Document:

ESCROW  AGREEMENT, dated as of April 1, 2003, between David M. Loev,
Attorney at Law, as Escrow Agent, and International Test Systems, Inc., as the
issuer.

                              PRELIMINARY STATEMENT

         The Company is making a public offering of its common stock and
warrants pursuant to a registration statement on Form SB-1 filed with the
Securities and Exchange Commission.  The Company wishes the Escrow Agent to act
as escrow agent and the Escrow Agent wishes so to act in connection with the
Offering, on the terms and conditions set forth below.

         Accordingly, the parties hereto agree as follows:

1.     Definitions.
       ------------

The following capitalized terms have the indicated meanings when used in this
Agreement.

"Business Day" shall mean a day on which banks in the City of Houston, Texas are
not authorized to close.

"Company" shall mean International Test Systems, Inc., a Delaware corporation.

"Escrow Account" shall mean the Escrow Account designated by David M. Loev at
First Bank & Trust in Houston, Texas.

"Escrow Agent" shall mean David M. Loev, Attorney at Law, in its capacity as
Escrow Agent hereunder.

"Escrow Interest Share" shall mean, with respect to any subscriber, such
subscriber's  pro rata share of the excess, if any, of (a) the total interest
earned on funds held in the Escrow Accounts and invested by the Escrow Agent in
accordance with section 6 hereof less (b) all amounts of compensation and
reimbursement which the Escrow Agent is entitled to receive in accordance with
section 9 hereof. A subscriber's pro rata share, as that term is used in the
preceding sentence, shall be based on the proportion of the total interest
earned on funds held in the Escrow  Accounts represented  by the interest earned
on funds deposited in the Escrow Accounts on behalf of such subscriber.

"Offering" shall mean the offering by the Company of the Common Stock and
Warrants.

"Offering Termination Date" shall mean the earlier of (1) a date as may be
determined by the Company and (2) one year after the effective date of the
offering or, if the Company determines to extend the Offering, to a date not
later than two years after effectiveness.

2.     Appointment of the Escrow Agent.
       --------------------------------

The Company hereby appoints the Escrow Agent as escrow agent, and the Escrow
Agent hereby accepts such appointment, in accordance with the terms and
conditions set forth herein.

<PAGE>

3.     Deposit of funds into the Escrow Accounts.
       ------------------------------------------

3.1.     The Escrow Agent shall establish an escrow account for the funds
deposited with it by the Escrow Agent pursuant to section 3.2 hereof

3.2.     Funds shall be received by the Escrow Agent from checks received by the
Escrow Agent or the Company and shall promptly be deposited by the Escrow Agent
in the Escrow Account and held by the Escrow Agent in escrow in accordance with
the terms of this Agreement.

3.3.     The Escrow Agent shall treat all subscriber information provided to it
by each of the Company as its confidential proprietary information, and in no
event will the Escrow Agent disclose such information other than as contemplated
by this Agreement.

4.     Collection procedure.
       ---------------------

If any check deposited for collection is returned unpaid to the Escrow Agent,
the Escrow Agent shall promptly so notify, and promptly return such check to,
the Company.

5.     Disbursement of funds from the Escrow Accounts.
       -----------------------------------------------

5.1.     If a subscriber's subscription is rejected by a Placement Agent and/or
the Company in whole or in part, if all or any portion of the deposit made on
behalf of any subscriber remains on deposit after the Offering Termination Date,
or the offering is terminated, the Company shall deliver to the Escrow Agent a
notice (a "Refund Notice") identifying such rejected subscriber or the
subscriber whose funds remain on deposit following the Offering Termination
Date, as the case may be. By noon of the Business Day following the later of the
day on which the Escrow Agent has received the Refund Notice or the day on which
such subscriber's funds are collected by the Escrow Agent, the Escrow Agent
shall return such subscriber's cash deposit, without interest thereon, to the
subscriber, and shall, as soon as practicable, mail (by first class mail) to the
subscriber at such subscriber's address as furnished to the Escrow Agent by the
Company less any applicable withholding taxes or fees.

5.2.     Prior to the disbursement of funds to the Company by the Escrow Agent,
the Company shall deliver to the Escrow Agent a notice (a "Closing Notice and
Payment Instruction") containing the following information:

     With respect to each such subscriber:

(a)  The  name  and  address  of  such  subscriber,
(b)  The  social  security  or tax identification number of such subscriber and,
(c)  The  number  of  securities  to  be  purchased  by  such  subscriber,
(d)  The  amount of funds (including the subscriber's notes) on deposit with the
     Escrow  Agent  to be delivered to the Company at such closing in payment or
     partial  payment  of  the  purchase  price  of  such  securities.
(e)  Payment  instructions (including amount, payee and method of payment (i.e.,
     bank  cashier's  check or wire transfer)) with respect to all amounts to be
     disbursed  from  escrow  at such closing in respect of subscriptions, which
     payment  instructions must include the written or facsimile signature of an
     officer  of  the  Company  approving  such  payment  instructions.
(f)  Within  one  Business  Day  after  receipt  of a Closing Notice and Payment
     Instruction,  the  Escrow Agent shall disburse funds in accordance with the
     payment  instructions  contained  in  the  Closing  Notice  and  Payment
     Instruction  provided  by  the  Company.

<PAGE>

6.     Exculpation and indemnification of the Escrow Agent.
       ----------------------------------------------------

6.1.     The Escrow Agent shall have no duties or responsibilities other than
those expressly set forth herein.  The Escrow Agent shall have no duty to
enforce any obligation of any person to make any payment or delivery,  or to
direct or cause any payment or delivery to be made, or to enforce any
obligation of any person to perform any other act. The Escrow Agent shall be
under no liability to the other parties hereto or to anyone else by reason of
any failure on the part of any party hereto or any maker, guarantor, endorser or
other signatory of any document or any other person to perform such person's
obligations under any such document.  Except for amendments to this Agreement
referred to below and except for instructions given to the Escrow Agent by the
other parties hereto relating to the escrow deposits under this Agreement, the
Escrow Agent shall not be obligated to recognize any Agreement between any or
all of the persons referred to herein, notwithstanding that references thereto
may be made herein and whether or not it has knowledge thereof.

6.2.     The Escrow Agent shall not be liable to the other parties hereto or to
anyone else for any action taken or omitted by it, or any action  suffered by it
to be taken or omitted, in good faith and in the  exercise of its own best
judgment, unless  such  action or omission  shall constitute gross negligence.
The Escrow Agent may rely conclusively and shall be protected in acting upon any
order, notice, demand, certificate, opinion or advice of counsel (including
counsel chosen by the Escrow Agent), statement, instrument, report or other
paper or document (not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and acceptability of
any information therein contained) which is believed by the Escrow Agent to be
genuine and to be signed or presented by the proper person or persons.  The
Escrow Agent shall not be bound by any notice or demand, or any waiver,
modification, termination or rescission of this Agreement or any of the terms
hereof, unless evidenced by a writing delivered to the escrow Agent signed by
the proper party or parties and, if the duties or rights of the Escrow Agent are
affected, unless it shall give its prior written consent thereto.

