EXHIBIT 10.1

THIS NOTE HAS NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"),  NOR UNDER ANY STATE  SECURITIES LAW AND MAY NOT BE PLEDGED,  SOLD,
ASSIGNED OR TRANSFERRED UNTIL (i) A REGISTRATION  STATEMENT WITH RESPECT THERETO
IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE  STATE  SECURITIES LAW OR (ii) THE
COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF THIS NOTE, WHICH COUNSEL
IS SATISFACTORY TO THE COMPANY, THAT THE NOTE MAY BE PLEDGED,  SOLD, ASSIGNED OR
TRANSFERRED  WITHOUT  AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE  ACT OR
APPLICABLE STATE SECURITIES LAW.



                        10% Subordinated Promissory Note

Amount: $100,000                                             Dated: May 16, 2001
                                                           San Diego, California

        nSTOR CORPORATION, INC. ("Company"), for value received, hereby promises
to pay on June 30, 2001, 10:00 a.m., local time ("Maturity") to H. Irwin Levy or
to his order or to such persons as he may designate from time to time ("Holder")
in lawful money of the United States of America,  upon Holder's presentation and
surrender of this 10 %  Subordinated  Promissory  Note ("Note") at the principal
office of the Company:  (i) the  principal sum of One Hundred  Thousand  Dollars
($100,000)  and  (ii)  interest  on the  amount  outstanding  at the rate of ten
percent (10 %) per annum.

        At the  option of the  Company,  any  payment  by the  Company  required
hereunder  may be made by check mailed to the Holder at the last address for the
Holder  appearing  on the records of the Company.  This Note may be prepaid,  in
whole or part without penalty, at any time after the date hereof.

     1. No Avoidance.  The Company shall not, by amendment of its Certificate of
Incorporation or through any reorganization,  transfer of assets, consolidation,
merger,  dissolution,  issuance  or sale of  securities  or any other  voluntary
action,  nor  shall  the  Holder,  by any  action,  avoid or seek to  avoid  the
performance of any of the provisions of this Note.

     2. Application of Payments. All payments received shall be applied first to
charges other than interest and  principal,  if any,  owing  hereunder,  then to
accrued interest then due, then to principal,  except that, after the occurrence
and during the continuation of any default under this Note, all amounts received
shall be applied in such order as Holder, in its sole discretion, may elect.

     3. No Waiver. The acceptance by Holder of any payment under this Note after
the date that such payment is due shall not  constitute a waiver of the right to
require prompt payment when due of future or succeeding payments or to declare a
default as herein  provided for any failure to so pay. The  acceptance by Holder
of the payment of a portion of any installment at any time that such installment
is due and payable in its  entirety  shall  neither  cure nor excuse the default
caused  by the  failure  to pay the  whole of such  installment  and  shall  not
constitute  a waiver of Holder's  right to require  full payment when due of all
future or succeeding installments.

     4. Subordination.  Indebtedness evidenced by this Note shall be subordinate
in interest,  and in right of payment as to principal and accrued  interest,  to
the payment of any and all "Senior  Indebtedness."  "Senior  Indebtedness" shall
mean: (i) all  indebtedness  owed to Wells Fargo Credit,  Inc., or any successor
thereof  (the  "Senior  Lender"),  whether or not  secured,  including,  without
limitation all indebtedness under revolving lines of credit and term loans; (ii)
all  obligations to reimburse the Senior Lender in respect of amounts paid under
letters  of  credit,  acceptance  or other  similar  instruments;  and (iii) all
deferrals, renewals, extensions and refundings of, and amendments, modifications
and supplements to any of the Senior Indebtedness described above.

     5. Default. In the event that the Company: (i) fails to make any payment of
principal or interest  hereunder  when due and such default  shall  continue for
thirty (30) days after written notice thereof has been delivered to the Company;
(ii) files a petition  or is subject to  proceedings  for  protection  under any
bankruptcy,  receivership,  reorganization  or  insolvency  laws;  (iii) makes a
general  assignment of all or substantially all of its assets for the benefit of
its  creditors;  (iv) has a trustee or receiver  appointed for the Company,  its
assets or a substantial  portion of its assets; (v) is adjudicated by a court of
competent jurisdiction to be insolvent or bankrupt; or (vi) fails to observe any
of the covenants or agreements on the part of the Company contained in this Note
continuing  (without  being  waived or cured)  for a period of thirty  (30) days
after receipt from Holder of written notice of such failure (unless the issue of
whether  such  failure  has been cured is being  contested  in good faith by the
Company);  then the Holder may, by written  notice to the  Company,  declare the
outstanding  principal  amount of this Note to be  immediately  due and payable,
whereupon  the  outstanding  principal  amount hereof along with any accrued but
unpaid  interest  shall  become  and be  immediately  due  and  payable  without
presentment, demand, protest or notice of any kind and the Holder shall have all
rights and remedies provided under this Note.

