Exhibit 10.32

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this "Agreement") is dated as of March 11, 2003, among Dot Hill Systems
Corp., a Delaware corporation (the "Company"), and the purchasers identified on the signature pages hereto (each, including its successors and assigns,
a "Purchaser" and collectively the "Purchasers").

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"), and Rule 506 promulgated thereunder, the Company desires to issue and sell to the Purchasers, and the Purchasers, severally
and not jointly, desire to purchase from the Company, securities of the Company as more fully described in this Agreement.

NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby
acknowledged, the Company and the Purchasers agree as follows:

ARTICLE I  DEFINITIONS

1.1Definitions.In addition to the terms defined elsewhere in this Agreement, the following terms have the
meanings indicated in this Section 1.1:



---



2

---



ARTICLE II  PURCHASE AND SALE

2.1Purchase of Shares.



2.2Conditions to Closing.The Closing is subject to the satisfaction or waiver by the party to be benefited
thereby of the following conditions:



3

---



ARTICLE III  REPRESENTATIONS AND WARRANTIES

3.1Representations and Warranties of the Company.Except as set forth under the corresponding section of the
disclosure schedules delivered to the Purchasers concurrently herewith (the "Disclosure Schedules") or as disclosed in the SEC Reports, the Company
hereby makes the following representations and warranties to the Purchasers:



4

---



5

---



6

---



7

---



8

---



3.2Representations and Warranties of the PurchasersEach Purchaser hereby, for itself and for no other
Purchaser, represents and warrants to the Company as follows:



9

---







10

---



ARTICLE IV  OTHER AGREEMENTS OF THE PARTIES

4.1Transfer Restrictions.



11

---



4.2Furnishing of Information.As long as any Purchaser owns Shares, the Company covenants to timely file (or
obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. As long as any
Purchaser owns Shares, if the Company is not required to file reports pursuant to such laws, it will prepare and furnish to the Purchasers and make publicly available in accordance with
Rule 144(c) such information as is required for the Purchasers to sell the Shares under Rule 144.

4.3Integration.The Company shall not, and shall use commercially reasonable efforts to ensure that no
Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of the Shares in a manner that would require the registration under the Securities Act of
the sale of the Shares to the Purchasers, or that would be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any Principal Market.

4.4Reservation and Listing of Shares.



4.5Securities Laws Disclosure; Publicity.The Company shall, within one Trading Day after the Closing Date,
issue a press release or file a Current Report on Form 8-K reasonably acceptable to the Purchasers disclosing all material terms of the transactions contemplated hereby. The
Company and the Purchasers shall consult with each other in issuing any press releases with respect to the transactions contemplated hereby. Notwithstanding the foregoing, other than in any
registration statement filed pursuant to the Registration Rights Agreement and filings related thereto, the Company shall not publicly disclose the name of any Purchaser or the terms hereof, or
include the name of any Purchaser or the terms hereof in any filing with the Commission or any regulatory agency or Principal Market, without the prior written consent of such Purchaser, except to the
extent such disclosure is required by law or Principal Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure.

4.6Non-Public Information.Except with respect to the pendency of this transaction, the Company
covenants and agrees that neither it nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and
confirms that each Purchaser shall be relying on the foregoing representations in effecting transactions in securities of the Company.

4.7Shareholders Rights Plan.In the event that a shareholders rights plan is adopted by the Company, no claim
will be made or enforced by the Company or any other Person that any Purchaser is an "Acquiring Person" under the plan or in any way could be deemed to trigger the provisions of such plan by virtue of
receiving Shares under the Transaction Documents.

12

---

ARTICLE V  MISCELLANEOUS

5.1Termination.This Agreement may be terminated by the Company or any Purchaser, by written notice to the
other parties, if the Closing has not been consummated by the tenth Trading Day following the date of this Agreement; provided that no such termination will affect the right of any party to sue for
any breach by the other party (or parties).

5.2Fees and Expenses.The Company agrees to pay $5,000, in the aggregate, to the Purchasers as reimbursement
for the Purchasers' legal and other fees and expenses incurred in connection with the investigation and negotiation of the transaction and the preparation and negotiation of the Transaction Documents.
Accordingly, in lieu of the foregoing payments, on the Closing Date, the aggregate amount that the Purchasers are to pay for the Securities at the Closing will be reduced by $5,000. Each party shall
pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery
and performance of this Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the issuance of any Shares.

