PACIFIC MAGTRON INTERNATIONAL CORP
AMENDMENT NO.1 TO ACCOUNTS RECEIVABLE AND INVENT
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>4
<FILENAME>ex10-8.txt
<DESCRIPTION>AMENDMENT NO.1 TO ACCOUNTS RECEIVABLE AND INVENT
<TEXT>
                                                                    Exhibit 10.8

                   AMENDMENT NO. 1 TO ACCOUNTS RECEIVABLE AND
                         INVENTORY FINANCING AGREEMENT

     Amendment No. 1 to Accounts  Receivable and Inventory  Financing  Agreement
dated as of Jan 22nd,  2002,  by and  between  Transamerica  Commercial  Finance
Corporation ("TCFC") and Pacific Magtron,  Inc. ("Dealer 1") and Pacific Magtron
(GA), Inc. ("Dealer 2") (Dealer 1 and Dealer 2 shall hereinafter be individually
referred to as a "Dealer" and collectively as the "Dealer").

                                    PREAMBLE

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

     NOW,  THEREFORE,  in  consideration  of the premises which are incorporated
herein by this reference and constitute an integral part of this Amendment,  the
execution and delivery of this Amendment and the mutual covenants and agreements
hereafter set forth, the parties hereto agree as follows:

     1. The  reference  to the "UCC" in Section 1.1 of the  Financing  Agreement
shall mean the  Uniform  Commercial  Code as enacted and amended in the State of
Illinois, and as may be further amended from time to time.

     2. The  following  are added as new  defined  terms in  Section  1.3 of the
Financing Agreement:

          "GE" - GE Capital Commercial Services, Inc."

          "GE  Factoring  Agreement" - that certain  Non-Notification  Factoring
          Contact  and  Security  Agreement  dated as of Dec 7th,  2001,  by and
          between Dealer and GE, a copy of which is attached as Schedule 1.3-1."

          "GE Intercreditor  Agreement" - that certain  Intercreditor  Agreement
          dated as of March 27, 2002 by and between TCFC and GE, a copy of which
          is attached hereto as Exhibit 1.3-2."

     3.  The  following  is added to the end of  Section  3.11 of the  Financing
Agreement:

          "Without   limitation  of  the   foregoing,   each  Dealer  (i)  shall
          authenticate such financing  statements and such other instruments and
          documents  when and as reasonably  requested by TCFC;  and (ii) hereby
          authorizes TCFC through any of TCFC's  employees,  agents or attorneys
          to  file  any  and  all  financing  statements,   including,   without
          limitation,   any  continuations,   transfers  or  amendments  thereof
          required  to  perfect  TCFC's  security  interest  and  liens  in  the
          Collateral  under the UCC without  authentication  or execution by any
          Dealer."

     4.  Schedule  6.9 to the  Financing  Agreement  is  amended  in the form of
Schedule 6.9 attached to this Amendment.

     5. Section 7.2 of the Financing Agreement is amended to read as follows:

          "7.2 Indebtedness.  Such Dealer shall not (i) incur or permit to exist
          any  indebtedness  except for  Liabilities  to TCFC,  deferred  taxes,
          current  accounts  payable  arising in the ordinary course of business
          and not overdue,  non-current  accounts  payable  which such Dealer is
          contesting in good faith by appropriate
<PAGE>
          proceedings  and  indebtedness  due to GE pursuant to the GE Factoring
          Agreement;  or  (ii)  guaranty,  endorse  or  become  responsible  for
          obligations  of any other  Person or incur any  contingent  obligation
          other than  endorsements  of negotiable  instruments for collection in
          the ordinary course of business."

     6. Section 7.3 of the Financing Agreement is amended to read as follows:

          "7.3 Disposal of Collateral.  Dealer shall not sell, lease,  transfer,
          assign or  otherwise  dispose  of any of the  Collateral  or any other
          asset except for (A) the sale (not subject to repurchase obligation or
          return right) of finished inventory in the ordinary course of business
          to persons  other than other  Dealers;  and (B) sales or  transfers of
          Inventory  to other  dealers (but not to  Affiliates  who are not also
          Dealers)  subject to the other  provisions of this Agreement;  and (C)
          the  assignment  of  Accounts  to GE  pursuant  to  the  GE  Factoring
          Agreement. Such Dealer shall not sell Inventory to an Affiliate except
          to other Dealers as permitted in the preceding sentence."

