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                                  ALLIANCE AGREEMENT

                                      NO. 350-148

                                       BETWEEN

                     INTERNATIONAL BUSINESS MACHINES CORPORATION
                                         AND
                           NETWORK COMPUTING DEVICES, INC.


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                                  ALLIANCE AGREEMENT

                                       BETWEEN

                     INTERNATIONAL BUSINESS MACHINES CORPORATION
                                         AND
                           NETWORK COMPUTING DEVICES, INC.



                                  TABLE OF CONTENTS



1.  ALLIANCE MANAGERS                                                        2

2.  ALLIANCE AGREEMENT STRUCTURE                                             4

3.  DEFINITIONS                                                              4

4.  PAYMENT                                                                  9

5.  COPYRIGHTS                                                               9

6.  PATENTS AND INVENTIONS                                                  13

7.  TERM AND TERMINATION                                                    15

8.  CONFIDENTIALITY                                                         17

9.  MARKETING DISCRETION                                                    17

10. INDEMNIFICATION                                                         17

11. DISPUTE RESOLUTION                                                      18

12. INSURANCE                                                               18

13. GENERAL                                                                 19



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                                  ALLIANCE AGREEMENT

                                       Between

                     International Business Machines Corporation
                                         and
                           Network Computing Devices, Inc.



                                    BASE AGREEMENT

This Alliance Agreement ("Agreement"), effective on the date last signed below,
is agreed to by Network Computing Devices, Inc., a corporation of the State of
California, with offices located at 350 North Bernardo Avenue, Mountain View,
California 94043-4207 ("NCD") and International Business Machines Corporation, a
corporation of the State of New York, with offices at 3605 Highway 52 North,
Rochester, Minnesota 55901-7829 ("IBM").

                                       RECITALS


A.  Whereas IBM is a supplier of computing systems for information processing,
    services and data communication applications.

B.  Whereas NCD is a developer and manufacturer of computer display terminal
    products and NCDware allowing interoperability across networks to gain
    access to various applications.

C.  Whereas this Alliance Agreement sets forth the terms and conditions by
    which NCD and IBM believe that an alliance between them for the
    development, manufacture, and support of an IBM network application
    terminal ("thin client") product will be mutually advantageous.

NOW THEREFORE, NCD and IBM agree as follows:


1.  ALLIANCE MANAGERS

    1.1  ALLIANCE MANAGERS'S RESPONSIBILITIES:

         The Alliance Managers will act as overall coordinators for the parties
         under this Alliance Agreement.  Contacts with a party regarding issues
         relating to the terms of, or performance under, this Alliance
         Agreement, shall be made first with the Alliance Manager for that
         party.  Either party may change the names and

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addressees set forth above upon notice to the other party in accordance with the
terms hereof.

    1.2  NCD ALLIANCE MANAGER:

         Lorraine Hariton
         Network Computing Devices, Inc.
         350 North Bernardo Avenue
         Mountain View, CA 94043-4207

         TELEPHONE: (415) 694-0650
         TELEFAX:   (415) 961-6289

    1.3  IBM ALLIANCE MANAGER:

         Dean Hegrenes
         International Business Machines Corporation
         3605 Highway 52 North
         Rochester, MN 55901-7829

         TELEPHONE:  (507) 253-3530
         TELEFAX:  (507) 253-8684

    1.4  AUTHORITY TO COMMIT EXPENDITURES

         Each party understands and agrees that only certain persons are
         authorized on behalf of the other party to make commitments requiring
         the expenditure of money.  With respect to IBM, only IBM procurement
         employees are authorized to make such commitments, and will do so only
         in writing.  To obtain such commitment, NCD shall first contact the
         IBM Alliance Manager, who will be responsible for obtaining the
         written approval of the appropriate procurement employee.  In the case
         of NCD, only the Alliance Manager is authorized to make such
         commitments, and will do so only in writing.  The parties agree that
         they will take no actions in reliance upon any commitments requiring
         the expenditure of money, other than those explicitly described in
         this Alliance Agreement, without the express written authorization of
         the persons identified in this section as having the authorization to
         make such commitments.



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2.  ALLIANCE AGREEMENT STRUCTURE

    The Alliance Agreement (hereinafter "Alliance Agreement" or "Agreement")
    consists of this Base Agreement, which sets forth the basic terms and
    conditions of the Alliance Agreement, its Appendices, and one or more
    Articles, each of which may include attachments.  Unless otherwise
    specified, references in the Alliance Agreement to the Base Agreement shall
    include any of its Appendices, and references to Articles shall include
    their attachments.

    The terms and conditions of this Base Agreement, including the definitions,
    will apply to each Article, unless otherwise specified in the Article.  An
    Article may include additional terms and conditions that supersede terms
    and conditions of this Base Agreement for the purpose of that Article only.

    Except as otherwise specified in this Alliance Agreement, a reference to a
    section of this Alliance Agreement shall incorporate all subsections
    thereunder.

    Each party shall perform its respective tasks and obligations as set forth
    in this Base Agreement and in each Article.


3.  DEFINITIONS

    Capitalized terms in the Alliance Agreement have the following meanings.
    Unless otherwise specified in an Article, the definitions listed below
    apply to this Base Agreement and to all Articles.

    "APPEARANCE DESIGN" is the appearance presented by an object, formed in
    hardware or by software, that creates a visual impact or impression on an
    observer.  "Appearance Design" refers to the ornamental and not the
    functional aspects of the object.

    "CHANGE OF CONTROL" shall be deemed to have occurred if:

         (a)  any person or group (within the meaning of Rule 13d-5 under the
              Securities Exchange Act of 1934 as in effect on the date hereof)
              other than the party, or a Subsidiary of the party, shall become
              the owner, directly or indirectly, beneficially or of record, of
              voting securities representing in excess of fifty percent (50%)
              of the total voting power of the party, or

         (b)  any person, or group of persons acting in concert, shall
              otherwise directly or indirectly acquire control of the party.



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    "CODE" shall mean computer programming code and shall include both Object
    Code and Source Code.

         "OBJECT CODE" shall mean Code, substantially or entirely in binary
         form, which is intended to be directly executable by a computer after
         suitable processing but without the intervening steps of compilation
         or assembly.

         "SOURCE CODE" shall mean Code, other than Object Code, and related
         source code level system documentation, comments and procedural code,
         such as job control language, which may be printed out or displayed in
         human readable form.

    "DELIVERABLES" shall mean Materials and other materials provided to or
    prepared for IBM by NCD pursuant to this Alliance Agreement. Unless
    otherwise provided in an Article, Deliverables shall also include, in
    addition to any Code, Documentation, or materials specifically identified
    as Deliverables, any other code and documentation not listed in anArticle,
    but which implements or conforms to the description of Deliverables in
    Articles.

    "DERIVATIVE WORK" shall mean a work which is based upon one or more
    preexisting works, such as a revision, enhancement, modification,
    translation, abridgement, condensation, expansion, or any other form in
    which such preexisting works may be recast, transformed, or adapted, and
    which, if prepared without authorization of the owner of the copyright in
    such preexisting work, would constitute a copyright infringement.  For
    purposes hereof, a Derivative Work shall also include any compilation that
    incorporates such a preexisting work.

    "DESIGN VERIFICATION TEST (DVT)" shall mean a test of Product and
    Deliverables  conducted in NCD's engineering organization which will
    satisfy the requirements as defined in the Product Development Plan.  This
    test does a complete and final verification of Product function, quality,
    performance, serviceability, conformance to IBM and industry standards and
    compliance to the specifications and drawings.

    "DEVELOPMENT ENVIRONMENT" shall mean any Code, Documentation, device,
    programming, media, and other materials, including compilers, workbenches,
    tools, and higher-level or proprietary languages, used by NCD or necessary
    for the development, maintenance and implementation of Deliverables.

    "DISTRIBUTORS" shall mean those entities generally utilized for the
    distribution of a party's  products including, by way of illustration and
    not limitation, that party and/or its Subsidiaries and its and their
    subsidiaries, dealers, distributors and agents.

    "DOCUMENTATION" shall mean user manuals and other written works that relate
    to particular Code and hardware design, including works useful for design
    (for example,


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                                                     BASE AGREEMENT-PAGE 5 OF 24


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    specifications, logic manuals, flow charts, and principles of operation),
    and machine-readable text or graphic files subject to display or printout.

    "ENHANCEMENT" shall mean a change or addition to a Deliverable to change or
    improve its form, fit, function, or performance.  Enhancements are in
    addition to the Deliverables described in Article 1-Development and to any
    changes or improvements performed within the scope of the Phase 1 and Phase
    2 development tasks described in Article 1-Development.

         "CUSTOM ENHANCEMENTS" shall mean any Enhancements (a) that are useful
         only with or as part of an IBM Workstation Product, or (b) that the
         parties agree in writing (pursuant to the terms set forth in an
         Article) shall be developed or made by NCD for an IBM Workstation
         Product.

         "MAJOR ENHANCEMENTS" shall mean any Enhancements, other than Custom
         Enhancements, that:

         (a)  provide substantial additional value and utility, and

         (b)  that result in works for which NCD charges its customers an
              additional payment in the form of (i) an upgrade fee for
              customers then currently using the applicable NCD product; or
              (ii) a license fee for a customer acquiring the latest version of
              the applicable NCD product containing such Enhancement.

         "BASIC ENHANCEMENTS" shall mean any Enhancements that are not Major
         Enhancements or Custom Enhancements.

    "ENGINEERING VERIFICATION TEST" (EVT) shall mean a preliminary test of a
    Product or Deliverable to verify function, quality, performance,
    serviceability, conformance to IBM and industry standards, and compliance
    with the functional specifications and drawings.

    "IBM MATERIALS" shall mean Original Deliverables that are either (1)
    specifically identified as IBM Materials in an Article, or (2)  useful only
    with or as part of an IBM Workstation Product.

    "IBM WORKSTATION PRODUCT" shall mean any product, device, computer
    programming code or other thing that interoperates with or utilizes for the
    transfer of data, any one or more of the following: 3270 data stream, 5250
    data stream, coax attachment, or twinax attachment.  "IBM Workstation
    Product" includes, but is not limited to, Product as defined herein.



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    "INVENTION" shall mean any idea, design, Appearance Design, concept,
    technique, invention, discovery, or improvement, whether or not patentable,
    that is conceived or reduced to practice in either party's performance or
    activities under this Alliance Agreement.

    "JOINT INVENTION" is an Invention made by NCD Personnel and IBM Personnel
    jointly, within the meaning of United States Code, chapter 35, section 116.

    "LICENSED WORKS" shall mean Deliverables that are not IBM Materials.

    "MAINTENANCE MODIFICATIONS" shall mean any modifications or revisions,
    other than Enhancements, to Code or Documentation that correct any defects
    or provide any incidental corrections in such Code or Documentation.

    "MANUFACTURING VERIFICATION TEST" (MVT) shall mean a series of tests
    conducted to verify the ability of the manufacturing process and related
    procedures to consistently produce in a production environment and at the
    required quality level of a Product  in quantities representative of a
    program's volumes.

    "MATERIALS" shall mean Code, Documentation, and the Development
    Environment.

    "MORAL RIGHTS" shall mean any personal rights that an author may have under
    applicable law which are separate and apart from the proprietary aspect of
    copyright, including, but not limited to, rights to identification of
    authorship, rights of approval on modifications or limitation on subsequent
    modification, and rights to withdraw a work from distribution.

    "ORIGINAL DELIVERABLES" shall mean Deliverables other than Preexisting
    Materials.

    "PERSONNEL" are a party's employees or subcontractors working under the
    Alliance Agreement.

    "PREEXISTING MATERIALS" shall mean any Materials that exist prior to the
    effective date of this Alliance Agreement, or that have been or will be
    licensed or otherwise acquired by NCD or developed by NCD outside the scope
    of this Alliance Agreement.

    "PRODUCT"  shall mean a terminal  comprised of  electronic circuitry
    components, subassemblies, and Code which allows an individual user to
    connect to a computer server  for the purpose of downloading, inputting,
    receiving, and processing data from the server, and which operates using
    NCD's NCDware Code or Derivative Works thereof.

    "PRODUCT DEVELOPMENT PLAN" shall mean a plan for how the project will be
    managed which will include, but not be limited to, major activities, labor,
    schedules, and checkpoints.


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    "PROTOTYPE UNIT" shall mean a product having the following minimum
    characteristics.

         *    Partial function
         *    Limited error recovery
         *    Limited initialization tests

    "RAISE" shall mean a test of a Product or Deliverable conducted in IBM's
    engineering and system tests organization which will satisfy the
    requirements as defined in the Product Development Plan.  This test does a
    complete and final verification of Product and Deliverable function,
    quality, performance, serviceability, conformance to IBM and industry
    standards and compliance with functional specifications and drawings.

    "SUBSIDIARY" of a party means:

         a)  a corporation, company or other entity more than fifty percent
         (50%) of whose outstanding shares or securities representing the right
         to vote for the election of directors or other managing authority are
         now or hereafter owned or controlled, directly or indirectly, by that
         party, or

         b)  a corporation, company or other entity that does not have
         outstanding shares or securities, as may be the case in a partnership,
         joint venture or unincorporated association, if more than fifty
         percent (50%) of the ownership interest representing the right to make
         decisions for such corporation, company, or other entity is now or
         hereafter owned or controlled, directly or indirectly by that party,
         or

         c)  in the case of an "S" corporation under the Internal Revenue Code
         of 1986, as amended, a Subsidiary shall include any entity controlled
         directly or indirectly by an individual owning or holding fifty
         percent (50%) or more of such "S" corporation's outstanding shares or
         securities. .

    Any such corporation, company, or other entity shall be deemed to be a
    Subsidiary only so long as such ownership or controls exists.

    "THIRD PARTY MATERIALS" shall mean Preexisting Materials in which third
    parties have rights.

