Exhibit 10.3


                                ESCROW AGREEMENT

         THIS ESCROW AGREEMENT (the  "Agreement") is made and entered into as of
May 10, 2005 by and among POWER  TECHNOLOGY,  INC.,  a Nevada  corporation  (the
"Company");  CORNELL CAPITAL PARTNERS,  LP, a Delaware limited  partnership (the
"Investor"); and DAVID GONZALEZ, ESQ (the "Escrow Agent").

                                   BACKGROUND

         WHEREAS,  the  Company and the  Investor  have  entered  into a Standby
Equity  Distribution  Agreement (the "Standby  Equity  Distribution  Agreement")
dated as of the date hereof,  pursuant to which the Investor  will  purchase the
Company's Common Stock,  par value $0.001 per share (the "Common  Stock"),  at a
price per share  equal to the  Purchase  Price,  as that term is  defined in the
Standby  Equity  Distribution  Agreement,  for an aggregate  price of up to Five
Million Dollars ($5,000,000). The Standby Equity Distribution Agreement provides
that on each Advance Date the  Investor,  as that term is defined in the Standby
Equity Distribution Agreement, shall deposit the Advance pursuant to the Advance
Notice in a segregated escrow account to be held by Escrow Agent and the Company
shall deposit shares of the Company's Common Stock,  which shall be purchased by
the Investor as set forth in the Standby Equity Distribution Agreement, with the
Escrow  Agent,  in order to  effectuate  a  disbursement  to the  Company of the
Advance by the Escrow Agent and a disbursement  to the Investor of the shares of
the Company's  Common Stock by Escrow Agent at a closing to be held as set forth
in the Standby Equity Distribution Agreement (the "Closing").

         WHEREAS,  Escrow  Agent has agreed to accept,  hold,  and  disburse the
funds  and  the  shares  of the  Company's  Common  Stock  deposited  with it in
accordance with the terms of this Agreement.

         WHEREAS, in order to establish the escrow of funds and shares to effect
the provisions of the Standby Equity Distribution Agreement,  the parties hereto
have entered into this Agreement.

         NOW THEREFORE,  in consideration of the foregoing,  it is hereby agreed
as follows:

             1.  Definitions.  The  following  terms  shall  have the  following
meanings when used herein:

                  a. "Escrow Funds" shall mean the Advance funds  deposited with
the Escrow Agent pursuant to this Agreement.

                  b. "Joint Written  Direction"  shall mean a written  direction
executed by the Investor and the Company  directing Escrow Agent to disburse all
or a portion of the Escrow  Funds or to take or refrain  from  taking any action
pursuant to this Agreement.

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                  c. "Common Stock Joint Written Direction" shall mean a written
direction executed by the Investor and the Company directing  Investor's Counsel
to disburse all or a portion of the shares of the  Company's  Common Stock or to
refrain from taking any action pursuant to this Agreement.

             2. Appointment of and Acceptance by Escrow Agent.

                  a. The Investor and the Company hereby appoint Escrow Agent to
serve as Escrow Agent  hereunder.  Escrow Agent hereby accepts such  appointment
and,  upon  receipt by wire  transfer  of the Escrow  Funds in  accordance  with
Section  3 below,  agrees to hold,  invest  and  disburse  the  Escrow  Funds in
accordance with this Agreement.

                  b. The  Investor  and the  Company  hereby  appoint the Escrow
Agent to serve as the holder of the shares of the  Company's  Common Stock which
shall be  purchased  by the  Investor.  The Escrow  Agent  hereby  accepts  such
appointment  and, upon receipt via D.W.A.C or the  certificates  representing of
the shares of the  Company's  Common Stock in  accordance  with Section 3 below,
agrees  to hold  and  disburse  the  shares  of the  Company's  Common  Stock in
accordance with this Agreement.

                  c. The Company  hereby  acknowledges  that the Escrow Agent is
general  counsel  to the  Investor,  a partner  in the  general  partner  of the
Investor  and  counsel  to the  Investor  in  connection  with the  transactions
contemplated  and  referenced  herein and will be acting as the escrow agent for
shares of the Company's Common Stock as outlined herein. The Company agrees that
in the event of any dispute arising in connection with this Escrow  Agreement or
otherwise in  connection  with any  transaction  or agreement  contemplated  and
referenced  herein, the Escrow Agent shall be permitted to continue to represent
the Investor and the Company will not seek to disqualify such counsel.

