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                                                                  EXHIBIT 10.21

                        WARRANT FOR PURCHASE OF SHARES OF
                                  COMMON STOCK
                          OF MAGSTAR TECHNOLOGIES, INC.

                                 JANUARY 21,2002

         For value received, Richard F. McNamara, or his registered assigns
(the "Holder") is entitled to purchase from MagStar Technologies, Inc., a
Minnesota corporation (the "Company"), at any time on or before January 21,
2007, two hundred fifty thousand (250,000) fully paid and non-assessable shares
of the Company's common Stock, $.1875 par value (such class of stock being
hereinafter referred to as the "Common Stock" and such shares of Common Stock as
may be acquired upon exercise hereof being hereinafter referred to as the
"Warrant Shares") at an exercise price equal to $0.25 per share (80% of the
average of the closing bid and ask prices on January 3, 2002) ("Warrant Exercise
Price").

         This Warrant is being issued in connection with the 12% Promissory
Note, dated January 21, 2002, issued to Richard F. McNamara, due and payable on
January 10, 2005.

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

         1.       The rights represented by the Warrant may be exercised by the
Holder, in whole or in part (but not as to a fractional share of Common Stock),
by written notice of exercise delivered to the Company accompanied by the
surrender of this Warrant (properly endorsed if required) at the principal
office of the Company and upon payment to it, by cash, certified check or bank
draft, of the warrant exercise price for such shares. In addition, the Holder
may elect to pay the full purchase price by receiving a number of shares of
Common Stock computed using the following formula:

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

         Where: X = the number of shares of Common Stock to be issued to the
Holder.

                  Y =      the number of shares of Common Stock as to which
                           this Warrant is being exercised.

                  A =      the Fair Market Value of one share of Common Stock.

                  B =      Warrant exercise price.

         For purposes of this Section 1, "Fair Market Value" means, with respect
to the Company's Common Stock, as of any date (or, if no shares were traded or
quoted on such date, as of the next preceding date on which there was such a
trade or quote) (a) the mean between the reported high and low sale prices of
the Common Stock if the Common Stock is listed, admitted to unlisted trading
privileges or reported on any foreign or


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national securities exchange or on the Nasdaq National Market or an equivalent
foreign market on which sale prices are reported; (b) if the Common Stock is not
so listed, admitted to unlisted trading privileges or reported, the closing bid
price as reported by the Nasdaq SmallCap Market, OTC Bulletin Board or the
National Quotation Bureau, Inc. or other comparable service; or (c) if the
Common Stock is not so listed or reported, such price as the Company's Board of
Directors determines in good faith in the exercise of its reasonable discretion.

         The Company agrees that the Warrant Shares so purchased shall be and
are deemed to be issued as of the close of business on the date on which this
Warrant shall have been surrendered and payment made for such Warrant Shares as
aforesaid. Certificates for the shares of Warrant Shares so purchased shall be
delivered to the Holder within 15 days after the rights represented by this
Warrant shall have been so exercised, and, unless this Warrant has expired, a
new Warrant representing the number of Warrant Shares, if any, with respect to
which this Warrant has not been exercised shall also be delivered to the Holder
within such time. Notwithstanding the foregoing, however, the Company shall not
be required to deliver any certificates for the Warrant shares, except in
accordance with the provisions and subject to the limitations of Paragraph 5
below.

         2.       The Company covenants and agrees that all Warrant Shares that
may be issued upon the exercise of this Warrant will, upon issuance, be duly
authorized and issued, fully paid and non-assessable. The Company further
covenants and agrees that until expiration of this Warrant, the Company will at
all times have authorized, and reserved for the purpose of issuance or transfer
upon exercise of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.

         3.       The foregoing provisions are, however, subject to the
following:

                  (a)      The Warrant Exercise Price shall be subject to
         adjustment from time to time as hereinafter provided. Upon each
         adjustment of the Warrant Exercise Price, the Holder of this Warrant
         shall thereafter be entitled to purchase, at the Warrant Exercise Price
         resulting from such adjustment, the number of shares obtained by
         multiplying the Warrant Exercise Price in effect immediately prior to
         such adjustment by the number of shares purchasable pursuant hereto
         immediately prior to such adjustment and dividing the product thereof
         by the Warrant Exercise Price resulting from such adjustment.

                  (b)      In case the Company shall at any time subdivide the
         outstanding Common Stock into a greater number of shares or declare a
         dividend payable in Common Stock, the Warrant Exercise Price in effect
         immediately prior to such subdivision shall be proportionately reduced,
         and conversely, in case the outstanding Common Stock shall be combined
         into a smaller number of shares, the Warrant Exercise Price in effect
         immediately prior to such combination shall be proportionately
         increased.