    "GENERAL AVAILABILITY (GA)"  shall mean the date at which IBM first ships
    production versions of  Products developed pursuant to this Alliance
    Agreement in commercial quantities to customers who have ordered such
    Products through IBM's standard ordering processes.  GA shall not be deemed
    to have occurred upon IBM's shipment of Products to customers or other
    third parties for use in development evaluation and testing and early
    shipment programs.


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    "INITIAL DESIGN FREEZE DATE" shall mean the agreed-upon date identified in
    Article 1-Development in which the there shall be no additional
    modifications to a the design of a particular Product prior to manufacture.

    "BILLS OF MATERIAL" OR "B/M" shall mean a list of mechanical and/or
    electrical parts, to the individual component level, needed to assemble a
    Product or FRUs.

    "FIELD REPLACEMENT UNIT" (FRU) shall mean an assembly that is replaced in
    its entirety if one of its components fails.

    "WORK AUTHORIZATIONS" (WAs) shall mean written or electronic purchase
    orders or other electronic transactions that are expressly identified as an
    authorization to perform work under Article 2-Manufacturing.

    "TOOLING" shall mean all the required tools and/or equipment that are
    unique to producing a Product.

    "SIX SIGMA QUALITY LEVEL" shall mean a proven, statistical approach that
    can achieve a zero defect process and a zero defect Product.  It is a level
    of product quality achievement equivalent to 3.4 defects per million parts
    (PPM).

    "STATISTICAL PROCESS CONTROL" (SPC) shall mean the use of certain
    statistical techniques to analyse a manufacturing process in order to take
    appropriate actions to achieve and maintain a statistically controlled
    process and to improve the process capability of producing of parts with a
    Six Sigma Quality Level.

4.  PAYMENT

    NCD will invoice IBM, and IBM will pay NCD,  according to the terms set
    forth in one or more Articles.  All payments will be made in U.S. dollars.
    NCD will be responsible for applicable taxes, expenses, and payments to
    third parties that NCD owes unless specified otherwise in an Article.

5.  COPYRIGHTS

    5.1  GRANT OF LICENSE TO LICENSED WORKS

         Subject to the conditions and limitations set forth in sections 5.1.1
         and 5.1.2 of this Base Agreement, NCD grants IBM a  worldwide,
         copyright license to use, execute, reproduce, display, perform,
         transfer, market, distribute, and to make Derivative Works of, the
         Licensed Works (including audio and visual work

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         contained in or generated by such Licensed Works) for use in
         conjunction with Products. NCD grants IBM the right to authorize
         others to do any of the above, except that Derivative Works may be
         prepared only by IBM, its Subsidiaries, and vendors and subcontractors
         performing work for IBM and its Subsidiaries.  Sublicenses to the
         Licensed Works granted by IBM to third parties shall contain terms
         consistent with IBM's standard practices for licensing or distributing
         IBM's own goods and services.

         IBM's license to Licensed Work that consists of Documentation shall be
         fully paid up upon the effective date of this Alliance Agreement.
         IBM's license to Licensed Work that consists of Code, other than Code
         contained only in Development Environment, shall be subject to a
         royalty as specified in Article 2 - Manufacturing, or in one or more
         other Articles.

         IBM's license rights granted in this section 5.1 shall be revocable by
         NCD only if IBM terminates the Alliance Agreement without cause prior
         to the date that IBM's minimum order quantity obligation takes effect
         pursuant to section 4.3 of Article 2-Manufacturing.  Otherwise, the
         licenses granted hereunder shall be irrevocable notwithstanding
         termination or expiration of the Alliance Agreement.

         5.1.1     LICENSE TO IBM WORKSTATION PRODUCTS

                   IBM's license to transfer, market, distribute and sublicense
                   those Licensed Works that are Original Deliverables shall be
                   exclusive in the field of use with IBM Workstation Products.
                   The other rights granted in section 5.1 shall be
                   nonexclusive.

                   Without limiting other Materials that are considered
                   Preexisting Materials under the terms of this Alliance
                   Agreement, the parties specifically acknowledge that NCD's
                   existing 3270 local client is considered a Preexisting
                   Material.

         5.1.2     LICENSE TO SOURCE CODE OF LICENSED WORKS

                   IBM's license to the Source Code of Licensed Works is for
                   IBM's internal use only. IBM shall not display, perform,
                   transfer, market, distribute or sublicense, and shall not
                   authorize others to make Derivative Works of, the Source
                   Code of Licensed Works, except that IBM may display,
                   perform, distribute, sublicense, and allow its vendors and
                   contractors  to prepare Derivative Works of,  the Source
                   Code solely for the purpose of allowing such vendors and
                   subcontractors to provide services for IBM relating to such
                   Source Code, including but not limited to development and
                   support of Code. Where IBM utilizes such subcontractors and
                   vendors, IBM shall

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                   have written agreements with such subcontractors and vendors
                   sufficient to require them to comply with the licensing
                   provisions herein and to treat the Source Code in accordance
                   with AECI No. M96-2424.  IBM shall obtain NCD's approval
                   prior to allowing such Source Code to be used off IBM's
                   premises by such subcontractor or vendor, and NCD will not
                   unreasonably withhold such approval.

    5.2  GRANT OF LICENSE TO DEVELOPMENT ENVIRONMENT

         Except for Development Environment IBM provides NCD, within fifteen
         (15) days after the effective date of any Article or attachment
         thereto describing Deliverables having associated Development
         Environment, NCD will deliver to IBM a written list of all such
         Development Environment.  NCD will deliver the listed Development
         Environment that are not commercially available concurrent with
         delivery of the associated Deliverables.  NCD will update such written
         list for all changes to such Development Environment and promptly
         deliver updated Development Environment that are not commercially
         available.

         NCD grants IBM a nonexclusive, worldwide, copyright  license to use,
         execute, reproduce, display and perform, and to make or have made
         Derivative Works of, all Development Environment (including audio or
         visual works contained in or generated by such Development
         Environment), except insofar as NCD's authority to grant such license
         is restricted or limited by one or more third party agreements for
         Third Party Materials contained within the Development Environment
         and where NCD discloses to IBM such restrictions or limitations within
         15 days after the effective date of this Alliance Agreement. If IBM
         determines that any such disclosed agreements with third parties
         significantly effect IBM's rights to use the Development Environment
         for its intended purpose under this Alliance Agreement, IBM shall
         notify NCD and NCD shall promptly and diligently take steps to
         negotiate with such third parties for rights acceptable to IBM for the
         use of such Third Party Materials in the Development Environment.

         IBM's license rights granted in this section 5.2 shall be revocable by
         NCD only if IBM terminates the Alliance Agreement without cause prior
         to the date that IBM's minimum order quantity obligation takes effect
         pursuant to section 4.3 of Article 2-Manufacturing. Otherwise, the
         licenses granted hereunder shall be irrevocable notwithstanding
         termination.

    5.3  USE OF PREEXISTING MATERIALS IN DELIVERABLES

         Unless IBM and NCD agree otherwise in writing with respect to certain
         specified Preexisting Materials, NCD may include Preexisting Materials
         in Deliverables only if such materials (1)  are owned by NCD, or (2)
         are licensable by NCD to IBM, its

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         Distributors and their customers under the terms of this Alliance
         Agreement with no additional restrictions or requirements.  Within
         fifteen (15) days after the effective date of any Article or
         attachment thereto describing Deliverables that will contain Third
         Party Materials, NCD shall deliver to IBM a written list of such Third
         Party Materials and shall provide IBM with copies of all license
         agreements relating to such Third Party Materials.  All Preexisting
         Materials in Deliverables are deemed Licensed Works.

    5.4  REGISTRATION OF LICENSED WORKS

         NCD is responsible for copyright registration, maintenance and
         enforcement of all Licensed Works.  NCD authorizes IBM to act as its
         agent in the copyright registration of the Licensed Works. In the
         event IBM uses such authority to register a copyright on behalf of
         NCD, IBM will promptly notify NCD of such registration. This section
         does not authorize IBM to act as NCD's agent for any other purpose.

    5.5  RIGHTS IN IBM MATERIALS AND CUSTOM ENHANCEMENTS

         All IBM Materials and Custom Enhancements shall be owned exclusively
         by IBM and shall be deemed works made for hire.  To the extent any IBM
         Materials or Custom Enhancements may not, by operation of law, be
         deemed works made for hire, NCD hereby assigns to IBM ownership of
         copyright in such items.  IBM shall have the right to obtain and hold
         in its own name copyrights, registrations, and similar protection
         which may be available in such IBM Materials and Custom Enhancements.
         NCD agrees to give IBM or its designees all assistance required to
         perfect such rights, including the execution of any necessary
         documents.

    5.6  CERTIFICATE OF ORIGINALITY

         Within sixty (60) days after the effective date of any Article or
         attachment thereto, and at such other times as IBM may reasonably
         request, NCD shall deliver to IBM a Certificate of Originality with
         respect to any Preexisting Materials to be included in the
         Deliverables listed in such Article, substantially in the form set
         forth in "Appendix A - Sample Certificate of Originality."  Upon
         delivery of Deliverables to IBM, NCD shall submit an additional
         Certificate of Originality for such Deliverables.

    5.7  MORAL RIGHTS

         NCD shall obtain a written agreement to waive and not to assert any
         Moral Rights, including any right to identification of authorship,
         rights of approval on modifications or limitation on subsequent
         modification, from any person or entity

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         having Moral Rights with respect to any Deliverables hereunder.  NCD
         hereby waives and agrees not to assert any Moral Rights, including any
         right to identification of authorship, rights of approval on
         modifications or limitation on subsequent modification, NCD has or may
         have in Deliverables.

    5.8  TREATMENT OF THIRD PARTY MATERIALS

         In rendering performance pursuant to this Alliance Agreement, NCD
         shall comply at all times with all restrictions and covenants
         applicable to Third Party Materials.  NCD shall bear the
         responsibility and expense of negotiating and obtaining any rights in
         Third Party Materials necessary to fulfill its obligations under this
         Alliance Agreement.  Except as mutually agreed in writing by the
         parties, NCD shall have sole responsibility for payment of all
         royalties and other charges with respect to Third Party Materials,
         including royalties, charges, and payments for the licenses granted in
         section 5.1.  If IBM is not satisfied that NCD has sufficient rights
         with respect to any such Third Party Materials or that NCD has assumed
         and discharged its responsibility for related royalties and other
         charges, IBM may, at its election and without limiting its other
         rights, suspend further action or payment or both upon notifying NCD
         of the problem.  Such suspension shall end when the problem is
         remedied.

         Nothing herein shall restrict IBM from dealing directly with any third
         party with respect to such Third Party Materials or  any other product
         or service.  Provided, however, that if IBM continues to distribute
         the Third Party Materials after any third party claim for royalties or
         other charges has been raised and such matter has not been resolved
         within 30 days after IBM notifies NCD of such claim, IBM may either
         (i) place any payment due NCD under this Article in escrow pending
         resolution of said third party claim, or (ii) pay NCD all amounts due
         hereunder, less deductions for (a) any royalty payments made by IBM to
         such described third parties which are NCD's responsibility hereunder
         but which NCD has not paid and (b) IBM's reasonable, documented
         administrative costs in connection with making such royalty payments
         which are otherwise NCD's responsibility.

    5.9  CONFIRMATION

         Promptly upon request by IBM, NCD agrees to confirm IBM's rights in
         Deliverables identified by IBM by execution and delivery of a written
         confirmation in such form as IBM may reasonably require.



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6.  PATENTS AND INVENTIONS

    6.1  PATENT LICENSE

         NCD hereby grants to IBM and its Subsidiaries, sublicensees and
         customers, direct and indirect, a royalty free, worldwide,
         irrevocable, nonexclusive license under any patent or patent
         applications owned or licensable by NCD during the term of this
         Alliance Agreement to make, have made, use, have used, lease, sell,
         and/or otherwise transfer Deliverables, including Derivative Works
         thereof, and to practice or have practiced any process or method
         involving the use of any Deliverable.

    6.2  RIGHTS IN INVENTIONS

         Each party shall own Inventions made by its own Personnel, except for
         Joint Inventions and Inventions relating to Appearance Designs.

         6.2.1     INVENTIONS SOLELY BY  EITHER PARTY'S PERSONNEL

                   Each party will disclose in writing to the other at least
                   quarterly during the term of the Alliance Agreement each
                   Invention made solely by its Personnel together with an
                   explanation of why the disclosing party believes it to be an
                   Invention.  NCD will identify all countries in which it will
                   seek patent protection for each Invention.  NCD authorizes
                   IBM to act as its agent in obtaining patent protection for
                   the Invention in countries where NCD does not seek patent
                   protection, and IBM will promptly notify NCD in writing upon
                   the filing of any patent application.  NCD grants to IBM an
                   irrevocable, nonexclusive, worldwide, paid-up license under
                   these Inventions and patents issuing on and patent
                   applications filed on these Inventions, to make, have made,
                   use, have used, sell, license or transfer items and to
                   practice and have practiced methods, all in conjunction with
                   Products.

         6.2.2     JOINT INVENTIONS

                   Both parties will jointly own all Joint Inventions and
                   resulting patents.  Either party may license others under
                   Joint Inventions and patent applications filed on, or
                   patents issuing from, them without consent from or
                   accounting to the other.

                   When both parties equally share the costs associated with
                   seeking patent protection, IBM will prepare the patent
                   application, unless agreed to otherwise.  IBM will advise
                   NCD of the status of the application, and the

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                   parties will work together to complete such application.  If
                   either party decides not to equally share the costs of
                   seeking or maintaining patent protection in a Joint
                   Invention, the other party may do so at its own expense.
                   The paying party will control the obtaining of, and
                   maintenance of, such patents.  The non-paying party will
                   provide reasonable assistance and have required documents
                   signed at the request and expense of the paying party.

