EXHIBIT 10.5


                      EMPLOYMENT AGREEMENT - BRAD JACOBY

          This Agreement, made  effective as  of  November 30, 2004,  entered
 into by  and  between  Integrated Performance  Systems,  Inc.,  a  New  York
 corporation (the "Company"), and Brad Jacoby (the "Employee").

          WHEREAS,  Employee  is  currently  serving  the  Company  under   a
 management consulting agreement, with  powers generally associated with  the
 Chief Executive Officer position ; and

          WHEREAS,  the  Company  desires  to  employ  the  Employee  as  its
 Chairman,  CEO  and  President  in  accordance  with  the  following  terms,
 conditions and provisions; and

          WHEREAS, the  Employee desires  to perform  such services  for  the
 Company,  all  in  accordance  with  the  following  terms,  conditions  and
 provisions; and

          WHEREAS, at some time the  Employee may contemplate retiring,  with
 the approval of  the Company's Board  of Directors (the  "Board"),  upon the
 completion of his services under this  Agreement, whether at the end of  the
 term  hereof  or at the end  of  or  during any  extension term  hereof, and
 the  parties wish  to  set  forth  an agreement relating to such an approved
 retirement;

          NOW THEREFORE,  in consideration  of  the mutual  covenants  herein
 contained, it is agreed as follows:

 1.       EMPLOYMENT AND DUTIES.

    The  Company hereby  employs Employee,  and Employee  hereby accepts  and
    agrees  to  serve  the  Company  as  the  Company's  CEO  and  President,
    consistent with  the job description for  this position, and with  duties
    subject to review and modification from time to time at the direction  of
    the Company's Board. The Employee shall also function as Chairman of  the
    Board,  subject to election  by the Company's  Board. The Employee  shall
    remain a member of the Company's Board of Directors, subject to  election
    by  the shareholders of the  Company. The Employee  shall apply his  best
    efforts and  devote substantially all of  his working time and  attention
    to the Company's affairs.

 2.       TERM.

    The  term  of  this  Agreement  and  Employee's  employment  under   this
    Agreement  shall  commence  on  December  1,  2004,  and  shall  continue
    thereafter  for a  period of  three  years. Upon  the expiration  of  the
    original  term  of this  Agreement,  this Agreement  shall  automatically
    renew for successive  two-year terms, subject to termination as  provided
    in Section 7 below.

    During the term of this Agreement, including any extension term  thereof,
    the Employee or  the Board may initiate discussions regarding  Employee's
    retirement from  his position as President and  CEO of the Company.  When
    either party wishes to discuss Employee's retirement, they shall  provide
    sufficient advance  notice to the other party  so as to accommodate  both
    Employee's  and the Company's requirements  for planning and  transition.
    In  any event, Employee  shall give the  Board at least  60 days  advance
    notice of a  date on which Employee would like to retire. In  discussions
    regarding  Employee's retirement, Employee  and the  Board shall  discuss
    and  attempt  to  agree  upon  various  matters  relating  to  Employee's
    retirement,  including   transition  arrangements  for  the  benefit   of
    Employee and the Company, consulting or other services, if any, from  the
    Employee  after   retirement,  and  the  proposed  date  for   Employee's
    retirement.  This  date   shall  be  established  so  as  to   facilitate
    transition  to a new President  and  CEO at  the  Company.  (Hereinafter,
    Employee's  retirement  that  has  been agreed  upon  by  the  Board  and
    Employee is referred to as the "Retirement", and the date which has  been
    agreed upon  by the Company and Employee  for his Retirement is  referred
    to as the "Retirement Date").

    At  Employee's Retirement on his  Retirement Date, Employee shall  resign
    as Chairman of the Board, and also resign from the Board if requested  by
    the  Board. Should  Employee continue  to serve  on the  Board after  his
    Retirement  Date, Employee  shall  thereafter be  treated as  an  outside
    director on the Board, including for purposes of Board fees, options  and
    other  benefits paid to  outside directors. In  addition, Employee  shall
    serve  as a consultant to  the Company during  the Consulting Period,  as
    defined in Section 16 below.

 3.       COMPENSATION.

          The Company shall compensate  the Employee for  his services as  an
    employee hereunder at the following salary, bonus, and benefits:

     A.      Base Salary.

        The  Employee shall  be paid  a  base salary  of $500,000  per  year,
        payable on the Company's normal  payroll cycle.  This base salary  is
        the minimum  salary during  the term of  this Agreement,  and may  be
        increased  from  time  to  time  at  the  discretion  of  the  Board.
        Employee shall receive an annual performance review, and,  contingent
        upon satisfactory review  results, shall be eligible for increase  of
        such base salary at the direction of the Board.

     B.      Bonus.

        The  Employee shall  participate in  a Company  Management  Incentive
        Plan, as  approved and amended by  the Board from  time to time,  and
        which is designed to deliver an annual bonus consistent with  current
        levels established  for this position  by the  Board. Employee  shall
        periodically  meet  with the  Board  to  establish  quantitative  and
        qualitative initiatives and  objectives for the purpose of  assessing
        the  amount of  bonus  to be  paid  to Employee  at  the end  of  the
        associated  bonus  period.  Target  annual  bonus  for   satisfactory
        performance  shall  be 60%  of  base  salary. Amount  payable  to  be
        determined  by  Board  based  on  Company  and  personal  performance
        criteria established  by the Board. Bonus  payable may range from  0%
        to 150% of  target amount (i.e., maximum bonus  shall be 90% of  base
        salary), depending on actual performance.

     C.     Stock Options.

        The Employee shall be eligible to participate in the annual grant  of
        the  Company's Stock  Option  Plan,  consistent with  its  terms  and
        conditions, and  with amounts  of options,  including exercise  price
        and vesting  provisions determined by  the Board from  time to  time.
        Provisions under  this item 3C,  stock options, are  also subject  to
        the provisions found in Section 7, under Termination of Agreement.

        In the case of all options granted during the term of this  Agreement
        (including   any  extension   terms),  the   options  shall   include
        provisions  that, if  Employee and  the Company  have agreed  upon  a
        Retirement Date,  then (i) during the  Consulting Period  the options
        shall continue to  vest at the same rate  at which they were  vesting
        during the  period of  Employee's employment hereunder; and (ii)  all
        such options shall vest and become fully exercisable upon  Employee's
        completion of  his consulting services at  the end  of the Consulting
        Period.

     D.     Employee Benefits Plans.

        The Employee shall be entitled to participate in any and all  Company
        employee   benefit  plans,   in  accordance   with  the   eligibility
        requirements and other terms and provisions of such plan or plans.

     E.     Insurance.

        The  Employee agrees  that  the Company,  at  the discretion  of  its
        Board, may apply  for and procure on  its own behalf, life  insurance
        on  the life  of the  Employee,  for the  purpose of  protecting  the
        Company against  loss caused by the  death of the Employee  (commonly
        referred to  as "Key" insurance).  Employee agrees  to cooperate  and
        submit  to  medical  examinations, and  to  execute  or  deliver  any
        documentation reasonably required  by the Company's insurer in  order
        to effectuate such insurance.

 4.       VACATIONS AND TIME OFF.

    The  Employee shall be entitled  to four weeks of  paid vacation in  each
    year of employment  under the terms of this Agreement, without  reduction
    of salary.  Unused vacation time may be carried  over to future years  of
    employment,  consistent with Company  policy affecting  use by  executive
    employees  of employee  vacation  time. In  addition, Employee  shall  be
    entitled  to  such  additional  time  off  from  work,  without  loss  of
    compensation,  for  attendance  at  professional  meetings,  conventions,
    approved "other business activities", as per Section 14, and  educational
    courses  in  accordance  with the  Company's  general  policies  in  this
    regard, and as from time to time determined by its Board.

 5.       EXPENSES.

    The Company will  reimburse Employee for reasonable expenses incurred  by
    the Employee  in connection with the  business of the Company,  according
    to  policies  promulgated  from time  to  time  by the  Board,  and  upon
    presentation   by  Employee  of   appropriate  substantiation  for   such
    expenses.  Further, the Company  will allow Employee  to travel  business
    class, by air,  and reimburse Employee's initiation fee and monthly  dues
    for country  club or private club membership  of his choosing. Also,  the
    Company will provide reimbursement for tax/financial planning  assistance
    and  preparation, up  to $5,000  per year,  as well  as for  supplemental
    medical examinations. During  the term of this Agreement, Employee  shall
    receive an automobile allowance of $1,000 per month.

 6.       DISABILITY.

    For purposes of this Section 6, "Disability Leave of Absence" shall  mean
    the period during which Employee is disabled prior to termination of  his
    employment under  the terms of this  Agreement. The Company agrees  that,
    if  Employee's employment  is  terminated during  a Disability  Leave  of
    Absence,  Employee may  continue to  receive Employer's  group  insurance
    health  plan  coverage by  compliance  with  and as  provided  under  the
    provisions  of   the  Consolidated  Omnibus  Budget  Reconciliation   Act
    ("COBRA").

    For  purposes of  this  Agreement, Employee  shall  be considered  to  be
    totally  disabled when he is  considered to be as  such by any  insurance
    company  used by  the  Company to  provide  disability benefits  for  the
    Employee, and Employee  shall continue to be considered totally  disabled
    until such insurance company ceases to recognize him as totally  disabled
    for purposes of  disability benefits. If no such disability policies  are
    in effect for the benefit of the Employee or for any reason an  insurance
    company  fails  to  make  a determination  of  the  question  of  whether
    Employee is totally disabled, Employee shall be considered to be  totally
    disabled if, because of mental or physical illness or other cause, he  is
    unable  to perform  the majority of  his usual  duties on  behalf of  the
    Company. The  existence of a total disability  of the Employee, the  date
    it commenced,  and the date it ceases, shall  be determined by the  Board
    and the Employee, under these circumstances. If the parties cannot  agree
    on  the foregoing questions  of disability, then  any such  determination
    shall be  made after examination of  Employee by medical doctor  selected
    by  the Board,  and a medical  doctor selected  by the  Employee. If  the
    medical doctors  so selected cannot agree  on the foregoing questions  of
    disability, a third  medical doctor shall be selected by the two and  the
    opinion of a majority of all three shall be binding.

 7.       TERMINATION.

    A. The employment of Employee by the  Company under this Agreement  shall
    terminate upon the occurrence of any of the following:

       1.      Mutual agreement, in writing, of the parties to terminate.

       2.      Employee's death.

       3.      Upon the expiration of the initial or any renewal term of this
       Agreement, following  written notice  at least  90 days  prior to  the
       date on  which renewal  would otherwise  occur, by  one party  to  the
       other indicating such party's intention not to renew.

       4.     At the Company's option, if Employee shall be totally disabled,
       as  defined above for  a continuous period in  excess of nine  months.
       The  Company's  option to  terminate in such event  shall be exercised
       upon at least 30 days prior written notice to Employee.

       5.   Termination  by the  Company  for cause.   For  purpose  of  this
       provision of this Agreement, "cause" shall be defined as:

           a.  Willful failure of the  Employee to substantially perform  any
           duties reasonably required by the Company that are consistent with
           Employee's position (except as a  result of any disabling  injury,
           for which Employee has been receiving benefits under a short  term
           or long  term  disability  program), and  which  is  not  remedied
           promptly by Employee after receipt  of written notice to  Employee
           of such failure from the Company; or

           b.  The commission by Employee of any act of fraud  or  dishonesty
           which has a direct, substantial and adverse affect on the Company,
           and  which is related  to or in  connection with his Employment by
           the Company; or

           c.  The commission  by  Employee  of any  criminal  act  which  is
           punishable by sentence exceeding 90 days; or

           d.  Employee  materially   breaches  Employee's  other   covenants
           contained in  this  Agreement,  and  fails  to  cure  such  breach
           promptly  after  written  notice  thereof  to  Employee  from  the
           Company.

       6.         Termination by  Employee with Good  Reason.  "Good  Reason"
       includes any of the following:

             a.      Company's assignment to Employee of duties  inconsistent
                with Employee's position;

             b.      Other action by the Company that results in the material
                diminution  of  Employee's  position,  authority,  duties  or
                responsibilities;

             c.      Breach  of  this Employment  Agreement  by  the  Company
                (including, but  not  limited  to,  reduction  in  Employee's
                salary, bonus, long-term compensation, retirement benefits or
                welfare benefits);

             d.      Requirement that Employee maintain his home or principal
                place of business outside the Dallas metropolitan area;

             e.      Requirement  that  Employee  travel  on  business  to  a
                substantially greater extent than he  has in the past  twelve
                (12) months;

             f.       Failure  to  assign  this  Employment  Agreement  to  a
                successor employer.

          B.      Termination Payments.

                   1.      In  the event that (i) Employee's employment  with
            the  Company  is  terminated  without  cause,  or  (ii)  Employee
            terminates for Good Reason, or (iii) the Company delivers  notice
            of non-renewal of this Agreement for any renewal term, then:

            a.       Employee  shall receive  regular  pay  through  date  of
                termination, including pro-rated earned for the partial year,
                if any.

            b.       Employee shall receive payment equal to twenty-four (24)
                months of Employee's then current annualized salary;  payable
                monthly, plus an annual  amount equal to  the average of  any
                bonus or incentive compensation paid or payable for the  most
                recent two full years payable monthly; and all unvested stock
                options held by Employee shall immediately vest.

            c.       Employee shall be entitled to continue participation  in
              the healthcare coverage, life insurance  and  general  employee
              benefit plans of  the Company. The Company shall for two  years
              following  the effective  date of  the termination  under  this
              Section  7.B.,  or until  Employee  becomes eligible  for  such
              insurance coverage  with another employer, continue to  provide
              such  coverage for  Employee  and his  dependents to  the  same
              extent  and  cost  the Company  is  then  providing  for  other
              employees  with  comparable  coverage  during  this  two   year
              period.

       2.   Termination by  Company Without Cause  or by  Employee  With Good
            Reason--Within   Two  Years  After  a  Change  in  Control.   For
            purposes of this provision, a  change in control will be  defined
            as follows:

            a.     When, subsequent to the effective date of this  Agreement,
                any "person" as defined in Section 3(a)(9) of the  Securities
                Exchange Act as used  in sections 13(d)  and 14(d)   thereof,
                including a  "group"  as  defined in  Section  13(d)  of  the
                Securities Exchange  Act, but  excluding the  Company or  any
                subsidiary or parent or  any employee benefit plan  sponsored
                or maintained  by the  Company or  any subsidiary  or  parent
                (including any trustee  of such plan  acting as trustee),  or
                indirectly, becomes  the "beneficial  owner" (as  defined  in
                Rule 13d-3 under the Securities Exchange Act, as amended from
                time to  time), of  securities  of the  Company  representing
                greater than 50 (fifty) percent of the combined voting  power
                the Company's then outstanding securities; or

            b.     When, subsequent to the effective date of this  agreement,
                the individuals who,  at the end  of such period,  constitute
                the Board ("Incumbent Directors") cease for any reason  other
                than  death  to  constitute  at  least  a  majority  thereof;
                provided however that a  Director who was  not a Director  at
                the beginning of this period will be deemed to have satisfied
                the definition of "Incumbent  Director" if such Director  was
                elected by,  or with  the approval  of, at  least 60%  (sixty
                percent) of  the Directors  who then  qualified as  Incumbent
                Directors;  or

            c.      Any  sale,  lease, exchange  or  other transfer  (in  one
                transaction or a  series of related  transactions) of all  or
                substantially all  of  the  assets  of  the  Company  or  the
                approval by  the  shareholders of  the  Company of  any  such
                transaction, whichever first occurs,  or the adoption of  any
                plan or proposal  for the liquidation  or dissolution of  the
                Company.

                If, contemporaneously  with any  such change  in control,  or
                during a two year period subsequent  to a change in  control,
                Employee is terminated without cause, or Employee  terminates
                for Good Reason, the Company  shall (i) pay Employee  regular
                pay through  the  date of  termination,  including  pro-rated
                bonus for partial year; (ii) pay Employee a lump sum  payment
                equal to (A) 36 months of Employee's then current  annualized
                salary, plus (B) the aggregate annual bonus compensation paid
                for preceding  three full  years or  three times  the  target
                bonus for  the year  of  termination, whichever  is  greater;
                (iii) vest all  outstanding stock options;  and (iv)  provide
                continued  participation   in  medical,   dental,  life   and
                disability insurance benefits at same premium cost in  effect
                for active employees for two years.

         3.     Termination by  Company With Cause.  Upon termination of  the
            Employee by  the Company with  cause, regular  pay will  continue
            through the date  of termination, including  pro-rated bonus  for
            the partial year.

         4.     Termination by Employee Without Good Reason. Upon termination
            by the Employee  without good reason,  regular pay will  continue
            through the date  of termination, including  pro-rated bonus  for
            the partial year.

         5.      Termination  by  reason  of  death   or   disability.   Upon
            termination due to Employee's death,  or upon termination by  the
            Company under Section 7.A.4. due to Employee's disability, then:

            a.      Employee (or his designated  beneficiaries in the case of
               death)  shall  receive  regular   pay  through  the  date   of
               termination, including pro-rated bonus earned for the  partial
               year, if any.

            b.      Employee (or his designated  beneficiaries in the case of
               death) shall  receive termination  payments in  the amount  of
               one year base salary.

            c.      All  unvested  stock  options  held  by  Employee   shall
                immediately vest.

            d.      Employee (or  his dependents, in the  case of death)  may
                continue to receive insurance  coverage under the  provisions
                of COBRA  for the  period of  time prescribed  thereby,  upon
                payment of the cost thereof.

 8.       PAYMENT OF "PARACHUTE" TAX.

    Company  agrees to  pay to Employee  an amount  sufficient (after  taking
    into  account any such tax  on such payment) to  restore the full  amount
    payable  under  the  other terms  of  this  Employment  Agreement,  after
    application  of  excise  tax on  excess  Parachute  payments  within  the
    meaning of Code  Section 280(g), including the excise tax, penalties  and
    interest.

 9.       HEALTH BENEFITS AFTER RETIREMENT.

    Commencing  upon Employee's Retirement,  for a period  of 24 months,  the
    Company  shall  pay Employee  each  month  an amount  equal  to  $1000.00
    indexed to adjust for inflation on an annual basis each December 1,  with
    December 1,  2004,  as  the  base date.  These  amounts may  be  used  by
    Employee  to purchase an individual  health insurance policy or  policies
    for  himself and his  spouse or other  dependents, and to  pay for  other
    health and medical benefits.

 10.      OUTPLACEMENT ASSISTANCE.

    Upon  termination  of  employment without  cause,  with  Good  Reason  by
    Employee,  or after a  change-in control as  provided above, the  Company
    will  pay  for   outplacement  assistance  to  assist  Employee  in   job
    transition process.  The Company will select  the service provider to  be
    used for this purpose.

 11.      PAYMENT OF LEGAL FEES.

    Subject  to a total  expenditure of up  to $15,000  maximum, the  Company
    agrees  to  pay  all  reasonable  legal  fees  incurred  by  Employee  in
    connection  with   the  drafting  and  negotiation  of  this   Employment
    Agreement and any amendments thereto.

 12.      COVENANT NOT TO COMPETE.

    For  purposes of this Section  12, the "Termination  Date" will mean  the
    date  of  Employee's  termination of  employment  under  this  Agreement,
    except that if Employee performs consulting services pursuant to  Section
    16  hereof, then, in such  event, the "Termination  Date" shall mean  the
    last day of the Consulting Period.

    Employee  hereby covenants  and agrees that  during the  initial and  any
    renewal  term of employment under  this Agreement, during the  Consulting
    Period,  if  applicable, and  for  a period  of  one year  following  the
    Termination Date (the  "Term"), Employee shall not be engaged within  the
    United States, either directly or indirectly, in any manner or  capacity,
    whether  as an  advisor, principal,  agent, partner,  officer,  director,
    employee,  member of  an association, or  otherwise, in  any business  or
    activity which  is competitive with the  business being conducted by  the
    Company  or its  subsidiaries or affiliates  on the  Termination Date  (a
    "Competitive Business"), or  own beneficially or of record, five  percent
    or  more of the outstanding  stock of any class  of equity securities  in
    any  corporation,  other  business  entity  or  business  engaged  in   a
    Competitive Business.

    In  addition, during the  Term, Employee shall  not solicit, directly  or
    indirectly, any  then current employee of  the Company for employment  or
    engagement in  any capacity outside of  the Company, its subsidiaries  or
    affiliates, or solicit  any customers of the Company to change or  reduce
    in any way the amount of business that they do with the Company or to  do
    business  with  a   competitor  of  the  Company,  its  subsidiaries   or
    affiliates.

    At  the option of the  Board, the Company may  choose to extend the  Term
    for a period  of up to an additional twelve months. In consideration  for
    such  election, the Company agrees  to make payment  to the Employee  for
    such extension  the annualized salary and bonus  equal to that in  effect
    at the time of termination of Employee's employment.

    If Employee should  breach the foregoing covenants, the Company may  seek
    injunctive relief  to enforce the covenants as  well as remedies  at law.
    In  addition,  all payments  described  in Section  7,  Termination,  all
    payments for health  benefits pursuant to Section 9 and all  payments for
    Consulting Services pursuant  to Section 16 shall cease. In addition  the
    remaining  unexercised stock options shall  immediately be cancelled  and
    the  benefit plan provisions described  in Section 7, Termination,  shall
    be  immediately  discontinued  except  to  the  extent  required  by  the
    provisions of COBRA.

 13.      CONFIDENTIALITY.

    Employee will,  in the course of his employment  with the Company and  in
    the  course of the provision  of any consulting  services to the  Company
    during the Consulting Period, if applicable, have access to  confidential
    and  proprietary data or information  belonging to the Company.  Employee
    will not at any time divulge or communicate to any person (other than  to
    a person bound  by confidentiality obligations to the Company similar  to
    those  contained  in this  Agreement)  or use  to  the detriment  of  the
    Company,  or  for   the  benefit  of  any  other  person  such  data   or
    information.  The provisions  of this  section shall  survive  Employee's
    employment   hereunder  regardless  of  the   cause  of  termination   of
    employment  or this Agreement.  The phrase  "confidential or  proprietary
    data  or information" shall mean  information not generally available  to
    the  public,  including,  but  not  limited  to,  personnel  information,
    financial  information, customer  lists, supplier  lists, trade  secrets,
    secret  processes, computer  data and  programs, pricing,  marketing  and
    advertising data. Employee acknowledges and agrees that any  confidential
    or  proprietary information  that Employee  has already  acquired was  in
    fact  received  in  confidence  in  Employee's  fiduciary  capacity  with
    respect to the Company.

    All written materials,  records and documents made by Employer or  coming
    into Employee's  possession during the term  of employment or during  the
    provision of consulting  services by Employee in the course of  providing
    such  services,   concerning  any  product,  processes,  information   or
    services used, developed,  investigated or considered by the Company,  or
    otherwise  concerning the business  or affairs of  the Company, shall  be
    the  sole property  of the  Company and  upon termination  of  Employee's
    employment  for  any  reason,  or  upon  request  of  the  Board   during
    Employee's  employment, Employee shall promptly  deliver the same to  the
    Company. In addition,  upon termination of Employee's employment for  any
    reason,  or  upon request  of  the Board  during  Employee's  employment,
    Employee shall deliver to the Company all of the property of the  Company
    in Employee's possession or under Employee's control, including, but  not
    limited  to, financial statements, marketing  and sales data,  computers,
    and Company credit cards.

 14.      OTHER BUSINESS ACTIVITIES.

    Employee shall  not serve as an officer  of another company, whether  for
    compensation  or otherwise,  requiring more  than nominal  duties by  the
    Employee, during the term of his employment under this Agreement  without
    the express  prior written consent of the Board.  During the term of  his
    employment under this Agreement, Employee may not serve as a Director  of
    any  other organizations without  express prior written  approval by  the
    Board, such approval  not to be unreasonably withheld. In any event,  the
    activities of Employee specified on Exhibit A attached hereto are  hereby
    deemed to be approved and consented to.

 15.      INVENTIONS AND PATENTS.

    During the period of his employment hereunder, Employee agrees to  assign
    all  rights, ownership  and related  privileges and  benefits  associated
    with  inventions and  patents to the  Company. Employee  agrees that  any
    inventions  or patents  obtained in  association with  ideas or  concepts
    initiated  by Employee  during his  employment hereunder  related to  the
    Company's business are  deemed to be Company property. This includes  but
    is not limited to product ideas, changes or improvements; process  ideas,
    changes  or  improvements;  pertinent  intellectual  property,  or  other
    pertinent information.

 16.      CONSULTING SERVICES.

    During  the two-year period  commencing upon  Employee's Retirement  Date
    (the  "Consulting   Period"),  the  Employee  shall  provide   consulting
    services to the  Company and to the Board on an as needed basis,  subject
    to  the other  provisions of  this section.  Employee shall  render  such
    services  as an  independent contractor  and not  as an  employee.  While
    serving as  a consultant, Employee shall not  have any authority to  bind
    or act on behalf of the Company or any of its subsidiaries.

    Employee  shall render  such consulting services  to the  Company or  the
    Board  in   connection  with  the  business   of  the  Company  and   its
    subsidiaries  as the Company  or the Board  from time  to time  requests.
    However, Consultant shall not be required to provide consulting  services
    more than  five business days per calendar  month (pro-rated in the  case
    of   partial  months).  In  general,   such  services  may  be   provided
    telephonically or by other off-site means, provided that the Company  may
    require that the  Employee provide up to three (3) days of such  services
    per  month  at  the  Company's  premises.  The  provision  of  consulting
    services  by  Employee  shall  be scheduled  on  a  reasonable  basis  by
    Employee  and the Company. In  this connection, the Company  acknowledges
    that   during  the  Consulting  Period   the  Employee  may  have   other
    obligations and commitments.

    In  consideration of Employee's provision  of consulting services  during
    the Consulting Period, the Company shall pay the Employee, for each  year
    included  in the Consulting  Period an amount  equal to  one-half of  the
    annual  base salary payable to  Employee in the  year of his  Retirement.
    Said  amount shall be  payable in monthly  installments or in  accordance
    with the  Company's normal payroll cycle,  as determined by the  Company.
    In addition, at  the end of the first year in the Consulting Period,  the
    Company shall pay to Employee an amount equal to the average of the  last
    two  full year bonuses paid  to Employee with  respect to his  employment
    prior to  the Retirement Date, multiplied  by one-half. In addition,  the
    Company shall  continue to provide all  the benefits which were  provided
    to  Employee during  the last  year  of his  employment, subject  to  the
    understandings  that  (i)  such  benefits may  be  changed  in  a  manner
    consistent  with changes the  Company makes to  its benefits in  general,
    (ii)  in lieu of  providing health coverage,  the Company  will make  the
    payments described in  Section 9 hereof, and (iii) no stock options  will
    be granted  to Employee in return for  his consulting services (it  being
    understood that Employee may receive options if he continues to serve  as
    a  director  of the  Company,  for his  services  in that  capacity).  In
    addition,  the  Company  shall  reimburse  the  Employee  for  reasonable
    expenses  incurred by  him in  the course  of performing  the  consulting
    services  subject to the Company's  reasonable requirements with  respect
    to  reporting  and  documentation  of  such  expenses.  The  compensation
    provided hereunder shall be payable to Employee regardless of whether  or
    not  the Company requires  consulting services from  Employee during  any
    particular month.

 17.      MEDIATION.

    The  Company and the Employee  agree that prior  to commencing any  legal
    action arising  out of a dispute over  provisions in this Agreement,  the
    parties shall  first negotiate for a period of  not less than 30 days  in
    an effort  to resolve the dispute. If  these efforts are not  successful,
    then the  parties shall submit to  non-binding mediation conducted by  an
    independent  third-party mediator in  an effort to  resolve the  dispute,
    provided that such mediation must be completed with in 60 days after  the
    date  on  which   it  commences.  Thereafter,  if  the  dispute   remains
    unresolved,  either  party  may commence  legal  action  to  resolve  the
    dispute, it  being understood that, if  mutually agreed, the parties  may
    instead elect to submit the dispute to binding arbitration.

 18.      COOPERATION IN CLAIMS.

    Both during employment  and post employment, Employee agrees that in  the
    event of  a legal action against the  Company, or legal action  initiated
    by the Company against another party, in which Employee is deemed by  the
    Company  to be a  material witness or  affiant, Employee  agrees to  make
    reasonable  and  best efforts  to  cooperate  with the  Company  in  such
    matters.  If  Employee is  no  longer employed,  Company  will  reimburse
    Employee for  time and expenses incurred as  a result of cooperation  for
    this purpose.

 19.      INDEMNIFICATION.

    During  and  after  termination  of  Employee's  employment  under   this
    Employment Agreement, the  Company shall indemnify and hold harmless  the
    Employee  from liability  incurred  as a  result  of performance  of  his
    duties  as an Officer and  member of the Board,  and as a consultant,  if
    applicable, to the fullest extent permitted under Texas law. In  addition
    the Company shall use reasonable efforts to secure coverage for  Employee
    under  appropriate D&O  insurance policies,  to the  extent available  at
    reasonable cost with appropriate coverage.

 20.      NOTICES.

    All notices, requests,  demands and other communications provided for  by
    this  Agreement shall  be in writing  and shall  be deemed  to have  been
    given  when mailed at  any general or  branch United  States Post  Office
    enclosed in a certified postpaid envelope, return receipt requested,  and
    addressed to the address of the respective party stated below or to  such
    changed address as the party may have fixed by notice:

    If to the Employee:

         Brad Jacoby


    If to the Company:

         Corporate Counsel:

         Gregory W. Mitchell
         4201 Shadybrook Ln.
         Rowlett, Texas  75088

    Any notice  of change of address shall  only be effective, however,  when
    received.

 21.      SUCCESSORS AND ASSIGNS.

    This Agreement  shall inure to the benefit of,  and be binding upon,  the
    Company, its  successors and assigns, including, without limitation,  any
    corporation which may  acquire all or substantially all of the  Company's
    assets  and business or  into which the  Company may  be consolidated  or
    merged, and the Employee, his heirs, executors, administrators and  legal
    representatives. Then Employee  may assign his right to payment, but  not
    his obligations, under this Agreement.

 22.      APPLICABLE LAW.

    This Agreement shall  be governed, enforced and construed under the  laws
    of the State of Texas.

 23.      OTHER AGREEMENTS.

    This  Agreement  supersedes  all  prior  understandings  and   agreements
    between  the  parties.  It  may not  be  amended orally,  but only  by  a
    writing signed by the parties hereto.

 24.      NON-WAIVER.

    No delay  or failure by either party in  exercising any right under  this
    Agreement,  and  no partial  or  single  exercise of  that  right,  shall
    constitute a waiver of that or any other right.

 25.      HEADINGS.

    Headings  in this Agreement  are for convenience  only and  shall not  be
    used to interpret or construe its provisions.

 26.      COUNTERPARTS.

    This  Agreement may  be executed  in two  or more  counterparts, each  of
    which  shall  be deemed  an  original but  all  of which  together  shall
    constitute one and the same instrument.


 INTEGRATED PERFORMANCE SYSTEMS, INC.

 By
       /s/ Brad Jacoby
       --------------------------------------
       Its: CEO



 AND
       /s/ Brad J. Peters
       --------------------------------------
       Its: CFO



 EMPLOYEE


       /s/ Brad Jacoby
       --------------------------------------
       Brad Jacoby