UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (date of earliest event reported): July 5, 2006

Date of Report (date of earliest event reported): June 20, 2006

MTI Technology Corporation

(Exact Name of Registrant as Specified in its Charter)

(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or Other Jurisdiction of Incorporation)

0-23418 (Commission File Number) 95-3601802 (I.R.S. Employer Identification No.)


0-23418		95-3601802
(Commission File Number)		(I.R.S. Employer Identification No.)

17595 Cartwright Road
Irvine, California 92614
(Address of Principal Executive Offices) (Zip Code)

(949) 251-1101
(Registrant’s Telephone Number,
Including Area Code)

(Former Name or Former Address, If Changed Since Last Report)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.01 Entry into a Material Definitive Agreement.
	Item 1.01 \| Entry into a Material Definitive Agreement.
	Item 9.01. Financial Statements and Exhibits.
	Item 2.01 \| Completion of Acquisition or Disposition of Assets.
	Item 2.03 \| Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
	Item 3.02 \| Unregistered Sales of Equity Securities.
	Item 5.02 \| Departure of Directors or Principal Officers; Election of Directors; Appointment of Executive Officers.
	Item 9.01 \| Financial Statements and Exhibits.
SIGNATURE
Index to Exhibits
Exhibit 10.1
EXHIBIT 2.1
Exhibit 10.2
EXHIBIT 2.2
Exhibit 10.3
EXHIBIT 4.1
EXHIBIT 4.2
EXHIBIT 10.1
EXHIBIT 10.2


Item 1.01		Entry into a Material Definitive Agreement.

OnAs previously reported in a Current Report on Form 8-K filed by MTI Technology Corporation (the “Company”) on June 207, 2006, wethe ~~modified~~Company ~~our~~entered ~~existing~~into ~~bank~~an ~~credit~~Asset ~~facility~~Purchase byAgreement ~~entering~~(the “Agreement”) ~~into~~with aCollective ~~Fourth Amendment~~Technologies, toLLC ~~Loan~~(“Collective”) on June 6, 2006. The Company and Collective ~~Security~~entered ~~Agreement~~into (an amendment to the ~~“Fourth~~Agreement on June 28, 2006 (“Amendment No. 1”) ~~with~~and ~~Comerica~~a second ~~Bank,~~amendment ~~successor~~to ~~by merger~~the toAgreement ~~Comerica~~on ~~Bank—California~~July 5, 2006 (“~~Comerica~~Amendment No. 2”). ~~The~~Amendment ~~Fourth~~No. 1 ~~Amendment~~amends ~~extends~~the Agreement to, among other things, update Schedule 8.3(b) of the ~~line-~~Agreement relating to the number of~~-credit~~ ~~maturity~~shares ~~date~~of ~~for~~restricted ~~six~~stock ~~months~~and options to ~~November 30,~~be ~~2006~~granted to former Collective option holders. Amendment ~~All~~No. 2 ~~other~~amends ~~provisions~~the Agreement to provide that the effective time of the ~~initial~~transaction ~~Loan~~is ~~and~~July ~~Security~~2, 2006. The Agreement, ~~dated~~was ~~November~~filed as an exhibit to the Company’s Annual Report on Form 10-K for the period ended April 131, ~~2002~~2006, aswhich ~~previously~~was ~~amended~~filed (with the ~~“Comerica~~Securities ~~Loan”)~~and Exchange Commission on June 30, 2006 ~~remain~~and is incorporated herein by reference. Copies of Amendment No. 1 and Amendment No. 2 are ~~the~~filed ~~same~~herewith and incorporated herein by reference.

On ~~June~~July 205, 2006, wein ~~entered~~connection ~~into~~with anthe ~~Amendment~~closing toof ~~Second~~the ~~Waiver~~transaction ~~and~~with ~~Consent~~Collective, (as discussed below, the ~~“Waiver)~~Company ~~with The~~entered ~~Canopy~~into ~~Group,~~an ~~Inc.,~~employment aagreement with ~~Utah~~Edward ~~corporation~~C. Ateyeh, Jr. (the “~~Canopy~~Employment Agreement”). ~~Under~~pursuant ~~the~~to ~~Waiver,~~which ~~Canopy~~Mr. Ateyeh ~~agreed~~will toserve ~~consent to~~as ~~our~~Executive ~~entering~~Vice ~~into~~President ~~and~~of ~~performing~~the ~~our~~Company ~~obligations~~and President ~~under~~of ~~that~~the ~~certain~~Company’s ~~Third~~services ~~Amendment~~division. toUnder ~~Loan~~the ~~and Security~~Employment Agreement, ~~dated~~which ~~June 15,~~is ~~2005,~~filed herewith by and ~~between~~incorporated ~~Comerica~~herein ~~and~~by usreference, ~~which~~Mr. Ateyeh ~~extended~~will ~~our line-of-credit~~receive ~~maturity~~a ~~date~~salary ~~for~~of a$300,000 per year toand ~~May 31,~~will ~~2006.~~be ~~Canopy~~eligible ~~also~~to ~~agreed~~receive toa ~~guarantee~~cash ~~our~~bonus ~~line~~ of ~~credit~~up ~~with~~to ~~Comerica~~$100,000 per ~~through~~year. ~~December 31,~~In ~~2006~~addition, ~~and~~Mr. Ateyeh towill ~~delete~~receive a300,000 ~~provision~~shares of ~~Second~~restricted ~~Waiver~~stock and ~~Consent,~~ ~~dated~~options asto ofpurchase ~~December 28~~300,000 ~~2004,~~shares ~~regarding~~of the ~~our~~Company’s ~~obligation~~common tostock, ~~make~~in ~~certain~~each ~~principal~~case upon compliance with ~~repayments~~applicable ~~under~~federal ~~the~~and ~~Comerica~~state ~~Loan,~~securities aslaws. ~~amended~~The Company and Mr. Ateyeh Inalso ~~exchange,~~entered weinto ~~issued~~an Indemnification Agreement, a ~~warrant~~form (of which was previously filed with the ~~“Warrant”)~~Securities and Exchange Commission on July to11, ~~Canopy~~2003 toas ~~purchase~~an upexhibit to ~~125,000~~the ~~shares~~Company’s ofAnnual ~~our~~Report ~~common~~on ~~stock~~Form at10-K afor ~~purchase~~the ~~price~~year ofended ~~$1.23 per~~April 5, ~~share~~2003, ~~the~~and ~~fair~~a ~~market~~Change ~~value~~ of ~~the~~Control ~~date~~Agreement, a form of ~~grant.~~which ~~The~~was ~~Warrant~~previously isfiled ~~immediately~~with ~~exercisable~~the Securities and ~~has a~~Exchange ~~term~~Commission ofon ~~five~~February 13, ~~years~~2006 as an exhibit to the Company’s Current Report on Form 8-K.

~~Canopy~~Mr. Ateyeh, ~~beneficially~~53, ~~owns~~served ~~approximately~~as ~~21.83%~~President of ~~our~~Collective ~~common~~from ~~stock~~May 1994 to July 2006 and as Executive Vice President of Pencom Systems Incorporated, ~~assuming~~the ~~conversion~~parent company of ~~our~~Collective, from January 1977 ~~outstanding~~to ~~convertible~~the ~~preferred~~present. ~~stock~~Collective was a provider of enterprise-class IT infrastructure solutions prior to the closing of the acquisition of its assets and ~~outstanding~~liabilities ~~warrants~~by the Company on July 5, ~~but~~2006. ~~excluding~~They provided ~~our~~these ~~outstanding~~services to a diverse clientele that included hundreds direct customers as well as ~~stock~~several ~~options~~large OEM partners such as EMC, Dell, Symantec and Microsoft. From its founding in 1994 by Mr. Ateyeh, Collective focused on building and providing the server and storage infrastructure necessary to support the complex and critical applications that enterprise customers depend upon for running their businesses.

~~The~~Item ~~foregoing~~2.01 ~~descriptions~~Completion of ~~the~~Acquisition ~~Fourth~~or ~~Amendment,~~Disposition ~~the Waiver, and the Warrant are qualified in their entirety by reference to the complete terms~~ of ~~those documents, copies of which are attached as Exhibit 10~~Assets.~~1, Exhibit 10.2 and Exhibit 10.3, respectively, to this Current Report on Form 8-K, and are incorporated herein by reference.~~

On July 5, 2006, the Company closed the acquisition of assets and liabilities from Collective. Pursuant to the Agreement, the Company has acquired specified assets and liabilities of Collective for a purchase price consisting of:

~~Item 9~~• $6,000,000 in cash; • notes in the aggregate principal amount of $2,000,000 bearing interest at 5% and due in 12 quarterly payments beginning 90 days after closing (the “Notes”); • 2,272,727 shares of Company common stock; • warrants to purchase 1,000,000 shares of Company common stock at an exercise price of $1.~~01.~~32 ~~Financial~~per ~~Statements~~share; and ~~Exhibits~~• assumption of certain liabilities.

