<PAGE>

Exhibit 10.16

                                     WARRANT

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
         SECURITIES LAWS, AND ACCORDINGLY, SUCH SECURITIES MAY NOT BE
         TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH
         THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND
         STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.

         THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
         SUBJECT TO THE CONDITIONS SPECIFIED IN THAT CERTAIN PURCHASE AGREEMENT
         DATED AS OF MAY 29, 2002, BETWEEN SVI SOLUTIONS, INC., A DELAWARE
         CORPORATION, AND TOYS "R" US, INC., A DELAWARE CORPORATION, AS SUCH
         PURCHASE AGREEMENT MAY BE MODIFIED AND SUPPLEMENTED AND IN EFFECT FROM
         TIME TO TIME, AND NO TRANSFER OF THE SECURITIES REPRESENTED BY THIS
         CERTIFICATE SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN
         FULFILLED. A COPY OF THE FORM OF SUCH PURCHASE AGREEMENT IS ON FILE AND
         MAY BE INSPECTED AT THE PRINCIPAL EXECUTIVE OFFICE OF THE AFORESAID
         CORPORATION. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS
         CERTIFICATE, AGREES TO BE BOUND BY THE PROVISIONS OF SUCH PURCHASE
         AGREEMENT.


No. of shares of common stock: 2,500,000                         Warrant No. A-1

                                     WARRANT
                      to Purchase Shares of Common Stock of
                               SVI SOLUTIONS, INC.


                  THIS IS TO CERTIFY THAT, FOR VALUE RECEIVED, Toys "R" Us,
Inc., or its registered assigns, is entitled, subject to the terms below, to
purchase from SVI SOLUTIONS, INC., a Delaware corporation (the "COMPANY"), in
whole or in part, from time to time on or after the Commencement Date, but not
later than 5:00 p.m., New York City time, on the Expiration Date (the "EXERCISE
PERIOD"), 2,500,000 shares of the Company's common stock, par value $.0001 per
share, (the "COMMON STOCK"), at a purchase price of $0.553 per share (the
"EXERCISE PRICE"), as adjusted from time to time pursuant to Sections 7 and 9.1
of the Agreement, upon surrender of this Warrant to the Company at its office
referred to in Section 14.8 of the Agreement, following delivery of written
notice in the form of Notice of Exercise (or a reasonable facsimile thereof)
attached hereto seventy-five (75) days prior to the date of exercise duly
completed and signed. The Common Stock will be delivered to Purchaser (x) upon
payment in full to the Company of the Exercise Price (i) in cash or (ii) by


                                      A-1
<PAGE>

certified or official bank check or (iii) by cancellation by the Holder of
indebtedness or other obligations of the Company to the Holder in an aggregate
amount equal to the Exercise Price multiplied by the number of shares of Warrant
Stock exercised by the Warrant, or any combination of the foregoing, all as
provided in Section 6.1 and 6.2 of the Agreement or (y) as provided in the
fourth paragraph following this paragraph; PROVIDED, HOWEVER, that subject to
the next paragraph, the Purchaser may only exercise this Warrant for the number
of shares of Common Stock specified below:

IF DATE OF EXERCISE IS ON OR BEFORE:                    SHARES OF COMMON STOCK
------------------------------------                    ----------------------
May 29, 2002                                            400,000
June 26, 2002                                           500,000
July 29, 2002                                           600,000
August 28, 2002                                         700,000
September 27, 2002                                      800,000
October 31, 2002                                        900,000
November 30, 2002                                       1,000,000
December 31, 2002                                       1,100,000
January 31, 2003                                        1,200,000
February 28, 2003                                       1,300,000
March 31, 2003                                          1,400,000
April 30, 2003                                          1,500,000
May 31, 2003                                            1,600,000
June 30, 2003                                           1,700,000
July 31, 2003                                           1,800,000
August 30, 2003                                         1,900,000
September 30, 2003                                      2,000,000
October 31, 2003                                        2,100,000
November 30, 2003                                       2,200,000
December 31, 2003                                       2,300,000
January 31, 2004                                        2,400,000
February 28, 2004                                       2,500,000

                  If, anytime prior to February 28, 2004, the Purchaser
terminates the Development Agreement pursuant to and in accordance with Section
1.4(a) or Section 1.4(b) thereof, the Purchaser shall only be entitled to
exercise this Warrant for that number of shares of Common Stock for which this
Warrant is exercisable upon the effective date of such termination based on the
table above. If, anytime prior to February 28, 2004, the Company terminates the
Development Agreement pursuant to and in accordance with Section 1.3 thereof,
the Purchaser may not exercise this Warrant in whole or in part. If, anytime
prior to February 28, 2004, the Purchaser terminates the Development Agreement
pursuant to and in accordance with Section 1.3 thereof, the Purchaser shall be
entitled to exercise this Warrant for 2,500,000 shares of Common Stock.

