Document:

EXHIBIT 10.4

THE SECURITIES  EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
U.S.  SECURITIES ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT"),  OR ANY OTHER
APPLICABLE  SECURITIES  LAWS AND HAVE BEEN ISSUED IN RELIANCE  UPON AN EXEMPTION
FROM  THE  REGISTRATION  REQUIREMENTS  OF THE  SECURITIES  ACT  AND  SUCH  OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION  HEREIN
MAY BE SOLD, ASSIGNED,  TRANSFERRED,  PLEDGED, ENCUMBERED, OR OTHERWISE DISPOSED
OF, EXCEPT PURSUANT TO AN EFFECTIVE  REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO A TRANSACTION  THAT IS EXEMPT FROM SUCH  REGISTRATION.  THESE
SECURITIES AND THE SECURITIES  ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE
PLEDGED IN CONNECTION  WITH A BONA FIDE MARGIN  ACCOUNT OR OTHER LOAN SECURED BY
SUCH SECURITIES.

                             STOCK PURCHASE WARRANT

                  To Purchase 300,000 Shares of Common Stock of

                       PACIFIC MAGTRON INTERNATIONAL CORP.

          THIS  CERTIFIES  that,  for  value  received,  Stonestreet  L.P.  (the
"HOLDER"),  is  entitled,  upon the  terms and  subject  to the  limitations  on
exercise and the conditions  hereinafter  set forth, at any time on or after the
date  hereof  (the  "INITIAL  EXERCISE  DATE")  and on or prior to the  close of
business  on May 31,  2005  (the  "TERMINATION  DATE")  but not  thereafter,  to
subscribe  for  and  purchase  from  Pacific  Magtron   International  Corp.,  a
corporation  incorporated in Nevada (the  "COMPANY"),  up to 300,000 shares (the
"WARRANT  SHARES") of Common  Stock,  $.001 par value per share,  of the Company
(the  "COMMON  STOCK").  The  purchase  price of one share of Common  Stock (the
"Exercise  Price") under this Warrant shall be $1.20. The Exercise Price and the
number of Warrant Shares for which the Warrant is  exercisable  shall be subject
to  adjustment  as  provided  herein.  This is the  Warrant  referred  to in the
Purchase  Agreement (as defined below). In the event of any conflict between the
terms of this Warrant and the Securities  Purchase Agreement dated as of May 31,
2002 pursuant to which this Warrant has been issued (the "PURCHASE  AGREEMENT"),
the Purchase  Agreement shall control.  Capitalized terms used and not otherwise
defined  herein shall have the meanings set forth for such terms in the Purchase
Agreement.

                                       1
<PAGE>
          1. TITLE TO  WARRANT.  Prior to the  Termination  Date and  subject to
compliance  with  applicable  laws,  this Warrant and all rights  hereunder  are
transferable, in whole or in part, at the office or agency of the Company by the
Holder in person or by duly authorized attorney,  upon surrender of this Warrant
together with the Assignment Form annexed hereto properly endorsed.

          2.  AUTHORIZATION  OF SHARES.  The Company  covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights  represented
by this Warrant will, upon exercise of the purchase  rights  represented by this
Warrant,  be duly authorized,  validly issued,  fully paid and nonassessable and
free from all taxes,  liens and charges in respect of the issue  thereof  (other
than taxes in  respect of any  transfer  occurring  contemporaneously  with such
issue).

          3. EXERCISE OF WARRANT.

               (a)  Except as  provided  in  Section 4 herein,  exercise  of the
     purchase  rights  represented  by this  Warrant  may be made at any time or
     times on or after the Initial  Exercise  Date and on or before the close of
     business on the  Termination  Date by the surrender of this Warrant and the
     Notice of Exercise Form annexed hereto duly executed,  at the office of the
     Company (or such other office or agency of the Company as it may  designate
     by notice in writing to the registered Holder at the address of such Holder
     appearing  on the books of the  Company)  and upon  payment of the Exercise
     Price of the shares thereby  purchased by wire transfer or cashier's  check
     drawn on a United  States  bank,  or by means of a cashless  exercise,  the
     Holder shall be entitled to receive a certificate for the number of Warrant
     Shares so purchased.  Certificates for shares purchased  hereunder shall be
     delivered  to the Holder  within  three (3) Trading  Days after the date on
     which this Warrant  shall have been  exercised as  aforesaid.  This Warrant
     shall be deemed to have been exercised and such certificate or certificates
     shall be deemed  to have been  issued,  and  Holder or any other  person so
     designated  to be named  therein shall be deemed to have become a holder of
     record of such shares for all purposes, as of the date the Warrant has been
     exercised  by payment to the  Company of the  Exercise  Price and all taxes
     required to be paid by the Holder,  if any, with respect to the issuance of
     such shares,  have been paid. If the Company fails to deliver to the Holder
     a certificate or certificates  representing  the Warrant Shares pursuant to
     this Section 3(a) by the fifth Trading Day after the date of exercise, then
     the Holder will have the right to rescind such exercise. In addition to any
     other rights  available to the Holder,  if the Company  fails to deliver to
     the Holder a certificate or  certificates  representing  the Warrant Shares
     pursuant  to an  exercise  by the  fifth  Trading  Day  after  the  date of
     exercise,  and if after such fifth Trading Day the Holder  purchases (in an
     open market  transaction or otherwise) shares of Common Stock to deliver in
     satisfaction of a sale by the Holder of the Warrant Shares which the Holder
     anticipated  receiving  upon such exercise (a  "BUY-IN"),  then the Company
     shall (1) pay in cash to the Holder  the  amount by which (x) the  Holder's
     total  purchase price  (including  brokerage  commissions,  if any) for the
     shares of Common  Stock so  purchased  exceeds  (y) the amount  obtained by
     multiplying  (A) the number of Warrant Shares that the Company was required
     to deliver to the Holder in connection with the exercise at issue times (B)

                                       2
<PAGE>
     the  closing  bid price of the Common  Stock at the time of the  obligation
     giving  rise to such  purchase  obligation,  and (2) at the  option  of the
     Holder,  either reinstate the portion of the Warrant and equivalent  number
     of Warrant Shares for which such exercise was not honored or deliver to the
     Holder the number of shares of Common Stock that would have been issued had
     the Company  timely  complied  with its exercise  and delivery  obligations
     hereunder. For example, if the Holder purchases Common Stock having a total
     purchase  price of $11,000 to cover a Buy-In with  respect to an  attempted
     exercise  of  shares  of Common  Stock  with a market  price on the date of
     exercise  totaled  $10,000,  under clause (1) of the immediately  preceding
     sentence the Company shall be required to pay the Holder $1,000. The Holder
     shall provide the Company written notice  indicating the amounts payable to
     the Holder in respect of the Buy-In.  Nothing herein shall limit a Holder's
     right to pursue any other remedies available to it hereunder,  at law or in
     equity  including,  without  limitation,  a decree of specific  performance
     and/or  injunctive  relief with respect to the Company's  failure to timely
     deliver  certificates  representing shares of Common Stock upon exercise of
     the Warrant as required pursuant to the terms hereof.

               (b) If this  Warrant  shall  have  been  exercised  in part,  the
     Company shall,  at the time of delivery of the  certificate or certificates
     representing Warrant Shares, deliver to Holder a new Warrant evidencing the
     rights of Holder to purchase the  unpurchased  Warrant Shares called for by
     this Warrant,  which new Warrant  shall in all other  respects be identical
     with this Warrant.

               (c)  This  Warrant  shall  also  be  exercisable  by  means  of a
     "cashless  exercise"  in which the Holder  shall be  entitled  to receive a
     certificate for the number of Warrant Shares equal to the quotient obtained
     by dividing [(A-B) (X)] by (A), where:

               (A) = the average of the high and low trading prices per share of
               Common  Stock  on the  Trading  Day  preceding  the  date of such
               election on the Principal Market;

               (B) = the Exercise Price of this Warrant; and

               (X) = the number of Warrant Shares issuable upon exercise of this
               Warrant  in  accordance  with the terms of this  Warrant  and the
               Notice of Exercise.

               (d) Notwithstanding  anything herein to the contrary, in no event
     shall the Holder be permitted to exercise  this Warrant for Warrant  Shares
     to the extent  that (i) the number of shares of Common  Stock owned by such
     Holder (other than Warrant  Shares  issuable upon exercise of this Warrant)
     plus (ii) the number of  Warrant  Shares  issuable  upon  exercise  of this
     Warrant, would be equal to or exceed 4.9% of the number of shares of Common
     Stock then issued and outstanding,  including shares issuable upon exercise
     of this Warrant held by such Holder after application of this Section 3(d).
     As used herein, beneficial ownership shall be determined in accordance with
     Section  13(d) of the  Exchange  Act.  To the  extent  that the  limitation
     contained in this Section 3(d) applies,  the  determination of whether this
     Warrant  is  exercisable  (in  relation  to other  securities  owned by the

                                       3
<PAGE>
     Holder) and of which a portion of this Warrant is  exercisable  shall be in
     the sole  discretion  of such  Holder,  and the  submission  of a Notice of
     Exercise shall be deemed to be such Holder's  determination of whether this
     Warrant is  exercisable  (in  relation  to other  securities  owned by such
     Holder) and of which portion of this Warrant is  exercisable,  in each case
     subject to such aggregate percentage limitation, and the Company shall have
     no  obligation  to verify or confirm the  accuracy  of such  determination.
     Nothing  contained herein shall be deemed to restrict the right of a Holder
     to exercise this Warrant into Warrant  Shares at such time as such exercise
     will not violate the  provisions  of this Section 3(d).  The  provisions of
     this Section 3(d) may be waived by the Holder upon,  at the election of the
     Holder,  with not less than 61 days' prior notice to the  Company,  and the
     provisions of this Section 3(d) shall continue to apply until such 61st day
     (or such later  date as may be  specified  in such  notice of  waiver).  No
     exercise of this Warrant in violation of this Section 3(d) but otherwise in
     accordance  with this Warrant shall affect the status of the Warrant Shares
     as validly issued, fully-paid and nonassessable.

