Certificate of Designation of Series H

                           Convertible Preferred Stock

                                       of

                            nStor Technologies, Inc.

It is certified that:

        A.  The name of the company is nStor  Technologies,  Inc.,  a Delaware
corporation (hereinafter the "Company").

        B.  The  certificate  of  incorporation  of  the  Company,  as  amended,
authorizes the issuance of one million (1,000,000) shares of shares of Preferred
Stock,  $.01 par value per share,  and expressly vests in the Board of Directors
of the Company the authority provided therein to issue all of said shares in one
or more series and by resolution or resolutions to establish the designation and
number and to fix the  relative  rights  and  preferences  of each  series to be
issued.

        C.  The Board of  Directors  of the Company,  pursuant to the  authority
expressly vested in it, has adopted the following  resolutions  creating a class
of Series H Convertible Preferred Stock:

        RESOLVED,  that a  portion  of the one  million  (1,000,000)  authorized
shares of  Preferred  Stock of the  Company  shall be  designated  as a separate
series possessing the rights and preferences set forth below:

        1.  Designation  and Amount.  The shares of such series shall have a par
value  of $.01 per  share  and  shall  be  designated  as  Series H  Convertible
Preferred  Stock  (the  "Series H  Preferred  Stock")  and the  number of shares
constituting  the Series H Preferred  Stock shall be Five  Thousand  One Hundred
(5,100).  The Company may issue  fractional  shares of Series H Preferred Stock.
Each whole  share of Series H Preferred  Stock shall have a stated  value of One
Thousand Dollars ($1,000) (the "Stated Value").

        2.  Dividends.  The  holders  of the  outstanding  shares  of  Series  H
Preferred Stock shall be entitled to receive  dividends at an annual rate of ten
percent (10%) of the Stated Value as permitted by law. Such  dividends  shall be
payable  quarterly  on March 10, June 10,  September  10 and December 10 of each
year with the first dividend  payment due on June 10, 2001. Such dividends shall
be cumulative,  whether or not there are profits,  surplus or other funds of the
Company legally available for the payment of dividends.  If there shall not have
been a sum sufficient for the payment  therefor set apart,  the deficiency shall
first  be paid  before  any  dividend  or  other  distribution  shall be paid or
declared and set apart with respect to any other class of the Company's  capital
stock outstanding on the date hereof. All accrued dividends shall be immediately
due and payable on the  outstanding  shares of Series H  Preferred  Stock on the
date such shares of Series H Preferred Stock are converted into shares of common
stock,  par value $.05 per share,  ("Common Stock") in accordance with Section 5
hereof, which date shall be the "Conversion Date". Dividends may be paid only in
cash.

        3.     Liquidation, Dissolution or Winding Up.

               (a) In the event of any liquidation, dissolution or winding up of
the Company,  whether  voluntary or involuntary,  before any distribution may be
made with respect to the Junior Securities (as hereinafter defined),  holders of
each share of Series H  Preferred  Stock shall be entitled to be paid out of the
assets of the Company  available  for  distribution  to holders of the Company's
capital  stock of all  classes,  whether such assets are  capital,  surplus,  or
capital  earnings,  the  Liquidation  Preference (as  hereinafter  defined) with
respect to the Series H Preferred Stock.

               (b) If the assets of the Company  available for  distribution  to
its shareholders  shall be insufficient to pay the holders of shares of Series H
Preferred  Stock the full  amount of the  Liquidation  Preference  to which they
shall be entitled, the holders of shares of Series H Preferred Stock shall share
ratably in any  distribution  of assets  according  to the amounts that would be
payable with respect to the shares of Series H Preferred Stock held by them upon
such  distribution if all amounts payable on or with respect to said shares were
paid in full and no dividend or distribution were to be paid with respect to any
Junior Securities then outstanding.

