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SCOTT C. CLARKSON, ESQ. SBN 143271 EVE A. MARSELLA, ESQ. SBN 165797 CLARKSON, GORE & MARSELLA A PROFESSIONAL LAW CORPORATION 3424 Carson Street, Suite 350 Torrance, California 90503 (310) 542-0111 Telephone (310) 214-7254 Facsimile Attorneys for MTI Technology Corporation, Debtor and Debtor in Possession

FILED & ENTERED DEC 17 2007

CLERK U.S. BANKRUPTCY COURT Central District of California BY Duarte DEPUTY CLERK

UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA, SANTA ANA DIVISION In re MTI TECHNOLOGY CORPORATION, a Delaware corporation, Debtor and Debtor in Possession. Case No. SA 07-13347-ES Chapter 11 FINDING OF FACTS AND CONCLUSIONS OF LAW IN SUPPORT OF ORDER PURSUANT TO SECTIONS 105, 363(b), 363(f) AND 365 OF TITLE 11 OF THE UNITED STATES CODE (I) APPROVING SALE OF CERTAIN OF THE DEBTOR'S ASSETS FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND INTERESTS; (II) APPROVING OF DEBTOR'S ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS; AND (III) WAIVING THE 10-DAY STAY PERIODS SET FORTH IN BANKRUPTCY RULES 6004(h) AND 6006(d) Date: November 20, 2007 Time: 2:00 p.m. Ctrm: 5-A

A hearing (the "Hearing") was held on November 20, 2007, at 2:00 p.m., before the Honorable Erithe A. Smith, United States Bankruptcy Judge, in Courtroom 5A of the United States Bankruptcy Court, located at United States Bankruptcy Court, Central District of California, Ronald Reagan Federal Building and United States Courthouse, 411 West Fourth Street, Santa Ana, CA 92701-4593, for the Court to consider the motion (the Motion) filed by 1
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MTI Technology Corporation, Chapter 11 debtor and debtor in possession herein (the Debtor), for entry of an order of the Court authorizing and approving the sale (the Proposed Sale or Sale) of all of the authorized, issued and outstanding capital stock of each MTI Technology GmbH, MTI Technology Limited, and MTI France S.A.S. and certain other assets of the Debtor

5 6 7 8 9 10 11 12 certain Purchase Agreement, dated as of October 15, 2007, by and between the Debtor and the 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 following Findings of Fact and Conclusions of Law in support of the Sale Order: 28 2
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as described more fully below (collectively, the Purchased Securities and Assets), to, and the assumption of certain liabilities of the Debtor (the Assumed Liabilities), by, Zinc Holdings, LLC, a Delaware limited liability company (Zinc), or an overbidder, free and clear of all liens, claims and interests, with such liens, claims, and interests to attach to the proceeds of the Sale (the Sale Proceeds) with the same validity (or invalidity) and priority as existed prior to the Sale, all pursuant to the terms and conditions of, and as more particularly described in, that

Zinc, substantially in the form of the form of the Purchase Agreement previously approved by the Court. Appearances were made at the Hearing as set forth on the record of the Court. The Court, after considering the Motion, all pleadings filed in support of and in response to the Motion, any written objections or responses submitted as formal Court pleadings, and all statements, arguments and representations made at the hearing on the Motion, and the results of the auction sale of the Purchased Securities and Assets conducted by the Debtor (the "Auction"), and the Court, having entered that certain Order Pursuant To Sections 105, 363(b), 363(f) And 365 Of Title 11 Of The United States Code (I) Approving Sale of Certain of the Debtor's Assets Free and Clear of All Liens, Claims, Encumbrances and Interests; (II) Approving of Debtor's Assumption and Assignment of Certain Executory Contracts; and (III) Waiving the 10-Day Stay Periods Set Forth in Bankruptcy Rules 6004(h) and 6006(d) (the "Sale Order") concurrently herewith, and after due deliberation and good and sufficient cause appearing, hereby makes the

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General. 1. The Findings of Fact and the Conclusions of Law stated herein shall constitute the

Courts findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052, made applicable to this proceeding pursuant to Bankruptcy Rule 9014. To the extent that any finding of fact shall later be determined to be a conclusion of law, it shall be so deemed, and to the extent that any conclusion of law shall later be determined to be a finding of fact, it shall be so deemed. 2. All capitalized terms not otherwise defined herein have the meanings ascribed to

such terms in the Motion, the Sale Order, or the Copper Purchase Agreement (defined below). 3. The Court has jurisdiction to consider the Motion and the relief requested therein

under 28 U.S.C. 157 and 1334. The Motion is a core proceeding under 28 U.S.C. 157(b)(2)(A), (N) and (O). Venue is proper in the Court under 28 U.S.C. 1408 and 1409.

