SUN TECHNOLOGY ENTERPRISES, INC.
                       DEVELOPMENT AND PURCHASE AGREEMENT

This Agreement is made and entered into by and between Sun Microsystems, Inc., a
Delaware  corporation  having its  principal  place of  business  at 2550 Garcia
Avenue, Mountain View, California 94043 and acting by and through the SunConnect
unit of its subsidiary  Sun Technology  Enterprises,  Inc.  ("SunConnect"),  and
Network Peripherals Inc., a California corporation having its principal place of
business at 1371 McCarthy Boulevard, Milpitas, CA 95035 ("NP").

1.0           DEFINITIONS

              1.1 "Administrator(s)"  means the individuals listed in Section 28
below, or an individual designated by such Administrator.

              1.2 "BOM" means the Bill of Materials  describing the OEM Products
as they are to be delivered to SunConnect set forth in Exhibit A-4, which may be
modified with the mutual written agreement of each party's Administrator.

              1.3  "Development  Deliverable"  means each  deliverable  required
pursuant to the Development Schedule and Deliverables.

              1.4 "Development  Schedule and Deliverables" means the schedule of
tasks, deliverables and completion dates set forth in Exhibit B.

              1.5  "Documentation"  means  the user  manual  and  other  written
materials related to the OEM Products as described in the Product  Specification
and Development Deliverables.

              1.6 "NP  Products"  means the OEM  Products  minus the  Sun-Unique
Elements.

              1.7 "OEM  Products"  means the FDDI Adapter for the  SBbus/Solaris
systems  product line  described in the Product  Specification  (SunLink  FDDI/S
3.x), and any additional  products the parties add by mutual  consent.  The term
"OEM  Products"  shall  include  Documentation  except  with  respect  to  those
instances where this Agreement separately refers to Documentation.

              1.8  "Proprietary   Information"   means  that  information  which
SunConnect  and  NP  desire  to  protect  against  unrestricted   disclosure  or
competitive  use and which,  if disclosed in writing,  is  designated as such in
writing  by the  disclosing  party or, if  disclosed  orally,  is  announced  as
confidential  at the time of its disclosure by the  disclosing  party and within
thirty  (30) days  thereafter  is  summarized  in  writing  and such  summary is
provided to the receiving party.

              1.9  "Product  Specification"  means  the  description  of the OEM
Products set forth in Exhibits A, A-1 and A-2.

              1.10   "SunConnect    Modification"    means   any   modification,
enhancement,  extension  or  addition  of or to the OEM  Products,  in source or
object  code  form,  developed  by or on behalf  of  SunConnect  (but  excluding
modifications developed by NP pursuant to this Agreement).

              1.11  "Sun-Unique  Elements"  means  those  elements  of  the  OEM
Products listed in Exhibit C attached hereto.

              1.12  "Service  Provider"  means an entity  which  SunConnect  has
authorized  to  provide  product   support  to  customers,   which  may  include
distributors, resellers and support partners.

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2.0           DEVELOPMENT OF OEM PRODUCTS

              2.1  Development of OEM Products.  NP and SunConnect  will develop
and test the OEM Products in accordance with the milestones,  delivery dates and
testing  requirements  set forth in the  Development  Schedule  and the  pre-FCS
"SunLink  FDDI/S 3.x Quality  Assurance  Plan  attached  hereto as Exhibit  A-3.
Changes to the Development Schedule and/or the Product Specification may be made
with the mutual written consent of the Administrators of both parties.

              2.2 * "Confidential  portion has been omitted and filed separately
with the Commission."

              2.3 Acceptance of Deliverables.  SunConnect  shall  acknowledge in
writing  or by  electronic  mail its  receipt of each  Development  Deliverable.
SunConnect  will  notify  NP  as  soon  as  possible   whether  the  Development
Deliverable is accepted or rejected,  provided that each Development Deliverable
will be deemed  automatically  accepted if SunConnect's  Administrator  fails to
notify NP in writing that SunConnect  accepts or rejects such deliverable within
thirty (30) days from the date of its delivery.

              2.4  Correction of Errors in  Deliverables.  If, within the thirty
(30)  day  acceptance  period,   SunConnect  notifies  NP  in  writing  that  an
Development  Deliverable  fails  to  satisfy  the  criteria  set  forth  in  the
Development  Schedule or Product  Specification  and  provides NP with a written
explanation  thereof,  NP will have five (5) days to provide  SunConnect  with a
revised schedule for correcting the defect(s) in the non-conforming  Development
Deliverable   and  shall  promptly   institute  and   diligently   execute  such
corrections.

              2.5 FCS Decision. Pursuant to the Development Schedule, SunConnect
is  responsible  for making a "Go/ No Go" decision  regarding the first customer
ship of the OEM Products.  SunConnect will notify NP in writing of the result of
the Go/ No Go  decision  within  two days  after the  decision  is made.  If the
decision is a "go," then this decision will authorize NP to begin the production
phase for the OEM Products and to ship the OEM Products to SunConnect  under the
terms set forth below.

3.0           DOCUMENTATION

              3.1 Documentation  Deliverables.  Development Deliverables related
to Documentation are set forth in Exhibit B.

              3.2 Post-FCS  Documentation.  The parties  will  negotiate in good
faith  to  determine  who  will be  responsible  for  writing  and  implementing
revisions to the  Documentation,  and how related costs shall be  allocated.  NP
will not  distribute  any  modified  Documentation  without  the  prior  written
approval of the SunConnect Administrator.

              3.3  Quality  of  Documentation  Shipped  by NP.  The  quality  of
Documentation  for the OEM  Products  shipped  by NP at and  after  FCS  must be
comparable  with the  quality  of the  current  SunLink  FDDI/S  2.0  documents.
(Notwithstanding  the foregoing  sentence,  the  documentation to be provided to
beta sites by NP may be xeroxed copies of the beta-stage documentation delivered
by  SunConnect  to NP.)  Promptly  after the  Effective  Date. NP will develop a
quality plan to ensure that the Documentation meets the Quality requirements for
post FCS  documentation,  and shall  submit such  quality  plan to  SunConnect's
Administrator for approval.  After such approval the documentation  quality plan
shall be attached as part of the Quality Assurance Plan described in Section 8.1
below.  SunConnect  shall  also have the right to  approve  the  quality  of the
completed Documentation prior to shipment.

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4.0.           OWNERSHIP

              4.1 * "Confidential  portion has been omitted and filed separately
with the Commission."


              4.2 * "Confidential  portion has been omitted and filed separately
with the Commission."

5.0           MAINTENANCE, SUPPORT AND TRAINING.

              5.1  Support to  Customers.  Customer  support  for OEM  Products,
SunLink  FDDI/S 1.0 and  SunLink  FDDI/S 2.0  products  shall be provided as set
forth in Exhibit E.

              5.2 OEM  Product  Repair and  Replacements  Under  Warranty.  If a
SunConnect  Service  Provider  receives  an OEM Product  which is  eligible  for
warranty  service by NP under NP's warranty set forth in Section 23 below,  then
the  Service  Provider  will  return  such  OEM  Product  to NP  for  repair  or
replacement,  and NP shall repair or replace such OEM Product in accordance with
the warranty provided under Section 23.

              5.3 OEM Product Repair and  Replacements  Out of Warranty.  Repair
and Replacement Prices for OEM Products which are not eligible for service under
NP's warranty  ("Out of Warranty OEM  Products")  are set forth in Exhibit F. NP
will  replace Out of Warranty  OEM  Products  for  SunConnect  and  SunConnect's
Service Providers,  and will repair Out of Warranty OEM Products for SunConnect,
SunConnect's  Service  Providers,  customers,   distributors  and  resellers  in
accordance with the procedures and prices in Exhibit F.

              5.4 TOI. NP will provide SunConnect with the information described
in the "Transfer of Information" attached as Exhibit E, and will comply with the
procedures  set forth  therein.  NP hereby grants  SunConnect  an  unrestricted,
fully-paid  license to use,  duplicate,  and  distribute  any TOI  materials  in
whatever  fashion  SunConnect  or its Service  Providers  deem useful to provide
traning in the use of the OEM Products.

6.0           * "Confidential portion has been omitted and filed separately with
the Commission."

7.0           DISTRIBUTION OF NP PRODUCTS

              7.1 No  Distribution  of OEM  Products  by NP.  NP may not sell or
distribute   the  OEM   Products,   or  any  other   products   containing   any
SunConnect-Unique  Element without the express written consent of the SunConnect
Administrator.

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8.0           PRODUCTION OF OEM PRODUCTS

              8.1  Quality  Assurance.  Attached  hereto  as  Exhibit  J is NP's
Quality  Systems  Manual for FCS and subsequent  shipments for ensuring  quality
standards of the OEM Products.

              8.2 NP  Responsibilities.  Except as set for in Section 8.3 below,
NP will be responsible for all aspects of  manufacturing,  assembling,  testing,
packaging  and  delivery  of  the  OEM  Products  to  the  SunConnect-designated
location(s). Each OEM Product delivered to SunConnect will meet the requirements
set forth in Exhibits A (Product  Specifications),  B (Development  Schedule and
Deliverables),  A-4 (BOM), J (Quality  Systems  Manual),  K-1  (Inbound)Outbound
Packaging Requirements),  K-2 (Engineering Specification for Part Identification
Label), K-3 (Corporate  Shipping Container  Graphics  Guideline),  K-4 (Shipping
Carton Color Standard),  K-5 (Specification  for A SunConnect Color:  SunConnect
Medium  Purple),  K-6  (Routing  Guide)  and  Section  15  (Trademark  License).
SunConnect  shall have the right, on reasonable  notice,  to audit NP's premises
and records to verify compliance with these  requirements.  At least thirty (30)
days prior to NP's distribution of the first copy of each commercial  release of
an OEM Product bearing the Sun Trademarks and Trade Dress (as defined in Section
15  below),   NP  shall   provide   SunConnect's   Administrator   with  written
certification  that NP has  adequately  reviewed and tested such OEM Product and
that it conforms to the  requirements of this Section 8.2. NP shall keep written
records of such testing and make them  available  to  SunConnect  promptly  upon
written request.

              8.3      Other Responsibilities.

                       a.   Compact   Disks.   SunConnect   will   initially  be
responsible  for the  mastering  of the  compact  disk to be included in the OEM
Products.  NP will  purchase  the  compact  disks  from  SunConnect's  vendor in
accordance  with  Section  8.11.  (Nothing  herein  shall  be  deemed  to  limit
SunConnect's  right to continue to order and purchase  products from the vendors
fisted in Exhibit  M.) After the FCS of the OEM  Products,  NP will use its best
efforts to identify and reach terms with a compact disk manufacturer within nine
(9) months of the  Effective  Date,  pursuant to which NP would  master  compact
disks without  SunConnect's  assistance.  NP will promptly provide  SunConnect's
Administrator  with the details of such agreement,  including without limitation
all pricing  terms.  SunConnect  may, at its option and in its sole  discretion,
authorize NP to master compact disks directly,  subject to SunConnect's approval
of content and quality.

                       b. Packaging Artwork. SunConnect shall design the artwork
for the OEM Product packaging. The completed artwork is a SunConnect Deliverable
to NP.

              8.4 Copyright  Notices.  The Documentation  shall bear a copyright
notice in the form (C)Sun  Microsystems 19__. NP shall put a copyright notice on
the software  components of the OEM Products and NP Products  incorporating  the
SunLink  Source  Code  stating  (C)Network  Peripherals  19__,  portions  (C)Sun
Microsystems  19__. NP may put an NP copyright  notice on the board component of
the OEM Products.

              8.5 NP Improvements.  NP agrees to keep SunConnect informed of any
improvements to of replacements for existing NP Products or OEM Products planned
to be made  available  during  the term of this  Agreement.  NP agrees to notify
SunConnect's Administrator of such improvements in writing not less than 90 days
prior to  shipment  of NP  Products  incorporating  such  improvements  to third
parties or customers and shall make available such improvements for OEM Products
at no charge to SunConnect, provided that such improvements do not significantly
affect the form,  fit and  function  of the OEM Product in ways that differ from
any  change  in the form,  fit or  function  of the  corresponding  NP  Product.
SunConnect may elect to incorporate such  improvements  into the OEM Products by
notifying NP in

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writing within 30 days after notification of such improvements. If SunConnect so
notifies  NP  within  the 30  day  period,  then  NP  will  ensure  that  any NP
Improvements  are  incorporated  into OEM  Products at least as early as they am
incorporated into NP Products. The terms of Section 10.2 * "Confidential portion
has been omitted and filed  separately  with the  Commission."  will continue to
apply to any improved OEM Products.

              8.6 NP Modifications.  NP will not implement any changes in design
or  manufacture  that might  affect form,  fit or function of the OEM  Products,
including without limitation,  changes in performance,  maintenance  procedures,
interchangeability,  interconnectability,  reliability or  compatibility  of OEM
Products,  without the prior written consent of a SunConnect  Administrator  and
such consent shall not be unreasonably withheld.

              8.7       Mandatory Changes.

                       a.  "Mandatory  Changes," as used herein means any change
necessary to ensure that OEM Products  comply with the following  standards,  as
such  standards  are  constituted  on the  date of  shipment:  (1)  the  Product
Specification;  (2)  applicable  laws  or  regulations;  or (3)  recognized  and
accepted  commercial safety standards for similar products.  NP will. at its own
expense,  supply  SunConnect or SunConnect's  Service  Providers (as directed by
SunConnect)  parts kits and detailed  rework  instructions  for all OEM Products
purchased by SunConnect affected by any Mandatory Change,  regardless of whether
such OEM Products have been delivered to SunConnect, its customers, resellers or
distributors.

                       b. If a Mandatory Change requires replacement of products
already delivered to SunConnect's  customers,  resellers and distributors,  then
SunConnect or SunConnect's Service Provider(s) shall implement such replacements
in  accordance  with the  reasonable  instructions  provided  by NP. NP shall be
responsible for all necessary and reasonable costs incurred by SunConnect or its
Service  Provider(s) in any  replacement of products  delivered to  SunConnect's
customers, distributors and resellers which is required by Section 8.7(a).

              8.8       O/S and Platform Changes.

                       (a)  "Systems  Changes,"  as used herein means any change
necessary to ensure that NP Products remain  compatible with new versions of the
Sun Operating System and new versions of the Sun platform.  NP will use its best
commercial  efforts to develop Systems Changes.  NP agrees to notify  SunConnect
within a reasonable period of time after the release of a new version of the Sun
Operating  System or Sun Platform of Systems Changes planned for the NP Products
and shall make  available  such System  Changes for OEM Products at no charge to
SunConnect.  SunConnect  may elect to  incorporate  System  Changes into the OEM
Products by notifying NP in writing  within 30 days after  notification  of such
System Changes.  If SunConnect so notifies NP within the 30 day period,  than NP
will ensure that any System Changes are available incorporated into OEM Products
at  least  as early as they are  incorporated  into NP  Products.  The  terms of
Section 10.2 * "Confidential  portion has been omitted and filed separately with
the Commission." will continue to apply to any revised OEM Products.

                       (b)  When  Systems  Changes  am not  planned  for  the NP
Products,  then  SunConnect may request such changes in accordance  with Section
8.9 and the parties will mutually develop a development schedule.

                       (c) NP will  perform all required  compatibility  testing
for all new Sun  Operating  Systems  and  new  Sun  platforms  at NP's  expense.
SunConnect  will provide NP with the necessary  equipment  and operating  system
software to perform such testing.

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               8.9     SunConnect Requested and Required Changes.

                       a.  SunConnect  may,  at any  time,  require  changes  in
writing  to any of the  following:  method  of  shipment  or  packing;  place of
delivery,  or the Exhibits marked with an * in Section 29.8 ("Required Change").
In  addition,  SunConnect  may,  at any  time,  request  changes  to  applicable
drawings,  designs or specifications,  or to ensure compatibility with other new
or modified SunConnect products ("Requested Change").

                       b. If a Required or Requested  Change  causes an increase
in the cost or the time  required by NP for  performance  of any purchase  order
issued under this  Agreement and NP so notifies  SunConnect in writing,  then if
SunConnect  wishes such  Requested or Required  Change to be made,  an equitable
adjustment  will be made in the  price  or  delivery  schedule  or both  and the
Agreement and/or any applicable  purchase order will be modified  accordingly in
writing.  Claims by NP for adjustment due to a SunConnect  Requested or Required
Change order must be made within fifteen (15) days from the date of NP's receipt
of the change order;  provided,  however,  that such period may be extended upon
the written approval of SunConnect.

                       c.  If  any  SunConnect   Requested  or  Required  Change
requires reworking of any OEM Product already delivered to SunConnect,  NP will,
at SunConnect's  expense,  supply  components for all OEM Products  purchased by
SunConnect affected thereby.

              8.10  NP  Purchase  from  SunConnect  Suppliers.  NP may  purchase
specific components for the OEM Products from specified  SunConnect suppliers as
SunConnect's  authorized  sub-contractor  as set  forth on  Exhibit  M. NP shall
comply with all  applicable  provisions  of the  SunConnect  contract  with such
suppliers.  SunConnect  agrees  to  provide  NP  with  the  text  of  applicable
provisions.  All items so purchased must be used in OEM Products, and may not be
used in NP Products or other  products  without the express  written  consent of
SunConnect.

              8.11 NP  Sub-Contractors.  NP may  subcontract  the  production of
components  of the OEM Products to  suppliers,  provided that each such supplier
agrees to and fulfills all quality and compliance requirements set forth in this
Agreement and its Exhibits.

              8.12 Future  Cooperation.  The parties  agree to work  together to
evaluate and develop new  technologies  and products for FDDI network  interface
cards as mutually  agreed to. If new  products are  developed,  the parties will
negotiate  an  agreement  with terms as similar as possible  to this  Agreement,
except that product  specifications,  pricing and leadtimes may be different for
such new products.

9.0           PURCHASE OF OEM PRODUCTS

              9.1 Orders.  SunConnect  shall order OEM  Products by  telecopier,
telephone,  electronic  data  interchange  ("EDI") as specified in Section 16.3,
and/or in writing on SunConnect's  standard  purchase order form. Each telephone
order shall be  confirmed  by a hard-copy  purchase  order  within five (5) days
after the placement of such telephone order. All orders for OEM Products will be
governed  by  this  Agreement  and  shall  not  be  governed  by  the  terms  of
SunConnect's  or NP's purchase order,  acceptance or other form documents.  This
Agreement does not constitute a purchase order  SunConnect shall be liable under
this  Agreement  only for those OEM Products  covered by a  SunConnect  purchase
order.

              9.2 Sale to SunConnect  Subcontractors.  NP shall sell and license
OEM  Products  under  the  pricing  and terms  set  forth in this  Agreement  to
SunConnect-designated  subcontractors  ("Subcontractors")  upon express  written
authorization  by  SunConnect.  SunConnect  shall be  liable to pay only for OEM
Products  ordered by and invoiced  directly to SunConect and shall not be liable
to pay for

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any OEM Products ordered by Subcontractors. All purchases made by Subcontractors
shall be added to SunConnect's cumulative volume of OEM Products purchased.

              9.3  Forecasts.  SunConnect  shall  supply  a  six  month  rolling
forecast by the 10th day of each month,  with the first two months broken out by
week.  The  first  two  months  shall be backed  by a  purchase  order  which is
non-cancelable.  The third month of the forecast is a firm commitment, which may
be rescheduled as specified in Section 14.1.

              9.4 SoftwarelFirmware  License. With respect to OEM Products which
contain NP software and/or firmware (Software').  NP hereby grants to SunConnect
a perpetual,  nontransferable,  nonexclusive license to use, market,  distribute
and  sublicense  the use of the  Software  in  object  code  form  only,  and to
authorize  others  to do the  foregoing,  solely in  conjunction  with the sale,
license, loan of distribution of the OEM Products.

              9.5 * "Confidential  portion has been omitted and filed separately
with the Commission."

10.0          PRICE OF OEM PRODUCT(S).

              10.1  Pricing.  The prices and  applicable  discounts  for the OEM
Products  are  specified  in Exhibit N. The prices set forth in Exhibit N do not
include freight or taxes, and all applicable  federal,  state and local sales or
use taxes shall be separately stated on NP's invoice. SunConnect shall be liable
to NP for the payments of such sales or use taxes only if SunConnect  has failed
to comply with the statutory resale tax certificate requirements of states where
appropriate.

              10.2 * "Confidential portion has been omitted and filed separately
with the Commission."

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              10.3 * "Confidential portion has been omitted and filed separately
with the Commission."

              10.4 Price  Notification.  During the tenth week of each  calendar
quarter, NP will provide to a SunConnect Administrator a written confirmation of
the price of each OEM  Product  and  component  thereof,  as such price has been
determined  in  accordance  with  Sections 10.1 10.3. NP will provide such price
confirmation whether or not any price has changed from the previous quarter. The
prices set forth in such  notification  will be deemed  accepted  if  SunConnect
fails to notify NP in writing of any  disagreement  within 10 days after receipt
of the notification by the SunConnect Administrator.

              10.5 Special Requests. If SunConnect requests NP to manufacture or
deliver OEM Products to SunConnect on special terms which will cause an increase
in  the  manufacturing   cost  to  NP,  then  NP  shall  notify  the  SunConnect
Administrator in writing, specifying the additional costs and available options.
SunConnect shall have 10 day to accept or reject such additional costs.  Failure
to respond shall be deemed a rejection of such additional costs and such special
terms.

11.0          SHIPMENT AND DELIVERY

              11.1 Leadtimes and Delivery Dates.  Leadtimes for OEM Products are
set forth in Exhibit N. NP agrees to accept and deliver the full quantity of OEM
Products  ordered on the delivery dates  requested by SunConnect,  to the extent
that such dates are in  conformance  with  leadtimes  set forth in Exhibit N, or
otherwise  mutually-agreed  to  delivery  dates  ("Agreed  Delivery  Date").  If
SunConnect  requests  delivery  dates  earlier than the  leadtimes  set forth in
Exhibit  N, NP  agrees  to use  commercially  reasonable  efforts  to meet  such
requested  delivery dates or to propose the earliest possible alternate delivery
dates.

              11.2  Delayed  Delivery  Dates.  If NP is  unable to  deliver  OEM
Product on the Agreed  Delivery Date, NP shall promptly  notify the  appropriate
SunConnect  materials  management  personnel (as  identified  by the  SunConnect
Administrator),  giving  SunConnect a new delivery date.  SunConnect may, at its
option, (1) accept the new delivery date, (2) reschedule the purchase order, (3)
require NP, at NP's expense,  to use any expedited  transportation  methods that
are available to deliver the OEM Products to SunConnect or a designated customer
via Drop Ship as quickly  as  possible,  or, if new date is greater  than 5 days
after Agreed Delivery Date, (4) cancel the purchase order without liability.  In
all cases,  NP agrees to respond to  SunConnect's  purchase orders within 3 days
after receipt. Time is of the essence with respect to this agreement.

              11.3  Overshipments.  SunConnect  will  pay  only  for  quantities
ordered.  At SunConnect's  option,  overshipments will be returned to NP at NP's
risk freight  collect.  NP shall credit  SunConnect  with the amount of outbound
freight attributable to such returned overshipments.

              11.4 Early  Shipments.  For OEM Products  delivered more than five
(5) days in advance of the Agreed  Delivery  Date(s),  SunConnect may (i) return
such OEM Products to NP freight

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collect,  or (ii) accept such OEM Products  with  payment  based upon the Agreed
Delivery Date(s) and not the date of receipt by SunConnect.

