<PAGE>

                                                                    EXHIBIT 10.3

                              ESCROW AGREEMENT dated as of the day of
                              _______________, 2001 (the "Agreement") by and
                              among FROST CAPITAL GROUP, INC., a Delaware
                              corporation (the "Company"), RICHARD B. FROST,
                              PHILLIP FROST, M.D., MARSHAL E. ROSENBERG, Ph.D.,
                              RICHARD C. PFENNIGER, JR., SPENCER J. ANGEL and
                              DIANNA GROUT, (collectively, the "Company
                              Principals") and AMERICAN STOCK TRANSFER & TRUST
                              COMPANY, a New York limited purpose trust company
                              (the "Escrow Agent").

     The Company has entered into an Underwriting Agreement dated
__________________, 2001 (the "Underwriting Agreement") with Ladenburg Capital
Management Inc. acting as representative of the underwriters (the
"Underwriters"), pursuant to which, among other matters, the Underwriters have
agreed to purchase from the Company up to an aggregate of 1,250,000 units,
including 187,500 units subject to the Underwriters' over-allotment option (the
"Units"), each Unit to consist of (i) one (1) share of the Company's Common
Stock, par value $.0001 per share (the "Common Stock"), and (ii) one (1) Class A
Redeemable Warrant, all as more fully described in the Company's definitive
Prospectus dated ____________, 2001 comprising part of the Company's
Registration Statement on Form S-1 under the Securities Act of 1933, as amended
(File No. 333-60566), declared effective on ________________, 2001 (the
"Prospectus").

     The Company Principals have agreed as a condition of the consummation of
the sale of the Units to deposit their shares of Common Stock and Class A
warrants of the Company, as set forth opposite their respective names in Exhibit
A attached hereto (collectively the "Escrow Securities"), in escrow as
hereinafter provided.

     The Company and the Company Principals desire that the Escrow Agent accept
the Escrow Securities, in escrow, to be held and disbursed as hereinafter
provided.

     NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:

     1.   APPOINTMENT OF ESCROW AGENT. The Company and the Company Principals
hereby appoint the Escrow Agent to act in accordance with and subject to the
terms of this Agreement, and the Escrow Agent hereby accepts such appointment
and agrees to act in accordance with and subject to such terms.

     2.   DEPOSIT OF ESCROW SECURITIES. On or before the Closing Date of the
sale of the Units, each of the Company Principals shall deliver to the Escrow
Agent certificates, either endorsed in blank or accompanied by stock powers
endorsed in blank, in either instance with
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signatures guaranteed by a commercial bank or a member of the New York Stock
Exchange, Inc. representing his or her respective Escrow Securities, to be held
and disbursed subject to the terms and conditions of this Agreement. In
addition, all dividends or other distributions payable in equity securities of
the Company or other non-cash property (the "Non-Cash Dividends") will be
delivered to the Escrow Agent to hold in accordance with the terms hereof. In
the event, subsequent to a business combination as described in the Prospectus
(the "Business Combination"), there is a stock exchange or other transaction
pursuant to which all the Company's stockholders are given the right to exchange
their Company securities for property other than cash (the "Exchanged
Securities"), the Company Principals may instruct the Escrow Agent to make the
exchange on their behalf, in which event, the Exchanged Securities issued on
behalf of the Company Principals will be delivered to the Escrow Agent to be
held hereunder. As used herein, the term Escrow Securities will be deemed to
include the Non-Cash Dividends and Exchanged Securities, if any.

     3.   DISBURSEMENT OF THE ESCROW ACCOUNT. Upon the earlier of (i) six months
following the consummation of a Business Combination or (ii) the liquidation of
the Company, the Escrow Agent shall disburse the Escrow Securities to the
Company Principals in accordance with their respective interests therein as set
forth upon the aforementioned Exhibit A, whereupon the Escrow Agent shall be
released from further liability hereunder.

     4.   RIGHTS OF COMPANY PRINCIPALS IN ESCROW SECURITIES. The Company
Principals shall retain all of their rights as stockholders of the Company
during such period as the Escrow Securities shall be retained by the Escrow
Agent pursuant to this Agreement including, without limitation, the right to
vote the shares of Common Stock held in escrow (subject, however, to certain
voting restrictions and obligations contained in other agreements executed by
the Company Principals) and to receive cash dividends payable thereon, if any.
No sale, transfer or other disposition may be made of any or all of the Escrow
Securities, except by gift to a member of Company Principal's immediate family;
by transfer to a trust, IRA or 401(k) plan, as defined under ERISA, whereby the
beneficiary is the Company Principal or a member of Company Principal's
immediate family; by virtue of the laws of descent and distribution upon death
of any Company Principal; or pursuant to a qualified domestic relations order;
PROVIDED, HOWEVER, that such permissive transfers may be implemented only upon
the respective transferees' written agreement to be likewise bound by the terms
and conditions of this Agreement.