         6.2.3     APPEARANCE DESIGNS

                   Unless agreed otherwise in writing, NCD assigns to IBM all
                   Inventions, and patents issuing on them, relating to an
                   Appearance Design of a Product.  NCD will, at IBM's expense,
                   assist in the filing of patent applications on these
                   Inventions and have required documents signed.

         6.2.4     NO OTHER PATENT LICENSES

                   Except as expressly granted in this Alliance Agreement,
                   neither party grants the other party any rights in any
                   patents or patent applications.

7.  TERM AND TERMINATION

    The initial term of this Alliance Agreement shall begin on the effective
    date and end on December 31, 1998 (the "Initial Term").  Termination or
    expiration of the Alliance Agreements shall terminate all Articles except
    to the extent that an Article expressly states otherwise.  This Base
    Agreement will remain in effect for any Article or part thereof that
    remains in effect after termination or expiration of the Alliance Agreement
    until that Article fully expires or is terminated.

    7.1  IBM'S RIGHT OF RENEWAL

         IBM shall have the right to renew this Alliance Agreement through
         December 31, 2000, by providing NCD with notice of renewal no later
         than March 1, 1998.  Except as otherwise specified in one or more
         Articles or negotiated and agreed to in writing by the parties, all
         terms and conditions of this Alliance Agreement, including
         definitions, shall continue to apply throughout such renewal term.

    7.2  IBM'S OBLIGATION TO RENEW CERTAIN ARTICLES

         Any obligation of IBM to renew any Article of this Alliance Agreement
         beyond the Initial Term shall be specified in the Article to which
         such obligation applies.


--------------------------------------------------------------------------------
                                                    BASE AGREEMENT-PAGE 15 OF 24


<PAGE>

    7.3  IBM'S RIGHT TO TERMINATE WITHOUT CAUSE

         IBM shall have the right to terminate this Alliance Agreement without
         cause at any time by providing NCD with sixty (60) days written
         notice.   IBM's obligations, upon termination, if any, may be included
         in one or more Articles.

    7.4  TERMINATION FOR CAUSE

         Either party may terminate this Alliance Agreement for cause, without
         any liability or obligation to compensate the other, in the event
         that:

              the other party materially breaches the Alliance Agreement, and
              such breach is not cured within 60 days after the notice of
              termination is received; or

              the other party becomes insolvent, files or has filed against it
              a petition in bankruptcy, or undergoes a reorganization pursuant
              to a petition in bankruptcy filed with respect to it; or

              the other party is dissolved or liquidated or has a petition for
              dissolution or liquidation filed with respect to it; or

              the other party ceases ongoing business operations; or

              the other party enters into any voluntary or involuntary
              receivership, or upon the appointment of a receiver by a court;
              or

              there is a Change of Control of the other party.

         Termination for any of the above causes shall take effect immediately
         upon notice from the terminating party, except that (1) termination
         for breach shall be effective sixty (60) days after the notice of
         termination describing the breach is received and shall not take
         effect if the breach is cured prior to such effective date, and (2)
         termination solely for involuntary bankruptcy shall take effect 60
         days after the service of the involuntary bankruptcy petition is
         filed, unless such petition is dismissed within this 60 day period, in
         which case the termination shall not take effect.  In all cases, the
         cause for termination shall be stated in the notice.

    7.5  SURVIVAL OF CERTAIN PROVISIONS AFTER TERMINATION

         The following provisions of this Base Agreement shall survive beyond
         expiration or termination of this Alliance Agreement: Section 5
         (excluding 5.6), Section 6, Section 8, Section 9, Section 10, Section
         11, Section 12 (to the extent specified

--------------------------------------------------------------------------------
                                                    BASE AGREEMENT-PAGE 16 OF 24


<PAGE>

         therein), Section 13 (excluding 13.12),  and all applicable definitions
         of this Base Agreement, shall survive such expiration or termination.
         In addition, terms in Articles may survive termination or expiration to
         the extent specified in such Article.

8.  CONFIDENTIALITY

    The treatment of either party's confidential information will be governed
    by AECI No. M96-2424 and all supplements thereto.

9.  MARKETING DISCRETION

    Except where marketing rights are expressly restricted in this Alliance
    Agreement, the parties shall retain full freedom and flexibility concerning
    the marketing of their products, including the decision whether to market
    or discontinue marketing of products, and the decision of what level of
    marketing effort to be undertaken.  Neither party undertakes any obligation
    to announce or market any products.  Nothing in this Alliance Agreement
    shall be construed as creating any obligation of "best efforts" or other
    level of marketing effort.

10. INDEMNIFICATION

    NCD, at its own expense, will settle or defend, and will pay any damages,
    costs, attorneys' fees or fines as may be assessed by a court of competent
    jurisdiction with respect to all proceedings, threats of proceedings, or
    claims against IBM, its Distributors and their respective customers, for
    the infringement or alleged infringement by Products or Deliverables
    furnished under this Alliance Agreement or any part or use thereof, of
    patents (including utility models and registered designs), mask work
    rights, trade secrets, or copyrights in the following countries: the United
    States of America, member states of the European Community, Japan, Canada,
    and any other country where NCD, its Subsidiaries, Distributors or
    affiliates, heretofore have furnished similar goods in substantial
    quantities or have directly conducted their business with respect to NCD
    products.  IBM shall provide prompt notice to NCD of any such proceeding or
    claim of which it becomes aware and at NCD's expense, shall provide
    information and assistance that NCD may request in connection with the
    defense and settlement of any such proceeding or claim.

    NCD shall not have any liability hereunder for infringement or alleged
    infringement resulting  solely from (i) required compliance by NCD with
    engineering drawings or manufacturing instructions or specifications
    originating with or furnished by IBM (ii) alteration of Products or
    Deliverables by persons other than NCD, or (iii) use of the


--------------------------------------------------------------------------------
                                                    BASE AGREEMENT-PAGE 17 OF 24


<PAGE>

    Products or Deliverables in combination with goods or services not provided
    by NCD unless the Products or Deliverables contributorily infringe.

    Each party will promptly notify the other in writing if it becomes aware of
    any patent, copyright, trade secret, mask work right, or other right of a
    third party which the Products or Deliverables furnished under this
    Alliance Agreement may infringe or violate.

    The indemnification provisions herein shall in no way limit or restrict
    either party's right to indemnity, contribution, or other remedies
    availables against the other as provided by statute or common law.

11. DISPUTE RESOLUTION

    Each party will promptly notify the other party's Alliance Manager of any
    dispute with the other party under or regarding this Alliance Agreement,
    and will further promptly notify the other party's respective Article
    Coordinator of any dispute with the other party under or regarding an
    Article of this Alliance Agreement.  The parties will negotiate in good
    faith to resolve any dispute between them regarding this Alliance
    Agreement.  If the dispute cannot be settled by the Article Coordinators
    and/or  the Alliance Managers, both parties agree to engage their
    executives in an attempt to resolve the matter before bringing action in a
    court of law.

    Except for actions brought to enforce the provisions involving intellectual
    property rights and indemnification, no actions, regardless of form,
    arising out of or in connection with performance or transactions covered by
    this Alliance Agreement may be brought by either party more than two (2)
    years after the cause of action has accrued.  The running of this period is
    not tolled during the time, if any, the parties are engaged in any effort
    to resolve any dispute, unless the parties specifically agree in writing to
    toll such period.

12. INSURANCE

    NCD will maintain Commercial General Liability insurance at its own expense
    with minimal coverage for two years following expiration or termination of
    the Alliance Agreement in the amount of $1,000,000, with an aggregate
    liability of $10,000,000 per event.  This coverage includes:

    (a)  "Contractual Liability" NCD responsible for under the Alliance
         Agreement, and

    (b)  "Products and Completed Operations."


--------------------------------------------------------------------------------
                                                    BASE AGREEMENT-PAGE 18 OF 24


<PAGE>

    NCD remains liable for any damages, including but not limited to damages in
    amounts above the stated minimal coverage of this section.

    The insurance will provide that the insurer notify IBM at least 30 days
    before any non-renewal, cancellation or other material change in your
    coverage.  NCD will name IBM as an additional insured.  NCD will provide
    IBM with a certificate of insurance as proof of this minimal coverage on
    request.


13. GENERAL

    13.1 INDEPENDENT CONTRACTOR

         IBM and NCD each represent and warrant to the other that its efforts
         in relation to this Alliance Agreement shall be as an independent
         contractor.  Nothing contained in this Alliance Agreement shall
         constitute the parties as entering upon a joint venture or
         partnership, or shall constitute either party the agent for the other
         party, or be construed as creating the relationship of employer and
         employee, master and servant, or any similar relationship for any
         purpose or any sense whatsoever.  NCD and IBM and their employees
         shall have no authority to bind or make commitments on behalf of the
         other party for any purpose and shall not hold itself or themselves
         out as having such authority.  Each party shall have sole
         responsibility for the supervision, daily direction and control,
         payment of salary (including withholding of income taxes and social
         security), worker's compensation benefits, and the like of its
         personnel.

    13.2 FREEDOM OF ACTIVITY

         Except as explicitly stated in this Alliance Agreement with regard to
         license or confidentiality restrictions, this Alliance Agreement shall
         not prevent either party from entering into any agreement with any
         third party or developing, manufacturing and/or selling any product or
         service even if it competes with the other party's products or
         services, or any product developed under this Alliance Agreement.

    13.3 FORCE MAJEURE

         Neither IBM nor NCD shall be in default or liable for any delay or
         failure of compliance with this Alliance Agreement due to an act of
         nature, public enemy, government action, or freight embargo beyond the
         control of the defaulting party and the defaulting party shall provide
         the nondefaulting party immediate notice of any such anticipated delay
         or failure of compliance; provided, however, that any such act shall
         not relieve the defaulting party's obligations hereunder and such

--------------------------------------------------------------------------------
                                                    BASE AGREEMENT-PAGE 19 OF 24


<PAGE>

         party hereby agrees to perform its obligations as soon as practicable
         after the conditions causing such delay or failure have subsided.

    13.4 LAWS

         Each party shall, at it's own expense, comply with applicable
         governmental laws, statutes, ordinances, administrative orders, rules
         or regulations relating to its duties under this Alliance Agreement
         and shall procure all licenses and pay all fees and other charges
         required thereby.

         To the extent applicable, each party will comply with Executive Order
         11246 of the President of the United States on Equal Employment
         Opportunity and the Occupational Safety and Health Act of 1970.

    13.5 NOTICES

         All notices to a party under this Alliance Agreement shall be
         delivered to that party's Alliance Manager at the address stated in
         this Base Agreement.  All notices to a party under an Article shall be
         delivered to that party's Article Coordinator at the address specified
         in the Article.

         All notices required or permitted to be given under this Alliance
         Agreement or under an Article shall be in writing.

    13.6 NO OTHER LICENSES

         No licenses shall be implied by this Alliance Agreement other than
         those specifically set forth herein.

    13.7 PUBLICITY

         Except as required by law, NCD will not, without IBM's prior approval,
         with such approval not to be unreasonably withheld, issue press
         releases or other publicity regarding the Alliance Agreement or the
         parties relationship to it.

         If the joint activities of the parties or general terms and conditions
         of this Alliance Agreement are to be publicly announced by mutual
         agreement by the parties, procedures and restrictions for disclosure
         will be jointly agreed to in writing prior to any disclosure.



--------------------------------------------------------------------------------
                                                    BASE AGREEMENT-PAGE 20 OF 24


<PAGE>

    13.8 SEVERABILITY

         If any provision of this Alliance Agreement is for any reason found to
         be ineffective,  unenforceable or illegal, such condition shall not
         affect the validity or enforceability of any of the remaining portions
         thereof.  The parties shall negotiate in good faith to replace any
         ineffective, unenforceable or illegal provision with an effective
         replacement as soon as is practical.

     13.9 SUBSIDIARIES

         Except as explicitly stated otherwise in this Alliance Agreement, the
         rights and licenses granted under this Alliance Agreement shall apply
         to a party's Subsidiaries so long as such Subsidiaries agree to comply
         fully with the obligations imposed on that party.  Each party shall
         remain fully responsible for actions and omissions of its Subsidiaries
         relative to rights granted under this Section.

    13.10 TAXES

         Each party shall be responsible for the payment of any taxes and
         duties imposed on such party arising out of its performance hereunder.
         Without limiting the foregoing, the parties specifically agree that
         IBM shall be responsible for all taxes and duties associated with its
         distribution of Products to its customers.

    13.11 TRADEMARK USAGE

         Nothing in this Alliance Agreement shall imply the grant to a party of
         a license to use any trademark or service mark of the other party.
         Such a grant may only be made by explicit statement in this Alliance
         Agreement.

    13.12 TRANSFER OR ASSIGNMENT

         Neither party may transfer, assign, or sell any right or obligation
         under this Alliance Agreement, except as expressly provided herein,
         without the prior written consent of the other, except IBM may assign
         its obligations to an IBM Subsidiary upon written notice to NCD.

         NCD may not subcontract any part of the work to be performed under
         this Alliance Agreement without the prior written consent of IBM.
         Purchase of services or components normally purchased by NCD, and use
         of on-site contract Personnel, will not be construed as an assignment
         or subcontract.  The parties agree that IBM's written approval for the
         subcontracting of any part of the work will not relieve NCD of the
         responsibility for subcontractor performance.  IBM will not
         unreasonably withhold its consent.

--------------------------------------------------------------------------------
                                                    BASE AGREEMENT-PAGE 21 OF 24


<PAGE>

         Any act of derogation of the foregoing shall be null and void and may
         be deemed a material breach of this Alliance Agreement.

    13.13 WAIVER

         The waiver of any term, condition, or provision of this Alliance
         Agreement by either party must be in writing.  No such waiver shall be
         construed as a waiver of any other term, condition, or provision
         except as provided in writing, nor as a waiver of any subsequent
         breach of the same term, condition, or provision.

