Document:

Exhibit 10.7
                              SHAREHOLDER AGREEMENT

         THIS SHAREHOLDER  AGREEMENT (the "Agreement") is entered into effective
as of February 5, 2001 between MICROPAC INDUSTRIES, INC., a Delaware corporation
(the "Company"),  and Nicholas Nadolsky,  an individual,  (referred to herein as
the "Shareholder").

         The Company has authorized capitalization of 3,627,151 shares of common
stock, $0.10 par value, issued and outstanding.  The Shareholder is the owner of
five hundred forty-eight  thousand eight hundred thirty-six  (548,836) shares of
the Company's common stock (the "Stock").

         The  Shareholder  and  the  Company  desire  to  promote  their  mutual
interests  and the  interests  of the  Company by entering  into this  Agreement
concerning the Stock.

         ACCORDINGLY,  in  consideration of the foregoing  premises,  the mutual
covenants  and  agreements   contained  herein,  and  other  good  and  valuable
consideration,  the receipt and adequacy of which are hereby  acknowledged,  the
parties to this Agreement agree as follows:

SECTION 1: DEFINITIONS

         As used herein, the following terms shall have the respective  meanings
indicated:

         1.1. Closing is defined in Section 4.

         1.2. Event Notice is defined in Section 3.1.

         1.3. Exercise Event means the occurrence of any of the following events
with respect to a Shareholder:

                  (a) The Shareholder dies, or becomes permanently disabled (the
"Shareholder's Death");

                  (b) The termination of the  Shareholder's  employment with the
Company for any reason (a "Termination").

         1.4.  Purchase  Price means,  with respect to each share of stock,  the
total  Shareholder's  equity as shown on the latest  quarterly or annual balance
sheet of the Company, audited or unaudited,  divided by the number of issued and
outstanding  shares of the Company's  common stock.  Treasury  shares and shares
subject to outstanding  but  unexercised  options shall not be deemed issued and
outstanding.

         1.5. GAAP means generally accepted accounting principles,  consistently
applied with the  principles  customarily  used by the Company in preparing  its
financial statements for financial reporting purposes.

         1.6.  Shareholder  means and includes Nicholas Nadolsky or in the event
of his death or disability, his executor or legal representatives.

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         1.7.  Transfer  means(a)  any sale,  hypothecation,  transfer,  pledge,
encumbrance, gift, donation, assignment, or other disposition, whether voluntary
or involuntary,  and whether during the Shareholder's  lifetime or upon or after
the  Shareholder's  death,  including,  but not  limited  to,  any  transfer  by
operation of law, by court order, by judicial process, or by foreclosure,  levy,
or attachment, or (b) the act of making any of the foregoing transfers.

          SECTION 2 GRANT OF PUT OPTION; ABILITY TO TRANSFER THE SHARES

         2.1.  Grant of Put Option.  Shareholder  is hereby granted an option to
require the Company to purchase,  for the Purchase  Price and upon the terms set
forth in this Agreement,  any or all of the shares of Stock that Shareholder now
owns if an Exercise Event occurs.

         2.2. No Restrictions  on Transfers.  The Shareholder or the executor or
legal  representative  of Shareholder  may sell all or any part of the Stock. If
all of the  Stock  is  sold  by the  Shareholder,  or  his  executors  or  legal
representatives,  this Agreement shall terminate and be null and void. If all or
any part of the  Stock is  transferred  to  conveyed  by gift or  devise  by the
Shareholder  or  the  Shareholder's  executor  or  legal  representative,   this
Agreement  shall  remain in full force and effect  and may be  enforced  by such
executor or legal representative.

                       SECTION 3 DELIVERY OF EVENT NOTICE

         3.1.  Generally.   Upon  the  occurrence  of  an  Exercise  Event,  the
Shareholder or the Shareholder's  executor or legal  representative may give the
Company notice at any time  thereafter (the "Event Notice") of the occurrence of
that Exercise Event and the date of that occurrence.

         3.2. Contents of Event Notice. If given, the Event Notice shall specify
that the Shareholder is requiring that the Company  purchase all of the Stock at
the Purchase Price.

