EXHIBIT 4.2

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


                            nSTOR TECHNOLOGIES, INC.
                            (a Delaware corporation)

                         8% Convertible Promissory Note


Amount: $200,000.00                                    Dated:  February 19, 2003
                                                            Carlsbad, California


        nSTOR TECHNOLOGIES,  INC., a Delaware  corporation (the "Company"),  for
value  received,  hereby  promises to pay to H. Irwin Levy or to his order or to
such persons as he may designate from time to time ("Holder") in lawful money of
the United States of America,  upon Holder's  presentation and surrender of this
8% Convertible  Promissory Note ("Note") at the principal office of the Company,
and within  thirty  (30) days after  receipt of notice  from the Holder that the
outstanding principal amount of this Note and/or any accrued and unpaid interest
is due ("Maturity"),  which notice shall not be given prior to July 1, 2003: (i)
the  principal  sum of Two  Hundred  Thousand  Dollars  ($200,000.00),  and (ii)
interest on the unpaid  principal of this Note at the rate of eight percent (8%)
per annum.  Payment of this Note shall be subject to  conversion  as provided in
Section 1 hereof and to the terms and conditions of this Note.

        This  Note  is  secured  by  shares  of  common   stock  of   Stonehouse
Technologies,  Inc. pursuant to that certain Stock Pledge Agreement of even date
herewith between the Company and Holder.

        At the  option of the  Company,  any  payment  by the  Company  required
hereunder  may be made by check  mailed to Holder at the last address for Holder
appearing on the records of the Company.  This Note may be prepaid,  in whole or
part without  penalty,  at any time after the date hereof,  provided  that,  the
Company must provide  Holder with at least ten (10) days prior written notice of
its intention to prepay the Note to allow Holder an  opportunity to convert this
Note pursuant to Section 1 below.

        1. Conversion.

               a. Right to Convert.  Holder shall be entitled, at any time prior
to  Maturity,  to  convert  all or a portion of the then  outstanding  principal
amount of this Note, and/or any accrued and unpaid interest,  into (i) shares of
common stock of Stonehouse Technologies,  Inc. ('Stonehouse") held of record and
owned  beneficially by the Company (the  "Stonehouse  Common  Stock"),  at a per
share conversion price of $0.5625 ("Stonehouse Conversion Price") or (ii) shares
of common  stock,  par value $.05 per share,  of the Company (the "nStor  Common
Stock") at a per share  conversion  price of $0.29 per share ("nStor  Conversion
Price"),  based on the closing  market price of nStor's common stock on the date
hereof.  The number of shares to be issued upon such  conversion  (the "Shares")
shall equal (x) the  principal  amount of this Note to be converted  pursuant to
this Section 1 plus any accrued and unpaid  interest on such amount  through the
Date of Conversion (as defined  below) divided by (y) the Stonehouse  Conversion
Price or the nStor  Conversion  Price, as the case may be. Any conversion of all
or part of the  principal  amount of this Note  and/or  any  accrued  but unpaid
interest shall not extinguish the Holder's  otherwise valid contractual right to
any remaining principal and any unpaid interest not so converted.

               b.  Stock  Reclassifications;   Stock  Splits,  Combinations  and
Dividends.  If the nStor Common Stock or Stonehouse  Common Stock  issuable upon
the  conversion of this Note shall be changed into the same or different  number
of shares of any class or classes of stock, whether by  reclassification,  stock
split,  stock  dividend,  or similar  event,  then and in each such  event,  the
Holder,  shall have the right  thereafter  to convert all or any portion of this
Note into the kind and  amount of  shares  of stock  and  other  securities  and
property receivable upon such capital reorganization,  reclassification or other
change which Holder would have received had this Note been converted immediately
prior to such capital reorganization, reclassification or other change.