    13.14 WARRANTIES

         The following warranties are in addition to any other warranties
         described in one or more Articles:

         13.14.1   NO CONFLICT

                   Each party represents and warrants that it is under no
                   obligation or restriction, or will it assume any such
                   obligation or restriction, that does or would in any way
                   interfere or conflict with, or that does or would present a
                   conflict of interest concerning each party's performance
                   under this Alliance Agreement or would restrict any of the
                   rights and licenses granted to the other party herein.

         13.14.2   NO INFRINGEMENT

                   NCD represents and warrants that no valid copyright, mask
                   work, or trade secret right of a third party would be
                   infringed by any Deliverables provided to IBM under this
                   Alliance Agreement.  NCD represents and warrants that it has
                   the right and power to enter into and perform under this
                   Alliance Agreement and under the Articles.

         13.14.3   INTERFERING CODE

                   NCD represents and warrants that the  Deliverables do not
                   contain any Code that is intentionally constructed with the
                   purpose of damaging, interfering with or otherwise adversely
                   affecting Code, data files, or hardware without the consent
                   and intent of the computer user.  NCD shall establish and
                   enforce commercially reasonable procedures, which shall be
                   reviewed with IBM at IBM's request, to prevent any such Code
                   from being incorporated by NCD's Personnel into
                   Deliverables and shall promptly notify IBM

--------------------------------------------------------------------------------
                                                    BASE AGREEMENT-PAGE 22 OF 24


<PAGE>

                   of any knowledge or suspicion of NCD's that any such
                   materials have been incorporated in any Deliverables.

         13.14.4   NO IMPLIED WARRANTIES

                   No warranties other than those expressly set forth in this
                   Alliance Agreement (including this Base Agreement and
                   Articles) shall be implied.

    13.15 LIMITATION OF LIABILITY

         Neither party shall be liable to the other for any consequential
         damages, incidental damages, or special damages (including loss
         profits, lost savings, loss of business, or interruption of business)
         even if informed that they may occur. This limitation does not apply
         to liabilities for indemnity to the extent such damages are included
         in settlements and court awards.

    13.16 GOVERNING LAW/FORUM

         This Alliance Agreement and the performance of the parties thereunder
         shall be construed in accordance with and governed by the substantive
         laws of the United States of America and the State of Minnesota which
         pertain to agreements executed in, and fully performed within, the
         State of Minnesota.  Any proceeding to enforce, or to resolve disputes
         arising under or relating to this Alliance Agreement shall be brought
         before a court of competent jurisdiction in the State of Minnesota,
         including a Federal District Court sitting within the State.  The
         parties hereby expressly waive any right to a jury trial and agree
         that any proceedings related to this Alliance Agreement  shall be
         tried by a judge without a jury, regardless of the type or form of the
         action.

    13.17 EXECUTION AND MODIFICATION

         Execution of this Alliance Agreement shall be by signature of an
         authorized representative of each party.  This Alliance Agreement  may
         only be modified in a writing executed by authorized representatives
         of both parties or their designees.

    13.18 ENTIRE AGREEMENT

         This Alliance Agreement along with AECI No. M96-2424 and its
         supplements,  set forth the entire agreement and understanding between
         the parties as to their subject matter and merge all prior discussions
         and agreements between the parties, whether oral or written, related
         to the subject matter of the alliance.

--------------------------------------------------------------------------------
                                                    BASE AGREEMENT-PAGE 23 OF 24


<PAGE>

         Neither party relies on any promises, inducements, representations
         made by the other or expectations of more business dealings except as
         expressly provided in this Alliance Agreement.  The Alliance Agreement
         accurately states our business agreement.



--------------------------------------------------------------------------------
                                                    BASE AGREEMENT-PAGE 24 OF 24


<PAGE>

IN WITNESS WHEREOF, each party has  reviewed this Agreement and each party has
executed this Agreement by signature of its authorized representative.



NETWORK COMMUNICATION DEVICES, INC.         INTERNATIONAL BUSINESS MACHINES
                                            CORPORATION



Signature /s/ Lorraine Hariton              Signature /s/ Bhawnesh C. Mathur
         -------------------------------              -------------------------

Printed Name   Lorraine Hariton             Printed Name   Bhawnesh C.  Mathur
            ----------------------------                 ----------------------

Printed Title V.P. of Strategic Accounts         Printed Title Dir. of
             ---------------------------         Procurement, IBM Server Group
                                                 -----------------------------

Date      6/27/96                                     Date      June 27, 1996
    ------------------------------------                  --------------------



--------------------------------------------------------------------------------
                                                    BASE AGREEMENT-PAGE 25 OF 24


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT

                                     NO. 350-148



                                      ARTICLE 1

                                     DEVELOPMENT


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 1 DEVELOPMENT


This Article 1, effective on the date last signed below, is agreed to by Network
Computing Devices Corporation ("NCD"), a corporation of the State of California,
with offices located at 350 North Bernardo Avenue, Mountain View, California
94043-4207 and International Business Machines Corporation ("IBM"), a
corporation of the State of New York, with offices at 3605 Highway 52 North,
Rochester, Minnesota 55901-7829.

                                       RECITALS

A.  NCD and IBM have entered into an alliance between them in the area of an
    IBM network application terminal ("thin client") Product.

B.  This Article describes, among other things, terms and conditions of
    development and describes Deliverables.

1.  ARTICLE COORDINATORS

    1.1  NCD ARTICLE 1 COORDINATOR:

         Philip R. Graham
         350 North Bernardo Avenue
         Mountain View, CA 94043-4207

         TELEPHONE: (415) 919-2796
         TELEFAX:   (415) 961-6289

    1.2  IBM ARTICLE 1 COORDINATOR:

         Ordean F. Hegrenes
         International Business Machines Corporation
         3605 Highway 52 North
         Rochester, MN 55901-7829

         TELEPHONE:  (507) 253-3530
         TELEFAX:  (507) 253-8684



--------------------------------------------------------------------------------
                                                          ARTICLE 1-PAGE 1 OF 13


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 1 DEVELOPMENT

    1.3  DUTIES OF ARTICLE COORDINATORS

         The Article Coordinators will act as overall coordinators for the
         parties under this Article.  Each party will advise the other in
         writing of any change regarding its Article Coordinator.


2.  GENERAL DESCRIPTION

    This Article sets forth the terms and conditions under which the parties
    will jointly develop a "thin client" terminal Product for IBM, which is
    intended to be positioned as a network computer terminal and as a
    replacement for existing non-programmable type terminals.  This terminal
    Product will contain graphical user interface ("GUI") capabilities,
    download capabilities from  various servers, including AS/400, S/390,
    RS/6000, and PC servers, and shall utilize network computing technologies
    such as web browsers, and JAVA applets.

    The "thin client" terminal Products shall be composed of a logic unit with
    microprocessor, memory, connectivity interface (Token Ring, Ethernet,
    twinax, coax, serial, and others),  power supply, and enclosures.  There
    will be multiple models of the "thin client" Product that will accomodate
    differing using system and customer requirements.  The unit would attach to
    IBM PC Company selected keyboard models, mice, and standard displays of
    VGA/XGA and better.

    The IBM "thin client" terminal Product shall be based on existing and
    enhanced versions of NCD's EXPLORA (WILDCAT) product, and will operate
    using a modified version of NCD's NCDware Code, boot code loaded in
    programmable devices, and certain other NCD software licensed to IBM.  The
    Product will remotely load the Code that provides functionality from the
    server it is logically attached to.  This software would provide a basis
    for emulation of existing devices (e.g. 5250, 3270) as well as extend the
    functionality with web browsers, [    ], and other Code.

    The initial development of the Product shall be comprised of two phases.
    The following is a general description of the Phase 1 and Phase 2 versions
    of the Product and their contemplated availability dates:

         PHASE 1 VERSION (LAN VERSION)

         The Phase I Product will be comprised of the following function:

         *    WILDCAT product enhancement version of the EXPLORA NCD device

--------------------------------------------------------------------------------
                                                          ARTICLE 1-PAGE 2 OF 13

[ ] Confidential Treatment Requested. Omitted Portions Filed Separately with 
    the Securities and Exchange Commission.

<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 1 DEVELOPMENT

         *    [                               ]
         *    [                                          ]
         *    [                                       ]
         *    [
                                      ]
         *    [                                                ]
         *    [                     ]
         *    [                                                        ]
         *    [                                                                ]
         *    [                                                              ]
         *    [                                     ]
         *    [
                      ]
         *    NCDware 4.1 or later version
         *    [            ]
         *    [                       ]
         *    [                                    ]
         *    [
                           ]

         Although the [             ] application is not a Deliverable within
         Phase 1 and Phase 2, compatibility shall be provided with the [  
                  ] application for the the Phase I, Phase II, and follow on
         products.

         It is intended that limited shipments of the Phase 1 version of
         Products to IBM's customers for development evaluation and early ship
         programs, and General Availability of the Phase 1 version of the
         Product, will occur in the fourth calendar quarter of 1996.

         PHASE 2 VERSION OF PRODUCT

         The Phase 2 Product will be comprised of the Phase 1 Product, plus the
         following functional additions to the Product family, including the
         integration of the host programming support into the base operating
         system (AS/400 specifically):

         *    [                                    ]
         *    [                      ]
         *    [                   ]
         *    [                     ]
         *    [
                                ]
         *    [                     ]


--------------------------------------------------------------------------------
                                                          ARTICLE 1-PAGE 3 OF 13

[ ] Confidential Treatment Requested.  Omitted Portions Filed Separately with 
    the Securities and Exchange Commission.


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 1 DEVELOPMENT

         *    [
                              ]
         *    [                       ]
         *    [                                    ]
         *    [                           ]
         *    [                                                  ]

         Although the [             ] application is not a Deliverable under
         Phase 1 and Phase 2, compatibility shall be provided with the [   
                  ] application for the Phase I, Phase II, and follow on
         Products.

         It is intended that General Availability of the Phase 2 version of the
         Product will occur in July of 1997.


3.  NCD'S RESPONSIBILITIES

    NCD shall perform the following tasks and provide IBM with the following
    Deliverables as set forth below:

    3.1  TASKS

         In accordance with this Article, and with IBM's advice and joint
         development, NCD will develop for IBM a cost and performance effective
         Product for use in IBM's server system platform product lines (ie. AS
         / 400, RS/6000, S/390, and PC servers) in accordance with the Phase 1
         and Phase 2 descriptions set forth above and other specifications set
         forth in the Product Development Plan.  Included but not necessarily
         all inclusive, are the following tasks.

         *    Specific joint design, development and testing of the Product
         *    Assist IBM in ensuring that Product design will meet IBM
              Corporate instructions and standards as identified and validated
              by IBM.
         *    [                   ]
         *    [
                                                     ]
         *    Development activities necessary to ensure Bi-Directional
              keyboard support.
         *    Provide support and assistance to IBM for IBM-conducted testing
         *    Conduct unit level Engineering Verification Testing and Design
              Verification Testing and report test results.

--------------------------------------------------------------------------------
                                                          ARTICLE 1-PAGE 4 OF 13

[ ] Confidential Treatment Requested.  Omitted Portions Filed Separately with 
    the Securities and Exchange Commission.


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 1 DEVELOPMENT

         *    NCD shall give IBM the documentation and support necessary to
              obtain necessary agency and government approvals.
         *    Provide Product Engineering support for Product
         *    [


                                                             ]
         *    Conduct compatibility testing to ensure functionality is
              maintained commensurate with changes to the supported network
              computer functions.
         *    Provide support for token ring device driver.
         *    Provide L3 support for early shipment programs.
         *    Provide a local printer support and JAVA local print support.
         *    [                                                   ]
         *    Provide consultation and design support (HW and SW) to IBM
         *    Setup of IBM-owned Sun systems with NCD Development Environment
         *    Education of IBM development personnel on NCDware internals,
              tools, architecture, processes, procedures.
         *    [                                                        ]
         *    [

                                 ]
         *    [
                      ]
         *    Other tasks determined by the parties to be necessary for
              development the Products specified herein according to the
              schedules specified herein or in the Product Development Plan.

    3.2  DELIVERABLES

         NCD shall provide the following Deliverables to IBM:

         3.2.1     CODE

         The following Code shall be provided to IBM.  Unless otherwise
         specified, all Code provided shall be provided in Source Code and
         Object Code forms:

              *    [
                                                          ]
              *    [                       ]
              *    [                                                   ]
              *    [                    ]


--------------------------------------------------------------------------------
                                                          ARTICLE 1-PAGE 5 OF 13

[ ] Confidential Treatment Requested.  Omitted Portions Filed Separately with 
    the Securities and Exchange Commission.

<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 1 DEVELOPMENT

              *    [                                                        ]
              *    [
                   























                                     ]
              *    [


                             ]

              [      ]

              Although NCD's implementation of [     ] is not considered to be a
              Deliverable within the scope of Phase 1 and Phase 2 development
              described above, NCD agrees that upon IBM's request it will make
              good faith efforts to acquire appropriate license rights to allow
              [     ] to be added as a Licensed Work under Phase 1  of
              development solely for the purpose of supporting the [        ]
              browser, provided IBM agrees to pay third-parties royalties
              resulting from IBM's use of such [     ] software licensed by

--------------------------------------------------------------------------------
                                                          ARTICLE 1-PAGE 6 OF 13

[ ] Confidential Treatment Requested.  Omitted Portions Filed Separately with 
    the Securities and Exchange Commission.


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 1 DEVELOPMENT

              NCD. Other than such third-party royalties that may be necessary,
              NCD will not charge IBM any separate fee for providing [     ] in
              support of the [        ] browser.

              [                    ]

              NCD agrees that it will work in good faith with IBM to acquire
              appropriate license rights to allow its implementation of the
              [                     ] to be added as a Licensed Work under Phase
              1 of Development. NCD agrees to license the [       ] to IBM under
              the licensing terms of this Alliance Agreement if such rights
              exist or are obtained, provided that IBM shall be responsible for
              third-parties royalties, if any, resulting from IBM's use of such
              software licensed by NCD.

