Exhibit 10.3

                             FUNDS ESCROW AGREEMENT

      This Agreement is dated as of the ____ day of January, 2005 among Tasty
Fries, Inc., a Nevada corporation (the "Company"), the Subscribers identified on
Schedule A hereto (each a "Subscriber" and collectively "Subscribers"), and (the
"Escrow Agent"):

                              W I T N E S S E T H:
                               - - - - - - - - - -

      WHEREAS, the Company and Subscribers have entered into a Subscription
Agreement calling for the sale by the Company to the Subscriber of 7% Promissory
Notes and Warrants for an aggregate purchase price of up to $1,100,000 in the
amounts set forth on Schedule A hereto; and

      WHEREAS, the parties hereto require the Company to deliver the Notes and
Warrants against payment therefor, with such Notes, Warrants and the Escrowed
Funds to be delivered to the Escrow Agent to be held in escrow and released by
the Escrow Agent in accordance with the terms and conditions of this Agreement;
and

      WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant to
the terms and conditions of this Agreement;

      NOW THEREFORE, the parties agree as follows:

                                    ARTICLE I

                                 INTERPRETATION

      1.1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Subscription Agreement shall have the meanings given to
such terms in the Subscription Agreement. Whenever used in this Agreement, the
following terms shall have the following respective meanings:

            (a) "Agreement" means this Agreement and all amendments made hereto
and thereto by written agreement between the parties;

            (b) "Collateral Agent Agreement" shall have the meaning set forth in
Section 13 of the Subscription Agreement;

            (c) "Due Diligence Fee" shall have the meaning set forth in Section
8(a) of the Subscription Agreement;

            (d) "Escrowed Payment" means an aggregate cash payment of up to
$1,100,000 which is, collectively, the Initial Closing Purchase Price and Second
Closing Purchase Price;

            (e) "Finder" shall have the meaning set forth in Section 8(a) of the
Subscription Agreement;

            (f) "Finder's Fee" shall have the meaning set forth in Section 8(a)
of the Subscription Agreement and set forth on Schedule 8 to the Subscription
Agreement;

            (g) "Initial Closing Date" shall have the meaning set forth in
Section 1 of the Subscription Agreement;


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<PAGE>

            (h) "Initial Closing Legal Opinion" means the original signed legal
opinion referred to in Section 6 of the Subscription Agreement;

            (i) "Initial Closing Notes" shall have the meaning set forth in
Section 1 of the Subscription Agreement;

            (j) "Initial Closing Purchase Price" shall mean up to $500,000;

            (k) "Legal Fees" shall have the meaning set forth in Section 8(b) of
the Subscription Agreement;

            (l) "Second Closing Certificate" shall have the meaning set forth in
Section 2(c) of the Subscription Agreement;

            (m) "Second Closing Date" shall have the meaning set forth in
Section 2(a) of the Subscription Agreement;

            (n) "Second Closing Legal Opinion" shall have the meaning set forth
in Section 2(c) of the Subscription Agreement;

            (o) "Second Closing Notes" shall have the meaning set forth in
Section 2(a) of the Subscription Agreement;

            (p) "Second Closing Purchase Price" shall mean up to $600,000;

            (q) "Security Agreement" shall have the meaning set forth in Section
13 of the Subscription Agreement;

            (r) "Subscription Agreement" means the Subscription Agreement (and
the exhibits thereto) entered into or to be entered into by the parties in
reference to the sale and purchase of the Initial Closing Notes, Second Closing
Notes and Warrants;

            (s) "Warrants" " shall have the meaning set forth in Section 3 of
the Subscription Agreement;

            (t) Collectively, the executed Subscription Agreement, Initial
Closing Notes, Initial Closing Legal Opinion, Second Closing Notes, Second
Closing Legal Opinion, Second Closing Certificates, Security Agreement,
Collateral Agent Agreement, and Warrants are referred to as "Company Documents";
and

            (u) Collectively, the Escrowed Payment and the executed Subscription
Agreement are referred to as "Subscriber Documents".

