onecle - California MCLE, Sample Contracts, Business Forms
Custom Search
Legal Resources
Business Contracts
MCLE Courses
Projects
Friends

printer-friendly

Sample Business Contracts

Home: Sample Business Contracts:

                            ASSET PURCHASE AGREEMENT

     This Asset Purchase Agreement (the "Agreement") is entered into as of April
13, 2000 ("Effective Date") by and between Copernicus Systems, Inc. (the
"Buyer") and Network Engines, Inc. (the "Seller").

     WHEREAS, the Seller desires to sell to the Buyer, and the Buyer desires to
purchase, all of Seller's assets relating to the Seller's P6000 and P6000EXP
product lines, as more fully described in Exhibit A hereto.

     NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, the Buyer and the Seller agree as follows:

1.  THE ASSETS.   Subject to the terms and conditions set forth herein, the
Seller hereby sells, assigns, transfers and delivers to the Buyer, and the Buyer
hereby purchases, acquires and takes assignment and delivery of, free and clear
of all liens and Encumbrances (as defined herein), all right, title and
ownership of the following assets of the Seller relating to Seller's P6000 and
P6000EXP Systems (collectively, the "Assets"):

  (a) those tangible assets relating to Seller's manufacture, testing, packaging
and fulfillment of P6000 and P6000EXP Systems which are listed on Schedule 1(a)
hereto (the "Tangible Assets"); and

  (b) all Seller's inventory of parts, subassemblies, components, finished goods
and other inventory of P6000 and P6000EXP Systems, which inventory is listed on
Schedule 1(b) hereto (the "Inventory"); and

  (c) those computer software programs of Seller known as P6000 Cluster Director
and P6000 Cluster Monitor, as more fully described on Schedule 1(c) hereto (the
"Software"), including all object code and source code therein, and all media of
Seller on which such computer programs reside, but excluding any and all third
party software that may work with, depend on or support the Software (which
excluded third party software includes, without limitation, all software
provided by Microsoft and InterVu); and

  (d) access to a copy of Seller's records relating to the Inventory and
Tangible Assets, including customer lists, supplier lists, bills of materials,
production schedules, shipping manifests, customs forms and similar records (the
"Records"); and

  (e) (i) all patent, copyright and trade secret rights of Seller in and to the
design and layout of the P6000 and P6000EXP Systems and the Software and (ii)
all trademark rights in the marks listed on Schedule 1(d) and all goodwill
therein (collectively, the "Intellectual Property").

Buyer shall obtain no right or interest in or to any other assets of Seller,
whether or not related, directly or indirectly, to the Assets.  In particular,
Buyer shall obtain no right or interest in or to any accounts receivable, cash,
employee benefit plans, leasehold interests, real estate or software or
technology other than the Software.
<PAGE>

2.  PURCHASE PRICE.

     (a)  In consideration hereof, Buyer will pay to the Seller:

          (i) $1.00 upon execution of this Agreement;

          (ii) 10% of sales of complete P6000 and P6000EXP Systems (or
          any successor or derivative system using a substantial portion of the
          intellectual property or software sold to Buyer hereunder
          ("Derivatives")) (the "Systems") manufactured from the Inventory;

          (iii) 10% of the Net Revenue for sales of upgrades or spare
          parts from the Inventory;

          (iv) 2% of the Net Revenue for sales of upgrades or spare
          parts relating to the System or Derivative from inventory that is
          purchased by Buyer not included in the Inventory;

          (v) $242 per System or Derivative sold to The Concorde Group;

          (vi) $300 per any System or Derivative sold to any other third party
          included in Section 2(a)(ii) above; provided however, that this shall
          not include new products, systems or designs created by Buyer or
          licensed by Buyer from any third party; and

          (vii)  the amount set forth in Section 4.

          "Net Revenue" per System shall be the amount actually received by the
          Buyer for each System, less refunds.

     (b)  If the Buyer transfers its ownership rights to, or exclusively
          licenses or leases, all or substantially all of the Tangible Assets or
          Software before the date twelve (12) months after the Effective Date,
          the Buyer will pay Seller 50% of the net proceeds  of such sale ("Net
          Proceeds").  If such sale occurs after the date twelve months from the
          Effective Date, but before the date two years from the Effective Date,
          the Buyer will pay the Seller 25% of such Net Proceeds.  If such sale
          occurs after the date two years from the Effective Date, Buyer will be
          entitled to 100% of such Net Proceeds.

3.  ASSUMPTION OF LIABILITIES.  Buyer hereby assumes the following liabilities
and obligations of the Seller (the "Assumed Liabilities"):

    (a) except as provided in Section 5 below, all warranty, support, repair,
replacement, maintenance and related liabilities and obligations of Seller with
respect to P6000 and P6000EXP (or predecessor) Systems sold or distributed by or
for Seller or Buyer, either prior to or after the Effective Date;
<PAGE>

    (b) all other liabilities and obligations relating to P6000 and P6000EXP (or
predecessor) Systems sold or distributed by or for Seller or Buyer, either prior
to or after the Effective Date, whether for alleged defects, failures, injury or
other damage, and whether sounding in negligence, warranty, strict liability or
any other cause of action;

    (c) all liabilities and obligations of Seller under the Contracts, including
all liability associated with the failure of Seller to obtain necessary consents
to assignment of the Contracts to Buyer; and

    (d) any liability with respect to the bulk sales laws of any state.

4.  LICENSE AND ROYALTY RATIFICATION.  Seller hereby acknowledges and agrees
that prior to the signing of this Agreement the Buyer had a limited exclusive
license to make, sell and use P6000 and P6000EXP Systems, subject to the
obligation to pay the royalty set forth in Section 2 above.  Buyer represents
and warrants to Seller that royalties in the aggregate amount of $4,010.44 are
accrued to date based on Buyer's activities prior to the Effective Date, and
Buyer shall remit such amount to Seller concurrently herewith.

5.  SUPPORT.

    (a) Buyer shall provide customer support, without charge, to existing
Seller customers of the System for Systems currently under warranty, for the
duration of their current warranty periods. To the extent that Buyer must obtain
any hardware from any third party to perform such warranty support, Seller shall
reimburse Buyer for its reasonable, documented out-of-pocket costs for such
parts.

    (b) Notwithstanding Buyer's obligation to provide warranty support
hereunder, Seller shall have the right, for customers designated by Seller, to
continue to provide first-line (initial response) support with respect to P6000
and P6000EXP Systems sold or distributed by Seller prior to the Effective Date.
In such cases, Buyer shall provide second line (technical help) support to
Seller's support personnel or to customers referred to Buyer by Seller's support
personnel at no charge to Seller.

6.  NO OTHER TECHNOLOGY.  Buyer waives any right, title and interest in and to
any of Seller's other technologies, except as set forth herein.

7.  LIABILITY

    (a) EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS SECTION 7, SELLER SELLS
THE ASSETS TO BUYER HEREUNDER "AS IS", "WHERE IS", ON A QUITCLAIM BASIS, WITHOUT
WARRANTY OR CONDITION OF ANY KIND, EXPRESS OR IMPLIED, WRITTEN OR ORAL; AND
SELLER HEREBY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES AND CONDITIONS,
INCLUDING, WITHOUT LIMIATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, TITLE AND NONINFRINGEMENT.

    (b) Buyer hereby agrees to defend, indemnify and hold Seller and its
officers, directors, shareholders, affiliates, partners and agents (the
"Indemnitees") harmless from and
<PAGE>

against any and all claims, damages, liabilities, losses and expenses incurred
in connection with the Assumed Liabilities. The Indemnitees shall be entitled,
at their expense, to be represented by counsel of their choosing in any action
described in this Section 7(b).

    (c) Under no circumstances will Seller be liable to Buyer for any cause
directly or indirectly relating to the Assets or the transfer thereof under this
Agreement for any consequential, incidental, indirect, exemplary or punitive
damages, no matter what the cause, even if Seller has been made aware of the
possibility of such damages.

    (d) Under no circumstances will Seller be liable to Buyer for direct damages
for any cause directly or indirectly relating to the Assets or the transfer
thereof under this Agreement in an amount greater than the total amount that
Buyer has paid to Seller under this Agreement during the preceding 12-month
period.

    (e) Organization of the Seller; Authority. The Seller is a corporation duly
        -------------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware. The Seller has all requisite power and authority to own and hold the
Assets owned or held by it. The Seller has all requisite power, authority and
capacity to execute and deliver this Agreement and to carry out all actions
required of it pursuant to the terms of this Agreement, and this Agreement has
been duly executed and delivered by the Seller and constitutes the legal, valid
and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms.

    (f) Title to Assets. The Seller is the lawful owner of, has good and valid
        ---------------
record and marketable title to, and has the full right to sell, convey,
transfer, assign and deliver the Inventory and Tangible Assets, without
restrictions of any kind. All of the Inventory and Tangible Assets are free and
clear of any security interests, liens, claims, charges, options, mortgages,
debts, leases (or subleases), conditional sales agreements, title retention
agreements, encumbrances of any kind or restrictions against the transfer or
assignment thereof (collectively, "Encumbrances").  To Seller's actual knowledge
(without having conducted any search or investigation) there are no filings in
any registry of deeds in any jurisdiction or under the Uniform Commercial Code
or similar statute in any jurisdiction showing the Seller as debtor which create
or perfect or which purport to create or perfect any Encumbrance in or on any of
the Assets.

8.  LICENSE.  Buyer hereby grants Seller a worldwide, perpetual, irrevocable,
non-exclusive, paid-up, royalty-free license to use the proprietary rights
included in the Assets for any purpose whatsoever.

9.  CONFIDENTIALITY.  The parties acknowledge and agree that as a result of
entering into this Agreement, each party will have access to certain of the
other party's Confidential Information, which for purposes of this Agreement
shall include: (a) the terms and conditions of this Agreement; (b) each party's
trade secrets, business plans, strategies, methods and/or practices; and (c)
other information relating to either party that is not generally known to the
public.  Notwithstanding the foregoing, the term "Confidential Information"
specifically excludes (1) information that is now in the public domain or
subsequently enters the public domain by publication or otherwise through no
action or fault of the other party; (2) information that is known to either
party without restriction prior to receipt from the other party, from its own
<PAGE>

independent sources as evidenced by such party's written records, and which was
not acquired, directly or indirectly, from the other party; (3) information that
either party receives from any third party having a legal right to transmit such
information, and not under any obligation to keep such information confidential;
and (4) information independently developed by either party's employees or
agents; provided however, that Seller acknowledges and agrees that following the
sale of the Assets, Seller will continue to treat as Confidential Information
all information relating to the Assets that it currently considers to be its
Confidential Information.  Each party also understands and agrees that
disclosure of that information could adversely affect the other party's
business.  Accordingly, the parties agree that each party shall: (i) restrict
disclosure of the other party's Confidential Information to its employees,
consultants or independent contractors with a need to know, (ii) not disclose
the other party's Confidential Information to any third party (other than its
legal, accounting, technical and/or business advisors) without the prior written
approval of the other party, and (iii) safeguard the confidentiality of the
Confidential Information by using at least the same physical and other security
measures as that party uses to protect its own Confidential Information.
Notwithstanding the foregoing, it shall not be a breach of this Agreement for
either party to disclose Confidential Information of the other party if required
to do so under law, in a judicial or other governmental investigation or
proceeding or pursuant to the rules of the Securities and Exchange Commission or
any stock exchange or listing system, provided the other party has been given
prior notice and the disclosing party has sought all reasonable safeguards
against widespread dissemination prior to such disclosure.

