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



DATED: March __, 2001                                                   NO. __


                                 FORM OF WARRANT

                            nSTOR TECHNOLOGIES, INC.

                       Warrant to Purchase _______ Shares
                    of Common Stock, par value $.05 per share

                   VOID AFTER 5:00 P.M., EASTERN STANDARD TIME
                                ON MARCH 31, 2004


        This certifies that, for value received, _______________________________
("_____"),  or registered assigns (collectively with _______, the "Holder"),  is
entitled to purchase from nStor Technologies,  Inc., a Delaware corporation (the
"Company"),  _______________  (_______) fully paid and nonassessable shares (the
"Shares") of the Common Stock, par value $.05 per share, of the Company ("Common
Stock")  at a price  equal to $1.20  per  share  (which  represents  120% of the
closing  market  price for one share of the Common  Stock on March 9, 2001) (the
"Exercise  Price")  at any time and from  time to time  from and  after the date
hereof to and including 5:00 p.m.,  Eastern Standard Time on March 31, 2004 (the
"Exercise Period"),  subject to the terms,  conditions and adjustments set forth
in this Warrant.

1.      Exercise of Warrants.

       (a)This Warrant may be exercised in whole or in part by the Holder during
the Exercise Period upon  presentation and surrender  hereof,  with the attached
Purchase Form duly executed, at the office of the Company located at 100 Century
Boulevard,  West  Palm  Beach,  FL 33417,  accompanied  by full  payment  of the
Exercise Price multiplied by the number of Shares of the Company being purchased
(the "Purchase Price"), whereupon the Company shall cause the appropriate number
of  Shares  to be issued  and  shall  deliver  to the  Holder,  as  promptly  as
practicable, a certificate representing the Shares being purchased. This Warrant
may be exercised for not less than 1,000 Shares and in additional  increments of
1,000 Shares at any time and from time to time during the Exercise Period.  Upon
each partial  exercise  hereof,  a new warrant  evidencing  the remainder of the
Shares  will be issued  to the  Holder,  at the  Company's  expense,  as soon as
reasonably  practicable,  at the same  Exercise  Price,  for the  same  Exercise
Period, and otherwise of like tenor as the Warrant partially exercised.

       (b)  Payment  of the  Purchase  Price may be made as  follows  (or by any
combination of the following): (i) in United States currency by cash or delivery
of a certified or bank cashier's  check payable to the order of the Company,  or
by wire  transfer of  immediately  available  funds to an account  designated in
writing by the Company,  in the amount of the Purchase Price,  (ii) by surrender
to the Company of this  Warrant in  exchange  for the number of shares of Common
Stock equal to the product of (x) the number of shares to which this  Warrant is
being  exercised  multiplied  by (y) a fraction,  the  numerator of which is the
Current  Market  Price (as defined  below) of the Common Stock less the Exercise
Price and the  denominator  of which is the Current  Market  Price,  or (iii) by
surrender to the Company for  cancellation of that portion of the 8% Convertible
Subordinated  Promissory  Note of even date herewith issued to the Holder by the
Company equal to the Purchase Price. The term "Current Market Price" shall mean,
on any date specified herein, the amount per share of the Common Stock, equal to
(i) the last reported sale price of such Common Stock,  on such date or, in case
no such sale takes place on such date,  the average of the closing bid and asked
prices  thereof on such  date,  in either  case as  officially  reported  on the
principal national securities exchange on which such Common Stock is then listed
or  admitted  for  trading,  (ii) if such  Common  Stock is not then  listed  or
admitted for trading on any national  securities exchange but is designated as a
national market system security by the NASD, the last reported  trading price of
the Common Stock on such date, (iii) if there shall have been no trading on such
date or if the Common Stock is not so designated, the average of the closing bid
and asked prices of the Common Stock on such date as shown by the NASD automated
quotation  system,  or (iv) if such Common  Stock is not then listed or admitted
for trading on any national exchange or quoted in the  over-the-counter  market,
the fair value  thereof  (as of a date which is within 20 days of the date as of
which  the  determination  is  to  be  made)  determined  in  good  faith  by an
independent  investment  banking  firm  selected  jointly by the Company and the
Holder or, if that  selection  cannot be made within ten days, by an independent
investment  banking firm  selected by the American  Arbitration  Association  in
accordance with its rules, and provided further,  that the Company shall pay all
of the fees and  expenses  of any third  parties  incurred  in  connection  with
determining the Current Market Price.