               c. Capital  Reorganization,  Merger or Sale of Assets.  If at any
time or from time to time there shall be a capital  reorganization  of the nStor
Common  Stock  or  the  Stonehouse  Common  Stock  (other  than  a  subdivision,
combination,  reclassification or exchange of shares provided for in Section 1b.
above) or a merger or  consolidation  of the Company or Stonehouse  with or into
another corporation, or the sale of all or substantially all of the Company's or
Stonehouse's  properties and assets to any other person,  or any  transaction or
series of related  transactions  in which more than fifty  percent  (50%) of the
outstanding  voting  securities of the Company or Stonehouse (on an as-converted
basis) is sold or  assigned  (any of which  events is  herein  referred  to as a
"Reorganization"),  then as a part of such  Reorganization,  provision  shall be
made so that Holder shall  thereafter be entitled to receive upon  conversion of
this Note, the number of shares of stock or other  securities or property of the
Company, or of the successor corporation resulting from such Reorganization,  to
which Holder would have been entitled if the Holder had  converted  such portion
of this  Note  immediately  prior  to such  Reorganization.  In any  such  case,
appropriate  adjustment  shall be made in the  application  of the provisions of
this subsection  with respect to the rights of Holder after the  Reorganization,
to the end that the provisions of this subsection  (including  adjustment of the
number of shares  issuable  upon  conversion  of this Note) shall be  applicable
after that event in as nearly equivalent a manner as may be practicable.

               e.  Exercise  of  Conversion  Right.  In  order to  exercise  the
conversion  privilege in Section 1a.  above,  Holder shall  deliver the attached
Notice of Conversion (which must be fully completed and executed) during regular
business  hours to the  Company  at the  office of the  Company.  Promptly  upon
receipt of the Notice of Conversion,  Holder shall surrender for conversion this
Note,  accompanied by the attached  Assignment Form, unless the Shares are to be
issued  in the same  name as  Holder.  As  promptly  as  practicable  after  the
surrender of this Note,  the Company  shall  deliver or cause to be delivered to
Holder,  at the last address for Holder  appearing on the records of the Company
or to  such  other  address  as  may be set  forth  by  Holder  in a  Notice  of
Conversion,  a  certificate(s)  for the number of fully paid and  non-assessable
shares of  Stonehouse  Common Stock or nStor Common  Stock,  as the case may be,
issuable upon conversion of this Note.

               f. Date of  Conversion.  Conversion  shall be deemed to have been
effected  immediately  prior to the close of  business  on the date on which the
Notice of  Conversion  is  received by the  Company  along with this  originally
executed  Note, as the case may be, (the "Date of  Conversion").  On the Date of
Conversion,  the rights of Holder  hereunder  shall cease and the  person(s)  in
whose name(s) any  certificate(s) for shares of Stonehouse Common Stock or nStor
Common  Stock  shall have been issued upon  conversion  ("Certificate  Holders")
shall be deemed to have  become  Holder(s)  of record of the shares  represented
thereby.  Notwithstanding,  if the stock  transfer  books of  Stonehouse  or the
Company,  as the  case  may be,  shall  be  closed  on the  Date of  Conversion,
Certificate  Holders shall be deemed to have become  shareholder(s) of record on
the next  succeeding day on which  Stonehouse's  or the Company's stock transfer
books, as the case may be, are open.

               g.  Legend.  Certificates  evidencing  the  shares of  Stonehouse
Common Stock or nStor Common  Stock  issued upon  conversion  of this Note shall
bear a legend  (to the extent  applicable)  similar to the legend on the face of
this Note.

               h. Fractional  Shares.  No fractional shares of Stonehouse Common
Stock or nStor Common Stock shall be issued upon conversion of this Note. In the
event that the principal amount and interest to be converted would result in the
issuance of a fractional share of Stonehouse Common Stock or nStor Common Stock,
such  fractional  shares,  on an aggregate  basis,  shall be disregarded and the
number of shares of Stonehouse  Common Stock or nStor Common Stock issuable upon
conversion  shall be, on an  aggregate  basis,  the next higher  number of whole
shares.

               i.  Taxes.  The  issuance of a  certificate(s)  for the shares of
Stonehouse  Common Stock or nStor  Common Stock shall be made without  charge to
Holder  for  any  documentary  tax  (other  than  Federal  or  state  taxes,  if
appropriate),  expense  or  related  cost in  respect  to the  issuance  of such
certificate(s).