                              SECTION 4 THE CLOSING

         4.1. Closing Time and Place. Unless otherwise mutually agreed to by the
Shareholder  and the Company,  (a) the  consummation of the sale and purchase of
the Stock (the "Closing") will occur on the earlier of twenty (20) business days
after:  (i) the parties  hereto have mutually  agreed in writing on the Purchase
Price of the Shares;  or (ii) the  Appraiser  has prepared and  delivered to the
parties hereto a written  report  specifying the Fair Market Value of the Stock.
If prior to the Closing any offer ("Offer")is made to purchase all of the assets
or outstanding shares of the Company's common stock or to merge the Company into
another legal  entity,  the Closing may be postponed by the  Shareholder  or the
Company to allow the  Shareholder  to  determine  whether to accept the Offer or
proceed with a sale of the Stock to the Company.  If the  Shareholder  elects to
postpone the Closing,  the  Shareholder may accept the Offer, in which event the
Company shall not be required to purchase the Stock, and (b) the Closing will be
held at the offices of the Company, Garland, Dallas County, Texas.

         4.2. Closing Deliveries.

                  (a) The Purchase  Price.  The Purchase  Price shall be paid in
         cash or by certified bank or cashier's  check at the Closing.  If Stock
         is changed, reclassified,  split, combined, converted, or exchanged for
         other  securities or any  securities are paid as dividends on the Stock
         after the date as of which the Purchase  Price is determined and before
         the Closing of the sale of the Optioned Shares,  appropriate adjustment
         shall be made to the  Exercise  Price to give  effect  to such  change,
         reclassification,   split,   combination,   conversion,   exchange,  or
         dividend.

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                  (b) The Stock. At the Closing,  the Shareholder  shall deliver
         to the Company the certificates representing the Stock being purchased,
         duly  endorsed for transfer or  accompanied  by a duly  executed  stock
         power. The Shareholder  shall covenant that the Stock sold are free and
         clear of all liens, claims, and encumbrances of any nature whatsoever.

                  (c) Other.  All other  action shall be taken at the Closing as
         the  Shareholder  and Company  shall  reasonably  request to effect the
         purchase and sale of the Stock.

                       SECTION 5 MISCELLANEOUS PROVISIONS

         5.1. Specific Performance. Each party declares that it is impossible to
measure in money the  damages  that will accrue to the other  parties  hereto by
reason of a failure  to  perform  or a breach in the  performance  of any of its
obligations  under this  Agreement,  and each  party (a)  agrees  that the other
parties to this Agreement shall be entitled to specific performance of the terms
of this  Agreement  and  injunctive  and other  equitable  relief in case of any
failure,  breach or attempted  breach and (b) waives any  reimbursement  for the
securing or posting of any bond in  connection  with the  obtaining  of any such
injunctive or other equitable relief. If any party to this Agreement  institutes
any action or  proceeding  to  specifically  enforce  the  provisions  hereof (a
"plaintiff"),  any party  against whom that action or  proceeding  is brought (a
"defendant")  waives the claim or defense  that the  plaintiff  has an  adequate
remedy at law, and the defendant  will not urge in any such action or proceeding
the claim or defense that such remedy at law exists.

         5.2 . Notices.  Whenever any notice is required or permitted hereunder,
that notice must be in writing. Any notice required or permitted to be delivered
hereunder shall be deemed to be delivered,  given and received on the date it is
personally  received by (and receipt  acknowledged in writing by) the Person who
is to receive it or, if mailed,  whether actually  received or not, on the third
business  day after it is  deposited  in the United  States  mail,  certified or
registered mail,  return receipt  requested,  postage prepaid,  addressed to the
Person who is to  receive it at the  address  that such  Person has  theretofore
specified  by  written  notice  delivered  in  accordance  herewith.  Any Person
entitled to receive  notice  hereunder may change,  at any time and from time to
time, by written  notice to the other  parties,  the address that such party had
theretofore  specified  for  receiving  notices.  Until  changed  in  accordance
herewith,  each party hereby  specifies as such  party's  address for  receiving
notices the address  adjacent to such party's name on the signature page hereof.
In the event more than one Person is to receive notice  hereunder,  notice shall
not be deemed  delivered or received  until delivery is deemed to be made to the
last  Person who is to receive  that notice  (provided  that any such Person may
agree that notice  shall be deemed to be delivered or received by that Person as
of any earlier date).