5.3Entire Agreement.The Transaction Documents, together with the exhibits and schedules thereto, contain the
entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

5.4Notices.Any and all notices or other communications or deliveries required or permitted to be provided
hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified on the signature pages hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day,
or (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service. The addresses for such notices and communications are those set forth on
the signature pages hereof, or such other address as may be designated in writing hereafter, in the same manner, by such Person.

5.5Amendments; Waivers.No provision of this Agreement may be waived or amended except in a written instrument
signed, in the case of an amendment, by the Company and the Purchasers holding, or obligated hereunder to purchase, at least a majority of the Shares or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any
manner impair the exercise of any such right.

5.6Construction.The headings herein are for convenience only, do not constitute a part of this Agreement and
shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

5.7Successors and Assigns.This Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchasers. Any Purchaser may assign
its rights under this Agreement and the Registration Rights Agreement to any Person to whom such Purchaser assigns or transfers any Shares.

13

---

5.8No Third-Party Beneficiaries.This Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

5.9Governing Law; Venue; Waiver of Jury Trial.All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law
thereof. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted
by law. The parties hereby waive all rights to a trial by jury. If either party shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such
action or proceeding shall be
reimbursed by the other party for its attorneys' fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

5.10Survival.The representations, warranties, agreements and covenants contained herein shall survive the
Closing and the delivery, exercise and/or conversion of the Shares, as applicable.

5.11Execution.This Agreement may be executed in two or more counterparts, all of which when taken together
shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need
not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

5.12Severability.If any provision of this Agreement is held to be invalid or unenforceable in any respect, the
validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

5.13Replacement of Shares.If any certificate or instrument evidencing any Shares is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but
only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Shares.

5.14Independent Nature of Purchasers' Obligations and Rights.The obligations of each Purchaser under any
Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the

14

---

Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to
such obligations or the transactions contemplated by the Transaction Document. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights
arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.

15

---

IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

|                |  | DOT HILL SYSTEMS CORP.                                           
|--------------- |  | -----------------------------------------------------------------
|                |  | By:                                                              
|                |  | Name:                                                            
|                |  | Title:                                                           
|                |  | Address for Notice:6305 El Camino Real
Carlsbad, California 92009
|                |  | Attn:                                                            
|                |  | Tel:                                                             
|                |  | Fax:                                                             
|With a copy to: |  | Cooley Godward LLP
4401 Eastgate Mall
San Diego, California 92121
|                |  | Attn:                                                            
|                |  | Tel:                                                             
|                |  | Fax:                                                             

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOR PURCHASERS TO FOLLOW]

16

---



[PURCHASERS' SIGNATURE PAGE]

IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

|TRUSCO CAPITAL MANAGEMENT, INC.*                                                                                                                     |                                                         | Address for Notice:Trusco Capital Management
50 Hurt Plaza                                                                                                                             
|---------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|By:                                                                                                                                                  | /s/PATRICK PAPARELLIPatrick Paparelli,Managing Director |                                                                                                                                                                                        
|                                                                                                                                                     |                                                         |                                                                                                                                                                                        
|Number of Shares: 200,000
Aggregate Purchase Price of Shares: $750,000 Security Titling Instructions: TRUSTMANTaxpayer ID Number, if any: 58-6078728 |                                                         | Depository Trust Company
55 Water Street
New York Window
Ground Floor
South Street Entrance
F/b/o: SunTrust, #2971
F/f/c: STI Classic Small Cap
Growth Fund and account
#11099001125328

---

[PURCHASERS' SIGNATURE PAGES FOLLOW]

17

---

[PURCHASER'S
SIGNATURE PAGE]

|OMICRON MASTER TRUSTBy: Omicron Capital L.P., as subadvisor
By: Omicron Capital Inc., its general partner       |                                             | Address for Notice:c/o Omicron Capital L.P.
153 E. 53rd Street
48th Floor
New York, New York 10022
|--------------------------------------------------------------------------------------------------------------- | ------------------------------------------- | --------------------------------------------------------------------------------------------------
|By:                                                                                                             | /s/BRUCE BERNSTEINBruce Bernstein,President |                                                                                                   
|Number of Shares: 500,000
Aggregate Purchase Price of Shares: $1,875,000
Taxpayer ID Number, if any: 98-6053436 |                                             |                                                                                                   