             3. Creation of Escrow Account/Common Stock Account.

                  a. On or prior to the date of this  Agreement the Escrow Agent
shall  establish an escrow  account for the deposit of the Escrow Funds entitled
as follows: Power Technology,  Inc./Cornell Capital Partners, LP Escrow Account.
The Investor will wire funds to the account of the Escrow Agent as follows:

Bank:                         Wachovia, N.A. of New Jersey
Routing #:                    031201467
Account #:                    2000014931134
Name on Account:              David Gonzalez Attorney Trust Account
Name on Sub-Account:          Power Technology, Inc./Cornell Capital Partners,
                              LP Escrow Account

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<PAGE>

                  b. On or prior to the date of this  Agreement the Escrow Agent
shall establish an account for the D.W.A.C.  of the shares of Common Stock.  The
Company will D.W.A.C. shares of the Company's Common Stock to the account of the
Escrow Agent as follows:

Brokerage Firm:                Sloan Securities Corp.
Clearing House:                Fiserv
Account #:                     56887298
DTC #:                         0632
Name on Account:               David Gonzalez Escrow Account

             4. Deposits into the Escrow  Account.  The Investor  agrees that it
shall  promptly  deliver all monies for the  payment of the Common  Stock to the
Escrow Agent for deposit in the Escrow Account.

             5. Disbursements from the Escrow Account.

                  a. At such time as Escrow Agent has  collected  and  deposited
instruments  of payment in the total amount of the Advance and has received such
Common Stock via D.W.A.C from the Company which are to be issued to the Investor
pursuant to the Standby Equity  Distribution  Agreement,  the Escrow Agent shall
notify the Company and the Investor. The Escrow Agent will continue to hold such
funds  until the  Investor  and  Company  execute  and  deliver a Joint  Written
Direction  directing  the Escrow Agent to disburse the Escrow Funds  pursuant to
Joint  Written  Direction  at which time the Escrow  Agent shall wire the Escrow
Funds to the Company.  In disbursing  such funds,  Escrow Agent is authorized to
rely upon such Joint Written Direction from Company and may accept any signatory
from  the  Company  listed  on the  signature  page  to this  Agreement  and any
signature from the Investor that Escrow Agent already has on file.  Simultaneous
with delivery of the executed  Joint  Written  Direction to the Escrow Agent the
Investor  and Company  shall  execute and deliver a Common  Stock Joint  Written
Direction to the Escrow Agent  directing the Escrow Agent to release via D.W.A.C
to the Investor the shares of the  Company's  Common  Stock.  In releasing  such
shares of Common Stock the Escrow Agent is  authorized  to rely upon such Common
Stock Joint Written Direction from Company and may accept any signatory from the
Company  listed on the signature  page to this  Agreement and any signature from
the Escrow Agent has on file.

         In the  event the  Escrow  Agent  does not  receive  the  amount of the
Advance  from the  Investor or the shares of Common Stock to be purchased by the
Investor  from the  Company,  the Escrow  Agent shall notify the Company and the
Investor.

         In the event that the Escrow Agent has not received the Common Stock to
be purchased by the Investor from the Company, in no event will the Escrow Funds
be  released  to the  Company  until  such  shares  are  received  by the Escrow
Agreement.  For purposes of this Agreement, the term "Common Stock certificates"
shall mean Common Stock  certificates to be purchased pursuant to the respective
Advance Notice pursuant to the Standby Equity Distribution Agreement.

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<PAGE>

         6. Deposit of Funds.  The Escrow Agent is hereby  authorized to deposit
the wire transfer proceeds in the Escrow Account.