13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 the Hearing, the Auction, the Sale, the transactions contemplated by the APA (including, without 28 3
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4.

The statutory predicates for the relief sought in the Motion are Sections 105(a)

363 and 365 of the United States Bankruptcy Code, 11 U.S.C. 101, et seq. (the Bankruptcy Code), and Rules 2002, 6004 and 6006 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules). 5. As evidenced by the certificates of service filed with the Court, (i) due, proper,

timely, adequate, and sufficient notice of the Motion, the Hearing, the Auction, the Sale and the transactions contemplated by the Purchase Agreement (including, without limitation, the assumption and assignment of the agreements to be assumed pursuant to the Purchase Agreement) has been provided in accordance with Sections 102, 105, 363 and 365 of the Bankruptcy Code and Bankruptcy Rules 2002, 6004, 6006 and 9014 and the orders of this Court (including the Bidding Procedures Order); (ii) such notice was good, timely, sufficient and appropriate under the particular circumstances; and (iii) no other or further notice of the Motion,

1 2 3 4

limitation, the assumption and assignment of the agreements to be assumed pursuant to the Purchase Agreement) or the entry of the Sale Order is required. 6. Under the circumstances, a reasonable opportunity to object or otherwise be heard

with respect to the Motion and the relief requested therein, and an opportunity to bid at the 5 6 7 8 9 10 11 12 8. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4
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Auction, has been afforded to all interested persons and entities. The Bankruptcy Case. 7. The Case was commenced October 15, 2007 (Petition Date) by the filing of a

voluntary petition under Chapter 11 of the Bankruptcy Code. The Debtor continues to manage its financial affairs as a debtor in possession pursuant to 11 U.S.C. sections 1107 and 1108. The Sale Process for the Purchased Securities and Assets. The Debtor has sought buyers for the Purchased Securities and Assets (as well as

other of its assets) for over eight months, and is now unable to continue its operations outside of Chapter 11 due to continuing financial losses, loss of its pre-petition revolving credit line and declared defaults by its pre-petition secured lenders. 9. A number of potential parties performed due diligence of the Debtor's business

and the Purchased Securities and Assets and submitted offers and expressions of interest to the Debtor. 10. The Debtor concluded that the bid submitted by Zinc pursuant to the terms and

conditions of the Purchase Agreement was the highest and best stalking horse bid submitted to the Debtor. As a result, upon motion by the Debtor, adequate and sufficient notice of which and adequate and sufficient opportunity to object or otherwise be heard with respect to which was afforded to all parties in interest, the Court entered an order approving Zinc as the approved stalking horse bidder on October 17, 2007 (the "Bidding Procedures Order"). The Bidding Procedures Order has become a final and non-appealable order.

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11.

In the Bidding Procedures Order, potential overbidders were required to comply

with various requirements in order to be eligible to submit an overbid at the Auction. The Debtor contacted and facilitated due diligence with numerous potential overbidders. While a number of potential overbidders expressed an interest in purchasing the Purchased Assets, only

5 6 7 8 9 10 11 12 agreement submitted by the Buyer, as it may be amended or modified as provided herein 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5

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Copper Holdings LLC (Copper) and Zinc appeared at and bid at the Auction. At the Auction, Copper offered more consideration for the Purchased Securities and Assets than the sum proposed to be paid by Zinc. As ordered by the Court, the Auction took place on November 20, 2007 commencing at 2:00 p.m. at the Court. After a full and open Auction process conducted in the Courtroom, Copper (the Buyer) was declared the winning bidder at the Auction with an aggregate purchase price of $7,275,000 (Purchase Price), and the version of the purchase

(Copper Purchase Agreement), was and is approved. 12. In light of the foregoing, the Debtor has marketed the Purchased Securities and