[PURCHASERS' SIGNATURE PAGES FOLLOW]

18

---

[PURCHASER'S
SIGNATURE PAGE]

|MIDSUMMER INVESTMENT, LTD.                                                                                      |                                                 | Address for Notice:C/o Midsummer Capital, LLC
485 Madison Avenue, 23rd Floor
New York, New York 10022
|--------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | -----------------------------------------------------------------------------------------------------
|By:                                                                                                             | /s/MICHAEL A. AMSALEMMichel A. Amsalem,Director |                                                                                                      
|Number of Shares: 274,000
Aggregate Purchase Price of Shares: $1,027,500
Taxpayer ID Number, if any: 58-0370103 |                                                 |                                                                                                      

[PURCHASERS' SIGNATURE PAGES FOLLOW]

19

---

[PURCHASER'S
SIGNATURE PAGE]

|ISLANDIA, L.P.                                                                                    |                                                                  | Address for Notice:                                                        
|------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | ---------------------------------------------------------------------------
|By: John Lang, Inc., its general partner                                                          |                                                                  | C/o John Lang, Inc.
485 Madison Avenue, 23rd Floor
New York, New York 10022
|By:                                                                                               | /s/RICHARD BERNERRichard Berner,President of the general
partner |                                                                            
|Number of Shares: 63,000
Aggregate Purchase Price of Shares: $236,250
Taxpayer ID Number, if any: |                                                                  |                                                                            

[PURCHASERS' SIGNATURE PAGES FOLLOW]

20

---

[PURCHASER'S
SIGNATURE PAGE]

|WESTPARK CAPITAL, L.P.                                                                                        |                                                                              | Address for Notice:4965 Preston Park Blvd.
Suite 220
Plano, Texas 75093
|------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | -----------------------------------------------------------------------
|By:                                                                                                           | /s/PATRICK J. BROSNAHANName:  Patrick J. Brosnahan
Title:    General Partner |                                                                        
|Number of Shares: 100,000
Aggregate Purchase Price of Shares: $375,000
Taxpayer ID Number, if any: 75-2945750 |                                                                              |                                                                        

[PURCHASERS' SIGNATURE PAGES FOLLOW]

21

---

[PURCHASER'S
SIGNATURE PAGE]

|THE PINNACLE FUND, L.P.                                                                                           |                                                        | Address for Notice:The Pinnacle Fund, L.P.
Suite 240
4965 Preston Park Blvd.
|----------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------ | ----------------------------------------------------------------------------
|By:                                                                                                               | /s/BARRY M. KITTName:  Barry M. Kitt
Title:    Partner |                                                                             
|Number of Shares: 1,000,000
Aggregate Purchase Price of Shares: $3,750,000
Taxpayer ID Number, if any: 75-2512784 |                                                        |                                                                             

[PURCHASERS' SIGNATURE PAGES FOLLOW]

22

---

[PURCHASER'S
SIGNATURE PAGE]

|CRANSHIRE CAPITAL, L.P.                                                                                       |                                                                                                                             | Address for Notice:666 Dundee Road
Suite 1901
Northbrook, IL 60062
|------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------
|By:                                                                                                           | /s/MITCHELL P. KOPINName:  Mitchell P. Kopin
Title:    President of Downsview Capital, Inc.
            Its general partner |                                                                   
|Number of Shares: 250,000
Aggregate Purchase Price of Shares: $937,500
Taxpayer ID Number, if any: 36-4055954 |                                                                                                                             |                                                                   

[PURCHASERS' SIGNATURE PAGES FOLLOW]

23

---

[PURCHASER'S
SIGNATURE PAGE]

|SOUTHWELL PARTNERS LP                                                                                           |                                                                  | Address for Notice:1901 N. Akard Street
Dallas, Texas 75201
|--------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | -----------------------------------------------------------
|By:                                                                                                             | /s/WILSON JAEGGLIName:  Wilson Jaeggki
Title:    General Partner |                                                            
|Number of Shares: 500,000
Aggregate Purchase Price of Shares: $1,875,000
Taxpayer ID Number, if any: 75-2345339 |                                                                  |                                                            

[PURCHASERS' SIGNATURE PAGES FOLLOW]

