Exhibit 10.7

                               AMENDMENT NO. TWO

     Amendment  No.2 to Accounts  Receivable and Inventory  Financing  Agreement
dated as of _________,  2002, by and between  Transamerica  Commericial  Finance
Corporation ("TCFC") and Pacific Magtron,  Inc. ("Dealer 1") and Pacific Magtron
(GA), Inc. ("Dealer  2")(Dealer 1 and Dealer 2 shall hereinafter be individually
referred to as a "Dealer" and collectively as the "Dealer").

     Pursuant  to that  certain  Accounts  Receivable  and  Inventory  Financing
Agreement dated as of July 13, 2001 by and among TCFC and Dealer and any and all
amendments  and  riders  thereto,   (collectively  referred  to  herein  as  the
"Agreement"),  TCFC made  certain  financing  available  to  Dealer.  Dealer has
requested TCFC to modify certain terms and provisions of the Agreement. TCFC has
agreed to do so, upon the terms and conditions of this Agreement.

     NOW THEREFORE,  in consideration of the premises set forth above, the terms
and conditions contained herein and other good and valuable  consideration,  the
receipt and sufficiency of which are hereby acknowledged,  TCFC and Dealer agree
as follows:

1. DEFINITIONS. Terms defined in the Agreement which are used herein shall have
the same meanings as set forth in the Agreement unless otherwise defined herein.

2. AMENDMENTS.

2.1. Schedule 6.6 is hereby deleted in its entirety and is replaced with the
following:

                                  SCHEDULE 6.6

                            FINANCIAL COVENANTS MENU

Dealer  covenants  and  agrees  that so long as any of the  liabilities  to TCFC
remain  outstanding or this Agreement remains in effect,  even if no liabilities
to TCFC are outstanding:

     INDEBTEDNESS  TO  TANGIBLE  NET  WORTH:  Dealer  shall  maintain a ratio of
     indebtedness  to  Tangible  Net  Worth  not to  exceed  3.25 to 1.00.  Such
     covenant will be measured quarterly.

     TANGIBLE NET WORTH:  Dealer shall maintain a Tangible Net Worth of not less
     than $4,250,000.00. Such covenant will be measure quarterly.

     MINIMUM EBIT: Dealer shall maintain a minimum EBIT at:

          ($68,000.00) as of the quarter ending on March 31, 2002,

          $140,000.00 as of the quarter ending on June 30, 2002,

          $300,000.00 as of the quarter ending on September 30, 2002 and

          $275,000.00 as of the quarter ending on December 31, 2002.

     Such covenant will be measured quarterly.

"EBIT" as used herein shall mean earnings before  deducting for interest expense
and income taxes in accordance with GAAP.

3.  REPRESENTATIONS  AND WARRANTIES OF COMPANY.  Dealer  represents and warrants
that this Amendment and the Agreement, as amended hereby,  constitute the legal,
valid and  binding  obligation  of  Dealer,  enforceable  against  the Dealer in
accordance with their respective terms.
<PAGE>
4. GOVERNING LAW. THIS AMENDMENT HAS BEEN DELIVERED TO, ACCEPTED AT AND SHALL BE
DEEMED TO HAVE BEEN MADE IN ILLINOIS.  THIS  AMENDMENT  SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.

5. Except as specifically modified hereby, all other terms and conditions of the
Agreement remain in full force and effect.

6. The  Agreement  and this  Amendment  represent  the  final  agreement  of the
parties,  and all  prior and  contemporaneous  discussions,  understandings  and
agreements  are merged  herein.  The  Agreement  and this  Amendment  may not be
modified except in writing by both parties.




IN WITNESS WHEREOF, this AMENDMENT NO. TWO has been duly executed this 13th day
of March, 2002.

                                     TRANSAMERICA COMMERCIAL FINANCE CORPORATION

                                     BY:
                                            ------------------------------------
                                     TITLE:
                                            ------------------------------------


                                     PACIFIC MAGTRON, INC.

                                     BY:    /s/ Theodore S. Li
                                            ------------------------------------
                                     TITLE: President
                                            ------------------------------------


                                     PACIFIC MAGTRON (GA), INC.


                                     BY:    /s/ Theodore S. Li
                                            ------------------------------------
                                     TITLE: President
                                            ------------------------------------