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                                                                  EXHIBIT 10.39



                         SEVERANCE AND RELEASE AGREEMENT

        This Severance and Release Agreement (the "Agreement") is made and
entered into by and between RICHARD L. RUSKIN ("Ruskin") and MTI Technology
Corporation, a Delaware corporation ("MTI" or "the Company"), and shall become
effective on the Effective Date (as defined in Section 2a, below).

                                    Recitals

        On or about September 5, 1990, Ruskin commenced employment with MTI as
the Company's New York District Manager, and currently holds the position of
Executive Vice President.

        On or about July 31, 2001, MTI and Ruskin mutually agreed to terminate
Ruskin's employment, effective July 31, 2001. 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 Ruskin only those severance benefits
described in the paragraphs that follow in exchange for Ruskin's release of all
claims against the Company. Ruskin accepted this offer.

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

                                    Agreement

1.      Severance Payment.

        a. After the Effective Date of this Agreement, Ruskin shall receive a
severance payment from the Company in the total gross amount of $250,000.00 (the
"Severance Payment"), to be paid bi-weekly in twenty-six equal payments of
$9,615.39 ("Installment Payments") beginning on MTI's first payroll date
following the Effective Date of this Agreement. Ruskin acknowledges that MTI
shall withhold from the Severance Payment all applicable payroll taxes,
including federal and state income taxes, as well as other authorized
deductions.

        b. Ruskin shall also receive from the Company, after the Effective Date
of this Agreement the total gross amount of $14,400.00 ("Auto Allowance"), to be
paid in twelve equal payments of $1,200.00 ("Auto Allowance Installments")
beginning on MTI's first payroll date following the Effective Date of this
Agreement.

        c. Ruskin acknowledges that the Company at its sole cost, shall ship to
Ruskin, the furniture and all related items previously provided to Ruskin by the
Company for the Southern California apartment located at Newport Ridge
Apartment, 1 White Cap Lane, Newport Coast, California 92657, which the Company
maintained for Ruskin during his employment with MTI.


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2.      Termination Payment.

        a. Ruskin and the Company agree, covenant and represent that Ruskin
employment relationship with the Company shall terminate effective July 31,
2001, (the "Termination Date"). As of the Termination Date, MTI shall pay to
Ruskin (i) all accrued but unpaid salary as the Termination Date in the total
gross amount of $5,192.31 and (ii) all unused vacation pay accrued up to and
including July 31, 2001 in the total amount of $24,778.87 (collectively, the
"Termination Payment"). The total gross amount of the Termination Payment is
$29,971.18. MTI shall withhold from the Termination Payment all applicable
payroll taxes, including federal and state income taxes, as well as other
authorized deductions.

        c. Upon the execution of this Agreement by both parties, MTI shall also
pay to Ruskin (i) sales commissions ("Additional Termination Payment") due
through SEPTEMBER 30, 2001 AND/OR ALL FY 2002 Q2 SHIPMENTS. MTI shall withhold
from the Additional Termination Payment all applicable payroll taxes, including
federal and state income taxes, as well as other authorized deductions.

        d. Ruskin acknowledges that, as of August 1, 2001, he may be eligible to
obtain continuing coverage under MTI's group medical plan pursuant to the
provisions of the Consolidated Omnibus Reconciliation Act and its implementing
regulations ("COBRA"). From August 1, 2001 through August 31, 2002, MTI will pay
the premium payments for any COBRA continuation coverage that Ruskin elects to
obtain. In addition, from August 1, 2001 through August 31, 2002, MTI will
reimburse Ruskin for medical expenses (and life insurance) incurred by Ruskin
that are not covered by his COBRA continuation coverage but that would be
covered under MTI's Executive Medical Plan. In no event shall MTI be liable for,
or required to pay premiums for any COBRA continuation coverage Ruskin may elect
or be eligible to obtain after August 31, 2002.