              11.5  Partial  Deliveries.  NP shall  use  reasonable  efforts  to
deliver  the full number of OEM  Products  ordered by  SunConnect  on the Agreed
Delivery  Date(s).  If NP is unable to deliver the full  number of OEM  Products
ordered,  NP shall notify SunConnect  promptly,  and SunConnect shall consent to
such partial  delivery  provided  that the Agreed  Delivery  Date is met for the
deliverable  portion.  Partial deliveries shall be separately invoiced by NP and
paid for by SunConnect without regard to subsequent deliveries.  The undelivered
portion of the order shall be subject to the terms of Section 11.2.

              11.6 * "Confidential portion has been omitted and filed separately
with the Commission."

               11.7     Shipping Documents and Markings.

                       a. Shipping  labels and  containers  must comply with the
requirements set forth in Section 8.2 above.

                       b. Shipping  documentation must be complete and accurate.
This  documentation  must include the SunConnect part number, the manufacturer's
part number, the total quantity shipped,  the SunConnect  purchase order number,
the number of shipping  containers  in the  delivery,  the quantity per shipping
container,  indication  of  partial/complete  shipment and the  waybill/Bill  of
Lading number.

              11.8  Shipping  Reports.  NP will deliver to  SunConnect  shipping
reports specified in Exhibit O.

              11.9 * "Confidential portion has been omitted and filed separately
with the Commission."

              11.10  *   "Confidential   portion  has  been  omitted  and  filed
separately with the Commission."

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              11.11 Import and Export Licenses. NP shall provide all information
under its control  which is  necessary  or useful for  SunConnect  to obtain any
export or  import  licenses  required  for  SunConnect  to ship or  receive  OEM
Products,  including, but not limited to, U.S. customs certificates of delivery,
affidavits of origin, and U.S. Federal Communications Commissions identifier, if
applicable.  The  parties  agree  not to  export  or  re-export,  or cause to be
exported  or  re-exported,  the OEM  Product,  any  technical  data of any  kind
received  hereunder,  or the direct  product  of such  technical  data,  without
complying with the laws of the United States, regulating the same.

              11.12 End of Term Orders.  Purchase  orders  placed by  SunConnect
prior to the end of the Term for which the Agreed Delivery Date(s) are after the
end of the Term shall  continue to be governed  by the terms and  conditions  of
this Agreement.

12.0          PAYMENT

              12.1 Invoice Contents.  Upon shipment of OEM Products ordered,  NP
will submit an invoice  showing invoice number and date,  remit to address,  the
purchase order number, SunConnect part number,  description of each OEM Product,
quantity of each OEM Product,  unit  prices,  each  applicable  tax and extended
totals.

              12.2  Payment  of  Invoice.  SunConnect  shall  be  invoiced  upon
shipment of OEM Product and shall pay each invoice when due. Payment terms are *
"Confidential   portion  has  been  omitted  and  filed   separately   with  the
Commission."  days after shipment to SunConnect's  "Ship to" location of the OEM
Product  covered by the  invoice,  unless  SunConnect  notifies  NP prior to the
payment due date that such OEM  Products am defective  or  nonconforming  in any
manner.

              12.3 Payment Not  Acceptance.  SunConnect's  payment of an invoice
does not  constitute  acceptance  of OEM  Products.  Invoices will be subject to
adjustment for errors, shortages, defects in OEM Products or other failure of NP
to meet the requirements of this Agreement.

13.0          ACCEPTANCE AND QUALITY

              13.1  Compliance  with  Standards.  Each OEM Product  delivered to
SunConnect  shall meet all  requirements  set forth in Section  8.2.  SunConnect
shall not be required  to accept any such OEM  Product  which does not meet such
standards.

              13.2 Audits. SunConnect or its agent may perform reasonable source
inspection and quality assurance audits at NP's facility. SunConnect retains the
right to  periodically  audit NP's  facilities and records to validate  incoming
quality data, test yield data and manufacturing yield data.

              13.3 Quality  Reports.  Within 7 days after the end of each month,
NP shall provide to a SunConnect  Administrator  a written  quality  report in a
form approved by a SunConnect Administrator for the immediately preceding month.

              13.4 Effect of Defects.  If any of the OEM Products are  defective
in  material  or  workmanship  or are  otherwise  not  in  conformity  with  the
requirements of this Agreement,  NP and SunConnect will work together to develop
a plan to correct such defects or nonconformities. If a plan has not been agreed
to within five (5) business days, then SunConnect may either:

                       a. Reject and return an entire lot(s) for  replacement in
which event NP shall,  at NP's expense,  replace  Product(s)  within twenty (20)
working days;

                       b. Perform  one-hundred  percent (100%) testing,  at NP's
expense, retain all conforming Product and reject all nonconforming Product. Any
Product that has been rejected or

                                       10

<PAGE>


required to be corrected  must be replaced or corrected by and at the expense of
NP promptly after notice; or

                       c. Accept it with a mutually  agreed-upon  adjustment  in
price.

              13.5  Returns.  NP  shall  issue a Return  Material  Authorization
("RMA")  within  two (2)  business  days  after  SunConnect's  request to return
defective OEM Products  pursuant to the product warranty  procedure as described
under Section 23. Any  additional  terms of the RMA procedure  shal1 be mutually
agreed to between the parties.  SunConnect shall include the RMA number with all
returns.

14.0          RESCHEDULING AND CANCELLATION.

<TABLE>
              14.1  Rescheduling.  SunConnect  may reschedule all or any part of
any purchase  order or forecast  under this Agreement for a new delivery date up
to ninety (90) days after the Agreed Delivery Date in accordance with the limits
as follows:

<CAPTION>
------------------------------------- ---------------------------------- -----------------------------------
Number  of  Days   Prior  to  Agreed  Maximum  Dollar Value of Purchase  Date  on  Which  Delivery  Must Be
Delivery Date  Reschedule  Notice is  Order Which May Be Rescheduled     Accepted
Received
------------------------------------- ---------------------------------- -----------------------------------
<S>                                   <C>
            61 - 90 Days              * "Confidential portion has been omitted and filed separately with
                                      the Commission."

------------------------------------- ----------------------------------------------------------------------
            0 - 60 Days               * "Confidential portion has been omitted and filed separately with
                                      the Commission."

------------------------------------- ----------------------------------------------------------------------
</TABLE>


Purchase orders may not be rescheduled more than twice.

                       14.2 *  "Confidential  portion has been omitted and filed
separately with the Commission."

                       14.3 *  "Confidential  portion has been omitted and filed
separately with the Commission."

                       14.4 *  "Confidential  portion has been omitted and filed
separately with the Commission."

15.0          TRADEMARK LICENSE

              15.1   Trademarks  And  Trade  Dress.   The  packaging,   artwork.
documentation  and other  materials  provided to NP by SunConnect  hereunder may
contain  Sun   Microsystems,   Inc.  ("Sun")   trademarks  and  or  trade  dress
requirements ("Sun Trademarks and Trade Dress").

              15.2 Grant Of License.  SunConnect  grants to NP a  non-exclusive,
royalty-free,  nontransferable  license  for  the  term  of  this  Agreement  to
reproduce  the  Sun  Trademarks  and  Trade  Dress  in the  United  States  (the
"territory")  solely for the purpose of producing  the OEM Products for delivery
to

                                       11

<PAGE>


SunConnect  hereunder.  NP is  granted  no other  right,  title or  license.  In
particular, NP shall not use the Sun Trademarks or Trade Dress on any item other
than the OEM Products; shall not deliver any item marked with the Sun Trademarks
or Trade Dress to any entity other than  SunConnect or its affiliated  companies
unless specifically directed in writing by SunConnect's Administrator; and shall
have no right to sublicense the Sun Trademarks or Trade Dress.

              15.3 Territory. NP shall not use the Sun Trademarks or Trade Dress
outside the United States (the "Territory") without the prior written consent of
Sun's  Administrator.  SunConnect may refuse to extend the Territory in its sole
discretion.

              15.4 Quality Standards.  NP shall use the Sun Trademarks and Trade
Dress only on  Software  Products  that  conform to the  standards  set forth in
Section 8.2, including the certification requirement therein.

              15.5  Trademark  Usage.  NP shall not modify the Sun Trademarks or
Trade Dress in any fashion  whatsoever  without written  instructions from Sun's
Administrator.  NP will not place any NP or third party  trademark,  trade name,
logo or other  identifying  material  on the OEM  Products  without  the written
consent of SunConnect's Administrator.

              15.6  Protection Of The Sun  Trademarks.  Sun is the sole owner of
the Sun Trademarks and Trade Dress and all goodwill associated  therewith.  NP's
use of the Sun  Trademarks  and Trade Dress inures solely to the benefit of Sun.
NP shall not do anything  that might harm the  reputation or goodwill of the Sun
Trademarks or Trade Dress.  NP shall not challenge Sun's rights in or attempt to
register the Sun  Trademarks or Trade Dress,  or any other name or mark owned by
Sun or substantially  similar thereto. NP shall take no action inconsistent with
Sun's  ownership of the Sun  Trademarks  and Trade  Dress.  if it at any time NP
acquires any rights in, or registration  or application  for, the Sun Trademarks
or Trade  Dress by  operation  of law or  otherwise,  it will  immediately  upon
request by Sun or SunConnect and at no expense to Sun or SunConnect, assign such
rights,  registrations,  or applications to Sun, along with any and all goodwill
associated  with the Sun  Trademarks  and Trade  Dress.  The  parties  agree and
acknowledge  that Sun remains  responsible for the protection and maintenance of
the Sun Trademarks and Trade Dress. NP will, if requested by SunConnect, provide
assistance  in matters  relating to this  Trademark  License,  including but not
limited to (a) giving prompt written notice to SunConnect's Administrator of any
known or potential  infringement  of the Sun Trademarks or Trade Dress,  and (b)
cooperating  with  SunConnect in the  preparation and execution of any documents
necessary  to record  this  Trademark  License  with the  appropriate  trademark
authorities.  SunConnect  shall reimburse NP for the reasonable costs associated
with providing such assistance,  except to the extent that any such costs result
from a  breach  of this  Agreement  by NP,  NP shall  not  commence  any  action
regarding the Sun Trademarks or Trade Dress without  SunConnect's  prior written
consent.

              15.7 Disclaimer Of Warranties By SunConnect.  SUNCONNECT  MAKES NO
WARRANTIES OF ANY KIND  RESPECTING THE SUN TRADEMARKS OR TRADE DRESS,  INCLUDING
THE  VALIDITY  OF SUN'S  RIGHTS  IN THE SUN  TRADEMARKS  OR  TRADE  DRESS IN ANY
COUNTRY, AND DISCLAIMS ANY AND ALL WARRANTIES RELATING TO THE SUN TRADEMARKS AND
TRADE DRESS THAT MIGHT OTHERWISE BE IMPLIED BY APPLICABLE LAW

              15.8 * "Confidential portion has been omitted and filed separately
with the Commission."

                                       12

<PAGE>


16.0          PROGRAMS AND SERVICES

              16.1 POU/DTS Program.  The parties will negotiate in good faith to
develop  with NP a POU/DTS  Program.  Such  program  shall be designed to supply
SunConnect  with OEM  Product(s)  that  meets  established  quality  levels  and
eliminate incoming inspection.

              16.2 Just In Time Delivery Program.  The parties will negotiate in
good faith to develop with NP a Just In Tune delivery program ("JIT").  Such JIT
shall be designed to supply  SunConnect  with the OEM  Product(s) at the time at
which  SunConnect  requires  such OEM  Product(s)  so as to reduce the inventory
which SunConnect is required to retain in order to meet its production needs.

              16.3 Electronic Data Interchange (EDI) Program.  Should SunConnect
and NP enter into an EDI Program which is designed to allow SunConnect and NP to
transmit  electronically all data and information  necessary to conduct business
between the two companies,  it shall be pursuant to the terms and conditions set
forth in Exhibit P.

              16.4 Score Card  Criteria.  The Score Card is a  measurement  tool
used to rate NP's overall performance,  including,  but not limited to, quality,
delivery,  technology,  price and service. NP acknowledges that, at SunConnect's
option, NP may be evaluated in accordance therewith and agrees to cooperate with
SunConnect in this  process.  A copy of  SunConnect's  Score Card criteria and a
sample of the ScoreCard has been provided to NP.

              16.5 Co-Marketing. The parties may enter into agreements regarding
co-marketing of the OEM Products.

17.0          SAFETY COMPLIANCE AND STANDARDS

              17.1 Specification. NP warrants that each OEM Product delivered to
SunConnect will meet the requirements of Section 1.4 (Compliance with standards)
of Exhibit A-1 throughout the Term.  Design changes on OEM Products which affect
compliance  status,  and design changes which may be required due to a change in
the compliance standards,  shall be submitted by NP for reapproval at NP's cost.
NP shall provide confirmation of such approvals to SunConnect's Administrator or
Administrator's  designee  within  thirty  (30)  days  after  execution  of this
Agreement  or  receipt  of  approval,   as   applicable.   Such  approvals  must
specifically identify the OEM products as SunConnect products.

              17.2  Applicable Law. NP warrants and represents that OEM Products
comply with all  applicable  federal,  state,  administrative  and foreign laws,
statutes and regulations for all countries to which NP distributes its products.
NP agrees to notify SunConnect of any post-sale  warnings,  retrofits or recalls
which NP implements with respect to any of the OEM Products.

              17.3 ISO Certification. NP will use its best efforts to become ISO
9001 certified  within 18 months from the Effective Date of this Agreement,  and
to remain ISO - certified throughout the term of this Agreement.

                                       13

<PAGE>


18.0         DISCONTINUED PRODUCTS

              18.1 Product  Discontinuance by NP. NP will not discontinue any of
the OEM  Products  during the Initial Term of this  Agreement  without the prior
written consent of SunConnect's  Administrator.  During any renewal term, NP may
discontinue  the  manufacture  and sale of an OEM  Product  upon six (6) month's
prior written notice to SunConnect, so long as NP does not sell such OEM Product
to any  other of its  customers  after  it stops  selling  such OEM  Product  to
SunConnect. Within sixty (60) days after receipt by SunConnect of written notice
of such discontinuance ("Notice Date"), SunConnect may place and NP shall accept
a binding.  non-cancelable  written commitment for such discontinued OEM Product
for delivery over a one (1) year period  following the Notice Date. OEM Products
to be delivered  during this one year period may be  rescheduled as specified in
Section 14.1, provided that no OEM Product may be rescheduled for delivery after
the first  anniversary  of the Notice  Date.  Discontinuance  of any OEM Product
shall also be subject to the provisions of Section 19 of this Agreement.

              18.2 Component  Discontinuance by NP's Vendors.  If NP learns that
any of the  components  in an OEM  Product is being  discontinued  and cannot be
replaced with a component with similar functionality at the same or lesser cost,
then NP shall notify the  SunConnect  Administrator.  NP will use all reasonable
commercial efforts to develop an appropriate  solution,  subject to SunConnect's
reasonable approval.

              18.3  Product   Discontinuance   by  SunConnect.   SunConnect  may
discontinue any OEM Product on six (6) months notice to NP.

19.0          * "Confidential portion has been omitted and filed separately with
the Commission."

                                       14

<PAGE>


20.0          PROPRIETARY INFORMATION

              20.1 Duty of Non-Disclosure. Each party shall, at all times during
the term of this Agreement and for five (5) years thereafter, keep in confidence
and trust all of the other's Proprietary  Information  disclosed to it and shall
not use such Proprietary  Information other than as permitted under the terms of
this Agreement,  nor shall either party disclose Proprietary  Information of the
other to any third party except as permitted hereunder without the prior written
consent of the  disclosing  party.  Both parties  acknowledge  that  information
disclosed  orally and announced at the time of such disclosure which is specific
to the design and properties of the SunLink Source Code and the Escrow Materials
(as defined in Section 19.4) shall be considered Proprietary Information without
the need for a subsequent writing summarizing the contents of the disclosure.

              20.2  Standard of Care.  Each party shall use the same standard of
care to prevent  disclosure of the  Proprietary  Information  of the other party
which it uses to safeguard  its own  valuable  confidential  information  and/or
trade  secrets,  and in no event km than a  reasonable  degree  of care for such
information;  provided,  however,  that  neither  party  shall be liable for any
inadvertent or unauthorized  disclosure of Proprietary  Information occurring if
it exercises at least the standard of care set forth above to prevent disclosure
and  takes   reasonable  steps  to  mitigate  any  damage  and  prevent  further
disclosure.  Each party shall promptly notify the other if it becomes aware that
the other party's Proprietary  Information has been or is likely to be disclosed
without authorization under this Agreement.

              20.3  Advising  Employees.  Each party dull  inform its  employees
having access to the Proprietary Information of such party's limitations, duties
and  obligations  regarding   non-disclosure  and  copying  of  the  Proprietary
Information  and shall obtain their  agreement,  whether by means of existing or
new agreements, to comply with those limitations, duties and obligations.

                                       15

<PAGE>


              20.4 Exceptions.  Notwithstanding any provisions herein concerning
non-disclosure and non-use of the Proprietary  Information,  neither party shall
have any  obligations  concerning the disclosure or use of any such  information
which: (a) is already known to receiving party other than by previous disclosure
under an obligation of confidentiality; (b) is or becomes publicly known through
publication,  inspection  of product or otherwise and through no wrongful act of
the  receiving  party,  (c) is  received  from a  third  party  without  similar
restriction and without breach of this  Agreement,  (d) is disclosed or released
for disclosure by the disclosing  party to others  without  restriction,  (e) is
disclosed in accordance  with the specific  written  approval of the  disclosing
party; or (f) has been independently developed by the receiving party.

              20.5  Disclosure  Required by Law.  Either  party may disclose any
Proprietary  Information  to the  extent  necessary  to  comply  with  any  law,
regulation or other governmental requirement provided that such party previously
notifies the other party so that it may take appropriate protective measures.

              20.6 Future Development.  Each party to this Agreement understands
that the party  receiving  Proprietary  Information  may now or in the future be
developing  proprietary   information   internally,   or  receiving  proprietary
information  from third parties in  confidence  that may be similar to disclosed
Proprietary  Information.  Accordingly,  nothing  in  this  Agreement  shall  be
construed as a  representation  or inference  that the receiving  party will not
develop  products,  for  itself  or  others,  that  compete  with the  products,
processes,  systems  or  methods  contemplated  by  the  disclosed  Confidential
Information.

              20.7     Inventions.

                       a. All discoveries. improvements and inventions conceived
or first reduced to practice, as those terms are used before the U.S. Patent and
Trademark  Office,  in the  performance  of  this  Agreement  ("Inventions")  by
SunConnect's  personnel  shall be the sole and exclusive  property of SunConnect
and SunConnect  shall retain any and all rights to file any patent  applications
thereon.  All  Inventions  of NP's  personnel  shall be the  sole and  exclusive
property  of NP and NP  shall  retain  any and all  rights  to file  any  patent
applications thereon.

                       b. *  "Confidential  portion  has been  omitted and filed
separately with the Commission."

                       c. The provisions of this Section 20.7  regarding  rights
of ownership * "Confidential  portion has been omitted and filed separately with
the  Commission.",  sharing of expenses and licenses shall also apply to work of
the parties and results obtained with respect to  copyrightable  subject matter,
mask work rights and trade secrets.

21.0          * "Confidential portion has been omitted and filed separately with
the Commission."

                                       16

<PAGE>


22.0          INSURANCE. During the term of this Agreement, NP, at its sole cost
and expense,  shall carry and maintain  Commercial  General Liability  Insurance
with an "A" rated  company or companies  insuring  NP, its agents,  employees or
associates  covering  all  operations  of NP  including,  but  not  limited  to,
Products/Completed  Operations and Blanket  Contractual  Liability  specifically
covering the  indemnification  provisions  in Section 21.0,  against  claims for
personal and bodily injury and property  damage with a combined  single limit of
$2,000,000.

23.0          WARRANTY.

              23.1 Non-Infringement.  NP hereby warrants that: (i) has the right
and power to enter into this  Agreement  and to grant the  rights  and  licenses
granted to SunConnect hereunder; and (ii) the OEM Products will not infringe any
patent,  copyright,  trade secret or other  intellectual  property  right of any
third party.

              23.2 Product Warranty. NP warrants that all OEM Products delivered
hereunder are new, unused and will perform in accordance with the Documentation,
and will achieve any function  described  therein,  will be free from defects in
design, material and workmanship and will substantially

                                       17

<PAGE>


comply with the  requirements  of this Agreement for a period of * "Confidential
portion has been omitted and filed  separately  with the  Commission."  from the
date of acceptance  by SunConnect of OEM Products.  When any OEM Products do not
meet the foregoing warranty, and SunConnect or its Service Providers so notifies
NP in writing  within the  warranty  period,  NP will  repair or replace the OEM
Product as quickly as  possible,  but in no event  later than  twenty  (20) days
after receipt of notification or as otherwise agreed to between the parties.  NP
shall  have no  obligation  hereunder  to make  repairs  or  cause  replacements
required through normal wear and tear.

              23.3 Disclaimer.  EXCEPT FOR THE EXPRESS WARRANTIES STATED IN THIS
AGREEMENT, NP MAKES NO ADDITIONAL WARRANTIES,  EXPRESS, IMPLIED OR STATUTORY, AS
TO  ANY  MATTER   WHATSOEVER.   IN   PARTICULAR,   ANY  AND  ALL  WARRANTIES  OF
MERCHANTABILITY  AND FITNESS FOR A PARTICULAR PURPOSE ARE EXPRESSLY  DISCLAIMED.
NO PERSON IS AUTHORIZED  TO MAKE ANY OTHER  WARRANTY OR  REPRESENTATION  ON NP'S
BEHALF  CONCERNING THE PERFORMANCE OF THE OEM PRODUCTS OTHER THAN AS PROVIDED IN
THIS AGREEMENT.

24.           TERM AND TERMINATION

              24.1  Term.   Subject   to  the   provisions   of   Section   24.1
("Assignment"),  this  Agreement  shall commence on the Effective Date and shall
continue for * "Confidential  portion has been omitted and filed separately with
the  Commission."  ("Initial  Term"),  and thereafter  this  Agreement  shall be
automatically  renewed for  additional  one (1) year periods unless either party
gives  written  notice  of  termination  at least  sixty  (60) days  before  any
anniversary  of the  execution  date after the end of the Initial Term or unless
sooner terminated in accordance with the provisions hereof (the "Term").

              24.2  Termination  by Either  Party.  Either party may, by written
notice,  and/or  suspend its  performance  under this  Agreement,  or cancel any
purchase hereunder without penalty, if the other party:

                       a.  fails to comply  with any of the  material  terms and
conditions of this Agreement,  the other party may terminate this Agreement upon
thirty (30) days' written  notice to the  defaulting  party  specifying any such
breach,  unless within the period of such notice, all breaches specified therein
shall have been  remedied  or, for breaches  which by their nature  require more
than thirty (30) days to remedy,  the parties  shall have agreed upon a plan for
the defaulting party to remedy such breaches.

                       b.   becomes   bankrupt,   becomes  the  subject  of  any
proceedings  seeking  relief or  reorganization  which are not stayed  within 60
days, or makes an assignment for the benefit of creditors.

