Document:

Unassociated Document

    Exhibit
      10.7

     

    REGISTRATION
      RIGHTS AGREEMENT

     

     

    THIS
      REGISTRATION RIGHTS AGREEMENT, is
      by and between WPCS International Incorporated, a Delaware corporation (the
      "Company"), Hak-Fong Ma and Robert Winterhalter (individually a "Holder" and
      collectively the "Holders").

     

    WHEREAS,
      pursuant to a Membership
      Interest Purchase Agreement between the Company, Max Engineering LLC, a Texas
      limited liability company, and the Holders, dated as of the date hereof (the
      “Acquisition Agreement”), (i) the Company issued to the Holders an aggregate of
      17,007 shares of common stock, $.0001 par value of the Company (the “Initial
      Shares”), and (ii) after the first and second anniversary of the Closing
      thereunder the Company may issue to the Holders additional shares of common
      stock, $.0001 par value of the Company  (the “Additional Shares”)(the
      shares of stock issued under (i) and (ii) are collectively, the “Common Stock”);
      and

     

    WHEREAS,
      pursuant to the terms of and
      in order to induce the Holders to enter into the Acquisition Agreement, the
      Company and the Holders have agreed to enter into this Agreement;

     

    NOW,
      THEREFORE, in consideration of the
      premises and the mutual covenants contained herein, the Company and the Holders
      hereby agree as follows:

     

    1.           Mandatory
      Registration.  The Company shall file a registration statement
      with the Securities and Exchange Commission (the “SEC”) which seeks to register
      the shares of Common Stock issuable to the Holders upon consummation of the
      Acquisition Agreement (the "Registerable Securities") under the Securities
      Act
      of 1933 (the “1933 Act”), no later than forty-five (45) days after the date of
      receipt of written demand of the Holders.  The Company will use its
      best efforts to cause such registration statement to be declared effective
      by
      the SEC within one hundred twenty (120) days after the initial filing with
      the
      SEC.  In the event the Company intends to file a registration
      statement under the 1933 Act (other than on Form S-4, S-8 or other inapplicable
      form), the Company shall provide written notice to the Holders of such
      intent.  The Holders shall have a period of five (5) business days to
      notify the Company in writing if the Holders wish to have their Registrable
      Securities included in such registration statement, in which case the
      Registrable Securities shall be included.  It is agreed and understood
      that the Company may only be able to register the Initial Shares until such
      time
      as the Additional Shares have been issued, at which time they may also be
      registered.

     

    2.           Cooperation
      with Company.  The Holders will cooperate with the Company in all
      respects in connection with this Agreement, including, timely supplying all
      information reasonably requested by the Company and executing and returning
      all
      documents reasonably requested in connection with the registration and sale
      of
      the Registerable Securities, at no expense to the Holders.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.           Registration
      Procedures.  If and whenever the Company is required by any of the
      provisions of this Agreement to use its best efforts to effect the registration
      of any of the Registerable Securities under the 1933 Act, the Company shall
      (except as otherwise provided in this Agreement), as expeditiously as
      possible:

     

    a.           prepare
      and file with the SEC a registration statement and shall use its best efforts
      to
      cause such registration statement to become effective and remain effective
      until
      all the Registerable Securities are sold or become capable of being publicly
      sold without registration under the 1933 Act.

     

    b.           prepare
      and file with the SEC such amendments and supplements to such registration
      statement and the prospectus used in connection therewith as may be necessary
      to
      keep such registration statement effective and to comply with the provisions
      of
      the 1933 Act with respect to the sale or other disposition of all securities
      covered by such registration statement whenever the Holder or Holders of such
      securities shall desire to sell or otherwise dispose of the same (including
      prospectus supplements with respect to the sales of securities from time to
      time
      in connection with a registration statement pursuant to Rule 415 of the
      SEC);

     

    c.           furnish
      to each Holder such numbers of copies of a summary prospectus or other
      prospectus, including a preliminary prospectus or any amendment or supplement
      to
      any prospectus, in conformity with the requirements of the 1933 Act, and such
      other documents, as such Holder may reasonably request in order to facilitate
      the public sale or other disposition of the securities owned by such
      Holder;

     

    d.           use
      its best efforts to register and qualify the securities covered by such
      registration statement under such other securities or blue sky laws of such
      jurisdictions as each Holder shall reasonably request, and do any and all other
      acts and things which may be necessary or advisable to enable such Holder to
      consummate the public sale or other disposition in such jurisdiction of the
      securities owned by such Holder, except that the Company shall not for any
      such
      purpose be required to qualify to do business as a foreign corporation in any
      jurisdiction wherein it is not so qualified or to file therein any general
      consent to service of process;