          4. NO  FRACTIONAL  SHARES  OR  SCRIP.  No  fractional  shares or scrip
representing  fractional  shares  shall  be  issued  upon the  exercise  of this
Warrant.  As to any fraction of a share which Holder would otherwise be entitled
to purchase  upon such  exercise,  the Company  shall pay a cash  adjustment  in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

          5. CHARGES,  TAXES AND EXPENSES.  Issuance of certificates for Warrant
Shares shall be made without  charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate,  all
of which taxes and expenses shall be paid by the Company,  and such certificates
shall be  issued  in the name of the  Holder  or in such name or names as may be
directed by the Holder;  PROVIDED,  HOWEVER,  that in the event certificates for
Warrant  Shares are to be issued in a name  other  than the name of the  Holder,
this  Warrant  when  surrendered  for  exercise  shall  be  accompanied  by  the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

          6. CLOSING OF BOOKS. The Company will not close its stockholder  books
or records in any manner which prevents the timely exercise of this Warrant.

          7. TRANSFER, DIVISION AND COMBINATION.

               (a)  Subject to compliance with any applicable  securities  laws,
     transfer  of this  Warrant and all rights  hereunder,  in whole or in part,
     shall be registered  on the books of the Company to be maintained  for such
     purpose,  upon  surrender  of this Warrant at the  principal  office of the
     Company,  together with a written assignment of this Warrant  substantially
     in the form  attached  hereto  duly  executed by the Holder or its agent or
     attorney and funds  sufficient  to pay any transfer  taxes payable upon the
     making of such  transfer.  Upon  such  surrender  and,  if  required,  such
     payment, the Company shall execute and deliver a new Warrant or Warrants in
     the  name  of  the  assignee  or  assignees  and  in  the  denomination  or
     denominations  specified in such instrument of assignment,  and shall issue
     to the assignor a new Warrant evidencing the portion of this Warrant not so

                                       4
<PAGE>
     assigned,  and this Warrant  shall  promptly be  cancelled.  A Warrant,  if
     properly  assigned,  may be  exercised  by a new holder for the purchase of
     Warrant Shares without having a new Warrant issued.

               (b) This Warrant may be divided or combined  with other  Warrants
     upon presentation  hereof at the aforesaid office of the Company,  together
     with a written notice  specifying the names and  denominations in which new
     Warrants  are to be issued,  signed by the Holder or its agent or attorney.
     Subject to compliance  with Section  7(a), as to any transfer  which may be
     involved in such  division or  combination,  the Company  shall execute and
     deliver a new Warrant or  Warrants in exchange  for the Warrant or Warrants
     to be divided or combined in accordance with such notice.

               (c) The  Company  shall  prepare,  issue and  deliver  at its own
     expense (other than transfer  taxes) the new Warrant or Warrants under this
     Section 7.

               (d) The Company  agrees to  maintain,  at its  aforesaid  office,
     books  for  the  registration  and  the  registration  of  transfer  of the
     Warrants.

          8. NO RIGHTS AS  SHAREHOLDER  UNTIL  EXERCISE.  This  Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder  of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price or by means of a cashless exercise,  the
Warrant  Shares so purchased  shall be and be deemed to be issued to such Holder
as the record  owner of such  shares as of the close of business on the later of
the date of such surrender or payment.

          9. LOSS,  THEFT,  DESTRUCTION  OR MUTILATION  OF WARRANT.  The Company
covenants that upon receipt by the Company of evidence  reasonably  satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate  relating  to the  Warrant  Shares,  and in case of  loss,  theft or
destruction, of indemnity or security reasonably satisfactory to it (which shall
not include the posting of any bond),  and upon  surrender and  cancellation  of
such  Warrant or stock  certificate,  if  mutilated,  the Company  will make and
deliver a new  Warrant or stock  certificate  of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

          10. SATURDAYS,  SUNDAYS,  HOLIDAYS,  ETC. If the last or appointed day
for the taking of any action or the  expiration of any right required or granted
herein shall be a Saturday,  Sunday or a legal holiday,  then such action may be
taken or such right may be exercised on the next  succeeding day not a Saturday,
Sunday or legal holiday.

          11. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.

               (a)  STOCK  SPLITS,  ETC.  The  number  and  kind  of  securities
     purchasable  upon the exercise of this Warrant and the Exercise Price shall
     be subject to adjustment from time to time upon the happening of any of the
     following. In case the Company shall (i) pay a dividend in shares of Common
     Stock or make a  distribution  in shares of Common  Stock to holders of its
     outstanding  Common Stock, (ii) subdivide its outstanding  shares of Common
     Stock into a greater number of shares, (iii) combine its outstanding shares

                                       5
<PAGE>
     of Common Stock into a smaller  number of shares of Common  Stock,  or (iv)
     issue any shares of its capital stock in a  reclassification  of the Common
     Stock, then the number of Warrant Shares  purchasable upon exercise of this
     Warrant  immediately  prior  thereto  shall be  adjusted so that the Holder
     shall be entitled to receive the kind and number of Warrant Shares or other
     securities  of the Company  which it would have owned or have been entitled
     to receive had such Warrant been  exercised in advance  thereof.  Upon each
     such  adjustment  of the  kind  and  number  of  Warrant  Shares  or  other
     securities of the Company which are purchasable hereunder, the Holder shall
     thereafter  be entitled to purchase  the number of Warrant  Shares or other
     securities  resulting from such adjustment at an Exercise Price per Warrant
     Share or other  security  obtained by  multiplying  the  Exercise  Price in
     effect immediately prior to such adjustment by the number of Warrant Shares
     purchasable  pursuant  hereto  immediately  prior  to such  adjustment  and
     dividing by the number of Warrant Shares or other securities of the Company
     resulting  from  such  adjustment.  An  adjustment  made  pursuant  to this
     paragraph shall become  effective  immediately  after the effective date of
     such event retroactive to the record date, if any, for such event.

               (b)  ANTI-DILUTION  PROVISIONS.  During the Exercise Period,  the
     Exercise Price and the number of Warrant Shares issuable  hereunder and for
     which this Warrant is then  exercisable  pursuant to Section 1 hereof shall
     be subject to  adjustment  from time to time as  provided  in this  Section
     11(b).  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 or down to the nearest cent.

               (i) ADJUSTMENT OF EXERCISE PRICE. If the Company issues or sells,
          or is deemed to have issued or sold,  any shares of Common Stock for a
          consideration  per  share of less  than the then  applicable  Exercise
          Price (the "BASE SHARE PRICE") or for no consideration  (collectively,
          a "DILUTIVE ISSUANCE"),  then effective immediately upon each Dilutive
          Issuance,  the  Exercise  Price will be  reduced so that the  Exercise
          Price  will  equal  the  greater  of  the  Exercise  Price  in  effect
          immediately prior to the Dilutive Issuance multiplied by 0.8333 or the
          Base Share Price.

               (ii) EFFECT ON EXERCISE PRICE OF CERTAIN EVENTS.  For purposes of
          determining  the adjusted  Exercise  Price under Section 11(b) hereof,
          the following will be applicable:

                    (A)  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 exercisable, 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  Exercise  Price
               ("BELOW BASE PRICE  OPTIONS"),  then the maximum  total number of
               shares of Common  Stock  issuable  upon the  exercise of all such
               Below Base Price Options  (assuming full exercise,  conversion or
               exchange of Convertible  Securities,  if applicable)  will, as of

                                       6
<PAGE>
               the  date of the  issuance  or  grant of such  Below  Base  Price
               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 Below Base Price  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 Below Base Price  Options,  plus the minimum
               aggregate amount of additional consideration,  if any, payable to
               the  Company  upon the  exercise  of all such  Below  Base  Price
               Options,  plus, in the case of  Convertible  Securities  issuable
               upon the exercise of such Below Base Price  Options,  the minimum
               aggregate  amount of  additional  consideration  payable upon the
               exercise,  conversion  or  exchange  thereof  at  the  time  such
               Convertible  Securities first become exercisable,  convertible or
               exchangeable,  by (ii) the  maximum  total  number  of  shares of
               Common  Stock  issuable  upon the exercise of all such Below Base
               Price  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 Below Base Price  Options or upon the
               exercise,   conversion  or  exchange  of  Convertible  Securities
               issuable upon exercise of such Below Base Price Options.