         7. Suspension of Performance: Disbursement Into Court.

                  a. Escrow Agent. If at any time, there shall exist any dispute
between the Company and the Investor with respect to holding or  disposition  of
any portion of the Escrow Funds or the Common Stock or any other  obligations of
Escrow Agent  hereunder,  or if at any time Escrow Agent is unable to determine,
to Escrow Agent's sole  satisfaction,  the proper  disposition of any portion of
the  Escrow  Funds  or  Escrow  Agent's  proper  actions  with  respect  to  its
obligations hereunder, or if the parties have not within thirty (30) days of the
furnishing  by Escrow  Agent of a notice of  resignation  pursuant  to Section 9
hereof,  appointed a successor Escrow Agent to act hereunder,  then Escrow Agent
may, in its sole discretion, take either or both of the following actions:

                           i. Suspend the  performance of any of its obligations
(including  without  limitation any disbursement  obligations) under this Escrow
Agreement  until  such  dispute or  uncertainty  shall be  resolved  to the sole
satisfaction  of  Escrow  Agent  or  until a  successor  Escrow  Agent  shall be
appointed (as the case may be); provided however, Escrow Agent shall continue to
invest the Escrow Funds in accordance with Section 8 hereof; and/or

                           ii. Petition (by means of an  interpleader  action or
any other appropriate  method) any court of competent  jurisdiction in any venue
convenient to Escrow  Agent,  for  instructions  with respect to such dispute or
uncertainty, and to the extent required by law, pay into such court, for holding
and  disposition in accordance with the  instructions  of such court,  all funds
held by it in the Escrow Funds,  after  deduction and payment to Escrow Agent of
all fees and expenses  (including  court costs and attorneys'  fees) payable to,
incurred  by, or  expected to be incurred  by Escrow  Agent in  connection  with
performance of its duties and the exercise of its rights hereunder.

                           iii.  Escrow  Agent  shall have no  liability  to the
Company,  the  Investor,  or any person with respect to any such  suspension  of
performance or disbursement into court,  specifically including any liability or
claimed  liability that may arise, or be alleged to have arisen,  out of or as a
result of any delay in the disbursement of funds held in the Escrow Funds or any
delay in with respect to any other action required or requested of Escrow Agent.

             8.  Investment of Escrow Funds.  The Escrow Agent shall deposit the
Escrow Funds in a non-interest bearing money market account.

         If Escrow Agent has not received a Joint Written  Direction at any time
that an  investment  decision  must be made,  Escrow Agent may retain the Escrow
Fund, or such portion thereof,  as to which no Joint Written  Direction has been
received, in a non-interest bearing money market account.

             9. Resignation and Removal of Escrow Agent. Escrow Agent may resign
from the  performance of its duties  hereunder at any time by giving thirty (30)
days' prior  written  notice to the  parties or may be removed,  with or without
cause, by the parties,  acting jointly,  by furnishing a Joint Written Direction
to Escrow  Agent,  at any time by the  giving of ten (10)  days'  prior  written

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<PAGE>

notice  to  Escrow  Agent as  provided  herein  below.  Upon any such  notice of
resignation  or removal,  the  representatives  of the  Investor and the Company
identified  in Sections  13a.(iv) and 13b.(iv),  below,  jointly shall appoint a
successor  Escrow  Agent  hereunder,  which shall be a  commercial  bank,  trust
company or other financial  institution  with a combined  capital and surplus in
excess of  $10,000,000.00.  Upon the acceptance in writing of any appointment of
Escrow Agent hereunder by a successor Escrow Agent,  such successor Escrow Agent
shall  thereupon  succeed  to and become  vested  with all the  rights,  powers,
privileges  and duties of the retiring  Escrow  Agent,  and the retiring  Escrow
Agent  shall be  discharged  from its duties and  obligations  under this Escrow
Agreement,  but shall not be discharged  from any liability for actions taken as
Escrow Agent  hereunder  prior to such  succession.  After any  retiring  Escrow
Agent's  resignation or removal,  the provisions of this Escrow  Agreement shall
inure to its benefit as to any actions  taken or omitted to be taken by it while
it was Escrow Agent under this Escrow Agreement. The retiring Escrow Agent shall
transmit all records pertaining to the Escrow Funds and shall pay all funds held
by it in the Escrow Funds to the successor Escrow Agent,  after making copies of
such records as the retiring  Escrow Agent deems  advisable and after  deduction
and payment to the retiring  Escrow  Agent of all fees and  expenses  (including
court costs and  attorneys'  fees)  payable to,  incurred  by, or expected to be
incurred by the retiring  Escrow Agent in connection with the performance of its
duties and the exercise of its rights hereunder.