              24.3  Negotiation of Disputes.  Both parties agree to negotiate in
good faith the  settlement  of any dispute  that may wise under this  Agreement.
Pending  negotiations toward settlement of any dispute, NP agrees to continue to
develop,  fabricate,  and deliver OEM Products under the terms of this Agreement
and  SunConnect  agrees to make  payments on  invoices  due in  accordance  with
Section 12.

              24.4 Effect of  Termination.  If this  Agreement is terminated for
NP's default,  SunConnect  may, at its sole option  require NP to transfer title
and to deliver to  SunConnect,  in the  manner  and to the  extent  directed  by
SunConnect,  (i) all  completed  OEM  Products  not yet  delivered  and (ii) any
partially  completed OEM Products and materials that NP has produced or acquired
for the  performance  of the  terminated  portion.  Payment for OEM Products and
materials  delivered to and accepted by SunConnect under this Section will be at
a price (not to exceed the contract price) agreed upon by NP and SunConnect.

                                       18

<PAGE>


              24.5 No Damages  for  Termination.  Neither  party  shall have the
right to recover  damages or  indemnification  of any nature,  whether by way of
lost profits, expenditures for promotion, payment for goodwill or otherwise made
in  connection  with the business  contemplated  by this  Agreement,  due to the
expiration  or permitted or lawful  termination  of this  Agreement.  EACH PARTY
WAIVES AND RELEASES THE OTHER FROM ANY CLAIM TO  COMPENSATION  OR INDEMNITY  FOR
TERMINATION OF THE BUSINESS RELATIONSHIP UNLESS SUCH TERMINATION IS IN BREACH OF
THIS AGREEMENT.

25.0          LIMITATION OF LIABILITY.  EXCEPT FOR DAMAGES ARISING UNDER SECTION
21 *  "Confidential  portion  has been  omitted  and filed  separately  with the
Commission.",  IN NO EVENT WILL EITHER  SUNCONNECT  OR NP BE LIABLE TO THE OTHER
FOR THE OTHER'S SPECEAL,  INCIDENTAL,  OR CONSEQUENTIAL  DAMAGES HOWEVER CAUSED,
EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY THEREOF.

26.0          RELATIONSHIP  OF  PARTIES.  Neither  party  shall  have,  or shall
represent that it has, any power, right or authority to bind the other party, or
to assume or create any  obligation or  responsibility,  express or implied,  on
behalf of the other party or in the other party's name.  Nothing  stated in this
Agreement  shall be construed as  constituting  NP and  SunConnect  as partners,
joint  venturers,  or as creating the  relationships  of employer and  employee,
franchiser and franchisee, master and servant, or principal and agent.

27.0          PUBLICITY. Neither party shall publicize or disclose the existence
or terms  and  conditions  of this  Agreement,  or any  transactions  hereunder,
without the express,  prior written consent the other party,  except as required
by applicable law or regulation.

28.0          ADMINISTRATION. SunConnect and NP shall, each assign a primary and
secondary  individual to administer  this Agreement  throughout  its term.  Each
party  shall  inform  the  Administrator  of the other in writing of a change of
Administrator or such Administrator's address or telephone number.  SunConnect's
Administrators shall be:

                       PRIMARY ADMINISTRATOR
                                         Michael Hutchings
                                         SunConnect Technology Enterprises, Inc.
                                         2475 Garcia Avenue, M/S MTV 14-40
                                         Mountain View, CA 94043
                                         Ph: (415) 336-1005
                                         Fax: (415) 336-3156

                       SECONDARY ADMINISTRATOR
                                         Philippe Monot
                                         Sun MicroSystems, Inc.
                                         32, chemin du Vieux Chene
                                         38240 MEYLAN
                                         FRANCE
                                         Ph: (011) 33.76.41.42.43
                                         Fax: (011) 33.76.41.42.41

                       NP's Administrators shall be:
                       PRIMARY ADMINISTRATOR
                                         Mitch Strobin
                                         Network Peripherals, Inc.

                                       19

<PAGE>


                                         Milpitas, Ca. 95035
                                         Ph: (408) 321-7300
                                         Fax: (408) 321-9218

                        SECONDARY ADMENISTRATOR
                                         William F. Kelly
                                         Network Peripherals Inc.
                                         Milpitas, Ca. 9503
                                         Ph: (408) 321-7300
                                         Fax: (408) 321-9218

29.0          GENERAL.

              29.1 Entire  Agreement.  This  Agreement and all of its referenced
Exhibits,  constitutes the entire agreement  between the parties with respect to
the subject matter hereof and supersede all prior  proposals,  negotiations  and
communications, oral or written, between the parties with respect to the subject
matter  hereof.  No deviation from these  provisions  shall be binding unless in
writing and signed by an authorized representative of the party to be charged.

              29.2  Governing  Law.  This  Agreement  shall be  governed  by and
construed in accordance  with the laws of the State of California  applicable to
contracts  made and  wholly  to be  performed  in  California  by  residents  of
California.  The  parties  specifically  agree  that  the  1980  United  Nations
Convention on the International Sale of Goods shall not apply to this Agreement.
The  parties  agree  that the  exclusive  jurisdiction  and venue of any  action
between  the  parties  arising  out of  this  business  relationship,  including
disputes that may arise following  termination of this  Agreement,  shall be the
Superior  Court of California for the County of Santa Clara or the United States
District  Court for the Northern  District of California and each of the parties
hereby submits itself to the exclusive jurisdiction and venue of such courts for
purposes of such action.

              29.3 Assignment.  The rights,  duties and obligations either party
under this Agreement may not be assigned in whole or in part by operation of law
or otherwise without the prior express written consent of the other party, which
consent shall not be unreasonably  withheld, and any attempted assignment of any
rights,  duties or obligations  hereunder without such consent shall be null and
void, except that SunConnect may assign its rights and obligations  without NP's
consent,  to a corporation  or other entity which is controlled by, under common
control with, or controls SunConnect Microsystems,  Inc. This Agreement shall be
binding on the parties and their respective successors and permitted assigns.

              29.4 Notices.  Any notice  required or permitted to be given under
this  Agreement  shall be given  in  writing  and  shall be  deposited,  postage
prepaid,  certified  mail return receipt  requested,  in the United States mail,
addressed to SunConnect or NP as the case may be, at the address set forth above
or at such other address as may be given in writing.

              29.5  Waivers,  Severability.  All rights and  remedies  conferred
under this  Agreement or by any other  instrument or law shall be cumulative and
may be exercised singularly or concurrently.  Failure by either party to enforce
any provision shall not be deemed a waiver of future  enforcement of that or any
other  provision.  In the event that any portion of this Agreement shall be held
to be unenforceable,  the remaining portions of this Agreement shall remain full
force and effect.

              29.6 Force Majeure. Neither party shall be liable for any delay or
failure in performance hereunder caused by acts of God or other cause beyond the
parties  control and without fault or negligence of such party.  In the event NP
fails to deliver OEM Product due to such  causes,  SunConnect  may suspend  this
Agreement  in whole or in part for the duration of the  delaying  cause,  and at
SunConnect's  option,  buy the OEM  Product(s)  elsewhere  and  deduct  from any
milestone  or  commitment  to NP the  quantity  so  purchased.  NP shall  resume
performance  under this  Agreement  immediately  after the delaying

                                       20

<PAGE>


cause ceases and, at  SunConnect's  option,  extend the Initial Term and/or Term
for a period equivalent to the length of time the excised delay endured.

              29.7 Survival.  Notwithstanding  the  termination or expiration of
the term of this Agreement or any renewal period thereof, it is acknowledged and
agreed that those rights and  obligations  which by their nature are intended to
survive such expiration or earlier termination shall survive including,  without
limiting the foregoing, Sections 15.7, 15.8, 20, 21, 23, 25, and 29.

              29.8  Exhibits.  The  following is the list of Exhibits  which are
attached  hereto and  incorporated  herein by this  reference as if set forth in
full:

              Exhibits A, A-1 and A-2: Product Specification

                       A-3    Pre-FCS Quality Assurance Plan
                       A-4    BOM
                       B.     Development Schedule
                       C.     Sun-Unique Elements
                       D.     * "Confidential portion has been omitted and filed
                              separately with the Commission."
                       E.     Support *
                       F.     Procedures  for Board  Replacement  (In and out of
                              warranty)
                       G.     [This Exhibit does not exist]
                       H.     [This Exhibit does not exist]
                       I.     * "Confidential portion has been omitted and filed
                              separately with the Commission."
                       J.     Quality Systems Manual
                       K.-1   Inbound/Outbound Packaging Requirements *
                       K-2    Engineering  Specification for Part Identification
                              Label * -
                       K-3    Corporate Shipping Container Graphics Guideline *
                       K-4    Shipping Carton Color Standard *
                       K-5    Specification  for A SunConnect  Color  SunConnect
                              Medium Purple *
                       K-6    Routing Guide *
                       L.     [This Exhibit does not exist]
                       M.     List  of  SunConnect  Suppliers  from  whom NP can
                              purchase

                                       21

<PAGE>


                       N.     Pricing and Leadtimes
                       0.     Shipping Reports
                       R      EDI *
                       Q.     Information Required for Contingent Manufacturing


IN WITNESS  WHEREOF,  the parties  have caused this  Agreement to be executed by
their duly authorized representatives.

Accepted for SunConnect:                        Accepted for NP:

SUN TECHNOLOGY ENTERPRISES, INC.                NETWORK PERIPHERALS INC.


BY:     ____________________________            BY:     ________________________


NAME:   ____________________________            NAME:   ________________________


TITLE:  ____________________________            TITLE:  ________________________


DATE:   ____________________________            DATE:   ________________________

                                       22

<PAGE>



                          Exhibit A: SunLink FDDI/S3.x
                          Product Specifications

                          ______________________________________________________

                          *  "Confidential  portion  has been  omitted and filed
                          separately with the Commission."



<PAGE>



                          Exhibit A-1: SunLink FDDI/S3.0
                          Product Specifications

                          ______________________________________________________

                          This document  defines the SunLink  FDDI/S 3.0 product
                          line.

                          Please refer to the exhibit A for general  description
                          of the product line.

                          A more detailed specification is given below.


                          *  "Confidential  portion  has been  omitted and filed
                          separately with the Commission."



<PAGE>



                          Exhibit A-2: SunLink FDDI/S3.1
                          Product Specifications

                          ______________________________________________________

                          This document  defines the SunLink  FDDI/S 3.1 product
                          line.

                          Please refer to the exhibit A for general  description
                          of the product line and to the exhibit A-1 for general
                          description of the SunLink FDDI/S 3.0 products.

                          As a general  policy,  the SunLink FDDI/S 3.1 products
                          are a superset of the SunLink FDDI/S 3.0 products. All
                          the  hardware,  driver,  compatibility,   performance,
                          security, compliance, packaging,  documentation, etc.,
                          features   described   in  the   SunLink   FDDI/S  3.0
                          specifications  are  applicable to the SunLink  FDDI/S
                          3.1 products.

                          This document only describes new  additional  features
                          which may not be included  in the  SunLink  FDDI/S 3.1
                          products.

                          All   the    functionalities    described    in   this
                          specification   are  already   described  as  optional
                          features  in the  SunLink  FDDI/S  3.0  specification.
                          Therefore, they may already be included in the SunLink
                          FDDI/S 3.0  products.  Depending on the number and the
                          importance  of the features  which are not included in
                          the  SunLink  FDDI/S  3.0  products  and  remain to be
                          implemented,  SunConnect may decide not to require the
                          release of the SunLink FDDI/S 3.1 product line.


                          *  "Confidential  portion  has been  omitted and filed
                          separately with the Commission."


<PAGE>



                          Exhibit A-3: SunLink FDDI/S3.x
                          Pre-FCS Quality Assurance Plan

                          ______________________________________________________

                          *  "Confidential  portion  has been  omitted and filed
                          separately with the Commission."



<PAGE>


                                   EXHIBIT A-4
                          FDDI/S 3.0 PRODUCT DEFINITION
                 for OEM Products including Derivative Products


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."



<PAGE>



                          Exhibit B: SunLink FDDI/S 3.x
                          Development Schedule and Deliverables

                          ______________________________________________________

                          *  "Confidential  portion  has been  omitted and filed
                          separately with the Commission."



<PAGE>



                          Exhibit C: SunLink FDDI/S3.x
                          Sun Unique Elements

                          ______________________________________________________

                          *  "Confidential  portion  has been  omitted and filed
                          separately with the Commission."



<PAGE>



                                    EXHIBIT D


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."



<PAGE>



                                  SCHEDULE D-1


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."



<PAGE>


                                    EXHIBIT E
                              SUPPORT REQUIREMENTS

1.      DEFINITIONS

         1.1 "Supported  Products" means the SunLink FDDI/S v. 1.0 and 2.0 (both
software and hardware components) and the OEM Products.

         1.2  "Enhancement  Release" means a hardware or software  product which
typically  includes  incremental  improvements to a product's  functionality  or
performance. An Enhancement Release is generally characterized by a single digit
change to the right of the decimal  point  (tenths) of an existing  version of a
software product, i.e., X.(X).X.

         1.3 "Escalation" means a bug, error or other problem with the Supported
Products that is referred by SunConnect to NP.  Escalations  are rated according
to their severity (urgency for response) as follows:

                   o   Meltdown/Priority   1  Escalations   are  problems  which
                       require an  immediate  response,  such as the  customer's
                       system being down.

                   o   Hot/Priority 2 Escalations  are problems  which require a
                       very prompt but not an  immediate  response,  such as the
                       customer's  system being operational but with significant
                       degradation or loss of features.

                   o   Warm/Priority  3  Escalations  are  problem  which do not
                       require   as   immediate   or   prompt  a   response   as
                       Meltdown/Priority 1 or Hot/Priority 2 Escalations because
                       they have a less severe impact on the customer.

         1.4  "Maintenance  Release"  means a release of a  software  product or
component typically to correct errors to enable the product or component to meet
its  published  functionality.  A  Maintenance  Release is usually  developed to
incorporate error corrections and/or patches. A Maintenance Release is typically
characterized by a change in the digit to the extreme right of the decimal point
(hundredths) of an existing version of a software product, i.e., X.X.(X).

         1.5  "Services"  means  the  on-call  support,  escalation  management,
problem determination, maintenance and other software support services.

         1.6 "Workaround"  means a method a customer can use to avoid a problem.
Provides a customer with short term approach to dealing with known problems.

2.      NP SUPPORT OBLIGATIONS

<TABLE>
         2.1 On-Call  Support and  Escalation  Management.  Escalations  will be
referred to NP only by the SunConnect  designated  contact  person(s).  NP shall
provide  engineering  support for  Supported  Products and shall have  available
sufficient  trained and qualified  support  engineers to perform Services within
the response times set forth as follows:

<CAPTION>
-------------------------- -------------------------- ------------------------- ---------------------------
                           SunConnect Callback;
                           NP Engineer Assigned;                                Fix, Workaround, or
                           Initial action Plan to                               Long-Term Action Plan
      Call Priority        SunConnect                      Status Reports       to SunConnect
-------------------------- --------------------------------------------------------------------------------
<S>                        <C>
            1              * "Confidential portion has been omitted and filed separately with the
                           Commission."
-------------------------- --------------------------------------------------------------------------------
            2              * "Confidential portion has been omitted and filed separately with the
                           Commission."
-------------------------- --------------------------------------------------------------------------------
            3              * "Confidential portion has been omitted and filed separately with the
                           Commission."
-------------------------- --------------------------------------------------------------------------------
</TABLE>


Days and hours shall be measured according to continuous business hours. Defined
as:  Monday  through  Friday;  8:00 am to 5:00 pm  Pacific  Time,  excluding  US
nationally  recognized holidays. NP shall meet response time requirements for at
least 90% of calls or reports from SunConnect.



<PAGE>


                                EXHIBIT E (con't)

         2.2 Support  Information  Access: The SunConnect Contact Person will be
responsible  for  assigning   Escalations  to  NP  and  for  providing  NP  with
appropriate background information related to such Escalations. Such information
may include prior analysis or traces performed on the problem,  and any relevant
bug track entries.  All requests by NP for additional  information relating to a
particular  Escalation  shall be addressed to and  responded to by  SunConnect's
Contact Person or such other person as may be designated by SunConnect.

         2.3 Problem  Determination.  NP is responsible  for (i) determining the
nature and cause of an Escalation; and (ii) creating a problem/solution synopsis
for each  Escalation.  The  initial  action plan shall  include the  responsible
engineer assigned, results of the initial investigation,  verifying that it is a
bug and a  fix/workaround  will be provided,  what will be the next steps taken,
when a fix/workaround and update will be provided.

         2.4  Workarounds.  NP shall  attempt  to provide  Workarounds  wherever
appropriate  in response to  Escalations  until a  Modification  can be created.
Appropriate  documentation/integration notes are required. Information regarding
Workarounds shall be submitted by NP to SunConnect.

         2.5 Error  Corrections/Patches.  NP shall  use  reasonable  efforts  to
create Patches to fix Supported  Product defects and test and integrate any such
fix in a format acceptable to SunConnect. NP shall provide Patches to SunConnect
in an object code master copy for duplication and distribution. NP will maintain
a copy of all  Patches  and problem  workarounds  produced  and will make backup
tapes containing all then current source and patch directories for the Supported
Products available for inclusion into the Escrow Account.

         2.6 Transfer of Responsibility.  If ongoing support will be provided by
someone other than NP, NP agrees to make reasonable efforts to notify SunConnect
to  preliminary  details  of the  transition  agreement  a minimum of 90-days in
advance of the  transaction of SunConnect to verify the new owner is prepared to
assume the  responsibility.  NP shall make best  efforts to address  issues that
impact SunConnect's support operations.

         2.7 * "Confidential  portion has been omitted and filed separately with
the Commission."

         2.8 * "Confidential  portion has been omitted and filed separately with
the Commission."

         2.9  Inability  to Support  FDDI 1.0 and 2.0.  If,  after the  diligent
exercise of all reasonable  commercial  efforts NP is unable to provide support,
workarounds;  or spares  for  SunLink  1.0 or 2.0  products,  then NP may notify
SunConnect's  Administrator  and shall provide  SunConnect  with all information
relating to the problem and NP's efforts to resolve such problem. Upon receiving
the  required  notice  and  information   from  NP,   SunConnect   shall  assume
responsibility for developing a solution, with NP's reasonable assistance.



<PAGE>


                                EXHIBIT E (con't)

3.     TRAINING AND CONSULTATION

         3.1 Transfer of Information  (TOI). This Section 3.1 shall not apply to
Maintenance  Releases.  For  each  new  Enhancement  Release,  NP  shall  ensure
SunConnect  receives  Transfer  of  Information  (TOI) ten (10)  weeks  prior to
product release.  The Initial TOI will be completed by FCS Code Freeze. NP shall
offer one train-the-trainer session at a central SunConnect designated facility,
and agrees to videotape the session for SunConnect duplication and distribution.
The Initial TOI will be ready within seven (7) days  following  FCS Code Freeze.
Content of the TOI must include the following to a sufficient level of detail:

                  Product Overview
                           Features
                           Limitations
                           File Descriptions
                           External Specification (Functional Spec)

                  Theory of Operation - detail of installation,  configuration
                           Walk through of product install, config, deinstall

                  Troubleshooting/Diagnostics
                           Known Bugs
                           Common User Errors
                           Troubleshooting tools and Diagnostic techniques
                           Support Center requirements

                  Recommended Support Strategy

         3.2 Customer Training. Upon SunConnect's specific request and with NP's
agreement,  NP shall be available  to  participate  in training of  SunConnect's
distributors  and  resellers in  providing  support  services for the  Supported
Products.  Such  training may include  both  creating  and  conducting  training
programs.

         3.3 Responses to Questions.  NP shall answer technical questions on the
Supported  Products from SunConnect's  "support" alias, or other such restricted
access aliases for support purposes. Until NP is provided access to such aliases
SunConnect  shall monitor such aliases and provide NP the questions that require
answers.  NP agrees to use reasonable  commercial  efforts to meet such response
time guidelines that might exist for such aliases.  Upon  SunConnect's  specific
request,  NP agrees to  assist,  as  appropriate,  in  responding  to  technical
questions from Sunconnect's other aliases for the Supported Products,  including
without  limitation  questions  received  via the "net amb" and  "fddi-interest"
email aliases.

4.      NEW OEM PRODUCT RELEASE SUPPORT DELIVERABLES

         4.1  Support  Deliverables.   This  Section  4.1  shall  not  apply  to
Maintenance  Releases nor to the initial  release of the OEM Products.  For each
new  Enhancement  Release of the OEM  Products,  NP shall  ensure  that  support
deliverables are provided to SunConnect within the time frame required to ensure
support readiness at product introduction:

              Deliverable:                                Weeks Prior to FCS:

              Product/Doc Evaluation Copy                 *  "Confidential
              Product/Structure Information                   portion has been
              Business Information & TOI Information          omitted and filed
              Electronic copy of SW/Docs                      separately with
                                                              the Commission."



<PAGE>


                                EXHIBIT E (con't)

5.          FDDI/S 1.0 and 2.0 Support

         5.1 Level of Support.  NP shall provide  hardware and software  support
for the FDDVS 1.0 and 2.0 products to the extent of  Maintenance  Releases only.
NP shall not be  required  to  manufacture  or make  substantial  changes to the
hardware.  If hardware changes are required and SunConnect requests NP to manage
the change  process  then  SunConnect  will be  responsible  for all  SunConnect
approved expenses incurred by NP.

         5.2  Platforms  Supported.  The  following  system  platforms  shall be
supported:

              * "Confidential portion has been omitted and filed separately with
              the Commission."

         5.3 Operating  Systems  Supported.  The following Sun Operating Systems
shall be supported:

              * "Confidential portion has been omitted and filed separately with
              the Commission."



<PAGE>


         Exhibit F

         _________________________________________________________________

         Network Peripherals
         Out of Warranty Repair Policy 1

                  Hardware Service Details


1        Network  Peripherals  reserves  the right to change any portion of this
         policy in the future.

2        Network  Peripherals  will update  records to reflect the shipment of a
         replacement product. In this case the * "Confidential  portion has been
         omitted and filed separately with the Commission."  warranty will be in
         effect for the replacement product.

3        International  deliveries  will be via the standard  service  available
         through the current carrier.



<PAGE>


                                    EXHIBIT I
                            NETWORK PERIPHERALS INC.
                          SOURCE CODE LICENSE AGREEMENT


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."



<PAGE>



Exhibit N: Pricing and Lead Time    (all prices in US dollars)

________________________________________________________________________________


1.     Standard OEM Products

*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."


2.     Derivative Products

*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."


<PAGE>


Exhibit N: Pricing and Lead Time    (all prices in US dollars)

________________________________________________________________________________


3.     Lead-time for Standard OEM Products will be *  "Confidential  portion has
       been omitted and filed separately with the Commission."


4. Flexibility of increases to Standard OEM Product orders.

                          Table 3  Lead-time vs. % Increase

                            --------------------- ---------------------
                            Lead-time             Max. % Increase
                            --------------------- ---------------------
                            12 weeks +                *  "Confidential
                            8 to 12 weeks         portion   has   been
                            6 to 8 weeks          omitted   and  filed
                            4 to 6 weeks          separately  with the
                            0 to 4 weeks          Commission."
                            --------------------- ---------------------


5.     Support of SunConnect's 1.0 and 2.0 FDDI Sbus product line.

*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."


<PAGE>


                                    EXHIBIT O
                                SHIPPING REPORTS


A. NP shall provide the appropriate  SunConnect  materials  management personnel
(as identified by the SunConnect Administrator) with the following reports.