10.  AUDIT.  Seller shall have the right to audit the books and records of Buyer
relating solely to the arrangements contemplated in this Agreement in order to
verify the amounts owed and to be paid by Buyer to Seller hereunder; provided
that Seller may only conduct such audit twice per year and that Seller provide
Buyer at least 10 days prior written notice before conducting any such audit.
Seller shall be solely responsible for the cost of any such audit, unless the
audit discloses a discrepancy of greater than 10%, in which case Buyer will pay
the reasonable cost of the audit.

11.  BUYER'S ACKNOWLEDGEMENT

   Buyer hereby acknowledges that it has had ample opportunity to inspect and
review the Assets with its advisors, and that Buyer is satisfied with the
condition of the Assets and agrees that the consideration being paid by Buyer to
Seller hereunder is fair and reasonable in view of the condition of the Assets
and the disclaimers and limitations contained in Section 7.

12. GENERAL.

     (a) Expenses. All expenses of the preparation, execution and consummation
         --------
         of this Agreement and of the transactions contemplated hereby,
         including, without limitation, attorneys', accountants' and outside
         advisers' fees and disbursements, shall be borne by the party incurring
         such expenses.

     (b) Notices. All notices, demands and other communications hereunder shall
         -------
         be in writing or by written telecommunication, and shall be deemed to
         have been duly given if delivered personally or if mailed by certified
         mail, return receipt requested, postage prepaid, or sent by written
         telecommunication, as follows:
<PAGE>

                   If Buyer, to:

                   Cheryl Smith
                   Copernicus Systems, Inc.
                   135 King Street
                   Cohasset, MA  02025
                   (781) 383-1906

                   If to Seller, to:

                   Network Engines, Inc.

                   _____________________

                   _____________________

     (c) Entire Agreement. This Agreement contains the entire understanding of
         ----------------
         the parties, supersedes all prior agreements and understandings
         relating to the subject matter hereof and shall not be amended except
         by a written instrument hereafter signed by all of the parties hereto.

     (d) Governing Law. The validity and construction of this Agreement shall be
         -------------
         governed by the internal substantive laws of the Commonwealth of
         Massachusetts.

     (e) Sections and Section Headings. The headings of sections and subsections
         -----------------------------
         are for reference only and shall not limit or control the meaning
         thereof.

     (f) Assigns. This Agreement shall be binding upon and inure to the benefit
         -------
         of the heirs and successors of each of the parties. Neither this
         Agreement nor the obligations of any party hereunder shall be
         assignable or transferable by such party without the prior written
         consent of the other party hereto; provided, however, that nothing
         contained in this Section shall prevent a party, without the consent of
         the other party, from transferring or assigning this Agreement or its
         rights or obligations hereunder to another entity controlling, under
         the control of, or under common control with such party, provided that
         such assignee is financially capable of fulfilling the assigning
         party's responsibilities hereunder.

     (g) Further Assurances. From time to time, at the request of the Buyer and
         ------------------
         at Buyer's expense, the Seller shall execute and deliver such further
         instruments of conveyance and transfer and take such other actions as
         the Buyer may reasonably require more effectively to convey and
         transfer any of the Assets to the Buyer. The Seller and the Buyer shall
         also execute and deliver to the appropriate other party such other
         instruments as may be reasonably required in connection with the
         performance this Agreement and each shall take all such further actions
         as may be reasonably required to carry out the transactions
         contemplated by this Agreement.

<PAGE>

     (h) No Implied Rights or Remedies. Except as otherwise expressly provided
         -----------------------------
         herein, nothing herein expressed or implied is intended or shall be
         construed to confer upon or to give any person, firm or corporation,
         other than the Seller and the Buyer and their respective shareholders,
         any rights or remedies under or by reason of this Agreement.

     (i) Counterparts. This Agreement may be executed in multiple counterparts,
         ------------
         each of which shall be deemed an original, but all of which together
         shall constitute one and the same instrument.

     IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Agreement to be duly executed and delivered by their
respective duly authorized officers as an instrument under seal as of the date
and year first above written.


NETWORK ENGINES, INC.              COPERNICUS SYSTEMS, INC.

By:  Douglas G. Bryant             By: /s/ Cherl H. Smith
     -------------------------         ------------------------------

Date:  April 13, 2000                  Date:  April 13, 2000
      ------------------------               ------------------------

<PAGE>
                                                                       Exhibit A

P6000EXP
--------------------------------------------------------------------------------
Fault-tolerant Load-balanced Clustered Server


--------------------------      W I N N E R
Data                          B E S T   OF SHOW
Communications                          97
--------------------------

        LANTIMES
--------------------------    NETWORK INTEROP 97


                       [Picture of P6000EXP appears here]


                                                                         NETWORK
                                                                         ENGINES

                                          Torque for your Network
<PAGE>

Network Engines' P6000EXP allows you to capitalize on your PC based technology

<TABLE>
<S>                                      <C>
The latest generation of Network         MP700 Communications Ports
Engines' fault-tolerant load-balanced    Ethernet port o Modem port o Digital
clustered servers, the P6000EXP          input port ( ) Serial port o Relay output
combines complete PC compatibility with  port (4)
SNMP-enabled system monitoring and
high-density packaging, providing a
high-reliability environment for
enterprise mission-critical
applications.                            User-defined I/O panel

Key benefits from the P6000EXP platform

   Linear scalability:  100%
   performance increase each time you    Triple redundant 400 watt
   add another engine.                   hot-swappable Telco
                                         grade power supplies
   Clustering support:  With 10
   independent engines in a single
   chassis, clustering is easy and
   affordable.

   Load-balancing:  Eliminates single
   point of failure and ensures
   application response to users.                     [cross section of P6000EXP
                                                                   appears here]
   Fault-tolerance:  Maintenance
   environment to monitor all servers
   via a single user interface.
   Hot-swappable and redundant
   sub-systems, triple Telco grade 400   Scalable engines:
   watt power supplies that are          up to 10 processor engines with Pentium
   load-balanced and load-sharing.       class through Pentium Pro processors

The P6000EXP is ideally suited for use
in enterprise applications such as
internet/intranet, remote access,
thin-client, fax and email.              Optional RAID controller

Up to 10 fully functional independent
Pentium class engines can be configured
in the P6000EXP platform, with up to
twelve disk drives, CD-ROM and           Drive bay power and connections
maintenance processor.  Application      backplane: IDE, SCSI, RAID
engines currently available are:
Pentium through Dual Pentium Pro with
various speeds and memory
configurations.

All engines have onboard SVGA, two       Peripheral sharing subsystem for
serial, parallel, floppy disk, IDE,      floppy disk drive, CD-ROM, mouse,
keyboard, mouse and maintenance port     keyboard, video
support.
</TABLE>
<PAGE>

providing a platform that is clustered load-balanced and fault-tolerant.


Solid state, resettable short-circuit protection
for all backplane segments


Range of backplane choices, including ISA and ISA/PCI. Segmentable processor
backplane with power control, peripheral sharing and application monitoring
parts


Eight redundant cooling fans supply positive
pressures cooling


Easily accessible. Two screws for removal of
covers, for in rack maintenance & upgrades


                                        [cross section of P6000EXP appears here]


Only 6u, 10.5" tall
Standard 19" rack-mount packaging


Control panel with system status indicators


The MP700 embedded maintenance processor controls and monitors all major
P6000EXP subsystems, including power supply voltages, system temperatures,
system status, operating system states, application software states and external
resources


Configurable to twelve hot-swappable disk drives with
power protection and control. Support for SCSI, IDE, and
RAID
<PAGE>

S p e c i f i c a t i o n s


Application Processor Engine

CPU
Select up to 10 independent fully functional application processor engines.
Pentium class through Dual Pentium Pro processors.

Bus Interface
ISA and PCI configurations available.

Cache Memory
512Kbyte.

RAM
Supports up to 512 MB memory (fast page or EDO).

Real Time Clock
On-board real time clock and calendar.

Ethernet Interface
Integrated ethernet option for on-board NIC. (Pentium only).

IDE Interface
On-board support for four IDE devices.

SCSI Interface
Optional on-board SCS1-3 controller (Pentium Pro only).

SVGA Interface On-board SVGA with 1MB memory.

Serial Ports
Two RS232C ports, up to 115k baud, uses IRQ3 and IRQ4, 10 KV ESD protection.

Parallel Port
One bi-directional parallel port, jumper selectable IRQ5, IRQ7 or no IRQ.

Floppy Interface Supports two floppy drives.

Mouse Interface
Standard PS/2 interface.

Keyboard Interface
Standard PS/2 interface.

Battery
On-board battery with ten year life expectancy.

Support and Services

Warranty
One year warranty on all parts and labor, return to factory.

On-Site Service
Worldwide on-site service available.

System Enclosure

Backplane and Expansion
Ability to populate each segment as a complete PC with application processor
engine, memory and application specific cards.
Individual segment power control.
20 slot passive ISA/PCI compatible backplanes, segmented into a variety of
combinations.

System Cooling
Four fans for backplane cooling. Four fans for power supply cooling. Removable
and washable filter.

Disk Drive and Openings
Up to 12 3.5" low profile, hot-swappable drive bays.
Supports IDE, SCSI-2, SCS1-3, and RAID interfaces.

Power Supplies
Triple redundant hot-swappable Telco grade power supplies, 400 watts per power
supply, load-balancing.
Auto ranging AC input 94-284 AC 50-60 Hz. Optional wide range DC input, 24-72 V
DC.

Form Factor
19" rack mountable enclosure 6U (10.5") high.

Application Systems Monitoring
Local and remote reset and power control for individual application processors.
Monitoring support for major applications and operating systems. High-level
application scripting language for automated maintenance support and
notification.
SNMP support.
External resource switching and sensing.
External serial device support.

Operating Environment
Temperature: 0-60(degree)C.
Humidity: 5-95% relative humidity (non-condensing).

MTBF/MTTR
(greater than) 100,000 hours at 25(degree)C/(less than)5 minutes.

Agency Approvals
UL, CSA, CE.