         5.3. Further Assurances.  Each of the parties hereto agrees to take, at
its own expense, such further action as may be reasonably requested by any other
party hereto necessary or desirable to accomplish or effect the purposes of this
Agreement and the transactions contemplated hereby.

         5.4. Multiple Counterparts.  This Agreement may be executed in a number
of  identical  counterparts  and it shall  not be  necessary  for each  party to
execute each of such counterparts, but when all of the parties have executed and
delivered  one or more of such  counterparts,  the  several  parts,  when  taken
together, shall be deemed to constitute one and the same instrument, enforceable
against  each  party in  accordance  with its  terms.  In  making  proof of this
Agreement,  it shall not be  necessary  to produce or account  for more than one
such  counterpart  executed  by the  Person  against  whom  enforcement  of this
Agreement is sought.

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         5.5. Entire  Agreement.  This Agreement is intended by the parties as a
final  expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the  subject  matter  contained  herein.  There are no  restrictions,  promises,
warranties,  or undertakings,  other than those set forth or referred to herein,
with  respect to the right of Company  or the  Shareholder  to sell Stock now or
hereafter held by that Person.  This Agreement  supersedes all prior  agreements
and understandings between the parties with respect to such subject matter.

         5.6. Invalid Provisions.  If any provision of this Agreement is held to
be illegal,  invalid,  or  unenforceable  under present or future laws effective
during the term of this Agreement, such provision shall be fully severable; this
Agreement  shall be  construed  and  enforced as if such  illegal,  invalid,  or
unenforceable  provision had never comprised a part of this  Agreement;  and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal,  invalid, or unenforceable provision or by
its severance from this  Agreement.  Furthermore,  in lieu of each such illegal,
invalid,  or unenforceable  provision,  there shall be added  automatically as a
part of this Agreement a provision as similar in terms to such illegal, invalid,
or  unenforceable  provision  as  may  be  possible  and be  legal,  valid,  and
enforceable.

         5.7. Termination. This Agreement shall terminate (a) upon the execution
of a  termination  agreement  signed  by all  Persons  who are  parties  to this
Agreement, (b) automatically upon the sale of the Stock as provided herein.

         5.8.  Amendments.  This  Agreement  may be amended at any time and from
time to time, in whole or in part, by an instrument in writing setting forth the
particulars  of  such  amendment  duly  executed  by  the  Person  against  whom
enforcement of that amendment is sought.

         5.9.  Successors and Assigns.  Except as otherwise  expressly stated to
the  contrary  herein,  this  Agreement  shall be binding  upon and inure to the
benefit of each party hereto and shall be binding upon their  respective  heirs,
successors, executors, representatives, and assigns.

         5.10. References. Whenever herein the singular number is used, the same
shall  include the plural where  appropriate,  and vice versa;  and words of any
gender shall include each other gender where appropriate.

         5.11. Captions.  The captions,  headings, and arrangements used in this
Agreement are for convenience only and do not in any way affect, limit, amplify,
or modify the terms and provisions hereof.

         5.12.  Governing  Law. The laws of the state of Texas and of the United
States of America  shall govern the  validity,  construction,  enforcement,  and
interpretation of this agreement, without reference to conflicts of law.

         5.13.  After-Acquired Shares.  Whenever the Shareholder (or its spouse)
shall  hereafter  acquire  any  shares of Stock of the  Company,  the  shares so
acquired  shall  be  held  subject  to all  the  terms  and  conditions  of this
Agreement.

         5.15.  Arbitration.  In the  event of any  dispute,  interpretation  or
disagreement  concerning this Agreement (the  "Dispute"),  such Dispute shall be
settled by binding arbitration to be held in Dallas, Dallas County, Texas.

