Exhibit 10.1

SEVERANCE AND RELEASE AGREEMENT

     This Severance and Release Agreement (the “Agreement”) by and between MTI
Technology Corporation (“MTI” or “the Company”) and Todd Schaeffer (“Schaeffer”)
documents the terms and conditions of Schaeffer’s termination from the Company,
and is effective                    , (the “Effective Date”).

RECITALS

     On or about February 21, 1995, Schaeffer commenced employment with MTI.
Schaeffer was promoted to Corporate Controller on or about September 18, 2001
and is currently the Company’s Chief Financial Officer.

     On or about July 23, 2004, MTI and Schaeffer mutually agreed to terminate
Schaeffer’s employment effective on a date to be determined by the parties (the
“Employment Termination Date”). MTI does not have a uniform policy or practice
of granting particular severance benefits to its employees or executives.
However, MTI offered to pay to Schaeffer only those severance benefits described
in the paragraphs that follow in exchange for Schaeffer’s release of all claims
against the Company and performance of his other obligations hereunder.
Schaeffer accepted this offer.

     NOW, THEREFORE, in consideration of the recitals listed above, and the
mutual promises contained in this Agreement, Schaeffer and the Company agree,
covenant, and represent as follows:

AGREEMENT

1. The Parties’ Responsibilities

          a. MTI will continue Schaeffer’s salary and auto allowance for one
year following the Employment Termination Date (the “Salary Continuation
Period”) at his base salary in effect on the Effective Date (i.e., $210,000
annually) and at his base auto allowance rate in effect on the Effective Date
(i.e., $750 monthly), to be paid on regularly recurring payroll dates for such
one year period, and to be less normal payroll deductions.

          b. MTI and Schaeffer agree that from the Effective Date until the
Employment Termination Date, Schaeffer will remain employed by MTI at the base
salary in effect on the Effective Date (i.e., $210,000 annually), that his
benefits will continue in effect and that options already granted to him will
continue to vest.

          c. Schaeffer acknowledges that, as of Employment Termination Date, he
may be eligible to obtain continuing coverage under MTI’s group medical, vision
and dental plans pursuant to the provisions of the Consolidated Omnibus
Reconciliation Act and its implementing regulations (“COBRA”). MTI agrees that
for a one year period beginning the day following the Employment Termination
Date, MTI will pay the premium for any COBRA continuation coverage that
Schaeffer elects to obtain. In no event shall MTI be liable for, or be required
to pay premiums for any COBRA continuation coverage Schaeffer may elect or be
eligible to obtain thereafter. MTI further acknowledges and agrees that during
the one year period MTI pays Schaeffer’s COBRA premium, MTI will also reimburse
Schaeffer for medical, vision and dental expenses incurred by Schaeffer that are
not covered by his COBRA continuation coverage but that would be covered under
MTI’s existent Executive Medical Plan.

          d. Subject to the approval of MTI’s Board of Directors’ Compensation
Committee, MTI agrees that the Options granted to Schaeffer pursuant to the MTI
Technology Corporation 1996 and 2001 Stock Incentive Plans, as amended (the
“Stock Incentive Plans”), shall continue and remain in full force and effect,
and be exercisable in the same manner as if Schaeffer were to continue his
employment with the corporation.

          e. Schaeffer and MTI agree, covenant and represent that Schaeffer
shall not be eligible for, or entitled to, any benefits of employment other than
those specifically identified in this Agreement.

          f. Schaeffer agrees, covenants and represents that during the period
he continues to be employed following the Effective Date he will perform the
duties and responsibilities of his position diligently and to the best of his
abilities and will cooperate with MTI in the orderly transfer of his
responsibilities to his successor. Schaeffer further agrees that during the
Salary Continuation Period he will be available to consult with MTI as needed by
MTI and as is consistent with Schaeffer’s need to fulfill his responsibilities
to any then current employer. Schaeffer further agrees, covenants and represents
that during the Salary Continuation

 

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Period and thereafter he shall cooperate in good faith with MTI in the defense
of any action that has been or will be brought against MTI that arises out of,
or relates in any way to his employment with MTI. MTI agrees, covenants and
represents that it shall indemnify and hold Schaeffer harmless to the extent
required by law for all that Schaeffer necessarily expends or loses in direct
consequence of the discharge of his duties under this paragraph.

          g. Effective as of Schaeffer’s date of termination, MTI and Schaeffer
agree that Schaeffer shall be retained by MTI as a consultant pursuant to the
terms and conditions of the Consulting Agreement attached as Exhibit “A” (the
“Consulting Agreement”).

