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                                                                   EXHIBIT 10.8


                                               CONFIDENTIAL TREATMENT REQUESTED

              TRAVAN-TM- VR(2)-TM- ASIC LICENSE AND SUPPLY AGREEMENT

         This Agreement is effective February 25, 1999 ("Effective Date"),
between Imation Corp., incorporated under the laws of the state of Delaware
and having a place of business at 1 Imation Place, Oakdale, Minnesota
55128-3414, USA ("Imation"), and Overland Data, Inc., having a place of
business at 8975 Balboa Avenue, San Diego, CA 92123 ("Overland Data").

         Whereas, Imation has offered licenses to several manufacturers to
allow them to manufacture and sell drives for use with Travan-TM- data
cartridges, including Travan 8 GB, Travan NS-TM- 8, Travan 20 GB, and Travan
NS 20, and which licenses Imation may extend to include a generation beyond
Travan 20 GB and Travan NS 20, which is expected to have a capacity of at
least *** (compressed);

         Whereas, Overland Data has developed and owns intellectual property
relating to the VR(2)-TM- data encoding and decoding channel technology for
linear magnetic tape formats, including various ASIC designs and embodiments
of the VR(2) Technology;

         Whereas, Imation desires an ASIC having the VR(2) Technology for
incorporation into Next Generation Travan Drives having a capacity of at
least *** (compressed);

         Whereas, Overland Data desires to supply such ASIC to Imation and
Imation's licensees;

         Whereas, Overland Data desires to license Imation's intellectual
property to manufacture libraries for Next Generation Travan Cartridges
having a capacity of at least ***; and

         Whereas, Imation is willing to grant such license under the terms
herein;

         Now, therefore, the Parties agree as follows:

1.       DEFINITIONS

         1.1      "Compliance Test" means test activities designed to test for
                  compliance with the format for the Next Generation Travan
                  Cartridges to ensure


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                                               CONFIDENTIAL TREATMENT REQUESTED


                       OVERLAND DATA INC. CONFIDENTIAL

                  interchangeability of Next Generation Travan Cartridges
                  written on Next Generation Travan Drives manufactured by
                  different manufacturers.

         1.2      "Cartridge" means a belt-driven tape cartridge which is driven
                  and controlled through a single drive roller and has a linear
                  recording format with tracks extending longitudinally along
                  the tape and written in a serpentine manner.

         1.3      "VR(2) Technology" means the data encoding and decoding
                  channel technology for linear magnetic tape formats
                  developed by Overland Data, and includes solid state
                  circuits embodied in semiconductor chips, associated
                  specifications, designs, drawings, data, test
                  qualification, and other documented technical and
                  application information related thereto.

         1.4      "Imation Licensed IP" means the intellectual property rights
                  which are listed in Exhibit A, which may be added to from time
                  to time by Imation.

         1.5      "Next Generation Travan Cartridge" means the next and future
                  generations of Travan Cartridges, including (1) Travan NS
                  Cartridge after the Travan NS 20 Cartridge, and (2) Travan
                  Cartridge after the Travan 20 GB Cartridge, and (3) off-path
                  Travan technology based Cartridges, all of which incorporate
                  Imation Licensed IP and are presently expected to have a
                  capacity of at least *** (compressed). These capacities and
                  formats will be set by Imation with input from Overland Data
                  and Imation's Next Generation Travan Drive licensees.

         1.6      "Travan VR(2) ASIC" means an Application Specific Integrated
                  Circuit ("ASIC") embodying the VR(2) Technology, which is a
                  modification of existing ASIC designs of Overland Data
                  specifically adapted for incorporation into Next Generation
                  Travan Drives, such ASIC specification for which is attached
                  as Exhibit B. The parties may modify by mutual written
                  agreement such applicable specifications (the "REVISED PRODUCT
                  SPECIFICATIONS"). Upon execution of such mutual written
                  agreement, the Revised Product Specifications will be
                  incorporated by reference herein and attached as EXHIBIT B.

         1.7      "Next Generation Travan Drive" means a drive which reads and
                  writes data onto a Next Generation Travan Cartridge.


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                                               CONFIDENTIAL TREATMENT REQUESTED


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         1.8      "Next Generation Travan Library" means an automated system
                  using at least one Next Generation Travan Drive to access
                  multiple Next Generation Travan Cartridges.

         1.9      "Party" means Imation or Overland Data.

         1.10     "Trademark Kit" means the trademark artwork and other
                  trademark-related information provided by Imation, which may
                  be updated from time to time by Imation.

         1.11     "Imation Trademarks" means Imation's Travan and Travan NS
                  trademarks included in the Trademark Kit.

         1.12     "Overland Trademark" means the VR(2) mark adopted by Overland
                  Data in connection with the VR(2) Technology.

2.        TRAVAN VR(2) ASIC DESIGN

         2.1      Overland Data and Imation have determined that it is necessary
                  and advantageous to incorporate the VR(2) Technology into a
                  Travan VR(2) ASIC specifically designed for Next Generation
                  Travan Drives. Overland Data will design and provide the
                  Travan VR(2) ASIC in accordance with the terms of this Section
                  2.

