collateral Agent. In addition to and without
limiting the foregoing, to the extent requested by the Collateral Agent at any time and from time to time, each such policy shall
in addition (A) name the Collateral Agent as an additional insured party and/or loss payee, as applicable, thereunder (without
any representation or warranty by or obligation upon the Collateral Agent) as its interests may appear, (B) contain an agreement
by the insurer that any loss thereunder shall be payable to the Collateral Agent on its own account notwithstanding any action,
inaction or breach of representation or warranty by any Grantor, (C) provide that there shall be no recourse against the Collateral
Agent for payment of premiums or other amounts with respect thereto, and (D) provide that at least 30 days’ prior written
notice of cancellation, lapse, expiration or other adverse change shall be given to the Collateral Agent by the insurer. Any Grantor
will, if so requested by the Collateral Agent, deliver to the Collateral Agent original or duplicate policies of such insurance
and, as often as the Collateral Agent may reasonably request, a report of a reputable insurance broker with respect to such insurance.
Any Grantor will also, at the request of the Collateral Agent, execute and deliver instruments of assignment of such insurance
policies and cause the respective insurers to acknowledge notice of such assignment.

 

    	 

    	 

    
 

(ii)              
Reimbursement under any liability insurance maintained by any Grantor pursuant to this Section 5(e) may be
paid directly to the Person who shall have incurred liability covered by such insurance. In the case of any loss involving damage
to Equipment or Inventory, to the extent paragraph (iii) of this Section 5(e) is not applicable, any proceeds of insurance
maintained by any Grantor pursuant to this Section 5(e) shall be paid to the Collateral Agent, any Grantor will make or
cause to be made the necessary repairs to or replacements of such Equipment or Inventory, and any proceeds of insurance maintained
by any Grantor pursuant to this Section 5(e) (except as otherwise provided in paragraph (iii) in this Section 5(e))
shall be paid by the Collateral Agent to any Grantor as reimbursement for the costs of such repairs or replacements.

 

(iii)            
Notwithstanding anything to the contrary in subsection 5(e)(ii) above, following and during the continuance of an Event
of Default, all insurance payments in respect of such Equipment or Inventory shall be paid to the Collateral Agent and applied
as specified in Section 7(b) hereof.

 

(f)               
Provisions Concerning the Accounts and the Licenses.

 

(i)                
Each Grantor will (A) give the Collateral Agent at least 30 days’ prior written notice of any change in such Grantor’s
name, identity or organizational structure, (B) maintain its jurisdiction of incorporation, organization or formation as set forth
in Schedule I hereto, (C) immediately notify the Collateral Agent upon obtaining an organizational identification number,
if on the date hereof such Grantor did not have such identification number, and (D) keep adequate records concerning the Accounts
and Chattel Paper and permit representatives of the Collateral Agent during normal business hours on reasonable notice to such
Grantor, to inspect and make abstracts from such Records and Chattel Paper.

 

(ii)              
Each Grantor will (except as otherwise provided in this subsection (f)), in accordance with Section 13(m) of
each Note, continue to collect, at its own expense, all amounts due or to become due under the Accounts. In connection with such
collections, any Grantor may (and, at the Collateral Agent’s direction, will) take such action as any Grantor or the Collateral
Agent may deem necessary or advisable to enforce collection or performance of the Accounts; provided, however, that
the Collateral Agent shall have the right at any time following the occurrence and during the continuance of an Event of Default
to notify the account debtors or obligors under any Accounts of the assignment of such Accounts to the Collateral Agent and to
direct such account debtors or obligors to make payment of all amounts due or to become due to any Grantor thereunder directly
to the Collateral Agent or its designated agent and, upon such notification and at the expense of any Grantor and to the extent
permitted by applicable law, to enforce collection of any such Accounts and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as any Grantor might have done. After receipt by any Grantor of a notice from
the Collateral Agent that the Collateral Agent has notified, intends to notify, or has enforced or intends to enforce any Grantor’s
rights against the account debtors or obligors under any Accounts as referred to in the proviso to the immediately preceding sentence,
(A) all amounts and proceeds (including Instruments) received by any Grantor in respect of the Accounts shall be received
in trust for the benefit of the Collateral Agent hereunder, shall be segregated from other funds of any Grantor and shall be forthwith
paid over to the Collateral Agent in the same form as so received (with any necessary endorsement) to be applied as specified
in Section 7(b) hereof, and (B) no Grantor will adjust, settle or compromise the amount or payment of any Account
or release wholly or partly any account debtor or obligor thereof or allow any credit or discount thereon. In addition, upon the
occurrence and during the continuance of an Event of Default, the Collateral Agent may (in its sole and absolute discretion) direct
any or all of the banks and financial institutions with which any Grantor either maintains a Deposit Account or a lockbox or deposits
the proceeds of any Accounts to send immediately to the Collateral Agent by wire transfer (to such account as the Collateral Agent
shall specify, or in such other manner as the Collateral Agent shall direct) all or a portion of such securities, cash, investments
and other items held by such institution. Any such securities, cash, investments and other items so received by the Collateral
Agent shall be applied as specified in accordance with Section 7(b) hereof.

 

    	 

    	 

    
 

(iii)            
Upon the occurrence and during the continuance of any breach or default under any material License referred to in Schedule
II hereto by any party thereto other than any Grantor, each Grantor party thereto will, promptly after obtaining knowledge
thereof, give the Collateral Agent written notice of the nature and duration thereof, specifying what action, if any, it has taken
and proposes to take with respect thereto and thereafter will take reasonable steps to protect and preserve its rights and remedies
in respect of such breach or default, or will obtain or acquire an appropriate substitute License.

 

(iv)            
Each Grantor will, at its expense, promptly deliver to the Collateral Agent a copy of each notice or other communication
received by it by which any other party to any material License referred to in Schedule II hereto purports to exercise any
of its rights or affect any of its obligations thereunder, together with a copy of any reply by such Grantor thereto.

 

(v)              
Each Grantor will exercise promptly and diligently each and every right which it may have under each material License (other
than any right of termination) and will duly perform and observe in all respects all of its obligations under each material License
and will take all action reasonably necessary to maintain such Licenses in full force and effect. No Grantor will, without the
prior written consent of the Collateral Agent, cancel, terminate, amend or otherwise modify in any respect, or waive any provision
of, any material License referred to in Schedule II hereto.

 

(g)              
Transfers and Other Liens.

 

(i)                
Except as expressly permitted in Section 13(f) of the Notes, no Grantor will sell, assign (by operation of law or
otherwise), lease, license, exchange or otherwise transfer or dispose of any of the Collateral, except (A) Inventory in the
ordinary course of business, and (B) worn out or obsolete assets, not necessary to the business.

 

(ii)              
No Grantor will create, suffer to exist or grant any Lien upon or with respect to any Collateral other than a Permitted
Lien.

 

(h)              
Intellectual Property.

