WARRANT AGREEMENT


THE SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE  SECURITIES  LAWS. THE
SECURITIES  HAVE BEEN ACQUIRED FOR  INVESTMENT  AND MAY NOT BE OFFERED FOR SALE,
SOLD,  TRANSFERRED  OR  ASSIGNED  IN THE  ABSENCE OF AN  EFFECTIVE  REGISTRATION
STATEMENT FOR THE  SECURITIES  UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), OR APPLICABLE  STATE  SECURITIES  LAWS, OR AN OPINION OF COUNSEL IN
FORM,  REASONABLY  ACCEPTABLE  TO THE ISSUER THAT  REGISTRATION  IS NOT REQUIRED
UNDER THE 1933 ACT OR UNLESS SOLD  PURSUANT TO RULE 144 UNDER SAID ACT. ANY SUCH
OFFER,  SALE,  ASSIGNMENT OR TRANSFER MUST ALSO COMPLY WITH THE APPLICABLE STATE
SECURITIES LAWS.


                            BASIC EMPIRE CORPORATION

               WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK

Date of Issuance:  May 26, 2004                        Number of Shares:  89,285

         Basic Empire Corporation, a Nevada corporation (the "Company"),  hereby
certifies  that,  for Ten  United  States  Dollars  ($10.00)  and other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged,  Timothy P. Halter,  the registered holder hereof or his permitted
assigns, is entitled, subject to the terms set forth below, to purchase from the
Company  upon  surrender of this  Warrant,  at any time or times on or after the
date of issuance,  but not after 5:00 P.M.  Central Time on the Expiration  Date
(as defined herein) 89,285 fully paid  nonassessable  shares of Common Stock (as
defined herein) of the Company (the "Warrant  Shares") at the purchase price per
share provided in Section 1 below.

         Section 1.  Definitions.  The following words and terms as used in this
Warrant shall have the following meanings:

         (a)  "Business  Day" means any day that is not a Saturday,  Sunday or a
day on which the banks in the Dallas metropolitan area are generally closed.

         (b) "Common  Stock" means (i) the  Company's  common  stock,  par value
$0.001 per share,  and (ii) any capital stock into which such Common Stock shall
have been changed or any capital stock resulting from a reclassification of such
Common Stock.

         (c)  "Expiration  Date" means the date three (3) years from the date of
this Warrant or, if such date falls on a Saturday,  Sunday or other day on which
banks are required or authorized to be closed in the City of Dallas or the State
of Texas or on which  trading does not take place on the  principal  exchange or
automated  quotation  system on which the Common Stock is traded (a  "Holiday"),
the next date that is not a Holiday.


                                       1
<PAGE>

         (d)  "Person"  means an  individual,  a limited  liability  company,  a
partnership,  a  joint  venture,  a  corporation,  a  trust,  an  unincorporated
organization and a government or any department or agency thereof.

         (e) "Securities Act" means the Securities Act of 1933, as amended.

         (f) "Warrant"  means this Warrant and all Warrants  issued in exchange,
transfer or replacement of any thereof.

         (g) "Warrant  Exercise Price" shall be $0.28 per share of Common Stock,
which price is the current fair market value of shares of Common Stock.

         Section 2. Exercise of Warrant.

         (a) Subject to the terms and  conditions  hereof,  this  Warrant may be
exercised by the holder hereof then  registered on the books of the Company,  in
whole  or in  part,  at any time on any  Business  Day on or  after  the date of
issuance of this Warrant and prior to 5:00 P.M.  Eastern Time on the  Expiration
Date by (i) delivery of a written notice, in the form of the subscription notice
attached as Exhibit A hereto (the "Exercise Notice"),  of such holder's election
to exercise  this  Warrant,  which  notice  shall  specify the number of Warrant
Shares to be  purchased,  (ii)  payment to the Company of an amount equal to the
Warrant  Exercise  Price  multiplied by the number of Warrant Shares as to which
this Warrant is being  exercised  (plus any applicable  issue or transfer taxes)
(the "Aggregate Exercise Price") in cash or by check or wire transfer, and (iii)
the  surrender  to a common  carrier  for  delivery  to the  Company  as soon as
practicable following such date, this Warrant (or an indemnification undertaking
with  respect to this  Warrant in the case of its loss,  theft or  destruction);
provided,  that if such  Warrant  Shares are to be issued in any name other than
that of the registered  holder of this Warrant,  such issuance shall be deemed a
transfer and the  provisions of Section 8 shall be  applicable.  In the event of
any exercise of the rights  represented by this Warrant in compliance  with this
Section 2(a), a certificate or certificates for the Warrant Shares so purchased,
in such denominations as may be requested by the holder hereof and registered in
the name of, or as directed by, the holder,  shall be delivered at the Company's
expense to, or as directed  by,  such holder as soon as  practicable,  and in no
event later than ten (10)  Business  Days,  after the  Company's  receipt of the
Exercise  Notice,   the  Aggregate  Exercise  Price  and  this  Warrant  (or  an
indemnification  undertaking  with  respect  to this  Warrant in the case of its
loss, theft or destruction).  Upon delivery of the Exercise Notice and Aggregate
Exercise  Price  referred to in clause (ii)  above,  the holder of this  Warrant
shall be deemed for all  corporate  purposes to have become the holder of record
of the Warrant  Shares with  respect to which this  Warrant has been  exercised,
irrespective of the date of delivery of this Warrant as required by clause (iii)
above or the certificates evidencing such Warrant Shares.

