EXHIBIT 4.6

                                THIRD AMENDMENT
                                       TO
                           FIRST AMENDED AND RESTATED
                         COMMON SHARES RIGHTS AGREEMENT



     Third  Amendment  dated as of  November 2, 1994 (the  "Amendment"),  to the
First Amended and Restated  Common Shares Rights  Agreement dated as of December
14, 1990, as amended to date (the "Agreement"),  between Sun Microsystems, Inc.,
a Delaware  corporation  (the  "Company")  and The First National Bank of Boston
(the "Rights Agent").

     WHEREAS,  the Board of Directors of the  Company has determined  that it is
in the best interest of the Company and its  stockholders to amend the Agreement
as set forth herein and the Rights Agent has agreed to such amendment; and

     WHEREAS, the Company and the Rights Agent have determined that, pursuant to
Section 27 of the  Agreement,  the  Agreement may be amended as set forth herein
without the approval of the holders of the Rights (as defined in the Agreement).

     NOW, THEREFORE,  in consideration of the premises and the mutual agreements
herein set forth, the Agreement is hereby amended as follows:

     1.  Section  1(c)(i)  of the  Rights  Agreement  is hereby  amended  in its
entirety to read as follows:

     "(c) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
          to "beneficially own" any securities:

            (i)  which  such  Person  or  any of  such  Person's  Affiliates  or
            Associates  beneficially owns, directly or indirectly,  for purposes
            of Section 13(d) of the Exchange Act and Rule 13d-3  thereunder  (or
            any comparable or successor law or regulation);  provided,  however,
            if such Person or any of such Person's Affiliates and Associates, as
            the case may be, files  pursuant to Rule 13d-1 of the Exchange Act a
            Schedule 13G and, therefore, is not required to file a Schedule 13D,
            reporting  beneficial  ownership of not greater than twenty  percent
            (20%) of the Company's  outstanding Common Shares, then such Person,
            or any of such Person's  Affiliates or  Associates,  as the case may
            be,  shall not be deemed  the  "Beneficial  Owner"  and shall not be
            considered  to  "beneficially  own"  any  securities  so held nor be
            deemed an  "Acquiring  Person" for purposes of this  Agreement,  but
            only for so long as such Person, or any such Person's  Affiliates or
            Associates,  as the case  may be,  (i)  does  not  file,  nor in the
            determination  of the Board of  Directors  is it required to file, a
            report on Schedule  13D  pursuant to Section  13(d) or Rule 13d-1 of
            the Exchange Act, or (ii)  notwithstanding  the  foregoing  proviso,
            beneficially  owns less than twenty  percent  (20%) of the Company's
            outstanding Common Shares."

     2. This  Amendment may be executed in any number of  counterparts,  each of
such  counterparts  shall for all purposes be deemed to be an original,  and all
such counterparts shall together constitute but one and the same instrument.


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     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed as of the day and year first above written.


                                        SUN MICROSYSTEMS, INC.



                                        By:  /s/  MICHAEL H. MORRIS
                                           -------------------------------
                                        Name:  Michael H. Morris
                                        Title: Vice President, General Counsel
                                               and Secretary



                                        THE FIRST NATIONAL BANK OF BOSTON



                                        By:  /s/  KATHERINE S. ANDERSON
                                           -------------------------------
                                        Name:  Katherine S. Anderson
                                        Title: Administration Manager