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

THIS DEBENTURE IS NEGOTIABLE, SECURED AND SUBORDINATED TO ANY AND
ALL DEBTS OF THE COMPANY AS PROVIDED BELOW.


     NSTOR TECHNOLOGIES, INC.
     (a Delaware corporation)


     8% Convertible Subordinated Debenture


Amount: $1,000,000                 Dated: July 7, 1998



     NSTOR TECHNOLOGIES, INC., a Delaware corporation 
("Company"), for value received, hereby promises to pay to
MAURICE HALPERIN or to his order or to such persons as he may
designate from time to time ("Holder") in lawful money of the
United States of America, upon Holder's presentation and
surrender of this 8% Convertible Subordinated Debenture
("Debenture") at the principal office of the Company: (i) the
principal sum of One Million Dollars ($1,000,000) on August 7,
1998, 10:00 a.m., local time ("Maturity"), and (ii) interest on
the unpaid principal of this Debenture at the rate of eight
percent (8%) per annum, payable at Maturity.  Payment shall be
subject to conversion as provided in Section 1 hereof and to the
terms and conditions of this Debenture. 

     This Debenture may not be prepaid by the Company prior to
Maturity.

     1.   Mandatory Conversion by the Company.


          a.   The Company shall be required, on or prior to
Maturity, to convert all of the then outstanding principal amount
of this Debenture, and any accrued and unpaid interest, into
shares of convertible preferred stock, $.01 par value per share,
of the Company ("Preferred Stock"), at a conversion ratio of One
Thousand Dollars ($1,000) per share of Preferred Stock ("Stated
Value").  The number of shares to be issued upon such conversion
shall equal: (the principal amount of this Debenture plus accrued
and unpaid interest on such amount through the Date of
Conversion)/Conversion Price.  (For example, if the total
principal amount of this Debenture, plus accrued interest of
$6,000, were to be converted, the number of shares of Preferred
Stock to be issued would equal 1,006,000/1,000, or 1,006.)   

          b.   In order to exercise the conversion privilege, the
Company shall deliver the attached Notice (which must be fully
completed and executed) during regular business hours to the
Holder.  Promptly upon receipt of the Notice, the Holder shall
surrender for conversion this Debenture, accompanied by proper
assignments for transfer, unless the shares of Preferred Stock
issuable upon conversion are to be issued in the same name as the
Holder.  As promptly as practicable after the surrender of this
Debenture, the Company shall deliver or cause to be delivered to
the Holder, at the address indicated in the Notice, a
certificate(s) for the number of fully paid and non-assessable
shares of Preferred Stock issuable upon conversion of this
Debenture.  

          c.   Conversion shall be deemed to have been effected
immediately prior to the close of business on the date that this
Debenture is surrendered (the "Date of Conversion").  At the Date
of Conversion, the rights of the Holder hereunder shall cease and
the person(s) in whose name(s) any certificate(s) for shares of
Preferred Stock shall have been issued upon conversion
("Certificate Holders") shall be deemed to have become the
holder(s) of record of the shares represented thereby.  If the
stock transfer books of the Company shall be closed on the Date
of Conversion, Certificate Holders shall be deemed to have become
shareholder(s) of record on the next succeeding day on which the
Company's stock transfer books are open.

          d.   Certificates evidencing the shares of Preferred
Stock issued upon conversion of this Debenture shall bear a
legend (to the extent applicable) similar to the legend on the
face of this Debenture. 

          e.   No fractional shares of Preferred Stock shall be
issued upon conversion of this Debenture.  In the event that the
principal amount and interest to be converted would result in the
issuance of a fractional share of Preferred Stock, such
fractional shares, on an aggregate basis, shall be disregarded
and the number of shares of Preferred Stock issuable upon
conversion shall be, on an aggregate basis, the next higher
number of whole shares.

          f.   The issuance of a certificate(s) for shares of
Preferred Stock upon conversion of this Debenture shall be made
without charge to the Holder for any documentary tax (other than
Federal or state taxes, if appropriate), expense or related cost
in respect to the issuance of such certificate(s).

          h.   The Preferred Stock shall be convertible into
shares of Common Stock of the Company, par value $.05 per share
("Common Stock"), at a fixed conversion ratio of $0.60 per share
of Common Stock, i.e., each share of Preferred Stock, Stated
Value $1,000 per share, shall be convertible into 1,667 shares of
Common Stock.   

          i.   After conversion of this Debenture into shares of
Preferred Stock, the Company shall promptly file a registration
statement with the United States Securities and Exchange
Commission, under the Securities Act of 1933, as amended ("Act"),
covering the shares of Common Stock issuable upon conversion of
the Preferred Stock, and shall use its best efforts to have such
registration statement declared effective.

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

     3.   Subordination.  Indebtedness evidenced by this
Debenture shall be subordinate in interest, and in right of
payment as to principal and accrued interest, to the payment of
any and all "Senior Indebtedness."  "Senior Indebtedness" shall
mean:  (i) all indebtedness owed to any lender, whether or not
secured, including, without limitation all indebtedness under
revolving lines of credit and term loans; (ii) all obligations to
reimburse any bank or other person in respect of amounts paid
under letters of credit, acceptance or other similar instruments;
(iii) purchase money financing incurred in connection with the
purchase by the Company of goods, fixtures, equipment or
inventory; (iv) capital lease obligations; (v) liens prior in
interest to this Debenture by operation of law; (vi) all other
indebtedness which does not provide that it is to rank pari passu
with or subordinate to this Debenture; and (vii) all deferrals,
renewals, extensions and refundings of, and amendments,
modifications and supplements to any of the Senior Indebtedness
described above.