    3.2.2     DEVELOPMENT ENVIRONMENT

              NCD shall provide all Development Environment for other
              Deliverables herein.  NCD shall be responsible for providing all
              equipment necessary for its performance under this Article.  IBM
              may loan or otherwise supply unique IBM equipment.
              Determination of need will be evaluated on a case-by-case basis.
              IBM will provide a loan of an AS/400 and necessary training
              through a separate equipment loan agreement.

    3.2.3     DOCUMENTATION

              *    NCD's Bill of Material (B/M) for Products to be supplied by
                   NCD.
              *    A complete list of NCD's approved suppliers for each
                   component of the Product.
              *     All NCD documentation source files for Products and
                   Deliverables, including user manuals, installation guides,
                   and system administrator manuals. (For use in IBM
                   publications).
              *     NCD development documentation files for Products and
                   Deliverables. (For development and support group education
                   and reference).
              *    Design documentation for Products (both hardare and
                   software).
              *    Educational materials in support of skills transfer classes.
              *    A source paper to be used as input to existing service and
                   customer documentation.
              *    Specifications for components, hardware, circuits, and
                   function used by NCD in its Product development.
              *    Other documentation deemed necessary by IBM or by NCD for

--------------------------------------------------------------------------------
                                                          ARTICLE 1-PAGE 7 OF 13

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<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 1 DEVELOPMENT

                    development of the Phase 1 and Phase 2 Products.


4.  IBM'S RESPONSIBILITIES

    IBM is responsible for the following tasks, in which NCD shall assist as
    requested by IBM:

              *    [
                                                                ]
              *    [                                                           ]
              *    [                            ]
              *    [                     ]
              *    [                   ]
              *    [
                        ]
              *    [      ]
              *    [      ]
              *    [
                                   ]
              *    [
                              ]
              *    [                      ]
              *    [                             ]
              *    [                     ]
              *    [                          ]
              *    [                             ]
              *    [                       ]
              *    [                                                       ]
              *    [                                                      ]
              *    [                ]
              *    [            ]
              *    [                             ]
              *    [                  ]
              *    [

                                                  ]
              *    [                                                         ]
              *    [                ]
              *    [


 
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                                                          ARTICLE 1-PAGE 8 OF 13

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<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 1 DEVELOPMENT

                                      ]
              *    [
                           ]


5.  PRODUCT DEVELOPMENT PLAN AND DEVELOPMENT SCHEDULES

    5.1  PRODUCT DEVELOPMENT PLAN

         The parties shall use best efforts to mutually agree to and complete a
         Product Development Plan covering Phases 1 and 2 of the Product
         development within 30 days after execution of this Article.  The
         Product Development Plan shall include schedules designed to meet the
         intended GA timelines described in the Phase 1 and Phase 2 overviews
         in the General Description Section of this Article, however, actual
         schedules will be mutually agreed to by the parties.  The Product
         Development Plan for Phase 1 Product shall be firm at that time to
         allow meeting the initial hardware design freeze date and the limited
         shipment and GA timelines.  The Product Development Plan for Phase 2
         shall contain the schedules and plans for completion of the key
         checkpoints required to meet the Phase 2 General Availability plan
         dates and shall be subject to further enhancement and modification.
         Such Product Development Plan shall be an attachment to this Article
         and shall be signed by the Article 1 Coordinators.  The Product
         Development Plan shall describe the details of the development tasks,
         development schedules and milestones, function and content of
         Deliverables, design verification testing, acceptance criteria for
         Deliverables, and other items deemed appropriate for efficient
         management of the development process.  The parties shall comply with
         the Product Development Plan.

    5.2  INITIAL HARDWARE DESIGN FREEZE DATE

         The initial hardare design freeze date for Phase 1 Product shall be
         [               ].  The Article 1 Coordinators may change this date by
         mutual agreement in writing.  However, any change of more than 30 days
         (forward or backward)  in the initial hardware design freeze date
         shall require the concurrence and signatures of the parties' Alliance
         Managers.


6.  ENHANCEMENTS

    6.1  BASIC ENHANCEMENTS

         Throughout the term of this Article, NCD shall offer to provide to IBM
         at no

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                                                          ARTICLE 1-PAGE 9 OF 13

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<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 1 DEVELOPMENT

         additional charge all Basic Enhancements. Such Basic Enhancements shall
         be offered to IBM within a reasonable time period prior to the 
         availability of any such Basic Enhancements in NCD's own products 
         to allow IBM to incorporate and make available such Basic 
         Enhancements in its Products.  Basic Enhancements accepted by IBM 
         shall be deemed Licensed Works.

    6.2  MAJOR ENHANCEMENTS

         Throughout the term of the Article, NCD shall offer to provide to IBM
         Major Enhancements for a reasonable fee (which may incorporate NCD's
         costs for third party royalties and other costs incurred by NCD) to be
         determined in good faith by the parties, and mutually agreed upon in
         writing, provided that such fees shall be no greater than the lowest
         charges paid by other NCD customers for such Major Enhancements. Such
         Major Enhancements shall be offered to IBM within a reasonable time
         period prior to the availability of any such Major Enhancements in
         NCD's own products to allow IBM to incorporate and make available such
         Major Enhancements in its Products.  Major Enhancements shall be
         deemed Licensed Works.

    6.3  CUSTOM ENHANCEMENTS

         Throughout the term of this Article, NCD shall offer to provide to IBM
         all Custom Enhancements for a reasonable fee to be determined in good
         faith by the parties and mutually agreed upon in writing.  IBM shall
         own all Custom Enhancements.

    6.4  CATEGORIZING ENHANCEMENTS

         Prior to NCD's commencement of work on any Custom Enhancement, and
         prior to delivering any Enhancement to IBM, the parties shall describe
         the Enhancement in writing, and categorize the Enhancement as a Basic,
         Major, or Custom Enhancement.  If the Enhancement is categorized as a
         Major or Custom Enhancement, the parties shall agree in writing to the
         compensation to be paid for such Enhancement and the provisions for
         ongoing maintenance and support of such Enhancements.

    6.5  ENHANCEMENTS CREATED BY IBM

         Prior to creating any Enhancements to Licensed Works during the term
         of the Alliance Agreement, other than Custom Enhancements, IBM shall
         describe the

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                                                         ARTICLE 1-PAGE 10 OF 13


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 1 DEVELOPMENT

         planned Enhancement to NCD and give NCD a reasonable opportunity to
         offer to provide such Enhancement to IBM under the terms set forth in
         sections 6.1 and 6.2 above.  In the event IBM determines not to 
         obtain the Enhancement from NCD, IBM shall negotiate in good faith 
         with NCD to grant NCD a license back to such Enhancements created 
         by IBM.  Nothing in this section shall prevent IBM from also 
         requesting NCD to offer to provide Custom Enhancements, except that 
         IBM shall not be required to negotiate with NCD for the licensing 
         back of such Custom Enhancements.


7.  WARRANTIES

    NCD represents and warrants that Original Deliverables have been or shall
    be prepared and/or procured by NCD with professional diligence and skill,
    and will conform to the material specifications and requirements set forth
    or incorporated in this Alliance Agreement.

    NCD warrants that each Deliverable will perform in accordance with the
    functional specifications defined in or incorporated into this Article.

    These warranties will survive termination of the Alliance Agreement.

8.  COMPENSATION

    Upon this Alliance Agreement becoming effective, NCD will be paid a 
    non-recoverable expense in the amount of $[       ] per month, beginning 
    June 15, 1996, up to the time of General Availability of the Phase 1 
    Product.  That NRE will be invoiced to IBM on a monthly basis beginning 
    July 15, 1996 covering the period dating back to the 15th of the previous 
    month.  These monthly payments will continue until GA or until the 
    cumulative total of all such payments is of $[         ], whichever comes 
    first. IBM will pay the invoice within 30 days of receiving it.   The 
    final payment will be prorated to the GA date.  This NRE is to be used by 
    NCD in the agressive pursuit of the achievement of the milestones set for 
    the Product Development Plan and in recognition of their expenses 
    incurred in early production tooling and ramp-up requirements to meet the 
    IBM and NCD joint development schedules as defined in this Article.  
    Except for this NRE payment and except  where expressly stated otherwise 
    in regard to Custom and Major Enhancements, there shall be no additional 
    separate compensation for the work performed pursuant to this Article.


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                                                         ARTICLE 1-PAGE 11 OF 13

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<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 1 DEVELOPMENT

9.  PRODUCT DEVELOPMENT PLAN

    9.1  SPECIFICATIONS

         NCD and IBM Product specifications will be jointly defined and
         reviewed by the Product teams covered by this Agreement.  Since the
         intent is to have common IBM / NCD design content on the base Product,
         these specifications for the Product must be agreed on and monitored
         closely as to implementation and tradeoffs made throughout the design.
         Primary vehicle for making that happen is the weekly scheduled IBM /
         NCD development team conference call, schedule tracking, and work item
         tracking, managed by the Development Article coordinators.  These work
         item tracking project logs will serve as extensions and clarifications
         to the Product specification as agreed to therein, and are available
         for review by both parties.

    9.2  DESIGN

         The Products covered by this Alliance Agreement will be jointly
         designed by NCD and IBM.  NCD and/or IBM may subsequently request
         design changes based on the results of usability testing, market
         surveys, and Product Plan Reviews.  Development Article coordinators
         will jointly agree on the design changes based on the merits of the
         design change for the Product as a whole and as related to each
         platform.

    9.3  UNIT TEST

         NCD is responsible for performing unit testing.  The mission of the
         unit testing is to verify that the control unit of the Product
         correctly implements the Product Specification and it's manufacturing
         quality criteria.  This testing will be performed during NCD's and
         IBM's Engineering Verification Test (EVT) test phase.

    9.4  IBM TESTING

         NCD shall conform with the entry and exit criteria for IBM EVT, RAISE,
         and MVT as defined in the EVT/RAISE Hardware System Test Process
         (available from the IBM Development Article I coordinator).



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                                                         ARTICLE 1-PAGE 12 OF 13


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 1 DEVELOPMENT

    9.5  INFORMATION PLAN

         NCD will provide IBM Information Development with current
         specifications and documents that could be used by IBM in generating
         the IBM publications in support of the Product upon request that
         provides enough overview, conceptual, reference, how-to, and other
         detailed information to enable IBM information developers to extract
         information from it and merge that information into existing IBM
         Product manuals and on-line help information to support the Product.
         Examples of types of information to be provided in the source paper
         are:

                   a)   description of overall service strategy
                   b)   problem isolation procedures
                   c)   reference code descriptions



IN WITNESS WHEREOF, each party has  reviewed this Article and each party has
executed this Article by signature of its authorized representative.



NETWORK COMMUNICATION DEVICES, INC.      INTERNATIONAL BUSINESS MACHINES
                                         CORPORATION


Signature /s/ Lorraine Hariton           Signature /s/ Bhawnesh C. Mathur
         ------------------------                  ----------------------------

Printed Name   Lorraine Hariton          Printed Name   Bhawnesh C. Mathur
            ---------------------                     -------------------------

Printed Title V.P. of Strategic Accounts  Printed Title Dir. of Procurement,
             ---------------------------  IBM Server Group
                                          -------------------------------------

Date    6/27/96                          Date    June 27th, 1996
    -----------------------------             ---------------------------------



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                                                         ARTICLE 1-PAGE 13 OF 13


<PAGE>

                             IBBM-NCD ALLIANCE AGREEMENT

                                     NO. 350-148



                                      ARTICLE 2

                                    MANUFACTURING


<PAGE>

This Article 2, effective on the date last signed below, is agreed to by Network
Computing Devices, Inc.,  ("NCD"), a corporation of the State of California,
with offices located at 350 North Bernardo Avenue, Mountain View, California
94043-4207 and International Business Machines Corporation ("IBM"), a
corporation of the State of New York, with offices at 3605 Highway 52 North,
Rochester, Minnesota 55901-7829.


                                       RECITALS

A.  NCD and IBM have entered into an alliance between them in the area of a
    network application terminal ("thin client") product.

B.  This Article describes, among other things, the terms and conditions under
    which NCD will custom manufacture a thin client for IBM, including but not
    limited to forecasting, ordering, quantity, and pricing, and shipping terms
    and conditions.


1.  ARTICLE COORDINATORS

    1.1  NCD ARTICLE 2 COORDINATOR:

         Randy Wagner
         Manufacturing Project Manager
         Network Computing Devices, Inc.
         350 North Bernardo Avenue
         Mountain View, CA 94043-4207

         TELEPHONE: (415) 919-2756
         TELEFAX:   (415) 961-7774

    1.2  IBM ARTICLE 2 COORDINATOR :

         Michael Heaser
         International Business Machines Corporation
         3605 Highway 52 North

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                                                          ARTICLE 2-PAGE 1 OF 15


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 2 MANUFACTURING

         Rochester, MN 55901-7829

         TELEPHONE:  (507) 253-8784
         TELEFAX:  (507) 253-3648

    1.3  DUTIES OF ARTICLE COORDINATORS

         The Article Coordinators will act as overall coordinators for the
         parties under this Article.  Each party will advise the other in
         writing of any change regarding its Article Coordinator.  All
         communications between the parties regarding this Article shall be
         conducted through the Article Coordinators.


2.  PRODUCTS

    NCD shall supply Products to IBM.  Products to be supplied to IBM under
    this Alliance Agreement may include NCD's existing EXPLORA products, as
    well as Products developed under this Alliance Agreement which are
    generally described in Development-Article 1, and shall be specified in
    more detail in the Product Specification and Price List (PSPL) which shall
    be an attachment to this Article. Product descriptions and specifications
    may be changed from time to time by mutual agreement.  NCD will supply such
    Products according to the terms and conditions of this Article and the PSPL
    attachment.   No changes of any kind shall be made by NCD in the form, fit
    or function of Products without IBM's prior written consent.  However, if
    either party determines that such changes are necessary for compliance with
    government-imposed safety requirements, that party will promptly inform the
    other, and the parties will promptly take the reasonable and necessary
    steps to implement such changes.