 

(i)                
If applicable, each Grantor shall duly execute and deliver the applicable Assignment for Security in the form attached hereto
as Exhibit A. Each Grantor (either itself or through licensees) will, and will cause each licensee thereof to, take all
action necessary to maintain all of the Intellectual Property in full force and effect, including, without limitation, using the
proper statutory notices and markings and using the Trademarks on each applicable trademark class of goods in order to so maintain
the Trademarks in full force and free from any claim of abandonment for non-use, and each Grantor will not (nor permit any licensee
thereof to) do any act or knowingly omit to do any act whereby any Intellectual Property may become invalidated; provided,
however, that so long as no Event of Default has occurred and is continuing, no Grantor shall have an obligation to use
or to maintain any Intellectual Property (A) that relates solely to any product or work, that has been, or is in the process
of being, discontinued, abandoned or terminated, (B) that is being replaced with Intellectual Property substantially similar to
the Intellectual Property that may be abandoned or otherwise become invalid, so long as the failure to use or maintain such Intellectual
Property does not materially adversely affect the validity of such replacement Intellectual Property and so long as such replacement
Intellectual Property is subject to the Lien created by this Agreement or (C) that is substantially the same as another Intellectual
Property that is in full force, so long the failure to use or maintain such Intellectual Property does not materially adversely
affect the validity of such replacement Intellectual Property and so long as such other Intellectual Property is subject to the
Lien and security interest created by this Agreement. Each Grantor will cause to be taken all necessary steps in any proceeding
before the United States Patent and Trademark Office and the United States Copyright Office or any similar office or agency in
any other country or political subdivision thereof to maintain each registration of the Intellectual Property (other than the Intellectual
Property described in the proviso to the immediately preceding sentence), including, without limitation, filing of renewals, affidavits
of use, affidavits of incontestability and opposition, interference and cancellation proceedings and payment of maintenance fees,
filing fees, taxes or other governmental fees. If any Intellectual Property (other than Intellectual Property described in the
proviso to the second sentence of subsection (i) of this clause (h)) is infringed, misappropriated, diluted or otherwise violated
in any material respect by a third party, each Grantor shall (x) upon learning of such infringement, misappropriation, dilution
or other violation, promptly notify the Collateral Agent and (y) promptly sue for infringement, misappropriation, dilution or other
violation, seek injunctive relief where appropriate and recover any and all damages for such infringement, misappropriation, dilution
or other violation, or take such other actions as such Grantor shall deem appropriate under the circumstances to protect such Intellectual
Property. Each Grantor shall furnish to the Collateral Agent from time to time upon its request statements and schedules further
identifying and describing the Intellectual Property and Licenses and such other reports in connection with the Intellectual Property
and Licenses as the Collateral Agent may reasonably request, all in reasonable detail and promptly upon request of the Collateral
Agent, following receipt by the Collateral Agent of any such statements, schedules or reports, each Grantor shall modify this Agreement
by amending Schedule II hereto, as the case may be, to include any Intellectual Property and License, as the case may be,
which becomes part of the Collateral under this Agreement and shall execute and authenticate such documents and do such acts as
shall be necessary or, in the reasonable judgment of the Collateral Agent, desirable to subject such Intellectual Property and
Licenses to the Lien and security interest created by this Agreement. Notwithstanding anything herein to the contrary, upon the
occurrence and during the continuance of an Event of Default, no Grantor may abandon or otherwise permit any Intellectual Property
to become invalid without the prior written consent of the Collateral Agent, and if any Intellectual Property is infringed, misappropriated,
diluted or otherwise violated in any material respect by a third party, each Grantor will take such action as the Collateral Agent
shall deem appropriate under the circumstances to protect such Intellectual Property.

 

    	 

    	 

    
 

(ii)              
In no event shall any Grantor, either itself or through any agent, employee, licensee or designee, file an application for
the registration of any Trademark or Copyright or the issuance of any Patent with the United States Patent and Trademark Office
or the United States Copyright Office, as applicable, or in any similar office or agency of the United States or any country or
any political subdivision thereof unless it gives the Collateral Agent prior written notice thereof. Upon request of the Collateral
Agent, any Grantor shall execute, authenticate and deliver any and all assignments, agreements, instruments, documents and papers
as the Collateral Agent may reasonably request to evidence the Collateral Agent’s security interest hereunder in such Intellectual
Property and the General Intangibles of any Grantor relating thereto or represented thereby, and each Grantor hereby appoints the
Collateral Agent its attorney-in-fact to execute and/or authenticate and file all such writings for the foregoing purposes, all
acts of such attorney being hereby ratified and confirmed, and such power (being coupled with an interest) shall be irrevocable
until the indefeasible payment in full in cash of all of the Obligations in full.

 

(i)              Deposit,
Commodities and Securities Accounts. (A) Each Grantor shall cause each bank and other financial institution with an
account referred to in Schedule IV hereto (each such account, a “Controlled Account”) other than the
Foreign Currency Controlled Accounts of WPCS Australia and WPCS China, to execute and deliver to the Collateral Agent a Controlled
Account Agreement, in form and substance satisfactory to the Collateral Agent (which, as of the date hereof, shall be (x) in the
form of Exhibit B-1 for the Operating Accounts, (y) in the form of Exhibit B-2 for the Sweep Accounts and (z) in
the form of Exhibit B-3 for the Master Collection Account), duly executed by each Grantor and such bank or financial institution,
or enter into other arrangements in form and substance satisfactory to the Collateral Agent, pursuant to which such institution
shall irrevocably agree, inter alia, subject to Section 15(m) of each Note, with respect to each Deposit Account,
that (i) it will comply at any time with the instructions originated by the Collateral Agent to such bank or financial institution
directing the disposition of cash, Commodity Contracts, securities, Investment Property and other items from time to time credited
to such account, without further consent of each Grantor, (ii) all Commodity Contracts, securities, Investment Property and other
items of each Grantor deposited with such institution shall be subject to a perfected, first priority security interest in favor
of the Collateral Agent, (iii) any right of set off (other than recoupment of standard fees), banker’s Lien or other
similar Lien, security interest or encumbrance shall be fully waived as against the Collateral Agent, and (iv) upon receipt
of written notice from the Collateral Agent during the continuance of an Event of Default, such bank or financial institution
shall immediately send to the Collateral Agent by wire transfer (to such account as the Collateral Agent shall specify, or in
such other manner as the Collateral Agent shall direct) all such cash, the value of any Commodity Contracts, securities, Investment
Property and other items held by it. Without the prior written consent of the Collateral Agent, no Grantor shall create or maintain
any Deposit Account, Commodity Account or Securities Account except for the accounts set forth in Schedule IV hereto. So
long as any Notes remain outstanding, (i) the Company shall cause all cash or cash equivalents received from any Person with respect
to any Accounts Receivable (as defined in the Notes) (other than with respect to WPCS Australia or WPCS China) to be initially
deposited into either (x) a Sweep Account or (y) the Master Collection Account and (ii) the Company and the Collateral Agent agree
that any cash or cash equivalents held in any Sweep Account on any Business Day shall be transferred into the Master Collection
Account at the end of such Business Day (each, a “Sweep”) and the parties hereto shall take all actions necessary
to ensure that each such Sweep occurs each Business Day any Notes remain outstanding. Notwithstanding anything herein to the contrary,
neither the Company nor any of its Subsidiaries (excluding the Accounts of WPCS Australia and WPCS China) shall open or otherwise
permit to exist any Accounts other than Controlled Accounts without the prior written consent of the Collateral Agent.