24

---

[PURCHASER'S
SIGNATURE PAGE]

|ATLAS CAPITAL MASTER FUND, L.P.By: Atlas Capital L.P. & Atlas Capital Offshore Fund Ltd.,
Its General Partners  |                                                                | Address for Notice:100 Crescent Court #880
Dallas, Texas 75201
Attn: Caryn
Tel: (214) 999-6082
|--------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- | ----------------------------------------------------------------------------------------------
|By:                                                                                                             | /s/ROBERT H. ALPERTName:  Robert H. Alpert
Title:    President |                                                                                               
|Number of Shares: 755,100
Aggregate Purchase Price of Shares: $2,831,625
Taxpayer ID Number, if any: 93-0344937 |                                                                |                                                                                               

[PURCHASERS' SIGNATURE PAGES FOLLOW]

25

---

[PURCHASER'S
SIGNATURE PAGE]

|ATLAS CAPITAL(Q.P.) L.P.By: Atlas Capital Management L.P., its GP
By: RHA, Inc., its GP                       |                                                                | Address for Notice:100 Crescent Court #880
Dallas, Texas 75201
Attn: Caryn
Tel: (214) 999-6082
|------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- | ----------------------------------------------------------------------------------------------
|By:                                                                                                           | /s/ROBERT H. ALPERTName:  Robert H. Alpert
Title:    President |                                                                                               
|Number of Shares: 244,900
Aggregate Purchase Price of Shares: $918,375
Taxpayer ID Number, if any: 33-1025414 |                                                                |                                                                                               

[PURCHASERS' SIGNATURE PAGES FOLLOW]

26

---

[PURCHASER'S
SIGNATURE PAGE]

|WALKER SMITH CAPITAL MASTER FUND                                                                                |                                                  | Address for Notice:C/o WS Capital Management, L.P.
300 Crescent Court, Suite 880
|--------------------------------------------------------------------------------------------------------------- | ------------------------------------------------ | --------------------------------------------------------------------------------
|By:                                                                                                             | /s/REID WALERName:  Reid Walker
Title:    Member |                                                                                 
|Number of Shares: 332,000
Aggregate Purchase Price of Shares: $1,245,000
Taxpayer ID Number, if any: 75-2956878 |                                                  |                                                                                 

[PURCHASERS' SIGNATURE PAGES FOLLOW]

27

---

[PURCHASER'S
SIGNATURE PAGE]

|WS OPPORTUNITY MASTER FUND                                                                                    |                                                         | Address for Notice:C/o WS Capital Management, L.P.
300 Crescent Court, Suite 880
|------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | --------------------------------------------------------------------------------
|By:                                                                                                           | /s/PATRICK WALKERName:  Patrick Walker
Title:    Member |                                                                                 
|Number of Shares: 129,700
Aggregate Purchase Price of Shares: $486,375
Taxpayer ID Number, if any: 75-2956880 |                                                         |                                                                                 

[PURCHASERS' SIGNATURE PAGES FOLLOW]

28

---

[PURCHASER'S
SIGNATURE PAGE]

|WALKER SMITH INTERNATIONAL FUND, LTD.                                                                             |                                                   | Address for Notice:C/o WS Capital Management, L.P.
300 Crescent Court, Suite 880
|----------------------------------------------------------------------------------------------------------------- | ------------------------------------------------- | --------------------------------------------------------------------------------
|By:                                                                                                               | /s/REID WALKERName:  Reid Walker
Title:    Member |                                                                                 
|Number of Shares: 339,600
Aggregate Purchase Price of Shares: $1,273,500
Taxpayer ID Number, if any: N/Aoffshore |                                                   |                                                                                 

[PURCHASERS' SIGNATURE PAGES FOLLOW]

29

---

[PURCHASER'S
SIGNATURE PAGE]

|WS OPPORTUNITY FUND INTERNATIONAL, L.P.                                                                        |                                                         | Address for Notice:C/o WS Capital Management, L.P.
300 Crescent Court, Suite 880
|-------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | --------------------------------------------------------------------------------
|By:                                                                                                            | /s/PATRICK WALKERName:  Patrick Walker
Title:    Member |                                                                                 
|Number of Shares: 61,700
Aggregate Purchase Price of Shares: $231,375
Taxpayer ID Number, if any: N/Aoffshore |                                                         |                                                                                 

30

---

QuickLinks