FORM OF
                            INDEMNIFICATION AGREEMENT


         This  Indemnification  Agreement  ("Agreement") is made as of this ____
day of  _____________  1987, by and between SUN  MICROSYSTEMS,  INC., a Delaware
corporation (the "Company"), and____________________ ("Indemnitee").

         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 in general,  subjecting officers and directors
to expensive  litigation risks at the same time as the availability and coverage
of liability insurance has been severely limited;

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

         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,  in consideration of Indemnitee's service as an officer
or director of the Company, the Company and Indemnitee hereby agree as follows:

         1.       Indemnification.

                  (a) 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 completed  action,  suit or proceeding,  whether
civil, criminal,  administrative or investigative (other than an action by or in
the right of the  Company)  by reason  of the fact that  Indemnitee  is or was a
director,  officer,  employee or agent of the Company,  or any subsidiary of the
Company,  by reason of any action or inaction on the part of Indemnitee while an
officer or director 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 expenses (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  connection  with such action,  suit or  proceeding if Indemnitee
acted in good faith and in a manner Indemnitee  reasonably  believed to be in or
not opposed to 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

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good faith and in a manner which Indemnitee  reasonably believed to be in or not
opposed to 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.

                  (b) 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 the fact  that  Indemnitee  is or was a  director,
officer,  employee or agent of the Company, or any subsidiary of the Company, by
reason of any action or inaction on the part of  Indemnitee  while an officer or
director  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
expenses  (including  attorneys'  fees) and, to the fullest extent  permitted by
law,  amounts  paid in  settlement,  in each  case to the  extent  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 or not opposed to the best interests of
the  Company,  except  that 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  unless and only to the extent that the Court of Chancery
of the State of  Delaware  or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in  view  of all  the  circumstances  of the  case,  Indemnitee  is  fairly  and
reasonably  entitled to indemnity for such expenses  which the Court of Chancery
of the State of Delaware or such other court shall deem proper.

                  (c)  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  Subsections  (a) and (b) of this
Section 1 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.

         2.       Expenses; Indemnification Procedure.

                  (a)  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(a) or (b) hereof  (but not  amounts  actually  paid in
settlement of any such action, suit or proceeding). 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 advances to be made  hereunder  shall be
paid by the Company to Indemnitee within twenty (20) days following  delivery of
a written request therefor by Indemnitee to the Company.

                  (b)  Notice/Cooperation by Indemnitee.  Indemnitee shall, as a
condition  precedent to his 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 President of the Company
at the

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address shown on the signature  page of this Agreement (or such other address as
the Company shall  designate in writing to  Indemnitee).  Notice shall be deemed
received  three  business  days after the date  post-marked  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.

                  (c) Procedure.  Any  indemnification and advances provided for
in Section 1 and this Section 2 shall be made no later than forty-five (45) days
after  receipt of the  written  request  of  Indemnitee.  If a claim  under this
Agreement,   under  any  statute,  or  under  any  provision  of  the  Company's
Certificate of Incorporation or By-laws  providing for  indemnification,  is not
paid in full by the Company within  forty-five (45) days after a written request
for payment thereof has first been received by the Company,  Indemnitee may, but
need not, at any time thereafter  bring an action against the Company to recover
the  unpaid  amount of the claim and,  subject to Section 12 of this  Agreement,
Indemnitee  shall  also be  entitled  to be paid  for  the  expenses  (including
attorneys'  fees) of  bringing  such  action.  It shall be a defense to any such
action (other than an action brought to enforce a claim for expenses incurred in
connection  with  any  action,  suit  or  proceeding  in  advance  of its  final
disposition)  that Indemnitee has not met the standards of conduct which make it
permissible under applicable law for the Company to indemnify Indemnitee for the
amount  claimed,  but the burden of proving such defense shall be on the Company
and  Indemnitee  shall be  entitled  to receive  interim  payments  of  expenses
pursuant  to  Subsection  2(a)  unless  and until  such  defense  may be finally
adjudicated  by court  order or judgment  from which no further  right of appeal
exists. It is the parties'  intention that if the Company contests  Indemnitee's
right to indemnification,  the question of Indemnitee's right to indemnification
shall be for the  court to  decide,  and  neither  the  failure  of the  Company
(including  its Board of  Directors,  any  committee or subgroup of the Board of
Directors,  independent  legal  counsel,  or its  stockholders)  to have  made a
determination that  indemnification of Indemnitee is proper in the circumstances
because  Indemnitee  has met the  applicable  standard  of conduct  required  by
applicable law, nor an actual  determination by the Company (including its Board
of Directors,  any committee or subgroup of the Board of Directors,  independent
legal counsel,  or its stockholders) that Indemnitee has not met such applicable
standard of conduct,  shall create a presumption  that Indemnitee has or has not
met the applicable standard of conduct.

                  (d) Notice to  Insurers.  If, at the time of the  receipt of a
notice of a claim pursuant to Section 2(b) 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  action 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.

                  (e)  Selection of Counsel.  In the event the Company  shall be
obligated  under  Section  2(a)  hereof to pay the  expenses  of any  proceeding
against Indemnitee, the Company, if appropriate, 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

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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 (i)  Indemnitee  shall  have the right to employ his
counsel in any such  proceeding  at  Indemnitee's  expense;  and (ii) if (A) the
employment  of counsel  by  Indemnitee  has been  previously  authorized  by the
Company,  (B)  Indemnitee  shall have  reasonably  concluded that there may be a
conflict of interest  between the Company and  Indemnitee  in the conduct of any
such defense,  or (C) 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.