The shares issued as consideration in the transaction are subject to a 12 month lock-up agreement and have piggyback registration rights. Pursuant to the terms of the Notes, payments under the Notes may be accelerated in the event of default and upon the termination of Mr. Ateyeh’s employment without cause and for good reason. The Company common stock and warrants issued in connection with the transaction were issued pursuant to the exemptions from registration contained in Section 4(c2) of the Securities Act of 1933, as amended, and Rule ~~Exhibits~~506 of Regulation D.

Exhibit No.		Description
10.1		Fourth Amendment to Loan and Security Agreement, entered into as of June 20, 2006, by and between Comerica Bank, successor by merger to Comerica Bank—California, and MTI Technology Corporation
10.2		Amendment to Second Waiver and Consent, entered into as of May 31, 2006, by and between The Canopy Group, Inc. and MTI Technology Corporation.
10.3		Warrant to Purchase Common Stock of MTI Technology Corporation, dated June 20, 2006, issued to The Canopy Group, Inc.

Mr. Ateyeh is a stockholder in Pencom Systems Incorporated (“Pencom”), the sole member of Collective. As a result of his ownership interest in Pencom, Mr. Ateyeh received, through a distribution by Collective of the consideration it received in the acquisition and a subsequent distribution by Pencom to its stockholders, a note with a principal amount of $581,613, warrants to purchase 300,000 shares of Company common stock and 851,100 shares of Company common stock. In addition, as a stockholder of Pencom, Mr. Ateyeh may have an indirect interest in any other consideration received by Collective in the transaction that has not been distributed to Pencom and its stockholders.

The Company will also issue up to 282,262 shares of restricted stock and 1,619,138 stock options to former employees of Collective. In addition to these shares of restricted stock and options, the Company will issue 300,000 shares of restricted stock and an option to purchase 300,000 shares of the Company’s common stock to Mr. Ateyeh, as discussed in Item 1.01 above and 150,000 shares of restricted stock to options pursuant to the Company’s employment agreements with Mr. Ateyeh, William Kerley, the former Chief Financial Officer and Chief Operating Officer of Collective and currently the Chief Operating Officer of the Company’s services division, in each case pursuant to their respective employment agreement with the Company and upon compliance with applicable federal and state securities laws, and all valued at fair market value on the date of grant. The Company has filed a Registration Statement on Form S-8 with respect to these securities and is in the process of complying with applicable state securities laws.


Item 2.03		Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The information disclosed under Item 2.01 hereof is incorporated herein by this reference.


Item 3.02		Unregistered Sales of Equity Securities.

The information disclosed under Item 2.01 hereof is incorporated herein by this reference.


Item 5.02		Departure of Directors or Principal Officers; Election of Directors; Appointment of Executive Officers.


Item 9.01		Financial Statements and Exhibits.

(d) Exhibits.


Exhibit No.				Description

2.1				Amendment No. 1 to Asset Purchase Agreement, dated June 28, 2006, by and among the Company, Collective and Pencom

2.2				Amendment No. 2 to Asset Purchase Agreement, dated July 5, 2006, by and among the Company, Collective and Pencom

4.1				Form of Common Stock Purchase Warrant

4.2				Registration Rights Agreement, dated July 5, 2006, by and between the Company and Collective

10.1				Form of Promissory Note

10.2				Employment Agreement, dated July 5, 2006, by and between the Company and Edward C. Ateyeh, Jr.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MTI TECHNOLOGY CORPORATION
Date: June 26, 2006	By:	/s/ Scott Poteracki
Date: July 11, 2006	By:	/s/ Scott J. Poteracki
		Scott Poteracki
		Scott J. Poteracki
		Executive Vice President, Chief Financial Officer and Secretary

Index to Exhibits

Exhibit No.	~~Description~~	Description
10.1	Fourth Amendment to Loan and Security Agreement, entered into as of June 20, 2006, by and between Comerica Bank, successor by merger to Comerica Bank—California, and MTI Technology Corporation
2.1		Amendment No. 1 to Asset Purchase Agreement, dated June 28, 2006, by and among the Company, Collective and Pencom
10.2	Amendment to Second Waiver and Consent, entered into as of May 31, 2006, by and between The Canopy Group, Inc. and MTI Technology Corporation.
2.2		Amendment No. 2 to Asset Purchase Agreement, dated July 5, 2006, by and among the Company, Collective and Pencom
10.3	Warrant to Purchase Common Stock of MTI Technology Corporation, dated June 20, 2006, issued to The Canopy Group, Inc.
4.1		Form of Common Stock Purchase Warrant
4.2		Registration Rights Agreement, dated July 5, 2006, by and between the Company and Collective
10.1		Form of Promissory Note
10.2		Employment Agreement, dated July 5, 2006, by and between the Company and Edward C. Ateyeh, Jr.

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Filing Compare · MTI TECHNOLOGY CORP