                    (B) 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 exercise, conversion
               or exchange  is less than the  Exercise  Price,  then the maximum
               total  number  of  shares  of  Common  Stock  issuable  upon  the
               exercise,   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 exercise,  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 exercise,  conversion or exchange
               thereof  at the time such  Convertible  Securities  first  become
               exercisable,  convertible  or  exchangeable,  by (ii) the maximum
               total  number  of  shares  of  Common  Stock  issuable  upon  the
               exercise,   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 exercise,
               conversion or exchange of such Convertible Securities.

                                       7
<PAGE>
                    (C) 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  exercise,   conversion  or  exchange  of  any
               Convertible   Securities;   or  (iii)   the  rate  at  which  any
               Convertible  Securities are convertible  into or exchangeable for
               Common Stock (in each such case, 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.

                    (D) 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  exercise,
               conversion or exchange of any  Convertible  Securities is not, in
               fact,  issued  and the  rights  to  exercise  such  Option  or to
               exercise,  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.

                    (E)  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 market
               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  date of  receipt.  In case  any  Common  Stock,  Options  or
               Convertible  Securities are issued in connection  with any merger
               or   consolidation   in  which  the  Company  is  the   surviving
               corporation,  the amount of consideration therefor will be deemed
               to be the fair market 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

                                       8
<PAGE>
               may be. The fair  market  value of any  consideration  other than
               cash  or  securities  will be  determined  in  good  faith  by an
               investment  banker  or  other  appropriate   expert  of  national
               reputation  selected by the Company and reasonably  acceptable to
               the holder  hereof,  with the costs of such appraisal to be borne
               by the Company.

                    (F)   EXCEPTIONS  TO  ADJUSTMENT  OF  EXERCISE   PRICE.   No
               adjustment  to the  Exercise  Price  will be made  (i)  upon  the
               exercise of this  Warrant or any other  warrant of this series or
               of any other series issued by the Company in connection  with the
               offer  and  sale of this  Company's  securities  pursuant  to the
               Purchase  Agreement;  (ii) upon the exercise of or  conversion of
               any  Convertible  Securities,  options  or  warrants  issued  and
               outstanding on the initial  issuance date of this Warrant;  (iii)
               upon the grant or exercise of any  Convertible  Securities  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 Convertible Securities is
               approved by a majority of the  non-employee  members of the Board
               of  Directors  of the  Company or a majority  of the members of a
               committee of non-employee directors established for such purpose;
               (iv) upon the issuance of Common Stock or Convertible  Securities
               in any  transaction  of the  nature  contemplated  by  Rule  145,
               promulgated  under the Securities  Act; or (v) in connection with
               any strategic  partnership or joint venture or acquisition or key
               consulting  agreements  (the  primary  purpose of which is not to
               raise equity capital for the Company).

               (iii)  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, provided that such notice shall not contain
          any  material  nonpublic   information.   Such  calculation  shall  be
          certified by the chief financial officer of the Company.

               (iv) 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.

               (v) CERTAIN DEFINITIONS.  "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),

                                       9
<PAGE>
          plus (x) in the case of any  adjustment  hereunder  resulting from the
          issuance of any Options,  the maximum total number of shares of Common
          Stock  issuable  upon  the  exercise  of the  Options  for  which  the
          adjustment is required  (including  any Common Stock issuable upon the
          conversion  of  Convertible  Securities  issuable upon the exercise of
          such  Options),  and  (y)  in the  case  of  any  adjustment  required
          hereunder  resulting from the issuance of any Convertible  Securities,
          the maximum  total number of shares of Common Stock  issuable upon the
          exercise,  conversion or exchange of the  Convertible  Securities  for
          which the  adjustment is required,  as of the date of issuance of such
          Convertible Securities, if any.

               (c) VOLUNTARY  ADJUSTMENT BY THE COMPANY.  The Company may at any
     time during the term of this Warrant reduce the then current Exercise Price
     to any amount and for any period of time deemed appropriate by the Board of
     Directors of the Company.

               (d) NOTICE OF  ADJUSTMENT.  Whenever the number of Warrant Shares
     or number or kind of  securities  or other  property  purchasable  upon the
     exercise  of this  Warrant or the  Exercise  Price is  adjusted,  as herein
     provided,  the Company shall promptly mail by registered or certified mail,
     return  receipt  requested,  to the  Holder  notice of such  adjustment  or
     adjustments   setting  forth  the  number  of  Warrant  Shares  (and  other
     securities or property)  purchasable  upon the exercise of this Warrant and
     the  Exercise  Price  of such  Warrant  Shares  (and  other  securities  or
     property)  after such  adjustment,  setting forth a brief  statement of the
     facts  requiring such adjustment and setting forth the computation by which
     such  adjustment was made.  Such notice,  in the absence of manifest error,
     shall be conclusive evidence of the correctness of such adjustment.

          12.  REORGANIZATION,   RECLASSIFICATION,   MERGER,   CONSOLIDATION  OR
DISPOSITION  OF  ASSETS.  In case the  Company  shall  reorganize  its  capital,
reclassify  its  capital  stock,  consolidate  or  merge  with or  into  another
corporation  (where the Company is not the surviving  corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business  to another  corporation  and,  pursuant to the terms of such
reorganization,   reclassification,  merger,  consolidation  or  disposition  of
assets, shares of common stock of the successor or acquiring corporation, or any
cash,  shares of stock or other securities or property of any nature  whatsoever
(including  warrants or other subscription or purchase rights) in addition to or
in lieu of  common  stock of the  successor  or  acquiring  corporation  ("Other
Property"),  are to be received by or distributed to the holders of Common Stock
of the Company,  then the Holder shall have the right thereafter to receive,  at
their option, (a) upon exercise of this Warrant,  the number of shares of Common
Stock of the successor or acquiring  corporation or of the Company, if it is the
surviving corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a Holder of the number of shares of Common  Stock for which  this  Warrant is
exercisable  immediately  prior to such event, or (b) cash equal to the value of
this Warrant as determined in accordance  with the  Black-Sholes  option pricing
formula.  In  case  of  any  such  reorganization,   reclassification,   merger,
consolidation or disposition of assets,  the successor or acquiring  corporation
(if  other  than  the  Company)  shall  expressly  assume  the due and  punctual
observance  and  performance  of each and every  covenant and  condition of this

                                       10
<PAGE>
Warrant to be performed and observed by the Company and all the  obligations and
liabilities   hereunder,   subject  to  such  modifications  as  may  be  deemed
appropriate (as determined in good faith by resolution of the Board of Directors
of the Company) in order to provide for  adjustments of Warrant Shares for which
this Warrant is exercisable  which shall be as nearly  equivalent as practicable
to the adjustments provided for in this Section 12. For purposes of this Section
12, "common stock of the successor or acquiring corporation" shall include stock
of such  corporation  of any class which is not  preferred  as to  dividends  or
assets  over any  other  class of stock  of such  corporation  and  which is not
subject to  redemption  and shall also include any  evidences  of  indebtedness,
shares of stock or other  securities  which are convertible into or exchangeable
for any such stock,  either  immediately or upon the arrival of a specified date
or the  happening  of a  specified  event and any  warrants  or other  rights to
subscribe  for or purchase  any such stock.  The  foregoing  provisions  of this
Section   12   shall    similarly    apply   to   successive    reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

          13. NOTICE OF CORPORATE ACTION. If at any time:

               (a) the Company  shall take a record of the holders of its Common
     Stock for the  purpose of  entitling  them to  receive a dividend  or other
     distribution,  or any right to subscribe  for or purchase any  evidences of
     its indebtedness,  any shares of stock of any class or any other securities
     or property, or to receive any other right, or

               (b) there shall be any capital reorganization of the Company, any
     reclassification or recapitalization of the capital stock of the Company or
     any  consolidation or merger of the Company with, or any sale,  transfer or
     other  disposition  of all or  substantially  all the  property,  assets or
     business of the Company to, another corporation or,

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

then,  in any one or more of such cases,  the Company  shall give to Holder,  if
lawful to do so, (i) at least 20 days' prior written notice of the date on which
a record date shall be selected for such dividend,  distribution or right or for
determining   rights   to  vote  in   respect   of  any   such   reorganization,
reclassification,    merger,   consolidation,   sale,   transfer,   disposition,
liquidation  or  winding  up,  and (ii) in the case of any such  reorganization,
reclassification,    merger,   consolidation,   sale,   transfer,   disposition,
dissolution,  liquidation  or winding up, at least 20 days' prior written notice
of the date when the same shall take place.  Such notice in accordance  with the
foregoing  clause also shall specify (i) the date on which any such record is to
be taken for the purpose of such dividend,  distribution  or right,  the date on
which the  holders  of Common  Stock  shall be  entitled  to any such  dividend,
distribution or right, and the amount and character  thereof,  and (ii) the date
on which any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition,  dissolution,  liquidation or winding up is to take place
and the time, if any such time is to be fixed, as of which the holders of Common
Stock shall be entitled to exchange their Warrant Shares for securities or other
property deliverable upon such disposition,  dissolution, liquidation or winding
up. Each such written notice shall be sufficiently  given if addressed to Holder

                                       11
<PAGE>
at the  last  address  of  Holder  appearing  on the  books of the  Company  and
delivered in accordance with Section 16(d).