 

    	 

    	 

    
 

(B)Upon receipt of
each Cash and Receivables Report from Company, Collateral Agent shall, so long as no Event of Default has occurred and is continuing
or could reasonably be expected to result therefrom, promptly instruct the Collection Account Bank to, at Company’s expense,
transfer an amount equal to the Cash Release Amount (if any) set forth on such Cash and Receivables Report from the Master Collection
Account solely to the extent of cash available therein, to one of the Operating Accounts (or to such other Deposit Account subject
to a Controlled Account Agreement as directed by Company in writing); provided that, after giving effect to each such transfer,
the Lockbox, Cash & Receivables Balance shall exceed the Adjusted Note Obligations (as defined in the Notes and as reported
to Collateral Agent by Company) as of such date.

 

(C)If on the last
day of each calendar month, the aggregate available balance in the Foreign Currency Controlled Accounts (other than the Foreign
Currency Controlled Accounts of WPCS Australia and WPCS China) exceeds the US Dollar Equivalent of $50,000, the Company shall,
within three (3) Business Days, cause an amount equal to such excess to be transferred from such Foreign Currency Controlled Accounts
and deposited into the Master Collection Account; provided, that except in accordance with Section 5(i)(D) below, so long as the
Notes remain outstanding neither the Company nor any of its Subsidiaries shall transfer (directly or indirectly, whether in connection
with an intercompany loan, a capital contribution, or otherwise) more than an aggregate of the US Dollar Equivalent of $25,000
to any non-United States Subsidiary.

 

    	 

    	 

    
 

(D)If on the last
day of each calendar month, the aggregate available balance in the Foreign Currency Controlled Accounts of WPCS Australia exceeds
the US Dollar Equivalent of $400,000 (the “Australia Transfer Cap”), the Company shall, within three (3) Business
Days, cause an amount equal to such excess to be transferred from such Foreign Currency Controlled Accounts and deposited into
the Master Collection Account (the “Australia Overage Amounts”); provided, that so long as the Notes remain
outstanding neither the Company nor any of its Subsidiaries (other than WPCS Australia) shall transfer (directly or indirectly,
whether in connection with an intercompany loan, a capital contribution, or otherwise) more than an aggregate of the US Dollar
Equivalent of (A) $200,000 plus the Australia Overage Amounts minus (B) any amounts previously transferred to WPCS Australia by
the Company or any of its Subsidiaries (other than WPCS Australia) from the Issuance Date to immediately prior to such transfer
(an “Australia Transfer”), provided further that, notwithstanding the foregoing, neither the Company nor any
of its Subsidiaries (other than WPCS Australia) shall consummate an Australia Transfer if after giving effect to such Australia
Transfer the aggregate available balance in the Foreign Currency Controlled Accounts of WPCS Australia exceeds the Australia Transfer
Cap.

 

(E)During the period
commencing on the Subscription Date through the date no Notes remain outstanding, neither the Company nor any of its Subsidiaries
(other than WPCS China) shall transfer (directly or indirectly, whether in connection with an intercompany loan, a capital contribution,
or otherwise) any cash or cash equivalents to WPCS China.

 

(j)                
Motor Vehicles.

 

(i)                
Upon the Collateral Agent’s written request, each Grantor shall deliver to the Collateral Agent originals of the certificates
of title or ownership for all motor vehicles with a value in excess of $10,000, owned by it with the Collateral Agent listed as
lienholder, for the benefit of the Buyers.

 

(ii)              
Each Grantor hereby appoints the Collateral Agent as its attorney-in-fact, effective the date hereof and terminating upon
the termination of this Agreement, for the purpose of (A) executing on behalf of such Grantor title or ownership applications for
filing with appropriate state agencies to enable motor vehicles now owned or hereafter acquired by such Grantor to be retitled
and the Collateral Agent listed as lienholder thereof, (B) filing such applications with such state agencies, and (C) executing
such other documents and instruments on behalf of, and taking such other action in the name of, such Grantor as the Collateral
Agent may deem necessary or advisable to accomplish the purposes hereof (including, without limitation, for the purpose of creating
in favor of the Collateral Agent a perfected Lien on the motor vehicles and exercising the rights and remedies of the Collateral
Agent hereunder). This appointment as attorney-in-fact is coupled with an interest and is irrevocable until all of the Obligations
are indefeasibly paid in full in cash.

 

(iii)            
Any certificates of title or ownership delivered pursuant to the terms hereof shall be accompanied by odometer statements
for each motor vehicle covered thereby.

 

    	 

    	 

    
 

(iv)            
So long as no Event of Default shall have occurred and be continuing, upon the request of any Grantor, the Collateral Agent
shall execute and deliver to any Grantor such instruments as such Grantor shall reasonably request to remove the notation of the
Collateral Agent as lienholder on any certificate of title for any motor vehicle; provided, however, that any such
instruments shall be delivered, and the release effective, only upon receipt by the Collateral Agent of a certificate from any
Grantor stating that such motor vehicle is to be sold or has suffered a casualty loss (with title thereto in such case passing
to the casualty insurance company therefor in settlement of the claim for such loss) and the amount that any Grantor will receive
as sale proceeds or insurance proceeds. Any proceeds of such sale or casualty loss shall be paid to the Collateral Agent hereunder
immediately upon receipt, to be applied to the Obligations then outstanding.

 

(k)              
Control. Each Grantor hereby agrees to take any or all action that may be necessary or that the Collateral Agent
may reasonably request in order for the Collateral Agent to obtain control in accordance with Sections 9-105 – 9-107 of the
Code with respect to the following Collateral: (i) Electronic Chattel Paper, (ii) Investment Property, and (iii) Letter-of-Credit
Rights.

 

(l)                
Inspection and Reporting. Each Grantor shall permit the Collateral Agent, or any agent or representatives thereof
or such professionals or other Persons as the Collateral Agent may designate (at Grantors’ sole cost and expense) (i) to
examine and make copies of and abstracts from any Grantor’s records and books of account, (ii) to visit and inspect its properties,
(iii) to verify materials, leases, Instruments, Accounts, Inventory and other assets of any Grantor from time to time, (iii) to
conduct audits, physical counts, appraisals and/or valuations, examinations at the locations of any Grantor. Each Grantor shall
also permit the Collateral Agent, or any agent or representatives thereof or such professionals or other Persons as the Collateral
Agent may designate to discuss such Grantor’s affairs, finances and accounts with any of its directors, officers, managerial
employees, independent accountants or any of its other representatives. Without limiting the foregoing, the Collateral Agent may,
at any time, in the Collateral Agent’s own name, in the name of a nominee of the Collateral Agent, or in the name of any
Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of such Grantor, parties to contracts
with such Grantor and/or obligors in respect of Instruments of such Grantor to verify with such Persons, to the Collateral Agent’s
reasonable satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper,
payment intangibles and/or other receivables.