               j. Partial Conversion.  Upon partial conversion of this Note, the
Company shall execute and deliver to Holder a substitute Note  representing  the
outstanding   principal  amount  of  this  Note  not  converted  and  containing
substantially the same terms as this Note.

               k.  Reservation  of Common Stock.  The Company shall at all times
reserve and keep available out of its  authorized  but unissued  shares of nStor
Common Stock,  solely for the purpose of effecting the  conversion of this Note,
such  number of its shares of nStor  Common  Stock as shall from time to time be
sufficient or as may be available to effect the  conversion  of the  outstanding
principal  amount of this Note,  and if at any time the number of authorized but
unissued  shares of nStor  Common  Stock shall not be  sufficient  to effect the
conversion of all of the then  outstanding  principal  amount of this Note,  the
Company  shall use its best  efforts to take such action as may be  necessary to
increase its authorized but unissued shares of nStor Common Stock to such number
of shares as shall be sufficient for such purposes.

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

     3. Application of Payments. All payments received shall be applied first to
charges other than interest and  principal,  if any,  owing  hereunder,  then to
accrued interest then due, then to principal,  except that, after the occurrence
and during the continuation of an Event of Default pursuant to Section 5 of this
Note, all amounts received shall be applied in such order as Holder, in its sole
discretion, may elect.

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

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

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

     7. Registration.
               a. Holder,  by his acceptance of this Note,  acknowledges that he
is aware that this Note has not been registered under the Act, or the securities
laws of any state or other jurisdiction.

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

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

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

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

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

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

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

        14.  Compliance With Law. It is the  responsibility  of Holder to ensure
that all payments  received by Holder comply with all tax,  securities and other
applicable laws,  rules, and regulations of all applicable  authorities,  and to
provide the Company with any written  consents or other documents  necessary for
compliance with such laws, rules and regulations.  It is the  responsibility  of
the Company to pay any documentary stamp, governmental, agency or any other type
of tax upon this Note or upon the indebtedness  evidenced hereby when due (other
than any federal, state or local income tax imposed upon Holder).

                            [Signature Page Follows]


        IN WITNESS WHEREOF, the Company has caused this Note to be signed by its
authorized  officer and its corporate seal to be affixed  hereto,  as of this __
day of February, 2003.


                                            nSTOR TECHNOLOGIES, INC.,
                                            a Delaware corporation


                                            By:  /s/ Thomas L. Gruber
                                            Its: Executive Vice President, and
                                                 Chief Financial Officer


<PAGE>


                              NOTICE OF CONVERSION

To:     nSTOR TECHNOLOGIES, INC.


     The  undersigned,  Holder of the  attached  Note  issued to H. Irwin  Levy,
hereby  exercises  the option to convert the  principal  amount of this Note, or
portion  thereof,   and/or  any  accrued  and  unpaid  interest  thereon,  below
designated,  for shares of the Common Stock of  _________________  in accordance
with the terms of the attached Note. The shares deliverable upon this conversion
(and any Note representing any nonconverted amount hereof),  shall be issued and
delivered to ________________.


Dated: __________, 200_
                                           HOLDER


                                           _______________________________


                                          Principal amount to be converted
                                          $________________

                                          Accrued but unpaid interest to
                                          be converted $____________

                                          Conversion Price (if and as adjusted)
                                          $_______ per share

                                          Number of shares of Common Stock to be
                                          issued ________________


<PAGE>


                                   ASSIGNMENT

        To be executed by the registered  holder to effect a permitted  transfer
of the within Note. Capitalized terms have the same meanings ascribed to them in
the within Note.


FOR VALUE RECEIVED  __________________________("Assignor") hereby sells, assigns
and transfers this Note unto

________________________________("Assignee") (Name)


_______________________________
(Address)


, and does  irrevocably  constitute  and  appoint  _____________________________
attorney to transfer the said right on the books of said  corporation  with full
power of substitution in the premises.



Date:___________________________      Assignor:


                                      By:
                                      Its:


                                      Signature:__________________________