      1.2. Entire Agreement. This Agreement along with the Company Documents and
the Subscriber Documents constitute the entire agreement between the parties
hereto pertaining to the Company Documents and Subscriber Documents and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties. There are no warranties,
representations and other agreements made by the parties in connection with the
subject matter hereof except as specifically set forth in this Agreement, the
Company Documents and the Subscriber Documents.


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<PAGE>

      1.3. Extended Meanings. In this Agreement words importing the singular
number include the plural and vice versa; words importing the masculine gender
include the feminine and neuter genders. The word "person" includes an
individual, body corporate, partnership, trustee or trust or unincorporated
association, executor, administrator or legal representative.

      1.4. Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by all parties, or, in the
case of a waiver, by the party waiving compliance. Except as expressly stated
herein, no delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of any party of any right, power or privilege hereunder preclude any
other or future exercise of any other right, power or privilege hereunder.

      1.5. Headings. The division of this Agreement into articles, sections,
subsections and paragraphs and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement.

      1.6. Law Governing this Agreement. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
principles of conflicts of laws. Any action brought by either party against the
other concerning the transactions contemplated by this Agreement shall be
brought only in the state courts of New York or in the federal courts located in
the state of New York. Both parties and the individuals executing this Agreement
and other agreements on behalf of the Company agree to submit to the
jurisdiction of such courts and waive trial by jury. The prevailing party (which
shall be the party which receives an award most closely resembling the remedy or
action sought) shall be entitled to recover from the other party its reasonable
attorney's fees and costs. In the event that any provision of this Agreement or
any other agreement delivered in connection herewith is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of any agreement.

      1.7. Specific Enforcement, Consent to Jurisdiction. The Company and
Subscriber acknowledge and agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injuction or
injunctions to prevent or cure breaches of the provisions of this Agreement and
to enforce specifically the terms and provisions hereof or thereof, this being
in addition to any other remedy to which any of them may be entitled by law or
equity. Subject to Section 1.6 hereof, each of the Company and Subscriber hereby
waives, and agrees not to assert in any such suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of such court, that
the suit, action or proceeding is brought in an inconvenient forum or that the
venue of the suit, action or proceeding is improper. Nothing in this Section
shall affect or limit any right to serve process in any other manner permitted
by law.

                                   ARTICLE II

                         DELIVERIES TO THE ESCROW AGENT

      2.1. Initial Closing Company Deliveries. On or about the date hereof, the
Company shall deliver to the Escrow Agent the executed Subscription Agreement,
the Initial Closing Notes, Warrants, Initial Closing Legal Opinion, Security
Agreement and Collateral Agent Agreement (collectively, the "Initial Closing
Company Documents").


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<PAGE>

      2.2. Second Closing Company Deliveries. On or prior to the Second Closing
Date the Company will deliver to the Escrow Agent the Second Closing Notes,
Warrants, Second Closing Certificate, and Second Closing Legal Opinion
(collectively, the "Second Closing Company Documents").

      2.3. Subscriber Deliveries. On or before the Initial Closing Date, each
Subscriber shall deliver to the Escrow Agent such Subscriber's portion of the
Initial Closing Purchase Price and the executed Subscription Agreement. On or
before the Second Closing Date, each Subscriber will deliver such Subscriber's
portion of the Second Closing Purchase Price to the Escrow Agent. The Escrowed
Payment will be delivered pursuant to the following wire transfer instructions:

      2.4. Intention to Create Escrow Over Company Documents and Subscriber
Documents. The Subscriber and Company intend that the Company Documents and
Subscriber Documents shall be held in escrow by the Escrow Agent pursuant to
this Agreement for their benefit as set forth herein.

      2.5. Escrow Agent to Deliver Company Documents and Subscriber Documents.
The Escrow Agent shall hold and release the Company Documents and Subscriber
Documents only in accordance with the terms and conditions of this Agreement.