 

(m)            
Future Subsidiaries. If any Grantor hereafter creates or acquires any Subsidiary, simultaneously with the creation
or acquisition of such Subsidiary, such Grantor shall (i) cause such Subsidiary to become a party to this Agreement as an additional
“Grantor” hereunder, (ii) deliver to Collateral Agent revised Schedules to this Agreement, as appropriate (including,
without limitation, a revised Schedule IV to reflect the grant by such Grantor of a lien on all Pledged Equity now or hereafter
owned by such Grantor), (iii) cause such Subsidiary to duly execute and deliver a guaranty of the Obligations in favor of the Collateral
Agent in form and substance acceptable to the Collateral Agent, and (iv) duly execute and/or cause to be delivered such opinions
of counsel and other documents, in form and substance acceptable to the Collateral Agent, as the Collateral Agent shall reasonably
request with respect thereto; provided, however, that no Grantor shall pledge Capital Stock in excess of shares representing 100%
of the nonvoting Capital Stock and 66% of the total combined voting power of all classes of Capital Stock entitled to vote of any
and all Persons now or hereafter existing which would constitute a Foreign Subsidiary thereof if such action would result in material
adverse, incremental tax liabilities to such Grantor under Section 956 of the IRC. Each Grantor hereby authorizes Collateral Agent
to attach such revised Schedules to this Agreement and agrees that all Pledged Equity listed on any revised Schedule delivered
to Collateral Agent shall for all purposes hereunder be considered Collateral. The Grantors agree that the pledge of the shares
of Capital Stock acquired by a Grantor of Foreign Subsidiary may be supplemented by one or more separate pledge agreements, deeds
of pledge, share charges, or other similar agreements or instruments, executed and delivered by the relevant Grantor in favor of
the Collateral Agent, which pledge agreements will provide for the pledge of such shares of Capital Stock in accordance with the
laws of the applicable foreign jurisdiction. With respect to such shares of Capital Stock, the Collateral Agent may, at any time
and from time to time, in its sole discretion, take actions in such foreign jurisdictions that will result in the perfection of
the Lien created in such shares of Capital Stock.

 

    	 

    	 

    
  

Section
6.      Additional Provisions
Concerning the Collateral.

 

(a)               
To the maximum extent permitted by applicable law, and for the purpose of taking any action that the Collateral Agent may
deem necessary or advisable to accomplish the purposes of this Agreement, each Grantor hereby (i) authorizes the Collateral Agent
to execute any such agreements, instruments or other documents in such Grantor’s name and to file such agreements, instruments
or other documents in such Grantor’s name and in any appropriate filing office, (ii) authorizes the Collateral Agent at any
time and from time to time to file, one or more financing or continuation statements, and amendments thereto, relating to the Collateral
(including, without limitation, any such financing statements that (A) describe the Collateral as “all assets” or “all
personal property” (or words of similar effect) or that describe or identify the Collateral by type or in any other manner
as the Collateral Agent may determine regardless of whether any particular asset of such Grantor falls within the scope of Article
9 of the Uniform Commercial Code or whether any particular asset of such Grantor constitutes part of the Collateral, and (B) contain
any other information required by Part 5 of Article 9 of the Code for the sufficiency or filing office acceptance of any financing
statement, continuation statement or amendment, including, without limitation, whether such Grantor is an organization, the type
of organization and any organizational identification number issued to such Grantor) and (iii) ratifies such authorization
to the extent that the Collateral Agent has filed any such financing or continuation statements, or amendments thereto, prior to
the date hereof. A photocopy or other reproduction of this Agreement or any financing statement covering the Collateral or any
part thereof shall be sufficient as a financing statement where permitted by law.

 

(b)               Each
Grantor hereby irrevocably appoints the Collateral Agent as its attorney-in-fact and proxy, with full authority in the place
and stead of such Grantor and in the name of such Grantor or otherwise, from time to time in the Collateral
Agent’s discretion, to take any action and to execute any instrument which the Collateral Agent may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, (i) to obtain and adjust
insurance required to be paid to the Collateral Agent pursuant to Section 5(e) hereof, (ii) to ask, demand,
collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in
respect of any Collateral, (iii) to receive, endorse, and collect any drafts or other instruments, documents and chattel
paper in connection with clause (i) or (ii) above, (iv) to file any claims or take any action or institute any proceedings
which the Collateral Agent may deem necessary or desirable for the collection of any Collateral or otherwise to enforce the
rights of the Collateral Agent and the Buyers with respect to any Collateral, (v) to execute assignments, licenses and other
documents to enforce the rights of the Collateral Agent and the Buyers with respect to any Collateral and (vi) to verify any
and all information with respect to any and all Accounts. This power is coupled with an interest and is irrevocable until all
of the Obligations are indefeasibly paid in full in cash.

 

    	 

    	 

    
 

(c)                For
the purpose of enabling the Collateral Agent to exercise rights and remedies hereunder, at such time as the Collateral Agent
shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Grantor hereby grants to the
Collateral Agent, to the extent assignable, an irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to any Grantor) to use, assign, license or sublicense any Intellectual Property now owned or hereafter
acquired by such Grantor, wherever the same may be located, including in such license reasonable access to all media in which
any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout
thereof. Notwithstanding anything contained herein to the contrary, but subject to the provisions of the Securities Purchase
Agreement that limit the right of any Grantor to dispose of its property, and Section 5(g) and Section 5(h) hereof,
so long as no Event of Default shall have occurred and be continuing, any Grantor may exploit, use, enjoy, protect, license,
sublicense, assign, sell, dispose of or take other actions with respect to the Intellectual Property in the ordinary course
of its business. In furtherance of the foregoing, unless an Event of Default shall have occurred and be continuing, the
Collateral Agent shall from time to time, upon the request of any Grantor, execute and deliver any instruments, certificates
or other documents, in the form so requested, which such Grantor shall have certified are appropriate (in such
Grantor’s judgment) to allow it to take any action permitted above (including relinquishment of the license provided
pursuant to this clause (c) as to any Intellectual Property). Further, upon the indefeasible payment in full in cash of all
of the Obligations, the Collateral Agent (subject to Section 10(e) hereof) shall release and reassign to any
Grantor all of the Collateral Agent’s right, title and interest in and to the Intellectual Property, and the Licenses,
all without recourse, representation or warranty whatsoever. The exercise of rights and remedies hereunder by the Collateral
Agent shall not terminate the rights of the holders of any licenses or sublicenses theretofore granted by each Grantor in
accordance with the second sentence of this clause (c). Each Grantor hereby releases the Collateral Agent from any claims,
causes of action and demands at any time arising out of or with respect to any actions taken or omitted to be taken by the
Collateral Agent under the powers of attorney granted herein other than actions taken or omitted to be taken through the
Collateral Agent’s gross negligence or willful misconduct, as determined by a final determination of a court of
competent jurisdiction.

 

(d)               If
any Grantor fails to perform any agreement or obligation contained herein, the Collateral Agent may itself perform, or cause
performance of, such agreement or obligation, in the name of such Grantor or the Collateral Agent, and the expenses of the
Collateral Agent incurred in connection therewith shall be payable by such Grantor pursuant to Section 8 hereof
and shall be secured by the Collateral.

 

    	 

    	 

    
 

(e)               
The powers conferred on the Collateral Agent hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral in its possession and the accounting
for moneys actually received by it hereunder, the Collateral Agent shall have no duty as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.