     

    e.           use
      its best efforts to list such securities on any securities exchange on which
      any
      securities of the Company is then listed, if the listing of such securities
      is
      then permitted under the rules of such exchange;

     

    f.           enter
      into and perform its obligations under an underwriting agreement, if the
      offering is an underwritten offering, in usual and customary form, with the
      managing underwriter or underwriters of such underwritten offering;

     

    g.           notify
      each Holder of Registerable Securities covered by such registration statement,
      at any time when a prospectus relating thereto covered by such registration
      statement is required to be delivered under the 1933 Act, of the happening
      of
      any event of which it has knowledge as a result of which the prospectus included
      in such registration statement, as then in effect, includes an untrue statement
      of a material fact or omits to state a material fact required to be stated
      therein or necessary to make the statements therein not misleading in the light
      of the circumstances then existing; and

     

    
      
         

      

      
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    h.           furnish,
      at the request of any Holder on the date such Registerable Securities are
      delivered to the underwriters for sale pursuant to such registration or, if
      such
      Registerable Securities are not being sold through underwriters, on the date
      the
      registration statement with respect to such Registerable Securities becomes
      effective, (i) an opinion, dated such date, of the counsel representing the
      Company for the purpose of such registration, addressed to the underwriters,
      if
      any, and to the Holder making such request, covering such legal matters with
      respect to the registration in respect of which such opinion is being given
      as
      the Holder of such Registerable Securities may reasonably request and are
      customarily included in such an opinion and (ii) letters, dated, respectively,
      (1) the effective date of the registration statement and (2) the date such
      Registerable Securities are delivered to the underwriters, if any, for sale
      pursuant to such registration from a firm of independent certified public
      accountants of recognized standing reasonably selected by the Company, addressed
      to the underwriters, if any, and to the Holder making such request, covering
      such financial, statistical and accounting matters with respect to the
      registration in respect of which such letters are being given as the Holder
      of
      such Registerable Securities may reasonably request and are customarily included
      in such letters.

     

    4.           Expenses.  All
      expenses incurred in any registration of the Holders' Registerable Securities
      under this Agreement shall be paid by the Company, including, without
      limitation, printing expenses, fees and disbursements of counsel for the
      Company, expenses of any audits to which the Company shall agree or which shall
      be necessary to comply with governmental requirements in connection with any
      such registration, all registration and filing fees for the Holders'
      Registerable Securities under federal and State securities laws, and expenses
      of
      complying with the securities or blue sky laws of any jurisdictions pursuant
      to
      Section 3(h)(i); provided, however, the Company shall not be liable for (a)
      any
      discounts or commissions to any underwriter; (b) any stock transfer taxes
      incurred with respect to Registerable Securities sold in the Offering or (c)
      the
      fees and expenses of counsel for any Holder, provided that the Company will
      pay
      the costs and expenses of Company counsel when the Company's counsel is
      representing any or all selling security holders.

     

    5.           Indemnification.  In
      the event any Registerable Securities are included in a registration statement
      pursuant to this Agreement:

     

    a.           Company
      Indemnity.  Without limitation of any other indemnity provided to
      any Holder, to the extent permitted by law, the Company shall indemnify and
      hold
      harmless each Holder, the affiliates, officers, directors and partners of each
      Holder, any underwriter (as defined in the 1933 Act) for such Holder, and each
      person, if any, who controls such Holder or underwriter (within the meaning
      of
      the 1933 Act or the Securities Exchange Act of 1934 (the "Exchange Act")),
      against any losses, claims, damages or liabilities (joint or several) to which
      they may become subject under the 1933 Act, the Exchange Act or other federal
      or
      state law, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon any of the following statements,
      omissions or violations (collectively a "Violation"):  (i) any alleged
      untrue statement of a material fact contained in such registration statement
      including any preliminary prospectus or final prospectus contained therein
      or
      any amendments or supplements thereto, (ii) the alleged omission to state
      therein a material fact required to be stated therein, or necessary to make
      the
      statements therein not misleading, or (iii) any violation or alleged violation
      by the Company of the 1933 Act, the Exchange Act, or any state securities law
      or
      any rule or regulation promulgated under the 1933 Act, the Exchange Act or
      any
      state securities law, and the Company shall reimburse each such Holder,
      affiliate, officer or director or partner, underwriter or controlling person
      for
      any legal or other expenses incurred by them in connection with investigating
      or
      defending any such loss, claim, damage, liability or action; provided, however,
      that the Company shall not be liable to any Holder in any such case for any
      such
      loss, claim, damage, liability or action to the extent that it arises out of
      or
      is based upon a Violation which occurs in reliance upon and in conformity with
      written information furnished expressly for use in connection with such
      registration by any such Holder or any other officer, director or controlling
      person thereof.