                                   ARTICLE III

              RELEASE OF COMPANY DOCUMENTS AND SUBSCRIBER DOCUMENTS

      3.1. Release of Escrow. Subject to the provisions of Section 4.2, the
Escrow Agent shall release the Company Documents and Subscriber Documents as
follows:

            (a) On the Initial Closing Date, the Escrow Agent will
simultaneously release the Initial Closing Company Documents to the Subscriber
and release the Subscription Agreement and the Initial Closing Purchase Price to
the Company except that the Security Agreement and Collateral Agent Agreement
will also be released to the Collateral Agent; Legal Fees will be released to
the Subscriber's attorneys and the Finder's Fee and Due Diligence Fee in
connection with the Initial Closing Purchase Price will be released to the
recipients identified on Schedule 8 to the Subscription Agreement.

            (b) On the Second Closing Date, the Escrow Agent will simultaneously
release the Second Closing Company Documents to the Subscriber and release the
Second Closing Purchase Price to the Company except that the Legal Fees will be
released to the Subscriber's attorneys and Finder's Fee in connection with the
Second Closing Purchase Price will be delivered to the Finder.

            (c) All funds to be delivered to the Company shall be delivered
pursuant to the wire instructions to be provided in writing by the Company to
the Escrow Agent.

            (d) Notwithstanding the above, upon receipt by the Escrow Agent of
joint written instructions ("Joint Instructions") signed by the Company and the
Subscriber, it shall deliver the Company Documents and Subscriber Documents in
accordance with the terms of the Joint Instructions.

            (e) Notwithstanding the above, upon receipt by the Escrow Agent of a
final and non-appealable judgment, order, decree or award of a court of
competent jurisdiction (a "Court Order"), the


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<PAGE>

Escrow Agent shall deliver the Company Documents and Subscriber Documents in
accordance with the Court Order. Any Court Order shall be accompanied by an
opinion of counsel for the party presenting the Court Order to the Escrow Agent
(which opinion shall be satisfactory to the Escrow Agent) to the effect that the
court issuing the Court Order has competent jurisdiction and that the Court
Order is final and non-appealable.

      3.2. Acknowledgement of Company and Subscriber; Disputes. The Company and
the Subscriber acknowledge that the only terms and conditions upon which the
Company Documents and Subscriber Documents are to be released are set forth in
Sections 3 and 4 of this Agreement. The Company and the Subscriber reaffirm
their agreement to abide by the terms and conditions of this Agreement with
respect to the release of the Company Documents and Subscriber Documents. Any
dispute with respect to the release of the Company Documents and Subscriber
Documents shall be resolved pursuant to Section 4.2 or by agreement between the
Company and Subscriber.

                                   ARTICLE IV

                           CONCERNING THE ESCROW AGENT

      4.1. Duties and Responsibilities of the Escrow Agent. The Escrow Agent's
duties and responsibilities shall be subject to the following terms and
conditions:

            (a) The Subscriber and Company acknowledge and agree that the Escrow
Agent (i) shall not be responsible for or bound by, and shall not be required to
inquire into whether either the Subscriber or Company is entitled to receipt of
the Company Documents and Subscriber Documents pursuant to, any other agreement
or otherwise; (ii) shall be obligated only for the performance of such duties as
are specifically assumed by the Escrow Agent pursuant to this Agreement; (iii)
may rely on and shall be protected in acting or refraining from acting upon any
written notice, instruction, instrument, statement, request or document
furnished to it hereunder and believed by the Escrow Agent in good faith to be
genuine and to have been signed or presented by the proper person or party,
without being required to determine the authenticity or correctness of any fact
stated therein or the propriety or validity or the service thereof; (iv) may
assume that any person believed by the Escrow Agent in good faith to be
authorized to give notice or make any statement or execute any document in
connection with the provisions hereof is so authorized; (v) shall not be under
any duty to give the property held by Escrow Agent hereunder any greater degree
of care than Escrow Agent gives its own similar property; and (vi) may consult
counsel satisfactory to Escrow Agent, the opinion of such counsel to be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by Escrow Agent hereunder in good faith and in accordance with the
opinion of such counsel.