               (c) After the payment of the  Liquidation  Preference  shall have
been  made in full to the  holders  of the  Series  H  Preferred  Stock or funds
necessary for such payment shall have been set aside by the Company in trust for
the account of holders of the Series H Preferred Stock so as to be available for
such payments,  the holders of the Series H Preferred Stock shall be entitled to
no further  participation in the distribution of the assets of the Company,  and
the remaining  assets of the Company legally  available for  distribution to its
shareholders  shall  be  distributed  among  the  holders  of other  classes  of
securities of the Company in accordance with their respective terms.

               (d) The  purchase  or  redemption  by the Company of stock of any
class,  in any manner  permitted by law, shall not, for the purpose  hereof,  be
regarded as a liquidation, dissolution or winding up of the Company. Neither the
merger or  consolidation  of the Company  with and into any other entity nor the
sale or  transfer by the  Company of less than  substantially  all of its assets
shall, for the purposes hereof, be deemed a liquidation,  dissolution or winding
up of the Company.

               (e) For purposes of this Section,  the following terms shall have
the following meanings:

                      (i)    "Junior  Securities"  shall  mean (a) the  Common
Stock and (b) any series of Preferred  Stock of the Company  outstanding  on the
date hereof.

                      (ii)   "Liquidation  Preference"  with  respect to a Share
of Series H Preferred  Stock means an amount equal to the Stated  Value  thereof
plus any accrued and unpaid  dividends  and any amounts that may be due from the
Company with respect thereto pursuant to this Certificate of Designation.

        4. Voting  Power.  Except as otherwise  expressly  provided in Section 8
hereof,  or as required by law, each holder of Series H Preferred Stock shall be
entitled  to vote on all  matters  and shall be entitled to that number of votes
equal to the largest  number of shares of Common Stock into which such  holder's
shares  of  Series  H  Preferred  Stock  could  be  converted,  pursuant  to the
provisions  of Section 5 hereof,  at the record  date for the  determination  of
shareholders  entitled  to vote on such  matter  or, if no such  record  date is
established,  at the  date  such  vote  is  taken  or  any  written  consent  of
shareholders is solicited.  Except as otherwise  expressly provided herein or as
required by law,  the  holders of shares of Series H Preferred  Stock and Common
Stock shall vote  together as a single class on all matters.  The holders of the
Common  Stock  shall not take any action by written  consent  without  the prior
written consent of the holders of a majority of the Series H Preferred Stock.

     5.  Conversion  Rights for the Series H  Preferred  Stock.  The  holders of
Series H Preferred  Stock shall have conversion  rights as follows  ("Conversion
Rights"):

               (a) Right to Convert.  Each  holder of Series H  Preferred  Stock
shall be entitled  (at the times and in the amounts set forth below) to convert,
in whole or in part, in multiples of one hundred (100) shares,  shares of Series
H Preferred Stock, at the option of the holder.

               (b) Conversion  Rate.  From and after the date of issuance,  each
share of Series H  Preferred  Stock may be  converted  into One  Thousand  Three
Hundred   Eighty-Eight   and  89/100   (1,388.89)   shares  of  fully-paid   and
non-assessable shares of Common Stock.

               (c)  Stock  Reclassifications;  Stock  Splits,  Combinations  and
Dividends.  If the Common Stock  issuable  upon the  conversion  of the Series H
Preferred Stock 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 of each
share of Series H  Preferred  Stock shall have the right  thereafter  to convert
such share into the kind and amount of shares of stock and other  securities and
property receivable upon such capital reorganization,  reclassification or other
change  which  such  holder  would  have  received  had its  shares  of Series H
Preferred Stock been converted immediately prior to such capital reorganization,
reclassification or other change.

