<PAGE>

                                                                     EXHIBIT 4.2


     THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS
     WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
     AMENDED. EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES
     PURCHASE AGREEMENT DATED AS OF AUGUST 15, 2001, NEITHER THIS WARRANT
     NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE
     ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES
     UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE,
     CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT
     REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO
     RULE 144 UNDER SUCH ACT.

                                                   Right to Purchase 771,605
                                                   Shares of Common Stock,
                                                   par value $.001 per share


                             STOCK PURCHASE WARRANT

     THIS CERTIFIES THAT, for value received, RGC International Investors, LDC
("RGC") or its registered assigns, is entitled to purchase from Storage Computer
Corporation, a Delaware corporation (the "Company"), at any time or from time to
time during the period specified in Paragraph 2 hereof, Seven Hundred Seventy-
One Thousand Six Hundred Five (771,605) fully paid and nonassessable shares of
the Company's Common Stock, par value $.001 per share (the "Common Stock"), at
an exercise price of $10.80 per share (the "Exercise Price"); The term "Warrant
Shares," as used herein, refers to the shares of Common Stock purchasable
hereunder. The Warrant Shares and the Exercise Price are subject to adjustment
as provided in Paragraph 4 hereof. The term Warrants means this Warrant and the
other warrants issued pursuant to that certain Securities Purchase Agreement,
dated August 15, 2001, by and among the Company and the Buyers listed on the
execution page thereof (the "Securities Purchase Agreement").

     This Warrant is subject to the following terms, provisions, and conditions:

     1.   Manner of Exercise; Issuance of Certificates; Payment for Shares.
          ----------------------------------------------------------------
Subject to the provisions hereof, this Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof), and upon (i)
payment to the Company in cash, by certified or official bank check or by wire
transfer for the account of the Company of the Exercise Price for the Warrant
Shares specified in the Exercise Agreement or (ii) if the resale of the Warrant
Shares by the holder is not then registered pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), delivery to the Company of a written notice of an election to
effect a "Cashless Exercise" (as defined in Section 11(c) below) for the Warrant
Shares specified in the Exercise Agreement. The Warrant Shares so purchased
shall be deemed to be issued to the holder hereof or such holder's designee, as
the record owner of such shares, as of the close of business on the date on
which this Warrant shall have been surrendered, the completed Exercise Agreement
shall have been delivered, and payment shall have been made for such shares (or
an election to effect a Cashless Exercise has been made) as set forth above.
Certificates for the Warrant
<PAGE>

Shares so purchased, representing the aggregate number of shares specified in
the Exercise Agreement, shall be delivered to the holder hereof within a
reasonable time, not exceeding two (2) business days, after this Warrant shall
have been so exercised. The certificates so delivered shall be in such
denominations as may be requested by the holder hereof and shall be registered
in the name of such holder or such other name as shall be designated by such
holder. If this Warrant shall have been exercised only in part, then, unless
this Warrant has expired, the Company shall, at its expense, at the time of
delivery of such certificates, deliver to the holder a new Warrant representing
the number of shares with respect to which this Warrant shall not then have been
exercised.

          Notwithstanding anything in this Warrant to the contrary, in no event
shall the Holder of this Warrant be entitled to exercise a number of Warrants
(or portions thereof) in excess of the number of Warrants (or portions thereof)
upon exercise of which the sum of (i) the number of shares of Common Stock
beneficially owned by the Holder and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the
unexercised Warrants and the unexercised or unconverted portion of any other
securities of the Company (including the Series C Warrants and shares of Series
C Preferred Stock (each as defined in the Securities Purchase Agreement, dated
October 31, 2000, by and among the Company and the purchasers set forth therein
(the "October 2000 Purchase Agreement")) and shares of the Series E Preferred
Stock (as defined in the Securities Purchase Agreement) subject to a limitation
on conversion or exercise analogous to the limitation contained herein) and (ii)
the number of shares of Common Stock issuable upon exercise of the Warrants (or
portions thereof) with respect to which the determination described herein is
being made, would result in beneficial ownership by the Holder and its
affiliates of more than 4.9% of the outstanding shares of Common Stock. For
purposes of the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended, and Regulations 13D-G thereunder, except as otherwise provided
in clause (i) hereof. Notwithstanding anything in this Warrant to the contrary,
the restrictions on exercise of this Warrant set forth in this paragraph shall
not be amended without (i) the written consent of the Holder and the Company and
(ii) the approval of the holders of a majority of the Common Stock present, or
represented by proxy, and voting at any meeting called to vote on the amendment
of such restriction.