Assets diligently, in good faith and in a commercially reasonable manner to secure, under the circumstances, the highest and best offer for the Purchased Securities and Assets. 13. Under the circumstances of this case, the Debtor afforded a fair and reasonable

opportunity for any potential purchaser to make a higher or better offer to acquire the Purchased Securities and Assets, and no higher or better offer has been made than that of the Buyer. The Sale of the Purchased Securities and Assets to Buyer. 14. The transactions effectuating, and the terms and conditions governing, the transfer

and sale of the Purchased Securities and Assets to the Buyer (the "Sale") are embodied in the Copper Purchase Agreement. 15. Upon the Closing, subject to and in accordance with the terms and conditions of

the Copper Purchase Agreement, the Buyer and the Debtor shall make the closing deliveries

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required under the Copper Purchase Agreement. 16. The Copper Purchase Agreement contemplates that the Sale shall be free and

clear of all defects or imperfections in title, encumbrances, interests, claims, charges, pledges, mortgages, deeds of trust, security interests, leases, subleases, licenses, options, rights of first

5 6 7 8 9 10 11 12 all of the foregoing collectively defined as Interests, within the meaning of section 363(f) of 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 currently unsatisfied conditions to the Buyer's obligations set forth in the Copper Purchase 28 6
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refusal, easements, rights-of-way, servitudes, covenants, conditions, proxies, voting trusts or agreements or transfer restrictions under any shareholder or similar agreement, and any and all rights, claims and interests of any nature whatsoever that may be asserted by any person other than the Debtor, including without limitation, pursuant to that certain Order entered by this Court authorizing on a final basis, among other things, the Debtors secured post-petition financing on a super-priority basis (the DIP Order) by the DIP Lender (as defined in the DIP Order), with

the Bankruptcy Code, with all such Interests to attach solely and exclusively to the sale proceeds with the same validity, priority, force, effect and extent as such Interests existed against the Purchased Securities and Assets immediately prior to the Closing, subject only to the rights, claims, defenses, and objections, if any, of the Debtor, and the terms of the DIP Order with respect to claims of the DIP Lender (as defined in the DIP Order) against the Debtor's estate. 17. As of the date of entry of the Sale Order, there has been no failure of any

condition under the Copper Purchase Agreement to the Buyers obligation to consummate the Sale that would entitle the Buyer not to consummate the Sale in accordance with the terms of the Copper Purchase Agreement or to terminate the Copper Purchase Agreement. As set forth in the Copper Purchase Agreement, other than the requirement of the entry of the Sale Order and these Findings of Fact and Conclusions of Law by the Court, performance by the Debtor of its obligations under the Copper Purchase Agreement, and the satisfaction or waiver of any

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Agreement, the Buyer's obligation to proceed with its purchase of the Purchased Securities and Assets constitutes an unconditional bid. 18. The Copper Purchase Agreement was negotiated, proposed, and entered into by

and between the Buyer and the Debtor without collusion, in good faith, and from arms-length 5 6 7 8 9 10 11 12 collusion and in good faith within the meaning of section 363(m) of the Bankruptcy Code. Thus, 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 for the Purchased Securities and Assets. Such sale consideration is greater than what the Debtor 28 7
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bargaining positions. The Buyer is not an insider (as that term is defined in section 101(31) of the Bankruptcy Code) of the Debtor. Neither the Debtor nor the Buyer has engaged in any conduct that would cause or permit the application of section 363(n) of the Bankruptcy Code to the Sale, including having the Copper Purchase Agreement voided or avoided. 19. The transactions contemplated by the Copper Purchase Agreement were

negotiated and are being undertaken by the Debtor and the Buyer at arms length, without

the Buyer is a good faith purchaser under section 363(m) of the Bankruptcy Code and, as such, is entitled to all of the protections afforded thereby. Absent a stay of the effectiveness of the Sale Order, the Buyer will be acting in good faith within the meaning of section 363(m) of the Bankruptcy Code in purchasing the Purchased Securities and Assets, and in closing the other transactions contemplated by the Copper Purchase Agreement, at any time after entry of the Sale Order. 20. The terms and conditions of the Copper Purchase Agreement and the closing

deliveries to be made by the Buyer under the Copper Purchase Agreement, including, without limitation, the Buyer's payment to the Debtor of the total Purchase Price pursuant to the terms set forth in the Copper Purchase Agreement: (i) are fair and reasonable, (ii) valid, binding and enforceable, (iii) constitute the highest and best offer for the Purchased Securities and Assets under the circumstances, and (iv) constitute reasonably equivalent value and fair consideration