             10. Liability of Escrow Agent.

             a. Escrow Agent shall have no liability or obligation  with respect
to the Escrow  Funds  except  for Escrow  Agent's  willful  misconduct  or gross
negligence.  Escrow Agent's sole  responsibility  shall be for the  safekeeping,
investment, and disbursement of the Escrow Funds in accordance with the terms of
this  Agreement.  Escrow Agent shall have no implied duties or  obligations  and
shall not be charged with  knowledge or notice or any fact or  circumstance  not
specifically  set forth herein.  Escrow Agent may rely upon any instrument,  not
only as to its due  execution,  validity and  effectiveness,  but also as to the
truth and  accuracy of any  information  contained  therein,  which Escrow Agent
shall in good faith  believe to be genuine,  to have been signed or presented by
the person or parties  purporting to sign the same and conform to the provisions
of this  Agreement.  In no event shall  Escrow  Agent be liable for  incidental,
indirect, special, and consequential or punitive damages. Escrow Agent shall not
be obligated to take any legal action or commence any  proceeding  in connection
with the Escrow  Funds,  any account in which Escrow Funds are  deposited,  this
Agreement  or the  Standby  Equity  Distribution  Agreement,  or to  appear  in,
prosecute  or defend  any such  legal  action or  proceeding.  Escrow  Agent may
consult legal counsel  selected by it in the event of any dispute or question as
to construction of any of the provisions hereof or of any other agreement or its
duties  hereunder,  or relating to any dispute  involving any party hereto,  and
shall  incur no  liability  and shall be fully  indemnified  from any  liability
whatsoever  in acting in  accordance  with the opinion or  instructions  of such
counsel.  The Company and the Investor jointly and severally shall promptly pay,
upon  demand,  the  reasonable  fees and expenses of any such counsel and Escrow
Agent is hereby  authorized  to pay such fees and  expenses  from  funds held in
escrow.

             b. The Escrow Agent is hereby  authorized,  in its sole discretion,
to comply with orders issued or process entered by any court with respect to the
Escrow  Funds,  without  determination  by the  Escrow  Agent  of  such  court's
jurisdiction  in the matter.  If any portion of the Escrow  Funds is at any time

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<PAGE>

attached,  garnished  or  levied  upon  under any  court  order,  or in case the
payment, assignment, transfer, conveyance or delivery of any such property shall
be stayed or enjoined by any court order,  or in any case any order  judgment or
decree shall be made or entered by any court affecting such property or any part
thereof, then and in any such event, the Escrow Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ judgment or decree
which it is advised by legal counsel  selected by it,  binding upon it,  without
the need for appeal or other action;  and if the Escrow Agent  complies with any
such  order,  writ,  judgment  or  decree,  it shall not be liable to any of the
parties  hereto  or to any other  person or entity by reason of such  compliance
even though such order,  writ judgment or decree may be  subsequently  reversed,
modified, annulled, set aside or vacated.