1. Weekly Performance Against Schedule ("PAS") Reports on the first business day
of each week, even if there has not been any change in the information since the
last PAS Report. The PAS Report shall include the information specified below.

                  A. Product Information. Open purchase orders and line numbers,
SunConnect's  manufacturing part numbers, order date, open quantity, balance due
and order status.

                  B. Shipping  Information.  Agreed Delivery Dates,  actual ship
dates, date of arrival,  shipping method,  and airbill or bill of lading number,
if possible.

2. Outbound  Shipment  Report within  twenty-four  (24) hours of the date of any
shipment of OEM  Products to  SunConnect.  The  Outbound  Shipment  Report shall
include the information specified below.

                  A. Product Information.  Purchase order and line numbers, part
number, quantity

                  B.  Shipping  Information.  Airbill or bill of lading  number,
carrier, expected delivery date, and name of contact person at NP to contact

B. The parties will work together to develop a prototype form of monthly summary
report  prior to shipment of the beta version of the OEM  Products,  and a final
form of monthly summary report prior to FCS of the OEM Products.


<PAGE>


                                    EXHIBIT P
                           ELECTRONIC DATA INTERCHANGE
                                 TRADING PARTNER

1.0      Definitions.

         For the  purposes of this  Exhibit,  the  following  definitions  shall
apply:

         1.1      "EDI" means electronic data interchange.

         1.2      "Transaction  Set" is the collection of data that is exchanged
                  in order to convey meaning between the parties engaged in EDI

         1.3      "Third Party  Network  Service  Provider" or  "Provider"  is a
                  business  entity  that  provides  the  service  of moving  and
                  routing EDI transmissions between trading partners.

         1.4      "Enhanced  Security"  is a process  for  providing  additional
                  security,  beyond  what is offered by the  Provider,  that the
                  trading partners may agree to use.

         1.5      "Transaction Set Control Number" or "Header Control Number" is
                  an  identifying  number in the beginning of a Transaction  Set
                  that can be referenced in exchanging information.

         1.6      "Transaction  Set Control Number" or "Trailer  Control Number"
                  is an identifying  number at the end of a Transaction Set that
                  must have a corresponding Header Control Number.

         1.7      "Functional Group" is a group of similar Transaction Sets that
                  is bounded by a  Functional  Group  header  arid a  Functional
                  Group trailer.

         1.8      `Interchange  Control Number' is an identifying number that is
                  contained  in the  interchange  header and trailer and that is
                  used by the  receiving  party to  acknowledge  receipt of this
                  inter-change header and trailer.

         1.9      "Data  Interchange  Control  Number" is an identifying  number
                  that is contained in the  Functional  Group header segment and
                  Functional  Group trailer segment and is used by the receiving
                  party to  acknowledge  receipt  of a  Functional  Group to the
                  sending  party.  This Data  Element in the header and  trailer
                  segments  provides  the  control  information  needed  by  the
                  trading  partners  associated  with the exchange of Functional
                  Group information.

         1.10     "Data  Element" is the smallest  named unit of  information in
                  the Transaction Set.

         1.11     "Segment"  or  "Data  Segment"  is  an  intermediate  unit  of
                  information in a Transaction Set.  Segments are defined in the
                  segment directory.  The segment directory defines each Segment
                  by its name, purpose and identifier.

         1.12     "Line Item" is a Data Element in the  Transaction  Set that is
                  used to provide a specific type of Hash Total.

         1.13     "Hash Total" is the sum of values of a specific Data Element.

                                       1

<PAGE>


 2.0      Prerequisites.

          2.1     Documents, Standards.

                  Each party may electronically  transmit to or receive from the
                  other party any of the Transaction  Sets listed in Exhibit P-1
                  and Transaction Sets which the parties,  by written agreement,
                  add to said Exhibit. All Transaction Sets shall be transmitted
                  in accordance with the standards set forth in Exhibit P-1. Any
                  transmission of data which is not a Transaction Set shall have
                  no force or effect between the parties.

                  Precise procedures to be used in handling Transaction Sets are
                  incorporated   in  Exhibit  P-1.  These   procedures   include
                  assignment  of  confidential  and unique access codes for each
                  party which will then be used to authenticate each Transaction
                  Set,  along with such other  matters as the  parties  consider
                  appropriate.

         2.2      Third Party Network Service Providers.

                  Transaction  Sets will be transmitted  electronically  to each
                  party  through  any  Provider  with  which  either  party  may
                  contract. The Provider for each party is identified in Exhibit
                  P-1.  Either  party may change its  designated  Provider  upon
                  thirty (30) days prior written notice to the other party.

                  Each party shall be responsible  for the costs of any Provider
                  with which it contracts.

          2.3     System Operations.

                  Each party, at its own expense, shall provide and maintain the
                  equipment,   software,   services  and  testing  necessary  to
                  effectively and reliably transmit and receive documents.

                  If  Provider  is down  and this  prevents  either  party  from
                  meeting the pickup or delivery frequency agreed to, that party
                  must notify the other party the same day.

          2.4     Security Procedures.

                  Each party shall  properly use security  procedures  which are
                  reasonably  anticipated to: (a) ensure that all  transmissions
                  of  Transaction  Sets  are  authorized  and  (b)  protect  its
                  business records and data from improper  access.  Both parties
                  agree to preserve and  safeguard  the  confidentiality  of all
                  data  exchanged via EDI, and will not disclose any data to any
                  third  party,  individual  or  corporation  without the owning
                  party's prior written consent.

          2.5     Electronic Signatures.

                  The  parties  may  agree to apply  special  protection,  where
                  permissible,  by encryption or by other means,  to some or all
                  data  exchanged   between  them.  If  special   protection  is
                  required, it will be identified in Exhibit P-1.

3.0       Transmissions.

          3.1      Proper Receipt.

                  Transaction  Sets  shall not be  deemed to have been  property
                  received,  and no  Transaction  Set  shall  give  rise  to any
                  obligation,  until  accessible to the receiving  party at such
                  party's electronic mailbox.

                                        2

<PAGE>


          3.2      Verification.

                  Upon receipt of any Transaction Set, the receiving party shall
                  promptly and properly transmit a functional  acknowledgment in
                  return  within  one  (1)  business  day  after  receipt  of  a
                  Transaction Set.

          3.3      Acceptance.

                  An electronic  transmission  of data shall be deemed  complete
                  and a  Functional  Group  accepted,  when the  receiver of the
                  transmission verifies by functional acknowledgment that:

                            A.        The standards specified in Exhibit P-1 are
                                      met;

                            B.        The actual quantity of Functional  Groups,
                                      Transaction Sets, Segments, Line Items and
                                      Hash    Totals    received    within   the
                                      transmission equals the quantity the party
                                      has  identified as being  included,  using
                                      the appropriate  control fields  specified
                                      in Exhibit P-1.

          3.4     Garbled Transmissions.

                  If any  Transaction  Set is received in an  unintelligible  or
                  garbled form, the receiving  party shall  promptly  notify the
                  originating   party  (if   identifiable   from  the   received
                  Transaction  Set) in a  reasonable  manner.  In the absence of
                  such notice,  the originating  party's records of the contents
                  of such Transaction Set shall control.

          3.5      Erroneous Transmissions.

                  If either  party  receives  a  Transaction  Set from the other
                  party which differs from the applicable  terms and conditions,
                  (e.g., an Order with a price,  quantity or schedule  different
                  than that  mutually  agreed upon),  the receiving  party shall
                  promptly  contact the sending party to confirm the accuracy of
                  the Transaction Set.

          3.6     Faulty Transmissions.

                  In the event either  party  receives a  Transaction  Set which
                  contains any evidence of faulty  transmission,  the  receiving
                  party shall contact the sending party,  reject the Transaction
                  Set and request that the Transaction Set be re-sent.

4.0      Terms and Conditions.

         4.1      Validity, Enforceability.

                  This  Exhibit  evidences  the mutual  intent of the parties to
                  create a binding purchase and sale obligation  pursuant to the
                  electronic  transmission and receipt of documents,  specifying
                  certain  of the  applicable  terms.  During  the  term  of the
                  Agreement,  all  obligations  concerning  the delivery of such
                  Transaction  Sets  in  written  form  may  be  fulfilled  by a
                  transmission.  pursuant to the terms of this Exhibit. However,
                  either  party shall have the  option,  at its  discretion,  to
                  transmit Transaction Sets in written form to the other party.

                                        3

<PAGE>


                  Any  Transaction  Set  properly  transmitted  pursuant to this
                  Exhibit,  including  without  limitation  Exhibit P-1 ("Signed
                  Documents"),  shall  be  considered.  in  connection  with any
                  transaction,  or this  Exhibit,  to be a "writing" and to have
                  been "signed" and to consume an  "original"  when printed from
                  electronic files or records  established and maintained in the
                  normal course of business.

                  The  parties   agree  that  the   provisions  of  the  Uniform
                  Commercial Code, Section 2-201 ("Formal Requirements:  Statute
                  of Frauds"),  shall not apply to  Transaction  Sets covered by
                  this Exhibit since hard copies of Transaction Sets will not be
                  issued,  and the parties  further agree that said  Transaction
                  Sets  shall  be  deemed  to  satisfy  any  statutory  or legal
                  formalities   requiring   that   agreements   be  in  writing,
                  including, but not limited to the Statute of Frauds.

                  The conduct of the parties pursuant to this Exhibit, including
                  the use of Signed Documents properly  transmitted  pursuant to
                  this Exhibit, shall, for all legal purposes, evidence a course
                  of performance  accepted by the parties in furtherance of this
                  Exhibit.

                  The   parties   agree  not  to   contest   the   validity   or
                  enforceability of Signed Documents under the provisions of any
                  applicable  law relating to whether  certain  agreements be in
                  writing  and signed by the party to be bound  thereby.  Signed
                  Documents, if introduced as evidence on paper in any judicial,
                  arbitration,  mediation or administrative proceedings, will be
                  admissible as between the parties to the same extent and under
                  the same conditions as other business  records  originated and
                  maintained in  documentary  form.  Neither party shall contest
                  the  admissibility  of copies of Signed Documents under either
                  the business records exception to the hearsay rule or the best
                  evidence rule on the basis that the Signed  Documents were not
                  originated or maintained in documentary form.

                                        4

<PAGE>


                                   EXHIBIT P-1

1.0       Transaction Sets.

          All  Transaction   Sets   contemplated  by  this  Agreement  shall  be
          transmitted  and  formatted in accordance  with the American  National
          Standard Institute  Business Data Interchange (ANSI X12) Standard,  as
          reflected  in the  number,  version  and date  column set forth  below
          beside each  Transaction  Set. This also includes the data dictionary,
          segment  directory,   and  transmission   controls  published  as  X12
          standards.

          1.1      Transaction Sets to be transmitted by Seller to Sun.

                   Communication         Number      Version           Date
                   -------------         ------      -------           ----


          1.2     Transaction Sets to be transmitted from Sun to Seller.

                   Communication         Number      Version           Date
                   -------------         ------      -------           ----



2.0       Providers.

          All Transaction Sets  contemplated by this Agreement will be channeled
          through  Providers.  Sun and Seller  shall each  assign a Provider  as
          follows:

          2.1      Sun's Provider.

                   _________________________________
                   _________________________________
                   _________________________________
                   _________________________________

          2.2      Seller's Provider.

                   _________________________________
                   _________________________________
                   _________________________________
                   _________________________________

3.0       Transmission Requirements.

          For each  Transaction Set, the Header Control Number Data Element must
          have an identical  corresponding  value in the Trailer  Control Number
          Data Element for all control Segments as follows:

                                        1

<PAGE>


1        The value for the Interchange  Control Number contained in Data Element
         ISA13 for a  transmission  must equal the value for Data Element  IEA02
         that is contained in the transmission.

2.       The value for the Data  Interchange  Control  Number  contained in Data
         Element  GS06  must  equal  the  value  for Data  Element  GE02 that is
         contained in that Functional Group.

3.       The value for the  Transaction  Set Control  Number  contained  in Data
         Element  ST02 for a  Transaction  Set must  equal  the  value  for Data
         Element SE02 contained in that Transaction set.

In addition, the following requirements must be met:

A.       The  actual   quantity  of  Functional   Groups   received  within  the
         transmission must equal the quantity the trading partner has identified
         as being included, As contained in the IEA01 Data Element;

B.       The actual quantity of Transaction  Sets received with the transmission
         must equal the quantity  the trading  partner has  identified  as being
         included, as contained in the GE01 Data Element;

C.       The actual quantity of Segments  included  within each  Transaction Set
         must equal the quantity  the trading  partner has  identified  as being
         included, as contained in the SE01 field;

D.       The actual quantity of Line Items included within each  Transaction Set
         must equal the quantity  the trading  partner has  identified  as being
         included, as contained in the CTT01 field; and

E.       The Hash  Totals  contained  in the CTT02  field  must equal the sum of
         values as defined in each Transaction Set.

                                       2

<PAGE>


Exhibit Q


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."

<PAGE>


                     AMENDMENT #1 TO SUN MICROSYSTEMS, INC.
                       DEVELOPMENT AND PURCHASE AGREEMENT

Sun Microsystems,  Inc. ("Sun") and Network Peripherals Inc. ("NP") hereby agree
to amend the  Development  and Purchase  Agreement  between  them dated  2/25/94
("Agreement") as follows:

1.     SunSoft,  Inc., a subsidiary of Sun Microsystems,  Inc., hereby transfers
       administration  of the above  referenced  agreement  to Sun  Microsystems
       Computer Company, a division of Sun Microsystems, Inc.

2.     All references to "SunConnect" in the Agreement are replaced by "Sun".

3.     In all  sections,  where  applicable,  reference  to "Sunlink  FDDI/S" is
       changed to "Sun FDDI(TM)".

4.     In the event of a  conflict  between  the terms  and  conditions  of this
       Amendment  No. 1 and the  Agreement  as it  relates  to the OEM  Products
       listed in Exhibit N, this Amendment No. 1 shall take precedence.

5.     Reference   Section  1.4,  2.3  and  2.4.   There  are  no   "Development
       Deliverables" associated with the OEM Products set forth in Exhibit N.

6.     Reference Section 1.11. Sun-unique Elements. Delete reference to "Exhibit
       C" and substitute "Exhibit G".

7.     Reference  Section  1.12.  For the  purpose  of this  Agreement  "Service
       Providers" shall include "Sun-authorized third party maintainers (TPMs)".

8.     In the third  line of  Section  3.3 after  "documents"  add "and Sun FDDI
       documents".

9.     Add at the end of Paragraph 5. 1: "In the event of a conflict between the
       terms and  conditions  of Exhibits E and R,  Exhibit R (Customer  Support
       Provisions)  attached hereto and  incorporated  hereby by this reference.
       Exhibit R shall take precedence."

10.    Delete Paragraph 5.3 in its entirety.

11.    Add at the end of Section 8. 1: "NP agrees to comply with the  provisions
       of Exhibit C, Supplier's  Quality Program,  attached hereto. In the event
       of a conflict between Exhibit C and any other exhibits  regarding quality
       of the OEM Products, Exhibit C shall take precedence."

12.    In the ninth line of Section 8.2 after "(Trademark  License)" insert "and
       Exhibit C".

13.    Delete the 4th and 5th  sentence of Section  8.3.a in their  entirety and
       substitute  the  following:  "By the  release  of Sun FDDI  5.0,  NP will
       identify  and reach  terms  with a compact  disk  manufacturer.  Sun will
       provide the necessary copyright information and product disclaimers to be
       included.  Sun must approve the initial  procedures and file organization
       before CD masters are created.  Sun agrees to reimburse  Supplier for the
       costs of CD mastering which are estimated at $2500 to $3000."

14.    Delete Section 8.4 in its entirety and  substitute  the  following:  "8.4
       Copyright  Notices.  Documentation  shall  bear  copyright  notice(s)  as
       provided by Sun."

15.    In Section 8.6 after "interconnectability" insert "serviceability".

16.    Delete Section 9.3 in its entirety and substitute the following:

        "9.3    Forecast:  Sun shall  provide  Supplier  with a *  "Confidential
                portion  has  been  omitted  and  filed   separately   with  the
                Commission."  rolling forecast of its intended  purchases by the
                first  Monday  of each  month,  with the  first *  "Confidential
                portion  has  been  omitted  and  filed   separately   with  the
                Commission." broken out by week. Such forecast is for Supplier's
                convenience  only and shall in no way  create an  obligation  on
                Sun's part to meet such forecast.

                Sun  acknowledges  that in  order to  support  the  agreed  upon
                leadtime,  Supplier  may be required to acquire  certain  unique
                and/or long lead time materials ("Materials") well in advance of
                receipt of Sun's purchase  orders and to support Sun's forecast.
                The description of Materials and their respective  leadtimes are
                set forth in Exhibit  N-1.  Sun's  liability  for  Materials  is
                limited to those  conforming  materials  ordered in the  minimum
                quantities and leadtimes which were strictly  necessary to build
                Product in order to meet Sun's purchase orders and forecast.

17.    Delete the last sentence of Section 10.4 and  substitute  the  following:
       "Sun  agrees to respond to NP within ten (10) days after  receipt of such
       notification  by Sun's  Administrator  whether Sun accepts or rejects the
       price changes."

January 16, 1996    ff                 1               Network Peripherals, Inc.

<PAGE>


18.    Delete Section 14.1 in its entirety and substitute the following:

       "14.1  Rescheduling:  Sun may  reschedule  delivery of all or part of any
              purchase order, at no charge,  to a date after the agreed delivery
              date as follows:

              Notice        Maximum Reschedule Period        Maximum Reschedules

              0-30 days     *  "Confidential  portion has been omitted and filed
                                separately  with the Commission."

              30+ days      *  "Confidential  portion has been omitted and filed
                                separately with the Commission."

              * "Confidential portion has been omitted and filed separately with
              the Commission."

19.    Delete Section 14.2 in its entirety and substitute the following:

       "14.2  Cancellation:

       *  "Confidential  portion has been omitted and filed  separately with the
       Commission."

20.    Delete  Section  18.3 in its  entirety  and replace  with " 18.3  Product
       Discontinuance by Sun. Sun agrees to give NP * "Confidential  portion has
       been omitted and filed separately with the  Commission."  notice prior to
       discontinuing  an OEM  Product.  NP shall use its best efforts to control
       inventory levels and costs during Product phase-out."

21.    *  "Confidential  portion has been omitted and filed  separately with the
       Commission."

22.    *  "Confidential  portion has been omitted and filed  separately with the
       Commission."

23.    *  "Confidential  portion has been omitted and filed  separately with the
       Commission."

24.    *  "Confidential  portion has been omitted and filed  separately with the
       Commission."

25.    In the sentence of Section 23.2 delete "twenty (20) days after receipt of
       notification  or  as  otherwise   agreed  to  between  the  parties"  and
       substitute "the number of days specified in Exhibit R".

26.    In the first line of  Section 24 delete  "Subject  to the  provisions  of
       Section 24.1 ("Assignment")".

27.    Section 24,  Administration.  Delete  Sun's and NP's  Administrators  and
       replace with.

       "Primary Administrator                     Secondary Administrator

       Yoshikazu (Roy) Hirotsuka                  Flora Ford
       Sun Microsystems Inc.                      Sun Microsystems Inc.
       2550 Garcia Avenue, UMIL01-120             2550 Garcia Avenue, UMIL01-103

January 16, 1996    ff                 2               Network Peripherals, Inc.

<PAGE>

       Mountain View, CA 94041                    Mountain View, CA 94041
       Ph:(408)276-2186                           Ph: (408) 276-3945
       Fax: (408) 263-0807                        Fax: (408) 263-3592

       Meena Bhatia                               Dane Iverson Gegal Department)
       Network Peripherals, Inc.                  Network Peripherals, Inc.
       1371 McCarthy Boulevard                    1371 McCarthy Boulevard
       Milpitas, CA 95035                         Milpitas, CA 95035
       Ph:(408)321-7206                           Ph: (408) 321-7300
       Fax: (408) 321-9218                        Fax: (408) 321-9218"

28.    In Section 29.7 add at the end "and Exhibits C and R".

29.    Add at the end of Section 29.8:

       "C - Supplier's Quality Program*

       G - Sun-Unique Elements

       N-1 - Pricing and Leadtimes for New OEM Products

       R - Customer Support Provisions *

30.    Add a new Section 29.9 as follows: "29.9 Environment. Consistent with the
       U.S. Clean Air Act of 1990, Supplier shall use reasonable efforts to give
       Sun as much notice as is  practicable  in the event  Supplier  uses ozone
       depleting chemicals in the manufacture of the Products.  Sun reserves the
       right to reject any Products  manufactured  utilizing or containing  such
       materials if Sun has not previously been notified of the same."

31.    Exhibit A titled "Sun FDDI SBus  Adapter 4.0 Product  Specifications"  is
       attached hereto and incorporated herein by this reference.

32.    Exhibit C dated  November  27, 1995 is attached  hereto and  incorporated
       herein by this reference. Exhibit C-1 dated November 29. 1995 is attached
       hereto and incorporated herein by this reference.

33.    Exhibit G-1 dated December 20, 1995 is attached  hereto and  incorporated
       herein by this reference.

34.    Exhibit F is deleted in its entirety.

35.    Exhibit N dated  2/24/94 is  deleted  in its  entirety  and  replaced  by
       Exhibit N dated November 27, 1995 attached hereto and incorporated herein
       by this reference.

Except as so amended, the Agreement is confirmed in its entirety.

SUN MICROSYSTEMS, INC.,                     NETWORK PERIPHERALS INC.
acting by and through its division,
Sun Microsystems Computer Company

BY:     __________________________          BY:     ____________________________

NAME:   __________________________          NAME:   ____________________________

TITLE:  __________________________          TITLE:  ____________________________

DATE:   __________________________          DATE:   ____________________________

SUNSOFT, INC.

BY:     __________________________

NAME:   __________________________

TITLE:  __________________________

DATE:   __________________________

January 16, 1996    ff                 3               Network Peripherals, Inc.

<PAGE>



                         Exbihit A: Sun FDDI Sbus Adapter 4.0
                         Product Requirements

                         _______________________________________________________

                         *  "Confidential  portion  has been  omitted  and filed
                         separately with the Commission."



<PAGE>


                                    EXHIBIT C
                           SUPPLIER'S QUALITY PROGRAM


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."



<PAGE>


                                   EXHIBIT C-1
                    ADDITIONAL CUSTOMER SUPPORT REQUIREMENTS


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."



<PAGE>


                            Exhibit G-1: Sun FDDI 4.0
                               SUN UNIQUE ELEMENTS


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."


