AGREEMENT AND PLAN OF MERGER

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

Parent and Merger Sub jointly and severally represent and warrant to the Stockholders and Hoover as follows:

      4.1    Organization and Qualification.  Each of Parent and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full power and authority to conduct its business as it has been and is presently being conducted and to own, operate or lease, as applicable, its properties and assets now owned, operated or leased by it.  

      4.2    Due Authorization.  Each of Parent and Merger Sub has full requisite power and authority to execute and deliver this Agreement and to perform all obligations to be performed by it, respectively, hereunder.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by each of Parent and Merger Sub and no other proceeding on its respective part is necessary to authorize this Agreement and the consummation of the transactions contemplated hereby.  This Agreement has been duly and validly executed and delivered by each of Parent and Merger Sub and constitutes the legally valid and binding obligation of each of them, enforceable against it, respectively, in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity.

      4.3    No Conflict.  The execution, delivery and performance of this Agreement by each of Parent and Merger Sub and the consummation of the transactions contemplated hereby do not, and will not, directly or indirectly:

              (a)    violate, conflict with, or result in the breach of its respective organizational documents;

              (b)    violate, conflict with, or result in a violation of, or give any Governmental Entity or other Person the right to challenge any of the transactions contemplated by this Agreement or to exercise any remedy or obtain any relief under, any Law or any Court Order to which it, or any of the assets owned or used by it may be subject; or

              (c)    violate, conflict with, or result in a violation of any of the terms or requirements of, or give any Governmental Entity the right to revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental Permit that is held by it or that otherwise relates to the business of, or any of the assets owned or used by it.

      4.4    Government Authorities; Consents.  No notice to, consent, approval or authorization of, or designation, declaration or filing with, any Governmental Entity or other Person is required on the part of either Parent or Merger Sub or any of their respective Affiliates with respect to the execution or delivery of this Agreement or the consummation of the transactions contemplated hereby.  Each such notice, consent, approval or authorization of, or designation, declaration or filing has been provided, obtained or made (as applicable) or will be provided, obtained or made prior to the Closing Date.

      4.5    Litigation and Proceedings.  There are no lawsuits, Actions, suits, claims, investigations or other proceedings pending or, to the Knowledge of Parent, threatened against Parent or Merger Sub which would be reasonably expected to delay in any respect consummation of the transactions contemplated hereby.  There is no Court Order or any open injunction binding upon Parent or Merger Sub that would be reasonably expected to delay in any respect consummation of the transactions contemplated hereby.  There is no pending, or to the Knowledge of Parent, threatened Action or proceeding applicable to Parent or Merger Sub by or before any Governmental Entity seeking to restrain or invalidate all or any portion of the transactions contemplated hereunder.

      4.6    Parent Shares.  The Parent Shares have been duly authorized and, when issued to the Stockholders at Closing in accordance with this Agreement, will be validly issued, fully paid and nonassessable.

      4.7    SEC Filings; Financial Statements.

              (a)    Parent has made available to the Stockholders all forms, reports and documents required to be filed by Parent with the Securities and Exchange Commission (the "SEC") since January 1, 2005 (collectively, the "Parent SEC Reports"), all of which were filed.  Parent SEC Reports (i) at the time they were filed complied as to form in all material respects with the applicable requirements of the Securities Act of 1933, as amended (the "Securities Act") or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the case may be, and (ii) did not at the time they were filed (or if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

              (b)    The consolidated financial statements (including, in each case, any related notes) contained in Parent SEC Reports complied as to form in all material respects with the applicable rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes to such financial statements or, in the case of unaudited statements, as permitted by the SEC) and fairly presented the consolidated financial position of Parent and its subsidiaries as at the respective dates and the consolidated results of its operations and cash flows for the periods indicated (subject, in the case of the unaudited financial statements, to normal year end recurring adjustments).

      4.8    Due Diligence by Parent and Merger Sub.  Parent and Merger Sub each acknowledge that each has had the opportunity to conduct due diligence with respect to the Company and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning any matter; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate the Merger; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed decision with respect to the Merger.  Each of Parent and Merger Sub has sought such accounting, legal and tax advice as it has considered necessary to make an informed decision with respect to the Merger.  Notwithstanding anything to the contrary in this Agreement, neither this Section 4.8 nor any other provision of this Agreement shall diminish or limit the extent to which Parent and Merger Sub may rely upon the representations, warranties and covenants of the Company, the Stockholders and Hoover in this Agreement and the other Transaction Documents.

ARTICLE V

CONDITIONS TO CLOSING

      5.1    Conditions Precedent to Obligations of Parent and Merger Sub.  The obligation of Parent and Merger Sub to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing, of each of the following conditions, any of which may be waived by Parent in writing, and the Company, each Stockholder and Hoover shall each use their respective best efforts to cause such conditions to be fulfilled:

              (a)    Representations and Warranties.  Each of the representations and warranties of the Company, the Stockholders and Hoover in this Agreement shall be true and correct in all respects (in the case of any representation or warranty containing any materiality qualification) or in all material respects (in the case of any representation or warranty without any materiality qualification) on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date, except to the extent that any of such representations and warranties refers specifically to a date other than the Closing Date, in which case such representations and warranties shall be true and correct on and as of such date.

              (b)    Performance of the Company, the Stockholders and Hoover.  Each of the Company, the Stockholders and Hoover shall have performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement to be performed or complied with by them at or before the Closing.

              (c)    Closing Deliveries.  All of the deliveries to be made by the Company, the Stockholders and Hoover pursuant to Section 2.5(a) hereto shall have been made.

              (d)    Certificate.  Parent shall have received a certificate executed by an officer of the Company and by Hoover dated the Closing Date, certifying as to the fulfillment of the conditions set forth in Sections 5.1(a) and (b).

              (e)    Secretary's Certificate.  Parent shall have received a certificate of the Secretary of the Company, dated as of the Closing Date, certifying: (i) the resolutions adopted by the Board of Directors of the Company approving the transactions contemplated by this Agreement and the other transaction documents; (ii) the current versions of the Articles of Incorporation and Bylaws of the Company; and (iii) as to the signatures and authority of all individuals executing this Agreement or any other Transaction Documents on behalf of the Company.

              (f)    Litigation.  No Action or proceeding shall be pending or threatened before any Governmental Entity, and no claim or demand shall have been made against Parent, the Company, any Stockholder or Hoover, seeking to restrain or prohibit the Closing.

              (g)    No Material Adverse Change.  There shall have been no Material Adverse Change from the business described on the Financial Statements.

              (h)    Real Estate Lease.  Parent shall have received from the landlord under the Real Estate Lease a consent and non-disturbance agreement in form and substance satisfactory to Parent in its sole and absolute discretion.

              (i)    Payoff Letters; Release of Encumbrances.  Parent shall have received payoff letters from San Diego National Bank (the "Bank") and from Sandy L. Hoover, as Trustee of the Stewart Hoover Trust dated March 17, 2003 (the "Lender Trust"), with respect to the balances due from the Company to each of them as of the Closing Date (such amounts, respectively, the "Bank Payoff Amount" and the "Lender Trust Payoff Amount").

              (j)    Consents.  The Company shall have obtained all material consents, approvals or waivers from, and provided any required notices to, any Governmental Bodies and other Persons necessary for the execution, delivery and performance of this Agreement and the transactions contemplated thereby and indicated on Schedule 3.6.

              (k)    Legal Opinion.  The Company shall have delivered to Parent a legal opinion from Ferris & Britton, A Professional Corporation, counsel to the Company, addressed to Parent, dated as of the Closing Date, in the form attached hereto as Exhibit C.

              (l)    Escrow Agreement.  The Escrow Agreement shall have been duly executed by the Stockholders, Hoover and Escrow Agent.

              (m)    Hoover's Resignation.  Hoover shall have duly resigned from the Board of Directors of the Company, as an officer of the Company and from any position as trustee of any Company Benefit Plan.

              (n)    Additional Documents.  Parent shall have received such other documents, instruments and certificates as it shall have reasonably requested for the purpose of effecting the transactions provided for and contemplated by this Agreement.

      5.2    Conditions Precedent to Obligations of the Company, Stockholders and Hoover.  The obligations of the Company, the Stockholders and Hoover to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing, of each of the following conditions, any of which may be waived by Hoover in writing, and Parent shall use its best efforts to cause such conditions to be fulfilled:

              (a)    Representations and Warranties.  The representations and warranties of Parent and Merger Sub in this Agreement shall be true and correct in all respects (in the case of any representation or warranty containing any materiality qualification) or in all material respects (in the case of any representation or warranty without any materiality qualification) on and as of the Closing Date with the same force and effect as though the same had been made on and as of the Closing Date, except to the extent that any of such representations and warranties refers specifically to a date other than the Closing Date, in which case such representations and warranties shall be true and correct shall be true and correct on and as of such date.

              (b)    Performance by Parent.  Parent shall have performed and complied in all material respects with the agreements, covenants and conditions required by this Agreement to be performed or complied with by it at or before the Closing.

              (c)    Closing Deliveries.  All of the deliveries to be made by Parent at the Closing pursuant to Section 2.5(b) hereto shall have been made.

              (d)    Certificate.  The Company shall have received a certificate executed by officers of each of Parent and Merger Sub dated as of the Closing Date, certifying as to the fulfillment of the conditions set forth in Sections 5.2(a) and (b).

              (e)    Secretary's Certificate of Parent.  Hoover shall have received a certificate of the Secretary of Parent, dated as of the Closing Date, certifying: (i) the resolutions adopted by the Board of Directors of Parent approving the transactions contemplated by this Agreement and the other transaction documents; (ii) the current versions of the Certificate of Incorporation and Bylaws of Parent; and (iii) as to the signatures and authority of all individuals executing this Agreement or any other Transaction Documents on behalf of Parent.

              (f)    Secretary's Certificate of Merger Sub.  Hoover shall have received a certificate of the Secretary of Merger Sub, dated as of the Closing Date, certifying: (i) the resolutions adopted by the Board of Directors of Merger Sub approving the transactions contemplated by this Agreement and the other transaction documents; (ii) the current versions of the Certificate of Incorporation and Bylaws of Merger Sub; and (iii) as to the signatures and authority of all individuals executing this Agreement or any other Transaction Documents on behalf of Merger Sub.

              (g)    Legal Opinion.  Parent shall have obtained and delivered to the Stockholders a legal opinion from Saul Ewing LLP, counsel to Parent, addressed to the Stockholders and Hoover, dated as of the Closing Date, in the form attached hereto as Exhibit D.

              (h)    Escrow Agreement.  The Escrow Agreement shall have been duly executed by Parent and Escrow Agent.

                    (i)    Litigation.  No Action or proceeding shall be pending or threatened before any Governmental Entity, and no claim or demand shall have been made against Parent or the Company, seeking to restrain or prohibit the Closing.

ARTICLE VI

POST-CLOSING COVENANTS.

      6.1    Covenants of Hoover and the Stockholders.

              (a)    Transfer Taxes.  All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees (including any penalties and interest thereon) incurred by Hoover, Stockholders or Company in connection with this Agreement shall be paid by them when due, and each shall, at their own respective expense, file all necessary Tax Returns and other documentation with respect to all such transfer, documentary, sales, use, stamp, registration and other Taxes and fees, and if required by applicable law, Parent shall, and shall cause its affiliates to, join in the execution of any such Tax Returns and other documentation.

              (b)    Confidentiality.  Each Stockholder and Hoover shall treat and hold as confidential any information concerning the business and affairs of the Company that is not already generally available to the public (the "Confidential Information"), refrain from using any of the Confidential Information except in connection with this Agreement, and deliver promptly to Parent, at the request and option of Parent, all tangible embodiments (and all copies) of the Confidential Information which are in their possession or under their control.  In the event that any Stockholder or Hoover is requested or required (by oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand, or similar process) to disclose any Confidential Information, such Stockholder or Hoover shall notify Parent promptly of the request or requirement so that Parent may seek an appropriate protective order or waive compliance with the provisions of this Section 6.1(b).  If, in the absence of a protective order or the receipt of a waiver hereunder, any Stockholder or Hoover is, on the advice of counsel, compelled to disclose any Confidential Information to any tribunal or else stand liable for contempt, such Stockholder or Hoover may disclose the Confidential Information to the tribunal; provided that such disclosing Person shall use her or its best efforts to obtain, at the request of Parent, an order or other assurance that confidential treatment shall be accorded to such portion of the Confidential Information required to be disclosed as Parent shall designate. Each Stockholder and Hoover acknowledges and agrees that in the event of a breach by any of them of any of the provisions of this Section 6.1(b), monetary damages shall not constitute a sufficient remedy.  Consequently, in the event of any such breach, the Company, Parent and/or their respective successors or assigns may, in addition to other rights and remedies existing in their favor, apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce or prevent any violations of the provisions of this Section 6.1(b), in each case without the requirement of posting a bond or proving actual damages.