         2.2      Overland Data will design the Travan VR(2) ASIC in accordance
                  with Exhibit B. The parties may modify by mutual written
                  agreement such applicable specifications (the "REVISED PRODUCT
                  SPECIFICATIONS"). Upon execution of such mutual written
                  agreement, the Revised Product Specifications will be
                  incorporated by reference herein and attached as EXHIBIT B.
                  Imation will pay Overland Data the amounts set forth below for
                  such design:

                                    ***

         2.3      Milestone payments by Imation set forth in Section 2.2 will be
                  due within 5 days of receipt by Imation of an invoice from
                  Overland Data. Imation will make such payments by wire
                  transfer to the account specified by Overland Data in such
                  invoice.


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         2.4      Overland Data will teleconference or meet with Imation every
                  two weeks to update Imation on the progress of the design and
                  commercialization of the Travan VR(2) ASIC prior to launch in
                  commercial volumes.

         2.5      Overland Data will devote the level of resources reasonably
                  required to meet the schedule outlined in Section 2.2.

         2.6      ***

3.       SUPPLY & LICENSE

         3.1      Provided that each party successfully performs its
                  obligations under Section 2.2, Overland Data will sell the
                  Travan VR(2) ASIC to Imation and Imation's approved
                  licensees of Next Generation Travan Drives, a list of such
                  approved licensees is attached as Exhibit D. Imation will
                  update Exhibit D from time to time as approved licensees
                  are added and/or removed by Imation. Overland Data will not
                  knowingly sell the Travan VR(2) ASIC to any third party not
                  listed in Exhibit D. Imation and each of Imation's
                  licensees desiring such Travan VR(2) ASICs will enter a
                  supply agreement with Overland Data specifying the prices
                  and other terms and conditions of supply, provided that
                  Imation and such Imation licensees agree not (i) to reverse
                  engineer, reverse assemble, decompile or otherwise attempt
                  to derive the underlying design, structure, organization,
                  algorithms, and ideas embodied in the Travan VR(2) ASICs or
                  (ii) to create any derivative works therefrom. Such supply
                  agreements between Overland Data and Imation's licensees
                  will require that the licensees not resell the Travan VR(2)
                  ASIC to third parties except as part of Next Generation
                  Travan Drives. Commercially reasonable efforts will be made
                  to ensure that the timing of such sales will be such that
                  the chips may be incorporated into Next Generation Travan
                  Drives in time to allow commercial launch of such drives no
                  earlier than *** but no later than ***, in volumes
                  sufficient to meet market demand. *** Pursuant to the
                  execution of a supply agreement between Overland Data and
                  Imation, Overland Data will supply to Imation up to ***
                  Travan VR(2) ASICs per year during the term of their supply
                  agreement *** for evaluation and testing purposes,
                  provided that Imation shall not (x) reverse engineer,
                  reverse assemble, decompile or otherwise attempt to derive
                  the underlying

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                                               CONFIDENTIAL TREATMENT REQUESTED


                       OVERLAND DATA INC. CONFIDENTIAL

                  design, structure, organization, algorithms, and ideas
                  embodied in the ASICs, or (y) to create any derivative
                  works therefrom. The parties acknowledge and agree that
                  pricing for the Travan VR(2) ASIC is subject to the execution
                  of a binding foundry agreement (the "FOUNDRY AGREEMENT")
                  between Overland Data and its semiconductor foundry
                  licensed to produce the Travan VR(2) ASIC design. As such, no
                  pricing for the Travan VR(2) ASIC will be available until
                  such time as the Foundry Agreement is executed. The parties
                  acknowledge and agree that Overland Data will endeavor to
                  achieve the price targets for specific volumes set forth in
                  Exhibit C. Imation agrees and acknowledges that such price
                  targets do not constitute any binding obligation,
                  representation or warranty of Overland Data to supply
                  Travan VR(2) ASICs to anyone at such prices and volumes.

         3.2      Imation grants to Overland Data a *** license, under Imation
                  Licensed IP to make, have made, import, use, offer for sale,
                  and sell Next Generation Travan Libraries, including Next
                  Generation Travan Drives provided therein. Imation grants to
                  Overland Data a *** license, under Imation Licensed IP to
                  import, offer for sale, and sell Next Generation Travan Drives
                  for single Cartridge use provided such drives are obtained
                  from suppliers licensed by Imation to offer for sale and sell
                  such drives. Otherwise, Overland Data is not licensed for Next
                  Generation Travan Drives which are not incorporated into Next
                  Generation Travan NS Libraries. ***

         3.3      If Overland Data manufactures Next Generation Travan
                  Libraries, Overland Data will sell such Libraries to Imation
                  upon request by Imation at prices and terms to be agreed to by
                  the Parties, provided that such prices and terms for such
                  Libraries are ***.

