Unassociated Document


    Exhibit
      10.8 

    ESCROW
      AGREEMENT

     

    This
      Agreement is made as of the 2nd day of
      August,
      2007, by and among Hak-Fong Ma and Robert Winterhalter, each a member (the
      “Members”) of Max Engineering LLC, a company organized and existing under the
      laws of the State of Texas, with its principal offices located at 9000 SW
      Freeway, Suite 410, Houston, TX 77074 ("Max"), WPCS International Incorporated,
      a corporation organized and existing under the laws of the State of Delaware,
      with its principal offices at One East Uwchlan Avenue, Suite 301, Exton
      Pennsylvania 19341  ("WPCS"), and Sichenzia Ross Friedman Ference LLP,
      a New York limited liability partnership having offices at 61 Broadway, New
      York, New York 10006 (the "Escrow Agent").

     

    RECITALS

     

    The
      Members, Max and WPCS are parties
      to that certain Membership Interest Purchase Agreement, dated as of August
      2,
      2007 (the "Purchase Agreement").  WPCS and the Members wish to provide
      for the escrow of certain monies pursuant to the Purchase Agreement, and desire
      that the Escrow Agent hold such monies in connection therewith pursuant to
      the
      provisions of this Agreement, and the Escrow Agent is willing to hold such
      cash
      pursuant to the provisions of this Agreement.  All capitalized terms
      contained herein and not otherwise defined shall have the meaning ascribed
      to
      them in the Purchase Agreement.  In consideration of the premises and
      mutual covenants, agreements, representations and warranties contained herein,
      the parties hereby agree as follows:

     

    1.           WPCS
      and Members hereby appoint the Escrow Agent to hold $120,000 in cash (the
      "Escrowed Funds"), in a trust account, and the Escrow Agent accepts such
      appointment, subject to the terms and conditions hereof.  WPCS has,
      prior to the execution of this Escrow Agreement, delivered by way of wire
      transfer to the Escrow Agent the Escrowed Funds and hereby irrevocably instructs
      the Escrow Agent to deal with the Escrowed Funds on and subject to the terms
      hereof.  In executing this Escrow Agreement the Escrow Agent
      acknowledges receipt of the Escrowed Funds and the instructions contained
      herein.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

     

    (b)           In
      the event the NTAV as of the Closing Date shall be less than $288,000, the
      Cash
      Purchase Price shall be reduced by the amount of the shortfall and such amount
      shall be delivered to WPCS.  In the event the NTAV as of the Closing
      Date shall be greater than $288,000, the Escrowed Funds shall be delivered
      to
      the Members, pro rata, based upon their ownership of Membership
      Interests.  The NTAV shall be determined in accordance with the terms
      and conditions of Section 2.3(a) of the Purchase Agreement.  The
      Escrow Agent shall only deliver the Escrowed Funds upon (i) written notification
      signed by each of the Members and WPCS of final determination of the NTAV or
      (ii) delivery to the Escrow Agent of a written arbitration award with respect
      to
      the determination of the NTAV.

     

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

     

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

     

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

     

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

     

    
      
         

      

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

     

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

     

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

     

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

     

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

     

    
      
         

      

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

     

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

     

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

     

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

     

    
      
         

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

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

     

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

     

     

    


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

     

    
      	 	
              WPCS
                INTERNATIONAL INCORPORATED

            	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ ANDREW
              HIDALGO	 
	 	 	
              Andrew
                Hidalgo

              Chief
                Executive Officer

            	 
	 	 	 	 
	 	 	 	 


    

    
      

    
      	 	MAX
              ENGINEERING
              LLC	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ HAK-FONG
              MA	 
	 	 	
              Hak-Fong
                Ma,

              President

            	 
	 	 	 	 
	 	 	 	 


    

    
      	 	MEMBERS	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ HAK-FONG
              MA	 
	 	 	Hak-Fong
              Ma	 
	 	 	 	 
	 	 	 	 


    

    
      	 	 	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ ROBERT
              WINTERHALTER	 
	 	 	Robert
              Winterhalter	 
	 	 	 	 
	 	 	 	 


    

     

     

     

     

    ESCROW
      AGENT:

    SICHENZIA
      ROSS FRIEDMAN FERENCE LLP

     

    /s/
      THOMAS A. ROSE

    
      
        

      

    

    Thomas
      A.
      Rose,

     Partner