              (c)    Invention, Copyright and Secrecy Agreements with Surviving Corporation's Employees. Hoover shall, within three (3) business days following the Closing, cause each employee of the Surviving Corporation to execute and deliver to the Surviving Corporation an Invention, Copyright and Secrecy Agreement with the Surviving Corporation in form and substance acceptable to Parent in its sole and absolute discretion.

      6.2    Parent's Covenants and Acknowledgements.  

              (a)    Parent covenants that it shall file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder (or, if Parent is not required to file such reports, it will, upon the request of a Stockholder that holds Parent Shares, make publicly available other information so long as necessary to permit sales of the Parent Shares under Rule 144 under the Securities Act) and it will take such further action as may be reasonably requested by a Stockholder that holds Parent Shares, all to the extent required from time to time to enable the Stockholders who hold Parent Shares to sell the Parent Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act, as amended, or any similar rule or regulation hereafter adopted by the SEC.  Upon the request of a Stockholder who holds Parent Shares, Parent shall deliver to such Stockholder a written statement as to whether it has complied with such requirements.  Notwithstanding anything to the contrary in this Agreement, Parent's covenants under this Section 6.2 shall terminate and be of no further force or effect on the earliest date that the Parent Shares may be resold without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act, as amended, or any similar rule or regulation hereafter adopted by the SEC.

              (b)    Parent covenants that it shall pay, or shall cause the Surviving Corporation to pay, the Heston-Baston Payables within seventy-five (75) days following the Effective Time (to the extent that they are accrued on the Company's accounting books and records as of the Closing).

      6.3    Mutual Covenants and Acknowledgements.

              (a)    Press Releases and Announcements.  At and prior to the Closing Date, no press releases related to this Agreement and the transactions contemplated herein, or other announcements to the employees, referral sources, customers, suppliers or vendors of the Company shall be issued without the mutual approval of Parent and Hoover, except for any public disclosure which is required by law or regulation (in which case the disclosure shall be prepared by Parent).  After the Closing Date, no press releases related to this Agreement and the transactions contemplated herein, or other announcements to the employees, customers or suppliers of the Company, shall be issued by any party other than Parent without Parent's prior written consent.

              (b)    Specific Performance.  The Company, the Stockholders and Hoover each acknowledge that the Company's business is unique and recognizes and affirms that in the event of a breach of this Agreement by the Company, a Stockholder or Hoover, Parent will be irreparably harmed and money damages may be inadequate and Parent may have no adequate remedy at law.  Accordingly, the Company, each Stockholder and Hoover agree that Parent shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Company's, each Stockholder's and Hoover's obligations hereunder not only by an Action for damages but also by an Action for specific performance, injunctive and/or other equitable relief.

      6.4    Tax Returns.

              (a)    Hoover shall have the exclusive authority and obligation to cause, at the Stockholders' sole expense, the accounting firm of LevitzZacks, CPAs (i) to prepare, (ii) to execute on behalf of the Company, and (iii) to timely file, or cause to be prepared and timely filed, all Tax Returns of the Company (including all federal, state and local "Short Period" Tax Returns) that are due with respect to that portion of the Company's taxable year ending on and including the Closing Date; provided, however, that such Tax Returns shall be prepared by treating items on such Tax Returns in a manner consistent with the past practices with respect to such items and in a manner consistent with all applicable regulations of the IRS.  Notwithstanding the foregoing, without limiting any other provision of this Agreement, Surviving Corporation shall cooperate with Hoover, at Hoover's reasonable request, in the preparation of all such Tax Returns.  The Company's Short Period for purposes of this Agreement shall begin on the first day of the Company's tax year and end on the Closing Date.

              (b)    The Parent shall have the exclusive authority and obligation (i) to prepare, (ii) to execute on behalf of the Surviving Corporation, and (iii) to timely file, or cause to be prepared and timely filed, all Tax Returns of the Surviving Corporation that are due with respect to that portion of the Surviving Corporation's taxable year beginning after the Closing Date.

      6.5    Controversies.  The Parent shall promptly notify Hoover in writing upon receipt by the Parent or any Affiliate of the Parent (including the Surviving Corporation after the Closing Date) of written notice of any inquiries, claims, assessments, audits or similar events with respect to Taxes relating to a taxable period ending on and including the Closing Date for which the Stockholders or Hoover may be liable under this Agreement (any such inquiry, claim, assessment, audit or similar event, a "Tax Matter").  The Parent shall have the sole right to control any audit or examination by any taxing authority, initiate any claim for refund or amend any Tax Return, and contest, resolve and defend against any assessment for additional Taxes, notice of Tax deficiency or other adjustment of Taxes of, or relating to, the income, assets or operations of the Surviving Corporation or the Company for all taxable periods; provided that any such item affecting a period of time before the Closing Date will require the consent of Hoover, which consent shall not be unreasonably withheld or delayed.

ARTICLE VII

INDEMNIFICATION

      7.1    Survival.  The representations, warranties and covenants in this Agreement (including all schedules, exhibits and annexes hereto) shall survive the Closing.  If the Closing occurs, the Stockholders and Hoover will have no liability for indemnification with respect to any representation or warranty or pursuant to Section 7.2(a)(i) unless on or before the Expiration Date for such representation or warranty or such indemnification provision, Parent notifies Hoover of a claim specifying the factual basis of the claim in reasonable detail to the extent then known by Parent.  The "Expiration Date" shall mean the date that is eighteen (18) months after the Closing Date; provided, however, that (i) the Expiration Date shall mean 90 days following the expiration of all relevant statutes of limitations (including any extensions thereof) for the representations and warranties in Section 3.20 (Tax Matters) and Section 3.29 (Securities Law), (ii) the Expiration Date shall mean the third anniversary of the Closing Date for the representations and warranties in Section 3.16 (Employee Benefit Plans), and Section 3.19 (Environmental Matters) and Section 3.30 (Disclosure), (iii) the Expiration Date shall mean the seventh anniversary of the Closing Date for the representations and warranties in Section 3.1 (Organization and Qualification), Section 3.2 (Subsidiaries), Section 3.3 (Capitalization) and Section 3.4 (Due Authorization), and (iv) the Expiration Date shall mean the later of the seventh anniversary date of the Closing or the otherwise applicable Expiration Date specified in this Section 7.1 for any Intentional Breach.  The right to indemnification, payment of damages or other remedy based on representations, warranties, covenants and obligations in this Agreement will not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant or obligation.

      7.2    Indemnification.  

              (a)    Indemnification by the Stockholders and Hoover.  

                    (i)    Subject to the other provisions of this ARTICLE VII, from and after the Closing Date, the Stockholders and Hoover  (the "Seller Indemnifying Persons") shall jointly and severally indemnify, defend and hold harmless Parent, the Surviving Corporation and their respective stockholders, directors, officers, employees, representatives, agents, controlling persons and Affiliates, and their respective successors and assigns (collectively, "Parent Indemnified Persons"), for, and will pay to any Parent Indemnified Person the amount of any and all demands, losses, damages, penalties, claims, liabilities, obligations, Actions, causes of action, and expenses (including without limitation, reasonable costs of investigating, preparing or defending any such claim or Action and reasonable legal fees and disbursements), whether or not involving a third party claim (collectively, "Losses") arising by reason of, or resulting from:

                          A.    any breach of any representation or warranty of the Company, the Stockholders or Hoover contained in this Agreement (including all schedules, exhibits and annexes hereto), any other Transaction Document, or in any agreement, certificate or instrument delivered pursuant hereto or thereto;

                          B.    the failure of the Company (with respect to any pre-Closing performance), any Stockholder or Hoover to perform any of its respective agreements or covenants contained in this Agreement;

                          C.    any broker's, finder's, financial advisor's or other similar fees and commissions payable by the Company, any Stockholder or Hoover in connection with the transactions contemplated by this Agreement;

                          D.    any and all Pre-Closing Environmental Conditions, whether or not disclosed in this Agreement or the exhibits and schedules hereto;

                          E.    all Tax Liabilities of, or attributable to, the Company or arising as a result of any breach of the representations and warranties contained in Section 3.20;

                          F.    any Losses arising from or relating to the termination of employment of any employee of the Company during the two-year period ending immediately prior to the Closing, whether resulting from any claim for wrongful termination or otherwise;

                          G.    any Losses arising from or relating to any claim that any Person other than the Stockholders or Merger Sub holds or is entitled to hold or acquire (whether from the Company or from any other Person), or entitled to cause the Company to issue any share of capital stock or option, warrant, convertible security or other right issuable or exercisable for, shares of capital stock of the Company; or

                          H.     any product liability claims resulting from the ownership, possession or use of any product manufactured, sold or distributed by the Company prior to the Closing, or any claims resulting from any installation or service performed by the Company prior to the Closing, or any design-related product liability claims resulting from the ownership, possession or use of any product designed by the Company prior to Closing.

                    (ii)   To the extent that a Parent Indemnified Person is entitled to make a claim for indemnification pursuant to this Section 7.2(a), such claim may be satisfied in the following method, order and priority: (A) first, subject to and in accordance with the Escrow Agreement, by the release of a number of Escrow Shares from the Escrow Fund released to Parent that have an aggregate value (determined in accordance with Section 7.2(a)(iii) below) equal to the amount of all such Losses; (B) second, if Hoover or a Stockholder then holds Parent Shares outside of the Escrow Fund and Hoover or such Stockholder elects to pay the Losses with those shares, by the delivery by Hoover or such Stockholder to Parent of Parent Shares that have an aggregate value (determined in accordance with Section 7.2(a)(iii) below) equal to the unpaid balance of all such Losses; then (C) third, by means of a setoff against amounts otherwise payable under the Notes (any such setoff being applied, in the aggregate, to both Notes in accordance with the respective Stockholder Ownership Percentages of the payees), it being agreed that the exercise of such right of setoff by Parent in good faith, whether or not ultimately determined to be justified, will not constitute an event of default under the Notes.  Neither the exercise of nor the failure to exercise such right to cause Escrow Shares to be released to Parent from the Escrow Fund, the delivery of such Parent Shares by Hoover or a Stockholder to Parent or such right of setoff will constitute an election of remedies or limit Parent in any manner in the enforcement of any other remedies that may be available to it.

                    (iii)  For all purposes relating to determining the number of Parent Shares (including Escrow Shares) to be released or delivered towards the payment of Losses by Parent Indemnified Persons, the Parent Shares shall be valued at $2.18 per share, as adjusted for stock splits, stock dividends and similar events after the Closing.

                    (iv)   Notwithstanding anything to the contrary in this ARTICLE VII:

                          (A)    the liability of the Stockholders and Hoover for indemnification under this ARTICLE VII shall not exceed, as to the cumulative Losses:  (x) with respect to all Notices of Claims sent during the period ending on the third anniversary of the Closing Date, the aggregate sum of One Million Dollars ($1,000,000); and (y) with respect to all Notices of Claims sent after the third anniversary of the Closing Date, the aggregate sum of Five Hundred Thousand Dollars ($500,000) less (but not less than zero) any amounts paid pursuant to the preceding item (x); and

                          (B)    Notwithstanding anything to the contrary set forth in this Agreement, other than Losses arising out of fraud or willful misconduct of a Stockholder or Hoover or Losses arising out of a breach of the representations and warranties in Sections 3.14(e) and (j) of this Agreement, Stockholders and Hoover shall not be required to provide indemnification pursuant to Section 7.2(a)(i)A unless and until the aggregate amount of the Losses exceeds $25,000 (the "Basket Threshold").  Once the aggregate amount of the indemnification obligation of Stockholders and Hoover exceeds the Basket Threshold, Stockholders and Hoover shall be required to provide indemnification for all Losses, including the $25,000 applied to the Basket Threshold.

              (b)    Indemnification by Parent.  Subject to the provisions of this ARTICLE VII, from and after the Closing Date, Parent shall indemnify, defend and hold harmless the Stockholders, Hoover and their respective trustees, beneficiaries, representatives, agents, controlling persons, Affiliates, successors and assigns (collectively, the "Seller Indemnified Persons") from and against any and all Losses incurred by the Seller Indemnified Persons arising by reason of or resulting from any breach of any warranty, representation, covenant or agreement of Parent contained in this Agreement (including all schedules, exhibits and annexes hereto), any other Transaction Document, or in any agreement, certificate or instrument delivered pursuant hereto or thereto, or arising from or relating to any of the Assumed Liabilities, or any broker's, finder's, financial advisor's or other similar fees and commissions payable by Parent in connection with the transactions contemplated by this Agreement; and Surviving Corporation's ownership or operation of the Business after the Closing.