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                  (c)      If any capital reorganization or reclassification of
         the capital stock of the Company, or consolidation or merger of the
         Company with another corporation shall be effected in such a way that
         holders of Common Stock shall be entitled to receive stock, securities
         or assets ("Substituted Property") with respect to or in exchange for
         such Common Stock, then, as a condition of such reorganization,
         reclassification, consolidation, merger or sale, the Holder shall have
         the right to purchase and receive upon the basis and upon the terms and
         conditions specified in the Warrant and in lieu of the Common Stock of
         the Company immediately theretofore purchasable and receivable upon the
         exercise of the rights represented hereby, such Substituted Property as
         would have been issued or delivered to the Holder if it had exercised
         this Warrant and had received upon exercise of this Warrant the Common
         Stock prior to such reorganization, reclassification, consolidation,
         merger or sale. The Company shall not effect any such consolidation,
         merger or sale, unless prior to the consummation thereof the successor
         corporation (if other than the Company) resulting from such
         consolidation or merger or the corporation purchasing such assets shall
         assume by written instrument executed and mailed to the Holder at the
         last address of the Holder appearing on the books of the Company, the
         obligation to deliver to the Holder such shares of stock, securities or
         assets as, in accordance with the foregoing provision, the Holder may
         be entitled to purchase.

                  (d)      Upon any adjustment of the Warrant Exercise Price,
         the Company shall give written notice thereof, by first-class mail,
         postage prepaid, addressed to the Holder at the address of the Holder
         as shown on the books of the Company, which notice shall state the
         Warrant Exercise Price resulting form such adjustment and the increase
         or decrease, if any, in the number of shares purchasable at the Warrant
         Exercise Price upon exercise of this Warrant, setting forth in
         reasonable detail the method of calculation and the facts upon which
         such calculation is based.

         4.       This Warrant shall not entitle the Holder to any voting rights
or other rights as a shareholder of the Company.

         5.       The Holder, by acceptance hereof, represents and warrants that
(a) it is acquiring this Warrant for its own account for investment purposes
only and not with a view to its resale or distribution and (b) it has no present
intention to resell or otherwise dispose of all or any part of this Warrant.
Other than pursuant to registration under federal and state securities laws or
an exemption from such registration, the availability of which the Company shall
determine in its sole discretion, (y) the Company will not accept the exercise
of this Warrant or issue certificates for Warrant Shares and (z) neither this
Warrant nor any Warrant Shares may be sold, pledged, assigned or otherwise
disposed of (whether voluntarily or involuntarily). The Company may condition
such issuance or sale, pledge, assignment or other disposition on the receipt
from the party to whom this Warrant is to be so transferred or to whom Warrant
Shares are to be issued or so transferred of any representations and agreements
requested by the Company in order to permit such issuance or transfer to be made
pursuant to exemptions from registration


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under federal and applicable state securities laws. Each certificate
representing the Warrant (or any part thereof) and any Warrant Shares shall be
stamped with appropriate legends setting forth these restrictions on
transferability. The Holder, by acceptance hereof, agrees to give written notice
to the Company before exercising or transferring this Warrant or transferring
any Warrant Shares of the Holder's intention to do so, describing briefly the
manner of any proposed exercise or transfer. Within thirty (30) days after
receiving such written notice, the Company shall notify the Holder as to whether
such exercise or transfer may be effected.

         6.       The Holder of this Warrant shall be entitled to the
Registration Rights set forth in Exhibit A hereto.

         7.       This Warrant shall be transferable only on the books of the
Company by the Holder in person, or by duly authorized attorney, on surrender of
the Warrant, property assigned.

         8.       Neither this Warrant nor any term hereof may be changed,
waived, discharged or terminated orally but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer as of the date set forth above.

                                                MAGSTAR TECHNOLOGIES, INC


                                                By: /s/ Louis S. Matjasko
                                                   -------------------------
                                                    Its: President
                                                         -------------------


THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR UNDER ANY STATE SECURITIES
LAWS, AND MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT THE TRANSFER IS EXEMPT
FROM REGISTRATION UNDER THE APPLICABLE FEDERAL AND STATE SECURITIES LAWS.