       (c)The Holder  shall be deemed for all purposes to have become the holder
of record of the Shares so  purchased  upon  exercise of this  Warrant as of the
close of business  on the date as of which this  Warrant,  together  with a duly
executed Purchase Form, was delivered to the Company and payment of the Purchase
Price was made (the "Exercise Date"),  regardless of the date of delivery of any
certificate  representing  the Shares so  purchased,  except that if the Company
were subject to any legal  requirements  prohibiting  it from issuing  shares of
Common Stock on such date,  the Holder shall be deemed to have become the record
holder of such Shares on the next succeeding date as of which the Company ceased
to be so prohibited.

        2.  Exchange; Restrictions on Transfer or Assignment.
This Warrant is exchangeable, without expense, at the option of the Holder, upon
surrender  hereof to the Company for other  warrants of like tenor of  different
denominations  entitling the Holder to purchase in the aggregate the same number
of Shares  purchasable  hereunder.  Subject to  compliance  with Section 5, this
Warrant and all rights hereunder are transferable,  in whole or in part, without
charge to the Holder,  upon  surrender of this Warrant with an  assignment  form
attached  hereto  duly  completed  and  executed  (with  signature  guaranteed),
whereupon  the  Company,  if it  determines  that  the  proposed  assignment  is
permitted  pursuant to the provisions  hereof,  shall register the assignment of
this Warrant in accordance with the information contained in the assignment form
and shall  execute  and  deliver a new  warrant or  warrants  in the name of the
assignee or assignees named in such  assignment form (and, if applicable,  a new
warrant  in the name of the  Holder  evidencing  any  remaining  portion  of the
Warrant not theretofore transferred or assigned) and this Warrant shall promptly
be canceled.  Conditions to the transfer of this Warrant or any portion  thereof
shall be that the proposed  transferee deliver to the Company his or its written
agreement  to accept  and be bound by all of the terms  and  conditions  of this
Warrant.

        3. Rights and  Obligations of Warrant  Holders.  This Warrant does
not confer upon the Holder any rights as a shareholder of the Company, either at
law or in equity. The rights of the Holder are limited to those expressed herein
and the Holder, by acceptance hereof,  consents to and agrees to be bound by and
to comply with all the provisions of this Warrant. Each Holder, by acceptance of
this Warrant, agrees that the Company and its transfer agent, if any, may, prior
to any presentation of this Warrant for registration of transfer, deem and treat
the person in whose name this Warrant is registered  as the  absolute,  true and
lawful owner of this Warrant for all purposes whatsoever and neither the Company
nor any transfer agent shall be affected by any notice to the contrary.

        4. Covenants and Warranties of the Company.  The Company covenants
and agrees that:  (i) all Shares which may be issued and delivered upon exercise
of this Warrant and payment of the Purchase Price will,  upon delivery,  be duly
authorized, validly issued, fully-paid and nonassessable shares of Common Stock;
and (ii) the Company shall at all times during the Exercise  Period  reserve and
keep  available  a number of  authorized  but  unissued  shares of Common  Stock
sufficient to permit the exercise in full of this Warrant. The Company will take
all such  actions as may be  necessary to assure that all shares of Common Stock
may be so issued  without  violation  by the  Company of any  applicable  law or
government  regulation or any requirement of any securities  exchange upon which
shares of Common Stock may be listed  (except for  official  notice of issuance,
which the Company will transmit  promptly  upon  issuance of such  shares).  The
Company  will at no time  close its  shareholder  books or records in any manner
which interferes with the timely exercise of this Warrant.

        The  Company  represents  and  warrants  that:  (i)  the  Company  is  a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware; (ii) the Company has all requisite corporate power and
authority to issue this Warrant and to consummate the transactions  contemplated
hereby,  and such issuance and consummation  will not conflict with, result in a
material breach of, constitute a material default under or material violation of
any provision of the Company's  Certificate of Incorporation  or Bylaws,  and to
the best  knowledge of the Company,  any law or regulation  of any  governmental
authority or any provision of any  agreement,  judgment or decree  affecting the
Company;  and (iii) all corporate  action required to be taken by the Company in
connection  with the execution and delivery of this Warrant and the  performance
of the Company's obligations hereunder has been taken.