          14.  AUTHORIZED  SHARES.  The Company covenants that during the period
the Warrant is  outstanding,  it will reserve from its  authorized  and unissued
Common  Stock a  sufficient  number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant.  The
Company  further  covenants  that its issuance of this Warrant shall  constitute
full authority to its officers who are charged with the duty of executing  stock
certificates  to execute and issue the  necessary  certificates  for the Warrant
Shares upon the exercise of the purchase rights under this Warrant.  The Company
will take all such  reasonable  action as may be  necessary  to assure that such
Warrant  Shares  may be issued  as  provided  herein  without  violation  of any
applicable law or regulation,  or of any  requirements  of the Principal  Market
upon which the Common Stock may be listed.

               The  Company  shall  not  by  any  action,   including,   without
limitation,   amending  its   certificate  of   incorporation   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 of this Warrant,  but will at all
times in good  faith  assist in the  carrying  out of all such  terms and in the
taking of all such  actions as may be necessary  or  appropriate  to protect the
rights of Holder  against  impairment.  Without  limiting the  generality of the
foregoing, the Company will (a) not increase the par value of any Warrant Shares
above the amount payable therefor upon such exercise  immediately  prior to such
increase  in par  value,  (b)  take  all  such  action  as may be  necessary  or
appropriate  in order that the Company may validly and legally  issue fully paid
and nonassessable  Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having  jurisdiction  thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.

               Before  taking any action which would result in an  adjustment in
the number of Warrant  Shares for which this  Warrant is  exercisable  or in the
Exercise Price, the Company shall obtain all such  authorizations  or exemptions
thereof,  or consents  thereto,  as may be necessary from any public  regulatory
body or bodies having jurisdiction thereof.

          15. MISCELLANEOUS.

               (a) JURISDICTION.  This Warrant shall constitute a contract under
     the laws of New York, without regard to its conflict of law,  principles or
     rules, and be subject to arbitration pursuant to the terms set forth in the
     Purchase Agreement.

               (b) RESTRICTIONS. The Holder acknowledges that the Warrant Shares
     acquired upon the exercise of this Warrant,  if not  registered,  will have
     restrictions upon resale imposed by state and federal securities laws.

               (c) NONWAIVER AND EXPENSES.  No course of dealing or any delay or
     failure to exercise any right hereunder on the part of Holder shall operate
     as a waiver of such right or otherwise prejudice Holder's rights, powers or
     remedies, notwithstanding all rights hereunder terminate on the Termination

                                       12
<PAGE>
     Date.  If the  Company  willfully  and  knowingly  fails to comply with any
     provision of this  Warrant,  which  results in any material  damages to the
     Holder, the Company shall pay to Holder such amounts as shall be sufficient
     to cover any costs and expenses  including,  but not limited to, reasonable
     attorneys'  fees,  including  those of appellate  proceedings,  incurred by
     Holder in  collecting  any  amounts  due  pursuant  hereto or in  otherwise
     enforcing any of its rights, powers or remedies hereunder.

               (d) NOTICES.  Any notice,  request or other document  required or
     permitted to be given or  delivered  to the Holder by the Company  shall be
     delivered  in  accordance  with  the  notice  provisions  of  the  Purchase
     Agreement.

               (e) LIMITATION OF LIABILITY.  No provision hereof, in the absence
     of  affirmative  action  by  Holder  to  purchase  Warrant  Shares,  and no
     enumeration  herein of the rights or privileges of Holder,  shall give rise
     to any liability of Holder for the purchase price of any Common Stock or as
     a  stockholder  of the Company,  whether such  liability is asserted by the
     Company or by creditors of the Company.

               (f) REMEDIES.  Holder,  in addition to being entitled to exercise
     all rights granted by law, including recovery of damages,  will be entitled
     to  specific  performance  of its rights  under this  Warrant.  The Company
     agrees that  monetary  damages would not be adequate  compensation  for any
     loss incurred by reason of a breach by it of the provisions of this Warrant
     and  hereby  agrees  to  waive  the  defense  in any  action  for  specific
     performance that a remedy at law would be adequate.

               (g) SUCCESSORS AND ASSIGNS. Subject to applicable securities laws
     and the  provisions  of this  Warrant,  this  Warrant  and the  rights  and
     obligations  evidenced  hereby shall inure to the benefit of and be binding
     upon the successors of the Company and the successors and permitted assigns
     of Holder.  The  provisions  of this  Warrant  are  intended  to be for the
     benefit  of all  Holders  from  time to time of this  Warrant  and shall be
     enforceable by any such Holder or holder of Warrant Shares.

               (h)  AMENDMENT.  This  Warrant  may be modified or amended or the
     provisions  hereof  waived with the written  consent of the Company and the
     Holder.

               (i)  SEVERABILITY.  Wherever  possible,  each  provision  of this
     Warrant  shall be  interpreted  in such manner as to be effective and valid
     under  applicable  law,  but if any  provision  of this  Warrant  shall  be
     prohibited by or invalid under  applicable  law,  such  provision  shall be
     ineffective  to the  extent  of such  prohibition  or  invalidity,  without
     invalidating  the remainder of such provisions or the remaining  provisions
     of this Warrant.

               (j)  HEADINGS.  The  headings  used in this  Warrant  are for the
     convenience of reference  only and shall not, for any purpose,  be deemed a
     part of this Warrant.

                                       13
<PAGE>
          IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.

Dated: May 31, 2002
                                        PACIFIC MAGTRON INTERNATIONAL CORP.

                                        By: /s/ Theodore S. Li
                                            ------------------------------------
                                            Name: Theodore S. Li
                                            Title: Chairman of the Board and
                                                   President

                                       14
<PAGE>
                               NOTICE OF EXERCISE

To:  Pacific Magtron International Corp.

          (1) The undersigned  hereby elects to purchase ________ Warrant Shares
(the "Common Stock"),  of Pacific Magtron  International  Corp.  pursuant to the
terms of the  attached  Warrant,  and tenders  herewith  payment of the exercise
price in full, together with all applicable transfer taxes, if any.

          (2) Please  issue a  certificate  or  certificates  representing  said
Warrant  Shares  in the  name of the  undersigned  or in such  other  name as is
specified below:

                ________________________________________________

The Warrant Shares shall be delivered to the following:

                ________________________________________________

                ________________________________________________

                ________________________________________________

                                        [PURCHASER]

                                        By: ____________________________________
                                            Name:
                                            Title:

                                        Dated: _________________________________
<PAGE>
                   NOTICE OF EXERCISE OF COMMON STOCK WARRANT
                    PURSUANT TO CASHLESS EXERCISE PROVISIONS

To: Pacific Magtron International Corp.

Aggregate Price of Warrant Before Exercise: $______
Aggregate Price Being Exercised: $______
Exercise Price: $______ per share
Number of Shares of Common Stock to be Issued Under this Notice: ______
Remaining Aggregate Price (if any) After Issuance: $______

Gentlemen:

The undersigned,  registered  Holder of the Warrant delivered  herewith,  hereby
irrevocably exercises such Warrant for, and purchases thereunder,  shares of the
Common Stock of Pacific Magtron  International  Corp. a Nevada  corporation,  as
provided below.  Capitalized terms used herein, unless otherwise defined herein,
shall have the meanings given in the Warrant.  The portion of the Exercise Price
(as defined in the  Warrant) to be applied  toward the  purchase of Common Stock
pursuant to this Notice of Exercise  is  $_______,  thereby  leaving a remaining
Exercise  Price (if any) equal to $________.  Such exercise shall be pursuant to
the cashless exercise provisions of Section 3 of the Warrant;  therefore, Holder
makes no payment with this Notice of Exercise. The number of shares to be issued
pursuant to this  exercise  shall be  determined  by reference to the formula in
Section 3 of the Warrant  which,  by reference to Section 3, requires the use of
the high and low trading price of the Company's  Common Stock on the Trading Day
preceding  the date of such  election.  The high  and low  trading  price of the
Company's  Common  Stock  has  been  determined  by  Holder  to be  $______  and
$_________,  respectively, which figure is acceptable to Holder for calculations
of the number of shares of Common  Stock  issuable  pursuant  to this  Notice of
Exercise.  Holder  requests that the  certificates  for the purchased  shares of
Common Stock be issued in the name of _________________________ and delivered to
______________________________________________.  To  the  extent  the  foregoing
exercise is for less than the full Aggregate Price of the Warrant, a replacement
Warrant representing the remainder of the Aggregate Price (and otherwise of like
form,  tenor and  effect)  shall be  delivered  to Holder  along  with the share
certificate  evidencing  the Common  Stock  issued in response to this Notice of
Exercise.

                                        [Purchaser]

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

                                        Date:

                                      NOTE

     The execution to the foregoing  Notice of Exercise must exactly  correspond
to the name of the Holder on the Warrant

                                        2
<PAGE>
                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

          FOR VALUE  RECEIVED,  the foregoing  Warrant and all rights  evidenced
thereby are hereby assigned to

_______________________________________________________________ whose address is

_______________________________________________________________________________.

________________________________________________________________________________

                                        Dated: _______________________, ________

          Holder's Signature: ________________________________________

          Holder's Address: __________________________________________

                            __________________________________________

Signature Guaranteed: ___________________________________________

NOTE: The signature to this  Assignment Form must correspond with the name as it
appears on the face of the Warrant,  without  alteration or  enlargement  or any
change whatsoever,  and must be guaranteed by a bank or trust company.  Officers
of  corporations  and  those  acting  in an  fiduciary  or other  representative
capacity  should  file  proper  evidence of  authority  to assign the  foregoing
Warrant.EXHIBIT 10.5

THE SECURITIES  EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
U.S.  SECURITIES ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT"),  OR ANY OTHER
APPLICABLE  SECURITIES  LAWS AND HAVE BEEN ISSUED IN RELIANCE  UPON AN EXEMPTION
FROM  THE  REGISTRATION  REQUIREMENTS  OF THE  SECURITIES  ACT  AND  SUCH  OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION  HEREIN
MAY BE SOLD, ASSIGNED,  TRANSFERRED,  PLEDGED, ENCUMBERED, OR OTHERWISE DISPOSED
OF, EXCEPT PURSUANT TO AN EFFECTIVE  REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO A TRANSACTION  THAT IS EXEMPT FROM SUCH  REGISTRATION.  THESE
SECURITIES AND THE SECURITIES  ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE
PLEDGED IN CONNECTION  WITH A BONA FIDE MARGIN  ACCOUNT OR OTHER LOAN SECURED BY
SUCH SECURITIES.