6.3.     The Escrow Agent shall not be responsible for the sufficiency or
accuracy of the form of, or the execution, validity, value or genuineness of,
any document or property received, held or delivered by it hereunder, or of any
signature or endorsement thereon, or for any lack of endorsement thereon, or for
any description therein, nor shall the Escrow Agent be responsible or liable to
the other parties hereto or to anyone else in any respect on account of the
identity, authority or rights of the persons executing or  delivering  or
purporting to execute or deliver any document or property or this Agreement.
The Escrow Agent shall have no responsibility with respect to the use or
application of any funds or other property paid or delivered by the Escrow Agent
pursuant to the provisions hereof.  The Escrow Agent shall not be liable to the
other parties hereto or to anyone else for any loss which may be incurred by
reason of any investment made in accordance with section 6 hereof of any monies
which it holds hereunder.

<PAGE>

6.4.     To the extent that the Escrow Agent becomes liable for the payment of
withholding taxes in respect of income derived from the investment of funds held
hereunder, the Escrow Agent may pay such withholding taxes. The Escrow Agent may
withhold from any payment of monies held by it hereunder representing interest
income on funds held in the Escrow Accounts (but not from payment of any monies
held by it hereunder  representing deposits made on behalf of subscribers) such
amount as the Escrow Agent estimates to be  sufficient  to provide for the
payment of withholding taxes required to be withheld and paid by it, and may use
the sum  withheld for that  purpose.  The   Escrow Agent shall be indemnified
and held harmless by the Company against any liability for taxes and for any
penalties or interest in respect of taxes, on such investment income or payments
in the manner provided in section 8.5 hereof.  The Escrow Agent shall keep
adequate records of all amounts so withheld and paid as withholding taxes and
shall report such information to the Placement Agents and the affected
subscribers.

6.5.     The Escrow Agent shall be indemnified and held harmless by the Company
from and against any and all expenses, including counsel fees and disbursements,
or loss suffered by the Escrow Agent in connection with any action,  suit or
other proceeding involving  any  claim, or in connection  with  any  claim or
demand, which in any way, directly or indirectly,  arises out of or relates to
this  Agreement, the services of the Escrow Agent hereunder, the monies  or
other  property held by it hereunder or any income earned from investment of
such monies.  Promptly after the receipt by the Escrow  Agent of notice of any
demand or claim or the commencement of any action, suit or proceeding, the
Escrow Agent shall, if a claim in respect thereof is to be made against the
Company, notify the Company thereof in  writing;  but the failure by the Escrow
Agent to give  such notice shall not  relieve  the  Company  from any liability
which such  party may have to the  Escrow  Agent hereunder to the extent that
the  position of the Company is not materially prejudiced thereby.  Under no
circumstances may the Escrow Agent retain or hold for any  time in a manner
inconsistent with the requirements of section 7 hereof any amount of monies or
property to indemnify  itself for any such loss or expense. For the purposes
hereof, the term "expense or loss" shall include all amounts paid or payable to
satisfy any claim, demand or liability, or in settlement of any claim, demand,
action,  suit or proceeding settled with the express written consent of the
Escrow Agent and the Company, and all costs and  expenses, including, but not
limited to, counsel fees and disbursements, paid or incurred in investigating or
defending against any such claim, demand, action, suit or proceeding.

7.     Compensation of the Escrow Agent.
       ---------------------------------

7.1.     The Escrow Agent shall be entitled to compensation in the amount of
$100.00 for services rendered by it hereunder.  The Escrow Agent shall also be
entitled to reimbursement for all reasonable expenses paid or   incurred by it
in the administration of its duties  hereunder, including, but not limited to,
all reasonable counsel, advisors' and agents' fees and disbursements.

7.2.     All amounts to which the Escrow Agent shall be entitled  under section
9.1 hereof as compensation or reimbursement shall be paid first out of funds on
deposit in the Escrow Accounts and then, to  the  extent  any  such  amounts
are  unpaid  after application of all such interest income,  by the Company.
The Escrow  Agent  shall be  entitled to pay to itself out of such funds prior
to the disbursement of funds to the Company.  Concurrently with making such
payment, the Escrow Agent shall provide the Company with a statement showing
such expenses and the calculation thereof in reasonable detail.

8.     Further assurances.
       -------------------

From time to time on and after the date hereof, the other parties  hereto shall
deliver or cause to be delivered to the Escrow Agent such further documents and
instruments and shall do and cause to be done such further acts as the Escrow
Agent shall reasonably request (it being understood  that the  Escrow Agent
shall  have no obligation to make any such request) to carry out more
effectively the provisions  and  purposes of this Agreement, to evidence
compliance herewith or to assure itself that it is protected in acting
hereunder.

9.     Termination of Agreement and resignation of the Escrow Agent.
       -------------------------------------------------------------

9.1.     The agency established by this Agreement shall terminate on the final
disposition in accordance with this Agreement of the  monies and property held
in escrow hereunder, provided that the rights and obligations of the Escrow
Agent and each of the Placement Agents and the Company under sections 8, 9, 10
and 12 hereof shall survive the termination of such agency.

9.2.     The Escrow Agent may resign at any time and be discharged from its
duties as Escrow Agent hereunder by giving the other parties  hereto at least 30
days' notice thereof.  As soon as practicable after its resignation, the Escrow
Agent shall turn over to a successor Escrow Agent appointed by the  Placement
Agents all  monies and property held hereunder (less such amount as the agent is
entitled to retain pursuant to section 9.2 hereof) upon presentation of the
document appointing the new Escrow Agent and its acceptance thereof.  If no new
agent is so appointed within the 60-day period following such notice of
resignation, the Escrow Agent may deposit the aforesaid monies and property with
any court it deems appropriate.

10.     Consents to jurisdiction and service of process.
        ------------------------------------------------

Each of the parties hereto hereby irrevocably consents to the jurisdiction of
the courts of the State of Texas and of any Federal court located in such State
in connection with any action, suit or other proceeding arising out of or
relating to this Agreement or any action taken or omitted hereunder, and waives
personal service of any summons, complaint or other process and agrees that the
service thereof may be made by certified or registered mail directed to such
person at such person's address for purposes of notices hereunder.  Should the
person so served fail to appear or answer within the time  prescribed by law,
that person shall be deemed in default and judgment may be entered by the Escrow
Agent against that person for the amount or other relief as demanded in any
summons, complaint or other process so served.

<PAGE>

11.     Notices.
        --------

All notices, requests, demands and other communications provided for herein
shall be in writing, shall be delivered by hand or by first-class mail, shall be
deemed given when received and shall be     addressed to the parties hereto at
their respective addresses listed below or to such other persons or addresses as
the relevant party shall designate as to itself from time to time in writing
delivered in like manner:

if to:   Escrow Agent

         David M. Loev, Attorney at Law
         2777 Allen Parkway
         Suite 1000
         Houston, TX  77019
         Fax: 713-524-4122

if to:   the Company,
         16161 College Oak
         Suite 101
         San Antonio, Texas 78249
         Fax: 210-408-1856

         Attention:  Carey Birmingham

12.     Miscellaneous.
        --------------

12.1.     All amounts referred to herein are expressed in United States Dollars
and all payments by the Escrow Agent shall be made in such dollars.

12.2.     If for any reason the escrow deposit is not received by the Escrow
Agent as contemplated herein, the Company shall reimburse the Escrow Agent for
all reasonable expenses, including reasonable counsel fees and disbursements,
paid or incurred by it in making preparations for  providing the services
contemplated hereby.