        5. Disposition of Warrants or Shares. The Holder acknowledges that
neither  this  Warrant  nor the  Shares  have been  registered  under the Act or
applicable state law. The Holder agrees, by acceptance of this Warrant, (i) that
no sale,  transfer or  distribution  of this Warrant or the Shares shall be made
except in  compliance  with the Act and the rules  and  regulations  promulgated
thereunder,  including any applicable  prospectus delivery  requirements and the
restrictions on transfer set forth herein, and (ii) that if distribution of this
Warrant  or any Shares is  proposed  to be made by him or it  otherwise  than by
delivery of a prospectus meeting the requirements of Section 10 of the Act, such
action  shall be taken only  after  submission  to the  Company of an opinion of
counsel, reasonably satisfactory in form and substance to the Company's counsel,
to the effect that the proposed distribution will not be in violation of the Act
or applicable state law.

        6.     Adjustment.  The  number  of  Shares  purchasable  upon  the
exercise of this Warrant and the Exercise  Price are subject to adjustment  from
time to time as provided in this Section 6.

               (a) Subdivision or  Combination  of Shares.  If the Company
shall at any time  subdivide  its  outstanding  shares  of Common  Stock  into a
greater number of shares  (including a stock split effected as a stock dividend)
or  combine  its  outstanding  shares of Common  Stock  into a lesser  number of
shares,  the number of Shares  issuable  upon  exercise of this Warrant shall be
adjusted  to such  number as is  obtained  by  multiplying  the number of Shares
issuable upon exercise of this Warrant  immediately prior to such subdivision or
combination  by a fraction,  the numerator of which is the  aggregate  number of
shares of Common  Stock  outstanding  immediately  after  giving  effect to such
subdivision or combination and the denominator of which is the aggregate  number
of shares of Common Stock  outstanding  immediately prior to such subdivision or
combination,  and the Exercise Price shall be  correspondingly  adjusted to such
amount as shall,  when  multiplied  by the number of Shares  issuable  upon full
exercise of this Warrant (as increased or decreased to reflect such  subdivision
or combination of outstanding shares of Common Stock, as the case may be), equal
the  product  of  the  Exercise  Price  in  effect  immediately  prior  to  such
subdivision or combination multiplied by the number of Shares issuable upon full
exercise of this Warrant immediately prior to such subdivision or combination.

               (b) Effect of Sale, Merger or Consolidation.  If any capital
reorganization  or  reclassification  of the capital  stock of the  Company,  or
consolidation or merger of the Company with another corporation,  or sale of all
or  substantially  all of the Company's assets to another  corporation  shall be
effected  after the date hereof in such a way that holders of Common Stock shall
be  entitled  to  receive  stock,  securities  or assets  with  respect to or in
exchange  for  Common  Stock,  then,  as a  condition  of  such  reorganization,
reclassification,  consolidation,  merger or sale, lawful and adequate provision
shall be made whereby the Holder shall thereafter have the right to purchase and
receive,  upon the basis and the terms and conditions  specified in this Warrant
and in lieu of the Shares  immediately  theretofore  purchasable  and receivable
upon the exercise of this Warrant, such shares of stock, securities or assets as
may be  issued  or  payable  with  respect  to or in  exchange  for a number  of
outstanding shares of Common Stock equal to the number of shares of Common Stock
immediately  theretofore  purchasable  and receivable  upon the exercise of this
Warrant,  and in any such case appropriate  provision shall be made with respect
to the rights and interests of the Holder to the end that the provisions of this
Warrant  (including,  without  limitation,  provisions  for  adjustments  of the
Exercise  Price and of the number of Shares  issuable  upon the exercise of this
Warrant)  shall  thereafter  be  applicable,  as nearly as may be  possible,  in
relation to any shares of stock,  securities  or assets  thereafter  deliverable
upon the  exercise  of this  Warrant.  The  Company  shall not  effect  any such
consolidation,  merger  or sale  unless  prior  to or  simultaneously  with  the
consummation  thereof  the  successor  corporation  (if other than the  Company)
resulting from such  consolidation or merger or the corporation  purchasing such
assets shall assume, by written instrument  executed and delivered to the Holder
at its last address  appearing on the books of the Company,  the  obligation  to
deliver  to the  Holder  such  shares of  stock,  securities  or  assets  as, in
accordance with the foregoing sentence, the Holder may be entitled to purchase.