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                                                            Exhibit A to Warrant


                              REGISTRATION RIGHTS

1.       REGISTRATION RIGHTS.

         (a)      PIGGYBACK REGISTRATION RIGHTS. If at any time during the
period beginning on the date hereof and ending ten years from the date hereof,
the Company shall determine to proceed with the actual preparation and filing of
a registration statement under the federal Securities Act of 1933 (the
"Securities Act") in connection with the proposed offer and sale for money of
any of its equity securities by it, the Company will give written notice of its
determination to the Holder. Upon the written request of any Holder given within
20 days after receipt of any such notice from the Company, the Company will,
except as herein provided, cause all such shares of Company common stock that
are acquired by the Holder upon the exercise of this Warrant and with respect to
which such Holder has requested registration, to be included in such
registration statement, all to the extent requisite to permit the sale or other
disposition by such Holder of the shares to be so registered; provided, however,
that (i) the Company shall not be required to include this Warrant in any such
registration statement, (ii) the Company shall not be required to include any
such shares of Common Stock in any such registration for any Holder who is able
to sell all such shares during a three-month period beginning on the date such
notice is received by such Holder, pursuant to Rule 144 under the Securities Act
(or any similar rule or regulation); (iii) the Company shall not be required to
give such notice with respect to, or to include shares of Common Stock in, any
such registration which is primarily (A) a registration of a stock option plan
or other employee benefit plan or of securities issued or issuable pursuant to
any such plan, or (B) a registration of securities proposed to be issued in
exchange for securities or assets of, or in connection with a merger or
consolidation with, another corporation; (iv) the Company shall not be required
to include in any such registration any shares of Common Stock previously duly
registered under the Securities Act; and (v) the Company may, in its sole
discretion, withdraw any such registration statement and abandon the proposed
offering in which any such Holder had requested to participate. If any such
registration shall be underwritten in whole or in part, the Company may require
that the shares requested for inclusion by the Holder pursuant to this section
be included in the underwriting on the same terms and conditions as the
securities otherwise being sold though the underwriters. In the event that if in
the good faith judgement of the managing underwriter of such public offering the
inclusion of all the shares originally covered by a request for registration
made by all persons other than the Company would reduce the number of shares to
be offered by the Company or interfere with the successful marketing of the
shares of stock offered by the Company, the number of shares owned by the Holder
and otherwise to be included in the underwritten public offering may be reduced,
or may be eliminated entirely from such underwritten public offering; provided,
however, that any such required reduction shall be pro rata among all persons
(other than the Company) who are participating in such offering. Those shares
which are thus excluded from the underwritten public offering shall be withheld
from the market by the Holder for a


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period, not to exceed 180 days, which the managing underwriter reasonably
determines is necessary in order to effect the underwritten public offering.

         (b)      FORM S-3 DEMAND REGISTRATION RIGHTS. At any time during which
the Company is eligible to register on Form S-3, or a successor form thereto,
under the Securities Act a sale of its outstanding Common Stock made solely for
the account of any person other than the Company, but ending four (4) years
after the date hereof, upon each request by the Holder (each such request shall
be in writing and shall state the number of shares to be disposed of and the
intended methods of disposition of such shares by such Holder), the Company will
promptly take all necessary steps to register all such shares of the Company's
common stock that are acquired by the Holder upon the exercise of this Warrant
and with respect to which the Holder has requested registration under the
Securities Act and such state securities or blue sky laws as the Holder may
reasonably request. Notwithstanding the foregoing, the Company shall not be
obligated to effect any such registration if (i) the Holder, together with the
holders of any other securities of the Company entitled to inclusion in such
registration, propose to sell securities on Form S-3 at an aggregate price to
the public of less than $250,000; (ii) the Holder is able to sell all such
shares during a three-month period, beginning on the date of notice hereunder to
the Company, pursuant to Rule 144 under the Securities Act (or any similar rule
or regulation); (iii) in a given twelve-month period, after the Company has
effected on (1) such registration in any such period; or (iv) such shares of
Common Stock have previously been duly registered under the Securities Act. In
addition, the Company may, on not more than one occasion, delay the filing of
any registration statement requested hereunder to a date not more than 180 days
following the date of the Holder's request for registration in the event that
the Company has furnished the Holder with a certificate executed by the
Company's President or Chief Executive Officer stating that such delay is
necessary in order not to significantly adversely affect financing efforts then
underway at the Company or not to disclose material non-public information (in
which case the expiration date of this Section shall be extended by a period
equal to the period of such delay). From and after the date on which the Company
has a class of equity securities registered under the Securities Exchange Act of
1934, as amended, the Company will file with the Commission, on a timely basis,
all reports required to be filed thereunder and any other documents required to
meet the public information requirements of Rule 144(c) under the Securities
Act, and, after such time as the Company becomes eligible to use Form S-3, or
any comparable or successor form, for the sale of its outstanding Common Stock
solely for the account of any person other than the Company, the Company will
use its best efforts to maintain such eligibility.

