Certificate of Designation of Series I

                           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 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 I 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 I  Convertible
Preferred  Stock  (the  "Series I  Preferred  Stock")  and the  number of shares
constituting  the Series I Preferred Stock shall be Nine Thousand Ninety One and
75/100 (9,091.75). The Company may issue fractional shares of Series I Preferred
Stock. Each whole share of Series I Preferred Stock shall have a stated value of
One Thousand Dollars ($1,000) (the "Stated Value").

        2.  Dividends.

     (a) The holders of the outstanding shares of Series I Preferred Stock shall
be entitled to receive cash  dividends at an annual rate of ten percent (10%) of
the Stated Value as permitted by law (the "Dividend Rate"). Such dividends shall
be payable quarterly on the 10th day following the end of each calendar quarter,
with the first dividend  payment due on July 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 be a
sum sufficient  for the payment of the full amount of dividends  declared on the
Series I Preferred  Stock and any other class of the Company's  Preferred  Stock
outstanding  on the date hereof  other than the Series F  Convertible  Preferred
Stock  and the  Series H  Convertible  Preferred  Stock  (the  "Other  Preferred
Stock"),  then the amount  legally  available for  distribution  to the Series I
Preferred Stock and the Other Preferred Stock shall be distributed ratably among
such shares in proportion to the amount declared on each such share bears to the
aggregate  amount  declared  on all such  shares  before any  dividend  or other
distribution  shall be paid or declared and set apart with respect to the common
stock, par value $.05 per share, of the Company ("Common  Stock").  No dividends
shall be payable on the Series I  Preferred  Stock  prior to the  payment of all
accrued  dividends on the  Company's  Series F Convertible  Preferred  Stock and
Series H Convertible Preferred Stock. All accrued dividends shall be immediately
due and payable on the  outstanding  shares of Series I  Preferred  Stock on the
date such shares of Series I Preferred Stock are converted into shares of Common
Stock in accordance  with Section 5 hereof,  which date shall be the "Conversion
Date." Dividends may be paid in cash or additional shares of Common Stock of the
Company, as may be determined,  from time to time, in the sole discretion of the
Board of Directors.

        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 Common Stock or any other  capital stock of the Company
outstanding  on the date hereof,  other than the Series F Convertible  Preferred
Stock and the  Series H  Convertible  Preferred  Stock,  each  share of Series I
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,  an
amount equal to the Stated Value plus all accrued but unpaid dividends  (whether
or not declared) on such shares (collectively, the "Liquidation Amount").

               (b) If the assets of the Company  available for  distribution  to
its shareholders  shall be insufficient to pay the holders of shares of Series I
Preferred Stock and the Other Preferred Stock the full amount of the Liquidation
Amount to which they shall be entitled, then the assets and funds of the Company
legally available for distribution to the Series I Preferred Stock and the Other
Preferred Stock shall be distributed  ratably among such shares in proportion to
the ratio that the  Liquidation  Amount  payable on each such share bears to the
aggregate  Liquidation  Amount payable on all such shares.  If the assets of the
Company available for distribution to its shareholders  shall be insufficient to
pay the  holders of shares of Series I Preferred  Stock and the Other  Preferred
Stock,  the  full  amount  of the  Liquidation  Amount  to which  they  shall be
entitled,  then no dividend or  distribution  shall be paid with  respect to the
Common Stock then outstanding.

               (c) After the payment of the  Liquidation  Amount shall have been
made in full to the holders of the Series I 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 I  Preferred  Stock so as to be  available  for
such payments,  the holders of the Series I 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.

     4.  Voting  Power.  Except as  otherwise  expressly  provided  in Section 8
hereof,  or as required by law, each holder of Series I 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  I  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 I 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 I Preferred Stock.

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

               (a) Right to  Convert.  Each  holder of Series I  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 I Preferred Stock, at the option of the holder.

               (b) Conversion  Rate.  From and after the date of issuance,  each
share of Series I  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 Common Stock.

               (c)  Stock  Reclassifications;  Stock  Splits,  Combinations  and
Dividends.  If the Common Stock  issuable  upon the  conversion  of the Series I
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 I  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 I
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 I Preferred  Stock  shall  thereafter  be
entitled to receive upon conversion of the Series I 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 I
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 I
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 I  Preferred  Stock)  shall be  applicable  after that event in as
nearly equivalent a manner as may be practicable.

               (e) Exercise of Conversion Rights.  Holders of Series I Preferred
Stock may  exercise  their  right to  convert  the Series I  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 I 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  I  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 I 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  I  Preferred  Stock  (together  with  the
certificates  representing the Series I 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 I
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
I 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 I Preferred Stock certificates  representing
the portion of the Series I 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

               (f) Lost or Stolen  Certificates.  Upon receipt by the Company of
evidence of the loss, theft, destruction or mutilation of any Series I 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 I Preferred Stock certificate(s),  if mutilated,  the
Company shall execute and deliver new  certificates for Series I 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 I Preferred Stock if the
holder contemporaneously requests the Company to convert such Series I Preferred
Stock into Common Stock.


               (g) Fractional  Shares.  The Company may, if it so elects,  issue
fractional  shares of Common  Stock  upon the  conversion  of shares of Series I
Preferred Stock. If the Company does not elect to issue fractional  shares,  the
Company shall pay to the holder of the shares of Series I 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 I Preferred  Stock being converted at any one time by
any  holder  thereof,  not upon each  share of Series I  Preferred  Stock  being
converted.

               (h)  Partial  Conversion.  In the  event  some but not all of the
shares of Series I 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 I  Preferred  Stock  which were not
converted.

               (i)  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 I 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 I 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 I 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 I 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 I Preferred Stock a written notice of the
Company's  election to redeem  shares of Series I 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 I  Preferred  Stock  being
redeemed;  (ii) the number of shares of the Series I Preferred Stock held by the
holder that the Company  intends to redeem;  (iii) the aggregate  purchase price
for the shares of Series I 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 I  Preferred  Stock,  the
certificate  or  certificates  representing  the Series I 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 I 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 I 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 I Preferred Stock.

        7. No  Reissuance  of Series I Preferred  Stock.  Any share or shares of
Series I  Preferred  Stock  acquired  by the  Company  by reason of  redemption,
purchase, conversion or otherwise shall be cancelled, 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 I 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 I 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 trust),  without the approval by vote or written consent
by the holders of at least a majority of the then outstanding shares of Series I
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 I
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 I
Preferred Stock if such amendment would:

                      (i)    change   the   seniority   rights  of  the  holders
of Series I  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
I 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 I Preferred  Stock,  or change the dividend
rights of the holders of Series I  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 I Preferred Stock provided for in Section 5 herein; or

                      (iv)   cancel or modify  the rights of the  holders of the
Series I 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 I  Preferred
Stock.

        9. No Dilution or Impairment. The Company shall not, by amendment of its
certificate 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 I  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 I  Preferred  Stock  against
dilution or other impairment.  Without limiting the generality of the foregoing,
the Company 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 I  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 I  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.

                      [SIGNATURE APPEARS ON FOLLOWING PAGE]


                                            Signed on April 12, 2001


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