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                                                                   EXHIBIT 10.32

                           MTI TECHNOLOGY CORPORATION

                        2001 EMPLOYEE STOCK PURCHASE PLAN

      The following constitute the provisions of the 2001 Employee Stock
Purchase Plan of MTI Technology Corporation.

      1.  Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Parents or Subsidiaries with an opportunity to
purchase Common Stock of the Company through accumulated payroll deductions. It
is the intention of the Company to have the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Code. The provisions of the Plan,
accordingly, shall be construed so as to extend and limit participation in a
manner consistent with the requirements of that section of the Code.

      2.  Definitions. As used herein, the following definitions shall apply:

          (a)  "Administrator" means either the Board or a committee of the
Board that is responsible for the administration of the Plan as is designated
from time to time by resolution of the Board.

          (b)  "Applicable Laws" means the legal requirements relating to the
administration of employee stock purchase plans, if any, under applicable
provisions of federal securities laws, state corporate and securities laws, the
Code, the rules of any applicable stock exchange or national market system, and
the rules of any foreign jurisdiction applicable to participation in the Plan by
residents therein.

          (c)  "Board" means the Board of Directors of the Company.

          (d)  "Change in Control" means a change in ownership or control of the
Company effected through the direct or indirect acquisition by any person or
related group of persons (other than an acquisition from or by the Company or by
a Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities.

          (e)  "Code" means the Internal Revenue Code of 1986, as amended.

          (f)  "Common Stock" means the common stock of the Company.

          (g)  "Company" means MTI Technology Corporation, a Delaware
corporation.

          (h)  "Compensation" means an Employee's base salary from the Company
or one or more Designated Parents or Subsidiaries, including such amounts of
base salary as are deferred by the Employee (i) under a qualified cash or
deferred arrangement described in Section

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401(k) of the Code, or (ii) to a plan qualified under Section 125 of the Code.
Compensation does not include overtime, bonuses, annual awards, other incentive
payments, reimbursements or other expense allowances, fringe benefits (cash or
noncash), moving expenses, deferred compensation, contributions (other than
contributions described in the first sentence) made on the Employee's behalf by
the Company or one or more Designated Parents or Subsidiaries under any employee
benefit or welfare plan now or hereafter established, and any other payments not
specifically referenced in the first sentence.

          (i)  "Corporate Transaction" means any of the following transactions:

               (1) a merger or consolidation in which the Company is not the
          surviving entity, except for a transaction the principal purpose of
          which is to change the state in which the Company is incorporated;

               (2) the sale, transfer or other disposition of all or
          substantially all of the assets of the Company (including the capital
          stock of the Company's subsidiary corporations) in connection with
          complete liquidation or dissolution of the Company;

               (3) any reverse merger in which the Company is the surviving
          entity but in which securities possessing more than fifty percent
          (50%) of the total combined voting power of the Company's outstanding
          securities are transferred to a person or persons different from those
          who held such securities immediately prior to such merger; or

               (4) acquisition by any person or related group of persons (other
          than the Company or by a Company-sponsored employee benefit plan) of
          beneficial ownership (within the meaning of Rule 13d-3 of the Exchange
          Act) of securities possessing more than fifty percent (50%) of the
          total combined voting power of the Company's outstanding securities
          (whether or not in a transaction also constituting a Change in
          Control), but excluding any such transaction that the Administrator
          determines shall not be a Corporate Transaction

          (j)  "Designated Parents or Subsidiaries" means the Parents or
Subsidiaries which have been designated by the Administrator from time to time
as eligible to participate in the Plan.

          (k)  "Effective Date" means July 11, 2001 However, should any
Designated Parent or Subsidiary become a participating company in the Plan after
such date, then such entity shall designate a separate Effective Date with
respect to its employee-participants.

          (l)  "Employee" means any individual, including an officer or
director, who is an employee of the Company or a Designated Parent or Subsidiary
for purposes of Section 423 of the Code. For purposes of the Plan, the
employment relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the
individual's employer. Where the period of leave exceeds ninety (90) days and
the individual's

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right to reemployment is not guaranteed either by statute or by contract, the
employment relationship will be deemed to have terminated on the ninety-first
(91st) day of such leave, for purposes of determining eligibility to participate
in the Plan.