        e. Ruskin shall not be eligible for, or entitled to, any benefits of
employment other than those specifically identified in this Agreement.

        f. Ruskin will cooperate with MTI in the orderly transfer of his
responsibilities to other MTI employees. Ruskin will also 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 will indemnify and hold Ruskin
harmless to the extent required by law for all that Ruskin necessarily expends
or loses in direct consequence of the discharge of his duties under this
paragraph 1(f).

        g. As of the Termination Date, MTI and Ruskin agree that Ruskin 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").

        h. Subject to the approval of MTI's Board of Directors's Compensation
Committee, MTI agrees that Ruskin's Option Agreements shall remain in full force
and


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effect during the term of the Consulting Agreement. Ruskin understands and
agrees that, his right to exercise these shares shall be in accordance with the
terms and conditions his Option Agreements with the Company and the MTI
Technology Corporation 1996 Stock Incentive Plan and MTI Technology Corporation
2001 Stock Incentive Plan, as amended (the "Stock Incentive Plan").

3.      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, Ruskin, for himself and his heirs, assigns, executors,
administrators, and agents, past and present (collectively with MTI, the "Ruskin
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 Ruskin or the Ruskin
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) Ruskin's employment by MTI or
any of the other MTI Releasees; (ii) the termination of Ruskin'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, Ruskin 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. Ruskin represents that he did not suffer any work-related injuries
while employed by the Company, that he has no intention of filing any claims for
workers' compensation benefits of any type against the Company, and that he will
not file or attempt to file any claims for workers' compensation benefits of any
type against the MTI Releasees. Ruskin acknowledges that the Company has relied
upon these representations, and that the Company would not have entered into
this Agreement but for these covenants and representations. As a result, Ruskin
agrees, covenants, and



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represents that the Company or any of the other Releasees may, but are not
obligated to, submit this Agreement to the Workers' Compensation Appeals Board
for approval as a compromise and release as to any such new or unasserted
workers' compensation claims or any of the other Releasees.

4.      Release By The Company

        The Company hereby fully and without limitation releases, covenants not
to sue, and forever discharges Ruskin from any and all Claims that the Company
now has, or may ever have, against Ruskin for any acts or omissions by the
Ruskin occurring prior to the Effective Date of this Agreement. Notwithstanding
the foregoing, Ruskin and the Company agree that the release provisions of this
Section 3 shall not apply to any Claims that the Company may have against Ruskin
for embezzlement or any other fraudulent acts that Ruskin may have committed
against, or while employed by, the Company.

5.      Release of Unknown Claims

        a. Ruskin 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."

        b. Ruskin and the Company hereby waive and relinquish all rights and
benefits that they 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. Notwithstanding the foregoing, the Company's waiver of its
rights under Section 1542 shall not apply to any claims that it may have against
Ruskin for embezzlement or any other fraudulent acts that Ruskin may have
committed against, or while employed by, the Company.

6.      Older Worker's Benefit Protection Act.

        a. This Agreement is subject to the terms of the Older Workers Benefit
Protection Act of 1990 (the "OWBPA"). The OWBPA provides that an individual
cannot waive a right or claim under the Age Discrimination in Employment Act
("ADEA") unless the waiver is knowing and voluntary. Pursuant to the terms of
the OWBPA, Ruskin acknowledges and agrees that he has executed this Agreement
voluntarily, and with full knowledge of its consequences.

        b. In addition, Ruskin hereby acknowledges and agrees that: (a) this
Agreement has been written in a manner that is calculated to be understood, and
is understood, by Ruskin; (b) the release provisions of this Agreement apply to
any rights that Ruskin may have under the ADEA, including the right to file a
lawsuit against the



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Company for age discrimination; (c) the release provisions of this Agreement do
not apply to any rights or claims that Ruskin may have under the ADEA that arise
after the date he executes this Agreement; (d) the Company does not have a
preexisting duty to pay the settlement payment identified in this Agreement; (e)
Ruskin has the right to consult with an attorney prior to executing this
Agreement; (f) Ruskin shall have a period of 21 days in which to consider the
terms of this Agreement prior to its execution; and (g) Ruskin shall have a
period of seven days after execution of this Agreement in which to revoke this
Agreement. Ruskin further understands that this Agreement shall not become
effective until expiration of this seven-day period (the "Effective Date").