               (c) Notice to Holder of Adjustment.  Whenever  the
number of Shares purchasable upon exercise of this Warrant or the Exercise Price
is adjusted  as herein  provided,  the  Company  shall cause to be mailed to the
Holder,  in accordance  with the provisions of Section 9 hereof,  notice setting
forth the adjusted number of Shares purchasable upon the exercise of the Warrant
and the adjusted Exercise Price and showing in reasonable detail the computation
of the adjustment and the facts upon which such adjustment is based.

               (d)    Notices  to  Holder of  Certain  Events.
If at any time after the date hereof:

                      (i)    the Company shall declare any dividend or
                             other  distribution  upon  or with  respect  to the
                             Common Stock payable  otherwise than in cash out of
                             the  consolidated net income of the Company and any
                             subsidiaries   thereof,   including   any  dividend
                             payable   in  shares  of  Common   Stock  or  other
                             securities of the Company; or

                      (ii)   the Company shall offer for subscription to
                             the  holders  of its  Common  Stock any  additional
                             shares   of  stock  of  any   class  or  any  other
                             securities convertible into stock or any rights
                             to subscribe thereto; or

                      (iii)  there  shall  be  any  capital   reorganization  or
                             reclassification   of  the  capital  stock  of  the
                             Company (other than a change in par value,  or from
                             par value to no par value,  or from no par value to
                             par  value  or as  result  of  the  subdivision  or
                             combination  of shares),  or any  conversion of the
                             Shares into securities of another corporation, or a
                             sale of all or  substantially  all of the assets of
                             the Company,  or a  consolidation  or merger of the
                             Company  with  another  corporation  (other  than a
                             merger  with a  subsidiary  in which the Company is
                             the  continuing  corporation  and  which  does  not
                             result  in any  reclassification  or  change of the
                             Shares issuable upon exercise of the Warrants); or

                      (iv)   there  shall  be  a   voluntary   or   involuntary
                             dissolution,liquidation or winding up of the
                             Company;

then, in any one or more of said cases,  the Company shall cause to be mailed to
the Holder, not less than ten (10) days before any record date or other date set
for the  definitive  action,  written notice of the date upon which the books of
the  Company  shall  close or a  record  shall be  taken  for  purposes  of such
dividend, distribution or subscription rights or upon which such reorganization,
reclassification,   conversion,   sale,  consolidation,   merger,   dissolution,
liquidation  or winding up shall take  place,  as the case may be.  Such  notice
shall also set forth facts as shall  indicate  the effect of such action (to the
extent  such  effect  may be known at the date of such  notice) on the number of
Shares and the kind and amount of the shares of stock and other  securities  and
property  deliverable  upon  exercise of the  Warrants.  Such notice  shall also
specify the date as of which the holders of record of the shares of Common Stock
shall participate in said dividend, distribution or subscription rights or shall
be entitled to exchange  their  shares of Common Stock for  securities  or other
property  deliverable upon such  reorganization,  reclassification,  conversion,
sale, consolidation, merger, dissolution, liquidation or winding up, as the case
may be (on which  date in the event of  voluntary  or  involuntary  dissolution,
liquidation  or winding up of the  Company,  the right to exercise  the Warrants
shall terminate).

               (e) Fractional  Shares. The Company shall not be required to
issue any fraction of a Share upon the exercise of this  Warrant.  The number of
full Shares  which shall be issuable  upon the full or partial  exercise of this
Warrant shall be computed on the basis of the  aggregate  number of Shares as to
which this Warrant is being exercised.  In lieu of any fractional  interest in a
Share otherwise deliverable upon the exercise of this Warrant, the Company shall
pay a cash adjustment  (which may be effected as a reduction of the amount to be
paid by the Holder upon such exercise) in respect of such fraction of a Share in
an amount equal to the same fraction multiplied by the Current Market Price.

               (f) No Other  Adjustments.  No  adjustment  to the number of
Shares  subject to this Warrant or the Exercise  Price shall be made pursuant to
this Section 6 except as expressly provided herein.