     2.   Period of Exercise. This Warrant is exercisable at any time or from
          ------------------
time to time on or after the date on which this Warrant is issued and delivered
pursuant to the terms of the Securities Purchase Agreement (the "Issue Date")
and before 5:00 p.m., New York City time on the fourth (4th) anniversary of the
Issue Date (the "Exercise Period").

     3.   Certain Agreements of the Company. The Company hereby covenants and
          ---------------------------------
agrees as follows:

          (a)    Shares to be Fully Paid. All Warrant Shares will, upon issuance
                 -----------------------
in accordance with the terms of this Warrant, be validly issued, fully paid, and
nonassessable and free from all taxes, liens, and charges with respect to the
issue thereof.

                                       2
<PAGE>

          (b)     Reservation of Shares. During the Exercise Period, the Company
                  ---------------------
shall at all times have authorized, and reserved for the purpose of issuance
upon exercise of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.

          (c)     Listing. The Company shall promptly secure the listing of the
                  -------
shares of Common Stock issuable upon exercise of the Warrant upon each national
securities exchange or automated quotation system, if any, upon which shares of
Common Stock are then listed (subject to official notice of issuance upon
exercise of this Warrant) and shall maintain, so long as any other shares of
Common Stock shall be so listed, such listing of all shares of Common Stock from
time to time issuable upon the exercise of this Warrant; and the Company shall
so list on each national securities exchange or automated quotation system, as
the case may be, and shall maintain such listing of, any other shares of capital
stock of the Company issuable upon the exercise of this Warrant if and so long
as any shares of the same class shall be listed on such national securities
exchange or automated quotation system.

          (d)    Certain Actions Prohibited. The Company will not, by amendment
                 --------------------------
of its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

          (e)    Successors and Assigns. This Warrant will be binding upon any
                 ----------------------
entity succeeding to the Company by merger, consolidation, or acquisition of all
or substantially all the Company's assets.

     4.   Antidilution Provisions. During the Exercise Period, the Exercise
          -----------------------
Price and the number of Warrant Shares shall be subject to adjustment from time
to time as provided in this Paragraph 4.

     In the event that any adjustment of the Exercise Price as required herein
results in a fraction of a cent, such Exercise Price shall be rounded up to the
nearest cent.

          (a)    Adjustment of Exercise Price and Number of Shares upon Issuance
                 ---------------------------------------------------------------
of Common Stock. Except as otherwise provided in Paragraphs 4(c) and 4(e)
---------------
hereof, if and whenever on or after the Issue Date of this Warrant, the Company
issues or sells, or in accordance with Paragraph 4(b) hereof is deemed to have
issued or sold, any shares of Common Stock for no consideration or for a
consideration per share (before deduction of reasonable expenses or commissions
or underwriting discounts or allowances in connection therewith) less than the
greater

                                       3
<PAGE>

of (1) the Market Price (as hereinafter defined) and (2) then effective Exercise
Price on the date of issuance (or deemed issuance) of such Common Stock (a
"Dilutive Issuance"), then immediately upon the Dilutive Issuance, the Exercise
Price will be reduced to a price determined by multiplying the Exercise Price in
effect immediately prior to the Dilutive Issuance by a fraction, (i) the
numerator of which is an amount equal to the sum of (x) the number of shares of
Common Stock actually outstanding immediately prior to the Dilutive Issuance,
plus (y) the quotient of the aggregate consideration, calculated as set forth in
Paragraph 4(b) hereof, received by the Company upon such Dilutive Issuance
divided by the greater of (1) the Market Price and (2) the Exercise Price in
effect immediately prior to the Dilutive Issuance, and (ii) the denominator of
which is the total number of shares of Common Stock Deemed Outstanding (as
defined below) immediately after the Dilutive Issuance.