             11.  Indemnification  of Escrow Agent.  From and at all times after
the date of this  Agreement,  the parties  jointly and severally,  shall, to the
fullest extent permitted by law and to the extent provided herein, indemnify and
hold harmless Escrow Agent and each director, officer, employee, attorney, agent
and affiliate of Escrow Agent (collectively,  the "Indemnified Parties") against
any  and  all  actions,   claims  (whether  or  not  valid),  losses,   damages,
liabilities,  costs and  expenses  of any kind or nature  whatsoever  (including
without limitation  reasonable  attorney's fees, costs and expenses) incurred by
or  asserted  against  any of the  Indemnified  Parties  from and after the date
hereof,  whether direct,  indirect or  consequential,  as a result of or arising
from or in any way relating to any claim,  demand,  suit,  action, or proceeding
(including  any  inquiry or  investigation)  by any  person,  including  without
limitation  the parties to this  Agreement,  whether  threatened  or  initiated,
asserting a claim for any legal or equitable remedy against any person under any
statute or  regulation,  including,  but not  limited  to, any  federal or state
securities  laws,  or under any  common  law or  equitable  cause or  otherwise,
arising from or in  connection  with the  negotiation,  preparation,  execution,
performance  or failure of  performance  of this  Agreement  or any  transaction
contemplated herein, whether or not any such Indemnified Party is a party to any
such  action  or  proceeding,  suit  or  the  target  of  any  such  inquiry  or
investigation; provided, however, that no Indemnified Party shall have the right
to be  indemnified  hereunder  for  liability  finally  determined by a court of
competent  jurisdiction,  subject to no further appeal,  to have resulted solely
from the gross negligence or willful  misconduct of such  Indemnified  Party. If
any such action or claim shall be brought or  asserted  against any  Indemnified
Party, such Indemnified Party shall promptly notify the Company and the Investor
hereunder  in writing,  and the  Investor(s)  and the Company  shall  assume the
defense  thereof,  including  the  employment  of counsel and the payment of all
expenses.  Such Indemnified Party shall, in its sole discretion,  have the right
to employ separate counsel (who may be selected by such Indemnified Party in its
sole discretion) in any such action and to participate and to participate in the
defense thereof, and the fees and expenses of such counsel shall be paid by such
Indemnified Party, except that the Investor and/or the Company shall be required
to pay such fees and expense if (a) the  Investor  or the  Company  agree to pay
such fees and  expenses,  or (b) the Investor  and/or the Company  shall fail to
assume the  defense of such  action or  proceeding  or shall  fail,  in the sole
discretion of such Indemnified Party, to employ counsel reasonably  satisfactory
to the Indemnified Party in any such action or proceeding,  (c) the Investor and
the Company are the  plaintiff in any such action or proceeding or (d) the named
or potential parties to any such action or proceeding (including any potentially
impleaded  parties)  include  both  Indemnified  Party the  Company  and/or  the
Investor and Indemnified Party shall have been advised by counsel that there may

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be one or more  legal  defenses  available  to it which  are  different  from or
additional to those  available to the Company or the Investor.  The Investor and
the Company  shall be jointly and  severally  liable to pay fees and expenses of
counsel  pursuant to the preceding  sentence,  except that any obligation to pay
under  clause (a) shall apply only to the party so  agreeing.  All such fees and
expenses  payable by the Company  and/or the Investor  pursuant to the foregoing
sentence  shall be paid from time to time as  incurred,  both in  advance of and
after the final  disposition  of such action or claim.  The  obligations  of the
parties under this section shall survive any termination of this Agreement,  and
resignation  or  removal  of  the  Escrow  Agent  shall  be  independent  of any
obligation of Escrow Agent.

             12. Expenses of Escrow Agent. Except as set forth in Section 11 the
Company shall  reimburse  Escrow Agent for all of his  reasonable  out-of-pocket
expenses,  including  attorneys' fees, travel expenses,  telephone and facsimile
transmission  costs,  postage  (including  express mail and  overnight  delivery
charges),  copying  charges  and the like as  outlined  in  Section  12.4 of the
Standby  Equity  Distribution  Agreement  dated  the  date  hereof.  All  of the
compensation  and  reimbursement  obligations set forth in this Section shall be
payable by the Company,  upon demand by Escrow  Agent.  The  obligations  of the
Company under this Section shall survive any  termination  of this Agreement and
the resignation or removal of Escrow Agent.

             13. Warranties.

                  a.  The  Investor  makes  the  following  representations  and
warranties to the Escrow Agent:

                           i. The  Investor  has full  power  and  authority  to
execute and deliver this Agreement and to perform its obligations hereunder.

                           ii.  This  Agreement  has been duly  approved  by all
necessary  action of the  Investor,  including  any  necessary  approval  of the
limited partner of the Investor,  has been executed by duly authorized  officers
of the Investor's general partner, enforceable in accordance with its terms.