                             STOCK PURCHASE WARRANT

                  To Purchase 100,000 Shares of Common Stock of

                       PACIFIC MAGTRON INTERNATIONAL CORP.

          THIS CERTIFIES that, for value received, M.H. Meyerson (the "HOLDER"),
is entitled,  upon the terms and subject to the  limitations on exercise and the
conditions  hereinafter  set forth, at any time on or after the date hereof (the
"INITIAL  EXERCISE  DATE") and on or prior to the close of  business  on May 31,
2005 (the "TERMINATION DATE") but not thereafter,  to subscribe for and purchase
from Pacific Magtron  International Corp., a corporation  incorporated in Nevada
(the  "COMPANY"),  up to 100,000 shares (the "WARRANT  SHARES") of Common Stock,
$.001 par value per share,  of the Company  (the "COMMON  STOCK").  The purchase
price of one share of Common  Stock (the  "Exercise  Price")  under this Warrant
shall be $1.20.  The Exercise  Price and the number of Warrant  Shares for which
the Warrant is  exercisable  shall be subject to adjustment as provided  herein.
This is the Warrant referred to in the Purchase Agreement (as defined below). In
the event of any conflict  between the terms of this Warrant and the  Securities
Purchase  Agreement  dated as of May 31, 2002 pursuant to which this Warrant has
been issued (the "PURCHASE  AGREEMENT"),  the Purchase  Agreement shall control.
Capitalized  terms used and not otherwise defined herein shall have the meanings
set forth for such terms in the Purchase Agreement.

                                       1
<PAGE>
          1. TITLE TO  WARRANT.  Prior to the  Termination  Date and  subject to
compliance  with  applicable  laws,  this Warrant and all rights  hereunder  are
transferable, in whole or in part, at the office or agency of the Company by the
Holder in person or by duly authorized attorney,  upon surrender of this Warrant
together with the Assignment Form annexed hereto properly endorsed.

          2.  AUTHORIZATION  OF SHARES.  The Company  covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights  represented
by this Warrant will, upon exercise of the purchase  rights  represented by this
Warrant,  be duly authorized,  validly issued,  fully paid and nonassessable and
free from all taxes,  liens and charges in respect of the issue  thereof  (other
than taxes in  respect of any  transfer  occurring  contemporaneously  with such
issue).

          3. EXERCISE OF WARRANT.

               (a)  Except as  provided  in  Section 4 herein,  exercise  of the
     purchase  rights  represented  by this  Warrant  may be made at any time or
     times on or after the Initial  Exercise  Date and on or before the close of
     business on the  Termination  Date by the surrender of this Warrant and the
     Notice of Exercise Form annexed hereto duly executed,  at the office of the
     Company (or such other office or agency of the Company as it may  designate
     by notice in writing to the registered Holder at the address of such Holder
     appearing  on the books of the  Company)  and upon  payment of the Exercise
     Price of the shares thereby  purchased by wire transfer or cashier's  check
     drawn on a United  States  bank,  or by means of a cashless  exercise,  the
     Holder shall be entitled to receive a certificate for the number of Warrant
     Shares so purchased.  Certificates for shares purchased  hereunder shall be
     delivered  to the Holder  within  three (3) Trading  Days after the date on
     which this Warrant  shall have been  exercised as  aforesaid.  This Warrant
     shall be deemed to have been exercised and such certificate or certificates
     shall be deemed  to have been  issued,  and  Holder or any other  person so
     designated  to be named  therein shall be deemed to have become a holder of
     record of such shares for all purposes, as of the date the Warrant has been
     exercised  by payment to the  Company of the  Exercise  Price and all taxes
     required to be paid by the Holder,  if any, with respect to the issuance of
     such shares,  have been paid. If the Company fails to deliver to the Holder
     a certificate or certificates  representing  the Warrant Shares pursuant to
     this Section 3(a) by the fifth Trading Day after the date of exercise, then
     the Holder will have the right to rescind such exercise. In addition to any
     other rights  available to the Holder,  if the Company  fails to deliver to
     the Holder a certificate or  certificates  representing  the Warrant Shares
     pursuant  to an  exercise  by the  fifth  Trading  Day  after  the  date of
     exercise,  and if after such fifth Trading Day the Holder  purchases (in an
     open market  transaction or otherwise) shares of Common Stock to deliver in
     satisfaction of a sale by the Holder of the Warrant Shares which the Holder
     anticipated  receiving  upon such exercise (a  "BUY-IN"),  then the Company
     shall (1) pay in cash to the Holder  the  amount by which (x) the  Holder's
     total  purchase price  (including  brokerage  commissions,  if any) for the
     shares of Common  Stock so  purchased  exceeds  (y) the amount  obtained by
     multiplying  (A) the number of Warrant Shares that the Company was required
     to deliver to the Holder in connection with the exercise at issue times (B)

                                       2
<PAGE>
     the  closing  bid price of the Common  Stock at the time of the  obligation
     giving  rise to such  purchase  obligation,  and (2) at the  option  of the
     Holder,  either reinstate the portion of the Warrant and equivalent  number
     of Warrant Shares for which such exercise was not honored or deliver to the
     Holder the number of shares of Common Stock that would have been issued had
     the Company  timely  complied  with its exercise  and delivery  obligations
     hereunder. For example, if the Holder purchases Common Stock having a total
     purchase  price of $11,000 to cover a Buy-In with  respect to an  attempted
     exercise  of  shares  of Common  Stock  with a market  price on the date of
     exercise  totaled  $10,000,  under clause (1) of the immediately  preceding
     sentence the Company shall be required to pay the Holder $1,000. The Holder
     shall provide the Company written notice  indicating the amounts payable to
     the Holder in respect of the Buy-In.  Nothing herein shall limit a Holder's
     right to pursue any other remedies available to it hereunder,  at law or in
     equity  including,  without  limitation,  a decree of specific  performance
     and/or  injunctive  relief with respect to the Company's  failure to timely
     deliver  certificates  representing shares of Common Stock upon exercise of
     the Warrant as required pursuant to the terms hereof.

               (b) If this  Warrant  shall  have  been  exercised  in part,  the
     Company shall,  at the time of delivery of the  certificate or certificates
     representing Warrant Shares, deliver to Holder a new Warrant evidencing the
     rights of Holder to purchase the  unpurchased  Warrant Shares called for by
     this Warrant,  which new Warrant  shall in all other  respects be identical
     with this Warrant.

               (c)  This  Warrant  shall  also  be  exercisable  by  means  of a
     "cashless  exercise"  in which the Holder  shall be  entitled  to receive a
     certificate for the number of Warrant Shares equal to the quotient obtained
     by dividing [(A-B) (X)] by (A), where:

               (A) = the average of the high and low trading prices per share of
               Common  Stock  on the  Trading  Day  preceding  the  date of such
               election on the Principal Market;

               (B) = the Exercise Price of this Warrant; and

               (X) = the number of Warrant Shares issuable upon exercise of this
               Warrant  in  accordance  with the terms of this  Warrant  and the
               Notice of Exercise.

               (d) Notwithstanding  anything herein to the contrary, in no event
     shall the Holder be permitted to exercise  this Warrant for Warrant  Shares
     to the extent  that (i) the number of shares of Common  Stock owned by such
     Holder (other than Warrant  Shares  issuable upon exercise of this Warrant)
     plus (ii) the number of  Warrant  Shares  issuable  upon  exercise  of this
     Warrant, would be equal to or exceed 4.9% of the number of shares of Common
     Stock then issued and outstanding,  including shares issuable upon exercise
     of this Warrant held by such Holder after application of this Section 3(d).
     As used herein, beneficial ownership shall be determined in accordance with
     Section  13(d) of the  Exchange  Act.  To the  extent  that the  limitation
     contained in this Section 3(d) applies,  the  determination of whether this
     Warrant  is  exercisable  (in  relation  to other  securities  owned by the

                                       3
<PAGE>
     Holder) and of which a portion of this Warrant is  exercisable  shall be in
     the sole  discretion  of such  Holder,  and the  submission  of a Notice of
     Exercise shall be deemed to be such Holder's  determination of whether this
     Warrant is  exercisable  (in  relation  to other  securities  owned by such
     Holder) and of which portion of this Warrant is  exercisable,  in each case
     subject to such aggregate percentage limitation, and the Company shall have
     no  obligation  to verify or confirm the  accuracy  of such  determination.
     Nothing  contained herein shall be deemed to restrict the right of a Holder
     to exercise this Warrant into Warrant  Shares at such time as such exercise
     will not violate the  provisions  of this Section 3(d).  The  provisions of
     this Section 3(d) may be waived by the Holder upon,  at the election of the
     Holder,  with not less than 61 days' prior notice to the  Company,  and the
     provisions of this Section 3(d) shall continue to apply until such 61st day
     (or such later  date as may be  specified  in such  notice of  waiver).  No
     exercise of this Warrant in violation of this Section 3(d) but otherwise in
     accordance  with this Warrant shall affect the status of the Warrant Shares
     as validly issued, fully-paid and nonassessable.