          (b)    Effect on Exercise Price of Certain Events. For purposes of
                 ------------------------------------------
determining the adjusted Exercise Price under Paragraph 4(a) hereof, the
following will be applicable:

                 (i)    Issuance of Rights or Options. If the Company in any
                        -----------------------------
     manner issues or grants any warrants, rights or options, whether or not
     immediately exercisable, to subscribe for or to purchase Common Stock or
     other securities convertible into or exchangeable for Common Stock
     ("Convertible Securities") (such warrants, rights and options to purchase
     Common Stock or Convertible Securities are hereinafter referred to as
     "Options") and the price per share for which Common Stock is issuable upon
     the exercise of such Options is less than the greater of (1) the Market
     Price and (2) the Exercise Price on the date of issuance or grant of such
     Options, then the maximum total number of shares of Common Stock issuable
     upon the exercise of all such Options will, as of the date of the issuance
     or grant of such Options, be deemed to be outstanding and to have been
     issued and sold by the Company for such price per share. For purposes of
     the preceding sentence, the "price per share for which Common Stock is
     issuable upon the exercise of such Options" is determined by dividing (i)
     the total amount, if any, received or receivable by the Company as
     consideration for the issuance or granting of all such Options, plus the
     minimum aggregate amount of additional consideration, if any, payable to
     the Company upon the exercise of all such Options, plus, in the case of
     Convertible Securities issuable upon the exercise of such Options, the
     minimum aggregate amount of additional consideration payable upon the
     conversion or exchange thereof at the time such Convertible Securities
     first become convertible or exchangeable, by (ii) the maximum total number
     of shares of Common Stock issuable upon the exercise of all such Options
     (assuming full conversion of Convertible Securities, if applicable). No
     further adjustment to the Exercise Price will be made upon the actual
     issuance of such Common Stock upon the exercise of such Options or upon the
     conversion or exchange of Convertible Securities issuable upon exercise of
     such Options.

                 (ii)   Issuance of Convertible Securities. If the Company in
                        ----------------------------------
     any manner issues or sells any Convertible Securities, whether or not
     immediately convertible (other than where the same are issuable upon the
     exercise of Options) and the price per share for which Common Stock is
     issuable upon such conversion or exchange is less than the greater of (1)
     the Market Price and (2) the Exercise Price on the date of issuance of such
     Convertible Securities, then the maximum total number of shares of Common
     Stock issuable upon the

                                       4
<PAGE>

     conversion or exchange of all such Convertible Securities will, as of the
     date of the issuance of such Convertible Securities, be deemed to be
     outstanding and to have been issued and sold by the Company for such price
     per share. For the purposes of the preceding sentence, the "price per share
     for which Common Stock is issuable upon such conversion or exchange" is
     determined by dividing (i) the total amount, if any, received or receivable
     by the Company as consideration for the issuance or sale of all such
     Convertible Securities, plus the minimum aggregate amount of additional
     consideration, if any, payable to the Company upon the conversion or
     exchange thereof at the time such Convertible Securities first become
     convertible or exchangeable, by (ii) the maximum total number of shares of
     Common Stock issuable upon the conversion or exchange of all such
     Convertible Securities. No further adjustment to the Exercise Price will be
     made upon the actual issuance of such Common Stock upon conversion or
     exchange of such Convertible Securities.

               (iii)   Change in Option Price or Conversion Rate. If there is a
                       -----------------------------------------
     change at any time in (i) the amount of additional consideration payable to
     the Company upon the exercise of any Options; (ii) the amount of additional
     consideration, if any, payable to the Company upon the conversion or
     exchange of any Convertible Securities; or (iii) the rate at which any
     Convertible Securities are convertible into or exchangeable for Common
     Stock (other than under or by reason of provisions designed to protect
     against dilution), the Exercise Price in effect at the time of such change
     will be readjusted to the Exercise Price which would have been in effect at
     such time had such Options or Convertible Securities still outstanding
     provided for such changed additional consideration or changed conversion
     rate, as the case may be, at the time initially granted, issued or sold.

               (iv)    Treatment of Expired Options and Unexercised Convertible
                       --------------------------------------------------------
     Securities. If, in any case, the total number of shares of Common Stock
     ----------
     issuable upon exercise of any Option or upon conversion or exchange of any
     Convertible Securities is not, in fact, issued and the rights to exercise
     such Option or to convert or exchange such Convertible Securities shall
     have expired or terminated, the Exercise Price then in effect will be
     readjusted to the Exercise Price which would have been in effect at the
     time of such expiration or termination had such Option or Convertible
     Securities, to the extent outstanding immediately prior to such expiration
     or termination (other than in respect of the actual number of shares of
     Common Stock issued upon exercise or conversion thereof), never been
     issued.

               (v)     Calculation of Consideration Received. If any Common
                       -------------------------------------
     Stock, Options or Convertible Securities are issued, granted or sold for
     cash, the consideration received therefor for purposes of this Warrant will
     be the amount received by the Company therefor, before deduction of
     reasonable commissions, underwriting discounts or allowances or other
     reasonable expenses paid or incurred by the Company in connection with such
     issuance, grant or sale. In case any Common Stock, Options or Convertible
     Securities are issued or sold for a consideration part or all of which
     shall be other than cash, the amount of the consideration other than cash
     received by the Company will be the fair value of such consideration,
     except where such consideration consists of securities, in which case the
     amount of consideration received by the Company will be the Market Price
     thereof as of the

                                       5
<PAGE>

     date of receipt. In case any Common Stock, Options or Convertible
     Securities are issued in connection with any acquisition, merger or
     consolidation in which the Company is the surviving corporation, the amount
     of consideration therefor will be deemed to be the fair value of such
     portion of the net assets and business of the non-surviving corporation as
     is attributable to such Common Stock, Options or Convertible Securities, as
     the case may be. The fair value of any consideration other than cash or
     securities will be determined in good faith by the Board of Directors of
     the Company.

                 (vi)    Exceptions to Adjustment of Exercise Price. No
                         ------------------------------------------
     adjustment to the Exercise Price will be made (i) upon the exercise of any
     warrants, options or convertible securities granted, issued and outstanding
     on the date of issuance of this Warrant; (ii) upon the grant or exercise of
     any stock or options which may hereafter be granted or exercised under any
     employee benefit plan of the Company now existing or to be implemented in
     the future, so long as the issuance of such stock or options is approved by
     a majority of the independent members of the Board of Directors of the
     Company or a majority of the members of a committee of independent
     directors established for such purpose; (iii) upon the exercise of the
     Warrants and the Series C Warrants (as defined in the October 2000 Purchase
     Agreement); (iv) the issuance or conversion of the Company's Series C
     Preferred Stock (as defined in the October 2000 Purchase Agreement), and
     the Series E Preferred Stock; (v) the issuance of any dividend in the form
     of Common Stock to the holders of the Company's Series A and Series B
     Preferred Stock pursuant to the Company's obligations under its Certificate
     of Designation of Series A 8% Convertible Preferred Stock and the
     Certificate of Designation of Series B 8% Convertible Preferred Stock.

          (c)    Subdivision or Combination of Common Stock. If the Company at
                 ------------------------------------------
any time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder
into a smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to such
combination will be proportionately increased.