              (c)    Interest.  Indemnification payments under this Agreement shall include interest at the Prime Rate plus 1% from the date the applicable Loss is suffered or sustained to the date of payment.   

      7.3    Indemnification Procedure for Third Party Claims.  

              (a)    For the purposes of this ARTICLE VII:

                    (i)     With respect to indemnification by one or more Seller Indemnifying Persons to one or more Parent Indemnified Persons, the term "Indemnitee" means a Parent Indemnified Persons, the term "Indemnitor" means the applicable Seller Indemnifying Person, and the term "Indemnitor's Agent" means Hoover.

                    (ii)   With respect to indemnification by Parent to one or more Seller Indemnified Persons, the term "Indemnitee" means Seller Indemnified Person, the term "Indemnitor" means Parent, and the term "Indemnitor's Agent" means Parent.

              (b)    In the event that an Indemnitee receives notice of the assertion of any claim or the commencement of any Action by a third party in respect of which indemnity may be sought under the provisions of this ARTICLE VII ("Third Party Claim"), Indemnitee shall notify the Indemnitor's Agent in writing of such Third Party Claim ("Notice of Claim") and, if the Indemnitee is a Parent Indemnified Person, concurrently therewith shall send a duplicate copy of such Notice of Claim to the Escrow Agent. The Notice of Claim shall set forth in reasonable detail: (i) that an Indemnitee has incurred Losses or anticipates that it will incur Losses for which such Indemnitee is entitled to indemnification pursuant to this Agreement; (ii) the amount of such Losses, if known, or, if not known, an estimate of the foreseeable maximum amount of such Losses (which estimate shall not be conclusive of the final amount of such Losses); and (iii) a description of the basis for such Third Party Claim. Failure or delay in notifying the Indemnitor's Agent will not relieve the Indemnitors of any liability they may have to the Indemnitee, so long as the notice is given within prior to the applicable Expiration Date, except and only to the extent that such failure or delay causes actual harm to the Indemnitors with respect to such Third Party Claim.

              (c)    Subject to the further provisions of this Section 7.3, the Indemnitor's Agent will have thirty (30) days (or less if the nature of the Third Party Claim reasonably requires) from the date on which the Indemnitor's Agent received the Notice of Claim to notify the Indemnitee that the Indemnitor's Agent will assume the defense or prosecution of such Third Party Claim and any litigation resulting therefrom with counsel of its choice (reasonably satisfactory to the Indemnitee) and at its sole cost and expense (a "Third Party Defense"), without prejudice to its right to dispute that the Third Party Claim is within the scope of their indemnity obligation hereunder. Any Indemnitee shall have the right to employ separate counsel in any such Action and to participate in the defense thereof, but the fees and expenses of such counsel shall not be at the expense of the Indemnitors unless (A) the Indemnitor's Agent shall have failed, within the time after having been notified by the Indemnitee of the existence of the Third Party Claim as provided in the first sentence of this paragraph (b), to assume the defense of such Third Party Claim, or (ii) the employment of such counsel has been specifically authorized in writing by the Indemnitor's Agent.

              (d)    The Indemnitor's Agent will not be entitled to assume the Third Party Defense if:

                    (i)    a Third Party Claim seeks, in addition to or in lieu of monetary damages, any injunctive or other equitable relief (except where non-monetary relief is merely incidental to a primary claim or claims for monetary damages);

                    (ii)   the claim for indemnification relates to or arises in connection with any criminal proceeding, action, indictment, allegation or investigation;

                    (iii)  under applicable standards of professional conduct, a conflict on any significant issue exists between the Indemnitee and the Indemnitor's Agent in respect of such Third Party Claim;

                    (iv)   upon petition by the Indemnitee, the appropriate court rules that the Indemnitor's Agent failed or is failing to vigorously prosecute or defend such Third Party Claim; or

                    (v)    if the Indemnitee is a Parent Indemnified Person, the amount of claimed Losses subject to all outstanding Notices of Claim exceeds the sum of the value of the Escrow Shares and other property remaining in the Escrow Fund and the remaining amounts payable under the Note.

              (e)    If by reason of the Third Party Claim a lien, attachment, garnishment or execution is placed upon any of the property or assets of such Indemnitee, the Indemnitor's Agent, if it desires to exercise its right to assume such Third Party Defense, must furnish a satisfactory indemnity bond to obtain the prompt release of such lien, attachment, garnishment or execution.

              (f)    If the Indemnitor's Agent assumes a Third Party Defense, it will take all steps necessary in the defense, prosecution, or settlement of such claim or litigation.  The Indemnitor's Agent will not consent to the entry of any judgment or enter into any settlement except with the written consent of the Indemnitee; provided, however, the consent of the Indemnitee shall not be required if all of the following conditions are met: (i) the terms of the judgment or proposed settlement include as an unconditional term thereof the giving to the Indemnitee by the third party of a release of the Indemnitee from all liability in respect of such Third Party Claim; (ii) there is no finding or admission of (A) any violation of Law by the Indemnitee (or any Affiliate thereof), (B) any violation of the rights of any Person and (C) no effect on any other Action or claims of a similar nature that may be made against the Indemnitee (or any Affiliate thereof); and (iii) the sole form of relief is monetary damages which are paid in full by the Indemnitor's Agent. The Indemnitor's Agent shall conduct the defense of the Third Party Claim actively and diligently, and the Indemnitee will provide reasonable cooperation in the defense of the Third Party Claim. Notwithstanding the foregoing, the Indemnitee shall have the right to pay or settle any Third Party Claim, provided that in such event, subject to the following sentence, it shall waive any right to indemnity therefor by the Indemnitors for such claim unless the Indemnitor's Agent shall have consented to such payment or settlement. If the Indemnitor's Agent is not reasonably conducting the Third Party Defense in good faith, the Indemnitee shall have the right to consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnitor's Agent and the Indemnitors shall reimburse the Indemnitee promptly for all Losses incurred in connection with such judgment or settlement.

              (g)    In the event that (i) an Indemnitee gives Notice of Claim to the Indemnitor's Agent and the Indemnitor's Agent fails or elects not to assume a Third Party Defense which the Indemnitor's Agent had the right to assume under this Section 7.3 or (ii) the Indemnitor's Agent is not entitled to assume the Third Party Defense pursuant to this Section 7.3, the Indemnitee shall have the right, with counsel of its choice, to defend, conduct and control the Third Party  Defense.  In each case, the Indemnitee shall conduct the Third Party Defense actively and diligently, and the Indemnitors.  The Indemnitee shall have the right to consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim on such terms as it may deem appropriate; provided, however, that the amount of any settlement made or entry of any judgment consented to by the Indemnitee without the consent of the Indemnitor's Agent (which consent shall not be unreasonably withheld or delayed) shall not be determinative of the validity of the claim. If the Indemnitor's Agent does not elect to assume a Third Party Defense which it has the right to assume hereunder, the Indemnitee shall have no obligation to do so.

      7.4    Non-Third Party Claims.  Indemnitee will send a Notice of Claim to the Indemnitor's Agent promptly following discovery by any Indemnitee of any matter that gives rise to a claim of indemnity pursuant hereto and that does not involve a Third Party Claim being asserted against it, together with a detailed breakdown of the asserted Losses with appropriate supporting documentation.  If the Indemnitee is a Parent Indemnified Person, concurrently therewith Indemnitee shall send a duplicate copy of such Notice of Claim to the Escrow Agent. Failure or delay in notifying the Indemnitor's Agent will not relieve the Indemnitors of any liability they may have to the Indemnitee so long as the notice is given within prior to the applicable Expiration Date, except and only to the extent that such failure or delay causes actual harm to the Indemnitors with respect to such claim. The Indemnitor's Agent will reasonably cooperate and assist the Indemnitee in determining the validity of the claim for indemnity. Indemnitor's Agent will have thirty (30) days from receipt of such a Notice of Claim to notify the Indemnitee that it disputes any portion of the claim to which the Notice of Claim relates.

      7.5    Claims Upon Escrow Fund or Exercises of Right of Setoff.  Notwithstanding any other provision of this ARTICLE VII, if Hoover does not timely give notice to Parent and, if applicable, the Escrow Agent in accordance with the terms of the Escrow Agreement, that she disputes a claim for indemnity that is subject to the Notice of Claim, the Losses specified in such Notice of Claim will be conclusively deemed Losses subject to indemnification hereunder and the Escrow Agreement and the validity of any exercise of a right of setoff under the Note that is described in the Notice of Claim will be deemed to be conclusively established. In the event that Hoover timely gives notice to Parent and, if applicable, the Escrow Agent pursuant to the Escrow Agreement, that she disputes such claim, the dispute shall be resolved in accordance with the terms of the Escrow Agreement.

ARTICLE VIII

RELEASES

      8.1    Releases by Stockholders and Hoover.  Each of the Stockholders and Hoover, for themselves and on behalf of their respective successors, heirs, personal representatives, beneficiaries, agents, successors and assigns, hereby releases, remises and forever discharges the Surviving Corporation and its predecessors, successors and assigns, and the directors, officers, employees, agents and representatives of the foregoing, of and from any and all agreements, debts, liabilities and obligations of any nature, fixed or contingent, known or unknown, whether at law or at equity, by reason of any event, occurrence, circumstances or matter of any nature which occurred or existed at any time on or before the Closing Date, except for claims:

              (a)    For remuneration and benefits in the ordinary course of business for the current pay period;

              (b)    Arising out of this Agreement and the other Transaction Documents; and

              (c)    For indemnification of Hoover arising out of her service prior to the Closing Date as a director and/or officer of the Company.

      8.2    Acknowledgement by Stockholders and Hoover.  Each of the Stockholders and Hoover represents and warrants to the Surviving Corporation that it or she understands, comprehends and appreciates the meaning and significance of Section 1542 of the Civil Code of the State of California and, having such understanding, comprehension and appreciation, hereby waives any and all rights it or she may have under said Section 1542, which provides: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him, must have materially affected his settlement with the debtor."  Each of the Stockholders and Hoover acknowledges that it and she have read the releases set forth in this ARTICLE VIII and that each of them has received the advice of counsel with respect to them.

      8.3    Releases by Parent, Company and Surviving Corporation.  Each of the Parent, Company and Surviving Corporation, for themselves and on behalf of their respective successors, heirs, personal representatives, beneficiaries, agents, successors and assigns, hereby releases, remises and forever discharges each Stockholder and Hoover and their respective trustees, predecessors, successors and assigns, and the directors, officers, employees, agents and representatives of the foregoing, of and from any and all agreements, debts, liabilities and obligations of any nature, fixed or contingent, known or unknown, whether at law or at equity, by reason of any event, occurrence, circumstances or matter of any nature which occurred or existed at any time on or before the Closing Date, except for claims arising out of this Agreement and the other Transaction Documents.

      8.4    Acknowledgement by Parent, Company and Surviving Corporation.  Each of the Parent, Company and Surviving Corporation represents and warrants to each Stockholder and Hoover that it understands, comprehends and appreciates the meaning and significance of Section 1542 of the Civil Code of the State of California and, having such understanding, comprehension and appreciation, hereby waives any and all rights it may have under said Section 1542, which provides: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him, must have materially affected his settlement with the debtor."  Each of the Parent, Company and Surviving Corporation acknowledges that it has read the releases set forth in this ARTICLE VIII and that each of them has received the advice of counsel with respect to them.

ARTICLE IX

DEFINITIONS

      9.1    Definitions.  In this Agreement, the following terms have the meanings specified or referred to in this Section 9.1 which shall be equally applicable to both the singular and plural forms.  Any agreement referred to below shall mean such agreement as amended, supplemented and modified from time to time to the extent permitted by the applicable provisions thereof and by this Agreement.

             "Action" means any action, suit or proceeding, claim, arbitration, litigation or investigation.

             "Affiliate" means, (a) with respect to any Person other than an individual, any other Person which directly or indirectly controls, is controlled by or is under common control with such Person, and (b) with respect to any individual, any member of such individual's family.

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

             "Court Order" means any .judgment, order, writ, injunction, award, decree, stipulation or determination of any foreign, federal, state or local Governmental Entity, and any award in any arbitration proceeding.