     2. Release

          a. In consideration of the promises specified in this Agreement and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Schaeffer, for himself and his heirs, assigns, executors,
administrators, and agents, past and present (collectively, the “Schaeffer
Affiliates”), hereby fully and without limitation releases, covenants not to
sue, and forever discharges MTI and its respective subsidiaries, divisions,
affiliated corporations, affiliated partnerships, parents, trustees, directors,
officers, shareholders, partners, agents, employees, representatives,
consultants, attorneys, heirs, assigns, executors and administrators,
predecessors and successors, past and present (collectively, the “MTI
Releasees”), both individually and collectively, from any and all rights,
claims, demands, liabilities, actions and causes of action whether in law or in
equity, suits, damages, losses, workers’ compensation claims, attorneys’ fees,
costs, and expenses, of whatever nature whatsoever, known or unknown, fixed or
contingent, suspected or unsuspected (“Claims”), that Schaeffer or the Schaeffer
Affiliates now have, or may ever have, against any of the MTI Releasees that
arise out of, or are in any way related to: (i) Schaeffer’s employment by MTI or
any of the other MTI Releasees; (ii) the termination of Schaeffer’s employment
by MTI or any of the other MTI Releasees; and (iii) any transactions,
occurrences, acts or omissions by MTI or any of the other MTI Releasees
occurring prior to the Effective Date of this Agreement.

          b. Without limiting the generality of the foregoing, Schaeffer
specifically and expressly releases any Claims occurring prior to the Effective
Date of this Agreement arising out of or related to violations of any federal or
state employment discrimination law, including the California Fair Employment
and Housing Act; Title VII of the Civil Rights Act of 1964; the Americans with
Disabilities Act; the National Labor Relations Act; the Equal Pay Act; the
Employee Retirement Income Security Act of 1974; as well as Claims arising out
of or related to violations of the provisions of the California Labor Code;
state and federal wage and hour laws; breach of contract; fraud;
misrepresentation; common counts; unfair competition; unfair business practices;
negligence; defamation; infliction of emotional distress; invasion of privacy;
assault; battery; false imprisonment; wrongful termination; and any other state
or federal law, rule, or regulation.

          c. Schaeffer agrees, covenants, and represents that he has not
commenced, and that he shall never commence or pursue, a claim for workers’
compensation benefits of any kind relating to or resulting from his employment
with MTI or any of the MTI Releasees. Schaeffer further agrees, covenants, and
represents that, in the event that he has filed or does file a claim for
workers’ compensation benefits, MTI may, but is not required to, present this
Agreement to the Workers’ Compensation Appeals Board for approval as a
compromise and release.

     3. Warranties and Representations

          Schaeffer acknowledges that he is aware of and familiar with the
provisions of Section 1542 of the California Civil Code, which provides as
follows:

     “A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him, must have materially affected his settlement with the
debtor.”

          Schaeffer hereby waives and relinquishes all rights and benefits which
he may have under Section 1542 of the California Civil Code, or the law of any
other state or jurisdiction, or common law principle, to the same or similar
effect. Schaeffer represents and warrants that he has the authority to enter
into this Agreement and to bind all persons and entities claiming through him.

