EXHIBIT 4.1

THIS NOTE HAS 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 NOTE, WHICH COUNSEL
IS SATISFACTORY TO THE COMPANY, THAT THE NOTE MAY BE PLEDGED,  SOLD, ASSIGNED OR
TRANSFERRED  WITHOUT  AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE  ACT OR
APPLICABLE STATE SECURITIES LAW.


                            nSTOR TECHNOLOGIES, INC.
                            (a Delaware corporation)

                         8% Convertible Promissory Note


Amount: $1,700,000                                         Dated: March 25, 2003
                                                            Carlsbad, California

        nSTOR  TECHNOLOGIES,   INC.  ("Company"),  for  value  received,  hereby
promises to pay on April 1, 2004, 10:00 a.m., local time ("Maturity") to Bernard
Marden 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 the Holder's
presentation  and surrender of this 8% Promissory Note ("Note") at the principal
office of the  Company:  (i) the  principal  sum of One  Million  Seven  Hundred
Thousand Dollars ($1,700,000) and (ii) interest on the amount outstanding at the
rate of eight percent (8%) per annum payable quarterly on July 15, 2003, October
15, 2003 and January 15, 2004, for interest  accrued through the last day of the
month  preceding  said payment.  This Note amends and  restates,  as of the date
hereof,  a promissory  note dated February 19, 2003 made by the Company in favor
of Holder in the original  principal  amount of Seven Hundred  Thousand  Dollars
($700,000.00)  (the "Initial  Note").  Any interest accrued but unpaid under the
Initial  Note  through  the date  hereof  shall be paid  with the July 15,  2003
quarterly  interest  payment due under this Note.  Payment of this Note shall be
subject  to  conversion  as  provided  in  Section 1 hereof and to the terms and
conditions of this Note.

        At any time on or prior  to  April  30,  2003,  Holder  may  advance  an
additional  $500,000 to the Company (the "Additional  Advance").  The Additional
Advance will be evidenced by a  promissory  note  containing  the same terms and
conditions as this Note.

        This  Note  is  secured  by  shares  of  common   stock  of   Stonehouse
Technologies,  Inc.  pursuant to that certain  Second Amended and Restated Stock
Pledge  Agreement of even date herewith  between the Company and the Holder (the
"Stock Pledge  Agreement").  This Note is also secured by certain  collateral of
the Company  pursuant to that certain  Security  Agreement of even date herewith
between the Company and the Holder (the "Security Agreement").

        At the  option of the  Company,  any  payment  by the  Company  required
hereunder  may be made by check mailed to the Holder at the last address for the
Holder  appearing  on the records of the Company.  This Note may be prepaid,  in
whole or part without penalty, at any time after the date hereof, provided that,
the Company must provide Holder with at least ten (10) days prior written notice
of its  intention to prepay the Note to allow Holder an  opportunity  to convert
this Note pursuant to Section 1 below

        1. Conversion.

               a. Right to Convert.  Holder shall be entitled, at any time prior
to  Maturity,  to  convert  all or a portion of the then  outstanding  principal
amount of this Note,  and/or any  accrued  and unpaid  interest,  into shares of
common  stock,  par value $.05 per share,  of the  Company  (the  "nStor  Common
Stock") at a per share  conversion  price of $0.30 per share ("nStor  Conversion
Price").  The number of shares to be issued upon such  conversion (the "Shares")
shall equal (x) the  principal  amount of this Note to be converted  pursuant to
this Section 1 plus any accrued and unpaid  interest on such amount  through the
Date of Conversion (as defined below) divided by (y) the nStor Conversion Price.
Any  conversion of all or part of the  principal  amount of this Note and/or any
accrued but unpaid  interest shall not extinguish the Holder's  otherwise  valid
contractual  right to any  remaining  principal  and any unpaid  interest not so
converted.

