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                                                                   EXHIBIT 10.78


                            INDEMNIFICATION AGREEMENT
                            -------------------------

               THIS INDEMNIFICATION AGREEMENT ("Agreement") is made as of this
_____ day of ___________, 1998, by and between ALPHA MICROSYSTEMS, a California
corporation (the "Company"), and Sam Yau ("Indemnitee"), a director of the
Company.

               WHEREAS, the Company and Indemnitee recognize the increasing
difficulty in obtaining directors' and officers' liability insurance, the
significant increases in the cost of such insurance and the general reductions
in the coverage of such insurance;

               WHEREAS, the Company and Indemnitee further recognize the
substantial increase in corporate litigation subjecting officers and directors
to expensive litigation risks at the same time that liability insurance has been
severely limited;

               WHEREAS, Indemnitee does not regard the current protection
available as adequate given the present circumstances, and Indemnitee and other
officers and directors of the Company may not be willing to serve as officers
and directors without adequate protection;

               WHEREAS, the Company desires to attract and retain the services
of highly qualified individuals, such as Indemnitee, to serve as officers and
directors of the Company and to indemnify its officers and directors so as to
provide them with the maximum protection permitted by law;

               NOW, THEREFORE, the Company and Indemnitee hereby agree as
follows:


                                       I.

                                 INDEMNIFICATION
                                 ---------------

               1.01 Third Party Proceedings. The Company shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be made a party
to any threatened, pending or complete action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than action by or in the
right of the Company) by reason of the fact that Indemnitee is or was a director
and/or officer of the Company or any subsidiary of the Company, by reason of any
action or inaction on the part of Indemnitee while a director and/or officer or
by reason of the fact that Indemnitee is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against all expense,
liability and loss (including attorneys' fees), judgments, fines and amounts
paid in settlement (if such settlement is approved in advance by the Company,
which approval shall not be unreasonably withheld) actually and reasonably
incurred by Indemnitee in 

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connection with such action, suit or proceeding if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in the best interests
of the Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee's conduct was unlawful.

               The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that Indemnitee did not
act in good faith and in a manner which Indemnitee reasonably believed to be in
the best interests of the Company, and with respect to any criminal action or
proceeding, had reasonable cause to believe that Indemnitee's conduct was
unlawful.

               1.02 Proceedings by or in the Right of the Company. The Company
shall indemnify Indemnitee if Indemnitee was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Company or any subsidiary of the Company to procure a judgment
in its favor by reason of fact that Indemnitee is or was a director and/or
officer of the Company or any subsidiary of the Company, by reason of any action
or inaction on the part of Indemnitee while a director and/or officer or by
reason of the fact that Indemnitee is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against all expense,
liability and loss (including attorneys' fees) and amounts paid in settlement
(if such settlement is court-approved) actually and reasonably incurred by
Indemnitee in connection with the defense or settlement of such action or suit
if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to be in the best interests of the Company and its shareholders. No
indemnification shall be made in respect of any claim, issue or matter as to
which Indemnitee shall have been adjudged to be liable to the Company in the
performance of Indemnitee's duties to the Company and its shareholders, unless
and only to the extent that the Court in which such proceeding is or was pending
shall determine upon application that, in view of all the circumstances of the
case, Indemnitee is fairly and reasonably entitled to indemnity for expenses and
then only to the extent that the court shall determine.

               1.03 Mandatory Payment of Expenses. To the extent that Indemnitee
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Section 1.01 or 1.02 or the defense of any claim,
issue or matter therein, Indemnitee shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by Indemnitee in
connection therewith.


                                       II.

                       EXPENSES; INDEMNIFICATION PROCEDURE
                       -----------------------------------

               2.01 Advancement of Expenses. The Company shall advance all
expenses incurred by Indemnitee in connection with the investigation, defense,
settlement or appeal of any civil or criminal action, suit or proceeding
referenced in Section 1.01 or 1.02 hereof. Indemnitee hereby undertakes to repay
such amounts advanced only if, and to the extent that, it shall ultimately be
determined that Indemnitee is not entitled to be indemnified by the Company as
authorized hereby. The advance to be made hereunder shall be paid by the Company
to 

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Indemnitee within thirty (30) days following delivery of a written request
therefor by Indemnitee to the Company.

               2.02 Determination of Conduct. Any indemnification (unless
ordered by a court) shall be made by the Company only as authorized in the
specific case upon a determination that indemnification of Indemnitee is proper
under the circumstances because Indemnitee has met the applicable standard of
conduct set forth in Section 1.01 or 1.02 of this Agreement. Such determination
shall be made by any of the following: (1) the Board of Directors (or by an
executive committee thereof) by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, (2) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, (3) by
the shareholders, with the shares owned by Indemnitee not being entitled to vote
thereon, or (4) the court in which such proceeding is or was pending upon
application made by the Company or Indemnitee or the attorney or other person
rendering service in connection with the defense, whether or not such
application by Indemnitee, the attorney or the other person is opposed by the
Company.