          (m)  "Enrollment Date" means the first day of each Offer Period.

          (n)  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

          (o)  "Exercise Date" means the last day of each Purchase Period.

          (p)  "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

               (1) Where there exists a public market for the Common Stock, the
          Fair Market Value shall be (A) the closing price for a share of Common
          Stock on the date of the determination (or, if no closing price was
          reported on that date, on the last trading date on which a closing
          price was reported) on the stock exchange determined by the
          Administrator to be the primary market for the Common Stock or the
          Nasdaq National Market, whichever is applicable or (B) if the Common
          Stock is not traded on any such exchange or national market system,
          the average of the closing bid and asked prices of a share of Common
          Stock on the Nasdaq Small Cap Market on the date of the determination
          (or, if no such prices were reported on that date, on the last date on
          which such prices were reported), in each case, as reported in The
          Wall Street Journal or such other source as the Administrator deems
          reliable;

               (2) In the absence of an established market of the type described
          in (1), above, for the Common Stock, the Fair Market Value thereof
          shall be determined by the Administrator in good faith.

          (q)  "Offer Period" means an Offer Period established pursuant to
Section 4 hereof.

          (r)  "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

          (s)  "Participant" means an Employee of the Company or Designated
Parent or Subsidiary who is actively participating in the Plan.

          (t)  "Plan" means this Employee Stock Purchase Plan.

          (u)  "Purchase Period" means a period of approximately six months,
commencing on January 1 and July 1 of each year and terminating on the next
following June 30 or December 31, respectively; provided, however, that the
first Purchase Period shall commence on the Effective Date and shall end on
December 31, 2001.

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          (v)  "Purchase Price" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.

          (w)  "Reserves" means the sum of the number of shares of Common Stock
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.

          (x)  "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.

     3.   Eligibility.

          (a)  General. Any individual who is an Employee on a given Enrollment
Date shall be eligible to participate in the Plan for the Offer Period
commencing with such Enrollment Date.

          (b)  Limitations on Grant and Accrual. Any provisions of the Plan to
the contrary notwithstanding, no Employee shall be granted an option under the
Plan (i) if, immediately after the grant, such Employee (taking into account
stock owned by any other person whose stock would be attributed to such Employee
pursuant to Section 424(d) of the Code) would own stock and/or hold outstanding
options to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or of any
Parent or Subsidiary, or (ii) which permits the Employee's rights to purchase
stock under all employee stock purchase plans of the Company and its Parents or
Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars
($25,000) worth of stock (determined at the Fair Market Value of the shares at
the time such option is granted) for each calendar year in which such option is
outstanding at any time. The determination of the accrual of the right to
purchase stock shall be made in accordance with Section 423(b)(8) of the Code
and the regulations thereunder.

          (c)  Other Limits on Eligibility. Notwithstanding Subsection (a),
above, the following Employees shall not be eligible to participate in the Plan
for any relevant Offer Period: (i) Employees whose customary employment is 20
hours or less per week; (ii) Employees whose customary employment is for not
more than 5 months in any calendar year; (iii) Employees who have been employed
for fewer than one month; and (iv) Employees who are subject to rules or laws of
a foreign jurisdiction that prohibit or make impractical the participation of
such Employees in the Plan.

     4.   Offer Periods.

          (a)  The Plan shall be implemented through overlapping or consecutive
Offer Periods until such time as (i) the maximum number of shares of Common
Stock available for issuance under the Plan shall have been purchased or (ii)
the Plan shall have been sooner terminated in accordance with Section 19 hereof.
The maximum duration of an Offer Period

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shall be twenty-seven (27) months. Initially, the Plan shall be implemented
through overlapping Offer Periods of twenty-four (24) months' duration
commencing each January 1 and July 1 following the Effective Date (except that
the initial Offer Period shall commence on the Effective Date and shall end on
June 30, 2003).

          (b)  A Participant shall be granted a separate option for each Offer
Period in which he or she participates. The option shall be granted on the
Enrollment Date and shall be automatically exercised in successive installments
on the Exercise Dates ending within the Offer Period.