         3.4      If (i) Overland Data manufactures Next Generation Travan
                  Libraries and (ii) Imation manufactures Next Generation Travan
                  Cartridges, Imation will sell library packs of such cartridges
                  to Overland Data upon request by Overland Data for: (a)
                  pack-in of Imation-brand Next Generation Travan Cartridges
                  with Next Generation Travan Libraries sold by Overland Data,
                  and (b) resale by Overland Data of Imation-brand Next
                  Generation Travan Cartridges. ***


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                                               CONFIDENTIAL TREATMENT REQUESTED


                       OVERLAND DATA INC. CONFIDENTIAL

4.       COMPLIANCE TEST

         4.1      Imation will provide to Overland Data a Compliance Test
                  comprising a test suite for Overland Data to self-administer.
                  Subject to Article 4.4, Overland Data will not sell Next
                  Generation Travan Libraries containing drives which do not
                  pass such Compliance Test.

         4.2      If the Compliance Test requires use of reference tapes,
                  Imation will provide Overland Data with a tape set comprising
                  reference tapes and sample tapes. The reference tapes will
                  include reference sequences recorded according to the Next
                  Generation Travan Cartridge format. The sample tapes will be
                  provided with servo bursts and track ID's. The Compliance
                  Tests will specify data sequences to be recorded on the sample
                  tapes.

         4.3      If at any time Imation has reason to believe that Overland
                  Data's drives in its Next Generation Travan Libraries no
                  longer pass the Compliance Test, Imation shall so notify
                  Overland Data. Overland Data shall then re-administer the
                  Compliance Test to its drives and shall notify Imation
                  promptly of the results of the Compliance Test. If Overland
                  Data's drives fail the Compliance Test, Overland Data will (i)
                  immediately cease selling such drives and (ii) shall not
                  resume selling such drives until they are retested under the
                  supervision of an independent Compliance Verifier and such
                  Compliance Verifier determines that such drives again pass the
                  Compliance Test; and (iii) pay the Compliance Verifier's fee.
                  If Overland Data's drives pass the Compliance Test, Imation
                  shall pay Overland Data for any costs and fees needed to
                  administer the Compliance Test.

         4.4      If Imation does not provide the Compliance Test at least
                  ninety (90) days before Overland Data is otherwise prepared to
                  sell its Next Generation Travan Library, Overland Data may
                  sell the library until ninety (90) days after the date Imation
                  provides the Compliance Test to Overland Data. If Overland
                  Data makes sales under this Section 4.4, Overland Data shall
                  ensure that its drives in its libraries pass the Compliance
                  Test within ninety (90) days of delivery of Compliance Test to
                  Overland Data. If Overland Data's drives in its libraries do
                  not pass the Compliance Test within that ninety (90) day
                  period, Overland Data shall immediately cease


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                                               CONFIDENTIAL TREATMENT REQUESTED


                       OVERLAND DATA INC. CONFIDENTIAL

                  selling such libraries, and shall not resume selling such
                  libraries until the drives are re-tested and pass the
                  Compliance Test in accordance with the provisions of
                  Section 4.3.

         4.5      Overland Data shall only use the reference tapes for its own
                  internal purposes and shall return such tapes upon termination
                  of this Agreement.

         4.6      While Imation believes that the Compliance Test is reasonably
                  comprehensive, Overland Data acknowledges that the Compliance
                  Test does not cover all possible aspects of compliance and
                  does not exercise all possible combinations or permutations of
                  features of the Next Generation Travan Cartridge format.
                  Imation makes no warranty that successful completion of the
                  Compliance Test guarantees that sample drives are fully
                  compliant with the Next Generation Travan Cartridge format or
                  the Next Generation Travan Drive specification, and Imation
                  disclaims any liability in that respect. However, Imation
                  acknowledges and agrees that Overland Data is in compliance
                  with the terms and conditions of Sections 4 and 5 of this
                  Agreement when Overland Data's drives pass any Compliance
                  Tests provided by Imation pursuant to Section 4.1.

         4.7      WHILE IMATION SHALL ENDEAVOR TO PROVIDE REFERENCE TAPES,
                  SAMPLE TAPES, AND INSTRUCTIONS FOR WRITING THE SAMPLE TAPES
                  THAT ARE COMPLIANT WITH NEXT GENERATION TRAVAN NS CARTRIDGE
                  FORMAT AND DRIVE SPECIFICATIONS, IMATION SHALL NOT BE LIABLE
                  FOR ANY LOSS, HOWEVER ARISING, RESULTING FROM ANY DEFECTS OF
                  SUCH REFERENCE OR SAMPLE TAPES, INCLUDING TAPE MEDIA DEFECTS,
                  THAT MAY BE PRESENT, AND IMATION'S SOLE OBLIGATION IN RESPECT
                  OF SUCH DEFECTS SHALL BE TO CORRECT THEM IN A TIMELY MANNER,
                  INCLUDING, WHERE APPROPRIATE, TAPE MEDIA REPLACEMENT.