    The parties shall use their best efforts to negotiate and complete the
    initial PSPL within 30 days after the Initial Design Freeze Date as
    specified in Article 1-Development.   The PSPL shall be amended when the
    Product specifications and/or the Product prices are changed pursuant to
    this Alliance Agreement.


3.  QUALITY



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                                                          ARTICLE 2-PAGE 2 OF 15


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 2 MANUFACTURING

    NCD will ensure that all work performed pursuant to this Article is
    performed in a professional and competent manner consistent with the
    highest industry standards and safety practices, and with IBM's
    specifications, drawings, standards, directions and procedures.

    NCD will ensure that a total management quality system such as the Malcolm
    Baldridge National Quality Award Criteria, ISO 9000, or equivalent national
    standard, is maintained for all aspects of the key processes related to
    performance of work under this Article.  NCD will strive to implement and
    maintain a Product defect level at or below a Six Sigma level.  NCD will
    monitor the steps in all Product-related processes to identify deviations
    and potential improvements.  NCD will employ Statistical Process Control
    (SPC) techniques to ensure that the quality requirements are consistently
    met by all Product-related processes.  Upon request by IBM, NCD will
    provide IBM written reports and/or numerical data files containing quality
    information related to the Product manufacturing process.  IBM will
    determine the structure of such reports.

    Upon reasonable notice during NCD's normal business hours, IBM will have
    the right to review NCD's quality plans and initiatives, assembly methods,
    manufacturing processes, and production facilities on or off NCD's premises
    in order to assess their adequacy.


4.  PRICING AND QUANTITIES

    NCD shall make the Product available to IBM at the price determined as set
    forth below.  NCD warrants that pricing of Products does not include taxes
    and that NCD will not include any sales taxes on any Products purchased by
    IBM.  Upon request, IBM will provide NCD with a valid Reseller's Exemption
    Certificate for each taxing jurisdiction for which NCD will ship Products.

    4.1  INITIAL PRICE FOR PRODUCTS

         The initial price of the Products shall be determined no later than 30
         days after the hardware design freeze date specified in Article
         1-Development, and shall be specified in the PSPL.  The initial prices
         of Products shall be determined by adding the B/M cost to a markup
         amount ("Markup").  The B/M cost shall be determined by actual cost of
         the components that make up the B/M, including the cost of assembly,
         test, and delivery of the finished card assembly to NCD or the NCD-

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                                                          ARTICLE 2-PAGE 3 OF 15


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 2 MANUFACTURING

         designated assembly point. Upon IBM's written request to do so,
         NCD will utilize a second source for the manufacture of Products,
         however the B/M cost will be adjusted to reflect any incremental costs
         associated with obtaining such second source.

         The Markup during the Initial Term of this Alliance Agreement shall be
         as follows:

         Cumulative Total Products Ordered       Markup
         ---------------------------------       ------

                  [            ]                 $[     ]
             [                 ]                 $[     ]
             [                 ]                 $[     ]
             [                 ]                 $[     ]
             [                 ]                 $[     ]
             [                 ]                 $[     ]

         For purposes of determining the Markup, the cumulative total products
         ordered according to the above table shall include all Products
         ordered by IBM during the Initial Term.

         In addition to the price as determined above, NCD may charge IBM for
         reimbursement of any import duty actually incurred by NCD resulting
         from the shipment of IBM-ordered Products to any IBM-designated
         location outside of the United States, provided however, that
         regardless of the country from which NCD ships the Products, the
         amount charged shall be no greater than the amount of duties that NCD
         would have incurred for shipment of the Products from the United
         States to the same IBM-designated location on the same date, and
         provided further that NCD may make this charge only to the extent NCD
         has notified IBM in writing of any such import duty charge prior to
         IBM's placement of the order to which it applies.  Such charge shall
         be reflected as part of the piece price for Products ordered, and
         shall be reflected on the same invoice.  This shall be IBM's sole
         obligation for any import duties associated with the shipment of
         Products.

    4.2  QUARTERLY PRICE REVIEWS AND ADJUSTMENTS

         No less frequently than quarterly after the determination of the
         initial prices for Products, the Manufacturing Article Coordinators
         shall meet and review B/M

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                                                          ARTICLE 2-PAGE 4 OF 15

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<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 2 MANUFACTURING

         costs and adjust the  Product prices to reflect any changes in such
         costs.  IBM will bear the risk of such cost fluctuations in B/M, and
         the Product prices shall be adjusted for the full amount of such
         increase or reduction.  However, if IBM can demonstrate that a lower
         cost for one or more components of the B/M is available to NCD, the
         Product prices for Products containing such component(s) shall be
         determined using that lower cost, unless NCD can demonstrate to IBM
         after a reasonable inquiry that the component cannot be obtained from
         a supplier offering competitive lead times and comparable quality.
         The new prices for Products shall take effect on a schedule mutually
         agreed by the parties, taking into consideration the lead times of the
         components on which such price changes are based and NCD's current
         inventory of, and contractual commitments to purchase, such components
         based on IBM's forecasts , but in no case shall the price adjustment
         take effect later than 90 days after the determination is made. In the
         event of a significant price change occuring between quarterly
         reviews, the parties shall discuss in good faith an accelerated change
         in Product prices to reflect the change.

    4.3  MINIMUM ORDER QUANTITY

         There shall be a minimum order quantity of [       ] Products during 
         the Initial Term of the Alliance Agreement which shall apply only if no
         notice of termination of the Alliance Agreement has been provided
         prior to (a) March 30, 1997, or (b) General Availability (GA) of
         Products, whichever is earlier.  If this minimum order quantity is
         triggered and IBM has failed to order [       ] Products by the
         expiration of the Initial Term through no fault of NCD, then IBM shall
         pay NCD a cancellation charge of $[   ] for each unit of the [       ]
         minimum order quantity not ordered.  This cancellation charge shall be
         NCD's full and exclusive remedy in the event IBM has failed to order
         [       ] Products during the Initial Term.  All IBM orders of Products
         (whether NCD's existing EXPLORA products or enhanced or derivative
         versions thererof) during the Initial Term shall be applied against
         this minimum order quantity, including those units ordered prior to
         the trigger date described above.   Unless the parties agree in
         writing to a different payment schedule for such cancellation charge,
         NCD shall invoice IBM  for the full cancellation charge no later than
         30 days after the Initial Term, and IBM shall remit payment on NCD's
         invoice no later than 60 days after expiration of the Initial Term.

         IBM's obligations in this section shall cease upon IBM's termination
         of the

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                                                          ARTICLE 2-PAGE 5 OF 15

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<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 2 MANUFACTURING

         Alliance Agreement for cause.  If IBM terminates this Alliance
         Agreement without cause after the minimum order quantity obligation
         has been triggered, then the full cancellation charge of $[  ] for each
         unit of the [       ] minimum order quantity not ordered by IBM as of
         the date such termination without cause is effective shall become due
         and owing by IBM. If IBM terminates for cause, no such payment shall
         be due. NCD shall invoice IBM for such payment no later than 30 days
         after the effective date of the termination, and IBM shall pay the
         invoice no later than 60 days after receiving it.


5.  INVOICING AND PAYMENT

    NCD will invoice IBM upon shipment of Product to IBM's facilities. Unless
    otherwise specified in writing by the parties,  IBM shall make payment on
    undisputed invoices within 30 days from receipt of the invoice provided
    such invoices have been transmitted electronically in accordance with the
    parties' Electronic Data Interchange (EDI) Agreement. For undisputed
    invoices delivered through non-electronic means, IBM shall pay such
    invoices within 45 days of receipt of the invoice.  In the event payment is
    not received within such period, NCD will notify IBM and IBM will make
    prompt payment of the amount due. IBM will notify NCD of any dispute
    regarding an invoice no later than the date payment of the invoice would
    otherwise be due.  IBM's repeated and substantial failure to pay undisputed
    invoices when due may be treated by NCD as a material breach.


6.  WORK AUTHORIZATION LOGISTICS

    NCD will deliver Products as specified in WAs. The agreed to lead time for
    IBM to issue WAs prior to delivery shall be 30 days.  NCD agrees to
    cooperate and use best efforts for cases where IBM requests a shorter
    lead-time. If NCD requires an additional charge to cover added cost for
    fulfilling IBM's orders on a shorter lead time, NCD shall inform IBM of
    such charge in writing before NCD accepts such an order.  Any increase in
    the agreed to lead-time must have IBM's prior written approval. The parties
    specifically contemplate that a longer lead time may be necessary for the
    ramp up of volumes for initial availability of the Products, and agree to
    negotiate a schedule for such ramp up volumes.

    IBM shall provide a 12 month rolling estimated forecast, updated on a
    monthly basis, for

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                                                          ARTICLE 2-PAGE 6 OF 15

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<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 2 MANUFACTURING

    any quantities of Product that may be required.  The first three months of
    a given forecast shall be binding only to the extent that each of the first
    three months of the forecast may vary from the previous month's forecast by
    no more than the following amounts:

         Month 1:    +/- [  ]%
         Month 2:    +/- [  ]%
         Month 3:    +/- [  ]%

    For example, if a forecast is issued on January 1 showing requirements for
    [   ] units each month in March, April, and May, IBM may order from [  ] to
    [   ] units on February 1 for delivery on March 1.  The forecast for April 
    may be adjusted to [      ] units, and the May forecast may be adjusted to 
    [      ] units. This process and the applicable percentages of allowable 
    variance will continue to roll each month with the forecast. There will be
    no premiums or penalties for Products ordered within these parameters.

    The remaining portion of any given forecast (beyond 3 months) shall be
    completely preliminary and non-binding.

    Upon termination of this Article, NCD shall cease production of all
    Products ordered. If IBM terminates without cause, IBM shall be responsible
    for paying NCD for all finished Products which have been ordered by IBM
    through WAs issued prior to the date the notice of termination is provided
    and which have actually been produced by NCD.  In addition, the parties
    will negotiate in good faith IBM's reimbursement to NCD for the cost of any
    components and work-in-process associated with IBM's binding portion of the
    latest forecast that NCD or its supplier cannot utilize. All such Products,
    components, and work-in-process paid for by IBM are the sole property of
    IBM, and upon termination the disposition of all such IBM property shall be
    in accordance with IBM's written instructions.


7.  DELIVERY LOGISTICS

    7.1  DELIVERY POINT

         All references to delivery as it applies to this Article shall mean
         delivery to IBM locations that may be specified by IBM in a WA or
         separate document.

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<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 2 MANUFACTURING

         The delivery point shall be F.O.B. IBM Location.

    7.2  ON -TIME DELIVERY

         Products must be delivered on the dates specified in WAs. If NCD will
         be late in meeting  a scheduled delivery date by more than one
         business day, NCD shall promptly notify IBM of NCD's revised delivery
         date and IBM may, at its option, without limitation (i) cancel
         Products not delivered without charge, (ii) buy elsewhere, or make,
         and charge NCD any cost differential, subject to IBM's duty to
         reasonably mitigate its damages, and (iii) charge NCD for any premium
         shipping and handling costs incurred as a result of the late delivery,
         subject to IBM's duty to reasonably mitigate its damages. NCD shall
         not deliver Products to IBM more than 2 days earlier than the
         designated shipment date without IBM's prior written approval.   NCD's
         repeated or substantial failure to meet its scheduled delivery dates
         may be treated by IBM as a material breach of the Alliance Agreement.
         In any case in which NCD is unable to timely deliver Products ordered
         by IBM, such orders shall be credited to IBM's minimum order quantity
         requirement as specified in section 4.3.


8.  TOOLING

    NCD shall be responsible for acquiring and maintaining production-level
    Tooling required to perform its obligations under this Article.  In the
    event that retooling is required after NCD has acquired such
    production-level tooling solely due to an IBM mechanical design change,
    then IBM will be responsible for providing the new Tooling, and will own
    such new Tooling. NCD shall be responsible for acquiring any replacement
    Tooling when such replacement Tooling is necessary at the Tooling's end of
    life.  In the event NCD ceases manufacturing Products for IBM for any
    reason other than IBM's termination without cause, IBM shall have the right
    to immediately purchase Tooling owned by NCD at the Tooling's fair market
    value based on its usage to date.  In the event any such Tooling is in the
    possession of a third-party, NCD shall ensure that there are agreements in
    place with such third parties which allow such third parties to utilize
    such tooling to continue supplying IBM with Products or Product components
    pending completion of the sale.  This obligation shall survive termination
    of the Alliance Agreement.



--------------------------------------------------------------------------------
                                                          ARTICLE 2-PAGE 8 OF 15


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 2 MANUFACTURING

9.  PACKAGING FOR SHIPMENT TO IBM

    In packaging Products for shipment, NCD will take the necessary precautions
    to ensure maximum protection of Product from damage due to rough handling
    and any other hazard which might occur in transit.

    In addition, NCD will package all Products to conform with IBM's document
    no. GA 21-9261-10  titled "Packaging and Handling - Supplier and Interplant
    Requirements," which shall be an attachment to this Article.


10. ELECTRONIC DATA INTERCHANGE

    NCD and IBM shall handle manufacturing transactions in accordance with the
    IBM Electronic Data Interchange (EDI) Agreement, which shall be an
    attachment to this Article. NCD will implement all required EDI
    capabilities no later than initial GA of the Products.


11. DEMONSTRATION AND DEVELOPMENT VERSIONS OF PRODUCTS

    During the Initial Term of this Alliance Agreement, NCD shall provide IBM,
    at no charge, up to [         ] Products for demonstration and development
    purposes. Such demonstration and development Products may be requested from
    time to time by IBM in the quantities and versions (whether Base Products
    or Added Feature Products) that IBM chooses, so long as the cumulative
    total of such Products requested by IBM does not exceed [  ]. NCD shall
    inform IBM in writing when the total development and demonstration
    allotment has been exhausted. This development and demonstration allotment
    shall not be counted against IBM's minimum order quantity.