     7.  Schedule  7.5 is  amended to read in the form of  Schedule  7.5 to this
Amendment.

     8. Schedule 7.8 is added to the Financing Agreement in the form of Schedule
7.8 attached hereto.

     9. The period at the end of Section  9.1(j) of the  Financing  Agreement is
amended to read "; or" and the  following  is added to the end of Section 9.1 of
the Financing Agreement.

          "(k) any event or event of default  (howsoever such terms are defined)
          shall occur at any time under the GE Factoring Agreement."

     10.  All  representations  and  warranties  made to  TCFC in the  Financing
Agreement  and  all  agreements,  documents  and  instruments  relating  to  the
Financing Agreement are hereby restated to TCFC and all of such  representations
and warranties remain true and correct as of the date of this Amendment.

     11. All of the pledges, assignments,  transfers, conveyances, mortgages and
grants of security interest of any property given to TCFC by any Dealer pursuant
to the  Financing  Agreement  and  all  agreements,  documents  and  instruments
relating to the Financing Agreement,  including, but not limited to, pursuant to
Section  Three of the  Financing  Agreement,  have  constituted  and  shall  and
hereinafter  do  continue  to  constitute   pledges,   assignments,   transfers,
conveyances,  mortgages  and grants of security  interests of property to secure
the Liabilities.

     12.  TCFC's  obligation  to enter  into this  Amendment  is  subject to the
fulfillment  of each and  every  one of the  following  conditions  prior to, or
contemporaneously with the execution and delivery of this Amendment:

          A.  All  of the  conditions  precedent  set  forth  in  the  Financing
Agreement shall have been met; and

          B. TCFC shall have received such instruments, agreements and documents
in form and manner satisfactory to TCFC and its counsel as Lender may reasonably
request and where  applicable,  duly executed and recorded,  including,  but not
limited to, the following:

          (i)  Certificates of the  Secretaries of Dealers  certifying as to (a)
               all  corporate  actions  taken and  consents  made by  Dealers to
               authorize the  transactions  provided for or  contemplated  under
               this  Amendment and the  execution,  delivery and  performance of
               this  Amendment and all  agreements,  documents  and  instruments
               relating to this Amendment;  and (b) the names of the officers or
               employees of Dealers  authorized  to sign this  Amendment and all
               agreements, documents and instruments relating to this Amendment,
               together with a sample of the true
<PAGE>
               signature of each such  person.  (TCFC may  conclusively  rely on
               such certificates until formally advised by a like certificate of
               any changes therein);

          (ii) Acknowledgement   copies   from  the   appropriate   governmental
               authority of all Uniform  Commercial  Code  financing  statements
               required  to  perfect  the  TCFC's  security   interests  in  the
               Collateral;

         (iii) Confirmations of all guaranties given by the Guarantors;

          (iv) Certificates of good standing for Dealers in the  jurisdiction of
               their  incorporation,  in the  principal  places  in  which  they
               conduct  business  and in  places in which  they own real  estate
               and/or Collateral;

          (v)  Such  other  instruments  or  documents  as TCFC  may  reasonably
               request.

          C. No Default  shall have occurred and be  continuing,  may occur with
the giving of notice, the passage of time or both.

          D. There shall have been no material adverse change in the business of
any  Dealer or the  financial  conditions  of any  Dealer  from the most  recent
financial statements submitted by Dealers to TCFC.

     13. All  references to the Financing  Agreement in the Financing  Agreement
and  all  agreements,  documents  and  instruments  relating  to  the  Financing
Agreement shall mean the Financing  Agreement,  as amended by this Amendment and
as may be further amended and/or restated from time to time.

     14. Dealers agree to pay all reasonable fees and out-of-pocket  expenses of
TCFC (including,  but not limited to, outside counsel to TCFC and paralegals) in
connection with the preparation of this Amendment and all agreements,  documents
and instruments relating to this Amendment.

     15. The Financing  Agreement (as amended by this  Amendment),  contains the
entire  agreement  between the parties  hereto with respect to the  transactions
contemplated  herein  and  supersede  all  prior  representations,   agreements,
covenants and  understandings,  whether oral or written,  related to the subject
matter  of the  Financing  Agreement.  Except as  specifically  set forth in the
Agreement, TCFC makes no covenants to any Dealer, including, but not limited to,
any other commitments to provide any additional financing to any Dealer.