5.       TRADEMARK USE AND QUALITY CONTROL

         5.1      Imation hereby grants to Overland Data a non-exclusive license
                  under Imation's rights in the Imation Trademarks to use the
                  Imation Trademarks


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                                               CONFIDENTIAL TREATMENT REQUESTED


                       OVERLAND DATA INC. CONFIDENTIAL

                  in connection with Next Generation Travan Libraries made or
                  sold by Overland Data, provided, however, that such use
                  shall be in accordance with the specifications and
                  requirements set forth in the Compliance Test.

         5.2      Overland Data will at all times use all reasonable efforts to
                  ensure that all products in relation to which it uses the
                  Imation Trademarks conform to the guidelines provided in the
                  Trademark Kit.

         5.3      Overland Data is authorized to use the Imation Trademarks only
                  in connection with the promotion and sale of Next Generation
                  Travan Libraries which contain Next Generation Travan Drives
                  or Next Generation Travan Drives purchased through a third
                  party for the purpose of resale as stand-alone units which
                  satisfy the Compliance Test.

         5.4      Overland Data shall cooperate with Imation in making or
                  facilitating any governmental registrations or submissions
                  that are necessary to protect the Imation Trademarks and
                  Imation's rights therein, including, but not limited to,
                  registration of Overland Data as a registered user of the
                  Imation Trademarks. Upon termination of Overland Data's right
                  to use the Imation Trademarks under this Agreement, Overland
                  Data shall cooperate with Imation in revocation of any such
                  registered user registration.

         5.5      Overland Data shall comply with all applicable laws and
                  governmental regulations pertaining to the proper use and
                  designation of trademarks.

         5.6      Overland Data admits the validity of the Imation Trademarks.

         5.7      Imation does not warrant or represent that the use of the
                  Imation Trademarks shall be free from infringement of third
                  party trademarks. Imation does represent, however, that it is
                  not aware of any such infringement.

         5.8      Overland Data further agrees not to use or register in any
                  country any trademarks resembling, diluting, or confusingly
                  similar to the Imation Trademarks. Whenever the attention of
                  Overland Data is called by Imation to any such resemblance,
                  dilution, confusion, or risk of confusion, Overland Data
                  agrees to take appropriate steps immediately to remedy or
                  avoid such situations.


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                                               CONFIDENTIAL TREATMENT REQUESTED


                       OVERLAND DATA INC. CONFIDENTIAL

         5.9      Overland Data shall give Imation notice of any known or
                  presumed infringements of the Imation Trademarks, and Overland
                  Data shall give Imation full cooperation in the protection of
                  the Imation Trademarks. If Imation decides to enforce the
                  Imation Trademarks against an infringer, all costs incurred
                  and all recoveries made shall be for the account of Imation.

         5.10     Overland Data agrees to show the Imation Trademarks on each of
                  its Next Generation Travan Libraries and related materials.
                  The size of the display of Imation Trademarks will be no less
                  than 75% of the size of the VR(2) Trademark on such libraries
                  and related materials.

         5.11     Overland Data hereby grants to Imation a non-exclusive license
                  under Overland Data's rights in the Overland Trademark to use
                  the Overland Trademark in connection with the advertising,
                  marketing, promoting and distribution of Next Generation
                  Travan Drives, Next Generation Travan Cartridges, and Next
                  Generation Travan Libraries made or sold by Imation. This
                  trademark license to Imation shall include the right to
                  sublicense to Imation's licensees of such drives, provided
                  that each of Imation's licensees agree in writing to comply
                  with the terms of this Section 5.

         5.12     Imation will at all times use all reasonable efforts to ensure
                  that all products in relation to which it uses the Overland
                  Trademark conform to the quality control guidelines provided
                  in this section or provided from time to time by Overland
                  Data.

         5.13     Imation is authorized to use the Overland Trademark only in
                  connection with the promotion and sale of Next Generation
                  Travan Drives, Next Generation Travan Cartridges, and Next
                  Generation Travan Libraries which contain the Travan VR(2)
                  ASIC.

         5.14     Imation shall cooperate with Overland Data in making or
                  facilitating any governmental registrations or submissions
                  that are necessary to protect the Overland Trademark and
                  Overland Data's rights therein, including, but not limited to,
                  registration of Imation as a registered user of the Overland
                  Trademark. Upon termination of Imation's right to use the
                  Overland


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                  Trademark under this Agreement, Imation shall cooperate
                  with Overland Data in revocation of any such registered
                  user registration.

         5.15     Imation shall comply with all applicable laws and governmental
                  regulations pertaining to the proper use and designation of
                  trademarks.

         5.16     Imation admits the validity of the Overland Trademark.

         5.17     Overland Data does not warrant or represent that the use of
                  the Overland Trademark shall be free from infringement of
                  third party trademarks. Overland Data does represent, however,
                  that it is not aware of any such infringement.

         5.18     Imation further agrees not to use or register in any country
                  any trademarks resembling, diluting, or confusingly similar to
                  the Overland Trademark. Whenever the attention of Imation is
                  called by Overland Data to any such resemblance, dilution,
                  confusion, or risk of confusion, Imation agrees to take
                  appropriate steps immediately to remedy or avoid such
                  situations.