             "Encumbrance" means any security interest, lien, pledge, charge, option, right of first refusal, mortgage, indenture, encumbrance, claim, condition, easement, indebtedness, defect in title, right of way, building or use restriction, exception, reservation, limitation, covenant or other restriction of any kind, nature or description, whether fixed or contingent, including, any restriction on use, voting, transfer, receipt of income or exercise of any other ownership attribute.

             "Environmental Laws" means any and all foreign, Federal, state, local or municipal Laws, rules, orders, regulations, statutes, ordinances, codes, executive orders, legally binding decrees, or other written requirements of any Governmental Entity regulating, relating to or imposing liability or standards of conduct concerning pollution or protection of the environment, human health or safety or relating to exposure of any kind of Hazardous Materials, as have been or are now in effect, including but not limited to: the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq.  ("CERCLA"); the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the Clean Air Act, 42 U.S.C.  Section 7401 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.; the Emergency Planning and Community Right to Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300(f) et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act 7 U.S.C. Section 136 et seq.; the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section 6901 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; and any similar or implementing state or local Law.

             "Environmental Permits" means any and all permits, licenses, registrations, notifications, exemptions and any other authorization required under any Environmental Law as of the Closing Date.

             "Escrow Agent" means JP Morgan Chase.

             "Escrow Agreement" means an escrow agreement between Parent, Stockholders, Hoover and Escrow Agent in the form attached hereto as Exhibit E hereto pursuant to which the Escrow Agent will hold and release the Escrow Shares.

             "Escrow Fund" means the Escrow Shares held by the Escrow Agent and all income, proceeds and interest thereon.

             "Expiration Date" has the meaning set forth in Section 7.1.

             "GAAP" means U.S. generally accepted accounting principles, consistently applied.

             "Governmental Entity" means any foreign, federal, national, state, local, municipal or other government, any subdivision, agency, commission or authority thereof, or any quasi-Governmental Entity, court, tribunal, instrumentality or regulatory body or other authority exercising any taxing or tax regulatory authority.

             "Hazardous Materials" means any hazardous substance, hazardous waste, hazardous material, gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products, polychlorinated biphenyls or polychlorinated biphenyl containing materials, urea- formaldehyde insulation, friable asbestos or friable asbestos-containing materials, radon, lead-based paint, chemicals, substances, pollutants, contaminants, radioactivity, and any other materials or substances of any kind, whether solid, liquid or gas that is regulated pursuant to any Environmental Law or as to which there can be liability under any Environmental Law.

             "Heston-Baston Payables" means the accounts payable of the Company to Colin Baston and Marv Heston or their respective affiliates, in the aggregate, which shall, as of the Effective Time, be in the aggregate amount of $175,000.

             "Intentional Breach" means a knowing or intentional misrepresentation or breach of this Agreement by the Company, a Stockholder or Hoover.

             "IRS" means the United States Internal Revenue Service.

             "Knowledge" means (a) with respect to the Company, actual knowledge or such knowledge as a reasonable person would acquire after reasonable inquiry of Hoover, and (b) with respect to Parent, actual knowledge or such knowledge as a reasonable person would acquire after reasonable inquiry, of Hugh T. Regan or James Pelrin.

             "Law" means any federal, state, local or foreign law (including common law), constitution, statute, code, ordinance, rule, regulation, executive order or similar requirement.

             "Leased Premises" has the meaning set forth in Section 3.12(a).

             "Material Adverse Change" or "Material Adverse Effect" means (i) any change in, or effect on, the business or prospects of the Company as currently conducted or currently contemplated that is reasonably likely to be materially adverse to the business, operations, condition (financial or otherwise), prospects, assets or liabilities of the Company or (ii) any material adverse effect on the ability of any party hereto to consummate the transactions contemplated by this Agreement; in each case other than arising from or relating to (1) general business or economic conditions, (2) national or international political or social conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States, (3) financial, banking, or securities markets (including any disruption thereof and any decline in the price of any security or any market index), or (4) changes in United States generally accepted accounting principles.

             "Order" means any award, injunction, judgment, decree, order, ruling, subpoena or verdict or other decision entered, issued or rendered by any Governmental Entity.

             "Permitted Encumbrance" means (i) any statutory lien for Taxes not yet due; (ii) any statutory lien of a landlord, carrier, warehouseman, mechanic or materialman incurred for sums not yet due; (iii) purchase money claims and claims securing retail payments under capital lease arrangements; and (iv) liens that are immaterial in character, amount and extent and which do not materially detract from the value or interfere with the present use of the properties they affect.

             "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or Governmental Entity.

             "Pre-Closing Environmental Conditions" means any and all conditions of any of the Leased Premises, or any other property formerly (since December 31, 2005) owned or leased by the Company, or that is attributable to the operations or properties of the Company, including soil, surface water and groundwater contamination, resulting from the disposal or release of Hazardous Materials, which condition was in existence on, in, under or at, or arose from, such property on or before the Closing Date including any migration of Hazardous Materials first released prior to the Closing Date.

             "Prime Rate" means, on any date, a variable rate per annum equal to the rate of interest most recently published by The Wall Street Journal as the "prime rate" at large U.S. money center banks.

             "Product" has the meaning set forth in Section 3.27(a).

             "Real Estate Lease" has the meaning set forth in Section 3.12(a).

             "Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment or the workplace of any Hazardous Materials, or otherwise as defined in any Environmental Law.

             "Tax" or "Taxes" means, with respect to any Person, all federal, state, county, local and foreign taxes, including but not limited to income (whether net or gross), alternative or add-on minimum, estimated, accumulated earnings, gross income, gross receipts, profits, franchise, windfall profits, severance, property, production, sales, use, transfer, gains, occupation, privilege, license, excise, employment, payroll, wage, unemployment, disability, workers' compensation, social security, withholding, personal holding company, value-added, capital, stamp, premium, environmental (including taxes under Code Section 59A), capital stock, real property, personal property, registration or minimum tax, or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or any penalties, additions to tax or additional amounts imposed by any Governmental Entity on such Person or the assets of such person (if any).

             "Tax Liabilities" mean (a) all liabilities for actual Taxes and (b) all reasonable out-of-pocket costs and expenses related thereto incurred as a result of the commencement of a Tax Proceeding (including, without limitation, reasonable attorneys' and accountants' fees).

             "Tax Proceeding" means any audit, other administrative proceeding or judicial proceeding involving Taxes.

             "Tax Return" means any return, report, estimate or similar statement filed or required to be filed with any Governmental Entity with respect to any Taxes (including any attached schedules or supporting information), including, without limitation, any consolidated, combined and unitary return, information return, claim for refund, amended return and declaration of estimated Tax.

             "Transaction Documents" means this Agreement, the Escrow Agreement and the Notes.

ARTICLE X

MISCELLANEOUS

     10.1    Modifications, Waiver of Rights.  Any amendment, change or modification of this Agreement shall be void unless in writing and signed by all parties hereto.  No failure or delay by any party hereto in exercising any right, power or privilege hereunder (and no course of dealing between or among any of the parties) shall operate as a waiver of any such right, power or privilege.  No waiver of any default on any one occasion shall constitute a waiver of any subsequent or other default.  No single or partial exercise of any such right, power or privilege shall preclude the further or full exercise thereof.

     10.2    Notices.  All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, by facsimile (receipt acknowledged), recognized overnight courier (receipt acknowledged) or by certified mail return receipt confirmed, addressed as follows:

If to Parent, Merger Sub or the Surviving Corporation:

inTEST Corporation
7 Esterbrook Lane
Cherry Hill, NJ 08003
Fax No.: (856) 751-1222
Attention: Hugh T. Regan Jr.

With a copy to:

Saul Ewing LLP
1500 Market Street, 38th Floor
Philadelphia, PA  19102
Fax No.:  215 ###-###-####
Attention:  Dennis J. Brennan, Esq.

If to the Company, either Stockholder or Hoover:

1723 Hacienda Place
El Cajon, CA  92020
Fax No.:  
Attention:   Sandy L. Hoover

with a copy to:

Ferris & Britton, A.P.C.
401 W. A Street # 1600
San Diego, CA 92101
Fax No.:  (619) 232-9316
Attention:  Gary Moyer, Esq.

or to such other address as to any party hereto as such party shall designate by like notice to the other parties hereto.  

     10.3    Counterparts.  This Agreement may be executed by facsimile and in one or more counterparts, each of which shall be deemed an original but all of which counterparts collectively shall constitute one instrument.  The transmission of a signed counterpart of this Agreement by facsimile or by portable document file ("PDF") shall have the same force and effect as delivery of an original signed counterpart of this Agreement, and shall constitute valid and effective delivery for all purposes.  If either party delivers a signed counterpart of this Agreement by transmission of a facsimile or PDF, it shall also send promptly thereafter by overnight courier or personal delivery a signed original counterpart of this Agreement to the other party, but failure to do so shall not render this Agreement void or voidable by either party.

     10.4    Expenses.  Except as expressly provided herein, each of the parties hereto will bear all costs, charges and expenses incurred by such party in connection with this Agreement and the consummation of the transactions contemplated herein, including, without limitation, attorneys' fees and disbursements incurred in connection with the negotiation and preparation of this Agreement.  Parent agrees that it or Surviving Corporation will bear the cost of the work by LevitzZack, CPAs, in connection with the preparation by the Company for an audit of Company's calendar year 2006 and 2007 financial statements and of any other pre-closing financial statements of the Company that Parent or Surviving Corporation choose to have audited.

              (a)    The parties agree that Ferris & Britton, A Professional Corporation ("F&B"), has represented both Stockholders and Hoover, on the one hand, and Company, on the other hand, with respect to this Agreement.  The parties agree that the aggregate fees and expenses of F&B shall be allocated and paid 50% by Stockholders and Hoover, on the one hand, and 50% by Company, on the other hand.

              (b)    Parent, Company and Surviving Corporation expressly consent to F&B and/or its individual attorneys continuing to represent any Stockholder and/or Hoover following the Closing, despite F&B's prior representation of Company, including representation of any Stockholder and/or Hoover following the Closing on matters relating in any way to this Agreement or the Transaction Documents.

     10.5    Arbitration. Except for disputes, controversies, or claims arising under Section 6.1(b) hereto and for other claims seeking specific performance or injunctive or other equitable relief, and except as expressly provided elsewhere in this Agreement or the other Transaction Documents, any dispute, controversy, or claim arising under or relating to this Agreement or the other Transaction Documents or any breach or threatened breach thereof ("Arbitrable Dispute") shall be resolved by final and binding arbitration administered by the American Arbitration Association ("AAA") under its Commercial Arbitration Rules, subject to the following:

              (a)    Any party may demand that any Arbitrable Dispute be submitted to binding arbitration in accordance with this Section 10.5. The demand for arbitration shall be in writing, shall be served on the other party in the manner prescribed herein for the giving of notices, and shall set forth a short statement of the factual basis for the claim, specifying the matter or matters to be arbitrated.

              (b)    The arbitration shall be conducted by a panel of three arbitrators, one selected by Parent, one selected by Hoover and the third to be selected jointly by the arbitrators selected by Parent and Hoover (collectively, the "Arbitrators"), who shall conduct such evidentiary or other hearings as they deem necessary or appropriate and thereafter shall make their determination as soon as practicable. If any party fails to appoint an arbitrator to be appointed by such party as provided in the preceding sentence within 30 days after delivery of a demand for arbitration, then AAA shall appoint such arbitrator. Any arbitration pursuant hereto shall be conducted by the Arbitrators under the guidance of the Federal Rules of Civil Procedure and the Federal Rules of Evidence, but the Arbitrators shall not be required to comply strictly with such Rules in conducting any such arbitration. All such arbitration proceedings shall take place in Wilmington, Delaware, if initiated by Parent or Surviving Corporation, or in the state of Hoover's residence, if initiated by a Stockholder or Hoover.

              (c)    Except as provided herein:

                    (i)    each party to the arbitration shall bear its own "Costs and Fees," which are defined as all reasonable pre award expenses of the arbitration, including travel expenses, out of pocket expenses (including, but not limited to, copying and telephone) expert and other witness fees, and reasonable attorney's fees and expenses;

                    (ii)   the fees and expenses of the Arbitrators and all other costs and expenses incurred in connection with the arbitration ("Arbitration Expenses") shall be borne equally by the parties to the arbitration; and

                    (iii)  notwithstanding the foregoing, the Arbitrators shall be empowered to require any one or more of the parties to the arbitration to bear all or any portion of such Costs and Fees and/or the Arbitration Expenses in the event that the Arbitrators determine such party has acted unreasonably or in bad faith.

