Exhibit 99.2
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of the 13th day of November, 2002
AMONG:
WPCS INTERNATIONAL INCORPORATED, a corporation formed pursuant to the
laws of the State of Delaware and having an office for business located
at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 00, Xxxxx, Xxxxxxxxxxxx 00000
("WPCS")
AND:
XXXXXX XXXXXXX, an individual having an address at 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00, Xxxxx, Xxxxxxxxxxxx 00000
("Xxxxxxx")
AND:
X. XXXXXXX LLC, a body corporate formed pursuant to the laws of the
State of Delaware and having an office for business located at 000 Xxxx
Xxxxxxxxx Xxxx, Xxxxxxxxx 0, Xxxxx 00, Xxxx Xxxxxxx, XX 00000
("Xxxxxxx")
AND:
X.X. XXX XXXXXXXXXX, an individual having an address at 00 Xxxxx Xxxxx,
Xxxxxxxxxx, XX 00000
("von Schaumburg", and together with Xxxxxxx and Xxxxxxx, the
"Principals")
WHEREAS:
A. WPCS is a reporting company whose common stock is quoted on the NASD
"Bulletin Board" and which is engaged in the business of providing fixed
wireless telecommunications services;
X. Xxxxxxx is the beneficial and registered owner of 5,380,000 shares of
WPCS's common stock ("WPCS Shares"), Xxxxxxx is the beneficial and registered
owner of 850,000 WPCS Shares and von Schaumburg is the beneficial and registered
owner of 150,000 WPCS Shares;
X. Xxxxxxx and von Schaumburg acquired the WPCS Shares held by them
pursuant to the terms of an Agreement and Plan of Merger made as of November __,
2002 between WPCS, Xxxxxxx, von Schaumburg, Invisinet, Inc. and Invisinet
Acquisitions Corp. (the "Merger
Agreement");
D. As an inducement to enter into the Merger Agreement, WPCS has agreed to
grant to the Principals certain registration and other rights in respect of the
WPCS Shares held by them and Xxxxxxx has agreed to grant certain additional
rights to Xxxxxxx and von Schaumburg.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
REGISTRATION RIGHTS
PIGGY-BACK REGISTRATION
1.1 The Principals will be entitled to "piggy-back" registration rights on
registrations of WPCS, subject to the right of WPCS or its underwriters to
reduce in view of market conditions the number of shares of the Principals
proposed to be registered; provided, however, that such reductions will not
result in less than 10% of the WPCS Shares held by each Principal being
registered.
REGISTRATION EXPENSES
1.2 The registration expenses (exclusive of underwriting discounts and
commissions) of all of the registrations under Section 1.1 above will be borne
by WPCS.
TRANSFER OF REGISTRATION RIGHTS
1.3 The registration rights may be transferred to a third party transferee
who acquires at least 10% of a Principal's WPCS Shares. Transfer of registration
rights to a family member or for estate planning purposes will be without
restriction as to minimum shareholding, but any shares so transferred shall be
included in the calculation of the 10% figure referred to in Section 1.1 hereof.
OTHER REGISTRATION PROVISIONS
1.4 Other registration rights provisions may be agreed to as are
reasonable, including cross-indemnification, the agreement by the Principals (if
requested by the underwriters in a public offering) not to sell any unregistered
common stock they hold for a period of up to 120 days following the effective
date of the registration statement of such offering, the period of time in which
the registration statement will be kept effective, underwriting arrangements and
the like.
TERMINATION OF REGISTRATION RIGHTS
1.5 The registration obligations of WPCS will terminate on the date which
is 90 days after a Principal ceases to be an affiliate of WPCS, provided that
such date is at least one year from the closing of the Merger Agreement.
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ARTICLE 2
CONTROL OFFERS
TAG-ALONG RIGHTS
2.1 In the event of any proposed transfer or sale or other disposition of
WPCS Shares by Xxxxxxx and/or his Related Persons other than (i) a public
offering of shares of Common Stock pursuant to a registration statement under
the Securities Act of 1933, or (ii) a sale or transfer by Xxxxxxx to his
affiliates or Related Persons, and such transfer or sale is not in compliance
with the volume limitations imposed by paragraph (e) of Rule 144 under the
Securities Act of 1933 (a "Qualified Transfer"), von Schaumburg, Xxxxxxx and
each of their Related Persons (collectively, the "Tag-Along Investors") shall
each have the right (the "Tag-Along Right") to include in such Qualified
Transfer (in replacement for WPCS Shares otherwise to be transferred in such
Qualified Transfer by Xxxxxxx) that number of WPCS Shares equal to the product
of (a) and (b) where:
(a) is the total number of WPCS Shares which Xxxxxxx and/or his
Related Persons proposes to sell, and
(b) is a fraction, the numerator of which is the total number of
WPCS Shares held by the particular Tag-Along Investor, and the
denominator of which is the sum of
(i) the total number of WPCS Shares held by the
Principals, and
(ii) the total number of fully-diluted WPCS Shares owned
by persons entitled to the benefits of any other
"tag-along" rights arising as a result of such
transfer (including WPCS Shares held by the Tag-Along
Investors)
provided that there shall be no Tag-Along Rights where an offer to purchase some
or all of the WPCS Shares held by the Principals is made, on equal terms, to all
of the Principals by any third party.
TRANSFER NOTICE
2.2 Xxxxxxx shall, not less than 10 days prior to a proposed Qualified
Transfer, notify in writing the other Principals of such proposed Qualified
Transfer (the "Transfer Notice"). The Transfer Notice shall set forth: (i) the
name of the purchaser and the number of WPCS Shares proposed to be transferred;
(ii) the name and address of the proposed purchaser; (iii) the proposed amount
and form of consideration and terms and conditions of payment offered by such
proposed purchaser; and (iv) that the proposed purchaser has been informed of
the Tag-Along Right provided for in this Article 2 and has agreed to purchase
WPCS Shares in accordance with the terms hereof.