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would realize from a piece-meal liquidation of the Purchased Securities and Assets or a liquidation under Chapter 7 of the Bankruptcy Code. 21. The Copper Purchase Agreement was not entered into for the purpose of

hindering, delaying or defrauding creditors under the Bankruptcy Code or under the laws of the 5 6 7 8 9 10 11 12 Code. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 assumed by the Buyer under the Copper Purchase Agreement. 28 8
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United States, or any state, territory or possession thereof, or of any foreign jurisdiction. 22. The transactions contemplated by the Copper Purchase Agreement will, upon

consummation thereof, (i) be a legal, valid, and effective transfer of the Purchased Securities and Assets to the Buyer with no further action required on the part of the Debtor or its affiliates, and (ii) vest the Buyer with all right, title and interest of the Debtor to the Purchased Securities and Assets free and clear of all Interests, within the meaning of section 363(f) of the Bankruptcy

23.

Neither the Buyer nor its affiliates, successors or assigns, as a result of any action

taken in connection with the purchase of the Purchased Securities and Assets: (a) is a successor to the Debtor; (b) has, de facto or otherwise, merged with or into the Debtor; or (c) is a continuation or substantial continuation of the Debtor or any enterprise of the Debtor. 24. The Buyer would not have entered into the Copper Purchase Agreement and

would not consummate the transactions described in the Copper Purchase Agreement if the Sale was not free and clear of all Interests. A sale of the Purchased Securities and Assets other than one free and clear of all Interests would adversely affect the estate by resulting in a significantly reduced purchase price, and therefore substantially less benefit to the estate. Therefore, upon the purchase of the Purchased Securities and Assets, the Buyer shall have no liability to any claimant, creditor or other persons or entity, as a purported successor to the Debtor or its affiliates or their respective businesses or otherwise, other than those specific liabilities expressly

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25.

The relief sought in the Motion, including approval of the Copper Purchase

Agreement and consummation of the transactions contemplated thereof, is in the best interests of the Debtor, its bankruptcy estate, its creditors and other parties in interest. The Sale must be approved promptly and consummated in order to preserve the viability of the Debtors business

5 6 7 8 9 10 11 12 27. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 30. 28 9
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as a going concern and to maximize the value of the Debtor estate and its stakeholders. 26. The Debtor, and each of its subsidiaries and affiliates, has all the corporate or

organizational power and authority necessary to (i) execute and deliver the Copper Purchase Agreement and all documents referenced in or contemplated by the Copper Purchase Agreement or necessary or appropriate to effectuate the Sale and (ii) consummate the transactions contemplated by the Copper Purchase Agreement. Except as otherwise provided in the Sale Order, no consents or approvals, other

than the Sale Order and those expressly provided for in the Copper Purchase Agreement and associated agreements, are required for the Debtor, its subsidiaries, or affiliates to consummate the transactions contemplated by the Copper Purchase Agreement. 28. The Debtor has demonstrated good, sound and sufficient business purpose and

justification, and it is a reasonable exercise of its business judgment, to (i) transfer and sell the Purchased Securities and Assets (including the agreements to be assumed pursuant to the terms thereof) on the terms and conditions set forth in the Copper Purchase Agreement; and (ii) consummate all transactions contemplated by the Copper Purchase Agreement. The sale of the Purchased Securities and Assets is in the best interests of the Debtor, its estate, its creditors and other parties in interest. 29. The provisions of Section 363 of the Bankruptcy Code have been complied with

and are applicable to the Sale and the Purchased Securities and Assets. The Debtor may consummate the transactions and transfer the Purchased

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Securities and Assets free and clear of all Interests, except for those specific liabilities expressly assumed by the Buyer under the Copper Purchase Agreement, because one or more of the standards set forth in Section 363(f)(1)-(5) of the Bankruptcy Code has been satisfied. All parties with Interests in the Purchased Securities and Assets who did not object to the Motion