               2.03 Notice/Cooperation by Indemnitee. Indemnitee shall, as a
condition precedent to his or her right to be indemnified under this Agreement,
give the Company notice in writing as soon as practicable of any claim made
against Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to Alpha Microsystems, 2722
South Fairview Street, Santa Ana, California 92704, or such other address as the
Company shall designate in writing to Indemnitee. Notice shall be deemed
received on the third business day after the date postmarked if sent by domestic
certified or registered mail, properly addressed; otherwise, notice shall be
deemed received when such notice shall actually be received by the Company. In
addition, Indemnitee shall give the Company such information and cooperation as
it may reasonably require and as shall be within Indemnitee's power.

               2.04 Notice to Insurers. If, at the time of the receipt of a
notice of a claim pursuant to Section 2.03 hereof, the Company has director and
officer liability insurance in effect, the Company shall give prompt notice of
the commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable actions to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.

               2.05 Selection of Counsel. In the event the Company shall be
obligated under Section 2.01 hereof to pay the expenses of any proceeding
against Indemnitee, the Company, shall be entitled to assume the defense of such
proceeding, with counsel approved by Indemnitee, upon the delivery to Indemnitee
of written notice of its election so to do. After delivery of such notice,
approval of such counsel by Indemnitee and the retention of such counsel by the
Company, the Company will not be liable to Indemnitee under this Agreement for
any fees of counsel subsequently incurred by Indemnitee with respect to the same
proceeding, provided that (a) Indemnitee shall have the right to employ his or
her counsel in any such proceeding at Indemnitee's expense; and (b) if (i) the
employment of counsel by Indemnitee has been previously authorized by the
Company, (ii) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Company and Indemnitee in the conduct of any

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such defense, or (iii) the Company shall not, in fact, have employed counsel to
assume the defense of such proceeding, then the fees and expenses of
Indemnitee's counsel shall be at the expense of the Company.


                                      III.

               ADDITIONAL INDEMNIFICATION RIGHTS; NON-EXCLUSIVITY
               --------------------------------------------------

               3.01 Application. The provisions of this Agreement shall be
deemed applicable to all actual or alleged actions or omissions by Indemnitee
during any and all periods of time that Indemnitee was, is, or shall be serving
as a director and/or officer of the Company.

               3.02 Scope. The Company hereby agrees to indemnify Indemnitee to
the fullest extent permitted by law (except as set forth in Article VIII
hereof), notwithstanding that such indemnification is not specifically
authorized by the other provisions of this Agreement, the Company's Articles of
Incorporation, the Company's Bylaws or by statute. In the event of any changes,
after the date of this Agreement, in any applicable law, statute, or rule which
expands the right of a California corporation to indemnify a member of its board
of directors or an officer, such changes shall be, ipso facto, within the
purview of Indemnitee's rights and the Company's obligations under this
Agreement. In the event of any change in any applicable law, statute, or rule
which narrows the right of a California corporation to indemnify a member of its
board of directors or an officer, such changes, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement shall have
no effect on this Agreement or the parties' rights and obligations hereunder.

               3.03 Non-Exclusivity. The indemnification provided by this
Agreement shall not be deemed exclusive of any rights to which an Indemnitee may
be entitled under the Company's Articles of Incorporation, its Bylaws, any
agreement, any vote of shareholders or disinterested directors, the California
General Corporation Law, or otherwise, both as to action in Indemnitee's
official capacity and as to action in another capacity while holding such
office. The indemnification provided under this Agreement shall continue as to
Indemnitee for an action taken or not taken while serving in an indemnified
capacity even though he or she may have ceased to serve in such capacity at the
time of any action, suit or other covered proceeding.


                                       IV.

                             PARTIAL INDEMNIFICATION
                             -----------------------

               4.01 If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the
expenses, judgments, fines or penalties actually or reasonably incurred by him
in the investigation, defense, appeal or settlement of any civil or criminal
action, suit or proceeding, but not, however, for the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion of such
expenses, judgments, fines or penalties to which Indemnitee is entitled.

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                                       V.

                              MUTUAL ACKNOWLEDGMENT
                              ---------------------

               5.01 Both the Company and Indemnitee acknowledge that in certain
instances, federal law or public policy may override applicable state law and
prohibit the Company from indemnifying its directors and officers under this
Agreement or otherwise. For example, the Company and Indemnitee acknowledge that
the Securities and Exchange Commission (the "SEC") has taken the position that
indemnification is not permissible for liabilities arising under certain federal
securities laws, and federal legislation prohibits indemnification for certain
ERISA violations. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the SEC to submit
the question of indemnification to a court in certain circumstances for a
determination of the Company's right under public policy to indemnify
Indemnitee.


                                       VI.