          (c)  If on the first day of any Purchase Period in an Offer Period in
which a Participant is participating, the Fair Market Value of the Common Stock
is less than the Fair Market Value of the Common Stock on the Enrollment Date of
the Offer Period (after taking into account any adjustment during the Offer
Period pursuant to Section 18(a)), the Offer Period shall be terminated
automatically and the Participant shall be enrolled automatically in the new
Offer Period which has its first Purchase Period commencing on that date,
provided the Participant is eligible to participate in the Plan on that date and
has not elected to terminate participation in the Plan.

          (d)  Except as specifically provided herein, the acquisition of Common
Stock through participation in the Plan for any Offer Period shall neither limit
nor require the acquisition of Common Stock by a Participant in any subsequent
Offer Period.

     5.   Participation.

          (a)  An eligible Employee may become a Participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the designated payroll office of
the Company at least ten (10) business days prior to the Enrollment Date for the
Offer Period in which such participation will commence, unless a later time for
filing the subscription agreement is set by the Administrator for all eligible
Employees with respect to a given Offer Period.

          (b)  Payroll deductions for a Participant shall commence with the
first partial or full payroll period beginning on the Enrollment Date and shall
end on the last complete payroll period during the Offer Period, unless sooner
terminated by the Participant as provided in Section 10.

     6.   Payroll Deductions.

          (a)  At the time a Participant files a subscription agreement, the
Participant shall elect to have payroll deductions made during the Offer Period
in amounts between one percent (1%) and not exceeding ten percent (10%) of the
Compensation which the Participant receives during the Offer Period.

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          (b)  All payroll deductions made for a Participant shall be credited
to the Participant's account under the Plan and will be withheld in whole
percentages only. A Participant may not make any additional payments into such
account.

          (c)  A Participant may discontinue participation in the Plan as
provided in Section 10, or may increase or decrease the rate of payroll
deductions during the Offer Period by completing and filing with the Company a
change of status notice in the form of Exhibit B to this Plan authorizing an
increase or decrease in the payroll deduction rate. Any increase or decrease in
the rate of a Participant's payroll deductions shall be effective with the first
full payroll period commencing ten (10) business days after the Company's
receipt of the change of status notice unless the Company elects to process a
given change in participation more quickly. A Participant's subscription
agreement (as modified by any change of status notice) shall remain in effect
for successive Offer Periods unless terminated as provided in Section 10. The
Administrator shall be authorized to limit the number of payroll deduction rate
changes during any Offer Period.

          (d)  Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) herein, a Participant's
payroll deductions shall be decreased to 0%. Payroll deductions shall recommence
at the rate provided in such Participant's subscription agreement, as amended,
at the time when permitted under Section 423(b)(8) of the Code and Section 3(b)
herein, unless such participation is sooner terminated by the Participant as
provided in Section 10.

     7.   Grant of Option. On the Enrollment Date, each Participant shall be
granted an option to purchase (at the applicable Purchase Price) ten thousands
(10,000) shares of the Common Stock, subject to adjustment as provided in
Section 18 hereof; provided (i) that such option shall be subject to the
limitations set forth in Sections 3(b), 6 and 12 hereof, and (ii) the maximum
number of shares of Common Stock a Participant shall be permitted to purchase in
any Purchase Period shall be two thousands and five hundreds (2,500) shares,
subject to adjustment as provided in Section 18 hereof. Exercise of the option
shall occur as provided in Section 8, unless the Participant has withdrawn
pursuant to Section 10, and the option, to the extent not exercised, shall
expire on the last day of the Offer Period.