12. NCD'S REPRESENTATIONS/WARRANTIES

    12.1 REPRESENTATIONS AND WARRANTIES

         In addition to the representations and warranties set forth in the
         Base Agreement,

--------------------------------------------------------------------------------
                                                          ARTICLE 2-PAGE 9 OF 15

[ ] Confidential Treatment Requested.  Omitted Portions Filed Separately with 
    the Securities and Exchange Commission.
<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 2 MANUFACTURING

         NCD represents and warrants: (i) NCD's performance of this Article
         will not violate the terms of any license, contract, note or other
         obligations to which NCD is a party, or any statute, law, regulation
         or ordinance to which NCD is subject, including without limitation,
         all health, safety and environmental statutes, laws, regulations and
         ordinances; (ii) no claim, lien or action is pending or threatened
         against NCD or its suppliers, Subsidiaries, affiliates, or parent
         company that would interfere with IBM's, its Subsidiaries',
         Distributors', or customers' use of Products; (iii) the Products do
         not infringe any patent, trademark, copyright or other intellectual
         property rights of a third party in the geographic territories
         specified in section 10 ("Indemnification") of the Base Agreement, and
         NCD is not aware of any such infringement in any other areas; (iv)
         none of the Products contain nor are any of the Products manufactured
         using ozone depleting substances including, without limitation,
         chlorofluorocarbons, halons, methyl chloroform and carbon
         tetrachloride; (v) each of the Products is safe for its intended use,
         and (vi) all Products provided to IBM under this Agreement are new and
         do not contain anything used or reconditioned.

         The warranties in this section 12.1 shall survive termination of the
         Alliance Agreement.

    12.2 PRODUCT WARRANTY

         NCD warrants that all Products provided to IBM are free from defects
         in design (except for designs provided by IBM), material, workmanship,
         and will conform to all Product specifications and quality
         requirements.

         NCD shall, at NCD's option,  repair or replace Products that do not
         conform to this warranty, and that are returned to NCD by IBM or IBM's
         customer within the earlier of : (a) 1 year after the date of purchase
         as indicated by documented proof of the customer's purchase date
         submitted to NCD by IBM, IBM's Distributor, or the customer, or (b) 1
         year plus 120 days after the date of NCD's shipment of the Product to
         IBM.  Such repair or replacement shall be made and shipped back by NCD
         within 7 business days after NCD receives the nonconforming Product.
         Repair or replacement shall be at no charge to IBM or the customer.
         Unless a different return shipment destination is specified, NCD shall
         ship the repaired Product, or the replacement Product, to the IBM
         location or the customer location from which the non-conforming
         Product was shipped to NCD. The customer or

--------------------------------------------------------------------------------
                                                         ARTICLE 2-PAGE 10 OF 15


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 2 MANUFACTURING

         IBM shall be responsible for shipping the product to NCD, and NCD
         shall be responsible for shipping back the repaired or replacement
         Product. NCD shall specify whether the Product it returns has been
         repaired or is a replacement Product.

         Prior to initial GA of the Products, IBM and NCD shall negotiate in
         good faith regarding any additional administrative or logistical
         details associated with fulfilling warranty obligations.  In addition,
         IBM and NCD may agree to extend the warranty period for an additional
         two years beyond the warranty period described in the preceding
         paragraph for a mutually agreed-upon charge.


13. IBM'S RIGHT TO UTILIZE OTHER MANUFACTURING SOURCES

    If IBM markets Products during the Initial Term of this Alliance Agreement,
    IBM shall utilize NCD for the supply of at least [  ]% of the volume of
    Products, provided:

         1.   NCD has not breached this Article, or any other part of the
              Alliance Agreement, and;

         2.   IBM reasonably determines that NCD has consistently shipped
              Products that conform to all Product specifications in a timely
              manner according to IBM's forecasts and WAs, and;

         3.   IBM reasonably determines that the Product supplied by NCD is
              competitive regarding price (excluding Markup), performance,
              quality, function, features and technology.


14. IBM'S RENEWAL OBLIGATION/RIGHTIBM'S

    14.1 IBM'S OBLIGATION TO RENEW

         In the event IBM continues to market Products after expiration of the
         Initial Term of the Alliance Agreement and the conditions listed below
         have been satisfied, this Article shall remain in effect for an
         additional two years unless terminated earlier


--------------------------------------------------------------------------------
                                                         ARTICLE 2-PAGE 11 OF 15

[ ] Confidential Treatment Requested.  Omitted Portions Filed Separately with 
    the Securities and Exchange Commission.

<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 2 MANUFACTURING

         pursuant to the Base Agreement.  The initial Markup for Products
         supplied to IBM by NCD during the renewal term shall be calculated
         based on the cumulative total Products ordered by IBM during the term
         of the Alliance Agreement.

         IBM shall utilize NCD for the supply of at least [            ] units
         of its volume of Products, whichever is less, during the first year of
         such renewal term, and for the supply of at least [             ] units
         of its volume of Products, whichever is less, for the second year of
         the renewal term, provided:

         1.   NCD has not breached this Article, or any other part of the
              Alliance Agreement, and;

         2.   IBM reasonably determines that NCD has consistently shipped
              Products that conform to all Product specifications in a timely
              manner according to IBM's forecasts and WAs, and;

         3.   IBM reasonably determines that the Product supplied by NCD is
              competitive regarding price (excluding Markup), performance,
              quality, function, features and technology.

    14.2 IBM'S RIGHT TO RENEW

         If IBM chooses to renew the Alliance Agreement for an additional two
         years (through December 31, 2000) under the terms of the Base
         Agreement, then during the renewal term the provisions  of section
         14.1 of this Article shall apply.

    14.3 NO MINIMUM ORDER QUANTITY DURING RENEWAL TERM

         There shall be no minimum order quantity required of IBM during the
         renewal term.


15. ROYALTIES FOR PRODUCTS NOT SUPPLIED BY NCD

    For each Product that is supplied to IBM by a party other than NCD prior to
    December 31, 2000, IBM shall pay to NCD a royalty of [           ] 
    ($[     ]). This royalty shall not

--------------------------------------------------------------------------------
                                                         ARTICLE 2-PAGE 12 OF 15

[ ] Confidential Treatment Requested.  Omitted Portions Filed Separately with 
    the Securities and Exchange Commission.


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 2 MANUFACTURING

    apply to the extent the supply of Products by a third party is necessary
    due to NCD's failure to meet delivery schedules, NCD's failure to meet
    quality obligations, or due to events described in the Force Majeure
    section of this Alliance Agreement. Nor shall this royalty apply to IBM's
    acquisition or manufacture of up to [      ] Products (1) for IBM's own
    internal use, or (2) for limited shipments by IBM for the purpose of early
    testing, development-level evaluation and similar early-ship programs prior
    to the General Availability of such Products.

    No later than 30 days after the end of each calendar quarter in which such
    Products have been supplied to IBM by a third party, IBM shall submit a
    statement to NCD showing the number of units of Products supplied by third
    parties.  NCD shall submit an invoice to IBM for the royalty as set forth
    in this section, and IBM shall pay the invoice in accordance with section 5
    of this Article.

    After December 31, 2000,  IBM's license to Licensed Work that consists of
    Code delivered by NCD pursuant to Phase 1 and Phase 2 of Development as
    described in Article 1-Development shall be fully paid up as of that date.
    This shall not include Code contained within Major Enhancement or Custom
    Enhancements for which NCD and IBM have agreed to a different payment
    arrangement.  Nothing herein shall require IBM to pay royalties to NCD on
    IBM products or offerings other than the Products.  The royalty obligations
    under this section shall cease upon IBM's termination of the Alliance
    Agreement with cause, but shall continue until December 31, 2000 in the
    event IBM terminates the Alliance Agreement without cause prior to that
    date.


16. MOST FAVORED CUSTOMER

    The prices provided by NCD to IBM under this Agreement should not exceed
    those offered to other customers purchasing similar products or services in
    like or lesser quantities under similar terms and conditions.  If NCD
    offers prices to other customers which are lower than those offered to IBM
    in like or lesser quantities under similar terms and conditions during the
    same time period, then those prices shall become available to IBM at the
    time of their availability to that other customer.  IBM and NCD shall
    maintain the confidentiality of prices provided to IBM.



--------------------------------------------------------------------------------
                                                         ARTICLE 2-PAGE 13 OF 15

[ ] Confidential Treatment Requested.  Omitted Portions Filed Separately with 
    the Securities and Exchange Commission.


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                                ARTICLE 2 DEVELOPMENT

IN WITNESS WHEREOF, each party has  reviewed this Article and each party has
executed this Article by signature of its authorized representative.



NETWORK COMMUNICATION DEVICES, INC.           INTERNATIONAL BUSINESS MACHINES
                                              CORPORATION



Signature /s/ Lorraine Hariton                Signature /s/ Bhawnesh C. Mathur
         --------------------------------               -----------------------

Printed Name Lorraine Hariton                 Printed Name  Bhawnesh C. Mathur
            -----------------------------                  --------------------

Printed Title  V.P. of Strategic Accounts     Printed Title  Dir. of
             ----------------------------     Procurement, IBM Server Group
                                              ---------------------------------

Date     6/27/96                              Date     June 27, 1996
    -------------------------------------          ----------------------------



--------------------------------------------------------------------------------
                                                         ARTICLE 2-PAGE 14 of 15


<PAGE>


                      Attachment 2 to Article 2 of

                      IBM -- NCD Alliance Agreement


ELECTRONIC DATA INTERCHANGE/ELECTRONIC FUNDS TRANSFER TRADING PARTNER 
AGREEMENT
------------------------------------------------------------------------------
This EDI Agreement is an Attachment to Article 2 of the Alliance Agreement 
between IBM and NCD.

NCD and International Business Machines Corporation (IBM) intend to create 
legally binding purchase and sale obligations by the electronic transmission 
of business documents (Documents) and agree that the following terms and 
conditions apply to such transmissions:

1. TRANSMISSION - Each party may electronically transmit and receive 
Documents through the assistance of a network in accordance with mutually 
agreed upon standards. Each party, at its own expense, shall provide and 
maintain the equipment, software, services, including network charges, and 
testing necessary to effectively and reliably transmit and receive documents.

2.  RECEIPT - A Document is received when it arrives at the receiving party's 
mailbox. Upon receipt of any Document, the receiving party shall promptly 
send an acknowledgment which will conclusively establish receipt of a 
Document. If any Document is received in an unintelligible or garbled form, 
the receiving party shall promptly notify the originating party (if 
identifiable from the received Document) in a reasonable manner. In the 
absence of such a notice, the originating party's records of the contents of 
such Document shall prevail.

3.  SIGNATURE AND ENFORCEABILITY - Each party shall adopt as its signature an 
electronic identification consisting of symbol(s) or code(s) (User ID) that 
shall be affixed to or contained in each Document. Each party will maintain 
security procedures to prevent unauthorized use or disclosure of either 
party's User ID.

   Any Document containing, or to which there is affixed, a User ID shall be 
considered: (a) a "writing" or "in writing"; (b) to have been "signed"; (c) 
an "original" when printed from electronic files or records established and 
maintained in the normal course of business; and (d) admissible to the same 
extent and under the same conditions as other business records originated and 
maintained in documentary form.

4.  THIRD PARTY SERVICE PROVIDERS - Documents will be transmitted 
electronically to each party either directly or through any third party 
service provider (Provider) with which either party may contact. Either party 
may modify its election to use, not use or change a Provider upon 60 days' 
prior written notice. Each party shall be responsible for the costs of any 
Provider with which it contracts. Each party shall be liable for the acts or 
omissions of its Provider while transmitting, receiving, storing or handling 
Documents, or performing related activities for such party.

5.  TRANSACTION TERMS - Unless specifically superseded in other written 
agreements between the parties, the terms and conditions of the Base 
Agreement will be incorporated and will apply to all Documents.

6. ELECTRONIC FUNDS TRANSFER - By completing this Section 6, you hereby 
authorize IBM to initiate electronic credit entries to the account listed 
below. You agree that such transactions will be governed by the National 
Automated Clearing House Association rules. This authority is to remain in 
effect until IBM has received written notification of termination in such 
time and such manner as to afford IBM a reasonable opportunity to act on it.

Account Party (if different)

       NCD
----------------------------------------------------------------------------
Address    350 North Bernardo Ave
----------------------------------------------------------------------------

----------------------------------------------------------------------------
City, State, Zip     Mt. View, Ca  94043
----------------------------------------------------------------------------


Financial Institution
----------------------------------------------------------------------------
Contact Name/Title
----------------------------------------------------------------------------
Contact Phone Number
----------------------------------------------------------------------------

Address
----------------------------------------------------------------------------
----------------------------------------------------------------------------
City, State, Zip
----------------------------------------------------------------------------

Account Number (max 17)
----------------------------------------------------------------------------
Bank Routing/Transit Code (max 9)
----------------------------------------------------------------------------

7.  LIMITATION OF REMEDIES - In addition to the limitation of liability 
described in the Base Agreement, the following limitations apply to this EDI 
Attachment. Neither party shall be liable to the other for any special, 
incidental, exemplary, or consequential damages arising from or as a result 
of: (1) any delay, omission, or error in the electronic transmission or 
receipt of any Documents; or (2) any delay, omission, or error of an 
electronic credit entry by IBM, even if the other party has been advised of 
the possibility of such damages. In addition, neither party shall be liable 
for any damages claimed by the other party based on any third party claim, in 
no event will either party be liable for any damages caused by the other 
party's failure to maintain security procedures to prevent the unauthorized 
use or disclosure of its User ID.

8.  TERMINATION - This Agreement shall apply as long as Article 2, 
Manufacturing, is in effect, unless terminated by mutual agreement of the 
parties.