              (d)    The Arbitrators shall have the authority to award any remedy or relief that a Court of the State of Delaware could order or grant, including, without limitation, specific performance of any obligation created under the Transaction Documents, the awarding of Losses or punitive damages, the issuance of an injunction, or the imposition of sanctions for abuse or frustration of the arbitration process. The Arbitrators shall render their decision and award upon the concurrence of at least two (2) of their number.  Such decision and award shall be in writing and counterpart copies thereof shall be delivered to each party to the arbitration. The decision and award of the Arbitrators shall be binding on all parties. In rendering such decision and award, the Arbitrators shall not add to, subtract from or otherwise modify the provisions of the Transaction Documents and shall make its determinations in accordance therewith. Any party to the arbitration may seek to have judgment upon the award rendered by the Arbitrators entered in any court having jurisdiction thereof.

              (e)    Each party agrees that it will not file any suit, motion, petition or otherwise commence any legal action or proceeding for any matter which is required to be submitted to arbitration as contemplated herein except in connection with the enforcement of an award rendered by the Arbitrators. Upon the entry of an order dismissing or staying any action or proceeding filed contrary to the preceding sentence, the party which filed such action or proceeding shall promptly pay to the other party the reasonable attorney's fees, costs and expenses incurred by such other party prior to the entry of such order.

     10.6    Binding Effect; Assignment.  This Agreement shall be binding upon and inure to the benefit of Parent and the Company and their representatives, successors, heirs and permitted assigns, in accordance with the terms hereof.  Neither the Company, any Stockholder or Hoover may assign this Agreement or any of its rights or obligations hereunder without the prior written consent of Parent.

     10.7    Entire Agreement.  This Agreement and the other schedules and agreements referred to herein (including the Assignment of Lease and Consent to Assignment of Lease among the Company, Merger Sub and HELF Investments), constitute the entire agreement between the parties hereto and supersede all prior agreements, representations, warranties, statements, promises, information, arrangements and understandings, whether oral or written, express or implied, with respect to the subject matter hereof.

     10.8    Governing Law.  This Agreement and its validity, construction, enforcement, and interpretation shall be governed by the substantive laws of the State of Delaware.

     10.9    Invalid Provisions.  If any provision of this Agreement is deemed or held to be illegal, invalid or unenforceable, this Agreement shall be considered divisible and inoperative as to such provision to the extent it is deemed to be illegal, invalid or, unenforceable, and in all other respects this Agreement shall remain in full force and effect; provided, however, that if any provision of this Agreement is deemed or held to be illegal, invalid or unenforceable there shall be added hereto automatically a provision as similar as possible to such illegal, invalid or unenforceable provision and be legal, valid and enforceable.  Further, should any provision contained in this Agreement ever be reformed or rewritten by any judicial body of competent jurisdiction, such provision as so reformed or rewritten shall be binding upon all parties hereto.

     10.10   Remedies.  The Company acknowledges that the Business is unique, and recognizes and affirms that in the event of a breach of this Agreement by the Company, monetary damages may be inadequate and Parent may have no adequate remedy at law.  Accordingly, in the event of any such breach, Parent may, in addition to any other rights and remedies existing in its favor, enforce its rights and the obligations of the Company hereunder by an Action or actions for specific performance, injunctive and/or other relief, without any requirement of proving actual damages.  Each party's remedies under this Agreement are cumulative and shall not exclude any other remedies to which any party may be lawfully entitled.

     10.11   Schedules.  All capitalized terms used in the schedules hereto, unless otherwise defined therein have the meaning set forth in this Agreement.  The section references referred to in the schedules are to the sections of this Agreement.
 
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement and Plan of Merger to be duly executed as of the date and year first above written.

List of Exhibits:

EXHIBIT A

CERTIFICATE OF MERGER
OF
SIGMA SYSTEMS CORP.
INTO
SIGMA ACQUISITION, INC.

The undersigned corporation Sigma Acquisition, Inc.

DOES HEREBY CERTIFY:

FIRST: That the name and state of incorporation of each of the constituent corporations of the merger are as follows:

NAME                                            STATE OF INCORPORATION

Sigma Acquisition, Inc.                                         Delaware
Sigma Systems Corp.                                           California

SECOND: That an Agreement of Merger between the parties to the merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with the requirements of Section 252 of the General Corporation Law of Delaware and Section 1100 of the General Corporation Law of California.

THIRD: That the name of the surviving corporation of the merger is Sigma Acquisition, Inc., a Delaware corporation.

FOURTH: That Article FIRST of the Certificate of Incorporation of Sigma Acquisition, Inc., a Delaware corporation, which is the surviving corporation of the merger, shall be amended to read in its entirety as follows: "The name of the corporation is SigmaSYS Corp.".

FIFTH: That the executed Agreement of Merger is on file at the principal place of business of the surviving corporation, the address of which is:

7 Esterbrook Lane, Cherry Hill, New Jersey 08003

SIXTH: That a copy of the Agreement of Merger will be furnished by the surviving corporation, on request and without cost, to any stockholder of either constituent corporation.

SEVENTH: The authorized capital stock of each foreign corporation which is a party to the merger is as follows:

                                                                                                           Par value per share
                                                                                                             or statement that
                                                                                                            shares are without
Corporation                     Class                 Number of Shares                      par value

Sigma Systems Corp.     Common                 1,000,000                            No par value

EIGHTH: That this Certificate of Merger shall be effective upon filing with the Secretary of the State of Delaware (the "Effective Date").

Dated: October__, 2008

PROMISSORY NOTE #1

[There would be two separate notes, one to each Stockholder, pro rata in accordance with their respective stock ownership. The Note below is the form of Note payable to the 75.77332% stockholder, with the Note payable to the other Stockholder being identical except for the payee name, principal amount and share percentage.]

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THIS NOTE MAY NOT BE TRANSFERRED OR PLEDGED UNLESS IT HAS BEEN REGISTERED UNDER ALL APPLICABLE SECURITIES LAWS, OR THE MAKER HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE MAKER TO THE EFFECT THAT THE PROPOSED TRANSACTION IS EXEMPT FROM SUCH REGISTRATION REQUIREMENTS.

FOR VALUE RECEIVED, inTEST Corporation, a Delaware corporation ("Maker"), promises to pay to [Sandy L. Hoover, Trustee of the Sandy L. Hoover Trust, a sub-trust of the Robert T. Stewart Separate Property Trust dated March 17, 2003] (hereinafter referred to as "Payee"), the principal sum of [_________] Dollars ($[__________]) in lawful money of the United States of America, together with interest on the unpaid principal amount at the "Prime Rate" plus one and one quarter percent (1.25%). For the purposes of this Note, the "Prime Rate" means a variable rate per annum equal to the rate of interest most recently published by The Wall Street Journal as the "prime rate" at large U.S. money center banks, which Prime Rate is, as of the date of this Note, ___ per annum. This Note is non-negotiable. The obligations under this Note are secured pursuant to a security agreement dated ___________, 2008 among SigmaSYS Corp., Payee and the payee under the Ancillary Note (defined below) (the "Security Agreement").

This Note is one of two Notes referred to in that certain Agreement and Plan of Merger dated as of October ___, 2008 by and among Maker, Payee, Sigma Systems Corp. and certain other parties (the "Merger Agreement"), and together with the Ancillary Note (defined below) shall be subject to setoff as set forth in the Merger Agreement, provided that any such setoff against this Note shall be [75.77332%] of the total amount setoff. Any such setoffs against amounts due under this Note shall be applied first to principal and then to interest. Except as described in this paragraph, the obligations of Maker are an absolute, unconditional and irrevocable promise to pay without setoff or deduction all payments due strictly and according to the terms of this Note and no reference to any collateral agreement is intended to give rise to any right of setoff or deduction.

By way of background, Maker issued two promissory Notes under the Merger Agreement, this Note and a promissory note of the same date and with identical terms, except the payee and initial principal amount of such other note are different (the "Ancillary Note").

Principal and interest due under this Note shall be payable as follows: (i) a payment of accrued but unpaid interest on the first anniversary of the Closing Date; and (ii) subsequent annual payments of principal and accrued but unpaid interest on each of the next four anniversaries of the Closing Date, with the amount of each such payments of principal and interest equaling the sum of (A) the accrued but unpaid interest as of such payment date plus (B)(I) the total amount of principal then outstanding divided by (II) the number of payments of principal then remaining to be paid (such that the portion of the outstanding principal due on each such anniversary would be equal, unless the principal has been prepaid, set off or otherwise reduced, in which case the payments remaining after any such reduction would be equal).

All payments shall be made to Payee at the address for notices to Payee or at such other place as the holder may from time to time designate for payments. Maker shall have the privilege of prepaying principal in whole or in part at any time, and such prepayments may be made without penalty or premium; provided, however, that each prepayment shall be accompanied by any accrued interest then due. However, excess payments or prepayments shall not be credited as regular future payments, nor excuse the Maker from making the payments provided herein.

Maker will be in default if any of the following happens: (a) Maker fails to make any payment hereunder or under the Ancillary Note within ten days of the due date thereof; (b) with respect to payment obligations of Maker under the Merger Agreement, it is finally determined (by agreement of Maker or, alternatively, by a non-appealable arbitration or judicial decision) that Maker has failed to make any payment to Payee, the payee under the Ancillary Note or Sandy L. Hoover, as the case may be, strictly in the manner provided in this Note, the Ancillary Note or the Merger Agreement; (c) Maker becomes insolvent, a receiver is appointed for any part of Maker’s property, Maker makes an assignment for the benefit of creditors, or any proceeding is commenced either by Maker or against Maker under any bankruptcy or insolvency laws, or (d) there occurs a default on the part of SigmaSYS Corp. under the Security Agreement. Maker and all endorsers of this Note waive presentment for payment, protest, notice of dishonor, and except as specifically provided above notice before declaring a default.

Upon default, the Payee or such holder hereof may declare the entire unpaid balance of principal of and interest on this Note to be immediately due and payable, without notice, and then Maker will pay that amount to Payee. Any overdue principal of and, to the extent permitted by law, overdue interest on, this Note shall automatically and without notice bear interest, payable on demand, until paid at a rate equal to four percent (4%) per annum over the interest rate set forth herein. Time is of the essence hereof.

Any term of this Note may be amended and the observance of any term of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively) only in writing by the holder hereof. Maker or any holder of this Note may delay in enforcing its rights or in giving any notices without losing its rights.

This Note shall be construed according to, and shall be governed by, the laws of the State of Delaware. The provisions of this Note shall be deemed severable, so that if any provision hereof is declared invalid under the laws of any state where it is in effect, or of the United States, all other provisions of this Note shall continue in full force and effect. This Note may be amended only by a writing signed on behalf of each party.

All notices to be given with regard to this Note shall be in writing and shall be deemed to have been duly given when delivered by hand, by facsimile (receipt acknowledged), recognized overnight courier (receipt acknowledged) or by certified mail return receipt confirmed, addressed as follows: (a) if to Maker: inTEST Corporation, 7 Esterbrook Lane, Cherry Hill, NJ 08003, Fax No.: (856) 751-1222, Attention: Hugh T. Regan Jr. and (b) if to Payee: c/o Sandy L. Hoover, 1723 Hacienda Place, El Cajon, CA 92020, or to such other address as to either as designated by like notice to the other.

If this Note is placed in the hands of any attorney for collection, regardless of whether or not a lawsuit is filed, Maker shall reimburse holder for any reasonable attorney fees incurred.

This Note shall be binding upon the successors and assigns of Maker, and shall inure to the benefit of and be enforceable by the successors and assigns of Payee or any other holder hereof. This Note is intended to take effect as an instrument under seal.

IN WITNESS WHEREOF, the undersigned has duly executed, sealed and delivered this Note as of the date and year first written above.

EXHIBIT C

Board of Directors of
inTEST Corporation
7 Esterbrook Lane
Cherry Hill, NJ 08003

Ladies and Gentlemen:

This opinion is being furnished to you in connection with that certain Agreement and Plan of Merger (together with all exhibits and schedules thereto, the "Agreement") by and amongst: (i) Sigma Systems Corp., a California corporation (the "Company"), (ii) inTEST Corporation, a Delaware corporation (the "Parent") (iii) Sigma Acquisition, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent ("Merger Sub"), (iv) Sandy L. Hoover, Trustee of the Exemption Trust, a sub-trust of the Robert T. Stewart Separate Property Trust, dated March 17, 2003 (the "Exemption Trust"), (v) Sandy L. Hoover, Trustee of the Sandy L. Hoover Trust, a sub-trust of the Robert T. Stewart Separate Property Trust, dated March 17, 2003 (the "Q-TIP Trust" and, together with the Exemption Trust, the "Stockholders"), and (vi) Sandy L. Hoover ("Hoover"). Capitalized terms used in this opinion letter that are not otherwise defined herein shall have the meaning ascribed to them in the Agreement. This opinion is delivered pursuant to Section 5.1(m) of the Agreement and in satisfaction of a condition to Parent and Merger-Sub's obligations to consummate the transactions contemplated by the Agreement.