Weight and Dimensions
Weight: -- 80lb. (147.2 Kgs.)
Dimensions: 18.8" wide x 10.5" high x 24.0" deep.
(447.52 mm x 266.7mm x 609.6mm).

Operating Systems and Windows (GUI) Support
MS-DOS, Windows, Windows 95, Windows NT, OS/2, QNX, SCO Unix, Interactive Unix,
Solaris, Netware and Vines.

Clustered Server Support
Network Engines load-balancer
Microsoft Cluster Services
Citrix WinFrame with load-balancing option
RightFax with load-balancing option

                            Network Engines, Inc.      Tel:  781-961-4400
Network                     61 Pleasant Street         Fax:  781-961-4508
Engines                     Randolph, MA  02368-4137   www.NetworkEngines.com
<PAGE>

                                                                   Schedule 1(a)


P6000 TEST EQUIPMENT

Power supply calibration test stand

Drive carrier test system

Power supply and back plane load tester

Maintenance Processor configuration and test system

Cable tester

                                       12
<PAGE>
                                                                   Schedule 1(b)

NETWORK ENGINES                  P6000 INVENTORY                         9/30/99

<TABLE>
<CAPTION>
NEI Part        Generic Part   Description                Manufacturer        Manufacturer         Distributor      Dist. Part
Number          Type                                                          Part Number                           Number
<S>             <C>            <C>                        <C>                 <C>                  <C>              <C>
100-1001-00     IC Logic       IC (N) Tri-state           Fairchild           DM74LS244N           DigiKey          DM74LS244N-ND
                               octal buffer               Semiconductor
100-1002-00     IC Logic       IC PWR L OFF V QUAD        National Semi       LM339AN              Digikey          LM339AN-ND
                               COMP 14 DIP
100-1003-00     IC Logic       IC ELECT CIRCUIT           Linear Technology   LTC1153CN8           DigiKey          LTC1153CN8-ND
                               BREAKR 8 DIP
100-1006-00     IC Logic       IC QUAD 2 IN OR            Fairchild           DM74LS32N            DigiKey          DM74LS32N-ND
                               GATE                       Semiconductor
100-1007-00     IC Logic       IC BCD to                  Motorola            74ls42               Newark           O8T SN74LS42N
                               Decimal Decoder
100-1008-00     IC Logic       IC 12 or 24 Bit            Fairchild           FST16211MTD          Arrow
                               Bus Switch                 Semiconductor
100-1009-00     IC Logic       IC SCSI TERMINATOR 9       LINFINITY           LX5212CPD            REPTRON          LX5212CDP
                               LINE, 16 PIN SIOC
100-1010-00     IC Logic       Octal buffer / line        Motorola            74LS244              DigiKey          DM74LS244WM-ND
                               driver 3 state
                               outputs
100-1011-00     IC Logic       Octal Bus                  Motorola            74LS245              DigiKey          DM74LS245WM-ND
                               Transceiver 3 state
                               outputs
100-1012-00     IC Logic       Itty Bitty RC              Micrel              MIC1555BM5 TS        Newark           83F5882
                               Timer
100-1013-00     IC Logic       80ma Low DropOut           Micrel              MIC5203-3.0BM4       Newark           83F6053
                               Regulator                                      TS
100-1014-00     IC             B69000,  Video
                               Accelerator with
                               integrated memory
100-1015-00     IC             74ALS245, BUFFER
100-1016-00     IC             74F32, OR GATE
100-1017-00     IC             PENTIUM CHIP-CLOCK
                               SYNTHESIZER
100-1018-00     IC             LTC 1753CT
100-1019-00     IC             74HCT14, Schmit
                               Inverter
100-1020-00     IC             74F07, BUFFER, OPEN
                               COLLECTOR
1001021-00      IC             74 LVC157, Quad
                               2T01, Data
                               selection/MUX
100-1022-00     IC             74ALS08, QUAD 2
                               I/P AND GATE
100-1023-00     IC             74LVC14,
                               INBERTER
100-1024-00     IC             P13B16224, 12/24 BIT
                               BUS EXCHANGE SWITCH
100-1025-00     IC             LT1587-1.5V,
                               REGULATOR
100-1026-00     IC             LT1587, VOLTAGE
                               REGULATOR, ADJUSTAVLE
100-1027-00     IC             82443GX, HOST                                                       Pioneer Std      FW82443GX
                               BRIDGE
100-1028-00     IC             ICS9179, CLOCK
                               BUFFER, LOW SKEW
100-1029-00     IC             LM79, HARDWARE                                                      Pioneer          LM79CCVF
                               MONITOR
100-1030-00     IC             82093, IOAIPC                                                       Pioneer          S82093AA IOAPIC
100-1031-00     IC             82558, ETHERNET                                                     Pioneer          SV825558B
                               MAC AND PHY
100-1032-00     IC             93C46, 3-WIRE,
                               SERIAL CMOS E2PROMS
100-1033-00     IC             FST 116211, 24
                               BIT BUS SWITCH
100-1034-00     IC             82B715, 12C BUS
                               EXTENDER
100-1035-00     IC             21152, PCI TO                                                       Pioneer          21152-AB
                               PCI BRIDGE                                                                           PCI-PCI bridge

<CAPTION>
NEI Part            Unit     Rack 1   Rack 2     Rack 3    Table    Back     Cube     Trailer  Total QTY        Extended Cost
Number              Cost                                            Room                       on Hand          @ 9/30/99
<S>                 <C>      <C>      <C>        <C>       <C>      <C>      <C>      <C>                 <C>     <C>
100-1001-00         $0.27
                                                                                                          -       $           -
100-1002-00         $0.75
                                                                                                          -       $           -
100-1003-00         $2.10
                                                                                                          -       $           -
100-1006-00         $0.58
                                                                                                          -       $           -
100-1007-00         $0.63
                                                                                                          -       $           -
100-1008-00         $2.40
                                                                                                          -       $           -
100-1009-00         $1.60
                                                                                                          -       $           -
100-1010-00         $0.64
                                                                                                          -       $           -
100-1011-00         $0.64
                                                                                                          -       $           -
100-1012-00         $0.72
                                                                                                          -       $           -
100-1013-00         $0.66
                                                                                                          -       $           -
100-1014-00         $32.71
                                                                                                          -       $           -
100-1015-00         $0.24
                                                                                                          -       $           -
100-1016-00         $0.08
                                                                                                          -       $           -
100-1017-00         $2.58
                                                                                                          -       $           -
100-1018-00         $2.95
                                                                                                          -       $           -
100-1019-00         $0.13
                                                                                                          -       $           -
100-1020-00         $0.42
                                                                                                          -       $           -
1001021-00          $0.28
                                                                                                          -       $           -
100-1022-00         $0.12
                                                                                                          -       $           -
100-1023-00         $0.22
                                                                                                          -       $           -
100-1024-00         $1.93
                                                                                                          -       $           -
100-1025-00         $3.35
                                                                                                          -       $           -
100-1026-00         $3.40
                                                                                                          -       $           -
100-1027-00         $54.72
                                                                                                          -       $           -
100-1028-00         $2.58
                                                                                                          -       $           -
100-1029-00         $5.55
                                                                                                          -       $           -
100-1030-00         $10.75
                                                                                                          -       $           -
100-1031-00         $23.50
                                                                                                          -       $           -
100-1032-00         $0.27
                                                                                                          -       $           -
100-1033-00         $1.40
                                                                                                          -       $           -
100-1034-00         $2.07
                                                                                                          -       $           -
100-1035-00         $14.30
                                                                                                          -       $           -
</TABLE>
<PAGE>

NETWORK ENGINES                  P6000 INVENTORY                         9/30/99

<TABLE>
<CAPTION>
NEI Part        Generic Part   Description                Manufacturer        Manufacturer         Distributor      Dist. Part
Number          Type                                                          Part Number                           Number
<S>             <C>            <C>                        <C>                 <C>                  <C>              <C>
100-1036-00     IC             82371EB, P11X4, PCI                                                 Pioneer          FW82371EB ISA
                               TO ISA/IDE                                                                           bridge
                               XECELARATOR
100-1037-00     IC             LTC 1153,
                               Auto-reset
                               electronic circuit
                               breaker
100-1038-00     IC             ISP1040B, SCSI
                               CONTROLLER
100-1039-00     IC             HM62832, 32KX8 HIGH
                               SPEED CMOS SRAM
100-1040-00     IC             ISP 1040B, SCSI
                               TERMINATOR
100-1041-00     IC             IT8671, SUPER
                               I/O CHIP
100-1042-00     IC             ITE8687, I/O
                               BUFFER
100-1043-00     IC             MAX 1617,
                               Remote/local
                               temperature sensor
100-1044-00     IC             LTC 1340, 3.3V
                               SWITCHER
100-1045-00     IC             LTC1326C, Micropower
                               trible supply monitor
100-1046-00     IC             ECP TERMINATION
                               NETWORK
100-1047-00     IC             STATIC RAM
100-1048-00     IC             LTC1326C, Micropower
                               trible supply monitor
100-1049-00     IC             82559, ETHERNET MAC                                                 Pioneer          GD82559 SL3HD
                               AND PHY, PBGA 196                                                                    Device
103-1001-00     IC             IC Serial EPROM            Xilinx                                                    XC1765-PD8C
                Unprogrammed   dip 8 Blank
103-1002-00     IC             IC FPGA Blank              Xilinx                                                    XC3064-160-PQFP
                Unprogrammed
103-1003-00     IC             IC 8 Bit                   scenix              SX28AC/SS            Parallax         SX28AC/SS
                Unprogrammed   Microcontroller
103-1004-00     IC             28F020, FLASH                                                       Pioneer          N28F020-150
                               MEMORY
103-1005-00     IC             8 BIT
                               MICROCONTROLLER
                               TQFP-48
103-1006-00     IC             8 BIT MPU
103-1007-00     IC             SPI SERIAL EEPROM
103-1008-00     IC             FLASH MEMORY
105-1001-00     IC CPU         CPU P586/233MMX W/         Intel                                    Tech Data
                               512K cache stand
                               alone processor for
                               ATX motherboard
105-1002-00     IC CPU         CPU P586/166MMX W/         Intel                                    Tech Data        390925
                               512K cache stand
                               alone processor for
                               ATX motherboard
105-1003-00     IC CPU         CPU P586/200MMX W/         Intel                                    Tech Data
                               512K cache stand
                               alone processor for
                               ATX motherboard
105-1004-00     IC CPU         PENTIUM II 400MHZ                                                   Pioneer
105-1005-00     IC CPU         PENTIUM II 450                                                      Pioneer
                               MHZ
110-1001-00     Simm / Dimm    Memory Flash Simm          Adastra             29F016 Flash
                                                                              5v 120ns Std T
110-1002-00     Simm / Dimm    MEMORY 72 pin SIMM         Qestec              128 MB EDO
                               module, gold, 32 x                             GOLD
                               32 MB, 5V, 60 ns,
                               EDO, for SBC's
110-1003-00     Simm / Dimm    MEMORY 72 pin SIMM         Qestec              128 MB EDO TIN
                               module, tin, 32 x
                               32, EDO, 5V, 60 ns
                               for motherboards
110-1004-00     Simm / Dimm    MEMORY 72 pin SIMM         Qestec              64 MB EDO TIN
                               module, tin, 16 x
                               32, EDO, 5V, 60 ns
                               for motherboards
110-1005-00     Simm / Dimm    MEMORY 72 pin SIMM         Qestec              32 MB EDO TIN
                               module, tin, 8 x 32,
                               EDO, 5V, 60 ns for
                               motherboards
110-1006-00     Simm / Dimm    MEMORY 72 pin SIMM         Qestec              8 MB EDO TIN
                               module, tin, 2 x 32,
                               EDO, 5V, 60 ns for
                               motherboards