        7.  Registration  Rights  Agreement.  The  Shares  issuable  upon
exercise of this Warrant shall constitute  Registrable  Securities (as such term
is defined in that certain  Registration  Rights  Agreement dated as of the date
hereof by and between the Company and the initial  Holder of this  Warrant  (the
"Registration  Rights  Agreement")).  Each Holder of this Warrant is entitled to
all of the  benefits  afforded  to a holder of any such  Registrable  Securities
under the Registration  Rights  Agreement and such Holder,  by its acceptance of
this Warrant,  agrees to be bound by and comply with the terms and conditions of
the Registration Rights Agreement  applicable to such Holder as a holder of such
Registrable Securities.

        8.   Survival.  The various rights and  obligations of the Holder and of
the  Company  as set forth in  Sections  3, 4, and 5 hereof  shall  survive  the
exercise  of  this  Warrant  and the  surrender  of this  instrument  upon  such
exercise.

        9.   Notice.  All  notices  required  by this  Warrant  to be  given  or
made by the Company shall be given or made by first class mail, postage prepaid,
addressed to the registered holder hereof at the address of such holder as shown
on the books of the Company.

        10.  Loss or  Destruction.  Upon  receipt  of  evidence  reasonably
satisfactory  to the Company of the loss,  theft,  destruction  or mutilation of
this Warrant and, in the case of any loss,  theft or destruction,  upon delivery
of an  indemnity  agreement  reasonably  satisfactory  in form and amount to the
Company and its counsel, or, in the case of any such mutilation,  upon surrender
and cancellation of this Warrant, the Company, at its expense,  will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

        11.    Miscellaneous.

               (a) Neither this Warrant nor any term hereof may be changed,
waived,  discharged or terminated except by a written instrument executed by the
Company and the Holder.

               (b) This  Warrant  shall be governed by, and  construed  and
enforced in accordance with, the internal laws of the State of Delaware, without
regard to principles of conflicts of laws thereof.

               (c) Each  provision of this Warrant shall be  interpreted in
such a manner as to be effective,  valid and enforceable  under  applicable law,
but if any  provision  of  this  Warrant  is  held  to be  invalid,  illegal  or
unenforceable  under  any  applicable  law or  rule  in any  jurisdiction,  such
provision will be ineffective only to the extent of such invalidity,  illegality
or unenforceability in such jurisdiction,  without invalidating the remainder of
this  Warrant  in  such  jurisdiction  or any  provision  hereof  in  any  other
jurisdiction.

               (d) No course of dealing or delay or failure to exercise any
right  hereunder  on the part of the  Holder  shall  operate as a waiver of such
right or otherwise prejudice the Holder's rights, power or remedies.

               (e) The  Company  shall pay all  expenses  incurred by it in
connection  with,  and all  documentary  stamp and other taxes (other than stock
transfer  taxes) and other  governmental  charges that may be imposed in respect
of, the issue,  sale and delivery of this Warrant and the Shares  issuable  upon
the exercise hereof.

               (f) This Warrant and the rights evidenced hereby shall inure
to the benefit of and be binding upon the  successors and assigns of the Company
and the successors and permitted assigns of the Holder.


                      [SIGNATURES APPEAR ON FOLLOWING PAGE]



        IN WITNESS WHEREOF the Company has caused this Warrant to be executed by
its duly authorized officer as of the ___ day of March, 2001.



ATTEST:                             nSTOR TECHNOLOGIES, INC.


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



                                   ASSIGNMENT

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


FOR VALUE RECEIVED----------------------- ("Assignor") hereby sells,
assigns and transfers unto

                                            ("Assignee")
-------------------------------------------
(Name)


(Address)



the right to purchase  __________ shares of Common Stock of nStor  Technologies,
Inc.  evidenced  by the  within  Warrant,  together  with all  right,  title and
interest    therein,    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:
                                                   ----------------------------



                                  PURCHASE FORM

        To be executed upon exercise of the within  Warrant.  Capitalized  terms
have the same meanings ascribed to them in the within Warrant.


To:  nStor Technologies, Inc.

        The  undersigned  hereby  exercises the right to purchase  _____________
Shares of Common Stock evidenced by the within  Warrant,  according to the terms
and  conditions  thereof,  and hereby makes payment of the Purchase  Price.  The
undersigned  requests  that  certificates  for the Shares shall be issued in the
name set forth below:

Dated:                              Name:__________________________________

                                         ----------------------------------
                                          (Address)
                                         ----------------------------------

                                       Social Security No.___________________
                                       or other identifying number