          (d)    Adjustment in Number of Shares. Upon each adjustment of the
                 ------------------------------
Exercise Price pursuant to the provisions of this Paragraph 4, the number of
shares of Common Stock issuable upon exercise of this Warrant shall be adjusted
by multiplying a number equal to the Exercise Price in effect immediately prior
to such adjustment by the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.

          (e)    Consolidation, Merger or Sale. In case of any consolidation of
                 -----------------------------
the Company with, or merger of the Company into any other corporation, or in
case of any sale or conveyance of all or substantially all of the assets of the
Company other than in connection with a plan of complete liquidation of the
Company, then as a condition of such consolidation, merger or sale or
conveyance,

                                       6
<PAGE>

adequate provision will be made whereby the holder of this Warrant will have the
right to acquire and receive upon exercise of this Warrant in lieu of the shares
of Common Stock immediately theretofore acquirable upon the exercise of this
Warrant, such shares of stock, securities or assets as may be issued or payable
with respect to or in exchange for the number of shares of Common Stock
immediately theretofore acquirable and receivable upon exercise of this Warrant
had such consolidation, merger or sale or conveyance not taken place. In any
such case, the Company will make appropriate provision to insure that the
provisions of this Paragraph 4 hereof will thereafter be applicable as nearly as
may be in relation to any shares of stock or securities thereafter deliverable
upon the exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or conveyance unless prior to the consummation
thereof, the successor or acquiring entity (if other than the Company) and, if
an entity different from the successor or acquiring entity, the entity whose
capital stock or assets the holders of the Common Stock of the Company are
entitled to receive as a result of such consolidation, merger or sale or
conveyance assumes by written instrument the obligations under this Paragraph 4
and the obligations to deliver to the holder of this Warrant such shares of
stock, securities or assets as, in accordance with the foregoing provisions, the
holder may be entitled to acquire.

          (f)    Distribution of Assets. In case the Company shall declare or
                 ----------------------
make any distribution of its assets (including cash) to holders of Common Stock
as a partial liquidating dividend, by way of return of capital or otherwise,
then, after the date of record for determining stockholders entitled to such
distribution, but prior to the date of distribution, the holder of this Warrant
shall be entitled upon exercise of this Warrant for the purchase of any or all
of the shares of Common Stock subject hereto, to receive the amount of such
assets which would have been payable to the holder had such holder been the
holder of such shares of Common Stock on the record date for the determination
of stockholders entitled to such distribution.

          (g)    Notice of Adjustment. Upon the occurrence of any event which
                 --------------------
requires any adjustment of the Exercise Price, then, and in each such case, the
Company shall give notice thereof to the holder of this Warrant, which notice
shall state the Exercise Price resulting from such adjustment and the increase
or decrease in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. Such calculation shall be certified
by the chief financial officer of the Company.

          (h)    Minimum Adjustment of Exercise Price. No adjustment of the
                 ------------------------------------
Exercise Price shall be made in an amount of less than 1% of the Exercise Price
in effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.

          (i)    No Fractional Shares. No fractional shares of Common Stock are
                 --------------------
to be issued upon the exercise of this Warrant. If the exercise of this Warrant
would result in a fractional share of Common Stock, such fractional share shall
be disregarded and the number of shares of Common Stock issuable upon exercise
of the Warrant shall be the next higher number of shares.

                                       7
<PAGE>

          (j) Other Notices. In case at any time:
              -------------

               (i)    the Company shall declare any dividend upon the Common
     Stock payable in shares of stock of any class or make any other
     distribution (including dividends or distributions payable in cash out of
     retained earnings) to the holders of the Common Stock;

               (ii)   the Company shall offer for subscription pro rata to the
     holders of the Common Stock any additional shares of stock of any class or
     other rights;

               (iii)  there shall be any capital reorganization of the Company,
     or reclassification of the Common Stock, or consolidation or merger of the
     Company with or into, or sale of all or substantially all its assets to,
     another corporation or entity; or

               (iv)   there shall be a voluntary or involuntary dissolution,
     liquidation or winding-up of the Company;

then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least 30 days
prior to the record date or the date on which the Company's books are closed in
respect thereto. Failure to give any such notice or any defect therein shall not
affect the validity of the proceedings referred to in clauses (i), (ii), (iii)
and (iv) above.

