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Exhibit 10.2

                        RIDER TO BUSINESS LOAN AGREEMENT
                          (UNCOLLECTED FUNDS AGREEMENT)

         This Rider to Business Loan Agreement ("Rider") is attached to and made
a part of that certain Business Loan Agreement ("Agreement") executed by
I/OMAGIC CORPORATION ("Borrower") in favor of Chinatrust Bank (U.S.A.)
("Lender") in correction with certain credit facilities granted by Lender to
Borrower in the principal sum of $14,000,00.00 evidenced, in part, by a Change
In Terms Agreement dated 04-09-2002 executed by Borrower in favor of Lender in
the principal sum of $14,000,000.00 ("Note"). Borrower has requested Lender to
provide Uncollected Funds utilization credit to Borrower for certain deposits
made by Borrower in its deposit account(s) with Lender. Lender is willing to
provide such Uncollected Funds utilization credit subject to the terms and
conditions hereinafter set forth. Capitalized terms not defined herein shall
have the meaning ascribed to it in the Agreement. In consideration for the
credit facilities extended by Lender to or at the request of Borrower, Borrower
agrees as follows:

         1.       ADDITIONAL DEFINITIONS. 1n addition to any other term defined
                  in the Agreement, the following words shall have the following
                  meanings when used in this Rider.

                  a.       "Account Agreement" shall mean the Account Agreement
                           and Disclosure of Lender, Business Checking-Analyzed
                           Schedule, Signature Card, and other documents as may
                           be amended, substituted or replaced from time to
                           time, with respect to any deposit account Borrower
                           has with Lender.

                  b.       "Advance" or "Advances" shall mean any advances or
                           disbursement of loan proceeds by Lender pursuant to
                           the Agreement and this Rider.

                  c.       "Advance Rate" shall mean the variable rate of
                           interest per annum based on a 365/360 day year equal
                           to 0.75% over Wall Street Journal prime rate. Under
                           no circumstances will the interest rate be less than
                           5.50% per annum.

                  d.       "Overdraft Protection Facility" shall mean the credit
                           availability under which the Borrower can request
                           cash Advances to cover any accounts with Lender which
                           are overdrawn.

                  e.       "Uncollected Funds" shall mean any and all items,
                           including, but not limited to, checks, drafts, and
                           other items and instruments deposited by Borrower,
                           payable by a third party to Borrower, in Borrower's
                           deposit account # 22606270 maintained with Lender
                           which items have not yet been paid by the payer of
                           said items as a result of the Bank having to put a
                           hold on the funds pursuant to the Account Agreement,
                           any Banking Regulation or because of the time
                           necessary for an item to be paid by the payer when
                           submitted through normal banking channels. The term
                           "Uncollected Funds" does not include those checks,
                           drafts and other items and instruments drawn on or
                           payable by Lender or presented for direct collection
                           by Lender or transferred through an electronic funds
                           transfer system or through an automated clearing
                           house, or any other funds which Lender determines, in
                           its sole discretion and judgment, to exclude for
                           purposes of making an Uncollected Funds Advance.

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                  f.       "Uncollected Funds Obligations" shall mean any and
                           all obligations owing from Borrower to Lender, from
                           time to time, arising from any and all Uncollected
                           Funds Advances.

                  g.       "Uncollected Funds Line of Credit" shall mean the
                           Line of Credit granted to Borrower pursuant to this
                           Rider for the purpose of covering all items deposited
                           into Borrower's deposit accounts with Lender which
                           are Uncollected Funds.

                  h.       "Uncollected Funds Limit" shall mean Advances made on
                           Uncollected Funds not to exceed the sum of
                           $1,000,000.00.

                  i.       "Uncollected Funds Line of Credit Rate" shall mean
                           the variable rate of interest per annum equal to
                           5.000% over Wall Street Journal New York prime rate
                           based on a 365/365day year.

         2.       UNCOLLECTED FUNDS FACILITY. (If no Overdraft Protection
                  Facility is granted)

                  a.       Fees on Uncollected Funds Advances shall accrue on
                           the date such Advances are made and calculated based
                           on the Uncollected Funds Line of Credit Rate.

                  b.       The aggregate amount of Uncollected Funds Advances in
                           all of Borrower's deposit accounts with Lender shall
                           not exceed the Uncollected Funds Limit.

                  c.       Borrower agrees not to permit the outstanding balance
                           of the Uncollected Funds Obligations to exceed the
                           amount set forth in Paragraph 2b above.

                  d.       Until the Maturity Date (as defined in the Note),
                           unless sooner terminated as provide in the Agreement,
                           Borrower may use the Uncollected Funds Line of Credit
                           in accordance with the terms and conditions of this
                           Rider.

                  e.       Lender shall assess a monthly usage fee on Borrower's
                           Uncollected Funds Line of Credit as set forth in this
                           Rider and the Account Agreement. 1f not specifically
                           stated in the Account Agreement, the monthly usage
                           fee shall be calculated on a daily basis by using the
                           Uncollected Funds Line of Credit rate based on a
                           365/365 year.