     4. Confidentiality and Non-Disparagement

 

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          a. Schaeffer agrees, covenants and represents that the facts relating
to the existence of this Agreement, the negotiations leading to the execution of
this Agreement, and the terms of this Agreement and the amounts of the Severance
Payment and the Supplemental Payment shall be held in confidence, and shall not
be disclosed, communicated or divulged to any person other than those who must
perform tasks to effectuate this Agreement, without first obtaining the MTI’s
written consent to each disclosure.

          b. Schaeffer further agrees, covenants and represents that he shall
not take any action or make any comments that actually or potentially disparage,
disrupt, damage, impair, or otherwise interfere with MTI’s business interests or
reputation.

     5. Trade Secrets

          Schaeffer acknowledges that he executed a Proprietary Information
Agreement and that he shall continue to be bound by this Proprietary Information
Agreement following the termination of his employment with MTI. A copy of the
Proprietary Information Agreement is attached to this Agreement as Exhibit “B.”

     6. Non-Admission of Liability

          Schaeffer agrees, covenants and represents that this Agreement shall
not be treated as an admission of liability by MTI, at any time, for any
purpose, and that this Agreement shall not be admissible in any proceeding
between the parties except a proceeding relating to a breach of its provisions
after execution, or a proceeding to obtain approval of the Agreement as a
compromise and release as provided in Paragraph 2(c) of this Agreement

     7. Arbitration of Disputes

          All disputes between Schaeffer (and his attorneys, successors, and
assigns) and MTI (and its affiliates, shareholders, directors, officers,
employees, agents, successors, attorneys, and assigns) relating in any manner
whatsoever to Schaeffer’s employment with, or the termination of his employment
from, MTI (“Arbitrable Claims”) including, without limitation, all disputes
relating to the validity, interpretation, or enforcement of this Agreement,
shall be resolved exclusively by arbitration in Orange County, California, by
the Judicial Arbitration & Mediation Services, Inc. (the “JAMS”). Such
arbitration shall be conducted in accordance with the then-existing arbitration
rules of JAMS, with the cost of such arbitration to be borne equally by the
parties. The parties to this Agreement, and all who claim thereunder, shall be
(i) conclusively bound by the arbitrator’s decision or award, which shall not be
subject to appeal; and (ii) have the right to have any decision or award
rendered in accordance with this provision entered as a judgment in a court in
the State of California or any other court having jurisdiction. The arbitrator
shall have the authority to award or grant legal, equitable, and declaratory
relief. The parties hereby waive any rights they may have to trial by jury. The
Federal Arbitration Act will govern the interpretation and enforcement of this
Section pertaining to arbitration, unless it is found inapplicable in which case
California law shall control.

     8. Successors and Assigns

          This Agreement shall be binding upon and shall inure to the benefit of
the respective heirs, assigns, executors, administrators, successors,
subsidiaries, divisions and affiliated corporations and partnerships, past and
present, and trustees, directors, officers, shareholders, partners, agents and
employees, past and present, of Schaeffer and MTI.

     9. Ambiguities

          This Agreement has been reviewed by the parties. The parties have had
a full opportunity to negotiate the terms and conditions of this Agreement.
Accordingly, the parties expressly waive any common-law or statutory rule of
construction that ambiguities should be construed against the drafter of this
Agreement, and agree, covenant, and represent that the language in all parts of
this Agreement shall be in all cases construed as a whole, according to its fair
meaning.

     10. Choice of Law

          This Agreement has been negotiated and executed in the State of
California and is to be performed in Orange County, California. This Agreement
shall be governed by and interpreted in accordance with the laws of the State of
California, including all matters of construction, validity, performance, and
enforcement, without regard to California’s conflict of laws rules.

 

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     11. Integration

          This Agreement, Schaeffer’s Option Agreements with the Company, MTI’s
Stock Incentive Plans; and the Proprietary Information Agreement attached as
Exhibit “A,” constitute a single, integrated written contract expressing the
entire agreement of the parties. There is no other agreement, written or oral,
express or implied, between the parties with respect to the subject matter
hereof. These agreements may not be orally modified. This Agreement may only be
modified in a written instrument signed by all parties.