         ARBITRATION  OF  DISPUTES.  WITH  RESPECT  TO  THE  ARBITRATION  OF ANY
DISPUTE, THE PARTIES HEREBY ACKNOWLEDGE AND AGREE THAT:

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         1.       ARBITRATION IS FINAL AND BINDING ON THE PARTIES;

         2.       THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT,
                  INCLUDING THEIR RIGHT TO JURY TRIAL;

         3.       PRE-ARBITRATION   DISCOVERY  IS  GENERALLY  MORE  LIMITED  AND
                  DIFFERENT FROM COURT PROCEEDINGS;

         4.       THE  ARBITRATOR'S  AWARD IS NOT  REQUIRED  TO INCLUDE  FACTUAL
                  FINDINGS OR LEGAL  REASONING AND ANY PARTNER'S RIGHT TO APPEAL
                  OR TO SEEK  MODIFICATION  OF  FILINGS  BY THE  ARBITRATORS  IS
                  STRICTLY LIMITED; AND

         IN THE EVENT  THAT A DISPUTE  ARISES  BETWEEN  ANY PARTY  HERETO,  SAID
DISPUTE  ARISING OUT OF, IN CONNECTION  WITH OR AS A RESULT OF THIS AGREEMENT OR
THE ACTION OF ANY PARTY,  THE PARTIES HEREBY  EXPRESSLY AGREES THAT SAID DISPUTE
SHALL BE RESOLVED THROUGH ARBITRATION RATHER THAN LITIGATION.  EACH PARTY HEREBY
AGREES  TO  SUBMIT  THE  DISPUTE  FOR  RESOLUTION  TO THE  AMERICAN  ARBITRATION
ASSOCIATION,  WITHIN FIVE (5) DAYS AFTER  RECEIVING  A WRITTEN  REQUEST TO DO SO
FROM ANY OF THE PARTIES.  IF A PARTY FAILS TO SUBMIT THE DISPUTE TO  ARBITRATION
AS REQUESTED, THEN THE OTHER PARTY MAY COMMENCE AN ARBITRATION PROCEEDING.  EACH
PARTY  AGREES THAT ANY HEARING  SCHEDULED BY THE AAA SHALL TAKE PLACE IN DALLAS,
TEXAS,  AND THAT THE TEXAS  ARBITRATION ACT SHALL GOVERN THE PROCEEDINGS AND ALL
ISSUES RAISED UNDER THIS  AGREEMENT TO ARBITRATE.  IF ANY PARTY SHALL  INSTITUTE
ANY COURT  PROCEEDING IN AN EFFORT TO RESIST  ARBITRATION AND BE UNSUCCESSFUL IN
RESISTING,  THE  PREVAILING  PARTY SHALL BE ENTITLED TO RECOVER  FROM THE LOSING
PARTY ITS LEGAL FEES AND ALL EXPENSES INCURRED IN CONNECTION WITH THE DEFENSE OF
SUCH LEGAL  PROCEEDING  OR ITS EFFORTS TO ENFORCE ITS RIGHTS TO  ARBITRATION  AS
PROVIDED HEREIN.

                            SECTION 6 COMPANY CAPITAL

         The Company shall not be obligated to purchase the Stock if at the time
of such purchase the capital of the Company would be impaired  under  applicable
laws. If the  Company's  capital would be impaired by the purchase of the Stock,
the  Closing  shall be delayed  until such time as the capital of the Company is
not  impaired.  The  Company  agrees  to take  such  reasonable  actions  as the
Company's  board of directors  believe are  reasonable  to permit the Company to
purchase the Stock without impairing the capital of the Company.

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         IN WITNESS  WHEREOF,  the parties  have  executed  this  Agreement or a
Spousal  Consent on the dates set forth  below,  to be  effective as of the date
first written above.

Address:                                      MICROPAC INDUSTRIES, INC.

905 East Walnut
Garland, Texas 75040
                                              By: /s/ Connie Wood
                                              ----------------------------------

                                              Name: Connie J. Wood
                                              ----------------------------------

                                              Title: President & CEO
                                              ----------------------------------

                                              Date: March 13, 2001
                                              ----------------------------------

                                              SHAREHOLDER

Address:                                      By: /s/ N. Nodolsky
                                              ----------------------------------
-----------------------------                 Nicholas Nadolsky

                                              Date: March 13, 2001
                                              ----------------------------------

                                                                          Page 6Exhibit 10.8
                               ANCILLARY AGREEMENT
                                       TO
                                PROXY AGREEMENTS
                          WITH RESPECT TO CAPITAL STOCK
                                       OF
                            MICROPAC INDUSTRIES, INC.