 

(f)               
Anything herein to the contrary notwithstanding (i) each Grantor shall remain liable under the Licenses and otherwise
with respect to any of the Collateral to the extent set forth therein to perform all of its obligations thereunder to the same
extent as if this Agreement had not been executed, (ii) the exercise by the Collateral Agent of any of its rights hereunder
shall not release any Grantor from any of its obligations under the Licenses or otherwise in respect of the Collateral, and (iii) the
Collateral Agent shall not have any obligation or liability by reason of this Agreement under the Licenses or with respect to any
of the other Collateral, nor shall the Collateral Agent be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

 

(g)              
As long as no Event of Default shall have occurred and be continuing and until written notice shall be given to the applicable
Grantor:

 

(i)                
Each Grantor shall have the right, from time to time, to vote and give consents with respect to the Pledged Equity, or any
part thereof for all purposes not inconsistent with the provisions of this Agreement, the Securities Purchase Agreement or any
other Transaction Document; provided, however, that no vote shall be cast, and no consent shall be given or action taken, which
would have the effect of impairing the position or interest of Collateral Agent in respect of the Pledged Equity or which would
authorize, effect or consent to (unless and to the extent expressly permitted by the Securities Purchase Agreement):

 

(A)the
dissolution or liquidation, in whole or in part, of a Pledged Entity;

 

(B)the
consolidation or merger of a Pledged Entity with any other Person;

 

(C)the
sale, disposition or encumbrance of all or substantially all of the assets of a Pledged Entity, except for Liens in favor of Collateral
Agent;

 

(D)any
change in the authorized number of shares, the stated capital or the authorized share capital of a Pledged Entity or the issuance
of any additional shares of its Capital Stock; or

 

(E)the
alteration of the voting rights with respect to the Capital Stock of a Pledged Entity.

 

(h)              
(i)Each Grantor shall be entitled, from time to time, to collect and receive for its own use all cash dividends and
interest paid in respect of the Pledged Equity to the extent not in violation of the Securities Purchase Agreement other than
any and all: (A) dividends and interest paid or payable other than in cash in respect of any Pledged Equity, and instruments and
other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Equity; (B) dividends
and other distributions paid or payable in cash in respect of any Pledged Equity in connection with a partial or total liquidation
or dissolution or in connection with a reduction of capital, capital surplus or paid-in capital of a Pledged Entity; and (C) cash
paid, payable or otherwise distributed, in respect of principal of, or in redemption of, or in exchange for, any Pledged Equity;
provided, however, that until actually paid all rights to such distributions shall remain subject to the Lien created by this Agreement;
and

 

    	 

    	 

    
 

(ii)all dividends
and interest (other than such cash dividends and interest as are permitted to be paid to any Grantor in accordance with clause
(i) above) and all other distributions in respect of any of the Pledged Equity, whenever paid or made, shall be delivered to Collateral
Agent to hold as Pledged Equity and shall, if received by any Grantor, be received in trust for the benefit of Collateral Agent,
be segregated from the other property or funds of such Grantor, and be forthwith delivered to Collateral Agent as Pledged Equity
in the same form as so received (with any necessary endorsement).

 

SECTIOn 7.      Remedies
Upon Event of Default. If any Event of Default shall have occurred and be continuing:

 

(a)                The
Collateral Agent may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein
or otherwise available to it, all of the rights and remedies of a secured party upon default under the Code (whether or not
the Code applies to the affected Collateral), and also may (i) take absolute control of the Collateral, including,
without limitation, transfer into the Collateral Agent’s name or into the name of its nominee or nominees (to the
extent the Collateral Agent has not theretofore done so) and thereafter receive, for the benefit of the Buyers, all payments
made thereon, give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as
though it were the outright owner thereof, (ii) require each Grantor to, and each Grantor hereby agrees that it will at
its expense and upon request of the Collateral Agent forthwith, assemble all or part of its respective Collateral as directed
by the Collateral Agent and make it available to the Collateral Agent at a place or places to be designated by the Collateral
Agent that is reasonably convenient to both parties, and the Collateral Agent may enter into and occupy any premises owned or
leased by any Grantor where the Collateral or any part thereof is located or assembled for a reasonable period in order to
effectuate the Collateral Agent’s rights and remedies hereunder or under law, without obligation to any Grantor in
respect of such occupation, and (iii) without notice except as specified below and without any obligation to prepare or
process the Collateral for sale, (A) sell the Collateral or any part thereof in one or more parcels at public or private
sale (including, without limitation, by credit bid), at any of the Collateral Agent’s offices or elsewhere, for cash,
on credit or for future delivery, and at such price or prices and upon such other terms as the Collateral Agent may deem
commercially reasonable and/or (B) lease, license or dispose of the Collateral or any part thereof upon such terms as
the Collateral Agent may deem commercially reasonable. Each Grantor agrees that, to the extent notice of sale or any other
disposition of its respective Collateral shall be required by law, at least ten (10) days’ notice to any Grantor of the
time and place of any public sale or the time after which any private sale or other disposition of its respective Collateral
is to be made shall constitute reasonable notification. The Collateral Agent shall not be obligated to make any sale or other
disposition of any Collateral regardless of notice of sale having been given. The Collateral Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. Each Grantor hereby waives any claims against the
Collateral Agent and the Buyers arising by reason of the fact that the price at which its respective Collateral may have
been sold at a private sale was less than the price which might have been obtained at a public sale or was less than the
aggregate amount of the Obligations, even if the Collateral Agent accepts the first offer received and does not offer such
Collateral to more than one offeree, and waives all rights that any Grantor may have to require that all or any part of such
Collateral be marshaled upon any sale (public or private) thereof. Each Grantor hereby acknowledges that (i) any such
sale of its respective Collateral by the Collateral Agent shall be made without warranty, (ii) the Collateral Agent may
specifically disclaim any warranties of title, possession, quiet enjoyment or the like, and (iii) such actions set forth
in clauses (i) and (ii) above shall not adversely affect the commercial reasonableness of any such sale of Collateral.
In addition to the foregoing, (1) upon written notice to any Grantor from the Collateral Agent after and during the
continuance of an Event of Default, such Grantor shall cease any use of the Intellectual Property or any trademark, patent or
copyright similar thereto for any purpose described in such notice; (2) the Collateral Agent may, at any time and from time
to time after and during the continuance of an Event of Default, upon 10 days’ prior notice to such Grantor, license,
whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any of the Intellectual Property,
throughout the universe for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its
sole discretion determine; and (3) the Collateral Agent may, at any time, pursuant to the authority granted in Section 6 hereof
or otherwise (such authority being effective upon the occurrence and during the continuance of an Event of Default), execute
and deliver on behalf of such Grantor, one or more instruments of assignment of the Intellectual Property (or any application
or registration thereof), in form suitable for filing, recording or registration in any country.

 

    	 

    	 

    
 

(b)               Any
cash held by the Collateral Agent as Collateral and all Cash Proceeds received by the Collateral Agent in respect of any sale
of or collection from, or other realization upon, all or any part of the Collateral shall be applied (after payment of any
amounts payable to the Collateral Agent pursuant to Section 8 hereof) by the Collateral Agent against, all or
any part of the Obligations in such order as the Collateral Agent shall elect, consistent with the provisions of the
Collateral Agency Agreement. Any surplus of such cash or Cash Proceeds held by the Collateral Agent and remaining after the
indefeasible payment in full in cash of all of the Obligations shall be paid over to whomsoever shall be lawfully entitled to
receive the same or as a court of competent jurisdiction shall direct.