     12. Severability

          The parties to this Agreement agree, covenant and represent that each
and every provision of this Agreement shall be deemed to be contractual, and
that they shall not be treated as mere recitals at any time or for any purpose.
Therefore, the parties further agree, covenant and represent that each and every
provision of this Agreement shall be considered severable, except for the
Release provisions of Sections 2 and 3 of this Agreement. If a court of
competent jurisdiction finds the release provisions of Sections 2 or 3 of this
Agreement to be unenforceable or invalid, then this Agreement shall become null
and void, and the Severance Payment paid pursuant to paragraph 1 shall be
returned to MTI within a reasonable period of time. If a court of competent
jurisdiction finds any provision other than the release provisions of Sections 2
or 3, or part thereof, to be invalid or unenforceable for any reason, that
provision, or part thereof, shall remain in force and effect to the extent
allowed by law, and all of the remaining provisions of this Agreement shall
remain in full force and effect and enforceable.

     13. Execution of Counterparts

          This Agreement may be executed in counterparts, and if so executed and
delivered, all of the counterparts together shall constitute one and the same
Agreement.

     14. Captions

          The captions and section numbers in this Agreement are inserted for
the readers’ convenience, and in no way define, limit, construe or describe the
scope or intent of the provisions of this Agreement.

     15. Miscellaneous Provisions

          a. The parties represent that they have read this Agreement and fully
understand all of its terms; that they have conferred with their attorneys, or
have knowingly and voluntarily chosen not to confer with their attorneys about
this Agreement; that he has executed this Agreement without coercion or duress
of any kind; and that he understands any rights that he has or may have and
signs this Agreement with full knowledge of any such rights.

          b. The parties acknowledge that no representations, statements or
promises made by the other party, or by their respective agents or attorneys,
have been relied on in entering into this Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement, which
consists of 6 pages, on the dates indicated below.

                      TODD SCHAEFFER       MTI TECHNOLOGY CORPORATION    
 
                    /s/ TODD SCHAEFFER       /s/ THOMAS P. RAIMONDI, JR.    

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Date:
  September 9, 2004       Date:   September 9, 2004    

 

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CONSULTING AGREEMENT

THIS AGREEMENT is made between MTI Technology Corporation (“MTI”), a Delaware
corporation, at 14661 Franklin Avenue, Tustin, California and Todd Schaeffer an
independent consultant (“Consultant”).

WHEREAS, Consultant has general experience in the area of financial management,
and direct experience in the tactical and strategic financial management of MTI.

WHEREAS, MTI in reliance on Consultant’s representations, is willing to engage
Consultant as an independent contractor, and not as an employee.

The parties agree to the following terms and conditions:

1.0 SCOPE OF SERVICES

  1.1   Consultant will provide consulting services, as directed and requested
by MTI in its sole discretion, in the area of general financial management, as
described in Exhibit A.     1.2   All work will be performed at MTI’s facilities
and/or at specified customer sites and will be performed in a workmanlike and
professional manner by Consultant. Consultant will at all times observe security
and safety policies of MTI, including, but not limited to, the use of Security
I.D. Badges.     1.3   The parties acknowledge and agree that MTI has no right
to control the manner, means, or method by which Consultant performs the
services called for by this Agreement. MTI will be entitled only to: (1) direct
Consultant with respect to the elements of the services to be performed by
Consultant and the results to be derived by MTI, (2) inform Consultant as to
where and when such services will be performed, and (3) review and assess the
performance of the services by Consultant for the limited purposes of assuring
that the services have been performed and confirming that results are
satisfactory.

2.0 TERM OF AGREEMENT

  2.1   The term of this Agreement is shown in Exhibit B.     2.2   Additional
assignments may be incorporated into this Agreement by an executed Addendum to
Exhibit A.     2.3   The cure period for any failure of MTI to pay fees and
charges due will be forty-five (45) days from the date MTI receives notice.    
2.4   If this Agreement is terminated for any reason, Consultant will promptly
return to MTI all copies of any MTI data, records, or materials, including all
materials incorporating the propriety information of MTI. Consultant will also
furnish to MTI all work in progress, including all incomplete work.     2.5  
Within fifteen (15) days of termination of this Agreement for any reason,
Consultant will submit to MTI an itemized invoice for any outstanding fees or
expenses under this Agreement. MTI, upon payment of the amounts invoiced, will
have no further liability or obligation to Consultant.