     8.   Exercise of Option. Unless a Participant withdraws from the Plan as
provided in Section 10, below, the Participant's option for the purchase of
shares will be exercised automatically on each Exercise Date, by applying the
accumulated payroll deductions in the Participant's account to purchase the
number of full shares subject to the option by dividing such Participant's
payroll deductions accumulated prior to such Exercise Date and retained in the
Participant's account as of the Exercise Date by the applicable Purchase Price.
No fractional shares will be purchased; any payroll deductions accumulated in a
Participant's account which are not sufficient to purchase a full share shall be
carried over to the next Purchase Period or Offer Period, whichever applies, or
returned to the Participant, if the Participant withdraws from the Plan.
Notwithstanding the foregoing, any amount remaining in a Participant's account
following the purchase of shares on the Exercise Date due to the

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application of Section 423(b)(8) of the Code or Section 7, above shall be
returned to the Participant and shall not be carried over to the next Offer
Period or Purchase Period. During a Participant's lifetime, a Participant's
option to purchase shares hereunder is exercisable only by the Participant.

     9.   Delivery. Upon receipt of a request from a Participant after each
Exercise Date on which a purchase of shares occurs, the Company shall arrange
the delivery to such Participant, as promptly as practicable, of a certificate
representing the shares purchased upon exercise of the Participant's option.

     10.  Withdrawal; Termination of Employment.

          (a)  A Participant may either (i) withdraw all but not less than all
the payroll deductions credited to the Participant's account and not yet used to
exercise the Participant's option under the Plan or (ii) terminate future
payroll deductions, but allow accumulated payroll deductions to be used to
exercise the Participant's option under the Plan at any time by giving written
notice to the Company in the form of Exhibit B to this Plan. If the Participant
elects withdrawal alternative (i) described above, all of the Participant's
payroll deductions credited to the Participant's account will be paid to such
Participant as promptly as practicable after receipt of notice of withdrawal,
such Participant's option for the Offer Period will be automatically terminated,
and no further payroll deductions for the purchase of shares will be made during
the Offer Period. If the Participant elects withdrawal alternative (ii)
described above, no further payroll deductions for the purchase of shares will
be made during the Offer Period, all of the Participant's payroll deductions
credited to the Participant's account will be applied to the exercise of the
Participant's option on the next Exercise Date, and after such Exercise Date,
such Participant's option for the Offer Period will be automatically terminated.
If a Participant withdraws from an Offer Period, payroll deductions will not
resume at the beginning of the succeeding Offer Period unless the Participant
delivers to the Company a new subscription agreement.

          (b)  Upon termination of a Participant's employment relationship (as
described in Section 2(k)) at a time more than three (3) months from the next
scheduled Exercise Date, the payroll deductions credited to such Participant's
account during the Offer Period but not yet used to exercise the option will be
returned to such Participant or, in the case of his/her death, to the person or
persons entitled thereto under Section 14, and such Participant's option will be
automatically terminated. Upon termination of a Participant's employment
relationship (as described in Section 2(k)) within three (3) months of the next
scheduled Exercise Date, the payroll deductions credited to such Participant's
account during the Offer Period but not yet used to exercise the option will be
applied to the purchase of Common Stock on the next Exercise Date, unless the
Participant (or in the case of the Participant's death, the person or persons
entitled to the Participant's account balance under Section 14) withdraws from
the Plan by submitting a change of status notice in accordance with subsection
(a) of this Section 10. In such a case, no further payroll deductions will be
credited to the Participant's account following the Participant's termination of
employment and the Participant's option under the Plan will be

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automatically terminated after the purchase of Common Stock on the next
scheduled Exercise Date.

     11.  Interest. No interest shall accrue on the payroll deductions credited
to a Participant's account under the Plan.

     12.  Stock.

          (a)  The maximum number of shares of Common Stock which shall be made
available for sale under the Plan shall be 1,200,000 shares, subject to
adjustment upon changes in capitalization of the Company as provided in Section
18. If the Administrator determines that on a given Exercise Date the number of
shares with respect to which options are to be exercised may exceed (x) the
number of shares then available for sale under the Plan or (y) the number of
shares available for sale under the Plan on the Enrollment Date(s) of one or
more of the Offer Periods in which such Exercise Date is to occur, the
Administrator may make a pro rata allocation of the shares remaining available
for purchase on such Enrollment Dates or Exercise Date, as applicable, in as
uniform a manner as shall be practicable and as it shall determine to be
equitable, and shall either continue all Offer Periods then in effect or
terminate any one or more Offer Periods then in effect pursuant to Section 19,
below.