         (b) Unless the rights represented by this Warrant shall have expired or
shall have been fully  exercised,  the Company shall, as soon as practicable and
in no event later than ten (10)  Business Days after any exercise and at its own
expense, issue a new Warrant identical in all respects to this Warrant exercised
except it shall  represent  rights to  purchase  the  number of  Warrant  Shares
purchasable  immediately  prior to such exercise  under this Warrant  exercised,
less the  number of  Warrant  Shares  with  respect  to which  such  Warrant  is
exercised.


                                       2
<PAGE>

         (c) No  fractional  shares  of Common  Stock are to be issued  upon the
exercise of this Warrant, but rather the number of shares of Common Stock issued
upon  exercise of this Warrant  shall be rounded up or down to the nearest whole
number.

         Section 3. Covenants as to Common Stock.  The Company hereby  covenants
and agrees as follows:

         (a) This  Warrant is, and any  Warrant  issued in  substitution  for or
replacement  of this Warrant will upon issuance be, duly  authorized and validly
issued.

(b) All Warrant Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be validly issued, fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.

         (c) During  the period  within  which the  rights  represented  by this
Warrant may be  exercised,  the Company  will at all times have  authorized  and
reserved at least 100% of the number of shares of Common Stock needed to provide
for the  exercise of the rights  then  represented  by this  Warrant and the par
value of said shares  will at all times be less than or equal to the  applicable
Warrant Exercise Price.

         (d) If the Company  proposes at any time (a) to declare any dividend or
distribution upon any of its stock, whether in cash,  property,  stock, or other
securities  and whether or not a regular  cash  dividend;  (b) to offer for sale
additional  shares of any class or series of the Company's  stock; (c) to effect
any  reclassification  or  recapitalization of any of its stock; (d) to merge or
consolidate with or into any other  corporation,  or sell,  lease,  license,  or
convey all or substantially all of its assets, or to liquidate, dissolve or wind
up; or (e) offer holders of  registration  rights the opportunity to participate
in an underwritten  public offering of the company's  securities for cash, then,
in connection with each such event, the Company shall give Holder:  (1) at least
10 days  prior  written  notice of the date on which a record  will be taken for
such dividend,  distribution, or subscription rights (and specifying the date on
which the holders of common stock will be entitled  thereto) or for  determining
rights to vote,  if any,  in respect of the  matters  referred to in (c) and (d)
above;  (2) in the case of the matters referred to in (c) and (d) above at least
10 days  prior  written  notice of the date when the same will take  place  (and
specifying  the date on which the  holders of common  stock will be  entitled to
exchange their common stock for securities or other  property  deliverable  upon
the occurrence of such event);  and (3) in the case of the matter referred to in
(e)  above,  the same  notice as is given to the  holders  of such  registration
rights.

         Section 4. Registration of Warrant Shares

         (a) Mandatory Registration.  The Company shall prepare, and, as soon as
practicable  but in no event later than sixty (60)  calendar days after the date
the holder exercises this Warrant, file with the SEC a Registration Statement or
Registration  Statements  (as is  necessary)  on Form  S-8  (or if such  form is
unavailable,  such other form as is  available  for  registration)  covering the
resale of all of the Warrant Shares. The initial Registration Statement prepared
pursuant hereto shall register for resale at least that number of Company common
stock  shares equal to the number of Warrant  Shares as of the date  immediately
preceding the date the  Registration  Statement is initially filed with the SEC,
subject  to  adjustment.  The  Company  shall use its best  efforts  to have the
Registration Statement declared effective by the SEC as soon as practicable, but
in no event  later than 120  calendar  days after the date the holder  exercises
this Warrant.