     

    
      
         

      

      
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    b.           Holder
      Indemnity.  Each Holder shall indemnify and hold harmless the
      Company, its affiliates, its counsel, officers, directors and representatives,
      any underwriter (as defined in the 1933 Act) and each person, if any, who
      controls the Company or the underwriter (within the meaning of the 1933 Act
      or
      the Exchange Act), against any losses, claims, damages or liabilities (joint
      or
      several) to which they may become subject under the 1933 Act, the Exchange
      Act
      or any state securities law, and the Company shall reimburse each such Holder,
      affiliate, officer or director or partner, underwriter or controlling person
      for
      any legal or other expenses incurred by them in connection with investigating
      or
      defending any loss, claim, damage, liability or action; insofar as such losses,
      claims, damages or liabilities (or actions and respect thereof) arise out of
      or
      are based upon any statements or information provided by such Holder to the
      Company expressly for use in connection with the offer or sale of Registerable
      Securities.

     

    c.           Notice;
      Right to Defend.  Promptly after receipt by an indemnified party
      under this Section 5 of notice of the commencement of any action (including
      any
      governmental action), such indemnified party shall, if a claim in respect
      thereof is to be made against any indemnifying party under this Section 5
      deliver to the indemnifying party a written notice of the commencement thereof
      and the indemnifying party shall have the right to participate in and if the
      indemnifying party agrees in writing that it will be responsible for any costs,
      expenses, judgments, damages and losses incurred by the indemnified party with
      respect to such claim, jointly with any other indemnifying party similarly
      noticed, to assume the defense thereof with counsel mutually satisfactory to
      the
      parties; provided, however, that an indemnified party shall have the right
      to
      retain its own counsel, with the fees and expenses to be paid by the
      indemnifying party, if the indemnified party reasonably believes that
      representation of such indemnified party by the counsel retained by the
      indemnifying party would be inappropriate due to actual or potential differing
      interests between such indemnified party and any other party represented by
      such
      counsel in such proceeding.  The failure to deliver written notice to
      the indemnifying party within a reasonable time of the commencement of any
      such
      action shall relieve such indemnifying party of any liability to the indemnified
      party under this Agreement only if and to the extent that such failure is
      prejudicial to its ability to defend such action, and the omission so to deliver
      written notice to the indemnifying party will not relieve it of any liability
      that it may have to any indemnified party otherwise than under this
      Agreement.

     

    
      
         

      

      
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    d.           Contribution.  If
      the indemnification provided for in this Agreement is held by a court of
      competent jurisdiction to be unavailable to an indemnified party with respect
      to
      any loss, liability, claim, damage or expense referred to therein, then the
      indemnifying party, in lieu of indemnifying such indemnified party thereunder,
      shall contribute to the amount paid or payable by such indemnified party as
      a
      result of such loss, liability, claim, damage or expense in such proportion
      as
      is appropriate to reflect the responsibility of the indemnifying party on the
      one hand and the indemnified party on the other hand in connection with the
      statements or omissions which resulted in such loss, liability, claim, damage
      or
      expense as well as any other relevant equitable considerations.  The
      relevant fault of the indemnifying party and the indemnified party shall be
      determined by reference to, among other things, whether the untrue or alleged
      untrue statement of a material fact or the omission to state a material fact
      relates to information supplied by the indemnifying party or by the indemnified
      party and the parties' relative intent, knowledge, access to information and
      opportunity to correct or prevent such statement or
      omission.  Notwithstanding the foregoing, the amount any Holder shall
      be obligated to contribute pursuant to this Agreement shall be limited to an
      amount equal to the proceeds to such Holder of the Registerable Securities
      sold
      pursuant to the registration statement which gives rise to such obligation
      to
      contribute (less the aggregate amount of any damages which the Holder has
      otherwise been required to pay in respect of such loss, claim, damage, liability
      or action or any substantially similar loss, claim, damage, liability or action
      arising from the sale of such Registerable Securities).

     

    e.           Survival
      of Indemnity.  The indemnification provided by this Agreement
      shall be a continuing right to indemnification and shall survive the
      registration and sale of any Registerable Securities by any person entitled
      to
      indemnification hereunder and the expiration or termination of this
      Agreement.

     

    6.           Remedies.

     

    a.           Time
      is of Essence.  The Company agrees that time is of the essence of
      each of the covenants contained herein and that, in the event of a dispute
      hereunder, this Agreement is to be interpreted and construed in a manner that
      will enable the Holders to sell their Registerable Securities as quickly as
      possible after such Holders have indicated to the Company that they desire
      their
      Registerable Securities to be registered.  Any delay on the part of
      the Company not expressly permitted under this Agreement, whether material
      or
      not, shall be deemed a material breach of this Agreement.