12.3.     This Agreement shall be construed without regard to any presumption or
other rule requiring construction against the party causing such  instrument to
be drafted.  The terms hereby", "hereof", "hereto",  "hereunder" and any
similar terms, as used in this  Agreement, refer to this Agreement in its
entirety and not only to the particular portion of this Agreement where the term
is used.   The word "person" shall mean any natural person, partnership,
corporation, government and any other form of business or legal entity. All
words or terms used in this Agreement, regardless of the number or gender in
which they are used, shall be deemed to include any other number and any other
gender as the context may require.  This Agreement shall not be admissible in
evidence to construe the provisions of any prior Agreement. The rule of ejusdem
generis shall not be applicable herein to limit a general statement, which is
followed by or referable to an enumeration of specific matters, to matters
similar to the matters specifically mentioned.

<PAGE>

12.4.     This Agreement and the rights and obligations hereunder of any party
hereto may be assigned by such party only to a successor to such  party's entire
business.  This Agreement shall be binding upon and inure to the benefit of each
party's respective successors and permitted assigns.  No other person shall
acquire or have any rights under or by virtue of this Agreement.  This Agreement
may not be changed orally or modified, amended or supplemented without an
express written Agreement  executed by the Escrow Agent and the other parties
hereto.  This Agreement is intended to be for the sole benefit of the parties
hereto, and (subject to the provisions of this section 12.4) their respective
successors and assigns, and none of the provisions of this Agreement is intended
to be, nor shall any such provision be construed to be, for the benefit of any
third person.

12.5.     This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Texas.  The representations and warranties
contained in this Agreement shall survive the execution and  delivery  hereof
and any investigation made by any party.  The  headings in  this  Agreement are
for purposes of  reference only and shall not limit nor otherwise affect any of
the terms hereof.

12.6.     This Agreement may be executed in several counterparts. Each
counterpart, when so executed and delivered, shall constitute an original
instrument.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

/s/ David M. Loev
------------------------------
David M. Loev, Attorney at Law

International Test Systems

By: /s/ Carey G. Birmingham
------------------------------
Carey G. Birmingham
President and CEO

<PAGE>SYS

SYS 1997 INCENTIVE STOCK OPTION AND RESTRICTED STOCK
PLAN

1.    Purposes of the Plan. The
purposes of the SYS 1997 Incentive Stock Option and Restricted Stock Plan (the
"Plan") are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees and
Consultants of the Company and its Subsidiaries and to promote the success of
the Company's business. Options granted under the Plan may be incentive stock
options (as defined under Section 422 of the Code) or non-statutory stock
options, as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code, as
amended, and the regulations promulgated thereunder. Stock purchase rights may
also be granted under the Plan.

2.    Definitions.
As used herein, the following definitions shall apply:

            (a)   
"Administrator" means the
Board or any of its Committees appointed pursuant to Section 4 of the Plan.

            (b)   
"Board" means the Board of
Directors of the Company.

            (c)   
"Code" means the Internal
Revenue Code of 1986, as amended.

            (d)    "Committee" means a Committee
appointed by the Board of Directors in accordance with Section 4 of the Plan.

            (e)    "Common Stock" means the
Common Stock of the Company.

            (f)     "Company" means SYS, a
California corporation.

            (g)    "Consultant" means any person
who is engaged by the Company or any Parent or Subsidiary to render consulting
or advisory services and is compensated for such services, and any director of
the Company whether compensated for such services or not, provided if and in
the event the Company registers any class of any equity security pursuant to
the Exchange Act, the term Consultant shall thereafter not include directors
who are not compensated for their services or are paid only a director's fee by
the Company.

            (h)   
"Continuous Status as an Employee or Consultant" means that the employee
or consulting relationship with the Company or any Parent or Subsidiary is not
interrupted or terminated. Continuous Status as an Employee or Consultant shall
not be considered interrupted in the case of: (i) any leave of absence approved
by the Company, including sick leave, military leave, or any other personal
leave; provided, however, that for purposes of Incentive Stock Options, no such
leave may exceed ninety (90) days, unless reemployment upon the expiration of
such leave is guaranteed by contract (including certain Company policies) or
statute; provided, further, that on the ninety-first (91st) day of any such
leave (where employment is not guaranteed by contract or statute) the
Optionee's Incentive Stock Option shall cease to be treated as an Incentive
Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option;
or (ii) transfers between locations of the Company or between the Company, its
Parent, its Subsidiaries or its successor.

            (i)    
"Employee" means any person, including officers and directors, employed
by the Company or any Parent or Subsidiary of the Company. The payment of a
director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.

Page 1

            (j)    
"Fair Market Value" means, as of any
date, the value of Common Stock determined as follows:

               
(i)     If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitations the Nasdaq Market of the National Association of Securities
Dealers, Inc. Automated Quotation ("NASDAQ") System, its Fair Market Value
shall be the closing sales price for such stock (or the closing bid, if no
sales were reported, as quoted on such exchange or system for the last market
trading day prior to the time of determination) as reported in The Wall
Street Journal or such other source as the Administrator deems reliable;

               
(ii)    If the Common Stock is quoted on the
NASDAQ System (but not in the Nasdaq National Market thereof) or regularly
quoted by a recognized securities dealer but selling prices are not reported,
its Fair Market Value shall be the mean between the high bid and low asked
priced for the Common Stock on the last market trading day prior to the day of
determination, or

               
(iii)    In
the absence of an established market for the Common Stock, the Fair Market
Value thereof shall be determined in good faith by the Administrator in
accordance with Section 260.140.40, Title 10 of the California Code of
Regulation ("California Code").

            (k)   
"Incentive Stock Option"
means an Option intended to qualify as an incentive stock option within the
meaning of Section 422 of the Code and the regulations promulgated thereunder.

            (l)   
"Nonstatutory
Stock Option" means an Option not intended to qualify as an Incentive Stock
Option. 

            (m)   
"Officer" means a
person who is an officer of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder.

            (n)   
"Option"
means a stock option granted pursuant to the Plan.

            (o)   
"Optioned
Stock" means the Common Stock subject to an Option or a Stock Purchase
Right.

            (p)   
"Optionee"
means an Employee or Consultant who receives an Option or Stock Purchase Right.

            (q)   
"Parent"
means a "parent corporation" whether now or hereafter existing, as
defined in Section 424(e) of the code.

            (r)   
"Plan"
means this 1997 Incentive Stock Plan.

            (s)   
"Restricted.Stock"
means shares of Common Stock acquired pursuant to a grant of a Stock Purchase
Right under Section 11 below.

            (t)   
"Share"
means a share of the Common Stock as adjusted in accordance with Section 12
below.

            (u)   
"Stock
Purchase Right" means the right to purchase Common Stock pursuant to
Section 11 below.

Page 2

            (v)   
"Subsidiary"
means a "subsidiary corporation" whether now or hereafter existing, as defined
in Section 424(f) of the Code.

3.    Stock
Subject to the P1an. Subject to the provisions of Section 12 of the Plan,
the maximum aggregate number of shares which may be issued pursuant to the
exercise of options under the Plan shall not exceed 100,000 common shares for
non-employee directors and consultants, and 300,000 common shares for employees
of the Company and its subsidiaries. The shares may be authorized, but
unissued, or reacquired Common Stock.

       If an Option or Stock
Purchase right should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.

4.    Administration of the
Plan.

            (a)   
Initial Plan Procedure. Prior
to the date, if any, upon which the Company becomes subject to the Exchange
Act, the Plan shall be administered by the Board or a committee appointed by
the Board.

            (b)   
Plan Procedure After the Date. if any. upon Which the Company becomes
Subject to the Exchange Act.

               
(i)    Administration With Respect to Directors and Officers. With respect to
grants of Options or Stock Purchase Rights to Employees who are also officers
or directors of the Company, the Plan shall be administered by (A) the Board if
the Board may administer the Plan in compliance with Rule 16b-3 promulgated
under the Exchange Act or any successor thereto ("Rule 16b-3") with
respect to a plan intended to qualify thereunder as a discretionary plan, or
(B) a committee designated by the Board to administer the Plan, which committee
shall be constituted in such a manner as to permit the Plan to comply with Rule
16b-3 with respect to a plan intended to qualify thereunder as a discretionary
plan.  Once appointed, such Committee
shall continue to serve in its designated capacity until otherwise directed by
the Board.  From time to time the Board
may increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefore, fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by Rule 16b-3 with respect to a plan intended to qualify thereunder
as a discretionary plan.

               
(ii)     Multiple Administrative Bodies. If permitted by Rule 16b-3,
the Plan may be administered by different bodies with respect to directors,
non-directors, officers and Employees who are neither directors nor officers.

               
(iii)    Administration With Respect
to Consultants and Other Employees. With respect to grants of Options or
Stock Purchase rights to Employees or Consultants who are neither directors nor
officers of the Company, the Plan shall be administered by (A) the Board or (B)
a committee designed by the Board, which committee shall be constituted in such
a manner as to satisfy the legal requirements relating to the administration of
incentive stock option plans, if any, of California corporate and securities
laws, of the Code, and of any applicable stock exchange (the "Applicable
Laws"). Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time to time
the Board may increase the size of the Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies, however caused, and remove all members
of the Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.

Page 3

            (c)   
Powers of the Administrator.
Subject to the provisions of the Plan and, in the case of a Committee, the
specific duties delegated by the Board to such Committee, and subject to the
approval of any relevant authorities, including the approval, if required, of
any stock exchange upon which the Common Stock is listed, the Administrator, on
behalf of the Committee, shall have the authority, in its discretion:

               
(i)    to determine the Fair Market Value of
the Common Stock, in accordance with Section 2(k) of the Plan;

               
(ii)    to select the Consultants and Employees
to whom Options and Stock Purchase Rights may from time to time be granted
hereunder,

               
(iii)    to determine whether and to what extent
Options and Stock Purchase Rights or any combination thereof are granted
hereunder;

               
(iv)    to determine the number of shares of
Common Stock to be covered by each such award granted hereunder;

               
(v)    to approve forms of agreement for use
under the Plan;

               
(vi)    to determine the terms and conditions,
not inconsistent with the terms of the Plan, of any award granted hereunder,

               
(vii)    to determine whether and under what
circumstances an Option may be settled in cash under subsection 9(f) instead of
Common Stock;

               
(viii)    to implement
"reload options" as may be specified in an option agreement which reduces the
exercise price of any Option to then current Fair Market Value if the Fair
Market Value of the Common Stock covered by such Option shall have declined
since the date the Option was granted;

               
(ix)    to determine the terms and restrictions
applicable to Stock Purchase Rights and the Restricted Stock purchased by
exercising such Stock Purchase Rights; and

               
(x)    to construe and interpret the terms of
the Plan and awards granted pursuant to the Plan.

            (d)   
Effect
of Administrator's Decision. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all
Optionees and any other holders of any Options or Stock Purchase Rights.

5.    Eligibility.

            (a)   
Nonstatutory
Stock Options and Stock Purchase Rights may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option or Stock Purchase Right
may, if otherwise eligible, be granted additional Options or Stock Purchase
Rights.

Page 4

            (b)   
Each Option shall be designated in the written option agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding
such designations, to the extent that the aggregate Fair Market Value:

               
(i)    of Shares subject to an Optionee's
Incentive Stock Option granted by the Company, any Parent or Subsidiary, which

               
(ii)    Become exercisable for the first
time during any calendar year (under all plans of the Company or any Parent or
Subsidiary)

exceeds $100,000, such excess
Option shall be treated as Nonstatutory Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the time the Option with respect to such
Shares is granted.

            (c)   
The Plan shall not confer upon
any Optionee any right with respect to continuation of employment relationship
with the Company, not shall it interfere in any way with his or her right or
the Company's right to terminate his or her employment relationship at any time,
with or without cause.

            (d)    
Upon
the Company or a successor corporation issuing any class of common equity
securities required to be registered under Section 12 of the Exchange Act or
upon the Plan being assumed by a corporation having a class of common equity
securities required to be registered under Section 12 of the Exchange Act, the
following limitations shall apply to grants of Options and Stock Purchase
Rights to Employees:

               
(i)    The
foregoing limitation shall be adjusted proportionately in connection with any
change in the Company's capitalization as described in Section 12(a).

               
(ii)    If an Option or Stock Purchase Right
is cancelled (other than in connection with a transaction described in Section
12), the cancelled Option or Stock Purchase Right will be counted against the
as limit set forth by the Board of Directors. For this purpose, if the exercise
price of an Option or Stock Purchase Right is reduced, the transaction will be
treated as a cancellation of the Option or Stock Purchase Right and the grant
of a new Option or Stock Purchase Right.

 6.    Term
of Plan. The Plan shall become effective upon the earlier to occur of its
adoption by the Board of Directors and its approval by the shareholders of the
Company, as described in Section 18 of the Plan. It shall continue in effect
for a term of ten (10) years unless sooner terminated under Section 14 of the
Plan.

7.    Term
of Option. The term of each Option shall be the term stated in the Option
Agreement; provided, however, that the term shall be no more than ten (10)
years from the date of grant to an Optionee, and the term of the Option shall
be five (5) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement.

8.    Option
Exercise Price and Consideration.

            (a)   
The
per share exercise price for the Shares to be issued pursuant to exercise of an
Option shall be such price as is determined by the Board, but shall be subject
to the following:

               
(i)    In the case of an
Incentive Stock Option

                   
(A)    granted to an Employee who, at the
time of the grant of such Incentive Stock Option, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise price shall be no
less than 110% of the Fair Market Value per Share on the date of grant.

Page 5

                   
(B)    granted to an Employee other than an Employee described in the preceding
paragraph, the per Share exercise shall be no less than 100% of the Fair Market
Value per Share on the date of grant.

               
(ii)    In
case of a Nonstatutory Stock Option granted to any person, the per Share
exercise shall be no less than the amount stated in the option agreement of the
Fair Market Value per Share on the date of grant

            (b)   
The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method payment,
shall be determined by the Administrator (and, in the case of an Incentive
Stock Option, shall be determined at the time of grant) and may consist
entirely of (l) cash, (2) check, (3) promissory note, (4) other Shares which
(x) in the case of Shares acquired upon exercise of an Option, have been owned
by the Optionee for more than six months on the date of surrender, and (y) have
a Fair Market Value on the date of surrender equal to the aggregate exercise
price of the Shares as to which said Option shall be exercised, (5) delivery of
a properly executed exercise notice together with such other documentation as
the Administrator and the broker, if applicable, shall require to effect an
exercise of the Option and delivery to the Company of the sale or loan proceeds
required to pay the exercise price, or (6) any combination of the foregoing
methods of payment.   In making its
determination as to the type of consideration to accept, the Board shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company.

9.    Exercise
of Option.

            (a)   
Procedure for Exercise Rights as
a Shareholder. Any Option granted hereunder shall be exercisable at such
times and under such conditions as determined by the Board, including performance
criteria with respect to the Company and/or the Optionee, and as shall be
permissible under the terms of the Plan.

                   
An Option may not be exercised for a fraction of a Share.

                    An
Option shall be deemed to be exercised when written notice of such exercise has
been given to the Company in accordance with the terms of the Option by the
person entitled to exercise the Option and full payment for the Shares with
respect to which the Option is exercised has been received by the Company. Full
payment may, as authorized by the Board, consist of any consideration and
method of payment allowable under Section 8(b) of the Plan. Until the issuance
(as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends or any other rights as a
shareholder exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly upon exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 12 of the
Plan. 

                   
Exercise
of an Option in any manner shall result in a decrease in the number of Shares
which thereafter may be available, both for purposes of the Plan and for sale
under the Option, by the number of Shares as to which the Option is exercised.

            (b)   
Termination
of Employment or Consulting Relationship. 
In the event of termination of an Optionee's Continuous Status as an
Employee or Consultant with the Company (but not in the event of an Optionee's
change of status from Employee to Consultant (in which case an Employee's
Incentive Stock Option shall automatically convert to a Nonstatutory Stock
Option on the ninety-first (91st) day following such change of status) or from
Consultant to Employee), such Optionee may, but only within such period of time
as is determined by the Administrator, of at least thirty (30) days, with such
determination in the case of an Incentive Stock Option not exceeding three (3)
months after the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise his or her Option to the extent that Optionee was entitled
to exercise it at the date of such termination. To the extent that Optionee was
entitled to exercise it at the date of such termination. To the extent that
Optionee was not entitled to exercise the Option at the date of such
termination, of it Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.

Page 6

            (c)   
Disability
of Optionee. In the event of termination of an Optionee's consulting
relationship or Continuous Status as an Employee as a result of his or her
disability, Optionee may, but only within six (6) months from the date of such
termination (and in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination; provided,
however, that if such disability is not a "disability" as such term is defined
in Section 22(e)(3) of the Code, in the case of an Incentive Stock Option such
Incentive Stock Option shall automatically convert to a Nonstatutory stock
Option on the day three months and one day following such termination. To the
extent that Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

            (d)   
Death
of Optionee.  In the event of the
death of an Optionee, the Option may be exercised at any time within twelve
(12) months following the date of death (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant), by
the Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent that the Optionee was
entitled to exercise the Option at the date of death.  If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan.  If, after death, the Optionee's estate or a
person who acquired the right to exercise the Option by bequest or inheritance
does not exercise the Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

            (e)   
Rule 16b-3.  Options granted to persons subject to
Section 16(b) of the Exchange Act must comply with Rule 16b-3 and shall contain
such additional conditions or restrictions as may be required thereunder to
quality for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.

            (f)   
Buyout
Provisions.  The Administrator may
at any time offer to buy out for a payment in cash or Shares, an Option
previously granted, based on such terms and conditions as the Administrator
shall establish and communicate to the Optionee at the time that such offer is
made.

10.    Non-Transferability of Option and Stock
Purchase Rights. Options and Stock Purchase Rights may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.

Page 7

11.    Stock Purchase Rights.

            (a)   
Rights to Purchase.  Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing of the terms, conditions and restrictions related to the
offer, including the number of Shares that such person shall be entitled to
purchase, the price to be paid, and the time within which such person must
accept such offer, which shall in no event exceed thirty (30) days from the
date upon which the Administrator made the determination to grant the Stock
Purchase Right.  The offer shall be
accepted by execution of a Restricted Stock purchase agreement in the form
determined by the Administrator. Shares purchased pursuant to the grant of a
Stock Purchase Right shall be referred to herein as "Restricted Stock."

            (b)   
Repurchase
Option.  Unless the Administrator
determines otherwise, the Restricted Stock purchase agreement shall grant the
Company a repurchase option exercisable within 90 days of the voluntary or
involuntary termination of the purchaser's employment with the Company for any
reason (including death or Disability). The purchase price for Shares
repurchase pursuant to the Restricted Stock purchase agreement shall be the
original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall lapse
at such rate as the Administrator may determine, but at a minimum rate of 20%
per year.

            (c)   
Other Provisions. The
Restricted Stock purchase agreement shall contain such other terms, provisions
and conditions not inconsistent with the Plan as may be determined by the
Administrator in its sole discretion. In addition, the provisions of Restricted
Stock purchase agreements need not be the same with respect to each purchaser.

            (d)   
Rights
as a Shareholder. Once the Stock Purchase Right is exercised, the purchaser
shall have the rights equivalent to those of a shareholder, and shall be a
shareholder when his or her purchase is entered upon the records of the duly
authorized transfer agent of the Company. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Stock Purchase Right is exercised, except as provided in Section 12 of the
Plan.

12.    Adjustments
Upon Changes in Capitalization or Merger.

            (a)   
Changes
in Capitalization. Subject to any required action by the shareholders of
the Company, the number of shares of Common Stock covered by each outstanding
Option or Stock Purchase Right, and the number of shares of Common Stock which
have been authorized for issuance under the Plan but as to which no Options or
Stock Purchase Rights have yet been granted or which have been returned to the
Plan upon cancellation or expiration of an Option or Stock Purchase Right, as
well as the price per share of Common Stock covered by each such outstanding
Option or Stock Purchase Right, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option
or Stock Purchase Right.

Page 8

            (b)   
Dissolution or Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, the Board shall notify the Optionee at least
fifteen (15) days prior to such proposed action. To the extent this has not
been previously exercised, the Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.

            (c)   
Merger.  In the event of a merger of the Company with
or into another corporation, the Option or Stock Purchase Right shall be
assumed or an equivalent option or right shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation.  If, in such event, the Option or Stock
Purchase Right is not assumed or substituted, the Option or Stock Purchase
Right shall terminate as of the date of the closing of the merger.  For the purposes of this paragraph, the
Option of Stock Purchase Right shall be considered assumed if, following the
merger, the option or right confers the right to purchase, for each Share of
Optioned Stock subject to the Option or Stock Purchase Right immediately prior
to the merger, the consideration (whether stock, cash, or other securities or
property) received in the merger by holders of Common Stock for each Share held
on the effective date of the transaction (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority
of the outstanding Shares); provided, however, that if such consideration
received in the merger was not solely common stock of the successor corporation
or its Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise of
the Option or Stock Purchase Right, for each Share of Optioned Stock subject to
the Option or Stock Purchase Right, to be solely fair market value to the per
share consideration received by holders of Common Stock in the merger.

13.    Time of Granting Options and Stock Purchase
Rights. The date of grant of an Option or Stock Purchase Right shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option or Stock Purchase Right, or such other date as is
determined by the Board. Notice of the determination shall be given to each
Employee or Consultant to whom an Option or Stock Purchase Right is so granted
within a reasonable time after the date of such grant.

14.    Amendment
and Termination of the Plan.

            (a)   
Amendment and Termination.  The Board may at any time amend, alter,
suspend or discontinue the Plan, but no amendment, alteration, suspension or discontinuation
shall be made theretofore, without Optionee or Stock Purchase Right holder
consent.  In addition, to the extent
necessary and desirable to comply with Rule 16b-3 under the Exchange Act or
with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of the NASD or an established stock exchange), the
Company shall obtain shareholder approval of any Plan amendment in such a
manner and to such a degree as required.

            (b)   
Effect of Amendment or
Termination. Any such amendment or termination of the Plan shall not affect
Options or Stock Purchase Rights already granted, and such Options and Stock
Purchase Rights shall remain in full force and effect as if this Plan had not
been amended or terminated, unless mutually agreed otherwise between the
Optionee and the Board, which agreement must be in writing and signed by the
Optionee and the Company.

15.    Conditions Upon Issuance of Shares.  Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitations, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

Page 9

        As a
condition to the exercise of an Option or Stock Purchase Right, the Company may
require the person exercising such Option or Stock Purchase Right to represent
and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned relevant provisions of
law.

16.   Reservation of Shares. The
Company, during the term of this Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

        The
inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.

17.    Agreements.  Options and Stock Purchase Rights shall be
evidenced by written agreements in such form as the Board shall approve from
time to time.

18.    Shareholder Approval.
Continuance of the Plan shall be subject to approval by the shareholders of the
Company within twelve (12) months before or after the date the Plan is adopted.
Such shareholder approval shall be obtained in the degree and manner required
under applicable state and federal law and the rules of any stock exchange upon
which the Common Stock is listed.

19.    Information
to Optionees and Purchasers. The Company shall provide to each Optionee and
to each individual who acquired Shares pursuant to the Plan, not less
frequently than annually during the period such Optionee or purchaser has one
or more Options or Stock Purchase Rights outstanding, and, in the case of an
individual who acquired Shares pursuant to the Plan, during the period such
individual owns such Shares, copies of annual financial statements. The Company
shall not be required to provide such statements to key employees whose duties
in connection with the Company assure their access to equivalent information.

Page 10

AMENDMENTS TO STOCK OPTION PLAN

SYS

6363 Greenwich Drive, Suite
200

San Diego, CA 92122

ANNUAL MEETING OF
SHAREHOLDERS

March 21, 1997

CERTIFICATE OF CORPORATE
SECRETARY

I, W. Gerald Newmin, the
duly appointed Secretary of SYS, a California corporation (the "Company"), do
hereby certify the following in connection with the Company's Annual Meeting of
Shareholders held on March 21, 1997 and the Certificate of the Inspector of
Elections received by me:

Appointment of Auditors

(i.)            a total of 2,757,031 shares of the
Company's Common Stock were represented at the Meeting;

(ii.)            the following motion was duly
approved with 2,746,415 shares voting in favor, 1,334 shares voting against,
and 9,282 shares abstaining:

               
RESOLVED:    That J.H. Cohn LLP is hereby
appointed this Company's auditor for the fiscal year ending June 30, 1997.

SYS 1997 Incentive Stock Option and
Restricted Stock Plan

(i.)            a total of 2,757,031 shares of the
Company's Common Stock were represented at the Meeting;

(ii.)            the following motion was duly
approved with 2,671,200 shares voting in favor, 10,128 shares voting against,
and 75,703 shares abstaining:

               
RESOLVED:     That the SYS 1997 Incentive Stock
Option and Restricted Stock Plan is hereby accepted in its entirety.

Page 11

Election of Directors

(i.)              
a total of 2,757,031
shares of the Company's Common Stock were represented at the Meeting;

                   
RESOLVED:    That
the following persons are hereby elected as Directors of SYS for the fiscal
year ending June 30, 1997:

                   
Paul I. Anderson

                   
Robert E. Carroll

                   
Lawrence L. Kavanau

                   
Robert D. Mowry

                   
W. Gerald Newmin

                   
Charles E. Vandeveer

                   
Charles H. Werner

I, W. Gerald Newmin, the
duly elected Corporate Secretary for the Company do hereby affix my signature
in the space provided below in certifying these matters for the Company's
Shareholders and the Board of Directors on this 21st day of March, 1997.

                                                                                     /s/
W. Gerald Newmin

                                                                                     W.
Gerald Newmin, Secretary

Page 12

SYS SHAREHOLDERS
MEETING

JANUARY 8, 1998

    The
Chairman called the meeting to order at 1:10 p.m.

    Michael
W. Fink, the Inspector of Elections, indicated that 3,138,786 shares of the
Company's common stock were outstanding and that 2,733,597 shares were
represented by those shareholders in attendance, therefor a quorum was present.
Mr. Fink was holder of the Corporation's common stock represented at the
meeting, either in person or by proxy.

    The
Chairman gave a review of major issues facing the Company over the past year.
He indicated that the Company had won a recompete on the UNREP contract and
that Ms. Karen White had joined the Company. The Company is focusing on growth
opportunities in both the government and non-government sectors. The first six
months of the fiscal year are on budget and the Company should complete one
acquisition in the non-government area before the end of the fiscal year which
will compliment the Company's government business.

    The
officers and directors of the Company were introduced.

    Mr.
Fink made a motion that the reading of the minutes of the previous shareholders
meeting be waived. Mr. Thomas seconded this motion which was passed
unanimously.

    Mr.
Carroll made a motion nominating the slate of management directors. Mr. Knapp
seconded this motion.

    Mr.
Fink made a motion, seconded by Mr. Thomas, that the slate of management directors
be elected. This motion was carried unanimously. The Inspector of Elections
announced that the following slate of directors had been elected:

                   
Paul
I. Anderson

                   
Robert
E. Carroll

                   
Lawrence
L. Kavanau

                   
L. Randolph Knapp

                   
Robert
D. Mowry

                   
W. Gerald Newmin

                   
Charles
E. Vandeveer

                   
Charles
H. Werner

                   
Richard
W. Wood

    Mr.
Newmin, Chairman of the Audit Committee, made a motion that the Company retain
the firm of JH Cohn LLP as its independent accountant. Mr. Werner seconded this
motion which passed unanimously.

Page 13

    Mr.
Harasty made a motion, seconded by Mr. Kavanau, that the Company increase the
number of common shares authorized to be issued by the Company from 6.0 million
to 12.0 million, and that an amendment to Article Fifth of the Company's
Articles of Incorporation be filed with the Secretary of State. This motion was
passed unanimously.

    The Chairman indicated that
the Internal Revenue Service requires shareholder approval of an amendment to
the Company's Incentive Stock Plan which will increase the amount of common
shares subject to the Plan for non-employee directors and consultants.
Following a discussion, on a motion made by Mr. Vandeveer, seconded by Mr. Moe
and approved by unanimous consent, it was;

RESOLVED, that the SYS
Incentive Stock Option and Restricted Stock Plan be amended to increase the
number of common shares available under the Plan for non-employee directors and
consultants from 100,000 to 350,000 shares. It was;

FURTHER RESOLVED, that the
Company increase the number of common shares allocated under the Plan for
employees be increased from 300,000 to 500,000 shares.

    Mr. Myers moved that the
annual meeting of the shareholders be adjourned. Mr. Betzer seconded the motion
and the meeting was adjourned at 1:25 p.m.

                                                                                    /s/
W. Gerald Newmin

                                                                                    W.
Gerald Newmin

                                                                                    Secretary
of the Corporation                  

DATED: January 8, 1998 

Page 14

SYS

6363 Greenwich Drive,
Suite 200

San Diego, CA 92122

ANNUAL MEETING OF
SHAREHOLDERS

January 8, 1998

CERTIFICATE OF
CORPORATE SECRETARY

    I, W. Gerald Newmin, the
duly appointed Secretary of SYS, a California corporation (the "Company"), do
hereby certify the following in connection with the Company's Annual Meeting of
Shareholders held on January 8, 1998 and the Certificate of the Inspector of
Elections received by me:

Item. 1.    Election
of Directors

            (i.)   
a total of 2,733,597 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
the following motion was duly
approved with 2,649,474 shares voting in favor, 0 shares voting against, and 0
shares abstaining:

            RESOLVED:   
That the following persons are
hereby elected as Directors of SYS for the fiscal year ending June 30, 1998:

                   
Paul I. Anderson

                   
Robert E. Carroll

                   
Lawrence L. Kavanau

                   
L.
Randolph Knapp

                   
Robert
D. Mowry

                   
W.
Gerald Newmin

                   
Charles E. Vandeveer

                   
Charles H. Werner

                   
Richard W. Wood

Item 2.    Appointment
of Auditors

            (i.)   
a total of 2,733,597 shares of the
Company's Common Stock were represented at the Meeting;

Page 15

            (ii.)   
the following motion was duly
approved with 2,718,471 shares voting in favor, 100 shares voting against, and
5,964 shares abstaining:

            RESOLVED: That J.H. Cohn
LLP is hereby appointed this Company's auditor for the fiscal year ending June
30, 1998.

Item
3.    Increase Number of Authorized
Common Shares to 12.0 Million

            (i.)   
a total of 2,733,597 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
the following motion was duly
approved with 2,586,052 shares voting in favor, 79,650 shares voting against,
and 21,891 shares abstaining:

            RESOLVED: That the number
of Common Shares authorized by the Company shall be 12.0 million shares.

Item 4.    Amendment to SYS 1997 Incentive Stock Option
and Restricted Stock Plan

            (i.)   
a total of 2,733,597 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
the following motion was duly
approved with 2,082,654 shares voting in favor, 282,478 shares voting against,
and 14,341 shares abstaining:

            RESOLVED: That the
amendment to the SYS 1997 Incentive Stock Option and Restricted Stock Plan
increasing the number of common shares allocated for non-employee directors and
consultants is hereby increased to 350,000 common shares.

Item
5.    Additional Amendment SYS 1997
Incentive Stock Option and Restricted Stock Plan

            (i.)   
a total of 2,733,597 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
the following motion, made from the
floor, was duly approved with 2,733,597 shares voting in favor, 0 shares voting
against, and 0 shares abstaining:

    RESOLVED: That the
amendment to the SYS 1997 Incentive Stock Option and Restricted Stock Plan
increasing the number of common shares allocated for non-employee directors and
consultants to 350,000 common shares be further amended to increase the maximum
number of shares allocated for employees from 300,000 to 500,000.

Page 16

    I, W. Gerald Newmin, the duly elected
Corporate Secretary for the Company do hereby affix my signature in the space
provided below in certifying these matters for the Company's Shareholders and
the Board of Directors on this 8th day of January, 1998.

                                                            /s/ W. Gerald Newmin

                                                            W. Gerald Newmin, Secretary

Page 17

SYS

9620 Chesapeake Drive,
Suite 201

San Diego, CA 92123

ANNUAL MEETING OF
SHAREHOLDERS

January 20, 1998

CERTIFICATE OF
INSPECTOR OF ELECTIONS

    I, Michael W. Fink, the
duly appointed Inspector of Elections for the Annual Meeting of the Common
Shareholders of SYS, a California corporation, held at 1:00 P.M. P.S.T., at the
corporate office, located at 9620 Chesapeake Drive, San Diego, California 92123
do hereby certify that:

    Item 1.    Election
of Directors

            (i.)    
A total of 2,952,858 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
The following motion was not duly approved
with 721,504 shares voting in favor, 2,231,354 shares voting against, and 0
shares abstaining:

            RESOLVED:     That the following persons are hereby
elected as Directors of SYS for the fiscal year ending June 30, 1999:

                   
Paul I. Anderson

                   
Robert E. Carroll

                   
Lawrence L. Kavanau

                   
Robert D. Mowry

                   
W. Gerald Newmin

                   
Charles E. Vandeveer

                   
Charles H. Werner

                   
Richard W. Wood

            (iii.)   
The following motion was duly approved
with 2,489,541 shares voting in favor, 463,317 shares voting against, and 0
shares abstaining:

            RESOLVED:      That the following persons are hereby
elected as Directors of SYS for the fiscal year ending June 30, 1999:

Page 18

                   
Lawrence L. Kavanau

                   
Robert D. Mowry

                   
W. Gerald Newmin

                   
Charles E. Vandeveer

                   
Charles H. Werner

    Item
2.    Appointment of Auditors

            (i.)   
A total of 2,952,858 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
The following motion was duly
approved with 2,948,452 shares voting in favor, 2,641 shares voting against,
and 1,765 shares abstaining:

    RESOLVED: That J. H. Cohn
LLP is hereby appointed this Company's auditor for the fiscal year ending June
30, 1999.

    Item
3.    Amendment to SYS 1997
Incentive Stock Option and Restricted Stock Plan

            (i.)   
A total of 2,952,858 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
The following motion was duly
approved with 2,893,136 shares voting in favor, 36,913 shares voting against,
and 22,809 shares abstaining:

    RESOLVED:    To amend the SYS 1997 Incentive Stock
Option and Restricted Stock Plan ("Plan") to increase the amount of common
shares subject to the Plan for non-employee directors and consultants from
350,000 to a total of 450,000 and for employees from 500,000 to a total of
750,000.

    I, Michael W. Fink, the duly appointed
Inspector of Elections, do hereby affix my signature in the space provided
below in certifying these matters for the Company's Shareholders and the Board
of Directors on this 20th day of January, 1999.

  
    

                                                                /s/ Michael
W. Fink

                                                                Michael W. Fink

                                                                Inspector of
Elections

    

  

Page 19

SYS

9620 Chesapeake Drive,
Suite 201

San Diego, CA 92123

ANNUAL MEETING OF
SHAREHOLDERS

January 20, 1999

CERTIFICATE OF
CORPORATE SECRETARY

    I, W. Gerald Newmin, the duly appointed
Secretary of SYS, a California corporation (the "Company"), do hereby certify
the following in connection with the Company's Annual Meeting of Shareholders
held on January 20, 1999 and the Certificate of the Inspector of Elections
received by me:

    Item
1.           Election of Directors

            (i.)   
A total of 2,952,858 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
The following motion was not duly
approved with 721,504 shares voting in favor, 2,231,354 shares voting against,
and 0 shares abstaining:

    RESOLVED:    That the following persons are hereby
elected as Directors of SYS for the fiscal year ending June 30, 1999:

                   
Paul I. Anderson

                   
Robert E. Carroll

                   
Lawrence L. Kavanau

                   
Robert D. Mowry

                   
W. Gerald Newmin

                   
Charles E. Vandeveer

                   
Charles H. Werner

                   
Richard W. Wood

            (iii.)   
The following motion was duly
approved with 2,489,541 shares voting in favor, 463,317 shares voting against,
and 0 shares abstaining:

    RESOLVED: That the
following persons are hereby elected as Directors of SYS for the fiscal year
ending June 30, 1999:

Page 20

                   
Lawrence L. Kavanau

                   
Robert D. Mowry

                   
W. Gerald Newmin

                   
Charles E. Vandeveer

                   
Charles H. Werner

    Item
2.     Appointment of Auditors

            (i.)   
A total of 2,952,858 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
The following motion was duly
approved with 2,948,452 shares voting in favor, 2,641 shares voting against,
and 1,765 shares abstaining:

    RESOLVED:     That J. H. Cohn LLP is hereby
appointed this Company's auditor for the fiscal year ending June 30, 1999.

    Item 3.    Amendment to SYS 1997 Incentive Stock Option
and Restricted Stock Plan

            (i.)   
A total of 2,952,858 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
The following motion was duly
approved with 2,893,136 shares voting in favor, 36,913 shares voting against,
and 22,809 shares abstaining:

    RESOLVED:     To amend the SYS 1997 Incentive Stock
Option and Restricted Stock Plan ("Plan") to increase the amount of common
shares subject to the Plan for non-employee directors and consultants from 350,000
to a total of 450,000 and for employees from 500,000 to a total of 750,000.

    I, W. Gerald Newmin, the duly elected
Corporate Secretary for the Company do hereby affix my signature in the space
provided below in certifying these matters for the Company's Shareholders and
the Board of Directors on this 20th day of January, 1999.

                                                                

                                                                                                /s/ W. Gerald
Newmin

                                                                                               
W. Gerald
Newmin, Secretary

Page 21

SYS

9620 Chesapeake Drive,
Suite 201

San Diego, CA 92123

ANNUAL MEETING OF
SHAREHOLDERS

January 19, 2000

CERTIFICATE OF
CORPORATE SECRETARY

    I, Michael W. Fink, the duly appointed
Secretary of SYS, a California corporation (the "Company"), do hereby certify
the following in connection with the Company's Annual Meeting of Shareholders
held on January 19, 2000 and the Certificate of the Inspector of Elections
received by me:

    Item 1.    Election
of Directors

            (i.)   
A total of 2,624,148 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
The following motion was duly
approved with 2,618,546 shares voting in favor, 5,602 shares voting against,
and 0 shares abstaining:

    RESOLVED:    That the following persons are hereby
elected as Directors of SYS for the fiscal year ending June 30, 2000:

                   
Lawrence L. Kavanau

                   
Kameron W. Maxwell

                   
W.
Gerald Newmin

                    Charles
E. Vandeveer

                    Charles
H. Werner

    Item 2.    Appointment
of Auditors

           
(i.)    A total of 2,624,148 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
The following motion was duly
approved with 2,620,137 shares voting in favor, 300 shares voting against, and
3,711 shares abstaining:

    RESOLVED:    That J. H. Cohn LLP is hereby
appointed this Company's auditor for the fiscal year ending June 30, 2000.

Page 22

    I, Michael W. Fink, the duly elected
Corporate Secretary for the Company do hereby affix my signature in the space
provided below in certifying these matters for the Company's Shareholders and
the Board of Directors on this 31st day of January, 2000.

 

                                                                             /s/ Michael W. Fink

                                                                            Michael
W. Fink, Secretary

Page 23

SYS

9620 Chesapeake Drive,
Suite 201

San Diego, CA 92123

ANNUAL MEETING OF
SHAREHOLDERS

January 17, 2001

CERTIFICATE OF
CORPORATE SECRETARY

    I, Michael W. Fink, the duly appointed
Secretary of SYS, a California corporation (the "Company"), do hereby certify
the following in connection with the Company's Annual Meeting of Shareholders
held on January 17, 2001 and the Certificate of the Inspector of Elections
received by me:

    Item
1.    Election of Directors

           
(i.)    A total of 2,513,326 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
The following motion was duly
approved with 2,485,288 shares voting in favor, 28,038 shares voting against,
and 0 shares abstaining:

    RESOLVED:    That the
following persons are hereby elected as Directors of SYS for the fiscal year
ending June 30, 2001:

                   
Zoltan A. "Walt" Harasty

                   
Kameron W. Maxwell

                   
W. Gerald Newmin

                   
Charles E. Vandeveer

                   
Charles H. Werner

    Item
2.    Appointment of Auditors

           
(i.)    A total of 2,513,326 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
The following motion was duly
approved with 2,506,701 shares voting in favor, 200 shares voting against, and
6,425 shares abstaining:

    RESOLVED:    That J. H. Cohn
LLP is hereby appointed this Company's auditor for the fiscal year ending June
30, 2001.

Page 24

    Item
3.    Increase the Number of
Authorized Common Shares

           
(i.)    A total of 2,513,326 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
The following motion was duly
approved with 2,381,949 shares voting in favor, 123,314 shares voting against,
and 8,063 shares abstaining:

    RESOLVED:    To amend the
Article FIFTH of the Articles of Incorporation to increase the number of
authorized Common Shares from 12.0 million to 48.0 million shares.

    Item
4.    Amend the SYS 1997 Incentive
Stock Option and Restricted Stock Plan

           
(i.)    A total of 2,513,326 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
The following motion was duly
approved with 2,445,637 shares voting in favor, 62,687 shares voting against,
and 5,002 shares abstaining:

    RESOLVED:    To amend the SYS
1997 Incentive Stock Option and Restricted Stock Plan (the "Plan") to increase
the amount of common shares subject to the Plan for employees from 750,000 to a
total of 1,750,000.

    Item
5.    Other Matters

    A.    Motion from the floor to amend bylaws.

           
(i.)    A total of 2,513,326 shares of the
Company's Common Stock were represented at the Meeting;

            (ii.)   
The following motion was duly
approved with 2,513,326 shares voting in favor, 0 shares voting against, and 0
shares abstaining:

    RESOLVED:    To amend and
replace the corporation's Article SECOND with the following:

    "SECOND: The purpose of the
corporation is to engage in any lawful act or activity for which a corporation
may be organized under the General Corporation Law of California other than the
banking business, the trust company business, or the practice of a profession
permitted to be incorporated under the California Corporations Code."

    B.     Motion
from the floor to amend bylaws.

           
(i.)    A total of 2,513,326 shares of the
Company's Common Stock were represented at the Meeting;

Page 25

            (ii.)   
The following motion was duly
approved with 2,513,326 shares voting in favor, 0 shares voting against, and 0
shares abstaining:

    RESOLVED:    To amend and
replace the corporation's Article THIRD with the following:

    "THIRD: The corporation
shall maintain its principal office within the State of California or at such
other location as its Board of Directors so determines."

    I, Michael W. Fink, the duly elected
Corporate Secretary for the Company do hereby affix my signature in the space
provided below in certifying these matters for the Company's Shareholders and
the Board of Directors on this 23rd day of January, 2001.

    

                       
                                                            /s/ Michael
W. Fink

                   
                                                                Michael W. Fink,
Secretary

*****

Page 26

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