               (d) Capital  Reorganization,  Merger or Sale of Assets. If at any
time or from time to time there shall be a capital  reorganization of the Common
Stock (other than a subdivision,  combination,  reclassification  or exchange of
shares provided for in Section 5(c) above) or a merger or  consolidation  of the
Company with or into another  corporation,  or the sale of all or  substantially
all  of  the  Company'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 (on an as converted
basis) are 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 the holders of the Series H Preferred  Stock  shall  thereafter  be
entitled to receive upon conversion of the Series H Preferred  Stock, 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 such holder
would have been  entitled  if such holder had  converted  its shares of Series H
Preferred  Stock  immediately  prior to such  Reorganization.  In any such case,
appropriate  adjustment  shall be made in the  application  of the provisions of
this  Section 5 with  respect  to the  rights  of the  holders  of the  Series H
Preferred Stock after the Reorganization, to the end that the provisions of this
Section 5 (including adjustment of the number of shares issuable upon conversion
of the Series H  Preferred  Stock)  shall be  applicable  after that event in as
nearly equivalent a manner as may be practicable.

               (e)    Issuance of Certain Common Stock Below Conversion Price.

                      (i)    In case the Company,  after the date hereof,  shall
issue or sell shares of Common  Stock at a price of less than $0.72 per share of
Common  Stock  (other than upon  exercise of options to  purchase  common  stock
issued to  employees  of the Company  pursuant to an  employee  stock  option or
similar plan or upon exercise or conversion of securities  that are  convertible
or  exchangeable  into  Common  Stock  and that are  outstanding  as of the date
hereof),  then in each case the number of shares of Common Stock  issuable  upon
the  conversion  of all Series H Preferred  Stock shall be increased in a manner
determined  by  multiplying  the  number of shares of Common  Stock  theretofore
issuable  upon the  conversion  of all of the  Series  H  Preferred  Stock  then
outstanding  by a fraction of which the numerator  shall be the number of shares
of Common Stock  outstanding  immediately prior to the sale or issuance plus the
number of  additional  shares of Common Stock  offered for sale and of which the
denominator   shall  be  the  number  of  shares  of  Common  Stock  outstanding
immediately  prior to the sale or  issuance  plus the number of shares of Common
Stock  which the  aggregate  consideration  to be  received  by the  Company  in
connection with such sale or issuance would purchase at $0.72 per share.

                      (ii)   In case the Company  shall  issue or sell shares of
Common Stock in exchange for property other than cash or its equivalent, then in
determining  the  "price  per share of  Common  Stock"  and the  "consideration"
receivable by or payable to the Company for purposes of this Section  5(e),  the
Board of Directors of the Company shall determine, in good faith, the fair value
of such property.

                      (iii)  Any  increase  of the number of shares of Common
Stock issuable upon conversion of the Series H Preferred Stock then  outstanding
made  pursuant  to this  Section  5(e) shall be  allocated  among such shares of
Series H Preferred Stock on a pro rata basis.

                (f)   Exercise of Conversion Rights.

                      (i)  Holders of Series H  Preferred  Stock may  exercise
their right to convert the Series H Preferred  Stock by  telecopying an executed
and completed  notice (a "Notice of  Conversion")  to the Company and delivering
the original Notice of Conversion and the certificate  representing the Series H
Preferred  Stock by  express  courier.  Each  business  day on which a Notice of
Conversion is telecopied to and received by the Company along with a copy of the
originally executed Series H Preferred Stock certificates in accordance with the
provisions hereof shall be deemed a "Conversion  Date." For purposes hereof, the
term  "business day" refers the hours between 9:00 a.m. and 5:00 p.m. on any day
on which banks are open for  business in Palm Beach  County,  Florida.  Provided
that the Company has  received the original  Notice of  Conversion  and Series H
Preferred Stock  certificate being so converted,  the Company will transmit,  or
instruct its transfer agent to transmit, the certificates representing shares of
Common Stock issuable upon  conversion of any share of Series H Preferred  Stock
(together with the certificates representing the Series H Preferred Stock not so
converted) to the holder thereof via express courier,  by electronic transfer or
otherwise,  three business days after the receipt by the Company of the original
Series H Preferred Stock Certificate representing the shares being converted. In
addition to any other  remedies  which may be available to the holders of shares
of Series H Preferred Stock, in the event that the Company fails to deliver,  or
has failed to contact its transfer agent to deliver, such shares of Common Stock
within such three (3) business day period, the holder will be entitled to revoke
the relevant  Notice of  Conversion by delivering a notice to such effect to the
Company  whereupon  the Company  and the holder  shall each be restored to their
respective positions immediately prior to delivery of such Notice of Conversion.
The Notice of Conversion and Series H Preferred Stock certificates  representing
the portion of the Series H Preferred  Stock converted shall be delivered to the
following address:

                      nSTOR TECHNOLOGIES, INC.
                      100 Century Blvd.
                      West Palm Beach, FL  33417
                      Fax:   (561) 640-3160

               (g) Lost or Stolen  Certificates.  Upon receipt by the Company of
evidence of the loss, theft, destruction or mutilation of any Series H Preferred
Stock  certificate(s),  and (in the  case of  loss,  theft  or  destruction)  of
indemnity  or security  reasonably  satisfactory  to the  Company,  and upon the
cancellation of the Series H Preferred Stock certificate(s),  if mutilated,  the
Company shall execute and deliver new  certificates for Series H Preferred Stock
of like tenure and date. However,  the Company shall not be obligated to reissue
such lost or stolen  certificates  for shares of Series H Preferred Stock if the
holder contemporaneously requests the Company to convert such Series H Preferred
Stock into Common Stock.

               (h) Fractional  Shares.  The Company may, if it so elects,  issue
fractional  shares of Common  Stock  upon the  conversion  of shares of Series H
Preferred Stock. If the Company does not elect to issue fractional  shares,  the
Company shall pay to the holder of the shares of Series H Preferred  Stock which
were  converted a cash  adjustment  in respect of such  fractional  shares in an
amount  equal to the same  fraction of the market  price per share of the Common
Stock  (as  determined  in a  reasonable  manner  prescribed  by  the  Board  of
Directors) as of the close of business on the Conversion Date. The determination
as to whether any  fractional  shares are issuable shall be based upon the total
number of shares of Series H Preferred  Stock being converted at any one time by
any  holder  thereof,  not upon each  share of Series H  Preferred  Stock  being
converted.

               (i)  Partial  Conversion.  In the  event  some but not all of the
shares of Series H Preferred Stock  represented by a certificate or certificates
surrendered by a holder are converted,  the Company shall execute and deliver to
or to the order of the holder, at the expense of the Company,  a new certificate
representing  the number of shares of Series H  Preferred  Stock  which were not
converted.

               (j)  Reservation of Common Stock.  The Company shall at all times
reserve and keep available out of its  authorized but unissued  shares of Common
Stock,  solely for the purpose of effecting the  conversion of the shares of the
Series H Preferred  Stock,  such  number of its shares of Common  Stock as shall
from time to time be sufficient or as may be available to effect the  conversion
of all outstanding  shares of the Series H Preferred  Stock,  and if at any time
the  number of  authorized  but  unissued  shares of Common  Stock  shall not be
sufficient to effect the  conversion of all the then  outstanding  shares of the
Series H Preferred  Stock,  the Company  shall use its best efforts to take such
corporate  action as may be necessary to increase  its  authorized  but unissued
shares of Common Stock to such number of shares as shall be sufficient  for such
purpose.

