EXHIBIT 10.1


                       ASSUMPTION AND AMENDMENT AGREEMENT

This Assumption and Amendment Agreement  ("Agreement") dated as of September 14,
2000, is made by and between Wells Fargo Credit, Inc.  ("Lender"),  successor in
interest to Wells Fargo Bank, National Association, and nStor Corporation, Inc.,
a Delaware corporation ("nStor"),  successor-by-operation  of law to anDATAco of
California, Inc., a California corporation ("anDATAco").

                                R E C I T A L S

     A. anDATAco has  heretofore  executed and delivered to Lender the following
(collectively,  together with all other  documents,  instruments  and agreements
executed  and  delivered  by  anDATAco  to  Lender in  connection  with the Loan
Agreement referred to below, the "Loan Documents"):

     1. A Loan Agreement (Line of Credit L/C Subfeature) with Lender dated as of
April 30,  1998 (as  amended,  supplemented  or  otherwise  modified,  the "Loan
Agreement");

     2. A Second  Amended  and  Restated  Line of Credit Note in favor of Lender
dated December 14, 1998 (as amended,  supplemented  or otherwise  modified,  the
"Note");

     3. A Security  Agreement  in favor of Lender dated as of April 30, 1998 (as
amended,  supplemented or otherwise  modified,  the "Security  Agreement").  The
Security  Agreement  secures the  obligations of anDATAco to Lender,  as further
described therein; and

     4. The UCC-1 Financing  Statements (and amendments  thereto) filed with the
applicable  jurisdictions on the applicable dates with the applicable instrument
numbers set forth on Exhibit A attached hereto.

     B. In  addition  to the  Loan  Documents,  anDATAco  also is a party to the
following:

     1. A Lien  Subordination  Agreement  dated as of April 30, 1998 with Lender
and Bell  Microproducts,  Inc. (as amended,  supplemented or otherwise modified,
the "Bell Subordination Agreement"); and

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     2.  A  Subordination  Agreement  dated  as of  July  13,  1999  with  nStor
Technologies,  Inc.,  a Delaware  corporation  ("Technologies"),  and Lender (as
amended,  supplemented or otherwise  modified,  the "Technologies  Subordination
Agreement").

     C.  Pursuant  to a series  of  transactions  (collectively,  the  "Merger")
described in an  Agreement of Merger dated as of April 26, 2000 among  anDATAco,
Andataco, Inc., a Massachusetts  corporation ("Former Guarantor") and nStor (the
"Merger Agreement"),  and other related  documentation  (collectively,  together
with the Merger Agreement,  the "Merger  Documents"),  the existence of anDATAco
and the  existence  of Former  Guarantor  as separate  legal  entities  has been
terminated and nStor has, by operation of law,  succeeded to the liabilities and
assets of anDATAco and Former Guarantor.

     D. Lender is  agreeable  to  continuing  the Loan  Documents in effect with
nStor  pursuant to and in  accordance  with the terms and  conditions  set forth
below and,  in  connection  therewith,  Lender and nStor have  agreed to certain
modifications to the "Assumed Documents" (as defined below) as set forth herein.

                                    AGREEMENT

     NOW,  THEREFORE,  in consideration of the terms and conditions  herein, and
for other good and valuable consideration, the receipt and adequacy of which are
acknowledged,  the parties hereto agree to the following covenants,  agreements,
amendments and modifications:

 1. Merger and Assumption.

     (a)  Pursuant  to the  Merger,  nStor has,  by effect of law,  assumed  all
liabilities  and assets of  anDATAco  and  Former  Guarantor,  and nStor  hereby
expressly and unconditionally  assumes,  agrees to pay,  discharge,  satisfy and
perform any and all  obligations  owing to Lender pursuant to the Loan Agreement
and the other Assumed Documents,  all with the same force and effect as if nStor
were  the  original  signatory  to the  Loan  Agreement  and the  other  Assumed
Documents.  For purposes hereof,  "Assumed Documents" shall mean,  collectively,
the Loan Documents and,  insofar and to the extent anDATAco was a party thereto,
the Bell Subordination Agreement and the Technologies Subordination Agreement.

     (b) The execution of this  Agreement by nStor shall be deemed its execution
of the Loan Agreement and the other Assumed  Documents.  This Agreement does not
constitute  the  creation  of a new  obligation  or  the  extinguishment  of the
obligations evidenced by the Loan Agreement or the other Assumed Documents,  nor
does it in any way affect or impair the liens of the  Assumed  Documents,  which
nStor  acknowledges  to be valid first liens on the property  described  therein
(except as otherwise set forth in the Assumed Documents).  nStor agrees that the
liens  of the  Assumed  Documents  shall  continue  in full  force  and  effect,
unimpaired and unaffected by this Agreement or by the Merger.


 2. Acknowledgment of anDATAco Indebtedness.

     (a) As of April 26, 2000, the principal balance  outstanding under the Note
was $5,550,134.92; and

     (b) Interest on the credit  facilities  evidenced by the Note has been paid
through September 1, 2000.


<PAGE>

3. Representations and Warranties. nStor makes the following representations and
warranties to Lender,  which  representations  and warranties  shall survive the
execution of this  Agreement  and shall  continue in full force and effect until
the full and final payment,  and satisfaction and discharge,  of all obligations
of nStor to Lender subject to the Loan Documents:

     (a) nStor is a corporation duly organized and existing and in good standing
under the laws of the State of  Delaware.  Technologies  is a  corporation  duly
organized and existing in good standing under the laws of the State of Delaware.
Each of nStor and  Technologies is qualified or licensed to do business,  and is
in good standing as a foreign corporation,  if applicable,  in all jurisdictions
in which such  qualification or licensing is required or in which the failure to
so qualify or to be so licensed could have a material adverse effect on nStor or
Technologies, as the case may be.

     (b) The  performance by each of nStor and  Technologies of each of the Loan
Documents  to which it is a party does not (a) violate any  provision of any law
or regulation,  or (b) contravene any provision of the Articles of Incorporation
or By-Laws  of such  party,  or (c)  result in a breach of or default  under any
contract,   obligation,   indenture  or  other  instrument  to  which  nStor  or
Technologies,  as  applicable,  is a party or by which it may be  bound,  or (d)
require the consent or approval of any Federal or state governmental authority.

     (c) There are no pending,  or to the best of nStor's knowledge  threatened,
actions,  claims,  investigations,  suits or proceedings before any governmental
authority,  arbitrator, court or administrative agency which reasonably could be
expected  to have a  material  adverse  effect  on the  financial  condition  or
operation of nStor other than those disclosed by nStor to Lender in writing.

     (d) nStor (a) has paid all income tax when due and  payable  each  year,and
(b) has no knowledge of any pending assessments or adjustments of its income tax
payable with respect to any year.

     (e) There is no agreement, indenture, contract or instrument to which nStor
is a party or by which nStor may be bound that  requires  the  subordination  in
right of payment of any of nStor's  obligations subject to the Loan Documents to
any other obligation of nStor.

     (f) nStor possesses, and will hereafter possess, all permits,  memberships,
franchises,  contracts and licenses required and rights to all trademarks, trade
names, if any,  patents,  and fictitious names necessary to enable it to conduct
the  business  in which it is now engaged in  compliance  with  applicable  law,
excluding  any such of the  foregoing  the failure of which to possess would not
reasonably be expected to have a material  adverse  effect on nStor's  financial
condition, business or operations.

     (g) nStor is in  compliance in all material  respects  with all  applicable
provisions of ERISA; nStor has not violated any provision of any Plan maintained
or contributed to by nStor; no Reportable Event as defined in ERISA has occurred
and is continuing with respect to any Plan initiated by nStor; nStor has met its
minimum  funding  requirements  under ERISA with respect to each Plan;  and each
Plan  will be able to  fulfill  its  benefit  obligations  as they  come  due in
accordance  with the Plan  documents  and under  generally  accepted  accounting
principles.

     (h) nStor is not in default  on any  obligation  for  borrowed  money,  any
purchase money  obligation or any other material  lease,  commitment,  contract,
instrument or obligation.  nStor is in compliance in all material  respects with
all requirements of all laws, rules,  regulations and orders of any governmental
authority  applicable  to nStor  or its  business  not  otherwise  addressed  by
provisions  of this Section 3. There are no security  interests in or liens upon
the  Collateral or any other  property  which is intended to be security for the
Line of Credit or the  liability of any Obligor in respect  thereof,  other than
security interests and liens permitted in the Assumed Documents.

     (i) Except as  disclosed  by nStor to Lender in  writing  prior to the date
hereof,  nStor is in  compliance in all material  respects  with all  applicable
Federal or state environmental,  hazardous waste, health and safety statutes and
any rules or regulations adopted pursuant thereto, which govern or affect any of
nStor's  operations  and/or  properties,   including  without  limitation,   the
Comprehensive  Environmental  Response,  Compensation and Liability Act of 1980,
the Superfund  Amendments and  Reauthorization Act of 1986, the Federal Resource
Conservation and Recovery Act of 1976, the Federal Toxic Substances  Control Act
and the  California  Health and Safety Code,  as any of the same may be amended,
modified or  supplemented  from time to time. None of the operations of nStor is
the  subject  of any  Federal  or state  investigation  evaluating  whether  any
remedial  action  involving  a  material  expenditure  is needed to respond to a
release of any toxic or hazardous waste or substance into the environment. nStor
has no material contingent liability in connection with any release of any toxic
or hazardous waste or substance into the environment.

<PAGE>

     (j) The  execution,  delivery and  performance of this Agreement are within
nStor's powers, have been duly authorized by all necessary action, have received
all  necessary  approvals  and  do not  contravene  any  law or any  contractual
restrictions binding on nStor.

     (k) This Agreement and, pursuant to the assumption  described  herein,  the
Assumed  Documents  are the legal,  valid and binding  obligations  of nStor and
Technologies,  as applicable,  enforceable  against nStor and  Technologies,  as
applicable, in accordance with their respective terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, arrangement, moratorium or
other  similar laws  relating to or  affecting  creditors'  rights  generally or
equitable  principles relating to the granting of specific performance and other
equitable remedies as a matter of judicial discretion.

     (l) After  giving  effect to this  Agreement,  no event has occurred and is
continuing or would result from this  Agreement  which  constitutes a default or
event of default,  however defined, under the Assumed Documents,  as amended and
modified hereby.

     (m) The Merger  has  become  effective  under  applicable  laws and all the
assets of anDATAco and Former Guarantor existing immediately prior to the Merger
have become  vested in nStor,  subject to all the  liabilities  of anDATAco  and
Former Guarantor  immediately prior to the Merger. All consents and approvals of
any governmental agency and any other entity necessary to effect the Merger have
been obtained and the Merger has been effected in compliance with all applicable
laws.

