EXHIBIT 10.3

                                ESCROW AGREEMENT

     THIS ESCROW AGREEMENT (this "AGREEMENT") is made as of May 31, 2002, by and
among Pacific Magtron International Corp., a corporation  incorporated under the
laws of  Nevada  (the  "COMPANY"),  the  Purchasers  signatory  hereto  (each an
"Purchaser" and together the  "PURCHASERS"),  and Feldman Weinstein LLP, with an
address  at 36 West  44th  Street,  New York,  NY 10036  (the  "ESCROW  Agent").
CAPITALIZED  TERMS USED BUT NOT DEFINED HEREIN SHALL HAVE THE MEANINGS SET FORTH
IN THE SECURITIES PURCHASE AGREEMENT REFERRED TO IN THE FIRST RECITAL.

                              W I T N E S S E T H:

     WHEREAS,  the  Purchasers  will be  purchasing  from  the  Company,  in the
aggregate,  up to US$1,000,000 of the Company's  Preferred Stock (the "PREFERRED
STOCK") and  Warrants as set forth in the  Securities  Purchase  Agreement  (the
"PURCHASE  AGREEMENT")  dated the date  hereof  between the  Purchasers  and the
Company,  which  will be  issued as per the terms  contained  herein  and in the
Purchase Agreement; and

     WHEREAS,  it is intended that the purchase of the securities be consummated
in  accordance  with the  requirements  set forth by  Sections  4(2) and/or 4(6)
and/or  Regulation D promulgated  under the  Securities Act of 1933, as amended;
and

     WHEREAS,  the Company and the  Purchasers  have  requested  that the Escrow
Agent hold the  purchase  price with  respect to the Closing in escrow until the
Escrow Agent has received the Release  Notice in the form  attached  hereto from
the Company and each Purchaser;

     NOW,  THEREFORE,  in  consideration  of the covenants  and mutual  promises
contained  herein and other good and  valuable  consideration,  the  receipt and
legal  sufficiency of which are hereby  acknowledged and intending to be legally
bound hereby, the parties agree as follows:

                                    ARTICLE 1
                               TERMS OF THE ESCROW

     The parties  hereby agree to  establish  an escrow  account with the Escrow
Agent  whereby the Escrow  Agent shall hold the funds for the  purchase of up to
US$1,000,000,  in the aggregate,  of the Preferred Stock and the Warrants at the
Closing as contemplated by the Purchase Agreement.

     1.1. FIRST CLOSING.

          (a)  Upon the Escrow  Agent's  receipt of the  purchase  price for the
     First  Closing  into its master  escrow  account,  together  with  executed
     counterparts of this Agreement, the Purchase Agreement and the Registration
     Rights  Agreement,  it shall  telephonically  advise  the  Company,  or the

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     Company's  designated  attorney  or  agent,  of the  amount of funds it has
     received into its master escrow account.

          (b)  Wire transfers to the Escrow Agent shall be made as follows:

               Chase Manhattan Bank, NA
               510 Fifth Avenue
               New York, NY 10036 USA
               ABA Routing Number: 021000021
               Account Number: 987074342668
               Name of Account: Feldman Weinstein LLP Master Escrow Account
               Remark: PMIC

          (c)  The Company,  upon receipt of said notice,  shall  deliver to the
     Escrow Agent the certificates  representing the applicable  Preferred Stock
     and the  Warrants  to be issued  to each  Purchaser  at the  First  Closing
     together with:

               (i)   a copy of the filed Certificate of Designations;

               (ii)  the  original   executed   Registration   Rights  Agreement
                     substantially  in the  form of  EXHIBIT  B to the  Purchase
                     Agreement;

               (iii) the  original  executed   Instructions  to  Transfer  Agent
                     substantially  in the  form of  EXHIBIT  E to the  Purchase
                     Agreement;

               (iv)  the  original  executed  opinions of Quarles & Brady LLP in
                     the form of EXHIBIT D to the Purchase Agreement;

               (v)   a warrant issued to M.H. Meyerson  ("MEYERSON") to purchase
                     up to a number of shares of Common  Stock equal to $100,000
                     divided by the Closing Price on the Trading Day immediately
                     prior to the First Closing Date otherwise identical to that
                     of the Warrant (the "MH WARRANT"); and

               (vi)  an original counterpart of this Escrow Agreement.