          4. NO  FRACTIONAL  SHARES  OR  SCRIP.  No  fractional  shares or scrip
representing  fractional  shares  shall  be  issued  upon the  exercise  of this
Warrant.  As to any fraction of a share which Holder would otherwise be entitled
to purchase  upon such  exercise,  the Company  shall pay a cash  adjustment  in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

          5. CHARGES,  TAXES AND EXPENSES.  Issuance of certificates for Warrant
Shares shall be made without  charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate,  all
of which taxes and expenses shall be paid by the Company,  and such certificates
shall be  issued  in the name of the  Holder  or in such name or names as may be
directed by the Holder;  PROVIDED,  HOWEVER,  that in the event certificates for
Warrant  Shares are to be issued in a name  other  than the name of the  Holder,
this  Warrant  when  surrendered  for  exercise  shall  be  accompanied  by  the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

          6. CLOSING OF BOOKS. The Company will not close its stockholder  books
or records in any manner which prevents the timely exercise of this Warrant.

          7. TRANSFER, DIVISION AND COMBINATION.

               (a) Subject to compliance  with any applicable  securities  laws,
     transfer  of this  Warrant and all rights  hereunder,  in whole or in part,
     shall be registered  on the books of the Company to be maintained  for such
     purpose,  upon  surrender  of this Warrant at the  principal  office of the
     Company,  together with a written assignment of this Warrant  substantially
     in the form  attached  hereto  duly  executed by the Holder or its agent or
     attorney and funds  sufficient  to pay any transfer  taxes payable upon the
     making of such  transfer.  Upon  such  surrender  and,  if  required,  such
     payment, the Company shall execute and deliver a new Warrant or Warrants in
     the  name  of  the  assignee  or  assignees  and  in  the  denomination  or
     denominations  specified in such instrument of assignment,  and shall issue
     to the assignor a new Warrant evidencing the portion of this Warrant not so

                                       4
<PAGE>
     assigned,  and this Warrant  shall  promptly be  cancelled.  A Warrant,  if
     properly  assigned,  may be  exercised  by a new holder for the purchase of
     Warrant Shares without having a new Warrant issued.

               (b) This Warrant may be divided or combined  with other  Warrants
     upon presentation  hereof at the aforesaid office of the Company,  together
     with a written notice  specifying the names and  denominations in which new
     Warrants  are to be issued,  signed by the Holder or its agent or attorney.
     Subject to compliance  with Section  7(a), as to any transfer  which may be
     involved in such  division or  combination,  the Company  shall execute and
     deliver a new Warrant or  Warrants in exchange  for the Warrant or Warrants
     to be divided or combined in accordance with such notice.

               (c) The  Company  shall  prepare,  issue and  deliver  at its own
     expense (other than transfer  taxes) the new Warrant or Warrants under this
     Section 7.

               (d) The Company  agrees to  maintain,  at its  aforesaid  office,
     books  for  the  registration  and  the  registration  of  transfer  of the
     Warrants.

          8. NO RIGHTS AS  SHAREHOLDER  UNTIL  EXERCISE.  This  Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder  of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price or by means of a cashless exercise,  the
Warrant  Shares so purchased  shall be and be deemed to be issued to such Holder
as the record  owner of such  shares as of the close of business on the later of
the date of such surrender or payment.

          9. LOSS,  THEFT,  DESTRUCTION  OR MUTILATION  OF WARRANT.  The Company
covenants that upon receipt by the Company of evidence  reasonably  satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate  relating  to the  Warrant  Shares,  and in case of  loss,  theft or
destruction, of indemnity or security reasonably satisfactory to it (which shall
not include the posting of any bond),  and upon  surrender and  cancellation  of
such  Warrant or stock  certificate,  if  mutilated,  the Company  will make and
deliver a new  Warrant or stock  certificate  of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

          10. SATURDAYS,  SUNDAYS,  HOLIDAYS,  ETC. If the last or appointed day
for the taking of any action or the  expiration of any right required or granted
herein shall be a Saturday,  Sunday or a legal holiday,  then such action may be
taken or such right may be exercised on the next  succeeding day not a Saturday,
Sunday or legal holiday.

          11. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.

               (a)  STOCK  SPLITS,  ETC.  The  number  and  kind  of  securities
     purchasable  upon the exercise of this Warrant and the Exercise Price shall
     be subject to adjustment from time to time upon the happening of any of the
     following. In case the Company shall (i) pay a dividend in shares of Common
     Stock or make a  distribution  in shares of Common  Stock to holders of its
     outstanding  Common Stock, (ii) subdivide its outstanding  shares of Common
     Stock into a greater number of shares, (iii) combine its outstanding shares

                                       5
<PAGE>
     of Common Stock into a smaller  number of shares of Common  Stock,  or (iv)
     issue any shares of its capital stock in a  reclassification  of the Common
     Stock, then the number of Warrant Shares  purchasable upon exercise of this
     Warrant  immediately  prior  thereto  shall be  adjusted so that the Holder
     shall be entitled to receive the kind and number of Warrant Shares or other
     securities  of the Company  which it would have owned or have been entitled
     to receive had such Warrant been  exercised in advance  thereof.  Upon each
     such  adjustment  of the  kind  and  number  of  Warrant  Shares  or  other
     securities of the Company which are purchasable hereunder, the Holder shall
     thereafter  be entitled to purchase  the number of Warrant  Shares or other
     securities  resulting from such adjustment at an Exercise Price per Warrant
     Share or other  security  obtained by  multiplying  the  Exercise  Price in
     effect immediately prior to such adjustment by the number of Warrant Shares
     purchasable  pursuant  hereto  immediately  prior  to such  adjustment  and
     dividing by the number of Warrant Shares or other securities of the Company
     resulting  from  such  adjustment.  An  adjustment  made  pursuant  to this
     paragraph shall become  effective  immediately  after the effective date of
     such event retroactive to the record date, if any, for such event.

               (b)  ANTI-DILUTION  PROVISIONS.  During the Exercise Period,  the
     Exercise Price and the number of Warrant Shares issuable  hereunder and for
     which this Warrant is then  exercisable  pursuant to Section 1 hereof shall
     be subject to  adjustment  from time to time as  provided  in this  Section
     11(b).  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 or down to the nearest cent.

               (i) ADJUSTMENT OF EXERCISE PRICE. If the Company issues or sells,
          or is deemed to have issued or sold,  any shares of Common Stock for a
          consideration  per  share of less  than the then  applicable  Exercise
          Price (the "BASE SHARE PRICE") or for no consideration  (collectively,
          a "DILUTIVE ISSUANCE"),  then effective immediately upon each Dilutive
          Issuance,  the  Exercise  Price will be  reduced so that the  Exercise
          Price  will  equal  the  greater  of  the  Exercise  Price  in  effect
          immediately prior to the Dilutive Issuance multiplied by 0.8333 or the
          Base Share Price.

               (ii) EFFECT ON EXERCISE PRICE OF CERTAIN EVENTS.  For purposes of
          determining  the adjusted  Exercise  Price under Section 11(b) hereof,
          the following will be applicable:

                         (A)  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   exercisable,
               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
               Exercise  Price  ("BELOW BASE PRICE  OPTIONS"),  then the maximum
               total number of shares of Common Stock issuable upon the exercise
               of all such Below Base Price  Options  (assuming  full  exercise,
               conversion or exchange of Convertible Securities,  if applicable)

                                       6
<PAGE>
               will,  as of the date of the issuance or grant of such Below Base
               Price  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 Below
               Base Price  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 Below Base
               Price Options,  plus the minimum  aggregate  amount of additional
               consideration,  if any,  payable to the Company upon the exercise
               of all  such  Below  Base  Price  Options,  plus,  in the case of
               Convertible  Securities  issuable upon the exercise of such Below
               Base Price Options,  the minimum  aggregate  amount of additional
               consideration  payable upon the exercise,  conversion or exchange
               thereof  at the time such  Convertible  Securities  first  become
               exercisable,  convertible  or  exchangeable,  by (ii) the maximum
               total number of shares of Common Stock issuable upon the exercise
               of all such Below Base Price 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 Below Base Price  Options
               or upon the  exercise,  conversion  or  exchange  of  Convertible
               Securities  issuable  upon  exercise  of such  Below  Base  Price
               Options.

                         (B) 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 exercise, conversion
               or exchange  is less than the  Exercise  Price,  then the maximum
               total  number  of  shares  of  Common  Stock  issuable  upon  the
               exercise,   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 exercise,  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 exercise,  conversion or exchange
               thereof  at the time such  Convertible  Securities  first  become
               exercisable,  convertible  or  exchangeable,  by (ii) the maximum
               total  number  of  shares  of  Common  Stock  issuable  upon  the
               exercise,   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 exercise,
               conversion or exchange of such Convertible Securities.