<CAPTION>
NEI Part          Unit     Rack 1   Rack 2     Rack 3    Table    Back     Cube     Trailer  Total QTY        Extended Cost
Number            Cost                                            Room                       on Hand          @ 9/30/99
<S>               <C>      <C>      <C>        <C>       <C>      <C>      <C>      <C>                 <C>     <C>
100-1036-00       $9.78
                                                                                                        -       $           -
100-1037-00       $2.00
                                                                                                        -       $           -
100-1038-00       $41.00
                                                                                                        -       $           -
100-1039-00       $8.61
                                                                                                        -       $           -
100-1040-00       $2.19
                                                                                                        -       $           -
100-1041-00       $4.00
                                                                                                        -       $           -
100-1042-00       $4.00
                                                                                                        -       $           -
100-1043-00       $3.79
                                                                                                        -       $           -
100-1044-00       $3.25
                                                                                                        -       $           -
100-1045-00       $2.00
                                                                                                        -       $           -
100-1046-00       $0.81
                                                                                                        -       $           -
100-1047-00
                                                                                                        -       $           -
100-1048-00
                                                                                                        -       $           -
100-1049-00       $21.15
                                                                                                        -       $           -
103-1001-00       $3.71
                                                                                                        -       $           -
103-1002-00       $37.30
                                                                                                        -       $           -
103-1003-00       $4.70
                                                                                                        -       $           -
103-1004-00       $3.82
                                                                                                        -       $           -
103-1005-00
                                                                                                        -       $           -
103-1006-00
                                                                                                        -       $           -
103-1007-00
                                                                                                        -       $           -
103-1008-00
                                                                                                        -       $           -
105-1001-00       $287.00
                                                                                                        -       $           -
105-1002-00       $127.00
                                                                                                        -       $           -
105-1003-00
                                                                                                        -       $           -
105-1004-00       $380.00
                                                                                                        -       $           -
105-1005-00       $562.00
                                                                                                        -       $           -
110-1001-00       $91.00
                                                                                                        -       $           -
110-1002-00       $255.00  12
                                                                                                       12       $     3,060.00
110-1003-00       $340.00
                                                                                                        -       $           -
110-1004-00       $175.00
                                                                                                        -       $           -
110-1005-00       $55.00
                                                                                                        -       $           -
110-1006-00       $45.00
                                                                                                        -       $           -
</TABLE>
<PAGE>

NETWORK ENGINES                  P6000 INVENTORY                         9/30/99

<TABLE>
<CAPTION>
NEI Part        Generic Part   Description                Manufacturer        Manufacturer         Distributor      Dist. Part
Number          Type                                                          Part Number                           Number
<S>             <C>            <C>                        <C>                 <C>                  <C>              <C>
110-1007-00     Simm / Dimm    MEMORY 72 pin SIMM         Qestec              64 MB EDO GOLD
                               module, gold, 16 x
                               32MB, 5V, 60 ns,
                               EDO, for use in SBC's
110-1008-00     Simm / Dimm    MEMORY 72 pin SIMM,        Qestec              32MB EDO GOLD
                               module, gold, 8 x 32
                               MB, 5V, 60ns, EDO,
                               for use in SBC's
110-1009-00     Simm / Dimm    MEMORY 72 pin SIMM         Qestec              16MB EDO GOLD
                               module, gold, 4 x 32
                               MB, 5V, 60ns, EDO,
                               for use in SBC's
110-1010-00     Simm / Dimm    MEMORY 72 pin SIMM         Qestec              8MB EDO GOLD
                               module, gold, 2 x 32
                               MB, 5V, 60ns, EDO,
                               for use in SBC's
110-1011-00     Simm / Dimm    MEMORY 72 pin SIMM         Kingston            KTM-1X36L-60G        Adastra
                               module, single sided
                               1 x 36 MB 70ns, for
                               use in mp700 only
110-1012-00     Simm / Dimm    MEMORY 72 pin SIMM         Qestec              16 MB EDO TIN
                               module, tin, 4 x 32,
                               EDO, 5V, 60 ns for
                               motherboards
110-1013-00     Simm / Dimm    MEMORY 168 pin DIMM        Qestec              64 MB EDO GOLD
                               module, gold,
                               3.3V,EDO, 64MB
110-1014-00     Simm / Dimm    MEMORY 168 pin DIMM        Qestec              128 MB EDO
                               module, gold, 3.3V,                            GOLD
                               EDO, 128MB
110-1015-00     Simm / Dimm    MEMORY 168 pin DIMM        Qestec              256 MB EDO
                               module, gold, 3.3V,                            GOLD
                               EDO, 256MB
110-1016-00     Simm / Dimm    MEMORY 168pin DIMM         Dense-Pac           256MB SDRM
                               module, gold, sdram
                               PC100 256MB
110-1016-00     Simm / Dimm    MEMORY 168pin DIMM         Kentron             256MB SDRM
                               module, gold, sdram
                               PC100 256MB
110-1017-00     Simm / Dimm    MEMORY, 16mb dimm          DPT                 SM4000/16            Tech Data        220066
                               ecc FOR dpt Raid
                               Cache
110-1018-00     Simm / Dimm    MEMORY 168 pin DIMM        Qestec              128 MB SYNC
                               module, gold, 3.3V,                            GOLD
                               SYNC, 128MB
110-1019-00                    168 PIN 128MB PC 100
                               SDRAM DIMM
110-1020-00                    168 PIN 64MB PC 100
                               SDRAM DIMM
120-1001-00     capacitor      CAP 4.7UFD @ 25VDC         Panasonic           ECS-F1EE475K         DigiKey          P2047-ND
                               TANTALUM CAP
120-1002-00     capacitor      CAP .01UF 50V STACK        Panasonic           ECQ-V1H103JL         DigiKey          P4513-ND
                               METAL FILM
120-1003-00     capacitor      CAP .1UF 50V               Panasonic           ECQ-V1H104JL         DigiKey          P4525-ND
                               STACK METAL FILM
120-1004-00     capacitor      CAP  0.1 UF                Panasonic           ECQ-U2A104MV         Digikey          P4610-ND
                               ECQ-UV BOX TYPE
120-1005-00     capacitor      CAP 0.47 UF                Panasonic           ECQ-U2A474MV         Digikey          P4614-ND
                               ECQ-UV BOX TYPE
120-1006-00     capacitor      CAP 1.0 UF                 Panasonic           ECQ-U2A105MV         Digikey          P4616-ND
                               ECQ-UV BOX TYPE
120-1007-00     capacitor      CAP .0022UF UV             Panasonic           ECQ-U2A222MV         Digikey          P4621-ND
                               BOX TYPE
120-1008-00     capacitor      CAP .22MFD 50V STACK       Panasonic           ECQ-V1H224JL         DigiKey          P4667-ND
                               METAL FILM
120-1009-00     capacitor      CAP 560UF 25V HFQ          Panasonic           ECA-1EFQ561          DigiKey          P5706-ND
                               ALUM RADIAL CAP
120-1010-00     capacitor      CAP 1000UF 200V            Panasonic           ECO-S2DP102EA        Digikey          P6129-ND
                               ELECT TSUP
120-1011-00     capacitor      CAP ELECT 100UF            Panasonic           ECE-A1CKS101         DigiKey          P970-ND
                               16V KS RADIAL

<CAPTION>
NEI Part            Unit     Rack 1   Rack 2     Rack 3    Table    Back     Cube     Trailer       Total QTY        Extended Cost
Number              Cost                                            Room                            on Hand          @ 9/30/99
<S>                 <C>      <C>      <C>        <C>       <C>      <C>      <C>      <C>                   <C>      <C>
110-1007-00         $135.00  1
                                                                                                             1       $       135.00
110-1008-00         $40.00
                                                                                                             -       $           -
110-1009-00         $22.00   10
                                                                                                            10       $       220.00
110-1010-00         $45.00
                                                                                                             -       $           -
110-1011-00         $91.00   8
                                                                                                             8       $       728.00
110-1012-00         $22.00
                                                                                                             -       $           -
110-1013-00         $126.00  1
                                                                                                             1       $       126.00
110-1014-00         $276.00
                                                                                                             -       $           -
110-1015-00         $550.00
                                                                                                             -       $           -
110-1016-00         $550.00
                                                                                                             -       $           -
110-1016-00         $555.00
                                                                    6                                        6       $     3,330.00
110-1017-00         $809.57
                                                                                                             -       $           -
110-1018-00         $276.00
                                                                                                             -       $           -
110-1019-00         $250.00
                                                                                                             -       $           -
110-1020-00         $135.00
                                                                                                             -       $           -
120-1001-00         $0.23
                                                                                                             -       $           -
120-1002-00         $0.11
                                                                                                             -       $           -
120-1003-00         $0.15
                                                                                                             -       $           -
120-1004-00         $0.83
                                                                                                             -       $           -
120-1005-00         $2.05
                                                                                                             -       $           -
120-1006-00         $3.50
                                                                                                             -       $           -
120-1007-00         $0.61
                                                                                                             -       $           -
120-1008-00         $0.18
                                                                                                             -       $           -
120-1009-00         $0.53
                                                                                                             -       $           -
120-1010-00         $4.50
                                                                                                             -       $           -
120-1011-00         $0.25
                                                                                                             -       $           -
</TABLE>
<PAGE>