          (d)  In the  event  that the  foregoing  items  are not in the  Escrow
     Agent's  possession  within  three (3)  Trading  Days of the  Escrow  Agent
     notifying  the Company  that the Escrow  Agent has custody of the  purchase
     price applicable to such Preferred Stock and Warrants,  then each Purchaser
     shall have the right to demand the return of their purchase price.

          (e)  Once the  Escrow  Agent  receives  a  Release  Notice in the form
     attached hereto as EXHIBIT X executed by the Company and each Purchaser, it
     shall wire 90% of that amount of funds necessary to purchase the applicable
     Preferred   Stock  and  the  Warrants,   net  of  $15,000  for  the  legal,
     administrative  and due diligence  costs and expenses of the  Purchasers to
     Feldman Weinstein LLP, per the written  instructions of the Company, 7% per

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     the instructions of Purchasers as an original purchase price refund and the
     remaining 3% per the instructions of Meyerson.

          (f)  Once the  funds  (as set  forth  above)  have  been  sent per the
     Company's  instructions,  the Escrow  Agent shall then  arrange to have the
     Purchase Agreement,  the Warrants, the MH Warrant, the Preferred Stock, the
     copy of the Certificate of Designations, the Registration Rights Agreement,
     the  Escrow  Agreement,  the  opinion of counsel  and the  Instructions  to
     Transfer Agent delivered to the appropriate parties.

     1.2. SECOND CLOSING.

          (a)  Upon the Escrow  Agent's  receipt of the  purchase  price for the
     Second  Closing  into its master  escrow  account  it shall  telephonically
     advise the Company,  or the Company's  designated attorney or agent, of the
     amount of funds it has received into its master escrow account.

          (b)  The Company,  upon receipt of said notice,  shall  deliver to the
     Escrow Agent the certificates  representing the applicable  Preferred Stock
     to be issued to each Purchaser at the Second Closing

          (c)  In the event that the  certificate of Preferred  Stock are not in
     the Escrow Agent's  possession  within three (3) Trading Days of the Escrow
     Agent  notifying  the  Company  that the  Escrow  Agent has  custody of the
     purchase price  applicable to such Preferred Stock and Warrants,  then each
     Purchaser  shall  have the right to  demand  the  return of their  purchase
     price.

          (d)  Once the  Escrow  Agent  receives  a  Release  Notice in the form
     attached hereto as EXHIBIT X executed by the Company and each Purchaser, it
     shall wire 90% of that amount of funds necessary to purchase the applicable
     Preferred  Stock  and the  Warrants  per the  written  instructions  of the
     Company,  7% per the  instructions  of Purchasers  as an original  purchase
     price refund and the remaining 3% per the instructions of Meyerson.

          (e)  Once the  funds  (as set  forth  above)  have  been  sent per the
     Company's  instructions,  the Escrow  Agent shall then  arrange to have the
     Preferred Stock delivered to the appropriate parties.

                                    ARTICLE 2
                                  MISCELLANEOUS

     2.1. No waiver or any breach of any covenant or provision  herein contained
shall be deemed a waiver of any preceding or succeeding  breach  thereof,  or of
any other  covenant or  provision  herein  contained.  No  extension of time for
performance  of any  obligation  or act shall be deemed an extension of the time
for performance of any other obligation or act.

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     2.2. All notices or other  communications  required or permitted  hereunder
shall be in writing, and shall be sent as set forth in the Purchase Agreement.

     2.3.  This Escrow  Agreement  shall be binding  upon and shall inure to the
benefit of the permitted successors and permitted assigns of the parties hereto.