         5.19     Imation shall give Overland Data notice of any known or
                  presumed infringements of the Overland Trademark, and Imation
                  shall give Overland Data full cooperation in the protection of
                  the Overland Trademark. If Overland Data decides to enforce
                  the Overland Trademark against an infringer, all costs
                  incurred and all recoveries made shall be for the account of
                  Overland Data.

         5.20     Imation agrees to show the Overland Trademark on all
                  advertising, marketing, distribution and promotional materials
                  (and, to the extent it is commercially reasonable, the drives
                  and related packaging) related to its Next Generation Travan
                  Drives and Next Generation Travan Libraries. The size of the
                  display of the VR(2) trademark will be no less than 75% of the
                  size of the Imation Trademarks on such materials, and to the
                  extent commercially reasonable, the drives, and related
                  packaging.

         5.21     Overland Data understands that Imation has offered licenses to
                  several manufacturers to allow them to manufacture and sell
                  drives for use with


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                  Travan 20 GB and Travan NS Cartridges, and that Imation may
                  extend such licenses to include Next Generation Travan
                  Drives. ***

         6.       ***

7.       CONFIDENTIALITY

         7.1      Each party agrees that any information identified as
                  confidential ("Confidential Information"), including the VR(2)
                  Technology, which is made available to the other party in
                  accordance with this Agreement shall be kept confidential.
                  Each party will use the other party's Confidential Information
                  only for the purposes contemplated and permitted by this
                  Agreement. Neither party will disclose the other party's
                  Confidential Information to any third party except as may be
                  required (i) by court order (provided that the party subject
                  to such court order gives prompt written notice thereof to the
                  party whose Confidential Information will be disclosed and
                  cooperates in any motion or action to prevent or limit the
                  required disclosure), and (ii) pursuant to any discovery
                  obligation in litigation provided that a mutually agreeable
                  protective order has been entered by the court. This
                  obligation of confidentiality shall last for five (5) years
                  from the date the confidential information is disclosed to the
                  recipient, regardless of the termination date of this
                  Agreement.

         7.2      Each Party further agrees to protect the other party's
                  Confidential Information from unauthorized use or disclosure
                  in the same manner as it protects its own similar Confidential
                  Information (but in no event with less than reasonable care),
                  and to limit access to the other party's Confidential
                  Information to those of its employees and agents who need such
                  access for purposes contemplated and permitted by this
                  Agreement. However, the obligations in this Section 6 will not
                  apply to any information which is:

                  7.2.1    presently publicly available, except as disclosed in
                           violation of this Agreement; or

                  7.2.2    lawfully received by any party from a third party who
                           is or who was not bound in a confidential
                           relationship to the other party; or


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                  7.2.3    already properly and lawfully in possession of any
                           party prior to the date of this Agreement or the date
                           of its disclosure, or information which such party
                           demonstrates with appropriate documentation was known
                           prior hereto; or

                  7.2.4    required by law or governmental regulation or
                           necessary for the purpose of enforcement of this
                           Agreement; or

                  7.2.5    independently developed by one party without use of
                           any Confidential Information of the other party by
                           employees who have had no access to such Confidential
                           Information.

8.       DISCLOSURE

         8.1      Imation warrants that it has the power and authority to carry
                  out the actions contemplated under this Agreement and that its
                  entry into and performance under the terms of this Agreement
                  will not cause it to be in breach of any obligations to a
                  third party.

         8.2      Imation acknowledges that any VR(2) Technology, any
                  know-how, and all documentary records and copies thereof,
                  as well as the copyright in any documentation or media
                  supplied by Overland Data pursuant to this Agreement, will
                  belong to and remain the property of Overland Data. Upon
                  termination of this Agreement, Imation will (i) return all
                  documentary records and copies thereof relating to the
                  VR(2) Technology to Overland Data, and (ii) immediately
                  terminate any use of the VR(2) Technology, any know-how,
                  and all documentary records and copies thereof.

         8.3      Overland Data warrants that it has the power and authority to
                  carry out the actions contemplated under this Agreement and
                  that its entry into and performance under the terms of this
                  Agreement will not cause it to be in breach of any obligations
                  to a third party.

         8.4      Overland Data acknowledges that the Compliance Test and
                  related reference tapes, sample tapes, instructions for
                  writing such sample tapes, specifications for Next Generation
                  Travan Tape Recording Formats, and all documentary records and
                  copies thereof, as well as the copyright in any documentation
                  or media supplied by Imation pursuant to this


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                  Agreement, will belong to and remain the property of
                  Imation. Upon termination of this Agreement, Overland Data
                  will (i) return all reference tapes, sample tapes,
                  instructions, specifications for Next Generation Travan
                  Tape Recording Formats, and documentary records and copies
                  thereof relating to the Compliance Test to Imation, and
                  (ii) immediately terminate any use of the reference tapes,
                  sample tapes, instructions, specifications for Next
                  Generation Travan Tape Recording Formats, and documentary
                  records and copies thereof relating to such Compliance Test.

