FORM OF SUBSCRIPTION AGREEMENT

        This Agreement is entered into as of the __th day of March,  2001 by and
between  nStor  Technologies,   Inc.,  a  Delaware  corporation   ("nStor")  and
__________________________ (the "Noteholder").

        WHEREAS,  the Noteholder made a loan (the "Loan") to nStor in the amount
of  $________,  which  Loan  is  evidenced  by  an 8%  convertible  subordinated
promissory note issued by nStor to the Noteholder dated as of the date hereof in
the  original   principal  amount  of  $________  (the  "Note")  which  Note  is
convertible  into _________ shares of common stock, par value $.05 per share, of
nStor (the "nStor Common Stock") at a conversion price of $1.00; and

        WHEREAS,  in  consideration  for the Loan, nStor desires to issue to the
Noteholder  a warrant  (the  "Warrant")  to purchase  _________  shares of nStor
Common Stock at a price of $1.20 (which  represents  120% of the closing  market
price for one share of nStor Common Stock on March 9, 2001),  upon the terms and
conditions described to the Board.

        NOW THEREFORE, the parties hereto agree as follows:

1. Delivery of Warrants.  On the date hereof, nStor shall deliver the Warrant to
the Noteholder. The Warrant, the Note, the shares of nStor Common Stock issuable
upon the exercise of the Warrants (the "Warrant Shares") and the shares of nStor
Common  Stock  issuable  upon  conversion  of the Note (the "Note  Shares")  are
collectively referred to herein as the "Securities".

2.Representations  of  nStor.  nStor  hereby  represents  and  warrants  to  the
Noteholder the following:

a.   nStor is a  corporation  validly  existing  under  the laws of the State of
     Delaware.

b.   The Warrant Shares, when delivered to the Noteholder in accordance with the
     terms of the Warrants, will be duly authorized, validly issued, fully paid,
     and nonassessable.

c.   The Note Shares,  when delivered to the  Noteholder in accordance  with the
     terms of the Note, will be duly authorized, validly issued, fully paid, and
     nonassessable.

3.  Representations  of the  Noteholder.  The Noteholder  hereby  represents and
warrants to nStor the following:

               a. The Noteholder  understands and represents  that: (i) he
        must bear the economic risk of this investment for an indefinite  period
        of time because none of the Securities  have been  registered  under the
        Securities Act of 1933, as amended (the "Securities  Act"), or under any
        state securities laws and,  therefore,  cannot be resold unless they are
        subsequently registered under the Securities Act and the pertinent state
        securities  laws or  unless  an  exemption  from  such  registration  is
        available;  and (ii) he is acquiring the  Securities  for investment for
        his own  account and not for the  account of any other  person,  and not
        with any present  view  toward  resale or other  "distribution"  thereof
        within that meaning of the Securities Act.

               b. The  Noteholder  has such  knowledge  and  experience in
        financial  and  business  matters that he is capable of  evaluating  the
        merits and risks of an investment in the  Securities.  The Noteholder is
        aware that an investment in the  Securities  is highly  speculative  and
        subject to substantial  risks.  The Noteholder is capable of bearing the
        high degree of economic risk and burdens of this  investment,  including
        the  possibility  of a complete  loss of his  investment.  The financial
        condition  of the  Noteholder  is such  that he is under no  present  or
        contemplated  future need to dispose of any of the Securities to satisfy
        any existing or contemplated undertaking, need or indebtedness.

               c. nStor has made available to the Noteholder,  or his designated
          representative, during the course of this transaction and prior to the
          issuance of any of the Securities, the opportunity to ask questions of
          and  receive   answers  from  the  officers  and  directors  of  nStor
          concerning  the terms and  conditions  of the  offering  or  otherwise
          relating to the  financial  data and business of nStor,  to the extent
          that nStor or its officers and directors  possess such  information or
          can acquire it without unreasonable effort or expense.  nStor has also
          made available to the Noteholder for inspection,  documents,  records,
          books and other written information about nStor, its business and this
          investment  at nStor's  principal  executive  office at 10140 Mesa Rim
          Road, San Diego, California, 92121.