         THIS  ANCILLARY  AGREEMENT,  is entered  into to be effective as of the
19th day of February,  1987, by and among MICROPAC  INDUSTRIES,  INC. a Delaware
corporation  ("Micropac"),  H. Kent  Hearn,  William  Joseph  Holt,  Woodrow  O.
Brownlee  and  their  successors   appointed  as  in  this  Agreement   provided
(hereinafter  collectively referred to as the "Proxy Holders"), and Heinz-Werner
Hempel and Friedrich-Wilhelm Hempel, citizens of the Federal Republic of Germany
(hereinafter called the "Hempels").

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Micropac, certain Voting Trustees and the Hempels entered into
a Voting Trust  Agreement With Respect to Capital Stock of Micropac  Industries,
Inc. dated as of the 18th day of January,  1977, amended the 28th day of August,
1980,  and further  amended the 7th day of  September,  1982 (the "Voting  Trust
Agreement"); and

         WHEREAS, the Voting Trust Agreement expired on the 19th day of January,
1987; and

         WHEREAS,  Micropac desires,  in order to maintain its facility security
clearance  issued  under the United  States  Department  of  Defense  Industrial
Security  Regulation  (the  "Regulation"),  that each of the Hempels  separately
enter  into a  Proxy  Agreement  With  Respect  to  Capital  Stock  of  Micropac
Industries,  Inc.  with Micropac and the Proxy Holders dated and effective as of
this 19th day of February, 1987 (the "Proxy Agreements"); and

         WHEREAS,  Micropac and the Proxy  Holders have agreed as an  inducement
for  the  Hempels'  execution  and  delivery  of the  Proxy  Agreements  to make
additional  covenants  for the  benefit of the  Hempels in  connection  with the
execution and delivery of the Proxy Agreements.

         NOW,  THEREFORE,  in consideration of the premises and mutual covenants
herein contained,  and such other good and valuable  consideration,  the receipt
and  sufficiency of which are hereby  acknowledged,  the parties hereby agree as
follows:

<PAGE>

1.  Proxy  Agreements  Subject  to  this  Ancillary  Agreement.  This  Ancillary
Agreement  is  an  inducement  to  the  execution  and  delivery  of  the  Proxy
Agreements.  As such, both Proxy Agreements are subject to, and will only become
effective  and binding on the parties  thereto and hereto,  upon the  execution,
delivery and effectiveness of this Ancillary Agreement.

2. Registration of Micropac Stock of the Hempels by Micropac.

         a. The Hempels'  Right to Require  Registration.  At any time after the
         effective  date of this  Ancillary  Agreement,  the  Hempels  shall  be
         entitled  by  notice  to  Micropac  to  require   Micropac  to  file  a
         registration statement with the Securities and Exchange Commission (the
         "Commission")  with  respect  to and to expend  best  efforts to effect
         registration  of any number of shares or other units of Micropac  Stock
         owned by the  Hempels  in the manner of  disposition  set forth in such
         notice.  No such notice  shall be effective  and Micropac  shall not be
         required  so to  file  a  registration  statement  unless  each  of the
         following conditions is met:

                  (i) Micropac  shall not have effected any  registration  under
                  the Securities Act of 1933, as amended, (the "Securities Act")
                  as the result of any prior  notice by the Hempels  pursuant to
                  this  subparagraph  (a) of this Paragraph 2, it being intended
                  that the Hempels  may only  require  one  registration  of its
                  Micropac Stock pursuant to this subparagraph (a);

                  (ii) The  minimum  number of shares or other units of Micropac
                  Stock  specified  in or covered by the notice shall be 400,000
                  shares of Micropac Stock; and

                  (iii)  There  shall  not have  been a  registration  statement
                  covering Micropac Stock in effect and available to the Hempels
                  and covering its shares of Micropac  Stock,  during the ninety
                  (90) days preceding the date of the Hempels' notice hereunder.