5 6 7 8 9 10 11 12 Agreement, with the same validity, enforceability, priority, force and effect that they now have 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 of a plan of reorganization. The Sale does not constitute a sub rosa Chapter 11 plan, an element 28
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and the relief requested therein, or who withdrew their objections to the transactions, are deemed to have consented pursuant to section 363(f)(2) of the Bankruptcy Code. All parties with Interests in the Purchased Securities and Assets who did object to the Motion and the relief requested therein fall within one or more of the other subsections of section 363(f) of the Bankruptcy Code and are adequately protected by having their Interests attach solely and exclusively to the consideration being paid by the Buyer pursuant to the Copper Purchase

as against the Purchased Securities and Assets. 31. Except as otherwise provided in the Copper Purchase Agreement, consummation

of the transactions as contemplated by the Copper Purchase Agreement will not subject the Buyer to any debts, liabilities, obligations, commitments, responsibilities or claims of any kind or nature whatsoever, whether known or unknown, contingent or otherwise, existing as of the date hereof or hereafter arising, of or against the Debtor, any subsidiary or affiliate of the Debtor, or any other person by reason of such transfers and assignments, including, without limitation, any debts, liabilities, obligations, commitments, responsibilities or claims of any kind or nature whatsoever based on any theory of antitrust or successor or predecessor or transferee liability. 32. To the extent that the Purchased Securities and Assets could be considered to

constitute all or substantially all of the assets of the Debtor, substantial and sufficient business exigencies exist that permit the Purchased Securities and Assets to be sold outside of the context

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of such a plan or a liquidation of the Debtor, as it does not and does not propose to: (i) impair or restructure existing debt of, or equity interests in, the Debtor; (ii) impair or circumvent voting rights with respect to any future plan proposed by the Debtor; (iii) circumvent Chapter 11 plan safeguards, such as those set forth in Sections 1125 and 1129 of the Bankruptcy Code; or (iv)

5 6 7 8 9 10 11 12 Assumed Agreements), and/or to transfer, sell and deliver to the Buyer all of the Debtor's 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 conditions such assignment or transfer. 28
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classify claims or equity interests, compromise controversies or extend debt maturities. Assumption and Assignment to the Buyer of Executory Contracts and Unexpired Leases and Assignment to the Buyer of Other Agreements and Rights. 33. The Debtor is authorized, in accordance with sections 105(a), 363 and 365

of the Bankruptcy Code, to: (a) assume and assign to the Buyer, effective upon the Closing, the agreements contemplated by the Copper Purchase Agreement to be so assumed and assigned (the

right, title and interest in and to the Assumed Agreements, free and clear of all Interests; and (b) execute and deliver to the Buyer such documents or other instruments as may be necessary to assign and transfer the Assumed Agreements to the Buyer. 34. To the best of the Debtors knowledge, no cure amounts exist as to any of the

Assumed Agreements. Accordingly, the foregoing shall constitute full and complete satisfaction of all of the Debtor's requirements as described in Section 365(b)(1)(A) and (B) and Section 365(f)(2) of the Bankruptcy Code necessary to enable the Debtor to assign, or to assume and assign, the Assumed Agreements to the Buyer. 35. The Assumed Agreements shall be transferred to, and remain in full force and

effect for the benefit of, the Buyer, in accordance with their respective terms, notwithstanding any provision in any such Assumed Agreement (including provisions of the type described in sections 365(b)(2), (c)(1) and (f)(1) of the Bankruptcy Code) which prohibits, restricts or

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36.

The Buyer has demonstrated adequate assurance of future performance under the

Assumed Agreements in satisfaction of the provisions of Section 365(b)(1)(C) of the Bankruptcy Code. 37. Upon assignment of the Assumed Agreements to the Buyer upon the Closing, no

5 6 7 8 9 10 11 12 provisions of the Assumed Agreements. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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default (nor any claims or liabilities relating to any actions or omissions taken as of or prior to such assignment) shall exist, or be deemed to exist, under any Assumed Agreement and no nondebtor party to any Assumed Agreement shall be permitted to declare a default by the Buyer as a result of the Debtor's financial condition, bankruptcy, or failure to perform any of its obligations under the Assumed Agreement. Upon entry of the Sale Order and assumption and assignment of the Assumed Agreements, the Buyer shall be deemed in compliance with all terms and

Other Provisions. 38. Good cause, valid reasons and the record of this case amply support entry of the