9.       DISCLAIMER

         9.1      With respect to any samples provided by Overland Data
                  pursuant to this Agreement, Imation acknowledges and agrees
                  that Overland Data does not undertake, but will
                  nevertheless be entitled to defend, any suit brought for
                  infringement of third party rights and that Overland Data
                  does not undertake to reimburse or indemnify Imation, its
                  agents, subagents, customers, or any other persons for the
                  cost of defending suits or for damages incurred as a result
                  of such suits. Any risks associated with infringement of
                  third party rights with respect to such samples will be
                  borne solely by Imation or its licensees. OVERLAND DATA
                  SPECIFICALLY DISCLAIMS ALL WARRANTIES, EXPRESSED OR
                  IMPLIED, INCLUDING WITHOUT LIMITATION IMPLIED WARRANTIES OF
                  MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A
                  PARTICULAR PURPOSE, WHETHER OR NOT SUCH PURPOSE IS KNOWN TO
                  OVERLAND DATA, WITH RESPECT TO SUCH SAMPLES EMBODYING THE
                  VR(2) TECHNOLOGY AND ANY PARTICULAR APPLICATION OR USE OF
                  THE VR(2) TECHNOLOGY EMBODIED IN SUCH SAMPLES IN ANY TRAVAN
                  PRODUCT. IN NO EVENT SHALL OVERLAND DATA BE LIABLE FOR ANY
                  LOSS OR PROFIT OR ANY OTHER COMMERCIAL DAMAGES WITH RESPECT
                  TO SUCH SAMPLES, INCLUDING WITHOUT LIMITATION SPECIAL,
                  INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR OTHER DAMAGES.

         9.2      Overland Data acknowledges and agrees that Next Generation
                  Travan Drives have not been commercialized yet and that
                  Imation cannot guarantee that such drives will be
                  commercialized.


                                     -13-


THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.


<PAGE>


                                               CONFIDENTIAL TREATMENT REQUESTED


                       OVERLAND DATA INC. CONFIDENTIAL

10.      TERM AND TERMINATION

         10.1     This Agreement is effective as of the Effective Date and shall
                  continue for the life of the last to expire of the patents
                  licensed under this agreement.

         10.2     If either Party at any time during the term of this Agreement
                  shall fail to perform any of its obligations hereunder,
                  including any failure of Imation to make any payment as set
                  forth in Section 2.3 or any failure of Overland Data to meet a
                  milestone date recited in Section 2.2, such Party may so
                  notify such other Party in writing of such default, stating in
                  such written notice the obligations which such other Party
                  shall have failed to perform. *** If such other Party fails to
                  so cure the default, the Party may at its option terminate the
                  applicable license(s) by giving such other Party written
                  notice of such termination. If (i) ***, and (ii) Imation
                  waives its right to terminate this Agreement for such default
                  by Overland Data, and (iii) Overland Data receives written
                  notice from Imation of such waiver and its intent to perform
                  its remaining obligations under this Agreement, Overland Data
                  will use commercially reasonable efforts to (a) select another
                  semiconductor foundry to fabricate the Travan VR(2) ASIC; (b)
                  enter into a foundry agreement granting such foundry
                  intellectual property licenses and know-how to fabricate the
                  Travan VR(2) ASIC on commercially reasonable terms so as to
                  reduce any delays in achieving the milestones by the dates set
                  forth in Section 2.2. This right of termination is in addition
                  to and not in lieu of any other rights the Parties may have
                  under this contract.

         10.3     Imation agrees and acknowledges that Overland Data will be in
                  compliance with the provisions of Articles 4 and 5 of this
                  Agreement if any reference tapes, sample tapes, or
                  instructions provided by Imation are defective in any way,
                  resulting in a successful completion of the Compliance Test
                  when such drive would otherwise fail, until such time as
                  Imation provides non-defective replacement tapes and/or
                  instructions.

         10.4     No waiver by either Party of any default or breach of any
                  covenant by the other Party shall be implied from any omission
                  by such Party to take action on account of such default if
                  such default persists or is repeated, and no express waiver
                  shall affect any default other than the default


                                     -14-


THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>

                                               CONFIDENTIAL TREATMENT REQUESTED


                       OVERLAND DATA INC. CONFIDENTIAL

                  specified in the waiver, and then said waiver shall be
                  operative only for the time and to the extent therein
                  stated.

11.      NOTICES

         11.1     Any notice, report, or communication required or permitted to
                  be given hereunder shall be in writing and shall be deemed to
                  be properly given when sent by registered mail, postage
                  prepaid, addressed to the party to whom such notice is to be
                  given as follows:

                  Imation:          General Manager
                                    Data Storage Technologies Business
                                    Imation Corp., 1 Imation Place
                                    Oakdale, MN 55128-3414, U.S.A.

                  with a copy to:   Imation Legal Affairs
                                    1 Imation Place
                                    Oakdale, MN 55128-3414, U.S.A.
                                    Attention: General Counsel
                                    Facsimile: 651-704-5952

                  Overland Data:    Scott McClendon
                                    Overland Data, Inc.
                                    8975 Balboa Avenue
                                    San Diego, CA 92123

         11.2     Any Party may change the address or designee to which notice
                  to it may be given by notice as provided herein.