TAG-ALONG NOTICE
2.3 The Tag-Along Right may be exercised by any Tag-Along Investor by
delivery of a written notice to Xxxxxxx proposing to sell WPCS Shares on the
terms set forth in the Transfer Notice (a "Tag-Along Notice") within 10 days
following delivery of the Transfer Notice to the Tag-Along Investor. The
Tag-Along Notice shall state the number of WPCS Shares (the "Tag-Along Shares")
that such Tag-Along Investor proposes to include in such transfer to the
proposed purchaser (which number shall not exceed the maximum number of WPCS
Shares that may be transferred pursuant to Section 2.1 above).
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EFFECT OF TAG-ALONG NOTICE
2.4 Delivery of the Tag-Along Notice by any Tag-Along Investor in
accordance with Section 2.3 above shall constitute a binding agreement by such
Tag-Along Investor to sell the Tag-Along Shares, on the terms and conditions
specified in the Transfer Notice, to the proposed purchaser or any other
purchaser or purchasers designated by Xxxxxxx.
RELATED PERSON
2.5 For purposes of this Agreement, the term "Related Person" means, with
respect to any individual, (i) the individual's spouse, siblings, lineal
ascendants and descendants or (ii) any trust, corporation, partnership or other
entity, the beneficiaries, stockholders, partners, owners or persons holding an
50% or more controlling interest of which consist entirely of persons described
in subsection (i) above.
TERMINATION OF TAG-ALONG RIGHTS
2.6 The Tag-Along Rights will terminate three years from the date of this
Agreement.
ARTICLE 3
GENERAL PROVISIONS
NOTICE
3.1 Any notice required or permitted to be given by any party will be
deemed to be given when in writing and delivered to the address for notice of
the intended recipient by personal delivery, prepaid single certified or
registered mail, or Facsimile. Any notice delivered by mail shall be deemed to
have been received on the fourth business day after and excluding the date of
mailing, except in the event of a disruption in regular postal service in which
event such notice shall be deemed to be delivered on the actual date of receipt.
Any notice delivered personally or by Facsimile shall be deemed to have been
received on the actual date of delivery.
ADDRESSES FOR SERVICE
3.2 The address for service of notice of each of the parties hereto is as
follows:
(a) WPCS or Xxxxxxx:
WPCS International Incorporated
000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 00
Xxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx, President
Phone: (000) 000-0000
Facsimile: (000) 000-0000
(b) X. Xxxxxxx LLC
Attention: President
000 Xxxx Xxxxxxxxx Xxxx, Xxxxxxxxx 0
Xxxxx 00, Xxxx Xxxxxxx, XX 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
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(c) X.X. xxx Xxxxxxxxxx
00 Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
CHANGE OF ADDRESS
3.3 Any party may, by notice to the other parties change its address for
notice to some other address in North America and will so change its address for
notice whenever the existing address or notice ceases to be adequate for
delivery by hand. A post office box may not be used as an address for service.
FURTHER ASSURANCES
3.4 Each of the parties will execute and deliver such further and other
documents and do and perform such further and other acts as any other party may
reasonably require to carry out and give effect to the terms and intention of
this Agreement.
TIME OF THE ESSENCE
3.5 Time is expressly declared to be the essence of this Agreement.
ENTIRE AGREEMENT
3.6 The provisions contained herein constitute the entire agreement among
WPCS and the Principals respecting the subject matter hereof and supersede all
previous communications, representations and agreements, whether verbal or
written, among WPCS and the Principals with respect to the subject matter
hereof.
ENUREMENT
3.7 This Agreement will enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.
ASSIGNMENT
3.8 This Agreement is not assignable without the prior written consent of
the parties hereto.
COUNTERPARTS
3.9 This Agreement may be executed in counterparts, each of which when
executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Agreement. Delivery of
executed copies of this Agreement by Facsimile will constitute proper delivery,
provided that originally executed counterparts are delivered to the parties
within a reasonable time thereafter.
APPLICABLE LAW
3.10 This Agreement is subject to the laws of the State of Delaware.
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IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
day and year first above written.
WPCS INTERNATIONAL
INCORPORATED
/s/ Xxxxx Xxxxxxxxxxx By: /s/ Xxxxxx Xxxxxxx
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Witness Xxxxxx Xxxxxxx, President
Xxxxx Xxxxxxxxxxx
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Name
0000 X. Xxxxx
Xxxxxxx XX 00000
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Address
/s/ Xxxxx Xxxxxxxxxxx /s/ Xxxxxx Xxxxxxx
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Witness XXXXXX XXXXXXX
Xxxxx Xxxxxxxxxxx
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Name
0000 X. Xxxxx
Xxxxxxx XX 00000
------------------------
Address
X. XXXXXXX LLC
/s/ Xxxxx Xxxxxxxxxxx By: /s/ Xxxx Xxxxxxxx
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Witness Xxxx Xxxxxxxx, President
Xxxxx Xxxxxxxxxxx
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Name
0000 X. Xxxxx
Xxxxxxx XX 00000
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Address
/s/ Xxxxx Xxxxxxxxxxx /s/ X.X. xxx Xxxxxxxxxx
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Witness X.X. xxx Xxxxxxxxxx
Xxxxx Xxxxxxxxxxx
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Name
0000 X. Xxxxx
Xxxxxxx XX 00000
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Address
This is page 6 to the Registration Rights Agreement dated November 13, 2002
between WPCS International Incorporated, Xxxxxx Xxxxxxx, X. Xxxxxxx LLC and X.X.
xxx Xxxxxxxxxx.
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