Sale Order. The Sale Order constitutes a final and appealable order within the meaning of 28 U.S.C. 158(a). The Sale Order is, in accordance with its terms, effective and enforceable immediately upon entry, and its provisions are self-executing, and the automatic stay of orders authorizing the sale, use or lease of property of the estate and the assumption and assignment of executory contracts and unexpired leases shall not apply to the Sale Order. 39. To any extent necessary under Bankruptcy Rules 6004(h) and 6006(d) and 9014

and Rule 54(b) of the Federal Rules of Civil Procedure, as made applicable by Bankruptcy Rule 7054, the Court expressly finds that there is no just reason for delay in implementing the Sale Order. Accordingly, there are compelling facts and circumstances necessitating a waiver of the stay of Bankruptcy Rules 6004(h) and 6006(d). 40. The Court finds that good cause exists to approve the Proposed Sale free of

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transfer or similar tax liability pursuant to section 1146(c) of the Bankruptcy Code. Although no plan has yet been confirmed or proposed in the Debtors case, the Sale is necessary and intrinsic to the Debtors ability to propose and ultimately confirm any plan in its Chapter 11 case. Without approval of the Sale, the Debtor would be forced to immediately liquidate. Accordingly,

5 6 7 8 9 10 11 12 41. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 copy of the Sale Order, which, once filed, registered or otherwise recorded, shall constitute 28
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approval of the Sale free of transfer or similar taxes pursuant to section 1146(c) is necessary and appropriate in this case. The Sale concerns the purchase and sale of the entirety of the Debtors UK, German and French subsidiaries and is, without question, necessary to the Debtors ability to propose and confirm any plan of any nature in its Chapter 11 case. It is the type of transfer that is eligible for tax relief under section 1146(c) and is not an ordinary course of business or nondebtor transaction excluded from the scope of section 1146(c). On or before the Closing Date, each of the Debtors creditors is authorized and

directed to execute such documents and take all other actions as may be necessary to release its Interests in the Purchased Securities and Assets, if any, as such Interests may have been recorded or filed, or as they may otherwise exist. 42. If any person or entity that has filed financing statements, mortgages, mechanics

liens, lis pendens or other documents or agreements evidencing Interests with respect to the Debtor and/or the Purchased Securities and Assets shall not have delivered to the Debtor and the Buyer prior to the Closing Date, in proper form for filing and executed by the appropriate parties, termination statements, instruments of satisfaction, releases of all Interests which the person or entity has with respect to the Debtor and/or the Purchased Securities and Assets or otherwise, then: (i) the Debtor is hereby authorized to execute and file such statements, instruments, releases and other documents on behalf of the person or entity with respect to such assets and contracts; and (ii) the Buyer is hereby is authorized to file, register or otherwise record a certified

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conclusive evidence of the release of all Interests in the Purchased Securities and Assets as of the Closing Date of any kind or nature whatsoever. 43. The terms and provisions of the Copper Purchase Agreement and the Sale Order

shall be binding in all respects upon, and shall inure to the benefit of, the Debtor, its estate, the 5 6 7 8 9 10 11 12 parents and affiliates, or any of its respective officers, directors, members, managers, employees, 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 adverse effect on (i) the Debtors estate or (ii) the Break-Up Fee or Expense Reimbursement 28
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Buyer and its respective affiliates, successors and assigns, and any affected third parties and, notwithstanding any subsequent appointment of any trustee(s), such terms and provisions likewise shall be binding. 44. All persons who purport to hold claims or rights to assert any cause of action

against or Interests in the Debtor are forever barred, estopped and permanently enjoined from asserting or prosecuting any claims or causes of action against the Buyer, direct and indirect

equity holders, lenders, attorneys or advisors, arising out of or in connection with the Sale. 45. After the Closing Date, no person or entity, including, without limitation, any

federal, state or local taxing authority, may: (a) attach or perfect a lien or security interest against any of the Purchased Securities and Assets on account of; or (b) collect or attempt to collect from the Buyer or any of its affiliates, any tax (or other amount alleged to be owing by the Debtor) (i) for any period commencing before and concluding prior to or after the Closing Date, or (ii) assessed prior to and payable after the Closing Date, except as otherwise expressly provided in the Copper Purchase Agreement. 46. The Copper Purchase Agreement and any related agreements, documents or other

instruments may be modified, amended or supplemented by the parties thereto, in a writing signed by such parties, and in accordance with the terms thereof, without further order of this Court, provided that any such modification, amendment or supplement does not have a material