3.0 FEES

  3.1   In Consideration of the services to be performed by Consultant, MTI will
pay Consultant the fees shown in Exhibit B.

4.0 RIGHTS IN DATA

  4.1   Any MTI Work Product will be considered a “work for hire” and will
remain the exclusive property of MTI.     4.2   “MTI Work Product” means the
ideas, processes methods, programming aids, reports, programs, manuals, tapes,
software, flowcharts, systems or improvements, enhancements, or modifications,
that the Consultant utilizes, produces, develops, prepares, conceives, makes, or
suggests in the performance of the services under this Agreement, including all
related developments originated or conceived during the term of the Agreement
but completed or reduced to practice after termination.

 

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  4.3   All right, title, and interest in and to any programs, systems, data,
and materials furnished to MTI and/or developed, at private expense, by
Consultant outside the scope of this Agreement are and will remain the exclusive
property of Consultant. These “Consultant Products,” if any, are listed in
Exhibit “D.”

5.0 PROPRIETARY INFORMATION

  5.1   Consultant acknowledges that in order to perform the services called for
in this Agreement, it will be necessary for MTI to disclose to Consultant
certain Trade Secrets that have been developed by MTI at great expense and that
have required considerable effort of skilled professionals. Consultant further
acknowledges that the Deliverables will, of necessity, incorporate such Trade
Secrets. Consultant agrees that it will not disclose, transfer, use, copy, or
allow access to any Trade Secrets to any employees or to any third parties,
unless they have a need to know and are consistent with the requirements of this
Agreement and have signed a Confidentiality/Non-Disclosure Agreement shown in
Exhibit C.     5.2   In no event will Consultant disclose any Trade Secrets to
any competitors of MTI.     5.3   The term “Trade Secrets” means any scientific
or technical data, information, design, process, procedure, formula, or
improvement that is commercially valuable to MTI and not generally known in the
industry.     5.4   The obligations contained in this Section will survive the
termination of this Agreement and continue for as long as the material remains
Trade Secrets.     5.5   The obligations contained in this Section shall not in
any way diminish or limit Consultant’s obligations and duties under his
Proprietary Agreement with MTI.

6.0 CONFIDENTIALITY OF AGREEMENT; PUBLICITY; USE OF MARKS

  6.1   Consultant will not disclose the nature of the effort undertaken for MTI
or the terms of this Agreement to any other person or entity, except as many be
necessary to fulfill Consultant’s obligations.     6.2   Consultant will not at
any time use MTI’s name or any MTI trademark(s) or trade name(s) in any
advertising or publicity without the prior written consent of MTI.

7.0 WARRANTIES

  7.1   Consultant warrants that:

  a.   Consultant’s performance of the services and any programs, systems, data,
or materials furnished to MTI under this Agreement will not violate any
applicable law, rule, or regulation; any contracts with third parties; or any
third-part rights in any patent, trademark, copyright, trade secret; or similar
rights.     b.   Any and all rights, title, and ownership interest, including
copyright, that Consultant may have in or to a MTI Work Product or any tangible
media embodying a MTI Work Product, as described in Section 4.2, are assigned to
MTI as part of this Agreement.

8.0 LIMITATION OF LIABILITY

  8.1   Except as provided in Section 8, in no event will either party be liable
to the other for any special, incidental, consequential damages, or lost profits
of the other party.