                  This Warrant shall be deemed to have been exercised on the
close of business on the seventy-fifth day following its surrender for exercise
as provided above, and the person entitled to receive the shares of Warrant
Stock shall be treated for all purposes as the Holder of record of such shares
as of the close of business on such date. On the seventy-fifty day following the
Company's receipt of the form of the Notice of Exercise attached hereto, the
Company shall issue and deliver to such Holder a stock certificate or
certificates representing the Warrant Stock issuable by virtue of the exercise
of any Warrant.

                                      A-2
<PAGE>

                  In the event that this Warrant is exercised only in part, the
Company shall, at the time of delivery of the Warrant Stock, execute and deliver
to such Holder a new Warrant evidencing the rights of such Holder to purchase
the unpurchased Warrant Stock called for by such Warrant, which new Warrant
shall in all other respects be identical with the surrendered Warrant.

                  Notwithstanding anything to the contrary in the introductory
paragraphs above or in Section 6.2 of the Agreement, if the Exercise Price is
less than the Current Market Price of one share of Common Stock the Holder may
elect to exercise the Warrant by cashless exercise, in lieu of exercising the
Warrant for cash, and receive shares equal to the value (as determined below) of
this Warrant (or the portion thereof being surrendered) by surrender of the
Warrant at the principal office of the company together with a properly executed
and delivered form of Notice of Exercise attached hereto in which event the
Company shall issue to the Holder a number of shares of Warrant Stock computed
using the following formula:

                          Y (A-B)
                  X =  ----------
                            A

                  Where:

                  X = number of shares of Warrant Stock to be issued to the
                      Purchaser
                  Y = number of shares of Warrant Stock purchasable under
                      the Warrant or, if only a portion of the Warrant is
                      being exercised, the portion of the Warrant being
                      exercised
                  A = Current Market Value
                  B = Exercise Price

                  The Company shall not be required to issue a fractional share
of Warrant Stock upon exercise of this Warrant. As to any fraction of a share
which the Holder hereof would otherwise be entitled to purchase upon such
exercise, the Company at its option may in lieu of the issuance of a fractional
share either (i) pay a cash adjustment in respect of such final fraction in an
amount equal to the same fraction of the Current Market Price per share of
Common Stock on the date of exercise or (ii) issue a number of shares rounded up
or down to the nearest whole share.

                  This Warrant was issued pursuant to the Purchase Agreement,
dated as of May 29, 2002, (the "AGREEMENT"), between the Company and Purchaser.
Every Holder of this Warrant consents to all of the terms contained in the
Agreement by acceptance hereof. Each term used herein without definition shall
have the meaning assigned thereto in the Agreement.

                  The Exercise Price is subject to adjustment in certain events
as provided in Section 7 of the Agreement. The Exercise Price is also subject to
adjustment in the event of a Breach Occurrence as provided in Section 9.1 of the
Agreement.

                                      A-3
<PAGE>

                  The Warrant and the Warrant Stock shall be transferable only
upon compliance with the conditions specified in Section 11 of the Agreement,
which conditions are intended, among other things, to ensure compliance with the
provisions of the Securities Act in respect of the transfer of any Warrant or
any Warrant Stock, and any Holder hereof shall be bound by the provisions of
(and entitled to the benefits of) said Section 11 of the Agreement. Upon
surrender of such Warrant at the office of the Company maintained for such
purpose pursuant to Section 14.7 of the Agreement, together with a Form of
Assignment annexed hereto, duly executed by the relevant Holder and payment of
funds sufficient to pay any transfer taxes payable upon the making of such
transfer, the Company shall, subject to Section 11 of the Agreement and the
second following sentence, (a) execute and deliver a new Warrant in the name of
the assignee or assignees and in the denominations specified in such instrument
of assignment, (b) issue to the assignor a new Warrant evidencing the portion of
such surrendered Warrant not so assigned or transferred and (c) promptly cancel
such surrendered Warrant. A Warrant, if properly assigned in compliance with
Section 11 of the Agreement, may be exercised or surrendered by an assignee for
the purchase of shares of Warrant Stock without having a new Warrant issued.
Notwithstanding any provision herein to the contrary, the Company shall not be
required to register the transfer of a Warrant, or the Warrant Stock issued
pursuant thereto, in the name of any Person who acquired such Warrant (or part
thereof), or Warrant Stock issued pursuant thereto otherwise than in accordance
with the Agreement.

                  All shares of Warrant Stock issuable upon exercise of this
Warrant shall be deemed to be Registrable Securities entitled to registration
rights pursuant to Section 10 of the Agreement, and are entitled, subject to the
terms and conditions of the Agreement, to all registration rights granted to
Holders of Registrable Securities thereunder.

                  Nothing contained in the Agreement or in this Warrant shall be
construed by itself to entitle the Holder to any voting rights or other rights
as a stockholder of the Company. In the absence of affirmative action by the
Holder to purchase Warrant Stock by exercise of this Warrant, no provisions of
this Warrant, and no mere enumeration herein of the rights or privileges of the
Holder, shall (a) cause the Holder to be a stockholder of the Company for any
purpose or (b) give rise to any liability of such Holder for the Exercise Price
or as a stockholder of the Company, whether such liability is asserted by the
Company, by any creditor of the Company or any other Person.

                  The Company shall, during the Exercise Period of this Warrant,
reserve from its authorized and unissued Warrant Stock a sufficient number of
shares to provide for the issuance of Common Stock upon exercise of this
Warrant. If at any time the number of authorized but unissued shares of the
Common Stock shall not be sufficient to effect the exercise of this Warrant, the
Company shall take all such corporate action as may be necessary to increase its
authorized but unissued shares of Common Stock as shall be sufficient for such
purpose. All shares of Warrant Stock that may be issued by the Company upon
exercise of this Warrant will be free of all taxes, Liens and charges in respect
of the issue thereof. The Company shall, in connection with this Warrant and its
exercise, obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof. The Company agrees that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
Warrant Stock upon exercise of this Warrant.

                                      A-4
<PAGE>

                  The Company shall not, by amendment of its certificate of
incorporation or bylaws, or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but shall at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant against
impairment. Without limiting the generality of the foregoing, the Company (a)
shall not increase the par value of any shares of stock issuable upon the
exercise of this Warrant above the amount payable therefor upon such exercise,
and (b) shall take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and non-assessable
shares of Warrant Stock upon exercise of this Warrant.

                  Whenever the Exercise Price shall be adjusted in accordance
with Section 7 of the Agreement, the Company shall give notice to each Holder,
in accordance with Section 7.7 of the Agreement. Whenever the Company shall
engage in any of the corporate actions specified in Section 7.8 of the
Agreement, the Company shall give notice to each Holder, in accordance with
Section 7.8 of the Agreement.

                  This Warrant shall be deemed a contract made under the laws of
the State of California and for all purposes shall be construed in accordance
with the laws of the State of California (exclusive of such state's choice of
conflict rules).

                  Each party hereto hereby irrevocably and unconditionally
submits to the jurisdiction of the state and federal courts located in the
County of San Diego, State of California for any actions, suits, or proceedings
arising out of or relating to this agreement and the transactions contemplated
hereby. Each party hereto agrees not to commence any action, suit or proceeding
relating thereto except in such courts. Each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this agreement or the transactions
contemplated hereby, in such state or federal courts as aforesaid and hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.

                  The parties hereby waive trial by jury in any judicial
proceeding to which they are parties involving, directly or indirectly, any
matter in any way arising out of, related to or connected with this Warrant.

                  In case any provision of this Warrant shall be invalid,
illegal or unenforceable, it shall to the extent practicable, be modified so as
to make it valid, legal and enforceable and to retain as nearly as practicable
the intent of the parties, and the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

                                      A-5
<PAGE>

                  No delay or omission to exercise any right, power or remedy
accruing to the Company or the Purchaser or any subsequent Holder of any Warrant
upon any breach, default or noncompliance of the Company, the Purchaser or any
subsequent Holder of any Warrant under this Agreement, shall impair any such
right, power or remedy, nor shall it be construed to be a waiver of any such
breach, default or noncompliance, or any acquiescence therein, or of any similar
breach, default or noncompliance thereafter occurring. It is further agreed that
any waiver, Permit, consent or approval of any kind or character on the part of
the Company or the Purchaser of any breach, default or noncompliance under this
Warrant or any waiver on the Company's or the Purchaser's part of any provisions
or conditions of this Warrant must be in writing and shall be effective only to
the extent specifically set forth in such writing and that all remedies, either
under this Warrant, by law, or otherwise afforded to the Company and the
Purchaser, shall be cumulative and not alternative.

                  Except as otherwise expressly provided herein, any term of
this Warrant may be amended and the observance of any term of this Warrant may
be waived (either generally or in a particular instance, either retroactively or
prospectively and either for a specified period of time or indefinitely) with
the written consent of the Company and the Holder hereof. Any amendment or
waiver effected in accordance with this provision shall be binding upon such
Holder.

                  Except as otherwise provided herein this Warrant shall
terminate on the earlier of (i) the seventh (7th) anniversary of the date hereof
or (ii) the third (3rd) anniversary of the Completion Date.

                                      A-6
<PAGE>


                  IN WITNESS WHEREOF, the Company has duly executed this
Warrant.



Dated:  May 29, 2002



                                                     SVI SOLUTIONS, INC.



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

                                      A-7
<PAGE>

                               NOTICE OF EXERCISE



         The undersigned, the Holder of the Warrant, hereby (x) elects to
purchase ______ shares of Common Stock of SVI Solutions, Inc. (the "Company")
covered by the attached Warrant according to the conditions herein and herewith
makes payment of the Exercise Price of such shares in full, or (y) elects to
exercise this Warrant for the purchase of ______ shares of Common Stock,
pursuant to the provisions herein.

         GENERAL REPRESENTATION AND WARRANTIES. In connection with the foregoing
exercise, the Holder hereby makes the following representations and warranties
to the Company:

         1.       The Holder is a [Delaware] [corporation] with its principal
                  executive offices at the location indicated below the Holder's
                  signature at the foot hereof.

         2.       The Holder confirms that all documents, records and books
                  pertaining to the investment in the Company and requested by
                  it have been made available or delivered to it.

         3.       The shares purchased herein are being acquired solely for the
                  Holder's own account, for investment purposes only and are not
                  being purchased with a view to or for the resale,
                  distribution, subdivision or fractionalization thereof. The
                  Holder has no current plans to enter into any such contract,
                  undertaking, agreement or arrangement.

         4.       The Holder acknowledges the shares have not been registered
                  under the Securities Act of 1933 or other Applicable Laws and
                  may not be sold or otherwise disposed of except in compliance
                  with applicable laws or, if the Company deems necessary,
                  receipt by the Company of an opinion of counsel reasonably
                  satisfactory to the Company that an exemption therefrom is
                  available.

                                      A-8
<PAGE>


         Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:


------------------------------------------------------------------------------

Dated: -----------------                       -------------------------------
                                                           (signature)

                                               -------------------------------
                                                    (print name and title)

                                               -------------------------------

                                               -------------------------------

                                                            (address)


         Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:


------------------------------------------------------------------------------

Dated: -----------------                       -------------------------------
                                                           (signature)

                                               -------------------------------
                                                    (print name and title)

                                               -------------------------------

                                               -------------------------------

                                                            (address)

                                      A-9
<PAGE>

                               FORM OF ASSIGNMENT
                               ------------------

                  FOR VALUE RECEIVED, the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the assignee named below all
the rights of the undersigned under and within this Warrant with respect to the
number of shares of Warrant Stock set forth below:


                                                               Number of Shares
Name of Assignee                    Address                    of Warrant Stock
----------------                    -------                    ----------------




Dated:__________________


                                                ------------------------------
                                                Signature of Registered Holder

                                                ------------------------------
                                                Name of Registered Holder
                                                (Please Print)




The assignee acknowledges receipt of the Purchase Agreement dated as of May 29,
2002 between SVI Solutions, Inc. and Toys "R" Us, Inc. and hereby agrees to be
bound by the provisions thereof and of this Warrant as a Holder thereunder. The
assignee further represents that this Warrant and the Warrant Stock are being
acquired solely for its own account, for investment purposes only and are not
being purchased with a view to or for the resale, distribution, subdivision or
fractionalization thereof. The assignee further represents that it has no
present plans to enter into any such contract, undertaking, agreement or
arrangement.


Dated:__________________


                                                 ------------------------------
                                                 Signature of Assignee

                                                 ------------------------------
                                                 Name of Assignee
                                                 (Please Print)

                                      A-10