<PAGE>
                                EXHIBIT J

--------------------------------------------------------------------------------

                                                            NPI-QM-001
                                                            Copy Number: 1
                                                            Issued: 8/18/93

Network Peripherals
1371 McCarthy Boulevard
Milpitas, California 95035



                             QUALITY SYSTEMS MANUAL



                                [GRAPHIC OMITTED]








Approved:      ____________________________________
               Larry Margues, VP Manufacturing


                                                  Network Peripherals
                                                  Client Server Networking

--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: September 1993
NPI QUALITY MANUAL                                           SECTION:
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                                Approval Signatures

Vice President Manufacturing   
                               ----------------------------    -----------------

Materials Manager              
                               ----------------------------    -----------------

Mfg. Engineering Mgr.          
                               ----------------------------    -----------------

Production Manager             
                               ----------------------------    -----------------

Manager ISO                    
                               ----------------------------    -----------------
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: September 1993
NPI QUALITY MANUAL                                           SECTION: A
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                                Table of Contents

   Section
    A            Table of Contents
    B            Revision Control Sheet
    C            Company Background
    D            Distribution Sheet
    E            Manual Structure and Status

    1.0          Introduction
    2.0          Scope
    3.0          Definitions
    4.0          Quality System Requirements
    4.1          Management Responsibilities
    4.2          Quality System
    4.3          Contract Review
    4.4          Design Control
    4.5          Document Control
    4.6          Purchasing
    4.7          Purchaser Supplied Product
    4.8          Product Identification and Traceability
    4.9          Process Control
    4.10         Inspection and Testing
    4.11         Inspection, Measuring and Test Equipment
    4.12         Inspection and Test Status
    4.13         Control of Non Conforming Product
    4.14         Corrective Action
    4.15         Handling, Storage, Packing and Delivery
    4.16         Quality Records
    4.17         Internal Quality Audits
    4.18         Training
    4.19         Servicing
    4.20         Statistical Techniques
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: September 1993
NPI QUALITY MANUAL                                           SECTION: B
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------

                             Revision Control Sheet

Manual Revision Controlled By:  
                                ------------------------------------------------
Copy Number:   
               -----------
Manual Number  
               -----------
Revision      Date         Rev/Description          By            Approved
                                                                 
-------       -------      -------------------      --------      ------------
                                                                 
-------       -------      -------------------      --------      ------------
                                                                 
-------       -------      -------------------      --------      ------------
                                                                 
-------       -------      -------------------      --------      ------------
                                                                 
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-------       -------      -------------------      --------      ------------
                                                                 
-------       -------      -------------------      --------      ------------
                                                                 
-------       -------      -------------------      --------      ------------
                                                                 
-------       -------      -------------------      --------      ------------
                                                                 
-------       -------      -------------------      --------      ------------
                                                                 
-------       -------      -------------------      --------      ------------
                                                             
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: September 1993
NPI QUALITY MANUAL                                           SECTION: C
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                               Company Background

History

Network  Peripherals  was  founded  in  March,  1989  by  a  group  out  of  Sun
Microsystems  engineering  and  marketing  people.  The founders  brought to the
company  extensive  experience  with Fiber  Distributed  Data  Interface  (FDDI)
technology and with the emerging market for network  computing.  During 1989 the
company completed a number of consulting  contracts for key technology companies
in the emerging FDDI market.

In 1990, backed by venture capital  investors,  the company began the design and
manufacture of its initial  product line. The first product to be introduced was
an FDDI adapter for the AT/ISA bus based systems.  This product was delivered to
customers in September 1990. Since that time Network  Peripherals has introduced
the industry's most comprehensive tine of work group FDDI products.

Corporate Profile

Network  Peripherals  designs,  manufactures  and markets  high speed work group
networking  solutions.  As the computer  market moves more toward  client-server
systems,  and as the performance of these systems increases,  the demands on the
network are increased.  Network Peripherals charter is to provide the networking
solution to these work group users. Currently,  the company's products are based
on the FDDI standard.  FDDI is an ANSI standard,  100 megabit/second  local area
network that has ten times the bandwidth of Ethernet.

The  company's  products  include  a wide  range of  network  adapter  cards for
workstation  and server  systems,  a tine of FDDI  concentrators,  and extensive
software support for most network operating systems.

Network  Peripherals  markets  products  in North  America  through  Value Added
Resellers (VARs),  distributors and OEMs. Outside of North America,  the company
utilizes distributors to deliver its products to the global marketplace.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: September 1993
NPI QUALITY MANUAL                                           SECTION: D
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------

                     Distribution List For Controlled Copies

Copy Number            Document Holder                      Location
                                                           
------------           --------------------------           -------------------
                                                           
------------           --------------------------           -------------------
                                                           
------------           --------------------------           -------------------
                                                           
------------           --------------------------           -------------------
                                                           
------------           --------------------------           -------------------
                                                           
------------           --------------------------           -------------------
                                                           
------------           --------------------------           -------------------
                                                           
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------------           --------------------------           -------------------
                                                           
------------           --------------------------           -------------------
                                                           
------------           --------------------------           -------------------
                                                           
------------           --------------------------           -------------------
                                                     
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: September 1993
NPI QUALITY MANUAL                                           SECTION: E
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                         1.0 MANUAL STRUCTURE AND STATUS
                         -------------------------------

This manual  describes  the quality  management  system in  operation at Network
Peripherals.  This  manual is the  primary  reference  document  for all quality
related  activities and is used for the purpose of auditing the effectiveness of
the quality  management system,  where  appropriate,  more detail is provided in
operating procedures which are in turn supplemented by work instructions.

1.1  Distribution

The Quality  Manual is  approved by the ISO  Steering  Committee  upon  release.
Manuals are controlled and uniquely  numbered and provided with revision  update
service through the Document Control Department. The Document Control department
will be responsible for issuing the manuals and maintaining a distribution list.

1.2  Change Control

The ISO Steering  Committee will circulate  draft revision  copies to interested
parties and upon approval,  Document Control will issue new controlled copies or
revisions. Draft copies are not maintained but are current at the time of issue.
Draft copies will be labeled "draft" with a red stamp.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 1.0
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                                1.0 INTRODUCTION
                                ----------------

The work accomplished at Network Peripherals includes the design and assembly of
a number of high  performance  work  group  networking  products.  The  assembly
process  includes the buildup of bare Printed Circuit Boards (PCB) into finished
networking products.

Information contained in this document may be amended or revised to conform with
individual customers,  or with other contractual  requirements.  When necessary,
this  manual and all its  amendments  and  revisions  will be  coordinated  with
Network   Peripherals   management  and  with  our  customers   quality  control
representatives.

1.1 Network Peripherals Quality Assurance

The primary  means for quality  assurance is  inspection  and test  accomplished
during the assembly process and as a final check prior to shipment.

The  facility  uses a formal  documentation  control  system to ensure that only
current revisions of needed documents are used. A Calibration control program is
used, if applicable, to ensure that equipment and tools used in the facility are
kept in a "fit-for-use condition." Pilot production lines are used to verify the
producibility  of new designs  and  supplier  partnership  programs to track and
maintain the quality of components and subassemblies. Feedback on the quality of
produced product comes from both internal and external customers.  This feedback
is used by  management  to  evaluate  and when  applicable  improve  the quality
system.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 2.0
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                                    2.0 SCOPE
                                    ---------

This manual represents the top level document of the Network Peripherals quality
assurance  system.  It  applies  to all  product  lines  produced  by  NPI.  The
documented  quality system that this manual represents is designed to fully meet
the requirements of the International  Standards  Organization (ISO) series 9001
quality system requirements.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 3.0
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                                 3.0 DEFINITIONS
                                 ---------------

The terms and  definitions  used in this  manual  are  consistent  with those of
ANSI/ASQC  A3-1987 "American  National Standard Quality Systems  Terminology." A
copy of ANSI/ASQC A3-1987 is maintained by the Vice President of manufacturing.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.0
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                         4.0 QUALITY SYSTEM REQUIREMENTS
                         -------------------------------

Every   product  must  be  provided   with  total   conformance   to  documented
requirements.  An accurate and continuous  awareness of conformance is essential
to ensure customer satisfaction, provide timely and effective corrective action,
maximize the cost effectiveness of quality assurance  activities,  and provide a
factual basis for planned quality improvement activities.  The accomplishment of
this basic  objective  shall be the purpose of the  following  elements  for the
quality of manufacturing.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.1
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                          4.1 MANAGEMENT RESPONSIBILITY
                          -----------------------------

4.1.1 Purpose

This section describes the means by which Network  Peripherals  acknowledges its
responsibility  for  quality by  providing  a quality  policy,  establishing  an
individual management  responsibilities,  including a management representative,
and conducting quality system reviews.

4.1.2 Quality Policy

Network  Peripherals  is committed  to provide  quality  products  that meet the
schedules  required by our customers and in accordance with ISO9000.  Quality at
NPI is an integration of efforts, innovation,  ethical behavior,  education, and
pride in workmanship.  Controls shall be established to ensure that all products
provided  to  our  customers  conform  to  all  requirements.  Our  quality  and
management  ideology,  listed below, is provided to new employees as part of our
hiring  orientation  and is reinforced as part of our  continuing  education and
training program.

                       NPI Quality and Management Ideology
                       -----------------------------------

         - Quality is a focus

         - Defects can be reduced to zero

         - Productivity and quality are synonymous

         - Workers have both the responsibility and authority to stop production

         - Quality is the responsibility of all employees

         - Quality is viewed from our customer's perspective.

         - Management is participate
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.1
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


4.1.3 Organization

The responsibility,  the authority,  and the  interrelationship of all personnel
who manage,  perform,  and verify work affecting quality shall be defined by the
respective unit.

   4.1.3.1 Administration

         The Quality  Management  function shall  administer the quality and the
         reliability  aspects  of our  products  and  services.  The  activities
         dealing with product  reliability  and product quality can be described
         as follows:

         (1)    Reliability Function - Primarily an engineering function,  which
                places  emphasis  on the  development  phase of new  products to
                ensure the following requirements:

                (a) that the  design is  inherently  reliable  with  respect  to
                    meeting  the  functional  and  life   requirements   of  the
                    applications in which the product will be used;

                (b) that the  producibility  of the  design is  consistent  with
                    capabilities of manufacturing;

                (c) that the design  requirements  are adequately  documented on
                    drawings and specifications;

                (d) that  sufficient  testing and  evaluation  of the product is
                    undertaken to  demonstrate  its capability to meet specified
                    requirements.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.1
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------



--------------------------------------------------------------------------------
         (2)    Quality  Function - Places  emphasis on the  manufacture  of the
                products  to  ensure  that  dimensional,  material,  and  visual
                characteristics   of  the  design  as  documented  on  drawings,
                specifications, and quality standards are consistently produced;
                and that products of  unacceptable  quality are  prevented  from
                reaching the customer. This function includes both the appraisal
                (quality control) function and the planning/prevention  (quality
                engineering)  function. The  planning/prevention  function shall
                include  initiation  and  follow-up  of  activities  to  prevent
                occurrence of product non conformance.
--------------------------------------------------------------------------------

B. Verification Resources and Personnel

         Management  shall provide adequate  resources and trained  personnel to
         perform the required  verification  activities.  These activities shall
         include  inspection,  testing and monitoring of the design,  production
         and  servicing  of  product.  Design  reviews and audits of the quality
         system  shall be carried out by personnel  independent  of those having
         direct responsibility for the work being performed.

C. Company ISO Steering Committee

         The committee,  composed of representatives  from key company functions
         and has the following basic responsibilities:

                (1)   The committee is charged with  operating and enhancing the
                      NPI  Quality  Process,  making  it highly  visible  to the
                      executive staff for their active involvement.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.1
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                (2)   The   committee  is   responsible   for   developing   and
                      implementating  company  policy,  systems,  and procedures
                      covering requirements for quality,  reliability, and other
                      product assurance factors of a general nature.

The Vice President of Manufacturing is the chairperson of this committee.

D. Product Training and Field Engineering Training

         Provide  support to product  assurance  objectives by teaching user and
         new employees the best techniques  developed for the application of NPI
         products.  The ISO Steering  Committee is responsible  providing  input
         into  these  training   programs  with  regard  to  comp  policies  and
         procedures relating to customer quality and reliability activities.

E. Management Representative

         Management will appoint a management  representative who,  irrespective
         of other responsibilities,  shall have the authority and responsibility
         of ensuring  that the  requirements  of the NPI Quality  Standards  are
         implemented  and maintained,  and ensuring  compliance with the IS09000
         standards.

4.1.4 Quality System Review

         The NPI Quality  System  shall be reviewed at regular  intervals by the
         ISO  committee to ensure  continuing  suitability,  effectiveness,  and
         conformance. These reviews shall include assessment of these results of
         audits  involving  follow-up on corrective  actions  taken.  Records of
         these reviews shall be maintained.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.2
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                               4.2 QUALITY SYSTEM
                               ------------------

4.2.1 Purpose

This section  outlines the quality system for Network  Peripherals.  It provides
specific information on how the system is documented, maintained and controlled.

The Quality function shall establish and maintain a documented quality system as
a  means  of  ensuring   that   products  and  services   conform  to  specified
requirements. This shall include:

A.    The preparation of documented quality system.  procedures and instructions
      in accordance with the requirements of this document.

B.    The effective  implementation of the documented  quality system procedures
      and instructions.

C.    The timely  consideration of the following activities in meeting specified
      requirements:

        (1)       The  preparation  of  quality  plans  and  quality  manual  in
                  accordance with the specified requirements.

        (2)       The   identification   and   facilitation   of  any  controls,
                  processes,  inspection equipment,  fixtures,  total production
                  resources  and  skills  that  may be  needed  to  achieve  the
                  required quality.

        (3)       The updating,  as necessary,  of quality control,  inspection,
                  and testing techniques.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.3
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                               4.3 CONTRACT REVIEW
                               -------------------

4.3.1 Purpose

This  section  describes  the way in which an order is  assessed  on  receipt to
ensure that the customer's requirement can be fully met.

A.   Marketing/Sales  functions shall be forwarding to the appropriate functions
     those request for quotes,  contracts,  sales orders and supporting customer
     requirement  documentation  in which the customer is ordering  other than a
     standard product. This includes requests for alterations to NPI products as
     specified in the customer documentation.

B.   Engineering or equivalent  shall be responsible for determining NPI product
     compliance  with the  customer's  requirements  and the  initiation  of the
     cross-reference process.

C.   The quality  function shall be responsible  for  determining  those quality
     requirements   that  include   measurement  data,   performance   criteria,
     verification, audit parameters, and the like for shipping locations.

D.  Manufacturing  engineering  shall be  responsible  for  determining  special
    labeling and packaging requirements.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.4
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                               4.4 DESIGN CONTROL
                               ------------------

4.4.1 Purpose

This  section  describes  the means by which  Network  Peripherals  controls and
verifies  the  design  of the  product  in order to  ensure  that the  specified
requirements are met.

4.4.2 Scope

Applies to Design  Engineering  functions  performed  at NPI.  Control of design
functions  shall include  design of products and the  development  of procedures
that verify processes.

4.4.3 Requirements

A. Marketing will be responsible for providing Engineering and Quality Assurance
with a Marketing  Requirements Document (MRD) that outlines product criteria and
customer expectations.

B. Marketing and Customer  Service will maintain a system for providing  ongoing
customer  feedback to Engineering and Quality  Assurance to ensure that problems
or  customer  requirements  are taken  into  consideration  in the design of new
products and the manufacture of existing products.

C. Engineering will document plans that identify the  responsibility  for design
and  development  activities.  The  plans  shall  describe  or  reference  these
activities and shall be updated as the design evolves.

D. Development of design, when required, shall be documented and based on stated
design  requirements.  Documentation  will include design methods,  assumptions,
analysis and calculations.  Designs shall conform to requirements of established
design guidelines and procedures.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.4
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


C.  New  Product   definition,   development,   qualification,   production  and
end-of-life activities will be carried out in accordance with Product Life Cycle
Guideline, 124464

D. Design, development,  qualification and review activities will be assigned to
qualified staff within the appropriate business unit.

E.  Designs will be  reviewed,  checked and  approved by a qualified  individual
other than the individual who created the original design.

F.  Design  documentation  shall  be  clear,   identifiable,   reproducible  and
retrievable and shall ensure  manufacture of the product anywhere that a similar
process resides.

G.  Completed  designs  inclusive of  acceptance  criteria are  translated  into
drawings, procedures,  specifications and standards. Design documents shall have
a unique identification number and be revision controlled.

H.  Issue  and  revisions  of  controlled  documents  shall be  accomplished  in
accordance  with procedure  Pro-0126-02,  Engineering  Change Order.  Changes to
controlled documents shall require approval of qualified personnel in accordance
with that procedure.

I. Design  Verification  Testing  (DVT) shall be  performed  and  documented  to
demonstrate  product  conformance to design  specifications.  Design may also be
verified by comparing the new design with a similar proven design.

J. Product  Qualification  Testing  (PQT) shall be performed  and  documented to
demonstrate product/process conformance to customer requirements.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.4
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


K.  Applicable  design  output shall be reviewed by  Regulatory  Engineering  to
ensure  that  it  conforms  with  regulatory  requirements  and  product  safety
requirements.

4.4.4 Applicable Documents

       Engineering Change Order, PRO-0126-0x

       Product Life Cycle Guideline, 12154212

       Pilot Run Procedure, PRO-0284-0x
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.5
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                              4.5 DOCUMENT CONTROL
                              --------------------

4.5.1 Purpose

This section  describes  the control of all  documents  required  for  achieving
product quality and effective operation of the quality system.

4.5.2 Requirements

A. Design  Engineering  shall be responsible for the preparation of drawings and
specifications used to define and describe a product.

B. Document Control Department shall be responsible for control and distribution
of new engineering drawings and specifications.

C.  Document  Control  Department  will  coordinate  the review and  approval of
changes to  engineering  documents  and will  maintain a master  file of current
revisions.

D. Affected  organizational  units will be responsible for the implementation of
changes to engineering documents.

E. Engineering  documents will be reviewed by operations  personnel for adequacy
to produce products that will conform to the requirements.

F.  Quality  Assurance  will verify that  current  build  revisions  comply with
engineering documentation.

G. Department managers in operations shall be responsible for maintenance of the
latest build revisions in work areas.

H.  Product  audits will be done to assure that NPI  products are being built to
the current effective revision levels.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.5
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


I.  Non-engineering  documents,  departmental  procedures and work  instructions
shall be maintained and controlled by the responsible departments.

4.5.3 Applicable Documents

       Part Number and Bill Of Material Plan, PRO-025 I -0x

       Engineering Change Order, PRO-0 I 26-0x

       Document Control Policy Code and Procedure, PRO-0252-0x
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.6
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                                 4.6 PURCHASING
                                 --------------

4.6.1 Purpose

This section  describes  the way in which  suppliers of products and services to
Network   Peripherals  are  approved,   purchasing   documents   reviewed,   and
verification of purchased product by customers is provided.

The policy and procedures outlined in this section have been developed to insure
that purchased  product coming into NPI conform to specified  requirements.  The
methods  to  insure  conformance  will be based  on the  ability  of  individual
subcontractors  to  meet  our  requirements,   including  quality  requirements.
Performance on individual subcontractors will be documented and maintained.

A. Assessment of Subcontractors

Subcontractors  are  approved  prior  to  use  and  are  assessed  by NPI or our
customers. NPI will evaluate subcontractors by initial assessment and monitoring
of  performance.  This  selection  of  subcontractors  and the degree of control
exercised will be dependent upon the product type, subcontractor performance and
customer   requirements.   Evaluation  can  range  between  physical  audits  of
subcontractor quality systems to review of submitted quality documentation. When
audits  of  subcontractor  quality  systems  are  deemed  appropriate,  proof of
certification  to the  appropriate  ISO 9000 series standard will be acceptable.
The  procedures  for  assessment  will be in accordance  with the  Subcontractor
Certification Program.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.6
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


B. Purchasing Data

Purchasing documents shall contain a clear description of the product or service
ordered and include appropriate  identification codes,  numbers,  references and
any other relevant data. All purchasing  documents will be reviewed and approved
in accordance with purchasing procedures prior to release to the subcontractor.

C. Verification of Purchased Product

Customers will be allowed to verify the  acceptability  of the product at source
or on receipt when specified in the contract.

4.6.2 Applicable Documents

       First Article Inspection, PRO-0287-0x

       Engineering Change Order, PRO-0126-0x

       Purchasing Manual, PRO-0253-0x

       Supplier Partnership and Approval Vendor List, PRO-0254-0x
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.7
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                         4.7 PURCHASER SUPPLIED PRODUCT
                         ------------------------------

NPI currently has no Purchaser  Supplied  Product and does not anticipate any in
the near term. Therefore,  the provisions of this paragraph do not apply. In the
event this condition changes, procedures will be developed.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.8
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                   4.8 PRODUCT IDENTIFICATION AND TRACEABILITY
                   -------------------------------------------

4.8.1 Purpose

This section  describes  the way in which  product is  identified  and traceable
throughout all stages of production, delivery, and installation.

A. Product Identification

All product is identified  upon receipt by means of an attached  label,  storage
bin label or marking on the product. Identification is maintained throughout the
production  stages up to the point of delivery.  Product  identification  during
delivery is provided by packing lists.

B. Product Traceability

Traceability is provided where requested and is ensured through:

o   Test  certificates  and  certificates  of  conformity  for all purchased and
    purchaser supplied product.

o   The identification of all product within a specific contract.

o   The recording of all product against a specific contract.

4.8.2 Applicable Documents

RMA Process Procedure, PRO-0270-0x

Process Tag Procedure, PRO-0290-0x
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.9
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                               4.9 PROCSS CONTROL
                               ------------------

4.9.1 Purpose

This section describes the way in which production is planned and controlled and
the way special processes are identified and monitored.

A.  Manufacturing  Planning  and  Control  Instructions  defining  manufacturing
operations,  processes, and handling techniques shall be provided in the form of
Manufacturing Process Procedures,  Process/Equipment  Operating  Specifications,
and  Operator  Work  instructions,  as  applicable.  Control  points  within the
manufacturing processes shall be defined by Quality and monitored as to minimize
the variation at each stage of the process.

B. Maximum use of SQC, SPC and other appropriate techniques shall be employed to
control the manufacturing  processes.  Process  specifications shall be provided
and proper operating training supplied by t he operating unit.

C. All processes shall utilize qualified personnel for inspection. Qualification
requirements shall be established by the Quality department.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.10
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                           4.10 INSPECTION AND TESTING
                           ---------------------------

4.10.1 Purpose

This  section  describes  the way in  which  product  is  inspected  and  tested
throughout all stages of production.

4.10.2 Inspection General

NPI and subcontractor  processes shall have sufficient controls at all stages of
manufacturing  to ensure  that  only  acceptable  product  is  delivered  to NPI
customers.  Defect  prevention  techniques,   particularly  statistical  process
control, shall be used wherever possible.

NPI  supports  customer   requests  to  review  non  proprietary   manufacturing
inspection data, including review of SQC/SPC data.

4.10.3 Incoming Inspection

A. It shall be the responsibility of quality management to ' determine the means
of verifying that suppliers meet their  contractual  obligations  related to the
quality of the procured and subcontracted items.

Where  receiving  inspection  has been  established  as the  means,  Quality  is
responsible for providing the  procedures,  resources and training to adequately
process procured items in a timely manner.

B. It shall be the  responsibility  of  receiving  inspection  to  identify  and
segregate  nonconforming  items so as to ensure they are not inadvertently used.
Disposition of nonconforming items shall be made by the responsible  engineering
disciplines and the supplier shall be formally advised of both the rejection and
the requirement to provide corrective action.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.10
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


C.  Nonconforming  product  shall not be released for use unless a deviation has
been processed and approved by the responsible  engineering  disciplines and the
VP of  Manufacturing  Operations.  All deviations shall indicate that form, fit,
and function of the end item shall not be affected.

4.10.4 In-Process Inspection and Testing

All product is inspected and tested at defined stages of the production  process
in compliance with the appropriate quality plan or other instructions containing
methods and acceptance  criteria.  The  completion of inspections  and tests are
recorded and  verified.  Nonconforming  product is  identified,  documented  and
controlled to prevent inadvertent use or installation.