     6. Transferability.  This Note has not been registered under the Securities
Act of 1933, as amended (the "Act"),  nor under any state securities law and may
not be pledged,  sold,  assigned or transferred  until a registration  statement
with  respect  thereto  is  effective  under  the Act and any  applicable  state
securities  law,  or the  Company  receives an opinion of counsel to the Holder,
which  counsel is  satisfactory  to the  Company,  that the Note may be pledged,
sold, assigned or transferred without an effective  registration statement under
the Act or applicable state securities law.

     7. Registration.

               a. The Holder, by his acceptance of this Note,  acknowledges that
          he is  aware  that  this  Note  has  not  been  registered  under  the
          Securities Act of 1933, as amended ("Act"),  or the securities laws of
          any state or other jurisdiction.

               b. The Holder  warrants and represents to the Company that he has
          acquired this Note for  investment and not with a view to, or for sale
          in  connection  with,  any  distribution  of this  Note  or  with  any
          intention  of  distributing  or selling this Note.

               c. The Holder has no right to demand  that the  Company  register
          this Note.

     8.  Severability.  In case  any  provision  of this  Note is held  invalid,
illegal or  unenforceable  by a court of competent  jurisdiction,  the validity,
legality and enforceability of the remaining  provisions shall not in any way be
affected or impaired thereby.

     9. Choice of Law;  Venue and  Jurisdiction;  Legal  Proceedings.  This Note
shall be governed by and construed in  accordance  with the laws of the State of
Florida,   without  reference  to  choice  of  law  principles,   and  the  sole
jurisdiction and venue for any claim,  suit, or proceeding brought in connection
with this Note  shall be Palm  Beach  County,  Florida.  In any suit,  action or
proceeding  arising out of or in connection with this Note, the prevailing party
shall  be  entitled  to  an  award  of  the  reasonable   attorneys'   fees  and
disbursements incurred by such party in connection therewith.

     10.  Business Day. If any interest  payment date or the Maturity date under
this Note shall not be a business day in the State of California, payment may be
made  on the  next  succeeding  day  that  is a  business  day in the  State  of
California,  and shall be deemed hereunder as made on such interest payment date
or maturity date, notwithstanding any other provisions contained in this Note.

     11.  Notices.  Unless  otherwise  provided  herein,  all demands,  notices,
consents,  requests and other  communications  hereunder shall be in writing and
shall be deemed to have been  given  when  delivered  in person or mailed  first
class, postage-paid,  addressed (i) if to the Company, to the Company's business
office  in the  State  of  California,  and (ii) if to the  Holder,  at the last
address for the Holder listed on the records of the Company.

     12.  Modification.  This Note  represents the entire  understanding  of the
parties hereto relating to the subject matter hereof, and supersedes any and all
other prior  agreements  between the parties.  The terms and  provisions of this
Note cannot be modified or amended orally or by course of dealing or conduct, or
in any  other  manner,  except in a writing  signed  by the party  against  whom
enforcement is sought.

     13. Binding Effect.  This Note shall be binding on and inure to the benefit
of the respective parties hereto and their successors and assigns.

     14.  Compliance With Law. It is the  responsibility of the Holder to ensure
that all payments  received by the Holder  comply with all tax,  securities  and
other applicable laws, rules, and regulations of all applicable authorities, and
to provide the Company with any written  consents or other  documents  necessary
for compliance with such laws, rules and regulations.


        IN WITNESS WHEREOF, the Company has caused this Note to be signed by its
authorized  officer and its corporate seal to be affixed hereto,  as of this ___
day of May 2001.

                                            NSTOR CORPORATION, INC.,

                                            a Delaware corporation

                                            By:/s/ Larry Hemmerich
                                            Its: CEO