We presently and in the past have acted as special counsel to the Company only with respect to certain, specific legal matters requested of us by the Company, including but not limited to the drafting of the Agreement and the ancillary documents and agreements referenced therein and/or required thereby, including this opinion letter (collectively with the Agreement, the "Transaction Documents"). We have not previously represented the Stockholders or Hoover, individually or in her capacity as trustee, other than in connection with the drafting of the Transaction Documents. We do not continuously and regularly represent the Company in its business affairs and instead only represent the Company on a sporadic, as-requested basis.

In rendering the opinions hereinafter expressed, we have examined and relied upon only the following documents and instruments:

1. A copy of the articles of incorporation of the Company, as amended and restated on July 14, 1995, certified by the Secretary of State of the State of California;
2. A certificate of status from the California Secretary of State indicating that the Company is in good standing in California as of _______________;
3. The bylaws of the Company, as amended and restated effective February 10, 2003, certified by its Secretary;
4. The Transaction Documents;
5. A copy of the Declaration of Trust of the Robert T. Stewart Separate Property Trust dated March 17, 2003, and a Certification of Trust with respect to that trust and its division into two sub-trusts following the death of Robert T. Stewart, namely the Exemption Trust and the Q-TIP Trust, executed by Hoover on March 18, 2005 (the "Trust Documents");
6. Copies of resolutions of the shareholders and of the sole member of the board of directors of the Company, with respect to the approval of the Transaction Documents;
7. Such advices, certificates and other documents of public officials, officers and representatives of the Company, the Stockholders and others as we have deemed relevant or appropriate as a basis for the opinions set forth herein; and
8. Such other agreements, documents are records as we deemed relevant or appropriate as a basis for the opinions set forth herein.

In conducting our examination, we have assumed, without investigation, the genuineness of all signatures, the correctness of all certificates, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, photostatic or .pdf copies and the accuracy and completeness of all records made available to us by the Company, Hoover or by either of the Stockholders. In rendering our opinions below, we have assumed, without investigation, that any certificate or other document on which we have relied that was given or dated earlier than the date of this letter continued to remain accurate insofar as relevant to such opinions, from such earlier date through and including the date of this letter. In addition, we have relied upon and assumed, without investigation or independent verification, the accuracy of the representations, warranties, and covenants as to factual matters made by any party in the Transaction Documents, and the accuracy of representations and statements as to factual matters made by the Company, Hoover, the Stockholders and any public official. Any such investigation would be beyond the scope of this opinion and of our engagement.

If and whenever a statement herein is qualified by "known to us," "we are not aware," "to our knowledge," or similar phrase, it is intended to indicate that, during the course of our representation, as applicable, of the Company, Hoover or the Stockholders, no information that would give us current actual knowledge of the inaccuracy of such statement has come to the attention of those attorneys in this firm who have rendered legal services in connection with the Agreement, the Transaction Documents or this opinion letter. However, other than the examination described above in the third paragraph of this letter, we have not undertaken any independent investigation to determine the accuracy of such statement, and any limited inquiry undertaken by us during the preparation of this opinion should not be regarded as such an investigation; no inference as to our knowledge of any matters bearing on the accuracy of any such statement should be drawn from the fact of our representation, as applicable, of the Company, Hoover or the Stockholders.

The opinions expressed herein are subject, without investigation, to the following assumptions:

1. Each of the Transaction Documents is a valid, binding, and enforceable obligation of the respective parties thereto (other than the Company, Hoover or each of the Stockholders, as applicable).
2. Other than the Company, Hoover and Stockholders, no party to the transaction contemplated by the Transaction Documents, or any document or oral agreement relating thereto, is subject to any statute, rule, or regulation, or to any impediment to which contracting parties are generally not subject, that requires the Company, Hoover, either of the Stockholders or such party to obtain the consent of, or to make a declaration or filing with, any governmental authority.
3. There is no action, suit or proceeding affecting the Company, the Stockholders or Hoover which questions the legality or propriety of the transactions contemplated by the Transaction Documents, and we have no actual knowledge that any such action, suit or proceeding exists.
4. The Transaction Documents are timely delivered by Hoover, the Company or the Stockholders, as applicable, Seller as required by the terms of such Transaction Documents.
5. All of the conditions set forth in the Transaction Documents will be satisfied or waived and any required approvals or consents with respect to the Transaction Documents have been obtained.
6. All terms, provisions, and conditions of, or relating to, the transactions contemplated by the Transaction Documents are correctly and completely reflected in the Transaction Documents, as applicable.

The opinions expressed herein are subject to the following qualifications:

1. Our opinions in paragraph 1 below as to the qualification and good standing of the Company is based solely upon copies of certificates from public officials described above regarding the qualification and good standing of the Company in the jurisdiction in which it was formed.
2. Our opinion in paragraph 2 and in clause (i) of paragraph 9 below are based solely upon copies of the Trust Documents delivered to us by the Stockholders and referenced in paragraph 5 above.
3. We express no opinion, and expressly disclaim any representation, regarding the effect of bankruptcy, insolvency, reorganization, moratorium, liquidation, receivership, assignment for the benefit of creditors, fraudulent transfer, marshaling and other laws relating to or affecting the rights and remedies of creditors generally or relating to equitable principles of general application, including but not limited to those matters expressly set forth herein.
4. We express no opinion with respect to compliance with local or municipal law, antitrust, environmental, land use, securities or labor and employment laws or regulations, nor compliance by Hoover - individually or in her capacity as an officer or director of the Company, or as trustee of the Stockholders, as applicable - with her fiduciary duties.
5. Our opinions below are limited to the extent that the performance and enforceability of any agreement by or against any party may be subject to: (i) the availability of the remedy of specific performance or of injunctive relief or of any other equitable remedy; (ii) the application by a court of the general principles of equity; and (iii) as to the enforceability against Hoover or the Stockholders of the indemnification provisions of the Agreement, principles of public policy.
6. We express no opinion, and expressly disclaim any representation, regarding the conclusive effect of certain statements, acknowledgments or recitals contained in the Agreement or any of the Transaction Documents.
7. We express no opinion as to the effect or enforceability as to any provision involving consent to or establishment of jurisdiction and/or venue, choice of law or stipulations with respect thereto or dispute resolution procedures.
8. We express no opinion, and none should be inferred, as to compliance by the Buyer with any state or federal law or regulation that may, because of the nature of its business, be applicable to the Transaction Documents.
9. Our opinions below are limited to the matters expressly set forth in this letter, and no opinion is to be implied or may be inferred beyond the matters expressly so stated.
10. We disclaim any obligation to update this opinion for events occurring after the date of this opinion.
11. For purposes of our opinion in paragraph 8, we have considered only those laws and regulations that in our experience are normally applicable to transactions of the type contemplated in the Transaction Documents, and our opinions do not extend to licenses, permits and approvals necessary for the conduct of the business of the Company. Without limiting the previous sentence, we express no opinion with respect to: (i) the effect of any land use, safety, hazardous material, environmental or similar law, or any local or regional law, or any consents, approvals, authorizations or other actions by or any filing with any city, county, or other municipality or local governmental authority; (ii) the effect of or compliance with any state or federal laws or regulations applicable to the transactions contemplated by the Transaction Documents because of the nature of the business of any party thereto other than the Company, the Stockholders or Hoover; (iii) any antitrust, antifraud, patent, copyright, trademark or other intellectual property matter; or (iv) Section 721 (as amended by Section 5021 of the Omnibus Trade and Competitiveness Act of 1988, the so-called "Exon-Florio" provision) of the Defense Production Act of 1950 and the regulations thereunder.
12. Our opinions below are limited to the effect of the federal laws of the United States and the state laws of the State of California; accordingly, we express no opinion as to the applicability of the laws of any other jurisdiction, or the effect thereof, on the transactions contemplated by the Transaction Documents, and we express no opinion regarding the statutes, administrative decisions, rules or regulations of any county, municipality, subdivision or local authority of any jurisdiction.
13. We express no opinion, and none should be inferred, as to (i) compliance by the Company with any state or federal law or regulation that may, because of the nature of its business, be applicable to the Agreement or to the Transaction Documents to which the Company is a party; (ii) federal or state income tax, franchise or other laws, rules or regulations relating to taxation; (iii) federal or state securities laws; (iv) antitrust laws; (v) the accuracy of any matter of fact or law set forth in the Agreement or any of the Transaction Documents, except to the extent that any such matter is also set forth as part of our opinion below; or (vi) any documents or the effect thereof other than the Agreement or the Transaction Documents.
14. Except for the opinions expressly provided in the numbered paragraphs below, we express no opinion regarding any specific representation or warranty of the Company, Hoover or the Stockholders, as applicable, in the Agreement or any of the Transaction Documents.

Based upon and subject to the foregoing, we are of the opinion that, under the laws of California now in effect:

1. The Company is duly incorporated and validly existing under the laws of the State of California, with the requisite corporate power and corporate authority to execute and deliver the Transaction Documents to which it is a party and to perform its obligations thereunder.
2. Each Stockholder that is a trust has been duly created and is validly existing under the laws of the State of California and each such trust possesses full power and authority to carry out the transactions contemplated by the Transaction Documents to which it is a party.
3. Each of the Transaction Documents to which the Company is a party has been duly authorized by all necessary corporate action on the part of the Company and has been duly executed and delivered by the Company.
4. Each of the Transaction Documents to which a Stockholder is a party has been duly authorized by all necessary trustee action on the part of the applicable trust Stockholder and has been duly executed and delivered by the Trustee of the applicable trust Stockholder.
5. Each of the Transaction Documents to which the Company is a party is a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.
6. Each of the Transaction Documents to which a Stockholder that is a trust is a party is a legal, valid and binding obligation of such Stockholder enforceable against such Stockholder in accordance with its terms.
7. Immediately prior to the Closing, the authorized stock of the Company consists of one million (1,000,000) shares of common stock, no par value, of which one thousand (1,000) shares (the "Common Stock") are issued and outstanding, which shares are held beneficially and of record by the Stockholders in the amounts set forth in Schedule 3.3 to the Agreement. The Common Stock has been validly issued, fully paid and non-assessable. We have not represented the Company with respect to any outstanding options, warrants or other securities or rights exercisable for or convertible into any securities of the Company nor have we, during the course of our representation of the Company, become aware of any such outstanding options, warrants or other securities or rights exercisable for or convertible into any securities of the Company.
8. The execution and delivery of the applicable Transaction Documents and the performance by the Company of its obligations thereunder do not (i) violate the articles of incorporation or bylaws of the Company, or (ii) violate any federal or California laws or regulations applicable to the Company that in our experience is typically applicable to companies engaged in the same line of business as the Company, or (iii) result in a violation of any court order or court decree known to us.
9. The execution and delivery of the applicable Transaction Documents and the performance by a Stockholder of its obligations thereunder do not (i) violate the trust instrument of such Stockholder, (ii) violate any federal or California laws or regulations applicable to such Stockholder that in our experience is typically applicable to irrevocable trust's holding shares of privately held stock, or (iii) result in a violation of any court order or decree known to us.
10. Except as disclosed in the Company Disclosure Schedule, we are not representing the Company in any lawsuit or other proceeding by or against the Company or its properties before any court, arbitrator or governmental agency or authority.

This opinion is rendered for the benefit of the addressee in connection with the transactions described in the Agreement and the other Transaction Documents and it may be relied upon by you only in connection therewith. Without our prior written consent, this opinion letter may not be: (i) relied upon by any other person or entity or for any other purpose; (ii) quoted in whole or in part or otherwise referred to in any report or document; or (iii) furnished (the original or copies thereof) to any person or entity except in connection with the enforcement of the Agreement or the other Transaction Documents.

October 6, 2008

Sandy L. Hoover, individually, and as trustee of
each of the Exemption Trust, a sub-trust of the
Robert T. Stewart Separate Property Trust dated
March 17, 2003 and of the Sandy L. Hoover
Trust, a sub-trust of the Robert T. Stewart
Separate Property Trust dated March 17, 2003
1723 Hacienda Place
El Cajon, CA 92020

We have acted as counsel to inTEST Corporation, a Delaware corporation (the "Parent") and Sigma Acquisition, Inc., a Delaware corporation (the "Merger Sub"), with regard to that certain Agreement and Plan of Merger dated as of October 6, 2008 (the "Merger Agreement") by and among the Parent, the Merger Sub, Sigma Systems Corp., a California corporation (the "Company"), the stockholders of the Company, and Sandy L. Hoover, pursuant to which, among other things, the Company would merge with and into the Merger Sub (such transaction, the "Merger"). This opinion is being rendered pursuant to Section 5.2(g) of the Merger Agreement. All capitalized terms used and not defined herein will have the meanings ascribed to them in the Merger Agreement.

