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                                                                   EXHIBIT 10.14

                   LETTER AGREEMENT DATED MAY 22, 2000 BY AND
                    BETWEEN REGISTRANT AND ROBERT F. LIVOLSI



                                  May 22, 2000


Mr. Robert F. LiVolsi
Senior Vice President, Sales
Crossroads Systems, Inc.

         Re:  Severance offer

Dear Bob:

     In connection with the resignation of your employment as Senior Vice
President, Sales of Crossroads Systems, Inc. ("Crossroads" or the "Company")
effective June 2, 2000, the Company is offering you a severance package in
exchange for your agreement to release the Company from any and all claims. The
details of the severance package and release are explained below. We encourage
you to review this document carefully and to discuss it with an attorney.

         SEVERANCE.

         The Company agrees to provide you with the following severance package
in exchange for your agreement to release the Company from any and all claims as
set forth below.

   o     Your last day of employment shall be June 2, 2000. The Company will pay
         you an additional two weeks severance in lieu of notice.

   o     You were issued an option (the "Option") to purchase 187,500 shares of
         common stock (the "Option Shares") at an exercise price of $0.233
         granted pursuant to the Company's 1996 Stock Option/Stock Issuance Plan
         on May 13, 1998. You were also issued a second option (the "Option") to
         purchase 37,500 shares of common stock (the "Option Shares") at an
         exercise price of $1.00 granted pursuant to the Company's 1996 Stock
         Option/Stock Issuance Plan on May 25, 1999. You purchased certain of
         these shares in advance of vesting pursuant to a Promissory Note,
         identified below. To the extent outstanding but not otherwise vested,
         these Options Shares shall automatically accelerate as to a part of the
         Option so that the total number of vested Option Shares for which the
         Option shall be exercisable after taking such acceleration into account
         shall be equal to the number of Option Shares in which you would have
         vested under the normal vesting/exercise schedule in effect for the
         Option had you completed service through June 2, 2001 for a total
         number of vested shares of 159,375. You will be subject to compliance
         with all applicable requirements of law relating thereto (including,
         but not limited to, Rule 144 promulgated under the Securities Act of
         1933, as amended) and with all applicable regulations of any stock
         exchange (or the Nasdaq National Market, if applicable) on which the
         Common Stock may be listed for trading as of the date hereof.

   o     You will continue to be liable for the Promissory Notes of One Hundred
         Three Thousand Seven Hundred and Fifty Dollars ($103,750), plus
         interest, pursuant to the terms of Exhibit B. Actual repayment amounts
         are located on Exhibit D (factored in to this calculation, among other
         things, is the purchase in advance of vesting and interest). Repayment
         of the above Promissory Notes shall be within thirty (30) days
         following termination.

   o     If you elect to continue health and welfare coverage under federal
         COBRA, the Company will pay your COBRA premiums, in an amount
         sufficient to maintain the level health and welfare benefits as in
         effect on

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         your last day of employment, through May 31, 2001. Thereafter, you will
         be solely responsible for your health and welfare benefits, including
         all COBRA premiums.

YOUR AGREEMENT.

         By signing this Agreement and accepting the severance as outlined
above, you agree to waive, release, and forever discharge Crossroads and its
parents, successors, assigns, divisions, subsidiaries, affiliates, partners,
officers, directors, executives, investors, shareholders, managers, supervisors,
employees, agents, attorneys and representatives (the "Released Parties" or
"Releasees"), from any and all claims, demands, and causes of action which you
have or claim to have, whether known or unknown, of whatever nature, which
exists or may exist as of the date of your execution of this Agreement.
"Claims," "demands," and "causes of action" include, but are not limited to,
claims based on contract, fraud, equity, tort, discrimination, harassment,
retaliation, personal injury, constructive discharge, emotional distress, public
policy, wage, and hour law, defamation, claims for debts, accounts, attorneys'
fees, compensatory damages, punitive damages, and/or liquidated damages, claims
for vesting or accelerated vesting of options to purchase the Company's Common
Stock, and any and all claims arising under the Americans with Disabilities Act,
the Family and Medical Leave Act, or any other federal or state statute
governing employment, including but not limited to Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act, 29 U.S.C. Section 621 et
seq., as such statutes may have been or may be amended from time to time.

         You represent that you do not presently have on file, and agree that
you will not hereafter file, any claims, charges, grievances or complaints
against the Company and/or the Released Parties in or with any administrative,
state, federal or governmental entity, agency, board or court, or before any
other tribunal or panel or arbitrators, public or private, based upon any
actions or omissions by the Company and/or the Released Parties occurring prior
to the date of your execution of this Agreement.