          (k) Certain Events. If any event occurs of the type contemplated by
              --------------
the adjustment provisions of this Paragraph 4 but not expressly provided for by
such provisions, the Company will give notice of such event as provided in
Paragraph 4(g) hereof, and the Company's Board of Directors will make an
appropriate adjustment in the Exercise Price and the number of shares of Common
Stock acquirable upon exercise of this Warrant so that the rights of the Holder
shall be neither enhanced nor diminished by such event.

          (l) Certain Definitions.
              -------------------

               (i) "Common Stock Deemed Outstanding" shall mean the number of
                    -------------------------------
     shares of Common Stock actually outstanding (not including shares of Common
     Stock held in the treasury of the Company), plus (x) pursuant to Paragraph
     4(b)(i) hereof, the maximum total number of shares of Common Stock issuable
     upon the exercise of Options, as of the date of such issuance or grant of
     such Options, if any, and (y) pursuant to Paragraph 4(b)(ii)

                                       8
<PAGE>

     hereof, the maximum total number of shares of Common Stock issuable upon
     conversion or exchange of Convertible Securities, as of the date of
     issuance of such Convertible Securities, if any.

               (ii)   "Market Price," as of any date, (i) means the average of
                       ------------
     the last reported sale prices for the shares of Common Stock on the
     American Stock Exchange (the "AMEX") for the five (5) trading days
     immediately preceding such date as reported by Bloomberg Financial Markets
     or an equivalent reliable reporting service mutually acceptable to and
     hereafter designated by the holder of this Warrant and the Company
     ("Bloomberg"), or (ii) if the AMEX is not the principal trading market for
     the shares of Common Stock, the average of the last reported sale prices on
     the principal trading market for the Common Stock during the same period as
     reported by Bloomberg, or (iii) if market value cannot be calculated as of
     such date on any of the foregoing bases, the Market Price shall be the fair
     market value as reasonably determined in good faith by (a) the Board of
     Directors of the Company or, at the option of a majority-in-interest of the
     holders of the outstanding Warrants by (b) an independent investment bank
     of nationally recognized standing in the valuation of businesses similar to
     the business of the Company. The manner of determining the Market Price of
     the Common Stock set forth in the foregoing definition shall apply with
     respect to any other security in respect of which a determination as to
     market value must be made hereunder.

               (iii)  "Common Stock," for purposes of this Paragraph 4, includes
                       ------------
     the Common Stock, par value $.001 per share, and any additional class of
     stock of the Company having no preference as to dividends or distributions
     on liquidation, provided that the shares purchasable pursuant to this
     Warrant shall include only shares of Common Stock, par value $.001 per
     share, in respect of which this Warrant is exercisable, or shares resulting
     from any subdivision or combination of such Common Stock, or in the case of
     any reorganization, reclassification, consolidation, merger, or sale of the
     character referred to in Paragraph 4(e) hereof, the stock or other
     securities or property provided for in such Paragraph.