         b. The Hempels' Right to Participation in Registration.  If at any time
         following the effective  date of this  Ancillary  Agreement,  while the
         Hempels shall own any Micropac Stock, Micropac proposes at any time and
         from time to time to register any Micropac  Stock under the  Securities
         Act, Micropac shall, at each such time, give notice of such proposal to
         the  Hempels.  The  Hempels  may,  by notice to  Micropac,  require the
         inclusion of all or any portion of the Micropac Stock they then own, up
         to 30% of the total of all shares to be registered, in the registration
         statement which Micropac has proposed to file, but no such notice shall
         be effective unless given no later than thirty (30) days after the date
         upon which notice of a proposed  registration  is given by Micropac and
         any such notice  shall  include the number of shares or units which the
         Hempels  desire to have included.  Micropac shall proceed,  pursuant to
         the  provisions of this Paragraph 2 to effect the  registration  of any
         Micropac Stock specified in an effective  notice.  Notwithstanding  the

<PAGE>

         foregoing,  Micropac  may  abandon  any  registration,   provided  such
         abandonment  occurs with respect to all securities  being registered by
         Micropac and further  provided that such  abandonment  shall be without
         prejudice  to any right of the Hempels to require  registration  of the
         shares of Micropac Stock they own pursuant to subparagraph (a) above.

         c.  Registration  by  Micropac;  Cost  and  Expenses.  If  Micropac  is
         required,   as  the  result  of  notice  by  the  Hempels  pursuant  to
         subparagraph (a) or (b) of this Paragraph 2, to effect the registration
         of any Micropac Stock, Micropac shall expeditiously:

                           (i)   Prepare   and  file  with  the   Commission   a
                           registration   statement  on  appropriate  form  with
                           respect  to  the  Micropac  Stock  specified  in  the
                           applicable   notice   and,   subject   to   necessary
                           Commission approval,  to expend best efforts to cause
                           such  registration  statement  to become  and  remain
                           effective for  disposition  of the Micropac  Stock in
                           accordance  with the intended  method of  disposition
                           described in the Hempels' notice.

                           (ii)  Furnish to the Hempels such number of copies of
                           a summary prospectus or other prospectus, including a
                           preliminary   prospectus,   in  conformity  with  the
                           requirements  of the  Securities  Act and such  other
                           documents  as the Hempels may  reasonably  request in
                           order to  facilitate  their  disposition  of Micropac
                           Stock owned by them and covered by such  registration
                           statement; and

                           (iii)  Subject to necessary  governmental  approvals,
                           register or qualify the  Micropac  Stock owned by the
                           Hempels  and covered by such  registration  statement
                           under such other  securities or blue sky laws of such
                           jurisdictions within the United States as the Hempels
                           may  reasonably  request,  to enable  the  Hempels to
                           consummate the disposition in such  jurisdictions  of
                           the  Micropac  Stock owned by the Hempels and covered
                           by such registration statement.

         The rights  created by  subparagraphs  (a) and (b) of this  Paragraph 2
         shall be cumulative, not exclusive. With respect to any registration of
         Micropac Stock under  subparagraph (a) of this Paragraph 2, the Hempels
         shall pay  underwriting  discounts and  commissions,  registration  and
         filing  fees,  fees of any  special  legal  counsel to the  Hempels and
         expenses  of  special  audits  incident  to or  required  by  any  such
         registration,  provided however,  Micropac shall pay and shall hold the
         Hempels  harmless  against (i) any such accounting costs if such demand
         for  registration  is  coordinated  with  the  regular  preparation  of
         financial  reports by  Micropac  and (ii) any costs of counsel or other
         experts for Micropac; and further provided,  that in the event Micropac
         or any other holder of Micropac Stock includes any additional  Micropac
         securities  in  the  registration  statement  which  the  Hempels  have
         required to be filed, then any such expenses to be borne by the Hempels
         shall be  proportionately  allocated  among  all  participants  in said
         registration.  With respect to any registration of Micropac Stock under
         subparagraph  (b) of this  Paragraph 2, Micropac shall pay all expenses

<PAGE>

         of such registration  including  expenses incurred by the Hempels other
         than  fees and  disbursements  of any  special  legal  counsel  for the
         Hempels and excluding  any  underwriter's  commissions  on the Micropac
         Stock sold by the  Hempels.  It shall be a condition  precedent  to the
         obligation of Micropac to take any action  pursuant to this Paragraph 2
         that the Hempels shall furnish to Micropac such  information  regarding
         Micropac  Stock  held  by  the  Hempels  and  the  intended  method  of
         disposition thereof, and other relevant information,  as Micropac shall
         reasonably  request  and as shall be required  in  connection  with the
         actions to be taken by Micropac.

         d. The rights  granted in this  Paragraph  2 shall  expire and be of no
         further  force  and  effect  on the  earlier  to occur of (i) the tenth
         (10th) anniversary hereof, (ii) the date on which the Micropac Stock is
         listed on the New York  Stock  Exchange  or (iii) the date on which the
         public float of the Micropac Stock is at least 250,000 shares.