                           iii. The execution,  delivery, and performance of the
Investor of this Agreement  will not violate,  conflict with, or cause a default
under the agreement of limited  partnership of the Investor,  any applicable law
or regulation,  any court order or administrative  ruling or degree to which the
Investor  is a  party  or any of its  property  is  subject,  or any  agreement,
contract, indenture, or other binding arrangement.

                           iv. Mark A. Angelo has been duly  appointed to act as
the  representative  of Investor  hereunder  and has full power and authority to
execute,  deliver, and perform this Agreement,  to execute and deliver any Joint
Written Direction,  to amend,  modify, or waive any provision of this Agreement,
and to take any and all other  actions as the  Investor's  representative  under
this Agreement, all without further consent or direction form, or notice to, the
Investor or any other party.

                           v. No party other than the parties  hereto  have,  or
shall have, any lien, claim or security interest in the Escrow Funds or any part
thereof.  No financing statement under the Uniform Commercial Code is on file in
any  jurisdiction  claiming  a  security  interest  in  or  describing  (whether
specifically or generally) the Escrow Funds or any part thereof.


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                           vi. All of the  representations and warranties of the
Investor  contained  herein are true and complete as of the date hereof and will
be true and complete at the time of any disbursement from the Escrow Funds.

                  b.  The  Company  makes  the  following   representations  and
warranties to Escrow Agent and the Investor:

                           i.  The  Company  is a  corporation  duly  organized,
validly  existing,  and in good standing  under the laws of the State of Nevada,
and has full power and  authority to execute and deliver this  Agreement  and to
perform its obligations hereunder.

                           ii.  This  Agreement  has been duly  approved  by all
necessary corporate action of the Company,  including any necessary  shareholder
approval,  has  been  executed  by  duly  authorized  officers  of the  Company,
enforceable in accordance with its terms.

                           iii. The execution,  delivery, and performance by the
Company of this  Escrow  Agreement  is in  accordance  with the  Standby  Equity
Distribution  Agreement and will not violate,  conflict with, or cause a default
under the articles of incorporation or bylaws of the Company, any applicable law
or regulation,  any court order or administrative  ruling or decree to which the
Company  is a  party  or any of  its  property  is  subject,  or any  agreement,
contract, indenture, or other binding arrangement.

                           iv.  Bernard J. Walter has been duly appointed to act
as the  representative of the Company hereunder and has full power and authority
to execute,  deliver,  and perform  this  Agreement,  to execute and deliver any
Joint  Written  Direction,  to  amend,  modify or waive  any  provision  of this
Agreement and to take all other actions as the  Company's  Representative  under
this Agreement, all without further consent or direction from, or notice to, the
Company or any other party.

                           v. No party other than the parties hereto shall have,
any lien, claim or security interest in the Escrow Funds or any part thereof. No
financing  statement  under  the  Uniform  Commercial  Code  is on  file  in any
jurisdiction claiming a security interest in or describing (whether specifically
or generally) the Escrow Funds or any part thereof.

                           vi. All of the  representations and warranties of the
Company contained herein are true and complete as of the date hereof and will be
true and complete at the time of any disbursement from the Escrow Funds.

             14. Consent to Jurisdiction  and Venue. In the event that any party
hereto commences a lawsuit or other proceeding  relating to or arising from this
Agreement,  the parties  hereto agree that the United States  District Court for
the District of New Jersey shall have the sole and exclusive  jurisdiction  over
any  such   proceeding.   If  all  such  courts  lack  federal   subject  matter
jurisdiction,  the parties agree that the Superior Court Division of New Jersey,
Chancery  Division of Hudson County shall have sole and exclusive  jurisdiction.
Any of these  courts  shall be proper  venue for any such  lawsuit  or  judicial
proceeding and the parties hereto waive any objection to such venue. The parties
hereto consent to and agree to submit to the  jurisdiction  of any of the courts
specified  herein  and agree to accept the  service of process to vest  personal
jurisdiction over them in any of these courts.