                                       7
<PAGE>
                         (C) 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 exercise,  conversion or exchange
               of any  Convertible  Securities;  or (iii)  the rate at which any
               Convertible  Securities are convertible  into or exchangeable for
               Common Stock (in each such case, 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.

                         (D)  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  exercise,   conversion  or  exchange  of  any   Convertible
               Securities  is not,  in fact,  issued and the rights to  exercise
               such Option or to exercise,  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.

                         (E)  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 market
               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  date of  receipt.  In case  any  Common  Stock,  Options  or
               Convertible  Securities are issued in connection  with any merger
               or   consolidation   in  which  the  Company  is  the   surviving
               corporation,  the amount of consideration therefor will be deemed
               to be the fair market 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  market  value of any  consideration  other than

                                       8
<PAGE>
               cash  or  securities  will be  determined  in  good  faith  by an
               investment  banker  or  other  appropriate   expert  of  national
               reputation  selected by the Company and reasonably  acceptable to
               the holder  hereof,  with the costs of such appraisal to be borne
               by the Company.

                         (F)  EXCEPTIONS  TO ADJUSTMENT  OF EXERCISE  PRICE.  No
               adjustment  to the  Exercise  Price  will be made  (i)  upon  the
               exercise of this  Warrant or any other  warrant of this series or
               of any other series issued by the Company in connection  with the
               offer  and  sale of this  Company's  securities  pursuant  to the
               Purchase  Agreement;  (ii) upon the exercise of or  conversion of
               any  Convertible  Securities,  options  or  warrants  issued  and
               outstanding on the initial  issuance date of this Warrant;  (iii)
               upon the grant or exercise of any  Convertible  Securities  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 Convertible Securities is
               approved by a majority of the  non-employee  members of the Board
               of  Directors  of the  Company or a majority  of the members of a
               committee of non-employee directors established for such purpose;
               (iv) upon the issuance of Common Stock or Convertible  Securities
               in any  transaction  of the  nature  contemplated  by  Rule  145,
               promulgated  under the Securities  Act; or (v) in connection with
               any strategic  partnership or joint venture or acquisition or key
               consulting  agreements  (the  primary  purpose of which is not to
               raise equity capital for the Company).

               (iii)  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, provided that such notice shall not contain
          any  material  nonpublic   information.   Such  calculation  shall  be
          certified by the chief financial officer of the Company.

               (iv) 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.

               (v) CERTAIN DEFINITIONS.  "Common Stock Deemed Outstanding" shall
          mean the number of shares of Common Stock  actually  outstanding  (not

                                       9
<PAGE>
          including shares of Common Stock held in the treasury of the Company),
          plus (x) in the case of any  adjustment  hereunder  resulting from the
          issuance of any Options,  the maximum total number of shares of Common
          Stock  issuable  upon  the  exercise  of the  Options  for  which  the
          adjustment is required  (including  any Common Stock issuable upon the
          conversion  of  Convertible  Securities  issuable upon the exercise of
          such  Options),  and  (y)  in the  case  of  any  adjustment  required
          hereunder  resulting from the issuance of any Convertible  Securities,
          the maximum  total number of shares of Common Stock  issuable upon the
          exercise,  conversion or exchange of the  Convertible  Securities  for
          which the  adjustment is required,  as of the date of issuance of such
          Convertible Securities, if any.

               (c) VOLUNTARY  ADJUSTMENT BY THE COMPANY.  The Company may at any
     time during the term of this Warrant reduce the then current Exercise Price
     to any amount and for any period of time deemed appropriate by the Board of
     Directors of the Company.

               (d) NOTICE OF  ADJUSTMENT.  Whenever the number of Warrant Shares
     or number or kind of  securities  or other  property  purchasable  upon the
     exercise  of this  Warrant or the  Exercise  Price is  adjusted,  as herein
     provided,  the Company shall promptly mail by registered or certified mail,
     return  receipt  requested,  to the  Holder  notice of such  adjustment  or
     adjustments   setting  forth  the  number  of  Warrant  Shares  (and  other
     securities or property)  purchasable  upon the exercise of this Warrant and
     the  Exercise  Price  of such  Warrant  Shares  (and  other  securities  or
     property)  after such  adjustment,  setting forth a brief  statement of the
     facts  requiring such adjustment and setting forth the computation by which
     such  adjustment was made.  Such notice,  in the absence of manifest error,
     shall be conclusive evidence of the correctness of such adjustment.

          12.  REORGANIZATION,   RECLASSIFICATION,   MERGER,   CONSOLIDATION  OR
DISPOSITION  OF  ASSETS.  In case the  Company  shall  reorganize  its  capital,
reclassify  its  capital  stock,  consolidate  or  merge  with or  into  another
corporation  (where the Company is not the surviving  corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business  to another  corporation  and,  pursuant to the terms of such
reorganization,   reclassification,  merger,  consolidation  or  disposition  of
assets, shares of common stock of the successor or acquiring corporation, or any
cash,  shares of stock or other securities or property of any nature  whatsoever
(including  warrants or other subscription or purchase rights) in addition to or
in lieu of  common  stock of the  successor  or  acquiring  corporation  ("Other
Property"),  are to be received by or distributed to the holders of Common Stock
of the Company,  then the Holder shall have the right thereafter to receive,  at
their option, (a) upon exercise of this Warrant,  the number of shares of Common
Stock of the successor or acquiring  corporation or of the Company, if it is the
surviving corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a Holder of the number of shares of Common  Stock for which  this  Warrant is
exercisable  immediately  prior to such event, or (b) cash equal to the value of
this Warrant as determined in accordance  with the  Black-Sholes  option pricing
formula.  In  case  of  any  such  reorganization,   reclassification,   merger,
consolidation or disposition of assets,  the successor or acquiring  corporation
(if  other  than  the  Company)  shall  expressly  assume  the due and  punctual
observance  and  performance  of each and every  covenant and  condition of this

                                       10
<PAGE>
Warrant to be performed and observed by the Company and all the  obligations and
liabilities   hereunder,   subject  to  such  modifications  as  may  be  deemed
appropriate (as determined in good faith by resolution of the Board of Directors
of the Company) in order to provide for  adjustments of Warrant Shares for which
this Warrant is exercisable  which shall be as nearly  equivalent as practicable
to the adjustments provided for in this Section 12. For purposes of this Section
12, "common stock of the successor or acquiring corporation" shall include stock
of such  corporation  of any class which is not  preferred  as to  dividends  or
assets  over any  other  class of stock  of such  corporation  and  which is not
subject to  redemption  and shall also include any  evidences  of  indebtedness,
shares of stock or other  securities  which are convertible into or exchangeable
for any such stock,  either  immediately or upon the arrival of a specified date
or the  happening  of a  specified  event and any  warrants  or other  rights to
subscribe  for or purchase  any such stock.  The  foregoing  provisions  of this
Section   12   shall    similarly    apply   to   successive    reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

          13. NOTICE OF CORPORATE ACTION. If at any time:

               (a) the Company  shall take a record of the holders of its Common
     Stock for the  purpose of  entitling  them to  receive a dividend  or other
     distribution,  or any right to subscribe  for or purchase any  evidences of
     its indebtedness,  any shares of stock of any class or any other securities
     or property, or to receive any other right, or

               (b) there shall be any capital reorganization of the Company, any
     reclassification or recapitalization of the capital stock of the Company or
     any  consolidation or merger of the Company with, or any sale,  transfer or
     other  disposition  of all or  substantially  all the  property,  assets or
     business of the Company to, another corporation or,

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

then,  in any one or more of such cases,  the Company  shall give to Holder,  if
lawful to do so, (i) at least 20 days' prior written notice of the date on which
a record date shall be selected for such dividend,  distribution or right or for
determining   rights   to  vote  in   respect   of  any   such   reorganization,
reclassification,    merger,   consolidation,   sale,   transfer,   disposition,
liquidation  or  winding  up,  and (ii) in the case of any such  reorganization,
reclassification,    merger,   consolidation,   sale,   transfer,   disposition,
dissolution,  liquidation  or winding up, at least 20 days' prior written notice
of the date when the same shall take place.  Such notice in accordance  with the
foregoing  clause also shall specify (i) the date on which any such record is to
be taken for the purpose of such dividend,  distribution  or right,  the date on
which the  holders  of Common  Stock  shall be  entitled  to any such  dividend,
distribution or right, and the amount and character  thereof,  and (ii) the date
on which any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition,  dissolution,  liquidation or winding up is to take place
and the time, if any such time is to be fixed, as of which the holders of Common
Stock shall be entitled to exchange their Warrant Shares for securities or other
property deliverable upon such disposition,  dissolution, liquidation or winding
up. Each such written notice shall be sufficiently  given if addressed to Holder

                                       11
<PAGE>
at the  last  address  of  Holder  appearing  on the  books of the  Company  and
delivered in accordance with Section 16(d).