                  DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
                  --------------------------------------------

               6.01 The Company shall, from time to time, make the good faith
determination whether or not it is practicable for the company to obtain and
maintain a policy or policies of insurance with reputable insurance companies
providing the directors and officers with coverage for losses from wrongful
acts, or to ensure the Company's performance of its indemnification obligations
under this Agreement. Among other considerations, the Company will weigh the
costs of obtaining such insurance coverage against the protection afforded by
such coverage. In all policies of directors' and officers' liability insurance,
Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's directors, if Indemnitee is a director; or of the
Company's officers, if Indemnitee is not a director of the Company but is an
officer. Notwithstanding the foregoing, the Company shall have no obligation to
obtain or maintain such insurance if the Company determines in good faith that
such insurance is not reasonably available, if the premium costs for such
insurance are disproportionate to the amount of coverage provided, if the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or if Indemnitee is covered by similar insurance
maintained by a parent or subsidiary of the Company.

                                      VII.

                                  SEVERABILITY
                                  ------------

               7.01 Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or fail to do any act in violation of
applicable law. The Company's inability, pursuant to court order, to perform its
obligations under this Agreement shall not constitute a breach of this
Agreement. The provisions of this Agreement shall be severable as provided in
this Article VII. If this Agreement or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not 

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have been invalidated, and the balance of this Agreement not so invalidated
shall be enforceable in accordance with its terms.


                                      VIII.

                                   EXCEPTIONS
                                   ----------

               8.01 Any other provision to the contrary notwithstanding, the
Company shall not be obligated pursuant to the terms of this Agreement for the
following:

                      (a) Claims Initiated by Indemnitee. To indemnify or
advance expenses to Indemnitee with respect to proceedings or claims initiated
or brought voluntarily by Indemnitee and not by way of defense, unless said
proceedings or claims were authorized by the board of directors of the Company.

                      (b) Improper Personal Benefit. To indemnify Indemnitee
against liability for any transactions from which Indemnitee derived an improper
personal benefit, including, but not limited to, self-dealing or usurpation of a
corporate opportunity.

                      (c) Dishonesty. To indemnify Indemnitee if a judgment or
other final adjudication adverse to Indemnitee established that Indemnitee
committed acts of active and deliberate dishonesty, with actual dishonest
purpose and intent, which acts were material to the cause of action so
adjudicated.

                      (d) Insured Claims. To indemnify Indemnitee for expenses
or liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) which
have been paid directly to Indemnitee by an insurance carrier under a policy of
officers' and directors' liability insurance maintained by the Company.

                      (e) Claims Under Section 16(b). To indemnify Indemnitee
for expenses or the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute.


                                       IX.

                                  MISCELLANEOUS
                                  -------------

               9.01   Construction of Certain Phrases.

                      (a) For purposes of this Agreement, references to the
"Company" shall include any constituent corporation (including any constituent
of a constituent) absorbed in a consolidation or merger so that if Indemnitee is
or was a director, officer, employee or agent of such constituent corporation,
or is or was serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, Indemnitee shall stand in the same position
under the provisions of this 

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Agreement with respect to the resulting or surviving corporation as Indemnitee
would have with respect to such constituent corporation if its separate
existence had continued.

                      (b) For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee or agent of the Company
which impose duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan, its participants, or
beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in the best interests of the participants and
beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have
acted in a manner "reasonably believed to be in the best interests of the
Company and its shareholders" as referred to in this Agreement.

               9.02 Successors and Assigns. This Agreement shall be binding upon
the Company and its successors and assigns, and shall insure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.

               9.03 Notice. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed duly
given (i) if delivered by hand and receipted for by the party addressed, on the
date of such receipt, or (ii) if mailed by domestic certified or registered mail
with postage prepaid, on the third business day after the date postmarked:

                      If to Indemnitee:     Sam Yau
                                            17 Cipriani
                                            Irvine, CA  92606

                      If to Company:        Alpha Microsystems
                                            2722 South Fairview Street
                                            Santa Ana, California 92704

or to such other address as may be furnished to Indemnitee by the Company or to
the Company by Indemnitee, as the case may be.

               9.04 Consent to Jurisdiction. The Company and Indemnitee each
hereby irrevocably consent to the jurisdiction of the courts of the State of
California for all purposes in connection with any action or proceeding which
arises out of or relates to this Agreement and agree that any action instituted
under this Agreement shall be brought only in the state courts of the State of
California.

               9.05 Choice of Law. This Agreement shall be governed by and its
provisions construed in accordance with the laws of the State of California, as
applied to contracts between California residents entered into and to be
performed entirely within California.

               9.06 Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.

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               IN WITNESS WHEREOF, the parties hereby have executed this
Agreement as of the date first above written.

               "Company"               ALPHA MICROSYSTEMS,
                                       a California corporation


                                       By:______________________________________
                                       Its:_____________________________________



               "Indemnitee"            _________________________________________
                                       SAM YAU