9.0 ARBITRATION

  9.1   At the option of either party, any and all disputes regarding this
Agreement will be decided according to the rules and regulations of the American
Arbitration Association.     9.2   The arbitrators will be selected as follows:
If MTI and Consultant agree on one arbitrator, that arbitrator will conduct the
arbitration. If MTI and Consultant do not agree, MTI and Consultant will each
select one arbitrator and the

 

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      selected arbitrators will select the third arbitrator. All three
arbitrators will conduct the arbitration. MTI reserves the right to reject any
individual arbitrator employed by or affiliated with a competing organization.  
  9.3   Arbitration will take place at Orange County, California, or any other
location mutually agreeable to the parties. At the request of either party,
arbitration proceedings will be conducted in secrecy. All documents, testimony
and records will be received, heard and maintained by the arbitrator(s) in
secrecy under seal, available for the inspection only of MTI or Consultant, and
their respective attorneys and experts who agree in advance and in writing to
hold the information in secrecy until the information becomes greatly known.    
9.4   The arbitrator(s), acting by majority vote, will be able to decree any and
all relief of an equitable nature, including, but not limited to, relief of a
temporary restraining order, and/or a temporary or permanent injunction. The
arbitrator(s) will also be able to award damages, with or without an accounting
and cost. The decree or judgment of an award rendered by the arbitrator(s) will
be binding and may be entered in any court having jurisdiction thereof.

10.0 MISCELLANEOUS

  10.1   This Agreement will be governed by substantive laws of the State of
California.     10.2   The parties are independent contractors to one another.
Nothing in this Agreement creates any agency, partnership, or joint venture
between the parties. Except as expressly provided in this Agreement, MTI will
not be liable for any debts, accounts, obligations, or other liabilities of
Consultant, including (without limitation) Consultant’s obligations to withhold
Social Security and income taxes for itself or any of its employees.     10.3  
All remedies available to either party for one or more breaches by the other
party are cumulative and may be exercised separately or concurrently without
waiver of any other remedies. The failure of either party to act on a breach of
this Agreement by the other will not be deemed a waiver of the breach or a
waiver of future breaches, unless the waiver is in writing and signed by the
party against whom enforcement is sought.     10.4   All notices will be in
writing and will be delivered by hand or by registered or certified mail,
postage prepaid, as follows:

     
If to Consultant:
  If to MTI:
 
   
Todd Schaeffer
  MTI Technology Corporation
21 Chaumont
  14661 Franklin Avenue
Mission Viejo, CA 92692
  Tustin, CA 92780

10.5   This Agreement constitutes the entire Agreement between the parties
relating to Consultant’s providing of services to MTI as an independent
contractor. This Agreement may be modified only in writing.

                      CONSULTANT       MTI TECHNOLOGY CORPORATION    
 
                    /s/ TODD SCHAEFFER       /s/ THOMAS P. RAIMONDI, JR.    

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Date:
  September 9, 2004       Date:   September 9, 2004    

 

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Exhibit A

SCOPE OF WORK

Consultant will provide information and conduct research as requested by MTI to
assist in the understanding, development and delivery of the following:

Deliverables

At MTI’s sole discretion, MTI may request that Consultant provide advice as to
the development and implementation of both tactical and strategic financial
plans for MTI or its subsidiaries.

 

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Exhibit B

FEES

MTI agrees to pay Consultant $125 per hour per assignment, with the number of
billable hours per assignment to be mutually agreed upon by both MTI and
Consultant, in writing, prior to Consultant providing any service relating to
the respective assignment. MTI retains the unilateral and sole right to
(determine if any services are to be requested of the Consultant, and Consultant
agrees not to undertake any actions or provide any services under this Agreement
unless directed to do so by the appropriate representatives of MTI.

PAYMENT TERMS

Upon completion of an assignment as set forth in “Exhibit A” and submission of
an invoice, the agreed upon amount of the assignment’s billable hours multiplied
at the rate of $125 per hour will be paid on a net 30 days.

TERMS OF AGREEMENT

This Agreement is effective for a one-year period beginning on the date of Mr.
Schaeffer’s termination. MTI agrees that this Agreement will remain in effect
for the full term set forth above, and may only be terminated prior to the
expiration date by Consultant. If Consultant does elect to terminate the
Agreement prior to the expiration date, Consultant agrees to give MTI thirty
(30) days written notice, and to complete any unfinished assignments.