4.10.4.1 Printed Circuit Board Assembly Testing

All printed circuit board assemblies (PCA's) are given a function test to ensure
they operate in  conformance to the product  specification.  All PCA's that pass
test are  identified  with a test tag to indicate  successful  completion of the
test. All PCA's that fail are routed through a troubleshoot,  repair, and retest
process until  successfully  passing the test. PCA's that cannot be repaired are
dispositioned in accordance with paragraph 4.13 of this manual.

4.10.4.2 Printed Circuit Board Assembly Inspection.

AH printed  circuit board  assemblies  are inspected  throughout  the process to
insure conformance to the workmanship  specifications.  Nonconforming  PCA's are
reworked to conform to the  specifications  or  dispositioned in accordance with
paragraph 4.13 of this manual.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.10
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


4.10.5 Final Inspection and Testing

All  finished  product  is  final   inspected/tested   in  compliance  with  the
appropriate quality plan or other instructions containing methods and acceptance
criteria.  All previous  inspections/tests are verified and final inspection and
test results are recorded to provide evidence of product conformance.

4.10.6 Inspection and Test Records

No product will be released  until all activities  specified in the  appropriate
quality  plan and other  instructions  have been  satisfactorily  completed  and
verified.   Records  which  provide  evidence  that  product  has  passed  final
inspection  and/or test with defined  acceptance  criteria will be maintained in
accordance with paragraph 4.16 of this manual.

4.10.7 Applicable Documents

         Out Of Box Audit, PRO-0283-0x

         Incoming Inspection, PRO-0266-0x

         Source Inspection, PRO-0282-0x

         Final Inspection, PRO-0285-0x

         Sub Contractor Audit, PRO-0286-0x
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.11
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                  4.11 INSPECTION, MEASURING AND TEST EQUIPMENT
                  ---------------------------------------------

4.11.1 Purpose

This  section  describes  how  inspection,   measuring  and  test  equipment  is
controlled,   calibrated,  and  maintained  to  ensure  product  conformance  to
specified requirements.

4.11.2 General

Production personnel is responsible to identify,  control and assure calibration
on measuring and test  equipment that can affect  product  quality.  The Quality
Manager will be  responsible  to audit the process.  The  following  category of
equipment may be subjected to calibrated:

       Testing - Line equipment used in development, production, and testing.

Required  calibration  of new test  equipment  will be routed through an outside
calibration   laboratory  and  tested  for   conformance  and  logged  into  the
calibration  database.  In the event  jigs,  fixtures,  templates,  patterns  or
software is used as suitable forms of inspection,  they will be checked to prove
that they are capable of verifying the acceptability of product prior to release
for use during  production.  The extent and  frequency of these checks' shall be
determined by Manufacturing Engineering.

4.11.3 Calibration of Test Equipment

Test  equipment  is  calibrated,  if  required,  periodically  on the  basis  of
stability, purpose, and degree of use. The equipment is calibrated by an outside
laboratory and is traceable to N.B.S. standards.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.11
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


4.11.4 Documentation

A calibration  and service report is initiated for each piece of equipment under
calibration lab control (CLC), and calibration frequency established.

4.11.5 Personal or Customer Furnished Equipment

Personal  or  customer  furnished  equipment   requiring   calibration  will  be
identified  and  subject  to  the  same  calibration  requirements  as  facility
equipment.

4.11.6 Equipment Not Requiring Calibration

Equipment not requiring periodic  calibration will be entered in the calibration
system  and  labeled  "un-calibrated   instrument,"  "Limited  calibration,"  or
"calibrate before use."

4.11.7 Applicable Documents

         Test Equipment Calibration Procedure, PRO-0124-0x
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.12
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                         4.12 INSPECTION AND TEST STATUS
                         -------------------------------

4.12.1 Purpose

This  section  describes  the way in which  the  inspection  and test  status of
product  is  identified.  The  identification  methods  used  will  ensure  only
conforming product is processed or shipped.

4.12.2 Status Documentation

The  inspection  and test status of product  will be indicated by one or more of
the following:  stamps,  tags,  labels,  travelers,  inspection  records or when
appropriate;  physical location.  The inspection  authority  responsible for the
release of conforming  product will be identified on the appropriate  inspection
records.

4.12.3 Applicable Documents

         Process Tag Procedure, PRO-0290-0x
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.13
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                      4.13 CONTROL OF NONCONFORMING PRODUCT
                      -------------------------------------

4.13.1 Purpose

This section describes the means taken to ensure that  nonconforming  product is
properly  controlled  including  in-house  product  and  customer  returns.  All
nonconforming  product and material will be  identified  and  segregated,  where
practical, from the production and conforming material areas.

4.13.2 Nonconforming Review and Disposition

A report  for  nonconforming  product  will be  documented,  including  complete
identification   of  product  and  deviation  from  required   specification  or
standards.  This report  will be  forwarded  to the  Material  Review  Board for
disposition.  The  nonconforming  product  will be evaluated to one of the below
categories.  For items that do not fit these categories,  quality assurance will
coordinate with supplier/customer to determine the disposition of the items.

Rework original --         The process  required to make an item  conform in its
                           entirety to drawing or specification requirements.

Repair --                  The  process  required  to make an item usable to the
                           customer's  satisfaction  without  conforming  to the
                           original  drawing  or   specification   requirements.
                           Repaired  product  may be  regarded  for  alternative
                           applications.

Use as is --               The  determination  for  nonconforming  material that
                           considers the material to be satisfactory  for use as
                           it is without adverse affects on safety, performance,
                           interchange ability, or reliability.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.13
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


Return to Vendor --        The return of  unacceptability  items to the supplier
                           from which they were purchased.

Scrap --                   The disposal of articles that cannot  economically be
                           made acceptable and are unfit for use.

4.13.3 Repaired Product

Product released  following repair will be recorded in a report  summarizing the
non conformance and acceptance of the repair.  When required by contract,  these
details along with any repackaging required shall be provided to the customer or
NPI Manufacturing for recycling.

4.13.4 Material Review Board

AH  disposition  shall take place through the Material  Review Board (MRB).  The
Material  Review Board will  consist of at least the  following  members;  Prod.
Scheduler, ME, Prod. Mgr. The Materials Manager is required to approve all scrap
dispositions.  The MRB  Coordinator is  responsible to coordinate  with all MR.B
members and obtain  their  approval  for  recommended  actions.  Meetings may be
called  at  the  direction  of any of the  members,  or may be  conducted  using
electronic mail.

4.13.5 Physical Controls

Control on  nonconforming  product pending action must be in accordance with the
"MIM  Procedure".  Positive  controls  will be  established  to  prevent  future
processing of nonconforming product until the MRB action is completed.

4.13.6 Reinspection

All  rework  or  repaired  product  must  be re  inspected  in  accordance  with
documented procedures prior to release.

4.13.7 Applicable Documents

         Material Review Board, PRO-0125-0x
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.14
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                             4.14 CORRECTIVE ACTION
                             ----------------------

4.14.1 Purpose

This section describes the way in which the causes of nonconforming  product are
investigated and corrective action implemented to prevent recurrence.

4.14.2 General

The responsibilities,  authority and procedures for initiating corrective action
are defined in the "Corrective Action Procedure". Non conformance's are recorded
and records are reviewed by the "Closed Loop  Corrective  Team" to determine the
causes of non conformance.  Corrective action is taken as appropriate, including
preventative measures to prevent any recurrence of the non conformance.

4.14.3 Analysis

Analysis of non conformance  includes the review of processes,  -reject reports,
inspection and test reports, service reports and customer complaints.

4.14.4 Procedure or Process Changes

Changes to existing  procedures  required by corrective  action are recorded and
communicated to the appropriate  personnel.  Corrective actions are reviewed and
follow  up  evaluations  are  accomplished  to ensure  they  have been  properly
implemented and are effective.

4.14.5 Applicable Documents

         Closed Loop Corrective Action, PRO-0267-0x
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.15
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                  4.15 HANDLING, STORAGE PACKAGING AND DELIVERY
                  ---------------------------------------------

4.15.1 Purpose

This section  describes  the way in which product  quality is maintained  during
handling, storage, packing and delivery.

4.15.2 General

The  procedures  for  handling,  storage,  packaging and delivery of product are
referenced at the end of this section.  The proper handling of PCA components is
of particular concern to prevent ESD damage.  Wrist straps and grounded footwear
must be used where appropriate during the production process.

4.15.3 Handling

AR products will be handled in a manner so as to prevent damage or deterioration
at  A  stages  of  production,  delivery,  or  installation.  Anti-static  Bins,
containers, pallets, trays or bags are used to move product in-house.

4.15.4 Storage

Defined  storage areas are provided for product prior to use.  Receipt and issue
of product  from stores is performed in  accordance  with written  instructions.
Storage  methods   maintain   product  quality  and  provide   adequate  product
identification.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.15
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


4.15.5 Packing

Product  approved  for delivery is packaged in a manner that  provides  adequate
protection from damage during storage and subsequent delivery.

4.15.6 Delivery

Following final inspection and packaging, product is shipped to customers.

4.15.7 Applicable Documents

         ESD Ground Strap Testing, PRO-0268-0x

         Receiving Procedure, PRO-0256-0x

         Shipping Procedure, PRO-027 I -0x
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.16
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                              4.16 QUALITY RECORDS
                              --------------------

4.16.1 Purpose

This section  describes the way in which records used in the quality  management
system are identified, stored and maintained.

4.16.2 Responsibilities

The quality  representative  is responsible for collecting and recording records
required in the operation. These records include (but not limited to) inspection
reports, test data, calibration results,  subcontractor  assessment reports, and
corrective action reports.

4.16.3 General

Quality  records  will be legible  and  identifiable  to the  product or process
concerned  (as  appropriate).  They may be in hard copy or  stored  in  computer
systems. Where agreed contractually,  quality records will be made available for
evaluation by the purchaser for an agreed period.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.17
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                          4.17 INTERNAL QUALITY AUDITS
                          ----------------------------

4.17.1 Purpose

This  section  describes  how all aspects of the quality  management  system are
audited  at regular  intervals  to assess  compliance  with  agreed  procedures,
identify any non conformance's and initiate corrective action where required.

4.17.2 Audit Plan

An audit plan is  maintained  to ensure all  aspects of the  quality  management
system are audited. The ISO management representative is responsible to maintain
the audit plan.

4.17.3 Audit Frequency

The frequency of audits are determined by the results of previous audits and the
significance of individual system  activities.  The minimum  requirement is that
the quality  system  activities  associated  with each section of this manual be
audited at least once each year.  Audits  will  include  but are not limited to:
Processes, Procedures, Activities, Practices, Work Instructions,  Documentation,
and Knowledge of Quality Policy.

4.17.4 Qualification of Audit Personnel

Audits are  performed by qualified  and  independent  staff in  accordance  with
internal audit procedures.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.17
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


4.17.5 Corrective Actions

The responsible  manager for an audited area will review audit results and agree
on the time frame for any corrective actions required.  Follow-up audits will be
used by management to review the continued,  effectiveness of the quality system
and will be maintained on file in accordance with paragraph 4.16 of this manual.

4.17.6 Applicable Documents

         Internal Audit, PRO-0288-0x
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.18
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                                  4.18 TRAINING
                                  -------------

4.18.1 Purpose

This section  describes the way in which training  requirements  are identified,
implemented and monitored throughout the facility.

4.18.2 General

All employees  receive  instructions in the operation of the quality  management
System and the management  principles  embodied in the quality policy as part of
the hiring orientation program.

4.18.3 Manufacturing Training

All  manufacturing  functions  that need  acquired  skills,  and which  could be
adversely  affected  by  the  lack  of  said  skills,  will  be  identified  and
documented.  Competence  in required  skills may be  demonstrated  by education,
experience,  or  successful  completion of training  programs.  Training will be
provided from both internal and external sources.

4.18.3.1 Management and Team Development Training

All functions that need management and team skills, and which could be adversely
affected by the lack of said skills,  will be identified  and  documented by the
appropriate  person.  Competence  in  required  skills  may be  demonstrated  by
education,  experience, or successful completion of training programs.  Training
will be provided from both internal and external sources.

4.18.4 Responsibilities

Each department head is responsible for reviewing the level of competence within
their own area and identifying where additional training may be required

4.18.4.1 Training Records

Training  records on  individuals  completing  internal  and  external  training
courses will be maintained by the appropriate organization.
<PAGE>
--------------------------------------------------------------------------------
                                                       DATE: November 1993
NPI QUALITY MANUAL                                           SECTION: 4.20
ISSUE: A                                                     REVISION: 0
--------------------------------------------------------------------------------


                           4.20 STATISTICAL TECHNIQUES
                           ---------------------------

4.20.1 Purpose

This section describes the way in which appropriate  statistical  techniques are
utilized  within the  quality  management  system and when  Statistical  Process
Control (SPC) is required.

4.20.2 General

Acceptance sampling plans, based on available recognized standards,  are used to
evaluate  supplier  performance  and may also be used to conduct a final quality
audit on finished products prior to shipment.

4.20.3 Documentation

Where  appropriate,  the results of  statistical  analyses  are  documented  and
evaluated to identify levels of performance and initiate corrective action.

4.20.4 Applicable Documents

         Inspection Sampling, PRO-028 I -0x


<PAGE>

                                   EXHIBIT K-1

                                                      Spec Number: 425 - 1019-01
                                                                          Rev. A
                                                          Date: February 20,1992


sun
microsystems




                           Palletization Requirements
                                       for
                           Inbound/Outbound Shipments


                                   Proprietary


                             Sun Microsystems, Inc.
                               2550 Garcia Avenue
                             Mountain View, Ca 94043
                                 (415) 960-1300



                                                  This  document is the property
                                                  of Sun Microsystems,  Inc. and
                                                  contains  information which is
                                                  confidential  and  proprietary
                                                  to Sun  Microsystems,  Inc. No
                                                  part of this  document  may be
                                                  copied,      reproduced     or
                                                  disclosed  to  third   parties
                                                  without   the  prior   written
                                                  consent  of Sun  Microsystems,
                                                  Inc.
<PAGE>
February 20, 1992                                      Spec. Number: 425-1019-01
                           Palletization Requirements                     Rev. A
                                       For           
                           Inbound/Outbound Shipments
                                        

                                Revision History

<TABLE>
<CAPTION>
----------- ---------- ---------------- ------------------------------------------- ------------- ------------------
   DASH        REV         ECO NO.                DESCRIPTION OF CHANGE                 DATE          APPROVED
----------- ---------- ---------------- ------------------------------------------- ------------- ------------------
<S>         <C>        <C>              <C>                                         <C>           <C>   
    01          A         WO_02538                  Production Release                02/21/92        02/20/92
----------- ---------- ---------------- ------------------------------------------- ------------- ------------------

----------- ---------- ---------------- ------------------------------------------- ------------- ------------------



























----------- ---------- ---------------- ------------------------------------------- ------------- ------------------
</TABLE>

Sun Microsystems Inc.                - 2 -                           Proprietary
<PAGE>
February 20, 1992                                      Spec. Number: 425-1019-01
                           Palletization Requirements                     Rev. A
                                       For           
                           Inbound/Outbound Shipments


                                    Foreword

This  document  contains the  Palletization  Requirements  for  Inbound/Outbound
Shipments of Sun and/or 3rd party  products.  This  document may not be modified
without the approval of the Manager of Corporate Packaging Engineering.

Sun Microsystems Inc.                - 3 -                           Proprietary
<PAGE>
February 20, 1992                                      Spec. Number: 425-1019-01
                           Palletization Requirements                     Rev. A
                                       For           
                           Inbound/Outbound Shipments


                                Table of Contents

Revision History                                                               2
Foreward                                                                       3
Table of Contents                                                              4
1.0  Scope                                                                     5
2.0  Pallet Size, Construction, and Performance Requirements                   5
3.0  Pallet Loading                                                            6
4.0  Container Quantity Per Pallet                                             7
5.0  Pallet Unitization                                                        7
6.0  Pallet Stacking                                                           8
7.0  Replacement Packaging                                                     8
8.0  Exception                                                                 8

Sun Microsystems Inc.                - 4 -                           Proprietary
<PAGE>
February 20, 1992                                      Spec. Number: 425-1019-01
                           Palletization Requirements                     Rev. A
                                       For           
                           Inbound/Outbound Shipments


1.0 Scope

     1.1      This document provides  palletization  requirements and guidelines
              for  Inbound/  Outbound  Sun  and/or  3rd  Party  shipments.  This
              document   addresses   Pallet  Size,   Construction,   Performance
              Requirements, Loading, Unitization and Stacking.

     1.2      The technical and process related design parameters  provided here
              are intended to allow the various Sun manufacturing  sites and 3rd
              party  vendors to palletize  "like  products" in a manner which is
              compatible  with  Sun's  product  protection,  manufacturing,  and
              distribution requirements.

     1.3      This  document  applies  to  Products  which  are  intended  to be
              re-shipped in the originally supplied shipping package materials.

     1.4      This   document   shall  be   superceded   by  any   specific  Sun
              Palletization Drawing for a given Product.

     1.5      It is the  suppliers  responsibility  to provide to Sun a shipping
              container which is free of damage and cosmetic imperfections.

2.0 Pallet Sizes, Construction And Performance Requirements

     2.1      Pallet size shall be selected from the following list:

              48" x 40" (1219.2mm x 1016mm)
              48" x 45" (1219.2mm x 1143mm)
              Custom

              Detailed  pallet  drawings  are  available  upon  request from Sun
              Microsystems.

              2.1.1.     The pallet which offers the best cube  utilization  for
                         the given product shall be utilized.  If either the 48"
                         x 40"  (1219.2mm  x 1016mm)  or 48" x 45"  (1219.2mm  x
                         1143mm)  pallet  does  not  offer  a 85 %  pallet  area
                         utilization, a custom pallet shall be investigated.

Sun Microsystems Inc.                - 5 -                           Proprietary
<PAGE>
February 20, 1992                                      Spec. Number: 425-1019-01
                           Palletization Requirements                     Rev. A
                                       For           
                           Inbound/Outbound Shipments


              2.1.2      A  custom  size  pallet  may be  required  for a  given
                         product if one of the two "preferred" pallet sizes does
                         not provide for proper  palletization.  Use of a custom
                         size pallet requires the written authorization from Sun
                         Microsystems' Packaging Engineering Department

     2.2      The.pallet  shall be a Four Way Entry Notched Stringer Design (See
              Figure 1).

     2.3      Pallet  dimensions  state the length of the notched stringer first
              and the width of the deckboards second.

     2.4      Wood used in the  construction  of pallets  shall be in accordance
              with MIL-STD-731,  Groups I, II, III, and IV, standard (or better)
              grade.

     2.5      Nails  used  in the  construction  of  pallets  shall  be  annular
              ring/drive  screw.  2-3 nails shall be used at each bearing point,
              depending  on the width of the board.  Nails shall be staggered to
              prevent component splitting.

3.0 Pallet Loading

     3.1      Carton overhang is not permitted.

     3.2      Maximum load height  (including  pallet)  shall be no greater than
              45" (1143mm).

     3.3      Maximum load weight is 2000 lbs (909.1 kg).

     3.4      Only one (1) Sun Part Number per pallet. If mixed pallet loads are
              necessary,  prior written  approval  from Sun's  Product  Delivery
              Center (PDC) Engineering Services Group is required.

     3.5      Whenever  possible  column loading carton  configuration  shall be
              utilized.  Other loading  configurations  (spiral or interlocking)
              can reduce carton  compression  strength by up to 50%. In addition
              to loading configuration,  carton misalignment reduces compression
              strength by up to 30%.  Long term  storage and high  humidity  are
              other factors which can affect compressive  strength.  See figures
              2, 3, 4, & 5.

     3.6      Cartons  shall  be  positioned  on the  pallet  so that  the  Part
              Identification Label on several cartons is visible from both width
              sides of the pallet. See figure 6

Sun Microsystems Inc.                - 6 -                           Proprietary
<PAGE>
February 20, 1992                                      Spec. Number: 425-1019-01
                           Palletization Requirements                     Rev. A
                                       For           
                           Inbound/Outbound Shipments


4.0 Container Quantity Per Pallet

     4.1      Maximum  container  quantity  per pallet is 72.  Containers  which
              exceed this  requirement  shall be overboxed in quantities of 5 or
              10. Any odd quantity of  containers  shall be  overboxed  with the
              void filled with a material other than polystyrene "peanuts."

5.0 Pallet Unitization

     5.1      Pallets  shall be unitized to provide to Sun a shipping  container
              free of damage and cosmetic  imperfections allowing for reshipment
              in the original packaging.

              Unitize: Bringing several cartons together to form a single stable
              load.

              5.1.1      Stretch  wrapping  is  required  to secure the load and
                         provide protection from dirt. See figure 7.

     5.2      In  addition  to stretch  wrapping,  one or more of the  following
              methods may be required depending on the distribution environment,
              to insure a damage free delivery.

              5.2.1      Top pallet  caps  shall be used to  provide  protection
                         from dirt and promote better  stacking of pallets.  See
                         figure 7.

              5.2.2      Plastic banding shall be used to stabilize the load and
                         to prevent carriers from breaking down the pallet load.
                         If  banding  is used  without a top  pallet  cap,  edge
                         guards  shall  be  used to  prevent  the  banding  from
                         damaging the load. See figure 7.

              5.2.3      Comer  guards  shall  be  used  to  provide  additional
                         compressive  strength and to protect the carton corners
                         from damage. See figure 7.

Sun Microsystems Inc.                - 7 -                           Proprietary
<PAGE>
February 20, 1992                                      Spec. Number: 425-1019-01
                           Palletization Requirements                     Rev. A
                                       For           
                           Inbound/Outbound Shipments


6.0 Pallet Stacking

     6.1      Pallet load  compression  strength  shall be great enough to allow
              stacking of pallets to 90" (2286mm).  If  compression  strength is
              not great enough,  corner  guards  outlined in Section 5, shall be
              utilized to increase compression strength.

7.0 Replacement Packaging

     7.1      Third parties which supply products for which Sun has not provided
              Packaging Drawings (i.e., Sun Carton/Graphic  Layout Specification
              Drawing)  must  provide  Sun  with a means to  obtain  replacement
              packaging  for  packaging  components  which  are  damaged  during
              transit.

              7.1.1      This  replacement  packaging  issue will be reviewed by
                         product. The supplier will either be required to supply
                         the replacement packaging or specification  drawings so
                         that the packaging may be sourced by Sun.

8.0 Exceptions

8.1           Any exceptions to the requirements stated in this document must be
              approved  by  the   Packaging   Engineering   Department   at  Sun
              Microsystems, Inc., and documented in writing.