          (b)  A Participant will have no interest or voting right in shares
covered by the Participant's option until such shares are actually purchased on
the Participant's behalf in accordance with the applicable provisions of the
Plan. No adjustment shall be made for dividends, distributions or other rights
for which the record date is prior to the date of such purchase.

          (c)  Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant or in the name of the Participant and
his or her spouse.

     13.  Administration. The Plan shall be administered by the Administrator
which shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Administrator shall, to the full extent permitted by
Applicable Law, be final and binding upon all persons.

     14.  Designation of Beneficiary.

          (a)  Each Participant will file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the Participant's account
under the Plan in the event of such Participant's death. If a Participant is
married and the designated beneficiary is not the spouse, spousal consent shall
be required for such designation to be effective.

          (b)  Such designation of beneficiary may be changed by the Participant
(and the Participant's spouse, if any) at any time by written notice. In the
event of the death of a Participant and in the absence of a beneficiary validly
designated under the Plan who is living (or in existence) at the time of such
Participant's death, the Company shall deliver such shares

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and/or cash to the executor or administrator of the estate of the Participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Administrator), the Administrator shall deliver such shares and/or cash to
the spouse (or domestic partner, as determined by the Administrator) of the
Participant, or if no spouse (or domestic partner) is known to the
Administrator, then to the issue of the Participant, such distribution to be
made per stirpes (by right of representation), or if no issue are known to the
Administrator, then to the heirs at law of the Participant determined in
accordance with Section 27.

     15.  Transferability. Neither payroll deductions credited to a
Participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 14 hereof) by the Participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Administrator may treat such act as an election to
withdraw funds from an Offer Period in accordance with Section 9.

     16.  Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.

     17.  Reports. Individual accounts will be maintained for each Participant
in the Plan. Statements of account will be given to Participants at least
annually, which statements will set forth the amounts of payroll deductions, the
Purchase Price, the number of shares purchased and the remaining cash balance,
if any.

     18.  Adjustments Upon Changes in Capitalization; Corporate Transactions.

          (a)  Adjustments Upon Changes in Capitalization. Subject to any
required action by the stockholders of the Company, the Reserves, the Purchase
Price, the maximum number of shares that may be purchased in any Offer Period or
Purchase Period, as well as any other terms that the Administrator determines
require adjustment shall be proportionately adjusted for (i) any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, (ii) any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company,
or (iii) as the Administrator may determine in its discretion, any other
transaction with respect to Common Stock to which Section 424(a) of the Code
applies; provided, however that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Administrator and its
determination shall be final, binding and conclusive. Except as the
Administrator determines, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason hereof shall be made with respect to, the
Reserves and the Purchase Price.

          (b)  Corporate Transactions. In the event of a proposed Corporate
Transaction, each option under the Plan shall be assumed by such successor
corporation or a parent or

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subsidiary of such successor corporation, unless the Administrator, in the
exercise of its sole discretion and in lieu of such assumption, determines to
shorten the Offer Period then in progress by setting a new Exercise Date (the
"New Exercise Date"). If the Administrator shortens the Offer Period then in
progress in lieu of assumption in the event of a Corporate Transaction, the
Administrator shall notify each Participant in writing at least ten (10)
business days prior to the New Exercise Date, that the Exercise Date for the
Participant's option has been changed to the New Exercise Date and that either:

          (i)  the Participant's option will be exercised automatically on the
     New Exercise Date, unless prior to such date the Participant has withdrawn
     from the Offer Period as provided in Section 10; or

          (ii) the Company shall pay to the Participant on the New Exercise Date
     an amount in cash, cash equivalents, or property as determined by the
     Administrator that is equal to the difference in the Fair Market Value of
     the shares subject to the option and the Purchase Price due had the
     Participant's option been exercised automatically under Subsection (b)(i)
     above.

          For purposes of this Subsection, an option granted under the Plan
shall be deemed to be assumed if, in connection with the Corporate Transaction,
the option is replaced with a comparable option with respect to shares of
capital stock of the successor corporation or Parent thereof. The determination
of option comparability shall be made by the Administrator prior to the
Corporate Transaction and its determination shall be final, binding and
conclusive on all persons.