7.      Confirmation of Payment of Wages.

        Ruskin acknowledges that he has been paid all wages and other
compensation due and owing to him from the Company as of the Effective Date of
this Agreement, including all commissions, bonuses, and accrued vacation.
Accordingly, Ruskin understands that the release provisions of Section 2 of this
Agreement release and discharge the Company from any and all claims that he may
have against the Company for unpaid wages and other compensation including, but
not limited to, any claims for salary; bonuses; commissions; stock; stock
options; other securities, or any other ownership interests or rights to
acquire, directly or indirectly, ownership interests in the Company; vacation
pay; fringe benefits; expense reimbursements; severance pay; or any other form
of compensation not listed as part of this Agreement.

8.      Confidentiality and Non-Disparagement

        a. Ruskin and the Company agree, covenant and represent 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 shall be held in
confidence, and shall not be disclosed, communicated, offered into evidence in
any legal proceeding, or divulged to any person other than those who must
perform tasks to effectuate this Agreement. Notwithstanding the foregoing, the
parties may disclose the terms of this Agreement to those persons to whom
disclosure is necessary for the preparation of tax returns and other financial
reports, the obtaining of legal advice, and to persons to whom disclosure is
ordered by a court of competent jurisdiction or otherwise required by law
(including the Securities Exchange Act of 1934 and the regulations of the NASDAQ
Stock Exchange) or by obligation to owners, shareholders, partners, or members
of the Company.

        b. Ruskin 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.

9.      Trade Secrets.

        Ruskin acknowledges that he executed a Proprietary Information Agreement
and that he shall continue to be bound by this Proprietary Information Agreement
following



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the termination of his employment with MTI. A copy of the Proprietary
Information Agreement is attached to this Agreement as Exhibit B. Without
limiting in any way the terms of the Proprietary Information Agreement, Ruskin
agrees that he will not disclose over the Internet any confidential,
proprietary, or trade secret information of the Company.

10.     Non-Admission of Liability.

        This Agreement shall not be treated as an admission of liability by
either party, at any time or for any purpose, and 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 Section 2(c) of this
Agreement.

11.     Arbitration of Disputes.

        a. MTI and Ruskin agree that, to the fullest extent permitted by law,
any and all claims or controversies between them (or between Ruskin and any
present or former officer, director, agent, or employee of the Company or any
parent, subsidiary, or other entity affiliated with the Company) relating in any
manner to Ruskin's employment or the termination of Ruskin's employment shall be
resolved by final and binding arbitration in accordance with the then-existing
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association (the "AAA Rules"). Claims subject to arbitration shall
include, but are not limited to: contract claims, tort claims, claims relating
to compensation and stock options, as well as claims based on any federal,
state, or local law, statute, or regulation, including but not limited to any
claims arising under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, and the
California Fair Employment and Housing Act. However, claims for unemployment
compensation, workers' compensation, and claims under the National Labor
Relations Act shall not be subject to arbitration.

        b. The arbitrator shall prepare a written decision containing the
essential findings and conclusions on which the award is based so as to ensure
meaningful judicial review of the decision. The arbitrator shall apply the same
substantive law, with the same statutes of limitations and same remedies, that
would apply if the claims were brought in a court of law. The arbitrator shall
have the authority to rule on a motion to dismiss and/or summary judgment by
either Ruskin or the Company and shall apply the standards governing such
motions under the California Code of Civil Procedure.