          14.  AUTHORIZED  SHARES.  The Company covenants that during the period
the Warrant is  outstanding,  it will reserve from its  authorized  and unissued
Common  Stock a  sufficient  number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant.  The
Company  further  covenants  that its issuance of this Warrant shall  constitute
full authority to its officers who are charged with the duty of executing  stock
certificates  to execute and issue the  necessary  certificates  for the Warrant
Shares upon the exercise of the purchase rights under this Warrant.  The Company
will take all such  reasonable  action as may be  necessary  to assure that such
Warrant  Shares  may be issued  as  provided  herein  without  violation  of any
applicable law or regulation,  or of any  requirements  of the Principal  Market
upon which the Common Stock may be listed.

               The  Company  shall  not  by  any  action,   including,   without
limitation,   amending  its   certificate  of   incorporation   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 of this Warrant,  but will at all
times in good  faith  assist in the  carrying  out of all such  terms and in the
taking of all such  actions as may be necessary  or  appropriate  to protect the
rights of Holder  against  impairment.  Without  limiting the  generality of the
foregoing, the Company will (a) not increase the par value of any Warrant Shares
above the amount payable therefor upon such exercise  immediately  prior to such
increase  in par  value,  (b)  take  all  such  action  as may be  necessary  or
appropriate  in order that the Company may validly and legally  issue fully paid
and nonassessable  Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having  jurisdiction  thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.

               Before  taking any action which would result in an  adjustment in
the number of Warrant  Shares for which this  Warrant is  exercisable  or in the
Exercise Price, the Company shall obtain all such  authorizations  or exemptions
thereof,  or consents  thereto,  as may be necessary from any public  regulatory
body or bodies having jurisdiction thereof.

          15. MISCELLANEOUS.

               (a) JURISDICTION.  This Warrant shall constitute a contract under
     the laws of New York, without regard to its conflict of law,  principles or
     rules, and be subject to arbitration pursuant to the terms set forth in the
     Purchase Agreement.

               (b) RESTRICTIONS. The Holder acknowledges that the Warrant Shares
     acquired upon the exercise of this Warrant,  if not  registered,  will have
     restrictions upon resale imposed by state and federal securities laws.

               (c) NONWAIVER AND EXPENSES.  No course of dealing or any delay or
     failure to exercise any right hereunder on the part of Holder shall operate
     as a waiver of such right or otherwise prejudice Holder's rights, powers or
     remedies, notwithstanding all rights hereunder terminate on the Termination

                                       12
<PAGE>
     Date.  If the  Company  willfully  and  knowingly  fails to comply with any
     provision of this  Warrant,  which  results in any material  damages to the
     Holder, the Company shall pay to Holder such amounts as shall be sufficient
     to cover any costs and expenses  including,  but not limited to, reasonable
     attorneys'  fees,  including  those of appellate  proceedings,  incurred by
     Holder in  collecting  any  amounts  due  pursuant  hereto or in  otherwise
     enforcing any of its rights, powers or remedies hereunder.

               (d) NOTICES.  Any notice,  request or other document  required or
     permitted to be given or  delivered  to the Holder by the Company  shall be
     delivered  in  accordance  with  the  notice  provisions  of  the  Purchase
     Agreement.

               (e) LIMITATION OF LIABILITY.  No provision hereof, in the absence
     of  affirmative  action  by  Holder  to  purchase  Warrant  Shares,  and no
     enumeration  herein of the rights or privileges of Holder,  shall give rise
     to any liability of Holder for the purchase price of any Common Stock or as
     a  stockholder  of the Company,  whether such  liability is asserted by the
     Company or by creditors of the Company.

               (f) REMEDIES.  Holder,  in addition to being entitled to exercise
     all rights granted by law, including recovery of damages,  will be entitled
     to  specific  performance  of its rights  under this  Warrant.  The Company
     agrees that  monetary  damages would not be adequate  compensation  for any
     loss incurred by reason of a breach by it of the provisions of this Warrant
     and  hereby  agrees  to  waive  the  defense  in any  action  for  specific
     performance that a remedy at law would be adequate.

               (g) SUCCESSORS AND ASSIGNS. Subject to applicable securities laws
     and the  provisions  of this  Warrant,  this  Warrant  and the  rights  and
     obligations  evidenced  hereby shall inure to the benefit of and be binding
     upon the successors of the Company and the successors and permitted assigns
     of Holder.  The  provisions  of this  Warrant  are  intended  to be for the
     benefit  of all  Holders  from  time to time of this  Warrant  and shall be
     enforceable by any such Holder or holder of Warrant Shares.

               (h)  AMENDMENT.  This  Warrant  may be modified or amended or the
     provisions  hereof  waived with the written  consent of the Company and the
     Holder.

               (i)  SEVERABILITY.  Wherever  possible,  each  provision  of this
     Warrant  shall be  interpreted  in such manner as to be effective and valid
     under  applicable  law,  but if any  provision  of this  Warrant  shall  be
     prohibited by or invalid under  applicable  law,  such  provision  shall be
     ineffective  to the  extent  of such  prohibition  or  invalidity,  without
     invalidating  the remainder of such provisions or the remaining  provisions
     of this Warrant.

               (j)  HEADINGS.  The  headings  used in this  Warrant  are for the
     convenience of reference  only and shall not, for any purpose,  be deemed a
     part of this Warrant.

                                       13
<PAGE>
          IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.

Dated: May 31, 2002
                                        PACIFIC MAGTRON INTERNATIONAL CORP.

                                        By: /s/ Theodore S. Li
                                            ------------------------------------
                                            Name: Theodore S. Li
                                            Title: Chairman of the Board and
                                                   President

                                       14
<PAGE>
                               NOTICE OF EXERCISE

To: Pacific Magtron International Corp.

          (1) The undersigned  hereby elects to purchase ________ Warrant Shares
(the "Common Stock"),  of Pacific Magtron  International  Corp.  pursuant to the
terms of the  attached  Warrant,  and tenders  herewith  payment of the exercise
price in full, together with all applicable transfer taxes, if any.

          (2) Please  issue a  certificate  or  certificates  representing  said
Warrant  Shares  in the  name of the  undersigned  or in such  other  name as is
specified below:

                ________________________________________________

The Warrant Shares shall be delivered to the following:

                ________________________________________________

                ________________________________________________

                ________________________________________________

                                        [PURCHASER]

                                        By: ____________________________________
                                            Name:
                                            Title:

                                        Dated: _________________________________
<PAGE>
                   NOTICE OF EXERCISE OF COMMON STOCK WARRANT
                    PURSUANT TO CASHLESS EXERCISE PROVISIONS

To: Pacific Magtron International Corp.

Aggregate Price of Warrant Before Exercise: $______
Aggregate Price Being Exercised: $______
Exercise Price: $______ per share
Number of Shares of Common Stock to be Issued Under this Notice: ______
Remaining Aggregate Price (if any) After Issuance: $______

Gentlemen:

The undersigned,  registered  Holder of the Warrant delivered  herewith,  hereby
irrevocably exercises such Warrant for, and purchases thereunder,  shares of the
Common Stock of Pacific Magtron  International  Corp. a Nevada  corporation,  as
provided below.  Capitalized terms used herein, unless otherwise defined herein,
shall have the meanings given in the Warrant.  The portion of the Exercise Price
(as defined in the  Warrant) to be applied  toward the  purchase of Common Stock
pursuant to this Notice of Exercise  is  $_______,  thereby  leaving a remaining
Exercise  Price (if any) equal to $________.  Such exercise shall be pursuant to
the cashless exercise provisions of Section 3 of the Warrant;  therefore, Holder
makes no payment with this Notice of Exercise. The number of shares to be issued
pursuant to this  exercise  shall be  determined  by reference to the formula in
Section 3 of the Warrant  which,  by reference to Section 3, requires the use of
the high and low trading price of the Company's  Common Stock on the Trading Day
preceding  the date of such  election.  The high  and low  trading  price of the
Company's  Common  Stock  has  been  determined  by  Holder  to be  $______  and
$_________,  respectively, which figure is acceptable to Holder for calculations
of the number of shares of Common  Stock  issuable  pursuant  to this  Notice of
Exercise.  Holder  requests that the  certificates  for the purchased  shares of
Common Stock be issued in the name of _________________________ and delivered to
______________________________________________.  To  the  extent  the  foregoing
exercise is for less than the full Aggregate Price of the Warrant, a replacement
Warrant representing the remainder of the Aggregate Price (and otherwise of like
form,  tenor and  effect)  shall be  delivered  to Holder  along  with the share
certificate  evidencing  the Common  Stock  issued in response to this Notice of
Exercise.

                                        [Purchaser]

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

                                        Date:

                                      NOTE

          The  execution  to the  foregoing  Notice  of  Exercise  must  exactly
correspond to the name of the Holder on the Warrant

                                        2
<PAGE>
                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

          FOR VALUE  RECEIVED,  the foregoing  Warrant and all rights  evidenced
thereby are hereby assigned to

_______________________________________________________________ whose address is

_______________________________________________________________________________.

________________________________________________________________________________

                                        Dated: _______________________, ________

          Holder's Signature: ________________________________________

          Holder's Address: __________________________________________

                            __________________________________________

Signature Guaranteed: ___________________________________________

NOTE: The signature to this  Assignment Form must correspond with the name as it
appears on the face of the Warrant,  without  alteration or  enlargement  or any
change whatsoever,  and must be guaranteed by a bank or trust company.  Officers
of  corporations  and  those  acting  in an  fiduciary  or other  representative
capacity  should  file  proper  evidence of  authority  to assign the  foregoing
Warrant.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}]]