 

(c)               
In the event that the proceeds of any such sale, collection or realization are insufficient to pay all amounts to which
the Collateral Agent and the Buyers are legally entitled, each Grantor shall be liable for the deficiency, together with interest
thereon at the highest rate specified in the Notes for interest on overdue principal thereof or such other rate as shall be fixed
by applicable law, together with the costs of collection and the reasonable fees, costs, expenses and other client charges of any
attorneys employed by the Collateral Agent to collect such deficiency.

 

    	 

    	 

    
 

(d)              
To the extent that applicable law imposes duties on the Collateral Agent to exercise remedies in a commercially reasonable
manner, each Grantor acknowledges and agrees that it is commercially reasonable for the Collateral Agent (i) to fail to incur expenses
deemed significant by the Collateral Agent to prepare Collateral for disposition or otherwise to transform raw material or work
in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access
to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents
for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against
account debtors or other persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to
exercise collection remedies against account debtors and other Persons obligated on Collateral directly or through the use of collection
agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same
business as any Grantor, for expressions of interest in acquiring all or any portion of such Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature,
(viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets
in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment,
(xi) to purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss, collection or disposition
of Collateral or to provide to the Collateral Agent a guaranteed return from the collection or disposition of Collateral, or (xii)
to the extent deemed appropriate by the Collateral Agent, to obtain the services of brokers, investment bankers, consultants, attorneys
and other professionals to assist the Collateral Agent in the collection or disposition of any of the Collateral. Each Grantor
acknowledges that the purpose of this section is to provide non-exhaustive indications of what actions or omissions by the Collateral
Agent would be commercially reasonable in the Collateral Agent’s exercise of remedies against the Collateral and that other
actions or omissions by the Collateral Agent shall not be deemed commercially unreasonable solely on account of not being indicated
in this section. Without limitation upon the foregoing, nothing contained in this section shall be construed to grant any rights
to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or
by applicable law in the absence of this section.

 

(e)               
The Collateral Agent shall not be required to marshal any present or future collateral security (including, but not limited
to, this Agreement and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such
collateral security or other assurances of payment in any particular order, and all of the Collateral Agent’s rights hereunder
and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights,
however existing or arising. To the extent that any Grantor lawfully may, each Grantor hereby agrees that it will not invoke any
law relating to the marshaling of collateral which might cause delay in or impede the enforcement of the Collateral Agent’s
rights under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the
Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent
that it lawfully may, each Grantor hereby irrevocably waives the benefits of all such laws.

 

    	 

    	 

    
 

 

Section
8.      Indemnity and Expenses.

 

(a)               
Each Grantor agrees, jointly and severally, to defend, protect, indemnify and hold the Collateral Agent and each of the
Buyers, jointly and severally, harmless from and against any and all claims, damages, losses, liabilities, obligations, penalties,
fees, costs and expenses (including, without limitation, reasonable legal fees, costs, expenses, and disbursements of such Person’s
counsel) to the extent that they arise out of or otherwise result from this Agreement (including, without limitation, enforcement
of this Agreement), except to the extent resulting from such Person’s gross negligence or willful misconduct, as determined
by a final judgment of a court of competent jurisdiction.

 

(b)              
Each Grantor agrees, jointly and severally, to pay to the Collateral Agent upon demand the amount of any and all costs and
expenses, including the reasonable fees, costs, expenses and disbursements of counsel for the Collateral Agent and of any experts
and agents (including, without limitation, any collateral trustee which may act as agent of the Collateral Agent), which the Collateral
Agent may incur in connection with (i) the preparation, negotiation, execution, delivery, recordation, administration, amendment,
waiver or other modification or termination of this Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights
of the Collateral Agent hereunder, or (iv) the failure by any Grantor to perform or observe any of the provisions hereof.

 

SECTION 9.     
Notices, Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed (by certified
mail, postage prepaid and return receipt requested), telecopied, e-mailed or delivered, if to any Grantor that is a Foreign Subsidiary
at the address of the Company, if to any Grantor that is not a Foreign Subsidiary at its address specified on the signature pages
below and if to the Collateral Agent to it, at its address specified on the signature pages below; or as to any such Person, at
such other address as shall be designated by such Person in a written notice to all other parties hereto complying as to delivery
with the terms of this Section 9. All such notices and other communications shall be effective (a) if sent by certified
mail, return receipt requested, when received or three days after deposited in the mails, whichever occurs first, (b) if telecopied
or e-mailed, when transmitted (during normal business hours) and confirmation is received, and otherwise, the day after the notice
or communication was transmitted and confirmation is received, or (c) if delivered in person, upon delivery. For the avoidance
of doubt, the Foreign Subsidiaries, as Grantors, hereby appoint the Company as its agent for receipt of service of process and
all notices and other communications in the United States at the address specified below.

 

Section
10.      Miscellaneous.

 

(a)               
No amendment of any provision of this Agreement shall be effective unless it is in writing and signed by each Grantor and
the Collateral Agent, and no waiver of any provision of this Agreement, and no consent to any departure by each Grantor therefrom,
shall be effective unless it is in writing and signed by each Grantor and the Collateral Agent, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose for which given.

 

    	 

    	 

    
 

(b)              
No failure on the part of the Collateral Agent to exercise, and no delay in exercising, any right hereunder or under any
of the other Transaction Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Collateral Agent
or any Buyer provided herein and in the other Transaction Documents are cumulative and are in addition to, and not exclusive of,
any rights or remedies provided by law. The rights of the Collateral Agent or any Buyer under any of the other Transaction Documents
against any party thereto are not conditional or contingent on any attempt by such Person to exercise any of its rights under any
of the other Transaction Documents against such party or against any other Person, including but not limited to, any Grantor.

 

(c)               
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or thereof
or affecting the validity or enforceability of such provision in any other jurisdiction.

 

(d)              
This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect
until the indefeasible payment in full in cash of the Obligations, and (ii) be binding on each Grantor and all other Persons who
become bound as debtor to this Agreement in accordance with Section 9-203(d) of the Code and shall inure, together with all rights
and remedies of the Collateral Agent and the Buyers hereunder, to the benefit of the Collateral Agent and the Buyers and their
respective permitted successors, transferees and assigns. Without limiting the generality of clause (ii) of the immediately preceding
sentence, without notice to any Grantor, the Collateral Agent and the Buyers may assign or otherwise transfer their rights and
obligations under this Agreement and any of the other Transaction Documents, to any other Person and such other Person shall thereupon
become vested with all of the benefits in respect thereof granted to the Collateral Agent and the Buyers herein or otherwise. Upon
any such assignment or transfer, all references in this Agreement to the Collateral Agent or any such Buyer shall mean the assignee
of the Collateral Agent or such Buyer. None of the rights or obligations of any Grantor hereunder may be assigned or otherwise
transferred without the prior written consent of the Collateral Agent, and any such assignment or transfer without the consent
of the Collateral Agent shall be null and void.

 

(e)               
Upon the indefeasible payment in full in cash of the Obligations, (i) this Agreement and the security interests created
hereby shall terminate and all rights to the Collateral shall revert to the respective Grantor that granted such security interests
hereunder, and (ii) the Collateral Agent will, upon any Grantor’s request and at such Grantor’s expense, (A) return
to such Grantor such of the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof,
and (B) execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination,
all without any representation, warranty or recourse whatsoever.

