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