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<PAGE>

         (b) Piggy Back Registration  Rights. If the Company decides,  including
as required under any demand registration  rights agreement,  to register any of
its common stock or securities convertible into or exchangeable for common stock
under the Securities Act on a form which is suitable for an offering for cash or
shares of the  Company  held by third  parties  and which is not a  registration
solely to implement an employee  benefit plan, a registration  statement on Form
S-4 (or successor  form) or a transaction to which Rule 145 or any other similar
rule of the SEC is applicable,  the Company will promptly give written notice to
the  holder of this  Warrant of its  intention  to effect  such a  registration.
Subject to Section  4(c)  below,  the Company  shall  include all of the Warrant
Shares  that the holder  requests to be  included  in such a  registration  by a
written  notice  delivered  to the Company  within  fifteen  (15) days after the
notice given by the Company.

         (c) If the registration,  as described in Section 4(b) above,  involves
an underwritten  offering,  the Company will not be required to register Warrant
Shares in excess of the amount that the principal underwriter  reasonably and in
good faith  recommends  may be included in such  offering (a  "Cutback"),  which
recommendation,  and supporting  reasoning,  shall be delivered to the holder of
this Warrant.  If such a Cutback occurs,  the number of shares that are entitled
to included in the  registration  and  underwriting  shall be  allocated  in the
following  manner:  (i) first,  to the Company for any securities it proposes to
sell for its own account,  (ii) second,  to the holder of this Warrant requiring
such  registration,  and (iii) third,  to other  holders of stock of the Company
requesting inclusion in the registration,  pro rata among the respective holders
thereof  on the basis of the  number of shares  for which  each such  requesting
holder has requested registration.

         Section 5. Taxes.  The Company shall pay any and all taxes which may be
payable  with  respect to the  issuance  and  delivery  of Warrant  Shares  upon
exercise of this Warrant.

         Section 6. Warrant Holder Not Deemed a Stockholder. Except as otherwise
specifically  provided  herein,  no holder,  as such,  of this Warrant  shall be
entitled to vote or receive  dividends  or be deemed the holder of shares of the
Company  for any  purpose,  nor shall  anything  contained  in this  Warrant  be
construed  to confer  upon the holder  hereof,  as such,  any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization,  issue of stock,  reclassification
of stock,  consolidation,  merger,  conveyance or otherwise),  receive notice of
meetings,  receive dividends or subscription rights, or otherwise,  prior to the
issuance to the holder of this Warrant of the Warrant  Shares which he or she is
then  entitled to receive  upon the due exercise of this  Warrant.  In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities
on such holder to purchase  any  securities  (upon  exercise of this  Warrant or
otherwise)  or as a stockholder  of the Company,  whether such  liabilities  are
asserted by the Company or by creditors of the Company.

         Section 7.  Representations of Holder.  The holder of this Warrant,  by
the  acceptance  hereof,  represents  that it is acquiring  this Warrant and the
Warrant  Shares  for its own  account  for  investment  only and not with a view
towards,  or for resale in connection  with, the public sale or  distribution of
this  Warrant or the Warrant  Shares,  except  pursuant to sales  registered  or
exempted  under the  Securities  Act;  provided,  however,  that by  making  the
representations herein, the holder does not agree to hold this Warrant or any of
the Warrant Shares for any minimum or other specific term and reserves the right
to dispose of this Warrant and the Warrant Shares at any time in accordance with
or pursuant to a  registration  statement or an exemption  under the  Securities
Act.


                                       4
<PAGE>

         Section 8. Ownership and Transfer.

         (a) 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.  The Company may treat the
Person in whose name any Warrant is  registered on the register as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary, but
in all events  recognizing  any transfers  made in accordance  with the terms of
this Warrant.

         (b) 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  warrant  power in the form of  Exhibit B attached  hereto;
provided,  however,  that any  transfer  or  assignment  shall be subject to the
conditions set forth in Section 8(c) below.

         (c) The holder of this  Warrant  understands  that this Warrant has not
been and is not expected to be, registered under the Securities Act or any state
securities laws, and may not be offered for sale, sold,  assigned or transferred
unless (a)  subsequently  registered  thereunder,  or (b) such holder shall have
delivered to the Company an opinion of counsel, in generally acceptable form, to
the effect that the securities to be sold,  assigned or transferred may be sold,
assigned  or  transferred  pursuant  to an  exemption  from  such  registration;
provided  that  (i) any sale of such  securities  made in  reliance  on Rule 144
promulgated  under the  Securities  Act may be made only in accordance  with the
terms of said Rule and further,  if said Rule is not  applicable,  any resale of
such securities  under  circumstances in which the seller (or the person through
whom the sale is made)  may be  deemed  to be an  underwriter  (as that  term is
defined in the Securities Act) may require  compliance with some other exemption
under the  Securities  Act or the rules and  regulations  of the  Securities and
Exchange  Commission  thereunder;  and (ii)  neither  the  Company nor any other
person is under any obligation to register the Warrants under the Securities Act
or any state  securities  laws or to comply with the terms and conditions of any
exemption thereunder.