         3. Additional Indemnification Rights; Nonexclusivity.

                  (a)  Scope.   Notwithstanding  any  other  provision  of  this
Agreement,  the Company hereby agrees to indemnify the Indemnitee to the fullest
extent  permitted  by law,  notwithstanding  that  such  indemnification  is not
specifically authorized by the other provisions of this Agreement, the Company's
Certificate of Incorporation,  the Company's By-laws or by statute. In the event
of any change, after the date of this Agreement, in any applicable law, statute,
or rule which expands the right of a Delaware  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 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 Delaware  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.

                  (b)  Nonexclusivity.  The  indemnification  provided  by  this
Agreement shall not be deemed exclusive of any rights to which Indemnitee may be
entitled under the Company's  Certificate  of  Incorporation,  its By-laws,  any
agreement,  any vote of stockholders  or  disinterested  Directors,  the General
Corporation  Law of the State of Delaware,  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 any action taken or not taken while serving in an
indemnified capacity even though he may have ceased to serve in such capacity at
the time of any action, suit or other covered proceeding.

         4.  Partial  Indemnification.  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.

         5.  Mutual  Acknowledgment. Both the Company and Indemnitee acknowledge
that in certain instances,  Federal law or applicable public policy may prohibit
the Company from indemnifying its directors and officers under this Agreement or
otherwise.   Indemnitee  understands  and  acknowledges  that  the  Company  has
undertaken or may be required in the future to undertake with the Securities and
Exchange Commission to submit the question of indemnification to a court in

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certain  circumstances  for a determination  of the Company's right under public
policy to indemnify Indemnitee.

         6. Officer and Director  Liability  Insurance.  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  officers  and  directors of the
Company 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
director  and  officer  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; or of the Company's key employees, if
Indemnitee is not an officer or director but is a key employee.  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
subsidiary or parent of the Company.

         7.  Severability.  Nothing in this  Agreement is intended to require or
shall be  construed  as  requiring  the  Company  to do or fill 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 Section 7. 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 have been invalidated,  and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.

         8.   Exceptions.   Any  other   provision   herein   to  the   contrary
notwithstanding,  the Company  shall not be  obligated  pursuant to the terms of
this Agreement:

                  (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, except with respect
to proceedings brought to establish or enforce a right to indemnification  under
this  Agreement  or any other  statute or law or  otherwise  as  required  under
Section 145 of the Delaware General Corporation Law, but such indemnification or
advancement  of expenses may be provided by the Company in specific cases if the
Board of Directors has approved the initiation or bringing of such suit; or

                  (b)  Lack of  Good  Faith.  To  indemnify  Indemnitee  for any
expenses incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this

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<PAGE>

Agreement,  if a court of  competent  jurisdiction  determines  that each of the
material  assertions  made by the Indemnitee in such  proceeding was not made in
good faith or was frivolous; or

                  (c) 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.

                  (d) Claims Under Section  16(b).  To indemnify  Indemnitee for
expenses  and 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.

         9. Construction of Certain Phrases.

                  (a)  For  purposes  of  this  Agreement,   references  to  the
"Company"  shall  include,  in  addition  to  the  resulting  corporation,   any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued,  would
have had power and authority to indemnify its directors, officers, and employees
or agents,  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
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  imposes  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 interest of the participants and beneficiaries
of an  employee  benefit  plan,  Indemnitee  shall be deemed to have  acted in a
manner "not opposed to the best interests of the Company" as referred to in this
Agreement.

         10.  Counterparts.  This  Agreement  may be  executed  in  one or  more
counterparts, each of which shall constitute an original.

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

         12.  Attorneys'  Fees.  In the event that any action is  instituted  by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all

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<PAGE>

court costs and expenses,  including  reasonable  attorneys'  fees,  incurred by
Indemnitee  with  respect to such action,  unless as a part of such action,  the
court of competent jurisdiction  determines that each of the material assertions
made by  Indemnitee  as a basis for such  action  were not made in good faith or
were  frivolous.  In the event of an action  instituted by or in the name of the
Company under this Agreement or to enforce or interpret any of the terms of this
Agreement, Indemnitee shall be entitled to be paid all court costs and expenses,
including  attorneys'  fees,  incurred by  Indemnitee  in defense of such action
(including with respect to Indemnitee's  counterclaims  and cross-claims made in
such action),  unless as a part of such action the court determines that each of
Indemnitee's  material  defenses  to such  action were made in bad faith or were
frivolous.

         13. 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 addressee,  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.  Addresses  for
notice to either party are as shown on the signature page of this Agreement,  or
as subsequently modified by written notice.

         14. Consent to  Jurisdiction.  The Company and  Indemnitee  each hereby
irrevocably  consent to the  jurisdiction of the courts of the State of Delaware
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 Delaware.

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


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<PAGE>

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


                                       SUN MICROSYSTEMS, INC.



                                       By:_____________________________________

                                       Its:____________________________________

                                       Address:       2550 Garcia Avenue
                                                      Mountain View, CA 94043



AGREED TO AND ACCEPTED:

INDEMNITEE:

__________________________________
(type name)

__________________________________
(signature)

__________________________________


__________________________________
(address)

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