     (n) nStor agrees that it has no defense,  offset or counterclaim whatsoever
against  Lender with respect to its  liability  under the Loan  Agreement or any
other Assumed Document.

  4. Amendments to Loan Agreement.

     (a)  References  to Borrower.  All  references  to  "Borrower"  in the Loan
Agreement shall be deemed to be references to nStor.


<PAGE>

     (b) Section  1.3A.  The  following  new  Section  1.3A is added to the Loan
Agreement immediately following Section 1.3 of the Loan Agreement:

     "1.3A  'Book Net  Worth'  shall  mean,  at any time,  the  aggregate  total
stockholders'  equity  of  Borrower  (including   paid-in-capital  and  retained
earnings), as determined in accordance with GAAP."

     (c) Section 1.6.  Section 1.6 of the Loan Agreement is amended by replacing
the  parenthetical  "(other than Guarantor or W. David Sykes)"  therein with the
parenthetical "(other than Guarantor)".
     (d)  Section  1.13.  Section  1.13 of the  Loan  Agreement  is  amended  by
replacing the words "Andataco,  Inc., a Massachusetts  corporation" therein with
the words "nStor Technologies, Inc., a Delaware corporation".

     (e) Section 1.27.  Section 1.27(g) of the Loan Agreement is amended to read
in full as follows:

     "(g) any interest or title of a lessor in equipment  subject to any capital
lease  permitted  hereunder;  and"

     (f) Section 1.31.  Section 1.31 of the Loan Agreement is amended to read in
full as follows:

     "1.31 Intentionally Omitted."

     (g) Section  2.5.  Section 2.5 of the Loan  Agreement is amended to read in
full as follows:

     "2.5 Intentionally Omitted."

     (h) Section 3.2.  Section 3.2 of the Loan Agreement is amended by replacing
the reference to "2.00%" therein with "2.50%".

     (i)  Section  4.2.  Section  4.2(a) of the Loan  Agreement  is  amended  by
replacing the reference to "January 31, 1998" therein with "December 31, 1999".

     (j)  Section  7.1.  The  first two  sentences  of  Section  7.1 of the Loan
Agreement are amended to read in full as follows:


<PAGE>

     "Each of  Borrower  and  Guarantor  is a  corporation  duly  organized  and
existing and in good standing under the laws of the State of Delaware."

     (k) Section 7.5. The first sentence of Section 7.5 of the Loan Agreement is
amended by  replacing  the  reference  to  "January  31,  1998"  therein  with a
reference to "December 31, 1999".

     (l) Section 8.3. Section 8.3(a) of the Loan Agreement is amended to read in
full as follows:

     "(a) on or before 11 a.m.  each day,  a  schedule  of  Accounts,  including
without  limitation  daily  sales,  credit  and  adjustment  journals  and  cash
receipts;"

     (m)  Section  8.4.  Section  8.4(a) of the Loan  Agreement  is  amended  by
replacing  the  reference  to "Price  Waterhouse  LLP" therein with "BDO Seidman
LLP".

     (n) Section 8.10.  Section 8.10 of the Loan Agreement is amended to read in
full as follows:

     "8.10  Financial  Condition.  Maintain  Borrower's  financial  condition as
follows:

     (a) Book Net Worth not at any time during any period  specified  below less
than the amount set forth opposite such period,  to be measured as of the end of
each fiscal month of Borrower, provided that Lender agrees to reset the covenant
levels with respect to periods  subsequent to December 31, 2000 in Lender's sole
discretion  based  upon  Lender's  review  of the  annual  plans  and  financial
forecasts of Borrower delivered to Lender pursuant to Section 8.4(f):

Period                                            Minimum Book Net Worth
------                                            ----------------------
September 30, 2000                                 $12,600,000
October 1, 2000 and thereafter                     $12,125,000

     (b) Unfunded  capital  expenditures not greater than $500,000 in any fiscal
year. For purposes of this section,  "unfunded" capital  expenditures shall mean
capital  expenditures  made by Borrower  that are not financed by or through the
incurrence of debt (including, without limitation, financed with the proceeds of
any  Revolving  Loans  hereunder)  or otherwise  made with the proceeds of other
sources of capital (other than internally generated funds of Borrower).


<PAGE>

     (c) Net Income (as defined  below) for each period  specified  below of not
less than the amount set forth  opposite  such period,  to be measured as of the
end of each fiscal quarter of Borrower, provided that Lender agrees to reset the
covenant  levels with  respect to periods  subsequent  to  December  31, 2000 in
Lender's  sole  discretion  based upon  Lender's  review of the annual plans and
financial  forecasts of Borrower delivered to Lender pursuant to Section 8.4(f),
provided  further that for purposes of this section 'Net Income' with respect to
any  period  shall mean the sum of (i) net income of  Borrower  for such  period
determined in accordance with GAAP minus (ii) any extraordinary gain (other than
the gain  realized  with respect to the sale of certain  assets of Borg Adaptive
Technologies, Inc.) reflected in such net income:

Period                                               Minimum Net Income
-------                                              ------------------
Six months ending June 30, 2000                       - $  250,000
Nine months ending September 30, 2000                 - $1,225,000
Twelve months ending December 31, 2000                - $1,600,000

     (o) Section 8.13.  Section 8.13 of the Loan Agreement is amended to read in
full as follows:

     "8.13 Intentionally Omitted."

     (p) Section 8.15.  Section 8.15 of the Loan Agreement is amended to read in
full as follows:

     "8.15 Intentionally Omitted."

     (q) Section 8.16.  Section 8.16 of the Loan Agreement is amended to read in
full as follows:

     "8.16 Intentionally Omitted."

     (r) Section 9.1. The first sentence of Section 9.1 of the Loan Agreement is
amended to read in full as follows:

     "Create,  incur,  assume or permit to exist any indebtedness or liabilities
resulting  from  borrowings,  loans or advances,  whether  secured or unsecured,
matured or unmatured,  liquidated or unliquidated,  joint or several, except (a)
the  liabilities  of  Borrower to Lender and any other  liabilities  of Borrower
existing  as of,  and  disclosed  to  Lender  prior to,  the date  hereof in the
Information  Certificate or in Schedule 9.1 attached  hereto,  (b)  indebtedness
secured by Permitted  Liens,  and (c)  indebtedness  secured by liens  permitted
pursuant to Section  9.6(c) not  exceeding the cost or fair market value thereof
 ."


<PAGE>

     (s) Section  9.4.  Section 9.4 of the Loan  Agreement is amended to read in
full as follows:

     "9.4  Loans,  Advances,  Investments.  Make  any  loans or  advances  to or
investments  in any person or entity,  except (a)  advances to  employees in the
ordinary course of business not to exceed $100,000  outstanding at any time, (b)
loans or advances to  Technologies  for the payment by Technologies of operating
and administrative  expenses of Technologies in an amount not to exceed $800,000
per fiscal year, and (c), so long as no Event of Default shall have occurred and
be continuing (or would occur upon the giving of notice, the passage of time, or
both, or after giving effect  thereto),  loans or advances to Technologies in an
amount not to exceed $73,000 per month,  the proceeds of which loans or advances
Technologies  shall  expressly  warrant  will be  used  solely  (i) to pay  cash
dividends  on  Technologies'  Series D  preferred  stock at a dividend  rate not
greater than the dividend rate in effect as of the date hereof for such 'Series'
of preferred stock or (ii) to pay cash dividends on  Technologies'  Series E and
Series F preferred stock at dividend rates not greater than 8% per annum for the
period from June 8, 1999 through June 7, 2000,  9% per annum for the period from
June 8, 2000  through  June 7, 2001,  and 10% per annum for the period  from and
after June 8, 2001."

     (t) Section  9.6.  Section 9.6 of the Loan  Agreement is amended to read in
full as follows:

     "9.6.  Pledge  of  Assets.  Mortgage,  pledge,  grant or  permit to exist a
security  interest in, or lien upon, any of its assets of any kind, now owned or
hereafter  acquired,  except (a)  Permitted  Liens,  (b) any of the foregoing in
favor of Lender and except as set forth in the Information Certificate,  and (c)
purchase money security  interests  relating to the acquisition of machinery and
equipment by Borrower  provided that, (i) at the time of each such  acquisition,
no Event of Default  shall be in existence or would result  therefrom,  and (ii)
the  applicable  purchase  money  security  interests  shall be  limited  to the
machinery and equipment purchased."

     (u) Section  9.9.  Section 9.9 of the Loan  Agreement is amended to read in
full as follows:


<PAGE>

     "9.9 Intentionally Omitted."

     (v)  Section  10.1(m).  The last  sentence  of Section  10.1(m) of the Loan
Agreement is amended to read in full as follows:  "Senior Management means Larry
Hemmerich."

     (w) Section  11.1(c).  The table  appearing in Section  11.1(c) of the Loan
Agreement is amended to read in full as follows:

"Amount                                               Period
-------                                               ------
(i) 2% of Maximum Amount           Date hereof to and including the first
                                   anniversary date hereof

(ii) 1% of Maximum Amount          First anniversary date hereof to and
                                   including the second anniversary date hereof

(iii).5%(one half of one percent)  Second anniversary date hereof to and
       of Maximum Amount           including the fourth anniversary date hereof"

     (x)  Section  11.3.  The notice  address  for  Borrower  and its counsel in
Section 11.3 of the Loan Agreement is amended to read in full as follows:

"BORROWER:              nStor Corporation, Inc.
                        10140 Mesa Rim Road
                        San Diego, California 92121
                        Attention: David Wright
                        Telecopier: (858) 458-1613
                        Telephone: (858) 646-1543

with a copies to:       nStor Corporation, Inc.
                        100 Century Boulevard
                        West Palm Beach, Florida 33417
                        Attention: Jack Jaiven
                        Telecopier: (561) 640-3160
                        Telephone: (561) 640-3105

<PAGE>

                        Akerman, Senterfitt & Eidson, P.A.
                        Las Olas Centre II
                        350 East Las Olas Boulevard
                        Suite 1600
                        Fort Lauderdale, Florida 33301
                        Attention: Donn Beloff
                        Telecopier: (954) 463-2224
                        Telephone: (954) 468-2478"

     (y)  Exhibit A.  Exhibit A to the Loan  Agreement  is replaced by Exhibit A
attached hereto as Annex 1.

     (z)  Exhibit B.  Exhibit B to the Loan  Agreement  is replaced by Exhibit B
attached hereto as Annex 2.

     (aa) Amendment No. 1 to Loan Agreement. Paragraph 1.1 of Amendment No. 1 to
Loan Agreement  dated as of July 29, 1998 between Lender and anDATAco is amended
to read in full as follows:

     "1.1 Intentionally Omitted."