         Section 9. Adjustment to the Shares. The Warrant Exercise Price and the
number of shares of Common Stock issuable upon exercise of this Warrant shall be
adjusted from time to time as follows:

         (a)  Adjustment  of  Warrant   Exercise   Price  upon   Subdivision  or
Combination  of  Common  Stock.  If the  Company  at  anytime  after the date of
issuance  of this  Warrant  subdivides  (by any  stock  split,  stock  dividend,
recapitulation  or otherwise) one or more classes of its  outstanding  shares of
Common  Stock into a greater  number of shares,  the Warrant  Exercise  Price in
effect immediately prior to such subdivision will be proportionately reduced and
the  number of  shares of Common  Stock  obtainable  upon the  exercise  of this
Warrant will be proportionately  increased. If the Company at any time after the
date of issuance of this Warrant combines (by  combination,  reverse stock split
or otherwise) one or more classes of its outstanding shares of Common Stock into
a smaller number of shares,  the Warrant  Exercise  Price in effect  immediately
prior to such  combination will be  proportionately  increased and the number of
shares  of  Common  Stock  obtainable  upon  exercise  of this  Warrant  will be
proportionately decreased.


                                       5
<PAGE>

         (b) Reclassification,  Exchange, Combinations or Substitution. Upon any
reclassification,  exchange,  substitution,  or other  event  that  results in a
change of the number  and/or class of the  securities  issuable upon exercise or
conversion  of this  Warrant,  the holder of this  Warrant  shall be entitled to
receive,  upon exercise or  conversion  of this Warrant,  the number and kind of
securities  and property that the holder of this Warrant would have received for
the shares of Common Stock if this Warrant had been exercised immediately before
such reclassification,  exchange,  substitution,  or other event. The Company or
its successor  shall  promptly issue to holder of this Warrant a new Warrant for
such new  securities  or other  property.  The new  Warrant  shall  provide  for
adjustments  which shall be as nearly  equivalent as may be  practicable  to the
adjustments  provided  for in this  Section  9  including,  without  limitation,
adjustments  to the Warrant  Exercise  Price and to the number of  securities or
property  issuable  upon  exercise of the new Warrant.  The  provisions  of this
Section 9(b) shall similarly apply to successive  reclassifications,  exchanges,
substitutions, or other events.

         (c) Adjustments for Diluting Issuances.  The Warrant Exercise Price and
the number of shares of Common  Stock  issuable  upon  exercise of this  Warrant
shall be subject to adjustment, from time to time in the manner set forth in the
Company's  Articles or Certificate of  Incorporation  as if the shares of Common
Stock were  issued and  outstanding  on and as of the date of any such  required
adjustment.  The  provisions  set  forth for the  shares of Common  Stock in the
Company's  Articles or Certificate (as applicable) of Incorporation  relating to
the above in effect as of the date of issuance  may not be amended,  modified or
waived,  without the prior written  consent of the holder of this Warrant unless
such amendment,  modification  or waiver affects the rights  associated with the
Warrant  Shares in the same  manner as such  amendment,  modification  or waiver
affects the rights associated with all other shares of the same series and class
as the shares granted to the holder.

         (d) No Impairment.  The Company shall not, by amendment of its Articles
or Certificate (as  applicable) of  Incorporation  or through a  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  under  this
Warrant by the Company,  but shall at all times in good faith assist in carrying
out of all the provisions of this Section 9 and in taking all such action as may
be  necessary  or  appropriate  to protect  Holder's  rights  under this Section
against impairment.

         (e) Certificate as to Adjustments.  Upon each adjustment of the Warrant
Exercise Price, the Company shall promptly notify the holder in writing, and, at
the Company's  expense,  promptly  compute such  adjustment,  and furnish to the
holder with a  certificate  of its Chief  Financial  Officer  setting forth such
adjustment and the facts upon which such adjustment is based. The Company shall,
upon written  request,  furnish to the holder a  certificate  setting  forth the
Warrant  Exercise  Price in  effect  upon the date  thereof  and the  series  of
adjustments leading to such Warrant Exercise Price.