     2.4.  This Escrow  Agreement is the final  expression  of, and contains the
entire agreement between,  the parties with respect to the subject matter hereof
and  supersedes  all prior  understandings  with  respect  thereto.  This Escrow
Agreement may not be modified, changed,  supplemented or terminated, nor may any
obligations  hereunder  be waived,  except by written  instrument  signed by the
parties to be charged or by its agent duly authorized in writing or as otherwise
expressly permitted herein.

     2.5.  Whenever  required  by the  context  of this  Escrow  Agreement,  the
singular shall include the plural and masculine shall include the feminine. This
Escrow Agreement shall not be construed as if it had been prepared by one of the
parties,  but rather as if both parties had prepared the same.  Unless otherwise
indicated, all references to Articles are to this Escrow Agreement.

     2.6. The parties hereto expressly agree that this Escrow Agreement shall be
governed by, interpreted under and construed and enforced in accordance with the
laws of the  State of New  York.  Any  action  to  enforce,  arising  out of, or
relating in any way to, any  provisions of this Escrow  Agreement  shall only be
brought in a state or Federal court sitting in New York City.

     2.7. The Escrow Agent's duties hereunder may be altered,  amended, modified
or revoked  only by a writing  signed by the  Company,  each  Purchaser  and the
Escrow Agent.

     2.8. The Escrow Agent shall be obligated  only for the  performance of such
duties as are  specifically set forth herein and may rely and shall be protected
in relying or refraining  from acting on any instrument  reasonably  believed by
the  Escrow  Agent to be genuine  and to have been  signed or  presented  by the
proper party or parties. The Escrow Agent shall not be personally liable for any
act the Escrow  Agent may do or omit to do  hereunder  as the Escrow Agent while
acting in good faith,  and any act done or omitted by the Escrow Agent  pursuant
to the  advice  of the  Escrow  Agent's  attorneys-at-law  shall  be  conclusive
evidence of such good faith.

     2.9. The Escrow Agent is hereby  expressly  authorized to disregard any and
all  warnings  given by any of the  parties  hereto  or by any  other  person or
corporation,  excepting  only  orders or  process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order,  judgment
or decree,  the Escrow Agent shall not be liable to any of the parties hereto or
to any  other  person,  firm or  corporation  by  reason  of such  decree  being
subsequently reversed,  modified,  annulled, set aside, vacated or found to have
been entered without jurisdiction.

     2.10. The Escrow Agent shall not be liable in any respect on account of the
identity,  authorization  or rights of the parties  executing or  delivering  or
purporting  to execute or deliver the  Purchase  Agreement  or any  documents or
papers deposited or called for thereunder.

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     2.11.  The Escrow Agent shall be entitled to employ such legal  counsel and
other  experts as the Escrow  Agent may deem  necessary  properly  to advise the
Escrow Agent in connection  with the Escrow Agent's duties  hereunder,  may rely
upon  the  advice  of  such  counsel,   and  may  pay  such  counsel  reasonable
compensation  therefor  which  shall  be paid  by the  Escrow  Agreement  unless
otherwise  provided  for in Section  3.14.  THE ESCROW  AGENT HAS ACTED AS LEGAL
COUNSEL FOR THE  PURCHASERS,  AND MAY  CONTINUE TO ACT AS LEGAL  COUNSEL FOR THE
PURCHASERS,  FROM TIME TO TIME,  NOTWITHSTANDING  ITS DUTIES AS THE ESCROW AGENT
HEREUNDER.  THE COMPANY  CONSENTS TO THE ESCROW AGENT IN SUCH  CAPACITY AS LEGAL
COUNSEL  FOR THE  PURCHASERS  AND  WAIVES  ANY CLAIM  THAT  SUCH  REPRESENTATION
REPRESENTS A CONFLICT OF INTEREST ON THE PART OF THE ESCROW  AGENT.  THE COMPANY
UNDERSTANDS  THAT THE PURCHASERS AND THE ESCROW AGENT ARE RELYING  EXPLICITLY ON
THE FOREGOING PROVISION IN ENTERING INTO THIS ESCROW AGREEMENT.

