EXHIBIT 10.2

                    INTELLECTUAL PROPERTY SECURITY AGREEMENT

        This  Intellectual  Property  Security  Agreement  is entered into as of
November 5, 2003 by and between SILICON VALLEY BANK ("Secured  Party") and NSTOR
CORPORATION, INC. ("Grantor").

                                    RECITALS

        A.  Secured  Party and Grantor are entering  into that certain  Accounts
Receivable Purchase Agreement by dated of even date herewith (as the same may be
amended,  modified or supplemented from time to time, the "Financing Agreement";
capitalized terms used herein which are not defined, have the meanings set forth
in the Financing Agreement).

        B. Pursuant to the terms of the Financing Agreement, Grantor has granted
to Secured  Party a  security  interest  in all of  Grantor's  right,  title and
interest,   whether  presently  existing  or  hereafter  acquired,  in,  to  all
Intellectual Property and all other Collateral.

        NOW,  THEREFORE,  as collateral security for the payment and performance
when due of all of the Obligations, Grantor hereby grants, represents, warrants,
covenants and agrees as follows:

                                    AGREEMENT

1. Grant of Security Interest. To secure all of the Obligations,  Grantor grants
and  pledges to Secured  Party a security  interest in all of  Grantor's  right,
title and interest in, to and under its intellectual property, including without
limitation the following (collectively, the Intellectual Property):

(a) All of present and future United States registered  copyrights and copyright
registrations,   including,   without  limitation,  the  registered  copyrights,
maskworks,  software, computer programs and other works of authorship subject to
United States  copyright  protection  listed in Exhibit A to this Agreement (and
including all of the  exclusive  rights  afforded a copyright  registrant in the
United States under 17 U.S.C.  ss.106 and any exclusive  rights which may in the
future  arise by act of  Congress  or  otherwise)  and all  present  and  future
applications for copyright  registrations  (including applications for copyright
registrations  of  derivative  works  and   compilations)   (collectively,   the
"Registered Copyrights"), and any and all royalties, payments, and other amounts
payable to Borrower in connection with the Registered Copyrights,  together with
all renewals and extensions of the Registered  Copyrights,  the right to recover
for all past, present,  and future  infringements of the Registered  Copyrights,
and all computer programs,  computer databases,  computer program flow diagrams,
source codes,  object codes and all tangible property embodying or incorporating
the  Registered  Copyrights,  and all  other  rights  of every  kind  whatsoever
accruing thereunder or pertaining thereto.

(b) All present and future copyrights,  maskworks,  software,  computer programs
and other works of  authorship  subject to (or  capable of becoming  subject to)
United States copyright protection which are not registered in the United States
Copyright Office (the "Unregistered Copyrights"), whether now owned or hereafter
acquired,  and any and all  royalties,  payments,  and other amounts  payable to
Borrower in  connection  with the  Unregistered  Copyrights,  together  with all
renewals and extensions of the Unregistered Copyrights, the right to recover for
all past, present, and future infringements of the Unregistered Copyrights,  and
all computer  programs,  computer  databases,  computer  program flow  diagrams,
source codes,  object codes and all tangible property embodying or incorporating
the  Unregistered  Copyrights,  and all other  rights of every  kind  whatsoever
accruing  thereunder or pertaining  thereto.  The Registered  Copyrights and the
Unregistered Copyrights collectively are referred to herein as the "Copyrights."

(c) All  right,  title and  interest  in and to any and all  present  and future
license agreements with respect to the Copyrights.

(d) All present and future accounts,  accounts receivable,  royalties, and other
rights  to  payment  arising  from,  in  connection  with  or  relating  to  the
Copyrights.

(e) All patents,  patent  applications and like protections  including,  without
limitation,   improvements,   divisions,   continuations,   renewals,  reissues,
extensions and  continuations-in-part  of the same, including without limitation
the  patents  and patent  applications  set forth on  Exhibit B attached  hereto
(collectively, the "Patents");

(f)  All  trademark  and  servicemark   rights,   whether   registered  or  not,
applications to register and registrations of the same and like protections, and
the entire goodwill of the business of Borrower connected with and symbolized by
such  trademarks,  including  without  limitation  those set forth on  Exhibit C
attached hereto (collectively, the "Trademarks");

(g)  Any  and  all  claims  for  damages  by way of  past,  present  and  future
infringements  of any of the rights included above,  with the right, but not the
obligation,  to sue for and collect such damages for said use or infringement of
the rights identified above;

(h) All  licenses  or other  rights  to use any of the  Copyrights,  Patents  or
Trademarks,  and all license  fees and  royalties  arising  from such use to the
extent permitted by such license or rights;

(i)  All  amendments,   extensions,  renewals  and  extensions  of  any  of  the
Copyrights, Trademarks or Patents; and

(j) All proceeds and products of the foregoing, including without limitation all
payments under insurance or any indemnity or warranty  payable in respect of any
of the foregoing,  and all license royalties and proceeds of infringement suits,
and all  rights  corresponding  to the  foregoing  throughout  the world and all
re-issues,     divisions     continuations,     renewals,     extensions     and
continuations-in-part of the foregoing.