         Finally, you represent and agree that you are the sole and lawful owner
of all rights, title and interest in and to all released matters, claims and
demands arising out of or in any way related to your employment with Crossroads
and/or the termination thereof.

         ACCEPTANCE OF AGREEMENT:

         You have twenty-one (21) days to consider this Agreement and you may
revoke this Agreement at any time during the first seven (7) days following your
execution of this Agreement by delivering written notice of revocation to the
Company's Vice President of Human Resources, Allen Sockwell, no later than five
(5:00) p.m. on the seventh (7th) day after execution. You received this
Agreement on May 22, 2000. The settlement offer contained in this Agreement will
automatically expire if this Agreement, fully executed by you, is not received
by the Company's Vice President of Human Resources, Allen Sockwell, on or before
June 12, 2000.

         This Agreement will become effective, irrevocable and fully enforceable
upon the expiration of seven (7) days following the date of your execution of
the Agreement (the "Effective Date"), provided that you have timely executed
this Agreement and you have not exercised your right to revoke this Agreement.

         OTHER IMPORTANT TERMS:

   o     Nothing in this Agreement shall constitute or be treated as an
         admission of any wrongdoing or liability on the part of the Company
         and/or the Released Parties.

   o     You are advised to consult with an attorney of your choosing prior to
         entering into this Agreement.

   o     This Agreement is binding on your representatives, heirs, executors,
         administrators, successors and assigns.

   o     You are personally responsible for the payment of all federal, state
         and local taxes that are due, or may be due, for any payments and other
         consideration received by you under this Agreement. You agree to
         indemnify the Company and hold the Company harmless, from any and all
         taxes, penalties and/or other


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         assessments that the Company is, or may become, obligated to pay on
         account of any payments and other consideration made to him under this
         Agreement.

   o     The terms and existence of this Agreement are strictly confidential and
         may not be disclosed to any other person or entity, with the exception
         of your immediate family members and legal and financial advisors.

   o     Certain obligations set forth in the Company's Proprietary Information
         and Inventions Agreement, signed by you on April 3, 1998, a copy of
         which is attached hereto as Exhibit C and incorporated herein by this
         reference, continue beyond the termination of your employment.

   o     Each party agrees not to disparage or in any way criticize either you
         or the Company and/or its officers, managers, supervisors, employees,
         investors, products, services, or technology at any time in the future.
         Nothing contained in this Section is intended to prevent you from
         testifying truthfully in any legal proceeding.

   o     This Agreement, and any agreements or documents referred to herein,
         constitute an integrated, written contract, expressing the entire
         agreement between the Company and you with respect to the subject
         matter hereof. In this regard, you represent and warrant that you are
         not relying on any promises or representations that do not appear in
         this Agreement. This Agreement can be amended or modified only by a
         written agreement, signed by LiVolsi and the Company.

   o     This Agreement shall, in all respects, be interpreted, enforced and
         governed under the laws of the State of Texas applicable to contracts
         executed and performed in Texas without giving effect to conflicts of
         law principles.

   o     You agree that if any provision or portion of any provision of this
         Agreement is held to be invalid or unenforceable or to be contrary to
         public policy or any law, for any reason, the remainder of the
         Agreement shall not be affected thereby.

   o     This Agreement may be executed in separate counterparts and by
         facsimile, and each such counterpart shall be deemed an original with
         the same effect as if the Company and LiVolsi signed the same document.

         We wish you the best in the future. Please do not hesitate to contact
me if you have any questions or comments regarding the severance offer contained
in this letter.

                                         CROSSROADS SYSTEMS, INC.
                                         By:
                                             ---------------------------
                                         Its:
                                              --------------------------

Robert F. LiVolsi
By:
    ---------------------------
Date:
      -------------------------


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                                    Exhibit D


Analysis of stock repurchase - Bob LiVolsi
Crossroads Systems

<TABLE>
<CAPTION>
                                                                  Grant
                                                            -------------------
                                                                   11/12/1997
                                                            -------------------
<S>                                                         <C>
Amount due on notes (as of 2/29/00):
  Principal                                                           $ 126,000
  Interest
                                                            -------------------
     Total amount due on notes                                        $ 126,000
                                                            -------------------

Cost to repurchase unvested shares:
  Total number of options exercised                                     247,500
  Number of shares vested                                              (159,375)
                                                            -------------------
  Shares subject to repurchase                                           88,125
  Exercise price                                            0.233-1.00
                                                            -------------------
     Total cost to repurchase unvested shares                         $  51,094
                                                            -------------------


Net amount due Crossroads                                             $  74,906
                                                            ===================
</TABLE>


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