4. Restricted Stock and Legend. The Noteholder  acknowledges that the Securities
offered  hereunder are being offered pursuant to a private  placement  exemption
under  the  Securities  Act,  and that the  Securities  are  deemed  "restricted
securities" as defined in the  Securities  Act. Until the Warrant Shares and the
Note Shares become  registered with the Securities and Exchange  Commission (the
"Commission"),  each  certificate  representing  a Warrant Share or a Note Share
shall bear a legend in substantially the following form:

     THE SHARE(S) REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
     THE  SECURITIES  ACT OF 1933,  AS AMENDED (THE  "ACT"),  OR UNDER ANY STATE
     SECURITIES  LAWS, AND THE  CORPORATION  HAS RELIED UPON AN EXEMPTION TO THE
     REGISTRATION  REQUIREMENT  UNDER  THE  ACT FOR  THE  SALE  OF THE  SHARE(S)
     REPRESENTED  BY THIS  CERTIFICATE  TO ITS  HOLDER.  THEREFORE,  THE  SHARES
     REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED STOCK AND MAY NOT BE SOLD OR
     TRANSFERRED  TO ANY THIRD PARTY WITHOUT EITHER BEING  REGISTERED  UNDER THE
     ACT OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT REGISTRATION IS
     NOT REQUIRED UNDER THE ACT.

5. Resales.  The Noteholder  agrees not to resell or otherwise dispose of all or
any part of the  Securities,  except as  permitted  by law,  including,  without
limitation,  any  and  all  applicable  provisions  of  this  Agreement  and any
regulations  under  the  Securities  Act.  Prior to any  transfer  or  attempted
transfer of any of the Securities issued hereunder, or any interest therein, the
Noteholder  shall  give  nStor  written  notice  of his  intention  to make such
transfer,  describing  the  manner of the  intended  transfer  and the  proposed
transferee.  Promptly after receiving such written  notice,  nStor shall present
copies  thereof  to its  counsel or to any  special  counsel  designated  by the
Noteholder or by such transferee which shall be reasonably  acceptable to nStor.
If in the opinion of such counsel the proposed  transfer may be effected without
registration of the Securities under the applicable  federal or state securities
laws, as promptly as  practicable,  the  Securities  proposed to be  transferred
shall be  transferred in accordance  with the terms of said notice.  nStor shall
not be  required  to  effect  any such  transfer  prior to the  receipt  of such
favorable opinion(s);  provided,  however,  nStor may waive the requirement that
the  Noteholder  obtain  an  opinion  of  counsel,  in  its  sole  and  absolute
discretion.  As a condition  to such  favorable  opinion,  counsel for nStor may
require an investment letter to be executed by the proposed transferee.

6. Indemnification. Each party hereto shall indemnify, defend and hold the other
harmless  from and against all claims,  losses,  liabilities,  costs,  expenses,
obligations,  damages,  including,  without  limitation,  litigation  costs  and
reasonable  attorneys' fees , sustained,  incurred or required to be paid by the
other  that  would  not  have  been  sustained,  incurred  or  paid  is all  the
representations,   warranties,  agreements  or  covenants  of  the  other  party
hereunder had been true, correct and duly performed.