     5. Amendments to Assumed  Documents other than Loan Agreement.  The Assumed
Documents other than the Loan Agreement  (collectively,  the "Remaining  Assumed
Documents") are amended as follows:

 (a)  References to Borrower.  All references to "Borrower" in the Remaining
     Assumed Documents (other than the Note) shall be deemed to be references to
     nStor.  The Note shall be amended and restated in its entirety by the Third
     Amended and Restated Line of Credit Note delivered to Lender as provided in
     Section 6(a)(ii) of this Agreement.

     (b) Notices to nStor.  Notwithstanding  anything contained in the Remaining
Assumed  Documents  to the  contrary,  all notices to nStor with  respect to the
Remaining Assumed Documents shall be sent to the replacement addresses set forth
in Section 4(j) of this Agreement.


     6. Documentation.

     (a) nStor agrees to deliver or cause to be delivered to Lender on or before
September19,  2000,  each of the following  documents,  in each case in form and
substance satisfactory to Lender:

     (i)  An  executed  original  of  this  Agreement   executed  by  nStor  and
Technologies.

     (ii) An executed  original of the Third Amended and Restated Line of Credit
Note executed by nStor in the form attached hereto as Annex 2.

     (iii)  An  executed   original  of  a  continuing   guaranty   executed  by
Technologies  in favor of Lender  with  respect to the  obligations  of nStor to
Lender (the "Guaranty").

     (iv) Copies of the Merger  Agreement (as filed) and all of the other Merger
Documents, in each case certified as true, correct and complete by a responsible
official of nStor.

     (v)  Such  UCC-2  Financing   Statement   Amendments  and  UCC-1  Financing
Statements  as required by Lender,  in each case executed by nStor and in proper
form for filing and/or recording in all applicable jurisdictions.

  (b)
nStor agrees to deliver or cause to be delivered to Lender on or before  October
31, 2000,  each of the following  documents,  in each case in form and substance
satisfactory to Lender:

     (i) An  executed  original  of a  patent  collateral  assignment  agreement
executed by nStor (the "Patent Agreement").

     (ii) An executed original of a trademark  collateral  assignment  agreement
executed  by nStor (the  "Trademark  Agreement",  and  together  with the Patent
Agreement, the "IP Collateral Documents").

     (iii) (A) An  executed  original of a  warehouse  bailment  letter from the
owner of each of the  following  warehouses  where  inventory  of  nStor  and/or
anDATAco  is  located:  (i) Gemini  Storage,  6550 Mira Mesa  Blvd.,  San Diego,
California 92121, and (ii) North American Logistics, 1927 N. Elder, Nampa, Idaho
83687; and (B) a replacement or reaffirmation of the  waiver/consent  previously
executed by the owner of the premises located at 10140 Mesa Rim Road, San Diego,
California 92121.


<PAGE>

     (iv) Such  documentation as Lender  reasonably may require to establish the
due  organization,  valid existence and good standing of nStor and Technologies,
their  respective  qualification  to engage in business in each  jurisdiction in
which each such party is engaged in business  or  required  to be so  qualified,
nStor's  authority to execute,  deliver and perform this Agreement and, by doing
so, each of the Assumed Documents,  Technologies' authority to execute,  deliver
and perform the  Guaranty,  and the  identity,  authority  and  capacity of each
responsible  official  of each such  party,  authorized  to act on such  party's
behalf,  including  without  limitation,  certified  copies of each such party's
certificate  of  incorporation  and  amendments  thereto,  bylaws and amendments
thereto,  certificates  of good  standing  and/or  qualification  to  engage  in
business, tax status certificates,  certificates of organizational  resolutions,
incumbency certificates, and the like.

     (v) A replacement  Letter of Credit Agreement executed by nStor in favor of
Lender, or its agent.

     (vi) A  notice/reaffirmation  regarding the continued  effectiveness of the
Bell  Subordination  Agreement  executed by nStor,  and, if requested by Lender,
Bell Microproducts, Inc.

     (vii)  A  reaffirmation   regarding  the  continued  effectiveness  of  the
Technologies Subordination Agreement executed by nStor and Technologies.

     (viii) UCC termination  statement(s)  executed by Seagate Technology,  Inc.
("Seagate")  regarding any and all UCC financing statements executed by anDATAco
in favor of Seagate.

     (ix) An original executed opinion of counsel issued by Akerman,  Senterfitt
& Eidson,  P.A.,  counsel for nStor and  Technologies,  regarding the formation,
existence and  authorization of nStor and  Technologies,  the  enforceability of
this  Agreement,  the IP Collateral  Documents,  the  Guaranty,  and the Assumed
Documents as assumed by nStor, and such other matters as Lender shall require.

     (x) Such  other  documents  and  agreements  which are  required  by Lender
pursuant to this Agreement or which Lender reasonably requests.

     7. Accommodation Fee.  Concurrently with the execution of this Agreement by
nStor, nStor agrees to pay to Lender a non-refundable supplemental accommodation
fee  in  the  amount  of  $5,000.   Lender  acknowledges   receipt  of  a  prior
non-refundable accommodation fee of $15,000 on or about May 1, 2000.

     8. Security Interest;  Knowledge of Assumed Documents.  nStor hereby grants
to Lender a security  interest in the  "Collateral"  as defined in the  Security
Agreement.  nStor  warrants that it has full personal  knowledge of all terms of
the  Assumed  Documents.  nStor  understands  and  acknowledges  that  except as
expressly provided herein or in the Assumed Documents, Lender has not waived any
right of Lender or  obligation  of nStor under the Assumed  Documents and Lender
has not agreed to any  modification or extension of any provision of any Assumed
Document.


<PAGE>

     9. Indemnity.  nStor indemnifies Lender against,  and holds Lender harmless
from,  any and all losses,  damages  (whether  general,  punitive or otherwise),
liabilities,   claims,   causes  of  actions   (whether   legal,   equitable  or
administrative),  judgments,  court  costs  or other  legal  or  other  expenses
(including  reasonable  attorneys'  fees) which  Lender may suffer or incur as a
direct or  indirect  consequence  of the Merger and  nStor's  assumption  of the
Assumed  Documents  and the  obligations  evidenced  thereby.  Immediately  upon
Lender's  demand,  nStor  shall pay Lender any  amounts due and owing under this
indemnity  with interest from the date such amounts become due until paid at the
default rate of interest specified in the Note. nStor's duty to indemnify Lender
shall survive the cancellation or termination of the Loan Agreement.

     10.  Reinstatement.  In addition  to the  foregoing  indemnity,  should the
consummation  of the  Merger  be  challenged  or  otherwise  rescinded  (whether
voluntarily  or  involuntarily,  by  court  order  or  otherwise),  the  Assumed
Documents  (and the liability of anDATAco  thereunder)  shall be reinstated  and
revived in accordance  with their  original  terms as if this  Agreement did not
exist.  In such event,  the rights and duties of all parties shall be determined
as if this Agreement had not been executed.

     11.  Confirmation  of Liens.  Nothing  contained  herein shall affect or be
construed to affect any lien,  security interest,  charge or encumbrance created
by any Assumed Document or the priority of that lien, security interest,  charge
or encumbrance over other liens, security interests, charges or encumbrances.

     12.  Integration;  Interpretation.  The Assumed  Documents,  including this
Agreement, contain or expressly incorporate by reference the entire agreement of
the parties with respect to the matters  contemplated  herein and  supersede all
prior  negotiations.  The  Assumed  Documents  shall not be  modified  except by
written instrument executed by all applicable  parties.  Any reference herein to
the Assumed Documents  includes any amendments,  renewals or extensions  thereof
approved  by  Lender.  Except  as  expressly  modified  hereby,  all  terms  and
conditions  of the  Assumed  Documents  shall  continue in full force and effect
without  waiver  or  modification,  and  Lender  reserves  all  of  its  rights,
privileges and remedies in connection therewith.

     13. Successors and Assigns.  This Agreement is binding upon and shall enure
to the  benefit of the  successors  and assigns of the  parties,  subject to all
prohibitions of transfers contained in any Assumed Document.

     14. Costs and  Expenses.  nStor shall  reimburse  Lender  immediately  upon
demand the full amount of costs and expenses,  including  reasonable  attorneys'
fees (to  include  outside  counsel  fees and all  allocated  costs of  Lender's
in-house  counsel)  incurred by Lender in connection with this Agreement and all
documents, instruments and agreements in connection herewith.


<PAGE>

     15.  Attorneys'  Fees;  Enforcement.  In addition to the foregoing,  if any
attorney is engaged by Lender to enforce,  construe or defend any  provision  of
this Agreement or as a consequence of any default under this Agreement,  with or
without the filing of any legal action or  proceeding,  nStor shall be liable to
pay to Lender immediately upon demand,  the amount of all reasonable  attorneys'
fees and costs  incurred  by  Lender  in  connection  therewith,  together  with
interest  thereon  from the date of such demand at the default  rate of interest
specified in the Note.

     16. Miscellaneous. This Agreement is one of the Assumed Documents and shall
be  governed  by and  interpreted  in  accordance  with the laws of the State of
California.  Time is of the  essence  of each  term  of the  Assumed  Documents,
including this Agreement. If any provision of this Agreement or any of the other
Assumed Documents shall be determined by a court of competent jurisdiction to be
invalid,  illegal  or  unenforceable,  that  portion  shall  be  deemed  severed
therefrom  and the  remaining  part  shall  remain in full  force as though  the
invalid,  illegal,  or unenforceable  portion had not been a part thereof.  This
Agreement may be executed in counterparts,  which counterparts, when so executed
and delivered shall together constitute but one original.


<PAGE>


IN WITNESS  WHEREOF,  the parties  hereto have executed this Agreement as of the
date first set forth above.

                                                "nStor"

                                                nStor Corporation, Inc.,
                                                a Delaware corporation

                                                By: /s/ Jack Jaiven
                                                Title: Vice President

                                                "Lender"

                                                Wells Fargo Credit, Inc.
                                                By: /s/ Angelo Samperisi
                                                Title: Vice President

ACKNOWLEDGED AND AGREED:

nStor Technologies, Inc.,
a Delaware corporation

By: /s/ Jack Jaiven
Title: Vice President


<PAGE>


                                                EXHIBIT 10.2

                 THIRD AMENDED AND RESTATED LINE OF CREDIT NOTE

$10,000,000.00                                          September 14, 2000

FOR VALUE  RECEIVED,  the  undersigned,  nSTOR  CORPORATION,  INC.,  a  Delaware
corporation  (successor-by-operation  of law to anDATAco of California,  Inc., a
California corporation)("Borrower"), promises to pay to the order of WELLS FARGO
CREDIT,   INC.   (successor   in  interest   to  Wells   Fargo  Bank,   National
Association)("Bank")  at its  office at 245 S. Los  Robles  Avenue,  Suite  600,
Pasadena, California, or at such other place as the holder hereof may designate,
in lawful  money of the United  States of America and in  immediately  available
funds,  the principal sum of Ten Million  Dollars  ($10,000,000.00),  or so much
thereof as may be advanced  and be  outstanding,  with  interest  thereon as set
forth herein.  This Note amends and restates in its entirety that certain Second
Amended and Restated  Line of Credit Note dated  December 14, 1998  executed and
delivered by anDATAco of  California,  Inc., a  California  corporation,  to the
order of Wells Fargo  Bank,  National  Association,  in the  original  principal
amount of up to  $10,000,000.00  (the "Prior  Note").  Amounts  outstanding  and
committed  under the Prior Note shall,  upon the  effectiveness  of this Note be
deemed to be outstanding and committed hereunder and evidenced hereby,  subject,
however,  to all terms and  conditions  hereunder  and under the Loan  Agreement
described below.

A. DEFINITIONS:

     As used herein, the following terms shall have the meanings set forth after
each:

     1. "Applicable  LIBOR Margin" means (a) so long as neither the Initial Rate
Reduction  Date or the  Supplemental  Rate  Reduction  Date shall have occurred,
4.375%, (b) from and after the occurrence (if any) of the Initial Rate Reduction
Date, but prior to the occurrence  (if any) of the  Supplemental  Rate Reduction
Date, 3.875%, and (c) from and after the occurrence (if any) of the Supplemental
Rate Reduction Date, 3.375%.

     2. "Applicable  Prime Rate Margin" means (a) so long as neither the Initial
Rate Reduction Date or the Supplemental Rate Reduction Date shall have occurred,
1.500%, (b) from and after the occurrence (if any) of the Initial Rate Reduction
Date, but prior to the occurrence  (if any) of the  Supplemental  Rate Reduction
Date, 1.000%, and (c) from and after the occurrence (if any) of the Supplemental
Rate Reduction Date, 0.500%.

     3. "Business Day" means any day except a Saturday,  Sunday or any other day
designated as a holiday under Federal or California statute or regulation.

     4.  "Fixed  Rate Term"  means a period  commencing  on a  Business  Day and
continuing for one (1), two (2),  three (3) or six (6) months,  as designated by
Borrower,  during which all or a portion of the outstanding principal balance of
this Note bears  interest  determined  in  relation  to Bank's  LIBOR;  provided
however, that (i) no Fixed Rate Term may be selected for a principal amount less
than One  Million  Dollars  ($1,000,000);  (ii) no Fixed Rate Term shall  extend
beyond  the  scheduled  maturity  date  hereof;  (iii) no Fixed Rate Term may be
selected  during the continuance of an Event of Default (as such term is defined
in the Loan Agreement  described  below);  and (iv) no more than eight (8) Fixed
Rate Terms may be in existence at any time.  If any Fixed Rate Term would end on
a day which is not a Business  Day,  then such Fixed Rate Term shall be extended
to the next succeeding Business Day.

     5. "Initial Rate Reduction  Date" means the first day of the calendar month
immediately  following  Borrower's  delivery  of  financial  statements  to Bank
reflecting that, as of the date of such financial statements, (a) Borrower's Net
Income for each of the three consecutive  fiscal months ending as of the date of
such financial statements was not less than $1.00 and (b) Borrower's  cumulative
Net Income for such three-month period exceeded $150,000.00.

     6. "LIBOR" means the rate per annum (rounded upward,  if necessary,  to the
nearest whole 1/8 of 1%) and determined pursuant to the following formula:

LIBOR =                         Base LIBOR
                        -------------------------------
                        100% - LIBOR Reserve Percentage

     (a) "Base LIBOR" means the rate per annum for United States dollar deposits
quoted by Bank as the  Inter-Bank  Market Offered Rate,  with the  understanding
that such rate is quoted by Bank for the purpose of calculating  effective rates
of interest for loans making reference thereto, on the first day of a Fixed Rate
Term for delivery of funds on said date for a period of time approximately equal
to the  number of days in such  Fixed  Rate Term and in an amount  approximately
equal to the principal  amount to which such Fixed Rate Term  applies.  Borrower
understands and agrees that Bank may base its quotation of the Inter-Bank Market
Offered  Rate upon such  offers or other  market  indicators  of the  Inter-Bank
Market as Bank in its discretion deems  appropriate  including,  but not limited
to, the rate offered for U.S. dollar deposits on the London Inter-Bank Market.

     (b) "LIBOR Reserve  Percentage" means the reserve percentage  prescribed by
the Board of  Governors of the Federal  Reserve  System (or any  successor)  for
"Eurocurrency  Liabilities"  (as defined in Regulation D of the Federal  Reserve
Board,  as  amended),  adjusted  by Bank for  expected  changes in such  reserve
percentage during the applicable Fixed Rate Term.

     7. "Net Income" shall have the meaning  specified in Section 8.10(c) of the
Loan Agreement referenced below.

     8.  "Prime  Rate"  means at any time the  rate of  interest  most  recently
announced within Wells Fargo Bank, National  Association (WFB") at its principal
office in San Francisco as its Prime Rate, with the understanding that the Prime
Rate is one of WFB's base  rates and  serves as the basis  upon which  effective
rates of interest are calculated for those loans making reference  thereto,  and
is evidenced by the recording  thereof after its  announcement  in such internal
publication or publications as WFB may designate.

     9.  "Supplemental  Rate Reduction Date" means the first day of the calendar
month immediately  following Borrower's delivery of financial statements to Bank
reflecting that, as of the date of such financial statements, (a) Borrower's Net
Income for each of the six consecutive  fiscal months ending on the date of such
financial  statements was not less than $1.00 and (b) Borrower's  cumulative Net
Income for such six-month period exceeded $325,000.

B. INTEREST:

<PAGE>

     1.  Interest.  The  outstanding  principal  balance of this Note shall bear
interest  (computed on the basis of a 360-day year,  actual days elapsed) either
(i) at a fluctuating  rate per annum equal to the Prime Rate in effect from time
to time plus the Applicable Prime Rate Margin, or (ii) at a fixed rate per annum
determined  by Bank in good  faith to be LIBOR in effect on the first day of the
applicable  Fixed Rate Term plus the Applicable  LIBOR Margin.  When interest is
determined  in relation  to the Prime Rate,  each change in the rate of interest
hereunder shall become effective on the date each Prime Rate change is announced
within  WFB.  With  respect to each LIBOR  selection  hereunder,  Bank is hereby
authorized to note the date, principal amount, interest rate and Fixed Rate Term
applicable  thereto and any  payments  made  thereon on Bank's books and records
(either manually or by electronic entry) and/or on any schedule attached to this
Note,  which  notations  shall be prima facie  evidence  of the  accuracy of the
information noted.

     2. Selection of Interest Rate Options. At any time any portion of this Note
bears  interest  determined in relation to Bank's LIBOR,  it may be continued by
Borrower at the end of the Fixed Rate Term  applicable  thereto so that all or a
portion  thereof bears  interest  determined in relation to the Prime Rate or in
relation to Bank's LIBOR for a new Fixed Rate Term  designated  by Borrower.  At
any time any portion of this Note bears  interest  determined in relation to the
Prime  Rate,  Borrower  may  convert  all or a portion  thereof so that it bears
interest determined in relation to Bank's LIBOR for a Fixed Rate Term designated
by Borrower.  At the time each advance is requested hereunder or Borrower wishes
to select the LIBOR  option for all or a portion  of the  outstanding  principal
balance hereof, and at the end of each Fixed Rate Term, Borrower shall give Bank
notice  specifying  (a) the interest rate option  selected by Borrower,  (b) the
principal amount subject thereto,  and (c) if the LIBOR option is selected,  the
length of the  applicable  Fixed  Rate  Term.  Any such  notice  may be given by
telephone so long as, with respect to each LIBOR  selection,  (i) Bank  receives
written  confirmation from Borrower not later than three (3) Business Days after
such telephone  notice is given,  and (ii) such notice is given to Bank prior to
10:00 a.m.,  California  time, on the first day of the Fixed Rate Term. For each
LIBOR option requested  hereunder,  Bank will quote the applicable fixed rate to
Borrower at approximately  10:00 a.m.,  California time, on the first day of the
Fixed Rate Term.  If  Borrower  does not  immediately  accept the rate quoted by
Bank,   any   subsequent   acceptance   by  Borrower   shall  be  subject  to  a
redetermination by Bank of the applicable fixed rate; provided however,  that if
Borrower  fails to accept any such rate by 11:00 a.m.,  California  time, on the
Business Day such quotation is given, then the quoted rate shall expire and Bank
shall have no obligation to permit a LIBOR option to be selected on such day. If
no specific designation of interest is made at the time any advance is requested
hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to have
made a Prime Rate interest selection for such advance or the principal amount to
which such Fixed Rate Term applied.

     3. Additional LIBOR Provisions.

     (a) If Bank at any time shall  determine  that for any reason  adequate and
reasonable  means do not exist for  ascertaining  Bank's LIBOR,  then Bank shall
promptly give notice thereof to Borrower. If such notice is given and until such
notice has been withdrawn by Bank,  then (i) no new LIBOR option may be selected
by Borrower,  and (ii) any portion of the outstanding  principal  balance hereof
which bears interest  determined in relation to Bank's LIBOR,  subsequent to the
end of the Fixed Rate Term applicable thereto, shall bear interest determined in
relation to the Prime Rate.

     (b) If any law,  treaty,  rule,  regulation or  determination of a court or
governmental  authority  or  any  change  therein  or in the  interpretation  or
application  thereof  (each,  a "Change in Law") shall make it unlawful for Bank
(i) to make LIBOR  options  available  hereunder,  or (ii) to maintain  interest
rates based on Bank's LIBOR, then in the former event, any obligation of Bank to
make available such unlawful LIBOR options shall immediately be canceled, and in
the latter event, any such unlawful  LIBOR-based interest rates then outstanding
shall be  converted,  at Bank's  option,  so that interest on the portion of the
outstanding  principal  balance subject thereto is determined in relation to the
Prime Rate;  provided  however,  that if any such Change in Law shall permit any
LIBOR-based interest rates to remain in effect until the expiration of the Fixed
Rate Term applicable  thereto,  then such permitted  LIBOR-based  interest rates
shall continue in effect until the expiration of such Fixed Rate Term.  Upon the
occurrence  of  any  of  the  foregoing  events,  Borrower  shall  pay  to  Bank
immediately  upon demand such amounts as may be necessary to compensate Bank for
any fines, fees,  charges,  penalties or other costs incurred or payable by Bank
as a result  thereof  and  which are  attributable  to any  LIBOR  options  made
available to Borrower  hereunder,  and any  reasonable  allocation  made by Bank
among its operations shall be conclusive and binding upon Borrower.