     2.12. The Escrow Agent's  responsibilities  as escrow agent hereunder shall
terminate if the Escrow Agent shall resign by written  notice to the Company and
the  Purchasers.  In the event of any such  resignation,  the Purchasers and the
Company shall appoint a successor Escrow Agent.

     2.13. If the Escrow Agent reasonably  requires other or further instruments
in connection with this Escrow  Agreement or obligations in respect hereto,  the
necessary parties hereto shall join in furnishing such instruments.

     2.14.  It is  understood  and agreed  that  should any  dispute  arise with
respect to the delivery and/or ownership or right of possession of the documents
or the escrow  funds held by the Escrow  Agent  hereunder,  the Escrow  Agent is
authorized and directed in the Escrow  Agent's sole  discretion (1) to retain in
the Escrow  Agent's  possession  without  liability to anyone all or any part of
said  documents or the escrow funds until such disputes  shall have been settled
either by mutual  written  agreement of the parties  concerned by a final order,
decree  or  judgment  or a court of  competent  jurisdiction  after the time for
appeal has expired and no appeal has been perfected,  but the Escrow Agent shall
be under no duty  whatsoever to institute or defend any such  proceedings or (2)
to deliver the escrow  funds and any other  property and  documents  held by the
Escrow Agent  hereunder to a state or Federal  court  having  competent  subject
matter  jurisdiction  and located in the City of New York in accordance with the
applicable procedure therefor.

     2.15.  The Company  and each  Purchaser  agree  jointly  and  severally  to
indemnify and hold harmless the Escrow Agent and its partners, employees, agents
and representatives from any and all claims,  liabilities,  costs or expenses in
any way  arising  from or relating  to the duties or  performance  of the Escrow
Agent  hereunder  or the  transactions  contemplated  hereby or by the  Purchase
Agreement  other than any such claim,  liability,  cost or expense to the extent
the same shall have been determined by final,  unappealable  judgment of a court
of competent  jurisdiction to have resulted from the gross negligence or willful
misconduct of the Escrow Agent.

                            [SIGNATURE PAGE FOLLOWS]

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                      [SIGNATURE PAGE TO ESCROW AGREEMENT]

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
this __ day of May, 2002.


                                        PACIFIC MAGTRON INTERNATIONAL CORP.


                                        By: /s/ Theodore S. Li
                                            ------------------------------------
                                            Name: Theodore S. Li
                                            Title: Chairman of the Board and
                                                   President


                                        PURCHASERS:

                                        STONESTREET L.P.


                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:


                                        ESCROW AGENT:

                                        FELDMAN WEINSTEIN LLP


                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

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<PAGE>
                                                                    EXHIBIT X TO
                                                                ESCROW AGREEMENT

                                 RELEASE NOTICE

     The UNDERSIGNED, pursuant to the Escrow Agreement, dated as of May 31, 2002
among Pacific Magtron  International Corp., the Purchasers signatory thereto and
Feldman  Weinstein  LLP, as Escrow  Agent (the "Escrow  Agreement";  capitalized
terms used herein and not defined shall have the meaning  ascribed to such terms
in the  Escrow  Agreement),  hereby  notify  the  Escrow  Agent that each of the
conditions  precedent to the purchase and sale of the Preferred  Stock set forth
in the Securities  Purchase  Agreement have been satisfied.  The Company and the
undersigned   Purchaser   hereby   confirm   that   all  of   their   respective
representations  and warranties  contained in the Purchase Agreement remain true
and  correct  and  authorize  the  release by the Escrow  Agent of the funds and
documents to be released at the Closing as  described  in the Escrow  Agreement.
This Release Notice shall not be effective until executed by the Company and the
Purchaser.

     This  Release  Notice  may be signed in one or more  counterparts,  each of
which shall be deemed an original.

     IN WITNESS  WHEREOF,  the undersigned have caused this Release Notice to be
duly executed and delivered as of this __ day of May, 2002.


                                        PACIFIC MAGTRON INTERNATIONAL CORP.


                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:


                                        PURCHASERS:

                                        STONESTREET L.P.


                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

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