               b.  Stock  Reclassifications;   Stock  Splits,  Combinations  and
Dividends.  If the nStor Common Stock  issuable upon the conversion of this Note
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,  shall have the right
thereafter  to convert  all or any portion of this Note into the kind and amount
of shares  of stock  and other  securities  and  property  receivable  upon such
capital reorganization, reclassification or other change which Holder would have
received  had  this  Note  been  converted  immediately  prior  to such  capital
reorganization, reclassification or other change.

               c. Capital  Reorganization,  Merger or Sale of Assets.  If at any
time or from time to time there shall be a capital  reorganization  of the nStor
Common  Stock  (other  than  a  subdivision,  combination,  reclassification  or
exchange  of  shares  provided  for  in  Section  1b.  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) is 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  Holder  shall  thereafter  be  entitled  to receive  upon
conversion  of this Note,  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  Holder  would  have been  entitled  if the Holder had
converted such portion of this Note immediately prior to such Reorganization. In
any such case,  appropriate  adjustment  shall be made in the application of the
provisions  of this  subsection  with  respect to the rights of Holder after the
Reorganization,  to the end that the  provisions of this  subsection  (including
adjustment of the number of shares  issuable upon conversion of this Note) shall
be  applicable  after  that  event in as  nearly  equivalent  a manner as may be
practicable.

               d.  Exercise  of  Conversion  Right.  In  order to  exercise  the
conversion  privilege in Section 1a.  above,  Holder shall  deliver the attached
Notice of Conversion (which must be fully completed and executed) during regular
business  hours to the  Company  at the  office of the  Company.  Promptly  upon
receipt of the Notice of Conversion,  Holder shall surrender for conversion this
Note,  accompanied by the attached  Assignment Form, unless the Shares are to be
issued  in the same  name as  Holder.  As  promptly  as  practicable  after  the
surrender of this Note,  the Company  shall  deliver or cause to be delivered to
Holder,  at the last address for Holder  appearing on the records of the Company
or to  such  other  address  as  may be set  forth  by  Holder  in a  Notice  of
Conversion,  a  certificate(s)  for the number of fully paid and  non-assessable
shares of nStor Common Stock issuable upon conversion of this Note.

               e. Date of  Conversion.  Conversion  shall be deemed to have been
effected  immediately  prior to the close of  business  on the date on which the
Notice of  Conversion  is  received by the  Company  along with this  originally
executed Note (the "Date of Conversion").  On the Date of Conversion, the rights
of  Holder  hereunder  shall  cease  and the  person(s)  in  whose  name(s)  any
certificate(s)  for shares of nStor  Common  Stock  shall have been  issued upon
conversion  ("Certificate  Holders") shall be deemed to have become Holder(s) of
record of the shares represented thereby. Notwithstanding, 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.

               f.  Legend.  Certificates  evidencing  the shares of nStor Common
Stock  issued  upon  conversion  of this Note shall bear a legend (to the extent
applicable) similar to the legend on the face of this Note.

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

               h.  Taxes.  The  issuance of a  certificate(s)  for the shares of
nStor Common Stock shall be made  without  charge to 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).

               i. Partial Conversion.  Upon partial conversion of this Note, the
Company shall execute and deliver to Holder a substitute Note  representing  the
outstanding   principal  amount  of  this  Note  not  converted  and  containing
substantially the same terms as this Note.

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

        2. No Avoidance.  The Company shall not, by amendment of its Certificate
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 Note.

        3. Application of Payments. All payments received shall be applied first
to charges other than interest and principal,  if any, owing hereunder,  then to
accrued interest then due, then to principal,  except that, after the occurrence
and during the continuation of an Event of Default pursuant to Section 5 of this
Note, all amounts received shall be applied in such order as Holder, in its sole
discretion, may elect.

        4. No Waiver.  The  acceptance  by Holder of any payment under this Note
after the date that such  payment  is due shall not  constitute  a waiver of the
right to require prompt payment when due of future or succeeding  payments or to
declare a default as herein  provided for any failure to so pay. The  acceptance
by Holder of the payment of a portion of any  installment  at any time that such
installment is due and payable in its entirety shall neither cure nor excuse the
default caused by the failure to pay the whole of such installment and shall not
constitute  a waiver of Holder's  right to require  full payment when due of all
future or succeeding installments.