Sun Microsystems Inc.                - 8 -                           Proprietary
<PAGE>
February 20, 1992                                      Spec. Number: 425-1019-01
                           Palletization Requirements                     Rev. A
                                       For           
                           Inbound/Outbound Shipments


































                               Pallet Construction
                                    FIGURE 1

Sun Microsystems Inc.                - 9 -                           Proprietary
<PAGE>
February 20, 1992                                      Spec. Number: 425-1019-01
                           Palletization Requirements                     Rev. A
                                       For           
                           Inbound/Outbound Shipments


































                     Column Loading of Cartons on the Pallet
                                    FIGURE 2

Sun Microsystems Inc.               - 10 -                           Proprietary
<PAGE>
February 20, 1992                                      Spec. Number: 425-1019-01
                           Palletization Requirements                     Rev. A
                                       For           
                           Inbound/Outbound Shipments


































                     Spiral Loading of Cartons on the Pallet
                                    FIGURE 3

Sun Microsystems Inc.               - 11 -                           Proprietary
<PAGE>
February 20, 1992                                      Spec. Number: 425-1019-01
                           Palletization Requirements                     Rev. A
                                       For           
                           Inbound/Outbound Shipments


































                  Interlocking Loading of Cartons on the Pallet
                                    FIGURE 4

Sun Microsystems Inc.               - 12 -                           Proprietary
<PAGE>
February 20, 1992                                      Spec. Number: 425-1019-01
                           Palletization Requirements                     Rev. A
                                       For           
                           Inbound/Outbound Shipments


































                      Misalignment of Cartons on the Pallet
                                    FIGURE 5

Sun Microsystems Inc.               - 13 -                           Proprietary
<PAGE>
February 20, 1992                                      Spec. Number: 425-1019-01
                           Palletization Requirements                     Rev. A
                                       For           
                           Inbound/Outbound Shipments


































       Part Identification Label Visible from the Width Side of the Pallet
                                    FIGURE 6

Sun Microsystems Inc.               - 14 -                           Proprietary
<PAGE>
February 20, 1992                                      Spec. Number: 425-1019-01
                           Palletization Requirements                     Rev. A
                                       For           
                           Inbound/Outbound Shipments

































         Pallet Unitization, including Stretch Wrap, Pallet Cap, Plastic
                            Banding and Corner Guard
                                    FIGURE 7

Sun Microsystems Inc.               - 15 -                           Proprietary
<PAGE>

                                  EXHIBIT K-2

                                                       Spec. Number: 950-1419-03
                                                                           Rev.C
                                                             Date: July 15, 1993

sun
microsystems



                           Engineering Specification
                                      for
                           Part Identification Label



                                  Proprietary



                             Sun Microsystems, Inc.
                               2550 Garcia Avenue
                            Mountain View, Ca 94043
                                 (415) 960-1300




                                                  This  Document is the property
                                                  of Sun Microsystems,  Inc. and
                                                  contains  information which is
                                                  confidential  and  proprietary
                                                  to Sun  Microsystems,  Inc. No
                                                  part of this  document  may be
                                                  copied,      reproduced     or
                                                  disclosed  to  third   parties
                                                  without   the  prior   written
                                                  consent  of Sun  Microsystems,
                                                  Inc.
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label


                                Revision History

<TABLE>
<CAPTION>
----------- ---------- ---------------- ------------------------------------------- ------------- ------------------
   DASH        REV         ECO NO.                DESCRIPTION OF CHANGE                 DATE          APPROVED
----------- ---------- ---------------- ------------------------------------------- ------------- ------------------
<S>         <C>        <C>              <C>                                         <C>           <C>
   -03          A         WO_02368                  Production Release                01/21/92        01/16/92
----------- ---------- ---------------- ------------------------------------------- ------------- ------------------
   -03          B         WO_04150         -Reduc human readable minimal height       03/10/93        03/09/93
                                                       requirements
                                             -Add "WO" field to tape 2 labels
                                            -Update ME contact info section 12
                                         -Change all references from PDC M.E. to
                                                Supply Partner Engineer

----------- ---------- ---------------- ------------------------------------------- ------------- ------------------
   -03          C         WO_04849                    Update Page 9                   07/15/93        07/15/93
----------- ---------- ---------------- ------------------------------------------- ------------- ------------------






















----------- ---------- ---------------- ------------------------------------------- ------------- ------------------
</TABLE>

Sun Microsystems, Inc.               - 2 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label


                                Table of Contents

         Revision History                                                      2

1.       Purpose                                                               5

2.       Scope                                                                 5

3.       Document Identification                                               5

4.       Effectivity                                                           5

5.       Applicable Standards                                                  5
         5.1.     AIM-USD-3                                                    5
         5.2.     United States Department of Defense Standards                5
         5.3.     American National Standards Institute                        6

6.       Definitions
6

7.       Types of Labels                                                       6

8.       Bar Code Symbology Requirements                                       7
         8.1.     Barcode Format (Code 39)                                     7
         8.2.     Width/Ratio Requirements                                     7
         8.3.     Quiet Zones                                                  7
         8.4.     Check Digit                                                  7
         8.5.     Data Identifier Character                                    7
         8.6.     Quality Assurance Requirements                               8
         8.7.     Barcode/Print Height-Requirements                            8

9.       Label Information Requirements                                        8
         9.1.     Marketing Identification Number                              9
         9.2.     Part Number                                                 10
         9.3.     Serial Number                                               11
         9.4.     Quantity                                                    12
         9.5.     Supplier Code                                               13
         9.6.     Date Code or Manufacturing Date                             13
         9.7.     Box Count                                                   14
         9.8.     Work Order                                                  14

10.      Format and Size Requirements                                         15
         10.1.    Label Layout                                                15
         10.2.    Size                                                        15

Sun Microsystems, Inc.               - 3 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label

         10.3.    Location of Label on Shipping Container                     15

11.      Label Construction and Quality                                       16
         11.1.    Label Printing                                              16
         11.2.    Reflectivity                                                16
         11.3.    Temperature/Humidity                                        16
         11.4.    Fading                                                      16
         11.5.    Adherence                                                   16

12.      Exceptions - Who to Contact                                          17

Appendix A - Sample Labels (Type I, II, III, IV)

Appendix B - Samples of Marketing Identification Numbers

Appendix C - Commodity Class Codes requiring serialization

Sun Microsystems, Inc.               - 4 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label


1.       Purpose

The purpose of this  specification  is to identify Label  Requirements  for Part
Identification Labels.

2.       Scope

This  specification  will apply to all products  that are received  into the Sun
Microsystem's Product Distribution Center(s) and shipped out to Sun customers.

3.       Document Identification

This document shall be identified by SUN Part Number 950-1419-XX, Rev_.

4.       Effectivity

This standard is effective as of 01/01/90.

5.       Applicable Standards

This section lists industry and other standards relevant to this standard.

       5.1.   AIM USD-3

              The Automatic  Identification  Manufacturers  (AB4) standard USD-3
              defines the CODE 39 bar code  structure.  AIM is a product section
              of the  Materials  Handling  Institute  and  is  located  at  1326
              Freeport Rd., Pittsburgh, PA 15238

              The AIM USD-3  character  set  comprises  the  letters A through Z
              (upper case only), the digit 0 through 9, a space, a hyphen(-),  a
              period(.),  a plus sign (+), a dollar sign ($), a slash (/), and a
              percent sign (%).

       5.2.   United States Department of Defense Standards

              A  standard  issued by the U.S.  Department  of  Defense  provides
              excellent additional information regarding barcoding. The standard
              is MIL-STD-1189,  Standard Department of Defense Symbology,  which
              specifies  standards  for bar code  symbology.  The  Department of
              Defense  prefers  to  make  MIL-STD  documents  available  through
              contracting  officers,  meaning that an organization  must have an
              active  contract  with the  Department  of Defense to get them. If
              necessary Sun Microsystems  will provide access to a copy of these
              documents; requests should be sent to address shown in section 12.

Sun Microsystems, Inc.               - 5 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label

       5.3.   American National Standards Institute

              The American National Standards  Institute (ANSI) document X3A1.3,
              Bar Code Print  Quality,  specifies a standard  for bar code print
              quality.  Copies may be obtained from ANSI at 1430  Broadway,  New
              York, N.Y. 10018.

6.       Definitions

PART IDENTIFICATION  LABEL:  The label that is  applied  to the  outside of each
     shipping  container.  The primary  purpose of this label is to identify the
     part  number  associated  with the  contents of the box.  The  Distribution
     Center  uses the part  number  as the  primary  key for all  processing  of
     package within the Distribution Center for shipment to SUN customers.

SHIPPING CONTAINER:  The package shipped to the customer.  This package requires
     no further overboxing or special handling in order to ship.

BARCODE  SYMBOL:  Each  bar  code  symbol  is  made  up of a  series  of  narrow
     bars/spaces.  Each data  character is a unique  combination  of wide/narrow
     bars and spaces (representing one human readable character); the collection
     of the data characters with a data identifier,  a start and stop character,
     and a quiet zone at each end makes up the barcode symbol.

QUIETZONE: The area  immediately  preceding the start  character and immediately
     following the stop character. Quiet zones contain no markings.

START/STOP  CHARACTERS:  The start and stop  characters are used to identify the
     leading and  trailing end of the barcode  symbol.  They must be included in
     every barcode symbol and generally represent the "asterisk" character.

7.       Types of Labels

Use of the  proper  label  format is  determined  by the type of  product  being
labeled and the size of the shipping container. There are four types of labels:

Type l:    MAKE-TO-STOCK  LABELS:  for standard Sun product  label panel greater
           than 3" high

Type 2:    MAKE-TO-ORDER   LABELS:  for  Sun  product  made  to  customer  order
           (deskside systems)

Type 3:    SMALL BOX LABEL:  for  product  where the label panel is less than or
           equal to 3" high

Type 4:    MASTERPACK  LABEL- for product where multiple  quantities of the same
           part are  inbound to the  Distribution  Center  (see  Appendix-A  for
           samples of these)

Sun Microsystems, Inc.               - 6 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label

8.     Bar Code Symbology Requirements

       8.1.   Barcode Format (Code 39)

              All barcodes  used on the Part  Identification  labels will us the
              CODE 39 format and will conform to (AIM USD-3 or MIL-STD-1189).

       8.2.   Width/Ratio Requirements

              The  minimum  wide to narrow  ratio shall be 2.5:1 and the nominal
              width  of  the  narrow  bar/space  shall  be  .015  inches  (the X
              dimension).  The density of the barcode shall be nominally 3.70 to
              6.25 characters per inch.

       8.3.   Quiet Zones

              The quiet zones shall be a minimum of .15 inches.

       8.4.   Check Digits

              Check digits shall not be added in the barcode symbol.

       8.5.   Data Identifier Character

              A data identifier shall be the first character following the start
              code of the bar code symbol.  This character is not to be included
              in the  human  readable  line.  All  barcode  symbols  on the Part
              Identification Label shall have an imbedded data identifiers.

              The following data identifier codes are assigned for the different
              types of data:

              P - Part number
              S - Serial Number
              Q - Quantity
              D - Date or  Manufacturing  code (for  future  use) 
              W - Work order number (for future  use).  
              V - Supplier  code (for future use) 
              M - Marketing/Product  number  (if  barcoded)  
              B - Optional  Field if printed in barcode format

              No other  barcodes  shall be  printed  on the Part  Identification
              Label.  If other  barcodes are needed for any other  reason,  they
              must  conform  to these  specifications  and must  include  a data
              identifier to be specified in this document. This must be approved
              by the Supply Partner Engineer, see address in section 12.

Sun Microsystems, Inc.               - 7 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label

       8.6.   Quality Assurance Requirements

              It is the  responsibility of Suppliers to provide bar coded labels
              that meet these  specifications.  Verification of the data encoded
              in the  barcode  symbol  will  be  done  using  scanner  equipment
              equivalent   to   scanners   located  in  the  Sun   Microsystem's
              Distribution  Center.  Human  readable  data on the label  will be
              inspected for legibility and format requirements.

              Suppliers   will  be  requested  to  provide   label  samples  for
              verification.  These  samples  shall  be  provided  to the  Supply
              Partner Engineer ME for verification of scannability,  format, and
              legibility.  Rejected  labels will be  returned  to  supplier  for
              corrections.

       8.7.   Barcode/Print Height Requirements

              The barcode height shall be a minimum of 3/8 inch; the recommended
              height is 1/2 inch.  Human  readable  text  shall be a minimum  of
              5/16" 'and a maximum of 1/2", unless otherwise specified below.

9.       Label Information Requirements

         The  following  data  elements  shall be  printed on each  label.  Note
         required vs. optional  fields,  and those requiring  barcode symbols vs
         those requiring human readable information only.

         The  fields  shall be printed  in the same  order as  specified  below,
         please see section 10.1 for more details.

Sun Microsystems, Inc.               - 8 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label


       9.1.   Marketing Identification Number

              This is the SUN specified  product number as it appears in the SUN
              Price List or as specified by Product Marketing.

              The   Marketing   Product   Identity   is  required  on  all  part
              identification labels.

              For "CS Only"  parts  that do not  require a  marketing  identity,
              please add the description of the part in this field.


              FIELD NAME: MARKETING IDENTIFICATION NUMBER

<TABLE>
<CAPTION>
                                     ------------- --------------- ------------------ --------------
         Label Type                       1              2                 3                4
         --------------------------- -------------------------------- ------------------------------
                                             Human Readable                      Barcode
         --------------------------- -------------------------------- ------------------------------
<S>                                  <C>                              <C>
         Required/Optional                          R                              N/A
         --------------------------- -------------------------------- ------------------------------
         Field Title                              None
         --------------------------- -------------------------------- ------------------------------
         Data Identifier                                                           N/A
         --------------------------- -------------------------------- ------------------------------
         Print Height, min                        5/16"
         --------------------------- -------------------------------- ------------------------------
         Min/Max Length                        Max 18 Char
         --------------------------- -------------------------------- ------------------------------
</TABLE>

         See appendix B for examples.

Sun Microsystems, Inc.               - 9 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label

       9.2.  Part Number

             The SUN specified Part Number is the box identification used by Sun
             in  manufacturing  and  product  distribution.  This part number is
             sometimes  referred  to as the  "manufacturing"  part number of the
             "temporary" part number.

             The Part Number is required  on all part  identification  labels in
             human  readable  and  barcode   format,   to  include  any  special
             characters such as dashes (-) or slashes(/).

         FIELD NAME: PART NUMBER

<TABLE>
<CAPTION>
                                     ------------- --------------- ------------------ --------------
         Label Type                       1              2                 X                4
         --------------------------- -------------------------------- ------------------------------
                                             Human Readable                      Barcode
         --------------------------- -------------------------------- ------------------------------
<S>                                  <C>                              <C>
         Required/Optional                          R                               R
         --------------------------- -------------------------------- ------------------------------
         Field Title                               PN:
         --------------------------- -------------------------------- ------------------------------
         Data Identifier                                                            P
         --------------------------- -------------------------------- ------------------------------
         Print Height, min                        5/16"                            1/2"
         --------------------------- -------------------------------- ------------------------------
         Min/Max Length
         --------------------------- -------------------------------- ------------------------------
</TABLE>

         FIELD NAME: PART NUMBER

<TABLE>
<CAPTION>
                                     ------------- --------------- ------------------ --------------
         Label Type                       X              X                 3                X
         --------------------------- -------------------------------- ------------------------------
                                             Human Readable                      Barcode
         --------------------------- -------------------------------- ------------------------------
<S>                                  <C>                              <C>
         Required/Optional                          R                               R
         --------------------------- -------------------------------- ------------------------------
         Field Title                               PN:
         --------------------------- -------------------------------- ------------------------------
         Data Identifier                                                            P
         --------------------------- -------------------------------- ------------------------------
         Print Height, min                        3/16"                           3/8"
         --------------------------- -------------------------------- ------------------------------
         Min/Max Length
         --------------------------- -------------------------------- ------------------------------
</TABLE>

Sun Microsystems, Inc.              - 10 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label

       9.3.  Serial Number

             The  serial  number is a unique  number  either  designated  by Sun
             Microsystems  to the supplier or assigned by the product  supplier.
             Serial   numbers  by  product   shall  not  be   repeated   whether
             multi-sourced or not.

             Commodity  class  codes  requiring  serial  numbers  are  listed in
             Appendix  C. Any  exception  to this  list  must be  authorized  in
             writing by Supply Partner Engineer.  This document will not be used
             to track exceptions.

         FIELD NAME: SERIAL NUMBER

<TABLE>
<CAPTION>
                                     ------------- --------------- ------------------ --------------
         Label Type                       1              2                 X                X
         --------------------------- -------------------------------- ------------------------------
                                             Human Readable                      Barcode
         --------------------------- -------------------------------- ------------------------------
<S>                                  <C>                              <C>
         Required/Optional                          R                               R
         --------------------------- -------------------------------- ------------------------------
         Field Title                               SN:
         --------------------------- -------------------------------- ------------------------------
         Data Identifier                                                            S
         --------------------------- -------------------------------- ------------------------------
         Print Height, min                        5/16"                           3/8"
         --------------------------- -------------------------------- ------------------------------
         Min/Max Length                          Max 10
         --------------------------- -------------------------------- ------------------------------
         Default = 0000
</TABLE>

         FIELD NAME: SERIAL NUMBER

<TABLE>
<CAPTION>
                                     ------------- --------------- ------------------ --------------
         Label Type                       X              X                 3                X
         --------------------------- -------------------------------- ------------------------------
                                             Human Readable                      Barcode
         --------------------------- -------------------------------- ------------------------------
<S>                                  <C>                              <C>
         Required/Optional                          O                              O *
         --------------------------- -------------------------------- ------------------------------
         Field Title                               SN:
         --------------------------- -------------------------------- ------------------------------
         Data Identifier                                                            S
         --------------------------- -------------------------------- ------------------------------
         Print Height, min                        3/16"                           3/8"
         --------------------------- -------------------------------- ------------------------------
         Min/Max Length                          Max 10
         --------------------------- -------------------------------- ------------------------------
         * Required if human readable printed                                   default = 0000
</TABLE>

Sun Microsystems, Inc.              - 11 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label

         FIELD NAME: SERIAL NUMBER

<TABLE>
<CAPTION>
                                     ------------- --------------- ------------------ --------------
         Label Type                       X              X                 X                4
         --------------------------- -------------------------------- ------------------------------
                                             Human Readable                      Barcode
         --------------------------- -------------------------------- ------------------------------
<S>                                  <C>                              <C>
         Required/Optional                         N/A                             N/A
         --------------------------- -------------------------------- ------------------------------
         Field Title
         --------------------------- -------------------------------- ------------------------------
         Data Identifier
         --------------------------- -------------------------------- ------------------------------
         Print Height, min
         --------------------------- -------------------------------- ------------------------------
         Min/Max Length
         --------------------------- -------------------------------- ------------------------------
</TABLE>

         If the product does not have a serial number,  print four zeros in this
         field.

       9.4.  Quantity

             The quantity identifies how many units of the specified part number
             are packaged in the box. This number is usually 1 unit. If products
             are master  boxed,  this  quantity  shall  represent the master box
             quantity;  units  inside the  master box shall also be labeled  per
             this specification. This field is not needed for type 2 labels.

         FIELD NAME: QUANTITY

<TABLE>
<CAPTION>
                                     ------------- --------------- ------------------ --------------
         Label Type                       1              X                 3                4
         --------------------------- -------------------------------- ------------------------------
                                             Human Readable                      Barcode
         --------------------------- -------------------------------- ------------------------------
<S>                                  <C>                              <C>
         Required/Optional                          R                               R
         --------------------------- -------------------------------- ------------------------------
         Field Title                              QTY:
         --------------------------- -------------------------------- ------------------------------
         Data Identifier                                                            Q
         --------------------------- -------------------------------- ------------------------------
         Print Height, min                        3/16"                           3/8"
         --------------------------- -------------------------------- ------------------------------
         Min/Max Length                            N/A                             N/A
         --------------------------- -------------------------------- ------------------------------
</TABLE>

Sun Microsystems, Inc.              - 12 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label

       9.5.  Supplier Code

             The  Supplier  Code  shall   identify  each  unique   manufacturing
             supplier,  whether  a SUN  manufacturing  site  or an  outside  OEM
             supplier.  Sun manufacturing  supplier codes shall identify the Sun
             plant  code  (002,  200,  etc).  Sun  Purchasing  shall  assign the
             supplier or vendor code for all non-Sun  manufacturing sites or OEM
             suppliers.

         FIELD NAME: SUPPLIER CODE

<TABLE>
<CAPTION>
                                     ------------- --------------- ------------------ --------------
         Label Type                       1              2                 3                4
         --------------------------- -------------------------------- ------------------------------
                                             Human Readable                      Barcode
         --------------------------- -------------------------------- ------------------------------
<S>                                  <C>                              <C>
         Required/Optional                          R                              N/A
         --------------------------- -------------------------------- ------------------------------
         Field Title                               SC:
         --------------------------- -------------------------------- ------------------------------
         Data Identifier                                                           N/A
         --------------------------- -------------------------------- ------------------------------
         Print Height, min                         1/4"
         --------------------------- -------------------------------- ------------------------------
         Min/Max Length                            3/6                             N/A
         --------------------------- -------------------------------- ------------------------------
</TABLE>

       9.6.  Manufacturing Date

             This field shall represent the manufacturing date of the product.

             This date is required if the  product is not  serialized  or if the
             product is manufactured for SUN by an outside supplier.  The format
             of the date shall be mm/dd/yy.  This field is not needed for type 2
             labels.

         FIELD NAME: DATE OF MANUFACTURE

<TABLE>
<CAPTION>
                                     ------------- --------------- ------------------ --------------
         Label Type                       1              X                 3                X
         --------------------------- -------------------------------- ------------------------------
                                             Human Readable                      Barcode
         --------------------------- -------------------------------- ------------------------------
<S>                                  <C>                              <C>
         Required/Optional                          R                              N/A
         --------------------------- -------------------------------- ------------------------------
         Field Title                              DOM:
         --------------------------- -------------------------------- ------------------------------
         Data Identifier                                                           N/A
         --------------------------- -------------------------------- ------------------------------
         Print Height, min                        1/4" *
         --------------------------- -------------------------------- ------------------------------
         Min/Max Length                         mm/dd/yy
         --------------------------- -------------------------------- ------------------------------
         *  May be stamped or hand written
</TABLE>

Sun Microsystems, Inc.              - 13 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label


       9.7.  Box Count

             This field shall represent the box count for make-to-order products
             (type 2 labels).

         FIELD NAME: Box Count 'Box X of N'

<TABLE>
<CAPTION>
                                     ------------- --------------- ------------------ --------------
         Label Type                       X              2                 X                X
         --------------------------- -------------------------------- ------------------------------
                                             Human Readable                      Barcode
         --------------------------- -------------------------------- ------------------------------
<S>                                  <C>                              <C>
         Required/Optional                          R                              N/A
         --------------------------- -------------------------------- ------------------------------
         Field Title                           Box X of N
         --------------------------- -------------------------------- ------------------------------
         Data Identifier                                                           N/A
         --------------------------- -------------------------------- ------------------------------
         Print Height, min                        5/16"
         --------------------------- -------------------------------- ------------------------------
         Min/Max Length                            N/A                             N/A
         --------------------------- -------------------------------- ------------------------------
</TABLE>

       9.8.  Work Order Number

             This field shall represent the box count for make-to-order products
             (type 2 labels)

         FIELD NAME: Work Order Number

<TABLE>
<CAPTION>
                                     ------------- --------------- ------------------ --------------
         Label Type                       X              2                 X                X
         --------------------------- -------------------------------- ------------------------------
                                             Human Readable                      Barcode
         --------------------------- -------------------------------- ------------------------------
<S>                                  <C>                              <C>
         Required/Optional                          R                              N/A
         --------------------------- -------------------------------- ------------------------------
         Field Title                               WO:
         --------------------------- -------------------------------- ------------------------------
         Data Identifier                                                           N/A
         --------------------------- -------------------------------- ------------------------------
         Print Height, min                        3/8"
         --------------------------- -------------------------------- ------------------------------
         Min/Max Length                            N/A                             N/A
         --------------------------- -------------------------------- ------------------------------
</TABLE>

Sun Microsystems, Inc.              - 14 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label

10.      Format and Size Requirements

       10.1.  Label Layout

              The label data shall be printed  in the  following  order,  noting
              optional vs. required or conditions  determining  whether to print
              or not as  indicated  by  "conditional'.  Please refer to previous
              section to determine the conditions.