In connection with this opinion letter, we have examined originals, or copies certified or otherwise identified to our satisfaction, of: (i) the certificate of incorporation of the Parent (the "Certificate of Incorporation"); (ii) the by-laws of the Parent (the "By-Laws"); (iii) the certificate of incorporation of the Merger Sub; (iv) the by-laws of the Merger Sub; (v) the Merger Agreement; (vi) the Escrow Agreement; (vii) such advices, certificates and other documents of public officials, officers and representatives of the Parent, the Merger Sub and others as we deemed relevant or appropriate as a basis for the opinions set forth herein, and (viii) such other agreements, documents and records as we deemed relevant or appropriate as a basis for the opinions set forth herein. The documents listed as included in items (v) and (vi) above are referred to herein as the "Transaction Documents."

We express no opinion concerning the laws of any jurisdiction other than the federal law of the United States and the laws of the state of Delaware, in each case in effect as of the date hereof, and exclusive of the conflict of laws provisions thereof and we express no opinion on the state securities or "Blue Sky" laws of any state. Our opinion is also limited to a consideration of judicial decisions that are published in recognized legal authorities or readily available in electronic databases.

Our opinion is specifically subject to the following assumptions and exceptions:

        a)    To the extent that we have relied upon original documents or copies thereof, we have, with your permission, assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to originals of all documents submitted to us as copies. As to questions of fact material to this opinion, we have, with your permission, relied without investigation upon the accuracy of the representations and warranties made by the Parent and the Merger Sub in the Merger Agreement and in the other Transaction Documents, corporate records, the certificates and other documents of officers and representatives of the Parent and the Merger Sub and upon statements made to us in discussions with the management of the Parent.

        b)    For the purposes of the opinions set forth in paragraph 1 below as to the valid existence and good standing of the Parent, we have, with your permission, relied solely upon a certificate of good standing of the Parent dated September 30, 2008 issued by the Secretary of State of the State of Delaware.

        c)    For the purposes of the opinions set forth in paragraph 2 below as to the valid existence and good standing of the Merger Sub, we have, with your permission, relied solely upon a certificate of good standing of the Merger Sub dated September 30, 2008 issued by the Secretary of State of the State of Delaware.

        d)    We have assumed, without verification, the requisite power (corporate or otherwise) of all parties (other than the Parent and the Merger Sub) and the due authorization, execution, and delivery of all of the relevant documents by the parties thereto (other than the Parent and the Merger Sub), and the legal capacity of all natural persons executing and delivering any such documents and that all of the relevant documents constitute legal, valid and binding obligations of each such party (other than the Parent and the Merger Sub), enforceable against such other party in accordance with their objective terms.

        e)    Our opinion is subject to and the enforceability of the Transaction Documents may be limited or affected by (a) the effect of applicable bankruptcy, insolvency, reorganization, moratorium, assignment for the benefit of creditors, liquidation, rearrangement, probate, conservatorship, fraudulent transfer, fraudulent conveyance and other similar laws (including court decisions) now or hereafter in effect and affecting the rights and remedies of creditors generally or providing for the relief of debtors, (b) the refusal of a particular court to grant (i) equitable remedies, including, without limiting the generality of the foregoing, specific performance, injunctive relief, waiver, laches, and estoppel, or (ii) a particular remedy sought under a Transaction Document as opposed to another remedy provided for therein or another remedy available at law or in equity, (c) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), including, without limitation, principles of good faith, fair dealing and reasonableness, and (d) judicial discretion.

        f)    For purposes of our opinion in paragraph 6, we have considered only those laws and regulations that in our experience are normally applicable to transactions of the type contemplated in the Transaction Documents, and our opinions do not extend to licenses, permits and approvals necessary for the conduct of business by the Parent or the Merger Sub. Without limiting the previous sentence, we express no opinion with respect to (i) the effect of any land use, safety, hazardous material, environmental or similar law, or any local or regional law, or any consents, approvals, authorizations or other actions by or any filing with any city, county, or other municipality or local governmental authority or (ii) the effect of or compliance with any state or federal laws or regulations applicable to the transactions contemplated by the Transaction Documents because of the nature of the business of any party thereto other than the Parent or the Merger Sub, or (iii) any antitrust, antifraud, patent, copyright, trademark or other intellectual property matter, or (iv) Section 721 (as amended by Section 5021 of the Omnibus Trade and Competitiveness Act of 1988, the so-called "Exon-Florio" provision) of the Defense Production Act of 1950 and the regulations thereunder.

        g)    In basing the opinions and other matters set forth herein on "our knowledge" or on facts "known to us," the words "our knowledge" or "known to us" shall mean the actual conscious awareness of facts or other information by members of the Primary Lawyer Group. The term "Primary Lawyer Group" shall mean (i) any lawyer in our firm who has had involvement in the specific transactions contemplated in the Transaction Documents or preparing this opinion or who regularly counsels the Parent with respect to corporate or transactional matters, and (ii) solely as to information relevant to a particular opinion issue or confirmation regarding a particular factual matter, any lawyer in our firm who has been primarily responsible for providing the response concerning that particular opinion issue or confirmation and without any special or additional investigation undertaken for the purposes of this opinion.

        h)    We have assumed that the terms and conditions of the transactions contemplated by the Transaction Documents have not been amended, modified or supplemented, directly or indirectly, by any other agreement or understanding of the parties or the waiver of any of the material provisions of the Transaction Documents.

        i)    Without limiting the generality of the preceding assumptions, qualifications and limitations, we express no opinion regarding the enforceability of the following:

                i.    waivers and releases of the benefit of procedural or substantive rights or defenses, including, without limitation the right to a jury trial;

                ii.    provisions requiring the Parent or the Merger Sub to indemnify any person or exculpating any such person from liability for its actions or inaction to the extent such indemnification or exculpation is contrary to public policy or law;

                iii.   provisions requiring that all waivers under, or modifications of, the Transaction Documents be in writing;

                iv.   provisions involving consent to or establishment of jurisdiction or venue, or relating to choice of law or choice of venue;

                v.    provisions for the concurrent or cumulative exercise of remedies which would have the effect of compensating you for an amount in excess of your actual loss; or

                vi.   provisions obligating a party to pay attorneys’ fees or other costs of collection in excess of what a court deems reasonable.

        k)    The enforceability of the Transaction Documents may be limited to the extent that remedies are sought for a breach that a court concludes is immaterial or does not adversely affect the Stockholders.

Based upon the foregoing, we are of the opinion that:

        1.    The Parent is a corporation validly existing and in good standing under the laws of the State of Delaware, with the requisite corporate power and authority to execute and deliver the Transaction Documents to which it is a party and to perform its obligations thereunder.

        2.    The Merger Sub is a corporation validly existing and in good standing under the laws of the State of Delaware, with the requisite corporate power and authority to execute and deliver the Transaction Documents to which it is a party and to perform its obligations thereunder.

        3.    Each of the Transaction Documents, as of the time of their respective execution and delivery, to which the Parent and the Merger Sub, respectively, are parties has been duly authorized, executed and delivered by the Parent and the Merger Sub, as applicable.

        4.    Each of the Transaction Documents to which the Parent or the Merger Sub is a party is a legal, valid and binding obligation of the Parent or the Merger Sub, as applicable, enforceable, against the Parent and the Merger Sub, as applicable, in accordance with its terms.

        5.    The authorized capital stock of the Parent consists of 25,000,000 shares of common stock, par value $0.01 per share ("Common Stock") and 5,000,000 shares of preferred stock, par value $0.01 per share. As of the date hereof, to our knowledge, the authorized and issued capital stock of Parent consisted of 9,527,206 shares of Common Stock, which does not include 139,299 treasury shares, and no shares of preferred stock. The shares of Common Stock to be issued in the Merger have been duly authorized by the Parent and, when issued in the Merger by the Parent, and delivered by the Parent in accordance with the terms of the Merger Agreement, will be validly issued, fully paid and nonassessable.

        6.    The execution, delivery and performance of the Transaction Documents by the Parent, and the consummation by the Parent of the transactions contemplated thereby, do not and will not: (i) result in a violation of the Certificate of Incorporation or By-Laws of the Parent; (ii) result in a violation of any current federal law or state law of the State of Delaware which in our experience is applicable both to general business corporations that are not engaged in regulated business activities and to transactions of the type contemplated by the Transaction Documents; or (iii) result in a violation of any court order or decree known to us. The execution, delivery and performance of the Transaction Documents by the Merger Sub, and the consummation by the Merger Sub of the transactions contemplated thereby, do not and will not: (i) result in a violation of the Certificate of Incorporation or By-Laws of the Merger Sub; (ii) result in a violation of any federal law or state law of the State of Delaware which in our experience is applicable both to general business corporations that are not engaged in regulated business activities and to transactions of the type contemplated by the Transaction Documents; or (iii) result in a violation of any court order or decree known to us.

        7.    To our knowledge, there are no pending lawsuits or other proceedings against the Parent or its properties before any court, arbitrator or governmental agency or authority that challenge the legality, validity or enforceability of the Transaction Documents.

The opinions set forth in this letter:

                    (1)    are limited to those matters which are expressly set forth in this letter, and no opinion may be inferred or implied beyond the matters expressly set forth in this letter;

                    (2)    must be read in conjunction with the assumptions, qualifications, limitations, exceptions and restrictions set forth in this letter; and

                    (3)    are rendered as of the date of this letter, and we assume no obligation to update or supplement this opinion at any time or for any reason, including, without limitation, any changes in applicable law or changes of any facts or circumstances of which we become aware or which hereafter may be brought to our attention.

This opinion letter may be relied upon only by the Company, the Stockholders and Hoover in connection with the execution and delivery of the Transaction Documents and the transactions contemplated thereby. The Company, the Stockholders and Hoover may not rely upon this opinion letter for any other purpose, and no other person or entity may rely upon this opinion letter for any purpose without our prior written consent. This opinion letter may not be referred to, or described, furnished or quoted to, any other person, firm or entity, without in each instance our prior written consent.

ESCROW AGREEMENT, dated as of October ____, 2008 (this "Agreement"), by and among inTEST Corporation ("Parent"), the stockholders ("Stockholders") of Sigma Systems Corp. (the "Company"), Sandy L. Hoover, as representative of the Stockholders (the "Stockholders’ Representative") (collectively, the foregoing are the "Transaction Parties"), and JP Morgan Chase N.A. ("Escrow Agent").

Recitals

        A.    The Transaction Parties have entered into an Agreement and Plan of Merger (the "Underlying Agreement"), dated as of October ___, 2008, pursuant to which the Company is merging with and into, and thereby becoming, a wholly-owned subsidiary of Parent, and the Stockholders are receiving, in exchange for their shares of capital stock of the Company, certain consideration consisting, in part, in the form of shares of Parent’s common stock, par value $0.01 per share (the "Parent Stock") (such transaction, the "Transaction"). The Underlying Agreement provides that Parent shall deposit certain shares of Parent’s common stock, par value $0.01 per share, into a segregated escrow account to be held by Escrow Agent to be available to fund indemnity obligations of the Seller Indemnifying Persons (as defined in the Underlying Agreement) and, to the extent not so used, to be disbursed to the Stockholders.

        B.    Escrow Agent is willing to serve as agent on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt and sufficiency of which are the hereby acknowledged, the parties hereto agree as follows:

                1.    Definitions: The following terms shall have the following meanings when used herein:

                       (a)    "Claim Notice" shall mean a written notification which contains (i) a statement in reasonable detail that a Parent Indemnified Person has incurred Losses (as defined in the Underlying Agreement) or anticipates that it will incur Losses for which such Parent Indemnified Person is entitled to indemnification pursuant to the Underlying Agreement; (ii) the amount of such Losses, if known, or, if not known, an estimate of the foreseeable maximum amount of such Losses; (iii) if the Losses relate to a Third Party Claim (as defined in the Underlying Agreement), a description of the basis for such Third Party Claim; (iv) a statement that the Indemnitee is entitled to indemnification under the Underlying Agreement for such Losses, and (v) a demand for payment in a stated amount. In any case, a Claim Notice shall conform to the requirements of the Underlying Agreement.