2.       REGISTRATION PROCEDURES. If and whenever the Company is required by the
provisions of section 1 to effect the registration of any shares under the
Securities Act, the Company will:

         (a)      prepare and file with the commission a registration statement
with respect to such securities, and use its best efforts to cause such
registration statement to become and remain effective for such period as may be
reasonably necessary to effect the sale of such securities, not to exceed three
(3) months;


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         (b)      prepare and file with the Commission such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective for such period
as may be reasonably necessary to effect the sale of such securities, not to
exceed three (3) months;

         (c)      furnish to the Holders and to the underwriters of the
securities being registered such reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus and such other documents as
the Holders and underwriters may reasonably request in order to facilitate the
public offering of such securities;

         (d)      use its best efforts to register or qualify the securities
covered by such registration statement under such state securities or blue sky
laws of such jurisdictions as the underwriters may reasonably request within 20
days following the original filing of such registration statement, except that
the Company shall not for any purpose be required to execute a general consent
to service of process or to qualify to do business as a foreign corporation in
any jurisdiction wherein it is not so qualified; and

         (e)      prepare and promptly file with the Commission and promptly
notify the Holders of the filing of such amendment or supplement to such
registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities Act, any event shall
have occurred as the result of which any such prospectus or any other prospectus
as then in effect would include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances in which they were made, not misleading.

3.       EXPENSES. With respect to any registration of shares pursuant to
section 1, the Company shall bear the following fees, costs and expenses: all
registration, filing and NASD fees, printing expenses, fees and disbursements of
counsel and accountants for the Company, fees and disbursements of counsel for
the underwriter or underwriters of such securities (if the Company and/or
selling security holders are required to bear such fees and disbursements), all
internal Company expenses, the premiums and other costs of policies of insurance
against liability arising out of the public offering, and all legal fees and
disbursements and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be
registered or qualified. Fees and disbursements of counsel and accountants for
the Holders, underwriting discounts and commissions and transfer taxes for the
Holders and any other expenses incurred by the Holders not expressly included
above shall be borne by the Holders.

4.       INDEMNIFICATION. In the event that any shares owned by the Holders are
included in a registration statement under section 1.

         (a)      The Company will indemnify and hold harmless any Holder and
any underwriter (as defined in the Securities Act) from and against any and all
loss, damage, liability, cost and expense to which any such Holder or any such
underwriter may


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become subject under the Securities Act or otherwise, insofar as such losses,
damages, liabilities, costs or expenses are caused by any untrue statement or
alleged untrue statement of any material fact contained in such registration
statement, any prospectus contained therein or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, damage, liability, cost or expense
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission so made in conformity with information furnished
by such Holder or such underwriter.

         (b)      Each Holder will indemnify and hold harmless the Company and
any underwriter from and against any and all loss, damage, liability, cost or
expense to which the Company or any underwriter may become subject under the
Securities Act or otherwise, insofar as such losses, damages, liabilities, costs
or expenses are caused by any untrue or alleged untrue statement of any material
fact contained in such registration statement, any prospectus contained therein
or any amendment or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
strict conformity with information furnished by such Holder.

         (c)      Promptly after receipt by an indemnified party pursuant to the
provisions of paragraph (a) or (b) of this section of notice of the commencement
of any action involving the subject matter of the foregoing indemnity
provisions, such indemnified party will, if a claim thereof is to be made
against the indemnifying party pursuant to the provisions of said paragraph (a)
or (b), promptly notify the indemnifying party of the commencement thereof; but
the omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than hereunder.
In case such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party shall
have the right to participate in, and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
if the defendants in any action include both the indemnified party and the
indemnifying party and there is a conflict of interest which would prevent
counsel for the indemnifying party from also representing the indemnified party,
the indemnified party or parties shall have the right to select one separate
counsel to participate in the defense of such action on behalf of such
indemnified party or parties, which counsel shall be reasonably satisfactory to
the indemnifying party. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provision of said paragraph (a) or (b) for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof


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other than reasonable costs of investigation, unless (i) the indemnified party
shall have employed counsel in accordance with the proviso of the preceding
sentence, (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after the notice of the commencement of the action, or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party.


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