              Human Readable Marketing Identification Number         Required
              Human Readable Part Number                             Required
              Barcode Part Number                                    Required
              Human Readable Serial Number                           Required
              Barcode Serial Number                                  Required
              Human Readable Quantity                                Conditional
              Barcode Quantity                                       Conditional
              Human Readable Supplier Code                           Required
              Human Readable Date of Manufacture                     Conditional
              Human Readable Box Count                               Conditional
              Human Readable Work Order Number                       Conditional

       10.2.  Size

              The  recommended  size of the  large  label is 4" x  4"(101.6mm  X
              101.6mm).  Maximum allowed size is 6.5" x 6.5" (165.lmm x 165.lmm)
              The  recommended  size of the  small  label is 4" x  2"(101.6mm  X
              50.8mm).

              See samples. Appendix A - i thru A - iv.

       10.3.  Location of Label on Shipping Box

              Unless otherwise specified, the label shall be placed in the upper
              right corner of the package.

              The label shall be placed on shipping  container to align with the
              top and right  edges of the box  without  wrapping  around  either
              corner.  Tolerance  for label  placement is at least 1/8" from the
              edge,  no more than 1 inch and no more out of skew than + 1/4 inch
              from top edge.

              The  intent  of  this  location  requirement  is  consistency  and
              professional looking results.

              The part  identification  label shall be placed on the box so that
              when palletized,  the label is visible when looking at the side of
              the pallet.

Sun Microsystems, Inc.              - 15 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label

              Labels  shall  not be placed  on the SUN logo  surface  of the box
              labels and shall not cover any other box markings such as handling
              symbols or box maker certificate.

              No other supplier labels shall be placed on the shipping container
              unless approved by Sun in writing.

11.      Label Construction and Quality

       11.1.  Label Printing

              The  label  must be  printed  with  either an  impact  printer,  a
              photographic composition process, or a thermal transfer process.

              White paper stock is required.

       11.2.  Reflectivity

              Reflectivity  requirements  shall be met in both the B633 and B900
              spectral bands.  The minimum  reflectance of the quiet zones shall
              be 60 percent.  The minimum  reflectance of the spaces between the
              bars shall be 51 percent.

       11.3.  Temperature/Humidity

              The label shall be able to tolerate a range of  temperatures  from
              -40  degrees   centigrade   to  85  degrees   centigrade   without
              degradation in scanning performance or legibility.

              The label  shall not be  susceptible  to high  humidity  (90%) and
              shall maintain legibility and adherence requirements.

       11.4.  Fading

              The label shall be fade free under both  sunlight  and  artificial
              fight conditions for a period of 2 (two) years.

       11.5.  Adherence

              The labels shall not be removable. The label will not become loose
              or peel off for a period of 2 (two) years.

Sun Microsystems, Inc.              - 16 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label


12.      Exceptions -- Who to Contact

U.S. West Coast
---------------

Sun Microsystems Computer Corporation
2550 Garcia Avenue M/S: Mil05-117
Mountain View, CA 94043-1100
Attn: Supply Partner Manufacturing Engineering
Fax: (408) 945-6498

U.S. East Coast
---------------

Sun Microsystems Computer Corporation
5 Omni Way NVS: CHL05_2
Chelmsford, MA 018424-4141
Attn: CSU Manufacturing Engineering
Fax: (508) 442-0015

Europe
------

Supplier Engineering
Sun Microsystems Scotland B.V
Springfield
Linlithgow
West Lothian
EH49 7LR
FAX- +44 (0) 506 670011

Label samples should be sent to the above address for verification.

Sun Microsystems, Inc.              - 17 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label


APPENDIX A-i

TYPE 1 SAMPLE LABEL
MAKE-TO-STOCK or
DOCK-TO-STOCK PRODUCTS






SEE SPECIFICATIONS FOR DETAILS ON PRINTING
EACH OF THE FIELDS ON THIS LABEL

Sun Microsystems, Inc.              - 18 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label


APPENDIX A-ii

TYPE 2 SAMPLE LABEL
MAKE TO ORDER PRODUCTS






SEE SPECIFICATIONS FOR DETAILS ON PRINTING
EACH OF THE FIELDS ON THIS LABEL

Sun Microsystems, Inc.              - 19 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label


APPENDIX A-iii

TYPE 3 SAMPLE LABEL
MINI LABEL FOR
MAKE-TO-STOCK AND
DOCK-TO-STOCK PRODUCTS






SEE SPECIFICATIONS FOR DETAILS ON PRINTING
EACH OF THE FIELDS ON THIS LABEL

Sun Microsystems, Inc.              - 20 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label


APPENDIX A-iv

TYPE 4 LABEL SAMPLE
MASTERPACK LABEL






SEE SPECIFICATIONS FOR DETAILS ON PRINTING
EACH OF THE FIELDS ON THIS LABEL

Sun Microsystems, Inc.              - 21 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label


                                   Appendix B

To find the correct  "identity" for your manufacturing part number, use INQMPPRT
in the BOM or COE module of Cullinet.  Enter your  manufacturing part number and
Cullinet  will  respond  with the  identity to print on the  shipping  container
label.

The following are examples:

IDENTITY                   DESCRIPTION                            PART NUMBER
================================================================================

4/75S-32-P43            32MB DESKTOP SERVER-PKG                   600-2582-xx
4/40MN-8-P40            8MB MONO FR.BUF. DESKTOP PKG              600-2569-xx
4/50N-16-P43                                                      600-2886-xx
4/75GXN-32-P43          32MB MONITORLESS DESKTOP PKG              600-2841-xx

X552A                   207MB LUNCHBOX                            595-2152-xx
X559L                   CD ROM for Int Exp Pedestal               595-2348-xx
X559A                   CD ROM                                    595-1929-xx
X571A                   1.3 GB SCSI DT STORAGE MODUL              595-2253-xx
X572A                   1.3 GB SCSI Int EXPANSION DISK            595-2293-xX

X227A                   17"MONOCHROME MONITOR                     365-1100-xx
X228A                   19"MONOCHROME MONITOR                     365-1140-xx
X246A                   19"COLOR MONITOR                          365-1112-xx

X8300                   NORTH AMERICAN CTY HARDWARE KT            595-2307-xx
X8301                   UNIVERSAL COUNTRY HARDWARE KIT            595-2306-xx
X8302                   FRENCH COUNTRY HARDWARE KIT               595-2308-xx
X300Q-BLD               ELC North American Sys Acc Kit            595-2428-xx
X303Q-BLD               ELC German Sys Acc Kit                    595-2429-xx

X9301Y                  SS IPC OWNER'S SET IN ENGLISH             855-1481-xx
X9302Y                  SS IPC OWNER'S SET IN FRENCH              855-1514-xx
X9301U                  SS IPX OWNER'S SET IN ENGLISH             855-1502-xx

X116Q                   16MB MEMORY EXP                           F501-1822-xx
X104Y                   4MB MEMORY EXPANSION MODULE               595-2108-xx
X104H                   4MB MEMORY EXPANSION MODULE               X104H
X116Y                   16MB MEMORY EXP                           595-2109-xx
X168A                   64MB ECC Memory Exp SIMM                  595-2361-xx

SPRN-TONER              TONER, CARTRIDGE, ZEBRA                   365-1124-xx
SPRN-DRUM               DRUM, CARTRIDGE, ZEBRA                    365-1125-xx

Sun Microsystems, Inc.              - 22 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label

UG-RMA                                                            850-1880-xx

X1008A                  OPT ASSY,SPIFF W/DRIVER,5VDC              605-1291-xx
X1009A                  High-Speed Serial Interface/SBus          605-1301-xx

HSS-1.0-X-X-9           HSI/S Documentation                       855-1526-xx
X180A                   32 KEY BUTTON GRFX 1/0 DEVICE             595-1865-xx
X190A                   8DIAL GRFX INPUT VALUATOR BOX             595-1737-xx

SX-9A                   BEG GD MMBX                               851-1028-xx
SX-9B                   SYS ADMIN MINIBX                          851-1029-xx
SX-9C                   SYS REF MINIBX                            851-1018-xx
SX-9D                   PRGR GDS MINIBX                           851-1019-xx
OWN-2.0-X-X-9U          ONW V2 MNL ENDUSR                         851-1035-xx

Contact  the  Supply  Partner  Engineer  if there  are any  questions  regarding
identities.

Sun Microsystems, Inc.              - 23 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label


                               Appendix B Addendum

SOFWARE PRODUCTS
----------------

NAME_REV_MEDIA               (15 characters maximum)

NAME:                 This is the name of the tape program
                      8 characters max; 3 characters minimum

REV:                  This is the revision number of the media

MEDIA:                TP (1/4" tape), CD, or MAN (manuals)


EXAMPLES:
---------

NWSPRNT 1.0 TP

OS 4.1.1B CD

FORTRAN 1.0 CD

OWN 1.0.1 TP

COBOL 1.0 MNL

Sun Microsystems, Inc.              - 24 -                           Proprietary
<PAGE>
July 15, 1993                                          Spec. Number: 950-1419-03
                           Engineering Specification
                                       for
                            Part Identification Label


                                   Appendix C

COMMODITY CLASS CODES REQUIRING SERIAL NUMBERS

365 - (some known exceptions)

370-

F370 -(some known exceptions)

F300-

F540-

F501 -

599-

600-

603-

605-

610-

595 - (some known exceptions)

556-

558-

565-

R365-

R595-

R599-

850-1880-

Sun Microsystems, Inc.              - 25 -                           Proprietary

<PAGE>


                                                  Spec. Number 950-134-01 Rev. A
                                                              Date: May 31. 1989

                                   Exhibit K-4







                         Shipping Carton Color Standard
                                       for
                         Sun Blue, Red, Gray, and Black









                             Sun Microsystems, Inc.
                               2550 Garcia Avenue
                             Mountain View, CA 94043
                                 (415) 960-1300







<PAGE>
                                Revision History

<TABLE>
<CAPTION>
-------------- ------------ -------------- ----------------------------------------- ----------- -----------------
    DASH           REV          ECO NO.             DESCRIPTION OF CHANGE              DATE           APPROVED
-------------- ------------ -------------- ----------------------------------------- ----------- -----------------
<S>            <C>          <C>            <C>                                       <C>         <C>
   -01             1                                      Unreleased                 5/31/89
-------------- ------------ -------------- ----------------------------------------- ----------- -----------------
   -01             A                                  Production Release
-------------- ------------ -------------- ----------------------------------------- ----------- -----------------

-------------- ------------ -------------- ----------------------------------------- ----------- -----------------
</TABLE>

NOTE:  This is a 2 page document

Originator:
Approved by CCB:           Date:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                    CCB Members
------------------------------------------------------------------------------------------------------------------
<S>                  <C>                             <C> <C>                 <C>
Project Mgr.                                             Test Eng.

-------------------- ------------------------------- --- ------------------- -------------------------------------
Sustain. Eng.                                            Mat'l. Plan.

-------------------- ------------------------------- --- ------------------- -------------------------------------
Mfg. Eng.                                                Prod. Contl.

-------------------- ------------------------------- --- ------------------- -------------------------------------
Q.A.                                                     Prod. Compl.

-------------------- ------------------------------- --- ------------------- -------------------------------------
C.S.D.                                                   Other

-------------------- ------------------------------- --- ------------------- -------------------------------------
</TABLE>
<PAGE>
1. Scope

       1.1    This  document  specifies  the  color of Sun Blue  which  shall be
              printed on all non-OEM cartons.

       1.2    This  document  applies to all  manufacturers  who supply Sun with
              Dock to Stock  Products  and vendors  who supply Sun with  printed
              cartons.

2. Sun Blue

       2.1.   Sun Blue, per Sun color chip  255-XXX-XX,  is used for graphics on
              Sun product shipping packages.

       2.2.   Sun Blue  color  chips are  available  for the  substrates  listed
              below.  The  pigments,  identified  in the table  below,  shall be
              combined to produce a match within the following parameters:
              a.     The  densitometer  reading  of the color chip is 90 and the
                     maximum  varience  from  this  shall be plus or minus  five
                     points. (85-95)
              b.     The colors must match  visually when viewed under  daylight
                     5000 K

<TABLE>
<CAPTION>
----------------------- ------------------------------------- --------------------------------------------------
Part Number             Substrate                             Flexographic Pigment Combination

----------------------- ------------------------------------- --------------------------------------------------

----------------------- ------------------------------------- --------------------------------------------------
<S>                     <C>                                   <C> 
                                                                            Color Index Pigments:
255-1007-01             Kraft
                                                                                   
----------------------- -------------------------------------                      Red 57 

255-1006-01             #1 White Corrugated                                        
                                                                                   Blue 15
----------------------- -------------------------------------                      
                                                                                          
255-1005-01             #3 White Corrugated                                        White 6

----------------------- ------------------------------------- --------------------------------------------------
</TABLE>


           -----------------------------------------------------------


                            Locate Appropriate Color
                                    Chip Here


           -----------------------------------------------------------
<PAGE>
3.  Sun Red, Gray, and Black

       3.1    There are  three  other  colors  that can  appear on Sun  Shipping
              Cartons:

               1.       Sun Red, per PMS 185
               2.       Sun Gray, per PMS 424
               3.       Black (no PMS reference number needed)

<PAGE>

                                   EXHIBIT K-5


                         SPECIFICATION FOR A SUN COLOR:
                                SUN MEDIUM PURPLE
                                   950-1306-01



Contents
--------
      1.   Purpose
      2.   Scope
      3.   Color
      4.   Application of specification to drawings
      5.   Color coordinates and tolerances

1.     Purpose

       This  specification  establishes  the values and  tolerances  required to
       define the color Sun Medium Purple.

2.     Scope

        2.1     This color  definition is intended for  application  of material
                approved by Sun Microsystems.

3.     Color

        3.1     This   specification   is  consistent  with   requirements   for
                application  of  color  set  forth in the Sun  General  Cosmetic
                Specification.

4.     Application of specification to drawing

        4.1     General

                4.1.1   This   specification   is  intended  to  be  applied  in
                        conjunction with the Sun General Cosmetic Specification.
<PAGE>
                          SPECIFICATION FOR A SUN COLOR
                                SUN MEDIUM PURPLE
                                   950-1306-01


                4.1.2   The inclusion of this  specification  number is adequate
                        to   completely   define  the  color   represented   and
                        controlled   by  this   specification.   However  it  is
                        recommended to inlcude the English name of the color for
                        reference.

                4.1.3   When  this  specification  is  referenced  by  the  part
                        drawing,  all relevant values and specifications  herein
                        apply unless otherwise noted on the drawing.

5.0    Color Coordinates and Tolerances

        5.1     CIE Lab A,C,D and F

                5.1.1   Coordinates  are given for 4 illuminants  (CIE Lab A,C,D
                        and F) in L*a*b* color space. Allowable tolerance ranges
                        for each  coordinate  are  included as part of the color
                        definition,  and may be assymetrical with respect to the
                        center  value.   E  is  used  to  modify  the  allowable
                        cumulative tolerance zone.

                5.1.2   Color must fall within  specified  tolerance  ranges for
                        all listed illuminants.

                5.1.3   Paint: The values for Sun Medium Purple are:

                        2 Deg. Observer CIE Lab

                                         L*     a*      b*   Delta E
                                                              (max.)
                           Iluminant
                                A      53.75   0.26   -8.53   0.35
                                C      54.06   3.01   -8.63   0.35
                                D      54.06   2.66   -8.53   0.35
                                F      53.73   2.39   -9.44   0.35

                           Tolerance + 0.35    0.35   0.35
                                     - 0.35    0.35   0.35

                                      2of5
<PAGE>
                          SPECIFICATION FOR A SUN COLOR
                                SUN MEDIUM PURPLE
                                   950-1306-01

            Alternate:
            2 Deg. Observer FMC II
            Illuminant                                             Delta E

                    X         Y         Z         x         y      (max.)
            A     23.94     21.74      9.49     .4339     .3941     0.9
            C     22.25     22.03     32.00     .2917     .2888     0.9
            D     21.49     22.03     29.42     .2946     .3020     0.9
            F     21.83     21.72     18.52     .3517     .3499     0.9
                                           
            Tolerance

            +     0.9       0.9       0.9
            -     0.9       0.9.      0.9


        5.1.4   Plastic: The values for Sun Medium Purple are:

            2 Deg. Observer CIE Lab

                              L*       a*         b*      Delta E
                                                           (max.)
            Illuminant
                A           54.09     0.34      -8.26      0.45
                C           54.38     2.92      -8.32      0.45
                D           54.38     2.61      -8.26      0.45
                F           54.04     2.21      -9.09      0.45

            Tolerance
                +           0.45      0.45      0.45
                -           0.45      0.45      0.45

                                      3of5
<PAGE>
                          SPECTFICATION FOR A SUN COLOR
                                SUN MEDIUM PURPLE
                                   950-1306-01


            Alternate:

            2 Deg. Observer FMC II

            Illuminant                                                Delta
                       X         Y         Z         x         y      (max.)
            A        24.31     22.06      9.56     .4347     .3944     1.1
            C        22.53     22.33     32.18     .2924     .2898     1.1
            D        21.77     22.33     29.61     .2953     .3029     1.1
            F        22.08     22.01     18.60     .3522     .3511     1.1
                                                                   
            Tolerance                                 
            +        1.1            1.1       1.1
            -        1.1            1.1       1.1

        5.2     Spectral Reflectance

                5.2.1   Percentage  of  reflection  given  for  wave  length  at
                        intervals  of  20  nanometers   for  the  range  360-720
                        nanometers. The spectral reflectance values are intended
                        to uniquely define the nominal color.

                                      4of5
<PAGE>
                          SPECIFICATION FOR A SUN COLOR
                                SUN MEDIUM PURPLE
                                   950-1306-01


        5.2.2   Reflectance Values for Paint and Plastic

                    Paint           Plastic   
                    -----------------------
                    NM              %RNM        %R   

                    360              8.04           360               12.13
                    380             12.01           380               16.71
                    400             23.56           400               25.69
                    420             28.50           420               28.33
                    440             27.84           440               27.91
                    460             27.18           460               27.48
                    480             25.65           480               25.94
                    500             24.63           500               24.68
                    520             22.59           520               22.91
                    540             21.71           540               21.86
                    560             20.69           560               21.39
                    580             21.49           580               21.60
                    600             21.98           600               21.99
                    620             21.53           620               22.09
                    640             21.35           640               21.97
                    660             21.38           660               21.85
                    680             20.97           680               21.61
                    700             20.55           700               21.37
                    720             20.24           720               21.11
                    740             20.02           740               20.88

                                      5of5
<PAGE>

                                    EXHIBIT M
                          LIST OF SUNCONNECT SUPPLIERS
                                    FROM WHOM
                              NP MAY PURCHASE GOODS


1.       3M
2.       Tharco


Additional parties may be added by mutual consent
NP's  ability to purchase  from such  suppliers is dependent on agreement of the
supplier.

<PAGE>

                                    EXHIBIT N
                              Pricing and Leadtime


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."


<PAGE>


                                   EXHIBIT N-1
                             Materials and Leadtimes


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."



<PAGE>


                                    Exhibit R
                           Customer Support Provisions


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."


<PAGE>


                                   Exhibit R-1
                             NP's Repair Facilities


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."



<PAGE>


                                   Exhibit R-2
                          Sun's Repair Depots and TPMs


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."



<PAGE>


                                   Exhibit R-3
                             Out of Warranty Repair


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."




<PAGE>


                                   Exhibit R-4
                                   NTF Charges


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."

<PAGE>


                     AMENDMENT #2 TO SUN MICROSYSTEMS, INC.
                       DEVELOPMENT AND PURCHASE AGREEMENT

Sun Microsystems,  Inc. ("Sun") and Network Peripherals Inc. ("NP") hereby agree
to amend the  Development  and Purchase  Agreement  between  them dated  2/25/94
("Agreement") as follows:

1.     In the event of a  conflict  between  the terms  and  conditions  of this
       Amendment  No. 2 and the  Agreement  as it  relates  to the OEM  Products
       listed in Exhibit N-2, this Amendment No. 2 shall take precedence.

2.     Reference   Section  1.4,  2.3  and  2.4.   There  are  no   "Development
       Deliverables" associated with the OEM Products set forth in Exhibit N-2.

3.     Within thirty (30) days after  execution of this Amendment No. 2, NP will
       deliver all  materials  described in 19.2 related to SunFDDI 5.0 to Sun's
       designated Escrow Agent.

4.     In Section 24, Administration, change Sun's primary administrator to:

       "Mayita Sanchz
       Sun Microsystems, Inc.
       2550 Garcia Avenue, UMIL01-118
       Ph: (408) 276-2797
       Fax: (408) 945-6498"

5.     Exhibit A-1 titled "SunFDDI 5.0 Product Specification", Sun Part Number *
       "Confidential  portion  has been  omitted and filed  separately  with the
       Commission.",   is  attached  hereto  and  incorporated  herein  by  this
       reference.

6.     In Exhibit  C,  Section  2.0.  insert the  following  after the  headings
       indicated:

       *  "Confidential  portion has been omitted and filed  separately with the
       Commission."

7.     Exhibit F dated 4/1/93 is deleted in its entirety.

8.     Exhibit  G,  SunFDDI  5.0 Sun  Unique  Elements  is  attached  hereto and
       incorporated herein by this reference.

9.     Exhibit  N-1 dated  January  18,  1996 is  deleted  in its  entirety  and
       replaced by Exhibit N-1 dated September 18, 1996

10.    Exhibit N-2 dated November 11, 1996 is attached  hereto and  incorporated
       herein by this reference.

11.    Exhibit  R-3 dated  December  5, 1995,  is deleted  in its  entirety  and
       replaced by Exhibit R-3 dated October 3, 1996 attached hereto.

Except as so amended, the Agreement is confirmed in its entirety.

SUN MICROSYSTEMS, INC.,                     NETWORK PERIPHERALS INC.

BY:     __________________________          BY:     ____________________________

NAME:   __________________________          NAME:   ____________________________

TITLE:  __________________________          TITLE:  ____________________________

DATE:   __________________________          DATE:   ____________________________

November 11, 1996 ff                   1               Network Peripherals, Inc.

<PAGE>


                       Sun FDDI 5.0 Product Specification
                       Exhibit A-1
                       _________________________________________________________


                                             *  "Confidential  portion  has been
                                             omitted and filed  separately  with
                                             the Commission."


<PAGE>


                      Sun FDDI Sbus Adapter 5.0
                      Product Requirements
                      __________________________________________________________


                      *  "Confidential   portion  has  been  omitted  and  filed
                      separately with the Commission."



<PAGE>


                      Exhibit G: Sun FDDI 5.0
                      Sun Unique Elements
                      __________________________________________________________


                      *  "Confidential   portion  has  been  omitted  and  filed
                      separately with the Commission."



<PAGE>


                                   EXHIBIT N-1
                             Materials and Leadtimes


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."



<PAGE>


                                   EXHIBIT N-2
                              Pricing and Leadtime


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."



<PAGE>



                                   Exhibit R-3
                             Out of Warranty Repair


*  "Confidential  portion  has  been  omitted  and  filed  separately  with  the
Commission."