     5.   Issue Tax. The issuance of certificates for Warrant Shares upon the
          ---------
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

     6.   No Rights or Liabilities as a Shareholder. This Warrant shall not
          -----------------------------------------
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

     7.   Transfer, Exchange, and Replacement of Warrant.
          ----------------------------------------------

                                       9
<PAGE>

          (a) Restriction on Transfer. This Warrant and the rights granted to
              -----------------------
the holder hereof are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Company referred to in Paragraph 7(e)
below, provided, however, that any transfer or assignment shall be subject to
the conditions set forth in Paragraph 7(f) hereof and to the applicable
provisions of the Securities Purchase Agreement. Until due presentment for
registration of transfer on the books of the Company, the Company may treat the
registered holder hereof as the owner and holder hereof for all purposes, and
the Company shall not be affected by any notice to the contrary. Notwithstanding
anything to the contrary contained herein, the registration rights described in
Paragraph 8 are assignable only in accordance with the provisions of that
certain Registration Rights Agreement, dated as of August 15, 2001, by and among
the Company and the other signatories thereto (the "Registration Rights
Agreement").

          (b) Warrant Exchangeable for Different Denominations. This Warrant is
              ------------------------------------------------
exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company referred to in Paragraph 7(e) below, for new Warrants of
like tenor representing in the aggregate the right to purchase the number of
shares of Common Stock which may be purchased hereunder, each of such new
Warrants to represent the right to purchase such number of shares as shall be
designated by the holder hereof at the time of such surrender.

          (c) Replacement of Warrant. Upon receipt of evidence reasonably
              ----------------------
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

          (d) Cancellation; Payment of Expenses. Upon the surrender of this
              ---------------------------------
Warrant in connection with any transfer, exchange, or replacement as provided in
this Paragraph 7, this Warrant shall be promptly canceled by the Company. The
Company shall pay all taxes (other than securities transfer taxes) and all other
expenses (other than legal expenses, if any, incurred by the Holder or
transferees) and charges payable in connection with the preparation, execution,
and delivery of Warrants pursuant to this Paragraph 7.

          (e) Register. The Company shall maintain, at its principal executive
              --------
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof), a register for this Warrant, in which the Company
shall record the name and address of the person in whose name this Warrant has
been issued, as well as the name and address of each transferee and each prior
owner of this Warrant.

          (f) Exercise or Transfer Without Registration. If, at the time of the
              -----------------------------------------
surrender of this Warrant in connection with any exercise, transfer, or exchange
of this Warrant, this Warrant (or, in the case of any exercise, the Warrant
Shares issuable hereunder), shall not be registered under the Securities Act and
under applicable state securities or blue sky laws, the Company may require, as
a condition of allowing such exercise, transfer, or exchange, (i) that the
holder or transferee of this

                                       10
<PAGE>

Warrant, as the case may be, furnish to the Company a written opinion of
counsel, which opinion and counsel are acceptable to the Company, to the effect
that such exercise, transfer, or exchange may be made without registration under
said Act and under applicable state securities or blue sky laws, (ii) that the
holder or transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee be an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act; provided that no such opinion, letter or status as an "accredited investor"
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act. The first holder of this Warrant, by taking and holding the
same, represents to the Company that such holder is acquiring this Warrant for
investment and not with a view to the distribution thereof.

     8.   Registration Rights. The initial holder of this Warrant (and certain
          -------------------
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Warrant Shares as are set forth in Section 2 of the Registration
Rights Agreement.

     9.   Notices. All notices, requests, and other communications required or
          -------
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 11 Riverside Street,
Nashua, New Hampshire 03062, Attention: Chief Financial Officer, or at such
other address as shall have been furnished to the holder of this Warrant by
notice from the Company. Any such notice, request, or other communication may be
sent by facsimile, but shall in such case be subsequently confirmed by a writing
personally delivered or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests, and other
communications shall be deemed to have been given either at the time of the
receipt thereof by the person entitled to receive such notice at the address of
such person for purposes of this Paragraph 9, or, if mailed by registered or
certified mail or with a recognized overnight mail courier upon deposit with the
United States Post Office or such overnight mail courier, if postage is prepaid
and the mailing is properly addressed, as the case may be.