            (b) The Subscriber and Company acknowledge that the Escrow Agent is
acting solely as a stakeholder at their request and that the Escrow Agent shall
not be liable for any action taken by Escrow Agent in good faith and believed by
Escrow Agent to be authorized or within the rights or powers conferred upon
Escrow Agent by this Agreement. The Subscriber and Company, jointly and
severally, agree to indemnify and hold harmless the Escrow Agent and any of
Escrow Agent's partners, employees, agents and representatives for any action
taken or omitted to be taken by Escrow Agent or any of them hereunder, including
the fees of outside counsel and other costs and expenses of defending itself
against any claim or liability under this Agreement, except in the case of gross
negligence or willful misconduct on Escrow Agent's part committed in its
capacity as Escrow Agent under this Agreement. The Escrow Agent shall owe a duty
only to the Subscriber and Company under this Agreement and to no other person.


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<PAGE>

            (c) The Subscriber and Company jointly and severally agree to
reimburse the Escrow Agent for outside counsel fees, to the extent authorized
hereunder and incurred in connection with the performance of its duties and
responsibilities hereunder.

            (d) The Escrow Agent may at any time resign as Escrow Agent
hereunder by giving five (5) days prior written notice of resignation to the
Subscriber and the Company. Prior to the effective date of the resignation as
specified in such notice, the Subscriber and Company will issue to the Escrow
Agent a Joint Instruction authorizing delivery of the Company Documents and
Subscriber Documents to a substitute Escrow Agent selected by the Subscriber and
Company. If no successor Escrow Agent is named by the Subscriber and Company,
the Escrow Agent may apply to a court of competent jurisdiction in the State of
New York for appointment of a successor Escrow Agent, and to deposit the Company
Documents and Subscriber Documents with the clerk of any such court.

            (e) The Escrow Agent does not have and will not have any interest in
the Company Documents and Subscriber Documents, but is serving only as escrow
agent, having only possession thereof. The Escrow Agent shall not be liable for
any loss resulting from the making or retention of any investment in accordance
with this Escrow Agreement.

            (f) This Agreement sets forth exclusively the duties of the Escrow
Agent with respect to any and all matters pertinent thereto and no implied
duties or obligations shall be read into this Agreement.

            (g) The Escrow Agent shall be permitted to act as counsel for the
Subscriber in any dispute as to the disposition of the Company Documents and
Subscriber Documents, in any other dispute between the Subscriber and Company,
whether or not the Escrow Agent is then holding the Company Documents and
Subscriber Documents and continues to act as the Escrow Agent hereunder.

            (h) The provisions of this Section 4.1 shall survive the resignation
of the Escrow Agent or the termination of this Agreement.

      4.2. Dispute Resolution: Judgments. Resolution of disputes arising under
this Agreement shall be subject to the following terms and conditions:

            (a) If any dispute shall arise with respect to the delivery,
ownership, right of possession or disposition of the Company Documents and
Subscriber Documents, or if the Escrow Agent shall in good faith be uncertain as
to its duties or rights hereunder, the Escrow Agent shall be authorized, without
liability to anyone, to (i) refrain from taking any action other than to
continue to hold the Company Documents and Subscriber Documents pending receipt
of a Joint Instruction from the Subscriber and Company, or (ii) deposit the
Company Documents and Subscriber Documents with any court of competent
jurisdiction in the State of New York, in which event the Escrow Agent shall
give written notice thereof to the Subscriber and the Company and shall
thereupon be relieved and discharged from all further obligations pursuant to
this Agreement. The Escrow Agent may, but shall be under no duty to, institute
or defend any legal proceedings which relate to the Company Documents and
Subscriber Documents. The Escrow Agent shall have the right to retain counsel if
it becomes involved in any disagreement, dispute or litigation on account of
this Agreement or otherwise determines that it is necessary to consult counsel.