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<PAGE>

             15. Notice. All notices and other communications hereunder shall be
in writing and shall be deemed to have been validly  served,  given or delivered
five (5) days after deposit in the United  States mail,  by certified  mail with
return receipt requested and postage prepaid, when delivered personally, one (1)
day  delivery  to any  overnight  courier,  or  when  transmitted  by  facsimile
transmission and addressed to the party to be notified as follows:

If to Investor, to:          Cornell Capital Partners, LP
                             101 Hudson Street -Suite 3700
                             Jersey City, NJ 07302
                             Attention:  Mark Angelo
                                         Portfolio Manager
                             Telephone:  (201) 985-8300
                             Facsimile:  (201) 985-8266

If to Escrow Agent, to:      David Gonzalez Esq.
                             101 Hudson Street -Suite 3700
                             Jersey City, NJ 07302
                             Telephone:  (201) 985-8300
                             Facsimile:  (201) 985-8266

If to Company, to:           Power Technology, Inc.
                             109 North Post Oak Lane, Suite 422
                             Houston, Texas 77024
                             Attention:  Bernard J. Walter
                             Telephone:  (713) 621-4310
                             Facsimile:  (713) 688-0622

With a copy to:              Stephen A. Zrenda, Jr., P.C.
                             100 N. Broadway, Suite 2440
                             Oklahoma City, OK 73102
                             Attention:  Stephen A. Zrenda, Jr.
                             Telephone:  (405) 235-2111
                             Facsimile:  (405) 235-2157

         Or to such other address as each party may designate for itself by like
notice.

             16.  Amendments or Waiver.  This Agreement may be changed,  waived,
discharged or terminated  only by a writing  signed by the parties of the Escrow
Agent.  No delay or omission by any party in  exercising  any right with respect
hereto  shall  operate  as  waiver.  A waiver on any one  occasion  shall not be
construed as a bar to, or waiver of, any right or remedy on any future occasion.

             17. Severability.  To the extent any provision of this Agreement is
prohibited  by  or  invalid  under  applicable  law,  such  provision  shall  be
ineffective  to  the  extent  of  such  prohibition,   or  invalidity,   without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.


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<PAGE>

             18.   Governing  Law.  This   Agreement   shall  be  construed  and
interpreted  in  accordance  with the  internal  laws of the State of New Jersey
without giving effect to the conflict of laws principles thereof.

             19.  Entire  Agreement.   This  Agreement  constitutes  the  entire
Agreement  between  the  parties  relating  to  the  holding,   investment,  and
disbursement  of  the  Escrow  Funds  and  sets  forth  in  their  entirety  the
obligations and duties of the Escrow Agent with respect to the Escrow Funds.

             20. Binding Effect. All of the terms of this Agreement,  as amended
from  time to time,  shall be  binding  upon,  inure  to the  benefit  of and be
enforceable by the respective heirs, successors and assigns of the Investor, the
Company, or the Escrow Agent.

             21. Execution of Counterparts. This Agreement and any Joint Written
Direction  may be  executed  in  counter  parts,  which when so  executed  shall
constitute one and same agreement or direction.

             22. Termination.  Upon the first to occur of the termination of the
Standby Equity Distribution  Agreement dated the date hereof or the disbursement
of all  amounts in the  Escrow  Funds and Common  Stock into court  pursuant  to
Section 7 hereof,  this Agreement shall terminate and Escrow Agent shall have no
further obligation or liability whatsoever with respect to this Agreement or the
Escrow Funds or Common Stock.


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<PAGE>

         IN WITNESS  WHEREOF the parties to this Escrow  Agreement have hereunto
set their hands and seals the day and year above set forth.

                                                POWER TECHNOLOGY, INC.

                                                By:
                                                    ----------------------------
                                                Name:    Bernard J. Walter
                                                Title:   President


                                                CORNELL CAPITAL PARTNERS, LP

                                                By:      Yorkville Advisors, LLC
                                                Its:     General Partner

                                                By:
                                                    ----------------------------
                                                Name:    Mark A. Angelo
                                                Title:   Portfolio Manager



                                                By:
                                                    ----------------------------
                                                Name:    David Gonzalez, Esq.




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