**Exhibit 10.23**

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**Confidential Portions of this documenthave been redacted and filed separately with the Commission.[***] symbolizes language omitted pursuant to an application for ConfidentialTreatment.**

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**AMENDMENTNO. 1TOMANUFACTURING SERVICES AGREEMENT**

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THIS AMENDMENT NUMBER 1(“Amendment”) to that certain Manufacturing Services****Agreement,dated as of November 23, 2004 (the “Agreement”), is made andentered into as of this 30th day of May, 2005, by and between Overland Storage, Inc.,a California corporation, having a place of business at 4820 Overland Drive,San Diego, CA  92123 (“Overland”),and SANMINA-SCI Corporation, aDelaware corporation, on behalf of itself and its wholly-owned subsidiaries andhaving its principal place of business at 2700 North First Street, San Jose,California 95134, (“SANMINA-SCI”).

 

**RECITALS**

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NOW, THEREFORE, inconsideration of the mutual promises, covenants and other terms and conditionscontained in this Amendment and for other good and valuable consideration, thereceipt of which is acknowledged by both parties, the parties agree as follows:

 

1.                                       **Amendment****.**  The Agreement is hereby amended and modifiedso that a new Section 8.5 and 8.6 are added as follows: 

 

8.5                                 **Standard of Care**.     Withoutlimiting the generality of Sections 8.1, 8.2, 8.3 and 8.4 with respect toSANMINA-SCI’S care procedures for CUSTOMER Furnished Items or the insurancerequirements of Section 10 pertaining to insuring CUSTOMER FurnishedItems, SANMINA-SCI shall use [***] efforts to protect all CUSTOMER FurnishedItems and CUSTOMER Furnished Components from damage, pilferage, electrostaticdischarge (ESD), etc.  CUSTOMER andSANMINA-SCI acknowledge and agree that SANMINA-SCI shall not be responsible forany loss of or damage to CUSTOMER Furnished Components provided that such lossis less than [***]. SANMINA-SCI will, however, be responsible for any loses that[***].

 

8.6                                 **Extent of Liability**. Subject to the limits defined in section 8.5 the parties agree thatSANMINA-SCI’s liability for any CUSTOMER Furnished Item is limited to [***].

 

2.                                       **Terms; No Other Changes**.  Any capitalized terms contained in thisAmendment and not defined in this Amendment have the meanings for such terms asare set forth in the Agreement. Except as expressly provided in this Amendment,the Agreement remains un-amended and unmodified and in full force and effect.

 

3.                                       **General**. This Amendment contains the entire agreement between the parties withrespect to the subject matter hereof and supersedes any prior agreements,negotiations, or representations between the parties with respect to thesubject matter hereof, whether written or oral. This Amendment may be modified only by a subsequent written agreementsigned by the parties.  If any provisionof this Amendment is held to be unenforceable, the remaining provisions willcontinue unaffected.

 

4.                                       **Law**. This Amendment will be governed by and construed in accordance with thelaws of the State of California, applicable to contracts entered into, andwholly to be performed within the State of California (regardless of the choiceof law principles of California or any other jurisdiction).

 

IN WITNESS WHEREOF, theparties to this Amendment have caused this Amendment to be executed by theirduly authorized representatives as of the Effective Date.

 
| **Overland Storage, Inc.:** | **SANMINA-SCI Corporation:** |
|----------------------------------|------------------------------|
| ** **                       | ** **                   |
| By:                              | /s/  V.A. LoForti            |   | By: | /s/  Donald W. Johnson |   |
|                             | Vernon  A. LoForti,          |   | Name:  Donald W. Johnson |
|                             | Vice  President and CFO      |   | Title:  Executive Vice President |
|                                  |                              |  |  |  |  |

 

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