----------------------------------------------------------------------------
The parties acknowledge that they have read this Agreement, understand it and 
agree to be bound by its terms.

By  International Business Machines      By  Network Computing Devices, Inc.
    Corporation

    /s/ Bhauvesh C. Mathar                   /s/ Lorraine Hart
    --------------------------------         --------------------------------

    Authorized Signature                     Authorized Signature
    Name     Bhauvesh C. Mathar              Name     Lorraine Hart
    Title    Director of Server              Title    VP Strategic
             Procurement        
    Date     June 27, 1996                   Date     6/27/96
    Address  3605 Highway 52 North           Address  350 North Bernardo
             Rochester, MN 55901                      Mt View, Ca 94043



                            Revision JUNE 1994


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT

                                     NO. 350-148



                                      ARTICLE 3

                           PRODUCT SUPPORT AND MAINTENANCE


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                      ARTICLE 3 PRODUCT SUPPORT AND MAINTENANCE


This Article 3, effective on the date last signed below, is agreed to by Network
Computing Devices Corporation ("NCD"), a corporation of the State of California,
with offices located at 350 North Bernardo Avenue, Mountain View, California
94043-4207 and International Business Machines Corporation ("IBM"), a
corporation of the State of New York, with offices at 3605 Highway 52 North,
Rochester, Minnesota 55901-7829.


                                       RECITALS

A.  NCD and IBM have entered into an alliance between them in the area of an
    IBM network application terminal ("thin client") Product.

B.  This Article describes , among other things, the terms and conditions
    related to product support and maintenance for the Product.


1.  ARTICLE COORDINATORS

    1.1  NCD ARTICLE 3 COORDINATOR

         Barry Davis
         Network Computing Devices, Inc.
         350 North Bernardo Avenue
         Mountain View, CA 94043-4207

         TELEPHONE: (415) 919-2747
         TELEFAX:   (415) 961-7774

    1.2  IBM ARTICLE 3 COORDINATOR

         Chuck Pavesich
         International Business Machines Corporation
         3605 Highway 52 North
         Rochester, MN 55901-7829

         TELEPHONE: (507) 253-7648
         TELEFAX:   (507) 253-4901


--------------------------------------------------------------------------------
                                                           ARTICLE 3-PAGE 1 OF 6


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                      ARTICLE 3 PRODUCT SUPPORT AND MAINTENANCE


    1.3  DUTIES OF ARTICLE COORDINATORS

         The Article Coordinators will act as overall coordinators for the
         parties under this Article.  Each party will advise the other in
         writing of any change regarding its Article Coordinator.


2.  LEVEL 3 SUPPORT RESPONSIBILITIES

    In addition to the Product warranties found elsewhere in this Alliance
    Agreement, NCD shall provide Level 3 support for Deliverables and Products.
    Level 3 support is the support IBM provides its customers after the first
    two levels of support, Levels 1 and 2, have been exhausted.  This support
    will involve the determination of whether there is a defect (patent or
    latent), error or other problem ("Defects") with the Product or
    Deliverables.  These will include both problems actually reported by IBM's
    customers ("APARs"), as well as problems discovered internally by IBM and
    reported to NCD ("PTRs").

    Level 3 support shall be conducted so that IBM is the single point of
    contact for customer-reported problems.  Unless requested by IBM in
    particular situations, NCD will have no direct contact with the customer,
    and will receive support requests only through IBM support representatives
    after reasonable efforts to resolve the problem using IBM resources have
    been exhausted.

    The IBM support representatives will determine which Defects appear to be
    related to Deliverables provided under this Alliance Agreement and,  after
    exhausting IBM internal resources, will contact NCD for further diagnosis
    and correction  if the Defect appears to be related to such Deliverables,
    including Code as well as Firmware.  Upon notification of a Defect
    identified by IBM, NCD will be responsible for isolating and correcting all
    reported or discovered Defects with the Deliverables, and providing
    responses and corrections to IBM in accordance with the parameters set
    forth below:

         SEVERITY LEVEL 1 DEFECT REPORTS

         Severity Level 1 (SL1) is for reported Defects that result in an
         emergency condition that can cause critical impact to a customer or to
         an IBM delivery schedule.  Defect reports classified by IBM as SL1
         require immediate and

--------------------------------------------------------------------------------
                                                           ARTICLE 3-PAGE 2 OF 6


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                      ARTICLE 3 PRODUCT SUPPORT AND MAINTENANCE

         sustained work until the problem is solved.   NCD shall work with IBM
         around the clock to provide a correction for the SL1 Defect, and shall
         use its best efforts to complete the correction within 24 hours of the
         earlier of NCD discovering the SL1 Defect or being informed of the
         possible SL1 Defect, unless the parties agree that a different time
         schedule is appropriate in light of the circumstances of the Defect
         report.

         SEVERITY LEVEL 2 DEFECT REPORTS

         Severity Level 2 (SL2) is for reported Defects that significantly
         affects an IBM schedule or that make the performance or continued
         performance of any feature or function difficult and that cannot
         easily be circumvented or avoided on a temporary basis by the end user
         ("Severity Level 2 Defect" or "SL2 Defect"). NCD shall use its best
         efforts to provide corrections within 7 days of the earlier of NCD
         discovering the SL2 Defect or being informed of the possible SL2
         Defect, unless the parties agree that a different time schedule is
         appropriate in light of the circumstances of the Defect report.

         SEVERITY LEVEL 3 DEFECT REPORTS

         Severity Level 3 (SL3) is for reported Defects that are not critical
         in that performance can be continued without difficulty or loss of
         data by circumvention or avoidance by the end user ("Severity Level 3
         Defect" or "SL3 Defect").  NCD shall use its best efforts to provide
         corrections within 14 days of the earlier of NCD discovering the SL3
         Defect or being informed of the possible SL3 Defect, unless the
         parties agree that a different time schedule is appropriate in light
         of the circumstances of the Defect report.

         SEVERITY LEVEL 4 DEFECT REPORTS

         Severity Level 4 (SL4) is for reported Defects that are minor which
         can easily be avoided or circumvented by the end user ("Severity Level
         4 Defect" or "SL4 Defect"). NCD shall use best efforts to provide
         corrections within 21 days of the earlier of NCD discovering the SL4
         Defect or being informed of the possible SL4 Defect, unless the
         parties agree that a different time schedule is appropriate in light
         of the circumstances of the Defect report.

    Repeated and substantial failure by NCD to provide corrections according to
    the deadlines set forth above may be considered by IBM to be a material
    breach of the Alliance

--------------------------------------------------------------------------------
                                                           ARTICLE 3-PAGE 3 OF 6


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                      ARTICLE 3 PRODUCT SUPPORT AND MAINTENANCE

    Agreement.

    In the event the parties determine that a correction cannot be completed
    within the time deadlines set forth above, the parties will mutually agree
    to a time frame in which such correction will be completed.

    IBM shall be responsible for providing NCD all available Defect
    information, including reproduction of Defect symptoms and conditions if
    available and feasible.

    Once a correction is determined and developed for the Defect, NCD will
    ensure that the correction  is tested, and that there is no other
    additional Defects that are created as a result of the implementation of
    the correction.  NCD will also ensure that the implementation of this
    correction is included in all other Product and Derivative Works on the
    current and subsequent releases to prevent recurrence.

    NCD shall provide IBM with defect support contacts and phone numbers that
    are available 24 hours per day, 7 days per week for Severity Level 1 Defect
    reports.  IBM will utilize this 24/7 coverage as necessary for problems
    that IBM classifies as critical (Severity Level 1 Defects).  IBM contact
    with NCD for less severe problems (Severity Level 2, 3, and 4 Defects) will
    be NCD's normal business hours (8 a.m. to 5 p.m.).

    If IBM desires NCD to provide direct customer support for any of it's
    segments, this may be negotiated for a separate fee.

    NCD is responsible for its own expenses in diagnosing and fixing the
    Defects reported to NCD.


3.  EDUCATION REQUIREMENTS

    During the term of this Alliance Agreement, NCD shall provide education
    classes to IBM Personnel in IBM Level 2 and Level 3 support centers
    sufficient to provide such Personnel with competence in providing customer
    service and support for the Products and Deliverables.  Such instruction
    shall include one class in the United States, one class in IBM's Europe-
    Middle East-Africa sales geography (EMEA), and one class in IBM's
    Asia-Pacific geography (AP).  Such classes shall be conducted at upon
    schedules requested by IBM and agreed to by NCD. Class content shall be
    mutually agreed to by NCD and IBM.  NCD shall be responsible for payment
    for instructor time and all expenses for class materials and preparation
    for such classes.  IBM will reimburse NCD for

--------------------------------------------------------------------------------
                                                           ARTICLE 3-PAGE 4 OF 6


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                      ARTICLE 3 PRODUCT SUPPORT AND MAINTENANCE

    reasonable travel and lodging expenses incurred by NCD Personnel in
    teaching such classes in accordance with IBM's standard travel expense
    guidelines to be supplied to NCD by IBM.  IBM may request additional
    classroom instruction during the term of the Alliance Agreement, but NCD
    shall be paid on a reasonable fee basis, and reimbursed for all reasonable
    expenses for conducting such classes.


4.  MAINTENANCE MODIFICATIONS

    Throughout the term of this Article, NCD shall offer to provide to IBM at
    no additional charge all Maintenance Modifications. Such Maintenance
    Modifications shall be offered to IBM within a reasonable time period prior
    to the availability of any such Maintenance Modifications in NCD's own
    products to allow IBM to incorporate and make available such Maintenance
    Modifications in its Products.  Maintenance Modifications developed and
    offered by NCD and accepted by IBM shall be deemed Licensed Works.

    In the event IBM creates Maintenance Modifications to the Licensed Works
    during the term of this Article, IBM shall offer such Maintenance
    Modifications to NCD upon, or within a reasonably prompt time period after,
    the availability of such Maintenance Modification in IBM's Products.  IBM
    grants NCD a worldwide, paid up copyright license to use, execute,
    reproduce, display, perform, transfer, market, distribute, and to make
    Derivative Works of, such Maintenance Modifications offered by IBM and
    accepted by NCD.


5.  ADDITIONAL IMPLEMENTATION DETAILS

    Detailed procedures for implementing the  hardware and software service and
    support described by this Article, including but not limited to procedures
    for on-site and remote Defect determination, testing of Defect corrections,
    and delivery of Defect corrections, shall be discussed by the parties prior
    to GA, and any such implementation details agreed to shall be considered
    attachments to this Article. The parties recognize that their may be a
    separate set of detailed procedures for each IBM product division utilizing
    NCD for support and maintenance of the Products and Deliverables.


6.  TERM AND TERMINATION

    Unless otherwise agreed by the parties, NCD's obligations under this
    Article shall cease at the earlier of: (1) one year after IBM ceases
    marketing all Products, or (2) termination of the Alliance Agreement.  If
    IBM desires NCD to provide product support and maintenance under this
    Article beyond such date, the parties will negotiate in good faith

--------------------------------------------------------------------------------
                                                           ARTICLE 3-PAGE 5 OF 6


<PAGE>

                              IBM-NCD ALLIANCE AGREEMENT
                      ARTICLE 3 PRODUCT SUPPORT AND MAINTENANCE

    for a fee for such services that is based on NCD's expenditure of time and
    materials in providing such services.


IN WITNESS WHEREOF, each party has reviewed this Article and each party has
executed this Article by signature of its authorized representative.



NETWORK COMMUNICATION DEVICES, INC.         INTERNATIONAL BUSINESS MACHINES
                                            CORPORATION



Signature /s/ Lorraine hariton               Signature /s/ Bhawnesh C. Mathur
         --------------------------------             ------------------------
Printed Name  Lorraine Hariton              Printed Name  Bhawnesh C. Mathur
            -----------------------------                ---------------------
Printed Title  V.P. of Strategic Accounts   Printed Title Dir. of Procurement,
             ----------------------------   IBM Server Group
                                            ----------------------------------

Date     6/27/96                            Date     June 27, 1996
    -------------------------------------        -----------------------------



--------------------------------------------------------------------------------
                                                           ARTICLE 3-PAGE 6 of 6

<PAGE>
                           EXHIBIT INDEX


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following exhibits are filed herewith:

    Exhibit  2.2   Asset Purchase Agreement dated June 3, 1996 by and 
                   among the Registrant NCD Software Corporation and 
                   NetManage, Inc.
                   
                   Exhibits

                   Exhibit A       Certain Definitions
                   Exhibit B-1     Assignment and Assumption Contract
                   Exhibit B-2     Assignment and Assumption Contract
                   Exhibit C       NCD Disclosure Schedule(1)

                   Schedules

                   Schedule 1.1    Assets(1)
                   Schedule 1.1(6) Assumed Customer and Other Contracts(1)
                   Schedule 1.3(6) Assumed Liabilities
                   Schedule 1.5    Purchase Price Allocation(1)

    Exhibit 10.42  Alliance Agreement dated June 27, 1996 by and between the
                   Registrant and International Business Machines 
                   Corporation.(2)

                   Attachments

                   Attachment 1 to Article 2 - Packaging and Handling 
                         Supplies and Interplant Requirements
                   Attachment 2 to Article 2 - Electrical
                         Data Interchange/Electronic Funds Transfer Trading 
                         Partner Agreement 

   *Exhibit 11.1   Statement Regarding Computation of Shares Used in Per Share
                   Earnings Computations.

   *Exhibit 27     Financial Data Schedule.

    (1)  Exhibit not filed herewith is identified in this agreement.  
         The Company will furnish supplementally any omitted exhibit to 
         the Commission upon request.
    (2)  Confidential treatment has been requested as to a portion of this
         exhibit. Confidential portions have been omitted and filed 
         separately with the Securities and Exchange Commission.

(b) The Company filed no reports on Form 8-K during the three-month period
    ended June 30, 1996.

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* Previously Filed