July 10, 2000


To:  The Shareholders of Network Systems International, Inc. (the
"Company")



     Re:  Notice of Exception to Shareholder Approval Requirement
          of Nasdaq
          Marketplace Rules

Dear Shareholder:

     The purpose of this letter is to notify you that the Company
has  applied  for and has been granted conditional approval  from
Nasdaq for its omission to seek shareholder approval of the stock
transaction described below.

     On  June 26, 2000, the Company's Board of Directors approved
the  Company's  issuance of 1,666,667 new shares  of  its  common
stock for $1,000,000, or $0.60 per share, to seven investors in a
private placement pursuant to the terms and conditions of a Stock
Purchase  Agreement  dated  July 10,  2000.   Shortly  after  the
Company's issuance of the new shares of common stock, four of the
Company's major shareholders plan to sell 2,700,000 shares of the
Company's   common   stock   to  an   investor   for   $1,500,000
(approximately  $0.56 per share) in a second  private  placement.
The  four  major shareholders currently own 5,625,856 shares,  or
72.0%,  of the Company's common stock.  The issuance of  the  new
shares   by   the  Company  and  the  placement  of   the   major
shareholders'  shares are part of certain transactions  described
in  a  Form  8-K  Current Report filed with  the  Securities  and
Exchange  Commission on or about July 10, 2000.  A  copy  of  the
Form 8-K Current Report is enclosed.

     The  Nasdaq  Marketplace Rules require the Company  to  seek
shareholder   approval  in  connection  with   the   transactions
described  above for two reasons: (1) the issuance is part  of  a
plan that will result in a change in control of the Company;  and
(2)  the  common stock to be sold by the Company  and  the  major
shareholders in these transactions is in excess of twenty percent
(20%)  of  the currently outstanding shares of the Company  at  a
price  less  than the current market value.  However, the  Nasdaq
Marketplace  Rules  provide that the Company  may  apply  for  an
exception to the shareholder approval requirement if the delay in
securing  stockholder  approval would  seriously  jeopardize  the
financial  viability of the Company, and reliance by the  Company
on the exception is expressly approved by its Audit Committee.

     During  the past nine months, the Company has experienced  a
substantial   reduction  in  revenues  and  has  suffered   large
operating losses.  The combination of these two factors  has  put
the   Company  in  violation  of  its  financial  loan  covenants
contained  in its revolving credit agreement with Wachovia  Bank,
N.A.   As  stated in the Company's 10-QSB Quarterly Report  filed
with  the  Securities and Exchange Commission on  May  15,  2000:
"Until  the Company can renegotiate its current revolving  credit
agreement  or secure financing with another lender, the Company's
principal sources of liquidity are funds generated by operations.
These matters, along with the slowdown in software license sales,
raise  doubt  about the ability of the Company to continue  as  a
going  concern."   Wachovia Bank has indicated  that  it  is  not
willing  to  renegotiate  the  terms  of  the  revolving   credit
agreement,  and has stressed the need for the Company  to  reduce
its  outstanding indebtedness to a level acceptable  to  Wachovia
Bank.   To  date,  the  Company has been unable  to  arrange  for
adequate  financing to replace the Wachovia Bank credit facility.
As  a  result,  the Company began to consider other transactions,
such as the transaction described in the Form 8-K Current Report.
In the opinion of the Board of Directors, this transaction is the
best  alternative  available to the Company at  this  time.   The
other  parties to the transaction have indicated that  they  will
not  complete  the  transaction if  it  is  delayed  by  a  proxy
solicitation process.

     The   Company's  Audit  Committee  evaluated  the  Company's
present situation and determined on June 5, 2000, that the  delay
necessitated  by  the  mechanics of seeking shareholder  approval
through  a  normal  proxy  solicitation process  would  seriously
jeopardize the financial viability of the Company.

Sincerely,


/s/ Robbie M. Efird

Robbie M. Efird
Chairman and CEO
Network Systems International, Inc.

RME/rkr

Enclosures:    Form 8-K Current Report

cc:  The Nasdaq Stock Market