        c. The parties may bring an action in court to compel arbitration under
this Agreement and to enforce an arbitration award. Otherwise, neither party
shall initiate or prosecute any lawsuit or administrative action in any way
related to any arbitrable claim, including without limitation any claim as to
the making, existence, validity, or enforceability of the agreement to
arbitrate. Nothing in this Agreement precludes a party from filing an
administrative charge before an agency that has jurisdiction over an arbitrable
claim. All arbitration hearings under this Agreement shall be conducted in


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Orange County, California. Notwithstanding the foregoing, either party may, at
its option, seek injunctive relief in a court of competent jurisdiction for any
claim or controversy arising out of or related to the unauthorized use,
disclosure, or misappropriation of the confidential and/or proprietary
information of either party.

        d. THE PARTIES UNDERSTAND THAT THIS SECTION 10 CONSTITUTES A WAIVER OF
THEIR RIGHT TO A TRIAL BY JURY OF ANY CLAIMS OR CONTROVERSIES COVERED BY THIS
AGREEMENT, AND THAT NONE OF THOSE CLAIMS OR CONTROVERSIES SHALL BE RESOLVED BY A
JURY TRIAL.

        e. The arbitration provisions of this Section 10 shall be governed by
the Federal Arbitration Act ("FAA"), unless a court of competent jurisdiction
determines the FAA to be inapplicable, in which case the parties agree that the
California Arbitration Act (Code Civil Procedure Section 1280 et seq.) shall
apply. In all other respects, this Section 10 is to be construed in accordance
with the laws of the State of California, without reference to conflicts of law
principles.

12.     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 Ruskin and MTI.

13.     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.

14.     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.

15.     Integration.

        This Agreement; Ruskin's Option Agreements with the Company; and the
Proprietary Information Agreement attached as Exhibit B constitute a single,
integrated



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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. This Agreement may not be orally modified.
This Agreement may only be modified in a written instrument signed by both
parties.

16.     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 4 of this Agreement. If a court of
competent jurisdiction finds the release provisions of Sections 2 or 4 of this
Agreement to be unenforceable or invalid, then this Agreement shall become null
and void, and the Severance Payment paid to Ruskin pursuant to Section 1 shall
be returned to MTI within 15 days. If a court of competent jurisdiction finds
any provision other than the release provisions of Sections 2 or 4, 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.

17.     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.

18.     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.

19.     Representations And Warranties.

        a. Ruskin represents and warrants that he has the authority to enter
into this Agreement and to bind all persons and entities claiming through him.

        b. Ruskin represents that he has read this Agreement and fully
understands all of its terms; that MTI has advised him to consult with an
attorney, and that he has conferred with his attorneys or has knowingly and
voluntarily chosen not to confer with his 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.



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        c. Ruskin acknowledges that no representations, statements or promises
made by MTI, or by its agents or attorneys, has been relied on in entering into
this Agreement.

        THE UNDERSIGNED HAVE READ THE FOREGOING AGREEMENT AND ACCEPT AND AGREE
TO THE PROVISIONS CONTAINED THEREIN, AND HEREBY EXECUTE IT, KNOWINGLY AND
VOLUNTARILY, AND WITH FULL UNDERSTANDING OF ITS CONSEQUENCES.

        IF RUSKIN SIGNS THIS AGREEMENT BEFORE THE 21-DAY REVIEW PERIOD PROVIDED
BY SECTION 6(b)(f), RUSKIN ACKNOWLEDGES AND AGREES THAT HE HAS VOLUNTARILY
WAIVED THE REVIEW PERIOD.

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
which consists of 9 pages, on the dates indicated below.


RICHARD L. RUSKIN                         MTI TECHNOLOGY CORPORATION

Signature: /s/ RICHARD L. RUSKIN          Signature: /s/ THOMAS P. RAIMONDI, JR.
           -----------------------                   ---------------------------
Date: 9/6/01                              Name:  Thomas P. Raimondi, Jr.
      ------------------------                   -------------------------------
                                          Title: President & CEO
                                                 -------------------------------
                                          Date:  9/17/01
                                                 -------------------------------


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