                                       6
<PAGE>

         Section 10.  Lost,  Stolen,  Mutilated or  Destroyed  Warrant.  If this
Warrant is lost, stolen,  mutilated or destroyed,  the Company shall, on receipt
of an indemnification undertaking,  issue a new Warrant of like denomination and
tenor as this Warrant so lost, stolen, mutilated or destroyed.

         Section  11.   Notice.   Any  notices,   consents,   waivers  or  other
communications required or permitted to be given under the terms of this Warrant
must be in writing and will be deemed to have been delivered:  (i) upon receipt,
when delivered  personally;  (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission  is  mechanically or  electronically  generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
a  nationally  recognized  overnight  delivery  service,  in each case  properly
addressed to the party to receive the same. The addresses and facsimile  numbers
for such communications shall be:

                  If to the Company:

                           Basic Empire Corporation
                           211 West Wall Street
                           Midland, Texas  79701-4556
                           Telephone: ______________
                           Facsimile: ______________
                           Attention: ______________

                  Notice to the holder of this  Warrant  shall be  addressed  as
                  follows  until  the  Company  receives  notice  of a change in
                  address:

                           Timothy P. Halter
                           12890 Hilltop Road
                           Argyle, Texas  76226
                           Telephone:_______________
                           Facsimile:_______________
                           Attention:_______________

Each party shall provide five days' prior  written  notice to the other party of
any change in address or facsimile number.  Written  confirmation of receipt (A)
given by the recipient of such notice,  consent,  waiver or other communication,
(B) mechanically or electronically  generated by the sender's  facsimile machine
containing the time, date,  recipient facsimile number and an image of the first
page of such transmission or (C) provided by a nationally  recognized  overnight
delivery service shall be rebuttable  evidence of personal  service,  receipt by
facsimile or receipt from a nationally  recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.

         Section  12.  Date.  The date of this  Warrant  is  May 26, 2004.  This
Warrant, in all events, shall be wholly void and of no effect after the close of
business on the Expiration Date.

         Section 13. Amendment and Waiver.  Except as otherwise provided herein,
the  provisions  of this  Warrant  may be amended  and the  Company may take any
action  herein  prohibited,  or omit to perform  any act herein  required  to be
performed  by it, only if the Company has  obtained  the written  consent of the
holder of this Warrant.


                                       7
<PAGE>

         Section  14.  Descriptive  Headings  The  descriptive  headings  of the
several  Sections and  paragraphs  of this Warrant are inserted for  convenience
only and do not constitute a part of this Warrant.

         Section  15.  Governing  Law.  This  Warrant  shall be  governed by and
construed  and  enforced  in  accordance  with the laws of the  State of  Texas,
without  giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Texas or any other  jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of Texas.

         This Warrant has been duly executed by the Company as of the date first
set forth above.

                                                     BASIC EMPIRE CORPORATION



                                                     By: /s/ Glenn A. Little
                                                        ------------------------
                                                        Glenn A. Little
                                                        Chief Executive Officer
























                                       8
<PAGE>

                              EXHIBIT A TO WARRANT

                                SUBSCRIPTION FORM

        TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                            BASIC EMPIRE CORPORATION

         The  undersigned   holder  hereby   exercises  the  right  to  purchase
_________________  of the shares of Common  Stock  ("Warrant  Shares")  of Basic
Empire  Corporation,  a Nevada  corporation  (the  "Company"),  evidenced by the
attached  Warrant  (the  "Warrant").  Capitalized  terms  used  herein  and  not
otherwise defined shall have the respective meanings set forth in the Warrant.

         1. Payment of Warrant  Exercise Price.  The holder shall pay the sum of
$___________________ to the Company in accordance with the terms of the Warrant.

         2. Delivery of Warrant Shares.  The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.

Date:______________  ________ , __________________




Name of Registered Holder

_____________________________

Name:________________________























                                      A-1
<PAGE>

                              EXHIBIT B TO WARRANT

                              FORM OF WARRANT POWER


FOR  VALUE  RECEIVED,  the  undersigned  does  hereby  assign  and  transfer  to
________________,  Federal Identification No. __________,  a warrant to purchase
____________ shares of the capital stock of Basic Empire  Corporation,  a Nevada
corporation,  represented by warrant certificate no. _____, standing in the name
of the undersigned on the books of said corporation. The undersigned does hereby
irrevocably  constitute  and appoint  ______________,  attorney to transfer  the
warrants of said corporation, with full power of substitution in the premises.


Dated:  _______________, 200__

                                              __________________________________
                                              Name:_____________________________






























                                      B-1