2. Financing  Agreement.  This security  interest is granted in conjunction with
the security  interest  granted to Secured Party under the Financing  Agreement.
The rights and remedies of Secured  Party with respect to the security  interest
granted hereby are in addition to those set forth in the Financing Agreement and
the other Financing Documents, and those which are now or hereafter available to
Secured  Party as a matter of law or  equity.  Each  right,  power and remedy of
Secured Party  provided for herein or in the  Financing  Agreement or any of the
other  Financing  Documents,  or now or  hereafter  existing at law or in equity
shall be  cumulative  and  concurrent  and shall be in addition to every  right,
power or remedy provided for herein and the exercise by Secured Party of any one
or more of the rights,  powers or remedies  provided for in this Agreement,  the
Financing Agreement or any of the other Financing Documents, or now or hereafter
existing  at law or in equity,  shall not  preclude  the  simultaneous  or later
exercise by any person,  including  Secured  Party,  of any or all other rights,
powers or remedies.

3. Covenants and Warranties. Borrower represents, warrants, covenants and agrees
as follows:

(a) Borrower  shall  undertake all  reasonable  measures to cause its employees,
agents  and  independent  contractors  to  assign  to  Borrower  all  rights  of
authorship to any copyrighted material in which Borrower has or may subsequently
acquire any right or interest.

(b) Borrower  shall promptly  advise  Secured Party of any Trademark,  Patent or
Copyright  not  specified  in this  Agreement,  which is  hereafter  acquired by
Borrower.

(c) Section 6.2(P) of the Financing  Agreement hereby is incorporated  herein as
though fully set forth herein, mutatis mutandis.

4. General.  If any action relating to this Agreement is brought by either party
hereto  against  the other  party,  the  prevailing  party  shall be entitled to
recover reasonable  attorneys fees, costs and disbursements.  This Agreement may
be amended only by a written  instrument  signed by both parties hereto.  To the
extent that any provision of this Agreement  conflicts with any provision of the
Financing  Agreement,  the provision  giving  Secured  Party  greater  rights or
remedies shall govern, it being understood that the purpose of this Agreement is
to add to, and not detract from,  the rights  granted to Secured Party under the
Financing  Agreement.  This Agreement,  the Financing  Agreement,  and the other
Financing Documents comprise the entire agreement of the parties with respect to
the matters addressed in this Agreement. This Agreement shall be governed by the
laws of the State of California,  without  regard for choice of law  provisions.
Borrower and Secured Party consent to the nonexclusive jurisdiction of any state
or federal court located in Santa Clara County, California.

        5. Waiver of Right to Jury Trial. SECURED PARTY and Borrower each hereby
waive the right to trial by jury in any action or proceeding based upon, arising
out of, or in any way relating to: (i) this Agreement; or (ii) any other present
or future instrument or agreement  between SECURED PARTY and Borrower;  or (iii)
any  conduct,  acts or  omissions  of SECURED  PARTY or Borrower or any of their
directors,   officers,   employees,  agents,  attorneys  or  any  other  persons
affiliated  with SECURED  PARTY or  Borrower;  in each of the  foregoing  cases,
whether sounding in contract or tort or otherwise.

        IN WITNESS WHEREOF,  the parties have caused this Intellectual  Property
Security Agreement to be duly executed by its officers thereunto duly authorized
as of the first date written above.

Address of Grantor:                             Grantor:

6190 Corte Del Cedro                            NSTOR CORPORATION, INC.
Carlsbad, California  92009


                                       By: /s/ Thomas L. Gruber
                                       Title: Acting President, Chief Operating
                                              and Financial Officer
                                       Name: Thomas L. Gruber

Address of Secured Party:                       Secured Party:

3003 Tasman Drive                               SILICON VALLEY BANK
Santa Clara, California  95054


                                     By: /s/ Robert Anderson
                                     Title: Vice President Commerical
                                            Finance Division


Exhibits  "A", "B" and "C" to this  document are not included  with this filing,
however, may be obtained by contacting the registrant.