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payable to Zinc (or to its designee in accordance with written instructions from Zinc) accordance with the terms of the Sale Order. 47. Nothing contained in any Chapter 11 plan confirmed in this case or any order

confirming any such plan or in any other order in this case (including any order entered after any 5 6 7 8 9 10 11 12 and approved in its entirety (including any amendment, modification or supplement made 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 /// 28
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conversion of this case to a case under Chapter 7 of the Bankruptcy Code) shall alter, conflict with, or derogate from, the provisions of the Copper Purchase Agreement or the Sale Order. 48. The failure specifically to include any particular provisions of the Copper

Purchase Agreement in the Sale Order (or any amendment, modification or supplement made pursuant to paragraph 46 above) shall not diminish or impair the effectiveness of such provisions, it being the intent of the Court that the Copper Purchase Agreement be authorized

pursuant to paragraph 46 above), subject only to the provisions of the Sale Order. 49. Pursuant to the terms of the Bidding Procedures Order, within five (5) business

days after the Closing, the Debtor shall pay to Zinc (or to its designee in accordance with written instructions from Zinc), from the Purchase Price by wire transfer, the Break Up Fee of $175,000 and, subject to proof by Zinc, an Expense Reimbursement of up to $150,000, with payment of the foregoing sums to constitute Zincs sole and exclusive remedy as a result of the Debtors /// /// /// /// /// ///

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termination of its purchase agreement with Zinc (which amounts are exclusive of any amounts payable to Zinc in its capacity as DIP Lender pursuant to the terms of the DIP Order and related financing documents). IT IS SO ORDERED.

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 DATED: December 17, 2007 27 28

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###

United States Bankruptcy Judge

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 [X] STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

PROOF OF SERVICE

I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action; my business address is 3424 Carson Street, Suite 350, Torrance, California, 90503. On December 6, 2007 I served the foregoing document described as: Finding of Facts and Conclusions of Law in Support of Order Pursuant to Sections 105, 363(b(, 363 (f), and 365 of Title 11 of the United States Code (I) Approving Sale of Certain of the Debtors Assets Free and Clear of all Liens, Claims, Encumbrances and Interests; (II) Approving of Debtors Assumption and Assignment of Certain Executory Contracts; and (III) Waiving the 10-Day Stay Periods set Forth in Bankruptcy Rules 6004(h) and 6006(d) on the interested parties in this action by placing the original thereof enclosed in a sealed envelope and by causing such envelope with postage thereon fully prepaid to be placed in the United States mail, at Torrance, California, addressed as follows: See Service List Attached (BY MAIL) As follows: I am "readily familiar" with the firm's practice of collection and processing correspondence for mailing. Under that practice it would be deposited with U.S. postal service on that same day with postage thereon fully prepaid at Torrance, California in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. Executed on December 6, 2007, at Torrance, California.

20 [X] 21 22 23 24 25 26 27 28
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Federal:

I declare that I am employed in the office of a member of the bar of this court at whose direction the service was made.

_________/S/_______ Michelle Carpenter

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1 MTI Technology Corporation 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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MTI Technology Corporation Attn.: Thomas P. Raimondi, Jr 15641 Read Hill Ave., Suite 200 Tustin, CA 92780 United States Trustee Attn.: Frank Cadigan Terry Biers 411 West Fourth Street, Suite 904 Santa Ana, CA 92701-4593 Robert Opera, Esq. Winthrop Couchot, P.C. 660 Newport Center Drive, 4th Floor Newport Beach, CA 92660 Bingham, McCutchen, LLP Attn.: William F. Govier 355 South Grand Ave. Los Angeles, CA 90071 Robert L. Eisenbach III Cooley Godward Kronish LLP 101 California Street, 5th Floor San Francisco, CA 94111-5800

18 European Assets

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Findings of Fact and Conclusions of Law re Order Approving Sale of

SERVICE LIST FOR ENTERED ORDER

SERVED ELECTRONICALLY Clarkson, Gore & Marsella 3424 Carson Street, Suite 350 Torrance CA 90503 Robert Opera, Esq. Winthrop Couchot, P.C. 660 Newport Center Drive, 4th Floor Newport Beach, CA 92660 United States Trustee Attn.: Frank Cadigan Terry Biers 411 West Fourth Street, Suite 9041 Santa Ana, CA 92701-4593 Robert L. Eisenbach III Cooley Godward Kronish LLP 101 California Street, 5th Floor San Francisco, CA 94111-5800

