Minneapolis, Minnesota - July 29, 2002

iSystems, Inc., a leading provider of quality management and business management software, filed a complaint Friday with the United States District Court of Minnesota against Softwares, LLC of Saint Paul.

The suit charges include: breach of contract, copyright infringement, breach of implied covenant, breach of fiduciary duty, misappropriation of trade secrets, and violation of the consumer fraud act. iSystems seeks injunctive relief and damages in an amount to be established at trial.

The suit further alleges:

Despite the prohibition against reverse engineering, and iSystems' copyright, while serving as iSystems' exclusive distributor for TQT, Softwares improperly used iSystems' trade secrets and confidential information to develop its own software that competes against TQT.

Despite due demand, Softwares has failed to halt its breaches of the license agreements and 1996 Development Agreement. As a result of the exclusive distributor relationship, and Softwares access to iSystems' trade secrets and confidential information, a fiduciary relationship arose along with the attendant duty that Softwares exercise the utmost care, candor, loyalty and good faith in dealing with iSystems. iSystems has expended a large amount of time and money in research and development expense in the development of the TQT software.

Softwares' representations and conduct with respect to its competitive product and TQT constitute fraud, false pretenses, false promises, misrepresentations, misleading statements and/or deceptive practices in connection with the sale of the merchandise with the intent that others rely thereon. Softwares' acts violate Minn. Stat. %A7 325F.68-70 (2002).

Moreover, iSystems alleges that Softwares has failed to remit to iSystems any TQT maintenance fees collected from the customers since October 2001, the percentage of the annual maintenance/support fees that is contractually obligated for iSystems goes to support the continued development of TQT. For the past nine months iSystems has added many new features to the product, enhancing it in numerous ways, without receiving the money that clients have paid to Softwares for the updates.

iSystems is seeking judgment to permanently enjoin Softwares, and each of its officers, agents, servants, employees, etc. from using in any way iSystem's software, copyrighted materials, derivative works, confidential information and trade secrets, and cease from competing, directly or indirectly, with iSystems.

iSystems has retained Richard Kempf of the Minneapolis, Minnesota law firm of MASLON EDELMAN BORMAN & BRAND, LLP. Mr. Kempf is a renowned specialist in intellectual property litigation, as well as computer and internet law.

Although iSystems clearly owns all proprietary rights to the TQT solution, Softwares LLC has been the exclusive marketer, distributor and front end customer support of the TQT product. Beginning July 2002 iSystems began offering support directly to it's clients. "We are bringing on new staff, rolling out an entirely new support system, and revamping the way that we relate to our clients. The changes will allow us to be more responsive to our clients needs, all support information will go directly to the people who can help", said Jeremy Kahn, Managing Director.

A copy of the current amended complaint can be found on the iSystems' TQT web site (www.TQT.com).

Founded in 1993, iSystems Inc. develops, markets and supports innovative quality management and business management software. iSystems' products are used by custom manufacturing, professional photography laboratories, pre-press companies, design firms, printing, and publishing companies to manage and control their production work-flow, customer relationship management, job tracking and cost-accounting processes. iSystems also provides management and design consulting services and support to its customers. The advanced technology in iSystems' production-proven tools results in a significant reduction in production cost and waste, increase in capacity, and shorter time to delivery.

Softwares LLC is wholly owned a subsidiary of Christ's Household of Faith (CHOF), a religious commune based in Saint Paul, Minnesota.