3. Cooperation in Private Placements.
If at any time the Hempels  shall  desire to offer for sale or sell any Micropac
Stock in a transaction which is either exempt from the registration provision of
the Securities Act or not subject to the jurisdiction  thereof,  Micropac shall,
as promptly as practicable after notice to such effect from the Hempels, furnish
in writing such information  concerning  Micropac and its affairs as the Hempels
may request for inclusion in any placement memorandum or other offering document
including  information  of  the  character  described  and  referred  to in  the
Commission's  Regulation  D or  other  rules  regarding  unregistered  sales  of
securities as may be applicable under the Securities Act and a reasonable number
of copies of the documents  referenced  therein.  Micropac shall promptly notify
the  Hempels of any  material  developments  not  disclosed  in the  information
furnished or of the occurrence of any event as a result of which the information
furnished  contains an untrue  statement of a material  fact or omits to state a
material fact required to be stated  therein under such rules  necessary to make
the statements  therein not misleading  under the  then-existing  circumstances.
Micropac  will also  provide  access to its books and  records  and  afford  the
Hempels,  the offeree(s) and their  representatives,  the opportunity to consult
with the executive officers of Micropac in order to obtain information necessary
to verify facts and statements; and Micropac will otherwise cooperate fully with
the Hempels in placing such Micropac Stock,  including  executing and delivering
such  reasonable  certificates  and  assurances as  customarily  are required in
institutional  private  placements.  The  foregoing  shall not be  construed  to
require the Board of  Directors  or  management  of  Micropac  to violate  their
fiduciary duty under the Delaware General Corporation Law ("GCL").

4. Indemnification.
Micropac shall,  upon the written request of the Hempels,  indemnify the Hempels
and each other  person,  if any, who controls the Hempels  within the meaning of
the Securities  Act, and each  underwriter  who  participated in the offering of
such securities,  against any losses, claims, expenses (including the reasonable
costs of  investigating  and  defending  against any claim  therefor and related
counsel fees and settlement costs), damages or liabilities, joint or several, to
which the Hempels or such  controlling  person or underwriter may become subject
under the Securities Act, the Securities Exchange Act of 1934, as amended,  (the
"Exchange  Act") or  otherwise  as the  result of  failure  to  comply  with the

<PAGE>

Securities  Act or the  Exchange  Act by reason of any  omission of any material
fact required to be stated or necessary to make  statements made not misleading,
or by reason of the fact that such statements made contain any untrue  statement
of a material fact, or by reason of any omission from any prospectus or offering
materials or filing  furnished to such holder of any material fact  necessary to
be  stated  therein  in order to make  statements  therein  in the  light of the
circumstances  under  which they were made not  misleading,  or by reason of the
fact that such  prospectus,  offering  materials or filing  contained any untrue
statements  of a material  fact,  unless such  statement or omission was made in
reliance upon and in conformity with written  information  furnished to Micropac
by the Hempels.  Micropac's indemnity obligation shall be limited accordingly in
the event and to the extent that the Hempels shall have been  determined to have
been guilty of wrongdoing in connection with any transaction  under Paragraphs 2
and 3. The Hempels,  as a condition  precedent of Micropac's  obligations  under
Paragraphs  2 and 3, hereby  agree that they will,  upon the written  request of
Micropac,  indemnify Micropac to the same extent as the foregoing indemnity from
Micropac to them but only with  respect to  information  furnished in writing by
the  Hempels  for use in any  registration  statement  or  prospectus,  offering
materials or filing.

5. Presentation of Proposals.
Micropac  shall  promptly  forward to the Hempels any  proposal  for any type of
business  combination  transaction  delivered  to  Micropac or any member of its
Board of  Directors or  management.  The Hempels and their  representatives  and
financial  advisors  shall have the right to  participate  fully in all meetings
regarding and all negotiations  regarding such proposals.  Any financial advisor
or  investment  banker  engaged by  Micropac  will be subject to approval by the
Hempels.