NETWORK ENGINES                  P6000 INVENTORY                         9/30/99

<TABLE>
<CAPTION>
NEI Part        Generic Part   Description                Manufacturer        Manufacturer         Distributor      Dist. Part
Number          Type                                                          Part Number                           Number
<S>             <C>            <C>                        <C>                 <C>                  <C>              <C>
120-1012-00     capacitor      CAP ELECT SM               NIC Components      NACE101M16V6.3X5.    NEWARK           91f6508
                               100UF, 16V                 INC
120-1013-00     capacitor      CAP 4.7UF 16V              Panasonic           ECS-T1CY475R         DIGIKEY          PCS3475CT-ND
                               TANT TE SERIES
120-1014-00     capacitor      CAP .18UF 16V PEN          Panasonic           ECW-U1C184JB         DIGIKEY          PCF1061CT-ND
                               FILM UF(B) SMD
120-1015-00     capacitor      CAP .01UF 50V              Panasonic           ECW-U1H103JB         DIGIKEY          PCF1046CT-ND
                               UF(B) FILM SMD
120-1016-00     capacitor      CAP .12UF 16V PEN          Panasonic           ECW-U1C124JB         DIGIKEY          PCF1059CT-ND
                               FILM UF(B) SMD
120-1017-00     capacitor      CAP 1800 UF 25V            Panasonic           ECA-1EFQ182L         DigiKey          P5714-ND
120-1018-00     capacitor      CAP 100 UF 16V             Panasonic           ECE-V1CA101          DigiKey          PCE-2043CT-ND
                               SMD VA SERIES
120-1019-00     capacitor      CAP HARRIS MOV             GERBER              V275LA20C
120-1020-00     capacitor      10UFD @ 10VDC              Panasonic           ECS-F1AE106K         DigiKey          P2026-ND
                               TANTALUM CAP
120-1021-00     capacitor      CAP .22UF 16V PEN          Panasonic           ECW-U1C224JB9        DigiKey          PCF1062TR-ND
                               FILM UF(B) SMD
120-1022-00     capacitor      CAP 47uf 16 vdc            Panasonic           ECS-FICE476          Digikey          P2042-ND
                               tantalum
120-1023-00     capacitor      CAP ELECT 100UF            Panasonic           ECE-A1CKA101         DigiKey          P833-ND
                               16V KA RADIAL
120-1024-00     capacitor      CAP .1 UF/50 V             Panasonic           ECU-V1H104KBW        DigiKey          PCC104BCT-ND
                               CERAMIC CHIP CAP
130-1001-00     resistor       RES 1.00K OHM 1/4W         Yageo               1K00                 DigiKey          1.00 KXBK-ND
                               1% METAL FILM                                  MF-1/4W-B 1%
130-1002-00     resistor       RES 1.00M OHM 1/4W         Yageo               1M00                 DigiKey          1.00 MXBK-ND
                               1% METAL FILM                                  MF-1/4W-B 1%
130-1003-00     resistor       RES 1.10K OHM 1/4W         Yageo               1K10                 Digikey          1.10kXBK-ND
                               1% METAL FILM                                  MF-1/4W-B 1%
130-1004-00     resistor       RES 1.58K OHM 1/4W         Yageo               1K58                 Digikey          1.58kXBK-ND
                               1% METAL FILM                                  MF-1/4W-B 1%
130-1005-00     resistor       RES 10M OHM 1/8W 5%        Yageo               10M CR-1/8W-B        DigiKey          10 MEBK-ND
                               CARBON FILM                                    5%
130-1006-00     resistor       RES 10.0K OHM 1/4W         Yageo               10K0                 DigiKey          10.0KXTR-ND
                               1% MF TAPE/REEL                                MF-1/4W-T 1%
130-1007-00     resistor       RES 10.0 OHM 1/4W 1%       Yageo               10E0                 DigiKey          10.0XBK-ND
                               METAL FILM                                     MF-1/4W-B 1%
130-1008-00     resistor       RES100K OHM 1/4W 1%        Yageo               100K                 DigiKey          100KXBK-ND
                               METAL FILM                                     MF-1/4W-B 1%
130-1009-00     resistor       RES 100K OHM 1/4W 1%       Yageo               100K                 DigiKey          100 KXBK-ND
                               METAL FILM                                     MF-1/4W-B 1%
130-1010-00     resistor       RES 12.4K OHM 1/4W         Yageo               12K4                 Digikey          12.4kXBK-ND
                               1% METAL FILM                                  MF-1/4W-B 1%
130-1011-00     resistor       RES 121K OHM 1/4W 1%       Yageo               121K                 DigiKey          121 KXBK-ND
                               METAL FILM                                     MF-1/4W-B 1%
130-1012-00     resistor       RES 13.0K OHM 1/4W         Yageo               13K0                 DigiKey          13.0 KXBK-ND
                               1% METAL FILM                                  MF-1/4W-B 1%
130-1013-00     resistor       RES 143 OHM 1/4W 1%        Yageo               143E                 Digikey          143XBK-ND
                               METAL FILM                                     MF-1/4W-B 1%
130-1014-00     resistor       RES 150K OHM 1/4W 1%       Yageo               150K                 DigiKey          150KXBK-ND
                               METAL FILM                                     MF-1/4W-B 1%
130-1015-00     resistor       RES 1.00K OHM 1/4W         Yageo               1K00                 DigiKey          1.00KXTR-ND
                               1% MF TAPE/REEL                                MF-1/4W-T 1%
130-1016-00     resistor       RES 243 OHM 1/4W 1%        Yageo               243E                 Digikey          243XBK-ND
                               METAL FILM                                     MF-1/4W-B 1%
130-1017-00     resistor       RES 332 OHM 1/4W 1%        Yageo               332E                 DigiKey          332 XBK-ND
                               METAL FILM                                     MF-1/4W-B 1%
130-1018-00     resistor       RES 100 OHM 3/8 SQ         Bourns              3386F-1-101          Digikey          3386F-101-ND
                               CERM ST SL POT

<CAPTION>
NEI Part           Unit     Rack 1   Rack 2     Rack 3    Table    Back     Cube     Trailer  Total QTY        Extended Cost
Number             Cost                                            Room                       on Hand          @ 9/30/99
<S>                <C>      <C>      <C>        <C>       <C>      <C>      <C>      <C>                 <C>     <C>
120-1012-00        $0.37
                                                                                                         -       $           -
120-1013-00        $0.33
                                                                                                         -       $           -
120-1014-00        $0.68
                                                                                                         -       $           -
120-1015-00        $0.40
                                                                                                         -       $           -
120-1016-00        $0.57
                                                                                                         -       $           -
120-1017-00        $1.63
                                                                                                         -       $           -
120-1018-00        $0.49
                                                                                                         -       $           -
120-1019-00        $0.79
                                                                                                         -       $           -
120-1020-00        $0.33
                                                                                                         -       $           -
120-1021-00        $0.34
                                                                                                         -       $           -
120-1022-00        $1.15
                                                                                                         -       $           -
120-1023-00        $0.11
                                                                                                         -       $           -
120-1024-00        $0.40
                                                                                                         -       $           -
130-1001-00        $0.04
                                                                                                         -       $           -
130-1002-00        $0.04
                                                                                                         -       $           -
130-1003-00        $0.04
                                                                                                         -       $           -
130-1004-00        $0.04
                                                                                                         -       $           -
130-1005-00        $0.02
                                                                                                         -       $           -
130-1006-00        $0.02
                                                                                                         -       $           -
130-1007-00        $0.04
                                                                                                         -       $           -
130-1008-00        $0.04
                                                                                                         -       $           -
130-1009-00        $0.04
                                                                                                         -       $           -
130-1010-00        $0.04
                                                                                                         -       $           -
130-1011-00        $0.04
                                                                                                         -       $           -
130-1012-00        $0.02
                                                                                                         -       $           -
130-1013-00        $0.04
                                                                                                         -       $           -
130-1014-00        $0.02
                                                                                                         -       $           -
130-1015-00        $0.02
                                                                                                         -       $           -
130-1016-00        $0.04
                                                                                                         -       $           -
130-1017-00        $0.04
                                                                                                         -       $           -
130-1018-00        $0.89
                                                                                                         -       $           -
</TABLE>
<PAGE>

NETWORK ENGINES                  P6000 INVENTORY                         9/30/99

<TABLE>
<CAPTION>
NEI Part        Generic Part   Description                Manufacturer        Manufacturer         Distributor      Dist. Part
Number          Type                                                          Part Number                           Number
<S>             <C>            <C>                        <C>                 <C>                  <C>              <C>
130-1019-00     resistor       RES 1.0K OHM 3/8 SQ        Bourns              3386F-1-102          Digikey          3386F-102-ND
                               CERM ST SL POT
130-1020-00     resistor       RES 10K OHM 3/8 SQ         Bourns              3386F-1-103          DigiKey          3386F-103-ND
                               CERM ST SL POT
130-1021-00     resistor       RES 100K OHM 3/8 SQ        Bourns              3386F-1-104          Digikey          3386F-104-ND
                               CERM ST SL POT
130-1022-00     resistor       RES 2.0K OHM 3/8 SQ        Bourns              3386F-1-202          Digikey          3386F-202-ND
                               CERM ST SL POT
130-1023-00     resistor       RES 100K OHM 3/8 SQ        Bourns              3386P-1-104          DigiKey          3386P-104-ND
                               CERM ST SL POT
130-1024-00     resistor       RES 4.7M OHM 1/8W 5%       Yageo               4M7 CR-1/8W-B        DigiKey          4.7 MEBK-ND
                               CARBON FILM                                    5%
130-1025-00     resistor       RES 4.7K OHM 1/4W 1%       Yageo               4K7 MF-1/4W-T        DigiKey          4.7KXTR-ND
                               MF TAPE/REEL                                   1%
130-1026-00     resistor       RES 432K OHM 1/4W 1%       Yageo               432K                 DigiKey          432 KXBK-ND
                               METAL FILM                                     MF-1/4W-B 1%
130-1027-00     resistor       RES 5.23K OHM 1/4W         Yageo               5K23                 Digikey          5.23kXBK-ND
                               1% METAL FILM                                  MF-1/4W-B 1%
130-1028-00     resistor       RES 51.1K OHM 1/4W         Yageo               51K1                 DigiKey          51.1KXBK-ND
                               1% METAL FILM                                  MF-1/4W-B 1%
130-1029-00     resistor       RES-NET 220 OHM            CTS                 761-3-R220           DigiKey          761-3-R220-ND
                               16DIP 8RES
130-1030-00     resistor       RES-NET 10K OHM            CTS                 770-101-R10K         DigiKey          770-101-R10K-ND
                               10PIN 9RES
130-1031-00     resistor       RES-NET 1K OHM             CTS                 770-101-R1K          DigiKey          770-101-R1K-ND
                               10PIN 9RES
130-1032-00     resistor       RES-NET 220 OHM            CTS                 770-103-R220         DigiKey          770-103-R220
                               10PIN 5RES
130-1033-00     resistor       RES LOB-3.0101%BP          IRC                 LOB-3.0101%BP        Newark    96F3616R0.01(less than)
130-1034-00     resistor       RES LOB-1.0301%BP          IRC                 LOB-1.0301%BP        Newark    96F3617R0.03(less than)
130-1035-00     resistor       RES LOB-1.0501%BP          IRC                 LOB-1.0501%BP        Newark    96F3617R0.05(less than)
130-1036-00     resistor       RES LOB-1.0701%BP          IRC                 LOB-1.0701%BP        Newark    96F3617R0.07(less than)
130-1037-00     resistor       RES LOB-3.0051%BP          IRC                 LOB-3.0051%BP        Newark           96F6782
130-1038-00     resistor       RES SMT                    SPRAGUE             WSR2 R020FRE4        Newark           01F799
                               .455X.275 .02
                               OHM 2W
130-1039-00     resistor       RES SMT                    SPRAGUE             WSR2 R0205RE4        Newark           01F797
                               .455X.276 .005
                               OHM 2W
130-1040-00     resistor       RES 10.0K OHM              Panasonic           ERJ-8ENF1002         DigiKey          P10.0KFCT-ND
                               1/8W 1% 1206 SMD
130-1041-00     resistor       RES 150K OHM               Panasonic           ERJ-8ENF1503         DigiKey          P150KFCT-ND
                               1/8W 1% 1206 SMD
130-1042-00     resistor       RES 100K OHM               Panasonic           ERJ-8ENF1003         DigiKey          P100KFCT-ND
                               1/8W 1% 1206 SMD
130-1043-00     resistor       RES 1.00K OHM              Panasonic           ERJ-8ENF1001         DigiKey          P1.00KFCT-ND
                               1/8W 1% 1206 SMD
130-1044-00     resistor       RES 332 OHM 1/8W           Panasonic           ERJ-8ENF3320         DigiKey          P332FCT-ND
                               1% 1206 SMD
130-1045-00     resistor       RES LOB-1-020                                                       NEWARK           96F3617R0.02
                               1%BP
130-1046-00     resistor       RES LOB-3-020                                                       NEWARK           96F3616R0.02
                               1%BP
130-1047-00     resistor       RES LOB-3-030                                                       Newark           96F3616R0.03
                               1%BP
130-1048-00     resistor       RES 100K OHM 3/8 SQ        Bourns              3386F-104            DIGIKEY          3386F-104-ND
                               CERAMIC SL POT
130-1049-00     resistor       RES 2.0K OHM 3/8 SQ        Bourns              3386F-202            DIGIKEY          3386F-202-ND
                               CERAMIC ST SL POT
130-1050-00     resistor       RES 499K OHM               Yageo               499K                 DIGIKEY          499KXTR-ND
                               1/4W 1% MF                                     MF-1/4W-T 1%

<CAPTION>
NEI Part           Unit     Rack 1   Rack 2     Rack 3    Table    Back     Cube     Trailer  Total QTY        Extended Cost
Number             Cost                                            Room                       on Hand          @ 9/30/99
<S>                <C>      <C>      <C>        <C>       <C>      <C>      <C>      <C>                 <C>     <C>
130-1019-00        $0.89
                                                                                                         -       $           -
130-1020-00        $0.89
                                                                                                         -       $           -
130-1021-00        $0.89
                                                                                                         -       $           -
130-1022-00        $0.89
                                                                                                         -       $           -
130-1023-00        $0.89
                                                                                                         -       $           -
130-1024-00        $0.30
                                                                                                         -       $           -
130-1025-00        $0.02
                                                                                                         -       $           -
130-1026-00        $0.02
                                                                                                         -       $           -
130-1027-00        $0.04
                                                                                                         -       $           -
130-1028-00        $0.04
                                                                                                         -       $           -
130-1029-00        $0.35
                                                                                                         -       $           -
130-1030-00        $0.15
                                                                                                         -       $           -
130-1031-00        $0.15
                                                                                                         -       $           -
130-1032-00        $0.26
                                                                                                         -       $           -
130-1033-00        $1.19
                                                                                                         -       $           -
130-1034-00        $1.19
                                                                                                         -       $           -
130-1035-00        $1.19
                                                                                                         -       $           -
130-1036-00        $1.19
                                                                                                         -       $           -
130-1037-00        $0.74
                                                                                                         -       $           -
130-1038-00        $1.37
                                                                                                         -       $           -
130-1039-00        $1.37
                                                                                                         -       $           -
130-1040-00        $0.39
                                                                                                         -       $           -
130-1041-00        $0.39
                                                                                                         -       $           -
130-1042-00        $0.39
                                                                                                         -       $           -
130-1043-00        $0.39
                                                                                                         -       $           -
130-1044-00        $0.39
                                                                                                         -       $           -
130-1045-00        $1.21
                                                                                                         -       $           -
130-1046-00        $1.18
                                                                                                         -       $           -
130-1047-00        $1.18
                                                                                                         -       $           -
130-1048-00        $1.00
                                                                                                         -       $           -
130-1049-00        $1.00
                                                                                                         -       $           -
130-1050-00        $0.02
                                                                                                         -       $           -
</TABLE>
<PAGE>

NETWORK ENGINES                  P6000 INVENTORY                         9/30/99

<TABLE>
<CAPTION>
NEI Part        Generic Part   Description                Manufacturer        Manufacturer         Distributor     Dist. Part
Number          Type                                                          Part Number                          Number
<S>             <C>            <C>                        <C>                 <C>                  <C>             <C>
130-1051-00     resistor       RES 4.75k OHM              Yageo               4K75                 DigiKey         4.75KXTR-ND
                               1/4W 1% MF                                     MF-1/4W-T 1%
130-1052-00     resistor       RES 1.58K OHM              Yageo               1K58                 DigiKey         1.58KXBK-ND
                               1/4W 1% MF                                     MF-1/4W-B 1%
130-1053-00     resistor       RES 121 OHM 1/4W           Yageo               121E                 Digikey         121XBK-ND
                               1%                                             MF-1/4W-B 1%
130-1054-00     resistor       RES SMT                    SPRAGUE             WSR2 R010FRE4        Newark
                               .455X.275 .01
                               OHM 2W
130-1055-00     resistor       SMT 1.0M OHM
                               1/8W 1206 SMD
140-1001-00     DIODE          DIODE 100V 500MW           Diodes Inc.         1N4148               DigiKey         1N4148CT-ND
                               FAST SWITCHING
140-1002-00     DIODE          DIODE 15V 5%               Diodes Inc.         1N5245B              Digikey         1N5245BCT-ND
                               500MW ZENER
140-1003-00     DIODE          DIODE LED BAR GRAPH        Lite-On Inc         LTA-1000G            DigiKey         LT1067-ND
                               10 SEGMENT GREEN
140-1004-00     DIODE          DIODE LED GREEN            Lite-On Inc         LTL-93BGA1           DigiKey         LT1073-ND
                               DIFFUSED SUB-MINI
140-1005-00     DIODE          DIODE LED GREEN DIFF       Lite-On Inc         LTL-709L             Digikey         LT1086-ND
                               1.8 MM DOT POINT
140-1006-00     DIODE          DIODE LED 3MM PC           Lumex Opto          SSF-LXH103GD         DigiKey         LU20115-ND
                               MNT GRN
140-1007-00     DIODE          DIODE LED 3MM PC           Lumex Opto          SSF-LXH103YD         DigiKey         LU20117-ND
                               MNT YEL
140-1008-00     DIODE          DIODE LED BICOLOR          Lumex Opto          SSL-LX3059IGW        DigiKey         LU204615-ND
                               RED/GRN WHT DIFF T-1
140-1009-00     DIODE          DIODE LED 1 DIGIT          Panasonic           LN516GK              DigiKey         P352-ND
                               GREEN COMMON CATHODE
140-1010-00     DIODE          DIODE RECTIFIER 1          Diodes Inc.         1N4001               DigiKey         1N4001CT-ND
                               AMP 50 PIV SILICON
140-1011-00     DIODE          DIODE RECTIFIER 1AMP       Diodes Inc.         1N4004               Digikey         1N4004CT-ND
                               400 PIV SILICON
140-1012-00     DIODE          DIODE RECTIFIER 1.0A       Diodes Inc.         1N5817               Digikey         1N5817CT-ND
                               20V SCHOTTKY BARRIER
140-1013-00     DIODE          DIODE RECTIFIER 3.0A       Diodes Inc.         1N5822               Digikey         1N5822CT-ND
                               40V SCHOTTKY BARRIER
140-1014-00     DIODE          DIODE RECTIFIER            International       80SQ045              Digikey         80SQ045-ND
                               SCHOTTKY 45V 8A            Rectifier
                               DO-204AR
140-1015-00     DIODE          DIODE SURG ARRESTER        Wickmann            13931-N230           Digikey         WK6005CT-ND
                               230V GASTUBE 2LEAD         USA                 CG2-230L
                                                          CP Clare
140-1016-00     DIODE          DIODE LED GREEN            LITE-ON INC         LTL-94PGK            DigiKey         LT1120CT-ND
                               CLEAR LENS SMD
140-1017-00     DIODE          DIODE Elect circuit        BELL                LTC1153CN8           DigiKey         LTC1153CN8-ND
                               breaker 8 PIN DIP
140-1018-00     DIODE          DIODE 12V 410MW            Diodes Inc.         BZT52-C12DI          Digikey         BZT52-C12DICT-ND
                               ZENER SMD
140-1019-00     DIODE          Diode Small Sig            MICROSEMI           DL4148               DigiKey         DL4148MSCT-ND
                               SMT, 1N4148
140-1020-00     DIODE          DIODE RECTIFIER 1A         MICROSEMI           DL4001               DigiKey         DL4001MSCT-ND
                               50V SMT MELF
140-1021-00     DIODE          DIODE ZENER 10V                                                     Digikey         1N5240BMCT-ND
                               5% 0.5W
140-1022-00     DIODE          DIODE 15V 80A                                                       ARROW           85CNQ15
                               RECTIFIER
140-1023-00     DIODE          DIODE                                                                               65F1459
140-1024-00     DIODE          DIODE Converter            Vicor               M002838
                               30a 30v
                               Rectifier
140-1025-00     DIODE          DIODE LED T1               Lite-On Inc         LTL-4236N            DigiKey         LT1144-ND
                               Green Clear
140-1026-00     DIODE          DIODE LED 3mm red          Lite-On Inc         LTL-4222N            DigiKey         LT1140-ND
                               high eff transparent
140-1027-00     DIODE          DIODE Elect                BELL                LTC1153CS8           DigiKey         LTC1153CS8-ND
                               circuit breaker
                               8 SO
140-1028-00     DIODE          DIODE SCHOT RECT 1A        MICROSEMI           SMB5817              DigiKey         SMB5817MSCT-ND
                               20V SMT SMBJ(SK12)

