OEM Agreement – International Business Machines Corp. And Storage Technology Corp.

March 19, 1998

[**]
Storage Technology Corporation
2270 South 88th Street
Louisville, Colorado 80028-0001


     Re:  Amendment No. 1 
          OEM Agreement dated December 18, 1997 between International Business 
          Machines Corporation and Storage Technology Corporation

Dear [**]:

This letter is being sent to amend certain terms of the OEM Agreement. The
amendments follow:

A.   The first sentence of Section 11.11 of the base OEM Agreement is
replaced with the following sentence:

'Except as otherwise provided in [**] Products and Upgrades that are supplied to
IBM hereunder will consist of new parts and components.'

B.   The person responsible for receiving notices for IBM related to
forecasts, orders and shipments in Section 26.3 of the base OEM Agreement is
changed from [**] to [**].

C.   The following footnote is added after the Volume Date of [**] for the
[**] and [**] Deliverables: ' [**]

D.   The 'Note' in the last paragraph of Section 6, i.e., Deliverables,
Schedules and Adjustments, of Attachment 1 to Exhibit 3, i.e., the Statement of
Work, is deleted in its entirety.

All other terms and conditions of the above-referenced agreement that are
unaffected by this amendment shall remain in full force and effect. If your
company agrees with the foregoing, please indicate its acceptance by signing
both copies of this letter, and returning them to me for IBM's execution.

Sincerely,



[**]



ACCEPTED AND AGREED TO:

STORAGE TECHNOLOGY                                        INTERNATIONAL BUSINESS
CORPORATION                                               MACHINES CORPORATION

[**]                                                      [**]