<PAGE>

     (c) If any  Change  in Law or  compliance  by  Bank  with  any  request  or
directive  (whether  or not  having the force of law) from any  central  bank or
other governmental authority shall:

     (i) subject Bank to any tax, duty or other charge with respect to any LIBOR
options,  or change the basis of  taxation  of  payments  to Bank of  principal,
interest,  fees or any other amount payable hereunder (except for changes in the
rate of tax on the overall net income of Bank); or

     (ii)  impose,  modify or hold  applicable  any  reserve,  special  deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities  in or for the  account  of,  advances  or loans  by,  or any  other
acquisition of funds by any office of Bank; or

     (iii) impose on Bank any other condition;

     and the result of any of the  foregoing  is to increase the cost to Bank of
making, renewing or maintaining any LIBOR options hereunder and/or to reduce any
amount  receivable  by Bank in  connection  therewith,  then in any  such  case,
Borrower  shall pay to Bank  immediately  upon  demand  such  amounts  as may be
necessary to compensate  Bank for any  additional  costs incurred by Bank and/or
reductions  in amounts  received  by Bank which are  attributable  to such LIBOR
options.  In  determining  which costs  incurred by Bank  and/or  reductions  in
amounts received by Bank are attributable to any LIBOR options made available to
Borrower hereunder,  any reasonable allocation made by Bank among its operations
shall be conclusive and binding upon Borrower.

     4. Payment of Interest.  Interest  accrued on this Note shall be payable on
the first  (1st) day of each month,  commencing  October 1, 2000 and on the last
day of each Fixed Rate Term.

     5. Default  Interest.  During the  continuance of an Event of Default,  the
outstanding  principal  balance of this Note shall bear  interest  until paid in
full at an increased  rate per annum  (computed on the basis of a 360-day  year,
actual days  elapsed)  equal to two percent (2%) above the rate of interest from
time to time applicable to this Note.

     C. BORROWING AND REPAYMENT:

     1. Borrowing and Repayment.  Borrower may from time to time during the term
of this Note borrow,  partially or wholly repay its outstanding borrowings,  and
reborrow,  subject to all of the limitations,  terms and conditions of this Note
and of any document executed in connection with or governing this Note; provided
however, that the total outstanding  borrowings under this Note shall not at any
time exceed the principal amount stated above.  The unpaid principal  balance of
this obligation at any time shall be the total amounts advanced hereunder by the
holder  hereof  less the  amount of  principal  payments  made  hereon by or for
Borrower,  which balance may be endorsed hereon from time to time by the holder.
The outstanding  principal balance of this Note shall be due and payable in full
on April 30, 2002.

     2. Advances.  Advances hereunder,  to the total amount of the principal sum
stated  above,  may be made by the holder at the oral or written  request of (a)
David Wright,  Jack Jaiven or Larry  Hemmerich,  any one acting  alone,  who are
authorized to request  advances and direct the disposition of any advances until
written  notice of the revocation of such authority is received by the holder at
the office  designated  above,  or (b) any  person,  with  respect  to  advances
deposited  to the  credit of any  account of  Borrower  with the  holder,  which
advances, when so deposited, shall be conclusively presumed to have been made to
or for the benefit of Borrower  regardless  of the fact that persons  other than
those  authorized  to request  advances may have  authority to draw against such
account.  The holder shall have no  obligation  to determine  whether any person
requesting an advance is or has been authorized by Borrower.


<PAGE>

     3.  Application  of  Payments.  Each  payment  made on this  Note  shall be
credited  first,  to any  interest  then  due  and  second,  to the  outstanding
principal  balance hereof.  All payments  credited to principal shall be applied
first,  to the outstanding  principal  balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding
principal  balance of this Note which bears  interest  determined in relation to
Bank's LIBOR, with such payments applied to the oldest Fixed Rate Term first.

     4. Prepayment.

     (a) Prime Rate.  Borrower may prepay  principal on any portion of this Note
which bears  interest  determined  in relation to the Prime Rate at any time, in
any amount and without penalty.

     (b) LIBOR.  Borrower may prepay principal on any portion of this Note which
bears  interest  determined  in relation to Bank's  LIBOR at any time and in the
minimum amount of One Million Dollars  ($1,000,000);  provided however,  that if
the outstanding principal balance of such portion of this Note is less than said
amount, the minimum prepayment amount shall be the entire outstanding  principal
balance thereof.  In  consideration of Bank providing this prepayment  option to
Borrower,  or if any such  portion of this Note shall  become due and payable at
any time  prior to the last day of the Fixed  Rate Term  applicable  thereto  by
acceleration or otherwise,  Borrower shall pay to Bank immediately upon demand a
fee which is the sum of the discounted  monthly  differences for each month from
the month of prepayment through the month in which such Fixed Rate Term matures,
calculated as follows for each such month:

     (i) Determine the amount of interest which would have accrued each month on
the  amount  prepaid  at the  interest  rate  applicable  to such  amount had it
remained  outstanding  until  the last day of the  Fixed  Rate  Term  applicable
thereto.

     (ii)  Subtract  from the  amount  determined  in (i)  above  the  amount of
interest  which would have accrued for the same month on the amount  prepaid for
the remaining term of such Fixed Rate Term at Bank's LIBOR in effect on the date
of prepayment  for new loans made for such term and in a principal  amount equal
to the amount prepaid.

     (iii) If the result  obtained  in (ii) for any month is greater  than zero,
discount that difference by Bank's LIBOR used in (ii) above.

     Borrower  acknowledges  that  prepayment  of such amount may result in Bank
incurring  additional  costs,  expenses  and/or  liabilities,  and  that  it  is
difficult  to  ascertain  the  full  extent  of  such  costs,   expenses  and/or
liabilities.  Borrower,  therefore, agrees to pay the above-described prepayment
fee and  agrees  that  said  amount  represents  a  reasonable  estimate  of the
prepayment costs,  expenses and/or liabilities of Bank. If Borrower fails to pay
any prepayment fee when due, the amount of such prepayment fee shall  thereafter
bear  interest  until paid at a rate per annum two percent  (2%) above the Prime
Rate in effect  from  time to time  (computed  on the  basis of a 360-day  year,
actual days elapsed).


<PAGE>

     D. EVENTS OF DEFAULT:

     This Note is made pursuant to and is subject to the terms and conditions of
that certain Loan Agreement  between anDATAco of California,  Inc., a California
corporation  (predecessor  in  interest  to  Borrower),  and Wells  Fargo  Bank,
National  Association  (predecessor in interest to Bank),  dated as of April 30,
1998,  as amended from time to time (the "Loan  Agreement").  Any default in the
payment or performance  of any obligation  under this Note, or any defined event
of default  under the Loan  Agreement,  shall  constitute  an "Event of Default"
under this Note.

     E. MISCELLANEOUS:

     1.  Remedies.  Upon the  occurrence of any Event of Default,  the holder of
this Note,  at the  holder's  option,  may  declare  all sums of  principal  and
interest  outstanding  hereunder  to be  immediately  due  and  payable  without
presentment,  demand,  protest or notice of dishonor, all of which are expressly
waived by  Borrower,  and the  obligation,  if any,  of the holder to extend any
further credit hereunder shall immediately  cease and terminate.  Borrower shall
pay to the  holder  immediately  upon  demand the full  amount of all  payments,
advances, charges, costs and expenses,  including reasonable attorneys' fees (to
include outside  counsel fees and all allocated  costs of the holder's  in-house
counsel),  incurred  by the holder in  connection  with the  enforcement  of the
holder's  rights  and/or the  collection  of any amounts which become due to the
holder under this Note, and the  prosecution or defense of any action in any way
related to this Note,  including without limitation,  any action for declaratory
relief,  and  including any of the  foregoing  incurred in  connection  with any
bankruptcy proceeding relating to Borrower.

     2.  Governing  Law.  This  Note  shall  be  governed  by and  construed  in
accordance with the laws of the State of California.

     3.  Effectiveness.  Notwithstanding the date of execution of this Note, the
terms and conditions  hereof  (including the interest rate(s)  specified herein)
shall be deemed to have been effective as of April 1, 2000.


                                             nStor Corporation,  Inc.,
                                             a Delaware  corporation

                                             By:  /s/ Jack Jaiven
                                             ---------------------
                                             Name: Jack Jaiven
                                             Title:Vice President


<PAGE>

                                                EXHIBIT 10.3


                               CONTINUING GUARANTY

TO: WELLS FARGO CREDIT, INC.

1. GUARANTY;  DEFINITIONS.  In  consideration  of any credit or other  financial
accommodation   heretofore,   now  or  hereafter   extended  or  made  to  nSTOR
CORPORATION,  INC., a Delaware corporation ("Borrower"),  successor-by-operation
of law to anDATAco of California, Inc., a California corporation, by Wells Fargo
Credit,  Inc. ("Bank"),  and for other valuable  consideration,  the undersigned
nStor Technologies, Inc., a Delaware corporation ("Guarantor"),  unconditionally
guarantees  and promises to pay to Bank, or order,  on demand in lawful money of
the United States of America and in  immediately  available  funds,  any and all
Indebtedness of Borrower to Bank. The term  "Indebtedness" is used herein in its
most comprehensive sense and includes any and all advances,  debts,  obligations
and  liabilities of Borrower,  heretofore,  now or hereafter  made,  incurred or
created,  whether  voluntary or involuntary and however arising,  whether due or
not due,  absolute or  contingent,  liquidated  or  unliquidated,  determined or
undetermined,  and whether  Borrower may be liable  individually or jointly with
others,  or whether recovery upon such  Indebtedness may be or hereafter becomes
unenforceable.

2. MAXIMUM  LIABILITY;  SUCCESSIVE  TRANSACTIONS;  REVOCATION;  OBLIGATION UNDER
OTHER  GUARANTIES.  The liability of Guarantor  shall not exceed at any one time
the sum of TEN MILLION DOLLARS  ($10,000,000)  for principal,  plus all interest
thereon and costs and expenses  pertaining to the  enforcement  of this Guaranty
and/or the collection of the  Indebtedness of Borrower to Bank.  Notwithstanding
the  foregoing,   Bank  may  permit  the  Indebtedness  of  Borrower  to  exceed
Guarantor's liability.  This is a continuing guaranty and all rights, powers and
remedies hereunder shall apply to all past,  present and future  Indebtedness of
Borrower to Bank,  including that arising under  successive  transactions  which
shall either continue the Indebtedness, increase or decrease it, or from time to
time  create  new  Indebtedness  after  all or any prior  Indebtedness  has been
satisfied,  and  notwithstanding  the dissolution,  liquidation or bankruptcy of
Borrower or Guarantor  or any other event or  proceeding  affecting  Borrower or
Guarantor.  This Guaranty shall not apply to any new Indebtedness  created after
actual  receipt  by Bank of  written  notice  of its  revocation  as to such new
Indebtedness;  provided however, that loans or advances made by Bank to Borrower
after  revocation  under  commitments  existing prior to receipt by Bank of such
revocation,  and  extensions,   renewals  or  modifications,  of  any  kind,  of
Indebtedness  incurred by Borrower or committed by Bank prior to receipt by Bank
of such revocation,  shall not be considered new  Indebtedness.  Any such notice
must be sent to Bank by registered U.S. mail, postage prepaid,  addressed to its
office at Commercial  Finance  Division,  245 S. Los Robles  Avenue,  Suite 600,
Pasadena,  California 91101, or at such other address as Bank shall from time to
time designate.  Any payment by Guarantor shall not reduce  Guarantor's  maximum
obligation  hereunder unless written notice to that effect is actually  received
by Bank at or prior to the time of such payment.  The  obligations  of Guarantor
hereunder  shall be in addition to any  obligations of Guarantor under any other
guaranties of any  liabilities  or  obligations  of Borrower or any other person
heretofore or hereafter given to Bank unless said other guaranties are expressly
modified or revoked in writing;  and this Guaranty shall not,  unless  expressly
herein provided, affect or invalidate any such other guaranties.