<CAPTION>
NEI Part           Unit     Rack 1   Rack 2     Rack 3    Table    Back     Cube     Trailer  Total QTY        Extended Cost
Number             Cost                                            Room                       on Hand          @ 9/30/99
<S>                <C>      <C>      <C>        <C>       <C>      <C>      <C>      <C>                 <C>     <C>
130-1051-00        $0.02
                                                                                                         -       $           -
130-1052-00        $0.11
                                                                                                         -       $           -
130-1053-00        $0.11
                                                                                                         -       $           -
130-1054-00
                                                                                                         -       $           -
130-1055-00        $0.04
                                                                                                         -       $           -
140-1001-00        $0.04
                                                                                                         -       $           -
140-1002-00        $1.10
                                                                                                         -       $           -
140-1003-00        $1.83
                                                                                                         -       $           -
140-1004-00        $0.18
                                                                                                         -       $           -
140-1005-00        $0.18
                                                                                                         -       $           -
140-1006-00        $0.23
                                                                                                         -       $           -
140-1007-00        $0.23
                                                                                                         -       $           -
140-1008-00        $0.63
                                                                                                         -       $           -
140-1009-00        $2.03
                                                                                                         -       $           -
140-1010-00        $0.48
                                                                                                         -       $           -
140-1011-00        $0.06
                                                                                                         -       $           -
140-1012-00        $0.47
                                                                                                         -       $           -
140-1013-00        $0.91
                                                                                                         -       $           -
140-1014-00        $1.44
                                                                                                         -       $           -
140-1015-00        $2.83
                                                                                                         -       $           -
140-1016-00        $0.24
                                                                                                         -       $           -
140-1017-00        $3.25
                                                                                                         -       $           -
140-1018-00        $0.23
                                                                                                         -       $           -
140-1019-00        $0.11
                                                                                                         -       $           -
140-1020-00        $0.20
                                                                                                         -       $           -
140-1021-00        $0.11
                                                                                                         -       $           -
140-1022-00        $7.50
                                                                                                         -       $           -
140-1023-00
                                                                                                         -       $           -
140-1024-00        $3.20
                                                                                                         -       $           -
140-1025-00        $0.23
                                                                                                         -       $           -
140-1026-00        $0.23
                                                                                                         -       $           -
140-1027-00        $2.25
                                                                                                         -       $           -
140-1028-00        $0.36
                                                                                                         -       $           -
</TABLE>
<PAGE>

NETWORK ENGINES                  P6000 INVENTORY                         9/30/99

<TABLE>
<CAPTION>
NEI Part        Generic Part   Description                Manufacturer        Manufacturer         Distributor      Dist. Part
Number          Type                                                          Part Number                           Number
<S>             <C>            <C>                        <C>                 <C>                  <C>              <C>
140-1029-00     DIODE          DIODE Dual Schottky                                                 DigiKey          BAT54CCT-ND
                               Diode, common cathode
140-1030-00     DIODE          DIODE Dual Schottky                                                 DigiKey          BAT54SCT-ND
                               Diode, series conn
140-1031-00     DIODE          DIODE LED
                               YELLOW/YELLOW PC
                               MOUNT
140-1032-00     DIODE          DIODE LED GREEN
                               CLEAR LENS SMT
140-1033-00     DIODE          DIODE LED YELLOW
                               CLEAR LENS SMT
140-1034-00     DUAL           LED RED CLEAR
                               LENS SMT
141-1001-00     TRANSISTOR     TRANSISTOR FET 60V         Zetec Inc.          2N7000P              DigiKey          2N7000P-ND
                               0.2A N-CHAN DMOS
                               TO-92
141-1002-00     TRANSISTOR     TRANSISTOR FET             Temic Siliconix                          Bell Ind         SI4435DY
                               S14435DY
141-1003-00     TRANSISTOR     TRANSISTOR FET             Temic Siliconix                          Bell Ind         SI4410DY
                               SI4410DY
141-1004-00     TRANSISTOR     TRANSISTOR                 QT Opto             CNY17-4.300          Digikey          CNY17-4ZQT-ND
                               OPTOISOLATOR
141-1005-00     TRANSISTOR     TRANSISTOR NPN SS GP       Fairchild           PN2222               DigiKey          PN2222-ND
                               (TO-92 CASE)S
141-1006-00     TRANSISTOR     TRANSISTOR FET N           Harris              HUF75345S3S          GERBER
                               CHANNEL ENHANCEMENT
                               MODE TMOS
141-1007-00     TRANSISTOR     TRANSISTOR FET MOS         BELL                SI9939DY
                               DUAL CHANNEL
141-1008-00     TRANSISTOR     TRANSISTOR FET             BELL                SI442DDY
                               SI442DDY
141-1009-00     TRANSISTOR     DUPLICATE OF               BELL                SI9939DY
                               141-1009-00 DO NOT
                               USE
142-1001-00     REGULATOR      REGULATOR VOLTAGE  3       National Semi       LM317LZ              Digikey          LM317LZ-ND
                               TERM POS ADJ  100M
                               TO92
142-1002-00     REGULATOR      REGULATOR VOLTAGE  3       National Semi       LM337T               Digikey          LM337T-ND
                               TERM ADJ. NEG 1.5AMP
142-1003-00     REGULATOR      Regulator                  Maxim               MAX775CPA            Arrow            MAX775CPA
                               Switching
142-1004-00     REGULATOR      REGULATOR Switching        Maxim               MAX775SEA            Arrow            MAX775SEA
                               power supply
                               controller
142-1005-00     REGULATOR      REGULATOR IC,              Maxim               MAX8215CPD           Arrow            MAX8215CPD
                               Interface Comparator
142-1006-00     REGULATOR      REGULATOR                  BELL                MAX472CPA
                               CURRENT AMP
142-1007-00     REGULATOR      REGULATOR VRM FOR          RAYTHEON            1P518679
                               AMD K6-200
142-1008-00     REGULATOR      REGULATOR                  BELL                MAX774CPA            DigiKey          MAX774CPA
                               SWITCHING
150-1001-00     OSCILLATOR     OSC 16.0000MHZ             CTS                 MX045-16.0000        DigiKey          CTX116-ND
                               CMOS/TTL FULLSIZE
151-1001-00     RELAY          RELAY SPST 5V DIP          Hamlin Inc.         HE721A0510           DigiKey          HE101-ND
                               REED W/DIODE
155-1001-00
160-1001-00     FUSE           FUSE POLYSWITCH RUE        Raychem Corp        RUE300               DigiKey          RUE300-ND
                               SERIES 3.0 AMPS
160-1002-00     FUSE           FUSE HOLDER TR-5           Wickmann USA        19560                Digikey          WK0001-ND
                               MACH CONTACTS
160-1003-00     FUSE           FUSE 6.30A FAST            Wickmann            19193-066            Digikey          WK1066-ND
                               ACTING 5 X 20MM            USA                 19649
                                                          FUSE UNLIMITED
160-1004-00     FUSE           FUSE POLYSWITCH RUE        Raychem Corp        RUE400               DigiKey          RUE400-ND
                               SERIES 4.0 AMPS
160-1005-00     FUSE           Fuse Block 5 x             Wickmann USA        19649                DigiKey          WK0011-ND
                               20 mm PC Mount
160-1006-00     FUSE           FUSE Poly Fuse PTC         Littlefuse Inc.     1812L110PR           DigiKey          F2152TR-ND
                               1.1A 6VDC RESETTABLE
                               1812L
170-1001-00     INDUCTOR       INDUCTOR Filter            Corcom                                   Gerber           6ED4
                               line IEC

<CAPTION>
NEI Part           Unit     Rack 1   Rack 2     Rack 3    Table    Back     Cube     Trailer  Total QTY          Extended Cost
Number             Cost                                            Room                       on Hand            @ 9/30/99
<S>                <C>      <C>      <C>        <C>       <C>      <C>      <C>      <C>                 <C>     <C>
140-1029-00        $0.42
                                                                                                         -       $           -
140-1030-00        $0.42
                                                                                                         -       $           -
140-1031-00        $1.51
                                                                                                         -       $           -
140-1032-00        $0.24
                                                                                                         -       $           -
140-1033-00        $0.04
                                                                                                         -       $           -
140-1034-00        $0.36
                                                                                                         -       $           -
141-1001-00        $0.30
                                                                                                         -       $           -
141-1002-00        $2.75
                                                                                                         -       $           -
141-1003-00        $1.60
                                                                                                         -       $           -
141-1004-00        $0.52
                                                                                                         -       $           -
141-1005-00        $0.08
                                                                                                         -       $           -
141-1006-00        $2.02
                                                                                                         -       $           -
141-1007-00        $1.79
                                                                                                         -       $           -
141-1008-00        $1.27
                                                                                                         -       $           -
141-1009-00
                                                                                                         -       $           -
142-1001-00        $0.68
                                                                                                         -       $           -
142-1002-00        $1.55
                                                                                                         -       $           -
142-1003-00        $2.45
                                                                                                         -       $           -
142-1004-00        $4.41
                                                                                                         -       $           -
142-1005-00        $2.20
                                                                                                         -       $           -
142-1006-00        $2.25
                                                                                                         -       $           -
142-1007-00        $17.24
                                                                                                         -       $           -
142-1008-00        $2.40
                                                                                                         -       $           -
150-1001-00        $2.31
                                                                                                         -       $           -
151-1001-00        $1.66
                                                                                                         -       $           -
155-1001-00
                                                                                                         -       $           -
160-1001-00        $0.99
                                                                                                         -       $           -
160-1002-00        $0.51
                                                                                                         -       $           -
160-1003-00        $0.25
                                                                                                         -       $           -
160-1004-00        $0.83
                                                                                                         -       $           -
160-1005-00        $0.21
                                                                                                         -       $           -
160-1006-00        $0.41
                                                                                                         -       $           -
170-1001-00        $6.97
                                                                                                         -       $           -
</TABLE>
<PAGE>

