Document:

EXHIBIT 4.1

 ============================================================================

                              PURCHASE AGREEMENT

                                 by and among

                      HALLMARK FINANCIAL SERVICES, INC.

                                     and

            DONNELL CHILDREN REVOCABLE TRUST and CURTIS R. DONNELL

                        DATED AS OF DECEMBER 12, 2005

 ============================================================================

                This Agreement is subject to arbitration under
                the rules and regulations of JAMS as provided
                             in Article X hereof.

<PAGE>

                              TABLE OF CONTENTS

                                                                        Page
                                                                        ----
 ARTICLE I TERMS OF THE PURCHASE AND SALE.............................    1
    Section 1.1     Sale of Interest..................................    1
    Section 1.2     Purchase Price....................................    1
    Section 1.3     Payment of the Purchase Price.....................    2
    Section 1.4     Effective Date of Purchase and Sale...............    3

 ARTICLE II CLOSING...................................................    3
    Section 2.1     Closing...........................................    3
    Section 2.2     Deliveries by the Seller..........................    3
    Section 2.3     Deliveries by Purchaser...........................    4
    Section 2.4     Simultaneous Deliveries...........................    4

 ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER.................    5
    Section 3.1     Title to Interest.................................    5
    Section 3.2     Power and Authority...............................    5
    Section 3.3     Execution and Validity............................    5
    Section 3.4     No Conflict; Consents.............................    5
    Section 3.5     Company Organization; Good Standing; Delivery of
                    Charter Documents.................................    5
    Section 3.6     Corporate Power and Authority.....................    5
    Section 3.7     Capitalization....................................    5
    Section 3.8     No Undisclosed Liabilities........................    6
    Section 3.9     Sufficiency and Condition of and Title to the
                    Company Assets....................................    6
    Section 3.10    Real and Personal Property........................    6
    Section 3.11    Compliance with Laws..............................    7
    Section 3.12    Insurance.........................................    7
    Section 3.13    Contracts.........................................    7
    Section 3.14    Litigation; Orders................................    8
    Section 3.15    Permits...........................................    8
    Section 3.16    Intangible Assets.................................    8
    Section 3.17    Employees.........................................    8
    Section 3.18    Employee Benefits.................................    9
    Section 3.19    Taxes.............................................   10
    Section 3.20    Bank Accounts; Powers of Attorney.................   11
    Section 3.21    Affiliated Transactions...........................   11
    Section 3.22    Books and Records.................................   11
    Section 3.23    Full Disclosure...................................   11
    Section 3.24    Brokers...........................................   11
    Section 3.25    Absence of Sensitive Payment......................   12
    Section 3.26    Financial Statements..............................   12

 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER...............   12
    Section 4.1     Organization; Good Standing; Delivery of Charter
                    Documents.........................................   12
    Section 4.2     Power and Authority...............................   12
    Section 4.3     Authorization; Execution and Validity.............   12
    Section 4.4     No Conflict; Purchaser Consents...................   12
    Section 4.5     Full Disclosure...................................   13
    Section 4.6     Brokers...........................................   13

 ARTICLE V COVENANTS OF SELLER........................................   13
    Section 5.1     Cooperation of the Seller.........................   13
    Section 5.2     Pre-Closing Access to Information.................   13
    Section 5.3     Conduct of Business...............................   13
    Section 5.4     No Business Changes...............................   13
    Section 5.5     Supplements to Schedules..........................   14
    Section 5.6     Standstill........................................   14
    Section 5.7     Discharge of Encumbrances.........................   15
    Section 5.8     Non-Disclosure; Non-Competition; Non-Solicitation.   15

 ARTICLE VI COVENANTS OF PURCHASER....................................   17
    Section 6.1     Cooperation by Purchaser..........................   17
    Section 6.2     Confidentiality Agreement.........................   17

 ARTICLE VII MUTUAL COVENANTS.........................................   17
    Section 7.1     Fees and Expenses.................................   17
    Section 7.2     Governmental Consents.............................   18
    Section 7.3     Consents to Assign Leases and Contracts...........   18
    Section 7.4     Permits...........................................   18
    Section 7.5     Further Assurances................................   18
    Section 7.6     Supplemental Agreements and Consents..............   19
    Section 7.7     Tax Matters.......................................   19
    Section 7.8     Employee Benefit Plans; Employment................   19

 ARTICLE VIII CONDITIONS PRECEDENT TO CLOSING.........................   19
    Section 8.1     Conditions Precedent to Purchaser's Obligations...   19
    Section 8.2     Conditions Precedent to the Seller's Obligations..   20

 ARTICLE IX TERMINATION PRIOR TO CLOSING..............................   21
    Section 9.1     Termination of Agreement..........................   21
    Section 9.2     Procedure Upon Termination........................   21

 ARTICLE X indemnification and offset.................................   22
    Section 10.1    Indemnification by Seller.........................   22
    Section 10.2    Indemnification by Buyer..........................   22
    Section 10.3    Claims for Indemnification........................   22
    Section 10.4    Defense by Indemnifying Party.....................   22
    Section 10.5    Offset............................................   23

 ARTICLE XI ARBITRATION AND EQUITABLE REMEDIES........................   23
    Section 11.1    Settlement Meeting................................   23
    Section 11.2    Arbitration Proceedings...........................   23
    Section 11.3    Place of Arbitration..............................   24
    Section 11.4    Discovery.........................................   24
    Section 11.5    Equitable Remedies................................   24
    Section 11.6    Exclusive Jurisdiction............................   24
    Section 11.7    Judgments.........................................   24
    Section 11.8    Expenses..........................................   24
    Section 11.9    Cost of the Arbitration...........................   24
    Section 11.10   Exclusivity of Remedies...........................   25

 ARTICLE XII MISCELLANEOUS............................................   25
    Section 12.1    Amendment.........................................   25
    Section 12.2    Counterparts......................................   25
    Section 12.3    Entire Agreement..................................   25
    Section 12.4    Expenses..........................................   25
    Section 12.5    GOVERNING LAW.....................................   25
    Section 12.6    Consent to Service of Process.....................   25
    Section 12.7    No Assignment.....................................   25
    Section 12.8    No Third Party Beneficiaries......................   26
    Section 12.9    Notices...........................................   26
    Section 12.10   Public Announcements..............................   27
    Section 12.11   Representation by Legal Counsel...................   27
    Section 12.12   Schedules.........................................   27
    Section 12.13   Severability......................................   27
    Section 12.14   Specific Performance..............................   27
    Section 12.15   Successors........................................   27
    Section 12.16   Time of the Essence...............................   28
    Section 12.17   Waiver............................................   28

 SCHEDULES

      Schedule 1.4(a)   Primary Quota Share Reinsurance Agreements
      Schedule 3.5      Subsidiaries
      Schedule 3.8      Undisclosed Claims
      Schedule 3.9(d)   Transfers
      Schedule 3.10(b)  Leased Real Property
      Schedule 3.10(c)  Owned Personal Property
      Schedule 3.10(d)  Leased Personal Property
      Schedule 3.10(e)  Personal Property Owned by Others
      Schedule 3.12     Insurance
      Schedule 3.13     Contracts
      Schedule 3.14     Litigation
      Schedule 3.15     Permits
      Schedule 3.16(a)  Owned Intangible Assets
      Schedule 3.16(b)  Licensed Intangible Assets
      Schedule 3.17(a)  Employees
      Schedule 3.17(b)  Employee Contracts
      Schedule 3.18(a)  Identification of Company Plans and Exceptions
      Schedule 3.19(a)  Tax Return Exceptions
      Schedule 3.20     Bank Accounts; Powers of Attorney
      Schedule 3.21     Affiliated Transactions
      Schedule 3.26     Financial Statements
      Schedule 5.9(a)   Assets to Be Transferred
      Schedule 5.9(b)   Related Party Loans
      Schedule 7.3(b)   Pre-Closing; Required Consents
      Schedule 7.4(b)   Pre-Closing; Required Permits
      Schedule 7.8(a)   Assumed Plans

<PAGE>

                              PURCHASE AGREEMENT

      THIS PURCHASE AGREEMENT  (this "Agreement"), dated  as of December  12,
 2005 (the "Signing Date"), is made by and among Hallmark Financial Services,
 Inc., a  Nevada corporation  ("Purchaser"), and  Donnell Children  Revocable
 Trust ("Trust") and Curtis  R. Donnell, individually and  as trustee of  the
 Trust ("Donnell" and, collectively with the Trust, "Seller").

                            PRELIMINARY STATEMENTS

       A. The Trust  owns 100% of the  membership interest (the  "Interest"),
  of Aerospace Holdings, LLC, a Texas limited liability company  ("Aerospace"
  or, collectively with its Subsidiaries, the "Company").

       B. The  Interest is  comprised of  a 0.1%  Class A  voting  membership
  interest  in  Aerospace  and  a 99.9%  Class  B  non-voting  membership  in
  Aerospace and constitutes all the issued and outstanding equity  securities
  of Aerospace.

       C. Donnell is the sole grantor, trustee and beneficiary of the Trust.

       D. The Seller desires to sell, and the Purchaser desires to  purchase,
  all of  the Interest on the terms and  subject to the conditions set  forth
  in this Agreement.

       E. Capitalized terms used in this Agreement and rules of  construction
  are defined or indexed in Appendix A for the convenience of the reader  and
  in  order  to eliminate  the  need  for cross-references.    Appendix A  is
  incorporated herein by this reference.

                            STATEMENT OF AGREEMENT

      NOW, THEREFORE,  in  consideration  of  the  premises  and  the  mutual
 agreements, covenants,  representations and  warranties  set forth  in  this
 Agreement and for other good, valid  and binding consideration, the  receipt
 and sufficiency of which are hereby acknowledged, the Parties, intending  to
 be legally bound, hereby agree as follows:

                                  ARTICLE I
                                  ---------
                        TERMS OF THE PURCHASE AND SALE
                        ------------------------------

      Section 1.1   Sale of Interest.
                    -----------------
     Subject to  the  terms  and  conditions   and  in   reliance  upon   the
 representations and warranties set forth in  this Agreement, at the  Closing
 Seller shall sell and assign to Purchaser, and Purchaser shall purchase  and
 acquire from Seller, the  Interest free and clear  of all Encumbrances,  for
 the Purchase Price set forth in  Section 1.2 hereof. The Interest  purchased
 and acquired by Purchaser shall represent all of the issued and  outstanding
 equity securities of any kind, type or class of Aerospace.

      Section 1.2   Purchase Price.
                    ---------------
     The  total  consideration  for  the  purchase   of   the   Interest  and
 Seller's  compliance  with   the  restrictive covenants contained in Section
 5.8   (the  "Total  Purchase  Price")   shall  be  an  amount  equal  to  up
 to  $15,000,000.00,  consisting   of  an   unconditional   consideration  of
 $12,500,000.00  (the  "Base  Purchase  Price")  plus  additional  contingent
 consideration of up to $2,500,000.00  (the "Contingent Purchase Price"),  as
 provided in Section 1.4 hereof.

      Section 1.3   Payment of the Purchase Price.
                    ------------------------------
     The Base  Purchase  Price shall  be  payable to  the  Seller at Closing.
 The  Contingent Purchase Price,  if any, shall  be payable by  the Purchaser
 to the Seller on  or  before March 30, 2009;  provided,  however,  that  the
 Seller may defer payment of  a portion of the Contingent Purchase  Price  to
 March 30  of  any  subsequent  calendar  year  in  accordance  with  Section
 1.4(d).  Payment  of the  Base Purchase  Price and  the Contingent  Purchase
 Price, if  any,  shall  be by  Purchaser's  wire  transfers  of  immediately
 available funds to  the bank  account set  forth on  a notice  given to  the
 Purchaser by the Seller at  least three (3) business  days prior to the  due
 date of such payment.

      Section 1.4   Contingent Purchase Price.
                    --------------------------
     Payment of any Contingent Purchase Price is conditioned on the  Seller's
 compliance with  the  covenants contained  in  Section 5.8  hereof  and  the
 Company achieving the  following operational objectives  for the 2006,  2007
 and 2008 years: (i)  gross premium production, net  of cancellations, at  an
 average compound annual growth rate (the "Growth Factor") of at least  three
 percent; and  (ii) a  three  year accident  year  loss and  loss  adjustment
 expense ratio  ("3-Year  LLAE Ratio")  of  less than  60%.   If  Seller  has
 complied with  the  covenants  contained in  Section  5.8  hereof  and  both
 operational objectives have  been satisfied,  the amount  of the  Contingent
 Purchase Price shall be equal to the product of (x) $2,500,000.00, times (y)
 the quotient of the Growth Factor (up to, but not exceeding, five  percent),
 divided by five percent, times (z) the quotient of (I) 60% minus the greater
 of the 3-Year LLAE Ratio or 55%, divided by (II) five percent (5%).

      (a)  For purposes hereof, the  3-Year LLAE Ratio  shall be computed  as
 the ratio of the incurred losses and loss adjustment expenses for the  2006,
 2007 and 2008 accident years to the net premiums earned for the same period,
 all  in   accordance   with  statutory   insurance   accounting   principles
 consistently  applied  (including  an  appropriate  actuarial  reserve   for
 incurred but not reported claims).  The calculation of the 3-Year LLAE Ratio
 shall include only  the general aviation  business produced  by the  Company
 which  is  either  (i)  covered  by  the  primary  quota  share  reinsurance
 agreements identified  in  Schedule  1.4(a)  or  any  renewal  or  successor
 reinsurance agreements, or (ii) retained by the Purchaser.  The 3-Year  LLAE
 Ratio shall not apply  to business produced by  the Company under any  other
 excess insurance, co-insurance, surplus lines or other reinsurance agreement
 or facility.

      (b)  By way of illustration, if the Company's gross premium production,
 net of cancellations, for the 2005  calendar year was $32,000,000, in  order
 to achieve a Growth Factor of three percent the Company would be required to
 generate cumulative gross premiums, net  of cancellations, during the  2006,
 2007 and  2008  calendar  years of  at  least  $101,876,064,  calculated  as
 follows:

      [($32,000,000 x 1.03) + ($32,000,000 x 1.03 x 1.03) + ($32,000,000 x
                           1.03 x 1.03 x 1.03)]  =

         [$32,960,000 + $33,948,800 + $34,967,264] = $101,876,064

      (c)   By  way  of further  illustration, if the Company has  achieved a
 Growth Factor of four percent and a 3-Year LLAE Ratio of 59%, the Contingent
 Purchase Price due Seller would be $400,000, calculated as follows:

            $2,500,000 x (.04 / .05) x [(.60 - .59) / .05] = $400,000

      (d)   In  the event the  Company  has achieved the  Growth Factor,  the
 Purchaser shall deliver to the Seller on  or before March 1, 2009, a  notice
 describing in reasonable  detail the Purchaser's  calculation of the  3-Year
 LLAE Ratio (including the  actuarial reserve for  incurred but not  reported
 claims) and the proposed  amount of the Contingent  Purchase Price.  In  the
 event the Seller does not agree with the actuarial reserve for incurred  but
 not reported claims used  in the calculation of  the 3-Year LLAE Ratio,  the
 Seller may, by written notice delivered to the Purchaser on or before  March
 15, 2009,  elect to  currently receive  75% of  the proposed  amount of  the
 Contingent Purchase Price  set forth in  the notice from  the Purchaser  and
 defer the payment  of any additional  Contingent Purchase Price  for one  or
 more years to permit the continued  development of loss and loss  adjustment
 expense  for the  2006, 2007 and  2008 accident years.  In  such event,  the
 Purchaser shall deliver to  the Seller a  similar notice recalculating  both
 the 3-year LLAE Ratio and the Contingent Purchase Price on or before March 1
 of each successive year until such time as the Seller notifies the Purchaser
 in writing that the recalculated Contingent Purchase Price is acceptable  to
 the Seller.  Upon receipt  of  such acceptance notice  from the Seller,  the
 Purchaser shall within 15 calendar days pay to the Seller an amount equal to
 the  recalculated  Contingent  Purchase  Price  less  that  portion  of  the
 Contingent Purchase Price previously paid to the Seller.

      Section 1.5   Allocation of Purchase Price.
                    -----------------------------
     The  Base  Purchase  Price  shall  be  allocated  $11,875,000.00  to the
 purchase of the Interest and $625,000.00 to the Seller's compliance with the
 restrictive  covenants  contained  in  Section 5.8  hereof.   The Contingent
 Purchase  Price, if any, shall be allocated  entirely to the purchase of the
 Interest.  The Purchaser and the  Seller agree  that they shall not take any
 position  or  action  inconsistent with the foregoing allocation of the Base
 Purchase Price in the filing of any federal income tax returns.