     19.  Amendment or Termination.

          (a)  The Administrator may at any time and for any reason terminate or
amend the Plan. Except as provided in Section 18, no such termination can affect
options previously granted, provided that the Plan or any one or more Offer
Periods may be terminated by the Administrator on any Exercise Date or by the
Administrator establishing a new Exercise Date with respect to any Offer Period
and/or any Purchase Period then in progress if the Administrator determines that
the termination of the Plan or such one ore more Offer Periods is in the best
interests of the Company and its stockholders. Except as provided in Section 18
and this Section 19, no amendment may make any change in any option theretofore
granted which adversely affects the rights of any Participant without the
consent of affected Participants. To the extent necessary to comply with Section
423 of the Code (or any successor rule or provision or any other Applicable
Law), the Company shall obtain stockholder approval in such a manner and to such
a degree as required.

          (b)  Without stockholder consent and without regard to whether any
Participant rights may be considered to have been "adversely affected," the
Administrator shall be entitled to limit the frequency and/or number of changes
in the amount withheld during Offer Periods, change the length of Purchase
Periods within any Offer Period, determine the length of any future Offer
Period, determine whether future Offer Periods shall be consecutive or
overlapping, establish the exchange ratio applicable to amounts withheld in a
currency other than

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U.S. dollars, establish additional terms, conditions, rules or procedures to
accommodate the rules or laws of applicable foreign jurisdictions, permit
payroll withholding in excess of the amount designated by a Participant in order
to adjust for delays or mistakes in the Company's processing of properly
completed withholding elections, establish reasonable waiting and adjustment
periods and/or accounting and crediting procedures to ensure that amounts
applied toward the purchase of Common Stock for each Participant properly
correspond with amounts withheld from the Participant's Compensation, and
establish such other limitations or procedures as the Administrator determines
in its sole discretion advisable and which are consistent with the Plan.

     20.  Notices. All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Administrator at the location,
or by the person, designated by the Administrator for the receipt thereof.

     21.  Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all Applicable Laws
and shall be further subject to the approval of counsel for the Company with
respect to such compliance. As a condition to the exercise of an option, the
Company may require the Participant to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned Applicable Laws. In addition, no options shall be exercised
or shares issued hereunder before the Plan shall have been approved by
stockholders of the Company as provided in Section 23.

     22.  Term of Plan. The Plan shall become effective upon the later to occur
of its adoption by the Board and its approval by the stockholders of the
Company. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 19.

     23.  Stockholder Approval. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months before or after the date
the Plan is adopted by the Board. Such stockholder approval shall be obtained in
the degree and manner required under Applicable Laws.

     24.  No Employment Rights. The Plan does not, directly or indirectly,
create any right for the benefit of any employee or class of employees to
purchase any shares under the Plan, or create in any employee or class of
employees any right with respect to continuation of employment by the Company or
a Designated Parent or Subsidiary, and it shall not be deemed to interfere in
any way with such employer's right to terminate, or otherwise modify, an
employee's employment at any time.

     25.  No Effect on Retirement and Other Benefit Plans. Except as
specifically provided in a retirement or other benefit plan of the Company or a
Designated Parent or Subsidiary, participation in the Plan shall not be deemed
compensation for purposes of computing benefits or contributions under any
retirement plan of the Company or a Designated Parent or Subsidiary, and shall
not affect any benefits under any other benefit plan of any kind or

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any benefit plan subsequently instituted under which the availability or amount
of benefits is related to level of compensation. The Plan is not a "Retirement
Plan" or "Welfare Plan" under the Employee Retirement Income Security Act of
1974, as amended.

     26.  Effect of Plan. The provisions of the Plan shall, in accordance with
its terms, be binding upon, and inure to the benefit of, all successors of each
Participant, including, without limitation, such Participant's estate and the
executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such
Participant.