     5.   CONCERNING THE ESCROW AGENT.

          5.1  The Escrow Agent shall not be liable for any action taken or
omitted by it, or any action suffered by it to be taken or omitted, in good
faith and in the exercise of its own best judgment, and may rely conclusively
and shall be protected in acting upon any order, notice, demand, certificate,
opinion or advice of counsel (including counsel chosen by the Escrow Agent),
statement, instrument, report or other paper or document (not only as to its due
execution and the validity and effectiveness of its provisions, but also as to
the truth and acceptability of any information therein contained) which is
believed by the Escrow Agent to be genuine and to be signed or presented by the
proper person or persons. The Escrow Agent shall not be bound by any notice or
demand, or any waiver, modification, termination or rescission of this Agreement
unless evidenced
<PAGE>

by a writing delivered to the Escrow Agent signed by the proper party or parties
and, if the duties or rights of the Escrow Agent are affected, unless it shall
have given its prior written consent thereto.

          5.2  The Escrow Agent shall not be responsible for the sufficiency or
accuracy, the form of, or the execution, validity, value or genuineness of, any
document or property received, held or delivered by it hereunder, or of any
signature or endorsement thereon, or for any lack of endorsement thereon, or for
any description therein, nor shall the Escrow Agent be responsible or liable in
any respect on account of the identity, authority or rights of the persons
executing or delivering or purporting to execute or deliver any document or
property paid or delivered by the Escrow Agent pursuant to the provisions
hereof. The Escrow Agent shall not be liable for any loss which may be incurred
by reason of any investment of any monies or properties which it holds
hereunder.

          5.3  The Escrow Agent shall have the right to assume in the absence of
written notice to the contrary from the proper person or persons that a fact or
an event by reason of which an action would or might be taken by the Escrow
Agent does not exist or has not occurred, without incurring liability for any
action taken or omitted, in good faith and in the exercise of its own best
judgment, in reliance upon such assumption.

          5.4  The Escrow Agent shall be indemnified and held harmless by the
Company and the Company Principals, jointly and severally, from and against any
expenses, including counsel fees and disbursements, or loss suffered by the
Escrow Agent in connection with any action, suit or other proceeding involving
any claim, or in connection with any claim or demand, which in any way directly
or indirectly, arises out of or relates to this Agreement, the services of the
Escrow Agent hereunder, the monies or other property held by it hereunder or any
such expense or loss. Promptly after the receipt by the Escrow Agent of notice
of any demand or claim or the commencement of any action, suit or proceeding,
the Escrow Agent shall, if a claim in respect thereof shall be made against the
other parties hereto, notify such parties thereof in writing; but the failure by
the Escrow Agent to give such notice shall not relieve any party from any
liability which such party may have to the Escrow Agent hereunder, but such
party may recover from the Escrow Agent any actual damages arising from the
Escrow Agent's failure to give such timely notice. In the event of the receipt
of such notice, the Escrow Agent, in its sole discretion, may commence an action
in the nature of interpleader in an appropriate court to determine ownership or
disposition of the Escrow Securities or it may deposit the Escrow Securities
with the clerk of any appropriate court or it may retain the Escrow Securities
pending receipt of a final, non-appealable order of a court having jurisdiction
over all of the parties hereto directing to whom and under what circumstances
the Escrow Securities are to be disbursed and delivered.

          5.5  Notwithstanding any obligation to make payments and deliveries
hereunder, the Escrow Agent may retain and hold for such time as it deems
necessary such amount of monies or property as it shall from time to time in its
sole discretion deem sufficient to indemnify itself for any loss or expense or
for any amounts due it. For the purposes hereof, the term "expense or loss"
shall include all amounts paid or payable to satisfy any claim, demand or
liability, or in settlement of any claim, demand, action, suit or proceeding
settled with the express written consent of the Escrow
<PAGE>

Agent, and all costs and expenses, including but not limited to, counsel fees
and disbursements paid or incurred in investigating or defending any such claim,
demand, action, suit or proceeding.

          5.6  The Escrow Agent shall be entitled to reasonable compensation
from the Company for all services rendered by it hereunder. The Escrow Agent
shall also be entitled to reimbursement from the Company for all expenses paid
or incurred by it in the administration of its duties hereunder including, but
not limited to, all counsel, advisors' and agents' fees and disbursements and
all taxes or other governmental charges.

          5.7  From time to time on and after the date hereof, the Company and
the Company Principals shall deliver or cause to be delivered to the Escrow
Agent such further documents and instruments and shall do or cause to be done
such further acts as the Escrow Agent shall reasonably request (it being
understood that the Escrow Agent shall have no obligation to make such request)
to carry out more effectively the provisions and purposes of this Agreement, to
evidence compliance herewith or to assure itself that it is protected in acting
hereunder.