12.      MISCELLANEOUS PROVISIONS

         12.1     This Agreement shall be construed according to the laws of
                  Minnesota, without regard to conflicts of laws rules.

         12.2     Neither Party will do any act which will violate any law
                  and/or regulation of the U.S. or any other applicable country
                  related to the export and re-


                                     -15-


THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>

                                               CONFIDENTIAL TREATMENT REQUESTED


                       OVERLAND DATA INC. CONFIDENTIAL

                  export of technical information provided hereunder or any
                  product incorporating such technical information.

         12.3     Any dispute, controversy or claim arising out of or relating
                  to this Agreement, or the performance, breach or termination
                  thereof, or any other dispute between the parties, will be
                  settled by a single arbitrator selected by the parties in
                  accordance with the Rules of the American Arbitration
                  Association, as in effect as of the date of this Agreement.
                  The place of the arbitration will be San Diego, CA. The
                  language to be used in the arbitration will be English.
                  Judgment on the award rendered by the arbitrator may be
                  entered in any court of appropriate jurisdiction.
                  Notwithstanding the foregoing, the parties may seek
                  preliminary equitable relief in any court of competent
                  jurisdiction prior to the commencement of arbitration
                  proceedings under this section.

         12.4     This Agreement and the licenses granted herein shall be
                  non-assignable and non-transferable unless approved by both
                  Parties in writing, except as part of the sale or other
                  transfer of all or substantially all of the business of a
                  Party to which this Agreement relates.

         12.5     Nothing contained in this Agreement shall be construed as:

         (a)      a warranty or representation by either Party as to the
                  validity or scope of any patent or trademark;

         (b)      a warranty or representation that the exercise of rights and
                  licenses granted under this Agreement shall be free from
                  infringement of patents or trademarks; or

         (c)      an agreement, understanding, or obligation of any kind by
                  either Party to maintain or enforce its patents or trademarks
                  to bring or prosecute actions or suits against any third
                  parties for infringement, or conferring any rights to the
                  licensed Party to bring or prosecute actions or suits against
                  third parties for infringement.

        12.6      IT IS UNDERSTOOD AND AGREED THAT NEITHER PARTY SHALL BE LIABLE
                  TO THE OTHER UNDER BREACH OF CONTRACT, WARRANTY, NEGLIGENCE,
                  STRICT LIABILITY OR ANY OTHER


                                     -16-


THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>

                                               CONFIDENTIAL TREATMENT REQUESTED


                       OVERLAND DATA INC. CONFIDENTIAL

                  LEGAL THEORY FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR
                  CONSEQUENTIAL LOSS, EXPENSE, DAMAGES, DEMANDS, ACTIONS OR
                  CAUSES OF ACTION OR ANY OTHER CLAIMS WHATSOEVER (INCLUDING,
                  BUT NOT LIMITED TO, LOSS OF PROFIT, INVESTMENT, GOODWILL,
                  BUSINESS OR BUSINESS OPPORTUNITY) OR FOR ANY PUNITIVE
                  DAMAGES ARISING OUT OF OR RESULTING FROM THIS AGREEMENT OR
                  THE TERMINATION OF THIS AGREEMENT.

          12.7    Subject to Article 12.6, each Party shall indemnify and hold
                  the other Party harmless from any and all loss or liability
                  for any and all claims, causes of action, suits, proceedings,
                  losses, damages, demands, fees, expenses, fines, penalties and
                  costs (including, without limitation, reasonable attorneys'
                  fees, costs and disbursements) arising from any injury or
                  alleged injury to any third person or business for property
                  damage or personal injury caused by any products made or
                  processes performed by the indemnifying Party under this
                  Agreement.

         12.8     Subject to Article 12.6, a Party (the "indemnitee") which
                  intends to claim indemnification under this Article 12 shall
                  promptly notify the other Party ("the indemnitor") in writing
                  of any action, claims, or liability in respect of which the
                  indemnitee or any of its employees or agents intend to claim
                  such indemnification. The indemnitee shall permit, and shall
                  cause its employees and agents to permit, the indemnitor to
                  settle any such action, claims, or liability and agrees to the
                  control of such defense or settlement by the indemnitor;
                  provided, however, that such settlement does not adversely
                  affect the indemnitee's rights hereunder or impose any
                  obligations on the indemnitee in addition to those set forth
                  herein. No action, claim, or liability shall be settled
                  without the prior written consent of the indemnitor, and the
                  indemnitor shall not be responsible for any attorneys' fees or
                  other costs incurred other than as provided herein. The
                  indemnitee, its employees and agents, shall cooperate fully
                  with the indemnitor and its legal representatives in the
                  investigation and defense of any action, claim, or liability
                  covered by this indemnification. The indemnitee shall have the
                  right, but not the obligation, to be represented by counsel of
                  its own selection and at its own expense.

