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***CONFIDENTIAL PORTIONS OF THIS DOUCMENT HAVEBEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.***

** **

**EXHIBIT10.17**

 

**AMENDMENTTHREE**

**TO**

**VR2TECHNOLOGY LICENSE AGREEEMENT**

 

This THIRD AMENDMENT  is made this 29th day of March, 2004 by andbetween, **Storage Technology Corporation**, aDelaware corporation, having its principal place of business at One StorageTekDr., Louisville, Colorado 80028 (“StorageTek”), and **OverlandStorage, Inc.**, having its principal place of business at 4820Overland Avenue, San Diego, California  92123 (“Contractor”).

 

Whereas, StorageTekrequests Contractor’s Services and expertise in the re-design of the PRML ASIC,and

 

Whereas, Contractordesires to provides such Services, 

 

Now therefore, theparties agree to amend the following sections pursuant to the VR2 TECHNOLOGYLICENSE AGREEMENT executed between the parties on July 20, 2000:

 

**4.2.1****                    **ContractEngineering Services [***]

Add the following for the[***] of StorageTek’s PRML ASIC for the [***] provided to Contractor byStorageTek.  Consulting activities shallbe performed at Contractor’s facility and shall include but are not limited tothe following: [***]

 

Such services shall becompleted on or before [***].  Specifictimelines and milestones shall be mutually agreed upon between Contractor andthe StorageTek Project Manager. Contractor shall contact the StorageTek Project Manager when theverification is complete and when the tape is forwarded to Kawasaki forcreation of the chip.

 

As consideration for suchcontract engineering Services, StorageTek agrees to pay Contractor [***] basedon achievement of the following milestones:

 

1.               Completion of the [***] and delivery to[***] – [***]

2.               Completion of 1st and 2ndsignoff of [***] fabrication – [***]

3.               Completion of chip testing and final signoffby StorageTek Project Manager or a designated representative – [***]

 

Contractor shall invoiceStorageTek at the completion of each milestone. Invoices pursuant to Amendment Three shall reference StorageTek purchaseorder [***].  Invoices shall be payablewithin [***] days after receipt.  Theabove amounts do not anticipate billing for any out-of-pocket expenses.  Any such expenses to be incurred and billedby Contractor must be approved in advance by the StorageTek Project Manager,[***].

 

**8.3**Termination

Addthe following language which shall be valid pursuant to Amendment Three only:

 

StorageTek may terminate this Amendment Three with[***] prior written notice to Overland. Such termination notice shall be given to Overland pursuant to section **11.3 Notice**. 

 

Atthe time of termination, StorageTek shall be released from any and allobligations under this Amendment provided, that in the event of termination,the Contractor shall be paid the balance owing for any reimbursable expensesaccrued to the date of termination, and shall be paid for Servicessatisfactorily performed to the date of termination, less any amountspreviously prepaid.  If 

 

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***CONFIDENTIAL PORTIONS OF THIS DOUCMENT HAVEBEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.***

 

 

theContractor’s fee has been specified on the basis of a definite sum for thecompletion of Services, the sum payable upon termination shall be based uponthe percent of the Services satisfactorily completed.

 

Allother terms and conditions of the agreement, as amended, remain the same.

 

**IN WITNESS WHEREOF,**the parties have caused their duly authorized representatives to sign this **SERVICES AGREEMENT** as of the date first stated above.

 
| **Storage Technology Corporation** | ** **                 | **Overland Storage, Inc.** |
|------------------------------------|----------------------------|----------------------------|
| By:                                | /s/ Ellen J. Rickert       |                       |   | By: | /s/ Vernon A. LoForti |   |
| Name:                              | Ellen J. Rickert           |                       | Name: | Vernon A. LoForti |
|                               |                       |                       |   |   |
| Title:                             | Subcontract  Administrator |                       | Title: | Vice President &  CFO |
|                                    |                            |                            |  |  |  |  |

 

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