Exhibit10.3

nStor Technologies, Inc.
100 Century Boulevard
West Palm Beach, Florida 33417

December 31, 2003

Hilcoast Development Corp.
100 Century Blvd
West Palm Beach, FL 33417
Attn: Mark F. Levy

Dear Mr. Levy:

We have agreed to the following amendments to that certain Promissory Note,
dated June 30, 2003, in the amount of $2,806,744 (the “Note”), payable by nStor
Technologies, Inc. to Hilcoast Development Corp., a copy of which is attached
hereto.

1)         The maturity date of the Note is hereby extended from December 31,
2003 to April 30, 2004 (“Maturity”).

2)         Accrued and unpaid interest on the Note through December 31, 2003 in
the amount of $113,193 is hereby added to the $2,806,744 principal amount of the
Note so that as of the date hereof, the principal amount of the Note has been
increased to $2,919,937 (the “New Principal Amount”).  Interest at the rate of
eight percent (8%) per annum will accrue on the unpaid New Principal Amount and
be payable at Maturity.

Except as set forth in this letter, the Note remains unmodified and in full
force and effect.

Please indicate your concurrence with the foregoing.

Sincerely,

/s/ Jack
Jaiven                                                                         
Hilcoast Development Corp.
Jack
Jaiven                                                                              
Agreed:
Vice President and Treasurer                                                   
By: /s/ Mark F. Levy
 
                                                                                              
Mark F. Levy
 
                                                                                              
Vice President and Secretary