     

    b.           Remedies
      Upon Default or Delay.  The Company acknowledges the breach of any
      part of this Agreement may cause irreparable harm to a Holder and that monetary
      damages alone may be inadequate.  The Company therefore agrees that
      the Holder shall be entitled to injunctive relief or such other applicable
      remedy as a court of competent jurisdiction may provide.  Nothing
      contained herein will be construed to limit a Holder's right to any remedies
      at
      law, including recovery of damages for breach of any part of this
      Agreement.

     

    
      
         

      

      
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    7.           Notices.

     

    a.           All
      communications under this Agreement shall be in writing and shall be mailed
      by
      first class mail, postage prepaid, or telegraphed or telexed with confirmation
      of receipt or delivered by hand or by overnight delivery service,

     

    b.           If
      to the Company, at:

    

    WPCS
      International
      Incorporated

                 
      One East Uwchlan Avenue, Suite 301

    Exton,
      Pennsylvania 19341

    Attn:  Andrew
      Hidalgo,
      CEO

    

    or
      at such other address as it may
      have furnished in writing to the Holders of Registerable Securities at the
      time
      outstanding, or

     

    c.           if
      to any Holder of any Registerable Securities, to 9000 SW Freeway, Suite 410,
      Houston, TX 77074, or at such other address as he or she may have furnished
      in
      writing to the Company at the time outstanding.

     

    d.           Any
      notice so addressed, when mailed by registered or certified mail shall be deemed
      to be given three (3) days after so mailed, when telegraphed or telexed shall
      be
      deemed to be given when transmitted, or when delivered by hand or overnight
      shall be deemed to be given when delivered.

     

    8.           Successors
      and Assigns.  Except as otherwise expressly provided herein, this
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      permitted assigns of the Company and each of the Holders.

     

    9.           Amendment
      and Waiver.  This Agreement may be amended, and the observance of
      any term of this Agreement may be waived, but only with the written consent
      of
      the Company and the Holders of securities representing a majority of the
      Registerable Securities; provided, however, that no such amendment or waiver
      shall take away any registration right of any Holder of Registerable Securities
      or reduce the amount of reimbursable costs to any Holder of Registerable
      Securities in connection with any registration hereunder without the consent
      of
      such Holder; further provided, however, that without the consent of any other
      Holder of Registerable Securities, any Holder may from time to time enter into
      one or more agreements amending, modifying or waiving the provisions of this
      Agreement if such action does not adversely affect the rights or interest of
      any
      other Holder of Registerable Securities.  No delay on the part of any
      party in the exercise of any right, power or remedy shall operate as a waiver
      thereof, nor shall any single or partial exercise by any party of any right,
      power or remedy preclude any other or further exercise thereof, or the exercise
      of any other right, power or remedy.

     

    
      
         

      

      
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    10.           Counterparts;
      Attorney’s Fees.  One or more counterparts of this Agreement may
      be signed by the parties, each of which shall be an original but all of which
      together shall constitute one and the same instrument.  The prevailing
      party in any action or proceeding relating to or arising out of this Agreement
      shall recover its reasonable attorney’s fees and other costs from the
      non-prevailing party, in addition to any other relief to which such prevailing
      party is entitled.

     

    11.           Governing
      Law.  This Agreement shall be construed in accordance with and
      governed by the internal laws of the State of Pennsylvania, without giving
      effect to conflicts of law principles.

     

    12.           Invalidity
      of Provisions.  If any provision of this Agreement is or becomes
      invalid, illegal or unenforceable in any respect, the validity, legality and
      enforceability of the remaining provisions contained herein shall not be
      affected thereby.

     

    13.           Headings.  The
      headings in this Agreement are for convenience of reference only and shall
      not
      be deemed to alter or affect the meaning or interpretation of any provisions
      hereof.

     

    IN
      WITNESS WHEREOF, the undersigned
      has executed or caused to be duly executed this Registration Rights Agreement
      as
      of the 2nd day
      of August, 2007.

     

     

     

    WPCS
      INTERNATIONAL INCORPORATED

    
      	 	 	 	 	 
	
              /s/
                ANDREW
                HIDALGO           

            	 	 	
              /s/
                HAK-FONG
                MA

            	 
	
              Andrew
                Hidalgo, 

              Chief
                Executive Officer

            	 	 	
              Hak-Fong
                Ma

            	 
	
               

            	 	 	
               

            	 

    

     

     

    
      	 	 	 
	 	 	 	 
	
               

            	
               

            	/s/ ROBERT
              WINTERHALTER	 
	 	 	Robert
              WinterhalterUnassociated 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.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    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.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

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

     

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

     

     

    

    [Intentionally
      blank]

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    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

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