         12.9     Any provision of this Agreement which may be deemed invalid or
                  unenforceable by a court of competent jurisdiction shall in no
                  way


                                     -17-


THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>

                                               CONFIDENTIAL TREATMENT REQUESTED


                       OVERLAND DATA INC. CONFIDENTIAL

                  invalidate or render unenforceable the remainder of this
                  Agreement, which shall remain in full force and effect.

         12.10    The failure or delay of a Party at any time to enforce
                  performance of this Agreement shall not be construed as a
                  waiver of the right of such Party to enforce performance of
                  this Agreement at any subsequent time.

         12.11    This Agreement contains the complete and entire agreement
                  between the Parties, and supersedes any previous relevant
                  communication, representation or agreement, verbal or written,
                  including the Letter of Intent between the Parties dated March
                  31, 1998. No modification or renewal of this Agreement will be
                  binding upon either Party unless it is made in writing by
                  authorized representatives of both Parties.

         12.12    Each of the Parties hereto is an independent contractor and
                  nothing herein shall be deemed to constitute the relationship
                  of partners, joint venturers, nor of principal and agent
                  between the Parties hereto.

         12.13    This Agreement shall bind the Parties, their successors,
                  trustees, and permitted assignees.

         12.14    The article and section headings in this Agreement are
                  inserted for convenience only and shall not constitute a part
                  hereof.


IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
duly executed as of the Effective Date.

Overland Data, Inc.                 Imation Corp.

By:    /s/ Scott McClendon          By:    /s/ R. C. Lueck
       -------------------------           ----------------------------------
Name:  Scott McClendon              Name:  R. C. Lueck
       -------------------------           ----------------------------------
Title: President and CEO            Title: Director Finance and Operations
       -------------------------           ----------------------------------
Date:  March 1, 1999                Date:  February 25, 1999
       -------------------------           ----------------------------------


                                     -18-


THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>

                                               CONFIDENTIAL TREATMENT REQUESTED


                       OVERLAND DATA INC. CONFIDENTIAL
                                    EXHIBIT A

                               Imation Licensed IP

1) COPYRIGHTS, MASK WORKS. Any copyright or mask works owned by Imation (or
licensable by Imation without incurring a royalty), use of which is necessary to
both (1) manufacture and/or sell a Next Generation Travan Drive and (2) enable
interchangeability of Next Generation Travan Cartridges among Next Generation
Travan Drives employing the Travan formats.

2)  PATENTS.

<TABLE>
<CAPTION>

US Patent
Number         Issue Date              Title
------------------------------------------------------------------------------------------
<S>            <C>                     <C>
4,462,053      Jul. 24, 1984           Method for Controlling Disc Head

4,472,750      Sep. 18, 1984           Data Record with Pre-Recorded Transducer
                                       Positioning Signals, and System for Utilizing Same

4,498,129      Feb. 5, 1985            Method and Apparatus for Normalizing Servo-
                                       Positioning Signals

4,646,175      Feb. 24, 1987           Method and Apparatus for Positioning Transducers
                                       by Digital Conversion of Analog-Type Signals

5,558,291      Sep. 24, 1996           Drive for Handling Multiple-Size Information
                                       Storage Media Cartridges and Cartridges Therefor
</TABLE>

In addition to the patents listed above, corresponding published applications in
any country and any and all patents issuing on said applications, and any
continuations, continuations-in-part, divisions, extensions, reissues or
renewals thereof, shall be deemed to be included in this Exhibit A.

                                     -19-


THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>

                                               CONFIDENTIAL TREATMENT REQUESTED


                        OVERLAND DATA INC. CONFIDENTIAL


                                  EXHIBIT B

                                     ***


                                     -20-


THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>

                                               CONFIDENTIAL TREATMENT REQUESTED


                       OVERLAND DATA INC. CONFIDENTIAL
                                    EXHIBIT C

1.    Imation agrees and acknowledges that pricing for the Travan VR(2) ASIC is
      subject to the execution of a binding foundry agreement (the "FOUNDRY
      AGREEMENT") between Overland Data and its semiconductor foundry licensed
      to produce the Travan VR(2) ASIC design.

2.    The parties agree and acknowledge that Overland Data will endeavor to
      achieve the price targets for specific volumes set forth below.

3.    Imation agrees and acknowledges that such price targets below do not
      constitute any binding obligation, representation or warranty of Overland
      Data to supply Travan VR(2) ASICs to anyone at such prices and volumes.

      ***


                                     -21-


THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>

                                               CONFIDENTIAL TREATMENT REQUESTED


                       OVERLAND DATA INC. CONFIDENTIAL
                                    EXHIBIT D

TRAVAN-TM- AND TRAVAN NS-TM- DRIVE MANUFACTURER LICENSEES AS OF 2/3/99:

                           AIWA
                           TECMAR

                                     -22-


THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.