6. Pursuit of Proposals.
Micropac, its Board of Directors and management, consistent with their fiduciary
duties to Micropac stockholders  (including the Hempels),  shall cooperate fully
with the Hempels in the good faith  pursuit of any  proposals,  or  negotiations
regarding any  proposals,  for business  combinations,  such as described  under
Paragraph 5, including the  recommendation of any such proposals or negotiations
leading to a proposed business combination which would benefit all stockholders.
The  foregoing  shall not be  construed  to require  the Board of  Directors  or
management of Micropac to violate their fiduciary duty under the GCL.

7. Cost of the Agreements.
All costs and expenses incurred by Micropac or the Hempels in the establishment,
execution and delivery,  maintenance and  administration of the Proxy Agreements
or this Ancillary Agreement shall be borne by Micropac.

Micropac shall,  upon the written request of the Hempels,  indemnify the Hempels
for any  losses,  claims  or  expenses  which  they may incur  pursuant  to this
Ancillary Agreement.

<PAGE>

8. Most Favored Rights of the Hempels.
If at any time Micropac  shall grant any  registration  rights more favorable to
the holder than the rights  granted  herein to the Hempels,  the Hempels  rights
should be automatically included with such rights subsequently granted therein.

9. Notices.
All notices to be given to the  Hempels  shall be given by mailing the same in a
sealed postpaid envelope,  addressed to the address as shown on the books of the
Proxy  Holders,  and any notice  whatsoever  when  mailed by or on behalf of the
Proxy Holder as herein provided shall have the same effect as though  personally
served. All notices to be given to the Proxy Holders shall be given by serving a
copy  thereof  upon the Proxy  Holders  personally  or by mailing  the same in a
sealed  postpaid  envelope  addressed  to them at  their  office  in the Town of
Garland,  Texas  with a copy to the last known  residence  address of each Proxy
Holder.

10. Entire Agreement.
This Ancillary Agreement,  in conjunction with the Proxy Agreement,  constitutes
the  entire   agreement   among  the  parties   hereto,   and  any  other  prior
understandings  or agreements  regarding the subject matter hereof are expressly
superseded by this Ancillary Agreement and the Proxy Agreement.

11. Binding Effect.
This Ancillary  Agreement  shall be binding upon and inure to the benefit of the
parties and their  respective  legal  representatives,  successors  and assigns;
provided  however that the rights of the Hempels and the obligations of Micropac
hereunder  shall (i) as to the provision of Paragraph 2 be freely  assignable in
any transaction not involving a public offering; (ii) as to the other provisions
hereof,  shall be  transferable  by the  Hempels  only by  devise or the laws of
intestate succession, or to each other.

12. Headings.
The  Paragraph  headings in this  Ancillary  Agreement  are for  convenience  of
reference  only,  and shall not be deemed  to alter or  affect  the  meaning  or
interpretation of any provisions hereof.

13. Construction.
This Ancillary  Agreement  shall be constued in accordance  with and governed by
the laws of the State of Texas.

14. Counterparts.
This  Ancillary  Agreement may be executed in one or more  counterparts  each of
which  shall be  deemed to be an  original  and all of which  together  shall be
deemed to be one and the same instrument.

<PAGE>

         IN WITNESS WHEREOF, this Ancillary Agreement has been duly executed and
delivered to be effective as of the date first above written.

                                               MICROPAC INDUSTRIES, INC.

                                                By: /s/ N. Nodolsky
                                                   -----------------------------
                                                   Nicholas Nadolsky
                                                   President and
                                                   Chairman of the Board

                                                By: /s/ H K Hearn
-------------------------                          -----------------------------
Witness                                            Proxy Holder

                                                By: /s/ William J Holt
-------------------------                          -----------------------------
Witness                                            Proxy Holder

                                                By: /s/ Woodrow Brownlee
-------------------------                          -----------------------------
Witness                                            Proxy Holder

                                                By: /s/ Heinz-Werner Hempel
                                                   -----------------------------
                                                   Heinz-Werner Hempel

                                                By: /s/ Friedrich-Wilhelm Hempel
                                                   -----------------------------
                                                   Friedrich-Wilhelm Hempel

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