 

(f)               
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES (EXCEPT 5-1401 OF THE NEW YORK GENERAL OBLIGATION
LAW). FURTHER, THE LAW OF THE STATE OF NEW YORK SHALL APPLY TO ALL DISPUTES OR CONTROVERSIES ARISING OUT OF OR CONNECTED TO OR
WITH THIS AGREEMENT WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES (EXCEPT 5-1401 OF THE NEW YORK GENERAL OBLIGATION LAW).

 

    	 

    	 

    
 

(g)              
CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER DOCUMENT RELATED HERETO SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK
OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH GRANTOR HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE FOREGOING
COURTS. EACH GRANTOR HEREBY IRREVOCABLY APPOINTS THE SECRETARY OF STATE OF THE STATE OF NEW YORK AS ITS AGENT FOR SERVICE OF PROCESS
IN RESPECT OF ANY SUCH ACTION OR PROCEEDING AND FURTHER IRREVOCABLY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS DEEMED APPROPRIATE BY ANY OF THE FOREGOING COURTS. EACH GRANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE FOREGOING COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, AT ITS ADDRESS FOR NOTICES AS SET FORTH ON THE SIGNATURE PAGE HERETO AND TO THE SECRETARY OF STATE OF THE STATE OF NEW
YORK, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL
AGENT TO SERVE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH
GRANTOR IN ANY OTHER JURISDICTION. ANY GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY OF
THE FOREGOING COURTS REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT ANY GRANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR
ITS PROPERTY, EACH GRANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS.

 

(h)              
WAIVER OF JURY TRIAL, ETC. EACH GRANTOR HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT,
INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH,
OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS, AND
AGREES THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH GRANTOR CERTIFIES
THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE COLLATERAL AGENT OR ANY BUYER HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT COLLATERAL AGENT OR ANY BUYER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING
WAIVERS. EACH GRANTOR HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE COLLATERAL AGENT ENTERING INTO
THIS AGREEMENT.

 

    	 

    	 

    
 

(i)                
Each Grantor irrevocably consents to the service of process of any of the aforesaid courts in any such action, suit or proceeding
by the mailing of copies thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid,
to any Grantor at its address provided herein, such service to become effective 10 days after such mailing.

 

(j)                
Nothing contained herein shall affect the right of the Collateral Agent to serve process in any other manner permitted by
law or commence legal proceedings or otherwise proceed against any Grantor or any property of any Grantor in any other jurisdiction.

 

(k)              
Each Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit
or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

 

(l)                
Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.

 

(m)            
This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each
of which shall be deemed to be an original, but all of which taken together constitute one and the same Agreement. Delivery of
any executed counterpart of a signature page of this Agreement by pdf, facsimile or other electronic transmission shall be effective
as delivery of a manually executed counterpart of this Agreement.

 

(n)              
This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of
the Obligations is rescinded or must otherwise be returned by Collateral Agent, any Buyer or any other Person (upon (i) the occurrence
of any Insolvency Proceeding of any of the Company or any Grantor or (ii) otherwise, in all cases as though such payment had not
been made.

 

    	 

    	 

    
 

SECTION 11.     
Material Non-Public Information. Upon the delivery of any notices, documents, information or materials to Collateral Agent
by Company and/or any of its subsidiaries or any of its or their respective officers, directors, employees and/or agents in accordance
with or pursuant to this Agreement or any other Transaction Document, the Company shall certify or cause to be certified in writing
to Collateral Agent whether such notices, documents, information or materials contain any material non-public information. If
Collateral Agent receives any such notices, documents, information or materials with such certification that such notices, documents,
information or materials contain material non-public information and the Collateral Agent reasonably determines, in its sole discretion,
the Buyers should receive such notices, documents, information or materials, (x) Collateral Agent shall deliver a written notice
to the Company that Collateral Agent intends to promptly deliver such notice, documents or other information or materials to the
Buyers, (y) the Company shall within one (1) Business Day after any receipt of such written notice from Collateral Agent (A) publicly
disclose such material, non-public information on a Current Report on Form 8-K or otherwise and (B) deliver written notice to
Collateral Agent certifying that such notice, documents, information or materials no longer contain any material, non-public information
(a “Non-Public Certification”) and (z) promptly following the receipt of such Non-Public Certification, Collateral
Agent shall delivery such notice, documents, information or materials to each Buyer. Any delivery by Collateral Agent of any notice,
documents or other information or materials to any Buyer shall be deemed to be a delivery by the Company to such Buyer for all
purposes hereunder and pursuant to any other Transaction Documents. To the extent Collateral Agent receives any notices, documents,
information or materials from Company and/or any of its subsidiaries or any of its or their respective officers, directors, employees
and agents without concurrent certification by Company that such notices, documents, information or materials do not contain any
non-public information or the Company fails to deliver a Non-Public Certification as required hereunder, Collateral Agent shall
retain such items or information and shall not deliver any such items or information to any Buyer, but shall deliver written notice
to each Buyer that it has received items or information that may or may not contain material non-public information without a
certification by Company as to the contents thereof (but without otherwise describing in any detail such items or information).
Upon receipt of such notice, each Buyer may provide further instruction to Collateral Agent with respect to distribution of such
notices, documents, information or materials to such Buyer (and not to any other Buyer) and Collateral Agent shall have no further
duty with respect thereto until receipt of such instruction from any such Buyer. Notwithstanding anything herein or in any Transaction
Document to the contrary, the Collateral Agent shall not deliver to any Buyer any documents or other information or materials
without prior certification by Company that such notices, documents, information or materials do not contain material non-public
information, without the prior written consent of such Buyer (other than notices of the occurrence of an Event of Default).

 

[REMAINDER OF THIS PAGE INTENTIONALLY
LEFT BLANK]

 

    	 

    	 

    

 

 

IN WITNESS WHEREOF, each
Grantor has caused this Agreement to be executed and delivered by its officer thereunto duly authorized, as of the date first above
written.

  

	 	COMPANY:
	 	 
	 	WPCS INTERNATIONAL INCORPORATED
	 	 
	 	By: 	 
	 	 	Name: Joseph Heater
 Title: Chief Financial Officer
	 	 	 
	 	 	Address: One East Uwchlan Avenue, Suite 301, Exton, PA 19341
	 	 	 
	 	 	Facsimile: (610) 903-0401

 

	 	GRANTORS:
	 	 
	 	WPCS INTERNATIONAL – PORTLAND, INC.
	 	 
	 	By: 	 
	 	 	Name: Joseph Heater
 Title: Authorized Signatory
	 	 	 
	 	 	Address: 15241 NE 90th Street, Redmond, WA 98072
	 	 	 
	 	 	Facsimile: (610) 903-0401

 

	 	WPCS INTERNATIONAL – SEATTLE, INC.
	 	 
	 	By: 	 
	 	 	Name: Joseph Heater
 Title: Authorized Signatory
	 	 	 
	 	 	Address: 15241 NE 90th Street, Redmond, WA 98072
	 	 	 
	 	 	Facsimile: (610) 903-0401

 

    	 

    	 

    
 

	 	WPCS INTERNATIONAL – SUISUN CITY, INC.
	 	 