      Section 1.6   Effective Date of Purchase and Sale.
                    ------------------------------------
     The Parties hereto  agree that the  effective date for  the sale of  the
 Interest shall be January 1, 2006 (the "Effective Date").

                                 ARTICLE II
                                 ----------
                                   CLOSING
                                   -------

      Section 2.1   Closing.
                    --------
     The consummation of the transactions contemplated by this Agreement (the
 "Closing") shall take  place at the  offices of the  Purchaser on the  first
 business day following the date on which all of the conditions set forth  in
 Article VIII, to the extent not waived, are satisfied, but in no event later
 than March 31, 2006.   The Closing  is contemplated to  occur on January  3,
 2006, but may be postponed  to such other date  as the Parties may  mutually
 agree.   The  date on  which  the  Closing actually  occurs  is  hereinafter
 referred to as the "Closing Date."

      Section 2.2   Deliveries by the Seller.
                    -------------------------
   At the Closing, the Seller shall deliver the following:

      (a) the closing  and  secretary's certificates  referred to  in Section
 8.1(e) and Section 8.1(f);

      (b) a  duly  executed  assignment of the Interest to the Purchaser,  in
 form and substance reasonably satisfactory to the Purchaser and its counsel;

      (c) a certificate dated within ten (10) business days prior the Closing
 Date from the  Secretary of  State or comparable  official of  the state  of
 incorporation or organization of Aerospace and each Subsidiary certifying as
 to the valid existence and good  standing in such jurisdiction of  Aerospace
 and each respective Subsidiary;

      (d) the recorded Charter Documents of Aerospace and each Subsidiary,
 recently certified by the Secretary of State of the State of Texas;

      (e) all Books and Records of the Company;

      (f) executed counterparts of all Required Consents and Required
 Permits;

      (g) a receipt for the payment of the Base Purchase Price;

      (h) each of the agreements referred to in Section 7.6 executed by the
 Seller;

      (i) a  written  opinion  of  counsel to  the  Seller  addressed  to the
 Purchaser confirming that  the representations and  warranties contained  in
 Section 3.1 through Section  3.7 hereof are true,  correct and complete  and
 that, to the best  of such counsel's  knowledge,  without investigation, the
 Seller's  other  representations  and  warranties  are  true,  correct   and
 complete,  which  opinion  shall  be   in  form  and  substance   reasonably
 satisfactory to the Purchaser and its counsel; and

      (j) all   other  previously  undelivered   documents,  instruments  and
 writings required to be delivered by the Seller to the Purchaser at or prior
 to the  Closing  pursuant  to  this  Agreement  and  such  other  documents,
 instruments and  certificates as  the Purchaser  may reasonably  request  in
 connection with the transactions contemplated by this Agreement.

      Section 2.3   Deliveries by Purchaser.
                    ------------------------
     At the Closing, the Purchaser shall  deliver, or cause to be  delivered,
 to the Seller the following:

      (a)  the Base Purchase Price;

      (b)  the  closing and secretary's  certificates referred to in Sections
 8.2(c) and 8.2(d);

      (c)  each  of the agreements referred  to in  Section 7.6  to which the
 Purchaser is a party, each executed on behalf of the Purchaser;

      (d)  all  other  previously  undelivered   documents,  instruments  and
 writings required to be delivered by the Purchaser to the Seller at or prior
 to the  Closing  pursuant  to  this  Agreement  and  such  other  documents,
 instruments and  certificates  as  the  Seller  may  reasonably  request  in
 connection with the transactions contemplated by this Agreement.

      Section 2.4   Simultaneous Deliveries.
                    ------------------------
     The delivery of the  documents required to be  delivered at the  Closing
 pursuant to this  Agreement shall  be deemed  to occur  simultaneously.   No
 delivery shall be effective until each Party has received, or waived receipt
 of, all the documents that this Agreement entitles such Party to receive.

                                 ARTICLE III
                                 -----------
                   REPRESENTATIONS AND WARRANTIES OF SELLER
                   ----------------------------------------

      The Seller jointly and severally hereby represents and warrants to  the
 Purchaser that the statements made in this Article III are true, correct and
 complete.

      Section 3.1   Title.
                    ------
     The Trust is the record owner and Donnell is the beneficial owner of the
 Interest, in each case free and clear of all Encumbrances.  Aerospace is the
 record and beneficial  owner of all  of the issued  and outstanding  capital
 stock, membership  interests  or other  equity  securities of  each  of  the
 Subsidiaries, in  each case  free and  clear of  all Encumbrances.   At  the
 Closing, the Seller will transfer to  the Purchaser the entire right,  title
 and interest in and to the Interest free and clear of all Encumbrances.

      Section 3.2   Power and Authority.
                    --------------------
     The Seller has the requisite power and authority to execute and  deliver
 this Agreement,  to  perform  the  Seller's  obligations  hereunder  and  to
 consummate the transactions  contemplated hereby,  including the  execution,
 delivery and performance of  all of the Transaction  Documents to which  the
 Seller is a party.

      Section 3.3   Execution and Validity.
                    -----------------------
     Each of  the Transaction  Documents, when  executed  by the  Seller  and
 delivered to  the Purchaser,  will constitute  a  valid, legal  and  binding
 obligation of the Seller, enforceable against the Seller in accordance  with
 the terms  of  such  Transaction Document,  subject  to  any  Law  Affecting
 Creditors' Rights.

      Section 3.4   No Conflict; Consents.
                    ----------------------
     The  execution,  delivery  and  performance   by  the  Seller  of   each
 Transaction Document will not  (a) violate any Law,  (b) violate any of  the
 Charter Documents of Aerospace or any  Subsidiary, (c) violate any Order  to
 which the Seller  or the  Company is a  party or  by which  the Seller,  the
 Company or  any of  their respective  assets are  bound, (d)  result in  the
 creation of any Encumbrance on the Interest, or (e) require any Consent from
 any Person that will not be obtained and delivered on or before the Closing.

      Section 3.5   Organization; Good Standing; Delivery of Charter
                    ------------------------------------------------
                    Documents.
                    ----------
     Aerospace  is  a  limited  liability  company  duly  organized,  validly
 existing and  in  good  standing under  the  laws  of the  State  of  Texas.
 Schedule 3.5 lists all of the Subsidiaries of the Company, their  respective
 forms of organization,  their respective jurisdictions  of incorporation  or
 organization  and  a  brief  description  of  their  respective  operations.
 Aerospace and each Subsidiary is duly  qualified and in good standing to  do
 business in each  jurisdiction in  which the  nature of  its business  makes
 qualification  necessary.   Prior  to  the  Signing  Date,  the  Seller  has
 delivered, or caused  to be delivered,  to the Purchaser  true and  complete
 copies of  the Charter  Documents of  Aerospace and  each Subsidiary  as  in
 effect on the Signing Date.

      Section 3.6   Power and Authority.
                    --------------------
     Aerospace and each Subsidiary has all the requisite power and  authority
 necessary to own, operate  and lease its respective  assets and to carry  on
 its respective business as and where conducted.

      Section 3.7   Capitalization.
                    ---------------
     The Interest  constitutes the  only  issued and  outstanding  membership
 interests or other equity securities of any kind of Aerospace.  The Interest
 has  been  duly  authorized  and  validly  issued  and  is  fully  paid  and
 nonassessable.  There is no authorized or outstanding option,  subscription,
 warrant, call,  preemptive right,  commitment or  other right  or  agreement
 obligating  Aerospace  or  any  Subsidiary  to  issue  or  sell  any  equity
 securities or any securities convertible into or exercisable for any  equity
 securities of Aerospace  or any Subsidiary.   Neither the  Interest nor  any
 capital  stock,  membership  interest  or  other  equity  security  of   any
 Subsidiary has  been issued  or transferred,  and  will not  be  transferred
 pursuant to this Agreement, in violation  of any preemptive or  preferential
 rights or rights of first refusal  of any Person.  Except for  Subsidiaries,
 the Company does not own any shares of capital stock, membership  interests,
 partnership interests or other beneficial ownership interests of any kind in
 any other Person.

      Section 3.8   No Undisclosed Claims.
                    ----------------------
     Except as set forth in Schedule 3.8,  the Company is not subject to  any
 Claim of any nature, absolute or contingent, and no events have occurred  or
 circumstances exist that  could give rise  to any future  Claim, that  could
 have a Material Adverse Effect on the assets or business of the Company.

      Section 3.9   Sufficiency and Condition of and Title to the Company
                    -----------------------------------------------------
                    Assets.
                    -------
      (a)  Sufficiency of the  Company Assets.   The assets  reflected on the
 Books and  Records  of  the Company  (collectively,  the  "Company  Assets")
 constitute all the assets, properties, licenses and other arrangements which
 are presently being used  or are reasonably related  to the business of  the
 Company, and are sufficient to operate such business in a manner  consistent
 with past practice and historic capacity.

      (b)  Condition  of  the Company  Assets.  Each of  the  Company  Assets
 complies with Law and is in good and normal operating condition and  repair,
 structurally sound with no known defects (ordinary wear and tear  excepted),
 and suitable for its intended use.

      (c)  Title to the Company Assets. At the Closing, the Company will hold
 good, valid and  indefeasible title to,  or a valid  leasehold interest  in,
 each of the Company Assets, free  and clear of all Encumbrances, other  than
 Permitted Encumbrances.

      (d)  No  Transfers.  Except as set forth in Schedule 3.9(d), during the
 six month period preceding the Signing Date, the Company has not transferred
 any Company Assets to the Seller or any affiliate of the Seller, nor has the
 Company made any distribution of cash to the Seller or any affiliate of  the
 Seller, except for salaries and expense reimbursement in the ordinary course
 of business.

      Section 3.10  Real and Personal Property.
                    ---------------------------
      (a)  Owned Real Property. The Company does not own any interest in real
 property.

      (b)  Leased Real Property.  Schedule 3.10(b) lists,  as of the  Signing
 Date, all leases of real property (collectively, the "Real Property Leases")
 to which the Company is a  party.  As of the Signing  Date, all of the  Real
 Property Leases are valid,  binding and in full  force and effect.   Neither
 the Company nor, to the Seller's  Knowledge, any other Person is in  default
 under  any  of  the  Real  Property  Leases,  nor  is  there  any  event  or
 circumstance which with notice or lapse of time, or both, would constitute a
 default thereunder by the Company or any other Person.

      (c)  Owned Personal Property. Schedule 3.10(c) lists, as of the Signing
 Date, all of  the depreciable  personal property  (including all  machinery,
 equipment, vehicles,  structures,  fixtures  and  furniture)  owned  by  the
 Company and used in the business of the Company or located on its premises.

      (d)  Leased Personal Property.   Schedule  3.10(d)  lists,  as  of  the
 Signing Date, all leases of  personal property (collectively, the  "Personal
 Property Leases") to which the Company is a party.  As of the Signing  Date,
 all of the Personal Property Leases are valid, binding and in full force and
 effect.   Neither the  Company nor,  to the  Seller's Knowledge,  any  other
 Person is in default under any of the Personal Property Leases, nor is there
 any event or circumstance which with notice or lapse of time, or both, would
 constitute a default thereunder by the Company or any other Person.

      (e)  Personal Property Owned by Others.   Schedule 3.10(e) lists, as of
 the Signing  Date,  all artwork,  memorabilia  and other  personal  property
 routinely located on the premises of the  Company which is not owned by  the
 Company, together  with  the  name(s)  of  the  owner(s)  of  such  personal
 property.

      Section 3.11  Compliance with Laws.
                    ---------------------
      The Company has complied with all Laws in the conduct of its  business.
 The Company has not received any  notice from any Governmental Authority  or
 other Person asserting  that the Company  has violated any  Law.  No  events
 have occurred  or, to  Seller's Knowledge,  circumstances exist  that  could
 cause the Company to violate any Law in the future.

      Section 3.12  Insurance.
                    ----------
     Schedule 3.12  lists, as  of the  Signing Date,  all insurance  policies
 which insure the business of the Company or any of the assets of the Company
 against  loss  (collectively,  the  "Insurance  Policies"),  including  each
 insurer's name, coverage deductible and  limit, expiration date and  current
 premium.  Each Insurance  Policy is in full  force and effect, all  premiums
 with respect thereto  have been paid  to the extent  due, and  no notice  of
 cancellation or  termination has  been received  with  respect to  any  such
 policy, other than any  policy that will  be replaced or  is intended to  be
 replaced prior to the expiration thereof by policies providing substantially
 the same coverage from an insurer  that is financially sound and  reputable.
 The  Insurance  Policies  provide  the  Company  with  reasonably   adequate
 insurance coverage against the risks involved in the conduct of the business
 of the Company and  ownership of the  assets of the  Company.  The  coverage
 provided by the Insurance Policies  will not in any  way be affected by,  or
 terminate or  lapse  by reason  of,  the consummation  of  the  transactions
 contemplated by this Agreement.  True  and complete copies of all  Insurance
 Policies have been provided to the Purchaser.

      Section 3.13  Contracts.
                    ----------
     Schedule 3.13 lists, as of the  Signing Date, all contracts relating  to
 the business and assets of the Company or by which any of the assets of  the
 Company is bound,  pursuant to which  the obligations of  any party  thereto
 are, or are contemplated  to be, with  respect to any  such contract (a)  in
 excess of $10,000 during  any twelve month period  during the term  thereof,
 (b) not terminable prior to 90 days after the Signing Date, or (c) otherwise
 material to the business  of the Company.   All of  the contracts listed  on
 Schedule 3.13  and any  contracts entered  into after  the Signing  Date  in
 accordance with Section 5.3 (collectively, the "Material Contracts") are  or
 will be valid  and  binding and in full force  and effect,  subject to  Laws
 Affecting Creditors'  Rights.  Neither the  Company  nor,  to  the  Seller's
 Knowledge, any other Person is in  default under any Material Contract,  nor
 is there any event or  circumstance which with notice  or lapse of time,  or
 both, would constitute  a default  thereunder by  the Company  or any  other
 Person.  The Company is not a party  to any contract which (x) requires  the
 Consent of any Person in order  to consummate the transactions  contemplated
 by this  Agreement, except  as otherwise  stated  on Schedule 3.13,  (y)  is
 materially in excess of the normal,  ordinary and usual requirements of  the
 business of  the  Company,  or  (z) is  materially  excessive  in  price  or
 quantity.  True and complete copies of all the Material Contracts have  been
 provided to Purchaser.

      Section 3.14  Litigation; Orders.
                    -------------------
     Except as set forth in Schedule  3.14, there are no Actions pending,  or
 to the Seller's Knowledge, threatened against or affecting the  Company, its
 business or any of its assets  as of the Signing Date.  The Company  is  not
 subject to any Order.

      Section 3.15  Permits.
                    --------
     Schedule 3.15 lists  all of  the Permits related  to the  assets of  the
 Company or operation  of the business  of the Company,  and indicates  those
 Permits for  which the  Consent of  any Person  is required  to assign  such
 Permit.  The Company  has obtained, maintains in  effect, and complies  with
 the terms and conditions of all Permits required by Law.  There is no Action
 pending or, to the  Seller's Knowledge, threatened in  writing to revoke  or
 limit any  Permit listed  on Schedule  3.15.   The Company  has all  Permits
 necessary for the business of the Company as presently conducted.

      Section 3.16  Intangible Assets.
                    ------------------
      (a)   Owned Intangible Assets.   Schedule  3.16(a)  lists  all  of  the
 Intangible Assets owned by the Company as of the Signing Date.  With respect
 to the  Intangible  Assets  listed  on  Schedule  3.16(a)  and  all  of  the
 Intangible Assets  obtained  or developed  prior  to the  Closing,  (i)  the
 Company owns all right, title and interest in and to such Intangible  Assets
 free and  clear  of  all  Encumbrances,  (ii)  the  Company  has  not  sold,
 transferred, licensed, sublicensed or conveyed any  interest in any of  such
 Intangible Assets, and (iii) to Seller's Knowledge, no Person has  infringed
 upon or misappropriated any of such Intangible Assets.

      (b)  Licensed Intangible Assets.   Schedule 3.16(b)  lists all licenses
 and contracts related to any Intangible Asset used by the Company as of  the
 Signing Date.  Each license or contract listed on Schedule 3.16(b) and  each
 license or contract  related to an  Intangible Asset which  is entered  into
 after  the  Signing Date  in  accordance with Section 5.3 is valid,  binding
 and  in full force  and  effect.  The  Company  has  not  infringed upon  or
 misappropriated any Intangible Asset owned by another Person.

      Section 3.17  Employees.
                    ----------
      (a)  Employees.   Schedule 3.17(a) lists the  name, job  title, date of
 employment and current annual compensation (salary, bonus and  participation
 in any  non-qualified deferred  or incentive  compensation arrangement)  for
 each individual directly  or indirectly employed  by the Company  as of  the
 Signing Date  (collectively, the  "Employees").   All Employees  are  either
 United States citizens or  otherwise authorized to  engage in employment  in
 the United States in accordance  with all Laws.   All sums due for  Employee
 compensation and  benefits  and all  vacation  time owing  to  any  Employee
 (including all persons whose employment by  the Company is terminated  prior
 to the Signing Date) have been duly and adequately accrued on the accounting
 Books and Records of the Company.

      (b)  Contracts. Except as set forth in Schedule 3.17(b), the Company is
 not a party to (i)  any contract for employment  between the Company and  an
 Employee of the Company that cannot  be terminated at will without cost,  or
 (ii) any collective bargaining  agreement or other  contract with any  labor
 union, Employee representative or group of  Employees.  Except as set  forth
 in Schedule 3.17(b), the Company's employment of all Employees is terminable
 at will without any penalty or severance obligation of any kind on the  part
 of the Company.

      (c)  Compliance  with  Labor  Laws.  The Company has  complied  and  is
 presently complying  with  all  Laws respecting  employment  and  employment
 practices, terms and conditions of employment,  and wages and hours, and  is
 not engaged in any unfair labor practice or unlawful employment practice.

      Section 3.18  Employee Benefits.
                    ------------------
      (a)  Identification  of  Company Plans.   Schedule 3.18(a) sets forth a
 list of all Employee Benefit Plans which provide compensation or benefits to
 Employees, officers, directors or consultants of the Company  (collectively,
 the "Company Plans").  Seller has  delivered to Purchaser true and  complete
 copies of: (i) each of the Company Plans and any related funding  agreements
 thereto (including  insurance contracts)  including all  amendments, all  of
 which are legally valid and binding and in full force and effect, and  there
 are no  defaults  thereunder,  (ii) the  currently  effective  Summary  Plan
 Description pertaining to each  of the Company Plans,  (iii) the three  most
 recent annual reports for  each of the Company  Plans, (iv) the most  recent
 IRS determination  letter  for  each  Company  Plan  which  is  intended  to
 constitute a qualified plan under Section 401 of the Code, and (v) financial
 statements for each funded Company Plan.   Notwithstanding any statement  or
 indication in  this  Agreement  to the  contrary,  except  as  disclosed  on
 Schedule 3.18(a), there are no Company Plans which the Company or  Purchaser
 will not be able to terminate (or in which  the Company will not be able  to
 terminate the participation of its employees) immediately after the  Closing
 in accordance with their terms and ERISA, and without incurring any expenses
 (including, but not limited  to, loads or  termination charges imposed  with
 respect to insurance  policies or  mutual funds  used to  fund such  Company
 Plans),  other  than  administrative   expenses  in  connection  with   such
 termination and benefits accrued as of the date of termination.

      (b)  Compliance with Applicable Laws. All Company Plans comply with and
 are and  have been  operated in  material  compliance with  each  applicable
 provision of ERISA, the Code, other federal statutes, state Law  (including,
 without limitation,  state  insurance Law)  and  the regulations  and  rules
 promulgated  pursuant  thereto  or  in connection  therewith.   Neither  the
 Company nor any  member of the  same controlled group  of businesses as  the
 Company within  the  meaning of  Section  4001(a)(14) of  ERISA  (an  "ERISA
 Affiliate") has failed  to make  any material  contributions or  to pay  any
 material amounts due and owing as required by the terms of any Company Plan.
 Other than routine claims for benefits under the Company Plans, there are no
 pending or, to Seller's  Knowledge, threatened investigations,  proceedings,
 claims, lawsuits, disputes, actions,  audits or controversies involving  the
 Company Plans or the fiduciaries, administrators, or trustees of any of  the
 Company Plans or any  ERISA Affiliate as the  employer or sponsor under  any
 Company Plan, with  any of  the IRS, the  Department of  Labor, the  Pension
 Benefit Guaranty  Corporation,  any participant  in  or beneficiary  of  any
 Company Plan or any other Person  whomsoever.  To Seller's Knowledge,  there
 is no  reasonable basis  for any  such claim,  lawsuit, dispute,  action  or
 controversy.

      (c)  Pension Benefit Plans. Neither the Company nor any ERISA Affiliate
 is or ever has been a sponsor or obligated to contribute to any plan covered
 by Title IV  of ERISA  or Section  412 of  the Code,  or any  "multiemployer
 plan," within the meaning of  Section 3(37) of ERISA.   Each of the  Company
 Plans which is intended to be a  qualified plan under Section 401(a) of  the
 Code has received  a favorable determination  letter from the  IRS, and  has
 been operated  substantially  in accordance  with  its terms  and  with  the
 provisions of the Code.

      (d)  Welfare  Benefit Plans.   Each Company Plan  which is  required to
 comply with the provisions  of Part 6 of  Title I of  ERISA, Section 601  et
 seq., and Code  Section 4980B and  the provisions of  Part 7 of  Title I  of
 ERISA, Section  701 et  seq., and  Code Section  4980D has  complied in  all
 material respects.   Except as  required by such  Sections of  the Code,  no
 Company Plan  which  is  a  Welfare Benefit  Plan  provides  for  any  post-
 employment benefits.

      (e)  Effect of Consummation.   The  consummation  of  the  transactions
 contemplated by this Agreement  will not (i) entitle  any current or  former
 employee of the Company or any  other individual to a bonus, severance  pay,
 unemployment compensation or similar payment by the Company, (ii)  otherwise
 accelerate the time  of payment or  vesting, or increase  the amount of  any
 compensation due to  any current or  former employee of  the Company,  (iii)
 result in any prohibited  transaction described in Section  406 of ERISA  or
 Section 4975 of the Code for which an exemption is not available, or (iv) in
 any way result in any liability of the Company with respect to any  Employee
 Benefit Plan of any Person.   The Company is not a  party or subject to  any
 agreement, contract or other  obligation which would  require the making  of
 any payment,  other than  payments contemplated  by this  Agreement, to  any
 employee of the Company, the Seller or any  other Person as a result of  the
 consummation of the transactions contemplated herein.

      Section 3.19  Taxes.
                    ------
      (a)  Tax Returns. All Tax returns (including amended returns and claims
 for refund),  reports,  and  declarations of  estimated  Tax  (collectively,
 "Returns") which  were  required  to  be  filed  by  the  Company  with  any
 Governmental Authority  have been  timely filed.   Except  as set  forth  in
 Schedule 3.19(a), all Returns  are true and  correct and accurately  reflect
 the Tax liabilities of the Company.  All  Taxes shown to be due pursuant  to
 such Returns  have  been paid  in  full. Except  as  set forth  in  Schedule
 3.19(a), there are no unpaid Taxes  that are or could  become a lien on  the
 property or assets of the Company or require payment by the Company,  except
 for current Taxes not yet due and payable. All current Taxes not yet due and
 payable by the Company  have been properly accrued  on the balance sheet  of
 the Company.  Except as set forth  in Schedule 3.19(a), the Company has  not
 incurred any liability  for penalties,  assessments, or  interest under  the
 Code.  No  unexpired waiver executed  by or on  behalf of  the Company  with
 respect to any Taxes is in effect.

      (b)  Statute  of  Limitations and Tax  Actions.  The  Company  has  not
 executed any  presently effective  waiver or  extension  of any  statute  of
 limitations against  assessments and  collection of  Taxes.   There  are  no
 pending or,  to  the  Seller's Knowledge,  threatened  Claims,  assessments,
 notices, proposals to assess, deficiencies or audits with respect to Taxes.

      (c)  Miscellaneous Tax Representations.   Proper and  accurate  amounts
 have been withheld and remitted by the Company from and with respect to  all
 Persons from  whom it  is required  by applicable  law  to  withhold for all
 periods in compliance with the tax withholding provisions  of all Laws.  The
 Company is not a party to any tax sharing agreement.  There is no  contract,
 plan or arrangement covering any Person that, individually or  collectively,
 would give rise to the payment of any amount that would not be deductible by
 the Company  by reason of Section  162(m) or Section 280G  of the Code.  The
 Company is not a "foreign person"  within the meaning of Section  1445(f)(3)
 of the Code.  Neither Aerospace nor any Subsidiary has ever been a member of
 any group other than  the Company that filed  a consolidated federal  income
 tax return.

      Section 3.20  Bank Accounts; Powers of Attorney.
                    ----------------------------------
     Schedule 3.20 lists the names of (a) each bank, trust company and  stock
 or other broker with which the Company  has an account, credit line or  safe
 deposit  box  or  vault,  or   otherwise  maintains  relations  (the   "Bank
 Accounts"), (b) all  Persons authorized to  draw on, or  to have access  to,
 each of the Bank Accounts, and (c) all Persons authorized by proxies, powers
 of attorney or other like instruments to act on behalf of the Company in any
 matter concerning the business  of the Company.   Each of the Bank  Accounts
 has a positive cash balance.  No  proxies, powers of attorney or other  like
 instruments are irrevocable.

      Section 3.21  Affiliated Transactions.
                    ------------------------
     Except as set forth on Schedule 3.21, there are no outstanding loans  or
 other transactions between  the Company and  any Seller, officer,  director,
 shareholder, consultant or affiliate of the  Company or any spouse or  child
 of any such person.  No  Seller, officer, director, shareholder,  consultant
 or affiliate of the Company nor any spouse or child of any such person  owns
 or has  any  interest in,  directly  or  indirectly, any  real  or  personal
 property owned by or leased to the Company.

      Section 3.22  Books and Records.
                    ------------------
     The Books  and Records  of the  Company,  all of  which have  been  made
 available to Purchaser  prior to  the Signing  Date, are  true, correct  and
 complete  and  have  been  maintained  in  accordance  with  sound  business
 practices, including  the  maintenance of  an  adequate system  of  internal
 controls.

      Section 3.23  Full Disclosure.
                    ----------------
     No representation or warranty of the Seller made in this Agreement,  nor
 any  written  statement  furnished  to  Purchaser  pursuant  hereto  or   in
 connection with  the  transactions  contemplated hereby,  contains  or  will
 contain any untrue statement of a  material fact which affects the  business
 or financial condition  of the Company,  or omits or  will omit  to state  a
 material fact necessary to make the statements or facts contained herein  or
 therein not misleading.

      Section 3.24  Brokers.
                    --------
     No person  is  or will  become  entitled  to receive  any  brokerage  or
 finder's fee, advisory  fee or other  similar payment  for the  transactions
 contemplated by this Agreement by virtue of having been engaged by or  acted
 on  behalf of  the Seller  or the  Company.  Seller agree  to indemnify  and
 defend the Purchaser and  to hold Purchaser harmless  from any claim by  any
 individual or entity asserting a broker  or agency relationship relative  to
 this Transaction.

      Section 3.25  Absence of Sensitive Payment.
                    -----------------------------
     The Company has not made or  maintained (i) any contributions,  payments
 or gifts of its funds or property to any governmental official, employee  or
 agent where either the payment or the purpose of such contribution,  payment
 or gift was or is illegal under the laws  of the United States or any  state
 thereof, or  any  other jurisdiction  (foreign  or domestic);  or  (ii)  any
 contribution, or reimbursement of any political gift or contribution made by
 any other person, to candidates for  public office, whether federal,  state,
 local or foreign, where such contributions by the Company were or would be a
 violation of applicable law.

      Section 3.26  Financial Statements.
                    ---------------------
     The Seller  has  delivered to  the  Purchaser copies  of  the  financial
 statements of  the Company  described on  Schedule 3.26  (collectively,  the
 "Financial  Statements").   Except  as  set  forth  in  Schedule  3.26,  the
 Financial Statements have been prepared in accordance with GAAP applied on a
 consistent basis and fairly present the financial position of the Company as
 of their respective dates  and the results of  operations and cash flows  of
 the Company for the  respective periods covered  thereby in accordance  with
 GAAP (subject,  in the  case of  interim  statements, to  normal,  recurring
 adjustments, consistently applied,  none of  which, individually  or in  the
 aggregate, is material).  Except as set forth in Schedule 3.26, the  Company
 does not have  any material liability  or obligation of  any kind or  nature
 (fixed or contingent) which is not reflected, reserved against or  disclosed
 in the Financial Statements and accompanying footnotes.

                                 ARTICLE IV
                                 ----------
                 REPRESENTATIONS AND WARRANTIES OF PURCHASER
                 -------------------------------------------

      The Purchaser hereby  represents and warrants  to the  Seller that  the
 statements set forth in this Article IV are correct and complete.

      Section 4.1   Organization; Good Standing; Delivery of Charter
                    ------------------------------------------------
                    Documents.
                    ----------
     The Purchaser is a corporation duly  organized, validly existing and  in
 good standing under  the laws of  the State of  Nevada.   Purchaser is  duly
 qualified as a foreign corporation in the State of Texas.

      Section 4.2   Power and Authority.
                    --------------------
     The Purchaser has all requisite corporate power and authority  necessary
 to execute and deliver this Agreement, to perform its obligations  hereunder
 and to  consummate  the  transactions  contemplated  hereby,  including  the
 execution, delivery and performance of all  of the Transaction Documents  to
 which the Purchaser is a party.

      Section 4.3   Authorization; Execution and Validity.
                    --------------------------------------
     Each of the Transaction  Documents, when executed  and delivered by  the
 Purchaser, will  be  duly  authorized,  executed  and  delivered,  and  will
 constitute  a  valid,  legal  and  binding  obligation  of  the   Purchaser,
 enforceable against  the Purchaser  in accordance  with  the terms  of  such
 Transaction Document, subject to any Law Affecting Creditors' Rights.

      Section 4.4   No Conflict; Purchaser Consents.
                    --------------------------------
     The execution,  delivery  and  performance  by  the  Purchaser  of  each
 Transaction Document to which it  is a party will  not (a) violate any  Law,
 (b) violate any Charter Document of the Purchaser, (c) violate any Order  to
 which the Purchaser is a party  or by which the  Purchaser or its assets  is
 bound, or (d) require any Consent from any Person.

      Section 4.5   Full Disclosure.
                    ----------------
     No representation or warranty of the  Purchaser made in this  Agreement,
 nor any written  statement furnished  to the  Seller pursuant  hereto or  in
 connection with  the  transactions  contemplated hereby,  contains  or  will
 contain any untrue statement of a  material fact which affects the  business
 or financial condition of the  Purchaser, or omits or  will omit to state  a
 material fact necessary to make the statements or facts contained herein  or
 therein not misleading.

      Section 4.6   Brokers.
                    --------
     No Person  is  or will  become  entitled  to receive  any  brokerage  or
 finder's fee, advisory  fee or other  similar payment  for the  transactions
 contemplated by this Agreement by virtue of having been engaged by or  acted
 on behalf of  the Purchaser. The  Purchaser agrees to  indemnify and  defend
 Seller and  to hold  Seller harmless  from any  claim by  any individual  or
 entity asserting a broker or agency relationship with Purchaser relating  to
 this Transaction.

                                  ARTICLE V
                                  ---------
                             COVENANTS OF SELLER
                             -------------------

      Section 5.1   Cooperation of the Seller.
                    --------------------------
     From the Signing Date through the Closing Date, the Seller shall use all
 reasonable efforts (a) to take all actions and to do all things necessary or
 advisable to consummate the transactions contemplated by this Agreement, (b)
 to cooperate  with Purchaser  in connection  with the  foregoing,  including
 using reasonable  efforts  to  obtain all  Required  Consents  and  Required
 Permits, and  (c)  subject  to  the  other  terms  and  conditions  of  this
 Agreement, to  cause  all the  conditions  set  forth in  Section  8.1,  the
 satisfaction of which  is in the  reasonable control of  such Seller, to  be
 satisfied on or prior to Closing.

      Section 5.2   Pre-Closing Access to Information.
                    ----------------------------------
     From the Signing Date through the Closing Date, the Seller shall  afford
 to the Purchaser and its Representatives access to the properties, employees
 and Books and Records of the Company.

      Section 5.3   Conduct of Business.
                    --------------------
     From the Signing Date  through the Closing Date,  the Seller shall,  and
 shall cause  the Company  to, use  all reasonable  efforts to  (i)  preserve
 substantially the  relationships  with its  Representatives,  suppliers  and
 customers, (ii)  perform its  obligations under  all contracts,  leases  and
 Permits in all material  respects, (iii) comply with  all Laws, (iv)  confer
 with the Purchaser regarding operational matters  of a material nature,  (v)
 report periodically to the  Purchaser regarding the  status of its  business
 and the results  of its  operations, and (vi)  conduct its  business in  the
 ordinary course and consistent with past practices.

      Section 5.4   No Business Changes.
                    --------------------
     From  the Signing Date  through  the  Closing  Date,  the  Seller  shall
 not,  and  shall  cause  the  Company  not  to, without the express  written
 consent of the Purchaser:  (i) enter into any material agreement relating to
 the assets,  properties  or business  of  the  Company, other  than  in  the
 ordinary course of business; (ii) incur or discharge any material obligation
 or liability, except  in the ordinary  course of  business; (iii) commit  to
 make or make  any capital  expenditures; (iv) cancel  or fail  to renew  any
 Permit; (v) impose any lien, pledge or encumbrance upon the Interest or  any
 of the assets of the Company; (vi) make  any change or authorize to be  made
 any change to the  Charter Documents of Aerospace  or any Subsidiary;  (vii)
 declare, set  aside, or  pay  any dividend  or  make any  distribution  with
 respect to the Interest (whether in cash or in kind) or redeem, purchase, or
 otherwise acquire any  of the Interest;  (viii) issue, deliver  or sell  any
 membership interests, capital stock or other  equity securities of any  kind
 of Aerospace or any Subsidiary, or split, combine or reclassify the Interest
 with, into or as any other type of membership interest or equity security of
 any kind; (ix) incur  any indebtedness  for borrowed  money; (x) forgive  or
 cancel any indebtedness owing to the  Company or waive any claims or  rights
 of value belonging to  the Company, (xi) sell,  lease, license or  otherwise
 dispose of any of the assets or properties of the Company, other than in the
 ordinary course of  business; (xii) pay  or increase  the rate  or terms  of
 compensation or  benefits payable  to or  to become  payable to  any of  the
 directors, officers, employees, consultants or  agents of the Company  above
 the amounts reflected in  Schedule 3.17(a); (xiii)  amend or otherwise  make
 any changes to any of the Company Plans or increase the rate or terms of any
 benefits payable under the Company Plans; (xiv) make any other change in the
 terms of employment  of any Employee;  (xv) make or  rescind any express  or
 deemed election relating  to any Tax,  other than as  reflected in  Schedule
 3.19(a); or (xvi) commit pursuant to  a legally binding agreement to do  any
 of the foregoing.

      Section 5.5   Supplements to Schedules.
                    -------------------------
      If,  between  the  Signing  Date  and  the  Closing  Date,  the  Seller
 becomes  aware  that  any  of  its  representations  and  warranties in this
 Agreement or the schedules to this Agreement was  inaccurate when made or if
 during such period any  event occurs or condition changes that causes any of
 such representations and warranties to be inaccurate,  then the Seller shall
 notify the Purchaser thereof in writing and supplement the schedules  hereto
 to account for any such inaccuracy, event or change.  Any such supplement to
 the schedules shall not be deemed to  have been disclosed as of the  Signing
 Date, or to have cured any breach  of a representation and warranty made  in
 this Agreement, unless so agreed in writing by the Purchaser.

      Section 5.6   Standstill.
                    -----------
     Until the earlier  to occur of  the Closing or  the termination of  this
 Agreement pursuant to Article IX, the Seller shall not, nor shall the Seller
 permit the  Company  or any  of  its  Representatives to,  (a)  directly  or
 indirectly encourage,  solicit, initiate  or participate  in discussions  or
 negotiations with, or provide any information  or assistance to, any  Person
 (other than Purchaser and its  Representatives) concerning any merger,  sale
 of securities, sale of substantial  assets, investment proposals or  similar
 transaction involving the Company, (b) entertain or discuss any  acquisition
 or investment proposals whatsoever with respect  to the Company, (c)  except
 as required  by law  after not  less  than five  days notice  to  Purchaser,
 disclose to any  third party  any non-published  information concerning  the
 Company, the business of the Company  or the Company's financial  condition,
 or (d) withdraw the  Seller's intention to sell  the Interest to  Purchaser.
 The Seller  shall, and  shall  cause the  Company  to, promptly  notify  the
 Purchaser if  it receives  any such  proposal  or offer  or any  inquiry  or
 contact with respect thereto and provide the Purchaser a copy of any written
 communication with respect  thereto.  Until  termination of this  Agreement,
 the Seller will  not, directly or  indirectly, (i)  sell, transfer,  pledge,
 encumber, assign or otherwise dispose of, or enter into any contract, option
 or other arrangement or  understanding with respect  to the sale,  transfer,
 pledge,  encumbrance,  assignment  or  other  disposition  of,  any  of  the
 Interest, or (ii)  grant any  proxies, deposit any  of the  Interest into  a
 voting trust or enter into a voting agreement with respect to the Interest.

      Section 5.7   Discharge of Encumbrances.
                    --------------------------
     The Company and  the Seller  shall take all  actions and  do all  things
 necessary to cause all Encumbrances,  other than Permitted Encumbrances,  on
 any of  the Interest  or the  assets  of the  Company  to be  terminated  or
 otherwise discharged at or prior to the Closing.

      Section 5.8   Non-Disclosure; Non-Competition; Non-Solicitation.
                    --------------------------------------------------
      (a)    Non-Disclosure   Agreement.    Donnell   acknowledges  that  the
 Confidential Information obtained or possessed by  him will be the  property
 of  the  Purchaser  and  the  Company  from  and  after  the  Closing  Date.
 Therefore, Donnell  agrees that  he will  not  (i) disclose to  any  person,
 either directly  or indirectly,  any  Confidential Information,  unless  and
 solely to the extent  that such Confidential Information  is required to  be
 disclosed by law or pursuant to  a final judicial order or decree,  (ii) use
 for his own account  or cause, facilitate  or allow any  third party to  use
 Confidential Information  in  any  way,  or  (iii) remove  any  Confidential
 Information or  any  copy,  summary  or  compilation  of  any  kind  of  any
 Confidential Information from the premises of the Company or the premises of
 the Company's customers following the Closing Date.  Donnell further  agrees
 to deliver to Purchaser  all memoranda, notes,  plans, records, reports  and
 other documents (and copies thereof) relating to the Company or the  conduct
 of the Company's business that he may  possess or have under his control  at
 the Closing Date.

      (b)  Work Product. All records and documents embodying any Confidential
 Information or  pertaining to  the existing  or  contemplated scope  of  the
 Company's business  which  have been  conceived,  prepared or  developed  by
 Donnell in connection with his beneficial ownership interest in the Company,
 his employment by  the Company  or otherwise,  either alone  or with  others
 (herein called "Work Product"), shall be  the sole property of the  Company.
 At or prior to the Closing Date,  Donnell shall deliver all Work Product  to
 the Company.

      (c)  Non-Competition  Agreement.  For  a period of five (5) years after
 the Closing, Donnell will not, directly  or indirectly, without the  express
 written consent of the Purchaser, (i) own, engage in, manage, operate, join,
 control, or participate in the ownership, management, operation, or  control
 of, or be connected  as a stockholder,  director, officer, employee,  agent,
 partner, joint venturer,  member, trustee, beneficiary,  or otherwise  with,
 any  "Competing  Business"  (defined  below)  anywhere  in  the  "Restricted
 Territory" (defined  below);  (ii) induce any  customer  of the  Company  to
 patronize any  Competing Business;  (iii) solicit  or accept  any  Competing
 Business from  any  customer of  the  Company; (iv) request  or  advise  any
 customer of  the Company  to withdraw,  curtail  or cancel  such  customer's
 business with the  Company; or  (v) disclose to  any Person  engaged in  any
 Competing Business the  names or addresses  of any of  the customers of  the
 Company.  For purposes of this  Agreement, the term "Competing Business"  is
 defined to mean  any activity or  business that is  or would be  competitive
 with the business conducted by the Company at any time prior to the Closing.
 The term "Restricted  Territory" is  defined to  mean the  United States  of
 America.

      (d)  Non-Solicitation  Agreement.  For a period of five (5) years after
 the Closing, Donnell shall not, either on his own behalf or on behalf of any
 business competing with the Purchaser, directly or indirectly (i) solicit or
 induce, or in any  manner attempt to solicit  or induce any person  employed
 by, or an agent of, the Company or the Purchaser to terminate such  person's
 employment or agency, as the case may be, with such entity, or (ii) solicit,
 divert, or attempt to solicit or  divert, or otherwise accept as a  supplier
 or customer, any Person  which sells or furnishes  any products or  services
 to, or receives any products or services from, the Company or the Purchaser,
 nor will Donnell attempt  to induce any such  supplier or customer to  cease
 being (or any prospective supplier or customer not to become) a supplier  or
 customer of the Company or the Purchaser.

      (e)  Modification of Restrictions. Donnell agrees that if an arbitrator
 or a court of competent jurisdiction  determines that the length of time  or
 any other restriction, or portion thereof, set forth in this Section 5.8  is
 overly restrictive and unenforceable, the  arbitrator or court shall  reduce
 or  modify  such  restrictions  to  those  which  it  deems  reasonable  and
 enforceable under  the circumstances,  and as  so reduced  or modified,  the
 Parties agree that the restrictions of this Section 5.8 shall remain in full
 force and effect.  Donnell further agrees that if an arbitrator or court  of
 competent jurisdiction determines that any provision of this Section 5.8  is
 invalid  or  against  public  policy,  the  remaining  provisions  of   this
 Section 5.8 and  the  remainder of  this  Agreement shall  not  be  affected
 thereby, and shall remain in full force and effect.

      (f)  Injunctive  Relief.  In the  event of  any pending,  threatened or
 actual breach of any of the covenants or provisions of this Section 5.8,  as
 determined by an  arbitrator or  a court  of competent  jurisdiction, it  is
 understood and agreed by Donnell that the remedy at law for a breach of  any
 of the covenants or  provisions of this Section  5.8 may be inadequate  and,
 therefore, the Purchaser and the Company shall be entitled to a  restraining
 order or injunctive relief in addition to  any other remedies at law and  in
 equity, as determined by an arbitrator or a court of competent jurisdiction.
 Donnell waives any bond, surety, or other security that might be required of
 the Purchaser or the Company as a condition of any such restraining order or
 injunctive relief.

      (g)    Acknowledgments of Donnell.  Donnell acknowledges that  (i)  any
 public disclosure  of  the Confidential Information  will  have  an  adverse
 effect on the Company, the Purchaser  and their respective businesses,  (ii)
 the Company and  the Purchaser would  suffer irreparable  injury if  Donnell
 breached any of the  terms of this  Section 5.8, (iii)  the Company and  the
 Purchaser will be at a substantial  competitive disadvantage if such  entity
 fails to  acquire  and  maintain exclusive  ownership  of  the  Confidential
 Information or Donnell fails to abide  by the restrictions provided in  this
 Section 5.8, (iv) the scope of the restrictions provided in this Section 5.8
 are reasonable when  taking into account  (A) the  negotiations between  the
 Parties and (B) that Donnell is the direct beneficiary of the Total Purchase
 Price paid pursuant to this Agreement,  (v) the consideration being paid  to
 the Seller pursuant to this Agreement  is sufficient inducement for  Donnell
 to agree to the terms  hereof, (vi) the provisions  of this Section 5.8  are
 reasonable and necessary to protect the business of the Company, to  prevent
 the improper  use  or disclosure  of  the Confidential  Information  and  to
 provide the Company and the Purchaser  with exclusive ownership of all  such
 Confidential Information, and (vii) the terms  of this Section 5.8  preclude
 Donnell from engaging in the conduct of the business of the Company only for
 a reasonable period.

      (h)  Release.  The Trust and Donnell, in their respective capacities as
 member, manager, officer  and/or employee of  the Company,  hereby agree  to
 execute and deliver on the Closing  Date, in a form reasonably  satisfactory
 to the Purchaser, a written release of  the Company from any and all  claims
 resulting from or related to any matter arising prior to the Closing Date.

      Section 5.9   Required   Pre-Closing   Actions.   Notwithstanding   the
 provisions of Section  5.3 and Section 5.4, after the Signing Date but prior
 to the Closing Date,  the  Seller  shall,  and  shall  cause the Company to,
 effect the following transactions:

      (a)  Transfer  of Assets.   The Seller  shall purchase from the Company
 certain insurance  policies and  country club  membership more  specifically
 identified in Schedule 5.9(a) for the  purchase price set forth in  Schedule
 5.9(a).

      (b)  Repayment  of Related Party Loans.  The Seller shall pay, or cause
 to be paid, in full, all outstanding loans from the Company to the Seller or
 any person  related  to  the Seller,  as  more  specifically  identified  in
 Schedule 5.9(b).

                                 ARTICLE VI
                                 ----------
                            COVENANTS OF PURCHASER
                            ----------------------

      Section 6.1   Cooperation by Purchaser.
                    -------------------------
        From  the  Signing Date through the Closing Date, the Purchaser shall
 use  all  reasonable  efforts  (a)  to take all actions and to do all things
 necessary or advisable to consummate the transactions  contemplated by  this
 Agreement,  (b) to cooperate with the Company  and  the Seller in connection
 with the foregoing, including using reasonable efforts  to obtain all of the
 Required Consents and Required Permits, and (c) subject to  the other  terms
 and  conditions of this Agreement, to cause all the conditions  set forth in
 Section 8.2, the  satisfaction of which  is in the reasonable control of the
 Purchaser, to be satisfied on or prior to Closing.

      Section 6.2   Post-Closing Conduct of Business.
                    ---------------------------------
        Following the Closing  and through at  least December  31, 2008,  the
 Purchaser shall  continue  to conduct  the  business  of the  Company  in  a
 reasonable manner  consistent  with  customary  practices  in  the  industry
 segment in which the Company has historically operated.

      Section 6.3    Verification.  Subsequent to the Purchaser's calculation
 of  the  Contingent  Purchase  Price  pursuant to Section  1.4(d),  and upon
 reasonable  advance written request by the Seller, the Purchaser shall allow
 the  Seller or the Seller's representatives to inspect, examine or audit the
 Company's Books and Records for the purpose of  verifying the  determination
 of  the  Growth  Factor  and  the 3-Year LLAE.  The cost of such inspection,
 examination  or audit  shall be borne  by the Seller unless such inspection,
 examination or  audit reflects  that  the  actual amount  of  the Contingent
 Purchase  Price  exceeds  the  amount  calculated  by  the Purchaser by  ten
 percent or more,  in which case the costs of such inspection, examination or
 audit shall be borne by the Purchaser.

                                 ARTICLE VII
                                 -----------
                               MUTUAL COVENANTS
                               ----------------

      Section 7.1   Fees and Expenses.
                    ------------------
    Each Party hereto will be responsible for and bear all its own costs  and
 expenses incurred at any  time in connection  with pursuing, negotiating  or
 consummating this Agreement  and all  other agreements  contemplated by  the
 Transaction  Documents,  including   without  limitation  the   preparation,
 negotiation and execution of the Letter of Interest dated October 17,  2005,
 related hereto.  Such costs and expenses incurred by the Seller in excess of
 $15,000 will be paid from funds other than those of the Company.

      Section 7.2   Governmental Consents.
                    ----------------------
     Promptly after the Signing Date, each  Party shall take all actions  and
 do all things necessary to obtain all Consents required by any  Governmental
 Authority to consummate the transactions contemplated hereby.

      Section 7.3   Consents to Assign Leases and Contracts.
                    ----------------------------------------
      (a)  Cooperation and Reasonable Efforts.   Each Party  hereby agrees to
 use  reasonable  efforts,   to  take  reasonable   actions  (including   the
 Purchaser's delivery to third parties  of its audited financial  statements)
 and to cooperate with each other as  may be necessary to obtain Consents  to
 transfer  and  assign  the  Encumbered  Instruments.   Except  as  expressly
 provided herein, no Party  shall be required  to pay any  sum, to incur  any
 obligation or to  agree to  any amendment  of any  Encumbered Instrument  in
 order to  obtain any  such Consent  to transfer  and assign  the  Encumbered
 Instrument.

      (b)  Pre-Closing;   Required  Consents.   Schedule  7.3(b)  lists   the
 Encumbered Instruments to  which a Consent  to transfer and  assign must  be
 obtained from the  appropriate third party  prior to Closing  (collectively,
 the "Required Consents").  Except for  the Required Consents, the  obtaining
 of any  Consents  related to  the  Encumbered  Instruments shall  not  be  a
 condition to Closing, and  Closing shall occur  irrespective of whether  any
 such Consent has been obtained.

      Section 7.4   Permits.
                    --------
      (a)  Cooperation and Reasonable Efforts.   Each Party  hereby agrees to
 use reasonable efforts,  to take reasonable  actions and  to cooperate  with
 each other as may be necessary to transfer to Purchaser, or assist Purchaser
 in obtaining, all Permits required to  conduct the business of the  Company.
 On or as soon as practicable after the Signing Date, each Party shall  file,
 separately or  jointly  with  any other  Party,  as  the case  may  be,  all
 applications necessary to transfer or obtain the Permits.  Each Party  shall
 use reasonable  efforts  to resolve  such  objections,  if any,  as  may  be
 asserted by  any Governmental  Authority with  respect to  the  applications
 contemplated hereby.  The Seller and  the Purchaser shall each pay  one-half
 of the  fees  and  expenses incurred  in  connection  with  transferring  or
 obtaining all Permits.

      (b)  Pre-Closing;  Required Permits.  Schedule 7.4(b) lists the Permits
 which must be transferred to or obtained by Purchaser prior to Closing  (the
 "Required Permits").   Except  for the  Required  Permits, the  transfer  or
 issuance to Purchaser of any Permit shall not be a condition to Closing, and
 Closing shall  occur  irrespective  of whether  any  such  Permit  has  been
 transferred or obtained.

      Section 7.5   Further Assurances.
                    -------------------
   Subject to the other terms and  conditions of this Agreement, at any  time
 and from time  to time, whether  before or after  Closing, each Party  shall
 execute and deliver all instruments and documents and take all other  action
 that the other Party may reasonably request to consummate or to evidence the
 consummation of the transactions contemplated by this Agreement.

      Section 7.6   Supplemental Agreements.
                    ------------------------
    At or  prior to  the Closing, the  Seller shall  execute (a) the releases
 required  pursuant  to  Section  5.8(h),  and  (b)  an  employment agreement
 with the Company in substantially the form attached hereto  as Exhibit A.

      Section 7.7   Tax Matters.
                    ------------
    Whenever  any  Taxing  Authority  asserts a claim,  makes  an assessment,
 or otherwise  disputes the amount  of Taxes of  the  Company for  which  the
 Seller  is  or  may  be  liable  under  this  Agreement, the  Purchaser will
 promptly  notify  the  Seller  and  the Seller  shall  fully cooperate  with
 Purchaser and the Company  in connection with  any disputes, proceedings  or
 determinations relating  to any  Taxes to  the  extent such  proceedings  or
 determinations affect the  amount of Taxes  for which the  Seller is  liable
 under this Agreement.

      Section 7.8   Employee Benefit Plans; Employment.
                    -----------------------------------
      (a)  Employee Benefit Plans.  From  and  after  the Effective Date, the
 Company shall elect to continue as  a participating employer in the  Company
 Plans listed on Schedule  7.8(a) (the "Assumed Plans")  and the coverage  of
 the Employees under the Assumed Plans  shall remain in effect in  accordance
 with the terms of the Assumed  Plans.  The Purchaser  may elect in its  sole
 discretion at  any time  to become  the  plan administrator  and  sponsoring
 employer with  the sole  authority to  designate the  plan administrator  or
 amend or terminate any Assumed Plan.

      (b)  No Representations.  Without the written consent of the Purchaser,
 neither the Seller nor  the Company will make  any promise or commitment  to
 any employee of the Company with regard to his or her employment status with
 the Purchaser or  the Company, or  the terms or  conditions upon which  such
 employment might occur or be continued.

                                ARTICLE VIII
                                ------------
                       CONDITIONS PRECEDENT TO CLOSING
                       -------------------------------

      Section 8.1   Conditions Precedent to Purchaser's Obligations.
                    ------------------------------------------------
     The  obligation  of  the   Purchaser  to  consummate  the   transactions
 contemplated by this Agreement shall be  subject to the satisfaction of  the
 following conditions,  any  of  which  may  be  waived  in  writing  by  the
 Purchaser.

      (a)  Accuracy of Representations and Warranties.   The  representations
 and warranties made by the Seller in this Agreement shall have been true and
 complete as of the Signing Date and as of the Closing Date as though made as
 of the Closing Date, except to the extent such representations or warranties
 made as of a specific date  shall have been correct  and complete as of  the
 specified date.

      (b)  Performance of Covenants.  The Company and  the Seller shall  have
 performed and  complied  with  all  agreements,  covenants  and  obligations
 required by this Agreement to be performed by such party prior to or at  the
 Closing.

      (c)  No Material Adverse Change.   The Company  has not  undergone  any
 Material Adverse Change since the Signing Date.

      (d)  Consents.   The Company and the Seller, as the case may be,  shall
 have received and delivered  to Purchaser all of  the Required Consents  and
 the Required Permits, each in form and substance satisfactory to  Purchaser,
 and shall have given all notices required  to be given to any Persons  prior
 to the consummation of the transactions contemplated by this Agreement.

      (e)  Closing Certificate.  The Seller and an  executive officer of  the
 Company shall have delivered to the  Purchaser a certificate confirming  (i)
 the satisfaction of  the conditions set  forth in  Sections 8.1(a),  8.1(b),
 8.1(c) and 8.1(d) and (ii) the  continuing force and effect of the  Required
 Consents and Required Permits.

      (f)  Secretary's Certificate.  The Company  shall have delivered to the
 Purchaser a certificate executed by the secretary or an assistant  secretary
 of the Company certifying as to  (i) the Charter Documents of Aerospace  and
 each of  the Subsidiaries,  (ii) the  good standing  of Aerospace  and  each
 Subsidiary in  their respective  jurisdictions  of organization,  (iii)  the
 resolutions in which the members and managers (if any) of Aerospace approved
 the  Transaction  Documents  to  which  the  Company  is  a  party  and  the
 transactions contemplated thereby, and (iv) the incumbency of the  Company's
 officers who execute any  documents on behalf of  the Company in  connection
 with this Agreement.

      (g)  Deliveries.  The Company and the Seller, as the case may be, shall
 have delivered  the  documents  required by  Sections  2.2  and  such  other
 documents as Purchaser may reasonably require.

      (h)  No Order or Action.  No  Order shall  be in  effect forbidding  or
 enjoining  the  consummation  of  the transactions  contemplated hereby.  No
 Action shall be pending or threatened before any court or other Governmental
 Authority seeking  to enjoin  the Closing  or  seeking damages  against  the
 Purchaser or  any  of  its  Representatives  as  a  result  of  any  of  the
 transactions contemplated  by  this  Agreement, provided  that  neither  the
 Purchaser nor any of its affiliates instituted such Action.

      (i)  Lease Amendment.  The Company and Donnell  Investments, LLC  shall
 have executed an amendment, in form and substance reasonably satisfactory to
 the Purchaser, to that  certain Office Lease  Agreement dated September  15,
 2005, pertaining to the  Company's lease of office  space at 14990  Landmark
 Boulevard, Dallas, Texas 75254.

      Section 8.2   Conditions Precedent to the Seller's Obligations.
                    -------------------------------------------------
     The obligation of the Seller to consummate the transactions contemplated
 by this Agreement  shall be  subject to  the satisfaction  of the  following
 conditions, any of which may be waived in writing by the Seller.

      (a)  Accuracy  of Representations  and Warranties.  The representations
 and warranties made by the Purchaser in this Agreement shall have been  true
 and complete as of  the Signing Date and  as of the  Closing Date as  though
 made as of the  Closing Date, except to  the extent such representations  or
 warranties made as of a specific  date shall have been correct and  complete
 as of the specified date.

      (b)  Performance of Covenants.  The  Purchaser shall have performed and
 complied with all  agreements, covenants  and obligations  required by  this
 Agreement to be performed by the Purchaser prior to or at the Closing.

      (c)  Closing Certificate.  An executive officer of Purchaser shall have
 delivered to the  Seller a certificate  confirming the  satisfaction of  the
 conditions set forth in Sections 8.2(a) and 8.2(b).

      (d)  Secretary's Certificate. The Purchaser shall have delivered to the
 Seller a certificate executed by the secretary or an assistant secretary  of
 the Purchaser certifying as to (i) the resolutions in which the  Purchaser's
 board of directors approved this Agreement and the transactions contemplated
 hereby, and (ii) the incumbency of the Purchaser's officers who execute  any
 documents on behalf of the Purchaser in connection with this Agreement.

      (e)  Deliveries.  The  Purchaser  shall have  delivered  the  documents
 required by  Section  2.3  and  such  other  documents  as  the  Seller  may
 reasonably require.

      (f)  No Order or Action.  No  Order shall  be in  effect forbidding  or
 enjoining the  consummation  of  the  transactions  contemplated hereby.  No
 Action shall be pending or threatened before any court or other Governmental
 Authority seeking  to enjoin  the Closing  or  seeking damages  against  the
 Company or the Seller or any of their Representatives as a result of any  of
 the transactions contemplated by this  Agreement, provided that neither  the
 Company nor the Seller nor any of their affiliates instituted such Action.

                                 ARTICLE IX
                                 ----------
                         TERMINATION PRIOR TO CLOSING
                         ----------------------------

      Section 9.1   Termination of Agreement.
                    -------------------------
     This Agreement may be terminated at any time prior to the Closing:

      (a)  by mutual agreement of the Purchaser and the Seller;

      (b)  by the Purchaser at any time after  the occurrence  of a  Material
 Adverse Change in the Company; or

      (c)  by  the Purchaser or the Seller at any time  on or after March 31,
 2006, if  any  of  the  conditions  provided for  in  Section  8.1  or  8.2,
 respectively, shall not  have been met  or waived in  writing prior to  such
 date.

      Section 9.2   Procedure Upon Termination.
                    ---------------------------
     In the  event of  termination pursuant  to Section  9.1, written  notice
 thereof shall be immediately given to  the other Party and the  transactions
 contemplated by  this Agreement  shall be  terminated, without  any  further
 action by any Party.  If the transactions contemplated by this Agreement are
 terminated as provided herein:

      (a)  each Party shall  return all  documents,  work  papers  and  other
 materials of the other Party, whether obtained before or after the execution
 hereof, to the Party furnishing the same; and

      (b)  such termination shall not  in any way  limit, restrict or relieve
 any Party of liability for any breach of this Agreement.

                                  ARTICLE X
                                  ---------
                          INDEMNIFICATION AND OFFSET
                          --------------------------

      Section 10.1   Indemnification by Seller.
                     --------------------------
 The Seller shall indemnify and hold harmless the Purchaser, the Company, and
 their  respective  directors, officers,  employees,  agents,  attorneys  and
 shareholders (collectively, the "Purchaser Group") in respect of any and all
 Claims incurred by the Purchaser Group,  in connection with each and all  of
 the following:

      (a)  Any breach of any representation or warranty made by the Seller in
 this Agreement; and

      (b)  The breach of any covenant, agreement  or obligation of the Seller
 contained in  this  Agreement  or any  other  instrument  delivered  at  the
 Closing, including, without limitation, the  agreement and covenants of  the
 Seller set forth in Section 5.8 of this Agreement.

 Provided,  however,  that  the  Seller's  obligation to  indemnify and  hold
 harmless the Purchaser  shall be applicable  only if and  to the extent  the
 aggregate amount of all such Claims exceeds a threshold of $40,000.

      Section 10.2   Indemnification by Purchaser.
                     -----------------------------
 The Purchaser shall indemnify and hold harmless the Seller in respect of any
 and all Claims reasonably incurred by the Seller in connection with each and
 all of the following:

      (a)  Any breach of any representation or warranty made by the Purchaser
 in this Agreement; and

      (b)  The breach  of  any  covenant,  agreement  or  obligation  of  the
 Purchaser contained in this Agreement or  any other instrument delivered  at
 the Closing.

      Section 10.3   Claims for Indemnification.
                     ---------------------------
 Whenever any  Claim shall  arise for  indemnification hereunder,  the  party
 entitled to indemnification (the "Indemnified Party") shall promptly  notify
 the other party (the "Indemnifying Party") of the Claim and, when known, the
 facts constituting the basis for such Claim.  In the event of any Claim  for
 indemnification hereunder resulting from or in connection with any Claim  or
 legal proceedings by  a third party,  the notice to  the Indemnifying  Party
 shall specify, if  known, the amount  or an estimate  of the  amount of  the
 liability potentially arising  therefrom.  The  Indemnified Party shall  not
 settle or compromise any Claim by a third party for which it is entitled  to
 indemnification  hereunder  without  the   prior  written  consent  of   the
 Indemnifying Party.

      Section 10.4   Defense by Indemnifying Party.
                     ------------------------------
 In connection with any  Claim giving rise  to indemnity hereunder  resulting
 from or arising out of any Claim or legal proceeding by a Person who is  not
 a party  to this  Agreement, the  Indemnifying Party  at its  sole cost  and
 expense may,  upon written  notice to  the  Indemnified Party  given  within
 twenty (20) days after delivery of the written notice referred to in Section
 10.3 hereof assume the defense of any  such Claim or legal proceeding if  it
 acknowledges  to  the  Indemnified  Party  in  writing  its  obligations  to
 indemnify the Indemnified Party with respect to all elements of such  Claim.
 Without the prior written consent of the Indemnified Party, the Indemnifying
 Party will not  enter into  any settlement  of any  third-party claim  which
 would lead to liability or create  any financial or other obligation on  the
 part of  the  Indemnified Party  for  which  the Indemnified  Party  is  not
 entitled to indemnification hereunder, or  which provides for injunctive  or
 other  non-monetary  relief  applicable  to  the  Indemnified Party, or does
 not  include  an  unconditional  release  of  all Indemnified  Parties.  The
 Indemnified Party shall be entitled to participate in  (but not control) the
 defense of any such action, with its own counsel and at its own expense.  If
 the Indemnifying Party  does not  assume the defense  of any  such Claim  or
 litigation resulting therefrom with  counsel reasonably satisfactory to  the
 Indemnified Party, (a) the Indemnified Party  may defend against such  Claim
 or litigation, in such manner as it may deem appropriate, including, but not
 limited to, settling such  Claim or litigation, after  giving notice of  the
 same to the Indemnifying Party, on  such terms as the Indemnified Party  may
 deem appropriate,  and  (b) the  Indemnifying  Party shall  be  entitled  to
 participate in  (but not  control)  the defense  of  such action,  with  its
 counsel and at its own expense.  If the Indemnifying Party thereafter  seeks
 to question the manner  in which the Indemnified  Party defended such  third
 party Claim or the amount or nature of any such settlement, the Indemnifying
 Party shall have the burden to prove by a preponderance of the evidence that
 the Indemnified Party did not defend or  settle such third party Claim in  a
 reasonably prudent manner as  a prudent businessman would  if his own  funds
 were subject to such suit.

      Section 10.5   Offset.
                     -------
 The Indemnified Party shall have the  right to offset any amounts for  which
 it is entitled to indemnification under  this Article X against any  amounts
 otherwise payable by the Indemnified Party  to the Indemnifying Party  under
 this Agreement.

                                 ARTICLE XI
                                 ----------
                      ARBITRATION AND EQUITABLE REMEDIES
                      ----------------------------------

      Section 11.1   Settlement Meeting.
                     -------------------
     The Parties  shall attempt  in good  faith to  resolve promptly  through
 negotiations any Claim or dispute under  this Agreement.  If any such  Claim
 or dispute should arise, the Parties shall meet at least once to attempt  to
 resolve the matter (the  "Settlement Meeting").  Any  Party may request  the
 other Party to  attend a Settlement  Meeting at a  mutually agreed time  and
 place within ten days after delivery of a notice of a Claim or dispute.  The
 occurrence of a Settlement Meeting with respect to a Claim or dispute  shall
 be a  condition precedent  to seeking  any arbitration  or judicial  remedy,
 provided that if a  Party refuses to attend  a Settlement Meeting the  other
 Party may proceed to seek such remedy.

      Section 11.2   Arbitration Proceedings.
                     ------------------------
     If the Parties  have not  resolved a monetary  Claim or  dispute at  the
 Settlement Meeting, any Party may submit the matter to arbitration.  A panel
 of three arbitrators shall conduct the arbitration proceedings in accordance
 with the provisions of the Federal  Arbitration Act (99 U.S.C. Section 1  et
 seq.) and the Comprehensive  Arbitration Rules and  Procedures of JAMS  (the
 "Arbitration Rules").  The decision of a majority of the panel shall be  the
 decision of the arbitrators.

      (a)  Arbitration  Notice.   To  submit a  monetary  Claim or dispute to
 arbitration, a Party shall  furnish the other Party  and JAMS with a  notice
 (the "Arbitration  Notice") containing  (i) the  name  and address  of  such
 Party, (ii)  the nature  of  the monetary  Claim  or dispute  in  reasonable
 detail, (iii) the Party's intent  to commence arbitration proceedings  under
 this Agreement, and (iv)  the other information  required under the  Federal
 Arbitration Act and the Arbitration Rules.

      (b)  Selection  of  Arbitrators.   Arbitrators  shall  be  selected  in
 accordance with and  have the  qualifications specified  in the  Arbitration
 Rules.

      (c)  Arbitration Final.  The arbitration  of the matters in controversy
 and the determination of any amount  of damages or indemnification shall  be
 final and binding upon the Parties  to the maximum extent permitted by  Law,
 provided that any Party may seek any equitable remedy available under Law as
 provided in this Agreement.  This agreement to arbitrate is irrevocable.

      Section 11.3   Place of Arbitration.
                     ---------------------
     Any arbitration proceedings shall be conducted in Fort Worth, Texas,  or
 at such other location as the Parties may agree.  The arbitrators shall hold
 the arbitration proceedings within  sixty (60) days  after the selection  of
 the third arbitrator.

      Section 11.4   Discovery.
                     ----------
     During the period beginning with the  selection of the third  arbitrator
 and  ending  upon  the  conclusion  of  the  arbitration  proceedings,   the
 arbitrators shall have the authority to  permit the Parties to conduct  such
 discovery as the arbitrators consider appropriate.

      Section 11.5   Equitable Remedies.
                     -------------------
     Notwithstanding anything else in this  Agreement to the contrary,  after
 the Settlement  Meeting a  Party shall  be entitled  to seek  any  equitable
 remedies available under Law, including  an injunction prohibiting a  breach
 of the provisions of Section 5.8 or an Order requiring the Seller to perform
 this Agreement.   Any such equitable  remedies shall be  in addition to  any
 damages  or  indemnification  rights  that  such  Party  may  assert  in  an
 arbitration proceeding.

      Section 11.6   Exclusive Jurisdiction.
                     -----------------------
     The Parties agree that any claim  for equitable relief relating to  this
 Agreement shall be instituted  in a federal or  state court sitting in  Fort
 Worth, Texas, which courts  and their respective  appellate courts shall  be
 the exclusive venue  for any such  claim.  Each  Party waives any  objection
 that it may have to the laying of such venue, and irrevocably submits to the
 jurisdiction of any such court with respect to any such claim.  Any  service
 of process and other notice  in any such case  shall be effective against  a
 Party when  transmitted in  accordance with  Section 12.9,  provided that  a
 Party also may serve process in any manner permitted by Law.

      Section 11.7   Judgments.
                     ----------
     Any arbitration award under this Agreement  shall be final and  binding.
 Any court having jurisdiction may enter  judgment on such arbitration  award
 upon application of a Party.

      Section 11.8   Expenses.
                     ---------
     If any  Party commences  arbitration  proceedings or  court  proceedings
 seeking equitable  relief with  respect to  this Agreement,  the  prevailing
 Party in such  arbitration proceedings or  case may receive  as part of  any
 award or judgment reimbursement of  such Party's reasonable attorneys'  fees
 and  expenses  to  the  extent  that  the  arbitrators  or  court  considers
 appropriate.

      Section 11.9   Cost of the Arbitration.
                     ------------------------
     The arbitrators shall assess the  costs of the arbitration  proceedings,
 including their fees, to the Parties in such proportions as the  arbitrators
 consider reasonable under the circumstances.

      Section 11.10  Exclusivity of Remedies.
                     ------------------------
     To the extent permitted  by Law, the  arbitration and judicial  remedies
 set forth in this  Article XI shall be the  exclusive remedies available  to
 the Parties with respect  to any dispute under  this Agreement or Claim  for
 damages under this Agreement.

                                 ARTICLE XII
                                 -----------
                                MISCELLANEOUS
                                -------------

      Section 12.1   Amendment.
                     ----------
     No amendment of this  Agreement shall be effective  unless in a  writing
 signed by Purchaser and the Seller.

      Section 12.2   Counterparts.
                     -------------
     This Agreement may be  executed in any number  of counterparts, each  of
 which shall be deemed to  be an original agreement,  but all of which  shall
 constitute one and the  same agreement.  Any  Party may execute and  deliver
 this Agreement  by an  executed signature  page transmitted  by a  facsimile
 machine.  If a  Party transmits its signature  page by a facsimile  machine,
 such  Party  shall  promptly  thereafter  deliver  an  originally   executed
 signature page to the other Party, provided that any failure to deliver such
 an originally  executed  signature  page  shall  not  affect  the  validity,
 legality, or enforceability of this Agreement.

      Section 12.3   Entire Agreement.
                     -----------------
     This  Agreement  constitutes  the  entire  agreement  and  understanding
 between the Parties and supersedes all prior agreements and  understandings,
 both written and oral, with respect to the subject matter of this Agreement.

      Section 12.4   Expenses.
                     ---------
     Each Party shall bear its own  expenses with respect to the  negotiation
 and preparation of this  Agreement and the Closing,  including any fees  and
 expenses of its Representatives,  provided that if  a Party terminates  this
 Agreement because  of another  Party's breach  of this  Agreement, the  non-
 breaching Party shall be entitled to  seek reimbursement of its expenses  as
 part of its damages with respect to such breach.  The Seller shall bear  any
 Tax imposed in connection with the transfer of the Interest to the Purchaser
 pursuant to this Agreement.

      Section 12.5   GOVERNING LAW.
                     --------------
     THIS AGREEMENT SHALL  BE GOVERNED  BY THE LAWS  OF THE  STATE OF  TEXAS,
 REGARDLESS OF THE LAWS  THAT MIGHT OTHERWISE GOVERN  UNDER THE CONFLICTS  OF
 LAWS PRINCIPLES OF SUCH STATE.

      Section 12.6   Consent to Service of Process.
                     ------------------------------
     Each Party waives  any objection that  such Party may  now or  hereafter
 have to the  laying of venue  of any Action  in Tarrant  County, Texas,  and
 irrevocably  submits  to  the  jurisdiction   of  any  court  of   competent
 jurisdiction in Tarrant County, Texas.   Any and all service of process  and
 any other notice  in any Action  shall be effective  against any Party  when
 transmitted in accordance with Section 12.9.  Nothing contained herein shall
 be deemed to affect the right  of any Party to  serve process in any  manner
 permitted by Law.

      Section 12.7   No Assignment.
                     --------------
     No Party  may assign  its benefits  or delegate  its duties  under  this
 Agreement  without  the  prior written  consent  of  the other  Party.   Any
 attempted assignment or delegation without such prior consent shall be void.
 Notwithstanding this  prohibition  against assignment  and  delegation,  the
 Purchaser may assign its rights and delegate its duties under this Agreement
 to a wholly-owned subsidiary of the Purchaser without the Seller's  consent.
 In addition, the Purchaser may assign  its rights under this Agreement to  a
 purchaser of  all of  the assets  or  equity of  the Purchaser  without  the
 Seller's consent, and any  such purchaser and  any subsequent purchasers  of
 all of  the assets  or equity  of the  Purchaser may  similarly assign  such
 rights.  Upon the Purchaser's assignment  of its benefits and delegation  of
 its duties  under this  Agreement without  the consent  of the  Seller,  the
 Purchaser shall remain liable for any obligations under this Agreement.

      Section 12.8   No Third Party Beneficiaries.
                     -----------------------------
     This Agreement is  solely for the  benefit of the  Parties and no  other
 Person shall have any right, interest, or claim under this Agreement.

      Section 12.9   Notices.
                     --------
     All  claims,  consents,  designations,   notices,  waivers,  and   other
 communications in connection with this Agreement shall be in writing.   Such
 claims, consents, designations, notices,  waivers, and other  communications
 shall be  considered received  (i) on  the day  of actual  transmittal  when
 transmitted by facsimile with written confirmation of such transmittal, (ii)
 on the next business day following actual transmittal when transmitted by  a
 nationally recognized overnight courier, or (iii) on the third business  day
 following actual  transmittal when  transmitted by  certified mail,  postage
 prepaid, return receipt requested; in each case when transmitted to a  Party
 at its address set forth below (or to such other address to which such Party
 has notified the other  Party in accordance with  this Section to send  such
 claims, consents, designations, notices, waivers, and other communications):

           Purchaser:  Hallmark Financial Services, Inc.
                       777 Main Street, Suite 1000
                       Fort Worth, Texas 76102
                       Phone:  (817) 348-1800
                       Fax:  (817) 348-1815
                       Attn.:  Mr. Mark Morrison

      with a copy to:  McGuire, Craddock & Strother, P.C.
                       3550 Lincoln Plaza
                       500 North Akard
                       Dallas, Texas 75201
                       Phone:  (214) 954-6800
                       Fax:  (214) 954-6868
                       Attn.:  Steven D. Davidson

              Seller:  c/o Curtis R. Donnell
                       16815 Village Lane
                       Dallas, Texas  75248
                       Phone:  (469) 446-8693
                       Fax:  (972) 852-1213

      with a copy to:  Underwood, Perkins & Ralston, P.C.
                       c/o Amy K. Ratzlaff
                       5420 LBJ Freeway
                       Suite 1900
                       Dallas, Texas  75240
                       Phone:  (972) 661-5114
                       Fax:  (972) 661-5691

      Section 12.10  Public Announcements.
                     ---------------------
     The Parties shall  agree on  the terms of  any press  releases or  other
 public announcements related to this Agreement, and shall consult with  each
 other before  issuing  any  press releases  or  other  public  announcements
 related to this  Agreement; provided,  however, that  any Party  may make  a
 public disclosure if in the opinion  of such Party's counsel it is  required
 by Law or the  rules of the Securities  Exchange Commission, American  Stock
 Exchange or other regulatory  agency to make such  disclosure.  The  Parties
 agree, to the extent practicable, to  consult with each other regarding  any
 such public announcement in advance thereof.

      Section 12.11  Representation by Legal Counsel.
                     --------------------------------
     Each Party is  a sophisticated Person  that was  advised by  experienced
 legal counsel and other advisors in the negotiation and preparation of  this
 Agreement.

      Section 12.12  Schedules.
                     ----------
     All references in this Agreement to  schedules shall mean the  schedules
 identified in this Agreement, which are incorporated into this Agreement and
 shall be deemed a part of this Agreement for all purposes.  Each Section  of
 this Agreement that refers to a schedule shall have a separate schedule.  In
 addition, any disclosure under a particular Section's schedule shall be made
 under the heading of any relevant subsection of such Section.  A  disclosure
 of an item in a schedule  for a particular Section or  under a heading in  a
 schedule corresponding to a particular subsection shall not be a  disclosure
 under any other Section's schedule or any other subsection, unless so  noted
 specifically on such schedule.  The Seller has delivered to the Purchaser  a
 correct and complete  copy of each  document described on  each schedule  to
 this Agreement  and  a correct  and  complete written  description  of  each
 unwritten arrangement or other item described on each such schedule.

      Section 12.13  Severability.
                     -------------
     Any  provision  of  this  Agreement  that is prohibited or unenforceable
 in  any jurisdiction shall not invalidate  the  remaining provisions of this
 Agreement or affect the  validity or  enforceability of  such  provision  in
 any  other jurisdiction.  In addition, any  such prohibited or unenforceable
 provision  shall be given effect to the extent possible  in the jurisdiction
 where such provision is prohibited or unenforceable.

      Section 12.14  Specific Performance.
                     ---------------------
     The Seller acknowledges that the benefits that the Purchaser will derive
 from  the  transactions  contemplated  by  this  Agreement  are  unique  and
 irreplaceable.  Accordingly, if the Seller improperly abandons or terminates
 this Agreement, the Purchaser would not have an adequate remedy at law.  The
 Purchaser therefore shall be entitled to a court order requiring the  Seller
 to perform this Agreement.

      Section 12.15  Successors.
                     -----------
     This Agreement shall be binding upon  and shall inure to the benefit  of
 each Party  and its  heirs, legal  representatives, permitted  assigns,  and
 successors, provided that this  Section shall not  permit the assignment  or
 other transfer of this Agreement, whether by operation of law or  otherwise,
 if such assignment of other transfer  is not otherwise permitted under  this
 Agreement.

      Section 12.16  Time of the Essence.
                     --------------------
     Time is of  the essence  in the performance  of this  Agreement and  all
 dates and periods specified in this Agreement.

      Section 12.17  Waiver.
                     -------
     No provision of this  Agreement shall be  considered waived unless  such
 waiver is  in  writing  and signed  by  the  Party that  benefits  from  the
 enforcement  of  such  provision.   No  waiver  of  any  provision  in  this
 Agreement, however, shall be deemed a waiver of a subsequent breach of  such
 provision or a waiver of a similar provision.  In addition, a waiver of  any
 breach or a failure to enforce any term or condition of this Agreement shall
 not in any way affect, limit, or waive a Party's rights under this Agreement
 at any time  to enforce  strict compliance  thereafter with  every term  and
 condition of this Agreement.

      IN  WITNESS  WHEREOF,  each  Party  has  executed,  or  caused  a  duly
 authorized officer to execute, this Agreement as of the Signing Date.

 PURCHASER:                    HALLMARK FINANCIAL SERVICES, INC.

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

 SELLER:                       DONNELL CHILDREN REVOCABLE TRUST

                               By:
                                      --------------------------------
                               Name:  Curtis Donnell
                                      --------------------------------
                               Title: Trustee
                                      --------------------------------

                               ---------------------------------------
                               Curtis R. Donnell, Individually

<PAGE>

                                  APPENDIX A
                   DEFINITIONS AND  RULES OF INTERPRETATION

      Definitions.  Unless the context otherwise requires, the terms  defined
 in this Appendix shall have the meanings specified below for all purposes of
 this Agreement:

           "Action"  means  any  action,  arbitration  proceeding,  cause  of
 action, charge,  counterclaim, cross  claim, inquiry,  investigation,  legal
 action, litigation, Order, proceeding, or suit.

           "Aerospace" shall have the meaning set forth in Recital A.

           "Agreement" shall have the meaning set forth in the Preamble.

           "Arbitration Notice" shall have the  meaning set forth in  Section
 11.2(a).

           "Arbitration Rules" shall  have the meaning  set forth in  Section
 11.2.

           "Assumed Plans"  shall  have  the meaning  set  forth  in  Section
 7.8(a).

           "Bank Accounts" shall have the meaning set forth in Section 3.20.

           "Base Purchase Price" shall have the meaning set forth in  Section
 1.2.

            "Books  and  Records"  shall  mean  all  the  books  and  records
 maintained by or for  any Person, including  all accounting records,  minute
 books, stock  records,  computerized  records  and  storage  media  and  the
 software used in connection therewith.

           "Charter Documents" shall mean (i) in  the case of a  corporation,
 its articles or  certificate of incorporation  and its bylaws,  (ii) in  the
 case of  a  partnership, its  partnership  certificate and  its  partnership
 agreement, and  (iii) in  the case  of  any other  Person, its  organic  and
 governing documents;  in each  case as  such document  has been  amended  or
 supplemented from time to time prior to the Signing Date.

           "Claim" shall  mean  any arbitration  award,  assessment,  charge,
 citation, claim, damage, demand,  directive, expense, fine, interest,  joint
 or several  liability, lawsuit,  notice,  obligation, payment,  penalty,  or
 summons of any  kind or nature  whatsoever, including  any damages  incurred
 because of  the claimant's  negligence or  gross  negligence or  any  strict
 liability imposed upon the claimant, any consequential or punitive  damages,
 and  any  reasonable  attorneys'  fees  and  expenses.   A  Claim  shall  be
 considered to exist even though it may be conditional, contingent, indirect,
 potential,  secondary,  unaccrued,  unasserted,  unknown,  unliquidated,  or
 unmatured.  Without  limiting the foregoing,  the accrual  of an  additional
 federal income  tax  liability  as  described  in  Schedule  3.26  shall  be
 considered a Claim hereunder.

           "Closing" shall have the meaning set forth in Section 2.1.

           "Closing Date" shall have the meaning set forth in Section 2.1.

           "Code" shall mean the Internal Revenue Code of 1986, as amended.

           "Company" shall have the meaning set forth in Recital A.

           "Company Assets"  shall  have the  meaning  set forth  in  Section
 3.9(a).

           "Company Plans"  shall  have  the meaning  set  forth  in  Section
 3.18(a).

           "Competing Business" shall have the  meaning set forth in  Section
 5.8(c).

           "Confidential Information" means any proprietary information,  and
 any information  which Purchaser  reasonably  considers to  be  proprietary,
 pertaining to the  Company's and  Purchaser's past,  present or  prospective
 business secrets, methods or policies, earnings, finances, security holders,
 lenders, key employees, nature of services performed by such entity's  sales
 personnel,  procedures,  standards  and  methods,  information  relating  to
 arrangements with suppliers, the  identity and requirements of  arrangements
 with customers,  all policyholder  information of  policyholders, the  type,
 volume or profitability  of services  or products  for customers,  drawings,
 records, reports,  documents,  manuals,  techniques,  ratings,  information,
 data, statistics, trade  secrets and all  other information of  any kind  or
 character relating  to  each of  the  Parties,  whether or  not  reduced  to
 writing.

           "Consent" shall mean a consent, approval, order, authorization  or
 waiver from,  notice to  or declaration,  registration  or filing  with  any
 Person.

           "Contingent Purchase Price"  shall have the  meaning set forth  in
 Section 1.2.

           "Donnell" shall have the meaning set forth in the Preamble.

            "Effective Date" shall mean shall have  the meaning set forth  in
 Section 1.4.

            "Employee Benefit Plan" shall mean any  (i) Pension Benefit Plan,
 (ii) Welfare Benefit Plan, (iii) accident, dental, disability, health, life,
 medical,  or  vision  plan  or  insurance  policy,  (iv)  bonus,  executive,
 incentive or deferred compensation  plan, (v) change  in control plan,  (vi)
 fringe benefits and perquisites, (vii)  holiday, sick pay, leave,  vacation,
 moving or  tuition  reimbursement  or other  similar  policy,  (viii)  stock
 option,  stock   purchase,  phantom   stock,  restricted   stock  or   stock
 appreciation plan, (ix) severance plan,  or (x) other employee  arrangement,
 commitment, custom, policy or practice.

           "Employees" shall have the meaning set forth in Section 3.17(a).

           "Encumbered Instrument" shall mean any  contract or lease that  by
 its terms requires Consent from a third party by reason of the  transactions
 contemplated by the Transaction Documents.

           "Encumbrance" shall mean any title defect or objection,  mortgage,
 lien, deed  of trust,  equity, judgment,  claim, restrictive  covenant,  use
 restriction, charge, pledge, security interest  or other encumbrance of  any
 nature whatsoever,  including  all leases,  chattel  mortgages,  conditional
 sales  contracts,  collateral  security  arrangements  and  other  title  or
 interest retention arrangements.

           "ERISA" shall mean the Employee Retirement Income Security Act  of
 1974, as amended.

           "ERISA Affiliate"  shall have  the meaning  set forth  in  Section
 3.18(b).

           "Financial Statements" shall have the meaning set forth in Section
 3.26.

           "GAAP" shall  mean  generally accepted  accounting  principles  in
 effect in the United States of America as of the Signing Date.

           "Governmental Authority"  shall mean  any federal,  state,  local,
 tribal,  foreign   or  other   governmental  agency,   department,   branch,
 commission, board, bureau, court, instrumentality or body.

           "Indemnified  Party"  shall   have  the  meaning   set  forth   in
 Section 10.3.

           "Indemnifying  Party"  shall  have   the  meaning  set  forth   in
 Section 10.3.

           "Insurance Policies" shall have the  meaning set forth in  Section
 3.12.

           "Intangible Asset"  shall mean  any patent,  trademark,  trademark
 license, servicemark, servicemark  license, computer  software, trade  name,
 masthead, brand name, slogan, copyright, reprint right, franchise,  license,
 process, authorization, invention, know-how, formula, trade secret and other
 intangible asset, together  with any  pending application,  continuation-in-
 part or extension therefor.

           "Interest" shall have the meaning set forth in Recital A.

            "Law" shall mean any applicable  code, statute, law, common  law,
 rule,  regulation,  order,  ordinance,  judgment,  decree,  order,  writ  or
 injunction of any Governmental Authority.

           "Law Affecting  Creditors'  Rights"  shall  mean  any  bankruptcy,
 fraudulent conveyance or  transfer, insolvency, moratorium,  reorganization,
 or other law affecting the enforcement  of creditors' rights generally,  and
 any general principles of equity.

           "Material Adverse Change"  shall mean, with  respect to a  Person,
 that such Person has (i) breached a Material Contract, (ii) incurred a Claim
 or become a party to an Action that could have a significant and detrimental
 effect upon it, (iii) suffered a  Material Adverse Effect, or (iv)  violated
 any Law or Order to which it or any of its assets is subject or bound.

           "Material Adverse Effect"  shall mean, with  respect to a  Person,
 the occurrence of an  event or the  existence of a  circumstance that has  a
 material adverse  effect  on such  Person's  assets, business,  cash  flows,
 financial condition, liabilities,  operations, prospects, or  relationships,
 including the occurrence of any event  or the existence of any  circumstance
 that could cause such an effect in the future in an amount of $100,000.00 or
 more.

           "Material Contracts" shall have the  meaning set forth in  Section
 3.13.

           "Order" shall  mean  any consent  decree,  decree,  determination,
 injunction, judgment,  order,  or writ  of  any arbitrator  or  Governmental
 Authority.

           "Parties" shall mean all of the Purchaser, the Trust and  Donnell,
 collectively, and "Party"  shall mean  any of  the Purchaser,  the Trust  or
 Donnell, individually.

           "Pension Benefit Plan" shall mean (i) an "employee pension benefit
 plan" as defined in Section 3(2)  of ERISA, and (ii) a "multiemployer  plan"
 as defined in Section 4001(a)(3) of ERISA.

           "Permit" shall mean any license, approval, certificate, franchise,
 registration,  qualification,  permit  or  authorization  issuable  by   any
 Governmental Authority or industry self-regulating organization.

           "Permitted  Encumbrance"  shall  mean  any  Encumbrance   directly
 related to (i) workers', repairmen's and similar Encumbrances imposed by Law
 that have been incurred in the  ordinary course of business, (ii)  retention
 of title agreements with  suppliers entered into in  the ordinary course  of
 business, and (iii) the rights of others to customer deposits.

           "Person"  shall  mean  any  association,  bank,  business   trust,
 corporation,   estate,   general   partnership,   Governmental    Authority,
 individual,  joint  stock  company,  joint  venture,  labor  union,  limited
 liability company, limited partnership, non-profit corporation, professional
 association, professional corporation, trust,  or any other organization  or
 entity.

           "Personal Property Leases"  shall have  the meaning  set forth  in
 Section 3.10(d). .

           "Purchase Price" shall have the meaning set forth in Section 1.2.

           "Purchaser" shall have the meaning set forth in the Preamble.

           "Purchaser Group"  shall have  the meaning  set forth  in  Section
 10.1.

           "Real Property Leases" shall have the meaning set forth in Section
 3.10(b).

           "Representatives" shall  mean,  with  respect to  a  Person,  such
 Person's directors,  employees, officers,  agents, accountants,  affiliates,
 consultants, investment  bankers,  attorneys, lenders,  representatives  and
 shareholders.

           "Required Consents" shall  have the meaning  set forth in  Section
 7.3(b).

           "Required Permits" shall  have the  meaning set  forth in  Section
 7.4(b).

           "Restricted  Territory"  shall  have  the  meaning  set  forth  in
 Section 5.8(c).

           "Returns" shall have the meaning set forth in Section 3.19(a).

           "Seller" shall have the meaning set forth in the Preamble.

           "Seller's Knowledge" shall  mean the  actual knowledge  as of  the
 date that a  specific representation  or warranty  is made  or deemed  made,
 after reasonable inquiry, of an individual Seller.

           "Settlement Meeting" shall have the  meaning set forth in  Section
 10.1.

            "Signing Date" shall have the meaning set forth in the Preamble.

           "Subsidiary"  shall  mean   any  corporation,  limited   liability
 company,  partnership  or  other   organization,  whether  incorporated   or
 unincorporated, of which (1) Aerospace or any other Subsidiary of  Aerospace
 is a general partner; or (2) at least a majority of the securities or  other
 interests having by their terms ordinary voting power to elect a majority of
 the board  of  directors,  managers  or  other  persons  performing  similar
 functions with respect  to such  corporation, limited  liability company  or
 other organization  is,  directly  or indirectly,  owned  or  controlled  by
 Aerospace, by any one or more of the other Subsidiaries of Aerospace, or  by
 Aerospace and any one or more of its other Subsidiaries.

            "Tax" shall mean any assessment, charge, duty, fee, impost, levy,
 tariff, or  tax  of  any  nature  whatsoever  imposed  by  any  Governmental
 Authority or payable pursuant  to any tax  sharing agreement, including  any
 income, payroll,  withholding, excise,  gift, alternative  minimum,  capital
 gain, added value, social security, sales, use, real and personal  property,
 use and occupancy, business and occupation, mercantile, real estate, capital
 stock, and  franchise tax  or charge,  together with  any related  interest,
 penalties or additions thereon.

           "Taxing Authority" shall mean the Internal Revenue Service and any
 other  domestic  or  foreign  Governmental  Authority  responsible  for  the
 administration of any Tax.

           "Total Purchase Price" shall have the meaning set forth in Section
 1.2.

            "Transaction  Documents"   shall   mean   this   Agreement,   the
 Supplemental Agreements, and  all other documents  and instruments  executed
 and delivered pursuant to or in furtherance of this Agreement.

           "Trust" shall have the meaning set forth in the Preamble.

           "Welfare Benefit  Plan" shall  mean an  "employee welfare  benefit
 plan" as defined  in Section 3(1)  of ERISA, including  an employee  welfare
 benefit plan which is a "multiemployer  welfare plan" as defined in  Section
 3(37) of ERISA and a "multiple  employer welfare arrangement" as defined  in
 Section 3(40) of ERISA.

           "Work Product" shall have the meaning set forth in Section 5.8(b).

      Accounting Terms.  Except as otherwise provided in this Agreement,  all
 accounting terms defined in this Agreement, whether defined in this  Article
 or otherwise, shall be construed in  accordance with GAAP on a  consolidated
 basis.

      Articles, Sections,  Exhibits and  Schedules.   Except as  specifically
 stated otherwise, references to  Articles, Sections, Exhibits and  Schedules
 refer to the Articles, Sections, Exhibits and Schedules of this Agreement.

      Attorneys'  Fees.    Whenever  this  Agreement  refers  to  a  Person's
 "attorneys' fees and expenses," such reference  also shall include any  fees
 and expenses of accountants, experts, investigators, and other  professional
 advisors whose  services  such  Person's attorney  considered  advisable  in
 connection with the prosecution or defense of the particular matter.

      Breach.  The term "breach" with  respect to any contract or  instrument
 means any  breach  or violation  of,  or  default under,  such  contract  or
 instrument,  any  conflict  with  another  contract  or  instrument  or  any
 emergence of a  right of  another party to  such contract  or instrument  to
 accelerate,  cancel,  modify  or  terminate  such  contract  or  instrument,
 including any such breach, violation, default, conflict, or right that  will
 arise after notice or lapse of time.

      Drafting.  Neither this Agreement nor  any provision set forth in  this
 Agreement shall be interpreted in favor of or against any Party because such
 Party or its  legal counsel drafted  this Agreement or  such provision.   No
 prior draft of this Agreement or  any provision set forth in this  Agreement
 shall be used when interpreting this Agreement or its provisions.

      Headings.  Article and Section headings are used in this Agreement only
 as a  matter  of  convenience  and  shall  not  have  any  effect  upon  the
 construction or interpretation of this Agreement.

      Include.  The term  "include" or any derivative  of such term does  not
 mean that the items following such term are the only types of such items.

      Or.  The term  "or" shall not  be interpreted as  excluding any of  the
 items described.

      Plural and Singular Words.  Whenever the plural form of a word is  used
 in this Agreement, that word shall  include the singular form of that  word.
 Whenever the singular form of  a word is used  in this Agreement, that  word
 shall include the plural form of that word.

      Predecessors.   Any  of  the  Seller'  representations  and  warranties
 concerning any Claim against the Company, any liability or obligation of the
 Company, or any  violation of Law  by the Company  shall include any  Claims
 with respect to each  predecessor of the Company,  including all direct  and
 indirect predecessors of any such predecessor.

      Pronouns.  Whenever a  pronoun of a particular  gender is used in  this
 Agreement, if appropriate that pronoun also shall refer to the other  gender
 and the neuter.   Whenever a neuter  pronoun is used  in this Agreement,  if
 appropriate that  pronoun also  shall refer  to the  masculine and  feminine
 gender.

      Representations  and  Warranties.    The  Seller'  representations  and
 warranties  under  this  Agreement   shall  mean  the  representations   and
 warranties set forth  in Article III  and the reaffirmation  of the  Seller'
 representations and warranties in certificates delivered pursuant to Article
 II.  Purchaser's representations and  warranties under this Agreement  shall
 mean the representations  and warranties  set forth  in Article  IV and  the
 reaffirmation of those  representations and warranties  in the  certificates
 delivered pursuant to Article II.

      Statutes.  Any reference to Law  or any specific statute shall  include
 any changes to such law or statute after the Signing Date, any successor law
 or statute, and  any regulations  and rules  promulgated under  such law  or
 statute and  any successor  law or  statute, whether  promulgated before  or
 after the Signing Date.

<PAGE>

                                  EXHIBIT A

                            EMPLOYMENT AGREEMENT
                            --------------------

      This EMPLOYMENT AGREEMENT  (the "Agreement") is  made effective as  the
 _____ day of __________, 2006 (the "Effective Date"), by and among AEROSPACE
 HOLDINGS, LLC, a Texas limited  liability company (the "Company"),  HALLMARK
 FINANCIAL SERVICES, INC., a Nevada corporation (the "Parent"), and CURTIS R.
 DONNELL, an individual (the "Employee").

                                  Recitals:
                                  ---------

      A.   The Company, directly and through subsidiaries, develops,  markets
 and services property and casualty insurance  with a particular emphasis  on
 general aviation risks.

      B.   The Company is a wholly-owned subsidiary of the Parent.

      C.   The Company desires to employ the  Employee pursuant to the  terms
 of this Agreement, and the Employee desires to accept such employment.

      NOW, THEREFORE, in consideration of  the mutual covenants and  promises
 contained herein, the parties agree as follows:

                                 Agreement:
                                 ----------

      1.   Appointment and Duties.  The Company  employs the Employee on  the
 terms and  conditions  set  forth herein,  and  the  Employee  accepts  such
 employment.  The Employee shall initially serve as President of the Company,
 and shall perform all  duties and functions  reasonably appurtenant to  such
 position and  as  directed  by  the Chief  Executive  Officer  or  Board  of
 Directors of the  Parent.  The  Parent, acting through  its Chief  Executive
 Officer or Board of Directors, may from time to time redefine the title  and
 duties of the Employee in furtherance of  the business of the Company.   The
 Employee shall perform his duties in accordance with, and shall at all times
 strictly adhere to, all  rules, regulations and policies  as may be  adopted
 from time to time by the Company.

      2.   Full Time Employment.  The Employee  agrees that, during the  term
 of his employment  by the  Company, he will  devote his  full working  time,
 attention and  energies to  the diligent  performance of  his duties  as  an
 employee of the Company.  The Employee shall not, without the prior  written
 consent of the Company, directly or indirectly, at any time during the  term
 of his employment with  the Company:  (a)  accept employment with or  render
 services of  a business,  professional or  commercial  nature to  any  other
 individual,  corporation,  partnership,  governmental  authority  or   other
 entity; (b) engage in  any business venture or  business activity which  the
 Company may in good faith consider to be competitive with or adverse to  the
 business of the  Company, whether  alone, as a  partner, or  as an  officer,
 director, employee or shareholder or otherwise (except that the ownership of
 not more than  one per cent  of the stock  or other equity  interest of  any
 publicly traded corporation or other entity shall not be deemed a  violation
 hereof); or (c) engage in any venture  or activity which the Company may  in
 good faith consider to interfere with  Employee's performance of his  duties
 hereunder.

      3.   Compensation.  All compensation shall  be payable to the  Employee
 in accordance with the  Company's customary payroll  practices and shall  be
 subject to withholding for federal and  state income taxes, social  security
 payments and similar deductions, as required by applicable law.

           a.   Salary.  The Employee shall  initially receive a base  salary
      of $200,000 per year.  Such  salary shall be reviewed annually and  may
      be increased, but not decreased, in the sole discretion of the Board of
      Directors of the Parent.

           b.   Bonus.  The Employee shall be entitled to an annual bonus  of
      not less than  $50,000 payable  on or  before each  anniversary of  the
      Effective Date  during the  term hereof  and  conditioned only  on  the
      Employee's  continued  employment  with   the  Company  on  each   such
      anniversary date.

      4.  Other Programs and Benefits.   The Employee  shall be entitled  to
 participate  in  other  programs  and  benefits  provided  by  the   Company
 (including, without  limitation, group  insurance plans  and profit  sharing
 plans) to  the same  extent  as other  employees  of the  Company  similarly
 situated.

      5.  Term.  Unless otherwise terminated  in accordance with  Section  6,
 the  Employee's employment  under  this  Agreement  shall  commence  on  the
 Effective Date  and  shall  continue  until  the  third  anniversary of  the
 Effective Date  (the "Initial  Term"), and  thereafter at  the  will  of the
 parties.  Upon the termination of the Employee's employment for any  reason,
 the Employee will be  entitled to receive  all accrued compensation  through
 the date of termination.

      6.  Termination  and  Severance.    The   employment  of  the  Employee
 hereunder may be  terminated by  the Company at  any time,  with or  without
 Cause (as  defined below).   In  the  event the  employment of  Employee  is
 terminated by  the Company  without Cause,  the Employee  shall continue  to
 receive an amount equal to his base salary at the time of termination for  a
 period of time following the date of termination equal to the lesser of  (i)
 12 months,  or  (ii) the  remainder  of the  Initial  Term.   The  severance
 payments provided herein are in lieu of any and all other benefits or claims
 which the Employee might assert against the Company, and may be  conditioned
 upon the Employee's execution of a full and complete release of the  Company
 from any and all  liabilities arising in connection  with his employment  by
 the Company or the  termination thereof.  Such  severance payments shall  be
 made to  the Employee  in accordance  with the  Company's customary  payroll
 practices and shall be subject to  withholding for federal and state  income
 taxes, social  security  payments and  similar  deductions, as  required  by
 applicable law.  For purposes of  this Agreement, "Cause" shall mean any  of
 the following, as  determined in  the good faith  judgment of  the Board  of
 Directors of the Parent: (i) commission of a crime (other than minor traffic
 violations); (ii) breach  of any of  the terms of  this Agreement; or  (iii)
 insubordination, dishonesty  or neglect  in the  performance of  the  duties
 assigned to Employee hereunder.

      7.  Non-Disclosure;  Non-Competition;  Non-Solicitation.   The  Company
 covenants and agrees that it will  provide to the Employee all  Confidential
 Information (as defined below) of the Company reasonably necessary to permit
 the Employee  to fulfill  his duties  and responsibilities  hereunder.   The
 Employee acknowledges  that,  as a  consequence  of his  employment  by  the
 Company, the Employee will be furnished and have access to substantially all
 Confidential Information of the Company.  The Employee further  acknowledges
 that (i) any public disclosure of the Confidential Information will have  an
 adverse effect on the Company and its business, (ii) the Company will suffer
 irreparable injury if the Employee breaches any of the terms of this Section
 7, (iii) the Company will be at a substantial competitive disadvantage if it
 fails to  acquire  and  maintain exclusive  ownership  of  the  Confidential
 Information or the Employee fails to abide by the restrictions provided  for
 in this Section 7,  (iv) the scope of  the protective restrictions  provided
 for in this Section 7 are reasonable when taking into account the Employee's
 access to Confidential Information and  the importance of such  Confidential
 Information to the Company, (v) the compensation being paid to the  Employee
 pursuant to this Agreement  and the post-employment  rights of the  Employee
 hereunder are sufficient inducement for the  Employee to agree to the  terms
 hereof, (vi) the provisions of this  Section 7 are reasonable and  necessary
 to protect  the business  of the  Company, to  prevent the  improper use  or
 disclosure of the Confidential Information and  to provide the Company  with
 exclusive ownership  of all  such Confidential  Information, and  (vii)  the
 terms of this Section 7 preclude  the Employee from engaging in the  conduct
 of the business of the Company for a reasonable period.

           a.   Non-Disclosure Agreement.  Employee  agrees that he will  not
      (i) disclose  to  any  person,  either  directly  or  indirectly,   any
      Confidential Information, unless  and solely  to the  extent that  such
      Confidential Information is required to be disclosed by law or pursuant
      to a final judicial  order or decree, (ii) use  for his own account  or
      use, cause, facilitate  or allow any  third party  to use  Confidential
      Information in any way, or (iii) remove any Confidential Information or
      any copy,  summary  or compilation  of  any kind  of  any  Confidential
      Information from the  premises of the  Company or the  premises of  any
      Company's customers.

           b.   Work Product.    All  records  and  documents  embodying  any
      Confidential Information or pertaining to the existing or  contemplated
      scope  of  the  Company's  business,  whether  conceived,  prepared  or
      developed by the Employee,  the Company or  otherwise, either alone  or
      with others  ("Work  Product"),  shall be  the  sole  property  of  the
      Company.

           c.   Return of Materials.  Upon termination  of his employment for
      any reason,  the Employee  shall promptly  deliver to  the Company  all
      materials in any medium  containing, referring to  or derived  from any
      Confidential Information or Work Product of the Company, together  with
      all  other  manuals,   letters,  notes,  reports,   data,  tables   and
      calculations which are the  property of the Company,  which are  in the
      Employee's possession or under his control.

           d.   Non-Competition Agreement.  The Employee covenants and agrees
      that, during the term of his employment by the Company and for a period
      of two (2) years following the  termination of his employment with  the
      Company for any reason, the Employee will not, directly or  indirectly,
      (i) own, engage in, manage, operate,  join, control, or participate  in
      the ownership, management, operation, or control of, or be connected as
      a stockholder,  director,  officer,  employee,  agent,  partner,  joint
      venturer,  member,  beneficiary,  or  otherwise  with,  any  "Competing
      Business" (defined  below)  anywhere in  the  "Restricted  Territories"
      (defined below); (ii) induce any customers of the Company to  patronize
      any Competing Business; (iii) solicit or accept any Competing  Business
      from any customer of the Company; (iv) request or advise any  customers
      of the Company to withdraw, curtail or cancel such customer's  business
      with the  Company;  or  (v) disclose  to  any  other  person,  firm  or
      corporation engaged in any Competing Business the names or addresses of
      any of the customers of the  Company.  For purposes of this  Agreement,
      the term  "Competing  Business" is  defined  to mean  any  activity  or
      business that is or would be competitive with the business conducted by
      the Company at  the time of  termination of  the Employee's  employment
      with the Company.  The term "Restricted Territories" is defined to mean
      the United States of America.

           e.   Non-Solicitation Agreement.   For a period  of two (2)  years
      following the termination of  his employment with  the Company for  any
      reason, the Employee will not, either on his own behalf or on behalf of
      any Competing Business, directly or  indirectly (i) solicit or  induce,
      or in any manner attempt to  solicit or induce any person employed  by,
      or an agent of,  the Company to terminate  such person's employment  or
      agency, as the case may be, with the Company, or (ii) solicit,  divert,
      or attempt to solicit or divert,  or otherwise accept as a supplier  or
      customer,  any  person  which  sells  any  products  and  services  of,
      furnishes products or  services to, or  receives products and  services
      from the Company,  nor will  the Employee  attempt to  induce any  such
      supplier or customer  to cease being  (or any  prospective supplier  or
      customer not to become) a supplier or customer of the Company.

           f.   Modification of Restrictions.  The Employee agrees that if an
      arbitrator or a  court of  competent jurisdiction  determines that  the
      length of time or any other restriction, or portion thereof, set  forth
      in  this  Section  7  is  overly  restrictive  and  unenforceable,  the
      arbitrator or court shall reduce or  modify such restrictions to  those
      which it deems reasonable and enforceable under the circumstances,  and
      as  so  reduced  or  modified,  the  parties  hereto  agree  that   the
      restrictions of this Section 7 shall  remain in full force and  effect.
      The Employee further agrees that if an arbitrator or court of competent
      jurisdiction determines that any provision of this Section 7 is invalid
      or against public policy,  the remaining provisions  of this Section  7
      and the remainder of this Agreement shall not be affected thereby,  and
      shall remain in full force and effect.

           g.   Injunctive Relief.  In the  event of any pending,  threatened
      or actual breach of any of the covenants or provisions of this  Section
      7, as determined by an arbitrator or a court of competent jurisdiction,
      it is understood and agreed by the Employee that the remedy at law  for
      a breach of any of the covenants or provisions of this Section 7 may be
      inadequate  and,  therefore,  the  Company  shall  be  entitled  to   a
      restraining order  or  injunctive  relief  in  addition  to  any  other
      remedies at law  and in  equity, as determined  by an  arbitrator or  a
      court of competent jurisdiction.  The Employee waives any bond, surety,
      or other security that might be required of the Company as a  condition
      of any such restraining order or injunctive relief.

           h.   Confidential  Information  Defined.  For  purposes  of   this
      Agreement,   "Confidential   Information"    means   any    proprietary
      information, and any information which the Company reasonably considers
      to be  proprietary,  pertaining  to  the  Company's  past,  present  or
      prospective business secrets, methods or policies, earnings,  finances,
      security holders, lenders, key employees, nature of services  performed
      by sales  personnel,  procedures, standards  and  methods,  information
      relating to arrangements with suppliers, the identity and  requirements
      of  arrangements  with  customers,  all  policyholder  information   of
      policyholders,  the  type,  volume  or  profitability  of  services  or
      products for customers, drawings, records, reports, documents, manuals,
      techniques, ratings, information, data,  statistics, trade secrets  and
      all other information of any kind or character relating to the Company,
      whether or not reduced to writing.

           i.   Affiliates.  Any reference to the  Company in this Section  7
      shall be deemed  to include the  Company, its  parent corporation,  its
      subsidiaries and any other entity controlled by or under common control
      with such parent or subsidiaries.

      8.  Applicable Law and Venue.   THIS AGREEMENT  SHALL  BE CONSTRUED  IN
 ACCORDANCE WITH THE  LAWS OF THE  STATE OF TEXAS.   ALL  OBLIGATIONS OF  THE
 PARTIES CREATED HEREUNDER ARE DEEMED  PERFORMABLE IN TARRANT COUNTY,  TEXAS,
 AND ANY ACTION TO ENFORCE OR CONSTRUE  THE TERMS OF THIS AGREEMENT SHALL  BE
 BROUGHT IN A  STATE OR FEDERAL  COURT OF COMPETENT  JURISDICTION IN  TARRANT
 COUNTY, TEXAS.

      9.  Attorney  Fees.  If  any action at law  or in equity, including  an
 action for  injunction  or declaratory  relief,  is brought  to  enforce  or
 interpret the provisions of this Agreement,  each party shall pay their  own
 legal fees and all of their costs and expenses of litigation.

      10.  Non-Waiver.  The failure by the Company to complain of any act  or
 omission on  the part  of the  Employee, no  matter how  long the  same  may
 continue, shall not be deemed to  be a waiver by the  Company of any of  its
 rights under  this  Agreement.   The  waiver by  the  Company at  any  time,
 expressed or implied, of  any breach or attempted  breach of this  Agreement
 shall not  be deemed  a waiver  or a  consent to  any subsequent  breach  or
 attempted breach  of the  same or  any other  type.   If any  action by  the
 Employee shall require the consent or approval of the Company, such  consent
 to or approval of the Company to such  action on any one occasion shall  not
 be deemed a consent to or  approval of any other action  on the same or  any
 subsequent occasion.

      11.  Provisions Severable.    Should  any term  or  provision  of  this
 Agreement for any reason be held to be or declared illegal, invalid, void or
 unenforceable either in  its entirety or  in a  particular application,  the
 remainder of  this Agreement  shall nonetheless  remain  in full  force  and
 effect and,  if the  subject, term  or provision  is deemed  to be  illegal,
 invalid,  void  or   unenforceable  only  with   respect  to  a   particular
 application, such term or  provision shall remain in  full force and  effect
 with respect to all other applications.  In the event that any of the  terms
 or provisions of  this Agreement shall  be held to  be or declared  illegal,
 invalid, void or unenforceable solely by  virtue of the fact that such  term
 or provision exceeds the permissible bounds  of applicable law with  respect
 to its scope or duration, this  Agreement shall be deemed amended,  modified
 and reformed to the extent necessary to reduce the scope or duration of such
 term or provision to that permissible under applicable law, and the  parties
 request that  any  court  examining such  issue  employ  great  latitude  in
 reforming this Agreement so  as to make this  Agreement, as reformed,  valid
 and enforceable.

      12.  Entire  Agreement.     This  Agreement   constitutes  the   entire
 understanding of  the  parties  and supersede  all  prior  understanding  or
 agreements, whether written or oral, between the parties with respect to the
 subject matter of this Agreement.  Except as provided herein, no  amendment,
 modification or alteration of the terms  of this Agreement shall be  binding
 unless in  writing, dated  subsequent to  the date  of this  Agreement,  and
 executed by all parties hereto.

      13.  Binding Effect and  Assignment.  Each  and all  of the  covenants,
 terms and provisions contained herein shall be binding upon and inure to the
 benefit of the  respective successors, heirs,  and legal representatives  of
 the Company and the Employee.  This Agreement may not be assigned by  either
 party without the prior written consent of the other party.

      14.  Notice.   All notices,  requests, demands or other  communications
 required or permitted  to be  given or made  under this  Agreement shall  be
 deemed to have been duly given immediately upon personal delivery or mailing
 by first class, certified mail, postage  prepaid.  Any party may change  the
 address to which notices, requests, demands or other communications to  such
 party shall be mailed or sent by giving  notice to the other parties in  the
 manner provided herein.  The addresses  of the parties for purposes of  this
 Agreement are as set forth on the signature page hereof.

      15.  Headings.  No heading or caption contained in this Agreement shall
 be considered in interpreting any of its terms or provisions.

      16.  Execution in Counterparts.  This  Agreement and any amendment  may
 be executed in any  number of counterparts, either  by the parties or  their
 duly authorized attorney-in-fact, with the same effect as if all parties had
 signed the same document.

      IN WITNESS  WHEREOF, the  Company and  the  Employee have  caused  this
 Agreement  to  be  executed  to  be  effective  as  of  the  Effective  Date
 hereinabove set forth.

                               COMPANY:
                               --------
                               AEROSPACE HOLDINGS, LLC

                               By:
                                   ----------------------------------------
                                   Mark E. Schwarz, Chairman

                               Notice Address:
                               ---------------
                               777 W. Main Street
                               Suite 1000
                               Fort Worth, Texas  76102
                               Attn.:  Chairman

                               PARENT:
                               -------
                               HALLMARK FINANCIAL SERVICES, INC.

                               By:
                                   ----------------------------------------
                                   Mark E. Schwarz, Chief Executive Officer

                               Notice Address:
                               ---------------
                               777 W. Main Street
                               Suite 1000
                               Fort Worth, Texas  76102
                               Attn.:  Chief Executive Officer

                               EMPLOYEE:
                               ---------

                               --------------------------------------------
                               Curtis R. Donnell

                               Notice Address:
                               ---------------
                               16815 Village Lane
                               Dallas, Texas  75248<PAGE>
                                                                     Exhibit 4.1

[FACE OF CERTIFICATE]

Number

SP

COMMON STOCK

[LOGO]

SOMAXON PHARMACEUTICALS, INC.

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

Shares

SEE REVERSE FOR STATEMENTS RELATING TO RIGHTS, PREFERENCES, PRIVILEGES AND
RESTRICTIONS, IF ANY

CUSIP 834453 10 2

THIS CERTIFIES THAT

is the record holder of

FULLY PAID AND NONASSESSABLE SHARES OF THE COMMON STOCK, $.0001 PAR VALUE PER
SHARE, OF

SOMAXON PHARMACEUTICALS, INC.

transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid unless countersigned and registered by
the Transfer Agent and Registrar.

WITNESS the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.

Dated:

/sig/

VICE PRESIDENT & CFO

[SEAL]

/sig/

PRESIDENT & CEO

COUNTERSIGNED AND REGISTERED:

AMERICAN STOCK TRANSFER & TRUST COMPANY

TRANSFER AGENT AND REGISTRAR

BY

AUTHORIZED SIGNATURE

[REVERSE OF CERTIFICATE]

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common

TEN ENT - as tenants by the entireties

JT TEN - as joint tenants with right of survivorship and not as tenants in
common

UNIF GIFT MIN ACT - .....(Cust)..... Custodian .....(Minor)..... under
Uniform Gifts to Minors Act .....(State).....

UNIF TRF MIN ACT - .....(Cust)..... Custodian (until age .....)
......(Minor)..... under Uniform Transfers to Minors Act .....(State).....

Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED, hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

Shares of the capital stock represented by the within Certificate, and do
hereby irrevocably constitute and appoint

Attorney to transfer the said stock on the books of the within named Corporation
with full power of substitution in the premises.
<PAGE>
Dated

X

X

NOTICE:

THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER.

Signature(s) Guaranteed

By

THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE
17Ad-15.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00094-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00094-of-00352.parquet"}]]