     10.  Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
          -------------
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THE STATE OF DELAWARE (WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS). BOTH PARTIES IRREVOCABLY CONSENT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS AND THE STATE COURTS LOCATED IN
DELAWARE WITH RESPECT TO ANY SUIT OR PROCEEDING BASED ON OR ARISING UNDER THIS
AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY AND IRREVOCABLY AGREE THAT ALL
CLAIMS IN RESPECT OF SUCH SUIT OR PROCEEDING MAY BE DETERMINED IN SUCH COURTS.
BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE

                                       11
<PAGE>

OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH
PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS
MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE
PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE
THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT
OR IN ANY OTHER LAWFUL MANNER.

     11.  Miscellaneous.
          -------------

          (a) Amendments. This Warrant and any provision hereof may only be
              ----------
amended by an instrument in writing signed by the Company and the holder hereof.

          (b) Descriptive Headings. The descriptive headings of the several
              --------------------
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.

          (c) Cashless Exercise. Notwithstanding anything to the contrary
              -----------------
contained in this Warrant, if the resale of the Warrant Shares by the holder is
not then registered pursuant to an effective registration statement under the
Securities Act, this Warrant may be exercised by presentation and surrender of
this Warrant to the Company at its principal executive offices with a written
notice of the holder's intention to effect a cashless exercise, including a
calculation of the number of shares of Common Stock to be issued upon such
exercise in accordance with the terms hereof (a "Cashless Exercise"). In the
event of a Cashless Exercise, in lieu of paying the Exercise Price in cash, the
holder shall surrender this Warrant for that number of shares of Common Stock
determined by multiplying the number of Warrant Shares to which it would
otherwise be entitled by a fraction, the numerator of which shall be the
difference between the then current Market Price per share of the Common Stock
and the Exercise Price, and the denominator of which shall be the then current
Market Price per share of Common Stock.

          (d) Remedies. The Company acknowledges that a breach by it of its
              --------
obligations hereunder will cause irreparable harm to the holder of this Warrant
by vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Warrant will be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions of this Warrant,
that the holder of this Warrant shall be entitled, in addition to all other
available remedies in law or in equity, to an injunction or injunctions to
prevent or cure any breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions of this Warrant, without the necessity of
showing economic loss and without any bond or other security being required.


               [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       12
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer.

                                      STORAGE COMPUTER CORPORATION



                                      By: /s/ Peter N. Hood
                                          --------------------------------
                                          Peter N. Hood
                                          Treasurer and Chief Financial Officer



                          Dated as of August 16, 2001

                                       13
<PAGE>

                          FORM OF EXERCISE AGREEMENT


                                                       Dated:  ________ __, 2001


To: STORAGE COMPUTER CORPORATION


     The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of, or, if the resale of such Common Stock by the undersigned is not
currently registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended, by surrender of securities issued by the
Company (including a portion of the Warrant) having a market value (in the case
of a portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________. Please issue a certificate or certificates for
such shares of Common Stock in the name of and pay any cash for any fractional
share to:


                                                  Name: ________________________

                                                  Signature: ___________________
                                                  Address: _____________________
                                                           _____________________
                                                           _____________________


                                                  Note: The above signature
                                                        should correspond
                                                        exactly with the name on
                                                        the face of the within
                                                        Warrant.

and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.

                                       14
<PAGE>

                              FORM OF ASSIGNMENT


     FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow, to:

 Name of Assignee           Address                       No of Shares
 ----------------           -------                       ------------



, and hereby irrevocably constitutes and appoints ______________
________________________ as agent and attorney-in-fact to transfer said Warrant
on the books of the within-named corporation, with full power of substitution in
the premises.


Dated:  ______ __, 200_

In the presence of:


_______________________

                               Name:         ___________________________________

                               Signature:    ___________________________________

                               Title of Signing Officer or Agent (if any):

                               Address:      ___________________________________
                                             ___________________________________
                                             ___________________________________


                               Note: The above signature should correspond
                                     exactly with the name on the face of the
                                     within Warrant.

                                       15