     27.  Governing Law. The Plan is to be construed in accordance with and
governed by the internal laws of the State of California (as permitted by
Section 1646.5 of the California Civil Code, or any similar successor provision)
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties, except to the extent the
internal laws of the State of California are superseded by the laws of the
United States. Should any provision of the Plan be determined by a court of law
to be illegal or unenforceable, the other provisions shall nevertheless remain
effective and shall remain enforceable.

     28.  Dispute Resolution. The provisions of this Section 28 (and as restated
in the Subscription Agreement) shall be the exclusive means of resolving
disputes arising out of or relating to the Plan. The Company and the
Participant, or their respective successors (the "parties"), shall attempt in
good faith to resolve any disputes arising out of or relating to the Plan by
negotiation between individuals who have authority to settle the controversy.
Negotiations shall be commenced by either party by notice of a written statement
of the party's position and the name and title of the individual who will
represent the party. Within thirty (30) days of the written notification, the
parties shall meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, to resolve the dispute. If the dispute
has not been resolved by negotiation, the parties agree that any suit, action,
or proceeding arising out of or relating to the Plan shall be brought in the
United States District Court for the Central District of California (or should
such court lack jurisdiction to hear such action, suit or proceeding, in a
California state court in the County of Orange) and that the parties shall
submit to the jurisdiction of such court. The parties irrevocably waive, to the
fullest extent permitted by law, any objection the party may have to the laying
of venue for any such suit, action or proceeding brought in such court. THE
PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF
ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this
Section 28 shall for any reason be held invalid or unenforceable, it is the
specific intent of the parties that such provisions shall be modified to the
minimum extent necessary to make it or its application valid and enforceable.

                                       12<PAGE>   1

                                                                   EXHIBIT 10.33

                               LIMITED WAIVER AND
                          AMENDMENT TO LOAN DOCUMENTS

BORROWER:  MTI TECHNOLOGY CORPORATION

DATE:      AS OF MAY 31, 2001

       THIS LIMITED WAIVER AND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
"Agreement") is entered into by and among MTI TECHNOLOGY CORPORATION
("Borrower"), SILICON VALLEY BANK ("SVB") and GENERAL ELECTRIC CAPITAL
CORPORATION ("GE Capital") as co-lenders, and SVB, as Servicing Agent for the
Lenders. (SVB and GE Capital are sometimes referred to herein, individually, as
"Lender", and collectively, as the "Lenders".)

       Borrower, the Lenders, and Servicing Agent are parties to that certain
Loan and Security Agreement, dated as of July 22, 1998 (as amended, restated,
supplemented, or otherwise modified from time to time, the "Loan Agreement"),
and hereby agree to further amend the Loan Agreement, as follows. (Capitalized
terms used but not defined in this Amendment, shall have the meanings set forth
in the Loan Agreement.)

       1. WAIVER OF DEFAULTS. Lenders, Servicing Agent, and Borrower agree that
the Borrower's existing defaults under the Loan Agreement due to the Borrower's
failure to comply with each of the following is hereby waived: (i) the Quick
Ratio financial covenant set forth in Section 6.9 of the Loan Agreement as of
the end of each fiscal month during the fiscal quarter ended April 7, 2001 and
(ii) the Maximum Net Loss financial covenant set forth in Section 6.13 of the
Loan Agreement for the fourth fiscal quarter of its fiscal year 2001 (which
fiscal quarter ended April 7, 2001). It is understood by the parties hereto,
however, that such waivers do not constitute a waiver of any other provision or
term of the Loan Agreement or any related document nor an agreement to waive in
the future these covenants or any other provision or term of the Loan Agreement
or any related document.

       2. MODIFICATION OF QUICK RATIO COVENANT. Lenders, Servicing Agent, and
Borrower hereby agree that Section 6.9 of the Loan Agreement hereby is amended
and restated in its entirety to read as follows:

                     6.9 QUICK RATIO. Borrower will maintain as of the last day
              of each fiscal month a ratio of Quick Assets to Current
              Liabilities of at least 0.70 to 1.00.