NETWORK ENGINES                  P6000 INVENTORY                         9/30/99

<TABLE>
<CAPTION>
NEI Part        Generic Part   Description                Manufacturer        Manufacturer         Distributor      Dist. Part
Number          Type                                                          Part Number                           Number
<S>             <C>            <C>                        <C>                 <C>                  <C>              <C>
170-1002-00     INDUCTOR       INDUCTOR 2MH COMMON        Magnatek            CMT908-V1            Digikey          10543-ND
                               MODE VERT
170-1003-00     INDUCTOR       INDUCTOR TOROID 50UH       J W Miller Inc.     5711                 Digikey          M5711-ND
                               HIGH CURRENT
170-1004-00     INDUCTOR       INDUCTOR                   Transmag            TM801
170-1005-00     INDUCTOR       INDUCTOR LINE              CORCOM              6ED4C
                               FILTER
171-1001-00     SPEAKER        Sonalert II                Mallory             MSR320               Newark           93F4908
171-1002-00
172-1001-00     SWITCH         SWITCH SPST DIP            CTS                 208-4                DigiKey          CT2084-ND
                               TIN
172-1002-00     SWITCH         SWITCH SPST PC MT          E-Switch            320E1-1-5            DigiKey          EG1305-ND
                               MOM SQUARE RED
172-1003-00     SWITCH         SWITCH PC MT SPST          E-Switch            320.01E1-1-8         DigiKey          EG1328-ND
                               MOM FLT SQ WHT
172-1004-00     SWITCH         SWITCH SLIDE  SPDT         E-Switch            EG1213               DigiKey          EG1906-ND
                               RT ANGLE 30V
172-1005-00     SWITCH         SWITCH POWER P1000 /       E-Switch            RA1066AFX            DigiKey          EG1504-ND
                               2000 SWITCH ROCKER
                               SPST 10A BLK
172-1006-00     SWITCH         SWITCH RESET P1000 /       E-Switch            PS1057A-RED          DigiKey          EG2045-ND
                               2000 PUSHBUTTON
                               SWITCH SPST MOM RED
172-1007-00     SWITCH         SWITCH P2000 /
                               5000
172-1008-00     SWITCH         SWITCH 8                                       435802-9
                               POSITION DIP
172-1009-00     SWITCH         SWITCH PC MOUNT SPST       E-Switch            320E1-1-8            DigiKey          EG1308-ND
                               MOM SQ WHT
172-1010-00     SWITCH         SWITCH 4 position ST                                                Jameco           139002
                               DIP TIN, low profile
172-1011-00     SWITCH         MOM KEY, GULL
                               WING SLD SMD
172-1014-00     SWITCH         ASSEMBLY, P7000
                               AC PWR
180-1001-00     Connector /    CONNECTOR HEADER           3M                  2510-6002UB          Digikey          MHB10K-ND
                contact        SHROUDED 10 POS
                               STRAIGHT
180-1002-00     Connector /    CONNECTOR HEADER           3M                  2516-6002UB          DigiKey          MHB16K-ND
                contact        SHROUDED 16 POS
                               STRAIGHT
180-1003-00     Connector /    CONNECTOR HEADER           3M                  2540-6002UB          DigiKey          MHB40K-ND
                contact        SHROUDED 40 POS
                               STRAIGHT
180-1004-00     Connector /    CONNECTOR HEADER           3M                  2550-6002UB          DigiKey          MHB50K-ND
                contact        SHROUDED 50 POS
                               STRAIGHT
180-1005-00     Connector /    CONNECTOR 40 pin           AMP                 1-746610-9           Glynn            FTR-40-T
                contact        male transition
180-1006-00     Connector /    CONNECTOR HEADER 3         Molex               22-23-2031           DigiKey          WM4201-ND
                contact        CIR.100 STR FRICT
                               LOCK
180-1007-00     Connector /    CONNECTOR HEADER           AMP                 350211-1             DigiKey          A1212-ND
                contact        4-PIN PCB ASSEMBLY
                               TIN
180-1008-00     Connector /    CONNECTOR 8 PIN DIP        AMP                 2-640463-3           DigiKey          A9308-ND
                contact        SOCKET TIN
180-1009-00     Connector /    CONNECTOR ISA              AMP                 645169-2             NEWARK           90F3847
                contact        MBF TH                     KYCON               KSR-98-BR
180-1010-00     Connector /    CONNECTOR 2 CIRCUIT        MOLEX               22-05-2021           DIGIKEY          WM4100-ND
                contact        HEADER, .100 RT ANGLE
180-1011-00     Connector /    CONNECTOR SHROUDED         3M                  2550-5002UB          DIGIKEY          MHD50K-ND
                contact        HEADER 50 POS RT
                               ANGLE
180-1012-00     Connector /    CONNECTOR EISA                                                      GLYNN            HDCE-188G
                contact
180-1013-00     Connector /    CONNECTOR PCI              KYCONCHE            KHDS-120-G
                contact                                   Amp                 646255-1
180-1014-00     Connector /    CONNECTOR 34               AMP                 746610-8             GLYNN            FTR-34-T
                contact        POSITION TRANSITION
                               IDC
180-1015-00     Connector /    CONNECTOR HEADER           PI MFG              13601-026
                contact        26 pin 2x13
180-1016-00     Connector /    CONNECTOR 2POS HEADR       AMP                 350422-1             Digikey          A14367-ND
                contact        VERT MNT TIN COM
180-1017-00     Connector /    CONNECTOR 50 pin           Amp                 1-746610-0           Glynn            FTR-50-G
                contact        male transition

<CAPTION>
NEI Part           Unit     Rack 1   Rack 2     Rack 3    Table    Back     Cube     Trailer  Total QTY          Extended Cost
Number             Cost                                            Room                       on Hand            @ 9/30/99
<S>                <C>      <C>      <C>        <C>       <C>      <C>      <C>      <C>                 <C>     <C>
170-1002-00        $2.64
                                                                                                         -       $           -
170-1003-00        $7.01
                                                                                                         -       $           -
170-1004-00        $3.75
                                                                                                         -       $           -
170-1005-00
                                                                                                         -       $           -
171-1001-00        $3.84
                                                                                                         -       $           -
171-1002-00
                                                                                                         -       $           -
172-1001-00        $0.86
                                                                                                         -       $           -
172-1002-00        $1.60
                                                                                                         -       $           -
172-1003-00        $1.60
                                                                                                         -       $           -
172-1004-00        $0.42
                                                                                                         -       $           -
172-1005-00        $1.78
                                                                                                         -       $           -
172-1006-00        $1.69
                                                                                                         -       $           -
172-1007-00
                                                                                                         -       $           -
172-1008-00
                                                                                                         -       $           -
172-1009-00        $2.23
                                                                                                         -       $           -
172-1010-00        $0.65
                                                                                                         -       $           -
172-1011-00        $1.01
                                                                                                         -       $           -
172-1014-00        $6.40
                                                                                                         -       $           -
180-1001-00        $1.01
                                                                                                         -       $           -
180-1002-00        $1.17
                                                                                                         -       $           -
180-1003-00        $2.20
                                                                                                         -       $           -
180-1004-00        $2.72
                                                                                                         -       $           -
180-1005-00        $1.70
                                                                                                         -       $           -
180-1006-00        $0.25
                                                                                                         -       $           -
180-1007-00        $0.62
                                                                                                         -       $           -
180-1008-00        $0.03
                                                                                                         -       $           -
180-1009-00        $1.46    85
                                                                                                        85       $       124.10
180-1010-00        $0.13
                                                                                                         -       $           -
180-1011-00        $2.27
                                                                                                         -       $           -
180-1012-00
                                                                                                         -       $           -
180-1013-00        $1.10
                                                                                                         -       $           -
180-1014-00        $1.60
                                                                                                         -       $           -
180-1015-00        $0.16
                                                                                                         -       $           -
180-1016-00        $0.44
                                                                                                         -       $           -
180-1017-00        $1.97
                                                                                                         -       $           -
</TABLE>
<PAGE>

NETWORK ENGINES                  P6000 INVENTORY                         9/30/99

<TABLE>
<CAPTION>
NEI Part        Generic Part   Description                Manufacturer        Manufacturer         Distributor      Dist. Part
Number          Type                                                          Part Number                           Number
<S>             <C>            <C>                        <C>                 <C>                  <C>              <C>
180-1018-00     Connector /    CONNECTOR HEADER ST        Sullins             PZC36DAAN            DigiKey          S2011-36-ND
                contact        DUAL ROW M GOLD 72         Electronics Corp
                               PIN
180-1019-00     Connector /    CONNECTOR 15               AMP                 350588-1             Glynn
                contact        position Mate-N-Lok
                               male board mount
180-1020-00     Connector /    Connector 15 pin           AMP                 350992-4             Glynn
                contact        Female
180-1021-00     Connector /    CONNECTOR 16               Amp                 746610-3             Glynn            FTR-16-G
                contact        Position Transition
180-1022-00     Connector /    Connector 12 Pin           AMP                 530844-1             Newark           89F4284
                contact
180-1023-00     Connector /    CONNECTOR HEADER           AMP                 350825-1             Digikey          A14328-ND
                contact        CONN 3POS SOCKET IN
                               UNI
180-1024-00     Connector /    CONN AMPMODU 100PO         AMP                 1-104693-0           NEWARK           66F9150
                contact        SMD.5X.25X.39                                                       Digikey          A3118-ND
180-1025-00     Connector /    CONN AMPMODU 100POS        AMP                 1-104652-0           DigiKey          A3106-ND
                contact        SMD .50 X.50
180-1026-00     Connector /    CONNECTOR 50               BELL INDUSTRIES     SBQ50PD100TG
                contact        POSITION BOARD MOUNT
180-1027-00     Connector /    CONNECTOR 2 BY X
                contact        HEADER
180-1028-00     Connector /    CONNECTOR 1 BY             3M                  929834-01-36-R
                contact        36 .235
180-1029-00     Connector /    CONNECTOR PLCC             AMP                 822273-1
                contact        SOCKET 32 PIN
180-1030-00     Connector /    CONNECTOR 12 PIN           Molex               26-48-1126           DigiKey          WM4710-ND
                contact        HEADER .156
180-1031-00     Connector /    IC 14 PIN DIP SOCKET       AMP                 2-641599-5           DigiKey          A95143-ND
                contact        IC 14 POS PHOS BRZ
                               TIN
180-1032-00     Connector /    IC 16 PIN  DIP             AMP                 2-640358-3           DigiKey          A9316-ND
                contact        SOCKET
180-1033-00     Connector /    Connector H15              ERNI Connector      H15M                 Heilind          414.575
                contact        Male                                                                Electronics
180-1034-00     Connector /    Connector H15              ERNI Connector      H15F                 Heilind          594.750
                contact        Female                                                              Electronics
180-1035-00     Connector /    CONNECTOR 30 pin           Positronics         PLC30F300A1
                contact        straight female
180-1036-00     Connector /    Connector 30 pin           Positronics         PLC30M4B0A1
                contact        right angle Male
180-1037-00     Connector /    Connector 44 Pin           AMP                 1-111626-0-00        Digikey          ASA44K
                contact        Female
180-1038-00     Connector /    Connector 50 Pin           Amp                 1-746285-0           Digikey          AKC50G-ND
                contact        Female  Rcpt GOLD
                               S/C W/POL KEY
180-1039-00     Connector /    Connector 40 Pin           Amp                 1-746285-9           Glynn
                contact        Female Rcpt
180-1040-00     Connector /    CONNECTOR 14 PIN           AMP                 746285-2             DigiKey          AKC14G-ND
                contact        GOLD S/C W/POL KEY
180-1041-00     Connector /    CONNECTOR 16POS            AMP                 111633-3             DigiKey          AKC16A-ND
                contact        RECEPT GOLD W/POL UNI
180-1042-00     Connector /    CONNECTOR 34POS            AMP                 111633-8             DigiKey          AKC34A-ND
                contact        RECEPT GOLD W/POL UNI
180-1043-00     Connector /    CONNECTOR 40 PIN           AMP                 746285-9             DigiKey          AKC40G-ND
                contact        GOLD S/C W/POL KEY
180-1044-00     Connector /