Document:

Adept Technology / Yaskawa Electric Corp.

                   Original Equipment Manufacturing Agreement

                                      For

                             Six Axis Manipulators

                                  CONFIDENTIAL

**** - Indicates  confidential  information  that has been omitted pursuant to a
request for confidential  treatment and filed separately with the Securities and
Exchange Commission.

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                                                                         Page ii

                         Adept / Yaskawa OEM Agreement
                               TABLE OF CONTENTS

Paragraph        Major Topics
                 ------------

1 Purpose and Scope of Relationship

2 Product Specifications and Technical Information

3 Pricing and Payment

4 Purchase Orders, Delivery Scheduling, Lead Times and Forecasts

5 Warranty

6 Arm Parts, Repair Service, and Maintenance

7 Product Change Management

8 Obsolescence

9 Documentation

10 Inspection and Testing

11 Indemnity

12 Product and Business Confidentiality

13 Technical Communications

14 Assignments and Delegations

15 Term and Termination

16 Force Majeure

17 Applicable Law, Jurisdiction and Venue, and Attorney's Fees

18 Miscellaneous

19 Entire Agreement

Contract Execution by Both Parties

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                         Adept / Yaskawa OEM Agreement

                                   APPENDICES

o Products Specifications                                   Appendix 1
o Price Schedule                                            Appendix 2
o Spares Pricing Schedule                                   Appendix 3
o Quality Planning and Data Requirements                    Appendix 4

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Adept / Yaskawa                                                           Page 1

                                Adept / Yaskawa

                   Original Equipment Manufacturing Agreement

This agreement by and between ADEPT TECHNOLOGY, INC. (hereinafter referred to as
"ADEPT") and Yaskawa  Electric Corp.  (hereinafter  referred to as "Yaskawa") is
entered  into  for  the  purpose  of  providing   OEM  sales  of  Yaskawa  robot
manipulators  to ADEPT.  ADEPT and Yaskawa agree that the  following  provisions
shall govern the OEM  relationship  between  ADEPT and  Yaskawa.

1. Purpose and Scope of Relationship

1.1      ADEPT will  purchase  and Yaskawa  shall  provide  Mechanical  Six Axis
         Manipulator  product,  Yaskawa models SV3X,  UP6, UP2O, CR3, CR8, CR20,
         hereinafter referred to as "ARM", for incorporating with ADEPT hardware
         and software controls to provide an extension to ADEPT's product lines.

         ADEPT   shall   market   the  ARMs   under  its  own  trade   name  and
         responsibilities  except for any industrial  rights associated with the
         designs of the ARMs.

1.2      Yaskawa is engaged in the  design,  manufacturing  and sales of various
         automation  equipment and products including industrial robots in Japan
         and elsewhere  throughout the world, and desires to expand its sales of
         robotics products.

1.3      Both  parties  desire to expand  the market  demand for their  products
         through the business relationship established by this agreement.

2. Product Specifications and Technical Information

2.1      Product Specification

         Yaskawa  will sell to ADEPT ARMs and its  maintenance  and spare  parts
         (hereinafter  referred  to  as  "PARTS")  which  accept  ADEPT's  servo
         amplifier  signal  and meet the  product  specifications  contained  in
         ADEPT's  Product  Specification.  Refer to Appendix  #1. If changes are
         required to the product  specifications  referenced  in this  agreement
         during the  course of the  business  relationship,  both  parties  must
         formally  approve the  requirements  and changes to be made before they
         are  incorporated  into the ARM sold to  ADEPT.  All  notifications  of
         product specification  changes, or other contractual changes,  shall be
         directed to ADEPT's  Purchasing  organization.  Yaskawa guarantees that
         all  products  sold to  ADEPT  will  meet the  most  current  effective
         revision  of  product  specifications  approved  by both  parties.  All
         changes to product  specifications  must conform to the Product  Change
         Management Section herein. For further Product Specification

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Adept / Yaskawa                                                           Page 2

         information, refer to attached Appendix #1.

2.2      Technical Support

         In order to support ADEPT's direct market responsibility,  Yaskawa will
         make available  capable  technical support personnel at ADEPT's request
         for any problem with the ARMs not  resolved,  by ADEPT  engineering  or
         customer Service or Sales  Application  support.  The Yaskawa technical
         support  must have  adequate  English  speaking  and writing  skills or
         Yaskawa must supply the necessary  interpreter  on a timely basis.  The
         technical  support must be available during Yaskawa's  factory's normal
         working hours and be available for emergency situations for off factory
         hours given a critical or emergency situation in ADEPT's judgment. Such
         technical support shall be limited and conducted at Yaskawa's  facility
         in Japan.  There will be no charge for this technical  support service,
         however in the case of out of warranty (specified in section 5) Yaskawa
         shall charge ADEPT at a rate of $100 per man-hour.

2.3      Color and Logo Plate Specification

         The ARMs sold to ADEPT shall be painted to ADEPT's color  specification
         and color paint chip provided to Yaskawa. Adhesive logo plates shall be
         supplied by ADEPT to Yaskawa  and such logo  plates  shall be fitted by
         Yaskawa prior to shipment,  per the ADEPT provided Logo  Specification.
         Yaskawa  shall  provide  and install  ARM  product  number  plates with
         ADEPT's name, product name, serial number, and month of production with
         ADEPT's approval.

2.4      Packaging Specification

2.4.1    Packaging  must be able to withstand  normal  industry  shipping  (air,
         ship, rail and truck)  requirements for vibration,  shock,  temperature
         and humidity

2.4.2    All Arm  packages  must have  exterior  markings in English  which show
         Adept logo, part number and serial number.

3. Pricing and Payment

3.1.     Pricing

         The prices applicable to the ARMs and maintenance PARTs purchased under
         this  agreement  shall be set forth in the attached  Price Schedule and
         Spare Parts Price  Schedule.  Refer to  Appendices  #2 and #3.  Pricing
         shall be firm in US $ Dollars, for a period of sixteen (16) months from
         the date of signing of Agreement. After the

                                  CONFIDENTIAL
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Adept / Yaskawa                                                           Page 3

         initial term of the  agreement,  pricing shall be negotiated  annually.
         Prior pre-agreed  prices shall  automatically  continue into the future
         unless either party  formally  contests in writing.  Negotiated  prices
         stated in the Price  Schedule  and Spare  Parts  Price  Schedule  shall
         reflect the base unit price of the applicable ARM and/or PARTS, without
         the inclusion of shipping,  tariff or other ancillary costs required to
         deliver product per ADEPT's purchase orders. Yaskawa shall invoice each
         shipment for the product  quantities shipped times the applicable Price
         Schedule  or Spare  Parts Price  Schedule  unit price of FOB Japan,  as
         authorized by the  corresponding  ADEPT purchase order. The trade terms
         under this agreement shall be governed and interpreted by and under the
         provisions of latest International commercial Terms (INCOTERMS).

3.2      Payment Terms

         The payment for each shipment  shall be wire  transferred to Yaskawa in
         US $ Dollars 60 days after the Bill of Landing  (B/L) date. If ADEPT is
         delinquent in payment for two consecutive invoices,  payment terms will
         revert to an irrevocable letter of credit at sight.

3.3      Price Schedule Changes

3.3.1    Proposed  changes  in prices  after the  initial 16 month term shall be
         communicated to ADEPT at least 90 days before the effective date of the
         change.  ADEPT  must  agree to any  changes  to the price  schedule  in
         writing  prior to the effective  date. A release  against the new price
         schedule shall be applicable to all orders newly issued after effective
         date of new price schedule

3.3.2    ADEPT shall maintain and modify,  with approved changes as needed,  the
         Price  Schedule and Spare Parts Price  Schedule,  Appendices #1 and #2.
         With each price change,  ADEPT will forward a copy of the revised price
         appendix to Yaskawa.

3.4      Price / Cost Reductions

3.4.1    ADEPT and  Yaskawa  agree  that in order to remain  competitive  in the
         market place for the ARM product line,  continual cost  reductions need
         to be developed to reduce the overall price of the ARMs.  Yaskawa shall
         work with its suppliers and manufacturing  technology to lower the cost
         of manufacturing of the ARMs. ADEPT agrees to assist, to the reasonable
         extent possible,  by working with Yaskawa's  technical staff to develop
         value  engineering  opportunities  to  facilitate  cost  reductions  in
         materials and manufacturing.

3.4.2    Both parties agree, on a case-by-case basis, to accept lower pricing of
         the ARMs

                                  CONFIDENTIAL
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Adept / Yaskawa                                                           Page 4

         to gain resulting incremental business

4. Purchase Orders, Delivery Scheduling, Lead Times and Forecasts

4.1      Lead Times

         Yaskawa  standard  lead time is sixty  (60)  calendar  days or less for
         delivery of the ARMs.  Yaskawa will make its best effort to reduce lead
         times for  particular  orders where  ADEPT's  ability to make a sale is
         based on quick  delivery.  Delivery  is  defined  as the Bill of Lading
         date.

4.2      Anticipated  Ordering Level

         Purchase of the ARMs shall be for a minimum of ten (10) units per order
         of any combination.

4.3      Purchase Order

         Only actual  signed ADEPT  Purchase  Orders shall be  considered as the
         purchasing commitment. Yaskawa shall promptly acknowledge within 3 days
         in writing via fax, all purchase order  exclusive of weekends and Japan
         holidays.  In the event of  conflict  between the  individual  purchase
         order terms and  conditions of this  agreement,  the provisions of this
         agreement will prevail.

4.4      Forecast and Order Release

         By the  end of each  month,  ADEPT  will  provide  Yaskawa  via fax the
         following information.

4.4.1    A monthly  forecast  covering a 9 month  outlook  will be  supplied  by
         ADEPT's  Purchasing  organization and will be updated with every master
         forecast  change.  Purchase  order  will  then be  issued  by ADEPT and
         Yaskawa will  acknowledge  scheduled  ship dates  accordingly.  Yaskawa
         shall be expected to have  supplier  support  and  production  capacity
         flexibility  to be able to  successfully  respond  to  potential  ADEPT
         customer  upswing's  in  demand up to thirty  percent  (30%)  within 30
         calendar days.

4.4.2    The forecasts and revised  forecasts  provided to Yaskawa by ADEPT will
         be ADEPT's best efforts to estimate market demand,  thus shall not be a
         binding obligation to place orders for ARMs.

4.5      Shipment/Delivery Schedule

         Yaskawa will provide confirmation in writing within 2 to 3 working days
         from shipment from Japan and information  (e.g. actual ship dates, ship
         carrier,  shipper's way bill number) necessary to confirm and track the
         progress of the

                                  CONFIDENTIAL
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Adept / Yaskawa                                                           Page 5

         shipment by FAX  transmission.  Yaskawa will invoice  ADEPT for the ARM
         shipping  and related  costs to drop ship the ARM to ADEPT's  customer.
         All customer billing will be by ADEPT to ADEPT's customer base.

         An official  interface  and designee  will be identified at Yaskawa and
         ADEPT,   (with  telephone,   fax,  and  mail  addresses)  for  official
         communications between Yaskawa and ADEPT.

4.5.1    All  direct  customer  shipments  shall  be made by  means  of a weekly
         delivery  schedule supplied by ADEPT's  Purchasing  organization by FAX
         (Ref.4.4.1).

4.5.2    Yaskawa shall not deliver items in advance of ADEPT  required  delivery
         dates without prior approval. If earlier deliveries are made, ADEPT may
         elect to return  the items at  Yaskawa's  expense or hold the units and
         delay payment for a corresponding period of time.

4.5.3    ADEPT may cancel  any order if the  request is made at least 6 weeks in
         advance in advance of  scheduled  ship date.  ADEPT is liable  only for
         unique  raw  material  that is in Yaskawa  inventory  in support of the
         purchase order quantity being canceled.

4.5.4    This agreement does not authorize Yaskawa to deliver any items. Yaskawa
         will be  authorized  to  deliver  and ADEPT will be  obligated  to take
         receipt of only those items which are  scheduled  for  delivery on open
         authorized purchase orders issued by ADEPT's Purchasing organization.

5. Warranty

         The warranty  assumes  that  "normal  use" occurs and the  equipment is
         maintained to specification,  less reasonable use and wear and tear for
         the application intended.

5.1      Product Warranty

         Yaskawa  warrants  the ARM to be free from defects for a period of (12)
         twelve  months from the date of  installation,  or for a period of (18)
         eighteen months from the date of the Bill of Landing, whichever expires
         first (hereinafter referred to as "warranty period").

5.2      Warranty Obligation

         Yaskawa's warranty  obligation will be to ship at no charge to ADEPT an
         exchange  replacement  within  three  (3)  working  days for any  field
         replacement part or

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Adept / Yaskawa                                                           Page 6

         subassembly  found to be defective  during the warranty  period.  ADEPT
         will return or scrap defective parts and or  subassemblies at Yaskawa's
         direction.  Yaskawa  will  pay  the  cost  of  transportation  in  both
         directions for the defective parts.

5.3      Major Defects

         Yaskawa will  specify the standard  time to replace each PART listed in
         the Spare  Parts List,  in Appendix  #3.  Substantial  repair  shall be
         defined as "over 10% of the units  shipped in the prior three months or
         require  more  than  four man hours  per unit to  replace  in  warranty
         period". In such cases of substantial repair, ADEPT may, at its option,
         return the entire  ARM,  subassembly  or parts to Yaskawa for repair or
         replacement at Yaskawa's expense including transportation both ways.

5.4      Training

         Yaskawa will provide maintenance and repair training to ADEPT personnel
         and any third  party  people with whom ADEPT  contracts  to service the
         ARMs, at Yaskawa's  factory in Japan.  ADEPT shall send at least one of
         its Field Service  engineers to Yaskawa's  factory to receive  training
         for 5 working days at ADEPT expense. ADEPT shall pay Yaskawa ($600) six
         hundred  dollars per man-day.  If the training is held at ADEPT,  ADEPT
         shall  reimburse  Yaskawa for the expense of  transportation,  room and
         board in US $ Dollars  per day.  An initial  training  course  shall be
         scheduled at the conclusion of this agreement. A training course may be
         performed once per year on a date to be mutually agreed upon.

5.5      Dead on Arrival  (DOA) and Infant  Mortality  Performance  and Warranty
         Coverage

         ARM PARTS and  replacement  PARTS that are DOA or have infant  morality
         rates  over an 18 month  period  should be less than  0.1%  except  for
         abnormal  transportation  damage.  Packaging  must be able to withstand
         normal industry shipping (air, ship, rail, and truck)  requirements for
         vibration, shock, temperature and humidity.

5.6      Replacement  PARTS,  Re-manufactured,  and Repaired  Replacement  PARTS
         Warranty.

         All replacement, re-manufactured and repaired parts within the warranty
         period  shall  have  the  same  life  expectancy  as a  new  part.  All
         replacement parts,  re-manufactured  and repaired out of warranty shall
         have a 12 months warranty.

6.       ARM PARTS, Repair Service, and Maintenance

6.1      General Spare Replacement PARTS

         All PARTS  required  for the ARMs sold to ADEPT  shall be listed in the
         Spares

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Adept / Yaskawa                                                           Page 7

         Parts Pricing Schedule.  Refer to Appendix #3. All spares must be fully
         tested to meet the specification.

6.2      Spare  Parts  Inventory  to Respond to Customer  Needs

         ADEPT  agrees to maintain a minimum set of key spare parts  recommended
         by  Yaskawa.  However,  Yaskawa  agrees to maintain a level of stock of
         spare and  replacement  parts  which  will  allow it to ship  emergency
         replacements  of any  part  within  3  working  days  of  notification.
         Notification  by ADEPT for emergency  parts shipment orders may be made
         via FAX,  telephone,  or E:Mail.  Emergency  shipments  will be via air
         freight. ADEPT will define to whom and where to ship the part(s). ADEPT
         will make its best efforts to advise and encourage  their  customers to
         maintain an adequate  level of  replacement  parts  (spares) to support
         their installed base of ADEPT equipment.

6.3      Part Revision Control

6.3.1    Yaskawa agrees to maintain records of the revision levels for all parts
         and relate the part revision  level to the serial number of each ARM it
         has shipped to ADEPT.  These  records are to be sent upon  request from
         ADEPT.  Yaskawa shall strive to design all new revisions to be backward
         compatable.

6.3.2    Yaskawa  shall  inform  ADEPT of any  revision  which  is not  backward
         compatable.  When these  cases  exist,  Yaskawa  will stock  sufficient
         quantities  of prior  revision  level  parts to meet any future  repair
         requirements for products in the field.

6.4      Re-manufactured PARTS Usage

6.4.1    Only new parts can be employed  in new  products  and new  spares.  Re-
         manufactured  or used parts can not be used for new  product  and spare
         sales.  Yaskawa may use either new or re-manufactured  parts to replace
         warranty or out- of warranty returns.

6.4.2    Re-manufactured  parts can be used instead of repairing a returned part
         for repair unless the customer's order explicitly forbids such.

6.4.3    Parts  returned  for  re-manufacturing  must be repaired  and  returned
         within:

                 Type of Part                                   Calendar  Days
                 ------------                                   --------  ----

                 Directly  repairable in Yaskawa's factory          20 days
                 Repairable  by a  supplier  to  Yaskawa            40 days

6.4.4    Yaskawa shall segregate all reworked or used parts or products from the
         inventory of parts sold to ADEPT for new product or spare parts sales.

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Adept / Yaskawa                                                           Page 8

6.5      Spare Part Packaging

         All  products  and spare  parts will be packaged in a manner to prevent
         any shipping damage and allow safe storage and handling.  All products,
         spare or replacement parts must have exterior markings in English which
         clearly show quantity, ADEPT's part number and revision level. Any used
         or re-manufactured parts must be marked "Re-manufactured".

6.6      Refurbishment of Used ARMs.

         ADEPT  shall have the right of purchase  and sale used and  refurbished
         ARMs originally manufactured by Yaskawa under contract to ADEPT in case
         of refurbishment  Yaskawa's obligation of warranty will be released. At
         the request of ADEPT, Yaskawa will provide  refurbishment  servicing of
         used ARMs for ADEPT.

7.0      Product Change Management

7.1      Configuration Control

         Yaskawa  will  formally  notify  ADEPT in writing  and  obtain  ADEPT's
         approval of any design  change  involving  form,  fit or  function  for
         mechanical,  electrical,  and their spare PARTS.  ADEPT will respond to
         the change request within 30 days.

7.2      Product Changes

         If for any reason compatibility is not possible,  the impact to ADEPT's
         customer  base must be assessed and  discussed  with ADEPT.  ADEPT will
         expect that all spares will be upgraded within six (6) months through a
         recycle  program and all other PARTS will be upgraded  and/or  replaced
         upon failure. These changes will be made at Yaskawa's expense.

7.3      Configuration Revision Level Compatibility Matrix

         Yaskawa  will  supply  ADEPT  with  a  revision   level   configuration
         compatibility  matrix to ADEPT's  specification  covering  the ARMs and
         spare PARTS.

8.       Obsolescence

8.1      Parts supply and repair period

         For all products sold to ADEPT under this agreement,  Yaskawa agrees to
         support service and parts  replacement for at least seven and 1/2 (7.5)
         years after Yaskawa's final ARM production shipment to ADEPT.

8.2      Yaskawa agrees to obtain ADEPT's concurrence on the obsolescence on any

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Adept / Yaskawa                                                           Page 9

         product and/or part covered by this  agreement.  If concurrence can not
         be reached,  Yaskawa agrees to maintain  either repair service or a new
         supply  of  the  subject   product  and/or  part  for  7.5  years  from
         notification.

9.       Documentation

9.1      Documentation

9.1.1    Yaskawa will provide  manuscript and technical  illustrations  in fully
         converted English for all products sold to ADEPT for incorporation into
         ADEPT's user and service manuals at no cost.

9.1.2    Documentation  for the ARMs will be provided to ADEPT at least four (4)
         weeks before the first customer  deliverable  shipment of ARMs. Yaskawa
         grants  ADEPT  the  right  to  reproduce  in  part  or  in  total  this
         documentation  for sales and service  literature  and manuals.  Yaskawa
         shall not be  responsible  for the  documentation  reproduced by ADEPT.
         Documentation  will be provided in the form of electronic copy with the
         format  compatible with  Windows95,  Microsoft Word Office 97 or later,
         using ADEPT's standard manual format.

9.2      Specific  documentation  shall  include  but  not  be  limited  to  the
         following:

         A)  Service  manual  for  ARMs  including  mechanical   assemblies  and
         schematics.

         B) Spare parts lists for ARM.

         C) Trouble shooting guide for ARM.

         D) Mechanical and electrical specifications for ARM.

         E) Assembly drawings

         F) User preventive maintenance

10.      Inspection and Testing

10.1     Factory Calibration and Testing

         Yaskawa shall conduct  factory  calibration  and perform testing of all
         ARM products in accordance  with  standard  Yaskawa  defined  products.
         Yaskawa shall provide ADEPT copies of all factory  calibration and test
         procedures and shall notify ADEPT of all future changes.  Yaskawa shall
         maintain  record of calibration  data and test results for all ARMS and
         shall  supply ADEPT  copies of  documentation  within five working days
         upon request.  Prior to each ARM  shipment,  Yaskawa shall supply ADEPT
         calibration   data  in  a   mutually   agreed   format  and  method  of
         communication.

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Adept / Yaskawa                                                          Page 10

10.2     Inspection

         ADEPT shall have the right to periodically inspect Yaskawa's production
         process for products  sold to ADEPT at  Yaskawa's  facility as mutually
         agreed upon within ten days notice before any visit. ADEPT shall retain
         the right to verify test results and  acceptance of any product  before
         it is shipped from Yaskawa's facility. Refer to See Appendix #4.

10.3     Quality Data

         Yaskawa agrees to provide manufacturing quality,  manufacturing process
         and  reliability  data for the products  covered by this  agreement per
         Appendix #4.

11.      Indemnity

11.1     Yaskawa will defend, at its expense,  any claim or suit brought against
         ADEPT, or any ADEPT customer using products originally  manufactured by
         Yaskawa,  based  on  claim  that  the  use  of  any  product  delivered
         constitutes  an  infringement  of a  patent,  copyright,  or any  other
         intellectual  property  right  issued by an country in which ADEPT does
         business.  Yaskawa will indemnify ADEPT and ADEPT's  customers from any
         costs,  damages and fees  finally  awarded  against  ADEPT in an action
         attributable  to such a claim,  including  any legal fees  incurred  by
         ADEPT to defend  itself.  ADEPT will notify  Yaskawa for prior approval
         for such legal action.

12.      Product and Business Confidentiality

         The  partnership,  product  assembly and working  relationship  between
         ADEPT and  Yaskawa  are  mutually  considered  a special  relationship.
         Information or disclosed  knowledge which is identified as confidential
         by giving  party to be  Company  Confidential,  especially  related  to
         potential new  products,  new or changing  product  markets and related
         business actions and conditions. It is expected, as an integral part of
         the contractual and partnership relationship, that such discussions, or
         transmitted or otherwise disclosed information,  which is identified as
         confidential  by giving  party,  should be treated as strictly  Company
         Confidential  between both  parties,  their  employees  and  applicable
         suppliers.  Notwithstanding the above confidential information does not
         include  any  information  which is already in the public  domain or is
         already owned by the receiving party prior to disclosure.

12.1     Customer List Confidentiality

         Yaskawa will not disclose to any outside  party any  information  about
         ADEPT's  customer base or business.  Yaskawa is  prohibited  from using
         such disclosed

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Adept / Yaskawa                                                          Page 11

         ADEPT customer base names and key contacts to advertise,  promote, sell
         or market  its own  products  through  any  verbal or  written or other
         transmitted  medium without specific  advance written  authorization of
         ADEPT.

12.2     ADEPT Customer Contact and Business Competitive Restrictions

         Yaskawa agrees not to use this  relationship  as a means to contact any
         ADEPT customer without the formal prior written  agreement of ADEPT. If
         the customer  relationship had been established by Yaskawa prior to the
         execution this business agreement, this restriction will not apply.

12.3     Proprietary Information

12.3.1   Proprietary  information will be identified by written  notification by
         either party to the other,  prior to  disclosure,  Each party agrees to
         treat the other party's Proprietary  Information in a manner similar to
         how it treats its own Proprietary  Information  during the initial term
         and any renewal  terms of this  Agreement and for three (3) years after
         its expiration or sooner termination,  and will not use the Proprietary
         Information  outside  people within its company who have a need to know
         without the other permission.

12.3.2   Obligations to protect the others'  Proprietary  Information  shall not
         apply to the extent such information;  (a) was in the recipient party's
         lawful and  unrestricted  possession  prior to  disclosure by the other
         party as evidenced by written record; (b) is generally available to the
         public;  (c) has been  received  lawfully  and in good  faith by either
         party,  from a third party who did not  receive it from the  disclosing
         party; or (d) is independently  developed the by the recipient  without
         reference to the Proprietary  Information and without  violation of any
         confidentially restriction.

12.4     Non-Disclosure

         Neither party will disclose the terms or contents of this  Agreement to
         any third party except as mutually  agreed,  or as required by statute,
         regulation, or court order.

12.5     Public Disclosure

         All public disclosure of any terms of our relationship for publicity or
         business  purposes  by either  company  must be reviewed  and  mutually
         agreed by ADEPT and Yaskawa prior to disclosure.

13.      Technical Communications

         Technical  discussions  related to this Agreement and related  products
         between the ADEPT's and  Yaskawa's  engineering,  manufacturing  and/or
         quality personnel, are

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Adept / Yaskawa                                                          Page 12

         hereby authorized to preclude  misunderstandings or misinterpretations.
         However,  all  changes  in the  contractual  scope of work,  pricing or
         delivery schedule, materials or data related to this Agreement shall be
         effective  only if mutually  agreed by a ADEPT  purchase  order  change
         order and Yaskawa order acknowledgment, or a duly executed amendment to
         this Agreement.

14.      Assignments and Delegations

         This  agreement  shall be mutually  beneficial  and be binding upon the
         parties and their  respective  successors and assignees.  Neither party
         shall assign or delegate  this  Agreement or any rights,  privileges or
         obligations  under this Agreement  without the prior written consent of
         the other party.  Notwithstanding the foregoing,  no such consent shall
         be required for any such  assignment  of delegation by a party which is
         part of or  incident  to the sale or other  transfer,  whether by sale,
         merger,  consolidation,  or other corporate  reorganization,  of all or
         substantially  all of such party's assets and business,  so long as the
         assignees or successor  shall be a corporation  owning or retaining all
         or substantially all of such assets and business and shall have assumed
         all of such party's obligations under this agreement except as the said
         successors and assignees or their Licenser, license, affiliated company
         complete with the other party.

15.      Term and Termination

15.1     Initial Term

         The Initial  Term of this  Agreement  shall be sixteen  (16) month from
         date of signing.  Unless specifically  formally contested in writing by
         either party, this agreement will  automatically  extend in twelve (12)
         month increments. This agreement will not extend beyond ten (10) years.
         Given this  agreement  is contested  by either  party,  or both parties
         hereto shall  discuss with each other the  extension or  expiration  of
         this  Agreement  in  good  faith  six (6)  months  prior  to the  above
         expiration date. If both parties cannot reach agreement, this Agreement
         will expire on said date.

15.2     Defaults

         If either party  defaults in the  performance  of any provision of this
         Agreement,  then the  non-defaulting  party must give written notice to
         the  defaulting  party and the  defaulting  party has sixty(60) days to
         cure the default.

15.3     Compensation

         In the event  either  party  fails to cure any  defaults as outlines in
         paragraph 15.2,

                                  CONFIDENTIAL
<PAGE>

Adept / Yaskawa                                                          Page 13

         the other party shall be due  compensation  in an amount equal to their
         actual  investment in this program or the profit margins on anticipated
         sales for the  balance  of the term of this  agreement,  which  ever is
         greater. A maximum amount of compensation will be established.

15.4     Termination

         Upon   termination  of  this  Agreement   whether  as  provided  or  by
         operational of law or otherwise,  all obligation  undertaken  hereunder
         shall terminate except:

         A) Yaskawa's  of its  obligations  under  section  5,  6,  or 7 of this
            Agreement  which deal with  warranty and service of products sold to
            ADEPT prior to the termination of this Agreement.

         B) Yaskawa's  obligation  to  deliver to ADEPT all orders for the ARM's
            accepted by Yaskawa prior to the effective date of termination.

         C) ADEPT's  obligation  to pay any  amount  which was or became  due to
            Yaskawa prior to termination, or is to become due after termination.

15.5     Manufacturing Agreement

         ADEPT will have all the right to  manufacture  ARMs if Yaskawa  becomes
         insolvent (no longer in business) or is no longer  manufacturing  ARMs.
         In such a case,  ADEPT agrees to pay royalty at a rate mutually  agreed
         upon at later date.

16.      Force Majeure

         Neither party shall be liable for any  obligation  under this Agreement
         if  fulfillment of any such  obligation  has been delayed,  hindered or
         prevented by force majeure,  including strikes,  riots, civil commotion
         or any circumstances  beyond the reasonable  control of the parties  to
         this  Agreement,  provided that the  suspension of  fulfillment  of any
         obligation  under  this  Agreement  shall be  limited  to the  duration
         necessary for removal of the effects of the force majeure.

17.      Applicable Law, Jurisdiction and Venue, and Attorney's Fees

17.1     Law

         This Agreement  shall be governed by and interpreted in accordance with
         the laws of the land. ADEPT and Yaskawa will work out a fair settlement
         between  the two  parties.  If one  cannot  be  reached,  it will go to
         arbitration.  This arbitration will be held in the defending  company's
         country in accordance with the Rules of Conciliation and Arbitration of
         the  International  Chamber of Commerce.  The  arbitration  proceedings
         shall be binding and conclusive upon the parties hereto.

                                  CONFIDENTIAL
<PAGE>

Adept / Yaskawa                                                          Page 14

17.2    Fees

         Reasonable attorney's fees and costs shall be awarded to the prevailing
         party  in  the  event  of  arbitration  involving  the  enforcement  or
         interpretation  of the Agreement.  Such fees and costs shall be decided
         by the arbitrator(s).

18.      Miscellaneous

18.1     This  Agreement  and all  notices,  reports,  documentation,  or  other
         communications hereinafter shall be in English language, and in case of
         any conflict between the English version and any translated  version of
         this  Agreement or any such  communication,  the English  version still
         govern.

18.2     Failure of either  party to enforce a provision  of this  Agreement  or
         waiver by either  party of a breach of a  provision  of this  Agreement
         shall not be construed as waiver of a succeeding  breach or  provision.
         If any provision is held to be invalid or unenforceable, the invalidity
         shall not affect the validity of the remaining provisions.  The parties
         may also  agree  to  substitute,  for the  invalid  provision,  a valid
         provision that most closely approximates the intent and economic effect
         of the invalid provision.

                                  CONFIDENTIAL
<PAGE>

Adept / Yaskawa                                                          Page 15

19.      Entire Agreement

         This  Agreement  constitutes  and  expresses  the entire  agreement and
         understanding  between  the  parties  hereto  with  respect  to all the
         matters  herein  referred  to.  All  previous   discussion,   promises,
         agreements,  memoranda,  representations,  and  understanding  relative
         thereto,  if any, had between the parties hereto,  are herein merged or
         superseded.

ADEPT TECHNOLOGY, INC                        YASKAWA Electric Corporation

Executed: /s/ Marcy Alstott                  Executed: /s/ Koji Toshima
          --------------------------                   -----------------------
Officer:      Marcy Alstott                  Officer:      Koji Toshima
Title:        V.P. Operations                Title:        Managing Director &
                                                           General Manager
                                                           Robotics Division
On:   August 29, 2000                        On:     August 29, 2000

                                  CONFIDENTIAL
<PAGE>
Adept / Yaskawa                                                          Page 16

                            Appendices to Agreement
--------------------------------------------------------------------------------

Appendix #1    Product Specifications
Appendix #2    Price Schedule
Appendix #3    Spare Parts Price Schedule
Appendix #4    Quality Planning

                                  CONFIDENTIAL

<PAGE>

Adept / Yaskawa                                                          Page 17

                         Adept / Yaskawa OEM Agreement
                                  Appendix #2
                                 Price Schedule
                 Prices are hereby established for each model*

--------------------------------------------------------------------------------
          Model                              Unit Price $(US)
          -----                              ----------------

          ****                                     ****

--------------------------------------------------------------------------------
                                    Table 1

*With Mutually Agreed Conditions as stated below

1)   Currency  is in US $ and  will be  adjusted  up or down  based  on a 10 Yen
     incremental movement from a targeted Yen rate of 105 Yen/Dollar. Base Rate:
     105 Yen/Dollar (see Table 2)

2)   FOB Japan.

3)   Price includes packaging.

4)   Exchange Rate determined by Yahoo on-line exchange rate.

                                  CONFIDENTIAL

<PAGE>
Adept / Yaskawa                                                          Page 18

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
     Product Price       Exchange Rate       Yen Per Dollar
         Table
-----------------------------------------------------------------------------------------------
<S>       <C>            <C>            <C>            <C>            <C>           <C>
Product                                    ****

-----------------------------------------------------------------------------------------------
                                         Table 2
-----------------------------------------------------------------------------------------------
</TABLE>

                                       CONFIDENTIAL

<PAGE>
Adept / Yaskawa                                                          Page 19

                         Adept / Yaskawa OEM Agreement
                                  Appendix #3
                           Spare Parts Price Schedule

                        To Be Finalized by Both Parties
                                      and
                         Provided Under Separate Cover

                                  CONFIDENTIAL

<PAGE>
Adept / Yaskawa                                                          Page 20

                         Adept / Yaskawa OEM Agreement
                                  Appendix #4
                             Adept Quality Planning

                        To Be Finalized by Both Parties
                                      and
                         Provided Under Separate Cover

                                  CONFIDENTIAL

<PAGE>Exhibit 4.4

                              CONDOR SYSTEMS, INC.

                      1999 MANAGEMENT STOCK INCENTIVE PLAN

                       EFFECTIVE AS OF DECEMBER 14, 1999

<PAGE>

                              CONDOR SYSTEMS, INC.
                      1999 Management Stock Incentive Plan

     SECTION 1. Purpose. The purposes of the Condor Systems, Inc. 1999
Management Stock Incentive Plan are to promote the interests of the Company and
its shareholders by (i) attracting and retaining exceptional executive
personnel and other key employees of the Company and its Subsidiaries, as
defined below; (ii) motivating such employees by means of performance-related
incentives to achieve longer-range performance goals; and (iii) enabling such
employees to participate in the long-term growth and financial success of the
Company. The provisions of the Plan shall cover the Awards issued under the
Plan and certain provisions of the Plan will apply to Rollover Shares, as
hereinafter defined.

     SECTION 2. Definitions. As used in the Plan, the following terms shall
have the meanings set forth below:

     "Affiliate" means (i) any entity that is, directly or indirectly,
controlled by the Company and (ii) any other entity in which the Company has a
significant equity interest or which has a significant equity interest in the
Company, in either case as determined by the Compensation Committee.

     "Award" means any Option.

     "Award Agreement" means any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.

     "Board" means the Board of Directors of the Company.

     "Cause" means "cause" as defined in any Employment Agreement or Award
Agreement, or if not so defined:

     (a) a Participant's willful and continued failure substantially to perform
his or her duties (other than as a result of total or partial incapacity due to
physical or mental illness);

     (b) an act or acts on a Participant's part constituting a felony under the
laws of the United States or any state thereof or any other jurisdiction in
which the Company conducts business;

     (c) a Participant being repeatedly under the influence of illegal drugs or
alcohol while performing his or her duties; or

     (d) any other act or omission which is materially injurious to the
financial condition or business reputation of the Company or any of its
Affiliates as determined in the sole discretion of the Compensation Committee,
including a Participant's breach of the provisions of any non-competition,
non-solicitation or confidentiality covenant in favor of the Company or its
Affiliates binding upon such Participant.

<PAGE>

     "Change of Control" shall mean, unless otherwise defined in any Employment
Agreement or Award Agreement,

          (i) any "person" (as such term is used in Section 3(a)(9) and
     13(d)(3) of the Exchange Act) other than (A) the DLJMB Entities and/or
     their respective Permitted Transferees (as defined in the Investors'
     Agreement) or (B) any "group" (within the meaning of such Section
     13(d)(3)) of which any of the DLJMB Entities is a part, acquires, directly
     or indirectly, by virtue of the consummation of any purchase, merger or
     other combination, securities of the Company representing more than 51% of
     the combined voting power of the Company's then outstanding voting
     securities with respect to matters submitted to a vote of the shareholders
     generally; provided that such acquisition achieves a minimum value per
     diluted common share of the Company as described in Attachment I; or

          (ii) a sale or transfer by the Company or any of its Subsidiaries of
     substantially all of the stock or consolidated assets of the Company and
     its Subsidiaries to an entity which is not an Affiliate of the Company
     prior to such sale or transfer; provided that such sale or transfer
     achieves a minimum value per diluted common share of the Company as
     described in Attachment I.

     "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

     "Company" means Condor Systems, Inc., a California corporation.

     "Compensation Committee" means a committee of the Board designated by the
Board to administer the Plan and composed of not less than the minimum number
of persons from time to time required by Rule 16b-3 and Section 162(m), each of
whom, to the extent necessary to comply with Rule 16b-3 and Section 162(m)
only, is a "Non-Employee Director" and an "Outside Director" within the meaning
of Rule 16b-3 and Section 162(m), respectively.

     "Disability" shall mean a Participant's inability, as a result of physical
or mental illness, to perform the duties of his or her position(s) for a period
of 90 consecutive days or for an aggregate of 150 days in any twelve
consecutive month period. Any question as to the existence of the Disability of
a Participant as to which such Participant and the Company cannot agree shall
be determined in writing by a qualified independent physician selected by the
Company and reasonably acceptable to the Participant. The determination of
Disability made in writing to the Company and the Participant shall be final
and conclusive for all purposes of the Plan.

     "Employee" means any individual who is a common-law employee of the
Company or any Subsidiary.

     "Employment Agreement" means an employment, severance, consulting, or
similar agreement between the Company or any Subsidiary and a Participant.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Fair Market Value" means with respect to the Shares, as of the
consummation of the merger of the Company and WDC Acquisition Corp., $1.00 per
share, and as of any other given

                                       2
<PAGE>

date or dates, the average reported closing price of a share of such class of
common stock on such exchange or market as is the principal trading market for
such class of common stock for the three trading days immediately preceding
such date or dates. If such class of common stock is not traded on an exchange
or principal trading market on such date, the fair market value of a Share
shall be determined by the Compensation Committee in good faith taking into
account, as appropriate, recent sales of the Shares, recent valuations of the
Shares and such other factors as the Compensation Committee shall in its
discretion deem relevant or appropriate.

     "Good Reason" means "Good Reason", as defined in any Employment Agreement
or Award Agreement, or if not so defined,:

     (A) A Participant's removal from his/her position or assigned duties and
responsibilities materially inconsistent with his/her position; or

     (B) One or more reductions of more than 10% in the aggregate in a
Participant's base salary and benefits (including target bonus opportunities
and criteria but not actual bonus payments), except for across-the-board
reductions similarly affecting similarly situated employees.

     "Investors' Agreement" means the Investors' Agreement dated as of April
15, 1999 among Condor Systems and the several Shareholders (as defined therein)
from time to time parties thereto.

     "Option" means a right to purchase Shares from the Company that is granted
under Section 6 of the Plan. Options granted under the Plan are not intended to
be "incentive stock options" within the meaning of Code section 422.

     "Participant" means any Employee, non-employee director or consultant to
the Company or any Subsidiary selected by the Compensation Committee to receive
an Award under the Plan.

     "Permitted Transferee" shall have the meaning assigned to it in the
Investors' Agreement.

     "Person" means any individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, government or political subdivision thereof or other entity.

     "Plan" means this Condor Systems, Inc. 1999 Management Stock Incentive
Plan.

     "Rule 16b-3" means Rule 16b-3 as promulgated and interpreted by the SEC
under the Exchange Act, or any successor rule or regulation thereto as in
effect from time to time.

     "SEC" means the Securities and Exchange Commission or any successor
thereto.

     "Section 162(m)" means Section 162(m) of the Code, or any successor
section thereto as in effect from time to time.

                                       3
<PAGE>

     "Securities Act" means the Securities Act of 1933, as amended.

     "Shares" means shares of Class A common stock, $.01 par value, of the
Company and/or such other securities as may be designated by the Compensation
Committee from time to time.

     "Subsidiary" shall mean, with respect to any Person, any corporation or
other entity of which fifty percent (50%) or more of the combined voting power
of all classes of securities or other ownership interests are at the time owed
by such Person.

     "Substitute Awards" means Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by a company acquired
by the Company or with which the Company combines.

     "10-Percent Shareholder" means an individual who owns more than ten
percent (10%) of the total combined voting power of all classes of outstanding
stock of the Company, its parent or any of its subsidiaries. In determining
stock ownership, the attribution rules of section 424(d) of the Code shall be
applied.

     SECTION 3. Administration.

     (a) Authority of Compensation Committee. The Plan shall be administered by
the Compensation Committee. Subject to the terms of the Plan, applicable law
and contractual restrictions (including, without limitation, the Employment
Agreements) affecting the Company, and in addition to other express powers and
authorizations conferred on the Compensation Committee by the Plan, the
Compensation Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to a
Participant; (iii) determine the number of Shares to be covered by, or with
respect to which payments, rights, or other matters are to be calculated in
connection with, Awards; (iv) determine the terms and conditions of any Award
and Award Agreement; (v) determine whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited, or
suspended and the method or methods by which Awards may be settled, exercised,
canceled, forfeited, or suspended; (vi) determine whether, to what extent, and
under what circumstances cash, Shares, other securities, other Awards, other
property, and other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the holder thereof or of the
Compensation Committee; (vii) interpret and administer the Plan and any
instrument or agreement relating to, or Award made under, the Plan; (viii)
establish, amend, suspend, or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (ix) make any other determination and take any other action that the
Compensation Committee deems necessary or desirable for the administration of
the Plan.

     (b) Compensation Committee Discretion Binding. Unless otherwise expressly
provided in the Plan, all designations, determinations, interpretations, and
other decisions under or with respect to the Plan or any Award shall be within
the sole discretion of the Compensation Committee, may be made at any time and
shall be final, conclusive and binding upon all Persons, including the Company,
any Subsidiary, any Participant, any holder or beneficiary of any Award, any
shareholder and any Employee.

                                       4
<PAGE>

     SECTION 4. Shares Available for Awards.

     (a) Shares Available. Subject to adjustment as provided in Section 4(b)
and 4(c), the number of Shares with respect to which Awards may be granted
under the Plan shall be 4,600,000. If, after the Plan's effective date as
provided in Section 11(a), any Shares covered by an Award granted under the
Plan other than a Substitute Award or a Rollover Share or to which such an
Award relates are forfeited, or if such an Award is settled for cash or
otherwise terminates or is canceled without the delivery of Shares, then the
Shares covered by such Award, or to which such Award relates, or the number of
Shares otherwise counted against the aggregate number of Shares with respect to
which Awards may be granted, to the extent of any such settlement, forfeiture,
termination or cancellation, shall again become Shares with respect to which
Awards may be granted. In addition, Shares tendered in satisfaction or partial
satisfaction of the exercise price of any Award or any tax withholder
obligations, other than the exercise price or tax withholding obligation
relating to a Substitute Award or Rollover Share, will again become Shares with
respect to which Awards may be granted. Notwithstanding the foregoing and
subject to adjustment as provided in Section 4(b), no Employee may receive
Options in any calendar year that relate to more than 3,000,000 Shares.

     (b) Adjustments. In the event that the Compensation Committee determines
that any dividend or other distribution (whether in the form of cash, Shares,
other securities or other property), recapitalization, stock split, reverse
stock split, reorganization, reclassification, merger, consolidation, split-up,
spin-off, combination, repurchase, or exchange of Shares or other securities of
the Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company, or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Compensation
Committee to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan,
then the Compensation Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number of Shares of the Company (or number and
kind of other securities or property) with respect to which Awards may
thereafter be granted, (ii) the number of Shares or other securities of the
Company (or number and kind of other securities or property) subject to
outstanding Awards, and (iii) the grant or exercise price with respect to any
Award, or, if deemed appropriate, make provision for a cash payment to the
holder of an outstanding Award.

     (c) Substitute Awards. Any Shares underlying Substitute Awards shall not
be counted against the Shares available for Awards under the Plan.

     (d) Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.

     SECTION 5. Eligibility. Any Employee, non-employee director of the Company
or any Subsidiary, or consultants and any Employee or director of the Company
receiving a Rollover Share, shall be eligible to be designated a Participant.

                                       5
<PAGE>

     SECTION 6. Stock Options.

     (a) Award Agreement. Each Award under the Plan shall be evidenced by an
Award Agreement, the form of such agreement is attached hereto as Attachment II
and/or Attachment III, between the Participant and the Company. Each Option
shall be subject to all applicable terms and conditions of the Plan and may be
subject to any other terms and conditions that are not inconsistent with the
Plan and that the Compensation Committee deems appropriate for inclusion in a
Award Agreement. The provisions of the various Award Agreements entered into
under the Plan need not be identical. An Award Agreement may provide that new
Options will be granted automatically to the Participant when he or she
exercises the prior Options.

     (b) Number of Shares and Exercise Price. Each Award Agreement shall
specify the number of Shares that are subject to the Option and shall provide
for the adjustment of such number in accordance with Section 4(b). An Option's
exercise price shall be established by the Compensation Committee and set forth
in an Award Agreement.

     (c) Exercise. Each Option shall be exercisable at such times and subject
to such terms and conditions as the Compensation Committee may, in its sole
discretion, specify in the applicable Award Agreement or thereafter. The
Compensation Committee may impose such conditions with respect to the exercise
of Options, including without limitation, any relating to the application of
Federal or state securities laws, as it may deem necessary or advisable. The
Award Agreement shall also specify the term of the Option; provided that such
term, to the extent required by applicable law, shall in no event exceed ten
(10) years from the date of Award. An Award Agreement may provide for
accelerated exercisability in the event of the Participant's death, Disability
or retirement or other events and may provide for expiration prior to the end
of its term in the event of the termination of the Participant's employment or
service. In no event shall the Company be required to issue fractional Shares
upon the exercise of an Option.

     (d) Payment. No Shares shall be delivered pursuant to any exercise of an
Option until payment in full of the exercise price, or adequate provision
therefor, is received by the Company. Such payment may be made: (i) in cash;
(ii) in Shares owned by the Participant (the value of such Shares shall be
their Fair Market Value on the date of exercise); (iii) by a combination of
cash and Shares; (iv) if approved by the Compensation Committee, in accordance
with a cashless exercise program; or (v) in such other manner as permitted by
the Compensation Committee at the time of grant or thereafter.

     SECTION 7. Termination or Suspension of Employment or Service. The
following provisions shall apply in the event of the Participant's termination
of employment or service unless provided otherwise in an Employment Agreement
or by the Compensation Committee at the time of the grant of the Award or
thereafter.

     (a) Termination of Employment or Service. Except as the Compensation
Committee may at any time otherwise provide or as required to comply with
applicable law, if the Participant's employment or service with the Company or
its Subsidiaries is terminated for any reason other than for Cause, the vested
portion of such Option shall expire, on the earlier of (A) the ninetieth day
following such termination of employment or service or (B) the date such

                                       6
<PAGE>

Option would have expired had it not been for the termination of employment or
service. The Participant shall have the right to exercise such Option prior to
such expiration only to the extent it was exercisable at the date of such
termination of employment or service. Any unvested Options shall be forfeited
for no consideration on the date of termination of employment or service,
except as the Compensation Committee may at any time otherwise provide.

     (b) Cause. If the Participant's employment or service with the Company or
its Subsidiaries is terminated by the Company for Cause, all outstanding
options shall be immediately forfeited.

     (c) Rights of First Refusal and Repurchase. In the event a Participant or
Permitted Transferee or other holder of Shares proposes to sell, pledge, or
otherwise transfer to a third party any Shares acquired under the Plan or any
interest in such Shares, the Company shall have the Right of First Refusal as
provided in the Award Agreement. In the event of a Participant's termination of
employment or service with the Company or its Subsidiaries, the Company or its
designee shall have a right to purchase all of the Shares acquired upon the
exercise of Options, at a per Share price equal to Fair Market Value on the
date of repurchase. If the Company elects to exercise its right of repurchase
under this Section 7(c), the Company shall deliver written notice (a "Purchase
Notice") to the Participant to such effect and will consummate the purchase
within the time period established by applicable law. For purposes of this
Section 7, the "date of repurchase" shall mean the third business day following
the receipt of notice by the Participant that the purchase right is to be
exercised. Payment of the purchase price may be made in cash or by certified
check or through cancellation of purchase money indebtedness.

     SECTION 8. Accelerated Vesting. The Compensation Committee, in its sole
discretion, may provide in an Award Agreement or at any other time for the
accelerated vesting of an Award in the event of a Change of Control.

     SECTION 9. Amendment and Termination.

     (a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided
that no such amendment, alteration, suspension, discontinuation or termination
shall be made without shareholder approval if such approval is necessary to
comply with any tax or regulatory requirement, including for these purposes any
approval requirement which is a prerequisite for exemptive relief from Section
16 of the Exchange Act or Section 162(m), for which or with which the Board
deems it necessary or desirable to qualify or comply. Notwithstanding anything
to the contrary herein, the Compensation Committee may amend the Plan in such
manner as may be necessary so as to have the Plan conform with local rules and
regulations in any jurisdiction outside the United States.

     (b) Amendments to Awards. Subject to the terms of the Plan and applicable
law, the Compensation Committee may waive any conditions or rights under, amend
any terms of, or alter, suspend, discontinue, cancel or terminate, any Award
theretofore granted, prospectively or retroactively, provided that any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would adversely affect the rights of a Participant or any
holder or beneficiary of any Award theretofore granted shall not to that extent
be effective without the consent of the affected Participant, holder or
beneficiary.

                                       7
<PAGE>

     (c) Cancellation. Any provision of this Plan or any Award Agreement to the
contrary notwithstanding, in the event of a Change of Control or an offer to
Participants generally relating to the acquisition of Shares, including through
purchase, merger or otherwise, the Compensation Committee may cause any Award
granted hereunder to be canceled in consideration of a cash payment or
alternative Award made to the holder of such canceled Award that is comparable
in value to such Award.

     SECTION 10. General Provisions.

     (a) Dividend Equivalents. In the sole and complete discretion of the
Compensation Committee, an Award may provide the Participant with dividends or
dividend equivalents, payable in cash, Shares, other securities or other
property on a current or deferred basis.

     (b) Nontransferability. Except to the extent otherwise provided in an
Award Agreement, no Award shall be assigned, alienated, pledged, attached, sold
or otherwise transferred or encumbered by a Participant, except by will or the
laws of descent and distribution

     (c) No Rights to Awards. No Employee, Participant or other Person shall
have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or beneficiaries
of Awards. The terms and conditions of Awards need not be the same with respect
to each recipient.

     (d) Share Certificates. Certificates, if any, issued in respect of Shares
shall, unless the Compensation Committee otherwise determines, be registered in
the name of the Participant or Permitted Transferee and, so long as a
Participant continues to be governed by any forfeiture provisions relating to
the Shares, shall be deposited by such Participant or Permitted Transferee,
together with a stock power endorsed in blank, with the Company. When such
forfeiture conditions lapse, the Company shall deliver such certificates to the
Participant upon request. Such stock certificate shall carry such appropriate
legends, and such written instructions shall be given to the Company's transfer
agent, as may be deemed necessary or advisable by counsel to the Company in
order to comply with the requirements of the Securities Act, any state
securities laws or any other applicable laws. All certificates for Shares or
other securities of the Company or any Subsidiary delivered under the Plan
pursuant to any Award or the exercise thereof shall be subject to such stop
transfer orders and other restrictions as the Compensation Committee may deem
advisable under the Plan or the rules, regulations and other requirements of
the SEC or any stock exchange upon which such Shares or other securities are
then listed and any applicable laws or rules or regulations, and the
Compensation Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.

     (e) Withholding. A Participant may be required to pay to the Company or
any Subsidiary, and the Company or any Subsidiary shall have the right and is
hereby authorized to withhold from any Award, from any payment due or transfer
made under any Award or under the Plan or from any compensation or other amount
owing to a Participant the amount (in cash, Shares, other securities, other
Awards or other property) of any applicable withholding taxes in respect of an
Award, its exercise, or any payment or transfer under an Award or under the
Plan and to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such taxes. The
Compensation Committee may provide for

                                       8
<PAGE>

additional cash payments to holders of Awards to defray or offset any tax
arising from any such grant, lapse, vesting, or exercise of any Award.

     (f) Award Agreements. Each Award hereunder shall be evidenced by an Award
Agreement which shall be delivered to the Participant and shall specify the
terms and conditions of the Award and any rules applicable thereto.

     (g) No Limit on Other Compensation Arrangements. Nothing contained in the
Plan shall prevent the Company or any Subsidiary from adopting or continuing in
effect other compensation arrangements, which may, but need not, provide for
the grant of options, restricted stock, Shares and other types of Awards
provided for hereunder (subject to shareholder approval if such approval is
required), and such arrangements may be either generally applicable or
applicable only in specific cases.

     (h) No Right to Employment. The grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ or service of
the Company or any Subsidiary. Further, the Company or a Subsidiary may at any
time dismiss a Participant from employment or service, free from any liability
or any claim under the Plan, unless otherwise expressly provided in the Plan or
in any Award Agreement.

     (i) Rights as a Shareholder. Subject to the provisions of the applicable
Award, no Participant or holder or beneficiary of any Award shall have any
rights as a shareholder with respect to any Shares to be issued under the Plan
until he or she has become the holder of such Shares.

     (j) Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan and any Award Agreement shall be
determined in accordance with the laws of the State of California.

     (k) Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Compensation Committee, such provision shall be
construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the
Compensation Committee, materially altering the intent of the Plan or the
Award, such provision shall be stricken as to such jurisdiction, Person or
Award and the remainder of the Plan and any such Award shall remain in full
force and effect.

     (l) Other Laws. The Compensation Committee may refuse to issue or transfer
any Shares or other consideration under an Award if, acting in its sole
discretion, it determines that the issuance or transfer of such Shares or such
other consideration might violate any applicable law or regulation or entitle
the Company to recover the same under Section 16 of the Exchange Act, and any
payment tendered to the Company by a Participant in connection therewith shall
be promptly refunded to the relevant Participant, holder or beneficiary.
Without limiting the generality of the foregoing, no Award granted hereunder
shall be construed as an offer to sell securities of the Company, and no such
offer shall be outstanding, unless and until the Compensation Committee in its
sole discretion has determined that any such offer, if made,

                                       9
<PAGE>

would be in compliance with all applicable requirements of the U.S. federal
securities laws and any other laws to which such offer, if made, would be
subject.

     (m) No Trust or Fund Created. Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Subsidiary and a Participant or any
other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Subsidiary pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Subsidiary.

     (n) No Fractional Shares. No Fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Compensation Committee
shall determine whether cash or other securities or other property shall be
paid or transferred in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be canceled, terminated, or otherwise
eliminated.

     (o) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not
be deemed in any way material or relevant to the construction or interpretation
of the Plan or any provision thereof.

     SECTION 11. Term of the Plan.

     (a) Effective Date. The Plan shall be effective as of December 14, 1999,
subject to approval by the shareholders of the Company. Awards may be granted
hereunder prior to such shareholder approval subject in all cases, however, to
such approval.

     (b) Expiration Date. To the extent required by applicable law, the Plan
shall terminate on the date that is ten (10) years after its adoption by the
Board and may be terminated on any earlier date pursuant to Section 9(a).
Unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award granted hereunder may, and the authority of the Board or
the Compensation Committee to amend, alter, adjust, suspend, discontinue, or
terminate any such Award or to waive any conditions or rights under any such
Award shall, continue after the authority for grant of new Awards hereunder has
been exhausted.

     SECTION 12. Execution. To record the adoption of the Plan by the Board,
the Company has caused its duly authorized officer to execute this Plan on
behalf of the Company.

                                          CONDOR SYSTEMS, INC.

                                         By:
                                            -----------------------------------
                                         Title:
                                               --------------------------------

                                      10
<PAGE>

                                                                   ATTACHMENT I

                     MINIMUM VALUE PER DILUTED COMMON SHARE

          To be determined by the Board of Directors from time to time

<PAGE>

                                                                  ATTACHMENT II

                              Performance Vesting
                                Option Agreement
                                   under the
                              Condor Systems, Inc.
                      1999 Management Stock Incentive Plan

          Date of Grant:

          Name of Optionee:

          Number of Shares

          Option Exercise Price     $             /share

          Expiration Date:

     Condor Systems, Inc. a California corporation (the "Company"), hereby
grants to the above-named optionee (the "Optionee") a Performance Vesting
option (the "Option") to purchase from the Company, for the price per share set
forth above, the number of shares of Class A Common Stock, $.01 par value (the
"Shares"), of the Company set forth above, pursuant to the Condor Systems, Inc.
1999 Management Stock Incentive Plan (the "Plan"). The Option is not intended
to be treated as an "incentive stock option" within the meaning of Internal
Revenue Code Section 422.

     Capitalized terms not otherwise defined or explained herein shall have the
same meanings as in the Plan, or if not defined therein, in the Optionee's
Employment Agreement. The terms and conditions of the Option granted hereby, to
the extent not controlled by the terms and conditions contained in the Plan,
are as follows:

     1. The price at which each Share subject to this Option may be purchased
(the "Option Exercise Price") shall be the Option Exercise Price set forth
above.

     2. The number of vested Shares for which this Option may be exercised at
any time through the Expiration Date set forth above shall be determined as
follows, subject to the provisions of the Plan and this Agreement.

     On each of the first four (4) anniversaries of the Date of Grant, 25% of
the Performance Vesting Option shall vest and become exercisable, provided the
Optionee remains an employee of the Company or its Subsidiary as of such
anniversary, and provided the Company has attained the Target EBITDA set forth
in Exhibit A hereto for the fiscal year ended immediately prior to such
anniversary. If, as of any such anniversary, the Company has not attained such
Target EBITDA but has attained at least the Floor EBITDA set forth in Exhibit A
for such previous year, a portion equal to between 75% and 100% (based on
straight-line

                                       2
<PAGE>

interpolation between the Floor EBITDA and the Target EBITDA) of the amount of
the Performance Vesting Option otherwise scheduled to vest on such anniversary
shall vest and become exercisable. If, as of any such anniversary, the Company
has attained EBITDA for such previous year greater than such Target EBITDA, a
portion equal to between 100% and 125% (based on straight-line interpolation
between the Target EBITDA and the Ceiling EBITDA set forth in Exhibit A) of the
amount of the Performance Vesting Option otherwise scheduled to vest on such
anniversary (but in no case greater than the entire remaining unvested amount
of such Option) shall vest and become exercisable.

     3. The Optionee (or his or her representative, devisee or heir, as
applicable) may exercise any portion of this Option which has become
exercisable in accordance with the terms hereof as to all or any of the Shares
then available for purchase by delivering to the Company written notice
specifying:

          (i) the number of whole Shares to be purchased together with payment
     in full of the aggregate Option Exercise Price of such shares, provided
     that this Option may not be exercised for less than 100 Shares or the
     number of Shares remaining subject to this Option, whichever is smaller;

          (ii) the address to which dividends, notices, reports, etc. are to be
     sent; and

          (iii) the Optionee's social security number.

Payment shall be in cash, by certified or bank cashier's check payable to the
order of the Company, free from all collection charges, or in Shares having a
Fair Market Value equal to the full amount of the Option Exercise Price
therefor, or such other form as may be permitted by the Compensation Committee.
The Compensation Committee may require that any Shares tendered in satisfaction
of the Option Exercise Price shall have been held by the Optionee for at least
six months. The Optionee may satisfy any tax withholding obligations, by
electing to have the Company withhold Shares which would otherwise be issued to
the Optionee upon the exercise of the Option having a Fair Market Value equal
to the full amount of the tax owing. Only one stock certificate will be issued
unless the Optionee otherwise requests in writing. Shares purchased upon
exercise of the Option will be issued in the name of the Optionee or the Option
Transferee. The Optionee shall not be entitled to any rights as a shareholder
of the Company in respect of any Shares covered by this Option until such
Shares shall have been paid for in full and issued to the Optionee.

     4. This Option is personal to the Optionee and may be exercised only by
the Optionee or his or her representative in the event of the Optionee's
Disability or death. This Option shall generally not be transferable other than
by will or the laws of descent and distribution. Notwithstanding the foregoing,
this Option may be transferred to: (i) one or more of the spouse, children or
grandchildren of the Optionee ("Immediate Family Members") or to (ii) a trust
or trusts for the exclusive benefit of such Immediate Family Members and/or
such Optionee in which the options are to be passed to beneficiaries upon the
death of the trustor (settlor); provided that (x) there may be no consideration
for any such transfer and (y) subsequent transfers of transferred Options shall
be prohibited except by will or the laws of descent and distribution. For
purposes of this Option Agreement, such a transferee is hereafter

                                       2
<PAGE>

referred to as "Option Transferee." Before any such transfer of this Option is
effectuated, however, the Company must be notified in advance in writing of the
terms and conditions of the proposed transfer and the Company must determine
that the proposed transfer complies with applicable law and the requirements of
the Plan and this Option. Any purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance that does not qualify hereunder shall
be void and unenforceable against the Company.

     The terms of this Option (including the post-termination of service
exercise periods) shall apply to the Optionee's beneficiaries, executors,
administrators and Option Transferees (including the beneficiaries, executors
and administrators of the Option Transferees), including the right to agree to
any amendment of this Option, except that Option Transferees shall not transfer
this Option other than by will or by the laws of descent and distribution. The
Company is under no obligation to provide notice to an Option Transferee of the
Optionee's termination of employment or service to the Company or Subsidiary.

     This Option shall be exercised only by the Optionee (including, in the
case of a transferred Option, by an Option Transferee), or, in the case of the
Optionee's death, by the Optionee's executor or administrator (including, in
the case of a transferred Option, by the executor or administrator of the
Option Transferee. Before an Option Transferee will be allowed to exercise this
Option, the Optionee must make acceptable arrangements to pay any withholding
or other taxes that may be due as a result of exercising this Option.

     Regardless of any marital property settlement agreement, the Company is
not obligated to honor a notice of exercise from the Optionee's spouse, nor is
the Company obligated to recognize the Optionee's spouse's interest in the
Optionee's Option in any other way.

     5. For purposes of this Option, the Optionee's employment or service does
not terminate when the Optionee goes on a bona fide leave of absence that was
approved by the Company in writing, if the terms of the leave provide for
continued employment crediting, or when continued employment crediting is
required by applicable law. The Optionee's employment or service terminates in
any event when the approved leave ends unless the Optionee immediately returns
to active work.

     The Company determines which leaves count for this purpose, and when the
Optionee's employment or service terminates for all purposes under the Plan.

     6. In the event that the Optionee proposes to sell, pledge or otherwise
transfer to a third party any Shares acquired under this Agreement, or any
interest in such Shares, the Company shall have the "Right of First Refusal"
with respect to all (and not less than all) of such Shares. If the Optionee
desires to transfer Shares acquired under this Agreement, the Optionee must
give a written "Transfer Notice" to the Company describing fully the proposed
transfer, including the number of Shares proposed to be transferred, the
proposed transfer price and the name and address of the proposed transferee.

     The Transfer Notice shall be signed both by the Optionee and by the
proposed new transferee and must constitute a binding commitment of both
parties to the transfer of the Shares. The Company shall have the right to
purchase all, and not less than all, of the Shares on the

                                       3
<PAGE>

terms of the proposal described in the Transfer Notice (subject, however, to
any change in such terms permitted in the next paragraph) by delivery of a
notice of exercise of the Right of First Refusal within thirty (30) days after
the date when the Transfer Notice was received by the Company. The Company's
rights under this subsection shall be freely assignable, in whole or in part.

     If the Company fails to exercise its Right of First Refusal within thirty
(30) days after the date when it received the Transfer Notice, the Optionee
may, not later than ninety (90) days following receipt of the Transfer Notice
by the Company, conclude a transfer of the Shares subject to the Transfer
Notice on the terms and conditions described in the Transfer Notice. Any
proposed transfer on terms and conditions different from those described in the
Transfer Notice, as well as any subsequent proposed transfer by the Optionee,
shall again be subject to the Right of First Refusal and shall require
compliance with the procedure described in the paragraph above. If the Company
exercises its Right of First Refusal, the parties shall consummate the sale of
the Shares on the terms set forth in the Transfer Notice within sixty (60) days
after the date when the Company received the Transfer Notice (or within such
longer period as may have been specified in the Transfer Notice); provided,
however, that in the event the Transfer Notice provided that payment for the
Shares was to be made in a form other than lawful money paid at the time of
transfer, the Company shall have the option of paying for the Shares with
lawful money equal to the present value of the consideration described in the
Transfer Notice.

     The Company's Right of First Refusal shall inure to the benefit of its
successors and assigns and shall be binding upon any transferee of the Shares.

     The Company's Right of First Refusal shall terminate in the event that the
Company's stock is listed on an established stock exchange or is quoted
regularly on the NASDAQ National Market.

     7. Following termination of the Optionee's employment or service for any
reason, the Company shall have the right to repurchase all of those Shares that
the Optionee has or will acquire under this Option. If the Company exercises
its right to purchase such Shares, the repurchase price shall be the Fair
Market Value of those Shares on the date of repurchase as determined by the
Compensation Committee and shall be paid in cash or by certified check or
through cancellation of purchase money indebtedness. The Company will notify
the Optionee of its intention to purchase such Shares, and will consummate the
purchase within the period established by applicable law. The Company's rights
of repurchase shall terminate in the event that the Company's stock is listed
on an established stock exchange or is quoted regularly on the NASDAQ National
Market.

     8. All certificates representing the Shares issued upon exercise of this
Option shall, where applicable, have endorsed thereon the following legends:

     "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER
PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICE OF THE COMPANY AND

                                       4
<PAGE>

WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE
HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE."

     "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN
OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED."

     9. This Option does not confer on the Optionee any right to continue in
the employ of the Company or any Subsidiary or interfere in any way with the
right of the Company or any Subsidiary to determine the terms of the Optionee's
employment.

     10. This Option and the terms and conditions herein set forth are subject
in all respects to the terms and conditions of the Plan, which shall be
controlling. All interpretations or determinations of the Compensation
Committee and/or the Board shall be binding and conclusive upon the Optionee
and his or her legal representatives on any question arising hereunder. The
Optionee acknowledges that he or she has received and reviewed a copy of the
Plan.

     11. The Optionee acknowledges that any powers, rights or responsibilities
of the Board and/or the Compensation Committee set forth herein may be
delegated to and exercised by any subcommittee thereof as permitted under the
Plan.

     12. This Agreement contains the entire understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement and the Plan
supersedes all prior agreements and understandings between the parties hereto
with respect to the subject matter hereof.

     13. This Option Agreement shall be governed by and construed in accordance
with the laws of the State of California, without application of the conflict
of laws principles thereof.

     14. This Option Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

                                       5
<PAGE>

     IN WITNESS WHEREOF, the undersigned have caused this Option Agreement to
be duly executed as of the date first above written.

                                      CONDOR SYSTEMS, INC.

                                      By:
                                         -------------------------------------
                                         Name
                                         Title:

                                      OPTIONEE:

                                      ----------------------------------------
                                      Name:
                                      Address:

By signing this Agreement, the Optionee agrees to all of the terms and
conditions described above and in the Plan, a copy of which is attached.

                                       6
<PAGE>

                                                      EXHIBIT A - ATTACHMENT II

                   To be determined by the Board of Directors

<PAGE>

                                                                 ATTACHMENT III

                           Super Performance Vesting
                                Option Agreement
                                   under the
                              Condor Systems, Inc.
                      1999 Management Stock Incentive Plan

          Date of Grant:

          Name of Optionee:

          Number of Shares

          Option Exercise Price     $             /share

          Expiration Date:

     Condor Systems, Inc. a California corporation (the "Company"), hereby
grants to the above-named optionee (the "Optionee") a Super Performance Vesting
option (the "Option") to purchase from the Company, for the price per share set
forth above, the number of shares of Class A Common Stock, $.01 par value (the
"Shares"), of the Company set forth above, pursuant to the Condor Systems, Inc.
1999 Management Stock Incentive Plan (the "Plan"). The Option is not intended
to be treated as an "incentive stock option" within the meaning of Internal
Revenue Code Section 422.

     Capitalized terms not otherwise defined or explained herein shall have the
same meanings as in the Plan, or if not defined therein, in the Optionee's
Employment Agreement. The terms and conditions of the Option granted hereby, to
the extent not controlled by the terms and conditions contained in the Plan,
are as follows:

     1. The price at which each Share subject to this Option may be purchased
(the "Option Exercise Price") shall be the Option Exercise Price set forth
above.

     2. The number of vested Shares for which this Option may be exercised at
any time through the Expiration Date set forth above shall be determined as
follows, subject to the provisions of the Plan and this Agreement.

     The Super Performance Vesting Option shall fully vest and become
exercisable upon a Change of Control, provided the Optionee remains an employee
of the Company or its Subsidiary as of the date of such Change of Control, and
provided the applicable minimum value per diluted Share set forth in Exhibit A
hereto has been attained in connection with such Change of Control.

<PAGE>

     3. The Optionee (or his or her representative, devisee or heir, as
applicable) may exercise any portion of this Option which has become
exercisable in accordance with the terms hereof as to all or any of the Shares
then available for purchase by delivering to the Company written notice
specifying:

          (i) the number of whole Shares to be purchased together with payment
     in full of the aggregate Option Exercise Price of such shares, provided
     that this Option may not be exercised for less than 100 Shares or the
     number of Shares remaining subject to this Option, whichever is smaller;

          (ii) the address to which dividends, notices, reports, etc. are to be
     sent; and

          (iii) the Optionee's social security number.

Payment shall be in cash, by certified or bank cashier's check payable to the
order of the Company, free from all collection charges, or in Shares having a
Fair Market Value equal to the full amount of the Option Exercise Price
therefor, or such other form as may be permitted by the Compensation Committee.
The Compensation Committee may require that any Shares tendered in satisfaction
of the Option Exercise Price shall have been held by the Optionee for at least
six months. The Optionee may satisfy any tax withholding obligations, by
electing to have the Company withhold Shares which would otherwise be issued to
the Optionee upon the exercise of the Option having a Fair Market Value equal
to the full amount of the tax owing. Only one stock certificate will be issued
unless the Optionee otherwise requests in writing. Shares purchased upon
exercise of the Option will be issued in the name of the Optionee or the Option
Transferee. The Optionee shall not be entitled to any rights as a shareholder
of the Company in respect of any Shares covered by this Option until such
Shares shall have been paid for in full and issued to the Optionee.

     4. This Option is personal to the Optionee and may be exercised only by
the Optionee or his or her representative in the event of the Optionee's
Disability or death. This Option shall generally not be transferable other than
by will or the laws of descent and distribution. Notwithstanding the foregoing,
this Option may be transferred to: (i) one or more of the spouse, children or
grandchildren of the Optionee ("Immediate Family Members") or to (ii) a trust
or trusts for the exclusive benefit of such Immediate Family Members and/or
such Optionee in which the options are to be passed to beneficiaries upon the
death of the trustor (settlor); provided that (x) there may be no consideration
for any such transfer and (y) subsequent transfers of transferred Options shall
be prohibited except by will or the laws of descent and distribution. For
purposes of this Option Agreement, such a transferee is hereafter referred to
as "Option Transferee." Before any such transfer of this Option is effectuated,
however, the Company must be notified in advance in writing of the terms and
conditions of the proposed transfer and the Company must determine that the
proposed transfer complies with applicable law and the requirements of the Plan
and this Option. Any purported assignment, alienation, pledge, attachment,
sale, transfer or encumbrance that does not qualify hereunder shall be void and
unenforceable against the Company.

     The terms of this Option (including the post-termination of service
exercise periods) shall apply to the Optionee's beneficiaries, executors,
administrators and Option Transferees

                                       2
<PAGE>

(including the beneficiaries, executors and administrators of the Option
Transferees), including the right to agree to any amendment of this Option,
except that Option Transferees shall not transfer this Option other than by
will or by the laws of descent and distribution. The Company is under no
obligation to provide notice to an Option Transferee of the Optionee's
termination of employment or service to the Company or Subsidiary.

     This Option shall be exercised only by the Optionee (including, in the
case of a transferred Option, by an Option Transferee), or, in the case of the
Optionee's death, by the Optionee's executor or administrator (including, in
the case of a transferred Option, by the executor or administrator of the
Option Transferee. Before an Option Transferee will be allowed to exercise this
Option, the Optionee must make acceptable arrangements to pay any withholding
or other taxes that may be due as a result of exercising this Option.

     Regardless of any marital property settlement agreement, the Company is
not obligated to honor a notice of exercise from the Optionee's spouse, nor is
the Company obligated to recognize the Optionee's spouse's interest in the
Optionee's Option in any other way.

     5. For purposes of this Option, the Optionee's employment or service does
not terminate when the Optionee goes on a bona fide leave of absence that was
approved by the Company in writing, if the terms of the leave provide for
continued employment crediting, or when continued employment crediting is
required by applicable law. The Optionee's employment or service terminates in
any event when the approved leave ends unless the Optionee immediately returns
to active work.

     The Company determines which leaves count for this purpose, and when the
Optionee's employment or service terminates for all purposes under the Plan.

     6. In the event that the Optionee proposes to sell, pledge or otherwise
transfer to a third party any Shares acquired under this Agreement, or any
interest in such Shares, the Company shall have the "Right of First Refusal"
with respect to all (and not less than all) of such Shares. If the Optionee
desires to transfer Shares acquired under this Agreement, the Optionee must
give a written "Transfer Notice" to the Company describing fully the proposed
transfer, including the number of Shares proposed to be transferred, the
proposed transfer price and the name and address of the proposed transferee.

     The Transfer Notice shall be signed both by the Optionee and by the
proposed new transferee and must constitute a binding commitment of both
parties to the transfer of the Shares. The Company shall have the right to
purchase all, and not less than all, of the Shares on the terms of the proposal
described in the Transfer Notice (subject, however, to any change in such terms
permitted in the next paragraph) by delivery of a notice of exercise of the
Right of First Refusal within thirty (30) days after the date when the Transfer
Notice was received by the Company. The Company's rights under this subsection
shall be freely assignable, in whole or in part.

     If the Company fails to exercise its Right of First Refusal within thirty
(30) days after the date when it received the Transfer Notice, the Optionee
may, not later than ninety (90) days following receipt of the Transfer Notice
by the Company, conclude a transfer of the Shares

                                       3
<PAGE>

subject to the Transfer Notice on the terms and conditions described in the
Transfer Notice. Any proposed transfer on terms and conditions different from
those described in the Transfer Notice, as well as any subsequent proposed
transfer by the Optionee, shall again be subject to the Right of First Refusal
and shall require compliance with the procedure described in the paragraph
above. If the Company exercises its Right of First Refusal, the parties shall
consummate the sale of the Shares on the terms set forth in the Transfer Notice
within sixty (60) days after the date when the Company received the Transfer
Notice (or within such longer period as may have been specified in the Transfer
Notice); provided, however, that in the event the Transfer Notice provided that
payment for the Shares was to be made in a form other than lawful money paid at
the time of transfer, the Company shall have the option of paying for the
Shares with lawful money equal to the present value of the consideration
described in the Transfer Notice.

     The Company's Right of First Refusal shall inure to the benefit of its
successors and assigns and shall be binding upon any transferee of the Shares.

     The Company's Right of First Refusal shall terminate in the event that the
Company's stock is listed on an established stock exchange or is quoted
regularly on the NASDAQ National Market.

     7. Following termination of the Optionee's employment or service for any
reason, the Company shall have the right to repurchase all of those Shares that
the Optionee has or will acquire under this Option. If the Company exercises
its right to purchase such Shares, the repurchase price shall be the Fair
Market Value of those Shares on the date of repurchase as determined by the
Compensation Committee and shall be paid in cash or by certified check or
through cancellation of purchase money indebtedness. The Company will notify
the Optionee of its intention to purchase such Shares, and will consummate the
purchase within the period established by applicable law. The Company's rights
of repurchase shall terminate in the event that the Company's stock is listed
on an established stock exchange or is quoted regularly on the NASDAQ National
Market.

     8. All certificates representing the Shares issued upon exercise of this
Option shall, where applicable, have endorsed thereon the following legends:

     "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER
PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE
SECRETARY OF THE COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY
THIS CERTIFICATE."

     "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN
OPINION OF COUNSEL,

                                       4
<PAGE>

SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED."

     9. This Option does not confer on the Optionee any right to continue in
the employ of the Company or any Subsidiary or interfere in any way with the
right of the Company or any Subsidiary to determine the terms of the Optionee's
employment.

     10. This Option and the terms and conditions herein set forth are subject
in all respects to the terms and conditions of the Plan, which shall be
controlling. All interpretations or determinations of the Compensation
Committee and/or the Board shall be binding and conclusive upon the Optionee
and his or her legal representatives on any question arising hereunder. The
Optionee acknowledges that he or she has received and reviewed a copy of the
Plan.

     11. The Optionee acknowledges that any powers, rights or responsibilities
of the Board and/or the Compensation Committee set forth herein may be
delegated to and exercised by any subcommittee thereof as permitted under the
Plan.

     12. This Agreement contains the entire understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement and the Plan
supersedes all prior agreements and understandings between the parties hereto
with respect to the subject matter hereof.

     13. This Option Agreement shall be governed by and construed in accordance
with the laws of the State of California, without application of the conflict
of laws principles thereof.

     14. This Option Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

                                       5
<PAGE>

     IN WITNESS WHEREOF, the undersigned have caused this Option Agreement to
be duly executed as of the date first above written.

                                        CONDOR SYSTEMS, INC.

                                        By:
                                           -----------------------------------
                                           Name
                                           Title:

                                        OPTIONEE:

                                        --------------------------------------
                                        Name:
                                        Address:

By signing this Agreement, the Optionee agrees to all of the terms and
conditions described above and in the Plan, a copy of which is attached.

                                       6
<PAGE>

                                                     EXHIBIT A - ATTACHMENT III

     The performance option and vesting schedule targets shall be established
in a separate document by the Company Board of Directors and such document
shall be provided to each performance option holder.

<PAGE>

                               TABLE OF CONTENTS

                                                                           Page

SECTION 1.   Purpose.........................................................1

SECTION 2.   Definitions.....................................................1

SECTION 3.   Administration..................................................4

SECTION 4.   Shares Available for Awards.....................................5

SECTION 5.   Eligibility.....................................................5

SECTION 6.   Stock Options...................................................6

SECTION 7.   Termination or Suspension of Employment or Service..............6

SECTION 8.   Accelerated Vesting.............................................7

SECTION 9.   Amendment and Termination.......................................7

SECTION 10.  General Provisions..............................................8

SECTION 11.  Term of the Plan...............................................10

SECTION 12.  Execution......................................................10

                                      -i-

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