<PAGE>

3.  SEPARATE  ACTIONS;  WAIVER  OF  STATUTE  OF  LIMITATIONS;  REINSTATEMENT  OF
LIABILITY.  The  obligations  hereunder are  independent  of the  obligations of
Borrower, and a separate action or actions may be brought and prosecuted against
Guarantor  whether action is brought  against  Borrower or any other person,  or
whether  Borrower  or any other  person is joined in any such action or actions.
Guarantor  acknowledges that this Guaranty is absolute and unconditional,  there
are no conditions  precedent to the  effectiveness  of this  Guaranty,  and this
Guaranty is in full force and effect and is binding on  Guarantor as of the date
written below,  regardless of whether Bank obtains  collateral or any guaranties
from  others or takes any other  action  contemplated  by  Guarantor.  Guarantor
waives the benefit of any statute of limitations affecting Guarantor's liability
hereunder or the enforcement  thereof,  and Guarantor agrees that any payment of
any  Indebtedness  or other act which  shall  toll any  statute  of  limitations
applicable  thereto shall similarly  operate to toll such statute of limitations
applicable  to  Guarantor's  liability  hereunder.  The  liability  of Guarantor
hereunder  shall be reinstated and revived and the rights of Bank shall continue
if and to the  extent  for any  reason any amount at any time paid on account of
any Indebtedness guaranteed hereby is rescinded or must otherwise be restored by
Bank,  whether as a result of any proceedings in bankruptcy or reorganization or
otherwise,  all as though such amount had not been paid. The determination as to
whether any amount so paid must be rescinded  or restored  shall be made by Bank
in its sole discretion;  provided  however,  that if Bank chooses to contest any
such matter at the request of Guarantor,  Guarantor agrees to indemnify and hold
Bank  harmless  from and against all costs and  expenses,  including  reasonable
attorneys' fees, expended or incurred by Bank in connection therewith, including
without limitation, in any litigation with respect thereto.

4.  AUTHORIZATIONS  TO BANK.  Guarantor  authorizes  Bank either before or after
revocation  hereof,  without  notice  to or  demand on  Guarantor,  and  without
affecting  Guarantor's  liability  hereunder,  from time to time to:  (a) alter,
compromise,  renew, extend,  accelerate or otherwise change the time for payment
of, or otherwise  change the terms of the  Indebtedness or any portion  thereof,
including  increase or decrease  of the rate of interest  thereon;  (b) take and
hold  security  for the  payment of this  Guaranty  or the  Indebtedness  or any
portion thereof, and exchange,  enforce, waive,  subordinate or release any such
security;  (c)  apply  such  security  and  direct  the  order or manner of sale
thereof,  including  without  limitation,  a non-judicial  sale permitted by the
terms of the  controlling  security  agreement or deed of trust,  as Bank in its
discretion  may  determine;  (d)  release or  substitute  any one or more of the
endorsers or any other guarantors of the  Indebtedness,  or any portion thereof,
or any  other  party  thereto;  and (e)  apply  payments  received  by Bank from
Borrower to any  Indebtedness  of Borrower to Bank,  in such order as Bank shall
determine in its sole discretion, whether or not such Indebtedness is covered by
this  Guaranty,  and  Guarantor  hereby  waives any  provision of law  regarding
application  of payments  which  specifies  otherwise.  Bank may without  notice
assign this Guaranty in whole or in part. Upon Bank's request,  Guarantor agrees
to provide to Bank copies of Guarantor's financial statements.

5.  REPRESENTATIONS  AND WARRANTIES.  Guarantor  represents and warrants to Bank
that: (a) this Guaranty is executed at Borrower's  request;  (b) Guarantor shall
not,  without  Bank's prior written  consent,  sell,  lease,  assign,  encumber,
hypothecate,  transfer or otherwise  dispose of all or a substantial or material
part of  Guarantor's  assets  other than in the ordinary  course of  Guarantor's
business;   (c)  Bank  has  made  no  representation  to  Guarantor  as  to  the
creditworthiness of Borrower;  and (d) Guarantor has established  adequate means
of obtaining from Borrower on a continuing basis financial and other information
pertaining  to  Borrower's  financial   condition.   Guarantor  agrees  to  keep
adequately  informed from such means of any facts, events or circumstances which
might in any way affect  Guarantor's  risks  hereunder,  and  Guarantor  further
agrees  that  Bank  shall  have no  obligation  to  disclose  to  Guarantor  any
information or material about Borrower which is acquired by Bank in any manner.


<PAGE>

6. GUARANTOR'S WAIVERS.

(a) Guarantor  waives any right to require Bank to: (i) proceed against Borrower
or any other  person;  (ii)  marshal  assets or proceed  against or exhaust  any
security held from Borrower or any other person; (iii) give notice of the terms,
time and place of any public or private sale of personal  property security held
from Borrower or any other person,  or otherwise  comply with the  provisions of
Section 9504 of the California  Uniform Commercial Code; (iv) take any action or
pursue any other remedy in Bank's power;  or (v) make any  presentment or demand
for  performance,  or give any  notice  of  nonperformance,  protest,  notice of
protest or notice of dishonor hereunder or in connection with any obligations or
evidences of  indebtedness  held by Bank as security for or which  constitute in
whole or in part the Indebtedness  guaranteed  hereunder,  or in connection with
the creation of new or additional Indebtedness.

(b)  Guarantor  waives any defense to its  obligations  hereunder  based upon or
arising by reason of: (i) any  disability  or other  defense of  Borrower or any
other person; (ii) the cessation or limitation from any cause whatsoever,  other
than payment in full, of the Indebtedness of Borrower or any other person; (iii)
any lack of  authority  of any officer,  director,  partner,  agent or any other
person acting or  purporting to act on behalf of Borrower,  or any defect in the
formation of Borrower;  (iv) the  application by Borrower of the proceeds of any
Indebtedness for purposes other than the purposes represented by Borrower to, or
intended or understood  by, Bank or  Guarantor;  (v) any act or omission by Bank
which directly or indirectly results in or aids the discharge of Borrower or any
portion of the  Indebtedness  by operation of law or otherwise,  or which in any
way impairs or suspends  any rights or remedies of Bank against  Borrower;  (vi)
any impairment of the value of any interest in any security for the Indebtedness
or any portion thereof,  including without limitation,  the failure to obtain or
maintain  perfection or recordation  of any interest in any such  security,  the
release  of any such  security  without  substitution,  and/or  the  failure  to
preserve the value of, or to comply with  applicable  law in  disposing  of, any
such  security;  or (vii)  any  modification  of the  Indebtedness,  in any form
whatsoever,  including  any  modification  made after  revocation  hereof to any
Indebtedness incurred prior to such revocation, and including without limitation
the renewal, extension,  acceleration or other change in time for payment of, or
other change in the terms of, the Indebtedness or any portion thereof, including
increase or decrease of the rate of  interest  thereon.  Until all  Indebtedness
shall have been paid in full, Guarantor shall have no right of subrogation,  and
Guarantor  waives  any right to  enforce  any  remedy  which Bank now has or may
hereafter have against Borrower or any other person,  and waives any benefit of,
or any right to  participate  in, any security  now or  hereafter  held by Bank.
Guarantor further waives all rights and defenses  Guarantor may have arising out
of (A) any election of remedies by Bank,  even though that election of remedies,
such as a non-judicial  foreclosure with respect to any security for any portion
of the Indebtedness,  destroys  Guarantor's rights of subrogation or Guarantor's
rights to proceed against Borrower for reimbursement,  or (B) any loss of rights
Guarantor may suffer by reason of any rights,  powers or remedies of Borrower in
connection with any anti-deficiency laws or any other laws limiting,  qualifying
or discharging  Borrower's  Indebtedness,  whether by operation of Sections 726,
580a or 580d of the  California  Code of Civil  Procedure  as from  time to time
amended, or otherwise, including any rights Guarantor may have to a Section 580a
fair market value  hearing to determine  the size of a deficiency  following any
trustee's  foreclosure sale or other  disposition of any real property  security
for any portion of the Indebtedness.

7. BANK'S RIGHTS WITH RESPECT TO GUARANTOR'S  PROPERTY IN BANK'S POSSESSION.  In
addition to all liens upon and rights of setoff  against the monies,  securities
or other property of Guarantor given to Bank by law, Bank shall have a lien upon
and a right of setoff  against  all  monies,  securities  and other  property of
Guarantor now or hereafter in the possession of or on deposit with Bank, whether
held in a general or special account or deposit or for safekeeping or otherwise,
and every such lien and right of setoff may be exercised  without demand upon or
notice to  Guarantor.  No lien or right of  setoff  shall be deemed to have been
waived by any act or conduct on the part of Bank,  or by any neglect to exercise
such right of setoff or to enforce such lien,  or by any delay in so doing,  and
every  right of setoff and lien shall  continue  in full force and effect  until
such  right of setoff or lien is  specifically  waived  or  released  by Bank in
writing.


<PAGE>

8.  SUBORDINATION.  Any  Indebtedness  of  Borrower  now or  hereafter  held  by
Guarantor is hereby  subordinated to the  Indebtedness of Borrower to Bank. Such
Indebtedness  of Borrower to  Guarantor is assigned to Bank as security for this
Guaranty and the  Indebtedness  and, if Bank  requests,  shall be collected  and
received  by  Guarantor  as trustee for Bank and paid over to Bank on account of
the  Indebtedness  of Borrower to Bank but without  reducing or affecting in any
manner the liability of Guarantor  under the other  provisions of this Guaranty.
Any notes or other instruments now or hereafter  evidencing such Indebtedness of
Borrower to Guarantor shall be marked with a legend that the same are subject to
this  Guaranty and, if Bank so requests,  shall be delivered to Bank.  Guarantor
will,  and Bank is hereby  authorized in the name of Guarantor from time to time
to,  execute and file  financing  statements  and  continuation  statements  and
execute such other  documents and take such other action as Bank deems necessary
or  appropriate  to  perfect,  preserve  and enforce  its rights  hereunder.