       3. MODIFICATION OF PROFITABILITY COVENANT. Lenders, Servicing Agent, and
Borrower hereby agree that Section 6.12 of the Loan Agreement hereby is amended
and restated in its entirety to read as follows:

                                      -1-
<PAGE>   2

                     6.12 PROFITABILITY. Borrower shall have a net profit (as
              determined in accordance with GAAP) before taxes and before the
              impact of any recognized loss arising from Caldera or Borrower's
              divestment of its interest in Caldera (in each case, as determined
              in accordance with GAAP) for the third fiscal quarter of its
              fiscal year 2002 (which fiscal quarter ends on or about January 5,
              2002) and each fiscal quarter thereafter.

       4. MODIFICATION OF MAXIMUM NET LOSS COVENANT. Lenders, Servicing Agent,
and Borrower hereby agree that Section 6.13 of the Loan Agreement hereby is
amended and restated in its entirety to read as follows:

                     6.13 MAXIMUM NET LOSS. Borrower's maximum net loss (as
              determined in accordance with GAAP) shall not exceed: (a) for the
              first fiscal quarter of its fiscal year 2002 (which fiscal quarter
              ends on or about July 7, 2001), $4,500,000 before taxes and before
              the impact of any recognized loss arising from Caldera or
              Borrower's divestment of its interest in Caldera (in each case, as
              determined in accordance with GAAP); and (b) for the second fiscal
              quarter of its fiscal year 2002 (which fiscal quarter ends on or
              about October 6, 2001), $3,000,000 before taxes and before the
              impact of any recognized loss arising from Caldera or Borrower's
              divestment of its interest in Caldera (in each case, as determined
              in accordance with GAAP).

       5. FEE. In consideration for the Lenders and Servicing Agent entering
into this Agreement, Borrower shall concurrently pay Servicing Agent, for the
benefit of the Lenders, a fee in the amount of $24,000 (of which $8,000 shall be
payable to SVB and $16,000 shall be payable to GE Capital), which shall be
non-refundable and in addition to all interest and other fees payable to
Servicing Agent and the Lenders under the Loan Agreement. Servicing Agent is
authorized to charge said fee to Borrower's loan account.

       6. REPRESENTATIONS TRUE. Borrower represents and warrants to Servicing
Agent and the Lenders that all representations and warranties set forth in the
Loan Agreement, as amended hereby, are true and correct.

       7. GENERAL PROVISIONS. This Agreement, the Loan Agreement, any prior
written amendments to the Loan Agreement signed by Borrower, the applicable
requisite Lenders, and Servicing Agent, and the other written documents and
agreements between or among Borrower, the applicable requisite Lenders, and
Servicing Agent set forth in full all of the representations and agreements of
the Borrower, the Lenders, and Servicing Agent with respect to the subject
matter hereof and supersede all prior discussions, representations, agreements
and understandings between or among Borrower, the Lenders, and Servicing Agent
with respect to the subject hereof. Except as herein expressly amended, all of
the terms and provisions of the Loan Agreement, and all other documents and
agreements between or among Borrower, the Lenders, and Servicing Agent shall
continue in full force and effect and the same are hereby ratified and
confirmed.

                                      -2-
<PAGE>   3

[remainder of page intentionally left blank; signature page follows]

                                      -3-
<PAGE>   4

This Amendment may be executed in any number of counterparts and by different
parties on separate counterparts, each of which, when executed and delivered,
shall be deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Amendment.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the date first above written.

BORROWER:                                    LENDER:

MTI TECHNOLOGY CORPORATION                   SILICON VALLEY BANK

BY  /s/ [SIGNATURE ILLEGIBLE]                BY  /s/ [SIGNATURE ILLEGIBLE]
  -------------------------------              ---------------------------------

TITLE  Chief Financial Officer               TITLE  Sr. Vice President
     ----------------------------                 ------------------------------

LENDER:                                      SERVICING AGENT:

GENERAL ELECTRIC CAPITAL CORPORATION         SILICON VALLEY BANK

BY  /s/ [SIGNATURE ILLEGIBLE]                BY  /s/ [SIGNATURE ILLEGIBLE]
  -------------------------------              ---------------------------------

TITLE  Duly Authorized Signatory             TITLE  Sr. Vice President
     ----------------------------                 ------------------------------

                                      -4-

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