     16. This Amendment may be executed in any number of  counterparts,  each of
which counterpart, once they are executed and delivered shall be deemed to be an
original and all of which  counterparts  taken together shall constitute but one
in the same amendment.

     17. Except as specifically amended and modified by this Amendment,  (A) the
Financing Agreement shall remain in full force and effect and is hereby restated
and  incorporated  herein by this  reference;  and (B) all terms  defined in the
Financing Agreement shall have the same meanings herein as therein.

                [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK;
                            SIGNATURE PAGE FOLLOWS]

                                       3
<PAGE>
TRANSAMERICA COMMERCIAL FINANCE
CORPORATION

By: /s/ Christopher C. Meals
    ------------------------------
Its: Vice President - Credit
     -----------------------------


PACIFIC MAGTRON, INC.


By: /s/ Theodore S. Li
    ------------------------------
Its: President
     -----------------------------


PACIFIC MAGTRON (GA), INC.


By: /s/ Theodore S. Li
    ------------------------------
Its: Sec.
     -----------------------------
<PAGE>
                                  SCHEDULE 6.9


                        Additional Affirmative Covenants


AUDITED  FINANCIAL  STATEMENTS.  In addition to any other financial  statements,
Dealer is  required to furnish  TCFC with a  compilation  of  Dealer's  year-end
consolidated audited financial statements performed by an independent  certified
public  accounting firm selected by Dealer and approved by TCFC,  within 90 days
following the end of the fiscal year to which they pertain.

TRANSFER OF  ACCOUNTS  TO GE.  Contemporaneously  with any  assignment,  sale or
transfer  of any  Accounts  by any  Dealer to GE  pursuant  to the GE  Factoring
Agreement, such Dealer shall provide TCFC written notice of any such Accounts so
assigned, sold or transferred.

PAYMENTS BY GE. Each Dealer shall at all times require that all payments to such
Dealer pursuant to the GE Factoring  Agreement to be paid by GE to the following
Lock Box Accounts, or as otherwise directed in writing by TCFC:

The Northern Trust Bank
Account #:  57010
ABA #:  071000152
Reference #:  01-9150

So long as no Default has occurred or will occur with the giving of notice,  the
passage of time, or both, all monies received in such Lock Box Accounts shall be
delivered to Dealer within 2 business days from receipt of said monies by TCFC.

GE FACTORING AGREEMENT REPORTS.  Each Dealer shall furnish to TCFC copies of all
reports  required to be  delivered  to GE  pursuant to Section  2.4(a) of the GE
Factoring Agreement  contemporaneously  with the delivery of such reports to GE.
Upon the written  request of TCFC to Dealers,  Dealers shall deliver to TCFC any
other report or financial  information required to be delivered by any Dealer to
GE pursuant to the GE Factoring Agreement.
<PAGE>
                                  SCHEDULE 7.5

                                PERMITTED LIENS

(i)   Liens to secure payment of taxes which are not yet due and payable.

(ii)  Purchase money Liens for the acquisition of Equipment.

(iii) Deposits under  workmen's  compensation,  unemployment  insurance,  social
      security and other similar  laws,  or to secure  statutory or  performance
      bonds in the ordinary course of business.

(iv)  Liens  which, in  TCFC's sole  determination, do not materially impair the
      use or lessen the value of the Collateral.

(v)   Lien in Accounts in favor of GE pursuant  to the GE  Factoring  Agreement,
      PROVIDED HOWEVER, that Clause (v) shall only be applicable so long as both
      the GE Intercreditor Agreement and the GE Factoring Agreement are in force
      and effect in form and manner satisfactorily to TCFC.
<PAGE>
                                  SCHEDULE 7.8
                         ADDITIONAL NEGATIVE COVENANTS

GE  FACTORING  AGREEMENT.  No Dealer  shall  permit  or agree to any  amendment,
modification,  restatement or cancellation of the GE Factoring Amendment without
the prior written consent of TCFC.

TRANSFER  OF  ACCOUNTS  TO GE. No Dealer  shall  assign,  sell or  transfer  any
Accounts to GE pursuant to the GE Factoring  Agreement  unless such  Accounts so
assigned, sold or transferred (a) are at least 90 days past due from the invoice
date of such  Accounts  or (b) is no  longer in  business,  or (c) has filed for
bankruptcy.

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