9. REMEDIES;  NO WAIVER.  All rights,  powers and remedies of Bank hereunder are
cumulative. No delay, failure or discontinuance of Bank in exercising any right,
power or remedy  hereunder  shall  affect or operate as a waiver of such  right,
power or remedy;  nor shall any single or partial  exercise  of any such  right,
power or  remedy  preclude,  waive or  otherwise  affect  any  other or  further
exercise  thereof or the  exercise  of any other  right,  power or  remedy.  Any
waiver,  permit,  consent or  approval of any kind by Bank of any breach of this
Guaranty,  or any such waiver of any provisions or conditions hereof, must be in
writing and shall be effective only to the extent set forth in writing.

10. COSTS, EXPENSES AND ATTORNEYS' FEES. Guarantor shall pay to Bank immediately
upon  demand  the full  amount of all  payments,  advances,  charges,  costs and
expenses,  including reasonable attorneys' fees (to include outside counsel fees
and all allocated  costs of Bank's  in-house  counsel),  expended or incurred by
Bank in  connection  with the  enforcement  of any of Bank's  rights,  powers or
remedies  and/or the  collection  of any amounts  which become due to Bank under
this Guaranty,  and the  prosecution or defense of any action in any way related
to this  Guaranty,  whether  incurred  at the trial or  appellate  level,  in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation,  any
adversary  proceeding,  contested  matter or motion brought by Bank or any other
person)  relating  to  Guarantor  or any  other  person  or  entity.  All of the
foregoing shall be paid by Guarantor with interest from the date of demand until
paid in full at a rate per annum equal to the  greater of ten  percent  (10%) or
the Prime Rate in effect from time to time. The "Prime Rate" is a base rate that
Wells Fargo Bank, National Association,  from time to time establishes and which
serves as the basis upon which  effective  rates of interest are  calculated for
those loans making reference thereto.

11. SUCCESSORS; ASSIGNMENT. This Guaranty shall be binding upon and inure to the
benefit  of  the  heirs,  executors,   administrators,   legal  representatives,
successors and assigns of the parties;  provided however, that Guarantor may not
assign or transfer any of its interests or rights hereunder without Bank's prior
written consent. Guarantor acknowledges that Bank has the right to sell, assign,
transfer,  negotiate  or grant  participations  in all or any  part  of,  or any
interest  in, any  Indebtedness  of  Borrower to Bank and any  obligations  with
respect  thereto,  including this Guaranty.  In connection  therewith,  Bank may
disclose all documents and information which Bank now has or hereafter  acquires
relating to  Guarantor  and/or this  Guaranty,  whether  furnished  by Borrower,
Guarantor or  otherwise.  Guarantor  further  agrees that Bank may disclose such
documents and information to Borrower.


12.  AMENDMENT.  This Guaranty may be amended or modified only in writing signed
by Bank and Guarantor.

13. UNDERSTANDING WITH RESPECT TO WAIVERS; SEVERABILITY OF PROVISIONS. Guarantor
warrants  and  agrees  that each of the  waivers  set forth  herein is made with
Guarantor's full knowledge of its significance and consequences,  and that under
the circumstances,  the waivers are reasonable and not contrary to public policy
or law. If any waiver or other  provision of this  Guaranty  shall be held to be
prohibited by or invalid under  applicable  public policy or law, such waiver or
other provision shall be ineffective  only to the extent of such  prohibition or
invalidity, without invalidating the remainder of such waiver or other provision
or any remaining provisions of this Guaranty.

14.  GOVERNING  LAW.  This  Guaranty  shall  be  governed  by and  construed  in
accordance with the laws of the State of California.

15. ARBITRATION.

(a) Arbitration.  Upon the demand of any party, any Dispute shall be resolved by
binding  arbitration  (except as set forth in (e) below) in accordance  with the
terms of this Guaranty.  A "Dispute"  shall mean any action,  dispute,  claim or
controversy of any kind,  whether in contract or tort,  statutory or common law,
legal or  equitable,  now existing or hereafter  arising  under or in connection
with,  or in any way  pertaining  to,  this  Guaranty  and each other  document,
contract and instrument required hereby or now or hereafter delivered to Bank in
connection  herewith  (collectively,  the "Documents"),  or any past, present or
future extensions of credit and other activities, transactions or obligations of
any kind  related  directly or  indirectly  to any of the  Documents,  including
without limitation, any of the foregoing arising in connection with the exercise
of any self-help,  ancillary or other remedies pursuant to any of the Documents.
Any  party  may by  summary  proceedings  bring an  action  in  court to  compel
arbitration  of a  Dispute.  Any  party  who  fails  or  refuses  to  submit  to
arbitration  following  a lawful  demand by any other party shall bear all costs
and  expenses  incurred by such other  party in  compelling  arbitration  of any
Dispute.

(b)  Governing  Rules.  Arbitration  proceedings  shall be  administered  by the
American  Arbitration  Association  ("AAA") or such other  administrator  as the
parties  shall  mutually  agree  upon in  accordance  with  the  AAA  Commercial
Arbitration  Rules. All Disputes  submitted to arbitration  shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the Documents.
The arbitration  shall be conducted at a location in California  selected by the
AAA or other  administrator.  If there is any  inconsistency  between  the terms
hereof and any such  rules,  the terms and  procedures  set forth  herein  shall
control. All statutes of limitation applicable to any Dispute shall apply to any
arbitration  proceeding.  All discovery activities shall be expressly limited to
matters  directly  relevant to the Dispute being  arbitrated.  Judgment upon any
award  rendered  in  an   arbitration   may  be  entered  in  any  court  having
jurisdiction; provided however, that nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections  afforded to it under
12 U.S.C. ss.91 or any similar applicable state law.

(c) No Waiver;  Provisional  Remedies,  Self-Help and Foreclosure.  No provision
hereof shall limit the right of any party to exercise self-help remedies such as
setoff,  foreclosure against or sale of any real or personal property collateral
or security,  or to obtain provisional or ancillary remedies,  including without
limitation  injunctive  relief,  sequestration,  attachment,  garnishment or the
appointment of a receiver,  from a court of competent jurisdiction before, after
or during the pendency of any arbitration or other  proceeding.  The exercise of
any such remedy shall not waive the right of any party to compel  arbitration or
reference hereunder.


<PAGE>

(d) Arbitrator  Qualifications  and Powers;  Awards.  Arbitrators must be active
members of the  California  State Bar or retired  judges of the state or federal
judiciary of California, with expertise in the substantive law applicable to the
subject matter of the Dispute.  Arbitrators are empowered to resolve Disputes by
summary  rulings in  response to motions  filed  prior to the final  arbitration
hearing.  Arbitrators  (i) shall  resolve all  Disputes in  accordance  with the
substantive law of the state of California,  (ii) may grant any remedy or relief
that a court of the state of  California  could order or grant  within the scope
hereof and such  ancillary  relief as is necessary to make  effective any award,
and (iii)  shall  have the  power to award  recovery  of all costs and fees,  to
impose  sanctions and to take such other  actions as they deem  necessary to the
same extent a judge could pursuant to the Federal Rules of Civil Procedure,  the
California  Rules of Civil  Procedure  or other  applicable  law. Any Dispute in
which the  amount in  controversy  is  $5,000,000  or less shall be decided by a
single  arbitrator  who shall not  render an award of  greater  than  $5,000,000
(including  damages,  costs,  fees  and  expenses).  By  submission  to a single
arbitrator,  each party expressly waives any right or claim to recover more than
$5,000,000.  Any Dispute in which the amount in controversy  exceeds  $5,000,000
shall be  decided by  majority  vote of a panel of three  arbitrators;  provided
however,  that all three  arbitrators must actively  participate in all hearings
and deliberations.

(e) Judicial  Review.  Notwithstanding  anything herein to the contrary,  in any
arbitration  in  which  the  amount  in  controversy  exceeds  $25,000,000,  the
arbitrators  shall be required to make  specific,  written  findings of fact and
conclusions of law. In such  arbitrations (i) the arbitrators shall not have the
power to make any award which is not supported by substantial  evidence or which
is based on legal  error,  (ii) an award  shall not be binding  upon the parties
unless the  findings  of fact are  supported  by  substantial  evidence  and the
conclusions of law are not erroneous  under the  substantive law of the state of
California, and (iii) the parties shall have in addition to the grounds referred
to in the Federal Arbitration Act for vacating, modifying or correcting an award
the right to judicial review of (A) whether the findings of fact rendered by the
arbitrators  are  supported  by  substantial  evidence,   and  (B)  whether  the
conclusions  of law are  erroneous  under  the  substantive  law of the state of
California.  Judgment  confirming  an award in such a proceeding  may be entered
only if a court  determines the award is supported by  substantial  evidence and
not based on legal error under the substantive law of the state of California.

(f) Miscellaneous.  To the maximum extent practicable,  the AAA, the arbitrators
and the  parties  shall take all action  required to  conclude  any  arbitration
proceeding  within  180 days of the  filing  of the  Dispute  with  the AAA.  No
arbitrator  or  other  party  to an  arbitration  proceeding  may  disclose  the
existence,  content or results thereof, except for disclosures of information by
a party  required in the ordinary  course of its business,  by applicable law or
regulation,  or to the extent  necessary to exercise any judicial  review rights
set forth herein.  If more than one agreement for  arbitration by or between the
parties  potentially  applies  to a  Dispute,  the  arbitration  provision  most
directly  related to the  Documents or the subject  matter of the Dispute  shall
control.  This  arbitration  provision shall survive  termination,  amendment or
expiration of any of the Documents or any relationship between the parties.


<PAGE>

IN WITNESS WHEREOF,  the undersigned  Guarantor has executed this Guaranty as of
September 14, 2000.

nStor Technologies, Inc.
By:  /s/ Jack Jaiven
Its: Vice President


<PAGE>

                                               EXHIBIT 10.4

                                 PROMISSORY NOTE

                                                                  July 31, 2000
U.S. $2,500,000.00                                         San Diego, California

FOR VALUE  RECEIVED,  the  undersigned  nSTOR  TECHNOLOGIES,  INC.,  a  Delaware
corporation  with its  principal  place of business at 10140 Mesa Rim Road,  San
Diego, California, 92121 (hereinafter called "Maker"), hereby promises to pay to
the order of H. Irwin Levy, an individual resident of the State of Florida, with
a business  address at 100 Century  Boulevard,  West Palm Beach,  Florida  33417
(hereinafter  called  "Payee"),  at the  address of Payee's  principal  place of
business  stated  above,  or at such other place as the Payee may  designate  in
writing,  the sum of TWO MILLION AND FIVE HUNDRED  THOUSAND AND  00/100ths  U.S.
Dollars (U.S.  $2,500,000.00)  (the  "Principal  Amount"),  plus interest on the
outstanding balance of the Principal Amount at the rate of ten percent (10%) per
annum, payable monthly, on the fifth day of every month, commencing on September
5, 2000,  from the date  hereof  until the date when said sum is paid in full in
accordance with the terms hereof.  The entire  Principal Amount plus all accrued
interest thereon shall be due and payable in full on April 30, 2001.