                       (b)    "Claim Response" shall mean a written response in which the Stockholders’ Representative shall do one of the following: (i) agree that the Parent Indemnified Person is entitled to receive all of the Claim Amount; (ii) agree that the Parent Indemnified Person is entitled to receive the amount agreed upon by the parties; or (iii) state that neither the preceding item (i) or item (ii) apply and state the amount of the Claim Amount, if any, that Stockholders’ Representative agrees that the Parent Indemnified Person is entitled to receive, in which case, solely for purposes of determining the amount to be distributed from the Account, Stockholders’ Representative shall be considered to dispute that the Parent Indemnified Person is entitled to receive the balance of the Claim Amount.

                       (c)    "Closing Date" means the date of this Agreement.

                       (d)    "Escrow Shares" shall mean the shares of common stock of Parent deposited by Parent with Escrow Agent as set forth on Schedule A hereto pursuant to Section 3 of this Agreement (such shares, the "Initial Escrow Shares"), together with any other stock dividends or other assets that may from time to time become included in the Escrow Shares.

                       (e)    "Escrow Period" shall mean the period beginning on the date of this Agreement and ending on the eighteen-month anniversary of the Closing Date.

                       (f)    "Estimated Claim Amount" shall mean the amount designated by the Parent Representative to be the amount of any Claim for which a Claim Notice has been delivered.

                       (g)    "Joint Written Direction" shall mean a written direction executed by the Representatives and directing Escrow Agent to disburse all or a portion of the Escrow Shares or to take or refrain from taking an action pursuant to this Escrow Agreement. If the Joint Written Direction directs the Escrow Agent to disburse some, but less than all, of the Escrow Shares, then the Joint Written Direction shall specify the number or amount of Escrow Shares to be so disbursed.

                       (h)    "Representatives" shall mean Parent and the Stockholders’ Representative.

                2.    Interpretation .. The descriptive headings of the several Sections and subsections of the Agreement are inserted for convenience only and shall not be a part of the Agreement for purposes of interpretation or otherwise. Section and subsection references contained herein are references to Sections and subsections of this Agreement unless otherwise specified. Terms such as "herein," "hereunder" and "hereof" refer to this Agreement as a whole and not to any specific section or subsection. With respect to all terms in this Agreement, the singular includes the plural and the plural the singular, and words importing any gender include the other genders. Parent and Stockholders’ Representative may be referred to herein as a "Party" or the "Parties." Capitalized terms not defined herein are as defined in the Underlying Agreement.

                3.    Appointment; The Account.

                       (a)    The Transaction Parties hereby appoint Escrow Agent as their agent, to maintain the Account (as defined below), to receive, hold and disburse the Escrow Shares (as defined below) and to perform the other duties expressly set forth herein, and Escrow Agent hereby accepts such appointment on the terms and conditions set forth in this Agreement. Escrow Agent shall account for the Escrow Shares separately from its funds and the funds of other customers. Escrow Agent shall have the sole power of withdrawal from the Account.

or to such other address as to any party hereto as such party shall designate by like notice to the other parties hereto.

IN WITNESS WHEREOF, the parties, by their duly authorized officers, have executed this Escrow Agreement as of the date set forth above.

THIS SECURITY AGREEMENT ("Agreement") is made as of this ____ day of ____, 2008, by and between SigmaSYS Corp., a Delaware corporation ("SigmaSYS"), Sandy L. Hoover, Trustee of the Exemption Trust, a sub-trust of the Robert T. Stewart Separate Property Trust dated March 17, 2003 (the "Exemption Trust"), Sandy L. Hoover, Trustee of the Sandy L. Hoover Trust, a sub-trust of the Robert T. Stewart Separate Property Trust dated March 17, 2003 (the "Q-Tip Trust" and, together with the Exemption Trust, each a "Secured Party"), and Sandy L. Hoover (the "Secured Party Representative").

For good and valuable consideration, the receipt of which is hereby acknowledged, and intending to be legally bound, the parties agree as follows:

            1.    SigmaSYS grants to the Secured Parties a security interest in its Accounts, Chattel Paper, Deposit Accounts, Documents, Equipment, Fixtures, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter of Credit Rights, Payment Intangibles and Supporting Obligations and all Proceeds, all now owned and hereafter acquired and all proceeds thereof, as well as all now existing and hereafter acquired books, records, writings, information and other property relating to, embodying, incorporating or referring to, any of the foregoing (the "Collateral"). Capitalized terms used but not defined in this Agreement have the respective meanings given them in the Delaware Uniform Commercial Code as the same may be amended from time to time.

            2.    The security interest is granted to secure the payment by inTEST Corporation, a Delaware corporation ("Parent") of (i) Parent’s promissory note to the Exemption Trust of even date with this Agreement and (ii) Parent’s promissory note to the Q-Tip Trust of even date with this Agreement (collectively, the "Notes"), which Notes have an aggregate original principal amount of $_____________ (the "Obligations"). Upon the repayment of all of the Obligations, the security interest created hereby shall terminate and all rights in and to the Collateral shall revert to SigmaSYS and the Secured Parties will, at the expense of SigmaSYS to the extent permitted by law, execute and deliver to SigmaSYS such documents as SigmaSYS reasonably requests to evidence the termination of such security interest and the release of such Collateral.

            3.    SigmaSYS hereby covenants, represents and warrants as follows:

                   (a)    SigmaSYS is the sole owner of and has good and marketable title to the Collateral (or, in the case of after-acquired Collateral, at the time SigmaSYS acquires rights in the Collateral) and, except as otherwise disclosed in writing to Secured Party Representative, no person has (or, in the case of after-acquired Collateral, at the time SigmaSYS acquires rights therein, will have) any right, title, claim or interest (by way of security interest, mortgage, pledge, lien, charge or other encumbrances in), against or to the Collateral, except for:

                            (i)    any statutory lien for taxes not yet due, any statutory lien of a landlord, carrier, warehouseman, mechanic or materialman incurred for sums not yet due, purchase money claims and claims securing retail payments under capital lease agreements, and liens that are immaterial in character, amount and extend and which do not materially detract from the value or interfere with the present use of the properties they affect (the foregoing, collectively, "Permitted Encumbrances"); and

                            (ii)   liens junior in priority to the Secured Parties’ security interest in the Collateral ("Junior Liens").

                   (b)    The aggregate book value of the Collateral that is not subject to Junior Liens shall, as of the last day of each calendar quarter while either of the Notes remains outstanding, be not less than One Hundred Ten Percent (110%) of the aggregate outstanding principal amount of the Notes.

                   (c)    SigmaSYS hereby agrees to allow, at all reasonable times, and from time to time, without the necessity of any prior notice or demand, each Secured Party by or through any of its officers, agents, attorneys, accountants, or other representative, to examine or inspect the Collateral wherever the same may be located and to examine, inspect, and make copies of SigmaSYS’s books and records respecting any or all of the Collateral.

                   (d)    SigmaSYS shall pay all taxes and assessments upon the Collateral promptly when due unless reasonably contested in good faith.

                   (e)    To the knowledge of SigmaSYS after diligent inquiry, all information heretofore, herein or hereafter supplied to the Secured Party Representative or to either Secured Party by or on behalf of SigmaSYS with respect to the Collateral is accurate and complete in all material respects.

                   (f)    The execution, delivery and performance of this Agreement are within the corporate power of SigmaSYS, have been duly authorized, are not in contravention of law or any of the terms of SigmaSYS’s articles of incorporation or bylaws, or of any other indenture, agreement or undertaking to which SigmaSYS is a party or by which it is bound.

                   (g)    SigmaSYS shall do, make, execute and deliver all such additional further acts, things, deeds, assurances, and instruments as Secured Party Representative may reasonably require, to assure to the Secured Parties their rights hereunder in or to the Collateral.

            4.    The following shall constitute events of default (each an "Event of Default") hereunder:

                   (a)    The occurrence of a default under either Note if the same is not cured within thirty (30) days after written notice to SigmaSYS.

                   (b)    The failure of SigmaSYS to perform any covenant under this Agreement if such failure is not cured within thirty (30) days after written notice to SigmaSYS.

                   (c)    SigmaSYS becomes insolvent, a receiver is appointed for any part of SigmaSYS’s property, SigmaSYS makes an assignment for the benefit of creditors, or any proceeding is commenced either by SigmaSYS or against SigmaSYS under any bankruptcy or insolvency laws.

            5.    Upon the occurrence of any Event of Default, and at any time thereafter, each Secured Party shall have all of the rights and remedies of a secured party under the Delaware Uniform Commercial Code, including the right to sell the Collateral at public sale without the necessity of first obtaining a judicial decree authorizing sale. Such remedies shall be in addition to any other remedies provided by law or in any other document executed by SigmaSYS.

            6.    So long as no Event of Default shall have occurred and be continuing or would result from any of the following actions, SigmaSYS may in the ordinary course of its business dispose of any Collateral which constitutes tangible personal property and enforce and collect Collateral which constitutes Accounts or General Intangibles, and SigmaSYS may retain, use and apply for its corporate purposes the Collateral and proceeds thereof.

            7.    SigmaSYS hereby agrees that, so long as an uncured Event of Default continues, at any time, without presentment, or demand, and without affecting or impairing in any way the rights of Secured Party with respect to the Collateral, the obligations of SigmaSYS hereunder or the Notes, Secured Party may – but shall not be obligated to and shall incur no liability to SigmaSYS or any third party for failure to – take any action that SigmaSYS is obligated by this Agreement to do and to exercise such rights and powers as SigmaSYS might exercise with respect to the Collateral, and SigmaSYS hereby irrevocably appoints Secured Party as its attorney-in-fact to exercise such rights and powers. SigmaSYS agrees to reimburse Secured Party upon demand for any costs and expenses, including, without limitation, reasonable attorneys’ fees, Secured Party may incur while acting as SigmaSYS’s attorney-in-fact hereunder, all of which costs and expenses are included in the obligations secured hereby. SigmaSYS further agrees that Secured Party will not be responsible for any act of commission or omission, excluding willful misconduct or gross negligence, arising out of the exercise of the rights and powers of SigmaSYS by Secured Party as attorney-in-fact. SigmaSYS shall pay all costs of recording any financing statements executed in connection with this Agreement.

            8.    Each Secured Party hereby appoints the Secured Party Representative as its agent for purposes of holding and enforcing rights and remedies under this Agreement or against any Collateral, and authorizes the Secured Party Representative to take such action on its behalf and to exercise such powers and discretion as this Agreement permits, in each case with respect to each Secured Party’s respective interest in the Collateral, and Secured Party Representative hereby accepts such appointment. Each Secured Party and the Secured Party Representative acknowledges and agrees that SigmaSYS may rely on any notice from, or act of, the Secured Party Representative hereunder as the act of the Secured Parties.

            9.    Any demand or notice that either party may give to the other shall be mailed by certified mail, return receipt requested, addressed to the Secured Parties at 1723 Hacienda Place, El Cajon, CA 92020, Attn: Sandy L. Hoover (it being acknowledged that any such demand or notice delivered to that address shall constitute delivery to both Secured Parties), and addressed to SigmaSYS at c/o inTEST Corporation, 7 Esterbrook Lane, Cherry Hill NJ 08003, attn: Hugh T. Regan, Jr. Either party may change its address for notices by a notice duly given to the other. The parties shall execute and deliver all further instruments and documents and shall take any other action as may be reasonably required to more effectively carry out the terms and provisions of this Agreement. This Agreement constitutes the entire agreement between the parties concerning this subject matter and may be amended, waived, or discharged only by an agreement in writing signed by all of the parties. If any provision of this Agreement is determined by a court to be invalid, illegal or unenforceable, this Agreement shall be construed as if that provision had been amended to the extent necessary to cause this Agreement to be enforceable and to preserve the transactions contemplated by this Agreement to the greatest extent possible. This Agreement shall be binding upon and inure to the benefit of the parties and their respective personal representatives and successors. The laws of the State of Delaware shall govern the validity and construction of this Agreement, without regard to the principles of conflict of laws, and the parties submit to the jurisdiction of the courts of the State of Delaware and the venue of the U.S. District Court for the District of Delaware. Each party has participated to a significant degree in the drafting and preparation of this Agreement, and no provision shall be construed against a party on the basis of that party’s being the "drafter."

            10.   This Agreement may be executed by facsimile and in one or more counterparts, each of which shall be deemed an original but all of which counterparts collectively shall constitute one instrument. The transmission of a signed counterpart of this Agreement by facsimile or by portable document file ("PDF") shall have the same force and effect as delivery of an original signed counterpart of this Agreement, and shall constitute valid and effective delivery for all purposes.

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IN WITNESS WHEREOF, the parties have executed this Security Agreement as of the day and year first above written.