	 	By: 	 
	 	 	Name: Joseph Heater
 Title: Authorized Signatory
	 	 	 
	 	 	Address: 521 Railroad Avenue, Suisun City, CA 94585
	 	 	 
	 	 	Facsimile: (610) 903-0401

 

 

	 	WPCS INTERNATIONAL – TRENTON, INC.
	 	 
	 	By: 	 
	 	 	Name: Joseph Heater
 Title: Authorized Signatory
	 	 	 
	 	 	Address: 1095 Cranbury South River Road, Suite 5, Monroe Township, NJ 08831
	 	 	 
	 	 	Facsimile: (610) 903-0401

 

 

	 	WPCS INTERNATIONAL – HARTFORD, INC.
	 	 
	 	By: 	 
	 	 	Name: Joseph Heater
 Title: Authorized Signatory
	 	 	 
	 	 	Address: One East Uwchlan Avenue, Suite 301, Exton, PA 19341
	 	 	 
	 	 	Facsimile: (610) 903-0401

 

	 	WPCS INTERNATIONAL – LAKEWOOD, INC.
	 	 
	 	By: 	 
	 	 	Name: Joseph Heater
 Title: Authorized Signatory
	 	 	 
	 	 	Address: One East Uwchlan Avenue, Suite 301, Exton, PA 19341
	 	 	 
	 	 	Facsimile: (610) 903-0401

    	 

    	 

    

	ACCEPTED BY:
	 
	WORLDWIDE STOCK TRANSFER LLC, as Collateral Agent
	 	 
	By:                                                             	 
	Name:	 
	Title:	 
	 	 	 

 

	Address:	Worldwide Stock Transfer LLC
 433 Hackensack Avenue
 Level L
 Hackensack, NJ 07601
 Attn: Jonathan Gellis
	 	 
	Facsimile:  201-820-2010
 Email:  jgellis@wwstr.com

    	 

    	 

    
 

SCHEDULE I

 

Legal Names; Organizational Identification
Numbers;

States or Jurisdiction of Organization

 

	Grantor’s Name	State of Organization	Federal

Employer I.D.	Organizational I.D.

 

    	 

    	 

    

 

SCHEDULE II

 

Intellectual Property

 

Trademarks

 

	Grantor	Country	Trademark	Application or

Registration No.	Filing Date	Registration

Date	Assignees
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

Patents

 

	Grantor	Country	Patent	Patent  No.	Filing Date	Issue Date	Assignees
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

    	 

    	 

    
 

	Grantor	Country	Patent	Patent  No.	Filing Date	Issue Date	Assignees
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

 

Design Patents

 

	Grantor	Country	Patent	Patent  No.	Filing Date	Issue Date	Assignees
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

    	 

    	 

    
 

Patent Applications Pending

 

	Grantor	Country	Application	Application  No.	Filing Date	Status	Assignees
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

Copyrights

 

Notice of Potential Patent Claim

 

    	 

    	 

    

 

SCHEDULE III

 

Locations

 

	Grantor’s Name	Chief Executive Office	Chief Place of Business	Books and Records	Inventory,

Equipment, Etc.
	 	 	 	 	 

    	 

    	 

    

 

SCHEDULE IV

 

Promissory Notes, Securities, Deposit
Accounts,

Securities Accounts and Commodities Accounts

 

Securities

 

	Grantor	Name of Issuer / Pledged Entity	Number

of Shares	Class	Certificate

No.(s)
	 	 	 	 	 

 

 

Deposit Accounts, Securities Accounts and Commodities
Accounts

 

	Grantor	Name and Address of Institution	Purpose of the Account	Account No.
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

Foreign Currency Controlled Accounts

 

	Entity	Name and Address of Institution	Amount Held in Account
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

    	 

    	 

    

 

SCHEDULE V

 

Financing Statements

 

	Grantors	Jurisdictions For Filing Financing Statements
	WPCS International Incorporated	State of Delaware

 

 

    	 

    	 

    

 

SCHEDULE VI

 

Commercial Tort Claims

 

    	 

    	 

    

 

EXHIBIT A

 

Assignment For Security

[Trademarks] [Patents] [Copyrights]

 

WHEREAS, ______________________________
(the “Assignor”) [has adopted, used and is using, and holds all right, title and interest in and to, the trademarks
and service marks listed on the annexed Schedule 1A, which trademarks and service marks are registered or applied for
in the United States Patent and Trademark Office (the “Trademarks”)] [holds all right, title and interest in
the letter patents, design patents and utility patents listed on the annexed Schedule 1A, which patents are issued
or applied for in the United States Patent and Trademark Office (the “Patents”)] [holds all right, title and
interest in the copyrights listed on the annexed Schedule 1A, which copyrights are registered in the United States Copyright
Office (the “Copyrights”)];

 

WHEREAS, the Assignor
has entered into a Security and Pledge Agreement, dated as of December __, 2012 (as amended, restated or otherwise modified from
time to time the “Security Agreement”), in favor of _____________, as collateral agent for certain purchasers
(the “Assignee”);

 

WHEREAS, pursuant to
the Security Agreement, the Assignor has assigned to the Assignee and granted to the Assignee for the benefit of the Buyers (as
defined in the Security Agreement) a continuing security interest in all right, title and interest of the Assignor in, to and under
the [Trademarks, together with, among other things, the good-will of the business symbolized by the Trademarks] [Patents] [Copyrights]
and the applications and registrations thereof, and all proceeds thereof, including, without limitation, any and all causes of
action which may exist by reason of infringement thereof and any and all damages arising from past, present and future violations
thereof (the “Collateral”), to secure the payment, performance and observance of the “Obligations”
(as defined in the Security Agreement);

 

NOW, THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Assignor does hereby pledge, convey,
sell, assign, transfer and set over unto the Assignee and grants to the Assignee for the benefit of the Buyers a continuing security
interest in the Collateral to secure the prompt payment, performance and for the benefit of the Buyers observance of the Obligations.

 

The Assignor does hereby
further acknowledge and affirm that the rights and remedies of the Assignee with respect to the Collateral are more fully set forth
in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set forth
herein.

 

    	 

    	 

    

 

IN WITNESS WHEREOF, the
Assignor has caused this Assignment to be duly executed by its officer thereunto duly authorized as of _____________, 2012

 

	 	[GRANTORS]
	 	 
	 	By: 	
	 	 	Name:
 Title:

 

    	 

    	 

    

STATE OF ____________

                                               ss.:

COUNTY OF __________

 

On this ____ day of _______________,
2012, before me personally came ________________, to me known to be the person who executed the foregoing instrument, and who,
being duly sworn by me, did depose and say that s/he is the ________________ of _______________________________________, a ____________________,
and that s/he executed the foregoing instrument in the firm name of _______________________________________, and that s/he had
authority to sign the same, and s/he acknowledged to me that he executed the same as the act and deed of said firm for the uses
and purposes therein mentioned.

 

                                                           

 

    	 

    	 

    

 

SCHEDULE 1A TO ASSIGNMENT FOR SECURITY

 

[Trademarks and Trademark Applications]

[Patent and Patent Applications]

[Copyright and Copyright Applications]

Owned by ______________________________

 

    	 

    	 

    

 

SCHEDULE 4(g)

 

Effective Financing Statements

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