It is expressly  agreed that this  Promissory  Note  evidences a TWO MILLION AND
FIVE HUNDRED THOUSAND AND 00/100ths U.S. Dollars (U.S.  $2,500,000.00) revolving
line of credit.  The Principal Amount which may be outstanding at any time under
such line of credit shall not exceed TWO MILLION AND FIVE  HUNDRED  THOUSAND AND
00/100ths U.S. Dollars (U.S. $2,500,000.00).  However, this limitation shall not
be deemed to prohibit  Payee from  advancing any sum, which may, in Payee's sole
and  exclusive  discretion,  be  necessary  or desirable in order to protect and
preserve  the effect and  enforceability  of this  Promissory  Note.  Within the
limits and  subject to the terms and  conditions  hereof,  the Maker may borrow,
repay  and  re-borrow  under the  revolving  line of  credit  evidenced  by this
Promissory  Note and all shall be  subject to the terms and  conditions  of this
Promissory Note.

Upon the  failure by Maker to pay  interest  full on or before the date when due
hereunder,  the entire unpaid amount of this Note shall thereupon be immediately
due and payable, and the Payee shall have all rights and remedies provided under
this Note.


<PAGE>

Maker shall have the right, in Maker's  discretion at any time,  without payment
of premium or penalty,  to repay in whole or in part the unpaid  balance of this
Note.

This Note  shall be  governed  by and  construed  under the laws of the State of
Florida.  The exclusive  venue for any litigation in connection  with or arising
out of this Note  shall be Palm  Beach  County,  Florida,  and the Maker  hereby
consents and submits to the jurisdiction of the state and federal courts sitting
in Palm Beach County, Florida.

MAKER HEREBY KNOWINGLY,  VOLUNTARILY AND  INTENTIONALLY  WAIVES THE RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY  LITIGATION  BASED HEREON,  OR ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE.

nSTOR TECHNOLOGIES, INC.


By:      /s/ Larry Hemmerich
        -------------------
Name:   Larry Hemmerich
Title:  President


<PAGE>

                                                  EXHIBIT 10.5

     THIS PROMISSORY  NOTE REPLACES THAT CERTAIN  PROMISSORY NOTE DATED JULY 31,
2000 IN THE AMOUNT OF U.S. $2,500,000.00

                                 PROMISSORY NOTE
                                                                October 11, 2000
U.S. $2,550,000.00                                         San Diego, California

FOR VALUE  RECEIVED,  the  undersigned  nSTOR  TECHNOLOGIES,  INC.,  a  Delaware
corporation  with its  principal  place of business at 10140 Mesa Rim Road,  San
Diego, California, 92121 (hereinafter called "Maker"), hereby promises to pay to
the order of H. Irwin Levy, an individual resident of the State of Florida, with
a business  address at 100 Century  Boulevard,  West Palm Beach,  Florida  33417
(hereinafter  called  "Payee"),  at the  address of Payee's  principal  place of
business  stated  above,  or at such other place as the Payee may  designate  in
writing,  the sum of TWO MILLION AND FIVE HUNDRED  FIFTY  THOUSAND AND 00/100ths
U.S. Dollars (U.S. $2,550,000.00) (the "Principal Amount"), plus interest on the
outstanding balance of the Principal Amount at the rate of ten percent (10%) per
annum,  payable monthly,  on the fifth day of every month,  from the date hereof
until  the date  when  said  sum is paid in full in  accordance  with the  terms
hereof.  The entire  Principal Amount plus all accrued interest thereon shall be
due and payable in full on April 30, 2001.

It is expressly  agreed that this  Promissory  Note  evidences a TWO MILLION AND
FIVE HUNDRED FIFTY  THOUSAND AND  00/100ths  U.S.  Dollars (U.S.  $2,550,000.00)
revolving line of credit.  The Principal  Amount which may be outstanding at any
time under such line of credit  shall not exceed TWO  MILLION  AND FIVE  HUNDRED
FIFTY THOUSAND AND 00/100ths U.S. Dollars (U.S.  $2,550,000.00).  However,  this
limitation  shall not be deemed to prohibit  Payee from advancing any sum, which
may, in Payee's  sole and  exclusive  discretion,  be  necessary or desirable in
order to protect and preserve the effect and  enforceability  of this Promissory
Note.  Within the limits and  subject to the terms and  conditions  hereof,  the
Maker  may  borrow,  repay and  re-borrow  under  the  revolving  line of credit
evidenced  by this  Promissory  Note and all shall be  subject  to the terms and
conditions of this Promissory Note.

Upon the failure by Maker to pay interest in full on or before the date when due
hereunder,  the entire unpaid amount of this Note shall thereupon be immediately
due and payable, and the Payee shall have all rights and remedies provided under
this Note.

Maker shall have the right, in Maker's  discretion at any time,  without payment
of premium or penalty,  to repay in whole or in part the unpaid  balance of this
Note.


<PAGE>

This Note  shall be  governed  by and  construed  under the laws of the State of
Florida.  The exclusive  venue for any litigation in connection  with or arising
out of this Note  shall be Palm  Beach  County,  Florida,  and the Maker  hereby
consents and submits to the jurisdiction of the state and federal courts sitting
in Palm Beach County, Florida.

MAKER HEREBY KNOWINGLY,  VOLUNTARILY AND  INTENTIONALLY  WAIVES THE RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY  LITIGATION  BASED HEREON,  OR ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE.

nSTOR TECHNOLOGIES, INC.


By:     /s/ Larry Hemmerich
        -------------------
Name:   Larry Hemmerich
Title:  President


<PAGE>

                                                  EXHIBIT 10.6

                                 PROMISSORY NOTE

                                                                October 11, 2000
U.S. $750,000.00                                           San Diego, California

FOR VALUE  RECEIVED,  the  undersigned  nSTOR  TECHNOLOGIES,  INC.,  a  Delaware
corporation  with its  principal  place of business at 10140 Mesa Rim Road,  San
Diego, California, 92121 (hereinafter called "Maker"), hereby promises to pay to
the order of MLL Corp., a Florida  corporation whose principal place of business
is 100 Century Boulevard,  West Palm Beach,  Florida 33417  (hereinafter  called
"Payee"),  at the address of Payee,  stated above, or at such other place as the
Payee may  designate in writing,  the sum of SEVEN  HUNDRED  FIFTY  THOUSAND AND
00/100ths  U.S.  Dollars  (U.S.  $750,000.00)  (the  "Principal  Amount"),  plus
interest on the outstanding  balance of the Principal  Amount at the rate of ten
percent (10%) per annum,  payable monthly, on the fifth day of every month, from
the date hereof until the date when said sum is paid in full in accordance  with
the terms hereof.  The entire Principal Amount plus all accrued interest thereon
shall be due and payable in full on April 30, 2001.

It is expressly agreed that this Promissory Note evidences a SEVEN HUNDRED FIFTY
THOUSAND AND 00/100ths U.S. Dollars (U.S. $750,000.00) revolving line of credit.
The  Principal  Amount which may be  outstanding  at any time under such line of
credit shall not exceed SEVEN HUNDRED FIFTY THOUSAND AND 00/100ths U.S.  Dollars
(U.S.  $750,000.00).  However,  this limitation  shall not be deemed to prohibit
Payee  from  advancing  any sum,  which  may,  in  Payee's  sole  and  exclusive
discretion,  be  necessary  or  desirable  in order to protect and  preserve the
effect and enforceability of this Promissory Note. Within the limits and subject
to the terms and conditions  hereof,  the Maker may borrow,  repay and re-borrow
under the revolving  line of credit  evidenced by this  Promissory  Note and all
shall be subject to the terms and conditions of this Promissory Note.

Upon the failure by Maker to pay interest in full on or before the date when due
hereunder,  the entire unpaid amount of this Note shall thereupon be immediately
due and payable, and the Payee shall have all rights and remedies provided under
this Note.

Maker shall have the right, in Maker's  discretion at any time,  without payment
of premium or penalty,  to repay in whole or in part the unpaid  balance of this
Note.


<PAGE>

This Note  shall be  governed  by and  construed  under the laws of the State of
Florida.  The exclusive  venue for any litigation in connection  with or arising
out of this Note  shall be Palm  Beach  County,  Florida,  and the Maker  hereby
consents and submits to the jurisdiction of the state and federal courts sitting
in Palm Beach County, Florida.

MAKER HEREBY KNOWINGLY,  VOLUNTARILY AND  INTENTIONALLY  WAIVES THE RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY  LITIGATION  BASED HEREON,  OR ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE.

nSTOR TECHNOLOGIES, INC.


By:     /s/ Larry Hemmerich
        -------------------
Name:   Larry Hemmerich
Title:  President


<PAGE>


                                                  EXHIBIT 10.7

October 18, 2000

Mr. Larry Hemmerich
nStor Technologies, Inc.
10140 Mesa Rim Road
San Diego, CA  92121

Dear Larry,

On October 11, 2000,  the Board of  Directors  formally  approved the  following
revisions to your Employment Arrangement:

1)      Term:
        -----
        The expiration date has been extended to January 16, 2003.

2)      Bonus and Incentive Compensation:
        ---------------------------------
        You will be  entitled to a $100,000  bonus,  to be paid during the first
        ten (10) days of January  2002,  in the event that one of the  following
        conditions occur:

          a) During 2001, the Company has experienced three consecutive quarters
          of revenue growth of a minimum of 5% per quarter, or

          b) The closing  market price of the Company's  stock is at least $5 on
          December 31, 2001.

3)      Stock Options:
        --------------
        Effective October 11, 2000, you have been granted options to purchase an
        additional  250,000 shares of nStor common stock at an exercise price of
        $2 per share. The options will vest 100% on January 16, 2003.

4)      Change of Control:
        ------------------
        In the event of a sale of substantially  all the property,  or more than
        51% of the then  outstanding  common  shares,  of the Company to another
        company  not  controlled  by the  Company's  shareholders,  100%  of all
        options,   which  have  been  granted  to  you  by  the  Company,   will
        automatically vest.

Very truly yours,                                         Approved By:


/s/ H. Irwin Levy                                  /s/ Larry Hemmerich
-------------------------                          ------------------------
    H. Irwin Levy                                      Larry Hemmerich