         3.       UNCOLLECTED FUNDS/OVERDRAFT PROTECTION FACILITY.

                  a.       The aggregate usage of Uncollected Funds in all of
                           Borrower's deposit accounts with Lender and the
                           outstanding balance of Advance drawn under Overdraft
                           Protection Facility shall not exceed $N/A.

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                  b.       A usage fee on Uncollected Funds Line of Credit shall
                           accrue on the date such usage is made of the
                           Uncollected Funds and is calculated by using
                           Uncollected Funds Line of Credit Rate.

                  c.       Interest on outstanding balance of Advances drawn
                           under the Overdraft Protection Facility shall be
                           calculated daily by using the Advance Rate based on a
                           365/365 year.

                  d.       Borrower agrees not to permit the aggregate amount of
                           outstanding balance of the Uncollected Funds
                           Obligations and outstanding balance of Advances under
                           the Overdraft Protection Facility to exceed the
                           amount set forth in Paragraph 3a above.

                  e.       Until the Maturity Date (as defined in the Note),
                           unless sooner terminated as provided in the
                           Agreement, Borrower may use the Uncollected Funds
                           Line of Credit and Overdraft Protection Facility in
                           accordance with the terms and conditions of this
                           Rider.

                  f.       Lender shall assess a monthly usage fee on Borrower's
                           Uncollected Fund Facility and Overdraft Protection
                           Facility and Borrower shall pay interest monthly on
                           any Advances made by Lender as set forth in this
                           Rider and the Account Agreement. If not specifically
                           stated in the Account Agreement, the usage fee to be
                           paid monthly is the interest due on the Uncollected
                           Funds Line of Credit.

         4.       USAGE AGAINST UNCOLLECTED FUNDS. Borrower acknowledges and
                  agrees that any Uncollected Funds Advance is a loan from
                  Lender to Borrower under the Agreement and constitutes a
                  separate, independent obligation of Borrower to Lender under
                  the Agreement. Borrower further acknowledges and agrees that
                  the terms set forth in the Agreement and in this Rider are in
                  addition to any term, provision and condition in the Account
                  Agreement, including, but not limited to, any and all fees,
                  costs, interest due on uncollected Funds for which an
                  Uncollected Funds Advance is not made under the Agreement and
                  fees for returned items and overdrafts and do not act as a
                  waiver, amendment, substitution or release of any of
                  Borrower's obligation to Lender under the Account Agreement.

         5.       SECURITY INTEREST. Borrower hereby grants, assigns, pledges
                  and hypothecates to Lender all of Borrower's right, title and
                  interest in and to all deposit accounts maintained by Borrower
                  with Lender as security for each and all of the obligations of
                  Borrower to Lender under the Agreement and the Related
                  Documents.

         6.       INDEMNIFICATION. Borrower shall indemnify, defend and hold
                  Lender harmless from and against any and all claims, demands,
                  liabilities, damages, costs, expenses of any kind whatsoever,
                  arising out of any advances made by Lender hereunder or
                  Lender's refusal or failure to make any Advances hereunder.

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         7.       TERMS OF THE BUSINESS LOAN AGREEMENTS. All terms, conditions
                  and covenants set forth in the Agreement are incorporated
                  herein by this reference. In the event of any conflict in the
                  terms, conditions and covenants in the Agreement and this
                  Rider, the terms of this Rider shall control.

         8.       TERMINATION OF LENDER'S OBLIGATION TO ADVANCE. Lender's
                  obligation to make any Advances on either the Uncollected
                  Funds Line of Credit and/or the Overdraft Protection Facility
                  shall cease on the Maturity Date of the Note and in the event
                  that Borrower (1) fails to make any payment due to Lender
                  pursuant to the Agreement, the Rider, the Account Agreement,
                  the Related Documents or with respect to any obligation of any
                  kind with Lender, (2) exceeds the amount of usage under the
                  Uncollected Funds Line of Credit or Overdraft Protection
                  Facility, (3) breaches any term, condition or covenant of the
                  Agreement, Rider, Account Agreement, the Related Documents or
                  any other document evidencing obligations due to Lender, (4)
                  if Lender in good faith believes that Borrower will be unable
                  to pay any and all sums due to Lender, (5) if Borrower is in
                  default of any obligation of any kind or nature to Lender or
                  to any other person, (6) a Petition pursuant to any Chapter of
                  the Bankruptcy Code or any other insolvency statute or law is
                  filed by or against Borrower, or (7) if a Receiver is
                  appointed over Borrower's assets.

         9.       FAILURE TO MAKE PAYMENTS. In the event that Borrower fails to
                  pay any sums due pursuant to this Rider, Borrower shall be
                  liable to pay a late charge for any payment due to Lender in
                  the sum of five percent of payment due or $5.00, whichever is
                  greater, Additionally, in the event Borrower fails to pay any
                  sum due pursuant to this Rider, the Advance Rate and/or the
                  Uncollected Funds Line of Credit Rate shall be increased by an
                  additional 5%.

         BORROWER

         I/OMAGIC CORPORATION

         /S/ Tony Shahbaz
         ----------------------------------------
         By:  Tony Shahbaz, President/Secretary

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