        5. Events of 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 Note  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 Note to be immediately
due and payable,  whereupon the outstanding  principal  amount hereof along with
any accrued but unpaid  interest shall become and be immediately due and payable
without presentment,  demand, protest or notice of any kind and the Holder shall
have all rights and remedies  provided under this Note,  the Security  Agreement
and the Stock Pledge Agreement.

        Holder  acknowledges  that  notwithstanding  that amounts owed under the
Initial  Note were not paid by April 16,  2003,  Holder  will not be entitled to
receive any  additional  warrants  pursuant  to Section 4 of the  Initial  Note.
Holder will also not be entitled to receive any warrants upon the  occurrence of
an Event of Default under this Note.

        6.  Transferability.  This  Note  has  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 a registration
statement  with respect  thereto is effective  under the Act and any  applicable
state  securities  law,  or the  Company  receives  an opinion of counsel to the
Holder,  which  counsel is  satisfactory  to the  Company,  that the Note may be
pledged,  sold,  assigned  or  transferred  without  an  effective  registration
statement under the Act or applicable state securities law.

        7. Registration.

               a. The Holder, by his acceptance of this Note,  acknowledges that
        he is aware that this Note has not been registered  under the Securities
        Act of 1933, as amended ("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 Note for investment and not with a view to, or for sale in
        connection  with, any distribution of this Note or with any intention of
        distributing or selling this Note.

        8.  Severability.  In case any  provision of this Note 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
affected or impaired thereby.

        9. Choice of Law; Venue and Jurisdiction;  Legal Proceedings.  This Note
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 Note  shall be Palm  Beach  County,  Florida.  In any suit,  action or
proceeding  arising out of or in connection with this Note, the prevailing party
shall  be  entitled  to  an  award  of  the  reasonable   attorneys'   fees  and
disbursements incurred by such party in connection therewith.

        10.  Business  Day. If any interest  payment  date or the Maturity  date
under this Note shall not be a business day in the State of California,  payment
may be made on the next  succeeding  day that is a business  day in the State of
California,  and shall be deemed hereunder as made on such interest payment date
or maturity date, notwithstanding any other provisions contained in this Note.

        11. 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 business
office  in the  State  of  California,  and (ii) if to the  Holder,  at the last
address for the Holder listed on the records of the Company.

        12.  Modification.  This Note 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
Note 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.

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

        14.  Compliance  With Law.  It is the  responsibility  of the  Holder to
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.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


        IN WITNESS WHEREOF, the Company has caused this Note to be signed by its
authorized  officer and its corporate seal to be affixed hereto, as of this 25th
day of March 2003.


                             nSTOR TECHNOLOGIES, INC.,
                             a Delaware corporation

                             By: /s/ Thomas L. Gruber
                             ------------------------
                             Name: Thomas L. Gruber
                             Its: VP Finance


                              NOTICE OF CONVERSION

To:     nSTOR TECHNOLOGIES, INC.


The  undersigned,  Holder of the attached Note issued to Bernard Marden,  hereby
exercises  the option to convert the  principal  amount of this Note, or portion
thereof,  and/or any accrued and unpaid interest thereon, below designated,  for
shares of the Common Stock of nStor  Technologies,  Inc. in accordance  with the
terms of the attached Note. The shares deliverable upon this conversion (and any
Note representing any nonconverted amount hereof), shall be issued and delivered
to ________________.


Dated: __________, 200_
                                           HOLDER


                                           -----------------------------



                                           Principal amount to be converted
                                           $___________________

                                           Accrued but unpaid interest to
                                           be converted $____________

                                           Conversion Price (if and as adjusted)
                                           $_______  per share

                                           Number of shares of Common Stock to
                                           be issued
                                           ______________________


                                          ASSIGNMENT

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


FOR  VALUE  RECEIVED  ____________________________  ("Assignor")  hereby  sells,
assigns and transfers this Note unto

______________________________("Assignee")
 (Name)


(Address)



, 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:
                                                      -------------------------