          5.8  The Escrow Agent may resign at any time and be discharged from
its duties as escrow agent hereunder by giving the other parties hereto at least
thirty (30) days' prior written notice thereof. As soon as practicable after its
resignation, the Escrow Agent shall turn over to a successor escrow agent
appointed by the other parties hereto, jointly, all monies and property held
hereunder (less such amount as the Escrow Agent is entitled to retain pursuant
to Paragraph 5.6) upon presentation of the document appointing the new escrow
agent and its acceptance thereof. If no new agent is so appointed within the
sixty (60) day period following the giving of such notice of resignation, the
Escrow Agent may deposit the Escrow Securities with any court it deems
appropriate.

          5.9  The Escrow Agent shall resign and be discharged from its duties
as escrow agent hereunder if so requested in writing at anytime by the other
parties hereto, jointly; provided, however, that such resignation shall become
effective only upon acceptance of appointment by a successor escrow agent as
provided in paragraph 5.8.

          5.10 Notwithstanding anything herein to the contrary, the Escrow Agent
shall not be relieved from liability or be indemnified hereunder for its own
gross negligence or its own willful misconduct.

     6.   MISCELLANEOUS.

          6.1  This Agreement shall for all purposes be deemed to be made under
and shall be construed in accordance with the laws of the State of New York.

          6.2  This Agreement contains the entire agreement of the parties
hereto with respect to the subject matter hereof and, except as expressly
provided herein, may not be changed or modified except by an instrument in
writing signed by the party to the charged.
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          6.3  The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
thereof.

          6.4  This Agreement shall be binding upon and inure to the benefit of
the respective parties hereto and their legal representatives, successors and
assigns.

          6.5  Any notice or other communication required or which may be given
hereunder shall be in writing and either be delivered personally or be mailed,
certified or registered mail, return receipt requested, postage prepaid, and
shall be deemed given when so delivered personally or, if mailed, two (2) days
after the date of mailing, as follows:

     If to the Company, to:

          Frost Capital Group, Inc.
          1131 Spanish River Road
          Boca Raton, Florida 33432
          Attn: Richard B. Frost

     with a copy to:

          Akerman, Senterfitt & Eidson, P.A.
          One S.E. 3rd Avenue, 28th Floor
          Miami, Florida 33131
          Attn: Teddy Klinghoffer, Esq.

     If to the Company Principals, to each as follows:

               (1)  Richard B. Frost
                    1131 Spanish River Road
                    Boca Raton, Florida 33432

               (2)  Phillip Frost, M.D.
                    4400 Biscayne Boulevard
                    Miami, Florida 33137

               (3)  Marshal E. Rosenberg, Ph.D.
                    The Marshall E. Rosenberg Organization, Inc.
                    9350 S. Dixie Highway--Suite 1530
                    Miami, Florida 33156

               (4)  Richard C. Pfenniger, Jr.
                    4400 Biscayne Boulevard
                    Miami, Florida 33137
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               (5)  Spencer Angel
                    80 Southwest 8th Street
                    Miami, Florida 33131

               (6)  Dianna Grout
                    1131 Spanish River Road
                    Boca Raton, Florida 33432


     and if to the Escrow Agent, to:

          American Stock Transfer & Trust Company
          40 Wall Street
          New York, New York 10005
          Attention: President

The parties may change the persons and addresses to which the notices or other
communications are to be sent by giving written notice to any such change in the
manner provided herein for giving notice.
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     WITNESS the execution of this Agreement as of the date first above written.

                              FROST CAPITAL GROUP, INC.


                              By:_________________________________________
                                    Richard B. Frost, President


                              ____________________________________________
                              Richard B. Frost


                              ____________________________________________
                              Phillip Frost, M.D.


                              ____________________________________________
                              Marshal E. Rosenberg


                              ____________________________________________
                              Richard C. Pfenniger, Jr.



                              ____________________________________________
                              Spencer Angel


                              ____________________________________________
                              Dianna Grout


                              AMERICAN STOCK TRANSFER & TRUST
                              COMPANY, as Escrow Agent


                              By:_________________________________________
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                                                                       EXHIBIT A





        NAME                    NUMBER OF SHARES OF          WARRANTS
                                   COMMON STOCK


Richard B. Frost                            135,054            54,900

Phillip Frost, M.D.                         135,054                --

Marshal E. Rosenberg                         45,018                --

Richard C. Pfenniger, Jr.                    22,509             8,900

Spencer J. Angel                             22,509             8,900

Dianna Grout                                 18,007             7,300