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

     5.   Covenants of the Company.  The Company covenants and
agrees that during the period within which the conversion rights
represented by this Debenture may be exercised, the Company shall
at all times reserve and keep available out of its authorized but
unissued shares of Preferred Stock, solely for the purpose of
effecting the conversion of this Debenture, such number of shares
of Preferred Stock as shall from time to time be sufficient to
effect the conversion of this Debenture; and if at any time the
number of authorized but unissued shares of Preferred Stock shall
be insufficient to effect the conversion of this Debenture, the
Company shall immediately take such corporate action as may be
necessary to increase the authorized but unissued shares of
Preferred Stock to such number of shares as shall be sufficient
for such purpose.

     6.   Negotiability.  This Debenture is negotiable.  It may
be sold, assigned or transferred by the Holder without the prior
written consent of the Board of Directors of the Company.  Upon
the death of the Holder, the Holder's administrator, executor,
heir or legatee shall have, upon written notice to the Company,
all rights and interests of the Holder in this Debenture.  Any
sale, assignment, transfer or succession (due to death of the
Holder) shall be made in compliance with all applicable Federal
and state securities laws, and upon any such event, the Company
may issue a substitute Debenture in the name of the new Holder
and representing the then outstanding principal and unpaid
accrued interest.

     7.   Registration.  

          a.   The Holder by his acceptance of this Debenture
acknowledges that he is aware that this Debenture and the shares
of Preferred Stock issuable to him by the Company upon conversion
of this Debenture have not been registered under the Act, or the
securities laws of any state or other jurisdiction.  

          b.   The Holder warrants and represents to the Company
that he has acquired this Debenture, and, upon conversion of the
Debenture, he will be acquiring Preferred Stock, for investment
and not with a view to or for sale in connection with any
distribution of this Debenture or such Preferred Stock or with
any intention of distributing or selling this Debenture or such
Preferred Stock.

     8.   Shareholder Rights.  The Holder shall have no rights as
a shareholder of the Company with respect to shares issuable upon
conversion of this Debenture until conversion and delivery to the
Holder of such shares, and then only with respect to shares so
delivered.  The Company may conclusively deem the person(s) named
as the Holder of this Debenture on the first page hereof as the
sole owner of this Debenture, and shall not be bound by any
notice to the contrary.  Notwithstanding anything herein to the
contrary, no person other than the Holder, or his successor in
interest under the provisions of Section 6 above, shall have any
interest or legal or equitable right under this Debenture.
     
     9.   Severability.  In case any provision of this Debenture
is held invalid, illegal or unenforceable by a court of competent
jurisdiction, the validity, legality and enforceability of the
remaining provisions shall not in any way be effected or impaired
thereby.

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

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

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

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

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

     15.  Captions.  Section captions are provided for the
convenience of the parties and are not intended to affect the
interpretation, performance or enforcement of this Debenture.

     16.  Compliance With Law.  It is the responsibility of the
Holder ensure that all payments received by the Holder comply
with all tax, securities and other applicable laws, rules, and
regulations of all applicable authorities, and to provide the
Company with any written consents or other documents necessary
for compliance with such laws, rules and regulations.

     IN WITNESS WHEREOF, the Company has caused this Debenture to
be signed by its authorized officer and its corporate seal to be
affixed hereto, as of this 7th day of July, 1998.




                              NSTOR TECHNOLOGIES, INC., 
                              a Delaware corporation



[Corporation Seal]                 By: MARK LEVY
                              Its:  VICE PRESIDENT



     Amendment No. 1 to 8% Convertible Subordinated Debenture

     This Amendment No. 1 to 8% Convertible Subordinated
Debenture is made as of the 6th day of August, 1998 between nStor
Technologies, Inc. (the "Company") and Maurice Halperin (the
"Investor").

     WHEREAS, the Company has issued to the Investor an 8%
Covertible Subordinated Debenture dated July 7, 1998 in the
amount of $1,000,000 (the "Debenture");

     WHEREAS, the Investor is the holder of the Debenture on the
date hereof; and

     WHEREAS, the Company and the Investor desire to amend the
Debenture as set forth herein; 

     NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknolwedged, the
Company and the Investor agree as follows:


     1.   The two operative paragraphs immediately preceding
numbered paragraph 1 of the Debenture shall read in their
entirety as follows:

          NSTOR TECHNOLOGIES, INC., a Delaware corporation 
("Company"), for value received, hereby promises to pay to
MAURICE HALPERIN or to his order or to such persons as he may
designate from time to time ("Holder") in lawful money of the
United States of America, upon Holder's presentation and
surrender of this 8% Convertible Subordinated Debenture
("Debenture") at the principal office of the Company: (i) the
principal sum of One Million Dollars ($1,000,000) on September
18, 1998, 10:00 a.m., local time ("Maturity"), and (ii) interest
on the unpaid principal of this Debenture at the rate of eight
percent (8%) per annum, payable at Maturity.  Payment shall be
subject to conversion as provided in Section 1 hereof and to the
terms and conditions of this Debenture. 

          Subject to the conversion privilege provided in Section
1 hereof, this Debenture may not be prepaid by the Company prior
to Maturity.

     2.   Prior to Maturity, the Investor agrees not to transfer
or otherwise negotiate the Debenture to any other person.

     3.   Other than as set forth herein, the Debenture shall
remain in full force and effect accordance with its terms.

Dated: August 7, 1998

NSTOR TECHNOLOGIES, INC.,               The Investor
a Delaware corporation


By:  MARK LEVY                     MAURICE HALPERIN
                                   By:  Jim Scutti,
Its:  VICE PRESIDENT                    Attorney-in-Fact