7. Investor  Acknowledgment  of Certain Risk Factors.  The Investor  understands
that in addition to the various risks  ordinarily  attendant upon investments in
entities  in the  technology  industry,  certain  other  material  risk  factors
relating to the  Company  and its  business  make an  investment  in the Company
subject to a  particularly  high degree of risk. THE INVESTOR HAS BEEN CAUTIONED
THAT  AN  INVESTMENT  IN THE  SECURITIES  IS  HIGHLY  SPECULATIVE  AND  INVOLVES
SIGNIFICANT  RISKS INCLUDING THE RISK OF LOSS OF THE ENTIRE  INVESTMENT AND THAT
IT IS NOT  POSSIBLE TO FORESEE AND DESCRIBE  ALL OF THE  BUSINESS,  ECONOMIC AND
FINANCIAL  RISK FACTORS WHICH MAY AFFECT THE COMPANY.  THE INVESTOR  UNDERSTANDS
THAT  ADDITIONAL  INFORMATION  REGARDING  THE  COMPANY  IS  AVAILABLE  FROM  THE
COMPANY'S PUBLIC FILINGS WITH THE U.S.  SECURITIES AND EXCHANGE  COMMISSION (THE
"COMPANY  FILINGS").  SUCH COMPANY FILINGS CONTAIN,  AMONG OTHER INFORMATION,  A
DISCUSSION OF CERTAIN RISKS INVOLVED IN AN INVESTMENT IN THE SECURITIES.

8.     Miscellaneous.

              a. Notices  required or  permitted  to be given  hereunder
        shall be in writing  and shall be deemed to be  sufficiently  given when
        personally  delivered or when sent by registered  mail,  return  receipt
        requested,  addressed  if to nStor,  at nStor  Technologies,  Inc.,  100
        Century Blvd., West Palm Beach, FL 33417, attn: Jack Jaiven, with a copy
        to Larry Hemmerich,  President of nStor, 10140 Mesa Rim Road, San Diego,
        California, 92121, and if to the Noteholder, at ____________________, or
        at such other  address as each such party  furnishes  by notice given in
        accordance  with  this  Section  7.a.,  and  shall  be  effective,  when
        personally delivered,  upon receipt, and when so sent by certified mail,
        fits business days after deposit with the United States Postal Service.

               b. Failure of any party to  exercise  any right or remedy
        under this  Agreement or  otherwise,  or delay by a party in  exercising
        such right or remedy, shall not operate as a waiver thereof.

               c. This  Agreement  shall be enforced,  governed by and
        construed in accordance with the laws of the State of Florida applicable
        to the agreements  made and to be performed  entirely within such state,
        without  giving  effect to rules  governing the conflict of laws. In the
        event that any provision of this  Agreement is invalid or  unenforceable
        under any applicable  statute or rule of law, then such provision  shall
        be deemed  inoperative to the extent that it may conflict  therewith and
        shall be deemed  modified to conform  with such  statute or rule of law.
        Any provision hereof which may prove invalid or unenforceable  under any
        law  shall  not  affect  the  validity  or  enforceability  of any other
        provision hereof.

            d. This Agreement constitutes the entire agreement among the parties
        hereto  with  respect  to  the  subject  matter  hereof.  There  are  no
        restrictions, promises, warranties or undertakings, other than those set
        forth or  referred  to  herein.  This  Agreement  supersedes  all  prior
        agreements and  understandings  among the parties hereto with respect to
        the subject matter hereof.

           e. This Agreement shall inure to the benefit of and be binding upon
         the successors and permitted assigns of each of the parties hereto.

           f. All pronouns and any variations  thereof refer to the  masculine,
        feminine or neuter, singular or plural, as the context may require.

           g. The headings in the  Agreement  are for  convenience  of reference
        only and shall not limit or otherwise affect the meaning hereof.

           h. This Agreement may be executed in two or more counterparts,  each
        of which shall be deemed an original  but all of which shall  constitute
        one and the same agreement.  This  Agreement,  once executed by a party,
        may be delivered to the other party hereto by telephone  line  facsimile
        transmission  of a copy of this  Agreement  bearing the signature of the
        party so delivering this Agreement.




                      (SIGNATURES APPEAR ON FOLLOWING PAGE)


        IN WITNESS  WHEREOF,  the parties have caused this  Agreement to be duly
executed by their  respective  officers  thereunto duly authorized as of the day
and year first above written.

                                            nSTOR TECHNOLOGIES, INC.



                                    By:________________________________________
                                        Name:
                                        Title:


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                                        Name:
                                        Title: