Document:

EXHIBIT 4.1

                               PROMISSORY NOTE

 $12,500,000.00                                               January 3, 2006

      FOR  VALUE  RECEIVED,  Hallmark  Financial  Services,  Inc.,  a  Nevada
 corporation ("Maker"), promises to pay to  the order of Newcastle  Partners,
 L.P., a Texas limited partnership ("Payee"), the sum of TWELVE MILLION  FIVE
 HUNDRED THOUSAND  AND  NO/100 DOLLARS  ($12,500,000.00), together  with  per
 annum interest on  the unpaid  balance hereof  from time  to time  remaining
 unpaid, at a rate equal to  the lesser of (i)  ten percent (10%) per  annum,
 compounded monthly, and (ii) the maximum  rate allowed under  applicable law
 (the "Maximum  Rate"), both  principal and  interest  being payable  at  300
 Crescent Court, Suite 1110, Dallas, Texas  75201, or at such other place  as
 Payee may, from time to time, designate in writing.

      Accrued and unpaid  interest under this  Promissory Note (this  "Note")
 shall be due  and  payable  on the first  business day  of each  month.  The
 unpaid principal balance on this Note  together with all accrued and  unpaid
 interest is due and payable  on demand at any time after June 30, 2006.  All
 past due principal  and accrued interest  on this Note  shall bear  interest
 from the date such amount is due until paid at the Maximum Rate.

      Maker agrees to use the proceeds  of this Note to fund the  acquisition
 of Aerospace Holdings, LLL pursuant to that certain Purchase Agreement dated
 December 12, 2005,  by  and  among  Hallmark Financial  Services,  Inc.  and
 Donnell Children Revocable Trust and Curtis R. Donnell.

      1.   Prepayments.   Maker shall  have the  right to  prepay the  unpaid
 principal balance hereof  in part  or  in its entirety.  In the  event of  a
 prepayment, there  shall be  no penalty  or  premium  due.  Any  prepayment,
 whether in whole or in  part, shall be applied  first to accrued and  unpaid
 interest and then to principal, and interest shall immediately cease to  run
 on any amount of the principal so prepaid.

      2.   Default; Acceleration.  At Payee's sole option, the entire  unpaid
 principal balance of,  and all  accrued and  unpaid interest  on, this  Note
 shall immediately  be due  and payable  upon the  occurrence of  any of  the
 following: (a) failure by  Maker to pay any  principal amount when due;  (b)
 the occurrence  of  a default  under  any  of Maker's  other  material  loan
 obligations, (c) commencement of a voluntary case against Maker under  Title
 11 of  the United  States Code;  or (d)  the filing  of an  answer or  other
 pleading admitting or failing to deny the material allegations of a petition
 filed against Maker commencing  an involuntary case under  said Title 11  or
 failure to  timely controvert  the material  allegations of  such  petition;
 provided that, the failure by Maker to make an interest payment (other  than
 an interest payment  due to  acceleration of  amounts due  under this  Note)
 shall not constitute a default under this Note.

      3.   Cumulative Rights.   No delay on  the part of  Payee or any  other
 holder of this Note in the exercise of any power or right under this Note or
 under any  other instrument  executed pursuant  hereto  shall operate  as  a
 waiver thereof, nor shall a single or partial exercise of any power or right
 preclude other or  further exercise  thereof or  the exercise  of any  other
 power or right.

      4.   Waiver.  Except as expressly otherwise provided for herein,  Maker
 and all endorsers of this Note waive demand, presentment, protest, notice of
 dishonor, notice of nonpayment, notice of intention to accelerate, notice of
 acceleration, notice of protest and any  and all lack of diligence or  delay
 in collection or the filing of suit hereon which may occur, and agree to all
 extensions and partial payments, before or after maturity, without prejudice
 to the holder hereof.

      5.   Attorneys' Fees and Costs.  In the event that hereafter this  Note
 is placed in the hands of an attorney  for collection, or in the event  that
 this Note is collected in whole or in part through legal proceedings of  any
 nature, then  and in  any such  case, there  shall be  added to  the  unpaid
 principal balance hereof all reasonable  costs of collection, including  but
 not limited to reasonable  attorneys' fees, on  account of such  collection,
 whether or not suit is filed.

      6.   Governing Law.  This  Note shall be  construed in accordance  with
 the laws of the State of Texas.

      7.   Headings.  The headings of the sections of this Note are  inserted
 for convenience only and shall not be deemed to constitute a part hereof.

      8.   Usury.  All agreements between Maker and Payee or any other holder
 of this Note, whether now existing or hereafter arising and whether  written
 or  oral,  are  expressly  limited  so  that  in  no  contingency  or  event
 whatsoever, whether by  acceleration of this  Note or  otherwise, shall  the
 amount paid, or agreed to be paid, to Payee or any other holder hereof,  for
 the use, forbearance  or detention of  the money to  be loaned hereunder  or
 otherwise, exceed the Maximum  Rate.  If  from any circumstances  whatsoever
 fulfillment of  any  provision  of  this  Note  or  of  any  other  document
 evidencing, securing or pertaining to the indebtedness evidenced hereby,  at
 the  time  performance  of  such  provision  shall  be  due,  shall  involve
 transcending the  Maximum  Rate, then,  ipso  facto, the  obligation  to  be
 fulfilled shall be reduced to  the limit of such  validity, and if from  any
 such circumstances Payee or any other holder of this Note shall ever receive
 as interest under this  Note or any other  document evidencing, securing  or
 pertaining to the indebtedness evidenced hereby or otherwise an amount  that
 would exceed the Maximum Rate, such amount that would be excessive  interest
 shall be applied to the reduction  of the principal amount owing under  this
 Note or on  account of  any other  indebtedness of  Maker to  Payee or  such
 holder hereof relating to this Note, and not to the payment of interest,  or
 if such excessive interest exceeds the  unpaid balance of principal of  this
 Note and such other  indebtedness, such excess shall  be refunded to  Maker.
 In determining whether or not the  interest paid or payable with respect  to
 any indebtedness of  Maker to Payee  or any other  holder hereof, under  any
 specific contingency, exceeds the Maximum Rate, Maker and Payee or any other
 holder hereof  shall, to  the maximum  extent permitted  by applicable  law:
 (a) characterize any  nonprincipal payment  as an  expense, fee  or  premium
 rather than as interest; (b) exclude  voluntary prepayments and the  effects
 thereof; (c) amortize,  prorate, allocate  and spread  the total  amount  of
 interest throughout the full  term of such indebtedness  so that the  actual
 rate of interest on account of  such indebtedness is uniform throughout  the
 term  thereof;  and/or  (d) allocate  interest  between  portions  of   such
 indebtedness, to the end that no such portion shall bear interest at a  rate
 greater than  that  the  Maximum  Rate.  The terms  and provisions  of  this
 paragraph shall control and supersede  every other conflicting provision  of
 all agreements between Maker and Payee or any other holder hereof.

      9. Notices.   All  notices, requests, demands and other  communications
 hereunder shall be in writing  and shall be deemed  to have been duly  given
 when  personally  delivered,  transferred  via  facsimile  or  mailed,   via
 certified or registered mail, as follows:

      if to Maker:        Hallmark Financial Services, Inc.
                          777 Main Street
                          Suite 1000
                          Fort Worth, Texas 76102
                          Fax No.: (817) 348-1815
                          Attention:  Mark J. Morrison

      if to Payee:        Newcastle Partners, L.P.
                          300 Crescent Court
                          Suite 1110
                          Dallas, Texas 75201
                          Fax No.: (214) 661-7475
                          Attention:  Mark E. Schwarz

      10.  Successors and Assigns.   All  of the  stipulations, promises  and
 agreements in this Note contained by or  on behalf of Maker and Payee  shall
 bind the successors and assigns of Maker and Payee, whether so expressed  or
 not, and inure to  the benefit of  the successors and  assigns of Maker  and
 Payee.

      11.  Severability.  In  the event  any one  or more  of the  provisions
 contained in this Note shall for any  reason be held to be invalid,  illegal
 or  unenforceable   in  any   respect,   such  invalidity,   illegality   or
 unenforceability shall not affect any other provision hereof, and this  Note
 shall be construed as  if such invalid,  illegal or unenforceable  provision
 had never been contained herein.

      IN WITNESS WHEREOF, the  undersigned has executed this  Note as of  the
 day and year first above written.

                               HALLMARK FINANCIAL SERVICES, INC.

                               By:
                                      --------------------------
                               Name:
                                      --------------------------
                               Title:
                                      --------------------------EXHIBIT 4.7

                             AMENDED AND RESTATED
                           SECURED PROMISSORY NOTE

 Principal Amount: $4,200,000                                October 28, 2005

 This Amended  and  Restated Secured  Promissory  Note ("Note")  is  executed
 pursuant to the Loan Agreement dated  October 28, 2005.  This Note  reflects
 the combination of a $1,000,000 Note, a $3,000,000 Note, and a $200,000 Note
 (collectively "Original Notes")  all payable to  Brad Jacoby ("Payee")  into
 this Note.

 The Original Notes represented  and  evidenced the consideration referred to
 in the Agreement and Plan of  Merger between and among Best Circuit  Boards,
 Inc., a Texas  corporation, Integrated  Performance Systems,  Inc., and  its
 wholly-owned subsidiary,  the LSC  Merger Corp.,  a Texas  corporation,  and
 others, which agreement  was originally executed  on October  22, 2004  (the
 "Purchase Agreement"), and subsequently modified by an Addendum executed  as
 of November 24, 2004.

 THE SECURITIES  ISSUED PURSUANT  TO THE  CONVERSION  RIGHTS HEREIN  WILL  BE
 ACQUIRED FOR INVESTMENT AND WILL NOT  BE AND HAVE NOT BEEN REGISTERED  UNDER
 THE SECURITIES ACT OF 1933 OR UNDER  ANY STATE SECURITIES OR BLUE SKY  LAWS.
 THEY MAY NOT BE SOLD, OFFERED  FOR SALE, PLEDGED, HYPOTHECATED OR  OTHERWISE
 TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
 SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
 THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT  TO
 RULE 144 UNDER SUCH ACT.

      FOR VALUE RECEIVED,  the undersigned,  INTEGRATED PERFORMANCE  SYSTEMS,
 INC. ("Integrated"), a New York corporation,  and Best Circuit Boards,  Inc.
 ("BCB"), a Texas corporation, and any successor entities to Integrated or to
 BCB, or  surviving  entities  pursuant to  merger  with  Integrated  or  BCB
 (collectively "Maker"), enter this Amended and Restated Promissory Note (the
 "Note") and do hereby promise to pay to the order of Brad Jacoby  ("Payee"),
 or a  designee of  Payee, the  principal  sum of  FOUR MILLION  TWO  HUNDRED
 THOUSAND AND NO/100THS  DOLLARS ($4,200,000.00), together  with interest  on
 the unpaid principal balance from time to time outstanding hereunder at  the
 rates hereinafter  set forth.  All sums  payable  hereunder are  payable  to
 Payee's attention  at 2  Balmoral, Richardson,  Texas 75082,  or such  other
 place as Payee may designate in writing.

 1.  Interest
     --------

   Interest  shall  accrue  on  the  unpaid  principal  balance   outstanding
 hereunder at an annual rate equal  to eight percent (8%) per annum  computed
 daily on the  basis of  a 365/366 day  year for  the actual  number of  days
 elapsed  during  which  the  principal  is  outstanding  until  the   entire
 indebtedness  evidenced  by  this   Note  (including,  without   limitation,
 principal and accrued unpaid interest) is paid in full.

 2.  Terms of Payment (Principal and Interest)
     -----------------------------------------

   Interest is payable semi-annually.  The first payment  of interest is  due
 and payable on March  31, 2006, and interest  payments shall continue to  be
 due every six months, until September  30, 2008, when this Note matures  and
 the principal and  all accrued and  unpaid interest are  due and payable  in
 full.

 3.  Right of Conversion
     -------------------

   Payee shall have the right to convert this Note, either in whole or  part,
 into common  stock  of  Integrated.  The Note  shall  be  convertible  at  a
 conversion price of $0.15 per common share (the "Conversion Price").

 In addition, Maker shall pay to Payee  on the Conversion Date, in cash,  any
 accrued and unpaid interest on the Note being converted not included at  the
 option of Payee.

 Upon the conversion of the Note, Maker  shall, at its own cost and  expense,
 take all, necessary action (including the issuance of an opinion of counsel)
 to assure that Integrated's transfer agent shall issue stock certificates in
 the name of Payee (or  its nominee) or such  other persons as designated  by
 Payee and in such denominations to  be specified at conversion  representing
 the number of shares of common stock issuable upon such conversion.

      (i)  Exercise of Conversion Privilege

   Payee my exercise his  conversion privilege on this  Note on any  business
 day by telecopying or presenting an executed and completed Conversion Notice
 to the  Maker. Each  date on  which  a Conversion  Notice is  telecopied  or
 presented to  Maker in  accordance with  this provision  shall constitute  a
 Conversion Date.  Maker shall immediately convert  this Note  and issue  the
 common stock in the manner provided herein, and all voting and other  rights
 associated with the beneficial ownership of the common stock shall vest with
 Payee, effective as  of the  Conversion Date at  the time  specified in  the
 Conversion Notice.  The Conversion Notice also shall state the name or names
 (with addresses) of the person who are  to become the holders of the  common
 stock in connection with such conversion.  As promptly as practicable  after
 the receipt of the Conversion Notice as aforesaid, but in any event not more
 than three (3) business  days after the Maker's  receipt of such  Conversion
 Notice, Maker  shall (a)  cause  Integrated to  issue  the common  stock  in
 accordance with the  provisions of  Section 3 herein;  and (b)  Cause to  be
 mailed for delivery  by overnight courier,  or if  a Registration  Statement
 covering the common stock has been declared effective by the SEC cause to be
 electronically  transferred,  to   Payee  a   certificate  or   certificates
 representing the number of common shares  to which the Payee is entitled  by
 virtue of such  conversion. Such  conversion shall  be deemed  to have  been
 effected at the time at which  the Conversion Notice indicates, and at  such
 time the rights of  the Payee of this  Note, as such (except  if and to  the
 extent that any principal amount  thereof remains unconverted), shall  cease
 and the person and persons in whose name or names the common stock shall  be
 issuable shall be deemed to have become  the holder or holders of record  of
 the common  shares represented  thereby, and  all  voting and  other  rights
 associated with the beneficial ownership of such common shares shall at such
 time  vest  with  such  person  or  persons.  The  Conversion  Notice  shall
 constitute a contract between the Payee  and Maker, whereby the Payee  shall
 be deemed to  subscribe for the  number of common  shares which  it will  be
 entitled to receive upon such conversion and, in payment and satisfaction of
 such subscription (and for any cash adjustment to which it is entitled),  to
 surrender this Note and to release Maker from all liability thereon  (except
 if and to the extent that any principal amount thereof remains unconverted).

      (ii) Challenge or Dispute

   If, at  any  time after  the  date of  this  Note, (a)  Maker  challenges,
 disputes, or denies the  right of Payee hereof  to effect the conversion  of
 this  Note  into  common  shares  or  otherwise  dishonors  or  rejects  any
 Conversion Notice delivered in  accordance with this Section  3; or (b)  any
 third party who is not  and has never been  an affiliate of Payee  commences
 any lawsuit or legal  proceeding or otherwise asserts  any claim before  any
 court or public or  governmental authority which  seeks to challenge,  deny,
 enjoin, limit, modify, delay, or. dispute  the right of the Payee hereof  to
 effect the conversion of this Note into common shares, then the Payee  shall
 have the right,  by written notice  to the Maker,  to require  the Maker  to
 promptly redeem this Note for cash at one hundred twenty-five percent (125%)
 of the  principal  amount thereof,  together  with all  accrued  and  unpaid
 interest thereon to the date of  redemption. Under any of the  circumstances
 set forth above, the Maker shall be responsible for the payment of all costs
 and expenses of Payee, including reasonable legal fees and expenses, as  and
 when incurred in defending itself in any such action or pursuing its  rights
 hereunder (in addition to any other rights of Payee).

      (iii)  In Event of Bankruptcy Proceeding

   The  Payee  shall  be  entitled  to  exercise  its  conversion   privilege
 notwithstanding the commencement of any case  under the Bankruptcy Code.  In
 the event the  Maker is  a debtor under  the Bankruptcy  Code, Maker  hereby
 waives to the  fullest extent  permitted any rights  to relief  it may  have
 under 11 U.S.C. S362 in respect  of Payee's conversion privilege. The  Maker
 agrees, without cost or expense to Payee, to take or consent to any and  all
 action necessary to effectuate relief under 11 U.S.C. S362.

 4.  Pledge and Security
     -------------------

   This Note  is secured  by all  instruments  heretofore, now  or  hereafter
 executed by Maker or  any guarantors in  favor of Payee  and by their  terms
 securing the payment of any then existing indebtedness and future  advances,
 including, without limitation, advances of the type represented by this Note
 (hereinafter  "Security  Documents")  including,  without  limitation,   the
 following:

           (a)  Security Agreements  -  This Note  shall  be secured  by  the
                Pledge of the following tangible and intangible assets (which
                shall collectively be referred to as the "Collateral"):

                (1)  IPFS stock owned by D. Ronald  Allen and held in  escrow
                     pursuant to  the  Stock Escrow  and  Security  Agreement
                     originally dated  September 16,  2004, and  subsequently
                     modified  pursuant  to   the  terms   of  the   Purchase
                     Agreement;

                (2)  All the  stock of  Best Circuit  Boards, Inc.,  and  any
                     successor company held by  Integrated or any  Integrated
                     successor (see Amended  and Restated Security  Agreement
                     #1 attached and executed of even date herewith); and

                (3)  The  tangible  assets  held  by  BCB  (see  Amended  and
                     Restated Security Agreement #2 attached and executed  of
                     even date herewith).

                Security  Agreement  #1   and  Security   Agreement  #2   are
                hereinafter  referred  to   collectively  as  the   "Security
                Agreements."

           (b)  One or more UCC Financing Statements perfecting the  security
                interest granted by Maker, as  Pledgor, to Payee, as  Secured
                Party, in the Collateral.

 5.  Priority and Other Liens
     ------------------------

   Except as otherwise  set forth  in the  Security Agreements  set forth  in
 Section 4.  above, the  security interests  securing this  Note and  on  the
 Collateral described  in the  Security Agreements  are subject  only to  the
 priority claims of parties whose security  interest were perfected prior  to
 the effective  date of  the Original  Notes.  Additionally, Maker  will  not
 assign, transfer, sell, or grant, or permit any lien or security interest in
 the Collateral to  or in  favor of any  other party,  without Payee's  prior
 written consent.

 6.  Events of Default
     -----------------

   An "Event of Default" means one more of the following events has  occurred
 and Payee has given Maker  written notice of the  event and the time  period
 required to cure same, and the event remains uncured after the expiration of
 the period indicated hereinbelow:

           (a)  Maker fails to pay any amount required to be paid under  this
                Note, the Security Agreements,  or any other promissory  note
                issued by Maker and such failure continues for ten (10)  days
                from the  date of  Payee's written  notice to  Maker of  such
                failure to pay;

           (b)  Any material breach of a  representation or warranty made  by
                Maker in this Note or the Security Agreements that  continues
                for ten (10) days from the date of Payee's written notice  to
                Maker of such material breach;

           (c)  Maker defaults under  the terms  of this  Note, the  Security
                Agreements,  or  any  other   promissory  note  or   security
                agreement  to  which  Maker  is  a  party  and  such  failure
                continues for  ten (10)  days from  the date  Maker  receives
                written notice thereof from any party to one or more of those
                documents;

           (d)  Maker  commences  any  "Insolvency  Proceeding"  (hereinafter
                defined) with  respect  to  itself or  takes  any  action  to
                effectuate or authorize an Insolvency Proceeding; and

           (e)  Any involuntary Insolvency Proceeding  is commenced or  filed
                against Maker or any  writ, judgment, warrant of  attachment,
                execution or similar process is issued or levied against  all
                or a  substantial  part  of  its  properties,  and  any  such
                involuntary Insolvency Proceeding  or petition  shall not  be
                dismissed, or  such writ,  judgment, warrant  of  attachment,
                execution or similar process  shall not be released,  vacated
                or fully bonded  within sixty (60)  days after  commencement,
                filing or levy.

                The term "Insolvency Proceeding"  means (a) any case,  action
                or  proceeding   relating  to   bankruptcy,   reorganization,
                insolvency, liquidation,  receivership, dissolution,  winding
                up or relief of  debtors, or (b)  any general assignment  for
                the benefit of creditors, composition,  marshaling of  assets
                for creditors, or other similar arrangement in respect of its
                creditors  generally  or  any   substantial  pardon  of   its
                creditors undertaken under  United States  Federal, state  of
                foreign law, including the  Federal Bankruptcy Reform Act  of
                1978 (11 U.S.0 A. S 101 et seq);

           (f)  Maker defaults under any  note, security agreement, or  other
                document related to a  security interest superior to  Payee's
                security interest described herein and that default gives the
                superior interest holder the right to accelerate its debt and
                such default continues  for ten (10)  days from  the date  of
                Maker's receipt from any party of such failure;

           (g)  Maker  contractually  grants  any  other  party  a   security
                interest or otherwise encumbers the Collateral without  first
                obtaining the express written consent of Payee;

           (h)  Maker fails to pay any tax, resulting in the attachment of  a
                security interest  in  or against  all  or any  part  of  the
                Collateral;

           (i)  The entry of a judgment against Maker or the issuance of  any
                attachment, sequestration, or similar writ is levied upon any
                of Maker's property which is not remedied within twenty  (20)
                days;

           (j)  Any required permit,  license, certificate  or approval  with
                respect to  the Collateral  ceases to  be in  full force  and
                effect; or

           (k)  Payee determines, in its sole and absolute discretion, that a
                material  adverse  change  has  occurred  in  the   financial
                condition of Maker or that there is a danger to or impairment
                of the Collateral.

 7.  Remedies Upon Default
     ---------------------

   At any time  after an  Event of Default  has occurred  and is  continuing,
 Payee shall have the right to  declare all amounts due and owing  hereunder,
 including,  without  limitation,  principal  and  accrued  unpaid  interest,
 immediately due and payable in full without presentment, demand, protest  or
 notice (except as stated above and in the Security Agreements), all of which
 are hereby expressly waived  by Maker to the  extent indicated.  Payee shall
 also have  the right  upon the  occurrence and  continuance of  an Event  of
 Default to exercise any one or more of its remedies under this Agreement  or
 any other applicable Security Agreement.  If Maker fails to make any payment
 when due under this Note, then, in addition  to any and all other relief  to
 which Payee may be  entitled, Maker agrees to  pay (or reimburse Payee  for)
 any and all reasonable costs, expenses and fees incurred by Payee to enforce
 this  Note  or  otherwise  collect  indebtedness  evidenced  by  this  Note,
 including, without limitation, reasonable attorney's fees and court costs.

 Upon an  Event of  Default, Payee  at its  election may  (but shall  not  be
 obligated to), without  notice, do  any one or  more of  the following:  (a)
 terminate its commitment to  extend any additional  monies under this  Note;
 (b) terminate  any obligation  to extend  any  other credit  to or  for  the
 account of Maker; (c) reduce any claim to judgment; (d) exercise any and all
 rights and  remedies afforded  by this  Note, the  Security Documents,  law,
 equity or otherwise, including, without limitation, obtaining appointment of
 a receiver (to which Maker hereby consents) and/or judicial. or non judicial
 foreclosure under the  Security Agreements; (e)  in its own  name or in  the
 name of Maker,  enter into possession  of the Collateral,  perform all  work
 necessary  to  complete  any,  or  all  of  Maker's  outstanding   contracts
 substantially in accordance  with said  contract(s) (as  modified as  deemed
 necessary by Payee), the  Security Documents, and  all applicable laws,  and
 governmental requirements pursuant to the applicable contracts or otherwise;
 or (f) set-off and apply,  to the extent thereof  and to the maximum  extent
 permitted by law, any and  all deposits, funds, or  assets at any time  held
 and any and all other indebtedness at any time owing by Payee to or for  the
 credit or account of Maker against any indebtedness.

      Maker hereby appoints Payee as Maker's attorney-in-act, which power  of
 attorney is irrevocable  and coupled with  an interest, with  full power  of
 substitution, to do any of the following in Maker's name upon the occurrence
 of an  Event of  Default: (i)  use such  sums as  are necessary,  including,
 without limitation, any proceeds of this Note and any Collateral, make  such
 changes or corrections in the Maker's existing contracts as may be required,
 or as Payee may otherwise consider desirable, for the purpose of  completing
 any outstanding contracts  or obligations substantially  in accordance  with
 the terms thereof (as modified as  deemed necessary by Payee), the  Security
 Documents, and  all  applicable  laws and  governmental  requirements;  (ii)
 execute all applications and certificates in the name of Payee which may  be
 required for completion of any contract; (iii) endorse the name of Maker  on
 any checks or  drafts representing proceeds  of any  insurance policies,  or
 other  payments  or  instruments  payable  to  Maker  with  respect  to  the
 Collateral; (iv) do every act with respect to the Collateral that Maker  may
 do; (v)  prosecute  or defend  any  action  or proceeding  incident  to  the
 Collateral; (vi) pay, settle,  or compromise all bills  and claims so as  to
 clear title to the Collateral; and (vii) take  over and use all or any  part
 of the labor, materials, supplies and equipment contracted for, owned by, or
 under the control of Maker, whether or not previously incorporated into  the
 Collateral. Any  amounts expended  by Payee  to  complete the  foregoing  on
 Maker's behalf or  in connection with  the exercise of  its remedies  herein
 shall be  deemed  to have  been  advanced to  Maker  hereunder as  a  demand
 obligation owing by  Maker to Payee  and shall constitute  a portion of  the
 indebtedness under this Note, regardless of whether such amounts exceed  any
 limits for  indebtedness otherwise  set forth  herein. Payee  shall have  no
 liability to Maker for the sufficiency or adequacy of any such actions taken
 by Payee. THE EXCULPATION PROVISION OF THE IMMEDIATELY PRECEDING SENTENCE IS
 INTENDED TO APPLY TO ANY ACT OR  FAILURE. TO ACT BY PAYEE WHICH  CONSTITUTES
 PAYEE'S OWN ORDINARY NEGLIGENCE.

      No delay or omission  of Payee to exercise  any right, power or  remedy
 accruing upon the  happening of an  Event of Default  shall impair any  such
 right, power or  remedy or shall  be construed to  be a waiver  of any  such
 Event of Default or  any acquiescence therein. No  delay or omission on  the
 part of Payee to exercise any option for acceleration of the maturity of the
 indebtedness, or for  foreclosure or sale  of the  Collateral following  any
 Event of  Default  as  aforesaid,  or any  other  option  granted  to  Payee
 hereunder in any one or more instances,  or the acceptances by Payee of  any
 partial payment on account of the indebtedness, shall constitute a waiver of
 any such Event of Default, and each such option shall remain continuously in
 full force and effect. No remedy herein conferred upon or reserved to  Payee
 is intended to be exclusive of any other remedies provided for in this  Note
 or any of the other Security Documents, and each and every such remedy shall
 be cumulative,  and  shall  be  in addition  to  every  other  remedy  given
 hereunder, or under this Note or any of the other Security Documents, or now
 or hereafter existing at law or in equity or by statute. Every right,  power
 and remedy  given  to Payee  by  this Note  or  any of  the  other  Security
 Documents shall be concurrent, and  may be pursued separately,  successively
 or together against Maker,  guarantor, or any  personal property granted  as
 security under the  Security Documents, and  every right,  power and  remedy
 given by this Note or any of  the other Security Documents may be  exercised
 from time to time as often as may be deemed expedient by Payee.

 8.  Annual Interest Rate Upon Default
     ---------------------------------

   All past due installments of principal and interest due and owing on  this
 Note, shall bear interest from maturity thereof until paid at the lesser  of
 (i) Eighteen percent (18.00%) per annum or (ii) the Maximum Rate as  defined
 herein.  Upon acceleration  or maturity of  the entire outstanding principal
 balance of this Note, the said principal amount shall bear interest from the
 date of acceleration or maturity until paid at the rate of Eighteen  percent
 (18%) per annum calculated and applied  on the basis of actual days  elapsed
 and a 365/366 day  year, subject to Paragraph  1 hereof; PROVIDED,  HOWEVER,
 that the interest payable  under this Paragraph shall  in no way exceed  the
 Maximum Rate as defined herein.

 9.  Conversion upon Default
     -----------------------

   In the event that  it is determined that  the Maker is  in default of  its
 indebtedness to the Payee, then Payee, at its sole option, shall be entitled
 to convert all or a portion of the indebtedness represented by the Note into
 equity of Maker or reduce  by offset all or  any portion of the  outstanding
 balance of this  Note in cash  in an amount  necessary to satisfy  all or  a
 portion of such indebtedness owed to Payee by Maker.

 To the extent  that funds are  either not readily  available to satisfy  the
 Payee's entire claim  for payment, upon  notice of demand,  as described  in
 Section 13, the  Maker agrees to  provide a payment  solution acceptable  to
 Payee, utilizing  a  cash equivalent  which  would, subject  to  appropriate
 federal  and  state  securities  laws,  include,  but  not  be  limited  to,
 unrestricted common stock of the Maker.

 Should Payee  elect  to  convert  all  or  a  portion  of  the  indebtedness
 represented by the Note into equity of Maker, Maker and Payee agree that the
 equity shall carry a value equal to  $0.15 per share. At the effective  time
 of conversion,  without any  action on  the part  of the  Maker Payee  shall
 receive shares of Maker in a number equal to the total indebtedness due  the
 Payee at the time of closing.

 10. Usury Savings and Spreading
     ---------------------------

   It is expressly stipulated and agreed to be the intent of Maker and  Payee
 at all times  to comply with  applicable law governing  the Maximum Rate  or
 amount of interest payable on or in  connection with this Note and the  loan
 evidenced hereby (or applicable United States federal law to the extent that
 it permits Payee to contract for, charge, take, reserve or receive a greater
 amount of interest than under applicable state law). If the applicable state
 or federal law is ever judicially  interpreted so as to render usurious  any
 amount called  for under  this  Note or  under  the Security  Documents,  or
 contracted for, charged,  taken, reserved or  received with  respect to  the
 Note, or if acceleration of the maturity  of this Note or if any  prepayment
 by Maker  results  in Maker  having  paid any  interest  in excess  of  that
 permitted by law, then it is Maker's and Payee's express intent that (i) all
 excess amounts theretofore collected by Payee  be credited on the  principal
 balance of this Note (or, if this Note has been or would thereby be paid  in
 full, refunded  to Maker);  and (ii)  the provisions  of this  Note and  the
 Security Documents immediately be deemed reformed and the amounts thereafter
 collectible hereunder and thereunder reduced,  without the necessity of  the
 execution of any new document, so as to comply with the applicable law,  but
 so as to  permit the  recovery of the  fullest amount  otherwise called  for
 hereunder and thereunder. The right to accelerate maturity of this Note does
 not include the  right to accelerate  any interest which  has not  otherwise
 accrued on the  date of  such acceleration, and  Payee does  .not intend  to
 collect any unearned interest in the event of acceleration. All sums paid or
 agreed to be  paid to Payee  for the use,  forbearance or  detention of  the
 indebtedness evidenced hereby shall, to  the extent permitted by  applicable
 law, be amortized, prorated, allocated and  spread throughout the full  term
 of such indebtedness until  payment in full  so that the  rate or amount  of
 interest on  account of  such indebtedness  does not  exceed the  applicable
 usury ceiling. Notwithstanding any  provision contained in  this Note or  in
 any of  the Security  Documents that  permits the  compounding of  interest,
 including without  limitation any  provision by  which  any of  the  accrued
 interest is added to the principal amount of this Note, the total amount  of
 interest that Maker  is obligated to  pay and Payee  is entitled to  receive
 with respect to this Note shall not exceed the amount calculated on a simple
 (i.e., non-compounded)  interest  basis  at the  Maximum  Rate  (as  defined
 hereinafter) on principal amounts actually advanced to or for the account of
 Maker, including any initial  funds advanced contemporaneously herewith  and
 any advances made pursuant to any of the Security Documents (such as for the
 payment of taxes, insurance premiums and the like). As used herein, the term
 "Maximum Rate" shall mean  the maximum non usurious  rate of interest  which
 may be  lawfully contracted  for, charged,  taken, reserved  or received  by
 Payee from  Maker  in  connection  with  the  Note  evidenced  hereby  under
 applicable state law (or applicable United States federal law to the  extent
 that it permits Payee  to contract for, charge,  take, reserve or receive  a
 greater amount of interest than under state law).

 11. Prepayment and Recoupment
     -------------------------

   Maker hereby reserves the right at any time to make payments of  principal
 or interest before they are due without penalty or premium. All  prepayments
 shall be applied first to accrued,  unpaid interest, and the balance of  any
 prepayment shall be applied to reduce  the amount of principal payments  due
 under this Note in the order of their maturity.

 12. Representations and Warranties of Maker
     ---------------------------------------

   Maker represents and  warrants that (i)  Maker has  obtained any  consents
 necessary to execute, deliver and perform  its obligations under this  Note;
 (ii) this Note constitutes the valid and binding obligation of Maker and  is
 enforceable against  Maker in  accordance with  its terms;  (iii) Maker  has
 taken all corporate action necessary to authorize the execution and delivery
 of this Note and each legal agent who  may be executing this Note on  behalf
 of Maker has authority  to execute and deliver  this Note; (iv) neither  the
 execution or delivery by Maker of this Note nor the performance by Maker  of
 its obligations hereunder violates, conflicts with, results in a breach  of,
 or constitutes a default under, or will result in the creation or imposition
 of any lien  against or  upon the  assets or  property of  Maker, except  as
 expressly stated herein, pursuant to, or results in a change in any material
 term of (a)  the Articles  of Incorporation or  Bylaws, as  amended, of  any
 Maker, (b) any  and all  applicable laws,  rules, and  regulations; (c)  any
 judgment, decree or order of any court or any other agency of the government
 or (d) any  material agreement to  which any Maker  is a party  or by  which
 Maker's property or assets  are bound; (v) all  of Maker's filings with  the
 Securities and Exchange Commission made pursuant to Sections 13(a) or  15(d)
 of the Securities Exchange At of 1934,  as amended, are true and correct  as
 of the date hereof;  and (vi) Maker has  been represented by separate  legal
 counsel in the negotiation and execution of this Note.

 13. Notices
     -------

   All notices,  demand, communications  and requests  of  any kind  (each  a
 "Notice") which either party may be required or may desire to serve upon the
 other party hereto in connection with  this Note shall be delivered only  by
 courier  or  other  means  of   personal  service  which  provides   written
 verification of receipt or by registered  or certified mail, return  receipt
 requested. Any such  notice (i)  if sent  by registered  or certified  mail,
 shall be  deposited in  the United  States  mail, or  (ii) if  delivered  by
 courier, shall be deposited with the  courier, in each case with postage  or
 delivery charges thereon fully  prepaid. All Notices  shall be addressed  to
 the parties to be served therewith as follows:

 If to Maker:

 Integrated Performance Systems, Inc.
 901 Hensley Drive
 Wylie, Texas  75098

 If to Payee:

 Brad Jacoby
 2 Balmoral
 Richardson, Texas 75082

 Service of any Notice so made shall be deemed complete on the day of receipt
 thereof as shown by the addressee's registry, certification receipt or other
 evidence of receipt or first rejection. Either party hereto may from time to
 time by notice  in writing served  upon the other  as aforesaid designate  a
 different mailing address or a different  or additional person to which  all
 such notices or demands hereafter are to be addressed.

 14. Waivers
     -------

   Except as  otherwise  provided in  this  Note, Maker  and  all  endorsers,
 guarantors, sureties and accommodation parties of this Note, both before and
 after maturity, hereby expressly (i) waive  all protest, notice of  protest,
 demand  for  payment,  presentment  for  payment,  notice  of  intention  to
 accelerate maturity, notice of acceleration of maturity, notice of dishonor,
 bringing of suit, and diligence in taking any action to collect any  amounts
 called for hereunder and in the handling of properties, rights or collateral
 at any  time existing  in connection  herewith; (ii)  consent to  and  waive
 notice of any  one or  more renewals,  extensions or  modifications of  this
 Note, whether made to or in favor of  Maker or any other person or  persons,
 regardless whether any such renewal, extension or modification modifies  the
 terms, interest rate or time for payment of this Note and regardless of  the
 length of term of the renewal,  extension or modification; (iii) consent  to
 and waive notice of  any substitution, exchange or  release of any  security
 now or hereafter given for  this Note; (iv) consent  to and waive notice  of
 the release of any party primarily or secondarily liable hereon; (v) consent
 to and waive notice of any other indulgences, none of which shall  otherwise
 affect the liability of any of  said parties for the indebtedness  evidenced
 by this Note; and  (vi) agree that it  will not be  necessary for Payee,  in
 order to enforce payment of this Note, first to institute suit against or to
 exhaust Payee's remedies against Maker or any other party liable  hereunder,
 or to proceed against any other security for this Note.

 15. Remedies Cumulative
     -------------------

   All rights and remedies  of Payee hereunder are  cumulative of each  other
 and of every other right or remedy which Payee may otherwise have at law  or
 in equity or under any other contract or document for the enforcement of  or
 the collection of  this Note,  and the  exercise of  one or  more rights  or
 remedies shall not prejudice or impair the concurrent or subsequent exercise
 of other rights or remedies. The failure of  Payee at any time to assert  or
 exercise any rights granted by this  Note shall not render the Payee  liable
 to any  person concerned  herein  or deprive  Payee  of any  rights  granted
 herein. All rights  of Payee  hereunder may  be assigned  or transferred  in
 whole or in part by Payee,  as it deems advisable,  and the rights of  Payee
 hereunder shall inure  to the  benefit of  its successors  and assigns.  All
 obligations of Maker hereunder shall bind the heirs, legal  representatives,
 successors and assigns of Maker.

 16. Assignment
     ----------

   No party  to  this Note  may  assign or  delegate  any of  its  rights  or
 obligations hereunder without  first obtaining  the written  consent of  the
 other party, which  consent shall be  in the sole  discretion of such  other
 party.

 17. Definitions; Applicable Law
     ---------------------------

   The terms "Maker"  and "Payee" and  other nouns and  pronouns include  the
 singular and/or plural, as appropriate. The  terms "Maker" and "Payee"  also
 include their  respective heirs,  personal representatives,  successors  and
 assigns. This Note shall  be governed and construed  in accordance with  the
 internal laws,  and  not the  laws  of conflicts,  of  the State  of  Texas.
 Performance by the parties  hereunder shall be  deemed occur exclusively  in
 Wylie, Texas.

 18. Commercial Purpose
     ------------------

   Maker warrants and  represents that  the loan  evidenced by  this Note  is
 being  made  solely  to  acquire  or  carry  on  a  business  or  commercial
 enterprise, and/or Maker  is a  business or  commercial organization.  Maker
 further warrants and represents that all of the proceeds of this Note  shall
 be used for business, commercial, investment  or other similar purposes  and
 shall not be used for personal, family, household or agricultural purposes.

 19. Attorney's Fees and Expenses
     ----------------------------

   In the event  that Payee  or any  other holder  of this  Note brings  suit
 hereon, or employs an attorney or incurs expenses to compel payment of  this
 Note or any  portion of the  indebtedness evidenced hereby,  or to cure  any
 Event of Default under this Note  or any of the Security Documents,  whether
 through suit, insolvency, reorganization, bankruptcy, or any other legal  or
 informal proceeding, Maker and all endorsers, guarantors and sureties  agree
 additionally to pay all  reasonable attorney's fees,  court costs and  other
 reasonable expenses thereby incurred by Payee.

 20. Entire Agreement
     ----------------

   THIS NOTE,  THE SECURITY  AGREEMENTS, AND  ALL INSTRUMENTS  OR   DOCUMENTS
 DELIVERED PURSUANT  HERETO  OR  THERETO, TOGETHER  WITH  ALL  EXHIBITS  .AND
 SCHEDULES HERETO  AND THERETO,  REPRESENT THE  FINAL AGREEMENT  BETWEEN  THE
 PARTIES HERETO AND THERETO RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF
 AND MAY NOT BE  CONTRADICTED BY EVIDENCE OF  PRIOR, CONTEMPORANEOUS OR  ORAL
 AGREEMENTS OF THE PARTIES.  THERE  ARE NO UNWRITTEN ORAL AGREEMENTS  BETWEEN
 THE PARTIES.   DEBTOR REPRESENTS THAT  IS HAS BEEN  REPRESENTED BY  SEPARATE
 LEGAL COUNSEL RELATING TO THE NEGOTIATION AND EXECUTION OF THIS NOTE AND THE
 PLEDGE AND SECURITY AGREEMENT.

 EXECUTED to be effective as of the day and year first written above.

 MAKER:                                  PAYEE:

 INTEGRATED PERFORMANCE SYSTEMS, INC.,
 a New York corporation

                                         _________________________
 By:_____________________________        BRAD JACOBY, Individually
 Its: ___________________________

 BEST CIRCUIT BOARDS, INC.
 a Texas corporation

 By:_____________________________
 Its: ___________________________

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