The number of assignments that Consultant will be asked to engage will be solely
determined by MTI. MTI may, at its sole discretion, elect not to engage the
Consultant for any assignment during the term of this Agreement. Unless the
Agreement is terminated by the Consultant pursuant to the terms and conditions
as set forth above, Consultant agrees that he will make himself available to MTI
during the term of the Agreement.

 

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Exhibit C

CONFIDENTIALITY/NON-DISCLOSURE AGREEMENT

In consideration of MTI Technology Corporation, a Delaware corporation (herein
“MTI”) granting me access to MTI facilities and information, I agree as follows:

  1.   As an employee of Consultant, it is my understanding that, pursuant to a
Consulting Agreement between Consultant and MTI, I will have access and acquire
techniques, know-how, or other information of a confidential nature concerning
MTI experimental and developmental work, trade secrets, secret procedures,
business matters or affairs including, but not limited to, information relating
to ideas, discoveries, inventions, disclosures, processes, methods, systems,
formulas, patents, patent applications, machines, materials, research plans, and
activities, research results, and business marketing information, plans,
operations, activities, and results. I WILL NOT DISCLOSE ANY SUCH INFORMATION TO
ANY PERSON OR ENTITY OR USE ANY SUCH INFORMATION WITHOUT MTI’S PRIOR WRITTEN
CONSENT. Information will, for purposes of this Agreement, be considered to be
confidential if not known in the field generally, even though such information
has been disclosed to one or more third parties pursuant to joint research
agreements, consulting agreements, or other agreements entered into by MTI or
any of its affiliates. Excluded from the obligations of confidentiality and
non-discloser agreed to herein is information (i) that I can establish I knew
prior to my acquiring it from MTI; (ii) that I receive from a third party who,
when providing it to me, is not under an obligation to MTI to keep the
information confidential; or (iii) that enters the public domain through no
fault of mine.     2.   If, as a consequence of my access to MTI facilities or
information, I conceive of or make, alone or with others, ideas, inventions and
improvements thereof or know-how related thereto that relate in any manner to
the actual or anticipated business of MTI, I will assign and do hereby assign to
MTI my right, title, and interest in each of the ideas, inventions and
improvements thereof described in this paragraph. I will, at MTI’s expense,
execute, acknowledge, and deliver such documents.     3.   I agree that, upon
the earlier of the completion of my work for MTI, as an employee of Consultant
or upon the termination of the Consulting Agreement between MTI and Consultant,
I will deliver to MTI (and will not keep in my possession or deliver to anyone
else) any and all devices, records, data, notebooks, notes, reports, proposals,
lists, correspondence, specifications, drawings, blueprints, sketches,
materials, equipment, other documents or property, or reproductions of any
aforementioned items belonging to MTI, its successors or assigns.     4.   I
agree to execute any proper oath or verify any proper document required to carry
out the terms of this Agreement. I represent that my performance of all the
terms of this Agreement will not breach any agreement to keep in confidence the
proprietary information acquired by me in confidence or in trust prior to my
commencing work for MTI. I have not entered into, and I agree I will not enter
into, any oral or written agreement in conflict herewith.     5.   This
Agreement will be governed by the laws of the State of California.     6.   If
one or more of the provisions in this Agreement is deemed void by law, then the
remaining provisions will continue in full force and effect     7.   This
Agreement will be binding upon my heirs, executors, administration and other
legal representatives and will be for the benefit of MTI, its successors, and
its assigns.     8.   This Agreement will remain in full force and effect so
long as any materials referred to in paragraph 1 remain trade secrets of MTI.  
  9.   This Agreement does not modify or limit my obligation or duties of
Consultant under the Propriety Information Agreement signed by Consultant.

                 
Date:
  September 9, 2004       /s/ TODD SCHAEFFER    

 

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Witness:
  /s/ THOMAS P. RAIMONDI, JR.            

 

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