            (b) The Escrow Agent is hereby expressly authorized to comply with
and obey any Court Order. In case the Escrow Agent obeys or complies with a
Court Order, the Escrow Agent shall not be liable to the Subscriber and Company
or to any other person, firm, corporation or entity by reason of such
compliance.


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<PAGE>

                                    ARTICLE V

                                 GENERAL MATTERS

      5.1. Termination. This escrow shall terminate upon the release of all of
the Company Documents and Subscriber Documents or at any time upon the agreement
in writing of the Subscriber and Company.

      5.2. Notices. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

(a)   If to the Company, to:

                        Tasty Fries, Inc.
                        650 Sentry Parkway, Suite 1
                        Blue Bell, PA 19422
                        Attn: Edward Kelly, CEO
                        Fax: (610) 941-2108

      With  a copy by telecopier only to:

                        Louis Kelly, Esq.
                        650 Sentry Parkway, Suite 1
                        Blue Bell, PA 19422
                        Fax: (610) 941-2108

(b)   If to the Subscribers, to: the addresses and fax numbers listed on
      Schedule A hereto

(c)   If to the Finder, to the addresses and fax numbers listed on Schedule 8 to
      the Subscription Agreement.

(d)   If to the Escrow Agent, to:


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<PAGE>

or to such other address as any of them shall give to the others by notice made
pursuant to this Section 5.2.

      5.3. Interest. The Escrowed Payment shall not be held in an interest
bearing account nor will interest be payable in connection therewith. In the
event the Escrowed Payment is deposited in an interest bearing account, the
Subscriber shall be entitled to receive any accrued interest thereon, but only
if the Escrow Agent receives from the Subscriber the Subscriber's United States
taxpayer identification number and other requested information and forms.

      5.4. Assignment; Binding Agreement. Neither this Agreement nor any right
or obligation hereunder shall be assignable by any party without the prior
written consent of the other parties hereto. This Agreement shall enure to the
benefit of and be binding upon the parties hereto and their respective legal
representatives, successors and assigns.

      5.5. Invalidity. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal, or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.


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<PAGE>

      5.6. Conflict of Interest. The Company and each Subscriber hereby waive
any conflict of interest that may arise, exist or appear to exist based on the
Escrow Agent having provided legal services to the Company in the past and to
the Subscribers in connection with the Offering and Private Equity Credit Line,
including any conflict that may arise, exist or appear to exist by virtue of
Escrow Agent also being an Investor under the Private Equity Credit Line.

      5.7. Counterparts/Execution. This Agreement may be executed in any number
of counterparts and by different signatories hereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument. This Agreement
may be executed by facsimile transmission and delivered by facsimile
transmission.

      5.8. Agreement. Each of the undersigned states that he has read the
foregoing Funds Escrow Agreement and understands and agrees to it.

                                          TASTY FRIES, INC.
                                          the "Company"

                                          By:___________________________________

                                          ______________________________________
                                           "Subscriber"

                                          ______________________________________
                                           "Subscriber"

                                          ______________________________________

                                           "Subscriber"

                                          ESCROW AGENT:

                                          ______________________________________


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<PAGE>

                      SCHEDULE A TO FUNDS ESCROW AGREEMENT

--------------------------------------------------------------------------------
SUBSCRIBER                         INITIAL CLOSING           SECOND CLOSING
                                   NOTE (INITIAL             NOTE (SECOND
                                   CLOSING PURCHASE          CLOSING PURCHASE
                                   PRICE)                    PRICE)
--------------------------------------------------------------------------------
                                   $350,000.00                   $420,000.00


--------------------------------------------------------------------------------
                                   $125,000.00                   $150,000.00


--------------------------------------------------------------------------------
                                   $25,000.00                    $30,000.00


--------------------------------------------------------------------------------
TOTALS                             $500,000.00                   $600,000.00
--------------------------------------------------------------------------------


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