SERVED BY U.S. MAIL MTI Technology Corporation Attn.: Thomas P. Raimondi, Jr 15641 Read Hill Ave., Suite 200 Tustin, CA 92780 William F. Govier Bingham, McCutchen, LLP 335 S, Grand Ave. Los Angeles, CA 90071

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Bankruptcy Noticing Center 2525 Network Place, 3rd Floor Herndon, Virginia 20171-3514 District/off: 0973-8 Case: 07-13347

CERTIFICATE OF SERVICE
User: admin Form ID: pdf031 Page 1 of 1 Total Served: 20 Date Rcvd: Dec 17, 2007

The following entities were served by first class mail on Dec 19, 2007. db +MTI Technology Corporation, 15641 Red Hill Avenue, Suite 200, Tustin, CA 92780-7323 aty +Clarkson, Gore & Marsella, APLC, 3424 Carson St Ste 350, Torrance, CA 90503-5716 aty +Eve A Marsella, 3424 Carson St Ste 350, Torrance, CA 90503-5716 aty +Gilbert B. Weisman 2, Becket & Lee LLP, 16 General Warren Blvd., P.O. Box 3001, Malvern, PA 19355-0701 aty +Ivan L Kallick, 11355 W Olympic Blvd, Los Angeles, CA 90064-1631 aty +Lesley A Hawes, 444 S Flower St 8th Fl, Los Angeles, CA 90071-2901 aty +Manatt Phelps & Phil, 11355 W Olympic Blvd, Los Angeles, CA 90064-1631 aty +Mark A Shaiken, 1201 Walnut St Ste 2700, Kansas City, MO 64106-2139 aty +Michael B Reynolds, Snell & Wilmer LLP, 600 Anton Blvd Ste 1400, Costa Mesa, CA 92626-7689 aty +Richard H Golubow, Winthrop Couchot, 660 Newport Center Drive Ste 400, Newport Beach, CA 92660-6427 aty +Robert E Opera, 660 Newport Center Dr Ste 400, Newport Beach, CA 92660-6427 aty +Robert L Eisenbach, III, 101 Califonia St 5th Fl, San Francisco, CA 94111-5800 aty +Scott C Clarkson, 3424 Carson St Ste 350, Torrance, CA 90503-5716 aty Sheryl L. Moreau, Missouri Dept of Revenue, General Counsels Office, 301 W High St Rm 670, POB 475, Jefferson City, MO 65105-0475 ust +United States Trustee (SA), 411 W Fourth St., Suite 9041, Santa Ana, CA 92701-8000 cr American Express Travel Related Svcs Co Inc Corp C, C/O Becket & Lee LLP, PO Box 3001, Malvern, PA 19355-0701 cr +Iron mountain Information Management Inc, C/O R Frederick Linfesty, 745 Atlantic Ave 10th floor, Boston, MA 02111-2735 cr Missouri Department of Revenue, c/o Bankruptcy Unit, Attn Sheryl L Moreau, POB 475, Jefferson City, MO 65105-0475 cr +Office of Unemployment Compensation Tax Services (, Department of Labor and Industry, Commonwealth of Pennsylvania, 333 Market St 16th Fl, Harrisburg, PA 17101-2234 op +Winthrop Couchot, PC, 660 Newport Center Drive, Ste 400, Newport Beach, CA 92660-6427 The following entities were served by electronic transmission. NONE. intp cr crcm cr intp cr ***** BYPASSED RECIPIENTS (undeliverable, * duplicate) ***** Copper Holdings LLC Frank Parsons Paper Company, Inc Official Committee of Unsecured Creditors Rockwell Collins, Inc The Canopy Group, Inc Verizon Business Global LLC TOTALS: 6, * 0 Addresses marked + were corrected by inserting the ZIP or replacing an incorrect ZIP. USPS regulations require that automation-compatible mail display the correct ZIP. TOTAL: 0

I, Joseph Speetjens, declare under the penalty of perjury that I have served the attached document on the above listed entities in the manner shown, and prepared the Certificate of Service and that it is true and correct to the best of my information and belief. Meeting of Creditor Notices only (Official Form 9): Pursuant to Fed. R. Bank. P. 2002(a)(1), a notice containing the complete Social Security Number (SSN) of the debtor(s) was furnished to all parties listed. This official court copy contains the redacted SSN as required by the bankruptcy rules and the Judiciarys privacy policies.

Date: Dec 19, 2007

Signature: