Document:

SUBSCRIPTION AGREEMENT

Agreement (this "Agreement"),  made this ---- day of -------------,  2002 by and
between  INTERNATIONAL TEST SYSTEMS, INC. a Delaware corporation (the "Company")
and     ----------------------------------------------     ("Subscriber").    In
consideration of the mutual promises and covenants herein contained, the parties
hereto (the "Parties") agree as follows:

                                  1. ARTICLE I

                                  SUBSCRIPTION

1.1. Subscription  Offer.  Subject  to the terms and  conditions  hereof  and to
     acceptance  by the  Company,  the  Subscriber  hereby  offers  to  purchase
     ------------------   Shares  of  Common   Stock  at  $0.40  per  share  and
     ____________class  "A" Warrants and  _________  Class "B" Warrant each at a
     purchase  at a price of $.10 per  Warrant,  for a total  purchase  price of
     $______________.  The  price  is  payable  in full by  check  payable  to "
     __________ Bank, on behalf of INTERNATIONAL TEST SYSTEMS,  INC." or by wire
     transfer or money order.

1.2. Acceptance of  Subscription.  The Company  reserves the right to reject the
     Subscriber's  offer in whole or in part,  for any  reason,  and to allocate
     less than the maximum number of Securities the Subscriber  hereby offers to
     purchase.  Any sale of Securities to the Subscriber  shall not be deemed to
     occur until the  Subscribers'  offer is accepted in writing by the Company.
     The  Subscriber  shall  not have any  recourse  against  the  Company  if a
     purchase  offer  is  rejected  in  whole  or in  part.  The  Company  shall
     reasonably notify the Subscriber in writing of the acceptance of a purchase
     offer.  If the offer is  rejected  in whole or in part,  the  Company  will
     promptly return to the Subscriber,  without deduction or interest, all or a
     ratable  portion of the  subscription  price,  as the case may be, together
     with all executed  documents  tendered by the  Subscriber.  If the purchase
     offer is rejected in part only, the Subscriber shall immediately  complete,
     execute,  and  deliver to the Company new  subscription  documents  for the
     appropriate reduced amount.

                                 2. ARTICLE II

                         REPRESENTATIONS AND WARRANTIES

2.1. Status of Subscriber.  The  Subscriber,  if an  individual,  is at least 21
     years of age. If an  association,  each individual of the association is at
     least 21 years of age.

2.2. Access to Information.  Because of the  Subscriber's  business or financial
     experience or his professional  advisors who are unaffiliated  with and who
     are  not  compensated  by  the  Company,  or  any  affiliate  thereof,  the
     Subscriber has the capacity to protect his own interests in connection with
     the offer and sale of the  Securities.  The  Subscriber  represents  he has
     received and retained the Company's prospectus (the "Prospectus").
<PAGE>

2.3. Understanding of Investment Risks. The Subscriber understands that there is
     no market for the  Securities  and no assurance that a market will develop,
     and that  realization  of the  objectives  of the  Company  is  subject  to
     significant economic and business risks as set forth in the Prospectus.

2.4. Residence of the  Subscriber.  The  residence of the  Subscriber  set forth
     below is the true and correct  residence of Subscriber  and the  Subscriber
     has no present intention of becoming a resident or domiciliary of any other
     state, country, or jurisdiction.

2.5. Further  Assurance.  Subscriber will execute and deliver to the Company any
     document,  or do any other act or thing,  which the Company may  reasonably
     request in connection with the acquisition of the Securities.

2.6. Ability to Bear Economic Risk. The Company is making the determination that
     the Subscriber is (1) an  "accredited  investor" as defined in rules to the
     Act, (2) a sophisticated  purchaser,  or (3) otherwise  qualified under the
     jurisdiction of the Subscriber's residence to make this investment.

2.7. For  Partnership,  Corporations,  Trusts  or Other  Entities  Only.  If the
     Subscriber is a partnership, corporation, trust, or other entity:

     The   Subscriber   has  the  full  power  and  authority  to  execute  this
     subscription   Agreement   on  behalf  of  the   entity  and  to  make  the
     representations   and  warranties  made  herein  on  its  behalf  and  this
     investment  in  the  Company  has  been  affirmatively  authorized  by  the
     governing  board  of the  entity  and is not  prohibited  by the  governing
     documents of the entity.

                                 3. ARTICLE III

                            MISCELLANEOUS PROVISIONS

3.1. Captions and Headings.  The Article and Section  headings  throughout  this
     Agreement  are for  convenience  of  reference  only and shall in no way be
     deemed to define, limit or add to any provision of this Agreement.

3.2. Entire Agreement; Amendment. This Agreement states the entire agreement and
     understanding  of the Parties and shall supersede all prior  agreements and
     understandings.  No  amendment of the  Agreement  shall be made without the
     express written consent of the Parties.

3.3. Severability.   The  invalidity  or   unenforceability  of  any  particular
     provision of this Agreement  shall not affect any other  provision  hereof,
     which  shall  be   construed   in  all  respects  as  if  such  invalid  or
     unenforceable provision were omitted.
<PAGE>

3.4. Governing  Law.  This  Agreement  shall be  governed  by and  construed  in
     accordance with the laws of the State of Texas for contracts made and to be
     performed within the State of Texas.

3.5. Notices. All notices, requests, demands, consents, and other communications
     hereunder  shall be transmitted in writing and shall be deemed to have been
     duly given when  hand-delivered or sent by certified mail, postage prepaid,
     with return receipt requested,  addressed to the Parties as follows: to the
     Company and to the Subscriber,  at the address  indicated  below. Any Party
     may change  his/her/its  address  for  purposes  of this  Section by giving
     notice as provided herein.

     IN WITNESS  WHEREOF,  the Parties have executed this  Agreement the day and
year first above written.

INTERNATIONAL TEST SYSTEMS, INC.
4703 Shavano Oak, Suite 102
San Antonio, TX  78249
By:_____________________
Authorized Officer

 The Subscriber
--------------------------------
--------------------------------

(Address)ESCROW  AGREEMENT,  dated  as of  June 1,  2002,  between  Vanderkam  &
Sanders, 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 Vanderkam &
Sanders at Whitney Bank in Houston, Texas.

     "Escrow  Agent" shall mean  Vanderkam & Sanders,  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) the date of
acceptance of subscriptions for $750,000 in common stock and warrants,  (2) such
earlier  date as may be  determined  by the  Company  and (1) 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.
<PAGE>

     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.

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,  or if all or any portion of the deposit  made
     on  behalf  of  any  subscriber  remains  on  deposit  after  the  Offering
     Termination Date, 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 Company, 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. The Company may by notice to the Escrow  Agent  delivered  with the related
     Refund  Notice  provide  that an amount  equal to the cash  deposits  being
     returned to the Company in  accordance  with section  7.1.1 hereof shall be
     netted out of the following day's funds wired to the Escrow Agent. Any such
     notice shall  include the  information  required by section 3.3 hereof with
     respect  to the  subscriber  against  whose  deposit  such  funds are to be
     credited.

5.3. Prior to each closing of the Minimum Offering Amount which is $125,000, 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:
<PAGE>

(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.

5.4  In the event that the  minimum  offering  proceeds  are not  raised  within
     twelve  months of the  offering,  then the Escrow  Agent  shall  return all
     deposits received to each subscriber.

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.
<PAGE>

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.

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.
<PAGE>

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 on the
     date the Minimum Offering Amount is received. 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.
<PAGE>

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.

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

                        Vanderkam & Sanders 440  Louisiana  Street  Suite 475
                        Houston, TX 77002 Fax: 713-547-8910

                        Attention:  David Loev

              if to:    the Company,
                        4703 Shavano Oak
                        Suite 102
                        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.
<PAGE>

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.

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.

Vanderkam & Sanders

By:/s/ Vanderkam & Sanders
   -----------------------

International Test Systems

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

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