        6. Redemption at the Option of the Company. The Company may at any time,
at its election,  redeem,  in whole or from time to time in part,  the shares of
the then  outstanding  Series H Preferred Stock at a purchase price per share in
cash equal to the Stated Value plus all accrued but unpaid dividends (whether or
not  declared) to the date of  redemption.  The Company will mail or cause to be
delivered to each holder of the Series H Preferred Stock a written notice of the
Company's  election to redeem  shares of Series H Preferred  Stock not less than
thirty  (30) days  prior to the date set for the  redemption.  The  notice  will
state:  (i) the total  number of shares of the Series H  Preferred  Stock  being
redeemed;  (ii) the number of shares of the Series H Preferred Stock held by the
holder that the Company  intends to redeem;  (iii) the aggregate  purchase price
for the shares of Series H Preferred Stock being  redeemed;  (iv) the redemption
date;  and (v) that the holder is to surrender to the Company,  at the office of
the  Company  or the  transfer  agent  for the  Series H  Preferred  Stock,  the
certificate  or  certificates  representing  the Series H Preferred  Stock to be
redeemed. Such notice shall be accompanied by a representation by the Company to
the effect that the  consummation  of the redemption will not render the Company
insolvent or unable to pay its debts as they become due,  that the  consummation
of the  redemption  will not conflict with or result in a breach or violation of
any of the terms or  provisions  of, or  constitute  a default (or an event that
with the  giving  of  notice or the  lapse of time or both  would  constitute  a
default) under, or give rise to a right of termination,  amendment, cancellation
or  acceleration  of  any  right  or  obligation  of the  Company  or any of its
subsidiaries  under, or give rise to a loss of any material benefit to which the
Company or any of its  subsidiaries  is entitled  under, or require any consent,
approval or  authorization  under,  any  indenture,  credit  agreement  or other
material agreement to which the Company or any of the subsidiaries is a party or
by which any of them are bound or to which any of their property is subject,  or
give the holder of any note,  debenture or other  evidence of  indebtedness  the
right to require the repurchase,  redemption or repayment of all or a portion of
such  indebtedness  by  the  Company  or any of its  subsidiaries.  As  soon  as
practical  following  the  redemption  date and  receipt of the  certificate  or
certificates  representing  the shares of Series H Preferred  Stock so redeemed,
the Company shall  deliver to the holder the aggregate  price payable in respect
of the redeemed shares and a new certificate representing the unredeemed portion
of the shares,  if any. At the effective  date of the  redemption,  the redeemed
shares shall no longer be deemed  outstanding shares of Series H Preferred Stock
for any  purpose  and shall  thereafter  only be deemed to entitle the holder to
receive  the  redemption  price  upon  surrender  of the  certificates  formerly
representing such shares of Series H Preferred Stock.

        7. No  Reissuance  of Series H Preferred  Stock.  Any share or shares of
Series H  Preferred  Stock  acquired  by the  Company  by reason of  redemption,
purchase,  conversion or otherwise shall be canceled, shall return to the status
of authorized but unissued  preferred stock of no designated  series,  and shall
not be reissuable by the Company as Series H Preferred Stock.

        8. Restrictions and Limitations.

               (a) Corporate  Securities  Action.  Except as expressly  provided
herein or as required by law, so long as any shares of Series H Preferred  Stock
remain  outstanding,  the Company shall not, and shall not permit any subsidiary
(which shall mean any  corporation,  association  or other  business  entity for
which the Company  and/or any of its other  subsidiaries  directly or indirectly
owns at the time more than fifty percent (50%) of the outstanding voting shares,
or more than 50% of the combined voting power of the outstanding  voting shares,
of such corporation or entity),  without the approval by vote or written consent
by the holders of at least a majority of the then outstanding shares of Series H
Preferred Stock, voting as a separate class, to take any action, or fail to take
any action,  which would adversely  affect the rights of the holders of Series H
Preferred Stock.

