FIRST AMENDMENT TO BUSINESS LOAN AGREEMENT

This First Amendment to Business Loan Agreement (the “Amendment”) is made as of
September 22, 2005, between Bank of America, N. A. (“Bank”) and Network
Equipment Technologies, Inc., a Delaware corporation (“Borrower”).

RECITALS

A. Borrower and Bank entered into that certain Business Loan Agreement dated as
of November 29, 2004 (the “Agreement”).

B. Borrower and Bank desire to amend certain terms and provisions of the
Agreement as herein provided.

AGREEMENT

1.

Definitions. Capitalized terms used but not defined in this Amendment shall have
the meaning given to them in the Agreement.

2.

Amendments. The Agreement is hereby amended as follows:

2.01 In Section 1.2 of the Agreement, the date "October 30, 2006" is substituted
for the date "October 30, 2005."

2.02 The address for notices to the Bank, set forth on the signature page of the
Agreement, is amended to read as follows:

"CA9-702-05-69
101 S. Marengo Avenue, 5th Floor
Pasadena, CA 91101-2428”

3.

Representations and Warranties. Borrower hereby represents and warrants to Bank
that: (i) no default specified in the Agreement and no event which with notice
or lapse of time or both would become such a default has occurred and is
continuing and has not been previously waived, (ii) the representations and
warranties of Borrower pursuant to the Agreement are true on and as of the date
hereof as if made on and as of said date, (iii) the making and performance by
Borrower of this Amendment have been duly authorized by all necessary action,
and (iv) no consent, approval, authorization, permit or license is required in
connection with the making or performance of the Agreement as amended hereby.

4.

Conditions. This Amendment will be effective when the Bank receives the
following items, in form and content acceptable to the Bank.

4.01 This Amendment duly executed by all parties hereto.

4.02 The Amended and Restated Limited Guaranty duly executed by NET Federal,
Inc.

4.02 Payment of all out-of-pocket expenses, including attorneys’ fees, incurred
by the Bank in connection with the preparation of this Amendment.

5.

Effect of Amendment. Except as provided in this Amendment, the Agreement shall
remain in full force and effect and shall be performed by the parties hereto
according to its terms and provisions.

IN WITNESS WHEREOF, this Amendment has been executed by the parties hereto as of
the date first above written.

BANK OF AMERICA, N.A.

By:

  /s/ RONALD J. DROBNY

Name:

  Ronald J. Drobny

Title:

  Senior Vice President

NETWORK EQUIPMENT TECHNOLOGIES, INC.

By:

  /s/ JOHN F. MCGRATH, JR.

Name:

  John F. Mcgrath, Jr.

Title:

  CFO