               (b) Amendments to Charter. Without limiting the generality of the
preceding  paragraph and except as otherwise provided in Section 8(c) below, the
Company shall not amend its certificate of incorporation without the approval by
the  holders of at least a majority of the then  outstanding  shares of Series H
Preferred Stock if such amendment would:

                      (i)    change  the   seniority   rights  of  the  holders
of Series H  Preferred  Stock as to the  payment of  dividends  relative  to the
seniority  rights  of the  holders  of  all  other  series  of  preferred  stock
outstanding on the date hereof;

                      (ii)   reduce the amount payable to the  holders of Series
H Preferred Stock upon the voluntary or involuntary liquidation,  dissolution or
winding  up  of  the  Company,  or  change  the  seniority  of  the  liquidation
preferences of the holders of Series H Preferred  Stock,  or change the dividend
rights of the holders of Series H  Preferred  Stock  relative  to the  seniority
rights as to  liquidation  preferences  or dividends of the holders of all other
series of preferred stock outstanding on the date hereof;

                      (iii)  cancel or modify the  conversion  rights of the
holders of Series H Preferred Stock provided for in Section 5 herein; or

                      (iv)   cancel or modify  the rights  of the holders of the
Series H Preferred Stock provided for in this Section 8.

               (c) Notwithstanding any provision herein to the contrary, nothing
in this  Certificate  of  Designation  shall  prevent the Company  from  issuing
additional  series of  preferred  stock  after the date  hereof  with  dividend,
liquidation  or  redemption  rights  senior to those of the  Series H  Preferred
Stock.

        9. No Dilution or Impairment. The Company shall not, by amendment of its
articles of  incorporation  or through any  reorganization,  transfer of assets,
consolidation,  merger,  dissolution,  issue or sale of  securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the Series H  Preferred  Stock set forth  herein,  but shall at all
times in good  faith  assist in the  carrying  out of all such  terms and in the
taking  of all such  actions  as may be  necessary  or  appropriate  in order to
protect  the  rights of the  holders  of the Series H  Preferred  Stock  against
dilution or other impairment.  Without limiting the generality of the foregoing,
the  Company  (a)  shall  not  increase  the par  value of any  shares  of stock
receivable on the  conversion  of the Series H Preferred  Stock above the amount
payable  therefor on such  conversion,  (b) shall take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue
fully-paid and non-assessable  shares of stock on the conversion of all Series H
Preferred  Stock from time to time  outstanding,  and (c) shall not  consolidate
with or merge  into any other  person or permit any such  person to  consolidate
with or merge into the  Company (if the  Company is not the  surviving  person),
unless such other person shall expressly  assume in writing and will be bound by
all of the terms of the Series H Preferred Stock set forth herein.

        10.    Notices of Record Date.  In the event of:

               (a) any taking by the  Company of a record of the  holders of any
class of securities for the purpose of determining  the holders  thereof who are
entitled  to  receive  any  dividend  or  other  distribution,  or any  right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or

               (b)   any   capital    reorganization   of   the   Company,   any
reclassification or  recapitalization  of the capital stock of the Company,  any
merger of the Company, or any transfer of all or substantially all of the assets
of the Company to any other corporation, or any other entity or person, or

               (c) any  voluntary or  involuntary  dissolution,  liquidation  or
winding up of the Company, then and in each such event the Company shall mail or
cause  to be  mailed  to each  holder  of  Series  H  Preferred  Stock a  notice
specifying  (i) the date on which any such record is to be taken for the purpose
of such  dividend,  distribution  or right and a description  of such  dividend,
distribution  or  right,  (ii)  the  date  on  which  any  such  reorganization,
reclassification,  recapitalization,  transfer, merger, dissolution, liquidation
or winding up is expected to become  effective  and (iii) the time, if any, that
is to be fixed,  as to when the  holders  of  record  of Common  Stock (or other
securities) shall be entitled to exchange their shares of Common Stock (or other
securities)   for   securities   or  other   property   deliverable   upon  such
reorganization,    reclassification,    recapitalization,    transfer,   merger,
dissolution  ,  liquidation  or winding up. Such notice shall be mailed at least
ten (10) business days prior to the date  specified in such notice on which such
action is to be taken.

                                            Signed on April 12, 2001


                                            By:  /s/ Jack Jaiven
                                               ---------------------------
                                               Jack Jaiven, Vice President